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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......»»
First relief convoy enters Gaza devastated by ‘nightmare’ war
The first aid trucks arrived in war-torn Gaza from Egypt on Saturday, bringing urgent humanitarian relief to the Hamas-controlled Palestinian enclave suffering what the UN chief labelled a "godawful nightmare". Israel has vowed to destroy Hamas after the Islamist militant group carried out the deadliest attack in the country's history on October 7. Hamas militants killed at least 1,400 people, mostly civilians who were shot, mutilated or burnt to death, and took more than 200 hostages, according to Israeli officials. Israel has retaliated with a relentless bombing campaign on Gaza that has killed more than 4,300 Palestinians, mainly civilians, according to the Hamas-run health ministry. An Israeli siege has cut food, water, electricity and fuel supplies to the densely populated and long-blockaded territory of 2.4 million people, sparking fears of a humanitarian catastrophe. AFP journalists on Saturday saw 20 trucks from the Egyptian Red Crescent, which is responsible for delivering aid from various UN agencies, pass through the Rafah border crossing from Egypt into Gaza. The crossing -- the only one into Gaza not controlled by Israel -- closed again after the trucks passed. The lorries had been waiting for days on the Egyptian side after Israel agreed to a request from its main ally the United States to allow aid to enter. UN chief Antonio Guterres warned Friday that the relief supplies were "the difference between life and death" for many Gazans, more than one million of whom have been displaced. "Much more" aid needs to be sent, he told a peace summit in Egypt on Saturday. US Secretary of State Antony Blinken welcomed the aid and urged "all parties" to keep the Rafah crossing open. But a Hamas spokesman said "even dozens" of such convoys could not meet Gaza's needs, especially as no fuel was being allowed in to help distribute the supplies to those in need. 'Reeling in pain' Tens of thousands of Israeli troops have deployed to the Gaza border ahead of an expected ground offensive that officials have pledged will begin "soon". As international tensions soar, Egyptian President Abdel Fattah al-Sisi was hosting a peace summit in Cairo on Saturday attended by regional and some Western leaders. "The time has come for action to end this godawful nightmare," Guterres told the summit, calling for a "humanitarian ceasefire". The region "is reeling in pain and one step from the precipice", he said. Guterres said "the grievances of the Palestinian people are legitimate and long" after "56 years of occupation with no end in sight". But he stressed that "nothing can justify the reprehensible assault by Hamas that terrorised Israeli civilians". "Those abhorrent attacks can never justify the collective punishment of the Palestinian people," he added. Egypt, historically a key mediator between Hamas and Israel, has urged "restraint" and the relaunch of the long-frozen peace process. But diplomatic efforts to end the violence have made little headway, without the participation of Israel and its enemy Iran, a supporter of Hamas and other armed groups. 'Sliver of hope' A full-blown Israeli ground offensive carries many risks, including to the hostages Hamas took and whose fate is shrouded in uncertainty. So the release of two Americans among the hostages -- mother and daughter Judith and Natalie Raanan -- offered a rare "sliver of hope", said Mirjana Spoljaric, president of the International Committee of the Red Cross. US President Joe Biden thanked Qatar, which hosts Hamas's political bureau, for its mediation in securing the release. He said he was working "around the clock" to win the return of other Americans being held. Natalie Raanan's half-brother Ben told the BBC he felt an "overwhelming sense of joy" at the release after "the most horrible of ordeals". Hamas said Egypt and Qatar had negotiated the release and that it was "working with all mediators to implement the movement's decision to close the civilian (hostage) file if appropriate security conditions allow". Traumatised families with loved ones missing in Gaza demanded more action. "We ask humanity to interfere and bring back all those young boys, young girls, mothers, babies," Assaf Shem Tov, whose nephew was abducted from a music festival where Hamas killed hundreds, said Friday. Devastation Almost half of Gaza's residents have been displaced, and at least 30 percent of all housing in the territory has been destroyed or damaged, the United Nations says. Thousands have taken refuge in a camp set up in the city of Khan Yunis in southern Gaza. Fadwa al-Najjar said she and her seven children walked for 10 hours to reach the camp, at some points breaking into a run as missiles struck around them. "We saw bodies and limbs torn off and we just started praying, thinking we were going to die," she told AFP. In Al-Zahra in central Gaza, Rami Abu Wazna was struggling to take in the destruction wreaked by Israeli missile strikes. "Even in my worst nightmares, I never thought this could be possible," he said. Israel's operation will take not "a day, nor a week, nor a month" and will result in "the end of Israel's responsibilities in the Gaza Strip", Defence Minister Yoav Gallant warned on Friday. Regional tensions flare In Gaza, retired general Omar Ashour said the destruction was "part of a clear plan for people to have no place left to live". "This will cause a second Nakba," he added, referring to the 760,000 Palestinians who were expelled from or fled their homes when Israel was created in 1948. The United States has moved two aircraft carriers into the eastern Mediterranean to deter Iran or Lebanon's Hezbollah, both Hamas allies, amid fears of a wider conflagration. Fire across Israel's border with Lebanon continued overnight, with one Israeli soldier killed, Israeli public radio said. The military said it hit Hezbollah targets after rocket and missile fire. Violence has also flared in the West Bank, where 84 Palestinians have been killed since October 7, according to the Palestinian health ministry. The post First relief convoy enters Gaza devastated by ‘nightmare’ war appeared first on Daily Tribune......»»
