ECCP at Work

Companies prep for back-to-office work

Companies and their employees are getting ready for normal brick-and-mortar office life. Business process outsourcing employee Jen Gonzales admitted that after two years of working from home, it will take some time for her to adjust to working back at the office. "I have reservations of course but it is what it is. As an advocate for the company, I have to support the company who supported us for two years," Gonzales said. “It's difficult to engage with one another virtually. You’re not totally aware of what the others are doing. At least this time we get to spend more face time with them," she added. Because traffic conditions have also returned to normal, some admit dreading the commute time, which is often longer than their onsite work.

PH trade deficit widened 63% in Jan

Foreign merchandise trade grew for the 12th-straight month in January, but the sustained surge in imports that outpaced exports widened the Philippines’ trade deficit, putting added pressure on the peso to further weaken against the US dollar. The latest preliminary Philippine Statistics Authority (PSA) report on external trade performance released on Friday showed that the value of January exports and imports combined climbed 20.1 percent year-on-year to $16.8 billion, reversing the 9-percent drop a year ago. Shipments of Philippine-made goods overseas rose 8.9 percent year-on-year to over $6 billion, a turnaround from the 4.4-percent decline during the same month last year.

Goldman Sachs cuts PH 2022 growth forecast

Investment banking giant Goldman Sachs has slashed its 2022 growth forecast for the Philippines to 6.9 percent from 7.9 previously, as global price shocks wrought by Russia’s invasion of Ukraine would hurt the import-reliant economy. In a March 10 report, Goldman Sachs Economics Research said that the Philippines, India, Singapore and Thailand were among “the most sensitive economies” to commodity price surges seen impacting on trade, current accounts, as well as economic growth in Asia. The Philippines suffered the second-biggest cut of 1 percentage point (ppt) in 2022 gross domestic product (GDP) growth projection among the 14 Asia-Pacific economies covered by the report—Singapore’s 1.1-ppt reduction to 4 percent was the largest.

Asean think tank sees 6.5 percent PH growth in 2022, 2023

The regional surveillance organization Asean+3 Macroeconomic Research Office (Amro) has upgraded its 2022 growth forecast for the Philippines to 6.5 percent from 6.2 percent previously, but urged the government to sustain support to sectors scarred by the prolonged COVID-19 pandemic. “Economic recovery in the Philippines is firmly on track—despite the recurrent waves of COVID-19 infections in 2021—and is expected to speed up following further relaxation of mobility restrictions and continued policy support,” Amro said in a statement on Friday (March 11). Amro’s latest assessment was based on its annual consultation with Philippine economic officials held online last Feb. 18 to March 8.

Government to extend Bayanihan vax drive

The government is eyeing to extend for another week the fourth round of “Bayanihan Bakunahan” in areas with low vaccination rates. Health Undersecretary and National Vaccination Operations Center (NVOC) chair Myrna Cabotaje admitted that the government finds it difficult to achieve the target of vaccinating 1.8 million more people nationwide. The vaccination output remained low in the Bangsamoro Autonomous Region in Muslim Mindanao and Mimaropa (Mindoro, Marinduque, Romblon, Palawan), with only 15,000 and 14,000 inoculated, respectively, during the first two days of the initiative.

Think tank sees inflation breaching 2 to 4% target

New York-based think tank Global Source Partners Inc. expects inflation to accelerate and breach the two to four percent target set by the Bangko Sentral ng Pilipinas (BSP) due to soaring global oil and food prices, as well as the weakening peso. Former finance undersecretary Romeo Bernardo, country analyst at GlobalSource, said in a commentary that more evident price pressures continued to emerge despite the steady inflation of three percent in February. “Notwithstanding the moderate February inflation print, inflation risks are high in light of surging global commodity prices and the many uncertainties associated with Russia’s invasion of Ukraine, including the impact of western sanctions on Russia,” Bernardo said.

ECONOMIC SCARS AND SHOCKS: COVID pushes back AmBisyon

As the pandemic sets the country back for several years in achieving its AmBisyon Nation 2040 goals, the Philippines is facing more economic shocks such as the looming global conflicts, future health threats, and the unavoidable effects of climate change, according to Arsenio Balisacan, chairman of the Philippine Competition Commission (PCC). In his speech at the induction ceremonies of the Economic Journalists Association of the Philippines on Friday, Balisacan urged the next administration to accelerate the momentum in economic reforms achieved during the current administration: the passage of critical measures such as the tax reform packages, the Ease of Doing Business Law, the Rice Tariffication Law, and the amendments to the Foreign Investment Act and the Retail Trade Liberalization Act.

