ECCP at Work

DA, EU explore agriculture dev’t, investment opportunities

Officials of the Philippine Department of Agriculture (DA) led by Senior Undersecretary Domingo F. Panganiban met with delegates of the European Union-ASEAN Business Council (EU-ABC) and the European Chamber of Commerce of the Philippines (ECCP) on May 24 to discuss mutual interests in agricultural development, foreign trades and investments, economic growth, and other potential areas of cooperation. Among those discussed were the need to address the high prices of sugar in the local market.

Inflation eases for 4th straight month to 6.1 percent in May

Inflation in May slowed for the fourth straight month as fuel prices, transport costs and prices of select food products decreased, the state statistics bureau said. The consumer price index rose 6.1 percent, slower than the 6.6 percent in April, the Philippine Statistics Authority said. May's inflation is within the 5.8 to 6.6 percent estimate of the Bangko Sentral ng Pilipinas.  However, May's inflation rate remains above the government target of 2 to 4 percent.

Growth on track to hit 6-7% — BSP

The Philippines is on track to grow by as much as 7% this year, but a global economic slowdown amid tighter monetary conditions and elevated inflation is a key risk, according to the central bank. “The expected growth over the near term is supported by the expansion in the industry sector as manufacturers signaled greater local demand, as well as the release of pent-up demand from China’s reopening,” BSP said.

RCEP enters into force in PH

The Regional Comprehensive Economic Partnership (RCEP) has finally entered into force in the Philippines on Friday, over two years since participating countries concluded the free trade deal in November 2020. The Department of Trade and Industry (DTI), the country’s lead agency during the RCEP negotiations, urged Philippine enterprises to make the most of the new free trade agreement (FTA) of the country. “RCEP has a big promise to the country in terms of being able to expand our trade with our partners in RCEP,” Trade Secretary Alfredo Pascual said.

PEZA-approved outlays hit P14.9 billion in May, poised for 10% growth

PEZA said it is on track to hit its 10% growth target for approved investments this year, after greenlighting P14.93 billion worth of 20 new and expansion projects in May. This brought PEZA’s approved investments for January to May to P48.03 billion, which is 2.5 times higher than a year earlier, PEZA Director-General Tereso O. Panga said. Among the 20 projects approved by the PEZA board on May 26, 11 are into export manufacturing, seven are in the information technology sector, and one each in facility and economic zone development.

Low registration rates reported for EPR law

Only 15% or about 600 out of 4,000 obliged companies have registered in compliance with a law holding companies responsible for the proper disposal of their products’ plastic packaging, according to the Department of Environment and Natural Resources. Registration is required under Republic Act (RA) No. 11898 or the Extended Producer Responsibility (EPR) Act of 2022, which lapsed into law on July 23, 2022. It amends RA 9003 or the Ecological Solid Waste Management Act of 2000.

New DND, DOH chiefs named

President Marcos has appointed Gilbert Teodoro Jr. and Teodoro Herbosa as secretaries of the Department of National Defense (DND) and Department of Health (DOH), two Cabinet positions long held by officers-in-charge. With Marcos’ appointment yesterday of Teodoro and Herbosa, only the Department of Agriculture remains without a permanent chief. The President concurrently heads the DA. The two new officials are no newcomers in government.

Maharlika fund expected to start operations by year’s end 

The MaharlikaInvestment Fund (MIF) is expected to be fully operational before the end of the year, DoF Secretary Benjamin E. Diokno said. “We’re expected to prepare the implementing rules and regulations (for the Maharlika fund law); we’re expected to look for people to man the Maharlika Investment Corp. I expect (the fund) to be fully operational before the end of the year,” Mr. Diokno said. Last week, Congress approved the bill creating the fund. It is due to be transmitted to Malacañang for President Ferdinand R. Marcos, Jr.’s signature.

BOC issues RCEP import, export guidelines

The BOC recently issued a set of guidelines outlining the conditions for obtaining preferential tariff treatment under the newly-implemented RCEP agreement. Under Customs Memorandum Order (CMO) No. 12-2023 dated May 26, 2023, effective June 2, 2023, imported goods that originate from any of the 15 member countries are eligible to claim the preferential tariff rates provided by the RCEP. The CMO likewise provided specific procedures for the issuance and acceptance of “Certificate of Origin”.

BOC Exceeds May 2023 Revenue Collection Target, Sustains Growth

The BOC has achieved another significant milestone by surpassing its revenue collection target for May 2023. The BOC collected a total of P77.793 billion in May 2023, surpassing its target collection of P72.350 billion by P5.443 billion or 7.52%. This represents a remarkable growth of P11.505 billion or 17.36% compared to the previous year’s collection. Based on a preliminary report, the BOC’s total revenue collection from January 1 to May 31, 2023, reached P359.175 billion, exceeding the target of P345.943 billion by P13.232 billion or 3.82%. This reflects a significant growth of P38.661 billion or 12.06% compared to the previous year.

