Water goals need ₧21B-₧55B funds–study By Cai U. Ordinario @caiordinario
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F the Philippines were to achieve its universal access to water and sanitation goal in a decade, the government must infuse an additional P21.3 billion to as much P55.5 billion worth of funding to local water districts (LWDs). This was the primary finding in the report titled, “An Assessment of the Financial Sustainability and Performance of Philippine Water Districts” authored by Lawrence Velasco, an Assistant professor at the University of the Philippines Cesar EA Virata School of Business. The study was released by the Philippine Institute for Development
w
Studies (PIDS). Velasco said the base case scenario is P21.3 billion between 2019 and 2023. However, assuming a lower allowable maximum debt-asset ratio of 60 percent and 50 percent, the requirements would reach between P31.9 billion and P51.6 billion. “The country’s spending plans are so ambitious that the current balance sheets of LWDs cannot sustain planned investments through debt financing,” Velasco said. “These infusion requirements are critical, considering the Mandanas ruling, wherein the internal revenue allotment of LGUs will increase by P225.3 billion,” he added. Velasco explained that based on the Philippine Water Supply and
Monday, November 8, 2021 Vol. 17 No. 31
Sanitation Master Plan (PWSSMP) 2019–2030, the National Economic and Development Authority (Neda) said the country needed to invest P1.069 trillion from 2019 to 2030. Of this amount, Velasco said, the Local Water Utilities Administration (LWUA) and the water districts need to spend P94.17 billion and P87.41 billion for water supply and sanitation, respectively, from 2019 to 2023. However, Velasco said most funding sources for water districts are loans. He said the financial burden of LWDs between 2009 and 2018 is already significant as it is. Borrowing to attain the goals means securing loans in the order of P136.4 billion from 2019 to 2023
which, Velasco said, may not be feasible without any capital infusion from the government. “The available debt capacity of water districts nationally, based on their current financial position, is estimated to be at only P43.3 billion from 2019 to 2023 at a maximum debt ratio of 70 percent. This is only 31.7 percent of water districts’ needed investments to reach Neda’s 2023 vision for the sector,” Velasco said. “To fund the balance of P93.16 billion, the government needs to infuse nearly P28-billion fresh equity to water districts nationwide to finance the balance via debt, assuming a 70-percent debt ratio,” he also said. Continued on A2
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P25.00 nationwide | 2 sections 18 pages |
CARRY RECOVERY–DOF
Regulators ink pact for streamlining bank MCAs
By Cai U. Ordinario
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@caiordinario
HE Department of Finance (DOF) remained confident that the country’s macroeconomic fundamentals are strong enough to support the economy’s recovery from the pandemic. In its latest economic bulletin, DOF Chief Economist Gil Beltran said the current account in the balance of payments moved to a deficit of $1.2 billion or 0.7 percent of GDP in the first six months of 2021. This was due to imports and e x por ts posting double-d ig it growth of 23 and 10.3 percent, respectively. This level of growth, Beltran said, indicates strong economic recovery. “Maintaining good fundamentals by keeping both the budget deficit and balance-of-payments manageable, keeping interest rates at the level that sustains investments, keeping inflation within the target range and allowing the exchange rate to maintain its competitive level, will allow the country to recover promptly as it eases the lockdowns set up to battle the pandemic,” Beltran said. The DOF said imports increased as capital formation and manufacturing surged ahead by 20.2 percent and 10.4 percent in the first semester. It added that the deficit in the trade in goods balance widened to 12 percent of GDP in 2021 from 8.9 percent of GDP in 2020. With imports rising faster than exports, DOF noted this resulted in foreign exchange net outflows that led to a 2.4-percent depreciation of the peso as of end-September.
By Bianca Cuaresma @BcuaresmaBM
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MANGER IN A LOCKET One of the 54 Giant Lanterns competing in the Belenismo sa Tarlac is on display in front of Camp Servillano Aquino, Tarlac City. Team AFP’s typical nativity scene inside a locket type shell typifies the ingenuity, resiliency, purpose in life of the Filipino family amid the Covid-19 pandemic. Team AFP is a Hall of Famer in the Belenismo sa Tarlac, now on its 14th year. Fireworks highlighted the opening rites on November 5. The display is open to the public until January 6, 2022. Organizers led by Tarlac Heritage Foundation, Inc. vow to heed safety protocols. BERNARD TESTA
PHL TOUTS SUSTAINABLE TOURISM AT LONDON FORUM By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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HE rehabilitation of Boracay Island, the vaccination of tourism workers, and promotion of lowimpact activities were cited as initiatives by the Philippine
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PESO EXCHANGE RATES n US 50.5670
government to ensure sustainable development of its tourism destinations at the recent summit of tourism ministers at the World Travel Market 2021 in London. Dur ing the panel discussion on “Investing in Tourism’s Sustainable Future,” Tourism Secretary Bernadette Romulo
Puyat said, “ The Philippines promotes sustainable tourism; our most popular destination Boracay Island, was closed for six months [in 2018] because the president [Duterte] wanted to implement environmental laws.” She added, when Covid-19 made its way across the globe, the Phil-
ippines tourism sector was among the hardest hit among economic engines. “So we recognized the importance of our tourism workers not only in the safe resumption of travel, but more importantly on their role to championing sustainable tourism practices across the sector.” See “Tourism,” A2
INA NCI AL regulators in the country are looking to streamline the process of bank mergers, consolidations, and acquisitions (MCA) in the country to promote more of these in the sector. The Bangko Sentral ng Pilipinas (BSP), Philippine Deposit Insurance Corporation (PDIC), Securities and Exchange Commission (SEC), Cooperative Deve lopment Aut hor it y (C DA), and the Philippine Competition Commission (PCC) have signed a mu lti-agenc y ag reement to synchronize requirements and processes for banks who wish to undergo MCA processes in the local scene. The regulators agreed on a harmonized list of requirements for MCA proposals of banks which will effectively cut in half the number of documentary requirements from 58 to only 30. The synchronized timelines and the elimination of duplicate functions among the concerned agencies will significantly reduce the total processing time of MCA proposals from an average of about 160 business days to only 55. The agreement was signed by BSP Governor Benjamin E. Diokno, PDIC President and CEO Roberto B. Tan, SEC Chairperson Emilio B. Aquino, CDA Chairperson Joseph B. Encabo, and PCC Chairperson Arsenio M. Balisacan in a virtual ceremony. See “Regulators,” A2
n JAPAN 0.4445 n UK 68.2655 n HK 6.4973 n CHINA 7.9036 n SINGAPORE 37.4321 n AUSTRALIA 37.4196 n EU 58.4302 n SAUDI ARABIA 13.4824
Source: BSP (November 5, 2021)