Philippines Update: May 10, 2018

Philippines Update | May 10, 2018
Authors: Riley Smith and Joyce Lin 
 
LOOKING AHEAD
 
 

May 14: ASEAN Presidents' Luncheon Series

May 29: PHAP Health for Juan and Juana Forum

May 31: Workshop on Investment Arbitration in ASEAN

May 31: Roundtable with Undersecretary Ceferino S. Rodolfo, Philippines Department of Trade and Industry

THE COUNCIL'S TAKE
 
 

Balikatan 2018 reaffirms strong U.S.-Philippines military ties

The 34th iteration of Balikatan, the largest annual U.S.-Philippine military exercise, commenced on May 7 and will run until May 18 at various locations throughout Luzon. Larger in both size and scope than last year's exercise, Balikatan 2018 reaffirms the strong defense ties between the United States and the Philippines, despite concerns that Philippine President Rodrigo Duterte would continue to try to scale back the military relationship amid his attempts to reorient Philippine foreign policy more towards China. 

Since Duterte took office at the end of June 2016, analysts have looked at Balikatan as an indirect metric for the health of broader U.S.-Philippines relations, given the strong, long-standing military ties between the two countries. Duterte's efforts to scale down the size and scope of the annual exercise in 2017, while also threatening on multiple occasions to rip up the 2014 Enhanced Defense Cooperation Agreement, the latest in a string of U.S.-Philippines Defense Treaties intended to progressively deepen security ties, reinforced this perception. From this perspective, Balikatan 2018 marks a noticeable improvement due to an overall increase in the number of U.S. and Philippine soldiers participating in the exercise and the types of activities comprising it. Unlike last year, where humanitarian assistance and disaster relief (HADR) and counterterrorism where the main focus, this year's exercise emphasize interoperability training and mutual defense operations. Counterterrorism will once again be a focus of Balikatan, but unlike in previous years the focus will be on military operations in urban areas, a consequence of the 5-month-long Islamic State-linked siege in Marawi city last year. With more than 8,000 combined troops participating, an increase from the 5,500 combined troops last year, this year's Balikatan is slated to be the largest military exercise under the Duterte administration thus far. 

Looking forward, joint counterterrorism efforts will continue to be a key driver in U.S.-Philippines defense cooperation. While U.S. forces reportedly were not engaged in combat during the siege of Marawi, the United States did provide intelligence support, including the use of two new military surveillance aircraft, and urban warfare training to Armed Forces of the Philippines troops participating in combat operations. In September 2017, the two governments participated in a Counterterrorism Crisis Response Drill to test and improve the ability of both nations to rapidly plan, coordinate and conduct counterterrorism operations. In the same month, the United States also upgraded its Operation Pacific Eagle mission in the Philippines to an Overseas Contingency Operation, with a focus on fighting extremist groups. 

President Duterte appoints new Secretary of Tourism

On May 8, Philippine President Rodrigo Duterte named Bernadette Romulo-Puyat, Undersecretary for Administration, Agribusiness and Marketing, and Regional Engagement at the Department of Agriculture (DA) as the next Secretary of Tourism following the resignation of former Secretary of Tourism Wanda Teo. Secretary Teo resigned from her position amid controversy over a P60-million (US$1.2 million) advertisement placement by the Department of Tourism during a television show featuring her two brothers. A veteran of three different administrations, Puyat has been DA Undersecretary since July 2017. Previously, she was Undersecretary for Special Concerns at DA under President Benigno Aquino III and served as a consultant on President Gloria Macapagal Arroyo's Presidential Management Staff. Aside from insisting that she plans to maintain her corruption-free record as Secretary of Tourism, details on the direction that Puyat hopes to take the Department are unclear. However, several senators have already voiced their support for her appointment, saying that they hope that she brings her experience in farm tourism and ecotourism to bolstering the Philippines' rural development programs. Puyat's appointment papers have yet to be finalized, so she will continue her duties as DA Undersecretary in the meantime.

Bureau of Customs releases Memorandum Order on accreditation of customs brokers

On May 2, the Bureau of Customs (BOC) published Memorandum Order 5-2018 online. The memorandum provides the implementing rules for the accreditation of importers and customs brokers. BOC had previously released requirements for accreditation of customs brokers in March 2018. The release of the requirements and subsequent Memorandum Order follow the issuing of a Department Order in February by the Department of Finance (DOF), which reverts the authority to accredit and register customs brokers and importers from the Bureau of Internal Revenue (BIR) to BOC to simplify processes. The BOC Memorandum Order will take effect on May 17. Previously the accreditation process included securing a BIR-Importers Clearance Certificate (BIR-ICC) or BIR-Customs Broker Clearance Certificate (BIR-BCC) from BIR under BIR guidelines. The next step would then be to secure a Certificate of Accreditation or Certificate of Registration from BOC. Since March 2018, the BIR has stopped accepting applications for Importers Clearance Certificates and Brokers Clearance Certificates. The DOF Department Order still requires BOC to transmit to BIR on a quarterly basis the list of approved and accredited customs brokers and importers for post-accreditation validation of tax compliance.

Bureau of Internal Revenue issues revised guidelines for conversion of Tax Credit Certificates

On May 3, the Bureau of Internal Revenue released Reference Memorandum Order 20-2018, which prescribes the revised policies and procedures on the processing of Tax Credit Certificates (TCC) for cash conversion. The original policies and guidelines on cash conversion of TCCs were outlined in Revenue Memorandum Order 38-2014. A Tax Credit Certificate serves as proof of a company's claim for tax credits, which are granted either to exporting firms that are entitled to duty-free privileges or to those that have tax refunds. The revised policies state that all requests for cash conversion of TCCs should be filed with the office that originally processed or investigated the claim. Under the revised guidelines TCCs that are unused for five or more years cannot be converted into cash. The revised policies also outlined the scenarios under which no cash conversion shall be allowed for TCCs. 

 
ADVOCACY UPDATE
 
 
On May 2, the Meridian International Center and the US-ASEAN Business Council held a roundtable discussion on Developing Infrastructure for Economic Growth in the Philippines with a delegation from the Philippine Department of Transportation, Bases Conversion and Development Authority, Public-Private-Partnership Center of the Philippines. Notes on the discussion will be sent out at a later time. 
 
