Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 10539

PHL, Chinese firms sign $12-B in business deals

Philippine President Rodrigo Duterte shakes hands with Chinese President Xi Jinping, before the meeting at the Great Hall of People in Beijing, China on April 25, 2019. — REUTERS

THE Philippine business delegation and Chinese companies on Friday signed 19 deals worth $12.165 billion, according to Trade Secretary Ramon M. Lopez.

“President Rodrigo Roa Duterte witnessed the exchange of 19 signed business agreements with Chinese firms, amounting to$12.165 billion in investments/trade leading to a projected employment of 21,165 jobs, on April 26 at the sidelines of the 2nd Belt and Road Forum in China,” the Department of Trade and Idustry (DTI) said in a statement.

This included one contract agreement, three cooperation agreements, two purchase framework agreements, and 13 Memoranda of Agreement (MoA) or Understanding (MoU).

Mr. Lopez said majority of the projects involve energy, infrastructure, food, telecommunications, sale of agricultural products, tourism, and economic zone and industrial park development.

“The Duterte administration is pushing for investments on energy and manufacturing for the Philippines to broaden its manufacturing base and increase its exports. Among the agreements are energy projects that will help the country decrease its dependence on oil and gas imports. There will also be several industrial parks to bring jobs to Filipinos in the countryside,” Mr. Lopez said.

A Chinese company AAC Technologies is looking to invest $30 million to expand its operations in the Philippines, Mr. Lopez said. He said the company wants to go into stepper motor and motor reducer manufacturing, which will generate 3,000 jobs in three years.

The DTI said Pulangi Hydro Power Corporation and China Energy Co Ltd signed a contract agreement for the proposed 250 megawatt (MW) South Pulangi Hydroelectric Power Plant Project in Damulog, Bukidnon.

“The project… aims to improve power supply reliability and resilience in the country, particularly in Mindanao. It is valued at $800 million and will create 5,000 jobs,” the department said.

Filipino conglomerate Tranzen Group entered a framework agreement with China Power Investment Holding for the development of thermal, hydro, and renewable power plants with a total value of $1.5-$2 billion.

Tranzen also entered into an MoU with China Harbour Engineering Company Ltd for the construction of the Light Rail Transit (LRT) in Manila, housing, and roads in North Luzon — projects with a combined value of $4 billion.

The Filipino company also inked an MoU with CITIC Guoan Information Technology for a $500 million project that involves building infrastructure for Internet WiFi around the country.

The local government of Davao Occidental and Fengyuan Holdings inked a MoU for the establishment of a $1.5 billion petrochemical refinery processing plant complex within the the Tubalan Cove Business and Industrial Park.

The Department of Energy, Shanghai Electric Group Co Ltd, and Deluxe Family Co Ltd also signed a $40 million MoU on the promotion of the use of indigenous, new, and renewable energy resources.”

The DTI said two Philippine companies sealed deals to supply agricultural products to Chinese companies.

Philpack Corporation will supply $40 million worth of pineapples to Goodfarmer Foods Holding Group, while Eng Seng Food Products will supply $36.5 million worth of green coconuts to China Artex Corporation.

At the same time, the Cagayan Economic Zone Authority (CEZA) inked six MoUs with Chinese firms that will develop among others, a $150 million yacht club, a $500 million green textile industry park, a $500 million expansion of the Cagayan North International Airport, a $100 million financial technology hub and financial center, a $500 million “smart” city, as well as a resort, theme park and lithium battery manufacturing plant worth a combined $150 million.

The Pampanga provincial government entered into a $1.5 billion framework agreement with Macrolink Group that will develop Yatai Industrial Park.

GFTG Property Holdings and Sanya CEDF Sino-Philippine Investment Corporation forged an agreement for a $298 million project to develop Grande and Chiquita Islands under the Subic Bay Matropolitan Authority.