Hundreds dead in Israel-Gaza war as Hezbollah launches attacks
Israeli Prime Minister Benjamin Netanyahu on Sunday warned of a "long and difficult" war, as fighting with Hamas left hundreds dead on both sides after a surprise attack on Israel by the Palestinian militant group. The conflict's bloodiest escalation in decades saw Hamas carry out a massive rocket barrage and ground, air and sea offensive Saturday that Israel's army said had killed more than 200 Israelis and wounded 1,000, while soldiers and civilians were taken hostage. Gaza officials said intense Israeli air strikes on the coastal enclave had brought the Palestinian death toll to at least 256, with nearly 1,788 wounded. As fighting raged Sunday, Lebanon's powerful Iran-backed Hezbollah movement said it had fired "large numbers of artillery shells and guided missiles" at Israeli positions in a contested border areas "in solidarity" with Hamas. Israel's army had earlier said it fired artillery on southern Lebanon in response to a shot from the area without identifying the attackers. "We are embarking on a long and difficult war that was forced on us by a murderous Hamas attack," Netanyahu said on X, formerly Twitter, early Sunday. "The first stage is ending at this time by the destruction of the vast majority of the enemy forces that infiltrated our territory," he added, pledging no "respite" until victory. Overnight Israel battered the Gaza Strip with air strikes as rockets from the blockaded Palestinians territory rained on Israel. Sunday morning gun still battles raged between Israeli forces and hundreds of Hamas fighters in multiple locations, including at the Sderot police station across the border from Gaza. Police and Israeli army special forces "neutralized 10 armed terrorists" who were holed up inside the station, a police statement said. The bloody air, sea and land attack launched Saturday by Hamas came half a century after the outbreak of the 1973 Arab-Israeli war, taking Israel and the world by surprise. As the UN Security Council called an emergency meeting for Sunday, President Joe Biden voiced "rock solid and unwavering" support for the US ally and warned "against any other party hostile to Israel seeking advantage in this situation". - Hostages and 'so many bodies' - The Israeli army said overnight its forces were still engaged in gun battles in a string of Israel locations, in an operation labelled "Swords of Iron", as reservists were being called up. Hamas earlier released images of several Israelis taken captive, and another army spokesman, Daniel Hagari, confirmed that soldiers and civilians had been kidnapped. "I can't give figures about them at the moment," he said late Saturday, adding there was also a "severe hostage situation" in the Negev desert communities of Beeri and Ofakim east of Gaza. According to Ynet Israeli news website "dozens of Israeli captives, including numerous women, children and elders, are believed to have been taken into the Gaza Strip". The fighting prompted Israel to cut off Gaza's electricity, fuel and goods supplies, Netanyahu said. The Islamist group started the multi-pronged attack around 6:30 am (0330 GMT) on Saturday with thousands of rockets aimed as far as Tel Aviv and Jerusalem, some bypassing the Iron Dome defense system and hitting buildings. Hamas fighters -- traveling in ground vehicles, motorized paragliders and boats -- breached Gaza's security barrier and attacked nearby Israeli towns and military posts, opening fire on residents and passersby. "Send help, please!" one Israeli woman sheltering with her two-year-old child pleaded as militants outside opened fire and tried to break into their safe room, Israeli media reported. Bodies were strewn on the streets of the Israeli town of Sderot near Gaza and inside cars, the windscreens shattered by a hail of bullets. "I saw many bodies, of terrorists and civilians," one man told AFP, standing beside covered corpses on a road near Gevim Kibbutz in southern Israel. "So many bodies, so many bodies." AFP journalists witnessed Palestinian armed men gather around a burning Israeli tank, and others driving a seized Israeli military Humvee vehicle back into Gaza, where they were met by cheering crowds. - 'Gates of hell' - Israeli army Major General Ghasan Alyan warned Hamas had "opened the gates of hell". An AFP journalist in Gaza saw clouds of dust from the remains of bombed residential towers which Gaza's interior ministry said contained 100 apartments. Israel's military said it had warned residents to evacuate before targeting the multi-story buildings used by Hamas. The escalation follows months of rising violence, mostly in the occupied West Bank, and tensions around Gaza's border and at contested holy sites in Jerusalem. Before Saturday, at least 247 Palestinians, 32 Israelis and two foreigners had been killed this year, including combatants and civilians, according to Israeli and Palestinian officials. Hamas labeled its attack "Operation Al-Aqsa Flood" and called on "resistance fighters in the West Bank" as well as in "Arab and Islamic nations" to join the battle. Its armed wing, the Ezzedine al-Qassam Brigades, claimed to have fired more than 5,000 rockets, while Hecht said Israel had counted more than 3,000 incoming rockets. Hamas chief Ismail Haniyeh said the group was on the "verge of a great victory", vowing to press ahead with "the battle to liberate our land and our prisoners languishing in occupation prisons must be completed". - 'Dangerous precipice' - Air raid sirens wailed across southern and central Israel, as well as in Jerusalem on Saturday, and there were major disruptions at Tel Aviv airport where many carriers canceled flights. Israel said schools would remain closed on Sunday which marks the start of the week. Hamas took control of Gaza in 2007, leading to Israel's crippling blockade of the impoverished enclave of 2.3 million people. Israel and Hamas have since fought several wars. The last major military exchange, in May, killed 34 Palestinians and one Israeli. Violence also erupted across the West Bank, including annexed east Jerusalem, with five Palestinians killed and 120 wounded in clashes with Israeli forces and settlers, Palestinian medical services said. Countries around the world condemned the wave of attacks by Hamas, which Israel, the United States and European Union consider a terrorist group. European Commission President Ursula von der Leyen called the attack "terrorism in its most despicable form". But Hamas drew support from other foes of Israel, with Iran's supreme leader declaring he was "proud". UN Middle East peace envoy Tor Wennesland warned of "a dangerous precipice" and called on all sides to "pull back from the brink". (Rosie Scammell with Adel Zaanoun in Gaza) az-rsc-jd/hkb © Agence France-Presse The post Hundreds dead in Israel-Gaza war as Hezbollah launches attacks appeared first on Daily Tribune......»»
