Budget and Taxes

Global Philippines: The successful FIBA hosting in Manila and the OGP Summit September 12, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/09/12/544853/global-philippines-the-successful-fiba-hosting-in-manila-and-the-ogp-summit/   Last week, two important global events concluded successfully. One was the final games of the Fédération Internationale de Basketball Amateur (FIBA) World Cup, last Sunday, Sept. 10. The second was the Open Government Partnership (OGP) Global Summit in Estonia last Sept. 7.... IMMEDIATE, SHORT-TERM BENEFITS OF HOSTING FIBA Here are the main beneficiaries of hosting FIBA: private sector economic players. The first beneficiaries were the three arenas or stadiums where the games were played — Philippine Arena in Bulacan, the MOA Arena in Pasay City, and the Araneta Coliseum in Quezon City. Ticket prices were high, and attendance was high only during the opening games, the semi-finals, and the finals. Th...

High inflation with high growth, the case of the Philippines, Indonesia and India September 7, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/09/07/544051/high-inflation-with-high-growth-the-case-of-the-philippines-indonesia-and-india/ One concept or theory in economics related to inflation and growth is the Philips Curve. It says that there is an inverse relationship between inflation and unemployment, so high inflation leads to low unemployment and, by extension, high growth because high growth leads to more job creation and hence, low unemployment. This is not a rock-solid economic law or theory, unlike the law of supply and demand and price movement, and the law of diminishing marginal utility or revenue, with almost 100% accuracy and predictability. But somehow the Philips Curve theory seems to apply in the current situation of the Philippines, Indonesia, and India. The Philippine Statistics Authority (PSA) reported last Wed...

Financing Growth: reforms in government procurement, MUP pension, and infrastructure August 31, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/08/31/542315/financing-growth-reforms-in-government-procurement-mup-pension-and-infrastructure/ (Part 2) There were a number of important development in government fiscal reforms recently. I will focus on three areas: government procurement reforms, military and uniformed personnel (MUP) pensions, and infrastructure. See these recent reports in  BusinessWorld , mostly written by Luisa Maria Jacinta C. Jocson and Keisha B. Ta-asan: Budget and procurement : “Easier procurement rules seen curbing underspending” (Aug. 15), “Diokno: Tuition-free college education ‘unsustainable’” (Aug. 20), “DBM chief says Q2 GDP growth would have been higher if not for gov’t underspending” (Aug. 21), “Infra law TRO ban applicable to all procurements — DBM” (Aug. 29), “DBM urged to reconsider ‘no TRO’ propo...

Some trends in de-dollarization and implications for developing countries August 24, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr.  https://www.bworldonline.com/opinion/2023/08/24/541229/some-trends-in-de-dollarization-and-implications-for-developing-countries/   De-dollarization is the process of countries slowly moving away from using the US dollar. Two ways they do it, via central banks reducing their US dollar reserves in favor of gold and other major currencies, and using currencies other than the US dollar to settle some international payments in trade, tourism and so on. Since around the middle of 2022, the term “de-dollarization” has been cropping up more often. For instance, here are some reports and opinion pieces that came out this month: “US dollar’s decline could benefit Asian economies” ( Asia Times , Aug. 4), “De-dollarization: Why countries are seeking alternate currencies” (CGTN, Aug. 5), “De-Dollarization: What Is It, and Is It Happening?” (In...

Financing growth August 22, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/08/22/540822/financing-growth/ (1st of a series) This column will produce a new series on Financing Growth. The take-off point is the successful UP School of Economics program in development economics alumni association homecoming lecture last Saturday titled “A Conversation with finance and budget secretaries on financing sustained economic growth.” Finance Secretary Benjamin E. Diokno and Budget Secretary Amenah F. Pangandaman discussed the recent and medium-term economic performance and targets of the economic team and Marcos administration. GDP GROWTH IN Q2 2023 Of the top 50 largest economies in the world in GDP size in 2022, 32 have reported their second-quarter 2023 GDP data. The top three fastest-growing in the first half or average for Q1 and Q2 2023 were the United Arab Emirates (UAE), Philippines and China. But UAE and China have fast growth in ...

