ECCP at Work

ECCP@Work Featured Articles | January 24, 2023

January 24, 2023

ECCP Online

ECCP at Work

Business groups cheer lower import duties on EVs

The Electric Vehicle Association of the Philippines (Evap) and the European Chamber of Commerce of the Philippines (ECCP) on Friday welcomed the executive order to temporarily lower import taxes on electric vehicles (EV), citing the benefits of the measure to this growing automotive segment. The ECCP also welcomed the measure, but said more could be done in terms of tax policy. “We reiterate the call for the extended scrapping of EV tariffs coming from all countries, which should last over a span of at least eight years,” Lars Wittig, president of ECCP, said. Emphasizing that the EV sector is an ecosystem based on two pillars, which are the vehicles themselves and the charging station network, the ECCP official said there should also be parallel support for the infrastructure system to power these vehicles. Still, Wittig expressed their commitment in working with stakeholders in promoting the development of the EV industry, as well as the advancement of smart and safer transportation in the Philippines.

GDP growth may have slowed in Q4 — poll

The Philippine economy may have slowed in the fourth quarter of 2022, but still likely hit the upper end of the government’s full-year growth target, according to analysts. Gross domestic product (GDP) likely grew 6.8% in the October-to-December period in 2022, according to the median forecast of 23 economists polled by BusinessWorld, slower than the 7.6% rise in the third quarter and the 7.8% print in the same period in 2021. For the full year, the economy may have grown 7.5%, according to median forecasts of economists, matching the high end of the Development Budget Coordination Committee’s (DBCC) 6.5%-7.5% target.

Digitalization bills among House top priorities

The House of Representatives will prioritize the passage of bills seeking to hasten the country’s digital transformation when Congress resumes session today in response to a call made by President Marcos Jr. last week. “We will expedite the passage of these measures to implement the pronouncements of President Ferdinand Marcos Jr. in Davos, Switzerland on his desire for the country to catch up with other nations in digital evolution,” Speaker Martin Romualdez said yesterday. The Speaker said among the top priorities of the House is the passage of the E-Government and E-Governance Act, which would help accelerate the country’s digital transformation to fuel growth momentum.

Gov’t should double down on open finance to hasten financial inclusion goals – ECCP-SCOFFI

As the new administration assures that it will prioritize digital transformation on a national scale, the ECCP-SCOFFI believes that it is high time that the government places more premium on the development of policies and the rollout of more open finance initiatives in the country. “With multiple economic crises at present and a looming global recession ahead of us, financial inclusion should be emphasized now more than ever. The inclusion of multiple economic sectors in the Philippines is crucial, especially considering that we are still recovering from the impact of COVID-19 and many challenges are already being posed by the circumstances in the post-pandemic era. As staunch advocates of inclusivity, we at ECCP-SCOFFI vow to support the government’s endeavors towards financial inclusion and open finance,” ECCP-SCOFFI Chairman John Januszczak said.

S&P unit not too bullish on Philippine growth this year 

The Philippine economy is expected to post as slower growth this year with the gross domestic product (GDP) expansion easing to 5.6 percent, driven by consumption and higher infrastructure spending, according to S&P Global Market Intelligence. “Continued rapid GDP growth of around 5.6 percent is expected in 2023, helped by continued strong private consumption spending, an upturn in government infrastructure spending and improving remittance inflows,” S&P Global Market Intelligence chief economist for Asia Pacific Rajiv Biswas said in a report. The forecast is below the government’s six to seven percent growth target for 2023.

Government targets more investors from Europe 

The government’s economic team will lay out prospects for European investors to come and do business in the Philippines as it banks on a strong recovery moving forward. The Philippine Economic Briefing (PEB) series will kick off this year with Frankfurt, Germany as its first stop, in a bid to showcase investment opportunities in the country. This will be followed by London in the United Kingdom in the coming days. Led by the Department of Finance, the PEB is a platform for the economic team to brief international business and financial communities on the latest developments concerning the country’s economic performance, investment opportunities and the administration’s development plan. This is also expected to result in foreign direct, fixed income, and equities market investors, as well as infrastructure players.

PH eyes $52M fund for climate resilience

The Philippines, through the Department of Environment and Natural Resources (DENR), will pursue the development of resilient, inclusive and sustainable communities, post-pandemic as it prepares its portfolio of environmental projects for consideration under the 8th funding replenishment of the Global Environment Facility (GEF-8). The DENR said the Philippines is allocated over $52 million (roughly P2.83 billion)  in funding support, the country’s largest allocation to date. Of the $52 million, bulk  or $45.51 million will be for biodiversity while $5.45 million will be for climate change and the remaining $1.8 million for land degradation,t the GEF website said.

PPA: Give container registry system a chance

The Philippine Ports Authority (PPA) yesterday asked the public to give the Trusted Operator Program – Container Registry and Monitoring System (TOP-CRMS) a chance amid backlash from business and other groups. The TOP-CRMS, the PPA said, should be understood, since it will be a “big benefit… against the high and unregulated charges on logistics costs.” This will cover the container deposit and the missing empty containers, PPA General Manager Jay Santiago said. “For as long as somebody is complaining, the government has to come in and the government has to address the complaints. The government’s purpose is to make sure that everything is fair,” Santiago said. “We try to make sure that the playing field is fair… That’s why we need to introduce regulations,” he added.

