ECCP at Work

Inflation at 8.7%; job losses seen

Persistently high inflation and bloated wage increases could lead to job losses nationwide, local economists warned on Tuesday. This, after the Philippine Statistics Authority (PSA) reported that inflation reached 8.7 percent in January 2023. This is the highest in 15 years or since November 2008 when inflation clocked in at 9.1 percent.

Jobless rate eases to 3-year low in ’22

The Philippines’ unemployment rate eased to a three-year low of 5.4% in 2022, despite a slight uptick in December, the Philippine Statistics Authority (PSA) said. Preliminary results from the PSA showed the unemployment rate stood at 4.3% in December, a tad higher than November’s 4.2% jobless rate but smaller than the 6.6% in December 2021. The PSA said there were 2.22 million jobless Filipinos in December, up 43,000 from the 2.18 million unemployed in November.  However, this was a better than the 3.28 million jobless recorded in December 2021.

Lawmakers agree to lift economic provisions that restrict FDI inflows

Lawmakers who are pushing for Constitutional amendments have reached a consensus to lift “overly-protective economic provisions” that restrict the inflow of foreign capital, the leader of the House of Representatives said on Wednesday. Speaker Ferdinand Martin G. Romualdez said congressional deliberations on the proposed Constitutional amendments are more focused now on the need to encourage investments that would further stimulate economic activities, create job opportunities, reduce poverty and lower prices of goods and services.

PHL growth seen to fall short of target this year

The Philippine economy’s growth may fall short of the government target this year, as interest rates may continue to rise amid sticky inflation. In a note dated Feb. 8, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the bank expects the country’s gross domestic product (GDP) to grow by 5% this year, lower than the government’s 6-7% goal. “Although the 2022 GDP result surprised on the upside, fading revenge spending, sticky inflation, uncertainty over interest rates and tight fiscal purse strings all point to the Philippines missing its growth target this year,” Mr. Mapa said. Headline inflation accelerated to 8.7% in January, marking the 10th straight month that inflation exceeded the central bank’s 2-4% target.

‘Strategic’ tag for ecozone logistics industry seen unlocking investments

The classification of economic zone logistics services enterprises (ELSEs) as eligible for incentives under the Strategic Investment Priorities Plan (SIPP) is expected to raise investment in the industry, the Philippine Economic Zone Authority (PEZA) said. In a statement, PEZA Officer-in-Charge Tereso O. Panga said ELSEs can now avail of incentives under Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. The industry was ruled eligible by the Board of Investments (BoI) in Memorandum Circular (MC) No. 2023-001 issued on Jan. 31, which clarified that ELSEs were covered under the 2022 SIPP.

DTI issues new SRP amid surging inflation

The Department of Trade and Industry (DTI) on February 8 released a new suggested retail price (SRP) bulletin, a day after the inflation rate of 8.7 percent was announced. In the latest bulletin, 141 or 65 percent of the total stock-keeping units (SKUs) maintained their August 2022 prices while 76 or 35 percent of the SKUs increased by P0.45 to P7. Commodities that increased prices include canned sardines in tomato sauce, processed milk, coffee 3-in-1 original, noodles, bread, detergent soap, canned meat, candles, and condiments.

DOH confirms first cases of Covid variants CH.1.1, XBB.1.5

The Department of Health (DOH) on Tuesday confirmed the detection of the first CH.1.1 and XBB.1.5 cases in the country. In a statement issued on Tuesday night, the DOH clarified that CH.1.1 is a sublineage of BA.2.75 while XBB.1.5 is a sublineage of XBB. The DOH assured that is continuously monitoring these variants and coordinating with WHO for more guidance. 

DTI’s RCEP pitch at Senate: ‘No simple trade agreement’

The Regional Comprehensive Economic Partnership (RCEP) is not just a “simple” trade agreement, Trade Secretary Alfredo E. Pascual told senators, noting that as an ASEAN-led free trade agreement, it will ensure the region’s “continued economic advantage” and will help maintain a “balance of power” within the region. RCEP is also expected to further promote economic efficiency of member states, strengthening linkages in sectors such as manufacturing, technology, agriculture, and natural resources, as well as reinforcing the participation of micro, small, and medium enterprises (MSMEs) in the global value chain networks, according to Pascual.

‘Difficult’ to top 2022 growth, but PHL seen outperforming

The Philippines will find it difficult to match its performance in 2022, but growth of 5.5% to 6.5% in 2023 will still stand out in the context of a slowing global economy, a senior legislator said. At an economic briefing hosted by the Management Association of the Philippines, Albay Rep. and House ways and means committee Chairman Jose Maria Clemente S. Salceda said: “More likely than not, growth will be within 5.5% to 6.5% — which is still an overwhelmingly positive performance. The global tide is lower, but we will still be on top.” He said the economy in 2023 will be driven by strong consumer demand but tempered by high inflation and rising interest rates.

