December 05, 2023
ECCP at Work
Former Tariff Commissioner George Manzano said that the increase in port storage fees could be inflationary, given the country’s dependence on imported goods. Manzano noted that the Consumer Price Index (CPI) has a number of imported goods. Any increase in the price of these commodities, he said, will lead to an “incremental cost push price pressure.”
The slowdown in the price increases in food, transportation, and restaurants and accommodation brought down inflation in November to 4.1%, according to the PSA. “With the right interventions in place, including the proper and timely deployment of trade policy, we are confident that we can effectively manage inflation and prevent unnecessary upticks in prices of goods and commodities to safeguard the purchasing power of Filipino families, especially those from the most vulnerable sectors,” NEDA Secretary Balisacan said.
Citing the BloombergNEF Climate 2023 report, the Department of Energy (DOE) said the Philippines moved up six places to number four after India, China and Chile following the country’s significant progress in transitioning to RE over the last two years. According to the report, the Philippines stands out as one of the few that have implemented auctions, feed-in-tariffs, net metering schemes, tax incentives and with a strong target for renewable energy.
According to the World Bank, growth in East Asia and the Pacific in 2023 will be higher than average growth projected for all other emerging market and developing economies, albeit lower than previously projected. The multilateral lender’s latest outlook, as of October, put Philippine gross domestic product (GDP) growth at 5.6 percent for 2023.
The Philippines is striking a balance between achieving development and addressing the worsening climate crisis, Environment Secretary Maria Antonia Yulo-Loyzaga said as the country has yet to make a commitment to move to a net zero emissions economy. The Philippines is reportedly the only country in the Association of Southeast Asian Nations that has not committed to a net zero target.
The Philippines may access $10 billion in climate financing over the next six years through the Asian Development Bank (ADB) to help the country implement its commitments to climate action under the Paris Agreement that was adopted in 2015. ADB President Masatsugu Asakawa made this public at a high-level dialogue on financing coalitions at Conference of the Parties (COP)28 or the 2023 United Nations Climate Change Conference in Dubai. Asakawa also said this was part of the new country program covering 2024-2029 that they are developing with the national government, which will prioritize climate action and promote inclusive growth.
A BusinessWorld poll of 15 analysts yielded a median estimate of 4.4% for November inflation, which is also the midpoint of the 4% to 4.8% estimate given by the Bangko Sentral ng Pilipinas (BSP) last week. If realized, last month’s consumer price index (CPI) would be slower than 4.9% in October and 8% logged a year earlier. However, it would mark the 20th straight month of inflation breaching the BSP’s 2-4% target range. Analysts said high base effects may have significantly helped in bringing down the November figure.
The European Chamber of Commerce of the Philippines opposed the increase in storage charges, saying it will make the country less competitive for trade. Meanwhile, the Anti-Red Tape Authority (ARTA) said that it is waiting for any formal request regarding the proposed hike in port storage fees.
The DoE was responding to the Philippines’ fourth-place ranking in the Climatescope report issued by BloombergNEF. According to the report, the Philippines made the top five for the first time thanks to its auctions, feed-in tariffs, net-metering schemes, tax incentives, and strong targets for RE. The report highlighted the DoE’s second green energy auction, in which it awarded 3.4 gigawatts (GW) of RE capacity.
The economy is seen to grow by 5.6 percent this year, according to Sun Life Investment Management and Trust Corp. (SLIMTC), with the economy’s performance for 2023 highly dependent on government’s spending. The 5.6 percent forecast for the full year is already an upgrade from the previous projection of 4.8 percent, mainly due to the third quarter upswing of the economy after the government’s implementation of its spending catch-up plans, SLIMTC president and chief investment officer Michael Enriquez told reporters on the sidelines of an event held in Taguig last week. SLIMTC’s forecast, however, still falls below the government’s full-year projection of six to seven percent. To achieve the lower end of the target range of six percent, the economy needs to grow this quarter by at least 7.2 percent.
The Manila International Airport Authority (MIAA) has started the upgrade of the taxiway at Ninoy Aquino International Airport (NAIA) which is targeted to be completed in 2025. “Our goal is to concrete all taxiways because it is better suited for wide-body aircraft. This will significantly reduce the need for pavement repairs caused by the inevitable deterioration of asphalt,” said Antonio Mendoza, MIAA assistant general manager for engineering. MIAA officer-in-charge Bryan Co said the upgrades are part of a series, with further developments planned following a geotechnical investigation of NAIA’s runways, taxiways and aprons. “The investigation will determine the aircraft classification number and pavement classification number, guiding our subsequent upgrades. This standardized international airport pavement rating system will also assist airlines in choosing suitable aircraft for NAIA,” Co said.
