May 09, 2023
ECCP at Work
The bill creating the Maharlika Investment Fund (MIF) has been listed by the Legislative Executive Development Advisory Council (Ledac) as one of the 11 additional priority measures of President Ferdinand Marcos, Jr. Marcos Jr. nixes proposal to source Maharlika fund from GOCCs Revisions to Maharlika Investment Fund a welcome development: economist House Speaker Martin Romualdez listed the following as added priority bills: 1. Amending the AFP Fixed Term Bill, which was transmitted to the President, 2. Ease of Paying Taxes, 3. Maharlika Investment Fund, 4. Local Government Unit Income Classification, 5. Amendment to Universal Health Care Act, 6. Bureau of Immigration Modernization, 7. Infrastructure Development Plan/Build Build Build Program, 8. Philippine Salt Industry Development Act
9. Philippine Ecosystem and Natural Capital Accounting System (PENCAS), 10. National Employment Action Plan, and 11. Amendment to the Anti-Agricultural Smuggling Act.
Voting 257-0, the House of Representatives on Monday approved on final reading House Bill 7446 or the proposed law promoting transparent governance and instituting anti-corruption mechanisms in the operation of banks and other financial institutions. The bill seeks to amend Republic Act 1405 or the "Secrecy of Bank Deposits Law" to empower the Bangko Sentral ng Pilipinas to investigate bank deposits. According to the House committee fact sheet on HB 7446, the measure wants to lift the barriers in the effective investigation and prosecution of corrupt or illegal financial actions of stockholders, owners, directors, trustees, officers or employees of entities supervised and regulated by the BSP
President Ferdinand Marcos Jr. has signed an Executive Order (EO) which creates a Disaster Response and Crisis Management Task Force (DRCMTF). EO No. 24 was signed last April 30 to form an agency that “focuses only on disaster preparedness and response, and with a clear unity of command to lead the government’s efforts in confronting the challenges brought about by natural disasters, using evidence-driven and science-based approach in crisis-management.” Funding for the agency will be taken from the existing appropriations of its member agencies and other sources identified by the Department of Budget and Management.
The unemployment rate in the Philippines improved to 4.7 percent in March with 2.42 million Filipinos available and looking for jobs, according to preliminary data at the Philippine Statistics Authority. National Statistician Dennis Mapa said that in March, the number of jobseekers decreased by 58,000 compared with February and by 461,000 compared with March 2022. The industries that contributed most to reducing the ranks of the jobless were transportation and storage; accommodation and food service activities; wholesale and retail trade; and construction.
The Philippines needs to develop intra-Southeast Asia markets and promote infrastructure investments for a more resilient aviation industry in the post-pandemic environment, the Asian Development Bank (ADB) said. In a report titled “Landscape Study on Southeast Asia’s Aviation Industry: COVID-19 Impact and Post-Pandemic Strategy,” the ADB provided recommendations for the Philippines for rebuilding a more resilient aviation industry. Among the ADB’s strategy recommendations for the long term growth in the Philippines’ aviation sector is the development of intra-Southeast Asian markets, particularly in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN growth area.
The declaration by the World Health Organization of the end of the Public Health Emergency of International Concern (PHEIC) on the new coronavirus disease 2019 (COVID-19) will send positive signs that would benefit the economy. The end of the pandemic particularly signals hope for the tourism industry to full recovery, according to Tourism Secretary Christina Frasco. The sector took the biggest hit during the pandemic.
The Bureau of Internal Revenue (BIR) has included barangays in the list of taxpayers required to file returns through electronic forms. The BIR’s Revenue Regulations (RR) No. 4-2023 further expands the categories of taxpayer required to file tax returns through electronic BIR forms (eBIRForms). Local government units, including barangays, are now covered by the rule. The previous regulations excluded barangays. Other taxpayers required to file tax returns through eBIRForms are accredited tax agents and/or practitioners and all its client-taxpayers, accredited printers of principal and supplementary receipts/invoices, one-time transaction taxpayers classified as real estate dealers or developers, and those considered habitually engaged in the sale of real property and regular taxpayers already covered by eBIR forms.
The Marcos administration has no choice but to overhaul the pen for the military and other uniformed personnel (MUP) as maintaining the status quo could drain the national budget and increase public debt by as much as 25 percent over the next few years. In a briefing, Finance Secretary Benjamin Diokno said the current formula for the MUP pension system, which began during the Ramos administration, is not fiscally sustainable. MUP does not contribute to the pension system. The retirement pensions and benefits are fully funded by the government through annual appropriations.
The government eyes to avail of a grant from the World Bank’s (WB) Pandemic Fund to improve the country’s biosecurity measures for animal health, according to the Department of Agriculture (DA). The $300-million WB Pandemic Fund this year aims to help developing countries be more prepared for, and responsive against future pandemics. Arnel De Mesa, DA assistant secretary for operations, said in an interview last week, the agency proposed for a $25 million (P1.38 billion) grant fund to be utilized for improvements on livestock and animal health that will be tied up to the Philippine Rural Development Project (PRDP) Scale Up program. PRDP Scale Up is an expanded project of the DA designed to address gaps in commodity value chains by improving the efficiency of the food supply chain. Scale Up is proposed to be funded through a $600- million loan from the WB.
An economist has forecast a rise in the country's gross international reserves (GIR) in the coming months despite the drop to USD 101.51 billion as of the end of April. In a report released on Saturday, Rizal Commercial Banking Corp. chief economist Michael Ricafort noted that while the foreign reserves went down from the end-March level of USD101.55 billion, it remains to be equivalent to 7.6 months of imports, just like in the previous month, which is way higher than the international threshold of three to four months cover.
