Iloilo goods, arts featured in ‘Dagyang sa Kapitolyo’ on Jan. 20–26

January 20, 2020 | 8:36 pm

A WEEK-LONG trade fair featuring products from the different towns of Iloilo province opened on Monday at the capitol compound in time for the Dinagyang Festival, the biggest annual festival of the independent city of Iloilo. Provincial Administrator Suzette A. Mamon said they also wanted to offer activities to residents and guests through the provincial government’s own “Dagyang sa Kapitolyo” apart from the events lined up by the Iloilo Dinagyang Foundation. “Dagyang sa Kapitolyo is open for everybody. We see to it that if they visit the Capitol, there are activities prepared for them,” she said in a statement. Aside from the trade fair, local bands and artists will be performing at the coffee shops and bars in Casa Real, the old capitol building that has been declared as a National Historical Site. Artworks by local artists are also on display at Grand Ballroom. The Dinagyang Festival main events are held every fourth Sunday of January.

TWG on water supply formed in Zamboanga City

January 20, 2020 | 8:36 pm

A TECHNICAL working group (TWG) with members from different sectors has been formed to help address water supply issues in Zamboanga City. Mayor Maria Isabelle Climaco-Salazar issued Executive Order 536-2020 dated Jan. 17 creating the TWG as “a strategy to provide adequate, safe and sustainable water supply” through the “convergence and collaboration of efforts among government institutions and private organizations.” One of the primary tasks of the group, which will be chaired by Vice Mayor Rommel S. Agan, is to review and make recommendations on Zamboanga City Water District’s (ZCWD) proposed rate hike. Ms. Salazar earlier said her position is that ZCWD should first improve service and explore other funding options before pursuing the proposed price increase. The EO cites that “The Zamboanga Peninsula Regional Development Plan 2017–2022 acknowledged the inadequate supply of water in the region particularly in urban areas due to increasing population and the impacts of climate change.” The TWG’s other tasks include supporting the information campaign on responsible water use, review plans and programs on new water supply sources, and the establishment of waste water treatment facilities. The TWG members will include city government officials, and leaders from the business, civil, and academic sectors.

Maritime security forces beefed up as Abu Sayyaf strikes again

January 20, 2020 | 8:35 pm

LESS THAN a week after the military reported the rescue of the last captive of the Abu Sayyaf Group, maritime security forces have again been reinforced as they pursue members of the kidnap-for-ransom gang who abducted five Indonesians fishermen over the weekend. The Philippine Coast Guard (PCG) said on Monday that personnel of its Tawi-Tawi station were deployed to help teams from the Philippine Army and Philippine Navy (PN) during an encounter with the Abu Sayyaf in Barangay Lakit, where four suspected Abu Sayyaf members were killed. “The PCG deployed floating assets and conducted joint naval blockade with the PN in monitoring possible escape routes of the ASG,” the PCG said. On Sunday, Philippine National Police-Maritime Group Director R’win S. Pagkalinawan reported that joint forces in pursuit operations in Sulare Island, Sulu killed one of the kidnappers and the speed boat used by the Abu Sayyaf, which has ties with the extremist Islamic State, “was recovered in an ongoing firefight.”

Another DMCI-Urban condominium project ordered vacated due to ‘major structural cracks’

January 20, 2020 | 8:35 pm

THE DAVAO City government has ordered the management of the Toledo Building of the Magallanes Residences to vacate all units due to “major structural cracks.” In an order dated January 17, Cirinia Grace L. Catubig, acting head of the Office of the City Building Official, said the order is based on the inspection conducted by their office, the Philippine Institute of Civil Engineers-Davao, and the Association of Structural Engineers of the Philippines-Davao. The inspectors, she said, “observed major structural cracks on the beams and slabs after the December 15, 2019 earthquake.” Ms. Catubig also ordered the building management “to submit the structural test results, computation/calculation and comprehensive structural plan for rectification/retrofitting methods on the beams and slabs, signed and sealed by your civil/structural engineer/s for your information and strict compliance,” said Ms. Catubig. The order cites Sections 214 and 215 of Presidential Decree No. 1096, the National Building Code of the Philippines, which provides that buildings that are considered dangerous must be either repaired, vacated, or demolished “depending upon the degree of danger to life, health or safety.” The letter indicates a copy furnished to Engr. Honoria C. Pena of the DMCI-Urban Property Developers Inc. with office address in Davao City.

