ECCP at Work

ECCP@Work Featured Articles | December 6, 2022

December 06, 2022

ECCP Online

ECCP at Work

More foreign business groups urge zero duty on all EVs

American, Japanese, Korean and Australia-New Zealand business groups in the country have joined the call of European companies to make the government’s planned temporary zero duty privilege on the importation of electric vehicles (EVs) be more inclusive by opening it to all countries and for all types of EVs. At the press conference for the 11TH Arangkada Philippines Forum, which will happen on Dec. 6 with the theme with the theme “Reform, Rebuild, Recover”, representatives from the American Chamber (AmCham) of Commerce of the Philippines, Japanese Chamber of Commerce, Korean Chamber of Commerce, and the Australia-New Zealand Chamber aligned their position with the EU Chamber of Commerce of the Philippines (ECCP).

DBCC trims growth target for 2023

The Philippines' gross domestic product (GDP) growth goal for 2023 was lowered because of the expected slowdown in the world economy. Finance Secretary Benjamin E. Diokno said at a briefing that the growth goal for next year was lowered because the global economy was slowing down. Kristalina Georgieva, the head of the International Monetary Fund (IMF), said last week that global growth might fall below 2% in 2023 because of the war between Russia and Ukraine and a slowdown in the US, Europe, and China. In October, the IMF cut its growth forecast for the world for 2023 from 2.9% to 2.7%. In July, it was 2.9%. Even though the goal for next year is lower, Socioeconomic Planning Secretary Arsenio M. Balisacan said that the economy of the Philippines "remains one of the bright stars in Asia."

PH inflation climbs to 8% in November

The Philippine Statistics Authority (PSA) reported an increase in the inflation rate in November at 8%, which is faster than the 7.7% inflation rate in October. This occurrence falls into the accurate prediction of the Bangko Sentral ng Pilipinas (BSP) of an inflation rate of between 7.4% and 8.2% for November. BSP also mentioned that the rising prices are mainly due to "higher electricity rates, uptick in the prices of agricultural commodities due to severe tropical storm Paeng, and higher LPG prices."

Congress ratifies 2023 national budget

Congress approved the report of the Bicameral Conference Committee on the proposed P5.268-trillion national budget for next year. Leaders hope that President Ferdinand R. Marcos, Jr. will sign it into law before Christmas. In the consolidated version of the national budget for 2023, the Bicameral Conference Committee restored, among other things, the Department of Education's (DepEd) confidential and intelligence funds. The Senate cut the DepEd's confidential and intelligence fund from P150 million to P30 million and put the money toward the agency's maintenance and running costs. 

Gross borrowings drop 33 as of end-October

As of the end of October, preliminary data from the Bureau of the Treasury (BTr) showed that the National Government's (NG) gross borrowings had dropped by 32.7% compared to the same time last year. According to the BTr, the total gross borrowings over the last 10 months came to P1.85 trillion. This is less than the P2.75 trillion that was borrowed over the same 10 months last year. Just for the month of October, gross borrowings rose by 25.4% from the same month last year to P176.56 billion. Gross domestic borrowings fell by 31% in the first 10 months of the year, from P2.29 trillion to P1.58 trillion. Gross domestic borrowings fell by 57.6% in October, from P133.73 billion the year before to P56.73 billion. The P108.11 billion raised through fixed-rate Treasury bonds was enough to cover the P51.38 billion in T-bills that were paid off during the month (T-bonds).

Planned EO expedite strategic investments - DTI

The Department of Trade and Industry says that the planned executive order (EO) to speed up the processing and issuing of permits and licenses for strategic investments will create a good business environment in the country (DTI). In a statement released over the weekend, the DTI said that President Marcos would sign an Executive Order (EO) that sets out rules to speed up the processing and issuing of permits and licenses for strategic investments in the Philippines and the creation of a "green lane," which will lead to more good jobs for Filipinos. This happened after the DTI and Board of Investments (BOI) gave the President an Executive Order (EO) proposing the creation of a "Green Lane" and a "One-Stop Action Center" with technology for strategic investments.

Farmers reject proposal to extend low-tariff scheme for food imports [mention]

The Federation of Free Farmers (FFF) said the government should not extend Executive Order (EO) No. 171, which temporarily lowered tariffs on food imports, and instead address the domestic production side of boosting the food supply. “It will be ironic and tragic if our government ends up listening to them instead of its own farmers,” Raul Q. Montemayor, FFF national manager said via chat in response to a request to comment on the extension of EO 171, which was supported recently by various foreign chambers of commerce. EO 171 lowered tariffs temporarily on imports of corn, rice, pork, and coal. The EO, issued as an inflation-control measure, expires on Dec. 31. It was signed in May by former President Rodrigo R. Duterte. On Dec. 2, the American Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, and the European Chamber of Commerce of the Philippines issued a joint statement urging the government to extend the validity of EO 171 until 2023, saying that an extension would help address surging food prices.

