ECCP at Work

Foreign businesses call for reconsideration of proposed taxes on junk food, sweetened beverages

The Joint Foreign Chambers of the Philippines (JFC) called for the government to reconsider proposals to implement additional taxes, saying that it is not the right time as the middle class is still recovering from the COVID-19 pandemic. The JFC recommended a “careful reassessment” of the proposals to implement new taxes on junk food and hike the existing tariffs on sugar-sweetened beverages. The proposed taxes are expected to generate P76 billion in revenues during the first year and result in a 21% reduction in the consumption of junk food. Revenues will be used to finance socioeconomic programs. The JFC counts as members the American Chamber of Commerce of the Philippines, the Australia-New Zealand Chamber of Commerce of the Philippines, the European Chamber of Commerce of the Philippines, the Japanese Chamber of Commerce and Industry of the Philippines, the Korean Chamber of Commerce Philippines, and the Philippine Association of Multinational Companies Regional Headquarters.

House eyes tax hike on vehicle owners

The House of Representatives’ tax panel will consider proposed increases in the motor vehicle user’s charge (MVUC) before moving forward and increasing excise taxes on junk food and sweetened drinks. “We will discuss taxes that hit the rich first. That’s our constitutional duty,” said Albay Rep. Jose Ma. Salceda, chair of the House committee on ways and means. The lawmaker said he still has questions on the proposed taxes on food being pushed by the Department of Finance (DOF) and Department of Health, and he wants to consider other options. “The proposal to allow industrial users to directly import sugar in exchange for higher sugary drink taxes makes some sense from a gross value-added perspective,” Salceda said. “The DOF and the committee will sit down on the modalities and the balancing act first. There’s a sweet spot here,” he added. Salceda said there were five bills filed to amend Republic Act No. 8794, passed 23 years ago, to impose a motor vehicle user’s charge on owners. Apart from updating the rates in RA 8794, the five measures also push for the exemption of motorcycles, with or without sidecars, from the motor vehicle user’s charge.

PHL requires effort to exit FATF ‘gray list’

The Philippines will require “some effort” to be removed from the Financial Action Task Force’s (FATF) “gray list” by January next year, the central bank governor said. At the same time, the Anti-Money Laundering Council (AMLC) said it is continuously working with other government agencies to address money laundering and terrorism financing concerns raised by the FATF. The Philippines remained under a gray list of countries under increased monitoring for money laundering and terrorism financing risks, despite some progress in implementing measures against such financial crimes, the FATF said over the weekend.  

PH among nations most at risk to El Niño

The Philippines is among Asian countries that are most vulnerable to El Niño in terms of the climate phenomenon’s impact on economic growth which may prompt a monetary policy rate hike, according to Nomura Group. The Japan-based analysis and research firm said this as climate experts announced the onset of El Niño, which brings lower-than-usual rainfall to the Philippines and poses a threat to agricultural production. At the same time, the United Nations’ Food and Agriculture Organization (FAO) noted that international prices of rice have been increasing.

Electronic fund transfers hit all-time high in May 

The value of electronic fund transfers coursed through the PESONet and InstaPay surged by 31.5 percent to hit P4.88 trillion in the first five months  from P3.71 trillion in the same period last year after hitting record high values and volumes in May. Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the combined volume of electronic fund transfers jumped by 32.1 percent to 321.58 million from January to May this year versus last year’s 243.38 million as more Filipinos turn to digital channels for their financial transactions.

‘New taxes inflationary, discriminatory’

The Joint Foreign Chambers (JFC) appealed to government to carefully reassess and reconsider its plan to impose tax on junk food and increase the levy  on sugar sweetens beverages (SSB), saying the move is inflationary and discriminatory. “While we recognize the need for government to boost revenues and support initiatives to improve the health and well-being of Filipinos… we  believe it is not the right time to introduce additional taxes on products primarily consumed by middle and lower middle-class households because the country is still recovering from the pandemic and a prolonged period of high inflation,” the group said in a statement].

Gov’t urged to extend pandemic-era tax cuts by another two years

The Marcos administration is being urged to extend by another two years the pandemic-era tax cuts for businesses, which are set to expire on 30 June. “In view of the fact that we encountered more than two years of COVID-19, they should extend (the tax reductions),” Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon said. “They can extend it for another two years, because we are just getting adjusted.” He said businesses “are not ready” for the reversion to the higher, pre-pandemic tax rates. The government granted tax relief under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) to help businesses cope with the pandemic in 2020. 

