SONA 2019: Focus on Economy

Such great economic progress  in last 3 years  

   

Manila Bulletin |Editorial

21 July 2019

When President Duterte delivers his State of the Nation Address (SONA) at a joint session of Congress tomorrow, Monday,  it will mark the start of the second half of his administration.  A great deal is expected  in these next three years , especially in the economic  field. The World Bank  sees the Philippines as the fastest growing economy in the Association  of  Southeast Asian Nations (ASEAN) today. It is now  the  13^th  largest economy in Asia, and  projected  to be the 5^th largest  in Asia and 16^th largest  in the world by 2050.

What could be the most significant economic development  for the country in the coming months and years  is  a joint  oil and gas exploration  with China which is expected to  begin this November, according to Energy Secretary Alfonso  Cusi,  chairman of the National Economic and Development Authority (NEDA).

President  Duterte  signed last May 28 Executive Order No. 80  removing a final roadblock to  an oil exploration, development, and production  agreement between the Philippine Exploration Corp. and the China National Offshore Oil Corp.  The  administration  had earlier signed  its first agreement with an Israeli company in 2018  covering a 416,000-hectare area east of Palawan. The  new agreement  with China covers a 720,000-hectare area in Calamian, west of Palawan. Calamian is one of two regions  near Palawan believed  to have considerable oil  resources;  the other is Reed Bank.

The  oil exploration agreement  is only one  area in  the multi-faceted relations  we have developed with China in the last three years. Our  trade with China, including Hong Kong, reached $417 billion this May, making  it the Philippines’ top trading partner. Philippine banana  exports tripled  in the first quarter of 2019 to $160 million.  Philippine  Online Gaming   Operations (POGO)  earned  P24 billion in taxes.  In 2018,  1.2 million Chinese tourists  boosted  the Philippine economy  by P32 billion;  2 million are expected  by 2020, a potential addition of  P50 billion to the economy.

In our ”Build, Build, Build”infrastructure program, China is involved in a big  way, including two donated bridges across the Pasig River, funding for a P500-million   Metro Manila flood-control project now on its second year,  a  P175-billion South Rail Project,  and  an P18.7-billion Kaliwa Dam to boost Metro Manila’s  water supply.

We may have ongoing  disputes in our conflicting claims to certain islands in the South China Sea, particularly in  the 200-mile  Exclusive Economic Zone we have renamed West Philippine Sea, but  President Duterte appears to have the situation well in hand.  He believes  the political  dispute will eventually be settled; in the meantime, he  is determined to see the Philippines benefit from the many  economic programs  that are underway.

The first half of the Duterte administration ends today  with considerable  economic  growth and progress. We look forward  to the second half which, we expect, will be marked with even more  economic  growth, as the President  spells out his plans for the country in the  next  three years in his State of the Nation Address tomorrow.

PH as global diving destination

Positioning the Philippines as global diving destination

By

BusinessMirror

23 June 2019

The Philippines is gaining popularity as one of the world’s best destinations for recreational and professional diving. To help further cement this reputation, the Tourism Promotions Board (TPB) Philippines, marketing arm of the Department of Tourism (DOT), continues to exhaust aggressive efforts in promoting the Philippines as a diving destination.

Diving with butanding

The TPB has successfully made its presence known in numerous international dive-related events, such as the Marine Diving Fair (MDF), the largest dive resort and consumer fair focused on scuba diving and travel overseas; Asia Dive Expo 2019 (Adex), the longest-running and largest dive expo in Asia; and Diving, Resort and Travel Expo Shanghai (DRT).

Held in Japan, the MDF had over 200 exhibiting companies from 50 countries and regions all over the world, including the Philippines which had one of the largest booths. Some 50,000 visitors, mostly diving enthusiasts, attended the fair.

Coral reef diving

At Adex, the Philippine representatives promoted the new and existing diving destinations in the country and also learned more about water sports in general from distinguished scientists, equipment manufacturers, marine conservationists, and underwater photographers and videographers.

The DRT in Shanghai had over 200 exhibitors and more than 40,000 participants. The Philippine participants showcased local diving products and conducted product presentations which included business-to-business (B2B) networking among Chinese dive counterparts.

Philippines offers rich biodiversity for deep diving

As a result, the Philippine participants were able to learn more about the latest developments in water sports and strengthen ties with Japanese media, dive clubs and operators, and diving enthusiasts. Moreover, they were able to showcase Philippine diving products through product presentations and conduct B2B networking among regional counterparts in China.