BPOs eye further expansion of operations in the regions

Several business-process outsourcing (BPO) companies intend to expand their operations outside of Metro Manila and expedite their foundation in the regions. In the recently concluded Q3 2022 Philippine Property Market Briefing, Colliers Philippines observed a strong quarter-over-quarter growth in provincial office sales. Pacete said that Colliers statistics suggested an additional 63,000 square meters of office space was sold in the third quarter of 2022, bringing the total area transacted for the first nine months of the year to 145,000 square meters. Concentrix, Accenture, Teleperformance, Alorica, and the Sitel Group are currently the country's top five IT-BPM employers. Concentrix had the largest employer headcount among the 19 listed BPO providers, adding 10,000 employees in the third quarter of the year.

IT-BPM to drive jobs: report

JobsFit 2022-2025 Labor Market Information (LMI) Report, a flagship publication of the Department of Labor and Employment, says that the information technology-business process management (IT-BPM) sector will continue to drive job growth over the next 18 months. The LMI, which has information on key sectors that create jobs, emerging industries, and in-demand and hard-to-fill jobs, also found that energy, healthcare, consumer goods and industrial manufacturing, wholesale and retail trade, construction and real estate, financial services, aerospace, agro-processing, and construction are the key growth drivers. In education, the Department of Education wants to hire thousands of teachers across the country to fill open positions and have enough teachers for the 2022-2023 school year.

CAAP: 42 airports ready for holidays

The Civil Aviation Authority of the Philippines (CAAP) and the country's 42 commercial airports are ready for the holiday rush. They have put themselves on high alert in preparation for the increase in passengers over the Christmas and New Year's holidays. Eric Apolonio, a spokesman for CAAP, said that CAAP officials have worked with airlines and other government agencies at the airports, such as the Office of Transportation Security and the Philippine National Police - Aviation Security Group, to add security staff in preparation for the expected increase in passenger traffic. Due to the travel bans put in place by COVID-19 over the past two years, CAAP-run airports have seen a trend of pent-up demand for tourism this year. In 2019, CAAP airports saw a total of 29,258,258 passengers, and 2,537,774 of them traveled in December.

Sustaining GDP growth will be challenging

The Philippines may not be able to keep up the strong economic growth they had in the third quarter because they will face more challenges from outside forces next year. In its most recent quarterly report, New York-based Global Source Partners Inc. said that the country's chances of keeping a high gross domestic product (GDP) have gone down because of things that have never happened before on the outside. Even though GDP surprised with a 7.7% growth rate in the third quarter, despite high prices for commodities and rising interest rates, this is still the case. Romeo Bernardo, a country analyst at Global Source and a former undersecretary of finance, said that it was still unclear how long the rise in private spending in the third quarter would last. Other banks and multilateral lenders have also said that growth will slow down in 2023 because inflation will still be a problem and the recent rate hikes will have an effect in the long run.

Philippine export growth lag Southeast Asia

The Philippines' export growth is expected to be slower than that of most of its Southeast Asian neighbors this year and next, according to the UN Economic and Social Commission for Asia and the Pacific (ESCAP). In its report on trade in goods and services, Asia Pacific Trade and Investment Trends 2022/2023, ESCAP predicted that the value of Philippine exports of goods would drop by 0.5% this year. Other Southeast Asian countries covered by the report, like Malaysia, Singapore, Thailand, Indonesia, and Vietnam, are also expected to see an increase in the value of the goods they export this year. In the nine months leading up to September, the Philippines made $58.31 billion from exporting goods. This is 4.7% more than the $55.69 billion they made during the same time last year.

Work-from-home policy to spur demand for office space in provinces

Colliers Philippines says that the government's decision to allow 100% work-from-home (WFH) arrangements for information technology-business process management (IT-BPM) firms will increase demand for office space in the provinces as these firms try to attract more talent. In September, the Fiscal Incentives Review Board (FIRB) passed Resolution 026-22, which lets RBEs in the IT-BPO sector adopt up to 100 percent WFH arrangements by transferring their registration from the Philippine Economic Zone Authority to the Board of Investments (BOI) (PEZA). Colliers data showed that Cebu is still the most popular provincial location for BPOs, with around 34,000 sqm of office transactions. This was followed by Davao, with 21,000 sqm of office transactions, and Pampanga, with 7,000 sqm (9,000 sqm). When asked why they chose provincial locations, most of these BPO companies said that they were expanding or moving.

