ECCP at Work

ECCP@Work Featured Articles | July 1, 2022

July 01, 2022

ECCP Online

ECCP at Work

Bongbong Marcos: Food sufficiency, infrastructure among priorities of 'comprehensive' economic plan

President Ferdinand “Bongbong” Marcos Jr. has committed to working on the country’s economic recovery from the COVID-19 pandemic in his inaugural address, listing some of his administration’s priority sectors. “We are presently drawing up a comprehensive all-inclusive plan for economic transformation. We will build back better by doing things in the light of the experiences that we have had, both good and bad,” Marcos said in his first speech as chief executive.

S&P retains Philippine GDP growth outlook for 2022

S&P Global Ratings kept its gross domestic product (GDP) growth forecast for the Philippines at 6.5 percent for this year, but said scarring is largest in the country, as output would remain below pre-COVID trend in several Asia-Pacific economies. In a report, the debt watcher said the projected GDP growth for the Philippines this year is the third fastest in the region after India’s 7.3 percent and Vietnam’s 6.6 percent. The forecast is also faster than the projected 4.2 percent GDP expansion in the region for 2022, slower than the earlier projection of 4.6 percent.

NEDA bats for climate change, smart infrastructure policies under Bongbong Marcos admin

Addressing climate change and constructing smart infrastructure must take center stage in the new Philippine Development Plan spanning from 2023 to 2028, National Economic and Development Authority (NEDA) officials said. “It has already been expressed by our Secretary that the PDP will really revolve on climate change when we developed it. And I think Secretary [Arsenio] Balisacan really recognized this also because he has also been alluding to really have climate change as a particular challenge in all development activities,” NEDA Undersecretary Mercedita Sombilla said in a virtual briefing.

Foreign investment negative list updated

The order, signed on June 27, largely maintained the status quo, which bars foreign equity in mass media except recording and the internet business. It also reserves to Filipinos the practice of professions, cooperatives, small-scale mining, operation of private detective, watchmen, or security guard agencies, the use of marine resources in archipelagic waters, and small-scale use of natural resources in rivers, lakes, bays and lagoons.

Inflation, growth Challenges to weigh on Marcos admin

The incoming Marcos Jr. administration faces risks of unrest due to high food prices as well as slower economic growth as public spending lagged at the start of this year, think tanks said. Despite uncertainty wrought by current global market conditions, incoming Socioeconomic planning Secretary Arsenio Balisacan said gross domestic product (GDP) growth of 6.5-7.5 percent for 2022 would be “respectable.” Outgoing President Duterte’s economic team had set a downscaled 7-8 percent GDP growth target for this year. “The rising cost of living will make life hard for the victor of the Philippines’ presidential election, Ferdinand ‘Bongbong’ Marcos Jr.,” global risk intelligence firm Verisk Maplecroft said in its political risk outlook 2022 report.

BSP sees inflation accelerating between 5.7% to 6.5% in June

Inflation could breach 6% this June amid higher commodity prices and the weaker peso, latest Bangko Sentral ng Pilipinas (BSP) estimates show. The BSP said it expects inflation to settle within the 5.7% and 6.5% range this month. This range surpasses May’s 5.4% pace, an over-three-year high, and the BSP’s target band of 2% to 4% for the entire 2022.

World Bank creates fund to better prevent, respond to pandemics

WASHINGTON, United States — The World Bank's board on Thursday approved creation of a fund meant to finance investments in strengthening the fight against pandemics. The fund will support prevention, preparedness and response (PPR), with a focus on low- and middle-income countries, the bank said in a statement. "The devastating human, economic, and social cost of Covid-19 has highlighted the urgent need for coordinated action to build stronger health systems and mobilize additional resources," it said. The World Bank added that the fund, which it aims to open later this year, was developed under the leadership of the United States, Italy and Indonesia as part of their G20 presidencies, and with broad support from the G20. It will be used in a number of areas, including disease surveillance, with more than $1 billion in commitments already announced.

Government debt load eases in May

MANILA, Philippines — After repaying its debt to the Bangko Sentral ng Pilipinas, the national government saw its obligations ease in May, but concerns remain as mounting obligations threaten to limit the state's spending choices. Treasury data released on Friday revealed the state's debt stock trimmed 2.1% month-on-month to P12.5 trillion in May. Of the outstanding debt levels, 69.7% came from domestic sources while 30.7% came from external creditors. Arresting the growth of the debt pile was the result of the national government's P300 billion repayment to the BSP, which lent money to that state to help it fund its coronavirus programs. The loan was due in June but the government paid it in advance in May.

