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EU NEWS UPDATES

TEN-E: Council gives green light to new rules for cross-border energy infrastructure

The Council adopted on May 16 a revised Trans-European Networks for Energy (TEN-E) Regulation. The new rules aim to modernise, decarbonise and interconnect member states’ cross-border energy infrastructures in order to help the EU achieve its 2050 climate neutrality objectives. The revised regulation also aims to continue ensuring market integration, competitiveness and security of supply. The adoption follows a provisional agreement reached with the European Parliament in December 2021 and is the final step of the adoption procedure.

Cyber-attacks: Council extends sanctions regime until 18 May 2025

The Council on May 16 decided to prolong the framework for restrictive measures against cyber-attacks threatening the EU and its member states for a further three years, until 18 May 2025. This framework allows the EU to impose targeted restrictive measures on persons or entities involved in cyber-attacks which cause a significant impact, and constitute an external threat to the EU or its member states. Restrictive measures can also be imposed in response to cyber-attacks against third states or international organisations where such measures are considered necessary to achieve the objectives of the Common Foreign and Security Policy (CFSP).

Council approves Data Governance Act

After the European Parliament, the Council approved a new law to promote the availability of data and build a trustworthy environment to facilitate their use for research and the creation of innovative new services and products. The Data Governance Act (DGA) will set up robust mechanisms to facilitate the reuse of certain categories of protected public-sector data, increase trust in data intermediation services and foster data altruism across the EU. It is an important component of the European strategy for data, which aims to bolster the data economy. The new rules will apply 15 months after the entry into force of the regulation.

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Newbies, reelectionists, returnees top 2022 senatorial elections

Fresh faces and veteran lawmakers make up the "Magic 12" in the 2022 senatorial elections. The Commission on Elections (Comelec) on Wednesday formally proclaimed the 12 senatorial candidates who received the highest number of votes in the recently concluded national polls. They are: Robin Padilla, Loren Legarda, Raffy Tulfo, Sherwin Gatchalian, Chiz Escudero, Mark Villar, Alan Peter Cayetano, Juan Miguel Zubiri, Joel Villanueva, JV Estrada Ejercito, Risa Hontiveros, and Jinggoy Estrada.

OCTA: Metro Manila sees 19% uptick in new COVID-19 cases, but still at ‘low risk’

The National Capital Region (NCR) has recorded an increase in new COVID-19 cases over the past week, OCTA Research reported on Friday. The independent research group said the daily average number of new infections in Metro Manila rose to 71 from 59 – or by 19% – during the May 13-19 period, compared to the preceding week. NCR overall still remains at “low risk” level, the report showed. However, the region’s reproduction rate – or the number of people infected by a single case – climbed from 0.76 to 0.90, or from “low” to “moderate” classification.

BIR inspects call centers’ compliance with return-to-onsite work order

The Bureau of Internal Revenue (BIR) has formed a task force that started checking on compliance with the 100-percent return-to-workplace rule among business process outsourcing (BPO) firms who had decided to keep their tax perks. Deputy Revenue Commissioner Arnel Guballa recently reported to Finance Secretary Carlos Dominguez III that the BIR already issued mission orders to conduct ocular inspections at facilities of BPO companies registered with investment promotion agencies (IPAs). The BIR had been tasked with collecting monthly income tax from BPOs whose workforce will fall short of the full-capacity requirement beginning in April. The interagency Fiscal Incentives Review Board (FIRB), which oversees the grant of tax breaks to qualified businesses, earlier ruled that work-from-home among BPO firms operating inside economic zones was only a temporary measure amid lockdowns imposed during the past two years to contain the spread of COVID-19. As such, BPO players can only keep their tax incentives intact if all of their employees return to the workplace.

Business groups press Congress to pass key economic reform bills [Mention]

Local business groups and foreign chambers once again pressed the outgoing 18th Congress to pass the last set of economic reform bills in its remaining session days. In a joint statement issued on Wednesday, thirteen business groups and foreign chambers said they sent letters to Congress leaders to urge them to pass six measures that have been approved at the House of Representatives, and are still pending at the Senate. “(We are) calling on Congress to pass additional achievable reforms in the remaining session days of the 18th Congress,” they said. The 18th Congress will resume session on May 23, before its sine die adjournment on June 3.

