ECCP at Work

Rules for economic reform laws sought

Foreign business chambers are pressing the government to immediately issue the implementing rules and regulations (IRR) of recently signed laws amending the Public Service Act (PSA) and Foreign Investment Act (FIA) before President Rodrigo R. Duterte steps down from office by end June. “Consistent with the aim of Executive Order 166, which adopts the Economic Development Cluster’s 10-point policy agenda for pandemic recovery, to speed up and sustain the country’s recovery from the coronavirus disease 2019 (COVID-19) pandemic, we call on relevant government agencies to ensure that the IRRs on Republic Act (RA) 11659 and RA 11647 are also issued, with sufficient stakeholder consultation, before the end of the current administration,” members of the Joint Foreign Chambers (JFC) said in a statement on Monday.

[MENTION] Release of IRRs for PSA pushed

Foreign business chambers on Monday called for the immediate issuance of the implementing rules and regulations (IRRs) of the amendments to the "Public Services Act" (Republic Act 11659) and the "Foreign Investments Act" (RA 11647). In a joint statement, the business groups lauded the recent issuance of the Retail Trade Liberalization Act and urged the government to "ensure that the IRRs on RA 11659 and [RA] 11647 are also issued, with sufficient stakeholder consultation, before the end of the current administration."

Inflation zooms to 4% in March

Inflation quickened to an annual rate of 4% in March compared to 3% in February, with the increase in prices mainly driven by food and energy costs, Philippine Statistics Authority figures released Tuesday show. The latest pace, also milder than 4.1% in March last year, is within the 2-4% target band for this year. The Bangko Sentral ng Pilipinas earlier projected March inflation to settle within 3.3% to 4.1%. It listed consecutive oil price hikes and high Meralco electricity rates among possible inflationary pressures for the month, along with more expensive meat costs and the peso’s weaker performance.

Manufacturing growth to push GDP expansion

The Department of Trade and Industry (DTI) is bullish about the sustained growth of manufacturing as the Philippines outperformed its Asean peers in March. DTI Secretary Ramon Lopez attributed this to greater mobility and effective implementation of health and safety protocols with lesser and lesser new coronavirus disease 2019 cases (COVID-19). Manufacturing output, as measured by the Purchasing Managers’ Index (PMI) of the IHS Markit Philippines, climbed to a three-year high at 53.2 in March, snapping four months of the index above 50. Lopez said this will continue to rebound this year.

30% of IT-BPMs seek hybrid work extension

The Philippine Economic Zone Authority (PEZA) has given members of the Information Technology Business Process Association of the Philippines (IBPAP) registered with the agency until April 8 to submit their letter of request to continue implementing a 30 percent work-from-home arrangement until June 30, 2022. This was after only 30 percent of IBPAP members have filed for application on March 31, the original deadline. According to PEZA, each registered business enterprise (RBE) will have to request for a letter of authority (LOA) to allow them to continue the WFH based on the regular 70:30 ratio onsite to offsite ratio. On Friday, PEZA director-general Charito Plaza was quoted as saying RBEs could still implement a 70:30 hybrid work arrangement despite the denial by the Fiscal Incentives Board of the request of IT-business process management (IT-BPM) RBEs to extend the remote work arrangement.

PEZA official says more investments to enter PHL after May nat’l elections

More investments are expected to enter the country after the May election as investors await the new administration, according to the top Philippine Economic Zone Authority (PEZA) official. “We’re not yet off from the coronavirus disease 2019 (COVID-19) pandemic, plus the Ukraine war… then we are now in the election period. Investors have that wait-and-see attitude on the result of the election. Investors’ enthusiasm and heightened hopes come after election,” PEZA Director-General Charito B. Plaza told BusinessWorld via mobile phone message. The Philippines is holding its national elections on May 9. Investors typically seek more clarity on the possible policies by the incoming President before making any investment decisions.

Sustained growth to hinge on ‘prudent reopening’ of economy
The Department of Finance (DoF) on Saturday called for continued support for the pandemic containment effort to ensure that the economy’s growth is sustained. In an Economic Bulletin, the DoF said a “robust” vaccination effort must continue alongside a “prudent reopening of the economy to sustain economic momentum.” “The country must continue to hedge against risks posed by coronavirus disease 2019 (COVID-19) through a robust vaccination program and prudent reopening of the economy to sustain recovery momentum,” the DoF said. The DoF said that the Retail Trade Liberalization Act, the Foreign Investments Act, and the Public Service Act will play a critical role in the economic recovery.

