ECCP at Work

ECCP@Work Featured Articles | November 25, 2022

November 25, 2022

ECCP Online

ECCP at Work

Philippines to cut tariffs on electric vehicles, parts

The National Economic Development Authority (Neda) board, chaired by President Ferdinand Marcos Jr, on Thursday approved removing  tariffs on electric vehicles (EVs) to spur demand amid high fuel costs. In a Palace briefing, Economic Planning Secretary Arsenio Balisacan said the Neda Board had endorsed an executive order to modify  the tariff rates on  e-vehicles such as passenger cars, buses, mini-buses, vans, trucks, motorcycles, tricycles, scooters, bicycles, among others. The executive order , according to Balisacan, will cut to 0 percent the most favored nation tariff (MFN) on EVs like passengers cars, buses, vans, trucks, motorcycles, and bicycles, and their parts for five years. Current import duties range from 5 percent to 30 percent.


Tax effort rises to 15.3% to GDP in Q3

The national government’s tax effort increased as of the third quarter of this year, with the country’s finance chief saying  the fiscal indicators are improving. Benjamin Diokno, Department of Finance (DOF) secretary, said in a message to reporters  the tax effort, defined as taxes as percent of gross domestic product (GDP), rose to 15.3 percent from 14.8 percent in 2021. “For the 10-month period, the Bureau of Internal Revenue (BIR) collected P1.9 trillion, up by 12.6 percent over the same period a year ago; Bureau of Customs (BOC) collected P713.5 billion, up by 35.8 percent over the same period in 2021,” Diokno said. “The national government deficit as percent of GDP for the first three quarters slowed to 6.5 percent from 8.3 percent a year ago,” he added.


‘Hot money’ swings to inflow in October

More short-term foreign capital entered than left the Philippines in October, after five straight months of outflows, Bangko Sentral ng Pilipinas (BSP) data showed on Thursday. Transactions on foreign portfolio investments registered with the central bank through authorized agent banks (AABs) posted a net inflow of $83 million in October, a turnaround from the $367.3-million net outflows seen in September. It was also a reversal of the $221.11-million net outflows in the same month of 2021. These types of investments are commonly referred to as “hot money” due to the ease by which these flows enter or leave an economy.


Marcos taps Ernesto Perez as new ARTA chief

President Ferdinand “Bongbong” Marcos Jr. has named Atty. Ernesto Perez as the new director general of the Anti-Red Tape Authority (ARTA). Perez succeeds Atty. Jeremiah Belgica who served from July 2019 to June 2022. He took his oath of office before Executive Secretary Lucas Bersamin. Prior to being appointed as chief of the anti-red tape body, Perez was Deputy Director General for Operations since 2019 and concurrent officer-in-charge of the agency since June 2022 under the Office of the President’s Memorandum Circular No. 3.


Urgent action needed in RCEP – ADB

Urgent action to unlock the benefits of the Regional Comprehensive Economic Partnership (RCEP) agreement will need to be taken by countries now amid high inflation and supply side issues, according to the Asian Development Bank (ADB). In the multilateral lender’s latest blog, ADB economist Sanchita Basu-Das said the RCEP, which is a massive trade deal involving members of the Association of Southeast Asian Nations (ASEAN) as well as trade partners China, Japan, South Korea, Australia and New Zealand, was negotiated and concluded with the expectation that it would improve economic growth and trade in the region.


Senate approves 2023 budget bill

The Philippine Senate on Wednesday realigned more than P170 million worth of agencies’ intelligence funds as it unanimously approved on final reading its version of the proposed P5.268-trillion budget for next year. Senators slashed P120 million of intelligence funds from the Education department, P20 million from the Office of the Ombudsman, P19.2 million from the Justice department, Senator Juan Edgardo M. Angara, who heads the Committee on Finance, told the plenary. They also cut the Foreign Affairs department’s intelligence budget by P5 million, the Social Welfare department by P2 million and other executive offices by P6 million. The amounts were moved to the agencies’ maintenance and operating expenses. “All within the agency because we did not want to deprive the agencies of their budgets,” Mr. Angara said.


Inconsistent policies on mining sector hit

The country’s mining companies have urged the government to address the inconsistencies in the rules governing the industry, as its growth has been stymied by policies that constantly change halfway through. “To give an example, a few months ago, there was a multinational company that came to the Philippines because we were able to lift the moratorium (on new mining deals) and the open pit ban so they are now coming back little by little, looking at opportunities,” said Gerard Brimo, vice chair of Chamber of Mines of the Philippines (COMP), who declined to disclose the name of the interested company.


Proposed JV guidelines may turn off investors

A proposal to require joint ventures (JV) between the government and private entities to secure regulatory approval for any adjustments in tolls, tariffs and other fees may discourage investors, according to stakeholders and economists. “There may be a risk. Will it be implemented in accordance with what is agreed? That’s the crux of the investors’ decision, less about the regulator coming in before the bidding, it’s more of whatever is agreed will be implemented in accordance with the agreement,” Romulo S. Quimbo, Jr., NLEX Corp. senior vice-president for communications, said in a phone interview last week. “Otherwise, it becomes uncertain for the investor, it puts them at risk. If every three years they need to ask for approval, that’s an uncertainty,” he added.


Domestic air passenger volume hits 16 million in 9 months

Domestic air travel recovered in the first nine months, with passenger volume rising to 16 million, fueled largely by the recovery in flight demand. The Civil Aeronautics Board (CAB) said yesterday that domestic passenger volume went up to 15.93 million as of September on the resurgence of travel and tourism activities. The number of domestic travelers who flew during the period surpassed the 5.53 million posted for the entire 2021 and the 6.89 million recorded for the whole of 2020. The third quarter performance was marked by elevated fuel surcharge – rising to as high as Level 12 in August – and the start of the typhoon season, both of which affected demand.


