ECCP at Work

World Bank sees below-target growth for PH in 2024, 2025

The Marcos administration will likely miss its economic growth target for this year and next, although the Philippines will remain one of the fastest-growing economies in East Asia and Pacific despite a projected regional slowdown amid sluggish growth in China, the World Bank said. The Philippines is projected to grow 5.8 percent in 2023 and 2024, which will settle below the government’s ambition of powering up the economy by 6.5 to 7.5 percent this year, and by 6.5 to 8.0 percent from 2025 until 2028.

FDI net inflow down for third straight month in Oct 2023 —BSP

The net inflow of foreign direct investments (FDIs) to the Philippines fell for the third straight month in October last year as high inflation at home and expectations of a global economic slowdown continued to create unease among investors. Data released by the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflow amounted to $655 million in October, plummeting 29.6 percent compared with a year ago. 

Trade gap widens to $4.69 billion in November

The country’s trade deficit in November widened to a seven-month high as imports left negative territory, while exports continued to decline. Preliminary data from the Philippine Statistics Authority showed the balance of trade in goods amounted to a $4.69-billion deficit in November 2023, a 26-percent increase from the $3.72 billion shortfall in the same month in 2022. “The struggles of the export sector can be tagged to softening demand for our mainstay electronics sector.  With global trade subdued and a reported oversupply of basic electronics subcomponents, exports have faced a challenging year,” ING Bank senior economist Nicholas Mapa said.

Unemployment rate falls to 3.6 percent in November

The Philippines' unemployment rate fell to 3.6 percent in November. This was lower compared to the 4.2 percent rate reported in both October 2023 and November 2022. The three sectors that added the most jobs include agriculture and forestry, construction, and transportation and storage, while those that posted the highest annual decreases were manufacturing, wholesale and retail trade, and public administration and defense.

Diokno out; Recto named DOF chief

House Deputy Speaker Ralph Recto is taking over the post of Benjamin Diokno as finance secretary and head of the administration’s economic team.Sources confirmed that Recto is set to take his oath before President Marcos today as the new head of the Department of Finance (DOF). Diokno, in turn, will take his oath before Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona as the last member of the seven-man Monetary Board.

Palace confirms: Recto new DOF secretary, to take oath with Frederick Go on Friday 

House Deputy Speaker Ralph Recto is set to take his oath as new Finance secretary on Friday before President Ferdinand R. Marcos Jr., along with Special Assistant to the President for Investment and Economic Affairs Frederick Go, ending months of speculation over the DOF portfolio. Recto will replace DOF Secretary Benjamin Diokno. 

Presidential visits yield P4T investments, P66B projects approved

Total consolidated investments generated by foreign visits of President Ferdinand Marcos Jr. have reached $72.18 billion, or about P4 trillion, according to Department of Trade Industry undersecretary Kim Lokin. 20 projects worth $1.2 billion or about P66 billion have so far been greenlighted and registered with either the Board of Investments or the Philippine Economic Zone Authority.

BIR waives annual registration fee for business taxpayers

BUSINESS TAXPAYERS will no longer have to pay the annual registration fee with the Bureau of Internal Revenue (BIR) effective Jan. 22 in compliance with the Republic Act No. 11976 or the Ease of Paying Taxes Act, which President Ferdinand R. Marcos Jr. signed into law on Jan. 5. “As a result, business taxpayers are exempt from filing BIR Form No. 0605 and paying the P500 annual registration fee on or before Jan. 31 every year,” it said.

BOC revenues hit record P884 billion in 2023 

The Bureau of Customs (BOC) raked in a record P884 billion in revenues last year, slightly overshooting government targets amid a heightened drive against smuggling and better digitalization initiatives. Preliminary data from the Department of Finance showed that  BOC’s total collections reached P883.62 billion in 2023, a percentage higher than the P874.17 billion target set by the Cabinet-level Development Budget Coordination Committee.

DTI eyes 10% exports growth in 2024

If everything is business as usual, the country’s exports are expected to grow by 10 percent this year, according to Department of Trade and Industry market projections. Latest data from the Philippine Statistics Authority showed that merchandise exports from January to November 2023 reached $67.03 billion, an 8.4 percent decline from the $73.18 billion registered  in the same period in 2022. Service exports from January to September 2023, on the other hand,  grew by 20.7 percent to $34.7 billion.

Roadmap to address agri issues 

The Department of Agriculture (DA) is finalizing its 10-point agenda that will address issues holding back the progress of the country’s farm sector and its stakeholders, particularly farmers and fisherfolk. Some of the recommendations include the establishment of cold storage facilities for vegetables, including onions and laboratories for biosecurity concerns as well as the construction of farm-to-market roads or other modes for faster movement of agricultural products. 