Adnama Mining Resource, Inc., Fu Properties Inc, and Xiamen C&D Incorporation also signed an MoU for a $50 million iron processing plant in Agusan Del Norte.

In his speech during the first session of the high-level meeting at the Belt and Road Forum on Friday, Mr. Duterte said: “I reaffirm my country’s commitment to the collective vision of common prosperity through cooperation on the basis of mutual respect and as equal sovereign states.”

“In pursuing connectivity, we should not merely build roads and bridges but we should also create human connections. It is through these connections that we facilitate grand exchanges of skills, ideas, and experience. It is also through linkages that we forge and build trust and understanding,” he added.

“We must remember: Development assistance must be used as a genuine tool to bring about positive change in the lives of our peoples. And it must be a purposive decision of partner-states, taking into account mutual respect and mutual interests,” the President said further. — ALB

PHL remains out of US IPR watch list for 6th year

FOR the sixth straight year, the Philippines was not included in the US government’s watch list of countries with weak protection of intellectual property rights (IPR), although some areas of concern were flagged.

The United States Trade Representative’s (USTR) 2019 Special 301 Report released Friday showed the Philippines continued to be out of the list, after being included from 1994 through 2013.

The report is the result of an annual review of of US trading partners’ IP protection and enforcement.

In a statement, the Intellectual Property Office of the Philippines (IPOPHL) said the positive report proves the country’s efforts to improve its intellectual property system is “headed in the right direction.”

“While this is very welcome news, much work still needs to be done on strengthening the IP system as a whole, not just in enforcement. We won’t be resting on our laurels, it is a continuing challenge to develop a culture of respect for intellectual property,” IPOPHL Director General Josephine R. Santiago was quoted as saying.

The USTR report cited the Philippines, Canada and Japan as those that have adopted laws to prevent unauthorized camcording, and urged other countries to follow suit. It also cited the Philippines’ creation of an intellectual property academy, as one of the best IP practices by US trading partners.

However, the USTR report said the Philippines is among several countries that “do not have in place effective policies and procedures to ensure their own government agencies do not use unlicensed software.”

“It is important for governments to legitimize their own activities in order to set an example of respecting IP for private enterprises. Additionally, unlicensed software exposes governments and enterprises to higher risks of security vulnerabilities,” the report said.

The USTR report also noted trademark opposition proceedings in the Philippines are still slow. Trademark opposition proceedings are administrative proceedings emerging from individuals or groups complaining against the registration of a mark.

“Trademarks help consumers distinguish providers of products and services from each other and thereby serve a critical source identification role… Many countries need to establish or improve transparency and consistency in their administrative trademark registration procedures,” it said.

China remained on the USTR’s priority watch list for piracy and counterfeiting concerns.

“China’s placement on the Priority Watch List reflects the urgent need for fundamental structural changes to strengthen IP protection and enforcement, including as to trade secret theft, online piracy and counterfeiting, the high- volume manufacture and export of counterfeit goods, and impediments to pharmaceutical innovation,” the report said.

Other countries on the priority watch list include Indonesia, India, Algeria, Kuwait, Saudi Arabia, Russia, Ukraine, Argentina, Chile and Venezuela.

The USTR watch list also includes Thailand, Vietnam, Pakistan, Turkmenistan, Uzbekistan, Egypt, Lebanon, United Arab Emirates, Greece, Romania, Switzerland, Turkey, Barbados, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Jamaica, Mexico, Paraguay, and Peru. — Denise A. Valdez

Banks keep credit standards steady in Q1

MOST BANKS kept their lending criteria little changed in the first quarter, according to the results of a central bank survey.

Lenders broadly maintained their credit standards for loans to both enterprises and households as the year opened, according to the results of the Bangko Sentral ng Pilipinas’ latest Senior Bank Loan Officers’ Survey.

This marks the 40th consecutive quarter that majority of respondent banks reported broadly unchanged credit standards since the second quarter of 2009.

