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Slower Q2 growth as inflation bites
The economy may have slowed further in the second quarter, private economists said, as persistent inflation and higher interest rates continued to affect consumer spending. Forecasts in the survey conducted by Daily Tribune spanned from 5.6 percent to 6.1 percent, yielding a median estimate of 5.9 percent gross domestic product, or GDP, growth from April to June this year. The economy grew by 6.4 percent in the first quarter, the weakest growth rate since the first quarter of 2021, when it contracted by 3.8 percent. This year’s first quarter growth is slower than the 8 percent increase in the same period last year and the 7.1 percent growth in the preceding quarter. The Philippine Statistics Authority is scheduled to report the second quarter GDP growth data on Thursday, 10 August. Security Bank: 6.1% growth Security Bank’s senior assistant vice president and chief economist Robert Dan Roces expects the Philippine economy to grow by 6.1 percent in the second quarter. He added growth may have been driven by the still robust consumer spending and improved exports. “Private investments continued in the second quarter, supporting economic activity, while low government consumption served as a dampener,” Roces said in an emailed commentary. “The downside risks to growth include the risks to sticky inflation, elevated interest rates, and weaker global economic growth,” Roces added. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., who predicted a 6 percent growth, noted the stronger consumer spending and election-related expenditure amid easing pandemic restrictions, but not without flagging the impact of inflation in the second quarter. He also said that the lower individual income tax rates that went into effect earlier this year might have caused the increase in consumer spending. “Lower individual income tax rates starting January 2023 for most income brackets as part of the TRAIN Law, could lead to increased consumer spending, which accounts for at least 75 percent of the economy, and, in turn, lead to faster economic growth,” Ricafort told Daily Tribune in a Viber Message. China Banking Corp. chief economist Domini Velasquez expects a 5.9 percent GDP growth due to some factors, including higher inflation, which could have offset post-pandemic spending, and lukewarm government spending. “We saw substantial increases in infrastructure spending, but both PS and MOOE growth remained lukewarm,” Velasquez said in a Viber message. “There is a need to hasten government spending in identified agencies lagging behind.” Moving forward, Velasquez expects continued moderation in economic activities as elevated policy rates impact business and household spending. In the third quarter of this year, Velasquez expects the country’s economy to grow to around 5.5 percent and full-year growth to average 5.8 percent, just shy of the government’s 6.0 percent low-end target. In a virtual briefing last 19 July, First Metro Investment Corp. and the University of Asia and the Pacific that the Philippine economic growth likely slowed to 5.6 percent in the second quarter. “I do expect a slowdown in the second quarter to 5.6 percent,” UA&P economist Victor Abola said in the virtual briefing. “It’s really the carryover of inflation to the second quarter; even though it’s lower, people are still a bit more reluctant,” he added. While consumption is expected to slow down in the second quarter, Abola expects a rebound in the second half of the year. The post Slower Q2 growth as inflation bites appeared first on Daily Tribune......»»
Inflation slowdown prods loans appetite
Economists expect the demand for loans to rise this year as inflation has eased further and prospects of stable interest rates strengthen. Inflation slowed further to 4.7 percent in July from 5.4 percent in June and the peak of 8.7 percent in January due to cheaper prices of food, housing, fuels and utilities, data from the Philippine Statistics Authority revealed. However, prices in restaurants and accommodations increased to 10.1 percent from 9.8 percent in Metro Manila. Growth was likely brought by high demand for food services, which signals strong financial capacities among consumers. “Strong demand from consumers is probably preventing this from falling faster as they continue to spend heavily on these services after the pandemic,” Jun Neri, chief economist of Bank of the Philippine Islands, said. In a text message to the Daily Tribune, BDO Unibank Inc.’s official statement added that “loan demand may be driven more by consumer demand and potential infrastructure projects.” Prices of most goods and services or core inflation, which excludes volatile items like food and gas, fell to 6.7 percent from 7.4 percent. With the possible inflation downtrend, economists said consumers could have more money to spend and commercial banks could charge more manageable costs of borrowing based on the policy rate of Bangko Sentral ng Pilipinas or BSP. “The current path of inflation gives BSP the space to keep rates steady until the end of the year,” Neri said. 2% to 4% inflation BSP aims to pull inflation within the range of 2 percent and 4 percent this year by adjusting its policy rates. Its Monetary Board will announce its next move on 15 August after keeping the rate at 6.25 percent. While BSP often matches the move of the US Federal Reserve, which increased its rate by 0.25 basis point last month, local economists said imposing several hikes this year is unlikely despite possible higher inflation from costlier food prices caused by the recent typhoon and El Nino. Neri said these weather disturbances could reduce food supplies, especially rice and increase their prices through weaker agricultural production and less imports. “El Nino is a global phenomenon that could affect the food production of other countries. India recently announced a ban on the export of non-basmati white rice, while a Thai government agency has encouraged farmers to plant less rice to save on water,” he said. Dan Roces, chief economist of Security Bank Corp., believed a likely small increase in BSP policy rate would be enforced this year as bank executives wait for its full disinflationary effect. “With this, loan rates and demand may still exhibit some growth as monetary policy operates with a lag. A pronounced slowdown in loans, if any, may occur in 2024 should monetary policy remain elevated for long.” Michael Ricafort, chief economist of Rizal Commercial Banking Corp., added that stable rates for this year is possible as long as there will be no major negative turns in the economy. “The markets recently priced in lower odds of another 0.25 Federal Reserve’s rate hike for the rest of 2023, thereby supporting a possible pause on Fed and local policy rates, as supported by inflation moving closer to the inflation target of the central banks for both countries.” The post Inflation slowdown prods loans appetite appeared first on Daily Tribune......»»