UNICEF commends Philippines Government in taking next step to protect children in armed conflict


UNICEF
14 June 2019

MANILA, 14 June 2019 – UNICEF commends the Philippine government in taking the next critical step toward improving the plight of children in conflict zones with the recent signing of the Implementing Rules and Regulations (IRR) of the law to protect Children in Situations of Armed Conflict (CSAC).

UNICEF supported the government’s Inter Agency Committee (IAC) for the CSAC, led by the Council for the Welfare of Children (CWC) in the nationwide consultation process and drafting of the IRR of Republic Act 11188. UNICEF Chief for Child Protection Grace Agcaoili congratulated the committee saying that “the release of the IRR of this first-ever comprehensive national law on CSAC is further proof of the government’s commitment to the Convention on the Rights of the Child.”

She also reaffirmed UNICEF’s support in implementing the law as it marks the 30th anniversary of the adoption of the Convention on the Rights of the Child. “A very exciting and challenging work awaits the government at this crucial stage of implementation, and to focus on the priorities identified in the IRR,” she added.

CWC Executive Director Mitch Cajayon-Uy said that “We are confident that this law will enable us to strengthen our mechanism to place special emphasis on the rights of these children, toward building a caring and protective society for, by and with the children, with the recognition that they need a peaceful environment to thrive.”

Child rights advocates, under the umbrella alliance Child Rights Network (CRN), expressed optimism with the release of the IRR and called on its partners to “help ensure that the law will be fully implemented at the soonest possible time.” Under the law passed in January 10 this year, the Inter Agency Committee is also tasked to ensure its full implementation, which upholds humanitarian principles and the rights of children to be treated as victims.

Agencies of the government who signified their commitment include the Department of National Defense, Department of Social Welfare and Development, Department of Interior and Local Government, Department of Education, Department of Health, Department of Justice, Office of the Presidential Adviser on the Peace Process, Armed Forces of the Philippines, Philippine National Police, Office of Civil Defense, National Commission on Indigenous Peoples, Philippine Commission on Women, and the National Commission on Muslim Filipinos.

The IRR clearly defines the individuals covered under the law (persons aged 18 and below), provides rules on age verification, outlines the rights of children in situations of armed conflict, identifies the enforcement agencies, and how the law will be carried out.

Salient features of the law include:

• Adoption of an expanded definition of schools and hospitals/health facilities to provide wider protection for these civilian facilities and serve as a stronger deterrent for attacks on these structures, and places of worship
• Expansion of the definition of Zones of Peace, not limited to “demilitarized zones” but covers any community site of sacred, historic, cultural, or environmental importance
• Inclusion of gender-specific provisions on access of girls to education as well as to Menstrual Hygiene Management packs and services
• Upholds the rights of children to be treated as victims; and affords immunity from suit for persons providing assistance.

Globally, children in armed conflict are among the most vulnerable according to UNICEF. The UN Secretary-General reported that in 2017, some 10,000 children were either killed or maimed in conflict and 8,000 were recruited or used as combatants in 20 countries, including some identified hotspots.

UNICEF has identified the Philippines among these hotspots where children continue to be affected by armed conflict. The 5-month long Marawi crisis in 2017 showed how children remain particularly vulnerable when armed conflict breaks out. From January to October 2018, approximatively 160,000 persons were displaced in Mindanao due to armed conflict and crime and violence – half of them children according to the UNICEF report on the Situation Analysis of Children in the Philippines.

UNICEF is committed to help government in facilitating productive dialogue among parties in conflict situations, building social cohesion and strengthening services for all children, especially in conflict-affected areas in Mindanao. In particular, the completion of the 2017 Action Plan of the UN and Moro Islamic Liberation Front (MILF) showed that some 1,869 children have already disengaged from MILF and receiving support through follow up care from social workers, psychosocial support, help with education and birth registration and other social welfare service.

Media Contacts

Zafrin Chowdhury
Chief of Communication
UNICEF Philippines
Tel: +63 2 249 5495
Tel: +63 917 867 8366
Email: zchowdhury@unicef.org

Marge Francia
Communication Officer
UNICEF Philippines
Tel: +63 2 249 5497
Tel: +63 917 858 9447
Email: mfrancia@unicef.org

PH in Proactive Tax Reform

WB lauds Philippines for ‘proactive’ tax reform

Mary Grace Padin 

The Philippine Star 

June 9, 2019 

MANILA, Philippines — A top World Bank official has lauded the Duterte administration for implementing a “proactive and forward-looking” tax reform program, which is seen to raise enough funding for the government’s infrastructure and social program and help sustain economic growth, the Department of Finance (DOF) said.



