ECCP at Work

DOF, BSP see inflation staying within range

THE country’s inflation is expected to peak in the third quarter before slowing down in the fourth quarter of this year, Finance Secretary Benjamin E. Diokno said, as the Bangko Sentral ng Pilipinas (BSP) signalled it will take further action to curb inflation, even after back-to-back hikes in recent months. The statement came after the government announced that local inflation hit 6.3 percent in August, easing slightly from the 6.4 percent in the previous month. Despite his projection of inflation peaking in the third quarter, Diokno said they still expect inflation to settle within the Development Budget Coordination Committee (DBCC) projected range for this year.

Impasse over WFH scheme may hurt PHL’s position as IT-BPM destination

THE STALEMATE over the work-from-home (WFH) arrangement of registered information technology and business process management (IT-BPM) firms may damage the Philippines’ position as an investment destination, according to the head of an industry group. IT and Business Process Association of the Philippines (IBPAP) President and Chief Executive Officer Jack Madrid on Tuesday said he found it “perplexing” that the Fiscal Incentives Review Board (FIRB) continues to insist that the extension of the 30% WFH arrangement for IT-BPM firms has no legal basis. In a statement, he said the FIRB’s stand is “short-sighted and inconsistent with the objective of attracting and retaining investors in the country’s biggest job-generating industry and contributor of foreign exchange revenue.” “The long-standing impasse with the FIRB and its very public exchanges with PEZA (Philippine Economic Zone Authority) on the matter of WFH/hybrid work is not only detrimental to our narrative of industry agility, innovation and resilience, but also to our positioning of the Philippines as the IT-BPM investment destination of choice,” Mr. Madrid said.

P4-T big infrastructure projects to be finished by 2028

THE Marcos administration intends to complete 73 big-ticket infrastructure projects, costing P4.05 trillion, which were not finished during the previous administration, according to the National Economic and Development Authority (Neda). In a presentation at the organizational meeting of the House Committee on Flagship Programs and Projects, Neda Assistant Secretary for Investment Programming Roderick M. Planta said the 73 projects were culled from the 112 Infrastructure Flagship Projects (IFPs) of the previous administration. In total, the 112 IFPs amount to P5.04 trillion. This also includes eight projects worth P55.43 billion that were completed, and four projects amounting to P69.07 billion which were inaugurated and partially operational.

Unemployment slows, but jobs creation weak

DESPITE the low unemployment rate, local economists said the figures failed to impress as underemployment increased in July and manufacturing, where decent jobs can be generated, saw a decline in employment generation. “A lot of the jobs seem to be generated in the informal sector as underemployment is up by 1.2 percentage points. July is also harvesting season so jobs are expected to be plentiful during this month,” Ateneo Eagle Watch Senior Fellow Leonardo A. Lanzona Jr. told the BusinessMirror. “My sense is that people were willing to work—which led to the higher labor force participation rate—and were amenable to do so even at low compensation—which resulted in the high underemployment,” he added.

Philippines gets ready to ease face mask rules

Malacañang announced Wednesday that the government’s pandemic task force has recommended to President Ferdinand Marcos Jr. to make mask wearing voluntary in outdoor settings, a proposal that has secured the chief executive’s “verbal approval.” While Marcos is said to have given his go ahead for the proposal in a call with Interior Secretary Benhur Abalos, Press Secretary Trixie Cruz-Angeles said this is still not a policy. Department of Health officer-in-charge Maria Rosario Vergeire also said the recommendation has to be formalized in an executive order.

DTI working to clinch more trade deals to lure more investments

TRADE Secretary Alfredo E. Pascual said he is working on increasing the number of the Philippines’s trade deals with other countries in order to attract more foreign investments. During the Economic Briefing between the Philippines and Singapore, the Trade chief said among the ways that “we are going to attract foreign investments is by improving or increasing the number of our foreign trade agreements.” Pascual was asked on the specific steps being planned to improve the business environment around foreign direct investments (FDI). The Trade chief stressed that the Philippines currently has 10 free trade agreements (FTAs), while Singapore has “about, I think, more than 20 FTAs.” Meanwhile, Pascual also noted that “other countries in the neighborhood have about more than what we have in the Philippines, so I’m working on that.” As for the efforts being done to clinch more FTAs, he expressed hope that by November, he will be signing the Philippines’s FTA with Korea.

Only 40% of Pinoys have quality jobs–UNESCAP

LESS than half of the Philippine work force is holding down a quality job, according to a report released by the United Nations Economic and Social Commission for Asia and the Pacific (Unescap). In the report, “The Workforce We Need: Social Outlook for Asia and the Pacific,” Unescap said only 40 percent of working Filipinos have decent jobs. These workers earn more than twice the income of those with poor quality jobs in the Philippines. “In the Philippines, 43 percent of workers in sectors with a strong urban component such as electricity, gas, steam and air conditioning supply, are found in good quality jobs, compared to only 6 percent of rural workers in the agriculture, hunting, forestry and fishing sectors,” the report stated. Unescap added that in the Philippines, individuals with secondary and tertiary education are four to five times more likely to have a good quality job than those with no education.

