November 14, 2023
ECCP at Work
The debt watcher said the rosy outlook was supported by large investments in infrastructure and reforms to foster trade and investment, including through public-private partnership. “We forecast real GDP growth of above six percent over the medium term, considerably stronger than the BBB median of three percent,” Fitch said. Fitch’s latest decision recognizes the Philippines’ strong medium-term growth prospects, gradually declining debt, macroeconomic stability and sound economic policies.
The DENR has reiterated its call for businesses to comply with the Extended Producer Responsibility (EPR) Act and register their initiatives on plastic waste management. According to the DENR, brand owners, product manufacturers, or importers of consumer goods that implement the EPR initiatives would be eligible for tax incentives. On the other hand, those that are noncompliant with the provision of the law and the target plastic waste recovery rates could face fines ranging from P5 million to P20 million.
The Philippines will finally join the ranks of high-growth tourism economies in the Asia-Pacific region that will be receiving an avalanche of inbound visitor receipts by 2033. Despite this optimistic projection for the country, tourism spend in the Philippines will still not be enough to make it among the top leisure destinations in the region in 10 years, which will be dominated by Malaysia (+192 percent, Thailand (+178 percent), China (+158 percent), India (+133 percent), and Japan (+80 percent). Under the WTM report’s projection, the Philippines will earn some P2.15 trillion in inbound receipts in 2033.
Data from the Bureau of the Treasury (BTr) showed the government settled obligations worth P492.38 billion in the third quarter, up 14.11 percent year-on-year. Compared to the preceding quarter, the debt servicing bill bloated by 43.89 percent. Analysts have said the Marcos administration could face more expensive borrowings amid rising interest rates following the aggressive tightening actions of the Bangko Sentral ng Pilipinas to fight resurgent inflation.
The DOF said the IRR ensures the independence of the Board of Directors of the Maharlika Investment Corporation (MIC) and allows it more headroom to form credible oversight and risk management bodies while upholding the highest standards of effective fund management. "Most importantly, this affirms the Marcos Jr. administration’s commitment to see the Fund off and running by the end of the year and effectively paves the way for the full operationalization of a well-structured, robust, and effective sovereign wealth fund that will advance the Philippines’ long-term growth," the DOF added. The MIC will be governed by a Board of Directors with nine members chaired by the Secretary of Finance.
Investors will be placing bets ahead of the Monetary Board’s policy meeting on Thursday after recent positive inflation and gross domestic product (GDP) data fueled a six-day rally by the benchmark Philippine Stock Exchange index (PSEi). The PSEi gained 2.88 percent the past week before ending at 6,161.89 on modest profit- taking. “The above-consensus third quarter GDP print suggests that overall economic activity has remained resilient despite a high-interest rate environment, which gives the BSP room for a rate hike should inflation expectations be problematic this year,” Metrobank Research said.
In a letter signed by Philippine Exporters Confederation, Inc. (Philexport) Sergio R. Ortiz-Luis Jr., local exporters recommended that the planned rate hike undergo a RIA as standard operating procedure under the EODB law. Local exporters said PPA is proposing to increase by 32 percent the storage charges for import, export, and transshipment containers; and by 150 percent the surcharges of the corresponding storage rates with increase for reefer containers. The Supply Chain Management Association of the Philippines — also in a recent hearing — called the proposed rate increase ill-timed, given the recent rise in transport fare, minimum wage, and prices of basic commodities.
The administration said it has reduced import tariffs to zero on two raw minerals used in the manufacture of building materials such as cement and plasterboard. Natural gypsum and anhydrite were formerly charged a 3% tariff, which was reduced to zero by Executive Order (EO) No. 46. EO 46 said there are currently no domestic sources for the two minerals in the absence of operating mines dedicated to their extraction.
Low-cost carrier Cebu Pacific (CEB) announced Monday a sharp increase in demand for travel in the third quarter of 2023, with the Gokongwei-led airline having flown 1.3 million international passengers -- up 228 percent compared to the same period in 2022. The notable increase was attributed to the continued network recovery and the opening up of more countries. The high international travel demand was particularly evident on routes with many overseas Filipino workers, according to the CEB. In a statement, CEB's Chief Finance Officer Mark Cesar said they remain optimistic about the airline's future growth.