“Globally, the need for data centers is massive. In the Philippines, we have a number of data center groups and a number of telcos have been aggressive in that space. Renewables, there are also a number of big players in there. A lot of that would contribute to this growth,” Rick Santos, chairman and chief executive officer of Santos Knight Frank, said in a briefing last week. The Philippines is seen as an attractive location for hyperscalers due to the country’s strategic position in the Southeast Asian region, he said. The real estate sector is expected to end this year strong amid contributions from the commercial and residential segments, Mr. Santos said.
The Philippines’ digital economy is set to hit $24 billion this year in terms of value of goods sold, continuing its double-digit climb towards $35 billion by 2025, making it one of the fastest growing digital economies in Southeast Asia. “This momentum is poised to continue, fueled by the immense potential of (artificial intelligence) and the digital participation of internet users outside Metro Manila which could drive medium to long term growth,” Google Philippines Head of Data and Insights Nikki L. Del Gallego. From a broader perspective, the report also showed that the revenue from the digital economy in Southeast Asia is poised to hit $100 billion this year, growing by as much as 1.7 times as fast as the region’s gross merchandise value (GMV).
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 52.7 in November from 52.4 in October, indicating a strong improvement in operating conditions, the strongest since February. A PMI reading above the 50 mark denotes improvement in operating conditions, while a reading below 50 signals deterioration. S&P Global noted the latest PMI survey data showed an uptick in new orders and output. “Indeed, November saw rates of growth quicken to eight- and ten-month highs, respectively. Firms noted that strong demand conditions both in domestic and foreign markets, new client wins and increased contract work boosted overall sales and in turn spurred greater production,” it said.
Speaking at a forum entitled, “No Paris without the Ocean: Partnerships to Activate Ocean-Climate Solutions at Scale,” a COP28 side event held at the Ocean Pavilion, Secretary Loyzaga, Head of the Philippine Delegation to the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP28), stressed the importance of looking beyond national jurisdictions in the high seas to safeguard and preserve the integrity of marine ecosystems. “We call for all to work together, to forge the adoption of BBNJ, and to align with the Paris Agreement, the Kunming-Montreal Global Biodiversity Framework, and the Sustainable Development Goals. We must unite today to protect the ocean that we need for the future we, and generations to come, all want. Very simply, our survival depends on it.”
The Philippines and the World Economic Forum (WEF) have signed agreements to boost the blue carbon ecosystem and address plastic pollution on the sidelines of the United Nations’ climate conference in Dubai, the Palace said. After the signing of the two agreements, both the Philippines and the WEF will start sharing best practices to the communities, civil societies and corporate sector to translate the agreements “into practical progress,” WEF Center for Nature and Climate managing director Neo Gim Huay said in a Palace press release. Environment and Natural Resources Secretary Ma. Antonio Yulo-Loyzaga signed the agreement on behalf of the Philippine government. The WEF official said the Philippines as an archipelagic nation is “a very important economy.”
“From 2023 to 2027, we have committed P227 billion, wherein P171 billion is for capital expenditures (capex), and P56 billion is for operating expenses (opex),” Maynilad Chief Operating Officer Randolph T. Estrellado said in Filipino during a public hearing on Monday. total, about P397 billion is set aside for capex, and P477 billion for opex, he said. Maynilad aims to expand its service coverage to 95.5% by 2027 and 98.6% by 2047, providing potable water access to 1.8 million consumers.
The DA said it successfully updated its National Color-Coded Agricultural Guide (NCCAG) Map for the first time since the digital tool was launched in 2017. “The NCCAG map is a database of map overlays that shows the natural suitability of economically important crops and the eight  major hazards based on projected climate scenarios for 2050,” the DA said on Monday. DA Climate Resilient Agriculture Office (CRAO) Director Alicia G. Ilaga said updating the map was critical in ensuring that the digital tool is providing “accurate” and “reliable” information to farmers. The DA CRAO led the updating of the NCCAG map.
Basic Energy Corp. said it secured the support of key government agencies after it presented its Green Energy E-Transport Program (GEEP) plan to secure a minimum of 82 franchises for each province in the country for the deployment of electric buses (e-buses) to support the modernization of public utility vehicles. Earlier, Basic Energy said under the GEEP, it will deploy 6,500 units of Class 2 e-buses. The company intended to tap the National Electrification Administration to collaborate with distribution utilities to install 5 megawatts (MW) solar and battery energy storage systems (BESS) each, to cover the electricity needs of e-buses deployed in each province.
The province of Bohol now has its own Tourist Rest Area (TRA), formally turned over by the Department of Tourism (DOT) over the weekend. The TRA will cater to tourists passing through the town of Dauis, which serves as a gateway to multiple tourist destinations in the province such as the famed Alona Beach in Panglao, Virgin Island Sandbar, Balicasag Island, and Baclayon Church. “Here in Bohol, we view this gem of an island to be a source of national pride because you have, by your work, and by your example, established a sustainable eco-tourism destination where the public and private sector work hand in hand. And as a result of this initiative, you are now globally renowned as the Philippines' very first UNESCO Global Geopark,” DOT Secretary Christina Frasco said during the TRA inauguration.