| National Affairs
Senators to boycott House-backed Con-Ass Malay Business Insight 18th Jan 2018
SENATORS have agreed not to participate in the House-initiated constituent assembly that would convene the Senate and the House of Representatives to amend or revise the 1987 Constitution. The consensus was reached during an all-senators’ caucus Tuesday, virtually putting on hold the Con-Ass called by the House of Representatives. The House on Tuesday night passed Resolution No. 9 convening the House and the Senate into a Con-Ass to amend or revise the Constitution, a move seen by many as done haphazardly and with haste. Senate leaders said the House resolution would go through the usual legislative process: it has to be transmitted to the Senate and the Senate will refer it to a committee.
DOF submits CTRP Package 2 to Congress Department of Finance 16th Jan 2018
The Department of Finance (DOF) has formally submitted to the House of Representatives this week the second package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) that aims to reduce corporate income tax (CIT) rates and modernize fiscal incentives to investors. Package 1 of the CTRP, also known as the Tax Reform for Acceleration and Inclusion Act (TRAIN), was signed into law by President Duterte last Dec. 19. It slashed personal income tax rates–the first time that the government did so by law–while raising additional revenues for infrastructure and social services through the repeal of several non-essential exemptions to the value-added tax (VAT); adjustments in the excise tax rates for fuel, coal and automobiles; and a tax on sugar-sweetened beverages among other measures. The CTRP’s Package 2, which the DOF designed to be revenue-neutral, proposes to gradually lower the CIT rate from 30 to 25 percent while modernizing incentives for companies to make these “performance-based, targeted, time-bound, and transparent,” Finance Undersecretary Karl Kendrick Chua said. Chua said that through this tax reform package, the government would be able to ensure that incentives granted to businesses generate jobs, stimulate the economy in the countryside and promote research and development; contain sunset provisions so that tax perks do not last forever; and are reported so the government can determine the magnitude of their costs and benefits to the economy.
Cha-cha a step closer as House OKs Con-ass BusinessMirror 16th Jan 2018
The House of Representatives on Tuesday adopted a resolution convening Congress into a constituent assembly (Con-ass) to study and finalize the draft amendments to the 1987 Constitution, with members of the majority this time opting to finish the deliberations to prevent the minority bloc from using lack of quorum anew to delay its passage. Under Con-ass, it’s the sitting lawmakers themselves—congressmen and senators—who will serve as the delegates. Based on the recommendation of the House subcommittees formed to outline revisions to the 1987 Charter, the proposed shift to federal system of government will also lead to the further liberalization of the country’s economy, particularly on foreign equity. This is after a subcommittee of the House Committee on Constitutional Amendments proposed to delete the 60-40 provision on foreign-equity sharing in the 1987 Constitution. The subcommittee, chaired by Rep. Vicente Veloso of Leyte, said the proposal effectively provides for an “open economy.”
DTI pushes new approach to promote ease of doing business BusinessMirror 16th Jan 2018
THE government’s interagency task force on Ease of Doing Business (EODB) is speeding up reforms to improve the country’s competitiveness. Trade Secretary Ramon M. Lopez said the strategy is to pursue a “whole of government approach,” where all instrumentalities of the government involved in business regulations take a unified action in simplifying government processes and making them more business-friendly. “Remember that competitiveness and ease of doing business is No. 3 in the President’s socioeconomic agenda. The executive branch, both national government agencies and local government units, and the Legislative branch are working double time so that businesses could benefit from these reform initiatives,” Lopez said. The trade secretary reported on the latest reforms initiated by the Executive branch.
More projects readied for NEDA Board’s first meeting for 2018 BusinessWorld 3rd Jan 2018
MORE BRIDGES across the archipelago, a video surveillance system for local governments as well as search-and-rescue helicopters are among priorities for consideration at the National Economic and Development Authority (NEDA) Board’s first meeting for 2018. “Unahin namin sa NEDA Board ‘yung in-approve namin sa ICC (The NEDA Board will start with what was approved by the Investment Coordination Committee-Cabinet Committee). The economic managers will still have to decide because there are… many comments on the projects,” NEDA Undersecretary Rolando G. Tungpalan told reporters on Thursday last week. “Safe Philippines, tapos (and) bridges… 30-plus across archipelago, then helicopter acquisition ng coast guard — ‘yan ang priority,” he added.
Customs
Fraud-proof excise-tax stamp program seen completed soon BusinessMirror 17th Jan 2018
Much-improved and more secure excise-tax stamps for cigarettes and alcohol products are scheduled for rollout within the first three months of the year, according to the Department of Finance (DOF). Finance Undersecretary Antonette C. Tionko said the new tax stamps for the various “sin” products are to be printed by Apo Production Inc., the service provider for printing government tax stamps. “I think the BIR [Bureau of Internal Revenue] is still reviewing it. They target [the rollout] in the first quarter,” Tionko said. The BIR is responsible for the collection of excise tax on cigarettes and alcoholic beverages. According to Finance Assistant Secretary Mark Dennis Y.C. Joven, the new tax stamps for cigarettes will come out ahead of the tax stamps for alcohol. Based on DOF data, the government expects to collect an estimated P56.231 billion from the excise on alcoholic beverages this year alone. For tobacco products, the government said some P126.969 billion is expected. The DOF previously said the Internal Revenue Stamps Integrated System program for alcoholic drinks would be pursued this year to help curb the illicit trade of alcoholic beverages in the country.