A member of the Bangko Sentral ng Pilipinas' (BSP) policy-making Monetary Board (MB) has expressed hope that the prices of food and oil-related products would stabilize as soon as possible to reduce the secondary effects of inflation. This, as higher food and oil prices continue to impact consumers' purchasing capacity, among others, hence, the petitions for wage hikes. MB member Bruce Tolentino, during the business journalism seminar here on Saturday, hosted by the Economic Journalists Association of the Philippines in coordination with San Miguel Corp., said higher transport fares and wages are among the effects of acceleration in the rate of price increases.
Aside from looking for a potential supplier for the planned nuclear power plant in the Philippines, Trade and Industry Secretary Alfredo E. Pascual said the government is also eyeing potential manufacturing of nuclear power reactors in the country.It could be recalled that President Ferdinand R. Marcos Jr. and his delegation met with two American nuclear power firms – NuScale Power Corp. and Ultra Safe Nuclear Corp. – during his recent five-day official working visit to the US.According to Pascual, NuScale and Ultra Safe are offering two different nuclear power plant technologies. The Oregon-based NuScale is into small modular reactors (SMRs) that can generate 60 megawatts and higher power capacity, but the Seattle-headquartered Ultra Safe is into micro modular reactors (MMRs) using a special material to encase the fuel.
The government, through the Department of Energy (DOE), will demarcate the specific functions and responsibilities to be assumed by the national government agencies (NGAs) as well as local government units (LGUs) in hosting and on the permitting processes for offshore wind farm installations; including the integration of the required permits into the energy virtual one-stop shop (EVOSS) platform. Energy Secretary Raphael P.M. Lotilla stated that the government will sort out the delineation of roles upon the submission of documents to the DOE by the permitting agencies, as prescribed under the Executive Order No. 21 of President Ferdinand Marcos Jr. The Presidential directive stipulated that “all permitting agencies shall within 60 days from the effectivity of (the) order, submit to the DOE a complete list of appropriate permits required by relevant permitting agencies, including all requirements, fees and procedures.”
The Philippine national government’s debt stock increased by 0.8 percent or an additional P104.1 billion to reach yet another record high, at P13.86 trillion as of the end of March, according to the Bureau of the Treasury. In March, local debt rose by 0.8 percent or P71 billion to P9.51 trillion mainly because the government’s new borrowings were more than the payments made that month. Similarly, foreign debt increased by 0.8 percent or P33.1 billion to P4.34 trillion. These increases outweighed the benefit of the Philippine peso’s appreciation against the US dollar, which trimmed a total of P71.5 billion off the debt stock.
In line with the development goals of President Ferdinand R. Marcos Jr., the Department of Environment and Natural Resources (DENR) on Monday initiated an experts’ forum to craft policy recommendations for the eventual review and enhancement of the country’s policies related to reclamations. The DENR said while the recently launched Philippine Development Plan 2023-2028 prioritizes economic transformation and builds community resilience from the hazards of climate change, it also fosters an enabling business environment to increase public-private partnerships (PPPs) in multiple sectors.
With an overwhelming 259 votes, the House of Representatives on Monday approved on final reading a bill that seeks to impose sanctions on private elementary and high school educational institutions that will bar learners from taking scheduled periodic examinations due to unsettled financial obligations. Once enacted into law, House Bill No. 7584, or the “No Permit, No Exam Prohibition Act,” will allow learners in private basic educational institutions to take scheduled periodic examinations despite unpaid school fees, provided that the reason for the unsettled financial obligations is from emergencies, force majeure (uncontrollable events), and good cause or other justifiable reasons.
The Sy, Zobel, Gokongwei, Aboitiz, and Co families join this year’s Ernst and Young’s (EY) top 500 family enterprises. Using publicly-available data to compile the list, the 2023 EY and University of St. Gallen Family Business Index showed the Sys’ SM Investments Corp.ranked 225th with its $8.5 billion revenue. The Zobel’s Ayala Corp. was ranked 381st with its revenue of $4.7 billion. The Gokongweis’ JG Summit Holdings Inc. ranked 385th, with a revenue of $4.7 billion. The Aboitiz' Aboitiz Equity Ventures Inc. ranked 400th with revenue of $4.5 billion. Lucio Co’s Cosco Capital Inc., ranked 476th with a revenue of $3.6 billion. EY said the five Filipino families’ businesses together with the 495 others in the list collectively grew their revenues by 10 percent amid the ongoing global economic slowdown, generating a consolidated $8.02 trillion, while employing 24.5 million people across 47 jurisdictions.
Credit growth picked up slightly in March after slowing down for three straight months as the aggressive rate hikes delivered by the Bangko Sentral ng Pilipinas (BSP) eat into bank lending. Preliminary data released by the central bank showed that loans disbursed by universal and commercial banks grew by 10.1 percent in March from 10 percent in February. Loans released by big banks amounted to P10.76 trillion in end-March, P984 billion higher than the P9.78 trillion disbursed in the same month last year. “The sustained growth in credit is supported by sound Philippine banking system conditions,” the BSP said in a statement.
The admission of a pork-based raw material used in the manufacture of fish feed is expected to lead to a normalization of aquaculture production, after the raw material was subject to a temporary import ban following an outbreak of African Swine Fever (ASF) in the source country, a former fisheries official said. The raw material is known as processed animal protein (PAP), an animal byproduct used in fish feed. The Department of Agriculture (DA) had banned PAP with the issue of Memorandum Order No. 5, Series of 2022 dated Jan. 31, after a confirmed outbreak of ASF in Italy, a major PAP producer. Italy accounts for 60%-70% of the Philippines’ annual PAP imports of 150,000 metric tons (MT). Italy accounts for 60%-70% of the Philippines’ annual PAP imports of 150,000 metric tons (MT).