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ADB sets new priorities for Asia and the Pacific as meeting closes

THE ASIAN Development Bank (ADB) reaffirmed its commitment to eradicate poverty for a “prosperous, inclusive, resilient, and sustainable Asia and the Pacific” as its 51st Annual Meeting concluded on Saturday, pledging to stay relevant amid the rapid advances in digital technologies.
ADB President Takehiko Nakao and the host country led the concluding remarks for the meeting held from May 3 to May 6 under the theme: “Linking People and Economies for Inclusive Development.”
In his speech on Saturday, Mr. Nakao bared the 10 priorities that will be the focus of the multilateral lender’s Strategy 2030, which it also discussed during the three-day meeting:
1. Tackle remaining poverty and increasing inequalities in Asia and the Pacific through expanded social services
2. Accelerate progress in gender equality
3. Scale up support to combat climate change, build climate and disaster resilience, and enhance environmental sustainability
4. Build livable cities that are competitive, green, resilient, and inclusive
5. Promote rural development and food security
6. Strengthen public sector governance
7. Foster regional cooperation and integration
8. Mobilize private sector resources
9. Further strengthen ADB’s role as a provider and facilitator of knowledge
10. Pursue a stronger, better, and faster ADB.

“Strategy 2030 will renew our strong commitment to eradicate extreme poverty in the region and expand our vision to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. These aspirations will be aligned with the international agenda, such as the Sustainable Development Goals and the Paris Agreement on climate change,” he said.
Mr. Nakao said there is a need to “further efforts to accelerate disbursements and increase co-financing,” while “promoting innovative approaches and advanced technologies.”
He noted that the ADB approved a new procurement policy last year that supports the adoption of high-level technologies, leading to reduced procurement time.
These technologies include the use of satellite data and remote sensing that it uses on irrigation projects in Indonesia and Pakistan.
Mr. Nakao added that the regional lender is in a “good position” to reach its target of doubling annual climate finance to $6 billion by 2020 from $4.5% billion last year.
“One significant factor that will help drive the region’s future growth is advancements in technology,” he said, adding that it will have a “huge potential to raise productivity and improve our daily lives.”
Finance Secretary and outgoing chairman of the ADB Board of Governors Carlos G. Dominguez III meanwhile said in his speech that the new long-term strategy will help the ADB improve its capacity to adapt to digital technology such as robotics, artificial intelligence, and big data.
“Rapid, and especially disruptive, technological progress carries both risks and rewards. The ADB is a vital institution for the region ensuring the risks are mitigated and the rewards evenly distributed,” Mr. Dominguez said.
“ADB Strategy 2030 is a good beginning. It is not a fully developed program for fully adjusting to the new economic balance of power as well as coping with the enormous forces unleashed by technologies. That program will evolve into place — but only if we are prepared to reinvent and rethink,” he said.
Moreover, Mr. Nakao said Asia and the Pacific is “well positioned to sustain its growth momentum,” supported by robust private consumption and investment and anchored by sound macroeconomic policies.
“Active trade and foreign direct investment are the foundation of Asia’s economic success and are essential for continuing solid growth. Despite current disputes among some countries, we firmly believe that countries should make utmost efforts to maintain and foster an open multilateral trade system,” he said.
On Friday, the Association of Southeast Asian Nations (ASEAN), China, Japan and Korea sought to enhance their watch against financial shocks amid rising inward-looking policies, agreeing to strengthen cooperation in multilateral trade and enhance resilience.
The ASEAN+3 finance ministers and central bank governors issued a joint statement on late Friday after their 21st meeting on the sidelines of the 51st ADB Annual Meeting noting that they remain vigilant against downside risks that may threaten their contribution to the recovery in the global economy.
“We discussed the risks posed by rising trade protectionism and faster-than-expected tightening in global financial conditions, and uncertainty of geopolitical tension. These risks, individually or collectively, threaten the recovery in the global economy, and could induce large capital outflow and financial volatility in our region,” the joint statement read, adding that it welcomed the Panmunjeom Declaration peace agreement between North and South Korea.
The ASEAN+3 member-states said they recognize the “importance of resisting all forms of protectionism,” adding they will work to deepen intra-regional and global trade and investment linkages.
The regional bloc said that it “will strengthen regional surveillance and remain vigilant against the risks of contagion and spillovers from excessive capital flow volatility.”
On Saturday, Mr. Nakao said the Philippines remains to be among the fastest growing economies in the region due to strong investment and consumption, as it expects the country to grow 6.8% this year, although below the government’s 7-8% target.
The ADB President lauded the Duterte administration’s infrastructure plan, and noted its financing activities in the country including the urban mass transport in Manila and Davao, the Malolos-Clark railway, roads and bridges in Mindanao, and clean water and sanitation in local communities.
ADB is also supporting the country’s school-to-work programs, financial inclusion and capital market reforms and the government’s cash transfers for the poor, he added.
Fiji will host next year’s meetings, a first for a Pacific developing member country, with the theme “Prosperity Through Unity.” — E.J.C. Tubayan

