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Economy humming under PBBM — AMRO
Despite the challenges of spiraling prices resulting to a 5.3 percent inflation in August from the 4.7 percent recorded in the previous month, economic experts maintained that the economy is on strong footing under the charge of President Ferdinand “Bongbong” Marcos Jr. Growth was supported by resilient domestic demand with a strong recovery in the labor market despite weaker external demand, according to the ASEAN+3 Macroeconomic Research Office, or AMRO. AMRO held its Annual Consultation Visit to the Philippines from 29 August to 8 September. According to the report, the economy maintained its robust momentum in the first half following a multi-decade high growth rate of 7.6 percent in 2022. It added that notwithstanding a widening current account deficit, the external position remains sound with sufficient international reserve buffer and low external debt. Despite some moderation in 2023, inflation remained high, at a level above the 2 percent to 4 percent target, driven by buoyant demand, the report indicated. Favorable outlook “Economic growth is projected to moderate to 5.9 percent in 2023 due to high base effects and weaker external demand, before edging up to 6.5 percent in 2024 as external demand recovers,” AMRO group head and principal economist Runchana Pongsaparn said. “Meanwhile, domestic demand is expected to remain robust supported by continued improvement in labor market conditions, lower inflation, robust overseas remittances, and higher government infrastructure spending.” Headline inflation is projected to moderate to 5.5 percent in 2023 from 5.8 percent in 2022, and slow further to 3.8 percent in 2024. Despite some moderation, inflationary pressure will likely remain elevated as reflected in the high level of core inflation, due to a positive output gap and the second-round effects induced by increases in the minimum wages and expectations of persistently high inflation. Favorable indicators Other positive factors cited in the report include: On the external front, a widening current account deficit was partly offset by net capital inflows; External debt remained low and international reserve buffer was adequate; The banking sector has improved profitability, ample liquidity, and sufficient capital buffer; and Fiscal position continues to improve in 2023, attributed to robust revenue collection and moderate spending. Scar effects linger AMRO, however, warned that the outlook is clouded by risk factors and challenges. In the short term, the economy could be adversely affected by high inflation, especially due to local supply shocks in the food sector, the report added. An economic slowdown in major trading partners and volatility in the global financial market, along with tighter financial conditions, also pose risks. The long-term growth potential is largely affected by the scarring effects of the pandemic, the pace of infrastructure development, geopolitical risks, and the economic losses from natural disasters, which are being exacerbated by climate change. The Bangko Sentral ng Pilipinas, or BSP, tightened monetary policy aggressively to address rising inflation. Policy interest rate was raised by a cumulative 425 basis points, or bps, between May 2022 and March 2023. The 2024 budget aims to continue to reduce the budget shortfall, guided by the medium-term fiscal framework. Complementary tacks Tightened monetary policy and contractionary fiscal stance is an appropriate policy mix amid a positive output gap and persistent inflationary pressure. The “all-of-government approach” against inflation is welcomed as it addresses the supply side problems. Macroprudential tools can be used actively to address potential financial stability issues. The report added in the medium to long term, budget policy should balance between restoring fiscal buffer and supporting sustainable growth and development. Based on the report, fiscal consolidation is supported by strong commitment and well-defined targets and measures, anchored by fiscal rules and discipline. On the financial system side, close coordination between regulators is crucial in identifying, monitoring and mitigating financial stability risks. Meanwhile, the authorities should continue to improve the liquidity management framework, develop the bond and repo markets, and continue to expand financial inclusion, to enhance the system’s resilience to shocks and promote market activities. To do list The report said a comprehensive strategy is warranted to bolster the medium- to long-term economic growth potential. Overcoming the scarring effects of the pandemic mandates a sustained focus on upgrading and upskilling the workforce to embrace a more technology-driven economy, it added. Implementation of policies and measures to attract investments, particularly foreign investments, and promote exports of both goods and services are the underpinnings of long-term economic development, the report added. Furthermore, the government can enhance the country’s competitiveness through infrastructure investment, digitalization, and developing a green economy. The post Economy humming under PBBM — AMRO appeared first on Daily Tribune......»»
