ECCP at Work

Govt’s borrowings down 6% in 2021

The national government’s gross borrowings in 2021 declined by 5.91 percent amounting to P2.58 trillion, data released by the Bureau of the Treasury (BTr) showed. According to the latest cash operations report posted on the BTr website, the government’s gross borrowings in 2021 was lower than the P2.74 trillion raised a year ago. It is also well within the full-year program of P3.07 trillion. Gross domestic borrowings in 2021 accounted for the bigger chunk amounting to P2.01 trillion, which inched up 0.59 percent versus the year ago level of P2 trillion.

Volatility in fuel prices boon for RE push

Asian economies must continue pursuing renewable energy (RE) projects especially after seeing the effects of the Ukraine-Russia war on fuel prices, according to the Institute for Energy Economics and Financial Analysis (IEEFA). Sam Reynolds, energy finance analyst at IEEFA, said among the immediate effects of the geopolitical tension are for global energy prices to remain high and volatile for the near term; slower recovery from the pandemic due to rising commodity prices; and the expected renewed interest to invest in more fossil fuel infrastructures to benefit from rising prices.

Committee to craft plan under relaxed FIA

The Department of Trade and Industry (DTI), tasked to lead the Inter-Agency Investment Promotion Coordination Committee (IIPCC) to be created under the newly-enacted amendments to the Foreign Investments Act (FIA), will craft a medium to long term marketing plan to realize the goal of the law. Ceferino Rodolfo, DTI undersecretary and Board of Investments (BOI) managing head, said the Foreign Investment Promotion and Marketing Plan, which the IIPCC will use to promote and facilitate efforts to attract more foreign investments, is anchored on the “Make It Happen” promotions strategyadopted by the BOI and all the investment promotion agencies. “It will have priority sectors and country markets,” Rodolfo said.

PH-EU engagement to continue, says Lopez

Following the conclusion over the weekend of an official monitoring mission of the European Union (EU) to the Philippines in relation to the latter’s tariff-free privileges, Secretary Ramon Lopez of the Department of Trade and Industry (DTI) said the country’s engagement with the bloc will continue. “The DTI and concerned agencies had good productive meetings with the EU GSP+ (Generalized System of Preferences +) monitoring mission. Those meetings served as good opportunities to engage with the monitoring mission, and provide and clarify issues relative to the country’s compliance with the 27 international core conventions on human rights, labor, environment, and good governance. Facts and information were provided. We highly appreciate the openness and willingness of the EU mission to work with us on this endeavor,” said Lopez in a text message on his assessment of the monitoring mission on February 28 to March 8.

Philippines remains on FATF ‘gray list’

The Philippines remained on the “gray list” of jurisdictions subjected to increased monitoring for “dirty money” risks, according to the Financial Action Task Force (FATF). The global financial crime watchdog in a statement on Friday said the Philippines still needs to implement measures to address risks related to casino junkets, nonprofit organizations, and beneficial ownership. However, the FATF acknowledged the Philippines’ progress in combating financial crimes in terms of policies related to sanctions against terrorism financing and increasing manpower of the Anti-Money Laundering Council (AMLC).

Gov’t debt hits record P12.03T

The National Government’s outstanding debt hit a record P12.03 trillion at the end of January after it got another zero-interest loan from the central bank and borrowed locally, according to data from the Treasury bureau. The end-January debt level rose by 16.5% from a year earlier and by 2.6% from December. About 70% of the debt stock were obtained locally, while the rest came from overseas.  Domestic debt rose by 2.4% to P8.37 trillion from a month earlier and by 14.2% from a year ago.  In a stateent, the Treasury bureau traced the monthly increase to domestic borrowings worth P197.04 billion, including P300 billion in provisional advances from the Bangko Sentral ng Pilipinas (BSP).

PEZA lures nearly P808-B investments under Duterte admin

The Philippine Economic Zone Authority (PEZA) has approved PHP807.83 billion investments since September 2016. In a statement Friday, PEZA director general Charito Plaza reported that there were 88 special economic zones (SEZ) registered during the Duterte administration. These numbers contributed to the total investment approvals in the investment promotion agency since its inception in 1995 amounting to PHP4.04 trillion, and now with a total of 415 SEZs across the country. PEZA has 4,665 locators to date. Jobs created within the economic zones reached more than 1.78 million.

PH gives highest perks for new tech investments

The Philippine government, through the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, is giving generous fiscal incentives for investments in new technologies. Speaking at a forum of the European Chamber of Commerce of the Philippines (ECCP) on Friday, Department of Trade and Industry (DTI) Undersecretary Rafaelita Aldaba said the CREATE Law is aligned with the agency’s industrial policy by promoting investments that will push for a fourth industrial revolution.

Delayed impact expected from economic liberalization bills

The benefits of economic reforms such as amendments to the Foreign Investment Act, Retail Trade Liberalization Act, and Public Service Act will not be immediately felt, an economist said. University of Asia and the Pacific Senior Economist Cid L. Terosa said in an e-mail interview with BusinessWorld that other conditions need to be in place before the economic reforms gain traction. “These conditions include the following: strong economy with growth potential; excellent transport, physical infrastructure, and business support conditions; pro-investment political leadership; and local government’s capability to facilitate investment and ensure smooth and easy implementation of investments,” Mr. Terosa said.

