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NOY'S CORNER THIS PAST WEEK...
(MINI-READS followed by FULL REPORTS below)

ABAD: GDP TO GROW 6.9% IN Q4


NOVEMBER 27 -Florencio Abad - The economy will likely expand 6.9 percent in the last quarter of the year on faster government spending, the Budget Department said Friday. “We have now the momentum after a slow start in the first quarter at 5 percent, recovery in the second quarter at 5.8 percent, and sustained growth in the third quarter. It’s still possible to grow at 6 percent for the whole year of 2015,” Budget Secretary Florencio Abad said. The economy expanded 6 percent in the third quarter, making the Philippines the third fastest-growing economy in Asia, after China and Vietnam, amid higher public spending and household consumption.Philippine gross domestic product growth in the third quarter of the year was up 0.2 percentage points from 5.8 percent in the previous quarter and higher than 5.5 percent year-on-year. The figure, however, was below the government’s target of 7 percent to 8 percent for the full year. The economy should grow at least 6.9 percent in the fourth quarter to be able to reach the “realistic” growth target of 6 percent to 6.5 percent for the full year. “As in the third quarter, public spending will once again play a pivotal role in the economic expansion in the fourth quarter. Historically, Q4 has always been a strong quarter in terms of public spending as agencies rush to finish their projects,” Abad said. “Because of the reforms introduced, like the elimination of the need for SAROs, the significant reduction of lump sums and the advance procurement of goods and services, the DBM is certain to match its yearly average of 98 percent releases. As of end September, 96 percent of agency budgets have already been released,” Abad said. The average government final consumption expenditure in the first nine months rose 7.2 percent, a reversal from last year’s contraction of 0.2 percent and up from a 2014 full-year rate of 1.7 percent. READ MORE...

ALSO: PORT CONGESTION COST TRIPLES TO $700M


NOVEMBER 27 -ECCP president Michael Raeuber PHOTO FROM ECCP.COM
Lost business due to last year’s port congestion is three times more than originally estimated. Michael Raeuber, immediate past president of the European Chamber of Commerce of the Philippines and president and chief executive officer of Royal Cargo Combined Logistics Inc., said from the initial estimate of $200 million, the actual business lost could have ballooned to $700 million. But Raeuber said this does not include the consequential effects on the economy. “It could run up to several billions… but the severe damage is done. And that ($700 million) is lost business,” Raeuber said. He noted while import volumes are now inching up, traders are still trying to recover some of the lost business. “We hope to never experience (congestion) again,” he added. Raeuber said the Manila ordinance which imposed a truck ban in February 2014 was the “straw that broke the camel’s back” in the congestion experienced last year, aggravating the effects of an earlier order by the Metropolitan Manila Development Authority (MMDA) that expanded the truck ban. He said the MMDA order, which expanded the truck ban by an hour in the morning and an hour in the evening, reduced by 50 percent the productivity of the trucks as they had less turnaround time. It took months before operations at the ports started to normalize, long after Manila mayor Joseph Estrada lifted the truck ban in September also last year. “Restricting the movement of goods will not alleviate traffic because that curtails the movement of trucks which are forced to take other routes,” Raeuber said. With Christmas fast approaching, roads to the ports may see build up in traffic but the situation is still normal. According to Raeuber, because of the congestion last year, traders have overstocked.​FULL REPORT

ALSO: PH ECONOMY CAN GROW WITHOUT FURTHER NEED FOR STIMULUS - BSP


NOVEMBER 27 -The Philippine economy can grow by at least six percent this year without further need of monetary stimulus, according to Amando Tetangco, Bangko Sentral ng Pilipinas Governor.
It was the consensus of businessmen and analysts interviewed yesterday that growth can average at six percent this year. Tetangco said that the third quarter turnout confirms that the economy “doesn’t really need further monetary stimulus (higher interest rates) at the moment.” “But we are mindful of risks from natural disasters and global developments including slower than expected growth among our trading partners,” Tetangco said. We also monitor price movements,” Tetangco said. The estimated six percent growth for the year is below the original government target of 6.5 to 7.5 percent. “ Six percent is the realistic figure,” said Peter Perfecto, executive director of the Makati Business Club. Perfecto said growth could pick up in the fourth quarter and still offset the “blip” in the first quarter, when the GDP was at 5 percent. Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc. said 6 percent can still be maintained as the government increases its infrastructure spending in the third quarter. During that quarter, Ortiz-Luis said remittances and consumption helped boost growth that brought the average to 5.6 percent. But he said to reach 6 percent, the fourth quarter should grow more than 7 percent. NEDA estimated the needed growth for fourth quarter at 6.9 percent. Malacanang is also confident the Philippines would hit a 6 percent growth rate “due to better economic prospects in the last quarter of the year.” READ MORE...

