ECCP: PHL to power through 2024 despite global conflicts
The ECCP said the Philippine economy would power through in 2024 despite ongoing geopolitical conflicts such as the Red Sea attacks and the war in Eastern Europe. ECCP President Paulo Duarte noted that the Philippines is “poised to have among the highest, if not the highest GDP in ASEAN with about 5.3 percent growth or so, and also strong macroeconomic fundamentals,” alongside strong cashflows from overseas Filipino workers, recent government efforts in infrastructure and digital reform, and the “prospect” of the EU-Philippines Free Trade Agreement.
ECCP maintains positive FDI outlook for PH
Despite headwinds experienced in the past years, the European Chamber of Commerce of the Philippines (ECCP) expressed optimism that the Philippines will gain more foreign direct investments (FDIs) in 2024, citing the country's current gross domestic product performance and continuous economic reforms for greater competitiveness and ease of doing business.
Financial activities and construction were the top contributors to Philippine gross domestic product growth (GDP) in 2023. For the whole 2023, the industries which contributed the most to the annual growth were: Wholesale and retail trade; repair of motor vehicles and motorcycles, 5.5 percent; Financial and insurance activities, 8.9 percent; and Construction, 8.8 percent. For major economic sectors, Agriculture, Forestry, and Fishing (AFF), Industry, and Services also posted growths in 2023 at 1.2 percent, 3.6 percent, and 7.2 percent, respectively.
Some 697.976 billion Php worth of projects—mostly in the renewable energy sector—were approved this month to be included in the government’s green lane program, which means faster approvals and clearances as these are deemed strategic investments. According to the the Board of Investments, the January approvals include eight projects that are Filipino-owned, three foreign-owned, while the remainder are jointly owned by local and foreign investors.
DOF backs PIFITA, says to help PHL meet targets
The Department of Finance is pushing for the passage of the Passive Income Financial Intermediary Taxation Act (PIFITA) to yield positive revenue collection and to meet the Medium-Term Fiscal Framework in 2028. PIFITA is Package 4 of the Comprehensive Tax Reform Program which seeks to “harmonize” the taxation of passive income and financial intermediaries by reducing and “simplifying” the complicated tax rates on financial transactions.
Senate to start tackling economic Cha-cha
With the Commission on Elections indefinitely suspending all proceedings related to the people’s initiative, the Senate will convene on Wednesday to tackle the proposal to amend certain economic provisions of the 1987 Constitution. Senate Deputy Majority Leader JV Ejercito said senators opted to discuss RBH6 as agreed upon by Senate President Juan Miguel Zubiri and Speaker Martin Romualdez in the presence of President Marcos.
Asian economies ‘on track’ to fuel global growth — IMF
Economies in the Asia region are expected to continue contributing significantly to global growth, as Asian central banks loosen monetary policy later this year amid easing inflation, the International Monetary Fund (IMF) said. IMF now expects Asia to grow by 4.5% this year, up from 4.2% projected in October. “Overall, Asia is on track to deliver again two-thirds to global growth in 2024, as it did in 2023,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, said.
Central bank sees 2.8-3.6% inflation in January
Headline inflation may have settled within 2.8-3.6% in January due to lower vegetable and sugar prices, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday. The BSP’s month-ahead forecast shows that inflation likely further eased from the 22-month low of 3.9% in December and 8.7% in January 2023. The lower end of the forecast or 2.8% could be the slowest since 2.3% in October 2020 amid the coronavirus pandemic.
BIR clarifies small online sellers are exempt from withholding tax
The Bureau of Internal Revenue on Monday clarified that small online sellers are exempted from the payment of the creditable withholding tax imposed on online marketplaces but would still need to register their business. BIR Revenue Regulations No. 16-2023, which took effect on Jan. 11, imposes a withholding tax of 1% on one-half of the gross remittances by e-marketplace operators and digital financial service providers to sellers paid through their platforms.