Business confidence up among Japan’s big manufacturers
Confidence among Japan's largest manufacturers rose as business conditions improved for the second-straight quarter, a key survey showed Monday. The Bank of Japan's closely watched quarterly Tankan survey is considered the broadest indicator of how Japanese businesses are faring. It reports the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable. A positive figure means more businesses feel optimistic than pessimistic. Among major manufacturers, business confidence rose to plus nine from plus five three months earlier, the survey showed. The headline figure -- the highest level since June last year -- came after the first improvement in seven quarters in July, and beat market expectations of plus six. Optimism also grew among non-manufacturers, from plus 23 to plus 27, which was the sixth-straight quarterly improvement and the highest level since November 1991 and against market expectations of plus 24. Positive figures in the survey are "driven by a strong automotive industry buoyed by the resolution of the semiconductor supply shortage that has plagued the industry this year," Hiroyuki Ueno, senior economist at Sumitomo Mitsui Trust Asset Management (SuMi TRUST), said ahead of the survey's release. "In the non-manufacturing sector, the continued boom in inbound travel is supporting business confidence," he said. Analysts have said the BoJ's latest survey is among the key data affecting the central bank's policy decisions. The post Business confidence up among Japan’s big manufacturers appeared first on Daily Tribune......»»
Market continues retreat ahead of central bank meetings
The benchmark Philippine Stock Exchange index plunged for a third consecutive session yesterday as investors stayed on the sidelines ahead of the much-awaited Bangko Sentral ng Pilipinas and US Federal Reserve meetings this week......»»
Analysts predict inflation rate at around 5.0% for August
The country's inflation rate will remain above the government's 2 to 4 percent target band, said private sector economists who slightly upgraded their price-rise forecasts for August. A DAILY TRIBUNE poll of analysts over the weekend yielded a median estimate of 5.0 percent for August inflation, within the 4.8 to 5.6 percent forecast given by the Bangko Sentral ng Pilipinas (BSP) last Thursday. If the August number matches the poll consensus, the median estimate will be higher than the 4.6 percent print in July 2023 but lower than the 5.4 percent inflation rate in June 2023. The Philippine Statistics Authority is expected to release the August inflation data on Tuesday, 5 September. Bank of the Philippine Islands's lead economist Emilio "Jun" Neri Jr. said higher prices of liquefied petroleum gas (LPG), kerosene, diesel and vegetables likely drove the Consumer Price Index much higher month-on-month. "Lower electricity (and) other food items may offset some of this," Neri said in an email to Daily Tribune. Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the country's higher local palay and rice prices are one of the "main catalysts" for the August inflation print due to weather disturbances in most Southeast Asian countries affecting rice exports. He added that the agriculture damages caused by tropical storms in Northern and Central Luzon likewise affected the prices in the country. Ricafort likewise attributed the higher fuel prices and depreciating Philippine Peso against the US Dollar to the slightly higher inflation rate for August. "However, these are offset by mostly softer economic data in China and other countries, as partly weighed by higher inflation that reduced household spending and higher interest rates that led to higher borrowing costs," Ricafort said in a Viber message. Security Bank's senior assistant vice president and chief economist Robert Dan Roces also shared the same insights with other economists, saying that the primary factors contributing to the slight increase in the August inflation print are fuel and food prices. "Although the current diesel pump price is significantly lower than the P75 per liter average recorded in June of the previous year, food and fuel prices remain the main drivers of inflation. Notably, farm gate prices of other food items decreased in August compared to July," Roces said in an email. Despite these factors, Roces said the retailers may either be reluctant to reduce current prices or the price reduction price may be taking some time. Roces also underscored that the current inflation increase is mainly driven by the price of rice, which has recently surged by up to P10 per kilo. "Looking ahead, we still see that inflation will fall into the Bangko Sentral ng Pilipinas (BSP) target range of 2 percent to 4 percent by the fourth quarter of this year, barring sustained spikes in rice and fuel in the remaining months of 2023," Roces said. China Banking Corp. chief economist Domini Velasquez said core inflation is expected to continue its downtrend to around 6.0 percent in August despite the projected higher headline rate. "If realized, we do not expect BSP to react immediately to the expected inflation print with higher policy rates. Shocks for August were largely supply-side but have not, so far, detailed the inflation path toward the target range in (the fourth quarter). We still expect inflation to fall within the BSP's target by November," Velasquez said. The post Analysts predict inflation rate at around 5.0% for August appeared first on Daily Tribune......»»
Bank lending declines, consumer loans rise
Bank lending of universal and commercial banks posted slower expansion amid higher money supply in the country, data from Bangko Sentral ng Pilipinas showed on Thursday. Preliminary data showed that domestic liquidity (M3) grew by 5.9 percent year-on-year to about P16.4 trillion in June 2023 from 6.6 percent in May, driven by the sustained expansion in bank lending to non-financial private corporations and households. On a month-on-month seasonally-adjusted basis, M3 increased by about 0.2 percent. Domestic claims rose by 10.1 percent year-on-year in June from 11.4 percent in the previous month. Claims in the private sector grew by 7.9 percent in June from 9.3 percent in May. Net claims on the central government also expanded by 17.2 percent in June from 18.3 percent in May, owing mainly to the borrowings by the National Government. Net foreign assets in peso terms fell by 2.8 percent year-on-year in June following a 2.7-percent expansion in May. The BSP's NFA position declined by 0.6 percent in June after increasing by 4.2 percent in the previous month. Meanwhile, the NFA of banks declined on account of higher bills payable. "Looking ahead, the BSP will continue to ensure that domestic liquidity conditions remain in line with the BSP's price and financial stability objectives," BSP said. Meanwhile, U/KBs' outstanding loans, excluding those placed in the central bank's reverse repurchase facility, grew at a slower rate of 7.8 percent year-on-year in June from 9.4 percent in May due to a continued rise in lending to key sectors. On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, increased by 0.6 percent. Outstanding loans to residents, net of RRPs, also increased at a softer pace of 7.9 percent from 9.3 percent in May. Outstanding loans for production activities went up by 6.3 in June, following a 7.9-percent expansion in the previous month due to a continued rise in lending in electricity, gas, steam and airconditioning supply (11.8 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (9.7 percent); real estate activities (3.8 percent); financial and insurance activities (7.7 percent); and information and communication (11.2 percent). Likewise, outstanding loans to non-residents went up by 4.8 percent in June from 13.2 percent in the previous month. Meanwhile, consumer loans to residents rose at a slightly faster rate of 23.7 percent in June from 22.7 percent in May given the increase in credit card and motor vehicle loans. "The slowdown in credit activity reflects the impact of monetary policy tightening which continues to work its way through the economy," BSP said. "Looking ahead, the BSP remains prepared to ensure that domestic liquidity and lending dynamics are in line with its price and financial stability objectives," BSP added. The post Bank lending declines, consumer loans rise appeared first on Daily Tribune......»»
