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Sustainability and tax: The future is calling

The journey to sustainability started with the Industrial Revolution, when economic growth was characterized by faster and large-scale manufacturing processes. This came at the expense of a degrading environment, unhealthy labor practices, and aggressive cost-saving mechanisms.

 Now, sustainability has evolved into a critical key performance metric that drives long-term value for investments and embraces corporate responsibility in the use of natural resources, uplifting of social communities, and upholding accountability for regulatory obligations.

As the economy moves towards achieving the UN Sustainable Development Goals (SDGs), taxation plays the role of a catalyst that facilitates an enduring partnership between the government and businesses in building a competitive and resilient nation.

This is the eighth and last article in our series following the 2nd SGV Tax Symposium, which focused on how a sustainable and effective tax ecosystem can advance the sustainability agenda for both the public and private sectors. This article will highlight the role of taxation in a company’s sustainability strategy that aligns with government priorities and contribute to building a better Philippines.

SUSTAINABILITY AND ESG
One of the ways businesses build public trust and stakeholder confidence is by having key performance indicators (KPIs) that demonstrate their environmental, social, and governance (ESG) commitments. Businesses that integrate ESG metrics into their sustainability strategies not only create long-term value, but also set a baseline standard for future growth.

During the Conversation with the C-Suites panel at the 2nd SGV Tax Symposium, Chief Finance, Risk, and Sustainability Officer of Metro Pacific Investments Corp. (MPIC), June Cheryl Cabal-Revilla, said MPIC’s holistic approach to sustainability embodies a framework for economic, environmental, social, and governance (EESG) measures which are complemented by defined KPIs.

“Apart from the usual economic or financial resilience, we put priority on environment and climate resilience, then on social, organizational, and community resilience because that involves all our employees and the communities around us who are also our customers. Lastly, we focus on governance and reputational resilience, which cut across everything that we do. That has been our way of life for three to four years now. It has been embraced by everyone in the company/group,” Ms. Cabal-Revilla said. In addition, they have already incorporated sustainability in planning their capital expenditures.

According to Ms. Cabal-Revilla, “there is a desire for governmental entities to gain a more comprehensive understanding of the essence of sustainability. This desire emphasizes EESG principles, their impact, and the ability to echo their critical nature to the greater public.”

Although businesses have the influence and tools to create positive outcomes, it takes a whole-of-society approach sustained by long-term government support to meet the challenges of sustainability.

TAX AND ENVIRONMENTAL SUSTAINABILITY
Alongside regulations, taxation is also a key tool in promoting sustainable development practices and in impeding activities harmful to the environment through targeted fiscal incentives and punitive taxes. According to the Organisation for Economic Cooperation and Development (OECD), environmentally related taxes “provide incentives for further efficiency gains, green investment and innovation and shifts in consumption patterns.”

In the Philippines, businesses can be partners of the government in its green campaign by aligning their investments and projects with the priority sectors of the Philippine Economic Zone Authority (PEZA) and Board of Investments (BoI). Green industries such as renewable energy projects, energy efficiency activities, and eco-industrial park development, among others, are also eligible for incentives. These highlight the administration’s goal to make the Philippines a regional hub for globally competitive, innovative, and sustainability-driven industries.

In addition to tax incentives, the government can also potentially explore imposing additional charges for environmental and health damage. Such punitive taxes can stimulate businesses and consumers to seek cleaner solutions that reduce greenhouse gas emissions while simultaneously raising revenue to fund vital government social services.

TAX AND SOCIAL RESPONSIBILITY
Taxation also contributes to the social externalities of economic activity by creating and/or attracting investments that create employment opportunities in rural and less developed areas, build infrastructure to support trade and industry, and sustain government and private expenditures for education, health, and social welfare activities.

TAX AND TRANSPARENCY IN GOVERNANCE
Proper tax governance in ensuring that businesses pay a fair amount of tax is an issue held highly not only in local tax audit and enforcement programs, but also globally given recent regulatory developments against base erosion and profit shifting (BEPS).

 The Bureau of Internal Revenue (BIR), under the leadership of Commissioner Romeo Lumagui, Jr., embodies this principle on sustainability with its four pillars: excellent taxpayer service; integrity in the revenue service; audit and enforcement; and digitalization. Guided by these pillars, the BIR aims to protect the interests of the government and its stakeholders, and at the same time foster a business climate that is conducive to growth, diversification and profitability.