Factory output growth decelerates in March

FACTORY PRODUCTION continued to expand in March albeit at a decelerated pace, the Philippine Statistics Authority (PSA) reported on Friday.
Preliminary results of the PSA’s Monthly Integrated Survey of Selected Industries (MISSI) showed factory output — as measured by the volume of production index — grew 13.6% annually in March.
This was faster than the 12.3% recorded in the same month last year, but slower than February’s 23.7% pace.
Nevertheless, production continued to grow by double-digits so far this year. Factory output volume averaged 18.6% year-to-date, faster than the 12.4% recorded in 2017’s comparable three months.
Average capacity utilization, which is the extent by which industry resources are used in the production of goods, was estimated at 84.2%. Twelve of the 20 sectors registered capacity utilization rates of 80% and above.
The latest result was echoed in IHSMarkit’s seasonally adjusted Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI), which stood at 52.7 in April, slightly up from March’s 51.5. A PMI reading above 50 suggests improvement in business conditions, while a score below signals deterioration.
“The positive performance of manufacturing is expected to continue in the first semester, amid the sustained economic growth momentum, increased net foreign direct investments, higher OFW (overseas Filipino workers) cash remittances, and favorable merchandise trade,” said Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement on Friday.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LANDBANK), said the results showed the increase in factory output was “to meet growing domestic demand.”
“Despite rising prices, domestic demand remained firm amid strong government spending and a recent personal income tax cut, which increased households’ disposable income. The strength in the manufacturing sector is less likely a result of external demand, as export growth has been decelerating recently,” he said.
Sergio R. Ortiz-Luis, Jr., president of Philippine Exporters Confederation, Inc., concurred: “It’s obvious that the economy’s perking up. Manufacturing has been growing [and], as a matter of fact, it is even outpacing services, so we are expecting for the manufacturing to continue to grow,” he said.
For Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, the double-digit growth “is directly related to manufacturing growth that has been robustly increasing since 2017.”
“Industry growth is largely driven by the manufacturing sector since last year, and this momentum has seemingly carried over this first quarter.”
For Mr. Pernia, the “strong growth of the sector” is seen to provide an additional boost to manufacturing’s gross value added in the first quarter.
“The robust manufacturing production for the first quarter of 2018 is supported by the increased production in food manufacturing, petroleum products, electrical machinery, and non-metallic mineral products.”
PSA data showed eight major sectors contributing to the growth in the volume output. These were printing (107.6%); textiles (32.9%); food manufacturing (28.0%); miscellaneous manufactures (15.5%); petroleum products (15.3%); wood and wood products (15.0%); non-metallic mineral products (12.7%); and electrical machinery (11.9%).
Economists were optimistic on manufacturing’s growth prospects.
LANDBANK’s Mr. Dumalagan said manufacturing output is expected to grow at a healthy pace in April 2018, fuelled by the same factors that propelled production in the first quarter.
“The government’s ‘Build, Build, Build’ program is expected to keep domestic demand firm and prompt factories to further expand their production. While consumer spending is likely to remain strong amid higher disposable income, the persistent increase in inflation could somehow temper buying behavior in the future. This could result in slower output growth if not addressed,” the economist said.
UnionBank’s Mr. Asuncion concurred, saying that he expects manufacturing “to growfurther with growing investment, both public and private.” — Lourdes O. Pilar

Singapore-Kuala Lumpur is world's busiest international air route

Singapore — The trip between Singapore and the Malaysian capital Kuala Lumpur is the world’s busiest international air route, with more than 30,500 flights between the cities in the year to February, a new study showed.
There were on average 84 flights daily making the short hop which takes about an hour, according to the study by air travel intelligence firm OAG.
A large number of airlines serve the route, from full-service carriers such as Singapore Airlines and Malaysia Airlines to budget ones like AirAsia.
A high-speed railway line is being built to link the cities and is expected to be completed in 2026, cutting travel time overland to 90 minutes from around five hours.
Asia dominated the list of the world’s 20 busiest international air routes, with 14 operating to and from destinations in the region, Britain-based OAG said.
Two operate within Europe, two in North America, one between North America and Europe, while another is in the Middle East, it added.
The world’s second busiest air route is between Hong Kong and the Taiwanese capital Taipei, with 28,887 flights in the year to February, followed by the Jakarta to Singapore route with 27,304 flights. — AFP

Alibaba says annual net profit up 47% in 2017/2018

Beijing — Chinese e-commerce giant Friday announced a massive 47 percent leap in net profit for the fiscal year 2017/2018, helped by a rise in smartphone and tablet transactions on its shopping platform.
Profit climbed to 63.985 billion yuan ($10.2 billion), boosted by a 60 percent rise in revenue from its core business, the online retailer said.
The New York-listed firm added 98 million consumers over the year ended March 31 for a total of 552 million using its e-commerce marketplaces.
Overall revenue climbed 58 percent year-on-year to 250.27 billion yuan, with revenue from cloud computing up 101 percent and digital media and entertainment up 33 percent.
For the fourth quarter, the company saw revenue soar a better than expected 61 percent year-on-year to 62 billion yuan.
“Alibaba Group had an excellent quarter and fiscal year, driven by robust growth in our core commerce business and investments we have made over the past several years in longer-term growth initiatives,” group CEO Daniel Zhang said in a statement.
Chief financial officer Maggie Wu said they forecast similar results in the year ahead.
“Looking ahead to fiscal 2019, we expect overall revenue growth above 60 percent, reflecting our confidence in our core business as well as positive momentum in new businesses,” she said.
Alibaba, which has made billionaire founder Jack Ma one of China’s richest men and a global e-commerce icon, has been on a roll, regularly beating revenue estimates. — AFP

Critical US-China trade talks end in Beijing

Beijing — China and the US ended the second day of high-stakes trade talks Friday with “big differences”, Beijing said, leaving the world’s two largest economies on the brink of a trade war that could have knock-on effects on the global economy.
The talks were aimed at forestalling momentum towards the looming conflict, with both sides prepared to pull the trigger on tariffs that could affect trade in billions of dollars of goods.
“Both sides recognise there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by the official Xinhua state news agency.
The discussions promised a potential off-ramp for the trade conflict — US President Donald Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted US goods.
“The two sides exchanged views on expanding US exports to China, trade in services, bilateral investment, protection of intellectual property rights, resolution of tariffs and non-tariff measures,” Xinhua said.
It added that they had reached “a consensus in some areas”, without elaborating.
The countries agreed to establish a “working mechanism” to continue talks, it said.
The announcement followed comments by Treasury Secretary Steven Mnuchin earlier in the day that the two sides were having “very good conversations”.
However, American officials declined to give further details of the discussions.
– Detailed List –
China is confused about what the US actually wants, said Zhang Monan, a researcher at the influential think-tank China Center for International Economic Exchanges.
The American pressure on Beijing has heightened, she said, even as Beijing has taken several steps to liberalise its markets.
Those reforms include a timeline to lift foreign ownership restrictions for automakers, permitting foreign investors to take controlling stakes in some financial firms, and on Friday, allowing foreign companies to trade iron futures on domestic exchanges.
But a list of demands presented to Beijing before the negotiations got under way showed such piecemeal reforms fell far short of US expectations.
The document, divided into eight sections, was presented as a starting point for negotiations, according to Bloomberg News.
The asks included cutting China’s trade surplus with the US by at least $200 billion by the end of 2020, lowering all tariffs to match American levels, eliminating technology transfer practises, and cutting off support for some industries fostered by China’s industrial policies, Bloomberg reported.
– Industrial policy –
Liu He, vice premier in charge of the economy, led the discussions for China.
Known as President Xi Jinping’s right hand man on economic matters, Liu was noticeably absent from Xi’s speech Friday morning commemorating the birth of Karl Marx and the continued relevance of his theories to China.
The speech alluded to Beijing’s determination to keep true market capitalism at arm’s length — a key area of concern for the American delegation that has balked at China’s state-led industrial policy and fostering of domestic industry.
Friction is highest over China’s “Made in China 2025” programme, designed to spring China from a maker of sports shoes and denims into high-tech goods.
For Beijing, recent moves by Washington to ban US sales of telecom giant ZTE and the reported opening of a similar probe into goliath Huawei, have reinforced the wisdom of the policy.
A spokesperson for the Ministry of Commerce said China had taken up the ban with the US delegation.
“The Chinese side made solemn representations with the US in respect of the ZTE Corporation case” the commerce ministry statement said, adding that the Americans said they would relay the issue to Trump.
“The trade friction between the US and China is a longterm issue, this is not something that can be solved in the short term,” Zhang said.
– Trade data –
The talks may have received some tailwinds from the latest trade data out of Washington, showing the US global trade deficit narrowing in March.
The goods deficit with China fell 11.5 percent from February to $25.8 billion, but analysts cautioned seasonal factors like China’s New Year holidays were likely at play.
Bilateral trade in coming months could be hurt by US and Chinese buyers planning to avoid tariffs, with news this week that China may already be downsizing its soybean imports from the US.
“Whatever they’re buying is non-US,” said Soren Schroder, CEO of agricultural giant Bunge Limited.
“They’re buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the US,” Schroder said in the interview with Bloomberg News on Wednesday.
Soybeans were China’s largest import from the US last year, worth $14 billion. — AFP

