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Globe clinches 3-Peat win as Employer of the Year at HR Excellence Awards, gets 6 awards

Globe has been named Employer of the Year for the third consecutive year at the 2024 HR Excellence Awards, cementing its leadership in human resource management.

For three years running, Globe has been honored as Employer of the Year at the 3rd HR Excellence Awards 2024. With a total of six awards, Globe’s dedication to a supportive, and forward-thinking work culture continues to set the company apart.

In addition to the coveted Employer of the Year gold accolade, Globe secured two more golds in the Total Rewards Strategy and In-House Talent Pipeline Strategy categories. It also received silver awards for Best HR Team (MNC), Business Transformation, and Change Management.

“At Globe, our journey to uplift Filipino lives begins with the way we support and invest in our team. At our core is a relentless dedication to addressing our employees’ needs while creating opportunities for their growth. Being recognized as an industry leader for our dedication and excellence is a testament to our efforts,” says Renato Jiao, Globe Chief Human Resource Officer.

“This honor reflects Globe’s deep-rooted commitment to our people. We are deeply thankful for our team’s tireless dedication and passion. What we’ve built together is truly remarkable, and we are thrilled and honored by this achievement,” he adds.

The company’s success at the HR Excellence Awards underscores its holistic approach to employee welfare and development. Globe has consistently demonstrated its ability to support and innovate wellness, learning, and growth programs that enable employees to live their best lives, despite the diverse nature of its workforce.

Globe’s commitment extends beyond excellence in the workplace to embrace sustainability and active nation-building. This holistic approach has fostered a culture where employees are motivated to uplift Filipino lives and contribute to customers’ well-being through unique programs and initiatives.

The HR Excellence Awards serves as a platform to recognize outstanding achievements in human resource management across the Philippines. With 40 carefully curated categories, the event brings together HR leaders and industry visionaries to celebrate excellence and innovation in the field.

Globe’s continued success at these awards highlights its position as a trailblazer in the telecom and digital solutions industry. Through its comprehensive approach to human resource management, Globe continues to set the standard for workplace excellence.

To learn more about Globe, visit https://www.globe.com.ph/.

 

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US says Iran emailed stolen Trump campaign material to Biden camp

The use of cryptocurrency in money laundering is “worrying,” according to an expert. — REUTERS

Iranian hackers sent emails containing stolen material from Republican former President Donald Trump‘s campaign to people involved in Democratic President Joe Biden‘s then re-election campaign, part of an alleged broader effort by Tehran to influence the US election, US agencies said on Wednesday.

“Furthermore, Iranian malicious cyber actors have continued their efforts since June to send stolen, non-public material associated with former President Trump’s campaign to US media organizations,” the FBI, Cybersecurity and Infrastructure Security Agency, and Office of the Director of National Intelligence said in a joint statement.

“This malicious cyber activity is the latest example of Iran’s multi-pronged approach … to stoke discord and undermine confidence in our electoral process,” the agencies said.

They added that there is currently no information indicating those recipients replied. They did not provide further details on the nature of the stolen material.

In August, the United States accused Iran of launching cyber operations against the campaigns of both US presidential candidates and targeting the American public with influence operations aimed at fanning political discord.

Iran has denied interfering in US affairs.

On Wednesday its permanent mission to the United Nations in New York said the latest US allegations were “fundamentally unfounded, and wholly inadmissible.” It added: “Iran neither has any motive nor intent to interfere in the US election.”

Malicious cyber actors sent unsolicited emails to individuals in Mr. Biden’s campaign in late June and early July that contained a text excerpt from stolen material from the Republican presidential candidate’s campaign, the agencies said.

Mr. Biden dropped out of the presidential race on July 21 and was replaced by Vice President Kamala Harris as the Democratic candidate. Polls show Trump and Harris are in a tight race.

In a statement, the Trump campaign said Ms. Harris and Mr. Biden should disclose whether they used the hacked material “to hurt” Mr. Trump. The former president later said in a rally on Wednesday night that Iran hacked into his campaign to help Democrats, calling it foreign election interference.

