Weaker global growth prospects slash BOP projections; only $9-B FDI seen

By Cai U. Ordinario

On Friday, the Monetary Board approved the new set of BOP projections for 2023 and 2024. The BSP said these projections take into consideration the latest economic developments.

“While some upside risks have been identified, particularly that of China’s economic reopening, the unwinding of supply-side disruptions, and decelerating inflation, downside risks continue to dominate the global and trade outlook particularly in the near term,” the BSP said.

for 2023 was reduced to $15.1 billion from the initial estimate of $17.1 billion.

This adjustment stemmed from the lower projections made for merchandise goods exports and imports, which are now expected to grow by 1 percent and 2 percent, respectively. Initially, goods exports and imports were projected to grow by 3 percent and 4 percent, respectively.

FDI projected lower, at $9B

DATA Lake Inc., a Philippine-based data company, announced its groundbreaking achievements since entering into an official reseller agreement with Space Exploration Technologies Corp. (SpaceX) and Starlink Internet Services Inc. in October 2022.

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“Weak external demand is likely to continue as uncertainties have been amplified by overseas financial system woes in recent months. These developments continue to weigh on the trade and investment prospects in emerging market economies, including the Philippines,” it added.

The BOP deficit is now expected to reach $1.2 billion as of the end of the second quarter of 2023, from the initial estimate of $1.6 billion in the first quarter of 2023.

The current account projection

Bir

By Jasper Emmanuel Y. Arcalas

THE Bureau of Internal Revenue (BIR) conducted back-to-back raids in a warehouse and major supermarkets as it chases a sweetened beverage manufacturer that has at least P800 million in excise tax deficiencies.

T he BIR disclosed that Vermirich Foods Corp. (Vermirich) incurred P800 million in estimated tax deficiencies that include interests, surcharges, fines, and the 12 percent value added tax (VAT) on sweetened beverages it manufactured from 2018 to date.

T he BIR explained that Vermirich “failed to file excise tax returns and pay the excise taxes due on the sweetened beverages they manufactured” during the reference period.

THE country’s net Foreign Direct Investments (FDI) this year is now projected to only reach $9 billion from the initial estimate of $11 billion.

“Emerging market economies are more susceptible to FDI relocation as most rely heavily on capital investment from distant countries. Furthermore, emerging financial market vulnerabilities combined with the after-effects of monetary policy adjustments in advanced economies, such as the US, cast a shadow on the country’s external sec - tor prospects for the year,” the B SP said.

Meanwhile, BSP data showed that the BOP deficit expected for 2024 was unchanged. However, the projection for the current account was reduced to $15.4 billion from the initial estimate of $16.8 billion.

Net FDI next year is now projected to only reach $11 billion from the initial estimate of $12 billion.

Q1 BOP surplus

THE country’s BOP position registered a surplus of $3.5 billion in the first quarter of 2023, higher than the $495-million surplus recorded in the first quarter of 2022.

The BOP surplus increased due to higher net inflows (or net borrowing by residents from the rest of the world) in the financial account amounting to $5.7 billion in the first quarter of 2023 from the $4.7- billion net inflows in the first quarter of 2022.

The current account registered a deficit of $4.3 billion (equivalent to -4.3 percent of the country’s GDP) in the first quarter of 2023, from the $4 billion deficit (equivalent to -4.2 percent of the country’s GDP) in Q1 2022.

“This was due mainly to the widening trade in goods deficit and lower net receipts in the primary income account. This was partly muted by the increase in net receipts in the trade in services account,” BSP said.

The data also showed that the capital account recorded net receipts amounting to $21 million in the first quarter of 2023, a reversal from the $19 million net payments recorded in the same quarter in the previous year. juice beverages manufactured by Vermirich, were in possession of these untaxed goods, which were seized by the Bureau during the raid,” it said.

This was due mainly to the decline in gross acquisitions of non-produced non-financial assets (e.g., patents, trademarks, and copyrights) to $2 million in the first quarter of 2023 from the $42 million comparable figure recorded in the first quarter of 2022.

The financial account recorded net inflows (or net borrowing by residents from the rest of the world) amounting to $5.7 billion in the first quarter of 2023 from net inflows of $4.7 billion in the same period a year ago.

“This was largely on account of the increase in net inflows in the other investment account coupled with the reversal of the portfolio investment account to net inflows. However, this was slightly tempered by the decline in net inflows recorded in the direct investment account,” BSP said.

With this, the country’s gross international reserves (GIR) settled at $101.5 billion as of endMarch 2023, lower than the $107.3 billion level registered as of endMarch 2022.

