For this year and 2025, Moody’s Ratings projects the Philippines will end up as the 2nd fastest growing economy in Southeast Asia, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE PHILIPPINES is projected to be the second-fastest growing economy in Southeast Asia this year and in 2025 as domestic demand is expected to remain resilient, according to Moody’s Ratings.
“We have kept unchanged our 2024 and 2025 forecasts for the Philippines and Malaysia and also expect sequentially higher growth in both countries. Domestic demand remains the primary economic growth engine for the Philippines,” it said in a report.
Moody’s Ratings kept its forecast for gross domestic product (GDP) growth for the Philippines at 5.9% this year and 6% in 2025.
However, these projections fall short of the government’s growth targets of 6.5-7.5% for this year and 6.5-8% for next year.
At 5.9%, the Philippines has the second-fastest projected growth in Southeast Asia for 2024, after Vietnam (6%). It is ahead of Indonesia (5%), Malaysia (4.5%) and Thailand (2.8%).
For 2025, the Philippines is again expected to post the second-fastest growth behind Vietnam (6.5%) but ahead of Indonesia (5%), Malaysia (4.8%), and Thailand (3%).
Moody’s Ratings said that growth in domestic demand-driven countries like the Philippines is “increasing more than we previously expected.”
The economy grew by a weaker-than-expected 5.6% in 2023, slower than the 7.6% expansion in 2022 and short of the 6-7% government goal.
Household consumption typically accounts for three-fourths of the Philippine economy. Last year, household spending expanded by 5.6%, much slower than 8.3% in 2022.
Meanwhile, Moody’s Ratings sees inflation averaging 3.8% this year, higher than the Bangko Sentral ng Pilipinas’ (BSP) 3.6% full-year forecast but within the 2-4% target.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that strong household consumption alone can help the Philippine economy grow stronger than what Moody’s Ratings projected for 2024 and 2025?
Recently the World Bank (WB) revealed its forecast of stronger economic growth for the Philippines in the year 2025 although still below the projections of the government, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld report. Some parts in boldface…
THE WORLD BANK (WB) maintained its economic growth forecast for the Philippines this year but raised its 2025 growth projection, amid expectations of higher consumer spending and foreign investments.
In its latest East Asia and Pacific (EAP) Economic Update, the World Bank said it expects Philippine gross domestic product (GDP) to grow by 5.8% this year, the fastest in Southeast Asia along with Cambodia.
The Philippines and Cambodia are seen to expand faster than Vietnam (5.5%), Indonesia (4.9%), Malaysia (4.3%), Lao People’s Democratic Republic (4.0%), Timor-Leste (3.6%), Thailand (2.8%) and Myanmar (1.3%).
For 2025, the World Bank raised its GDP forecast for the Philippines to 5.9% from 5.8%.
However, the World Bank’s growth forecasts for the Philippines are lower than the government’s target of 6.5-7.5% for 2024 and 6.5-8% for 2025 to 2028.
“What has sustained growth in the Philippines, like much of the region, has been consumption and the recovery in services,” WB East Asia and Pacific Chief Economist Aaditya Mattoo said at a virtual briefing on Monday.
He noted foreign investment flows into the Philippines might increase after the government implemented significant reforms such as Republic Act No. 11659 or the Public Service Act, which allows full foreign ownership in key sectors such as telecommunications and airlines.
“(The reforms) should begin to pay off in terms of greater foreign investment, which though in the short run… the flows have been less strong than we would have expected,” Mr. Mattoo said.
Climate and geopolitical shocks, as well as elevated inflation and high interest rates are risks to the growth outlook.
“If there is a resurgence in inflation, for example in the United States, which might well see interest rates even higher for longer, that would certainly affect growth throughout the region as we have estimated,” he said.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the Philippine economy can grow stronger than the forecast of the World Bank for 2025?
Financial firm Fitch Ratings expects the economy of the Philippines to grow the fastest among Southeast Asian economies this year with a growth rate of 6.4%, according to a news article by BusinessWorld.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE PHILIPPINES is expected to be the fastest-growing economy in Southeast Asia this year, according to Fitch Ratings.
Data from Fitch Ratings’ Asia-Pacific Sovereigns Credit Outlook for February showed that the Philippines’ gross domestic product (GDP) is projected to expand by 6.4% this year.
This will be the fastest growth in Southeast Asia, ahead of Vietnam (6.3%), Indonesia (5%), Malaysia (4.2%), Thailand (3.8%) and Singapore (2.3%).
