ECCP at Work

PHL needs to grow over 6% to cut debt

THE Philippine economy needs to grow above six percent annually in the next five to six years to reduce the country’s debt, Finance Secretary Carlos G. Dominguez III said on Thursday. “The biggest challenge for the next administration is really to grow out of the debt that we incurred during the pandemic, which was natural because our revenues went down due to the lockdowns and we increased expenditures,” he told Bloomberg Television. “The next administration would have to design policies and stick to very strict fiscal discipline to grow out of this debt problem.”

2021 trade deficit widest in 3 years

THE Philippines’ trade deficit further widened to a three-year high in 2021 as imports continued to outpace exports amid a coronavirus pandemic, latest data from the Philippine Statistics Authority (PSA) showed. Final results of the PSA’s international trade data showed the value of outbound shipment of goods jumped by an annual 14.5% to $74.653 billion last year, a turnaround from the 8.1% drop in 2020. This was the fastest since the 19.7% increase in exports in 2017.

Low purchasing power risk to FMCG industry recovery

Following an 11-percent decline in sales of fast-moving consumer[s] goods (FMCG) the past two years, data, insights and consulting company Kantar said brands in the FMCG industry will become cautiously optimistic about their growth prospects despite initial signs of recovery. Pointing to low purchasing power and other factors, Lourdes Deocareza-Lozano, new business director at the Worldpanel Division of Kantar Philippines, said the FMCG industry is not yet back to pre-pandemic level.

EXCLUSIVE: Neda: Govt to prioritize financing of mature tech

THE government will be prioritizing the financing of mature technologies under the Philippine Innovation Fund this year and the next, according to the National Economic and Development Authority (Neda). Neda Undersecretary for Planning and Policy Rosemarie G. Edillon told the BusinessMirror that while there is already a proposal for the “Innovation Fund,” the exact amount will still be determined in six months’ time.

Green tourism, hotel sustainability initiative: DOT, WTTC back climate change mitigation efforts

The Department of Tourism on Thursday expressed commitment to support the global climate change mitigation efforts by promoting green tourism, among others. At the opening of the World Travel and Tourism Council Global Summit being staged in Manila, Tourism Secretary Bernadette Romulo-Puyat cited that while the tourism sector has been devastated by the COVID-19 pandemic, the health crisis that prompted temporary lockdown in several areas across the globe gave and the halt in tourism activities gave the environment a reprieve and nature a chance to regenerate.

NGCP eyes P160B capex

The National Grid Corporation of the Philippines (NGCP) is allotting P160 billion in capital expenditure as filed with the Energy Regulatory Commission (ERC) for the fifth regulatory period from 2021 to 2025. NGCP’s capex needs the approval of the ERC as the regulatory body is mandated to assure all planned projects and activities that will affect power rates are [l] justified and are needed to improve and assure continuous operations of the system.

NGCP said bulk of the capex or P111.4 billion is for transmission projects including P12.87 billion for the Pasay 230 kilovolt (kV) substation; P3.49 billion for the Manila (Navotas) 230kV substation; P6.06 billion for Marilao extra high voltage substation; P1.15 billion for New Antipolo 230kV substation; P9.53 billion Taguig extra high voltage substation; P3.26 billion Taguig-Taytay 230kV transmission line; and the P7.21 billion Taguig-Silang 500kV transmission line.

R&I keeps Philippines’ investment grade rating

JAPAN-BASED Rating and Investment Information, Inc. (R&I) maintained the Philippines’ credit rating at BBB+ with a stable outlook as the economy continues to recover from the pandemic. However, the debt watcher warned that soaring crude oil prices will continue driving inflation higher. “The Philippine economy has been demonstrating solid growth since the second quarter of 2021 despite the new wave of coronavirus disease 2019 (COVID-19) infections,” R&I said in a statement on Monday. The ratings agency last affirmed the Philippine sovereign rating in April 2021.

PHL seen to lead regional growth this year

The International Monetary Fund (IMF) believes the Philippines will lead the growth among the Association of Southeast Asian Nations (Asean) this year, amid the lingering effects of the pandemic globally. In its World Economic Outlook (WEO) released on Tuesday night, the IMF data showed an upgrade of its Philippine growth forecast from 6.3 percent to 6.5 percent for this year. For next year, the global monetary authority projects a 6.3-percent growth for the country. 