TradeNet in prep stage for launch by midyear 2018 BusinessMirror 9th Jan 2018
THE software for the Philippine government’s online trade-facilitation portal, TradeNet, has been delivered and is now undergoing procedures in preparation for going live in July 2018. The TradeNet software was delivered by the Department of Information and Communications Technology to the Department of Finance (DOF) last December 15, said a reliable PortCalls source from the finance department, which spearheads the project. Since it will be a globally available system, the software will be subjected to comprehensive security-hardening processes for at least 60 days, said the source, who is involved in the project. Hardening helps minimize security vulnerabilities by eliminating as many security risks as possible from the system. The DOF will involve the private sector sometime in February in comprehensive functional tests, while regression testing and optimization will be performed in April. If all goes according to schedule, the system will go live in July, the source said. The online platform will allow traders of commodities to apply for their import and export permits online, securing a faster and more convenient application process. It aims to connect 66 trade regulatory agencies and 10 economic zones involved in approving import and export permits and other trading requirements. TradeNet will also serve as the country’s National Single Window (NSW), a prerequisite to connect to the Asean Single Window (ASW), a regional initiative to speed up cargo clearance and promote economic integration by enabling the electronic exchange of border documents among the organization’s 10 member-states.
PH Customs revives Post-Clearance Audit Group Port Calls Asia 8th Jan 2018
The Philippine Bureau of Customs (BOC) has formally reactivated its Post Clearance Audit Group (PCAG) to scrutinize and validate the customs records of importers and customs brokers. Customs Commissioner Isidro Lapeña on December 20 signed Customs Memorandum Order (CMO) No. 32-2017, which reactivates the PCAG, formerly known as Post Entry Audit Group (PEAG). The reactivation of PCAG is pursuant to Executive Order (EO) No. 46 series of 2017, which was signed by President Rodrigo Duterte on October 20, 2017, transferring back the post-clearance audit function to BOC from the Department of Finance (DOF) and renaming PEAG as PCAG. The group is to be headed by an assistant commissioner and directly supervised by the customs commissioner.
PH online trade facilitation portal TradeNet for launch by July Asia Customs & Trade 8th Jan 2018
The software for the Philippine government’s online trade facilitation portal, TradeNet, has been delivered and is now undergoing procedures in preparation for going live in July 2018. The TradeNet software was delivered by the Department of Information and Communications Technology (DICT) to the Department of Finance (DOF) last December 15, according to a reliable PortCalls source from the finance department, which spearheads the project.p
Bureau of Customs eyes full automation in 2018 Rappler 8th Jan 2018
To reduce red tape, Bureau of Customs (BOC) Commissioner Isidro Lapeña wants to fully automate their processes in 2018. "Trade facilitation will will be my emphasis this year. It will be on the full automation. We will be working on that," said Lapeña in a mix of English and Filipino on Saturday, January 6. The official believes automating BOC's processes will streamline their services and help reduce corruption within the bureau. For now, BOC will continue its 5-day mandatory time in processing transactions. (READ: BOC posts record high P46.47-B collection in November)
Philippines May Soon Ratify FTA With European States Tax News 8th Jan 2018
Having endorsed the deal, the President of the Philippines, Rodrigo Duterte, has forwarded on a bill to ratify the free trade agreement with the European Free Trade Association states to the Senate. The deal was signed in 2016 between the Philippines and the EFTA states: Switzerland, Iceland, Norway, and Liechtenstein. It will enter into force once it has been ratified by all parties. According to EFTA, when the deal becomes effective, the EFTA states will abolish all customs duties on imports of industrial products, including fish and other marine products, from the Philippines. The Philippines will gradually eliminate customs duties on industrial products, including fish and other marine products, originating in an EFTA state. Some product lines, notably in the area of fish and other marine products, are excluded from tariff elimination or reduction. The tariff concessions for industrial products including fish and other marine products are found in annexes II and III of the deal.
Defense & Security
Kim: US to continue flight, naval operations Inquirer 11th Jan 2018
The United States will continue to conduct naval operations and overflights in the South China Sea amid China’s reported continuing fortification of man-made islands in the disputed sea. US Ambassador to the Philippines Sung Kim said such operations were meant to ensure freedom of navigation and flight in the South China Sea, where seven nations including the Philippines have overlapping claims. Asked how the US posed a deterrent to prevent China from continuing to build in the South China Sea, Kim said the US was “doing everything possible” to ensure freedom of navigation and freedom of flight in the vital sea lanes through which about $3 trillion in global trade passes each year. “Our role now is best performed in making sure to protect those important international rights… and that we continue to do in a variety of ways including conducting freedom of navigation operations,” Kim said.
Philippines, Indonesia agree to strengthen maritime patrols along porous borders Arab News 10th Jan 2018
The Philippines and Indonesia have agreed to intensify patrol operations amid the threat of terrorism in the region. This was the consensus reached during the 36th Republic of the Philippines–Republic of Indonesia Border Committee Chairmen’s Conference held in Davao City Jan. 8-9. Lt. Gen. Benjamin Madrigal, chief, Armed Forces of the Philippines (AFP) Eastern Mindanao Command (Eastmincom), led the Philippine delegation, while Rear Admiral Didik Setiyono, commander of the Eastern Fleet Command, headed the Indonesian one. The Committees deliberated on matters of common concern to both countries.