The peso appreciated against the US dollar by 4.6 percent to average P54.86 to the dollar in the first quarter of 2023, from an average of P57.39 to the greenback in the last quarter of 2022. Meanwhile, the peso depreciated year-on-year by 6.1 percent from an average of P51.53 to the dollar in the first quarter of 2022.

“Sinc e both enterprises possessed the said goods, they failed to exercise due diligence in ascertaining whether the appropriate taxes had been paid by Vermirich on the sweetened beverages in question,” it added.

ABOITIZ Power Corporation has partnered with UnionBank of the Philippines affiliate UBX Philippines Corporation (UBX) to develop a digital mobile application meant to improve the services of the power firm’s distribution subsidiaries.

“Our subscribers can do everything from getting updates about our services, to checking their billing information, to bill payment, thanks to MobileAP and UBX,” said AboitizPower Distribution Utilities Assistant Vice President and Bills-to-Cash Head Arnold Villanueva. “Aside from improving their convenience, we build upon our customers’ trust by providing them with timely and transparent information.”

With BUx, online bank payments and bank transfers can be done in MobileAP. At the same time, transactions are kept track via real-time updates and notifications of credited funds courtesy of MobileAP’s merchant dashboard. Through the app, customers can immediately view and monitor their account for the past 12 months, including their respective power consumption, costs, and payment history. They can also download a pdf copy of their records with their respective AboitizPower distribution subsidiary and even register and manage multiple accounts in a single app.

Customers of the Visayan Electric Company, Davao Light and Power Company, Cotabato Light and Power Company, and the Subic and Lima EnerZones are the distribution utilities of AboitizPower.

AboitizPower is one of the largest electricity providers in the country with a balanced mix portfolio of power generation, distribution, and retail electricity services.

Meanwhile, UBX is the country’s leading open finance platform. Open finance is a system that allows for the secure sharing, accessing, and reusing of financial data for the purpose of seamlessly providing a wide range of financial services. Lenie Lectura

In doing so, Vermirich violated Sections 130, 150-B, 254, and 263 of the National Internal Revenue Code (NIRC) of 1997, as amended, which pertains to the filing and payment of Excise Taxes, according to the BIR. Vermirich also failed to secure the appropriate permit to operate as a manufacturer of sweetened beverage products subject to excise taxes, in violation of Section 154 of the same Code,” it said on Friday.

T he BIR raided Vermirich’s warehouse in Cavite Light Industrial Park on June 14 morning.

F urthermore, the BIR raided three supermarkets—S&R Membership Shopping in Bonifacio Global City, Supervalue Inc. and Super Shopping Market Inc., both in Quezon City—in two days (June 14 and 15) as they were involved in the distribution of untaxed

Vermirich-manufactured products.

The BIR emphasized that the supermarkets could be held liable for selling untaxed sweetened beverages.

T he BIR explained that S&R’s lemon tea and raspberry tea powdered juices, which were manufactured by Vermirich, were “untaxed” leading to the seizure of the products. The S&R supermarket was located at 32nd Street and 5th Avenue, Bonifacio Global City, Taguig.

“BIR records also show that S&R had been duly advised by the Bureau in a letter dated 6 July 2021 to comply with the regulatory requirements,” the BIR said.

As the distributor of Vermirich’s products, S&R failed to exercise due diligence in ascertaining whether the appropriate taxes had been paid by Vermirich on the sweetened beverages in question,” the BIR added.

The BIR said the S&R “can be held liable for violations of Section 4, Revenue Regulations

No. 20-2018, and Sections 130, 150-B, and 263 of the NIRC [National Internal Revenue Code].”

Supervalue, Super Shopping

MEANWHILE , the BIR said the raids on Supervalue and Super Shopping stemmed from the discovery of numerous boxes of SM Bonus Apple Juice Drink and SM Bonus Orange Juice Drink in the warehouse of Vermirich during the June 14 raid.

“S upervalue and Super Shopping Market, as distributors of SM Bonus Apple Juice Drink and SM Bonus Orange Juice Drink, both of which are ready-to-drink

L ike S&R, the Supervalue and Super Shopping Market could be held liable for violating the country’s tax rules and regulations, according to the BIR. “ The Bureau will continue to look into other manufacturers of sweetened beverages to determine whether they have secured the appropriate permits to produce such goods and paid the correct excise taxes thereon,” it said.

“Every effort is being made to emphasize the impact of tax evasion and illicit trade on the Bureau’s revenue collections, and on the national economy,” it added.

The BIR pointed out that it conducted the enforcement operations to “emphasize” the gravity of the “offenses” committed by Vermirich, S&R and Supervalue.

The objective is to highlight the impact of tax evasion and illicit trade on the Bureau’s revenue collections, and on the national economy,” the BIR said.