Better showing in last fight bodes well for Ancajas

May 6, 2019 | 8:11 pm

IT WAS another successful title defense for International Boxing Federation super flyweight champion Jerwin “Pretty Boy” Ancajas on Sunday in Stockton, California, and he did it in a more convincing and impressive fashion than his previous two fights, which bodes well for the Filipino moving forward, said a local fight analyst.

Dominant right from the start, Mr. Ancajas proved to be a handful against Japanese challenger and number one contender Ryuichi Funai, who was already broken down just halfway into their scheduled 12-rounder that the ring side doctor called for the fight to be stopped and hand the seventh-round technical knockout victory to the Davao del Norte native.

The TKO win came on the heels of Mr. Ancajas’s split draw outing against Mexican Alejandro Santiago in September and a unanimous decision victory over compatriot Julius Sultan prior to that, both of which were not warmly received by pundits and fans who felt he could have performed better in said fights.

For fight analyst Nissi Icasiano, to see Mr. Ancajas (31-1-2) with the kind of performance he had versus Mr. Funai brought delight to him and said it would benefit the Filipino champion’s standing as a top-caliber fighter.

“This win over Funai stretched Ancajas’ title defense streak to seven since he won the title in 2016. Not only that, this victory put him back to good standing as a titleholder in his talent-filled division following back-to-back humdrum performances,” said Mr. Icasiano in an online correspondence with BusinessWorld following Mr. Ancajas’s win.

“In this bout, they found a good dance partner for Jerwin Ancajas. Funai proved to be a welcoming target for Ancajas, who landed his right jab and straight left hand with frequency. The fourth round was all Ancajas as he punished Funai, recording a 43 to 5 edge in power shots during that three-minute period,” he added.

Mr. Icasiano underscored that quite evident in Mr. Ancajas in his recent fight was the confidence he showed, something that was lacking in his two previous fights, owing perhaps to the “unconventional styles” of Messrs. Santiago and Sultan he surmised.

“I am happy to see Jerwin Ancajas in his own element again. His body shots also were in full display, which was evidently missing in his last two matches,” he said.

Moving forward, Mr. Icasiano said the Funai win sets Mr. Ancajas back on track for more high-profile matches.

“Ancajas is vocal about his intention to fight the big names of his division. This match somehow puts him back in the conversation. In the past, Ancajas and his team mentioned the names of Srisaket Sor Rungvisai and Juan Francisco Estrada. A Filipino versus Filipino clash against either Donnie Nietes or Aston Palicte is likewise in the pipeline,” he said.

Mr. Ancajas has been a champion since September 2016 when he defeated McJoe Arroyo of Puerto Rico. — Michael Angelo S. Murillo

You can feel the power

May 6, 2019 | 8:10 pm

6^th Vugar Gashimov Memorial
Shamkir, Azerbaijan
March 30-April 10, 2019

Final Standings (All Grandmasters)

1. Magnus Carlsen NOR 2845, 7.0/9

2-3. Ding Liren CHN 2812, Sergey Karjakin RUS 2753, 5.0/9

4-6. Teimour Radjabov AZE 2756, Alexander Grischuk RUS 2771, Viswanathan Anand IND 2779, 4.5/9

7-8. Veselin Topalov BUL 2740, David Navara CZE 2739, 4.0/9

9. Shakhriyar Mamedyarov AZE 2790, 3.5/9

10. Anish Giri NED 2797, 3.0/9

Average Rating: 2778 Category 22

Time Control: 120 minutes for the first 40 moves, then 60 minutes for the next 20 moves, then 15 minutes play-to-finish with 30 seconds added to your clock after every move starting move 61.

Magnus Carlsen put in a really marvelous performance in the Vugar Gashimov Memorial, not only in terms of points scored but also the high quality of play. Here are two good ones which deserve a place in the next edition of his best games.

The great tactician Alexei Shirov used to puzzle his readers when he claimed that his strength is in the endgame. Isn’t his name synonymous with a kingside attack? But he makes a great point — in the endgame there is no room for “positional considerations” or “strategical planning” — you have to calculate all lines to the very end, and that is where your tactical skill is needed.

The following game is a nice illustration of that.

Navara, David (2739) — Carlsen, Magnus (2845) [B33]
Gashimov Memorial 2019 Shamkir (3.3), 02.04.2019

1.e4 c5 2.Nf3 Nc6 3.d4 cxd4 4.Nxd4 Nf6 5.Nc3 e5 6.Ndb5 d6 7.Nd5

The main line of the Sveshnikov is 7.Bg5 a6 8.Na3 b5 9.Nd5 by a factor of around 10 to 1; the move used in the game, 7.Nd5 is a far second. In his 2018 World Championship Match in London Magnus Carlsen turned to the Sveshnikov in four of the seven games where he had Black, and all four times his opponent Fabiano Caruana responded 7.Nd5.

7…Nxd5 8.exd5 Nb8

[In game 8 and 10 of their match Carlsen played the text move. In games 12 and 14 he tried 8…Ne7]

9.a4 Be7 10.Be2 0–0 11.0–0 Nd7 12.Kh1 a6 13.Na3 a5!