Krisjanis Krustins, Fitch Ratings’ primary sovereign analyst for the Philippines, said Philippine GDP growth would likely remain above 6% in the next few years.
“We forecast real GDP growth of above 6% over the medium term, considerably stronger than the ‘BBB’ median of 3%, supported by large investments in infrastructure and reforms to foster trade and investment, including through public-private partnerships (PPPs),” he said in an earlier commentary.
Fitch Ratings’ forecast is slightly below the government’s 6.5-7.5% target this year.
The Philippine economy grew by 5.6% in 2023, slower than 7.6% in 2022 and fell short of the government’s 6-7% full-year target.
Economic managers have said they might revise growth assumptions and targets to be more “realistic” and account for global economic conditions.
The Philippine Statistics Authority (PSA) is set to release first-quarter GDP data on May 9.
For 2025, Fitch expects Philippine economic output to expand by 6.5%. This also makes it the fastest-growing economy in the region next year, alongside Vietnam. It will be ahead of Indonesia (5.2%), Malaysia (4.5%), Thailand (3.4%) and Singapore (3%).
In November, Fitch Ratings affirmed the Philippines’ “BBB” investment grade rating and kept its “stable” outlook.
A “BBB” rating indicates low default risk and reflects the economy’s adequate capacity to pay debt. A “stable” outlook on the rating also means it is likely to be maintained over the next 18-24 months.
Let me end this piece by asking you readers: What is your reaction about this recent development? Do you think Fitch’s predictions for the Philippine economy will turn out true by the end of 2024?
A research firm recently raised its forecast of the Philippine economy for 2024 predicting a gross domestic product (GDP) growth rate of 5.7% this year, according to a news report by BusinessWorld.
To put things in perspective, posted below is an excerpt from the BusinessWorld report. Some parts in boldface…
PHILIPPINE gross domestic product (GDP) may grow by 5.7% this year following the economy’s faster-than-expected expansion in the fourth quarter of 2023, UBS Global Research and Evidence Lab said.
The research firm raised its 2024 Philippine GDP growth forecast from 5.3% previously, Grace Lim, an economist from UBS, said in a note. It also hiked its 2025 projection to 6% from 5.8%.
“This largely reflects carryover effects from the fourth quarter of 2023, rather than a strong bounce in sequential growth momentum through 2024,” Ms. Lim said.
Both forecasts are below the government’s growth targets of 6.5-7.5% for this year and 6.5-8% for 2025.
The Philippine economy grew by 5.6% in the fourth quarter, bringing full-year growth to 5.6% in 2023. This was slower than the 7.6% expansion in 2022 and below the government’s 6-7% goal.
At 5.7%, economic growth this year would be faster than the 2023 pace but is still slower than the pre-pandemic average of 6.6%, Ms. Lim noted.
“On the bright side, we highlight that inflation has been trending down nicely, surprising consensus on the downside for three months in a row,” she said. “Should downside risks to inflation materialize, consumption could surprise on the upside.”
Inflation eased to 2.8% in January from 3.9% in December and 8.7% in the same month a year ago. This was the slowest print since October 2020 and marked the second straight month that inflation settled within the 2-4% target band.
Ms. Lim noted that consumer spending remained robust last year despite inflationary pressures and amid resilient labor market conditions.
In 2023, household spending grew by 5.6%, slower than 8.3% in 2022. Household consumption typically accounts for three-fourths of GDP.
Meanwhile, the unemployment rate dropped to a record low of 4.3% from the 5.4% recorded in 2022.
Let me end this piece by asking you readers: What is your reaction to this recent report? Do you think the Philippine economy will grow below the national government’s targets for 2024? Do you think UBS’ forecast of 5.7% growth will turn out correct by the end of this year?
As some of you are already aware, I fully stand with Israel which is directly connected with my uncompromising faith in the Lord. I keep on praying to Him for Israel to overwhelm its enemies, rescue the hostages and recover from the effects of the October 7, 2023 terrorist attacks committed by the Palestinian terrorist group Hamas. I can assure all of you that nobody from the evil Islamo-Leftist mob, nobody from the pro-Palestine zealots and nobody from any evil society would stop me from supporting and loving Israel.
Now, on with the news.
IDE Technologies Group, a water treatment company based in Israel, is looking for expansion opportunities in the Philippines, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
ISRAEL-BASED water treatment company IDE Technologies Group is eyeing expansion opportunities in the Philippines, the company’s chief executive officer (CEO) said on Wednesday.
