ECCP at Work

Philippines considers allowing beverage makers to import half of sugar requirements

The Department of Agriculture is considering a proposal to grant beverage makers that utilize high-grade sugar the ability to import 50% of their required supply. During the general membership meeting of the European Chamber of Commerce of the Philippines, Agriculture Undersecretary Mercedita Sombilla acknowledged that the scarcity and high cost of sugar remain the primary drivers of food inflation. The Sugar Regulatory Administration (SRA) warned of a 50,000-ton sugar shortage by August. While the SRA board has approved a sugar order allowing the importation of 150,000 tons, including buffer stock, the official issuance of the sugar order is still pending.

Improved agriculture crucial for post-pandemic recovery – Marcos

The Philippines cannot recover from the impact of the COVID pandemic if its farming sector does not improve, President Marcos said on June 20. He said that in the first quarter of the year, the sector grew by 2.2 percent while contributing 9.1 percent to the country’s total gross domestic product. Further, he mentioned that DA would continue to devise interventions to advance agri-fishery practices, improve the competitiveness of agri-fishery products and boost the income of our farmers and fisherfolk. He urged the DA to continue the dialogues with experts, researchers and rural workers in order to solve the roots of lingering problems and adopt climate resilient and cutting-edge agricultural technologies.

DOE issues implementing guidelines for offshore wind projects

The Department of Energy (DOE) released the policy and administrative framework for offshore wind energy projects to accelerate the development of this sector. Signed by DOE Secretary Raphael Lotilla on June 16, Department Circular No. 2023-06-0200 --pursuant to the Executive Order No. 21 issued by President Ferdinand R. Marcos Jr. last April 19-- sets the rules and procedures for permitting agencies related to the issuance of permits and licenses for offshore wind (OSW) projects. The DC requires the permitting agencies to streamline permits, processes, requirements, and fees to expedite the procedures for the development of offshore wind projects.

Trade dep’t considering development of ‘green’ aviation fuel from biomass

The Department of Trade and Industry (DTI) said the Philippines could develop a sustainable aviation fuel (SAF) industry by tapping its biomass resources. Trade Secretary Alfredo E. Pascual said he discussed the country’s SAF potential in talks with aerospace companies at the Paris Air Show on June 19. The International Air Transport Association (IATA) defines SAF as liquid fuel that reduces carbon emissions by up to 80%. The Paris Air Show was conducted for the first time after four years. The DTI did not reveal which companies Mr. Pascual met with, saying only that discussions with them are ongoing.

Marcos will sign MIF bill ‘as soon as I get it’

President Ferdinand Marcos, Jr. wants the Maharlika Investment Fund (MIF) to be managed by financial professionals, who are free from “political decisions,” to ensure its sustainability. Marcos made the statement in an interview with the media during the 85th Anniversary of the Securities and Exchange Commission (SEC), when asked about his reaction to the current version of the MIF bill. He also said he will “sign it as soon as I get it,” prompting Congress leaders to predict that he will announce its enactment when he delivers his State of the Nation Address (Sona) on July 24. “The only way to make sure that we do not get into trouble, the fund does not get into trouble, is that it’s well and professionally managed,” Marcos said at the SEC event.

Early signing of 2024 national budget eyed — DBM

The Department of Budget and Management (DBM) expects the early approval and signing of the 2024 National Expenditure Program (NEP), its top official said. The proposed 2024 national budget is set at P5.768 trillion, up by 9.5% from this year’s P5.268-trillion budget. Next year’s budget will continue to prioritize education, infrastructure, health, and agriculture, among others. “The President gave instructions to also provide for livelihood programs. While we will still not decrease or limit the cash transfer program, because we know sectors still need that, as we exit from the pandemic, it would be good to utilize livelihood programs so they can work and become more productive,” Ms. Pangandaman added. The 2024 budget will also prioritize “implementation-ready” projects.

Marcos pushes for ease of doing business in PH

President Bongbong Marcos on Thursday urged the Securities and Exchange Commission (SEC) to continue promoting ease of doing business and to continue strengthening its services for the Filipino people for the full transformation of the Philippine economy. “I call on the good people that make up the SEC: Let us use all the successes to further promote ease of doing business and to actively contribute to our overall goal of bringing a comfortable life to our people,” the President said in his speech during the 85th anniversary of the SEC in Makati City.

Select tax rate cuts under CREATE to conclude in July 

The Bureau of Internal Revenue (BIR) prompted taxpayers about reverted rates for percentage tax, minimum corporate income tax and regular corporate income tax for select institutions under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law. The agency on Tuesday released Revenue Memorandum Circular No. 69-2023, which announced the reversion of the tax rates effective July 1. The government temporarily reduced corporate income tax rates through the CREATE law to support businesses recovering from a coronavirus pandemic. Under the law, the percentage tax rate was lowered to 1% from 3% from July 1, 2020 to June 30, 2023. 