Legislator sees CREATE, liberalizations attracting FDI of $20 billion by 2026

A senior legislator said he believes foreign direct investment (FDI) could rise to $20 billion within five years, following a major tax reform and three key liberalization bills. “The goal should be $20 billion in FDI by 2026, or five years after CREATE (Corporate Recovery and Tax Incentives for Enterprises),” House and Ways Chairman and Albay Rep. Jose Ma. Clemente  S. Salceda said in a statement. “I think with CREATE, PSA (Public Service Act) amendments, and the other liberalization measures and doing business reforms, we will get there.” CREATE is the second package of the Comprehensive Tax Reform Program. It reduces the corporate income tax rate to 20% from 30%, and makes fiscal incentives more time-bound and performance-based. It was signed into law by President Rodrigo R. Duterte on March 26, 2021.

Inflation may have breached target in March — BSP chief

Headline inflation could accelerate beyond the central bank’s target in March, driven mainly by successive oil price hikes and the depreciation of the peso, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a Viber message to reporters. Based on the BSP projection, the consumer price index likely quickened by 3.3-4.1% in March, he said. The central bank’s point inflation forecast is at 3.7%.If realized, this would be faster than the 3% in February but still slower than the 4.5% a year earlier. Inflation could also be beyond the 2-4% target if it reaches the upper end of the BSP’s projection. The Philippine Statistics Authority will release March inflation data on April 5, Tuesday.   

BOI, PEZA investments plunge 90% in 2 months  

Investments approved by the Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA) declined by 90 percent to P12.82 billion in the first two months of the year from P133.24 billion in the same period last year as  the increase in  COVID cases during the review period affected investor sentiment. Of the total, 58.9 percent or P7.55 billion was approved by the BOI – a drop of 3.81 percent compared to last year’s  P121.93 billion. PEZA, on the other hand, accounted for 41.1 percent or P5.27 billion of the approved investments as of end-February, plummeting by 53.4 percent from  P11.31 billion a year ago. “January to February period was the surge of Delta and Omicron variants which caused lockdowns again around the world,” PEZA director general Charito Plaza said in a Viber message. In an interview with ANC yesterday, Plaza said the PEZA is now looking at a seven to eight percent growth in its approved investments this year.

Neda chief sees ‘respectable’ GDP growth in 1st quarter 2022  

The country’s chief economist expects “respectable” gross domestic product (GDP) growth in the first quarter of this year following sustained strong manufacturing expansion as well as increasing mobility which already exceeded pre-pandemic levels. Citing a report of the state planning agency National Economic and Development Authority (Neda), Socioeconomic Planning Secretary and Neda chief Karl Kendrick Chua told the Inquirer on Thursday (March 31) that to date, visits to transit stations in the country already surpassed pre-pandemic levels by about 20 percent. 

DILG chief eyes Alert Level 1 status for entire PH

Department of the Interior and Local Government (DILG) Secretary Eduardo Año pushed for the placing of the entire country under Alert Level 1 to expedite economic recovery amid the coronavirus pandemic. “Yes, 'yun ang ating adhikain d'yan. Dapat buong Pilipinas under Alert Level 1 para talagang halos ang ating restriction na lang ay minimum public health standards at ang iba't ibang bayan ay umunlad at mag-take off na (Yes, that is what I am striving for. The whole country should be under Alert Level 1 so that almost all of our restrictions are limited only to the minimum public health standards and various localities will progress and take off),’’ Año said in a radio interview on Monday. He also noted that the government has made adjustments to the requirements to place an area under Alert Level 1 like the required vaccination rate of the A2 (senior citizens) population from the previous 80 percent to the current 70 percent.

73.5% of target population now vaccinated vs. Covid-19

About 73.47 percent of the country’s target population has been vaccinated against the coronavirus disease 2019 (Covid-19), the Department of Health (DOH) said Monday. In its latest case bulletin, the DOH also reported that 75.83 percent of the senior citizens have been inoculated against the disease. The elderly group is composed of 8,721,357 individuals while the country’s target population for inoculation is 80 percent (90,005,357 individuals) of the country’s entire population. As of April 3, DOH data showed that 66,125,962 individuals are fully vaccinated while 12,154,567 people have received their booster shots.

