A recent report by OpenSignal, a United Kingdom-based wireless coverage mapping company, showed PLDT wireless subsidiary Smart Communications, Inc. (Smart) now leads in terms of availability of its fourth-generation (4G) network in both rural and urban areas in the Philippines.
In its analysis conducted from Sept. 1 to Nov. 30., OpenSignal said Smart’s 4G availability, or the time users spend being connected to the 4G network, is 14% higher in urban areas compared with rural areas.
OpenSignal said that during the three-month period, Smart’s 4G availability in rural areas was 70.1% compared with Globe Telecom, Inc.’s 64.8%. In urban areas, Smart scored 82.5% while Globe scored 80.3%.
The mobile analytics firm noted the difference between rural and urban experience highlights the challenge in the quality of mobile experience in rural regions “regardless of operator.”
“(This) provides evidence for why initiatives such as sharing cell towers in rural areas are an important tool to help narrow gaps in the quality of the mobile experience between users in metro areas and those in regional and rural areas,” OpenSignal said.
In terms of the download speed, OpenSignal said the results were “very polarized” across regions, noting that Smart users in rural areas experienced a faster speed than Globe except in Central Luzon, Central Visayas, and Bangsamoro Autonomous Region of Muslim Mindanao (BARMM) wherein the networks tied.
The report noted that in Region 12 and Cagayan, the download speed experience of Smart users “was more than twice as fast as the speed our Globe users saw.”
Users in urban areas experienced “more competitive speeds” on Globe network, OpenSignal said, noting that the network even beat Smart in the Cordillera Administrative Region (CAR).
“But Smart users’ faster speeds made it untouchable in ten urban regions, including the National Capital Region, where our users on Smart benefited from an impressive 15.2 Mbps, an enviable 5.6 Mbps faster than the speeds our Globe users saw in the capital,” the report said.
OpenSignal noted that Smart’s 82% increase in 4G data users last year has resulted in “increased congestion and lower average speeds.”
In a statement, Smart attributed its “sustained improvement” to its higher capital expenditures program this year estimated at P78.4 billion, which includes investments in network, IT systems, and increased LTE coverage and capacity, among others.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin
THE US FEDERAL Reserve held rates steady. — REUTERS
WASHINGTON — The US Federal Reserve on Wednesday held interest rates steady and signaled borrowing costs will not change anytime soon, with moderate economic growth and historically low unemployment expected to persist through the 2020 presidential election.
In its final policy meeting of a tumultuous year, when it was spurred to cut interest rates three times to forestall a slowdown fueled largely by President Donald Trump’s trade war, the US central bank struck a remarkably sanguine tone, confident the actions it had taken so far are working.
“Our economic outlook remains a favorable one, despite global developments and ongoing risks,” Fed Chair Jerome Powell said in a news conference shortly after the release of the latest policy statement and new quarterly economic projections.
“As the year progressed we adjusted the stance of monetary policy to cushion the economy and provide some insurance … This shift has helped support the economy and has kept the outlook on track,” he said.
The policy decision left the Fed’s benchmark overnight lending rate in its current target range between 1.50% and 1.75%, three-quarters of a percentage point below where it started the year.
And after broad disagreement earlier over the direction of policy and dissents at its last four rate-setting meetings, the Fed ended the year on the same page. The vote on its latest policy statement was unanimous, and the new economic projections showed 13 of 17 Fed policy makers foresee no change in interest rates until at least 2021.
The other four saw only one rate hike next year.
Notably, no policy makers suggested lower rates would be appropriate in coming months.
Combined, it’s evidence of a central bank in which the most “dovish” members feel the current low level of interest rates will allow job and wage gains to continue, while the most “hawkish” feel inflation will remain contained — a soft landing for both sides after a year in which recession risks rose, the US bond yield curve inverted, and trade policy disrupted markets.
Mr. Powell, who at the start of his news conference read a brief tribute to the late Paul Volcker, the Fed’s inflation-fighting former chairman, said the central bank now sees the connection between low unemployment and inflation as “very faint.”
