Budget and Taxes

Stabilizing growth with low unemployment and high manufacturing PMI January 11, 2024 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/01/11/568077/stabilizing-growth-with-low-unemployment-and-high-manufacturing-pmi/ (Part 5 of a series) HONG KONG — Last time I was here was in 2017 when I attended two international free market events. Yesterday, when our plane from Manila landed at the Hong Kong International Airport (HKIA), I was surprised at the huge number of cranes, heavy construction machines, and piles of soil both left and right of the runway. After a quick search of the web, I learned that HKIA is constructing a third runway, 3.8 kilometers long, with the reclamation of 650 hectares of land. It will build 57 new gates, and expand capacity by another 30 million passengers by 2030. The project is huge, and such construction activities must have contributed to Hong Kong’s further lowering of its unemployment rate. Also yesterday, th...

Top 10 trends in global public debt in 2023 January 4, 2024 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2024/01/04/566657/top-10-trends-in-global-public-debt-in-2023/ Continuing this column’s “Top 10” series for 2023, we look at government debt indicators. Below are the 20 countries with the largest public debt (Russia is the 20th) plus six other major indebted Asian countries. Here are the emerging trends. 1. The US remains the most indebted country in the world with $31 trillion in 2022. By end-2023, this has gone up to $34 trillion, according to the latest data from fiscaldata/treasury.gov. China, with $14 trillion in 2022, is second and Japan, with $11.1 trillion, is third but this is a decline from $13.1 trillion in 2022. 2. A big jump in public debt occurred in 2020 during the dictatorial global lockdown and the mandatory shutdown of many tax-paying businesses. This happened while expenditures kept rising as governments continued ...

Top 10 economic news stories of 2023 December 28, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/12/28/565683/top-10-economic-news-stories-of-2023/ Merry Christmas, dear readers. This piece is toast to the great economic performance of the Philippines despite an unwieldy and worsening global economic environment. For the purposes of brevity, we are covering only three important indicators — GDP growth, the unemployment rate, and the inflation rate. Countries covered in this analysis are those that the IMF projects as having GDP size at purchasing power parity (PPP) values for 2023 of at least $700 billion. These are also the top 40 largest economies in the world. Two countries among the top 40, Pakistan and Bangladesh, have no quarterly GDP growth data, so are not included. These are the top 10 economic stories and trends based on these indicators and data. 1. India, Iran, the Philippines, China, and Indonesia (all Asian countrie...

Top 10 trends in fiscal program and illicit trade in 2023 December 21, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/12/21/564876/top-10-trends-in-fiscal-program-and-illicit-trade-in-2023/ Here is this column’s take on the major events and stories on the fiscal condition and shortfalls in revenues related to illicit trade this year. 1. The revised fiscal program released by the Development Budget Coordination Committee (DBCC) last Friday, Dec. 15, showed that disbursements would rise from P5.3 trillion this year to P7.8 trillion in 2028. It should be noted that disbursements kept rising even when revenues significantly declined during the lockdown dictatorship of 2020-2021. 2. Revenues are rising from P3.8 trillion this year to P6.6 trillion in 2028 but they cannot cope with sustained high spending. So the budget deficit (revenues lower than spending) will remain elevated at P1.5 trillion this year to P1.2 trillion in 2028. The ...

Stabilizing growth with low inflation, low unemployment rates, and more PPP investments December 12, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/12/12/562833/stabilizing-growth-with-low-inflation-low-unemployment-rates-and-more-ppp-investments/ (Part 4) There were three positive economic developments last week. First, the Philippine Statistics Authority (PSA) reported that November’s inflation rate was a low 4.1%. This was down from 4.9% in October and 8% in November 2022, or just half of the level a year ago. Second, the PSA also reported that the unemployment rate in October was a low 4.5%. This is very significant because it is the lowest unemployment rate the country has seen since April 2005. See these reports in  BusinessWorld : “Inflation cools to 4.1% in November” (Dec. 6), and, “Unemployment rate drops to 18-year low in October” (Dec. 8). I have consolidated and summarized the monthly inflation data plus comparabl...

