Philippines Update: December 12, 2019

Philippines Update | December 12, 2019
Authors: Kim Yaeger, Lilibeth Almonte-Arbez, and Aree Tomes
 
LOOKING AHEAD
 
 

January 14-16: 2020 Business Mission to the 23rd Meeting of ASEAN Tourism Ministers (M-ATM) The 23rd Meeting of ASEAN Tourism Ministers will be held in Brunei Darussalam from January 14-16. For more information, please contact Steven Gunawan (sgunawan@usasean.org) and Lilibeth Almonte-Arbez (lalmonte@usasean.org).

January 16: Meeting of the Singapore Joint Cyber Security Working Group The goal of the Joint Cyber Security Working Group is to improve ASEAN cyber security practices and develop the cyber security ecosystem. Click here to register and for more information, please contact Jamie Lim (jlim@usasean.org).

 
THE COUNCIL'S TAKE
 
 

Philippines Government Maintains Strong Interest in Pursuing FTA with the U.S. 

The anticipation of a bilateral free trade agreement (FTA) between the Philippines and the United States began after President Trump and President Duterte issued a joint statement in November 2017 mentioning a potential FTA. When U.S. Secretary of State Mike Pompeo met with Foreign Affairs Secretary Teodoro Locsin during a closed-door meeting in March 2019, "they agreed to deepen and expand our bilateral economic relations, including pursuing negotiations for a future Free Trade Agreement". According to Philippine Trade and Industry Secretary Ramon M, Lopez, the Philippines is “waiting for timing from the US side” until after the United States ratifies the United States-Mexico-Canada Agreement (USMCA). The ongoing preparations for discussion are on standby until most likely 2020.

During a press conference in Makati City on December 4, Philippine Trade and Industry Secretary Ramon M. Lopez shared the Philippines’ eagerness to partner with the United States in conducting higher level discussions regarding a bilateral FTA. Under the FTA, the Philippines wishes for all Philippine products listed under the US-Generalized System of Preferences (US-GSP) to be covered. The Philippines also requests that the United States includes more sectors like leather goods and garments. In addition to boosting Philippine exports to the United States, Lopez noted the prospects of an FTA for U.S. business expansion in the Philippines.

The two countries agree that an FTA would benefit both countries as trade between the Philippines and the United States has grown by more than 25% over the past decade. Although the Philippines seeks to begin negotiations by next year, the United States still has control over the timeline of the potential agreement. The United States has planned trade agreements with United Kingdom and Vietnam and it is unclear where the Philippines sits in the order of priority. Many business groups including the US-ASEAN Business Council have expressed strong support for a US-Philippines FTA.

Philippine Central Bank launches digital payments platform with national QR code underway

Bangko Sentral ng Pilipinas (BSP) made great strides in its digital transformation program with the announcement of two new digital payment platforms. During the launch of the Government e-Payments (eGov Pay) Facility and the National QR Code Standard (QR Ph) on November 20, BSP Governor Benjamin Diokno said the Philippines will be “cash-lite” by 2023. With one third of all financial transactions being digitally processed, Diokno shared the BSP’s updated target of capturing 30% of total payments electronically in 2020.

The EGov Pay facility officially launched in August 2019 following a successful pilot with the Bureau of Internal Revenue and the Department of Trade and Industry. The facility serves as a platform for citizens to complete financial transactions directly with government agencies using a portal operated by the Lank Bank of the Philippines. Customers also have the choice to pay their taxes or other government fees with deposit or electronic money accounts using PESONet. The EGov Pay facility further assists users in identifying payment errors previously experienced with cash payments through efficient collection means, better audit trail, and enhanced transparency. With the facility fully launched, more agencies are expected to onboard. Government agencies including five city governments, one local government, and the Philippine National Police have already shown interest.

Following the launch of the EGov Pay facility, the pilot launch of QR Ph transpired where 6 participants demonstrated the efficiency  of scanning a QR code to transfer funds. The pilot proved QR codes to be both secure and easy, aligning with BSP objectives of establishing a digital economy. QR or “Quick Response” codes are increasing in popularity due to their feasibility and relatively low cost and are even being considered replacements for traditional debit and credit cards. To restructure previous QR-driven payment services, the central bank provided BSP Circular No. 1055 which requires all banks and financial technology firms to embrace the national QR code standard. The reinvented standard eliminates barriers to giving and receiving payments while welcoming micro and small enterprises into the market.

The Philippines is currently very cash-heavy in comparison to countries such as Singapore who introduced its own unified payment QR code last year. Diokno and the BSP are confident in the two new initiatives’ ability to accelerate the country’s digital economy with Diokno proclaiming the country “will have 100-percent [eGov Pay] coverage” within the next four years.

Environmentalists respond to energy firms pushing for coal expansion

Four of the Philippines’ largest energy conglomerates, including Meralco PowerGen Corporation, San Miguel Corporation, Aboitiz, and DMCI Holdings, are tapping into the use of fossil fuel to meet the Philippines' energy demands. The environmental advocacy group Greenpeace, raised concerns that the firms are in the process of increasing their coal portfolios which have the potential to double the Philippine’s coal capacity in the next two to six years. Energy companies say the reason for the perpetuation of coal-burning is “pro-coal government incentives” that encourage suppliers to provide reliable energy at the lowest cost. 

Under the 2016- 2030 Philippine Energy Plan coal supply will increase by 6.2% annually if the proposed power plants are approved. Khevin Yu, Greenpeace campaigner, worries that if these coal-fired plants are implemented within the next five years, coal will account for three fourths of the country’s total energy mix.

Greenpeace continues to urge the companies to end their pursuits of expanding coal plants and to instead consider existing capacity and look to renewable energy. The advocacy group is seeking support from Philippine government on the issue. President Duterte’s administration and the Department of Energy have yet to comment but energy companies are insisting that coal is necessary for where the country is in terms of its energy development.  Joe Zaldarriaga, spokesperson for Meraclo PowerGen Corporation, noted the difficulties in adopting renewable energy because of its dependence on subsidies from consumers and government mandates while San Miguel spokesperson, Mary Jane Llanes said coal “is what [the Philippines needs] now to meet the energy needs of the nation.” However, Gerry Arances from the Center for Energy, Ecology, and Development, a non-government research institution, believes solar and wind power are reliable alternatives as they already supply energy in the Philippines. In July 2019, the Philippines’ Department of Energy committed to swiftly implementing two renewable energy policies to address the country’s dependence on coal but the timeframe for when they will go into effect remains uncertain.

 
IN THIS UPDATE
 
 
Regional Affairs
ADB launches $50 million financing for broadband in remote islands

National Affairs
No employer application to skip 13th-month payment yet–DOLE | Samuel P. Medenilla
Yujuico elected new PCCI head
PH lowest in reading comprehension
Palace targets parties behind water contracts
PHL lags in global education survey
Villar says PH schools need to be ranked, incentivised to address reading comprehension problem
Congress break stalls CITIRA bill passage – DOF
World Bank loans Philippines $300 million for conditional cash transfers
Philippine-US FTA could come ‘as late as 2021’
Meet the future of Philippine space exploration
Thousands Evacuated as Typhoon Kammuri Nears the Philippines
Gov’t pushes reform agenda

ASEAN
SEC, PSE cite issues with SME Exchange bill on listed firms’ regulation | BusinessWorld

Banking
PHL banks to weather lower rates, trade war | BusinessWorld

Customs
DTI sets Feb. deadline for Thailand to comply with WTO tobacco ruling

Defense & Security
What Do the Philippines’ New Cobra Helicopters Mean for Its Military?
Lorenzana-recommends-lifting-martial-law-Mindanao
DND boosts cybersecurity awareness

Economics
DBM sets P4.64-trillion 2021 budget | BusinessWorld
Congress ratifies national budget for next year | BusinessWorld
Planners cut economic projections further | BusinessWorld
PHL trade deficit widens to $3.25 billion in October from $3.04 billion in September–PSA | Cai Ordinario
Philippines first in Asia for World Bank’s catastrophe-linked bonds
Inflation picks up to 1.3% in Nov.
Q4 GDP seen hitting 6.6%
PHL firms outlook: fewer new hires, pay hike for staff
Peso may strengthen vs dollar on remittances, inflation data
Reinventing Corporate Philippines

Energy
Group urges ERC to cite Meralco for alleged ‘abuse of market power’ | Lenie Lectura
PSALM to study privatization options for hydro plants
Oil companies set to hike prices this week
DOE partners with Japan for clean energy initiative suitable for ASEAN
China could 'turn off power' in the Philippines
Big energy firms driving coal expansion in the Philippines
Philippines DOE considering stable pricing system for renewable energy
How the Philippines can lead in floating solar technology in Asia
Philippines' PXP eyes Malampaya facilities for South China Sea gas project
Malaysian firm eyes waste-to-energy PHL projects
China can shut off the Philippines' power grid at any time, leaked report warns

Financial Services
ADB approves $400-million loan to cut youth unemployment
PHL banking system will keep doing well
BoI investments top P1 trillion as of Oct.
Philippines launches e-payment systems en route to be cash-lite
Fintech firm believes tech is key to financial inclusion | VG Cabuag
Financial inclusion will help all citizens reap the rewards of Philippine growth
Philippines central bank launches digital payments platform
BSP sees double-digit money supply growth

