Iloilo City seeks P230M fund from TIEZA to spruce up 5 parks

December 12, 2019 | 7:59 pm

THE ILOILO City government is asking the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) for a P230 million fund to rehabilitate five public parks next year. The city council passed a resolution last week endorsing the letter of request of Mayor Jerry P. Treñas to TIEZA Chief Operating Officer Pocholo Joselito D. Paragas. The five plazas planned for restoration nest year are Molo, Arevalo, Libertad, Jaro and La Paz. Councilor Jose Efraim G. Treñas, citing the mayor’s letter, said the costs based on the City Engineering Office’s assessment are: P75 million for the Jaro Plaza and belfry; P65 million for La Paz; P50 million for Arevalo; and P20 million each for Molo and Libertad. “It is the continuing policy of the local government unit of Iloilo city to provide its constituents with good Public spaces as a venue for enjoying outdoor recreation, community, and promotion of public health and safety to promote environment and attracting tourists and investors,” reads part of the letter. TIEZA has previously funded the P19-million restoration of Sunburst Park, originally known as Plaza de Aduana, which was turned over to the city government in January this year. The restoration was part of the Iloilo Heritage and Urban Renewal Project. Meanwhile, Councilor Treñas said the Mandurriao Plaza has not been included in the restoration plan since it is a relatively new park and may not fall under the TIEZA guidelines. However, he added, a senator has already expressed intent to fund its refurbishment. — Emme Rose S. Santiagudo

Cotabato City celebrates Shariff Kabunsuan Festival

December 12, 2019 | 7:59 pm

THE ANNUAL Shariff Kabunsuan Festival in Cotabato City, which celebrates the arrival of the Arab missionary believed to have introduced Islam to southern Philippines and contributed to the area’s growth, starts on Dec. 15. It will be the first time that the city will hold the festivity as part of the Bangsamoro region. Mayor Frances Cynthia Guiani-Sayadi, in a statement, said the festivity is “the city government’s way of saying thanks to the efforts of every Cotabateño who have made our city nationally recognized for its business progress and good governance.” The highlight of the four-day celebration is the Guinakit Fluvial Parade, which will allow the people to witness the re-enactment of the arrival of Mr. Kabunsuan. Colorful vessels symbolizing royalty among Muslim tribes in Mindanao will be joining the parade. Another major event is the reading of the Qur’an by reciters who have won in local and international competitions. A Halal Business Forum is also scheduled, with focus on the preparation of food based on Islamic laws. — Carmelito Q. Francisco

DoT-Davao to tap local governments for accreditation of more tourism establishments

December 12, 2019 | 7:59 pm

THE DEPARTMENT of Tourism-Davao (DoT-11) will tap the assistance of local governments units (LGUs) to fast-track the accreditation of more tourism establishments in the region, including accommodations, transport services, and dining places. “We seek for the support of the provinces and LGUs. I guess that is one of the things that will help, plus double the effort of our team,” DoT-Regional Director Tanya Rabat-Tan, speaking in mixed Filipino and English, said in an interview Friday on the sidelines of the Davao Tourism Industry Gathering 2019. Ms. Tan reported that there are currently 316 accredited tourist establishments, up 83% from last year’s 173. DoT-11 is targetting an increase of at least 50% next year. Ms. Tan said the accreditation process, which involves checking permits and site inspection, could be completed faster with help from officials of the provinces, cities, and municipalities. “It’s really taxing because they (DoT team) have to visit and really check. We really have procedures to follow and we don’t just come up to that figure,” she said.

MICE PROMOTION
Ms. Tan said certifying tourism establishments is crucial as they beef up promotional efforts, particularly for the meetings incentives conferences and exhibitions (MICE) sector. The DoT regional office will also continue focusing on marketing the Davao Region for its food, nature destinations, and cultural attractions. “What we want for a certain destination is to be market-ready. And when we say market-ready, it should be foreign market, although the domestic is also big,” Ms. Tan said. The DoT has recorded over three million visitors so far this year. Next year, the DoT will help the provincial governments of Davao del Sur and Davao Occidental formulate their respective tourism development plans alongside the drafting of the Davao Regional Tourism Development Plan and Development of Cultural Hub Master Plan. Ms. Tan said they will also be working on five projects that was evaluated and endorsed by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). — Maya M. Padillo

More Filipinos take pride in local athletes’ performance

December 12, 2019 | 7:59 pm

THERE are more Filipinos now who feel proud when the country does well at international sports events, according to a September poll by the Social Weather Stations (SWS).

