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BOJ debated further rate hikes in July, prompting hawkish shift

REUTERS

 – Bank of Japan policymakers, in deciding a landmark increase in interest rates last month, discussed further rate hikes, a summary of the discussion showed on Thursday, prompting a hawkish shift that has contributed to global market turmoil.

One member of the policy board said the central bank should eventually raise its policy rate to around 1% or higher, according to the summary of opinions, the first time a BOJ policymaker has specified a potential endpoint.

In the surprise move on July 31, the central bank raised its short-term policy target to 0.25%, its highest in 15 years, from a zero-to-0.1% range, and released a plan for tapering its huge asset buying in a landmark shift away from a decade-long stimulus program.

The July increase and subsequent comments by BOJ Governor Kazuo Ueda signalling the chance of further rate hikes – along with indications that the Federal Reserve was preparing to cut US rates – caused a spike in the battered yen and contributed to global market turmoil.

The nine-member board debated the risk that rising import costs and steady wage increases might push up inflation more than expected, the summary showed, highlighting a growing sense in the board that more rate hikes might be needed.

“The BOJ must proceed with further adjustment of the degree of monetary accommodation as appropriate”, even after July’s hike if companies continue to raise prices, wages and capital spending, one member was quoted as saying.

Those discussions, which market participants on Thursday said were more hawkish than expected, were likely behind Ueda’s market-moving comments. The ensuing rout led to remarks by BOJ Deputy Governor Shinichi Uchida on Wednesday playing down the chance of a near-term rate hike.

Finance Minister Shunichi Suzuki on Thursday declined to comment on Mr. Uchida’s remarks, telling a press conference the specifics of monetary policy are for the central bank to decide.

 

FOCUS ON INFLATION OVERSHOOT

One board member in July called for the BOJ to keep raising rates in a “timely and gradual manner”, as Japan’s neutral rate – the level of borrowing costs that neither cools nor overheats the economy – seems to be at least around 1%, the summary showed.

That was the first time a BOJ policymaker, even anonymously, has cited a specific level for Japan’s neutral rate.

Mr. Ueda has repeatedly said it is hard to specify Japan’s neutral rate, keeping markets wondering how far the central bank would tighten. While the BOJ does not issue an official estimate of the neutral rate, analysts see it between 1% and 1.5%.

At the July meeting, some members warned against hiking rates too soon, saying policy normalization “must not be an end in itself”, with recent data showing weak signs in consumption. Two board members voted against the July rate hike.

But discussions on the price outlook focussed on the risk of an inflation overshoot, the summary showed.

“The likelihood of achieving our inflation target has increased further. That said, upside risks to prices require attention, since a rising number of industries have seen supply shortages and excess demand as a result of labor shortages,” one board member said.

“Upward pressure on prices is likely to remain because of tight labor market conditions” and rising import prices due to the impact of the yen’s declines, another said. – Reuters

Qantas slashes former CEO’s exit pay after damning governance report

REUTERS

Australia’s Qantas said it was cutting its former CEO’s exit bonuses by A$9.3 million ($6 million) after an external review found him responsible for measures alienating travelers, employees and shareholders in the COVID era and beyond.

The decision marks a gloomy footnote to the 15-year rein of Alan Joyce at Australia’s dominant airline, who brought forward his retirement to last September under a cloud of lawsuits alleging unfair pandemic sackings and selling tickets to cancelled flights.

Qantas was one of Australia’s top brands for years even as Joyce leaned into controversy. In 2011, he grounded its entire fleet over a union dispute, but the sacking of 1,700 ground staff in 2020 while collecting COVID stimulus payments, followed by a surge of flight cancellations and lost luggage once COVID border restrictions lifted, prompted analysts to warn the cost of repairing the airline’s reputation may hurt profit.

Mr. Joyce’s final compensation totaled A$21.4 million including bonuses, but the company said at the time it reserved the right to withhold some pending an external review of how the airline which sells nearly two-thirds of Australian domestic fares was run.

Qantas published the review on Thursday, which blamed the company’s reputational crisis on a “command and control” leadership style, and said it was cutting Mr. Joyce’s final package to just over half the original amount.

“There was too much deference to a long-tenured CEO who had endured and overcome multiple past operational and financial crises,” said the report by McKinsey & Co senior adviser Tom Saar.

