April 25, 2023
ECCP at Work
European businesses in Taiwan are looking at expanding into the Philippines and the possible recruitment of Filipino talent given the prevailing geopolitical tensions with mainland China. According to ECCP Executive Director Florian Gottein, a European Chamber of Commerce of Taiwan delegation flew to the Philippines earlier this month to scope possible ventures. “They’re also looking to the Philippines for different reasons, obviously, because of the geopolitical situation as well. They are also looking into microelectronics, semiconductors in particular,” he said.
Local virgin coconut oil and coconut flour producers will undergo export marketing and marketing linkages training until December under a project funded by the European Union. Under ARISE Plus Philippines, 30 selected Philippine micro, small, and medium enterprises (MSMEs) will receive technical support to build an export brand, prepare for business deals and develop an export marketing plan. The event benefited from the participation of public and private partner institutions and industry associations, including the Department of Trade and Industry (DTI), the Department of Agriculture (DA), the Intellectual Property Office of the Philippines (IPOPHIL), the Philippine Coconut Authority (PCA), ECCP, World Intellectual Property Organization (WIPO), Virgin Coconut Oil Producers and Traders Association of the Philippines (VCOP) as well as the Women’s Business Council Philippines (WBCP).
The Philippines moved up 17 places to the 43rd spot out of 139 countries in this year’s World Bank Logistics Performance Index (LPI), which measures countries’ ability to trade goods across borders with speed and reliability. The report showed other countries in the same rank as the Philippines are Croatia, Czechia, Malta, Oman, Slovak Republic, Slovenia and Vietnam. In the previous edition of the report released in 2018, the Philippines ranked 60th. The World Bank’s latest report showed the country’s score also improved to 3.3 this year from 2.90 in 2018.
The resolution of the issue on value-added tax (VAT) zero-rating for local purchases made by exporters will be out before the end of April. With the recommendation of the Fiscal Incentives and Review Board (FIRB) technical working group, the Bureau of Internal Revenue (BIR) has drafted the necessary revenue regulations to clarify the coverage of the direct and exclusive use for purposes of VAT zero-rating.
Inflation may remain elevated amid an anticipated increase in global crude oil prices due to the planned output cut by the Organization of the Petroleum Exporting Countries and its allies (OPEC+). Earlier this month, OPEC and its allies, including Russia, announced oil output reductions of around 1.16 million barrels per day. Inflation eased to a six-month low of 7.6% in March from 8.6% in February. This brought the average inflation rate in the first quarter to 8.3%, above the BSP’s full-year forecast of 6% and 2-4% target band.
The Regional Comprehensive Economic Partnership (RCEP) will take effect on June 2, 2023, Trade Secretary Alfredo E. Pascual said. “The RCEP agreement will enter into force for the Philippines, 60 days from the said deposit of the instrument of ratification and that date of effectivity will be the 2nd of June 2023,” Pascual said. The Trade chief said the issuance of the executive order (EO) that they presented to the National Economic and Development Authority (NEDA) Board Meeting will “operationalize” the implementation of the Philippine tariff commitments under the RCEP agreement. Pascual said the EO is proposed to be effective on June 2,2023 to “coincide” with the end of the 60-day period after the deposit of the instrument of ratification of the mega trade deal.
The Development Budget Coordination Committee (DBCC) will pursue the legislative approval of revenue-generating measures in addition to the reforms under the Medium-Term Fiscal Framework (MTFF), Finance Secretary Benjamin Diokno said on Monday. “Including the imposition of higher excise taxes on sweetened beverages, rationalization of the Motor Vehicle Road User’s Tax, and reforms to the mining fiscal regime,” he said at the 184th DBCC Joint Statement. The revenue impact of these measures is expected to kick in starting 2025.
Trade Secretary Alfredo E. Pascual on Thursday personally backed calls for the extension of the deadline for the registration of Subscriber Identity Module (SIM) cards, noting this is crucial in hastening the march to digital payments, especially for small and medium enterprises. Pascual said the government should consider a longer registration period amid reports less than half of SIM card holders have registered with the Department of Information and Communications Technology (DICT). He reiterated the importance of ensuring most SIM cards are registered in boosting online transactions for micro, small, and medium enterprises (MSME).
The administration of President Ferdinand R. Marcos Jr. aims to provide electricity to more than a thousand communities for 2023 at a budget of P1.89 billion, according to the Department of Budget and Management (DBM). Budget Secretary Amenah Pangandaman said the amount would fund the programs of the National Electrification Administration (NEA) under the 2023 General Appropriations Act (GAA), including the Barangay/Sitio Electrification Project, Electric Cooperatives Emergency and Resiliency, and Installation of Solar Panels in Public Buildings. The Barangay/Sitio Electrification Project will have the biggest fund at P1.68 billion, which will benefit some 1,140 sitios all over the country. Pangandaman said rural electrification is vital to improve the quality of life of Filipinos and promote inclusive development.
President Ferdinand “Bongbong” Marcos Jr. has ordered the creation of the administrative framework and policy for offshore wind (OSW) development. This was enclosed in Executive Order No. 21, which was signed by Marcos on Wednesday, April 19. In the order, Marcos noted that OSW resources, “if optimally developed,” would play a “major” role in the country’s goal for a low-carbon future, improved energy security, and reduced dependence on imported fossil fuels.
