ECCP at Work

Economy to sustain recovery — BSP

The Philippine economy will likely sustain its recovery momentum this year, but risks remain from elevated inflation and a possible reimposition of COVID-19 restrictions to curb a fresh surge, the central bank governor said. Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said the economy will continue to expand amid these “challenging times.” “On the home front, we expect the Philippine economy to sustain its recovery. We note that quarterly private consumption expenditures have surpassed the pre-pandemic levels already and continue to grow as the economy further opens up,” he said.

Infrastructure program to help reduce Philippine poverty

Boosting the country’s infrastructure program will allow the economy to grow more and, in turn, reduce the poverty rate that has been exacerbated by the pandemic. Department of Finance chief economist Gil Beltran said there is a need to push for more growth-oriented spending after COVID-19 pushed more Filipinos into poverty over the past two years. While the Duterte administration made significant strides in reducing the poverty rate over the past years, mobility restrictions and closure of businesses led to a spike anew. Poverty rate is currently at 23.7 percent.

DOF chief economist: There’s still room for ‘sin’ tax rate hikes

The Department of Finance’s (DOF) chief economist Gil Beltran believes there’s still room to raise excise taxes on “sin” products like tobacco, vapes, and alcoholic drinks. But just like Finance Secretary Benjamin Diokno, who is not too keen on slapping new or higher taxes on consumption at the start of the Marcos administration, Beltran said  tax hikes could not be done at this time when the economy and the taxpayers were still recovering from harder times wrought by the prolonged COVID-19 pandemic.

‘Prolonged war to worsen trade balance in ASEAN +3’

A prolonged war between Russia and Ukraine would lead to further increases in fuel and commodity prices, and worsen the trade balance for most economies in the Association of Southeast Asian Nations (ASEAN) +3 (China, Japan and South Korea) region. In its latest analytical note, the ASEAN +3 Macroeconomic Research Office (AMRO) said since the war in Ukraine started, some ASEAN +3 economies have seen a decline in their trade with Russia.

Bongbong Marcos retains COVID-19 alert level system

President Ferdinand “Bongbong” Marcos Jr. has decided to retain the COVID-19 alert level system while a new health restrictions classification is being studied. The decision came after Marcos met with officials from the Department of Health (DOH) on Monday. According to Marcos, the new health restriction classification needs to be more compatible with the “current milder strains that afflict the patients.” DOH officer-in-charge Ma. Rosario Vergeire said the health department could come up with a new alert level classification by the second week of August.

DOH to reconstruct IATF

The Department of Health (DOH) will reconstitute the member agencies of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) to only include those with relevant functions, Malacañang said on Tuesday. Details of the plan was discussed by DOH officer-in-charge Undersecretary Maria Rosario Vergeire with President Bongbong Marcos during their meeting on Monday, it also said.

High global inflation weighs on manufacturing sector

The Philippines’ manufacturing sector is seen to take a hit from high global inflation wrought by the prolonged Russian invasion of Ukraine, although nickel producers in the country stand to gain, economic think tanks said. “Domestic demand continued to buoy factory activity, but rising inputs and fuel prices may weigh on the manufacturing sector,” the World Bank’s Philippine office said in a report over the weekend.

Tourism 'major pillar' of economic growth under Marcos

After two years of sparse crowds in popular attractions, the Philippines is slowly seeing the return of visitors and hoping for the tourism sector's rebound soon. Revitalizing the sector -- one of the hardest hit at the onset of the health crisis in 2020 -- is one of the Marcos administration's top priorities, seeking to transform it into a "major pillar" of economic growth in the next six years.

NAIA showdown brewing as PPP talks revived

A showdown is brewing at Ninoy Aquino International Airport (NAIA) as the Marcos administration adopts a friendlier stance toward private sector infrastructure spending to offset government budget constraints in the post-pandemic period. Fresh offers to modernize the aging crown jewel of Philippine airports remain on hold due to the absence of a clear Public-Private Partnership (PPP) policy thus far. But Transportation Secretary Jaime Bautista hinted at the possibility of opening up Naia to proposals from private companies seeking long-term contracts to help it achieve elusive world-class status.