“We’re not aware of any material being sent directly to the campaign,” a Harris campaign spokesperson said after the statement by US agencies. “A few individuals were targeted on their personal emails with what looked like a spam or phishing attempt.”

Tehran also says Washington has interfered in its affairs over decades ranging from a 1953 coup of a prime minister to the 2020 killing of Iranian military commander Qassem Soleimani. – Reuters

Nintendo, Pokemon sue ‘Palworld’ producer for patent infringement

REUTERS
By Pocketpair – https://steamdb.info/app/1623730/info/, Fair use, https://en.wikipedia.org/w/index.php?curid=75991021

TOKYO – Nintendo and The Pokemon Company have filed a patent infringement lawsuit against the producer of hit survival adventure game “Palworld”, the companies said on Thursday.

The lawsuit, filed with the Tokyo District Court on Wednesday, seeks an injunction and compensation for damages on the grounds that the game, produced and released by Tokyo-based Pocketpair Inc, infringes multiple patent rights.

Palworld, dubbed “Pokemon with guns”, became a breakout hit with more than 25 million players within a month of its release in mid-January. In the game, players can use guns to capture and train cute creatures known as “pals”.

Pocketpair representatives did not respond immediately to a request for comment.

The Pokemon Company said in January it would investigate and take action over any infringement of intellectual property rights.

Pocketpair in July announced the establishment of a joint venture company, Palworld Entertainment Inc, in collaboration with Sony Music Entertainment

and Aniplex Inc to promote the licensing business of Palworld globally. – Reuters

China says will negotiate ‘until the last minute’ on EU EV probe

EREN GOLDMAN-UNSPLASH

HONG KONG – China’s commerce minister said on Wednesday that Beijing will continue to negotiate “until the last minute” on the European Union’s electric vehicle probe, with the investigation undermining confidence of Chinese companies investing in Europe.

Wang Wentao was speaking in Brussels at a China-Europe Electric Vehicles event where around 30 top executives of Chinese and European electric vehicle industries met to discuss views on the EU’s anti-subsidy case against China’s EVs.

Wang is due to meet the European Commission’s trade commissioner Valdis Dombrovskis on Thursday to discuss rising trade tension.

The European Commission is on the verge of proposing final tariffs of up to 35.3% on EVs built in China on top of the EU’s standard 10% car import duty.

The EU’s 27 members are due to vote on the proposed final duties on Sept. 25. They will be implemented by the end of October unless a qualified majority of 15 EU members representing 65% of the EU population votes against the levies. – Reuters

Taiwan deepening security cooperation with US, other ‘allies’

XANDREASWORK-UNSPLASH

TAIPEI – Taiwan’s combat effectiveness has improved thanks to its deepening security partnership with the United States and other friends and “allies” but this is kept deliberately low key, the island’s defense minister said.

Democratically governed Taiwan, which is claimed by China as its own territory, does not have treaty based defense relations with Washington or any of its allies, though the United States is bound by law to provide Taiwan with the means to defend itself and military officials from both sides do conduct visits and training.

Beijing frequently erupts with anger at any hint of countries having military ties with Taiwan, and has repeatedly sanctioned US arms companies for selling weapons to Taipei.

Speaking to reporters on Wednesday in comments embargoed until Thursday, Defense Minister Wellington Koo made rare comments about those relations, given their sensitivity.

“In the past few years, Taiwan, the United States and other friends and allies have continuously strengthened security partnerships and continued to expand and deepen military cooperation,” he said.

“This has contributed to the improvement of the national military’s combat effectiveness and regional peace and stability.”

Cooperation focuses on “substantively improving” combat effectiveness rather than just “formality”, Mr. Koo said.

“The Defense Ministry has never publicized this foreign military cooperation with great fanfare. This is to take into account the international situation and respect for our friends and allies; it is also to avoid unnecessary interference,” he added, in a veiled reference to China.

Beijing, which has never renounced the use of force to bring Taiwan under its control, has been staging regular exercises around the island for five years.