DA to draft procurement guidelines for agricultural crises

The Department of Agriculture announced that they are in the process of drafting the Implementing Rules and Regulations for a law clause, seeking to stabilize necessities and commodities supply while protecting consumers from unjustified price hikes during food shortages. “Secretary Tiu Laurel ordered the TWG to develop a clear and concise set of rules to implement Section 9 of the Price Act,” the DA said in a statement. Section 9 of the law gives the agriculture department, the power to procure, purchase, import, or stockpile basic or prime commodities.

Global unemployment seen rising modestly in 2024, says UN labor body

The global unemployment rate is expected to inch up to 5.2 percent this year primarily because of a rise in joblessness in advanced economies, the International Labor Organization (ILO) said. ILO’s 2024 World Employment and Social Outlook report forecasts the number of unemployed people will rise by 2 million, lifting the global unemployment rate to 5.2 percent from 5.1 percent in 2023.

Factory output growth rises faster

The country posted higher manufacturing output growth in November from the previous month, driven by improvements in the beverage, transport equipment and chemical industry divisions. Preliminary results of the Monthly Integrated Survey of Selected Industries released by the Philippine Statistics Authority (PSA) yesterday showed the Volume of Production Index (VoPI) for manufacturing registered a 1.9 percent growth last November, faster than the 1.5 percent increase in October last year.

PBBM sets March visit to Germany 

President Ferdinand R. Marcos Jr. on Thursday announced his upcoming visit to Germany, marking a significant development in diplomatic ties and fostering international collaboration between the two nations.  While specific details about the agenda were not disclosed, the President alluded to the possibility of increased collaboration and cooperation between the Philippines and Germany.

PH, Indonesia sign MOU on energy, to boost trade

The Philippines and Indonesia yesterday signed a Memorandum of Understanding (MOU) on energy cooperation that aims to ensure energy security for both countries, particularly during periods of critical supply constraints on energy commodities such as coal and liquefied natural gas. The MOU also offers potential benefits across economic, environmental and geopolitical dimensions through collaboration on energy transition, renewable energy, demand-side management, electric vehicles and alternative fuels such as hydrogen, ammonia, and biofuels.

BSP rate cuts seen in lockstep with US Fed 

The Bangko Sentral ng Pilipinas (BSP) is expected to move in lockstep with the US Federal Reserve as it pivots to an easing cycle after emerging as the most aggressive central bank in the region. In a press conference, Aris Dacanay, economist for ASEAN at HSBC, said the BSP may start cutting interest rates by 75 basis points this year. The BSP has emerged as the most aggressive central bank in the region after raising key policy rates by 450 basis points since May 2022 to tame inflation and stabilize the peso that slumped to an all-time low of 59 to $1 in October 2022.

Cloud, AI to fuel data center demand 

Demand for data centers in the Philippines is expected to further grow this year, according to STT GDC Philippines, a partnership of Globe Telecom, Ayala Corp. and ST Telemedia Global Data Centres. This is fueled by cloud adoption, the rise of Artificial Intelligence, the shift to remote work, the increase of online services and the expanding 5G access, with digitalization accelerating in the country. The data center industry has been growing aggressively at a compound annual growth rate of 15 percent from 2022, with the trend forecast to remain until 2030, according to Bloomberg data. In the Philippines, an estimated 85 percent of businesses are expected to transition fully to the cloud by 2025. 

NAIA operator forecasts P14.8-B revenue, 15% passenger rise this year

The Manila International Airport Authority (MIAA) said it expects revenues to rise by 18% to P14.82 billion this year, with the volume of arriving and departing passengers expected to increase by 15% to more than 48 million. MIAA, operator of Ninoy Aquino International Airport (NAIA), is also allocating P4.37 billion for capital expenditures this year, as per its corporate operating budget for 2024, which was approved by its board of directors on Oct. 20 last year.

Germany keen on RE, hiring more Filipinos

Germany is eyeing to invest in renewable energy and import raw materials from the Philippines, but stressed the need for the Philippines to have clearer rules for foreign investments. Visiting German Foreign Minister Annalena Baerbock also pitched the start of negotiations for the Philippine-European Union free trade agreement. “Of high importance for us is to deepen cooperation for renewable energy sector because we have leading companies, especially in the wind sector,” Baerbock said at a press conference in Makati City.

Withholding tax on online sellers seen to address revenue leakages 

The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations (RR) No. 16, which imposes a withholding tax on the gross remittances made by electronic marketplace operators and digital financial service providers to merchants. Analysts said that the implementation of the withholding tax on online sellers will allow the BIR to better track transactions in the digital economy.