IN THIS UPDATE
 
 
Regional Affairs
China deploys cruise missiles on South China Sea outposts – reports
Philippines, Singapore firms ink $185.7 million business deals
Duterte's Singapore visit nets ₱9-B worth of investments

National Affairs
Why is Manila neglecting the Philippine-held islands in the Spratlys?: Inquirer
Tourism chief Wanda Teo resigns
Chief Justice Sereno goes back to work, to stay 'to the bitter end'
Tourism Secretary Wanda Tulfo-Teo resigns 'out of delicadeza'
Duterte, Filipino scientists off to Benham Rise this May
Gov't talking to CPP-NDF to resume peace negotiations
Trillanes seeks probe on South China Sea missile systems
Duterte inks EO on contractualization

Customs
BIR, Customs collections rise strongly in April | Philstar.com
BIR issues revised policies and guidelines for conversion of TCC
BOC releases implementing rules for accreditation of importers, brokers

Defense & Security
Philippines to launch first missile-firing assault vessels
House probe on China missiles sought
What Does a Bigger 2018 Balikatan Military Exercise Say About US-Philippines Alliance under Duterte?
Balikatan 2018: PH, U.S. hold drill amid China militarization of South China Sea
Philippines seeks multilateral approach to China missiles
Balikatan 2018 to focus on counterterrorism, mutual defense | Philstar.com

Economics
Spoiled by inflation, Philippine economy grows below target in Q1
IMF cautions Philippines on rising consumer prices
Economic growth picks up in Q1 -- poll
ESCAP keeps Philippine GDP growth projections
Nontraditional markets seen boosting PHL trade | BusinessMirror
2M visited PHL in Q1 | BusinessMirror
PSE eyes 8 initial public offerings this year
Palace: Policies in place vs debt trap, red tape | BusinessMirror
Philippines’ PMI improves in April
Gov’t eyes samurai bond offer by 2nd half
Peso may weaken against dollar due to strong US economic data
ADB has key role in PHL growth–experts | BusinessMirror
Duterte to approve ease of doing business bill | BusinessMirror

Energy
DOE defers global petroleum roadshows to 2nd half this year
DOE eyes tweaks in energy mix policy
Lopez Group readies partnerships for $1-billion LNG terminal

Financial Services
Philippines: Manila keen to join regional disaster insurance pool
Central bank likely to hike key rates
BSP goes cashless with PayMaya, GCash | Philstar.com
Philippines to link digital payments system with Singapore, Thailand

Food & Agriculture
ADB backs Duterte admin’s tack to end QR on rice
Agriculture cooperatives hope to help farmers rise up the value chain
DA’s Piñol sees better farm yield by year-end, amid slow Q1 growth
Failure of bidding to delay return of cheap rice to local markets
PH launches maiden Halal Export Development and Promotion Roadmap

Health & Life Sciences
DOH mulls extension of measles immunization drive in Mindanao
COA: Dengvaxia procurement skirted regulations
Duterte wants experts panel to probe Dengvaxia mess
PH ranks second in WHO list for deadly indoor pollution in Asia Pacific
Philhealth Oks free access to medical services by residents of 6 provinces in Visayas

ICT
Globe Telecom open to partnering with PLDT for cell tower firm
Duterte appoints DSWD, DICT acting secretaries
Manila, Cebu, Davao: Pilot cities for ASEAN Smart Cities Network

Infrastructure
TRAIN suspension to slow BBB, other critical projects | Philstar.com
Infrastructure projects to gain from National ID System
Megawide-GMR to bid for Clark airport’s O&M
‘Golden Age of Infrastructure’ not possible sans PPP Act 
Neda awaits DOTr okay of airport rehab project | BusinessMirror
Taiwan eyes role in PH infra push

Manufacturing
Philippine factory growth second-best in ASEAN
Philippines manufacturing growth picks up in April
 
ARTICLE CLIPS
 
 
Regional Affairs

China deploys cruise missiles on South China Sea outposts – reports the Guardian 3rd May 2018
China has installed cruise missiles and surface-to-air missile systems on three of its outposts in the disputed waters of the South China Sea, according to reports.The US news network CNBC reported that the YJ-12B cruise missiles could target ships within a radius of 295 nautical miles and the HQ-9B long-range surface-to-air missiles could strike within 160 miles, citing sources with knowledge of US intelligence reports. The move, if confirmed, would mark the first Chinese missile deployments in the Spratly islands, where several Asian countries including Vietnam and Taiwan have rival claims. CNBC quoted unnamed sources as saying that according to US intelligence assessments, the missiles had been moved to Fiery Cross Reef, Subi Reef and Mischief Reef within the past 30 days.China has made no mention of any missile deployments but says its military facilities in the Spratlys are purely defensive, and that it can do what it likes on its own territory.

Philippines, Singapore firms ink $185.7 million business deals philstar.com 29th Apr 2018
Philippine and Singapore firms have signed $185.7 million worth of investment agreements that will provide some 1,920 job opportunities once these projects push through. The Department of Trade and Industry (DTI) reported yesterday that the Philippines continues to be an investment destination for Singaporean companies, with 10 agreements signed at the sidelines of the 32nd Association of Southeast Asian Nations (ASEAN) Summit in Singapore yesterday.

Duterte's Singapore visit nets ₱9-B worth of investments cnn 28th Apr 2018
Around $185.7 million, or approximately ₱9 billion, worth of investment agreements with Singaporean companies were signed on the sidelines of the Association of Southeast Asian Nations (ASEAN) Summit in Singapore Saturday. President Rodrigo Duterte and members of his Cabinet witnessed the signing of six memoranda of understanding (MOU) at the Ritz-Carlton Millenia Singapore hotel.

National Affairs

Why is Manila neglecting the Philippine-held islands in the Spratlys?: Inquirer The Straits Times 10th May 2018
President Duterte has a standard response to critics who point out that despite the government's deferential stance toward China, it has virtually taken over several reefs and islets within the Philippines' exclusive economic zone, blithely putting up massive military bases, and even surface-to-air missile systems (SAMS) on three Philippine reefs - Kagitingan (Fiery Cross), Zamora (Subi) and Panganiban (Mischief). But those islands and reefs have been there all this time, Mr Duterte would protest. Why blame him for China's transgressions in unprotected territory when past administrations had failed to do something to protect them, he would add. He may have a point. Territorial dispute with our Asian neighbours over the Spratly and the Kalayaan islands has vexed past administrations as far back as the '60s, but nothing much had been done to fortify our claim and protect our stakes. At least not until the Aquino administration filed a case before the Permanent Court of Arbitration in The Hague questioning China's conflicting claim in the West Philippine Sea.

