ECCP at Work

ECCP@Work Featured Articles | June 20, 2023

June 20, 2023

ECCP Online

ECCP at Work

PH falls by four spots in global competitiveness ranking

The Philippines dropped by four spots in the yearly global competitiveness report by the Switzerland-based International Institute for Management Development (IMD), amid a number of global uncertainties ranging from inflation to geopolitical issues. According to the 2023 World Competitiveness Yearbook (WCY) by IMD, the Philippines ranked 52nd this year out of 64 countries included in the report, down four spots from 48th place last year. Compared to its peers in the Asia-Pacific region, the Philippines continued to stay in 13th place out of 14 countries for six consecutive years. Professor Arturo Bris, director of the World Competitiveness Center, said this year’s results reflected the impact of different crises, including global inflation, the COVID-19 pandemic, and the war in Ukraine. 

PHL export promotion to require more funding — DTI’s Pascual 

The  Department of Trade and Industry (DTI) said export promotion will require greater funding to achieve the government’s aggressive goals for exporters. Trade Secretary Alfredo E. Pascual said that the extra funding will also go towards helping small companies find overseas markets.“If promote exports (and) help micro, small, and medium enterprises (MSMEs) develop, (investments like these) will have a return,” Mr. Pascual said. In the 2023 General Appropriations Act, the DTI had a budget of P6.3 billion, down from the P21.94 billion allocated in 2022.

Lack of incentives, red tape seen hindering RE growth

Red tape and inadequate incentives are posing obstacles to the growth of the Philippine renewable energy (RE) industry, the World Wide Fund for Nature (WWF) said in a report. “Lengthy permitting process has been identified as one of the biggest obstacles to the deployment of renewable energy. Just at the initial stage, the requirement for renewable energy developers to secure numerous permits and signatures can lengthen the permitting process,” according to the report, prepared by the WWF’s Philippine unit.

PH foreign debt stock rose to $119B in Q1

The Philippines’ outstanding foreign debt, compared to the size of the domestic economy, rose to 29 percent at the end of March from 27.5 percent at the end of last year, which the Bangko Sentral ng Pilipinas (BSP) said was still at a prudent level. External debt or all borrowings by Philippine residents from non-residents increased by 6.8 percent or $7.5 billion to $118.8 billion as of end-March from $111.3 billion as of end-December.

Business chamber bats for regulatory streamlining to realize RCEP potential

The Philippine Chamber of Commerce and Industry (PCCI) said more government support is needed in the form of streamlined regulation and infrastructure if businesses are to maximize the benefits of the Regional Comprehensive Economic Partnership (RCEP) trade deal. “In joining the RCEP, we have to work hard to maximize our gains from it. We have to improve our competitiveness by streamlining regulatory compliance and ensuring that government business services are in step with these streamlined procedures,” PCCI President George T. Barcelon said.

BSP seen holding key policy rate steady at 6.25%

The Bangko Sentral ng Pilipinas (BSP) is expected to again keep its policy rate unchanged at 6.25 percent amid expectations of continually easing inflation, even as climate experts have declared the onset of El Niño that could push up prices of basic goods. ING Bank said in a commentary the BSP was likely to hold interest rates steady considering that inflation is moderating and the United States Federal Reserve also did not change federal fund rates in a policy meeting last week. 

DICT, PPP Center team up for digital infra projects

The Department of Information and Communications Technology (DICT) and the Public-Private Partnership (PPP) Center of the Philippines  inked a memorandum of agreement to support the development of the ICT sector through implementation of PPP projects. The agreement outlines a framework for collaboration in terms of project assistance, capacity building and crafting of PPP policies and guidelines. PPP Center Executive Director Ma. Cynthia Hernandez said the agency was hoping that the “DICT will also extend their assistance to implementing agencies that are developing IT projects and to help them evaluate unsolicited proposals.”