IEOMP starts trial operations for power reserve market

The Independent Electricity Market Operator of the Philippines (IEMOP) commenced the trial operations program (TOP) for the country’s much awaited reserve market. The Department of Energy (DOE) said the TOP would be a non-binding exercise for the reserve market participants to test all market systems for registering, scheduling, dispatch and pricing, metering, cost recovery, and settlement. “For clarity, the non-binding exercise shall mean that the results of the TOP shall not be used commercially for scheduling, dispatch, settlement, and cost recovery,” the agency said.

BSP unwinding relief for MSMEs by July 1

BSP will be unwinding the temporary regulatory relief measure allowing banks to utilize peso-denominated loans to micro-, small- and medium- enterprises (MSMEs) and large enterprises (LEs). The measure, which was critical during the Covid-19 pandemic as alternative compliance with the reserve requirements (RR), will no longer be in effect starting 01 July 2023. “The unwinding of the relief measure is set to coincide with the reduction in the reserve requirement ratios by 30 June 2023 to facilitate the transition, supporting the banks’ continued compliance with the RR and managing friction costs related to the policy adjustment,” the BSP said.

DOE to call meeting on awarding BARMM coal, oil contracts

THE Department of Energy (DOE) will convene industry stakeholders to discuss a planned “competitive and transparent process” in awarding petroleum and coal contracts in the Bangsamoro Autonomous Region in Muslim Mindanao. In a memorandum dated June 26, DOE Undersecretary Alessandro Sales said the national government, through the DOE, and the Bangsamoro Government (BG), through the Ministry of Environment, Natural Resources, and Energy (MENRE), are mandated under the Organic Law for the BARMM to jointly exercise the power to grant rights, privileges, an concessions over the exploration, development, and utilization of uranium and fossil fuels such as petroleum, natural gas, and coal in the Bangsamoro Autonomous Region. 

PSA: Farmgate price of palay up 9.1% in April

The average farmgate price of unmilled rice rose by 9.1 percent year-on-year in April, as all regions recorded higher quotations during the period, according to the latest data from the Philippine Statistics Authority (PSA). PSA data showed that the average farmgate price of palay in April reached P18.79 per kilogram, P1.56 higher than the P17.23 per kg recorded a year ago. “At the national level, the average farmgate price of palay went up to P18.79 per kilogram in April 2023, which indicates an annual increase of 9.1 percent from the P17.23 per kilogram in April 2022.

PHL pork imports expected to fall this year as poultry shipments rise

The Philippines is expected to import less pork this year amid a broader global downtrend in trade, according to the UN Food and Agriculture Organization (FAO). In a report, the FAO projected the global trade of pork to dip to 11.4 million metric tons (MT) in 2023 from the 11.5 million MT estimated last year. The FAO said the supply of exportable quantities in producing countries has declined as supply levels rise in East Asia. “The latest forecasts point to reduced pig meat imports by the US, Japan, Mexico, Vietnam and the Philippines, with likely higher imports by the UK, China, Canada, Uruguay and the Republic of Korea,” the FAO said.

USTR hopes to lock down labor, agri, regulatory provisions in July round of IPEF negotiations 

The United States Trade Representative (USTR) said it hopes to lock down provisions of the Indo-Pacific Economic Framework for Prosperity (IPEF) trade deal dealing with labor, agriculture, and regulatory best practices. Deputy USTR Sarah Bianchi said that the Philippines is especially engaged in the labor provisions of the IPEF. According to Ms. Bianchi, the labor side of the talks include “some really ambitious and exciting texts for workers. We have found the Philippines to be really engaged on that text and supportive. We look forward to spending the next few rounds really working with Philippines and others to hopefully make some real progress in that space.” Ms. Bianchi said the IPEF could benefit the Philippines in terms of sustainable agriculture, environment, and climate initiatives.  

