ECCP at Work

CREATE sparks $17 B in investments—DOF

The Department of Finance (DOF) has reported that the government’s recent changes to its corporate tax system have attracted $16.7 billion in investments. Finance Secretary Benjamin E. Diokno said these investments include 45 major projects and 740 initiatives with investment capital of less than P1 billion. “A critical feature of this reform is the rationalization of the fiscal incentives system,” Diokno said. “It has introduced an enhanced, single menu of fiscal and non-fiscal incentives that is performance-based, time-bound, targeted, and transparent,” he added.

AMRO trims 2023 PHL growth outlook

“The Philippines’ economic growth is projected to moderate to 5.9% in 2023 due to high base effects and weaker external demand, before edging up to 6.5% in 2024 as external demand recovers,” AMRO Group Head and Principal Economist Runchana Pongsaparn said. Among AMRO’s policy recommendations to boost growth include upskilling the workforce, implementation of policies to attract investments and promote exports of goods and services. The government can also improve the Philippines’ competitiveness through infrastructure investment and digitalization, it added.

BoI-approved investments hit P800 billion

The Board of Investments (BoI) has already approved P800 billion worth of investments as of early September, surpassing last year’s level, Trade Secretary Alfredo E. Pascual said. The BoI raised its target for investment approvals this year by 50% to P1.5 trillion from the original P1 trillion. “I am confident that this target could be achieved. There is even a possibility that it could be surpassed,” he told reporters in mixed English and Filipino.

Central bank ready to act as price pressures persist

BSP Deputy Governor Francisco G. Dakila, Jr. said inflation will fall within the 2-4% target range in the fourth quarter, barring unprecedented supply shocks. “Nevertheless, we continue to see that the risks to the inflation outlook have remained tilted towards the upside both for this year and for next year,” he said. “On the BSP’s part, the Monetary Board is set to convene and decide on the policy stance next week, on Sept. 21. As always, our focus remains on ensuring price stability conducive to sustainable and non-inflationary growth,” Mr. Dakila, adding that it will also take into consideration the US Federal Reserve’s next move.

PH strives to improve innovation ranking

This was expressed by President Ferdinand Marcos Jr. in a speech read by Trade Secretary Alfredo Pascual at the opening of the Asian Regional Conference in Support of Accelerated Life Sciences Innovation  in Mandaluyong City on September 11. “We believe that by addressing gaps and challenges in innovation inputs and outputs indices as well as in making continued investments in our educational and research institutions, we will reach this dream (of being in the top third percentile in GII) in no time,”  Pascual said. As a step forward, the government   launched the National Innovation Agenda and Strategy Document 2023-2032, geared towards improving the country’s performance in the GII rankings.

Marcos inks IRR of Agrarian Reform Act, 600K ARBs to benefit from condonation

The IRR provides for procedures for processing of condonation of the agrarian and the payment by government of “unpaid unjust compensation” to landowners for lands acquired under the Voluntary Land Transfer or the Direct Payment Scheme (VLT/DPS). The President signed RA 11953 last July 7, which will eliminate P57.55 billion unpaid amortizations of ARBs. Other benefits for the ARBs include the exemption from payment of estate tax and mandatory inclusion in the Registry System of Basic Sectors in Agriculture to enable ARBs easy access to support service of the Department of Agriculture.

Marcos foreign visits did not boost FDI performance — ex-NEDA chief

In an interview with One News PH, former National Economic and Development Authority (NEDA) Secretary Ernesto M. Pernia said FDI net inflows remain weaker than they were before the pandemic. The Bangko Sentral ng Pilipinas (BSP) reported that FDI net inflows declined 3.9% year on year to $484 million in June. This was the lowest net inflow since the $465 million recorded in January.

PHL looks to Middle East for renewable energy investments

Socioeconomic Planning Secretary Arsenio M. Balisacan said the country needs $103.6 billion in RE investments until 2040. This will allow the economy to attain its target mix for renewable energy over a 20-year period beginning 2020. “The Marcos Administration has aggressively pursued reforms to open up the energy sector. The Amendment to the country’s Implementing Rules and Regulations of the Renewable Energy Act of 2008 opened up our renewable resources to foreign capital, while the proposed amendments to the Electric Power Industry Reform Act will ensure greater market competition, resulting in higher-quality energy servicing for consumers and producers,” Balisacan said.