BOC data released to the public, which was analyzed by the BusinessMirror, showed that it collected P22.911 billion in rice tariffs during the 10-month period, about 19.16 percent higher than the P19.228 billion it recorded in the same period of last year. The BOC saw a double-digit growth rate in rice tariff collection even though the total volume of rice imports dropped by 4.35 percent on an annual basis. The total volume of rice imports that entered the country during the 10-month period reached 2.846 billion kilograms, some 129.359 million kilograms lower than the 2.975 billion kilograms recorded last year, BOC data showed. Pundits and industry players have earlier explained that inbound shipments of rice have been challenged by higher global prices and supply constraints leading to the drop in import volume on an annual basis.
Having laid a solid foundation, the Aboitiz Group is positioned to move to the future with continuing transformation and innovation, said Aboitiz Group president and CEO Sabin Aboitiz. In power, AboitizPower has moved a step closer to achieving its goal to have a generation portfolio of 9,200 megawatts nationwide by 2030, 50 percent of which will be sourced from renewable energy. Infrastructure arm Aboitiz InfraCapital is likewise on track with its expansion plans, recently acquiring 200 hectares of land in Tarlac City by its subsidiary Lima Land Inc. Venturing into the light industries sector, Aboitiz Construction, meanwhile, is gearing up for another construction for Monde Nissin Corp., including the expansion of a bakery plant in Davao City.
“China leads the way in terms of a positive long-term outlook, followed by the Philippines and the Czech Republic,” the think tank said in a report. It said this is based on the update of its work first published in February 2020, which looked at the ability of selected emerging market economies to escape the middle-income trap and achieve high-income status. “Each of the top five ranked countries – China, the Philippines, the Czech Republic, Malaysia and Thailand – have a relatively strong score for technical indicators. These include measures of productivity growth, economic structure and governance,” Oxford Economics said. It said the good long-term indicator score must be viewed as an indication that the country “has a relatively high convergence potential versus other EM (emerging market) economies in our sample.”
Converge Information and Communications Technology Solutions Inc. is targeting a mid to high single-digit growth in revenues in 2024, to be driven by the continued growth of its home fiber and enterprise segments. Converge said its consolidated revenues rose by 7.2 percent nine months into the year to P26.2 billion, from P24.5 billion a year ago, cementing its position as the fastest-growing fixed broadband service provider among the top players in the Philippines, Converge said. In its virtual financial briefing last Friday, Converge president and co-founder Maria Grace Uy said the company will not likely hit 10 percent to 15 percent growth this year, but it is still on track to achieve 10 percent increase in earnings before interest, taxes, depreciation and amortization (EBITDA) this year.
Low-cost carrier Cebu Pacific is regaining the elevation it had prior to the pandemic, returning to profitability on the back of recovering demand for international flights. In its latest financial report, Cebu Pacific’s parent Cebu Air Inc. disclosed a net income of P5.03 billion from January and September, a reversal from its net loss of P12.05 billion a year ago. The airline attributed the revenue growth to the sustained increase in its passenger traffic. It served 15.5 million guests in the nine months to September, up by almost half from 10.4 million travelers during the same period last year. Further, Cebu Pacific improved its international footprint by roughly six times to 3.5 million, as the carrier is close to regaining its pre-pandemic capacity for overseas flights.
The Philippines ranked first in retail e-commerce growth in 2022 among Southeast Asian countries, posting a 25.9-percent growth, according to an Asian Development Bank (ADB) report. The ADB report, published in November 2023 with the title “E-Commerce Evolution in Asia and the Pacific: Opportunities and Challenges,” noted that although the e-commerce ecosystem in the Southeast Asian subregion is still “nascent,” the market has been growing rapidly and outpaces the rest of its Asian neighboring countries.Five economies within the region—Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam—will rank among the top 10 markets worldwide measured by retail e-commerce sales growth by the end of 2022,” ADB noted as it cited the 2022 Cramer-Flood report.