ECCP at Work

DESPITE CHALLENGES: NEDA positive about hitting growth goal

The National Economic and Development Authority (NEDA) remains optimistic that the economic growth target will be met this year despite the impact of various inflationary pressures, the country’s limited fiscal space and the slowdown of global demand, according to the agency’s statement. In his recent speech at the Fellows Meeting of the Foundation for Economic Freedom, NEDA Secretary Arsenio Balisacan said domestic consumption and investment on the demand side, as well as the services sector on the supply side, has propelled the Philippine economy forward as consumers and businesses are already adjusting their economic decisions and expectations to the “new normal.” The NEDA chief said the Philippine economy needs to grow by at least 5.3 percent in the second half of 2022 to meet the lower bound of the 6.5 to 7.5 percent target set by the Development Budget Coordination Committee for the year.

Economic growth may slow in coming quarters

The country’s economic growth may slow further in the coming quarters amid accelerating inflation, according to economists. Taimur Baig, chief economist at DBS, said the country’s gross domestic product (GDP) expansion is likely to revert to the six percent range in the coming quarters, but is on track to reach seven percent this year. The Philippines emerged from the pandemic-induced recession with a GDP growth of 5.7 percent last year after shrinking by 9.6 percent in 2020 as the economy stalled amid strict COVID quarantine and lockdown protocols. The growth picked up to 7.8 percent in the first half despite the disappointing 7.4-percent expansion in the second quarter, slower than the 8.2-percent growth booked in the first quarter.

PDP to focus on agro-industry development

The upcoming Philippine Development Plan (PDP) will focus on developing the country’s agro-industry, according to a National Economic and Development Authority (NEDA) official. “The longer-term solution is really to improve the productivity of our agricultural sector and then increase the linkages between agriculture and the rest of the economy,” said NEDA Undersecretary Rosemarie G. Edillon. “So, for our PDP, we are looking at developing more of the agro-industry… Previously, our targets had to do with increasing the gross value added of agriculture but now we will be looking at indicators that are really about the linkages,” she added.

Export ‘clusters’ planned for industry, technology, health

THE Department of Trade and Industry (DTI) said it hopes to organize exporters into three “clusters” to create vibrant ecosystems among industries to raise their international competitiveness. Trade Secretary Alfredo E. Pascual told the Philippine Exporters Confederation, Inc. (PhilExport) that the three clusters are Industrial, Manufacturing, and Transport; Technology, Media, and Telecommunication; and Health and Life Sciences. Mr. Pascual expressed the hope that micro, small, and medium enterprises (MSMEs) integrate themselves into the value chains of exporters to scale up their operations. PhilExport President Sergio R. Ortiz-Luis, Jr. said he welcomes “whole-of-government” support in creating a “conducive policy environment” for exporters.

Inflation eases in August to 6.3%

Inflation cooled to 6.3% in August from 6.4% in July with the increase in prices driven by transport and food costs, the Philippine Statistics Authority reported. The latest pace breaches the 4.4% pace recorded in the same month last year. It is also within the 5.9-6.7% range projected by the Bangko Sentral ng Pilipinas for the period. August’s rate brought the year-to-date average to 4.9%, remaining above the central bank’s 2-4% target for 2022. The continued rise in key food prices may have driven inflation last month, said the BSP. This could have been partly offset by the stronger peso and decline in global oil prices, electricity rates, and lower prices of meat and fish.

Customs exceeds August collection target by 34.1% 

THE Bureau of Customs (BoC) said on Sunday that it exceeded its August collection target by 34.1%, which it credited to the digitalizing and streamlining of its processes, and as imports rose following the reopening of the economy. In a statement, the BoC said August collections hit P78.902 billion, exceeding the target of P58.849 billion. This is the eighth consecutive month it has exceeded its monthly target. As early as Aug. 25, the BoC said it had exceeded its revenue target for the month.

EPR law on plastic waste will succeed as all sectors work together

The new law on extended producer responsibility (EPR) for plastic waste is a major milestone in tackling plastic waste and its implementation will succeed with sustained collaboration and partnerships among stakeholders. These are the government agencies and LGUs, manufacturers and importers, NGOs and civil society groups, and consumers and communities, said Chairman and CEO Kais Marzouki of Nestlé PH, one of the country’s largest food and beverage manufacturers. “The effective implementation of the law is urgently needed to tackle the plastic pollution crisis,” he added. 

Concern grows as NG debt hits new record

THE NATIONAL Government (NG) debt hit another record as of end-July, but economists expressed concern whether the government can generate enough revenues for the eventual repayment of the large borrowings incurred during the pandemic. The NG outstanding debt rose by 0.8% or P96.09 billion to a record-high P12.89 trillion at the end of July, beating the previous high of P12.79 trillion as of end-June, due to additional domestic and local borrowings, as well as a weaker peso. The Bureau of the Treasury (BTr) said the debt pile jumped by 9.9% since the year started, after the government borrowed P1.16 trillion more. Year on year, the debt stock jumped by 11% from P11.61 trillion.

More rural banks undergoing digital transformation

Rural banks across the Philippines are warming up to the idea of adopting digital processes as their business areas benefit from the reopening of the economy. Meanwhile, the Monetary Board has raised the minimum capital for rural banks to P50 million from as little as P10 million, compliance to which the affected entities must do within the next five years. According to Rural Bankers Association of the Philippines (RBAP), the industry is embracing the advantages of digitalization in order to remain relevant in a business environment that has been reshaped by the COVID-19 pandemic. Digital transformation, as the buzzword goes, makes “deploying financial services as easy as tapping on a screen, while [the rural banking industry remains] grounded in its role as a vital provider of financial services that uplifts the lives of our countryside’s economic drivers—the farmers, the fisherfolk and the microentrepreneurs,” RBAP said in a statement.

Higher tech content in agri demands skills upgrades 

TECHNICAL SKILLS among agricultural workers need to be upgraded to make the industry future-ready and more attractive to tech-savvy younger people, the Philippine Chamber of Commerce and Industry (PCCI) said. “What we have seen in agricultural processing plants is the need to prioritize both the volume of agricultural output and worker skills. We know that skills are important in everything,” PCCI President George T. Barcelon said. “We’d really like to attract younger people into the sector. To attract them, we must make agriculture relevant. It should be updated with the latest technologies because international agricultural standards are now using electronics and the Internet of Things (IoT),” he added.

GSIS, SSS urged to invest in public infra as spending falls below goal

Finance Secretary Benjamin Diokno has asked the government’s social institutions under his watch to invest their long-term pension funds on public infrastructure. This developed as the latest Department of Budget and Management data showed that total government infrastructure spending in the first half of 2022 reached P600.1 billion, up 12 percent year-on-year but 6.4-percent below-target mostly due to the ban on new public expenditures ahead of the May 9 presidential elections. Diokno said the plan was for the GSIS, the SSS, Philippine Health Insurance Corp. (PhilHealth) and the Home Development Mutual Fund (Pag-Ibig) to invest in infrastructure, in line with the Marcos administration’s “build better more” program.

Gov’t eyes insurance firms’ investments for infrastructure 

THE MARCOS administration is eyeing investments from public and private insurance companies to support its ambitious infrastructure program amid a fiscal crunch, the country’s finance chief said. Finance Secretary Benjamin E. Diokno said the government has to ramp up infrastructure spending in the next 20 years, particularly in the energy and transport sectors as the Philippines remains a laggard in Southeast Asia. Last July, the Government Service Insurance System (GSIS) already signaled its intent to continue investing in state and private infrastructure projects.

Peso touches 57-level for the first time to post a new record-low

The Philippine peso fell a hair’s breadth from the 57-level to post a new all-time low amid a rallying US dollar. The local unit closed at P56.999 against the greenback on Monday, surpassing the previous record-low of P56.77 posted on Friday last week. At one point during the trading day, the peso touched the P57-per-dollar level, the first time that the local currency sank to that territory based on a dataset that dates back to 2001.