Gov’t seeks Indon capital
Finance Secretary Benjamin Diokno presented to Indonesia’s business community the Philippine economic plans for securing investments in infrastructure, energy and technology. In a statement by the Department of Finance on Thursday, it said Diokno conducted the talk in Jakarta City on Wednesday ahead of the 10th ASEAN Finance Ministers and Central Bank Governors’ Meeting from 24 to 25 August. The listeners included members of the Indonesian Chamber of Commerce and Industry and the Philippine Business Club Indonesia, and officials of foreign embassies in Jakarta. Diokno said the Philippine lawmakers are now studying all measures for faster public-private partnerships or PPPs as the Marcos administration aims to build 197 infrastructure flagship projects, including railways, airports and water management, among others. PPP crucial “The PPP Act, which is currently pending in the Senate, consolidates all legal frameworks on PPP and creates a unified system for investors to refer to when engaging in PPP projects,” DoF said. To build more capital for Philippine infrastructure development and diversify investment channels, Diokno said government agencies are now crafting the rules and regulations of the Maharlika Investment Fund. “This is the Philippines’ first sovereign investment fund that will serve as a platform for investors to engage in direct equity investments in Philippine ventures,” he said. Diokno said both the legislative proposal and newly approved sovereign fund will support economic expansion from liberalized investment laws passed by the previous Duterte administration. Diokno shared amendments to the Public Service Act which now allows full foreign ownership from 40 percent previously of various businesses, such as airlines and telecommunications. Amid growing concerns with climate change, the finance chief said this applies also to renewable energy facilities, such as solar plants. Indonesia, along with China and India, is among the world’s largest exporter of coal, according to the International Energy Agency. However, Indonesia vowed to achieve net-zero carbon emissions by 2060, while it is 2050 for the Philippines. To ensure efficient management and profitability of infrastructure, Diokno said the government also eased processes for foreign investors under the Build-Operate-Transfer Law. “To help foster the development of high quality, modern, and sustainable infrastructure in the country, we wasted no time in building a fertile business and investment ecosystem for private players,” Diokno said. The post Gov’t seeks Indon capital appeared first on Daily Tribune......»»
Norway’s sovereign wealth fund earned 131-B euros in first half of year
Oil producer Norway's sovereign wealth fund earned 131 billion euros in the first half of the year, the country's central bank said in a statement on Tuesday. The performance, lifted by the financial markets, represented a return of 10 percent and helped boost the fund's value to 15,299 billion kroner (1,332 billion euros) at the end of June. In six months, the fund has almost wiped out the huge 1,637 billion kroner loss incurred last year as a result of the war in Ukraine and the global economic downturn. Norway's sovereign wealth fund is the world's biggest, according to the Sovereign Wealth Fund Institute, just ahead of two Chinese funds. Fuelled by revenues from Norway's state-owned oil and gas companies, the fund is aimed at financing future spending in the generous welfare state. Since the start of the year, the vast fund has also benefited from the weakening of the krone, which has increased the value of assets held in dollars, euros, and other foreign currencies. Norges Bank had been set to publish its half-year results on Wednesday. It did not give a reason for publishing the results on Tuesday. The post Norway’s sovereign wealth fund earned 131-B euros in first half of year appeared first on Daily Tribune......»»
Stocks waver on uncertain rate outlook
Concerns about further interest rate hikes weighed on stock markets Monday even as data pointed to economic fragility in the United States and Europe -- but Wall Street eked out gains to start the week. Investors were spooked Friday by US jobs data that showed moderate hiring but further wage increases, underscoring persistent inflation pressures. Many have been betting the Federal Reserve is near the end of its monetary tightening cycle as it seeks to engineer a "soft landing" for the world's largest economy -- a strategy also being pursued by the European Central Bank. This refers to an outcome where inflation comes down on the back of interest rate hikes, without triggering a major recession. But Fed governor Michelle Bowman doused those hopes in a speech on Saturday, saying "consistent evidence" was needed that price increases are slowing. "I also expect that additional rate increases will likely be needed to get inflation on a path down to the FOMC's two percent target," she said, referring to the policy-setting Federal Open Market Committee. Higher rates would increase the risk of broader economic slowdowns on both sides of the Atlantic. Bowman's comments underscored "the growing uncertainty that is not only starting to permeate central bank thinking but also investor sentiment more broadly", said Michael Hewson, chief market analyst at CMC Markets. As a result, investors are likely to take a wait-and-see stance ahead of US consumer price data due on Thursday. For now, all three major US indices advanced to end the day, with the Dow gaining 1.2 percent and the broad-based S&P 500 climbing 0.9 percent. The tech-focused Nasdaq rose 0.6 percent, although it was initially pulled off of opening gains. Apple shares lost 1.7 percent after the company warned of further revenue declines, while Tesla also stumbled on news that its longtime chief financial officer was leaving. "Traders are punishing a couple of the most highly-weighted 'Big Tech' behemoths like Apple and Tesla," said Matthew Weller, research chief at StoneX, noting a "mixed" second-quarter earnings season for US companies overall. European markets closed little changed, tracking Wall Street's weakness on Friday and a mixed showing in Asia amid signs of further economic headwinds. Germany's industrial output plunged in June, official figures showed, with the economy ministry warning of a gloomy outlook as high energy prices and interest rates continued to take their toll in Europe's biggest economy. In Britain, average UK property prices fell 0.3 percent in July from June, major mortgage provider Halifax said, as homeowners struggle with surging borrowing costs. "Early economic data has done little to help lift the outlook for growth in Europe," said Joshua Mahony, chief market analyst at Scope Markets. Elsewhere Monday, oil prices fell after a pre-weekend rally, in part reflecting supply concerns after a Russian oil tanker in the Black Sea was struck by Ukrainian drones. The Black Sea strikes increase geopolitical risks, according to analysts at DNB, noting the "significant volumes" of both crude oil and refined fuels transported via the Black Sea. The post Stocks waver on uncertain rate outlook appeared first on Daily Tribune......»»
Huge mass in Lisbon ahead of pope’s arrival for ‘Catholic Woodstock’
A sea of flag-waving pilgrims from around the world packed a Lisbon park on Tuesday for an open-air Mass that kicked off a week-long jamboree of Catholic youth on the eve of the arrival of Pope Francis. Lisbon's patriarch, Cardinal Manuel Clemente, delivered the homily at the service held at the hillside Eduardo VII Park with sweeping views of the Portuguese capital and the Tagus River. "Lisbon welcomes you wholeheartedly," he told the crowd as pilgrims waved national flags in the air. Local authorities expect some 300,000 people to attend the opening Mass of World Youth Day, which is actually a week of religious, cultural, and festive events held every three years in a different city. Francis is set to arrive in Lisbon on Wednesday morning to join the event, which has been dubbed the "Catholic Woodstock". The 86-year-old pontiff is by Church standards the most liberal pope in decades and is very popular with young people. During his papacy, he has tried to create a more compassionate church, reaching out to the gay community and talking frankly to youngsters about abortion, divorce, and gender identity. "Pope Francis is open to young people," said Cristina Kelly, a 39-year-old who came from Brazil, just before the start of the Mass. "He called on us and we came. People need that today, for young people to be called to God," she told AFP. 'Recharge spiritual battery' In Portugal, the pope has a typically packed schedule for his five-day visit, despite having spent nine nights in hospital after undergoing hernia surgery in June. Francis, the first Latin American pope, is due to make 11 public pronouncements and hold numerous meetings, and on Saturday will visit the shrine of Fatima north of Lisbon. Church organizers expect one million faithful will attend the event's closing mass which will be delivered by the pope on Sunday at a waterside park on the outskirts of Lisbon. Images of the pope were on display on banners across the city as well as on screens on automatic bank machines along with the message: "I am with you". A Lisbon pastry shop is even selling cookies with the image of the smiling pontiff wearing a crucifix. "My goal is to recharge my spiritual battery because sometimes, as young people, we let it run low," Xochilt Cecilia Velis, a 24-year-old from El Salvador, told AFP in central Lisbon. World Youth Day is part of the Vatican's efforts to galvanize young Catholics at a time when secularism and disgust over clerical child sex abuse cause some faithful to abandon the Church. Meeting with abuse victims The gathering comes as the Portuguese Catholic Church is reckoning with its legacy of clerical sexual abuse. A report released in February by an independent commission determined that at least 4,815 children had been abused by clergy members in Portugal since 1950. The inquiry -- similar to audits elsewhere in Europe and the Americas -- concluded that the Church hierarchy "systematically" tried to conceal the abuse. Pope Francis is scheduled to meet privately with abuse victims during his visit but the date of the encounter or other details has not been released. Initially scheduled for August 2022, but postponed due to the coronavirus pandemic, the Lisbon World Youth Day is the 16th international edition of what has become the largest gathering of Catholics worldwide. Church organizers said there are pilgrims registered to take part in this year's event from every country in the world except the Maldives. A brainchild of the late Pope John Paul II, the event started in 1986. The current one is the fourth presided over by Pope Francis, who became head of the Catholic Church in 2013. The last three events took place in Rio de Janeiro, Brazil in 2013, in Krakow, Poland in 2016, and in Panama City, Panama in 2019. The post Huge mass in Lisbon ahead of pope’s arrival for ‘Catholic Woodstock’ appeared first on Daily Tribune......»»
Equities edge higher as inflation moderates
Global stocks mostly edged up on Monday as investors remained optimistic that interest rates will not go higher and China made moves to boost lackluster growth. Wall Street stocks finished a choppy session modestly higher, as investors traded cautiously ahead of key economic and earnings releases later in the week. European stock markets were boosted by data showing the economy grew in the second quarter and inflation slowed in July, raising hopes the European Central Bank will be able to hold off from hiking interest rates. Asian equities closed with gains, tracing a pre-weekend bump on Wall Street and bolstered by new pledges from China of measures to stimulate its stuttering economy. In the eurozone, official figures on Monday showed the economy grew 0.3 percent in the second quarter, while inflation eased to 5.3 percent in July from 5.5 percent the previous month. That could support expectations for a pause in ECB rate hikes after its chief Christine Lagarde said Sunday "we are reaching our goal" of inflation at around two percent. "We do expect a much lower reading in inflation by the end of the year," said Bert Colijn, a senior economist at ING. Inflation remains much higher in the UK, at nearly eight percent, putting the Bank of England on course to raise interest rates once more on Thursday. In China, the world's second-largest economy, the government announced fresh measures to boost consumption days after unveiling some initiatives for light industry. The move comes as spending by China's vast number of consumers remains subdued even after the lifting of strict Covid containment measures late last year. A fresh round of figures showed the country's manufacturing activity continued to shrink in July, albeit at a slightly slower pace than last month. Hopes for a government drive to kickstart the economy have provided much-needed support to markets over the past week, even as some observers warn the large-scale measures seen in the past were unlikely. Oil prices kept rising. "Fears that Saudi Arabia will go further and extend their production cuts into September is seeing demand return at the same time as the US economy looks to be faring better than expected," said analyst Michael Hewson at CMC Markets. In currency markets, the yen continued its retreat against the dollar as the Bank of Japan announced a move to buy government bonds. This was seen as a message to the market that the central bank was committed to keeping the long-term interest rate in check. The bank slightly increased the flexibility of its super-easy monetary policy last week, but it was seen as a small enough change not to disrupt the market. The post Equities edge higher as inflation moderates appeared first on Daily Tribune......»»
