ECCP at Work

PH books $923 million foreign direct investment net inflows in October 2022

The Philippines booked a total of $923 million in foreign direct investment (FDI) net inflows in October, data from the Bangko Sentral ng Pilipinas showed. October's total is 6.3 percent higher than the $868 million net inflows in October 2021, the BSP said in a statement. "Despite the global economic headwinds, FDI net inflows rose on account of the increase in non-residents’ net investments in debt instruments and equity capital of their local affiliates," the BSP said.

November trade deficit widens to $3.68 billion

Trade deficit widened to a two-month high of $3.68 billion in November, as export growth slowed while imports declined for the first time in nearly two years, the Philippine Statistics Authority reported. Preliminary data from the PSA showed the value of merchandise imports slipped by 1.9% to $10.78 billion in November, a reversal of the revised 7.7% growth in October and the 36.8% rise in November 2021.

Philippines to see decline in debt burden in 2023

The Philippines will likely see its debt decline this year amid continued economic growth, Moody’s Investors Service said. “For only a few sovereigns, including Fiji, Maldives and the Philippines, debt burdens will decline by several percentage points in 2023, driven by high nominal GDP growth,” Moody’s said in a report. The National Government’s outstanding debt rose by an annual 14% to a record-high of P13.644 trillion as of end-November. However, the end-November debt inched up by only 0.02% month on month “primarily due to the effect of local currency appreciation against the US dollar on foreign currency loans.”

WB cuts PHL growth outlook to 5.4%

Philippine economic growth would probably slow to 5.4% this year, from an estimated 7.2% in 2022, amid a looming global recession, the World Bank (WB) said. In its latest Global Economic Prospects report, it trimmed its gross domestic product (GDP) growth forecast for the Philippines from its 5.6% projection in June. The World Bank’s latest GDP forecast is below the government’s 6-7% growth target for the year.

'Worst is over': Medalla says inflation may revert within target by Q3

Bangko Sentral ng Pilipinas Governor Felipe Medalla said the worst could be over for inflation as signs of depreciation are observed despite the consumer price index remaining high in December. Inflation in December reached 8.1 percent due to higher prices for vegetables such as onions. But other price pressures earlier in 2022 have started to fade including supply shocks and the high prices of sugar and oil, Medalla said. "I think the worst is over... We thought that the last bad month would be October or November but that didn’t happen. We had another shock. But finally the December print, although the year-on-year is quite high, the month-on-month is back to the normal 0.3 percent," he said. In a span of 6 months, the BSP raised the key interest rate to 5.5 percent from 2.25 percent to tame inflation and to help stabilize the peso against the US dollar. 

Zubiri assures Senate passage of LEDAC priority bills in Q1

Senate President Miguel Zubiri sees his fellow senators passing within the first quarter of the year the rest of the priority measures from the Legislative-Executive Development Advisory Council (LEDAC) list that have been passed in the House and still pending in the Senate. However, the Senate leader said they will not railroad the measures, “even as several priority bills are also pending with us,” but assured “hopefully we can pass these on the first quarter of this year.”

Airport authority sees 2023 revenue rising 36% to P11.5B

The Manila International Airport Authority (MIAA), which manages the Ninoy Aquino International Airport, said it expects revenue to rise 36% to P11.46 billion this year, with a capital expenditure target of P2.69 billion, up 98%. The budget for maintenance and other operating expenses has been raised by 18% to P5.42 billion. Operating expenses include water, light, power, repairs and maintenance, manpower services, and security services.

CAAP wants to use government dividends for equipment upgrade

The Civil Aviation Authority of the Philippines (CAAP) will cut the dividends it remits to the government to raise the P13 billion it requires to upgrade air traffic control facilities and prevent the airspace shutdown from happening again. Transportation Undersecretary Roberto Lim told The STAR that CAAP would request dispensation from Republic Act 7656, or the Dividends Law, which mandates all state-run firms to declare and remit 50 percent of their net earnings to the government every year.

Car sales up 31% in 2022, exceed industry target

Automotive sales jumped past 352,000 last year, with units sold breaching the industry’s target on the back of surging demand, data from vehicle manufacturing groups show. In a joint report released on Wednesday, the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) said that January-to-December 2022 vehicle sales reached 352,596 units, equivalent to a 31.3% improvement compared with 268,488 units in 2021.

PHL data center prospects deemed promising due to digitalization push 

The Philippines is viewed as a promising market for data centers due to its digitalization efforts and surging use of e-commerce, according to firms providing real estate and legal services to potential locators. Monica Gonzales, lead data center officer for real estate consultancy Santos Knight Frank, said in a recent forum organized by the European Chamber of Commerce of the Philippines that the Philippines is also viewed positively because of its investment-friendly policies, strong information technology and engineering talent pool, and the potential for tapping renewable energy in data center operations.

Marcos taps ex-COA chair Michael Aguinaldo to lead PH Competition Commission

President Ferdinand Marcos, Jr. has chosen former Commission on Audit chairperson Michael Aguinaldo to head the Philippine Competition Commission (PCC), Malacañang has announced. Aguinaldo's term as PCC chairperson will expire on Jan. 7, 2030, the Presidential Communication Office's statement showed. The commission, tasked to deter and go after anti-competitive deals and anti-competitive mergers, is an attached agency of the Office of the President.

Senate sets CAAP fiasco hearing; Zubiri sees serious security risks

Senate President Miguel Zubiri signaled readiness to actively participate in the Senate Public Services Committee inquiry on Thursday into the New Year’s aviation fiasco involving the Civil Aviation Authority of the Philippines (CAAP), that paralyzed air traffic control and navigation systems, disrupting nearly 300 flights and stranding 65,000 passengers. The Senate President lamented, “it does not give us a good picture of our country and so we are having a hearing Thursday,” to be presided by Senator Grace Poe, the chairperson of the Senate Committee on  Public Services.

BSP hopes to cut rates in 2024, flags RRR reduction

The Philippines‘ central bank governor said he hoped benchmark interest rates could be cut in 2024, once inflation was under control, and flagged the prospect of lowering reserve requirements for banks in the first half of this year. While pent-up domestic demand will carry the economy this year, it will likely fade by 2024, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said. “By 2024, when pent-up demand is gone, then monetary policy hopefully at that time will be much looser than what we have now,” he said. Central banks around the world, led by the U.S. Federal Reserve, have since last year raced to contain elevated inflation through large increases in benchmark rates, dampening economic growth and fuelling fears of recession. Another easing measure could involve banks’ reserve requirement ratio, with a high probability of it being cut in the first half, Medalla told reporters.