ECCP at Work

Philippines ripe for open finance

Key figures in the domestic financial landscape have banded together to leverage open finance in driving financial inclusion across the country. Leading the partnership are UBX, the BSP and members of the ECCP Special Committee on Open Finance and Financial Inclusion (SCOFFI). In a Kapihan Session organized by the ECCP-SCOFFI, UBX managing director for Open Finance Jamie Garchitorena, and BSP Deputy Governor Chuchi Fonacier, highlighted the readiness of the Philippines to embrace open finance. According to Fonacier, the country already has the necessary tools to adapt to the Open Finance Framework.

Trailblazing a path towards a cleaner energy grid

Momentum for the clean energy transition is bigger than it ever has been before, driven by the rapid advancement of key technologies that aim to revolutionize the world’s energy systems. In fact, the International Energy Agency (IEA), in their latest “Tracking Clean Energy Progress” report released last July, pointed out that clean energy technologies like solar PV and electric vehicles are proving to the world at large what can be achieved with sufficient ambition and policy action. According to IEA data, sales of electric vehicles surpassed 10 million for the first time in 2022, an almost tenfold rise in just five years.

PEZA-approved investments may hit P300 billion this year 

The Philippine Economic Zone Authority (PEZA) is confident of exceeding its investment approvals target for this year, saying that this could reach as high as P300 billion. PEZA director-general Tereso Panga said the agency is on track with hitting its approved investments target of around P160 billion this year. “Right now, the latest investment approvals that we have is about P97 billion already, which is 3.3 times than what we approved last year,” Panga said.

DBM eyes quick release of 2024 budget

The Department of Budget and Management (DBM) targets to issue all special allotment release orders (SAROs) as early as the first quarter of next year to ensure that state agencies expedite their utilization. In a briefing on the 2024 National Expenditure Program yesterday, Budget Secretary Amenah Pangandaman said several agencies suffered from a budget cut for next year following their low utilization rate. As such, the DBM is reviewing the process of budget execution for next year’s record-high P5.768 trillion budget.

Philippines loses apparel exports due to high wages 

A major European apparel brand has pulled out all of its garment orders from the Philippines as it moved to more cost-competitive ASEAN countries, according to the Confederation of Wearable Exporters of the Philippines (CONWEP). CONWEP executive director Maritess Jocson-Agoncillo said the relaunch of the scoping studies for a Philippines-EU FTA is very timely for country’s wearables industry as it just lost orders from a major European brand. She said  the pullout of the European brand is affecting around 4,800 to 6,000 workers in the industry. Jocson-Agoncillo also said the industry’s export value to the European market is currently around $200 million and could grow further amid the FTA negotiations and when the agreement is implemented.

Asean adoption of EV ecosystem backed 

An alliance of electric vehicle associations from member-countries of the Association of Southeast Asian Nations (Asean) has expressed support to the 10-member bloc’s plan to develop the region’s electric vehicle (EV) ecosystem. The Asean Federation of Electric Vehicle Associations (Afeva) announced its full support for the “Declaration on Developing the Regional Electric Vehicle Ecosystem.” The Asean declaration is a policy measure adopted last May that formalized commitment from member countries to develop a regional EV ecosystem. It also encouraged the harmonization of regional standards for the electric vehicle ecosystem, as well as training and certification based on international standards.

3 new ecozones outside NCR added in July 

The Philippine Economic Zone Authority (PEZA) reported Monday that three new economic zones outside Metro Manila were proclaimed by President Ferdinand R. Marcos Jr. in July, which are expected to create more opportunities in the countryside. In a statement, the PEZA said these were declared as additional ecozones last July 25. These new ecozones include Naga City Industrial Park in Carolina, Naga City; Loupe’s Mandalagan IT Center in Mandalagan, Bacolod City; and Marina Town Dumaguete in Piapi, Dumaguete City. “We remain committed in our overarching goal of spurring countryside development through the creation of more ecozones seen to facilitate growth and development of our regions and attract new and strategic investments in the country,” PEZA Director General Tereso Panga said.

Softening inflation safe despite rise in pump prices: oil exec

The recent spike in oil prices is seen as an aberration and is unlikely to reverse softening inflation for the remainder of the year’s third quarter, according to an industry expert. Fernando Martinez, chair of the Independent Philippine Petroleum Companies Association, said the rather substantial oil price hike implemented on Tuesday was the direct result of production cuts jointly announced by Russia and the Organization of Petroleum Exporting Countries.