PPP Center focused on solicited projects to better align with gov’t priorities

THE head of the PPP Center said the agency plans to focus on solicited projects, which will have been vetted extensively for conformity to government priorities. “One thing we are trying to implement now is to make sure that we focus on the solicited mode of PPPs (public-private partnerships) because we know that projects take a long time and it takes time to identify the priority infrastructure projects. The government would need to devote resources to developing and studying these projects,” PPP Center of the Philippines Executive Director Cynthia C. Hernandez said in a forum on Wednesday. This focus is part of a broader effort to take a “harmonized approach in infrastructure development. We want to align it with the government’s infrastructure program. These are projects that the government must identify. PPP projects would then be prioritized, not just (selected) randomly,” she said.

Six supply chain trends to watch out for in 2023

According to Mordor Intelligence, e-commerce in the country is expected to grow at a compound annual growth rate of 14.1% from 2023 to 2028. Meanwhile, International Trade Association forecasts that the industry’s sales will reach $24 billion by 2025. For companies, ensuring deliveries reach their customers safely and as quickly as possible is critical to success. But this hinges on ensuring that supply chains are equipped to navigate evolving needs, bottlenecks, and the regulatory landscape. Here are six forecasts to look out for in 2023 as retailers look to make their supply chains leaner, leverage technology, and take advantage of growing consumer appetite: Greater focus on end-customer experiences, overcoming fragmentation via a platform-based approach, more adoption of blockchain, predictive intelligence, artificial intelligence, machine learning and process efficiencies to surge in popularity, greater reliance on multiple logistics providers, economic benefits of sustainability to come to the fore.

DTI lists existing policies, past programs to address inflation

The Department of Trade and Industry (DTI) yesterday said it has policies and programs aimed at curbing inflation focusing on four key areas: consumer prices, logistics and supply chain management, investment promotion, and partnership with other government agencies. A statement released by the agency yesterday enumerated the past and ongoing policies and programs but did not give specifics on the outcomes of each.

Lack of ‘realistic’ info about PHL remains a challenge to attracting Spanish-speaking tourists

THE Philippines continues to be a desired leisure destination among Europeans, especially the Spaniards, but more realistic information about the country needs to be disseminated to them. Spain is considered a developing market by the Department of Tourism (DOT), with tourists to the Philippines having reached almost 20,000 last year, although this was still 60 percent less than the 50,000 who arrived in 2019, prior to the pandemic.

RCEP trumps other free trade pacts

The Department of Trade and Industry (DTI) yesterday said the benefits of  Regional Comprehensive Economic Partnership (RCEP) are more superior than those afforded by the free trade agreements (FTA) Asean, of which the Philippines is part,  has with the rest of the RCEP countries. At the hearing of the Senate subcommittee on RCEP chaired by Senate pro tempore Loren Legarda yesterday, DTI assistant secretary Allan Gepty illustrated how the Philippines can have better access for cacao, canned pineapple, papayas, agriculture inputs and garments under RCEP versus under Asean plus one FTA not just through tariff cuts but also in terms of raw materials sources and simplified trading rules.

BSP sets liquidity, capital requirements for e-money issuers

The Bangko Sentral ng Pilipinas (BSP) has set liquidity and capital requirements for e-money issuers (EMIs) based on the scale of their operations to help ensure the industry’s resilience and protect customers amid increased technology risks. BSP Circular No. 1166 dated Feb. 7 and signed by BSP Governor Felipe M. Medalla amends the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions, specifically the rules governing the issuance of e-money and the operations of e-money issuers in the Philippines. These include rules on liquidity, capitalization, load limit, as well as guidelines on reporting and sanctions.

Zubiri, Legarda to lead RCEP ratification

Presiding over the resumption of the Senate deliberations on its concurrence on the ratification of the Regional Comprehensive Economic Partnership Agreement (RCEP), Senate President Pro Tempore Loren Legarda shared the frustration of farmers, who are among the direct stakeholders of currently the world’s biggest free trade pact. During a public hearing conducted by a special subcommittee under the Senate committee on foreign relations, Legarda assured that farmers’ issues are heard and answered by the concerned agencies.

PBBM leaves for Japan; to sign 7 key bilateral agreements

President Ferdinand R. Marcos Jr. will leave for Japan Wednesday to reaffirm Philippines’ strong and vibrant relations with the country. The trip, slated from February 8 to 12, will include a meeting with Japanese Prime Minister Fumio Kishida and an audience with Emperor Naruhito. In a pre-departure briefing for Marcos’ trip to Japan held in Malacañang last week, DFA Assistant Secretary for Asian and Pacific Affairs Neal Imperial said, Japan was the first country with which the Philippines forged a strategic partnership. It is also only one of two strategic partners of the Philippines, the other one being Vietnam. Imperial said seven key bilateral agreements would be signed covering cooperation in the following: infrastructure development; defense; agriculture; and information and communications technology.

