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Peso extends climb amid growing dovish Fed bets

BW FILE PHOTO

THE PESO climbed to a new four-month high against the dollar on Wednesday amid growing expectations of a September rate cut by the US Federal Reserve.

The local unit closed at P56.50 per dollar on Wednesday, strengthening by five centavos from its P56.55 finish on Tuesday, Bankers Association of the Philippines data showed.

This was the peso’s strongest finish in more than four months or since its P56.491 per dollar close on April 8.

The peso opened Wednesday’s session sharply stronger at P56.40 against the dollar. Its weakest showing was at P56.54, while its intraday best was at P56.345 versus the greenback.

Dollars exchanged inched up to $1.59 billion on Wednesday from $1.55 billion on Tuesday.

“The dollar-peso opened [stronger] amid heightened dovish Fed bets, but buying interest ensued later in the session,” a trader said by phone.

The peso was supported by a broadly weaker dollar amid expectations that US labor data to be released overnight would bolster wagers on a September cut by the Fed, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The dollar slipped to its lowest this year versus the euro on Wednesday as traders braced for potentially crucial revisions to US payrolls data later in the day, ahead of a speech by Federal Reserve Chair Jerome H. Powell at the end of the week, Reuters reported.

The US currency also dipped below the closely watched 145 yen level and hovered close to the more-than-one-year low to sterling reached overnight.

Pressure notably came from US bond yields, which hit their lowest since Aug. 5, when yields crashed to a more-than-one-year trough after surprisingly soft monthly jobs figures sparked recession fear.

A weak monthly payrolls report at the start of this month was a catalyst for a spike in volatility across asset classes, leaving market participants bracing for another potential shock with revised data due later Wednesday.

The Aug. 2 payrolls report sent traders racing to price in prospects of the Fed needing to slash interest rates by a half percentage point at its mid-September policy meeting, pushing the implied probability of such a move to about 71%, according to CME Group’s FedWatch Tool.

However, a run of better macroeconomic data has since seen the odds flip, with bets now 72% for a quarter-point cut and 28% for the bigger reduction.

Mr. Powell’s keynote address on Friday at the Kansas City Fed’s Jackson Hole economic symposium will be parsed carefully for any hints on the likely size of a rate cut next month, and whether borrowing costs are likely to be lowered at each subsequent Fed meeting.

The US dollar index — which measures the currency against the euro, sterling, yen and three other major rivals — edged to its lowest since Jan. 2 at 101.30 before recovering to 101.48 as of 0450 GMT. It had fallen 0.5% or more in each of the previous three sessions.

For Thursday, Mr. Ricafort sees the peso ranging from P56.40 to P56.70 per dollar.

Meanwhile, the trader said the peso is expected to continue consolidating as markets await the Fed’s September policy meeting. — AMCS with Reuters

China urges Philippines and US to stop ‘inflammatory remarks,’ fueling tension

PHOTO SHOWS the damage on the BRP Cape Engaño — a five-inch hole on its deck — after it collided with a Chinese Coast Guard vessel near Sabina Shoal. — PHILIPPINE COAST GUARD PHOTO

By John Victor D. Ordoñez, Reporter

CHINA has urged the Philippines and the United States to stop “inflammatory remarks” that would only raise tensions in the South China Sea, after trading blame with Manila for a collision involving their coast guard vessels on Aug. 19.

“If they genuinely care about peace and stability in the South China Sea, why do they persist in sowing discord and fueling tensions?” the Chinese Embassy in Manila said in a statement late Tuesday.

Manila and Washington should both show restraint in “activities that would complicate or escalate disputes and affect peace and stability,” it said, citing the Declaration on the Conduct of Parties in the South China Sea.

The US earlier condemned what it called “reckless maneuvers” by the Chinese Coast Guard when it collided with two Philippine vessels at Sabina Shoal.

BRP Cape Engaño was sailing 23 nautical miles southeast of Sabina Shoal at 3:24 a.m. on Monday when a Chinese Coast Guard vessel performed “aggressive maneuvers,” the Philippine military said.

The second incident occurred at 3:40 a.m. when BRP Bagacay was “rammed twice” on its port and starboard sides by another Chinese Coast Guard vessel, sustaining a minor structural damage.

Department of Foreign Affairs (DFA) spokesperson Ma. Teresita C. Daza and Kanishka Gangopadhyay, the US Embassy spokesperson in Manila, did not immediately reply to separate WhatsApp and Viber messages seeking comment.

