![\"National](\"https://live.staticflickr.com/65535/53439991719_eaac5b6d50_o.jpg\")
Year on year, the debt stock rose by 6.3% from P13.64 trillion.By Keisha B. Ta-asan, Reporter
\nInflation slowed to 3.9% in December, settling within the central bank’s 2-4% target range for the first time in nearly two years, amid easing prices of food and utilities.
\nPreliminary data from the Philippine Statistics Authority (PSA) showed the overall year on year increase in prices of widely used goods and services eased to 3.9% in December, from 4.1% in November and 8.1% a year ago.
\nDecember\u2019s inflation print was the slowest reading in 22 months or since the 3% reading in February 2022.
\nThe latest consumer price index (CPI) is a tad lower than the 4% median estimate in a BusinessWorld poll last week. It also settled within the 3.6% to 4.4% forecast for the month given by the Bangko Sentral ng Pilipinas (BSP).
\nHowever, inflation averaged 6% for 2023, slightly higher than the 5.8% in 2022. This marked the second straight year that inflation breached the BSP\u2019s 2-4% target band.
\nThe 6% print was the highest in 14 years or since the 8.2% full-year average in 2008, at the height of the global financial crisis.
\n\u201cThe latest inflation outturn is consistent with the BSP\u2019s projections that inflation will likely moderate in the near term due to easing supply-side price pressures and negative base effects,\u201d the BSP said in a statement.
\nCore inflation, which discounted volatile prices of food and fuel, stood at 4.4% percent in December \u2014 slower than the previous month\u2019s 4.7% and the 6.9% a year earlier.
\nFor the entire year, core inflation averaged 6.6%, much faster than the 3.9% print in 2022.
\nAt a press briefing, National Statistician Claire Dennis S. Mapa said December inflation print was due mainly the 1.5% growth in prices of housing, water, electricity, gas and other fuels, which was slower than the 2.5% in November.
\nThis was followed by the 5.4% rise in the food and non-alcoholic beverages index, easing from 5.7% in November.
\nFood inflation alone went down to 5.5% in December, from 5.8% in November and 10.6% a year ago.
\nHowever, rice inflation quickened to 19.6% in December from 15.8% in November. It was also the most significant contributor to December inflation, adding 1.7 percentage points (ppt) to the headline print.
\nAt 19.6%, rice inflation was the highest since the 22.9% recorded in March 2009.
\nMr. Mapa said the average price of regular milled rice last month went up to P48.50 per kilo from P46.73 per kilo in November. The average price of well-milled rice also rose to P53.82 per kilo in December from an average of P51.99 per kilo a month earlier.
\nYear on year, prices of regular milled rice and well-milled rice grew by 22.3% and 22.4%, respectively.
\nIn a statement, the National Economic and Development Authority (NEDA) said the extension of the Executive Order (EO) No. 50, which extended the Most Favored Nation (MFN) reduced tariff rates for key agricultural commodities like pork, corn, and rice, is crucial to ensure a stable food supply in the Philippines.
\n\u201cAmid an uptrend in international rice prices and the expected negative impact of the El Ni\u00f1o phenomenon, the Interagency Committee on Inflation and Market Outlook will closely monitor the situation and propose further temporary tariff adjustments, if necessary,\u201d NEDA Secretary Arsenio M. Balisacan said.
\n\u201cWe will also push for trade facilitation measures to reduce other non-tariff barriers. While our medium-term objective to boost agricultural productivity remains, it is important to augment domestic supply to ease inflationary pressures on consumers, particularly those in low-income households,\u201d he added.
\nMeanwhile, transport inflation inched up 0.4% in December, reversal from the 0.8% contraction in November.
\nPSA\u2019s Mr. Mapa said passenger transport by road such as jeepney and tricycle fares increased 2.9% in December from 2.4% a month prior.
\nPrices of diesel decreased by 13% year on year, but lower than the 18.4% decline in November. Gasoline also recorded a -3.9% inflation rate from the -4.8% seen in the previous month.
\nIn December alone, pump price adjustments stood at a net increase of P0.3 per liter for gasoline. Diesel and kerosene prices had a net decrease of P0.35 and P0.51 respectively.
\nMeanwhile, inflation for the bottom 30% income households edged higher to 5% in December from 4.9% in a month prior. Year to date, the inflation rate for this income group stood at 6.7%.
\nInflation in the National Capital Region (NCR) decelerated to 3.5% in December from the 4.2% print in November and 7.6% a year ago.
\nOutside of NCR, consumer prices slowed to 4% from 4.1% in November and 8.2% in December 2022.
\nSTILL HAWKISH OUTLOOK
\nThe BSP said risks to the inflation outlook remains significantly on the upside, citing possible inflationary pressures from higher transport charges, increased electricity rates, rising oil prices, and elevated food prices due to strong El Ni\u00f1o conditions.
\n\u201cLooking ahead, the Monetary Board deems it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident,\u201d the BSP said.
\n\u201cThe BSP will continue to monitor inflation expectations and second-round effects and take appropriate action as needed to bring inflation back to the target, in keeping with the BSP\u2019s price stability mandate,\u201d it added.
\nHSBC economist for ASEAN (Association of Southeast Asian Nations) Aris Dacanay in a note said export prices of rice increased to $659 per metric ton amid lingering El Ni\u00f1o risks to supply.
\n\u201cNot only is this the highest since 2008, but we have yet to see global rice prices peak. And with rice being a heavy component of the Philippines\u2019 CPI basket, elevated export prices will likely put a floor under how much inflation can moderate,\u201d he said.
\nInflation may also quicken to above the 2-4% target in the second quarter due to unfavorable base effects.
\n\u201cBut once these base effects wear off, we expect headline CPI to immediately ease on a year-on-year basis and average within 3-3.5% in the second half,\u201d he said.
\n\u201cKeeping inflation more manageable is the extension of EO 50, which rolls over the low tariff rates for key food items such as rice and pork. The BSP’s tight monetary stance will also continue to stem any price pressures coming from core items such as rent and housing,\u201d he said.
\nHSBC lowered its full-year headline inflation forecast to 3.5% in 2024 from 4.1% previously.
\n\u201cThe BSP now has more leg room to adjust monetary policy with the inflation outlook more benign. The larger concern now is the differential between BSP and Fed rates,\u201d Mr. Dacanay said.
\nMr. Dacanay said he expects the BSP to cut policy rates alongside the US Fed starting second quarter this year.
\n\u201cWe then expect the BSP to clock a similar pace as the Fed by cutting its policy rate by 25bp in each quarter until the benchmark rate reaches 5% in the third quarter of 2025,\u201d he added.
\nThe BSP has kept its benchmark interest rate unchanged at a 16-year high of 6.5% during its December policy meeting. This was after it hiked 450 basis points (bps) from May 2022 to October 2023 to tame inflation.
\nOn the other hand, the US Federal Reserve kept borrowing costs unchanged at 5.25-5.5% in December, following the 525-bp rate hikes it did from March 2022 to July 2023.
\nCiti Economist for the Philippines Nalin Chutchotitham said even though upside risks remain, inflation expectations are now better anchored.
\n\u201cWe expect the BSP to maintain its policy rate through the first half of 2024, to help anchor inflation at around the mid-point of the policy target. We expect gradual rate cuts from third quarter onwards as inflation shows a steady declining trend,\u201d she said.
\nMs. Chutchotitham also noted that the BSP will likely maintain at least a 50-bp interest rate gap with the Fed to help ensure the peso\u2019s stability against the dollar.
\n\u201cWe forecast the key rate at 5.5% at end-2024, and at 4.5% at end-2025,\u201d she said.
\nThe Monetary Board is scheduled to have its first policy review this year on Feb. 15.
\n", "content_text": "By Keisha B. Ta-asan, Reporter\nInflation slowed to 3.9% in December, settling within the central bank’s 2-4% target range for the first time in nearly two years, amid easing prices of food and utilities.\nPreliminary data from the Philippine Statistics Authority (PSA) showed the overall year on year increase in prices of widely used goods and services eased to 3.9% in December, from 4.1% in November and 8.1% a year ago.\nDecember\u2019s inflation print was the slowest reading in 22 months or since the 3% reading in February 2022.\nThe latest consumer price index (CPI) is a tad lower than the 4% median estimate in a BusinessWorld poll last week. It also settled within the 3.6% to 4.4% forecast for the month given by the Bangko Sentral ng Pilipinas (BSP).\nHowever, inflation averaged 6% for 2023, slightly higher than the 5.8% in 2022. This marked the second straight year that inflation breached the BSP\u2019s 2-4% target band.\nThe 6% print was the highest in 14 years or since the 8.2% full-year average in 2008, at the height of the global financial crisis.\n\u201cThe latest inflation outturn is consistent with the BSP\u2019s projections that inflation will likely moderate in the near term due to easing supply-side price pressures and negative base effects,\u201d the BSP said in a statement.\nCore inflation, which discounted volatile prices of food and fuel, stood at 4.4% percent in December \u2014 slower than the previous month\u2019s 4.7% and the 6.9% a year earlier.\nFor the entire year, core inflation averaged 6.6%, much faster than the 3.9% print in 2022.\nAt a press briefing, National Statistician Claire Dennis S. Mapa said December inflation print was due mainly the 1.5% growth in prices of housing, water, electricity, gas and other fuels, which was slower than the 2.5% in November.\nThis was followed by the 5.4% rise in the food and non-alcoholic beverages index, easing from 5.7% in November.\nFood inflation alone went down to 5.5% in December, from 5.8% in November and 10.6% a year ago.\nHowever, rice inflation quickened to 19.6% in December from 15.8% in November. It was also the most significant contributor to December inflation, adding 1.7 percentage points (ppt) to the headline print.\nAt 19.6%, rice inflation was the highest since the 22.9% recorded in March 2009.\nMr. Mapa said the average price of regular milled rice last month went up to P48.50 per kilo from P46.73 per kilo in November. The average price of well-milled rice also rose to P53.82 per kilo in December from an average of P51.99 per kilo a month earlier.\nYear on year, prices of regular milled rice and well-milled rice grew by 22.3% and 22.4%, respectively.\nIn a statement, the National Economic and Development Authority (NEDA) said the extension of the Executive Order (EO) No. 50, which extended the Most Favored Nation (MFN) reduced tariff rates for key agricultural commodities like pork, corn, and rice, is crucial to ensure a stable food supply in the Philippines.\n\u201cAmid an uptrend in international rice prices and the expected negative impact of the El Ni\u00f1o phenomenon, the Interagency Committee on Inflation and Market Outlook will closely monitor the situation and propose further temporary tariff adjustments, if necessary,\u201d NEDA Secretary Arsenio M. Balisacan said.\n\u201cWe will also push for trade facilitation measures to reduce other non-tariff barriers. While our medium-term objective to boost agricultural productivity remains, it is important to augment domestic supply to ease inflationary pressures on consumers, particularly those in low-income households,\u201d he added.\nMeanwhile, transport inflation inched up 0.4% in December, reversal from the 0.8% contraction in November.\nPSA\u2019s Mr. Mapa said passenger transport by road such as jeepney and tricycle fares increased 2.9% in December from 2.4% a month prior.\nPrices of diesel decreased by 13% year on year, but lower than the 18.4% decline in November. Gasoline also recorded a -3.9% inflation rate from the -4.8% seen in the previous month.\nIn December alone, pump price adjustments stood at a net increase of P0.3 per liter for gasoline. Diesel and kerosene prices had a net decrease of P0.35 and P0.51 respectively.\nMeanwhile, inflation for the bottom 30% income households edged higher to 5% in December from 4.9% in a month prior. Year to date, the inflation rate for this income group stood at 6.7%.\nInflation in the National Capital Region (NCR) decelerated to 3.5% in December from the 4.2% print in November and 7.6% a year ago.\nOutside of NCR, consumer prices slowed to 4% from 4.1% in November and 8.2% in December 2022.\nSTILL HAWKISH OUTLOOK\nThe BSP said risks to the inflation outlook remains significantly on the upside, citing possible inflationary pressures from higher transport charges, increased electricity rates, rising oil prices, and elevated food prices due to strong El Ni\u00f1o conditions.\n\u201cLooking ahead, the Monetary Board deems it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident,\u201d the BSP said.\n\u201cThe BSP will continue to monitor inflation expectations and second-round effects and take appropriate action as needed to bring inflation back to the target, in keeping with the BSP\u2019s price stability mandate,\u201d it added.\nHSBC economist for ASEAN (Association of Southeast Asian Nations) Aris Dacanay in a note said export prices of rice increased to $659 per metric ton amid lingering El Ni\u00f1o risks to supply.\n\u201cNot only is this the highest since 2008, but we have yet to see global rice prices peak. And with rice being a heavy component of the Philippines\u2019 CPI basket, elevated export prices will likely put a floor under how much inflation can moderate,\u201d he said.\nInflation may also quicken to above the 2-4% target in the second quarter due to unfavorable base effects.\n\u201cBut once these base effects wear off, we expect headline CPI to immediately ease on a year-on-year basis and average within 3-3.5% in the second half,\u201d he said.\n\u201cKeeping inflation more manageable is the extension of EO 50, which rolls over the low tariff rates for key food items such as rice and pork. The BSP’s tight monetary stance will also continue to stem any price pressures coming from core items such as rent and housing,\u201d he said.\nHSBC lowered its full-year headline inflation forecast to 3.5% in 2024 from 4.1% previously.\n\u201cThe BSP now has more leg room to adjust monetary policy with the inflation outlook more benign. The larger concern now is the differential between BSP and Fed rates,\u201d Mr. Dacanay said.\nMr. Dacanay said he expects the BSP to cut policy rates alongside the US Fed starting second quarter this year.\n\u201cWe then expect the BSP to clock a similar pace as the Fed by cutting its policy rate by 25bp in each quarter until the benchmark rate reaches 5% in the third quarter of 2025,\u201d he added.\nThe BSP has kept its benchmark interest rate unchanged at a 16-year high of 6.5% during its December policy meeting. This was after it hiked 450 basis points (bps) from May 2022 to October 2023 to tame inflation.\nOn the other hand, the US Federal Reserve kept borrowing costs unchanged at 5.25-5.5% in December, following the 525-bp rate hikes it did from March 2022 to July 2023.\nCiti Economist for the Philippines Nalin Chutchotitham said even though upside risks remain, inflation expectations are now better anchored.\n\u201cWe expect the BSP to maintain its policy rate through the first half of 2024, to help anchor inflation at around the mid-point of the policy target. We expect gradual rate cuts from third quarter onwards as inflation shows a steady declining trend,\u201d she said.\nMs. Chutchotitham also noted that the BSP will likely maintain at least a 50-bp interest rate gap with the Fed to help ensure the peso\u2019s stability against the dollar.\n\u201cWe forecast the key rate at 5.5% at end-2024, and at 4.5% at end-2025,\u201d she said.\nThe Monetary Board is scheduled to have its first policy review this year on Feb. 15.", "date_published": "2024-01-05T13:02:16+08:00", "date_modified": "2024-01-05T14:40:13+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/EG-5526.jpg", "tags": [ "Keisha B. Ta-asan", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=567037", "url": "https://www.bworldonline.com/top-stories/2024/01/05/567037/bsp-to-limit-its-forex-intervention/", "title": "BSP to limit its forex intervention", "content_html": "By Keisha B. Ta-asan, Reporter
\nTHE BANGKO SENTRAL ng Pilipinas (BSP) is looking to limit its foreign exchange intervention on markets by finalizing a new framework this year, its chief said on Thursday.
\nIn his first public event this year at the Rotary Club\u2019s weekly meeting, BSP Governor Eli M. Remolona, Jr. said the central bank aims to make the peso more competitive and reduce restrictions in the foreign exchange market.
\n\u201cWe\u2019re developing a framework for intervention\u2026 We think intervention should only happen during times of stress. It\u2019s meant to contain stress,\u201d he said.
\nMr. Remolona told reporters that BSP Senior Assistant Governor Edna C. Villa will head the central bank\u2019s Financial Markets department, replacing retired Ma. Ramona Gertrudes D.T. Santiago.\u00a0
\nThe foreign exchange framework will also be implemented this year, he said.
\nThe BSP chief has instructed Ms. Villa to identify the Philippines\u2019 peers in the region when it comes to movements against the dollar.
\n\u201cWe want to do things in the right way. We want to do things based on fundamentals and also based on what we know is going on in the markets,\u201d he said.
\nMeanwhile, Mr. Remolona noted that October 2022 was a stressful episode for the central bank and the foreign exchange market.\u00a0
\n\u201cThose are the events in which we want to intervene,\u201d he said. \u201cI think we\u2019ve been intervening a bit too much. If it\u2019s about containing stress, that also means intervention should be infrequent.\u201d
\nIn October 2022, the peso reached its record low of P59 against the dollar. This also caused the peso to add to inflationary pressures during that time, which prompted the BSP to intervene in the foreign exchange market and raise interest rates.\u00a0
\nThe peso has since rebounded to the P55 level, closing at P55.50 against the dollar on Thursday.
\nTo tame inflation, the Monetary Board hiked borrowing costs by 450 basis points (bps) from May 2022 to October 2023. This has brought the key interest rate to 6.5%, its highest in 16 years.
\nMr. Remolona said the current 6.5% policy rate is still appropriate to ensure growth and tame inflation at the same time.\u00a0
\n\u201cPeople say we\u2019ve been tightening too much\u2026 that\u2019s a very difficult challenge because we want to make sure that we don\u2019t tighten unnecessarily,\u201d he said.
\nHowever, the BSP chief said there are still upside risks to inflation, but he is hoping that inflation will settle within the 2-4% target range for most of 2024.
\nBSP sees inflation settling at an average of 6% in 2023, before easing to 3.7% in 2024 and 3.2% in 2025.
\nA BusinessWorld poll last week yielded a median estimate of 4% for December headline inflation, within the BSP\u2019s 3.6-4.4% forecast for the month. This is slightly slower than 4.1% in November but significantly below 8.1% in December 2022.
\nIf realized, December could mark the first time that inflation met the central bank\u2019s 2-4% target after 20 straight months. It would also be the slowest since the 3% print in February 2022.
\nThis would bring the 2023 inflation average to 6%, matching the BSP\u2019s baseline forecast.
\nThe Philippine Statistics Authority will release December consumer price index data on Friday.
\n", "content_text": "By Keisha B. Ta-asan, Reporter \nTHE BANGKO SENTRAL ng Pilipinas (BSP) is looking to limit its foreign exchange intervention on markets by finalizing a new framework this year, its chief said on Thursday.\nIn his first public event this year at the Rotary Club\u2019s weekly meeting, BSP Governor Eli M. Remolona, Jr. said the central bank aims to make the peso more competitive and reduce restrictions in the foreign exchange market. \n\u201cWe\u2019re developing a framework for intervention\u2026 We think intervention should only happen during times of stress. It\u2019s meant to contain stress,\u201d he said.\nMr. Remolona told reporters that BSP Senior Assistant Governor Edna C. Villa will head the central bank\u2019s Financial Markets department, replacing retired Ma. Ramona Gertrudes D.T. Santiago.\u00a0\nThe foreign exchange framework will also be implemented this year, he said.\nThe BSP chief has instructed Ms. Villa to identify the Philippines\u2019 peers in the region when it comes to movements against the dollar.\n\u201cWe want to do things in the right way. We want to do things based on fundamentals and also based on what we know is going on in the markets,\u201d he said.\nMeanwhile, Mr. Remolona noted that October 2022 was a stressful episode for the central bank and the foreign exchange market.\u00a0\n\u201cThose are the events in which we want to intervene,\u201d he said. \u201cI think we\u2019ve been intervening a bit too much. If it\u2019s about containing stress, that also means intervention should be infrequent.\u201d\nIn October 2022, the peso reached its record low of P59 against the dollar. This also caused the peso to add to inflationary pressures during that time, which prompted the BSP to intervene in the foreign exchange market and raise interest rates.\u00a0\nThe peso has since rebounded to the P55 level, closing at P55.50 against the dollar on Thursday.\nTo tame inflation, the Monetary Board hiked borrowing costs by 450 basis points (bps) from May 2022 to October 2023. This has brought the key interest rate to 6.5%, its highest in 16 years.\nMr. Remolona said the current 6.5% policy rate is still appropriate to ensure growth and tame inflation at the same time.\u00a0\n\u201cPeople say we\u2019ve been tightening too much\u2026 that\u2019s a very difficult challenge because we want to make sure that we don\u2019t tighten unnecessarily,\u201d he said.\nHowever, the BSP chief said there are still upside risks to inflation, but he is hoping that inflation will settle within the 2-4% target range for most of 2024.\nBSP sees inflation settling at an average of 6% in 2023, before easing to 3.7% in 2024 and 3.2% in 2025.\nA BusinessWorld poll last week yielded a median estimate of 4% for December headline inflation, within the BSP\u2019s 3.6-4.4% forecast for the month. This is slightly slower than 4.1% in November but significantly below 8.1% in December 2022.\nIf realized, December could mark the first time that inflation met the central bank\u2019s 2-4% target after 20 straight months. It would also be the slowest since the 3% print in February 2022.\nThis would bring the 2023 inflation average to 6%, matching the BSP\u2019s baseline forecast.\nThe Philippine Statistics Authority will release December consumer price index data on Friday.", "date_published": "2024-01-05T00:34:36+08:00", "date_modified": "2024-01-04T20:16:28+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2021/08/Peso-dollar-currency-2.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ], "summary": "THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to limit its foreign exchange intervention on markets by finalizing a new framework this year, its chief said on Thursday.\u00a0" }, { "id": "https://www.bworldonline.com/?p=567036", "url": "https://www.bworldonline.com/top-stories/2024/01/05/567036/phl-firms-seen-to-hike-salaries-by-6-2-this-year/", "title": "PHL firms seen to hike salaries by 6.2% this year", "content_html": "\n
SALARY INCREASES are expected to be higher in the Philippines this year, amid growing demand for professionals and elevated inflation, according to global professional services firm Mercer.
\nIn its Total Remuneration Survey conducted last year, Mercer said Philippine-based organizations projected a median salary hike of 6.2% in 2024, slightly higher than the actual 6% salary increase last year.\u00a0
\nIt is also above the projected average median salary increase of 5.2% in Asia for 2024.
\n\u201cThe projected hike in median salary increment can be attributed to factors such as the rising demand for skilled professionals, the need to attract and retain top talent in a fiercely competitive job market, and persistent inflationary pressures,\u201d Mercer said in a statement.
\nThe expected median salary increase in the Philippines is the fourth highest in the region, just behind India (9.3%), Vietnam (7%), and Indonesia (6.5%).
\nThe country surpassed the projected median salary increments in Mainland China (5.2%), Malaysia (5.1%), Thailand (4.7%), South Korea (4.4%), and Singapore (4.2%).
\nMeanwhile, Hong Kong SAR (2.6%), Taiwan (3.8%) and Japan (3.9%) reported the lowest projected median salary increments in the region.
\nFloriza I. Molon, business leader at Mercer Philippines, said that most industries are seen to ramp up hiring as businesses expand this year.
\n\u201cThe Philippines is poised for economic growth despite some global headwinds. Some industries will continue to hire as businesses, particularly in shared services and outsourcing industry, retail and consumer sectors expand,\u201d Ms. Molon said.
\nMercer said salary increases will likely be consistent in most industries this year, as firms seek to retain talent.
\nThe energy sector is seen to raise salaries by 7% this year, the highest among industries in the Philippines, data from Mercer showed. This is the same as the 7% hike implemented in 2023.
\nThe high-technology industry is expected to hike salaries by 6.8%, a tad higher than the actual 6.5% increase last year.
\nFirms in retail and wholesale will increase wages by 6.7%, slightly higher than last year\u2019s 6.5%.
\nConsumer goods firms will hike wages by 6.5%, faster than the 6% implemented last year.
\n\u201cBesides compensation, companies would need to reassess their total rewards programs focusing on the employee benefits and work experience,\u201d Ms. Molon said.
\nCiting Mercer Global Talent Trends 2023 report, Ms. Molon said that employees prefer to stay with organizations that offer job security, work flexibility and high pay.
\n\u201cEmployees are also expecting benefits and career opportunities within their organizations. The ability to provide these creates a more holistic and strategic management on talent in the workplace,\u201d she added.
\nChina Banking Corp. Chief Economist Domini S. Velasquez said businesses will likely provide higher salary increases as inflation remains elevated.
\nThe Bangko Sentral ng Pilipinas (BSP) expected inflation to have averaged 6% in 2023. It sees inflation averaging 3.7% in 2024.
\n\u201cThe rise in inflation could prompt businesses to provide higher compensation to offset the increased cost of living for Filipinos,\u201d Ms. Velasquez said in a Viber message.
\n\u201cMoreover, the approved minimum wage hikes in 2023 would further contribute to the upward trend in average wages for individuals earning above the minimum wage,\u201d she added.
\nMs. Velasquez said the wage increases should not \u201cexacerbate\u201d inflation and be balanced out by improving worker productivity.
\n\u201cOne key factor in achieving this balance is the improvement of worker productivity. As businesses recover from the impact of the pandemic and economic activities gradually increase, it is anticipated that Filipino workers will demonstrate higher productivity levels,\u201d she said.
\nMeanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that implementing salary increases will not only allow businesses to be competitive but also allow the Philippines to catch up with its regional peers in terms of per capita income.
\n\u201cGiven the fact that the Philippines is still among the fastest-growing economies in Asia, it still has relatively lower per capita incomes and is yet to catch up with other neighboring countries,\u201d he said.
\n\u201cEssentially the demand-supply balance of talent is a major determinant for wage growth in view of local or overseas employment choices for local talents,\u201d he added. \u2014 Justine Irish D. Tabile
\n", "content_text": "SALARY INCREASES are expected to be higher in the Philippines this year, amid growing demand for professionals and elevated inflation, according to global professional services firm Mercer.\nIn its Total Remuneration Survey conducted last year, Mercer said Philippine-based organizations projected a median salary hike of 6.2% in 2024, slightly higher than the actual 6% salary increase last year.\u00a0\nIt is also above the projected average median salary increase of 5.2% in Asia for 2024.\n\u201cThe projected hike in median salary increment can be attributed to factors such as the rising demand for skilled professionals, the need to attract and retain top talent in a fiercely competitive job market, and persistent inflationary pressures,\u201d Mercer said in a statement.\nThe expected median salary increase in the Philippines is the fourth highest in the region, just behind India (9.3%), Vietnam (7%), and Indonesia (6.5%).\nThe country surpassed the projected median salary increments in Mainland China (5.2%), Malaysia (5.1%), Thailand (4.7%), South Korea (4.4%), and Singapore (4.2%).\nMeanwhile, Hong Kong SAR (2.6%), Taiwan (3.8%) and Japan (3.9%) reported the lowest projected median salary increments in the region.\nFloriza I. Molon, business leader at Mercer Philippines, said that most industries are seen to ramp up hiring as businesses expand this year.\n\u201cThe Philippines is poised for economic growth despite some global headwinds. Some industries will continue to hire as businesses, particularly in shared services and outsourcing industry, retail and consumer sectors expand,\u201d Ms. Molon said.\nMercer said salary increases will likely be consistent in most industries this year, as firms seek to retain talent.\nThe energy sector is seen to raise salaries by 7% this year, the highest among industries in the Philippines, data from Mercer showed. This is the same as the 7% hike implemented in 2023.\nThe high-technology industry is expected to hike salaries by 6.8%, a tad higher than the actual 6.5% increase last year. \nFirms in retail and wholesale will increase wages by 6.7%, slightly higher than last year\u2019s 6.5%.\nConsumer goods firms will hike wages by 6.5%, faster than the 6% implemented last year.\n\u201cBesides compensation, companies would need to reassess their total rewards programs focusing on the employee benefits and work experience,\u201d Ms. Molon said. \nCiting Mercer Global Talent Trends 2023 report, Ms. Molon said that employees prefer to stay with organizations that offer job security, work flexibility and high pay. \n\u201cEmployees are also expecting benefits and career opportunities within their organizations. The ability to provide these creates a more holistic and strategic management on talent in the workplace,\u201d she added.\nChina Banking Corp. Chief Economist Domini S. Velasquez said businesses will likely provide higher salary increases as inflation remains elevated.\nThe Bangko Sentral ng Pilipinas (BSP) expected inflation to have averaged 6% in 2023. It sees inflation averaging 3.7% in 2024.\n\u201cThe rise in inflation could prompt businesses to provide higher compensation to offset the increased cost of living for Filipinos,\u201d Ms. Velasquez said in a Viber message.\n\u201cMoreover, the approved minimum wage hikes in 2023 would further contribute to the upward trend in average wages for individuals earning above the minimum wage,\u201d she added.\nMs. Velasquez said the wage increases should not \u201cexacerbate\u201d inflation and be balanced out by improving worker productivity.\n\u201cOne key factor in achieving this balance is the improvement of worker productivity. As businesses recover from the impact of the pandemic and economic activities gradually increase, it is anticipated that Filipino workers will demonstrate higher productivity levels,\u201d she said.\nMeanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that implementing salary increases will not only allow businesses to be competitive but also allow the Philippines to catch up with its regional peers in terms of per capita income.\n\u201cGiven the fact that the Philippines is still among the fastest-growing economies in Asia, it still has relatively lower per capita incomes and is yet to catch up with other neighboring countries,\u201d he said.\n\u201cEssentially the demand-supply balance of talent is a major determinant for wage growth in view of local or overseas employment choices for local talents,\u201d he added. \u2014 Justine Irish D. Tabile", "date_published": "2024-01-05T00:33:35+08:00", "date_modified": "2024-01-04T20:16:00+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/10/infra-construction-workers-1.jpg", "tags": [ "Justine Irish D. Tabile", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=567035", "url": "https://www.bworldonline.com/top-stories/2024/01/05/567035/mic-identifies-possible-areas-for-investments/", "title": "MIC identifies possible areas for investments", "content_html": "\n
THE MAHARLIKA Investment Corp. (MIC), which is tasked to oversee the Philippines\u2019 first sovereign wealth fund, is looking at potential investments in key sectors such as infrastructure, energy and transportation.
\nThe MIC held its first board meeting on Wednesday, as it seeks to fully operationalize the Maharlika Investment Fund (MIF), according to a statement from the Department of Finance (DoF).
\nMIC President and Chief Executive Officer (CEO) Rafael Jose D. Consing, Jr. said that the wealth fund could potentially invest in the power, agroforestry industrial urbanization, mineral processing, tourism, transportation, and aviation sectors.
\nThe MIC, which was established under Republic Act (RA) No. 11954, is responsible for mobilizing and utilizing the country\u2019s first sovereign wealth fund for investments in transactions that would generate optimal returns.
\n\u201cI look forward to your cooperation and support as we work together in mobilizing greater investments in the country\u2019s growth-enhancing sectors, while upholding the highest standards of accountability, fiscal responsibility, and good governance,\u201d Finance Secretary Benjamin E. Diokno told the MIC board during the meeting. He sits as the board\u2019s chairperson in an ex-officio capacity.
\n\u201cThe enactment of the Maharlika Investment Fund complements recent policy initiatives, such as the new public-private partnership policy framework, the approval of 197 high-impact infrastructure flagship projects, and liberalization policies that have further opened the Philippines to foreign investments in key sectors,\u201d Mr. Diokno added.
\nDuring the meeting, the board approved the presented MIC\u2019s capitalization scheme amounting to P125 billion.
\nUnder the law, state banks Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) are required to contribute P50 billion and P25 billion, respectively, to the initial capital of the fund.
\nThe National Government is also being counted on to contribute P50 billion. The MIC has an authorized capital stock of P500 billion.
\nPresident Ferdinand R. Marcos, Jr. signed the Maharlika fund bill into law in July despite concerns raised by economists, including questions on the possible negative impact on the operations of state banks.
\nMr. Marcos had said last year that the fund would be fully operational by the end of 2023.
\n\u201cUsually, a day or two does not really matter. However, given the enormous opportunity cost of this fund, every second counts,\u201d Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat.
\n\u201cSo, the three to four days of delay is already weighing heavily on people,\u201d he added.
\nDuring the meeting, Mr. Consing was quoted by a Palace statement as saying the investment body will operate with \u201cutmost\u201d openness and \u201crigorous\u201d accountability.
\nMr. Lanzona said these statements are \u201cnot enough to convince people about the need\u201d of the wealth fund.
\n\u201cFor one thing, there has been no accounting done as to the negative effects of this fund on the operations of the LANDBANK and DBP,\u201d he added, noting that the fund has significant effects on farmers and small-scale entrepreneurs who rely on the two state banks.
\nLast year the two banks sought regulatory relief from the Bangko Sentral ng Pilipinas for their contributions to the Maharlika fund.
\nAlso during the meeting, Mr. Consing updated the board on the MIC\u2019s startup activities such as staffing and recruitment and the hiring of its management team.
\nAside from Mr. Diokno and Mr. Consing, the MIC board members include LANDBANK President and CEO Ma. Lynette V. Ortiz, DBP President and CEO Michael O. de Jesus, and MIC directors Vicky Castillo L. Tan, Andrew Jerome T. Gan, German Q. Lichauco II, and Roman Felipe S. Reyes.
