ECCP at Work

ECCP@Work Featured Articles | April 5, 2023

April 05, 2023

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ECCP at Work

ADB keeps growth forecast for PH

The Asian Development Bank (ADB) has kept its growth outlook for the Philippines this year, with the expansion to be supported by rising domestic demand and a recovery in services particularly tourism. According to the ADB’s flagship economic publication Asian Development Outlook (ADO) April 2023, the Philippine economy is forecast to grow by six percent this year, climbing further by 6.2 percent in 2024. For 2024, the ADB sees slightly faster expansion as the global economy is also seen to post higher growth. However, risks from a sharper-than-expected slowdown in major advanced economies, heightened geopolitical tensions, and inflation stickiness could dampen the outlook for gross domestic product (GDP) growth, the agency said.

Inflation cooled in March, offering a reprieve

Inflation decelerated in March, after price growth hit its peak while the economy began absorbing the impact of expensive borrowing costs that were meant to tame robust consumer demand. The Philippine Statistics Authority reported inflation settled at 7.6% year-on-year in March, slower compared to the 8.6% year-on-year reading in February. The latest figures fell within the Bangko Sentral ng Pilipinas’ month-ahead forecast of 7.4-8.2% for March. However, this was still above the BSP's 2-4% inflation target.

WB trims PHL’s 2023 growth forecast from 5.8% to 5.6%

The Philippine economy may post an even slower growth this year as inflation continues to increase, according to the World Bank (WB). In its latest East Asia and the Pacific (EAP) Economic Update for April 2023, the country’s gross domestic product (GDP) is expected to post a growth of only 5.6 percent this year, lower than the 5.8 percent forecast it made in October 2022. The WB said among the larger economies of the region, most, including Indonesia, the Philippines, and Vietnam, are anticipated to grow more modestly in 2023 than in 2022.

DTI: PHL weighing impact of joining CPTPP accord

THE Philippines is now in the process of evaluating the impact of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), according to Trade Secretary Alfredo E. Pascual. “We are now in the process of evaluating the impact of joining the Agreement,” Pascual said, noting that the Philippines remains interested in joining the regional trade bloc. The Trade chief said the process includes evaluation of the country’s existing “legal regime” with regard to commitments or obligations of CPTPP parties.

NEDA presents strategies to achieve SDGs in the region

The National Economic and Development Authority (NEDA) has identified regional strategies that will help attain the Sustainable Development Goals (SDGs) in Southeast Asia. In a statement presented by NEDA Secretary Arsenio Balisacan at the 2nd Asean Ministerial Dialogue on Accelerating Actions to Achieve the SDGs, he proposed a set of measures for the Association of Southeast Asian Nations (Asean) to attain the SDGs. The first step, according to Balisacan, is to establish robust and resilient ecosystems for research and development (R&D) and innovation.“It is pivotal to foster resilient communities by supporting R&D and innovation for a healthy, inclusive, sustainable region.  Collaborating to rethink and redesign existing systems, institutions and communities, with health and well-being at their core, is a necessity,” he said.

Budget gap widens in February as revenue collections decline

The National Government’s (NG) budget deficit slightly widened in February as revenue collection slipped and spending was flat, the Bureau of the Treasury (BTr) reported on Monday. Data from the BTr showed the Philippines’ budget gap reached P106.4 billion in February, up by 0.5% from P105.8 billion recorded in the same month in 2022. Month on month, the NG’s fiscal balance swung back to a deficit in February from the P45.75-billion surplus in January.

BOC beats Q1 goal

The Bureau of Customs (BOC) continues to post a strong collection performance in the first quarter of 2023 as it exceeded its collection goal by 8.43 percent. In a statement, the BOC said it collected P213.619 billion in January to March, versus the revenue target of P197.02 billion for the same period. The BOC’s collection for March 2023 alone was P80.133 billion, exceeding its target of P72.282 billion by 10.86 percent. The BOC’s collection performance for the first quarter of 2023 is also a significant improvement from the same period last year, exceeding the P188.557 billion collection in 2022 by 13.29 percent.

Diokno: Boost agri output to address food-related inflation

Department of Finance (DOF) Secretary Benjamin Diokno cited the importance of ensuring increased food production in the country to address food-related inflation, saying importation is the last resort to boost supply. In a briefing, Diokno recognized the need to improve domestic agricultural production to increase food supply, which is among the reasons for the current elevated rate of price increases in the country. “If we compare our farm output with other countries, we’re behind so we are introducing both the technology and new methods, better seeds (and) fertilizer. We are investing in all these,” he said. Diokno said the government turns to importation “if there is a difference between supply and demand.”