Coordinating panel proposed in draft IRR for Foreign Investment Act

The National Economic and Development Authority (NEDA) said its latest draft implementing rules and regulations (IRR) for amendments to the Foreign Investments Act of 1991 calls for the creation of a committee to coordinate efforts to attract foreign investment. NEDA released the new draft at a public consultation on Wednesday. The revised draft IRR, dated May 11, contains a new Section II dealing with the creation of an “Inter-agency Investment Promotion Coordination Committee” (IIPCC). The committee is tasked, according to Rule III — Powers and Functions, with “establish(ing) both a medium-and-long-term foreign investment promotion and marketing plan (FIPMP),” which will coordinate all existing investment development plans under the Board of Investments, the Philippine Economic Zone Authority (PEZA), and other Investment Promotion Agencies (IPAs), for a common framework.

EO to establish MSME franchise holder registry

President Rodrigo R. Duterte has signed an executive order (EO) setting up a registry for franchise holders officially classified as micro-, small-, and medium-sized enterprises (MSMEs), in order to better track and regulate franchising activity. The Palace said in a statement on Monday that under the order, which was signed by Executive Secretary Salvador M. Medialdea on behalf of Mr. Duterte last week, franchisors are responsible for registering their franchise agreements with the Department of Trade and Industry. The order applies to members of authorized franchise associations. It also requires franchisors who are not yet part of such associations to register their franchise agreements with MSME franchisees within 30 days of the order taking effect.

Space for accommodative policy narrowing, Diokno says: BSP set to begin tightening cycle

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on Wednesday said the space for keeping an accommodative policy is shrinking, amid rising inflation risks and the economy’s return to pre-pandemic level in the first quarter. “The space for maintaining an accommodative policy stance has considerably narrowed given how the April 2022 inflation of 4.9% settled near the higher end of the BSP’s forecast range of 4.2% to 5% [for the month],” he said at an online briefing. Mr. Diokno said the better-than-expected 8.3% gross domestic product (GDP) growth in the first quarter, and ongoing downside risks “strengthen the case for a withdrawal of monetary policy accommodation.” “While the BSP stands ready to deal with these risks to inflation and economic growth, any adjustments in the monetary policy stance will be done in a timely manner so as not to disrupt the growth momentum while preventing price pressures from becoming entrenched,” he said. The BSP chief’s more hawkish signals on policy came a day before the third rate-setting meeting of the Monetary Board for the year.

NCR wage hike takes effect June 3

A new minimum wage in the National Capital Region (NCR)  and Western Visayas will be implemented next month, the Labor department said on Wednesday, adding that workers in three other regions will soon see higher take-home pay. The P33 wage hike in Metro Manila and the P55-P100 increase in Western Visayas will take effect on June 3 after their separate wage orders were affirmed by the National Wages and Productivity Commission (NWPC), the Department of Labor and Employment (DoLE) said in a statement. DoLE said the wage boards in Ilocos, Cagayan Valley, and Caraga have also issued orders increasing minimum wages in these regions.

Biz groups push for RCEP ratification, other economic changes  [Mention]

Philippine and foreign business groups are pushing for the passage of economic reforms, including the Ease of Paying Taxes, as well as the ratification of the mega trade deal Regional Comprehensive Economic Partnership (RCEP) in the remaining days of the 18th Congress. The groups are the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce Philippines, Bankers Association of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Information Technology and Business Process Association of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines Inc., Korean Chamber of Commerce Philippines Inc., Makati Business Club, Management Association of the Philippines, Philippine Association of Multinational Companies Regional Headquarters Inc., and Semiconductor and Electronics Industries in the Philippines Foundation Inc. They urged Congress to approve pending economic bills in the last two weeks of sessions or from May 23 until June 3.

