ON ECONOMY AND GENERAL NEWS
House Committee on Ways and Means Chairman Joey Sarte Salceda anticipates that among the major adverse impacts of the COVID-19 is the loss of income and aggregate demand, as well as OFW remittances of approximately USD 5 billion
The Philippine peso strengthened last Friday, with P50.72 per dollar, rising 13 centavos from its P50.85 per dollar close on Thursday, according to figures from the Bankers Association of the Philippines (BAP).
ON HEALTH / FINANCIAL SERVICES / INSURANCE
ON LOGISTICS AND CARGOES
Moody’s Investors Service lowered its outlook on the Philippine banking industry to “negative” from “stable,” with the Luzon lockdown meant to arrest the spread of the coronavirus disease 2019 (COVID-19) seen to take its toll on banks’ assets and profitability.
A negative outlook means lenders’ credit ratings might be downgraded in the short to medium term or in about six months to two years. Moody’s said major asset risks could emerge from banks’s exposure to local conglomerates as well as weaker and smaller companies.
According to Fitch Solutions Macro Research, the current account deficit is expected to expand this year to about 2.6% of Gross Domestic Product (GDP) due to weak external demand during the coronavirus disease 2019 (COVID-19) epidemic.
Fitch Solutions said it is revising its current account balance forecast to a deficit equivalent to 2.6% of GDP in 2020, from the previous outlook of 1.2%.
House Committee on Ways and Means Chair Joey Sarte Salceda is calling for an extension of the Enhanced Community Quarantine (ECQ) over Luzon. Citing historical, scientific, and economic evidence, Salceda said that a more cautious approach to the pandemic is “evidence-based, logical, lifesaving.”
He proposed a lockdown of at least 6 weeks to avoid prematurely lifting restrictions and triggering a massive wave of new infections.
The Asian Development Bank (ADB) has extended a $5-million grant to provide critical food supplies to up to 55,000 vulnerable households in Metro Manila and neighboring areas amid the enhanced community quarantine (ECQ).
The Rapid Emergency Supplies Provision Project will be implemented under the Tagalog name “Bayan Bayanihan.” The beneficiaries will include the poorest families and informal sector workers who have lost their livelihoods due to the ECQ.
The coronavirus pandemic will have a minimal effect on the Duterte administration's 'Build, Build, Build' infrastructure program, Public Works Secretary Mark Villar said.
Construction of several infrastructure projects was halted for at least a month as the government directed its efforts to fight the COVID-19 pandemic. Secretary Villar said that the DPWH is currently focused on converting convention centers into massive quarantine facilities for COVID-19 patients. He said the conversion is expected to be finished by April 10.
The Department of Energy (DoE) has prepared a draft circular directing the use of all available and unremitted funds accumulated under Energy Regulation 1-94 (ER 1-94) to bolster the government’s efforts to contain the coronavirus disease 2019 (COVID-19) epidemic.
ER 1-94 sets aside for power plant host communities a one centavo per kilowatt-hour take from total electricity sales. The available funds also include the Electrification Fund (EF), the Development and Livelihood Fund (DLF) and the Reforestation, Watershed Management, Health and/or Environment Enhancement Fund.
Financial support for micro, small and medium enterprises (MSMEs) should be a government priority, especially after the enhanced community quarantine (ECQ) is lifted or modified, several business groups said.
Almost one million MSMEs were recorded in 2018 — accounting for 99.52% of businesses, government statistics showed. Almost half of these are in the wholesale and retail trade and repair of motor vehicles and motorcycles industries, and they generated 63% of the country’s total employment with more than 5.7 million jobs.
The government has approved the grant of a 30-day grace period on the payment of commercial rents with the prevailing monthlong enhanced community quarantine (ECQ) to provide small businesses some relief in the face of sharp income losses.
