Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 10023

Senate also passes resolution extending 2019 budget validity

A JOINT resolution has been filed at the Senate to extend the validity of the 2019 budget until December 2020, following second reading approval by the House of Representatives on a similar measure.

Senator Juan Edgardo M. Angara filed Senate Joint Resolution No. 7 which seeks to extend the availability of the 2019 appropriations for maintenance and other operating expenses and capital outlays by a year.

“The delay in the passage of the 2019 General Appropriations Act and the election ban on the implementation of infrastructure projects and social services in view of the May 13, 2019 National and Local Elections (resulted in) projects and programs for the delivery of basic services that were not implemented,” according to the resolution.

Mr. Angara’s resolution noted that there were still appropriations that have not been released and unobligated allotment which will result in the reversion of unexpended appropriations.

On Wednesday, the House approved on second reading the chamber’s Joint Resolution No. 19, which consolidates House Joint Resolution No. 9 by Antique Rep. Lorna Regina B. Legarda and House Joint Resolution No. 10 by San Juan City Rep. Ronaldo B. Zamora and Davao Oriental 2nd district Rep. Joel Mayo Z. Almari.

The budget passage was delayed by nearly four months, and when President Rodrigo R. Duterte signed the spending plan in April he vetoed about P95.3 billion in public works items.

The 2019 budget was the first use-it-or-lose-it spending plan passed under new “cash-based” budgeting rules, which gave agencies only a year to disburse the appropriations in order to ensure that funds were spent quickly.

The budget delay has been cited as a factor in the sharp slowdown in economic growth, because of the delays in the release of infrastructure funds, which had to reach the contractors in time for the critical dry-season building window. — Vince Angelo C. Ferreras

Inflation for bottom-30% income bracket falls further in Aug.

By Lourdes O. Pilar, Researcher

INFLATION as experienced by low-income families, cooled further in August to its slowest rise in nearly three years, according to the Philippine Statistics Authority (PSA).

The inflation rate for households in the bottom 30% of the income tables was 2.3% last month, well below the 3.1% in July and 8.3% in August 2018.

The latest reading for bottom-30% inflation was the lowest in 32 months. The medium-term low point was 2.1% in December 2016.

Year-to-date, the inflation for this income segment averaged 4.2%, lower than the 6.4% average a year earlier.

This compares with 1.7% headline inflation experienced by the average household in August, less than the 2.4% in July and 6.4% in August 2018. August’s reading matched the 1.7% logged in September 2016 and was the lowest in three years. The medium-term low is 1.3% posted in August 2016.

The PSA uses the 2012 base year in computing the headline consumer price index (CPI), while for the bottom 30% income households’ CPI, it uses 2000 prices.

Aside from the two measures having different base years, the CPI for the bottom 30% income segment of the population reconfigures the model basket of goods, assigning heavier weight to food, beverage and tobacco (FBT), as well as other necessities more representative of the spending patterns of the poor.

Inflation in the FBT index was 2.3% in August, lower than the 3.2% in July.

Inflation was steady in services at 3.3% and housing and repairs at 4.5%. Inflation fell for clothing to 2.8% from 2.9%; fuel, light and water to 0.6% from 1.2%; and “miscellaneous” items to 2.3% from 2.4%

The food-alone index eased to 1.8% from 2.7% previously.

Food accounts for 35.5% of the theoretical basket of goods used by the average household compared to a poor household’s 75%. Similarly, rice, which is part of the food index, comprises 9.6% of an average household’s consumer price index basket compared to 23% for a poor household.

PSA noted that indices for rice, corn and cereals each registered declines of 1.9% during the month. Increases were noted for cereal preparations (3.3% in August from 3.2% in July) and eggs (3.1% from 2.8%).

Meanwhile, weaker readings were recorded in the indices of dairy products (to 2.5% from 2.8%); fish (to 7% from 7.8%); fruits and vegetables (to 3.8% from 6.3%); meat (to 1.3% from 1.7%); and miscellaneous foods (to 2.9% from 3.2%).

UnionBank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion said in an e-mail that food and fuel prices have been the “driver” for the slowdown.

“The decline in annual increases of food and fuel prices have been the driver. Global oil prices have been on the decline and expectations are for continuing decrease through 2021,” said Mr. Asuncion, adding that the Rice Tariffication Law has had an impact on the price of domestically-grown rice.