China held “punishment” war games around Taiwan in late May shortly after Lai Ching-te took office as president in anger at what Beijing viewed as “separatist” content in his inauguration speech. Lai has repeatedly offered talks with China but been rebuffed. He says only Taiwan’s people can decide their future.

The Republic of China’s government fled to Taiwan in 1949 after losing a civil war with Mao Zedong’s communists and it remains Taiwan’s official name. No peace treaty or armistice has ever been signed. – Reuters

US keeps missile system in Philippines as China tensions rise, tests wartime deployment

US Army rangers and their Filipino counterparts at the Balikatan war games in March 2022. — PHILIPPINE STAR/WALTER BOLLOZOS

MANILA – The United States has no immediate plans to withdraw a mid-range missile system deployed in the Philippines, despite Chinese demands, and is testing the feasibility of its use in a regional conflict, sources with knowledge of the matter told Reuters.

The Typhon system, which can be equipped with cruise missiles capable of striking Chinese targets, was brought in for joint exercises earlier this year, both countries said at the time, but has remained there.

The Southeast Asian archipelago, Taiwan’s neighbor to the South, is an important part of US strategy in Asia and would be an indispensable staging point for the military to aid Taipei in the event of a Chinese attack.

China and Russia condemned the move – the first deployment of the system to the Indo-Pacific – and accused Washington of fueling an arms race.

The deployment, some details of which have not been previously reported, comes as China and US defense treaty ally the Philippines clash over parts of the hotly contested South China Sea.

Recent months have brought a series of sea and air confrontations in the strategic waterway.

Philippine officials said Filipino and US forces continued to train with the missile system in northern Luzon, which faces the South China Sea and is close to the Taiwan Strait, and they were not aware of immediate plans to return it, even though the joint exercises end this month.

A Philippine army spokesman, Colonel Louie Dema-ala, told Reuters on Wednesday that training was ongoing and it was up to the United States Army Pacific (USARPAC) to decide how long the missile system would stay.

A public affairs officer for USARPAC said that the Philippine army had said the Typhon could stay beyond September and soldiers trained with it as recently as last week, engaging “in discussions over employing the system, with a focus on integrating host nation support”.

A senior Philippine government official, who spoke on condition of anonymity, and another person familiar with the matter said the US and the Philippines were testing the feasibility of using the system there in the event of a conflict, trialing how well it worked in that environment.

The government official said the Typhon – a modular system, which is intended to be mobile and moved as needed – was in the Philippines for a “test on the feasibility of deploying it in country, so that when the need arises, it could easily be deployed here”.

The office of Philippine President Ferdinand Marcos Jr did not respond to a request for comment.

 

‘SLEEPLESS NIGHTS’

The US army flew the Typhon, which can launch missiles including SM-6 missiles and Tomahawks with a range exceeding 1,600 km (994 miles), to the Philippines in April in what it called a “historic first” and a “significant step in our partnership with the Philippines”.

A note by the US Congressional Research Service, a policy institute of the US Congress, published at the time said it was “not known if this temporary deployment could eventually become permanent”.

In July, army spokesman Dema-ala confirmed the Typhon missile launcher remained in the Philippines’ northern islands and said there was no specific date as to when it would be “shipped out”, correcting an earlier statement that it was due to leave in September.

A satellite image taken on Wednesday by Planet Labs, a commercial satellite firm, and reviewed by Reuters showed the Typhon at the Laoag International Airport, in Ilocos Norte province.

Jeffrey Lewis, director of the East Asia Nonproliferation Program at the James Martin Center for Nonproliferation Studies, who analyzed the images, said the system remained.

The senior government official who spoke to Reuters said there were no immediate plans to withdraw it.

“If ever it will be pulled out, it is because the objective has been achieved and it may be brought (back) in after all the repairs or the construction would have been done,” the official said, adding that there was strategic value for the Philippines in keeping the system to deter China.

“We want to give them sleepless nights.”

 

ANTI-SHIP WEAPONS

The US has been amassing a variety of anti-ship weapons in Asia, as Washington attempts to catch up quickly in an Indo-Pacific missile race in which China has a big lead, Reuters has reported.

