ECCP at Work

ECCP@Work Featured Articles | July 7, 2023

July 07, 2023

ECCP Online

ECCP at Work

ECCP pitches urgency of EU-PHL FTA talks | Andrea E. San Juan

Following the European Commission’s proposal to extend the European Union Generalised Scheme of Preferences Plus (EU GSP+) for the Philippines, the European Chamber of Commerce of the Philippines (ECCP) has stressed the urgency anew of concluding the talks on a free-trade deal between the EU and the Philippines. This, it said, will increase market competitiveness, among others. In a statement on Thursday, the ECCP welcomed the proposal of the European Commission (EC) to extend the EU GSP+ grant to the Philippines, saying the Philippines has “greatly” benefited from such a scheme. | Read the ECCP statement here. 

ECCP members clamor for resumption of PH-EU FTA talks

A large majority of European companies in the Philippines have prioritized the resumption and successful conclusion of the EU-Philippines free trade agreement talks, a survey by the ECCP showed. Based on the survey, 80 percent of the respondents see the importance of the resumption of the EU-PH FTA talks, while 81 percent of the respondents holds the conclusion of the EU-PH FTA talks of significant importance for their respective company and business strategies. The ECCP released Thursday, July 6, the FTA survey they conducted during the first half of 2023 with close to 200 respondents. “This shows a strong appetite for the recommencement and conclusion of EU-PH FTA talks. The ECCP continues to advocate for the timely conclusion of the said FTA deal,” the ECCP statement added. | Read the survey results here.

LEDAC identifies 20 bills for Congress approval before the end of 2023

A bill seeking to ease the Bank Secrecy Law and another proposing to regulate the use of financial accounts have been included in the Legislative-Executive Development Advisory Council’s (LEDAC) list of 20 priority measures targeted for Congress approval by December. LEDAC members agreed to include the proposed amendments to the Bank Deposit Secrecy Law and the Anti-Financial Account Scamming Act to the list of 20 priority legislative measures. Both bills were endorsed by the Bangko Sentral ng Pilipinas (BSP). This after the Financial Action Task Force last month kept the Philippines in its “gray list” of countries under increased monitoring for money laundering and terrorism financing risks. The BSP is hoping the Philippines will be removed from the gray list by January 2024.

Inflation eases in June

Inflation in the country eased for the fifth straight month in June largely due to slower increases in food prices, the Philippine Statistics Authority (PSA) said. PSA chief Dennis Mapa said headline inflation – the rate of increase in prices of goods and services – continued to move at a slower pace of 5.4 percent last month, from 6.1 percent the prior month and in June last year. He said this is the lowest inflation print since 4.9 percent in April last year. The June inflation rate is also within the Bangko Sentral ng Pilipinas’ 5.3 to 6.1 percent forecast for the month. Mapa said the slowdown in inflation was mainly due to the prices of food and non-alcoholic beverages, which had a lower inflation rate of 6.7 percent in June from 7.4 percent in May.

PHL among top 5 host economies of renewable energy business 

The Philippines has made it to the top five host economies of renewable energy investments in the Developing Asia and Oceania region from 2015 to 2022, according to the World Investment Report 2023 released by the United Nations Conference on Trade and Development (Unctad). The Unctad report, published on July 5, 2023, showed that in the Developing Asia and Oceania region, the top host economies for international renewable energy projects are India, Vietnam and Taiwan Province of China, which attract more than 40 percent of the projects. The remaining 14 percent in the region was shared by the Philippines and Indonesia, out of the total 54 percent share of the five economies.

ECCP welcomes EU GSP+ extension [mention]

The pronouncement of Trade Secretary Fred Pascual regarding the proposal of the European Union Commission to extend the Generalized System of Preference Plus or GSP+ trade deal of the Philippines was welcomed by the European Chamber of Commerce of the Philippines as the country’s businesses have greatly benefited from such a scheme. “With a 77 percent utilization rate, 2.93 billion euros worth of Philippine products were exported to the EU using GSP+ last year based on the data of the DTI. Among the top exports to the EU are crude coconut oil, tuna, pineapple, and other agricultural products, among others,” the ECCP said in a statement on Thursday. The EU GSP+ agreement — which is set to expire in December 2023 — provides the Philippines zero tariffs on 6,274 locally-made products, as long as the country meets the requirements regarding human and labor rights, the environment, and good governance.