China will continue to 'hold high the great banner of Marxism', Xi says

Beijing — Chinese president Xi Jinping pledged Friday his country will keep following Marxism, as the world’s largest communist party prepares to mark the 200th birthday of Karl Marx.
China will continue to “hold high the great banner of Marxism” and the party will forever remain “guardians and practitioners” of the philosophy, Xi said during an official tribute at Beijing’s Great Hall of the People.
Marxism still holds sway in China, despite decades of market-driven growth that has made it the second largest economy in the world.
Students start learning the theories of Marx and Lenin in middle school, and civil servants -– even journalists in state-run media –- have to take mandatory courses in Marxist theory to secure promotions.
The legacy of the German revolutionary philosopher remains divisive in many parts of the world — including in his home country.
But in China, Marx’s 200th birth anniversary is seen as an opportunity to “restore the theoretical soul” of the Chinese people, according to party-mouthpiece People’s Daily.
The flurry of activity in the lead up to the big day, which falls on Saturday, includes a documentary series by China’s state broadcaster titled “Marx Is Right”.
Beijing also gifted a larger-than-life bronze statue of the philosopher to his birthplace of Trier in western Germany, where his work remains controversial more than a quarter century after the fall of the Berlin Wall.
On Friday, Xi urged party members to cultivate the habit of reading Marxist classics and regard it as a “way of life” and “spiritual pursuit”.
– ‘Chinese characteristics’ –
China is the largest self-identified socialist country since the fall of the Soviet Union, and state-owned companies continue to monopolise key economic sectors.
But it is also home to over 370 billionaires, only second to the US, and the wealth gap between urban elite and rural poor has widened in recent years.
The trappings of capitalism -– including luxury brands that flooded the country since its reform and opening up in the late 1970s — prompted some analysts in the past to suggest the party was merely paying lip service to Marxism and that practical economic concerns had trumped ideology.
But Xi dismissed sceptics on Friday, saying “the Chinese Communist Party is completely correct (in its choice) to write Marxism on its own banner”.
Xi has made Marx’s seminal work, The Communist Manifesto, mandatory reading for cadres after taking over the reins of the party in 2012.
Banners promoting “socialism with Chinese characteristics” — a Chinese interpretation of Marxist-Leninist theories with a dash of nationalism — have also sprouted in cities and villages in recent years.
Chinese scholars credit China’s ability to lift more than 500 million people out of poverty to this philosophy instead of the opening up of markets.
“The development of the Chinese form or interpretation of Marxism… has enabled China to find a unique way of modernising,” said Zhang Yuwu, a professor of Chinese language and culture at Peking University.
– Window-dressing for repression –
But critics point to how the revolutionary zeal for collectivisation under the tumultuous reign of Mao Zedong -– the founder of Communist China — led to millions of deaths and an attempt to wipe out temples and mosques that were thousands of years old.
“Marxism has indeed played a major role in China’s history since 1949 — not as a philosophy of liberation, but rather as pleasant-sounding theoretical window-dressing for a repressive state,” said Kevin Carrico, a lecturer of Chinese Studies at Macquarie University in Australia.
“It is also (a way of) stating clearly that China does things differently”, compared with democracies, he added.
Marx celebrations in China also dovetail with Xi’s attempts to expand the party’s influence as he pushes through sweeping changes in the political system and the military, and consolidate his own power after the removal of presidential term limits.
“I tend to think socialism with Chinese characteristics actually has little to do with either socialism or Chinese characteristics,” Carrico said.
“These are just pleasant-sounding labels that cover over the reality of a state dedicated primarily to its own self-perpetuation.” — AFP