ALSO: P-Noy firm: No income tax cut


OCTOBER 28 -President Aquino poses for a ‘groupie’ with members of the Foreign Correspondents Association of the Philippines during the annual presidential forum held at Solaire Resort and Casino in Parañaque yesterday.
President Aquino reiterated yesterday his stand against the lowering of income taxes for fixed-income earners in the country – the highest in Southeast Asia – even if administration presidential candidate Manuel Roxas II has backpedaled on the issue.
Aquino remained cool to proposals by his allies in the Senate and House of Representatives to lower the 30 percent tax on personal and corporate earnings, especially if the lost revenue will not be recovered from other sources. “By reviewing the concept of income tax, it cannot be taken as a singular activity. There is a reduction in revenue so there has to be compensation elsewhere,” Aquino said during the Foreign Correspondents Association of the Philippines’ annual presidential forum. He recalled that when he ran for president in 2010, he had promised that his administration would not raise taxes except on “sin” products, and would instead work hard for efficient tax collection. Marikina Rep. Miro Quimbo, chairman of the House ways and means committee, was earlier quoted as saying that the lower income tax measure will most likely be approved in the current 16th Congress following the directives of Aquino for the finance department to study the proposal. But Aquino is still unconvinced, despite his previous meeting with Quimbo and his counterpart, Sen. Sonny Angara, who heads the Senate ways and means committee and who asked the President to take a second look at the measure. READ MORE...RELATED,  Income tax cut up to Noy’s successor – lawmaker...

ALSO LAST APPEAL TO PNoy: ‘Income tax cut a matter of justice’


NOVEMBER 29 -Zarate said while workers have been periodically granted salary increases to enable them to cope with inflation since 18 years ago, such adjustments have gone to tax payments with the failure of the government to correspondingly adjust tax rates. Philstar.com/File
The opposition in the House of Representatives kept up the pressure yesterday for President Aquino to change his mind on the proposed reduction of income tax.
Bayan Muna Rep. Carlos Zarate appealed to Aquino’s sense of fairness, saying the lower income tax proposal “is a matter of justice for millions of salaried workers.” “The President rejects it to keep the country’s good credit rating numbers, but for private sector employees and low-paid government personnel, lightening their tax burden only means recovering their inflation-eroded purchasing power,” he said. He said the present income tax rates have not been adjusted since 1997. Zarate said while workers have been periodically granted salary increases to enable them to cope with inflation since 18 years ago, such adjustments have gone to tax payments with the failure of the government to correspondingly adjust tax rates. “That is because their higher income have pushed them to higher tax rates. Their salary increases have been eaten up by taxes,” he added. He cited the study made by the Tax Management Association of the Philippines showing that a worker who paid 10 percent in income tax in 1997 now pays 20 percent. He said the proposal that Aquino has repeatedly rejected calls only for adjusting tax rates for inflation. READ MORE...

ALSO: Peso weakens on fears PHL won’t meet full-year growth target


NOVEMBER 27 -The Philippine peso continued to weaken on Friday, with concerns that the country's economic growth will not meet the expected full-year target.
The local currency ended trading at P47.145:$1 from its Thursday's close of P47.12. "The Philippine Peso softened on concerns that the local economy will not reach its growth target this year," Cherica Y. Vicente, currency analyst at MetisEtrade Inc. said in an emailed statement. Figures released by the Philippine Statistics Authority (PSA) on Thursday show that the Philippine economy grew by six percent for the third quarter, on the back of a strong services sector. However, the figure is seen as not enough for the government's target of seven to eight percent for the full-year growth. Socioeconomic Planning Arsenio M. Balisacan said that the country must achieve a gross domestic product (GDP) of at least 6.9 percent in the fourth quarter. "Although there was low movement in the market on yesterday's US Thanksgiving holiday, the Philippine peso slightly weakened against the US Dollar," Vicente said. -NB, GMA News FULL REPORET.


