ECCP at Work

ECCP calls for sustainable agri to meet rising food demand

During the Sustainable Agriculture Forum, ECCP President Paulo Duarte said innovating the agriculture sector will ensure food security and preserve the ecosystems for the future generations. “Sustainability is not a solitary endeavour but a collaborative journey shared with farmers, policymakers, industry leaders, academe, and consumers alike,” he said. He added stakeholders’ partnership is vital in leveraging collective knowledge towards agricultural practices that regenerate the land, reduce greenhouse gas emissions and promote biodiversity while fostering economic profitability, and ensuring that all people have access to adequate and affordable food. “At the Chamber, we remain steadfast in our efforts to collaborate with stakeholders across the agri-food value chain to foster a sustainable and robust agriculture sector,” he said.

FDI inflows fall to 5-month low in June

Data released by the BSP showed FDI net inflows declined by 3.9% to $484 million in June from $503 million in the same month in 2022. This was also 0.6% lower than the $487-million FDI net inflows in May. “Concerns about global growth as well as anxiety over slowing growth in the Philippines may have prompted investors to hold back on investing at this time,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said. 

BoI, PEZA hit 72% of 2023 investment targets

Marjorie O. Ramos-Samaniego, governor of the BoI, said: “We see now a recent positive BoI investment approval performance. (As of) August of 2023, the BoI approved P720 billion in investment projects,” she said. She said that the amendment allowed 100% foreign ownership in renewable energy projects such as wind, solar, hydro, tidal, and ocean energy. Meanwhile, PEZA said investments between January and Sept. 7 amounted to P111.21 billion, almost three times the year-earlier level of P39.63 billion. “With our approved investment pledges as of September, we have achieved 72% of our P154.77-billion investment target for 2023,” said PEZA DG Panga.

Inflation unlikely to overshoot target in Q1

Inflation is on track to return to the central bank’s 2-4% target range in the fourth quarter, but unlikely to overshoot the target in the first quarter of 2024, Finance Secretary Diokno said. “While there was a spike in the inflation rate for (August), the continued decline in the year-to-date inflation rate suggests our (Development Budget Coordination Committee) full-year 2023 inflation rate assumption of 5-6% remains doable,” he said. Meanwhile, former BSP Governor Felipe M. Medalla said inflation is now likely to remain above the target band for up to 22 straight months or until January 2024.

DTI sets sights on No. 2 position within ASEAN for attracting FDI

The Philippines will seek to become a top two destination within the region for FDI by 2028, Trade Secretary Pascual said. “As of now the total is $71 billion… So, it is possible to aspire to be at a higher level,” he said, citing the combined value of investment leads generated by the DTI and the BoI. Mr. Pascual said that for this year, 16 big-ticket projects worth $1.2 billion are expected to flow in, nine of which are already operational. He said that the remaining seven are registered with the BoI or the PEZA and are awaiting implementation. 15 projects are being processed via the BoI’s Green Lane.

DoF eyes temporary zero tariffs on rice

The DoF proposed the “reduction of the 35% rice import tariff rates, both ASEAN (Association of Southeast Asian Nations) and MFN (Most Favored Nation) rates, temporarily to zero percent or maximum of 10% to arrest the surge in rice prices.” The tariff reduction will also only require an executive order (EO) for its implementation. “There’s no need for Congress… The President may adjust the tariff when Congress is not in session,” he said. “There is just a hearing, then the Tariff Commission will recommend, it needs an EO. The Tariff Commission will draft an EO to the President.” “The relaxing of the tariff is forward-looking because the price of rice is going up globally… rice is really, I think, the biggest contributor to inflation,” he said.

Hotel industry feeling staffing pressures from ‘brain drain’

“The brain drain within the hospitality group, it’s happening,” Hotel Sales and Marketing Association (HSMA) Philippines President Loleth G. So said, describing the losses as taking place “within the country” as well as “out of the country.” Agnes Pacis, HSMA director for membership, said the competition for talent is also affecting hotel sales and marketing personnel. “Maybe some incentives can be put in place. Universities could encourage more enrollment in tourism and hotel and restaurant-related courses,” Ms. Pacis said.

