ECCP at Work

PH, Korea eye to sign FTA in October

An official of the Department of Trade and Industry (DTI) said on Thursday the Philippines and South Korea are now finalizing the bilateral free trade agreement (FTA) and aim to conclude the trade deal next month. “We are now also in the final stages towards concluding the FTA with Korea. Hopefully, this can be done in time for the Asean-Korea Summit which will happen towards the end of October,” Undersecretary Ceferino Rodolfo said during the virtual 2021 European-Philippine Business Summit. Manila and Seoul agreed to pursue FTA in 2019 to improve market access for goods and services.

Palace sees ‘merrier Xmas;’ Alert Level 4 set for extension

According to the Department of the Interior and Local Government, the pilot implementation of the new alert level system with granular lockdowns in Metro Manila may be extended beyond September. At the 23 September press briefing, presidential spokesman Harry Roque said he was hopeful that the government would hit its goal of inoculating 70 percent to 80 percent of its target population in Metro Manila and that people would “somehow return” to their normal lives.

8-month budget deficit widens 29% to P958 billion

Latest data released by the Bureau of the Treasury showed the budget gap in the eight-month period was higher by 29.36 percent this year compared with last year’s P740.7 billion. The year-to-date budget deficit level is now at 52 percent of the P1.86-trillion revised programmed budget gap for 2021. For the month of August alone, the national government’s budget deficit surged threefold to P120.9 billion from only P40.1 billion last year. This bigger August budget gap resulted from government expenditures outperforming state revenues.

Certify 2022 budget, House asks Palace

The leadership of the House of Representatives formally asked President Duterte to certify as urgent the P5.024-trillion General Appropriations Bill (GAB) for 2022. Speaker Lord Allan Velasco and Committee on Appropriations Chairman Eric Go Yap said the House sent its formal letter of request to President Duterte for the issuance of the urgent certification to expedite approval of the 2022 national budget. With this certification, Congress dispenses with the three-day rule between second and third reading approvals of a measure. 

Vaccine supply enough to cover minors by Oct.

The Philippines’ vaccine chief is asking the national government to begin the vaccination of children aged 12 to 17 by mid-October. Priority would be given to minors with comorbidities and children of health workers once President Rodrigo R. Duterte approves the proposal, vaccine czar Carlito G. Galvez, Jr. said at a televised Cabinet meeting. He explained that demand and supply of vaccines against the coronavirus are now at meeting point, which means sectors other than the four priority groups can be opened. The Philippines will have enough supply of coronavirus vaccines to inoculate 12 million children aged 12 to 17.

BSP holds key rate to boost recovery

The Bangko Sentral ng Pilipinas (BSP) left the key rate at 2%. Overnight deposit and lending rates were also kept at 1.5% and 2.5%. Mr. Diokno said the outlook for recovery continues to hinge on timely measures to prevent deeper negative effects on the Philippine economy. The economy grew by 11.8% year on year in the second quarter, ending a recession after five straight quarters of decline. The BSP would probably keep policy rates steady until the end of next year amid expectations of elevated inflation in the coming months and weak economic recovery, Pantheon Macroeconomics Senior Asia Economist Miguel Chanco said in a note.

Mobility for fully vaccinated a global norm – Concepcion

Presidential adviser for entrepreneurship Joey Concepcion initiated a dialogue on safer travel with key tourism industry stakeholders in relation to his recent appeal to help the aviation industry from crashing. Stressing that providing greater mobility to the fully vaccinated is now the norm worldwide, Concepcion reiterated his call to the government to impose fewer restrictions to fully vaccinated passengers to encourage them to travel. He added that the United States’ recent pronouncement of easing travel restrictions on all fully vaccinated foreign visitors starting November is a clear proof that allowing mobility for vaccinated individuals is the suitable approach in addressing many underlying economic issues.

Economists further cut 2021 GDP growth forecast for PH to 4.6%

Economists polled by Barcelona-based think tank FocusEconomics have again tempered their growth expectations for the Philippines to 4.6 percent this year due to a surge in COVID-19 cases during the third quarter that slowed economic recovery. FocusEconomics also flagged possible political risks due to President Duterte’s decision to run as vice president in next year’s national elections. Its Sept. 21 report showed a slightly lower consensus forecast for the Philippines’ gross domestic product (GDP) growth compared to 4.7 percent in August. The latest average projection remained within the government’s downscaled 4-5 percent target range.

Abra, Baguio, Bohol under GCQ with heightened restrictions until Sept. 30

The government has placed Abra, Baguio City, and Bohol under general community quarantine (GCQ) with heightened restrictions effective Sept. 24 until the end of the month, Malacañang announced. Abra and Baguio City were initially under GCQ while Bohol was under modified general community quarantine (MGCQ). Presidential spokesperson Harry Roque also said in a statement that Ilocos Norte will be de-escalated to GCQ from modified enhanced community quarantine (MECQ) during the same period.