US says PH welcome to join Indo-Pacific economic framework

The United States said the Philippines is welcome to join its Indo-Pacific Economic Framework (IPEF), Washington’s proposed vehicle for strengthened US economic engagement in the Indo-Pacific region. This was the response of US Trade Representative (USTR) Ambassador Katherine Tai to Trade Secretary Ramon Lopez who expressed the Philippines’ interest in joining the initiative during their bilateral meeting in Washington DC on April 18. IPEF seeks to operationalize shared objectives around trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonization and clean energy, infrastructure, worker standards, and other areas of shared interest.The Philippines expressed hope the IPEF will aim to be more inclusive and will have diverse participation from other interested countries in the region including the Asean. In response, Tai mentioned in the meeting that the Philippines is an important country in the Indo-Pacific and is welcome to join the initiative.

IMF raises Philippines 2022 growth target to 6.5%

The International Monetary Fund (IMF) has raised its 2022 gross domestic product (GDP) growth forecast for the Philippines to 6.5 percent  from the original target of  6.3 percent, making the country the fastest growing economy among members of the Association of Southeast Asian Nations-5 (ASEAN-5). Based on the April 2022 World Economic Outlook (WEO), the Philippines’ GDP expansion is faster than the 5.3 percent average of the ASEAN-5: Vietnam’s six percent, Malaysia’s 5.6 percent, Indonesia’s 5.4 percent and Thailand’s 3.3 percent. Despite the upgrade, IMF’s projection is still below the seven to nine percent GDP growth target set by economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC).

Philippines posts $754 million BOP surplus

The Philippines finally booked a balance of payments (BOP) surplus in March, ending two straight months of deficit, as the government tapped the offshore debt market to fund COVID response measures as well as key infrastructure projects, according to the Bangko Sentral ng Pilipinas (BSP). The country’s BOP position yielded a $754 million surplus in March, reversing the $73 million deficit in the same month last year as well as the $157 million shortfall recorded in February. “The BOP surplus in March  reflected inflows arising mainly from the national government’s net foreign currency deposits with the BSP and its income from investments abroad,” the central bank said. The Philippines successfully raised $2.25 billion from its first foray into the offshore bond market this year despite the volatile global financial market. The fund raising activity included the maiden $1-billion green bond issuance. To fund the widening budget deficit, the government plans to borrow P2.2 trillion this year, of which about 25 percent will come from global bond issuance and official development assistance (ODA) loans.

BSP to closely supervise cash agents

The Bangko Sentral ng Pilipinas (BSP) will closely monitor and supervise cash agents as it ramps up efforts to achieve its twin goals of financial inclusion and payments digitalization. The central bank has partnered with the Alliance for Financial Inclusion (AFI) to launch the agent registry for cash agents. BSP Governor Benjamin Diokno said the registry is a regulatory technology tool that would strengthen the BSP’S supervision of cash agents. “The registry will facilitate standardized and timely collection of agent data and create a public database that will help customers locate the nearest accredited agents and their available financial services,” he said. Cash agents are retail outlets, such as sari-sari stores, convenience stores, supermarkets, pharmacies, and pawnshops, that provide basic banking services, such as cash deposits, cash withdrawals, balance inquiry, fund transfer and bills payment.

Tourism sector contributed to Philippines’ 4th fastest growing economy rank in 2021 –report

The rise of the tourism sector’s contribution to the Philippine economy in 2021 helped the country rank as the world’s fourth fastest-growing economy last year. This was stressed by World Travel and Tourism Council President Julia Simpson at a press conference on the first day of the global summit being hosted by the Philippines from Wednesday to Friday. Simpson shared the Philippine data on WTTC’s Economic Impact Report (EIR) where she highlighted the growth of the country’s travel and tourism sector in 2021. The WTTC’s EIR showed that in 2021, the sector supported 7.8 million jobs, which is equivalent to 20.5% growth in 2020, compared with a global increase of 6.7%. The WTTC president said that it should be noted that before the COVID-19 pandemic or in 2019, the country’s travel and tourism industry’s contribution to the Gross Domestic Product of the total economy was 22.5% or US$92.6 billion. However, these contributions declined by 80.7% or US$ 17.8 billion or just a mere 4.85% share to the national economy due to the travel restrictions imposed and the closure of international borders.

BIR’s tax collection efforts improved by younger, tech-savvy workforce

The Department of Finance has commended the improvement in the tax collection efforts of the Bureau of Internal Revenue (BIR) following its digitalization transformation initiatives and hiring of a younger and tech-savvy workforce. In a statement released Wednesday, Finance Secretary Carlos Dominguez III noted that the BIR's digitalization transformation (DX) programs have "really helped continue the tax collection effort, especially during the pandemic.” With the expansion of the use of digital payment channels for tax dues, about P1.75 trillion of the P2.08 trillion tax collection in 2021 was collected electronically, the BIR chief added. In 2021, 23.78 million tax returns were electronically filed. These were 93 percent of the 25.66 million tax returns filed that year.