Philippine economy grows 7.6% in 2022, beating target and expectations

The Philippine economy ended 2022 on a high note despite roiling external headwinds that forced Filipinos to endure high inflation, although there are emerging signs that growth likely reached its peak and a slower trajectory is coming this year. Gross domestic product, the sum of all goods and services produced in the country, expanded 7.6% year-on-year in 2022, better than the 5.7% growth recorded in the previous year, the Philippine Statistics Authority reported.

December trade gap widens; full-year deficit hits record 

The Philippine trade deficit widened in December from the previous month after exports declined to the lowest in more than two years, while imports continued to fall for the second straight month, the Philippine Statistics Authority (PSA) said on Thursday. This brought the 2022 trade balance to a record $58.32-billion deficit, higher than the $42.23-billion gap a year earlier. The value of merchandise exports fell by 9.7% year on year to $5.67 billion in December from a year earlier, ending three straight months of growth.

‘Hot money’ flows turn net positive in 2022

Foreign portolio investment funds entering the Philippines outweighed those exiting in 2022, the Bangko Sentral ng Pilipinas (BSP) said, representing a turnaround from the net outflow posted in 2021. Foreign portfolio investments registered with the central bank through authorized agent banks posted a net inflow balance of $886.7 million last year, against the net outflow of $574.46 million in 2021. Foreign portfolio investment is known as “hot money” because of the ease with which they can enter or exit a jurisdiction, as opposed to foreign direct investment, which is considered stickier and less fickle. The net inflow was the largest since the $1.2 billion posted in 2018.

EU sees robust FDI inflows, trade with PH

The European Union, which is composed of 27-member countries, is confident of higher foreign direct investments inflow in the Philippines and robust trade surpassing pre-pandemic levels, but stressed the need to do more to further boost the country’s competitiveness. During the launch of The Doing Business in the Philippines 2023 Publication, a guidebook for foreign investors in the country by the European Chamber of Commerce of the Philippines (ECCP), EU ambassadors and ECCP officials cited the country’s timely economic reforms – the Foreign Investments Act, Retail Trade Liberalization, Public Service Act, and amendment to the implementing rules and regulations allowing full foreign ownership in renewable energy – in the economic recovery after the pandemic.

ECCP: PHL to attract ‘billions’ after easing investment caps 

The European Chamber of Commerce of the Philippines (ECCP) is expecting the Philippines to attract “billions” worth of investments after various industries were cleared to receive up to 100% foreign ownership. ECCP President Lars Wittig said that the group is expecting “billions of dollars” worth of foreign direct investment into industries like renewable energy (RE). The ECCP said investment will be unlocked by the Department of Energy’s green light to relax foreign ownership caps in RE, as outlined in Department Circular No. 2022-11-0034, as well as the amendments to the Foreign Investment Act, Retail Trade Liberalization Act, and Public Service Act. Mr. Wittig said that there should be an increased efforts to create green and resilient infrastructure, and to prioritize the wellness and education of the workforce.

DTI presses Senate to approve RCEP trade deal within quarter

The Department of Trade and Industry asked the Senate to ratify the Regional Comprehensive Economic Partnership (RCEP) trade agreement before the end of the first quarter, saying that the Philippines is already missing out on the deal’s benefits. Trade Assistant Secretary Allan B. Gepty told BusinessWorld on the sidelines of an event organized by the British Chamber of Commerce of the Philippines (BCCP) late Tuesday that the Senate has “the whole of February to conduct hearings. And then there’s March. Basically, two months. I hope it (RCEP) gets finished because we are already delayed.”

Marcos commits to certify E-Governance Act as urgent 

President Ferdinand Marcos Jr. has committed to certify the proposed E-Governance Act of 2022 as urgent, the Private Sector Advisory Council (PSAC) said. “The certification as urgent of the E-Governance Act is a vital step in the right direction towards becoming a digital nation," said Henry Aguda, PSAC Digital Infrastructure Sector Lead and Union Bank of the Philippines (UnionBank) Chief Technology and Operations officer in a statement. "It also provides the impetus to the PSAC Digital Infrastructure Sector's work plan," he also said "We are encouraged by the President’s commitment to shaping a future-ready nation and look forward to seeing the positive impact it will have on every Filipino," Aguda added.

