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A2 Friday, August 5, 2022
Standoff at PEZA as execs clash over Palace circular, DTI’s order By Andrea E. San Juan
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HE standoff continues at the Philippine Economic Zone Authority (PEZA), where the officer-in-charge named by the Department of Trade and Industry (DTI) allegedly ordered the padlocking of the office of former PEZA chief, Charito B. Plaza, who insists that she is following Malacanang’s order that says all incumbent officials who are holdovers will stay at their posts until yearend. The DTI on Thursday told Plaza, however, that the law allows the new DTI chief to designate an officer-in-charge (OIC) in PEZA. In a letter addressed to Plaza, Trade Undersecretary Herminio C. Bagro III replied to the former’s letter to Trade Secretary Alfredo E. Pascual on August 2, where she questioned the DTI's interpretation of Memorandum Circular (MC) numbers 1, 2 and 3 issued by Malacañang. "While a government instru-
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mentality exercising cor porate powers like PEZA seems to be covered by RA [Republic Act] 10149, Section 4 explicitly excludes economic zone authorities from its coverage,” Bagro’s letter read. The Trade official noted that Plaza may have overlooked an "important provisio" in MC 3, which declared that MC 1 does not apply to government-owned and -controlled corporations (GOCCs). Bago said MC 3, item 3 indicated that GOCCs will continue to be governed by their respective charters, articles of incorporation and by-laws in relation to RA 10149 or the GOCC Governance Act of 2011. “In fact, the Governance Commission on GOCC, in a 2014 Memorandum Circular, confirmed that the PEZA DG position was indeed excluded from the coverage of the law,” he said.
Meanwhile, in a statement on Thursday, Plaza stood her ground, saying she will only follow the decision of the Office of the Presi-
dent (OP) on the confusion that emerged from the memoranda issued by the OP—MCs 1 and 3. The former PEZA chief noted that she still heads PEZA on a holdover capacity as shown by MC 3 which was issued on July 27 that superseded MC 1 which was earlier issued on June 30. “MC no. 1 and this Memor a ndu m C i rc u l a r i n sof a r a s they declared certain positions vacant and prov ided for the rules to address the vacancies, do not apply to governmentowned or -controlled cor porations (GOCCs), government instrumentalities with corporate powers, government cor porate entities, and gover nment fin a nc i a l i n s t it ut ion s , w h ic h shall continue to be governed by their respective charters, articles of incor poration and by-laws in relation to Republic Act 10149 or the GOCC Governance Act of 2011." MC 1 was described by Plaza as “vague” because PEZA could be one of the GOCCs or government
instrumentalities and is therefore exempted. According to Plaza, PEZA is a government instrumentality with corporate powers. She said that MC 3 showed that the incumbent DG “still stays on a ‘holdover capacity unless there is a new appointee or appointed OIC’”. For its part, the PEZA Employees Association, in a statement on Thursday, emphasized that this issue has been dragging since last week and has greatly affected the employees of PEZA and the image of the agency. “Let it be known that PEZAEA is always on the side of the truth and for the service of PEZAns, ecozone locators, and Filipino people. We strongly refute former DG Plaza’s statements in the press conference, and PEZAEA is deeply disheartened with the said allegations. The accusations are reprehensible, unfounded, and inconsiderate for failing to recognize the dedication, dignity, and honor of PEZA employees,” said PEZAEA.
Part of these long-term measures, University of the Philippines School of Economics Director for Research Renato E. Reside Jr. said, includes addressing the country's infrastructure
constraints. “Long-term solutions to address supply and logistics issues could be to develop more ports—and indeed more of hard infrastructure in the
country, not just airports and seaports, also roads, bridges, etc.,” Reside said. Reside said logistics issues are broad and can cover everything from the fragmentation of the world into various trade blocs that have lesser trade now than before the pandemic, to the congestion of ports caused by the shutdown to prevent the spread of Covid-19 and the lack of truck drivers. Persistent challenges in the logistics sector will ultimately lead to higher inflation. Reside explained that congestion slows the movement of goods and drives the cost of deliveries higher. This has led to rising costs of these goods as well as the containers used to ship them globally. The increase in the cost of containers, Reside noted, has been particularly dramatic due to the congestion. “Part of the congestion can be traced to the relatively strong US economy, which the Fed is now trying to slow down,” Reside told the BusinessMirror on Thursday. The decision of monetary authorities to raise interest rates in order to stem inflation leads to undesirable consequences such as an increase in unemployment, according to the local economists. However, Ang said it was difficult to say how the recent central bank pronouncements w ill impact unemployment, given that firms are still recovering from the pandemic. “As demand continues to increase, so will firms continue to hire or maintain activities,” Ang said. “Although, the highest cost of money may affect [the] expansion plans [of firms].” Reside said the aim of rate hikes is to forestall increases in inflation as well as inflation expectations. However, these undermine consumption and economic growth. Nonetheless, he said, the decision to raise interest rates was made by the BSP and other monetary authorities to soften the impact of ongoing crisis to economies like the Philippines. “The ultimate aim is to support growth and to prevent a larger problem and a harder landing for our economy. Ultimately, the rate hikes are meant to reduce the persistence of unemployment,” Reside said. Medalla said they are looking at revising their current forecast of 4.3 percent downward nearer the ceiling of their 2 to 4 percent target range. (Story here: https://businessmirror.com. ph/2022/08/03/bsp-chief-sees-local-priceseasing-in-2023/) The PSA will release the official inflation estimates for July on Friday while the National Income Accounts for the second quarter as well as the results of the latest Labor Force Survey will be released next week.
