November 10, 2023
ECCP at Work
The Philippine economy grew 5.9% in the third quarter from a year earlier, the statistics agency said on Thursday, stronger than the previous quarter’s 4.3% expansion. Analysts polled by Reuters had expected third quarter output to grow 4.7%. On a quarter-on-quarter basis, gross domestic product expanded 3.3%, beating the 2.0% forecast in the same Reuters poll. The main contributors to third quarter expansion were growth in wholesale and retail trade, repair of motor vehicles and motorcycles, financial and insurance activities, and construction, the Philippine Statistics Authority said.
The Philippines' unemployment rate rose slightly in September compared to August while the underemployment rate dipped, the Philippine Statistics Authority said on Wednesday. The PSA said the jobless rate was at 4.5 percent in September, slightly higher than the 4.4 percent clip seen in August. This translated to 2.26 million jobless Filipino workers in September compared to 2.21 million in the preceding month. For its part, the National Economic and Development Authority (NEDA) said it will continue to pursue high-quality jobs for Filipinos. The economic manager also said digitalization and promoting innovation in business--especially in micro, small, and medium enterprises--will open up more opportunities for high-quality and high-paying jobs for Filipinos.
During the hearing, House Ways and Means Committee chair Joey Salceda said the proposed amendments under the CREATE MORE bill would “make the tax incentives system more responsive to the global market and more globally competitive.” Salceda said the House version of the bill would address the value-added tax (VAT) rate and refund issues, especially for exporters. Other enhancements include the reduction of the corporate income tax to 20 percent for those under the enhanced deduction regime, a 200 percent deduction for power cost, which may be accumulated while availing of an income tax holiday (ITH), a 200 percent deduction for trade fair and trade mission expenses, and the application of the Net Operating Loss Carryover five years after the end of the ITH period, he noted.
Slowing inflation may be good news for some but this may also indicate weaker demand, thus, lower economic growth, according to local economists. Socioeconomic Planning Secretary Arsenio M. Balisacan also said that inflation may have also eased due to base effects, but qualified this later. Balisacan said these significant declines in prices cannot be explained by mere base effects alone. He said there was a real reduction in prices that led to slower inflation in October.
The National Economic and Development Authority (NEDA) said the government is “on track” in laying down the groundwork for the full implementation of its 2023-2028 Philippine Development Plan (PDP). NEDA Undersecretary Rosemarie G. Edillon said they are now preparing the Philippine Development Report, which will consolidate the accomplishments of government agencies in the enforcement of the PDP.
In a news statement, the Manila International Airport Authority (Miaa) said 8,000 flights departed and arrived during the 10-day break, which also included the Barangay and Sangguniang Kabataan Elections (BKSE) on October 30, also declared a non-working holiday. This year’s passengers were 85 percent of the prepandemic level of 1.43 million passengers during a similar Undas break from October 25 to November 4, 2019.
International travel to the Philippines continues its uptrend as the country received 4.5 million foreign visitors from January to November 5. This represents 93 percent of the Department of Tourism’s (DOT) 4.8-million arrivals target this year. This developed as the DOT launched the Bisita Be My (BBM) Guest program at the Millennium Gloucester Hotel in London, hoping to tap the sizeable Filipino population in the United Kingdom to spread the news about the Philippines and encourage more international visitors to the country. Speaking at the launch, Philippine Ambassador to London Teodoro L. Locsin Jr. said the United Kingdom remains the Philippines’ largest source market for European visitors and through the BBM guest program, this would lead to more UK visitors.
The lack of access to finance and technology are among the reasons that prevent the “graduation” of Filipino micro, small, and medium enterprises [MSMEs] into large businesses, according to the National Economic and Development Authority (Neda). Socioeconomic Planning Secretary Arsenio M. Balisacan said some of the country’s neighbors are making a lot of spending in innovation. Currently, the country spends 0.3 percent of GDP on innovation. This is significantly lower than the 1 percent that is recommended in terms of spending for innovation.
The renewable energy unit of distributor Manila Electric Co. (Meralco) plans to spend P200 billion to help develop what is slated to be the country’s largest solar farm that will be built by businessman Leandro Leviste’s company. Meralco chair Manuel V. Pangilinan on Monday said the amount would also fund the development of battery energy storage systems (BESS) that would ensure backup supply availability, especially at night and in the event of shortages. “It’s exciting, it’s a big project. It has attracted a lot of interest from foreign investors because it’s big. It’s transformative for the Philippines,” Pangilinan told reporters.
