Tag: economic recovery

Philippines unemployment rate falls down to 3.5% in February 2024

Philippines unemployment rate falls down to 3.5% in February 2024

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Recently the Philippine Statistics Authority (PSA) confirmed that the unemployment rate of the nation fell down to 3.5% in February 2024, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

Unemployment rate fell to 3.5 percent in February this year from 4.5 percent in January, the Philippine Statistics Authority (PSA) reported on Thursday.

In a briefing, National Statistician Dennis Mapa said based on the time series, the unemployment rate during the month was the second lowest on record since the 3.1 percent in December 2023. Unemployment rate in February last year was 4.8 percent.

Mapa said the number of unemployed Filipinos went down to 1.80 million from 2.47 million and 2.15 million unemployed persons in February 2023 and January 2024.

The Labor Force Participation Rate (LFPR), meanwhile, was at 64.8 percent or about 50.75 million Filipinos aged 15 years and above who were either employed or unemployed.

This is lower than the 66.6 percent LFPR seen in February last year with young people (-669,000) and women (-404,000) withdrawing from the labor force. 

“The needs of vulnerable groups, including women, youth, older people, and those with disabilities, remain our priority to encourage workforce participation. We will improve access to quality childcare, finance, and entrepreneurship opportunities to support women’s entry and retention in the labor market,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said in a separate statement.

Balisacan said the government will revisit the existing policy governing alternative work modes, such as the Telecommuting Act, and adapt it to the evolving work landscape to address the growing preference for remote work.

“The government will explore enhancing the potential of part-time work to help promote lifelong learning. A framework for part-time work and similar set-ups can allow workers to retool or upskill without leaving the workforce,” Balisacan said.

The country’s employment rate, meanwhile, went up to 96.5 percent in February from 95.5 percent in January and 95.2 percent in February this year.

The number of employed persons was registered at 48.95 million, higher than the recorded number of employed persons in February 2023 at 48.80 million and in January 2024 at 45.94 million.

Major industries with the largest increase in employment include construction (470,000), transportation and storage (444,000), administrative and support service activities (344,000), manufacturing (313,000), and accommodation and food service activities (210,000).

Underemployed persons – or those who expressed the desire to have additional hours of work in their current job or to have an additional job or to have a new job with longer hours of work – reached 6.08 million, down from last year’s 6.29 million.

The NEDA said the Marcos administration will continue to prioritize people-centered policies and attract job-creating investments to support the continued improvement of the Philippine labor market and enable Filipinos to earn higher wages from better jobs.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the nation’s economy and employers still have enough momentum to move forward and create more new jobs over the next twelve months?   

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Fitch sees Philippine economy outpacing Southeast Asian economies this year with 6.4% growth

Fitch sees Philippine economy outpacing Southeast Asian economies this year with 6.4% growth

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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?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR clarifies that small online sellers are exempted from 1% withholding tax

BIR clarifies that small online sellers are exempted from 1% withholding tax

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In response to growing concerns related to the recent implementation of the 1% withholding tax on online merchants with annual earnings of over P500,000, the Bureau of Internal Revenue (BIR) clarified that small online sellers are exempted from it, 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 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?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Philippine economy grew by 5.6% in 2023

Philippine economy grew by 5.6% in 2023

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The results are finally in. The economy of the Philippines grew by 5.6% for the year 2023 and this was short of the government’s own declared target of 6% to 7%, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA news report. Some parts in boldface…

The Philippine economy grew slower at 5.6% in year 2023, falling short of the government’s target as elevated interest rates resulting from high inflation environment dampened consumption, according to data released by the Philippine Statistics Authority (PSA) on Wednesday.

The economy, as measured by gross domestic product (GDP) or the total value of goods and services produced in a period, grew by 5.6% from October to December 2023, PSA chief and National Statistician Claire Dennis Mapa said at a press conference.

This is slower than the 7.1% growth rate seen in the fourth quarter of 2022. It is also a deceleration from the upwardly revised third quarter 2023 GDP growth rate of 6%.

