ECCP at Work

Banks’ pandemic relief measures to stay in ’22

Regulatory relief provisions to support the banks’ response to the effects of the pandemic have been extended by at least one year, according to the Bangko Sentral ng Pilipinas (BSP). These relaxed measures, which were supposed to have expired last Dec. 31, include the temporary increase in the Single Borrower’s Limit (SBL) and the separate SBL for project finance exposures to 30 percent from 25 percent; and nonimposition of sanctions for breach in SBL by covered foreign bank branches, subject to conditions.

Ukraine crisis fallout: Slower global economic growth, higher consumer prices in PH

Just as economies worldwide were rebounding from the slump inflicted by COVID-19, Russia’s invasion of Ukraine would slow down economic growth, trade, and jack up global oil prices, think tanks said. In the Asia-Pacific region including the Philippines, still fragile economic recovery may be dampened by the war’s spillover effects on global supply of commodities, such that consumers should brace for higher prices of food items. In a Feb. 25 report, investment banking giant Goldman Sachs noted that the Russian military’s move towards Ukraine jacked up Brent crude oil prices above $100 per barrel last week, which it said will inflict near-term inflation pressures globally.

Amended Public Service Act to be signed soon–Salceda

The proposed new Public Service Act was transmitted on Monday to the office of President Duterte, who is expected to sign it soon, as the certified measure is deemed vital to economic recovery, House Committee on Ways and Means chairman Joey Sarte Salceda said. The Albay representative, principal author and sponsor of the measures amending the Public Service Act, said, “The reform is the most important economic reform since the CREATE Law,” adding, the reform “comes in handy as we are looking for growth that will not be debt-driven but investment-driven.”

Circular economy pushed as Philippines faces waste crisis

The Philippines is urged to establish policies and regulations on circular economy as the country is facing a waste crisis that may  worsen in the coming years. In a report, Tokyo-based Asian Development Bank Institute (ADBI), the multilateral lender’s think tank, said that transitioning to a circular economy could build better growth and create more value with fewer materials. At present, there is no integrated circular economy strategy or policy framework that exists in the Philippines.

Moody’s hikes forecast growth for Philippines to 7%

Moody’s Investors Service further raised its gross domestic product (GDP) growth forecast for the Philippines to seven percent this year, the lower end of the seven to nine percent expansion penned by economic managers. Moody’s senior vice president Christian de Guzman said the stronger-than-expected economic growth in 2021 would carry over into 2022. “We expect economic growth to accelerate further to seven percent in 2022, restoring the level of economic output to pre-pandemic levels and reflecting continued policy accommodation, the ongoing reopening of its economy – especially in light of the recent removal of quarantine requirements for international travelers that will support the recovery of the tourism sector – and the resulting improvement in the unemployment rate,” De Guzman said.

BSP invests in Asian Green Bond Fund

The Philippine central bank again redirected capital for sustainability initiatives by investing in the Asian Green Bond Fund of the Bank for International Settlements (BIS). Launched this year, the new fund will support green projects in the Asia-Pacific region. “The participation in the fund is expected to provide the BSP with an additional source of return and investment diversification that is consistent with our prudent approach to reserve management,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a statement on Wednesday.

Urban poor facing more disaster risk

The growing number of poor in the Philippines is facing more disaster and climate risks, emphasizing a need for targeted social interventions at the city level, a consultant’s report for the Asian Development Bank (ADB) said. Kristoffer B. Berse, public administration and governance professor at the University of the Philippines, said in a report on advancing inclusive urban development that social protection, health, and education interventions must be localized to address deprivation and disasters.

Counterfeit goods seizures in 2021 valued at record P24.9 billion

The government seized counterfeit goods valued at P24.9 billion in 2021, according to the Intellectual Property Office of the Philippines (IPOPHL). “Our National Committee on Intellectual Property Rights (NCIPR), which IPOPHL leads as acting chair with the Department of Trade and Industry (DTI) as the chair, has recorded its biggest seizure, with a record-breaking P24.9 billion worth of counterfeit goods seized from its inspection and raid operations last year,” IPOPHL Director General Rowel S. Barba said during a virtual briefing on Thursday.