Customs exceeds full-year revenue target by 9.5%

By end-November, the Bureau of Customs (BoC) marked its “marked its highest collection performance in history” as it surpassed its goal for total revenue collection by 9.5% with a total of P76.77 billion. BoC also mentioned that all of its 17 collection districts had achieved their revenue targets for January to November. BoC’s revenue surplus will likely make up for other revenue-generating agencies' shortfalls, according to Finance secretary Benjamin E. Diokno. 

Ecozones underutilized but more in pipeline, NEDA’s Balisacan says

According to Arsenio M. Balisacan, secretary of the National Economic and Development Authority (NEDA) and Socioeconomic Planning, economic zones are underutilized and must be established with a greater focus on their long-term attractiveness to locators and investors. In order to ensure a thriving sector made up of "effective and cost-efficient zones," Balisacan urged other agencies to adopt a "whole-of-government approach" rather than relying simply on the Philippine Economic Zone Authority for their development (PEZA). In a separate statement, the Philippine Development Plan (PDP) for 2023 to 2027, which focuses on the digital transformation of the government and connectivity, will be presented to President Ferdinand R. Marcos, Jr. next week.

Red, yellow alerts raised over Visayas grid after four power plant outages

Last Monday, a red and yellow alert was announced in the Visayas grid by the National Grid Corp. of the Philippines (NGCP), with the red alert canceled beforehand after enough power was discovered to make up for the loss of four power plants. According to the Department of Energy (DOE), the power plants that underwent a forced outage on the Visayas grid were unit 1 of PB 101 in Iloilo; units 2 and 3 of Therma Power-Visayas, Inc.; and unit 3 of Panay Energy Development Corp. Meanwhile, the Luzon grid was also placed on yellow alert at 1 p.m. to 4 p.m. and 5 p.m. to 7 p.m. The DOE mentioned that the power plants that went on a forced outage in the Luzon grid were Calaca 2 in Batangas; Masinloc 3 in Zambales; GNPower Mariveles Energy Center Ltd. Co. Unit 1, and GNPower Dinginin Ltd. Co. in Bataan. Manila Electric Co. (Meralco) correspondingly said that interruptible load program (ILP) participants were declared following the said alerts.

House committee clears reform bill for real property valuation by LGUs

The House Ways and Means Committee approved a substitute bill that calls for uniform valuation standards and an electronic database of all real estate transactions in an effort to reform the real property valuation system to help local government units (LGUs). The Agricultural Competitiveness Enhancement Fund (ACEF)'s validity is extended by HB 2385 until 2028 and is also approved by the committee. The committee also cleared HB 23, a bill that places restrictions on passport fees, gives senior citizens and persons with disabilities a 50% discount on processing and renewal costs, prohibited the Department of Foreign Affairs from charging more than 50% of its current service fees, and imposes stricter penalties for forgery and improper use of travel documents like passport. 

Target for training tourism workers set at 100,000

Secretary Maria Esperanza Christina G. Frasco mentioned at the recent 22nd World Travel and Tourism Council Global Summit that the Department of Tourism (DoT) intends to train 100,000 tourism professionals by 2023 in order to enhance the visitor experience. Additionally, Philippine Statistics Authority (PSA) data showed a 4.1% increase in jobs in the tourism industry last June 2022. An estimate of 9.2% growth is also observed in the tourism direct gross value added (TDGVA) in 2021, which is equivalent to a 5.2% share of gross domestic product. In partnership with the Tourism Infrastructure Enterprise Zone Authority, the DoT said in a separate announcement that it is planning to construct a rest area for visitors near Lion’s Head along Kennon Road which includes “clean and decent restrooms,” a gift shop, and a tourist information center. 

As PH lives with COVID, vaccine facility to be pursued

A bilateral memorandum of agreement (MOA) between the National Development Co. (NDC) and Glovax Lifescience Corp., a Filipino pharmaceutical firm, is being finalized following the tripartite memorandum of understanding signed by the Glovax Lifescience, the distribution arm of Glovax Biotech Corp., NDC and the Department of Trade and Industry (DTI) during the Duterte administration. The MOA contains an investment proposal from Glovax Lifescience Corp. requesting a P150 million seed funding from NDC. The founder of Glovax Biotech, Giovanni Alingog, said that NDC general manager Antonio Mauricio and DTI Secretary Alfredo Pascual, NDC chairman, received the business's feasibility assessment from Glovax Biotech on separate occasions. Furthermore, Glovax is also tapping potential collaborators and foreign investors such as the United States and Singapore. Glovax plans to begin with a fill-and-finish facility that it wants to open in January 2023 before transitioning to manufacture by 2025.

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