West Zone concessionaire Maynilad Water Services Inc. is launching an Enhanced Lifeline Program (ELP) that will give a higher discount on the water bills of qualified low-income and low-consuming residential customers starting next year. Maynilad provides a 41 percent discount on the basic charge of its regular lifeline customers or those whose monthly consumption does not exceed 10 cubic meters (cu. m.). However, under the company’s ELP, regular lifeline customers who are also marginalized including beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) or customers living below the poverty line, as determined by the Department of Social Welfare and Development, can apply and qualify for a higher discount on their water bills.
In a statement, CEB said it received its 13th aircraft delivery which is part of the total 19 aircraft for delivery this year. “This aircraft delivery supports our goal to make our operations more reliable while continuing to provide safe, reliable, and affordable air travel to our passengers. Our ongoing investment in SAF (sustainable aviation fuel) is also a crucial step for our decarbonization efforts, paving the way for a more sustainable future in air travel,” said Alex Reyes, CEB chief strategy officer. The airline said it also aims to transition to an all-NEO fleet by 2028 and will incorporate SAF for its entire commercial network by 2030.
Power plants slated for completion within the year or early 2024 could help cushion the possible impact of the Israel-Hamas war on the local energy market, according to a government official. Asked if the ongoing conflict in the Middle East would affect the Philippine inflation rate, National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon said the general consensus was it would "be contained." But if tensions further escalate, the country would need energy intervention measures as fuel and energy prices would be the first ones to be hit.
Data from the PSA on Wednesday showed the value of production in agriculture and fisheries at constant 2018 prices dipped by 0.3% to P412.412 billion in the July-to-September period, “due to reductions in crops and fisheries production.” At current prices, the value of production in agriculture and fisheries rose by 4.3% to P522.58 billion in the third quarter. Former Agriculture Undersecretary Fermin D. Adriano said fisheries production was affected by typhoons during the third quarter. “We might be feeling the brunt of the impacts of El Niño, though technical assessments should be conducted first,” he said in a Viber message.
Tourism Secretary Maria Esperanza Christina G. Frasco said at the World Travel Market Ministers’ Summit in London on Monday that the DoT is working to raise the quality of tourism education. “Our government has applied a trifocal approach towards tourism education from basic education to technical vocational to higher education… The Marcos administration envisions the Philippines as a center for excellence in terms of tourism training,” Ms. Frasco said during a panel discussion. She said that the DoT is constantly consulting with companies to ensure that the needs of the industry are met by schools training their future workers.
The National Economic and Development Authority (NEDA) Board, chaired by President Marcos Jr., on Thursday approved the P28.2- billion “Pang-Agraryong Tulay Para sa Bagong Bayanihan ng mga Magsasaka” (PBBM Bridges Project) of the Department of Agrarian Reform which involves the construction of 350 steel bridges around the country. Balisacan said the bridges will enhance access and connectivity for agrarian reform communities as they would be located in agricultural areas to help speed up and ensure the smooth delivery of agricultural products to the markets. He said the bridge project also aims to help “improve the quality of life in rural areas…increase the productivity and income of at least 350,000 households.”
Philippine inflation may average 6.2% this year and 4.7% in 2024 based on the risk-adjusted forecasts of the Bangko Sentral ng Pilipinas (BSP). Monetary Board (MB) member Romeo L. Bernardo said the risk-adjusted inflation forecasts show above-target inflation for 2023 and 2024. “For 2023, inflation is seen to settle at 6.2% from our previous September 21 baseline forecast of 5.8%, while average inflation in 2024 will likely reach 4.7% against the baseline of 3.5%,” he said in an economic forum hosted by Security Bank Corp. on Thursday.
The latest Monthly Integrated Survey of Selected Industries showed the Volume of Production Index (VoPI) for manufacturing registered a year-on-year increase of 9.1 percent in September 2023. According to the PSA, the higher annual growth of the VoPI in September 2023 was mainly brought about by the annual increases in the manufacture of coke and refined petroleum products, 78.6 percent; of computer, electronic and optical products, 2.9 percent; and of basic metals, 14 percent. The Value of Production Index (VaPI) increased by 8.9 percent in September 2023, faster compared with the 7.5 percent growth in the previous month. The expansion in the annual growth of the VaPI in September 2023 was mainly attributed by the PSA to the higher annual increase in the manufacture of coke and refined petroleum products industry division at 66.9 percent.