ECCP at Work

BSP sees more inflows of foreign investments

The Bangko Sentral ng Pilipinas (BSP) sees more foreign direct investments (FDI) and speculative funds entering the Philippines in the next two years due to the structural reforms undertaken by the government. Dennis Lapid, officer-in-charge of the BSP’s Monetary Policy Sub-Sector, expects FDI net inflows to pick up to $11 billion this year from $12 billion next year. The Philippines booked a 23.2 percent plunge in net FDI inflow to $9.2 billion last year after hitting an all-time high of $11.98 billion in 2021 due to the extended global slowdown and high inflation that adversely affected investor decisions.

Marcos Jr. vows to continue past admin’s over 70 infra projects

President Ferdinand “Bongbong” Marcos Jr. said his administration will see some projects of former President Rodrigo Duterte come into fruition after the government unveiled its flagship infrastructure program earlier this month. Out of the 194 infrastructure projects worth P9 trillion, at least 123 are new initiatives and 71 were from the Duterte administration. 

Supply chain financing to grow

Supply chain finance (SCF) solutions provider expects a rapid increase in use of SCF among micro, small, and medium enterprises (MSMEs), forecasting that this set of solutions will cover about 15 percent of the cost of the entire volume of goods and services produced by the sector by 2024. The forecast follows the examination of the Philippines Supply Chain Finance Market Development Report by International Finance Corp.  which said the Philippine market is estimated to have over $20 billion in readily available SCF assets to be taken up by banks and non-bank lending institutions that do not take deposits

‘Drop Bangko Sentral as funding source for Maharlika investment’

SEN. Sherwin Gatchalian yesterday asked the Senate Committee on Banks to exclude the Bangko Sentral ng Pilipinas (BSP) as a funding source for the proposed Maharlika Investment Fund (MIF) amid fears of potential financial shocks similar to the experience of the United States. Gatchalian made the appeal to Sen. Mark Villar, whose committee is now in the middle of threshing out the technical details of the proposed sovereign wealth fund, which the government and its advocates at the House of Representatives said can be used to invest in key sectors like foreign currencies, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects to help fund the country’s priority programs. Gatchalian said the BSP’s declared dividends should be removed as a source of funds for the capitalization of both the MIF and the Maharlika Investment Corporation, an independent body envisioned to govern and manage the state fund.

PHL ‘22 debt payments reach P1.293T—report

The country’s debt service payments last year amounted to P1.293 trillion, the highest in 36 years, based on data from the Bureau of the Treasury (BTr). The BTr data indicated the country’s debt service payments in 2022 were 7.4 percent higher than the P1.2 trillion posted in 2021. Prior to 2022, the largest debt payment was recorded in 2021 while the lowest was posted in 1986, when it reached P34.813 billion, based on existing government data.

Govt overshoots tariff collection goals–BOC

The national government exceeded its tariff collection targets for the first quarter of 2023, according to the Bureau of Customs (BOC). The BOC reported over the weekend that tariffs collected by the government exceeded the target by P13.951 billion during the January 1 to March 13 period. Total collection reached P166.973 billion. The government’s goal was to collect P153 billion.“Of (this amount), P68.6 billion was garnered in the first month of Commissioner (Bienvenido) Rubio’s term,” the BOC said. Finance Secretary Benjamin Diokno earlier expressed his support for the BOC but he also challenged the agency to set “loftier targets.”

CCC: 1.2M farmers in PHL to benefit from APA project

The Climate Change Commission (CCC) said in a statement that the bulk or $26.3 million of the fund for the “Adapting Philippine Agriculture to Climate Change (APA)” will come from the Green Climate Fund (GCF). The remaining $12.98 million of the initiative will come from domestic resources. “We welcome the decision of the GCF Board to approve the APA Project, which will be instrumental in building the capacity of our farming communities, as well as of the government and private sector, to understand and manage climate risks and adopt climate resilient agriculture practices,” Climate Change Commission Vice Chair and Executive Director Robert E.A. Borje said. The project was proposed by the Food and Agriculture Organization of the United Nations and the Department of Agriculture. It will be implemented by the the Department of Science and Technology (DOST) and the Philippine Atmospheric, Geophysical, and Astronomical Service Administration (Pagasa) starting this year until 2030.