OTHER BUILDINGS
The developer was the same one for Ecoland 4000, also located in Davao City, which collapsed after last year’s series of earthquakes in October. The city government has also ordered another Davao project of the developer, the Palmetto’s Place, to be vacated following the discovery of major structural cracks. BusinessWorld called the listed number of the developer, but the receiver said it is now the office of DMCI Homes. In an earlier statement, DMCI Homes denied any link with DMCI-Urban Property Developers. DMCI Homes has an ongoing condominium project in the city, the Verdon Parc. — Carmelito Q. Francisco

Nationwide round-up

January 20, 2020 | 8:34 pm

BI calls on foreigners traveling for Chinese New Year to process fees in advance

THE BUREAU of Immigration called on foreigners living in the country, particularly Chinese nationals, to process their re-entry fees before going to the airport to minimize congestion at the departure areas. Ports Operation Division Chief Grifton SP. Medina, in a statement on Monday, said the bureau is expecting a surge in exiting Chinese for the Jan. 25 Chinese New Year celebration. “It may result to heavy congestion of our airports, which could be avoided if they process and pay their fees before heading to the airport,” he said. Foreigners living in the Philippines with immigrant and non-immigrant visas have to pay exit and re-entry permit fees when they leave the country. A receipt of the re-entry permit fee has to be presented before they are allowed to depart. Mr. Medina said they can pay the re-entry fees in advance at the BI main office and almost 60 immigration offices nationwide. “Coming to the airport with the receipt at hand makes processing faster, allowing departing aliens to avoid the rush,” he said. The BI could not immediately provide data on the number of immigrant and non-immigrant Chinese living in the country as of this writing. — Vann Marlo M. Villegas

Nation at a Glance — (01/21/20)

January 20, 2020 | 8:32 pm

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Pag-IBIG Fund Calamity Loan ready for members affected by Taal unrest

January 20, 2020 | 4:01 pm

Top executives of Pag-IBIG Fund announced on Thursday (Jan.16) that they have allocated Calamity Loan funds for 2020 to help members affected by calamities, including the Taal Volcano eruption.

“Pag-IBIG Fund has allocated calamity loan funds this year, which will help our members living in Batangas and Cavite following the destructive effects of the ashfall and earthquakes caused by the eruption of Taal Volcano. This is in line with the directive of President Rodrigo Roa Duterte to provide Filipinos with responsive social benefits during trying times,” said Secretary Eduardo D. del Rosario, who heads the Department of Human Settlements and Urban Development (DHSUD) and the Pag-IBIG Fund Board of Trustees.

Under Pag-IBIG Fund’s Calamity Loan Program, eligible members may borrow up to 80% of their total Pag-IBIG Savings, which consist of their monthly contributions, their employer’s contributions, and accumulated dividends earned. Affected members have 90 days from the declaration of a state of calamity in their area to avail of the loan.

Considering the plight of the borrowers, Pag-IBIG Fund is offering the Calamity Loan at a rate of 5.95% per annum – the lowest rate available in the market. The loan is payable over a period of 24 months, with the first payment deferred. Initial payment is due on the third month after the loan is released.

“We never want calamities to happen but when they do, we are ready to respond to the needs of affected members. In 2019, we released P1.51 billion to help 89,570 members affected by various disasters. For 2020, we hope to help more members with the allocated funds,” del Rosario said.

“Pag-IBIG Fund branches in Batangas and Cavite will remain open even as some of our offices and employees weren’t spared from the eruption. We are actively helping our employees there and bringing in supplies and added manpower, as part of our commitment to bring aid to calamity-stricken members,” he added.

Filipino success still not totally based on hard work, says study

January 20, 2020 | 12:35 am

THE Philippines placed 61st among 82 nations in a report measuring social mobility, suggesting that Filipino success does not depend entirely on hard work and is likely to be affected by family and socioeconomic background.

The country placed fifth among the seven Southeast Asian nations in the first Global Social Mobility report by the World Economic Forum (WEF), which measured the health, education, technology, work, social protections and the efficiency of countries’ institutions.

“Creating societies where every person has the same opportunity to fulfil their potential in life irrespective of socioeconomic background would not only bring huge societal benefits in the form of reduced inequalities and healthier, more fulfilled lives, it would also boost economic growth by hundreds of billions of dollars a year,” WEF said in an emailed statement.

The WEF report said economies with greater social mobility provide more equal and meritocratic opportunities regardless of socioeconomic background, geographic location, gender and origin.

A country that increased its global social mobility score by 10 points would translate to additional gross domestic product growth of 4.41% by 2030, according to the report.

