May 19, 2023
ECCP at Work
Foreign investment pledges surged in the first quarter, amid the Marcos administration’s efforts to boost the country’s profile as an attractive investment destination, analysts said. The value of foreign commitments approved by the country’s investment promotion agencies soared to P172.7 billion in January to March, preliminary data from the Philippine Statistics Authority (PSA) showed. This was nearly 20 times higher than P8.98 billion in the first quarter of 2022, but slightly lower than the P173.61 billion in the previous quarter.
PEZA approved P33.09 billion worth of investments in the first four months of 2023, more than double the investments approved a year ago. “From January to April 2023, PEZA has approved a total of 60 new and expansion projects worth P33.094-billion investments, which is 107.15% higher as compared to the P15.975-billion approved investments on the same period in 2022,” PEZA Director-General Tereso O. Panga said.
The Philippine economy may expand at a much slower pace next year due to weak external demand and high base effects, the International Monetary Fund (IMF) said. IMF Mission Head to the Philippines Shanaka Jay Peiris said Philippine gross domestic product (GDP) growth may fall within the 5.5-6% range in 2024.
While many sectors and economic observers in the country tried to play down if not criticize the “low” GDP growth of 6.4% in the first quarter (Q1) this year as reported by the Philippine Statistics Authority (PSA), it was actually excellent growth by global standards. 29 economies that reported their Q1 2023 GDP data.
As many as 100,000 jobs in the Philippines might be at risk and could become obsolete amid “rapid global digitalization,” according to management consulting firm Kearney. “We have done a study on this and there’s a percentage of jobs that will probably become obsolete in the next three to four years. When we were calculating, it came out to about 50,000 to 100,000 jobs that were being netted off,” Kearney Philippines Country Head Marco de la Rosa stated.
President Ferdinand R. Marcos, Jr. signed an agreement renewing the service contract for the Malampaya gas field until 2039, according to the Presidential Communications Office (PCO). The renewal of Service Contract (SC) 38, which covers the Malampaya gas field in offshore Palawan, would reduce the country’s dependence on oil imports and ensure a stable supply of clean energy, Mr. Marcos was said.
The National Government’s (NG) outstanding debt as a share of the gross domestic product (GDP) inched up to 61% as of end-March. Data from the Bureau of the Treasury (BTr) showed that the latest quarterly debt-to-GDP ratio was slightly higher than the 60.9% seen as of end-December. This was also still above the 60% threshold considered manageable by multilateral lenders for developing economies.
The DOE has a proposal to amend the Electric Power Industry Reform Act of 2001 (EPIRA) to ban foreign-owned or foreign government-backed enterprises from engaging in power transmission. Undersecretary Sharon Garin presented the DOE version of the bill seeking to reform the EPIRA (Republic Act No. 9136) — which many lawmakers believe has failed to bring electricity prices down.
If the House of Representatives wanted a quicker passage of the estate tax amnesty bill, it should have approved the bill and transmitted it to the upper chamber earlier, said Senate President Juan Miguel Zubiri. Zubiri made the statement after Albay 2nd District Representative Joey Salceda urged the Senate to fast-track the passage of the bill before Congress goes on sine die adjournment.
Some 6.9 million children have been vaccinated against measles, rubella and polio under the government's "Chikiting Ligtas 2023" campaign, according to the Department of Health. As of May 15, about 5.3 million were vaccinated against measles and rubella, DOH officer-in-charge Maria Rosario Vergeire said in a press briefing Tuesday. This latest figure represents 55.47 percent of the total eligible population. The campaign aims to vaccinate 9.5 million children against measles and rubella, and provide bivalent oral polio vaccine to 11 million children.
The DOE urged consumers not to raise their hopes too high that the contract extension of the Malampaya project would boost the power supply and prevent a looming shortage. However, Energy Secretary Raphael Lotilla warned that there was no assurance that the exploration activities in the area covered by SC 38 in offshore Palawan would yield additional gas supply. The official noted that an additional investment of at least $330 million would be needed to fund the facilities needed to connect the wells—assuming gas would be found—to the existing Malampaya production platform.
The Department of Agriculture (DA) will roll out four new projects worth P65 billion aimed at boosting the farm productivity in the country. Four new programs with a combined P65.3 billion in investments are set to be implemented in partnership with international funding institutions World Bank and the Food and Agriculture Organization of the United Nation. The projects are also expected to contribute in the easing of inflation and growth in the countryside.
The recent clarification issued by the Bureau of Internal Revenue (BIR) on the value added tax (VAT) zero-rating is a welcome development for the information technology-business process management (IT-BPM) sector. In a statement, IBPAP president and CEO Jack Madrid welcomed the release of Revenue Regulations (RR) 3-2023 by the BIR, which clarifies the local purchases of registered businesses enterprises subject to the 12% VAT.
The Department of Tourism (DOT) has no plan to impose stricter travel restrictions despite the recent increase in COVID-19 cases in the country. Tourism Secretary Christina Frasco said the government would continue to “open up” the Philippines to travel and tourism as it moves forward from the pandemic, assuring the public that minimum health and safety standards are in place. From May 8-14, the DOH reported 12,414 new COVID-19 cases, a 31% increase from the previous week, marking the highest weekly count in 29 weeks and the first time in 28 weeks that it surpassed 10,000.
PRICE GROWTH of construction materials in the National Capital Region (NCR) eased at both the retail and wholesale levels in April, the Philippine Statistics Authority (PSA) said. Citing preliminary data, the PSA said the April construction materials retail price index (CMRPI) eased to 2.6% from 4.1% in March and 6.1% a year earlier. The PSA said price growth in structural steel was 6.5% in April, down from 7.1% in March.