The central bank uses the quarterly survey to understand the lending decisions made by banks and monitor bank credit. A total of 50 out of 66 banks — 42 universal and commercial banks and 24 thrift banks — surveyed responded.

Most banks, or 72.9% of those surveyed, said they used the same standards for granting loans to businesses, higher than the 71.1% that said so during the fourth quarter of 2018, according to the modal approach.

However, under the diffusion index (DI) approach, more banks reported a net tightening of credit standards, which they attributed to “their reduced tolerance for risk, deterioration in the profitability and liquidity of their portfolio, less favorable economic outlook, and perception of stricter financial system regulations,” the report released Friday showed.

“In terms of borrower firm size, banks’ responses pointed to a net tightening of credit standards for loans across all firm sizes namely, top corporations, large middle-market enterprises, small and medium enterprises (SMEs) and micro-enterprises based on the DI approach.”

A positive DI for credit standards means that more banks have tightened lending rules compared with those that eased. A negative DI indicates the opposite.

Some 73.3% of banks meanwhile reported that they used the same standards for deciding on personal loans in the first three months of the year, down from 78.6% in the previous quarter.

However, using the DI approach, banks said they were stricter in lending to individuals, particularly for auto and personal or salary loans.

“The overall net tightening of standards for household loans reflected stricter collateral requirements and loan covenants, shorter loan maturities, and increased use of interest rate floors. Respondent banks attributed the tightening of overall credit standards for household loans largely to their reduced tolerance for risk and deterioration in the profitability of their portfolio,” the report said.

For this quarter, based on the DI approach, some lenders see a net tightening in their lending standards for both businesses and households due to expectations of stricter financial system regulations, a deterioration in borrowers’ profiles and profitability, as well as lower tolerance for risk.

Overall, most banks continued to see stable loan demand from both households and businesses, the survey results showed. There was even a net increase in loan demand from large middle-market enterprises and SMEs as well as for credit card loans based on the DI approach.

Some 73.3% of respondent banks also said they kept borrowing requirements steady for commercial real estate loans during the first quarter, lower than the 76.7% booked in the last quarter of 2018. However, the DI approach showed some lenders actually tightened their credit standards for businesses due to “wider loan margins, reduced credit line sizes, stricter collateral requirements and loan covenants, shortened loan maturities, and increased use of interest rate floors.”

Meanwhile, 82.6% reported unchanged credit standards for housing loans extended to households, up from 80% in the previous quarter. DI-based results also suggested maintained credit standards for housing loans attributed largely to respondent banks’ unchanged tolerance for risk.

Peso weakens on strong US economic data

THE PESO weakened on Friday due to appetite for the greenback following the release of a strong durable goods report in the United States.

The local currency closed at P52.18 against the US dollar on Friday, down four centavos from the previous day’s finish of P52.14.

The local currency opened the session weaker at P52.18 against the greenback and dropped to as low as P52.21 intraday. Meanwhile, its best showing for the session was logged at P52.09 per dollar.

Trading volume thinned to $787.81 million from the $961 million that switched hands in the previous day.

“The peso slightly weakened as US durable goods report for March 2019 came out stronger than market expectation which boosted appeal on the greenback,” a trader said in an email.

New orders for US-made capital goods increased by the most in eight months in March, hitting their highest level on record and brightening the outlook for manufacturing and the economy, Reuters reported.

The US Commerce Department said orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, surged 1.3% to an all-time high of $70.0 billion, powered by a jump in demand for computers and electronic products.

In a separate report on Thursday, the US Labor Department said initial claims for state unemployment benefits jumped 37,000 to a seasonally adjusted 230,000 for the week ended April 20. The increase was the largest since early September 2017.

Meanwhile, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc., said in a text message that the US dollar remained strong as the market waits for the release of US economic growth data for the first quarter.