PH waives P8.7B levies on vaccine imports

The Department of Finance (DOF) said its revenue office (RO) has processed a total of 254 applications for tax and duty exemptions for the import of coronavirus disease 2019 (COVID-19) vaccines worth P8.7 billion, as of end-December 2021. Antonette Tionko, DOF undersecretary, said these approved applications that were issued tax exemption indorsements (TEIs) were from the total of 276 such requests that were received from vaccine importers by the office last year. “The foregone revenues from these TEIs of P8.699 billion represent 37 percent of the P23.4 billion of the total tax and duty exemptions processed by the ROG (Revenue Operations Group) last year,” said DOF Assistant Secretary Dakila Elteen Napao of the ROG.

Debt service bill hits P1.2 trillion in 2021

The National Government’s debt service bill jumped by a fourth to P1.2 trillion in 2021 as amortization payments climbed, data from the Bureau of the Treasury (BTr) showed. The BTr said the government’s debt payments rose by 25% from P962.5 billion the previous year. Last year’s total was just under the P1.28-trillion debt service budget for 2021. In December alone, the debt service bill stood at P69.9 billion, down by 5% from the same month in 2020. Amortization payments accounted for 60.9% of the total debt service bill in December, after slipping by 11.9% to P42.66 billion.

Gov’t to foreign firms: Promote Filipino products

The Philippine Philippine government has called on foreign retailers to promote Filipino-made products in their shops under the implementing rules and regulations (IRR) of the amended Retail Trade Liberalization Act (RTLA). The IRR of the amended law was signed on March 9 by Trade Secretary Ramon M. Lopez, Socioeconomic Planning Secretary Karl Kendrick T. Chua, and Securities and Exchange Commission (SEC) Commissioner Emilio B. Aquino. On Dec. 10 last year, President Rodrigo R. Duterte signed Republic Act No. 11595 that amended Republic Act No. 8762 or the RTLA.

DOT hopes for full PH reopening to foreign tourists by April

The Department of Tourism (DOT) is hoping the Philippines could fully reopen its doors to more foreign tourists by April of this year. Currently, only fully vaccinated foreign leisure travelers from visa-free countries are allowed to enter the Philippines. "Right now, (the Philippines is) only for 157 visa-free countries but we are hoping that by April, we will be open to all foreigners,” Tourism Secretary Bernadette Romulo-Puyat said in an ANC interview Thursday. She said the recommendation to limit leisure travelers for visa-free countries, an easing of restriction that started last February 10, came from the Department of Foreign Affairs.

Govt wants to tap tariffs for inflation fight

The National Economic and Development Authority (Neda) aims to put in place lower tariffs for a number of key commodities in the soonest time possible to prevent a surge in prices. The Tariff Commission, an attached agency of the Neda, has already issued a notice for public hearing for lower tariffs and extended the effectiveness of low tariffs for a number of commodities. Based on the Neda’s proposal, tariffs can be maintained or lowered for coal, rice, pork, and corn in light of the war in Eastern Europe which involved countries supplying oil and wheat. “(We) hope we get them (lower tariffs) in place before they expire. For corn, (we want lower tariffs to be put in place) soonest public hearing done,” Neda Undersecretary for Regional Development Mercedita A. Sombilla told BusinessMirror over the weekend.

Approved foreign investment pledges hit P192B

The Department of Finance (DOF) said the government approved a total of P192.34 billion in foreign investment pledges in the first 11 months of 2021, up 71.55 percent from the cumulative 2020 level of P112.1 billion. Still, the amount is only half the pre-pandemic investment pledges of P390.11 billion, the agency said. However, adjusting for incentives given for foreign investments by the government’s investment promotion agencies (IPA), the Philippine net foreign direct investments (FDI) for the period was at $9.24 billion, surpassing the full-year pre-pandemic FDI of $8.67 billion, the DOF said.

JAO extends liability in online sales, grants DTI site takedown powers

Online platforms found to have sellers engaging in fraudulent or illegal sales practices will be held liable by a new joint administrative order (JAO) that also grants the Department of Trade and Industry (DTI) takedown powers of sites of such sellers. DTI Undersecretary Ruth Castelo said in a press conference while existing regulations apply to both physical stores and online stores, JAO No. 22-01 consolidates these laws for swifter implementation and action. Castelo said the main difference is that JAO’s Section 13.2 provides a three-day calendar “safe harbor “period to take down a post in cases of prima facie violation of pertinent laws, without prejudice to the filing of appropriate administrative actions against all violators.