Phl economic growth may slow in Q2
The Philippine economy may have slowed further in the second quarter of 2023, private economists said, as persistent inflation and higher interest rates continue to affect consumer spending. Forecasts in the survey conducted by Daily Tribune spanned from 5.6 to 6.1 percent, yielding a median estimate of 5.9 percent gross domestic product (GDP) growth from April to June this year. For context, the Philippine economy grew by 6.4 percent in the first quarter, the weakest growth rate since the first quarter of 2021, when it contracted by 3.8 percent. This year's first quarter GDP growth is slower than the 8 percent increase in the same period last year and the 7.1 percent growth in the preceding quarter. The Philippine Statistics Authority (PSA) is scheduled to report the second quarter GDP growth data on Thursday, 10 August. Security Bank's Senior Assistant Vice President (SAVP) and Chief Economist Robert Dan Roces, who expects the Philippine economy to grow by 6.1 percent in the second quarter of 2023, said the growth may have been driven by the still robust consumer spending and improved exports. "Private investments continued in the second quarter, supporting economic activity, while low government consumption served as a dampener," Roces said in an emailed commentary. "The downside risks to growth include the risks to sticky inflation, elevated interest rates, and weaker global economic growth," Roces added. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., who expects a 6.0 percent growth, noted the stronger consumer spending and election-related expenditure amid looser pandemic restrictions, but not without flagging the impact of inflation in the second quarter this year. He also said that the lower individual income tax rates that went into effect earlier this year might have caused the increase in consumer spending. "Lower individual income tax rates starting January 2023 for most income brackets as part of the Train Law, could lead to increased consumer spending, which accounts for at least 75 percent of the economy, and, in turn, lead to faster economic growth," Ricafort told Daily Tribune in a Viber Message. Meanwhile, China Banking Corp. chief economist Domini Velasquez expects a 5.9 percent GDP growth due to some factors, including higher inflation, which could have offset post-pandemic spending, and lukewarm government spending. "We saw substantial increases in infrastructure spending, but both PS and MOOE growth remained lukewarm," Velasquez said in a Viber message. "There is a need to hasten government spending in identified agencies lagging behind." Moving forward, Velasquez expects continued moderation in economic activities as elevated policy rates impact business and household spending. In the third quarter of this year, Velasquez expects the country's economy to grow to around 5.5 percent and full-year growth to average 5.8 percent, just shy of the government's 6.0 percent low-end target. In a virtual briefing last 19 July, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) that the Philippine economic growth likely slowed to 5.6 percent in the second quarter. "I do expect a slowdown in the second quarter to 5.6 percent," UA&P economist Victor Abola said in the virtual briefing. "It's really the carryover of inflation to the second quarter; even though it's lower, people are still a bit more reluctant," he added. While consumption is expected to slow down in the second quarter, Abola expects a rebound in the second half of the year. The post Phl economic growth may slow in Q2 appeared first on Daily Tribune......»»
Loan demand up this year on slower inflation
Economists see demand for loans increasing this year as inflation has eased further and prospects of stable interest rates strengthen. Inflation slowed further to 4.7 percent in July from 5.4 percent in June and the peak of 8.7 percent in January due to cheaper prices of food, housing, fuels, and utilities, data from the Philippine Statistics Authority revealed Friday. However, prices in restaurants and accommodations increased to 10.1 percent from 9.8 percent in Metro Manila. Economists said the growth was likely brought by high demand for these services, which signals strong financial capacities among consumers. “Strong demand from consumers is probably preventing this from falling faster as they continue to spend heavily on these services after the pandemic,” Jun Neri, chief economist of the Bank of the Philippine Islands, said Friday. In a text message to Daily Tribune, BDO Unibank Inc.’s official statement added that “loan demand may be driven more by consumer demand and potential infrastructure projects.” Prices of most goods and services or core inflation, which excludes volatile items like food and gas, fell to 6.7 percent from 7.4 percent. With the possible inflation downtrend, economists said consumers could have more money to spend and commercial banks could charge more manageable costs of borrowing based on the policy rate of Bangko Sentral ng Pilipinas or BSP. “The current path of inflation gives BSP the space to keep rates steady until the end of the year,” Neri said. BSP aims to pull inflation within the range of 2 percent and 4 percent this year by adjusting its policy rates. Its Monetary Board will announce its next move on 15 August after keeping the rate at 6.25 percent. While BSP often matches the move of the US Federal Reserve, which increased its rate by 0.25 basis point last month, local economists said imposing several hikes this year is unlikely despite possible higher inflation from costlier food prices caused by the recent typhoon and El Nino. Neri said these weather disturbances could reduce food supplies, especially rice and increase their prices through weaker agricultural production and fewer imports. “El Nino is a global phenomenon that could affect the food production of other countries. India recently announced a ban on the export of non-basmati white rice, while a Thai government agency has encouraged farmers to plant less rice to save on water,” he said. Dan Roces, chief economist of Security Bank Corp., believed a likely small increase in the BSP policy rate would be enforced this year as bank executives wait for its full disinflationary effect. “With this, loan rates and demand may still exhibit some growth as monetary policy operates with a lag. A pronounced slowdown in loans, if any, may occur in 2024 should monetary policy remain elevated for long.” Michael Ricafort, chief economist of Rizal Commercial Banking Corp., added that stable rates for this year are possible as long as there will be no major negative turns in the economy. “The markets recently priced in lower odds of another 0.25 Federal Reserve’s rate hike for the rest of 2023, thereby supporting a possible pause on Fed and local policy rates, as supported by inflation moving closer to the inflation target of the central banks for both countries.” The post Loan demand up this year on slower inflation appeared first on Daily Tribune......»»
Kadiwa starts sale of smuggled sugar
Some 4,000 metric tons of refined sugar smuggled from Thailand will soon be sold at various Kadiwa markets and stalls, the Department of Agriculture, or DA, said yesterday. The DA said it has received from the Bureau of Customs the shipment that was seized at the Port of Batangas last April for lack of proper documents, specifically a Notice of Arrival. The sugar was later cleared for donation and consumption based on the guidelines of Sugar Regulatory Administration Memorandum Circular 4, Series of 2023-2024, as well as provisions of the Customs Modernization and Tariff Act. President Ferdinand Marcos Jr. approved the sale of seized smuggled sugar at Kadiwa centers last March, according to a statement from the Presidential Communications Office at the time. The PCO said the recommended selling price at Kadiwa stores was P70 per kilo, which was equivalent to the prevailing actual mill gate prices. The PCO statement said the President had tasked the DA and SRA to ensure that the sugar for sale passed the Food Safety Act and other regulations. When the President gave the order in March, the price of refined sugar in the market was between P86 and P110 per kilo. August shortage The PCO explained that under the Customs Modernization Tariff Act, confiscated smuggled agricultural products could be donated by the BoC to other government agencies. This week, the SRA said the current sugar supply is more than enough to meet demand. It noted a physical stock of 262,328 metric tons of raw sugar, 448,106.45 MT of refined sugar, and 148,264.29 MT of molasses as of 16 July. However, the SRA, in mid-July, approved the importation of 150,000 metric tons of sugar as it projected a shortage in August. Also on 15 July, shipping containers found to be full of smuggled refined sugar were seized by the BoC at the Manila International Container Port after they were declared as silica sand. ‘Smuggling encouraged’ The smuggled sugar seized at the MICP may also be donated by the BoC to Kadiwa stores, through the DA, according to BoC sources. A month prior, in June, the Department of Finance floated the idea of allowing industrial users to directly import their sugar needs if they would accept the government’s new tax scheme on sweetened beverages. Following the seizure of the smuggled sugar at the MICP, former BoC Commissioner Yogi Filemon Ruiz scored the government’s excessive importation and the worsening smuggling of agricultural products. “The remedy in previous administrations was that we imported. With that, we encouraged smuggling,” Ruiz said. “If smugglers can smuggle through our ports, they do not pay duties and taxes, and they have an edge already. Once they sell it to the market, they gain an edge in the pricing of their goods.” According to Ruiz, smuggling costs the nation hundreds of billions of pesos every year. The DA, citing a report of its monitoring and enforcement group, said that as of 31 July, the retail price of refined sugar in Metro Manila markets ranged from P86 to P110 per kilo, washed sugar from P82 to P90, and brown sugar from P78 to P90. “We firmly believe that, through DA, this donation will reach various local communities and enable our fellow Filipinos to conveniently access sugar,” BoC Commissioner Bienvenido Rubio said. The DA, through Senior Undersecretary Domingo F. Panganiban and Assistant Secretary for Consumer Affairs and spokesperson Kristine Evangelista, received the donation from the BoC. Importation not ok’d In August 2022, the SRA issued an order to import 300,000 metric tons of sugar, a move that local producers said would undercut domestic sugar prices and benefit local importers. The order was signed by then Agriculture Undersecretary Leocadio Sebastian, who was acting chairman of the SRA at the time. However, Marcos, who chairs the SRA board as concurrent DA secretary, had not approved the order. The scandal led to the resignation of Sebastian and other SRA officials. It also prompted an investigation by the Department of Justice and Congress. Since then, the DA has been under the microscope about the importation of other agricultural products like onions and rice. The post Kadiwa starts sale of smuggled sugar appeared first on Daily Tribune......»»