\nThe board also appointed the Bureau of the Treasury as the interim fund manager of the MIC.\u00a0
\n\u201cI am confident that we have a formidable team to steer the fund effectively towards transformative investments for the Philippine economy,\u201d Mr. Diokno said.
\nThe MIC\u2019s next board meeting is scheduled in the fourth week of January. \u2014 Keisha B. Ta-asan and Kyle Aristophere T. Atienza
\n", "content_text": "THE MAHARLIKA Investment Corp. (MIC), which is tasked to oversee the Philippines\u2019 first sovereign wealth fund, is looking at potential investments in key sectors such as infrastructure, energy and transportation.\nThe MIC held its first board meeting on Wednesday, as it seeks to fully operationalize the Maharlika Investment Fund (MIF), according to a statement from the Department of Finance (DoF).\nMIC President and Chief Executive Officer (CEO) Rafael Jose D. Consing, Jr. said that the wealth fund could potentially invest in the power, agroforestry industrial urbanization, mineral processing, tourism, transportation, and aviation sectors.\nThe MIC, which was established under Republic Act (RA) No. 11954, is responsible for mobilizing and utilizing the country\u2019s first sovereign wealth fund for investments in transactions that would generate optimal returns.\n\u201cI look forward to your cooperation and support as we work together in mobilizing greater investments in the country\u2019s growth-enhancing sectors, while upholding the highest standards of accountability, fiscal responsibility, and good governance,\u201d Finance Secretary Benjamin E. Diokno told the MIC board during the meeting. He sits as the board\u2019s chairperson in an ex-officio capacity.\n\u201cThe enactment of the Maharlika Investment Fund complements recent policy initiatives, such as the new public-private partnership policy framework, the approval of 197 high-impact infrastructure flagship projects, and liberalization policies that have further opened the Philippines to foreign investments in key sectors,\u201d Mr. Diokno added.\nDuring the meeting, the board approved the presented MIC\u2019s capitalization scheme amounting to P125 billion.\nUnder the law, state banks Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) are required to contribute P50 billion and P25 billion, respectively, to the initial capital of the fund.\nThe National Government is also being counted on to contribute P50 billion. The MIC has an authorized capital stock of P500 billion.\nPresident Ferdinand R. Marcos, Jr. signed the Maharlika fund bill into law in July despite concerns raised by economists, including questions on the possible negative impact on the operations of state banks.\nMr. Marcos had said last year that the fund would be fully operational by the end of 2023.\n\u201cUsually, a day or two does not really matter. However, given the enormous opportunity cost of this fund, every second counts,\u201d Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat.\n\u201cSo, the three to four days of delay is already weighing heavily on people,\u201d he added.\nDuring the meeting, Mr. Consing was quoted by a Palace statement as saying the investment body will operate with \u201cutmost\u201d openness and \u201crigorous\u201d accountability. \nMr. Lanzona said these statements are \u201cnot enough to convince people about the need\u201d of the wealth fund. \n\u201cFor one thing, there has been no accounting done as to the negative effects of this fund on the operations of the LANDBANK and DBP,\u201d he added, noting that the fund has significant effects on farmers and small-scale entrepreneurs who rely on the two state banks. \nLast year the two banks sought regulatory relief from the Bangko Sentral ng Pilipinas for their contributions to the Maharlika fund.\nAlso during the meeting, Mr. Consing updated the board on the MIC\u2019s startup activities such as staffing and recruitment and the hiring of its management team. \nAside from Mr. Diokno and Mr. Consing, the MIC board members include LANDBANK President and CEO Ma. Lynette V. Ortiz, DBP President and CEO Michael O. de Jesus, and MIC directors Vicky Castillo L. Tan, Andrew Jerome T. Gan, German Q. Lichauco II, and Roman Felipe S. Reyes. \nThe board also appointed the Bureau of the Treasury as the interim fund manager of the MIC.\u00a0\n\u201cI am confident that we have a formidable team to steer the fund effectively towards transformative investments for the Philippine economy,\u201d Mr. Diokno said.\nThe MIC\u2019s next board meeting is scheduled in the fourth week of January. \u2014 Keisha B. Ta-asan and Kyle Aristophere T. Atienza", "date_published": "2024-01-05T00:32:35+08:00", "date_modified": "2024-01-04T20:15:37+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2022/07/road-infra-workers.jpg", "tags": [ "Keisha B. Ta-asan", "Kyle Aristophere T. Atienza", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=567034", "url": "https://www.bworldonline.com/top-stories/2024/01/05/567034/dof-says-create-incentives-benefited-p1t-worth-of-projects/", "title": "DoF says CREATE incentives benefited P1T worth of projects", "content_html": "\n
PROJECTS BENEFITING from incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law have reached P1.02 trillion in investment capital as of October, the Department of Finance (DoF) said.\u00a0
\nIn a social media post, the DoF said this reflects the efforts of the Marcos administration to promote the Philippines as a good investment destination.\u00a0
\n\u201cThis landmark milestone also gained P572.98 billion worth of foreign direct investment (FDI) pledges, with 910 CREATE-approved projects varying across priority sectors listed in the Strategic Investment Priority Plan,\u201d it said.
\nOf the 910 CREATE-approved projects, around 49 big-ticket tax incentive applications with a total investment capital of P817 billion were approved by the Fiscal Incentives Review Board.
\nThe remaining 861 projects \u2014 with a combined investment capital of P203 billion \u2014 were from investment promotion agencies (IPAs).
\n\u201cThese projects are expected to accumulate a committed employment count of around 99,400 jobs within its incentivized period, with the labor-intensive manufacturing sector having the highest number of approved projects among the priority sectors,\u201d the DoF said.
\n\u201cThis underscores the employability of the country\u2019s workforce in high-quality jobs that will contribute to long-term economic growth,\u201d it added.
\nCREATE was signed into law in 2021 to aid enterprises that have yet to recover from the coronavirus pandemic. It reduced corporate income tax rates, provided tax relief measures, and rationalized fiscal incentives.
\n\u201cAs CREATE establishes a performance-based, time-bound, targeted, and transparent tax incentives regime in the country, incentivized projects or activities under the key structural tax reform are to achieve performance metrics to ensure that the grant of fiscal support to registered business enterprises leads to higher economic returns,\u201d the DoF said.\u00a0
\nIn August, Albay Rep. Jose Ma. Clemente S. Salceda filed the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, which seeks to reconcile disparities between the CREATE Act and its implementing rules, primarily on value-added tax (VAT)-related transactions.\u00a0
\nUnder CREATE MORE, local and export companies, even those inside ecozones and freeports, would continue to enjoy duty exemptions, VAT exemption on importation, and the VAT zero-rating of local purchases as provided in their respective IPA registrations.
\nRegistered export enterprises would also enjoy non-income tax incentives, VAT exemption on importation and VAT zero-rating on local purchases, as long as the registered firm maintains 70% of the total annual production as export sale and continues to be registered in good standing with the IPA.
\nThe measure also proposes to lower corporate income tax to 20% for those under the enhanced deduction regime from 20-25%.
\nThe bill is currently being taken up in the House of Representatives. \u2014 Keisha B. Ta-asan
\n", "content_text": "PROJECTS BENEFITING from incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law have reached P1.02 trillion in investment capital as of October, the Department of Finance (DoF) said.\u00a0\nIn a social media post, the DoF said this reflects the efforts of the Marcos administration to promote the Philippines as a good investment destination.\u00a0\n\u201cThis landmark milestone also gained P572.98 billion worth of foreign direct investment (FDI) pledges, with 910 CREATE-approved projects varying across priority sectors listed in the Strategic Investment Priority Plan,\u201d it said.\nOf the 910 CREATE-approved projects, around 49 big-ticket tax incentive applications with a total investment capital of P817 billion were approved by the Fiscal Incentives Review Board.\nThe remaining 861 projects \u2014 with a combined investment capital of P203 billion \u2014 were from investment promotion agencies (IPAs).\n\u201cThese projects are expected to accumulate a committed employment count of around 99,400 jobs within its incentivized period, with the labor-intensive manufacturing sector having the highest number of approved projects among the priority sectors,\u201d the DoF said.\n\u201cThis underscores the employability of the country\u2019s workforce in high-quality jobs that will contribute to long-term economic growth,\u201d it added.\nCREATE was signed into law in 2021 to aid enterprises that have yet to recover from the coronavirus pandemic. It reduced corporate income tax rates, provided tax relief measures, and rationalized fiscal incentives. \n\u201cAs CREATE establishes a performance-based, time-bound, targeted, and transparent tax incentives regime in the country, incentivized projects or activities under the key structural tax reform are to achieve performance metrics to ensure that the grant of fiscal support to registered business enterprises leads to higher economic returns,\u201d the DoF said.\u00a0\nIn August, Albay Rep. Jose Ma. Clemente S. Salceda filed the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, which seeks to reconcile disparities between the CREATE Act and its implementing rules, primarily on value-added tax (VAT)-related transactions.\u00a0\nUnder CREATE MORE, local and export companies, even those inside ecozones and freeports, would continue to enjoy duty exemptions, VAT exemption on importation, and the VAT zero-rating of local purchases as provided in their respective IPA registrations.\nRegistered export enterprises would also enjoy non-income tax incentives, VAT exemption on importation and VAT zero-rating on local purchases, as long as the registered firm maintains 70% of the total annual production as export sale and continues to be registered in good standing with the IPA. \nThe measure also proposes to lower corporate income tax to 20% for those under the enhanced deduction regime from 20-25%. \nThe bill is currently being taken up in the House of Representatives. \u2014 Keisha B. Ta-asan", "date_published": "2024-01-05T00:31:34+08:00", "date_modified": "2024-01-04T20:15:15+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/Manila-building-skyline.jpg", "tags": [ "Keisha B. Ta-asan", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566724", "url": "https://www.bworldonline.com/top-stories/2024/01/04/566724/debt-pile-rises-to-record-p14-5-trillion/", "title": "Debt pile rises to record P14.5 trillion", "content_html": "By Keisha B. Ta-asan, Reporter
\nTHE NATIONAL Government\u2019s (NG) total outstanding debt hit a fresh high of P14.51 trillion as of end-November, the Bureau of the Treasury (BTr) said on Wednesday.\u00a0 \u00a0
\nThe outstanding debt inched up by 0.2% from P14.48 trillion as of end-October, data from the BTr showed.
\n\u201cNG\u2019s debt stock increased by P27.92 billion or 0.2% month over month, primarily due to the net issuance of domestic securities,\u201d the BTr said in a press release.
\nYear on year, the debt stock rose by 6.3% from P13.64 trillion.
Outstanding debt went up by 8.1% from P13.42 trillion as of end-December 2022.
\nMore than two-thirds or 69.1% of total outstanding debt as of end-November came from domestic sources.
\nAs of end-November, domestic debt increased by 1.2% to P10.02 trillion from P9.9 trillion a month earlier due to the net issuance of government securities.
\nDomestic debt also rose by 6.3% from P9.43 trillion in the same period a year prior.
\n\u201cNew domestic debt issued during the month totaled P171.091 billion while principal redemption amounted to P45.14 billion, underlying a net issuance of P125.95 billion,\u201d the BTr said.
\n\u201cThe increase was partially offset by the P3.87-billion effect of peso appreciation on foreign currency-denominated domestic securities,\u201d it added.
\nData from the Treasury department showed the peso closed at P55.451 against the dollar as of end-November, strengthening by P1.357 or 2.4% from P56.808 as of end-October.
\nMeanwhile, external debt, which accounted for 31% of the total, slipped by 2.1% to P4.48 trillion as of end-November from P4.58 trillion as of end-October.
\nHowever, external debt rose by 6.4% from P4.22 trillion a year ago.
\n\u201cFor November, the lower level of external debt was due to the net repayment of foreign loans amounting to P1.08 billion and favorable foreign exchange movements, wherein the P109.37 billion reduction attributed to peso appreciation against the US dollar far exceeded the upward adjustment linked to third-currency appreciation of P16.3 billion,\u201d the BTr said.
\nBroken down, external borrowings consisted of P2.06 trillion in loans and P2.42 trillion in global bonds.
\nAs of end November, the NG\u2019s overall guaranteed obligations slid by 12.2% to P353.14 billion from P361 billion as of end-October.
\nYear on year, guaranteed debt declined by 8.9% from P388 billion.
\n\u201cThe decline in the level of guaranteed debt was attributed to the net repayment of both domestic and external guarantees amounting to P1.21 billion and P3.5 billion, respectively,\u201d the BTr said.
\n\u201cIn addition, the peso appreciation against the US dollar further trimmed P4.07 billion (from guaranteed debt). These more than offset the P0.92-billion effect of third currency appreciation on similarly denominated guarantees,\u201d it added.
\nChina Banking Corp. Chief Economist Domini S. Velasquez said the government incurred more debt to support budget financing.
\n\u201cThe increase in government debt was likely driven by the financing needs of government projects and programs. However, this growth was likely limited by lower market interest rates and the appreciation of the peso during the month,\u201d she said.
\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the record high NG debt was due to new borrowings to fund the budget deficit.
\nFor 2023, the government has set a budget deficit ceiling of P1.499 trillion, equivalent to 6.1% of the gross domestic product (GDP).
\n\u201cLooking ahead to 2024, we expect the government to increase its borrowings to fund the 2024 budget which is 9.5% higher than that of last year,\u201d Ms. Velasquez said.
\n\u201cOn a positive note, the expected downtrend in market yields and further strengthening of the peso will help moderate debt growth. However, we think that the proposed tax reforms are crucial to ensure that the budget deficit and government debt remain at manageable levels,\u201d she added.
\nMr. Ricafort said the government\u2019s outstanding debt could still increase in the coming months due to the maiden issuance of Sukuk bonds worth $1 billion last December.
\n\u201cContinued budget deficits, though narrower from year ago levels, could still lead to additional borrowings/debt by the national government,\u201d he said.
\nFor 2023, the government plans to borrow P2.207 trillion, consisting of P1.654 trillion from domestic sources and P553.5 billion from foreign sources.
\n", "content_text": "By Keisha B. Ta-asan, Reporter\nTHE NATIONAL Government\u2019s (NG) total outstanding debt hit a fresh high of P14.51 trillion as of end-November, the Bureau of the Treasury (BTr) said on Wednesday.\u00a0 \u00a0\nThe outstanding debt inched up by 0.2% from P14.48 trillion as of end-October, data from the BTr showed.\n\u201cNG\u2019s debt stock increased by P27.92 billion or 0.2% month over month, primarily due to the net issuance of domestic securities,\u201d the BTr said in a press release. \nYear on year, the debt stock rose by 6.3% from P13.64 trillion.\nOutstanding debt went up by 8.1% from P13.42 trillion as of end-December 2022.\nMore than two-thirds or 69.1% of total outstanding debt as of end-November came from domestic sources.\nAs of end-November, domestic debt increased by 1.2% to P10.02 trillion from P9.9 trillion a month earlier due to the net issuance of government securities.\nDomestic debt also rose by 6.3% from P9.43 trillion in the same period a year prior.\n\u201cNew domestic debt issued during the month totaled P171.091 billion while principal redemption amounted to P45.14 billion, underlying a net issuance of P125.95 billion,\u201d the BTr said. \n\u201cThe increase was partially offset by the P3.87-billion effect of peso appreciation on foreign currency-denominated domestic securities,\u201d it added.\nData from the Treasury department showed the peso closed at P55.451 against the dollar as of end-November, strengthening by P1.357 or 2.4% from P56.808 as of end-October.\nMeanwhile, external debt, which accounted for 31% of the total, slipped by 2.1% to P4.48 trillion as of end-November from P4.58 trillion as of end-October. \nHowever, external debt rose by 6.4% from P4.22 trillion a year ago.\n\u201cFor November, the lower level of external debt was due to the net repayment of foreign loans amounting to P1.08 billion and favorable foreign exchange movements, wherein the P109.37 billion reduction attributed to peso appreciation against the US dollar far exceeded the upward adjustment linked to third-currency appreciation of P16.3 billion,\u201d the BTr said.\nBroken down, external borrowings consisted of P2.06 trillion in loans and P2.42 trillion in global bonds.\nAs of end November, the NG\u2019s overall guaranteed obligations slid by 12.2% to P353.14 billion from P361 billion as of end-October. \nYear on year, guaranteed debt declined by 8.9% from P388 billion. \n\u201cThe decline in the level of guaranteed debt was attributed to the net repayment of both domestic and external guarantees amounting to P1.21 billion and P3.5 billion, respectively,\u201d the BTr said. \n\u201cIn addition, the peso appreciation against the US dollar further trimmed P4.07 billion (from guaranteed debt). These more than offset the P0.92-billion effect of third currency appreciation on similarly denominated guarantees,\u201d it added.\nChina Banking Corp. Chief Economist Domini S. Velasquez said the government incurred more debt to support budget financing.\n\u201cThe increase in government debt was likely driven by the financing needs of government projects and programs. However, this growth was likely limited by lower market interest rates and the appreciation of the peso during the month,\u201d she said.\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the record high NG debt was due to new borrowings to fund the budget deficit.\nFor 2023, the government has set a budget deficit ceiling of P1.499 trillion, equivalent to 6.1% of the gross domestic product (GDP). \n\u201cLooking ahead to 2024, we expect the government to increase its borrowings to fund the 2024 budget which is 9.5% higher than that of last year,\u201d Ms. Velasquez said.\n\u201cOn a positive note, the expected downtrend in market yields and further strengthening of the peso will help moderate debt growth. However, we think that the proposed tax reforms are crucial to ensure that the budget deficit and government debt remain at manageable levels,\u201d she added. \nMr. Ricafort said the government\u2019s outstanding debt could still increase in the coming months due to the maiden issuance of Sukuk bonds worth $1 billion last December.\n\u201cContinued budget deficits, though narrower from year ago levels, could still lead to additional borrowings/debt by the national government,\u201d he said.\nFor 2023, the government plans to borrow P2.207 trillion, consisting of P1.654 trillion from domestic sources and P553.5 billion from foreign sources.", "date_published": "2024-01-04T00:34:23+08:00", "date_modified": "2024-01-03T20:04:57+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2022/12/Peso-currency-2.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ], "summary": "THE NATIONAL Government\u2019s (NG) total outstanding debt hit a fresh high of P14.51 trillion as of end-November, the Bureau of the Treasury (BTr) said on Wednesday.\u00a0" }, { "id": "https://www.bworldonline.com/?p=566723", "url": "https://www.bworldonline.com/top-stories/2024/01/04/566723/mufg-sees-phl-economy-growing-by-5-6-this-year/", "title": "MUFG sees PHL economy growing by 5.6% this year", "content_html": "\n
THE PHILIPPINE ECONOMY may grow by 5.6% this year as easing inflation could help boost consumption, MUFG Global Markets Research said.
\nIn a report, MUFG Global Markets said the Philippine gross domestic product (GDP) is forecast to expand by 5.6% this year, picking up from the likely 4.8% GDP growth in 2023.
\nHowever, the growth forecast is below the Philippine government\u2019s 6.5% to 7.5% growth target for 2024.
\n\u201cWe think that headwinds to domestic demand from elevated food and energy prices should gradually fade over time, but the growth rebound will probably be more evident from the second half of 2024 onwards, assuming no further food supply shocks,\u201d it said.
\nPhilippine GDP growth accelerated to 5.9% in the third quarter, mainly driven by faster government spending, while private consumption slowed. This brought the nine-month GDP growth average to 5.5%, still below the government\u2019s 6-7% full-year target.
\n\u201cThe more stable external environment, coupled with stable USDPHP (US dollar-Philippine peso exchange rate), should also help Bangko Sentral ng Pilipinas (BSP) keep rates on hold through the next few months, and to start the rate-cutting cycle from the second half of 2024, as such helping investment and private consumption activity,\u201d the research firm said.
\nMUFG Global Markets Research expects the BSP to cut interest rates by 50 basis points (bps) this year. This would bring the benchmark rate to 6% by end-2024, from the current 16-year high of 6.5%.
\nThe Monetary Board has raised borrowing costs by a cumulative 450 basis points (bps) from May 2022 to October 2023 to tame inflation.
\n\u201cWe think the Philippine central bank will remain cautious for now, even as it looks more likely now that the Fed will start its rate-cutting cycle in 2024, together with the recent progress in bringing inflation down. This is also because upside risks to inflation are still present,\u201d the research firm said.
\nMarkets are anticipating the US Federal Reserve will begin cutting rates this year as inflation eases. At its December meeting, the Fed had forecast 75 bps in rate cuts for 2024.
\n\u201cWe think the Philippines\u2019 central bank would prefer to take its lead from the Fed and wait for the US rate-cutting cycle to be clearly underway, before commencing its rate cuts,\u201d it said.
\nFor this year, MUFG Global Markets Research said Philippine inflation is seen to slowly return to the upper end of the BSP\u2019s 2-4% target band if there are no more supply shocks.
\n\u201cWe expect the Philippines\u2019 CPI (consumer price index) to fall into the central bank\u2019s upper half of the inflation target by the first quarter 2024, and to stay around that range through the course of 2024\u2026 There are nonetheless still upside risks to inflation stemming from food supply shocks, possible transport fare hikes, and minimum wage increases,\u201d it added.
\nBSP Governor Eli M. Remolona, Jr. said last month the central bank will likely keep benchmark interest rates higher for longer until inflation settles at around 3%.
\nMUFG Global Markets Research said the Philippine peso will likely underperform in 2024, as the current account deficit is seen at -3% of GDP and the central bank beefs up its foreign exchange reserves.
\nIt expects the peso to end at P55.40 per dollar by the first quarter of 2024, and by P55 per dollar by yearend.
\n\u201cOur forecasts imply some underperformance in PHP against other Asian FX (foreign exchange), but to a lesser extent than before, with lower global oil prices and fading of domestic food supply shocks helping to contain both inflation pressures and the current account deficit,\u201d it said. \u2014 AMCS
\n", "content_text": "THE PHILIPPINE ECONOMY may grow by 5.6% this year as easing inflation could help boost consumption, MUFG Global Markets Research said. \nIn a report, MUFG Global Markets said the Philippine gross domestic product (GDP) is forecast to expand by 5.6% this year, picking up from the likely 4.8% GDP growth in 2023.\nHowever, the growth forecast is below the Philippine government\u2019s 6.5% to 7.5% growth target for 2024.\n\u201cWe think that headwinds to domestic demand from elevated food and energy prices should gradually fade over time, but the growth rebound will probably be more evident from the second half of 2024 onwards, assuming no further food supply shocks,\u201d it said.\nPhilippine GDP growth accelerated to 5.9% in the third quarter, mainly driven by faster government spending, while private consumption slowed. This brought the nine-month GDP growth average to 5.5%, still below the government\u2019s 6-7% full-year target.\n\u201cThe more stable external environment, coupled with stable USDPHP (US dollar-Philippine peso exchange rate), should also help Bangko Sentral ng Pilipinas (BSP) keep rates on hold through the next few months, and to start the rate-cutting cycle from the second half of 2024, as such helping investment and private consumption activity,\u201d the research firm said.\nMUFG Global Markets Research expects the BSP to cut interest rates by 50 basis points (bps) this year. This would bring the benchmark rate to 6% by end-2024, from the current 16-year high of 6.5%.\nThe Monetary Board has raised borrowing costs by a cumulative 450 basis points (bps) from May 2022 to October 2023 to tame inflation.\n\u201cWe think the Philippine central bank will remain cautious for now, even as it looks more likely now that the Fed will start its rate-cutting cycle in 2024, together with the recent progress in bringing inflation down. This is also because upside risks to inflation are still present,\u201d the research firm said.\nMarkets are anticipating the US Federal Reserve will begin cutting rates this year as inflation eases. At its December meeting, the Fed had forecast 75 bps in rate cuts for 2024.\n\u201cWe think the Philippines\u2019 central bank would prefer to take its lead from the Fed and wait for the US rate-cutting cycle to be clearly underway, before commencing its rate cuts,\u201d it said.\nFor this year, MUFG Global Markets Research said Philippine inflation is seen to slowly return to the upper end of the BSP\u2019s 2-4% target band if there are no more supply shocks.\n\u201cWe expect the Philippines\u2019 CPI (consumer price index) to fall into the central bank\u2019s upper half of the inflation target by the first quarter 2024, and to stay around that range through the course of 2024\u2026 There are nonetheless still upside risks to inflation stemming from food supply shocks, possible transport fare hikes, and minimum wage increases,\u201d it added.\nBSP Governor Eli M. Remolona, Jr. said last month the central bank will likely keep benchmark interest rates higher for longer until inflation settles at around 3%.\nMUFG Global Markets Research said the Philippine peso will likely underperform in 2024, as the current account deficit is seen at -3% of GDP and the central bank beefs up its foreign exchange reserves.\nIt expects the peso to end at P55.40 per dollar by the first quarter of 2024, and by P55 per dollar by yearend.\n\u201cOur forecasts imply some underperformance in PHP against other Asian FX (foreign exchange), but to a lesser extent than before, with lower global oil prices and fading of domestic food supply shocks helping to contain both inflation pressures and the current account deficit,\u201d it said. \u2014 AMCS", "date_published": "2024-01-04T00:33:23+08:00", "date_modified": "2024-01-03T20:03:03+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/Torotot-vendor.jpg", "tags": [ "Aaron Michael C. Sy", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566722", "url": "https://www.bworldonline.com/top-stories/2024/01/04/566722/renewables-seen-to-offset-the-rise-in-electricity-prices/", "title": "Renewables seen to offset the rise in electricity prices", "content_html": "By Sheldeen Joy Talavera, Reporter
\nTHE PRICE AND SUPPLY of electricity in the Philippines are seen to be challenged this year due to warm weather but may be offset by the power capacity expansion from renewables.
\nJose M. Layug, Jr., president of Developers of Renewable Energy Advancement, Inc., said he is anticipating supply challenges, especially during the summer months.
\n\u201cNo matter how we tried to maintain all these coal-fired plants, the point is they are already old so you should expect these power plants to break down very often and that\u2019s why we need new capacities,\u201d he said in a virtual interview.
\n\u201cOtherwise, we will have an issue on supply, and we will be placing yellow alerts,\u201d he added, referring to the warning when reserves fall below a designated safety margin.
\nIn 2023, the Philippines was placed under yellow and\u202fred alerts several times due to sudden plant outages. The Department of Energy (DoE) had expected 12 yellow alerts last year. Red alerts are raised when the supply-demand balance deteriorates further, signaling the possibility of rotational brownouts.
\nFor 2024, the DoE has so far not projected any potential yellow and red alerts as it banks on new solar power plants that will be coming in, which it said will be \u201cfavorable\u201d under an El Ni\u00f1o scenario.
\nLatest data from the state weather bureau Philippine Atmospheric, Geophysical and Astronomical Services Administration showed that a moderate El Ni\u00f1o would continue to persist and intensify in the coming months.
\nEnergy Secretary Raphael P.M. Lotilla is expecting a favorable status in electricity supply this year as he anticipates the completion of power transmission projects.
\n\u201cWe did manage to contain the weakness in 2023, and 2024 promises to be better. But of course, from the supply side, and we hope that by 2024, we shall also finish a number of major transmission connections, but of course, there remain threats,\u201d he told reporters in an interview last month.
\nPrivately owned National Grid Corp. of the Philippines (NGCP) holds the sole and exclusive concession and franchise for the operation of the country\u2019s power transmission network, which links power generators and distribution utilities to deliver electricity nationwide.
\nNGCP has already energized some of its transmission projects such as the P10.2-billion Hermosa-San Jose 500-kilovolt transmission line. It is currently working on the full completion of the Mindanao-Visayas Interconnection Project (MVIP).
\nMajah-Leah V. Ravago, an energy economist from the Ateneo de Manila University, said increasing power generation means investing in transmission projects.
\n\u201cYou cannot address the problem that you\u2019re just looking at generation because the consumption of electricity is a whole system in itself,\u201d she said in a virtual interview.
\n\u201cYou cannot look at increasing generation without accompanying investment in transmission and distribution. We have many cases like that,\u201d she added.
\nTwo decades after the Electric Power Industry Reform Act was passed, electricity rates in the Philippines are still one of the highest in the region as there are still a lot of inefficiencies in the system.
\nThe Philippines\u2019 per capita consumption of electricity is low relative to its neighbors due to high power prices brought on by inefficiency and reliability issues, according to Ms. Ravago.
\nCiting data from the World Bank and the United Nations, she said that the country\u2019s per capita consumption was at 975.61 per kilowatt-hour (kWh) in 2022.
\nThis is relatively lower compared with the country\u2019s peers in the Association of Southeast Asian Nations (ASEAN) such as Singapore (9,168.82 per kWh), Malaysia (5,318.78 per kWh), Indonesia (2,662.31 per kWh), and Thailand (1,210.67 per kWh).
\nElectricity consumption in the country is expected to grow by nearly four times the 2018 level by 2040, Ms. Ravago said.
\n\u201cIf we are to meet that growth by 2040, it means that electricity consumption has to grow. It means demand is growing, it has to be met by supply. Otherwise, we would have electricity price increases,\u201d she said.
\nTo meet the demand, she said that the government should address regulatory bottlenecks both for generation and transmission.
\nSince power generation is privately led in the Philippines \u2014 which attracts investments \u2014 the government should instead focus on facilitating these capital inflows, easing regulatory burdens, and expanding transmission, Ms. Ravago said.
\n\u201cWe just need to make sure that the other related infrastructure, transmission lines, and ports are also upgraded in time of these projects going online,\u201d Mr. Layug said.
\nData from the DoE showed that wind, natural gas, and solar dominated most of the indicative projects, or those currently in the pre-development stage, as of August 2023 with a capacity of 34,080.50 megawatts (MW), 7,987.60 MW, and 7,811.86 MW, respectively.
\n\u2018THE WAY TO GO\u2019
\nRenewables are seen to be able to offset a rise in electricity prices and mitigate the high prices of oil and coal.
\u201cThis year\u2026 the private sector is happy about how the government, particularly the DoE, has convinced and has signaled to the private sector that renewables are the way to go,\u201d Mr. Layug said.
\nAs of end-2022, the share of renewable energy (RE) in the country\u2019s power generation mix was about 22%. The government has set a target of increasing this to 35% by 2030, then 50% by 2040.
\n\u201cWe all know that the cost of RE is now more optimal, more affordable especially for the consumers, so we\u2019re happy with that and we hope the government continues its forward-looking planning of the energy sector in the Philippines by continuously pushing for renewable as part of the energy mix,\u201d Mr. Layug said.
\nWithin RE technologies, solar and wind energy are seen to drive the growth of renewables.
\n\u201cIn the next three years, I still see solar onshore and onshore wind to dominate. With, hopefully, waste-to-energy [projects] catching up a little bit,\u201d Mr. Layug said. \u201cWe hope to see floating solar and offshore wind to dominate.\u201d
\nAs of October, the DoE has awarded around 1,300 RE contracts, promising a total potential capacity of about 130,000 MW.
\nOf the total, 225 wind energy contracts have been awarded with the highest combined capacity of 83,079.3 MW. This was followed by 356 solar energy projects with 27,889 MW and 430 hydropower projects with a capacity of 18,924.4 MW.
\n\u201cWe are in a good position to implement reforms necessary to energy transition,\u201d Ms. Ravago said, citing the moratorium on new greenfield coal power plants and the liberalization of the RE sector.
