ECCP at Work

Inflation rises further in May to 5.4%

The Philippine Statistics Authority announced Tuesday that inflation hit 5.4% in May, compared to 4.9% in April, with food and transport costs leading the increase in commodity prices. The recent pace, quicker than 4.1% in May last year, is within the 5-5.8% range expected by the Bangko Sentral ng Pilipinas for the period. The figure also breaches the central bank’s 2-4% goalposts for 2022.

IATF allows all establishments under Alert Level 1 to operate at 100% capacity

The government’s pandemic task force has allowed all establishments in areas under Alert Level 1 to operate at 100% capacity as long as proof of full vaccination is presented, especially in indoor establishments or mass gatherings, Malacañang said Tuesday. Acting presidential spokesman Martin Andanar said this was decided upon by the Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF) last Saturday, June 4.

Agri, economic recovery programs top priorities in Marcos 2023 budget

Agricultural and food security, climate change adaptation and economic recovery projects are among the priority programs that will be included in the proposed 2023 national budget, which needs to be submitted to the next Congress within 30 days from the opening of the regular session in July. Incoming Budget Secretary Amenah Pangandaman said in a statement that President-elect Ferdinand Marcos Jr. has instructed her to ensure that the 2023 National Expenditure Program contained his priority programs and projects.

Electronics, apparel to benefit from CPTPP

Sectors such as electronic equipment, apparel, machinery and metals are expected to benefit from the country’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Department of Trade and Industry (DTI) Bureau of International Trade Relations (BITR) said in a social media post a virtual dialog was recently conducted on the study that looked into the potential economic impact of the country’s accession to the CPTPP, a free trade agreement (FTA) covering  Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Climate commission, DOE to promote hybrid, e-vehicles

The Climate Change Commission (CCC) and the Department of Energy (DOE) are partnering toward promoting and mainstreaming the use of hybrid and electric vehicles in pursuit of a low-carbon, sustainable and climate-resilient development in the country. A plug-in hybrid electric vehicle (PHEV) was turned over to the CCC by the DOE last May 30 at the energy department’s office in Bonifacio Global City. The transfer is in line with DOE’s “Alternative Fuels Program for Transportation and Other Purposes,” which promotes the use of cleaner alternative fuels and energy technologies for transportation.

Diokno: Marcos Gov’t To Prioritize Ratification Of RCEP

The Regional Comprehensive Economic Partnership creates the world’s largest free trade area, accounting for about 30 percent of the global gross domestic product. The economic team of the incoming Marcos administration is set to push for the ratification of the country’s participation in the Regional Comprehensive Economic Partnership (RCEP). After the Senate adjourned its last session without taking a vote to ratify the RCEP, the Philippines joined Indonesia and Myanmar among countries not included in the world’s biggest trade agreement that took effect last Jan.1.

Frasco says ‘heavy investment’ in tourism infrastructure will spur economy

ncoming Tourism Secretary Christina Frasco said on Tuesday that “heavy investment” in infrastructure, especially to prop up tourism sites will buoy the country’s economy which was harshly hit by the COVID-19 pandemic. Speaking on ANC, Frasco said that these infrastructures would boost the access to tourism destinations. “I think that having a very, very strong foundation for the industry is very important and that means investing heavily in infrastructure as far as improving the connectivity and access to our tourist sites,” she said on ANC’s Headstart.

Food Tourism Should Be Prioritized, Says Incoming Tourism Chief

Incoming Department of Tourism secretary Christina Frasco underscored the importance of local cuisine to provide tourists with a “multi-sensory” experience during their visit to different destinations nationwide. Further development of food tourism is on the table for the incoming administration, according to incoming Department of Tourism secretary Christina Frasco. She noted how food tourism represents the “amazing quality” of local products and the talent of Filipinos which complement the beauty of the country’s famous tourist sites.

ADB Pushes For Face-To-Face Classes For Economic Growth

At present, just a little over 70 percent of public elementary and high schools in the country have returned to face-to-face learning, while the number is significantly smaller among private learning institutions. The Philippines should immediately address the scarring effects of school closures due to the pandemic so as not to face decline in its overall economic growth in the years ahead. In its recent blog, the Manila-based Asian Development Bank (ADB) said extensive impacts of prolonged closure of learning institutions are being felt in the whole of Asia.

Electronics industry to pursue dialogue with incoming gov’t on pathways to growth

The Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said it is seeking a dialogue with the incoming administration to discuss how to attract more investment in the electronics industry, the country’s leading generator of exports. SEIPI President Danilo C. Lachica said that the electronics industry wants to “get a dialogue scheduled with (President-elect Ferdinand R. Marcos, Jr.), the Cabinet, the Senate, and the House of Representatives. This dialogue will essentially clarify our concerns and hopefully prevent more capital flight and attract investment,” Mr. Lachica said in a recent television interview. “We’d like to discuss how we can harmonize policies, how we can possibly review Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, specifically the incentives rationalization, eliminating corruption, and promote ease of doing business, and upgrading education to improve the skills of university graduates,” he added.

