May 23, 2023
ECCP at Work
The Philippines is entering the “golden age” of investments from Europe as the country remains an attractive destination for European businesses. This, as the government implemented policy reforms such as the amendments to the Foreign Investments Act, Public Service Act, and Retail Trade and Liberalization Act, as well as allowing full foreign ownership for renewable energy projects. "The Philippines is really starting to enter this golden age of investments coming from Europe and from other parts of the world," European Chamber of Commerce of the Philippines (ECCP) executive director Florian Gottein stated. Showing the growing interest of European firms in the Philippines, EU-ASEAN Business Council (EU-ABC) executive director Chris Humphrey said one of the biggest European business delegations will be arriving here this week to participate in the 2023 European-Philippines Business Dialogue.
More European companies want to invest in the Philippines given recent reforms and the country's continued economic growth, foreign businessmen said on Monday. European Chamber of Commerce of the Philippines (ECCP) Executive Director Florian Gottein claimed that since the start of the year, a total of 62 companies had expressed interest in setting up shop. "We cannot mention [the names] yet ... but I can say that it would require a longer runway because [most] are in infrastructure and energy and also of course in manufacturing," Gottein said in a briefing. ECCP President Lars Wittig said "we have witnessed significant efforts and boosting business confidence in the country's position as a competitive destination for trade and investment."
Businesses from the European Union (EU) are pushing for a free trade agreement (FTA) between the Philippines and EU as a priority in attracting more foreign direct investments into the country. Chris Humphrey, executive director of the EU-Asean Business Council , in a press conference, echoed the opinion of the European Chamber of Commerce of the Philippines (ECCP) in advocating ease of doing business in the country, saying there is a lot more progress that can be done in cutting bureaucracy and in transparency on government procurement and other areas. According to Humphrey, businesses in Europe are pushing for the FTA and not just for the renewal of the Generalized System of Preference (GSP) plus.
European companies continue have bullish prospects in the Philippines given the improving economic fundamentals and the country’s open investment policy, the European Chamber of Commerce of the Philippines said Monday. ECCP president Lars Wittig said the recent $7-billion dollar investment on a wind farm by a Danish company strengthened the trust and confidence of other European companies who were considering the Philippines as an investment destination.
The EU-Asean Business Council (EU-ABC) said it is now seeing “positive developments” from President Ferdinand R. Marcos Jr.’s economic team that will improve the Philippines’s standing as a destination for foreign direct investments (FDI) from Europe. “The Philippines is a country of huge potential but unfortunately has, until now, been underperforming compared to some of its Asean neighbors,” Chris Humphrey, Executive Director of the EU-Asean Business Council.
The Philippines is keen on resuming negotiations for the Philippines-European Union (EU) free trade agreement (FTA), according to Trade Secretary Alfredo Pascual. “I’d like to reemphasize our growth strategy centered around enhancing trade and investment. Our objective is to foster job creation and poverty reduction by uplifting the global position of our export sectors and driving investments into strategic areas,” Pascual said in his opening message during the EU-Association of Southeast Asian Nations (ASEAN) Business Council meeting on May 22.
The Philippines through the Department of Trade and Industry met with members of the European Union (EU) – ASEAN Business Council (ABC) on Monday at Dusit Thani Hotel. No less than Trade Secretary Fred Pascual who led the meeting emphasized that the Philippines is keen on pursuing the resumption of negotiations concerning the Philippines-EU Free Trade Agreement (FTA). Pascual stressed a successful negotiation of the FTA will provide the following benefits: (1) Help the Philippines secure additional duty-free market access beyond those covered by the EU GSP+ scheme; (2) Provide a conducive framework for attracting greater investments from the EU; and (3) Will put the Philippines at par with other ASEAN countries who are aggressively pursuing FTAs with the EU. The meeting was also attended European Chamber of Commerce of the Philippines Executive Director Florian Gottein, and other representatives from various European businesses.
The Philippines is expected to attract more European investments, as the Regional Comprehensive Economic Partnership (RCEP) enters into force next month. “We are now seeing positive developments from the economic team under President Marcos Jr. that will surely improve the standing of the country as a destination for foreign direct investments (FDIs) from Europe. Being part of the RCEP will be significant benefit to the country,” European Union-ASEAN Business Council (EU-ABC) Executive Director Chris Humphrey said during a press conference in Makati City on Monday. Lars Wittig, European Chamber of Commerce of the Philippines (ECCP) president, said that the Philippines should further leverage its status as the only ASEAN country beneficiary of the Generalized Scheme of Preferences Plus (GSP+) trade scheme.