No longer a duopoly, Philippines’ mobile market sees improved 4G, 5G availability – Ookla

MANILA, Philippines — Social media-savvy Philippines has long contended with perennial issues of low mobile internet speeds. But a report by internet analytics firm Ookla found that the country is seeing improved 4G and 5G availability, linking it to the disrupted duopoly of the Filipino mobile market.  Using Speedtest Intelligence data, Ookla found that 4G Availability — the proportion of users on all devices who spend the majority of their time connected to 4G technology — improved to 84.8% in the first quarter of 2022 from 80.6% in the same period last year.  While Ookla measured the time users spent on 4G technology, the internet analytics firm said “operator’s network coverage is just one part of the story,” adding that other factors such as compatible handsets, SIMs and tariffs are also important to consider.

‘Philippines to lead ASEAN in growth this year’

MANILA, Philippines — The Philippines is expected to post the strongest economic growth in Southeast Asia this year as domestic demand continues to recover even amid rising inflationary pressures. GlobalData, a leading data and analytics company in the UK, said gross domestic product (GDP) in the country would likely grow seven percent this year from the 5.7 percent in 2021. While the GDP expectation settled at the lower end of the government’s revised seven to eight percent target, this is still the highest growth expected in Southeast Asia. Apart from the Philippines, robust growth is also seen in Malaysia at 6.7 percent, Vietnam at 6.6 percent, Brunei at 5.9 percent and Indonesia at 5.3 percent. Myanmar is expected to record the lowest GDP at 1.6 percent. GlobalData said recovering domestic demand and trade partnerships will drive growth in the region. ASEAN GDP growth is forecast to rebound at 5.2 percent from last year’s weak performance of just 2.9 percent.

Meralco sets aside P2.34 billion for expansion projects

MANILA, Philippines — Manila Electric Co. (Meralco) plans to spend over P2 billion to implement expansion projects while relocating its facilities affected by government projects under the Build Build Build (BBB) program. Meralco is asking the Energy Regulatory Commission (ERC) to approve its P2.34-billion capital expenditure (capex) program for the expansion projects of its distribution system. Broken down, the power distributor is planning to spend P502.13 million for projects aligned with the PNR North 1 (Tutuban-Malolos), P127.46 million for projects aligned with the PNR North 2 (Malolos-Clark), P421.02 million for projects aligned with the PNR South Commuter (Solis-Calamba), and P1.29 million for project aligned with the PNR South Long Haul (Manila-Sorsogon, Batangas).

Asian markets struggle as traders gripped by recession fears

HONG KONG – Asian markets struggled again Friday following another selloff on Wall Street fuelled by recession fears, with warnings of a bleak outlook for the global economy as central banks slam on the brakes to battle soaring inflation. Data showing US consumers — the backbone of the world’s top economy — were growing increasingly reticent about spending dealt a fresh blow to equities Thursday, with the S&P 500 suffering its worst January-June since 1970. With the war in Ukraine showing no sign of ending — keeping energy costs elevated — there is an expectation that borrowing costs will continue to rise and send economies into recession. “If anyone thinks that equities can rally into the back of the year, they are making the assumption that the Fed is going to let go of its entire focus on price stability and step back from that,” Seema Shah, at Principal Global Investors, told Bloomberg Television.

PSEi dives as inflation concerns welcome Bongbong Marcos

The benchmark Philippine Stock Exchange Index (PSEi) surrendered most of the gains over the past four sessions on Thursday after Finance Secretary Benjamin Diokno warned inflation could reach up to 6.5 percent in June. The PSEi fell 2.34 percent, or 147.76 points, to 6,155.43 while the broader All Shares index sank 1.56 percent, or 52.89 points, to 3,336.23. Diokno, who vacated his post as Bangko Sentral ng Pilipinas governor Thursday to take over a new role as finance secretary, said in a series of tweets yesterday that June inflation was expected to settle between 5.7 percent and 6.5 percent. The stock market plunge also came as the son and namesake of the ousted dictator Ferdinand Marcos was inaugurated as the country’s 17th president. Marcos Jr. has yet to detail concrete plans to cushion price hikes amid huge government debts and worries over a global recession.

Gov’t planning to next open renewable energy sector to foreigners

The government is planning to open the renewable energy (RE) sector to foreign investors, according to state planning agency National Economic and Development Authority (Neda). “In the future, we also intend to liberalize more sectors like renewable and inexhaustible energy sources such as wind, tidal, solar to help address the looming power crisis and climate change concerns,” outgoing Socioeconomic Planning Secretary and Neda chief Karl Kendrick Chua said in a statement.

NEDA: Additional taxes, growing the economy can help fund gov't priorities if budget not enough

The administration of President-elect Ferdinand “Bongbong” Marcos Jr. must put importance on spending on government priorities within the prescribed budget cap, but it could still take certain steps to generate additional funding should this fall short, according to the National Economic and Development Authority (NEDA).

