2021 budget, a reboot from pandemic, signed By Samuel P. Medenilla @sam_medenilla
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RESIDENT Duterte finally signed on Monday the P4.506trillion 2021 national budget, which will focus on funding the country’s recovery from the pandemic. The Department of Budget and Management (DBM) said the 2021 General Appropriations Act (GAA) is the country’s largest national budget to date, and is 10 percent larger than P4.1-trillion national budget this year. In his speech at the ceremonial signing, Duterte said a highlight of the 2021 GAA is the P72.5 billion for the implementation of the vaccination drive of the government for Covid-19, which is expected to start by the first quarter of next year.
He said the amount will be used for the purchase, storage, transportation and distribution of Covid-19 vaccines. “I cannot stress this enough. Every centavo of this budget must be spent to ensure our nations recovery, resilience and sustainability,” Duterte said. “Let me therefore serve as an assurance to the Filipino people that this coming year we intend to recover as one nation,” he added. A study by some economists indicated, however, that the 2021 budget puts more premium on peace and order concerns than on health and social welfare in a time of pandemic. See related story on page A8, “Amid pandemic, ’21 budget focuses on security.”
Lawmakers thanked
Duterte thanked the cooperation of the House of Representatives and
the Senate for the swift ratification of the 2021 GAA. “The prompt ratification of the 2021 national budget is a testament to our commitment to set aside divisive partisan politics. Indeed in this crucial juncture in our history we can no longer engage in politics of division, hate, and finger pointing,” Duterte said. In a statement, the Department of Budget and Management (DBM) said the social services sector got the bulk or 37 percent of the 2021 GAA with P1.668 trillion. The economic services sector came in second place, which makes up 29.4 percent of the national budget with P1.323.1 trillion, it includes the administration’s flagship Build, Build, Build program. Other sectors which got significant budget allocation is the General
Tuesday, December 29, 2020 Vol. 16 No. 82
Public Services sector with P747.8 billion (16.6 percent), Debt Burden with P560.2 billion (12.4 percent), and Defense with P206.8 billion (4.6 percent).
Bounceback seen
Senators expect the economy to quickly “bounce back ” following the timely signing into law of the budget bill. Sen. Juan Edgardo Angara, chairman of the Senate Finance Committee, credited the Office of the President and the DBM for early enactment of the new budget law, projecting that with a new budget in place, “the economy is set to bounce back after a historic slump” this year due to the pandemic, allaying apprehensions any delay in the passage of the 2021 budget would derail the recovery process. See “2021 budget,” A2
11-MO BOP SURPLUS HITS w
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P25.00 nationwide | 2 sections 16 pages |
$11.8B; NOV DATA AT $1.47B JAPAN FIRMS TWEAK SUPPLY CHAINS TO PHL, OTHER NATIONS
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The 18-km Skyway 3 cuts a dramatic image as it snakes through some of Metro Manila’s busiest cities, in this photo provided by San Miguel Corporation (SMC), which financed and built the much-awaited project, the country’s longest elevated expressway. SMC is soft-opening this vital link between southern and northern Luzon on Tuesday, December 29, and making it free to motorists for one month. Story in Companies Section, B1.
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By Bianca Cuaresma
@BcuaresmaBM
HE country’s transactions with the rest of the world yielded a dollar surplus of $11.8 billion in the first 11 months of the year, Bangko Sentral ng Pilipinas (BSP) data showed.
The BSP reported on Monday that the country’s Balance of Payments (BoP) registered a surplus of $1.47 billion in November this
year, up from the $541-million surplus in the same month last year. This development pushed the
country’s overall BoP to $11.8 billion in the first 11 months of this year. The BSP said the November surplus alone reflected inflows mainly from the BSP’s foreign exchange operations and income from its investments abroad. The surplus could have been larger, however, if not partially offset by the foreign currency withdrawals the national government made to pay its foreign currency debt obligations. The 11 months’ cumulative BOP surplus was also significantly higher than the $6.27-billion surplus recorded for the same period
a year ago. Foreign portfolio investments (FPI), one of the BoP components, also registered a net inflow in November. This is the second consecutive month that FPI—more popularly known as “ hot” money—yielded inf lows this year. FPI net inflows amounted to $227 million, resulting from the $1.6-billion gross inf lows and $1.3-billion gross outflows for November. The month’s net inflow reversal of last year’s $352-million net outflow of FPI. See “BOP surplus,” A2
Jica, BSP to create SMEs credit risk database By Cai U. Ordinario
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@caiordinario
HE Japan International Cooperation Agency (Jica) and the Bangko Sentral ng Pilipinas (BSP) will be creating a credit risk database (CRD) of local enterprises to boost financing for small and medium enterprises (SMEs).