Jobless rate eases to 5.2% in July

THE PHILIPPINES’ unemployment rate in July dropped to its lowest since the onset of the coronavirus disease 2019 (COVID-19) pandemic. Preliminary data from Philippine Statistics Authority (PSA) showed the unemployment rate — or the share of the unemployed Filipinos to the total labor force — fell to 5.2% in July, improving from 6% in June and 7.2% in July last year. This was the lowest unemployment rate since the PSA started reporting the Labor Force Survey on a monthly basis in 2021. “We expect more jobs and income opportunities available for Filipinos in the coming months as we move toward the full reopening of the economy,” Socioeconomic Planning Secretary Arsenio M. Balisacan said in a statement.

PBBM: RCEP ratification will be Senate priority after 2023 budget is passed

President Ferdinand “Bongbong” R. Marcos Jr, said the Senate will soon be tackling the ratification of the Regional Comprehensive Economic Partnership (RCEP). Marcos said he discussed the matter during his talk with Indonesian President Joko Widodo. “We also covered the RCEP, during our talk. the ratification of the RCEP by the Philippines, which is going to be very high up on the order of business of the Senate, after the budget is passed,” Marcos said in a press conference in Indonesia. Congress is expected to pass the 2023 national budget by October and then be signed by Marcos before the end of the year, according to the Department of Budget and Management (DBM).  

SEIPI confident of hitting 10% export growth goal this year

THE SEMICONDUCTOR and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) is confident of reaching its 10% export growth target this year, amid the continued weakness of the peso against the US dollar. “We projected a 10% growth this year and as of June year to date, we recorded about $22.6 billion (in exports), and at this rate, we will exceed the 2021 numbers.” SEIPI President Danilo C. Lachica said. In 2021, the industry reported $45.6 billion in exports, which he said was already higher than pre-pandemic numbers. The weaker peso is benefiting exporters, particularly those in the semiconductor and electronics industry, Mr. Lachica said. Mr. Lachica noted the semiconductor and electronics industry has been affected by supply chain disruptions, the Russia-Ukraine war, volatile oil prices and elevated inflation this year. “But as long as the peso continues to decline, it really is favorable for the exporters,” he added.   

DBM allocates P2.5 billion for airport modernization

The Department of Budget and Management (DBM) said it has allocated a total of P2.5 billion to develop various airports nationwide. As provided in the National Expenditure Program (NEP) for next year, the DBM said it has increased the budget of the Department of Transportation (DOTr) by 120.4 percent or from P75.8 billion in 2022 to P167.1 billion in 2023. The DBM said apart from big-ticket railway and road transport projects – which are set to get the largest budget allocations – aviation projects will receive a significant amount of budget for their modernization. In particular, a total of P2.48 billion has been allotted for the implementation of the Aviation Infrastructure Program. The budget will be used for the construction, rehabilitation, and improvement of various airports across the country.

BSP chief signals more rate increases

THE BANGKO Sentral ng Pilipinas (BSP) said it has room to further hike policy rates this year to support the peso as the US Federal Reserve is expected to continue its aggressive policy tightening. This as the Philippine peso on Wednesday closed at a record low of P57.135 against the US dollar. Year to date, the peso has weakened by 12.02% or P6.135 from its P51-a-dollar close on Dec. 31, 2021. “These are challenging times because US interest rates are not just high but these should get higher. In turn, that means possibly, a weaker peso as shown in the case of yen (and) euro,” BSP Governor Felipe M. Medalla said at a Philippine economic briefing in Singapore on Wednesday. “We have increased policy rates by 25 (bps), 25 (bps), 75 (bps), and then another 50 (bps). And of course, you cannot say it’s the end of it because if the US keeps doing 75 (bps hikes), we cannot, not react,” he added.

NEDA proposes changes to arbitration and MAGA clauses in revised rules for BOT Law

THE NATIONAL Economic and Development Authority (NEDA) proposed new revisions to the implementing rules and regulations (IRR) of the Build-Operate-Transfer (BOT) Law, which reflect the government’s willingness to share the risk in public-private partnership (PPP) projects. The draft rules, which were uploaded on the NEDA website, showed changes to the provisions on arbitration and material adverse government action (MAGA), which were criticized by some business groups as “anti-market.” Under the draft, the controversial provision which stated that “acts and decisions of regulators shall not be subject to arbitration” has been removed. This implied the government is now open to arbitration, provided that it is mutually agreed upon by both parties in the contract.

Manufacturing output up 2.5% in July on base effects

THE country’s manufacturing output grew 2.5 percent in July 2022, according to data released by the Philippine Statistics Authority (PSA). PSA data showed the Volume of Production Index (VoPI) increased from the 0.7 percent posted in June 2022 but was significantly slower than the 534.4 percent posted in July 2021. “Out of the 22 industry divisions, 14 reported positive annual growth which was led by manufacture of fabricated metal products, except machinery and equipment with a 30.3 percent annual growth rate,” PSA said in a statement.

DOH wants mask mandate retained

In a statement, DOH officer-in-charge Maria Rosario Vergeire said the agency wants Filipinos to “continue on masking.” Despite this position, Vergeire said the department adopted the IATF stand because other data were presented to the task force that led to the recommendation submitted to President Marcos Jr. “We needed to balance between the health and economy. What we have compromised would be that this will be done among low-risk individuals and in low-risk settings,” said Vergeire. “This means that optional masking will only be done outdoors, in settings where it is not crowded, in settings where there is good ventilation. This will be done among low-risk individuals — meaning not the senior citizens, not those with comorbidities, not the children, and definitely not those having symptoms with COVID-19,” Vergeire said.