Public spending jumps in Aug

The national government’s budget deficit in August rose by threefold from the same period last year, amid a significant jump in public spending, the Bureau of the Treasury (BTr) reported. The BTr said in a statement the deficit for August hit P120.9 billion, 201.78 percent up from the P40.1 billion in the same month in 2020. Expenditures surged 34.2 percent, outperforming the 6.59 percent growth in revenue performance. As of end-August, the aggregate budget deficit reached P958.2 billion, 29.36 percent higher than the 2020 comparable figure of P740.7 billion, and is at 52 percent of the P1.86 trillion revised 2021 program.

RCEP ‘on track’ for 2022 implementation

The Asean community and its free trade agreement (FTA) partners are on course to enforce one of the biggest economic trade pacts by early next year, the Department of Trade and Industry (DTI) said. Trade Secretary Ramon Lopez said the parties of the Regional Comprehensive Economic Partnership (RCEP) are looking forward to implementing the mega trade deal, as this will facilitate further cross-border business activities.

Duterte limits use of face shields to ‘closed, crowded’ areas

Filipinos are no longer required to wear face shields outdoors, President Rodrigo Duterte announced. Duterte made the pronouncement, as he approved the recommendation of the Technical Advisory Group (TAG) to limit the use of face shields to the so-called “3Cs,” which refers to “closed and crowded” spaces, and activities that “promote close contact.” Duterte also ordered that the implementation and guidelines on the latest policy on use of face shield be done “immediately.”

OCTA tags 5 provinces as ‘areas of concern’

While the coronavirus disease (COVID-19) condition in Metro Manila is slowly improving, the independent OCTA Research yesterday identified five provinces as “areas of concern” due to their “critical” levels of average daily attack rates and intensive care unit (ICU) utilization rates. OCTA said the national government should give extra attention to Isabela, Cagayan, Benguet, Laguna and Bataan, which it tagged as “provinces of major concern.” The group said the average daily attack rate per 100,000 population in Isabela is at 36.43, Cagayan at 37.79, Benguet at 53, Laguna at 25.69, and Bataan at 30.25.

ADB keeps growth forecasts for PH

According to the Asian Development Outlook (ADO) 2021 Update, the ADB has maintained its forecast for the Philippines’ gross domestic product growth at 4.5 percent in 2021 and 5.5 percent in 2022. The report noted signs of a gradual recovery in the country’s economy, with the upturn in domestic demand and favorable external trends aligned with the ADO’s projections announced in April. The multilateral agency said the main risk to the outlook is the spread of newer, contagious COVID-19 variants, which may result in the return of stricter containment measures and stall economic activity.

Senate warned against keeping telecoms as public utility

Local business groups are asking the Senate to refrain from retaining the foreign equity restriction in the transportation and telecommunications sectors, joining foreign chambers in opposing such proposals. Senate Bill 2094 seeks to amend the Public Service Act (PSA), changing the definition of public utilities to allow more foreign investment in telecoms and transport. The Constitution limits foreign ownership in public utilities to 40%. The business groups, led by the Philippine Chamber of Commerce and Industry (PCCI), expressed concern over the potential retention of the status of telecoms, transport, and power generation as public utilities.

DOE moves to create PHL strategic petroleum reserve

The Department of Energy (DOE) has moved to lessen the country’s dependence on imported crude oil and finished petroleum products with the issuance of a circular that seeks to establish the Philippine Strategic Petroleum Reserve Program (PSPRP). The new DOE circular, meanwhile, serves as the implementing guidelines for the establishment of the PSPRP, with the PNOC and DOE jointly implementing the program. Through the circular, the DOE seeks to establish a government-owned reserve of crude oil, finished petroleum products and biofuel to be utilized in the event of a severe international supply interruption or to implement the Targeted Fuel Relief Program.

Retail trade measure seen to hurt MSMEs

The measure that seeks to lower the minimum investment hurdle for foreign retailers to P25 million would likely bring in competition that could damage many local small businesses, a retailers group said. Congress approved the Bicameral Conference Committee report on the conflicting provisions of Senate Bill No. 1840 and House Bill No. 59, which amends the 20-year-old Retail Trade Liberalization Act (RTLA). “With the small minimum amounts, our MSME (micro-, small-, and medium-sized enterprises), will be the most affected by foreign competition, from foreigners already in the country, and from small informal retailers from outside the country,” Philippine Retailers Association Vice-Chairman Roberto S. Claudio said 

DILG appeals for people to wear their vaccination cards when going outside

An official of the Department of the Interior and Local Government is asking the public to not just bring their vaccination cards with them whenever they go out, but to wear them on lanyards around their neck to make it easier to check a person's vaccination status. DILG undersecretary Martin Diño said he would make a request to the Inter-Agency Task Force in charge of the pandemic response so it could be enforced in all barangays.

BSP regulations to support post-pandemic economy, Diokno says

The Bangko Sentral ng Pilipinas (BSP) said it will continue supporting the post-pandemic economy through enabling regulations that will encourage investments and infrastructure projects. Central bank officials have said their sandbox approach to regulating digital financial firms allows them to be more flexible and open, rather than stifling potential players. This is reflected in the BSP’s approval of three digital bank licenses to foreign entities — including Tonik Digital Bank, Inc. (Philippines) and UNObank which both have Singapore-headquartered parent units, and GoTyme which jointly is owned by the Gokongwei Group and Singapore fintech firm Tyme.