IMF to assist Philippines explore carbon tax 

The International Monetary Fund (IMF) is prepared to assist the Philippines in pursuing the imposition of a carbon tax in a bid to generate additional revenues and address environmental concerns. During the recent International Tax Conference, IMF resident representative to the Philippines Ragnar Gudmundsson said carbon taxation and carbon pricing is an area the government should consider to earn extra revenues. Currently, the Department of Finance is undertaking a study on carbon tax in order to assess the current situation in the Philippines, as well as the structure of the economy. Further, in a report at the start of 2023, the IMF said the Philippines can initially impose a carbon tax of $20 per ton and eventually add $4 in the succeeding years. Global efforts to slap taxes on carbon remain small. Many countries, including the Philippines, have yet to ride on the carbon tax.

Balance of payments deficit narrowed in May to $439M

The inflow of remittances, investments as well as borrowings significantly narrowed the country’s balance of payments (BOP) deficit to $439 million in May, from $1.6 billion in the same month last year, according to the Bangko Sentral ng Pilipinas (BSP). However, last May’s BOP—which measures the country’s transactions with the rest of the world—was thrice as wide as the $148-million deficit incurred in April, mainly due to national government spending, including payment of foreign obligations. In particular, the Philippines’ deficit in the trade of goods is expected to be narrower this year as both exports and imports decline amid decreasing commodity prices. Also, the growth in remittances from overseas-based Filipinos is expected to be supported by steady demand for Filipino workers amid a labor shortage in destination countries.

PBBM eyes to hike CDA budget to help consolidate farmlands

The Cooperative Development Authority (CDA) is set to get a bigger budget allocation as the government is eyeing to tap it to help consolidate farmlands. President Ferdinand R. Marcos, Jr. made the announcement during the 125th Founding Anniversary of the Department of Agriculture (DA) last Tuesday, when asked about the role of cooperatives in the development of the agriculture sector.  “We will rely on the Cooperative Development Authority so they can form cooperatives, which still needs to be strengthened,” Marcos told reporters in an interview. The President said they will be using the Rice Competitiveness Enhancement Fund  (RCEF) to provide the needed new equipment to cooperatives to help them boost their production. 

PBBM: DA to increase agricultural productivity, lower food prices

President Ferdinand R. Marcos, Jr. said boosting farm and fishery production will be the top agenda of the Department of Agriculture (DA) next year. The president and DA secretary said he wants most of their programs next year to help boost the country’s agricultural productivity to ensure food security and lower food prices, which in turn will lead to economic growth. Among the said initiatives, he said, is DA’s Soil Health Program, Aquaculture Development Program, and Biotech Research for Fisheries. He cited the decreasing productivity among the major threats to the agriculture sector together with climate change, diminishing natural resources, and a changing market. The President said they will try to improve agricultural productivity technologies and practices and private sector partnerships. “Through these, we can motivate more people—especially younger Filipinos—to toil, to nourish our land and our seas, propelling the Philippines towards greater heights of security, prosperity, progress, and sustainability,” the chief executive said.  A robust agriculture sector, he said, will translate to higher economic growth for the country.

NAIA consortium pushes bid for 25-year concession

The Manila International Airport Consortium (MIAC) is pushing for a 25-year concession period for the rehabilitation of the Ninoy Aquino International Airport, saying this is the optimal period to unlock the NAIA’s full potential while keeping passenger charges low. In a press conference yesterday, the MIAC emphasized that 25 years would be the optimal period for the rehabilitation of the country’s main international gateway. The Department of Transportation (DOTr) has a proposal for a solicited bidding to upgrade NAIA under a shorter concession period of 15 years. “So we believe quite strongly that to unlock the full potential of NAIA and to invest the amount of money we are talking about and keep charges low, 25 years is the optimal solution,” he said further.

Business chamber says sustained recovery to depend on extent of public-private collaboration 

The Philippine Chamber of Commerce and Industry (PCCI) said the resiliency of the economy will depend on the degree to which the government allows the private sector to “collaborate” in its recovery agenda. “For the whole country to prosper and achieve sustainability and competitiveness, it has to be a collaborative effort between concerned agencies and the private sector,” PCCI President George T. Barcelon said in a speech at a general membership meeting of the chamber in Makati City on Wednesday. Mr. Barcelon said the National Government, local government units, and private sector need to achieve “full cooperation and proactive thinking” to bring about an economy “that is resilient and sustainable especially in this time that we are slowly but surely getting back on track,” Mr. Barcelon said.

PHL rice imports up 7.69% in 5 months to May 

The Philippines imported 1.62 million metric tons (MT) of rice in the five months to May, up 7.69% from a year earlier, the Bureau of Plant Industry said. During the five months, Vietnam — the Philippines’ leading top rice supplier —delivered 1.5 million MT or 89.63% of the total. In a report, the United States Department of Agriculture (USDA) projected Philippine rice imports at 3.8 million MT this year, upgrading a previous estimate of 3.6 million MT. Overall global rice consumption next year is expected to come in at 523.772 million MT, it said. “Global consumption is up with increases for India and the Philippines. Imports are forecast higher, mainly for Kenya and the Philippines,” the USDA said. The USDA also forecast Philippine consumption at 16.5 million MT for the 2023-2024 period, exceeding the previous forecast of 16.3 million MT.