Tourism chief Wanda Teo resigns Rappler 10th May 2018
Tourism Secretary Wanda Teo has resigned from her post, Malacañang confirmed on Tuesday, May 8. Presidential Spokesperson Harry Roque said in a news briefing that Executive Secretary Salvador Medialdea confirmed that the latter received Teo's letter of resignation on Monday, May 7, prior to the Cabinet meeting. Roque later announced that President Rodrigo Duterte accepted Teo's resignation. Duterte had a long private conversation with Teo late Monday night, after the Cabinet meeting, in the face of calls for her resignation.

Chief Justice Sereno goes back to work, to stay 'to the bitter end' cnn 9th May 2018
Chief Justice Maria Lourdes Sereno was all smiles as she went back to work Wednesday, two months after taking an indefinite leave at the request of her fellow magistrates. Sereno's camp shared a photo of the embattled chief justice doing paper work on her first day back in her office. She went out of the Supreme Court building on Padre Faura Street in Manila at around 11 a.m. and waved at the crowd of mostly supporters and members of the media. "She's smiling, happy to be back," said lawyer Jojo Lacanilao, one of Sereno's spokespersons.

Tourism Secretary Wanda Tulfo-Teo resigns 'out of delicadeza' cnn 8th May 2018
President Rodrigo Duterte accepted the resignation of Tourism Secretary Wanda Tulfo-Teoon Tuesday. Teo handed in her resignation letter to Executive Secretary Salvador Medialdea Monday in the wake of the ₱60-million tourism advertising deal between the government network and the television program of her brothers. This was hours before her one-on-one meeting with President Rodrigo Duterte after the Cabinet meeting in Malacañan Palace.Presidential Spokesperson Harry Roque told CNN Philippines it seemed like a "very serious discussion," but said he was not privy to what they talked about.

Duterte, Filipino scientists off to Benham Rise this May cnn 8th May 2018
President Rodrigo Duterte will go to Benham Rise this month with 50 Filipino scientists who will conduct research in the vast undersea region, the Palace said Tuesday. Duterte's visit is set on May 15-16 to commemorate the renaming of Benham Rise to Philippine Rise, Presidential Spokesperson Harry Roque said in a press briefing. On May 16 last year, Duterte signed an executive order formalizing the change of nameafter Chinese survey ships were spotted in the area two months earlier. Benham Rise is an undersea plateau covering 13 million hectares some 135 miles off the coast of Aurora province. The United Nations has recognized it as part of the country's extended continental shelf  over which the Philippines has sole sovereign rights. In April, Duterte said he would visit the area to assert the country's rights.

Gov't talking to CPP-NDF to resume peace negotiations cnn 8th May 2018
Representatives of the government and communist rebels are holding talks for the possible resumption of peace negotiations, six months after President Rodrigo Duterte walked away from the talks. The Office of the Presidential Adviser on the Peace Process in a statement on Tuesday confirmed that "informal back channel talks" are now taking place in Europe, but did not specify the place. "Our team is now in Europe and we are informed that there are initial positive results so far," said Presidential Adviser on the Peace Process Jesus Dureza. Government Peace Panel Chairman Silvestre Bello III said the team is determined to meet the deadline set by the President. On April 5, Duterte announced the government and the Communist Party of the Philippines (CPP) and its political wing, the National Democratic Front (NDF), have 60 days to restart the talks.

Trillanes seeks probe on South China Sea missile systems cnn 7th May 2018
Senator Sonny Trillanes on Monday called for an investigation into the reported missile systems built by China on contested areas in the South China Sea. "While the Philippines has previously forged economic ties with China, the security and defense relationship is a separate matter," Trillanes said on Senate Resolution no. 722. "Thus, this alleged militarization of the West Philippine Sea is very alarming and it poses a big threat to the country's national defense and security." This resolution comes on the heels of a United States report on the missile systems, and China asserting its rightto build military structures on the Spratly islands. Philippine and United States forces began Monday their largest 'Balikatan' joint military exercises under President Rodrigo Duterte amid concerns about China's military build-up in the South China Sea. Officials, however, said the war drills were not directed at China and they were scheduled to take place regardless of the missle issue.

Duterte inks EO on contractualization BusinessWorld 2nd May 2018
PRESIDENT Rodrigo R. Duterte has signed the much-anticipated executive order (EO) on job contractualization, a leading and contentious issue since his 2016 presidential campaign. Mr. Duterte signed the order Tuesday morning at an event in Cebu City marking Labor Day and organized by the Department of Labor and Employment (DoLE) and other agencies. Malacañang, as of this reporting, has yet to release the EO, but Mr. Duterte in his speech said it includes a “prohibition against illegal contracting and subcontracting.”

Customs

BIR, Customs collections rise strongly in April | Philstar.com philstar.com 10th May 2018
Tax revenue from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) grew 13.47 percent and 43 percent, respectively in April, while government disbursement went up 40.69 percent, the Department of Finance (DOF) reported yesterday. Based on preliminary data from the Bureau of the Treasury (BTr), the BIR’s collection in April rose to P209.8 billion from P184.9 billion a year ago. The BOC, for its part, collected P46.9 billion, up 43 percent from the P32.8 billion it generated a year ago. Government disbursements also jumped 40.69 percent to P225.8 billion compared to the P160.5 billion reported in the same period in 2017. Economic managers attributed the increase in government revenue to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

BIR issues revised policies and guidelines for conversion of TCC philstar.com 7th May 2018
The Bureau of Internal Revenue (BIR) has issued revised policies and guidelines for the conversion of tax credit certificates (TCC) into cash refund. Internal Revenue commissioner Caesar Dulay issued Revenue Memorandum 20-2018, prescribing the new procedures on the processing of requests for cash conversion of TCCs, and updating the functions and responsibilities of offices involved in this process.

BOC releases implementing rules for accreditation of importers, brokers PortCalls Asia 2nd May 2018
The Bureau of Customs (BOC) has issued implementing rules for the accreditation of importers and customs brokers following the Department of Finance’s (DOF) directive returning the sole authority to accredit such entities to the BOC. Customs Memorandum Order (CMO) No. 05-2018, dated and signed on April 24 but published online on May 2, provides the requirements for new application and renewal of accreditation of importers and customs brokers.

