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ECCP@Work Featured News Articles | April 08, 2022

April 08, 2022

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ECCP at Work

World Bank projects 5.7% PH growth for 2022

The World Bank has slightly downgraded its growth forecast for the Philippines this year as it took into account the impact of the conflict between Russia and Ukraine. According to the World Bank’s East Asia and Pacific Economic Update released yesterday, the economic forecast for the Philippines this year has been revised downwards to a growth of 5.7 percent from the previous projection of 5.8 percent in October last year. “It is a very slight reduction in the Philippines, and the reason for it is that, first of all, our (previous) estimate was already quite conservative… so that downgrade is small. The reason for the downgrade is primarily the war in Ukraine,” Aaditya Mattoo, World Bank East Asia and Pacific chief economist, said in a virtual briefing yesterday. The report also showed that in a low case scenario, if global conditions worsen and national policy responses are weak, growth could slow to 4.9 percent for the Philippines.

Unemployed Filipinos slightly up at 3.13 million in February

An estimated 3.13 million Filipinos were out of work in February, data from the Philippine Statistics Authority released Wednesday show. The latest tally of persons aged 15 and up without jobs slightly rose from 2.93 million in January. The national joblessness rate stood at 6.4% in February, similar to the month prior and also the lowest since the COVID-19 pandemic began. The number of persons in the labor force rose to 48.61 million in February or a participation rate of 63.8%, up by over 2.6 million from January. National Statistician Dennis Mapa said not everyone who participated got jobs.

P450B business leads in pipeline: DTI

The Philippines expects 250 investment leads from foreign companies in a wide range of sectors, pushed by the economic reforms undertaken by the government, including the passage of the amendments to the Public Service Act (PSA) and the Foreign Investments Act. Trade Secretary Ramon Lopez told reporters barring any surge, some of these leads will be finalized starting this year. “Many of these projects were just postponed or delayed due to the Delta and Omicron surges that prevented the investors from visiting the sites,” Lopez said.

Gov’t to pursue more investment deals

The Philippines will push for the clinching of Investment Promotion and Protection Agreements (IPPAs) with three countries while anticipating the signing soon of its free trade agreement (FTA) with a fourth one. For the European Union’s (EU) Generalized System of Preferences Plus, Lopez said the Philippines continues to actively engage the EU in the country’s compliance to the 27 requirements to continue enjoying the duty-free privileges. He said the country’s utilization of the EU GSP Plus has gone up from 72 percent of all the products eligible for export at zero duty to 75 percent. Lopez also remains hopeful Senate would tackle the ratification of the Philippines’ accession to the Regional Comprehensive Economic Partnership (RCEP) when Congress resumes session on May 23.

Proposed shift to ‘Alert Level 0’ not yet doable

It is not the right time to order the further de-escalation of alert level status in the country, President Rodrigo Duterte said on Tuesday.In his prerecorded Talk to the People, Duterte thumbed down the proposed shift to “Alert Level 0,” saying the recommendation is not yet doable since there are still cases of coronavirus disease 2019 (Covid-19) in the country. “Ang (The) restriction is… You know, lahat gusto halos balik na sa zero or lahat one. Hindi puwede kasi may mga lugar na meron pa (You know, many want to implement [Alert Level] 0 or 1. That’s… That cannot be done because there are still areas [with Covid-19) cases,” Duterte said. Duterte issued the statement as he warned of a possible resurgence of Covid-19 infections in the country.

BSP ready for preemptive action to tame inflation risks — Diokno

The Philippine central bank is ready to take preemptive action if inflation expectations are at risk of being “disanchored,” its governor said on Tuesday. “We are prepared to take preemptive action as needed if inflation expectations become at risk or disanchored,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said at the Philippine Economic Briefing held in Pasay City on Tuesday. He said they continue to be patient and will consider a rate hike adjustment by the second half of 2022. Mr. Diokno said March consumer price index (CPI) data suggest that inflation will likely be elevated in the coming months. Inflation jumped to 4% in March, near the upper end of the BSP’s projected range of 3.3-4.1% for the month and still within the 2-4% target band for the year.

Budget gap seen to narrow this year as economy recovers ‘strongly’

The budget deficit is expected to start narrowing this year, with borrowings likely to decline and revenues seen to rise as the economy rebounds from the coronavirus pandemic, Finance Secretary Carlos G. Dominguez III said at the Philippine Economic Briefing on Tuesday. For 2022, Mr. Dominguez said the budget deficit is expected to hit P1.65 trillion, slightly lower than 2021’s actual deficit of P1.67 trillion. “Last year, our revenue collection was already 5% higher than in 2020, signaling a return to robust economic activity. This year, we expect to bring back our revenue collections to pre-pandemic levels,” he said. Domestic and external borrowings are also expected to drop to P1.65 trillion and P560 billion respectively, from local and foreign borrowings of P1.98 trillion and P568 billion respectively in 2021. Mr. Dominguez said the Philippine economy is now recovering “strongly,” but has to deal with volatility arising from the Russia-Ukraine war.

Government infrastructure program lifted tourism sector-economic managers

Government economic managers hailed the Duterte administration’s “Build, Build, Build” infrastructure program as one of the keys in boosting tourism activities in the country. Tourism Secretary Bernadette Romulo Puyat said in a video message at the Philippine Economic Briefing 2022 held at the Philippine International Convention Center, “The Philippines is blessed with a highly diverse array of tourist attractions and spots. But without the necessary infrastructure, many of these spaces would be out of reach to our travelers.” The Department of Tourism (DOT) has a convergence program with both the Department of Public Highways and Department of Transportation (DOTr), which helps identify vital roads and bridges needed to connect tourism destinations, as well as airports and seaports, to help attract tourists to key destinations outside of Metro Manila.

ADB keeps Philippine growth outlook as war offset gains from reopening

The Asian Development Bank maintained its growth outlook on the Philippines as global headwinds, such as Russia's continued military occupation of Ukraine, offset some benefits from loosening pandemic curbs. In its flagship “Asian Development Outlook (ADO) 2022” report released Wednesday, the Manila-based lender kept its growth projection for its host country at 6% this year. If realized, it would fall below the Duterte administration's 7-9% growth target for 2022. For 2023, the ADB expects the Philippines’ gross domestic product to expand 6.3% year-on-year. The government pegs GDP growth at 6-7% from 2023 to 2024.

PSA: February 2022 unemployment rate at 6.4%, over 3 million Filipinos jobless

More than three million Filipinos are jobless as the February 2022 unemployment rate remained at 6.4 percent, the Philippine Statistics Authority (PSA) reported on Thursday. The PSA said the January 2022 unemployment rate was also at 6.4 percent. February 2022’s unemployment rate, however, was lower than the unemployment rate of 8.8 percent in the same month in 2021, when 4.19 million Filipinos were unemployed. “In terms of magnitude, this is translated to 3.13 million unemployed individuals 15 years old and over. This is lower by 1.06 million unemployed Filipinos compared to February 2021,” the PSA said in a statement. 

LGUs borrowed P12.8B in Q1 for infra

Ahead of the election ban on starting new public projects, local governments borrowed P12.8 billion to fund their mostly infrastructure outlays in the first quarter, the latest Department of Finance (DOF) data on Wednesday showed. The DOF’s Bureau of Local Government Finance (BLGF) issued 73 certificates of net debt service ceiling and borrowing capacity from January to March. These certifications are documents that local government units (LGUs) must submit to government financial institutions to prove that they can repay their borrowings.

Business chambers support booster requirement by June

Business chambers declared their support for a requirement to show proof of vaccination booster shots by June as a condition for entry into most establishments, Presidential Adviser for Entrepreneurship Jose Ma. A. Concepcion III said. He added that airlines and restaurants would like to offer various incentives to customers who have received coronavirus disease 2019 (COVID-19) booster shots. Other groups are also studying the proposal.

PHL central bank addresses FATF recommendations vs financial crimes

The Philippine central bank is focusing on showcasing tighter regulations on registration of money transfer services and the effectiveness of targeted financial sanctions, as it aims to exit the “gray list” of the Financial Action Task Force (FATF) by next year. The country is hoping to convince the FATF it is effectively implementing tighter measures against money laundering and counter-terrorism financing, after the Philippines was included in the gray list in June 2021.

