June 28, 2022
The ECCP held its 2022 Europa Awards on Sustainability in 23 June. According to ECCP president Lars Wittig, it received about 85 initial entries this year. “The number of entries we received demonstrates the growing commitment of the business community to adopt sustainable business practices in their core operations and strategies,” Mr. Wittig said, adding the Chamber hopes “the Europa Awards will serve as an instrument to promote and strengthen stakeholders’ commitment and efforts in light of the urgency of sustainability.”
The winners announced June 23 were as follows:
Clean and Green Energy Award — Vivant Foundation, Inc.
Energy Efficiency and Conservation Award — Mondelez Philippines
Green and Inclusive Finance Solutions Award — ENGIE Services Philippines
Green Buildings Award — Union Bank of the Philippines
Green Workforce Award — Aboitiz Equity Ventures, Inc.
Smart and Safer Mobility Award — Pilipinas Shell Petroleum Corporation
Startup for Sustainability 2022 Award — Ampersand Design Think Lab Corp.
Waste MAnagement — Unilever Philippines
Water Resource Management Award — Alternative Indigenous Development Foundation, Inc. (AIDFI)
Sustainable Agri-food Award — Nestle Philippines, Inc.
Climate change adaptation and mitigation as well as smart infrastructure development are expected to form part of the incoming Marcos administration’s medium-term socioeconomic blueprint, officials of the state planning agency National Economic and Development Authority (Neda) said on Monday (June 27). At a press briefing, Socioeconomic Planning Undersecretary Roderick Planta noted that smart and sustainable infrastructure was supportive of achieving the United Nations’ (UN) sustainable development goals (SDGs) and the Paris agreement on climate change action. “So it really makes sense that this will feature in the next PDPs,” Planta said, referring to the six-year Philippine Development Plans being formulated by each administration.
THE best affordable transportation for all. This was the “marching order” of President-elect Ferdinand R. Marcos Jr. to his incoming Transportation Secretary-designate Jaime J. Bautista. In a text message to the BusinessMirror, the former chief operating officer of pioneering flag carrier Philippine Airlines (PAL) said, “My marching order from Marcos Jr. is to provide the riding public accessible, affordable, comfortable, and safe travel.” A certified public accountant by training, who has worked close to 30 years in the aviation industry, Bautista faces a public transportation crisis mainly in Metro Manila, with commuters suffering almost daily in hellish queues at bus carousel stations along Edsa, the Mass Railway Transit Line-3, and the Parañaque Integrated Terminal Exchange.
The Marcos administration has committed to retain infrastructure spending at five percent of the economy, as it vouched for the return of public-private partnership (PPP) as a mode of financing for big-ticket projects. Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno – who is set to head the Department of Finance (DOF) starting July 1 – told The STAR that infrastructure expenditures would be maintained at above five percent of gross domestic product (GDP) in the next six years. Diokno said the incoming administration of president-elect Ferdinand Marcos Jr. would keep public works as a priority spending despite the need for the government to narrow its disbursements to cut the budget deficit.
The Department of Finance (DOF) is supporting the Philippines’ accession to the Regional Comprehensive Economic Partnership (RCEP), which its chief economist said would help increase goods exports. “The country could further gain access to export markets by joining trade agreements such as the RCEP,” former DOF undersecretary Gil Beltran said in an economic bulletin on Saturday. The Senate had yet to concur on the Philippines’ inclusion in RCEP, said to be the world’s biggest free-trade agreement (FTA). which groups the 10 member-states of ASEAN plus Australia, China, Japan, New Zealand and South Korea. President Duterte already ratified RCEP in September of last year. For Beltran, FTAs would help shield the domestic economy from external shocks.
NEW TAXES may have to be introduced to fund the incoming Marcos administration’s priority projects, but the timing would have to be carefully considered, Socioeconomic Planning Secretary-designate Arsenio M. Balisacan said. “If you want more public services, if you want to invest a lot into our health and education, and social sector, and to our farmers, you must have sources of money for that. Obviously, you can only go so far with an improved tax administration,” he said. Asked if new taxes would be introduced in the next six years, Mr. Balisacan replied: “I think we should. Part of the fiscal consolidation is to eventually also come up with new sources of tax.” Incoming Finance Secretary Benjamin E. Diokno has said that he wants to avoid new taxes for now, preferring to focus on improving tax administration via digital processes. The main issue, Mr. Balisacan said, would be timing the imposition of new taxes, especially with the country still recovering from a pandemic-induced recession.
Outgoing Socioeconomic Planning Secretary Karl Kendrick Chua is hoping the next administration will take the resumption of full face-to-face classes “very seriously,” pointing out the reduced capacity in classrooms is an obsolete rule. Chua said in a virtual briefing yesterday he had earlier sent letters to Education Secretary Leonor Briones and Health Secretary Francisco Duque on the dismantling of restrictions in schools. “I have personally wrote Secretary Briones and Secretary Duque twice, in March and in May, and we have had many discussion in the IATF (Inter-Agency Task Force for the Management of Emerging Infectious Diseases) and through messages, so these have been communicated and I hope it will be part of the transition message of Secretary Briones to incoming Vice President and (education) Secretary (Sara) Duterte,” Chua said.
Metro Manila will remain under Alert Level 1, the laxest COVID-19 restrictions, until July 15, the Palace announced in a statement on Tuesday. The move of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) comes as it also greenlit recommendations by the sub-Technical Working Group for Data Analytics on revising matrices for the alert level system.
The Incoming Marcos administration should consider the full liberalization of the renewable energy (RE) sector as part of the government’s efforts on climate change mitigation, Socioeconomic Planning Secretary Karl Kendrick T. Chua said on Monday. “We are trying to fully liberalize all renewable energies; tidal, solar, and wind. In fact, the Economic Development Cluster has a resolution pushing for that. That will, I think, create a better balance between the dirty sources of energy and the cleaner ones,” he said at a briefing on Monday. Energy officials previously said new laws may be needed to relax the foreign ownership restrictions for wind and solar projects.
AS FERDINAND R. MARCOS, JR. is poised to assume office on June 30, business groups are hoping the new president will focus on ensuring food security, creating new jobs, and eliminating corruption in his first hundred days. George T. Barcelon, Philippine Chamber of Commerce and Industry (PCCI) president, told BusinessWorld via mobile phone interview that Mr. Marcos should prioritize addressing issues related to food security, public transport, and education. “(We hope he can address) health protocols for school reopening, public transport normalization, and food security,” he said. Mr. Barcelon noted that supply chain issues may disrupt the food sector, so the Marcos administration should prepare for this.
FocusEconomics has raised the gross domestic product (GDP) growth forecast for the Philippines to 6.9 percent this year, from an earlier 6.7 percent estimate, to remain the fastest growing economy in Southeast Asia. The Barcelona-based think tank said it expects the economic momentum to be carried over by the faster-than-anticipated 8.3 percent growth in the first quarter, from a 7.8 percent growth in the fourth quarter. “GDP is set to grow at the fastest pace in ASEAN this year. Support will come from reduced COVID-19 restrictions, expansionary fiscal and monetary stances, and the government’s Build Build Build infrastructure program. Key factors to watch include fiscal and external imbalances, and fiscal decentralization reforms,” FocusEconomics said.
THE Department of Trade and Industry (DTI) has begun preparations for the establishment of the $20-million Artificial Intelligence (AI) research hub, to be funded by the country’s top conglomerates. At the recent 2022 Manufacturing Summit, the Trade department said it has started preparations to set up the Philippines’s Center for AI Research (CAIR). CAIR’s goal is to make the country a Center of Excellence in artificial intelligence and at the same time help the micro, small, and medium enterprises (MSMEs). “It will be a collaborative hub for training, AI consultancy services, AI product development, and AI technology incubation services that will definitely benefit Philippine MSMEs,” the DTI said in a statement.