World Bank director of macroeconomics, trade and investment Lalita Moorty cited the Philippines’ accomplishments on the economic front, especially in implementing a tax reform program to enable the government to aggressively increase its investments on infrastructure and social services.

The DOF quoted Moorty, who said it was “quite a change” to see a country implementing a tax reform proactively, unlike some countries who only push for these reforms when they are in the middle of a fiscal crisis.

“It is actually quite a change to see a country that is taking a very forward-looking approach to reforms.The Philippines is posting really fast growth rates, about three times of what we see in Europe and Central Asia. I think this is a good time to do these tax reforms. It is a good time and you have seized it. That is quite impressive,” said Moorty during the Philippine Day Forum held in Washington DC last April 11.

According to the DOF, Moorty also commended the Philippine government’s sound fiscal policies as shown by its declining debt-to-gross domestic product (GDP) ratio amid sustained rapid growth and increased public spending.

“When I think about comparing the Philippines to other parts of the world, it has managed to do so much and grow so much while bringing its public debt-to-GDP ratios down. It’s very impressive that it went from over 50 percent to around 40 percent in a decade. That’s quite impressive, in contrast to other countries where we’re seeing a rise in the public debt-to-GDP ratio,” Moorty said.

 “All in all, I think this is such a strong and wonderful start when I look at the Philippines in comparison to other countries in the world and I do hope that this continues to progress and accelerate in the near future,” she said.

Finance Secretary Carlos Dominguez said actual disbursements for infrastructure and capital outlays reached P1.64 trillion in the first 10 quarters of the Duterte administration, outpacing the P1.57 trillion investments made by the previous administration in all of its six years.

 He said economic expansion averaged 6.5 percent in the same first 10 quarters.

The country’s debt-to-GDP ratio, meanwhile, continued its downward trend to 41.9 percent last year from 68.5 percent in 2005, and is expected to further decrease to 38.6 percent by 2022, Dominguez said.

Dominguez said the national government’s revenues rose by 15 percent to P2.85 trillion in 2018, while tax revenues grew 14 percent to P2.57 trillion.

This translated into a tax effort of 14.7 percent last year, which is now the highest the government has ever achieved in the past 20 years.

Revenues from the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the first package under the Duterte administration’s comprehensive tax reform program, reached P68.4 billion in 2018, higher than the full-year target of P63.3 billion.

PH improving credit standing

PHL readies road map for an ‘A’ credit rating

Bernadette D. Nicolas
Business Mirror
09 May 2019

THE Bangko Sentral ng Pilipinas (BSP) is looking to finalize—along with the Department of Finance (DOF) a road map next week to ensure a calibrated approach to the Philippines’s “active pursuit of an A level rating.”

The Philippines last week received its highest credit rating from a major ratings agency to date, as S&P Global Ratings announced that it is assigning a “BBB+” rating on the Philippines’s long-term sovereign credit rating.

With just a notch away from the “A” level rating, BSP Deputy Governor Diwa C. Guinigundo said they are now embarking on an agenda called the “Road to A.”

Guinigundo said the BSP and the DOF are eyeing to organize an interagency committee that would formalize this road map.

“Such road map will evidence the buy-in and commitment of key economic and infrastructure officials to get our efforts properly credited to A before 2022 to help further bring about more benefits to the economy and to our people,” he said in a Palace briefing.

Moving forward, Guinigundo said their goal is to sustain policy and structural reforms, which he said is one of the nonnegotiable keys to an upgrade aside from continuous engagement with the credit-rating agencies. “We have a long way to go, many more miles to travel. We don’t need a crisis or an international financial institution to tell us what to do. We shall be doing things for the sake of our people. If these efforts start bearing fruits that are good to eat, then the upgrade will just logically be a consequence,” he said.

Guinigundo pointed out that efforts must also be directed at addressing these issues: further increasing the country’s per-capita income, enhancing the country’s potential input, strengthening the external payments buffers, keeping prices stable, fortifying public finance and elevating governance standards.