DA to launch World Bank-funded program for farmers, fisherfolk

The Department of Agriculture (DA) is on track to launch a World Bank-funded rural development program for farmers and fisherfolk in July. The Philippine Rural Development Project Scale-Up (PRDP Scale-Up) aims to improve farmers’ and fisherfolk’s access to markets and profitability in selected value chains. In a recent meeting with the WB, DA assistant secretary and PRDP National project director Arnel De Mesa and national deputy project director Shandy Hubilla presented the progress of the team on the preparation for the project appraisal.

Manufacturing posts modest growth in March

The Philippines’ manufacturing sector continued to demonstrate a modest expansion in March, according to a report released yesterday. The headline S&P Global Philippines Manufacturing purchasing managers’ index (PMI), a composite single-figure indicator of manufacturing performance, posted above the crucial 50 neutral threshold for the 14th consecutive month.  Despite slipping to 52.5 in March from 52.7 in February and marking the softest rate of expansion in seven months, the headline figure indicated a historically strong improvement in operating conditions, the report said.

PH welcomes EU decision on Filipino seafarers, vows to work on areas for improvement

The Philippine government welcomed the European Commission's decision to continue to recognize the certificates of Filipino seafarers, and vowed to continue working on other areas for improvement in the maritime sector. In a statement on Saturday, Department of Transportation (DOTr) Secretary Jaime Bautista said the government is "deeply elated" by the move of the commission, which cited the country's "serious efforts" to comply with international seafarer standards. "As the [commission] lauded our cooperation and welcomed our efforts at improving the Philippine system of training and certifying Filipino seafarers, we commit to address the remaining areas identified that require further improvement," Bautista said.

Marcos: Rising food prices the biggest problem For Filipinos; more Kadiwa stores needed

President Ferdinand Marcos, Jr. on Friday recognized steep food prices as the “biggest problem” Filipinos faced and vowed to open more Kadiwa stores that would offer cheaper farm products. Marcos attributed the problem to the country's reliance on imports and its long-time neglect of the agriculture sector. In the meantime, the government offers cheaper food products in Kadiwa stalls by shouldering transportation and packaging costs, among others. Some 300 Kadiwa stalls are “viable and operational” across the country, Marcos noted.

SRA eyes selling seized smuggled sugar by April, says exec

The Sugar Regulatory Administration (SRA) eyes selling confiscated smuggled sugar in Kadiwa stalls starting April, an executive said on Friday.  “We already have the approval for the donation of the sugar na nahuli for the Kadiwa for sale. Last week, we were just discussing the documentation and the legalities so we can sell it right away,” SRA board member Pablo Luis Azcona said. “I think just as long as we finish, there are certain details we are fixing up, kung saan papasok yung funds, small details, something like that. And then after that, hopefully by April puwede na yun,” he noted. (There are certain details we are fixing up, where the funds will go, small details, something like that. And then after that, hopefully by April, it's a go.) An initial 4,000 metric tons of sugar will be sold next month, he said. 

Loan growth eases for third month in a row 

Loans disbursed by big banks slowed for a third consecutive month in February, reflecting the impact of rising borrowing costs and base effects. Outstanding loans by big banks grew by 10% to P10.69 trillion in February from P9.72 trillion a year earlier, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed. The loan growth in February is a tad weaker than the 10.4% growth in January. This is also the slowest credit growth in 11 months or since the 8.9% print in March 2022. Month on month, outstanding universal and commercial bank loans, net of reverse repurchase placements (RRPs), eased slightly by 0.2%, the BSP said.

Bongbong Marcos says battery energy farms may be a ‘solution’ to PH energy needs

President Ferdinand Marcos Jr. on Friday said he sees battery energy farms as a “solution” to the country’s energy needs. He made the statement during the inauguration of San Miguel Corporation (SMC) Global Power’s Battery Energy Storage System (BESS) in Bataan. With this technology, Marcos said power could be stored when not needed or during times of oversupply and it can be released when needed, especially when there is a shortage. “The most important problem was that precisely the peak supply does not necessarily coincide with the peak load. And there was also the very simple problem of how we can guarantee supply of the base load,” he said in his speech.

DTI’s Pascual expresses support for Internet Transactions bill

TRADE Secretary Alfredo E. Pascual declared his support for the proposed Internet Transactions Act, citing the need for consumer protection in growing the e-commerce market. “The  bill seeks to strengthen trust in e-commerce and online transactions. At the heart of this highly anticipated legislative measure are mechanisms such as the Online Business Registry (OBR) and the e-commerce Philippine Trustmark,” Mr. Pascual  said during his speech at the Ad Standards Council induction last week.