“We’re focusing on a specific project, but that project is kind of a very interesting opening for us because it will involve creating a local entity of IDE with mostly local people as employees,” IDE CEO Alon Tavor said during a media briefing.
“We have teamed up with several local partners to come up with very interesting projects,” he added.
IDE is a water company that specializes in the development, engineering, construction, and operation of enhanced desalination and industrial water treatment plants.
Desalination is the process of removing salt from seawater to make it potable, safe for human consumption.
Founded in 1965, it has headquarters in Israel, with offices in the USA, China, India, Chile, and Australia, facilitating client partnerships across the globe. The company has over 400 plants spanning 40 countries.
“We don’t only sell projects. A lot of the time, we own the plant, we operate it, and we simply sell water as a solution,” Mr. Tavor said.
Investing in projects typically starts at “a few hundred thousand dollars for a very small project and can go up to hundreds of millions of dollars for large projects,” he also said.
“We see the fact that the Philippines realizes the level of water issues that need to be managed as an interesting opportunity for us, and therefore we’re here.”
Israeli Ambassador Ilan Fluss said they are looking into bringing more companies to the Philippines to share their best practices and technologies.
IDE’s focus on the Philippines is indeed a blessing for the nation as water is truly essential for all Filipinos. Experiencing water supply shortages is a constant problem nationwide and to this day, the Philippines still has yet to achieve breakthrough to not only improve access to water but also increase the water supply. IDE’s expertise on desalination could be crucial in helping us Filipinos solve our water problems which will be helpful in building up the national economy.
We should also be thankful to the Lord that even as Israel remains busy fighting the terrorists not only in Gaza but also across the border with Lebanon (Hezbollah), the Jewish state is working to bring more Israeli companies into the Philippines. That being said, Israel-Philippines ties are still essential.
To my fellow Filipinos reading this, I encourage you to accept the truth that Israel is the land God designated specifically for the Jewish people (read Genesis 35:10-12) and His command must be followed without hesitation. If you want to be blessed further by the Lord, do so by loving and blessing the Jewish people (Genesis 12:1-3). I did my part when I was in Israel. Also, let me remind you all that the ties between the Jews and Christians are truly biblical!
We live in a very divided world. Around the world, Leftist forces have been supporting evil forces like the current regime of Iran which is known for supplying and arming the Palestinian terrorists and other terrorist groups around the Middle East. Leftist forces have been supporting the Palestinian Authority and other enemies of Israel. The Leftists and terrorists always go together and their anti-Semitism is clearly obvious. Hamas is purely evil and they are being protected by not only their fellow terrorists but also by mainstream news media outlets who are linked with Leftist forces and people who hate Israel and the Jewish people. Beware of the evil union of the Islamo-Left which is wicked deep within.
With all that said, I encourage you all to pray to the Lord God in support of Israel and believe that He will guide the Israeli forces to another victory which means finishing off Hamas, crushing Hezbollah and force Iran and its terror proxies to give up. Read Joshua 11:1-20 in the Holy Bible for relevance and truth.
As far as the chief economists of the Rizal Commercial Banking Corp. (RCBC) and China Banking Corp. are concerned, the recovery of Philippine tourism is still lacking and a lot more needs to be done which includes relying on tourists from China, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE RECOVERY of the tourism market lags the rest of the region due to infrastructure constraints and the slow rebound of visitor arrivals from China, analysts said.
Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the Philippines’ tourism performance was lagging even before the pandemic.
“There has been a lot of catching up since the pandemic and also even before the pandemic with other ASEAN or Asian neighboring countries,” Mr. Ricafort said in a Viber message.
“This is largely due to infrastructure constraints that limit the capacity of airports and accommodation and MICE (meetings, incentives, conferences, & exhibitions) facilities to cater to a much larger number of foreign tourists,” he added.
Mr. Ricafort said upgrades are needed to airports, particularly the Ninoy Aquino International Airport (NAIA), which will share future traffic to and from the capital with the Bulacan and Sangley airports.
“There is a need as well as for integrated tour packages that will be cheaper and more convenient to attract more foreign tourists,” he said.
“There is also a need for more mass transport systems such as railways that are integrated into major airports to make it more convenient for local and foreign tourists to travel,” he added.
China Banking Corp. Chief Economist Domini S. Velasquez said slow growth can be attributed to geographical constraints and absence of Chinese tourists.
“The Philippines lags behind its other ASEAN neighbors in terms of tourist arrivals, which can be attributed partly to geographical constraints, as the country cannot be accessed by land,” Ms. Velasquez said in a Viber message.
