Pandemic shaved P3 trillion from economy—NEDA

The pandemic has prevented the Philippine economy from breaching the P20-trillion mark in terms of its nominal GDP, according to the National Economic and Development Authority (Neda). In an online forum on Monday, Neda Undersecretary for Policy and Planning Rosemarie G. Edillon said if it weren’t for the pandemic, the country’s GDP would have already reached P22 trillion. Edillon said this meant that the pandemic’s cost to the economy is around P3 trillion to P4 trillion. As of 2021, the country’s GDP in nominal terms reached P19.4 trillion, 99.4 percent of the P19.5-trillion GDP in 2019.

Moody’s retains stable outlook for Philippine bank

Easing COVID restrictions may further improve the operating environment and slow the growth of problem loans of Philippine banks, according to Moody’s Investors Service. In its latest banking system outlook for the Philippines titled “Recovering Economy and Profitability Support Stable Outlook,” Moody’s maintained the stable outlook for the country’s banking system. With the further easing of measures to contain the pandemic, the debt watcher said the Philippines’ operating environment may stabilize further amid the recovery in consumer spending and investments.

MSMEs urged to use preferential trade arrangements

Micro, small and medium enterprise (MSME) exporters should take advantage of the Philippines’ preferential trade arrangements to cater to more markets and further contribute to job creation, the Department of Trade and Industry (DTI) said. In a statement, the DTI said the need to improve the trade competitiveness of MSMEs was highlighted during the National Trade Facilitation workshop organized by the Bureau of Customs last April 4 to 6, under the ARISE Plus Philippines project. Funded by the European Union, the ARISE project aims to improve the country’s trade performance and competitiveness to achieve inclusive economic growth and poverty reduction.

Changes in eligibility of incentives proposed

The Board of Investments (BOI) is proposing changes to the eligibility to incentives of economic zone developments. While the amendments are meant to encourage the development of more ecozones in the country, BOI managing head Ceferino Rodolfo said the changes will also restrict the entitlement of incentives. Rodolfo said the BOI has proposed to explicitly state in the Investment Priorities Plan (IPP) which is the transitional list of economic activities entitled to incentives for the Strategic IPP, that the development and operation of export zones and freeport zones can be registered in the Philippine Economic Zone Authority (PEZA) and other investment promotion agencies (IPAs).

UNESCAP: PHL to grow past 6% in 2022, 2023 as recovery gains

The Philippine economy is projected to grow above 6 percent as the regional and global economies continue to recover, according to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). Based on the Economic and Social Survey of Asia and the Pacific for 2022, the Philippines is projected to post a growth of 6.3 percent this year and 6.7 percent next year.

PHL FDI dips 16% in January on new Covid jitters

Long-term investments made by foreign investors to the Philippines started the year in decline due to investor concerns on the resurgence of Covid-19 cases in the country. The Bangko Sentral ng Pilipinas (BSP) reported that foreign direct investments (FDI) to the country hit a net inflow of $819 million in January, declining by 16 percent from the $975 million net inflows posted in the same month last year. 

Creating new cities, provinces defeats impact of ‘Mandanas’

TO maximize the increased financial resources that the local government units (LGUs) are getting starting this year under the SC Mandanas ruling, a senior lawmaker has called for a freeze on the creation of new cities and provinces. In a statement, Camarines Sur Rep. Luis Raymund Villafuerte said the creation of new cities and provinces will merely cancel out the positive impact of the high court’s ruling on the financial viability of LGUs.

PHL growth forecast upgraded despite risks

The Philippine economy is expected to grow above 6% this year, according to revised estimates by the ASEAN+3 Macroeconomic Research Office (AMRO) and United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) released on Tuesday. However, the upgraded growth projections are still below the government’s 7-9% target this year. In its latest regional economic outlook report, AMRO said the Philippines’ gross domestic product (GDP) is projected to expand by 6.5% this year, slightly higher than the 6.2% estimate given in January. The UN ESCAP, on the other hand, said Philippine GDP is expected to grow by 6.3% this year, a tad better than the previous estimate of 6%.

Inflation may breach BSP target by 2nd half

Inflation could breach the central bank’s 2-4% target in the second half due to the surge in global oil prices, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Tuesday. “Inflation is seen to settle above the target range in the second half of 2022 due to elevated global oil and nonoil prices as well as positive base effect,” he said at an online briefing. “Subsequently, inflation is projected to decelerate back to within the target in the first quarter of 2023, before steadily decelerating in the remaining quarters of 2023 as oil and nonoil prices are expected to taper off,” he added. Headline inflation quickened to 4% in March from 3% in February, matching the upper end of the BSP’s 2-4% target. This was driven by the impact of the Russia-Ukraine war on oil prices.

