July 09, 2021
The establishment of the energy virtual one-stop shop (EVOSS) Task Group, which aims to streamline the permitting process, is expected to help attract more investors to the country’s energy sector, government officials said. Under the new EO, the EVOSS Task Group’s additional obligations include the streamlining of processes, continually reviewing permitting and licensing requirements, ensuring compliance to the law, and monitoring the performance of the one-stop shop.
In an assessment report, the Asian Development Bank said the Agrarian Reform Communities Project II was unable to address delays and policy roadblocks, and “less than efficient” in using the funds. The target to implement 537 sub-projects across 19 provinces was too ambitious according to the ADB, since LGUs were only able to shoulder 10-20% of the total cost. This is far from the 50% share required of LGUs under the revised cost-sharing policy with the National Government.
Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the volume of production index, surged to 265% year on year in May. This was faster than the revised 155.6% annual increase recorded in April and a reversal of the 73.2% drop in May 2020. The May result marked the second straight month of growth in manufacturing output following the 13 straight months of contraction.
The Philippine passport has slipped deeper into the second half of the global travel freedom index this year. The country was named as the 82nd most powerful passport out of 116 nations in the 2021 Henley Passport Index released this week. Earlier this year, it was at the 77th place. For the past two years, it was in the 74th spot.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday showed that gross NPLs surged by 83% to P479.481 billion in May from P262 billion a year earlier. Bad loans also increased by 3.4% from the P463.659 billion in April. This brought the industry’s gross NPL ratio to 4.49% in May, from 2.43% during the same month last year and the 4.35% in April. The NPL ratio matched the 4.49% recorded in June 2008 and is the highest since the 4.61% in May 2008 amid the global financial crisis.
The country received a total of 1,124,100 doses of AstraZeneca COVID-19 vaccines from Japan on Thursday. Japan's donation is on top of over two million AstraZeneca vaccines from the COVAX Facility that will arrive on July 9. Co-led by the World Health Organization, Gavi, and the Coalition for Epidemic Preparedness Innovations, COVAX aims to ensure all participating countries have equitable access to COVID-19 vaccines.
The Inter-Agency Task Force for the Management of Emerging Infectious Diseases allowed local governments to require negative swab test results before fully vaccinated individuals can enter their jurisdictions, Health Secretary Francisco Duque announced Thursday night. Duque explained local chief executives can adjust their travel requirements based on their own risk assessments, and there is no need to seek permission from the IATF to implement their policies.
Exporters and logistics firms are looking at several more measures, including subsidies for a Philippine flag shipping line, contracted rates and consolidation of shipments to cope with lack of vessel space and rising freight rates, according to Michael Raeuber, head of the Infrastructure and Logistics Committee of the European Chamber of Commerce of the Philippines (ECCP). Raeuber welcomed the action of the Maritime Industry Authority to allow domestic/international trade of Philippine flag vessels under one permit while maintaining the present Cabotage protection for intra-Philippine trade which is not related to import or exports
In a joint statement, eight Philippine business groups and seven members of the Joint Foreign Chambers said the pending reforms will bolster the country’s bid to economic recovery amid the pandemic. The business groups noted that most of these bills are in advanced stages in Congress already, requiring action in either the House or Senate. The private sector organizations sent the letter to President Duterte in anticipation of his last State of the Nation Address this month. A copy was also sent to Senate President Vicente C. Sotto III and House Speaker Lord Allan Q. Velasco.
About 16 million doses will arrive in July that would include vaccines donated by Japan and US, those committed under Covax as well as shots procured by companies, vaccine czar Carlito Galvez said. He added that by end-August, the Philippines would have received a total of 47 million doses from various manufacturers. Galvez said delays in supplies are unavoidable and usually occur in the first and last weeks of the month as vaccine manufacturers prepare for deployment.
President Duterte issued on Tuesday Executive Order 144 institutionalizing the Financial Stability Coordination Council (FSCC). The FSCC executive committee will be chaired by the Bangko Sentral ng Pilipinas (BSP) Governor and its members will include the Finance Secretary, Insurance Commissioner, Philippine Deposit Insurance Corp. (PDIC), Securities and Exchange Commission (SEC) chairman and one senior official from each of the five member-agencies, who will serve as non-voting members.
The Department of Budget and Management (DBM) has released 85.1 percent of the full-year 2021 budget in the first half of the year, the agency’s data showed. According to data posted on its website, the DBM has released P3.83 trillion of the P4.5 trillion 2021 obligation program as of June 30. The remaining balance for the year is P673.05 billion.
Health Secretary Francisco Duque III said the Inter-Agency Task Force for the Management of Emerging Infectious Diseases will meet to discuss expanding the travel ban that currently covers seven countries to possibly include travelers from Indonesia and Malaysia. He said the technical advisory group of health experts will make an official recommendation to the task force whether more countries may be added, depending on the trajectory of COVID-19 cases in those affected by the highly transmissible Delta variant.
The global health body on Tuesday removed Theta or P.3 variant from the list of "variants of interest," reclassifying it as "alerts for further monitoring." It said reported cases of the P.3 variant have decreased. Cases globally are relatively low, with only a total of 269 cases reported in 14 countries — mostly in Central Visayas, it added.
Growth forecasts for the Philippines collected by Barcelona-based FocusEconomics showed below-target consensus expectations averaging 5.6 percent for 2021, mainly due to sluggish mass vaccination against COVID-19. In its latest emerging markets outlook 2021-2022 report, FocusEconomics noted that only Allianz and Capital Economics projected the Philippines’ gross domestic product (GDP) this year growing in line with the government’s downscaled 6-7 percent target range. Allianz was the most bullish with its forecast of 7.8-percent growth in 2021, while Capital Economics projected 6 percent, or the lower end of the target band.