The government is working on contingency plans ahead of the El Niño weather pattern that is likely to develop later this year. The National Economic and Development Authority (NEDA) said that the recently created Economic Development Group (EDG) met to discuss issues that “could potentially affect the trajectory of the Philippine economy,” such as the El Niño.
Moderna is eyeing to bring into the Philippines more of its vaccines not just for the new coronavirus disease 2019 but other respiratory vaccines as well as those that fight rare diseases like birth defects and cancer. Łukasz Wielochowski, head of Moderna Enterprise Solution Hub in Poland, in the same briefing said the company is eyeing either the Bonifacio Global City or Makati as site of the enterprise solutions facility in the Philippines which will provide services on finance, pharmacovigilance, medical procurement, regulatory and human resources for the firm’s Asia-Pacific operations.
The National Grid Corporation of the Philippines (NGCP) said it is “fully cognizant” that its franchise is a privilege granted by the government and is ready to answer questions raised on its operations as it pursues its mandate as the country’s grid operator. NGCP made this comment as senators yesterday called for a comprehensive audit on the reliability of the transmission system and the performance of NGCP amid the power outages experienced in parts of the country.
The Department of Environment and Natural Resources (DENR) said the National Solid Waste Management Commission (NSWMC) recently approved the 10-year solid waste management plans (SWMPs) of 54 cities and municipalities across the country. DENR said the move brings to 1,263 the total number of approved SWMPs, which accounts for 79 percent of all 1,592 local government units (LGUs) required to submit and implement their plans in accordance with the Ecological Solid Waste Management Act of 2000. Under the law, LGUs are mandated to formulate 10-year SWMPs that conform to the National Solid Waste Management Framework of the NSWMC.
The Marcos administration has released some PHP7.68 billion in subsidies to more than seven million beneficiaries of the Department of Social Welfare and Development's (DSWD) targeted cash transfer (TCT) program. In a statement released Thursday, the Department of Budget and Management said the release of Special Allotment Release Orders (SARO) amounting to PHP7,684,844,352 has been approved on Tuesday. "DBM Secretary Amenah F. Pangandaman has approved on 16 May 2023 the release of Special Allotment Release Orders with a total amount of P7,684,844,352 to fund the Targeted Cash Transfer Program of the Department of Social Welfare and Development," the budget department said.
The Bangko Sentral ng Pilipinas on Thursday kept the benchmark interest rate at its current level of 6.25 percent after inflation eased for 3 straight months. BSP Governor Felipe Medalla made the announcement during the central bank's Monetary Policy meeting. Inflation decelerated for 3 straight months, settling at 6.6 percent in April, 7.6 percent in March and 8.6 percent in February. However, the most recent inflation rate remains above the government's 2 to 4 percent target range. The BSP also lowered its inflation forecast to 5.5 percent from 6.1 percent for 2023 and 2.8 percent from 3.1 percent in 2024.
PRESIDENT Ferdinand R. Marcos Jr. on Wednesday said the government will open the sugar importation market to all traders as the country is set to import between 100,000 and 150,000 metric tons (MT). In a statement, Marcos said he sat down with all stakeholders in the sugar industry. “We agreed on an importation schedule and how we will open up the importation to all of the traders. It is up to them to bid or give their proposals, and that’s the big change we made. we will still import up to 150,000 metric tons,” he said. Marcos stressed the need to make the country’s sugar industry competitive in the world market in the future and will prioritize local production.
The BSP paused its aggressive monetary policy tightening campaign, and signaled the policy rate will remain unchanged at its next two to three meetings as inflation continues to ease. At its policy meeting on Thursday, the Monetary Board kept its benchmark interest rate unchanged at 6.25% as expected by 13 of 18 analysts in a BusinessWorld poll last week. Interest rates on the overnight deposit and lending facilities were also maintained at 5.75% and 6.75%, respectively.
The House Makabayan Coalition has filed a measure aimed at ensuring the welfare of business process outsourcing (BPO) workers. House Bill No. 8189, or the proposed BPO Workers Welfare & Protection Bill, seeks to “set standards for fair labor practices and extend additional benefits to BPO employees, including protection against job insecurity, a standard national entry-level wage (based on the family living wage), and the right to medical benefits upon employment,” Kabataan Party-list Representative Raoul Danniel A. Manuel said in a statement. Alongside Mr. Manuel, Deputy Minority Leader and ACT Teachers’ Party-list Rep. France L. Castro and Assistant Minority Leader and Gabriela Party-list Rep. Arlene D. Brosas were listed as authors of the bill. The Philippines has the second largest BPO industry in the world, generating estimated revenue of $33 billion in 2022 from a workforce of 1.6 million, according to the BPO Industry Employees Network (BIEN).
Canada is calling on the Philippine government to support its free trade negotiations with the Association of Southeast Asian Nations (ASEAN). According to Canadian Foreign Minister Mèlanie Joly, Canada is hoping to become a strategic partner of ASEAN."Regarding trade, we are negotiating for a free trade agreement with ASEAN. So we hope that we could have the support of the Philippines. And we are negotiating also to become a strategic partner of ASEAN, recognizing the importance of ASEAN Centrality,” Joly said during a courtesy call on President Ferdinand R. Marcos Jr. in Malacañang on Thursday. Joly also told Marcos Canada will further strengthen people-to-people ties between the two countries by offering more scholarships for Filipinos, and will expand cooperation with the Philippines in other areas such as agriculture.
The Philippines and Australia have agreed on forging stronger maritime and defense cooperation. The visiting Australian Foreign Minister said the Philippine Coast Guard will get a major boost in training and equipment.