Defense & Security

Philippines to launch first missile-firing assault vessels Washington Post 10th May 2018
The Philippine navy will deploy its first-ever missile-firing assault vessels in about three months, likely for territorial defense, anti-insurgency strikes and deterrence, but it remains “centuries” behind the naval might of Asian countries such as China, the navy chief said Thursday. Vice Admiral Robert Empedrad told a news conference that the navy also plans to acquire torpedoes, submarines and other major defense equipment under a modernization program to bolster the security of an archipelago with one of the world’s longest coastlines and to combat piracy and other cross-border crimes. The Israeli-made missiles, which have a range of 8 kilometers (5 miles), are being installed in three multipurpose attack vessels which were acquired earlier and will be ready for deployment in two to three months, he said.

House probe on China missiles sought ABS-CBN News 10th May 2018
House Committee on National Defense vice chair Ruffy Biazon has asked his colleagues to mount an inquiry into China's reported installation of missiles on artificial islands in the West Philippine Sea.  "This deployment of military assets no doubt [has] national security implications on the Philippines, a matter that should be taken seriously as a threat,” Biazon said in a statement released Thursday.  “A foreign military presence within our sovereign rights and sovereign territory, regardless of physical presence or projected capability to strike, should not be tolerated, especially if its presence is not upon invitation by the Philippines or covered by a mutual agreement or treaty," he added.  Biazon, in House Resolution 1856, called on the chamber to "conduct an inquiry on this reported military intrusion into our EEZ (exclusive economic zone ) and territory with the view of arriving at policy proposals or legislation to meet this challenge from a foreign power."  The West Philippine Sea covers the Philippines' EEZ within the disputed South China Sea. 

What Does a Bigger 2018 Balikatan Military Exercise Say About US-Philippines Alliance under Duterte? The Diplomat 10th May 2018
This week, the United States and the Philippines launched the 34th iteration of their biggest annual bilateral exercise known as Balikatan. Though only a few specifics have been released so far, initial indications are that this year’s iteration of the exercises has been scaled up relative to the previous year, mirroring the pattern we have witnessed in the broader bilateral defense relationship under Philippine President Rodrigo Duterte. As I have noted previously, despite initial uncertainties created for the U.S.-Philippine alliance during the Duterte era, defense ties between the two sides have actually not only been sustained in most areas, but even quietly expanded in some realms (See: “What Will US-Philippines Military Exercises Look Like in 2018?”). Though indications were that this would also be the case with respect to Balikatan as well, an actual assessment had to await specifics related to the exercise.

Balikatan 2018: PH, U.S. hold drill amid China militarization of South China Sea Rappler 10th May 2018
The Philippine and United States navies on Wednesday, May 9, held an amphibious landing exercise at the Naval Education and Training Command in Zambales amid growing concerns over China's militarization of the South China Sea. At 10 am on Wednesday, around a hundred Filipino and American troops stormed a stretch of the base's shore, over 200 kilometers from Panatag (Scarborough) Shoal which is being claimed by China. The drill was premised on a supposed threat in a nearby town, and the troops' mission was to secure it. True to the name of the exercises, Filipinos and Americans accomplished the mission and stood shoulder-to-shoulder in victory.

Philippines seeks multilateral approach to China missiles philstar.com 7th May 2018
The Philippines is seeking a multilateral approach, including the involvement of the United States and other western powers, in confronting the worsening security situation in the South China Sea following China’s deployment of missiles on artificial islands in the disputed waters, Foreign Affairs Secretary Alan Peter Cayetano said yesterday. Cayetano also strongly disputed criticisms that the Duterte administration was not doing enough to protest the deployment of anti-ship cruise missiles and surface-to-air missile systems on Fiery Cross (Kagitingan), Subi (Zamora) and Mischief (Panganiban) reefs in the last few weeks. “We are not ignoring the developments. What we’re saying is that (the situation in the South China Sea) cannot be resolved by the Philippines and China alone,” Cayetano told radio station dzBB in Filipino.

Balikatan 2018 to focus on counterterrorism, mutual defense | Philstar.com philstar.com 7th May 2018
The scenarios for this year's joint military exercises between Filipino and American troops will be based on mutual defense and counterterrorism. The Armed Forces of the Philippines and the United States Armed Forces have officially opened the annual Balikatan Exercises on Monday, which will run until May 18 Lt. Gen. Emmanuel Salamat, Philippines exercise director, noted that the annual joint military training manifests the longstanding relationship between Filipino and American forces.

Economics

Spoiled by inflation, Philippine economy grows below target in Q1 philstar.com 10th May 2018
The Philippine economy grew faster in the first three months of 2018, meeting market expectations although it missed the government’s target band for the year due to rising prices of key consumer items, the country’s statistics agency reported on Thursday. The country’s gross domestic product—or the value of all finished goods and services produced in the country—grew 6.8 percent in the first quarter, quicker than the downwardly revised 6.5 percent in the preceding three months and the 6.4 percent expansion rate in the comparable period last year. The latest growth pace matched market estimates, but settled near the low-end of the government’s 7-8 percent target range for 2018. Among the major economic sectors, industry recorded the fastest growth at 7.9 percent, followed by services at 7 percent. However, agriculture, which has historically contributed a tenth to the country’s GDP, expanded at a sluggish rate of 1.5 percent. Meanwhile, net exports worsened in the January-March period, adding risks to growth.

IMF cautions Philippines on rising consumer prices philstar.com 9th May 2018
Policymakers must closely monitor rising consumer prices, with Philippine inflation seen to keep going up to breach the central bank’s target, the International Monetary Fund said on Wednesday. “Inflation should remain within the target band... but the authorities will need to watch carefully for building inflation pressure, as well as rapid credit growth,” the IMF said in its latest Asia-Pacific regional economic outlook. The Duterte administration's tax reform law—which lowers personal income taxes while raising excise levies on fuel and cigarettes, among others—has been blamed for the recent jump in prices of widely used goods and services.