Rules for economic reform laws sought

Foreign business chambers are pressing the government to immediately issue the implementing rules and regulations (IRR) of recently signed laws amending the Public Service Act (PSA) and Foreign Investment Act (FIA) before President Rodrigo R. Duterte steps down from office by end June. “Consistent with the aim of Executive Order 166, which adopts the Economic Development Cluster’s 10-point policy agenda for pandemic recovery, to speed up and sustain the country’s recovery from the coronavirus disease 2019 (COVID-19) pandemic, we call on relevant government agencies to ensure that the IRRs on Republic Act (RA) 11659 and RA 11647 are also issued, with sufficient stakeholder consultation, before the end of the current administration,” members of the Joint Foreign Chambers (JFC) said in a statement on Monday.

Mr. Duterte last month signed RA 11659, which amends the 85-year-old Commonwealth Act No. 146, or the PSA Act, easing restrictions on full foreign ownership of businesses in key sectors such as telecommunications, shipping, airlines, railways and subways. He also signed into law RA 11647, which amends the Foreign Investment Act in order to make the Philippines more attractive to foreign investors.

BoC exceeds March collection goal by 23%

The Bureau of Customs (BoC) on Monday said it collected a record P70.72 billion in March, mainly due to higher imports and improved valuation. In a statement, it said it exceeded the monthly collection target of P57.69 billion by 23%. “The BoC posted a surplus of P13.037 billion or 22.6% higher than its target, and remarkably, the bureau has consistently met and exceeded its monthly revenue collection target since January this year,” it said. he March collection was also 29% higher than P54.5-billion in March 2021.

SIPP draft lists ‘green’ projects, R&D as eligible for incentives

A draft of the Strategic Investment Priority Plan (SIPP) retains all the priority industries listed in the 2020 plan while creating two other tiers for “green” industries and research and development (R&D) activities, among others. The draft, which was released to the media by House Ways and Means Committee Chairman and Albay Rep. Jose Ma. Clemente S. Salceda, remains unsigned but appears to be set for implementation via executive order (EO). The draft itself that Mr. Salceda released appears to be set to go out initially as a memorandum order to be issued by the Office of the President (OP), over the signature of Executive Secretary Salvador C. Medialdea. The latest version of SIPP will be a companion document to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law and seeks to identify the industries to which the government hopes to attract investment by offering tax incentives.

‘Infrastructure spending needs to be maintained’

The next administration would have to sustain the infrastructure spending of the Duterte administration to help in the employment recovery of the Philippines from the pandemic, according to global advisory firm Oxford Economics. In an email, assistant economist at Oxford Economics Makoto Tsuchiya said one of the biggest achievements of President Duterte is reducing the infrastructure gap through its flagship massive infrastructure program. “We would look for the next administration to continue with Duterte’s legacy on focusing on infrastructure spending, as it tends to have a high fiscal multiplier and directly generates employment,” Tsuchiya said.Infrastructure spending averaged at least five percent of gross domestic product (GDP) over the past six years. This is equivalent to at least P1 trillion annually.

DOF: Reforms to sustain PH trade growth

The Philippines is expected to sustain merchandise trade growth in the medium term following reforms conducive to economic recovery, the Department of Finance (DOF) said. In an economic bulletin last Saturday (April 2), the DOF’s chief economist and former undersecretary Gil Beltran noted that despite the Omicron-induced infection spike last January that revived stricter pandemic restrictions, combined exports and imports grew 20.1 percent year-on-year to $16.8 billion. The value of imported goods at the start of this year jumped 27.5 percent to $10.7 billion, while exports rose 8.9 percent to over $6 billion. “Key structural reforms such as the recently passed amendments to the Retail Trade Liberalization Act, the Foreign Investments Act, and the Public Service Act, will play an important role in sustaining the continued recovery of economic activities,” Beltran said.

DOH monitoring ‘Omicron XE’ case reported in Thailand

The Department of Health is in talks with the World Health Organization regarding the "Omicron XE," a hybrid of the BA. 1 and BA. 2 subvariants. DOH's statement comes a day after the Philippines' neighboring country Thailand recorded its first case of the mutant hybrid. “Observation and monitoring are still ongoing on whether the variant would be categorized as a sub-variant of Omicron or a new variant to be named by WHO should it display any significant change in characteristics," it said. DOH assured it is also working with the Philippine Genome Center to monitor COVID-19 case trends and conducting genomic surveillance activities amidst the threat of new and existing variants. It added that the country is implementing safety measures to prevent the initial entry of the variant.