ECCP at Work

ECCP@Work Featured Articles | July 11, 2023

July 11, 2023

ECCP Online

ECCP at Work

Price is key in green energy auction policies

The European Chamber of Commerce of the Philippines has urged the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) to consider changes in future Green Energy Auction (GEA) policies to help achieve the country’s renewable energy goals.

DTI garners P73.75-B investment leads from Europe trip—Pascual

The Europe Investment Roadshow led by the Department of Trade and Industry (DTI) has resulted in P73.75 billion worth of investment leads, with renewable energy and IT-BPM sectors receiving the larger share in the investment pie. Following the three-week trip of the Philippine delegation to Europe, particularly in France, United Kingdom, Belgium, The Netherlands, and Germany, to lure more investments into the country, DTI Secretary Pascual reported that the team has clinched P73.75 billion worth of investment leads.

PHL trade facilitation score improved — UN

The Philippines improved its score in an international index of trade facilitation, UNESCAP said. The UN Global Survey on Digital and Sustainable Trade Facilitation graded the Philippines’ implementation rate at 87.1% this year, against 86.02% in 2021. In Southeast Asia, the Philippines had the second highest trade facilitation rate, alongside Indonesia and Malaysia (also 87.1%), and behind Singapore (96.77%). The Philippines scored 100% in terms of transparency and formalities, which means the country fully implements the trade measures under this metric.

FDI net inflows decline 14% in April

Net inflows of foreign direct investments (FDI) dropped by 14.1% in April as investors remained concerned over an economic slowdown and elevated inflation, the Bangko Sentral ng Pilipinas (BSP) said.   BSP data showed FDI net inflows declined to $876 million in April from $1.02 billion in the same month in 2022. “The decline in FDI may be attributed to concerns over slowing economic growth and relatively high inflation levels globally,” the BSP said.   

Peza approvals nearly tripled to P80.58B in H1

The Philippine Economic Zone Authority (Peza) approved P80.58 billion worth of investments from January to June, nearly three times more than what it recorded in the same period in 2022, marking a strong finish for the government investment promotion agency during the first half of the year. Data released by Peza showed that its approved investments during the six-month period grew by 258 percent compared to the P22.489 billion recorded in the same period last year.

FDI inflows down 18% in 4 months

The inflow of foreign direct investments declined by 18 percent to $2.92 billion in the first four months from $3.56 billion in the same period last year due to concerns over slowing economic growth and relatively high inflation globally.

Philippines aims for “A” investment grade rating for sovereign debt by 2028

The Philippines is aiming for a solid A investment grade rating for its debt score before the end of President Marcos Jr.'s term, his finance secretary said. The goal comes as the country embarks on a fiscal consolidation path that will see its debt trimmed to just 51% of the economy from over 60% now – one of the key debt metrics used to gauge a country’s creditworthiness. The government has been in talks with the three major global ratings agencies – Standard & Poor’s, Fitch Ratings, and Moody’s. “We plan to reduce that [debt-to-GDP ratio] to 51% and that’s a combination of lower borrowing and also higher GDP,” Finance Secretary Diokno said.

DOE supports EPIRA amendments for stronger ERC 

The DOE is pushing for amendments to Republic Act 9136 or the Electric Power Industry Reform Act of 2001 that will give the ERC more teeth against those who do not comply with the regulations. “We are focusing on different aspects of the amendments. For example, there are reforms that are needed in ERC side,” Energy Secretary Raphael Lotilla said. Lotilla said the DOE supports other specific amendments to EPIRA, such as better performance from distribution utilities and the transmission concessionaire, the NGCP.

PH, World Bank sign $600-M loan for agri, fisheries

The Philippines has signed a $600 million loan deal with the World Bank to boost the agriculture and fisheries sector in the country, the Department of Finance said Monday. The loan agreement is for the Philippine Rural Development Project (PRDP) Scale-Up, which aims to boost farmer and fisherfolk access to markets, increase income from selected agri-fishery value chains, and improve efficiency in the food supply chain. It will cover 82 provinces in the Philippines. Out of the $818 million allotted for the project, $218 million will be funded by the national government and the local government units. Once completed, the Department of Agriculture will make it a locally-funded program to ensure its sustainability. 

