Council agrees on the Carbon Border Adjustment Mechanism (CBAM)
On 15 March, the Council reached agreement (general approach) on the Carbon Border Adjustment Mechanism (CBAM) regulation, which is one of the key elements of the European Union’s ‘Fit for 55’ package. The main objective of this environmental measure is to avoid carbon leakage. It will also encourage partner countries to establish carbon pricing policies to fight climate change. For that purpose, CBAM targets imports of carbon-intensive products, in full compliance with international trade rules, to prevent offsetting the EU’s greenhouse gas emissions reduction efforts through imports of products manufactured in non-EU countries, where climate change policies are less ambitious than in the European Union.
EU Member States agree to reduce persistent organic pollutants in waste
On 11 March, EU Environment ministers endorsed the Council’s mandate to negotiate an agreement with the European Parliament on a regulation that aims to further restrict the presence of persistent organic pollutants (POPs) in waste. The negotiating mandate was formally approved by the Permanent Representatives Committee (Coreper). The proposal put forward by the Commission modifies annexes IV and V of the POPs regulation by introducing new substances on the list of substances to be restricted in waste, notably perfluorooctanoic acid (PFOA) and its salts and related compounds – found in waterproof textiles and fire-fighting foams. This substance is toxic for reproduction and carcinogenic. The proposal also covers updates to the concentration limit values for some substances on the list.
Russia’s military aggression against Ukraine: fourth EU package of sectoral and individual measures
Following up on the informal meeting of the EU heads of state and government on 10-11 March, the Council on 15 March decided to impose a fourth package of economic and individual sanctions in respect of Russia’s military aggression against Ukraine. The Council decided in particular to:
prohibit all transactions with certain state-owned enterprises,
prohibit the provision of any credit rating services, as well as access to any subscription services in relation to credit rating activities, to any Russian person or entity,
expand the list of persons connected to Russia’s defence and industrial base, on whom tighter export restrictions are imposed regarding dual-use goods and goods and technology which might contribute to Russia’s technological enhancement of its defence and security sector,
prohibit new investments in the Russian energy sector, as well as a to introduce a comprehensive export restriction on equipment, technology and services for the energy industry,
introduce further trade restrictions concerning iron and steel, as well as luxury goods
Following the signing of the financing agreements of two new large programmes, European Union (EU) Ambassador Luc Véron and Secretary of Finance Carlos G. Dominguez launched the Bangsamoro Agri-Enterprise Programme (BAEP) and the National Copernicus Capacity Support Action Programme for the Philippines (CopPhil). BAEP is a new five-year programme to boost local agricultural production and improve the investment climate in the BARMM, while CopPhil is a nationwide three-year programme to reduce vulnerability from natural disasters. The two Financing Agreements signed between the EU and the Government of the Philippines (GPH) will address the most pressing needs in the country: disaster preparedness and poverty reduction; and the cycle of vulnerability linking the two. Today’s climate and health crises and their long-term effects make these assistance more relevant than ever.
ADVOCACY CORNER
House Hearing on BIR rules Online Activities and Transactions | 14 March
The ECCP was represented at the 14 March House Hearing hosted by the Ways and Means Committee. Key discussion items are the Bureau of Internal Revenue's recently issued rules and guidelines regarding Online Activities and Transactions.
Prospects and Formulae for Rapid Recovery of the Philippine Economy | 16 March
The ECCP participated at the Joint Foreign Chambers of the Philippines’ briefing with National Economic and Development Authority Secretary Karl Chua last 16 March 2022. This activity provided updates on the Philippine government's strategies and policies on economic recovery, including the economic team's 10-point policy to open the economy, as well as supporting affected sectors. Discussions on the impacts of the Ukrain-Russia crisis to the Philippines, as well as the suggested priorities of the next administration have also been tackled.
FEATURED ARTICLES
PH economy may exceed pre-pandemic level in Q1: NEDA
The National Economic and Development Authority (NEDA) is confident about the economy recovering to pre-pandemic level as early as the first quarter of 2022 despite the ongoing tensions between Ukraine and Russia. Socioeconomic Planning Secretary and NEDA chief Karl Kendrick Chua said the domestic economy is in a “very strong” position to withstand global headwinds, as he believes that tensions between the two countries are “temporary in nature”. “So I think we are still very much on track to our projected growth targets for this year,” he said in a virtual press briefing Tuesday. “I still believe that in the first quarter, we will exceed the 2019 level and there has been significant developments in the domestic economy shifting to Alert Level 1 which added more than PHP9 billion per week.”