BBM, hoarders in test of wills over price cap
President Ferdinand Marcos Jr. left yesterday for Indonesia, but not before taking a potshot at smugglers and hoarders over the spiraling price of rice that necessitated his issuance of a price cap on the staple grain. Marcos in his departure speech said that even as he attends the 43rd Association of Southeast Asian Nations Summit, controlling the rice price surge will be top of mind. Early in his presidency, Marcos said he would work to bring down the price of rice to P20 a kilo, half of the P41 to P45 per kilo price ceiling he imposed via Executive Order 39, signed by Executive Secretary Lucas Bersamin, last Thursday. The President was adamant that there is no valid reason rice should be selling for upwards of P50 per kilo, considering that data from the Department of Agriculture showed that with the coming rice harvest and imports, there’ll be enough rice buffer stocks to last the year. “Based on our studies, the only reason for this is that there are smugglers and hoarders,” he said in Filipino. The price cap — P41 per kilo for regular-milled rice and P45/kilo for the well-milled variety — will be implemented starting today, 5 September. Rice retailers across the nation were one in saying that they could not possibly sell at below their purchase price despite the government’s threat to penalize violators of EO 39. Monitoring teams from the DA and the trade, local government and justice departments, along with those from local government units, will go around wet markets and supermarkets to ensure compliance with the price cap. Temporary measure Earlier, Marcos tried to assure traders and the public that the price ceiling would be temporary while waiting for local farmers to harvest their palay. “I need to explain that this is only temporary. It won’t last long. We are harvesting rice, we are harvesting rice here in the Philippines, [until] the season is over,” he stressed. “And so when the time comes, we’ll also have imported rice. It will come in at the same time [as the local harvest]. We will take it to the market, we will let rice retailers cap their own prices,” he added. The President said he will work with ASEAN leaders during the summit to address the various challenges facing the region, including the territorial irritants in the South China Sea (see related story). As the “epicenter of growth” in Asia, ASEAN-member countries can play a big role in ensuring food security, calling for climate justice, protecting migrant workers, and fully tapping the potential of digital economies. “We will foster cooperation with these countries in areas such as trade and investment, climate action, food security, clean energy, and maritime cooperation,” Marcos said, before boarding his plane with First Lady Liza Araneta-Marcos. Marcos said he will also take part in the ASEAN Plus 3 and East Asia summits where he will discuss developments in the South China Sea, the situation in Myanmar, and the Russia-Ukraine conflict. Welcomed “ASEAN has always been closely intertwined with Philippine foreign policy,” the President said. “My administration will continue to ensure that our constructive engagements with ASEAN, our dialogue partners, and stakeholders will serve our national interest and the wellbeing of the Filipino people.” The ASEAN Summit is the second to be held in Indonesia this year after the one held in Labuan Bajo last May. House lawmakers welcomed the rice price ceiling set to be enforced today but expressed reservations, including making it more “flexible” based on prevailing regional market conditions. Albay Rep. Joey Salceda said, “The situation will vary per region, so a national rice price ceiling should be made more responsive to local supply-demand dynamics.” Salceda emphasized that increasing domestic supply and diversifying importation sources like Pakistan and the United States should be the long-term solution. “We’ve seen this crisis before. We know how to deal with it. It mostly involves signaling to our world partners that we will not over-import so that they don’t anticipate and drive prices up,” Salceda said. Independent opposition lawmaker Edcel Lagman said that Marcos should have imposed the rice price cap when the commodity was being sold at P50 to P60 per kilo. Speaker Martin Romualdez on Monday declared that P2 billion sourced from this year’s budget will be earmarked to aid rice retailers who may be affected by the price cap. @tribunephl_Lade @tribunephl_eao The post BBM, hoarders in test of wills over price cap appeared first on Daily Tribune......»»