The polling firm said 95% of Filipinos take pride in local athletes’ performance at global sporting competitions, compared with 93% in 2008.

The percentages of those who were proud of the Philippines’ achievements in international sports were high and hardly varied in all areas and across socio-demographic groups, SWS said.

SWS interviewed 1,800 adults for the poll, which had an error margin of ±2.3 points.

Nike marks closure of Nike Hyper Court at BGC with community basketball event

December 12, 2019 | 7:59 pm

TO commemorate the closure of the Nike Hyper Court @ BGC (Bonifacio Global City) after two momentous years of serving the community, Nike will hold a community basketball event to be attended by ballers, coaches and local athletes on Dec. 15.

Providing a special place for Filipino ballers to raise their game since its opening in early 2017, the court, which has been recently reclaimed for redevelopment by its landowners, has become the beating heart of BGC. The court has enabled consumers to put in an extensive, cumulative amount of training hours (approximately 377,000 hours) and catered to community building through pickup basketball or open play, over its existence of two years.

The community event will include a series of 3×3 games for local female and male ballers, as well as feature some of the Philippines’ most renowned basketball stars in an exhibition shoot-out, including Nike athletes Kiefer Ravena, Aljun Melecio, CJ Cansino, CJ Perez and Camille Clarin.

Jino Ferrer, Country Marketing Manager of the Philippines said, “Since our Hyper Court launched two years ago at the BGC, it has cemented its position as a thriving hub for Filipino ballers. Our collaboration with Google has ensured players have access to digital coaching and skills training as they step onto the court. We’ve had other collaborations and initiatives that leveraged on the energy of the courts, for example, basketball clinics and grassroots tournaments run by one of our key authenticators and retail partner, Titan; product trials and launches, plus cultural celebratory moments of the sport involving dance and rap battles. Our vision with Hyper Court was to offer ballers of every level a place to feel inspired, hone their skills and realize their full potential. With the other Hyper Courts around, we invite ballers to continue to visit them to raise their game.

“Manila’s passion for basketball is unrivalled and it has been a privilege to see the courts provide a communal place for the surrounding BGC communities to raise their game. Nike will continue serving Filipino ballers with continuous innovation and inspiration, aptly as one of the greatest basketball nations globally” said Ferrer.

The Nike Hyper Court @ BGC will remain in operation till Dec. 31, 2019. The three remaining Hyper Courts — Ususan Court in Taguig, Scarlet Homes Covered Court in Paranaque and YCL Covered Court in Quezon City – remain in operation.

For more details on Nike Hyper Court, visit Hypercourt.ph.

Record bid

December 12, 2019 | 7:58 pm

The Yankees were determined not to let Gerrit Cole get away again. Having already zeroed in on him as their top free-agent prospect, they promptly made sure their pitch would not be topped by the competition. They proposed a contract that guaranteed him the highest figure for the longest time. And, for good measure, they topped their eye-popping record offer of $324 million over nine years with an out clause that he can exercise at his discretion midway through the deal. In other words, they placed a key to the door under their welcome mat — ensuring that he got the message they were bent on sending: They need him, and, to secure his future as best he can, he needs them.

Cole listened to all those who lined up for his services, of course. Prudence called on him to do so, and not simply because he was Major League Baseball’s most coveted difference maker heading into the winter sweepstakes. Considering the work he has done on the mound in the recent past and the havoc he is certain to wreak moving forward, he stands as the single most important target in the Bigs for the next half decade. Still, the Yankees were frontrunners for a cacophony of reasons. Having grown up cheering for them, he can now go full circle and be their star of stars.

