ECCP at Work

RCEP ratification seen making progress after show of support from Marcos, Cabinet

The Department of Trade and Industry announced that the ratification process of the Regional Comprehensive Economic Partnership (RCEP) has been reviewed by President Ferdinand R. Marcos, Jr. and is currently requested for the Senate’s concurrence, as decided by the Cabinet. Billed as the world’s largest free trade agreement (FTA), Trade Secretary Alfredo E. Pascual added that the RCEP is a determining factor for potential investors since it allows them to “export to all the RCEP-member countries competitively.” The Association of Southeast Asian Nations (ASEAN)'s ten members, along with Australia, China, Japan, South Korea, and New Zealand, make up the trade bloc. In September 2021, former Philippine President Rodrigo Duterte signed on to the RCEP. 

Revisiting CREATE law urged for better perks

In order to make tax incentives "more competitive," the Philippine Economic Zone Authority (PEZA) stated that the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law needs to be reviewed. PEZA Officer-in-Charge Tereso O. Panga mentioned at the PEZA’s 2022 Investors’ Recognition Day the rising concerns about the inconsistencies and the issue on the locators related to the zero value-added tax (VAT) rating incentive issued by the Bureau of Internal Revenue Revenue Memorandum Circulars] BIR RMCs. Mr. Panga added that all such complaints will be brought up by the Trade Secretary and PEZA’s Chairman of the Board, Mr. Alfredo E. Pascual, at the upcoming Fiscal Incentives Review Board (FIRB) meeting. Notable criticisms and heightening issues are also raised by some locators concerning the regulatory relief mechanism and streamlined guidelines for tax assessment. Aside from this, Mr. Panga also noted that the PEZA law must be amended in order to institutionalize the work-from-home policy and rationalize the ecozone proclamation requirements.

Debt-to-GDP ratio seen to drop to 50% by 2028

According to Finance Secretary Benjamin E. Diokno, the Philippines' debt-to-gross domestic product (DTP) ratio is predicted to fall to about 50% by 2028 if its robust economic development is maintained. The national government’s highest debt-to-GDP ratio was recorded last September at 63.7%. Prior to now, economic managers stated that the target was to reduce the debt-to-GDP ratio to 61.8% by year's end and to 52.5% by 2028. While the escalation of public debt continues to rise, Mr. Diokno noted that the country’s ability to pay can deal with it as long as the growth of the economy is sustained. Furthermore, Mr. Diokno highlighted two important factors in light of the sustainability of debt– “the cost and the ability to pay it off.” Both of these will be attained by the country’s reliance on strong credit ratings and stable economic growth, respectively. 

Slower growth seen in 2023: NEDA

The economy may experience a dip in growth in 2023, according to the country's socioeconomic head, following an anticipated robust expansion this year. In a social media post, Arsenio Balisacan, secretary of the National Economic and Development Authority (NEDA), predicted that the economy will likely increase by more than seven percent in 2022. The GDP expanded 7.7 percent throughout the first three quarters of the year. The administration has expressed confidence that it is on pace to meet its 2022 growth objective of 6.5 to 7.5%. NEDA emphasized that the government must constantly provide accurate and timely information to the people, particularly about socioeconomic policies with substantial ramifications.

ILO: Philippines has potential to boost jobs in manufacturing sector

As the economy recovers from the coronavirus pandemic, THE PHILIPPINES has the potential to grow manufacturing employment, according to the International Labour Organization (ILO) on Monday. In September, the Philippines' unemployment rate fell to 5%, the lowest level since the beginning of the pandemic. In September, this equates to 2.5 million unemployed Filipinos. However, job quality deteriorated in September as the number of Filipinos seeking additional employment surged to a six-month high of 15.4%, or 7.33 million individuals. Despite this, the manufacturing sector had the largest monthly job growth in September, adding 780,000 people to 4.45 million.

