May 16, 2023
ECCP at Work
IMF Mission Head to the Philippines Shanaka Jay Peiris said Philippine gross domestic product (GDP) growth may fall within the 5.5-6% range in 2024. The lower end of the forecast is also below the 5.8% projection the IMF previously gave in April. The IMF’s forecast is also below the government’s 6.5-8% target for next year.
President Ferdinand R. Marcos Jr. has approved the National Tourism Development Plan (NTDP) 2023-2028 which will serve as his administration's blueprint and development framework for the tourism industry. Marcos gave his approval during a sectoral meeting held at Malacañan Palace in Manila, Tourism Secretary Christina Frasco said in a Palace press briefing. "This NTDP is the result of consultation among tourism coordinating council as well as our various tourism stakeholders from our regions all over the PH," Frasco said.
The Department of Finance (DOF) reconvened the Inter-Agency Task Force on Sustainable Finance (ITSF), also known as the Green Force, to discuss the implementation of the Sustainable Finance Roadmap and its Guiding Principles. In a statement, the DOF said the ITSF, which was established with support from the Government of the United Kingdom (UK), aims to help develop a green and sustainable economy in the country.
The BIR said ecozone developers and operators are eligible for VAT zero rating subject to a number of eligibility conditions. The BIR said that the developers and operators of economic zones and industrial parks and buildings housing export enterprises qualify for VAT zero-rating if they pass the 70% threshold for leasable or saleable area dedicated to exporters. “For investment promotion agency (IPA) — registered business enterprises, this means exporting at least 70% of total production or services. For non-IPA registered enterprises, this means exporting at least 60% of output,” it added.
The nationwide COVID positivity rate is at 23.6 percent, OCTA Research said. The Department of Health (DOH) reported on Saturday 2,065 new cases. OCTA said on May 5 that the COVID-19 positivity rate in Metro Manila could reach up to 25 percent, but the health care utilization in the capital region was not likely to reach critical levels. The hospital bed occupancy rate rose to 20 percent while the cumulative positivity rate is at 13.5 percent.
In a chance interview, Cosette V. Canilao, president and chief executive officer of Aboitiz InfraCapital, said that the Mandanas ruling can help push public-private partnerships (PPP) between local government units (LGUs) and private companies. Under the Supreme Court’s Mandanas ruling in 2018, the just share of LGUs is determined based on all national taxes and not just on national internal revenue taxes. The decision significantly increased the tax base used in computing the share of LGUs in the internal revenue allotment.
NEDA said in a notice posted on its website that it has opened the call for proposals for this year’s grants for programs, activities and projects that promote innovation until June 13. Earlier, NEDA said P100 million is being made available this year under the national budget to support innovation programs, activities and projects in accordance with Republic Act 11293 or the Philippine Innovation Act, which recognizes the importance of innovation in national development and sustainable economic growth. The innovation grants are open to government agencies including departments, bureaus, offices, local government units, state universities and colleges, and government-owned or controlled corporations.
A bill extending the estate tax amnesty deadline to June 14, 2025, has been approved by the House of Representatives on the third and final reading. 259 lawmakers voted in favor of the estate tax amnesty extension as contained in House Bill (HB) No. 7909, while none voted against it or abstained. If the bill is enacted, heirs of individuals whose estate taxes remain unpaid as of December 31, 2021, will have the chance to settle it until June 2025. However, if it is not signed into law, the amnesty will end on June 15, 2023. During the deliberations at the House committee on ways and means, panel chairperson and Albay 2nd District Rep. Joey Salceda said that the approval of the bill is important since a lot of families have failed to settle the estate of their deceased relatives due to several concerns, including the COVID-19 pandemic.
Concessionaire Manila Water Co. Inc. registered a 108-percent rise in earnings in the first three months, thanks to higher water demand from households and commercial users. In a stock exchange disclosure, Manila Water said its net income from January to March grew to P2.29 billion from P1.1 billion the previous year. The Razon-led company’s total billed volume rose by a quarter to 325.28 million cubic meters (mcm), with Metro Manila’s east zone concession accounting for 124.8 mcm. Manila Water Asia Pacific, which holds the company’s international investments, saw a 49-percent increase in billed volume to 164 mcm from 110.1 mcm last year.