Top PH CEOs push P267-B Naia rehab proposal

The leaders of some of the country’s top conglomerates, along with their New York-based partner Global Infrastructure Partners (GIP), came out in full force on Monday to pitch their P267-billion unsolicited proposal to rehabilitate Ninoy Aquino International Airport (Naia), while reiterating the need for 25 years to realize the big-ticket project. During a press briefing in Makati City, the Manila International Airport Consortium (MIAC) shared its strategy—to be implemented in phases—to expand the capacity of the congested airport, ultimately increasing it to 70 million passengers annually from the current 31 million. 

BIR order exempts fertilizers and animal feeds from Authority to Release Imported Goods 

The Bureau of Internal Revenue (BIR) scrapped a non-tariff measure to fast track the release of imported feeds, feed ingredients as well as fertilizers and minimize losses incurred by importers because of bureaucratic delays. BIR Commissioner Romeo D. Lumagui Jr. issued Revenue Memorandum Circular (RMC) 68 series of 2023 that expanded the coverage of the non-issuance of Authority to Release Imported Goods (ATRIG) certificate for importers of goods that enjoy value-added tax (VAT) exemptions. Under the RMC, Lumagui removed the need for importers of feeds, feed ingredients and fertilizers to secure an ATRIG certificate from the BIR prior to release of their inbound shipments by the Bureau of Customs (BOC).

T-bill, T-bond yields may rise before BSP meeting

TREASURY BILL and bond rates may rise this week as the Bangko Sentral ng Pilipinas (BSP) is widely expected to mirror the US Federal Reserve’s pause in its tightening cycle. Rates on the short-term debt may follow the advance at the secondary market due to recent signals that the BSP may begin cutting the key rate in the first quarter of next year, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said.

Easing in PHL monetary policy seen in Q1 2024

THE recent decision of the United States Federal Reserve to maintain its interest rates is not enough assurance that rate cuts are coming, according to the Bangko Sentral ng Pilipinas (BSP). BSP Governor Felipe M. Medalla said that while yield curves are showing signs that the US Fed will cut rates in the short term, there are indications that given the longer-term data, rate cuts may not be expected. One thing that Medalla noted was that given the narrow differential between US interest rates and Philippine interest rates, this could lead to a “knee-jerk” reaction for the peso to depreciate. Based on the latest data, US interest rates were maintained at 5.25 percent while Philippine interest rates were also maintained at 6.25 percent.

‘Malnutrition, child stunting must be top natl agenda’

THE Management Association of the Philippines (MAP) is urging the government to declare malnutrition and child stunting as top national agenda, particularly to ensure that concrete measures will be taken and sufficient funds will be earmarked, among others. The MAP also stressed that this should be addressed together with “other urgent issues” like poverty, climate change, and national security.

VAT refund for non-resident tourists must pass this year―Sen Gatchalian

THE head of the Senate Ways and Means Committee is confident the proposed value-added tax (VAT) refund measure for nonresident tourists “could likely be enacted into law within the year,” in a vital boost to the country’s bid to ramp up growth and recovery as revenue in many sectors are seen to well-offset the forgone revenue from the bill. To underscore the urgency of enacting the bill into law, Senator Sherwin T. Gatchalian noted that the Philippines is the only remaining country belonging to the Association of Southeast Asian Nations (Asean) that is yet to adopt a VAT refund program for foreign tourists. Proponents believe the measure will enhance the country’s competitiveness as a tourist destination in Asia and boost tourist arrivals to its pre-pandemic level of 8.2 million in 2019.

NGCP seeks ERC nod for ASPAs with 3 power firms

THE National Grid Corporation of the Philippines (NGCP) is asking the Energy Regulatory Commission (ERC) to provisionally approve the ancillary service procurement agreements (ASPAs) it entered into with three power producers.

Meat imports up 3.78% in first 5 months

Meat imports rose 3.78% year on year in the five months to May, driven by higher shipments of chicken, buffalo meat, lamb, and duck, according to the Bureau of Animal Industry (BAI). The BAI said import volume amounted to 478 million kilograms of meat and meat products in the first five months. Chicken imports, which accounted for 36% of meat imports overall, totaled 172.62 million kilos, up 32.25% from a year earlier.