\n", "content_text": "By Sheldeen Joy Talavera, Reporter\nTHE PRICE AND SUPPLY of electricity in the Philippines are seen to be challenged this year due to warm weather but may be offset by the power capacity expansion from renewables.\nJose M. Layug, Jr., president of Developers of Renewable Energy Advancement, Inc., said he is anticipating supply challenges, especially during the summer months.\n\u201cNo matter how we tried to maintain all these coal-fired plants, the point is they are already old so you should expect these power plants to break down very often and that\u2019s why we need new capacities,\u201d he said in a virtual interview.\n\u201cOtherwise, we will have an issue on supply, and we will be placing yellow alerts,\u201d he added, referring to the warning when reserves fall below a designated safety margin.\nIn 2023, the Philippines was placed under yellow and\u202fred alerts several times due to sudden plant outages. The Department of Energy (DoE) had expected 12 yellow alerts last year. Red alerts are raised when the supply-demand balance deteriorates further, signaling the possibility of rotational brownouts.\nFor 2024, the DoE has so far not projected any potential yellow and red alerts as it banks on new solar power plants that will be coming in, which it said will be \u201cfavorable\u201d under an El Ni\u00f1o scenario. \nLatest data from the state weather bureau Philippine Atmospheric, Geophysical and Astronomical Services Administration showed that a moderate El Ni\u00f1o would continue to persist and intensify in the coming months.\nEnergy Secretary Raphael P.M. Lotilla is expecting a favorable status in electricity supply this year as he anticipates the completion of power transmission projects.\n\u201cWe did manage to contain the weakness in 2023, and 2024 promises to be better. But of course, from the supply side, and we hope that by 2024, we shall also finish a number of major transmission connections, but of course, there remain threats,\u201d he told reporters in an interview last month.\nPrivately owned National Grid Corp. of the Philippines (NGCP) holds the sole and exclusive concession and franchise for the operation of the country\u2019s power transmission network, which links power generators and distribution utilities to deliver electricity nationwide.\nNGCP has already energized some of its transmission projects such as the P10.2-billion Hermosa-San Jose 500-kilovolt transmission line. It is currently working on the full completion of the Mindanao-Visayas Interconnection Project (MVIP).\nMajah-Leah V. Ravago, an energy economist from the Ateneo de Manila University, said increasing power generation means investing in transmission projects.\n\u201cYou cannot address the problem that you\u2019re just looking at generation because the consumption of electricity is a whole system in itself,\u201d she said in a virtual interview.\n\u201cYou cannot look at increasing generation without accompanying investment in transmission and distribution. We have many cases like that,\u201d she added.\nTwo decades after the Electric Power Industry Reform Act was passed, electricity rates in the Philippines are still one of the highest in the region as there are still a lot of inefficiencies in the system.\nThe Philippines\u2019 per capita consumption of electricity is low relative to its neighbors due to high power prices brought on by inefficiency and reliability issues, according to Ms. Ravago.\nCiting data from the World Bank and the United Nations, she said that the country\u2019s per capita consumption was at 975.61 per kilowatt-hour (kWh) in 2022.\nThis is relatively lower compared with the country\u2019s peers in the Association of Southeast Asian Nations (ASEAN) such as Singapore (9,168.82 per kWh), Malaysia (5,318.78 per kWh), Indonesia (2,662.31 per kWh), and Thailand (1,210.67 per kWh).\nElectricity consumption in the country is expected to grow by nearly four times the 2018 level by 2040, Ms. Ravago said.\n\u201cIf we are to meet that growth by 2040, it means that electricity consumption has to grow. It means demand is growing, it has to be met by supply. Otherwise, we would have electricity price increases,\u201d she said.\nTo meet the demand, she said that the government should address regulatory bottlenecks both for generation and transmission.\nSince power generation is privately led in the Philippines \u2014 which attracts investments \u2014 the government should instead focus on facilitating these capital inflows, easing regulatory burdens, and expanding transmission, Ms. Ravago said.\n\u201cWe just need to make sure that the other related infrastructure, transmission lines, and ports are also upgraded in time of these projects going online,\u201d Mr. Layug said.\nData from the DoE showed that wind, natural gas, and solar dominated most of the indicative projects, or those currently in the pre-development stage, as of August 2023 with a capacity of 34,080.50 megawatts (MW), 7,987.60 MW, and 7,811.86 MW, respectively.\n\u2018THE WAY TO GO\u2019\nRenewables are seen to be able to offset a rise in electricity prices and mitigate the high prices of oil and coal.\n\u201cThis year\u2026 the private sector is happy about how the government, particularly the DoE, has convinced and has signaled to the private sector that renewables are the way to go,\u201d Mr. Layug said.\nAs of end-2022, the share of renewable energy (RE) in the country\u2019s power generation mix was about 22%. The government has set a target of increasing this to 35% by 2030, then 50% by 2040.\n\u201cWe all know that the cost of RE is now more optimal, more affordable especially for the consumers, so we\u2019re happy with that and we hope the government continues its forward-looking planning of the energy sector in the Philippines by continuously pushing for renewable as part of the energy mix,\u201d Mr. Layug said.\nWithin RE technologies, solar and wind energy are seen to drive the growth of renewables.\n\u201cIn the next three years, I still see solar onshore and onshore wind to dominate. With, hopefully, waste-to-energy [projects] catching up a little bit,\u201d Mr. Layug said. \u201cWe hope to see floating solar and offshore wind to dominate.\u201d\nAs of October, the DoE has awarded around 1,300 RE contracts, promising a total potential capacity of about 130,000 MW.\nOf the total, 225 wind energy contracts have been awarded with the highest combined capacity of 83,079.3 MW. This was followed by 356 solar energy projects with 27,889 MW and 430 hydropower projects with a capacity of 18,924.4 MW.\n\u201cWe are in a good position to implement reforms necessary to energy transition,\u201d Ms. Ravago said, citing the moratorium on new greenfield coal power plants and the liberalization of the RE sector.", "date_published": "2024-01-04T00:32:22+08:00", "date_modified": "2024-01-03T20:02:41+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/wind-farm.jpg", "tags": [ "Sheldeen Joy Talavera", "YEARENDER", "Editors' Picks", "One News", "Special Reports", "Top Stories" ], "summary": "THE PRICE AND SUPPLY of electricity in the Philippines are seen to be challenged this year due to warm weather but may be offset by the power capacity expansion from renewables." }, { "id": "https://www.bworldonline.com/?p=566721", "url": "https://www.bworldonline.com/top-stories/2024/01/04/566721/dbm-chief-issues-national-budget-call-for-2025/", "title": "DBM chief issues national budget call for 2025", "content_html": "THE 2025 national budget will focus on keeping inflation under control, addressing the economic scarring from the pandemic, boosting infrastructure investments, and adapting global trends in digital transformation, the Department of Budget and Management (DBM) said.
\nBudget Secretary Amenah F. Pangandaman last week issued the National Budget Call in a memorandum, asking government agencies to begin preparing their budget proposals for 2025.
\nThe proposed 2025 national budget is set at P6.12 trillion, according to the Development Budget Coordination Committee. This is 6.1% higher than the P5.768-trillion national budget for 2024.
\n\u201cThe Fiscal Year 2025 budget aims to continuously address the socioeconomic issues our country has been facing, e.g., high food prices, increasing fuel prices, and the scars that the pandemic has left, among others,\u201d the DBM said.
\nThe government is targeting 6.5-7.5% gross domestic product (GDP) growth this year, but the outlook is clouded by risks to inflation, tight borrowing costs, and a global slowdown.
\nTo tame inflation, the Bangko Sentral ng Pilipinas (BSP) has tightened interest rates by 450 basis points from May 2022 to October 2023, bringing the key rate to a 16-year high of 6.5%.
\nAside from addressing economic issues, the 2025 spending plan will also support infrastructure investments, with emphasis on flagship infrastructure projects approved by the National Economic and Development Authority.
\n\u201cHowever, increased infrastructure spending will not, in any way, detract from the full support provided to the poorest, lagging, climate change and disaster risk vulnerable areas nor the social sector, and basic public services,\u201d the DBM said.
\nThe government also seeks to adopt emerging global trends on digital transformation to boost and foster efficiency, effectiveness, and transparency of service delivery.
\nThe 2025 budget will also include funds for capacity-building programs for local government units (LGUs) such as competency-enhancing interventions, resource generation, public financial management, leadership and development planning, among others.
\nThis is aimed at helping LGUs in assuming the devolved functions and services from the National Government, as mandated by the Supreme Court\u2019s Mandanas-Garcia ruling.
\nThe DBM said the proposed 2025 budget and its priorities will be anchored on the government\u2019s commitment to achieve the 2030 Agenda for Sustainable Development.
\n\u201cWith six years remaining until the 2030 Agenda, there is a need to accelerate the progress or reverse the negative trends to achieve the global goals of establishing a transformative vision towards economic, social, and environmental sustainability,\u201d it said.
\nThe 2025 budget proposals should include the priorities and policy directions of the Marcos administration, citing the government\u2019s medium-term fiscal framework, the eight-point socioeconomic agenda and the Philippine Development Plan for 2023-2028.
\nHowever, due to the impact of the country\u2019s debt burden and competing demands from government agencies, the budget allocation for 2025 will be optimized.
\n\u201cAs part of the evaluation process, the government will consider how the agencies utilized their previous year budget and the implementation progress of their mandated programs and projects to ensure that only those agency proposals, which are implementation-ready, are included in the budget,\u201d the DBM said.
\nThe DBM said agencies should provide the necessary supporting documents such as concrete program plans and designs that outline procurement and implementation milestones.
\nThe budget should also ensure regional plans are in line with national priorities \u201cto achieve equitable regional investment opportunities and growth,\u201d it added.
\n\u201cIn particular, the National Government\u2019s 2025 budget shall provide funds for agencies\u2019 regional programs which are responsive to the needs of the poorest, disadvantaged and lagging LGUs,\u201d the Budget department added.
\nAccording to the DBM memorandum, government agencies should submit their signed hard copies of the 2025 budget proposals between March 25 and April 22.
\nThe proposed 2025 national budget will be submitted to Congress on July 22. \u2014 Keisha B. Ta-asan
\n", "content_text": "THE 2025 national budget will focus on keeping inflation under control, addressing the economic scarring from the pandemic, boosting infrastructure investments, and adapting global trends in digital transformation, the Department of Budget and Management (DBM) said.\nBudget Secretary Amenah F. Pangandaman last week issued the National Budget Call in a memorandum, asking government agencies to begin preparing their budget proposals for 2025.\nThe proposed 2025 national budget is set at P6.12 trillion, according to the Development Budget Coordination Committee. This is 6.1% higher than the P5.768-trillion national budget for 2024.\n\u201cThe Fiscal Year 2025 budget aims to continuously address the socioeconomic issues our country has been facing, e.g., high food prices, increasing fuel prices, and the scars that the pandemic has left, among others,\u201d the DBM said.\nThe government is targeting 6.5-7.5% gross domestic product (GDP) growth this year, but the outlook is clouded by risks to inflation, tight borrowing costs, and a global slowdown.\nTo tame inflation, the Bangko Sentral ng Pilipinas (BSP) has tightened interest rates by 450 basis points from May 2022 to October 2023, bringing the key rate to a 16-year high of 6.5%.\nAside from addressing economic issues, the 2025 spending plan will also support infrastructure investments, with emphasis on flagship infrastructure projects approved by the National Economic and Development Authority.\n\u201cHowever, increased infrastructure spending will not, in any way, detract from the full support provided to the poorest, lagging, climate change and disaster risk vulnerable areas nor the social sector, and basic public services,\u201d the DBM said.\nThe government also seeks to adopt emerging global trends on digital transformation to boost and foster efficiency, effectiveness, and transparency of service delivery.\nThe 2025 budget will also include funds for capacity-building programs for local government units (LGUs) such as competency-enhancing interventions, resource generation, public financial management, leadership and development planning, among others.\nThis is aimed at helping LGUs in assuming the devolved functions and services from the National Government, as mandated by the Supreme Court\u2019s Mandanas-Garcia ruling.\nThe DBM said the proposed 2025 budget and its priorities will be anchored on the government\u2019s commitment to achieve the 2030 Agenda for Sustainable Development.\n\u201cWith six years remaining until the 2030 Agenda, there is a need to accelerate the progress or reverse the negative trends to achieve the global goals of establishing a transformative vision towards economic, social, and environmental sustainability,\u201d it said.\nThe 2025 budget proposals should include the priorities and policy directions of the Marcos administration, citing the government\u2019s medium-term fiscal framework, the eight-point socioeconomic agenda and the Philippine Development Plan for 2023-2028.\nHowever, due to the impact of the country\u2019s debt burden and competing demands from government agencies, the budget allocation for 2025 will be optimized.\n\u201cAs part of the evaluation process, the government will consider how the agencies utilized their previous year budget and the implementation progress of their mandated programs and projects to ensure that only those agency proposals, which are implementation-ready, are included in the budget,\u201d the DBM said.\nThe DBM said agencies should provide the necessary supporting documents such as concrete program plans and designs that outline procurement and implementation milestones.\nThe budget should also ensure regional plans are in line with national priorities \u201cto achieve equitable regional investment opportunities and growth,\u201d it added.\n\u201cIn particular, the National Government\u2019s 2025 budget shall provide funds for agencies\u2019 regional programs which are responsive to the needs of the poorest, disadvantaged and lagging LGUs,\u201d the Budget department added.\nAccording to the DBM memorandum, government agencies should submit their signed hard copies of the 2025 budget proposals between March 25 and April 22.\nThe proposed 2025 national budget will be submitted to Congress on July 22. \u2014 Keisha B. Ta-asan", "date_published": "2024-01-04T00:31:22+08:00", "date_modified": "2024-01-03T20:02:35+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/Amenah-F.-Pangandaman.jpg", "tags": [ "Keisha B. Ta-asan", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566474", "url": "https://www.bworldonline.com/top-stories/2024/01/03/566474/factory-activity-growth-slows-in-dec/", "title": "Factory activity growth slows in Dec.", "content_html": "By Keisha B. Ta-asan, Reporter
\nFACTORY ACTIVITY in the Philippines expanded at a slower pace in December, reflecting modest growth in new orders and output across the sector, S&P Global said on Tuesday.
\nThe S&P Global Philippines Manufacturing Purchasing Managers\u2019 Index (PMI) stood at 51.5 in December, lower than the nine-month high of 52.7 in November.
\nS&P Global said the headline index showed only a modest improvement in operating conditions. At 51.5, the December figure was the weakest in three months or since the 50.6 reading in September.
\n![\"Manufacturing](\"https://live.staticflickr.com/65535/53437529368_1dd41b4723_o.jpg\")
A PMI reading above 50 denotes better operating conditions than in the preceding month, while a reading below 50 shows a deterioration.
\u201cThe year concluded with yet another expansion across the Filipino manufacturing sector. Output and new orders continued to rise, albeit at softer rates,\u201d Maryam Baluch, an economist at S&P Global Market Intelligence, said in a report released on Tuesday.
\nThe headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers\u2019 delivery times (15%) and stocks of purchases (10%).
\nS&P Global said the easing manufacturing growth in December was mainly due to a \u201cnotable softening\u201d in new orders, which grew at the slowest pace in four months.\u00a0 \u00a0
\n\u201cMoreover, total sales growth was focused domestically as the demand picture across international export markets deteriorated, with manufacturers reporting a fresh and solid fall in new export sales in December,\u201d it said.
\nManufacturing output also grew at the weakest pace in three months, S&P Global said. Despite this, output growth remained robust amid a steady rise in new orders.
\n\u201cFirms also noted growing supply-side challenges with average lead times lengthening again in December. Congestion and longer delivery times for imports were blamed for delays. Moreover, vendor performance deteriorated at the greatest extent in five months,\u201d it said.
\nS&P Global noted that manufacturing firms slashed jobs in December, as employment dropped for the second straight month.
\n\u201cThe main concern in the sector remains the further curtailment of workforce numbers. Evidence of spare capacity and a cooldown in new order growth prompted redundancies,\u201d Ms. Baluch said.
\nS&P Global said Philippine manufacturers also reported increased inflationary pressures as prices of fuel, materials, and shipping rose. This prompted firms to hike selling prices.
\nHeadline inflation may have eased to 4% in December, based on a median estimate in a BusinessWorld poll last week. If realized, December inflation would be a tad slower than 4.1% in November and significantly lower than 8.1% in December 2022.
\nThe local statistics agency will release the December inflation data on Jan. 5.
\n\u201cSluggish demand from overseas markets and tight borrowing conditions across the country will act as headwinds as we move into 2024. That said, inflationary pressures are expected to pose less of a threat than seen at the start of 2023, despite gaining pace during December,\u201d Ms. Baluch added.\u00a0
\nStill, Filipino manufacturers remained optimistic for the new year as business confidence rose to a four-month high, according to S&P Global.
\n\u201cHopes of improving demand conditions and plans for increased marketing campaigns boosted optimism,\u201d it said.
\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said factory activity expanded in December, due to the seasonal increase in importation, manufacturing, and other production activities since the third quarter of 2023.
\nHowever, elevated inflation and borrowing costs may have weighed on investments, including those in the manufacturing sector, Mr. Ricafort said.
\n\u201cFurthermore, softer manufacturing and services PMI data for many developed countries around the world\u2026 partly reduced the demand for exports and somewhat dragged on some local manufacturing activities,\u201d he said.
\nSECOND FASTEST IN ASIA
\nThe Philippines recorded the second-highest PMI reading among six Southeast Asian countries in December, just behind Indonesia (52.2).
Manufacturing activity in Vietnam (48.9), Malaysia (47.9), Thailand (45.1) and Myanmar (42.9) contracted in December.
\nOn average, the Association of Southeast Asian Nations (ASEAN) headline PMI dropped to 49.7 in December, easing from 50 in November.
\nS&P Global said the ASEAN headline PMI contracted for the third time in four months.
\n\u201cCentral to the deterioration in operating conditions was a quicker fall in new orders. Inflows of new work fell for the fourth month running in December, which in turn weighed on production growth,\u201d it said.
\nSecurity Bank Corp. Chief Economist Robert Dan J. Roces said the slower growth in December may be attributed to difficulties in supply chain management, possible shifts in consumer demand, fluctuations in prices of raw materials, and changes in overall economic conditions.
\n\u201c(The Philippines) still outperformed ASEAN\u2019s 49.7 though. We calculated that the Philippines\u2019 average monthly PMI was at 52.2 in the fourth quarter, the highest in three quarters,\u201d he said.
\nHe also noted that a recovery in the manufacturing sector may contribute to the Philippines\u2019 faster gross domestic product (GDP) growth, adding that GDP expansion could average 5.8% in the fourth quarter of 2023.
\nChina Banking Corp. Chief Economist Domini S. Velasquez said global economic headwinds continued to weigh on the manufacturing sector.
\n\u201cData from China and the rest of Asia pointed to softer activities towards the end of the year. Bellwether manufacturing countries, especially with regard to semiconductors, such as Taiwan and South Korea posted contractions in December,\u201d she said.
\nFor this year, the Philippine manufacturing sector is expected to grow modestly amid easing inflation.
\n\u201cThe easing of inflationary pressures is expected to support domestic demand, while a recovery in the semiconductor industry is likely to boost external demand in 2024. These factors should contribute to a gradual improvement in the manufacturing sector\u2019s performance,\u201d Ms. Velasquez added.
\n", "content_text": "By Keisha B. Ta-asan, Reporter\nFACTORY ACTIVITY in the Philippines expanded at a slower pace in December, reflecting modest growth in new orders and output across the sector, S&P Global said on Tuesday. \nThe S&P Global Philippines Manufacturing Purchasing Managers\u2019 Index (PMI) stood at 51.5 in December, lower than the nine-month high of 52.7 in November.\nS&P Global said the headline index showed only a modest improvement in operating conditions. At 51.5, the December figure was the weakest in three months or since the 50.6 reading in September.\nA PMI reading above 50 denotes better operating conditions than in the preceding month, while a reading below 50 shows a deterioration.\n\u201cThe year concluded with yet another expansion across the Filipino manufacturing sector. Output and new orders continued to rise, albeit at softer rates,\u201d Maryam Baluch, an economist at S&P Global Market Intelligence, said in a report released on Tuesday.\nThe headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers\u2019 delivery times (15%) and stocks of purchases (10%).\nS&P Global said the easing manufacturing growth in December was mainly due to a \u201cnotable softening\u201d in new orders, which grew at the slowest pace in four months.\u00a0 \u00a0\n\u201cMoreover, total sales growth was focused domestically as the demand picture across international export markets deteriorated, with manufacturers reporting a fresh and solid fall in new export sales in December,\u201d it said.\nManufacturing output also grew at the weakest pace in three months, S&P Global said. Despite this, output growth remained robust amid a steady rise in new orders. \n\u201cFirms also noted growing supply-side challenges with average lead times lengthening again in December. Congestion and longer delivery times for imports were blamed for delays. Moreover, vendor performance deteriorated at the greatest extent in five months,\u201d it said.\nS&P Global noted that manufacturing firms slashed jobs in December, as employment dropped for the second straight month. \n\u201cThe main concern in the sector remains the further curtailment of workforce numbers. Evidence of spare capacity and a cooldown in new order growth prompted redundancies,\u201d Ms. Baluch said. \nS&P Global said Philippine manufacturers also reported increased inflationary pressures as prices of fuel, materials, and shipping rose. This prompted firms to hike selling prices.\nHeadline inflation may have eased to 4% in December, based on a median estimate in a BusinessWorld poll last week. If realized, December inflation would be a tad slower than 4.1% in November and significantly lower than 8.1% in December 2022.\nThe local statistics agency will release the December inflation data on Jan. 5.\n\u201cSluggish demand from overseas markets and tight borrowing conditions across the country will act as headwinds as we move into 2024. That said, inflationary pressures are expected to pose less of a threat than seen at the start of 2023, despite gaining pace during December,\u201d Ms. Baluch added.\u00a0\nStill, Filipino manufacturers remained optimistic for the new year as business confidence rose to a four-month high, according to S&P Global.\n\u201cHopes of improving demand conditions and plans for increased marketing campaigns boosted optimism,\u201d it said.\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said factory activity expanded in December, due to the seasonal increase in importation, manufacturing, and other production activities since the third quarter of 2023.\nHowever, elevated inflation and borrowing costs may have weighed on investments, including those in the manufacturing sector, Mr. Ricafort said.\n\u201cFurthermore, softer manufacturing and services PMI data for many developed countries around the world\u2026 partly reduced the demand for exports and somewhat dragged on some local manufacturing activities,\u201d he said.\nSECOND FASTEST IN ASIA\nThe Philippines recorded the second-highest PMI reading among six Southeast Asian countries in December, just behind Indonesia (52.2).\nManufacturing activity in Vietnam (48.9), Malaysia (47.9), Thailand (45.1) and Myanmar (42.9) contracted in December.\nOn average, the Association of Southeast Asian Nations (ASEAN) headline PMI dropped to 49.7 in December, easing from 50 in November.\nS&P Global said the ASEAN headline PMI contracted for the third time in four months.\n\u201cCentral to the deterioration in operating conditions was a quicker fall in new orders. Inflows of new work fell for the fourth month running in December, which in turn weighed on production growth,\u201d it said.\nSecurity Bank Corp. Chief Economist Robert Dan J. Roces said the slower growth in December may be attributed to difficulties in supply chain management, possible shifts in consumer demand, fluctuations in prices of raw materials, and changes in overall economic conditions.\n\u201c(The Philippines) still outperformed ASEAN\u2019s 49.7 though. We calculated that the Philippines\u2019 average monthly PMI was at 52.2 in the fourth quarter, the highest in three quarters,\u201d he said.\nHe also noted that a recovery in the manufacturing sector may contribute to the Philippines\u2019 faster gross domestic product (GDP) growth, adding that GDP expansion could average 5.8% in the fourth quarter of 2023.\nChina Banking Corp. Chief Economist Domini S. Velasquez said global economic headwinds continued to weigh on the manufacturing sector.\n\u201cData from China and the rest of Asia pointed to softer activities towards the end of the year. Bellwether manufacturing countries, especially with regard to semiconductors, such as Taiwan and South Korea posted contractions in December,\u201d she said.\nFor this year, the Philippine manufacturing sector is expected to grow modestly amid easing inflation.\n\u201cThe easing of inflationary pressures is expected to support domestic demand, while a recovery in the semiconductor industry is likely to boost external demand in 2024. These factors should contribute to a gradual improvement in the manufacturing sector\u2019s performance,\u201d Ms. Velasquez added.", "date_published": "2024-01-03T00:34:49+08:00", "date_modified": "2024-01-02T20:43:14+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/Toyota-Aisin-Transmission-Plant-workers.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ], "summary": "FACTORY ACTIVITY in the Philippines expanded at a slower pace in December, reflecting modest growth in new orders and output across the sector, S&P Global said on Tuesday." }, { "id": "https://www.bworldonline.com/?p=566473", "url": "https://www.bworldonline.com/top-stories/2024/01/03/566473/becoming-a-manufacturing-powerhouse-remains-a-pipe-dream-for-philippines/", "title": "Becoming a manufacturing powerhouse remains a pipe dream for Philippines", "content_html": "By Kyle Aristophere T. Atienza, Reporter
\nLILY G. TERRENIO was 19 years old when she became a factory worker at Amertron, Inc. inside the Clark Freeport Zone north of the Philippine capital in 1988.
\nThe high school graduate worked for the Taiwan-owned semiconductor company until 2000, before leaving for Dubai to work as a chambermaid.
\n\u201cI would have wanted to join a different manufacturer after I left the company to broaden my experience, but options were limited,\u201d she said in an interview.
\nMs. Terrenio came back to the Philippines after two decades, when the manufacturing sector contracted by 9.8% from a year earlier amid a coronavirus pandemic.
\nThe government must rescue the manufacturing sector from issues that have stalled growth including the lack of skilled workers, governance problems and an impending energy crisis that could paralyze the economy, analysts said.
\n\u201cPhilippine manufacturing has been on a retreat since the 1980s,\u201d national scientist Raul V. Fabella, a professor emeritus at the University of the Philippines School of Economics said in an e-mail. \u201cThe share of manufacturing in Philippine gross domestic product has been losing out to services.\u201d
\nHe called the phenomenon \u201cdevelopment progeria,\u201d which happens in low-income economies when the share of industry sectors including manufacturing falls while services flourish. \u201cThe dynamics will continue into the near future because its roots are structural.\u201d
\nManufacturing activity in the Philippines continued to expand in December, albeit at a slower pace, S&P Global said on Tuesday. The S&P Global Philippines Manufacturing Purchasing Managers\u2019 Index (PMI) slipped to 51.5 in December, from a nine-month high of 52.7 in November.
\nThe Philippines had the second-highest PMI reading among Southeast Asian countries with available data, after Indonesia (52.2). Vietnam, Malaysia, Thailand and Myanmar all contracted in December.
\nIt was a significant development for a sector that has been lagging its regional peers for decades.
\nIn 2022, the largest share of exported commodity goods from the Philippines were electronic products, particularly semiconductors and electronic data processing products such as hard drives, making it the biggest contributor to the country\u2019s export sales, according to Statista.
\nAside from electronics, the Philippines has a large food manufacturing industry, which generated a gross value added of about P1.8 trillion ($32.5 billion) in 2022. Among the country\u2019s leading food exports were animal or vegetable fats and oils and processed foods such as bread, cereals and dairy products.
\nFood manufacturers in the country also produce flour and sugar for domestic consumption and export. The Philippines also exports chemicals and chemical products such as fertilizers, petrochemicals and plastic products.
\nFOREIGN OWNERSHIP
\nManufacturing sector growth relies on foreign direct investments (FDI), which amounted to only $9.2 billion in 2022, behind Thailand ($10 billion), Malaysia ($15.1 billion), Vietnam ($17.9 billion), Indonesia ($21.7 billion) and Singapore ($140.8 billion).
This was despite the passage of laws liberalizing the Philippine economy, including the Corporate Recovery and Tax Incentives for Enterprises Act, which cut the corporate income tax for domestic and foreign corporations to 25% from 30%.
\nIn 2021, the Philippines passed a law that amended the country\u2019s 85-year-old Public Service Act, allowing full foreign ownership in domestic shipping, telecommunications, shipping, railways and subways, airlines, expressways and tollways, and airports.
\nGlobal investment banker Stephen Anthony T. CuUnjieng said foreign investors \u201cwant to make money first\u201d and changing the laws \u201cwould not necessarily make them make money.\u201d
\n\u201cIf the country or the sector is unattractive or less profitable than other countries, changing the law will not change that,\u201d he told One News channel in December, amid a renewed push to amend economic provisions of the 1987 Philippine Constitution.
\n\u201cIf the sector is attractive and you make foreign ownership and doing business easier, then yes, more FDIs will come in,\u201d Mr. CuUnjieng said. \u201cAllowing more foreign ownership will work. But if you\u2019re not attractive to begin with, opening it up to 100% ownership and giving subsidies won\u2019t change it if the return on investment will be lower.\u201d
\nHe said investors in the manufacturing sector are largely looking at labor productivity and lower electricity costs, which can be anywhere from 20% to 60% of their production costs.
\n\u201cIf a manufacturer in the Philippines is 20% to 40% more expensive than another in Indonesia, Thailand or Vietnam, you\u2019re starting out already with a deficit of as much as 30% versus other countries, why would you come here for manufacturing?\u201d he asked.
\nPresident Ferdinand R. Marcos, Jr. last year extended by another 15 years the contract for the Malampaya gas field, which supplies 20% of the Philippines\u2019 total electricity requirements, allowing the operator to drill new wells.
\nAmid the declining output of the gas field, which is expected to run dry by 2027, Mr. Marcos expressed willingness to resume joint energy exploration activities in the South China Sea.
\n\u201cOur power cost is the highest in ASEAN (Association of Southeast Asian Nations) for large establishments,\u201d Mr. Fabella said, noting that the state should lower manufacturers\u2019 electricity costs by exempting them from missionary, universal and stranded cost charges.
\nThe possible decline in the quality of the Philippine labor force also threatens the country\u2019s manufacturing ambitions, according to Mr. CuUnjieng.
\nFilipino students were still among the world\u2019s weakest in math, reading and science, according to the 2022 Program for International Student Assessment (PISA), with the Philippines ranking 77th out of 81 countries and performing worse than the global average in all categories.
\nTerry L. Ridon, convenor of InfraWatch PH, said decades-long governance issues such as corruption and red tape would continue to hound the manufacturing sector.
\nInvestors seeking to establish hubs in emerging economies would look for countries that have \u201cvery streamlined processes for permits and licenses and have low to zero perception of government corruption, he said in an e-mail.
\n\u201cOur government does not live by contracts it signed and stands ready to change provisions depending on populist sentiment,\u201d Mr. Fabella said. \u201cLong-term investors do not invest where expropriation noise is rampant.\u201d
\nThe stability of politics and ease of doing business in Vietnam have been cited as key factors behind its rise as the top choice for global manufacturers diversifying away from China, which has been in a years-long trade war with the United States.
\nThere are fewer occurrences of policy reversals in Vietnam because of its political structure, \u201cthus increasing certainty, which is good for the investment climate,\u201d George N. Manzano, who teaches trade at the University of Asia and the Pacific, said in an e-mail.
\nVietnam has a one-stop shop for investors, Mr. CuUnjieng said. \u201cYou go to one government agency, and they take care of everything. In the Philippines, you often have one shop at every stop.\u201d
\nVietnam had FDIs worth $112 billion from 2010 to 2019, compared with $57 billion for the Philippines. Its merchandise exports in 2019 hit $300 million, compared with $70 million for the Philippines.
\n\u201cThe heady foreign direct investments that Vietnam attracted in the past years may have increased its attractiveness,\u201d Mr. Manzano said. \u201cInvestments beget other investments, particularly if an investment of a sizeable manufacturing concern will attract its supplier industries to locate as well.\u201d
\nHe noted that as more foreign investments cluster at one hub, the production costs usually fall, leading to so-called \u201ceconomies of agglomeration.\u201d
\n\u201cAt the same time, there will be more flow of ideas prompting innovation,\u201d he said. \u201cThe clustering of industries in Vietnam\u2019s special economic zones can lead to economies of agglomeration.\u201d
\nThe Philippine Economic Zone Authority said it wants to benefit from the relocation of big foreign companies, especially those in the technology sector, from China.
\nThe country anticipates increased investments in metal fabrication or skilled manufacturing, especially in the electronic vehicle (EV) sector, PEZA Director-General Tereso O. Panga said in a Viber call. He added that EV players from China, the US, Indonesia, South Korea and Japan are expected to set up production sites in the country this year.
\n\u201cIt\u2019s not just multinational companies that are relocating from China, but also mainland Chinese manufacturing businesses so they can avail themselves of GSP+ privileges for their exports,\u201d he said.
\nThe European Parliament and European Council have agreed to extend GSP+ arrangements for four more years while they negotiate reforms to the trade deal, where the Philippines enjoys zero duties on more than 6,000 exports.
\nAs the Philippines steps up efforts to save its export-oriented manufacturing sector, the country must also look at its volatile exchange rate, which hurts exporters and is deadly to smaller ones, Mr. Manzano said.
\n\u201cWe should provide a more stable exchange rate regime geared to level the playing field between nontradable and tradable goods.\u201d
\nThe Philippine trade deficit has been widening in the past years, as the country imports more than it exports.
\nAnalysts said tensions with China don\u2019t bode well for the country\u2019s export-oriented manufacturing sector.
\nChina remains the largest source of technologies that the Philippines needs to make its exports competitive, such as electronics and machinery, Mr. Manzano said.