TILL 2028: Gov’t to spend 5% of GDP/yr on infra

The Marcos  administration eyes to keep spending 5 percent of Philippine output for infrastructure every year until 2028, according to Finance Secretary Benjamin Diokno. At the country’s gross domestic product of P22.02 trillion as of end-December, this translates to an estimated P1.1 trillion every year. “Central to the Marcos Jr. administration’s growth strategy is infrastructure development. From this year until 2028, we aim to keep infrastructure spending above 5 percent of [gross domestic product] annually,” said Diokno, speaking before members of the American Chamber of Commerce of the Philippines late last week.

NEDA okays new rules on foreign ownership

The National Economic and Development Authority (NEDA) has released the implementing rules and regulations (IRR) of the amended Public Service Act (PSA) that allows full foreign ownership of some Philippine businesses.Upon its effectivity, the amendments to the PSA shall enable the liberalization of key public services by allowing full foreign ownership of businesses in select industries such as airports, railways, expressways, and Telecommunications. Prior to the approval of the amendments, foreign ownership in the aforementioned industries was limited to 40 percent.

Mining groups seek update of mining law

As the Department of Environment and Natural Resources (DENR) reviews the decades old Philippine mining law, both pro and anti-mining groups are in agreement that the measure must be updated amid new trends and the impact of climate change. The divergence between the two sides lie in what should “responsible mining” means for the country, which is part of the review of the mining law. In a recent luncheon of the Philippine Mining Club, DENR Secretary Ma. Antonia Yulo-Loyzaga said the review of mining laws aims to address the gaps in the procedures, in the people aspect of mining and in the economic and financial impact delivered to our country.

DTI taps private sector to intensify consumer rights info drive

The Department of Trade and Industry (DTI) has partnered with the private sector to step up its consumer rights education drive, expanding the reach of its campaign as part of its efforts to promote consumer welfare in the country. Trade Undersecretary Ruth Castelo, who heads the DTI’s consumer protection group, said they have partnered with the Out of Home Advertising Association of the Philippines (OHAAP) to help them spread awareness about the rights of consumers today.

DTI highlights efforts to support women entrepreneurs

The Department of Trade and Industry (DTI) highlighted the agency’s initiatives that support women entrepreneurs, as Trade Secretary Alfredo Pascual acknowledged the important contributions of women in nation-building and economic growth. “We at the Department of Trade and Industry consider it a priority to empower and support businesses, including micro, small, and medium enterprises, that serve as the backbone of our economy. For women leaders of MSMEs (micro, small and medium enterprises), as well as larger businesses, we have designed initiatives that will enable them to overcome and thrive amid barriers in their access to money, mentorship, and the market,” Pascual said at the Go Negosyo Women Entrepreneurship Summit over the weekend.

Green energy auction set in June

The Department of Energy (DOE) said the second Green Energy Auction (GEA) program will be conducted by June  to attract as much as 11,610 megawatts (MW) of additional capacity from renewable energy (RE) sources. Interested RE producers will compete for incentivized fixed power rates by offering their lowest price for a certain capacity. The first iteration of GEA was done in June 2022 which opened as much as 2,000 MW of capacity. DOE Undersecretary Rowena Guevara said at the Philippine Electric Power Industry Forum in Manila yesterday the 11,610 MW will be distributed for projects that should be completed by 2024 to 2026.

Prices cap changes in WESM decided by Q3

The Energy Regulatory Commission (ERC) is set to decide by the third quarter on the proposed changes in the implementation of secondary price caps (SPC) in the wholesale electricity spot market (WESM). SPC serves as a consumer protection from unwarranted increase in electricity prices due to the inherent volatile market price movements in the WESM by lowering the clearing price of electricity to P6.245 per kilowatt hour (kWh) when average prices breach the threshold of P9 per kWh over a 72-hour period. Monalisa Dimalanta, ERC chairperson, said at the sidelines of the Philippine Electric Power Industry Forum in Manila yesterday one of the changes being considered is to change the threshold.

BSP may hike rates by 25bps or leave them unchanged

Monetary and fiscal officials expect the Bangko Sentral ng Pilipinas (BSP) to either raise the overnight lending rate by 25 basis points (bps) or keep the status quo when it meets this March, amid the continuing rise in rates globally to fight inflation. Finance Secretary Benjamin Diokno said Monday the BSP could decide to either hike the key interest rate by 25 bps or keep policy settings unchanged at its next meeting on Thursday amid uncertainties. Diokno, who sits in the central bank’s policy-making monetary board, expressed optimism inflation will ease to around 4 percent towards the end of the third quarter.