The top five socially mobile countries were Nordic countries Denmark, Norway, Finland, Sweden and Iceland. Among Southeast Asian nations, Singapore led at 20^th place, followed by Malaysia (43), Vietnam (50) and Thailand (55).

The Philippines came ahead of Indonesia (67) and Lao People’s Democratic Republic (72). The Philippines scored 51.7 while top-ranking country Denmark scored 85.2 points. Singapore scored 74.6 points.

Few economies have developed the conditions that create social mobility, WEF said, identifying low wages, lack of social protection, inadequate working conditions, and poor lifelong learning systems for workers and the unemployed as areas for improvement.

“As a consequence, inequality has become entrenched and is likely to worsen amidst an era of technological change and efforts towards a green transition,” it said.

“The social and economic consequences of inequality are profound and far-reaching: a growing sense of unfairness, precarity, perceived loss of identity and dignity, weakening social fabric, eroding trust in institutions, disenchantment with political processes, and an erosion of the social contract,” World Economic Forum Founder and Executive Chairman Klaus Schwab said.

“The response by business and government must include a concerted effort to create new pathways to socioeconomic mobility, ensuring everyone has fair opportunities for success.”

Social mobility also shifts according to industry and location, with media and entertainment professionals encountering more workplace inequality and rural and low-income workers facing limited professional connections.

To increase social mobility, WEF said a new financing model that rebalances the sources of taxation must be created.

“Improving tax progressivity on personal income, policies that address wealth accumulation and broadly rebalancing the sources of taxation can support the social mobility agenda,” according to the report.

WEF also said that access to education must be improved, promoting skills development throughout workers’ lives. WEF added that people must have social protection outside their jobs, as workers have more flexible work relationships.

Companies can contribute by improving meritocratic hiring, paying fair wages and participating in upskilling programs. — Jenina P. Ibañez

Gov’t seen to have missed GDP goal

January 20, 2020 | 12:32 am

By Lourdes O. Pilar
Researcher

THE PHILIPPINE ECONOMY likely grew in the fourth quarter at its fastest pace for 2019 on the back of robust household spending and a rebound in government spending, but not enough to hit its full-year goal, BusinessWorld’s latest poll of economists showed.

A poll of 20 economists conducted late last week yielded a gross domestic product (GDP) growth median estimate of 6.4% for the fourth quarter and 5.9% for full-year 2019.

The quarterly estimate was faster than the 5.6%, 5.5% and 6.2% in the first to third quarters of last year. However, the annual estimate was below 2018’s 6.2% actual pace and the downward-revised 6%-6.5% target set by the government for 2019.

If realized, the full-year estimate would break the economy’s seven-year streak of at least six-percent growth.

Official GDP growth data will be released on Thursday by the Philippine Statistics Authority (PSA), a day after the release of the PSA’s fourth-quarter data on farm production, which has historically contributed nearly a tenth to GDP.

GDP growth slowed to 5.8% in last year’s first three quarters from the 6.2% in the same period in 2018. Much of the drag was due to the disappointing growth rates of 5.6% and 5.5% in the first two quarters of last year with analysts blaming the nearly four-month delay in the approval of the 2019 national budget which left new projects unfunded and stymied government spending.

To recall, the government operated on a reenacted 2018 budget from January to April 15, when President Rodrigo R. Duterte signed last year’s national budget into law but vetoed P95.3 billion in funds that were not in sync with state priorities, slashing the total to P3.662 trillion.

Socioeconomic Planning Secretary Ernesto M. Pernia gave a 6.5%-7% growth estimate for the fourth quarter back in November, citing faster household consumption from the holidays and the boost from easing inflation.

Moreover, the poll’s 5.9% median estimate for 2019 compares with the 5.7% forecast given by the International Monetary Fund, the separate forecasts of 5.8% by the World Bank and Moody’s Investors Service, and six percent by the Asian Development Bank, Fitch Ratings, and the ASEAN+3 Macroeconomic Research Office.

Economists pointed to faster household spending in 2019 brought by the easing of inflation last year following the almost runaway inflation in 2018.

“As expected, household final consumption, powered by remittances growth, higher employment and better incomes, has mainly fueled [fourth-quarter 2019] GDP growth,” said UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion in an e-mail, who pegged fourth-quarter GDP growth at 6.4% and the full-year rate at 5.9%.

IHS Markit Asia Pacific Chief Economist Rajiv Biswas likewise pointed to household consumption, which was supported by “firm growth in inward remittances from workers abroad as well as continued expansion in government infrastructure spending.”