The law, which was signed on Feb. 14, liberalized imports which now have to pay a tariff of 35% on shipments of Southeast Asian grain, and has effectively reduced retail prices of the staple.

Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort said in a separate e-mail that inflation for the bottom 30% was the “slowest” in more than 2.5 years.

“It may have been largely due to lower prices of rice, food, and basic commodities compared to a year ago amid the effects of the Rice Tariffication Law that increased the country’s rice imports as well as the local supply of rice, thereby also leading to the sharp year-on-year decline in palay prices as well as some decline in the retail prices of milled rice,” he said.

“Lower prices of food and agricultural products compared to a year ago partly due to the government’s non-monetary measures since late last year in an effort to increase local supply and lower the prices of rice, fish, corn, and other food items in an effort to lower headline inflation also contributed to the sharp slowdown in inflation for the poorest households, since a larger part of their incomes goes to food and other basic necessities compared to other households with much higher incomes,” Mr. Ricafort added.

Inflation experienced by poor households in the National Capital declined to 0.1% in August from 0.9% recorded in July, while those living outside of Metro Manila experienced inflation of 2.4%, down from 3.1%.

RCBC’s Mr. Ricafort expects inflation for the bottom 30% to fall further in the coming months, adding that it “would remain relatively lower largely due higher base/denominator effects.”

“This is seen to further decline and settle within the headline inflation target of the government at 2.0% to 4.0%,” UnionBank’s Mr. Asuncion said.

Congressman rejects ‘pork’ claims in House budget

A LEGISLATOR said Friday that the 2020 budget approved last week by the House of Representatives contained no “pork,” contrary to allegations made by a Senator.

Anakalusugan Party-list Rep. Michael T. Defensor rejected claims by Sen. Panfilo M. Lacson that all 22 deputy speakers each have an additional allocation of P1.5 billion, while each member of the House has been P700 million.

“Walang pork barrel dito sa naipasang (budget) (There is no pork barrel in the approved budget) and the Senate can scrutinize it. Ito naman ay isusumite sa kanila. (It will be submitted to them anyway). Pangalawa, yung budget na sinasabi sa deputy speakers, wala rin pong ganun (There is no extra funding for deputy speakers)“ Mr. Defensor said in a news conference.

He added that the approved budget for the House was P15.6 billion, higher than last year’s P14 billion.

“Because the increase of the budget was from P14 billion… to P15.6 billion. Kapag dinivide mo ‘yan, halos pantay lang (most members will receive reoughly the same amount). In fact, di naman pera ng congressmen ‘yan, kasi yang pondong yan kasama yung mga empleyado ng kongreso, security guard, operating expenses, kuryente, tubig (those funds aren’t for congressmen but for their operating expenses, employees, and utilities)” Mr. Defensor said.

Albay 2nd District Rep. Jose Ma. S. Salceda said earlier that legislators will receive about P100 million each under the proposed 2020 national budget.

In response, Mr. Defensor, who is also the vice chairperson of the House committee on health, said that he requested P500 million to address issues in provincial hospitals.

“Yung P100 million was part of the submission… Ang totoong ni-request ko is about P500 million. Bakit? Kausap ko yung Tawi-Tawi kailangan nila dun ng improvement sa ospital. Kausap ko yung sa Ifugao, yung sa pagtatapos ng kanilang ospital. Kausap ko yung magtatayo ng dialysis centers sa Pampanga at Batangas, pero di ko inexpect na maapprove ako. Request ko lang yun at batay lang yun sa nakikita ko sa nakikita kong pangangailangan sa baba (The 100 million was part of the submission because I requested about P500 million for health facilities in Tawi-Tawi, Ifugao, Pampanga and Batangas. That’s just what I requested based on what I saw were the needs on the ground).“ he said.

“Habang pinapalaki natin ang pondo ng PhilHealth, pagalingin din natin yung mga local hospitals natin para may mapuntahan ang mga tao at di masyadong mahal (While we are providing funds for PhilHealth, we need t improve local hospitals so patients can visit a facility at little expense),” he said.

The P88 billion proposed budget of the Department of Health was slashed by around P10 billion for health services. Meanwhile, government subsidies to PhilHealth and government hospitals have a total allocation of P71.4 billion. — Vince Angelo C. Ferreras

Palay farmgate prices continue falling in Sept.