Economic growth picks up in Q1 -- poll BusinessWorld 8th May 2018
ECONOMISTS expect economic growth to pick up pace in the first quarter on the back of higher household and consumer spending that would largely offset the effects of inflation and the wider trade deficit. A BusinessWorld poll of 10 economists yielded a 6.8% median estimate of gross domestic product (GDP) growth for January-March 2018, faster than the revised 6.5% recorded in the first quarter of 2017. This puts the growth pace near the low-end of the government’s 7-8% target band for 2018. The Philippine Statistics Authority is scheduled to release the official GDP data on Thursday.

ESCAP keeps Philippine GDP growth projections BusinessWorld 8th May 2018
THE UNITED NATIONS’ (UN) regional development arm maintained its economic growth forecast for the Philippines this year, amid a stable outlook for the Asia-Pacific region. In its Economic and Social Survey of Asia and the Pacific 2018 report, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) said it expects the Philippine economy to grow 6.8% this year, steady from its December report. It also forecasts the economy to grow by 6.9% in 2019. This would be faster than the 6.7% gross domestic product (GDP) growth recorded in 2017, but below the government’s 7-8% target for 2018 until 2022. The World Bank and International Monetary Fund see lower 6.7% GDP growth for the Philippines this year, with the former forecasting it to grow the same pace in 2019. ESCAP’s Philippine economic growth forecast would also be above Southeast Asia’s average of 5.1% and 5.2% for 2018 and 2019, respectively, as well as developing Asia-Pacific’s 5.5% forecast for both years.

Nontraditional markets seen boosting PHL trade | BusinessMirror BusinessMirror 7th May 2018
For the Philippines, the policy is clear: take the road less traveled, even in trade. This was why both the government and the private sector agreed that, to diversify exports and improve the country’s trade activities, the nontraditional markets should be explored and utilized, as well. In a report, titled “Mainstreaming trade to attain the SDGs,” the World Trade Organization (WTO) advised developing countries and least-developed countries (LDCs), among others, to diversify their exports and keep up with the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs). The global trade regulator said trade diversification is of paramount importance for these countries given the changing environmental conditions.

2M visited PHL in Q1 | BusinessMirror BusinessMirror 7th May 2018
THE Department of Tourism (DOT) remains firm in its 1.5-million target for Chinese visitors this year despite the six-month closure of Boracay Island, a favorite destination of the market. This developed as the number of Chinese travelers to the Philippines grew by 54.43 percent to 371,429 in the first quarter of 2018, nipping closely at the heels of the South Koreans, whose arrivals grew by 8.22 percent to 477,087. “Our target for the Chinese arrivals this year remains at 1.5 million as we strive for more quality tourists who spend more in the country,” Tourism Secretary Wanda Corazon T. Teo said in a news statement, as she recalled the latest United Nations World Tourism Organization (UNWTO) Barometer, which ranked Chinese tourists as the world’s top tourism spenders in 2017.

PSE eyes 8 initial public offerings this year BusinessWorld 7th May 2018
THE PHILIPPINE Stock Exchange, Inc. (PSE) is aiming to double the number of initial public offerings (IPO) it had in 2017 for this year, a top official said over the weekend. PSE President and Chief Executive Officer Ramon S. Monzon said they target to have eight IPOs, even though no company has yet taken itself public so far this year.

Palace: Policies in place vs debt trap, red tape | BusinessMirror BusinessMirror 7th May 2018
MALACAÑANG on Monday insisted firm policies are in place against falling into a debt trap, as warned by a lender; and errant public officials. As if to emphasize, President Duterte also issued on Monday a deadline for a bureaucrat’s response to any request or inquiry from the public. In a news briefing, Presidential Spokesman Harry L. Roque Jr. pointed to the President’s policy on dealing with other states, and on dealing with public officials and their penchant for traveling abroad. Roque first cited Duterte’s independent foreign policy as helping the government realize its goals under the Chief Executive’s “Build, Build, Build” slogan. 

Philippines’ PMI improves in April BusinessWorld 2nd May 2018
Philippines’ manufacturing activity improved in April as output and new orders picked up the pace even as inflation remains elevated, according to an IHS Markit survey conducted for Nikkei. The Nikkei Philippines Manufacturing Purchasing Managers’ Index rose to 52.7 in April from 51.5 in March. “The latest reading was the highest for the year so far, signalling a robust improvement in the health of the sector. The headline PMI is a composite index designed to provide a snapshot of the health of the manufacturing sector each month,” Nikkei said in its report.

Gov’t eyes samurai bond offer by 2nd half BusinessWorld 2nd May 2018
THE Duterte government is looking to issue its first yen-denominated bonds by September or October, the Department of Finance (DoF) said. “We will still go ahead with the samurai (bonds)… Because the Japanese calendar is different, it should be around September or October, the latter half of the (Japanese) fiscal year ending March,” Finance Secretary Carlos G. Dominguez III told reporters on Thursday. National Treasurer Rosalia V. De Leon has said that the government is currently assessing the third currency exchange risk amid the strengthening of the dollar against the peso.

Peso may weaken against dollar due to strong US economic data BusinessWorld 2nd May 2018
THE PESO is seen to weaken against the dollar today following likely strong US reports, although this might be tempered by expectations of a rate hike from the local central bank. On Monday, the peso rose to a near three-month high against the greenback, closing the session at P51.74 following the upgraded credit outlook for the Philippines. Debt watcher S&P Global Ratings upgraded its credit outlook for the Philippines to “positive” from “stable” last week, hinting on better chances of a rating upgrade.

ADB has key role in PHL growth–experts | BusinessMirror BusinessMirror 2nd May 2018
HALF a century ago, the “forces working for cooperation and fraternity between nations” were never underestimated. Fifty-one years later, they remain so, as the Asian Development Bank’s (ADB) unique engagement with the Philippines didn’t stop at the location of the multilateral bank’s headquarters. It was in 1966, during the inauguration of the bank’s headquarters, that the late President Ferdinand E. Marcos saw “the beginning of a new era in the solidarity of the region.” Local experts believe that solidarity between the ADB and the Philippines helped the Southeast Asian nation become the “economic tiger” it is now by financing major projects.  Since the 1970s, ADB’s financing was mainly for infrastructure projects, former dean of the University of the Philippines School of Labor and Industrial Relations (Solair) Rene E. Ofreneo said.