Private sector analysts predict inflation rate to dip below 5 percent
Private economists expect the country's inflation rate to ease further for the sixth consecutive month in July from the 5.4 percent inflation rate last June. A Daily Tribune poll of six (6) private sector analysts yielded a median estimate of 4.8 percent for July inflation. The Philippine Statistics Authority (PSA) is expected to unveil inflation data in the first week of August. Economists expect inflation to dip below five percent, marking the first time since April 2022, when the average headline inflation was 4.9 percent. Security Bank chief economist Robert Dan Roces and China Banking Corp. chief economist Domini Velasquez said inflation likely softened to 4.7. In an emailed commentary, Roces elaborated that the deceleration in the consumer price index (CPI) suggests a moderate level of inflation. "The favorable base effects that helped offset the increase in food prices may continue to play a role in keeping inflation in check in the short term," Roces said. For her part, Velasquez said lower utility rates offset higher food and fuel prices. She mentioned that electricity rates in all regions fell substantially from the previous month, especially in Mindanao and Batangas. Velasquez added that a stronger peso in July could have also led to the "muted" monthly inflation rate. ING Bank lead economist Nicolas Mapa, who said that headline inflation averaged 4.8 percent in July, mentioned that Bangko Sentral ng Pilipinas (BSP) would consider the data point alongside the path of inflation against developments such as the recent US Federal Reserve's hike in its subsequent decision. Philippine National Bank economist Alvin Arogo said inflation would likely to 4.9 percent in July amid the month-on-month increase due to the minimum wage hike in Metro Manila and the rise in pump prices due to Dubai crude. Arogo said the favorable base effects will continue to be the main driver for the monthly print of year-on-year price growth to be lower than four percent in the fourth quarter amid the "persistence of second-round effects." Bank of the Philippine Islands (BPI) lead economist June Neri, who said that inflation in July likely eased to 4.9 percent in July, mentioned it would fall within the two to four percent target range of the BSP by the fourth quarter. "Such a print suggests that a sub-four percent monthly print by October or November is possible and increases the chances that the BSP can keep policy rates steady for the balance of 2023," Neri said. Meanwhile, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the inflation rate for July likely slowed at 5.1 percent as the recent increase in local rice prices would also slow down the easing trend of "disinflation" at the very least. He said that the possible reduction of rice imports by the Philippines would also coincide with the adverse effects of the El Niño drought, especially from the fourth quarter of 2023 to the first quarter of 2024, potentially reducing local rice production. Ricafort added that the weather phenomenon would also lead to some uptick in local rice prices and overall inflation. However, the country's new central bank said it is still too early to declare victory in the battle to curb consumer price pressures as upside pressures on expenses remain high amid downtrend data, the country's new Speaking at a recent banking community event, BSP governor Eli Remolona said the persisting upside risks to inflation indicate the monetary authority remains open to further tightening. The country's core inflation, which primarily excludes food and fuel expenses, hit 7.4 percent in June. Last month's data declined from May's 7.7 percent to April's 7.9 percent. "Nonetheless, it's too soon to declare victory. Core inflation remains high. There are still upside risks to inflation – for example, risks in the form of El Niño and further supply shocks," Remolona said. Remolona stated that the inflation figures will factor into the analysis conducted by the Monetary Board. He added that data will play a crucial role in influencing their policy rate decision. "We will wait and see. We will analyze the data as they arrive, and that analysis will decide monetary policy down the road," the Central Bank chief mentioned. On the sidelines of the same banking event, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said he expects inflation to continue easing in the coming months but warned that there are still risks to the outlook. Balisacan said that the current downward trend in inflation is expected to continue, but some factors could worsen it. These include rising oil prices and the impact of Typhoons Egay and Falcon on agricultural production. "We are still monitoring the situation, but we hope that the impact of the typhoon will not be too serious," Balisacan said. The post Private sector analysts predict inflation rate to dip below 5 percent appeared first on Daily Tribune......»»
DoubleDragon opens 45th mall, 7 more by 2024
DoubleDragon Corp. opened its 45th mall property in Surigao City, Surigao del Norte on Friday — cementing its position as a leading community mall developer in the country. In a stock report, DoubleDragon said the recent expansion enabled the company to become the fourth largest mall developer and landlord based on the number of operational malls. The newly opened CityMall-Surigao has 8,608 square meters of gross floor area sitting on a 1.05-hectare of prime commercial land. It is part of the 1.29 million square meters of fully built and completed gross full area in DoubleDragon's diversified portfolio, which already exceeded its one million square meter total GFA target in 2020. “Within the first three years of DoubleDragon’s IPO in the Philippine Stock Exchange last April 2014, we purposely and rapidly acquired the majority of the Company’s landbank for CityMall when land prices in city centers of prime provincial cities were still low,” DoubleDragon chairman Edgar “Injap” Sia II said. Hundreds of prime assets “Today, we have seen exponential value appreciation across the string of prime commercial properties which our DD team is thankful to have acquired a string of hundreds of prime assets across the country early on,” he added. In sustaining its growth momentum, DoubleDragon said it will - complete three more CityMalls, that is, one each in Laguna, Leyte, and Antique within the year. By next year, the company aims to open four more CityMalls - one each in Cavite, Zamboanga, Ormoc, and Ozamiz. Altogether, these are seen to increase the company’s operational mall portfolio to 52 by the end of 2024. DoubleDragon's current 45-mall network began with its first CityMall built in 2015; in all, it took only eight years — two of those covering the Covid-19 pandemic — for the company to put up its 45th mall. The post DoubleDragon opens 45th mall, 7 more by 2024 appeared first on Daily Tribune......»»