“Growth in the second half of 2019 has been boosted by a rebound in fiscal spending, following the delayed budget and spending freeze ahead of the 2019 midterm elections,” he said.

Mr. Biswas expects a year-on-year GDP growth rate of 6.3% in the fourth quarter and six percent for full-year 2018.

For Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort, the economy likely grew by 6.6%-6.7% in the fourth quarter and six percent last year, saying that consumer spending “could have also been supported… by the strongest employment data since revised records started 20 to 30 years ago” along with sustained growth in remittances, foreign investment inflows, as well as revenues from Philippine Offshore Gaming Operations, business process outsourcing firms, and tourism.

On the other hand, a number of economists in the survey pointed to capital formation’s weakness last year.

“Perhaps the biggest drag on the economy for the year [was] the negative performance of capital formation in [the second and third quarters] as the BSP’s (Bangko Sentral ng Pilipinas) 2018 rate hike salvo [weighed] on bank lending,” said ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa, who expected GDP growth to finish strong at 6.6% in the fourth quarter and six percent in 2019.

“With BSP quickly dialing back partially this tightening with 75 basis points worth of rate cuts in 2019, we can hope for a recovery in investment activity to close out 2019,” Mr. Mapa said.

Security Bank Corp. Chief Economist Robert Dan J. Roces forecast 6.6% and 6% growth in the fourth quarter and full year, respectively. “Capital formation meltdown was what really hurt us in the past quarters, plus delayed spending due to a delayed budget,” he said.

For University of the Philippines Economist Jefferson A. Arapoc, GDP likely grew 6.1% in the fourth quarter and 5.9% last year.

“Although government spending has started to pick up [in the fourth quarter], key sectors of the economy are continuously experiencing challenges,” he said.

Mr. Arapoc cited the PSA’s Monthly Integrated Survey of Selected Industries where data showed factory output, as measured by the volume of production index, declined for twelve straight months and posted an average decline of 7.6% in January-November 2019.

“[T]he agricultural sector remains sluggish due to several problems, which include the outbreak of the African Swine Fever and the havoc brought by typhoons Kammuri/Tisoy that affected seven regions in the country,” Mr. Arapoc added.

Moreover, trade is seen to be a net negative contributor to growth for 2019.

“Economic growth was largely held back by external headwinds, particularly the lingering impact of the US-China trade tussle despite the ‘phase one’ partial trade settlement between the world’s top two largest economies. Regional trade was majorly affected impacting supply chains within the Association of Southeast Asian Nations region,” UnionBank’s Mr. Asuncion said.

As of end-November, merchandise exports and imports slipped by 0.02% and 4.6%, PSA data showed, below the government’s 2019 growth targets of 1% and 2%, respectively.

Cash remittances, which fuels household spending that contributes nearly 70% to GDP, reached $27.231 billion in the 11 months to November, increasing by 4.4% compared to $26.094-billion haul in the same period in 2018.

Meanwhile, household spending went up 5.8% during last year’s first three quarters, faster than the 5.7% uptick in 2018.

The government spent P3.303 trillion as of end-November last year, 6.73% more than the P3.095 trillion in the same 11 months in 2018.

Furthermore, infrastructure and capital outlays slipped 5.5% to P628.5 billion in January to October last year from P665.1 billion in the same comparable 10 months in 2018.

Q4 GDP growth likely at 6.6-6.7% — Pernia

January 20, 2020 | 12:31 am

By Beatrice M. Laforga
Reporter

THE last three months of 2019 likely saw the economy grow at its fastest pace during the year, amid higher infrastructure spending, private construction and public consumption, Socioeconomic Planning Secretary Ernesto M. Pernia said.

Mr. Pernia told BusinessWorld that the country’s gross domestic product (GDP) might have expanded around “6.6-6.7%” in the fourth quarter.

On Thursday, the Philippine Statistics Authority will release the official data on the performance of the economy in the fourth quarter last year, and its full-year average.

If realized, a quarterly growth rate of at least 6.6% will be the fastest in more than two years, or since the seven percent growth recorded in the third quarter of 2017.

A 6.6% expansion will also outpace the 6.3% recorded in the last three months of 2018 and match the performance in the first quarter of the same year.

The economy grew by 5.6%, 5.5% and 6.2% in the first to third quarters last year, bringing the average to 5.8% during the January-September period.