“The US dollar was strong for the second week now as the market awaits Q1 US GDP (gross domestic product) data. Investors are still wary over the prospects of global expansion and the peso, like other emerging economies’ currencies, seem to be trending downward,” Mr. Asuncion said. — RJNI

Rescue operations to continue in collapsed supermarket

SEARCH and rescue operations will continue at the Pampanga supermarket that collapse during Monday’s earthquake, even though there are no signs of life said the National Disaster Risk Reduction and Management Council (NDRRMC) Chuzon Supermarket in Porac, Pampanga collapsed during the 6.1 magnitude earthquake that hit on April 22.

“As agreed during the briefing held on April 25 at the barangay hall of Barangay Cangatba, Porac, Pampanga, responders will continue to be on search, rescue and retrieval (SRR) mode which is still expected to last from two days to a week to complete,” said NDRRMC in a statement.

The NDRRMC recorded 18 casualties, 282 injured, and seven persons missing in Region III in the wake of the earthquake.

The agency said that there were 1,230 damaged houses in the provinces of Bataan and Pampanga and 138 damaged structures in the rest of Region III (comprised of the provinces of Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales) and the National Capital Region (NCR). The NDRRMC said that there was an estimated P505 million worth of damage to schools, roads, and bridges in Regions I, III, Calabarzon, and the NCR.

The Office of Civil Defense, the Department of Social Welfare and Development, and local government units have provided P1.1 million worth of assistance for response operations.

PREPARING FOR “THE BIG ONE”
Meanwhile, the Department of Public Works and Highways (DPWH) said in a hearing at Congress that repair and retrofitting of infrastructure has been a priority of the agency in preparation for “The Big One,” referring to the major earthquake that is expected to hit Metro Manila.

“Priority po sa Public Works ’yang (the priority of Public Works is the) rehabilitation, replacement, retrofitting ng mga (of) bridges, particularly in NCR. Of course, this is part of our preparation in anticipation of the big earthquake, but I hope it will not happen in our lifetime. Also, we have inspected public school buildings and we are retrofitting public buildings,” said DPWH Undersecretary for Planning Maria Catalina E. Cabral on Friday.

She added that the DPWH has an allotted budget of P5 billion for the retrofitting of bridges in the country: “Meron din po kaming (We also have a) budget for replacement of the bridges that really needs to be replaced. Kasi yung (because) retrofitting is only to make sure it addresses international seismic standards, so ibig sabihin okay naman yung tulay (it means that the bridges are okay) but we have to upgrade the standards.”

Further, DPWH Assistant Secretary Eugenio R. Pipo Jr. said that the agency has already inspected and assessed around 3,000 public buildings in the Metro Manila.

“We have formed teams and evaluated these buildings. The evaluation criteria that we used is the American version which is [that of] the Federal Emergency Management Agency (FEMA)…. when we did the assessment, we have to classify it based on vulnerability of a certain building, if it is for condemnation, [which] we have identified two, and then we identified buildings need to be retrofitted,” said Mr. Pipo.

Mr. Pipo noted that the two buildings that were identified as condemned were in Tondo, Manila and Parañaque City.

“If [a building] needs to be retrofitted, we instruct the owner or the agency that owns the building to hire the services of these engineering firms to conduct the necessary technical evaluations and the rehabilitation to be done,” he said.

Meanwhile, the Philippine Institute of Volcanology and Seismology reported a series of earthquakes in Surigao del Norte on Friday, with the strongest tremor, with a magnitude of 5.5, located 70 kilometers southeast of the municipality of General Luna. — Vince Angelo C. Ferreras

Angat’s water to drop below its minimum operating level in two days

ANGAT Dam’s water level is expected to drop below its 180-meter minimum operating water level (MOWL) in the next two days. This as the current dry spell is expected to last several more months.

Dr. Sevillo D. David, Jr., executive director of National Water Resources Board (NWRB), said in a press conference in Quezon City on Friday that the water level of Angat Dam as of 6 a.m. on April 26 hit 180.73 meters. This is projected to decrease further in line with the Philippine Atmospheric, Geophysical and Astronomical Services Administration’s (PAGASA) El Niño forecast, which is predicted to continue until August, with a possibility that it will persist until December of this year.