Manufacturing activity expands in May 

Manufacturing activity in the Philippines further expanded in May as new orders and production grew at a faster clip, S&P Global said. The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 52.2 in May from an eight-month low of 51.4 in April, signaling “further improvement in operating conditions.” May marked the 16th straight month that the PMI reading stood above the 50 mark which denotes improvement in operating conditions. A reading below 50 signals deterioration.The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%), and stocks of purchases (10%).

PHL hopes to attract more offshore wind power investments 

The government is hoping to attract more offshore wind power projects, after the Board of Investments (BoI) approved three offshore wind projects worth a total of P390 billion in the first quarter. Trade Secretary Alfredo Pascual said the Philippines is a suitable place for offshore wind investments due to its geographical position.  “Renewable energy isn’t merely an option for us but a necessity. Thus, our government is ardently promoting using and developing renewable energy sources,” he said. Mr. Pascual said the country needs 52,800 MW of renewable energy capacity to achieve its target of having 50% share of renewable energy in the country’s power generation mix by 2040.   

BoI approves P532B worth of investment pledges 

Investment approvals by the Board of Investments (BoI) more than doubled as of mid-May, led by renewable energy projects.The Board of Investments (BoI) said it approved investment pledges worth P532.27 billion from 106 projects as of May 18, 158.72% higher than the pledges worth P205.73 billion from 86 projects a year ago. This puts the BoI on track to hit its target of P1.5 trillion worth of investment approvals for this year. DTI Usec. and BoI managing head Ceferino Rodolfo said the new investment pledges were mostly in renewable energy projects as the government allowed 100% foreign ownership in the sector. “Most of the projects registering with us are renewable energy projects. The Department of Energy (DoE) is no longer endorsing coal projects,” Mr. Rodolfo added.

Inflation further cooled in May 

Economists believe inflation further cooled for the fourth straight month in May from an eight-month low of 6.6 percent in April, giving monetary authorities more space to keep interest rates steady. ING Bank senior economist Nicholas Mapa said that inflation would continue to cool on a year-on-year basis to six percent in May as favorable base effects push the headline number back toward the two to four percent target of the Bangko Sentral ng Pilipinas (BSP). Mapa said core inflation likely eased to 7.5 percent in May from 7.9 percent in April. According to Mapa, moderating inflation gives the BSP more space to maintain policy settings, but is unlikely to cut rates given the pressure on the peso.

DOTr wants private firm to take over Naia operations 

The DOTr and the Manila International Airport Authority (MIAA) have proposed that the government take in a private sector partner to maintain and operate Ninoy Aquino International Airport (Naia), the country’s busiest and the main gateway to the rest of the world. This is according to the recently completed feasibility study for the Naia rehabilitation program that had been submitted for approval to the National Economic and Development Authority. In the proposal, the private partner will maintain and operate the international gateway for 15 years to recoup investments related to the facility upgrades.

Gov’t targeting to privatize P2.5-B assets this year 

The Department of Finance’s (DoF) Privatization and Management Office (PMO) is targeting to dispose of at least 143 properties worth P2.5 billion for the rest of the year. Mr. Diokno said that the government last week approved the sale of six properties worth P152.8 million, which will be bid out by the PMO. These include a P25 million worth property owned by the Al-Amanah Islamic Investment Bank of the Philippines in Davao City and two lots worth P25.34 billion in Davao City also owned by the bank. Also included is a P1.92-million property owned by the Central Bank Board of Liquidators in Pasay City; and two lots in Visayas owned by the Technology Resource Center worth P50.4 million and P50.2 million. In the first quarter, the PMO approved the disposition of 31 properties worth P912.17 million via public auction. It plans to sell 19 properties worth P799.05 million in the second quarter.

Finally, DTI to launch export devt plan for PHL mid-June 

The DTI said it is set to launch the Philippine Exports Development Plan (PEDP) 2023-2028 on June 15,2023. Trade Secretary Alfredo E. Pascual said the PEDP will be formally launched on June 15 but “I hope we discuss it with the President earlier.” The Trade chief unveiled some of the features of the Plan, saying “it will identify gaps both on the demand side and supply side and [the] solutions.” “Essentially, what the Export Development Plan has done is to identify the promising sectors or industry clusters that can generate significant increases in exports to the Philippines,” Pascual said. Pascual cited the industry clusters which he said are “export-oriented”: the Industrial, Manufacturing, Transport (IMT) cluster; Technology, Media, and Telecommunication (TMT) cluster; and the Health and Life Science (HLS) cluster.