Japanese kimono makers seek to revive declining industry

Tokyo — At a century-old workshop in a quiet Tokyo neighbourhood, craftsman Yuichi Hirose brushes dye across meticulously hand-cut stencils laid on fabric, using a traditional technique to produce contemporary kimono patterns.
Demand for the elaborate, elegant centrepiece of the Japanese wardrobe is in decline, but a handful of artisans and entrepreneurs like Hirose, 39, are trying to revive it.
“The kimono has become something that is very far removed from our daily lives,” said Hirose, who joined his family business after university.
He specialises in “Edo Komon” — a kimono pattern hand-dyed with a Japanese washi paper stencil, which dates back to the Edo period between the 17th and late 19th centuries.
It’s a deeply traditional craft that requires great skill to master, he said, “but we need to create something that is accepted in this modern time”.
Hirose’s innovations include developing new designs to adorn the kimono, including tiny sharks or even skull motifs.
Once a standard of the Japanese wardrobe, the kimono is now often a garment reserved for special occasions, such as weddings and coming-of-age ceremonies, and is mostly worn by women.
They can be hugely expensive and women often hire experts to dress them because the outfit requires seemingly endless nipping, tucking and strapping.
The modern kimono industry peaked in 1975 with a market size of 1.8 trillion yen ($17 billion), according to the Ministry of Economy, Trade and Industry.
But by 2008 it had shrunk to 406.5 billion yen and further to just 278.5 billion yen in 2016, according to a survey conducted by Yano Research Institute.
“There are many hurdles” to buying a kimono, said Takatoshi Yajima, vice chairman of the Japan kimono promotion association, and a kimono manufacturer.
“It’s expensive. It’s difficult to wear. It’s too delicate to wash at home,” he said.
– Affordable and wearable –
“We need to make kimonos that are affordable and wearable. If we do that, I believe more young consumers will buy kimonos.”
He has nearly doubled his number of customers in the past 15 years by selling more kimonos under the 100,000-yen ($930) price tag, well below the many thousands of dollars a high-end piece can cost.
“The industry will grow if we can create a market in which as many people as possible will buy a kimono,” he said.
A complete kimono outfit starts with an undergarment known as a nagajuban, over which the kimono is layered, held in place with a thick obi belt and string.
The outfit is completed with tabi, ankle-high white socks divided at the big toe to allow feet to slip into thick-soled sandals called zori.
But beyond the basic framework, designer Jotaro Saito says there should be room for experimentation.
“What’s fabulous, what’s unfashionable and what’s cool change every year. It’s wrong that kimonos don’t change even if everything else is changing,” said the Kyoto-based designer, whose work has been worn by American singer Lady Gaga.
“Kimonos are not something old. Wearing a kimono is the coolest and the most fun thing.”
At Tokyo fashion week in March, Saito, who calls himself “a risk taker,” showcased kimonos for men and women, mixing traditional and unconventional motifs and colours.
“I want to present kimonos as a wardrobe in which people can truly feel joy,” he said.
– ‘An honour to wear’ –
And while demand for kimonos is falling among Japanese, services renting the garments to foreign visitors are booming.
Interest is expected to expand, according to the Yano Research Institute, with more tourists visiting Japan and looking for cultural experiences.
Kahori Ochi serves around 500 foreign tourists a year at her kimono rental store in the trendy Harajuku area of Tokyo.
They pay around 9,000 yen ($80) to be dressed in a kimono worth about 300,000 ($2,750) yen.
“Kimono is a piece of Japanese culture. I really wanted to experience that,” said Ruby Francisco, a Dutch tourist who rented a pale green kimono at Ochi’s shop.
“It’s special. It’s like an honour to wear,” the 33-year-old said, adding that she would post photos of herself in the kimono on social media to show her friends.
Ochi’s mother ran a shop selling high-end kimonos, but she didn’t expect to follow in her footsteps.
“My mother told me the kimono business is risky and volatile,” she said, adding that her mother’s shop struggled after the bubble economy ended in the early 1990s.
“I used to think kimonos were not cool and practical.”
But Ochi changed her mind after spending a summer in Norway, where people complimented her kimono.
She decided to join her mother’s shop, but being the owner’s daughter came with no privileges.
“She said ‘no salary for you,'” Ochi laughed, recalling her mother’s surprise at her sudden interest in the industry.
But now, she says, business is booming and she expects the Tokyo 2020 Olympic Games will drive new demand as tourists flock to Japan.
“But my goal is not to expand the business,” she added.
“I hope to meet more people who want to understand Japanese culture.” — AFP

Stock markets diverge before US jobs data

LONDON — Stock markets mostly dropped Friday as attention turns to the release of key US jobs data later in the day and high-level China-US trade talks in Beijing.
Company earnings updates kept investors busy awaiting the monthly US employment data, with shares in Societe Generale tumbling 5.7 percent to 42.35 euros in Paris midday deals after the French bank posted weak profits.
On the upside, shares in British-Airways parent IAG jumped 4.9 percent to 671.8 pence in London after it reported a 75-percent jump in operating profits for the first quarter.
In the United States, while the corporate earnings season has been considered a success, analysts are worried that the healthy results have not fired equities as much as expected, with warnings of a mild correction down the line.
Friday’s US non-farm payrolls figures for April will provide the latest snapshot of the world’s top economy. Analysts will be watching wage growth figures closely for signs of rising inflation.
There are growing concerns that with the US economy continuing to perform well, the Federal Reserve could be forced to lift interest rates three more times this year, having done so once already.
This, along with the fading likelihood of any near-term tightening by the European Central Bank and the Bank of England, has boosted the dollar over the past week to multi-month highs against the euro and pound, as well as most other currencies.
“The dollar should continue to make gains against currencies across the board if fundamentals and central bank policy divergence matters,” said Greg McKenna, chief market strategist at AxiTrader.
“I believe it does and I can see a clear slowdown in growth globally at a time when the US seems to be the standout. And with inflation accelerating in the US but lagging elsewhere we have a clear policy divergence between the Fed and many other central banks.
“For me, that means that whatever happens with non-farms tonight… we are at the start of a big turn in the dollar,” McKenna added.
– ‘Very good’ trade talks –
In Beijing, the biggest hitters in Donald Trump’s administration met their Chinese counterparts for a second day of high-stakes trade talks on Friday.
The Chinese government said the talks ended with “big differences”, leaving the world’s two largest economies on the brink of a trade war that could have knock-on effects on the global economy.
Treasury Secretary Steven Mnuchin and top White House economic adviser Peter Navarro, a prominent China critic, led the US delegation.
Xi Jinping’s top economic adviser Vice Premier Liu He is leading the talks for China.
“Both sides recognise there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by the official Xinhua state news agency.
The talks were aimed at forestalling momentum towards the looming conflict, with both sides prepared to pull the trigger on tariffs that could affect trade in billions of dollars of goods.
Oil markets are also awaiting Trump’s decision on the Iran nuclear deal, with speculation rife that he will tear it up, which many fear could spark geopolitical turmoil and put fresh upside pressure on crude prices.
Both main contracts are sitting around levels not seen since late 2014, though data showing rising US production and stockpiles is tempering gains. — AFP