Duterte to approve ease of doing business bill | BusinessMirror BusinessMirror 30th Apr 2018
President Duterte is expected to approve the bill streamlining doing business in the country this month, according to Trade  Undersecretary Rowel S. Barba. Barba said the bill pending the President’s signature for two months now is being reviewed by the Office of the Executive Secretary (OES). The OES, he added, is “asking for comments from different government agencies” regarding the provisions of the measure. Nonetheless, Barba said the proposed Ease of Doing Business and Efficient Government Service Delivery Act of 2018 is anticipated to be inked by Duterte this month. “Hopefully, it will be signed within the month [of May],” he said in a news briefing on Monday.

Energy

DOE defers global petroleum roadshows to 2nd half this year Manila Bulletin Business 5th May 2018
Due to the length of required preparations, the Department of Energy (DOE) has indicated that the roadshows on the country’s petroleum contracting will have to be deferred to second half, instead of having a June kick-off this year. Energy Undersecretary Donato D. Marcos, who is the lead official in the department’s energy resource development initiatives, noted that they will formally launch the fortified Philippine Conventional Energy Contracting Program (PCECP) first in the Philippines prior to them undertaking offshore investment promotions. “We will launch the PCECP first between mid-June this year to early July, …unfortunately, our targeted timeframes have already been overrun by events,” he said. For instance, he noted that the original target for a roadshow in the United States should have been May this year, “but that is no longer possible –  logistics and preparations wise.”

DOE eyes tweaks in energy mix policy BusinessMirror 1st May 2018
ENERGY Secretary Alfonso G. Cusi said a possible shift in energy mix policy is still under consideration and that extensive studies must be conducted before any changes are introduced. “It’s just being discussed. No harm there. If it’s possible, then we will look at it. We will study it first, of course,” Cusi said  in an interview when asked if the Department of Energy (DOE) was bent on revising the policy again. This after DOE Undersecretary Felix William B. Fuentebella announced earlier that the agency was looking at a shift of the energy mix to 50 percent baseload and 50 percent flexible plants.

Lopez Group readies partnerships for $1-billion LNG terminal philstar.com 10th May 2018
The Lopez Group plans to start developing its $1 billion liquefied natural gas (LNG) terminal in 2019 as it looks to close partnerships and engineering, procurement and construction (EPC) contracts within the year. In a briefing, First Gen Corp. president and COO Francis Giles Puno said the company has set a goal to finalize partnerships within the year. “Ideally, we’ll bring in maybe at least one foreign partner and potentially local partners as well. We don’t have to solely underwrite this. It’s an important infrastructure for the country,” Puno said. Puno said they are open to having a minority interest in the LNG terminal. First Gen also hopes to finalize the EPC contractor for the LNG terminal. The planned LNG terminal, which will have a capacity to supply a minimum five million tons of natural gas equivalent to 5,000 MW, will be located within the Lopez Group’s clean energy complex which houses the 1,000-MW Sta. Rita, 500-MW San Lorenzo, San Gabriel and 97-MW Avion gas plants.

Financial Services

Philippines: Manila keen to join regional disaster insurance pool Asia Insurance Review 9th May 2018
The Philippines is keen on the idea of joining a regional insurance pool to hedge against disasters in ASEAN. Insurance Commissioner Dennis B Funa said there is a possibility for the country to enter into the Southeast Asia Disaster Risk Insurance Facility (SEADRIF), which is aimed at providing climate and disaster risk-financing and insurance solutions to ASEAN member countries, according to a report by Business Mirror.

Central bank likely to hike key rates BusinessWorld 7th May 2018
THE BANGKO SENTRAL ng Pilipinas (BSP) may raise interest rates this week after nearly four years of staying on hold, with inflation hitting five-year highs and showing slim signs of slowing over the coming months, analysts said in a BusinessWorld poll. Nine of 11 economists tapped late last week expect the BSP’s Monetary Board to tighten its policy stance on Thursday, marking the first time in several years when bets for a rate hike stood almost certain. The central bank last raised key policy rates in September 2014, when inflation was trending above the 3-5% target that year. Benchmark rates currently range from 2.5-3.5% following some procedural adjustments introduced in June 2016.

BSP goes cashless with PayMaya, GCash | Philstar.com philstar.com 6th May 2018
PayMaya, the digital financial services arm of PLDT and Smart’s Voyager Innovations, said more than 2,000 employees  of the Bangko Sentral ng Pilipinas will experience the convenience and value of going digital in their transactions. “BSP employees no longer have to carry cash when paying in the BSP Employee Cooperative Store and the BSP canteen. All they need is their smartphone to scan the QR code displayed at cashier counters with their PayMaya app or pay by dipping or swiping their PayMaya card at the installed POS terminals,” PayMaya said.

Philippines to link digital payments system with Singapore, Thailand philstar.com 1st May 2018
The Philippines is set to link its digital payment system with those of other member countries of the Association of Southeast Asian Nations (ASEAN) as the Bangko Sentral ng Pilipinas (BSP) continues to roll out the National Retail Payments System (NRPS). BSP Governor Nestor Espenilla Jr. said the regulator is now looking at how to connect the country’s e-payment system with that of Singapore and Thailand after launching. “The more interesting prospect, potentially, is to link up the instant payment networks regionally. I learned that Singapore and Thailand is already conducting a pilot test,” Espenilla said.

Food & Agriculture

ADB backs Duterte admin’s tack to end QR on rice BusinessMirror 7th May 2018
Setting a tariff schedule on the country’s rice imports could lead to more stable international rice prices moving forward, according to the Asian Development Bank (ADB). In an interview at the sidelines of the recently concluded ADB Annual Meeting in Manila, ADB Philippines Country Director Kelly Bird told the BusinessMirror that the Manila-based multilateral development bank supports the government’s move to finally end its quantitative restrictions on rice. The Philippines is converting its QR on rice into a tariff schedule in compliance with commitments to the World Trade Organization (WTO).

Agriculture cooperatives hope to help farmers rise up the value chain BusinessWorld 7th May 2018
EXPECTED growth in the agricultural sector has highlighted the need for cooperatives to step into the gap when the government and banks fail to supply credit. Asian Farmers’ Association (AFA) Cooperative Development Program Director Cresente C. Paez noted that some savings and credit cooperatives are starting to expand their services to farmers. Mr. Paez said in the Philippines savings and credit cooperatives are the “strongest,” while agricultural cooperatives continue to lag.

