September 07, 2021
Prices of basic goods climbed at a faster pace in August with food and transport costs leading the rise, based on the Philippine Statistics Authority data. Inflation stood at 4.9% during the month, announced Philippine Statistics Authority chief Dennis Mapa in a virtual briefing. This is compared to rates of 4% in July this year — the first time it fell within the Bangko Sentral ng Pilipinas' target 2-4% band for 2021 — and 2.4% in August last year. The BSP said higher prices for LPG, Meralco electricity and key food items along with a weaker peso are the primary sources of upward price pressures for August.
The Philippines appears to be showing more signs of “economic scarring” due to the prolonged pandemic, making it more crucial for the government to ramp up fiscal spending, an economist said. ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that he now expects the country’s gross domestic product (GDP) to grow by 3.8% in 2021, below the government’s 4-5% full-year target. Additionally, Mr. Mapa said the prolonged closure of schools and shift to online learning will have an impact on the country’s future workforce.
Through viva voce voting, lawmakers approved House Bill (HB) 8942 or the Ease of Paying Taxes (EOPT) Act, which aims to simplify tax compliance procedures by segmenting taxpayers and better tailoring processes, enhance the portability of tax transactions and legislate the Taxpayer’s Bill of Rights. Key benefits of the EOPT include allowing taxpayers to file for a Tax Identification Number offsite, the removal of the required annual BIR registration and harmonization of venue rules to allow fully-online filings with the bureau.
BSP Governor Benjamin E. Diokno said that the passage of the FCPA will have “far-reaching benefits” to consumers especially amid the rise in digital transactions brought about by the pandemic. Under the proposed FCPA—which is pending Senate deliberation in the Committee on Banks, Financial Institutions, and Currencies—financial regulators may issue a cease-and-desist order without the need for prior hearing in unfair collection practices deemed as threats or harassment against a financial consumer.
The Japan Credit Rating Agency (JCR) affirmed the Philippine sovereign rating at “A-,” citing the economy’s resilience as evidenced by its relatively low debt and unimpaired “fiscal soundness.” The debt watcher also kept the “stable” outlook on the rating, which means this will likely be maintained in the next 12 to 18 months. This comes 15 months since the debt watcher upgraded the country’s rating to “A-” from “BBB+” in June 2020.
The National Capital Region will ease to general community quarantine on Sept. 8-30 as it is set to pilot test localized lockdowns, Malacañang said. However, the COVID-19 Inter-Agency Task Force has yet to provide guidelines on the so-called granular lockdown, presidential spokesperson Harry Roque said. Roque said Duterte approved granular lockdown "in principle." Roque said the granular lockdowns can cover a whole district, barangay, street, or even just a specific household.
During the Energy Smart Forum organized by the European Chamber of Commerce of the Philippines (ECCP), DOE Undersecretary Felix William Fuentebella said relaxing foreign ownership in solar and wind projects was looked into by the National Renewable Energy Board (NREB) and this may need a new law to back it up. Under the Regalian doctrine, all lands of public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. Foreign investors have been citing the challenge of foreign ownership in the renewable energy space.
Investors from Europe are counting on the passage of key economic reforms before the 2022 elections, the European Chamber of Commerce of the Philippines (ECCP) said. In an interview with CNN Philippines' The Exchange, ECCP President Lars Wittig particularly cited bills amending the Public Services Act, Foreign Investments Act, and Retail Trade Liberalization Act. The ECCP chief also emphasized the importance of promoting more competition and better variety of services among the likes of telecommunications, energy, and transportation in the country.
According to the latest cash operations report posted on the BTr website, the government’s gross borrowings in January to July totaled to P2.27 trillion, up versus the P1.86 trillion raised a year ago. Gross domestic borrowings accounted for the bigger chunk amounting to P1.83 trillion, jumping by 32.85 percent from the year ago level of P1.38 trillion. Of the said amount, P463.32 billion came from the retail treasury bonds issued in March. The data also showed that P540 billion was accounted for by the reavailment of the short-term loan facility from the Bangko Sentral ng Pilipinas in January.
