Businessmirror August 02, 2019

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INVESTMENTS IN ELECTRONICS DIP 24% ON TAX POLICY JITTERS I By Elijah Felice E. Rosales

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NVESTMENTS into the country’s top export industry have declined nearly 24 percent after the first five months, as semiconductor firms remain uncertain about expanding operations in the Philippines over the government’s plan to rationalize tax incentives. According to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi), capital inflow to the industry from January to May slowed 23.6 percent to P5.47 billion, from P7.16 billion in the same period last year. This reflected the overall declining registrations of new projects and expansions to the Philippine Economic Zone Authority (Peza).

In the same period, investments in Peza crashed 26.03 percent to P43.22 billion, from P58.43 billion, on negative sentiment from foreign investors. Investments from local firms in the five-month span fell nearly 15 percent to P25.53 billion, from P29.96 billion during the same period in 2018. However, the bigger decline came from foreign firms at 37.87 percent to P17.68 billion, from P28.46 billion. “Uncertainties in tax policy are seen to have affected the investment climate in 2018, resulting in the withholding of expansion plans, or the eventual transfer of investments to other countries,” Seipi said in a report on Thursday. See “Investments,” A12

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n Friday, August 2, 2019 Vol. 14 No. 296

Govt fails to hit infra spending goal for H1 40% T By Bernadette D. Nicolas

@BNicolasBM

HE government missed its infrastructure spending target for the first semester, largely due to the four-month delay in the passage of the national budget, according to data from the Department of Budget and Management (DBM).

Data from the DBM showed that actual infrastructure spending reached only P311.4 billion, P81.5 billion lower than the P392.9 billion programmed for the Januaryto-June period. Total disbursements for the period, which include current operat-

ing expenditures, capital outlays and net landing, reached only P1.59 trillion. This is P125.8 billion lower than the goal of P1.716 trillion for the first half. “This is largely due to the delayed implementation of various infrastructure projects following

the late approval of the FY 2019 General Appropriations Act and the election ban,” the DBM said in a statement. Infrastructure spending in the first semester was down by an annualized rate of 11.7 percent, or P41.3 billion, compared to last

The decline in infrastructure spending for June alone— down to P43.5 billion from the P71.9 billion recorded in the same month in 2018

year’s actual program. Disbursements for infrastructure last year reached P352.7 billion. For June alone, infrastructure spending fell by nearly 40 percent to P43.5 billion, from the P71.9 billion recorded in the same month last year. The national government was Continued on A12

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T

HE budget impasse and the President’s move to veto insertions in the 2019 budget have forced a local think tank to cut its growth forecast for this year. In a phone interview on Thursday, University of Asia and the Pacific (UA&P) Senior Economist Victor A. Abola told the BusinessMirror that First Metro Investment Corp.-UA&P (FMIC & UA&P) Capital Markets Research now expects the economy to grow by around 6 to 6.5 percent this year. This is lower than the 6.8 percent to 7.2 percent the think tank initially forecast in its first economic briefing in January. “[There was] more than one quarter delay in the budget, that’s why we saw the first-quarter growth

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was well, well below expectations,” Abola said. “When we considered it, [the budget] was already delayed. [The budget for] infrastructure wax also cut because of the [removal of the] insertions. We had [no choice but] to cut the forecast.” However, Abola said beginning in the second quarter, growth will get back on track to 6 percent. Growth is expected to be even better in the second half of the year given the “tri-star domestic demand engines.” FMIC & UA&P Capital Markets Research said these engines are consumer spending, government spending and investment expenditures. Consumer spending, the think tank said, will be fueled by low inflation and the “sustained inflow of remittances” from overseas Filipino workers (OFWs). See “FMIC,” A2

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REVENUE COLLECTION GOAL OF B.I.R., B.O.C.: P3.3T IN 2020 By Rea Cu

@ReaCuBM

T

HE Bureau of Internal Revenue (BIR) and the Bureau of Customs—the main collection agencies of the government—are targeting to collect P3.307 trillion next year, data from the Development Budget Coordination Committee (DBCC) showed. Based on the DBCC’s medium-term program as of July 18, the BIR’s goal for 2020 is pegged at P2.576 trillion. The figure is 13.4 percent higher than the bureau’s target of P2.271 trillion for 2019. As for the BOC, its target is to collect P731 billion, 10.6 percent higher than this year’s goal of P661 billion. The DBCC figures for next year took into account the implementation of the fuel marking system, the approval of Package 1B sans the electronic invoicing system and the increase in motor vehicle

FMIC & UA&P cut growth forecast on budget woes By Cai U. Ordinario

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users charge, as well as Package 2 Plus sans the increases in the mining taxes under the Comprehensive Tax Reform Program (CTRP). The total tax revenues for 2020 are expected to reach P3.332 trillion, 12.8 percent higher than the P2.995 trillion projected for this year. This will translate to a tax effort of 15.7 percent of GDP. Total revenues of the government for 2020 are projected to hit P3.536 trillion, 12 percent higher than the P3.149 trillion L a st mont h, t he DBCC said revenue collection for 2020 is projected to rise to P3.54 trillion, equivalent to 16.7 percent of the country’s gross domestic product (GDP), while disbursements are programmed at P4.21 trillion, or 19.9 percent of GDP. Revenue and disbursements are estimated to rise to P4.42 trillion or 17.2 percent of See “BIR,” A2

Recovery signs from manufacturing

T

NATIONAL FIREFIGHTER Sen. Richard Gordon, the country’s veritable action man for all sorts of emergencies, especially health crises like measles and dengue and the recent water shortages, strikes a pensive pose while fielding questions on Thursday at the BusinessMirror Coffee Club. Among others, he urged authorities to go slow on plans to resort to another round of Dengvaxia vaccinations amid the current spike in dengue cases. Story on page A12. NONIE REYES

HE Philippine manufacturing sector showed signs of recovery in July after rising concern in recent months that it is headed toward a slowdown. The monthly Purchasing Managers’ Index (PMI) report from international think tank IHS Markit and Nikkei showed the Philippines’s index hit 52.1 in July, up from the 51.3 index seen in June. The PMI is a composite index aimed to gauge the health of the country’s manufacturing sector. It is calculated as a weighted average of five individual subcomponents. Readings above the 50 threshold signal a growth in the manufacturing sector while readings below 50 show deterioration in the industry. See “Manufacturing,” A12

US 50.8650 n JAPAN 0.4678 n UK 61.8569 n HK 6.4980 n CHINA 7.3889 n SINGAPORE 37.0331 n AUSTRALIA 34.8120 n EU 56.3432 n SAUDI ARABIA 13.5622

Source: BSP (1 August 2019 )


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Businessmirror August 02, 2019 by BusinessMirror - Issuu