Philippines may extend executive order validity keeping tariff rates low 

The government  is considering a possible further extension of the validity period of an executive order (EO), which had reduced the Most Favored Nation (MFN) tariff rates on pork, corn, rice and coal, Finance Secretary Benjamin E. Diokno said. In December, President Ferdinand R. Marcos, Jr. signed Executive Order No. 10, which extended the lower tariff rates on key commodities to address rising prices. EO No. 10 kept the reduced tariff rates for imports of swine meat at 15% for shipments within the minimum access volume (MAV) quota and 25% for those exceeding the quota.

S. Korea ready to sign trade deal; PHL working on internal approval 

The Department of Trade and Industry (DTI) said South Korea has declared its readiness to sign a free trade agreement (FTA) with the Philippines, which is still working on domestic approval processes which could take two months. “(The Philippines-South Korea FTA) could be signed within the next two months,” Trade Undersecretary Ceferino S. Rodolfo told reporters on the sidelines of the International Tobacco Agricultural Summit in Taguig City last week.

Farm output may have expanded in 2nd quarter

The Philippines’ overall agricultural output likely saw an improvement in the second quarter due to favorable weather conditions and low base effects. “I would think there was some improvement this year due to better (sunnier) weather in the second quarter,” Raul Q. Montemayor, national manager of Federation of Free Farmers, said. He noted that agricultural output is coming from a “low base” as it shrank by 0.6% in the second quarter of 2022.

Analysts expect robust economic rebound

The Philippine economy will likely recover in the second half of the year, driven by an expected rebound in government spending on infrastructure projects and easing inflation, analysts said. In the July report of The Market Call, economists at First Metro Investment Corp. and the University of Asia and the Pacific expect the Philippine economy to have a “robust rebound” in the second half of the year. The economists projected full-year GDP growth to expand by 6.1 percent, within the revised government target of 6 to 7 percent for 2023.

BEFORE END OF BBM’S TERM: Govt pursues road to ‘A’ credit rating

The government is committed to its goal of getting an “A” credit rating from international rating agencies, even as this objective is “challenging” amid the current global environment. “Our ultimate goal is to get an A rating before the end of the President’s term. We’re fully aware that this is not going to be a walk in the park. But we are committed to work unceasingly to achieve our lofty goal,” Finance Secretary Benjamin Diokno said in a press briefing at the Department of Finance (DOF) office last Friday. Currently, the Philippines has a BBB+ sovereign credit rating from S&P Global. This is one notch below the minimum A rating target of the government.

Foreign equities keen on PH healthcare industry

Corporate finance consulting firm Fortman Cline said foreign funds are keen to invest in the Philippine healthcare industry amid its ongoing consolidation. Francis Del Val, Fortman Cline managing director, said private equities from around the world – Asia, United States and Europe – are “very much excited to participate in the growth story of the Philippines” as they see a “sweet spot” in the healthcare industry. Del Val noted that the local healthcare industry is still highly-fragmented with multiple brand leaders across various sectors: medical supplies distributors, pharmaceutical firms, hospitals, diagnostic centers, retail pharmacies, retail medical device/equipment suppliers and HMOs.

R&I upgrades Philippines credit rating

Tokyo-based Rating and Investment Information Inc. (R&I) has upgraded its credit rating outlook for the Philippines to positive from stable, increasing the possibility of an upgrade in the next 12 to 18 months. A positive outlook indicates the possibility of a rating upgrade once performance indicators, such as the economic growth sought under the Philippine Development Plan 2023-2028, stable macroeconomic conditions and improving trend of fiscal position have been confirmed. In a statement, R&I said it has affirmed the Philippines’ BBB+ credit rating, two notches above minimum investment grade, as the country’s economy continues to perform well despite uncertainty surrounding the global economy. The credit rating agency cited the efforts of the Philippines to trim the deficit-to-GDP ratio to 6.1 percent this year from 8.6 percent in 2021 due to measures implemented in response to the COVID-19 pandemic and the policy actions to support the ailing economy.R&I said the government has allocated budgets in favor of infrastructure-related programs, reflecting the direction of policies it took over from the previous administration.

Cultivating a sustainable legacy; nurturing education, environment

Mitsubishi Motors Philippines Corp. (MMPC) continued to demonstrate its commitment to environmental sustainability and community development through two significant initiatives. MMPC embarked on a large-scale forestation project that aligned with its vision for a greener and more sustainable future. Recognizing the pressing need to address the environmental issues that Filipinos were facing, MMPC initiated its 100-hectare forestation agreement with the Department of Environment and Natural Resources, adopting the different locations in the country: Bangui, Ilocos Norte; and Siniloan, Laguna. In another significant move, MMPC partnered with Philippine Business for Social Progress (PBSP) to formalize its Balik-Baterya Scholarship Program.