Climate change economic damage may hit 7.6% of 2030 GDP

Economic damage to the Philippines could reach up to 7.6 percent of gross domestic product by 2030 and by 13.6 percent of GDP by 2040 if no action is taken to address climate change, according to the World Bank.The World Bank used historical typhoon information in coming up with the estimates. Citing the World Risk Index for this year, Ndiame Diop— World Bank country director for Brunei, Malaysia, the Philippines and Thailand—said the Philippines ranks first among countries most affected by extreme weather events globally. Based on the World Bank’s report, he said climate change would continue and accelerate, with temperatures in the country seen to continue to increase by about one to two degrees Celcius by the end of the 21st century, rainfall patterns to change and intensify, and extreme events expected to become stronger and more frequent.

Digitalization key in growing MSMEs – Concepcion

Go Negosyo founder Joey Concepcion sees digitalization as an important key in scaling up micro, small and medium enterprises (MSMEs) in the country, emphasizing its role in raising their competitiveness. As part of its push to encourage digitalization among MSMEs, Go Negosyo recently conducted the Digital Sign Up Now 2022, in partnership with the US Embassy in the Philippines, which brought together two growth drivers – MSMEs and digital technology – which together are seen to accelerate inclusive growth in the country. Digital Sign Up Now 2022 was organized to help MSMEs learn from the experiences and best practices of other entrepreneurs who have successfully transformed their businesses using digital platforms. It also introduced MSMEs to possible collaborations with the different digital platforms now in the country, and shared lessons from professionals specializing in creative services, brand imaging, fintech as well as cybersecurity.

August infrastructure spending inches up

Infrastructure spending rose by an annual 4% in August as the Marcos administration ramped up the implementation of projects, the Budget department said. The Department of Budget and Management (DBM) in a report said expenditures for infrastructure and other capital outlays increased to P73.7 billion in August, from P70.9 billion a year ago. However, the August figure was 4.4% lower than the P77 billion spent in July.The DBM said the growth in expenditures was partially offset by one-off payments in August 2021 for various railway projects of the Department of Transportation (DoTr), including the Metro Manila Subway project, the Malolos-Clark railway project and the Metro Rail Transit Line 3 rehabilitation project. In the eight months to August, infrastructure spending stood at P628.6 billion, up by 10.2% from the P570.4 billion a year ago. The debt-to-GDP ratio eased to 62.1% at the end of June, lower than 63.5% as of end-March. The government is targeting to bring down the ratio to 61.8% by end-2022.

DOH stand to pilot test optional face mask indoors overruled, Vergeire says

The Department of Health initially suggested that the optional use of face mask indoors be pilot tested to properly assess if the country’s health system is ready for it but that stand was overruled. Tourism Secretary Christina Garcia Frasco said in a Tuesday briefing that President Ferdinand “Bongbong” Marcos Jr. is set to issue an executive order (EO) making indoor wearing of mask voluntary. The said move was “agreed” upon during a Cabinet meeting the same day, she added. While the position of the DOH was overruled, Vergeire—DOH officer-in-charge— said she respects the decision made by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) as a collegial body. Vergeire added they still encourage the vulnerable population, which includes the elderly, people with comorbidities, and the unvaccinated, to wear face mask. She also clarified that optional masking indoors has yet to be implemented, pending the issuance of the EO that is expected in the coming days.

PH budget deficit narrows to ₱179.8B in September

The national government's budget deficit slightly contracted in September as revenue growth outpaced spending, data from the Bureau of the Treasury (BTr) showed Wednesday. In a statement, it said the budget deficit narrowed to ₱179.8 billion, lower than the ₱180.9 billion recorded in the same period in 2021. A higher budget deficit will force the government to borrow more funds to fill the gap. The figure pushed the budget deficit for the January-September period to ₱1 trillion, shrinking by ₱126.3 billion from a year ago. The Treasury attributed September's budget deficit to the stronger revenue growth reaching 24.79%, against expenditures' 13.63%. Revenue collection last month grew to ₱288.8 billion, with the Bureau of Internal Revenue collecting ₱173.6 billion. The Bureau of Customs, meanwhile, collected ₱79.3 billion. The agency itself booked ₱7.3 billion in revenue, a 30.29% increase versus the same month last year. Total collections from other offices also jumped to ₱28.2 billion. On the other hand, expenses in September climbed to ₱468.6 billion compared to the ₱412.4 billion registered a year prior.

