ECCP at Work

EU business confident of substantial FDI streams to PH

European businessmen believe that the stream of FDI and trade into the Philippines will increase substantially in the coming months and years following increased momentum in interest from EU countries and the brighter prospects for a free trade deal between the two partners. Paulo Duarte, president of the ECCP, said they have reasons to believe that the stream of FDIs will substantially increase in the coming months and years given the “wave of game-changing economic reforms in a number of key investment areas as well as notable improvements in our doing business rankings.” Duarte spoke before the high-level ECCP and MBC event on “A New Era of EU-Philippines Relations: Driven by Stronger Trade and Investment for a Sustainable Future” attended by visiting European Commission President Ursula von der Leyen.

Consumers may pay more for online goods once withholding tax is imposed

Consumers may have to pay more for online goods and services as the government plans to start imposing a creditable withholding tax on partner-merchants of online platforms later this year. The Bureau of Internal Revenue (BIR) said it plans to impose a creditable withholding tax of 1% on one-half of the gross remittances of online platform providers to their partner-sellers or merchants as early as the fourth quarter.

Central bank sees July inflation at 4.1%-4.9% 

Headline inflation likely settled within the 4.1% to 4.9% range in July due to lower electricity rates, rollback in cooking gas prices, and a stronger peso, the Bangko Sentral ng Pilipinas (BSP) said. “Lower electricity rates, declines in the prices of meat, fruits, and fish items, the rollback in LPG prices, and the peso appreciation could contribute to downward price pressures during the month,” the central bank said.

ADB commitments to PH reach $30B 

The Asian Development Bank (ADB) has committed a total of 621 public sector loans, grants and technical assistance to the Philippines to date, with a cumulative amount of $29.9 billion. According to the ADB’s latest fact sheet on the Philippines posted on its website, cumulative loan and grant disbursements to the Philippines amounted to $24.09 billion. These were financed by regular and concessional ordinary capital resources and other special funds.

PEZA to launch digital marketplace for ecozone locators in September 

The Philippine Economic Zone Authority (PEZA) plans to launch a digital marketplace for locators by September. PEZA Director General Tereso O. Panga signed a memorandum of agreement with NetGlobal Solutions, Inc. (NGSI) Chairman and Chief Executive Officer Peter G. Lingatong on July 25 for the development of the PEZA Digital Marketplace, a business-to-business (B2B) e-commerce platform for PEZA locators.

Public-private partnership vital in achieving economic agenda 

DTI Secretary Alfredo Pascual has underscored the critical role of close collaboration between the government and the private sector in achieving the country’s economic agenda. In a statement Saturday, DTI said Pascual highlighted the vital role of public and private partnerships during the opening ceremony of the APEC Business Advisory Council (ABAC) III meeting. The Philippines is hosting the third meeting of the Asia Pacific Economic Cooperation’s (APEC) business advisory group from July 27 to 30, with the theme “Equity, Sustainability, and Opportunity,” aiming to bolster discussions and cooperation between the public and private sectors among the 21 member economies.

Further downtrend in inflation seen

The country’s inflation rate is seen to continue its downward trend in the remaining months of the year, although possible risks remain. The Philippines’ July inflation rate is scheduled to be announced next week, and National Economic and Development Authority Secretary Arsenio Balisacan expects to see further easing in the numbers. The country’s inflation rate slowed down for the fifth consecutive month in June, registering its lowest rate in 13 months. Inflation eased further to 5.4 percent in June 2023 from 6.1 percent in May 2023, marking the lowest rate since June 2022. Balisacan earlier said the figure can decline further to within two to four percent by the end of the year. While the goal is to continue seeing this downtrend, Balisacan acknowledged the possible risks ahead. The government attributes the slowdown in inflation in June to slower food inflation, which declined to 6.7 percent from 7.5 percent in the previous month. Non-food inflation likewise decelerated to 4.1 percent in June from five percent in May 2023.