BSP: Inflation likely below 5% this July
The Bangko Sentral ng Pilipinas sees the Philippine headline inflation rate to ease for a sixth straight month, with the central bank saying it will likely settle within a 4.1 percent to 4.9 percent range this month. In a statement ahead of the data release on 4 August, BSP explained that four factors could contribute to the country's inflation decline this month. These factors include lower electricity rates; declines in the prices of meat, fruits and fish items; the rollback in LPG prices; and the peso appreciation. However, higher prices of rice and vegetables and higher domestic oil prices are the primary sources of upward price pressures in July. The BSP said it would continue monitoring developments affecting the outlook for inflation and economic growth in line with its data-dependent approach to monetary policy formulation. The post BSP: Inflation likely below 5% this July appeared first on Daily Tribune......»»
‘Rate cut premature’
Talking about cutting interest rates ahead of the US Federal Reserve can be considered premature as the central bank remains in a wait-and-see mode as to how the one-year policy tightening will impact the economy......»»
US economy adds 209,000 new jobs as hiring slows
Hiring in the United States slowed in June, the Labor Department said Friday, providing a much-needed signal that the American economy is cooling ahead of another interest rate decision later this month. The figures came in below analysts' expectations, providing some respite for the US Federal Reserve as it mulls a return to interest rate hikes later this month to tackle inflation still well above its long-term target of two percent. The world's biggest economy added 209,000 jobs last month, down from a revised figure of 306,000 in May, the Labor Department said. Meanwhile, the unemployment rate edged down to 3.6 percent, remaining close to historic lows, underscoring the enduring strength of the labor market. The hiring figure came in below the median expectation of 240,000 new jobs in a survey of economists conducted by MarketWatch, while the unemployment rate was in line with predictions. All three major US stock indexes on Wall Street finished the day in the red amid growing expectations of additional interest rate hikes this year "It's a step in the right direction, but we're not near the level that we would need to see to be convinced that the labor market is significantly cooling down," Oxford Economics' lead US economist Oren Klachkin told AFP. Even with job growth easing, average hourly earnings ticked up by 0.4 percent month-over-month, rising by 4.4 percent on an annual basis. "The labor market is still very strong, wages are still rising at a very strong pace, unemployment is still very low, and nonfarm payrolls rose at a pace that is way above what the Fed wants," Klachkin said. Bidenomics in action US President Joe Biden hailed Friday's jobs report as evidence of "Bidenomics in action." "Our economy added more than 200,000 jobs last month -- for a total of 13.2 million jobs since I took office," he said in a White House statement. "That's more jobs added in two and a half years than any president has ever created in a four-year term," he added. June's new jobs came mainly from increases in employment in government, health care, social assistance, and construction, the Labor Department said. "The economy has proven remarkably resilient, with smaller businesses absorbing layoffs at larger firms," KPMG chief economist Diane Swonk wrote in a note to clients. July hike pretty certain Minutes published earlier this week of the Fed's last meeting showed that several members of its rate-setting committee supported another hike in June to tackle high inflation. Ultimately, the Federal Open Market Committee voted to pause the Fed's campaign of 10 consecutive rate increases, indicating that two additional increases would likely be needed before the end of the year to bring inflation back down. Speaking shortly after the jobs report was released on Friday morning, Chicago Fed president Austan Goolsbee suggested the US central bank had more work to do to tame inflation. "Overall the job market is outstanding, and is getting back to a well-balanced, sustainable level," he told CNBC. "The consensus of almost all the FOMC in the statement of projections is that, over this year, we will have one or two more hikes. I haven't seen anything that says that's wrong," he said. Friday's labor data underscores the likelihood the Fed will return to its campaign of interest rate hikes later this month, according to Oxford Economics' Klachkin. "Given where the data stand right now I think that a hike this month is pretty certain, and I would say that there are even risks of more hikes in the second half," he said. "The Fed is expected to raise rates at least another half percent before it pauses," KPMG's Swonk said, adding that a hike in July was "all but a done deal" at this point. Futures traders now assign a probability of more than 90 percent that the Fed will raise its base rate by a quarter percentage point at its next meeting on July 25-26, according to data from CME Group. The post US economy adds 209,000 new jobs as hiring slows appeared first on Daily Tribune......»»