AIIB to dedicate 50% of loans to climate change projects

The Asian Infrastructure Investment Bank (AIIB) said it will reserve at least 50% of its loan portfolio to climate change mitigation projects by 2025. According to  AIIB President Jin Liqun, they will be focusing on the 50% and upwards for the financing of climate change adaptation and mitigation by 2025, and that many countries are vulnerable, and experiencing acute macroeconomic distress. Mr. Jin said the bank is working to accelerate the financing of infrastructure projects in the wake of the pandemic.

Sustainability stories an advantage to penetrate Swiss, Europe markets

If you want your products to gain instant market acceptance in the European market, highlight your sustainability story. This was the advice of Kent Marjun Primor, commercial attaché of the Embassy of Switzerland, to existing and would-be exporters to Europe, during a recent luncheon meeting hosted by the European Chamber of Commerce in the Philippines (ECCP). Primor told participants that European businesses are keen on doing business with companies that put a premium on responsible and sustainable trade.

'French companies eyeing Philippines after liberalizing investment climate'

French companies are bullish on investing in the Philippines as the national government eased restrictions on businesses, with some companies eyeing a foothold in building infrastructure.Philippine Matiere, head of the Movement of the Enterprises of France delegation, said the move to liberalize the business climate in the country could prove beneficial for French companies. MEDEF is the largest employer federation in France, with a membership of over 750,000 firms, mostly small and medium enterprises. Approved investments of France to the country retreated in 2020 according to government data. As it is, France ranks third as the country’s top trading partner in the European Union and places 17th in the list of Philippines’ trading partners. The Philippines took bold leaps in easing the conduct with which business is conducted around the country. The Duterte administration signed into law the Public Services Act, which liberalized foreign ownership for some economic sectors such as telecommunications, airlines, and railways. This optimism has been echoed by Michele Boccoz, the Ambassador of France to the Philippines. She said in the same briefing that there are 25 French companies visiting the country currently. While there are no firm investment pledges for next year, the French embassy noted there are over 120 subsidiaries of French companies in the Philippines

World Bank projects 11% energy price decline in 2023

The World Bank on Wednesday said it expects energy prices to decline by 11% in 2023 after this year’s 60% surge following Russia’s invasion of Ukraine, although slower global growth and coronavirus disease 2019 (COVID-19) restrictions in China could lead to a deeper fall. The bank in its latest Commodity Markets Outlook projected a Brent crude average price of $92 a barrel in 2023, easing to $80 in 2024 but well above the five-year average of $60. It said Russia’s oil exports could drop by as much as 2 million barrels per day due to a European Union embargo on Russian oil and gas products, coupled with restrictions on insurance and shipping, that are to take effect on Dec. 5. The World Bank said the stronger dollar — and the shrinking value of the currencies of most developing economies — had driven up food and fuel prices that could aggravate the food insecurity already affecting 200 million people worldwide. Currency depreciation meant that almost 60% of oil-importing emerging markets and developing economies saw an increase in domestic currency oil prices from Russia’s invasion of Ukraine, which began on Feb. 24.  Nearly 90% of these economies also saw a larger increase in wheat prices in local currency terms. While energy prices were easing, they would still be 75% above their average over the past five years, the bank said. Both natural gas and coal prices are projected to decline in 2023 from record highs in 2022, but Australian coal and US natural-gas prices are still expected to be double their average over the last five years by 2024. European natural gas prices could be nearly four times higher. 

Top business groups support POGO closure

A recent spike in crimes involving POGOs have sparked a debate on whether the sector’s economic benefits outweigh the social costs.Also, the FEF, MBC and MAP noted the lack of effective regulation of POGOs in the previous years, which resulted in taxation and monitoring issues with the Philippine Amusement and Gaming Corp. (PAGCOR). PAGCOR issues the licenses to offshore gaming operators. The business groups noted the “taint of money laundering” erodes confidence in the banking system, and “puts legitimate financial flows, including from overseas Filipino workers (OFWs), at risk from sanctions of international oversight bodies.” The biggest toll would be on income from housing space rentals at P25.17 billion, followed by office space rentals at P16.63 billion. Negative impact would also be felt in tax collections, PAGCOR revenues, personal consumption of POGO workers, transportation, and insurance. Earlier this month, the Association of Service Providers and POGOs (ASPAP) warned the closure of POGOs will lead to the loss of jobs of around 23,000 Filipinos.