“We don’t have to worry so much about inflation,” Powell said, adding it would take a “persistent” jump in the pace of price increases for him to think it warranted higher interest rates.
While the decision not to cut interest rates further may irk Mr. Trump, who has demanded even lower borrowing costs, the Fed’s underlying message that the US economy is in a “good place” bodes well for the Republican incumbent’s reelection.
The only two sitting presidents in the modern era not to have won reelection — Jimmy Carter and George H.W. Bush — both contended with unemployment rates more than twice the level under Mr. Trump. The US jobless rate is currently 3.5%.
Still, the Fed noted, global risks warrant monitoring in the midst of an ongoing US-China trade war, as does the possibility of a downshift in public inflation expectations.
Overall, Fed policy makers see the unemployment rate staying below their estimate of the long-run sustainable level for another three years, even as most expect inflation by then to end up at, or just a little above, the central bank’s 2% target, the new projections showed.
“I think we’ve learned that unemployment can remain at quite low levels for an extended period of time without unwarranted upward pressure on inflation,” Mr. Powell said.
Compared to the 1990s, he said, when the Fed cut rates as an insurance policy against a recession and then raised them again to prevent a tight labor market from fueling unwanted price rises, today “the need for rate increases is less.”
Indeed, the projections also showed policy makers as a group expect interest rates to remain accommodative — that is, below the 2.5% they estimate neither stimulates nor restricts economic growth over the long run — through at least 2022.
US stocks rallied modestly after the decision, which had been widely anticipated by investors. The benchmark S&P 500 index, which was largely flat when the Fed announced its policy decision, closed up about 0.3%.
Yields on US Treasury securities fell in afternoon trading, with the 10-year note last yielding 1.79%. The dollar slid to a four-month low against a basket of major trading partner currencies.
MATERIAL CHANGE
After the Fed’s October policy meeting, Mr. Powell said it would take a “material” change in the economic outlook for the central bank to change rates again, language he repeated on Wednesday without elaboration. The Fed cut rates three times this year, including in October, “strong measures” that Mr. Powell said will take some time to fully show up in the economy.
“It’s ‘steady as she goes’ from the Fed today — the statement provided little groundbreaking news on the path of monetary policy,” Jason Pride, chief investment officer of private wealth at Glenmede Trust Co, said in a statement.
“The prevailing message out of today’s meeting is that the Fed remains on hold, barring any material upside surprises for inflation,” Mr. Pride said.
The new economic projections showed little change from those in September, as policy makers sketched out an economy they feel has skirted recession risks and is poised to grow close to trend for several years more.
A reference in the October policy statement to “uncertainties” about the economic outlook was dropped.
US gross domestic product at the median is projected to grow 2% next year and 1.9% in 2021, which is far short of the 3% annual growth Mr. Trump promised to deliver.
Unemployment is seen remaining at 3.5% through next year, rising to 3.6% in 2021. In a demonstration of the disconnect between that low level of unemployment and inflation, the pace of price increases is expected to rise only to 1.9% next year. — Reuters
FACEBOOK Inc dropped to the 23rd spot in Glassdoor’s list of “Best Places to Work” in 2020 from the seventh it secured last year, amid heightened regulatory scrutiny of the world’s largest social network.
The company received an overall rating of 4.4 out of 5, compared with 4.5 last year, as employees gave relatively lower ratings for Facebook’s senior leadership and work-life balance.
“High profile projects can be extremely political and can really be dragged down by too many cooks in the kitchen. In a post-Cambridge Analytica world there are huge slowdowns in releasing new features or products …,” according to one of the employee reviews on Glassdoor.
Facebook is facing the heat over its handling of user data, misinformation campaigns on the platform, as well as its plan for a global cryptocurrency called Libra.
Still, employee sentiment toward Facebook remained largely positive on better compensation and career opportunities, according to the Glassdoor report released late on Tuesday.
Software company HubSpot Inc topped the 100 best workplaces list, while Alphabet Inc’s Google ranked number 11 and Apple Inc 84. — Reuters
SOUTH KOREA’S popular Korean indie band The Rose will perform at the Samsung Hall at SM Aura in BGC, Taguig City, on Dec. 15, 7 p.m. For information, visit https://mmt.fans/Vh74/ or other social media channels of MyMusicTaste.