Food & Agriculture
Philippines eyes more galunggong imports
Villar says P3 billion realignment in 2020 national budget to assist local rice farmers
Rethinking the sugar industry direction
PH tightens rules on rice imports
Corruption pulls down PHL in food security list
CONFED forwards proposals to address sugar industry challenges | BusinessWorld
Palay production crisis: A battle of development frameworks
Senate urges gov't not to pursue sugar liberalization
Rice, free trade and trade wars –

Health & Life Sciences
Taxing single-use plastic bags needs careful study
Rodrigo Duterte Calls for Ban on Public Vaping in the Philippines
DOH now favors regulation of vapes, e-cigs
DOH ranks 2nd in pulse Asia's Ulat Ng Bayan survey
Lawmakers question government’s readiness to implement UHC Law
PhilHealth implements new premium rates in line with UHC
When antibiotics fail

ICT
Philippines' 'fake news' farms thrive due to politicians, industry players — report
3rd telco takes BOI pledges to P1T mark
A data-driven Philippines for 2020
Internet innovations key to a stronger and more connected Philippines
Philippines and BCB Blockchain to Work Together on Smart Cities
Bolstering digital transactions in PH through QR Ph
First PH cybersecurity academy launched
IR 4.0: The challenge of being myopic

Infrastructure
SMC seeks MRT-3 extension to Bocaue, Bulacan
DoTr eyes Swiss challenge for Bohol airport O&M by Q1
Dominguez, Pernia due in Tokyo to discuss progress of key Japan-backed infrastructure projects
Duterte creates Philippine Railways Institute
Duterte okays NAIA rehab project
Duterte taps more companies as he reboots Philippine infrastructure program

Legislation
Impact of moves vs water firms flagged | BusinessWorld
ICC junks Morales, del Rosario complaint vs China’s Xi Jinping
Duterte won’t pay P7-B compensation to Manila Water
House panel starts tackling bills regulating vaping
Congress leaders: 2020 budget bill OK next week
AMLC pushes for changes in RA 9160, 9372

Manufacturing
Campi, TMA: Strong finish for automotive industry despite missed overall sales goal | Elijah Felice Rosales
P30B required to boost manufacturing sector: DTI

Travel & Tourism
DoT positioning Western Visayas for food tourism | BusinessWorld
Philippine Airlines expands to Perth Australia.
 
ARTICLE CLIPS
 
 
Regional Affairs

ADB launches $50 million financing for broadband in remote islands philstar.com 3rd Dec 2019
MANILA, Philippines — The Asian Development Bank (ADB) has signed its first satellite financing agreement worth $50 million that will bring affordable broadband to countries such as the Philippines and Indonesia. In a statement, ADB said it signed the agreement with Kacific Broadband Satellites International Ltd. (Kacific) to provide affordable satellite-based, high-speed broadband internet connections to countries in Asia and the Pacific, especially in remote areas of small island nations in the Pacific and larger island nations like Indonesia and the Philippines. The Asia-Pacific Remote Broadband Internet Satellite Project aims to help make broadband internet connections more widely available to countries in the region, where more than two billion people do not have reliable internet access due to inadequate infrastructure, geographical challenges, and the high cost of services.

National Affairs

No employer application to skip 13th-month payment yet–DOLE | Samuel P. Medenilla BusinessMirror 12th Dec 2019
Despite recent disasters that hit some parts of the country, the Department of Labor and Employment (DOLE) has yet to receive any application for exemption from the payment of 13th- month pay for workers. In an interview on Wednesday, Labor Secretary Silvestre H. Bello III said this could be an indication that even calamity-stricken companies are paying their employees the monetary benefit mandated by Presidential Decree  851.

Yujuico elected new PCCI head philstar.com 9th Dec 2019
Former ambassador Benedicto Yujuico has been elected as the new president of the Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization. He was unanimously elected by the incoming 20-member board of directors during the PCCI annual meeting held last Friday. The newly elected directors are: Sergio Ortiz-Luis Jr., Ma. Alegria Limjoco, Menardo Jimenez, Alfredo Yao, Francis Chua, Edgardo Lacson, Roberto Amores, Jose Leviste, Apolinar Aure, Edgard Sia II, Dennis Uy, Michael Chen, Felino Palafox Jr., Jeffrey Ng, Delia Jimenez (NCR), Gregoria Simbulan (North Luzon), Clarine Tobias (South Luzon), Samuel Chioson (Visayas) and Maria Teresa Alegrio (Mindanao).

PH lowest in reading comprehension Manila Times 5th Dec 2019
THE Philippines has the lowest reading comprehension and second lowest in science and mathematics among 79 countries, a global survey found. The Organization for Economic Cooperation and Development (OECD) tested around 600,000 15-year-old students in 79 countries through the 2018 Program for International Student Assessment (PISA). The results showed that the Philippines had an average reading score of 340, the lowest among the countries surveyed. It is also below the OECD average of 487. “Reading proficiency is essential for a wide variety of human activities — from following instructions in a manual; to finding out the who, what, when, where and why of an event; to communicating with others for a specific purpose or transaction,” the result said. “PISA recognizes that evolving technologies have changed the ways people read and exchange information, whether at home, at school or in the workplace,” it added. The Philippines also ranked second lowest in science and mathematics, with a score of 357 and 353, respectively.

Palace targets parties behind water contracts Business Mirror 5th Dec 2019
PRESIDENT Duterte is hell-bent on getting back at those behind the alleged onerous agreements of the government with the two water concessionaires, “regardless of whatever power or influential groups are run over.” Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo said in a statement on Wednesday that the President directed the filing of appropriate charges against all those behind the alleged onerous agreements with the two water concessionaires—Manila Water and Maynilad Water Services Inc. (MWSI). The order was given a day after the Department of Justice (DOJ) revealed that its review of the concession agreements, made in the 90s contained several onerous provisions and the government will likely push for a renegotiation. Manila Water is a publicly listed company and a subsidiary of Ayala Corp., while businessman Manny Pangilinan’s Pacific Investments Corp. owns a controlling stake in Maynilad.

PHL lags in global education survey Business World 5th Dec 2019
FILIPINO STUDENTS fared poorly in a survey that ranks 79 participating economies according to their performance in reading, science and math. Latest results of the Program for International Student Assessment (PISA) conducted by the Organization for Economic Cooperation and Development (OECD) showed the Philippines having the lowest mean score in reading comprehension at 340 points, below the survey average of 487 points. Similarly, the Philippines came out second-lowest in science and math as it posted mean scores of 357 and 353, respectively, compared to the survey average of 489 points in both subjects.In a statement, the Department of Education (DepEd) said that the PISA results, along with the results from the locally conducted National Achievement Test, reflect the “urgency” to address gaps in improving the quality of basic education in the country. DepEd also noted its Sulong Edukalidad initiative, wherein it will implement “aggressive reforms” in the review and updating of the K-to-12 program, the improvement of learning facilities, the upskilling and reskilling of teachers and school heads, as well as the engagement of stakeholders for support and collaboration.

Villar says PH schools need to be ranked, incentivised to address reading comprehension problem abs-cbn.com 5th Dec 2019
Following reports that Filipino students ranked low in reading, math and science, Sen. Cynthia Villar on Thursday said there should be measures such as competitions to determine the performance of schools. Do you know which public school is the best in the Philippines? There’s no measure for tha We should give incentives to those who do well and give disincentives to those that rank low. So they strive to excel to be better.

Congress break stalls CITIRA bill passage – DOF philstar.com 3rd Dec 2019
MANILA, Philippines — It would be challenging for Congress to pass the Corporate Income Tax and Incentives Rationalization Act (CITIRA) within the year following the one-week suspension of Senate sessions, according to the Department of Finance (DOF). The Senate has suspended sessions until Dec. 9 to give way to the Southeast Asian Games and the bicameral conference committee hearings. Finance Undersecretary Karl Kendrick Chua said this one-week suspension won’t have much effect on the passage of Package 2 Plus of the Comprehensive Tax Reform Program (CTRP), but may delay the legislative process for CITIRA.

World Bank loans Philippines $300 million for conditional cash transfers Rappler 2nd Dec 2019
MANILA, Philippines – The World Bank and the Philippine government signed an agreement for the former to fund an additional $300 million for the conditional cash transfer program, also known as Pantawid Pamilyang Pilipino Program (4Ps). On Thursday, November 28, World Bank country director Mara Warwick and Finance Secretary Carlos Dominguez III signed the financing deal for the second phase of 4Ps to achieve the government's agenda to reduce poverty incidence to just 14% by 2022. The World Bank has contributed a total of $1.26 billion to 4Ps since it first provided funding support for this program in 2010.

Philippine-US FTA could come ‘as late as 2021’ Business World 2nd Dec 2019
MANILA and Washington could forge a free trade agreement (FTA) within two years amid delays in talks, an officer of the American Chamber of Commerce of the Philippines (AmCham) said late last week. The Philippine Trade department had said in November 2018 that talks on the FTA’s scope could start this year. But AmCham Executive Director Ebb Hinchliffe told reporters on Thursday that Washington is not likely to consider new agreements while its trade deals with Mexico and Canada await approval by US lawmakers. At the same time, he said: “I would confidently state there will be free trade agreement between the US and the Philippines coming. I hope it would be some time in 2020, but it could be as late as 2021.”