Sen. Richard Gordon told the general membership meeting of the Philippine Chamber of Commerce and Industry last week the country has to catch up with its neighbors in Asean in attracting FDIs as it has become a laggard due to its low rankings in competitiveness and in ease of doing business. In the 2020 Ease of Doing Business, the Philippines ranked 95th while Singapore is second, Malaysia, 12th; Thailand, 21st and; Vietnam, 70th,” Gordon said. Gordon also lamented that FDIs by expanding and diversifying companies go to Vietnam and Indonesia. Gordon said even before the pandemic, net FDIs to the Philippines were going down at $10.2 billion in 2017, $ 9.9 billion in 2018; $ 8.6 billion in 2019 and; $6.5 billion last year.
Latest preliminary data obtained by BusinessMirror showed that the sin tax collection of the Bureau of Internal Revenue and Bureau of Customs from January to July this year posted a double-digit growth of 25.5 percent from P138 billion in the same period in 2020 to P173.1 billion as of end-July as lockdown restrictions were eased compared to a year ago. Most of the excise taxes collected during the seven-month period came from tobacco products at P104.2 billion, reflecting a 34-percent spike from last year’s P77.7 billion. Alcohol came next to tobacco products, yielding for the government P48.4 billion. This is also higher by 27 percent from P38.1 billion in the same period in 2020.
Inflation likely quickened in August and settled above the central bank’s official target range anew, as a weaker peso pushed food prices up. 6 analysts yielded a median estimate of 4.4% for August inflation, nearer the lower end of the 4.1% to 4.9% estimate given by the Bangko Sentral ng Pilipinas. If realized, headline inflation would again breach the central bank’s 2-4% annual target range after slowing to 4% in July. It will be the quickest in three months or since the 4.5% in May, and much faster than the 2.4% in August 2020. The Philippine Statistics Authority will release August inflation data on Sept 7.
Health Undersecretary Maria Rosario Vergeire said experts have raised the government's herd immunity target to "up to 90%" because of the emergence of new variants, which have lowered the efficacy of the available COVID-19 vaccines. The Philippines has detected thousands of cases of all four VOCs: Alpha, Beta, Gamma, and the feared Delta - now the most dominant variant in the country. Over 33 million coronavirus shots have been administered to Filipinos, with almost 14 million now fully vaccinated against the coronavirus.
The economic recovery of the Philippines and rest of Southeast Asia may be pushed back to 2023, amid the threat of new and more contagious coronavirus disease 2019 (COVID-19) variants, Oxford Economics said. Oxford Economics said the new wave of infections which resulted to tighter restriction measures is expected to hurt third quarter growth in the Philippines and across the region. The research firm expects the Philippine economy to grow by 4.3% for the July to September period. Metro Manila was placed under the most stringent form of lockdown for two weeks in August, and is currently under modified enhanced community quarantine until Sept. 7.
Foreign nationals who want to work in the country for more than six months can now apply for a permit via their prospective employers based in the Philippines. The Department of Labor and Employment (DOLE) made the announcement on its website, saying the work visas may be applied for at the Philippine Consulate in the country where the foreigner lives. AEP is the Alien Employment Permit, while COE stands for Certificate of Exemption/Exclusion, both necessary documents that foreign workers in the Philippines must submit.
The government’s pandemic task force has approved the implementation of a granular lockdown system starting Sept. 8 with the National Capital Region (NCR) as pilot area, a Cabinet official said. DTI Secretary Lopez said guidelines for the granular lockdown system are being finalized and would be released before Sept. 7. Under the setup, only small pockets or areas with transmission would be placed under a hard lockdown and at different levels – from one to four, with four being the most stringent.
The Philippines will lift the travel ban imposed on 10 countries starting September 6 even as it continued to battle a spike of infections due to the more virulent Delta variant. President Rodrigo Duterte approved the recommendation of the Inter-Agency Task Force (IATF) ending the travel ban covering India, Pakistan, Bangladesh, Sri Lanka, Nepal, United Arab Emirates, Oman, Thailand, Malaysia, and Indonesia starting Sept. 6, said his spokesperson Harry Roque. The travel ban was implemented in some of the countries since early May, which aimed to prevent the entry of the more transmissible variant that first emerged from India. It has since been extended and expanded to more countries multiple times.