November 26, 2021
ECCP at Work
The government has estimated that 13.5 million Filipinos under the 5-11 age group will receive their coronavirus shots once the Food and Drug Administration (FDA) allows emergency use of COVID-19 vaccines for younger children, the Department of Health said .The target date of the inoculation remains undetermined, however, as health authorities have yet to decide what COVID-19 vaccine brand can be given to the minors under this group.
The government continued to spend more than what it earned in October, pushing the budget deficit to P1.2 trillion from January to October, 28 percent higher than last year’s P940.58 billion, the Bureau of the Treasury (BTr) said. For October alone, the shortfall widened by five percent to P64.29 billion as spending reached P317.38 billion while revenue stood at only P253.09 billion. During the 10-month period, government spending grew by 12 percent to P3.7 trillion, while revenue rose by only six percent to P2.5 trillion.
The Philippines’ economic growth for this year is expected to exceed the government’s revised target, while the country’s previous growth trajectory is seen to return by the end of 2022, according to a report released on November 24. The Market Call, a joint research report published by First Metro Investment Corp. and the University of Asia and the Pacific, said the economic recovery appeared to gain momentum as the gross domestic growth rate bloated beyond consensus in the third quarter.
Employees of the government and the private sector who will get inoculated against COVID-19 during the three-day vaccination drive from November 29 to December 1 will not be marked absent from work. This, after President Rodrigo Duterte declared November 29 to December 1 as the “Bayanihan, Bakunahan National COVID-19 Vaccination Days” through Proclamation 1253. Authorities target to vaccinate 15 million individuals during the three-day drive.
Infrastructure spending in September went up by 25% as the government ramps up construction activities before the election ban on public works in March next year, preliminary data from the Department of Budget and Man-agement (DBM) showed. Infrastructure and other capital outlays rose to P71.2 billion in September from P56.9 billion in the same month last year. The figure is also a tad higher than the P70.9 billion posted in August 2021.
The information technology-business process management (IT-BPM) industry may be in for another decade of uninterrupted growth starting with an 8 to 12 percent growth this year. But shifts in business models are in the horizon following the disruptions posed by the pandemic. These include the need for Philippine companies to tap on the emerging trend of building satellite or smaller delivery centers in multiple locations beyond Metro Manila such as in Tier 2 or 3 cities where cost is lower and talent is abundant.
The Bangko Sentral ng Pilipinas (BSP) is set to issue more regulations particularly directed at pushing sustainability as it streamlines the so-called “green financing” in the country. Speaking at the Stratbase ADR Institute for Strategic and International Studies (ADRI) Conference on November 23, BSP Governor Benjamin Diokno said one of their key approaches to sustainable finance is to mainstream it through the issuance of enabling regulations.
The Senate is aiming to pass the proposed P5.24-trillion national budget for 2022 after ending its plenary deliberations on the measure before midnight of November 23, Senate President Vicente Sotto III said. After finishing deliberations, the Senate goes to the period of amendments where senators would put in their changes to the GAB until early next week before approving the same. To save time, senators are allowed to submit their proposed amendments instead of reciting them on the floor during session.
The Senate is expected to approve a bill extending the validity of the 2021 national budget to allow continued disbursements of funds for vital projects that were not completed due to the pandemic. Sen. Sonny Angara, who chairs the Senate committee on finance that is drafting the proposed P5.024-trillion national budget for 2022, backed the move of the House of Representatives to approve a counterpart measure to extend this year’s General Appropriations Act.
As many as 94 percent of Metro Manila’s target population are fully vaccinated against COVID-19, acting presidential spokesperson Cabinet Secretary Karlo Nograles reported on November 23. During the Palace press briefing, Nograles said that 94.04 percent or 9,193,744 of Metro Manila’s 9.8 million target individuals have completed their COVID-19 vaccine doses as of November 22. Accounting for more than 100 percent, 10,332,227 individuals have received their first dose in the capital region. Nationally, 33,847,741 individuals are fully immunized. This is 43.88 percent of the 77 million target population.
The National Capital Region (NCR) can expect a better Christmas this year as the independent OCTA Research said coronavirus disease (COVID-19) cases in the region could be at less than 100 come the holidays. In a social media post, OCTA fellow Guido David said current trend indicates that cases in Metro Manila will continue to decline by next month.
As the economy slowly reopens, the independent OCTA Research group said that the country is not expecting any COVID-19 surges soon due to high vaccination rates. There is the worry that there might be a spike in cases. But because more people are now vaccinated, especially in NCR, we will not see the surges that we saw two months back and the kinds of surges we saw in the early parts of the year. The alert level system is now being implemented nationwide, allowing more businesses to operate. The government has also granted some minors and vaccinated senior citizens permission to visit establishments.
Infrastructure and election spending will be the primary growth drivers in the last quarter of the year, according to local think tank First Metro Investment Corp. (FMIC)-University of Asia and the Pacific (UA&P) Capital Markets Research. In its latest Market Call report, the think tank said the government’s big ticket infrastructure projects are being implemented with fewer impediments. These include the MRT-7, Metro Manila Subway, and the second connector expressway between Nlex and Slex, among others.
The central bank will continue to maintain its accommodative stance as the Philippine economy is “not quite out of the woods yet,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said. The Philippines has recently seen a steep decline in the number of new coronavirus disease 2019 (COVID-19) infections, which prompted the further easing of mobility curbs. The Health department reported 975 new COVID-19 cases, bringing the active cases to 17,796 as of November 25.
Local and foreign business groups are pushing for the swift bicameral conference committee approval by the House of Representatives and Senate of a proposed measure which seeks to support the electric vehicle (EV) industry in the country. The business groups including the ECCP said in a statement on November 24 they are hopeful the ratification of the bill would be made before Congress goes on recess on Dec.15. The bill seeks to establish a policy framework for EVs and charging infrastructure.
Government, private sector urged to strengthen partnership
The declining number of fresh COVID infections is an opportunity for the government and the private sector to ramp up their partnership to revive the economy, increase international trade and encourage more foreign investments. This is the main takeaway from the second day of Stratbase ADR Institute’s Pilipinas Conference 2021 weeklong series of online sessions with the theme Philippine Trade Relations in the Pandemic Context.
The government has identified four primary concerns that will affect the country’s economic stability beyond 2022. Carlos Dominguez, secretary of the Department of Finance (DOF) said the current administration is ready to assist the new presidency during the transition period next year to address the following: prudent debt management in relation to growing the economy above six percent per year; inflation caused by global shortages; pandemic-induced inequalities; and climate change.
The most vulnerable sectors like the poor, women and school children will take longer to recover from the pandemic-induced slump even as the Philippine economy as a whole was already on the mend, the World Bank (WB) said. Toward the end of 2020 and into 2021, the economy in Indonesia and the Philippines started to recover, yet mobility remained well below prepandemic levels and below the levels of most other countries in the East Asia and Pacific region. Evidence suggests that recovery may have been slower for poorer workers in the Philippines and Indonesia
Inflation is expected to surpass the latest forecast of the Bangko Sentral ng Pilipinas for 2022 but still within the full-year target band, two international think tanks reported. As stated by Pantheon Macroeconomics senior Asia economist Miguel Chanco, near-term inflationary pressures will “remain acute.” 2022 inflation averaging higher, at 3.7%, but the headline should fall comfortably below the upper bound of the target range from July. Fitch Solutions also expects inflation to average 3.7% during the year, near the upper end of the government’s 2-4% target band for 2022.
Health Secretary Francisco Duque III is confident that the Philippine government will hit its target of 54 million fully vaccinated Filipinos by the end of the year. In an interview in Daily Tribune’s morning news program “Gising Na!”, Duque said that the nationwide simultaneous vaccination drive will play a huge part in achieving the target. The government will administer 15 million doses during the three-day vaccination drive. As of today, we are now averaging one million jabs per day, we just need to continue that.
Minors under 12 years old may not have to wait until 2022 for their COVID-19 shots, the Food and Drug Administration signalled. Speaking at a Palace briefing, FDA Director-General Eric Domingo said that it was his opinion that vaccination for children aged 5 to 11 is possible with Pfizer and Sinovac amid discussions on versions of the vaccines available to kids.
With a return of optimism, the Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI) Foundation aims to grow by 10 percent in revenues this year, according to its chairman Glenn Everett. Dan Lachica, SEIPI president, said the industry could exceed $45 billion this year, surpassing pre-pandemic level of $43.3 billion. SEiPI has upgraded the growth projection originally set at 7 percent.
The Philippines will share the inroads it has made in translating theories on addressing climate change into actionable projects on the ground with other countries, starting with the member nations of the Association of Southeast Asian Nations (Asean). The Department of Finance (DOF) stressed the move is to help fast-track adaptation and mitigation efforts meant to avert catastrophic global heating.
Several private sector organizations are appealing to the government to allow them to use the COVID-19 vaccines they bought as booster shots for their employees and their dependents. The Department of Health earlier said private companies cannot use their vaccines as extra doses, except for senior citizens and immunocompromised individuals now covered by the booster rollout. In a joint statement signed on November 23, 26 groups said they believe their appeal is reasonable, considering the country's stockpile of vaccines. The ECCP is among the signatories of the statement.
European businessmen want a revival in negotiations between the Philippines and the 27-nation European Union (EU) for a free trade deal amid a snarled global supply chain. The call comes as the pandemic put front and center the need for the Philippines to pivot to an investment-led economy as its current domestic demand-driven setup made it vulnerable to recession when COVID-19 brought global trade almost to a standstill in 2020. The Philippines and the EU first sat down for talks for free trade deal in 2016, but the negotiations were unofficially put on hold since 2017.
About 10 percent or 100,000 micro, small and medium enterprises (MSME s in the National Capital Region (NCR) have permanently closed down due to the pandemic, preliminary results of an Impact Assessment Survey of CO VID-19 on the MSME Sector showed. But Secretary Ramon Lopez of the Department of Trade and Industry (DTI ) surmised some of these have opted to tap other ventures on account of the higher registration of new businesses registered with the agency. Lopez projects unemployment rate would go back to pre-pandemic level of 5 percent by 2022 as employers resume hiring.
The proportion of plastics that are recycled in the Philippines is about 30%, with the unrecycled materials that go to waste valued at around $1 billion, the International Finance Corp. (IFC) said. IFC Country Manager Jean-Marc Abrogast said deterrents to recycling include high power costs and cheap landfill disposal fees. He said more global brands have voluntarily committed to using recycled resins in their products, increasing demand.
Remote work in combination with leisure travel is viewed as a possible new market that will help in the recovery of the travel and hospitality industries, a senior business consultant said. The work-from-anywhere setup has given rise to a new type of travel during the pandemic, according to Anthony Oundjian, managing director and senior partner at Boston Consulting Group.