Inflation is likely to continue its downward path for the rest of the year given recent developments in the country, members of the government’s economic cluster said Tuesday.
“[W]e are optimistic that the downward path of inflation will continue for the rest of the year,” the Departments of Finance and Budget and Management, as well as the National Economic and Development Authority (NEDA), said in a joint statement.
The Philippine Statistics Authority (PSA) earlier on Tuesday reported inflation at 3.8 percent in February, marking the fourth consecutive month of deceleration.
“We, the economic managers, are pleased by the report that the country’s inflation rate slid further to 3.8 percent in February as price levels start to normalize and settle back to the government’s target,” the economic cluster said.
“This will be backed by the recent enactment of the Rice Industry Modernization Act (RA 11203), which is expected to bring down rice prices and cut inflation by 0.5 to 0.7 percentage points this year and 0.3 to 0.4 percentage points next year,” it explained.
The Rice Tariffication Law also allows the unlimited importation of rice as long as private sector traders secure a phytosanitary permit from the Bureau of Plant Industry and pay the 35-percent tariff for shipments from neighbors in Southeast Asia.
The law earmarks P10 billion for the Rice Competitiveness Enhancement Fund (RCEF), of which P5 billion will be allotted to farm mechanization and P3 billion to seedlings. The fund intends to ensure that rice imports won’t drown out the agriculture sector and rob farmers of their livelihood.
“Based on the monitoring of the Philippine Statistics Authority, prevailing retail prices of regular-milled rice has now declined by around PhP5.00 since it peaked in September 2018,” the statement read.
“Our work does not stop here. We must ensure that the change to a rice tariff regime—from government-led to market-led—is seamless and fast,” it added.
In terms of the expected El Niño which the state weather bureau PAGASA forecasts to come in during the first quarter, the economic team said the government must take steps to strengthen the agriculture sector.
“Around 19 provinces are expected to experience drought this year including Metro Manila,” the economic team said.
“Thus, the government must take pro-active measures to mitigate its adverse impacts on the agriculture sector in the immediate term and to increase its resiliency against extreme weather conditions over the medium to long term,” it added.
The economic cluster said it will also remain watchful of developments in the global oil market, as it noted that the Land Transportation Franchising and Regulatory Board (LTFRB) should increase its efforts to cover more of the targeted beneficiaries of the Pantawid Pasada Program.
“Nevertheless, the economic team is upbeat that inflation is again starting to become manageable,” it said.
“While we constantly keep a close watch on the general prices of goods, we can now pay greater attention to programs that will further propel economic growth and help us reach our long-term development goals,” the statement added.
For his part, Bayan Secretary-General Renato Reyes noted that while the recent inflation figures are welcome, this should be made sustainable.
“Inflation could have been lower if the excise tax on fuel was removed. This comprises a staggering P9 per liter for gasoline. The erosion of income last year cannot be recovered by the easing of inflation now,” he said in a separate statement.
“We thus maintain that candidates seeking Senate and congressional seats should be asked whether they are in favor of removing excise tax on petroleum products,” he added.
The Tax Reform for Acceleration and Inclusion (TRAIN), signed into law by President Rodrigo Duterte in 2017, also provides that starting 2019, excise taxes for diesel be hiked by a total of P4.50 and those of gasoline by P9.00 under the second tranche.
“The TRAIN Law green remains an important issue even during the elections,” said Reyes. — BM, GMA News
PH now Australian business’ top expansion destination
Australian businesses in Southeast Asia have picked the Philippines as the most preferred destination for their expansion, a recent survey showed.
The Philippines has become the most popular market for Australian companies looking to expand, after being picked by 24 percent of survey respondents in the latest edition of Australian Business in Asean.
This marked the first time the country became the top pick of Australian businesses since the annual survey began in 2016.
The survey said 80 percent of businesses in the region plan to expand their operations by 2023, citing the growing middle class in Southeast Asia as among the factors that fueled their bullishness.
“The Philippines is now the most prominent destination for future investments, overtaking Vietnam in 2017 and Myanmar in 2016,” the 2019 survey read.
“Philippine trade with Australia has increased significantly over recent years while there has also been growing Australian investor interest in the Philippines,” the survey said.
Traffic congestion in the country, however, was identified as a “high-impact constraint on business” by the majority of respondents, followed by government bureaucracy and the tax system.
More than one-third, or 36 percent, of Australian companies here in the Philippines have been operating here for more than two decades.
The survey said companies continued to be attracted to the market, citing that 14 percent of the respondents had been operating in the country for less than two years. —ROY STEPHEN C. CANIVEL
Megaworld, BCDA tie-up gives birth to BGC cousin
Property developer Megaworld Corp. and state-owned Bases Conversion and Development Authority (BCDA) have teamed up to create and jointly manage a 160-hectare new urban hub called Bonifacio Capital District (BCD) in the southern part of the former Fort Bonifacio military camp.
This partnership consolidates 88 ha of Megaworld’s existing township developments in the area with adjacent parcels of land that remain with the BCDA—which started privatizing Fort Bonifacio during the term of then Pres. Fidel Ramos in the mid-1990s into a new central business district (CBD) rebranded as BCD
BCD is distinct but envisioned to be on par with the older and larger hub known as Bonifacio Global City (BGC) master-planned by the Ayala group.
BCDA and Megaworld will create a policy review board which will have the exclusive jurisdiction to set policies and restrictions on the development of BCD and ensure the proper execution of the district’s master development plan and vision. There will be no new property transfer as the partnership covers only mostly branding and estate management.
BCD will encompass Megaworld’s existing township developments: the 54.3-ha McKinley Hill and the 34.5-ha McKinley West. BCDA, for its part, will fold in its 26-ha Philippine Navy Village, a 33.1-ha Bonifacio South Pointe property (under a partnership with the SM Group), the 10.1-ha Consular property beside McKinley West and another one-ha BCDA lot.
“It’s really an integration of all these properties and basically branding this entire district as one,” Kevin Tan, chief executive of Megaworld’s parent conglomerate Alliance Global Group, said in a press briefing on Thursday.
The 160-ha BCD is also envisioned to be the country’s “administrative capital,” as it will also soon house the Senate of the Philippines, the Supreme Court and the Court of Appeals, BCDA chief executive Vince Dizon said.
BCD will have Lawton Avenue as its main road, with direct access points toward BGC via Lawton-Fifth Avenue connection; Makati CBD and Edsa via McKinley Road and Chino Roces Avenue Extension; South Luzon Expressway and NAIA Expressway via southern portion of Lawton Avenue; and C5 Road via Bayani Road and Upper McKinley Road inside McKinley Hill.
Read more via Inquirer.net.
International Finance Corp. plans wider exposure in Philippines
MANILA, Philippines — Fresh from its anchor investment in Ayala-led AC Energy’s green bonds, the International Finance Corp. (IFC) said it plans to widen its exposure investments in the country for climate-smart infrastructure and affordable housing in the near term.
In an interview yesterday, Vivek Pathak, director of IFC’s East Asia and Pacific Department, said they plan to invest more in green infrastructure, particularly in logistics and power.
At the same time, IFC is also interested in investing in firms and financial institutions that can spur the building of more affordable housing that is climate-friendly.
Pathak was in the country to meet with several banks and firms for potential clients for green finance. He said these include other companies under the Ayala Group and “one major bank.”
“So we are looking at several areas, we are looking at infrastructure, so that’s a big component. We are also looking at affordable housing,” he said. “At the same time taking to more and more banks because we want to get them to be more interested,” he said. (www.philstar.com)
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