Black usually pushes …f7–f5 here and goes for a kingside assault. Carlsen’s idea is to play …a5 then …b6 before moving over to the kingside. That way it would be that much harder for White to get anything going on the queenside.

14.f4 f5 15.Nc4 b6 16.Ra3 exf4 17.Bxf4 Nc5 18.Re3?

A mistake. He should have played 18.Rg3 to prevent …g7–g5.

18…g5! 19.Rxe7

This was Navara’s intention, and after 19…Qxe7 he has 20.Bxd6. What he had forgotten was that after 19…gxf4 (instead of …Qxe7) his rook is stranded on e7.

19…gxf4! 20.Re6 Nxe6 21.dxe6 Bxe6 22.Rxf4 Bxc4 23.Bxc4+ Kh8

His mistake on the 18^th move has already cost the exchange. The Czech GM (Grandmaster) has no choice but to try and complicate the position.

24.g4?! Qf6 25.c3

[25.Rxf5 Qxb2]

25…Qe5 26.Qf1 Rae8 27.gxf5 Rf6 28.Qf2 Qc5 29.Kg2 Qc6+ 30.Kh3 Qc5 31.Kg2 Qxf2+ 32.Rxf2 Re4 33.Be6 Rxa4 34.Kf3 Kg7 35.Rd2 Kh6 36.Rxd6 Kg5 37.Rd8 Rh6 38.Rg8+ Kf6 39.Rb8 Rxh2 40.Rxb6 Kg5 41.f6 Rf4+ 42.Kg3 Rhf2 43.Rb5+ Kxf6 44.Bg4 a4 45.c4 Kg6 46.c5 <D>

POSITION AFTER 46.C5

46…a3!

The point is to make the c3 square available for his rook later to stop the c-pawn.

By the way, in the post-game conference the two players revealed that they both calculated that 46…h5 was only a draw: 47.Bxh5+ Kxh5 48.c6+ Kg6 49.c7 R4f3+ 50.Kg4 Rf8 51.Rb8 (51.Rb6+? Kg7 52.Rb8 Rc2) 51…R2f4+ 52.Kg3 Rf3+ 53.Kg2 (53.Kg4?? R8f4#) 53…Rf2+ 54.Kg1! (54.Kg3? Kg5! threatening …R8f3 checkmate. Now if 55.Rb5+ R2f5 the queening pawn on c7 is stopped 56.Rb8 Rf3+ 57.Kg2 Rf2+ 58.Kg1 Kh4 59.c8Q Rf1+ 60.Kg2 R8f2#) 54…Rf1+ 55.Kg2 R1f2+ draw;

In reality, as GM Aryan Tari shows, there is a flaw in the reasoning. Black still wins after 46…h5 because 47.Bxh5+ Kxh5 48.c6+ Black can bring his king to 48…Kh6! instead and now 49.c7 R4f3+ 50.Kg4 Rf8 51.Rb8 Rg2+! 52.Kh4 (it does not matter if the king goes to h3 or h4) 52…Rgg8! and the queening pawn is stopped as well.

Can you imagine going through all of those lines in your head at move 46 when you are already exhausted from the exertions of the past 45 moves?

47.bxa3

Both Carlsen and Navara pointed out that 47.c6 Rxb2 48.c7 Rc4 is an easy win for Black

47…h5 48.Rb4

[48.Bxh5+ Kxh5 49.c6+ Kg6 50.c7 R4f3+ 51.Kg4 Rc3 is the point of giving up his pawn on a3]

48…Rf8 49.Bd1 Rd2 50.Bf3 Rd3 51.Rf4 h4+ 52.Kg4 Rxf4+ 53.Kxf4 Rxa3 54.c6 Rc3 55.Bd5 h3 56.Ke5

This endgame has to be calculated all the way to the end.

56…Rc5! 57.Kd6 Rxd5+ 58.Kxd5 h2 0–1

Why did Navara resign? Because he had seen the forced checkmate: 58…h2 59.c7 both sides queen, but it is not a draw! watch: 59…h1Q+ 60.Kd6 Qb7 61.Kd7 Kf5! 62.Kd8 Kf6 63.Kd7 (63.c8Q Qe7#) 63…Ke5 64.Kd8 Kd6 65.c8Q Qe7# Just a beautiful finish.

Karjakin, Sergey (2753) — Carlsen, Magnus (2845) [B33]
Gashimov Memorial 2019 Shamkir (8.3), 08.04.2019

1.e4 c5 2.Nf3 Nc6 3.d4 cxd4 4.Nxd4 Nf6 5.Nc3 e5 6.Ndb5 d6 7.Nd5 Nxd5 8.exd5 Ne7

In round 3 (see game above) Magnus used 8…Nb8 against Navara so now he trots out 8…Ne7.