DOF limits tax-exempt status for pickup trucks
The Department of Finance is pushing for only one kind of pickup truck to remain tax-exempt as it insists on the removal of special excise treatment on all other types. During the Senate Committee on Ways and Means hearing on Monday, Finance Undersecretary Karlo Adriano said the single-cab chassis would still be exempted from taxes under the DOF proposal as it is used for agriculture.
IMF hikes PHL growth outlook for this year
The Philippine economy is set to expand by 6% this year amid likely stronger recovery in investments and exports, the International Monetary Fund (IMF) said. In its January 2024 World Economic Outlook update, the IMF upwardly revised its gross domestic product growth outlook for the Philippines to 6% from the 5.9% forecast it gave in October.
Storage, transportation named focus areas for hydrogen dev’t
The Department of Energy (DoE) said its guidelines for the hydrogen industry have identified energy storage and transportation as key focus areas for the development of the resource in a circular last January 12. Under the guidelines, the DoE said that “prospective uses of hydrogen in the energy sector shall be divided into power generation and electricity storage applications and non-power applications.” The DoE also organized the Hydrogen Energy Industry Committee (HEIC) to oversee the implementation of the circular.
PHL ranking improves in global corruption index
The Philippines’ ranking in a global corruption index by Transparency International inched up one spot with its score remaining at a record low, and Filipino governance experts said any significant improvement is unlikely in the near future. Manila ranked 115th out of 180 countries with a score of 34 in the 2023 Corruption Perceptions Index (CPI), up one spot from 116th in 2022 and up two spots from its worst-ever showing of 117th place in 2021.
PHL broadband market expanding but needs more support — telcos
The Philippine broadband market is expanding beyond the perceived duopoly, but there is a need for increased support to enhance service efficiency and reduce costs, according to industry players. Globe Telecom, Inc. Chief Sustainability and Corporate Communications Officer Maria Yolanda Crisanto said that Globe supports the World Bank’s call in a study for further government support to “address infrastructure challenges inhibiting the equitable delivery of connectivity across the country.”
Debt hits record-high P14.62T as of end-2023
The Philippines’s outstanding debt as of end-2023 rose to a record high of 14.62 trillion Php, higher by 1.2 Php trillion than the end-2022 level, as the new government borrowed more to fund the continued budget deficits and lower amount of government bonds maturities. The Treasury said the end-2023 level falls below the 61.2 percent target and is “consistent with efforts to improve debt sustainability” as outlined in the medium-term fiscal framework.
The Federation of Free Farmers (FFF) yesterday said the government lost 7.5 billion Php in revenues from undervalued and misclassified rice imports in 2023. FFF said it based the estimates on the rice import data from the Bureau of Customs (BOC) using the average declared cost of imported rice, excluding tariffs, at only 24.12 Php per kilo last year, 22 percent lower than the BOC’s reference price of 30.78 Php per kilo.
US to fund semiconductor investments in PHL–envoy
The United States has named the Philippines as one of the seven countries which will get funding from its program to strengthen its semiconductor supply chain. “We picked those countries on the basis of their potential to support semiconductors supply chains back home. The Philippines is one of them,” US State Undersecretary for Economic Growth, Energy and the Environment Jose Fernandez said. The Philippine semiconductor industry is the largest export-revenue generating sector in the Philippine economy.
Filipino population may breach 130-M mark in next three decades – PSA data
The Filipino population could breach 130 million mark in three decades, according to the latest data released by the Philippine Statistics Authority (PSA). Based on the 2020 Census-Based National Population Projections, this estimate follows a total fertility rate of 1.9 children in 2021 and 2022 and between 2025 until 2055. The average annual growth rate is estimated to decline to 0.35 percent for the period 2050-2055 from 0.84 percent for the period 2020-2025.
In close partnership with government, businesses, civil society, and academia, ECCP passionately works to enhance the business environment for both European and Filipino companies.