ECCP at Work

Economy grew 5.6% in 2021

The economy expanded by 5.6 percent in 2021, a rebound from the pandemic- and lockdown-induced 9.6 percent contraction in the previous year, the Philippine Statistics Authority reported yesterday, Jan 27. The economy’s growth last year was slightly above the government’s revised growth assumption of 5 to 5.5 percent for 2021. The expansion in the full year was bolstered by the 7.7- percent growth in the fourth quarter, which is a reversal of the 8.3 percent contraction in the same period in 2020.

PH economy grows 7.7% in Q4 2021

Economic growth sped up in the fourth quarter amid efforts to further reopen the economy, Philippine Statistics Authority figures released Wednesday showed. National Statistician Dennis Mapa said gross domestic product (GDP) grew 7.7% last October to December, outpacing the 8.3% plunge during the same period in 2020 and 6.9% pace in the third quarter.

Q3 GDP revised downwards to 6.9%

The Philippines’ economic performance for the third quarter of 2021 was revised downward to 6.9 percent, the Philippine Statistics Authority (PSA) reported yesterday. The third quarter figure is 0.2 basis points lower versus the earlier announced preliminary estimate of 7.1 percent. The PSA said major contributors to the downward revision were financial and insurance activities, from 6.4 percent to 3.9 percent; professional and business services, from 11.5 percent to 10.6 percent; and real estate and ownership of dwellings, from 4.7 percent to 3.8 percent.

AMRO sees PHL growing slower than expected

The Philippines will likely grow by 6.2% this year, slower than previously expected as the service-driven economy remains vulnerable to lockdowns, ASEAN+3 Macroeconomic Research Office (AMRO) said. In its latest regional economic outlook released on Tuesday, AMRO said the Philippines’ gross domestic product (GDP) will expand at a slower pace than the 6.7% projection set in October last year. This is also lower than the government’s 7-9% target for 2022.

IMF keeps Philippine growth forecast for 2022

The International Monetary Fund (IMF) kept its growth forecast of 6.3% for the Philippines this year, saying the impact of the Omicron variant would likely affect only the first three months. “Even though the rapid spread of the Omicron variant and new quarantine measures in the first quarter of 2022 are expected to slow the recovery, strong growth is nevertheless projected for the remainder of 2022, as vaccination proceeds further, policy measures remain appropriately supportive, and private sector confidence improves,” IMF Representative to the Philippines Ragnar Gudmundsson said in an e-mail.

DOH says 'stealth' Omicron detected in Philippines

The country has detected the “stealth” sub-lineage of the highly transmissible Omicron variant, the Department of Health said Tuesday. The “stealth” Omicron or BA.2 is predominant in most regions in the Philippines, according to DOH Undersecretary Maria Rosario Vergeire. It is more common among local cases in every region,” she said. The other sub-lineage, BA.1, has been detected in eight regions, and is the most common version of Omicron in Bicol region and among returning overseas Filipinos.

Central bank to keep close eye on risks to inflation

Inflation may remain elevated this year due to higher commodity prices and the continued pork shortage, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said. The risk to the inflation outlook is slightly on the upside for 2022, he said. “These risks are mostly associated with a prolonged shortage in domestic pork supply, along with higher global commodity prices due to improving global demand amid lingering supply-chain bottlenecks,” Mr. Diokno said in an open letter to President Rodrigo R. Duterte dated Jan. 18.

IMF slashes global growth forecast due to Omicron

The International Monetary Fund (IMF) on Tuesday slashed its global growth forecast for 2022, noting that new variants of the coronavirus disease 2019 (COVID-19) may prolong the pandemic. “The global economy enters 2022 in a weaker position than previously expected,” the multilateral lender said in its World Economic Outlook Update released on Tuesday, citing the impact of the Omicron variant that has rapidly spread around the world.

WB, Neda push full opening of classes to address worsening learning poverty

The World Bank has urged fully opening schools while reducing COVID-19 transmission in academic institutions to address learning poverty aggravated by the prolonged pandemic in low- and middle-income countries like the Philippines. In a text message on Tuesday, Socioeconomic Planning Secretary Karl Kendrick Chua said the full opening of schools would be doable in the Philippines.

SEC plans rules for sustainability, ESG-focused funds

The Securities and Exchange Commission (SEC) drafted guidelines for investment companies aiming to qualify as sustainable and responsible investment (SRI) funds or for any financing firms that consider environmental, social, and governance (ESG) factors for investments. In a draft memorandum circular published on Jan. 19, the SEC said the rules aim to “provide guidance on the disclosures and reporting of investment companies classified as [SRI] funds and their fund managers.”