In a mobile phone message on Friday, Mr. Pernia said “acceleration in government spending for infrastructure, private sector construction, stronger consumption spending given benign inflation and consumer optimism, SEA Games, PRRD’s (President Rodrigo R. Duterte) high approval and trust ratings” all contributed to the economic growth in the last quarter of the year.

Asked if the full-year average reached the narrowed 6-6.5% official target for 2019, he said: “yes!”

Public consumption should have benefited from easing inflation during the last three months, Mr. Pernia said, even as December’s print picked up to 2.5% in December from 1.3% in November and the 0.8% rate recorded in October.

For the full year, inflation rate for 2019 averaged at 2.5%, settling within the 2-4% official target range.

While infrastructure expenditure for November and December have yet to be released, latest available data showed that spending on infrastructure and other capital outlays was down by 12.9% year on year to P82.2 billion in October, reversing the 53.9% spike in the previous month.

However, overall state spending grew 22.36% to P365.6 billion in November from P298.8 billion a year ago.

Meanwhile, Mr. Pernia said the 11-day hosting of the 30^th Southeast Asian (SEA) Games in early December likewise helped boost economic growth.

The economic team last December narrowed last year’s official growth target to 6-6.5% from 6-7%, abandoning the 7% growth goal, as the delayed passage of the 2019 budget slowed the economy during the first half.

For this year, the GDP growth target was maintained at 6.5-7.5%, while those for 2021 and 2022 was scaled down to the same target range from the previous 7-8% goal.

Mr. Pernia earlier said that they abandoned the 8% growth target over the medium term, amid slowing global economy due to the prolonged US-China trade war. This will likely hurt the country’s exports and dampen foreign investments in emerging economies like the Philippines.

Analysts’ Q4, full-year 2019 growth estimates

January 20, 2020 | 12:30 am

THE PHILIPPINE ECONOMY likely grew in the fourth quarter at its fastest pace for 2019 on the back of robust household spending and a rebound in government spending, but not enough to hit its full-year goal, BusinessWorld’s latest poll of economists showed. Read the full story.

PEZA expects higher investments if ‘investor-friendly’ CITIRA is passed

January 20, 2020 | 12:30 am

THE Philippine Economic Zone Authority (PEZA) is targeting to grow investments by 5-10% this year, amid lingering investor concern over the government’s plan to rationalize incentives.

“There are many pending applications for expansions of existing locators and new investments that are waiting for the kind of CITIRA (Corporate Income Tax and Incentives Rationalization Act) that will be passed,” PEZA Director General Charito B. Plaza told reporters in a mobile message on Saturday.

“We’re expecting a 5-10% target this year and would be higher if an investor-friendly CITIRA is passed.”

Ms. Plaza said that big-ticket investments for 2020 are in the works, including from Panhua Integrated Steel Company and North Star Valley Food Company of Canada.

In a press briefing on Friday, the PEZA chief said approved investment pledges for the past year declined as investors are taking a “wait-and-see” approach on the details and passage of the CITIRA.

The proposed CITIRA bill calls for the lowering of corporate income tax to 20% from 30% over 10 years, while removing redundant fiscal incentives.

PEZA is pushing for the implementation of a grandfather rule that retains the perks existing locators enjoy, and a longer transition period of 10-15 years.

The House of Representatives passed the CITIRA bill and transmitted it to the Senate last September. The measure is now pending at the Senate.

Finance Secretary Carlos G. Dominguez III expects the law to be passed by March 2020.

LOWER INVESTMENTS
Data provided by PEZA showed that approved investments in 2019 dropped 16.19% to P117.54 billion, from P140.24 billion in 2018. The 2018 figure represented a 41% decline in investment pledges from the previous year.

The investments refer to projects at PEZA’s economic zones throughout the country.

Approved investments in manufacturing slipped by 5.01% to P30.35 billion, weighed down by a decline in shipbuilding and chemicals investments.

On the other hand, investments in automotive and auto parts manufacturing increased significantly to P2.36 billion last year, almost nine times the P266 million in investments in 2018. Aerospace parts investments doubled to P2.17 billion.

Investments in the transportation and storage sector almost tripled to P429.93 million, while those in electricity, gas, steam, and air-conditioning supply doubled to P2.18 billion.

However, approved investments declined among high-value sectors, including a 15.14% drop to P66.48 billion in real estate activities and a 17.93% fall to P15.51 billion in administrative and support services investments.

PEZA also saw investments decline in priority sectors such as construction (12.51%) and information technology and business process management (14.53%). — Jenina P. Ibañez