BoC, SKorea aid agency in Customs laboratory partnership

The Bureau of Customs (BoC) and the Korea International Cooperation Agency (KOICA) are working to revive the Philippines Customs Laboratory (PCL). “The re-establishment of the Philippines Customs Laboratory is an opportunity to further enhance border security efforts, increase revenue collection, and foster international cooperation in customs practices,” Commissioner Bienvenido Y. Rubio said in a statement. This partnership with KOICA will contribute significantly to our vision of a modernized and credible Customs administration,” he added. The Customs laboratory will help address cases of technical smuggling. “PCL will serve as an effective deterrent against technical smuggling through the use of scientific and technical expertise, advanced technology, and intelligence-driven strategies,” it said.

P40 minimum wage hike approved in NCR

A  P40 hike in the minimum wage in the National Capital Region has been approved, the Department of Labor and Employment announced on Thursday. The NCR Regional Tripartite Wages and Productivity Board said the wage hike was approved last June 26, DOLE said.  For non-agricultural workers, this means their pay will increase to P610 per day from P570 per day.  Workers in the agriculture sector, and service and retail establishments employing 15 or less workers, and manufacturing establishments regularly employing less than 10 workers meanwhile will see their pay rise to P573 per day from P533.  The new rates translate to a 7 percent increase from the prevailing daily minimum wage rates in the region, and remain above the regional poverty threshold of P452 per day for a family of five, DOLE said.

68 more renewable energy projects eyed in W. Visayas

The Department of Energy (DOE) announced on Wednesday that 68 indicative renewable energy (RE) projects with a potential capacity of 14,245 megawatts are being eyed in Western Visayas, while 29 projects are already operating with an installed capacity of 708 megawatts. Engineer Gaspar Escobar Jr., chief of the Technical Services and Management Division of the Renewable Energy Management Bureau, said that of the 68 projects, 24 are for hydropower, 17 for offshore wind, 14 for solar, 12 for onshore wind, and one for geothermal. Energy Undersecretary Rowena Cristina Guevara said Western Visayas is now 28 percent into transitioning to renewable energy as of 2021. The National Renewable Energy Program (NREP) 2020-2040 sets a target of at least 35 percent RE share in the power generation mix by 2030 and to increase it to 50 percent by 2040.

Mining firm bares expansion plans amid higher nickel demand

Listed Global Ferronickel Holdings, Inc. (FNI) remains bullish about the outlook for the nickel industry as it aims to expand its business to take advantage of the higher demand for nickel.  "Certainly, the outlook for the nickel industry remains compelling. On the demand side, we see tremendous opportunities from many trends that will shape the world," said FNI president Dante Bravo during the company's annual stockholders meeting on Thursday. Bravo said growth of the industry will mostly be driven by the urbanization of mega cities and energy transition. Bravo said the further reopening of China's economy and its infrastructure investment plan will also boost the demand for stainless steel. In terms of energy transition, Bravo said nickel was earlier identified by the World Bank as one of the critical minerals in the clean energy transition.

 National savings up 26% in 2022

 The country's gross national savings went up by 26.6 percent to PHP4.90 trillion last year from PHP4.16 trillion in 2021.In a report on Thursday, the Philippine Statistics Authority (PSA) said non-financial corporations contributed the biggest savings with PHP4.16 trillion, followed by financial corporations with PHP1.54 trillion. "The growth in savings for full year 2022 may have to be attributed and correlated with the further reopening of the economy towards greater normalcy with no more large lockdowns since 2022 and policy priority of no more lockdowns, going forward," Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said. Ricafort said the increased employment, sales, earnings, and other economic activities contributed to higher savings. Government and households, including non-profit institutions serving households, meanwhile, recorded PHP9 billion and PHP790 billion dissolving during the period.

 

Davao City gets $1-billion ADB loan for electric buses 

The Asian Development Bank (ADB) has approved a $1 billion loan to modernize the public transport system in Davao City through the deployment of electric bus fleets. In a statement yesterday, the multilateral lender said the loan is for the Davao Public Transport Modernization project, which will support the country’s efforts to reduce greenhouse gases and promote climate action. The project, which is the ADB’s largest road-based public transport project in the Philippines, is expected to serve as a pilot to modernize the country’s public road transport system.  It will involve the procurement of about 1,100 buses to be managed by the private sector under performance-based contracts. The new fleet is expected to reduce 60 percent of the annual greenhouse gas emissions from Davao City’s public transport.