ECCP at Work

ECCP@Work Featured Articles | December 16, 2022

December 16, 2022

ECCP Online

ECCP at Work

Prioritize PH–EU free trade deal — ECCP

The president of the European Chamber of Commerce of the Philippines, Lars Wittig, urges the Marcos administration to prioritize the free trade agreement with the European Union (EU). This concern was discussed by President Ferdinand R. Marcos, Jr. at the 10th ASEAN-EU Business Summit in Brussels, stating that “It is important that our governments continue to collaborate with the private sector, especially with the current geopolitical challenges. With the participation of ASEAN members in trade deals, ASEAN is well positioned to accelerate our progress.”

EU biz leaders impressed by Marcos’ performance at summit

Business leaders in Europe praised President Ferdinand R. Marcos Jr. for his performance at the C-Suite Luncheon, where he promoted European investments and climate change action, said European Chamber of Commerce in the Philippines (ECCP) executive director Florian Gottein. On the same note, Marcos also highlighted in the same statement how the EU-ASEAN Business Council continues to "play a critical role" in strengthening ASEAN's regional economic integration and post-pandemic economic recovery efforts. He also earned praise for his commitment to attending the summit despite catching a cold.

PBBM impresses EU businessmen following participation in EU-ASEAN business summit

According to Florian Gottein, executive director of the European Chamber of Commerce in the Philippines (ECCP), European businessmen applauded President Ferdinand R. Marcos Jr. for recognizing the essential role of the European Union (EU) as a trade and investment partner to the Association of Southeast Asian Nations (ASEAN). On another note, Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo said that European executives were impressed because the President “valiantly and heroically soldiered on.” In his speech during the 10th ASEAN-EU business summit, President Marcos emphasized initiatives centered on regional economic integration, stating “With the participation of ASEAN members in mega trade deals such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), we are well-positioned to accelerate intra-regional trade and growth.” 

PHL bags P6B in investments from Unilever, European firms

According to the Presidential Palace, four European companies have pledged to invest over P6.2 billion in THE PHILIPPINES after their executives met President Ferdinand R. Marcos Jr. in Brussels. One of which is Uniliver which will invest a total of P4.7 billion allotted for technological advancement. OCEA S.A., a French shipbuilding firm, committed P1.5 billion directed to build a shipyard and generate jobs. Likewise, Benoit Juster, SEMMARIS executive director, is interested in developing an agro-logistics hub in New Clark City. Another Spanish multinational firm, Acciona, S.A., is also keen to invest in developing the country’s renewable energy sources. Despite the influx of investment pledges, Economic experts posit that such investments should translate to the actual development in areas of infrastructure, streamlined bureaucracy, ratification of the Regional Comprehensive Economic Partnership, and foreign direct investments, among others. 

Trade gap narrows in October

According to the report of the Philippine Statistics Authority (PSA), preliminary data shows the country’s  trade deficit continued to close as exports increased and import growth slowed. October data stands at a $3.31-billion deficit, smaller than the $4.84-billion trade gap in September. Rizal Commercial Banking Corp. chief economist Michael Ricafort stated that this is mainly due to “the new record high for exports on a monthly basis.” The report also shows that the overall country’s exports grew by 7.1% in September. With an $18.7 billion total external trade in goods in October, 12.3%  higher than the $16.65 billion in the same month last year, but relatively lower than the September data of $19.17 billion. During the first ten months of the year, the trade deficit stands at the country’s trade deficit reaching $49.98 billion. Meanwhile, imported goods increased by 7.5% year-on-year to $11 billion in October, totaling a 22.7% to $116 billion increase from January to October. 

ADB hikes Philippine growth forecast to 7.4% this year

The Asian Development Bank’s (ADB) Asian Development Outlook Supplement December report predicts a 7.4% economic growth for the Philippines. ADB Philippines country director Kelly Bird stated in a recent briefing that the nation’s economic performance has surpassed all year-end projections, citing the increased domestic demand during the Q3 that grew by 7.6%. Furthermore, the ADB’s revised forecast shows that the increased growth prediction for the Philippines places the country to be the second fastest growth in Southeast Asia by 7.5%, next to Vietnam. Bird also mentioned that the 2023 economic growth is expected to slow down as inflation and interest rates continue to rise. With this, ABD’s inflation forecast for the country remains at 4.3 percent. According to Bird, global demand will also likely weaken in 2023, which translates to only 4.7% GDP growth in Southeast Asia and will likely affect consumer and business confidence. 

Marcos expects ASEAN-EU summit to bolster trade, investment

President Ferdinand Marcos Jr. remarked during the Association of Southeast Asian Nations-European Union (ASEAN-EU) Business Summit that the summit is expected to advance discussions on sustainable trade and investment between countries. During the summit, President Marcos acknowledges the importance of accelerating inter-regional trade agreements such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. He also noted the challenges faced by the ASEAN member states during the post-pandemic economic recovery.