Economics
Competition body zeroes in on 10 sectors in study BusinessWorld 18th Jan 2018
THE PHILIPPINE COMPETITION COMMISSION (PCC) is embarking on a study of anti-competitive practices in 10 priority sectors that may touch on the impact of a contentious deal involving the country’s telecommunication duopoly. Apart from telecoms, PCC Commissioner Stella Luz A. Quimbo announced in a briefing in Makati City on Wednesday that these sectors are rice, meat and poultry, pharmaceuticals, air transportation, land transportation, agricultural credit, digital commerce, retail, and certain areas of manufacturing. The PCC is tapping third-party experts to undertake the market study, citing its limited resources. The review is expected to be completed within the year.
DTI-EMB eyes approval of 2018-2022 PEDP, bares 2017 accomplishments BusinessMirror 16th Jan 2018
THE Department of Trade and Industry (DTI) is set to submit on January 26 the initial draft of the 2018-2020 Philippine Export Development Plan (PEDP) to President Duterte, expecting to get the President’s approval in the middle of the year. With the inclusion of the comments from Economic Development Cluster (EDC) members, the amended plan will be presented by the DTI’s Export Marketing Bureau (EMB) to the agency’s Excom by the end of the month; EDC Excom and Council on February 9; and the EDC in the last week of February. The final blueprint will then be tendered in March to President Duterte who is expected to affix his sign of approval in the second quarter of 2018. Besides the road map, the DTI-EMB bared accomplishments for its projects, activities and plans, including initiatives, such as capacity building for Filipino exporters of halal products, facilitation of market-access requirements, together with the Philippine Accreditation Bureau, and marketing and promotions of local halal products and services to major halal markets through its various Outbound Business Marketing Mission (OBMM).
No pressure for now to tweak policy -- BSP BusinessWorld 15th Jan 2018
DOMESTIC CONDITIONS affirm the central bank’s decision last month to keep interest rates steady despite rising global yields, with the Bangko Sentral ng Pilipinas (BSP) chief saying monetary authorities do not feel pressured to tweak policy settings given current conditions. “There is limited evidence of overheating or the buildup of financial stability risks based on an assessment of inflation dynamics as well as output, liquidity, and credit conditions over the policy horizon,” BSP Governor Nestor A. Espenilla, Jr. said in a recent e-mail interview.
Special Report: US, Korea investments falter in 2017, as China-Japan rise philstar.com 15th Jan 2018
American and Korean investments in the Philippines plunged in 2017 behind security and other business concerns, while China came roaring back to life due to its renewed friendship with the country, and Japan continued to view Southeast Asia’s fastest growing economy as a favorable investment destination. Data obtained by The STAR from two of the country’s largest investment promotion agencies, the C and the Board of Investments (BOI), showed approved pledges from Korea plummeted 92.61 percent to P873.15 million in 2017 from P11.82 billion in 2016. Combined investment pledges approved by both agencies from American investors also took a nosedive last year, dropping 69.62 percent to P8.357 billion from P27.51 billion in 2016. But while investment pledges from the two economic powerhouses have significantly declined last year, two other economic giants are picking up the slack. The renewed ties between the Philippines and China show fruitful signs as reflected by the increase in the value of investment pledges coming from the world’s second largest economy. Meanwhile, Japan has remained a steady partner for the Philippines amid changes and adjustments in the first full year of the Duterte administration.
DOF: PH loses P300-B revenues yearly from corporate taxes, perks Inquirer 11th Jan 2018
The government loses more than P300 billion in revenues each year from the wide array of tax and other perks being enjoyed by big corporations, highlighting the need for the rationalization of incentives for investors under the second tax reform package, the Department of Finance said Thursday. “Income tax holidays and special rates account for P86.25 billion of the revenue losses, while custom duty exemptions account for P18.4 billion. Exemptions from paying the value-added tax on imports led to P159.82 billion in foregone revenues; and local VAT, P36.96 billion, although part of this tax will eventually have to be refunded because these are imposed on exporters,” Finance Undersecretary Karl Kendrick T. Chua said in a statement, citing 2015 data.
PHL merchandise exports seen to grow by double digits in 2017 BusinessMirror 9th Jan 2018
PHILIPPINE merchandise exports are projected to grow double digits in 2017, with the expected sustained positive performance of major electronics and nonelectronics sectors in November and December. The positive performance of six out of nine subsectors of the electronics industry—Semiconductors, Office Equipment, Communication/Radar, Consumer Electronics, Electronic Data Processing and Control and Instrumentation—is expected to contribute to the projected double-digit full-year export growth. Similarly, exports of nonelectronic goods, such as Forest Products, Mineral Products, Footwear, Coconut Products, Sugar Products, Textile Yarns/Fabrics, and Furniture and Fixtures, are projected to sustain their significant growths in the next two reporting periods. Philippine merchandise exports have maintained their double-digit positive performance in the first 10 months of 2017 compared to the same period in 2016, increasing by 11.68 percent, based on preliminary data from the Philippine Statistics Authority.
Government warns firms against taking advantage of TRAIN | BusinessMirror BusinessMirror 3rd Jan 2018
The government vowed to intensify its market- monitoring activities to prevent unscrupulous manufacturers and retailers from unduly jacking up prices due to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law. The Department of Trade and Industry (DTI) on Wednesday also called on retailers and manufacturers to absorb the “minimal” impact of TRAIN on most products.