“However, another factor contributing to the below-target numbers, especially during the pandemic, is the absence of Chinese tourists,” she added.
Before the pandemic, China was the country’s second top source of international arrivals after South Korea. However, China only ranked fifth last year.
South Korea remained the top source of international visitors accounting for 26.41%, followed by the US (16.57%), Japan (5.61%), Australia (4.89%), and China (4.84 %).
“The sluggish growth and high unemployment in China have hindered the phenomenon known as “revenge travel,” wherein Chinese tourists typically exhibit strong travel demand. As a result, the expected influx of Chinese tourists has been limited,” Ms. Velasquez said.
Mr. Ricafort said the Philippines has strong potential in further growing the tourism economy with much room to improve in many elements of the product offering.
“The tourism business is low-hanging fruit that can generate more business, employment, and other economic activities as a major source of growth or a bright spot for the economy,” he said.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the analysts’ findings as to why Philippine tourism is still lacking and what should be done to improve it? Do you think the Department of Tourism (DOT) should focus more on attracting tourists from other nations instead of depending so much on China? What do you think are the five biggest problems of Philippine tourism right now? Do you think the DOT should be more active in promoting local film festivals, fashion shows, sports events and food tours to foreigners?
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE BUREAU of Internal Revenue (BIR) on Monday clarified that small online sellers are exempted from the payment of the creditable withholding tax imposed on online marketplaces but would still need to register their business.
“Small-scale online sellers are exempted from withholding tax. The BIR is sympathetic to small businesses in its approach to taxing online sellers/merchants,” BIR Commissioner Romeo D. Lumagui, Jr. said in a statement.
BIR Revenue Regulations No. 16-2023, which took effect on Jan. 11, imposes a withholding tax of 1% on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or mer-chants for the goods and services paid or sold through their platforms or facilities.
The BIR said that the withholding tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.
“For those who are above the threshold of P500,000 annual gross remittance, it is only fair that they will be subjected to withholding tax. We have to be fair to the retail sector and brick and mortar stores who are regularly pay-ing their taxes,” Mr. Lumagui said.
The tax covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.
E-marketplace operators and digital financial service providers were given a 90-day transitory period to comply with the order.
The BIR in a separate circular said all online sellers and merchants need to register with the BIR and submit documentary requirements, even if their annual gross remittance is below the P500,000 threshold.
The circular also noted that sellers and merchants are not allowed to receive payments through a personal account and instead must use a BIR-registered account.
“If you have a business, you have to register and pay your taxes. It doesn’t matter if it’s an actual store or an online store. It is your responsibility to pay taxes like everyone else,” Mr. Lumagui said.
In a press conference last week, Mr. Lumagui told reporters that the measure will help the BIR better gauge the impact of the digital economy.
“We gave the online platforms a grace period of 90 days. With that, we are still checking on which are already capable of complying… During our discussions with online platforms, they’re cooperative. With this development, we’re hoping to get the entire picture on online transactions,” he said.
In 2022, the digital economy contributed P2.08 trillion or equivalent to 9.4% of the gross domestic product.
A report by Google, Temasek Holdings and Bain & Company showed that the Philippines’ digital economy is projected to reach as high as $150 billion by 2030.
The BIR also earlier clarified that the withholding tax is not a “new” tax as it is just a measure that will allow for an advance payment of income tax.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the newest clarification made by the BIR will end the confusion or concerns regarding the 1% withholding tax? If you are aspiring to sell items online, does the 1% withholding tax discourage you?
Recently, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) expressed expectation that the economy of the Philippines will achieve 6% growth for the year 2024, according to a BusinessWorld news article.
To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…
THE PHILIPPINES’ gross domestic product (GDP) is projected to grow faster this year as easing inflation will help boost “revenge spending,” analysts said.
First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said they expect GDP growth at 6% this year, still below the government’s 6.5-7.6% target.
“I think they will not be able to make the 6.5% unless foreign investments come in. And so far, if we look at 2023, foreign investments were actually down significantly… but we have to see how things pan out in the coming months,” Victor A. Abola, an economist at UA&P, said at a briefing in Makati City on Thursday.
FMIC and UA&P projected full-year GDP to average 5.5% in 2023, still below the government’s 6-7%. The economy grew by 5.5% in the nine-month period.
The Philippine Statistics Authority (PSA) is set to release full-year 2023 GDP data on Jan. 31.