In a statement on Aug. 19, principal deputy spokesperson of the US State Department Vedant Patel reaffirmed Washington’s Mutual Defense Treaty with Manila, which extends to armed attacks on the Philippine armed forces, coast guard vessels or aircraft in the waterway.

“The US and certain countries are not parties to the South China Sea issue and have no right to interfere in maritime matters between China and the Philippines,” the Chinese Embassy said.

Meanwhile, Senator Francis N. Tolentino on Wednesday urged the National Security Council (NSC) to demand compensation from China over the two damaged coast guard patrol vessels allegedly rammed by Chinese ships.

“The convening of the NSC will allow the country to formulate a more focused response,” he said in a statement. “We can get the opinion of the coast guard, Philippine Navy and DFA.”

“This [incident involves] one of the highest forms of aggravated maritime intentional allision and collision,” he added.

The Philippines should file for damages with the United Nations and hold the owner of the ship accountable for the ramming incident, the senator said, citing the United Nations Convention on the Law of the Sea.

He said he would bring up the incident with the Office of the Solicitor General and Department of Justice (DoJ).

Manila’s National Maritime Council on Tuesday urged Beijing to stop its aggressive actions and to follow international law. China has challenged Manila’s account and said the Philippine Coast Guard had acted in an “unprofessional and dangerous” manner.

Philippine lawmakers have passed a bill that seeks to boost the Philippines’ claim in the South China Sea by marking the boundaries of its maritime domain.

It seeks to outline the country’s territorial and sovereign boundaries as it tries to enforce a 2016 Permanent Court of Arbitration ruling favoring its claim over contested waters in the South China Sea.

China claims almost the entire South China Sea, including parts claimed by the Philippines, Brunei, Malaysia, Taiwan and Vietnam.

Portions of the waterway, where $3 trillion worth of trade passes yearly, are believed to be rich in oil and natural gas deposits, as well as fish stocks.

A United Nations-backed tribunal in 2016 voided China’s claim over the waterway for being illegal. Beijing has ignored the ruling.

“China must show its sincerity in negotiating with the Philippines,” Mr. Tolentino said. “We just concluded the talks on Ayungin Shoal (Second Thomas Shoal), and this happened.”

The Philippines and China last month reached a provisional agreement on resupply missions to the shoal, where the Philippines grounded a World War II- era ship in 1999 to bolster its sea claim.

Philippine Foreign Affairs Undersecretary Ma. Theresa P. Lazaro has said the understanding with China did not compromise the country’s South China Sea position and that the arrangement could be reviewed if needed.

41 close contacts of Pinoy with mpox isolated — DoH

AN ILLUSTRATION of mpox virus particles. — FRED HUTCH CANCER CENTER/HANDOUT VIA REUTERS

By Kyle Aristophere T. Atienza, Reporter

THE 33-YEAR-OLD Filipino who tested positive for monkeypox — the first mpox case reported by health authorities this year — visited an illegal spa and a dermatology clinic in Quezon City and had over a dozen close contacts there, according to a local official.

The 41 close contacts of the patient, who is not a resident of the country’s most populous city, were under quarantine, Quezon City Mayor Maria Josefina “Joy” Belmonte-Alimurung told a news briefing on Wednesday.

She said authorities had closed down the spa in the absence of a permit and other documents.

Earlier in the day, Health Secretary Teodoro J. Herbosa said the patient, who has no travel history outside the country, was infected with a mild Clade 2 variant and not the newer and potentially deadlier variant that is spreading rapidly in African countries.

The case was of the original variant, which “could have been circulating in our community,” he told the ABS-CBN News Channel.

Mr. Herbosa told President Ferdinand R. Marcos, Jr. at a meeting on Wednesday that there was no need to declare a public emergency, citing the low number of cases and the low death rate, based on a statement from the presidential palace.

He also said the disease is not airborne.

“Continue surveillance especially in areas and people most vulnerable to the disease,” Mr. Marcos told Mr. Herbosa.

The latest case — the 10th overall and the first since the World Health Organization (WHO) declared a “public health emergency of international concern” amid spiraling cases in Africa linked to Clade 1b variant — was reported on Sunday and was confirmed through laboratory testing.

The Department of Health (DoH) earlier said four cases were detected in 2022. Last year, three cases were logged in December and one each in July and May. All patients have recovered.

WHO Director for Europe Hans Kluge on Wednesday said mpox’s risk to the public is lower than that of the coronavirus.