Marcos holds bilateral meeting with 4 European leaders 

On the sidelines of the ASEAN-EU Commemorative Summit in Brussels, President Marcos held a separate bilateral meeting with four European leaders, namely Czech Republic Prime Minister Petr Fiala, Netherlands Prime Minister Mark Rutte, Spain President Pedro Sánchez Pérez-Castejón, and Estonia Prime Minister Kaja Kallas. Marcos pushed for specific agendas such as modernizing the defense forces in the Philippines, enhancing cybersecurity in the military and water management, and strengthening and promoting peace in the Bangsamoro Autonomous Region in Muslim Mindanao, among others. With the return of President Marcos from his three-day visit to Belgium, he was likely enthusiastic about the successful outcome and partnership advancement that the country produced. 

Marcos pitches young PHL workforce to potential EU investors

In a statement released by the Office of the Press Secretary last Tuesday, President Ferdinand R. Marcos, Jr. emphasized the role of the young Philippine workforce. Additionally, the President provided the executives with an update on his administration's intention to create "green lanes" in government organizations to expedite applications for critical investment projects. President Marcos also stated that the Philippines is still committed to participating in the Generalized Scheme of Preferences Plus (GSP+) of the European Union (EU), which Trade Secretary Alfredo E. Pascual is likely aiming to renew the country’s participation in the said trade scheme.

PBBM’s productive ASEAN-EU summit participation yields P9.8-B in investment pledges

President Ferdinand R. Marcos Jr. secured P9.8 billion worth of investment pledges during his last trip to the Association of Southeast Asian Nations (ASEAN)-European Union (EU) Commemorative Summit in Brussels, Belgium. Upon arriving in the Philippines, he reported: “...that European business confidence in PH is high as evidenced by the expansion plans of European companies that were met in the sectors of fast-moving consumer goods, shipbuilding, renewable energy and green metals.” Among the significant breakthrough were the signing of the ASEAN-EU Comprehensive Air Transport Agreement, the adoption of the Joint Leaders’ Statement at the ASEAN-EU Commemorative Summit, and engagement in bilateral meetings with European leaders which strengthen bilateral partnerships. 

PHL growth likely 2nd fastest in SE Asia

According to Asian Development Bank’s (ADB) Asian Development Outlook (ADO) 2022 Update, the Philippine gross domestic product (GDP) growth forecast increased to 7.4% this year from the 6.5% estimate in September. With this, the Philippines is predicted to have the second-fastest economic growth in Southeast Asia this year, behind Vietnam (7.5%), at 7.4%. ADB Philippines Country Director Kelly Bird stated that the Philippine economy continues to experience an underlying growth momentum and resilience as the country heads to 2023. Additionally, he said that the continuous rise in inflation and interest rates will slow the GDP growth but was expected to decline in two to three years as the Bangko Sentral ng Pilipinas mitigates it through a proactive response such as hiking policy rates. Meanwhile, developing Asia has a lower GDP prediction of 4.2%; than its 4.3% projection in September.

PEZA-approved investments drop 11.5% as of Nov.

According to a statement from Philippine Economic Zone Authority (PEZA), it raised P57.048 billion in investments from 181 projects between January and November. This investment amount is 11.5% less than the P64.463 billion from 229 projects that were approved a year ago. PEZA Officer-in-Charge and Deputy Director-General for Policy and Planning Tereso O. Panga said that “PEZA was able to narrow the gap to -11.5% this January-November 2022 versus the same period last year.” Meanwhile, PEZA’s approved projects and investments were centered on biotechnology, a tourism economic zone, and a waste-to-energy water treatment plant. 

Foreign Chambers Seek Extension Of Lower Tariffs

Three foreign chambers are urging the government to extend the effectivity of the executive order lowering tariffs on pork, rice and corn until next year, as a way of managing inflation concerns. In a joint statement on Friday, Dec. 2, the American Chamber of Commerce of the Philippines (Amcham), Canadian Chamber of Commerce of the Philippines (CanCham) and the European Chamber of Commerce of the Philippines (ECCP) called on the administration to extend Executive Order No. 171 until next year. EO 171, issued in May to address inflation concerns, extends the 15 percent in-quota and 25 percent out-quota tariff rates for pork imports under EO 134 until Dec. 31, 2022.

‘Filipino seafarers not indispensable’ 

Philippine seafarers are not indispensable as excess seamen from other countries are waiting to fill positions that could be left vacant by Filipinos, according to the executive director of the European Chamber of Commerce and Industry. “Without trying to make a safe statement, you know there is not only a worldwide demand but also a surplus of seafarers from other countries as well. I mean we appreciate Filipino seafarers on our vessels, but there are also other nations that need the seafaring job, especially now if you look at what is happening in the Eastern part of Europe, in Ukraine. There are a lot of Ukrainian seafarers currently serving on European vessels and waiting if there is a need to fill the gap,” ECCP Executive Director Florian Gottein told the Daily Tribune in a recent interview.