The Inter-Agency Task Force for the Management of Emerging Infectious Diseases, or IATF, on Wednesday approved the proposal to give micro, small and medium enterprises (MSMEs) a 30-day extension for the payment of their commercial rents. No interest penalties and other fees should be imposed on them as well.
The Department of Finance said Thursday imported medical gear to fight COVID-19 would be released "right away" following the issuance of guidelines for tax free importation. The tax exemptions cover personal protective equipment, COVID-19 test kits, medical and laboratory equipment and other supplies for frontliners against the disease.
According to Labor Secretary Bello III, more than 630,000 workers nationwide have been displaced by the impact of the coronavirus disease 2019 (COVID-19) pandemic, either by reason of temporary closure or flexible work arrangements as reported by 15,213 establishments. Of these figures, 169,232 belong to the informal sector.
According to DOT Secretary Puyat, the Bayanihan Law has freed up about P8-10 billion in funds from Tieza (Tourism Infrastructure and Enterprise Zone Authority), which will be turned over to the national government in its fight to contain the spread of COVID-19.
These funds were part of the P14 billion in tourism recovery projects earlier announced by Dominguez as part of the P27-billion economic stimulus package to lift sectors affected by Covid-19. The DOT earlier projected tourism revenue losses to reach some P40 billion from January to March 2020.
While the DOF is free to allocate these funds wherever it sees fit, Romulo Puyat said she will “ask that it pay for the stay of our OFWs (overseas Filipino workers) in hotels.”
As the global economy entered a recession amid the COVID-19 pandemic, the Philippines will try to shield its domestic economy through a stimulus plan, the Duterte administration’s chief economic manager said.
The Philippine government is awaiting the details of the terms and conditions of the IMF’s offer to mobilize its $1-trillion lending facility to countries needing more financial assistance to combat the economic fallout from the COVID-19.
The Air Carriers Association of the Philippines (ACAP), comprised of Philippine Airlines, Cebu Pacific and AirAsia Philippines, called on the government to urgently intervene as revenues run dry while billions of pesos in refunds and fixed costs mount.
The three airlines have paid out some P7 billion in refunds as flights were canceled due to travel bans in the Philippines and overseas. Moreover, the Luzon enhanced community quarantine has forced the carriers to suspend all flights for about a month until the middle of April 2020. This has prompted the cancellation of 30,000 flights, affecting five million passengers, Acap said.
Philippine Ports Authority (PPA) General Manager Jay Daniel R. Santiago warned of a possible port shutdown if cargo owners and consignees continue to shun calls to withdraw cleared, ready for delivery and overstaying cargoes.
PPA, with agencies like the BOC, DTI, DA,are now looking at measures to prevent congestion at the ports. Among the heavily considered measures include the forfeiture of overstaying cargoes in favor of Government and reducing the cargo clearing period as well as the free storage period from the current allowable time in order to force the cargo owners to withdraw as they will be burdened with heavy fines, penalties and storage fees. The agencies are expected to come out with a Joint Memorandum Circular to effect the needed yard management at the Manila ports.
The Philippine Purchasing Managers' Index (PMI) fell sharply to record its weakest performance so far in the IHS Markit monthly survey, dragged by the factory shutdowns brought about by the spread of the coronavirus disease 2019 (COVID-19).
The IHS Markit Philippines PMI fell to 39.7 in March, down from 52.3 in February and 51.5 in March 2019.
Trade Secretary Ramon Lopez backed Wednesday the proposal of some businessmen to gradually lift the lockdown in Luzon as he emphasized the need to resume business operations as the country continued to battle the coronavirus disease 2019 outbreak.
According to Secretary Lopez, businesses involved in the supply chain of food products, medical products, and other necessities should be prioritized.
The government is now taking action and undertaking several key measures to overcome and recover from the effects of this pandemic. These measures have three main priorities: (1) Providing Emergency Assistance to Affected Sectors, (2) Securing Facilities [and] Resources for the Health Sector and (3) Performing Fiscal and Monetary Actions for the Economy.