DENR to strictly monitor Tampakan mining

The Department of Environment and Natural Resources (DENR) said the Mines and Geosciences Bureau (MGB) will strictly monitor the operations of the Tampakan copper-gold project in Mindanao following the lifting of the open pit mining ban in South Cotabato. Jim Sampulna, DENR acting secretary, said the lifting of the ban signals Sagittarius Mines Inc. (SMI), proponent of the Tampakan copper-gold project, to proceed with the development of the area and to commercially extract minerals. “The environment will not be sacrificed. We will see to it the soon-to-commence Tampakan copper-gold project will be strictly monitored in compliance with applicable mining and environmental laws, rules, and regulations,” Sampulna said. Sampulna added MGB will also require SMI to invest in equipment and manpower to ensure mitigation in case of any adverse impacts from the mining operation.

Diokno hints at possibility of rate increase

The possibility of a rate hike for the first time in more than three years has increased as the space for accommodative monetary policy stance has narrowed significantly ahead of today’s rate setting meeting. During his weekly virtual press conference, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno hinted at the possibility of an interest rate increase in today’s rate-setting meeting of the Monetary Board. The last time the BSP delivered a rate hike was in November 2018 when it raised interest rates by 25 basis points, bringing the benchmark rate to 4.75 percent. In 2018, the Monetary Board raised interest rates by 175 basis points from three percent due to elevated inflation brought about by soaring global oil prices. Since then, the BSP has slashed interest rates by 275 basis points, including an aggressive 200-basis-point cut as part of COVID response measures in 2020, which brought the benchmark rate to an all-time low of two percent.

PH detects local transmission of Omicron subvariant BA.2.12.1

The Department of Health has detected a local transmission of the highly transmissible  Omicron subvariant BA.2.12.1, Health Undersecretary Maria Rosario Vergeire said Tuesday. Omicron is a variant of SARS-CoV-2, the virus that causes COVID-19. “While we have reported the detection of the Omicron subvariant BA.2.12.1 last week, we are here to tell you that there is already a local transmission of this subvariant of Omicron in the country” Vergeire said in a forum.

Wage hikes push BSP closer to policy tightening

The Bangko Sentral ng Pilipinas (BSP) appears to be holding on to its dovish feathers even as the regulator acknowledges narrowing space for an accommodative policy stance amid growing pressure on inflation as well as the beginnings of second-round effects on prices. BSP Governor Benjamin Diokno on Wednesday noted that headline inflation, after having breached the target band of 2 percent to 4 percent in April at 4.9 percent year-on-year, is expected to remain higher than desired.At the same time, Diokno said that along with the higher-than-expected 8.3-percent growth rate of Philippine gross domestic product in the first quarter, second-round effects—particularly wage hikes—were starting to manifest themselves. “The recent approval of minimum wage hikes [in Metro Manila and Western Visayas] leaves the door open for other approvals pending since 2020,” the BSP chief said.

ERC backs suspending fuel excise tax

THE Energy Regulatory Commission (ERC) is supporting the proposal to suspend fuel excise tax that, its chief said, could immediately and effectively bring down power rates. ERC Chairman Agnes VST Devanadera, who announced that her term will expire on July 10 this year, told reporters in a news briefing that the suspension of excise tax on coal and petroleum products can be immediately felt by consumers, and with the least impact to stakeholders other than electricity consumers. Devanadera explained that the current generation rate of the Manila Electric Co. (Meralco) due to the increasing coal and fuel prices is at P5.8724 per kilowatt hour (kWh). Prior to implementation of the next excise tax rate under Republic Act 10963 (Tax Reform for Acceleration and Inclusion, or Train, law), the generation rate is P5.8623/kWh. If excise tax rate under the TRAIN Law will be temporarily suspended, the rate reduction that can be felt will be at P0.0101, the ERC official said.

Credit raters awaiting incoming administration’s fiscal consolidation plan

Credit rating agencies will keep a close eye on how the incoming Marcos administration will manage the country’s mounting debt in assessing the Philippines’ sovereign rating. Moody’s Investors Service is also concerned over debt affordability as it reflects a sovereign’s fiscal flexibility, said Christian de Guzman, senior vice-president at Moody’s sovereign risk group. Debt affordability is the ratio of annual interest payments required to maintain a government’s debt to its annual tax revenues. “Indeed, while there has been a large increase in government debt that has in essence reversed the progress in debt reduction that was made in the decade prior to the pandemic, we have not seen a similarly large deterioration in debt affordability for the Philippines,” Mr. De Guzman said in an e-mail. The National Government’s outstanding debt rose to a record-high P12.68 trillion as of end-March, according to the Bureau of the Treasury (BTr).