“As of April 26 this morning at 6 a.m. ’yung [the] Angat elevation is around 180.73 meters… at the current rate of decline of the water level in Angat we are projecting that it will breach ’yung [the] 180 (meters) minimum operating level… by the next probably two days,” he noted.

He said that according to PAGASA’s weather outlook, there will be “relatively reduced rainfall.” With this, he noted that the NWRB predicts that by the end of April, the dam’s water level will be at about 178 meters, going down to 173 meters by the end of May. This will then start to recover by June with the start of the rainy season, but rainfall is also expected to be reduced. By the end of October, the NWRB is expecting that the dam’s water level will reach about 190 meters.

Mr. David said that this current water level, and the expected weather in the next few months will be enough to address the water demand of households in Metro Manila.

Meanwhile, the approved allocation in the month of May for the Metropolitan Waterworks and Sewage System (MWSS) is to be maintained at 48 cubic meters per second (CMS), while the allocation for the National Irrigation Administration (NIA) will be reduced to 10 CMS from the previous 35 CMS.

The Department of Agriculture has said that El Niño damage to rice, corn, fisheries, and high-value crops as of April 25 has climbed to P7.96 billion, with an estimated volume of 447,889 metric tons (MT) worth of output lost. It has affected 277,889 hectares of land and 247,610 farmers and fisherfolk.

Mr. David said that the board decided to lower the release, and even suspend the release of irrigation water in the next few months because farmers are already nearing their harvest season, which requires much less irrigation. Also, as the dam’s water nears the minimum operating level, the priority will be the domestic water supply and not the irrigation systems.

“Because nasa terminal period na sila ng kanilang cropping, normally, mas reduced ’yung nire-require nilang water [because the farmers are nearing the terminal period of cropping, normally they will require a much reduced amount of water], so I think this reduction in irrigation requirement will [not] have a significant impact as far as the cropping season in Bulacan, in Pampanga is concerned,” he explained.

“We believe that, at least for the water supply of Metro Manila, there is sufficient supply at least for the month of May and succeeding months, however we will be closely monitoring… so that we can also act accordingly if there will be significant changes dun sa mga [in the] forecasted rainfall at inflow sa [in] Angat Dam,” he said. — Vincent Mariel P. Galang

Most preparations for elections already in place: Comelec

THE Commission on Elections (Comelec) has said that most of the preparations are in place for the 2019 National and Local Elections (NLE) which will be held in less than three weeks.

The poll body reported on Friday that it has already finished printing the ballots to be used for the midterm elections. The 2019 NLE will utilize 63,662,481 ballots.

“For the printing of the ballots, we’re done. We only have around 6 million ballots for verification and after that it will be shipped out,” said Comelec Director IV for Election and Barangay Affairs Teopisto E. Elnas, Jr. to reporters in a press briefing on Friday.

Mr. Elnas said that the Comelec already ordered the deployment of the ballots to priority areas such as Batanes and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). The delivery of ballots to all city municipal treasurer’s offices will be completed by May 4. The elections will be held on May 13.

Meanwhile, the Department of Foreign Affairs (DFA) said in a statement on Friday that it is working on helping overseas voters experiencing delays in receiving their ballots through mail.

“In the interest of time, the DFA has authorized the concerned Foreign Service Posts to advance the cost of the remaining postage fees in order bridge the funding gap while awaiting the remittance from COMELEC,” DFA said, adding it will coordinate with the poll body to speed up the process.

The Comelec also said that all Vote Counting Machines (VCMs)to be used on election day have already been delivered to the areas they will be used nationwide.

“Our VCMs to be used in the conduct of elections are already in the different regional and local hubs. [The machines] will be dispatched for final testing and screening in the different polling places and [they] will remain there until election time,” said Mr. Elnas.