The fourth quarter economic performance brought the full-year 2023 economic growth rate to 5.6%, slower than the 7.6% full-year 2022 GDP growth.

This is below the government’s target range of 6% to 7% for 2023’s full-year GDP growth.

“While this growth is below our target of 6 to 7% for this year, this keeps us in the position of being one of the best-performing economies in Asia,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said during the press briefing.

Comparing the growth rates of neighbors in the region, the Marcos administration’s chief economist said the Philippines’ fourth quarter growth surpassed that of China (5.2%) and Malaysia (3.4%) while falling behind Vietnam (6.7%).

“More importantly, our full-year GDP for 2023 is now 8.6% higher than pre-pandemic levels,” Balisacan said.

High inflation, interest rates – The NEDA chief said the slowdown seen in 2023 could be attributed “possibly to effects of past interest rate increases.”

The Bangko Sentral ng Pilipinas’ policy-setting Monetary Board has raised the benchmark interest rate by 450 basis points since May 2022 to temper inflation, which resulted from global supply disruptions and economic uncertainty following Russia’s full-scale attack and invasion of Ukraine since February 2022.

Notably, the Philippines’ full-year inflation — which measures the rate of increase in the prices of goods and services — accelerated to 6% from 5.8% in 2022.

“The impact of inflation is on Household final consumption expenditure. We saw the impact on food expenditure… directly affected by inflation,” Mapa said.

Spending on food for the whole year grew at 8.1%, slower than 12.4% in 2022.

“We are concerned about the low growth in real spending on food due to high food prices, though it has moderated in recent months,” Balisacan said.

Meanwhile, household final consumption expenditure decelerated to 5.3% from 7% in the previous quarter in 2022.

For the whole year, household spending slowed down to 5.6% from 8.3% in 2022.

“The government will be relentless in managing inflation, especially for basic commodities such as food. Our efforts include improving the efficiency and building resiliency of the agriculture value chain, utilizing strategic trade policy when domestic production is inadequate, and establishing mechanisms to empower consumers to exercise their market power to combat inflation,” Balisacan said.

Likewise, government final consumption expenditure contracted by 1.8% in the fourth quarter, from 3.3% growth in the same period in 2022.

Full year, government spending grew 0.4%, slower than the 4.9% growth in 2022.

Balisacan said the decline in state spending last year was “largely due to the fiscal consolidation program.”

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think 2024 will be a better year of growth for the Philippine economy? Do you think more government spending will boost economic growth without adding much to inflation?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

New SBMA chief Aliño eyes more hotels and infrastructure projects to make Subic Bay freeport more attractive to investors

New SBMA chief Aliño eyes more hotels and infrastructure projects to make Subic Bay freeport more attractive to investors

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Recently a local businessman who has extensive experience of doing business inside the Subic Bay Freeport Zone took office as the new head of the Subic Bay Metropolitan Authority (SBMA) and made clear his plan to make the zone more attractive to investors, according to a Philippine News Agency (PNA) news article. His predecessor served for last than one year.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

Businessman Eduardo Aliño officially assumed post on Monday as chairman and administrator of the Subic Bay Metropolitan Authority (SBMA).

During his first press conference as SBMA head, Aliño noted the vast potential of Subic which should be given priority for development.

“We have so many potentials here in Subic and we may be putting more hotels, more infra projects to attract more investors,” he said, adding that together with his management team, they will study everything to determine what is lacking.

Citing his experience as a locator himself, he also expressed his desire to give investors who are experiencing difficulties in paying their financial obligations to SBMA, a chance or consideration to recover.

He said these businessmen had invested so much money and it would be so painful to lose the business they dreamed of in Subic, so giving them a chance to recover would be like giving them a new lease on life.

Earlier on Monday, Aliño attended the flag ceremony in front of the SBMA Administration Office with his family, and was welcomed by senior officers, members of the board, and employees of the agency.

In his message, he revealed having some apprehensions when President Ferdinand R. Marcos Jr. offered him the position.