MSO fundraising concert
MANILA Symphony Orchestra (MSO) Foundation, Inc.’s presents it’s special concert Sing-Along Messiah with the Manila Symphony Orchestra: A Fundraising Concert for the MSO Scholarship Program on Dec. 15, 7 p.m., at the Union Church of Manila, Rada cor. Legaspi Sts., Makati. The MSO will be joined by the Manila Symphony Junior Orchestra and selected MSO Music Academy teachers and students.
Sinag performances
THE Philippine Women’s University’s Indayog Gongs perform Christmas carols using gongs and bamboo instruments on Dec. 15, 6 and 7 p.m., at the Front Lawn of the Cultural Center of the Philippines (CCP). The performances complement the lantern installation at the CCP facade as well as the sundial art installation by multimedia artist Abdulmari “Toym” Imao, Jr. at the CCP Front Lawn, the installation represents the role of arts and culture in society over time. The light and sound show has daily performances at 8 and 9 p.m., except on evenings where there are performances at the CCP Main Theater. Admission is free.
Outdoor movie nights at CCP
ENJOY Cinema Under the Stars on Dec. 13, 14, and 15, 6 p.m. at the Front Lawn of the Cultural Center of the Philippines (CCP) with the best of Cinemalaya and Gawad Alternatibo films. It will be followed by the Sinag: Festival of Radiance lights show. Admission is free.
BP’s Cinderella
BALLET Philippines presents Cinderella, choreographed by National Artist for Dance Alice Reyes, with performances on Dec. 13 to 15 at the Main Theater of the Cultural Center of the Philippines. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).
TP’s Lam-ang
TANGHALANG Pilipino presents Lam-ang, an ethno-epic musical that re-imagines the Ilocano epic “Biag ni Lam-ang,” with performances until Dec. 15 at the Little Theater of the Cultural Center of the Philippines. Directed by Fitz Edward Bitana and with musical direction by TJ Ramos, it stars JC Santos as the epic hero Lam-ang. Check TicketWorld for the performance schedules and for tickets (www.ticketworld.com.ph, 891-9999).
Jose Mari Chan at the mall
JOSE MARIE CHAN, the man behind the Christmas perennial “Christmas in Our Hearts,” will be performing at Robinsons Magnolia on Dec. 15, 6 p.m. Get exclusive access to this show by presenting a single/accumulated receipt purchase from Dec. 7 to 15 worth P2,000 from any store in the mall, or P3,000 from Robinsons Supermarket or Robinsons Appliances in Robinsons Magnolia. One ticket is good for one person only. This is valid on a first come, first served basis. For complete mechanics, follow Robinsons Magnolia on Facebook; @RobinsonsMallsOfficial on Instagram; and @RobinsonsMalls on Twitter.
The Quest for the Adarna
REPERTORY Philippines’ Theater for Young Audiences presents a musical retelling of the Philippine folk tale “Ibong Adarna.” The Quest for the Adarna has performances until Jan. 26 at Onstage Theater, Greenbelt 1, in Makati. In the kingdom of Berbania, the king falls mysteriously ill and can only be healed by the song of the mythical bird, Adarna, which can be found in its mountain home. His three sons take turns attempting the dangerous journey to help their father. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).
Open house
AS PART OF its yearly tradition during holidays, the Metropolitan Museum of Manila will hold a Christmas Open House on Dec. 14, 10 a.m. to 5:30 p.m., as thanksgiving for all the support given to the museum exhibits and programs for the past year. There will be a guided tour of the exhibitions at 10:30 a.m. and 2 p.m. In association with the ongoing exhibits Korean Life Aesthetics and Korean Contemporary Art Today, a K-pop Cover Dance Group Mix’in will perform at 1:30 p.m. and a K-pop Dance Workshop will be held at 3 p.m. Register for the workshop through https://tinyurl.com/tapug44. Also currently on view is the exhibit Chapter 2: The Empty Chair Project.