Which leads to why Cole ultimately had no choice but to say yes to a situation that appealed to both logic and emotion. The Yankees are already built to contend for the here and now, not to mention the medium term. And, yes, they’re hungry for the hardware, what with the decade turning and the trophy count on their mantel still stuck at 27. So clear was the separation they created over the other suitors that he didn’t even take long to make a decision. The capacity — or, to be more precise, preference — of agent Scott Boras to play the waiting game notwithstanding, he was thorough but fast in assessing his choices. He then acted accordingly.

For the Yankees, the third time’s the charm. They couldn’t latch on to Cole when they picked him in the first round of the rookie draft 11 years ago; he opted to go to college instead. They then failed to trade for him a couple of seasons back; the Pirates rebuffed their advances and sent him packing for the Astros. They certainly pulled out all the stops in so doing; they abandoned their relative prudence and splurged on him in a manner not seen since they acquired Masahiro Tanaka in 2014. And while nothing less than a World Series victory is always expected, they now have the biggest tool they need to finish the job.

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Charter Change body wants economic restrictions lifted

December 12, 2019 | 1:00 am

A TASK force created to propose changes to the 1987 Constitution wants to remove economic restrictions in the Charter, including the ban on foreign investment in some industries.

In a statement, the Inter-Agency Task Force on Constitutional Reform said opening the Philippine economy to foreigners would create jobs and lift more people out of poverty.

The Philippines is at the bottom of Southeast Asian countries in terms of foreign direct investment, and President Rodrigo R. Duterte wants to change this by changing the constitution, task force member Gary B. Olivar said.

The plan is part of the president’s 10-point agenda, he added.

The Philippine has also lagged behind six major Association of Southeast Asian Nations members in terms of infrastructure development in the past 10 years as of 2015, Mr. Olivar said.

The country has likewise been left behind by its neighbors in terms of economic growth, he added.

Economic growth has also been limited by restrictive economic provisions of the three-decade-old Constitution, Mr. Olivar said.

“Because of all of these, this policy of restrictions in foreign investments, poverty is still rampant,” he pointed out. “We are the only country in Asean that has failed to cut poverty by half in the last 25 years.”

Mr. Olivar said the Finance department wants to eliminate all references to citizenship restrictions with respect to industries such as mass media and advertising, educational institutions, practice of professions, natural resources, mineral wealth and public utilities.

“This is the only way forward to open our economy and bring in foreign investments that will then create the jobs and technology that we need to continue moving forward even after this president,” he said.

The task force, however, wants to retain the prohibition on foreigners to own land.

Interior and Local Government Undersecretary Jonathan E. Malaya said lifting restrictions on foreign investment was among the constitutional reforms they recommended to the House of Representatives.

The agency earlier said at least 256 local chief executives have expressed their support for Mr. Duterte’s push to change the 1987 Charter. The task force also obtained 22,469 signatures from various citizens who support charter change.

Broad support for constitutional change should convince senators and congressmen to amend the charter, Mr. Malaya said.

The task force last week submitted its second set of proposed changes to the Charter to the House constitutional amendments committee. It wants to strengthen political parties, ban turncoats and political dynasties as part of charter change.

The task force said the anti-political dynasty provision of the 1987 Constitution should be made self-executing. It also wants to create a democracy fund for campaign finance reforms, and extend the terms of local government officials to five years with one reelection.

The second set of proposed changes cover political and electoral reforms to strengthen democracy and improve governance. It also seeks to introduce equality provisions to ensure more funds flow to the provinces.

Mr. Duterte created the task force, which is headed by the Interior and Local Government secretary, and is composed of 15 government agencies. — Emmanuel Tupas, Philippine Star

Impact of moves vs water firms flagged

December 12, 2019 | 12:34 am

By Victor V. Saulon Sub-Editor
and Vann Marlo M. Villegas Reporter

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.

“While we were meeting almost [the] whole day, our creditors have already asked us how will this affect [the company]. ‘Will you still be able to pay the loans that you’ve contracted with us long term?,’” Mr. Fernandez said.

During the hearing, state agency Metropolitan Waterworks and Sewerage System (MWSS) said its board of trustees had revoked a resolution issued in 2008 and 2009 that approved the extension of the concession of Maynilad and Manila Water Company, Inc.

“That’s the action of the board — the revocation of the 15-year extension,” MWSS Deputy Administrator Leonor C. Cleofas told lawmakers, saying the decision was reached during a Dec. 5 board meeting.