\n\u201cThe Philippines needs electronic parts and components from China in order to export,\u201d he said. \u201cIf the imports of parts and components are sourced from more expensive suppliers, the competitiveness of Philippine exports, particularly electronics, would be undermined.\u201d
\n\u201cThe protection and development of our export-focused manufacturing is critical to propping up our dollar reserves in light of our massive import requirements in infrastructure and agriculture,\u201d Mr. Ridon said. \u201cThis has not been enough to ensure a positive balance of trade for almost a decade.\u201d
\n", "content_text": "By Kyle Aristophere T. Atienza, Reporter\nLILY G. TERRENIO was 19 years old when she became a factory worker at Amertron, Inc. inside the Clark Freeport Zone north of the Philippine capital in 1988.\nThe high school graduate worked for the Taiwan-owned semiconductor company until 2000, before leaving for Dubai to work as a chambermaid.\n\u201cI would have wanted to join a different manufacturer after I left the company to broaden my experience, but options were limited,\u201d she said in an interview.\nMs. Terrenio came back to the Philippines after two decades, when the manufacturing sector contracted by 9.8% from a year earlier amid a coronavirus pandemic.\nThe government must rescue the manufacturing sector from issues that have stalled growth including the lack of skilled workers, governance problems and an impending energy crisis that could paralyze the economy, analysts said.\n\u201cPhilippine manufacturing has been on a retreat since the 1980s,\u201d national scientist Raul V. Fabella, a professor emeritus at the University of the Philippines School of Economics said in an e-mail. \u201cThe share of manufacturing in Philippine gross domestic product has been losing out to services.\u201d\nHe called the phenomenon \u201cdevelopment progeria,\u201d which happens in low-income economies when the share of industry sectors including manufacturing falls while services flourish. \u201cThe dynamics will continue into the near future because its roots are structural.\u201d\nManufacturing activity in the Philippines continued to expand in December, albeit at a slower pace, S&P Global said on Tuesday. The S&P Global Philippines Manufacturing Purchasing Managers\u2019 Index (PMI) slipped to 51.5 in December, from a nine-month high of 52.7 in November.\nThe Philippines had the second-highest PMI reading among Southeast Asian countries with available data, after Indonesia (52.2). Vietnam, Malaysia, Thailand and Myanmar all contracted in December.\nIt was a significant development for a sector that has been lagging its regional peers for decades.\nIn 2022, the largest share of exported commodity goods from the Philippines were electronic products, particularly semiconductors and electronic data processing products such as hard drives, making it the biggest contributor to the country\u2019s export sales, according to Statista.\nAside from electronics, the Philippines has a large food manufacturing industry, which generated a gross value added of about P1.8 trillion ($32.5 billion) in 2022. Among the country\u2019s leading food exports were animal or vegetable fats and oils and processed foods such as bread, cereals and dairy products.\nFood manufacturers in the country also produce flour and sugar for domestic consumption and export. The Philippines also exports chemicals and chemical products such as fertilizers, petrochemicals and plastic products.\nFOREIGN OWNERSHIP\nManufacturing sector growth relies on foreign direct investments (FDI), which amounted to only $9.2 billion in 2022, behind Thailand ($10 billion), Malaysia ($15.1 billion), Vietnam ($17.9 billion), Indonesia ($21.7 billion) and Singapore ($140.8 billion).\nThis was despite the passage of laws liberalizing the Philippine economy, including the Corporate Recovery and Tax Incentives for Enterprises Act, which cut the corporate income tax for domestic and foreign corporations to 25% from 30%. \nIn 2021, the Philippines passed a law that amended the country\u2019s 85-year-old Public Service Act, allowing full foreign ownership in domestic shipping, telecommunications, shipping, railways and subways, airlines, expressways and tollways, and airports.\nGlobal investment banker Stephen Anthony T. CuUnjieng said foreign investors \u201cwant to make money first\u201d and changing the laws \u201cwould not necessarily make them make money.\u201d\n\u201cIf the country or the sector is unattractive or less profitable than other countries, changing the law will not change that,\u201d he told One News channel in December, amid a renewed push to amend economic provisions of the 1987 Philippine Constitution.\n\u201cIf the sector is attractive and you make foreign ownership and doing business easier, then yes, more FDIs will come in,\u201d Mr. CuUnjieng said. \u201cAllowing more foreign ownership will work. But if you\u2019re not attractive to begin with, opening it up to 100% ownership and giving subsidies won\u2019t change it if the return on investment will be lower.\u201d\nHe said investors in the manufacturing sector are largely looking at labor productivity and lower electricity costs, which can be anywhere from 20% to 60% of their production costs.\n\u201cIf a manufacturer in the Philippines is 20% to 40% more expensive than another in Indonesia, Thailand or Vietnam, you\u2019re starting out already with a deficit of as much as 30% versus other countries, why would you come here for manufacturing?\u201d he asked. \nPresident Ferdinand R. Marcos, Jr. last year extended by another 15 years the contract for the Malampaya gas field, which supplies 20% of the Philippines\u2019 total electricity requirements, allowing the operator to drill new wells.\nAmid the declining output of the gas field, which is expected to run dry by 2027, Mr. Marcos expressed willingness to resume joint energy exploration activities in the South China Sea.\n\u201cOur power cost is the highest in ASEAN (Association of Southeast Asian Nations) for large establishments,\u201d Mr. Fabella said, noting that the state should lower manufacturers\u2019 electricity costs by exempting them from missionary, universal and stranded cost charges. \nThe possible decline in the quality of the Philippine labor force also threatens the country\u2019s manufacturing ambitions, according to Mr. CuUnjieng.\nFilipino students were still among the world\u2019s weakest in math, reading and science, according to the 2022 Program for International Student Assessment (PISA), with the Philippines ranking 77th out of 81 countries and performing worse than the global average in all categories.\nTerry L. Ridon, convenor of InfraWatch PH, said decades-long governance issues such as corruption and red tape would continue to hound the manufacturing sector.\nInvestors seeking to establish hubs in emerging economies would look for countries that have \u201cvery streamlined processes for permits and licenses and have low to zero perception of government corruption, he said in an e-mail.\n\u201cOur government does not live by contracts it signed and stands ready to change provisions depending on populist sentiment,\u201d Mr. Fabella said. \u201cLong-term investors do not invest where expropriation noise is rampant.\u201d\nThe stability of politics and ease of doing business in Vietnam have been cited as key factors behind its rise as the top choice for global manufacturers diversifying away from China, which has been in a years-long trade war with the United States.\nThere are fewer occurrences of policy reversals in Vietnam because of its political structure, \u201cthus increasing certainty, which is good for the investment climate,\u201d George N. Manzano, who teaches trade at the University of Asia and the Pacific, said in an e-mail.\nVietnam has a one-stop shop for investors, Mr. CuUnjieng said. \u201cYou go to one government agency, and they take care of everything. In the Philippines, you often have one shop at every stop.\u201d\nVietnam had FDIs worth $112 billion from 2010 to 2019, compared with $57 billion for the Philippines. Its merchandise exports in 2019 hit $300 million, compared with $70 million for the Philippines.\n\u201cThe heady foreign direct investments that Vietnam attracted in the past years may have increased its attractiveness,\u201d Mr. Manzano said. \u201cInvestments beget other investments, particularly if an investment of a sizeable manufacturing concern will attract its supplier industries to locate as well.\u201d\nHe noted that as more foreign investments cluster at one hub, the production costs usually fall, leading to so-called \u201ceconomies of agglomeration.\u201d\n\u201cAt the same time, there will be more flow of ideas prompting innovation,\u201d he said. \u201cThe clustering of industries in Vietnam\u2019s special economic zones can lead to economies of agglomeration.\u201d\nThe Philippine Economic Zone Authority said it wants to benefit from the relocation of big foreign companies, especially those in the technology sector, from China.\nThe country anticipates increased investments in metal fabrication or skilled manufacturing, especially in the electronic vehicle (EV) sector, PEZA Director-General Tereso O. Panga said in a Viber call. He added that EV players from China, the US, Indonesia, South Korea and Japan are expected to set up production sites in the country this year.\n\u201cIt\u2019s not just multinational companies that are relocating from China, but also mainland Chinese manufacturing businesses so they can avail themselves of GSP+ privileges for their exports,\u201d he said.\nThe European Parliament and European Council have agreed to extend GSP+ arrangements for four more years while they negotiate reforms to the trade deal, where the Philippines enjoys zero duties on more than 6,000 exports.\nAs the Philippines steps up efforts to save its export-oriented manufacturing sector, the country must also look at its volatile exchange rate, which hurts exporters and is deadly to smaller ones, Mr. Manzano said.\n\u201cWe should provide a more stable exchange rate regime geared to level the playing field between nontradable and tradable goods.\u201d\nThe Philippine trade deficit has been widening in the past years, as the country imports more than it exports.\nAnalysts said tensions with China don\u2019t bode well for the country\u2019s export-oriented manufacturing sector.\nChina remains the largest source of technologies that the Philippines needs to make its exports competitive, such as electronics and machinery, Mr. Manzano said.\n\u201cThe Philippines needs electronic parts and components from China in order to export,\u201d he said. \u201cIf the imports of parts and components are sourced from more expensive suppliers, the competitiveness of Philippine exports, particularly electronics, would be undermined.\u201d\n\u201cThe protection and development of our export-focused manufacturing is critical to propping up our dollar reserves in light of our massive import requirements in infrastructure and agriculture,\u201d Mr. Ridon said. \u201cThis has not been enough to ensure a positive balance of trade for almost a decade.\u201d", "date_published": "2024-01-03T00:33:48+08:00", "date_modified": "2024-01-03T00:48:41+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/electronics-worker.jpg", "tags": [ "Kyle Aristophere T. Atienza", "YEARENDER", "Editors' Picks", "One News", "Special Reports", "Top Stories" ], "summary": "LILY G. TERRENIO was 19 years old when she became a factory worker at Amertron, Inc. inside the Clark Freeport Zone north of the Philippine capital in 1988." }, { "id": "https://www.bworldonline.com/?p=566472", "url": "https://www.bworldonline.com/top-stories/2024/01/03/566472/banks-continue-to-miss-10-lending-quota-for-msmes/", "title": "Banks continue to miss 10% lending quota for MSMEs", "content_html": "\n
PHILIPPINE BANKS failed to meet the mandated quota for small business loans in the first nine months of 2023, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
\nLoans extended by the banking industry to micro-, small-, and medium-sized enterprises (MSMEs) amounted to P552.404 billion as of end-September, which made up only 4.63% of their total loan portfolio of P11.9 trillion.
\nThis was 21.6% higher than P454.303 billion in loans extended to the MSME sector in the January-to-September period in 2022.
\nUnder Republic Act No. 6977 or the Magna Carta for MSMEs, banks are required to allocate 10% of their total loan portfolio for small businesses to boost the sector \u2014 8% for micro and small enterprises and 2% for medium-sized enterprises.
\nHowever, banks have long opted to incur penalties for noncompliance instead of taking on the risks associated with lending to small businesses.
\nBSP data showed loans for micro and small enterprises amounted to P214.748 billion as of end-September, comprising just 1.8% of their total loan portfolio and well below the 8% quota.
\nOn the other hand, lending to medium-sized enterprises stood at P337.656 billion in the period. This is equivalent to 2.83% of the banks\u2019 credit book and above the 2% minimum ratio required under the law.
\nBased on the type of bank, BSP data showed universal and commercial banks disbursed P153.105 billion in credit to micro and small enterprises as of end-September, equivalent to only 1.44% of their P11.13-trillion loan portfolio.
\nBig banks\u2019 loans to medium-sized enterprises stood at P291.452 billion or 2.62% of their loan book.
\nAt the same time, thrift banks were also unable to meet the quota as their loans to micro and small enterprises reached P29.228 billion or 3.81% of their P591.821-billion loan portfolio.
\nStill, thrift lenders went beyond the credit quota for medium enterprises as their loans to the sector hit P27.903 billion or 4.75% of their loan book.
\nMeanwhile, rural and cooperative banks extended loans worth P32.346 billion to micro and small enterprises. This is equivalent to 16.39% of their P197.401-billion credit book, and well above the minimum amount required by law. Their loans to medium enterprises hit P18.3 billion or 9.27% of their loan portfolio.
\nThe BSP also recorded the loans granted by digital banks to the MSME sector. Digital banks disbursed P70 million in credit to micro and small enterprises in the first nine months of 2023, representing 0.4% of their P17.25-billion loan portfolio.
\nDigital banks did not extend loans to medium enterprises.
\nDuring the pandemic, the BSP allowed banks to count MSME loans as alternative reserve compliance with the reserve requirements to help prop up the sector. This relief measure expired on June 30, 2023.
\nHowever, the relief measure was extended to thrift banks as well as rural and cooperative banks until Dec. 31, 2025.
\nBased on separate central bank data, small banks allocated a total of P8-billion and P6.5-million loans to MSMEs and large enterprises, respectively, for the week ending Oct. 19.
\nThe unwinding of the pandemic relief measure coincided with the reduction in banks\u2019 reserve requirement ratios on June 30, 2023.
\nIn April 2023, the central bank launched the Credit Risk Database Scoring Model, which is expected to serve as an additional tool that lenders can use to analyze the creditworthiness of MSMEs, especially those without credit history or enough collateral. \u2014 Keisha B. Ta-asan
\n", "content_text": "PHILIPPINE BANKS failed to meet the mandated quota for small business loans in the first nine months of 2023, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.\nLoans extended by the banking industry to micro-, small-, and medium-sized enterprises (MSMEs) amounted to P552.404 billion as of end-September, which made up only 4.63% of their total loan portfolio of P11.9 trillion. \nThis was 21.6% higher than P454.303 billion in loans extended to the MSME sector in the January-to-September period in 2022. \nUnder Republic Act No. 6977 or the Magna Carta for MSMEs, banks are required to allocate 10% of their total loan portfolio for small businesses to boost the sector \u2014 8% for micro and small enterprises and 2% for medium-sized enterprises. \nHowever, banks have long opted to incur penalties for noncompliance instead of taking on the risks associated with lending to small businesses.\nBSP data showed loans for micro and small enterprises amounted to P214.748 billion as of end-September, comprising just 1.8% of their total loan portfolio and well below the 8% quota.\nOn the other hand, lending to medium-sized enterprises stood at P337.656 billion in the period. This is equivalent to 2.83% of the banks\u2019 credit book and above the 2% minimum ratio required under the law. \nBased on the type of bank, BSP data showed universal and commercial banks disbursed P153.105 billion in credit to micro and small enterprises as of end-September, equivalent to only 1.44% of their P11.13-trillion loan portfolio.\nBig banks\u2019 loans to medium-sized enterprises stood at P291.452 billion or 2.62% of their loan book.\nAt the same time, thrift banks were also unable to meet the quota as their loans to micro and small enterprises reached P29.228 billion or 3.81% of their P591.821-billion loan portfolio.\nStill, thrift lenders went beyond the credit quota for medium enterprises as their loans to the sector hit P27.903 billion or 4.75% of their loan book.\nMeanwhile, rural and cooperative banks extended loans worth P32.346 billion to micro and small enterprises. This is equivalent to 16.39% of their P197.401-billion credit book, and well above the minimum amount required by law. Their loans to medium enterprises hit P18.3 billion or 9.27% of their loan portfolio. \nThe BSP also recorded the loans granted by digital banks to the MSME sector. Digital banks disbursed P70 million in credit to micro and small enterprises in the first nine months of 2023, representing 0.4% of their P17.25-billion loan portfolio.\nDigital banks did not extend loans to medium enterprises.\nDuring the pandemic, the BSP allowed banks to count MSME loans as alternative reserve compliance with the reserve requirements to help prop up the sector. This relief measure expired on June 30, 2023. \nHowever, the relief measure was extended to thrift banks as well as rural and cooperative banks until Dec. 31, 2025.\nBased on separate central bank data, small banks allocated a total of P8-billion and P6.5-million loans to MSMEs and large enterprises, respectively, for the week ending Oct. 19.\nThe unwinding of the pandemic relief measure coincided with the reduction in banks\u2019 reserve requirement ratios on June 30, 2023. \nIn April 2023, the central bank launched the Credit Risk Database Scoring Model, which is expected to serve as an additional tool that lenders can use to analyze the creditworthiness of MSMEs, especially those without credit history or enough collateral. \u2014 Keisha B. Ta-asan", "date_published": "2024-01-03T00:32:48+08:00", "date_modified": "2024-01-02T20:40:33+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/sari-sari-store-vendor-wc.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566471", "url": "https://www.bworldonline.com/top-stories/2024/01/03/566471/philippines-yet-to-fulfill-some-action-plans-to-exit-from-fatf-gray-list/", "title": "Philippines yet to fulfill some action plans to exit from FATF \u2018gray list\u2019", "content_html": "\n
THE PHILIPPINES has yet to fulfill several action plans more than two years since it was placed under the \u201cgray list\u201d of the Financial Action Task Force (FATF), the country\u2019s dirty money watchdog said.
\nBut the Anti-Money Laundering Council (AMLC) is still hoping the Philippines will be able to exit the FATF\u2019s gray list this year, and to avoid a possible inclusion in the blacklist.
\nAt a Palace briefing, AMLC Executive Director Matthew M. David said the Philippines still has to address eight out of the 18 action plan items it had committed to comply with to be removed from the gray list.
\n\u201cThe most challenging action item is regarding terrorism financing prosecution. We need to file more terrorism financing cases and the one in charge of complying with this action item are the law enforcement agencies, including the AMLC,\u201d he said.
\nOther remaining action plans include the effective risk-based supervision of nonfinancial businesses and professionals, mitigating risk associated with casino junkets, and streamlining access to beneficial ownership information, Mr. David said.
\nThe Philippines has been in the global financial crime watchdog\u2019s gray list of jurisdictions under increased monitoring for dirty money risks since June 2021.
\nSince the Philippines had failed to meet the FATF\u2019s January 2023 deadline to comply with the action plans, Mr. David said the government has a self-imposed goal of exiting the gray list this month.
\n\u201cThe longer we are on the gray list, the bigger the possibility or the higher the risk that we will enter the blacklist,\u201d he said.
\nOnly three countries are currently in the FATF\u2019s blacklist \u2014 North Korea, Iran and Myanmar.
\nPresident Ferdinand R. Marcos, Jr. on Tuesday presided over the\u00a0 sectoral meeting on the status of the Philippines in FATF gray list.
\n\u201cThe President also directed the agencies of government to continue with their actions and to continuously sustain good coordination among themselves, between the law enforcement and other government agencies,\u201d Mr. David said.
\nEnrico P. Villanueva, who teaches banking at the University of the Philippines Los Ba\u00f1os, said banks have done a lot of work and investments in order to manage risks related to money laundering and terrorism financing. Nonbank entities need to do more to catch up, he noted.
\n\u201cFor banks, improvement can still be made on drilling down customer accounts to the ultimate beneficial owners,\u201d he said, noting that beneficial ownership information should be digitized and accessible to regulators and law enforcement agencies.
\nFor nonbank entities, Mr. Villanueva said the regulator should impose penalties such as monetary fines or suspension of business licenses \u201cto communicate seriousness in enforcement.\u201d
\nMichael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the Philippines needs to lift the Bank Secrecy Law to make banking regulations at par with those of its Southeast Asian neighbors.
\n\u201cIt will also help in facilitating the integration of the country\u2019s capital markets into the region,\u201d he said via Messenger chat.
\nShould the Philippines be blacklisted by FATF,\u00a0 Mr. Ricafort said investments and other fund flows into the Philippines would be affected.
\nLeonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, called on the government to reverse its policy on offshore gambling.
\n\u201cA first order of business should be the elimination of offshore gambling which is susceptible to money laundering schemes,\u201d he said. \u201cBut of course, this should involve a whole-of-government approach which apparently this government has not done.\u201d
\nIn March 2020, then-senator Franklin M. Drilon flagged that millions of dollars brought into the Philippines between December 2019 and February 2020 might have been laundered through Philippine Offshore Gaming Operators (POGOs), which refer to Chinese gambling companies that offer online gambling services to markets outside the Philippines.
\nThe Marcos administration began a crackdown on many POGOs after a spate of kidnappings that targeted their Chinese workers.
\n\u201cThe President has reiterated the government\u2019s high-level political commitment and directed all government agencies concerned to swiftly address the remaining deficiencies in relation to the gray-listing of the Philippines,\u201d Mr. David said at the Tuesday briefing.
\nHe said investor confidence and even the country\u2019s credit rating may be affected if the Philippines remains on the gray list.
\n\u201cIt may also affect foreign direct investments in the Philippines because if you don\u2019t exit the gray list, they may think that our anti-money laundering, combating terrorism financing system is not adequate enough, or sufficient enough or strong enough,\u201d he added.
\nRommel C. Banlaoi, chairman of the Philippine Institute for Peace, Violence, and Terrorism Research, recognized the passage of The Terrorism Financing Prevention and Suppression Act of 2012, which was complemented by a 2020 law that amended the country\u2019s Anti-Terrorism Act of 2001.
\nThe two laws as well as the decline of terrorist threats would be enough for the Philippines to exit from the FATF\u2019s gray list.
\nThe country\u2019s anti-terrorism financing measures should consider the emerging global financial landscape, Chester B. Cabalza, founder of Manila-based International Development and Security Cooperation, said via Messenger chat.
\nMr. Cabalza cited the introduction of bitcoins, online transactions, and virtual wallets.
\nMr. Villanueva said the action plan items needed to get out of the gray list may be challenging but not impossible.
\n\u201cThey just require bureaucratic or political will. For societies or governments that tolerate wrongdoings, political will may be wanting,\u201d he said. \u2014 Kyle Aristophere T. Atienza
\n", "content_text": "THE PHILIPPINES has yet to fulfill several action plans more than two years since it was placed under the \u201cgray list\u201d of the Financial Action Task Force (FATF), the country\u2019s dirty money watchdog said.\nBut the Anti-Money Laundering Council (AMLC) is still hoping the Philippines will be able to exit the FATF\u2019s gray list this year, and to avoid a possible inclusion in the blacklist.\nAt a Palace briefing, AMLC Executive Director Matthew M. David said the Philippines still has to address eight out of the 18 action plan items it had committed to comply with to be removed from the gray list.\n\u201cThe most challenging action item is regarding terrorism financing prosecution. We need to file more terrorism financing cases and the one in charge of complying with this action item are the law enforcement agencies, including the AMLC,\u201d he said.\nOther remaining action plans include the effective risk-based supervision of nonfinancial businesses and professionals, mitigating risk associated with casino junkets, and streamlining access to beneficial ownership information, Mr. David said.\nThe Philippines has been in the global financial crime watchdog\u2019s gray list of jurisdictions under increased monitoring for dirty money risks since June 2021. \nSince the Philippines had failed to meet the FATF\u2019s January 2023 deadline to comply with the action plans, Mr. David said the government has a self-imposed goal of exiting the gray list this month.\n\u201cThe longer we are on the gray list, the bigger the possibility or the higher the risk that we will enter the blacklist,\u201d he said.\nOnly three countries are currently in the FATF\u2019s blacklist \u2014 North Korea, Iran and Myanmar.\nPresident Ferdinand R. Marcos, Jr. on Tuesday presided over the\u00a0 sectoral meeting on the status of the Philippines in FATF gray list.\n\u201cThe President also directed the agencies of government to continue with their actions and to continuously sustain good coordination among themselves, between the law enforcement and other government agencies,\u201d Mr. David said.\nEnrico P. Villanueva, who teaches banking at the University of the Philippines Los Ba\u00f1os, said banks have done a lot of work and investments in order to manage risks related to money laundering and terrorism financing. Nonbank entities need to do more to catch up, he noted.\n\u201cFor banks, improvement can still be made on drilling down customer accounts to the ultimate beneficial owners,\u201d he said, noting that beneficial ownership information should be digitized and accessible to regulators and law enforcement agencies.\nFor nonbank entities, Mr. Villanueva said the regulator should impose penalties such as monetary fines or suspension of business licenses \u201cto communicate seriousness in enforcement.\u201d\nMichael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the Philippines needs to lift the Bank Secrecy Law to make banking regulations at par with those of its Southeast Asian neighbors.\n\u201cIt will also help in facilitating the integration of the country\u2019s capital markets into the region,\u201d he said via Messenger chat.\nShould the Philippines be blacklisted by FATF,\u00a0 Mr. Ricafort said investments and other fund flows into the Philippines would be affected.\nLeonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, called on the government to reverse its policy on offshore gambling.\n\u201cA first order of business should be the elimination of offshore gambling which is susceptible to money laundering schemes,\u201d he said. \u201cBut of course, this should involve a whole-of-government approach which apparently this government has not done.\u201d\nIn March 2020, then-senator Franklin M. Drilon flagged that millions of dollars brought into the Philippines between December 2019 and February 2020 might have been laundered through Philippine Offshore Gaming Operators (POGOs), which refer to Chinese gambling companies that offer online gambling services to markets outside the Philippines.\nThe Marcos administration began a crackdown on many POGOs after a spate of kidnappings that targeted their Chinese workers.\n\u201cThe President has reiterated the government\u2019s high-level political commitment and directed all government agencies concerned to swiftly address the remaining deficiencies in relation to the gray-listing of the Philippines,\u201d Mr. David said at the Tuesday briefing.\nHe said investor confidence and even the country\u2019s credit rating may be affected if the Philippines remains on the gray list.\n\u201cIt may also affect foreign direct investments in the Philippines because if you don\u2019t exit the gray list, they may think that our anti-money laundering, combating terrorism financing system is not adequate enough, or sufficient enough or strong enough,\u201d he added.\nRommel C. Banlaoi, chairman of the Philippine Institute for Peace, Violence, and Terrorism Research, recognized the passage of The Terrorism Financing Prevention and Suppression Act of 2012, which was complemented by a 2020 law that amended the country\u2019s Anti-Terrorism Act of 2001.\nThe two laws as well as the decline of terrorist threats would be enough for the Philippines to exit from the FATF\u2019s gray list.\nThe country\u2019s anti-terrorism financing measures should consider the emerging global financial landscape, Chester B. Cabalza, founder of Manila-based International Development and Security Cooperation, said via Messenger chat.\nMr. Cabalza cited the introduction of bitcoins, online transactions, and virtual wallets.\nMr. Villanueva said the action plan items needed to get out of the gray list may be challenging but not impossible.\n\u201cThey just require bureaucratic or political will. For societies or governments that tolerate wrongdoings, political will may be wanting,\u201d he said. \u2014 Kyle Aristophere T. Atienza", "date_published": "2024-01-03T00:31:47+08:00", "date_modified": "2024-01-02T20:39:45+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/PBBM-sectoral-meeting-FATF.jpg", "tags": [ "Kyle Aristophere T. Atienza", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566351", "url": "https://www.bworldonline.com/top-stories/2024/01/02/566351/philippines-hopeful-of-exiting-global-money-laundering-grey-list/", "title": "Philippines hopeful of exiting global money laundering \u2018grey list\u2019", "content_html": "MANILA – The Philippines is hopeful of being taken off the money laundering ‘grey list’ of the Financial Action Task Force (FATF) of this year, the country’s Anti-Money Laundering Council said on Tuesday.
\nThe FATF, an intergovernmental organization combating money laundering and terrorism financing, added the Philippines to the list in June 2021 for several reasons, including risk of money laundering from casino junkets and lack of prosecution for terrorism funding cases.
\nThe Philippines has yet to address several issues flagged by the FATF, Executive Director of the Anti-Money Laundering Council, Matthew David, told a presidential palace press conference.
\n“The most challenging action item is terrorism financing prosecution. We need to file more terrorism financing cases,” he said.
\nThe longer the Philippines is on the grey list, the higher chance it has of being downgraded to the black list, David said.
\nBeing blacklisted by the FATF could result in more stringent requirements and higher transaction costs for millions of Filipinos living and working abroad who send billions of dollars to the Philippines in remittances. — Reuters
\n", "content_text": "MANILA – The Philippines is hopeful of being taken off the money laundering ‘grey list’ of the Financial Action Task Force (FATF) of this year, the country’s Anti-Money Laundering Council said on Tuesday.\nThe FATF, an intergovernmental organization combating money laundering and terrorism financing, added the Philippines to the list in June 2021 for several reasons, including risk of money laundering from casino junkets and lack of prosecution for terrorism funding cases.\nThe Philippines has yet to address several issues flagged by the FATF, Executive Director of the Anti-Money Laundering Council, Matthew David, told a presidential palace press conference.\n“The most challenging action item is terrorism financing prosecution. We need to file more terrorism financing cases,” he said.\nThe longer the Philippines is on the grey list, the higher chance it has of being downgraded to the black list, David said.\nBeing blacklisted by the FATF could result in more stringent requirements and higher transaction costs for millions of Filipinos living and working abroad who send billions of dollars to the Philippines in remittances. — Reuters", "date_published": "2024-01-02T12:17:54+08:00", "date_modified": "2024-01-02T12:17:54+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2021/06/Pesobill_RTRMADP_3_BUSINESS-CURRENCY-scaled.jpg", "tags": [ "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566225", "url": "https://www.bworldonline.com/top-stories/2024/01/02/566225/inflation-likely-cooled-to-4-in-dec/", "title": "Inflation likely cooled to 4% in Dec.", "content_html": "By Keisha B. Ta-asan, Reporter
\nHEADLINE INFLATION may have further eased in December and settled to within the 2-4% target for the first time in almost two years amid lower prices of fruits and vegetables, electricity and fuel, analysts said.
\nInflation likely eased to 4% last month, according to a median estimate of a BusinessWorld poll last week. This is within the 3.6% to 4.4% forecast given by the Bangko Sentral ng Pilipinas (BSP) last week.
\nDecember could mark the first time inflation returned to the BSP\u2019s 2-4% target after 20 straight months of going above target. It would also be the slowest since 3% in February 2022.
\n![\"Analysts'](\"https://live.staticflickr.com/65535/53435378404_bd6c321ef7_o.jpg\")
At 4%, the December inflation would be a tad slower than 4.1% in November and significantly lower than 8.1% in December 2022.\u00a0
\nThis would also bring the full-year inflation to 6%, matching the BSP\u2019s average baseline forecast for 2023.
\nThe Philippine Statistics Authority is scheduled to release consumer price index data for December on Jan. 5.\u00a0
\nIn a statement on Friday, the BSP said lower prices of vegetables, fruits, fish, electricity and fuel might have contributed to the downward price pressure.\u00a0
\nOn the other hand, higher prices of rice and meat would likely be the primary sources of upward pressures, the central bank said.\u00a0
\n\u201cGoing forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision making,\u201d it added.\u00a0
\nPhilippine National Bank economist Alvin Joseph A. Arogo said in an e-mail that inflation might have slowed to 4% in December due to base effects and lower electricity rates.\u00a0 \u00a0
\nManila Electric Co. cut the rate for a typical household by P0.6606 to P6.5332 per kilowatt-hour last month.
\nChina Banking Corp. Chief Economist Domini S. Velasquez noted that most of the upward price pressures last month came from food items.\u00a0
\n\u201cHowever, their impact was partially offset by declines in the prices of vegetables, eggs, sugar and electricity. Additionally, despite recent oil price hikes, domestic pump prices, on average, were lower month on month,\u201d she said in an e-mail.\u00a0
\nIn December alone, pump price adjustments stood at a net increase of P0.3 a liter for gasoline. Diesel and kerosene prices had a net decrease of P0.35 and P0.51 respectively.
\n\u201cWaning pent-up demand will see prices of basic consumer products cool compared with a year ago. Further, with global oil prices moderating, that should help lower average gasoline prices on a year-earlier basis,\u201d Sarah Tan, an economist from Moody\u2019s Analytics, said in an e-mail.\u00a0
\nHSBC economist for ASEAN (Association of Southeast Asian Nations) Aris Dacanay said inflation is still \u201cmore-or-less sticky.\u201d\u00a0 \u00a0
\n\u201cThis is because the drop in fuel prices was likely offset by the rise in global rice prices as these re-spiked due to El Ni\u00f1o risks. Moving forward, elevated rice prices will likely put a floor under how much inflation can ease in the Philippines throughout 2024,\u201d he said.
\nData from the Agriculture department showed that regular-milled rice prices stood at P52 a kilo as of Dec. 29, at the high end of the P33-P52 band on Nov. 30. Retail prices of well-milled rice also went up to as much as P56 a kilo.
\nThe typical surge in domestic demand due to holiday spending might have also kept inflation high, Mr. Dacanay said.\u00a0 \u00a0
\n\u201cWith inflation sticky, the December print will likely reinforce the BSP\u2019s hawkish view that high interest rates will likely persist throughout (2024),\u201d he said.
\nAt its December meeting, the Monetary Board left its target reverse repurchase (RRP) rate unchanged at a 16-year high of 6.5%. This was the second straight meeting that the BSP stood pat since its 25-basis-point (bp) off-cycle hike on Oct. 26. \u00a0 \u00a0
\nThe central bank raised borrowing costs by a total of 450 bps from May 2022 to October 2023.
\nBSP Governor Eli M. Remolona, Jr. earlier said inflation was not yet out of the woods, and borrowing costs may need to stay higher for longer in 2024. \u00a0 \u00a0
\nThe central bank expects full-year inflation to have hit 6% in 2023, before easing to 3.7% in 2024 and 3.2% for next year.\u00a0 \u00a0
\nRISKS TO OUTLOOK
\n\u201cLooking ahead to 2024, there is a good chance that full-year inflation will already settle within target, barring any new supply shocks,\u201d Ms. Velasquez said.\u00a0
However, the key risks to the inflation outlook this year include the impact of El Ni\u00f1o on food and utilities, higher global oil prices, potential increases in transport fares, and minimum wage adjustments in some regions, she said.\u00a0
\n\u201cShould the easing inflation trend continue in December, this will support the case for BSP\u2019s tightening cycle to end. We see inflation likely bumping around the 4% mark in early 2024 before returning firmly to BSP\u2019s target range by mid-2024,\u201d Ms. Tan said.\u00a0
\nMr. Dacanay said the extension of lower tariffs on key commodities would help keep inflation expectations at bay, which will give the BSP room to begin its easing cycle by the middle of 2024.\u00a0
\nPresident Ferdinand R. Marcos, Jr. last month signed Executive Order No. 50, which extends the reduced Most Favored Nation (MFN) tariff rates on rice, corn and pork until Dec. 31.
