ECCP at Work

ECCP@Work Featured Articles | September 22, 2023

September 22, 2023

ECCP Online

ECCP at Work

More European tourists seen with EU-PHL free trade pact

This was the assurance made by Romania’s Ambassador to the Philippines Raduta Dana Matache at an ECCP luncheon where tourism prospects in the Philippines were discussed. “We hope in a few months there will be a free trade agreement between the Philippines and the European Union. This will be an engine for business coming here. Business also attracts tourists. So I believe that there will be a lot more European tourists in the Philippines,” she said. DOT Undersecretary for Finance Shereen Yu-Pamintuan said the agency recognizes the importance of Europe as a major  source market for tourists. 

ADB cuts PH growth forecast for 2023

The Asian Development Bank revised downward its gross domestic product growth forecast for the Philippines to 5.7 percent in 2023 from the 6 percent forecast last April, and maintained a 6.2-percent outlook for 2024. “The Philippines’ growth story remains strong despite an expected moderation in 2023,” said ADB Philippines Country Director Pavit Ramachandran,” said Pavit Ramachandran, ADB’s country director in the Philippines. “Public investment and private spending fueled by low unemployment rate, sustained increase in remittances from Filipinos overseas, and buoyant services including tourism will support growth,” Ramachandran.

LEDAC adds 10 more priority measures

The Palace said the bill amending the Government Procurement Reform Act and the proposed rationalization of the mining fiscal regime were among the 10 bills added to the common legislative agenda. The new priority bills also include a measure imposing excise tax on single-use plastics and the proposed amendments to the Cooperative Code and Fisheries Code, the Palace said. The proposed New Government Auditing Code, Open Access in Data Transmission Act, Defense Industry Development Act, and Philippine Maritime Zones Act were also included in the priority agenda. Proposed amendments to the Right-of-Way Act were also among the LEDAC’s new 10 priority bills.

Gov’t to lose up to P73B  from fuel tax suspension

Mr. Diokno said revenue losses are expected to reach up to P72.6 billion, or around 0.3% of gross domestic product (GDP), in the October to December period. The government may lose P41.4 billion from excise tax revenues, and P31.2 billion from VAT revenues. If the collection of fuel taxes are suspended for an entire year, Mr. Diokno said revenue losses would reach a “whopping” P280.5 billion or 1.1% of GDP for 2024. He noted this would lead to a higher deficit-to-GDP ratio of 6.2% in 2024, from the projected 5.1%; and debt-to-GDP ratio of 61.3%, from a projected 60.2%.

DOF welcomes Senate approval of PPP Act on 2nd reading

The PPP Act is a priority measure of President Ferdinand R. Marcos, Jr.’s administration. It supports the 8-Point Socioeconomic Agenda, which prioritizes job creation through the promotion of trade and investments and improving infrastructure. To facilitate a more effective and streamlined PPP approval process, the PPP Act will increase the approval threshold for projects that need the National Economic and Development Authority (NEDA) Board’s approval to PHP 15 billion.

NEDA Board prepares EO to expedite flagship projects

The National Economic and Development Authority (NEDA) Board has given the go signal for an executive order (EO) that will expedite the processing of requirements for flagship infrastructure projects, Secretary Arsenio M. Balisacan said. Mr. Balisacan said the order would “enable the expeditious processing of licenses, clearances, permits, certifications and authorizations for the IFP (infrastructure flagship projects).” “The primary goal of this proposed EO is to minimize if not eliminate delays in the implementation of IFPs,” he said.

Manila expects removal from FATF list next year 

 The Philippines intends to be removed from the “grey list” of nations considered noncompliant with global antimoney laundering standards by next year. According to Davao de Oro Rep. Ruwel Peter Gonzaga, who sponsored the Department of Justice’s (DOJ) 2024 budget in the House plenary budget debates, the country has until November to comply with the requirements of international group Financial Action Task Force (FATF). 

DOT eyes 'baywatch' facilities, upbeat on arrivals target 

Tourism Undersecretary Shereen Yu-Pamintuan said as of September 19, 2023, they have recorded around 3.8 million arrivals for the year. She also unveiled several plans of DOT like the setting up of emergency baywatch facilities in top beach destinations. Pamintuan noted that even Boracay, one of the world’s best beaches, has no emergency facilities such as emergency doctors and other medical services. The DOT will also soon launch a 24/7 tourism hotline for all tourist-related concerns. Some call center agents will be able to speak a foreign language like Chinese or Korean to address the concerns of tourists.

