MULTIMEDIA

Economy reaps gains, pains of record growth pace

ABS-CBN News

Posted at Jul 18 2018 04:02 PM | Updated as of Jul 18 2018 04:56 PM

MANILA -- President Rodrigo Duterte delivers his third State of the Nation Address (SONA) on July 23, with a number of his priority economic measures starting to take hold.

As the economy outpaces the rest of the world, however, the government is also grappling with the cost of growth -- rising prices and a depreciating peso.

The President's economic managers addressed these concerns in a pre-SONA briefing, saying inflation would taper off by the year-end and a weak peso is "net positive."

Here are the key economic issues that loom over Duterte's third annual address to Congress.

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TRAIN IMPACT KICKS IN

Higher taxes on fuel, sugar-sweetened drinks and cars took effect last January 1 under the first tranche of TRAIN or the Tax Reform for Acceleration and Inclusion.

Economic managers are pushing for the second tranche, which seeks to update corporate incentives.

PRICE SPIKES TAPERING OFF

The President is set to certify as urgent a bill that will impose tariffs on rice in place of import quotas as part of government measures to bring down prices of the staple.

Inflation has held at its highest in 5 years, but economic managers said the increases would taper off by the end of the year.

'ENDO' CRACKDOWN CONTINUES

The Department of Labor earlier in July asked condiments maker NutriAsia to regularize 80 workers, after issuing similar orders to Jollibee and PLDT Inc that covered thousands.

Duterte promised during the campaign to stop the hiring of workers in 5-month-long cycles, which companies had long abused to avoid paying benefits due to regular workers.

On Labor Day, he signed an executive order that will stop illegal contractualization.

WINNERS AND LOSSES WITH PESO AT P53:1

Duterte's economic managers insist, a weak peso will increase the value or dollar remittances from abroad, and improve the spending power of their families back home.

Cebu Pacific and Philippine Airlines have sought the reimposition of a surcharge on fuel, illustrating how a weak currency hurts importers who transact using dollars.

Analysts said it could also pad the cost of financing dollar-denominated debt.

'NO MORE WAITING'

Duterte in May signed the Ease of Doing Business Act, requiring government agencies to act on applications within 3 days for simple transactions, 7 days for complex ones and 20 days for the highly technical.

He also signed laws that extended the validity of passports to 10 years, and driver's licenses to 5 years.