IMF raises 2023 economic outlook but warns of slowing global growth
The International Monetary Fund has slightly upgraded its outlook for world growth this year on the back of resilient service sector activity in the first quarter and a strong labor market, the lender said Tuesday. But despite the mildly better economic forecast, growth is expected to slow to three percent in 2023 and then stay there, held down by weak growth among the world's advanced economies, the IMF announced in a new report. "The global economy continues to gradually recover from the pandemic and Russia's invasion of Ukraine. But it is not yet out of the woods," IMF Chief Economist Pierre-Olivier Gourinchas said during a press conference. The growth forecast for this year was raised by 0.2 percentage points from the IMF's last estimate in April, putting the world economy on track for three percent growth in both 2023 and 2024. This is down from growth of 6.3 percent in 2021, and 3.5 percent last year, the IMF announced in its update to the World Economic Outlook (WEO). Earlier this year, the IMF published its lowest medium-term forecast since the 1990s, citing slowing population growth and the end of the era of economic catch-up by countries including China and South Korea. On Tuesday, the IMF said the global inflation picture has improved somewhat, with consumer prices now expected to increase by 6.8 percent this year, down 0.2 percentage points from April's forecast. This is largely on account of subdued inflation in China, Daniel Leigh, the head of the IMF's World Economic Studies division, told reporters on Tuesday. "This is one of the only countries in the world right now where inflation is below the target rate," he said, adding that the IMF has revised China's inflation forecast for the year down sharply to 1.1 percent. 'Resilient' US consumption The IMF has lifted its outlook for US growth this year to 1.8 percent, up 0.2 percentage points from April, citing "resilient consumption growth in the first quarter." The still-tight labor market in the world's largest economy "has supported gains in real income and a rebound in vehicle purchases," the IMF added in its report. The fund sees US growth slipping to 1.0 percent next year, as savings accumulated during the pandemic dry up and the economy loses momentum. As with the April forecast, much of global growth this year is expected to come from emerging markets and developing economies (EMDEs) like India and China, with activity in advanced economies, predicted to slow substantially this year and next. Advanced economies are now anticipated to grow by 1.5 percent this year, up 0.2 percentage points from April, and by 1.4 percent in 2024. Citing positive economic news from the United Kingdom, the IMF has lifted the country's growth forecast for 2023 to 0.4 percent, leaving Germany as the only G7 economy expected to contract this year. The news is much more positive among the EMDEs, which are forecast to grow by 4.0 percent this year, and by 4.1 percent next year. The IMF's 2023 growth forecast for China remained unchanged at 5.2 percent, although it notes there has been a change in composition, with underperformance of investment due to the country's troubled real estate sector. Alongside property sector weakness, the IMF said foreign demand remains tepid and warned of rising and elevated youth unemployment, which reached almost 21 percent in May. The IMF lifted India's 2023 growth prospects to 6.1 percent, up 0.2 percentage points from April, citing "momentum from stronger-than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment." The fund now expects Russia's economy to grow by 1.5 percent this year, an upward revision of 0.8 percentage points from April, due to stronger-than-expected economic data fueled by "a large fiscal stimulus." The IMF anticipates the Russian government's budget deficit will expand to 6.1 percent this year, up from 1.4 percent last year, according to a spokesperson. The post IMF raises 2023 economic outlook but warns of slowing global growth appeared first on Daily Tribune......»»
2nd State of the Nation Address
Anti-inflation measures Crafting of Medium-Term Fiscal Framework supported by Congress Implementation of strategies to capacitate economic sectors Results (1) 7.6 percent growth in 2022 — highest rate in 46 years. (2) January to March 2023 — 6.4 growth percent (within 6 to 7 percent target) (3) Philippines considered to be among fastest-growing economies in the Asian region and in the world (4) Strong and stable financial system (5) Banks have strong capital and liquidity positions. (6) Digital economy contributed P2 trillion in 2022, the equivalent of 9.4 percent of our GDP. (7) World Bank projects a 6 percent overall growth rate due to strong local demand, consumer spending, strength from the BPO industry, steady flow of remittances, and continuing jobs recovery (8) Inflation rate eased up from 8.7 percent in January to 5.4 percent in June. (9) Bureau of Internal Revenue posted P1.05 trillion collections — an increase of almost 10 percent over the last year (10) Bureau of Customs increased collection by 7.4 percent for the first seven months of 2023, amounting to P476 billion. (11) PAGCOR increased collection by 47.9 percent (12) PCSO increased collection by 20 percent Reduction of prices of commodities like rice, meat, fish, vegetables and sugar Roll out of more than 7,000 KADIWA stores nationwide that link farmers with consumers, benefited 1.8 million families Agriculture Science-based methods toward food security Revision of Fisheries Code Unify 300 farm and fisheries clusters composed of 900 cooperatives Extensive technology training like the use of local bio-fertilizers Distribution of farm machinery, tools and inclement Distribution of more than 5 million rice seedlings and other crops Fuel at fertilizer discount vouchers Geo-Agri map of farm-to-market roads Irrigated 49,000 hectares of farmlands across the country. Constructed 4,000 additional fabrication labs, production at cold storage facilities Built 24 multi-species hatcheries to increase fisheries production Anti-animal pest monitoring, medicines, and vaccines Cloud seeding and buffer stocks in preparation for El Niño 70,000 agrarian land titles distributed Signing of EO No. 4. Or New Agrarian Emancipation Act the condoned P57-billion farmers’ loans Smuggling and hoarding Days of smugglers and hoarders are numbered Water Supply Creation of Water Resources Management Office Working for legislation of Department of Water Resource Management Allocated P14.6 billion for water supply projects Completion of Wawa Bulk Water Supply Project Phase 1 Installed 6,0000 rainwater collection systems across the country Infrastructure 8.3-trillion peso “Build, Better, More” Program in progress 194 flagship projects Continuation of “Build, Build, Build” projects Infrastructure spending stays at 5 to 6 percent of GDP 1,200-kilometer Luzon Spine Expressway Network Program will effectively connect Ilocos to Bicol from 20 hours to just 9 hours of travel Under Mega-Bridge Program, 12 bridges totaling 90 kilometers will be constructed including Bataan-Cavite Interlink Bridge and the Panay-Guimaras-Negros Island Bridges, and Samal Island-Davao City Connector Bridge As of June 2023, 4,000 kilometers of roads and 500 bridges have been constructed, maintained and upgraded Completed Cebu’s Pier 88 smart port, new passenger terminal buildings of Clark Airport and Port of Calapan. North-South Commuter Railway System now in full swing Strategic financing Enactment into law of Maharlika Investment Fund Social security Funds for the social security and public health insurance intact and separate Energy and Power Generation Price of crude oil stabilized Since last year, gasoline and diesel prices have gone down by 18 to 29 percent, respectively. Built 8 new additional power plants, bringing to 17 the total number of power generation facilities Energy production increased by 1,174 megawatts. Almost half a million homes given access to electricity; 100 percent household electrification by June 2028 Renewable energy is the way forward Promotion of renewables targets 35 percent share in the power mix by 2030, and 50 percent by 2040 Opened renewable energy projects to foreign investments Since last year, an additional 126 renewable energy contracts with potential capacity of 31,000 megawatts awarded. To date, more than 1,000 active projects all over the country — 299 are solar, 187 are wind, 436 are hydroelectric, 58 are biomass, 36 are geothermal, and 9 are ocean-powered. Malampaya project is boon, energizing 20 percent of Luzon; renewal of the contract guarantees continued revenues and energy production for another 15 years Push for more gas exploration in other parts of the country Partnered with the BARMM in regard to energy exploration and development The Philippines now has a Unified National Grid with the interconnection of the Luzon, Visayas and Mindanao grids “One Grid, One Market” will enable more efficient transfers and more competitive pricing of electricity Performance review of National Grid Corporation of the Philippines to complete all of its deliverables, starting with the vital Mindanao-Visayas and Cebu-Negros-Panay interconnections. Social welfare Enough funds for underprivileged DSWD, DoLE, DepEd, TESDA and CHEd involved in providing assistance Programs like AICS, TUPAD, TVET for Social Equity, Social Pension for Indigent Senior Citizens, Cash-for-Work for PWDs, and Integrated Livelihood Program-Kabuhayan available for indigents Social protection Pension of the military and the uniformed personnel is as important, urgent, and humanitarian as that of all other civilian Filipino employees Working closely with Congress to ease the transition from the old system to the new one, to guarantee that no effects are felt by those in the uniformed services. The post 2nd State of the Nation Address appeared first on Daily Tribune......»»