Because of the Rice Tariffication Act’s (RTA) provision that the National Food Authority (NFA) can only source rice from local farmers, the agency already scrapped its proposal to import 330,000 metric tons of rice. Last week, Malacañang said the NFA suggested the importation of rice to cover an expected deficit in its buffer stock, or the optimal level that shall be maintained and used for relief programs. However, the law, which was signed in 2019, provided in its Section 8 that the NFA shall, in adherence with the rules, regulations and procedures to be promulgated, “maintain rice buffer stock to be sourced solely from local farmers.”
The Kilusang Magbubukid ng Pilipinas (KMP) urged the Department of Agriculture (DA) to act on the continuous increase in food prices nationwide. The groups noted that the prices of major food products — such as rice, vegetables, pork, chicken, and fish — had increased within the past few days, despite the statement of the National Economic Development Authority (NEDA) that the inflation rate was on a downtrend. “We see further worsening of the food crisis and food inflation in the coming months and not even the NEDA can cover up this reality,” former Agrarian Reform Secretary Rafael Mariano, who is chairman emeritus of KMP, said in a statement issued on Friday.
The Department of Agriculture (DA) is in the process of creating a roadmap to support the national animal feed and nutrition industry. The roadmap aims to assist the livestock and poultry sectors, which have been facing challenges such as supply shortages and increased feed costs. The agency issued an administrative order establishing the National Animal Feed Development Program (NAFDP) for a systematic governance of all plans, research, and development (R&D) projects and other animal nutrition initiatives.
The Department of Energy (DOE) said it would work together with other government agencies, local government units (LGUs) and the transmission concessionaire to implement Executive Order (EO) 21. The newly issued directive by President Ferdinand Maros Jr. has tasked the DOE to put together the development and issuance of a policy and administrative framework for the optimal development of offshore wind (OSW) resources in the country. This includes the integration to the Energy Virtual One-Stop Shop (EVOSS) system various permitting processes by the permitting agencies. The DOE has 60 days from the issuance of the EO to issue the framework. DOE Secretary Raphael P.M. Lotilla said the issuance of EO 21 would hasten the rollout of OSW projects in the country.
The Philippines is among the top recipients of loan and grant financing from the Asian Development Bank (ADB) across the region. In its Annual Report for 2022, ADB data showed it committed $2.995 billion to the Philippines in 2022, making the country the 5th largest recipient of sovereign, non-sovereign loans and grants. ADB committed $20.5 billion from its own resources in 2022 to help Asia and the Pacific continue its recovery from the Covid-19 pandemic despite fresh economic headwinds and crises. “Our support in 2022 helped our developing member countries [DMCs] navigate the immediate impacts of these crises while bolstering their longer-term resilience in critical areas such as climate change and food security,” said ADB President Masatsugu Asakawa.
Manila is targeting to ease rising food prices via a technical cooperation project it is undertaking with Tokyo which will enable the Philippines to craft food value chain models. Under the project which kicked off recently, the Japan International Cooperation Agency (Jica) and the Department of Agriculture (DA) will develop vegetable value chain models “to revolutionize” the Philippine agriculture sector. Jica noted that President Ferdinand Marcos Jr. had called rising food prices as an “emergency situation,” stressing the importance of a robust agriculture sector among his various priorities.
The National Irrigation Administration on Monday said it has identified areas that will be prioritized for irrigation, and will implement the alternate wetting and drying technique to address the threats posed by El Niño on the country’s water supply. Eduardo Guillen, acting administrator of NIA, said these are the agency’s “short-term solutions” to mitigate the impacts of El Niño, which can deplete water supplies and cause significant losses in agricultural production.
Amid the global lockdown due to the pandemic, the Philippines still raked in a whopping $38 billion in cash remittances in 2022 from around 11 million overseas Filipino workers who sent their hard-earned money to families back home. Data from the World Bank showed that the national government received the amount “from all channels in 2022,” making Manila the world’s fourth largest recipient of money from its overseas workers, after India, Mexico and China. House Minority Leader Marcelino Libanan, on the other hand, observed that the number of Filipino workers deployed abroad has since dropped to less than one million yearly, compared to pre-pandemic.
The Department of Education (DepEd) on Wednesday disclosed to the public its progress on the ongoing revision of the K-to-12 curriculum aimed at producing more job-ready graduates and sought feedback on the proposed changes and curriculum guides. The review, initiated by former Education Secretary Leonor Briones, was conducted by the department’s Bureau of Curriculum Development in collaboration with the Assessment, Curriculum and Technology Research Center and followed criticisms that the program had failed in churning out employable graduates. The most recent was the Commission on Human Rights situational report which showed that fresh graduates were having difficulty landing jobs.
The Department of Public Works and Highways (DPWH) plans to complete seven large-scale bridges worth P86 billion before the Marcos administration ends in 2028. In a forum with European investors, Public Works Undersecretary Maria Catalina Cabral said the DPWH plans to either complete or begin the construction of P525.78 billion in big-ticket bridges set to link cities, municipalities and islands. Within the Marcos administration, Cabral said the DPWH expects to finish seven priority bridges amounting to P86.17 billion, all of which will be funded by multilateral lenders.
President Ferdinand R. Marcos Jr. on Monday emphasized the importance of agriculture on the domestic economy’s growth, reiterating his commitment to prioritize the sector to ensure food security. In his speech during the distribution of projects and programs at the Central Luzon State University (CLSU) in the Science City of Muñoz, Nueva Ecija, Marcos said he took upon himself to head the agriculture department because agriculture plays a major role in the economy’s recovery based on their studies and plans.