Around 10 percent of micro, small and medium enterprises (MSMEs) have closed as of June amid the COVID-19 pandemic, according to the latest survey of the Department of Trade and Industry (DTI). Speaking at the Senate committee on trade, commerce and entrepreneurship hearing yesterday, Trade Secretary Ramon Lopez said the DTI’s survey covered 33,145 respondents. He said 46 percent of MSMEs are partially operating and 44 percent have full operations. Lopez said MSMEs also reported a decline in sales. In particular, 53.80 percent said their sales were down in June, lower than the 90.70 percent that saw sales decrease in July last year amid the pandemic.
The Department of Trade and Industry (DTI) is proposing the adoption of policies that would grant a loan moratorium, rent relief and project financing to micro, small and medium enterprises (MSMEs) and help them recover from the effects of the new coronavirus disease 2019 (COVID-19) pandemic. DTI Secretary Ramon Lopez also noted the need to continue granting support in the form of residential and commercial rent relief to small businesses. He said legislators may exercise moral suasion to encourage lessors and lessees to develop schemes that will be beneficial to both parties.
In the OECD-FAO Agricultural Outlook 2021–2030 report, it is projected that the Philippines will increase its purchases of rice, pig meat, and poultry. The report noted that with global GDP in 2030 projected to remain below pre pandemic estimates, a business-as-usual path will also make achieving the Sustainable Development Goal (SDG) 2 on zero hunger by 2030 “particularly challenging.”
In a statement, House Economic Recovery Cluster co-chairman Joey Sarte Salceda said the country must remain vigilant with inflationary pressures. According to Salceda, the Philippine cannot afford any sudden contractionary interest rate increases at the moment, as it would constrict growth prospects in this period of recovery. Second, the lawmaker said the inflation for key food items is still high, especially for meat.
A recent draft on new rules of freight forwarding aims to “upgrade the quality of services, capabilities, resources and expertise of the covered firms” so they can “meet the demands of the Philippines’s new global trade and growth on domestic trade.” The draft discusses the documentary requirements for application, qualifications of key operating officers for the company, processing of application for recognition and payment of fees, among others.
Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said the timing for the unwinding of its support measures is crucial, adding the central bank will “carry out a disengagement strategy in a way that avoids risks associated with early or late implementation.” The Philippine economy has been battered by the pandemic, with gross domestic product (GDP) shrinking by a record 9.6% in 2020. In the first quarter, GDP contracted by 4.2%. Mr. Diokno had earlier said they will only consider rate adjustments when economic recovery becomes more sustainable, which he expects to happen around the second half of 2022.
Public infrastructure spending more than doubled to P78.9 billion in May as projects went full steam ahead after they stopped last year at the height of the most stringent COVID-19 lockdown in the region. The Department of Budget and Management (DBM) data showed that expenditures on infrastructure and other capital outlays in May jumped 102.5 percent from P38.9 billion a year ago. From January to May, the amount spent on infrastructure and other capital outlays climbed 41.3 percent to P332.3 billion from P235.2 billion in the first five months of last year.
While inflation eased in June to 4.1 percent year-on-year or the lowest monthly rate so far in 2021, the normalizing global oil prices pose upside risks in the second half and would likely keep overall price hikes above the central bank’s target. National Statistician Dennis Mapa attributed the lower rate of increases in the prices of basic commodities last month mainly to base effects as transport inflation slowed from a year ago, when tricycle and jeepney fares soared due to the stringent COVID-19 quarantine measures that limited both the supply of and demand for public transportation.
Six areas outside Metro Manila were tagged by independent research group OCTA as "high-risk" for COVID-19. These are Davao City, Bacolod, Iloilo City, General Santos City, Baguio City, and Tagum City. Davao City continued to record the highest number of new cases per day, averaging at 303 for the week of June 29 to July 5, OCTA said in its monitoring report. Meanwhile, Bacolod and Iloilo City logged new daily case averages of 113 and 111, respectively. General Santos came in fourth with an average of 76 new daily cases.
The declining number of COVID-19 cases in the Philippines augurs well for economic recovery and the return of jobs lost amid last year’s pandemic-induced steep recession. But three think tanks on Monday cautioned the government against letting down its guard against the virus, especially as the more contagious Delta variant forced renewed lockdowns, which hurt neighboring economies.
The Department of Trade and Industry (DTI) said it looks forward to the ratification of the Regional Comprehensive Economic Partnership (RCEP) as this will enhance the participation of small businesses in global value chains. Trade Secretary Ramon Lopez said the mega trade deal will strengthen the micro, small and medium enterprises’ (MSMEs) access to global markets
An energy law mandating building owners to save power more efficiently will soon usher in marked improvements in the use of this finite resource, according to Leechiu Property Consultants’ (LPC) Executive Director Lylah Ledonio. She is also chair of the Real Estate Committee of the European Chamber of Commerce of the Philippines (ECCP). At a recent ECCP forum sponsored by LPC for building owners, Director Patrick T. Aquino of the DOE’s Energy Utilization Management Bureau, also pointed out that big energy users such as buildings classified as designated establishments are now likewise required to monitor monthly consumption, set and achieve annual reduction targets which will then be verified through an energy audit to be submitted to the Energy Department every three years.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said that the operationalization of the Financial Institutions Strategic Transfer or FIST Act is expected to reduce banks’ non-performing loan (NPL) ratio by 0.6 to 5.8 percentage points (pp) starting this year. Over a spread of four years or until 2025, NPL ratio under FIST Act will be brought down by as much as 5.8 pp as the banks will be able to manage NPL through the transfer or sale of non-performing assets (NPA) to FIST Corporations, Special Purpose Vehicles and eligible individuals.