Although more studies are needed on the Clade 1b variant, mpox could be reigned in, he added, based on a report by BBC News.

The WHO declared an end to the COVID-19 pandemic after three years.

The global health emergency declaration on Aug. 14 was the second in two years relating to mpox.

The first was in July 2022 amid a multi-country outbreak as the disease spread rapidly via sexual contact across countries where the virus had not been seen before, the WHO said in a statement.

The July 2022 declaration ended in May 2023 after a sustained decline in global cases.

DoH said common symptoms of mpox are skin rashes or mucosal lesions, which can last two to four weeks and are accompanied by fever, headache, muscle aches, back pain, low energy and swollen lymph nodes.

The disease can be transmitted to humans through close contact with someone who is infectious, from infected animals or from contaminated materials such as used clothes or utensils.

Caused by an orthopoxvirus, monkeypox was first detected in humans in 1970, in the Democratic Republic of the Congo, according to the WHO. The disease is considered endemic to countries in central and west Africa.

Budget department bucks proposal to revive e-sabong 

PHILIPPINE STAR/IRISH LISING

THE DEPARTMENT of Budget and Management (DBM) on Wednesday rejected a proposal to revive online cockfighting operations or e-sabong, saying the government has enough revenue to fund next year’s national budget.

“It’s not in the assumptions for the 2025 budget,” Budget Secretary Amenah F. Pangandaman told reporters on the sidelines of a briefing on Wednesday, referring to potential taxes from e-sabong.

The Philippine Amusement and Gaming Corp. (PAGCOR) earlier proposed to revive e-sabong operations to help generate additional state revenue.

At a recent House of Representatives hearing, PAGCOR Chairman Alejandro H. Tengco said the agency could better regulate e-sabong operations.

“I brought up this concern with Congress and the Senate,” he said. “Definitely, there are foregone revenues. But then again, there are also social consequences.”

But Ms. Pangandaman said PAGCOR continues to generate earnings without the e-sabong.

PAGCOR reported a 32.32% surge in gross gaming revenue to P89.23 billion in the second quarter, mostly from electronic gambling.

PAGCOR collected over P6 billion in revenue from online cockfighting  a year before it was banned by ex-President Rodrigo R. Duterte.

Mr. Duterte banned the practice in May 2022 after the disappearance of 34 cockfighting players who got addicted to e-sabong. They have not been found.

Before the ban, the Bureau of Internal Revenue and PAGCOR did not withhold the 20% tax on e-sabong winnings since it started in 2020.

However, e-sabong operations continue despite the ban, Mr. Tengco said in February.

Several lawmakers also opposed the revival, saying it is worse than Philippine Offshore Gaming Operators, which President Ferdinand R. Marcos, Jr. banned given their links to criminal syndicates.

A bill that seeks to prohibit all forms of online gambling is pending at a Senate committee.

Ms. Pangandaman said the proposed e-sabong revival would be discussed in the economic team’s meeting this month. — Beatriz Marie D. Cruz

Senate OKs bill lowering PhilHealth premiums

PHILSTAR FILE PHOTO

THE SENATE on Wednesday approved on second reading a bill that seeks to lower Philippine Health Insurance Corp. (PhilHealth) premiums to 3.25% next year from 5% this year under the Universal Healthcare Act.

Senator Joseph Victor “JV” G. Ejercito, who sponsored Senate Bill No. 2620, earlier cited the need to lower the premium, saying Filipinos are still recovering financially from the coronavirus pandemic.

During Wednesday’s plenary session, he moved to retain the 5% premium rate this year instead of the 4% proposed in the bill.

He noted that since the year is about to end, it would be difficult to refund payments made by PhilHealth members since January.

“Thus, the reduced premium rates as amended by the Senate will be effective starting the year 2025 onwards,” he told the floor.

Under the bill, the premium will be 3.25% for those with a monthly income of P10,000 to 50,000, with incremental increases of 0.25% each year, he said.

The National Government will shoulder half of the premium contributions of migrant workers.

PhilHealth started hiking its monthly contribution rate in 2019 so that it can sustain the benefits given to its members. The contribution rate this year stands at 5% from 2.75% five years ago. — John Victor D. Ordoñez

Philippines told to work with US, French navies to boost deterrence vs Beijing

PHILIPPINE SEA (Aug. 13, 2024) – The Arleigh Burke-class guided-missile destroyer USS Dewey (DDG 105) sails alongside the French Navy Aquitane-class frigate FS Bretagne (D 655) during bilateral operations in the Philippine Sea, Aug. 13, 2024. Dewey is forward-deployed and assigned to Destroyer Squadron (DESRON) 15, the Navy’s largest DESRON and the U.S. 7th Fleet’s principal surface force. — PHOTO COURTESY OF FRENCH NAVY

THE PHILIPPINES should leverage its ties with France and the United States to boost its naval capabilities and deter China’s aggression in the South China Sea, according to security analysts.