The national government has allotted a total of ₱200-billion-worth of aid, in which the Department of Social Welfare and Development (DSWD) will be distributing social amelioration cards for cash aid between P5,000 to P8,000 to be given to vulnerable sectors of society such as persons with disabilities, senior citizens, pregnant mothers, homeless persons and workers in informal sectors.
The Health Department has also purchased one million set of personal protective equipment worth ₱1.8 billion to be given to health workers in referral hospitals for coronavirus patients in Luzon.
DILG Secretary Año said that while the Inter-Agency Task Force (IATF) for the Management of Emerging Infectious Diseases will still discuss possible measures once the 30-day lockdown is over, an extension of the enhanced community quarantine (ECQ) is not recommended.
Secretary Año added that the extension of the ECQ is not advisable as the economy will suffer greatly. Instead, we suggested that the remaining two weeks of the lockdown be taken seriously so the crisis may be solved.
The two government agencies have joined forces to further enhance checkpoint protocols to ensure the unimpeded movement of food and agri-fishery products, inputs, and personnel.
DILG and DA agreed on the arrangement that checkpoint protocols at the municipal/city and barangay roads will be adjusted accordingly to facilitate the flow of agricultural products and commodities, as well as farmers and other agri-fishery personnel.
Health Secretary Francisco Duque has asked the technical advisory group of the Department of Health to study the developments related to the anti-flu drug favipiravir (brand name Avigan), which reportedly showed promising results in two recent clinical trials.
Food and Drug Administration (FDA) Director-General Eric Domingo said that the drug is not yet produced commercially, but they are planning to make representations to bring it to the Philippines in case it gets approved for use for COVID-19 patients.
According to Cabinet Secretary Karlo Nograles, the Philippine government will convert maritime vessels, hotels and large facilities such as the Philippine International Convention Center and the World Trade Center as quarantine sites as the number of new coronavirus cases continues to rise in the country.
Several government agencies, including the DOH, DPWH, and DOT, are in coordination to identify and prepare facilities to be transformed into quarantine sites.
BSP is willing to increase its stimulus package to more than P500 billion to counteract the economic disruption from the COVID-19 pandemic.
BSP Governor said the central bank could further increase its purchase of government securities from the Bureau of the Treasury.
The central bank’s Department of Economic Research projects consumer prices rose 2.4% this month, slower than the 2.6% notched in February and settling within the low-end of BSP’s annual 2-4% target.
According to BSP Governor Diokno, “The downward adjustment in prices for March was largely due to the plunging world oil prices.”
Dwindling demand due to the coronavirus impact on economic activity pulled down Dubai crude prices— the Asian benchmark for global oil prices— to $22.51 per barrel, a level not seen since 2016.
Nomura said it has downgraded its 2020 gross domestic product (GDP) growth forecast for the Philippines to 1.6% from the initial 5.6%, amid the coronavirus disease 2019 (COVID-19) outbreak. This was its lowest forecast for the Philippines since the 2009 global financial crisis.
The National Economic and Development Authority (NEDA) said last week that GDP growth is estimated at 4.3% to -0.6%, depending if the pandemic is contained. Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno has also said the economy could contract or settle at a 1% growth.
The Bangko Sentral ng Pilipinas (BSP) has vowed to do everything it can through a combination of monetary and fiscal policies to avoid a recession due to the impact of COVID-19.
In a TV interview, BSP Governor Benjamin Dioko said the economy may contract this year instead of the previous estimate of a growth of between five and 5.5%.
Under the Bayanihan to Heal as One law, which was passed last week, Duterte should deliver a weekly report to Congress every Monday, where he would detail what the government has done in the past week with regards to the COVID-19 pandemic.
The report should include how much of the funds have been used, how much has been added, reprogrammed, reallocated and realigned for COVID-19 response.