The number of jobless Filipinos falls to 2.93 million in January 2022
Fewer Filipinos were out of work in January even with the return of tighter COVID-19 restrictions, Philippine Statistics Authority figures released Friday show. The PSA estimates 2.93 million persons aged 15 and up were unemployed during the month — dropping from the 3.27 million tally the month prior. The national joblessness rate stood at 6.4% in January, lower than 6.5% in December.
PLANNED AMENDMENT TO OIL DEREGULATION ADVANCES: Gov’t to lose P1.5T from tax suspension
The Department of Finance (DOF) remains firm in its position not to suspend the collection of taxes on oil products despite clamor from all fronts, noting it will result to inequity and will hurt the economy in the long run. DOF assistant secretary Paola Alvarez at the Laging Handa public briefing yesterday said revenue foregone from a proposal on the automatic suspension of fuel excise tax collection when crude hits $80 per barrel is estimated at P1.5 trillion until 2032. Also yesterday at the House of Representatives, the committee on energy approved a measure seeking to amend Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 by unbundling the retail prices of domestic petroleum products and institutionalizing the minimum inventory requirements for petroleum products to ensure supply security.
70% export threshold cited as possible basis for hybrid work
The Philippine Economic Zone Authority (PEZA) has cited several grounds in its push to allow hybrid work arrangements in the information technology-business process management (IT-BPM) industry. PEZA said the government can apply in the IT-BPM sector an existing policy where registered companies are given 30-percent domestic sales allowance on condition they comply with the minimum 70 percent export requirement. “As long as they meet the 70-percent threshold, they should be allowed to do work-from-home (WFH),” said Charito Plaza, director-general of PEZA, without citing the ratio it. PEZA also cited an existing law on telecommuting in the Philippines and compared the country to India, a strong competitor, which allows 100 percent WFH.
FIRB throws support to investment priority list
The Fiscal Incentives Review Board (FIRB) supports the proposed Strategic Investment Priority Plan (SIPP) crafted by the Board of Investments (BOI). But the FIRB is yet to endorse the SIPP to President Duterte for his approval pending refinements by the BOI on “certain definitions,” said the Cabinet-level interagency board which expressed its support for the plan during its February 21 meeting. The SIPP will serve as the primary basis for determining which projects or activities are eligible for fiscal incentives.
Further reopening adds P40B/week to economy
Socio-economic Planning Secretary Karl Chua said further easing restrictions on people’s movement can infuse additional P40 billion in economic output per week and bring the economic output back to pre-pandemic levels. Despite the challenges brought by the ongoing Russia-Ukraine conflict, the government is sticking to its growth target of 7 to 9 percent this year. “As of the end of 2021, we were P100 billion short from reaching pre-pandemic level. I still believe that in the first quarter, we will exceed the 2019 level. And there has been significant developments in the domestic economy shifting to Alert Level 1, which added more than P9 billion per week,” Chua told the AskNEDA forum yesterday.
Metro Manila stays under Alert Level 1
The Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF) yesterday extended the Alert Level 1 quarantine category in the National Capital Region (NCR) until the end of March amid the improving situation of the coronavirus disease (COVID-19) pandemic in the region. The IATF likewise placed 47 other areas under Alert Level 1 effective March 16 until 31.
DOH: Entire PHL now considered low risk for Covid-19
The Department of Health (DOH) on Tuesday said that all areas in the country are now considered “low risk” status. “Alert level 2 areas continue to increase their vaccination rates to de-escalate to lower alert levels,” Health Undersecretary Maria Rosario Vergeire said. Likewise, she added that as Metro Manila and 39 other areas have eased restrictions, “high vaccination rates and continued adherence to safety protocols have kept our general population protect.” Meanwhile, to clear the confusion, Vergeire said that the ‘Alert Level 0″ is just a term they use “internally.”