Consumers’ group urges gov’t to buy from farmers
Consumer group Bantay Bigas called on the Marcos Administration to purchase farmers' crops this season to lower the prices of basic commodities. In a radio interview over Radyo 630, Cathy Estavillo, Bantay Bigas spokesperson, said if the government can buy at least “20 to 25 percent” of the fresh harvests of Filipino farmers, it may bring down prices of rice which is now reaching P60 per kilo. The Department of Agriculture earlier said that harvest season would start mid-September to November, and must be taken advantage of by the government. “Walang ibang dapat gawin ang gobyerno kundi mag-subsidize sa presyo ng bigas… ‘Yung mga fresh na inaani ng ating mga magsasaka, bilhin na niya ‘yan, (There's no other way but the goverment to subsidize the price of rice. The goverment should buy the fresh harvest of our farmers)," Estavillo suggested. “I-imbak niya at i-pagiling niya ‘yun at ibenta sa ating mga consumers through subsidized rice… para maging affordable ang presyo ng bigas sa palengke, (Store and milled this rice, then sell as subsidize rice, to become more affordable for ordinary Filipinos at the local market),” she added. Estavillo said subsidies to farmers should be the “immediate” solution of the government for now, aside from tasking farmers to continue planting rice to augment the production losses in previous typhoons. President Ferdinand Marcos, Jr., Estavillo added, as an agriculture secretary should also give “at least P50,000” to farmers whose crops were 100 percent destroyed by previous storms. “Ibasura na niya ang mga polisiya na nagpapahintulot ng pagbaha ng imported na bigas. Talagang pagdating sa pagkain, lalong-lalo na sa bigas, dapat hindi ipaubaya ng gobyerno sa mga private sector ‘yung kalakalan ng bigas at palay (Put aside the policy that flooded the market with imported rice. When we speak of food, rice is number one, the goverment should not allow the private sector to handle the trade of this commodity” she said. Agriculture Undersecretary Mercedita Sombilla, during a budget hearing at the House of Representatives, explained that the spike in local prices is influenced by global prices and high input costs plus the lowering buffer stock. She said the country is approaching lean months as it has just entered the harvesting period, which will enter its peak sometime in October and the middle of November. On the other hand, Agriculture Undersecretary Leocadio Sebastian said that the price of rice will not go down to as low as P20 even under the best-case scenario. “Not P20 (per kilo) but at least we can maintain a lower price that is affordable. I think our objective should be affordability for our population,” Sebastian said, stressing that lowering the price to P20 per kilo would be “difficult.” Sebastian however explained that the price of rice will only stabilize at P45 and P46 a kilo during the harvest period. The post Consumers’ group urges gov’t to buy from farmers appeared first on Daily Tribune......»»
NFA rice negotiation ‘obviously ultra vires’ — PRISM
The Philippine Rice Industry Stakeholders Movement over the weekend said that it has reached to their attention that officials of the National Food Authority were in India to negotiate, on behalf of the government, rice importation. "If this is true, we would like to ask for a clarification regarding this matter, which we believe runs counter to the provisions of the Rice Tariffication law which authorizes only the President to negotiate upon the recommendation of National Economic Development Authority and the Department of Agriculture," the PRISM said in a statement sent to Daily Tribune. "Any discussion about importation initiated by the NFA is obviously ultra vires," they added. PRISM said a closer look at the international rice market situation would reveal "problems beyond the control of our local businesses and the government." Filipino private importers who have booked supplies from Vietnam, as early as the first quarter, are now faced with the dilemma of Vietnamese importers canceling their contracts in favor of other countries affected by India’s rice export ban. Its response to current rice issues is to "reiterate our commitment to the President to ensure the availability of affordable rice. Second is to address the issues and concerns about the rice supply." PRISM boasted that on 7 July 2023, and last Saturday, along Tomas Morato near Scout Borromeo Streets, "we have successfully launched the P38 per kilo Tulong sa Bayan Bigas para sa Mamayan." It added that they have done the same in various areas in NCR, Luzon, Visayas, and Mindanao "through our Rice Retail networks, Barangay and LGU Caravans, and Kadiwa outlets. Since then until this time, we still continue selling the P38 per kilo rice in the respective channels chosen by our stakeholders." Despite different challenges and turn of events due to typhoons "Egay" and "Falcon" and the unexpected declaration of India’s export ban, PRISM reiterated their commitment to ensuring the availability of the P38 rice per kilo, "to continue our commitment to this advocacy." "Today, we are strengthening our advocacy, we encourage more rice traders to join in this effort to help more of our Kababayan," the movement said. According to PRISM, recent concerns have surfaced regarding the high price and availability of rice, leading to speculations that intend to disturb the confidence of the public and the normal course of the local market. "We acknowledge and stand by the President's assurance of sufficient rice supply and recognize the importance of addressing the affordability of rice amidst the current inflationary pressures," it said. "It is of utmost importance that PRISM stands together with our efforts aligned with the President's vision for prioritizing local rice production and stabilizing the local market supply without having to resort to revenue-draining government-led importation," it added. "We, therefore, urge the National Food Authority (NFA) to rally behind this directive and channel its energy into supporting methods that increase domestic production, as specified by the President," PRISM said. "We acknowledge the problem besetting the local rice industry, but certainly it is not the availability of rice, but its affordability primarily due to inflation." "As farm gate costs (currently at P21 to 25 per kilo of palay-fresh palay) are affected by price fluctuations in the market, we urge the