As expected, BSP raises key rate by 25 bps to 2.25%

The Bangko Sentral ng Pilipinas (BSP) has raised its overnight borrowing rate by 25 basis points (bps) to 2.25 percent effective May 20, as it finally starts to tighten money supply in the domestic economy in anticipation of further increases in prices of basic commodities. The BSP’s key policy rate has been at a record low of 2 percent since November 2020 and analysts are expecting more increases in upcoming policy meetings of the Monetary Board (MB). Still, BSP Governor Benjamin Diokno said on Thursday the pace and timing of further rate actions would be guided by data as opposed to other factors such as respective moves by other central banks like the US Federal Reserve.

New minimum wage in NCR to take effect on June 4; more regions poised for wage hike — DOLE

The new order increasing the minimum wage in Metro Manila by ₱33 will take effect on June 4, the Department of Labor and Employment (DOLE) said. Rolly Francia, director of the DOLE-Information and Publication Service, announced this in a briefing on Wednesday, quoting Labor Secretary Silvestre Bello III. "'Yan ay matapos aprubahan o i-confirm ng National Wages Productivity Commission ang rekomendasyon na nagtataas ng ₱33 bawat araw para sa mga manggagawa dito sa National Capital Region," Francia said. The order would bring the minimum wage rate in the capital region to ₱570 for the non-agriculture sector and ₱533 for the agriculture sector.

Zero tariff on all EVs pushed

The Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) is pushing for the coverage of all electric vehicles (EVs) in the tariff  elimination on imports under a proposed executive order (EO). Rommel Gutierrez, Campi president, said the group supports the EO which  proposes the suspension of most-favored nation (MFN) tariffs on completely built-up EVs. But  Gutierrez said to remain consistent and  complementary to Republic Act No. 11697 or the Electric Vehicle Industry Development Act (EVIDA), the tariff elimination under the EO should not exclude hybrid EVs (HEVs), contrary to the proposal of  the EV Association of the Philippines. EVAP in a position paper asked the Tariff Commission to exclude from the planned tariff elimination HEVs, saying these are internal combustion engine (ICE) vehicles that do not contribute to the energy source diversification aim of the move. EVAP said the zero duty should be  limited to plug-in hybrid electric vehicles (PHEV) and full electric vehicles (EV).

JFC calls for creation of transport body [Mention]

The creation of a primary agency responsible for the conduct of impartial investigation on transportation-related accidents and incidents needs one last push towards adoption, the Joint Foreign Chambers (JFC) said. In a statement, the group said  it has asked  Congress to expedite the ratification of the reconciled version of the bicameral conference committee of Senate Bill No. 1077 and House Bill No. 9030, proposing the creation of a Philippine Transportation Safety Board (PTSB). The group said the bill creating the PTSB is ready for immediate passage with the bicameral conference committee of both chambers having been convened. Once ratified by both houses, the bill can finally be endorsed for enactment by the president. 

EO on franchising to promote entrepreneurship

A recently issued executive order aimed at strengthening  the franchising industry would  promote entrepreneurship and the protection of micro, small and medium enterprises (MSMEs), the Department of Trade and Industry (DTI) said. Following the issuance of EO 169 on strengthening the franchising industry, Trade Secretary Ramon Lopez said the government wants to ensure the protection of MSMEs as franchising is being promoted as a tried and tested business model for aspiring entrepreneurs. “We have to protect these MSME investors from opportunists and scams that take advantage of small entrepreneurs. These destroy the image of the franchise industry,” Lopez said. Through the EO, he said there are prescribed minimum terms and conditions for franchise agreements to protect MSME investors.Through the EO, he said there are prescribed minimum terms and conditions for franchise agreements to protect MSME investors.