House panel pushes excise tax cut in crisis
With their power of taxation and despite reservations from the government’s economic team, the Fuel Crisis Ad Hoc Committee has strongly recommended to the leadership of the House of Representatives approval of House Bill 10488 reducing excise tax on fuel products. In a letter to Speaker Lord Allan Velasco, the special committee said passage of the HB 10488, reducing excise tax on fuel products, with the amendments to automatically suspend TRAIN Law excise tax rates when crude oil price breaches $80 and revert the same once it goes down to $65; and the bill amending the Downstream Oil Industry Deregulation Act could swiftly address the country’s problems with rising prices of petroleum products.
PHL still on track to reach GDP target this year — Chua
The National Economic and Development Authority (NEDA) is confident the Philippines could still reach its economic growth target this year, despite the impact of Russia’s invasion of Ukraine on prices. “As of the end of year 2021, I believe we were a hundred billion short from reaching pre-pandemic level. So, I still believe, in the first quarter, we will exceed the 2019 level, and there have been significant developments in the domestic economy,” Socioeconomic Planning Secretary Karl Kendrick T. Chua said at a Tuesday briefing.
Senate eyes letting foreign contractors bid for public works
The Senate is considering giving equal opportunity to both foreign and domestic bidders for public works projects to introduce new construction technologies and encourage innovation, according to the head of its economic affairs committee. “There is a concern here that competition should be recognized and that there are valuable technical advantages to allowing foreigners, but of course, there’s great opposition to the entry of foreign contractors to the Philippines,” committee head Senator Imelda “Imee” R. Marcos told a hearing on Tuesday.
Metro Manila mayors ready for Alert Level 0 — MMDA
Metro Manila mayors are ready to recommend a further de-escalation of restrictions in the region as the COVID-19 situation in the country improves, the Metropolitan Manila Development Authority said on Tuesday. “The mayors had a discussion earlier and they gave their assessments on the possibility of an Alert Level 0. Most of them said that they were ready because the cases are declining in the past weeks, MMDA General Manager Frisco San Juan, Jr. told a public briefing.
4-DAY WORK WEEK PROPOSED: Subsidies to workers, poor families pushed
Government agencies are pushing for a four-day work week to lessen fuel consumption, and a P24-billion, three-month subsidy for minimum wage earners as a relief to workers. On Tuesday night, President Duterte approved the proposal of the Department of Finance to provide a monthly subsidy of P200 per household of poor families to cushion the impact of the rising costs of fuel, which would entail a budget of P33 billion.
Communications Secretary Martin Andanar at the Talk to the People yesterday said the implementation of the P200 per month or P2,400 per year subsidy, to be given through unconditional cash transfers, would have to follow the guidelines to be issued by the Department of Budget and Management.
Continued decline in vax turnout seen
Government is expecting a continued drop in the number of individuals having themselves vaccinated against COVID-19, which this month may reach only around five million to six million, the lowest since the decline started in December last year, National Task Force against COVID-19 chief and vaccine czar Carlito Galvez Jr. said Tuesday night. The government targets to fully vaccinate 77 million by the end of March to cover 70 percent of the population. As of March 15, only about 64.8 million people have been fully vaccinated. NTF medical adviser Ted Herbosa, during the “Laging Handa” public briefing yesterday, said among the reasons for the decline are the already high vaccination rate and low alert level.
PH well poised to recover faster from pandemic: BSP
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the Philippines and the Southeast Asian region as a whole are poised to recover faster from the coronavirus disease 2019 (COVID-19) pandemic compared to the rest of the world. Speaking at the Southeast Asia Development Symposion 2022 organized by the Asian Development Bank (ADB), Diokno said current conditions favor a robust recovery for the Philippines. “We were growing at a rate of 6.4 percent annually for the last 10 years before the pandemic. And so we were able to cut poverty incidents from 23.5 percent in 2015, to 16.7 percent in 2018. So while the pandemic may have set us back for some of our goals, I’m confident really that we are on our way to regaining our pre pandemic growth projector,” he said.
P147B oil tax collection this year allocated
President Duterte approved on Tuesday night the proposal of the Department of Finance (DOF) not to suspend the collection of the excise and value- added taxes (VAT). DOF Secretary Carlos Dominguez at the Talk to the People yesterday said the anticipated P147.1 billion to be collected from fuel excise tax and VAT this year had been allocated for some projects and expected expenditures such as those under the Build, Build, Build program and the salaries of government employees including soldiers, policemen, and teachers. Dominguez said suspending the excise and VAT on fuel amid the rising cost of petroleum products would reduce the government’s revenues this year by at least P105.9 billion.