NFA, whose current support price of P19 per kilo (clean and dry) is far below the current farm gate price, to seize the ongoing budget season and approach the Congress for higher budget allocation that will benefit local farmers and strengthen the local industry instead of pushing for importation that will drain government funds in favor of foreign suppliers," they explained. "The NFA should focus on its role as mandated by the Rice Tarrification Law / RA 11203 to build its buffer stock exclusively from local farmers and rice millers instead of imported sources. This move is also more consistent with the President’s objective to support local farmers and strengthen OUR rice industry," it further explained. "We are thus urging that relevant authorities engage in diplomatic discussions with Vietnamese counterparts to find a mutually beneficial resolution and honor the contracts of our importers," PRISM urged. "Complicating our rice situation, careless statement of a certain DA official has maliciously criticized our members’ effort to subsidize a limited supply of P38.00 per kilo rice during lean months that was intended for our indigent kababayan. In one interview this official insinuated that this effort, which was motivated by the President’s directive to provide affordable rice, was meant to be “playing” with the market prices even if it's only offered to the poorest of the poor with a maximum purchase of 5 kilos a day," the group said, preferring not to name the DA official. Prior to the roll-out of this initiative, they added, "our organization sought clearance from the President during several meetings in Malacanang and from the DA’s Undersecretary in charge of the National Rice Program," they said. There were also pronouncements that the DA inspectorate, together with the NBI, intends to inspect warehouses to prevent traders from hoarding. "While we understand and appreciate this initiative, we urge the government to exercise caution due to the ambiguous legal definition of hoarding. Even if the intention is sound, in this current situation, warehouses with limited stocks might come out as a reflection of our dwindling rice supply and be used by those pushing for government importation," PRISM explained further. However, for warehouses that hold stocks as commercial buffers for their regular customers, such may be misinterpreted by the media as hoarding, even without going through the legal process. This can negatively impact the reputation of legitimate traders. "Careless exercise of lawful inspections will only worsen the situation and create a chilling effect that can disturb the normal course of the market," the group said. The group is requesting that the President, who also holds the position of DA secretary, devise a better strategy for communicating the government's "rice policy framework and situational response." This should be done in a way that ensures accountability and prevents any confusion or negative public and industry feedback "We strongly encourage the President to assign just one Usec for all agencies involved in the rice program (NIA, NRP, and NFA)," PRISM said. "Furthermore, we strongly encourage the Philippine Statistics Authority (PSA) to release pertinent data and statistics on rice production and stocking in an up-to-date manner instead of a 3-month delay, to properly guide private and government stakeholders in timely decision making," the group suggested. The post NFA rice negotiation ‘obviously ultra vires’ — PRISM appeared first on Daily Tribune......»»
DA, partner gov’t agencies brace agri-fisheries sector before El Niño starts
The Department of Agriculture (DA) on Tuesday said it is taking the necessary actions to prepare the agriculture and fisheries sector ahead of the looming El Niño phenomenon this year. “We in the DA are doing our best in trying to allocate the resources like seeds, fertilizers, and other commodities that are necessary for the impact of the El Niño phenomenon to the farming communities in the country,” Senior Undersecretary Domingo Panganiban said. He added that last June 1, 2023, the DA’s National El Niño Team (DA-NENT) convened partner agencies from the Food Security Group under the National El Niño Team of the National Disaster Risk Reduction and Management Council (NENT-NDRRMC) for its 1st Inter-agency Meeting to discuss the actions taken and plans of the member-agencies. Panganiban said DA Field Operations Service Director and DA-NENT Chairperson U-Nichols Manalo presented the DA El Niño Mitigation and Adaptation Plan for crops, fisheries, and livestock sub-sectors. The plan is based on the four thematic areas of the DRRM framework - prevention and mitigation, preparedness, response, and rehabilitation and recovery. The strategies identified include dissemination of information, education, and communication materials, proper water management, prepositioning of resources, crop diversification, adjustment of planting calendar, buffer stocking of inputs, and promotion of short cycle and drought tolerant crops, among others. “DA is already preparing for the worst scenario for El Niño this year. Nevertheless, we will be of course expecting PAGASA to provide us with regular updates on this. Sana po ay hindi naman magtuloy, but we should always prepare for the worst case scenario,” DA Assistant Secretary for Operations Arnel De Mesa on the other hand said. He also noted that not all areas in the country will be affected, thus the government initiatives could focus more on areas that will be severely hit. De Mesa also urged the representatives from partner government agencies to facilitate easy access and sharing of information with the DA to guide planning and decision-making activities. “With all of us working together, we shall be able to achieve more,” Panganiban, for his part, said. The members of the DA-led Food Security Group are the Departments of Trade and Industry (DTI), Social Welfare and Development (DSWD), Energy (DOE), Labor and Employment (DOLE), Budget and Management (DBM), Interior and Local Government (DILG), and the National Economic and Development Authority (NEDA). The Department of Science and Technology-Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development (DOST-PCAARRD), and Department of Finance-Philippine Crop Insurance Corporation (DOF-PCIC) are also part of the group. The post DA, partner gov’t agencies brace agri-fisheries sector before El Niño starts appeared first on Daily Tribune......»»
