ECCP at Work

Free Trade Hinges on GSP+ compliance

The European Union (EU) is still interested in negotiating a free trade agreement (FTA) with the Philippines, but "not all elements are in place yet," according to Luc Véron, ambassador of the EU Delegation in Manila. Veron said at the 2022 European-Philippine Business Dialogue that the EU is looking forward to the Philippines implementing its commitment on the Generalized System of Preferences Plus (GSP+) conventions because it will "make it easier for the EU and the Philippines to further assess the prospect of a resumption of the negotiation (of an FTA) and, more importantly, the prospect of a successful outcome of such talks." According to Veron, the Philippines' compliance with GSP+ "remains(s) a fundamental element" of the European Commission's "reflection" on whether or not "the conditions are right to resume one of the Southeast Asian negotiations that has been posed in recent years."

European Lawmakers may visit PH more positive talks seen [mention]

Next year may see the arrival of European legislators, an envoy suggested on Monday, adding that he anticipated more fruitful negotiations between Manila and the EU. As a result of worries over his anti-drug campaign, which resulted in the deaths of thousands of drug suspects, former president Rodrigo Duterte experienced tense relations with the bloc and the Philippines. Veron noted that the recent trip to Europe by the president of the Senate and a group of senators from the Philippines was also a very encouraging development. However, more needs to be done to advance trade ties between the Philippines and the EU. For starters, the Philippines must submit a new application for the Generalized Scheme of Preferences (GSP+) before the new rules take effect in 2024.

PPP Center pushes creation of Department of Water Resources  [mention]

The Department of Water Resources should be established, according to the Public-Private Partnership (PPP) Center, to aid in the execution of initiatives in the water sector. The organization is in favor of a bill that would establish the Department of Water Resources, said Executive Director Cynthia Hernandez at the Water Challenge Forum hosted by the European Chamber of Commerce of the Philippines. The Department would be the main institution in charge of policy, planning, coordination, implementation, and monitoring of the development and management of the nation's water resources under the proposed legislation. Additionally, it was one of the top priorities mentioned at the Legislative-Executive Development Advisory Council's inaugural meeting last month.

PEZE seeks creation of 13 economic zones

According to Mr. Panga, the 13 proposed ecozones are expected to attract investments totaling P17.92 billion. All of the proposed ecozones are outside of Metro Manila. He stated that the Light Industry and Science Park in Sto. Last month, Tomas, Batangas, secured a deal for a data center worth P3.4 billion. Mr. Panga also stated that another large-scale investment is being discussed with Suntrust EcoTown Tanza in Cavite. Meanwhile, Mr. Panga stated that the PEZA's 2022 investment growth target is attainable as a result of "aggressive investment promotions."

House passes PBBMS priority tax measures

According to House Committee on Ways and Means Chairman Joey Sarte Salceda, of the P48 billion in revenue from these tax measures, about P19 billion will come from the nonresident DSP VAT, P9.3 billion from plastic bags, and P20 billion from Package 4, the majority of which will come from eliminating the tax exemption on pickup trucks and raising the tax rates on foreign currency deposit units to 20%. The writers of HB 4102 claimed that plastic pollution is a serious threat to the environment, particularly waterways like rivers, which are vital to the livelihood of fisherman. According to the Philippine Plastics Industry Association Inc., the measure will "hurt and ultimately kill" the sector. The HB 4122, meanwhile, aims to resolve any uncertainties in the VAT system that have let some digital services and items supplied over the internet to avoid being subject to VAT. 

Budget to support economic revival

The national budget of P5.268 trillion for the upcoming fiscal year, according to a senatorial leader, will maintain the positive trend of the Philippine economy's expansion. The government should seize every opportunity, according to Senate Majority Leader Joel Villanueva, after the Philippine Statistics Authority stated that the economy is expanding faster than anticipated with a third quarter GDP growth of 7.6 percent. Villanueva added that since the rise in food prices is the main cause of inflation, which reached 7.7 percent last October, the government should assist the economic growth momentum in part by ensuring food sufficiency. 

NEDA seeks to amend rules on JVs

TOLL FEES, TARIFFS, and other charges imposed by government-private joint ventures (JVs) may soon require regulatory approval, according to proposed amendments by the National Economic and Development Authority (NEDA). The NEDA released proposed changes to the guidelines and procedures for entering into joint venture agreements between the government and private entities, which were last revised in 2013. Even before bidding, the agency or local government unit (LGU) should secure the advice of the regulator or the approval of a relevant body, or both, in the draft rules. An appropriate regulatory body will keep an eye on the consistency of these proposed rate changes. If a regulator rejects the proposed amount of fee or toll adjustments stipulated in the contract, the agency or LGU may allow the project proponent "to recover the difference between the tolls/fees/rentals/charges stipulated in the contract and the amount approved by the regulator through measures permitted by the contract."

PH, 4 Asean CBs to strengthen regional payment connectivity

On the sidelines of the G20 Leaders' Summit in Bali, Indonesia, BSP, Bank Indonesia (BI), Bank Negara Malaysia (BNM), Monetary Authority of Singapore (MAS), and Bank of Thailand (BOT) signed a Memorandum of Understanding (MOU) on Cooperation in Regional Payment Connectivity (RPC). Widodo emphasized the "importance of concrete joint collaborative action in addressing global challenges" during his remarks. He also expressed his heartfelt gratitude to the governors of the five central banks for their dedication. The MOU underscores Asean's commitment to achieve regional payments interoperability and connectivity by 2025 "to enable cheaper, faster, and more transparent cross-border payments," according to Ravi Menon, managing director of MAS. BOT Deputy Governor Ronadol Numnonda, who represented BOT Governor Sethaput Suthiwartnarueput, emphasized that the Asean region "has now become a global hotspot in cross-border payments linkages."