Reforms seen driving foreign investments

Investments in the Philippines are expected to increase following reforms recently enacted by the government. "Several multilateral and international organizations have expressed confidence in the growth prospects of the Philippines because of the several reforms which were passed," European Chamber of Commerce of the Philippines President (ECCP) Lars Wittig said. These include amendments to the Foreign Investment Act, Retail Trade Liberalization Act, Public Service Act and opening up the renewable energy sector to 100-percent foreign ownership. "With billions in expected FDIs to come our way, we must ensure that foreign businesses do not encounter 'bad' processes once they arrive in the Philippines," Wittig added. European Union Ambassador Luc Veron said interest in the Philippines was picking up based on preliminary trade data for 2022.

ECCP launches guidebook on Doing Business in Philippines

The European Chamber of Commerce of the Philippines (ECCP) expects billions of dollars worth of foreign direct investments (FDIs) to enter the country, driven by economic reforms implemented by the Philippines. This was shared by ECCP president Lars Wittig at the press launch of the Doing Business in the Philippines publication yesterday. The ECCP cited the passage of key economic reforms such as the passage of the amendments to the Foreign Investment Act, Retail Trade Liberalization Act, and Public Service Act, as well as the relaxation of the foreign participation limitation in the renewable energy sector, as the driver of optimism among European business leaders and officials for higher FDIs in the country.

December trade gap widens; full-year deficit hits record 

The Philippine trade deficit widened in December from the previous month after exports declined to the lowest in more than two years, while imports continued to fall for the second straight month, the Philippine Statistics Authority (PSA) said on Thursday. This brought the 2022 trade balance to a record $58.32-billion deficit, higher than the $42.23-billion gap a year earlier. The value of merchandise exports fell by 9.7% year on year to $5.67 billion in December from a year earlier, ending three straight months of growth.

Philippine growth best since 1976

The Philippines weathered record inflation and interest rate increases last year by posting the fastest economic growth since 1976 — one of the strongest in Asia amid a dreary global outlook. Economic output grew by 7.2% in the three months through December from a year earlier, according to the local statistics agency, bringing the full-year expansion to 7.6%. Services and consumption boosted the economy last year as more businesses were allowed to fully reopen amid falling coronavirus infections.

Infrastructure spending jumps to P80 billion in November

The government ramped up its infrastructure spending in November, with expenses jumping by nearly 40 percent to P80 billion, as some roads and building projects were completed toward the end of 2022, the Department of Budget and Management said. Based on the latest national government disbursement performance report of the DBM, state infrastructure expenditure and other capital outlays surged by 38.4 percent to P80.2 billion in November from P58 billion in the same period in 2021. The growth of infrastructure expenditures also accounted for more than half of the P42.3 billion total increase in disbursements during the period.

NEDA to release infrastructure program in Q1

The National Economic and Development Authority (NEDA) plans to release within the first quarter the Public Investment Program (PIP), which lists the government’s priority projects for this year until 2028, as well as the infrastructure rolling program for 2024 to 2026. “Within this quarter, we will be releasing what we are calling the PIP for 2023 to 2028, as well as the three-year rolling infrastructure program for 2024 to 2026,” NEDA Secretary Arsenio Balisacan said during the Philippine Economic Briefing in Frankfurt in Germany. The PIP contains the list of priority programs and projects the government wants to complete within the plan period to contribute to achieving the goals under the Philippine Development Plan (PDP) or the country´s overall development blueprint.

PHL urged to ramp up infrastructure investment

The Philippines and ASEAN+3 member economies should boost infrastructure investments, which will help drive economic recovery while maintaining debt sustainability amid a looming global recession, the ASEAN+3 Macroeconomic Research Office (AMRO) said. AMRO Senior Economist Byunghoon Nam said the Philippines’ infrastructure stock and competitiveness is “low” compared with its neighbors. “Despite the ‘Build, Build, Build’ program launched in 2017, the Philippines still faces sizeable investment needs for both traditional infrastructures, such as transportation and utility, and new infrastructures for digitalization and climate change mitigation/adaption,” he said in an e-mail. The Philippine government plans to spend at least 5-6% of GDP on infrastructure.

ADB OKs $500-M loan for PH's agri sector

The Asian Development Bank (ADB) has approved a $500-million loan to prop up the Philippine agriculture sector that has been struggling due to economic challenges. In a statement on Friday, the ADB said the fresh policy-based loan intends to expand economic opportunities in the industry and help the Philippines secure its goal of meeting near- to long-term food security. It would particularly bolster the government's Subprogram 2 of the Competitive and Inclusive Agriculture Development Program, which is envisioned to develop the agriculture sector with trade policy and regulatory framework reforms. Boosting the rice industry under the program, the loan would also pump up the government's planning and management of land use and water resources. It also supports the country's rice buffer stock management to ensure food security, even during emergency situations.