6 films to see on the week of December 13 — December 19, 2019
Playing with Fire
FIREFIGHTERS rescue three siblings from wildfire. But no training could prepare them from the challenging job of babysitting. Directed by Andy Fickman, the film stars John Cena, Keegan-Michael Key,Tyler Mane, and John Leguizamo. Los Angeles Times’ Katie Walsh writes, “Fickman’s directing is uninspired at best, barely competent at worst. The framing and composition is dire; there’s no sense of rhythm or flow, and characters constantly appear and disappear at random.” Rotten Tomatoes gives it a 22% rating.
MTRCB Rating: PG
My Soul to Keep
A LITTLE boy believes that something evil lurks in his basement. When he is left alone by his older sister one evening, he sets out to discover if what he believes is real or just his imagination. Directed by Ajmal Zaheer Ahmad, the film stars Parker Smerek, Remington Gielniak, and Arielle Olkhovsky. Film Threat’s Bobby Lepire writes, “My Soul To Keep is well directed, wonderfully acted, and is a horror movie for children that is scary.”
MTRCB Rating: PG
Motherless Brooklyn
SET IN 1950s New York, the story follows a lonely private detective who has Tourette Syndrome. He works to solve the murder of his lone friend and mentor. Directed by Edward Norton, the film stars Edward Norton, Bruce Willis, Gugu Mbatha-Raw, and Alec Baldwin. The Times (UK)’s Kevin Maher writes, “The rest is a sluggish film noir pastiche (the setting of the novel has been inexplicably shifted from the late ’90s to the ’50s) that aims to emulate the jazzy intrigue of Chinatown, but delivers only clichés and screen-chewing vanity.” Rotten Tomatoes gives it a 62% rating.
MTRCB Rating: R-13
My Bakit List
A TV drama writer quits her job and takes a break with her best friend in Ilocos Norte. While there, she unexpectedly comes face to face with her ex-boyfriend. She finds herself torn between opening her heart to him after he previously left with no explanation. Directed by Bona Fajardo, the film stars Louise delos Reyes, Ivan Padilla, and Prince Stefan.
MTRCB Rating: PG
Black Christmas
SORORITY sisters prepare a series of parties while on a break from college. Suddenly, a black-masked stalker begins to kill sorority women. Directed by Sophia Takal, the film stars Imogen Poots, Aleyse Shannon, Brittany O’Grady, Lily Donoghue, Simon Mead, Caleb Eberhardt, and Cary Elwes.
MTRCB Rating: R-13
Extreme Job
UNDERCOVER narcotics detectives work at a chicken joint to capture a gang of organized criminals. Directed by Lee Byeong-heon, the film stars Ryu Seung-ryong, Jin Seon-kyu, Lee Dong-hwi, Lee Hanee, and Gong Myung.
DIZON Copper-Silver Mines, Inc. is selling more than 20,000 square meters (sq.m.) of land in Subic, Zambales.
In a disclosure on Thursday, the listed mining company said its board has authorized the “disposal of the land consisting of 20,534 sq.m. located at Barangay Matain, Subic, Zambales.”
The land was formerly the site of the company’s storage facility for copper concentrates and a loading pier called Port of Dizon.
Dizon told the stock exchange it is selling the property to improve its cash position and equity. The company did not provide other details.
Dizon was incorporated in 1966. Aside from the Subic property, it has a mineral processing permit in the Bayaring Tailings dam and 4,070 sq.m. of land in Barangay Parada, Valenzuela City.
In the third quarter, the mining company reported wider net loss to P652,363 from P228,093, year-on-year.
Shares in Dizon increased 0.07 points or 0.99% to close at P7.12 each in the stock exchange on Thursday. — Vincent Mariel P. Galang
LONDON — US law firm Hausfeld has filed a lawsuit in London against major banks over alleged foreign exchange (forex) rigging in a bid to take over a high-profile British class action from compatriot Scott & Scott.
The new action, called FX Claim UK, seeks damages from Barclays, Citibank, RBS, JPMorgan, UBS and MUFG Bank over their role in forex spot trading cartels between 2007 and 2013 and was filed at London’s Competition Appeal Tribunal (CAT) on Wednesday.