Vehicle sales post double-digit growth for 9th straight month

The auto industry continued its strong recovery, posting double-digit sales growth for the ninth straight month in November. A joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed vehicle sales jumped by 32.4% to 35,037 units in November, from 26,456 in the same month in 2021. Month on month, vehicle sales grew by 9%. “The auto sales performance has been improving, recording double-digit growth for nine successive months,” CAMPI President Rommel R. Gutierrez said in a separate statement.

Electric co-ops back EPIRA tweaks to allow gov’t power generation

The Philippine Rural Electric Cooperatives Association, Inc. (Philreca) has declared its support for amending the Electric Power Industry Reform Act (EPIRA) of 2001, citing the need to once more allow government entities, including local government units (LGUs), to generate power. Philreca said: “Continuing a deregulated generation sector will only result in imbalance in the power industry, the opportunities of each to bring down the electricity cost being impeded.” The EPIRA law sought to restructure the power industry via deregulation and privatizing most state-owned power generation and transmission assets.

Electronics helps PHL export earnings post highest growth since May 2021

Shipments of electronic products boosted the country’s export earnings to its highest growth in over a year, according to the Philippine Statistics Authority (PSA). PSA data showed the country’s exports grew 20 percent in October 2022, the highest since May 2021 when exports rose 30.8 percent. The country’s export earnings reached $7.695 billion in October 2022, higher than the $6.41 billion posted in October 2021.The growth in exports led to a 13.5-percent decline in the country’s trade deficit to $3.31 billion in October 2022. The contraction in the trade deficit was the steepest decline since January 2021 when the Balance of Trade in Goods (BOT-G) declined 23.4 percent.

DOTr rolling out 3 priority PPPs

The Asian Development Bank (ADB) has raised its gross domestic product (GDP) forecast for the Philippines this year, following the country’s surprisingly strong economic performance in the third quarter, but it expects growth to slow next year. In the ADB’s Asian Development Outlook Supplement for December released yesterday, the multilateral lender said it now expects the Philippine economy to grow by 7.4 percent this year, higher than the 6.5 percent forecast it provided last September. ADB Philippines country director Kelly Bird said in a briefing yesterday that the revised forecast comes as the country’s economic performance has, so far, shattered all of the projections for the year.

House approves Maharlika Fund bill

The House of Representatives approved on third and final reading the bill creating the Maharlika Investment Fund (MIF), just over two weeks after it was filed by Speaker Ferdinand Martin G. Romualdez. At Thursday’s session, 279 lawmakers voted in favor of the MIF bill, while six voted against. The six lawmakers who opposed the measure are Camarines Sur Rep. Gabriel H. Bordado, Jr., Gabriela Party-list Rep. Arlene D. Brosas, ACT Teachers Party-list Rep. France L. Castro, Albay Rep. Edcel C. Lagman, Kabataan Party-list Rep. Raoul Danniel A. Manuel and Basilan Rep. Mujiv S. Hataman.

BSP raises key rates anew

After noting the further uptick in prices of major consumer prices in November, the Monetary Board decided yesterday to raise the interest rate on the Bangko Sentral ng Pilipinas’ overnight reverse repurchase facility by 50 basis points to 5.5 percent, effective today. This is the highest in more than 14 years or since November 2008, when it was at 6 percent. The interest rates on the overnight deposit and lending facilities was also set to 5 percent and 6 percent, respectively. Felipe Medalla, BSP Governor and Monetary Board chief, said the central bank’s latest baseline forecasts show average inflation is still projected to breach the upper end of the 2-4 percent target range for 2022 and 2023 at 5.8 percent and 4.5 percent, respectively.

Airfares seen to decline

Airfares are expected to go down by January following the air regulator’s downgrade of the fuel surcharge as jet fuel prices decline in the world market. In an advisory, Carmelo Arcilla, Civil Aeronautics Board (CAB) executive director, said the passenger and cargo fuel surcharge for domestic and international flights will be at level 7 for January 1 to 31, a notch lower than this month’s level 8 fuel surcharge. The average price of jet fuel from November 10 to December 9 stood at P41.50 per liter which corresponds to level 7 of the passenger and cargo fuel surcharge matrix of the CAB.

PEZA seeks to restore incentives

The Philippine Economic Zone Authority (PEZA)  seeks to restore all incentives it grants to locators and be on equal footing with the Board of Investments (BOI) on work-from-home privileges. PEZA deputy director-general Vivian Santos said PEZA is anticipating a favorable opinion from the Department of Justice (DOJ) resolving the conflicting provisions on various issuances, such as value-added tax (VAT) zero rating  as well as WFH setup for PEZA registered business enterprises (RBEs). But Santos said eventually a bill amending the PEZA law as well as a revisit of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) would remove all the inconsistencies created by revenue memorandum circulars  issued by the Bureau of Internal Revenue.

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