PEZA to launch sustainability reporting

The Philippine Economic Zone Authority (PEZA) is set to launch a sustainability reporting initiative this year as part of its earlier signed memorandum of understanding (MOU) with the Global Reporting Initiative (GRI). In a statement, the PEZA said the goal of the sustainability reporting initiative is aimed at making sustainable actions and reporting. “Voluntary compliance to the GRI’S Sustainability Action and Reporting and the UN SDGs can be a source of competitiveness for the country in attracting more FDIs and in enhancing regulatory compliance. Many advanced and developing economies subscribe to these principles to be able to measure the impact of FDIs on the host countries toward inclusive, resilient and sustainable development,” Panga said. In March 2022, the PEZA forged an MOU with GRI for sustainability reporting.

Congress to focus on passing E-Gov’t bill when session opens

The House of Representatives will give the proposed E-Government Act its full attention when the chamber resumes session, Speaker Ferdinand Martin G. Romualdez said. “The House of Representatives remains committed to pass the priority legislation of President Ferdinand R. Marcos, Jr., including measures for digitalization in both government and private transactions that would bolster efficiency, productivity, and security,” Mr. Romualdez said. “Upon the resumption of the (Congressional) session, among the top priorities of the House is the passage of the E-Government and E-Governance Act, which will help accelerate our digital transformation to fuel growth momentum,” Mr. Romualdez said. Mr. Romualdez said a shift to digital platforms in government will enhance the Philippines’ standing as an investment hub.

Asia’s developing nations urged to address challenges to microfinance sector

Governments in Asia’s developing countries are being urged to expand the coverage of credit bureaus and implement financial literacy campaigns to help address challenges that may impact the growth of microfinance this year, according to the Asian Development Bank (ADB). In its latest blog, the multilateral lender said the microfinance sector, which has rebounded last year following a sharp contraction during the pandemic, would need the right policies to be able to grow going forward. “The right actions by microfinance institutions and governments can ensure a promising outlook for microfinance in Asia this year,” ADB said.

BSP stays on track to digitize 50% of all payments this year

The Bangko Sentral ng Pilipinas (BSP) is on track to achieve its goals to digitize 50% of all retail payments and to bring 70% of adult Filipinos into the financial system this year, its governor said. BSP Governor Felipe M. Medalla said digitizing 50% of transactions and onboarding 70% of Filipinos is “going quite well.” “We’re doing quite well thanks to e-wallets (and) the onboarding. More and more Filipinos have accounts and the number of transactions, both the value and volume, is (being) targeted,” Mr. Medalla told reporters on the sidelines of the launch of the United States Agency for International Development’s project for micro, small, and medium enterprises (MSMEs) earlier this month. Digital payments have been rising as consumers and businesses used more online channels amid mobility restrictions brought by the pandemic. According to latest data from the BSP, the share of digital payments in the total volume of retail transactions jumped to 30.3% in 2021 from 20.1% a year earlier. The value of payments done online stood at 44.1% of 2021’s total retail transactions, higher than the 26.8% share in 2020.

Funding issue to make or break Maharlika bill – senator

Funding sources will be a key component of the proposed Maharlika Investment Fund (MIF) that would decide its fate in the Senate, Sen. Sherwin Gatchalian said yesterday as he raised concerns on where the money that will be used for the investment account will come from. Gatchalian said that while he was “open” to the idea of having a sovereign wealth fund, “where will we get the funds?” Gatchalian made the remark when asked to comment on the statement of Rep. Joey Salceda that the House of Representatives “quietly re-engineered” the proposed MIF weeks after the lower chamber passed the controversial measure on third and final reading.

Further use of SAF among local airlines seen 

The United States Department of Agriculture (USDA) sees more airlines shifting to sustainable aviation fuel SAF) as demand for jet fuel slowly returns to pre-pandemic level. (This) provid(es) much opportunity for SAF as a better fuel for decarbonization,” said  in a report dated Jan. 17, 2023. SAF is an environmentally sustainable alternative to fossil jet fuel which can also be sourced from a variety of materials including used vegetable oils, household waste, waste gases, animal fats, forestry residue and even carbon dioxide captured directly from the air. “The aviation industry started to recover in 2022 and demand for jet fuel is on its way to reach the pre-pandemic level providing much opportunity for SAF as a better fuel for decarbonization,” the USDA added. The USDA  expressed optimism with the wider use of SAF in the Philippines as Prime Infrastructure Capital Inc. recently established a new subsidiary for its waste-to-fuel project being developed in partnership with US-based WasteFuel Global which is a SAF start-up aiming to have its first biorefinery in the country.