AS OF MARCH: 69% of 2022 budget released

The Department of Budget and Management (DBM) has released 69.4 percent of the full year 2022 budget as of end-March, the agency’s data showed. According to data posted on its website, the DBM has released P3.48 trillion of the P5.02 trillion 2022 obligation program as of March 31. The remaining balance for the year is P1.54 trillion. Allotment releases to departments as of March 2022 amounted to P2.72 trillion, or 94.4 percent of the 2022 program. These include funds allocated for agencies in the executive branch, congress, the judiciary and other constitutional offices. Releases from special purpose funds (SPFs) amounted to P150.94 billion, or 33 percent of the full year program, the DBM data showed.

PEZA, BIR in talks on full entitle of perks

The Philippine Economic Zone Authority (PEZA) is in discussions with the Bureau of Internal Revenue (BIR) on the full entitlement of incentives of registered business enterprises (RBEs) implementing up to 30 percent [off site] work. PEZA deputy director-general Tereso Panga said the agency is pushing for incentives if locators are able to comply with the minimum 70 percent export threshold and minimum 70 percent workers onsite under a recently-approved PEZA board resolution allowing hybrid work until September 2022.

FIRB flags low take-up on fiscal perks, CREATE

The Cabinet-level Fiscal Incentives Review Board (FIRB) has flagged the “low utilization rate” of its online registration and incentives application portal for investors or enterprises, as well as limited awareness on the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law among stakeholders. As of February 14, only 45 accounts were created in its Fiscal Incentives Registration and Monitoring System (FIRMS), according to Finance Assistant Secretary and FIRB Secretariat Head Juvy Danofrata.

Tourists from abroad exceed arrivals in 2021

Travelers from the United States continued to lead the total number of foreign tourists arriving in the Philippines. Data from the Department of Tourism (DOT) showed visitor arrivals in the country reached 215,831, already exceeding the number of total inbound travelers  of some 164,000 in full-year 2021.

PEZA allows 30% WFH for registered IT-BPOs, RBEs until Sept. 12

Philippine Economic Zone Authority (PEZA) Director General Charito Plaza has announced that the agency is accepting applications from PEZA-registered information technology-business process outsourcing (IT-BPOs) and registered business enterprises (RBEs) for the hybrid work arrangement. PEZA-registered IT-BPOs and RBEs that cannot immediately return to office (RTO) even after April 1 can request a Letter of Authority (LOA) from PEZA with the needed requirements.  “Now that we are returning to normal, our government wants economic activity to also return to normal so this the solution of the PEZA –the 70-30 hybrid work scheme,” Plaza said. PEZA has been issuing Letter of Authorities (LOAs) to its interested registered enterprises applying for a hybrid operation prior to the coronavirus disease 2019 (Covid-19) pandemic. 

High prices seen cooling PH ’22 GDP growth

The Philippines’ mainly consumption-driven economic growth will be beset by high inflation and shrinking savings amid the prolonged COVID-19 pandemic, UK-based think tank Pantheon Macroeconomics said. In a report on Friday, Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco said that “sales volumes in the Philippines are plateauing below the [pre-pandemic] level, disconcertingly,” citing the volume of net sales index in the February monthly integrated survey of selected industries (Missi) report on Thursday.

DOF pushes land valuation reform before Duterte is gone

MANILA, Philippines—Passing the long-pending land valuation reform bill would allow local government units (LGUs) to tap property taxes as a more reliable revenue source, the Department of Finance (DOF) said on Friday (April 8). In an economic bulletin, the DOF’s chief economist and former undersecretary Gil Beltran noted that public expenditures at the start of 2022 were enlarged by the nearly one-fourth bigger share of local government units (LGUs), now called national tax allotment (NTA), in this year’s P5.02-trillion national budget.

Philippine exports jump in February as global demand picks up

The country’s trade-in-goods deficit narrowed in February as exports grew by its fastest pace in six months on stronger demand, while growth in imports slowed. February merchandise export receipts climbed 15% year on year to $6.159 billion, preliminary data from the Philippine Statistics Authority showed on Friday. It picked up from the revised 9% growth in the previous month and a turnaround from the 1.4% decline in February last year. Export growth that month was the quickest in six months or since August’s 18.9% expansion.