9.c4 Ng6 10.Qa4 Bd7 11.Qb4 Bf5 12.Qa4 Bd7 13.Qb4 Bf5 14.h4 h5 15.Bg5 Qb8 16.Be2

It looks like White is better here. There is pressure against the h5–pawn, making it difficult for Black to castle kingside. Then there is pressure on c7, d6 and e7. This shows the depth of modern opening theory — Magnus’ team has studied the position carefully and figured that White’s pieces can be pushed back and he can get in counterplay.

16…a6 17.Nc3 Qc7 18.g3

He is anticipating Black’s 18…Be7.

18…Be7 19.Be3

See what I mean? If he hadn’t played 18.g3 then Black will now be able to capture the pawn on h4.

19…e4

This is an important move Black — he needs to set-up an outpost for his knight on e5.

20.0–0 0–0

Black reckons that White’s weak light squares around his king and his monster knight on e5 will fully compensate for the h5–pawn.

21.Bxh5 Ne5 22.Be2 Qd7 23.Qa4 Qc8 24.c5

Forcing the capture of Black’s powerful e4–pawn.

24…dxc5

I thought that Black would continue 24…Nf3+ 25.Bxf3 exf3 intending …Bh3–g2 then …Qh3, but this seems to be precisely what Karjakin was going for. After 26.Qf4 Bh3 27.cxd6 Bxd6 28.Qxf3 Bxf1 29.Rxf1 White has a knight and two pawns for his rook and it looks like he has all the play. Black’s light-squared bishop will be heavily missed.

25.Nxe4 c4! 26.Nc3 b5 27.Qd1 b4 28.Na4 Be4

The White king is starting to feel very uncomfortable. The killer …Qh3 is threatened.

29.Qd4

[29.Kh2 Qf5 30.Nb6 Rad8 31.f4 Nd3 32.Nxc4 Rxd5 is looking very dangerous for Karjakin, so he avoids it]

29…Qf5 30.f4 Qg6! 31.Bf2 Nd3 32.h5 Qf5 33.Bg4 Qxg4 34.Qxe4 Bd6! 35.Qg2

The alternatives 35.Kh2 and 35.Qxc4 are both met by 35…Nxf4!

35…Rae8 36.Bd4 Qxh5

Black’s plan is to continue 37…Re2 38.Bf2 Rfe8 followed by capturing twice on f2 and then the killer move …Re8–e2.

37.Qf3 Qg6 38.Kh1 Re4 39.Bf2 Rfe8 0–1

Karjakin resigns rather than see 39…Rfe8 A possible finish would have been: 40.Rad1 Nxf2+ 41.Rxf2 (Or 41.Qxf2 Re2 42.Qf3 Qh6+ with mate.; 41.Qxf2 Re2 42.Qf3 Qh6+) 41…Re3 42.Qg2 Qh5+ unfold over the board.

Even the “Minister of Defense” could not withstand Carlsen’s assault.

Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

Warriors go for win

May 6, 2019 | 8:10 pm

The Warriors remained supremely confident of their chances heading into Game Four of their semifinal-round series against the Rockets. It didn’t matter that they lost their immediate past match in overtime, and that their rivals limited them to 44.2% shooting en route. As far as they’re concerned, they’re primed to win today, thus claiming the split they need to consider their trip to Houston a success; they’ll be having a commanding lead in the best-of-seven affair, with the next contest providing an opportunity to move on to the next postseason challenge.

To be sure, there is reason to deem the assessment on the mark. For all the proof of competitiveness the Rockets provided in their Game Three victory, they are compelled to keep pressing today. And even if they emerge triumphant, they will simply have done their job in the grand scheme of things. Absent homecourt advantage, they will need to prevail on the road at least once in order to advance past the Warriors. And the task won’t be easy; not for nothing are the latter Finals fixtures over the last four years, and, notwithstanding season-long travails, still the prohibitive favorites to retain the Larry O’Brien Trophy.

To comprehend the near-Sisyphean nature of the Rockets’ endeavor, fans need only consider the Warriors’ own decorum throughout the series to date. They own two wins and very nearly went three for three, and yet they haven’t come close to showing their best selves. In fact, two-time National Basketball Association Most Valuable Player Steph Curry and backcourt partner and fellow All-Star Klay Thompson have been mired in unprecedented shooting slumps. And given the aggressive defenses being thrown at them, it’s anybody’s guess as to when — or if — they’ll be able to find their touch with consistency.

Nonetheless, the series continues to be the Warriors’ to frame. After all, they have the most feared starting lineup in the league, likewise featuring yet another former MVP in Kevin Durant and all-world defenders Draymond Green and Andre Iguodala. And so formidable are they that the Rockets require offensive savant James Harden to be sharp from opening tip to final buzzer merely to keep in step. Which, in a nutshell, was why the defending champions shook off their Game Three setback as a blip in the radar, and why they’re keen on finally stamping their class today.

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

SM Supermalls and Tribal DDB show us the actual hardest part of being a mom with “It’s Time”

May 6, 2019 | 7:57 am

#SMoments presents “It’s Time”

When is the right time to hold on and let go?