READ FULL MEDIA REPORTS HERE:

Abad: GDP to grow 6.9% in Q4


Florencio Abad

MANILA, NOVEMBER 30, 2015
(MANILA STANDARD) posted November 27, 2015 at 11:55 pm by Gabrielle H. Binaday - The economy will likely expand 6.9 percent in the last quarter of the year on faster government spending, the Budget Department said Friday.

“We have now the momentum after a slow start in the first quarter at 5 percent, recovery in the second quarter at 5.8 percent, and sustained growth in the third quarter. It’s still possible to grow at 6 percent for the whole year of 2015,” Budget Secretary Florencio Abad said.

The economy expanded 6 percent in the third quarter, making the Philippines the third fastest-growing economy in Asia, after China and Vietnam, amid higher public spending and household consumption.

Philippine gross domestic product growth in the third quarter of the year was up 0.2 percentage points from 5.8 percent in the previous quarter and higher than 5.5 percent year-on-year.

The figure, however, was below the government’s target of 7 percent to 8 percent for the full year.

The economy should grow at least 6.9 percent in the fourth quarter to be able to reach the “realistic” growth target of 6 percent to 6.5 percent for the full year.

“As in the third quarter, public spending will once again play a pivotal role in the economic expansion in the fourth quarter. Historically, Q4 has always been a strong quarter in terms of public spending as agencies rush to finish their projects,” Abad said.

“Because of the reforms introduced, like the elimination of the need for SAROs, the significant reduction of lump sums and the advance procurement of goods and services, the DBM is certain to match its yearly average of 98 percent releases. As of end September, 96 percent of agency budgets have already been released,” Abad said.

The average government final consumption expenditure in the first nine months rose 7.2 percent, a reversal from last year’s contraction of 0.2 percent and up from a 2014 full-year rate of 1.7 percent.

READ MORE...

“This simply shows that the government is proving successful in its efforts to overcome the spending bottlenecks that hampered growth in the first semester,” Economic Planning Secretary Arsenio Balisacan said earlier.

“What will further boost spending is the pressure to finish infrastructure projects from political leaders in the run up to the May 2016 elections. Performance is always an election platform and political leaders demonstrate that through the delivery of social services and public works projects,” Abad said.

Balisacan cited risks to economic growth, such as the lingering effects of El Niño and the uncertainties to be created by a change of leadership as a result of the upcoming elections.

The national elections in 2016, however, will be a driver to boost economic growth further in the fourth quarter.

“Consumption peaks up in fourth quarter, more than just holiday... Since [it is] national election, [we will] likely see not an ordinary year for the fourth quarter,” Balisacan said.

He said that the government was keeping the 7 percent to 8 percent full year target for 2016.


MALAYA

CONGESTION COST TRIPLES TO $700M November 27, 2015


ECCP president Michael Raeuber PHOTO FROM ECCP.COM

Lost business due to last year’s port congestion is three times more than originally estimated.

Michael Raeuber, immediate past president of the European Chamber of Commerce of the Philippines and president and chief executive officer of Royal Cargo Combined Logistics Inc., said from the initial estimate of $200 million, the actual business lost could have ballooned to $700 million.

But Raeuber said this does not include the consequential effects on the economy.

“It could run up to several billions… but the severe damage is done. And that ($700 million) is lost business,” Raeuber said.

He noted while import volumes are now inching up, traders are still trying to recover some of the lost business.

“We hope to never experience (congestion) again,” he added.

Raeuber said the Manila ordinance which imposed a truck ban in February 2014 was the “straw that broke the camel’s back” in the congestion experienced last year, aggravating the effects of an earlier order by the Metropolitan Manila Development Authority (MMDA) that expanded the truck ban.

He said the MMDA order, which expanded the truck ban by an hour in the morning and an hour in the evening, reduced by 50 percent the productivity of the trucks as they had less turnaround time.