He said he consulted his family and thought about it for a while before saying “yes” to the President.

“How can I say no to your President?” he said. “Because if you always refuse to help our leaders, who else would? So, I said yes.”

Aliño said his acceptance of the post was also driven by his desire to repay for all the help that SBMA people had given him and his business over the past 20 years.

“It is because of you, other than us, that made our terminal into what it is right now. Hindi po namin magagawa ang lahat ng ito kung wala ang tulong ninyo (We won’t be able to accomplish all of these without your help)”, he said.

Aliño is the former president and chairman of the S.T.A.R. Group of Companies and former chairman of the Subic Bay Yacht Club. The S.T.A.R. Group of Companies is engaged in integrated supply chain services and port operations.

He is also the former president and chairman of the Subic Bay Freeport Grain Terminal Services Inc. and Mega Equipment International Corp. which is now being managed by one of his sons.

Addressing the employees of SBMA, the new administrator and chairman assured fairness and honesty in serving the people, while asking for their support.

“I promise you that I will be fair. I promise you to be honest,” he said, adding that he has no agenda other than to help and to serve SBMA as a gesture of love for the country, God and the President.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the new SBMA head Aliño and his team will succeed in revitalizing business in the Subic Bay Freeport over the next six months?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

First Metro Investment Corp. and University of Asia and the Pacific expect Philippine economy will grow by 6% this year

First Metro Investment Corp. and University of Asia and the Pacific expect Philippine economy will grow by 6% this year

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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?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

World Bank sees Philippine economy growing at 5.8% this year

World Bank sees Philippine economy growing at 5.8% this year

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While local economic managers predict the Philippine economy growing between 6.5% to 7.5% this year, the World Bank (WB) itself forecasts a 5.8% growth for 2024, 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 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%?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Finance Secretary Diokno says Philippine economic growth this year will be robust

Finance Secretary Diokno says Philippine economic growth this year will be robust

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The economy of the Philippines will continue with robust growth this year according to the recent statement by Finance Secretary Benjamin Diokno, as reported by the Philippine News Agency (PNA).

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

Philippine economic growth is expected to remain robust this year mainly driven by private consumption and the continued implementation of structural reforms, Finance Secretary Benjamin Diokno said on Monday.

“While multilateral organizations project a slower global outlook for 2024 at 2.9 percent, the Philippine economy is expected to improve, reinforcing its status as one of the fastest-growing economies in the region,” Diokno said in a statement.

The Philippine economy grew by 5.9 percent in the third quarter of 2023, bringing the year-to-date growth to 5.5 percent.

Diokno said that for the full year of 2023, growth is expected to settle close to the low end of the government’s 6 to 7-percent target.

For 2024, economic managers assume a growth rate of 6.5 percent to 7.5 percent.

“Amid the ongoing strong El Niño and geopolitical and trade tensions, the country’s growth is expected to be driven by strong private consumption, supported by the expected return of inflation within the target range, falling oil prices, robust public spending, greater investments lured by the country’s sound macroeconomic fundamentals, investment-grade credit rating, and the implementation of structural reforms, and increased demand for Philippine exports as supply chain bottlenecks ease,” he said.

Diokno said economic prospects will be even better with the alignment of policies between fiscal and monetary authorities, measures to bring down inflation, and greater coordination of all public sectors to implement programs.

He added multilateral organizations also expect the Philippines to be one of the fastest growing economies in 2024.

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 has enough momentum to achieve growth of at least 6.5% this year?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR imposes 1% withholding tax on online merchants with annual earnings of over P500,000

BIR imposes 1% withholding tax on online merchants with annual earnings of over P500,000

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Those who engage with selling online here in the Philippines and earn over P500,000 annually will have a new normal to live with as the Bureau of Internal Revenue (BIR) officially imposed the 1% withholding tax on online merchants that are found qualified, according to a Philippine News Agency (PNA) news article. Take note that BIR had been targeting online sellers previously and the Department of Finance (DOF) asserted that online sellers should be subject to the same tax obligations as traditional brick-and-mortar business owners for the sake of fairness.