Government dangles Central Luzon Expressway project to a private sector

The Department of Public Works and Highways (DPWH) and Public-Private Partnership (PPP) Center will gauge private sector interest in the Central Luzon Link Expressway (CLLEX) concession through a market sounding activity next week. In an advisory, the DPWH and PPP Center said they are inviting firms interested in the CLLEX concession to a market sounding event on June 27 at the PPP Center office in Quezon City. The  event aims to gather feedback from relevant stakeholders as the DPWH undertakes the PPP project study for the CLLEX. Through the event, the agencies said “DPWH aims to collect indications of private sector interest in the CLLEX concession from both domestic and international companies.”DPWH Undersecretary Maria Catalina Cabral and PPP Center executive director Cynthia Hernandez will attend the market sounding event.

Poor, middle class to bear brunt of tax on salty food 

The poor and the middle-class segment of the society will likely bear the brunt of the proposed tax on salty and junk food, as well higher levy on sweetened beverages, amid the lack of affordable food options in the market. Economists told The STAR that while the Department of Finance’s latest tax proposal seems to be a good measure, this may unduly burden the country’s low-income majority. Finance Secretary Benjamin Diokno recently announced that the DOF and the Department of Health are pursuing a junk food and sweetened beverage tax in a bid to generate revenues while addressing diseases related to poor diet. Such a tax measure is seen adding some P76 billion to state coffers and reducing consumption of junk food by 21 percent.

Bid invitations issued for PGH cancer center

The Public-Private Partnership (PPP) Center said it has made available to interested parties the bid documents for the Philippine General Hospital (PGH) Cancer Center. “Bidding is open to all interested parties, whether local or foreign, subject to conditions for qualification under the bidding documents, the constitution, and the amended Build-Operate-Transfer law and its amended implementing rules and regulations, and other applicable laws and jurisprudence,” the PPP Center said in a statement. “The private partner will be selected through an open, competitive tender through a single-stage process based on the lowest required annual payment. The bid submission date is indicatively scheduled for the end of this year,” it added. The cancer center is the Marcos administration’s first PPP project. PGH is the medical center run by the University of the Philippines (UP). The center is planned around a 300-bed capacity with an estimated cost of P6.05 billion.

BAP pushes adoption of BVAL rates as Libor use ends 

The Bankers Association of the Philippines (BAP) is pushing for the use of Philippine Bloomberg Valuation (BVAL) benchmarks ahead of the June 30, 2023 phaseout of the London Interbank Offered Rate (Libor) that is used in a host of financial products, including loans and mortgages, even as it expressed support for regulators’ plan to adopt a new reference over the next six months. The use of the Libor, the benchmark rate at which major global banks lend to each other in the international market, expires on June 30. This is partly due to scandals involving alleged yield manipulation by rate-setting banks. As the US dollar Libor ends, the central bank will, in the meantime, use an overnight rate based on the 28-day Bangko Sentral ng Pilipinas (BSP) Bill rate over the next six months. In consultation with industry players, the BSP plans to roll out a new reference by January 2024.

New ride-hailing firm eyes 5 PH cities for initial operation

A new ride-hailing company entering the Philippine market has identified five key cities to launch its services. California-based global mobility and urban services platform inDrive announced Thursday it is looking at Manila, Cebu, Davao, Bacolod, and Baguio as initial locations to establish its presence in the Philippines. In a statement, inDrive founder and chief executive officer Arsen Tomsky said the firm’s plan to enter the Philippine market aims to provide mobility solutions for commuting Filipinos. The company said after establishing its presence in the five cities, it will partner with local companies to offer its other services. Aside from city rides, inDrive mobility also offers city to city as well as courier and freight deliveries. Last week, Tomsky said inDrive applied for a transport network vehicle service license with the Land Transportation Franchising and Regulatory Board in January this year.

Marcos pushes bivalent COVID-19 shots

President Ferdinand Marcos Jr. on Wednesday called on Filipinos to get vaccinated against COVID-19 as their way of protecting the vulnerable sector and their way of honoring individuals who have worked hard so that the world could return to a state of normalcy. Speaking at the Department of Health’s program for the rollout of the bivalent COVID-19 vaccination at the Philippine Heart Center in Quezon City, the president thanked the government of Lithuania and the World Health Organization for the 391,860 doses of the Comirnaty Pfizer-BioNtech-adapted bivalent vaccines received on June 3.

Metro retail prices increase at slowest pace in 11 months

Retail prices of goods in Metro Manila experienced the slowest growth in 11 months in May, largely due to slower upticks in food prices, the Philippine Statistics Authority (PSA) said. Data from the Philippine Statistics Authority (PSA) showed the General Retail Price Index (GRPI) growth in Metro Manila decelerated to 4.9 percent in May from 5.4 percent in April. The latest GRPI reading for the National Capital Region (NCR) is the lowest growth since the 4.7 percent increase in June last year.