It took months before operations at the ports started to normalize, long after Manila mayor Joseph Estrada lifted the truck ban in September also last year.

“Restricting the movement of goods will not alleviate traffic because that curtails the movement of trucks which are forced to take other routes,” Raeuber said.

With Christmas fast approaching, roads to the ports may see build up in traffic but the situation is still normal.

According to Raeuber, because of the congestion last year, traders have overstocked.​


MALAYA

PH ECONOMY CAN GROW WITHOUT FURTHER NEED FOR STIMULUS - BSP November 27, 2015

The Philippine economy can grow by at least six percent this year without further need of monetary stimulus, according to Amando Tetangco, Bangko Sentral ng Pilipinas Governor.

It was the consensus of businessmen and analysts interviewed yesterday that growth can average at six percent this year.

Tetangco said that the third quarter turnout confirms that the economy “doesn’t really need further monetary stimulus (higher interest rates) at the moment.”

“But we are mindful of risks from natural disasters and global developments including slower than expected growth among our trading partners,” Tetangco said. We also monitor price movements,” Tetangco said.

The estimated six percent growth for the year is below the original government target of 6.5 to 7.5 percent.

“ Six percent is the realistic figure,” said Peter Perfecto, executive director of the Makati Business Club.

Perfecto said growth could pick up in the fourth quarter and still offset the “blip” in the first quarter, when the GDP was at 5 percent.

Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc. said 6 percent can still be maintained as the government increases its infrastructure spending in the third quarter.

During that quarter, Ortiz-Luis said remittances and consumption helped boost growth that brought the average to 5.6 percent.

But he said to reach 6 percent, the fourth quarter should grow more than 7 percent. NEDA estimated the needed growth for fourth quarter at 6.9 percent.

Malacanang is also confident the Philippines would hit a 6 percent growth rate “due to better economic prospects in the last quarter of the year.”

READ MORE...

Communications secretary Herminio Coloma Jr. and presidential spokesman Edwin Lacierda, in separate statements yesterday, both welcomed the latest report of the National Economic Development Authority (NEDA) that the country’s GDP grew by six percent in the third quarter – the third fastest in Asia after China at 6.9 percent and Vietnam at 6.8 percent.

“We affirm NEDA’s view that the country will attain its full-year GDP growth of 6.0 percent due to better economic prospects in the last quarter of the year. We note that this quarter’s GDP growth was spurred by improved government spending which grew significantly from 3.9 percent last quarter to 17.4 percent. This is in line with President Aquino’s directives to the Executive Branch to improve effectiveness in budget execution through vigorous implementation of priority development programs,” Coloma said.

He said the Aquino government is determined to sustain this growth, if not raise it further, by sustaining government spending and increasing efforts to address challenges posed by extrinsic factors like the severe El Niño scenario through the last quarter and into the first half of 2016, to antic[ate and cushion any possible slowing of growth.

Justino Calaycay, Jr., trader at Accord Equities Corp., said for the first time this year, the market appears to have been spot-on in the estimates for the economy.

(Growth in the third quarter) validates confidence that the domestic economy, though not immune from the vagaries of the external headwinds, is and will be able to keep growing at a decent, average pace.

“If the momentum of the year where each quarter posted sequentially improving numbers 5 in the first quarter (revised from 5.3 percent), 5.8 percent in the second quarter (revised from 5.6 percent) and 6 in the third quarter), we should be in for a pleasant and welcome fourth quarter particularly if consumer spending picks up during the holidays,” Calaycay said.

But he said it will take a lot for the country to reach the 6.5 percent bottom target by the government.

“A mere replication of the 6 percent of this quarter will only translate to 5.7 percent for the year .” Calaycay added.


PHILSTAR

P-Noy firm: No income tax cut By Delon Porcalla (The Philippine Star) | Updated October 28, 2015 - 12:00am 4 214 googleplus1 0


President Aquino poses for a ‘groupie’ with members of the Foreign Correspondents Association of the Philippines during the annual presidential forum held at Solaire Resort and Casino in Parañaque yesterday.

MANILA, Philippines - President Aquino reiterated yesterday his stand against the lowering of income taxes for fixed-income earners in the country – the highest in Southeast Asia – even if administration presidential candidate Manuel Roxas II has backpedaled on the issue.