Fitch Solutions bullish on PHL power industry decarbonization 

Fitch Solutions Country Risk and Industry Research said policies adopted by the Department of Energy (DoE) are poised to accelerate the decarbonization of the power industry by raising investor interest in renewable energy (RE). The positive outlook for the renewables sector was driven by changes to the regulatory environment such as the DoE’s Renewable Portfolio Standard (RPS) and the Green Energy Option Program (GEOP). Fitch Solutions also noted a significant expansion of more than 10 times in the renewables project pipeline compared to the level recorded in March 2021. Pending projects include those participating in the DoE tender for 2 gigawatts of renewable energy for the Luzon, the Visayas, and Mindanao. Under RPS, power distribution utilities, as well as electric cooperatives and retail electricity suppliers, are required to source portion of their energy supply from RE.

Duterte hopes Congress will rectify vetoed provisions of security of tenure bill   

President Rodrigo Duterte is hoping that the Congress would rectify the vetoed provisions of the security of tenure bill, Malacañang said. Despite promising the end of labor contractualization during his presidential campaign, Duterte vetoed the security tenure bill in 2019. “[T]he Chief Executive explained that the version submitted by Congress ‘unduly broadens the scope and definition of prohibited labor-only contracting, effectively proscribing forms of contractualization that are not particularly unfavorable to employees involved,’” acting presidential spokesperson Martin Andanar said in a statement. “The President hopes that Congress would rectify the vetoed provisions as he remains committed to eradicating all forms of abusive employment practices and protecting the workers’ right to security of tenure,” he added, noting that Duterte signed Executive Order No. 51 which prohibits illegal labor contracting and subcontracting but still allows some forms of contractualization.

Inflation threatens PH’s ’22 growth, warns ADB

The reopening of the economy amid the decline in COVID-19 infections would grow the Philippines’ gross domestic product (GDP) by 6 percent this year, although high consumer prices caused by Russia’s invasion of Ukraine posed a downside risk, the Asian Development Bank (ADB) said on Wednesday. The Manila-based multilateral lender’s Asian Development Outlook 2022 report showed an unchanged GDP growth forecast for the Philippines this year compared with its projection last December, remaining below the government’s 7-9 percent target range.

Gov’t says PH GDP grew 5.7 percent in 2021 

The Philippine economy grew by a slightly faster 5.7 percent in 2021, while output of the country’s factories benefited from less stringent pandemic restrictions in February and posted higher growth, the governmentthe reported on Thursday (April 7). The Philippine Statistics Authority (PSA) said gross domestic product (GDP) during  fourth quarter of 2021 expanded at a slightly higher rate of 7.8 percent from the 7.7 percent growth announced last January. Full-year GDP growth was also adjusted upward from 5.6 percent. The PSA will next report on 2022 first-quarter GDP performance on May 12. 

Nationwide shift to Alert Level 1 to boost employment: NEDA

Increased mobility and easing of restrictions led to significant employment creation in February 2022, the National Economic and Development Authority (NEDA) said. The Philippine Statistics Authority reported Thursday that the country’s unemployment rate in February was maintained at 6.4 percent, the lowest since the start of the coronavirus disease 2019 (Covid-19) pandemic. At the same time, the labor force participation rate increased from 60.5 percent in January to 63.8 percent in February which led to a net employment creation of 2.5 million over the same period. This brings the country’s employment to 2.9 million above the pre-pandemic level. The quality of jobs also improved as seen in the decline in the underemployment rate from 14.9 percent to 14.0 percent.

Tax reforms boost PH's position in Asia
Game-changing reforms instituted by the Duterte administration elevated the country among the leaders in Asia and allowed it to have the financial capacity to weather the virus-induced pandemic. These reforms include the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, amendments to the Retail Trade Liberalization Act (RTLA), Public Service Act (PSA), and Foreign Investment Act (FIA). “Had we not pursued them on time, the impact of the pandemic would have been worse. Our 2020 GDP (gross domestic product) would have plunged deeper by 13.3 percent instead of 9.6 percent. This just proves that in any battle or emergency, preparation is always the best strategy,” Finance Secretary Carlos Dominguez III said in his speech during the Philippine economic briefing on Tuesday.

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