The growth of the manufacturing sector will likely pick up in the second quarter of the year due to increase in demand, an economist. "Seasonal increase in demand towards April-May 2023 in view of the Holy Week holidays, vacation season amid the further pick up in both local and foreign tourism, fiestas, Mother’s Day, reunions, and other celebrations during the summer season would lead to some pick up in manufacturing activities and other business activities," Rizal Commercial Banking Corporation chief economist Michael Ricafort stated.
Diesel and kerosene prices are estimated to increase by more than P1 per liter mid-May, as prices of imported petroleum increased over the week. Diesel prices will take the biggest hike at P1.20 to P1.50 per liter. Kerosene prices will increase by P1.10 to P1.40 per liter. Gasoline prices, meanwhile, will go up P0.20 to P0.50 per liter.
Two administration lawmakers on Sunday pushed for a review of the congressional franchise of the National Grid Corp. of the Philippines (NGCP) following last week’s power outages in Luzon, with Sen. JV Ejercito urging the government to exhaust all legal remedies to regain full Filipino control of the country’s energy transmission system. Ejercito pointed out that NGCP is 40-percent owned by the State Grid Corp. of China (SGCC). A group of Filipino businessmen led by tycoons Henry Sy Jr. and Robert Coyiuto Jr. owns the controlling 60-percent stake in the firm. While the Chinese company is the minority group in the consortium, the senator claimed that SGCC officials had actual control of NGCP’s operations. He said the country’s territorial dispute with China in the West Philippine Sea should likewise prompt the government to reconsider SGCC’s role in the country’s power sector.
The Department of Labor and Employment said a "balanced solution" is needed on the proposed P150 across-the-board minimum wage hike for private sector workers. In an ANC interview Friday, Labor Secretary Bienvenido Laguesma also assured Filipino workers the agency is not sitting on the wage hike petitions, saying the Regional Tripartite Wages and Productivity Boards have been actively assessing them. At present, Metro Manila has the highest daily nominal wage rate at P570 per non-agriculture while the lowest is at P316 also non-agriculture for the Bangsamoro Autonomous Region in Muslim Mindanao.
Marking what’s part of the country, the Philippine Coast Guard (PCG) recently installed five navigational buoys in critical areas of the West Philippine Sea (WPS), with each of them bearing the image of the Philippine flag. The installation of the buoys was done from May 10 to May 12. The PCG said it is echoing the appeal of Rep. Tarriela for Congress to approve House Bill 8028, the PCG “Modernization Act” that was filled last May 10 following the filing of Go’s Senate Bill 2112. Last Saturday, PCG Vice Admiral Joseph Coyme and Commodore Rommel Supangan conducted a Maritime Domain Awareness flight and inspected the newly installed buoys. He said that the presence of the PCG in the area does not escalate tensions since the Philippines is intent on applying the diplomatic approach.
THE BANGKO SENTRAL ng Pilipinas (BSP) is widely expected to maintain the key benchmark interest rate at 6.25% on Thursday, amid easing inflation and slowing economic growth. A BusinessWorld poll last week showed 13 out of 18 analysts anticipate the Monetary Board will pause its tightening cycle at its May 18 meeting.If realized, this would be the first time the BSP will leave interest rates untouched since it began hiking in May 2022. According to most analysts, the BSP has done enough in taming inflation which has decelerated steadily from the peak of 8.7% in January.
THE PHILIPPINE government may launch a retail dollar bond offering in the third quarter of 2023, National Treasurer Rosalia V. de Leon said at a briefing on Friday, Ms. De Leon said the offer size will be around $2 billion, surpassing its previous retail dollar bond issuance. The Philippines’ last retail dollar bond sale was in 2021, when it raised almost $1.6 billion or P80.91 billion. “We are looking for a more comfortable exchange rate. It’s a moving target, we’re now looking at the third quarter. We are planning this carefully, because otherwise we’ll be adding more debt,” she said.