Aquino remained cool to proposals by his allies in the Senate and House of Representatives to lower the 30 percent tax on personal and corporate earnings, especially if the lost revenue will not be recovered from other sources.

“By reviewing the concept of income tax, it cannot be taken as a singular activity. There is a reduction in revenue so there has to be compensation elsewhere,” Aquino said during the Foreign Correspondents Association of the Philippines’ annual presidential forum.

He recalled that when he ran for president in 2010, he had promised that his administration would not raise taxes except on “sin” products, and would instead work hard for efficient tax collection.

Marikina Rep. Miro Quimbo, chairman of the House ways and means committee, was earlier quoted as saying that the lower income tax measure will most likely be approved in the current 16th Congress following the directives of Aquino for the finance department to study the proposal.

But Aquino is still unconvinced, despite his previous meeting with Quimbo and his counterpart, Sen. Sonny Angara, who heads the Senate ways and means committee and who asked the President to take a second look at the measure.

READ MORE...

Aquino pointed out that if the bill is passed, it will have “unintended consequences that we’d rather not undergo.”

“We’re still operating under a budget deficit,” the President said.

He warned that reducing income taxes might only force the government to raise other taxes.

Last month, Aquino also told reporters in an interview in Iloilo City that there is no government surplus to give public and private workers such tax relief.

“Perhaps if we had been enjoying a surplus for the past years, then I think we can sit down and talk about it,” he said.

Fickle-minded Meanwhile, the United Nationalist Alliance (UNA) yesterday hit Roxas for flip-flopping on the issue of reducing income taxes.

UNA spokesman Mon Ilagan described Roxas’ position on the proposal to reduce income tax rates as “sala sa init, sala sa lamig,” a Filipino saying which refers to a person who easily changes his mind.

“Before, he didn’t want to lower income taxes. Now, he’s in favor of it,” Ilagan said in a statement.

According to Ilagan, Roxas previously said that it is easy to grandstand and look good by proposing to trim down taxes.

“Now he’s saying he was misquoted on his stand on this issue. Can he make up his mind?” Ilagan asked.

“Many people have been supporting the reduction on income taxes and we want a leader who can be man enough and have the courage to stand by his position,” he added.

At least 18 groups belonging to the business, trade, professional and labor sectors, have supported the call for lower income taxes, Ilagan said. – With Helen Flores

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RELATED FROM PHILSTAR

Income tax cut up to Noy’s successor – lawmaker By Jess Diaz (The Philippine Star) | Updated November 28, 2015 - 12:00am 0 7 googleplus0 0


After Aquino’s “papogi” criticism, Speaker Feliciano Belmonte Jr. said the House would no longer tackle the reduced income tax proposal in the remainder of the current third and last regular session of Congress. Philstar.com/File

MANILA, Philippines – The fate of the proposal to reduce income tax for millions of salaried workers will now be up to President Aquino’s successor and the next Congress.

Marikina Rep. Romero Federico Quimbo, principal proponent of lower income tax in the House of Representatives, said yesterday he and his colleagues would re-file their bill in the 17th Congress, which will convene in July.

“We will definitely re-introduce it. It will be up to the incoming administration to support it and prod lawmakers to approve it,” he said.

Quimbo chairs the House ways and means committee. His Senate counterpart, Juan Edgardo Angara, has said he would re-file his counterpart bill. Their bills call for adjusting tax rates, which have not been tweaked since 1997, only for inflation purposes.

Both have given up hopes that the current 16th Congress would approve their proposal with President Aquino’s repeated statements opposing it. Aquino also dismissed it as a mere “papogi” (to make oneself look good) measure.

Quimbo’s and Angara’s colleagues have taken up the cudgels for them, saying they do not need “pogi” points. They said Angara is not up for reelection next year, while Quimbo is running unopposed in his Marikina district.

After Aquino’s “papogi” criticism, Speaker Feliciano Belmonte Jr. said the House would no longer tackle the reduced income tax proposal in the remainder of the current third and last regular session of Congress.

READ MORE...