Gov’t hastens green procurement program

The government has established an inter-agency review committee as one of the reform initiatives to take government procurement to a sustainable track, the Procurement Service of the Department of Budget and Management (PS-DBM) said. In a statement yesterday, the PS-DBM said the government is on track in its pursuit to implement Green Public Procurement (GPP) with the convening of an Inter-Agency Technical Specifications Review Committee (IATSRC). The IATSRC will assess, review and evaluate existing common-use supplies and equipment technical specifications to adhere to and comply with local and international standards – taking into account the environmental, social and economic aspects of public acquisition, alongside Sustainable Development Goal 12 on Responsible Consumption and Production. Under a GPP regime, the government shall procure goods and services with reduced environmental impact throughout their life cycle.

Microinsurance premiums climb despite pandemic 

The adverse economic effects of the pandemic and increased awareness of Filipinos have boosted the insurance contributions from low-income people to P8.5 billion as of the third quarter of 2022. Latest data released by the Insurance Commission (IC) showed that total premium from microinsurance providers rose by 15.5 percent to P8.49 billion in the first nine months of 2022. IC commissioner Dennis Funa noted that the sustained recovery from the effects of the pandemic contributed to the increase in microinsurance premiums. Funa said there is also an increasing awareness of the public in terms of the importance of having affordable insurance products. “Nevertheless, the lingering adverse economic impact of the pandemic at the micro level may have contributed to this increase, as those who availed microfinance or credit transactions were able to avail of the bundled microinsurance products,” Funa said.

Zero tariffs on EVs, spare parts to widen choices for consumers 

The issuance of an executive order that modified the  tariff on certain electric vehicles (EV) and their parts and components to zero for a period of five years is expected to widen the EV offerings to consumers in the country, according to an industry group. In a statement, Electric Vehicle Association of the Philippines (EVAP) president Edmund Araga welcomed the issuance of EO 12. “Finally our EV industry will totally roll out in line with EO 12   as it opens a very good opportunity for those   EV enthusiasts and advocates to own one,” Araga said. “Consumers will experience a wide array of models to choose from depending on their preferences. As we all know, we now rely on importation of EVs, specifically EV cars for personal mobility, which is far better than owning an internal combustion engine or even a hybrid,” he said. Araga said the EO would support Republic Act 11697 or the Electric Vehicle Industry Development Act, which makes the EV industry promising.

ASEAN economies urged to boost infrastructure investments

The expanded Association of Southeast Asian Nations economies should increase infrastructure investments to take advantage of opportunities and to address the climate change challenge, the ASEAN+3 Macroeconomic Research Office (AMRO) said. “As the global economy emerges from the pandemic crisis, member economies should strengthen infrastructure investments to seize a growing opportunity in the post-pandemic era and address rising policy issues such as climate change,” the AMRO said in a note. It said a large infrastructure gap still exists in economies given the need for both traditional and new infrastructure. AMRO said investments in digital infrastructure have become more important in addressing the health crisis amid the Fourth Industrial Revolution. It said investments are also needed for climate change mitigation and adaptation.

BSP sees inflation below 2% by 2024

Inflation is expected to be below 4% by the third quarter and below 2% by early 2024, the central bank governor said. “We expect to be very successful in bringing down inflation,” BSP Governor Felipe M. Medalla said during the Philippine economic briefing in Frankfurt, Germany. “Month-on-month inflation is normalizing. Because of our very aggressive monetary policy, we do not see shocks propagating self-fulfilling inflation.” Inflation accelerated to 8.1% in December, from 8% in November and 3.1% in December 2021, amid soaring food prices. This brought the average inflation in 2022 to 5.8%, the highest in 14 years. It was also well beyond the BSP’s 2-4% target range.    

Gov’t eyes 3,600 infra projects worth $372 billion

Over 3,600 infrastructure projects worth a total of $372 billion are in the pipeline and set be implemented through 2028, NEDA Secretary Arsenio M. Balisacan said. “The current administration is moving to ramp up the infrastructure development of the country. As of today, we have started compiling all these potential infrastructure projects. Various agencies of the government have identified over 3,600 projects that amount to something like $372 billion over the medium term,” Mr. Balisacan said in a live streamed economic briefing in Frankfurt, Germany.

Gov’t reviews MFN rates of meat, offals

The government is reviewing the most-favored nation (MFN) tariff rates on meat and edible offal of livestock. The Tariff Commission (TC) in a notice said it is set to conduct a public hearing on January 25 on the tariff rates of  fresh, chilled or frozen meat of bovine animals, swine, sheep, goats, horses, assess, mules and hinnies as well as fresh, chilled and frozen edible offal of bovine animals, swine, sheep, goats, horses, assess, mules and hinnies. The commission said the hearing is being conducted  following the directive of Senate committee on agriculture chair Cynthia Villar for the National Economic and Development Authority to study the existing tariff structure of said meat items.

DICT eyes cooperation with Denmark

The Department of Information and Communications Technology (DICT) is looking to pursue digital cooperation with Denmark on cybersecurity, e-governance, digital health and maritime digital transition. Anna Mae Yu Lamentillo, DICT undersecretary for public affairs and foreign relations, met with Franz-Michael Skjold Mellbin, ambassador of Denmark to the Philippines, to discuss areas for digital cooperation. “Denmark is well advanced in developing and using digital solutions. Danes get digital mailboxes at birth. New technological solutions help them address the capacity challenge of a health worker shortage,” said Lamentillo.

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