BusinessMirror February 03, 2021

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‘Strong manufacturing in Jan signals recovery’ By Bianca Cuaresma

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HE strong performance of the Philippine manufacturing sector in January this year may be an indicator of better recovery prospects for the economy in 2021, a local bank economist said. In his latest commentary on the Philippine economy, Rizal Commercial Banking Corporation (RCBC) economist Michael Ricafort said the Philippines’s recent Purchasing Managers’ Index (PMI) is a “pleasant surprise” to the economy that could be an early indicator of sustained recovery after the holiday surge. “[The January PMI is] a leading indicator that could suggest further pickup in business and economic activities as sustained even after the Christmas season in December 2020,”

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Ricafort said. International think tank IHS Markit reported on Monday that the country’s PMI in January hit 52.5, rising from the 49.2 PMI in December. A country’s PMI is meant to gauge the health of its manufacturing sector. It is calculated as a weighted average of five individual subcomponents. Readings below 50 show deterioration in the industry, while readings above the 50 threshold signal a growth in the manufacturing sector. The Philippines’s January PMI is the strongest that the sector has seen in 25 months. “Latest moves to further reopen the local economy, including easing of some restrictions on public transportation and continued improvement in some economic

RICAFORT: “For the coming months of 2021, increased infrastructure spending…would benefit contractors and manufacturing industries that are part of the supply chain and value chain.” data, locally and globally, from the worst levels at the height of the Covid-19 lockdowns/stay-at-home orders in April-May 2020 may have led to some improvement in the manufacturing activities, as partly

manifested by the pickup in both exports and imports in recent months,” Ricafort said. Going forward, Ricafort said further measures to reopen the economy will lead to a sustained and faster recovery in manufacturing. “For the coming months of 2021, increased infrastructure spending, as part of the priorities of the economic recovery program, would benefit contractors and manufacturing industries that are part of the supply chain and value chain,” Ricafort said. The economist, however, warned that the sustained recovery in the manufacturing sector and its indication of overall recovery in the economy will only be justified if new Covid-19 cases ease or improve, especially with the expected rollout of vaccines in the latter part of 2021.

BusinessMirror A broader look at today’s business

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Wednesday, February 3, 2021 Vol. 16 No. 115

P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK

PHL’S ’20 DEBT TO P9.8T

PROTESTERS from various sectors gather as early as 10:30 am on Tuesday (February 2, 2021) to hold a demonstration against the controversial anti-terror law. The Supreme Court—main hall seen still vacant before the hearing—opened oral arguments on the unprecedented 37 petitions challenging the law. Story on page A12. NONIE REYES/SC PUBLIC INFORMATION OFFICE

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By Bernadette D. Nicolas

HE national government ended 2020 with a record-high outstanding debt of P9.795 trillion and a 14-year-high debt-to-GDP ratio of P54.5 percent as the government had to borrow more money to fund its response to the Covid-19 pandemic. PESO EXCHANGE RATES n US 48.0620

The outstanding level of the government debt last year ballooned by 26.7 percent from P7.73 trillion by end-2019, latest data from the Bureau of the Treasury showed. However, this was below the government’s earlier projection of P10.16 trillion. It was also lower compared to P10.13 trillion recorded as of end-November last year, due to the net redemptions of domestic loans.

TOURISM STAKEHOLDERS SEEK TAX DEFERMENT By Ma. Stella F. Arnaldo Special to the BusinessMirror

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OURISM stakeholders are appealing for a deferment of their business taxes as they seek to renew their business permits from local government units (LGUs) for 2021.

In a letter to Interior Secretary Eduardo M. Año dated January 18, 2021, Jose C. Clemente III, president of the Tourism Congress of the Philippines (TCP), said in the process of renewing their business permits, tourism stakeholders have received “assessment fees for business taxes” from their respec-

tive LGUs. Clemente said most of these stakeholders are unable to pay said business taxes due to the current state of the tourism industry. “Most only earned income during the first quarter of 2020 with nothing else after that. Some LGUs are also basing their Continued on A2

See “Debt,” A2

n JAPAN 0.4581 n UK 65.6767 n HK 6.1995 n CHINA 7.4305 n SINGAPORE 36.0663 n AUSTRALIA 36.6184 n EU 57.9676 n SAUDI ARABIA 12.8148

Source: BSP (February 2, 2021)


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