Philippines population to hit 107 million in 2018 philstar.com 3rd Jan 2018
From 105.53 million last year, the country’s population will rise to 107.19 million by the end of 2018, the Commission on Population (PopCom) said yesterday. Citing projections by the Philippine Statistics Authority based on the latest census in 2015, PopCom executive director Juan Antonio Perez III said the population was estimated to grow to 107,190,081 by Dec. 31 from 105,377,586 in 2017. Perez said the increase would be boosted by some 1.8 million babies expected to be born this year, representing a growth rate of 1.69 percent. According to Perez, the lifting of the temporary restraining order of the Supreme Court on contraceptives will not have a direct impact on the population this year.
P72 B ecozone investments on hold, await Palace OK philstar.com 3rd Jan 2018
About P72.4 billion worth of economic zone development projects are still on hold as of end-2017 as proponents await the presidential proclamations of these sites before starting construction and operation. “We have 37 pending (applications), plus five from the previous administration, so 42 projects remain pending,” Philippine Economic Zone Authority (PEZA) manager for promotion and public relations Elmer San Pascual revealed. He said the proposed economic zones have a combined investment amount of P72.4 billion. “It’s just the first year in office of President Duterte, so he has new people in the Palace. We are trying to understand the reason. One is they have new people in the Palace who are still learning the processes and then the Palace also has new requirements,” PEZA director general Charito Plaza said. Plaza last year raised concern over the delays on the proclamation of new economic zones that have resulted in applications piling up at the Office of the President. Under the current administration, PEZA said 35 ecozone applications with a total investment cost of P37.58 billion have been proclaimed. These were composed of 26 information technology (IT) centers, four IT parks, four manufacturing economic zones and one agro-industrial economic zone. Plaza said locator industries are waiting for their respective sites to be proclaimed first before commencing with the construction and operation of their facilities.
Energy
Nearly 5,500 MW power contracts stalled amid ERC vacuum philstar.com 17th Jan 2018
Nearly 5,500 megawatts (MW) of contracts need immediate regulatory action amid the ongoing crisis in the Energy Regulatory Commission (ERC), its chairperson said yesterday. During the Senate energy committee hearing yesterday, ERC chairperson Agnes Devanadera said the regulator is unable to decide on contracts covering 5,493.38 megawatts (MW) in supply due to lack of quorum. The pending contracts include 43 new certificates of commerciality (COC) equivalent to 2,977.89 MW, renewal of 47 expired COCs worth 1,971.49 MW, and 29 expired power supply agreements (PSAs) which cover 544 MW in supply. Philippine Independent Power Producers Association Inc. (PIPPA) said there is an urgent need to address this issue on COCs, PSAs and connection agreements. As a collegial body, the presence of at least three members of the commission is needed to constitute a quorum to enable the ERC to adopt any ruling, order, resolution, decision or other acts in the exercise of its quasi-judicial and quasi-legislative functions.
DENR, mining firms discuss policy thrusts philstar.com 17th Jan 2018
The Department of Environment and Natural Resources (DENR) met with mining companies to thresh out issues affecting the sector. Without going into specifics, Mines and Geosciences Bureau (MGB) director Wilfredo Moncano told The STAR Environment Secretary Roy Cimatu on Monday met with the Chamber of Mines of the Philippines (COMP) and other non-member mines to discuss the government’s policy directions for mining. Moncano said one of the policies discussed was the setting of limits of the area to be used by a mining company at any time and the period within which progressive rehabilitation has to be done. Asked whether controversial issues such as open pit mining and approval of new mining projects were resolved MGB assistant director Danilo Uykieng said: “That is for the MICC (Mining Industry Coordinating Council) to discuss and report to the President.” The industry is hoping Cimatu can soon develop a more detailed plan to allow the mining sector to move forward.
Govt, citizens remain incurable optimists as new year ushers old, new challenges BusinessMirror 9th Jan 2018
OPTIMISM on infrastructure development is relative to an important facet: electricity. And such optimism has a basis, as electricity rates are likely to remain stable since more power-generation capacity is expected to flood the grid. On the other hand, pump prices may still continue to go up based on international oil market’s forecast. Francis Satunino Juan, one of the members of the transition committee at the Philippine Electricity Market Corp. (PEMC), said prices at the Wholesale Electricity Spot Market (WESM) are expected to continue to remain low this year, barring any unforeseen circumstances.
Alsons urges govt to sell output, not assets, of Mindanao power plants BusinessMirror 8th Jan 2018
AN official of Alsons Consolidated Resources Inc. (ACR) believes the best way to privatize hydroelectric power plants along the Agus and Pulangi Rivers in Mindanao is to sell the power-generating plants’ output rather than sell the assets. “Perhaps, the government can consider privatizing not the physical assets but per kilowatt-hour [kWh] generation, similar to the strips of generation capacity like what was done in Leyte,” said Joseph Nocos, ACR vice president for business development. Nocos was referring to the privatization of the Unified Leyte Geothermal Power Plants (ULGPP) conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to manage state-owned power assets and is operated by state-run National Power Corp. PSALM turned over the ownership of the government’s contracted capacities in these power plants to various Independent Power Producer Administrator, which now has the right to sell the capacity of the ULGPP. Nocos said this kind of approach would address some of industry stakeholders’ concerns that privatizing the assets will “undermine the patrimony of Mindanao.”