Some 55.18% or 95.26 million kilos came in the form of mechanically deboned meat (MDM). Chicken MDM imports rose 293.89% during the period. The Department of Agriculture recently lifted a ban on poultry products from the Netherlands and the US state of Minnesota after these locations were declared free of H5N1 Highly Pathogenic Avian Influenza.

Agriculture sector remains lowest GDP contributor 

The agriculture sector saw its lowest contribution to the national economy last year over a five-year period. Of the country’s three major economic sectors, the gross value added (GVA) of the agriculture, forestry and fishing (AFF) sector reached P1.78 trillion, accounting for 8.9 percent of the gross domestic product (GDP) in 2022, based on the latest Agriculture Indicators System of the Philippine Statistics Authority (PSA).  This is against the 61.4 percent share of the services sector and 29.7 percent share of the industry sector. 

Foreign debt rises to record-high $119 billion in 1st quarter 

The Philippines’ foreign debt hit an all-time high of $118.81 billion in the first quarter due to statistical adjustment and as the national government borrowed more from offshore creditors, according to the Bangko Sentral ng Pilipinas (BSP). Based on BSP data, the latest foreign debt was 8.2 percent higher than the $109.75 billion incurred in the first quarter of last year, and by 6.8 percent compared to the end-2022 level of $111.27 billion. BSP Governor Felipe Medalla said the rise in the debt level during the first quarter was driven primarily by the statistical adjustment involving the inclusion of the non-resident holdings of peso-denominated debt securities issued onshore in the debt stock. Medalla said the increase was also driven by the net availments of $2.7 billion largely by the national government as it raised $3 billion from the issuance of a multi-tranche global bond for  general financing requirements, as well as prior periods’ adjustments of $767 million.

Bank exec eyes up to 100K store owner-users of mobile app

Some 70,000 sari-sari store (convenience store) owners from four Luzon provinces have been enrolled in BPI Direct BanKo Inc., A Savings Bank (BanKo) mobile app and an executive of the bank aims these numbers to reach around 100,000 within a year. In a briefing on Monday for the launch of eNay, the mobile application intended for store owners, BanKo business head of Financial Inclusion and Microfinance Solutions Rod Mabiasen said some of the enrollees have opened a deposit account with the bank called PondoKo, which will serve as fund source that will be used to purchase groceries from the mobile app.

Stocks index down, peso gains

The local bourse’s main index started the week in the negative territory partly due to lesser factor from the United States given its Juneteenth holiday Monday, but the peso gained against the US dollar. The Philippine Stock Exchange index (PSEi) shed 0.89 percent, or 58 points, to 6,450.34 points. All Shares followed with a decline of 0.75 percent, or 25.87 points, to 3,441.24 points. Most of the sectoral gauges also slipped during the day, led by Holding Firms after it lost 1.32 percent. It was trailed by Property, 1.09 percent; Industrial, 1.01 percent; Services, 0.43 percent; and Financials, 0.41 percent. Only the Mining and Oil index gained during the day after rising by 0.95 percent.

Investors step back from equities to assess BSP’s next move

Philippine stocks ended lower on Monday during a relatively quiet session as investors awaited the results of the upcoming Bangko Sentral ng Pilipinas (BSP) policy meeting on Thursday. By the closing bell, the Philippine Stock Exchange index (PSEi) sank 0.89 percent, or 58 points, to 6,450.34 while the broader All Shares index slid 0.75 percent, or 25.87 points, to 3,441.24. 

GOCC subsidies up 75% in April

SUBSIDIES PROVIDED to government-owned and -controlled corporations (GOCCs) surged in April, data from the Bureau of the Treasury (BTr) showed. Budgetary support to GOCCs jumped by 75% to P8.958 billion in April from P5.117 billion in the same month a year ago. Month on month, subsidies declined by 17% from P10.795 billion in March. In the first four months, subsidies amounted to P30.266 billion, down by 3.6% from the P31.391 billion in the same period a year ago. 

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