The move revoked the extension until 2037 of the concessions, which was agreed even before the end of the original term in 2022.

Share prices of listed firms concerned fell by more than 13% to multi-year lows: Manila Water shares dropped 13.93% to P12.48 apiece, the lowest in 10 years and seven months; while that of DMCI Holdings, Inc. — which owns a fourth of Maynilad — gave up 13.39% to P5.11 each, the lowest in more than nine years, and that of Metro Pacific Investments Corp. — which owns more than half of Maynilad — went down 13.08% to P3.19 each, the lowest in more than eight years.

Metro Pacific is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group which it controls.

RESPONSE

Antonino T. Aquino, former president of Manila Water and current member of its board, said in the same House hearing that it was also only on Wednesday that he learned about the decision of the MWSS board.

“Obviously it has implications on maybe the recovery period for all of the investments, that’s one item. And of course for all of those things, you are required that funds have to be borrowed,” he said in an interview after the hearing. “More importantly, we want to make sure that during that extension we’re able to address from our side new water source that we badly need.”

Mr. Aquino said the company would “definitely make a response.”

During the hearing, he said that since the extension of the contract, the company had implemented its spending plan on the assumption that it could recover its investment for a longer period.

He also said these investments were already factored in the rate rebasing even as early as 2013.

Mr. Fernandez said the extension was signed by the President of the Philippines at that time through the Finance secretary.

“We will respond formally, as we were given three days to respond,” he said.

Howard Randy A. Arzadon, assistant government corporate counsel at the Office of the Government Corporate Counsel, said the move of the MWSS board came after the directive of Malacañang to cancel the extension. “The concessionaires were given three days to give their position on the matter,” the government counsel said.

The extension was approved on Aug. 16, 2008 for Manila Water, and on Sept. 10, 2009 for Maynilad. Gloria Macapagal-Arroyo was president of the Philippines at that time.

The original concession agreement was signed in 1997 during the term of President Fidel V. Ramos between MWSS, which owns the franchise, and Ayala-led Manila Water and Maynilad, which at that time was led by the Lopezes’ Benpres Corp. and its French partner. Maynilad, at that time incurring losses, was inherited by its new owners after it was re-bid by the government in 2007.

“All the documents from day one came from the government,” said ANAKALUSUGAN Rep. Michael T. Defensor, chairman of the Public Accounts committee, who presided over the hearing.

Asked on the issue of the treatment of the concessionaires’ corporate income tax as an expense to be recovered from their customers, Maynilad’s Mr. Fernandez replied: “… [It] is our desire, in deference to the President, to come up with a workable solution together with the government.”

WHO IS RESPONSIBLE FOR THE AGREEMENT?

Presidential Spokesperson Salvador S. Panelo said in a statement Tuesday evening the President will soon read in public the letters sent him by both concessionaires.

“The Chief Executive will read the letters of Maynilad and Manila Water before the public for transparency and to show that all the steps being undertaken by the government in resolving this issue with the two Metro Manila water concessionaires are aboveboard and legitimate,” Mr. Panelo said.

“These companies not only have inefficiently delivered water to the households but exacted unconscionable amounts from the taxpayers,” he added.

“The President will evaluate this development, as well as study the practical and legal consequences of the situation, before making any decision on what measure to undertake next.”

In a separate hearing in the Senate, however, a former MWSS chief recalled that the government had to turn to foreign consultants, including the World Bank Group, for the drafting of the water concession agreement since no one in the country had any experience in this issue.

Former administrator Angel L. Lazaro III, who led the MWSS at the time of then president Fidel V. Ramos, said considering the agency had no prior experience, it consulted the World Bank in drafting the contract.

“Who is responsible for the concession agreement?” Mr. Lazaro said during a Senate hearing, which tackled ongoing concerns on water supply shortage, Wednesday.

“The concession agreement was drafted by our consultants kasi nung 1996 wala naman kaming alam (because we knew nothing about this subject in 1996).”

Mr. Lazaro explained the draft was later approved by the MWSS Board of Trustees, where he served as vice chairman, and later reviewed by a special advisory council formed by Mr. Ramos.