Maharlika restricted to projects that return 10%

Projecrts funded by the Maharlika Investment Fund (MIF) will be screened out if they do not deliver a return of at least 10%, the level prescribed by the government’s economic planners, Finance Secretary Benjamin E. Diokno said.

DoST-TAPI opens upgraded investment readiness program for startups, spin-offs

The Department of Science and Technology-Technology Application and Promotion Institute (DoST-TAPI) has upgraded its premier mentoring and capacity-building program called Honing Innovations, Research, Agreements, and Negotiations of the Government-funded Technologies 2.0, or HIRANG 2.0. The program intends to help startups and DoST-Research and Development Institute (DoST-RDI) spin-offs build their capability in running their business, building their portfolio, and eventually closing investment deals and business partnerships.

PH forex reserves sank back below $100B in June

The Philippines’ gross international reserves (GIR) may have again fallen below the $100-billion mark after three straight months above this threshold to end June at $99.8 billion, mainly due to reduced investments abroad. Preliminary data at the Bangko Sentral ng Pilipinas (BSP) show that the GIR has been decreasing for two months in a row since registering at $101.8 billion in April. The Philippines’ gross international reserves (GIR) may have again fallen below the $100-billion mark after three straight months above this threshold to end June at $99.8 billion, mainly due to reduced investments abroad. Preliminary data at the Bangko Sentral ng Pilipinas (BSP) show that the GIR has been decreasing for two months in a row since registering at $101.8 billion in April.

Slower growth for Philippines food, beverage retail sector

Growth of the Philippine food and beverage retail sector is expected to slow down this year as revenge spending fades and consumers spend prudently, according  to the United States Department of Agriculture (USDA). In a report, the USDA-Foreign Agricultural Service (FAS) Manila said the Philippines’ food and beverage sector may grow by six percent to $35 million this year. “After unexpected eight percent robust growth in 2022, the USDA-FAS estimates a six percent growth in food and beverage retail sales for 2023 as revenge spending ends,” the report said. Overall, the sector’s expansion will still be driven by strong domestic demand, in line with forecasts of six percent growth in gross domestic product (GDP) this year. The report also said that household income in the Philippines is also expected to improve on the back of a decline in jobless rates.

Tourism industry lobbies for more gov’t infra support to improve destinations’ accessibility 

Singling out President Ferdinand R. Marcos, Jr., as the chief executive most supportive of tourism, the travel industry said it is hoping the support will continue in the form of infrastructure projects that help raise access to destinations. Roberto Z. Zozobrado, Tourism Congress of the Philippines president, said that he expects continued programs addressing the industry’s concerns when Mr. Marcos delivers his second State of the Nation Address on July 24. “No other President in the past has given so much emphasis to the tourism industry as Mr. Marcos has. We hope that continues.” Mr. Zozobrado said on top of the industry’s wish list is infrastructure support to improve connectivity to the destinations.

German firm eyes BOI registration of P55 billion worth of projects

German energy firm wpd AG plans to register P55 billion worth of energy projects with the Board of Investments (BOI), according to the Department of Trade and Industry (DTI). The projects consist of onshore wind and solar photovoltaic (PV) power projects in Aklan, Ilocos Norte, Ilocos Sur, Abra, Antique, and Bulacan. The projects have a total planned capacity of 565.6 megawatts and a planned total investment value of at least P55 billion.

PH EV battery consortium formed

An electric vehicle (EV) battery consortium, which seeks to utilize indigenous minerals for EV battery component to lower the cost of EVs, will be launched at the 11th Philippine Electric Vehicle Summit (PEVS) in October this year. Edmund Araga, president of the Electric Vehicle Association of the Philippines (EVAP), announced that the launch of the Philippine Battery Consortium will be one of the highlights of the PEVS. “We are engaging in collaboration activities with industry players with assistance from our ASEAN neighbors in coming up with an alternative battery component production utilizing indigenous minerals, considering the significant cost contribution of batteries in the overall acquisition cost of EVs,” said Araga.