Malampaya contribution to gov’t revenue: $13B

The Malampaya deep water gas-to-power project has remitted $13 billion to the national government since inception, the operator of the gas field said on Wednesday (Feb. 8). “The SC (service contract) 38 has generated and remitted to the Philippine government some $13 billion since its inception,” said Prime Infrastructure Capital Inc. (Prime Infra) president and CEO Guillaume Lucci at the Powertrends International Business Forum held on Wednesday.

Manufacturing growth cools in Dec.

Factory production grew at its slowest pace in three months in December due to seasonal factors and a decline in trade performance, economists said. Preliminary results of the Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries (MISSI) showed manufacturing, as measured by the volume of production index (VoPI), expanded by 4.8% year on year in December. December growth slowed from the revised 5.9% in November and 19.2% last year. It also marked the slowest uptick since 4.6% in September last year. The latest print brought last year’s average factory output growth to 15.2%, easing from the 52.6% average in 2021.  Robert Dan J. Roces, chief economist at Security Bank Corp., said in an e-mail that December is usually a slow month for many industries so factory orders may have dropped

Single-use plastic production rose between 2019 and 2021 despite pledges

Polluting single–use plastic production rose globally by 6 million tons per year from 2019 to 2021 despite tougher worldwide regulations, with producers making “little progress” to tackle the problem and boost recycling, new research showed on Monday. Single–use plastics have emerged as one of the world’s most pressing environmental threats, with vast amounts of waste buried in landfills or dumped untreated in rivers and oceans. The manufacturing process is also a major source of climate-warming greenhouse gas

Philippine vehicle production picks up by 10% in 2022

The Philippines posted a 10 percent increase in motor vehicle production in 2022 but it remains behind the majority of its Southeast Asian neighbors. Based on data from the Association of Southeast Asian Nations (ASEAN) Automotive Federation (AAF), 92,223 motor vehicles were assembled in the Philippines last year, higher than the 83,846 units produced in 2021. In December alone, the country registered the highest growth rate in vehicle production among ASEAN countries tracked by AAF at 57.5 percent with a total of 8,085 units. However, full-year AAF figures showed that the country posted the slowest growth rate among other ASEAN countries tracked by the AAF. A total of 4.38 million motor vehicles were assembled in the region last year, 23.9 percent higher than the 3.538 million units in 2021.

Banks plan to boost agri lending this year — survey

Majority of Philippine banks are planning to ramp up lending to the agriculture sector in the next 12 months, a joint survey by the Bangko Sentral ng Pilipinas (BSP) and the Department of Agriculture (DA) showed. The inaugural 2021 Countryside Bank Survey (CBS) released on Thursday showed at least three-fourths (76%) of bank branches plan to expand lending to the agriculture sector in the next 12 months. Thrift banks were the largest sector (93%) to confirm their plan to expand agricultural lending, while a little over half (53%) of universal and commercial banks (U/KBs) responded positively.   

DENR, PhilSA to establish natural resources database

The Department of Environment and Natural Resources (DENR) and the Philippine Space Agency (PhilSA) signed a memorandum of agreement to jointly create a national environment and natural resources (ENR) geospatial database. “A geospatial platform is fundamental for us in terms of establishing the physical basis of our natural resources, and in terms of our wanting to inventory them for strategic and critical development of our country,” DENR Secretary Antonia Loyzaga said in a statement. Under the agreement, PhilSA will be responsible in “developing and generating maps, systems and tools on a national level that analyzes vulnerabilities and impacts of climate change and disasters, among many others.” Meanwhile, the DENR will provide information or data required by PhilSA to develop and generate maps and other field data.

PHL to deploy disaster response specialists and healthcare workers to Turkey

A 12-man team will be deployed by the Metropolitan Manila Development Authority (MMDA) while the Department of Health (DOH) said it will be sending 31 health emergency responders to Turkey following a 7.8-magnitude earthquake on February 6. The MMDA personnel will part of the Philippine contingent, with the Office of the Civil Defense (OCD), Department of Health (DOH), Philippine Army, and the Philippine Air Force (PAF), among others. The MMDA team, according to MMDA acting Chairman Romando Artes, is composed of well-trained disaster rescuers who were previously deployed to help in the rescue and retrieval operations in Bohol, Nepal, and Pampanga which were also hit by earthquakes in 2013, 2015, and 2019 respectively.

Villafuerte wants to impose $25 entry tax on foreign tourists

A lawmaker has proposed imposing an entry tax on foreign visitors to help fund tourism development programs.  “The fixed rate of $25 is proposed to be competitive with that of the current taxes other countries have set,” Camarines Sur Rep. Luis Raymund “L-Ray” F. Villafuerte Jr. said on Wednesday. He said this rate is based on the average entry and exit taxes in other Asian countries like Thailand and Indonesia. 

Thailand, the most visited country among southeast Asian countries, has announced that it will collect tourist taxes of $9 or 300 baht beginning June 2023.