Watch this video and share us your “moving on” stories below. ❤️ #CelebrateMomsDayAtSM

Posted by SM Supermalls on Tuesday, April 30, 2019

Ever since SM Supermalls launched its “SM Moments” video series in 2017, the brand started a tradition that celebrates real stories of its shoppers with insights anyone can relate to.

In partnership with Tribal DDB, SM continues the custom this Mother’s Day with “It’s Time” – a story of a mother who feels she’s being let go by her son as he finally becomes the man and husband she raised him to be. The video was directed by Ian Abaya of Rogue Monkey and released on the brand’s Facebook on May 1.

“Mother’s Day has always been a special season to us because it’s the best time to pay tribute to our loyal SuperMom shoppers who have been celebrating their memorable family moments at SM over the years,” said Jonjon L. San Agustin, SM Supermalls’ senior vice-president for Marketing.

“Through our video, we hope kids will get to appreciate their moms even more, reminisce about their fun childhood, and even possibly be excited on coming up with a surprise as their families celebrate Mom’s Day this May 12,” San Agustin continued.

BusinessWorld Analyst’s Polls

May 6, 2019 | 1:33 am

INFLATION likely slowed in April as food prices continued to drop, analysts said, even as they were divided on the central bank’s next policy move, with some expecting a steady stance despite room to ease and a cut in banks’ reserve requirement ratio (RRR) instead. Read the full story.

RRR could be cut should inflation slow

May 6, 2019 | 1:21 am

A BusinessWorld poll of 10 economists yielded a 3.1% median headline inflation estimate for the month, which if realized will be slower than the 3.3% pace recorded in March and the 4.5% posted in April last year. This will also be the slowest pace seen since December 2017’s 2.9% and will mark the sixth straight month of easing. The median likewise falls within the 2.7-3.5% estimate range given by the Bangko Sentral ng Pilipinas (BSP) last Tuesday.

The Philippine Statistics Authority (PSA) will release official inflation data tomorrow.

Headline inflation averaged 3.8% last quarter, still near the upper end of the government’s 2-4% target. The BSP sees inflation averaging three percent this year.

IHS Markit Asia Pacific Chief Economist Rajiv Biswas, who gave an estimate of 3.1%, said lower food prices — especially for rice — likely caused inflation to slow last month. “An important factor constraining inflation pressures in April has been lower retail rice prices, following the implementation of the rice import liberalization law. This has helped to mitigate the impact of rising retail petrol prices in April, which have been pushed up due to rising world oil prices,” Mr. Biswas said.

Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC), noted that rice prices have dropped to as low as P34-35 per kilogram, down by more than P10 from prices in September-October 2018 or when inflation hit a 6.7% nine-month peak. Sugar prices have also declined to P45-50, down by at least P15 from last year, he said.

“Inflation would likely continue to ease in April 2019 as well as in the coming months, largely driven by lower food prices… more than offsetting any uptick in food/agriculture prices due to the expected mild El Niño drought that could last up to August 2019 and some increase in global oil prices at six-month highs recently,” Mr. Ricafort said.

“Other factors that may support the easing inflation trend include the stronger peso exchange rate recently… and slower global economic growth/outlook especially in developed countries that also fundamentally lead to lower global inflationary pressures.”

DIVIDED ON POLICY MOVE
With the anticipated downtrend in inflation, analysts in a separate BusinessWorld poll were divided on the central bank’s policy decision this week, with five out of 10 expecting the BSP to hold fire despite room to ease and the others penciling in a 25-basis-point (bp) cut in key rates.

Meanwhile, five analysts expect the BSP to slash big banks’ reserve requirement ratio (RRR) — currently at 18% — on Thursday, with three predicting a 100-bp cut.

The BSP’s Monetary Board will review policy settings anew on May 9. At its March meeting, the Monetary Board kept rates within the 4.25-5.25% range, with the key rate of 4.75% still at a decade-high after the BSP fired off a series of hikes worth 175 bps last year to rein in inflation expectations after price spikes surged to as high as a nine-month peak of 6.7% in September and October.

DBS Bank economist Masyita Crystallin said the BSP is likely to keep monetary policy settings steady this week and will consider easing only to boost the economy. “Given the steady inflation deceleration, we think BSP might have enough policy space to cut rate should growth disappoint. However, for [this] week’s policy meeting, BSP is likely to stand pat while keeping the powder dry should the economy need more stimulus,” Ms. Crystallin said.

Besides inflation, the PSA will be releasing a host of economic data leading to the first-quarter gross domestic product data on May 9, hours ahead of the MB’s third policy review for 2019.

For Robert Dan J. Roces, economist from Security Bank Corp., the BSP is expected to reduce universal and commercial banks’ RRR first — which he sees happening within in the first half — before it cuts policy rates, especially with liquidity growth continuing to slow in March.

“There is a higher probability of an RRR cut soonest, definitely within H1, after M3 was reported at its slowest growth [in March] at 4.2% and a ‘data-dependent’ BSP is surely considering this given that low liquidity number… Our preliminary view is that RRR will come first and then interest rates,” Mr. Roces said.

