ECCP at Work

Foreign investment pledges surge 105% in Q2 

Investment pledges from foreign sources more than doubled in the second quarter from a year ago amid the further easing of pandemic-induced restrictions and approval of reforms that seek to make it easier for foreign investors to enter the country. Data from the Philippine Statistics Authority released yesterday showed total foreign investments approved by investment promotion agencies (IPAs) jumped 105 percent to P46.23 billion from April to June. These investments were pledges filed with the Board of Investments, BOI-Bangsamoro Autonomous Region in Muslim Mindanao, Clark Development Corp., Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA).

Poe pushes hybrid work setting to boost worker productivity, cut costs

A hybrid work setup will improve workers’ productivity and lessen their expenses, Senator Grace Poe said on Tuesday as she pushed to adopt the said arrangement across the country. Poe, chair of the Senate committee on public services, pointed out that an average worker living in Mega Manila spent P56,000 for commuting expenses and suffered 188 hours in traffic. While not all jobs allow a hybrid setup, Poe said that working from home will allow a worker to save time and money. Aside from monetary advantages, Poe pointed out that the work-from-home scheme boosts physical, emotional, and mental health.

NEDA: Sustained growth seals high-income status

THE Philippine economy needs two more decades of high economic growth before it can finally consider itself a high-income country and make poverty a thing of the past, according to the National Economic and Development Authority (Neda). Socioeconomic Planning Secretary Arsenio M. Balisacan said rapid poverty reduction can only be achieved by sustaining a high level of economic growth. Balisacan noted that the same outcome can also be facilitated by a reduction in inequality of opportunities and a relatively low level of inflation. In 2021, income inequality in the country as measured by the Gini coefficient was reduced to 0.4119 in 2021 from 0.4267 in 2018.

State of COVID health emergency likely to stay until end of 2022

PRESIDENT Marcos Jr. yesterday said he is inclined to extend until the end of the year the nationwide state of public health emergency declared by the former administration because of the coronavirus disease (COVID-19) pandemic. The state of public health emergency was declared in March 2020 at the onset of the COVID-19 outbreak by former President Duterte. Under Proclamation 922, the state of public health emergency shall remain in force and effect until lifted or withdrawn by the President.

DOH: Omicron-specific vax in Philippines next year

New Omicron-specific vaccines may become available in the country beginning early next year, the Department of Health (DOH) said yesterday. “In terms of the new vaccines that are being developed, the manufacturer declared that around October, they could release this kind of vaccine,” DOH officer-in-charge Maria Rosario Vergeire, speaking partly in Filipino, said in a radio interview. It is only then that the vaccine manufacturer could initiate the process of applying for its use in the Philippines, Vergeire said. “We will be reviewing that and, the way I see it with the processes we have, (it would be available) about early part of next year,” she said, adding that a budget has already been reserved to purchase these new vaccines.

Bill on ease of paying taxes hurdles House committee 

A MEASURE seeking to ease the process of paying taxes has been passed at the House Committee on Ways and Means. At a hearing on Wednesday, the committee approved a substitute bill consolidating House Bills (HB) 53 and 2823. The measure hopes to modernize tax administration as a means of improving taxpayer compliance, specifically by simplifying the process of filing tax returns on the part of small taxpayers. If passed, the bill will also remove the P500 annual taxpayer registration fee, introduce a medium-sized taxpayer classification, and remove the distinction between sales invoices and official receipts for purposes of recognizing VAT transactions.

Government eyes review of BOT Law IRR next month

The National Economic and Development Authority (NEDA) is hopeful the review of the implementing rules and regulations (IRR) of the Build-Operate-Transfer (BOT) law can begin by next month. “We have already received the President’s directive to review the IRR of the BOT law. We are presently awaiting the convening of the committee to review the rules,” Socioeconomic Planning Secretary Arsenio Balisacan said at the 2022 EJAP-SMC Economic Forum. In the meantime, he said NEDA and the Public-Private Partnership Center have started consultations with the private sector for the review.

BSP raises policy rates by 50 bps

THE BANGKO SENTRAL ng Pilipinas (BSP) raised its benchmark interest rate by 50 basis points (bps) on Thursday, and signaled it has room to further hike rates as it battles inflation. The Monetary Board (MB) increased the overnight reverse repurchase rate by 50 bps to 3.75%, as expected by 13 out of 18 analysts in a BusinessWorld poll. The rates on the overnight deposit and lending facilities were also increased to 3.25% and 4.25%, respectively. The central bank has raised rates by a total of 175 bps so far this year. “The Monetary Board deemed further monetary action to be necessary to anchor inflation expectations and avoid a further breach in the inflation target over the policy horizon,” BSP Governor Felipe M. Medalla said during a briefing after the MB meeting. The BSP on Thursday also raised its inflation outlook for 2022 to 5.4% from 5% previously. This is beyond the central bank’s 2%-4% target band. It lowered the 2023 inflation projection to 4% from 4.2%, as well as the 2024 outlook to 3.2% from 3.3% previously.

Adjusted 7.4% Q2 growth signals decline–think tank

THE country’s 7.4-percent GDP growth in the second quarter should not make Filipinos complacent that the economy is on the mend, according to a local think tank. In its latest Market Call report, First Metro Investment Corporation-University of Asia and the Pacific (FMIC-UA&P) Capital Market Research said the seasonally adjusted growth in the second quarter showed the economy is on the decline. Further, the think tank said, challenges such as the rise in commodity prices as well as the impact of the US Federal Reserve’s pending rate hikes on the peso could still imperil the economy’s full recovery. In terms of challenges, the group said, inflation is expected to average 6 percent in the second half of the year. This, however, assumes that there would be a minor reduction in crude oil prices and there would be a slowdown in consumer spending.

Despite CDC travel advisory, tourism group sees 2M tourists by yearend

TOURIST arrivals are projected to reach 2 million by yearend, despite Tuesday’s US government advisory against travel to the Philippines. Tourism Congress of the Philippines (TCP) president Jose C. Clemente III expressed optimism the latest pronouncement of the US Centers for Disease Control and Prevention (CDC) moving the Philippines back to the high-risk Level 3 group of countries,  “will have minimal effect on our tourist arrivals,” which had already reached 1.1 million from February 10 to August 7. “My fearless forecast is that we will probably be nearing 2 million [tourists] by year-end,” judging by the continued increase in bookings from overseas clients, as per TCP member travel agencies.

House ways and means panel OK’s bill imposing VAT on digital transactions

THE House Committee on Ways and Means said it approved a measure on first reading that would impose value-added tax (VAT) on digital transactions. If passed, the bill would subject to 12% VAT on the sale of digital services such as online advertisements, subscription services, and others that can be delivered through the internet. The measure would add a new section in the National Internal Revenue Code of 1997 that would require foreign digital service providers to collect and remit VAT for all transactions.

Marcos, private sector council discuss stronger job creation

Major business leaders have proposed measures to boost the Marcos administration’s efforts to create more jobs and attract more investors amid the economy’s road to recovery, Malacañang said Thursday. President Ferdinand “Bongbong” Marcos Jr. confirmed in a social media post his meeting on Wednesday with the Private Sector Advisory Council on their recommendations, which include scaling up small businesses and identifying labor-intensive and high-potential industries. The PSAC, led by Aboitiz Group President Sabin Aboitiz, in a separate statement said it also pushed for attracting more investors by improving the country’s ease of doing business and making labor regulations more flexible.