PH economy grows 8.3% in first quarter of 2022
The Philippine economy maintained its growth momentum in the first three months of 2022 as it expanded by 8.3%, Philippine Statistics Authority figures released Thursday showed. The latest expansion outpaces the 3.8% contraction from January to March last year and 7.8% pace logged in the last three months of 2022.
FTAs locked in, unaffected by change in gov’t, DTI says
Trade relations are not expected to be affected with the imminent change in government, according to the Department of Trade and Industry (DTI). Trade Assistant Secretary Allan B. Gepty said in a webinar hosted by the Economic Journalists Association of the Philippines on Wednesday that free trade agreements (FTAs) that include the Philippines are locked in and will not be altered by who is in charge. “Our economy is well integrated in the global economy. One big factor that fortifies this integration to the global economy is our free trade agreements. In other words, take note (that) these FTAs are international agreements. Regardless of the administration, the fact remains that we are working under a rules-based set-up,” Mr. Gepty said.
Palace names transition team members
Malacañang in an administrative order released on Tuesday named the five members of the transition team tasked to oversee the smooth turnover of government business to President-apparent Ferdinand Marcos Jr. The PTC is chaired by Executive Secretary Salvador Medialdea, with Foreign Secretary Teodoro Locsin Jr., Finance Secretary Carlos Dominguez III, Socioeconomic Planning Secretary Karl Kendrick Chua and Budget Undersecretary Tina Rose Marie Canda as members.
Net inflows of foreign direct investments (FDI) jumped by 46.3% year on year in February, as the further reopening of the economy lifted investor confidence. Data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed that FDI net inflows climbed by 46.3% to $893 million in February from $611 million in the same month in 2021. This was the highest monthly FDI inflow recorded since the $10.5 billion in December last year. In February, FDI net inflows rose by 9.03% from $819 million in January.
Farm output dips slightly in Q1, fertilizer price spikes blamed
The value of the country’s agricultural output in the first quarter slightly dipped by 0.3 percent after production in crops, fisheries and livestock sectors contracted, buoyed by a double-digit rate of increase in poultry output. The agriculture chief blamed soaring fertilizer prices, fueled by the war in Ukraine, as a key factor for contraction. The value of the farm output from January to March (at constant 2018 prices) declined by P75.246 billion to P419.922 billion from P495.168 billion recorded in the same period of last year, Philippine Statistics Authority (PSA) data showed.
DTI still hopeful for RCEP concurrence this month
The Department of Trade and Industry (DTI) remains hopeful that the Senate will concur with the Regional Comprehensive Economic Partnership (RCEP), the Asean-led free trade deal with its five free trade partners, this month. This, as Congress is expected to resume its session on May 23. “At present, our focus is on the present Congress… We will try our best that the RCEP will finish the process when the Senate resumes this month,” DTI Assistant Secretary Allan Gepty said in a webinar of the Economic Journalists Association of the Philippines (EJAP) Wednesday. After it was ratified by President Rodrigo Duterte in September last year, the Senate’s concurrence on RCEP is needed before the country can deposit its instrument of ratification. The country can reap the benefits of the free trade agreement (FTA) two months after depositing the ratification document
Business groups outline priorities for Marcos
Business groups and foreign chambers would like to see the incoming Marcos administration prioritize reforms to attract more foreign investments, assist pandemic-hit small businesses and create much-needed jobs. Former Senator Ferdinand “Bongbong” R. Marcos, Jr. had a commanding lead in the presidential race with more than 30 million votes, based on the latest unofficial tally by the Commission on Elections. “We urge the incoming government leaders to build on the momentum and successes of the previous administrations. We look forward to further improvements in economic openness to increase trade, foreign direct investment (FDI) inflows and job creation,” Lars Wittig, European Chamber of Commerce of the Philippines (ECCP) president, said in a Viber message. Mr. Wittig said he would like to see the new president focus on sustainability-related reforms, investments in education and nutrition, and institutional reforms on good governance and transparency.