M3, bank lending growths reflect
Bank lending of universal and commercial banks or U/KBs and domestic liquidity posted higher expansion in May, data from Bangko Sentral ng Pilipinas revealed over the weekend. Data recently released by BSP showed that U/KBs’ outstanding loans, net of reverse repurchase or RRP placements with the BSP, posted higher annual expansion in May at 9.4 percent from 9.7 percent in April. On a month-on-month seasonally -adjusted basis, outstanding universal and commercial bank loans, net of RRPs, increased by 0.7 percent. Outstanding loans to residents, net of RRPs, went up 9.3 percent in May from 9.6 percent in April. Similarly, outstanding loans for production activities rose 7.9 percent in May after growing 8.3 percent in the previous month. The central bank attributed the growth to the continued increase in loans to significant industries, specifically electricity, gas, steam, and airconditioning supply (14.1 percent); real estate activities (5.5 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (8.6 percent); information and communication (15.9 percent); and financial and insurance activities (7.3 percent). Consumer loans to residents grew slightly faster rate of 22.7 percent in May from 22.3 percent in April due to the increase in credit card, motor vehicle and salary loans. Outstanding loans to non-residents also went up by 13.2 percent in May from 12.2 percent in the previous month. “The moderation in bank lending activity reflects the impact of the BSP’s cumulative policy rate adjustments,” BSP said. “Looking ahead, the BSP will continue to ensure that domestic liquidity and credit dynamics align with its price and financial stability mandates,” it added. P16.3 trillion circulating Meanwhile, BSP said M3 grew 6.6 percent year-on-year to about P16.3 trillion in May 2023. On a month-on-month seasonally-adjusted basis, M3 increased by about 0.3 percent. Domestic claims rose 11.4 percent year-on-year in May from 11.9 percent in the previous month. Claims on the private sector grew by 9.3 percent in May from 9.8 percent (revised) in April, driven by the sustained expansion in bank lending to non-financial private corporations and households. Net claims on the central government also expanded by 18.3 percent in May from 20.2 percent (revised) in April, owing mainly to the borrowings by the National Government. Net foreign assets in peso terms grew by 2.7 percent year-on-year in May following the 0.2-percent contraction in April. The BSP’s NFA position expanded by 4.2 percent in May after increasing by 2.5 percent in the previous month. Meanwhile, the NFA of banks declined on account of higher bills payable. “Looking ahead, the BSP will continue to ensure that domestic liquidity conditions remain consistent with the BSP’s price and financial stability objectives,” BSP said. The post M3, bank lending growths reflect appeared first on Daily Tribune......»»
EU moves closer to launching digital euro
The European Union (EU) on Wednesday took its first significant step towards launching a digital version of the euro, a controversial project that has been questioned by politicians and banks. From China to the United States, Jamaica to Japan, more than 100 central banks worldwide are exploring or preparing to put in place digital currencies as electronic payments grow, changing the way people spend their money. The move to create a digital version of the single currency began in 2020 when European Central Bank (ECB) President Christine Lagarde suggested the idea and her Frankfurt-based body launched a public consultation. The European Commission, the EU's executive arm, published a proposal on Wednesday that will be the legal foundation on which the ECB could launch a digital euro. The currency would be available to individuals living in the euro area and for visitors. It would offer an additional payment option for citizens to use online and offline with their digital wallets, thus ensuring as much anonymity as coins and banknotes. The final law must be backed by the EU's 27 member states and the European Parliament. Digital euro enthusiasts say it will complement cash and ensure the ECB does not leave a gap later filled by private -- usually non-EU -- players and other central banks. "Given that the euro is already the world's second most-traded currency, it is not an area where can afford to stay behind the curve. We need to move ahead with a digital currency," commission vice president Valdis Dombrovskis told reporters. Critics question the need for a digital euro and banks warn of major risks, while the ECB's own study found the public was concerned over payment privacy. The ECB and the commission "have yet to make a compelling case of why we need the digital euro and what added value it will deliver," German MEP Markus Ferber said. Benefits 'outweigh' costs The commission's proposal argued that the digital euro's "long-term benefits... outweigh its costs" and warned, "the costs of no action can potentially be very large". Lagarde said in March that the digital currency was important for resilience and to "safeguard European payment autonomy". Many means of payment are "not necessarily European", she noted, adding it was "very unhealthy to rely on one single source of payment". US giants Visa and Mastercard currently dominate the global card payment market. Others argue, however, that the bloc's plans spell trouble unless the EU takes necessary other steps. Banks have warned of the risk of bank runs as customers could hold their funds in digital euro accounts and wallets, moving them away from the banks' balance sheets. "To shield banks from the risk of deposit flight and to limit the negative impact on banks' ability to finance the economy, it is important to set appropriate and firm limits in holdings and transactions," the European Banking Federation said on Wednesday. The proposal indicates there will be a limit to how much money people can keep in digital euros. ECB officials have suggested a cap of 3,000 euros ($3,300). The digital currency will be granted "legal tender" status, meaning it must be accepted as payment. But there would be exceptions, including for small businesses that do not accept any form of digital payment. The ECB is set to give the formal green light to a digital euro in October and the expectation is it would be available from 2027 onwards. The ECB welcomed the commission's proposal, which it said offered "private intermediaries appropriate economic incentives to distribute the digital euro as they do other digital means of payment while preventing excessive fees for merchants". Privacy concerns The ECB has a difficult battle to win over Europeans. A public consultation showed that the number one priority when it comes to the digital euro is privacy. To calm people's fears, the ECB has stressed it would not attempt to control how people can spend digital currency or use it for surveillance, as critics claim is the case in China. "This is not a Big Brother project for online payments," the EU's financial services commissioner, Mairead McGuinness, said during a press conference in Brussels. "With the digital euro, the data privacy will be the same as for existing private digital means of payment. For offline payments, the data privacy will be even higher." The commission's proposal said the digital euro "will be designed so as to minimize the processing of personal data by payment services providers" and the ECB. The post EU moves closer to launching digital euro appeared first on Daily Tribune......»»