High inflation won’t derail bid for investments–Neda

Socioeconomic Planning Secretary Arsenio M. Balisacan said the country’s 6 to 7 percent growth target remains intact despite the 5.3-percent inflation posted in August. He said the low end of the growth target remains attainable. In terms of investment, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr. said while Foreign Direct Investments (FDIs) are expected to slow to $9 billion this year, their pre-pandemic level of $11 billion next year can be recovered.

House eyeing oil law tweaks to ease prices

The House of Representatives will invite officials of the country’s oil companies to address the impact of these recent oil price increases, including possible amendments to Republic Act 8479, or the Downstream Oil Industry Deregulation Act of 1998, which “tied” the government’s hands in bringing down the prices of oil. “It is common knowledge that oil companies still sell supplies bought at lower prices before the costs of crude oil in the world market increased. Maybe we can ask them not to raise the price,” the Speaker said.

After initial supply crunch, rice price cap EO ‘going well’–PBBM

In an interview with reporters at the Department of Agrarian Reform in Quezon City, the chief executive admitted his new issuance prompted some rice retailers to defer selling their rice stocks. However, he noted that since the Department of Social Welfare and Development (DSWD) started distributing its P15,000 livelihood aid for the affected retailers, many of them decided to resume selling their stocks. As of Tuesday afternoon, DSWD Secretary Rexlon “Rex” T. Gatchalian reported they were able to give P7.5-million livelihood aid to 474 rice retailers. Gatchalian said around 5,900 rice retailers may qualify for the livelihood aid.

Proposed CREATE amendments seek to clear up VAT refund rules

“This reform aims to reconcile the disparities between the CREATE Act and its implementing rules and regulations, primarily on VAT-related transactions,” Albay Rep. Jose Ma. Clemente S. Salceda said in a Ways and Means hearing. Under the draft substitute bill, the corporate income tax (CIT) rate for the enhanced deduction regime will be set to 20%, from 20-25% previously. The proposal also places the enhanced deduction for power costs at 200% from 150% previously. It also allows enhanced deductions for expenses related to trade fairs, missions, or exhibitions of 200%, from 100% previously. The proposed amendments also allow the Fiscal Incentives Review Board to grant VAT-zero rating and VAT exemptions to domestic market enterprises with investment capital of over P500 million.

Trade groups: Asean RO-RO will cut logistics costs

At the 21st International CEO Conference organized by the Management Association of the Philippines (MAP), Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon, along with heads of business chambers of Asean member-countries particularly from Thailand and Singapore, discussed major initiatives of Asean member nations in enhancing the business climate in the region. Barcelon underscored the importance of this logistics system for Philippine trade, explaining that “anything that is transported by sea is much cheaper.” The 2013 Asean master plan and feasibility study on the establishment of an Asean RO-RO Shipping Network and Short Sea Shipping defined a “roll on-roll off ship” as “a passenger ship with ro-ro cargo spaces or special category spaces.”

DOE targets interested MSPs in government’s electrification drive

“We have 120 islands that are not connected to the grid. We have to determine first the list of the areas that would be placed under the microgrid auction. We will issue a notice of auction within the year,” said DOE Undersecretary Rowena Cristina Guevara. Prior to the planned auction, the DOE will release the unserved areas, which will then undergo a Competitive Selection Process (CSP) wherein an entity would be awarded the contract to provide integrated power generation and distribution services to an unserved or underserved area through a transparent and competitive procedure, such as, but not limited to, an auction, unsolicited proposal, or Swiss challenge, taking into consideration the requirements of the Microgrid Systems Act and other applicable laws.