“(Qantas) had a ‘command and control’ leadership style with centralized decisions and an experienced and dominant CEO,” the report added.

“This contributed to a top-down culture, which impacted empowerment and a willingness to challenge … decisions of concern. That cultural characteristic underpinned some of the events that affected the group’s reputation.”

The Qantas board had “limited visibility or appreciation of the manifestation of this cultural characteristic”, the report noted, adding that the company had already replaced some directors and top managers.

The company was also re-setting its relationships with external stakeholders, the report said, in light of an “adversarial approach to engagement” under Mr. Joyce.

And the airline had brought in a stricter internal approval process for CEO share sales, the report said, noting Mr. Joyce’s sale of A$17 million of Qantas shares in June 2023, a few months before his scheduled retirement, contributed to a loss of trust among stakeholders.

Qantas agreed in May to pay A$120 million to settle a regulator lawsuit over the sale of thousands of tickets on already cancelled flights.

The airline, which reports full-year results on Aug. 29, is still waiting to learn how much it must pay after losing a separate lawsuit which found it illegally fired 1,700 ground staff in 2020 to stop them from taking industrial action like strikes. – Reuters

Second hottest July breaks 13-month record streak, EU scientists say

 – Last month was the second hottest July for the planet on record, breaking a 13-month period when each month was warmest, which had been in part fueled by the warming El Nino weather pattern, the European Union’s Copernicus Climate Change Service said on Thursday.

The month was 1.48 degrees Celsius (2.7 degrees Fahrenheit) above the pre-industrial reference of 1850-1990, Copernicus said in a monthly report, while the last 12 months were 1.64 C above the pre-industrial average due to climate change.

July also recorded the two hottest days on record.

Copernicus attributes the high temperatures largely to greenhouse gas emissions from fossil fuel-based industries and noted that oceans not normally impacted by El Nino saw an unusual rise in temperatures.

“This El Nino has ended but this magnitude of global temperature rises, the big picture is quite similar to where we were a year ago,” Julien Nicolas, a climate researcher with Copernicus, told Reuters.

“We are not done with temperature records causing heatwaves … We know this long-term warming trend can be with a very high level of confidence related to the human impact on climate.”

Above-average temperatures were recorded in southern and eastern Europe, the western United States, western Canada, most of Africa, the Middle East, Asia and eastern Antarctica.

Near or below-average temperatures were seen in northwestern Europe, western Antarctica, parts of the United States, South America and Australia.

July 2024 was also wetter than average in northern Europe and southeastern Turkey while drought warnings persisted in southern and eastern Europe.

Arctic sea ice was down more than in 2022 and 2023 at 7% below average though not as severe as the record 14% drop in 2020. Antarctic sea ice was the second lowest extent for July at 11% below average compared with 15% below in July last year.

Global sea temperatures remain at near record highs with this July only 0.1 C below July last year, ending a 15-month consecutive new record streak.

“What we saw was surprising in terms of how much warmer it has been. That raises the question of what is happening to the ocean outside this natural climate pattern like El Nino or La Nina events. Are there shifts in the ocean currents?” Mr. Nicolas said. – Reuters

Gogolook backs Scam Watch Pilipinas’ volunteer watcher program at PUP-Manila

Mel Migriño, Gogolook Southeast Asia Regional Director and Philippines Country Representative with students from PUP-Manila

Gogolook, the global TrustTech company, has supported Scam Watch Pilipinas’ recent launch of its volunteer watcher program at the Polytechnic University of the Philippines-Manila (PUP-Manila).

Mel Migriño, Gogolook Southeast Asia Regional Director and Philippines Country Representative, and the Founder and President of the Women in Security Alliance Philippines (WiSAP), highlighted the program as a significant step forward in the fight against online scams.

“This volunteer watcher initiative perfectly aligns with Whoscall’s mission to combat online scams, particularly SMS scams and phishing, and represents a proactive approach to safeguarding the public from these threats. We look forward to expanding this campaign to various academic institutions in the country enabling the students and school administration and their families to be digitally safe while using online facilities and platforms,” Ms. Migriño said.

Developed by Gogolook, Whoscall is an anti-scam application that identifies unknown calls in real-time and filters out spam calls using its artificial intelligence (AI)-powered system and extensive database.

The volunteer watcher initiative, spearheaded by Scam Watch Pilipinas, encourages vigilance against online scams. The goal is for at least one family member to be knowledgeable about these threats to safeguard the entire family.