Senator Grace S. Poe-Llamanzares, as chairperson of the Senate Public Services committee, cited the need to talk next with those who drafted the contracts.

“We have to know who drafted the contract to make it disadvantageous to us,” Ms. Llamanzares said in a briefing after Wednesday’s hearing.

“Ngayon, meron bang liability ‘yyung concessionaires? Kung pinirmahan nila pero tayo naman ‘yung nagbigay nun, ang may kasalanan nun ‘yung gobyerno. (Now, do the concessionaires have any liability? If they signed contracts which the government itself offered them, then it is the government who is at fault).”

CLEAN SLATE

Before the revocation of concession extension, Maynilad was awaiting an unresolved claim on the Republic of the Philippines. On Dec. 29, 2014, Maynilad’s water tariff under the rate rebasing for the period from 2013-2017 received a favorable award in arbitration proceedings in the Philippines. But the MWSS did not implement the awarded tariff increase. The company proceeded to arbitration in Singapore and the final hearing was completed in 2016.

On July 24, 2017, a three-person arbitral tribunal unanimously upheld the validity of Maynilad’s claim against the undertaking letter issued by the Republic, through the Finance department, to compensate Maynilad for the delayed implementation of its tariffs for the rebasing period.

The tribunal ordered the Republic to reimburse Maynilad P3.4 billion, but later adjusted to P3.2 billion, for losses from March 11, 2015 to Aug. 31, 2016. It also ruled that Maynilad is entitled to recover from the Republic its losses from Sept. 1, 2016. Mr. Fernandez said the company had not move to enforce the award nor compel the government to pay.

Meanwhile, Manila Water said on Nov. 29, 2019 that it had received the award rendered by a separate arbitral tribunal in the proceedings in Singapore between the company and the Republic.

The Permanent Court of Arbitration ruled that Manila Water has a right to indemnification for actual losses suffered by it on account of the Republic’s breach of its obligation. It ordered the Republic to indemnify Manila Water the amount of P7.39 billion representing the losses it suffered from June 1, 2015 until 22 Nov. 22, 2019, plus other costs.

On Tuesday, officials of both companies said they were willing to waive their collection of the separate arbitral awards.

Mr. Fernandez said the “rationale” of Maynilad’s decision was that its chairman, Manuel V. Pangilinan, wanted that the company was willing “to start with a clean slate.” He said the company was willing to cooperate and discuss with the government “how to move forward.”

Mr. Aquino said that revocation of the concession’s extension was a more “disturbing” development. He said he hoped the company and the government would be able to come up with a “workable solution” to avoid further conflict and ensure a “fair return to whatever investments that we make.”

INVESTOR IMPACT

For European Chamber of Commerce of the Philippines President Nabil Francis, “Stability and predictability or the regulatory environment are crucial factors for investors.”

“Changing the rules in the middle of the game will send a negative signal to potential and current investors. This will also significantly affect investor confidence as well as the attractiveness of the Philippines as an investment destination,” he said via text when asked for comment.

Bienvenido S. Oplas, Jr., president of think-tank Minimal Government Thinkers, said this latest development in the government’s move on Metro Manila’s water service providers would have a “very negative” impact on investor confidence.

“It’s very negative because… FDI (foreign direct investment) is long term… among the main requirements of FDI is stability of policy, respect of contract,” Mr. Oplas said in a telephone interview.

“Once you say you have a concession for say, 20 years, 30 years, it should be honored because they’re going to put in big money and you cannot just pull it out any time,” he added.

“The message for all foreign investors around the world is that this administration can change rules any time, arbitrarily…”

Speaking to reporters in a briefing in Malacañan Palace, Socioeconomic Planning Secretary Ernesto M. Pernia said, however, that much depends on the quality and fairness of contracts.

Referring to “the sanctity of contracts,” Mr. Pernia said that “if they are not saintly… then they have to be revised.”

“As long as we are implementing correct policies, fair policies… that should lure investors.

Asked separately, presidential spokesman Panelo replied: “The opposite is true.”

“Investments will pour in because investors will feel secure that the Duterte presidency will not tolerate corruption and false narratives,” Mr. Panelo said in a mobile phone message.

“Uscrupulous investors will shy away because jail term will await them.” — with Charmaine A. Tadalan and Gillian M. Cortez

DBM sets P4.64-trillion 2021 budget

December 12, 2019 | 12:33 am

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.

The proposed budget for 2021 is equivalent to 20.2% of gross domestic product (GDP), he said.

Budget Undersecretary Laura B. Pascua said that revenues are programmed at P3.85 trillion.

Last week, the Department of Budget and Management (DBM) issued the national budget call for 2021, ordering government offices to start crafting their spending plans for the year.

Mr. Avisado said that for 2021, the cash budgeting system (CBS) will still be implemented to encourage state offices to spend their allocations on time by limiting project obligation of such funds to within the fiscal year, compared to two years previously.

For 2021, the budget will fund the government’s priority social protection and economic programs such as the Universal Health Care program, the Pantawid Pamilyang Pilipino Program, farmer safeguards under the Rice Tariffication Law, share in national taxes of the Bangsamoro Autonomous Region in Muslim Mindanao, the universal access to quality tertiary education, the national government’s refocusing of assistance to local governments with high poverty incidence, as well as for climate change mitigation and adaptation measures. — Beatrice M. Laforga

Congress ratifies national budget for next year

December 12, 2019 | 12:32 am

By Charmaine A. Tadalan
Reporter

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.

The budget was later ratified by both House of Representatives and the Senate during Wednesday’s session.

Mr. Angara said the proposed national budget will most likely be sent to Mr. Duterte in seven days.

The Bicameral Conference Committee started reconciling both versions of the 2020 spending plan on Nov. 29.

The House approved House Bill No. 4228, or the General Appropriations Act for Fiscal Year 2020, on Sept. 20, while the Senate passed its version on Nov. 27.

Senator Panfilo M. Lacson, one of the nine vice-chairmen of the Finance Committee, skipped the signing of the committee report after finding “last-minute” insertions — allegedly totaling about P16.345 billion — by members of the House.

Mr. Lacson cited as examples lump-sum appropriations and “vaguely described” projects in Albay (P670 million), Cavite (P580 million), Sorsogon (P570 million), Batangas (P502 million), Bulacan (P440 million), Pangasinan (P420 million) and Cebu (P410 million).

“Also, 117 flood control projects worth P3.179 B(illion) dominate the insertions, with eight projects uniformly budgeted at P60 M(illion) each,” Mr. Lacson said.

Enactment of the 2019 spending plan was delayed due to an impasse between the House and the Department of Budget and Management (DBM), and later on as the Senate questioned “post ratification” realignments made by the House.

That prompted Mr. Duterte to veto some P95.3-billion appropriations, when he signed the 2019 budget on April 15. This reduced the 2019 spending plan to P3.662 trillion.

That delay plus a ban on new public works 45 days ahead of the May 13 midterm elections — which left planned new infrastructure projects unfunded last semester — made overall economic growth slow to 5.8% in the first three quarters from 6.2% a year ago and against a 6-7% government target for 2019.

To prevent this delay from recurring, the DBM on Nov. 29 released its national budget call, directing government agencies to begin drafting their proposed spending plan. The Development Budget Coordination Committee on Wednesday announced the 2021 budget is pegged at P4.640 trillion.

Growth outlook of select Asian economies

December 12, 2019 | 12:32 am

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. Read the full story.

Planners cut economic projections further

December 12, 2019 | 12:31 am

By Beatrice M. Laforga

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 177^th 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.

Socioeconomic Planning Secretary Ernesto M. Pernia said state planners trimmed their medium-term targets in the face of persistent global economic slowdown due largely to unresolved trade tensions between the United States and China.

“Trade tensions between the USA and China driving lower global economic growth, leading in turn to weaker demand for our exports; also creating uncertainty that dampen foreign investments in emerging economies, including the Philippines,” Mr. Pernia said in a mobile phone message yesterday.

The DBCC also revised its GDP growth target this year to 6-6.5%, narrower range than its already tempered previous target of 6-7%. “For the year we’re actually proposing a tighter band because we already have the Q1-Q3 (GDP) numbers… because if we say it’s 6-7%, then it’s no longer credible given that we already have the first three quarters,” National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon said in the press conference after the DBCC meeting.