Meanwhile, RCBC’s Mr. Ricafort, who sees a 25-bp cut in key rates and/or a reduction in RRR this week, said slower inflation “may support more dovish/accommodative monetary policy that lead to lower interest rate benchmarks.”

IHS Markit’s Mr. Biswas, who is also penciling in a 25-bp rate cut and a 100-bp RRR cut this Thursday, cited a need to ease monetary policy as real interest rates are “extremely high” following last year’s cumulative hikes.

“As a data-driven central bank, we believe the time is ripe for the Bangko Sentral ng Pilipinas to begin monetary loosening given prevailing economic conditions and the lagged impact of monetary policy on the real economy,” HSBC Global Research economist Noelan Arbis said in a report.

While expecting the BSP to cut both its key rates and the RRR this meeting, Mr. Arbis said this would a be a departure from the central bank’s recent practice of tweaking the reserve ratio between policy meetings.

“We continue to believe that the order of monetary policy easing matters. We posit that RRR cuts should take precedence over policy rate cuts, given that the effectiveness of interest rate cuts to stimulate growth is limited due to tight liquidity in the banking system… [W]e believe it would be imprudent for the BSP to cut the policy rate without cutting the RRR,” Mr. Arbis added.

Last Friday, BSP Governor Benjamin E. Diokno said in an interview with ABS-CBN News Channel on the sidelines of the Asian Development Bank’s annual meeting in Nadi, Fiji that the central bank sees room to “move faster” in easing monetary policy given the sovereign credit rating upgrade the Philippines received from S&P Global Ratings last week.

“I think the (rating upgrade) is another factor that we can now move faster this time,” Mr. Diokno had said.

“It is inevitable that we will have to cut both the reserve requirement ratio and the interest rate,” Mr. Diokno noted. “We’re starting from the previous year’s 175-point increase. That’s not normal.” — R.J.N. Ignacio

Poll sees muted 1st quarter GDP growth on 2019 budget delay

May 6, 2019 | 1:20 am

By Mark T. Amoguis
Senior Researcher

ECONOMISTS expect gross domestic product (GDP) growth in the first quarter to be weighed down primarily by the impact of the delayed enactment of the 2019 national budget despite household spending and private sector investment picking up, according to results of a BusinessWorld poll.

A poll of 20 economists yielded a median GDP growth estimate of 6.1% for the first quarter, easing from the 6.3% uptick recorded in the fourth quarter of 2018 and the 6.5% expansion logged in last year’s first quarter.

If realized, this figure would be the lowest reading in two quarters or since clocking in six-percent growth in the third quarter of 2018. The Philippine Statistics Authority will report the official first-quarter GDP data on Thursday hours ahead of the central bank’s third monetary policy review for this year.

Last week, the country’s economic managers were “conservative” in estimating first-quarter GDP growth, with Socioeconomic Planning Secretary Ernesto M. Pernia penciling the pace at “above six percent” and Trade and Industry Secretary Ramon M. Lopez giving a 6.2-6.4% range.

The interagency Development Budget Coordination Committee, which sets official macroeconomic assumptions and fiscal program, slashed its 2019 GDP growth target last March to a range of 6-7% from 7-8% originally due to delays in signing the budget for this year.

GOV’T SPENDING DRAGS
Among many factors, many of the economists polled last week via e-mail attributed the expected GDP growth slowdown in the first quarter to the four-month delay in signing the P3.662-trillion national budget for the year.

“The main reason [for the slower reading in the first quarter] is that government spending growth ground to a halt as the government operated on a reenacted budget. Export and activity data also suggest growth slowed in other sectors of the economy in Q1,” said Alex Holmes, Asia economist at Capital Economics. He forecast a 5.4% growth in the first quarter.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc. (UnionBank), likewise cited the budget delay despite improving conditions in domestic demand due to the declining inflation trend.

“Specifically, government spending in Q1 may fall by about P46 billion, which represents wasted opportunity to implement infrastructure projects. This means that the demand side of the economy in general has slightly slowed down compared to the same period last year,” said Mr. Asuncion, who estimated 6.1% GDP expansion in the first three months of the year.

For Standard Chartered Bank economist Chidu Narayanan, the budget delay “likely shaved 0.3-0.5 ppt (percentage point)” off GDP growth in the first quarter. He gave a 6.2% growth estimate.

The government operated on a reenacted 2018 budget from the start of the year until April 15, when President Rodrigo R. Duterte signed the latest general appropriations into law, but vetoed P95.3 billion in appropriations that he said were not in accordance with his administration’s priorities, slashing this year’s national budget to about P3.662 trillion.

Running on a reenacted budget had left new projects unfunded in the first semester, which would otherwise have been ideal for infrastructure work ahead of the 45-day public works ban starting March 29 ahead of the May 13 mid-term elections and the rains next semester.

State disbursements missed the program by 11% at P777.99 billion in the first quarter, although they edged up a percent from P771.964 billion year ago according to data from the Bureau of the Treasury.

