ECCP at Work

DTI pushes for renewal of preferential tariff enjoyed by exporters under EU’s GSP+

Trade Secretary Fred Pascual pushed for the renewal of preferential tariff enjoyed by Filipino exporters under the European Union’s Generalized Scheme of Preferences Plus. GSP+ is an incentive arrangement that grants the Philippines zero tariffs on 6,274 products or 66 percent of all EU tariff lines. This preferential trade is maintained, while the country upholds its commitments under the GSP+ select 27 international conventions on human rights, labor, good governance and environment. Pascual delivered a strong message of commitment to the EU-PH partnership in trade and investment before the EU Parliament Committee on International Trade on Oct. 27. He presented in the European Parliament in Brussels during the critical stage of the monitoring process for the renewal of the Philippines GSP+ preferential status.

PHL ‘ready to work’ on resuming FTA nego with EU

Trade Secretary Alfredo E. Pascual said the Philippines is “ready to work” toward the resumption of negotiations of the Philippine-European Union (EU) free trade agreement (FTA). “Given the positive developments in the country and the values and principles we shared, the Philippines remains interested and therefore ready to work toward the resumption of negotiations of the Philippine-EU FTA,” Pascual said on Thursday as he spoke before the EU Parliament Committee on International Trade (INTA). Citing a 2020 study, Pascual said that 83 percent of German companies want to resume the FTA negotiations, citing the huge potential for EU companies, with the FTA “positively” affecting competitiveness.

BSP sees inflation's peak in October, likely offering a reprieve

Inflation, as measured by the consumer price index, is forecast to settle between 7.1-7.9% this month, the BSP said in a statement. If realized, the October print would be faster compared to September, when inflation sizzled to a 4-year high of 6.9%. Meanwhile, inflation would approach close to 2009 levels, or the time when the domestic economy was recovering from the impact of the Global financial Crisis, if the upper-limit of the BSP’s projection is realized. Explaining its October forecast, the BSP cited three pressure points: transport fare hikes, local pump prices and higher agricultural commodity prices. But the BSP said inflation might have already hit its peak in October and would start easing in the next months. “More importantly, inflation is projected to gradually decelerate in the succeeding months as the cost-push shocks to inflation due to weather disturbances and transport fare adjustments dissipate,” the central bank explained. Domini Velasquez, chief economist at China Banking Corp., agreed with the BSP’s assessment. But she warned that there are risks to this outlook, including the government’s inability to solve persistent supply bottlenecks.

45M Pinoys yet to get booster shots

Forty-five million Filipinos, or just a quarter of the target population, have yet to get booster shots amid threats of new COVID-19 variants and subvariants emerging, the Department of Health (DOH) said yesterday.Data from the DOH’s National COVID-19 Vaccination Dashboard shows some 73.5 million individuals have been fully vaccinated while the number of individuals who have received the booster, as of October 26, was only 20.5 million. Booster shots require at least three months interval from the second vaccine dose. Vergeire, DOH officer-in-charge, said most of those who refuse to get booster shots were found to be content with being fully vaccinated, which means they have received two doses of COVID-19 vaccines. Some find getting a booster shot unnecessary because it is not required at work or in schools, while others remain hesitant because of misinformation about the vaccine, she said.

DOE prepares for 2nd green energy auction

The Department of Energy (DOE) is preparing for the conduct of a second green energy auction by June next year following the success of the first one this year. The Green Energy Auction Program (GEAP) was undertaken to support and facilitate immediate and timely investments in new or additional renewable energy capacities to ensure provision of adequate supply and competitive rates of electricity in the country. Its aims to ensure transparent and competitive selection of renewable energy facilities to achieve reasonable rates and encourage, as far as practicable, the renewable energy entrants in the system. The DOE awarded 19 contracts to various renewable energy developers after conducting the first round of the GEAP last June. The first round of auction was considered a success, after having successfully generated almost 2,000 megawatts (MW) of capacities that were committed to deliver energy from 2023 to 2025 at a competitive price lower than or equal to the Green Energy Auction Reserve (GEAR) prices set by the Energy Regulatory Commission (ERC)

Policy institutionalizing hybrid work pushed

The Philippine Economic Zone Authority (PEZA) continues to push for the passage of a law or the implementation of a policy that will institutionalize hybrid workplace for economic zone information technology (IT) locators. This after the Department of Trade and Industry on October 18  issued Memorandum Circular  22-19 which contains the guidelines on the transfer of registration of IT-BPM companies to the BOI to allow 100 percent WFH. The DTI MC covers all affected RBEs in the IT-BPM sector that have remaining incentives under Section 311 of the National Internal Revenue Code of 1997, as amended, or those with approved incentives on or before Sept. 14, 2022 under the CREATE Act with the concerned investment promotion agencies, particularly those currently registered with the PEZA, that intend to register with the BOI. PEZA issued is own  MC, No. 2022-067 which  provides, among others, that the eligible IT locators will have December 31 to avail of the paper transfer of registration. The MC provides PEZA will continue to administer to them the fiscal and non-fiscal incentives for the sunset period. PEZA will also get to retain the monitoring and reporting of the subject locators’ performance and for other compliance requirements. As these covered RBEs will not cancel their registration with PEZA, the agency will be kept whole with its investment facilitation and revenue generation functions. PEZA also indicated additional reminders for its IT-BPM companies availing of the transfer to which includes maintaining an office inside PEZA-registered IT centers/buildings. Failure to comply with this mandatory requirement will result in the cancellation of its registration with PEZA as an IT enterprise and subsequently, its registration with BOI.