Meet the future of Philippine space exploration ABS-CBN News 2nd Dec 2019
In one of the buildings of the University of the Philippines’ science complex, a team of young engineers and scientists is busy at work - studying and building what is supposed to be the country’s first locally made satellite. Among them is electronics engineer Renzo Wee from Zamboanga, who is responsible for ensuring that the cube satellite can withstand the harsh environment of outer space. He helped set up a monitor showing the movement of one of the Philippine satellites already deployed in space, Diwata-2, which was assembled by Filipino engineers in another country. Wee pointed to a marker showing Diwata-2 in the area of the United States. “It won’t pass over the Philippines until much later,” the 24-year-old engineer said. The marker inched up the map, which basically means Diwata-2 is moving - hurtling across space - 620 kilometers above ground. The satellite that Wee and the other scholars are working on is much smaller than the 56-kilogram Diwata-2. At 10 cubic centimeters, a cube satellite can easily rest on the palm of your hand. Despite its small size, it is packed with instruments such as sensors and cameras, which will allow government to survey agricultural crops, protected forests and other areas of concern.

Thousands Evacuated as Typhoon Kammuri Nears the Philippines The New York Times 2nd Dec 2019
More than 43,000 people have been evacuated and schools in six provinces have suspended classes as the eastern islands of the Philippines were lashed by heavy rains from Typhoon Kammuri as it prepared to make landfall late Monday. The storm, packing wind gusts as high as 115 miles per hour, was barreling toward the Philippines on Monday with its eye 220 miles east of the city of Virac on the island province of Catanduanes, the national weather agency said. The typhoon is poised to strike the Philippines just after President Rodrigo Duterte, joined by the politician and boxing star Manny Pacquiao, presided over the opening of the Southeast Asian Games, a biennial sports event that draws top athletes from 11 Southeast Asian nations.

Gov’t pushes reform agenda Manila Bulletin Business 2nd Dec 2019
There is no turning back on the Duterte administration’s comprehensive reform agenda despite opposition by some sectors to a number of controversial measures necessary for the country’s rapid and inclusive growth, an economic manager said. In a statement, Finance Secretary Carlos G. Dominguez III said the government is determined in strengthening the economic “foundations” necessary in ensuring future generations will have “a comfortable life.” Dominguez said that sustaining the country’s economic expansion is not just an option but a necessity to realize the ultimate target of significantly reducing poverty incidence from 27.6 percent in the first half of 2015 to just 14 percent by 2022.

ASEAN

SEC, PSE cite issues with SME Exchange bill on listed firms’ regulation | BusinessWorld Business World 3rd Dec 2019
THE Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE) said they support bill that will establish a Small and Medium Enterprises (SMEs) Stock Exchange, but noted that there are possible overlaps with existing regulations. The Senate Committee on Trade, Commerce and Entrepreneurship on Monday held initial hearings on Senate Bill No. 341, written by Senator Cynthia A. Villar, which seeks to encourage SMEs to make initial public offerings (IPO)s. The PSE currently trades Small, Medium and Emerging stocks on a separate board. Eligible firms must have minimum authorized capital of P100 million, of which at least 25% is subscribed and fully paid.

Banking

PHL banks to weather lower rates, trade war | BusinessWorld Business World 12th Dec 2019
PHILIPPINE BANKS will fare well despite the falling interest rate environment, which has been the trend in most Asian countries, according to Moody’s Investors Service. In its report titled “Banks — Asia Pacific 2020 Outlook,” the ratings agency also noted that banks in the Asia-Pacific region may feel the strain from their exposure to China which has seen its economy slowing down, as well as the Asian giant’s continuing trade war with the United States. “We expect profitability to remain stable for Philippine banks. While the lower interest rates are negative for margins, the impact will be offset by the lowering of reserve requirements,” Srikanth Vadlamani, vice-president and senior credit officer at Moody’s Investors Service said in an e-mail on Wednesday.

Customs

DTI sets Feb. deadline for Thailand to comply with WTO tobacco ruling Business World 4th Dec 2019
THE Department of Trade and Industry (DTI) said it is giving Thailand until February to comply with the World Trade Organization (WTO) ruling on its customs measures on Philippine cigarette exports before seeking recourse. Trade Secretary Ramon M. Lopez told reporters after a news conference at New World Makati Hotel Wednesday that he will write a letter to his counterpart in Thailand this month.“The general tone is for enjoining them to comply with the WTO ruling. We are all supposed to subscribe to the rules. It’s as basic as that. Otherwise, we will look into recourse, into other measures that will be available for us to take,” he said. The decade-long dispute on Thailand’s fiscal and customs policies on imported cigarettes from the Philippines, where the WTO ruled in favor of the Philippines, is now facing new considerations that could delay Philippine retaliation.The Thai courts recently fined Philip Morris Thailand $39.7 million after finding the company had undervalued cigarette imports from the Philippines to avoid taxes.

Defense & Security

What Do the Philippines’ New Cobra Helicopters Mean for Its Military? The Diplomat 9th Dec 2019
Last week, the Philippines finally received helicopters from Jordan based on an agreement both sides had reached in 2018. The development put the focus on the pact as well as its significance for the Philippine military and its capabilities. As I have noted before in these pages, while defense ties between the Philippines and Jordan remain quite underdeveloped, Philippine President Rodrigo Duterte’s visit to Jordan last year saw both sides explore avenues for collaboration, including a new memorandum of understanding on defense cooperation signed between the Philippines Department of National Defense (DND) and the Jordan Armed Forces-Arab Army.

Lorenzana-recommends-lifting-martial-law-Mindanao Rappler 5th Dec 2019
Two years and 7 months since martial law was declared over Mindanao, Defense Secretary Delfin Lorenzana said it was time for the region to “go back to normal” after the measure expires on December 31. “I just sent my recommendation to the President, recommending the non-extension of martial law in Mindanao,” Lorenzana told a media forum in Makati City on Wednesday, December 4. The police and military have “assured” the defense chief of the stability of the region’s security situation, and that peace and order could be maintained and improved without martial law. Besides, martial law gave potential investors second thoughts about setting up businesses in different parts of Mindanao, and he hopes lifting it would bring them back.

DND boosts cybersecurity awareness The Manila Times 29th Nov 2019
THE Department of National Defense (DND) has enhanced its campaign to raise cybersecurity awareness as it held a conference for its personnel to educate them on relevant issues concerning the matter. Defense Undersecretary Cardozo Luna led the DND’s first annual cybersecurity awareness conference, dubbed as the “DND Cybercon,” on Wednesday at Camp Aguinaldo, Quezon City. Luna said the cyberspace and cybersecurity have been “at the forefront” of the DND’s priority list, citing the agency’s crafted National Defense Strategy which considered cyberspace as the “fourth dimension of warfare” and has been identified by their strategy as “one of the new defense mission areas.”

Economics

DBM sets P4.64-trillion 2021 budget | BusinessWorld Business World 12th Dec 2019
THE GOVERNMENT is looking at a P4.64-trillion spending plan for 2021, about 13% more than the P4.1-trillion national budget for next year which made it out of Congress on Wednesday, Acting Budget Secretary Wendel E. Avisado said. “The proposed 2021 national budget will continue to support anti-poverty and peace-sustaining measures through funding of recently approved legislative measures,” Mr. Avisado said during the press conference on Wednesday.

Congress ratifies national budget for next year | BusinessWorld Business World 12th Dec 2019
THE PROPOSED P4.1-trillion national budget for 2020 is now a step away from enactment, having secured Bicameral Conference Committee approval and ratification by both chambers of Congress on Wednesday. Senator Juan Edgardo M. Angara, Senate Finance Committee chairman, replied in the affirmative when asked if President Rodrigo R. Duterte could sign next year’s spending plan by Christmas. “I think so. ’Yun ang goal natin kasi, given ’yung nangyari sa 2019 budget — natagalan, naapektado po ’yung paglaki ng ating ekonomiya, maraming proyekto sa mga probinsya ang hindi natuloy… iniiwasan natin ’yun (That is our goal because, given what happened to the 2019 budget — its delayed enactment affected overall economic growth and many projects in the provinces did not proceed… we are trying to avoid that),” Mr. Angara said in a briefing, Wednesday.

Planners cut economic projections further | BusinessWorld Business World 12th Dec 2019
ECONOMIC MANAGERS on Wednesday slashed their gross domestic product (GDP) growth targets for 2021 and 2022, abandoning original hopes for expansion of up to eight percent, while revising this year’s forecast to a tighter range following earlier quarters’ slower-than-expected clips. The same day saw the Asian Development Bank (ADB) maintaining its already-downgraded six percent GDP growth projection for this year and the 6.2% for 2020, according to the regional lender’s Asian Development Outlook Supplement. The Development Budget Coordination Committee (DBCC), in its 177th meeting yesterday, scaled down its growth targets to 6.5-7.5% for 2020 to 2022, from 7-8% originally, while maintaining a target band of 6.5-7.5% for next year.

PHL trade deficit widens to $3.25 billion in October from $3.04 billion in September–PSA | Cai Ordinario BusinessMirror 11th Dec 2019
AS the country’s trade deficit widened, the country’s reliance on electronic products in boosting external trade performance has increased. Data released by the Philippine Statistics Authority (PSA) on Tuesday showed the country’s external trade contracted 6.7 percent in October and the country’s trade deficit reached $3.25 billion, narrower than last year but wider than the $3.04 billion in September.