DOE expects completion of natural gas projects by Q1

The Department of Energy (DOE) anticipates the completion of natural gas projects in Luzon by the end of the first quarter of 2023, which would help stabilize the power supply in 2024. The Department of Energy (DOE) reported that two liquefied natural gas (LNG) projects are expected to be operational by March 2023, based on the project proponents' progress reports. In March 2023, FGEN LNG Corp., a subsidiary of First Gen Corp. with BW LNG providing LNG storage and regasification services, is also slated to launch its LNG terminal. First Gen's current gas-fired power plants, including the 1,000-MW Sta Rita power plant, 500-MW San Lorenzo power plant, 414-MW San Gabriel power plant, and 97-MW Avion power plant, will be fueled by LNG beginning in June 2023, when the terminal is scheduled to begin commercial operations.

ERC vows ‘transparent, accountable’ power rates

In an effort to achieve "energy democracy" in the Philippines, the Energy Regulatory Commission (ERC) vowed to support and empower electricity end-users. Dimalanta stated that this objective would be attained by transparent and accountable rate regulation. Energy democracy, as defined by the Climate Justice Alliance, is a transition away from the corporate, centralized fossil fuel economy and toward one governed by local communities and based on the principle of no environmental harm, which supports local economies and enhances the health and well-being of all. In response to the rising cost of electricity, the ERC has been investigating methods to reduce the burden on customers. It has ordered a review of supply agreements entered into by electric cooperatives and is examining the suspension of an end-user-funded subsidy for renewable energy companies.

Ensure safety of cyclists, transport advocates urge govt

Advocates for transportation urged the government to invest more in road infrastructure to protect the safety of cyclists and halt "deadly" two-wheeled travel in the country. Ann Angala, co-founder of the Bikers United Movement, stated that while government support for cyclists is still in its "infancy stage," it is an improvement over the scenario before the epidemic, when there were virtually no efforts for bicycles. According to the Move As One Coalition, the streets have become "death traps" for bicyclists. Citing data from the Metropolitan Manila Development Authority (MMDA), the group reported that between 2017 and 2021, 130 cyclists died and 6,405 were wounded while cycling in the National Capital Region.

Extension of lower agriculture tariffs pushed

In order to ensure the availability and affordability of pork, rice, and corn, the Foundation for Economic Freedom (FEF) is advocating for the extension of lower tariffs on these commodities. In three position papers, the organization urged the extension of the Executive Order (EO) 171 relief measures. The order extends through December 31, 2022, the 15 percent in-quota and 25 percent out-quota tariff rates for pork imports under Executive Order 134. Additionally, the 35 percent reduced duty on imported rice is extended until the end of the year. In addition, the EO reduced the in-quota duties on corn imports from 35% to 5% until the end of the year.

S&P sees slower PHL growth in 2023

S&P GLOBAL RATINGS increased its economic growth prediction for the Philippines to 7.1% for this year, but foresees weaker growth in 2023 due to the impact of rising interest rates and soaring inflation. In a report titled "Global Slowdown Will Hit, Not Halt, Asia-Pacific Growth" published on November 27, S&P increased its Philippine gross domestic product (GDP) forecast for this year from 6.3% to 7.1%. However, S&P reduced its GDP growth forecast for next year from 5.7% to 5.2%. This is below the government's 2023 growth target of 6.5-8%.

Oil prices drop; DOE notes no fuel supply constraints

The local oil industry has reduced prices for petroleum products for the second consecutive week. Despite yesterday's adoption of power warning levels in the Luzon Grid, the Department of Energy (DOE) reports that there are no fuel supply shortages in the country. As of 22 November, the DOE estimated that the average price per liter of gasoline (RON95) in Manila was P70.10, diesel was P76.15, and kerosene was P83.18. The Department of Energy also reported that year-to-date adjustments in petroleum products have resulted in a net rise of P17.75 per liter for gasoline, P33.85 per liter for diesel, and P27.85 per liter for kerosene. Yesterday, the National Grid Corporation of the Philippines (NGCP) issued yellow and red alerts in the Luzon Grid from 10 a.m. to 5 p.m. and from 6 to 9 p.m. Yellow alerts are sent when the level of power reserve in the system is low, and red alerts are issued when real power supply against demand is inadequate and power outages are near.