Financial Services
InstaPay platform rollout seen within next quarter BusinessWorld 18th Jan 2018
THE PUSH for electronic payments is expected to accelerate this year after industry players formalized arrangements with the Bangko Sentral ng Pilipinas (BSP), while work is under way for a new clearing house for real-time fund transfers. BSP Governor Nestor A. Espenilla, Jr. said that banks and financial technology (fintech) players are working to roll out the InstaPay platform within the second quarter, which would be dedicated to processing real-time and small-value transactions across banks and e-money wallets. The central bank targeted a first-quarter rollout for InstaPay, but this had to be pushed back amid technical issues that needed to be smoothed out for interbank transactions. The InstaPay will clear electronic fund transfers (EFT) across banks and e-wallets in real time, focusing on low-value transactions worth below P50,000. This would be the second automated clearing house after the Philippine EFT System and Operations Network (PESONet) was rolled out in November, which will process fund transfers in batches.
Philippines to form part of tracked banking data BusinessWorld 15th Jan 2018
THE PHILIPPINES will soon be part of global statistics on cross-border banking after it has been accepted as a reporting institution by the Bank of International Settlements (BIS). The Bangko Sentral ng Pilipinas (BSP) said the Philippines will join an “elite group” of less than 50 economies included in the international banking statistics (IBS) released by the global financial authority.
The battle for fintech space The Manila Times 12th Jan 2018
The Philippines has one of the youngest populations worldwide with a median age of 24 according to the Philippine Statistics Authority; a sweet spot for the country’s economic fortunes. It is also an indication that the country is an attractive market for the introduction of digital banking products. With a population base of 103 million, the Philippines has recorded an internet penetration rate of 55.5 percent and a 66.5 percent Facebook penetration rate based on internetworldstats.com data. It also has an amazing 117 percent penetration rate in terms of mobile subscriptions. Despite this, only 2% of retail transactions are done through digital payments and 98% of small financial transactions are in cash. Because of this potential, the Bangko Sentral ng Pilipinas wants to increase the share of digital payments to 20 percent of total transactions by 2020. The BSP is leading the implementation of the National Retail Payments System (NRPS) to shift more transactions to online processes in a cash-heavy economy.
More towns get access to financial services BusinessWorld 9th Jan 2018
OVER A THIRD of towns in the Philippines remained unbanked as of June 2017, although more areas gained access to formal financial channels compared to a year ago, results of a recent central bank survey showed. Some 571 local government units (LGUs) remained without banks as of the first semester, or 34.9% of 1,634 cities and municipalities. This improved from 589 unbanked areas in June 2016, the Bangko Sentral ng Pilipinas (BSP) said in a statement. Progress has been slow, with the decline in unbanked LGUs averaging at 0.9% annually from 2011 to 2016. A total of 11,343 bank offices and 19,500 automated teller machines (ATMs) are operating nationwide as of end-June, with branches growing by an annual average of 4% over the last six years. These platforms are “concentrated” in Metro Manila, Calabarzon, and Central Luzon, while the Cordillera Administrative Region and the Autonomous Region in Muslim Mindanao remained lagging, the BSP said in its latest Financial Inclusion report.
Microinsurance posts robust third quarter 2017 expansion BusinessMirror 8th Jan 2018
The Insurance Commission (IC) reported continued growth in microinsurance in September last year when the industry expanded by 30 percent, primarily on the basis of premium sales generated from mutual benefit associations (MBAs). According to Insurance Commissioner Dennis B. Funa, the continued growth of the microinsurance segment as measured by premium and contributions amounted to P5.17 billion in the first nine months of 2017, representing growth of 30.06 percent compared to only P3.97 billion in the same period in 2016.
BSP finalizes basic deposit account rules Manila Bulletin Business 8th Jan 2018
The Bangko Sentral ng Pilipinas (BSP) is expected to release the guidelines on banks’ offering of basic deposit account soon as part of an expansive plan to make financial products and services accessible to as many Filipinos as possible. “The BSP is finalizing the policy framework that will encourage banks to offer a ‘basic deposit account’ that will address the usual barriers in account opening such as high opening amount and maintaining balance, dormancy charges, and lack of identity documents,” the BSP said in a statement yesterday.
BSP in talks with ASEAN banks for fintech testing BusinessWorld 8th Jan 2018
THE BANGKO SENTRAL ng Pilipinas (BSP) is currently in talks with other Southeast Asian central banks to adopt regional standards in testing latest financial technology (fintech) products. Central banks from within the Association of Southeast Asian Nations (ASEAN) are considering a “regional sandbox,” BSP Governor Nestor A. Espenilla, Jr. said, which would essentially serve as a “one size fits all” scheme in trying out digital financial products. “What’s being discussed right now at the ASEAN level is creating a regional sandbox… where providers can come in and basically experiment, and we regulators can learn from it,” Mr. Espenilla told reporters last week. A regulatory sandbox provides emerging fintech firms some room to experiment in offering new products and services under close monitoring by the BSP, before they are covered by banking regulations. Mr. Espenilla said the Philippines and Singapore were among the central banks that attended initial discussions held in Bangkok, but clarified that these plans are “not yet” a done deal: “Right now, it’s in the phase of convincing other ASEAN countries to join.” The planned regional sandbox comes at a time of increased collaboration among Southeast Asian member-states with the ASEAN Economic Community in full swing, complemented by regional banking integration.