Trade Secretary Alfredo Pascual said Monday the Philippines is keen on pursuing the resumption of negotiations on the Philippines-EU Free Trade Agreement. Pascual said in a meeting with members of the European Union-ASEAN Business Council at Dusit Thani Hotel in Makati City that a successful negotiation of the FTA would help the Philippines secure additional duty-free market access beyond those covered by the EU GSP+ scheme and provide a conducive framework for attracting greater investments from the EU.
Fitch ratings kept the Philippines’ long-term foreign currency issuer default rating at “BBB.” A “BBB” rating indicates low default risk and adequate capacity to pay, although some unfavorable economic conditions could impede this. “The revision of the outlook to stable reflects Fitch’s improved confidence that the Philippines is returning to strong medium-term growth after the coronavirus disease 2019 (COVID-19) pandemic, supporting sustained reductions in government debt/gross domestic product (GDP), after substantial increases in recent years,” it said.
President Ferdinand R. Marcos, Jr. issued EO 25 on May 7 to make the needed tariff adjustments in time for the RCEP’s effective date of June 2. In April, the Department of Trade and Industry (DTI) said the EO would serve as the basis for the tariffs to be implemented by the Bureau of Customs from RCEP source countries. According to the EO, all goods originating from other RCEP countries are to be levied the prescribed rates of duty subject to the submission of a Proof of Origin and compliance with all applicable RCEP requirements.
The flagship infrastructure projects of the Marcos administration have been reduced to P8.2 trillion, down from the P9 trillion earlier announced in March, with more than half to be financed through loans. In a briefing, Department of Finance Secretary Benjamin Diokno said the Economic Development Group, which he co-chairs with the head of the National Economic and Development Authority, recently held a meeting and updated the new list of 194 infrastructure flagship projects (IFPs) of the government. The updated total investment value of IFPs now stands at P8.2 trillion, down from the P9 trillion earlier announced in March.
The House of Representatives approved on third reading a bill seeking to adopt a 30-year National Infrastructure Program (NIP). 254 legislators voted to approve House Bill No. 8078, with three voting against and zero abstentions. The infrastructure plan aims to achieve “the overall long-term development vision for the Philippines by the middle of the century as a prosperous, predominantly middle-class society,” according to the bill. The bill proposed to focus infrastructure efforts on transportation, energy, water resources, information and communications technology, agri-fisheries modernization and food logistics, and social infrastructure.
The country’s balance of payments (BOP) position swung to a deficit of $148 million in April, a reversal of the $1.27-billion surplus recorded in March, as the national government settled more foreign currency debt obligations. The Bangko Sentral ng Pilipinas (BSP) said the BOP shortfall in April was 64.3 percent lower than the $415 million recorded in the same month last year. The BOP deficit in April reflected outflows arising mainly from the national government’s payments of its foreign currency debt obligations,” the BSP said in a statement.
The Philippines would ensure that all phases of its ambitious “Build, Better, More” infrastructure program are sustainable, climate resilient and disaster-proof, President Ferdinand R. Marcos, Jr. said. Mr. Marcos said this would be implemented in projects involving water supply, sanitation, energy, transportation, agriculture and other essential areas. The Marcos administration aims to sustain infrastructure annual spending at 5-6% of GDP through 2028. In 2022, infrastructure spending was equivalent to 5.8% of GDP. The government signed three ADB loans worth $1.1 billion in the first nine months of the Marcos administration. He said the Philippine government is awaiting the release of ADB’s Country Partnership Strategy for 2024-2029, which will spell out the regional bank’s recommended medium-term development agenda for the Philippines.
The PSAC said in a statement yesterday that President Marcos has approved the extension of the program that helps attract new investments and develop the country as a regional automotive manufacturing hub following the council’s recommendation. “The extension of CARS for five years will continue to provide incentives and support for manufacturers that meet specific requirements in terms of investment, production, and technology development,” it said.
The Department of Finance (DoF) said its Privatization and Management Office (PMO) hopes to dispose of P2 billion worth of assets via auction this year. The target, if achieved, represents a step up from the P501 million generated last year. Undersecretary Catherine Fong said privatizing the commercial operations of the Philippine Amusement and Gaming Corp. (PAGCOR) is expected to take some time despite support from its board, after the chairman requested a delay of one or two years in consideration of employees who might be affected.