DA’s Piñol sees better farm yield by year-end, amid slow Q1 growth BusinessMirror 7th May 2018
FARM output in the first three months was seen to pace some 1 percent slower due to seasonality and high base reference, with the crops subsector still leading the increment. Agriculture Secretary Emmanuel F. Piñol said he expects the value of agriculture production in the January-to-March period to post a “modest” growth amid higher prices of agricultural commodities. “We expect a modest growth in the first quarter for agriculture, especially since prices of agricultural commodities have really improved,” Piñol told reporters on Monday. “I always believe that profitability is the best motivation for productivity.”

Failure of bidding to delay return of cheap rice to local markets BusinessMirror 2nd May 2018
THERE were empty tables and chairs at the office of the National Food Authority (NFA) where it conducted its first bidding of the year for rice imports under the government-to-government (G2G) scheme on April 27. The venue was not jam-packed despite the fact that the NFA was under pressure to replenish its depleted stockpile, which fell to less than a day of the country’s total national rice consumption. The NFA had wanted to import rice earlier, but the government’s economic managers and the food agency’s highest policy-making body—the NFA Council (NFAC)—thumbed down the G2G scheme. They claimed that the procurement mode was “vulnerable” to corruption.

PH launches maiden Halal Export Development and Promotion Roadmap Manila Bulletin Business 29th Apr 2018
The government is set to unveil the comprehensive Philippine Halal Export Development and Promotion Strategic Road map as it holds the first-ever Philippine National Halal Conference on May 2 and 3 in Davao City. With the theme “Towards Making the Philippines a Respectable Player in the Global Halal Ecosystem,” the Department of Trade and Industry (DTI) will lead the Philippine Halal Export Development and Promotion Board, composed of nine other government agencies in the strengthening of the Philippine Halal industry.

Health & Life Sciences

DOH mulls extension of measles immunization drive in Mindanao Manila Bulletin News 10th May 2018
Anticipating tough days ahead due to the Dengvaxia controversy, the Department of Health (DOH) is considering this early to extend the ongoing mass supplemental immunization activity for measles and rubella in the entire Mindanao. Health Secretary Francisco Duque III said in a press conference here on Wednesday afternoon that he has ordered their regional offices in Mindanao to prepare for the extension of the initiative to ensure that they cover all eligible children. “My order is that, we should extend the period of the supplemental immunization activity because of the given obstacles brought about by the fear of Dengvaxia,” he said. Duque personally led the formal launching of the Mindanao-wide immunization activity for measles and rubella that will run until June 8. The agency is targeting to cover a total of 2.7 million eligible children aged six months to below five years-old within Mindanao’s six regions during the month-long campaign.

COA: Dengvaxia procurement skirted regulations cnn 9th May 2018
The Commission on Audit (COA) flagged the government-run children's hospital responsible for procuring the dengue vaccine Dengvaxia for violating regulations. In a 45-page report, auditors said the Philippine Children's Medical Center (PCMC) conducted pre-procurement activities for the P3 billion worth of  vaccines around a month before its memorandum of agreement (MOA) with the Department of Health (DOH). PCMC procured the vaccines under the term of former Health Secretary Janette Garin.

Duterte wants experts panel to probe Dengvaxia mess cnn 8th May 2018
With conflicting official reports on deaths allegedly caused by the dengue vaccine Dengvaxia, President Rodrigo Duterte has ordered the creation of an independent experts panel to look into the controversy. Presidential Spokesperson Harry Roque on Tuesday said Duterte wants experts – all from Asia – to look into the effect of the dengue vaccine administered to over 800,000 children. "The President, after much discussion, said that he will create a three-man panel of experts. He will be bound by the findings of this three-man experts on the issue whether or not Dengvaxia actually caused deaths," he said in a media briefing on Tuesday. The Public Attorney's Office (PAO) in February said there's a link between the deaths of 22 children IT autopsied and the dengue vaccine. On the other hand, the Philippine General Hospital's (PGH) Dengue Investigative Task Force has found that out of the 14 deaths investigated, only two deaths may be due to Dengvaxia failure.

PH ranks second in WHO list for deadly indoor pollution in Asia Pacific cnn 2nd May 2018
The Philippines is the Asia Pacific region's second deadliest country for household air pollution, according to the study of the World Health Organization (WHO). The Lao People's Democratic Republic is currently the deadliest country in Asia Pacific for household or indoor air pollution. Indoor air pollution, caused by cooking with kerosene and solid fuels such as wood in polluting stoves, open fires and lamps, has been linked to deaths among women and children. "Air pollution threatens us all, but the poorest and most marginalized people bear the brunt of the burden," said Dr. Tedros Adhanom Ghebreyesus, WHO Director-General. "If we don't take urgent action on air pollution, we will never come close to achieving sustainable development."

Philhealth Oks free access to medical services by residents of 6 provinces in Visayas Manila Bulletin News 27th Apr 2018
The Philippine Health Insurance Corporation (Philhealth) has approved a year-round free access to medical services to residents of six provinces in Eastern Visayas. Eastern Samar Rep. Ben Evardone initiated the appeal to Philhealth with the support of 13 congressmen representing Region 8. Philhealth agreed to waive fees for health insurance coverage after studying the appeal of the lawmakers who cited stormy weather in the Region 8 provinces as reason for seeking the assistance. In their appeal, the lawmakers cited heavy rains and devastating floods brought by Tropical Depressions Vinta and Urduja that struck Leyte-Samar provinces in December 2017, followed a month later by Typhoon Agaton that destroyed homes and livelihoods of people in the area.

ICT

Globe Telecom open to partnering with PLDT for cell tower firm Rappler 10th May 2018
The Ayala-led company says the creation of an independent cell tower firm would significantly reduce the time needed for a new player to roll out. Globe Telecom Incorporated is open to partnering with rival PLDT Incorporated for the proposed independent company that would build and deploy cellular towers in the Philippines. "We've always been open to sharing. We are not into that – exclusivity. We like the open market. We think it benefits both of us. The cost [of deploying more cellular towers] will be lower," Globe president and chief executive officer Ernest Cu told reporters on the sidelines of a media briefing in Taguig City on Monday, May 7. PLDT officials were sought for comment but they could not be reached as of posting. (READ: Globe wish list for Duterte: Submarine cables, less red tape)

Duterte appoints DSWD, DICT acting secretaries cnn 10th May 2018
President Rodrigo Duterte has appointed acting secretaries at the Department of Social Welfare and Development (DWSD) and the Department of Information and Communications Technology (DICT). Virginia Nazarrea Orogo is the new acting DSWD head, while Eliseo Mijares Rio, Jr was named acting DICT Chief. Duterte signed the appointment papers on Tuesday and was sent to the media by Malacañang on Thursday. Rio was named DICT officer in charge in October 2017 after Secretary Rodolfo Salalima was asked by Duterte to resign in September for allegedly favoring a certain internet company to enter the Philippine market.