“The American and French navies are two of the biggest western naval powers in the world,” Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation, said in a Facebook Messenger chat.

“By leveraging them, The Philippine Navy can improve its naval and maritime deterrence against our squabble with China’s People’s Liberation Army-Navy,” he added.

Last week, the US and French navies held war games in the Philippine Sea to advance their interoperability “in support of a free and open Indo-Pacific,” the US 7th Fleet said in a statement on Thursday.

Manila filed a diplomatic protest with Beijing last week after two Chinese aircraft dropped flares in the path of a Philippine Air Force plane conducting a routine patrol over the Scarborough Shoal on Aug. 8.

The two countries came to an arrangement last month after multiple standoffs at Second Thomas Shoal, where the Philippines grounded a World War-II era ship in 1999 to bolster its sea claim.

On the sidelines of a congressional hearing, Philippine Foreign Affairs Undersecretary Ma. Theresa P. Lazaro said the understanding with China did not compromise the country’s South China Sea position and the arrangement could be reviewed if needed.

“For the US and France to cooperate in naval drills in the Philippine Sea shows how China’s maritime aggression has succeeded in uniting its competitors against it,” Raymond M. Powell, a fellow at Stanford University’s Gordian Knot Center for National Security Innovation, said in an X message.

He said Manila should be cautious in making deals with China since it tends not to honor them and uses commitments merely as tactics in maintaining its expansive claim over the South Chian Sea.

The Chinese Embassy in Manila did not immediately reply to Viber message seeking comment.

Philippine President Ferdinand R. Marcos, Jr. has condemned the Chinese Air Force’s “unjustified, illegal and reckless” actions.

The Chinese side has said it “organized naval and air forces to lawfully” drive away the Philippine plane after repeated warnings, describing its operations as “professional, standard, legitimate and legal.”

In a statement last week, the Chinese Foreign Ministry said Beijing had lodged a diplomatic protest with Manila its ship “illegally anchored” at Sabina Shoal.

It sought the withdrawal of the Philippine Coast Guard vessel from Sabina Shoal, which China calls Xianbin Jiao, and to “stop its infringement activities” in the waterway.

“It is China encroaching on our exclusive economic zone, not the other way around,” Senate President Pro-Tempore Jose “Jinggoy” P. Estrada, Jr. said in a statement at the weekend.

“Their primary objective seems to be to establish full control of the shoal with their own Chinese Coast Guard (CCG) vessels and maritime militia, without any presence from us.”

China claims almost the entire South China Sea, including parts claimed by the Philippines, Brunei, Malaysia, Taiwan and Vietnam.

Portions of the waterway, where $3 trillion worth of trade passes yearly, are believed to be rich in oil and natural gas deposits, as well as fish stocks.

“The best resort is to take everything (China says) with a grain of salt and to verify events that happen on the ground,” Don McLain Gill, who teaches international relations at De La Salle University, said in a Facebook Messenger chat.

“The problem is China does not follow through on these agreements, confidence-building measures, as its words at the political level and actions on the ground are different,” he added. — John Victor D. Ordoñez

Philippines probing Guo escape

PHILIPPINE STAR/JESSE BUSTOS

PHILIPPINE President Ferdinand R. Marcos, Jr. on Wednesday said his government was investigating how Alice Guo, a former town mayor accused of ties with Chinese criminal syndicates, managed to flee the country.

He warned that “heads will roll” a day after he ordered the dismissed mayor’s Philippine passport canceled after she left the country, which was confirmed based on foreign immigration records.

“We will expose the culprits who have betrayed the people’s trust and aided in her flight,” Mr. Marcos said in a statement. “Those responsible will be suspended and will be held accountable to the fullest extent of the law.” Ms. Guo, wanted by the Senate for refusing to attend hearings on her alleged criminal ties, denies the accusations, insisting she is a natural-born Philippine citizen facing “malicious accusations.”

Senator Ana Theresia N. Hontiveros-Baraquel said the Foreign Affairs department had reported Ms. Guo’s case to the International Criminal Police Organization. “They raised it to Interpol so that the issue could be subject to whatever action Interpol deems appropriate for the situation.”