With the projected weak to moderate El Niño, the country’s finance chief said the government does not expect a significant reduction in local production especially for rice and corn. Finance Secretary Benjamin Diokno said it was discussed during the recent Economic Development Group meeting that a weak to moderate El Niño is projected until the first quarter of 2024. “Because of this, we do not expect a significant reduction in local production – especially for rice and corn. As a result, we do not foresee a surge in food prices,” he said.
The Makabayan bloc expressed strong opposition to the approval of the Senate’s version of the proposed Maharlika Investment Fund (MIF), which will reinstate the use of workers’ pension funds from the Government Service Insurance System (GSIS) and Social Security System (SSS) after it was excluded in the House version. In a statement, the Makabayan bloc called on the public to reject the current administration’s move, saying that the Senate version reinstated the use of these pension funds in the proposed MIF “while we weren’t looking.” Last December 16, 2022, the House of Representatives approved the MIF bill. As revised, the House version listed the Land Bank of the Philippines, Development Bank of the Philippines (DBP), Philippine Gaming and Amusement Corp. (Pagcor), and Bangko Sentral ng Pilipinas (BSP) as MIF contributors.
Airlines flew more than seven million passengers in the first quarter as air travel in the Philippines is expected to close in, if not hit, pre-pandemic levels by the end of the year. Data from the Civil Aeronautics Board (CAB) showed domestic passenger volume reached a total of 7.06 million in the first quarter as the country stayed out of COVID-19 lockdown during the period. Should the trend be sustained for the rest of the year, domestic passenger traffic is likely to hit 28.24 million by the close of 2023, bordering on the pre-pandemic record of 29.54 million in 2019.
The Philippine government eyes selling more assets through privatization this year to generate revenues and address budget constraints, an official said. Finance Secretary Benjamin Diokno said the government aims to sell some P1.5 billion worth of assets under the Privatization and Management Office (PMO). Most of the assets for disposition are real estate properties, as well as mining rights.
Petroleum firms announced price adjustments for kerosene, diesel and gasoline which would take effect on May 23. The following changes will be implemented on 23 May: Gasoline P0.80 per liter increase, Kerosene P0.10 per liter rollback, and Diesel P0.60 per liter increase.
Oil retailers implemented mixed adjustments in the price of fuel products after last week’s hike. Seaoil raised per liter prices by P0.80 on gasoline and P0.60 on diesel but cut the price of kerosene by P0.10. Clean Fuel, PTT, Phoenix Petroleum and Jetti Fuel adjusted per liter prices upward by P0.80 of gasoline and diesel by P0.60. Today’s adjustments were mainly attributed to the International Energy Agency’s (IEA) decision to raise its forecast on global oil demand this year by 200,000 barrels per day (bpd) to a record 102 million bpd. Data from the Department of Energy (DOE) as of May 16 showed the latest average Manila price per liter of gasoline (RON91) is at P58, diesel at P52.95 and kerosene at P68.15. DOE data also showed year-to-date adjustments stood at a total net decrease of P5.65 per liter for diesel and P6.30 per liter for kerosene and a net increase of P4.20 per liter for gasoline.
The Manila Electric Co. (Meralco) recently commissioned its new 115 kilovolt (kV) – 34.5 kV substation in Real Road, Calamba City, Laguna. The company said the facility will relieve the neighboring Calamba substation and boost available capacity that will benefit customers in the city, as well as those in portions of the cities of Tanauan and Sto. Tomas in Batangas. “The project involved the energization of two 34.5 kV distribution feeders serving enterprise customers, housing complexes and subdivisions, and key establishments such as the Calamba City Hall and Sto. Tomas Doctors Hospital and Medical Center,” Meralco said in a statement.
The Board of directors of Yuchengco-led House of Investments, Inc. has approved the sale of 14.346% of EEI Corp.’s common shares to Industry Holdings and Development Corp. (IHDC). “IHDC’s entry as a strategic partner is deemed beneficial to EEI’s growth plans and restructuring efforts,” the listed holding firm said in a regulatory filing on Monday.The company said the move is part of efforts to review its business interests and to consolidate other businesses from the Yuchengco group of companies into House of Investments. Its board approved the block sale of 148.66-million common shares at P7.23 each for about P1.08 billion.The transaction comes after the company announced the sale of its 20% stake in EEI to the Romualdez family-led firm RYM Business Management Corp. for P1.25 billion at P6.03 each of the 207.26 million common shares. As a result of both sell-downs, the Yuchengcos will now own about 20.9% of EEI, which will remain as a portfolio investment of the company. EEI is one of the largest construction and contracting firms in the Philippines.
A national organization of 15 local trucker operator associations has asked the government to immediately implement an order digitizing port operations to eliminate “abusive” charges by international shipping lines, which are estimated to be in billions of pesos annually. The Confederation of Truckers Association of the Philippines (CTAP), in a letter dated May 16 and addressed to the Department of Transportation and Philippine Ports Authority, requested that the proposed Trusted Operator Program-Container Registry and Monitoring System (TOP-CRMS) be up and running the soonest. The implementation of TOP-CRMS has been deferred amid criticisms that it would bloat the already expensive logistics costs. A pet project of the Philippine Ports Authority, the proposed container tracking and monitoring system has been opposed by at least 17 other business groups, which went as far as urging lawmakers and even President Marcos to intervene and stop its implementation, saying the scheme was unnecessary and too costly.
The Philippines has detected 7 additional cases of omicron subvariant XBB.1.16, raising its tally to 11, according to the Department of Health. The 7 local XBB.1.16 cases were found in the Cordillera Administrative Region, Western Visayas, Mimaropa, Bicol Region and Central Luzon, the DOH's latest COVID-19 biosurveillance report showed. XBB.1.16, also known as "Arcturus," is a descendent lineage of XBB, a recombinant of two BA.2 descendent lineages. As of May 20, the country has 16,503 active COVID-19 cases, the DOH's COVID-19 Tracker showed.
Voting 267-0-1, the House of Representatives approved on third and final House Bill 7600 to strengthen the powers and functions of the Intellectual Property Office of the Philippines (IPOPHL), and amend the Intellectual Property Code (IP Code) to adapt to recent advancements in technology and further address piracy and counterfeiting. The bill defines counterfeit and pirated goods while authorizing the IPOPHL to gather intelligence information, and investigate violations of the IP Code and develop countermeasures to deter counterfeit or pirated goods or content. The bill also increases the range of administrative fines that can be imposed by the Director of Legal Affairs to a minimum of P 100,000 and a maximum of P1 million while the maximum additional fine for each day of a continuing violation is also raised from P1,000 to P10,000.
State-run National Power Corp. plans to borrow an additional P10 billion to pay for the fuel needs of the Small Power Utilities Group areas. NPC president and chief executive Fernando Martin Roxas said the agency would no longer pursue fuel rationing in the off-grid areas after the agency borrowed P5 billion from Landbank of the Philippines. “We’ve been able to borrow P5 billion. We will add an additional P10 billion from Landbank…to buy all of the fuel that we will need,” Roxas said. He said NPC sought the Monetary Board’s approval for the new borrowing, and they began to apply for the sovereign guarantee. Roxas earlier said NPC won’t implement power curtailment in SPUG areas despite budget constraints for fuel. Meanwhile, NPC targets to increase the share of renewable energy in the power supply of its off-grid areas to 25 percent by 2026 from a 2 two percent to date. Roxas said NPC was looking at various technologies, including solar.
With the enactment of RA 11898, also known as the Extended Producer Responsibility (EPR) Act of 2022, the Philippines moves one step closer to advancing a circular economy and addressing the country’s plastic waste problem towards a more sustainable future. Global food and beverage leader Nestlé Philippines is among the early, if not the earliest, advocates and adopters of EPR in the country. It has actively campaigned for the passage of the EPR Act through sustained dialogue with government policymakers, and active participation in the legislative process. Two years before the law was enacted, Nestlé PH had already started voluntarily practicing EPR through its initiatives to attain plastic neutrality. The DENR said RA 11898 is a good start and a wiser approach to waste reduction that allows producers to take on environmental responsibility and improves the equity in the process of waste management.
The Philippine Economic Zone Authority (PEZA) expressed its commitment to promote the halal industry in the Philippines. During a PTV Philippines briefing on Monday, PEZA public relations manager Aleem Siddiqui Guipal said the agency had signed a memorandum of understanding with the National Commission on Muslim Filipinos and Mindanao Development Authority in order to take a whole-of-government approach to support the sector. In addition, he said that strengthening the small and medium enterprises (SMEs) involved in the halal industry would help promote its growth. "First and foremost, the strategy that we are seeing is to uplift the domestic economy of halal by strengthening the SMEs and startups and provide them with a platform to promote their businesses as well," he said. Meanwhile, Guipal said investments had come in to create halal hubs in the Philippines. Malaysia has given P17.6 million while Saudi Arabia P10.4 million. The United Arab Emirates is expected to invest P11 million this year.