In alignment with the BIR’s priority programs, companies reinforce their own governance with an oversight mechanism that upholds accountability for tax planning and decisions made around its tax compliance and reporting.

SUSTAINABILITY AS COLLABORATIVE EFFORT
The road to sustainability is not just one person’s journey. It requires a collective effort from the government, the private sector, and the taxpaying public who must all work hand-in-hand to achieve the Philippines’ sustainable development goals for a strong and better future.

The 2nd SGV Tax Symposium, in relaunching the SGV Tax Vision, articulates on the interdependency among taxpayers, regulators, and tax practitioners who each play a significant and complementary role in enabling businesses and driving socio-economic growth for the whole country.

In a sustainable tax ecosystem, taxpayers embody a culture of integrity with their knowledge on tax rules and a better appreciation of their social responsibility and commitment to nation-building by paying the correct taxes.

Regulators enable taxpayers to align their expenditures with government priorities and contribute the most in meeting desired outcomes. This is achieved by providing detailed and specific policies and regulations with clear accountability and measurable targets, produced in close collaboration with concerned industries and affected communities.

 Tax practitioners support taxpayers and regulators alike by being equipped with the necessary skills to competently explain tax rules while upholding the value of integrity. They thereby foster an environment where taxpayers are compliant, government can deliver on its commitments, the public can access job opportunities, businesses can realize their long-term value, and the Philippines becomes a conducive place for investment.

While the factors that drive sustainability changes arise from different backgrounds, in the end, consistent and continuous collaboration is vital to attaining effective and long-term sustainable development, growth and resiliency.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Margaux A. Advincula is a tax partner and head of the SGV Clark Office, and Michelle C. Arias is a tax senior director.

Meeting of Israel, Qatar officials raises prospects of hostage talks

COLE KEISTER-UNSPLASH

CAIRO/GAZA/JERUSALEM — Israel appeared to confirm that new negotiations were under way to recover hostages held by Hamas, after a source said Israel’s intelligence chief met the prime minister of Qatar, a country mediating in the Israeli-Palestinian conflict.

Prime Minister Benjamin Netanyahu told a press conference on Saturday the war in Gaza was existential and must be fought until victory. He said Gaza would be demilitarized and under Israeli security control.

Israel’s offensive in Gaza helped clinch a partial hostage-release deal in November, Mr. Netanyahu said, vowing to maintain intense military pressure on Hamas. He has vowed to destroy the militant Palestinian group, which runs the densely populated strip.

“The instruction I am giving the negotiating team is predicated on this pressure, without which we have nothing,” he said.

Hamas militants killed 1,200 people and captured 240 hostages in a surprise raid into Israel on Oct. 7. Israel’s counteroffensive has killed close to 19,000 people, according to Gaza health authorities, and left thousands buried in the rubble.

Aid organizations say the destruction of Gaza and the displacement of most of its 2.3 million people — many living in tents and makeshift shelters without food or clean water — is a humanitarian crisis.

The head of Israel’s Mossad spy agency, David Barnea, met Qatari Prime Minister Mohammed bin Abdulrahman Al Thani late on Friday, according to a source with knowledge of the matter, as attention turned to a possible Gaza truce and a prisoner and hostage deal.

The meeting in Europe was apparently the first between senior officials from Israel and Qatar, which has been acting as a mediator, since the collapse of a seven-day ceasefire in late November.

‘GET THEM OUT OF HELL’
Mr. Netanyahu sidestepped a question about the meeting but confirmed he had given instructions to the negotiating team.

“We have serious criticisms of Qatar,” he said, alluding to the gas-rich Gulf state’s ties to Hamas and Israel’s arch-foe Iran. “But right now we are trying to complete the recovery of our hostages.”

Hamas said in a statement it “affirms its position not to open any negotiations to exchange prisoners unless the aggression against our people stops once and for all,” adding: “The movement communicated this position to all mediators.”

The accidental killing of three hostages by Israeli forces has put increased pressure on Mr. Netanyahu to find a way to secure the release of those held.

As Mr. Netanyahu spoke, several hundred people staged a protest in Tel Aviv, with some holding placards, including one saying “get them out of hell.” A speaker shouted: “Bring them home now!”

At nightfall on Saturday, residents reported intensified fighting in the centre of Khan Younis in southern Gaza, with Israeli planes and tanks bombing and shelling and the sound of rocket grenades, apparently fired by Hamas fighters.