Oil firms to roll back fuel prices on June 6

Motorists will finally get a reprieve from the recent price increases in petroleum products, after local oil firms announced rollbacks by as much as 60 centavos per liter, effective Tuesday, June 6. In separate advisories, oil companies said they would slash the prices of gasoline by 60 centavos per liter and diesel by 30 centavos per liter. Kerosene will also see a decline of 60 centavos per liter. CleanFuel will implement the price adjustments by 12:01 a.m., followed by Shell Pilipinas and Seaoil at 6 a.m. This ends a three-week streak of price hikes for gasoline and continues the series of rollbacks for kerosene for a third week. On May 30, oil firms increased the pump price of gasoline by P1.10 per liter, while the price of kerosene decreased by 35 centavos per liter. Diesel had no movement last week.

DOE calls for faster electric vehicle rollout in PH

The DOE is pushing for a faster deployment of electric vehicles (EVs) in the Philippines as part of efforts to reduce the nation’s reliance on fossil fuels. The DOE emphasized that the transition to EVs is expected to lessen the country’s dependence on imported fuel and promote cleaner and more energy-efficient transportation technologies. By 2028, the DOE aims to introduce approximately 2,454,200 EVs, including cars, tricycles, and motorcycles, to contribute to environmental preservation and stimulate investments in a new industry. This initiative aligns with the objectives of the Electric Vehicle Industry Development Act (EVIDA), which seeks to create a conducive environment for the EV industry’s growth within the country, according to the department.

PNR to deploy buses during duration of train ops suspension

The Department of Transportation (DOTr) has directed the Philippine National Railways (PNR) to provide alternative transportation options for the thousands of commuters expected to be affected by the temporary suspension of train operations starting July 2. The move is to accommodate the construction of the P873.62 billion North-South Commuter Railway (NSCR).

2024 budget to focus on infra, agri, health, education

The proposed 2024 national budget will continue to focus on priority sectors such as infrastructure, agriculture, health and education, Department of Budget and Management (DBM) Secretary Amenah Pangandaman said. Pangandaman said these priority sectors are included in the administration's Medium-Term Fiscal Framework (MTFF) which was adopted by Congress. "MTFF, it’s a fiscal consolidation program [that contains] the priority programs and areas which we should support," she said. “We will continue the infrastructure program of the national government, from Build, Build, Build to Build, Better, More, from 5-6 percent of GDP (gross domestic product), now this year, it's 5.8 percent. So, we’re still working on the 2024 budget, so we need to adhere with that.”

Ayala-led bank on track to meet sustainability financing goals

The Ayala-led Bank of the Philippine Islands (BPI) is on track to retire coal financing in support of the country’s sustainability efforts. Chief finance officer and chief sustainability officer Eric Luchangco said BPI has not financed energy projects that utilize coal since 2018 or when the bank formalized its Sustainable Energy Finance (SEF). He clarified that “the pace that we have is highly dependent on what the clients want to do” but stressed that they expect to be a leader in the market. Among the energy projects the BPI is currently financing is for AC Energy (ACEN), another Ayala Group firm that is listed in the local bourse. The green financing program expanded in 2019 to include sustainable agriculture alongside renewable energy, energy efficiency, and climate resilience under the rebranded Sustainable Development Finance program, which is also aimed at sustaining BPI’s commitment to the United Nations Sustainable Development Goals. 

Air travel to soar near record in 2023: industry group

Airlines will fly 4.35 billion passengers this year, close to the 2019 record as the industry bounces back from the COVID-19 pandemic, an industry group said. The sector will also be back in the green, with net profits forecast to reach $9.8 billion in 2023, or double previous estimates, boosted by the end of China's Covid restrictions, according to the International Air Transport Association (IATA). The association added that its 2022 losses were half as bad as previously estimated at $3.6 billion. "Airline financial performance in 2023 is beating expectations," IATA director general Willie Walsh said in a statement during the association's annual general meeting in Istanbul. "Stronger profitability is supported by several positive developments. China lifted Covid-19 restrictions earlier in the year than anticipated," Walsh said.

Tax system being outmaneuvered by digital companies

Tax administrators need to adapt to digital platform use by their taxpayers to enhance their ability to capture revenue, the Philippine Institute for Development Studies (PIDS) said. “In a virtual cross-border world, the effectiveness of existing tax measures is limited. The ease through which online accounts can be set up and deployed as digital storefronts, often anonymously by users operating from homes, which are not tax-mapped, and through platforms that operate abroad, limits the Bureau of Internal Revenue’s (BIR) enforcement powers,” PIDS consultant and assistant professor at the University of the Philippines College of Law Emerson S. Bañez said. TMAP President Suzette A. Celicious-Sy noted that no laws currently govern foreign businesses that provide digital goods and services in the Philippines. A bill that seeks to impose a value-added tax on digital service providers is currently pending in the Senate at committee level. If signed into law, it is expected to generate up to P18.2 billion in revenue by 2028.