Stabilizing growth via peace and order and free trade December 5, 2023 | Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/12/05/561457/stabilizing-growth-via-peace-and-order-and-free-trade/ (Part 3) This piece will cover three topics, so we go straight to them. First is the growth of the top 40 largest economies. Here is an update in GDP growth for Q1-Q3 of 2023, taking off from part 2 of this series, “Stabilizing growth of the fastest growing major economy in the world” (Nov. 14). I looked at the top 40 largest countries in terms of GDP size in 2022 at purchasing power parity (PPP) values. Four countries were not included in my analysis — Pakistan and Bangladesh (there is no quarterly data), and the United Arab Emirates and Egypt (which released Q1 data only). So I looked at 36 economies. The Philippines, with 5.6% growth in Q1-Q3, is now the second-fastest growing economy in the top 40 largest economies in the world next to India. The economies which are contracting...

Financing growth by improving revenue and controlling illicit trade November 30, 2023 My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/11/30/560451/financing-growth-by-improving-revenue-and-controlling-illicit-trade/ (Part 8) There have been several positive developments in the Philippine economy aside from the 5.9% GDP growth in the third quarter (Q3) of 2023. See for instance these reports in  BusinessWorld  in the last two weeks: “Foreign investment pledges surge in Q3” (Nov. 15), “Tourism revenue tops P404 billion in first 10 months” (Nov. 16), “German businesses in PHL report satisfactory business conditions” (Nov. 16), “Around 80 infrastructure projects to be financed by MIF” (Nov. 17), “Marcos’ US trip yields $672M in investment commitments” (Nov. 21), “PPA profit nears P10 billion after rise in cargo volumes” (Nov. 23), “PEZA investment approvals surge” (Nov. 24), “BPO industry sees headcount growing 7-8% next year” (Nov. 27), “Ph...

Economic forecast 2024 November 21, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr.  https://www.bworldonline.com/opinion/2023/11/21/558623/economic-forecast-2024/ Only six weeks to go and the year 2024 will be with us. Many people, especially entrepreneurs, are curious about two issues: 1.) What is the economic outlook, the business environment, for the new year? And, b.), what sectors should they invest in more, and where to pull back? FORECAST 2024 I checked the latest forecast by the International Monetary Fund (IMF), its World Economic Outlook (WEO) October 2023, the Asian Development Outlook (ADO) September 2023 of the Asian Development Bank (ADB), and Trading Economics as of November 2023. For Table 1, I put countries together into four groups: Group A is the ASEAN-6, Group B contains the large Asian economies, Group C has the largest economies of North and South America, and Group D is made up of the largest economies in Europe. The economic performances of mo...

Stabilizing growth of the fastest growing major economy in the world November 14, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/11/14/557261/stabilizing-growth-of-the-fastest-growing-major-economy-in-the-world/ (Part 2 of a series) Last week the Philippine Statistics Authority (PSA) released the country’s GDP performance in the third quarter (Q3) of 2023. It was high at 5.9%, and, when compared with most large economies in the world, it was outstanding and excellent.* GROWTH OF TOP 40 LARGEST ECONOMIES In Table 1, I summarized the GDP growth in the first three quarters (Q1-Q3) of each year (2020 to 2023) of the Top 40 largest economies in the world by GDP size in 2022 at purchasing power parity (PPP) values. Four countries were not included — Pakistan and Bangladesh (no quarterly data), the United Arab Emirates (no data for 2023 yet), and Egypt (only Q1 data is available). So, 36 economies are included in the table. The Philippi...

Stabilizing growth: Declining inflation and unemployment rates November 9, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/11/09/556386/stabilizing-growth-declining-inflation-and-unemployment-rates/ (Part 1 of a series) This column will produce another series, “Stabilizing growth” and focus on inflation and employment data of the Philippines compared to other major countries in Asia and the world. This is on top of the “Financing growth” and “Energizing growth” series. The global economic environment continues to remain volatile and even worsening for many industrial countries. But two key economic indicators point to some improvement for the Philippines and Asia — declining inflation rates and unemployment rates. This week the Philippine Statistics Authority (PSA) released the inflation rate for October 2023 — it is 4.9%, down from 6.1% in September 2023 and 7.7% in October 2022. And the unemployment rate for September 2023 is 4....

Financing growth via more PPP funding November 2, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/11/02/554931/financing-growth-via-more-ppp-funding/ (Part 7) While the global and regional economic environment this year is worse than last year, there are some emerging opportunities for the Philippines. Among these are rich sovereign wealth funds (SWFs) abroad in search of new investments here because their domestic economies are either crawling or contracting. Public-private partnership (PPP) investing in the Philippines is one area that many SWFs and big investors abroad find enticing. The Philippine economic team composed of Finance Secretary Benjamin Diokno, Budget Secretary Amenah Pangandaman, National Economic and Development Authority Secretary Arsenio Balisacan and Bangko Sentral officials met with SWFs of Qatar and the United Arab Emirates on Sept. 10-12. President Ferdinand Marcos, Jr. and Diokno met with the SWF of Saudi...