Give BPOs flexibility to choose own IPA, says industry group

Firms belonging to the information technology and business process management (IT-BPM) industry must be given the authority to register with the investment promotion agency (IPA) of their choice for ease of doing business, the IT and Business Process Association of the Philippines (IBPAP) said. In statement on Wednesday, the industry group said it was crucial for investors and locators to have “clear and consistent legislation that will ensure minimal disruptions to their business operations.” House Committee on Ways and Means Chair Joey Salceda earlier suggested to transfer IT-BPM companies under the supervision of the Board of Investments (BOI) from the Philippine Economic Zone Authority (Peza) to be able to access “more flexible” enhanced deductions system under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. 

PH shelves crucial Metro Manila bus rapid transit project

Amid problems plaguing the day-to-day commute of Filipinos, the government has scrapped a much touted bus rapid transit (BRT) line in Metro Manila having been overshadowed by slow progress, lack of will as well as the effect of the pandemic. The World Bank had agreed with the government to cancel the full undisbursed balance for the $64.6-million loan it approved in 2017 for the Metro Manila BRT Line 1 project. Only $100,000 worth had been disbursed so far from the loan that will expire this coming November. “Despite the renewed commitment from government counterparts, project implementation remained slow during the last three years. The project has zero procurement activity completed,” the World Bank said. The Department of Finance has likewise submitted a formal cancellation request last June 21 for the $64.5 million in still undisbursed loans.

DA SAYS: ‘PH needs to import more rice, sugar’

The Philippines has no choice but to continue to import more rice and sugar due to lower local production. In one of his last policy statements, outgoing Agriculture Secretary William Dar will leave to his predecessor, no less than President-elect Ferdinand Marcos Jr., the arduous task of ensuring sufficient supply of these commodities through importation at a time of rising costs and strengthening dollar. According to Dar, farmers have been using less fertilizer due to high cost, resulting in low production. Dar told a briefing yesterday the country historically brings in up to 2 million metric tons (MT) of imported rice but said this volume could be raised by the next administration. “In times of crisis, we should not be complacent, I’d rather we can go beyond that,” Dar said, adding he is aware some quarters may be against his views. “We have to secure a much lower price of rice during this crisis,” he said. Dar said about 1.5 million MT of rice have arrived and 500,000 MT will arrive between July and the end of the year. “Hopefully, the incoming president will decide soon if we will import beyond the 500,000 MT,” Dar said. He added the next administration must allot P15 billion in fertilizer subsidies for rice farmers to keep the current level of production.

P15-B fertilizer subsidy sought for rice farmers

The government may need to increase the budget for fertilizer subsidies for this year or the Philippines may end up with a reduction in palay (unhusked rice) output, the Department of Agriculture said. In a press briefing on Wednesday, outgoing Agriculture Secretary William Dar said the incoming administration needs to set aside P15 billion to sustain the record-high production of rice farmers. The country’s rice production in 2021 reached 19.96 million metric tons (MT), exceeding the previous record high level of 19.29 million MT last year, data from the Philippine Statistics Authority showed. “According to the latest calculations if we want sustained level of productivity and production volume like last year if not better 19 million MT, and with the balanced fertilization strategy reducing 50 percent of chemical fertilizer with biofertilizer, you need to spend P15 billion,” Dar told reporters. The agency said the first-semester palay yield decreased by 6.8 percent. This translates to a reduction of 1.1 million MT to 1.3 million MT or almost 842,000 MT of rice.

Electronics sector hurting — SEIPI

Spiraling costs brought by Russia’s invasion of Ukraine are hampering the operations of the local electronics industry in spite of increased competitiveness due to the weak peso, according to the largest group of foreign and local electronics companies in the Philippines. “Some suppliers of power have increased their prices as well in response to the shortage of coal,” he said. “It’s really very painful right now. We’re still trying to recover from the impact of the pandemic and yet these factors, notwithstanding the devaluation to the peso, is just creating havoc,” Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said.

DOH: National vaccination days to continue under Marcos admin

The Department of Health (DOH) said the nationwide vaccination drive during the administration of President Rodrigo Duterte will continue under President-elect Ferdinand "Bongbong" Marcos Jr.'s leadership. DOH Undersecretary Vergeire, however, said new, long-term solutions must now be considered.

Domestic tourism in PH increased in 2021 – DOT

Domestic tourism in the Philippines experienced an increase in 2021 as the industry continues to recover from the COVID-19 pandemic. According to the 2021 Philippine Tourism Satellite Accounts report released on Tuesday, 37,279,282 domestic travels were recorded last year. The tally is a 38.16% growth from the 26,982,233 domestic trips logged in 2020, the year when the COVID-19 pandemic ravaged the country. However, the 2021 domestic travels figures are still lower than the pre-pandemic numbers. The Department of Tourism (DOT) tallied about 122 million domestic trips in 2019.

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