November 24, 2023
ECCP at Work
The European Chamber of Commerce of the Philippines (ECCP) welcomed EU Parliament and Council's support for the renewal of the European Union Generalized System of Preferences (EU GSP+) for another four years, citing the significant benefits it provides to Filipino firms. Meanwhile, Department of Trade and Industry (DTI) Secretary Alfredo Pascual, who also welcomed the EU’s decision, emphasized that the constructive dialogues within the GSP+ framework paved the way for the Philippines to address points of concerns.
Trade Secretary Alfredo Pascual said it is high time to resume free trade agreement (FTA) talks between the Philippines and the European Union (EU). According to Pascual, the resumption of FTA negotiations was endorsed by EU Commission President Ursula Von Der Leyen during her visit to the Philippines in July as well as key business sectors such as the EU-Asean Business Council European Chamber of Commerce of the Philippines (ECCP) and other industry associations. ECCP in a statement yesterday welcomed this development since many European and Filipino firms are benefitting from this scheme.
The measure will amend the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which restricts the so-called zero-rating on value-added tax (VAT) on local purchases to the sale of goods and services directly used in a project or activity of a registered exporter. The CREATE MORE bill also empowers the President to modify, craft and grant incentive packages, without the recommendation of the Fiscal Incentives Review Board. Under the bill, domestic and export companies, even those inside ecozones and freeports, would continue to enjoy duty exemptions, VAT exemption on importation, and the VAT zero-rating of local purchases as provided in their respective investment promotion agency (IPA) registrations.
Multilateral lenders expect the Philippines to be one of the fastest-growing economies in the region amid the looming global slowdown, but emphasized the need to boost labor productivity, infrastructure competitiveness, and climate resilience to ensure growth remains robust. World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Ndiamé Diop said he is optimistic about the country’s growth prospects despite global headwinds. Asian Development Bank (ADB) Country Director for the Philippines Pavit Ramachandran said Philippine economic growth is at the “top of the leaderboard” in Southeast Asia. Meanwhile, International Monetary Fund (IMF) Representative to the Philippines Ragnar Gudmundsson said domestic demand can be bolstered if inflationary pressures subside.
According to the DOF, the focused and dedicated tools under the Global Shield Initiative, as a grant facility, will directly contribute to the overall climate and disaster risk management agenda and disaster risk financing and insurance strategy of the Philippines. “We will use this seat to further the interests of the Philippines. This initiative will widen access to much-needed financial protection to make climate-vulnerable countries like the Philippines more resilient,” Finance Secretary Benjamin Diokno said.
Philippine privileges under the European Union’s (EU) Generalized Scheme of Preferences Plus (GSP+) will be extended by another four years, according to the European Union Ambassador to the Philippines Luc Veron. With the four-year extension, the Philippine participation in the GSP+ scheme will run through 2027. Under the scheme, the Philippines is required to uphold commitments to 27 international conventions on human rights, labor, good governance and climate action. “The EU GSP’s incentive-based approach of engagement has proven successful, and it should, therefore, continue,” the EU Commission said in its report to the legislators.
The European Chamber of Commerce of the Philippines on Thursday welcomed the recent positive developments regarding the extension of the European Union Generalized Scheme of Preferences Plus, or GSP+, for the Philippines. “We appreciate the European Parliament supporting the European Commission’s proposal to renew the scheme for another four years. The ECCP has strongly advocated for the GSP+ renewal since many European and Filipino firms are benefiting from this scheme,” the ECCP said in a statement. Meanwhile, Trade Secretary Alfredo Pascual, also on Thursday, said the EU’s Fourth GSP Report, released on Tuesday, recognized the important strides made by the Philippines’ current administration and its commitment to GSP+ compliance.
A proposed executive order (EO) aimed at expediting the processing of requirements for infrastructure flagship projects (IFPs) will be ready before yearend, a National Economic and Development Authority (NEDA) official said. In September, NEDA Secretary Arsenio M. Balisacan first announced the draft EO which aims to “enable the expeditious processing of licenses, clearances, permits, certifications and authorizations for the IFPs.” It also aims to minimize and ultimately eliminate delays in the implementation of these projects, he added. It would also promote the automation of databases for more efficient data-sharing among agencies and facilitate electronic application submissions.
Speaking at the Pilipinas Conference in Makati City yesterday, DOTr Secretary Jaime Bautista said due to agency’s limited fiscal space, it has “resorted to seeking private sector support.” Of the total 197 Infrastructure Flagship Projects (IFP) with total cost of over P8 trillion approved by the NEDA, 73 are being undertaken by DOTr, including around 28 projects under the aviation sector, 26 under maritime, 59 under railways and 47 under the road sector. Meanwhile, the DOTr is looking into official development assistance, public-private partnership and government funds to finance the construction of three major railway projects: the Bicol-South Long Haul, first phase of the Mindanao Railway and the Subic-Clark Railway. Other DOTr projects in the pipeline are the privatization of Ninoy Aquino International Airport, the New Manila International Airport in Bulacan and the modernization of several airports, such as those in Bukidnon, Catbalogan, Dumagete, Tacloban, Kalibo, Caticlan, Laguindingan, Siargao, Zamboanga, Masbate and Cotabato.