JPMorgan, UBS, Citigroup and MUFG declined to comment. RBS, Citibank, Barclays did not immediately respond to requests for comment.
Hausfeld and Scott & Scott co-led a similar US action against 15 banks, securing $2.3 billion for American claimants, after some of the world’s top banks paid more than a combined $11 billion in fines to settle US and European regulatory allegations that traders rigged foreign exchange markets.
Banks now face another potentially huge class action in Britain after being fined more than 1 billion euros ($1.1 billion) by the European Commission in May over cartels dubbed “Essex Express” and “Three Way Banana Split.”
“The fines do not go to those affected by the cartels. Through this action, we want to hold the banks accountable for their actions and secure compensation for affected customers,” said Phil Evans, a former Competition and Markets Authority inquiry chair, who is leading FX Claim UK.
The latest class action application was filed five months after its rival and heralds a potential “carriage dispute,” when a court is asked to decide which group will prevail. At a court hearing last month, judge Marcus Smith said there could be only one representative for such a class action.
A spokeswoman for Scott & Scott said: “Other law firms have been wanting to insert themselves into this litigation for years, but they have a lot of catching up to do.”
The first lawsuit, called UK FX Cartel Claim, is led by Michael O’Higgins, the former chairman of British watchdog The Pensions Regulator and funded by litigation funder Therium. FX Claim UK is funded by Bench Walk Advisors.
Both have after-the-event insurance cover, should the claim be unsuccessful.
Foreign exchange is seen as the crown jewel of London’s financial sector. With about 43% percent of the $6.6-trillion-per-day forex market traded there, lawyers have jostled for position since the Consumer Rights Act introduced the first “opt-out” class actions for breaches of UK or EU competition law in 2015.
In such cases, UK-based members of a defined group will automatically be bound into legal action unless they opt out, while foreign-based claimants actively have to sign up. — Reuters
Late December and the months of January and February are the traditional season for many employee resignations. Obviously, that’s after the workers have received their year-end bonuses. What would you advise management on how to minimize, if not eliminate the resignation of fast-trackers and other workers with hot skills? — Frantically Wary.
Let me start by telling you of an old story about Albert Einstein. It was reported that Einstein’s secretary once asked him to explain in simple terms his theory of relativity. He replied: “Two hours with a beautiful woman seems like two minutes, while two minutes on a hot stove seems like two hours!”
Like the theory of relativity, I must say it all depends on your particular situation. If you’ve done a good deal of engaging your workers at least in the past year, then you have a better chance of retaining them for another year. Otherwise, if you’re cramming now and in the next few months to stem the exodus of workers you want to retain, then it is probably too late for you to do just that.
Engagement and retention are perpetual, long-term processes that can’t be done during December when everyone is busy helping their respective organizations fulfill customers’ expectations. The situation can be different in January and February when your best and brightest people are busy looking for better employment conditions elsewhere by filing emergency leaves with familiar reasons like LBM, also known as “looking for better management.”
Better check your human resources records to discover where you can pinpoint problems, filtering out legitimate exceptions that arise out of individual situations from time to time.
In many cases, however, the perceived crisis of mass resignation could be more imagined than real. In many cases, it could be triggered by the toxic management style of some managers, rather than the pay and perks being offered by your company. Therefore, it boils down to the work relationship between managers and their workers. If there’s an excellent relationship between the two, expect a low attrition rate, even if the workers are receiving average salary packages based on industry standards.
Whatever the reason, you need to proactively read and manage employee issues all year-round. After all, motivating people is like taking a bath. Motivational speaker Zig Ziglar was right when he said: “People often say that motivation doesn’t last. Well, neither does bathing. That’s why we recommend it daily.”
Therefore, to minimize resignations starting this month and the corresponding months of every year thereafter, you may have to consider the following approaches:
One, treat all workers, regardless of their rank, with dignity and respect. No matter how trivial the issues raised by employees, you have to respond by clarifying matters and resolving them with the help of line supervisors and managers. Even if you don’t agree with their complaints, you have to bend a little bit to accommodate them as if they’re coming from customers and stockholders.