NO MATERIAL EXPOSURE TO FAILED BANKS – Medalla: PH banking system is strong

The Philippine banking system is strong and prepared to withstand possible shocks posed by the collapse of some banks in the US, the Bangko Sentral ng Pilipinas (BSP) said yesterday. Felipe Medalla, BSP Governor, said Philippine banks “have an asset base that significantly differs from that of US banks.” “The BSP has long implemented structural reforms to ensure the safety and soundness of banks. These include adoption of sound governance and risk management standards which enable banks to assume risks commensurate with their risk-bearing capacity; prudential limits and requirements, including the Basel III reforms on capital and liquidity standards which enable banks to maintain adequate capital and liquidity; and strengthened surveillance mechanisms and coordination efforts which allow the BSP to closely monitor developments that may pose risks to the financial system and proactively respond as warranted,” Medalla said.

Proper implementation of incentives needed to make EPR law effective — WWF

Government authorities must ensure that tax and other incentives provided under a new law on plastic waste management are properly implemented to encourage companies operating in the Philippines to stand by their obligations in helping address the plastic problem, an official of a non-government organization told a House panel on Thursday. “These incentives would be useful enough [to] entice compliance,” Angela Consuelo “Gia” Ibay, who heads the Climate Change and Energy Programme of the World Wide Fund (WWF) for Nature Philippines, said during the House committee on sustainable development goals. She also suggested an evaluation of “other perverse incentives in other laws that were created that might have an impact in the implementation of the circular economy.”    

National infrastructure master plan must be based on regional priorities, local land use

A proposed law that will serve as a blueprint for national infrastructure development must take into consideration the priorities of each Philippine region and local land use plans, national government officials said on Monday. National Economic and Development Authority Investment Programming Group Assistant Secretary Jonathan L. Uy pointed out that many of the national and regional development plans depend on land use ordinances set by local governments.  

Senate, House to hold closed-door meeting on proposed Constitutional change after May 7

Senators and House representatives will hold a closed-door meeting after May 7 to discuss the proposed amendment of the 1987 Constitution as well as the method to be used, whether through a constitutional convention (con-con) or a constitutional assembly (con-ass). A scheduled public hearing on Monday on the matter was canceled by the Senate panel on constitutional amendments and revision of codes.   

Senate panel elevates Maharlika bill to plenary

A senate committee sponsored a bill seeking to establish the Maharlika Investment Fund (MIF) out for plenary discussion, touting the fund’s potential for returning the Philippines to a track of long-term high growth. “I would like to emphasize that the Maharlika Investment Fund has the potential to bring back the Philippines to its high growth trajectory through investments in the country’s developmental projects,” Senator Mark A. Villar, who chairs the Senate Banks, Financial Institutions and Currencies Committee, said during his sponsorship speech.

Economy likely expanded by 7.1% in first quarter

THE ECONOMY likely expanded by 7.1% in the first quarter, as consumption may have gotten a boost from higher remittances and personal income tax cuts, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said. “We expect a solid 7.1% GDP (gross domestic product) growth in the first quarter, buoyed further by personal income tax cuts and robust overseas Filipino workers (OFW) remittances…this should prove sufficient to boost business and consumer confidence moving forward,” FMIC and UA&P said in its Market Call on Monday.

More warnings issued against wage hike bills

INCREASED unemployment and higher inflation could result if Congress resorts to legislated wage hikes, economists said. “Raising minimum wages at this time is irresponsible,” Ateneo de Manila Economics Professor Leonardo A. Lanzona told BusinessWorld in an e-mail. “While workers working permanently and regularly in corporations may benefit, the number of unemployed will increase.”“Corporations will be forced to lay off workers and not hire additional workers,” he added.

Rice, vegetables, meat are most wasted food in Filipino households: DOST

Rice, vegetables, and meat are the most wasted food in Filipino households, the Department of Science and Technology said in a recent study. Based on the two-stage cluster survey to assess the household plate waste in the country by the agency's Food and Nutrition Research Institute, some of the factors to wastage to the following food are: larger household meal portion size, greater number of household members and higher wealth status.