Manila, Cebu, Davao: Pilot cities for ASEAN Smart Cities Network Manila Bulletin News 28th Apr 2018
Manila, Cebu and Davao were among the 26 cities in the Southeast Asian region chosen to serve as pilot cities for the ASEAN Smart Cities Network (ASCN). In the Concept Note of the ASEAN Smart Cities Network released Saturday, the three Philippine cities are said to be one of the pilot cities that will work towards the common goal of smart and sustainable development. Based on the outcome document, ASEAN countries recognize that technological and digital solutions can be utilized to resolve the implications of rapid urbanization such as city congestion, water and air quality, poverty, rising inequalities, urban-rural divide, and citizen security and safety.

Infrastructure

TRAIN suspension to slow BBB, other critical projects | Philstar.com philstar.com 11th May 2018
The proposed suspension of the tax reform law could slow down the implementation of the administration’s massive infrastructure program and affect other key projects of the government, Finance Secretary Carlos Dominguez said yesterday. In a text message, Dominguez said the Senate’s proposal to suspend the Tax Reform for Acceleration and Inclusion (TRAIN) Law could affect the government’s ability to fund its infrastructure and social programs.“Suspension of the tax reform program will certainly tend to slow down the Build Build Build program and negatively affect the government’s ability to fund the free tuition fee program, as well as increase in salaries of the police and the military,” Dominguez said. .

Infrastructure projects to gain from National ID System philstar.com 8th May 2018
The savings from a more efficient delivery of public services with the implementation of a national identification system would help boost funding for vital government projects and programs, according to Philippine Statistics Authority head Lisa Bersales. Bersales said the government could save an amount equivalent to two percent of the country’s gross domestic product (GDP) over a five-year period with the implementation of the National ID system. The National ID System could help plug leakages from social protection programs of the government, including conditional cash transfers (CCT), unconditional cash transfers (UCCs), and benefits for senior citizens,  Bersales said.

Megawide-GMR to bid for Clark airport’s O&M BusinessWorld 7th May 2018
The consortium of Megawide Construction Corp. and India’s GMR Infrastructure Ltd. is joining the bidding for the operations and maintenance (O&M) contract for the Clark International Airport in Pampanga. Interested parties can purchase the bid documents for the project starting today. “Megawide-GMR intends to participate in the bid for Clark O&M. We will carefully study the terms and qualifications set by the Bases Conversion and Development Authority,” the consortium said in a statement.

‘Golden Age of Infrastructure’ not possible sans PPP Act  BusinessMirror 5th May 2018
RELYING on government funds and foreign assistance could never be enough to solve the perennial crisis in infrastructure in the Philippines. Experts say without the necessary legislation to fund and force agencies to implement public-private partnership (PPP) deals, it will be close to impossible for the country to achieve the so-called Golden Age of Infrastructure.  Urging the government to fast-track policies on infrastructure buildup with the help of the private sector, former PPP Center Executive Director Andre C. Palacios said the key legislation that will help hasten the development of much-needed facilities in the Philippines should be passed sooner. The particular bill—still pending before both houses of Congress—is called the PPP Act, which, in a nutshell, amends the decades-old Build-Operate-Transfer (BOT) Law to make it more relevant to the needs of the times. 

Neda awaits DOTr okay of airport rehab project | BusinessMirror BusinessMirror 30th Apr 2018
The National Economic and Development Authority (Neda) said on Monday that the interagency Investment Coordination Committee (ICC) could not yet proceed with the evaluation of the Ninoy Aquino International Airport (Naia) rehabilitation project. Neda Undersecretary for Investment Programming Rolando G. Tungpalan told the BusinessMirror that the Department of Transportation (DOTr) has yet to grant the “original proponent status” to a firm that will undertake the rehabilitation of the Naia. The grant of OPS is needed before the ICC can start reviewing the project.

Taiwan eyes role in PH infra push Inquirer 30th Apr 2018
President Rodrigo Duterte may have heavily relied on mainland China for support for his “Build, Build, Build” program, but Taiwan also wants to take part in the massive infrastructure push. The Taiwan Economic and Cultural Office, which acts as its de facto embassy, has approached several Philippine government agencies to “find out exactly what the Philippines needs.”This was disclosed by Peter Shih, who negotiates with the Philippines for the Office of Trade Negotiations, to eight journalists from Indo-Pacific countries who were invited to Taiwan last week.

Manufacturing

Philippine factory growth second-best in ASEAN BusinessWorld 8th May 2018
THE PHILIPPINES’ manufacturing activity improved last month but tied with Vietnam to take the second rank below Myanmar, according to an IHS Markit survey conducted for Nikkei. The country logged a 52.7 Purchasing Managers Index (PMI) in April, a “solid increase” from the 51.5 recorded in March, to tie with Vietnam. It was also above the 51 PMI average of seven select Association of Southeast Asian Nations (ASEAN) member-states, which was the highest level in a year, from 50.1 in the previous month. Myanmar however had the highest reading that month at a “sharp increase” to 55.5. Both Indonesia and Singapore meanwhile saw a “modest increase” to 51.6 and 51.1 to rank third and fourth, respectively.

Philippines manufacturing growth picks up in April Nikkei Asian Review 2nd May 2018
The Philippines' manufacturing sector posted another uptick in growth in April as orders increased from both domestic and overseas markets, according to an industry survey. The Nikkei Philippines Manufacturing Purchasing Managers' Index, or PMI, rose from 51.5 in March to 52.7 in April, the highest measure so far this year. A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction. "First quarter manufacturing expansion was affected by the January rollout of the new excise taxes, but April data suggests that demand has since adjusted to these higher levels" said Bernard Aw, economist at IHS Markit, which compiles the survey.