An Indonesian immigration official who declined to be named because he is not authorized to speak to the media confirmed that Ms. Guo entered the country on Aug. 18 at 1:13 pm [0513 GMT]. The official did not immediately respond when asked if Ms. Guo was still in Indonesia. — John Victor D. Ordoñez with Reuters

DoLE wage hike metrics outdated

The House of Representatives will tackle bills seeking to hike the minimum wage by P150 on Tuesday (Feb. 27). — PHILIPPINE STAR/KJ ROSALES

THE DEPARTMENT of Labor and Employment (DoLE) should revise its method of computing wage increases to address rising prices, a congressman said on Wednesday.

Party-List Rep. Arlene D. Brosas said the agency’s metrics are outdated and out of touch with Filipinos’ needs.

The National Wages and Productivity Commission (NWPC) used poverty threshold data from 2021 as a reference for a P35 Metro Manila wage hike in July, which increased minimum wages in the capital region to P645 from P610, according to Executive Director Ma. Criselda R. Sy.

“If it’s this outdated, with our references [for wage hikes] being from three years ago, it seems like the DoLE needs to change its position on increasing wages,” she said at a House of Representatives hearing on the agency’s budget for next year. — Kenneth Christiane L. Basilio

CA stands by Park N Ride ruling

PHILSTAR FILE PHOTO

THE COURT of Appeals (CA) has upheld its 2023 decision that reversed the cancelation of the property lease contract between Park N Ride, Inc. and Manila’s city government, which was signed under ex-Mayor Francisco “Isko Moreno” Domagoso.

The appellate court’s Former Fourth Division in a five-page resolution on Aug. 12 ordered the local government to return the property to Park N management.

The city gravely abused its discretion when it unilaterally evicted Park N Ride from the property in 2021, the court said. It also ordered a Manila regional trial court hear Park N Ride’s lawsuit for damages. — Chloe Mari A. Hufana

House OKs bill vs election swap

PHILIPPINE STAR/MICHAEL VARCAS

THE HOUSE of Representatives on Wednesday approved on third and final reading a bill that seeks to bar substitution for withdrawing election candidates.

In a 195-0-0 vote, congressmen agreed to remove the withdrawal of a candidate as grounds for substitution, while including a political candidate’s mental or physical incapacity as a valid reason for replacements.

A prominent case of substitution was then-Davao City Mayor Rodrigo R. Duterte’s replacement of Martin Dino as Partido Demokratiko Pilipino’s (PDP) standard bearer for the 2016 presidential elections, which Mr. Duterte ended up winning.

Meanwhile, the House also approved on final reading a measure that will exempt from taxes rewards and incentives given to athletes competing in international events.

“We hope to further encourage various sectors to support our athletes by exempting donations, endowments, or contributions directly and exclusively for state youth and sports development programs and competitions from taxes,” Parañaque Rep. Gustavo S. Tambunting said in a statement.

The bill retroactively takes effect in January. Congressmen rushed the bill after Filipino gymnast Carlos Edriel P. Yulo won two gold medals in the 2024 Paris Olympics. — Kenneth Christiane L. Basilio

Mayor’s group bucks graft suits

A GROUP of mayors in the Philippines on Wednesday said charges against the mayors of Pasig, Marikina and Iloilo are politically motivated, and meant to tarnish their reputation before the 2025 midterm elections.

The Mayors for Good Governance rallied behind Mayors Victor Ma. Regis “Vico” N. Sotto of Pasig City, Marcelino R. Teodoro of Marikina City and Jerry P. Treñas of Iloilo City, who are facing graft complaints before the Office of the Ombudsman.

“The complaints filed against them with the ombudsman are an opportunity for the truth to come out and for their names to be cleared,” the group said in a statement. — Kenneth Christiane L. Basilio

DSWD says mapping aid targets

THE DEPARTMENT of Social Welfare and Development (DSWD) uses several indicators to identify potential beneficiaries of state aid, Social Welfare Secretary Rex T. Gatchalian said on Wednesday.

The agency also uses nonmonetary indicators because data from the local statistics agency are not enough to map out Filipinos in need of assistance, he told a House of Representatives budget hearing.

“If we only use pure data from the Philippine Statistics Authority and National Economic and Development Authority, then the data would remain faceless,” he said in Filipino. “In the department, it’s not just numbers that give faces to them, which is why we include nonmonetary indicators.” — Kenneth Christiane L. Basilio

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