The Comelec is also set to deliver 7,000 contingency VCMs to some areas nationwide.

SECURITY MEASURES
The Comelec is working with the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) to ensure peace and order during the elections.

“We have deputized the military and the police for the purposes of the elections. Sa peace and order, mandata nila ’yun (For peace and order, that is their mandate),” said Mr. Elnas.

The Comelec is also set to conduct elections for prisoners and detainees, with Mr. Elnas saying “We have around 65,000 detainee voters who will exercise their right to vote on election day… around 200 jail facilities around the country will be involved in the inmate voting.”

In addition, indigenous people (IP) voters in far off areas won’t be left behind as the Comelec has set up 33 accessible voting centers for them nationwide.

The Comelec also stressed that energy will not be a concern in the week of the elections as they have back-up generators in precincts and have also coordinated with concerned entities to ensure there are no power outages during the polls.

“Our field officials are in coordination with local electric cooperatives to ensure 100% power supply,” Mr. Elnas said. — Gillian M. Cortez

Over 4,000 arrested for violating election gun ban

THE Philippine National Police (PNP) reported that 4,729 individuals have been arrested for gun ban violations as of Friday, April 26.

The election gun ban has started on Jan. 13.

Of these, 4,449 were civilians, 79 were security guards, 75 were government and elected officials, 38 were police officers, 31 were member of “threat groups,” 17 were members of the Armed Forces of the Philippines, 12 were other law enforcement agency personnel, nine were foreign nationals, eight were private armed group members, seven were members of the Citizen’s Armed Forces Group Unit, and four were personnel of the Bureau of Jail Management and Penology.

Of the 3,942 firearms confiscated, surrendered, and recovered, 2,989 were small firearms, 866 were homemade, and 87 were light arms.

A total of 35,967 other deadly weapons were also seized including ammunition, bladed weapons, explosives or improvised explosive devices, grenades, and replica firearms.

The PNP data also showed that most of the arrests were conducted through police patrol response with 2,634 persons arrested. — Vince Angelo C. Ferreras

DoH targets a malaria-free PHL by 2030

THE Department of Health (DoH) aims to lower the incidence of malaria by 90% by 2022, with the aim of declaring the country malaria-free by 2030.

The DoH announced on Friday that out of the nation’s 81 provinces, 50 are “malaria-free” while 27 are “under elimination phase.”

Malaria remains endemic in four provinces “as the country races to be declared malaria-free by 2030,” the DoH said in a statement released on Friday.

Those four provinces are Palawan, Sulu, Occidental Mindoro, and Sultan Kudarat. Ninety-five percent of malaria cases were found in six municipalities of Southern Palawan. The remaining 5% were cases reported nationwide. Last year, four deaths from malaria were reported while 4,870 people were infected.

Malaria is transmitted through the bite of the Anopheles mosquito. Symptoms — including high fever, headache, and nausea — usually appear between nine to 14 days after being bitten. However, in some cases the symptoms may appear one to several month after being bitten. The disease can also be transmitted by a blood transfusion from an infected person, and possibly from mother to child before or during birth according to the DoH. Severe malaria can be fatal.

DoH Secretary Francisco T. Duque emphasized that “Malaria is preventable.”

To reach the goal of reducing the malaria incidence rate by 90%, the DoH’s strategies include the use of insecticide-treated mosquito nets, indoor residual spraying of insecticide, and early diagnosis and treatment.

The DoH also said that other preventive measures when in endemic areas include using long sleeved clothing; applying insect repellant; utilizing mosquito nets, preferably insecticide treated; and taking prophylactic treatment when traveling to these areas. — Gillian M. Cortez

PHL to join Dubai expo

THE Philippines is set to participate in Expo 2020 Dubai, which will be held in Jebel Ali, Dubai, United Arab Emirates, between Oct. 20, 2020 and April 10, 2021, according to Malacañang.

