Higher NTA can’t cover full devolution–LGUs By Jovee Marie N. Dela Cruz @joveemarie
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THE WORLD ›› A8
XI JINPING FACES PUBLIC ANGER OVER ‘ZERO COVID’
LAWMAKER who served as mayor has taken up the cudgels for local governments now fretting over the undue burden imposed on them to shoulder all costs of fully devolved services, a responsibility they deem cannot be covered even with the increase of their national tax allotments (NTA) as a result of the Mandanas ruling. Leyte Rep. R ichard Gomez urged Congress to look into the “misalignment” in the NTAs of local government units and the funding requirements for full devolution of specific national public
services mandated under the Local Government Code (RA 7160). In House Resolution 599, Gomez said the calculation of the NTA, as mandated under RA 7160, is not aligned with the costing of devolved functions under RA 7160 and Executive Order No.138, which was issued on June 1, 2021 following the Supreme Court’s Mandanas-Garcia decision. In 2019, the SC ruled in favor of then Batangas Gov. Hermilando Mandanas and Bataan Gov. Enrique Garcia Jr. and granted substantial, additional, and proportional increases in the NTA of LGUs. Following the allocation of higher national taxes to LGUs, EO 138 was issued mandating the full
devolution of specific functions of the Executive branch to LGUs, not later than the end of fiscal year 2024. However, in filing HR 599, Gomez said “the increase in national tax allotment for LGUs, as a result of the Mandanas-Garcia ruling, is not guaranteed to fully cover all devolved functions” under EO 138 and RA 7160. Citing the lack of a clear devolution plan and the misalignment in source funding for the full transfer of services, Gomez urged his colleagues to echo his call for President Marcos Jr. to repeal EO 138. “I am appealing to President Marcos to nullify EO 138 as Congress and the Executive thresh out the various issues that have
cropped up related to the implementation of the full devolution of services. Let us first resolve all issues and then we can talk about full devolution,” Gomez said, partly in Filipino. In a separate House Bill 6414, the lawmaker said: “This representation maintains that we have not yet attained the optimal conditions for full devolution. Much as it seems that additional, yet proportional NTAs for each LGU would solve the budget gaps in each LGU, it is not as simple as that. At the onset of the full devolution process, various issues have arisen that signal a fiscal crisis among LGUs, especially in the next two years.” See “NTA,” A2
BusinessMirror A broader look at today’s business
IMF: BSP MUST BE READY IF INFLATION RISK RISES I www.businessmirror.com.ph
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Wednesday, November 30, 2022 Vol. 18 No. 49
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By Cai U. Ordinario @caiordinario
NFLATION is one of the primary challenges faced by the Philippines, and the International Monetary Fund (IMF) thinks the Bangko Sentral ng Pilipinas (BSP) must be more aggressive in raising interest rates in the event that the situation worsens. In the IMF Executive Board’s recently concluded 2022 Article IV Consultation with the Philippines, the Washington-based lender said should inflation worsen, they would recommend that the BSP respond with a tighter monetary policy stance. Inflation in the Philippines, IMF said, is being fuelled by the strong dollar, higher commodity prices, and tightening global financial conditions. IMF said high inflation has weakened the country’s external position and narrowed its fiscal space. “The BSP’s prompt action to fight inflation is welcome, but further monetary tightening may be needed to keep inflation expectations well anchored,” IMF said. “The current policy stance remains accommodative, and BSP should aim at bringing the policy rate close to the neutral real rate to
securely bring inflation within the target range,” it explained. However, the IMF noted that should inflation become less persistent or downside risks to growth materialize, the BSP should also recalibrate its monetary policy tightening. “Monetary policy should be the first line of defense against persistent inflationary pressures,” IMF said. “The use of FXI [foreign exchange intervention] can mitigate a sharp and disorderly exchange rate depreciation, alleviate inflation, and reduce some of the pressure on monetary policy.” The IMF expects consumer prices to average 5.3 percent this year; 4.3 percent next year; and 3.1 percent in 2024. See “Inflation risk,” A2
Standard Chartered cites 4 key Asean growth sectors By VG Cabuag @villygc
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TANDARD Chartered Bank has identified four key sectors in Southeast Asia that showcase a high growth potential with compound annual growth rates, which it projected to outpace the overall industry average over the next few years. These sectors were construction and infrastructure, consumer products, pharmaceuticals and health care and digital and e-commerce. In its study titled “Winning in ASEAN Strategies to drive resilient growth in the region,” it surveyed
BONI’S DAY The Bonifacio Monument gets a cleanup on Tuesday, November 29, 2022, in Caloocan City, in preparation for the 159th birth anniversary of the leader of the 1896 Philippine revolution, Andrés Bonifacio. The monument of the founder and Supremo of the Katipunan was designed by National Artist Guillermo E. Tolentino in 1930. The 13.7-meter-high memorial is acclaimed as one of the best monuments in the world. NONOY LACZA
480 senior business leaders in four key sectors with the highest growth rates. “Propelled by shifting consumer behaviors, accelerated digital adoption and rapid urbanization, these four sectors present significant opportunities for both regional and foreign companies looking to expand in ASEAN,” the bank’s study said. “ The four key sectors that this report highlights present sig nif icant oppor tunities for both regional and international companies in ASEAN.
DTI CHIEF TO GERMANS: INVEST IN IT-BPM, EVS By Andrea E. San Juan
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RADE Secretary Alfredo E. Pascual encouraged German firms and government to invest in the Philippines, particularly in the IT and Business Process Management (IT-BPM) and electric vehicles (EVs) sectors, among others. “I take this opportunity to underscore the Philippine government’s intention to offer our country as a manufacturing investment destination and an IT-BPO partner to German companies, especially those already doing business in the
Philippines,” Pascual said at the 2022 Philippine-German Business Forum on Tuesday held in Makati City. “We seek the potential expansion of German firms already in the Philippines,” the Trade chief added. He bared the key priorities of the Philippines which he raised in his bilateral meeting with German Federal Minister for Economic Affairs and Climate Action Robert Habeck at the sidelines of the recent Asia Pacific Conference in Singapore. See “IT-BPM,” A2
See “Asean,” A2
PESO EXCHANGE RATES n US 56.7960 n JAPAN 0.4088 n UK 67.9337 n HK 7.2687 n CHINA 7.8811 n SINGAPORE 41.1834 n AUSTRALIA 37.7580 n EU 58.7327 n KOREA 0.0424 n SAUDI ARABIA 15.1174 Source:
BSP (29 November 2022)