THE average farmgate price of palay, or unmilled rice, fell 2.4% from a week earlier during the first week of September to P16.28 per kilogram (kg), the Philippine Statistics Authority (PSA) said.

The PSA said the average wholesale price of well-milled rice fell 0.4% week-on-week to P38.62 per kg. At retail, the price fell 0.3% to P42.26.

The wholesale price of regular-milled rice fell 0.6% to P34.40 per kg week-on-week. The retail price fell 0.4% to P37.83.

The PSA also reported that the farmgate price of both yellow and white corn grain fell during the period. Week-on-week, the farmgate price of yellow corn grain fell 0.2% to P13.04 per kg. The average wholesale price was stable at P21.53, but the retail price rose 0.4% to P26.06.

The average farmgate price of white corn grain fell 1.0% week-on-week to P14.38 per kg. The average wholesale price dropped 0.9% to P17.67. The average retail price fell 0.5% to P26.78. — Vincent Mariel P. Galang

Electronics-dependent economies seen taking a hit from trade war

ECONOMIES in developing Asia heavily exposed to the electronics sector could suffer disproportionately from the US-China trade war, economists tracking the region said.

“Electronics is more important to developing Asia compared to the rest of the world,” Abdul Abiad, director for Macroeconomic Research at the Asian Development Bank’s Economic Research and Regional Cooperation (ERRC) Department at the Asian Development Bank (ADB) said.

He was speaking at a forum jointly organized by the ASEAN Society of the Philippines and the Management Association of the Philippines (MAP) in Makati on Sept. 27.

Mr. Abiad noted that electronics make up more than half of the Philippines’ exports. According to the Philippine Statistics Authority, electronics accounted for 55.6% of export sales in July, up 2.9% year-on-year.

The region could also benefit from the trade tensions when manufacturers relocate to evade tariffs.

“On the whole, the trade conflict could potentially benefit the rest of developing Asia… It’s now more expensive… for US customers to buy goods from China,” Mr. Abiad said.

According to Park Cyn-Young, also a director at the Regional Cooperation and Integration Division of ADB’s ERRC, ASEAN’s share of the world’s exports grew to 7% in 2018 from 6% in 2006.

In the midst of a global slowdown, the ADB has trimmed its growth forecast for developing Asia, which includes 45 countries in the Asia and the Pacific, to 5.4% in 2019 from its initial forecast of 5.7%. For 2020, the regional lender expects such countries to grow 5.5%, down from their initial forecast of 5.6%.

ADB has likewise further scaled down its outlook on Philippine economic growth to 6% from its already downgated 6.2% outlook in July.

Despite the global headwinds, ADB country director for the Philippines Kelly Bird said Thursday that “reasons why Philippine economic growth is resilient (are)… very strong macroeconomic policy settings, lower inflation, with rather low national debt… and the policy setting in terms of central bank and fiscal setting are really sound.” — Luz Wendy T. Noble

LGUs ordered to certify projects backed by support fund are ongoing

THE Department of Budget and Management (DBM) said local government units (LGUs) have until Nov. 30 to submit a certification for the awarded contracts covered by assitance from a support fund assistance.

According to DBM’s local budget circular no. 116B, awarded contracts funded through the Local Government Support Fund — Assistance to Cities (LGSF-AC) will have to be certified as ongoing and due for completion on a specific date beyond this year.

The certification should also cite the amounts received and to be disbursed to contractors and should be signed by the Mayor and the City Accountant.

DBM said the certification will ensure “timely completion of projects” supported by the funding scheme.

“Concerned LGUs are requested to submit a certification signed by the City Mayor and the City Accountant that: (i) the project is already ongoing and will be completed on a specific date but beyond 31 December 2019; and (ii) the funds received from the LGSF-AC will be disbursed to the concerned contractor according to the approved payment schedule/progress billing,” according to the circular.

The LGSF-AC is used to finance the construction, rehabilitation, repair or improvement of public open spaces.

The circular, dated Sept. 25, was signed by DBM Acting Secretary Wendel E. Avisado.

