June 17, 2022
The Philippines climbed four spots in an annual global competitiveness report by Switzerland-based International Institute for Management Development (IMD), due to the economy’s improved performance. IMD’s 2022 World Competitiveness Yearbook ranked the Philippines 48th out of 63 economies, from the 52nd spot out of 64 economies in 2021. This was the Philippines’ highest ranking in two years or since placing 45th in 2020. However, the country continued to lag behind its neighbors, placing 13th among the 14 Asia-Pacific economies in the index for the fifth straight year.
T-bill rates rose across-the-board on Monday (June 13) as local creditors sought higher yields ahead of the anticipated new round of aggressive interest rate hikes by central banks here and abroad. In all, the Bureau of the Treasury (BTr) borrowed P14 billion from the domestic debt market through short-dated bills, short of the P15 billion it wanted to raise.
During the three years after the government liberalized rice trade, more than one million rice farmers received a total of over P8.2 billion in cash aid to ease the pain inflicted by the influx of imports, the Department of Finance (DOF) said on Monday (June 13). Citing a Department of Agriculture (DA) report, the DOF said the government financial institutions (GFIs) Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank) facilitated the release of direct and unconditional cash aid from 2019 to 2021.
Another round of big-time increases in fuel prices will take place starting Tuesday, oil companies announced. Shell, Cleanfuel, SeaOil, and Caltex will jack up the prices of their gasoline by P2.15 per liter and diesel by P4.30 per liter, as the cost of kerosene will also inflate by 4.85 per liter from June 14.
The Asian Development Bank (ADB) will continue supporting the Philippine government’s “Build, Build, Build” program under the administration of President-elect Ferdinand “Bongbong” Marcos Jr. ADB President Masatsugu Asakawa said this Monday as he met with Marcos Jr. at the president-elect’s headquarters in Mandaluyong City.
World Trade Organization chief Ngozi Okonjo-Iweala expressed cautious optimism on Sunday that more than 100 trade ministers meeting in Geneva would achieve one or two global deals this week, but warned the path there would be bumpy and rocky. The director-general from Nigeria said the world had changed since the WTO’s last ministerial conference nearly five years ago.
The Philippines still has the lowest ratio of foreign debt against domestic output despite posting the third largest expansion in the external debt ratio among five Southeast Asian nations. In a report, Department of Finance chief economist Gil Beltran said the Philippines has the lowest external debt as a ratio of gross domestic product (GDP) at 27 percent among ASEAN economies in 2021. “In Southeast Asia, the external debt-to-GDP ratio of the Philippines remains the lowest among five ASEAN countries,” he said.
STATE-run Philippine Health Insurance Corp. (PhilHealth) said it will no longer collect the employees’ share or half of their 1-percent premium rate differential from January to May this year if they have resigned, separated or retired from their company during the period. Speaking before a virtual forum last Monday, PhilHealth Division Chief of the Employed Segment Jennifer F. Enriquez said only the employers of these employees at that time are required to pay their share in the rate differential for the covered months.
IN addition to the online business permit application, business owners can now also request and pay for their business tax assessment without making a trip to the city hall through the QC E-Services platform. Mayor Ma. Josefina “Joy” Belmonte said this move is part of the streamlining efforts of the city along with the online business permit application, which was previously launched in October 2020.
THE Philippines borrowed 2.34-billion renminbi (about P17.39 billion or $362 million) from China to fund the construction of a 2-way, 4-lane bridge expected to cut travel time from Davao City and the City of Samal in Mindanao. The concessional loan for the Samal Island-Davao City Connector (SIDC) project is also the first renminbi-denominated loan secured from China under the Duterte administration.
THE Bureau of the Treasury settled to partially award P19.55 billion of its P35 billion reissued 7-year Treasury Bonds offering as investors continued to demand higher yields on the back of rising consumer prices.
With a remaining term of 6 years and 11 months, the security capped at an average rate of 6.74 percent, still higher than the comparable secondary market benchmark rates.
A slowing Chinese economy and the stringent “zero COVID-19” policy on the mainland risk economic recovery in Asean-4, although the think tank Japan Center for Economic Research (JCER) kept its 2022 growth forecast for the Philippines at 7.1 percent—the highest in the region. “The year-on-year growth rate of Asean-4’s real gross domestic product (GDP) increased from 4.4 percent in the fourth quarter of 2021 to 4.9 percent in the first quarter of 2022 due to firm private consumption. Private consumption is expected to remain robust as people’s mobility improves with the relaxation of COVID-19-related restrictions in and after the second quarter,” JCER said in a report on Tuesday (June 14). Besides the Philippines, Indonesia, Malaysia and Thailand belonged to JCER’s Asean-4 grouping.
The Japan International Cooperation Agency (JICA) and the National Economic and Development Authority (NEDA) signed a 1.8 billion-Japanese yen grant agreement to further promote and stabilize the peace process in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) through urgent reconstruction of the Provincial/City Manpower and Development Center (PCMD) in Marawi City and improvement of other socioeconomic infrastructures. The grant project Programme for the Urgent Improvement of Socioeconomic Infrastructure in Bangsamoro Region will also include improving the Regional Manpower Training Center in the Municipality of Sultan Kudarat and Basilan as well as improving farm-to-market roads in some barangays in conflict-affected areas.
