ECCP at Work

ECCP@Work Featured Articles | October 6, 2023

October 06, 2023

ECCP Online

ECCP at Work

Domestic aviation rebounds this year

This was according to the International Air Transport Association in a recent forum organized by the European Chamber of Commerce of the Philippines. Kurt Edwards, director general of the International Business Aviation Council, also raised the fact that much could be gained “by opening the industry and making it more known to people.” In terms of managing safety risks, Captain Manuel Antonio Tamayo, director general of the Civil Aviation Authority of the Philippines, shared initiatives to advance safety capabilities in the aviation sector through the State Safety Program. Meanwhile, Transportation Secretary Jaime Bautista stressed that the DOTr’s goal to rehabilitate the Ninoy Aquino International Airport through a public-private partnership agreement, which he said, will present a “landmark opportunity for economic growth, improved infrastructure, and a world-class travel experience.” 

AMRO sees PHL as fastest-growing economy in the region

“For the Philippines, the second-quarter (growth) turned out to be weaker than we expected, but we are still quite bullish on the Philippines compared to the consensus,” AMRO Chief Economist Hoe Ee Khor said. AMRO expects the Philippines’ gross domestic product (GDP) to grow by 5.9% this year, the fastest among ASEAN+3 economies. This is lower than the 6.2% forecast given in July. For 2024, AMRO expects Philippine GDP to expand by 6.5%, which is still the fastest growth in the region. It is also the lower end of the government’s 6.5-8% target. Mr. Khor said economic growth next year will be robust, reflecting “an improvement in external demand.”

DENR, DTI to identify firms obliged to register with EPR [mention]

The Department of Environment and Natural Resources (DENR-7) will work closely with the Department of Trade and Industry (DTI-7) to identify companies that are considered obliged enterprises (OEs) to implement the Extended Producer Responsibility (EPR) Law. Nationwide, DENR and the DTI have identified approximately 4,000 companies falling under the jurisdiction of the EPR Law. The EPR education and registration drive organized by the DENR and Nestlé Philippines is supported by UNDP, GIZ, the European Chamber of Commerce of the Philippines (ECCP), and Eco-Business.

PH inflation rose to 6.1% in Sept as food prices, transport cost soared

Inflation, as measured by the consumer price index, sizzled to 6.1 percent in September, hotter than the 5.3 percent recorded in August, the Philippine Statistics Authority reported Thursday. The PSA attributed the increase to higher year-on-year rise in food and non-alcoholic beverages prices at 9.7 percent, up from 8.1 percent in August. Transport, with inflation rate of 1.2 percent during the month, also contributed to the uptrend, it added. The latest figure matched the upper-end of the BSP’s forecast range for the month. This is also the 18th straight month that inflation breached the central bank’s 2-4 percent target range.

‘Tax reforms boost economy despite global headwinds’

Speaker Ferdinand Martin G. Romualdez expressed his optimism on the resilience of the Philippine economy despite the anticipated global economic slowdown as he underscored the progress made in implementing financial and tax reforms, which enhanced the nation’s attractiveness to foreign investors. The Speaker also acknowledged the World Bank’s revised GDP growth projection of 5.6 percent, despite inflation and global headwinds. Romualdez also stressed the significance of legislative milestones, including the amended Public Service Act, which facilitates full foreign ownership in critical public services like telecommunications and airlines, as an indicator of the Philippines’ commitment to creating a favorable investment environment.

IMF sees MIF as tool to fill PHL infra gaps, DBM says

The Department of Budget and Management (DBM) said the International Monetary Fund (IMF) is supporting the Maharlika Investment Fund (MIF), noting that it would help in “closing” the Philippines’s infrastructure gaps and boost its “green” investments. The DBM added that the IMF noted that the reforms in the country’s mining fiscal regime and the Mining Act would provide opportunity “to enact a progressive and unified tax system, and a competitive investment regime.” Furthermore, the IMF, according to the DBM, praised the Philippines, particularly the Bangko Sentral ng Pilipinas, in handling the country’s inflation “crisis.”

Aviation sector sees more growth, investments 

Growth, safety and development were the key focus of aviation industry stakeholders, experts, and leaders during this year’s National Aviation Summit to meet growing travel demands and bolster the sector’s full recovery from the effects of the Covid-19 pandemic. According to Yuli Thompson, Area Manager for Southeast Asia International Air Transport Association (IATA), a significant rise in international and domestic travel has been seen since the pandemic began in 2020. To cater to these growing demands, Cebu Pacific Air Chief Executive Officer Michael Szucs said there is a need to invest in infrastructure, which entails Philippine airlines carriers to “quadruple” their sizes to accommodate more passengers. Senator Grace Poe echoed similar sentiments on infrastructure investment to prevent air traffic system glitches that occurred at the NAIA in January this year. She recommended the acquisition of a new Communication, Navigation, and Surveillance or Air Traffic Management (CNS/ATM), and hiring third-party maintenance providers for the system.

DESPITE GLOBAL HEADWINDS: Cebu Pacific confident on continued post-pandemic growth 

CEB co-presented the inaugural Philippine Aviation Summit this September 27-28, where airline officials shared insights on issues concerning the aviation industry as it recovers from the impact of the COVID-19 pandemic. The two-day summit, which carried the “Philippine Aviation: Ready for Takeoff,” aims to identify actionable solutions for the country’s aviation industry. CEB’s positive outlook regarding the post-pandemic growth of the local aviation industry reflects the airline’s confidence in the long-term recovery of the sector. The COVID-19 pandemic had a significant impact on the global aviation industry, including in the Philippines, with travel restrictions, reduced demand, and operational challenges affecting airlines worldwide. 

Marcos removes cap on rice prices

“As of today, we are lifting the price caps on the rice, for the regular milled rice and for the well-milled rice. So, we are removing the controls,” Mr. Marcos told reporters on the sidelines of a rice distribution event in Taguig City on Wednesday. However, Mr. Marcos admitted the government still needs to address the staple grain’s high prices in Metro Manila. Mr. Marcos said he had instructed House Speaker Ferdinand Martin G. Romualdez to create a program for the capital region, where rice prices are “most volatile.” Thirty-three congressmen from Metro Manila would be tasked to distribute rice to poor people, he added.

AMRO cuts PH 2023 growth forecast

The Asean+3 Macroeconomic Research Office (AMRO) cut its growth forecast for the Philippines in 2023 to 5.9 percent from the 6.2 percent that it forecast last July, along with a similar downshift for the entire region. Asean (Association of Southeast Asian Nations) includes the Philippines, Indonesia, Malaysia, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar and Vietnam. Meanwhile, “+3” refers to China, South Korea and Japan.

‘Volatile-price’ areas to get rice aid—PBBM

After finally lifting the month-long rice price cap on Wednesday, President Ferdinand R. Marcos Jr. said the government will provide aid for vulnerable groups in areas where the price for the food staple remains “volatile.” Among the interventions will be the Food Stamp Program of the Department of Social Welfare and Development (DSWD), which is currently under pilot implementation.   To help boost rice production, Marcos said they will continue to tap the P22-billion Rice Competitiveness Enhancement Fund (RCEF) to provide farmers with tractors, dryers, harvesters among others. He said they are also considering a portion of the fund for providing cold storage fishermen.

IMF cuts Philippine growth outlook

The multilateral lender lowered its Philippine gross domestic product (GDP) growth projection to 5.3% from its 6.2% estimate in July. “The Philippine economy has emerged strongly from the pandemic but has since confronted a confluence of global shocks,” IMF Mission Chief to the Philippines Shanaka Jayanath Peiris said at a press briefing on Tuesday after ending the Article IV consultation mission. “The main downside risks to the outlook include persistently high global and domestic inflation that could necessitate a further tightening of monetary policy, an abrupt global slowdown putting downward pressure on goods and service exports, an intensification in geopolitical tensions, and depreciation pressures stemming from capital outflows under volatile market conditions,” Mr. Peiris said.

PHL seeks $500-M WB loan for safer school infrastructure

The proposed Infrastructure for Safer and Resilient Schools project will address the physical rehabilitation needs and boost the resilience of disaster-affected schools in the Philippines, according to a loan document uploaded on the World Bank website. The project is expected to cover over 3,000 schools mainly in Caraga, Cordillera Administrative Region, and Regions III, V, VI, VII, VIII, and XI. It will be implemented by the Department of Education (DepEd) and Department of Public Works and Highways (DPWH). “The proposed project will support the integration of vulnerability reduction criteria into rehabilitation designs so that rehabilitated school buildings will have an enhanced performance in the face of future hazard events. To do so, the proposed project will support a damage and vulnerability assessment of affected school facilities,” it added.

Despite better supply, price dips, EO 39 stays

The chief executive made the decision even after the Department of Agriculture (DA) and the Department of Trade and Industry (DTI) had reported to him “favorable conditions” which will justify lifting of the price cap. Officials from both agencies reported that local rice production this month is expected to reach 1.9 million metric tons (MMT), which will bring the country’s total rice supply to 4.22 MMT. “That will jump our days to the last of our supply of rice to 74 days…because we are expecting a bumper harvest in October and November. The public can expect a stable supply of our main staple,” DA-Bureau of Plant Industry Director Gerald Glenn F. Panganiban said during a press briefing on Tuesday.

NDC and Quest Ventures accord to boost PHL start-up ecosystem

In a statement released on Tuesday, NDC said it signed a memorandum of understanding (MOU) with Quest Ventures as both parties agreed to be “knowledge partners” to strengthen the start-up ecosystem in the country. NDC General Manager Anton Mauricio underscored the importance of the agreement with Quest Ventures, noting that the venture capital firm’s “significant footprint” across Singapore and Asia brings “valuable cross-border insights, best practices and extensive network that aligns with our key objectives in enhancing the local venture capital ecosystem and promoting sustainable investments.” For her part, April Ong Vaño, Head of Environment, Social & Governance at Quest Ventures said the venture capital firm is looking forward to “bringing our crowd favorites such as venture capital courses and accelerators to important hubs in the Philippines.” 

Amid headwinds, IMF raises PHL growth forecast

Higher public sector spending and better external trade would improve the country’s economic growth next year, according to the International Monetary Fund (IMF). In a statement distributed during the briefing on the 2023 Article IV Mission to the Philippines on Tuesday, the IMF raised its growth forecast for the country to 6 percent from 5.5 percent estimated in July 2023. The IMF move is in contrast to the lower projection made by the World Bank on Tuesday. In its latest East Asia and the Pacific (EAP) Economic Update for October, the Bank said the Philippine economy is expected to grow by 5.8 percent next year, down from the initial estimate of 5.9 percent in April. 

High inflation clouds Philippine growth outlook in 2023, IMF says

The Fund said it cut its growth forecast for the Philippines to 5.3 percent from a July estimate of 6.2 percent, following a slowdown in second quarter growth, while inflation is expected to stay elevated, hurting consumer demand. “Thus, a higher-for-longer policy rate path is warranted until inflation firmly falls within the target range, alongside a tightening bias to anchor inflation expectations,” the Fund said in a statement. For 2024, the Philippine economy is projected to expand 6 percent, faster than its previous estimate of 5.5 percent, the Fund added. The IMF’s revised projections were lower than the government’s targets of 6 percent to 7 percent this year and 6.5 percent to 8 percent next year.

PH, Lithuania seek partnership on laser tech, cybersecurity, education

In a statement, Presidential Communications Office (PCO) Secretary Cheloy Garafil said the commitment was made during the presentation of credentials of Lithuanian Non-Resident Ambassador to the Philippines Ricardas Slepavicius to President Ferdinand R. Marcos Jr. in a ceremony at Malacañan Palace in Manila on October 3. “We cannot neglect distance… But I believe we have some technological solutions which could be interesting for [the] Philippines. For example, for cyber securities, on the economy, green energy, on biotech, we could share our experiences and help companies or Philippines [do] business there,” Slepavicius said, as quoted by the PCO. Slepavicius also noted that Lithuania is a pioneer in laser development and production, capturing 10 percent of the global market for scientific lasers. Marcos also expressed interest in the production of scientific lasers and lasers in general.

Philippines vehicle production up by 35%

The Philippines continued to lead with the fastest growth rate in motor vehicle production in the ASEAN region as it posted a 34.9 percent jump in the first eight months of the year. Based on data from the Association of Southeast Asian Nations (ASEAN) Automotive Federation (AAF), 74,107 motor vehicles were assembled in the Philippines from January to August, significantly higher than the 54,918 units recor?ded in the same period last year. In August alone, the country posted a 21 percent increase in motor vehicle production, rising to 8,173 units from 6,752 in August last year.

PH is World Bank's fifth biggest borrower in 2023

In its 2023 annual report, the Bank said the Philippines has $2.336 billion in approved loans from the International Bank for Reconstruction and Development (IBRD), which is part of the World Bank Group. In its report, the World Bank it is also working on infrastructure projects like the Metro Manila Flood Management Project. "In the Philippines, our engagement in Mindanao brought together groups

engaged in conflict to collectively allocate resources and solve problems," the World Bank added. The Philippines has been borrowing heavily from local and foreign lenders since the start of the COVID-19 pandemic. The borrowing trend has continued, which has seen the Philippines’ sovereign debt further increase in August to a new record of P14.35 trillion. Philippine economic managers however have said that the rising debt was manageable.

ADB approves $300-M PHL loan to boost financial inclusion

“Through this loan, ADB is expanding its partnership with the Philippines in ensuring all Filipinos will have access to financial products and services, including via digital platforms, to help improve their lives and livelihoods,” ADB Senior Financial Sector Specialist Kelly Hattel was quoted as saying in the statement. Based on the 2021 Global Findex Database, the number of Filipino adults with accounts with financial institutions or mobile money providers stood at 51% of the population in 2021 from 34% in 2017. The Philippine government wants to raise the number 

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