Exporters urged to maximize FTAs to boost trade, investments

Filipino exporters are encouraged anew to maximize free trade agreements (FTAs) between Asean member-countries and trading partners to enhance trade and investment opportunities. But Jan Redmond Dela Vega of the Department of Trade and Industry-Bureau of International Trade Relations said that apart from markets of the United States and Japan, there is also potential in the Asean. “In terms of our performance and in terms of our agreements that are existing, we only have those in place which are the Asean FTAs. And in recent years, we see that the Asean market is also a very important component or very important trading partner of the Philippines…,” he said in a recent virtual forum.

PH to continue reforms despite leadership change: DTI

Department of Trade and Industry (DTI) Secretary Ramon Lopez has assured American businesses that the agency will continue reforms that will facilitate the growth of businesses and investments here. In a virtual economic briefing hosted by the Philippine Embassy in Washington DC Thursday evening, Lopez said the Philippines and the United States remain strong partners across many administrations in the past years. “With our national coming in the few months signaling the change in administration, I wish to assure all of you that our department, Department of Trade and Industry, will remain committed in continuing game-changing reforms and provide the assistance needed by the American businesses and investments to continuously grow and prosper in the Philippines,” he said.

IT-BPM estimated to have grown 8-12% in ’21; flexibility pushed

The Information Technology Business Processing Association of the Philippines (IBPAP) is seeking a more permanent scheme allowing work-from-anywhere to the industry, the top service export contributor to the economy. IBPAP president Jack Madrid told the Canadian Chamber of Commerce and Industry forum yesterday the Philippine IT-business process management (IT-PM) industry is estimated to have grown following global growth trajectory of anywhere from 7 to 8 percent and 8 to 12 percent in terms of revenues. Madrid said the group will present to the next administration the new roadmap 2022-2028 which will focus on the future of work in terms of work types, workplace and workforce.

PHL new energy capacity estimated at 7,911 MW by 2027

The Philippine energy system is expected to add capacity of 7,910.96 megawatts (MW) by 2027, with coal-fired plants accounting for 46.68%, natural gas 38.71%, renewable energy (RE) 11.39%, and facilities fueled by oil 6.67%. Even though the government has banned new coal-fired power plants, coal-fired projects whose approval was in process when the ban was announced will account for 3,685.40 MW, the Department of Energy (DoE) said. The biggest of these projects is Atimonan One Energy, Inc. and Meralco PowerGen Corp.’s ultra-supercritical AOE coal-fired power plant Unit 1, with 600 MW in installed capacity. 

NEDA watches impact of crisis on food prices

The National Economic and Development Authority (NEDA) is closely monitoring the impact of the Russia-Ukraine crisis on trade and prices of commodities such as food. “Trade and commodity prices are likely affected and the magnitude depends on the extent of the conflict,” Karl Kendrick Chua, NEDA secretary, told Malaya Business Insight yesterday. Asked what specific commodities the government is monitoring aside from oil, Chua mentioned food. Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in an email that supplies of some global commodities from Russia such as oil, natural gas and metals, and from Ukraine such as grains could be disrupted by the war and by the sanctions on Russia.

800K jobs eyed

The government is aiming to create 800,000 jobs and recover those lost due to the pandemic by the next quarter as the National Capital Region (NCR) and 38 other areas deescalate to Alert Level 1 on March 1. Trade Secretary Ramon Lopez in a text message to reporters said with the first batch of deescalation covering NCR and key cities and provinces, “we can hit about 500,000 (jobs) with all parts of the economy functioning.” When asked if the country is yet to recover the jobs lost due to the new coronavirus disease 2019, Lopez said “we are getting close to it.”

Inflation likely jumped 3.3% in Feb.

Inflation likely accelerated in February due to the spike in global oil and commodity prices after Russia’s invasion of Ukraine, analysts said. A BusinessWorld poll of 15 analysts yielded a median estimate of 3.3% in February, well within the 2-4% target set by the Bangko Sentral ng Pilipinas (BSP). If realized, it will be faster than the 3% in January, though slower than the 4.2% a year earlier. The Philippine Statistics Authority will release February inflation data on March 4.

January net inflow of hot money lowest in 5 months

The Philippines posted the smallest net inflow of foreign portfolio investments in five months in January, as a surge in coronavirus disease 2019 (COVID-19) infections dampened sentiment. Data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday evening showed hot money registered a net inflow of $14.6 million in January, 85% lower than the $97.92 million in net inflow in the same month in 2021. However, it was a turnaround from the $4.38 million in net outflow seen in December. The net inflow of speculative funds in January was also the smallest since the $11.51 million in August.

PH world’s 2nd leading IT-BPM delivery location

The Philippines is still the second leading information technology-business process management (IT-BPM) delivery location in the world in 2021, according to Trade Assistant Secretary Rafaela Aldaba, citing an Everest report. The Philippines was second to India anew in terms of the number of full-time employees (FTEs) in 2021, accounting for 17 to 18 percent of the 8 million FTEs worldwide, a chart presented by Aldaba at a forum hosted by the Canadian Chamber of Commerce of the Philippines. India accounted for 37 to 40 percent. In 2020, the Philippine IT-BPM sector had 1.352 million workers.

DTI encourages working on-site in Alert Level 1 areas to help revive economy

The Department of Trade and Industry (DTI) is encouraging workers to physically report for work in  areas under COVID-19 Alert Level 1. DTI Secretary Ramon Lopez told INQUIRER.net that working on-site would revive the economy. “[Work from home], optional and allowed. But encourage office workers to report physically,” Lopez said in a text message. “To revive  the economy, [reporting physically] brings people to [micro, small, medium enterprise] establishments around offices,” he added. Lopez reminded business owners, especially those in 3Cs (closed, crowded, close-contact) settings, to require customers to show proof of vaccination and maintain proper ventilation.

Palace clarifies vax rule on indoor campaign activities

Malacañang yesterday clarified that the Alert Level 1 rule requiring proof of full vaccination for those who will enter indoor venues for events related to the May 9 elections only covers pre-election activities. Under the guidelines for Alert Level 1 areas, persons aged 18 years and above will be required to present proof of full vaccination before joining mass gatherings or entering indoor establishments, including venues for election-related events. The Commission on Elections (Comelec) had previously said unvaccinated individuals would be allowed to cast their votes unless disqualified by law.

Nat’l ID now enough to access financial services

More Filipinos are expected to gain access to vital financial services following President Duterte’s order for government and private entities to accept the national identification or PhilID as enough proof of identity, thus enabling clients to make transactions, according to the Bangko Sentral ng Pilipinas (BSP). Additionally, the impending rollout of a digital version of the PhilID is expected to prompt more Filipinos to adopt and sign up for their national ID.

Calls mount for Congress special session on fuel prices

More House officials have appealed to President Duterte to call for a special session of Congress so that lawmakers can discuss measures to ease the impact of soaring oil prices triggered by Russia’s invasion of Ukraine. Deputy Speakers Bernadette Herrera, Rufus Rodriguez and Reps. Joey Salceda (Albay) and LRay Villafuerte (Camarines Sur) yesterday said they are supporting the initiative of Deputy Speaker Mikee Romero to convince Duterte to call for a special session. “I support the proposal of my colleagues for a special session. We have to act now before the cost of crude and domestic fuel prices rise further,” Rodriguez, who represents Cagayan de Oro City, said.

BPOs may lose WFH benefit

With the downgrade to Alert Level 1 of the National Capital Region (NCR) and 38 other areas in the country that encourages onsite work starting today, information technology-business process management (IT-BPM) companies may stand to lose their privilege of working from anywhere without diminution of their incentives. On the flipside, the Department of Trade and Industry (DTI) said bringing back workers to their offices will help revitalize small businesses in the vicinities of these places.

