ECCP at Work

Growth forecast scaled back to 6%

The Russia-Ukraine conflict would trim down growth projection this year to 6 percent from the original forecast of 7 to 9 percent, according to Trade Secretary Ramon Lopez. At 6 percent, growth will even be slightly slower than the 6.1 percent registered in 2019, prior to the pandemic. Lopez told a television interview the external shocks coming from the war between Ukraine and Russia is a major concern. “The earlier projections for this year should have been about 7 to 9 percent. And this growth rate projection for this year have been tempered down. We’re back to the initial projections of about 6 percent,” Lopez said. Lopez said the National Economic and Development Authority (NEDA) in earlier presentations had projected GDP growth at 6 to 6.5 percent but adjusted it upwards to 7 to 9 percent.

April inflation likely picked up — poll

Inflation likely accelerated beyond the central bank’s target in April, as food and oil prices continue to climb amid the ongoing Russia-Ukraine war and agricultural damage caused by Tropical Storm Agaton. A BusinessWorld poll of 17 analysts yielded a median estimate of 4.6% for April inflation, matching the midpoint of the 4.2% to 5% forecast by the Bangko Sentral ng Pilipinas (BSP).

Trade dep’t claims to hit recovery blueprint jobs target of 1 million

THTheE Department of Trade and Industry (DTI) said the 1-million-job target set by the National Employment Recovery Strategy (NERS) has been achieved. “Based on the last report that I got, I know that we have reached already the 1-million-job (goal) that was set as the NERS target. Because in the last meeting, we were close to that. My recollection is about 980,000 jobs already created,” Trade Secretary Ramon M. Lopez said during the 2022 Task Group on Economic Recovery-NERS Labor Day Job Summit on Sunday.

Election spending seen to boost growth this year 

Election-related spending may boost the Philippine economy’s growth momentum this year, with media, advertising and services sectors seen benefiting the most, according to economists. “In previous elections, election-related spending would spur the economy and an estimate of about 0.5% to 1% is usually added onto annual economic growth,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail. “I suspect the impact may be the same on an annual basis.” Economic managers expect gross domestic product (GDP) to expand by 7-9% this year, after growing by 5.7% in 2021.

BOT IRR seen forcing private partners to take on more risk

The revised implementing rules and regulations (IRR) of the Build-Operate-Transfer (BOT) Law will compel private proponents to shoulder more risk, possibly giving them pause before entering into future private-public partnerships, an economist said. “The revised IRR places a lot more risk on the private sector by absolving the government of any project delays and increased costs,” Ateneo de Manila University Economics Professor Leonardo A. Lanzona said in a Viber message.

Liberalization bills seen producing spate of SEC foreign ownership rulings 

The Securities and Exchange Commission (SEC) is expected to expedite rulings involving companies with foreign ownership cases, following the passage of three laws liberalizing foreign participation in various industries. “With the signing of the amendments of the Foreign Investments Act (FIA), the Public Service Act (PSA), and the Retail Trade Liberalization Act (RTLA), the regulatory body may now quickly resolve pending cases, a move that will help the Philippines hasten its recovery from the pandemic,” former SEC Secretary Gerard M. Lukban said in a statement.

Southeast Asia travel catching up as COVID curbs ease

Southeast Asia is finally, tentatively throwing off the shackles of the coronavirus disease 2019 (COVID-19) and reopening for travel, with airlines filling an increasing number of seats as holiday-starved masses arrange overseas vacations for the first time in two years. While the region lags other places such as North America and Europe that reopened sooner, the upward momentum gathered pace in April. Ticket bookings are rising as popular tourist destinations like Thailand, Malaysia and Indonesia allow quarantine-free entry for vaccinated travelers again.

Electric vehicles law attracts 10 new players

The local electric vehicle (EV) industry expects new investments and new players to come in once the Electric Vehicle Industry Development Act Republic Act (RA) 11697 is fully implemented. The EV Association of the Philippines (EVAP) said at least 10 companies in various sectors of the industry from four countries are keen on the Philippines in anticipation of the law’s full implementation and the increasing use of EVs in the country. The interest is also sparked by the move of the government to eliminate tariffs on imported EVs.

More BPO workers prefer hybrid: poll

A new poll conducted by the Information Technology Business Process Association of the Philippines (IBPAP) showed an even higher proportion of its members’ employees prefer hybrid work. An Employee Sentiment Survey in March showed 83 percent of those polled prefer a combination of work-from-home and onsite work compared with 60 percent the previous month.

Oil firms to slash fuel prices next week

Oil companies are expected to impose a rollback on the prices of fuel products starting May 3 until May 9, Unioil Petroleum Philippines said on Saturday. According to forecast, diesel price is seen to go down by ₱1.10 to ₱1.20 per liter and gasoline price is expected to decline by ₱0.60 to ₱0.70 per liter.