The December 31 deadline for the consolidation of traditional jeepney operators and drivers into cooperatives as part of the Public Utility Vehicle Modernization Program (PUVMP) is non-negotiable, according to the Department of Transportation (DOTr). DOTr Secretary Jaime Bautista said in his meeting with the counsel of the Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide “there were demands” including the extension of the validity of PUV franchises but that the Land Transportation Franchising and Regulatory Board (LTFRB) has set the guidelines for the franchise extension. Bautista maintained the DOTr has the support of various transport groups and that he and LTFRB chairman Teofilo Guadiz III are open for dialogue with the transport groups that also include Manibela.
Shell Pilipinas Corp. will now officially be engaged in the business of electric vehicle (EV) charging after securing the approval of its stockholders. This new business is aligned with the approach towards energy transition to achieve sustainable and cleaner energy solutions beyond petroleum products. Earlier this year, Shell Pilipinas and its affiliate, Shell Energy Philippines forged a tripartite agreement with the Department of Energy, aimed at the further deployment of EV charging stations powered with renewable energy.
Carlos Primo David, undersecretary of the Department of Environment and Natural Resources (DENR) said as much as 1 million hectares (ha) of classified government forest lands and as much as 292 water assets will be opened for private sector investments. In the same forum, DENR Secretary Maria Antonia Yulo Loyzaga said the agency will open by early next year the 1 million ha of classified government forest lands where timber, bamboo, abaca, coffee and other forest products can be cultivated. Loyzaga said proponents will be required to reforest a portion of their areas which in turn can be eligible for carbon credit purposes and help increase country’s permanently protected forest cover. Loyzaga added the DENR aims to establish a national government-led platform for carbon credits to facilitate trading of such commodities through a government-to-government approach.
In a statement, the BIR said 15 criminal cases were filed before the Department of Justice yesterday. A total of 69 respondents, which include corporations, corporate officers and accountants, were impleaded in the cases filed. “The sale and use of ghost receipts is a tax-evasion scheme of the highest order. The BIR is committed to filing civil and criminal charges against all corporations, corporate officers and accountants involved in this syndicate,” BIR commissioner Romeo Lumagui Jr. said. According to the BIR, these buyers and sellers have violated Section 254-Tax Evasion, Section 255-Failure to Supply Correct and Accurate Information in the Income Tax Returns and Value Added Tax Returns, Section 267-Perjury and Section 257-Making False Records or Report under the National Internal Revenue Code.
Singapore’s economy grew faster than initial estimates in the third quarter, helped by a resurgence in tourism and service sector activity, although authorities warned of risks to the outlook from inflation and geopolitics. Gross domestic product (GDP) rose 1.1 percent year-on-year, government data showed on Wednesday, higher than the initial estimates of 0.7 percent released last month. It expects GDP growth in 2024 to be from 1.0 percent to 3.0 percent . “Better than expected third quarter GDP growth confirms that the economy is on track for a stronger recovery going into 2024,” said Maybank economist Chua Hak Bin.
The Philippines’ digital economy is on track to achieve $24 billion in gross merchandise value (GMV) this year, an increase of 13 percent compounded annual growth rate (CAGR), and well on its way to grow 20 percent to $35 billion in GMV by 2025. The report said the Philippines has the highest spend index for this sector among high value users (HVUs) in SEA which is more than 21 percent higher than non high value users (NHVUs). The report added online travel is on its track to hit $3 billion GMV this year and is seen growing 18 percent CAGR by 2025 when the sector is expected to reach $4 billion GMV. Online travel posted 88 percent growth from, the highest growth rate in the local digital economy from 2022 to 2023.
THE BUREAU of Internal Revenue (BIR) collected P274.429 billion in October, surpassing its target for the month by 8.57%. “With the intensification of the bureau’s tax enforcement activities, specifically on the campaign against sellers and buyers of fake receipts, and with the continuous streamlining and digitization of the BIR’s core services, we hope to encourage all noncompliant taxpayers to comply fully with the provisions and requirements of the tax laws,” BIR Commissioner Romeo D. Lumagui, Jr. said in a statement on Tuesday. The BIR is targeting to collect P2.64 trillion this year, which is 13% higher than its collection of P2.34 trillion in 2022. Mr. Lumagui said the agency would likely reach or even surpass its collection target for the year.