Q2 consumer confidence drops due to inflation

Consumer sentiment deteriorated in the second quarter due to concerns about inflation, low incomes, and persistent high unemployment, the Bangko Sentral ng Pilipinas (BSP) said, though it noted that the outlook is more positive over the next 12 months. The BSP confidence index for the second quarter of the year fell to 6.4% in the first three months of the year from 9.3% in the final quarter of 2021, according to the results of its Consumer Expectations Survey issued on Friday.  “Respondents’ less upbeat sentiment for Q2 2022 stemmed from their concerns about: (a) the faster increase in the prices of goods, (b) low to no increase in income and (c) high unemployment rate,” the BSP said in a statement

ADB: Property taxes, valuation key to bolstering gov’t revenue

Property taxes should be a key area of focus for developing economies in Southeast Asia seeking to raise government revenue after the pandemic, the Asian Development Bank (ADB) said. During a webinar on Monday, ADB Economic Research and Regional Cooperation Department Advisor Donghyun Park said the collection of property taxes is hampered by issues like valuation. “I think an important source of tax revenue, for local governments and subnational governments, is in fact, property taxes,” Mr. Park said. “What is limiting property taxes which are very much underutilized in the region is proper market valuation.” “I think governance reform, especially at the subnational government level, is very important for mobilizing tax revenue at the subnational and local level.”

ADB cautions new admin on additional taxes

Asian governments, including the Philippines, need to be cautious in slapping additional taxes as the mobilization of tax revenues can be done in the medium term, especially as economies are just starting to recover from the pandemic, the Asian Development Bank (ADB) said. In a webinar yesterday, the ADB said the mobilization of tax revenue holds the key to financing higher government spending that is needed to support sustainable development. But the Manila-based multilateral lender also warned of the timing of implementing additional taxes that would likely be a burden to consumers.

Diokno sees no need for spending cuts

The incoming Marcos administration will not reduce government spending to address the ballooning budget deficit, Finance chief-designate and Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said. “There should be no cut in our expenditure plan. I think we should really focus on raising enough taxes. I’m confident that because of the tax system that the Duterte administration will leave… we will be able to raise enough taxes to ensure we will meet our deficit targets,” he told ABS-CBN News Channel on Monday. Mr. Diokno, who was picked by President-elect Ferdinand R. Marcos, Jr. to head the Finance department, said they will stick to the plan to bring down the government’s budget deficit to 3% of gross domestic product (GDP) by 2028.

Government slashes borrowings by 63% to P101 billion in April

As the government moves to reopen the economy to full capacity, it brought down its borrowings by 63 percent in April by minimizing both its domestic and external financing. According to the Bureau of the Treasury, the government cut its gross borrowings by 63 percent to P101.26 billion in April from P271.95 billion a year ago. On an annual basis, financing from local lenders declined by 37 percent to P66.38 billion, while  foreign financing plunged by 79 percent to P34.88 billion. The government borrowed from the domestic market by issuing P100.38 billion in fixed-rate Treasury bonds (T-bonds) in April. At the same time, it recorded a net redemption of P34 billion for Treasury bills (T-bills) during the month. The government secures financing from investors by auctioning T-bills and T-bonds every week. However, the Treasury has made partial awards and even full rejections ever since the US Federal Reserve started raising interest rates in March. Further, the government also returned to the Japanese debt market by issuing P28.55 billion in sustainability bonds, the first of its kind in the samurai portfolio.

‘PHL needs to overhaul agri insurance scheme’

Despite the rapid increase in subsidies extended by the government to state-run Philippine Crop Insurance Corp. (PCIC) through the years, its agricultural insurance has only reached a third of the country’s farmers, according to a World Bank study. The study done by a team from the World Bank’s Disaster Risk Financing and Insurance Program (DRFIP) also revealed that the agricultural insurance provided by PCIC is also not well targeted to ensure that taxpayers are getting their value for money.

Budget Reform bill seen an alternative to imposing more taxes

HOUSE Committee on Ways and Means Chairman Joey Sarte Salceda believes the Budget Reform bill he plans to re-file is an alternative to imposing additional taxes, if enacted into law by the incoming administration. “I will refile the bill, hopefully with enhancements from the incoming Finance and Budget chiefs,” the lawmaker said.

Inflation exposing PH shares to a further sell-off

Global and domestic headwinds continue to weigh on the local stock market, putting investors “on guard” against further downside risks. The benchmark Philippine Stock Exchange Index (PSEi) was little changed at 6,741.40 amid concerns over “quickening inflation, rising interest rates as well as costlier commodities,” BDO Unibank Inc. chief strategist Jonathan Ravelas said in his weekly outlook report.

Consumers see rosier year ahead with more jobs, higher pay

Filipino consumers were less upbeat about the three months ahead but more confident about next year when asked on March, when their confidence was still negative, according to the Bangko Sentral ng Pilipinas (BSP). This was based on results of the BSP’s latest Consumer Expectations Survey (CES) conducted from March 21 to March 31. There were 5,175 households that responded, of which 52 percent were from Metro Manila and the rest from outside the region.