Food & Agriculture
Gov’t to rake in P52B from sugar tax Malay Business Insight 17th Jan 2018
The government expects to generate P52.13 billion this year from the collection of excise taxes on sugar-sweetened beverages and cosmetic procedures, data from the Department of Finance (DOF) showed. Specifically, the government expects to rake in P52.03 billion from the excise taxes on sugar-sweetened drinks, while excise tax collections from cosmetic procedures is only seen to contribute P100 million. The excise tax on sweetened beverages and cosmetic procedures are among the provisions included in the Tax Reform for Acceleration and Inclusion, the first package of the government’s comprehensive tax reform program(CTRP), which was signed into law as Republic Act 10963 last December 19. According to the draft revenue regulation (RR) of the Bureau of Internal Revenue (BIR) on sweetened beverages, drinks using purely caloric sweeteners, and purely non-caloric sweeteners, or a mix of caloric and non-caloric sweeteners will be taxed P6 per liter of volume capacity, while those using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener will be taxed P12 per liter. Products using purely coconut sap sugar and purely steviol glycosides will be exempt from the excise tax. Also excluded are all milk products, 100 percent natural fruit and vegetable juices, meal replacement and medically indicated beverages, as well as ground coffee, instant soluble coffee, and pre-packaged powdered coffee products.
PHL chicken supply down 30 percent BusinessMirror 17th Jan 2018
THE country’s dressed-chicken inventory at the start of the year declined by nearly 30 percent to 16,989.06 metric tons (MT), from 24,238.49 MT recorded a year ago, according to the National Meat Inspection Service (NMIS). NMIS data showed chicken purchased abroad accounted for more than half of the inventory as of January 1 at 8,922.42 MT. The figure was 1.71 percent lower than the 9,077.53 MT imported a year ago. The remaining volume consisted of locally produced chicken, according to NMIS data. The volume of locally produced chicken in cold storages fell by 46.79 percent to 8,066.63 MT, from last year’s 15,160.96 MT. On a monthly basis, local-chicken inventory during the period was 42.9 percent lower than the 29,752.89 MT recorded last December 4. The volume of dressed chicken in the market usually declines after the Christmas season, when cold storages are full to meet the increase in demand, according to industry sources.
Milk imports in January-September declined by 2.25% BusinessMirror 17th Jan 2018
THE country’s purchases of imported milk in January to September fell by 2.25 percent as the recovery of global prices made dairy products from abroad more expensive. The latest figures from the National Dairy Authority (NDA) showed that the country’s nine-month dairy import volume reached 2.024 million metric tons in liquid milk equivalent (MMT-LME), lower than last year’s 2.070 MMT-LME. However, the NDA noted that the value of the total imports during the reference period rose by 27.74 percent to P35.912 billion, from P28.114 billion a year ago. The NDA, an attached agency of the Department of Agriculture (DA), said the hike in the total import value indicated a per unit cost increment of more than a third. The Food and Agriculture Organization attributed the increase in global dairy prices to the tightening supply of milk in the world market, particularly in Australia, New Zealand and the European Union.
‘Compliance with standards key to gaining access to agribusiness global value chains’ BusinessMirror 14th Jan 2018
Agricultural producers need to comply with a strict set of standards and upgrade in various ways to gain access to global value chains. A policy brief published by the Department of Trade and Industry-Bureau of Trade and Industrial Policy Research said traditional global markets have been replaced with vertically coordinated market linkage systems. Under such market-linkage systems, local sourcing in both developed and developing countries has largely been replaced by centralized national, regional or international supply chains with strict sets of standards. “National and global lead firms now dictate how products are cultivated, harvested, transported, processed and stored through a series of public and private standards that producers, both large and small, around the world must comply with in order to maintain access to markets,” it said. The policy briefs noted that, over the past three decades, high-value agricultural markets have become more sophisticated, consolidated and regulated, making it increasingly difficult for new actors to participate and upgrade in these value chains.
DA to spend P500 million for expansion of rice-corn blend project BusinessMirror 10th Jan 2018
The Department of Agriculture (DA) will shell out at least P500 million next year to sustain the rice-corn (RiCo) blend project, which seeks to improve the country’s food security and cut its dependence on rice imports. “Part of what we need to support PhilMaize [Philippine Maize Federation Inc.] will be included in the GAA [General Appropriations Act] of 2019. It will be around half a billion,” Agriculture Secretary Emmanuel F. Piñol told reporters in a recent interview. Piñol said the DA will help the PhilMaize to consolidate corn produced by farmers for the RiCo blend project, which is starting this year. For this, he added, he committed an initial P50 million to kickstart the program. The DA chief disclosed that RiCo blends would be commercially sold in the market starting the second quarter. “Perhaps, we will sell first the pure corn grits and the 50-50 blend, which is easier to mix [than other blends].” The 50-50 RiCo blend is a rice-corn mix that consists of 50 percent white rice and 50 percent yellow or white corn. Earlier the DA chief said the consumption of rice-corn blend could wipe out the country’s rice-supply shortfall by 2019.
PHL sugar production reaches 516,165 MT–report BusinessMirror 4th Jan 2018
Philippine raw-sugar output has reached 516,165 metric tons (MT) as of December 17, 5.47 percent higher than the 489,407 MT recorded in the same period last year, according to data from the Sugar Regulatory Administration (SRA). The latest data on sugar production for crop year (CY) 2017-2018 showed that output in terms of 50-kilogram bags (LKg) have reached 10.323 million LKg, compared to last year’s 9.788 million LKg. Of the total sugar output during the period, 81.72 percent, or 421,821 MT, was produced by Negros-based millers. Under Sugar Order 1, the SRA projected that the country’s total sugar output in the current CY ending in August 31 would reach 2.38 million metric tons (MMT), 4.8 percent lower than the 2.5 MMT recorded in the previous CY.