PH confirms 'stealth Omicron' cases, but no significant difference with other sub-lineage

The country has detected cases of the "stealth Omicron" sub-lineage, the Department of Health confirmed on Tuesday. Health Undersecretary Maria Rosario Vergeire said the stealth Omicron or BA.2 is the predominant sub-lineage in most regions based on the latest genome sequencing run. She said this sub-lineage is more common in local Omicron cases detected in the country. The other sub-lineage, the BA.1, has been detected in 8 regions and it is now predominant in the Bicol Region and among returning overseas Filipinos. The official stressed there is no significant difference in the "clinical presentation" between the two Omicron sub lineages.

Bigger spend needed for net-zero world than assumed

The extra amount the world must spend each year to create a “net-zero” emissions economy is equivalent to half all profits currently generated by companies globally, consultancy group McKinsey estimated in a report on the energy transition. It said its calculation was much higher than most other estimates by economists but stressed such investments could be lucrative and the long-term costs of not doing enough to tackle climate change would be greater. “We find that the transition would be universal, significant, and front-loaded, with uneven effects on sectors, geographies, and communities, even as it creates growth opportunities,” it concluded.

Despite Q4 rebound, agri slumps in ’21

Agriculture output rebounded in the fourth quarter of 2021, but full-year production contracted further as the African swine fever (ASF) continued to drag the livestock sector. Agriculture production rose 0.6 percent last quarter as improvements were recorded in crops, poultry and fisheries subsectors, data from the Philippine Statistics Authority showed. This is a reversal of the 3.8 percent decline recorded in the fourth quarter of 2020.

‘COVID, equity limits bar investments’

Investment promotion agencies (IPAs) have identified the coronavirus pandemic, high costs of doing business and foreign equity restrictions in the Philippines, among others, as the main barriers to foreign investments in the country, according to a statement released by the Department of Finance (DOF) yesterday. In addition to the three main barriers to investment, some IPAs also stated in their recent presentations to the Fiscal Incentives Review Board (FIRB) the lack of basic utilities and quality internet connectivity as a hindrance to investments.

Workers given 30 days to get jabs

The government yesterday temporarily lifted travel restrictions for partially and unvaccinated workers in the National Capital Region (NCR) and gave them 30 days to be inoculated in time for the full implementation of the government’s “No Vaccination, No Ride” policy in public transportations next month. Artemio Tuazon Jr., undersecretary for administrative services of the Department of Transportation (DOTr) and a member of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF), said the 30-day window period was a joint decision of the DOTr, Department of Labor and Employment, Department of Interior and Local Government and the Department of Health.

OCTA: Metro Manila COVID-19 reproduction number drops to 0.63

Metro Manila’s COVID-19 reproduction number, or the number of people that can be infected, dropped to 0.63 from 1.20 early this week, OCTA Research said on Wednesday. According to health experts, the reproduction number should be at one or less to say that community transmission of COVID-19 is decreasing. OCTA Research fellow Guido David tweeted that new COVID-19 cases in the capital region may fall below 500 by Feb. 14.

Joint Foreign Chamber joins the call for RCEP Senate concurrence [mention]

The Joint Foreign Chambers (JFC) urged the Senate to concur the ratification of the Regional Comprehensive Economic Partnership (RCEP) agreement in a statement released Monday, 24 January 2022. Lars Wittig, president of the European Chamber of Commerce of the Philippines (ECCP) highlighted that RCEP ratification would benefit the Philippines because of its complementarity with other economic reform measures pursued by the current administration. “Ratification of RCEP will complement other welcomed economic reforms launched by the administration with the amendments to the Foreign Investment Act, Retail Trade Act, and Public Services Act to show the world that the fast-growing Philippine economy is an increasingly attractive location for new and expanding foreign investment. Ratification of RCEP will be another step forward to benefit the Philippines.”

Senate bill requiring companies to manage plastic waste OK'd on 2nd reading

The Senate approved on second reading a bill that seeks to require certain companies to implement management programs for plastic packaging waste. On Thursday, Senate Bill 2425 was approved on its second reading. The bill aims to institutionalize the Extended Producer Responsibility, or EPR system, in the Ecological Solid Waste Management Act. The EPR is a policy in which companies are expected to be responsible for the “proper and effective recovery, treatment, recycling or disposal of their products after they have been sold or used,” with the objective of reducing plastic packaging waste and improving their recyclability or reusability.

Easing of alert levels ‘imminent’: NEDA

The National Economic and Development Authority (NEDA) said the lowering of alert level is “imminent” in the coming weeks, as the number of new coronavirus disease 2019 (COVID-19) cases is showing a gradual decline. Karl Kendrick Chua, socioeconomic planning secretary, said with a shift from alert level 3 to alert level 2 in the National Capital Region (NCR) plus area, a P3 billion per week improvement in gross value added can be expected.

