ECCP at Work

ECCP@Work Featured Articles | September 23, 2022

September 23, 2022

ECCP Online

ECCP at Work

Timely passage of 2023 budget to help PHL gov’t achieve economic goals 

THE TIMELY PASSAGE of the proposed 2023 national budget will help ensure the fulfillment of the administration’s socioeconomic agenda, leaders of the House of Representatives said as they began plenary debates on the spending plan. The proposed P5.268-trillion budget is 4.9% higher than this year’s spending plan and is equivalent to 22.2% of gross domestic product (GDP). It was submitted by the Department of Budget and Management to Congress on Aug. 22. The 2023 General Appropriations Bill (GAB) seeks to provide funding for programs and measures that support the eight-point socioeconomic agenda of the administration of President Ferdinand “Bongbong” R. Marcos, Jr., namely food security, improved transportation, affordable and clean energy, healthcare, social services, education, bureaucratic efficiency, and sound fiscal management.

ADB keeps PHL GDP forecast at 6.5% 

THE ASIAN Development Bank (ADB) has retained its growth forecast for the Philippines for this year, citing a strong rebound in domestic demand as the economy continues to reopen despite growing inflation risks. In its Asian Development Outlook (ADO) 2022 Update report released on Wednesday, the multilateral lender said it expects the country’s gross domestic product (GDP) to grow by 6.5% this year, steady from its July forecast. However, this is at the lower end of the government’s 6.5-7.5% target for this year. “The normalization of socioeconomic activity will usher the Philippine economy to a steady, pre-pandemic pace of expansion,” ADB Philippines Country Director Kelly Bird was quoted as saying in a statement.

Marcos underscores food security, agriculture, renewable energy, and climate change as top agenda in US State Visit 

Finance Secretary Benjamin Diokno joined the official delegation of President Ferdinand “Bongbong” Marcos, Jr. on the administration’s first-ever state visit in New York, United States of America (USA), where the delegation will be attending the 77th UN General Assembly. The President will be delivering a national statement to share the Philippines’ role in strengthening the international system, its vision of people-centered development, and the thrust for economic recovery, food security, and agricultural productivity. President Marcos Jr. will also be discussing with UN Secretary General António Guterres and world leaders the key priorities of his administration, which include food security, agriculture, renewable energy, and climate change. The meetings aim to explore opportunities for stronger cooperation in these areas.

ADB sees PH inflation above target until 2023 

Prices of basic goods in the Philippines could rise at faster paces until next year as supply-related concerns persist, said the Asian Development Bank (ADB) in its latest report. In its Asian Development Outlook (ADO) 2022 update published Wednesday, the ADB said it hiked its inflation forecast for the country to 5.3% this year from 4.9% in the July ADO Supplement. “Inflation is expected to remain elevated over the rest of the year due primarily to supply-side factors, including elevated global commodity prices," said ADB on its website. "Bad weather has constrained the domestic supply of some agriculture commodities, and petitions for additional transport fare increases have been submitted by transport groups to the government,” it also said.

Monetary Board Hikes Policy Rate by 50 Basis Points 

The Monetary Board decided to raise the interest rate on the BSP’s overnight reverse repurchase facility by 50 basis points to 4.25 percent, effective 23 September 2022. Accordingly, the interest rates on the overnight deposit and lending facilities were raised to 3.75 percent and 4.75 percent, respectively. The BSP’s latest baseline forecasts show that average inflation is still projected to breach the upper end of the 2-4 percent target range at 5.6 percent in 2022. The forecast for 2023 has also increased slightly to 4.1 percent. Meanwhile, the forecast for 2024 eases to 3.0 percent. In deciding to raise the policy rate anew, the Monetary Board noted that price pressures continue to broaden. The rise in core inflation indicates emerging demand-side pressures on inflation. Moreover, second-round effects continue to manifest, with inflation expectations remaining elevated in September following the approved minimum wage and transport fare increases. Nonetheless, inflation expectations continue to be broadly anchored over the medium term.

PEZA, BOC to enhance trade facilitation in ecozones

The Philippine Economic Zone Authority (PEZA) is looking to strengthen its ties with the Bureau of Customs (BOC) in a bid to enhance trade facilitation and logistics efficiency in the economic zones. “PEZA is one with the BOC and other participants in the local supply and global value chains in enhancing the ecozone business ecosystem and our overall competitiveness to make the Philippines a viable investment destination in the region,” PEZA OIC and deputy director general for policy and planning Tereso Panga said. In line with this, Panga, along with other PEZA officials, recently met with acting Customs Commissioner Yogi Ruiz, and Customs collectors assigned in the PEZA zones namely collector Alex Go for Cavite and NCR, and collector Marife Recinto for Laguna. The agencies plan to build on their partnership in terms of increasing logistics efficiency and supply chain management, and other measures for continual improvement.