Philippine Airlines (PAL) and Cebu Pacific (CEB) are ramping up their international operations this July. In a statement, PAL said it will resume flights between Manila and Denpasar Bali, Indonesia starting July 1. From July 1, PAL will fly thrice weekly services between Manila and Bali’s Ngurah Rai International Airport. The Bali to Manila flights also operate three times a week starting July 2, every Monday, Thursday and Saturday. PAL will offer two additional weekly flights from August 1, increasing frequencies to five times weekly, before ramping up to daily flights by October 4.
Manila’s startup ecosystem value rose 259 percent to $2.1 billion in 2022 from $584 million last year, a global report showed. Manila also landed in the top 20 global systems and top 10 in affordable talent in Asian ecosystem. The Startup Genome’s Global Startup Ecosystem Report (GSER) 2022 released at the London Tech Week yesterday showed total early-stage funding in Manila increased to $292 million this year from $101 million last year. The report said fintech and e-commerce also remain the country’s top-performing sectors due to their density of talent, support resources, and startup activity.
Nestlé Philippines is pushing for the signing into law of the consolidated legislation on Extended Producer Responsibility (EPR) for plastic waste before President Duterte ends his term at the end of the month. “EPR’s enactment into law will be a major step in building a waste-free future and a circular economy,” said Kais Marzouki, Nestle Philippines chairman and chief executive officer, in a statement. The legislation defines EPR as the environmental policy approach and practice that requires producers to be environmentally responsible throughout the life cycle of a product, especially its post-consumer or end-of-life stage. Coverage will encompass large enterprises.
The United Nations on Monday begged world trade ministers meeting at the WTO not to impose export restrictions on food for humanitarian purposes, amid a food security crisis. The UN’s human rights chief Michelle Bachelet and its trade and development head Rebeca Grynspan said Russia’s war in Ukraine was increasing the risk of hunger and famine for tens of millions of people who are already food insecure or approaching food insecurity. Countries meeting at the World Trade Organization’s ministerial conference in Geneva this week are trying to reach a consensus position on food security.
PRESIDENT-ELECT Ferdinand R. Marcos, Jr. on Wednesday discussed energy security, foreign investments and the impact of global conflicts during separate meetings with envoys from Norway, Finland, Hungary, Romania and South Africa, his office said in a statement. He met with Norway Chargé d’Affaires Bjorn Jahnsen, Finland Ambassador Juha Markus Pyykko, Hungarian Ambassador Titanilla Toth, Romanian Ambassador Raduta Dana Matache and South African Ambassador Bartinah Ntombizodwa Radebe-Netshitenzhe.
THE Trade department said on Wednesday that the Philippines is ready to join the coalition to be formed by the members of the World Trade Organization (WTO) working to address the impact of climate change. Trade Undersecretary Ceferino S. Rodolfo represented the Philippines at a mini ministerial meeting on climate change in Geneva on June 13, the Department of Trade and Industry (DTI) said in a statement. The meeting was held on the sidelines of the 12th WTO Ministerial Conference, which took place from June 12 to 15, in which ministers reviewed the functioning of the multilateral trading system. “During the meeting, ministers committed to strengthen engagement and dialogue with a view to creating a Coalition of Trade Ministers to address climate change,” the DTI said.
Mr. Rodolfo said the Philippines, a climate vulnerable country, “supports the vision of a coalition of Trade Ministers to respond to climate change and supports revitalizing plurilateral engagement on environmental goods and services that builds on work in other fora like APEC (Asia-Pacific Economic Cooperation).”
THE PHILIPPINE central bank is likely to raise its key interest rate at its next two meetings to curb inflation, but the pace of subsequent tightening will be gradual as its incoming chief ruled out hikes bigger than 25 basis points (bps). “We have already signaled that it’s a sure thing that we will raise policy rates next week (June 23) and that we’ll likely to follow that up with a policy rate increase by August,” incoming Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said during a virtual roundtable discussion with BusinessWorld editors on Tuesday.
THE PHILIPPINE automotive industry is confident that recovery is underway after vehicle sales rose by 19.5% in May. Vehicle sales stood at 26,370 units in May, compared with 22,062 units sold in the same period in 2021, a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed.
Majority of mining operations in the Philippines should undergo reforms in order to stimulate socioeconomic development and ensure environmental protection as only four firms have shown an excellent benchmark on the extractive industry.
Based on the synthesis of the Mining Industry.
Coordinating Council (MICC)’s review of large-scale metallic mining operations in the Philippines released by the National Economic and Development Authority (NEDA) yesterday, most of the mining operations would need either minor or major reforms to guarantee compliance with existing laws and regulations. The MICC review was conducted in two phases and covered a total of 45 large-scale metallic mining operations. A panel of experts identified by NEDA, which sits as MICC Secretariat, led the review.