Trade deficit widens to 3-year high

The country’s trade deficit widened to a three-year high in 2021 amid the gradual reopening of the economy, data released by the Philippine Statistics Authority (PSA) showed. According to the PSA, the trade deficit in 2021 stood at $43.13 billion, the highest since 2018 of $43.5 billion. Imports surged 31.1 percent to $117.8 billion, a new high, reversing the 19.5 -percent drop in 2020 to $89.81 billion. Exports also rose by 14.5 percent to $74.6 billion, also a new record high and reversing the 8.1 percent decline in 2020 to $65.21 billion.

To sustain growth, government pins hopes on 2 priority bills

Malacañang is banking on the passage of the administration’s two pieces of priority economic legislation to sustain the country’s economic growth this year. The administration aims to keep the momentum of the economic growth with the passage of the amendments to the Public Service Act, “which would open key sectors to foreign investments, subject to safeguards,” according to Acting presidential spokesman Karlo B. Nograles. Another crucial bill the Palace wants to pass is the Livestock Development and Competitiveness Bill, which is expected to boost the “competitiveness of the livestock, poultry and dairy sectors.”

Alert Level 3 takes effect in 6 more areas on Friday

Stricter quarantine measures will take effect starting Friday in six areas, which were placed under Alert Level 3 by the Inter-Agency Task Force for the Management of Emerging Infectious Disease (IATF). Acting presidential spokesperson Karlo B. Nograles said the new classification will cover Palawan, Camiguin, Davao Occidental, Dinagat Islands, Tawi-Tawi and Sulu. The said areas were previously under Alert Level 2. “The said escalation shall take effect on Friday, January 28, 2022 until February 15, 2022,” Nograles said in a brief statement last Thursday.

Reopen PHL to vaccinated international travelers–DOT

The Philippines is ready to accept foreign tourists. That’s according to Tourism Secretary Bernadette Romulo Puyat, who said she was proposing the reopening of the country’s borders to vaccinated international travelers once more. “Yes, we’re ready to open [to foreign tourists] because we know Omicron is very mild, especially if you’re vaccinated and boostered,” she said in a radio interview on Wednesday.

‘Covid variants, high prices risks for PHL’

The uncertainty brought by possible new variants of Covid-19 and inflation pose the greatest risks for the Philippines this year, according to the National Economic and Development Authority (Neda) and local economists. On Thursday, the Philippine Statistics Authority (PSA) disclosed that the economy grew 5.6 percent last year and posted a 7.7-percent growth in the fourth quarter of 2021.

Growth, shipping woes seen to widen trade gap

The country’s expected positive economic performance this year and other concerns such as the shipping crisis will likely widen the country’s trade deficit further, according to local economists. The Philippine Statistics Authority (PSA) reported on Thursday that the country’s exports and imports grew 14.5 percent and 31.1 percent, respectively. The same report showed that the Philippines recorded a trade deficit of $43.34 billion in 2021. This is the highest since 2018 when the deficit reached $43.53 billion. “I expect the deficit to widen this year as the country gears up for accelerated growth,” University of Asia and the Pacific (UA&P) Senior Economist Cid L. Terosa told the BusinessMirror on Thursday, January 27.

PH again at bottom of Bloomberg COVID-19 resiliency ranking

The Philippines is again "the worst place to be" during the pandemic, according to Bloomberg's COVID-19 resilience ranking. For the third time in the past five months, the country ranked the lowest out of 53 economies in handling the global health crisis. The Philippines' resiliency score was at 48.3 this month — down from 52 in December, when it slightly climbed to the 50th spot.

GDP up 5.6%: Door to recovery fully open–Neda chief

The Philippine economy rebounded at a surprisingly fast pace in 2021 after the easing of COVID-19 quarantine rules in the fourth quarter reopened more business activities, got more people back to work and propped up consumer spending. “Our door to economic recovery is fully open. The numbers for 2021 show an economy trying to break out,” Socioeconomic Planning Secretary Karl Kendrick Chua said on Thursday, Jan. 27. In a report, ING’s senior Philippine economist Nicholas Mapa said the fourth-quarter turnout was “supercharged” by consumption, especially on leisure activities during the holidays.

Government temporarily suspends risk classification beginning Feb. 1

The government temporarily suspends the country risk classification beginning Feb. 1, acting presidential spokesperson Karlo Nograles says. This means there will be no distinction on travelers regardless of the COVID-19 risk of the point of origin.