PEZA pushes hybrid work-from-home arrangement for IT-BPO until year-end

The Philippine Economic Zone Authority (PEZA) on Monday said it supports the adoption of a hybrid work-from-home (WFH) arrangement for the IT and business process outsourcing industries until the end of the year. In a statement, PEZA Director General Charito Plaza said they support the IT & Business Process Association of the Philippines (IBPAP) proposal of continued WFH arrangement for their industries beyond the March 31 deadline set by the Fiscal Incentives Review Board (FIRB). Plaza said the PEZA and IBPAP have come up with a proposal for a hybrid work scheme for the concerned industry that involves a staggered implementation of both onsite and offsite work. Under a hybrid work model, employees can work from both onsite and offsite locations, PEZA said.

BIR collects P44.6 billion from online retail sales, content creators in 2021

The Bureau of Internal Revenue (BIR) said it collected P44.6 billion worth of tax from online content creators and retail sales by the end of 2021, BIR Assistant Commissioner Larry M. Barcelo said in a presentation at the House Ways and Means Committee hearing. “As early as 2013, the BIR issued a Revenue Memorandum Circular reiterating the taxpayer’s obligations for online business transactions,” Mr. Barcelo, who heads the bureau’s legal service, said. The obligations include “registration, keeping the books of account, invoices, receipts, filing of tax returns and payment of taxes,” he added.

Nomura cuts PHL growth forecast to 6.3% due to inflation

NOMURA Global Markets Research said it downgraded its growth forecast for the Philippines to 6.3% from 6.8% due to the expected impact of inflation caused by the Russian invasion of Ukraine. The projection was made in a note issued by analysts Sonal Varma, Ting Lu, Euben Paracuelles, and Jeong Woo Park. The official government target for 2022 growth is 7-9%. “In Asia, India, Thailand and the Philippines are the biggest losers, while Indonesia would be relative beneficiaries from higher commodity prices,” the report said.

Trade exec outlines distribution cost of basic necessities and commodities

A trade and industry official on Monday said fuel accounts for less than a tenth—on the average—of the distribution costs of basic necessities and prime commodities in the country. The Department of Trade and Industry (DTI) Assistant Secretary Anne Claire Cabochan presented during the Senate Committee on Energy hearing the share of fuel on the distribution costs of the various commodities. Cabochan’s presentation showed that canned sardines had the highest fuel share in terms of their distribution cost that ranged from 3 percent to 12 percent. The share of fuel in the distribution cost of processed milk was at 5 percent while in coffee it ranged from 2 percent to 5 percent.

Interim fuel reserves eyed as oil prices soar

Should world oil prices continue to soar in the next few weeks, gasoline prices are expected to reach P86.72 per liter and diesel at P81.10 per liter, the Department of Energy (DOE) warned on Monday, as oil firms frowned on an option to stagger this week’s huge oil-price hike to blunt its impact. Energy officials told senators, meanwhile, of plans to put in place by April an interim strategic petroleum reserves program—focused on diesel—to cushion consumers from the hard impact of the runaway prices, driven further by the Ukraine-Russia conflict.

DOF: More foreign investors in PH no longer seeking tax perks

Rising foreign direct investment (FDI) flows despite tax perk-seeking projects trending lower meant that more and more foreigners investing in the Philippines were no longer in need of fiscal support, the Department of Finance (DOF) said. In a bulletin on Monday, the DOF’s chief economist and former undersecretary Gil Beltran noted that foreign-led, job-generating projects approved by investment promotion agencies (IPAs) rose by nearly three-fourths to P192.3 billion last year compared with 2020 levels, but remained below the pre-pandemic commitments amounting to a record P390.1 billion in 2019. IPAs give tax and other fiscal incentives to qualified projects.

DOF: Excess VAT collections to fund fuel subsidies, discounts amid skyrocketing oil prices

With more expensive oil, the government so far generated P3 billion in excess of its value-added tax (VAT) collection program as of end-February, which will fund the additional fuel subsidies and discounts to be given away next month. Finance Undersecretary Valery Joy Brion told a Senate hearing on Monday that excess collections from 12-percent VAT during the first two months of 2022 and beyond would fund the larger subsidies proposed by President Rodrigo Duterte’s economic team to provide relief to sectors badly hit by skyrocketing global oil prices amid the Russia-Ukraine war. “Additional subsidies are also being studied from additional VAT collections,” she said.