Top 10 trade and investment stories of 2022

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BusinessWorld, Jan. 2, 2023.
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Here is this column’s assessment of the important trade and investment stories of the past year, five global and five national.

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5. Global illicit trade was estimated at more than $2 trillion a year

The number is an UNCTAD estimate. There is a huge diversion in commerce from legal and registered products to illegal ones, leading to lower tax revenues for governments that led them to raise taxes elsewhere. In September, it held the second UNCTAD Illicit Trade Forum in Geneva, in partnership with the Transnational Alliance to Combat Illicit Trade (TRACIT). The goal was to highlight initiatives and cooperation to fight this criminal activity....

7. High incidence of illicit trade especially in tobacco

See a recent report in BusinessWorld, “Gov’t losing P250B in revenues due to illicit trade” (Dec. 14) quoting Jesus L. Arranza, the chairman of both Fight IT (Illicit Trade) and the Federation of Philippine Industries. He estimates that cigarette smuggling alone deprives the government of P24.7 billion a year in taxes. His estimate is not far from the estimates of Albay Rep. Joey Salceda of P30 billion a year in tax revenue losses, of former Party-list Rep. Koko Nograles of P31 billion a year (P26 billion to P60 billion a year), and this column’s estimate of P36 billion to P49 billon a year (see “Inflation and Illicit trade,” Nov. 7)....

10. The worst is over and the best is yet to come

That is the title and assessment of a recent statement from Finance Secretary Benjamin Diokno, also reported as “‘Better years’ ahead for PHL — Diokno” (BusinessWorld, Dec. 29). Among the reasons for his optimism which this column agrees with are: (1) the early approval of the 2023 national budget, faster rollout of important infrastructure projects, (2) adoption of the first-ever Medium-Term Fiscal Framework, FY 2023-2028 and the Philippine Development Plan 2023-2028, which unite executive and legislative fiscal and economic priorities, and (3) legislation for more economic liberalization in the Foreign Investment Act, Retail Trade Liberalization and Public Service Act.

I must add that some changes in budget priorities must be made. In the past and in the recently signed General Appropriations Act of 2023, priorities of the annual budget are not on productivity-enhancing physical infrastructure but on social sector subsidies and freebies, and an ever-rising spending and entitlement by the armed sectors including the luxurious military and uniformed personnel pension: P124.4 billion in 2021, P153.1 billion in 2022 and P176.7 billion in pension and gratuity fund in 2023 (Table 3).

Having free education from elementary to university, free healthcare, free monthly cash, free irrigation, free bus rides in Metro Manila, etc. are formula for people to be more state-dependent and not self-reliant. A bloated police and military with bloated pension funds taken not from their monthly contribution but from taxpayers is additional recipe for endless borrowings, high interest payment, a bad business environment when new taxes must be imposed to pay those huge public debt.


Bienvenido S. Oplas, Jr. is the president of Bienvenido Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers.

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