DHSUD: Government housing program to contribute to economic growth

The administration’s Pambansang Pabahay para sa Pilipino Housing (4PH) Program will play a significant role in the attainment of the Philippine Development Plan (PDP) for 2023 to 2028, the Department of Human Settlements and Urban Development (DHSUD) said. In a statement, DHSUD Secretary Jose Rizalino Acuzar over the weekend said the 4PH Program will contribute in maintaining economic growth and creating more resilient jobs. The PDP 2023-2028 includes the establishment of livable communities as among its key transformation strategies under the social and urban development sector, “by upgrading and planning human settlements such that an integrated use of space will bring people closer to work, recreation and transit options.” The DHSUD said the goal to establish livable communities is anchored on the country’s commitment to the United Nations’ Sustainable Development Goal 11 to make cities and human settlements “inclusive, safe, resilient and sustainable.”

Oil prices up anew, VAT exemption sought

Oil companies  implemented a price hike after two consecutive weeks of price cuts. News of global crude output cuts had prompted a lawmaker to revive a proposal to suspend the collection of value-added tax on fuel. Seaoil increased per liter prices by P1.40 of gasoline, P0.50 on diesel and P0.20 on kerosene. PTT and Phoenix Petroleum adjusted per liter prices upward by P1.40 on gasoline and P0.50 on diesel. Latest adjustments were mainly attributed to the tightening of petroleum supplies in some parts of the world. Department of Energy (DOE) data as of March 28 showed average Manila price per liter of gasoline (RON95) is at P61.65, diesel at P56.80 and kerosene at P69.23.

DOE issues notice of auction for 11,600-MW renewable energy capacity

The Department of Energy (DOE)  has issued the notice of auction for 11, 600 megawatts (MW) of renewable energy capacity under the second round of its Green Energy Auction (GEA-2) program. The said capacity will have to be installed from 2024 to 2026. In a statement on Tuesday, the DOE said the notice of auction was issued on March 27 and the bidding’s terms of reference (TOR) will be released 20 days after.   It said the contracts will be awarded in June. “While the GEA-2 is expected to encourage more investments in power generation, it further pursues to promote the growth of renewable energy (RE) as one of the country’s primary sources of energy,” it said.

Lending for PH set at $4B

The Asian Development Bank (ADB) has earmarked roughly $4 billion in its lending program this year to support the financing requirements of several major projects in the country. In his presentation in a press conference at the ADB office yesterday, Kelly Bird, ADB Philippines country director, listed down eight projects in the pipeline this year, with one on standby status. These are the Support for Post-COVID-19 Business and Employment Recovery Program, Subprogram 1 with a $500 million loan that has been approved; Competitive and Inclusive Agriculture Development Program, Subprogram 2, also with $500 million financing approved; Inclusive Finance Development Program, Subprogram 3 with a $300 million loan; and the Build Universal Healthcare Program, Subprogram 2 with $400 million earmarked for financing.

Charter change may not be needed if PSA law is implemented — experts

ECONOMISTS and policy experts urged the Marcos administration to fully implement and harness the potential of the amended Public Service Act (PSA), which opens up the economy without changing the current Constitution. The amended PSA, signed by then-President Rodrigo R. Duterte in March 2022, allows full foreign ownership in telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports. The sectors were previously subjected to the 40% foreign ownership cap for public utilities under the Constitution.

Denmark’s leading wind energy firms eyeing opportunities in PH

Danish Ambassador to the Philippines Franz-Michael Mellbin said the liberalization of the renewable energy (RE) sector in the Philippines has attracted the interests of Denmark’s largest wind energy companies. On the sidelines of a recent event at the Department of Energy (DOE), Mellbin told reporters that the Royal Danish Embassy here is “looking at a handful of companies” that are interested to explore business in the Philippines. “[W]e have the two of the largest wind companies in the world, Vestas and Siemens Gamensa. There are also big interests from these companies to move into the market,” he said. The envoy said the Philippines became an attractive market for Danish RE firms following the amendments to the Renewable Energy Act that now allows 100-percent ownership of projects for foreign investors.

Envoy: UK’s new trading scheme to cover more tariff lines

United Kingdom’s Developing Countries Trading Schemes (DCTS), a new trading scheme launched by the British government, will cover more tariff lines than the current UK Generalised Scheme of Preferences (GSP) and the European Union GSP Plus (EU GSP+), the British envoy here said. British Ambassador to the Philippines Laure Beaufils told reporters over the weekend that under the DCTS, more products from developing countries will be treated with zero tariffs upon entering the UK market. “The DCTS was developed after quite a lot of consultation, including in the Philippines, to really learn from GSP+ and think about what works well and what can we do even better. So, in many ways, it is the top best of its class,” Beaufils said in an interview following the visit of UK Minister for Indo-Pacific Anne-Marie Trevelyan here on March 30 and 31. 

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