In a statement, Jica said the technical cooperation project, which will be undertaken for three years, aims to improve SMEs access to financing in the Philippines. The initiative will include the creation of a scoring model based on a database built from information gathered from banks. Jica said some banks have al-
PESO exchange rates n US 48.0620
ready expressed their interest to participate. “We’ve finished the feasibility study for the project that helped pave the way for a technical cooperation between Jica and BSP on formally establishing a credit risk database of local enterprises,” Jica Senior Representative Kawabuchi Kiyo said.
“The pandemic brought about d i sr upt ion s a nd d i f f ic u lt ies which spared no one, including SMEs. Through this project, we look forward to working with more financial institutions and banks so we can mainstream CRD and support economic recovery of SMEs,” Kiyo said. Continued on A2
EWLY DESIGNATED Japan Ambassador to the Philippines Koshikawa Kazuhiko told Finance Secretary Carlos G. Dominguez III that Japanese companies are exploring ways of realigning their supply chains to other countries like the Philippines. In a statement on Monday, the Department of Finance said Koshikawa also told the finance chief that Japanese investors doing business in the Philippines welcomed the Senate approval of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which was also earlier passed by the House of Representatives. The Japanese envoy congratulated Dominguez on the Senate passage of the CREATE bill and expressed hope that Congress would give its final nod to the measure so that President Duterte could sign it into law. The envoy also said passage of the measure will soon end the unpredictability on the future tax and incentives scheme of the country. The Senate version of the CREATE bill aims to bring down the current corporate income tax (CIT) rate from 30 percent—the region’s highest—to 20 percent for micro, small, and medium enterprises (MSMEs) with a net taxable income of P5 million and below; while other companies, including foreign firms, will pay a harmonized rate of 25 percent. Aside from the CIT rate cut, Dominguez also informed Koshikawa that CREATE will also allow the government to tailor-fit incentives given to businesses so as to attract the kind of investors that it wants to invest in the Philippines. When Congress resumes session next year after its year-end break, a bicameral conference committee composed of representatives from both chambers will hammer out a consolidated version of the CREATE bill for submission to the President for his approval. Dominguez also told Koshikawa the Philippines’s competitive edge in attracting foreign direct investments (FDI) is its young working population, which complements Japan’s highly skilled labor force and makes the two countries ideal“demographic partners.” During the meeting, Koshikawa also commended the Philippine economic team led by Dominguez for its sound fiscal management of the economy amid the Covid-19 pandemic. He also restated Japan’s continuing support for the Philippine government’s efforts to curb the spread of the
virus and recover from the economic repercussions of the crisis. Citing the signing in September between the two countries of the 50-billion yen Post-Disaster Standby Loan (PDSL) Phase 2, Koshikawa affirmed Japan’s commitment to continue assisting the Philippines in its disaster risk reduction and mitigation programs. In response, Dominguez said the Philippines has looked to Japan as a good example of how to curb the spread of Covid-19. He again thanked Japan for responding swiftly to the government’s call for emergency financing to help mitigate the impact of the pandemic on the economy and the Filipino people. The finance chief also thanked Japan for its support to the Philippines’s development agenda under the Duterte administration, citing its status as the country’s No.1 official development assistance (ODA) partner, with loans and grants amounting to around $10.10 billion (38.53 percent of total ODA) as of June this year. Since the start of the Duterte administration in July 2016, at least 15 loan agreements totaling JPY679.296 billion (about P313.147 billion or $6.443 billion) have been signed by Manila with Tokyo. Koshikawa, meanwhile congratulated the Philippines on its recent successful issuance of $2.75-billion global bonds, which included the Japan-based Daiwa Capital Markets as among the joint bookrunners of the offering. The envoy reiterated Japan’s longterm support for the economic development of, and the peace process in, Mindanao. Dominguez also briefed Koshikawa on the progress of the implementation of the Bangsamoro Organic Law (BOL) and the strides made by the National Government-Bangsamoro Government Intergovernmental Relations Body (IGRB). Dominguez co-chairs the IGRB with Education Minister Mohagher Iqbal of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). Before beginning his tour of duty in Manila, Koshikawa was a senior official at the Japan International Cooperation Agency (Jica), and had served as Japan’s Ambassador to Spain and Angola. Koshikawa presented his credentials to President Duterte as Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of the Philippines last December 14.
n japan 0.4643 n UK 65.1432 n HK 6.1988 n CHINA 7.3476 n singapore 36.1994 n australia 36.5271 n EU 58.6020 n SAUDI arabia 12.8063
Bernadette D. Nicolas
Source: BSP (December 28, 2020)