Loan disbursements slow down in April
Credit growth sustained its downtrend for the fourth straight month in April amid the latest pause in the aggressive rate hikes delivered by the Bangko Sentral ng Pilipinas. Preliminary data released by the central bank on Wednesday showed that loans disbursed by big banks eased to 9.7 percent in April, slower than the 10.2 percent revised March total. Meanwhile, outstanding loans for production activities slowed by 8.3 percent in April from 9.0 percent in the previous month. Preliminary data released by the Bangko Sentral ng Pilipinas on Wednesday show that loans disbursed by big banks eased to 9.7 percent in April, slower than the 10.2 percent revised March total. These are largely driven by the continued rise in lending to key sectors, particularly electricity, gas, steam, and air conditioning supply (12.4 percent); wholesale and retail trade, and repair of motor vehicles and motorcycles (10.3 percent); manufacturing (9.3 percent); information and communication (19.0 percent); and real estate activities (4.5 percent). Consumer loans to residents Meanwhile, consumer loans to residents expanded at a faster rate of 22.3 percent in April from 21.8 percent in March, driven by the increase in credit card and motor vehicle loans. But outstanding loans to non-residents also slowed to 12.2 percent in April from the 13.1 percent increase in March. “The sustained expansion in bank lending activity suggests that domestic liquidity remains sufficient to support economic activity,” the BSP said. “Looking ahead, the BSP will continue to ensure that domestic liquidity and credit dynamics are consistent with the prevailing stance of monetary policy, in keeping with its price and financial stability mandates,” it added. The post Loan disbursements slow down in April appeared first on Daily Tribune......»»
BSP expects inflation to ease up soon
Inflation in the country is expected to slow down in May and further ease to below 4 percent by September or October, Bangko Sentral ng Pilipinas governor Felipe Medalla said on Monday. The Central Bank chief made this statement to reporters on the sidelines of a business forum ahead of the 6 June release of the May inflation data. "We notice that inflation has been almost zero after January, at least from one month to the next. This is the temporary effect of prices already being high. Once this effect is gone, inflation may normalize," Medalla said. "Inflation will clearly be significantly lower next year because the base effects will be gone," Medalla added. Medalla said he expects inflation to be below the mid-point of the target by next year. Inflation experienced a decrease for the third consecutive month in April. On 18 May, Medalla said the BSP would maintain its current monetary policy stance, signaling a pause in further tightening. This decision followed a series of interest rate hikes amounting to 425 basis points, which were implemented to address inflationary pressures. However, Medalla also discussed the impact of the US Federal Reserve's decision to raise interest rates. He said the BSP is closely monitoring the situation and is ready to take appropriate measures to protect the Philippine economy. "Of course, we have our inflation problem. But the problem is the market," Medalla said. "The simple thing is that if the interest rate, the policy rate of the BSP must be at least 1 percent base point higher than the policy rate of the Fed," he added. Medalla said the BSP is raising interest rates to keep inflation within target. He said the BSP is also closely monitoring the impact of the US Fed's rate hikes on the Philippine economy. "I think there's too much, but really, we have to be very sensitive," Medalla said. "I think we are one of the countries where the policy rate difference if there's negative. Of course, they have. They've got it on surpluses. But I think the market can still change its mind and be more amenable, more this reactive to the borrowing policy rates," Medalla added. The Central Bank chief said that the BSP is committed to taking the necessary measures to protect the Philippine economy from the impact of the US Fed's rate hikes. He said that the BSP will continue to monitor the situation and will take appropriate action as needed. The post BSP expects inflation to ease up soon appeared first on Daily Tribune......»»
Humans must stay in control of AI, European trade union chief warns
No employee should be "subject to the will of a machine", European trade union chief Esther Lynch has warned, calling for regulation to ensure humans remain in control as artificial intelligence technology advances at breakneck speed. In the same way that European Union treaties protect health and safety in the workplace, rules are needed to guarantee "the human-in-control principle" when it comes to AI, Lynch said in an interview ahead of a major gathering of union representatives in Berlin. "We need to be guaranteed that no worker is subject to the will of a machine," Lynch told AFP, a scenario she said would be "dystopian". Lynch, general secretary of the European Trade Union Confederation since last December, will head the four-day ETUC Congress that kicks off in the German capital on Tuesday. The event, held every four years, brings together hundreds of union officials from more than 40 countries to discuss topics ranging from workers' rights to the future of work, environmental protection, inequality and cross-border union cooperation. German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen are among the speakers scheduled to address the congress. 'Not just the 1 percent' Ever since the wildly popular AI chatbot ChatGPT burst onto the scene late last year, debate has been swirling about how the technology will upend the world of work, potentially transforming many jobs along the way. While supporters point out that AI tools can take over automated or repetitive tasks and free up staff to do more creative work, sceptics worry about job cuts, data protection and losing a human element in some decision-making processes. Lynch, 60, said AI regulation was one of the topics she would be discussing with the EU's Jobs and Social Rights Commissioner Nicolas Schmit during the congress. With every technology there's "a positive side and a negative side, and the same will be true of AI," the Irish woman said. "What we have seen is that whenever you involve workers and their unions in the introduction of technology... the outcomes are better." The EU is currently debating a draft text calling for curbs on how artificial intelligence can be used in Europe, bringing the bloc a step closer to an AI law. It is "critically important" that AI is introduced "in a way that works for working people rather than against them", Lynch said. "It can't be the case that only the top one percent take all of the benefits of AI, and leave everybody else not benefiting from the productivity gains that will come from AI," she went on. "We need to make sure that where parts of jobs or whole jobs or whole industries are displaced, that there are other quality jobs created." Inflation costs Division of wealth will be a key theme at the congress as employees across Europe feel the pain from a cost-of-living squeeze as a result of high inflation. Lynch said while workers were struggling to make ends meet, many companies had benefited from rising prices and enjoyed higher profits and dividend payouts. "Europe's top 1,200 companies' dividends increased by 14 percent" last year, she said, whereas wages only rose by four percent on average. "So it's quite clear who's driving inflation. It's not working people," Lynch said. The European Central Bank's series of interest rate hikes, aimed at cooling inflation, were only worsening the inequality, she added. Higher borrowing costs "aren't the solution for treating dividends in a fairer way," according to Lynch. "The solution for that is: tax those dividends and then redistribute the wealth," she said. The post Humans must stay in control of AI, European trade union chief warns appeared first on Daily Tribune......»»