DOE sees big-time oil price rollback next week
The Department of Energy's Oil Industry Management Bureau (OIMB) told CNN Philippines' New Day on Wednesday that some events across the globe have caused the dip in crude oil prices, particularly COVID-19 surge in China and some countries and Ukraine veering away from its plan to be a member of the North Atlantic Treaty Organization. "The price of crude oil is actually very volatile, but it kept on increasing because of the sustained pronouncement from UK, US, European Union (on) sanctions against Russia," OIMB Director Rino Abad said.
Widest output gap in Asean to scar PH labor market
The Philippines’ output gap—its actual economic output during the COVID-19 crisis versus its maximum prepandemic potential—is the highest in Association of Southeast Asian Nations (Asean) which, in turn, is resulting in labor market scarring, the Asian Development Bank (ADB) said on Wednesday. Estimates presented by ADB Southeast Asia department senior economist James Villafuerte in a press briefing showed that despite the better-than-expected 5.6-percent gross domestic product (GDP) growth posted by the Philippines last year, its actual output was 15.7 percent below what would have been the GDP figure without the pandemic.
No extension of income tax payment deadline in April 2022
There would be no extension of the deadline to pay taxes for 2021, which falls in April this year, as the Bureau of Internal Revenue (BIR) aims to hit its biggest monthly revenue target collection and amid signs of economic recovery. In a revenue memorandum order, Internal Revenue Commissioner Caesar Dulay tasked BIR revenue officers with collecting P252.6 billion in taxes in April, coinciding with the deadline for filing and payment of annual income tax returns (ITR). In 2020, amid the then most stringent enhanced community quarantine (ECQ) imposed at the onset of the pandemic, the BIR moved the 2019 ITR filing and payment deadline to June as relief to taxpayers restricted from moving around.
Pandemic sends 4.7M more people into extreme poverty in SE Asia
The pandemic added 4.7 million more people to Southeast Asia’s most extreme poor in 2021, reversing gains made in fighting poverty, the Asian Development Bank (ADB) said on Wednesday, while urging governments to take steps to boost economic growth. The number of people in extreme poverty — defined as those living on less than $1.90 a day — was 24.3 million last year, or 3.7% of Southeast Asia’s collective 650 million population, the ADB said in a report. Before the pandemic, figures for those in extreme poverty in Southeast Asia had been on the decline, with 14.9 million in 2019, down from 18 million in 2018 and 21.2 million in 2017.
Deficit widens to P23B in January
Government spending continues to outstrip revenue in January resulting in a budget deficit of P23 billion, up 66.30 percent from last year’s P14.1 billion, according to the Department of Finance (DOF). “The fiscal performance for the period reflects a 9.70 percent growth in public expenditures alongside a 6.65 percent increase in revenue collection,” the DOF said. January revenue reached P278.1 billion, 92 percent of which was from taxes worth P255.3 billion while non-tax collections amounted to P22.8 billion. “Collections by the Bureau of Internal Revenue for the month was at P195.8 billion, 7.48 percent or P13.6 billion better against the P182.2 billion actual collections made in January of the previous year,” the DOF said. The DOF also said collections by the Bureau of Customs hit P58.3 billion, up 23.43 percent from P47.3 billion last year.
BIR, BOC surpass collection targets
Collections of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) reached P2.732 trillion in 2021, higher by 1.26 percent from their combined collection target of P2.698 trillion. Carlos Dominguez III, Department of Finance (DOF) secretary, said the amount raised by the two agencies was 9.78 percent more than their 2020 actual combined collection of P2.489 trillion. Data from the DOF’s revenue operations group (ROG) showed the BIR collected P2.086 trillion, up 0.25 percent from its target of P2.081 trillion for the year. “The BIR collection for 2021 was also 6.93 percent over its actual collection of P1.951 trillion in 2020,” said Antonette Tionko, DOF undersecretary and head of the ROG.