“Growth will accelerate from 5.5% (in 2023) to 6% (in 2024), driven by the services sector, particularly, transport, accommodations, and food services, which are experiencing revenge spending,” Mr. Abola said.
Filipino consumers are expected to continue to splurge this year, which will help drive growth.
“We’re just seeing the beginning of (revenge spending) because high inflation has sort of toned down that expansion. So, I think that we’ll see faster GDP growth in 2024,” Mr. Abola said.
Improved employment will also boost the economy this year, Mr. Abola said, citing the record low jobless rate seen in November.
The country’s unemployment rate fell to 3.6% in November from 4.2% in the previous month and a year ago, marking an 18-year low. In November, the number of employed people also rose to 49.64 million from 47.8 million in October and 49.7 million in November 2022.
FMIC Executive Vice-President Daniel D. Camacho said the BSP will likely keep rates steady for the first half.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think internal and external economic factors will somehow become favorable for the Philippines and allow better economic growth along the way? Do you think there is too much attention paid on so-called revenge spending?
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE WORLD BANK (WB) expects the Philippines to be among the fastest-growing economies in Southeast Asia this year.
In its latest Global Economic Prospects, the multilateral lender projected Philippine gross domestic product (GDP) to expand by 5.8% in 2024, same as its forecast in December.
The Philippine growth projection is the fastest among Southeast Asian economies, tied with Cambodia (5.8%), and ahead of Vietnam (5.5%), Indonesia (4.9%), Malaysia (4.3%), Lao People’s Democratic Republic (4.1%), Timor-Leste (3.5%), Thailand (3.2%) and Myanmar (2%).
However, this is below the Development Budget Coordination Committee’s (DBCC) 6.5-7.5% growth target for 2024.
The World Bank’s growth forecast for the Philippines is also higher than its 4.5% projection for East Asia and the Pacific.
The multilateral lender sees slower growth in the region due to the “anticipated deceleration in economic activity in China.”
Other risks to the growth outlook include geopolitical tensions in the Middle East that could lead to higher oil prices, dampened global trade, tightening financial conditions and climate-related disasters, it said.
“Extreme weather events, the frequency of which has increased in recent decades as a result of climate change, also pose a downside risk to the regional outlook,” it added.
In the Philippines, the government is preparing for the potential impact of the El Niño weather event this year.
The latest bulletin from the state weather bureau showed that El Niño will likely persist from March to May, when dry season crops are often harvested.
National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan earlier said El Niño would likely affect the agriculture sector and drive food prices higher, which could threaten the inflation downtrend.
On the other hand, the multilateral lender said resilient domestic demand could spur growth drivers in the East Asia and Pacific region.
“Modest inflation, and in many cases robust labor markets supported by buoyant service activity, are anticipated to sustain household spending,” it said.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines will grow better this year than the WB’s prediction of 5.8%?
With the 1% withholding tax on online sellers already in effect, there is potential that the said tax could address revenue leakages, according to a BusinessWorld news article.
To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…
THE GOVERNMENT should ensure that it will be able to properly implement and monitor the collection of withholding tax on online sellers.
The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations (RR) No. 16, which imposes a withholding tax on the gross remittances made by electronic marketplace operators and digital financial service providers to merchants.
Analysts said that the implementation of the withholding tax on online sellers will allow the BIR to better track transactions in the digital economy.
“The implementation of a 1% withholding tax on online sellers is intended to expand the tax base by addressing potential revenue leakages in the growing online retail industry,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.
“Ideally, the withholding tax system should streamline the tax payment process for online sellers and should have no substantial impact on prices under the assumption that retailers are paying correct taxes,” she added.
Eleanor L. Roque, tax principal of P&A Grant Thornton, said that the measure provides the BIR an additional mechanism to “ensure that taxes are paid by the business owners since their income will also be reported by their withholding agents.”
Ms. Velasquez noted that the imposition of the withholding tax may also mitigate some instances of noncompliance by online sellers.
“This measure is expected to increase government revenues and promote transparency among companies engaged in online retail trade,” she added.
Ms. Roque said that the tax will be an “additional administrative burden” on electronic marketplaces.
“These entities will have to put controls in place to identify remittances to online sellers that are subject to withholding taxes,” she said in a Viber message.
Under BIR regulation, a withholding tax of 1% will be imposed on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or merchants for the goods and services paid or sold through their platforms or facilities.
However, the tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.
The regulation covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the withholding tax on online sellers will solve government revenue leakages?
Author Carlo Carrasco 