Plaza stands ground
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Romua ldez was refer r ing to these priority measures: (1) The Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act; (2) Valuation Reform Bill; (3) Passive Income and Financial Intermediary Taxation Act or PIFITA; (4) E-Government Act; (5) Internet Transaction Act or E-Commerce Law; (6) National Land Use Act; (7) Enactment of an Enabling Law for the Natural Gas Industry; (8) Amendments to the Electric Power Industry Reform Act; and (9) Amendments to the Build-Operate-Transfer (BOT) Law. “In fact, I am hopeful that we can approve most of these measures before the year ends,” Romualdez said. “One thing I assure you, though. As stakeholders, you will be consulted in every measure that we tackle, especially those involving commerce and industry. Please make your positions very clear on the issues I mentioned earlier as I want all stakeholders to be heard before we pass these measures,” he added.
Fiscal framework adopted
The Lakas-CMD President said PCCI’s invitation also came at an opportune time as the House adopted last Monday Concurrent Resolution No. 2, which expresses the chamber’s full support to the Medium-Term Fiscal Framework (MTFF) crafted by the administration of President Marcos. “I dare say that the adoption by Congress of the MTFF Concurrent Resolution is a historic one,” Romualdez said. “To my knowledge, this is the first time that our legislators fully committed themselves to a medium-term fiscal plan that will serve as anchor for the annual spending and financing plan of the national government. This— the Medium-Term Fiscal Framework—will serve as our guide in preparing the annual budget for the next six years,” he said. The Marcos administration designed the 2022-2028 Medium-Term Fiscal Framework to
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According to Romualdez, lawmakers and the economic team discussed the recently adopted House Concurrent Resolution 2 supporting the Medium-Term Fiscal Framework (MTFF) of the Marcos administration. “We had a brief discussion on the Medium-Term Fiscal Framework designed by the administration of Ferdinand Marcos, Jr. The House leaders reiterated our chamber’s decision, as contained in House Concurrent Resolution No. 2, to extend full support to the six-year fiscal plan,” he said. The House on Monday adopted, by viva voce voting, House Concurrent Resolution No. 2, a resolution supporting the 20222028 Medium Term Fiscal Framework (MTFF) of the National Government. “We agree on one thing: the MTFF should be a fiscal consolidation and resource mobilization plan,” he said. “The objective: in the short run, keep the macroeconomy stable and provide adequate social services; in the medium term, generate more jobs, quality jobs, green jobs,” Romualdez added. “I appreciate the gesture of Finance Secretary Ben Diokno to invite the leaders of the House of Representatives to his new office,” said Romualdez, adding, “This gave us an opportunity to discuss, among others, ways on how to forge tighter coordination and smooth working relationship
attain short-term macro-fiscal stability while remaining supportive of the economic recovery and promoting medium-term fiscal sustainability. It aims to reinvigorate job creation and poverty reduction by steering the economy back to its high-growth path in the near term and sustain the high—but inclusive and resilient—growth all through 2028. “The philosophy is simple: efficient collection of taxes especially under a strong economy ensures adequate funding for government programs. In simple terms, the MTFF is a fiscal consolidation and resource mobilization plan. The objective: in the short run, keep the macroeconomy stable and provide adequate social services; in the medium term, generate more jobs, quality jobs, green jobs,” Romualdez explained. “We, in the House of Representatives, not only support the MTFF. We are also aligning Congressional initiatives with the economic recovery programs of the National Government,” he added. The framework contains an eight-point Socioeconomic Agenda aimed towards immediate job creation and poverty reduction. These include attaining food security; reduction of transport and logistic costs; reduction of energy cost to families; addressing public health concerns; strengthening of social protection programs; return to faceto-face classes; enhanced bureaucratic efficiency; and sound fiscal management. The MTFF also sets macroeconomic targets for the next six years, as follows: (1) 6.5- to 7.5-percent GDP growth in 2022 and 6.5- to 8-percent annual GDP growth from 2023 to 2028; (2) 9-percent poverty rate by 2028; (3) 3-percent national government deficit by 2028; (4) Less than 60-percent debt-to-GDP ratio by 2025; and (5) Upper middle-income country status for the Philippines, with each Filipino earning at least 4,046 US dollars per year. Romualdez also said he will engage PCCI in serious discussions on how the government and private sector can work together to give flesh to the administration’s economic agenda. between the Executive and the Legislative departments.” “Our discussion with Secretary Diokno was a fruitful one, and we hope to conduct future consultations with him in the days to come,” Romualdez said. Quimbo has said that HCR 2, which is based on the national government's annual spending and financing plan, should serve as a guide for Congress in preparing the annual budget. The 2023 national budget is expected to be submitted to Congress on August 22. “It is important that congressional initiatives are aligned with the economic recovery programs of the government. After two years of the pandemic, the country is gradually moving towards economic recovery,” she added. For his part, Salceda, said it is critical that the legislative agenda be guided by targets contained in the 2022-2028 MTFF, with the concurrence of the House and Senate. HCR 2 provides that the Marcos administration design the MTFF to attain short-term macrofiscal stability while still supporting economic recovery and promoting medium-term fiscal sustainability. With this, the measure states that the proposed strategies for economic managers are 1) nearterm socioeconomic agenda, which would continue to implement risk-managed interventions, and 2) med ium-ter m socioeconomic agenda, which would create more, high-quality, and green jobs for Filipinos. Jovee Marie N. dela Cruz