Although the US military has declined to say how many will be deployed in the Indo-Pacific region, more than 800 SM-6 missiles are due to be bought in the next five years, according to government documents outlining military purchases. Several thousand Tomahawks are already in U.S. inventories, the documents showed.

China has denounced the deployment of the Typhon several times, including in May when Wu Qian, spokesperson for China’s defense ministry, said Manila and Washington had brought “huge risks of war into the region”.

Russian President Vladimir Putin in June cited the deployment when announcing his country would resume production of intermediate- and shorter-range nuclear-capable missiles.

Philippine Foreign Affairs Secretary Enrique Manalo in July assured his Chinese counterpart the presence of the missile system in his country posed no threat to China and would not destabilize the region.

China has fully militarized at least three of several islands it built in the South China Sea, which it mostly claims in full despite a 2016 arbitral ruling that backed the Philippines, arming them with anti-ship and anti-aircraft missiles, the U.S has said.

China says its military facilities in the Spratly islands are purely defensive, and that it can do what it likes on its own territory. – Reuters

ROW issues cause a major hurdle in the NSCR completion – PNR

STOCK PHOTO

Issues with right of way (ROW) are one of the difficulties in the construction of the North-South Commuter Railway, according to the Philippine National Railway (PNR) Chairman Michael Ted R. Macapagal. 

“The challenge of course is right of way issues. That’s a major hurdle, I have to admit,” Mr. Macapagal said on July 31 in an interview. 

He added that it is vital to inform the people about the project’s role in decongesting and reducing the travel time to Metro Manila by 50%. 

“We need to inform them of the different benefits that will be available to the people once this project is completed.” 

Further, striking a ‘delicate balance’ will help overcome the difficulty, Mr. Macapagal said.  

“We, the government have to be decisive, but… we have to show empathy. We have to explain to the people why we’re doing what we’re doing.” 

He added that the government has extended financial help to informal and formal settlers affected by the construction. 

To expedite addressing the ROW problems, President Ferdinand R. Marcos Jr. inked Administrative Order (AO) 19, which created an inter-agency task force to handle the ROW activities in railway projects like NSCR on March 25. 

As stated in the AO 19, the committee assigned will “study and devise an efficient and collaborative mechanism to streamline the process of land acquisition necessary for the implementation of all railway projects.”  

The Tutuban to Malolos station has 43.49% construction progress, while Malolos to Clark has 33.06%. Manila to Calamba has also begun its construction with 7.20% progress, according to the Department of Transportation (DOTr) on Monday.  

The department targets complete operations by 2030, with partial operations in 2027.  

The railway project aims to transport 800,000 passengers daily once fully operational. – Almira Louise S. Martinez

Fed unveils oversized rate cut as it gains ‘greater confidence’ about inflation

REUTERS

WASHINGTON – The U.S. central bank on Wednesday kicked off an anticipated series of interest rate cuts with a larger-than-usual half-percentage-point reduction that Federal Reserve Chair Jerome Powell said was meant to show policymakers’ commitment to sustaining a low unemployment rate now that inflation has eased.

“We made a good strong start and I am very pleased that we did,” Powell said at a press conference after the Fed, noting its increased confidence that the country’s bout with high inflation was over, reduced its benchmark policy rate by 50 basis points to the 4.75%-5.00% range. “The logic of this both from an economic standpoint and from a risk management standpoint was clear.”

So clear in fact that Powell, who has championed policy-by-consensus since becoming Fed chief in 2018, saw the first dissent from a Fed governor since 2005 when Michelle Bowman voted against the decision in favor of a smaller quarter-percentage-point rate cut – evidence some analysts said of his motivation to start the Fed’s easing cycle in a compelling way.

Powell called the move a “recalibration” to account for the sharp decline in inflation since last year; he noted that the economy remained strong but the central bank wanted to stay ahead of and stave off any weakening in the job market; analysts saw a nod to what has been an overarching aim of his to avoid unnecessarily trading higher unemployment to reach the central bank’s 2% inflation target.

“A soft landing is within reach, which would seal his legacy as Fed Chairman,” said Diane Swonk, the chief economist at KPMG.