BSP chief says PHL credit rating downgrade unlikely

The Philippines’ investment grade rating is unlikely to be downgraded as the country’s outstanding debt remains “manageable,” the central bank governor said. “[T]he likelihood that the Philippines’ ratings will be downgraded by rating agencies (is) nil,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a Viber message to reporters. He said the country’s outstanding public debt is still manageable despite reaching a record P12.03 trillion as of end-January, as economic growth could outpace the increase in debt amid the recovery from the pandemic. “At its current ratio, the public debt is quite manageable. The country can easily outgrow its debt since we expect the Philippine economy to grow much faster than its debt,” Mr. Diokno, a former Budget secretary, said.

House members back fuel excise tax suspension

House members on Monday backed the proposal to suspend the fuel excise tax as a stopgap measure to cushion the impact of non-stop fuel price hikes. This would mean amending a portion of the Tax Reform for Acceleration and Inclusion law that imposed an excise tax of ₱10 per liter for gasoline, ₱6 for diesel, ₱5 for kerosene, and ₱3 per kilogram for cooking gas or liquefied petroleum gas. The tax suspension is among measures taken up during the House fuel crisis ad hoc committee meeting, composed of the committees on economic affairs, ways and means, transportation, and energy.

Govt targets 1.8 million people in next National Vaccination Days set for March 10-12

The government will hold its next mass COVID-19 vaccination drive on March 10 to 12 targeting 1.8 million people, vaccine czar Carlito Galvez, Jr. said on Monday. Galvez said the fourth phase of the National Vaccination Days dubbed “Bayanihan, Bakunahan Part IV” will be another three-day campaign aimed at inoculating those aged 12 and above in all regions. It was clarified, however, that the local government units may still vaccinate 5- to 11-year-olds but they would not be counted as part of the accomplished target. “The accomplishment will be counted as part of the cumulative, however, for the (National Vaccination Days), only the accomplishment for the 12 years and above will be counted,” Galvez said in his presentation during President Rodrigo Duterte’s Talk to the People.

‘Alert 1 for 2022 vital to sustaining economic activity’

The country needs to maintain the Alert Level 1 status for the rest of the year to promote economic activity and prepare the economy for the effects of the Ukraine-Russia conflict, presidential adviser for entrepreneurship Joey Concepcion said. “We can’t stop the war in Europe, but we can help the country brace for crisis,” Concepcion said in a statement yesterday, as he noted that sustaining the current increase in local economic activity would help the country weather the impact of the tensions between Russia and Ukraine and the record rise in the country’s debt.

Surging oil a key risk to PHL — Diokno

Russia’s invasion of Ukraine may continue to drive oil prices even higher, which could push inflation beyond the target range for a second straight year, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said. “The main channel through which the Russia-Ukraine war could affect the Philippines is higher oil prices,” Mr. Diokno said in a Viber message to reporters late Sunday evening. “Based on the BSP’s oil price simulation, inflation could settle above the target range of 2% to 4%, only if crude oil prices average higher than $95.00 per barrel in 2022 and 2023,” he added.

Tighter BOT guidelines eyed

Agencies proposing public-private partnership (PPP) projects could be required to submit complete financial documents and limit variations to contracts, a draft of the revised rules implementing the Build-Operate-Transfer (BOT) Law showed. In a March 2 document, the National Economic and Development Authority (NEDA) and the PPP Center detailed the proposed changes to the implementing rules and regulations of Republic Act No. 6957 or the BOT Law. This law authorizes the private sector to finance, build, operate, and maintain infrastructure projects.

Shipping costs may rise by as much as 25%, industry group warns

Shipping costs may rise as much as 25% as global oil prices continue to skyrocket amid the Ukraine-Russia conflict, according to an industry group. Philippine Liner Shipping Association (PLSA) President Mark Matthew F. Parco said that fuel is usually 40% to 50% of vessel cost. With Brent crude now at $130 per barrel, up from $80 per barrel at the start of the year, the PLSA expects that other operating expenses, aside from the vessel cost, will also be affected. “Higher energy prices will affect other costs such as drydocking, spare parts, trucking, etc.,” Mr. Parco said during a House committee hearing on the fuel crisis on Monday.

NEDA weighs impact of fare hike on inflation

A peso increase in transport fares could add 0.3 percentage point (ppt) to inflation, National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon told the hearing. “For sure there will be an impact on inflation,” she said in mixed English and Filipino, adding that economic managers are studying other potential inflation triggers. “We are looking at other triggers on inflation coming from — God forbid — interest rate hike, that sort of thing,” Ms. Edillon said. Party-list Rep. Sharon S. Garin was asking her how big an impact the 0.3-ppt increase in inflation would have on the Philippine economy. “What are the risks of all these prices going up — pork and other basic needs — will those highly impact our economy, if we increase it by P1?” she asked, referring to transport fares.

ADVOCACY CORNER

JFC Meeting with Chief Justice Alexander G. Gesmundo | 3 March | Photo

The Joint Foreign Chambers held a hybrid meeting with Chief Justice Alexander G. Gesmundo and Associate Justices Jose Midas P. Marquez, Antonio T. Kho, Jr., Rodil V. Zalameda, Jhosep Y. Lopez, and Japar B. Dimaampao. Apart from the proposed use of artificial intelligence in modernizing the transcription process, the Chief Justice discussed the launch of the Case Decongestion Program in April last year; the issuance of a Resolution approving several amendments to the Internal Rules of the Supreme Court; Justice Real Time: A Strategic Plan for Judiciary Innovations 2022-2026; the Revised Guidelines on Submission of Electronic Copies of Supreme Court-Bound Papers Pursuant to the Efficient Use of Paper Rule; and the launch soon of the Judiciary e-Payment Solution arranged with Union Bank. Read more.