Labor Assistant Secretary officer-in-charge Dominique R. Tutay told BusinessMirror that of the said amount, P76.5 million was allocated for the Covid-19 Adjustment Measures Program (CAMP), and the remaining P13.7 million for the Tulong Panghanapbuhay Sa Ating Displaced/Disadvantaged Workers Program (Tupad)-Barangay Ko, Bahay Ko.
Labor and Employment Secretary Silvestre H. Bello III said he ordered the immediate release of funding for the projects after getting reports that the number of Covid-affected workers has swelled to about half a million.
The Department of Trade and Industry (DTI) assured the public of enough food supply as the country enters the second half of the quarantine period in Luzon.
The DTI secretary, however, noted that there are barangays and municipalities that are not allowing delivery trucks to pass through in their respective checkpoints.
Total Philippine exports of goods and services jumped by 4.4% to $94.4 billion in 2019 from $90.4 billion in 2018, according to the BPM6 data released by the Bangko Sentral ng Pilipinas on March 20, 2020.
The 2019 figure is within the $93.7- billion to $96.4-billion target set in the Philippine Export Development Plan (PEDP) 2018-2022.
The Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) approved the request of the Department of Agriculture (DA) for a P31-billion supplemental budget to fund the ‘Plant, Plant, Plant Program’ or Agri 4Ps to increase the country’s food adequacy level during the emergency situation resulting from the Covid-19 pandemic.
The National Economic and Development Authority (NEDA) said it is now preparing a plan to rebuild the business and consumer confidence as well as avoid a prolonged economic recession following the COVID-19 pandemic.
Socioeconomic Planning Secretary Ernesto M. Pernia said that the enactment of the Bayanihan to Heal as One Act will expedite the implementation of measures to address the COVID-19 pandemic in the country.
DOTr and DOT have agreed to prioritize airport development programs in support of tourism development, monitor the progress of airport projects in such areas, and explore, develop and increase the value proposition of destinations “for sustainable tourism through the productive utilization of airport assets and route development.”
Please be informed that the Department of Tourism (DOT) Central Office, Regional Office National Capital Region (NCR), and Regional Office IV-B are implementing a “Work from Home” work arrangement starting 16 March 2020 until further notice. For any immediate or urgent concern, you email the following:
|Administration and Finance||Office of the Undersecretary for Administration and Financeemail@example.com|
|Budget and Accounting Concerns||Office of the Assistant Secretary for Administration and Financefirstname.lastname@example.org|
|Biddings, Procurement/Purchasing, General Services, Maintenance, Motorpool/Vehicle, Cash Section, Property, and Supply Concerns||Office of the Director for Administrative Service and Procurement Managementemail@example.com|
|HR Concerns||Human Resource Divisionfirstname.lastname@example.org|
|Contract preparation and other concerns||Legal Affairs Serviceemail@example.com; firstname.lastname@example.org|
|Work and Financial Plans (WFP) concerns (for internal stakeholders)||Planning Serviceemail@example.com; firstname.lastname@example.org|
|For Product and Market Development Concerns (Overseas travel and trade fairs, business/selling missions, concerns on Cruises, English as Second Language courses/schools, Dive Resorts/Programs, Medical and Health Tourism)||Office of Product and Market Developmentemail@example.com firstname.lastname@example.org email@example.com|
PRESCRIBING IMPLEMENTING GUIDELINES FOR IATF RESOLUTION NO. 12 ISSUED BY THE INTER-AGENCY TASK FORCE FOR THE MANAGEMENT OF EMERGING INFECTIOUS DISEASES ON SOCIAL DISTANCING AND BUSINESS OPERATIONS | Click here to download Source: Department of Trade and Industry | Infographics: ECCP
TRACK COVID-19 CASES IN THE PHILIPPINES THROUGH DEPARTMENT OF HEALTH'S NCOVTRACKER | Click here
Source: Department of Trade and Industry | Infographics: ECCP