Rice farmers seek bigger financial aid
The one-time financial assistance that the Senate directed the Department of Agriculture (DA) to provide to rice farmers amid the declining prices of palay would not be enough, a group of rice farmers said. (MB file, Keith Bacongco) Federation of Free Farmers (FFF) National Manager Raul Montemayor said rice farmers have lost an average of P10,000 per hectare in the ongoing cropping season due to severely depressed palay prices. This was his response to the joint resolution recently passed by the Senate Committees on Agriculture and Agrarian Reform, which ordered the DA to appropriate some P3 billion in tariffs from rice imports through the 2021 national budget for cash aid to rice farmers. Under the Rice Tariffication Law (RTL), which allowed unlimited rice importation in the Philippines, tariff collections in excess of P10 billion per year can be used for additional support to farmers, including cash transfers. FFF, however, noted that the proposed appropriation would only provide P5,000 per farmer if distributed to some 600,000 farmers tilling one hectare or less. If the actual number of qualified farmers is raised to 1.1 million, the subsidy would only amount to about P2,700 per farmer. Either proposal will be unfair to equally affected rice farmers tilling larger areas, the farmers’ group said. Instead, Montemayor said the government could keep palay prices stable by temporarily imposing safeguard duties or additional tariffs on imported rice. “The government allowed unlimited rice imports, resulting in low palay prices. Now, it will spend P3 billion to partially offset farmers’ losses. If it had instead imposed additional duties on imports, palay prices would not have dropped too much, there would have been no need for cash aid to farmers, and the government might have even earned extra revenues from the safeguard duties,” said Montemayor. Under the Section 10 of RTL or Republic Act (RA) 11203, in order to protect the Philippine rice industry from sudden or extreme price fluctuations, a special safeguard duty on rice shall be imposed in accordance with Safeguard Measures Act. R.A. 8800 or the Safeguard Measures Act, on the other hand, allows additional safeguard duties on top of regular tariffs in case an import surge is shown to be harmful to local farmers. “Safeguard duties will not be inflationary as claimed by the DA, because they will be applied only when there is already a proven oversupply in the market. They can be removed once the situation stabilizes,” said Montemayor. Agriculture Secretary William Dar is not keen on slapping additional tariff on rice imports, and has repeatedly appealed for public understanding about the “short-term” effects of RTL to palay prices. However, he promised to look for other solutions to the plea of the farmers like asking the National Food Authority (NFA), which buys palay at P19 per kilogram (/kg) to boost the government’s buffer stock, to intensify its palay procurement. Instead of cash aid, the FFF proposed that existing funds from the Rice Competitiveness Enhancement Fund (RCEF) and extra tariff collections be re-focused to address current problems of farmers. It noted that half of farmers receiving free seeds under the RCEF had already been using certified seeds in the past, and that many were seeking other types of support that were not available under RCEF. Numerous farmers have also questioned the DA’s promotion of seed varieties like NSIC Rc222, which is of poor quality and are being shunned by traders. “Also, the P5 billion annual fund for mechanization is not moving well, and it might be more practical at this time to preserve job opportunities for farm laborers instead of displacing them with machines,” Montemayor said. “Moreover, the P1 billion budget for extension and training could be realigned, considering that farmers cannot attend training activities due to COVID-related restrictions. The P1 billion for credit could be better used for interest rate subsidies or loan guarantee programs, instead of direct loans which will benefit only 20,000 farmers,” he added......»»
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Remove the chaff from the grains
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