No Nobel Literature Prize after #MeToo turmoil

Stockholm, Sweden – – For the first time in almost 70 years there will be no Nobel Literature Prize this year, after the Swedish Academy that selects the laureate failed to contain a deep crisis stemming from the anti-sexual harassment #MeToo campaign.
“We find it necessary to commit time to recovering public confidence in the Academy before the next laureate can be announced,” the Academy’s interim permanent secretary Anders Olsson said in a statement Friday, adding that two prizes would be announced in 2019.
The body has been in turmoil since November when Swedish daily Dagens Nyheter — in the wake of the global #MeToo campaign — published the testimonies of 18 women claiming to have been raped, sexually assaulted or harassed by an influential culture figure with long-standing ties to the Academy.
Jean-Claude Arnault, the French husband of Academy member and poet Katarina Frostenson, has denied the allegations, but disagreements within the Academy on how to deal with the issue sowed deep discord among its 18 members.
The Academy found itself split between the first woman permanent secretary Sara Danius and her supporters bidding for reform and another camp defending Frostenson and the Academy’s old guard, prompting six members to quit in recent weeks.
Danius resigned on April 13 after failing to receive enough support within the Academy. Frostenson was also among the six who resigned.
“The active members of the Swedish Academy are of course fully aware that the present crisis of confidence places high demands on a long-term and robust work for change,” Olsson said.
Seen as bearers of high culture, the Academy, founded in 1786, is traditionally known for its integrity and discretion, with its meetings and decisions shrouded in secrecy.
But the row has turned into a titillating public spectacle, with Academy members dealing ugly blows to each other in the media: Horace Engdahl called Danius “the worst” permanent secretary in the Academy’s history.
But there was broad public support in Sweden for Danius, with many donning a pussy-bow blouse, her signature garment, in protest the following day.
“The strong woman who tried to clean up the Swedish Academy was forced to leave. I’m speechless,” Annie Loof, leader of the Swedish Centre party tweeted at the time.
– ‘Wise decision’ –
The last time the institution delayed a prize announcement was in 1949, when William Faulkner received the prize a year later, when Bertrand Russell was also honoured.
“I think it’s wise, this is the best decision they could make. They’ll have a chance to restore (the Academy) this year and fill the empty seats, and come back with a strong Academy that can award the prize,” Dagens Nyheter’s literature critic Maria Schottenius told AFP.
“This is a disaster for the Swedish Academy’s reputation… (that) they didn’t manage to handle this better,” Jens Liljestrand of the Expressen newspaper told TT news agency.
Technically, Academy members have been appointed for life and have not been able to resign, though they could leave their chairs “empty” by not participating in meetings and decisions.
However, the Academy is currently down to 10 active members while its statutes stipulate that 12 are needed to elect new members.
In order to ensure the venerable body’s survival, the Academy’s patron, Sweden’s King Carl XVI Gustaf, announced Wednesday he had changed the statutes, making it possible for members to resign and be replaced.
– Conflicts of interest –
The Academy has cut all ties with Arnault’s cultural centre Forum in Stockholm, which it had subsidised for years and which was a key meeting point for the country’s cultural elite.
The centre, owned by Arnault and Frostenson, showcased exhibitions, readings and performances by both prominent cultural figures, including Nobel literature laureates, as well as hopefuls. It is now closed.
A report commissioned by the Academy revealed conflicts of interest, as well as the fact that Academy members had leaked Nobel winners’ names.
Prosecutors announced in mid-March they had dropped parts of their investigation against Arnault — concerning allegations of rape and assault between 2013 and 2015 — due to lack of evidence. The rest of the investigation is still ongoing.
Meanwhile, Sweden’s Economic Crimes Bureau last week said it was investigating a case linked to the Academy, likely linked to the subsidies paid to Arnault.
The scandal comes on the heels of heavy criticism the Academy received in some circles for awarding the 2016 prize to US singer-songwriter Bob Dylan.
In 2017, it honoured British author Kazuo Ishiguro. — AFP