“Every day the situation gets worse. Food gets less, water gets worse. Only death, fear and destruction get greater,” said Samira, 40, a mother of four, who is displaced in Rafah, near the southern border with Egypt.

In signs of the wider ramifications of the conflict, Yemen’s Iranian-backed Houthis said they had attacked the Israeli Red Sea resort of Eilat with a swarm of drones, one of several drone incidents reported in the region on Saturday.

Two major freight firms said they would avoid the Suez Canal as the Houthis stepped up attacks on commercial vessels in the Red Sea.

The US Central Command said the destroyer Carney had shot down 14 Houthi drones in the Red Sea. Britain said one of its warships had shot down a suspected attack drone targeting merchant shipping. — Reuters

US warns NK against nuclear attacks

STOCK PHOTO | Image by Pexels from Pixabay

WASHINGTON  — The United States has warned North Korea (NK) that any nuclear attack against the nation or its allies “is unacceptable and will result in the end of the (Kim Jong) Un regime,” a joint US-South Korean statement said on Saturday.

“The US side reiterated that any nuclear attack by the DPRK against the ROK will be met with a swift, overwhelming, and decisive response,” the statement said.

The second US-Republic of Korea Nuclear Consultative Group (NCG) convened in Washington on Friday for talks on nuclear deterrence as part of a commitment by the two countries to share more insight into planning in the event of conflict with North Korea. Pyongyang has developed and tested a range of ballistic missiles that can reach targets in South Korea, Japan and the US mainland.

Kim Tae-hyo, South Korea’s deputy national security adviser said on Friday that North Korea may test-launch an intercontinental ballistic missile this month, which was considered a nuclear threat regardless of its range because it can carry a nuclear warhead.

The third NCG will be convened in Korea next summer. — Reuters

For Kuwait’s new emir, Saudi ties are key

KUWAIT’S Crown Prince, Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah is seen at 10 Downing Street, in London, Britain, Aug. 29, 2023. — REUTERS

KUWAIT — Sheikh Meshal al-Ahmad al-Sabah was named as Kuwait’s new emir on Saturday after the death of his brother Sheikh Nawaf al-Ahmad al-Sabah aged 86.

Sheikh Meshal, 83, spent much of his career helping build the Gulf state’s security and defense apparatus before stepping into the public eye when he became crown prince three years ago.

He was thrust further into the spotlight when he was handed most of the frail Emir Sheikh Nawaf’s duties in November, 2021.

Sheikh Meshal becomes Kuwait’s third emir in just over three years. Until 2020, the post had been held for 14 years by Sheikh Sabah al-Ahmad, a prominent figure in the Arab world known for helping lead Kuwait out of the ruins of Iraq’s 1990 invasion.

As he takes the helm of the Organization of the Petroleum Exporting Countries oil producer, Sheikh Mehshal is expected to preserve key Kuwaiti foreign policies including support for Gulf Arab unity, Western alliances, and good ties to Riyadh — a relationship seen as a top priority to him.

He may also look to expand ties to China as it seeks a bigger role in the region, especially after Beijing sponsored a deal that normalized ties between Iran and Saudi Arabia in March.

Sheikh Meshal signed several economic agreements during a visit to China in September, when he attended the opening ceremony of the Asian Olympic Games.

“He desires stability, and stresses the importance of Kuwait’s relationship with Saudi Arabia in particular,” a Kuwaiti source said, adding that Sheikh Meshal was concerned about the regional situation and afraid of wars in the region.

A Western diplomat described Sheikh Meshal as an early riser with a methodical work style. “He pays attention to details, sometimes to the very small details,” the diplomat said. While Sheikh Sabah had been closer to diplomatic work, Sheikh Meshal was closer to the military, the diplomat said.

Sheikh Meshal was deputy chief of the National Guard from 2004-2020 and head of State Security for 13 years after joining the interior ministry in the 1960s. He had been offered several senior roles in the past but declined them, experts say.

He attended Britain’s Hendon Police College and was credited with helping to reform the National Guard.

Sheikh Meshal is the seventh son of former ruler Ahmed Al-Jaber, and a brother of three former rulers, Sheikh Jaber Al-Ahmad, Sheikh Sabah Al-Ahmad, and Sheikh Nawaf Al-Ahmad. He is married and has five sons and seven daughters.