In March alone, state spending fell by eight percent from a year ago and 16% short of the P287.327 billion programmed for that month.

Separate data from the Department of Budget and Management show infrastructure and capital outlays growing 26.3% to P118.4 billion in the first two months of the year from P93.8 billion a year ago.

EASING INFLATION, ELECTION BOOST
On the other hand, economists said that private consumption may have gotten a boost from easing inflation as well as election-related spending in the run-up to the May 13 legislative and local elections.

Emilio S. Neri, Jr., lead economist at Bank of the Philippine Islands, predicted a 6.2% growth as “our leading indicators for retail sales, business and consumer confidence, car sales, government construction projects support our forecast on upside. We think election spending helped bolster growth on most of these items.”

DBS Bank economist Masyita Crystallin gave a 6.1% forecast, noting that “decelerating inflation has helped maintain purchasing power and hence we believe that consumption growth will be stable.”

ING Bank NV Manila Branch senior economist Nicholas Antonio T. Mapa also expects household consumption to have picked up in the first quarter, giving a 5.9% GDP growth estimate.

At the same time, Mr. Mapa doubted the impact of the “election bump” on the economy.

“[A] closer inspection of the contributions to growth per sector [shows that] the main reason for faster growth during EY (election year) is a strong showing from capital formation in the [first half] of the year,” he said.

“[Household] spending does see an acceleration as more funds exchange hands but the 2019 EY is likely to see boost emanate only from the consumption side with capital formation likely taking a back seat as rate hikes do their damage.”

Headline inflation eased for the fifth straight month to 3.3% in March — the slowest pace in 15 months or since December 2017’s 2.9% — bringing the year-to-date average at 3.8%. March brought the year-to-date inflation back within the 2%-4% target range of the Bangko Sentral ng Pilipinas (BSP) for this year, but still above the its reduced three percent forecast average for 2019.

April inflation data will be released tomorrow.

OUTLOOK
Despite the first quarter hiccup, economists expect the economy to recover for the rest of the year now that the national budget for this year has been signed.

“The signing of the 2019 budget in mid-April should see growth rebound in the second quarter. For the year as a whole, growth is likely to come in at around 6.0%,” said Capital Economics’ Mr. Holmes.

ING’s Mr. Mapa said that growth “will likely remain challenged” in the first half of this year due to the “lingering effects of the budget backlog and elevated borrowing costs.”

On the other hand, he added that the possible easing of monetary policy from the BSP and the 2019 budget coming on line “should help [second-half] growth finish the year strong.”

BSP to take measured policy steps — S&P

May 6, 2019 | 1:18 am

By Reicelene Joy N. Ignacio
Reporter

THE PHILIPPINE ECONOMY is not overheating, but this does not mean the central bank will dial back the cumulative 175-basis-point interest rate hike it fired off last year to ease inflation pressures.

“There was no overheating seen within the economy of the Philippines. Some analysts covering the Philippines last year were worried of overheating because of the inflation we saw. What the inflation ended up doing was to cut… disposable incomes of households… and that weighed down consumption,” Vincent Conti, S&P Global Ratings Asia Pacific economist, said in a Friday webcast.

“Inflation has sharply fallen and is now back to target range,” he noted.

“We support the view that the Philippines is not overheating; [but] It does not mean for us that monetary policy settings, that policy rates, should go back to before inflation shocked last year.”

Overheating in an economy occurs when a country’s productive capacity cannot keep up with demand in a fast-growing economy, and rising inflation is a key overheating warning sign. Headline inflation had picked up for nine straight months to a nine-year-high 6.7% in September last year that was sustained in October, before slowing for five straight months to a 15-month-low 3.3% in March. The Bangko Sentral ng Pilipinas (BSP) increased policy interest rates by a total of 175 basis points in five meetings last year, leaving the key benchmark at a decade-high 4.75%.

“We think the BSP does have the preference to cut back on the overtightening they were forced into last year, but they will not go all the way back to the 175 basis points (bps) they had to raise last year,” Mr. Conti said.

He added that slowing global demand — as reflected in easing purchasing managers indices including for the Philippines — “is a bit of headwind, but I would not be so concerned about it.”

“The switch to cash-based budget system in the Philippines would be [followed by] an uptick in infrastructure spending in the second half of the year…” he said, adding that the country, “unlike many of its neighbors in Asia, also has a very strong domestic component of growth led by strong growth consumption by the middle class.”

Andrew Wood, S&P director for Sovereign and Internal Public Finance Ratings, said that gross domestic product “growth may slightly underperform in the first half of the year especially due to delay [of 2019 budget enactment and]… the reenacted budget,” but added: “We’re expecting it to pick up in second half of the year.”

Mr. Wood said S&P, which on April 30 gave the Philippines its highest credit rating yet at “BBB+”, is now watching for progress in the government’s remaining tax reforms, including one that will cut the 30% corporate income tax rate in a bid to attract more foreign direct investments.