House vows to OK national budget next week

Under Speaker Martin Romualdez, the House of Representatives has vowed to approve on the third and final reading next week the proposed P5.268-trillion national budget for 2023 before Congress takes a break on Oct. 1. According to Manuel Jose Dalipe, House Majority Leader, the rate of progress in the approval of the budget proposals of each government department has been “very satisfactory” and is within the timeline set by the House committee on rules that he heads. In addition to this, he said the House could terminate the floor debates and make way for the period of amendments on Sept. 28, as plenary deliberations started last Tuesday. 

ADB: PH economy to perform well despite global headwinds

Growth prospects have dimmed across Asia’s emerging economies amid sharper slowdown in major economies of the world, but the Asian Development Bank (ADB) maintained its upbeat forecast for the Philippines this year. The ADB in July revised its forecast for full-year growth of Philippine gross domestic product to 6.5 percent from the 6 percent announced in April through its Asian Development Outlook 2022 report. The July forecast was kept in an update to the report launched on Wednesday.

IKEA says holidays to boost foot traffic, sales [mention]

SWEDISH furniture retailer IKEA is expecting more foot traffic and sales in its Philippine store as the holiday season approaches, its local manager said, as the popular brand marks nearly a year of doing business in the country. “We are well prepared, stocked up for a very good Christmas business. We’re looking forward to it,” said Georg Platzer, IKEA Philippines store manager, in an interview on the sidelines of a seminar organized by the European Chamber of Commerce of the Philippines (ECCP) in Pasay City. “We are now better prepared than ever for a good business. Supply chain issues are much more under control now. We really had challenges in the beginning after opening. The months of February, March, and April were not really looking good because of so many factors that were not under our control. It’s going to be much better now,” Mr. Platzer said. He said the retail industry is waiting the whole year for the holiday season, and that IKEA is “ready to go.”

Pangandaman: 2023 budget anchored on 8-point socioeconomic agenda 

Budget Secretary Amenah F. Pangandaman underscored that the Php5.268 trillion proposed National Budget for FY 2023 was crafted based on and in support of the Administration’s 8-point Socioeconomic Agenda during the House deliberations with the Development Budget Coordination Committee (DBCC) on August 26, 2022. Anchored on the theme, “Agenda for Prosperity: Economic Transformation Towards Inclusivity and Sustainability,” the proposed budget aims to address the immediate and pressing concerns of all Filipinos in the near- and medium-term. “The administration’s first full-year budget shall serve as a springboard for the economy’s full-speed recovery and meaningful structural reform,” Pangandaman said.

Bill supporting natural gas industry filed 

Davao City First District Rep. Paolo Duterte and three other lawmakers filed a bill that seeks to provide a legal framework that will help the country's developing natural gas industry evolve into a fully grown enterprise. Duterte, along with Benguet Rep. Eric Yap and Anti-Crime and Terrorism Community Involvement and Support (ACT-CIS) Party-list Representatives Edvic Yap and Jeffrey Soriano, introduced House Bill 4097 which outlines the duties of different government agencies and commercial organizations in advancing the development of and guaranteeing a level playing field in the Philippine Downstream Natural Gas Industry. The downstream natural gas industry covers sectors involved in the transmission, distribution, supply and use of natural gas as well as the associated processes involved in its importation, storage, gas processing and distribution.

Filipinos assured of ample rice, pork supplies 

Filipino consumers can be assured of sufficient supply of rice and meat during the Christmas season, according to the Department of Agriculture (DA). In a statement, the DA said the Philippines has experienced an increase in local palay (unhusked rice) production, citing the supply outlook provided by its National Rice Program. Latest data from the Philippine Statistics Authority showed the country’s rice inventory as of July reached 2.03 million metric tons, down by 6.6 percent from 2.2 million MT in the same period a year prior. This was also a decrease of 2.7 percent from the previous month’s 2.1 million MT. The DA, however, said that the impact of the ongoing drought in China on the cost of producing palay, as well as the presence of rice varieties from other countries, might affect retail prices.

BSP: Peso weakening 'expected' over US Fed rate hikes, global risks 

The Bangko Sentral ng Pilipinas (BSP) allayed worries over the peso's freefall against the dollar, emphasizing the local currency's depreciation stems from the greenback's strength. "The current movement of the peso is expected as it largely reflects the strengthening of the dollar given the monetary policy tightening cycle of the US Fed. Now, concerns over the Ukraine-Russia conflict and its protracted impact on global supply chains, global growth uncertainty, and elevated global inflation also continue to drive investors towards the US dollar as a safe haven asset," BSP Deputy Governor Francisco Dakila Jr. said. The local currency set a new all-time low on Thursday, closing at ₱58.49 against the dollar. This breached the previous record close of ₱58 posted just a day ago. Dakila stressed such foreign exchange pressures aren't unique to the peso, citing the "pronounced weakening" among the region's currencies.

ARTA report card poll notes EODB compliance

THE Anti-Red Tape Authority (ARTA) has launched the Report Card Survey (RCS) 2.0, a tool to obtain feedback on how provisions of the Republic Act 11032 or the Ease of Doing Business (EODB) law are being followed. “All offices and agencies providing government services shall be subjected to a Report Card Survey, which shall be used to obtain feedback on how provisions of RA 11032 are being followed and how the agency is performing,” according to Undersecretary Ernesto V. Perez, Deputy Director General for Operations of ARTA, citing Section 20 of the Ease of Doing Business Law. The RCS 2.0 was launched by ARTA on Thursday. However, Perez said the pilot implementation will occur on September 23, to include data gathering and evaluation until November this year.

Marcos urges unity, innovation for economic recovery and growth 

President Ferdinand "Bongbong" Marcos Jr. has urged businesses to find new ways to forge partnerships and to boost their capabilities to contribute to economic growth that would benefit all sectors. During a dialogue with the US-ASEAN Business Council and the US Chamber of Commerce this week, Marcos emphasized the need to maximize available assets and capabilities while finding ways to enhance economic relationships. "As we reopen our borders amid the pandemic, we remain firm in our belief that stronger ties with US and ASEAN investors will lead us to a more resilient economy," Marcos added.

No more sugar imports this year — SRA

THE GOVERNMENT does not plan to import more sugar for the remainder of this crop year as output is expected to begin picking up, Sugar Regulatory Administration (SRA) chief David John Thaddeus P. Alba said. “By November, all the mills and refineries will be producing. There will be no importation until we finish stock,” Mr. Alba said at a briefing. “We don’t want to import when our mills and planters are in full (operation). While they are operating, we will never import,” he added. The current sugar crop year began on Sept. 1 and will end on Aug. 31, 2023.

Congress hears proposals for DUs, co-ops to invest in RE

THE House Committee on Energy heard proposals to incentivize distribution utilities (DUs) and electric cooperatives (ECs) to invest in renewable energy (RE) as a means of bringing down electricity prices. Nueva Ecija Rep. Rosanna V. Vergara said very few generation facilities are currently offering renewable energy. “I agree that the most expensive power is no power but P20 per kilowatt hour is also not acceptable; this is a challenge that the committee will have to face in the short term,” Ms. Vergara said. Ranulfo M. Ocampo, president of Philippine Electric Plant Owners Association said that stranded contract costs are addressed by a Department of Energy (DoE) circular on the conduct of the Green Energy Auction program. “Under this program, the DoE will conduct the bidding process to procure renewable energy for the market,” Mr. Ocampo said.

Philippines broadband speed improves in August 

Internet speed in the Philippines improved for fixed broadband subscribers in August, but mobile users suffered a decline, marred by interconnection issues among telco players. Based on Ookla’s Speedtest Global Index, mobile internet speed in the country dropped by one percent to 22.35 megabytes per second (Mbps) in August, from 22.55 Mbps in July. It said the Philippines still has a lot of catching up to meet the global median speed of 30.79 Mbps. However, fixed broadband speed in the country went up by three percent to 78.33 Mbps in August, from 75.69 Mbps in July. As such, the Philippines exceeded the global median speed of 69.14 Mbps.Ookla said the Philippines was ranked 82nd among 140 economies in terms of mobile internet speed.

Biden wants stronger ties with the Philippines under Marcos after ‘rocky times’

Biden and Marcos met in person for the first time to discuss the alliance between their countries, the situation in the South China Sea, Russia’s war against Ukraine and its impact on energy and food prices, and other matters. During the Duterte Presidency, US-Philippine relations were bumpy due to the pivot away from Manila’s traditional ally in favor of Beijing. In addition, some US lawmakers were also at the forefront of the opposition towards the supposed human rights violations during the “war on drugs,” which displeased the Philippine presidential palace. With that said, during this meeting, Marcos told Biden “that the Philippines “continue[s] to look to the United States for that continuing partnership and the maintenance of peace in our region.” and then the primary consideration of the Philippines and the guiding principle of the Philippine foreign policy is to encourage peace. 

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