PBBM wants to build more FMRs to boost food production

The government is seeking additional overseas funding to construct more farm-to-market roads (FMR) to boost local food production. President Ferdinand “Bongbong” R. Marcos, Jr. on Monday ordered the Department of Agriculture (DA) during his meeting with its personnel to create a FMR master plan, which aims to provide access roads in identified priority farmlands. “FMR is the first step to solve some of the supply chain problems. So let us prioritize those who are producing these [food items],” Marcos said in mixed Filipino and English. The plan, the concurrent Agriculture Secretary said, should also include funding source, payment terms, as well as the time frame for project completion. “The President also wants official development assistance-funded (ODA) projects to be constructed in priority areas identified by the government,” Malacañang said in a statement. 

Bill filed to promote cashless transactions, protect delivery riders from cancelled orders

A bill seeking to protect delivery riders from joy buyers through promoting cashless transactions and by not allowing the cancellation of orders once they are already in transit has again been filed at the House of Representatives. Rep. Bernadette Herrera (Bagong Henerasyon Party-list) refiled the proposed “Magna Carta of E-Commerce Delivery Personel,” which also lays down penalty fees and jail time for erring customers.

BSP seen to deliver more rate hikes

THE PHILIPPINE central bank could deliver more aggressive rate hikes in order to support the peso and tame inflation without derailing economic growth, analysts said. The Bangko Sentral ng Pilipinas (BSP) unexpectedly tightened its monetary policy by 75 basis points (bps) on July 14, bringing the benchmark rate to 3.25%. Interest rates on the overnight deposit and lending facilities were also hiked by 75 bps to 2.75% and 3.75%, respectively. Deutsche Bank Chief Executive Officer for Asia Pacific Alexander von zur Muehlen said the BSP would likely raise interest rates by another 50 bps in August to support the peso, which recently touched the all-time low.

LGU loans hit P19.7 billion in first half of 2022

Local governments borrowed a total of P19.7 billion in the first half of 2022, mainly to finance infrastructure projects. The latest data from the Department of Finance’s Bureau of Local Government Finance (DOF-BLGF) on Friday (July 15) showed that the agency issued 111 certificates of net debt service ceiling and borrowing capacity to the same number of local government units (LGUs) from January to June.

Stocks seen to consolidate further this week

The main Philippine Stock Exchange index (PSEi) is expected to trade sideways this week, vacillating between the 6,100 and 6,400 levels. Traders said the stock market would likely stay in consolidation mode as it continues to digest recent and upcoming economic developments, including the Bangko Sentral ng Pilipinas’ surprise off-cycle 75-basis-point rate hike last week.

Senators want new govt to clarify rightsizing plan

The Senate will seek a clearer policy definition of the new administration’s intent to “rightsize” the bureaucracy when President Ferdinand Marcos Jr. convenes a meeting with lawmakers after his State of the Nation Address on July 25. This is according to Sen. Juan Miguel Zubiri, who is expected to be the next Senate President following a declaration of support by a majority of the senators who will assume their seats when Congress opens.

China wants 3% interest on Philippines railway projects loan

China wants to charge an interest rate of three percent for loans sought by the Philippines to build three railway projects, a level that could be too costly for an economy trying to slash its national debt. Transportation Undersecretary Cesar Chavez yesterday said the infrastructure team was told to reactivate negotiations with China for the financing of three railway projects – two in Luzon, one in Mindanao – estimated to cost at least P276 billion.

DepEd Releasing P3.7 Billion To Support Face-To-Face Classes

The funds lodged under DepEd Central Office’s budget for 2022 shall be used as additional financing for the implementation of face-to-face learning modality in public schools nationwide. The Department of Education (DepEd) will release over P3.7 billion to its field offices to support the upcoming implementation of full face-to-face classes in public elementary and high schools nationwide.

44% of Filipinos not satisfied with K-12 basic education program, survey says

Forty four percent of Filipinos are dissatisfied with the K to 12 (K-12) education system in the country, a Pulse Asia survey shared Monday showed. According to the survey conducted on June 24 to 27 and commissioned by Senator Sherwin Gatchalian, 25 percent of the 1,200 respondents said they are “somewhat dissatisfied” with the current education system while 19 percent said they are “truly dissatisfied.” Gatchalian, who is poised to chair the Senate committee on basic education, arts, and culture in the 19th Congress, said the K-12 program has to be reviewed.

EV production to hinge on vehicle takeup levels

THE possibility of domestic electric vehicle (EV) production will depend on the market reaching critical mass in both adoption and the number of charging stations, according to the Department of Trade and Industry (DTI). 

Budget carriers resume more foreign flights

Budget airlines continue to resume direct flights to three Southeast Asian neighbors as part of their efforts to speed up recovery and return to pre-pandemic level of capacity.