Full liberalization of RE market sought

The incoming Marcos administration should consider the full liberalization of the renewable energy (RE) sector as part of the government’s efforts on climate change mitigation, Socioeconomic Planning Secretary Karl Kendrick T. Chua said.

“We are trying to fully liberalize all renewable energies; tidal, solar, and wind. In fact, the Economic Development Cluster has a resolution pushing for that. That will, I think, create a better balance between the dirty sources of energy and the cleaner ones,” he said at a briefing on Monday.

Energy officials previously said new laws may be needed to relax the foreign ownership restrictions for wind and solar projects.

In 2020, the power generation mix in the Philippines was 57% from coal-fired facilities, 21% from renewable energy, 19% from natural gas, and 2% from oil.

Mr. Chua, who steps down from his post on June 30, also expressed support for the new law aimed at regulating and developing the country’s electric vehicle (EV) industry.

“(The) electric vehicle law which will help us shift to cleaner electric vehicles rather than gasoline or diesel ones,” the National Economic and Development Authority (NEDA) director-general said.

Mr. Chua also backed the imposition of a tax on single-use plastics.

The Department of Finance (DoF) had proposed a P20 excise tax per kilogram of single-use plastics under package 1 of the fiscal consolidation plan, which is aimed at generating fresh revenues amid the country’s record-high debt.

During the same briefing, NEDA Undersecretary of the Regional Development Group Mercedita A. Sombilla presented recommendations to accelerate climate action, such as ensuring new programs and policies “support climate-resilient and low-carbon development,” and boost awareness on climate change in local communities.

She also proposed scaling up mobilization of climate finance and strengthening institutional capacity to track these climate finance flows.

“The tight fiscal space does not preclude the government from implementing climate change adaptation and mitigation actions,” Ms. Sombilla said.

“While we’ve continued to make use of government’s limited resources to fund development projects including infrastructure, social protection, and agriculture, we can already make adjustments as early as the design phase to make the projects more climate and disaster resilient without incurring significant additional economic costs due to avoided losses and damage.”

Ms. Sombilla said the government can also maximize the benefits of these projects by reducing or eliminating any greenhouse gas emissions.

Under the Paris Agreement, the Philippines committed to reduce greenhouse gas emissions by 75% by 2030.

The Philippines is ranked fourth most affected by impacts of climate-related extreme weather events, according to the 2021 Climate Risk Index.

“There are many things that do not require money, but a change of behavior and a better understanding of the consequences of inaction,” Mr. Chua said.

Climate change and smart infrastructure are expected to be part of the next Philippine Development Plan, which will be crafted under the next Socioeconomic Planning Secretary Arsenio M. Balisacan.

“Secretary Balisacan really recognized this because he has been alluding to including climate change as a particular challenge in all the development activities that we will be doing,” Ms. Sombilla said.

NEDA’s climate change priorities also include helping local government units develop climate-risk informed local land use and development plans, and pushing for the passage of the National Land Use Act.

Source: bworldonline

New taxes needed, Balisacan says

New taxes may have to be introduced to fund the incoming Marcos administration’s priority projects, but the timing would have to be carefully considered, Socioeconomic Planning Secretary-designate Arsenio M. Balisacan said.

“If you want more public services, if you want to invest a lot into our health and education, and social sector, and to our farmers, you must have sources of money for that. Obviously, you can only go so far with an improved tax administration,” he said.

Asked if new taxes would be introduced in the next six years, Mr. Balisacan replied: “I think we should. Part of the fiscal consolidation is to eventually also come up with new sources of tax.”

Incoming Finance Secretary Benjamin E. Diokno has said that he wants to avoid new taxes for now, preferring to focus on improving tax administration via digital processes.

The main issue, Mr. Balisacan said, would be timing the imposition of new taxes, especially with the country still recovering from a pandemic-induced recession.

“You don’t want to raise, I suppose, taxes when economic conditions are difficult,” the incoming National Economic and Development Authority (NEDA) director-general said.

Economic managers are aiming for a 7-8% gross domestic product growth this year, but high inflation threatens to slow the country’s recovery.

The Bangko Sentral ng Pilipinas last week raised its average inflation forecast for this year to 5% from 4.6% previously, well above the 2%-4% target band.

The Department of Finance (DoF) last month unveiled a fiscal consolidation plan which aims to raise an average of P284 billion in fresh revenues every year for the next 10 years to repay the P3.2-trillion additional debt incurred during the pandemic.

The plan involves new tax measures such as value-added tax (VAT) on digital service providers; excise tax on single-use plastics, motorcycles and luxury goods; and tax on gaming and cryptocurrency.

Mr. Balisacan noted that some sectors are still undertaxed.

“I suspect that mining is one [where] there are scopes for improving the royalty that can be charged to ensure that these mining resources are properly managed and sustained,” he said.

As part of the first package of the fiscal consolidation plan, the DoF also proposed establishing a single and rationalized fiscal regime applicable to all mining agreements. The DoF estimates this will generate P11.4 billion on average per year.

Mr. Balisacan said the government should consider pollution tax and more “sin” taxes.

“For example, I don’t understand why luxury vehicles are taxed so low, even vehicles are taxed so low, compared to our neighbors. And I think that while we’re trying to address transport issues, public transport issues, that should be part of the solution rather than just building more skyways,” he said.

The Duterte administration has managed to pass the initial packages of its comprehensive tax reform program, which involved lowering personal income tax, tax amnesty for delinquent taxpayers and higher sin taxes on cigarettes, heated tobacco products and alcoholic beverages.

Also approved was the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which cut corporate income tax.

However, reforms in real property valuation and passive income taxation failed to hurdle Congress.

“Congress didn’t have the appetite for it, for the other components of the reform. Now it’s the burden of this new administration to complete these other components. My colleague (Mr. Diokno) said that we need to study our options…address all these fiscal issues to ensure that the growth will be sustainable,” Mr. Balisacan said.

Source: BusinessWorld

France seeking to expand trade, investment with PHL

France has identified the Philippines as a “priority area” for expanding trade and investment, its ambassador to Manila said.

“Economic development and economic relations between our two countries are extremely important,” French Ambassador Michèle Boccoz said at a ceremony marking the 75 years of diplomatic relations between the two countries on Wednesday.

“Our companies are really willing to be more active and more present, and we hope that more Filipino companies will invest in France, and (for) more Philippine cooperation in France and more trade,” she added.

Foreign Affairs Deputy Assistant Secretary Rosario P. Lemque said diplomats, officials, and members of the private sector from both countries “will work together in several areas of mutual interest, build cooperation in these areas, and collaborate to develop and advance this cooperation with the aim of building resilient lives for a stronger Philippines and stronger France, despite some ongoing realities in international relations, and what everyone hopes to be the tail end of the pandemic.”

She noted various agreements in the pipeline involving defense, tourism, and cybersecurity.

The French ambassador said energy was an area of interest, noting the need for both countries to be assured of cheap energy sources.

Renewable energy and other non-polluting energies that do not worsen greenhouse gas emissions are also under discussion, she added.

Ms. Boccoz also sought increased bilateral defense and maritime cooperation.

Infrastructure through public-private partnerships were also of interest to the French, calling this a “new way” of working with the Philippines.

France is also interested in agricultural collaboration to address food security concerns due to “the impact of the Ukraine conflict on food prices, and also on supply chains and general capacity.”

Companies from the electronics and pharmaceuticals sector can also meet to build partnerships, Ms. Boccoz said.

Diplomatic relations between the Philippines and France began in 1947 after a Treaty of Amity was signed in Paris.

Source: BusinessWorld