DTI says rice price cap may be lifted in 2 weeks

The government may lift the price ceiling on rice in two weeks when the local harvest starts and more imports arrive, Trade Secretary Alfredo E. Pascual said on Monday. “Within September, we are looking at 2 million metric tons of harvest and some entry of imported rice. So maybe within two weeks we should be able to see whether we can lift the price cap,” he said in an interview with ANC on Monday. Meanwhile, President Ferdinand R. Marcos, Jr. said that there is a need to ramp up rice production to bring down prices. “So, it’s correct that we have to increase our production. But we have to make sure that the increase in production redounds to the benefit of the farmer.”

Local currency bonds reach P11.7T

The total LCY bonds recorded a quarter-on-quarter increase of 1.3 percent, according to the Asia Bond Monitor. The ADB reported that the Philippine corporate bond market remained dominated by the property, banking and holding firms sectors, which accounted for a collective share of 81 percent of total corporate bonds outstanding at the end of the second quarter. Meanwhile, the report also mentioned that LCY government bond yields in the Philippines increased for most tenors between June 1 and August 31, with only the one-month and three-month tenors posting declines during the review period. “The increase in yields was influenced by the Bangko Sentral ng Pilipinas’ hawkish tone amid persistent elevated inflation despite a continued decline since February,” the report said.

DOE crafts smart, green grid plan with NGCP

The Department of Energy (DOE) is collaborating with the National Grid Corporation of the Philippines (NGCP) in crafting a smart and green grid plan to ensure seamless integration of additional renewable energy (RE) capacity in the grid. “The DOE has innovative programs that are looking at the potential of alternative fuels and emerging technologies such as hydrogen and ammonia and even tidal energy as well as working on expanded solar rooftop program and improvement of solid waste management, while enhancing on the policies on the development of offshore-wind, taking into account the streamlining and stricter timeframe set forth in the Energy Virtual One-Stop Shop law on the processing and issuance of licenses and permits by the concerned national and local government entities,” Lotilla said.The DOE noted the importance of attaining the country’s targets of a minimum of 35 percent RE share in the power generation mix by 2030 and 50 percent by 2040.

Gov’t, private sector urged to collaborate on AI adoption

A professor in the Sloan School of Management at the Massachusetts Institute of Technology, and a leading authority in AI, Internet of Things, and education, Sarma said AI is fast redefining the process of businesses that industries like business process outsourcing will need to quickly adapt into the changes that AI brings. “In the Philippines, AI is going to replace jobs. So, let’s accept that. And the Philippines should become the country that leads the world in how to use AI, in call centers. It will put some people out of work, but at least you define the rules of how it works,” Sarma added. Sarma said as a result, the labor force needs to move up the value chain of services. AI would require more investments in science and technology, engineering and mathematics education of current and future employees. “The government needs to be cognizant that this is an epic moment. This is technology change, just like climate change,” he said.

European retailers risk dressing-down from investors

European retailers have been unlikely stock market stars this year, but a long spell of high borrowing costs and inflation has started to bite, so wary investors will be looking for reassurances from the likes of H&M and Zara-owner Inditex when they issue business updates this week. The STOXX retailers index is up a whopping 25 percent to date – making it the best performing sector so far in 2023 after it was second-worst last year next to real estate. “In 2022 short sellers had built positions in the sector and those have been unwound,” said Benjamin Jones, Director of Macro Research, Fundamental Multi Asset team at Invesco. Jones expects retail stocks to fall in the second half of the year. The index dropped in August and is down in September, but it is still just 5 percent below July’s 17-month highs. And now, with inflation slowing down, the accumulated effects of costlier credit and months of surging prices are weakening demand.

Unemployment, underemployment figures alarming–FFW official

According to the latest Philippine Statistics Report (PSA), the number of unemployed Filipinos as of July 2023 is 2.27 million. The number of underemployed Filipinos, on the other hand, has reached 7.1 million in the same timeframe. This translates to an unemployment rate of 4.8 percent and underemployment rate of 15.9 percent in July 2023. “The increasing number of unemployment and underemployment is still alarming,” said FFW President Sonny Matula in Filipino. “We call upon the government, industry leaders, and trade unions to collaborate in finding solutions that prioritize the needs of our workforce and youth,” Matula said.