ECCP welcomes GSP+ extension proposal, pushes for EU-PH FTA [mention]

The European Chamber of Commerce of the Philippines (ECCP) has welcomed the proposal of the European Commission to extend the European Union (EU) Generalized Scheme of Preferences (GSP) regulation for another four years until 2027. “The ECCP welcomes the proposal of the European Commission to extend the EU GSP+ grant to the Philippines. The Philippines has indeed greatly benefited from such a scheme,” the chamber said in a press statement Thursday. Furthermore, the business group reiterated the “urgency and importance of a timely and successful conclusion” of the EU-Philippines free trade agreement (FTA) even the GSP+ benefits for the country could be extended for four years. ECCP executive director Florian Gottein also cited the chamber’s recent survey showing that European businesses operating in the Philippines have a “strong appetite” for the resumption of EU-Philippines FTA negotiations and the conclusion of the trade deal.

PHL needs to ramp up infrastructure program to boost competitiveness

The Philippines needs to ramp up efforts to improve infrastructure and educational system if it wants to become more globally competitive, experts said. Christopher Ed C. Caboverde, research manager at the Asian Institute of Management-Rizalino S. Navarro Policy Center for Competitiveness, said the Philippines has faced challenges in attracting foreign investors due to high energy costs and infrastructure issues. The Philippines fell four spots to 52nd out of 64 countries in the 2023 World Competitiveness Yearbook released by Switzerland-based International Institute for Management Development, from 48th spot in 2022.

Emmanuel Ledesma Jr. named PhilHealth chief

President Ferdinand R. Marcos Jr. has appointed Emmanuel Rufino Ledesma Jr. as president and chief executive officer (CEO) of the Philippine Health Insurance Corporation (PhilHealth). Ledesma will also serve as a member of PhilHealth’s expert panel and board of directors. In November 2022, Ledesma was named as acting PhilHealth chief. Ledesma used to be president and CEO of the Power Sector Assets and Liabilities Management Corporation (PSALM). The PhilHealth is mandated to administer the National Health Insurance Program which aims to provide health insurance coverage and ensure affordable, acceptable, available and accessible healthcare services for all Filipinos.

Manufacturing sector further expanded in June

The country’s manufacturing sector continued to expand in June, albeit at a slower pace amid signs of weakening demand for the products as well as subdued hiring. The S&P Global Philippines Manufacturing PMI (purchasing managers index) was pegged at 50.9 in June, easing from 52.2 in May. According to S&P Global, the Philippine manufacturing sector has been expanding year-on-year for the 17th consecutive month, but the June readout was the weakest in 11 months or since July 2022. A PMI of above 50 means an overall increase (more positive responses than negative) while less than 50 means an overall decrease (more negative answers than positive).

List of VAT-exempt medicines updated; FDA adds 59

A total of 59 medicines, including ones for cancer and other ailments that need “maintenance” drugs, will be exempt from the 12-percent value-added tax as recommended by the Food and Drug Administration (FDA), according to the Bureau of Internal Revenue. In a letter to the Bureau of Internal Revenue (BIR)  dated May 22, the FDA identified medications for cancer (19), diabetes (10), high cholesterol (two), hypertension (six), kidney disease (11), mental illness (four), and tuberculosis (one). This batch of 59 updates the list of VAT-exempt products under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion or Train Law, and Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

Government support for successful RE integration sought

The National Grid Corp. of the Philippines (NGCP) has called for government support to ensure the successful integration of more renewable energy into the grid. NGCP, in a statement yesterday, said integrating more renewable energy into the grid would require more from the energy sector, including significant transmission backbone expansion, as well as reinforcement in both policy and support infrastructure. “The entry of more conventional, non-variable generation and energy storage systems to support variable renewable energy installations must be planned simultaneously,” NGCP said. NGCP said the Energy Regulatory Commission (ERC), among all agencies, would be centrally crucial, noting that capital expenditure heavy projects will require regulatory approval from the commission. The company pointed out that access to funding was never a problem for NGCP. Instead, it said external limitations, including regulatory caps on capital expenditures, protracted permitting processes by the local government units, and difficult rights-of-way procurement, are among the primary roadblocks to project completion.