Group to review electric vehicle law

The Electric Vehicle Association of the Philippines (EVAP) and other stakeholders of the fledgling industry are poised to review the EV law a year after its enactment and are set to launch the Philippine Battery Consortium to address concerns on battery supplies and costs. Edmund Araga, EVAP president, said that strengthening and localizing EV and battery supply chains for wider EV adoption will be the focus of the EVAP at the Philippine Electric Vehicle Summit (PEVS) 2023 in October. The 11th PEVS will come a year after Republic Act No. 11697 or the Electric Vehicle Industry Development Act  was enacted. Following its enactment, the national government also approved Executive Order 12 temporarily removing import duties on completely built-up units of EVs for five years.

Water, energy take a hit from Angat Dam depletion

El Niño will negatively impact energy and water supply this year. The Metropolitan Waterworks and Sewerage System (MWSS) said around 591,000 households served by Maynilad may experience up to 9 hours of water supply interruptions starting Wednesday as the level of water in Angat Dam fell below the 180-meter minimum operating level. Patrick James Dizon, MWSS division manager for Angat-Ipo operation management, said that the expected interruption may be moved to Friday if rainfall fills the dam. Dizon said Maynilad is set to issue notices of interruption and other details today (July 10) but disruption is expected from 7 p.m. to 4 a.m. the following day. Dizon also said historical records showed during El Niño years, Angat reservoir was replenished by rainfall from mid-July to October.

Gov't eyes retail dollar bond offer in September

The government will likely proceed with its retail dollar bond sale this quarter, the Bureau of Treasury said. The government was originally planning to issue the retail dollar bond offer last year. "We are doing all the marketing now. If markets are favorable, [issuance is] September. Late August or early September," National Treasurer Rosalia de Leon said during the weekly press briefing of Finance Secretary Benjamin Diokno.De Leon said the government is aiming to raise USD2 billion from the said offering. The government was able to raise as much as USD1.59 billion through its onshore retail dollar bond offer in 2021.

SEC poised to tighten rules covering crypto, digital assets

The Securities and Exchange Commission (SEC) is finalizing the implementation of short-selling within the year while preparing a stricter set of proposed rules covering cryptocurrencies and other digital assets. SEC Commissioner Kelvin Lester Lee said the corporate watchdog is keen on pushing out new regulations to further boost the capital markets amid strong interest from local and foreign participants while ensuring its mandate to protect investors.

Rice imports fall 6.43% in six months to June as harvest improves

The Philippines imported 1.81 million metric tons (MT) of rice in the six months to June, down 6.43% from a year earlier, according to the Bureau of Plant Industry, amid the improving supply of domestically-grown rice. In June, rice imports dropped 56.13% to 187,530.760 MT. They also fell month on month against the 319,482.360 MT shipped in May. During the first half, Vietnam remained the top source of imported rice, accounting for 1.61 million MT or 89.09% of the total. It was followed by Myanmar and Thailand with 81,895 MT and 73,667 MT, respectively. Agriculture Undersecretary for Rice Industry Development Leocadio S. Sebastian said that the private sector is guided by market forces because most imports have been liberalized.

PPPs proposed for education due to K-to-12 shortcomings 

The Management Association of the Philippines (MAP) proposed public-private partnerships (PPPs) to address the “education crisis,” citing the unfulfilled potential of the K-to-12 program. MAP President Benedicta Du-Baladad said in a statement on Monday that PPPs should be configured to ensure that students have adequate skills when they enter the workforce. “As the biggest ‘consumers’ of these graduates, (employers) are all too willing to do our share in preparing them to be productive and competitive, or do business with them in the future…That means transforming the Philippine education system so that it can adapt to a changed workplace in a technology-driven world,” she added.

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