Philippines first in Asia for World Bank’s catastrophe-linked bonds Business World 9th Dec 2019
THE WORLD BANK has issued three-year catastrophe-linked bonds (CAT) on behalf of the Philippines that could amount to $225 million worth of financial protection against earthquakes and tropical cyclones, the multilateral lender said in a statement on Monday. The World Bank said the CAT securities consisted of two tranches, $75 million for losses from earthquakes and $150 million for losses from tropical cyclones. The papers were issued under the International Bank for Reconstruction and Development’s (IBRD) capital-at-risk notes program that is designed to transfer risks related to natural disasters to capital markets, the lender said.

Inflation picks up to 1.3% in Nov. Malaya 6th Dec 2019
After five consecutive months of slowdown, inflation in November accelerated to1.3 percent due to the uptrend in prices of tobacco, alcoholic beverages and utilities. Inflation in October 2019 was recorded at 0.8 percent and in November 2018, 6.0 percent. The Philippine Statistics Authority (PSA) said inflation surged also due to higher price increases in the indices of housing, water, electricity, gas, and other fuels; furnishing, household equipment and routine maintenance of the house; health; and, communication. PSA, however, noted slower annual gains were observed in the indices of clothing and footwear and restaurant and miscellaneous goods and services.

Q4 GDP seen hitting 6.6% Manila Times 4th Dec 2019
THE Philippine economy likely grew faster in the fourth quarter of the year on the back of the latest positive developments, an ING Bank economist said“Fourth quarter 2019 GDP (gross domestic product) to hit 6.6 percent . . . ,” ING Bank senior economist Nicholas Antonio Mapa estimated in a report released on Wednesday. Mapa’s fourth quarter economic growth forecast compares with the 6.2 percent in the third quarter after the slower-than-expected 5.6-percent and 5.5-percent GDP expansions in the first and second.Growth in the last quarter of 2019, the economist, said would bring full-year GDP expansion to 6 percent “on robust consumption, government catch-up spending and revitalized investment activity.”

PHL firms outlook: fewer new hires, pay hike for staff Business Mirror 4th Dec 2019
PHILIPPINE companies are expected to see a drop in new hires and an increase in pay for their existing employees next year, according to Mercer Total Remuneration Surveys (TRS). Based on the TRS, Mercer said 45 percent of companies are keen on hiring in 2020, lower than the 50 percent in 2019. However, the TRS results showed that salary increase is forecast to grow to 6 percent in 2020, from 5.5 percent in 2019.“Given the stabilizing voluntary turnover rate, the focus of most organizations is turning to upskilling and retaining key talent. However, 66 percent of companie

Peso may strengthen vs dollar on remittances, inflation data Business World 2nd Dec 2019
THE PESO could strengthen this week on the back of support from continued remittance inflows this month. The local unit finished trading at P50.81 versus the greenback on Friday, losing 10.5 centavos versus the P50.705-a-dollar close on Thursday, according to data from the Bankers Association of the Philippines. Week on week, the peso also depreciated by a centavo from its P50.80 close on Nov. 22. Dollars traded grew to $1.108 billion from the $1.045 billion seen on Thursday. A trader attributed the local unit’s weakness to the market’s woes on developments revolving on the US-China trade conflict.

Reinventing Corporate Philippines Inquirer 2nd Dec 2019
As the Philippines transitioned from a dictatorship into a democracy after the 1986 People Power Revolution, the country saw its own share of boom-bust cycles. It carried the stigma of being the “sick man of Asia” for a long time before finding its sweet spot as one of the fastest-growing economies in the region with an investment-grade sovereign. For those doing business here, it took skilled captains to navigate challenges arising from the macroeconomic, industry and political backdrop. Some of the businesses today are no longer the same ones we’ve seen decades ago. Some have become much bigger and more diversified while some have refocused into new businesses. There were also those that perished due to a confluence of factors. But those that transcended past challenges and reinvented themselves are now well-positioned to ride the country’s favorable economic trajectory. The group of businessman Manuel V. Pangilinan is among those that had undergone a lot of challenges in this market.

Energy

Group urges ERC to cite Meralco for alleged ‘abuse of market power’ | Lenie Lectura BusinessMirror 11th Dec 2019
The National Association of Electricity Consumers for Reforms Inc. (Nasecore) is asking the Energy Regulatory Commission (ERC) to penalize the Manila Electric Co. (Meralco) for alleged abuse of market power. In its motion filed with the ERC, Nasecore also pointed out that Meralco allegedly threatened the ERC into granting them provisional authority (PA) for their five power supply agreement (PSA) applications pending before the commission. Nasecore alleged that Meralco’s application for PA for the issuance of the PSAs is tantamount to a threat to the government regulator as it provided the ERC with a deadline of December 26, 2019, to approve the contracts. Otherwise, it added, Meralco may be “exposing” its consumers to “volatile” electricity prices.

PSALM to study privatization options for hydro plants philstar.com 9th Dec 2019
State-run Power Sector Assets and Liabilities Management Corp. (PSALM) is targeting to complete the study on the privatization options for the hydropower plants under Independent Power Producer (IPP) contracts next year. PSALM president and CEO Irene Joy Besido-Garcia said the agency aims to be able to decide on the privatization structure of the Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant (HEPP) and the Casecnan HEPP next year.  “We’re going to start studying the two because as you know, the power plants, they have different structures. It’s important to structure it well, whatever is the current scenario,” she said.

Oil companies set to hike prices this week philstar.com 1st Dec 2019
MANILA, Philippines — Oil companies are expected to raise pump prices this week after successive weeks of price rollbacks. Meanwhile, prices of cooking gas will also have another round of increase in December amid higher international contract prices. In its forecast, Unioil said motorists should expect fuel prices to go up this week. “Diesel should go up by P0.55 – P0.65. Gasoline should go up by P0.25 – P0.35,” it said. This would follow six straight weeks of reduction on diesel prices.

DOE partners with Japan for clean energy initiative suitable for ASEAN Manila Bulletin Business 30th Nov 2019
The Department of Energy (DOE) has partnered with Japan’s Ministry of Economy, Trade and Industry (METI) and the Mitsubishi Research Institute, Inc. in tackling clean energy initiatives that are seen applicable to the needs of the Southeast Asian bloc. Through the government-private sector tandem on Cleaner Energy Future Initiative for ASEAN (CEFIA), the two governments set the goal on firming up closer collaboration “to help accelerate the development and utilization of cleaner energy and low carbon technologies within the ASEAN region.” Inaugural discussions on such initiatives had been concluded in Manila just recently, with the Philippine DOE taking the lead.

China could 'turn off power' in the Philippines BBC News 21st Nov 2019
China could switch off the Philippines' national grid, congress has heard in Manila. The head of the National Transmission Corporation confirmed the possibility during a senate session. China has part-owned the Philippines' national grid since 2009 - leading one senator to question whether China's "hegemonic ambitions" posed a security threat to the Philippines. The countries have a territory dispute in the South China Sea. "We have given our grid - although 40% it appears - to a foreign corporation that has interests that collide with our country in the West Philippine Sea," said Senator Richard Gordon, using the Philippine name for the eastern parts of the South China Sea. "And that [country] obviously has a hegemonic ambition." The senate heard that - although the power could be switched off remotely - the Philippines could restore it within 24 to 48 hours.

Big energy firms driving coal expansion in the Philippines Eco-Business 3rd Dec 2019
Coal expansion by the Philippines’ biggest energy companies could lead to the fossil fuel’s share of the energy mix growing from 52 per cent today to a whopping 75 per cent by 2025. Using government data, environmental advocacy group Greenpeace identified how four of the country’s biggest conglomerates are set to substantially increase their coal portfolios. Should all their proposed coal projects in the next two to six years be pushed through, the Philippines’ coal capacity will more than double, Greenpeace said in its new report, Dirty Business. By 2030, coal supply would be more than twice its 2015 level.

Philippines DOE considering stable pricing system for renewable energy Think GeoEnergy 3rd Dec 2019
The Philippines Department of Energy is pushing for a specific pricing system for renewable energy. With that the DOE is aiming to boost interest into investments in the sector in the country. With the Green Energy Pricing Program (Gepp), the government aims to establish “stable pricing” to encourage investment, so Energy Undersecretary Felix William Fuentebella to Sun Star in the Philippines. 

How the Philippines can lead in floating solar technology in Asia Eco-Business 3rd Dec 2019
An array of solar panels floats on the waters of San Antonio in San Pedro, one of the cities surrounding Laguna de Bay, the Philippines’ largest freshwater lake 55 kilometres south of Metro Manila, on the northern island of Luzon. Installed in March by renewable energy firms SunAsia Energy and Ciel et Terre, the 13 kilowatt structure is a year-long experiment to see if the photovoltaic (PV) panels can withstand the strong waves and gusty winds at the lake.

Philippines' PXP eyes Malampaya facilities for South China Sea gas project Reuters 3rd Dec 2019
PXP Energy Corp said on Tuesday it has submitted an unsolicited proposal to the Philippines’ Department of Energy to develop and utilize the Malampaya natural gas facilities in the South China Sea for a planned integrated gas hub venture. The Malampaya gas-to-power project, developed and operated by Shell Philippines Exploration BV on behalf of joint venture partners Chevron Malampaya LLC and state-owned PNOC Exploration Corp, began commercial operations in 2001.

Malaysian firm eyes waste-to-energy PHL projects Business World 3rd Dec 2019
A Malaysian company has pledged to invest up to $2 billion to put up 12 waste-to-energy (WTE) facilities in the Philippines in partnership with Filipino company Integrated Green Technology, Inc. (IGT) and a French technology provider. Michael C. Jimenez, chief executive officer and president of IGT, identified the Malaysian firm as PhilSar Renewable Energy Sdn Bhd. and the French group as CNIM Martin Pte Ltd. (CMPL), his partner in at least three WTE projects in the Philippines that have forged contracts with local government units in Pangasinan and Cebu.