Economic growth picked up to 6.2% last quarter after the 5.5% average in the first half, bringing the year-to-date pace to 5.8% compared to the year-ago 6.2%. It would take 6.7% growth in the fourth quarter to enable the full-year average to reach the low end of the official target.

For the medium-term, Ms. Edillon said that the government will “stick to prudent fiscal management.”

The DBCC also downgraded its assumptions for other macroeconomic indicators, including the dollar price of Dubai crude oil per barrel, the peso-dollar exchange rate as well as its projections on growth of goods sold abroad, as well as merchandise and service imports.

The interagency body — which consists of the Department of Budget and Management, the Finance department, NEDA, the Office of the President and the Bangko Sentral ng Pilipinas — now sees the peso ranging at P51-52 per dollar this year, compared to its P51- to 53-per-dollar forecast it gave in July. It also revised its assumption for peso-dollar exchange to P51-54 for 2020-2022 from the P52-55 previously.

For the dollar price of Dubai crude, which is used as a benchmark for local prices of oil products, the assumption was reduced to $63-64 per barrel this year and $55-70 per barrel in 2020-2022. This compares to the $60-75 per barrel it previously projected for 2019-2022.

The assumption for the 364-day Treasury bill rate was also revised down to 5.1-5.3% in 2019 (from 5.5-6.5%) and 3.5-4.5% in 2020 to 2022 (from 5-6%).

Similarly, the six-month London Interbank Offered Rate (LIBOR) assumption was trimmed to 2.3-2.4% this year and 1.5-2.5% in 2020 to 2022, from the previous forecast of 2.5-3.5% on 2019-2022.

The assumption for goods export growth was also scaled down to one percent in 2019 and four percent next year “due to continuing unresolved trade tensions,” from its previous forecasts of two percent and six percent, respectively.

“However, the assumptions for 2021 and 2022 are retained at six percent as global economic activity is expected to recover in the medium-term,” the DBCC said.

Ms. Edillon told reporters during the briefing that assumptions for goods imports were likewise lowered to two percent this year from a previous forecast of seven percent, while the assumption for 2020 to 2022 was maintained at eight percent. “This is supported by robust domestic growth outlook, so it was has already been adjusted accordingly,” she said.

Service import growth projection for this year was trimmed to two percent from three percent previously, but forecasts for 2020 and for 2021-2022 were retained at four percent and five percent, respectively.

The assumption for service export growth was retained at nine percent from 2019 to 2022.

The DBCC sees the average inflation rate for 2019 to clock in at 2.4% — in line with the central bank’s forecast — amid “relatively stable prices” for consumers, and maintained a 2-4% range for 2020-2022.

The DBCC adopted a slightly lower revenue target for next year at P3.49 trillion from the P3.54-trillion program it set in its meeting last March.

“Well, again, you have to remember that the economy slowed because of the drop in the budget. I guess those are the effects of those slowdown,” Finance Secretary Carlos G. Dominguez III told reporters after the briefing.

Revenues are projected at P3.85 trillion for 2021 and P4.31 trillion for 2022.

State economic planners also set the 2020 deficit cap at an equivalent of 3.2% to GDP.

Mr. Dominguez also said that they maintained their debt-to-GDP ratio cap at 42%.

ADB SEES FASTER Q4 GROWTH
In its latest report, ADB retained its economic growth forecast for the country, along with Indonesia (5.1% for 2019 and 5.2% for 2020) and Malaysia (4.5% for 2019 and 4.7% for 2020).

“GDP growth is seen accelerating in Q4 of 2019 and throughout 2020, supported by investment as more infrastructure projects come onstream. Accommodative fiscal and monetary policies will support domestic demand. Growth forecasts are maintained at 6.0% for 2019 and 6.2% for 2020,” ADB said in its report.

This is against the region’s downgraded GDP growth forecast of 4.4% from 4.5% previously, with growth forecasts for Singapore and Thailand trimmed while those of Brunei and Vietnam were bumped up. “With the exception of these two economies (Brunei and Vietnam), continued export declines and weaker investment weigh on growth prospects in the subregion.”