Mindanao railway construction pushed to Q4 due to alignment issues

May 6, 2019 | 1:17 am

DAVAO CITY — Construction of the Mindanao Railway System (MRS) has been moved to the fourth quarter this year as the government reviews the alignment in Davao City following resistance from affected homeowners.

In August last year, Project Manager Patricia Melizza B. Ruivivar — after presenting the plan to the Davao City council — said the first phase of the MRS, covering the 102-kilometer Tagum-Davao-Digos (TDD) segment, was targeted to start by Jan. 2019.

Transport Secretary Arthur P. Tugade, in a press conference here Friday for the Tsuper Iskolar scholarship program launch, said that his department has already finalized the alignment and the downloading of funds for right-of-way acquisition, but residents of a gated subdivision in the city have appealed for reconsideration.

In February this year, members of the Monteritz Classic Estates Homeowners Association Inc. (MCEHAI) asked the Department of Transportation (DoTr) to review the railway’s alignment, particularly the viaduct that would hit their area with 40 homeowners and 67 lot owners affected.

Also in February, the South Pacific Golf and Leisure Estates Homeowners Association appealed for reconsideration. No house in the high-end subdivision will be directly hit by the train track, but it will traverse the 18-hole golf course, including its newly built clubhouse, which cost P550 million.

Eymard D. Eje, Department of Transportation assistant secretary for Project Implementation-Mindanao Cluster, said his office has been working to resolve the issues, emphasizing that the new transport system is being planned to cause the least public disturbance.

“When there is a development, especially if it is national(-funded), there will always be people that will be inconvenienced. There will always be difficulty because you are putting a new system,” Mr. Tugade said.

“I hope our approach here is not just personal concerns, let’s look at the benefit for the majority… That is why we are requesting for a fuller understanding and a wider patience,” he added, speaking in mixed Filipino and English.

Despite the delay, the Transport chief said the department is intent on having the railway at least partially operational by 2022.

“Our goal for the Mindanao railway is partial operability of the stations in Tagum City, Digos City, and Davao City,” Mr. Tugade said.

“It is our goal that there will be partial operability of these stations by first or second quarter of 2022. I am trying to fast-track and move forward… These will be constructed simultaneously.”

The Tagum-Davao-Digos segment is estimated to cost about P35 billion and will be partly funded by official development assistance from China.

It is planned to have eight stations, with three in Davao del Norte (Tagum City, Carmen, Panabo), three in Davao City (Mudiang, Davao central, Toril), and two in Davao del Sur (Sta. Cruz, Digos).

A 10-hectare depot will be built in Tagum. — Maya M. Padillo

BoI-approved investment projects rise 46.5% in first 4 months

May 6, 2019 | 1:14 am

INVESTMENT projects registered with the Board of Investments (BoI) in the four months to April rose 46.5% year on year to P286.7 billion, led by the power industry.

Investment by domestic entities rose 14% to P219.7 billion, the BoI said in a statement Friday.

Foreign-sourced investment proposals rose sharply to P66.9 billion from P2.9 billion a year earlier.

Power projects accounted for P185.4 billion in registered investments, up 78% from a year earlier.

The BoI is one of the government’s investment promotion agencies, and project proponents register with it in order to qualify for incentives.

Manufacturing accounted for P44.6 billion, from P15.9 billion a year earlier. This was followed by the information and communication sector where project registrations rose to P33.2 billion from P340 million a year earlier. Meanwhile, proposed investments in the accommodation and food service sector rose to P8.4 billion from P1 billion in 2018.

“With the government’s commitment to ‘clean and green’ infrastructure systems, successive renewable power projects were approved by the BoI,” Trade Undersecretary for Industry Development and Trade Promotion and BoI Managing Head Ceferino S. Rodolfo said.

The BoI said such renewable projects include the P35.2-billion 506-megawatt (MW) natural gas power plant of Vires Energy Corp. in Batangas City; the 15-MW biomass plant of Cagayan Biomass Energy Corp. in Isabela and the P1-billion geothermal source project of Philippine Geothermal Production Co., Inc. located in several towns in Albay and Camarines Sur.

Calabarzon was the proposed location for P198 billion in new investment. Central Luzon followed with P26.7 billion and the National Capital Region was third with P7.9 billion. Rounding the top five are the Central Visayas with P5.7 billion and Cagayan Valley with P4.3 billion.

Singapore was the biggest foreign investor in the year to date with P35.4 billion, up sharply from P38.7 million a year earlier. This was followed by the Netherlands with P9.1 billion; Thailand with P8.5 billion; Japan with P5.5 billion; and the United States with P2.2 billion.

“Foreign investors remain confident in the country’s business prospects as foreign capital continues to surge into the country while domestic investors remain upbeat as domestic capital continued its steady growth,” Trade Secretary and BoI Chairman Ramon M. Lopez said.

He added that the Philippines’ recent credit rating upgrade from S&P Global, as well as the Asian Development Bank’s view of the Philippines as the second fastest-growing economy in Southeast Asia, will continue to bring in investment.

“I join the economic managers in attributing all these very positive economic developments, including the continued surge of BoI investment approvals in priority and strategic sectors, to the steadfast implementation of the 10-point economic agenda of President Rodrigo R. Duterte,” Mr. Lopez added.

The BoI has a P1-trillion investment target for 2019.

The investment promotion agency posted a record P907 billion worth of project registrations, with most projects from the manufacturing, infrastructure, transport and utilities sectors. — J.C. Lim

DoF touts stronger BIR collections under Duterte

May 6, 2019 | 1:13 am

THE Department of Finance (DoF) said the Bureau of Internal Revenue (BIR) collections have grown sharply in the first two full years of the Duterte administration, while remaining just a few percentage points below target in each of the two years.

In a statement, the DoF said that the BIR collected P1.78 trillion, or 97.35% of its P1.83-trillion target, in 2017, and P1.96 trillion, or 96.04% of the P2.04-trillion target, in 2018.

In 2015, the last full year under the previous government, the BIR reported collections of P1.44 trillion, or 86.12% of its target of P1.67 trillion.

The current administration took over at the end of June 2016.

“To his credit, President Duterte has transcended all the political chatter and stayed focused on pursuing policy initiatives such as tax reform, trade liberalization and infrastructure modernization, that are necessary to sustain the growth momentum, attract investments and ensure financial inclusion for all Filipinos on his watch,” Carlos G. Dominguez III, Finance Secretary, said in the statement.

According to the DoF, tax effort, or the proportion of collections relative to the size of the economy, was recorded at 11.27% in 2017 and 11.26% in 2018, from 10.82% seen in 2015 and 10.56% in 2014.

“The 2018 tax effort of 14.7% to GDP (gross domestic product) is the highest in 20 years,” Mr. Dominguez said.

The DoF noted that the collection performance of the BIR averaged 96.7% in the first two full years of President Rodrigo R. Duterte’s term, as compared with the 94.5% in the full five years of the previous administration.

The DoF attributed the increase to the government’s tax reform program that “has led to the strong performance of revenue collection” wherein tax revenue increased by 14% to P2.565 trillion in 2018 from P2.250 trillion a year earlier.

The BIR has said it is expecting higher collections for this year from the tax amnesty program rollout.

The BIR generated total revenue of P468.2 billion in the first quarter of 2019, up 11% from a year earlier.

The BIR has been actively running after manufacturers of cigarettes and other commodities with fake tax stamps and charging them with tax evasion, as well as requiring Philippine Online Gaming Operators (POGOs) to register their companies with the BIR as a condition for the issue of operating licenses. — Reicelene Joy N. Ignacio

Goods trade up 10.5% amid large deficit with top partner China; electronics still top export

May 6, 2019 | 1:12 am

INTERNATIONAL trade in goods in 2018 totaled $182.15, up 10.5%, the Philippine Statistics Authority (PSA) said, with China, the top trading partner, accounting for 16.9% of total trade while enjoying a large surplus vis-a-vis the Philippines with exports of $22.01 billion and imports of $8.82 billion.

Electronics remained the top Philippine export, generating overseas shipments worth $38.18 billion, up 4.5% from a year earlier and accounting 55.1% of the total, the PSA said in its preliminary report on international trade for 2018. It added that the top 10 export commodities accounted for 80.7% of export receipts.

Other top exports were “other” manufactured goods, with a 6.3% share worth $4.3 billion, and machinery and transport equipment with a 4.8% share valued at $3.31 billion.

In addition, machinery and transport equipment exports declined 11.6% from a year earlier.

China accounted for $4.96 billion of the Philippines’ electronic products exports, or 56.3%.

Japan, the second-largest trading partner in 2018, accounted for 11.6% of total trade in 2018 or $21.14 billion. The trade balance with Japan is slightly in Japan’s favor, with the country taking in Philippine exports of $10.32 billion while shipping $10.82 billion worth of goods the other way.

The top export to Japan was electronic products worth $3.01 billion, followed by wiring sets for vehicles valued at $962.36 million.

The United States was the third-largest trading partner with a share of 10.3% or $18.70 billion. The trade balance favors the Philippines with exports to that country valued at $10.64 billion compared with imports worth $8.06 billion. The top export to the US was electronic products worth $5.13 billion, accounting for 48.2% of the total. The top US export to the Philippines was also electronics worth $2.55 billion or 31.6% of the total, followed animal feed (excluding unmilled cereals) valued at $1.01 billion, or a share of 12.6%.

Total trade with ASEAN amounted to $39.64 billion, with the Philippines incurring a trade deficit with exports worth $11.18 billion and imports valued at $28.46 billion. ASEAN as a bloc accounts for 21.8% of total trade.

Of other major economic blocs, the European Union accounted for $17.49 billion, or 9.6% of total trade. The Philippines enjoyed a surplus of $320.71 million vis-a-vis the EU on exports of $8.91 billion and imports of $8.59 billion.

Trade with APEC was $151.53 billion, with the Philippines also suffering from a deficit estimated at $36.52 billion, on exports of $57.50 billion and imports of $94.02 billion.

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