“So all of these, I think, are priorities of the national government in addressing these particular issues—not because we wanted another A or another upgrade, but because pursuing these very important reforms on various fronts will be useful to us, because we want to sustain our economic growth; we want to make sure that employment opportunities are available and to make a dent in terms of our efforts to reduce poverty in the Philippines,” he added. 

Meanwhile, Finance Secretary Carlos G. Dominguez III stressed that the credit-rating upgrade is a direct result of President Duterte “choosing to invest his political capital wisely in difficult but game-changing reforms” such as the Tax Reform for Acceleration and Inclusion (TRAIN) law and the Rice Tariffication Act. 

Dominguez, however, immediately pointed out that they did not pursue these reforms to get a better credit rating. 

“This upgrade is the effect of pursuing ‘game-changing reforms’ that would lead to a flourishing economy and a more comfortable life for law-abiding Filipinos,” he said. 

“The effect of a BBB+ rating may not be immediate, but it is very clear, it is a stepping stone to our goal of achieving and sustaining upper middle-income country status in the near future,” he added. 

P3-B savings

NATIONAL Treasurer Rosalia V. de Leon also cited the potential benefits of the country getting this credit-rating upgrade, including generating savings of at least P3 billion for commercial bond issuances and attracting more foreign direct investments that would lead to more jobs.

Since foreign investors have stringent guidelines before investing, de Leon explained that they will not go to an economy with a credit rating lower than BBB. 

“So with the BBB+, we’re able to throw the net far and wide, catch more fish into our pond of borrowing,” she said.

Even the private sector will also reap the benefit of lower cost of borrowing from the credit-rating upgrade, noting that the national government is considered as the benchmark for borrowing rates. 

“So if we borrow at this level, even the private sector would also be reducing their own borrowing cost. So, what does it mean? Then they will be able to have more capital expenditures, produce more jobs,” she said.

“This is more inspiring for us because all the fruits of our labor are now producing results. And we are more challenged but, at the same time, more inspired to deliver more reforms, and at the same time, really make it up to the coveted A rating that we are all also aspiring for,” she added. 

PH economic boom

Economic Boom Lifts More People Out of Poverty in Philippines

By

Ditas B Lopez

‎April‎ ‎10‎, ‎2019‎ ‎

The ranks of the poor in Philippines are moderating as the nation sustains among the fastest economic growth in the region.

A man teaches a dance lesson at the SM Mall of Asia complex in Pasay City, Metro Manila.

Photographer: Hannah Reyes Morales/Bloomberg 

Filipinos living below the poverty line were estimated at 21 percent of the population in the first half of 2018 compared with 27.6 percent in the same period in 2015, the Philippines Statistics Authority said in a report on Wednesday. The poverty incidence, based on a survey conducted every three years, eased even as inflation accelerated last year.

Poverty declined as infrastructure projects created new jobs and the state expanded its cash handouts. “Thanks to sustained economic growth and critical and broad-based reforms and investments that have translated to employment-generation and social protection,” according to Economic Planning Secretary Ernesto Pernia.

The Philippines is working to meet its target of reducing the poverty rate to at least 14 percent by the end of President Rodrigo Duterte’s term in 2022, his spokesman Salvador Panelo said. To meet that goal, at least a million Filipinos must be lifted from poverty each year. The nation can become an upper middle-income country this year, ahead of its 2022 target, Pernia said.

Highlights

• The poverty threshold -- the minimum amount a family of five must have to meet basic food and non-food needs -- is pegged at 10,481 pesos ($201) a month in the first half of 2018. That’s 11 percent more than in the first half of 2015.
• Filipino families with incomes below the poverty line were estimated at 16.1 percent in the first half of 2018 . That’s less than 22.2 percent in 2015.
• Subsistence incidence or the ratio of Filipino families with incomes below the food threshold of 7,337 pesos a month was estimated at 6.2 percent. That compares with 9.9 percent in 2015.
• Poverty incidence was highest in the Autonomous Region in Muslim Mindanao in the south and lowest in Metro Manila.

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• The International Monetary Fund forecasts that the Philippines will grow 6.5 percent this year and 6.6 percent in 2020.
• Self-rated poverty rose in the third quarter of 2018 with more than half of Filipino families considering themselves poor, according to a Social Weather Stations poll.

— With assistance by Siegfrid Alegado, Claire Jiao, and Andreo Calonzo