In addition to approving the half-percentage-point cut on Wednesday, Fed policymakers projected the benchmark interest rate would fall by another half of a percentage point by the end of this year, a full percentage point next year, and half of a percentage point in 2026, though they cautioned that the outlook that far into the future is necessarily uncertain.

The move marks a significant pivot in U.S. monetary policy and a recognition of the Fed’s growing comfort with inflation continuing to ease to its target. It is currently about half a percentage point above it.

Despite coming only about seven weeks before the U.S. presidential election, the Fed’s policy decision elicited a fairly muted reaction, initially at least, from the presidential candidates.

Vice President Kamala Harris, the Democratic presidential candidate, called the rate cut “welcome news” for Americans.

“I know prices are still too high for many middle-class and working families,” she said in a statement.

Republican nominee Donald Trump, who as president first appointed Powell to lead the Fed, said the size of the cut suggested the economy may be in trouble.

“To cut it by that much, assuming they’re not just playing politics, the economy would be very bad,” Trump told reporters.

Powell, however, said the economy remained strong, with many job market indicators like unemployment claims and even the current 4.2% unemployment rate not at worrying levels.

But he nodded to the same issues economists and analysts raise with inflation: That it takes time for changes in monetary policy to have an impact and that, between anecdotal information from companies and slowed hiring rates, officials felt they needed to preempt further labor market weakness just as others have argued for fast action to preempt inflation.

“There is thinking that the time to support the labor market is when it is strong, and not when you begin to see layoffs,” Powell said.

‘WITH A BANG’

The Fed had kept its policy rate in the 5.25%-5.50% range since last July, when it ended an 18-month rate-hike campaign that was meant to control a surge in inflation, which soared in 2022 to a 40-year high.

Powell declined to declare victory on that front, but he did say inflation is now near the Fed’s 2% goal, and labor conditions are consistent with the central bank’s other goal of maximum employment.

U.S. stocks gained following the release of the statement and updated quarterly economic projections before reversing course to close lower on the day. The U.S. dollar .DXY was slightly stronger against a basket of currencies, while yields on U.S. Treasuries rose.

Rate futures traders moved to price in even more easing than projected by the Fed, with the policy rate now expected to be in the 4.00%-4.25% range by end of this year.

“The Fed ended the pause with a bang. It’s a strong signal that they cut by 50 basis points and expect another 50 basis points of cuts this year. This was controversial,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Inflation, based on the Fed’s preferred measure, is currently about half a percentage point above the 2% level, and the new economic projections now show the annual rate of increase in the personal consumption expenditures price index falling to 2.3% by the end of this year and down to 2.1% by the end of 2025.The unemployment rate is seen ending this year at 4.4% and remaining there through 2025. Economic growth is projected to be 2.1% through 2024 and 2% next year, the same as in the last round of projections issued in June. — Reuters

BSP to cut RRR ‘substantially’ this year

BANGKO SENTRAL ng Pilipinas Governor Eli M. Remolona, Jr. — COURTESY OF BANGKO SENTRAL NG PILIPINAS

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) plans to reduce the reserve requirement ratio (RRR) “substantially” this year, its top official said.

“We’re considering it. We’ve discussed the timing of it. I would say it’s going to happen this year,” BSP Governor Eli M. Remolona, Jr. said in a press chat on Wednesday.

“We will reduce reserve requirements substantially this year and then there may be further reductions by next year,” he added.

The RRR is the portion of reserves that banks must hold onto rather than lending out.

The BSP reduced the ratio for big banks and nonbank financial institutions with quasi-banking functions by 250 bps to 9.5% in June 2023.

It also lowered the ratio for digital banks by 200 bps to 6% and by 100 bps for thrift banks, and rural and cooperative banks to 2% and 1%, respectively.

The central bank has since brought down the RRR for universal and commercial banks to a single-digit level from a high of 20% in 2018.

“The banks want a reduction of the reserve requirement and they’re saying ‘if you do reduce it, we’ll do this other thing for you,’ reduce transaction costs on payments, for example,” Mr. Remolona said.

“We’re trying to manage that. But the idea is to reduce the reserve requirements in a substantial way,” he added.

The BSP governor earlier said that they are eyeing to bring down the RRR to as low as 5%.

Meanwhile, Mr. Remolona said that the RRR cuts’ impact on the economy will not be immediate.

“Our transmission mechanism has long lags. That’s partly because the markets are not deep and liquid. We take account of those lags,” he said.

“At the same time, we’re trying to improve the liquidity of the markets to shorten those lags. But that’s an effort that will take some time.”

BSP Assistant Governor Zeno R. Abenoja said that slashing the RRR could spur lending activities and economic growth.

“We are hoping additional liquidity will be deployed to help expand productive economic activities. However, that will take time,” he said.

“So, some of it will be deployed by banks in various financial markets, including government securities, equity, but some of it may still reside in their accounts, including depositing it back to the BSP.”

The RRR cuts in June last year coincided with the expiration of the BSP’s pandemic relief measures, which allowed banks to count their lending to small businesses as part of their compliance with the reserve requirement for deposit liabilities and substitutes.

“In terms of liquidity, the reserves for the reserve requirement are on our balance sheet on the same side, on the liabilities side. So, if we cut the reserve requirement, that part will go down and we want to compensate for that,” Mr. Remolona said.

“So, that’s more liquidity for the bank system and we want to compensate for that by absorbing back some of that liquidity, which will go into some other part of our balance sheet,” he added.

The BSP chief earlier said that the Philippines’ current RRR is among the highest in Asia. He also said reserve requirements “drive a wedge” between deposit rates and lending rates.

When a bank is required to hold a lower reserve ratio, it has more funds to lend to borrowers. This increases the bank’s lending capacity, impacting its ability to support economic growth and meet the credit needs of individuals and businesses.

NG unlikely to issue euro bonds this year

Fifty-euro notes are seen in this file photo. — REUTERS

By Beatriz Marie D. Cruz, Reporter

THE NATIONAL Government (NG) is unlikely to push through with its planned issuance of euro-denominated bonds this year, the National Treasurer said.

“When we issued the last $2.5-billion dollar bonds, it was more cost-efficient (than the euro bonds),” National Treasurer Sharon P. Almanza told reporters on the sidelines of an event late on Tuesday.

“On a swap basis, euro is costlier, so it’s really the dollar (that was issued). During that time, we just decided that maybe… (the euro bond is) still one of the possible (choices) but not for this year,” she said in mixed English and Filipino.

The NG last issued euro bonds in April 2021, raising €2.1-billion (P122.4 billion) to support its budget as the country was struggling amid the coronavirus pandemic.

The government planned to borrow $5 billion from the international debt market this year. It has already raised $2 billion from the issuance of US dollar-denominated global bonds in May, and another $2.5 billion in August. This leaves $500 million yet to be raised.

When asked how it will raise the remaining $500 million, Ms. Almanza said: “It will depend, because we’re also monitoring the deficit.”

“We’ve made adjustments, if you would look at the BESF (Budget of Expenditures and Sources of Financing), because we will be able to also source some loans from official development assistance,” she added.

The NG expects to receive P306.6 billion in program loans and P68.73 billion in project loans this year.

Ms. Almanza said the government is still eyeing Samurai bonds but is still monitoring the market.

“We are also watchful of the BoJ’s (Bank of Japan) move if they will hike (interest rates,) although the yen is now appreciating so it’s better,” Ms. Almanza said in mixed English and Filipino.

Markets widely expect the BoJ to keep interest rates steady at its meeting this week, but predict a hike by yearend, Reuters reported.

Finance Secretary Ralph G. Recto previously said the government is looking to raise about $500 million from Japanese yen-denominated bonds within the year. The Philippines last issued Samurai bonds in April 2022, raising ¥70.1 billion (P28.55 billion).

“Considering the factors influencing bond issuance costs, the government will want to assess market conditions, interest rates, investor demand, and economic indicators to determine the most optimal timing and structure for raising the remaining $500 million,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

“With these factors in mind, the government can potentially minimize borrowing costs and achieve the financial objectives.”