Consumer prices pick up further in April to breach full-year target

By Christine Joyce S. Castañeda, Senior Researcher
THE RISE in prices of widely-used goods picked up to its fastest pace in more than five years in April, fuelled by sharp increases in food and “sin” products, the government reported on Friday.
Preliminary data from the Philippine Statistics Authority (PSA) showed the consumer price index (CPI) in April rose 4.5%, faster compared to the 4.3% in March and from the 3.2% logged in April 2017. Headline inflation clocked 4.1% year-to-date, breaching the government’s 2-4% target for 2018.
Last month’s print was the fastest in at least five years as computed under the 2012-based CPI, according to available PSA data.
The result matched the median estimate in a BusinessWorld poll of 11 economists conducted last week and was within the 3.9-4.7% forecast range for the month given by the BangkoSentral ng Pilipinas’ (BSP) Department of Economic Research.
“The April actual data is on the high side of our forecast for the month. At the same time, we note the deceleration of the seasonally adjusted month-on-month inflation,” BSP Gov. Nestor A. Espenilla, Jr. said in a statement sent to the media on Friday.
“These are relevant factors to consider at the policy review next week in determining the necessity and shape of a measured response to halt potential build up in inflationary expectations. Such expectations seem to be feeding off essentially cost-push price pressures that may be transitory in nature,” the central bank governor added.
On a month-on-month basis, consumer prices grew 0.519% in April, slightly lower than the 0.522% growth in March.
For Socioeconomic Planning Secretary Ernesto M. Pernia, “[t]he current surge in inflation is partly an initial reaction to the implementation of TRAIN (Tax Reform for Acceleration and Inclusion law) and is expected to be short-lived and should taper off over the coming months,” he said in a statement by the National Economic and Development Authority (NEDA), of which he heads as director-general.
The “more important sources” of the price upticks, however, were the combination of the increase in world oil prices and the depreciation of the peso, the NEDA statement further read.
Economists shared Mr. Pernia’s assessment.
Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, noted the increase in the prices of various commodities which include, among others, “sin” products, transport services, and utilities.
“[I]t is also very important to point out that the food index at the national level has eased, month-on-month. This might also be the reason why inflation upward pressure has slowed, month-on-month,” he added.
According to PSA data, a double-digit increase was recorded in the alcoholic beverages and tobacco subindex at 20% year on year, picking up from March’s 18.6% and 7.4% in April 2017. This was the subindex’s fastest since December 2013’s 30%.
Other commodities that contributed to the price pickup last month were transport (4.9%); restaurant and miscellaneous goods and services (3.4%); housing, water, electricity, gas and other fuels (3.0%); furnishings, household equipment and routine maintenance of the house (2.8%); health (2.8%); clothing and footwear (2.2%); and recreation and culture (1.5%).
The growth in the prices of food and non-alcoholic beverages was steady from March albeit remaining elevated at a 5.9% rate. This was, however, still higher than the 3.3% recorded in April 2017.
Angelo B. Taningco, economist at Security Bank Corp., noted April inflation being “partly driven” by food price inflation “as showcased by sharper price increase in rice and still elevated price upswings in meat, fish, fruits, and vegetables.”
“We think food supply disruptions may have induced food price inflation during the month,” the economist said.
The food alone index, eased to 5.5% from the 5.7% in the previous month, but faster than the 3.6% in the same period in 2017.
Among prices of food items, price of rice picked up by 4.3% in April from March’s 3.6% while that of meat (5% from 6.1%), fish (12.3% from 12.9%), fruits (6.7% from 7.1%) saw decelerations from the month prior. Prices of vegetables, meanwhile, were up 6.8% in April from 6% in March.
INFLATION TEMPORARY
Economists, as well as the BSP, were in agreement that the surge in consumer prices will be temporary.
“While average inflation has already exceeded the government’s target as of April 2018, the surge is temporary and seen to normalize towards the end of the year,” NEDA said in its statement.
For Michael L. Ricafort, economist at the Rizal Commercial Banking Corp.: “Inflation could reach the peak around (the third quarter of the year) and could start to normalize lower upon crossing 2019, exactly a year after the implementation of the TRAIN.”
ING Bank Manila branch senior economist Jose Mario I. Cuyegkeng said inflation could peak at around 4.8-4.9% this month or in June.
“Like the BSP, we expect inflation to return to within the target range in 2019, but if expectations are not contained, this could lead to firmer-than-expected inflation. We expect BSP to hike policy rates by 25 (basis points) at the May 10 meeting,” Mr. Cuyegkeng said.
“This would also support PHP (Philippine peso) and help moderate inflation pressures. We expect another rate hike in [the fourth quarter] while BSP keeps a hawkish tone in between rate hikes,” he added.
For, ANZ Research analysts ShashankMendiratta and Sanjay Mathur said the inflation trajectory, accompanied by strong imports and credit growth, “warrants a rate hike.”
“Our base case is that the BSP will maintain its policy rate at 3.00% next week. However, over the past few days, the central bank has suggested that it is prepared to take appropriate measures to protect price and financial stability, thereby raising the odds for a rate hike,” they said.
Meanwhile, Security Bank’s Mr. Taningco expects inflation to pick up further in the months to come and may breach the 5% mark amid base effects.
For his part, Cezar P. Consing, president and chief executive officer at the Bank of the Philippine Islands (BPI), noted that inflation could “come off” if the government would liberalize rice imports, and if oil prices would stabilize.
“But equally important, I think the central bank has shown to be more hawkish… If the central bank acts on policy rate, that would help too…,” he said at the sidelines following a bell-ringing ceremony at the Philippine Stock Exchange on Friday.
“Remember when the central bank said the inflation would peak and then come off? I think they might well be right,” he said. — with inputs from Melissa Luz T. Lopez and Karl Angelo N. Vidal

