ECCP at Work

ECCP@Work Featured Articles | October 13, 2023

October 13, 2023

ECCP Online

ECCP at Work

FDI net inflows jump to 3-month high in July   

Data released by the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows jumped by 35.7% to $753 million in July from $555 million in the same month a year earlier. It also rose by 55.6% from the $484-million inflows seen in June. “The jump in FDI inflows was likely due to positive risk sentiment which encouraged investments in emerging markets like the Philippines,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message. “Additionally, the launch of green lanes for strategic investments and the signing of the Maharlika Investment Fund could have also encouraged inflows,” she said.

Trade deficit narrows in August

The country’s trade deficit narrowed by 31.5 percent in August from the same month last year as exports rose while imports declined, according to the Philippine Statistics Authority (PSA). Preliminary data released by the PSA yesterday showed the balance of trade in goods or the difference between the value of exports and imports amounted to a $4.13-billion deficit in August, lower than the $6.03-billion shortfall in the same month in 2022. Total merchandise export sales of the country reached $6.70 billion in August, up by 4.2 percent from the $6.43 billion in the same month last year. Total imported goods by the Philippines, meanwhile, declined by 13.1 percent to $10.83 billion in August from $12.46 billion in the same month last year.

IMF still sees PHL as one of region’s strongest economies this year

In its latest World Economic Outlook (WEO), the IMF expects the Philippines’ gross domestic product (GDP) to grow by 5.3% this year, below the 6-7% target of the government. Based on the WEO, the IMF projects 5.9% GDP growth for the Philippines in 2024, although this was already revised to 6%. This would still make the Philippines the second-fastest growing economy in emerging and developing Asia, after India (6.3%). The Philippines is also seen to be the fastest in ASEAN-5 next year, followed by Indonesia (5%) and Malaysia (4.3%).

Despite Neda caution, BSP to still hike rates

In a briefing on Wednesday, BSP Governor Eli M. Remolona Jr. said he is not ruling out a 25-basis-point (bps) rate hike in November given the latest data, including the 6.1-percent headline inflation rate recorded in September 2023. “We are considering hikes but we’re going where the data leads us. I don’t think Arsi’s [Neda Secretary Arsenio M. Balisacan] views and our views are that far apart. I think what Arsi really meant was we shouldn’t go for very aggressive hikes, but I wouldn’t rule out 25 basis points for example,” Remolona said. Remolona said while headline inflation rate increased, it was worth noting that core inflation slowed. Core inflation slowed to 5.9 percent, bringing the year-to-date core inflation rate to 7.2 percent.

PHL lobbies UN for rules on development, use of killer robots

The Philippines has called on the international community to launch negotiations for legally binding rules on the development and use of artificial intelligence-powered killer robots, or generally termed as lethal autonomous weapons systems (LAWS). To put this agenda forward, the Philippines is hosting a meeting among Indo-Pacific partners in December to craft rules to govern LAWS. The Philippines also advocates for peaceful uses of outer space and to elaborate the principle of “due regard,” which includes increasing the responsibilities of spacefaring nations to reduce threats from space such as debris from rocket launches.

IMF Outlook report: More Pinoys jobless in 2024

IMF said the country’s unemployment rate is expected to average 4.7 percent this year, which will rise to 5.1 percent next year. If the unemployment rate breaches 5 percent next year, this will be the highest since 2022, when the unemployment rate averaged 5.4 percent. IMF said the unemployment for 2024 is also expected to grow by an average of 0.1 percentage point over 2022–2024 in advanced economies. 

House shifts ₧194B in 2024 budget to food, WPS, health

To address the high cost of rice and enhance food production, House Committee on Appropriations Chairman Elizaldy S. Co said the small committee introduced several changes to the 2024 proposed budget, including significant allocations to the Department of Agriculture (DA), National Irrigation Administration (NIA), the Philippine Coconut Authority (PCA), and vaccine initiatives to combat the African swine fever (ASF). According to Co, substantial funds were allocated to agencies such as the Department of Health (DOH), the University of the Philippines-Philippine General Hospital (UP-PGH), the Department of Social Welfare and Development (DSWD), the Department of Labor and Employment (DOLE), the Technical Education and Skills Development Authority (Tesda), and the Commission on Higher Education (CHED) to support various critical programs, including healthcare, social welfare, and education.

Increases in prices of food products slowed in Q2 -PSA report

In its latest report, the Philippine Statistics Authority (PSA) said the producer price index (PPI) for agriculture decelerated to 12 percent from April to June compared to 15 percent in the same period a year ago. “Producer prices continue to surge in 2023 indicating that measures to address shortages in supply have yet to stabilize supply chains and improve production,” Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said in a message. “Thus we’ll likely still see inflation at the PPI and CPI (consumer price index) level for as long as we see meaningful improvement in production and supply chain management,” he added.

Philippines seeks better financing terms from multilaterals

Finance Secretary Benjamin Diokno said MDBs should introduce reforms, such as increased concessionality in their financing models, as a response to current global challenges. Diokno issued the intervention during the Intergovernmental Group of Twenty-Four (G-24) Ministerial Meeting on the sidelines of the 2023 Annual Meetings of the World Bank and International Monetary Fund (WB-IMF) in Morocco. Diokno said MDBs should make available better financing terms, especially amid rising interest rates and increasing costs of international borrowing. “The rapid increase in the level of the secured overnight financing rate (SOFR) poses significant risk burdens to countries such as the Philippines,” Diokno said.

Imported sugar release delayed in relief to farmers

Administrator Pablo Luis S. Azcona said on Thursday that the SRA needs “to regulate supply and ensure a fair price for farmers and consumers.” Sugar Order No. 7 series of 2022-2023, authorized shipments of 150,000 metric tons of raw sugar which arrived on Sept. 15. In a resolution signed by Mr. Azcona, the SRA said “it was deemed necessary to hold in abeyance” all applications of conversion and maintain the classification of all imported sugar as reserve. The SRA said that it will hold on to the reserve sugar to form a two-month buffer stock. He said that farmgate prices of raw sugar were currently below the regulators’ projections of P3,000 per bag.

DoE urges gas users to plan long-term for other fuels amid supply uncertainty

The Department of Energy (DoE) said gas users need to be more efficient and ready to shift to other types of fuel amid possible disruptions to the natural gas supply. “If there is an issue with LNG (liquefied natural gas), there should be other fuels that will enter so that we can continue. But those are in the long term,” Energy Undersecretary Felix William B. Fuentebella told reporters on the sidelines of an energy workshop on Thursday. Mr. Fuentebella was responding to a question on the delays to completing a regasification facility. Manila Electric Co. (Meralco) also said on Wednesday the restricted gas supply from Malampaya is forcing the industry to seek alternatives.

Well-milled rice prices average P50.69/kg in late Aug.

Prices rose 8% in the Aug. 15 to 17 period, which the PSA refers to as the second phase of July, compared with prices between Aug. 1 and 5, or the first phase. The PSA said that the highest retail price was recorded in Zamboanga Peninsula at P54.24 per kg. At the low end was Western Visayas with well-milled rice prices at P48.84 per kg during the period. The PSA said that regular-milled rice averaged P45.68 per kg, or 2.64% lower compared to the first phase. Northern Mindanao posted the highest average price at P43.32 per kg, while Cagayan Valley was lowest at P37.01 per kg.

P230-B funds, 120K jobs eyed in Halal roadmap

THE Philippines will launch a National Halal Strategy which aims to generate P230 billion in investments and create 120,000 jobs in five years and support small merchants in becoming part of a global halal ecosystem, according to the Department of Trade and Industry (DTI). In a statement it issued on Thursday, the Trade department said the plan will address the “growing” demand for Halal products and services from both the Philippines’s domestic market and from the 57 countries that are members of the Organization of Islamic Cooperation (OIC)—spanning Asia, the Middle East, Africa, Europe, and the Americas. The Trade chief noted that the halal industry forms part of DTI’s four priorities: promoting regional development; attaining food security; upgrading, upskilling, and upsizing micro, small and medium enterprises; and enabling job skills matching and skills upgrading.

DENR chief highlights role of village officials in disaster risk reduction

Department of Environment and Natural Resources (DENR) Secretary Maria Antonia Yulo-Loyzaga underscored the importance of the local government units (LGU) in reducing the risk of disaster and ensuring sustainable development. Barangays from the Province of Bataan, Province of Rizal, Ormoc City, and Siargao, Surigao del Norte, during the event, showcased their respective good practices in the fields of environmental protection, climate action, and disaster risk reduction. These LGUs are the pilot sites of the DENR’s Project TRANSFORM (Transdisciplinary Approach for Resilience and Environmental Sustainability through Multistakeholder Engagement).

6 infra projects up for Marcos approval, says Balisacan

Six infrastructure projects will be up for President Marcos’ approval, according to the National Economic and Development Authority (Neda). Balisacan did not answer questions on the costs of these projects. But as of August 2023, the latest government data available showed eight “flagship” infrastructure projects with a combined indicative cost of P254.9 billion were already scheduled “for government approval”. Broken down, five of the eight projects will be funded by official development assistance (ODA) while the rest are public-private partnerships (PPPs). 

Q4 to boost GDP growth towards target

The last quarter of the year would add 1 to 2 percentage points to the Gross Domestic Product, putting the Philippine economy close to the target range of 6 to 7 percent growth for the year,   according to George  Barcelon, president of the Philippine Chamber of Commerce and Industry (PCCI). But Barcelon warned the current crisis in the Middle East and the increase in interest rates could pose challenges for the economy. While price rollbacks have been made the past two weeks,  Barcelon said “we might see higher oil prices.” Barcelon said another cause for concern is the announcement of the Bangko Sentral ng Pilipinas it is contemplating another 25-basis point increase in key rates, taking a cue from the US Federal Reserves’ own direction.

DBM releases 97 percent of 2023 budget

The government has released P5.12 trillion or 97 percent of the record P5.268 trillion budget allocation as of the end of the third quarter, with ramped up spending expected for the remainder of the year. This means that only P149.91 billion is the remaining balance yet to be released by the DBM. The DBM released a total of P3.45 trillion under the 2023 General Appropriations Act (GAA). This is 94.1 percent of the total P3.66 trillion approved financing. Under the 2023 GAA, additional releases were made to departments in September, inching up to 97.3 percent or P3.06 trillion of the P3.14 trillion for departments.

Country’s first sovereign cloud launched by ePLDT

Speaking at the Philippine Digital Convention 2023 yesterday, ePLDT president and chief executive officer Victor Genuino said ePLDT Pilipinas Cloud (ePPC) would support the administration’s cloud-first policy by hosting government data and applications in a sovereign cloud. As a sovereign cloud, ePPC will provide a secure, flexible and cost-effective platform to store and process data strictly within the host country’s borders and be subject to local data protection laws and regulations. As the government is intensifying its digitalization efforts, the use of ePPC is expected to help government agencies and local government units effectively address data sovereignty and cybersecurity issues. For his part, Department of Information and Communications Technology Secretary Ivan John Uy lauded PLDT Group’s move to develop the country’s first sovereign cloud infrastructure.

Meralco takes control of solar firm for P16 billion

Manila Electric Co. (Meralco) is bolstering its power generation business as it is poised to take majority ownership of SP New Energy Corp. (SPNEC). MGen Renewable Energy Inc. (MGreen), the renewable energy development arm of Meralco Powergen Corp. (MGen), will invest P15.9 billion in SPNEC to subscribe to 15.7 billion common shares and 19.4 billion redeemable preferred voting shares of SPNEC. Meralco said MGreen has agreed with SPH to use SPNEC as the primary vehicle to develop 3,500 megawatts of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon. “This will be one of the largest solar projects not just in Asia, but in the world,” Meralco chairman and CEO Manuel V. Pangilinan said. “The Department of Energy’s vision is to have about 35 percent of the country’s energy come from renewable energy, and this is one of Meralco’s major contributions to this goal,” Pangilinan said.

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