GDP growth resilience, and the finance and budget lecture at the PDE reunion August 15, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/08/15/539530/gdp-growth-resilience-and-the-finance-and-budget-lecture-at-the-pde-reunion/ Last week the Philippine Statistics Authority announced that the GDP growth in the 2nd quarter (Q2) of 2023 was 4.3% — lower than the Q1 growth of 6.4%, and lower than the 6% expected by most economists. I myself projected growth of 6%, having forgotten to consider the base effect of high government and household spending in the Q2 2022 election period. Nonetheless, some articles quickly appeared that bashed the 4.3% growth. One paper suggested that Philippine growth is grinding to a “halt,” which is intellectually dishonest. In Q2 2023, Europe’s top two largest economies, Germany and the United Kingdom (UK) had GDP performances of -0.2% and 0.4%. ASEAN’s richest economy, Singapore, grew by 0.5% while South K...

On ratings upgrades and the budget of state universities August 10, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/08/10/538725/on-ratings-upgrades-and-the-budget-of-state-universities/ Last Monday, Rating and Investment Information, Inc. (R&I), a Japan-based debt watcher, affirmed the Philippines’ investor-grade credit rating at “BBB+” and revised its outlook from stable to positive. The Finance department attributed this good news “to the country’s robust macroeconomic fundamentals, improving fiscal position, sound banking system, comfortable external payments position, and stable political environment,” explaining that “A ‘BBB+’ rating is two ranks higher than the minimum investment grade and just one notch below the ‘A-’ rating.” On May 22, the Philippines also earned a ratings upgrade from Fitch, with the outlook moved from “negative” to “stable.” The Philippines’ rating remains at “BBB,” considered “investment grade” an...

Inflation deceleration, G7 deindustrialization, and deficit reduction August 8, 2023 My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/08/08/538237/inflation-deceleration-g7-deindustrialization-and-deficit-reduction/ Last week, there was a piece of good news reported by the Philippine Statistics Authority — the inflation rate has significantly declined, from 8.7% last January down to 5.1% last June, and only 4.7% in July. The Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO), headed by the Secretaries of Finance, the National Economic and Development Authority (NEDA), and Budget, is working. Continuing this column’s inflation monitoring of major economies of the world and Asia, I note that the average inflation rate of the Philippines in January-July 2023 is 6.8%, still high but not as bad as that in the UK, Italy, and Germany which range between 7-9%. I checked food inflation in particular and saw that a surprising trend is that all...

Debt service, sustained growth, and the PDE alumni homecoming August 1, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/08/01/536872/debt-service-sustained-growth-and-the-pde-alumni-homecoming/   During the post-State of the Nation Address (post-SONA) Philippine Economic Briefing (PEB) last week, July 25, at the Philippine International Convention Center, Finance Secretary Benjamin Diokno expressed continued optimism saying that “Higher economic activity and increased investments will bring us to even greater heights. The policy environment for foreign direct investments is the most open and liberal it has ever been.” On the Maharlika Investment Fund (MIF), Secretary Diokno said “the MIF is expected to widen the fiscal space and reduce reliance on official development assistance (ODA) in funding big-ticket infrastructure projects.” Right on, Sir. Budget Secretary Amenah Pangandaman was not there as she was presenting the Natio...

SONA 2023: investments, revenues and climate July 27, 2023 | 12:02 am My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/07/27/536090/sona-2023-investments-revenues-and-climate/ During his second State of the Nation Address (SONA) on Monday, July 24, President Ferdinand R. Marcos, Jr. highlighted economic recovery via high GDP growth, increasing the employment rate, investments, revenues, and spending on agriculture modernization; the decrease in inflation rate, other economic factors. For this piece, three subjects will be tackled — investments, revenues, and climate change. Note also that this month, this writer has made a four-part assessment of the economic performance of the administration’ first year: budget deficit and employment (part 1), inflation and interest rates (part 2), trade and investments (part 3), and overall GDP and agriculture (part 4). INVESTMENTS AND MAHARLIKA FUND The President said in his SONA, “For strategic financing, some...