Philippine government told to cut red tape in housing development 

The Philippine government should shorten the application process for housing development projects for ease of doing business, according to a stakeholder. A home developer must go to 27 offices, get 78 permits, 146 signatures and produce 373 documents to start a subdivision housing project, Januario Jesus B. Atencio III, chairman and chief executive of Januarius Holdings, Inc., told a virtual briefing on Wednesday. “The unintended consequence of all these housing policies is the increased bureaucracies in getting licenses and permits,” he said. “The housing imbalance we experience is a supply-side issue,” Mr. Atencio said. “If it’s a supply-side issue, then we can go back to what we know about economics and find out whether it can help us find a way out.”


Digitalization seen to sustain PH brisk growth

Despite forecasts from analysts that the rate of growth of the Philippine economy will slow down after the 7.6 percent reported for the third quarter of 2022, the government is pushing for the same pace or even higher gear, according to Budget Secretary Amenah Pangandaman. “We hope to sustain this growth, if not surpass it, and we believe that enhancing our digital governance will play a crucial role in achieving this,” Pangandaman said in a statement. She added that the institutionalization of budget reforms and digitalization of public financial management or PFM have been her top priorities since assuming office at the Department of Budget and Management. Pangandaman said that by investing in digital infrastructure, the government could improve its revenue collection as digitalization promotes efficiency, transparency, and accountability in the use of public funds.


Philippines lags behind peers in swapping out coal energy 

One year after its global debut in November 2021, the Asian Development Bank’s (ADB) Energy Transition Mechanism (ETM) intended to fast-track the switch from fossil fuels to clean energy has gained wider support and reached initial but tentative steps toward implementation. However, the ETM in the Philippines remains on the drawing board, still at the stage of studying the feasibility of the early retirement of coal-fired power plants while promoting the development of more renewable energy resources. In an update on the ETM, the ADB said the Philippines was also making preparations for the implementation of a CIF ACT program, referring to the Climate Investment Funds Accelerating Coal Transition.


OCTA warns of possible rise in COVID-19 cases as NCR positivity rate spikes

The OCTA Research Group on Thursday raised the alarm about the rising COVID-19 cases in Metro Manila following the nearly 2% increase in the weekly positivity rate in the National Capital Region (NCR). OCTA fellow Guido David said the seven-day positivity rate in the NCR spiked to 9.2% as of Nov. 22 from 7.4% on Nov. 15. He explained the region could see a repeat of the rise in cases back in June if the positivity rate, which refers to the percentage of tested people with positive results, continues to go up. "Unless the trends change, this looks like the start of another wave of infections in the NCR as cases will likely start increasing again," he said in a Twitter post. In a separate interview at the Laging Handa briefing, David says the observed increase is not a cause for alarm.


₱47M allocated in proposed 2023 budget to study gov’t workers’ salary, DBM says

Some ₱47 million has been allocated to study government compensation structures under the proposed 2023 budget of the Governance Commission for GOCCs (GCG), the Department of Budget and Management said Thursday. This was DBM’s response to calls by groups of government workers who rallied outside its central office in Manila on Nov. 23 for an increase in minimum wage amid the rapidly increasing cost of goods. In a statement, the DBM said around P47 million has been allotted under the 2023 National Expenditure Program to fund a GCG study on “the government compensation structure of the different national government agencies and GOCCs [government-owned and controlled corporation].”


DOLE: Employers must follow law, give workers 13th month pay

The Department of Labor and Employment (DOLE) reminded employers to provide their employees with the law-mandated 13th month pay before Dec. 25. “We don’t have an update yet because last year, if you remember, DOLE and DTI had a partnership in providing DTI a loan facility for the 13th month pay,” Labor Assistant Secretary Dominique Rubia-Tutay. Tutay also said there has been no update if DOLE will give assistance to micro, small and medium enterprises on providing the 13th month pay to their employees.


PH with one of the highest income inequality rates among 63 nations, says World Bank

The Philippines ranked 15th out of 63 countries in terms of income inequality, the World Bank (WB) found in a 2022 study. "Disparities in income and consumption continue to be higher in the Philippines than in neighboring countries. With an income Gini coefficient of 42.3% in 2018, the Philippines ranks 15th of 63 countries for which data on income inequality are available," the WB wrote in a report released on Thursday. The Gini coefficient is a statistical measure to represent income inequality in the context of a country or social group. "Of EAP [East Asia Pacific] countries for which data are available for 2014-19, only in Thailand is income inequality greater than in the Philippines," the report continued.


BOI to set conditions on CARS extension

The Board of Investments (BOI) has discounted the possibility of opening the third slot of the Comprehensive Automotive Resurgence Strategy (CARS) to a new applicant even as it has yet to finalize the extension of the program for the existing participants. Ceferino Rodolfo, BOI managing head, told reporters in a briefing the agency will set a condition for the three-year extension being sought by Toyota Motor Philippines Corp. for Vios and Mitsubishi Motor Philippines Corp. for Mirage. But Rodolfo said the government will not increase the P27-billion budget allotted for CARS. “We have yet to know how much longer we  need to extend. We have to know (what we can get)  in return.

  • Europe-PH News

  • April 05, 2024

    Unleash Hell in Makati: The Ultimate MMA Festival Showdown at Kombat Sports Kalayaan!

    Get ready to witness the ultimate showdown as Kombat Spo... Read More

  • March 18, 2024

    Milestone Achieved: ECCP Celebrates Restart of EU-Philippines FTA Negotiations

    Manila, Philippines – The European Chamber of Commerce of the Phil... Read More

  • March 14, 2024

    Mazars C-Suite Barometer 2024

    With insights from around 800 executives across 30 countri... Read More