Level 1 adds P9.4B/week to economy

The government expects the economy, especially in the National Capital Region (NCR) and other highly urbanized areas, to generate at least P9.4 billion for every week that it is under Alert Level 1, Cabinet Secretary and acting presidential spokesman Karlo Nograles said yesterday. Nograles, co-chairman of the Inter-agency Task Force for the Management of Emerging Infectious Diseases (IATF), said the government also expects 170,000 less unemployed under Alert Level 1 within the next three months. He said a more detailed assessment on the impact of the Alert Level 1 on the economy will be reported by Social Planning secretary and National Economic and Development Authority director general Karl Chua to President Duterte during the Talk to the People address scheduled last night.

Travel bubbles proposed

The Philippines has the least restrictions on travel and tourism in Asia but still has a long way to get back the number of tourist arrivals to pre-pandemic levels. In a television interview, Secretary Bernadette Romulo-Puyat of the Department of Tourism (DOT) expressed hope for the entry of unvaccinated individuals and allow for the setting up of travel bubbles with countries that have similar restrictions as the Philippines’. Puyat said restrictions imposed by the countries of origin of foreign tourists deter travel. Puyat cited Korea, the country’s main market, requires returning citizens to undergo 7-day home quarantine.

Experts see PHL trade gap widening further

As the the US dollar continued to appreciate against the peso, local economists warned that the Philippines’s trade deficit could widen further as a stronger greenback leads to more expensive imports. On Monday, Bloomberg reported that the US dollar has appreciated against “every peer” due to the sanctions imposed against Russia. These sanctions have caused a surge in demand for the “world’s reserve currency.” Unionbank Chief Economist Ruben Carlo O. Asuncion said a weaker currency means more expensive imports for the country but is more lucrative for exporters. Overseas Filipino Worker remittances and the Business Process Outsourcing sectors could also be winners.

‘Import-sensitive’ firms may face supply disruptions amid Russia-Ukraine conflict

Listed Philippine firms importing raw materials and other products may be affected by the global supply chain disruption caused by the ongoing conflict between Russia and Ukraine. However, companies involved in banking, mining, and renewable energy sectors may see opportunities amid the crisis. “[Companies] who are import-sensitive will take a hit for the short term, there will be a knee-jerk reaction,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a phone call on Sunday.

Gov't finalizes more guidelines on F2F classes resumption

The government is finalizing the additional guidelines on the resumption of face-to-face classes in the country, particularly in areas under the most lenient Covid-19 Alert Level 1 status, Malacañang said Monday. Cabinet Secretary Karlo Nograles, also the acting presidential spokesperson, said there is an ongoing discussion between the Department of Education (DepEd), Commission on Higher Education (CHED), and Technical Education and Skills Development Authority (TESDA) regarding the new guidelines to be included for the reopening of physical or in-person classes. "So right now, tini-tweak pina-finalize kung ano iyong additional guidelines na ilalagay natin (we are just tweaking and finalizing the additional guidelines to be included) for face-to-face classes for basic education, higher education, and technical education," Nograles added.

APEC prepares for reopening travel

Asia-Pacific Economic Cooperation (APEC) economies are committed to the safe resumption of travel in the region by considering harmonization and interoperability mechanisms in a bid to facilitate the movement of people and reconnect business mobility in the Asia-Pacific. "Reconnecting the region is a priority, an urgent task for us all,” chair of the APEC Safe Passage Taskforce Cherdchai Chaivaivid said in a written statement issued by the Taskforce and received here on Monday. "Restarting cross-border travel will indubitably support economic recovery and at the same time, reemphasize APEC’s relevancy and efficiency in the midst of the ever-changing global landscape," he said.

January bank lending quickest in 19 months

Credit growth in January accelerated to its fastest rate in 19 months, as banks began lending more to consumers amid the looser mobility restrictions in the country. This also reflected the quicker pace of liquidity growth during the month. Data from the Bangko Sentral ng Pilipinas (BSP) released on Tuesday showed outstanding loans by big banks rose by 8.5% to P10.002 trillion in January from P9.217 trillion a year earlier. This was much faster than the 4.8% increase in December and marked the sixth consecutive month of expansion in outstanding loans. It was also the quickest growth rate since the 9.6% seen in June 2020.