\nThe rates for rice imports will be kept at 35% for shipments both within or over the minimum access volume quota. Tariff rates for swine, fresh, chilled or frozen meat are retained at 15% for in-quota and 25% for out-quota imports. Imports for corn maintained the MFN duty at 5% and 15% for in-quota and out-quota shipments, respectively.
\nMr. Arogo said inflation would only settle \u201csustainably\u201d within the BSP\u2019s 2-4% target by the fourth quarter of 2024.\u00a0
\n\u201cAs such, the BSP should only cut rates in the fourth quarter and we believe that a total of 50 bps would be appropriate,\u201d he said.
\nA 50-bp worth of cuts this year would bring the key rate down to 6%.
\n\u201cOur baseline inflation forecasts assume some rebound in oil prices and agricultural disruptions due to El Ni\u00f1o. If supply-demand conditions continue to improve, however, price growth may enter the target range continually at an earlier date,\u201d Mr. Arogo said.\u00a0
\nHowever, investors are pricing in a total of 75-bp cuts from the US Federal Reserve in 2024, he said.\u00a0
\n\u201cTherefore, the risk to our estimates worth noting is the possibility that the reduction in the target RRP rate could happen earlier than the fourth quarter and the magnitude might be more than 50 bps,\u201d he added.\u00a0
\nThe US central bank kept borrowing costs unchanged at 5.25-5.5% in December. This was after it hiked policy rates by 525 bps from March 2022 to July 2023.
\n\u201cWe expect a pretty good outlook until early this year including a strong peso vis-\u00e0-vis the US dollar,\u201d Colegio de San Juan de Letran Graduate School Associate Professor Emmanuel J. Lopez said.\u00a0
\nThe peso closed at P55.37 versus the dollar on Friday, up by 11 centavos from Thursday\u2019s P55.48 finish. Year to date, the peso appreciated by 38.5 centavos or 0.69% from its P55.755 a dollar close on Dec. 29, 2022.
\nThe Monetary Board will hold its first policy review this year on Feb. 15.
\n", "content_text": "By Keisha B. Ta-asan, Reporter \nHEADLINE INFLATION may have further eased in December and settled to within the 2-4% target for the first time in almost two years amid lower prices of fruits and vegetables, electricity and fuel, analysts said.\nInflation likely eased to 4% last month, according to a median estimate of a BusinessWorld poll last week. This is within the 3.6% to 4.4% forecast given by the Bangko Sentral ng Pilipinas (BSP) last week.\nDecember could mark the first time inflation returned to the BSP\u2019s 2-4% target after 20 straight months of going above target. It would also be the slowest since 3% in February 2022.\n\nAt 4%, the December inflation would be a tad slower than 4.1% in November and significantly lower than 8.1% in December 2022.\u00a0\nThis would also bring the full-year inflation to 6%, matching the BSP\u2019s average baseline forecast for 2023.\nThe Philippine Statistics Authority is scheduled to release consumer price index data for December on Jan. 5.\u00a0\nIn a statement on Friday, the BSP said lower prices of vegetables, fruits, fish, electricity and fuel might have contributed to the downward price pressure.\u00a0\nOn the other hand, higher prices of rice and meat would likely be the primary sources of upward pressures, the central bank said.\u00a0\n\u201cGoing forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision making,\u201d it added.\u00a0\nPhilippine National Bank economist Alvin Joseph A. Arogo said in an e-mail that inflation might have slowed to 4% in December due to base effects and lower electricity rates.\u00a0 \u00a0\nManila Electric Co. cut the rate for a typical household by P0.6606 to P6.5332 per kilowatt-hour last month. \nChina Banking Corp. Chief Economist Domini S. Velasquez noted that most of the upward price pressures last month came from food items.\u00a0\n\u201cHowever, their impact was partially offset by declines in the prices of vegetables, eggs, sugar and electricity. Additionally, despite recent oil price hikes, domestic pump prices, on average, were lower month on month,\u201d she said in an e-mail.\u00a0\nIn December alone, pump price adjustments stood at a net increase of P0.3 a liter for gasoline. Diesel and kerosene prices had a net decrease of P0.35 and P0.51 respectively.\n\u201cWaning pent-up demand will see prices of basic consumer products cool compared with a year ago. Further, with global oil prices moderating, that should help lower average gasoline prices on a year-earlier basis,\u201d Sarah Tan, an economist from Moody\u2019s Analytics, said in an e-mail.\u00a0\nHSBC economist for ASEAN (Association of Southeast Asian Nations) Aris Dacanay said inflation is still \u201cmore-or-less sticky.\u201d\u00a0 \u00a0\n\u201cThis is because the drop in fuel prices was likely offset by the rise in global rice prices as these re-spiked due to El Ni\u00f1o risks. Moving forward, elevated rice prices will likely put a floor under how much inflation can ease in the Philippines throughout 2024,\u201d he said.\nData from the Agriculture department showed that regular-milled rice prices stood at P52 a kilo as of Dec. 29, at the high end of the P33-P52 band on Nov. 30. Retail prices of well-milled rice also went up to as much as P56 a kilo.\nThe typical surge in domestic demand due to holiday spending might have also kept inflation high, Mr. Dacanay said.\u00a0 \u00a0\n\u201cWith inflation sticky, the December print will likely reinforce the BSP\u2019s hawkish view that high interest rates will likely persist throughout (2024),\u201d he said.\nAt its December meeting, the Monetary Board left its target reverse repurchase (RRP) rate unchanged at a 16-year high of 6.5%. This was the second straight meeting that the BSP stood pat since its 25-basis-point (bp) off-cycle hike on Oct. 26. \u00a0 \u00a0\nThe central bank raised borrowing costs by a total of 450 bps from May 2022 to October 2023. \nBSP Governor Eli M. Remolona, Jr. earlier said inflation was not yet out of the woods, and borrowing costs may need to stay higher for longer in 2024. \u00a0 \u00a0\nThe central bank expects full-year inflation to have hit 6% in 2023, before easing to 3.7% in 2024 and 3.2% for next year.\u00a0 \u00a0\nRISKS TO OUTLOOK\n\u201cLooking ahead to 2024, there is a good chance that full-year inflation will already settle within target, barring any new supply shocks,\u201d Ms. Velasquez said.\u00a0\nHowever, the key risks to the inflation outlook this year include the impact of El Ni\u00f1o on food and utilities, higher global oil prices, potential increases in transport fares, and minimum wage adjustments in some regions, she said.\u00a0\n\u201cShould the easing inflation trend continue in December, this will support the case for BSP\u2019s tightening cycle to end. We see inflation likely bumping around the 4% mark in early 2024 before returning firmly to BSP\u2019s target range by mid-2024,\u201d Ms. Tan said.\u00a0\nMr. Dacanay said the extension of lower tariffs on key commodities would help keep inflation expectations at bay, which will give the BSP room to begin its easing cycle by the middle of 2024.\u00a0\nPresident Ferdinand R. Marcos, Jr. last month signed Executive Order No. 50, which extends the reduced Most Favored Nation (MFN) tariff rates on rice, corn and pork until Dec. 31. \nThe rates for rice imports will be kept at 35% for shipments both within or over the minimum access volume quota. Tariff rates for swine, fresh, chilled or frozen meat are retained at 15% for in-quota and 25% for out-quota imports. Imports for corn maintained the MFN duty at 5% and 15% for in-quota and out-quota shipments, respectively. \nMr. Arogo said inflation would only settle \u201csustainably\u201d within the BSP\u2019s 2-4% target by the fourth quarter of 2024.\u00a0\n\u201cAs such, the BSP should only cut rates in the fourth quarter and we believe that a total of 50 bps would be appropriate,\u201d he said. \nA 50-bp worth of cuts this year would bring the key rate down to 6%. \n\u201cOur baseline inflation forecasts assume some rebound in oil prices and agricultural disruptions due to El Ni\u00f1o. If supply-demand conditions continue to improve, however, price growth may enter the target range continually at an earlier date,\u201d Mr. Arogo said.\u00a0\nHowever, investors are pricing in a total of 75-bp cuts from the US Federal Reserve in 2024, he said.\u00a0\n\u201cTherefore, the risk to our estimates worth noting is the possibility that the reduction in the target RRP rate could happen earlier than the fourth quarter and the magnitude might be more than 50 bps,\u201d he added.\u00a0\nThe US central bank kept borrowing costs unchanged at 5.25-5.5% in December. This was after it hiked policy rates by 525 bps from March 2022 to July 2023. \n\u201cWe expect a pretty good outlook until early this year including a strong peso vis-\u00e0-vis the US dollar,\u201d Colegio de San Juan de Letran Graduate School Associate Professor Emmanuel J. Lopez said.\u00a0\nThe peso closed at P55.37 versus the dollar on Friday, up by 11 centavos from Thursday\u2019s P55.48 finish. Year to date, the peso appreciated by 38.5 centavos or 0.69% from its P55.755 a dollar close on Dec. 29, 2022. \nThe Monetary Board will hold its first policy review this year on Feb. 15.", "date_published": "2024-01-02T00:33:21+08:00", "date_modified": "2024-01-01T20:05:44+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/Buildings-fireworks.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ], "summary": "HEADLINE INFLATION may have further eased in December and settled to within the 2-4% target for the first time in almost two years amid lower prices of fruits and vegetables, electricity and fuel, analysts said." }, { "id": "https://www.bworldonline.com/?p=566224", "url": "https://www.bworldonline.com/top-stories/2024/01/02/566224/november-debt-service-bill-slips/", "title": "November debt service bill slips", "content_html": "\n
THE NATIONAL Government\u2019s (NG) debt service bill slipped by 7.7% in November due to a drop in amortization payments, according to the Bureau of the Treasury (BTr).
\nData from the BTr showed debt payments fell to P56.674 billion from P61.393 billion a year earlier.
\nMonth on month, debt payments declined by 27% from P77.76 billion in October.
\nInterest payments rose by 86% year on year to P48.55 billion in November, accounting for 86% of the total debt service bill.
\nInterest paid on domestic debt jumped by 89.72% to P35.257 billion. This consisted of P26.026 billion in fixed-rate Treasury bonds, P7.734 billion in retail Treasury bonds and P1.478 billion in Treasury bills.
\nInterest paid to foreign creditors also increased by 77% to P13.291 billion.
\nMeanwhile, principal payments slid by 77% to P8.126 billion in November from P35.301 billion a year earlier.
\nPrincipal payments on foreign debt slid by 77% year on year to P8.03 billion, while amortization on domestic debt slumped by 54% to P96 million.
\n\u201cDebt service payments eased in November 2023 as government debt maturities are relatively lower towards the holiday season,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
\nIn the first eleven months of 2023, debt payments rose by 55% to P1.535 trillion from P991.056 billion a year ago.
\nThe bulk of the debt service bill in January to November consisted of principal payments, which jumped by 81.85% to P967.09 billion as of end-November from P531.803 billion a year ago.
\nPrincipal payments for domestic debt jumped by 109% to P854.039 billion, while amortization on foreign obligations dropped 7.91% to P113.051 billion.
\nOn the other hand, interest payments went up by 24% to P567.65 billion in the 11-month period from a year earlier.
\nInterest paid to domestic creditors rose by 12.96% to P392.190 billion. This consisted of P248.69 billion in fixed-rate Treasury bonds, P124.118 billion in retail Treasury bonds and P15.275 billion in Treasury bills.
\nInterest payments on foreign debt increased by 36.14% to P175.465 billion.
\nMr. Ricafort said the debt service bill could be reduced further once the US Federal Reserve and Bangko Sentral ng Pilipinas (BSP) begin their easing cycles.
\nThe BSP has raised its policy rate by 450 basis points (bps) to a 16-year high of 6.5% since it began its tightening cycle in May 2022 to tame inflation.
\nThe government\u2019s debt service budget this year is set at P1.552 trillion \u2014 P914.353 billion in amortization payments and P610.665 billion in interest. \u2014 A.M.C. Sy
\n", "content_text": "THE NATIONAL Government\u2019s (NG) debt service bill slipped by 7.7% in November due to a drop in amortization payments, according to the Bureau of the Treasury (BTr).\nData from the BTr showed debt payments fell to P56.674 billion from P61.393 billion a year earlier.\nMonth on month, debt payments declined by 27% from P77.76 billion in October. \nInterest payments rose by 86% year on year to P48.55 billion in November, accounting for 86% of the total debt service bill. \nInterest paid on domestic debt jumped by 89.72% to P35.257 billion. This consisted of P26.026 billion in fixed-rate Treasury bonds, P7.734 billion in retail Treasury bonds and P1.478 billion in Treasury bills.\nInterest paid to foreign creditors also increased by 77% to P13.291 billion. \nMeanwhile, principal payments slid by 77% to P8.126 billion in November from P35.301 billion a year earlier. \nPrincipal payments on foreign debt slid by 77% year on year to P8.03 billion, while amortization on domestic debt slumped by 54% to P96 million. \n\u201cDebt service payments eased in November 2023 as government debt maturities are relatively lower towards the holiday season,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.\nIn the first eleven months of 2023, debt payments rose by 55% to P1.535 trillion from P991.056 billion a year ago. \nThe bulk of the debt service bill in January to November consisted of principal payments, which jumped by 81.85% to P967.09 billion as of end-November from P531.803 billion a year ago.\nPrincipal payments for domestic debt jumped by 109% to P854.039 billion, while amortization on foreign obligations dropped 7.91% to P113.051 billion.\nOn the other hand, interest payments went up by 24% to P567.65 billion in the 11-month period from a year earlier.\nInterest paid to domestic creditors rose by 12.96% to P392.190 billion. This consisted of P248.69 billion in fixed-rate Treasury bonds, P124.118 billion in retail Treasury bonds and P15.275 billion in Treasury bills.\nInterest payments on foreign debt increased by 36.14% to P175.465 billion.\nMr. Ricafort said the debt service bill could be reduced further once the US Federal Reserve and Bangko Sentral ng Pilipinas (BSP) begin their easing cycles.\nThe BSP has raised its policy rate by 450 basis points (bps) to a 16-year high of 6.5% since it began its tightening cycle in May 2022 to tame inflation.\nThe government\u2019s debt service budget this year is set at P1.552 trillion \u2014 P914.353 billion in amortization payments and P610.665 billion in interest. \u2014 A.M.C. Sy", "date_published": "2024-01-02T00:32:21+08:00", "date_modified": "2024-01-01T20:05:06+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/dollar-currency.jpg", "tags": [ "Aaron Michael C. Sy", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=566223", "url": "https://www.bworldonline.com/top-stories/2024/01/02/566223/doe-eyes-implementation-of-higher-biodiesel-blend-in-july/", "title": "DoE eyes implementation of higher biodiesel blend in July", "content_html": "By Sheldeen Joy Talavera, Reporter
\nTHE DEPARTMENT of Energy (DoE) is proposing to implement the long-delayed increase in the coco biodiesel blend to 3% starting July 1.
\nIn a draft department circular, the DoE proposed that all diesel fuel sold in the country contain a biodiesel blend at 3% effective\u00a0 July 1, from 2%.
\nIt also proposed to hike the biodiesel blend to 4%, effective July 1, 2025, and to 5% on July 1, 2026.
\nThe Biofuels Act of 2006 mandates that all liquid fuels for motors and engines contain locally sourced biofuel components.
\nOil companies must use a 2% biodiesel blend by volume in all diesel fuel sold and distributed in the country since February 2009.\u00a0
\n\u201cThe downstream oil sector may offer consumers a gasoline fuel containing 20% bioethanol blend on a voluntary basis,\u201d the DoE said in the circular.
\nSince February 2012, oil retailers have been required to implement a 10% bioethanol blend in gasoline fuel sold locally.
\nIn November, the Cabinet-level National Biofuels Board recommended the higher biodiesel blend starting this year, as well as the voluntary implementation of the higher bioethanol blend.
\nOnce approved, the DoE said the circular would be applied to all participants in the downstream oil and the local biofuel producer industries.
\nWith the proposed policy, the DoE said the downstream oil industry should prepare \u201cto ensure the managerial and operational requirements for the transition to the higher biofuel blend.\u201d
\nCompanies should ensure enough storage capacity for increased biofuel supply, as well as sufficient blending facilities and a compatible transport system.
\nFuel retailers that will implement the 20% bioethanol blend are expected to have a dedicated storage tank and dispensing pump. Pump attendants should ensure that vehicles can handle the 20% bioethanol blend.
\nBiofuel producers are also encouraged to prepare for the expected increase in demand, such as ensuring access to sufficient feedstock.
\nIn October, Energy Secretary Raphael P.M. Lotilla said increasing the ethanol blend could cut gasoline prices by as much as P1 a liter.
\n\u201cThis is primarily a price mitigation measure because ethanol, especially imported ethanol, is cheaper than the price of gasoline,\u201d Mr. Lotilla said.
\nTerry L. Ridon, a public investment analyst, said raising the biodiesel blend would \u201cbroaden the utilization of coconut oil for biodiesel in the medium term.\u201d
\n\u201cHowever, both the government and the coconut industry will have to decide the best utilization of the nation\u2019s coconut oil supply, as foreign buyers, such as the international cosmetics industry, will also compete for the same supply but may offer premium pricing,\u201d he said in a Viber message.
\nBienvenido S. Oplas, Jr., president of Minimal Government Thinkers, said higher biodiesel blend could drive food prices up.
\n\u201cCorn and other crops should feed people and animals, not cars. It will have an adverse impact on food prices and could worsen instead of mitigate high food inflation,\u201d he said in a Viber message.
\nBoth analysts said the higher biodiesel blend might not necessarily lead to lower local oil prices because these still depend on the global market.
\n\u201cWorld oil prices fluctuate up and down, but biodiesel mandates are permanent, with permanent price distortions,\u201d Mr. Oplas said.
\nMr. Ridon said the government should ensure that the higher blend is supported by domestic agricultural production. \u201cIt makes no sense to the local economy to undertake a higher mandatory percentage of bioethanol if the supply will be provided by imports.\u201d
\n", "content_text": "By Sheldeen Joy Talavera, Reporter \nTHE DEPARTMENT of Energy (DoE) is proposing to implement the long-delayed increase in the coco biodiesel blend to 3% starting July 1.\nIn a draft department circular, the DoE proposed that all diesel fuel sold in the country contain a biodiesel blend at 3% effective\u00a0 July 1, from 2%.\nIt also proposed to hike the biodiesel blend to 4%, effective July 1, 2025, and to 5% on July 1, 2026.\nThe Biofuels Act of 2006 mandates that all liquid fuels for motors and engines contain locally sourced biofuel components.\nOil companies must use a 2% biodiesel blend by volume in all diesel fuel sold and distributed in the country since February 2009.\u00a0\n\u201cThe downstream oil sector may offer consumers a gasoline fuel containing 20% bioethanol blend on a voluntary basis,\u201d the DoE said in the circular. \nSince February 2012, oil retailers have been required to implement a 10% bioethanol blend in gasoline fuel sold locally. \nIn November, the Cabinet-level National Biofuels Board recommended the higher biodiesel blend starting this year, as well as the voluntary implementation of the higher bioethanol blend. \nOnce approved, the DoE said the circular would be applied to all participants in the downstream oil and the local biofuel producer industries.\nWith the proposed policy, the DoE said the downstream oil industry should prepare \u201cto ensure the managerial and operational requirements for the transition to the higher biofuel blend.\u201d\nCompanies should ensure enough storage capacity for increased biofuel supply, as well as sufficient blending facilities and a compatible transport system. \nFuel retailers that will implement the 20% bioethanol blend are expected to have a dedicated storage tank and dispensing pump. Pump attendants should ensure that vehicles can handle the 20% bioethanol blend.\nBiofuel producers are also encouraged to prepare for the expected increase in demand, such as ensuring access to sufficient feedstock. \nIn October, Energy Secretary Raphael P.M. Lotilla said increasing the ethanol blend could cut gasoline prices by as much as P1 a liter.\n\u201cThis is primarily a price mitigation measure because ethanol, especially imported ethanol, is cheaper than the price of gasoline,\u201d Mr. Lotilla said.\nTerry L. Ridon, a public investment analyst, said raising the biodiesel blend would \u201cbroaden the utilization of coconut oil for biodiesel in the medium term.\u201d\n\u201cHowever, both the government and the coconut industry will have to decide the best utilization of the nation\u2019s coconut oil supply, as foreign buyers, such as the international cosmetics industry, will also compete for the same supply but may offer premium pricing,\u201d he said in a Viber message.\nBienvenido S. Oplas, Jr., president of Minimal Government Thinkers, said higher biodiesel blend could drive food prices up.\n\u201cCorn and other crops should feed people and animals, not cars. It will have an adverse impact on food prices and could worsen instead of mitigate high food inflation,\u201d he said in a Viber message.\nBoth analysts said the higher biodiesel blend might not necessarily lead to lower local oil prices because these still depend on the global market.\n\u201cWorld oil prices fluctuate up and down, but biodiesel mandates are permanent, with permanent price distortions,\u201d Mr. Oplas said.\nMr. Ridon said the government should ensure that the higher blend is supported by domestic agricultural production. \u201cIt makes no sense to the local economy to undertake a higher mandatory percentage of bioethanol if the supply will be provided by imports.\u201d", "date_published": "2024-01-02T00:31:20+08:00", "date_modified": "2024-01-01T20:04:39+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2024/01/gas-station-worker-wc.jpg", "tags": [ "Sheldeen Joy Talavera", "Editors' Picks", "One News", "Top Stories" ], "summary": "THE DEPARTMENT of Energy (DoE) is proposing to implement the long-delayed increase in the coco biodiesel blend to 3% starting July 1.\u00a0" }, { "id": "https://www.bworldonline.com/?p=566029", "url": "https://www.bworldonline.com/top-stories/2023/12/29/566029/bsp-sees-dec-inflation-at-3-6-4-4/", "title": "BSP sees Dec inflation at 3.6%-4.4%", "content_html": "MANILA – Philippine inflation likely settled within the range of 3.6%-4.4% range in December, the central bank said on Friday.
\nHigher prices of rice and meat were the main factors pushing prices upward this month, the Bangko Sentral ng Pilipinas (BSP) said in a statement.
\n“Meanwhile, lower prices for agricultural items such as vegetables, fruits, and fish along with lower electricity rates and petroleum prices are expected to contribute to downward price pressures,” the BSP said.
\nInflation was at 4.1% in November.
\n“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” it said. — Reuters
\n", "content_text": "MANILA – Philippine inflation likely settled within the range of 3.6%-4.4% range in December, the central bank said on Friday.\nHigher prices of rice and meat were the main factors pushing prices upward this month, the Bangko Sentral ng Pilipinas (BSP) said in a statement.\n“Meanwhile, lower prices for agricultural items such as vegetables, fruits, and fish along with lower electricity rates and petroleum prices are expected to contribute to downward price pressures,” the BSP said.\nInflation was at 4.1% in November.\n“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” it said. — Reuters", "date_published": "2023-12-29T10:35:54+08:00", "date_modified": "2023-12-29T10:35:54+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/271223_fruits01_kjrosales.jpg", "tags": [ "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565939", "url": "https://www.bworldonline.com/top-stories/2023/12/29/565939/budget-gap-narrows-in-november/", "title": "Budget gap narrows in November", "content_html": "THE National Government\u2019s (NG) budget deficit narrowed to P93.3 billion in November from a year ago, amid tepid revenue growth and a decline in spending.
\nData from the Bureau of the Treasury (BTr) released on Thursday showed the fiscal gap shrank by 24.8% from the P123.9-billion deficit in November 2022.
\nMonth on month, the November deficit widened from the P34.4 billion in October.
\n\u201cThe National Government ran a P93.3-billion budget deficit in November 2023, declining by 24.75% (P30.7 billion) from a year ago due to the 2.82% growth in revenue collection alongside a 4.69% contraction in public spending,\u201d the BTr said in a statement.
\nIn November, revenue collections rose by 2.8% to P340.4 billion, from P331.1 billion in the same month in 2022.
\nTax revenues declined by 8.9% year on year to P286 billion in November, amid a drop in collections by the Bureau of Internal Revenue (BIR) and Bureau of Customs.
\nBIR revenues decreased by 11% year on year to P210.2 billion last month, while Customs collections slipped by 2.7% to P73.7 billion. Other tax offices collected P2.1 billion, up 90.9% a year prior.
\nOn the other hand, nontax revenues more than tripled to P54.4 billion in November, as the Treasury posted a 686% jump in revenues to P41.5 billion from just P5.3 billion last year. Other offices saw an 8.8% increase in revenues to P12.9 billion.
\nIncome from the Treasury department was \u201cprimarily driven by higher dividend remittances and NG share from PAGCOR (Philippine Amusement and Gaming Corp.) income,\u201d the BTr said.\u00a0
\nHowever, state spending slumped by 4.7% to P433.6 billion in November, from P455 billion a year ago.
\nThe BTr attributed the decline to a drop in tax allotment shares of local government units, lower direct payments from development partners for foreign-assisted rail transport projects, as well as the different schedules of big-ticket disbursements for infrastructure and social welfare projects.
\nPrimary spending \u2014 which refers to total expenditures minus interest payments \u2014 fell by 10.2% to P385.1 billion year on year from P428.9 billion. Meanwhile, interest payments rose 86% to P48.5 billion in November.
\n11-MONTH GAP
\nFor the January-to-November period, the budget gap narrowed by 10.1% to P1.11 trillion from a year earlier. This represents 74.1% of the programmed P1.499-trillion deficit for the full year.
Revenue collection rose by an annual 8.8% to P3.6 trillion as of end-November, representing 95.58% of the P3.729-trillion target for 2023.
\nTax revenues rose by 7.3% to P3.18 trillion, while nontax revenues climbed by 22.9% to P381.9 billion.
\nThe BIR collections jumped by 8.6% to P2.34 trillion in the 11-month period, already accounting for 88.77% of the P2.64-trillion target.
\nCustoms collections went up by 2.9% to P812 billion, which made up 93% of the full-year target of P874.2 billion.
\nBTr revenues increased by 46% to P216.3 billion as of end-November. This is more than triple the P58.3-billion program for the year, thanks to \u201chigher dividend remittances, interest income from BTr\u2019s managed funds and NG deposits, NG share from PAGCOR and MIAA (Manila International Airport Authority) profit, and government service income.\u201d
\nMeanwhile, government spending went up by 3.6% to P4.68 trillion as of end-November, accounting for 89.42% of the full-year expenditure program.
\nFor the 11-month period, primary spending increased by 1.32% to P4.1 trillion, while interest payments jumped by 23.6% to P567.7 billion.
\n\u201cOur 2023 budget deficit estimate could reach P1.38 trillion that would fall short of the government\u2019s program deficit target of P1.499 trillion,\u201d Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
\n\u201cKey assumption behind this sanguine fiscal deficit outlook is a government prioritizing deficit and debt management as we close the year amid higher interest rate pressures on cash disbursements,\u201d he added.
\nMeanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a note said continued tax reform measures and intensified tax collections may lead to a narrower budget deficit, reduced borrowings, and slower increment in the outstanding National Government debt.
\nThese new tax reforms would be complemented by easing inflation, especially if prices continued to stabilize towards the central bank\u2019s 2-4% target in the coming months, he said. \u2014 Keisha B. Ta-asan
\n", "content_text": "THE National Government\u2019s (NG) budget deficit narrowed to P93.3 billion in November from a year ago, amid tepid revenue growth and a decline in spending.\nData from the Bureau of the Treasury (BTr) released on Thursday showed the fiscal gap shrank by 24.8% from the P123.9-billion deficit in November 2022. \nMonth on month, the November deficit widened from the P34.4 billion in October.\n\u201cThe National Government ran a P93.3-billion budget deficit in November 2023, declining by 24.75% (P30.7 billion) from a year ago due to the 2.82% growth in revenue collection alongside a 4.69% contraction in public spending,\u201d the BTr said in a statement. \nIn November, revenue collections rose by 2.8% to P340.4 billion, from P331.1 billion in the same month in 2022.\nTax revenues declined by 8.9% year on year to P286 billion in November, amid a drop in collections by the Bureau of Internal Revenue (BIR) and Bureau of Customs.\nBIR revenues decreased by 11% year on year to P210.2 billion last month, while Customs collections slipped by 2.7% to P73.7 billion. Other tax offices collected P2.1 billion, up 90.9% a year prior.\nOn the other hand, nontax revenues more than tripled to P54.4 billion in November, as the Treasury posted a 686% jump in revenues to P41.5 billion from just P5.3 billion last year. Other offices saw an 8.8% increase in revenues to P12.9 billion.\nIncome from the Treasury department was \u201cprimarily driven by higher dividend remittances and NG share from PAGCOR (Philippine Amusement and Gaming Corp.) income,\u201d the BTr said.\u00a0\nHowever, state spending slumped by 4.7% to P433.6 billion in November, from P455 billion a year ago. \nThe BTr attributed the decline to a drop in tax allotment shares of local government units, lower direct payments from development partners for foreign-assisted rail transport projects, as well as the different schedules of big-ticket disbursements for infrastructure and social welfare projects.\nPrimary spending \u2014 which refers to total expenditures minus interest payments \u2014 fell by 10.2% to P385.1 billion year on year from P428.9 billion. Meanwhile, interest payments rose 86% to P48.5 billion in November. \n11-MONTH GAP\nFor the January-to-November period, the budget gap narrowed by 10.1% to P1.11 trillion from a year earlier. This represents 74.1% of the programmed P1.499-trillion deficit for the full year.\nRevenue collection rose by an annual 8.8% to P3.6 trillion as of end-November, representing 95.58% of the P3.729-trillion target for 2023.\nTax revenues rose by 7.3% to P3.18 trillion, while nontax revenues climbed by 22.9% to P381.9 billion.\nThe BIR collections jumped by 8.6% to P2.34 trillion in the 11-month period, already accounting for 88.77% of the P2.64-trillion target. \nCustoms collections went up by 2.9% to P812 billion, which made up 93% of the full-year target of P874.2 billion. \nBTr revenues increased by 46% to P216.3 billion as of end-November. This is more than triple the P58.3-billion program for the year, thanks to \u201chigher dividend remittances, interest income from BTr\u2019s managed funds and NG deposits, NG share from PAGCOR and MIAA (Manila International Airport Authority) profit, and government service income.\u201d\nMeanwhile, government spending went up by 3.6% to P4.68 trillion as of end-November, accounting for 89.42% of the full-year expenditure program. \nFor the 11-month period, primary spending increased by 1.32% to P4.1 trillion, while interest payments jumped by 23.6% to P567.7 billion. \n\u201cOur 2023 budget deficit estimate could reach P1.38 trillion that would fall short of the government\u2019s program deficit target of P1.499 trillion,\u201d Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.\n\u201cKey assumption behind this sanguine fiscal deficit outlook is a government prioritizing deficit and debt management as we close the year amid higher interest rate pressures on cash disbursements,\u201d he added.\nMeanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a note said continued tax reform measures and intensified tax collections may lead to a narrower budget deficit, reduced borrowings, and slower increment in the outstanding National Government debt.\nThese new tax reforms would be complemented by easing inflation, especially if prices continued to stabilize towards the central bank\u2019s 2-4% target in the coming months, he said. \u2014 Keisha B. Ta-asan", "date_published": "2023-12-29T00:34:39+08:00", "date_modified": "2023-12-28T20:36:00+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/government-tax-office-post.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565938", "url": "https://www.bworldonline.com/top-stories/2023/12/29/565938/hot-money-swings-to-net-inflows-in-nov/", "title": "Hot money swings to net inflows in Nov.", "content_html": "By Keisha B. Ta-asan, Reporter
\nFOREIGN portfolio investments reverted to a net inflow in November, ending two straight months of outflows, as global financial market conditions improved, the Bangko Sentral ng Pilipinas (BSP) said.
\nForeign portfolio investments registered with the BSP through authorized agent banks posted a net inflow of $672.86 million last month, 37.7% higher than the $488.75 million net inflow a year earlier.
\nThe November figure was a turnaround from the $328.19 million net outflow in October.
\nForeign portfolio investments are known as \u201chot money\u201d because of the ease with which they can enter or exit a jurisdiction, as opposed to foreign direct investments.
\nIn November, gross inflows jumped by 49.5% to $1.57 billion from $1.05 billion a year prior and by 64.9% from the $954.38 million posted in October.\u00a0 \u00a0
\nThe BSP said investments came from the United Kingdom, Singapore, United States, Luxembourg, and Hong Kong, which together accounted for 91.9% of the monthly total.
\nThe funds mainly went to peso government securities (71.4%), while the remaining 28.6% went to Philippine Stock Exchange-listed securities of banks, holding firms, property, transportation services, and food, beverage and tobacco.\u00a0 \u00a0
\nMeanwhile, gross outflows in November increased by 59.5% to $902.01 million from $565.71 million in November 2022.
\nMonth on month, outflows fell by 29.7%.
\nThe BSP said the United States received 58.6% of the total outward remittances in November.