Meanwhile, an earlier Circular No. 116-A quoted in the statement said that “funds which remain unutilized as of 31 December 2019 shall be reverted to the National Treasury by the recipient cities.” — Beatrice M. Laforga

Shiseido sets up PHL subsidiary, sees double-digit growth

JAPANESE cosmetics firm Shiseido Co., Ltd. has set up a Philippine unit to strengthen its presence in the country, with the investment viewed as a bet on the growth of the domestic beauty industry.

In a briefing late Thursday, the company launched Shiseido Philippines Corp., a joint venture between Shiseido Asia Pacific Pte. Ltd. and distributor Luxasia Partners Pte. Ltd.

“The middle income class is expanding. And we noticed that a lot of people love Japan, the image of Japanese brands is quite positive. So we thought it was time to establish our company in the market,” Shiseido Philippines Managing Director Koji Nakata said in the briefing at Bonifacio Global City.

Shiseido initially entered the Philippine market through a distribution deal in 1990. The company subsequently launched upscale cosmetic brands Nars and Laura Mercier.

Its portfolio also includes fragrances such as Dolce & Gabbana, Elie Saab, Issey Miyake, and Narciso Rodriquez, as well as cosmetic, healthcare, and personal care products.

With an increased presence in the Philippines, Mr. Nakata said the company expects sales to grow at a double-digit pace this year. He declined to give a detailed projection.

The company is banking on its Prestige business, or its upscale brands division, to be one of the main drivers of growth.

Shiseido is also counting on the introduction of mass market brand Senka, whose product line includes facial cleansers priced at about P300. The company will officially launch the brand by end-October.

The company currently has 27 counters located inside shopping malls. Asked if it plans to add more, Mr. Nakata said it will depend on finding suitable locations.

“If we can find the best locations… maybe we can add some counters in the near future,” Mr. Nakata said.

Shiseido Asia Pacific President and Chief Executive Officer Jean-Philippe Charrier added that strong foot traffic in shopping malls will help boost sales moving forward.

“I think the shopping malls are amazing, they drive a lot of traffic in the weekends and I think this is a very good environment for our brands,” Mr. Charrier said in the same briefing.

While its products are more expensive than those on offer from domestic brands, Mr. Nakata said the company expects current patrons of domestic brands to be future customers.

“The make-up user is expanding. They will be our potential customers for the future, because in the future they want to use more high-quality and prestige brands,” Mr. Nakata said. — Arra B. Francia

Phinma cement unit to buy land, port at Bataan plant site

PHINMA Corp. said its cement unit is buying the port facilities and land at its Bataan cement processing terminal for P800 million.

In a statement Friday, the listed company said its 60%-owned unit Philcement Corp. has signed an agreement for the acquisition and takeover of the assets which it previously leased.

“This new agreement and additional investment will be a meaningful part of Phinma’s strategy to provide cost-efficient and reliable supply of construction materials to our customers,” Philcement President and Chief Executive Officer Eduardo A. Sahagun said in a statement.

The cement facility and its port are scheduled to start operations by the fourth quarter of this year. The company earlier said it will have a capacity of two million tons a year.

Phinma said the investment will strengthen its position in the cement industry.

The company in 2004 sold its majority interest in Union Cement Holdings Corp., which was then folded into listed cement manufacturer Holcim Philippines, Inc.

It decided to revive the business due to the growing demand for cement and construction materials in the country given the government’s infrastructure program.

Philcement will sell and distribute cement in selected areas under the Union Cement brand.

Phinma has also branched out to Southeast Asia through a $50-million investment with Song Lam Cement Joint Stock Corp., a subsidiary of Vietnam’s largest privately-owned cement manufacturer.

Incorporated in 1957, Phinma also has investments in education, property development, and hospitality.

Phinma’s net income attributable to the parent fell 35% to P27.84 million in the first half, amid a 26% jump in gross revenue to P5.64 billion.

Phinma shares rose 1.55% or 16 centavos to close at P10.50 on Friday. — Arra B. Francia

PNB to issue P20-billion notes

PHILIPPINE National Bank will raise P20 billion in fresh bonds through a second offer of long-term negotiable certificates due in 2025, the lender said in a statement to the stock exchange on Friday.

In a filing, the Lucio C. Tan-owned bank said the notes will carry an indicative interest rate of 4.25% to 4.375%, with the final rate to be determined during the offer period.