“Unless the President is 100 percent for it, it’s no use taking it up in the limited time we have. If he’s against it, you better spend your time on bills that will be approved instead on those that will not be approved,” he said.

However, he said the move in both chambers to cut income tax has not been for naught.

“The fact that it has been discussed to a certain extent, it’s there on record. People will pick it up in the next Congress for sure,” he added.

Opposition and administration congressmen have accused Aquino of not listening to his “bosses” by rejecting workers’ clamor for lower income tax.

“The bosses have made their will very clearly in every survey, media scanning and congressional hearing. They want tax reduction, period,” Pasig City Rep. Roman Romulo, who belongs to the ruling Liberal Party, said.

He cited the joint statement of 18 business and labor groups led by the Tax Management Association of the Philippines (TMAP) expressing support for reduced income tax to correct the “inherent inequity in the personal income tax system.”


PHILSTAR

LAST APPEAL TO AQUINO? ‘Income tax cut a matter of justice’ By Jess Diaz (The Philippine Star) | Updated November 29, 2015 - 12:00am 0 0 googleplus0 0


Zarate said while workers have been periodically granted salary increases to enable them to cope with inflation since 18 years ago, such adjustments have gone to tax payments with the failure of the government to correspondingly adjust tax rates. Philstar.com/File

MANILA, Philippines - The opposition in the House of Representatives kept up the pressure yesterday for President Aquino to change his mind on the proposed reduction of income tax.

Bayan Muna Rep. Carlos Zarate appealed to Aquino’s sense of fairness, saying the lower income tax proposal “is a matter of justice for millions of salaried workers.”

“The President rejects it to keep the country’s good credit rating numbers, but for private sector employees and low-paid government personnel, lightening their tax burden only means recovering their inflation-eroded purchasing power,” he said.

He said the present income tax rates have not been adjusted since 1997.

Zarate said while workers have been periodically granted salary increases to enable them to cope with inflation since 18 years ago, such adjustments have gone to tax payments with the failure of the government to correspondingly adjust tax rates.

“That is because their higher income have pushed them to higher tax rates. Their salary increases have been eaten up by taxes,” he added.

He cited the study made by the Tax Management Association of the Philippines showing that a worker who paid 10 percent in income tax in 1997 now pays 20 percent.

He said the proposal that Aquino has repeatedly rejected calls only for adjusting tax rates for inflation.

READ MORE...

He pointed out that the measure aims to allow workers to recover the purchasing power they have been losing to higher taxes since 18 years ago.

“It’s a fair and reasonable proposal. We did that with the excise taxes on the so-called sin products – tobacco and alcohol – because the President and his economic managers told us that the rates have not been adjusted for nearly two decades. Now they don’t want to do it with income taxes,” he stressed.

Finance Secretary Cesar Purisima and Bureau of Internal Revenue Commissioner Kim Henares have warned lawmakers that reducing income taxes would mean a revenue loss of P30 billion for the government.

Zarate suggested what he described as a simple solution to the revenue loss problem: scrapping a P30-billion appropriation in the 2016 budget intended as a guarantee fund for private companies with government contracts.


GMA NEWS ONLINE

Peso weakens on fears PHL won’t meet full-year growth target Published November 27, 2015 8:07pm By JON VIKTOR CABUENAS, GMA News

The Philippine peso continued to weaken on Friday, with concerns that the country's economic growth will not meet the expected full-year target.

The local currency ended trading at P47.145:$1 from its Thursday's close of P47.12.

"The Philippine Peso softened on concerns that the local economy will not reach its growth target this year," Cherica Y. Vicente, currency analyst at MetisEtrade Inc. said in an emailed statement.

Figures released by the Philippine Statistics Authority (PSA) on Thursday show that the Philippine economy grew by six percent for the third quarter, on the back of a strong services sector.

However, the figure is seen as not enough for the government's target of seven to eight percent for the full-year growth.

Socioeconomic Planning Arsenio M. Balisacan said that the country must achieve a gross domestic product (GDP) of at least 6.9 percent in the fourth quarter.

"Although there was low movement in the market on yesterday's US Thanksgiving holiday, the Philippine peso slightly weakened against the US Dollar," Vicente said. -NB, GMA News


Chief News Editor: Sol Jose Vanzi

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