Some believe he may move to further align Kuwait with Riyadh. His first calls after taking on Sheikh Nawaf’s duties were with King Salman and Crown Prince Mohammed bin Salman, and his first trip outside the Kuwait was to Saudi Arabia, which he has visited more than any other country.

As emir, he will have to grapple with long-running strains between the ruling family and its critics in the perpetually deadlocked and fractious parliament that critics say have hindered fiscal and economic reform.

Kuwait’s legislature wields more influence than similar bodies in other Gulf monarchies. The resulting political deadlock has for decades led to cabinet reshuffles and dissolutions of parliament.

The first two years of Sheikh Nawaf’s rule were buffeted by political turbulence with eight governments formed and three parliamentary elections held.

In 2022, Sheikh Meshal intervened in a protracted dispute between the government and parliament. He dissolved parliament, decreed new elections and replaced the prime minister but declared no intention to interfere in the vote or the selection of parliament speaker.

His move was widely welcomed by the opposition.

He also pledged to adhere to the constitution and not to amend, revise, or suspend it, in a speech delivered on behalf of the emir in June 2022. Parliamentarians and analysts considered this historic.

Although the 2022 elections were annulled by the Constitutional Court in March 2023, the subsequent vote – won by a majority of lawmakers who declare themselves “reformists” – led to a rare consensus between parliament and the government. — Reuters

Asylum seekers may overwhelm parts of Europe, says UK’s Sunak

British Prime Minister Rishi Sunak — REUTERS

ROME — British Prime Minister Rishi Sunak said on Saturday that he would push for global reforms to the asylum system and warned the threat of growing number of refugees could “overwhelm” parts of Europe.

In a speech in Italy, Mr. Sunak made some of his strongest criticisms of the global asylum system as he tries to revive his government’s plans to send refugees to live in Rwanda.

Mr. Sunak made the comments at a political festival organized by the party of his Italian counterpart Giorgia Meloni, where he warned that some “enemies” were deliberately “driving people to our shores to try and destabilize our societies.”

“If we do not tackle this problem, the numbers will only grow. It will overwhelm our countries and our capacity to help those who actually need our help the most,” Mr. Sunak said.

“If that requires us to update our laws and lead an international conversation to amend the post-war frameworks around asylum, then we must do that.”

Britain’s former Home Secretary Suella Braverman earlier this year called for changes to United Nations Refugee Convention that obliges all signatories to grant asylum to people fleeing persecution.

The provision has been one of the biggest legal barriers to the British government’s efforts to stop small boat crossings and to send would-be asylum-seekers to Rwanda for processing.

Britain and Italy announced plans on Saturday to jointly co-finance the journey home for migrants stranded in Tunisia, according to statements from both countries, but did not say how much would money was being provided.

Last month, Italy agreed with Albania to build sea migrant reception centres in Albania to host migrants trying to come ashore in an effort to try to bring down numbers that have nearly doubled in the past year.

A few days ago, Mr. Sunak survived a major threat to his leadership on Tuesday when he won a vote in parliament on an emergency bill to revive his plan to send asylum seekers to Rwanda, seeing off a rebellion from some of his lawmakers. — Reuters

Consumer pessimism persists in Q4; businesses upbeat — BSP survey

PHILIPPINE STAR/WALTER BOLLOZOS

Consumers remained pessimistic in the fourth quarter (Q4) due to elevated prices and lower salaries, a survey by the Bangko Sentral ng Pilipinas (BSP) showed.

The BSP confidence index (CI) among consumers decreased to 19% in the fourth quarter from a 9.6% contraction in the third quarter.

Rising prices, lower income, limited job opportunities, and doubts about the effectiveness of government policies on various economic aspects were the factors consumers attributed to their negative sentiment in the fourth quarter, the BSP said.

Consumers were more hesitant to buy big-ticket items in the fourth quarter this year, with the confidence index sliding to -71.3% from -62.7% in the third quarter.

“Consumer outlook is more pessimistic across the three component indicators and across income groups,” the BSP noted, adding that pessimism increased in low- and middle-income groups, while optimism turned into pessimism in the high-income group.

The BSP also observed a decrease in the percentage of households with loans and savings.

At the same time, the confidence index dropped to 5.6% for the first quarter of next year, down from the previous 7.8%.

Over the next 12 months, the index declined to 15% from 18.9%.

BUSINESS OPTIMISM

Meanwhile, the confidence index for businesses went up to 35.9% in the fourth quarter, up from 35.8% in the previous quarter.

The respondent companies were optimistic due to expectations of increased sales and production during the holidays, sustained economic recovery, business expansions in several sectors, development of new products and services, and expectations of robust consumer spending.

“However, the current quarter’s consumer index was tempered by concerns of pessimistic firms over the negative economic impact of the ongoing conflicts in Gaza and Ukraine, elevated inflation, and higher interest rates,” the BSP said.

The nationwide consumer survey response rate for this quarter was slightly lower at 97.4% from 97.6% in the previous quarter, the central bank noted.

Meanwhile, the business survey response rate increased to 65.1% from 64.9%.

According to the central bank, it interviewed 5,398 households for the survey conducted from Oct. 2 to 13 and 1,548 business owners for the survey held from Oct. 5 to Nov. 14.—Keisha B. Ta-asan

vivo brings heat to NBA 3X with V29 Series 5G plus thrilling on-court activity

Global smartphone leader and Official Smartphone of the National Basketball Association (NBA), vivo, brought the heat to the NBA 3X Philippines 2023, unveiling its V29 Series 5G and engaging basketball enthusiasts with thrilling on-court activity.

Celebrating a decade of basketball excitement, NBA 3X Philippines 2023 brought together players of all skill levels for a thrilling 3-on-3 basketball competition, showcasing the dynamism of the game. As the official partner and smartphone of the NBA in the Philippines, vivo showcased its commitment to blending technology and passion for sports.

The highlight of the event was vivo’s latest marvel, the V29 Series 5G – the Aura Portrait Master 2.0. Attendees had the opportunity to see its innovative features and sleek design that define vivo’s position at the forefront of smartphone technology.

Complementing the competition, vivo hosted the “Five-Man Standing Free Throw Edition,” a captivating on-court activity where participants competed for victory, with the last five standing receiving exclusive vivo premium belt bags.

At the event area, the vivo booth allowed attendees to experience the latest smartphone lineup, including the V29 Series 5G, Y36, Y27, Y17s, and Y02t, showcasing vivo’s dedication to delivering cutting-edge technology to its users.

The participation of vivo in the NBA 3X Philippines 2023 is just the start of a fruitful partnership. Soon, select vivo stores will feature dedicated NBA sections, providing fans with a unique space to indulge in NBA content, including live streaming of games and programming through NBA League Pass.

 

To elevate the excitement for NBA fans in the Philippines, vivo has launched captivating promotions, including the ongoing “Christmas Make a Wish” raffle promo. Until Jan. 31, 2024, participants can share their Christmas wishes for a chance to win three tickets to an NBA regular-season game, three autographed Wilson basketballs, and 50 codes for NBA League Pass. To join the promo and make your Christmas wish, visit www.vivoglobal.ph/what-is-your-christmas-wish.

vivo’s presence at NBA 3X Philippines 2023 underlines the brand’s dedication to seamlessly merging technology with the spirit of sports, providing an unparalleled and immersive experience for fans.

Official NBA merchandise is available at NBA stores at SM Megamall and SM Mall of Asia, as well as NBAStore.com.ph. For all the latest NBA news and updates, Filipino fans can visit www.nba.com, download the NBA App, and follow the NBA on Facebook, X, and TikTok.

For more information on vivo Philippines and its latest product offerings, visit vivoglobal.ph and follow the official vivo accounts on Facebook, X, Instagram, TikTok, and YouTube.

 

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Gift your loved ones with AXIS timepieces this Christmas

Known for high-quality, modern, and stylish timepieces, AXIS believes that a watch is more than just an accessory but an extension of one’s signature style.

Thus, it consistently comes out with classic and contemporary watches that will please even the most discerning of tastes. Adored by men and women of all ages, AXIS timepieces make for a great gift especially this holiday season. Incorporating Japan Made movement into each product and subjected to rigorous inspection, AXIS watches are always of the highest possible quality. Coupled with stylish, contemporary designs AXIS watches are the ideal everyday accessory, which can be easily matched with any outfit.

2Gether at AXIS  Christmas Town

To usher in the holidays, AXIS launched its Christmas Town Exhibit at The Block, SM City North Edsa. Just in time for this year’s celebrations, AXIS opened its Christmas Town to the public last November 30 at The Block, SM North Edsa. Guests were charmed by AXIS timepieces while enjoying family-friendly activities that evoke the fun, joyous spirit of the season.

Hence, the AXIS Christmas Town was created with the theme, “2Gether” in mind. More than being a catchy term, this evokes the enduring value of kinship, celebrated through the joy of giving. Guests present at the launch of the AXIS Christmas Town were able to experience all the fun that a holiday event can bring.

Celebrity and media guests such as Christine Samson, Bea Arboleda, Albert Nicolas and Evan Tan were delighted to see all the holiday themed activities and IG-worthy backdrops available in the event area.

AXIS WATCH and Hello Kitty 

Another notable highlight of the event was the launch of the highly-anticipated Axis x Hello Kitty collection. Guests were able to check out and try on the different AXIS’ Hello Kitty timepieces available at the event.

Incorporating sweet, girly details that evoke the enduring charm of Hello Kitty, each AXIS and Hello Kitty timepiece will delight Hello Kitty fans young and old. Make sure to check out AXIS latest collection today!

Discover a world of wonderful possibilities with AXIS timepieces. Known for its value-driven contemporary watches, AXIS gives its users the flexibility to showcase their style while having a practical, dependable everyday accessory.

As time is something to be valued and used to our advantage, wearing a watch has been a must for many. This Christmas time, gift yourself and your loved ones with a precious AXIS timepiece that will last you forever. Aside from being an important accessory, a watch also shows how much you value time spent with those you give it to.

Axis Watches are available at Watch Republic retail shops and SM stores nationwide

Shop online at https://www.watchrepublicshop.com/collections/axis.

 

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InLife’s Aguas underscores needed virtues and public-private partnerships for long-term progress

InLife Executive Chairperson Nina D. Aguas

Accountability, transparency, agility, consistency.

According to InLife Executive Chairperson Nina D. Aguas, these are needed to ensure that the country gets the investment support it needs, while improving the lives of its citizens and ensuring that the private sector flourishes.

Speaking as one of the panelists during the Partnerships for Long-Term Growth: Contributions of the Private Sector in Development Panel during the recently held Pilipinas Conference 2023, Ms. Aguas underscored the importance of these four virtues as driving forces towards a more progressive country.

She likened the experience to setting up a business in Singapore, where because of these four, businesses get established in merely hours.

“We talk about the ease and costs of setting up a business. There it only takes two hours to be able to start a business. It does not take days.” She adds that our processes need to be simplified. “(In the Philippines) the tax regime alone is too complicated. In Singapore, when filing your individual tax returns, you’re audited before you start to pay. And then you’re given a year to pay for the whole thing. It’s all technology-driven so that makes it a lot easier. It’s very transparent and the process is simple. I’d really like that for the Philippines.”

She further explains the importance of long-term investments to insurance companies such as InLife, the company she heads.

“We in the insurance industry, are natural aggregators of policyholders’ money that is invested long term. My challenge is, I don’t have enough investment outlets that will support yield and duration. If the corporates can give me that, welcome. And if the government can also provide us with investment outlets, then welcome. (Together,) we can stimulate the economy.”

The panel also discussed how the private sector can contribute to upscaling the educational system of the country. Aguas underscored the importance of being able to harness the best and the brightest among Filipinos.

“Truly, our educational system is not at par with the rest of some of the countries we’d like to benchmark ourselves against. If we are into nuclear in ten or twelve years, do we have the nuclear engineers to do it? I don’t think so. We should incubate some of the best and brightest Filipinos through a partnership between the government and the private sectors. Let’s train them so we have a pool of talent in the Philippines. Give them access to great education and training. We talk about upscaling and upskilling all the time, but it’s not targeted. And then we incentivize them enough so that they don’t leave the country. We have geniuses in the Philippines, but I don’t think we have such a targeted solution for educating some of the best in the country.”

On the topic of global risk and opportunities, Aguas highlighted the ever-evolving regulatory challenges. She added a possibility of another black swan, albeit a small one. To counter another black swan, she advocates for more support to the equities market.

“We don’t have enough public shareholdings. And there’s very, very low liquidity in our stock market. We say 20% should be publicly-held. That’s why if we want investors to come in, we have to provide that liquidity.”

Joining Aguas in the panel were Ayala Corp. President and CEO Cezar Consing, Microsoft Philippines CEO Peter Maquera, International Container Terminal Services EVP and Global Corporate Head Christian Gonzalez, and Acciona S.A. Regional Director of Infrastructure in SouthEast Asia Ruben Camba.  Panel moderator was Metro Pacific Investments Corporation’s Government Relations and Public Affairs Head Atty. Mike Toledo. The Pilipinas Conference 2023, held on November 22, 2023 at the Peninsula Manila, was organized and presented by think tank and research organization, Stratbase ADR Institute.