Jonathan L. Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., said it would be more cost-efficient to have another dollar bond issuance this year.

“Opportunity for dollar weakness creates an opportunity later to redenominate the dollar debt to peso later as more Fed cuts materialize,” he said in Viber chat.

The US Federal Reserve was expected to begin its easing cycle on Wednesday. Markets are pricing around 250 basis points of easing until the end of next year, Reuters reported.

RETAIL TREASURY BONDS
Meanwhile, Ms. Almanza said the BTr has yet to decide if it will issue more retail Treasury bonds this year.

“So far, our auctions have been successful, and we have raised much from domestic, so it would depend on the deficit… We don’t have to really have to fill in the programmed borrowings for this year… so for better management of costs, debt service, we don’t have to borrow everything,” she said in mixed English and Filipino.

The government’s borrowing plan for this year is set at P2.57 trillion, with P1.92 trillion from domestic sources and P646.08 billion from foreign sources, according to BESF data.

The NG’s outstanding debt rose to a fresh high of P15.69 trillion as of end-July from P15.48 trillion as of end-June.

Central bank has no plans to offer long-term bonds

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) has no plans of issuing long-term securities, its top official said.

“We have no plans for that. Now, it’s just a liquidity issue. Longer-term bonds are for financing of say, government operations, but what we are doing now is purely a liquidity effort,” BSP Governor Eli M. Remolona, Jr. said in a press chat on Wednesday.

The BSP absorbs excess cash from the financial system through its monetary instruments, which include its overnight reverse repurchase (ON RRP) facility, short-term liquidity management tools, and standing liquidity facilities.

Data from the central bank showed that around 50% of its market operations are done through short-term BSP bills.

As of end-September, the central bank siphoned off P1.77 trillion in excess money supply through its monetary operations. Of this, P804 billion was mopped up by BSP bills.

“Maturities are shorter in general than what the National Government (NG) does when it issues its own government securities. Since 2019, we’ve been able to use this facility, and it has helped us very much in terms of managing the liquidity of the whole system,” Mr. Remolona said.

BSP Assistant Governor Zeno R. Abenoja said the BSP bills were created in close coordination with the Bureau of the Treasury (BTr).

“When we crafted the BSP bills, the tenor was carefully calibrated so it will not overlap with the Treasury bills (T-bills). The T-bills run from three months onwards to a year, so the BSP has been operating below that horizon,” he said.

The BSP can technically issue any tenor but ensures its securities do not crowd out different instruments currently in the market, Mr. Abenoja added.

Short-term instruments also offer more stability and predictability.

“If you rely on shorter maturities, then we have to do more issuances every day and every one and two weeks. To provide some stability in the operation, sometimes there’s benefit to that. That’s one reason why we are focusing on these particular BSP bills,” he said.

These are also considered “high-quality liquid assets” and grants more flexibility for banks versus term deposit facilities (TDFs), which are not tradable, he added.

Mr. Abenoja said there are currently more than 80 participants using BSP facilities, composed of banks, nonbanks and trust entities.

‘REFINEMENTS’
The central bank is also continuing to look for ways to make its facilities more “market friendly” and broaden access to help improve liquidity absorption.

“We continue to refine it in response to changes in the operating environment, in response to the demand or the requirements of the banking system,” Mr. Abenoja said.

“It can have an important part moving forward in the push to develop the overall capital financial markets of the country,” he added.

Mr. Remolona said there is “a lot of liquidity” along the yield curve, which the BSP is currently working to manage.

“We want to improve liquidity for the whole yield curve, not just our part of the yield curve, but also the Treasury’s part of the yield curve. There’s many small issues with regard to that, but it’s one of our strategic objectives to have a yield curve that is liquid and reliable,” Mr. Remolona said.

“What we’re doing with our BSP bills is to manage liquidity for the system as a whole. Not necessarily to manage liquidity of a particular market,” he added.

So far, the BSP has employed various refinements to its securities facilities to improve liquidity management, such as the introduction of multiple tenors; additional guidance from month-ahead indicative offer volumes; and relaxation of anti-cornering rule.