Trade Secretary Alfedo E. Pascual said they plan to hold two cycles of acceleration per year starting 2024, supporting potential pilot and commercialization efforts of more than 20 tech startup companies per cycle. The trade chief said they will focus on strengthening the local information technology and business process outsourcing (IT-BPO) sector through the adoption of artificial intelligence (AI), empowering manufacturing industries through industry 4.0 technologies, and catalyzing growth in agricultural technology. Trade Undersecretary Rafaelita M. Aldaba said this strategy to aid the acceleration of local startups will fuel innovation and foster an environment ripe for the success of these businesses.
The Manila Electric Co. (Meralco) said it will align its possible venture into micro-modular reactor (MMR) nuclear energy technology with the Department of Energy’s (DOE) vision on nuclear energy where the agency has initially identified 14 areas apt to host such technology, according to Ronnie Aperocho, Meralco chief operating officer. Meralco and American firm, Ultra Safe Nuclear Corp. last week formalized an agreement for the conduct of a joint pre-feasibility study on MMRs with the aim to explore clean and sustainable energy options in the country. The study will enable Meralco obtain an estimate of the environmental and social impact, capital expenditure and operational costs, among others, related to the siting, construction, and operation of one or more MMR energy systems in the Philippines.
Pascual acknowledged the economic impact of the worsening climate crisis during the Asia-Pacific Economic Cooperation (APEC) Philippines Sustainability Roundtable on November 16. He highlighted the government's efforts that are being undertaken, including the active pursuit of waste management solutions through studies, consultations, and awareness campaigns. Pascual also laid out the established comprehensive legislations to address plastic pollution including the Republic Act 9003 or the "Ecological Solid Waste Management Act of 2000" and the National Plan of Action for the Prevention, Reduction and Management of Marine Litter. He also emphasized the Extended Producer Responsibility Act of 2022 that addresses our country's contribution to the global plastic pollution problem, where 40 percent of global plastic waste ends up in the ocean. For energy, he highlighted the country's strategic sustainable initiatives focused on increasing renewable energy generation.
The Philippines is confident it would continue to enjoy tariff privileges from the European Union (EU) Generalized System of Preferences Plus (GSP+) after the European Parliament backed a proposal by the European Commission for the renewal of the scheme for another four years. In his speech at the Pilipinas Conference in Makati City yesterday, Trade Secretary Alfredo Pascual said the proposal of the EC for the rollover of the existing GSP+ for another four years has been supported by the EP and the European Council. During the reporting period, EU monitoring focused on extra-judicial killings, intimidation of and attacks against civil society (including red-tagging and violence against human rights defenders and media professionals), child labor, labor rights and cooperation with United Nations (UN) bodies. The EU noted the Philippines has taken several steps to address points of concern and that the situation continues to progress under the current administration.
While updated modules on programming are already being offered to students, access to these opportunities needs to be improved, Jay Pegarido, country manager at tech firm Sansan Global Development Center, Inc., said in an interview with BusinessWorld. In a July report, the Asian Development Bank said the Philippines should use education technology to bridge the skills gap or risk job losses due to rapid technological advancement. Emerging technologies, such as artificial intelligence (AI), also add to tech talent competition, but not to a worrying extent in the short- to medium-term, Mr. Pegarido said. Public and private sector leaders should also ensure the country is well-positioned to compete globally in terms of emerging technologies, Mr. Pegarido said.
The Board of Investments (BOI) will collaborate with global aviation pioneer Airbus to enhance sustainability in the aviation supply chain and promote the use of sustainable aviation fuel (SAF) for a net-zero carbon emission aerospace industry by 2050. Airbus, which operates in the commercial aircraft, helicopters, defense, and space sector, highlighted the country's significant role in its Asia Pacific supply network to decarbonize aviation through sustainable supply chain solutions, BOI reported that Airbus is targeting to achieve certification of 100 percent SAF by 2030, as part of its full commitment to Net Zero 2050. Currently, all Airbus aircraft are certified to operate on up to a 50 percent blend of SAF mixed with kerosene only. With 100 percent SAF, it will reduce life cycle CO2 emissions by up to 85 percent.
An analysis by the nonprofit organization Oxfam has exposed a stark contrast in carbon pollution, revealing that the carbon emissions of the richest 1% of Filipinos are equal to the combined emissions of the poorest 50% of the population. "The report shows the stark gap between the carbon footprints of the super-rich — whose carbon-hungry lifestyles and investments in polluting industries like fossil fuels are driving global warming — and the bulk of people across the world," Oxfam Pilipinas Executive Director Erika Geronimo said. Oxfam also emphasized the role of the richest 10% in the climate breakdown, noting that its contribution to the climate story is "far less well known and documented" along with the top 1%.