DOTr opens doors to 25-year concession for NAIA privatization

The Department of Transportation (DOTr) may provide the future operator of the Ninoy Aquino International Airport (NAIA) with an option to extend its concession period to 25 years. In an interview with reporters, Transportation Undersecretary Roberto Lim said the government is standing by its decision to lock the concession period for NAIA privatization at 15 years, even as the Manila International Airport Consortium (MIAC) is pushing for a 25-year concession period. In particular, Lim said the extension grants the NAIA operator the opportunity to complete all of the projects covered in the agreement. Similarly, it ensures that the airport will be expanded to a capacity that can serve the future demand of passengers. Lim said the DOTr would try to maintain the concession period at 15 years in support of the plan to host multiple airports around Metro Manila.

Lawmaker seeks creation of new government body to regulate railway industry

A House lawmaker is seeking the creation of a single industry authority within the Philippine bureaucracy that would regulate the railway industry and ensure its efficient management. House Bill 8510 or the proposed Railways Industry Authority Act of 2023, filed by Rep. Bernadette Herrera (Bagong Henerasyon Partylist) on Saturday, proposes the creation of the Railways Industry Authority of the Philippines, which would be an attached agency of the transport department. According to the bill's explanatory note, the proposed Railways Industry Authority would be the centralized body that would regulate the country's numerous railway systems and ensure their compliance with the latest safety standards, among others.

Governments urged to utilize education tech to address skills gap

Countries should increasingly use education technology (EdTech) to better prepare its workers who are facing increasing risk of job loss due to rapid technological advancements, the Asian Development Bank (ADB) said. In its “Reimagine Tech-Inclusive Education: Evidence, Practices, and Road Map” report, the ADB said jobs involving repetitive tasks or those that are easily codified are more likely to be automated, such as jobs in manufacturing, data entry and some service industries. “In Southeast Asia, more than half of the combined workforce of 137 million in Cambodia, Indonesia, the Philippines, Thailand, and Vietnam are at risk of displacement by robots, particularly in the garment manufacturing industry,” it said. In the Philippines, the ADB said around 20.1% of workers face a “high risk” of losing their jobs, while 15.7% have a “medium risk.”

Renewable energy firms shun DOE’s green power auction

Low price caps for the Department of Energy’s (DOE) second round of competitive bidding for renewable energy (RE) capacities may have discouraged power developers from participating in the program this year, resulting in a low turnout. Industry sources told the Inquirer on Monday that bidders in this year’s Green Energy Auction Program (GEA-2) found the price caps set by the Energy Regulatory Commission (ERC) “too low,” with the DOE receiving only 3,580.76 megawatts (MW) of committed capacities that must be available in the next three years. According to the DOE, a total of 1,968.89 MW was committed for the construction of ground-mounted solar projects that must be completed from 2024 to 2026; 9.39 MW of rooftop solar from 2024 to 2025; 90 MW of floating solar for 2026; and 1,512.38 MW of onshore wind from 2025 to 2026.

Non-standard permit processes still hampering telecom infra

The rollout of telecommunications towers continues to be hindered by the failure to harmonize permit processes at various levels of government, even after the issuance of joint memorandum circulars (JMCs) under the Anti-Red Tape Authority (ARTA), ARTA said. “We also recognize the challenges beyond the issuance of our JMCs and despite our intervention,” ARTA Deputy Director General for Operations Gerald G. Divinagracia said at the Second Telco Workshop on Tuesday. “The lack of standard processes, requirements and fees specifically on the conduct of inspections by the electric cooperatives, and the lack of coordination and communication among relevant agencies continue to persist and affect the energization phase of telecommunication towers,” he added. Alfredo S. Panlilio, president and chief executive officer of PLDT, Inc., said that workshops involving the private sector and government agencies will help minimize the risk of other projects disrupting the building of telecom infrastructure.

PH to launch e-visa system by Q3 this year

he country is set to launch its e-visa system soon, making it easier for foreigners to visit the Philippines, the Department of Foreign Affairs (DFA) said on Wednesday. In a press briefing, Foreign Affairs Undersecretary Jesus Domingo said the e-visa system is scheduled for implementation by the third quarter of the year, or by end-September at the latest. “The Philippine e-visa system will allow foreign nationals to apply for appropriate Philippine visas remotely through personal computers, laptops, and mobile devices,” Domingo said. Malacañang earlier said the program, which allows tourists to apply for temporary visas online, is only currently enjoyed by Taiwanese nationals.