In the year 2022, the digital economy of the Philippines contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has announced that online merchants with earnings amounting to more than PHP500,000 annually are now subject to a 1-percent withholding tax.

BIR Revenue Regulation 16-2023, issued last December 21, said the withholding tax will apply to one-half of the gross remittances by electronic marketplace operators and digital financial services providers to the sellers or merchants for the goods or services sold through their platform.

The BIR defines an electronic marketplace as a “digital service platform whose business is to connect online buyers/consumers with online sellers/merchants, facilitate and conclude the sales, process the payment of the products, goods or services through such digital platform, or facilitate the shipment of goods or provide logistic services and post-purchase support within such platforms.”

These include marketplaces for online shopping, food delivery platform, and platform for accommodation booking.

The BIR clarified, however, that the withholding tax will not be imposed if the annual total gross remittances to an online seller do not exceed PHP500,000.

The withholding tax shall not apply “if the cumulative gross remittances to an online seller/merchant in a taxable year has not yet exceeded PHP500,000,” the BIR said.

Sellers subject to a lower income tax rate pursuant to any existing law are also excluded.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the BIR made the right move? Do you think the imposition of the 1% withholding tax on online sellers (that made over P500,000 annually) will have a significant impact on e-commerce here in the Philippines? If you were planning to sell goods or services online, does the 1% withholding tax discourage you?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Philippines attracts 5 million foreign tourist arrivals, sets 2024 target at 7.7 million

Philippines attracts 5 million foreign tourist arrivals, sets 2024 target at 7.7 million

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With a few more weeks to go before 2023 finally comes to an end, the Department of Tourism (DOT) confirmed that the number of foreign tourist arrivals in the Philippines just surpassed the 5,000,000 mark and they raised the stakes even higher for 2024, according to a Malaya Business Insight news report.

To put things in perspective, posted below is an excerpt from the Malaya news report. Some parts in boldface…

After breaching 5 million in tourist arrivals as of December 12, the Philippines hopes to attract 7.7 million tourists in 2024.

Christina Frasco, secretary of the Department of Tourism (DOT) in her accomplishment report yesterday, said  the Philippines has exceeded its 4.8 million goal when it logged 5.06 million visitors as of yesterday.

These tourists contributed  P440 billion in receipts  to the economy or more than double than the P209 billion recorded last year.

“In 2024, we are more than optimistic that we will once again reach our targets as we have proven in the past two years. For next year, we’re targeting 7.7 million international arrivals. I understand that this is not yet pre-pandemic numbers  of 2019 at over 8.2 million international arrivals, but what I can assure you is that we will push as hard as we can and fully activate our convergences with other government agencies  to reach this target and bring us closer to pre- pandemic numbers even as we grapple with many forces beyond our control globally and locally,” Frasco said.

Frasco also disclosed the DOT has proposed  P5 billion infusion for the construction of new tourism roads in addition to the construction of tourism roads for 2024.

Frasco said recovery rate on arrivals to pre-pandemic of Philippine tourism is at 65 percent as of November, faster than the 62 percent average rate in Asia-Pacific as of September.

She said in terms of international visitor receipts,  Philippine recovery is at 95 percent of the  P458 billion visitor receipts in 2019.

This is a 267 percent increase versus the same period last year with a little over 2.6 million visitor arrivals  in 2022. Tourism created over 5.35 million jobs which means that for every 100 Filipinos, 11 are employed in tourism related jobs.

According to Frasco, the Philippines has already recovered nearly 80 percent of its pre-COVID international incoming seat capacity.

Let me end this piece by asking you readers: What is your reaction to this recent development? Now that the Philippines has recorded more than 5 million foreign tourist arrivals, do you think there is still a chance for the figure to reach 6 million by December 31, 2023? Do you think the 2024 target of 7.7 million foreign tourist arrivals is achievable?   

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at  @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco