BOP surplus in September reaches 4-year high–BSP By Cai U. Ordinario @caiordinario
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HE country’s balance of payments (BOP) position in September registered a surplus of $3.5 billion, the highest recorded in four years, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP). The data showed that the BOP surplus last month was the highest since the $4.2 billion recorded in December 2020. In January to September, the BOP position recorded a surplus of $5.1 billion, also a four-year high. “The BOP surplus in September 2024 reflected inflows
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mainly from the National Government’s [NG] net foreign currency deposits with the BSP and net income from the BSP’s investments abroad,” BSP said. “The cumulative BOP surplus reflected mainly the narrowing trade in goods deficit alongside the continued net inflows from personal remittances, trade in services, and net foreign borrowings by the NG. Furthermore, net foreign direct and portfolio investments contributed to the BOP surplus,” BSP said. The data showed the BOP surplus in September was 3,907 percent higher than the $88 million surplus in August and was a reversal of the $414-million
deficit in September 2023. The BOP surplus in the ninemonth period was 194.8 percent higher than the $1.7 billion surplus recorded a year ago. The September figure was also more than triple the yearto-date figure of $1.592 billion recorded in August. The surplus allowed the country to have gross international reserves (GIR) of $112.7 billion as of end-September, higher than the $107.9 billion recorded in endAugust. BSP said the latest GIR level represented 8.1 months’ worth of imports of goods and payments of services and primary income. “Specifically, [this] ensures
availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans,” BSP said. The BSP also noted that the BOP figure is also about 4.5 times the country’s short-term external debt based on residual maturity. Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium-and long-term loans of the public and private sectors falling due within the next 12 months.
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SCRAP VAT ON PUVMP VEHICLES, GOVT TOLD By Reine Juvierre Alberto
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HE Philippine Chamber of Cooperatives Inc. (Co-op Chamber) said modern vehicles purchased by transportation cooperatives to comply with the Public Utility Vehicle Modernization Program (PUVMP) should be exempted from the 12 percent valueadded tax (VAT). Co-op Chamber Executive Director Edwin A. Bustillos told the BusinessMirror that scrapping the 12 percent VAT slapped on vehicles purchased by transport cooperatives, which consist mostly of jeepney operators and drivers, will ease their financial burden. Bustillos cited Section 70 (Tax and Other Exemptions) of Senate Bill 2811 or the Revised Cooperative Code of the Philippines which aims to remove the 12-percent VAT on modern vehicles purchased under the PUVMP. “Sa ganitong paraan, mababawasan din ng 12 percent ang ilalabas na pondo ng mga kooperatiba sa pagbili ng modernized jeeps. [In this way, cooperatives will not have to reduce their fund by 12 percent in buying modernized jeeps],” Bustillos said. See “Scrap,” A2
THREADING TRADITIONS. A woman from Kalinga showcases her weaving skills at the recently concluded Asia-Pacific Ministerial Conference on Disaster Risk Reduction in Pasay City. One of the exhibits featured traditional weaving, presented by the School of Living Traditions, which aims to preserve and pass on the knowledge and skills of elders and cultural masters to young learners, ensuring the continuation of their heritage. NONIE REYES
TIEZA IS LOOKING FOR INVESTORS, PARTNERS IN 8 TOURISM ASSETS By Ma. Stella F. Arnaldo @akosistellaBM Special to the BusinessMirror
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HE Tourism Infrastructure Enterprise Zone Authority (Tieza) has opened up for investments various assets in its possession, including a property in Boracay Island, recognized among the best islands in the world. In Tieza’s recent budget briefing at the Senate Finance Subcommittee G chaired by Senator Loren Legarda, Chief Operating Officer Mark T. Lapid showed eight assets open for private-public partnership (PPP). These are: Mount Data Hotel in Mountain
Province, Balicasag Island Dive Resort in Bohol, Zamboanga Golf Course & Beach Park, Aquilino Q. Pimentel Jr. International Convention Center in Cagayan de Oro, as well as properties in Balacad in Ilocos Norte, Moalboal and Kang-Irag in Cebu, and in Boracay. He later explained to the BusinessMirror, that Tieza has a property in Boracay, “around 1.2 hectares that is open for private sector development. Currently, it is pegged for a medical and wellness facility or a trauma response center. We are looking for private partners to develop See “Tieza,” A2
‘Shrinking fiscal space due to aversion to new taxes’
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HE national government’s decision to prioritize the improvement of tax collection over the implementation of “more progressive” tax policies is causing the country’s fiscal space to shrink, according to a United States-based think tank. Through “more progressive tax policies,” such as taxing the wealthy, GlobalSource Partners said in a report that Manila could have generated more revenues. Faced with the challenging task of collecting P4.3 trillion this year, the Department of Finance (DOF) remains firm in its stance to not introduce new taxes, saying it would continue to rely on improved tax collection to beef up the government’s coffers.
This has also been the case in previous years, which GlobalSource Partners said yielded limited results in the past, causing a retreat in fiscal space. As fiscal space compresses, the government went on a “borrowing spree” to finance its expenses, bloating its obligations. “It’s not surprising that the Philippine national government should increase its borrowings both from the local and external capital markets,” it said. Revenues raised by the government reached P2.993 trillion as of end-August 2024 while expenditures amounted to P3.69 trillion, See “Fiscal,” A2
PESO EXCHANGE RATES n US 57.7180 n JAPAN 0.3844 n UK 75.1257 n HK 7.4250 n CHINA 8.1025 n SINGAPORE 43.9288 n AUSTRALIA 38.6480 n EU 62.5259 n KOREA 0.0421 n SAUDI ARABIA 15.3693 Source: BSP (October 18, 2024)