Central Luzon is being considered as a manufacturing and logistics hub, according to the Department of Trade and Industry (DTI). DTI Region 3 Regional Director Leonila T. Baluyut said in a statement on Monday that Central Luzon has many industrial assets in place that can support such a development strategy. “Central Luzon has the most number of provinces with plenty of growth opportunities, as Clark in Pampanga has an international airport, Bataan has the Freeport area, (Tarlac has) Luisita Park,” Ms. Baluyut said. Ms. Baluyut added that the region can stake advantage of Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, and the amendments made to liberalize the Foreign Investments Act, the Public Service Act, and the Retail Trade Liberalization Act. Separately, Board of Investments Director for Domestic Investments Promotion Maria Rosario J. Dominguez said that competition has increased as the economy continues to recover from the pandemic.
While global foreign direct investment (FDI) inflows recovered in 2021, an uncertain outlook is seen this year as the Russia-Ukraine war affected the business and investment climate, according to the United Nations Conference on Trade and Development (UNCTAD). In its World Investment Report 2022, UNCTAD said global FDI flows jumped 64 percent to $1.58 trillion last year, coming from a low base of $963 million in 2020. UNCTAD attributed the increase in momentum from booming merger and acquisition (M&A) activity and rapid growth in international project finance due to loose financing and major infrastructure stimulus packages.
The Department of Health underscored that everyone should “be mindful” that continuing increases in COVID-19 cases “might lead to escalation of the alert level.” The Department of Health (DOH) is not discounting the possibility of escalating the alert level in the National Capital Region if the number of COVID-19 cases in the NCR continues to increase. In a statement, the DOH said on Monday, June 13, there are parameters for COVID that are closely observed in the agency’s deciding the appropriate alert level status in an area.
The tourism sector contributed more to the Philippine economy in 2021 compared to the year prior, but it still has a long way to go before returning to pre-pandemic level, Philippine Statistics Authority data released Thursday show. The Tourism Direct Gross Value Added (TDGVA) to national economic output was estimated at 5.2%, or around ₱1 trillion. This is slightly up than 2020’s TDGVA, which was 5.1% of gross domestic product, or ₱917.2 billion. However, last year’s figures still pale compare to the ₱2.5 billion, or 12.9% of GDP it tallied in 2019, the year before the global health crisis hit. The PSA reported that internal tourism expenditure, which consists of inbound and domestic tourism spending, rose 16.3% to ₱810.12 billion last year.
Metro Manila remains under low COVID-19 risk classification, the Department of Health insisted on Thursday, refuting OCTA Research's remark that the capital region has escalated to moderate risk. DOH said that for an area to be classified under moderate risk, there should be a positive two-week growth rate and the average daily attack rate (ADAR) should be at least an average of six cases per day per 100,000 population or at least 818 daily cases sustained for two weeks.
ADAR refers to the average number of new infections over a two-week period divided by an area's population. OCTA told CNN Philippines on Thursday that the ADAR is currently at 0.99 and expected to reach 1 later in the day. DOH said that while NCR shows a positive two-week growth rate, its ADAR is still below 6 at less than 1 case per 100k population. "NCR would require at least 818 cases daily for two weeks to reach an ADAR of 6 cases per 100k population," it said in a statement.
Information technology (IT) spending in the Philippines is expected to reach $12.3 billion in 2025 with focus on cloud-based and data center services, according to International Data Corp. (IDC). IDC data showed IT spending in the country will increase by 32 percent from $9.35 billion in 2020. In a virtual media briefing, Sudev Bangah, IDC managing director for Asean region, said IT spending in Asean countries, including Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, could grow at a compound annual growth rate (CAGR) of 6.3 percent from $64.7 billion in 2020 to $88.7 billion in 2025. Bangah added the IT spending is focused on cloud-based and data center services, but this is expected to double if fixed line, mobile and telecommunications spending will be included.
The Civil Aviation Authority of the Philippines (CAAP) yesterday launched an online platform to streamline the issuance of permits, licenses and certificates for the construction of telecom tower infrastructures. CAAP said in coordination with the Anti-Red Tape Authority (ARTA) and the Department of Information and Communications Technology, it continues to improve the height clearance permit (HCP) application process for stakeholders. During the launch, the agency conducted a simulation of the map of CAAP critical areas, which will serve as a guide for stakeholders in relation to their application for HCP, prior to submitting their requirements.
The Philippines expressed its support for the extension of the moratorium on the imposition of customs duties on electronic transmissions until the next ministerial conference of the World Trade Organization (WTO), recognizing the importance of e-commerce in facilitating cross-border trade in goods and services, At the WTO ministerial conference in Geneva, the Philippines co-sponsored the draft ministerial decision seeking to reinvigorate the Electronic Commerce Work Programme citing e-commerce’s role in the global post-pandemic recovery.
After the US Fed raised its benchmark rate by 75 basis points, the Bangko Sentral ng Pilipinas (BSP) is expected to respond with a 50-basis-point rate hike to protect the peso from the pressures of monetary tightening abroad. Ayala-led Bank of the Philippine Islands (BPI) said yesterday the BSP may raise its interest rates by 50 basis points during its policy meeting on June 23. BPI said the peso is at risk of succumbing to external stress if the BSP pushes through with its initial plan of raising its policy rate by 25 basis points.