\nChina Banking Corp. Chief Economist Domini S. Velasquez in a Viber message said improving financial conditions globally likely drove investment inflows to emerging markets such as the Philippines.\u00a0 \u00a0
\n\u201cForward guidance from major central banks regarding reaching the peak of interest rate hikes has fueled bullish sentiment in financial markets. In the Philippines, there has been strong investor appetite for bonds and stocks, driving portfolio inflows,\u201d she said.\u00a0 \u00a0
\nThe US Federal Reserve has kept borrowing costs steady at 5.25-5.5% during its November meeting. Fed officials have recently signaled that policy tightening may be over amid slowing inflation.\u00a0
\nBack home, the BSP left its key interest rate unchanged at a 16-year high of 6.5% in November.
\nThe Philippine central bank hiked rates by a total of 450 basis points from May 2022 to October this year to tame inflation.
\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the sharp decline in global crude oil prices, which largely helped bring down inflation, contributed to positive investor sentiment.\u00a0 \u00a0
\n\u201cAs a result, the worst/bottom has been seen already in the US and local financial markets in October 2023 and started to post hefty gains since November 2023,\u201d he said in a note.
\nHeadline inflation slowed to 4.1% in November from 4.9% in October. Inflation averaged 6.2% in the 11-month period.
\n\u201cThus, net foreign portfolio investments data improved to net inflows amid the gains in the local fixed income/bond markets, peso exchange rate, and stock markets; bargain-hunting/bottom-fishing activities in line with the gains in the US stock and bond/Treasuries markets,\u201d Mr. Ricafort said.\u00a0 \u00a0
\nFor the January to Nov. 30 period, foreign portfolio investments yielded a net outflow of $42 million, a reversal from the $794 million net inflow a year ago.
\n\u201cWith recent guidance from the Federal Reserve suggesting more interest rate cuts in 2024, we anticipate that inflows will continue, especially by December,\u201d Ms. Velasquez said.\u00a0 \u00a0
\nMr. Ricafort noted that hot money inflows could further improve in December amid market expectations of a possible Fed rate cut as early as March 2024.\u00a0 \u00a0
\n\u201cSince Fed rate cuts would lead to further gains in the fixed income/bond markets, stock markets, and lower US dollar and stronger emerging market currencies,\u201d he said.
\nFollowing its December meeting, Federal Reserve Chair Jerome H. Powell said monetary tightening may likely be over as inflation continues to fall in the US.\u00a0 \u00a0
\nMeanwhile, BSP Governor Eli M. Remolona, Jr. said Philippine inflation is not yet out of the woods, and borrowing costs may need to stay higher for longer in 2024.\u00a0 \u00a0
\n\u201cUnless there are significant disruptions, it is likely that hot money inflows will surpass those of 2023, leading to continued positive momentum in 2024,\u201d Ms. Velasquez added.
\nEarlier this month, the BSP lowered its hot money forecast to $1 billion net inflows this year from $2 billion previously.
\n", "content_text": "By Keisha B. Ta-asan, Reporter\nFOREIGN portfolio investments reverted to a net inflow in November, ending two straight months of outflows, as global financial market conditions improved, the Bangko Sentral ng Pilipinas (BSP) said. \nForeign portfolio investments registered with the BSP through authorized agent banks posted a net inflow of $672.86 million last month, 37.7% higher than the $488.75 million net inflow a year earlier.\nThe November figure was a turnaround from the $328.19 million net outflow in October.\nForeign portfolio investments are known as \u201chot money\u201d because of the ease with which they can enter or exit a jurisdiction, as opposed to foreign direct investments.\nIn November, gross inflows jumped by 49.5% to $1.57 billion from $1.05 billion a year prior and by 64.9% from the $954.38 million posted in October.\u00a0 \u00a0\nThe BSP said investments came from the United Kingdom, Singapore, United States, Luxembourg, and Hong Kong, which together accounted for 91.9% of the monthly total.\nThe funds mainly went to peso government securities (71.4%), while the remaining 28.6% went to Philippine Stock Exchange-listed securities of banks, holding firms, property, transportation services, and food, beverage and tobacco.\u00a0 \u00a0\nMeanwhile, gross outflows in November increased by 59.5% to $902.01 million from $565.71 million in November 2022.\nMonth on month, outflows fell by 29.7%.\nThe BSP said the United States received 58.6% of the total outward remittances in November.\nChina Banking Corp. Chief Economist Domini S. Velasquez in a Viber message said improving financial conditions globally likely drove investment inflows to emerging markets such as the Philippines.\u00a0 \u00a0\n\u201cForward guidance from major central banks regarding reaching the peak of interest rate hikes has fueled bullish sentiment in financial markets. In the Philippines, there has been strong investor appetite for bonds and stocks, driving portfolio inflows,\u201d she said.\u00a0 \u00a0\nThe US Federal Reserve has kept borrowing costs steady at 5.25-5.5% during its November meeting. Fed officials have recently signaled that policy tightening may be over amid slowing inflation.\u00a0\nBack home, the BSP left its key interest rate unchanged at a 16-year high of 6.5% in November.\nThe Philippine central bank hiked rates by a total of 450 basis points from May 2022 to October this year to tame inflation.\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the sharp decline in global crude oil prices, which largely helped bring down inflation, contributed to positive investor sentiment.\u00a0 \u00a0\n\u201cAs a result, the worst/bottom has been seen already in the US and local financial markets in October 2023 and started to post hefty gains since November 2023,\u201d he said in a note.\nHeadline inflation slowed to 4.1% in November from 4.9% in October. Inflation averaged 6.2% in the 11-month period.\n\u201cThus, net foreign portfolio investments data improved to net inflows amid the gains in the local fixed income/bond markets, peso exchange rate, and stock markets; bargain-hunting/bottom-fishing activities in line with the gains in the US stock and bond/Treasuries markets,\u201d Mr. Ricafort said.\u00a0 \u00a0\nFor the January to Nov. 30 period, foreign portfolio investments yielded a net outflow of $42 million, a reversal from the $794 million net inflow a year ago.\n\u201cWith recent guidance from the Federal Reserve suggesting more interest rate cuts in 2024, we anticipate that inflows will continue, especially by December,\u201d Ms. Velasquez said.\u00a0 \u00a0\nMr. Ricafort noted that hot money inflows could further improve in December amid market expectations of a possible Fed rate cut as early as March 2024.\u00a0 \u00a0\n\u201cSince Fed rate cuts would lead to further gains in the fixed income/bond markets, stock markets, and lower US dollar and stronger emerging market currencies,\u201d he said.\nFollowing its December meeting, Federal Reserve Chair Jerome H. Powell said monetary tightening may likely be over as inflation continues to fall in the US.\u00a0 \u00a0\nMeanwhile, BSP Governor Eli M. Remolona, Jr. said Philippine inflation is not yet out of the woods, and borrowing costs may need to stay higher for longer in 2024.\u00a0 \u00a0\n\u201cUnless there are significant disruptions, it is likely that hot money inflows will surpass those of 2023, leading to continued positive momentum in 2024,\u201d Ms. Velasquez added.\nEarlier this month, the BSP lowered its hot money forecast to $1 billion net inflows this year from $2 billion previously.", "date_published": "2023-12-29T00:33:38+08:00", "date_modified": "2023-12-28T20:35:27+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/US-dollar-banknotes.jpg", "tags": [ "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ], "summary": "FOREIGN portfolio investments reverted to a net inflow in November, ending two straight months of outflows, as global financial market conditions improved, the Bangko Sentral ng Pilipinas (BSP) said." }, { "id": "https://www.bworldonline.com/?p=565937", "url": "https://www.bworldonline.com/top-stories/2023/12/29/565937/phl-likely-to-miss-2024-growth-target-analysts/", "title": "PHL likely to miss 2024 growth target \u2014 analysts", "content_html": "By Luisa Maria Jacinta C. Jocson, Reporter
\nPHILIPPINE economic growth will likely miss the government\u2019s target next year amid external headwinds and risks that could derail the country\u2019s recovery, analysts said.
\nTo support growth, the government will need to focus on ramping up investments and ensuring inflation continues to ease, they added.
\n\u201cThe probability of recession is moderate, but everything must go right, including effective and efficient spending by the government, to achieve the target growth rate range,\u201d Moody\u2019s Analytics Chief Asia-Pacific Economist Steven Cochrane said in an e-mail.
\nThe Development Budget Coordination Committee on Dec. 15 revised its growth target for 2024 to 6.5-7.5%, narrower than the previous 6.5-8% goal.
\nMost multilateral institutions\u2019 gross domestic product (GDP) growth forecasts for the Philippines next year are below the government\u2019s revised goal.
\nThe World Bank expects Philippine GDP to expand by 5.8% in 2024, while the Asian Development Bank sees growth averaging 6.2% next year.
\nFor its part, the International Monetary Fund (IMF) said the economy could grow by 6% in 2024, while the ASEAN+3 Macroeconomic Research Office sees GDP expanding by 6.3%, and the Organisation for Economic Co-operation and Development has a 6.1% growth forecast for the Philippines next year.
\nLatest data from the Philippine Statistics Authority (PSA) showed GDP growth averaged 5.5% in the first nine months of the year. To meet the lower end of the government\u2019s 6-7% target for 2023, the economy must expand by 7.2% in the fourth quarter.
\nIn 2022, Philippine GDP grew by a stronger-than-expected 7.6%, the highest since 1976.
\nMr. Cochrane said he expects Philippine GDP growth to be below the government\u2019s target in 2024.
\n\u201cThe greatest risks to the forecast that keep our baseline growth rate somewhat modest are the lack of consistency of fiscal spending and its resulting stimulus, the remaining potential for high inflation, and weak external demand for Philippine export products,\u201d he said.
\nElevated inflation will continue to be one of the biggest risks to growth next year, IMF Representative to the Philippines Ragnar Gudmundsson said.
\n\u201cDownside risks could stem from persistently high inflation \u2014 globally and locally \u2014 that would necessitate further interest rate increases, an abrupt global slowdown that would dampen global trade, and an intensification of geopolitical tensions that could undermine the investment climate,\u201d Mr. Gudmundsson said in an e-mail.
\nHeadline inflation averaged 6.2% in the first 11 months of 2023, faster than 5.6% in the same period a year prior. This was above the central bank\u2019s baseline forecast of 6% and target of 2-4% for 2023.
\nThe Bangko Sentral ng Pilipinas (BSP) sees inflation easing to 3.7% in 2024 and to 3.2% in 2025.\u00a0 \u00a0
\nTo help bring down inflation, the BSP raised benchmark borrowing costs by a total of 450 basis points from May 2022 to October 2023. It has since kept the policy rate at a 16-year high of 6.5% for two straight meetings.
\nBSP Governor Eli M. Remolona, Jr. this month said the Monetary Board sees the need to keep policy settings \u201csufficiently tight\u201d until inflation settles within target.
\n\u201cInflation also has been quite volatile and could continue to be volatile depending upon the path of food-price inflation. Another spike in inflation would slow consumer spending and the broader economy,\u201d Mr. Cochrane added.
\nING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said persistently high inflation could dampen consumption.
\n\u201cHousehold consumption, which contributes the bulk to spending, has remained in expansion but has seen a gradual moderation in pace. The slower pace of expansion can be attributed to tight budgets amidst still elevated inflation,\u201d he said in an e-mail.
\nHousehold spending typically accounts for three-fourths of GDP. In the third quarter, it grew by 5%, the slowest pace in two years.
\n\u201cMeanwhile, the borrowing binge from the sustained rise in consumer loans will eventually take its toll on the households. We note spending on food items, which accounts for more than 20% of GDP, is now crawling at less than 1%,\u201d Mr. Mapa added.
\nWeaker trade prospects may also affect growth, Mr. Cochrane said.
\n\u201cWhile the risks to the global economy appear to be easing and global trade is slowly edging upward, the rebound in goods exports and service exports \u2014 including international tourism \u2014 is bound to be slow, at least through the first half of 2024,\u201d he said.
\nData from the PSA showed exports of goods and services grew by 2.6% in the third quarter, slower than 13.6% a year ago and 4.4% in the second quarter.
\n\u201cNet exports, which was a key contributor to the surprise third-quarter GDP, delivering roughly 1.6 percentage points to GDP, will likely revert to weighing on overall GDP as early as the fourth quarter and going into 2024,\u201d Mr. Mapa added.
\nSecurity Bank Corp. Chief Economist Robert Dan J. Roces also cited factors that could derail trade recovery next year, such as the slowdown in China.
\n\u201cThis is because the Philippines is a major exporter of goods, and China\u2019s economic woes would lead to a decrease in demand for Philippine exports,\u201d Mr. Roces said in an e-mail.
\nFor the first 10 months of the year, the country\u2019s trade in goods deficit narrowed by 11.9% to $44.07 billion from a year ago. Exports declined by 7.8% to $60.91 billion, while imports fell by 9.6% to $104.97 billion.
\n\u201cGeopolitical tensions in the region also provide risks, such as the posturing in the South China Sea that could also have a negative impact on the Philippine economy. This is because businesses may be hesitant to invest in the Philippines if they are concerned about the stability of the region,\u201d Mr. Roces added.
\nMr. Mapa said higher government expenditures, which helped drive third-quarter GDP growth, may not be sustained in the long run.
\n\u201cGovernment spending, which bounced back niftily in the third quarter, will stay in positive territory but we remain unsure whether fiscal authorities can provide the type of support to offset the slowdown in other factors,\u201d he said.
\n\u201cThe 2024 budget is an increase from this year but we remain skeptical we will see a strong double-digit effort in terms of government spending with a rising proportion of expenditure going towards interest expenses,\u201d he added.
\nGross capital formation is also unlikely to be a major driver of growth, Mr. Mapa said.
\n\u201cCapital formation turned negative in the third quarter and dropped to the worst downturn in more than 10 years, excluding of course COVID-19,\u201d he said.
\nElevated borrowing costs could also affect investments, he added.
\nThe Philippines is prone to natural disasters such as typhoons and earthquakes, as well as weather phenomena like El Ni\u00f1o, Mr. Roces added, which could affect inflation.
\nLatest data from Philippine Atmospheric, Geophysical and Astronomical Services Administration showed that a strong El Ni\u00f1o is present in the tropical Pacific and is showing signs of further intensification in the coming months.
\nNational Economic and Development Authority Secretary Arsenio M. Balisacan said that the El Ni\u00f1o weather event could potentially stoke inflation and fuel price pressures.
\nMODEST GROWTH SEEN
\nDespite lingering risks to the outlook, the country could still post modest GDP growth figures in 2024, the analysts said.
\u201cWe are cautiously optimistic that the Philippine economy will show decent growth in 2024,\u201d Mr. Roces said. \u201cThere are a number of factors that are expected to contribute to the Philippines\u2019 healthy growth in 2024.\u201d
\nA rebound in consumer spending due to lower interest rates in the second half of the year and improved wages could boost domestic demand in 2024, he said.
\n\u201cSecond, the Philippine government has been working to improve the investment climate in the country, and these reforms should be able to attract more foreign investment to the Philippines,\u201d Mr. Roces added.
\nGrowth next year may be driven by accelerated public investments and improved external demand for exports, Mr. Gudmundsson said.
\n\u201cFlagship infrastructure projects should notably benefit from stronger foreign direct investments and private sector participation through public-private partnership modalities,\u201d he added.
\nMr. Gudmundsson also cited positive spillovers from a resilient US economy and easing financial conditions, as these could support electronics and service exports and a rebound in domestic demand.
\n", "content_text": "By Luisa Maria Jacinta C. Jocson, Reporter\nPHILIPPINE economic growth will likely miss the government\u2019s target next year amid external headwinds and risks that could derail the country\u2019s recovery, analysts said.\nTo support growth, the government will need to focus on ramping up investments and ensuring inflation continues to ease, they added.\n\u201cThe probability of recession is moderate, but everything must go right, including effective and efficient spending by the government, to achieve the target growth rate range,\u201d Moody\u2019s Analytics Chief Asia-Pacific Economist Steven Cochrane said in an e-mail.\nThe Development Budget Coordination Committee on Dec. 15 revised its growth target for 2024 to 6.5-7.5%, narrower than the previous 6.5-8% goal.\nMost multilateral institutions\u2019 gross domestic product (GDP) growth forecasts for the Philippines next year are below the government\u2019s revised goal.\nThe World Bank expects Philippine GDP to expand by 5.8% in 2024, while the Asian Development Bank sees growth averaging 6.2% next year.\nFor its part, the International Monetary Fund (IMF) said the economy could grow by 6% in 2024, while the ASEAN+3 Macroeconomic Research Office sees GDP expanding by 6.3%, and the Organisation for Economic Co-operation and Development has a 6.1% growth forecast for the Philippines next year.\nLatest data from the Philippine Statistics Authority (PSA) showed GDP growth averaged 5.5% in the first nine months of the year. To meet the lower end of the government\u2019s 6-7% target for 2023, the economy must expand by 7.2% in the fourth quarter.\nIn 2022, Philippine GDP grew by a stronger-than-expected 7.6%, the highest since 1976.\nMr. Cochrane said he expects Philippine GDP growth to be below the government\u2019s target in 2024.\n\u201cThe greatest risks to the forecast that keep our baseline growth rate somewhat modest are the lack of consistency of fiscal spending and its resulting stimulus, the remaining potential for high inflation, and weak external demand for Philippine export products,\u201d he said.\nElevated inflation will continue to be one of the biggest risks to growth next year, IMF Representative to the Philippines Ragnar Gudmundsson said.\n\u201cDownside risks could stem from persistently high inflation \u2014 globally and locally \u2014 that would necessitate further interest rate increases, an abrupt global slowdown that would dampen global trade, and an intensification of geopolitical tensions that could undermine the investment climate,\u201d Mr. Gudmundsson said in an e-mail.\nHeadline inflation averaged 6.2% in the first 11 months of 2023, faster than 5.6% in the same period a year prior. This was above the central bank\u2019s baseline forecast of 6% and target of 2-4% for 2023.\nThe Bangko Sentral ng Pilipinas (BSP) sees inflation easing to 3.7% in 2024 and to 3.2% in 2025.\u00a0 \u00a0\nTo help bring down inflation, the BSP raised benchmark borrowing costs by a total of 450 basis points from May 2022 to October 2023. It has since kept the policy rate at a 16-year high of 6.5% for two straight meetings.\nBSP Governor Eli M. Remolona, Jr. this month said the Monetary Board sees the need to keep policy settings \u201csufficiently tight\u201d until inflation settles within target.\n\u201cInflation also has been quite volatile and could continue to be volatile depending upon the path of food-price inflation. Another spike in inflation would slow consumer spending and the broader economy,\u201d Mr. Cochrane added.\nING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said persistently high inflation could dampen consumption.\n\u201cHousehold consumption, which contributes the bulk to spending, has remained in expansion but has seen a gradual moderation in pace. The slower pace of expansion can be attributed to tight budgets amidst still elevated inflation,\u201d he said in an e-mail.\nHousehold spending typically accounts for three-fourths of GDP. In the third quarter, it grew by 5%, the slowest pace in two years.\n\u201cMeanwhile, the borrowing binge from the sustained rise in consumer loans will eventually take its toll on the households. We note spending on food items, which accounts for more than 20% of GDP, is now crawling at less than 1%,\u201d Mr. Mapa added.\nWeaker trade prospects may also affect growth, Mr. Cochrane said.\n\u201cWhile the risks to the global economy appear to be easing and global trade is slowly edging upward, the rebound in goods exports and service exports \u2014 including international tourism \u2014 is bound to be slow, at least through the first half of 2024,\u201d he said.\nData from the PSA showed exports of goods and services grew by 2.6% in the third quarter, slower than 13.6% a year ago and 4.4% in the second quarter.\n\u201cNet exports, which was a key contributor to the surprise third-quarter GDP, delivering roughly 1.6 percentage points to GDP, will likely revert to weighing on overall GDP as early as the fourth quarter and going into 2024,\u201d Mr. Mapa added.\nSecurity Bank Corp. Chief Economist Robert Dan J. Roces also cited factors that could derail trade recovery next year, such as the slowdown in China.\n\u201cThis is because the Philippines is a major exporter of goods, and China\u2019s economic woes would lead to a decrease in demand for Philippine exports,\u201d Mr. Roces said in an e-mail.\nFor the first 10 months of the year, the country\u2019s trade in goods deficit narrowed by 11.9% to $44.07 billion from a year ago. Exports declined by 7.8% to $60.91 billion, while imports fell by 9.6% to $104.97 billion.\n\u201cGeopolitical tensions in the region also provide risks, such as the posturing in the South China Sea that could also have a negative impact on the Philippine economy. This is because businesses may be hesitant to invest in the Philippines if they are concerned about the stability of the region,\u201d Mr. Roces added.\nMr. Mapa said higher government expenditures, which helped drive third-quarter GDP growth, may not be sustained in the long run.\n\u201cGovernment spending, which bounced back niftily in the third quarter, will stay in positive territory but we remain unsure whether fiscal authorities can provide the type of support to offset the slowdown in other factors,\u201d he said.\n\u201cThe 2024 budget is an increase from this year but we remain skeptical we will see a strong double-digit effort in terms of government spending with a rising proportion of expenditure going towards interest expenses,\u201d he added.\nGross capital formation is also unlikely to be a major driver of growth, Mr. Mapa said.\n\u201cCapital formation turned negative in the third quarter and dropped to the worst downturn in more than 10 years, excluding of course COVID-19,\u201d he said.\nElevated borrowing costs could also affect investments, he added.\nThe Philippines is prone to natural disasters such as typhoons and earthquakes, as well as weather phenomena like El Ni\u00f1o, Mr. Roces added, which could affect inflation.\nLatest data from Philippine Atmospheric, Geophysical and Astronomical Services Administration showed that a strong El Ni\u00f1o is present in the tropical Pacific and is showing signs of further intensification in the coming months.\nNational Economic and Development Authority Secretary Arsenio M. Balisacan said that the El Ni\u00f1o weather event could potentially stoke inflation and fuel price pressures.\nMODEST GROWTH SEEN\nDespite lingering risks to the outlook, the country could still post modest GDP growth figures in 2024, the analysts said.\n\u201cWe are cautiously optimistic that the Philippine economy will show decent growth in 2024,\u201d Mr. Roces said. \u201cThere are a number of factors that are expected to contribute to the Philippines\u2019 healthy growth in 2024.\u201d\nA rebound in consumer spending due to lower interest rates in the second half of the year and improved wages could boost domestic demand in 2024, he said.\n\u201cSecond, the Philippine government has been working to improve the investment climate in the country, and these reforms should be able to attract more foreign investment to the Philippines,\u201d Mr. Roces added.\nGrowth next year may be driven by accelerated public investments and improved external demand for exports, Mr. Gudmundsson said.\n\u201cFlagship infrastructure projects should notably benefit from stronger foreign direct investments and private sector participation through public-private partnership modalities,\u201d he added.\nMr. Gudmundsson also cited positive spillovers from a resilient US economy and easing financial conditions, as these could support electronics and service exports and a rebound in domestic demand.", "date_published": "2023-12-29T00:32:37+08:00", "date_modified": "2023-12-28T20:40:01+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/Meralco-Main-Office-Christmas-display.jpg", "tags": [ "Luisa Maria Jacinta C. Jocson", "YEARENDER", "Editors' Picks", "One News", "Special Reports", "Top Stories" ], "summary": "PHILIPPINE economic growth will likely miss the government\u2019s target next year amid external headwinds and risks that could derail the country\u2019s recovery, analysts said." }, { "id": "https://www.bworldonline.com/?p=565936", "url": "https://www.bworldonline.com/top-stories/2023/12/29/565936/amlc-requires-firms-to-report-even-attempted-suspicious-transactions/", "title": "AMLC requires firms to report even attempted suspicious transactions", "content_html": "\n
THE Anti-Money Laundering Council (AMLC) has required designated non-financial businesses and professions (DNFBPs) to report all suspicious transactions, whether completed or even just an attempt, as part of the fight against \u201cdirty money\u201d and terrorism financing.
\nAMLC\u2019s Regulatory Issuance No. 2 amended the 2021 Financing Guidelines for DNFBPs which required them to file all covered and suspicious transaction reports (CTR/STR) with the dirty money watchdog.\u00a0 \u00a0
\n\u201cDNFBPs shall file all CTRs and STRs, in accordance with the registration and reporting guidelines of the AMLC. STRs shall cover all transactions, whether completed or attempted,\u201d the AMLC said.
\nThe AMLC has earlier said that the DNFBPs guidelines apply to jewelry dealers, lawyers, law firms and accountants. It also includes company service providers that act on behalf of juridical persons or arrangements, or manage and arrange clients\u2019 funds, investments and securities.
\nUnder the guidelines, DNFBPs should file suspicious transaction reports to the AMLC on the next working day after the incident occurred.\u00a0 \u00a0
\nDNFBPs are given five working days to report all covered transactions, unless the AMLC prescribed a different period within the next 15 days from the occurrence of the incident.\u00a0 \u00a0
\n\u201cDNFBPs shall\u2026 decide with finality whether to file an STR with the AMLC should the suspicion or suspicious nature of the transaction or activity be duly established or determined, or otherwise to document the non-filing thereof,\u201d the AMLC said.\u00a0 \u00a0
\n\u201cShould a transaction be determined to be both a covered transaction and a suspicious transaction, it shall be reported as a suspicious transaction,\u201d it added.\u00a0 \u00a0
\nMeanwhile, lawyers and accountants are required to report any suspicious or unlawful activity to the AMLC, pursuant to Section 12, Canon 2 of the Code of Professional Responsibility and Accountability.
\nLawyers and accountants who provide services as a business to third parties are also required to file CTRs and STRs to the AMLC if an incident occurs.
\nThe AMLC assured that lawyers will not violate their duty of confidentiality when they disclose covered and suspicious transactions to the AMLC.\u00a0 \u00a0
\n\u201cNo administrative, criminal or civil proceedings shall lie against any person for having made a covered transaction or suspicious transaction report in the regular performance of his/her duties and in good faith, whether or not such reporting results in any criminal prosecution under the AML Act or any other Philippine law,\u201d the AMLC said.\u00a0 \u00a0
\nHowever, independent lawyers and accountants who work for a private firm or act as a sole practitioner by providing purely legal and accounting services to clients are not required to file CTRs and STRs, it added.\u00a0 \u00a0
\nThe Financial Action Task Force (FATF) describes DNFBPs as a group of entities that are involved in activities outside of the traditional financial sector but have the potential to be exploited for money laundering, terrorist financing, or other illicit financial activities.
\nThe Philippines is hoping to exit the FATF\u2019s \u201cgray list\u201d of jurisdictions under increased monitoring for dirty money risks by January next year. It has been on the gray list since June 2021.
\nTo be removed from the gray list, the country committed to comply with several action plan items.
\nThe FATF in its October update said the Philippines should continue to demonstrate effective risk-based supervision of DNFBPs and ensure that supervisors are using the proper anti-money laundering controls to mitigate risks associated with casino junkets.\u00a0
\nIt also said the Philippines should enhance and streamline law enforcement agencies\u2019 access to beneficial ownership information and ensure accurate and up-to-date information.\u00a0 \u00a0
\nThe FATF noted the Philippines should also increase investigation and prosecution of cases related to money laundering and proliferation financing. \u2014 Keisha B. Ta-asan
\n", "content_text": "THE Anti-Money Laundering Council (AMLC) has required designated non-financial businesses and professions (DNFBPs) to report all suspicious transactions, whether completed or even just an attempt, as part of the fight against \u201cdirty money\u201d and terrorism financing.\nAMLC\u2019s Regulatory Issuance No. 2 amended the 2021 Financing Guidelines for DNFBPs which required them to file all covered and suspicious transaction reports (CTR/STR) with the dirty money watchdog.\u00a0 \u00a0\n\u201cDNFBPs shall file all CTRs and STRs, in accordance with the registration and reporting guidelines of the AMLC. STRs shall cover all transactions, whether completed or attempted,\u201d the AMLC said.\nThe AMLC has earlier said that the DNFBPs guidelines apply to jewelry dealers, lawyers, law firms and accountants. It also includes company service providers that act on behalf of juridical persons or arrangements, or manage and arrange clients\u2019 funds, investments and securities.\nUnder the guidelines, DNFBPs should file suspicious transaction reports to the AMLC on the next working day after the incident occurred.\u00a0 \u00a0\nDNFBPs are given five working days to report all covered transactions, unless the AMLC prescribed a different period within the next 15 days from the occurrence of the incident.\u00a0 \u00a0\n\u201cDNFBPs shall\u2026 decide with finality whether to file an STR with the AMLC should the suspicion or suspicious nature of the transaction or activity be duly established or determined, or otherwise to document the non-filing thereof,\u201d the AMLC said.\u00a0 \u00a0\n\u201cShould a transaction be determined to be both a covered transaction and a suspicious transaction, it shall be reported as a suspicious transaction,\u201d it added.\u00a0 \u00a0\nMeanwhile, lawyers and accountants are required to report any suspicious or unlawful activity to the AMLC, pursuant to Section 12, Canon 2 of the Code of Professional Responsibility and Accountability.\nLawyers and accountants who provide services as a business to third parties are also required to file CTRs and STRs to the AMLC if an incident occurs.\nThe AMLC assured that lawyers will not violate their duty of confidentiality when they disclose covered and suspicious transactions to the AMLC.\u00a0 \u00a0\n\u201cNo administrative, criminal or civil proceedings shall lie against any person for having made a covered transaction or suspicious transaction report in the regular performance of his/her duties and in good faith, whether or not such reporting results in any criminal prosecution under the AML Act or any other Philippine law,\u201d the AMLC said.\u00a0 \u00a0\nHowever, independent lawyers and accountants who work for a private firm or act as a sole practitioner by providing purely legal and accounting services to clients are not required to file CTRs and STRs, it added.\u00a0 \u00a0\nThe Financial Action Task Force (FATF) describes DNFBPs as a group of entities that are involved in activities outside of the traditional financial sector but have the potential to be exploited for money laundering, terrorist financing, or other illicit financial activities.\nThe Philippines is hoping to exit the FATF\u2019s \u201cgray list\u201d of jurisdictions under increased monitoring for dirty money risks by January next year. It has been on the gray list since June 2021.\nTo be removed from the gray list, the country committed to comply with several action plan items.\nThe FATF in its October update said the Philippines should continue to demonstrate effective risk-based supervision of DNFBPs and ensure that supervisors are using the proper anti-money laundering controls to mitigate risks associated with casino junkets.\u00a0\nIt also said the Philippines should enhance and streamline law enforcement agencies\u2019 access to beneficial ownership information and ensure accurate and up-to-date information.\u00a0 \u00a0\nThe FATF noted the Philippines should also increase investigation and prosecution of cases related to money laundering and proliferation financing. \u2014 Keisha B. Ta-asan", "date_published": "2023-12-29T00:31:36+08:00", "date_modified": "2023-12-28T20:33:54+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/Peso-currency.jpg", "tags": [ "Keisha B. Ta-asan", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565697", "url": "https://www.bworldonline.com/top-stories/2023/12/28/565697/4-groups-submit-bids-for-naia-rehab/", "title": "4 groups submit bids for NAIA rehab", "content_html": "\n
ONLY FOUR GROUPS have submitted bids for the P170.6-billion public-private partnership (PPP) project to upgrade the Ninoy Aquino International Airport (NAIA), the Department of Transportation (DoTr) said on Wednesday.\u00a0 \u00a0
\nThe DoTr identified the four bidders as the Manila International Airport Consortium (MIAC), Asia Airport Consortium, GMR Airports Consortium, and SMC SAP and Company Consortium. \u00a0 \u00a0
\n\u201cThis is a very important project of the government. This airport is very congested, and we are expecting that when we turn this airport to the private sector we can increase the capacity per annum,\u201d Transportation Secretary Jaime J. Bautista said during the submission and opening of technical documents for the NAIA PPP project that was held online on Wednesday.
\nEight groups had earlier purchased bid documents, but only four decided to submit their bids on Wednesday.
\nThe MIAC consortium is composed of the companies owned by the country\u2019s tycoons, namely Aboitiz InfraCapital, Inc. (AIC); Ayala-led AC Infrastructure Holdings Corp.; Andrew L. Tan\u2019s Alliance Global InfraCorp Development, Inc.; Lucio Tan\u2019s Asia\u2019s Emerging Dragon Corp.; Gotianuns\u2019 Filinvest Development Corp.; Gokongwei-led JG Summit Infrastructure Holdings Corp.; and GIP EM MIAC Pte., Ltd.
\nTo recall, MIAC had previously submitted a P267-billion unsolicited proposal to operate and modernize the NAIA, but this was rejected by the government.
\nThe GMR Airports Consortium is composed of GMR Airports International B.V.; Virata-led Cavitex Holdings, Inc.; and Yuchengco-led House of Investments, Inc. GMR Airports had partnered with Megawide Construction Corp. to operate the Mactan Cebu International Airport, but has since sold its stake to AIC.
\nThe SMC SAP and Company Consortium is composed of San Miguel Holdings Corp.; RMM Asian Logistics, Inc.; RLW Aviation Development, Inc.; and Incheon International Airport Corp. The San Miguel group is currently building the New Manila International Airport in Bulacan.\u00a0
\nThe Asian Airport Consortium is comprised of Lucio Co\u2019s Cosco Capital, Inc.; Asian Infrastructure and Management Corp.; Philippine Skylanders International, Inc.; and\u00a0 PT Angkasa Pura II.
\nMr. Bautista said the DoTr will conduct a technical review of the bid submissions after 10 days which will be followed by a financial review.
\nHe said the DoTr hopes to announce the winning bidder by the first quarter of next year.
\nThe NAIA contract will initially cover 15 years, but can be extended by another 10 years. This will be under a rehabilitate-operate-expand-transfer arrangement, as provided for under the Build-Operate-and-Transfer law.
\nThe project aims to increase the current annual passenger capacity of the NAIA to at least 62 million from the current 35 million.
\n\u201cThis would help further increase the air passenger and cargo capacity of NAIA that would help further boost local and foreign tourism in the country as a low hanging fruit that could be a major pillar for economic growth and development,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. \u2014 AEOJ
\n", "content_text": "ONLY FOUR GROUPS have submitted bids for the P170.6-billion public-private partnership (PPP) project to upgrade the Ninoy Aquino International Airport (NAIA), the Department of Transportation (DoTr) said on Wednesday.\u00a0 \u00a0\nThe DoTr identified the four bidders as the Manila International Airport Consortium (MIAC), Asia Airport Consortium, GMR Airports Consortium, and SMC SAP and Company Consortium. \u00a0 \u00a0\n\u201cThis is a very important project of the government. This airport is very congested, and we are expecting that when we turn this airport to the private sector we can increase the capacity per annum,\u201d Transportation Secretary Jaime J. Bautista said during the submission and opening of technical documents for the NAIA PPP project that was held online on Wednesday. \nEight groups had earlier purchased bid documents, but only four decided to submit their bids on Wednesday.\nThe MIAC consortium is composed of the companies owned by the country\u2019s tycoons, namely Aboitiz InfraCapital, Inc. (AIC); Ayala-led AC Infrastructure Holdings Corp.; Andrew L. Tan\u2019s Alliance Global InfraCorp Development, Inc.; Lucio Tan\u2019s Asia\u2019s Emerging Dragon Corp.; Gotianuns\u2019 Filinvest Development Corp.; Gokongwei-led JG Summit Infrastructure Holdings Corp.; and GIP EM MIAC Pte., Ltd. \nTo recall, MIAC had previously submitted a P267-billion unsolicited proposal to operate and modernize the NAIA, but this was rejected by the government.\nThe GMR Airports Consortium is composed of GMR Airports International B.V.; Virata-led Cavitex Holdings, Inc.; and Yuchengco-led House of Investments, Inc. GMR Airports had partnered with Megawide Construction Corp. to operate the Mactan Cebu International Airport, but has since sold its stake to AIC.\nThe SMC SAP and Company Consortium is composed of San Miguel Holdings Corp.; RMM Asian Logistics, Inc.; RLW Aviation Development, Inc.; and Incheon International Airport Corp. The San Miguel group is currently building the New Manila International Airport in Bulacan.\u00a0\nThe Asian Airport Consortium is comprised of Lucio Co\u2019s Cosco Capital, Inc.; Asian Infrastructure and Management Corp.; Philippine Skylanders International, Inc.; and\u00a0 PT Angkasa Pura II.\nMr. Bautista said the DoTr will conduct a technical review of the bid submissions after 10 days which will be followed by a financial review.\nHe said the DoTr hopes to announce the winning bidder by the first quarter of next year.\nThe NAIA contract will initially cover 15 years, but can be extended by another 10 years. This will be under a rehabilitate-operate-expand-transfer arrangement, as provided for under the Build-Operate-and-Transfer law.\nThe project aims to increase the current annual passenger capacity of the NAIA to at least 62 million from the current 35 million.\n\u201cThis would help further increase the air passenger and cargo capacity of NAIA that would help further boost local and foreign tourism in the country as a low hanging fruit that could be a major pillar for economic growth and development,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. \u2014 AEOJ", "date_published": "2023-12-28T00:34:57+08:00", "date_modified": "2023-12-27T20:34:42+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/NAIA-airport.jpg", "tags": [ "Ashley Erika O. Jose", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565696", "url": "https://www.bworldonline.com/top-stories/2023/12/28/565696/extension-of-tariff-cuts-seen-to-mitigate-el-nino-impact-on-food-prices/", "title": "Extension of tariff cuts seen to mitigate El Ni\u00f1o impact on food prices", "content_html": "THE EXTENSION of reduced tariffs on rice and other key agricultural commodities will help cushion the inflationary impact of the El Ni\u00f1o weather phenomenon, analysts said.
\n\u201cThis will ensure stable, if not lower, prices for these products, particularly during the El Ni\u00f1o next year which will hit our agriculture sector. This move is most welcome,\u201d former Agriculture Undersecretary Fermin D. Adriano said in a Viber message.
\nPresident Ferdinand R. Marcos, Jr. last week signed Executive Order (EO) No. 50, which extends the reduced Most Favored Nation (MFN) tariff rates on rice, corn, and pork until Dec. 31, 2024.
\nThe rates for rice imports will be kept at 35% for shipments both within or over the minimum access volume (MAV) quota.
\nTariff rates for swine, fresh, chilled or frozen meat are retained at 15% for in-quota and 25% for out-quota imports.
\nImports for corn maintained the MFN duty at 5% and 15% for in-quota and out-quota shipments, respectively.
\n\u201cThe present economic condition warrants the continued application of the reduced tariff rates on rice, corn, and meat of swine (fresh, chilled or frozen) to maintain affordable prices for the purpose of ensuring food security, managing inflationary pressures, help augment the supply of basic agricultural commodities in the country, and diversify the country\u2019s market sources,\u201d the EO stated.
\nThere will also be a review of the tariff rates on rice, pork, and corn every six months, it added.
\nPhilippine Chamber of Commerce and Industry President George T. Barcelon said that the lower tariff rates will help tame inflation.
\n\u201cExtending the tariffs on key food commodities (will help) deal with inflation. That would help somewhat, because of the projected El Ni\u00f1o there could be price increases for these food commodities. I think that\u2019s a good move,\u201d he said via phone call.
\nIn the first 11 months of the year, inflation averaged 6.2%. This was still above the central bank\u2019s 6% full-year forecast and 2-4% target range.
\n\u201cThe reduced MFN tariff rates would help cushion agriculture and food production and supply and eventually price and inflation issues that may be brought by El Ni\u00f1o \u2014 a positive impact,\u201d retired Pampanga State Agricultural University professor Roy S. Kempis said in a Viber message.
\nMr. Kempis said that domestic production will be adversely affected by the dry weather event, particularly palay (unmilled rice) and corn.
\n\u201cSupply would be compromised for these crops and eventually rice and feeds; following the value chain, feeds will also be a challenge \u2014 which uses corn as an ingredient to the extent of 70% per unit volume or weight, and pork may be more expensive,\u201d he added.
\nThe latest bulletin by the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) showed that a strong El Ni\u00f1o is seen to persist in the country until January 2024.
\nThe weather event increases the likelihood of below-normal rainfall conditions, which could bring dry spells and droughts in some areas of the country.
\nThe state weather bureau also projected that by the end of May 2024, 65 provinces will experience a drought while six will face a dry spell.
\nPAGASA also reported in its latest crop condition assessment that most of the provinces in Luzon received \u201cinadequate amounts of water required to support both the rice and corn crops.\u201d
\nFRONTLOADING IMPORTS?
\nNational Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan earlier recommended frontloading rice imports to mitigate inflationary pressures.
\u201cFrontloading of imports next year is an act to bring in imported goods for the year at the earliest possible time. Since domestic supply grows as a result of the frontloading, prices tend to go down, thus, inflation is tamed,\u201d Mr. Kempis said.
\nHowever, he noted that the scheduling of these frontloaded imports must be consistent with the country\u2019s agricultural production patterns.
\n\u201cTiming is important such that frontloading happens way before and/or months after domestic production is available for harvesting. This is a way of a counterbalance to have decent farmgate prices for palay, swine, and corn such that rice, pork, and feeds are reasonably priced,\u201d he added.
\nThe reduced tariff rates will also boost free trade and improve the country\u2019s trade relations, Mr. Kempis said.
\n\u201cThe countries from where the Philippines gets its imported rice, pork, and corn are able to export more because Philippine importers find it cheaper to import the commodities involved, from these exporting countries,\u201d he said.
\nOn the other hand, Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said that the extension of lower tariffs will only benefit importers and traders.
\n\u201cLocal producers have nothing to do with the spiraling costs of staples, especially rice. Local traders and even those not usually involved in local production have been scrambling to source palay given the rising global prices of rice,\u201d he said in a Viber message.
\n\u201cIt is this mindset of \u2018importation as the only solution\u2019 that has put us in this dire situation. The greatest tragedy of our times is this self-inflicted destruction of our capacity to produce our own food. The folly to rely on the global markets is again exposed as expensive, unreliable, and reckless,\u201d he added.
\nMr. Cainglet noted the foregone revenues from these tariff cuts, which could have been used to support the agriculture sector.
\n\u201cThere is a downside though in extending the reduced MFN treatment by the Philippines. Revenue collection primarily from import taxes on the above-said products that are covered by the reduced MFN tariff rates, is consequently reduced,\u201d Mr. Kempis said.\u00a0
\nMr. Kempis also said that there may be a need for more subsidies and overall government spending to manage the impacts of the weather event.
\nIn 2019, the El Ni\u00f1o caused agricultural damage of up to P8 billion in the Philippines. \u2014 Luisa Maria Jacinta C. Jocson
\n", "content_text": "THE EXTENSION of reduced tariffs on rice and other key agricultural commodities will help cushion the inflationary impact of the El Ni\u00f1o weather phenomenon, analysts said.\n\u201cThis will ensure stable, if not lower, prices for these products, particularly during the El Ni\u00f1o next year which will hit our agriculture sector. This move is most welcome,\u201d former Agriculture Undersecretary Fermin D. Adriano said in a Viber message.\nPresident Ferdinand R. Marcos, Jr. last week signed Executive Order (EO) No. 50, which extends the reduced Most Favored Nation (MFN) tariff rates on rice, corn, and pork until Dec. 31, 2024.\nThe rates for rice imports will be kept at 35% for shipments both within or over the minimum access volume (MAV) quota.\nTariff rates for swine, fresh, chilled or frozen meat are retained at 15% for in-quota and 25% for out-quota imports.\nImports for corn maintained the MFN duty at 5% and 15% for in-quota and out-quota shipments, respectively.\n\u201cThe present economic condition warrants the continued application of the reduced tariff rates on rice, corn, and meat of swine (fresh, chilled or frozen) to maintain affordable prices for the purpose of ensuring food security, managing inflationary pressures, help augment the supply of basic agricultural commodities in the country, and diversify the country\u2019s market sources,\u201d the EO stated.\nThere will also be a review of the tariff rates on rice, pork, and corn every six months, it added.\nPhilippine Chamber of Commerce and Industry President George T. Barcelon said that the lower tariff rates will help tame inflation.\n\u201cExtending the tariffs on key food commodities (will help) deal with inflation. That would help somewhat, because of the projected El Ni\u00f1o there could be price increases for these food commodities. I think that\u2019s a good move,\u201d he said via phone call. \nIn the first 11 months of the year, inflation averaged 6.2%. This was still above the central bank\u2019s 6% full-year forecast and 2-4% target range.\n\u201cThe reduced MFN tariff rates would help cushion agriculture and food production and supply and eventually price and inflation issues that may be brought by El Ni\u00f1o \u2014 a positive impact,\u201d retired Pampanga State Agricultural University professor Roy S. Kempis said in a Viber message.\nMr. Kempis said that domestic production will be adversely affected by the dry weather event, particularly palay (unmilled rice) and corn.\n\u201cSupply would be compromised for these crops and eventually rice and feeds; following the value chain, feeds will also be a challenge \u2014 which uses corn as an ingredient to the extent of 70% per unit volume or weight, and pork may be more expensive,\u201d he added. \nThe latest bulletin by the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) showed that a strong El Ni\u00f1o is seen to persist in the country until January 2024.\nThe weather event increases the likelihood of below-normal rainfall conditions, which could bring dry spells and droughts in some areas of the country.\nThe state weather bureau also projected that by the end of May 2024, 65 provinces will experience a drought while six will face a dry spell.\nPAGASA also reported in its latest crop condition assessment that most of the provinces in Luzon received \u201cinadequate amounts of water required to support both the rice and corn crops.\u201d \nFRONTLOADING IMPORTS?\nNational Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan earlier recommended frontloading rice imports to mitigate inflationary pressures.\n\u201cFrontloading of imports next year is an act to bring in imported goods for the year at the earliest possible time. Since domestic supply grows as a result of the frontloading, prices tend to go down, thus, inflation is tamed,\u201d Mr. Kempis said.\nHowever, he noted that the scheduling of these frontloaded imports must be consistent with the country\u2019s agricultural production patterns.\n\u201cTiming is important such that frontloading happens way before and/or months after domestic production is available for harvesting. This is a way of a counterbalance to have decent farmgate prices for palay, swine, and corn such that rice, pork, and feeds are reasonably priced,\u201d he added.\nThe reduced tariff rates will also boost free trade and improve the country\u2019s trade relations, Mr. Kempis said.\n\u201cThe countries from where the Philippines gets its imported rice, pork, and corn are able to export more because Philippine importers find it cheaper to import the commodities involved, from these exporting countries,\u201d he said.\nOn the other hand, Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said that the extension of lower tariffs will only benefit importers and traders.\n\u201cLocal producers have nothing to do with the spiraling costs of staples, especially rice. Local traders and even those not usually involved in local production have been scrambling to source palay given the rising global prices of rice,\u201d he said in a Viber message. \n\u201cIt is this mindset of \u2018importation as the only solution\u2019 that has put us in this dire situation. The greatest tragedy of our times is this self-inflicted destruction of our capacity to produce our own food. The folly to rely on the global markets is again exposed as expensive, unreliable, and reckless,\u201d he added.\nMr. Cainglet noted the foregone revenues from these tariff cuts, which could have been used to support the agriculture sector.\n\u201cThere is a downside though in extending the reduced MFN treatment by the Philippines. Revenue collection primarily from import taxes on the above-said products that are covered by the reduced MFN tariff rates, is consequently reduced,\u201d Mr. Kempis said.\u00a0\nMr. Kempis also said that there may be a need for more subsidies and overall government spending to manage the impacts of the weather event.\nIn 2019, the El Ni\u00f1o caused agricultural damage of up to P8 billion in the Philippines. \u2014 Luisa Maria Jacinta C. Jocson", "date_published": "2023-12-28T00:33:55+08:00", "date_modified": "2023-12-27T20:33:26+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/rice-store.jpg", "tags": [ "Featured2", "Luisa Maria Jacinta C. Jocson", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565695", "url": "https://www.bworldonline.com/top-stories/2023/12/28/565695/business-groups-support-gos-appointment-as-economic-adviser/", "title": "Business groups support Go\u2019s appointment as economic adviser", "content_html": "By Luisa Maria Jacinta C. Jocson, Reporter
\nREFORMS to improve the ease of doing business and the Philippines\u2019 investment environment should be on the top of the agenda for the newly appointed special assistant to the President, analysts said.
\nThe appointment of Frederick D. Go as the head of the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) has received widespread support from business groups that believe his private sector experience will be valuable in crafting government policy.
\n\u201cUnder his helm, we expect the full and expedited implementation of reform initiatives which will remove red tape and promote the ease of doing business in the country,\u201d Anti-Red Tape Authority (ARTA) Secretary Ernesto V. Perez said in a Viber message.
\nAmerican Chamber of Commerce of the Philippines Executive Director Ebb Hinchliffe welcomed Mr. Go\u2019s appointment.
\n\u201cIn my interactions with (Mr. Go), I was encouraged by his desire to remove roadblocks to investment and to doing business in the Philippines,\u201d Mr. Hinchliffe said in a Viber message.
\n\u201cI am hopeful that this will translate into his new role and in the policies that the government\u2019s economic cluster will pursue,\u201d he added.
\nPhilippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon said that Mr. Go will be \u201can effective overseer of investment plans for the country.\u201d
\n\u201cHe is a well-seasoned businessman, and he has (experience) on what\u2019s happening in retail business and realty business. The fact is being a businessman, his mindset is on the delivery of what is (best) for the business sector,\u201d he said in a phone interview.
\nEarlier this month, President Ferdinand R. Marcos, Jr. signed Executive Order No. 49, which creates the OSAPIEA. It aims to \u201censure effective integration, coordination and implementation of the various investment and economic policies and programs of the government.\u201d
\nThe special assistant to the President on investment and economic affairs will have the Cabinet-level rank of secretary and serve as chairperson of the Economic Development Group.
\nMr. Go is relinquishing his role as president and chief executive officer of Robinsons Land Corp., effective Jan. 8, 2024.
\n\u201cAs a businessman whose leadership was vital in advancing various sectors, he has the advantage of understanding what needs to be prioritized and improved in government investment and economic policies to encourage more local and foreign investments,\u201d ARTA\u2019s Mr. Perez added.
\nMr. Perez said he expects Mr. Go to formulate and implement new strategies to attract more investments with the support of the private sector.
\n\u201cWe are ready to assist them as they take the lead in fostering an inclusive, enabling and competitive business environment that will foster more local and foreign investments through our mandate under the Ease of Doing Business law,\u201d he added.
\nForeign Buyers Association of the Philippines President Robert M. Young said that since Mr. Go is coming from the private sector, he will be able to easily identify the key issues being faced by various industries.
\n\u201cBeing in the private sector, Secretary Go can relate to the problems in the private sector, of private players\u2026 He is a practitioner. Secretary Go will be the right person. We see him as the savior because he can relate to our problems,\u201d he said in a phone call interview.
\nMr. Barcelon said addressing high inflation and attracting investments should be among the priority areas that Mr. Go must focus on.
\n\u201cHe is aware that (high) inflation is something that we do not like\u2026 on investment, he must look at what key issues that need to be addressed for more investors to come in,\u201d Mr. Barcelon added.
\nMr. Young said that Mr. Go should be able to expedite key policies to improve the country\u2019s investment climate.
\n\u201cWe have so many pending matters with the government that are not moving. Some for years and years already,\u201d he said.
\nMr. Young cited the Magna Carta for Micro, Small, and Medium Enterprises and policies to lower Customs fees to make exports more competitive, among others.
\n\u201cI think he can solve all this. He will be able to target these issues. This is urgent because these can generate jobs, it can generate revenues for the Philippine economy,\u201d he added.
\nMr. Young also noted that Mr. Go\u2019s position is crucial to coordinate strategies among agencies.
\nThe Foundation for Economic Freedom (FEF) in a statement said that persistent inflation is among the top concerns that Mr. Go must immediately address.
\n\u201cMr. Go will only succeed if he can get the different egos of various departments to work together, set a realistic plan with a clear set of priorities and timetable, and marshal the political will, backed by the President, to execute this plan,\u201d the FEF said.
\n\u201cA coherent economic program and swift execution will boost investor confidence and stimulate the capital markets, which are now in the doldrums,\u201d it added.
\nMeanwhile, GlobalSource Country Analyst Diwa C. Guinigundo said that Mr. Go must continue the government\u2019s fiscal consolidation path.
\n\u201cOne major challenge to many governments, including the Philippines, is keeping fiscal and debt sustainability especially after the pandemic. Mr. Go\u2019s competence will be tested on how he could orchestrate public policy formulation and execution to achieve economic growth while keeping debt levels manageable, and taxes more progressive than regressive,\u201d he said in a brief dated Dec. 22
\nMr. Guinigundo said that Mr. Go will need to keep the fiscal deficit under control, assess big-ticket infrastructure projects with \u201cquestionable priority and fiscal feasibility,\u201d and ensure the budget is allocated to priority areas such as education, health, and food security, among others.
\n", "content_text": "By Luisa Maria Jacinta C. Jocson, Reporter\nREFORMS to improve the ease of doing business and the Philippines\u2019 investment environment should be on the top of the agenda for the newly appointed special assistant to the President, analysts said.\nThe appointment of Frederick D. Go as the head of the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) has received widespread support from business groups that believe his private sector experience will be valuable in crafting government policy.\n\u201cUnder his helm, we expect the full and expedited implementation of reform initiatives which will remove red tape and promote the ease of doing business in the country,\u201d Anti-Red Tape Authority (ARTA) Secretary Ernesto V. Perez said in a Viber message.\nAmerican Chamber of Commerce of the Philippines Executive Director Ebb Hinchliffe welcomed Mr. Go\u2019s appointment.\n\u201cIn my interactions with (Mr. Go), I was encouraged by his desire to remove roadblocks to investment and to doing business in the Philippines,\u201d Mr. Hinchliffe said in a Viber message.\n\u201cI am hopeful that this will translate into his new role and in the policies that the government\u2019s economic cluster will pursue,\u201d he added. \nPhilippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon said that Mr. Go will be \u201can effective overseer of investment plans for the country.\u201d\n\u201cHe is a well-seasoned businessman, and he has (experience) on what\u2019s happening in retail business and realty business. The fact is being a businessman, his mindset is on the delivery of what is (best) for the business sector,\u201d he said in a phone interview.\nEarlier this month, President Ferdinand R. Marcos, Jr. signed Executive Order No. 49, which creates the OSAPIEA. It aims to \u201censure effective integration, coordination and implementation of the various investment and economic policies and programs of the government.\u201d \nThe special assistant to the President on investment and economic affairs will have the Cabinet-level rank of secretary and serve as chairperson of the Economic Development Group.\nMr. Go is relinquishing his role as president and chief executive officer of Robinsons Land Corp., effective Jan. 8, 2024.\n\u201cAs a businessman whose leadership was vital in advancing various sectors, he has the advantage of understanding what needs to be prioritized and improved in government investment and economic policies to encourage more local and foreign investments,\u201d ARTA\u2019s Mr. Perez added.\nMr. Perez said he expects Mr. Go to formulate and implement new strategies to attract more investments with the support of the private sector.\n\u201cWe are ready to assist them as they take the lead in fostering an inclusive, enabling and competitive business environment that will foster more local and foreign investments through our mandate under the Ease of Doing Business law,\u201d he added.\nForeign Buyers Association of the Philippines President Robert M. Young said that since Mr. Go is coming from the private sector, he will be able to easily identify the key issues being faced by various industries.\n\u201cBeing in the private sector, Secretary Go can relate to the problems in the private sector, of private players\u2026 He is a practitioner. Secretary Go will be the right person. We see him as the savior because he can relate to our problems,\u201d he said in a phone call interview. \nMr. Barcelon said addressing high inflation and attracting investments should be among the priority areas that Mr. Go must focus on.\n\u201cHe is aware that (high) inflation is something that we do not like\u2026 on investment, he must look at what key issues that need to be addressed for more investors to come in,\u201d Mr. Barcelon added.\nMr. Young said that Mr. Go should be able to expedite key policies to improve the country\u2019s investment climate.\n\u201cWe have so many pending matters with the government that are not moving. Some for years and years already,\u201d he said.\nMr. Young cited the Magna Carta for Micro, Small, and Medium Enterprises and policies to lower Customs fees to make exports more competitive, among others. \n\u201cI think he can solve all this. He will be able to target these issues. This is urgent because these can generate jobs, it can generate revenues for the Philippine economy,\u201d he added.\nMr. Young also noted that Mr. Go\u2019s position is crucial to coordinate strategies among agencies.\nThe Foundation for Economic Freedom (FEF) in a statement said that persistent inflation is among the top concerns that Mr. Go must immediately address.\n\u201cMr. Go will only succeed if he can get the different egos of various departments to work together, set a realistic plan with a clear set of priorities and timetable, and marshal the political will, backed by the President, to execute this plan,\u201d the FEF said.\n\u201cA coherent economic program and swift execution will boost investor confidence and stimulate the capital markets, which are now in the doldrums,\u201d it added. \nMeanwhile, GlobalSource Country Analyst Diwa C. Guinigundo said that Mr. Go must continue the government\u2019s fiscal consolidation path.\n\u201cOne major challenge to many governments, including the Philippines, is keeping fiscal and debt sustainability especially after the pandemic. Mr. Go\u2019s competence will be tested on how he could orchestrate public policy formulation and execution to achieve economic growth while keeping debt levels manageable, and taxes more progressive than regressive,\u201d he said in a brief dated Dec. 22 \nMr. Guinigundo said that Mr. Go will need to keep the fiscal deficit under control, assess big-ticket infrastructure projects with \u201cquestionable priority and fiscal feasibility,\u201d and ensure the budget is allocated to priority areas such as education, health, and food security, among others.", "date_published": "2023-12-28T00:32:54+08:00", "date_modified": "2023-12-27T20:33:13+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/Frederick-Go.jpg", "tags": [ "Featured2", "Luisa Maria Jacinta C. Jocson", "Editors' Picks", "One News", "Top Stories" ], "summary": "REFORMS to improve the ease of doing business and the Philippines\u2019 investment environment should be on the top of the agenda for the newly appointed special assistant to the President, analysts said." }, { "id": "https://www.bworldonline.com/?p=565694", "url": "https://www.bworldonline.com/top-stories/2023/12/28/565694/bsp-streamlines-public-disclosure-rules-for-banks/", "title": "BSP streamlines public disclosure rules for banks\u00a0", "content_html": "By Keisha B. Ta-asan, Reporter
\nTHE BANGKO SENTRAL ng Pilipinas (BSP) is streamlining rules for banks on the publication of their quarterly balance sheets, giving them a choice to publish either in print or online.
\nIn Circular No. 1186 signed by BSP Governor Eli M. Remolona, Jr. on Dec. 21, a bank\u2019s quarterly balance sheet report can either be published in print or online within 35 banking days following the end of the reference quarter.
\n\u201cAs an alternative mode of compliance\u2026, a bank may upload its quarterly balance sheet and consolidated balance sheet on its website and shared for a period of at least one year,\u201d the BSP circular stated.
\n\u201cIn addition to this, banks may also display a tabletop standee with QR (quick response) codes in a conspicuous place in the head office, all its branches and other offices, or through other digital/electronic means to make available their balance sheets, as applicable, in digital format,\u201d it added.
\nThe BSP previously required the publication of balance sheets for lenders with resources of P1 billion and above in a newspaper circulated in the city or province where the principal office is located.
\nThe new rules now allow banks to publish their balance sheets in the printed or online version of a newspaper in general circulation.
\nThe new circular stated that stand-alone small banks can publish their balance sheets in print or online version of a newspaper or post in the \u201cmost conspicuous area of its premises.\u201d The printed copy must be of sufficient size and easily readable by the public and shared for a period of at least three months.\u00a0
\nPrevious rules stated that thrift, rural, and cooperative banks with resources of less than P1 billion, should publish their balance sheets on a 12\u201dx18\u201d white paper in an area of its premises, such as in the municipal building, barangay hall, or a public market.\u00a0
\nBanks are required by the BSP to publish reports which reflect their financial condition, performance, corporate governance policies, and risk management strategies.
\n\u201cIt is the thrust of the Bangko Sentral to promote market discipline and greater transparency through the provision of comprehensive, relevant, reliable, and comparable disclosures,\u201d the BSP said.\u00a0
\nThe BSP said the bank\u2019s board of directors must also ensure that information intended for public disclosure is supported by an effective internal control structure, has undergone review and approval by its management, and is compliant with governance processes.\u00a0
\n\u201cThe board of directors shall have the overall responsibility in ensuring that reports prescribed under this Section fully disclose the minimum information required. The board of directors may delegate its oversight function to a board-level committee,\u201d it added.
\nChina Bank Capital Corp. Managing Director Juan Paolo E. Colet said the amendments will benefit the banking industry and the investing public, as it gives the public more access to banks\u2019 financial information.
\n\u201cOnline posting is not only cost-efficient for banks, but it also makes information more accessible to the public. The amendments also align with broader moves by the BSP and the banking industry toward increased digitalization of operations and the promotion of online channels for service delivery,\u201d he said in a Viber message.
\nRegina Capital Development Corp. Head of Sales Luis A. Limlingan said that online disclosure of financial information will benefit the public.
\n\u201cEspecially for publicly listed banks, this will create more accessibility to all participants who want to get as much readily available information as easily as possible,\u201d he said in a Viber message.
\nThe circular amends Section 175 of the Manual of Regulations for Banks. The prescribed reportorial template of the published or posted balance sheet for banks on both solo and consolidated bases is attached on the circular posted on BSP\u2019s website.\u00a0
\nThe circular will take effect in 15 days following its publication in the Official Gazette or in a newspaper.
\n", "content_text": "By Keisha B. Ta-asan, Reporter\nTHE BANGKO SENTRAL ng Pilipinas (BSP) is streamlining rules for banks on the publication of their quarterly balance sheets, giving them a choice to publish either in print or online.\nIn Circular No. 1186 signed by BSP Governor Eli M. Remolona, Jr. on Dec. 21, a bank\u2019s quarterly balance sheet report can either be published in print or online within 35 banking days following the end of the reference quarter.\n\u201cAs an alternative mode of compliance\u2026, a bank may upload its quarterly balance sheet and consolidated balance sheet on its website and shared for a period of at least one year,\u201d the BSP circular stated.\n\u201cIn addition to this, banks may also display a tabletop standee with QR (quick response) codes in a conspicuous place in the head office, all its branches and other offices, or through other digital/electronic means to make available their balance sheets, as applicable, in digital format,\u201d it added.\nThe BSP previously required the publication of balance sheets for lenders with resources of P1 billion and above in a newspaper circulated in the city or province where the principal office is located.\nThe new rules now allow banks to publish their balance sheets in the printed or online version of a newspaper in general circulation. \nThe new circular stated that stand-alone small banks can publish their balance sheets in print or online version of a newspaper or post in the \u201cmost conspicuous area of its premises.\u201d The printed copy must be of sufficient size and easily readable by the public and shared for a period of at least three months.\u00a0\nPrevious rules stated that thrift, rural, and cooperative banks with resources of less than P1 billion, should publish their balance sheets on a 12\u201dx18\u201d white paper in an area of its premises, such as in the municipal building, barangay hall, or a public market.\u00a0\nBanks are required by the BSP to publish reports which reflect their financial condition, performance, corporate governance policies, and risk management strategies.\n\u201cIt is the thrust of the Bangko Sentral to promote market discipline and greater transparency through the provision of comprehensive, relevant, reliable, and comparable disclosures,\u201d the BSP said.\u00a0\nThe BSP said the bank\u2019s board of directors must also ensure that information intended for public disclosure is supported by an effective internal control structure, has undergone review and approval by its management, and is compliant with governance processes.\u00a0\n\u201cThe board of directors shall have the overall responsibility in ensuring that reports prescribed under this Section fully disclose the minimum information required. The board of directors may delegate its oversight function to a board-level committee,\u201d it added. \nChina Bank Capital Corp. Managing Director Juan Paolo E. Colet said the amendments will benefit the banking industry and the investing public, as it gives the public more access to banks\u2019 financial information. \n\u201cOnline posting is not only cost-efficient for banks, but it also makes information more accessible to the public. The amendments also align with broader moves by the BSP and the banking industry toward increased digitalization of operations and the promotion of online channels for service delivery,\u201d he said in a Viber message.\nRegina Capital Development Corp. Head of Sales Luis A. Limlingan said that online disclosure of financial information will benefit the public.\n\u201cEspecially for publicly listed banks, this will create more accessibility to all participants who want to get as much readily available information as easily as possible,\u201d he said in a Viber message.\nThe circular amends Section 175 of the Manual of Regulations for Banks. The prescribed reportorial template of the published or posted balance sheet for banks on both solo and consolidated bases is attached on the circular posted on BSP\u2019s website.\u00a0\nThe circular will take effect in 15 days following its publication in the Official Gazette or in a newspaper.", "date_published": "2023-12-28T00:31:53+08:00", "date_modified": "2023-12-27T20:32:50+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/12/BDO-atm.jpg", "tags": [ "Keisha B. Ta-asan", "One News", "Top Stories" ], "summary": "THE BANGKO SENTRAL ng Pilipinas (BSP) is streamlining rules for banks on the publication of their quarterly balance sheets, giving them a choice to publish either in print or online." }, { "id": "https://www.bworldonline.com/?p=565560", "url": "https://www.bworldonline.com/top-stories/2023/12/27/565560/philippines-attracts-four-bids-for-3b-airport-upgrade/", "title": "Philippines attracts four bids for $3B airport upgrade", "content_html": "MANILA – The Philippines’ auction for a P170.6 billion ($3 billion) upgrade of its main international airport attracted four bidders, the transportation ministry said on Wednesday.
\nFirms that submitted bids were the Manila International Airport Consortium, Asian Airport Consortium, GMR Airports Consortium, and SMC SAP & Co Consortium, the bids and awards committee said.