ADB OKs $303-M PHL infra loan vs floods, climate risks

ADB said Phase 1 of the Integrated Flood Resilience and Adaptation Project will upgrade and construct flood protection infrastructure in the Abra river basin in the northern Luzon region and the Ranao/Agus and Tagum-Libuganon river basins in southern Mindanao. ADB Senior Water Resources Specialist Junko Sagara emphasized that the project will help lessen the risks from extreme weather events and improve income and livelihood opportunities, especially for the poor and vulnerable. Moreover, ADB said the project will help strengthen the Philippines’s capacity to perform flood risk management planning by providing training for government officials, installing equipment for weather and river flow monitoring and early flood warning, and introducing an asset management information system. According to ADB, the project also aims to boost community-based flood risk management by supporting 22 local government units (LGUs) and about 150 barangays in updating their climate and disaster risk assessments and integrating flood risk management in local development plans.

Marcos pitches Maharlika Investment Fund, tech at Asia Summit

The chief executive urged the participants to consider the country as an investment destination with its fast-growing economy based on last year’s GDP data, strong domestic demand, skilled workforce and investor-friendly policies. “We are the number one country of choice for the delivery of customer support and to healthcare services. And one of the top destinations for outsourcing overall second only to India,” Marcos said. The President assured companies that will operate in the country of several advantages, including access to the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement. Marcos also said the country is currently expanding its electricity supply, which includes renewable energy, to bring down the prices of power and it is also in the process of a frenetic digital transformation.

PH overtakes China as world's top rice importer in 2023 – USDA

The USDA's "Grain: World Markets and Trade" revealed that the country has approved the importation of 3.9 million metric tons (MT) of rice from January 2022 to December 2023. For January 2023 to August 2024, the Philippines is seen to slightly decrease its importation by 100,000 MT while China is expected to increase its importation by 500,000 MT, regaining world's top rice importer spot. In terms of milled rice production, the Philippines lags behind at 12.631 million MT from China's 145.946 million MT and India's 136 million MT production for the year 2022-2023. Thailand and Vietnam are reportedly the top two sources of imported rice in the Philippines in 2023.

Tariff cuts  backed

The Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc (FFCCCII) yesterday expressed  support to proposals to eliminate tariff on rice or at least reduce it to 10 percent from the current 35 percent to address augment supply and further stabilize prices. In a separate statement, the British Chamber of Commerce Philippines also expressed support to proposals extending Executive Order No. 10 by conducting a review on the lower tariffs of commodities such as pork, rice, corn, and coal. Meanwhile, the Federation of Free Farmers (FFF) yesterday said eliminating or cutting tariffs on rice is ill-timed since farmers are about to harvest the main season crop and rice prices will naturally go down.

PH vows to deepen trade,  investment ties with UAE

The country’s economic team reaffirmed the Philippines’ intent to commence and expeditiously conclude the negotiations of the Comprehensive Economic Partnership Agreement with the United Arab Emirates (UAE) as a means to deepen bilateral trade, investments and economic cooperation. According to the DOF, the ministers expressed UAE’s openness to forming trade alliances and investments globally despite geopolitical tensions and fragmentation. The economic team also met with leading global alternative investment management platform, Brevan Howard; specialist emerging markets financial services company, Arqaam Capital; and the Government of Dubai’s principal investment arm, Investment Corporation of Dubai. The DOF said the companies expressed interest in the Philippines’ RE projects, port operations, water and wastewater management, waste-to-energy projects, upcoming Sukuk bond issuances, Islamic banking and the Maharlika Investment Fund.

SRA to deploy Japanese-funded farm machineries for sugar growers

Pablo Azcona, SRA administrator, said in a statement 51 units of tractors will be deployed to sugarcane areas in the Visayas with Negros Occidental getting the bulk at 24 units, Negros Oriental,11; Iloilo, six; Leyte,  four while Cebu and Capiz will be getting three each. Under the Japan Non-Project Grant Aid that was entered into by the Department of Finance and the SRA with the Japanese government in 2021, SRA will be the owner of these farm machineries and implements procured through the grant and will submit an impact assessment report to the DOF and the Japan government three years after its implementation. SRA said to ensure the sustainability of the program, the farm machineries and implements will also be