Agricultural production dips in 2022

Agricultural production shrank by 0.1% in 2022, marking the third straight year of contraction, as crops and fisheries output declined, the Philippine Statistics Authority (PSA) said. Data showed the full-year value of production in agriculture and fisheries declined at a slower pace than the 1.7% contraction in 2021. It also missed the Department of Agriculture’s (DA) 1.2-1.5% full-year growth target. Farm output has contracted for three years in a row, since the 0.3% growth in 2019. The PSA attributed the decline to lower production in crops and fisheries, which offset the growth in poultry and livestock.

Talks on NAIA management fast-tracked

Efforts to improve the operations of the Ninoy Aquino International Airport (NAIA) are now under way through new maintenance and concession agreements for the facility, according to the DOTr. In a press conference in Malacañang, Transportation Secretary Bautista disclosed that President Marcos Jr. instructed them to fast-track the signing of a new agreement with the maintenance provider of NAIA, Sumitomo-Thales. The measure is meant to prevent another “glitch” in the communications, navigation and surveillance/air traffic management (CNS/ATM) of NAIA similar to what happened earlier this month, which led to the cancellation of over 600 flights. Currently, NAIA has no maintenance agreement since its system warranty with Sumitomo-Thales expired in 2020, according to Bautista.

Philippines makes headway in decarbonizing aviation

The Philippines is making headway in pursuing decarbonization in the commercial aviation sector with the use of sustainable aviation fuel (SAF), the United States Department of Agriculture (USDA) said. In a report, the USDA said the Philippine aviation industry has started recovering last year from the slump at the height of the COVID pandemic that disrupted transportation. “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,” it said.

DOE creates energy management system

The DOE is setting up an energy management team (EMT) that will develop an energy management system (EnMS) in line with its ongoing efforts to boost the implementation of energy efficiency and conservation measures in the country. Energy Secretary Lotilla has issued a department order institutionalizing the EMT to develop the EnMS, the purpose of which is to enable an organization to observe a systematic approach in achieving sustained improvement of energy performance, such as energy efficiency, energy use and consumption. Under the department order, the established EMT will be chaired by a director from the DOE’s energy utilization management bureau.

SEC to bar excessive fees, fines on investments

The Securities and Exchange Commission (SEC) said it is looking at restricting brokers of investment products from imposing excessive fees or other charges on their clients. The measure is part of a draft rule the SEC plans to implement to operationalize the Financial Products and Services Consumer Protection Act (FCPA) signed into law in May last year. The draft is up for public comment. The SEC said part of the proposed measure under the FCPA is the imposition of penalties like fines; disqualification and/or suspension of directors, trustees, officers or employees; issuance of cease and desist orders; suspension of operation; and disgorgement of profits of erring companies covered by the law.

Economists downgrade global economic growth

Global economic growth is forecast to barely clear 2 percent this year, according to a Reuters poll of economists who said the greater risk was a further downgrade to their view, at odds with widespread optimism in markets since the start of the year. Falling energy prices, a slowdown in inflation in most economies from multi-decade highs, an unexpectedly resilient euro zone economy and China’s economic reopening have led traders to speculate the downturn will be more mild. That has driven MSCI’s all-country world index of shares up nearly 20 percent from October lows, hitting a five-month closing high on Tuesday, despite the greater risk that central banks will keep interest rates higher for longer rather than cut them.

ECCP-Scoffi: Govt should double down on open finance [mention]

The government ought to double down its initiatives on open finance as it races to achieve its financial inclusion goals this year, the ECCP's Special Committee on Open Finance and Financial Inclusion (SCOFFI) says. As the new administration assures that it will prioritize digital transformation on a national scale, ECCP-SCOFFI believes 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. Open finance allows industry players to create customer-centric products and provide better access to critical financial services such as savings, insurance and credit. This year, the Bangko Sentral ng Pilipinas aims to bring at least 70 percent of adult Filipinos into the formal financial system, but as of 2022, 47 percent of the population remains unbanked.

DOH: Prices of medicines remain stable despite rising cost of goods

The DOH said the public can rely on the prices of medicines to remain stable despite the increasing cost of goods in the market. DOH officer-in-charge Maria Rosario Vergeire said the department is continuously monitoring the prices of medicines so there would be no issues concerning availability. “Based on our monitoring in December 2022, we saw one type of medicine, a set of medicines, these hypertensive medicines had a slight increase. But overall, prices of medicine are stable,” said Vergeire. She said the increase in the prices of hypertensive medicines was due to inflation and the weakening of the peso.