DOT rolls out 'hop on, hop off' tours in Manila

Tourists can now roam around Manila through the Department of Tourism's "Hop On, Hop Off" bus tours after the program was launched in the nation's capital on Thursday. The "Hop On, Hop Off" stops in Manila, described as the "cultural hub" of Metro Manila, will be Robinsons Manila, Raja Sulayman, Rizal Park, National Museum, Malacañang Heritage Tours, Manila City Hall, Escolta, Binondo, and Intramuros. "Through the Philippines' 'Hop On, Hop Off' tours, we aim to partner with the city of Manila in your vision to ensure that this continues to be the cultural hub of Metro Manila," Tourism Secretary Christina Frasco said during the launch at the Kartilya ng Katipunan in Ermita, Manila. Frasco said the HOHO program introduces the country's tourism sector to the digital age as visitors can book curated trips at their own convenience and purchase day tours or three-day passes through the mobile app.

End-May PHL debt hits ₧14T

A WEAKER peso and fresh borrowings both from local and foreign markets drove the Philippines’s outstanding debt past the P14-trillion mark, hitting a new record high for the country, Bureau of the Treasury (BTr) data showed. Latest BTr data showed that the country’s outstanding debt as of end-May stood at P14.096 trillion, P185 billion higher than the P13.911-trillion recorded debt stock in end-April. Treasury data showed that 68 percent of the country’s outstanding debt was domestic, which was estimated at P9.588 trillion as of end-May. The amount was 1.4 percent higher than the P9.457-trillion domestic debt recorded in end-April. The higher external debt in Philippine Peso terms was caused by the weakening of the currency against the US dollar.

DOTr prefers 15, not 25 years in Naia O&M concession

THE Department of Transportation (DOTr) “believes” that a 15-year concession—instead of 25 years—is “more appropriate” for the expansion, operations, and maintenance of the Ninoy Aquino International Airport (Naia). In a chance interview, Transportation Undersecretary Roberto Lim told reporters that the agency will move forward with both the solicited and unsolicited proposals for the development of Naia. Last month, the Manila International Airport Consortium (Miac) submitted an updated unsolicited “Naia Masterplan” proposal to the DOTr, offering to spend P267 billion in exchange for a 25-year concession. “We have to consider that our strategy in the department is to have a multi-airport strategy for the GCR [Greater Capital Region], so we envisage over time with the forecasted demand year-on-ear will have Naia as one airport, you have two other airports proposed to develop new airport complexes… to serve the greater capital region,” Lim said. “Naia as we envisage it, maybe has a theoretical limit of 62 million passengers per annum, so if we are already hitting 70, and we need to invest more in Naia because the two other airports are behind schedule, then we should trigger that,” he said.

EV charging station accreditation assigned to bureau of Energy dep’t

The Department of Energy (DoE) said that it placed one of its bureaus in charge of registering electric vehicle charging stations (EVCS) and accrediting suppliers. In an advisory dated June 23, the Energy department said EVCS provider accreditation and equipment registration applications will be taken by the Energy Utilization Management Bureau. The registration rules require that the EVCS be “interconnected with the same electrical branch circuit system, located in the same unit building/floor and bounded by the same building, (otherwise) separate applications will be required,” the DoE said. It said multiple EVCS points will be considered one registration if on the same floor; within the same facility and connected to one electrical branch circuit. However, the DoE said that only DoE-accredited “own-use charging stations” and “commercial-use charging stations” will be allowed to register.

Government needs to address gap in smart city development 

The government needs to provide support in terms of policies and standards to address challenges in building smart cities in the country, according to the Philippine Institute for Development Studies (PIDS) said. In a report, the state think tank’s said developing smart cities is seen to offer a potential solution to urbanization issues being faced by the country, which include slow business transactions, costly telecommunication services, unreliable and expensive access to electricity and water, traffic, and weak innovation.

SC affirms unconstitutionality of 2005 oil exploration deal among PH, China, Vietnam

The Supreme Court (SC) on Wednesday affirmed its decision that declared unconstitutional the 2005 agreement among state-owned oil companies of the Philippines, China, and Vietnam to explore an over 140,000-square-kilometer area of the South China Sea. The SC Public Information Office said the tribunal has issued a resolution denying the respondents' motion for reconsideration with finality due to "lack of merit." On Jan. 10, the SC en banc, voting 12-2-1, voided the Gloria Macapagal Arroyo-led Tripartite Agreement of Joint Marine Seismic Undertaking (JMSU) between China National Offshore Oil Corporation (CNOOC), Vietnam Oil and Gas Corporation (PETROVIETNAM), and Philippine National Oil Company (PNOC). The SC reiterated that the JMSU, which lapsed in 2008, allows “wholly-owned foreign corporations to participate in the exploration of the country's natural resources.”

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