China can shut off the Philippines' power grid at any time, leaked report warns CNN 26th Nov 2019
The Philippines' power grid is under the full control of the Chinese government and could be shut off in time of conflict, according to an internal report prepared for lawmakers seen by CNN. China's State Grid Corporation has a 40% stake in the National Grid Corporation of the Philippines (NGCP), a private consortium that has operated the country's power lines since 2009. Concerns over potential Chinese interference in the Philippine energy system have dogged the arrangement since it was first agreed a decade ago.

Financial Services

ADB approves $400-million loan to cut youth unemployment Business Mirror 5th Dec 2019
The Asian Development Bank (ADB) has approved a $400 million policy-based loan to reduce the number of out-of-school and unemployed young Filipinos. The government aims to transform PESO offices into more professional processes with quality standards, broaden the coverage of the JobStart Philippines Program, and introduce skills development schemes targeting specific sectors. “This new ADB loan seeks to address the skills mismatch between young job seekers and the competencies demanded by employers,” said ADB Southeast Asia Senior Economist for Public Finance Cristina Lozano. “It also strengthens labor regulations to provide income security and decent jobs.” In addition, an ADB technical assistance program will pilot a workplace funding scheme in 2020 to help employers implement skills upgrade initiatives in their businesses.The loan also supports government reforms that aim to improve the employability of young Filipinos through labor market programs and provide easier access to on-the-job training schemes to help them secure and retain jobs.

PHL banking system will keep doing well Business Mirror 5th Dec 2019
THE Philippine banking system is expected to continue to perform well, as sustained economic growth will likely cushion the potential negative effects of external developments. In a recently published assessment on the performance of Asia Pacific banks, Fitch Ratings said the local banking system is generally “stable.” “The rating outlooks are all stable, reflecting the benign environment and supported by the banks’ adequate loss-absorption buffers, satisfactory profitability, as well as broadly steady funding and liquidity profiles,” Fitch said. In the report, the credit watcher also said it expects operating conditions to be generally supportive of loan growth and credit quality.

BoI investments top P1 trillion as of Oct. Business World 5th Dec 2019
THE BOARD of Investments (BoI) has breached its P1-trillion 2019 investment target as of October, ranking Trade department (DTI) officials announced on Wednesday. Trade Secretary Ramon M. Lopez, who is chairman of the BoI board, said at a press conference that the biggest investment approved by BoI in October was that of the Dennis Uy-led Dito Telecommunity Corp., the country’s third major telecommunication service provider. The China Telecommunications Corp.-backed Filipino telco said in November that it targets to corner a third of the Philippine market in two to three years. Investments in energy, telecommunications and manufacturing fueled the increase in BoI-approved investments to some P1.1 trillion, said Mr. Lopez.

Philippines launches e-payment systems en route to be cash-lite Tech Wire Asia 26th Nov 2019
THERE is a significantly increasing dependency on e-payment systems as the service is proven to be convenient, economical, and safe — in Southeast Asia and around the world. The Philippines, for example, understands this well and has been actively making efforts to streamline transactions and payments in the country. Recently, the country’s Central Bank (BSP) Governor Benjamin Diokno announced that the Philippines aims to be cash-lite by 2023. Following the country’s ongoing digital transformation program, the BSP has launched digital payment systems namely ‘eGov Pay’ and ‘QR PH’, to expand its digital capabilities. eGov Pay is expected to support the government’s aspirations to collect taxes and other governmental fees online using resident’s PESOnet accounts.

Fintech firm believes tech is key to financial inclusion | VG Cabuag BusinessMirror 6th Dec 2019
TAKING cue from monetary authorities, private companies joined the bandwagon carrying financial inclusion. Many companies found its most unlikely success. There’s the GCash, product financial technology affiliate of mobile phone operator Globe Telecom Inc., now owning the largest transaction in the Philippines that use the fintech, or financial technology, platform. There’s also PLDT Inc.’s PayMaya, which is partly owned by China’s Tencent Holdings Inc. Since the Philippines consists of thousands of inhabited islands, financial inclusion is easier said than done, especially when the services are difficult to deliver in far-flung areas and, especially, when there’s slow Internet connection.

Financial inclusion will help all citizens reap the rewards of Philippine growth World Finance 5th Dec 2019
The Philippine economy is currently experiencing sustainable, non-inflationary growth. Despite a slight setback in Q1 2019 – due, in large, to political hurdles delaying passage of the national budget – there is still an optimistic growth outlook for the year, with GDP expected to expand by 6.1 percent in real terms. Due to lower energy and food prices, as well as favourable foreign exchange rates, inflation has been decelerating fast from its 2018 high of 6.7 percent, registering a low of 2.4 percent in July 2019 (see Fig 1). This has resulted in a recovery of household disposable incomes and, in turn, consumer spending – the largest component of Philippine economic activity. This also explains the robustness of the country’s retail sector and the recovery of its property market following the temporary inflation scare of 2018.

Philippines central bank launches digital payments platform Global Government Forum 2nd Dec 2019
The Philippines central bank, Bangko Sentral ng Pilipinas (BSP), has launched an online payment facility for government transactions and is championing the adoption of a national QR code standard, in a bid to move away from cash and reduce payment errors.   Online facility eGov Pay will allow citizens to make financial transactions with government agencies, such as paying taxes and other fees, electronically, enabling easier tracking of payment status and boosting transparency. The payments will be made via a portal operated by the Land Bank of the Philippines, a universal bank owned by the government.

BSP sees double-digit money supply growth Manila Bulletin Business 1st Dec 2019
Domestic liquidity or the country’s money supply is expected to reach double-digit levels within the first half of 2020 due to higher government spending coupled with the release of fresh funds from banks’ lower reserve requirements, according to a central bank senior official. “(The) liquidity growth has began to recover (and) we’re anticipating it will accelerate some more,” said Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr. “Our forecast for 2020 is an increase in liquidity growth to the lower double-digit levels so it will be more in line with the growth needs of the economy.” Dakila said higher domestic liquidity will return and it will come from “a lot of several factors including cuts in reserve requirement ratio (RRR) and also from the acceleration in government spending.”

Food & Agriculture

Philippines eyes more galunggong imports philstar.com 9th Dec 2019
The Philippines will increase the imports of the poor man’s fish or galunggong as prices of the commodity have significantly jumped amid low supply. Last week, Agriculture Secretary William Dar gave the green light to the Bureau of Fisheries and Aquatic Resources (BFAR) to proceed with the importation program of 45,000 metric tons (MT) of small pelagic fish, including galunggong. Just a few days later, DA is already mulling to increase fish imports to 100,000 MT. “This is the effect of Typhoon Tisoy, affected areas are fish producing regions like Eastern Visayas and Mimaropa. Plus the season right now has little harvest that’s why we approve the 45,000 MT small pelagic fish imports,” Dar said.

Villar says P3 billion realignment in 2020 national budget to assist local rice farmers Manila Bulletin News 3rd Dec 2019
Senator Cynthia Villar clarified on Monday that the transfer of the P3-billion fund from the National Food Authority’s (NFA) proposed 2020 budget to the Land Bank of the Philippines will also be used to assist local rice farmers affected by the Rice Tariffication Law (Republic Act 11203). Villar defended her suggested amendment to the P4.1-trillion proposed 2020 national budget after Albay Representative Joey Salceda questioned it as among the Senate’s supposed “dagdag-bawas” or realignments in the government’s spending plan. In a phone interview with the Manila Bulletin, the senator said her proposed P3 billion fund transfer was adopted by the Upper Chamber to make sure that local rice farmers will benefit from the funds appropriated for them.

Rethinking the sugar industry direction philstar.com 3rd Dec 2019
Two sectors in the country’s agricultural landscape rice and sugar had presented almost similarly compelling cases for liberalization, and yet received totally opposite responses from the country’s lawmakers. What gives? In 2018, with higher prices of rice pushing inflation to stay at elevated levels for the most parts of the year, Duterte’s economic team urged Congress to open up rice importation subject to a table of tariffs. Early this year, the Rice Tariffication Act was passed. To protect farmers who would be affected by the unimpeded importation of rice, the law set aside an initial P5 billion that would be used during the first year, and P10 billion yearly for six years under a newly established Rice Competitiveness Enhancement Fund.

PH tightens rules on rice imports Panay News 22nd Nov 2019
MANILA – The Philippines will not suspend rice imports but will tighten food safety measures to control the entry of cheap grain that is hurting incomes of local farmers, the agriculture chief said on Thursday. Agriculture secretary William Dar made the announcement after a meeting with President Rodrigo Duterte, who had ordered the suspension of rice imports after purchases surged, making Philippines the world’s top buyer this year. Duterte had wanted the suspension implemented during local harvest season, but its legality is unclear because he signed a law in February lifting curbs on importation of the grain.