Health & Life Sciences
Sanofi to pay back Philippines after Dengue vaccine problems Pharmaphorum 16th Jan 2018
Sanofi’s is to pay back money to the Philippines government for unused doses of its Dengue fever vaccine, after serious safety concerns halted its use. Dengvaxia is the first vaccine of its kind, and analysts had tipped it to generate blockbuster revenues for Sanofi. Concerns arose when an analysis of trial data showed that although the vaccine produces an overall reduced risk of infection, it significantly increases risk of severe infection and hospitalisation among those who have not had a prior infection.
DOH demands P1.4-B refund from Sanofi over ‘defective’ Dengvaxia Inquirer 12th Jan 2018
The Department of Health (DOH) has demanded P1.4 billion in refunds from pharmaceutical firm Sanofi Pasteur for its “defective” anti-dengue Dengvaxia vaccine. DOH Secretary Francisco Duque III on Friday said they sent a letter to Sanofi Pasteur Asia Pacific chief Thomas Triomphe asking for a refund of P1.4 billion for the remaining unused anti-dengue vaccines.
The Philippines is a diabetes ‘hotspot’ Inquirer 9th Jan 2018
The Philippines is considered one of the diabetes “hot spots” in the Western Pacific region, where the disease is already reaching epidemic proportions. Our government knows this too well, and the increased taxes on sugary drinks is just one of the steps being taken to stem the tide. Sufficient public education is needed to make everyone aware of the lifestyle changes needed to prevent diabetes, or to detect it earlier, so it can be controlled before there is serious damage to vital organs like the heart, kidneys, brain, eyes, nerves, liver—since practically all organs and tissues of the body are affected.
PAO insists on examining Dengvaxia deaths without UP-PGH experts Rappler 8th Jan 2018
The Public Attorney's Office (PAO) will continue conducting forensic examinations on vaccinated children without the participation of experts from the University of the Philippines-Philippine General Hospital (UP-PGH), PAO chief Persida Acosta said on Monday, January 8. PAO is set to open a new investigation into a child who died in Malolos, after getting vaccinated with dengue vaccine Dengvaxia, now recalled after manufacturer Sanofi Pasteur disclosed it could lead to severe dengue symptoms for children who have not had dengue before but got the vaccine.
ICT
Telcos to conduct network upgrades, tests The Manila Times 8th Jan 2018
PLDT and Globe Telecom said they would need to undergo network boosters and tests to guarantee seamless implementation of the one-year validity of prepaid loads. Both telecommunications firms issued separate statements on Friday saying they would comply with the mandate of the government to extend the validity of prepaid loads to one year. The extended validity is provided under Memorandum Circular No. 05-12-2017 issued jointly by the Department of Trade and Industry (DTI), the Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC) in December last year.
House panel OKs bill vs spam messages The Manila Times 8th Jan 2018
The House of Representatives’ Committee on Information and Communications Technology has approved a measure that seeks to protect phone subscribers from unsolicited calls and spam text messages through the institution of a “No Call, No Text” registration system. The bill, yet to be numbered, aims to protect the interests of mobile phone subscribers and promote general welfare in the face of unsolicited commercial speech, establish a standard of conduct for business and industry in sending messages to subscribers, promote the fundamental rights of the subscriber to privacy and protect subscribers from unwanted calls and texts inducing the purchase of goods or services and solicitation.
Cybersecurity a growing concern among many Filipinos — report BusinessWorld 8th Jan 2018
BUSINESSES in the Philippines should look at investing in talent to improve cybersecurity, as more Filipino consumers are increasingly worried about cyber attacks, a content delivery service provider said. In its “The State of Cybersecurity 2017 — Southeast Asia” report, Limelight Networks said a survey showed 74% of consumers in the Philippines are “extremely concerned” about cybersecurity. The figure is higher than the 60% average in Southeast Asia (Philippines, Malaysia, and Singapore). Also, the survey found 71% of consumers have had a more negative opinion of a brand after a cyber attack, while almost 40% of consumers said they will no longer make online transactions on a website that has been previously hacked. Jaheer Abbas, Limelight Networks regional director for Southeast Asia and Australia-New Zealand, said the top concerns of consumers are the loss of financial/personal information, falling victim to an online scam, and infection of devices by malware.
NPC issues filing deadline reminder The Manila Times 6th Jan 2018
Personal information controllers (PICs) in the country have until March 31, 2018 to submit their 2017Annual Security Incident Report to the National Privacy Commission (NPC), the agency said. Under Philippine data privacy laws, a PIC is a person or organization, both public and private, that controls the collection, holding, processing or use of personal information. It also refers to a person or organization instructing another to collect, hold, process, use, transfer or disclose personal information on his, her or its behalf.
Infrastructure
PH, Japan to sign first tranche of Metro Manila subway loan ABS-CBN News 17th Jan 2018
The Philippines expects to sign before the end of the month the first tranche of a loan agreement with Japan for Metro Manila's first ever subway system, the Department of Finance said Wednesday. The $929.1-million borrowing is awaiting approval from the central bank's Monetary Board and special presidential authority, the DOF said in a statement. The P227-billion subway is among the highlights of President Rodrigo Duterte's P8-trillion infrastructure program. It will run from Mindanao Avenue in Quezon City through the FTI in Taguig City and end at the Ninoy Aquino International Airport in Paranaque City. Also expected to be signed this month with Japan is the $89 million loan for the third phase of the Plaridel Bypass Road in Bulacan, the DOF said. A $142 million loan for the flood management project in the Cavite industrial area, meanwhile is targeted for approval on the first week of February, the ministry said.
LGUs told to simplify building permit process BusinessMirror 16th Jan 2018
In support of the government’s infrastructure program, four state agencies committed to a joint memorandum circular (JMC) that seeks to simplify the procedure of applications for construction-related permits. Under JMC 2018-01, the departments of Trade and Industry (DTI), Public Works and Highways, Interior and Local Government, and of Information and Communications Technology instructed local government units (LGUs) to adhere to service standards on processing simple applications for construction permits. It covers single-dwelling residential buildings of not more than three stories, commercial buildings of not more than two floors, renovation within a mall with issued building permits and warehouses housing nonhazardous substances. The circular directed LGUs to implement a four-step processing system in issuing building permits. This procedure begins with the submission of application with complete documentation, followed by the receipt of order of payment, then payment of fees, concluded by the issuance of permits. The circular also trimmed down processing time to five working days maximum, while the Bureau of Fire Protection (BFP) is mandated to issue building permits within three working days.
15 key infrastructure projects being readied for 2018 launch BusinessWorld 15th Jan 2018
THE GOVERNMENT expects a pickup in infrastructure activity this year, with 15 big-ticket projects already in the pre-construction stage, the Finance department said. This adds to the 44 projects already in the works as of January. “[About] 60 projects are under construction and pre-construction so most of these will start getting implemented this year, that’s P1.8 trillion based on project cost,” Finance Undersecretary Gil S. Beltran told reporters on Thursday.
Duterte TRAIN running on schedule BusinessMirror 14th Jan 2018
The Department of Finance (DOF) said the rollout of infrastructure projects under President Duterte is proceeding as planned following the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) Act. Helping make this possible were the proceeds from so-called official development assistance (ODA) loans from countries offering the Philippines below-market credit assistance. According to Finance Secretary Carlos G. Dominguez III, the rollout of big-ticket infrastructure projects are proceeding as planned following the signing into law of the TRAIN Act and the successful prosecution of ODAs, both of which help bankroll ventures under the “Build, Build, Build” (BBB) program. DOF Undersecretary and Chief Economist Gil S. Beltran said that, with the TRAIN in place, the government’s BBB agenda “will go into high gear” this year, with majority of the 75 flagship projects worth a combined P1.8 trillion already in the construction or preconstruction phases.
Japan pledges $1.26B in grants, soft loans for infra projects Inquirer.net 4th Jan 2018
As the Philippines under President Duterte strengthened ties with its neighbors, it secured $1.26 billion in commitments from Japan last year mainly to finance infrastructure projects, the Department of Finance said Thursday. The grants and soft loans pledged by the Japanese government in 2017 formed part of the 1 trillion yen (about $8.8 billion) in investments as well as official development assistance earlier committed by Japan Prime Minister Shinzo Abe, the DOF said in statement.
Investments in logistics to drive 'Build Build Build' philstar.com 3rd Jan 2018
The Department of Finance (DOF) has urged corporate giants in the logistics industry to help micro, small and medium enterprises (MSMEs) take advantage of the benefits of state-of-the-art distribution network. Finance Secretary Carlos Dominguez III said the government needs the full support of the private sector in investing in infrastructure projects such as the logistics facility that Fast Logistics has just built for Unilever Philippines in Cabuyao, Laguna. He explained the Duterte administration has anchored its strategy of rapid economic expansion on an ambitious Build Build Build infrastructure program to pull down the cost of transporting goods, improve linkages across the archipelago, encourage efficient agriculture and clear the way to inclusive growth. The state-of-the art warehouse was built and fully engineered by Fast Logistics to speed up the sorting and distribution of Unilever products and was designed to accommodate various transport vehicles needed to ensure fast delivery. He said inefficient infrastructure adds to production costs and diminishes competitiveness, leads to high food prices for urban consumers and worsens poverty.
Manufacturing
PH car production expands by 23% in November Manila Bulletin Business 10th Jan 2018
Motor vehicle production in the Philippines as of November 2017 grew a dramatic 23.1 percent, the second highest among ASEAN countries as growth by major producing countries was limited to single digit only. Data from the ASEAN Automotive Federation showed that local car production in the Philippines reached 133,015 units as of November 2017 from only 108,090 units in the first eleven months of 2016. Comparatively, major car producers in ASEAN such as Thailand and Indonesia registered significantly slower production growth.
Manufacturing grows at slower pace in December philstar.com 3rd Jan 2018
The local manufacturing sector expanded at a steady but slightly slower pace in December due to a slowdown in export orders and continuing input cost pressure, according to latest data of the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI). The latest reading of the Nikkei PMI came in at 54.2 in December, marginally down from 54.8 in November, still pointing to a solid improvement in the health of the sector as a reading below 50 indicates worsening business conditions. IHS Markit, the firm that collected data for the index, noted that while the growth in output and new orders were slower in December compared with the previous month, the PMI remained above the 2017 average. Export sales, it said, registered the weakest expansion in four months. As such, domestic demand continued to be the main growth driver in December. Philippine manufacturers also continued to feel the pinch of input cost inflation as they continued to stock up on raw materials, in turn putting more pressure on supply chains. Higher input costs were attributed to increased raw material prices, weaker exchange rate, custom tax hikes and supply shortages.
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