Gov’t accepts 250,000MT rice offers from Vietnam, Thailand

THE PHILIPPINES’ National Food Authority (NFA) on Friday accepted offers from both Vietnam and Thailand for 250,000 metric tons (MT) of rice supply, as it rushes to rebuild depleted buffer stocks ahead of the lean local harvest season.
The NFA, the state agency tasked with ensuring stable rice supply and prices in the domestic market, increased its budget by about 10% for the rice purchases, after initial offers last week from Vietnam and Thailand exceeded its reference prices.
It reopened the tender on Friday for the government-to-government procurement. Vietnam will supply 130,000 MT and Thailand will deliver the balance of 120,000 MT.
The NFA allocated $531 per ton for its purchase of 50,000 MT of 15% broken rice, a deal won by Vietnam with an offer of $526.50 a ton.
Vietnam also won a separate deal involving 80,000 MT of 25% broken rice at $517.50 a ton, below the NFA’s budget of $520.50 a ton.
Thailand won a 120,000-MT supply deal involving 25% broken rice with a similar offer of $517.50 a ton.
The offers were still subject to final approval by the NFA council, said Judy Carol Dansal, deputy NFA administrator and head of the panel that held the tender.
The Philippines, a frequent rice importer, plans to buy another 250,000 MT in an open tender later this month.
Delivery of its rice purchases begins next month, ahead of the so-called lean months of July to September when there is minimal or zero harvest locally.
President Rodrigo R. Duterte in April directed the NFA to build up its rice buffer stock to the equivalent of 60 days of national consumption, or as much as 1.92 million MT, from less than 2 days of consumption in March.
The fresh rice purchases come as the dwindling supply of cheap NFA rice led to a spike in domestic prices of the staple grain, feeding into inflation which accelerated at its fastest pace in at least five years in April. — Reuters

PHL to stay out of any settlement on bank heist case

THE COUNTRY’S Finance chief said the Philippine government will not be involved in the out-of-court settlement proposed by Bangladesh for the $81-million bank heist in 2016, but is waiting for inputs to support the ongoing case here.
“The Finance minister and the Ambassador of Bangladesh mentioned that and my opinion is that that is between them and the private sector. It’s nothing to do with us,” Finance Secretary Carlos G. Dominguez III told reporters on Friday on the sidelines of a seminar hosted by the Philippines during the 51st Asian Development Bank meeting.
Mr. Dominguez was reacting to a Reuters report quoting a Bangladesh Bank official saying it is open to a settlement on the $81-million bank heist case with Rizal Commercial Banking Corp. (RCBC).
Mr. Dominguez said he met with the Bangladesh delegation on Thursday, wherein they were told that the government has taken action against the cyber theft.
“We’ve penalized the banks that have not followed our procedure, we have filed legal cases, the AMLC (Anti-Money Laundering Council) has filed cases against the suspects and if they want to make a legal settlement, then we are not involved in that. We are only implementing our laws here,” he said.
The Finance chief added that the AMLC is waiting for a report from Bangladesh that would support the ongoing case filed in court.
“We also mentioned to the Bangladesh that the AMLC needs evidence that a crime was committed. The crime was not committed here. The crime of hacking was not committed here. It was committed somewhere else, maybe Bangladesh, maybe in New York,” he said. “So the local courts need the evidence. So we have been asking Bangladesh for that evidence since the last quarter of 2016 and we have not gotten that evidence so according to the AMLC. They have not been able to really pursue the case vigorously.”
Unidentified hackers channeled funds stolen from Dhaka’s accounts with the Federal Reserve Bank of New York to RCBC. So far, Bangladesh Bank has been able to retrieve only about $15 million from junket operator Kim Wong.
RCBC was fined P1 billion by the Bangko Sentral ng Pilipinas over its failure to stop the withdrawal of the money from four accounts in its Jupiter, Makati branch.
“So we are waiting for the official report from the Bangladesh side and the ambassador promised that he would provide it,” Mr. Dominguez said. — E.J.C. Tubayan

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