For you to do this, you must be aggressive enough in seeking out employee concerns about their specific goals.
Two, feel out the emotional and satisfaction levels of everyone on a regular basis. You can do this through an annual or biennial anonymous online survey so that you can cover as many workers as possible. The other approach is eyeball-to-eyeball department meetings between line executives and their workers. This type of meeting should help keep the people informed on what’s going on and encouraging them to ask questions.
This could be supplemented to a certain extent with a one-on-one discussion between employees and supervisors.
Three, ask specific questions that could only be answered by each worker. Remember that not all people have the same career ambitions, work situations and aspirations. However you can always use the following questions to explore the interests of each worker: How can I help you achieve your ambition in this organization? How can I make your job easy? What are your challenges on the job? What kind of resources or assistance do you need from me?
Just the same, don’t exaggerate. Don’t give people any false hopes or promises you can’t fulfill. It’s also important for you to admit your limitations, if necessary.
Four, empower and engage people as much as possible. Give them more responsibility. Hard workers could become victims of boredom, especially if their jobs are relatively routine and their tasks are repetitive in nature. To change this, allow them to study and develop several ways to improve their work processes, subject to certain limitations. Let the people do their own thing. One option is for you to relax your supervisory oversight.
This includes allowing your best workers to enjoy their freedom to use their best judgment in determining when they take breaks or vacation time.
Last, praise all workers and their extraordinary accomplishments. Do this in public. Everyone likes to be recognized when they excel. It’s important to let people know what examples of commendable acts you like. Go beyond lip service. If promotions or pay hikes are impossible within your department, seek to repay your employees by doing everything to make them feel comfortable with you and the organization.
If necessary, seek out promotion options in other departments for your excellent workers. You may lose them in the short term, but it can go a long way towards retaining them for the good of the company.
In conclusion, given all of these prescriptions, you must also remember that at times, resignations can bring in much-needed change via the infusion of new blood into the company. Therefore, as long as your turnover rate is limited to less than 7% per annum, then there’s nothing to worry about.
ELBONOMICS: You can’t start a new life if you keep on looking at your past life.
THE Senate will continue reviewing the P4.1-trillion national budget for 2020 even after its ratification by both Houses, Senator Panfilo M. Lacson said, Thursday.
Mr. Lacson, who is his chamber’s Finance Committee vice chairman, said Senate leaders have agreed to identify appropriations found questionable in the reconciled version of the 2020 spending plan.
“Nag-usap kami ni SP (Senate President Vicente C. Sotto III) at ni Sen. (Juan Edgardo M.) Angara, ililista namin lahat ‘yan at ipagbibigay alam sa Presidente, through DBM (Department of Budget and Management) (I have spoken with the Senate President and Sen. Angara, and we will identify all these provisions and inform the President via the DBM)“ Mr. Lacson told reporters Thursday.
He said the Senate will attach its reservations to the enrolled bill, just as it did with the 2019 national budget.
He said it remains the decision of President Rodrigo R. Duterte to veto any “questionable” appropriations flagged by the Senate.
“Bahala ang Pangulo mag-discern o mag-analyze pa kung tama ang aming sinasabi o hindi. Kung sa tingin ng Pangulo, ok palusutin, pwede ‘yan kasi siya ang may veto power (It’s up to the President to discern whether our recommendations are valid. If he thinks the allocations should go through, that’s fine because he’s the one with the veto power),” he said.
In the case of the 2019 national budget, Mr. Sotto signed the enrolled bill, but noted his reservations over items that were realigned after the House of Representatives (HoR) and the Senate ratified the spending plan on Feb. 8. This resulted in the partial veto of the initially P3.757-trillion budget, which was reduced by P95.3 billion.
“Ang masama sa ginawa ng HoR, on the eve of the signing of the bicam report saka lang sila magpapadala ng kopya, saka sila magsisingit (What the House did improperly was to delay the distribution of the bicameral report until the eve of the signing, which is when the insertions took place)” Mr. Lacson said.