The slower growth of the country’s gross domestic product (GDP) in the first quarter of 2023 firmed the forecast among many analysts that monetary authorities will bring the current series of interest rate hikes to a pause this week, albeit with a hawkish leaning, and perhaps even a cut later this year. Over the past 12 months, the Monetary Board raised the Bangko Sentral ng Pilipinas’ (BSP) policy rate in all of their eight meetings plus an off-cycle increase in July 2022 by a total of 4.25 percentage points to 6.25 percent.
Luxembourg-based non-profit association Microinsurance Network (MiN) commends promising inroads made by the Philippine insurance industry in their efforts to provide financial inclusion to those who need it most.The 2022 study explored how Philippine motorcycle distributors serve as the distribution partner for motorcycle insurance. The study also highlighted how the local microinsurance sector was being used as an important tool to support low-income families in the Philippines, who are mainly engaged in agriculture.
The Department of Energy (DOE) has welcomed the signing of the renewal agreement for the Malampaya Service Contract No. 38 (SC 38) as this will support the country’s goal of achieving energy security and will bring in additional investments in indigenous power sources. In a statement, the DOE said the extension of the Malampaya contract for another 15 years will allow further exploration and production of natural gas from the facility. This, as President Ferdinand R. Marcos Jr. approved on Monday the extension of SC 38 until Feb. 22, 2039.“Aside from continuing the production operations, the SC 38 Consortium is required to conduct a minimum work program consisting of geological and geophysical studies and the drilling of at least two deep water wells during the Sub-Phase 1 from 2024 to 2029,” DOE said. It said the work program aims to unlock potential gas supply both in the existing gas field and nearby prospect areas to increase Malampaya’s production.
The Philippine Navy on Monday expressed disapproval at China's latest radio challenge to Manila's coast guard. According to Philippine Navy chief Vice Admiral Toribio Adaci Jr., Beijing is the one crossing the line and not the Philippines. "I believed the scenario happened in the vicinity of Pag-asa Island and it's obvious who is crossing the boundary," he told ANC's "Headstart". The Philippine Coast Guard has confirmed receiving a radio call challenge from the Chinese Navy while they were on their way to Pag-asa Island to distribute aid to residents. Manila's coast guard has been strengthening its defenses by placing buoys in the West Philippine Sea. Coyme said the cardinal markers would serve as a warning or an alarm for seafarers that the direction is not advisable for navigation.
The House of Representatives on Monday approved a bill that redefined the crime of illegal recruitment by a syndicate by reducing the required number of perpetrators. House Bill No. 7718 seeks to amend Article 38 of the Labor Code and Migrant Workers and Overseas Filipinos Act by adding a new way to identify illegal recruitment by a syndicate, which is "if the offenders are non-licensees or non-holders of authority and the act was carried out by two (2) or more persons.”The House of Representatives approved the bill with 260 affirmative votes. Among the principal authors of HB 7718 are Reps. Ralph Tulfo, Jocelyn Tulfo, Gus Tambunting and Kabayan Rep. Ron Salo. Illegal recruitment by a syndicate or in large scale is considered economic sabotage.
PRESIDENT Ferdinand R. Marcos, Jr. approved imports of about 150,000 metric tons (MT) of sugar on the Sugar Regulatory Administration’s (SRA) recommendation, the Palace said in a statement. The Presidential Communications Office (PCO) said Mr. Marcos, who is also Secretary of Agriculture, accepted the SRA recommendation in order to stabilize sugar prices and add to the sugar inventory. As of May 7, the Philippines had an inventory of 160,000 MT of sugar, according to the SRA, which estimated the import requirement this year at between 100,000 and 150,000 MT, based on estimate production of 2.4 million MT and the 440,000 MT earlier authorized for import by Sugar Order No. 6.