IOU appetite remains high
The Bureau of the Treasury, or BTR, on Monday fully awarded bids for the government’s key Treasury bills. The 91-, 182-, and 364-day T-bills fetched average rates of 5.884 percent, 6.095 percent and 6.226 percent, all lower than previous auction results. Last week, the average rates for the 91-,182-, and 364-day T-bills settled at 5.973 percent, 6.266 percent, and 6.339 percent, respectively. The auction was nearly three times oversubscribed with total bids reaching P44.4 billion. The BTr raised the full program of P15.0 billion for the auction. In a comment, Rizal Commercial Banking Corporation chief economist Michael Ricafort said Treasury bill auction yields corrected lower week-on-week. Yields on downtrend “This is similar to the week-on-week downward correction in PHP Bloomberg Valuation Service yields after US Treasury yields also corrected lower after better US inflation data at a new 2-year low of 3 percent in June 2023, from 4 percent in the previous month and nearing the Fed’s target of 2 percent,” Ricafort said. “The lower T-bill auction yields could have also been supported by the strongest peso exchange rate versus the US dollar in more than three months recently, thereby could reduce import prices and overall inflation that could still ease further due to higher base effects,” he added. On 13 July, the peso closed at 54.51 to a US dollar, its best performance since 5 April. The post IOU appetite remains high appeared first on Daily Tribune......»»
China June inflation flat as economy struggles
BEIJING, China (AFP) — Chinese inflation was flat last month while producer prices sank more than expected, official data showed Monday, in the latest sign of weakness in the world’s second-largest economy. The consumer price index for June was down from the 0.2 percent seen in May, according to the National Bureau of Statistics, and was worse than expected as domestic demand slowed. A 7.2 percent annual drop in the cost of pork, the staple meat in China, as well as falling oil prices that made transportation cheap, dragged down the cost of the essential goods basket, the NBS said. Producer prices — which measure the cost of goods at the factory gate — tumbled 5.4 percent on-year, following a 4.6 percent slide in May. Economists polled by Bloomberg had expected prices to sink five percent. Poor global demand and a steep drop in raw material costs have also put downward pressure on factory prices, the NBS said. Economic growth has slowed sharply since April after Beijing lifted strict Covid rules at the end of last year, while the yuan sits at a seven-month low against the dollar as exports drop. Authorities are coming under increasing pressure to step in with stimulus but other than a few small interest rate cuts and pledges of action there has been little of substance out of Beijing. Ongoing trade tensions between the US and China have also dragged on the economy, with US Treasury Secretary Janet Yellen on Sunday wrapping up a visit to Beijing with no signs of a breakthrough. Yellen said her talks with Chinese officials were “productive” but admitted there were “significant disagreements”. China has set a growth target of “around five percent” this year, one of its lowest in decades. Growth figures for the second quarter will be released on July 17. The post China June inflation flat as economy struggles appeared first on Daily Tribune......»»
Inflation eases further to 5.4%
President Ferdinand Marcos Jr. on Wednesday said a collaboration with farmers is crucial to reducing inflation which has eased for the fifth straight month in June. Marcos made the statement as data from the Philippine Statistics Authority showed the consumer price index had eased from 6.1 percent in May to 5.4, mostly due to cheaper prices of food, transportation, housing, and utilities. Overall food prices decelerated to 6.7 percent in June from 7.4 percent in May, with the most notable declines in the prices of sugar, meat, and other animal products. Speaking to reporters on the sidelines of Livestock Philippines 2023 in Pasay City, Marcos said the government is working with farmers to lower prices, improve production efficiency, and take full advantage of new technologies. “If you remember, inflation increased in January and February, particularly due to the rise in the cost of agricultural products,” Marcos said. “That’s why this kind of collaboration and exchange of ideas being done now is important because we are helping the producers of agricultural commodities to lower prices, improve production efficiency, and take full advantage of new technologies.” Marcos cited the example of sugar, which contributed significantly to inflation in recent months. He said the government has stabilized the price of sugar by making a clear importation schedule. “This is the kind of thing that is helping to bring down the inflation rate,” he said. “That’s why doing this, improving the technologies, helping our farmers at both ends of that value chain, there is an advantage because the farmers will make more money because they are spending less because they are more efficient,” he said. Ensure stability The government, he said, will continue to work with farmers to reduce inflation. He said the goal is to ensure that prices are stable and that consumers can plan for the future. The latest overall inflation rate was the lowest since June last year although fish prices were up 6.2 percent from 5 percent, while the prices of vegetables and rice increased slightly by only decimal points. Fuel prices were also down to -3.1 percent from -0.5 percent, while electricity costs for households dropped to 10.3 percent from 13.6 percent. Meanwhile, core inflation, which excludes volatile items such as food and fuel, also decreased to 7.4 percent from 7.7 percent. Prices of restaurant and financial services, clothing and footwear, and telecommunications remained stable, while personal care products increased slightly to 5.8 percent from 5.7 percent. The National Economic and Development Authority or NEDA expects the continued downtrend in inflation to approach the government’s target of 2 percent to 4 percent by the end of the year. “The government remains committed to protecting the purchasing power of the Filipino people by ensuring food security, reducing transport and logistics costs, and lowering energy costs for households,” NEDA Secretary Arsenio M. Balisacan said. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said government agencies must monitor the factors that could potentially derail the inflation trajectory from the aforementioned target. “The El Niño or drought, especially in the latter part of this year to early 2024, could reduce agricultural production and supplies, such as rice, thereby leading to a pickup in prices and overall inflation,” she said. She added that the recent P40 increase in the minimum wage in Metro Manila could push up consumer prices again as the public has more cash to spend. “The latest increase in the minimum wage for non-agricultural workers in Metro Manila would lead to some pass-on inflation effects or higher prices of other goods and services in the economy, similar to last year,” he noted. He said government agencies must have other strategies in place to prevent a reversal of the inflation trend as “the wage hike had been somewhat anticipated.” @tribunephl_tiz The post Inflation eases further to 5.4% appeared first on Daily Tribune......»»
Shanghai records hottest May day in 100 years
Shanghai recorded its hottest May day in 100 years on Monday, the city's meteorological service announced, shattering the previous high by a full degree. Scientists say global warming is exacerbating adverse weather, with many countries experiencing deadly heatwaves and temperatures hitting records across Southeast and South Asia in recent weeks. "At 13:09, the temperature at Xujiahui station hit 36.1 degrees Celsius (97 degrees Fahrenheit), breaking a 100-year-old record for the highest temperature in May," a post on the service's official Weibo account read, referring to a metro station in the center of China's largest city. The temperature at the bustling station climbed even higher to 36.7C (98F) later in the afternoon, Shanghai's meteorological service said. That put it a full degree above the old record, 35.7C, which has been recorded four times previously, in 1876, 1903, 1915 and 2018, according to the weather service. Shanghai residents sweltered under the early-afternoon sun, with some apps showing a "feels like" temperature estimate of more than 40C (104F). "I headed out at noon to pick up a delivery, and got a headache after coming back," read one post from Shanghai on Weibo. Another said: "I almost got heatstroke, it's really hot enough to explode." Deadly heat Parts of India saw temperatures above 44C (111F) in mid-April, with at least 11 deaths near Mumbai attributed to heat stroke on a single day. In Bangladesh, Dhaka suffered its hottest day in almost 60 years. The city of Tak in Thailand recorded its highest-ever temperature of 45.4C (114F), while Sainyabuli province in Laos hit 42.9C (109F), an all-time national temperature record, the study by the World Weather Attribution group said. A recent report from the UN's Intergovernmental Panel on Climate Change warned that "every increment of global warming will intensify multiple and concurrent hazards". In May, the United Nations warned that it is near-certain that 2023-2027 will be the warmest five-year period ever recorded, as greenhouse gasses and El Nino combine to send temperatures soaring. There is a two-thirds chance that at least one of the next five years will see global temperatures exceed the more ambitious target set out in the Paris accords on limiting climate change, the UN's World Meteorological Organization said. The 2015 Paris Agreement saw countries agree to cap global warming at "well below" two degrees Celsius above average levels measured between 1850 and 1900 -- and 1.5C if possible. The global mean temperature in 2022 was 1.15C above the 1850-1900 average. The WMO said there was a 66 percent chance that annual global surface temperatures will exceed 1.5C above pre-industrial levels for at least one of the years from 2023-2027. The post Shanghai records hottest May day in 100 years appeared first on Daily Tribune......»»
Correct fiscal moves feed robust growth
Good financial decisions have helped the economy grow, even though the growth was slower in the first quarter, Finance Secretary Benjamin Diokno recently said. The economy expanded by 6.4 percent in the first quarter of 2023, beating market expectations and surpassing other major emerging economies in the region. “This is very good news, especially in the midst of a slowing global economy and elevated inflation,” Diokno said during his weekly talk with the reporters. “This is slightly higher than the median forecast of private analysts of about 6 percent and is well within our target growth range of 6 to 7 percent for this year,” Diokno added. Demand remains resilient Diokno attributed the broad-based expansion to the country’s resilient domestic demand, despite the increase in domestic and international commodity prices. The labor market also showed remarkable improvement, with a lower unemployment rate of 4.7 percent and the lowest underemployment rate since April 2005. Diokno noted that the government’s initiatives to improve labor conditions in the country contributed to the positive outcome. On the debt front, the total outstanding debt of the national government amounted to 13.86 trillion as of end-March 2023, a marginal 0.8-percent increase from the previous month. Diokno remained optimistic, saying that the country’s strong growth momentum will help the government outgrow its debt and achieve its targets set on the Medium-Term Fiscal Framework. The fact that the debt-to-GDP ratio dropped to 61 percent in the first quarter of 2023 from 63.5 percent in the same period last year is seen as a positive sign. The government aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025 and further down to 51.1 percent in 2028. Despite global headwinds, the Philippine economy has remained strong in the first quarter of 2023. “All in all, the Philippine economy remains resilient and continues to be one of the fastest-growing economies in the region,” Diokno said. Slower expansion in store As the government continues implementing sound macroeconomic policies and initiatives to improve the country’s labor conditions, experts predict that the Philippines will continue to see slow economic growth in the coming months. In a commentary, BMI Country Risk & Industry Research, a unit of the Fitch Group, said that while it maintains its 2023 growth forecast for the Philippines at 5.9 percent, the projection implies that “real GDP growth to remain on a slowing trend over the coming quarters.” According to BMI, the primary reason for the anticipated deceleration is the increase in interest rates, which may dampen the enthusiasm for investment. BMI stated that the Philippines would receive minimal external assistance due to sluggish global demand, despite the recovery in Mainland China which may provide some compensation. Additionally, BMI anticipates that pent-up demand will diminish, and increased inflation rates and higher borrowing expenses will significantly impact consumer spending growth in the future. “Risks to our growth forecast are skewed slightly to the upside. We are currently expecting external demand to remain weak throughout the year,” the Fitch unit said. “However, a stronger recovery in Mainland China could provide a more significant offset. If inflation declines faster than expected, this would also enable the BSP to loosen financial conditions earlier,” it added. The post Correct fiscal moves feed robust growth appeared first on Daily Tribune......»»
Inflation to spare essentials demand
Malaysia’s biggest lender Maybank’s securities arm maintained a positive view on the consumer demand for essential commodities despite the still intractable inflation momentum. “We are cautiously optimistic on the domestic consumer sector and recommend focusing on essentials and staple names as we expect the lagged effect of inflation to continue to exert pressure on domestic purchasing power and shift consumption towards food and non-alcoholic beverages, shelter and other necessities,” the bank explained in a report. Based on the bank’s review, listed companies involved in the sector were given a technical “buy” recommendation, with consumer stocks trading at up to 160 percent discounts to their historical price-earnings ratio. It cited, however, the expectation the country’s recovering macroeconomic environment to benefit consumer staples since inflation rates in 2022 outpaced the three percent per year minimum wage increase. Only when inflation tapers to the three to four percent range “do we expect discretionary consumption-exposed stocks, such as Wilcon and Robinsons Retail Holdings Inc. to benefit materially. “As such, our top pick is Universal Robinsons Corp., the flagship company of the Gokongwei group, whose market leadership in snack foods provides relevant exposure to the essentials-driven domestic consumption recovery story,” the report yielded. Few 2022 surprises The consumer sector’s final quarter last year showed earnings were as expected. The sector posted a 10 percent to 15 percent increase from a year ago in sales volume but much of the revenue growth during the period was attributable to the aggressive average selling price increases, which were not fully able to cover the raw material-driven cost hikes, resulting in 100 to 560 basis points decline in margins. Out of the eight stocks it covered, Maybank said seven had issued reports and all were in line or ahead of expectations. Consolidated 2022 earnings for the seven shares that reported financial results as of 13 April 2023 was P45.5 billion or a four percent growth from a year ago, or 101 percent of forecast. RRHI and DNL Industries slightly outperformed, at 105 percent and 109 percent respectively, “but this was largely due to higher-than-expected topline for DNL and strong gross margin expansion for RRHI; MONDE tracked behind because of higher-than-expected operating expenses,” the report said. Lagged effect Inflation averaged 5.8 percent from a year ago in 2022 due to the large rise in food and nonalcoholic beverage prices and transportation cost. Based on Maybank’s 5.9 percent 2023 inflation forecast and projection of another 50 bps interest rate increase by the BSP to 6.5 percent before the end of the first half, “we expect a high inflationary environment to shift consumption patterns towards essentials (e.g. food and transport).” Maybank added inflation tends to have a lagged effect and, on average, manifests into softer demand about six to eight months after it hits, particularly for the low-end market. The post Inflation to spare essentials demand appeared first on Daily Tribune......»»
BSP hikes rates6.5%, off-cycle
The Bangko Sentral ng Pilipinas on Thursday raised its policy rate on an off-cycle period to 6.5 percent from 6.25 percent to manage a likely inflation uptrend this year until July next year. The BSP has, thus far, raised its policy rate by 450 basis points after inflation peaked at 8.7 percent in January and re-accelerated again to 6.1 percent last month from 5.3 percent in August. The BSP move will increase borrowing costs, with new interest rates on the overnight deposit at 6 percent and lending facilities at 7 percent. BSP Governor Eli Remolona Jr. said the country’s inflation rate might settle at 4.7 percent next year, higher than the central bank’s previous target range of 2 percent to 4 percent for this year and 4.3 percent in the next. He added inflation might quicken further above 4.7 percent from July to March next year. “The balance of risks to the inflation outlook still leans significantly toward the upside, due mainly to the potential impact of higher transport charges, electricity rates, international oil prices, and minimum wage adjustments in areas outside the National Capital Region,” he explained. Limit spending With the higher interest rates, Remolona said consumers will likely limit their spending which will discourage businesses from raising prices. “The BSP’s Monetary Board recognized the need for this urgent monetary action to prevent supply-side price pressures from inducing additional second-round effects and further dislodging inflation expectations,” the BSP chief said. Remolona added the slow global economic recovery and effects of the weather disturbances from El Niño on food supply might also restrain consumption toward a moderated inflation. “Meanwhile, the effect of a weaker-than-expected global recovery as well as government measures to mitigate the effects of El Niño weather conditions could temper inflationary impulses,” he said. The BSP Monetary Board will again announce to the public on 16 November whether to change its policy rate in compliance with its normal cycle period happening every six weeks. However, Remolona already cautioned the public of likely controlled consumer spending in the medium term as the BSP expects to maintain high interest rates in the near future. Tighter settings “Looking ahead, the Monetary Board deems it necessary to keep monetary policy settings tighter for longer until inflationary expectations are better anchored and a sustained downward trend in inflation becomes evident,” he said. “We will consider another rate hike if things are worse than we thought,” Remolona continued. The BSP has raised its policy rate by 425 basis points after inflation peaked at 8.7 percent in January and re-accelerated again to 6.1 percent last month from 5.3 percent in August. The Philippine Statistics Authority attributed this to persisting higher food and fuel prices partly driven by global food trade restrictions and oil trade disruptions from the Russia-Ukraine war. Falls a little behind “In my view, I think we fell a little behind that’s the reason for this effort to catch up. We didn’t look closely enough at expectations,” Remolona said as he reflected on the BSP’s unchanged rate at its September 21 meeting. “One of them that was very striking was our consumer expectations survey which said about 92 percent think that in the next 12 months inflation will be above 4 percent, similar to expectations by firms,” the BSP chief continued. The post BSP hikes rates6.5%, off-cycle appeared first on Daily Tribune......»»
Sept. auto sales surge 27% — CAMPI
Reflecting the robust economic rebound, the automotive industry reported sales in the year to September posted a strong double-digit growth from 2022. In a joint report on Sunday, the Chamber of Automotive Manufacturers Philippines Inc. and the Truck Manufacturers Association said industry sales in the first nine months were 314,843, which was 26. 9 percent higher than the 248,154 units sold last year. For this year, CAMPI said it is targeting to sell 423,000 units, including imported vehicles. “We recorded the highest monthly sales in September, and we hope that positive consumer outlook will be sustained in the fourth quarter,” according to CAMPI president Rommel Gutierrez. On the other hand, sales of locally assembled vehicles in September 2023 posted an uptick of 9.5 percent or 38,628 units compared to 35,282 units sold in 2022. Cars selling hot anew The sales of passenger cars also surged to 9,558 units in September 2023, improving 19.8 percent from 7,976 units a year ago. The industry group also stated that commercial vehicle sales went up by 6.5 percent year-on-year to 29,070 units from 27,306 units. Moreover, sales of passenger cars managed a 33.2 percent increase to 80,009 units from 60,058 units in September 2022. Commercial vehicle sales jumped by 24.8 percent to 234,834 units from 188,096 units last year. “The auto market has remained resilient since 2021 and the current trend indicated that we will breach the highest pre-pandemic sales performance and achieve full industry recovery in 2023,” Gutierrez said. The brand with the greatest number of units sold in September 2023 was Japanese brand Toyota with a 45.81 percent market share, trailed by Mitsubishi with an 18.44 percent market share, followed by American brand Ford with 7.33 percent; Japan’s Nissan, with 6.36 percent; and Suzuki, with 4.28 percent market share. The post Sept. auto sales surge 27% — CAMPI appeared first on Daily Tribune......»»