PH likely under Alert Level 1 until June 30 – Duque
Health Secretary Francisco Duque III yesterday said the Alert Level 1 in the National Capital Region (NCR) and 47 other areas will most likely stay until the end of the term of President Duterte in June 30. In a televised public briefing, Duque said: “Instead of us discussing Alert Level 0, I think we are doing fine under Alert Level 1. I think this will stay until the end. We shall be at Alert Level 1 likely until the end of the term of President Duterte.” The health chief said there is viable reason to maintain Alert Level 1 as the threat of coronavirus disease (COVID-19) remains. Add to this, he said, is the possible entry of other COVID-19 variants and mutations.
Duterte’s decision on proposed 4-day work week out March 21
President Rodrigo Roa Duterte is expected to announce on March 21 his decision on the proposal to adopt a four-day work week to help workers cope with the soaring oil prices, Malacañang said Thursday. “We will know this coming Monday,” acting Presidential Spokesperson and Communications Secretary Martin Andanar said in an interview with radio DZBB. Socioeconomic Planning Secretary Karl Kendrick Chua on Tuesday proposed a four-day work week scheme to conserve energy and alleviate work-related expenses amid the series of fuel price hikes.
64.8M now fully vaxxed, 11M get booster shots vs. Covid-19
The Philippines has already administered a total of 139,454,246 doses of Covid-19 vaccine nationwide, with 64,838,213 Filipinos having completed their primary doses and 11,291,687 of them have received booster shots against the virus, as of Thursday. Based on the latest data from the National Task Force (NTF) Against Covid-19, more than 10 million under the 5-11 age bracket got their first coronavirus shots, with 381,433 kids were fully vaccinated and more than 9.7 million under 12 to 17 age group, have completed their two primary series. The NTF expects the number to increase in the coming days, following the approval of the country’s Food and Drug Administration (FDA) for the use of Sinovac jabs to minors.
Alert Level 1 in more areas vital to full PH economic recovery
The de-escalation of more regions and provinces to the most lenient Alert Level 1 system is vital to the total recovery of the Philippine economy, Presidential Adviser on Covid-19 response, Secretary Vince Dizon, said Thursday. Dizon, who is also the National Task Force (NTF) Against Covid-19 deputy chief implementer, earlier said the fourth wave of the national vaccination drive (NVD) has brought at least nine provinces and highly urbanized cities (HUCs) on the list of areas de-escalated to Alert Level 1 system. Among these provinces and cities are Nueva Ecija, Zambales, Batangas, Lucena City, Iloilo City, Cebu City, Ormoc City, Tacloban City and Butuan City.
PH braces for spillover impact of Russia sanctions
The Philippines is bracing for the indirect, spillover impacts of economic sanctions slapped on Russia following its invasion of Ukraine, President Duterte’s chief economic manager said. Finance Secretary Carlos Dominguez III told Bloomberg last Wednesday that given the Philippines’ limited trade with both Russia and Ukraine, the financial and trade sanctions slapped on Russia by Western countries would have no direct impact on the domestic economy. “But we are quite concerned about the effects on the overall world economy,” Dominguez said. “We are concerned that there might be an effect on the vigorousness of the economies in western Europe and the United States, who are our trading partners.”
No SDGs expected to be met by 2030 in Southeast Asia
Southeast Asia is behind the pace in meeting any of the 17 sustainable development goals (SDGs) by 2030, according to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). “Southeast Asia is not on track to achieve any of the 17 Goals by 2030, given the current pace of progress by countries in the subregion,” UNESCAP said in a report released on Thursday. According to UNESCAP, slow progress has been noted in SDG 4, or educational quality, adding that there are signs of regression in inequality indices and low proficiency in reading and mathematics among young students. “Cambodia, Indonesia, the Philippines, and Thailand recorded less than 50% of lower secondary students achieving minimum reading and mathematics proficiency for both sexes,” the report found.
RCEP could help blunt oil spike impact on food
The largest trade agreement in the world, the Regional Comprehensive Economic Partnership (RCEP), could play a major role in reducing food costs amid the spike in oil prices and other commodities brought by the war in Eastern Europe. Packaging Institute of the Philippines (PIP) President Stefano Paolo Buñag said regional integration needed by regional and global supply chains through the RCEP can help reduce commodity prices. RCEP, Buñag said, helps in harmonizing the utilization of modern technology, packaging, processing and logistics for more effective and efficient global trade.
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