P18B ecozones pending 

During a consultative meeting at Philippine Ecozones Associations (PHILEA), Tereso Panga, the OIC of the Philippine Economic Zone Authority (PEZA), reported that thirteen economic zone projects valued at Php 18 Billion are currently pending in the Office of the President. In addition, the president of the Philippine Ecozones Associations (PHILEA), Francisco Zaldarriaga noted that the “total investments in ecozones stood at  P1.13 trillion, generated $411 billion in exports, and employed 378,395 workers.” Thus emphasizing the vast investment opportunities in the ecozone projects. Accordingly, DTI Secretary and chair of the Inter-Agency Investment Promotion Coordination Committee (IIPCC) Alfredo Pascual further highlighted the need to improve the country’s foreign direct investments in light of its industrialization objectives. 

SRA to reclassify sugar for export to boost local supply

Sugar Regulatory Administration (SRA) recognizes the shortage of sugar in the domestic market as the demand for sweeteners continues to rise. Records of the SRA show that the domestic supply of raw physical sugar decreased by 24.98 percent in the same period last crop year. Consequently, the SRA released a memorandum on a sugar order last November 5 regarding the “reclassification of outstanding A or US export market sugar and D or world market sugar to B or domestic sugar under certain conditions.” With this, the said administration aims to reclassify or convert 16,910 metric tons (MT) of sugar for export by conducting consultations with its respective stakeholders and producers. 

DTI: Upgraded AANZFTA to benefit MSMEs 

The Department of Trade and Industry (DTI) announces the inclusion of additional chapters on the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) centered on Government Procurement, MSMEs, and Trade and Sustainable Development. According to DTI’s Trade Secretary Alfredo E. Pascual, it aims to “accelerate supply chain integration and resilience; ensure a smooth flow of essential goods during crises; deepen services and investment liberalization; and support electronic commerce and digital transformation.” This amendment will strengthen and integrate the regional economy across the ASEAN, Australia, and New Zealand.

IATA: Forex losses to force airlines to cut flights 

Major airlines such as Emirates, Cebu Pacific, and AirAsia Philippines expect to suffer foreign exchange losses due to the continuous depreciation of the local currency. The International Air Transport Association (IATA) projects that the financial loss in the aviation industry is at least $1.9 billion. Additionally, the IATA stated that the repatriation process would further expose “significant risk to airlines’ earnings” because of the weakening of the Philippine Peso. Such airlines aim to execute strategic actions to counter the severity of the impact caused by forex fluctuations by increasing flight frequency and expanding revenue streams, among others.  

DOE crafts EO for offshore wind development 

The Department of Energy will address the need in forming a regulatory framework and streamlined process and requirements for the emerging Offshore wind development (OSW) industry by issuing an executive order (EO). This EO will cover “a long-term vision, infrastructure development, investments[,] and sound policies,” as mentioned by Raphael Lotilla, the Energy Secretary of the DOE. Along with the OSW is the development of Marine spatial planning (MSP) since it is deemed essential in the rational utilization of marine space. Moreover, the DOE also plans to integrate the Energy Virtual One Stop Shop (EVOSS) System with the development of the OSW application. The current installed capacity of the OSW wind service is 42 with an indicated 31.5 gigawatts (GW) with a potential of up to 178 GW of offshore wind, as reported by the World Bank. 

Opening of Philippines RE sector not detrimental to local investors

The Department of Energy (DOE), with legal support from the Department of Justice, will issue an amendment to the Implementing Rules and Regulations (IRR) of Republic Act 9513 or also known as the Renewable Energy Act of 2008, which allows 100 percent foreign ownership on the renewable energy sector of the country. According to the DOE, the change in the foreign restriction is essential in increasing the flow of foreign investments in renewable energy, thus aiding the agency's programs and objectives. As stated by its officials, the DOE is confident that Filipino investors and developers should not be alarmed since "It is stated in the Constitution that we do give preference to Filipinos, whether in the utilization of our natural resources or in investments. Applications goes through legal, technical, and financial review in order to protect our interests”. Aside from renewable energy, the agency is also committed to expanding the potential of other sources of energy, such as conventional energy; and investing in advanced technologies like offshore wind and tidal streams. 

DOT breaches tourism target with over 2 million travelers to PH

At least two million visitor arrivals have been recorded in the Philippines since the country eased border restrictions last February, said the Department of Tourism (DOT). This has translated to around P100.7 billion worth of revenue in the tourism sector, surpassing its P4.94 billion record from the same period last year, according to DOT Secretary Christina Frasco in a statement on Tuesday. Frasco then cited a DOT report as of November 14, which showed a total of 2,025,421 visitor arrivals in the country – 1,487,343 or 73.43 percent of which were foreign tourists, while 538,078 or 26.57 percent were overseas Filipinos.

Upgrades to ASEAN trade deal with Australia, New Zealand expected to benefit MSMEs

The recently agreed updates to the ASEAN, Australia and New Zealand Free Trade Area (AANZFTA) deal are expected to accelerate the growth of micro, small, and medium enterprises (MSMEs) in the country, the Department of Trade and Industry (DTI) said. “The substantial conclusion of the upgrade negotiations marks another milestone for both ASEAN and Australia-New Zealand, as we gain another high-quality free trade agreement (FTA),” Trade Secretary Alfredo E. Pascual said in a statement on Monday. “The inclusion of a Chapter on Trade and Sustainable Development and MSMEs is expected to fuel inclusive growth and integration of businesses into the global value chain,” he added.