Growth of manufacturing jumped to its highest pace in seven months last March, the Philippine Statistics Authority’s (PSA) of the Monthly Integrated Survey of Selected Industries. Volume of production expanded 336.3 percent in March, reversing the 73.3 percent contraction recorded last year. Production has growing for 12 months straight in March. Of the 22 industries in the survey, 15 posted an expansion led by manufacture of coke and refined petroleum products at 2,175.6 percent annual growth rate. Seven industries posted a contraction with the manufacture of electrical equipment contracting the biggest at 36.5 percent. Production recorded a 352.8 percent expansion in terms of value compared to a 74.1 percent contraction last year.
PH gets better political risk rating, but 2022 growth still in doubt
The Philippines has gained brownie points for holding generally smooth elections, but economists still doubt the country’s growth prospects for the year as they await clues to the economic policies of President-apparent Ferdinand Marcos Jr. Fitch Solutions, in their latest country risk assessment, said a Marcos victory “bodes well for policy continuity” in the country and suggests a smooth transition from the outgoing Duterte administration. “We have raised the Philippines short-term political risk index (STPRI) score to 66.5 out of 100, from 64.0 previously,” Fitch Solutions said in the report. A higher score means greater political stability in a country and less risk for investors. Short-term means the outlook horizon reaches 12 months ahead. The slight improvement in the Philippines’ STPRI score is based solely on an improvement in the policy continuity component, with Fitch Solutions raising the score to 80 from 70. The other components are unchanged.
PH debt now 63.5 percent of GDP
As debt piled up at a faster pace than first-quarter economic growth, the Philippines’ outstanding obligations as a share of gross domestic product (GDP) further climbed to 63.5 percent as of March. The latest Bureau of the Treasury (BTr) data on Thursday (May 12) showed that the latest quarterly debt-to-GDP figure was the highest since 65.7 percent in 2005. The government earlier on Thursday reported that GDP grew by a better-than-expected 8.3 percent year-on-year during the January-to-March period on the back of further economic reopening, and notwithstanding the Omicron surge at the start of this year.
Foreign chamber mulls expansion in Iloilo City
A foreign chamber is set to open an office in Iloilo City to spur business activities and investments in the city. The European Chamber of Commerce of the Philippines (ECCP) headed by Executive Director Florian Gottein visited the office of Iloilo City Mayor Jerry Treñas on Wednesday, May 11, 2022. The group bared their plans of expanding their operations in Iloilo City by establishing an office – the first foreign chamber office in the metro, the mayor revealed.Tthe new development shows that the city has a positive economic outlook especially that it is already within the radar of big businesses, Treñas said.
Inflation should be Marcos’ top priority — NEDA chief
The next administration should make it a top domestic priority to fight high inflation, according to Socioeconomic Planning Secretary Karl Kendrick T. Chua. “Since we are doing relatively well on the economic opening as evidenced by the Q1 data, the immediate priority is to address inflation, especially those that affected people the most, food prices,” Mr. Chua, who also heads the National Economic and Development Authority (NEDA), said at a briefing on the first-quarter economic data on Thursday. The Philippine economy grew by a better-than-expected 8.3% in the first quarter. Inflation has accelerated in recent months, threatening to dampen consumer spending and hurt recovery prospects. Inflation surged to an annual 4.9% in April, the highest in more than three years due to soaring food and energy prices.
Incoming administration needs to ensure ‘investment efficiency’ — Fitch
A continued focus on infrastructure under the next administration will help drive post-pandemic growth recovery, but the next administration should ensure it will continue governance standards and debt management, Fitch Ratings said. Under a government led by Ferdinand R. Marcos, Jr., investments that will address infrastructure gap in the Philippines could help offset pandemic scarring on the economy, the debt watcher said in a note on Thursday. Fitch said it expects the Marcos administration to continue focusing on infrastructure, which is a key element for medium-term growth that supports the country’s investment grade “BBB+” rating. “However, investment efficiency is critical. A deterioration of governance standards could, over time, dilute the positive effect of investment on productivity growth,” Fitch Ratings said.
Q1 GDP surpasses pre-pandemic level
The Philippine economy expanded by a better-than-expected 8.3% in the first quarter, surpassing the pre-pandemic output level as household spending surged amid the easing of coronavirus curbs. Preliminary data released by the Philippine Statistics Authority (PSA) showed gross domestic product (GDP) accelerated by 8.3% year on year in the January to March period, a turnaround from the 3.8% contraction in the same period last year. It was also faster than the revised 7.8% growth in the fourth quarter of 2021. It also beat the median estimate of 6.7% in a BusinessWorld poll and was within the government’s 7-9% target.The first-quarter growth was the highest in three quarters or since the 12.1% seen in the second quarter of 2021. The first-quarter growth was the highest in three quarters or since the 12.1% seen in the second quarter of 2021.
WB: With lowest fees in Asia, PH fourth biggest remittance destination in 2021
As sending money back home to the Philippines was among the cheapest in the region, the country was the fourth-biggest recipient of remittance flows from migrant workers in 2021, the World Bank said. In its latest Migration and Development Brief published on May 10, the World Bank said that the top five destinations of remittances last year were India ($89 billion), Mexico ($54 million), China ($53 million), the Philippines ($37 million), as well as Egypt ($32 million). “The Philippines benefited directly from job creation and wage gains in the United States, which accounted for almost 40 percent of remittance receipts,” World Bank said. “The country registered a moderate 4.3-percent advance in the year to $37 billion,” it said.
DTI wants zero tariff on e-vehicles
The Department of Trade and Industry (DTI) wants tariffs on electric vehicles (EVs) removed for a period of five years to help encourage demand and generate investments for the EV industry. During the hearing conducted by the Tariff Commission on the proposed temporary lifting of most favored nation (MFN) tariff on EVs and parts and components yesterday, DTI-Board of Investments chief investment specialist Reynaldo Lignes said the DTI wants to remove the tariff on EVs, regardless if it originated from MFN or a free trade agreement partner country, for a period of five years. “This is envisioned to drive down the purchase price of EVs, thereby generating demand and encouraging investments in charging stations and most importantly, to reduce the country’s vulnerability to heavy dependence on oil imports,” he said.
PH shares tank another day despite glowing GDP data
The benchmark Philippine Stock Exchange Index (PSEi) tumbled 1.56 percent on Thursday as investors sold down their shares despite government data showing a strong rebound in the economy during the first three months of 2022. By the closing bell, the PSEi fell 103.56 points to 6,532.30 while the broader all-shares index lost 1.15 percent, or 40.76 points, to 3,517.21. Local banking and property stocks were battered amid a regional slump after the United States government announced a higher-than-expected April inflation of 8.3 percent. On Thursday morning, the Philippine Statistics Authority said first quarter gross domestic product (GDP) expanded by 8.3 percent versus the 7.8 percent contraction recorded during the same period in 2021. “Philippine shares plunged despite the better-than-expected GDP, as sentiment was dragged by hotter-than-expected US inflation data,” Luis Gerardo Limlingan, managing director at Regina Capital Development, said in a note to investors on Thursday.
Green energy auction set to start next month
The Department of Energy (DOE) has set the country’s first green energy auction (GEA) next month. In an advisory posted on its website, the DOE said it revised the timeline for the conduct of the GEA on or before June 17 and the notice of award by June 24. Meanwhile, a pre-bid conference is scheduled on or before June 1. “The pre-bid conference and all subsequent activities shall only be conducted upon the release of the green energy auction reserve (GEAR) prices by the Energy Regulatory Commission (ERC) on or before May 30,” the DOE said. With the new timeline, the conduct of GEAP comes after a year it was originally scheduled to take place. The June 2021 launch was deferred as the DOE revised the auction design due to a reduction in demand because of the COVID-19 pandemic. Under the first GEA, the DOE will auction off 2,000 megawatts (MW) of renewable energy (RE) capacity across the country, as indicated in the notice of auction published in January.
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