Economic news that matters

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, the Personal Equity and Retirement Act (PERA) will be available next year as authorities approved the Act's implementing rules. Under the law, individuals can set aside as much as Php100,000 a year in a PERA account, which will be invested in a wide range of instruments. The interest income will be tax-exempt.

Also, rural banks seek refinements to certain proposed amendments to the Bangko Sentral ng Pilipinas Charter as it might undermine the small lender's competitiveness. According to Rural Bankers Association of the Philippines President Omar Andaya, rules on stricter capitalization requirements may be harder for rural banks, which usually serve markets like the agricultural sector and small businesses.

According to the Finance department, the Php237.5-billion budget deficit as of September make up for the 95 percent of the full-year target. The results bolstered the expectations that the 2009 shortfall would breach the Php250-billion ceiling. The result was also more than four times the Php53.4-billion shortfall recorded in the same period last year.

 Furthermore, the country's external payments continued to improve last month due to sustained growth of OFW remittances and proceeds from foreign aid loans. The country's balance of payment (BOP) reached US$502 million in September, better than the US$53-million surplus recorded in August and a turnaround from a deficit recorded in the same period last year. Likewise, the Energy Department is considering setting price caps on petroleum products, citing petitions for cheaper fuel in the wake of the two recent calamities.

Per same published report, better inflow of remittances may persuade the World Bank to upgrade its economic forecast for the Philippines. Remittances, a main driver of domestic consumption, appears to be growing by at least 2 percent from last year. World Bank's original forecast sees the economy to contract by 0.5 percent this year.

Moreover, the Philippine Exporters Confederation expects positive growth for 2010 from this year of about 10 percent for both merchandise and service exports. The positive prospect is aligned with a recovery of the global economy.

The recent United Nations Commission on Trade and Development report reveals that the withered shares of the US in the market for information and communications technology services has pulled down countries, including the Philippines. 

Lastly, the Bangko Sentral ng Pilipinas Monetary Board has approved a loan worth about US$163 million from the Japan International Cooperation Agency aimed at helping farmers and the small business agriculture sector. The assistance is part of a long-running aid program of the Japanese government for the Philippines, according to IDEA.

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