The goal of the Philippines’ participation in the expo is “to promote before the world audience the heritage, talent and ingenuity of the Filipino people, as well as showcase the country’s vibrant economy, tourist destinations and emerging technological innovations.”

The Palace released on Friday, April 26, a copy of Administrative Order No. 17, which President Rodrigo R. Duterte signed on April 24 to constitute the Philippine Organizing Committee for Expo 2020 Dubai.

“The participation of the Philippines in the Expo 2020 Dubai provides an excellent opportunity to further enhance the country’s presence in a global scale, and promote the country’s commercial and public interests in the Middle East, Africa and South Asia region,” the document reads.

With the theme “Connecting Minds, Creating the Future,” Expo 2020 Dubai, according to the Palace, “offers a platform to foster creativity, innovation and global cooperation, which will contribute to the country’s goal of vigorously advancing science, technology and innovation as a strategy for long-term growth, consistent with the Philippine Development Plan 2017-2022.”

The Philippine Organizing Committee which will be composed of the Departments of Trade and Industry, Tourism, Foreign Affairs, Budget and Management, Labor and Employment, Science and Technology, and Information and Communications Technology.

The committee will formulate and implement a work plan, and it will also act as the coordinating body between the private sector and other government entities.

It will also ensure that the benefits of the country’s participation “are maximized through a concerted and cost-effective national approach.”

The document further states that “all departments, bureaus, offices, agencies or instrumentalities of the government, including government -owned or -controlled corporations and government financial institutions, are directed to render full assistance and cooperation to the [committee] to effectively carry out the objectives of this Order.” — Arjay L. Balinbin

Bank economists see within-target inflation until 2021

BANK ECONOMISTS expect inflation to remain broadly within target this year and until 2021 amid downward pressures to the outlook, according to results of a recent central bank survey.

A poll of 26 private sector economists tapped by the Bangko Sentral ng Pilipinas (BSP) yielded a median inflation forecast of 3.2% for 2019, according to its first-quarter inflation report published Friday, slightly higher than the central bank’s full-year projection of 3% and well below 2018’s 5.2% average.

This also falls within the BSP’s 2-4% target range for the year.

The general increase in consumer prices is expected to pick up slightly to average at 3.3% in 2020 and then ease back to 3.2% in 2021, the economists’ median forecasts showed. Both are also within the government’s 2-4% inflation target for those years, although the 2020 forecast is above the central bank’s own estimate of 3%.

“Analysts expect inflation in 2019 and 2020 to settle within the target range, with downward pressures seen to dominate the risks to the inflation outlook,” the report said.

The report said possible downside risks to inflation include the implementation of the rice tariffication law, which is expected to improve domestic rice supply and stabilize prices, and lower global crude oil prices.

“On the other hand, the key upside risks to inflation are seen to emanate from adverse weather conditions such as El Niño, volatile global oil prices and foreign exchange market, possible policy rate cut by the BSP, higher domestic demand due to the upcoming midterm elections and school enrollment, and higher electricity rates,” the report said.

Headline inflation eased for the fifth straight month to 3.3% in March, down from 3.8% in February and 4.3% in the same month last year. Year-to-date, inflation is at 3.8%.

At its March 21 policy meeting, the BSP kept benchmark interest rates unchanged within the 4.25-5.25% range, citing the need to stay cautious given risks to economic growth even as inflation is steadily dropping.

“This outlook that we are showing as of March monetary policy meeting is a picture not much of inflation bottoming out but inflation normalizing towards the target,” BSP Department of Economic Research Director Dennis D. Lapid said in a briefing on Friday.

BSP Governor Benjamin E. Diokno said in the same briefing that a prolonged El Niño, along with steadily rising crude oil prices, could cause commodity prices to spike.

This means the BSP cannot simply loosen its monetary policy despite the current downtrend in inflation, he said.

“The BSP knows that further risks can emerge from prolonged El Niño weather condition and higher than expected increasing global oil and food prices. For 2020, the risks lean toward the downside amid slowdown in global economic activity,” Mr. Diokno said.