Corruption pulls down PHL in food security list BusinessMirror 10th Dec 2019
Corruption and low investment in agriculture research and development caused the Philippines to rank low in The Economist Intelligence Unit (EIU) and Corteva Agriscience Global Food Security Index (GFSI) 2019. The Philippines also lagged behind at least five of its ASEAN peers —Singapore, Malaysia, Thailand, Vietnam and Indonesia. It ranked 64th out of 113 countries, way below these five ASEAN peers. The country’s score was at 61, a 1.7-point increase from 2018. However, if the country’s natural resources and resilience is taken into consideration, the Philippines’s ranking further declines to 72nd out of 113 countries. The country’s ranking in natural resources and resilience was 108th out of 113. Based on the GFSI, the country posted very weak scores in corruption where it got zero; public expenditure on agricultural R&D, 2.9; GDP percapita (US$ PPP), 6.5; and protein quality, 19.2. The country was ranked very good in terms of nutritional standards where it scored 100; change in average food costs, 98.3; volatility of agricultural production, 96.2; and urban absorption capacity, 94.1.

CONFED forwards proposals to address sugar industry challenges | BusinessWorld Business World 9th Dec 2019
THE CONFEDERATION of Sugar Producers Association, Inc. (CONFED) has sent proposals to government officials to address industry challenges and prevent threats from import liberalization. To increase productivity in the industry, CONFED said that the block farm program — or the consolidation of smaller farms to take advantage of economies of scale — must be expanded. They added that there should be mechanization through funds from SIDA or through access to affordable loans from the government’s financial institutions. CONFED also proposed upgrading and standardizing mills and mobilizing “progressive sugarcane farmers” to become farm consolidators, service providers, or peer mentors. The confederation is also urging government to review the implementing rules and regulations of the SIDA law. They are pushing for streamlined application processes, quicker fund utilization, fast-tracked program implementation, and an adjusted fund allocation formula based on industry priorities. SIDA, or Republic Act 10659, is intended to update industry competitiveness, maximize resources, and boost farmer and farm worker income through improved productivity, product diversification, increased jobs, and sugar mill efficiency.

Palay production crisis: A battle of development frameworks BusinessMirror 5th Dec 2019
A national day of protest against the Rice Tariffication Law was held on November 20 by a huge coalition of peasant unions, Party-List groups, civil society organizations and sympathetic cause-oriented formations. Their unified demand: suspend and repeal RTL to stop the downward spiral of palay farm-gate prices below production cost. Their collective warning: The domestic rice industry is collapsing and exacerbating mass poverty and hunger in the countryside.In response, President Duterte immediately announced the government’s intention to suspend the RTL, dubbed by the farmer organizations as rice trade liberalization law. Affected palay farmers shall instead receive credit, seed, mechanization and other forms of assistance, including conditional cash transfer. The administration also asked the National Food Authority and select LGUs to increase domestic palay procurement, which, ironically, is the exact opposite of what the RTL is trying to promote, that is, for the NFA to get out of the market and do nothing else but simple “buffer stocking.”

Senate urges gov't not to pursue sugar liberalization Rappler 25th Nov 2019
MANILA, Philippines – The Senate adopted on Monday, November 11 the resolution urging the the executive branch not to pursue the planned sugar liberalization to safeguard the welfare of sugar farmers and industry workers in the country. Signed by 22 senators, Senate Majority Leader Juan Miguel Zubiri sponsored Senate Resolution 213, saying the liberalizing imports would be the “nail that would seal the coffin of the sugar industry.” The resolution was swiftly adopted, as no senators interpellated nor proposed amendments to the measure.

Rice, free trade and trade wars – The Manila Times 21st Nov 2019
So when the Republic Act (RA) 11203, or the “Rice Tariffication Law” was signed into law last February, it was like declaring to the whole world that the Philippines is truly part of the international free trade arena. Also, the Philippines made a commitment to the World Trade Organization (WTO) and to other nations part of the free trade arena, that the country would remove the quantitative restrictions (QR) on rice imports by 2019. PH benefiting from Asean trade The country not removing the QR on rice importations would have had consequences I would not discuss in this column. But if you look at current trade statistics, the Philippines has been benefiting greatly from free trade also in the Association of Southeast Asian Nations (Asean).

Health & Life Sciences

Taxing single-use plastic bags needs careful study Business Mirror 5th Dec 2019
The horror of discovering that plastic debris has now found its way into the food we eat has resulted in knee-jerk reactions, such as the call for a total ban on the use of plastic (See, “Duterte backs legislation to ban plastic use,” in the BusinessMirror, November 8, 2019). The President even signaled his preference for legislation to authorize the ban. In place of plastic, advocates of the ban want a shift to more environment-friendly packaging materials made of biodegradable matter, such as paper, which comes from trees. Following the President’s pronouncement, lawmakers at the House of Representatives have started deliberating a bill that seeks to impose excise tax on single-use plastic bags. House Committee on Ways and Means Vice Chairman Estrellita B. Suansing of Nueva Ecija said her proposal targets supermarkets, malls, shops, stores and similar establishments. However, House Minority Leader Bienvenido Abante Jr. wants a total ban on single-use plastic and to hike the excise tax on reusable plastic. The protection of the environment was cited by advocates as the single biggest reason for their push to ban plastics and to slap an excise tax on single-use plastics. Unfortunately, imposing taxes will not discourage single use and will only penalize the poor who have grown dependent on plastic. For the poor, plastic bags have become the most convenient means of carrying their groceries and food items that they consume in construction sites or even in their air-conditioned offices. The tax will only be passed on to consumers and raise the price of goods and it is likely that businessmen will not absorb the cost. This has always been the case whenever government decides to tax certain items. The dependency of Pinoy consumers on plastic containers and packaging materials has given rise to an industry that may be forced to lay off workers if the government will insist on a total ban on plastics.

Rodrigo Duterte Calls for Ban on Public Vaping in the Philippines The New York Times 21st Nov 2019
President Rodrigo Duterte of the Philippines has ordered a sweeping ban on vaping in public, threatening to use the police and military to enforce what observers in the country have called a draconian order. When Mr. Duterte, a former smoker, announced the ban in a speech on Tuesday, his statement caught many Filipinos by surprise but was largely ignored. But he reiterated the order on Wednesday in a long and at times rambling speech before the Department of National Defense, saying that vaping was “toxic” and could now be done only in private.

DOH now favors regulation of vapes, e-cigs philstar.com 3rd Dec 2019
From pushing for a total ban, the Department of Health (DOH) and Food and Drug Administration (FDA) are now willing to go along with the regulation of electronic cigarettes and vaping products. At the start of House deliberations on bills seeking regulation of electronic nicotine delivery system (ENDS) products, FDA director Ana Trinidad Rivera told lawmakers that the agency and the DOH now support the proposal to only partially ban the sale and use of vapes to smokers aged 24 and below. Taking a cue from the President, the DOH had pushed for a total ban on vapes in the country. Health Undersecretary Eric Domingo earlier batted for a total ban on ENDS after announcing the first probable e-cigarette and vape-caused lung injury (EVALI) case in the country last month. Apart from stringent regulation on sale and use of ENDS, the FDA also sought mandatory graphic health warning on packages of vapes as well as prohibition on advertisements of the products with the youth as target.The Department of Trade and Industry (DTI), for its part, is also pushing for strict regulation of ENDS. DTI Undersecretary Ruth Castelo told lawmakers that vapes and e-cigarettes should be regulated the same way as combustible tobacco is regulated by government. Their use by and sale to minors or those 17 years old and below should be banned.

DOH ranks 2nd in pulse Asia's Ulat Ng Bayan survey Republic of Philippines Department of Health 1st Dec 2019
The Department of Health (DOH) today announced that it ranked 2nd (78%) in majority approval scores among government agencies in the September Ulat ng Bayan Report of Pulse Asia. DOH ranked next to the Department of Education (DepEd) with an 81% approval rating. Duque also ranked second (67%) to DepEd chief Leonor Briones (69%) in approval rating among select cabinet members according to the same report.

Lawmakers question government’s readiness to implement UHC Law Manila Bulletin News 1st Dec 2019
Lawmakers questioned Wednesday the readiness of the Department of Health (DOH) and the Philippine Health Insurance Corp. (Philhealth) to implement Republic Act 11223 or the “Universal Health Care (UHC) Law”. At Wednesday’s Department of Health’s briefing on UHC Law and its implementing rules and regulations (IRR), Nueva Ecija Rep. Estrellita Suansing asked DOH Undersecretary Mario Villaverde about the DOH’s preparedness to implement the law in terms of health facilities, staffing and funding. During the briefing, Philhealth president and chief executive officer Ricardo Morales expressed Philhealth’s readiness to implement the program, citing its viable financial standing.

PhilHealth implements new premium rates in line with UHC Philstar 28th Nov 2019
The Philippine Health Insurance Corp. (PhilHealth) has come up with a circular on the new premium rates in line with the implementation of the Universal Health Care (UHC) act. Based on PhilHealth Circular No. 2019-0009 signed by PhilHealth president and chief executive officer Ricardo Morales, the monthly premium rate of its members shall increase by 0.25 percent or from 2.75 percent this year to three percent in 2020. This means that those earning a monthly basic salary of P10,000, for instance, will have to pay a monthly premium of P300 in 2020, up from P275 this year. The circular, however, showed that PhilHealth had adjusted the salary brackets covered by each premium category. For instance, those who will be getting a salary of P10,000 to P59,999.99 next year will have to pay P300 to P1,800 premium, while those with an income of P60,000 will have to pay P1,800. Under the current premium ratings, PhilHealth members who receive P10,000 to P49,999.99 pay P275 to P1,375 in premium every month. Those earning P50,000 pay P1,375.

