IMF cuts ’24, ’25 growth forecast for PHL B C U. O @caiordinario
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HE International Monetary Fund (IMF) has decided to reduce its growth forecast for the Philippines on the back of a moderation in the growth of consumption in the coming months. The IMF now expects the country’s GDP growth to average 5.8 percent this year and 6.1 percent next year. The IMF reduced its forecast by 0.2 percentage points in 2024 and 0.1 percentage points in 2025. Inflation is also expected to average 3.3 percent this year and 3
percent next year on the back of lower food inflation as well as the slowdown nin core inflation. “The downward revision from our July forecast, reflects our view that private consumption is going to grow slightly with less momentum,” IMF Mission Head Elif Arbatli Saxegaard explained in a briefing on Wednesday. “So I would like to highlight that the downgrade is very small, 0.2, and reflects the fact that the firsthalf private consumption growth was lower than what we had anticipated. And this might be in part driven by the high food prices,” she also said.
Saxegaard also noted that while there was a reduction in the forecast for the country’s GDP growth, this remained to be one of the highest in the region. “I would also like to highlight that the growth forecast for the Philippines remains one of the highest in the region. Its 6.1 percent growth for 2025 is a very respectable growth rate. It’s a very small adjustment reflecting the outturns of the first half,” she added. Given the expected slowdown in inflation, IMF also expects the Bangko Sentral ng Pilipinas (BSP) to ease monetary policy “gradu-
ally” to reach what IMF considers as a neutral interest rate. While the IMF did not want to provide an outlook on the possible terminal rate of the BSP for 2024 and 2025, it noted that a neutral policy rate would be around 1 to 3 percent in real terms. The BSP, IMF said, is on track to reducing policy rates to this level. “We do see many central banks gradually reducing policy rates to levels that what economists call the neutral level of the policy rate. But that remains very uncertain given the changes and the shifts
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Thursday, October 3, 2024 Vol. 19 No. 352
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FOR ONLINE SELLERS B C U. O
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@caiordinario
FTER months of falling short of its high targets, the Bureau of Internal Revenue (BIR) is pinning its hope of reaching the P3.055-trillion revenue goal on taxing online sellers. Internal Revenue Commissioner Romeo D. Lumagui told reporters on the sidelines of the Kapihan sa Manila Bay on Tuesday that the incoming withholding tax on online sellers will help in generating more revenues. Lumagui said the 1-percent deduction from earnings as withholding tax from local online sellers will be collected by the BIR this coming November. When asked by reporters if he is confident of reaching the BIR’s P3.055-trillion target this year, Lumagui said, “Confident tayo na magiging maganda ang performance ng BIR. Ang growth maganda ang tinatakbo. [We are confident that the performance of the BIR will be C A
MARCOS MAKES HER OWN MARK Senator Imee Marcos, accompanied by her mother, former First Lady Imelda Marcos, and her sons, Borgy and Michael, filed her certificate of candidacy (COC) for reelection under the Nacionalista Party (NP) at the Manila Hotel’s Tent City on Wednesday, October 2, 2024. Following her decision to withdraw from the administration-backed Alyansa para sa Bagong Pilipinas, Marcos explained that her choice allows her to remain independent and engage with all sectors. In a press briefing, she emphasized the importance of not drawing lines between allies and non-allies, reaffirming her close relationship with her brother, President Ferdinand “Bongbong” Marcos Jr. Story in A3 Nation. ROY DOMINGO
TEPID FDI FLOWS WILL LEAD VAT on digital services won’t TO ‘SLOBALIZATION’–OXFORD crimp sector’s growth–DOF B M. S F. A
@akosistellaBM Special to the BM
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OREIGN direct investments (FDI) are on a downtrend all over the world, despite the United States and Asia picking up some; this will eventually lead to a slowdown in global economic growth. In a new paper, Oxford Economics Lead Economist Adam Slater said, “In recent years, the pace of global foreign direct investment has slowed markedly. World FDI flows rose rapidly from 1990-2016—by around 13 percent per year on average in nominal dollar terms. As a share of world GDP [gross domestic
product], FDI flows surged from less than 1 percent in the early 1990s to a peak of around 2.5 percent in the decade preceding the global financial crisis, and stayed at around 2 percent of GDP up to 2017 based on Unctad [United Nations Trade and Development] data. But since then, FDI flows have declined in absolute terms and as a share of world GDP.” The Bangko Sentral ng Pilipinas (BSP) recently reported that net FDI in the Philippines reached US4.4 billion in the first half of 2024, almost 8 percent higher than the same period last year. For June 2024 alone, net FDI fell 29 percent to $394 million S “O,” A
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@reine_alberto
HE Department of Finance (DOF) on Wednesday gave assurances the valueadded tax (VAT) on digital services will not hinder the growth of the digital economy. President Ferdinand R. Marcos Jr. signed Republic Act 12023 or the VAT on Digital Services on Wednesday, October 2. The 12-percent VAT will be imposed on all digital services, such as online marketplaces, including Shopee and Lazada; online media, such as YouTube, Netflix and Spotify; online advertising; online search engines, including Google and Yahoo; cloud services and digital goods. In a press briefing in Malacanan Palace on Tuesday, DOF Director Euvimil R. Asuncion said the possible price increases on digital services would affect their businesses. “We think there would be no impact as to the growth,” Asuncion said, adding that possi-
ble increases in service prices would not impact their services. Internal Revenue Commissioner Romeo D. Lumagui Jr. said it is up to the businesses, the local and foreign digital service providers, to decide whether they would increase the prices of services they offer. “Puwedeng magkaroon ng [There could be a] price increase but again I think it would be minimal. Hindi naman iyan 12 percent automatically mag-i-increase [It doesn’t mean the prices would also increase by 12 percent] sila also commensurate the same rate,” Lumagui said. Local creative industries are at an advantage since 5 percent of the collected revenues will be earmarked to foster innovation and empower Filipino creators and entrepreneurs. “We think that would be really helpful as well,” Asuncion said. S “VAT,” A
PESO EXCHANGE RATES US 56.2130 ■ JAPAN 0.3915 ■ UK 74.7071 ■ HK 7.2324 ■ SINGAPORE 43.6538 ■ AUSTRALIA 38.6858 ■ SAUDI ARABIA 14.9837 ■ EU 62.2278 ■ KOREA 0.0424 ■ CHINA 8.0177 Source: BSP (October 2, 2024)