“Thus, the BSP will remain data-driven at all times in our policy decision-making and our actions will be determined by our inflation outlook. The BSP remains focused on safeguarding and promoting price stability conducive to a balanced and sustainable economic growth,” Mr. Diokno added.

Mr. Diokno also noted that crude oil prices have been steadily rising due to extension of production cuts by petroleum exporting countries, supply disruptions in Libya, and sanctions imposed by the United States on Valenzuela and Iran.

“On balance, therefore, our prevailing monetary policy stance remains appropriate, given the confluence of easing inflation and firm growth dynamics. The BSP continues to gauge the impact of its monetary policy responses on domestic economic conditions to ensure that inflation remains on track toward the government’s target of 2-4% and that inflation expectations remain anchored,” Mr. Diokno said.

Sought for comment, Rizal Commercial Banking Corp (RCBC) Economist Michael L. Ricafort told reporters: “There may be some upside risks which are practically supply side driven like higher oil prices… We have to note that for food prices, the monetary measures of the government are always there since last year. They can always increase importation and we have yet to see the good effect of the rice tariffication.”

“Realistically, as early as May 9, it is very much possible to see a cut on policy rates on the overnight rates of the BSP,” Mr. Ricafort added. — R.J.N. Ignacio

El Niño crop damage climbs to P7.96 billion

THE Department of Agriculture (DA) said El Niño damage as of April 25 to rice, corn, fisheries, and high-value crops has climbed to P7.96 billion with an estimated volume of 447,889 metric tons (MT) worth of output lost.

The DA estimated on Thursday that the dry spell has affected 277,889 hectares of agricultural land and 247,610 farmers and fisherfolk.

Its estimate as of April 2 was at P5.05 billion.

Specifically for rice and corn, damage to rice doubled to P4.04 billion and lost volume of 191,761 MT affecting 144,202 hectares and 140,387 farmers, while damage estimated for corn also went up to P3.89 billion and 254,766 MT worth of lost production affecting 133,007 hectares of land and 105,937 farmers.

Despite these losses, DA Secretary Emmanuel F. Piñol said the government’s agriculture production targets can still be attained.

“Despite the impact of El Niño to rice and corn production, their respective production targets can still be met as reported losses are only 0.96% (197,700 MT) of the 20 million MT target for rice and only 2.94% (254,766 MT) of the 8.64 million MT target for corn,” he noted in a social media post on Thursday.

All regions have reported being affected by the phenomenon, but the most affected regions were Region II (Cagayan Valley), which accounted for 33.6% of the damage, and Cordillera Administrative Region (CAR), which accounted for 19.54% of the damage.

The DA said it has already provided support farmers and fisherfolk affected through insurance and emergency loans.

“To date, the Agricultural Credit Policy Council (ACPC) has allotted P95.875 million of financial assistance under the Survival and Recovery Assistance (SURE) Program to benefit 3,835 affected farmers. In addition, the Philippine Crop Insurance Corporation (PCIC) has paid P264.515 million of insurance to 24,119 farmers,” Mr. Piñol noted.

He also said that despite the dry spell, Central Luzon, Cagayan Valley, and Ilocos reported higher yields.

For Central Luzon, its harvest for the year is 22% higher than the 1.8 million MT recorded in 2018. For Cagayan Valley, its harvest for the year is higher by 2.16% to 1.511 million MT from 1.478 million MT, while for the Ilocos region, an increase of 14.4% to 560,896 MT from 490,108 was recorded.

The increase was attributed to increased use of good quality seeds. Other interventions such as free seeds, mechanization, irrigation, and fertilization are expected to fuel production in 2020.

Last year, rice production went down to 19.05 million MT due to over 20 typhoons that hit the country. — Vincent Mariel P. Galang

1...10,53810,53910,540...13,707Page 10,539 of 13,707
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube