PH moves target to become upper-middle-income status to 2025

The Philippines has moved its target to reach upper middle-income status from 2024 to 2025, Secretary Arsenio Balisacan, chief of the National Economic and Development Authority (Neda) said at the “Saturday News Forum” in Quezon City. It was President Ferdinand Marcos Jr. who said in his first State of the Nation Address that the Philippines was eyeing to reach the upper middle-income status by 2024. Marcos even told the United Nations General Assembly in September that the Philippines was on track to reaching a higher income status by 2023. However, Balisacan said the country ran into setbacks, such as the sharp contraction of the economy in 2020 and the sharp depreciation of the peso this year, sinking to a record low of 59:$1 in October. “The entry to that category of countries, upper-middle-income country, will now be in 2025,” Balisacan said.

EU ready to resume free trade talks with Philippines

After a five-year hiatus, the EU is ready to resume negotiations on a free trade agreement (FTA) with the Philippines as well as on the renewal of the country’s Generalized Scheme of Preferences Plus (GSP+) accreditation, which allows it to export goods to the European market duty-free, Malacañang said. President Marcos pushed for the expansion of talks on the EU-Philippines as well as the renewal of the country’s GSP+ status during his meeting with European Commission President Ursula Von der Leyen on the sidelines of the ASEAN-European Union Commemorative Summit in Brussels, Belgium. The negotiations for the EU-Philippines FTA started in 2016. The last round of negotiations was held in Cebu City in 2017. Since then, negotiations have been on hiatus, according to a statement released by the Office of the Press Secretary (OPS). “While the Philippines awaits the resumption of the Phl-EU Free Trade Agreement negotiations, we remain committed to maintain our EU GSP+ beneficiary status, serving as a stepping-stone towards this FTA,” the President told European business leaders.

ECCP backs passage of open access in data transmission act  [mention]

The Open Access in Data Transmission Act can boost the country's gross domestic product growth by 1.5 percent due to improved mobile and internet connection, Philippines president Large Wittig said on Monday. The House of Representatives on Dec. 12 approved House Bill No. 6 or the proposed "Open Access in Data Transmission Act".  "We are very optimistic that it will be passed this time and we expect that it will have a very positive impact on your country and obviously the coverage in terms of the internet," Wittig told ANC.

Zero tariff on EVs to help develop infrastructure – DTI

Turehe coverage of only p electric vehicles in a proposed executive order granting zero tariffs on the importation of electric vehicles (EVs) is in line with the goal of developing the EV infrastructure in the country, according to the  head of the Board of Investments (BOI). Trade Undersecretary and BOI managing head Ceferino Rodolfo said only pure EVs would be  included in the proposed EO. He explained that if hybrid is included in the EO, this may not lead to the development of charging stations. Several foreign chambers have earlier expressed support for calls to include hybrid vehicles in the proposed executive order granting zero tariffs on the importation of EVs. According to earlier news reports, the European Chamber of Commerce of the Philippines submitted a position paper to the Department of Energy   arguing that the planned zero tariffs on EVs should also cover hybrids.

PH to lure RE technology, investments from Europe

Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo said the country targets to attract investments from Europe for technology transfer and development of the renewable energy sector here. In a virtual press briefing Friday, Rodolfo said European companies have recognized the Philippine government’s initiatives to shift to cleaner and more sustainable sources of energy. “They are very happy with the statement of the President (on) sustainability as a core objective for the Philippines. They are also happy not just because of the statements but because of the actual moves that are already undertaken by the administration,” said Rodolfo, who is also the managing head of the Board of Investments (BOI). Rodolfo added that with these policies of the government, European companies have “tremendous interest in energy projects in the Philippines”. “So, we look at Europe as source of technology and investments for renewable energy, in particular, of course solar and offshore wind projects,” he said.

Medalla flags more rate hikes to tame inflation — Bloomberg TV

Bangko Sentral ng Pilipinas (BSP) will likely have to continue raising rates at its next two meetings to ensure inflation returns to within its 2-4% target range next year, its governor said on Friday. BSP Governor Felipe M. Medalla said the likelihood that the central bank will not increase its policy rates at its next meetings was “extremely low.” The central bank expects inflation, currently running at 14-year high of 8%, to be back to the 2-4% range in the second half of next year. “We have to do more to make sure that happens,” Medalla said.

Philippines extends tariff cuts on imported rice, other food items to fight inflation

President Ferdinand “Bongbong” Marcos Jr has approved the recommendation of the economic ministry to extend up to the end of next year lower tariff rates on rice and other food items to help combat inflation. The modified rates approved in 2021 were due to expire at the end of this year, but an inflation rate running at 14-year highs warranted an extension of the tariff reprieve until Dec. 31, 2023. That means the tariff rate for imported rice will stay at 35 percent, while the import levies on corn and pork products will remain at 5 percent-15 percent and 15 percent-25 percen respectively, the press secretary’s office said in a statement. The tariff for coal imports, a key fuel in power generation, will remain at zero beyond the end of next year, but will be reviewed regularly. “Through this policy, we shall augment our domestic food supplies, diversify our sources of food staples, and temper inflationary pressures arising from supply constraints and rising international prices of production inputs,” Economic Planning Secretary Arsenio Balisacan said.

Neda chief backs Maharlika fund to help sustain economic growth

NEDA Secretary Arsenio Balisacan backs the proposed Maharlika Investment Fund (MIF) as it would help the country sustain its growth. “With the Marcos Administration’s Economic Team members, I reiterate my strong support for creating the Maharlika Investment Fund as a complementary vehicle to help us attain the objective of rapid but inclusive and sustainable economic development,” Balisacan said at the “Saturday News Forum” in Quezon City on Saturday. One of the most salient amendments was the removal of the contributions from the Government Service Insurance System, the Social Security System, and P25 billion from the national budget as sources of the MIF’s seed fund. The fund sources left are the Land Bank of the Philippines, the Development Bank of the Philippines, and dividends of the Bangko Sentral ng Pilipinas. Also, the president was replaced by the finance secretary as chair of the fund’s governing board.

Consumers more pessimistic in Q4 — BSP

CONSUMER and business sentiment declined in the fourth quarter due to elevated prices of goods, higher interest rates, and a weakening of the peso, according to the Philippine central bank. The Bangko Sentral ng Pilipinas (BSP) on Friday said the consumer confidence index slipped to -14.6% from -12.9% in the third quarter, its 10th straight quarter of pessimism or since the -54.5% consumer outlook in Q3 2020, when the country locked down due to the COVID-19 pandemic. Meanwhile, business confidence index fell to 23.9% from 26.1% in the prior quarter, marking its second straight decline. “Consumers anticipated that interest and inflation rates may increase, the peso may depreciate against the US dollar, and the unemployment rate may decline in Q4 2022, Q1 2023, and the next 12 months,” the BSP said. Consumer sentiment for the first quarter next year also worsened to 9.5% from 13.4% previously.

PPA’s container monitoring system aims for digitalization, transparency

The Trusted Operator Program – Container Registry and Monitoring System (TOP-CRMS) project of the Philippine Ports Authority (PPA) will regulate and provide transparency for all stakeholders, said PPA’s project partner Shiptek Solutions founder and CEO Eugenio Ynion. Ynion said cost of logistics is one of the major factors in the rising price of commodities. One root issue is the “unreasonably high surcharges imposed by shipping carriers,” like peak season surcharges, container imbalance fees, and container deposits collected from importers.“These truths that are not visible to everyone, but have had a major impact on consumer prices today,” said Ynion. “Fortunately, this is a problem that the Philippine Ports Authority (PPA) has started to address since pre-pandemic but why has it yet to be implemented today? Simple, it’s because the regulatees are regulating the regulators.”

‘PHL is capable of becoming a digital leader’

Despite the uncertainty created by the pandemic and the recent spike in commodity prices, the government and the private sector remain optimistic about the country’s prospects, particularly in the digital space. At the recent Philippine Fintech Festival hosted by Digital Pilipinas, participants said the Philippines is “well-positioned” in Web 3.0, blockchain, crypto, and non-fungible tokens (NFT), among others. According to Coins.ph CEO Wei Zhou, the Philippines is on the cusp of something “very big.” “We really need to learn blockchain, crypto, NFT, and other digital assets by using them in their day-to-day lives,” he said.

Nearly 800 IT-BPM projects endorsed to BoI

THE BOARD of Investments (BoI) said 786 information technology and business process management (IT-BPM) projects have been endorsed by the Philippine Economic Zone Authority (PEZA), as part of a registration transfer scheme that would allow companies to fully implement work-from-home (WFH) arrangements and keep their fiscal incentives. Evariste M. Cagatan, BoI executive director, said certificates of registration have been given to 627 out of the 786 IT-BPM projects. “As of Dec. 15, the number of projects endorsed by the PEZA (to the BoI) is at 786 projects… The total project cost is P98 billion,” she said at a media briefing last week. Ceferino S. Rodolfo, BoI managing head and Trade undersecretary, said there is no word if there would be an extension of the Dec. 31 deadline for the registration transfer to the BoI from the PEZA.

Only pure EVs are eligible for zero import duty -DTI

The government has stood pat on its decision that only pure electric vehicles (EVs) can enjoy the zero import duty privilege for five years as the move is intended to encourage investments in EV infrastructure, particularly charging stations, according to the Department of Trade and Industry (DTI). DTI Undersecretary Ceferino S. Rodolfo said the Executive Order removing the import duty on pure EVs is expected to be issued by President Ferdinand Marcos Jr. during Congressional recess. Congress went on Christmas break starting Wednesday, Dec. 14. The EO has already been approved by the Cabinet-level Trade and Related Matters (TRM) committee and consequently approved by the National Economic and Development Authority Board. Rodolfo, however, said that the EO provides for a review clause to assess the coverage of the products in the EO a year after the issuance of the EO. He explained that hybrid EVs will not be included in the zero-duty import privilege because hybrids do not need charging stations, defeating the purpose of the EO which is to encourage investments in EV infrastructure. Hence, the grant of zero-duty is exclusive only to pure EVs only.