TOURIST ARRIVALS HIT 3.8M: Int’l travel to recover in 2026

This developed as the Department of Tourism (DOT) said it has attained 80 percent of  its full-year target of 4.8 million in  tourist arrivals as of September 19. Samuel David, country manager of the  International Air Travel Association (IATA), in a forum organized by ECCP said air travel is facing headwinds posed by global economic developments including the shortage of aircraft  parts and of labor as well as rising fuel prices. “The robust recovery benefitted the country’s GDP at 6.2 percent. Economic managers recognize tourism as the second top economic driver in the first half of the year,” Frasco said.

DOT bids out P700-M projects under ‘Love the PHL’ campaign

The Department of Tourism (DOT) has bidded out some P700 million in projects for the marketing and promotion of the Philippines, under its new tourism slogan, “Love the Philippines” (LTP). Tourism Undersecretary for Finance and Administration Shereen Gail Yu-Pamintuan said, “I’d like to confirm that we’re keeping the ‘Love the Philippines’ slogan—we have launched it already….We have posted several branding and marketing initiatives up for procurement — so I think it’s around P700 million worth of local and international PR (public relations) as well as other marketing initiatives.”

‘Better tax design key to funding development goals of countries like PHL’

It is estimated that emerging and low-income countries need $3 trillion annually through 2030 to finance their goals and a transition to a green economy. For emerging market economies, the IMF said they can raise their tax-to-GDP ratio by 5 percentage points on average, while improving their institutions to the average of advanced economies could raise an additional 2 to 3 percentage points. In order to create better tax policies, the IMF recommended that countries improve the design and administration of core domestic taxes such as value-added taxes, excises, personal income tax, and corporate income tax.

DENR to streamline mining applications, permits

DENR Undersecretary Carlos Primo David said the agency is investing in the digitization of all mining-related information and the processing of applications and permits. The DENR and PwC Philippines forged a memorandum of understanding (MOU) last June to identify the gaps in the bureau’s processes and functions.

NEDA sees nickel resources as key to green transition

The Philippines needs to better exploit its nickel resources to advance its transition to green industries, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.  Nickel ore and nickel byproducts generated P57.32 billion, accounting for almost half or 46.57% of the industry’s total. Mr. Balisacan said going green and digital will be an “integral strategy” for the economy. “The challenge now lies in simultaneously harnessing the green transition and digitalization for sustainable development. This process, called ‘twin transition’ or ‘dual transformation,’ entails the integration of digital technologies and the adoption of green processes for sustainability,” Mr. Balisacan said. “The sector is also an important source of jobs for Filipinos, constituting around 12-13% of the country’s workforce,” he said.

Rice import tariff cuts should not depress farmgate prices — NEDA

The proposed tariff cut on rice imports should not impact farmgate prices for palay (unmilled rice), National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said. “Any proposal to reduce tariffs, we have to calibrate that particular issue, balancing the interests. Most importantly, protecting farmers (from) reduction in their farmgate prices,” he added. Asked if NEDA had proposed a specific percentage for the tariff cut, Mr. Balisacan said it is “too early to disclose anything.” However, he noted that the tariff cut would not even be considered if oil prices were not elevated.

PHL urged to expand presence in global bond market

“Given the country’s credit rating and its commitment to pursue its infrastructure program. Definitely, the government can still expand its borrowings,” Jonathan L. Ravelas, senior adviser at professional services firm Reyes Tacandong & Co., said. “The Philippine government’s plan to debut in the Islamic bond market with a Sukuk issuance is a strategic move that could diversify its investor base and potentially offer more favorable terms. Coupled with its $5-billion program for commercial bonds, the government is evidently keen on robust external financing,” Security Bank Corp. Chief Economist Robert Dan J. Roces said. “Markets like Euro bonds and Samurai bonds offer low-interest rates, while green bonds could attract investors focused on sustainability,” he said.

Lawmaker calls for relaxation of biofuel requirement to ease oil prices   

The government should provide P5.19 billion in fuel subsidies to the transport, farm and fisheries sectors in the next three months to avert runaway inflation that could hit 6.2% this year amid spiraling global crude prices, the chairman of the House of Representatives Ways and Means Committee said. Mr. Salceda estimated that P907 million would be needed to provide fuel discounts for 180,000 jeepneys or P5,040 per driver until the end of the year. He also proposed giving a subsidy of P2,800 per hectare for farmers, which would require a P3.36-billion budget; and a subsidy of P420 for a fisherman, which would need a P924-million budget. At the same time, Mr. Salceda suggested that the National Biofuels Board lower domestic bioethanol additive requirement to 5% from the current 10% under the Biofuels Law.

Palace allots P38.75B for digitalization plans

The amount is 60.6 percent higher than this year’s P24.93 billion funding, according to Budget Secretary Amenah Pangandaman. The ICT and digitalization budget will be divided among 10 government agencies: Department of Education, P9.43 billion; Department of Justice, P5.55 billion; Department of Information and Communications Technology (DICT), P5.34 billion; Department of Finance, P3.15 billion; Department of Interior and Local Government, P2.6 billion; National Economic and Development Authority, P2.08 billion; the Judiciary, P1.44 billion; Department of National Defense, P1.12 billion; Department of Environment and Natural Resources, P913 million; and other executive offices, P890 million.

Marcos certifies bill with harsher penalties for agri smugglers as urgent

Senate Bill 2432, or the “Anti-Agricultural Economic Sabotage Act,” would repeal Republic Act No. 10845, or the Anti-Agricultural Smuggling Act of 2016. “The need to facilitate the passage of this important piece of legislation is imperative, especially now that the country is beset by rising prices and shortages in agricultural products, partly due to the nefarious acts of smuggling, hoarding, profiteeríng, and cartel,” said the President in a letter to Senate President Juan Miguel Zubiri. The bill also aimed to promote farmers’ productivity and protect them from unscrupulous traders and importers.

BSP keeps rates, but signals a hike in November

This was according to BSP Governor Eli M. Remolona Jr., who announced on Thursday that the Monetary Board decided to maintain its key policy rates for the fourth consecutive month this year. BSP’s Target Reverse Repurchase (RRP) Rate was maintained at 6.25 percent. Accordingly, the interest rates on the overnight deposit and lending facilities were retained at 5.75 percent and 6.75 percent, respectively. “I expect rates to be at the level at the end of this year. If we raise later in the year, we have a meeting in November, so if we raise in November, I expect rates to stay at that level for the early part of next year,” he also said. When asked whether the BSP is considering to hike rates in November, Remolona said “Well, honestly, yes.”

PHL a ‘key target’ for business in SEA–survey

The Philippines is a “key target” for international businesses seeking to enter new Southeast Asian markets, according to the HSBC Global Connections survey. The research commissioned by HSBC Commercial Banking showed that international businesses from nine major economies are “increasingly optimistic” about their growth prospects in Southeast Asia. These 9 markets are China, India, UK, France, Germany, USA, Australia, Hong Kong, and [Gulf Cooperation Council] GCC countries (United Arab Emirates, KSA, Bahrain, Qatar, Oman, or Kuwait). According to the report with the title, “Global Connections: Connecting the Philippines and the world” which HSBC released, the Philippines’s “young, English-speaking workforce and a growing consumer sector” makes it  appealing to international businesses on both the supply and demand side. 

Neda: Other businesses can fill lost revenue from POGO exit

Neda Secretary Arsenio M. Balisacan disclosed he is confident the Marcos administration can secure new investments to replace the lost revenues from the proposed phaseout of POGOs. He noted the Marcos administration is trying to attract investments, which will not only boost the economy, but also contribute to social development. Neda made the pronouncement amid the ongoing call in the Senate for the gradual phaseout of POGO as more crimes are linked to the sector. “Our position at NEDA which we have submitted some time ago…[is] the social costs [of POGOs] are quite high, and we don’t think that the benefits in terms of the revenues generated and the additional…and the impact on the economy are worth the cost,” Balisacan said.

DTI: P7.9-B budget not enough for mandates

With P7.91 billion earmarked for the Department of Trade and Industry (DTI) under the 2024 National Expenditure Program (NEP), Trade and Industry Secretary Alfredo E. Pascual said the agency will request for an increase in its budget to be able to carry out its priority programs and implement laws such as the Vape law, E-commerce Act, among others. Pascual listed the laws and programs which will be implemented by DTI that would require additional funding. These are: the Internet Transactions Act which he said will be passed soon; the Export Development Plan; the three-year action agenda for Food Logistics; the development of micro,small and medium enterprises (MSMEs) under the Philippine Development Plan (PDP). The other laws and programs included in DTI’s wishlist to consider the augmentation of its budget are the implementation of the Safeguard Measures Act, the implementation of the E-commerce Act 2000.

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