The positivity rate in National Capital Region and eight other areas surpassed the recommended benchmark set by the World Health Organization, the OCTA Research said on Monday. The WHO has set a positivity rate benchmark of below 5%. The NCR recorded a positivity rate of 5.9% based on OCTA's data from June 25. This means more than 5 out of 100 people test positive for COVID-19. OCTA Research fellow Guido David said the provinces of Rizal (11.9%), Laguna (7.5%), South Cotabato (7.4%), Cavite (6%), Pampanga (5.9%), Cagayan (5.8%), Iloilo (5.7%), and Batangas (5.6%) are also seeing significant increases in their positivity rate that is beyond the WHO's standards. OCTA also said cases are projected to go up further before the "weak surge" could begin to temper by mid-July. "We are averaging 663 cases per day in the whole country. This could reach 1,000 by next week. We are expecting it to go up further, maybe it will reach its peak by first or second week of July then hopefully we start to see a decrease in cases," David told CNN Philippines. "It's going to be a weak surge."
The possibility of oil and gas exploration in the West Philippine Sea dimmed further after the Philippines terminated talks with China over joint energy exploration in the disputed sea, as resumption of any activities could escalate geopolitical tensions. Following the termination of negotiations with China, the Department of Energy (DOE) – in coordination with the Security, Justice and Peace Coordinating Cluster (SJPCC) for safety and security concerns – said in a statement over the weekend that it continues to pursue talks with existing service contract holders so they can proceed with their work programs. The government’s decision to halt discussions with China – at least under the Duterte administration – should not deter companies with service contracts (SCs) in the disputed waters from pursuing their work program, Energy Secretary Alfonso Cusi said in a text message to The STAR.
Uncertainty had been sweeping the stock market for weeks now, as scorching inflation, the depreciation of the peso against the dollar, and fears of a global recession are keeping investors worried. The situation in the financial markets will remain similar for as long as the Russia-Ukraine conflict drags on in terms of relatively elevated global commodity prices and inflation, said Michael Ricafort, chief economist at Rizal Commercial Banking Corp. This, even as the main Philippine Stock Exchange index (PSEi) corrected higher on Friday, a day after the Bangko Sentral ng Pilipinas delivered a 25-basis point hike in the key policy rate to 2.50 percent.
The Bangko Sentral ng Pilipinas (BSP) may raise its interest rates gradually by 25 basis points until the benchmark rate hits four percent in the first quarter of 2023 to anchor inflation expectations, according to ANZ Research. In a report, ANZ said it expects back-to-back rate hikes from the BSP as the evolution of inflation and inflation expectations remain key for the central bank. “We expect back-to-back rate hikes until first quarter of 2023 when a terminal rate of four percent will be reached,” ANZ said.
The Bureau of Customs’ (BOC) collections from rice import tariffs grew 14 percent in the first five months of the year, owing to a 37-percent rise in import volumes, the Department of Finance (DOF) said over the weekend. The DOF said in a statement that collections from rice import duties totaled to P8.35 billion in January to May 2022, up from P7.32 billion generated during the same period last year. The BOC said collections from rice import duties during that period came from 1.43 million metric tons (MT) of the grain, which is 36.9 percent more compared to the 1.04 million MT shipped in January to May 2021. The BOC managed to keep its collections on rice import tariffs on track despite the continued drop in the average value of rice in the world market, which fell 16.3 percent from P19,977 per MT in January-May 2021 to P16,712 per MT during the same period this year, said Edward James Dy Buco, customs deputy commissioner. Under Republic Act No. 11203 or the Rice Tariffication Law, tariffs collected from rice imports go to the Rice Competitiveness Enhancement Fund. The law took effect on March 5, 2019.
The signing last week of an agreement that will pilot retail aggregation will encourage more participants to join this scheme that is seen to help industries save on power costs. The retail aggregation program allows two or more electricity end-users within a contiguous area to join to pool their demand and be treated as a single contestable customer in directly negotiating power rates and in entering into retail electricity supply contracts with preferred suppliers. Last week, the Manila Electric Co. (Meralco), Energy Regulatory Commission (ERC) and University of the Philippines-Diliman (UP Diliman), signed a memorandum of understanding to pilot the implementation of retail aggregation that will allow the academic institution to choose its preferred supplier of electricity for the combined power requirements of its various buildings. UP Diliman signified its intent to explore retail choice mechanisms to comply with the directive of the Inter-Agency Efficiency and Conservation Committee under the Government Energy Management Program, to reduce the government’s monthly electricity consumption.
The Department of Environment and Natural Resources (DENR) is pushing for the establishment of more mineral processing plants and for the utilization of rare earth elements (REEs) to increase the country’s mineral production and revenue generation. The agency said there are 108 active mineral processing permits, most of which are for construction materials including those for limestone, sand, gravel and aggregates. “Mineral processing plants make the mined mineral ready to use for application. For example, limestone, if processed, will become cement, which is ready to use for construction… If we have more of these plants and more minerals will be processed in the country, then its value will increase even more than 100 percent, and lesser raw materials will be shipped out to other countries, like Japan or China,” said Jim Sampulna, DENR acting secretary, in a statement.
The Philippines’ outstanding local currency (LCY) bonds in the first quarter of the year rose 6.5 percent from the previous quarter as both government and corporate segments posted strong increases, according to the Asian Development Bank’s (ADB) latest report.
The ADB’s Asia Bond Monitor said the country’s outstanding LCY bonds totaled to P10.43 trillion in the first quarter of the year, posting a faster increase from the marginal growth of 0.3 percent quarter-on-quarter in the fourth quarter of 2021. On an annual basis, the LCY bond market expanded 14.3 percent from the P9.12 trillion recorded a year ago. Government bonds accounted for 85.5 percent of the total bond market at the end of March, while corporate bonds accounted for 14.5 percent.
Local fuel retailers raised their prices for the fourth consecutive week. The price hikes were mainly caused by the continuing tightness in global crude supply due to the ongoing war between Russia and Ukraine as well as the absence of oil production from Libya due to political crisis. According to the Department of Energy (DOE), as of June 21, the latest average Manila price per liter of gasoline (RON95) stood at P85.80, diesel at P89.05 and kerosene at P92.97. Caltex and Seaoil increased per liter prices by P0.50 on gasoline, P1.65 of diesel and P0.10 on kerosene PTT, Phoenix Petroleum and Clean Fuel adjusted per liter prices upward by P0.50 on gasoline and P1.65 on diesel.
Persistently high inflation is raising the odds that the Bangko Sentral ng Pilipinas (BSP) will raise the key interest rate by as much as 50 basis points in the next policy meeting in August, contrary to Monetary Board (MB) signals for gradual tightening. Moody’s Analytics said in a commentary that headline inflation is “uncomfortably high” in the Philippines, having hit a three-year high of 5.4 percent in May.
The peso on Monday breached the 55:$1 mark at an intraday weakest of 55.15 against the dollar, raising concerns that the local currency is sliding too fast despite government assurances that it remains stable. The last time the peso traded at an intraday low that breached 55:$1 was more than 16 and a half years ago, or since Oct. 25, 2005, at 55.15 to $1, according to Rizal Commercial Banking Corp. chief economist Michael Ricafort. On that day, trading closed at 55.26:$1.
Incoming tourism secretary Christina Frasco yesterday vowed to push for “shared tourism governance” under her term as she ensures equal access to opportunities and resources for progress among tourism sites in the country. Frasco yesterday met with Department of Tourism officials at the DOT office in Makati City. She stressed that the best way to move forward from the challenges faced by the tourism industry during the pandemic is through collaboration.