COVID’s economic cost to hit P41T

Socioeconomic Planning Secretary Karl Kendrick T. Chua said the cost of the pandemic and quarantines on society is estimated to have reached P4.321 trillion in 2020. This is measured through the net present value (NPV) terms, or the difference between the present value of inflows against the value of outflows for a certain period of time. The economic cost of the pandemic is estimated to rise by another P37.044 trillion over the next 10 to 40 years in NPV terms, mainly due to the projected heavy losses in private investments and human capital gains. Mr. Chua said the 40-year period is equivalent to the average working life of a Filipino from age 22 to 62. He said NEDA conducted the study for six months starting January.

Covid-response tweaks in budget pitched

Economist-Lawmakers said amendments should be introduced in the 2022 General Appropriations Bill (GAB) to increase the allocation for Covid-19 response. Albay Rep. Joey Sarte Salceda, sponsor of the 2022 GAB and Marikina Rep. Stella Luz Quimbo both agreed that when the Executive Department crafted the budget, the more contagious Delta variant was not yet detected in the country. In her interpellation, Quimbo said P350.2 billion or only 6.72 percent of the proposed P5.204-trillion GAB is allocated for Covid-19 response. Of this allocation, Quimbo said only P48.8 billion is for Covid-19 reponse of the Department of Health (DOH).

Innovation index: PHL slips, but progress cited

Despite scoring better, the Philippines slipped by one notch to 51st rank out of 132 economies in the latest Global Innovation Index (GII) report, amid the challenges posed by Covid-19 and decreasing budget for research and development (R&D), the online launching of the report in the country disclosed. According to the GII 2021 report prepared by the United Nations’ World Intellectual Property Organization (WIPO), the country scored 35.3, which is an improvement from last year’s 35.19. The current ranking, albeit lower, is better than 54th position in 2019 survey.

Slowdown in rise of COVID-19 cases – experts

There is a slowdown in the increase of COVID-19 cases in the country, experts said, but the public must continue to observe health protocols as the health care system remains overstretched. OCTA Research fellow Fr. Nicanor Austriaco warned that the decision to loosen quarantine restrictions in the capital could trigger another surge if people would become complacent. The government is piloting the alert level system with granular lockdowns in Metro Manila to further reopen the economy amid the pandemic. The capital is under Alert Level 4, the second highest level, from Sept. 16 until the end of the month.

40% vax target per country hangs – World Bank, WHO, WTO

The target of inoculating at least 40 percent of the population of every country hangs in the balance as vaccine access remains limited, threatening global economic recovery, international organizations announced. While the Philippines had allocated funds to procure vaccines needed to achieve herd immunity, the problem lies in the supply and the arrival of the jabs. The target of vaccinating 70 percent of the Philippine population before the year ends now looks far fetched, with the Department of Health admitting that this may be achieved by the first quarter of 2022.

PH economy to emerge from pandemic stronger, Diokno says

The Philippines will emerge from the coronavirus pandemic with an economy better than the one it had entering it, thanks to a slew of reform measures being undertaken by the government, according to the central bank. Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno shared how the country is striving to achieve a post-COVID economy that is also more technologically advanced, and more inclusive than before. Diokno noted that the Philippines was already set to graduate from lower to upper middle-income status right before the pandemic and, as such, was was keen to regain its momentum in the post-COVID era.

COVID-19-related insurance claims hit P 4.35B in H1

Claims related to COVID-19 paid out by the insurance industry during the first half of 2021 reached P4.35 billion, of which the bulk were disbursed by life insurers as well as health maintenance organizations (HMOs) to their customers. The Insurance Commission (IC) said that of the first-half payouts, 47 percent or P2.06 billion were released by HMOs. Life insurance firms paid P1.98 billion in claims, or 46 percent of the end-June industry total. Nonlife insurers disbursed P119.1 million in claims, while mutual benefit associations paid P191.7 million, IC data showed. The insurance sector received a total of 238,551 COVID-19-related claims from clients from January to June.

House passes bill imposing 12% VAT on digital transactions

The House of Representatives has passed on third and final reading a bill imposing a 12% value added tax (VAT) on digital transactions. 167 congressmen voted to pass House Bill No. 7425. Six voted against the measure while one abstained. Covered in the imposition of the 12% VAT on digital transactions are subscription-based video and audio streaming services, online advertising services, and other online electronic services.

Neda sees return of jobs lost to pandemic

The National Economic and Development Authority (Neda) sees the shift to granular lockdowns coupled with speedier mass vaccination reviving the jobs shed amid the prolonged COVID-19 pandemic. Neda said the new quarantine policy, which would be piloted in Metro Manila before its nationwide implementation, “aims to bring back jobs lost due to blanket restrictions.” The latest government data showed that the unemployment rate eased to 6.9 percent in July, the lowest since the pandemic struck in April 2020, but still above prepandemic levels.