Financing growth: Maharlika Fund and SWFs from abroad October 24, 2023 | 12:03 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/10/24/553147/financing-growth-maharlika-fund-and-swfs-from-abroad/ (Part 6 of a series) The International Monetary Fund (IMF) released the World Economic Outlook (WEO) October 2023 two weeks ago. In Table 1 I show the largest economies in the world, with a focus on Asians. Two valuations of GDP here: nominal (GDP at national currency divided by US$ average exchange rate for the year) and purchasing power parity (PPP, which converts the currency of one country with another to buy the same amount of goods and services in each country). When it came to GDP at nominal values in 2022, the US was the largest in the world and three Asians were in the top 10. When it came to GDP at PPP values, China was the largest and three other Asians were in the top 10 — India, Japan, and Indonesia. The Philippines was the 30th largest eco...

Declining unemployment and the Tholos forum October 12, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/10/12/551076/declining-unemployment-and-the-tholos-forum/ There were a number of positive economic stories in the Philippines recently as reported in  BusinessWorld : “AMRO sees PHL as fastest-growing economy in the region” (Oct. 5), “Marcos removes cap on rice prices” (Oct. 5), “Philippine manufacturing output peaks in August” (Oct. 6), “Jobless rate dips to 3-month low in August” (Oct. 6), “NAIA 9-month passenger traffic surpasses 2022 full-year tally” (Oct. 8), “‘Much better’ growth seen in 2nd half” (Oct. 9), “IMF still sees PHL as one of region’s strongest economies this year” (Oct. 11), “FDI net inflows jump to 3-month high in July” (Oct. 11). So, despite the Philippines’ slowing GDP growth and high inflation rates in the second and third quarters of 2023, the unemployment rate went down to 4.4% in August. Then the man...

Financing growth: Reducing interest payments and spending control October 5, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/10/05/549699/financing-growth-reducing-interest-payments-and-spending-control/ (Part 5 of a series) Browsing again through the various tables of the Budget of Expenditures and Sources of Financing (BESF), a key document submitted by the Department of Budget and Management (DBM) to Congress yearly, I was surprised to see that of the P5.68-trillion proposed budget for 2024, P670 billion of it is for interest payments of our public debt alone, with principal amortization not included yet. This year the interest payments come to P582 billion. This is a huge annual transfer of resources from taxpayers — including taxi drivers and tractor operators — to rich institutional lenders. We have huge annual interest payments because we have huge annual borrowings to cover the huge annual budget deficit due to high expend...

Financing growth: a rice tariff cut, an MUP pension cut, and reforms in excise tax in mining, oil, and coal September 26, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/09/26/547660/financing-growth-a-rice-tariff-cut-an-mup-pension-cut-and-reforms-in-excise-tax-in-mining-oil-and-coal/ (Part 4 of a series) There were lots of business developments last week, but I will comment on just the four issues below. The reports in  BusinessWorld  on each subject will provide more context about the issues: 1. Rice price control and tariff reduction: “DoF defends plan to cut import tariffs on rice” (Sept. 19), “Rice import tariff cuts should not depress farmgate prices — NEDA” (Sept. 20), and, “Key Palace meeting to review rice price controls next week” (Sept. 21). 2. The military and uniformed personnel (MUP) pension reform bill: “Key MUP pension reform clause out” (Sept. 20), and, “House version of MUP reform may still pose fiscal ...

Financing growth: PEB in Qatar and UAE, mining tax, and liberalized wage setting September 19, 2023 | 12:01 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/09/19/546263/financing-growth-peb-in-qatar-and-uae-mining-tax-and-liberalized-wage-setting/ (Part 3 of a series) Last week, the Philippine economic team embarked on more economic diplomacy with two non-deal roadshows in the Middle East. The economic team is composed of Finance Secretary Benjamin Diokno, Budget Secretary Amenah Pangandaman, Economics Secretary Arsenio Balisacan, and Bangko Sentral Governor Eli Remolona. The latter was represented on this trip by Deputy Governor Francis Dakila. National Treasurer Rosalia de Leon also joined the team. ECONOMIC DIALOGUE, PEB IN QATAR, UAE The two major events were the “Philippine Dialogue: Economic Outlook and Opportunities” in Doha, Qatar on Sept. 10, and the “Philippine Economic Briefing” (PEB) in Dubai, United Arab Emirates (UAE) on Sept. 11...