The notes will extend the maturity profile of the bank’s liabilities as part of its overall liability management to support compliance with required central bank liquidity ratios. Proceeds of the notes will also be used for general corporate purposes, the bank said.

The notes offer higher interest rates similar to regular time deposits. But these can’t be pre-terminated but can be sold in the secondary market, making them negotiable.

The lender said the notes will be insured with the Philippine Deposit Insurance Corp. “for up to the maximum insurance coverage and subject to PDIC’s applicable rules and regulations.”

PNB will issue the notes on Oct. 11, with Hong Kong and Shanghai Banking Corp. acting as the sole lead arranger. The selling agents include PNB, HSBC, First Metro Investment Corp. and Multinational Investment Bancorporation. — Luz Wendy T. Noble

Peso strengthens after BSP cuts rates

THE peso strengthened against the dollar on Friday on positive market sentiment after the Philippine central bank cut benchmark interest rates by 25 basis points.

The local currency closed at P51.875 a dollar, 23.5 centavos stronger than a day earlier.

The peso opened at P52.15 and weakened to as much as P52.18 against the dollar. It reached an intraday best of P51.86.

Dollars traded rose to $1.21 billion from $1.15 billion on Thursday.

Atrader traced the stronger peso to positive sentiment arising from the latest round of policy rate cuts.

“The peso was stronger on the back of good economic prospects, with the Monetary Board cutting policy rates further,” he said. “Even though they did not cut the reverse repurchase rate, players expect there will be positive spillover from the Bangko Sentral ng Pilipinas’ (BSP) recent action,” he added.

Another trader said the peso was just tracking other Asian currencies against the dollar. “We are seeing that the flows are favoring the peso right now.”

The central bank on Thursday cut interest rates for the third time this year by another 25 basis points, bringing the overnight reverse repurchase rate to 4% and the overnight deposit and lending rates to 3.5% and 4.5% respectively.

The board left lenders’ reserve ratio requirement untouched at 16% for big banks, 6% for thrift banks and 4% for rural and cooperative banks. — Luz Wendy T. Noble

NG outstanding debt rises on weaker peso

THE National Government’s outstanding debt rose 1.73% or P135.03 billion from a month earlier to P7.939 trillion as of end-August, due to the peso’s depreciation and net issuances of both external and domestic loans, the Treasury bureau said in a statement on Friday.

Of the total stock, 33.59% came from external markets while 66.41% was borrowed locally. National government debt increased by 8.9% or P646.58 billion from end-2018 and by 11.8% or P835.23 billion from a year earlier, it said.

National government domestic debt reached P5.272 trillion, 0.4% or P21.63 billion higher than a month earlier. The increase in the domestic debt in August was the combined effect of the net issuance of government securities worth P21 billion and the P630 million impact of the peso’s depreciation on onshore dollar bonds, the Treasury said.

US Senate body wants de Lima critics barred

A SENATE committee in the United States has endorsed a bill barring Philippine officials involved in the “politically motivated imprisonment” of Senator Leila M. De Lima, a staunch critic of President Rodrigo R. Duterte’s war on drugs.

US Senator Dick Durbin tweeted on Friday that the Senate appropriations committee had approved the measure. “We must free Leila now,” he said.

“The palace considers such undertaking as a brazen attempt to intrude into our country’s domestic legal processes given that the subject cases against the detained senator are presently being heard by our local courts,” presidential spokesman Salvador S. Panelo said in a statement.

Ms. de Lima has been detained since February 2017 after she was indicted for allowing the illegal drug trade inside the national jail in Muntinlupa City while serving as Justice secretary.

Mr. Duterte’s political opponents have accused him of attempting to quash dissent after Ms. de Lima’s arrest in 2017. The senator has been criticizing the president’s drug crackdowns since he was a local mayor.

Mr. Panelo said the bill seeks to pressure the country’s independent institutions, “effectively interfering with our nation’s sovereignty.”

Mr. Panelo said the measure is an insult to the competence of Philippine authorities and makes it appear that the US Senate panel “has the monopoly of what is right and just.”

“It is an outright disrespect to our people’s clamor for law and order,” the spokesman said “It treats our country as an inferior state unqualified to run its own affairs.” — Arjay L. Balinbin

1...10,02210,02310,024...13,834Page 10,023 of 13,834
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube