RSA: Excise tax, no subsidy spur high PHL costs
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UEL and power costs in the Philippines are higher because the country does not provide subsidies compared to its neighbors, according to one of the country’s top businessmen. In the Philippine Economic Briefing (PEB), San Miguel Corporation President and Chief Executive Officer Ramon S. Ang said gasoline in Malaysia costs P20 per liter, P40 per liter more than the average P60 per liter price in the country. Ang traced this mainly to the Malaysian government’s subsidizing a third or 30 percent of fuel costs in their country. In contrast, he said, the Philippine govern-
ment, apart from not subsidizing fuel costs, also imposes excise taxes that make up another one-third of pump prices in the country. “If you look at it on an equal basis, our prices without the subsidy and without taxes is even lower than Malaysia, Indonesia and Thailand. It’s also the same as power,” Ang said at the open forum at the PEB’s first plenary session on Monday. “Our power generation compared to our neighboring countries are lower. But we impose taxes on the power sector of fuel. And we also...don’t give subsidy on power. That’s why our power prices are higher,” he added.
Investments MEANWHILE, Ang said that despite the high fuel and power costs, investors must not use this as a reason why they will not invest in the Philippines. If investors are keen on putting up businesses such as factories in the Philippines, they should consider putting up their own power generation facility to serve their power needs, he added. “If you are a foreign investor that wants to come to the Philippines, that [high power costs] is not a reason for not coming. You should come and put up your own power generating plant in your factory. Which is very easy to put up.
And the Philippine government encourages all big energy consumers to put up,” Ang said. The SMC executive also said the country should fight for its sovereignty when it comes to the West Philippine Sea. The country has a lot of reserves in the WPS and could allow the production of more natural gas to help bring down energy costs. “Our oil production is only 6,000 barrels per day. Compared to our neighboring countries, average 1 million barrels a day. That’s why they can put in subsidy. [In the] Philippines, we don’t have oil,” Ang said.
BusinessMirror Tuesday, May 28, 2024 Vol. 19 No. 224
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ANALYSTS POLLED: CUTS IN KEY RATES UNTIL 2026 By Cai U. Ordinario
@caiordinario
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OCAL analysts surveyed by the Bangko Sentral ng Pilipinas (BSP) expect the Monetary Board to cut policy rates every year until 2026. In the latest Monetary Policy Report, analysts said by the end of this year, the monetary authorities could cut policy rates by 25 to 150 bps. For 2025, the analysts said, the BSP could loosen its policy stance by a range of 25 to 250 bps; while in 2026, analysts expect an additional reduction of about 50 to 150 bps in the policy rate. “The results of the survey showed that most of the analysts anticipate current monetary policy settings to remain unchanged in Q2 [second quarter] 2024,” the report stated. This outlook on policy rates is consistent with expectations that inflation will slow to 3.7 percent in 2024 from the initial estimate of 3.8 percent. Inflation forecasts by analysts for 2025 remains unchanged at 3.5 percent but higher in 2026 at 3.5 percent from the initial outlook of 3.4 percent. “Analysts expect within-target
inflation over the policy horizon, although settling at the upper end of the target range as uncertainty lingers. Upside risks continue to dominate due mainly to supply chain disruptions,” the report stated. The local analysts said the primary upside risks to inflation are higher oil and food costs, including rice. The price of these basic goods, the report stated, are affected by supply-side pressures due to geopolitical conflict in the Middle East. In April 2024, rice inflation slowed to 23.9 percent from the 24.4 percent posted in March 2024. Rice inflation has been above 20 percent since January 2024. The list of upside risks also includes the impact of extreme weather events such as El Niño in the first half of 2024 and the La Niña in the second semester. See “Analysts,” A
IPOPHL: BY 2027, GREENHILLS 100% FREE OF COUNTERFEITS By Andrea E. San Juan @andreasanjuan
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REENHILLS Shopping Center (GSC) has committed to g radua l ly move 100 percent of its merchants away from selling intellectual property (IP) infringing products by 2027, according to the Intellectual Property Office of the Philippines (IPOPHL). The intellectual property rights watchdog said, in its statement on Monday, the commitment was made after it met with the shopping mall, as well as brand owners and enforcement agencies on May 9. It unveiled developments in its campaign to encourage the flea market traders to shift away from counterfeit products. At the meeting, GSC Assistant Vice President and Trade
Fairs and Exhibits Head James Candelaria presented the mall’s 10-year roadmap, which aims to gradually move 100 percent of its merchants away from selling IP-infringing products by 2027. According to IPOPHL, starting in 2020, GSC management decided to reduce the number of stalls to 1,412 from 1,771. Candelaria also reported that as of October 2023, at least 80 percent of the traders have gone through the transition program and are now selling local products, Halal items, jewelry, antiques, furniture pieces and artworks. He also showed that over the years since the implementation of the roadmap, the mall was able to “weed out” nearly 299 stores by suspension. See “IPOPHL,” A
THE DAY AFTER Banana trees strewn across the roadside in Barangay San Juan, Batangas City, tell the tale of Typhoon Aghon‘s fierce impact—its heavy rains and strong winds toppling these trees on Saturday night. The typhoon‘s landfall in Gumaca, Quezon, early Sunday further heightened the region’s challenges. As of Sunday, 11 barangays in Gumaca are grappling with the aftermath, prompting residents to seek refuge in evacuation centers. Story on the aftermath of storm Aghon in A3 Nation, “Aghon slightly changes track as it moves away.” ROY DOMINGO
JFC pitches bills overhauling airports’ policy framework By Lorenz S. Marasigan @lorenzmarasigan
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HE Joint Foreign Chambers (JFC) called on legislators on Monday to approve critical bills aimed at overhauling the governance framework of the country’s airports. According to the JFC, there are three urgent reforms that will enhance the safety, efficiency, and quality of domestic and international airports across the country. These three legislative reforms are the following: amendments to the Civil Aviation Authority Act of the Philippines (Caap) Law; the
creation of the Philippine Airports Authority; and the establishment of the Philippine Transportation Safety Board. “These reforms are essential to enhancing the safety, efficiency, and overall quality of both domestic and international airports in the Philippines,” the JFC said in its letter to the Philippine Senate. The proposed amendments to the Caap Law aim to bolster the agency’s role in safety oversight by improving human resource development, strengthening the board, and aligning with global safety standards. See “JFC,” A
PESO EXCHANGE RATES Q US 58.1910 Q JAPAN 0.3708 Q UK 74.1528 Q HK 7.4494 Q CHINA 8.0336 Q SINGAPORE 43.1077 Q AUSTRALIA 38.5632 Q EU 63.1256 Q KOREA 0.0426 Q SAUDI ARABIA 15.5155 Source: BSP (May 27, 2024)