ECCP at Work

ECCP@Work Featured Articles | March 8, 2024

March 08, 2024

ECCP Online

ECCP at Work

House panel okays RBH 7 in bid to fast-track Cha-cha 

The Committee of the Whole House of Representatives approved RBH No. 7, which seeks to lift foreign equity limits on education, public utilities and advertising in the 1987 Constitution. On the same day, the panel also approved the committee report on RBH 7.

SEC sets guidelines on sustainable finance 

The SEC has adopted the Philippine Sustainable Finance Taxonomy Guidelines (STFG), taxonomy guidelines on sustainable finance to promote environmentally and socially sustainable economic activities. The STFG simplifies the assessment of micro, small and medium enterprises’ (MSMEs) activity for financing to ensure that MSMEs are not unduly excluded from participating in sustainable finance.

Moody’s: Economic growth, rate cuts to boost Philippine lenders

Solid economic growth and the potential for interest rate cuts are expected to boost lenders in the Asia-Pacific region this year, Moody’s Investors Service said, as it kept a “stable” outlook for 13 banking systems in the region including the Philippines. “We maintain a stable outlook for the Philippines’ banking system,” the rating company said. “Solid economic growth and the potential for rate cuts in the second half of 2024 will support economic recovery and limit asset quality stress.”

Philippines woos companies to help fund $43 billion worth of projects

The Philippines is reviving a push for companies to help fund infrastructure now worth $43 billion. President Ferdinand R. Marcos, Jr.’s administration wants to accelerate over a hundred projects with the private sector to ease strain on the government’s budget and to reduce foreign borrowings, said Ma. Cynthia Hernandez, who leads the agency in charge of public-private partnerships.

NEDA mulls tax breaks for e-motorcycles, hybrid vehicles

The National Economic and Development Authority said that government agencies began discussions on the possible expansion of Executive Order (EO) No. 12 to include electric motorcycles (e-motorcycles) and hybrid vehicles. Under the EO, tariffs for electric vehicles (EVs) and their parts and components were temporarily removed for five years. Prior to the order, tariff rates for some EVs ranged from 5-30%. However, the EO did not include two-wheeled EVs.

PhilHealth sets aside P243B for member benefits this year 

Armed with a 5 percent premium contribution rate, the PhilHealth is setting aside P243 billion to pay member claims for this year. “It will generate funds necessary for us to complete our benefit plans, and, more importantly, to sustain the reforms in the benefit packages,” PhilHealth president Emmanuel Ledesma said.

Tech, infra companies seen ‘favorable’ for IPO

Technology and infrastructure companies must capitalize on the growing market interest and tap the capital market for growth, according to Philequity Management, Inc. Vice President Miguel A. Agaro. The Monetary Board has kept its benchmark rate steady at a near 17-year high of 6.5% for a third straight meeting in February.

Government urged to develop natural gas industry

During the TWG meeting on Senate Bill 2247, Gareth Tungol, special legal counsel of Sen. Raffy Tulfo, said that developing the country’s natural gas industry would open up a larger market share for investors as government policy shifts toward clean energy. Senate Bill 2247 authored by Tulfo seeks to promote the development of a comprehensive legislative policy for the development of the natural gas sector.

Clark put on spotlight in Singapore Airshow

The Bases Conversion and Development Authority (BCDA) has put Clark on spotlight during a presentation at the Singapore Airshow and inaugural of Philippine Pavilion. BCDA Vice President for Business Development Erwin Kenneth Peralta's presentation pitched Clark as a choice destination for investors given its accessibility via air, sea and land travel aimed at building its reputation as an emerging aerotropolis.

IT-BPM sector revenues may hit $40B in 2024, says IBPAP

A local trade association of information technology (IT) and business process management (BPM) firms expect industry revenues to grow to $40 billion and employ 1.84 million employees by yearend, according to IT and Business Process Association of the Philippines President Jack Madrid. He cited that high-growth sectors include healthcare, banking and financial services, and traditional contact center services.

Wider digital transactions base needed for PDP 

The Bangko Sentral ng Pilipinas (BSP) said there is a need to broaden the base to increase digital transactions nationwide for the country to attain its Philippine Development Plan (PDP) targets, even as about 10 million FIlipinos are using InstaPay for digital transactions. Under the PDP, the country needs to see the share of digital payments increase to 60 to 70 percent of total retail payment transactions by 2028.

JCR keeps PHL credit rating on growth, debt-GDP ratio 

The country’s economic growth last year and debt-to-GDP ratio were cited by the Japanese credit rating agency as reasons for keeping the Philippine rating investment grade, according to the Bangko Sentral ng Pilipinas (BSP). The Japan Credit Rating Agency Ltd. (JCR) has kept the Philippines’s investment-grade credit rating of “A-” with a stable outlook. BSP said the JCR noted that the country’s economic growth, underpinned by domestic demand and resilience to external shocks, helped maintain the Philippines’s rating.

PBBM urges Australia to hike ‘green’ investments to PHL 

President Ferdinand R. Marcos Jr. on Wednesday called on Australia to increase its investments in the country’s “green” industries to help accelerate local efforts to mitigate the impact of climate change as the country is determined to make the transition towards sustainability. The President was able to secure P86 billion worth of investments, which includes renewable energy waste-to-energy technology, organic recycling technology, during his recent trip to Australia.

PHL signs second protocol to Asean-Australia-NZ FTA 

President Ferdinand R. Marcos Jr. pushed for the timely implementation of the upgraded protocol of the Asean-Australia-New Zealand Free Trade Agreement (AANZFTA) to sustain regional economic growth amid the projected slowdown in global trade this year. During the leaders’ plenary session, Marcos said the new framework will not only promote inclusive development, but also allow its signatories to adapt to “evolving multidimensional challenges” worldwide.   

High rice prices cited in 3.4% February inflation

Poor Filipinos disproportionately bore the burden of high rice prices in February, according to Tuesday’s latest inflation data released by the Philippine Statistics Authority (PSA). National Statistician Claire Dennis S. Mapa said rice prices accounted for 49 percent or 1.6 percentage points of the inflation of all income households and 79 percent or 3.3 percentage points of the 4.2 percent inflation experienced by the poorest Filipinos.

SC: DOE may take over oil firms’ operations during crisis 

The Supreme Court has declared that the Department of Energy (DOE) may take over oil industry operations in times of emergency upon the directive of the President. The Court declared as constitutional Section 14 (e) of Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 which authorizes the DOE to take over operations of private entities in the oil industry given certain conditions. The Court’s ruling reversed the 2013 decision issued by the Court of Appeals’ Ninth Division declaring the provision unconstitutional.

PH crypto market booms as bitcoin soars to 69000 dollars

Bitcoin’s recent rally above its 2021 peak to $69,000 (P3.85 million) is driving up interest within the Philippine cryptocurrency space, attracting attention from larger financial institutions eager to join the sector. Philippine Digital Asset Exchange (PDAX), one of the largest cryptocurrency exchanges in the Philippines, has recorded a dramatic increase in activity in recent months, its founder and CEO Nichel Gaba said.

BSP: More rate hikes ‘unlikely’

The Bangko Sentral ng Pilipinas (BSP) would “unlikely” tighten monetary policy settings—or raise rates—even more despite the faster price gains seen in February, Governor Eli Remolona Jr. said as he stressed “it’s still too soon to declare victory” in its inflation battle. At the same time, Remolona noted that the timing of possible rate cuts is still uncertain at this point amid inflationary threats.

PH vehicle production accelerates by 21.7% in Jan

Vehicle production in the Philippines increased by more than a fifth in January, outpacing the growth seen in three of its five peers in the Association of Southeast Asian Nations (Asean) on robust local demand. Data released by the Asean Automotive Federation (AAF), an umbrella group from member economies of the regional bloc, showed that 10,771 new vehicles were manufactured during the month, marking 21.7-percent growth compared to the 8,848 vehicles assembled during the same month in 2023.

DOF wants to extract more funds from mining firms

The Department of Finance (DOF) wants to collect more income-based taxes and royalties from mining firms than what House lawmakers were hoping to raise under a bill that seeks to establish a new fiscal regime for the industry. The DOF said the tweaks aim to “improve” House Bill (HB) No. 8937, which is  now expected to generate P47 billion in incremental revenues from 2024 to 2028.

ARTA pushes for faster permitting process in RE

The Anti-Red Tape Authority (ARTA) proposed the drafting of a joint memorandum circular or  an executive order that would help expedite the permitting process in the renewable energy (RE) industry. At the  stakeholders meeting on February 28 in Quezon City, ARTA director-general Ernesto Perez made this proposal as part of the study on policies and and regulations that would further expedite the full establishment of RE in the Philippines. 

DOT looks to make PH the next Asian tourism powerhouse

Speaking at ITB Berlin, Tourism Secretary Christina Frasco shared President Ferdinand Marcos’ vision for the country’s tourism industry: “Make the Philippines the next Asian Tourism Powerhouse!” ITB Berlin, or the Internationale Tourismus-Börse 2024, is the biggest international travel and trade fair in the world. The Philippines has been a participant of the ITB for the last 30 years and this year, 161 countries with over 25,000 delegates attended the 3-day event from March 5-7.

BIR expands list of meds exempted from VAT

The Bureau of Internal Revenue has issued the updated list of value-added tax (VAT)-exempt medicines for various diseases such as cancer and hypertension. In its latest revenue memorandum circular, BIR approved the list of the 12 percent VAT-exempt products under the Tax Reform for Acceleration and Inclusion Law and the Corporate Recovery and Tax Incentives for Enterprises Act. This comes after the Food and Drug Administration of the Department of Health endorsed the updated list. 

Study underway on repurposing of ports for offshore wind projects 

The Asian Development Bank (ADB) is eyeing to produce by October the action plan on the repurposing of 10 ports as infrastructure for local offshore wind (OSW) developments. Shigeru Yamamura, ADB principal energy specialist, said the notice to proceed to the consultants tapped to undertake  the action plan  will be issued by the end of the month or early next month. The action plan is part of the pre-feasibility study on the repurposing of the ports.

Tourism arrivals breach 1.2M, receipts at $652M 

International visitor arrivals to the Philippines breached the 1.2-million mark in the first two months of 2024. Secretary Christina Garcia Frasco of the Department of Tourism (DOT) made the announcement at the Philippine Pavilion of  the Internationale Tourismus-Börse (ITB) 2024 Convention in Berlin, Germany on March 5. The DOT also reported that based on data from the Visitor Sample Survey, estimated visitor receipts for January  have totaled $652.26 million, or 4.84 percent higher than the $622.14 million in the same month in 2023.

BSP open to issuing more licenses to digital banks 

The BSP is considering issuing more licenses to digital banks on top of the six operating now after receiving expressions of interest from several entities, its governor said. “We’re looking at what’s going on and we’re trying to understand the new business models that they bring,” Governor Remolona stated. BSP Director Melchor T. Plabasan said the industry report on the digital banking sector would be released by April.

All eyes on lack of storage, logistics costs as food drives Philippine inflation 

The Marcos administration should work with the private sector in cutting logistics costs while building more storage facilities nationwide to ease the impact of rising prices, economists said. An archipelagic nation like the Philippines should ensure that storage facilities for basic commodities such as rice and vegetables, as well as logistics networks, are “sufficient and working well,” Genny F. Lapina, an agricultural economist at the University of the Philippines Los Baños (UPLB), said in an e-mail.

Uncapping the Philippines’ renewable energy potential 

Renewable energy is quickly becoming integral to the future of economic development, not only because of concerns about mitigating the effects on climate change, but also as a sustainable and efficient means to meet the ever-increasing energy needs of a developing world. In fact, the International Energy Agency (IEA) found that countries all over the world added as much as 50% more renewable capacity in 2023 than in 2022, predicting that the pace will accelerate over the next five years until it has hit a peak.

Insurers told to make financial reports more transparent 

The Insurance Commission (IC) is requiring covered companies to apply a new set of accounting policies that will make financial reports more transparent and universally comparable starting Jan. 1 next year. Companies must use Philippine Financial Reporting Standard 17 (PFRS 17) by then, the regulator said in a March 1 circular posted on its website. “Companies may opt to adopt PFRS 17 in the preparation of their annual financial statements starting Jan. 1, 2023,” it said.

The role of natural gas in the Philippines’ energy mix 

The Philippines has a looming energy crisis. The Malampaya gas field, currently supplying 20% of Luzon’s electricity requirements, is expected to be commercially depleted by 2027 despite President Ferdinand “Bongbong” R. Marcos, Jr.’s efforts to boost its production amidst a new 15-year contract. Formidable electricity production challenges such as an increasing demand due to an ever-increasing population require the Philippines and the Department of Energy (DoE) to find new sources of energy that will not only fill the void that Malampaya will leave but also be sustainable for the environment.

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