When antibiotics fail BusinessMirror 23rd Nov 2019
Antimicrobial resistance (AMR) could take 10 million lives annually by 2050, unless the health-care sector, governments, stakeholders and the people work together fast to address this challenge, experts warned. The magnitude of this global threat over the next 30 years, based on a report prepared by the United Nations Ad hoc Interagency Coordinating Group on AMR, was raised by Pfizer Philippines Country Brand Lead Rene Carlo B. Pascual at a recent media roundtable discussion as part of the observance of World Antibiotic Awareness Week, which runs until November 24, 2019. AMR among microorganisms, such as bacteria, viruses and fungi, is mainly caused by improper use of antibiotics. This leads to infections being incurable and at a high risk of spreading to others.

ICT

Philippines' 'fake news' farms thrive due to politicians, industry players — report philstar.com 6th Dec 2019
MANILA, Philippines — The complicity of politicians and industry players in the political consultancy business, advertising and PR firms and digital influencer industry make way for the fake news industry in the Philippines, according to a report. Latvia-based NATO Strategic Communications Center of Excellence (StratCom) looked into the industry of political trolling in the Philippines as "an ever-expanding and financially lucrative industry." The report co-authored by University of Massachusetts Amherst associate professor Jonathan Corpus Ong and De La Salle University associate professor Jason Vincent Cabañes noted that trolls are ready to expand their services globally that may possibly influence Western democratic elections.

3rd telco takes BOI pledges to P1T mark Malaya 6th Dec 2019
The Board of Investments (BOI) breached its full-year target of P1 trillion as of October, reaching a record P1.040 trillion in investment approvals. The investment was boosted by a single project, Dito Telecommunity Corp.’s P210-billion project as the third major telecom player.The 10-month figure is up 139.6 percent from P434 billion in the same period last year. Foreign investments accounted for P330.9 billion, a 9-fold increase from just P36 billion in 2018.Local investments hit P709.1 billion, up 78.2 percent By nationality, Singapore remains the biggest foreign investor to date with P170 billion in capital; China now at second with P84.9 billion and South Korea, third with P39.1 billion. Projects registered as of October will create 52,554 jobs once in commercial operation.

A data-driven Philippines for 2020 HRM Asia 2nd Dec 2019
Technology and digitalisation will shape hiring and requirement trends across the Philippines next year. Businesses in the Philippines in 2020 will take on a more data-driven approach, strengthening the demand for technologically and digitally savvy professionals. Many of them will see organisation-wide transformations. Professionals with a commercial mindset who can leverage their industry expertise with available data and new technology platforms to make effective business decisions will be in greater demand. These are some of the findings from the Robert Walters Salary Survey 2020. The specialist recruitment firm predicts a rise in demand for hybrid skills and ‘glocal’ talent while potential and transferable skills are expected to be in stronger demand as more companies embrace digitalisation.

Internet innovations key to a stronger and more connected Philippines Inquirer 2nd Dec 2019
A connected home is the first step towards a digitally powered nation, as the home is where most learnings in life start, according to Senior Vice President and Head of Broadband Business Martha Sazon at the recently concluded AfricaCom 2019 at Cape Town International Convention Center in South Africa. Speaking at a VIP forum, Sazon discussed the business case of growing prepaid Internet penetration in a developing society such as the Philippines, where similar to South Africa, the mid to lower income segments are predominant and prepaid as a payment option is most relevant. She divulged on Globe’s broadband network strategy of pioneering prepaid home internet innovations as one of the primary catalysts in the digital transformation of the Philippines.

Philippines and BCB Blockchain to Work Together on Smart Cities Cointelegraph 23rd Nov 2019
Singapore-based blockchain firm BCB Blockchain has signed a memorandum of agreement (MoA) with a branch of the Philippines’ Department of Science and Technology (DOST) to support the development of local smart cities. Per a Nov. 23 press release, BCB Blockchain contributed $300,000 to support incubators and startup accelerators in the Philippines by signing an MoA with the Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEETRD).

Bolstering digital transactions in PH through QR Ph The Manila Times 27th Nov 2019
Bangko Sentral ng Pilipinas, led by Governor Benjamin Diokno, together with the Philippine Payments Management Inc. (PPMI), spearheaded the official launch of QR Ph, the Philippines’ national QR code standard for digital payments, at the BSP headquarters in Manila recently. RCBC President and CEO Eugene Acevedo (left) and UnionBank president and CEO Edwin Bautista conducted a fund transfer transaction to the PayMaya account of BSP Governor Diokno by simply scanning the QR Ph code in his PayMaya app, the first e-wallet in the country to adopt the national QR code standard. PayMaya, RCBC and UnionBank, along with Landbank, AUB, and Chinabank, are among the first financial institutions to pilot QR Ph, allowing instant and seamless fund transfers among account holders as part of the government’s National Retail Payment System (NRPS) goals of raising the percentage of digital transactions in the country to 20 percent by 2020.

First PH cybersecurity academy launched The Manila Times 24th Nov 2019
Global cybersecurity solutions provider Palo Alto recently announced a collaboration with Asia Pacific College (APC) to launch the first Cybersecurity Academy in the Philippines. The program is designed to nurture the next generation of the cybersecurity workforce in the Philippines. Starting from February 2020, APC will roll out new cybersecurity courses under the academy curriculum to students across all disciplines. In addition to the School of Computing and Information Technologies, students from the School of Management, School of Multimedia and Arts, and School of Engineering would also have the opportunity to enrol in cybersecurity-related courses.

IR 4.0: The challenge of being myopic The Manila Times 21st Nov 2019
I have written a number of articles relating to Industry 4.0 and how the Philippines can take advantage of this especially in certain industries where automation will be relevant. In particular, I shared the drivers of Industry 4.0 and also wrote about the readiness (if at all) of the country in terms of adopting technologies, and capabilities that would increase the output and productivity of companies. Very recently, the Department of Trade and Industry (DTI) announced a partnership with data scientists to build the artificial intelligence (AI) industry road map. This road map, according to a DTI press release, is meant to include an analysis of the impact of AI on Philippine industries and workforce, as well as policy and program recommendations such as AI training programs and laboratories. With the objective of being an “AI powerhouse,” the agency is also looking into establishing a task force composed of academicians, government officials, and industry stakeholders for a more consultative approach.

Infrastructure

SMC seeks MRT-3 extension to Bocaue, Bulacan philstar.com 9th Dec 2019
Conglomerate San Miguel Corp. (SMC) is seeking to extend its ongoing P63-billion Metro Rail Transit Line 7 (MRT-7) project farther to Bocaue, Bulacan. SMC president and COO Ramon Ang said the company has submitted a proposal to extend the MRT-7 to Bocaue from the current end point in San Jose Del Monte. The MRT-7 project is a planned 23-kilometer railway with 13 stations that will connect San Jose Del Monte with North Avenue in Quezon City, bringing down travel time from Manila to Bulacan to just about 34 minutes.

DoTr eyes Swiss challenge for Bohol airport O&M by Q1 Business World 6th Dec 2019
THE Department of Transportation (DoTr) is hoping to conduct a Swiss challenge for Aboitiz Group’s unsolicited proposal for the operations and maintenance (O&M) of Bohol-Panglao International Airport (BPIA) by first quarter of 2020. “We hope by fist quarter next year. We have yet to commence negotiations with proponent on terms of concession agreement,” DoTr Assistant Secretary Goddes Hope Oliveros-Libiran said in a phone message to BusinessWorld on Wednesday when asked about the timeline for the Swiss challenge on the project. The Aboitiz Group, through its infrastructure arm, Aboitiz InfraCapital Inc. (AIC), had submitted the unsolicited proposal for the project which was approved by the National Economic and Development Authority (NEDA) Board last week. The Swiss challenge is the competitive bidding process where third party companies are invited to submit counterproposals to a project, which the original proponent has the right to match.

Dominguez, Pernia due in Tokyo to discuss progress of key Japan-backed infrastructure projects Business World 4th Dec 2019
THE government’s economic team will meet Japanese officials this week in Hakone, southwest of Tokyo, to discuss the progress of big-ticket infrastructure projects supported by Japan.Finance Secretary Carlos G. Dominguez III and Socioeconomic Planning Secretary Ernesto M. Pernia will represent the Philippines Friday during the ninth high-level meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation.Meanwhile, the Japanese delegation will be led by Hiroto Izumi, special advisor to the Prime Minister. Mr. Dominguez said in a statement Wednesday that the two countries regularly meet to ensure a “fast and sure” approach in implementing the Japan-funded projects under the “Build, Build, Build” program.The two sides met in Clark earlier this year while the very first meeting was held in March 2017 in Tokyo.

Duterte creates Philippine Railways Institute Rappler 2nd Dec 2019
MANILA, Philippines – President Rodrigo Duterte created a research and training center for personnel operating railways in a bid to improve the safety and efficiency of land transportation in the country. Called the Philippine Railways Institute (PRI), it was created through Executive Order No 96, signed by Duterte on November 21. A copy was made public on Thursday, November 28. The PRI, said the EO, would be the "planning, implementing, regulating and administrative entity for the development of human resources in the railway sector." It must help ensure "efficient, reliable, and safe railway transportation services."