\nThe transportation ministry will award in the first quarter the 15-year concession that is extendable by another 10 years. — Reuters
\n", "content_text": "MANILA – The Philippines’ auction for a P170.6 billion ($3 billion) upgrade of its main international airport attracted four bidders, the transportation ministry said on Wednesday.\nFirms that submitted bids were the Manila International Airport Consortium, Asian Airport Consortium, GMR Airports Consortium, and SMC SAP & Co Consortium, the bids and awards committee said.\nThe transportation ministry will award in the first quarter the 15-year concession that is extendable by another 10 years. — Reuters", "date_published": "2023-12-27T11:20:45+08:00", "date_modified": "2023-12-27T11:20:45+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/rgentribirthfurd/", "avatar": "https://secure.gravatar.com/avatar/67e0d160ec455979f75e504cb026950a?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/08/NAIA-airport-wc.jpg", "tags": [ "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565474", "url": "https://www.bworldonline.com/top-stories/2023/12/27/565474/boi-approved-investments-hit-p1-16t/", "title": "BoI-approved investments hit P1.16T", "content_html": "THE BOARD of Investments (BoI) said on Tuesday that total approved investments reached a record P1.16 trillion so far this year, thanks to a surge in renewable energy projects as the sector was opened up to full foreign ownership.
\nIn a statement, the BoI said it had greenlit P1.16 trillion as of Dec. 18, 59% up from P729 billion approved in 2022.
\n\u201cThere are three more projects worth about P350 billion that are currently being assessed and, if they are able to comply with both the substantive and transparency requirements, they may be able to make it to the BoI Board and Mancom deliberations on Dec. 28 \u2014 our last for the year,\u201d Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said in a statement.
\nThe P1.16-trillion figure so far is still 29% below the revised P1.5-trillion investment approval target set by the Department of Trade and Industry (DTI) for the year. The DTI earlier upwardly revised the BoI\u2019s initial P1-trillion target for 2023.
\n\u201cThe BoI hitting P1.16 trillion for 2023 reaffirms strong investor confidence in the administration of President Ferdinand R. Marcos, Jr. \u2014 their responsiveness to the policy initiatives of the President and the effectiveness of the aggressive investment promotion activities,\u201d Trade Secretary and BoI Chairman Alfredo E. Pascual said.
\n\u201cWe are all-the-more optimistic about opportunities that lie ahead in 2024, with the BoI poised to further catalyze smart- and sustainability-driven investments in the country,\u201d he added.
\nDomestic approvals hit P398.76 billion, accounting for 34% of the total approvals, and 26% higher than the year-ago figures.
\nOn the other hand, foreign investment approvals soared by 452% to P763.22 billion this year.
\nThe BoI said it approved P968.14 billion worth of investments for the renewable energy and power sector, accounting for 83.45% of the total for the year.
\nThis was more than double the P409.03 billion investments approved a year ago, as the Philippine government allowed full foreign ownership in the renewable energy (RE) sector starting November 2022.
\nForeign nationals and foreign-owned entities are now allowed to explore, develop and use RE resources in the country such as solar, wind, biomass, ocean or tidal energy. Foreign ownership of RE projects was previously limited to 40%.
\n\u201cNoteworthy projects approved for January to December were seven offshore wind power projects located in Cavite, Laguna, Dagupan, San Miguel Bay, Negros, and Northern Samar, amounting to a total of P759.84 billion,\u201d it added.
\nMr. Pascual, in June, said that investments in renewable energy projects could make up about a third of the agency\u2019s investment approval targets for the year.
\nMeanwhile, the BoI approved P96.16 billion worth of projects in the information and communication sector this year.
\nThe manufacturing sector had P22.03 billion worth of approved investments, while infrastructure (toll roads) had P20 billion, and P15.63 billion was for mass housing.
\nThe BoI said these investment approvals are expected to generate 47,195 jobs from a total of 303 projects.
\nIn terms of domestic investments, Western Visayas made up the largest share with P316.89 billion worth of investments, followed by Calabarzon (P211.89 billion), Bicol Region (P162.92 billion), Eastern Visayas (P128.62 billion) and Ilocos Region (P122.18 billion).
\nMeanwhile, foreign investments from Germany contributed the largest share with P393.28 billion, followed by the Netherlands with P333.61 billion, Singapore with P17.38 billion, and the United States with P3.38 billion. \u2014 A.H. Halili
\n", "content_text": "THE BOARD of Investments (BoI) said on Tuesday that total approved investments reached a record P1.16 trillion so far this year, thanks to a surge in renewable energy projects as the sector was opened up to full foreign ownership.\nIn a statement, the BoI said it had greenlit P1.16 trillion as of Dec. 18, 59% up from P729 billion approved in 2022.\n\u201cThere are three more projects worth about P350 billion that are currently being assessed and, if they are able to comply with both the substantive and transparency requirements, they may be able to make it to the BoI Board and Mancom deliberations on Dec. 28 \u2014 our last for the year,\u201d Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said in a statement.\nThe P1.16-trillion figure so far is still 29% below the revised P1.5-trillion investment approval target set by the Department of Trade and Industry (DTI) for the year. The DTI earlier upwardly revised the BoI\u2019s initial P1-trillion target for 2023.\n\u201cThe BoI hitting P1.16 trillion for 2023 reaffirms strong investor confidence in the administration of President Ferdinand R. Marcos, Jr. \u2014 their responsiveness to the policy initiatives of the President and the effectiveness of the aggressive investment promotion activities,\u201d Trade Secretary and BoI Chairman Alfredo E. Pascual said.\n\u201cWe are all-the-more optimistic about opportunities that lie ahead in 2024, with the BoI poised to further catalyze smart- and sustainability-driven investments in the country,\u201d he added.\nDomestic approvals hit P398.76 billion, accounting for 34% of the total approvals, and 26% higher than the year-ago figures.\nOn the other hand, foreign investment approvals soared by 452% to P763.22 billion this year.\nThe BoI said it approved P968.14 billion worth of investments for the renewable energy and power sector, accounting for 83.45% of the total for the year.\nThis was more than double the P409.03 billion investments approved a year ago, as the Philippine government allowed full foreign ownership in the renewable energy (RE) sector starting November 2022. \nForeign nationals and foreign-owned entities are now allowed to explore, develop and use RE resources in the country such as solar, wind, biomass, ocean or tidal energy. Foreign ownership of RE projects was previously limited to 40%.\n\u201cNoteworthy projects approved for January to December were seven offshore wind power projects located in Cavite, Laguna, Dagupan, San Miguel Bay, Negros, and Northern Samar, amounting to a total of P759.84 billion,\u201d it added.\nMr. Pascual, in June, said that investments in renewable energy projects could make up about a third of the agency\u2019s investment approval targets for the year.\nMeanwhile, the BoI approved P96.16 billion worth of projects in the information and communication sector this year.\nThe manufacturing sector had P22.03 billion worth of approved investments, while infrastructure (toll roads) had P20 billion, and P15.63 billion was for mass housing.\nThe BoI said these investment approvals are expected to generate 47,195 jobs from a total of 303 projects.\nIn terms of domestic investments, Western Visayas made up the largest share with P316.89 billion worth of investments, followed by Calabarzon (P211.89 billion), Bicol Region (P162.92 billion), Eastern Visayas (P128.62 billion) and Ilocos Region (P122.18 billion).\nMeanwhile, foreign investments from Germany contributed the largest share with P393.28 billion, followed by the Netherlands with P333.61 billion, Singapore with P17.38 billion, and the United States with P3.38 billion. \u2014 A.H. Halili", "date_published": "2023-12-27T00:34:39+08:00", "date_modified": "2023-12-26T19:14:14+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/06/PHL-Flags.jpg", "tags": [ "Adrian H. Halili", "Editors' Picks", "One News", "Top Stories" ] }, { "id": "https://www.bworldonline.com/?p=565470", "url": "https://www.bworldonline.com/top-stories/2023/12/27/565470/external-debt-service-burden-surges-to-10-8-billion-as-of-end-september/", "title": "External debt service burden surges to $10.8 billion as of end-September", "content_html": "By Keisha B. Ta-asan, Reporter
\nTHE PHILIPPINES\u2019 external debt service burden more than doubled in the January-to-September period, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP). \u00a0 \u00a0 \u00a0 \u00a0
\nBased on data posted on the BSP\u2019s website, the country\u2019s debt service burden on its external borrowings skyrocketed by 130.7% to $10.846 billion from $4.702 billion in the same period in 2022.\u00a0 \u00a0
\nMonth on month, it rose by 22% from $8.89 billion recorded as of end-August.\u00a0 \u00a0
\nAs of end-September, the debt service burden is equivalent to 3.5% of gross domestic product (GDP), higher than 1.6% recorded in the comparable year-ago period.
\nThe debt service burden refers to the amount of money a country needs to pay back its foreign creditors. It includes both the principal and interest payments on its external debt.\u00a0 \u00a0
\nBSP data showed principal payments jumped by 110.6% to $5.861 billion in the January-to-September period from $2.78 billion during the same period in 2022.\u00a0 \u00a0
\nInterest payments surged by 159.7% to $4.985 billion in the first nine months of the year from $1.919 billion a year ago.
\nPrincipal external debt service is mostly fixed medium- to long-term credit, while interest payments are on fixed and revolving short-term credit from banks and nonbanks.
\n\u201cThe sharp increase in foreign debt payments may have to do with increased foreign borrowings by the government since last year amid the need to hedge against rising interest rates as well as to diversify its sources of borrowings/funding in the global markets, both from commercial and multilateral sources,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.\u00a0 \u00a0
\nCentral banks across the world have tightened monetary policy to tame inflation. The BSP was regarded as one of the most aggressive central banks in the region after it hiked the key interest rate by 450 basis points (bps) from May 2022 to October 2023. \u00a0 \u00a0
\nMeanwhile, separate BSP data showed the country\u2019s outstanding external debt increased by 10.1% to $118.833 billion at end-September from $107.91 billion in the same period a year ago. It also inched up by 0.8% from $117.9 billion as of end-June.
\nExternal debt refers to all types of borrowings by Philippine residents from nonresidents, following the residency criterion for international statistics.
\nThe external debt ratio, or the external debt as a percentage of GDP, was equivalent to 28.1% of GDP. This was slightly lower than 28.5% in the previous quarter.
\n\u201cFor the coming months, external debt servicing costs could remain elevated amid increased foreign borrowings in recent months amid the further diversification of the government\u2019s funding sources in global markets as well as to provide continued supply/liquidity of Philippine sovereign bonds in the world market as part of capital market development,\u201d Mr. Ricafort said.\u00a0 \u00a0
\nHowever, possible rate cuts from both the US Federal Reserve and the Monetary Board due to easing inflation may help mitigate external debt servicing costs, he added.\u00a0 \u00a0
\nBSP Governor Eli M. Remolona, Jr. earlier said the BSP is unlikely to cut interest rates in the coming months, as monetary policy in the Philippines is in a \u201chigher for longer\u201d scenario.\u00a0 \u00a0
\nThe Monetary Board kept its benchmark rate at a 16-year high of 6.5% for a second straight meeting during its December meeting. Interest rates on the overnight deposit and lending facilities were also left unchanged at 6% and 7%, respectively.
\nPolicy easing will only be considered if inflation and inflation expectations are within a \u201ccomfortable\u201d range, Mr. Remolona added.\u00a0 \u00a0
\nHeadline inflation eased to 4.1% in November and brought the 11-month inflation average to 6.2%. November marked the 20th straight month that inflation breached the BSP\u2019s 2-4% target band for this year.
\nThe central bank expects inflation to average 6% this year.\u00a0 \u00a0
\n", "content_text": "By Keisha B. Ta-asan, Reporter\nTHE PHILIPPINES\u2019 external debt service burden more than doubled in the January-to-September period, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP). \u00a0 \u00a0 \u00a0 \u00a0\nBased on data posted on the BSP\u2019s website, the country\u2019s debt service burden on its external borrowings skyrocketed by 130.7% to $10.846 billion from $4.702 billion in the same period in 2022.\u00a0 \u00a0\nMonth on month, it rose by 22% from $8.89 billion recorded as of end-August.\u00a0 \u00a0\nAs of end-September, the debt service burden is equivalent to 3.5% of gross domestic product (GDP), higher than 1.6% recorded in the comparable year-ago period.\nThe debt service burden refers to the amount of money a country needs to pay back its foreign creditors. It includes both the principal and interest payments on its external debt.\u00a0 \u00a0\nBSP data showed principal payments jumped by 110.6% to $5.861 billion in the January-to-September period from $2.78 billion during the same period in 2022.\u00a0 \u00a0\nInterest payments surged by 159.7% to $4.985 billion in the first nine months of the year from $1.919 billion a year ago.\nPrincipal external debt service is mostly fixed medium- to long-term credit, while interest payments are on fixed and revolving short-term credit from banks and nonbanks.\n\u201cThe sharp increase in foreign debt payments may have to do with increased foreign borrowings by the government since last year amid the need to hedge against rising interest rates as well as to diversify its sources of borrowings/funding in the global markets, both from commercial and multilateral sources,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.\u00a0 \u00a0\nCentral banks across the world have tightened monetary policy to tame inflation. The BSP was regarded as one of the most aggressive central banks in the region after it hiked the key interest rate by 450 basis points (bps) from May 2022 to October 2023. \u00a0 \u00a0\nMeanwhile, separate BSP data showed the country\u2019s outstanding external debt increased by 10.1% to $118.833 billion at end-September from $107.91 billion in the same period a year ago. It also inched up by 0.8% from $117.9 billion as of end-June.\nExternal debt refers to all types of borrowings by Philippine residents from nonresidents, following the residency criterion for international statistics.\nThe external debt ratio, or the external debt as a percentage of GDP, was equivalent to 28.1% of GDP. This was slightly lower than 28.5% in the previous quarter.\n\u201cFor the coming months, external debt servicing costs could remain elevated amid increased foreign borrowings in recent months amid the further diversification of the government\u2019s funding sources in global markets as well as to provide continued supply/liquidity of Philippine sovereign bonds in the world market as part of capital market development,\u201d Mr. Ricafort said.\u00a0 \u00a0\nHowever, possible rate cuts from both the US Federal Reserve and the Monetary Board due to easing inflation may help mitigate external debt servicing costs, he added.\u00a0 \u00a0\nBSP Governor Eli M. Remolona, Jr. earlier said the BSP is unlikely to cut interest rates in the coming months, as monetary policy in the Philippines is in a \u201chigher for longer\u201d scenario.\u00a0 \u00a0\nThe Monetary Board kept its benchmark rate at a 16-year high of 6.5% for a second straight meeting during its December meeting. Interest rates on the overnight deposit and lending facilities were also left unchanged at 6% and 7%, respectively.\nPolicy easing will only be considered if inflation and inflation expectations are within a \u201ccomfortable\u201d range, Mr. Remolona added.\u00a0 \u00a0\nHeadline inflation eased to 4.1% in November and brought the 11-month inflation average to 6.2%. November marked the 20th straight month that inflation breached the BSP\u2019s 2-4% target band for this year.\nThe central bank expects inflation to average 6% this year.\u00a0 \u00a0", "date_published": "2023-12-27T00:33:17+08:00", "date_modified": "2023-12-26T19:06:29+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2023/10/US-Dollar-currency.jpg", "tags": [ "Featured2", "Keisha B. Ta-asan", "Editors' Picks", "One News", "Top Stories" ], "summary": "THE PHILIPPINES\u2019 external debt service burden more than doubled in the January-to-September period, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP). \u00a0 \u00a0 \u00a0 \u00a0" }, { "id": "https://www.bworldonline.com/?p=565471", "url": "https://www.bworldonline.com/top-stories/2023/12/27/565471/cost-of-doing-business-navigating-international-rules-hindering-wider-philippine-utilization-of-trade-deals/", "title": "Cost of doing business, navigating international rules hindering wider Philippine utilization of trade deals", "content_html": "By Justine Irish D. Tabile, Reporter
\nEXPORTERS lack the knowledge to tap trade agreements and face a higher cost of doing business in the Philippines, rendering their products uncompetitive relative to other countries\u2019 exports, a business group said.
\nThe Philippine Chamber of Commerce and Industry said cost-of-doing-business issues center on high power and logistics costs.
\n\u201cThe cost of doing business is still quite high (here) compared to the other countries\u2026 These are some of the issues that the government has to address for us to really gain full benefit from (taking advantage of) free trade agreements (FTAs),\u201d PCCI President George T. Barcelon told\u00a0BusinessWorld\u00a0by phone.
\nMr. Barcelon said that aside from incentives, the Philippines must seek to be a competitive market as it is yet to see strong, sustained inflows of foreign direct investment (FDIs).
\n![\"\"](\"https://www.bworldonline.com/wp-content/uploads/2021/04/BW-Bullseye-2020-030420-e1660135233647.jpg\")
\u201cIt is top of mind in our meeting with the Anti-Red Tape Authority and foreign chambers that there are these issues to be addressed,\u201d he said.
\u201cAs of now, we are not seeing any real good inflow of FDIs as investments are still headed towards Vietnam, Indonesia, and Thailand. This is something that needs work,\u201d he added.
\nNet inflows of FDI slumped to their lowest level in over three years, amounting to $422 million in September. This was 42.2% lower year on year and down by 46.5% from a month prior.
\nThis brought the FDI net inflows to $5.9 billion in the first nine months of the year, representing a 15.9% decline from a year earlier.
\nMr. Barcelon said that the Philippines must upskill its workers to move its products higher up the value ladder.
\n\u201cOnce we have increased to a higher value, be it agricultural or electronic products\u2026 the other thing that I think the government must be aware is the cost of compliance and permits,\u201d he said.
\nHe said that the added costs do not align with the government\u2019s target of rightsizing the bureaucracy.
\n\u201cWhat businesses see is that there is more bureaucracy, and bureaucracy sometimes can be interpreted as the flip side of corruption,\u201d he added.
\nLast year, the Philippines improved its ranking on the global corruption index compiled by Transparency International. It placed 116th out of 180 countries in the 2022 Corruption Perceptions Index, a spot higher than its worst-ever showing of 117th place in 2021.
\nDespite the improvement in ranking, the Philippine score was 33, its lowest ever in the index and below the global average of 43 and the Asia-Pacific average of 45.
\nTRADE DEALS
\nTrade and Industry Undersecretary Allan B. Gepty said some investment must be made in navigating the preferential arrangements and their compliance rules to be in a position to access trade agreements.
\u201cThere are still many businesses who are not that aware of these preferential arrangements, including compliance procedures,\u201d Mr. Gepty said in a Viber message.
\n\u201cThe continuing program is for advocacy and education so that exporters can avail of the preferential arrangements and other businesses can be encouraged to export or even do business in other countries,\u201d he added.
\nMr. Gepty said the Department of Trade and Industry (DTI) plans to sustain its campaign to inform and educate stakeholders on the benefits of FTAs such as the Regional Comprehensive Economic Partnership (RCEP) and other preferential agreements such as the European Union\u2019s (EU) Generalised Scheme of Preferences Plus (GSP+).
\nThe Philippines has been a beneficiary of the GSP+, a special trade scheme for vulnerable low- and lower-middle-income countries, since 2014. GSP+ grants zero duties on 6,274 Philippine products.
\nThe current arrangement was set to expire by the end of 2023. However, the Council of EU Member States and the European Parliament amended the GSP scheme to extend it to 2027.
\nUnder the current scheme, eligible countries, such as the Philippines, will have to comply with 27 international conventions on human rights, labor rights, climate action, and good governance.
\nThe Philippines was threatened with the loss of its GSP+ status during the Duterte administration due to European concern over extrajudicial killings and alleged human rights violations.
\nThe Duterte administration\u2019s \u201cwar on drugs\u201d was condemned by the European Parliament in a resolution passed in February 2022, which asked the country to act on human rights abuses.
\nOn the other hand, RCEP, the world\u2019s biggest FTA involving a third of the global economy, counts among its members Association of Southeast Asian Nations, Australia, China, Japan, New Zealand, and South Korea.
\nThe deal aims to increase trade among RCEP participants by allowing minimal to zero restrictions on shipment volumes, tariffs, and import taxes.
\nThe Philippines was the last participating country to ratify the FTA on June 2, more than two and a half years since the participating countries concluded the deal in November 2020.
\nMr. Gepty said that the late ratification is one of the reasons why it is still too early to assess RCEP utilization in the Philippines.
\n\u201cSince its implementation in the Philippines only started in June, it would still be too early to gather and process data. We are coordinating with concerned agencies to gather relevant data for purposes of monitoring,\u201d he said.
\nMr. Barcelon added: \u201cRCEP was just ratified in the middle of the year, so it will take some time to really get the benefits from it.\u201d
\nHe said that most RCEP countries are already Philippine trading partners.
\n\u201cSome of the benefits that I would see are for our agricultural sector to be able to expand their market in Japan, among others,\u201d he added, citing the benefits of the lowered tariffs for Philippine produce under RCEP.
\nTereso O. Panga, director-general of the Philippine Economic Zone Authority (PEZA), said there has been an increase in investment approvals from some RCEP countries.
\n\u201cThere has been a marked increase in our ecozone investment approvals this year from Australia and China, countries we consider in PEZA as non-traditional sources of economic zone (ecozone) FDI and exports,\u201d Mr. Panga said in a Viber message.
\n\u201cClearly, we can attribute this trade and investment market diversification to the country\u2019s recent accession to RCEP,\u201d he added.
\nPEZA reported that approved investments from Australia more than doubled to P772.82 million in the first 11 months while investments from China grew 65.8% to P1.28 billion during the period.
\n\u201cWith the entry of more Chinese and Australian investors, we can expect these locators to be exporting their products and services back to their principal headquarters or to other RCEP member countries to take advantage of the lower trade barriers and improved market access from trading partners,\u201d Mr. Panga said.
\nHe said that the increase in investment after the implementation of trade agreements was also seen in the case of European countries.
\n\u201cWe see the same trend with the huge growth in ecozone FDI from EU member countries. In addition, we expect our ecozone exports to the EU to likewise achieve a significant increase given the latter\u2019s continued grant of GSP+ privileges to Philippine exporters,\u201d he said.
\n\u201cWith PEZA accounting for more than 60% of the exports of goods and commodities, we are pursuing more locators seeking to avail of the benefits under RCEP and the proposed EU-Philippines FTA to grow their operations in the country,\u201d he added.
\nIn the first 11 months, PEZA approved P16.56 billion in investments from EU member countries, sharply higher compared with the P2.44 billion in approvals a year earlier.
\nPhilip Dupuis, head of trade for the EU Delegation to the Philippines, said the Philippines retains the potential to more fully utilize GSP+.
\n\u201cUtilization by the Philippines\u2026 has been relatively good. I think we are utilizing two-thirds of the eligible exports, more or less, if I remember well, but it could be better,\u201d Mr. Dupuis said in a chance interview.
\nHe said that it is important to determine whether exporters have an ingrained preference for trading with nearby or familiar markets.
\n\u201cI think there is a lot of work for us to do in terms of making the European market better known, but the companies also need to inform themselves because all the materials are there,\u201d he said.
\n\u201cObviously, if you are satisfied with your exports to Japan and the US, then you don\u2019t necessarily look at the EU market. But I think the potential is there; there is potential to grow for Philippine companies in Europe,\u201d he added.
\nMr. Dupuis also said that the EU legislators are still looking to update the GSP+ scheme after the current deal\u2019s extension, as the EU Council and Parliament have yet to reach agreement on updating GSP rules.
\nThe EU and the Philippines have also resumed talks for an FTA since the suspension of the negotiations in 2017. Negotiations were put on hold due to issues over intellectual property rights and data exclusivity, among others.
\nThe two parties are expected to complete the initial phase of the negotiations by the end of December, which involves the identification of the chapters that would form part of the FTA.
\nThe two first launched negotiations for an FTA in 2015.
\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that there is also a need to push the participation of micro, small, and medium enterprises (MSMEs) to further increase utilization of GSP+.
\n\u201cSome MSMEs that are part of the export supply chain and ecosystem have yet to maximize the potential of GSP+,\u201d Mr. Ricafort said in a Viber message.
\nHe added that supporting \u201conline businesses and transactions would also be able to maximize the economic benefits and potential of these FTAs, given their immense possibilities to expand export markets.\u201d
\nMr. Ricafort said FTAs are helpful for effectively expanding the markets of Philippine exporters at much reduced cost, making them more competitively priced.
\nHe said such trade deals also attract more investment, with investors from nearby countries using the Philippines as a stepping stone to access the benefits of preferential agreements such as GSP+.
\n", "content_text": "By Justine Irish D. Tabile, Reporter\nEXPORTERS lack the knowledge to tap trade agreements and face a higher cost of doing business in the Philippines, rendering their products uncompetitive relative to other countries\u2019 exports, a business group said. \nThe Philippine Chamber of Commerce and Industry said cost-of-doing-business issues center on high power and logistics costs.\n\u201cThe cost of doing business is still quite high (here) compared to the other countries\u2026 These are some of the issues that the government has to address for us to really gain full benefit from (taking advantage of) free trade agreements (FTAs),\u201d PCCI President George T. Barcelon told\u00a0BusinessWorld\u00a0by phone.\nMr. Barcelon said that aside from incentives, the Philippines must seek to be a competitive market as it is yet to see strong, sustained inflows of foreign direct investment (FDIs).\n\u201cIt is top of mind in our meeting with the Anti-Red Tape Authority and foreign chambers that there are these issues to be addressed,\u201d he said.\n\u201cAs of now, we are not seeing any real good inflow of FDIs as investments are still headed towards Vietnam, Indonesia, and Thailand. This is something that needs work,\u201d he added.\nNet inflows of FDI slumped to their lowest level in over three years, amounting to $422 million in September. This was 42.2% lower year on year and down by 46.5% from a month prior.\nThis brought the FDI net inflows to $5.9 billion in the first nine months of the year, representing a 15.9% decline from a year earlier.\nMr. Barcelon said that the Philippines must upskill its workers to move its products higher up the value ladder.\n\u201cOnce we have increased to a higher value, be it agricultural or electronic products\u2026 the other thing that I think the government must be aware is the cost of compliance and permits,\u201d he said.\nHe said that the added costs do not align with the government\u2019s target of rightsizing the bureaucracy.\n\u201cWhat businesses see is that there is more bureaucracy, and bureaucracy sometimes can be interpreted as the flip side of corruption,\u201d he added.\nLast year, the Philippines improved its ranking on the global corruption index compiled by Transparency International. It placed 116th out of 180 countries in the 2022 Corruption Perceptions Index, a spot higher than its worst-ever showing of 117th place in 2021.\nDespite the improvement in ranking, the Philippine score was 33, its lowest ever in the index and below the global average of 43 and the Asia-Pacific average of 45.\nTRADE DEALS\nTrade and Industry Undersecretary Allan B. Gepty said some investment must be made in navigating the preferential arrangements and their compliance rules to be in a position to access trade agreements.\n\u201cThere are still many businesses who are not that aware of these preferential arrangements, including compliance procedures,\u201d Mr. Gepty said in a Viber message.\n\u201cThe continuing program is for advocacy and education so that exporters can avail of the preferential arrangements and other businesses can be encouraged to export or even do business in other countries,\u201d he added.\nMr. Gepty said the Department of Trade and Industry (DTI) plans to sustain its campaign to inform and educate stakeholders on the benefits of FTAs such as the Regional Comprehensive Economic Partnership (RCEP) and other preferential agreements such as the European Union\u2019s (EU) Generalised Scheme of Preferences Plus (GSP+).\nThe Philippines has been a beneficiary of the GSP+, a special trade scheme for vulnerable low- and lower-middle-income countries, since 2014. GSP+ grants zero duties on 6,274 Philippine products.\nThe current arrangement was set to expire by the end of 2023. However, the Council of EU Member States and the European Parliament amended the GSP scheme to extend it to 2027.\nUnder the current scheme, eligible countries, such as the Philippines, will have to comply with 27 international conventions on human rights, labor rights, climate action, and good governance.\nThe Philippines was threatened with the loss of its GSP+ status during the Duterte administration due to European concern over extrajudicial killings and alleged human rights violations.\nThe Duterte administration\u2019s \u201cwar on drugs\u201d was condemned by the European Parliament in a resolution passed in February 2022, which asked the country to act on human rights abuses.\nOn the other hand, RCEP, the world\u2019s biggest FTA involving a third of the global economy, counts among its members Association of Southeast Asian Nations, Australia, China, Japan, New Zealand, and South Korea.\nThe deal aims to increase trade among RCEP participants by allowing minimal to zero restrictions on shipment volumes, tariffs, and import taxes.\nThe Philippines was the last participating country to ratify the FTA on June 2, more than two and a half years since the participating countries concluded the deal in November 2020.\nMr. Gepty said that the late ratification is one of the reasons why it is still too early to assess RCEP utilization in the Philippines.\n\u201cSince its implementation in the Philippines only started in June, it would still be too early to gather and process data. We are coordinating with concerned agencies to gather relevant data for purposes of monitoring,\u201d he said.\nMr. Barcelon added: \u201cRCEP was just ratified in the middle of the year, so it will take some time to really get the benefits from it.\u201d\nHe said that most RCEP countries are already Philippine trading partners.\n\u201cSome of the benefits that I would see are for our agricultural sector to be able to expand their market in Japan, among others,\u201d he added, citing the benefits of the lowered tariffs for Philippine produce under RCEP. \nTereso O. Panga, director-general of the Philippine Economic Zone Authority (PEZA), said there has been an increase in investment approvals from some RCEP countries.\n\u201cThere has been a marked increase in our ecozone investment approvals this year from Australia and China, countries we consider in PEZA as non-traditional sources of economic zone (ecozone) FDI and exports,\u201d Mr. Panga said in a Viber message.\n\u201cClearly, we can attribute this trade and investment market diversification to the country\u2019s recent accession to RCEP,\u201d he added.\nPEZA reported that approved investments from Australia more than doubled to P772.82 million in the first 11 months while investments from China grew 65.8% to P1.28 billion during the period.\n\u201cWith the entry of more Chinese and Australian investors, we can expect these locators to be exporting their products and services back to their principal headquarters or to other RCEP member countries to take advantage of the lower trade barriers and improved market access from trading partners,\u201d Mr. Panga said.\nHe said that the increase in investment after the implementation of trade agreements was also seen in the case of European countries.\n\u201cWe see the same trend with the huge growth in ecozone FDI from EU member countries. In addition, we expect our ecozone exports to the EU to likewise achieve a significant increase given the latter\u2019s continued grant of GSP+ privileges to Philippine exporters,\u201d he said.\n\u201cWith PEZA accounting for more than 60% of the exports of goods and commodities, we are pursuing more locators seeking to avail of the benefits under RCEP and the proposed EU-Philippines FTA to grow their operations in the country,\u201d he added.\nIn the first 11 months, PEZA approved P16.56 billion in investments from EU member countries, sharply higher compared with the P2.44 billion in approvals a year earlier.\nPhilip Dupuis, head of trade for the EU Delegation to the Philippines, said the Philippines retains the potential to more fully utilize GSP+.\n\u201cUtilization by the Philippines\u2026 has been relatively good. I think we are utilizing two-thirds of the eligible exports, more or less, if I remember well, but it could be better,\u201d Mr. Dupuis said in a chance interview.\nHe said that it is important to determine whether exporters have an ingrained preference for trading with nearby or familiar markets.\n\u201cI think there is a lot of work for us to do in terms of making the European market better known, but the companies also need to inform themselves because all the materials are there,\u201d he said.\n\u201cObviously, if you are satisfied with your exports to Japan and the US, then you don\u2019t necessarily look at the EU market. But I think the potential is there; there is potential to grow for Philippine companies in Europe,\u201d he added.\nMr. Dupuis also said that the EU legislators are still looking to update the GSP+ scheme after the current deal\u2019s extension, as the EU Council and Parliament have yet to reach agreement on updating GSP rules.\nThe EU and the Philippines have also resumed talks for an FTA since the suspension of the negotiations in 2017. Negotiations were put on hold due to issues over intellectual property rights and data exclusivity, among others.\nThe two parties are expected to complete the initial phase of the negotiations by the end of December, which involves the identification of the chapters that would form part of the FTA.\nThe two first launched negotiations for an FTA in 2015.\nRizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that there is also a need to push the participation of micro, small, and medium enterprises (MSMEs) to further increase utilization of GSP+.\n\u201cSome MSMEs that are part of the export supply chain and ecosystem have yet to maximize the potential of GSP+,\u201d Mr. Ricafort said in a Viber message.\nHe added that supporting \u201conline businesses and transactions would also be able to maximize the economic benefits and potential of these FTAs, given their immense possibilities to expand export markets.\u201d\nMr. Ricafort said FTAs are helpful for effectively expanding the markets of Philippine exporters at much reduced cost, making them more competitively priced.\nHe said such trade deals also attract more investment, with investors from nearby countries using the Philippines as a stepping stone to access the benefits of preferential agreements such as GSP+.", "date_published": "2023-12-27T00:32:18+08:00", "date_modified": "2023-12-26T20:32:11+08:00", "authors": [ { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" } ], "author": { "name": "BusinessWorld", "url": "https://www.bworldonline.com/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/eda8ffc51ac7ec8b231b61b4c6a0d14e?s=512&d=mm&r=g" }, "image": "https://www.bworldonline.com/wp-content/uploads/2022/01/cargo-container-worker.jpg", "tags": [ "Featured2", "Justine Irish D. Tabile", "Editors' Picks", "One News", "Special Reports", "Top Stories" ], "summary": "EXPORTERS lack the knowledge to tap trade agreements and face a higher cost of doing business in the Philippines, rendering their products uncompetitive relative to other countries\u2019 exports, a business group said." } ] }