“Sabi ko wag mag-schedule ng signing sa Wednesday kung di nila papadala yan. Ni-relay nila sa HoR napilitan nagdala ng USB Tuesday evening hoping makakatulugan namin, di namin ma-examine (I was against scheduling a signing for Wednesday if the House doesn’t send a report. The House resorted to bringing a USB flash drive in the hope that we will miss some things),” he said, referring to the flash drive that contained the House amendments.
Mr. Lacson on Wednesday said initial review of the file showed lump sum appropriations worth P16.345 billion, which covers 942 “questionable” projects.
He said the Senate went ahead with the signing of the report and its ratification to avoid another delay in the enactment of the national budget.
“Kaya ako pumayag, kasi in fairness to Sen. Angara tinanong niya ako kahapon kung pwede mag-proceed sa BCC signing kahit may questionable, sabi ko kung magkakaroon ng stalemate magkakaroon na naman ng reenacted budget, di maganda sa economy. (The reason I agreed was out of fairness to Sen. Angara, who asked me yesterday if we can proceed to the bicameral conference committee signing even if I have reservations. I said if we don’t sign there will be a stalemate and another re-enacted budget which will be bad for the economy).”
Mr. Duterte was only able to sign the 2019 national budget on April 15, after a months-long impasse between the House and the DBM over the new budget framework, and later with the Senate due to post-ratification realignments. — Charmaine A. Tadalan
FITCH SOLUTIONS Macro Research said the narrowing of the Philippines’ current account deficit, largely due to plummeting import demand, has led it to cut its estimates for the current account-to-Gross Domestic Product (GDP) ratio in 2019 and 2020.
In a commentary issued Thursday, Fitch Solutions said it now projects the current account-to-GDP ratio to come in at minus 0.4% this year and minus 1.2% in 2020, compared with its earlier estimates of minus 2.1% and minus 2.8% in 2019 and 2020.
The current account balance largely measures a country’s transactions with the rest of the world, and a negative balance usually means it is a net importer. A narrowing negative balance signals it is importing less, which could mean reduced raw material imports, a forward indicator for future re-exporting activity by the manufacturing industry.
“We at Fitch Solutions have revised our current account-to-GDP forecasts for the Philippines to minus 0.4% and minus 1.2% in 2019 and 2020, from previous forecasts of minus 2.1% and minus 2.8%. The sharp revision for 2019 reflects the significant drop in import demand through the year, with import growth of minus 10.8% year-on-year in October,” it said.
The central bank has reported that the country’s current account deficit narrowed to $145 million in the second quarter from a $3.28 billion a year earlier.
This brought the first-half total to a $4.788-billion surplus, a turnaround from the $3.257-billion deficit a year earlier.
Fitch Solutions said that aside from the high year-earlier base effect and the lower costs of energy imports, weak import demand may also be attributed to “weaker economic activity in the country “and a wider moderation in trade activity within the Asia region.”
It said export growth was flat during the first 10 months, largely due to external headwinds that affected other countries in the region.
“We expect these external challenges to remain in place, namely in the form of continued US-China trade tensions, slowing growth in both countries and political uncertainty in Hong Kong,” it said.
Next year, Fitch Solutions still sees domestic activity driving growth, including higher government spending which will support “firmer import demand” for the year.
“While any rebound in imports will be partially capped due to subdued re-exporting opportunities, the ramp-up in stimulus from the Philippine government will support a surge in building material imports and growth in capital goods,” it said.
In addition, it said that the deficit could “widen more aggressively” if external demand continues to weaken, “with downside risks emanating from US-China tensions or a sharper slowing of activity from the major economies.”
“Nevertheless, the deficit could widen more than we are currently forecasting, were external demand to soften more than we are anticipating. A sharper deterioration in the global economy could see export growth contract further, with sectors such as tourism suffering on the back of falling household confidence were global unemployment to rise suddenly.”
The current account is a component of the balance of payments (BoP) position.
Third quarter BoP will be released Friday.
The BoP registered a surplus for a fourth month in a row in October at $163 million, turning around from the year-earlier deficit. — Beatrice M. Laforga
