ECCP at Work

Yearly COVID-19 vaccination ‘long been discussed, planned’ by govt — DOH

The government is ready to give the eligible population yearly shots against COVID-19 if enough evidence shows the necessity for it, the Department of Health said Tuesday. “If ever na dadating tayo na magkaroon ng kumpletong ebidensya para sa yearly vaccination of COVID-19 vaccines, ang gobyerno po ay magiging handa para maibigay sa atin pong mga kababayan, for those who are eligible in the coming years,” said DOH spokesperson Ma. Rosario Vergeire in a press briefing. Vergeire said regular vaccination against COVID-19 has long been discussed and planned by the government.

Neda Board under Duterte okays projects worth P 5.3T

From July 2016 up to three months before President Duterte steps down from office, the National Economic and Development Authority (Neda) Board that he chairs approved 111 big-ticket infrastructure projects worth a total of P5.3 trillion. Documents showed that as of March 21, 2022, 93 Neda Board-approved projects with a combined cost of P4.4 trillion were being financed by official development assistance (ODA) or low-interest, concessional loans extended by multilateral banks as well as bilateral development partners.

Neda chief: Mix of economic reforms to shield PH from Ukraine war impact

With amendments to the antiquated Public Service Act now a law and expected to dismantle monopolies, President Rodrigo Duterte’s trio of economic liberalization bills have been completed and, through more foreign investment inflows, would protect the Philippine economy from spillover impacts of Vladimir Putin’s invasion of Ukraine, the Philippines’ chief economist said on Tuesday (March 22). 

In lieu of amending restrictions against foreign investors enshrined in the 1987 Constitution, which would take time to amend given resistance to Charter change, the economic team had instead pushed to amend the Commonwealth-era Public Service Act as well as Foreign Investments and Retail Trade Liberalization laws to allow further opening of some sectors to more foreign participation. Duterte signed the Public Service Act amendments on Monday. He approved the Foreign Investments Act amendments early this month, and the law amending the Retail Trade Liberalization Act last December

OECD: PH economy to grow fastest in Southeast Asia in 2022

The Organization for Economic Cooperation and Development (OECD) of rich nations expects the Philippine economy to grow fastest in Southeast Asia this year, even as its labor market could take time to recover due to the scarring inflicted by the COVID-19 pandemic. In its “Economic Outlook for Southeast Asia, China and India 2022” report launched on Tuesday afternoon (Manila time), the OECD projected 7-percent gross domestic product (GDP) growth for the Philippines in 2022, at the lower end of the government’s 7 to 9 percent target.

IT-BPM firms may choose to adopt WFH arrangements: DOF

The Department of Finance (DOF) has clarified that information technology business process management (IT-BPM) companies in ecozones and are registered with investment promotion agencies (IPA) are free to adopt work from home (WFH) arrangements. Companies registered with an IPA such as the Philippine Economic Zone Authority (PEZA) enjoy incentives such as an income tax holiday or a 5-percent special corporate income tax in lieu of all taxes, such as the value-added tax, income tax, and local business tax. As a condition for enjoying these incentives, they have to comply with Section 309 of the Tax Code which states that “a qualified registered project or activity under an Investment Promotion Agency administering an economic zone or freeport shall be exclusively conducted or operated within the geographical boundaries of the zone or freeport being administered by the Investment Promotion Agency in which the project or activity is registered.”

[ MENTION ] Business chambers see amended PSA improving FDI climate

BUSINESS CHAMBERS said they expect the liberalization of the Public Service Act (PSA) to enhance competition and attract more investment, particularly in the industries opened up to expanded foreign ownership. “The passage of the amendments of the PSA harmonizes with the recently passed amendments to the Retail Trade Liberalization Act (RTLA) and Foreign Investment Act (FIA). With these laws enacted, we are confident that the country can attract many investors in various sectors and will benefit Filipinos by improving basic services and creating more jobs,” GPCCI President Stefan Schmitz said. The amendments removed public services such as telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports from the public utility category. As a result, these services can now be fully owned by foreigners and are no longer covered by the 40% foreign ownership limit for public utilities set by the 1987 Constitution.  

Lars Wittig, European Chamber of Commerce of the Philippines president, said the amended law will help the chamber’s efforts to attract European investors to the Philippines.  “We believe this is the most important bill for foreign investments… and we do believe that it will drive the massive influx of foreign capital into the sectors of aviation, shipping, and telecommunications. There will be more competition (and) greater investments,” Mr. Wittig said in a television interview on Tuesday.

New PSA to spur $100-billion investments–DTI chief

Trade Secretary Ramon M. Lopez on Tuesday said the enactment of the amended Public Service Act (PSA) could lead to over $100-billion investments in telecommunication, transportation and logistics in the next two years. Lopez said current potential investments in the sectors of telecommunication, transportation, logistics and railway—where foreigners are now allowed to own 100 percent equity—is over $60 billion. “With these laws enacted, we are confident that the country can attract many investors in various sectors and will benefit Filipinos by improving basic services and creating more jobs,” Schmitz added.