In terms of marketability, the central bank also allowed the minimal share of nonresident funds in the BSP bills’ secondary market and expanded access to trust entities through unit investment trust funds (UITFs) in the secondary and primary market.

The BSP is looking at broadening the participants of its facilities.

“We had already initial steps, the UITFs of trust funds are already included in our eligible counterparties. We may consider, see which part of the industry could also join in this particular facility,” Mr. Abenoja said.

“Nonresident funds have been there. Maybe it could be something that could be also considered in the future. So that’s one part, broadening the participants,” he added.

Mr. Abenoja said that they are consulting banks to consider other refinements or improvements to any instruments. — Luisa Maria Jacinta C. Jocson

Federal Reserve cut to serve as starting gun for central banks across Asia

BLOOMBERG

AFTER more than two years of currency pain, Asia’s central banks are in for some relief as the US Federal Reserve is set to cut interest rates by a quarter-point on Wednesday. The path for the region’s own monetary policy, though, will be bumpy from here.

Lower rates in the US frees up space for officials in Jakarta to Seoul and Mumbai to move lower too. The prospect for the Fed kicking off a regional cutting cycle has attracted investors, who’ve poured money into emerging Asian debt and equities, helping strengthen currencies in the region.

The question now for Asia’s central bankers is how much they need to cut in the coming months, or whether they even need to cut at all. Places such as India and the Philippines face inflationary risks, while South Korea may prioritize financial stability.

“It would be an error to think the region’s policy makers are chomping at the bit for their chance to commence monetary policy easing,” said Brian Tan, Barclays Plc senior regional economist. “It’s not obvious that the economy is just crying out for policy easing and that policy makers need to shift as soon as possible.”

The wake-up call may arrive as soon as this week, with central banks in China, Taiwan and Japan all expected to hold rates, though there’s some chance of a cut in Indonesia. They’re followed by the Reserve Bank of Australia on Sept. 24, which is also expected to keep rates steady.

Then, in a 10-day spree mid-October, a swath of peers from India to the Philippines issue their own diverging decisions. Markets and economists are at odds on what that will look like.

Swap markets are pricing in a benchmark reduction of 50 basis points (bps) for the Reserve Bank of New Zealand on Oct. 9, with some chance of easing also expected for the Reserve Bank of India on the same day.

While New Zealand is likely to cut through the rest of 2024 as the economy teeters on the edge of a third recession in two years, analysts see a different picture playing out for the rest of the region.

Inflationary pressures in India and the Philippines are likely to keep policy makers there more cautious, with analysts forecasting only one 25-bp cut in the fourth quarter, surveys show. Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. signaled a quarter-point cut in October or December.

Economists also see only one cut in the final three months of the year from the central bank in South Korea, where officials are keeping tabs on financial imbalances associated with home prices and household loans.

Economists expect the central bank to cut its key rate as soon as it sees signs that the property market is cooling, particularly in Seoul. In Taiwan, as well, real estate market trouble is likely to make officials wary of cutting rates.

The Bank of Thailand will perhaps be the longest holdout, with expectations that the conservative institution will resist government calls to cut until next year at the earliest.

“Now, central banks are able to focus more on the domestic idiosyncrasies when they are contemplating their monetary policy action,” said Khoon Gho, head of Asia research at Australia and New Zealand Banking Group. “For the last two years or so, when the Fed was hiking aggressively, central banks here were really responding to that pressure on their currencies.”

Two factors may change the picture: A US recession that would strengthen the greenback in a flight to safety or a November presidential election outcome that heralds protectionist policies, hurting trade-reliant countries in the region.

The former isn’t the base case for economists, and the latter isn’t likely to halt the flow of funds into Asia assets just yet.

If Fed Chair Jerome H. Powell and his colleagues reduce interest rates and signal more cuts are in the offing, that “will keep the party going and we’ll see more money coming to Asia,” said Taimur Baig, chief economist at DBS Group Holdings. “Investors have voted with their feet” for a shallow easing cycle in Asia, he said. — Bloomberg

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