October 31, 2023
ECCP at Work
The Climate Change Commission (CCC) said the country’s first ever National Adaptation Plan (NAP), which will help boost local resilience against the impact of extreme weather, will be out soon. The NAP, the result of the comprehensive stakeholder consultation of CCC, contains the government’s plan to address multiple aspects of climate change including “food security, agriculture, water resources, governance, stakeholder engagement, technology, financing and capacity building.” CCC also noted the NAP will help mainstream climate change adaptation measures among local government units (LGU) through their Local Climate Change Action Plan (LCCAP).
“For the subsidy, we’re crafting a training program under the Malikhaing Pinoy for creative workers,” Rafaelita M. Aldaba, DTI Undersecretary for Competitiveness and Innovation Group said. Meanwhile, for the “skills-based” incentives for employers, Aldaba said this is “partly available to companies under the Corporate Recovery and Tax Incentives for Enterprises [CREATE] Act if they choose enhanced deductions under the Strategic Investment Priority Plan [SIPP] menu of incentives, further explaining that additional deductions include trainings.”
Headline inflation may ease to 5.3% in October, which would put less pressure for the Bangko Sentral ng Pilipinas (BSP) to further tighten monetary policy, according to Pantheon Macroeconomics. Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco and Senior Asia Economist Moorthy Krshnan said Philippine inflation may still return to the 2-4% target band by the end of the year. “We are maintaining our end-2024 rate forecast of 5.5% too, implying a more pronounced unwinding of one of the region’s most aggressive rate-hiking cycles, which could start as early as February, if our relatively benign outlook for inflation and downbeat view on growth prove accurate,” it said.
The BIR released the final draft of the amendments to Revenue Regulation No. 2-98 which currently does not cover income payments by online platform providers. Under the final draft, the BIR would impose a withholding tax of 1% on one half of the gross remittances by domestic e-marketplace operators to the online merchants for the goods or services sold through their facility.
The state’s debt servicing bill amounted to P1.16 trillion in the first eight months, up by 70 percent versus last year’s P682.9 billion. In August alone, debt payments nearly tripled year-on-year to P189 billion. Broken down, the bulk of the payments, or 66.5 percent, went to settling principal obligations while the remaining 33.5 percent covered interest charges. Moving forward, analysts are expecting costlier debts for the government as a resurgent inflation triggered an aggressive response from the Bangko Sentral ng Pilipinas, which has brought the key rate to 6.50 percent after an off-cycle hike this week.is
Dutch financial giant ING Bank now expects slower economic growth in the Philippines due to the aggressive rate hikes delivered by the Bangko Sentral ng Pilipinas (BSP). “We are therefore likely to lower our GDP growth forecasts (4.7 percent and 4.5 percent) while retaining our inflation forecasts for 2023 and 2024 (six percent and four percent),” Mapa said. Mapa said the off-cycle rate hike was carried out in a bid to ensure inflation expectations stay well-anchored as the peso is on relatively stable footing, while inflation remains largely driven by supply-side factors.
The national government’s subsidies to government-owned and -controlled corporations in the first nine months of 2023 rose 12.27 percent versus the year ago level, data released by the Bureau of the Treasury (BTr) showed. According to the latest cash operations report, subsidies in January to September 2023 totaled to P137.13 billion, up from the P122.25 billion recorded in the same period a year ago. The lion’s share of the subsidies released to state-run firms, amounting to P50.61 billion, went to the Philippine Health Insurance Corp. (PhilHealth). Other top recipients as of end-September are the National Irrigation Administration (NIA) with P31.81 billion, National Housing Authority (NHA) with P16.63 billion, National Food Authority (NFA) with P6.02 billion and the Power Sector Assets and Liabilities Management Corp. with P5 billion.
“We are maxed out here in NAIA (Ninoy Aquino International Airport) so we cannot build anything anymore. New hangars have to be built somewhere else. We are looking at Clark because its airport is ready, it fits our operations,” LTP President and Chief Executive Officer Elmar Lutter told reporters last week. The first phase of the planned expansion would roughly cost about P5 billion, he said, adding that the second phase is estimated to cost as much as P10 billion. “Our logical step to move forward and in the long term, we have to build an alternative to NAIA. As you all know, there are new airports that might also shift our priorities toward NAIA,” Mr. Lutter said.
Two more business organizations have opposed the plan of the Philippine Port Authority (PPA) to increase storage fees for foreign containerized cargos amid snowballing calls to junk the move that is seen to further bludgeon the export industry. Foreign Buyers Association of the Philippine (Fobap) president Robert Young told the Inquirer that the planned move of the PPA would affect the prices of exported goods, many of which were already more expensive to produce compared with the merchandise of other countries. In light of this, the Fobap official said they planned to submit a joint position paper with other groups, including the Philippine Exporters Confederation, Inc. (Philexport), to formalize their concerns. Meanwhile, the Association of International Shipping Lines (AISL) has thrown its support to the other business groups assailing the PPA’s proposal, saying it would have a negative impact on the country’s export industry.
The Philippine Exporters Confederation Inc. (Philexport) has expressed optimism that the country still has a “fighting chance” of meeting exports target for 2023 amid geopolitical conflicts such as the war in the Middle East and fluctuating price of fuel, among others. “I think we should be achieving near to it. I think we have a fighting chance to meet the targets,” Philexport President Sergio R. Ortiz-Luis Jr. said. For this year, the Philippine Export Development Plan (PEDP) 2023-2028 has set a target of $126.8 billion for the country’s merchandise and services exports.
“What we are projecting is that the total number of arrivals will reach up to four million arrivals for the entire fourth quarter and the total number of departures will be around 3.8 million,” BI spokesperson Dana Sandoval told CNN Philippines’ The Source. Sandoval said their projection for the last three months of 2023 is close to pre-pandemic figures as countries open their borders. The BI official said they recently recorded almost 40,000 arrivals and departures per day as Filipinos head back to their provinces or go on vacation during this week’s Undas break. So far, the BI has not received any major concern from travelers, but Sandoval said duty supervisors are on standby in case passengers feel they are being harassed by an immigration officer. Those with concerns can also reach out to BI helpline for immediate assistance, she added.
BOC Assistant Commissioner and Spokesperson Vincent Philip Maronilla recently told reporters there is a possibility that the agency could collect over P900 billion this year, higher than the P874.2-billion target it has set for 2023. “Our goal is not just to hit that. We have an internal goal of trying to hit more than the target. We’re trying to maximize as much as possible the surplus that we want to take; also we want to collect, knowing fully well that we’re in a position to contribute more. And Commissioner Rubio has set a very high goal internally for the Bureau,” Maronilla said. Furthermore, the BOC said it has surpassed its mandated target collection for the January-to-August period of P567.740 billion by 2.54 percent or about P14.393 billion. BOC attributed the increase in its year-to-date collections to “efficient customs operations, enhanced trade activities, and robust revenue collection measures” it implemented this year.
The company said in a statement over the weekend it will first target to reduce direct emissions by over 20 percent by 2030, the baseline of scope 1 emissions. The company added its “just, orderly and affordable transition” to clean energy is the central thrust of a long-term sustainability strategy which begins with investments in renewable energy (RE) to serve the country’s growing energy demand. “We recognize our impact on the planet and we will do more as part of our earnest commitment to sustainability. As we chart the path towards a brighter and greener energy future, Meralco will continue to evolve and elevate its sustainability agenda to continue powering the good life for all,” said Raymond Ravelo, Meralco first vice president and chief sustainability officer.
The United Kingdom has vowed to work with the Philippines in addressing cyber security apart from the traditional areas of cooperation on trade and investments. Laure Beaufils, ambassador of the UK to the Philippines, in a televised interview said education, health, maritime security are among the areas that both countries are engaged in. However, Beaufils said the UK is working on some cross cutting issues with the Philippines, including cyber related issues as well as artificial intelligence (AI). Beaufils said the UK is looking at growing further its trade with Philippines which “ has never been as high as it is currently.”