Retail trade liberalization law included in updated FINL

The updated Regular Foreign Investment Negative List (FINL) incorporates provisions from the Retail Trade Liberalization Act (RTLA), according to the National Economic and Development Authority (Neda). The draft already includes the amendments in the RTLA, but not the amendments contained in the Public Service Act (PSA) and Foreign Investment Act (FIA), which have only been recently passed into law. Based on the amendments under the RTLA, the government will lower the required paid-up capital for foreigh retail enterprises and for other purposes. Section 5 of the RTLA or Republic Act 11595 signed in July 2021 allows foreign retailers to operate in the country upon registration with the Securities and Exchange Commission (SEC) or the Department of Trade and Investment (DTI).

Duterte signs EO on economic recovery

President Rodrigo R. Duterte signed an executive order which lays down a 10-point policy agenda aimed at accelerating the economy’s recovery from the coronavirus pandemic, just a little over three months before he steps down from office. “There is an urgent need to adopt policies on economic recovery to sustain current economic gains, minimize the pandemic’s long-term adverse effects, and restore the country’s development trajectory,” read Executive Order (EO) No. 166, which was signed by Mr. Duterte on March 21. A copy was made public on Wednesday. The Philippine economy grew by 5.6% in 2021, rebounding from the 9.6% contraction in 2020. Economic managers are targeting a 7-9% gross domestic product growth this year.

IMF sees need to adjust rates earlier

The Philippine central bank may have to reassess its loose monetary policy earlier than planned as the surge in commodity prices raised inflation concerns, the International Monetary Fund (IMF) said. “While there is still some policy space to absorb the price increases, as the latest numbers show that inflation is in the middle of the BSP’s (Bangko Sentral ng Pilipinas) target range, greater vigilance from the monetary authorities will be required, and the accommodative monetary policy may need to adjust earlier than expected,” IMF Representative to the Philippines Ragnar Gudmundsson said in an e-mail.

A poll held by BusinessWorld last week showed 15 out of 17 analysts expect the Monetary Board to retain its record low policy rates today (March 24), in line with signals from the central bank that it will remain patient in supporting growth. BSP Governor Benjamin E. Diokno has earlier said the central bank would remain patient in supporting the economy and would wait until the second half of the year to assess the need for a rate hike.

Solons hail new PSA, but push safeguards

Following the signing of the new Public Service Act, lawmakers said the new measure is expected to yield “massive” impacts on job creation and investments. Two House of Representatives committee chairmen—Joey Sarte Salceda of Ways and Means and Sharon Garin of Economic Affairs—described the historic reform as the most important economic measure since the passage of the CREATE Law.

Sen. Grace Poe, main author and sponsor of the bill in the Senate, said she looked forward, with its signing, “to finally having an enabling environment that provides better and more affordable services, creates more jobs and ultimately improves the quality of life of every Filipino.” But, she added, “vigilance is crucial” to ensure that the “safeguards we placed in the law remain sacrosanct.”

BOI sees multi-billion peso data center investments

The Board of Investments (BOI) expects to register multi-billion pesos worth of projects in data centers as local and foreign companies begin to set these crucial infrastructure in response to surging data consumption. The BOI’s Investment Assistance and Facilitation Group said it is assisting Singapore’s SpaceDC for its $700-million project in Cainta, Rizal, the country’s biggest hyperscale data center. BOI managing head Ceferino Rodolfo said local firm PLDT Group may be the first to officially register as it is in the advanced stage of evaluation and has been given an endorsement by the Department of Information and Communication Technology. The BOI identified hyperscalers as a new addition to the key priority sectors for intensive promotion and fall under the telecom infrastructure list.

PPP projects to boost agriculture development

Agriculture Secretary William Dar has emphasized the need for public-private partnership projects to accelerate the development of the agriculture sector, in line with ensuring the country’s food sovereignty. Highlighting the importance of food security in ensuring food sovereignty, Dar called on universities and other academic institutions to urge legislators to provide much-needed substantial budgetary support to the Department of Agriculture (DA) to enable it to unlock the full potential of Philippine agriculture. Under the MOU, the DA will get the expertise of UPLB through the Institute of Plant Breeding (IPB) for seeds and the National Institute of Molecular Biology and Biotechnology (NIMBB) for biotechnology inputs. These will strengthen the public sector network of government, private sectors, farmers, and other stakeholders to supply the national requirement on seeds and biotechnology inputs, and complement seeds and biotech inputs supply from private company efforts.

‘BSP risks falling behind curve in inflation fight’

The Bangko Sentral ng Pilipinas (BSP) may be on the brink of losing control and credibility in herding inflation within the target range if monetary authorities do not adopt a tighter policy stance within the next three months, as growth in prices heat up globally due to the Russian invasion of Ukraine. Following the US Fed’s policy meeting last week, BSP Governor Benjamin Diokno said the BSP does not have to raise its own policy rates just because the Americans did, reiterating that such decisions will depend on the domestic situation. The Monetary Board is meeting today to update their assessment of the latest developments, which would impact whether the BSP’s overnight borrowing rate would remain at a record low 2 percent.

Central bank extends key rate pause

The Philippine central bank kept its key interest rate steady for an 11th straight meeting on Thursday, even as it warned that its inflation target might be breached this year amid surging global oil prices due to Russia’s continued invasion of Ukraine. The Bangko Sentral ng Pilipinas (BSP) left the benchmark rate at a record low of 2%, as predicted by 15 of 17 economists in a BusinessWorld poll last week. Deposit and lending rates were also kept at 1.5% and 2.5%. Its last rate move was a 25-basis-point (bp) cut in November 2020. 

RCEP touted as possible counter to growing protectionism

The Regional Comprehensive Economic Partnership (RCEP) could serve to counteract growing calls for protectionism in response to the resource scarcity resulting from the war in Ukraine, keeping trade and investment levels high, the Department of Trade and Industry (DTI) said. “Considering that in the midst of the pandemic and growing trend in protectionism, the fact that RCEP offers a stable and predictable business environment will surely attract investments in the region including the Philippines,” Trade Secretary Ramon M. Lopez said during the virtual General Membership Meeting of the Management Association of the Philippines on Thursday. Mr. Lopez said the RCEP also offers an opportunity for the trading bloc’s economies to revive by enhancing trade across the Asia-Pacific region.   

Benefits, subsidies sought for BPO workers returning to office

The government needs to support employees returning to perform onsite work in the information technology and business process management (IT-BPM) industry, also known as the business process outsourcing (BPO) sector, an Akbayan Party-List candidate said. The party-list’s second nominee, Raymond John S. Naguit, said in a statement on Thursday that IT-BPM workers required to return to the office need subsidized commutes and free coronavirus disease 2019 (COVID-19) testing, after the industry was recently denied permission to continue doing the bulk of its work remotely. Akbayan supports the industry’s position on continuing with work-from-home (WFH) arrangements for employees until September, saying that the government needs the time to prepare the work environment to make it safer, and also to shield workers from high fuel prices. 

UNCTAD cuts growth estimates for region, world

The United Nations Conference on Trade and Development (UNCTAD) on Thursday lowered its growth estimates for Southeast Asia and the world due to shocks from Russia’s invasion of Ukraine and changes in macroeconomic policies that put developing countries at risk. In report, the UN body changed the projection for Southeast Asia to 3.4% from 4.7% and to 2.6% for global growth from 3.6%. 

Pharma group stresses 3 lessons from pandemic

The Pharmaceutical & Healthcare Association of the Philippines (PHAP) yesterday said it will work on the introduction of new medicines in the country to improve the health status of Filipinos, citing three lessons learned from policies created and implemented during the pandemic. In a statement, Edralin also explained the landmark Universal Healthcare (UHC) Act and the National Integrated Cancer Control Act (NICCA) also have provisions that could expedite the entry of new medicines and vaccines in the country to ensure that no Filipino is left behind in the race for quality healthcare.

Benefit of face-to-face learning cited

The National Economic and Development Authority (NEDA) has reiterated its call for the complete resumption of face-to-face learning in areas placed under Alert Level 1. Karl Kendrick Chua, NEDA secretary, emphasized in a statement yesterday the full benefit of Alert Level 1 cannot be maximized if the majority of schools are still closed for face-to-face learning. “More than the foregone economic activity, we are concerned for the learning and future productivity of our children. Under Alert Level 1, children are allowed to engage in leisure and recreational activities for all indoor and outdoor venues, but the most important activity of children – going to school and learning fully – continues to be restricted,” he added.

‘Sleeping giant’ agriculture needs RCEP, says DA chief

Agriculture Secretary William D. Dar on Thursday said it is high time the country ratifies the Regional Comprehensive Economic Partnership (RCEP) as the trade deal would improve the country’s agriculture sector, particularly its food trade with members of the agreement. Dar said he “fully agrees” with Trade and Industry Secretary Ramon M. Lopez that the benefits of RCEP to the Philippines “far outweigh the cost of not joining.” Addressing the Management Association of the Philippines’ General Membership meeting on Thursday, Dar said, “Our participation in this mega trade pact is imperative to our economic growth, which is set to boost the state of our trade and investments.” Dar listed some of the notable benefits of RCEP to the domestic agriculture sector—wider area for cumulation of raw materials, enhanced rules on nontariff measures, strong customs cooperation, time-bound consultations to resolve issues on sanitary and phytosanitary measures, among others.

DICT: Safeguards against security risks in place in amended Public Service Act

The recently signed law amending the Public Service Act to allow full foreign ownership in certain sectors has safeguards to address possible security risks, the Department of Information and Communications Technology (DICT) said. For instance, Republic Act 11659 gives the President powers to suspend or prohibit any investment in a public service within 60 days of such recommendation "in the interest of national security." The law also prohibits investments from state-owned enterprises or entities acting on their behalf made after the Act took effect. Foreign nationals and companies investing in telecommunications, one of the sectors now allowed full foreign ownership, must also undergo cybersecurity and ISO audits according to Caintic. RA 11659 also mandates administrative agencies to ensure independent performance audits are done annually. This is to monitor the cost, quality of services these foreign investing firms provide, and their ability to immediately and sufficiently respond to emergency cases.