Inflation unlikely to hit target range
Inflation is unlikely to ease to the two to four percent target set by the Bangko Sentral ng Pilipinas within the year, as consumer prices further accelerated for the second straight month in September, according to Moody’s Analytics......»»
SMC power unit investors warned
“Thread cautiously” on San Miguel Power Global Holdings Corp., or SMPGH, an international think tank advised investors after assessing the prospects of the energy unit of the Asian conglomerate. The Detroit-based Institute for Energy Economics and Financial Analysis, or IEEFA, issued the call for caution due to SMPGH’s piling debts in contrast to its earnings. In a review of the dominant power producer, IEEFA said the company’s elevated net debt-to-earnings and potential difficulties meeting financial obligations “create additional risk of devaluation, particularly in the long term.” Likewise, SMPGH investors were cautioned about its mounting challenges in securing favorable funding terms due to its high fossil fuel exposure and high non-call risk for its sizable US dollar-denominated perpetual securities. IEEFA said the backing of parent San Miguel Corporation, one of the most diversified Asian multinationals, offers only “some comfort.” It said SMC’s own elevated debt and “business uncertainties will be critical to monitor” when assessing financial risks to SMGPH. Thus, due to its ongoing fossil fuel expansion, the company needs more strategic options to address financial risks in the near to medium term. However, IEEFA expressed the belief that an immediate material pivot toward low-cost domestic renewable energy represents the best hedge against exposure to imported fossil fuels, prices of which remain on an upswing. A compilation of the financial performance of the SMC units last year showed that only SMGPH tallied a huge loss. By the numbers Food unit San Miguel Food and Beverage Inc. reported a P34.6 billion or 10 percent gain; beer unit San Miguel Brewery Inc., a P31.75 billion profit, up eight percent; SMC Infrastructure a P14.24 billion net income, 110 percent higher; San Miguel Foods, P9.218-billion profit, up nine percent; Petron Corp., P6.697-billion, a nine percent increase; Ginebra San Miguel, P4.547 profit, a nine percent growth; San Miguel Packaging Group, 42 percent growth at P1.648-billion, and SMGPH, P3.134 billion or an 80 percent loss. SMGPH controls 4,719 megawatts or MW of operational power capacity, making it the largest power generation company in the Philippines by installed capacity. As of April 2022, the company owned 21 percent of installed capacity nationally and 28 percent of the Luzon grid, the largest of the three Philippine grids. However, SMC announced a 2050 net-zero target at its annual general meeting in June 2023. IEEFA said, “implementation details are sparse.” SMGPH’s existing generation portfolio is dominated by fossil fuel power plants, which comprise 87 percent of its operational capacity. Hydropower accounts for 12 percent. As of August 2023, the company does not have equity interests in wind or solar assets, IEEFA pointed out. “Without a change in strategy away from dependence on volatile fossil fuels, the company may increasingly find itself locked into financial instability,” according to IEEFA’s study. Fitch Ratings research unit CreditSights issued a similar report last year, saying the rising interest and debt payments of SMGPH may affect the company’s key projects. “Given the worsening financial profile of SMC Global Power, any concerns over its hypothetical default raise fears of triggering a cross-default on SMC,” the report said. The highly leveraged operation of the Asian conglomerate was also a concern raised by Bloomberg Intelligence, which indicated that it may impair the parent’s ability to rescue its subsidiaries in a financial fix. The post SMC power unit investors warned appeared first on Daily Tribune......»»
BSP maintains policy rate at 6.25%
The Bangko Sentral ng Pilipinas maintained its policy rate at 6.25 percent on Thursday to control the rise in inflation due to the looming higher food and transportation costs. Consequently, BSP retained interest rates on the overnight deposit and lending facilities at 5.75 percent and 6.75 percent, respectively. BSP said overall inflation might accelerate to 5.8 percent this year, up from its previous estimate of 5.6 percent and official level of 5.3 percent in August. The central bank also adjusted its inflation forecast upward to 3.5 percent from 3.3 percent for next year, while it kept initial projection of 3.4 percent for 2025. “The upward adjustments in the 2023 and 2024 projections reflect the spillovers from weather disturbances, rising global crude oil prices, and the recent depreciation of the peso” BSP Governor Eli Remolona Jr. said. He said drought from El Niño might reduce agricultural supply which would force businesses to increase food prices to sustain their operations and fulfill customer orders. The weather bureau said El Niño might persist until the first quarter next year. Food as a major inflation growth driver comprises over 30 percent of all the items in the consumer price index. Rice prices recently rose to P60 per kilo, forcing the government to impose price caps for regular and well-milled rice. “No fireworks were seen from the BSP with the central bank simply maintaining its current policy stance. The BSP opted for another “hawkish hold” by keeping policy rates at 6.25 percent while maintaining readiness to hike should data conditions warrant further tightening,” according to Nicholas Mapa, ING senior economist for the Philippines. High global oil prices Remolona added transportation fares and electricity charges will also likely increase as the commodities’ providers aim to recoup losses from higher global oil prices. These have increased by 15 percent over 11 weeks and amid the persisting war between oil exporting countries Russia and Ukraine. With its previous rate hikes of up to 425 basis points post-pandemic, BSP said consumption of certain goods and services has tempered, resulting in lower inflation rates in recent months from a peak of 8.7 percent in January. “At the same time, the BSP Monetary Board noted that recent indicators of domestic economic activity pointed to waning pent-up demand, even as the impact of prior monetary policy tightening continues to weigh on credit,” Remolona said. BSP said inflation would decelerate to government target of 2 percent to 4 percent in the last quarter of this year as long as supply issues do not surface. However, Remolona said the central bank’s Monetary Board is ready to increase its policy rate when supply shocks occur, especially of rice. To prevent rice supply issues, Remolona said the board supports the reduction of 35 percent tariff on rice imported from the members of the Association of Southeast Asian Nations. The Department of Finance suggests lowering the tariff to 0 percent to 10 percent depending on local rice production data. “The Monetary Board also reiterated the need for non-monetary interventions, including the temporary reduction of import tariffs with calibrated volumes and timely arrival of import commodities,” he said. The post BSP maintains policy rate at 6.25% appeared first on Daily Tribune......»»