Asian shares waver, dollar dips ahead of Fed policy decision

Asian shares wobbled in cautious trading on Wednesday while the dollar sagged slightly as investors braced for the U.S. Federal Reserve’s policy outcome later in the global day with many looking for any signs of a slowdown in future rate hikes. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.2 percent lower in early trade, as a drop in Chinese bluechips and Hong Kong shares offset an uptick in South Korea and Australia. U.S. stocks closed lower, with the Dow Jones Industrial Average slipping 0.24 percent, the S&P 500 shedding 0.41%and the Nasdaq Composite falling 0.89 percent. In the currencies market, the dollar eased 0.6 percent against the Japanese yen to 147.32 yen in thin liquidity, moving further away from its recent high of 148.84 yen just two sessions ago. It held largely steady against other currencies. The safe-haven greenback gave up some of the rapid gains this year in October on speculation the Fed might indicate a slowdown in its aggressive tightening campaign at its November policy meeting. U.S. Treasury yields were largely steady on Wednesday after reversing much of the losses overnight on the unexpected strength in the jobs data. The yield on benchmark 10-year notes eased 2 basis points to 4.0336 percent while the yield on two-year notes was little changed at 4.5364 percent. In commodities, oil climbed after industry data showed a surprise drop in U.S. crude stockpiles, suggesting demand is holding up.

Dollar sags as Fed decision looms; yen surges

The U.S. dollar slipped from near a one-week peak versus major peers on Wednesday, with traders on tenterhooks before a looming Federal Reserve rate decision that should also give clues on the future policy path. The dollar index – which gauges the greenback against a basket of six counterparts that includes the yen, euro and sterling – eased 0.14 percent to 111.33, but still not far below Tuesday’s high of 111.78, which was the strongest level since Oct. 25. The index rode a yo-yo overnight, dropping fast in the European open only to recover those losses after U.S. data pointed to continued price pressures, dampening speculation of a Fed pivot this year. U.S. job openings unexpectedly rose, suggesting wage growth remains elevated, while construction spending staged a surprise rebound. The dollar index has surged more than 15 percent this year as the Fed has hiked rates hard, crushing other currencies and heaping pressure on the global economy. On Wednesday, the Japanese currency jumped suddenly by about half a yen to 147.4 per dollar. It then extended those gains, with the dollar last down 0.55 percent at 147.40 yen. The euro edged up 0.15 percent to $0.9888, but still close to the previous session’s one-week low at $0.98535.

Philippines ready to face challenges – BSP

The affirmation of the Philippines’ investment grade rating by Fitch Ratings reflects a credible economic policy framework, strong economic growth and sound external finances, according to economic managers.

Bangko Sentral ng Pilipinas Governor Felipe Medalla said the BSP “consistently signals to the market its unwavering commitment to use the tools at its disposal to address the current challenges brought by monetary policy tightening of advanced economies and its impact on small open economies like the Philippines.” The BSP’s policy toolkit includes interest rate adjustments, a flexible exchange rate and the use of foreign exchange reserves. The debt watcher sees the Philippine economy growing by 6.8 percent this year, driven by strong domestic demand, reflecting normalization of economic activity after the pandemic and the government’s investment program. The direction of these estimates is aligned with the Marcos administration’s medium-term fiscal framework. As of end-September, the country’s gross international reserves (GIR) stood at $93 billion, representing a more than adequate external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments services, exceeding the three months threshold set by the International Monetary Fund. Moreover, the GIR is also about four to 6.6 times the country’s short-term external debt.

PHL companies expect growth in cashless payments to continue

Payment splution providers said enterprises in the Philippines are increasingly accepting cashless payments, and this trend is expected to continue. According to the Visa Consumer Payments Attitude Study 2022, nearly four of every five Filipino consumers (78%) plan to use digital payments more often, with three in four (79%) believing it is safer. GrabPay, also a payment solution provider in the Philippines, said it continued to see growth in cashless transactions despite the full reopening of the economy. GCash President and Chief Executive Officer Martha M. Sazon said the company saw higher user engagement “now that things have started to normalize.” According to London-based data analytics and consulting company GlobalData Plc, food and drink accounted for the largest share of the total e-commerce transaction value last year due to the popularity of online grocery sales and on-demand food delivery services amid the public health crisis. 

DBM sets digitalization of procurement 

The Department of Budget and Management (DBM) has emphasized digitalization of the government’s procurement processes as a cornerstone of achieving bureaucratic efficiency. Amenah Pangandaman, DBM secretary and concurrent Government Procurement Policy Board (GPPB) chairperson, pointed out that pilot testing of the revised procurement reports is a milestone towards improved planning and monitoring by procuring entities. This undertaking, similar to the data sharing agreement with the SEC, is the government’s step to transforming public procurement system, according to Pangandaman. The revised procurement reports and data sharing agreement with the SEC will further magnify the government’s ability to fix bottlenecks and identify delays in procurement through offering a holistic view of the status of government procurement. These engagements will also equip the government with tools in making data-driven decisions and actions.

Food manufacturers seek DTI price-hike OK

THE Department of Trade and Industry (DTI) said it has received price-increase requests from canned goods, milk, coffee, and bread manufacturers. “We have petitions for canned meat, for instance. For canned meat, note that that’s a prime commodity so in case of a price freeze, they are not included because they are prime but we have petitions for canned sardines, for milk, coffee, and bread, which [are] of course part of our basic necessities,” DTI-Consumer Protection Group Assistant Secretary Ann Claire Cabochan said in a televised interview on Monday. Cabochan said the Trade department is coordinating with the manufacturers of these products.