 

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BSP sees narrower 2024 current account deficit

REUTERS

The Philippines’ current account deficit is expected to narrow to $9.5 billion, or 2.0% of gross domestic product (GDP) in 2024 from the projected deficit of $11.2 billion, or 2.5% of GDP, this year, the central bank said on Friday.

The Bangko Sentral ng Pilipinas’ (BSP) previous forecast for 2024 current account balance was at $10.3 billion deficit, equivalent to 2.1% of GDP.

 It expects a balance of payments (BOP) surplus of $0.4 billion, or 0.1% of GDP next year, smaller than the $1 billion surplus, 0.2% of GDP, earlier projected.

For 2023, the BOP surplus is expected at $1.1 billion, or 0.2% of GDP.

“The current account is projected to remain in deficit for 2023, but with prospects of narrowing in 2024,” the BSP said in a statement, owing to a rebound in trade activity.

Steady inflows of overseas Filipino remittances, seen growing at 3.0% in 2024, will likewise help narrow current account gap, it added.—Reuters 

PHL converts $11.13-billion World Bank loans to fixed rate 

REUTERS

The Philippines has converted $11.13 billion worth of outstanding World Bank loans to fixed rate from floating rate, a move that could yield as much as $125.1 million in foreign interest payment savings, its finance ministry said on Friday.

The transaction, which was done last month, achieved an average fixed reference rate of 4.19% for the 40 International Bank for Reconstruction and Development loans, which is substantially lower than the prevailing rate, the Department of Finance said in a statement.—Reuters

October remittances hit 10-month high

Cash remittances from overseas Filipino workers (OFWs) rose by 3% in October, as migrant Filipinos sent more money home ahead of the holiday season.

Data from the Bangko Sentral ng Pilipinas (BSP) released on Friday showed cash remittances coursed through banks stood at $3 billion in October, higher than the $2.91 billion in the same month last year.

The amount of money sent by OFWs was the highest in ten months, or since the $3.16 billion in December last year.

Month on month, the 3% growth in cash remittances was faster than the 2.6% seen in September and marked the fastest pace in remittance growth since 3.7% in April.

“The growth in cash remittances in October 2023 was primarily due to increased receipts from both land- and sea-based workers,” the central bank said in a statement.

Land-based OFWs sent $2.4 billion in October, up by 3.1% from $2.33 billion in the same month last year.

Remittances from sea-based workers, on the other hand, rose by 2.5% to $600 million in October from $580 million a year ago.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said remittances typically increase in the fourth quarter due to holiday-related spending.

For the first 10 months of the year, cash remittances increased by 2.8% year on year to $27.49 billion.

The growth in cash remittances during the January-to-October period was driven mainly by inflows from the United States, Saudi Arabia, and Singapore.

By country source, the United States remained the biggest source of cash remittances at 41.5%. It was followed by Singapore (7%), Saudi Arabia (6%), Japan (5%), United Kingdom (4.8%), United Arab Emirates (4.1%), Canada (3.6%), Qatar (2.8%), Taiwan (2.7%), and Korea (2.5%).

Remittances from the top 10 countries accounted for 80% of the total during the 10-month period.

At the same time, BSP data showed personal remittances increased by 3.1% to $3.3 billion in October. This brought the 10-month tally to $30.57 billion, up by 2.9% from a year ago.

Mr. Ricafort said still-elevated inflation may have prompted migrant workers to send more money home to help their families cope with rising prices.

“OFW remittances have more peso equivalent for every US dollar sent, (which is) a source of consolation for OFWs and their families/dependents, especially in coping with higher prices/inflation, as well as to cope up with higher interest rate payments,” he said.

Headline inflation slowed to 4.9% in October from 6.1% in September, breaching the central bank’s 2-4% target for the 19th straight month.

In October, the Monetary Board raised borrowing costs by 25 basis points (bps) in an off-cycle move. This brought the benchmark interest rate to a 16-year high of 6.5%. The BSP has hiked interest rates by a total of 450 bps since May 2022.

Modest growth in cash remittances may continue in the coming months as families still need to cope with high inflation, Mr. Ricafort said.

The central bank expects remittances to grow by 3% this year. — Keisha B. Ta-asan

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