Duterte okays NAIA rehab project Manila Bulletin Business 29th Nov 2019
President Rodrigo R. Duterte has given the green light to the unsolicited proposal from a consortium of big private businesses to modernize the aging Ninoy Aquino International Airport (NAIA), the Department of Finance (DOF) announced yesterday. Finance Secretary Carlos G. Dominguez III said the ₱102-billion NAIA rehabilitation project was approved during the National Economic and Development Authority (NEDA) Board meeting chaired by President Duterte yesterday. The unsolicited proposal was submitted by Ayala Corp., Aboitiz Equity Ventures, Alliance Global Group, Inc., Asia Emerging Dragon, Filinvest Development, JG Summit and Metro Pacific Investments Corp. that sought the operation and upgrade of Metro Manila’s main air gateway.

Duterte taps more companies as he reboots Philippine infrastructure program Business World 27th Nov 2019
WHEN Philippine President Rodrigo Duterte took office in 2016, he promised $165 billion in spending to “build, build, build” roads and railways in the Southeast Asian nation. The program consisted of 75 key projects — including a railway stretching the length of Luzon, the country’s main island — along with thousands of smaller ones like schools, to be funded mostly from development loans and the government’s budget. Halfway through the president’s six-year term, only two of those key projects have been completed. Most have run into bureaucratic delays, or faced problems like acquiring land and financing to get off the ground. Now Mr. Duterte is revamping the plan and giving businesses a bigger share of the projects, after earlier shying away from privately led projects due to financing risks and delays. That’s a boon for companies like Megawide Construction Corp., which is already planning bids for rail and other infrastructure projects. “It’s a good opportunity for us,” said Edgar Saavedra, chief executive officer of Megawide. “This is like a rebirth for the Philippines.”

Legislation

Impact of moves vs water firms flagged | BusinessWorld Business World 12th Dec 2019
METRO MANILA’S two water providers warned of the implication of the government’s move to revoke the extension of their concession, which they learned only on Wednesday morning, while a foreign business group and an economist said the wider impact on investor confidence bears watching. “The revocation of the (Metropolitan Waterworks and Sewerage System) board resolution on the extension of our concession up to 2037 has very serious, grave repercussions on our capability to support water security and also support investments in the compliance of the Clean Water Act,” Ramoncito S. Fernandez, president and chief executive officer of west zone concessionaire Maynilad Water Services, Inc., said in an interview after a hearing at the House of Representatives on supposed onerous provisions in water companies’ contracts with the government.

ICC junks Morales, del Rosario complaint vs China’s Xi Jinping Daily Inquirer 6th Dec 2019
The International Criminal Court (ICC) has junked the communication made by former Ombudsman Conchita Carpio-Morales and former Foreign Affairs Secretary Albert del Rosario against China and its president, citing lack of jurisdiction on the case. ICC said in its report on preliminary examination activities issued on Thursday that the crimes against humanity complaint lodged against Chinese officials led by Chinese president Xi Jinping cannot be acted upon as China is not a state party to the Rome Statute — the treaty that established the ICC.

Duterte won’t pay P7-B compensation to Manila Water Daily Inquirer 6th Dec 2019
President Rodrigo Duterte will not pay the P7.39-billion compensation the government was required to pay Manila Water Co. over a recent decision of the Singapore arbitration court. “‘Hindi ako magbayad ng P7 billion, letse ka. Pakain ko ‘yung pera sa kanila [I won’t pay the P7 billion, you idiot. I’ll make them eat the money],” Duterte said Thursday during a situation briefing on Typhoon Tisoy’s onslaught in Legazpi, Albay. he Permanent Court of Arbitration in Singapore earlier ordered the Philippine government to pay the Ayala family-owned Manila Water P7.39 billion to compensate it for losses suffered between June 2015 to November 2019 for the non-implementation of water rate hikes. Last year, the government was also ordered to pay the Manny Pangilinan-led Maynilad P3.4 billion by the same Singaporean court due to the Philippines’ refusal to allow it to increase prices from 2013 to 2017. According to Duterte, owners of the two biggest water utilities in the country milked billions from the government and the people over their disadvantageous water contract with the state. Maynilad and Manila Water distribute water in Metro Manila and nearby provinces under agreements signed with the Metropolitan Waterworks and Sewerage System (MWSS) during the Ramos administration in 1997.But a Department of Justice (DOJ) review found out that a dozen of “onerous” provisions were stipulated in the deal.

House panel starts tackling bills regulating vaping Manila Times 5th Dec 2019
After President Rodrigo Duterte ordered the ban on vaping in public places, the House of Representatives has started to tackle bills regulating electronic cigarettes and other similar devices in a joint meeting of the health and trade and industry commitees. the 18th Congress seeking to regulate the use, sale, packaging, distribution and advertisement of vape products, electronic cigarettes, smoking devices, nicotine and non-nicotine delivery systems (Ends), and heated tobacco products (HTPs).Valenzuela City Rep. Weslie Gatchalian, chairman of the House Committee on Trade and Industry, said the committee “is duty-bound to hear, deliberate and recommend the approval of the House of Representatives on a policy that will be most effective to advance the interests and promote the welfare of the people.” “The use of ENDS and HTPs is now a national concern, so much so that the President recently issued a directive banning the importation and use of Ends and HTPs in public spaces,” he said.

Congress leaders: 2020 budget bill OK next week Business Mirror 4th Dec 2019
CONGRESS leaders have moved to avert the prospect of the government operating under a reenacted 2019 budget by January should lawmakers miss a deadline to ratify and submit to Malacañang for signing into law the final reconciled version of the P4.1-trillion 2020 budget bill before they adjourn for the Christmas recess on December 20.“I do not expect hitches,” Senate President Vicente Sotto III told the BusinessMirror, adding he expects the annual money measure to be “ratified by next week.” This, as Senate Minority Leader Franklin Drilon disclosed Tuesday that the Senate-House conference committee is on track to meet their deadline, forming a “small committee” to identify conflicting provisions in the two chambers’ versions that are likely to delay the process.“The bicam [two-chamber conference committee] authorized Sen. [Juan Edgardo] Angara and Cong. [Isidro] Ungab to constitute a small committee to go over the conflicting versions,” said Drilon. “I have worked with Senator Angara and Congressman Ungab in the past congresses. They are competent and reasonable legislators, and I am confident they can finish their task before we adjourn on December 20,” he added.

AMLC pushes for changes in RA 9160, 9372 Malaya 4th Dec 2019
THE Anti-Money Laundering Council (AMLC) is pushing for amendments to the Philippines’ anti-money laundering and human security laws to raise the country’s compliance to international standards. In a statement on Tuesday, the Bangko Sentral ng Pilipinas (BSP) said the AMLC made the push after deficiencies were found in the country’s technical compliance with international anti-money laundering and counter-terrorism financing standards, and in the effectiveness of its existing mechanisms. One of the salient provisions of the AMLC’s proposed amendments to Republic Act 9160, or the “Anti-Money Laundering Act of 2001,” is the inclusion, as covered persons, of real estate developers, brokers and sales agents to perform obligations of customer due diligence, recordkeeping and suspicious transaction reporting. The country’s financial intelligence unit also wants to include additional predicate offenses to money laundering, such as certain tax crimes; and proliferation financing by managing the trade in strategic or dual-use goods, which it identified as “materials that may be utilized in manufacturing nuclear weapons.”

Manufacturing

Campi, TMA: Strong finish for automotive industry despite missed overall sales goal | Elijah Felice Rosales BusinessMirror 12th Dec 2019
The automotive industry is poised for a strong finish this year after growing sales by more than 10 percent in November, but is also headed to miss its target of selling 410,000 units overall. In a joint report on Wednesday, the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and Truck Manufacturers Association (TMA) said November sales rose 10.25 percent to 34,465 units, from 31,258 units during the same month last year. The passenger car (PC) and the commercial vehicle (CV) brackets both posted growths, although they are too far ahead.

P30B required to boost manufacturing sector: DTI Malaya 5th Dec 2019
Up to P30 billion will be needed in the next three years to revitalize the country’s manufacturing sector, the Dept. of Trade and Industry yesterday said. Ramon Lopez, DTI Secretary, in a summit of the country’s top manufacturing firms said the allocation will be used to upgrade industrial processes through new business models and soft loans, grants vouchers, reduced trade barriers and enforce products standards. Proposed projects will prepare firms, industries and workers for the future of work, while support funds will be made available to facilitate transformation of firms to new technologies, Lopez said. The idea is that good industrial policy is behind the success of manufacturing in Southeast Asia.

Travel & Tourism

DoT positioning Western Visayas for food tourism | BusinessWorld Business World 12th Dec 2019
WITH Western Visayas considered a possible focus of food tourism, the Department of Tourism (DoT) is now gearing up to promote the region’s farms as possible destinations. During his visit in Iloilo City Friday for the fifth and last leg of “Kain Na! Culinary and Travel Festival,” Edwin R. Enrile, Tourism Undersecretary for legal and special concerns, said the food and farm products of Panay are varied and usually fresh from the farm or the sea. “When you think about Western Visayas and Iloilo you always think about two things why people come here — the cuisine and the culture. You have the freshest ingredients, seafood, and all that,” Mr. Enrile said in an interview Friday.

Philippine Airlines expands to Perth Australia. Airline Ratings 6th Dec 2019
Tourism and international student numbers from the Philippines to Australia are set to be boosted by the announcement of a new direct Perth-Manila service by Philippine Airlines. The non-stop service will commence in March 2020 with four flights each week. Perth Airport Chief Executive Officer Kevin Brown said the new service between Perth and Manila was a win for WA business, tourism and exports, and would inject an additional 70,000 seats into the market. The Philippine Airlines service adds to the momentum of new services over the last year.