‘Elections driving demand for low-cost rice’

The upcoming elections and the government’s relief operations are driving the demand for low-cost imported rice, according to an industry group. [Multisector] industry group Philippine Rice Industry Stakeholders Movement (Prism) noted that rice imports rose in the first quarter even before the Ukraine-Russia war erupted.

BSP to ensure sustainable recovery before tightening 

The Bangko Sentral ng Pilipinas (BSP) may consider hiking its key interest rate in June if economic growth and employment data show recovery is now entrenched, its governor said. “We really have to balance whether the recovery that we are seeing is sustainable. That’s why we are going to wait for the GDP (gross domestic product) number for the first quarter,” BSP Governor Benjamin E. Diokno said when asked by ABS-CBN News Channel if the BSP is prepared for the possible consequences of raising interest rates by June. “By [June]…we’ll also have more data on employment, whether employment continues to improve, and so forth, and [if] those things suggest that the recovery is sustainable, maybe we will act accordingly under these cases,” he added. First-quarter GDP data is expected to reflect the impact of looser pandemic restrictions as coronavirus disease 2019 cases dropped..

Firms on hybrid work may register with BOI

Enterprises wishing to implement work-from-home and other hybrid work models may register with the Board of Investments (BOI) to continue enjoying their incentives. In a television interview, Trade Secretary Ramon Lopez offered this option to registered business enterprises particularly information technology-business process management companies currently with the Philippine Economic Zone Authority (PEZA) which have been ordered to return to their ecozone locations effective April 1, 2022 to retain their incentives. Lopez said the other option is to amend the PEZA law in the next Congress as the current mandate is that the activities should be undertaken within the ecozones. Lopez said while this is a limitation, “there’s room for a liberal application and implementation.”

Gov’t leaves to next admin decision on vaccine investments

Unable to commit to procure the products of investors eyeing to set up manufacturing facilities for vaccines in the country, the government is leaving it up to the next administration the decision to whether or not pursue these investments. “There are still those interest on vaccine (manufacturing)… but… normally what (investors) would also require is a market commitment for government procurement. That is where we could not commit at the moment,” said Trade Secretary Ramon Lopez in a television interview yesterday. The DTI in May last year signed Joint Memorandum Circular (JMC) to streamline and expedite the processing of permits and clearances for the establishment of local vaccine manufacturing facilities as it was actively seeking investment interests in so the country could have its own vaccines.

Lifting of import ban, issuance of guidelines sought

Fisheries and aquaculture groups renewed calls for the Department of Agriculture (DA) to lift the import ban on porcine processed animal protein (PAP) from Italy and to issue a local guideline on the raw materials’ use. The DA in February banned imported pork products from Italy after a wild boar tested positive for the African swine fever (ASF). Local aqua feeds manufacturers source around 70 percent of the 150,000 metric tons (MT) of imported PAP annually from Italy. The groups said in a position paper should the government allow the entry of PAP from Italy, a guideline must be created on the importation of processed animal proteins from countries affected with ASF to allay the fears of the local pork sector.

Peso to further weaken as trade deficit widens

The Philippines peso is expected to weaken to 53.50:$1 by June amid the widening trade deficit, although the local currency is seen gaining strength for the remainder of the year. According to the Netherlands-based ING Bank, the Philippine trade deficit was expected to have expanded to $4.9 billion in March, widening by two-fifths from $3.5 billion in February and by four-fifths from $2.7 billion in March 2021. England-based Pantheon Macroeconomics expects $4.7 billion while HSBC believes it will reach $4.4 billion. “Philippine imports should sustain the trend of double-digit gains, driven by an expected surge in fuel imports given elevated global crude prices,” ING Bank said in a commentary.

BSP receives source code for 2022 polls

THE Bangko Sentral ng Pilipinas (BSP) announced on Monday it received from the Commission on Elections (Comelec) the final source code for the May 9, 2022 national and local elections. The Comelec handed over to the BSP the final trusted build of the transmission router source code, which is needed to ensure the secure distribution of election results and other related data to different endpoints. The source code was deposited in a high-security vault, as mandated by Republic Act 9369 or “The Election Automation Law.”

Taxman coming for Netflix, et al.

The Bureau of Internal Revenue (BIR) is working on a system to collect value-added tax (VAT) from foreign digital service providers, including global giants like Amazon, Google, Netflix and Spotify. “Currently, the BIR, through technical assistance from the Asian Development Bank, is developing the online registration and update system (Orus) that will allow taxpayers, both residents and nonresidents, to register with the BIR online. The Orus is expected to be rolled out before the end of the Duterte administration,” Nina Asuncion, director of Department of Finance (DOF), told a Senate ways and means committee hearing on the imposition of 12-percent VAT on digital transactions on Monday afternoon.