PH bags $50-M renewables investments from PBBM’s Malaysia trip 

The country bagged USD50-million worth of funding for renewable energy (RE) projects during the state visit of President Ferdinand R. Marcos Jr. to Malaysia this week. In a statement Sunday, Philippine-based private equity investor New Wave Strategic Holdings, Inc. and its partner, Emissary Capital Partners Sdn Bhd, said their investments here could generate additional 1,000 megawatts (MW) of RE capacity for the country. Emissary Capital is a Malaysian investment firm with funds backed by the government. The USD50-million fund aims to finance companies investing in the Philippines in the RE sector, electric vehicle industry, as well as clean energy and smart grid.

Standard Chartered projects 5.3% growth for PH economy 

Standard Chartered on Friday maintained its 5.3 percent economic growth outlook for the Philippines this year. In a virtual briefing, Standard Chartered economist for Asia Jonathan Koh said growth is likely to slow over the next few quarters as the transmission of earlier monetary policy tightening continues. However, Koh said the 5.3 percent projected growth is still "one of the strongest in the region." The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) raised interest rates by a total of 425 basis points since last year to temper the rising inflation. Aside from the monetary policy tightening, Koh said consumption is expected to moderate in the coming months even as it remains a key driver of growth.

 

Power restoration efforts focus on 4 areas in northern Luzon 

The Department of Energy (DOE) is focusing power restoration efforts in four areas in northern Luzon that were battered by Typhoon Egay. In a virtual media briefing Saturday, DOE Undersecretary Felix William Fuentebella said these are the franchise areas of Ilocos Norte Electric Cooperative, Inc., Ilocos Sur Electric Cooperative, Inc., Cagayan II Electric Cooperative, Inc., and Abra Electric Cooperative, Inc. Fuentebella said power restoration in these franchise areas is still below 50 percent. The National Electrification Administration (NEA) reported that 64 percent of nearly 1.6 million consumers in the franchise areas of the affected ECs have been fully energized as of Saturday. About 577,530 consumers are still waiting for electricity to be restored.

ARTA on PPA monitoring system: No sound legal, empirical basis 

The Anti-Red Tape Authority (ARTA) has issued a re-evaluation report on the Philippine Ports Authority (PPA) Administrative Order No. 04-2021, or the Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS), prescribing the policy on registration and monitoring of containers to avoid port congestion. In its letter to PPA general manager Jay Daniel Santiago dated July 25, 2023, ARTA said there is “no sound legal and empirical basis to establish the need for the new regulation and to intervene in instances where evidence identifies an issue or a need for intervention following the Principle 2 of the Philippine Good Regulatory Principle.” ARTA added that the PPA has admitted that there is no congestion inside its regulated ports.

Diokno sees no need to match US rate hike

The development of the country’s renewable energy market is set to get a further boost with a proposed $50-million investment from a Philippine-based private equity investor and a Malaysian government-backed fund. New Wave Strategic Holdings Inc., a subsidiary of investment holding firm IP E-Game Ventures Inc. and Emissary Capital Partners Sdn Bhd, which is backed by the Malaysian governments’ Penjana Kapital, have proposed to fund companies in the renewable energy sector, electric vehicle industry, and clean energy and smart grid enablers. The proposed investment of $50 million into the country’s renewable energy market is expected to help generate as much as 1,000 megawatts (MW) of bankable capacity.

NEDA may apply rice tariff model to other farm commodity imports 

The Rice Tariffication Law can serve as a model for imports of other farm commodities, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said. “We must learn from the lessons from the implementation (of the Rice Tariffication Law) and see how we can expand that to other commodities. We need to make our trade policy more transparent and supportive of our economic agenda,” Mr. Balisacan told reporters on Friday. Signed in 2019, the Rice Tariffication Law liberalized rice imports by allowing private parties to import rice, formerly a monopoly of the National Food Authority (NFA). Importers must pay tariffs on Southeast Asian grain of 35%, earning revenue for the government in the process.