The program was launched in front of over 120 journalism students at the Polytechnic University of the Philippines (PUP).

In her presentation, “Looking through the Lens of Scams and Fraud,” Ms. Migriño cited in detail the tactics that scammers use, the most common scams in the Philippines, and the possible risks that victims may encounter once they fall victim to scams.

Scam Watch Pilipinas Co-Founder and Co-Lead Convenor Jocel De Guzman expressed gratitude to Gogolook for its unwavering support, emphasizing that Scam Watch Pilipinas and Gogolook share a single objective: to combat online scams.

“I’m delighted with Gogolook’s support for this project, knowing that we are on the same page in fighting these online scams,” Mr. De Guzman said.

Representatives from the Cybercrime Investigation and Coordinating Center (CICC) and the Journalism Studies Association of the Philippines (JSAP) were also at the event.

 


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Philippines Q2 GDP rises 6.3% year on year, just above forecasts

PHILIPPINE STAR/RUSSELL PALMA

MANILA – The Philippine economy grew 6.3% in the second quarter from a year earlier, driven by government spending and investment, the statistics agency said on Thursday, stronger than upwardly revised 5.8% growth in the first quarter.

That took first-half GDP growth to 6.0%, putting the economy on track to meet the full-year growth target of 6.0% to 7.0%, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan told a news conference.

Inflation, which has hampered consumer spending, will revert to its longer-term downtrend, Mr. Balisacan said.

Economists in a Reuters poll had expected annual gross domestic product growth of 6.2% in the April-June quarter.

On a seasonally adjusted basis, the economy grew 0.5%quarter-on-quarter, below both the 0.9% growth forecast in a Reuters poll and the 1.3% pace in the first quarter. — Reuters

ArenaPlus gifts P5 million to Olympic gold medalist Carlos Yulo

ArenaPlus joins the rest of the nation by celebrating the momentous double gold medal victory of Carlos “Golden Boy” Yulo in the 2024 Olympic Games. To honor Mr. Yulo’s historic achievement, ArenaPlus is awarding the Olympian an “Astig Hero Bonus” of P5,000,000 in cash.

DigiPlus, the parent company of sports betting platform ArenaPlus, has been proudly championing Mr. Yulo since the start of the Olympic games. As one of ArenaPlus’ official brand ambassadors, Mr. Yulo has had the company’s full support throughout the entirety of his Olympic campaign.

Mr. Yulo’s hard work and dedication resulted in the historic win of two gold medals in men’s artistic gymnastics in the men’s floor and men’s vault exercises. The victory makes him only the second ever Filipino Olympic gold medalist, and the most awarded one in history.

“Carlos Yulo truly embodies the ‘astig’ Pinoy spirit,” said DigiPlus Chairman Eusebio H. Tanco. “We coudn’t be prouder of how he has represented both our country and DigiPlus. Our warmest congratulations to him!”

 


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Del Monte Pacific Limited to hold Annual General Meeting on Aug. 30

 

 


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Q2 agricultural output falls by 3.3%

Farm output dropped by 3.3% in the second quarter, as the El Niño weather phenomenon caused dry spells and droughts around the country. — PHILIPPINE STAR/RUSSELL A. PALMA

By Adrian H. Halili, Reporter

THE PHILIPPINES’ agricultural output fell in the second quarter, as the crops and livestock sector continued to bear the brunt of the El Niño weather phenomenon.

Data from the Philippine Statistics Authority (PSA) showed the value of production in agriculture and fisheries at constant 2018 prices dropped by 3.3% to P413.91 billion in the April-to-June period, worsening from the 1.2% contraction a year earlier.

It was the first decline in agricultural output since the 0.2% drop in the third quarter of 2023, and the biggest drop since the 3.4% contraction in the first quarter of 2021.

Performance of Philippine Agriculture“The reduction was due to the decreases in the value of crops and livestock production. Meanwhile, expansions were recorded in the value of poultry and fisheries production,” the PSA said.

The agriculture sector accounts for about a tenth of the country’s gross domestic product (GDP) and provides about a quarter of all jobs.

The PSA is scheduled to release second-quarter GDP data on Aug. 8.

For the first half, the value of production in agriculture and fisheries slipped by 1.5%, a reversal of the 0.4% growth a year ago.

“The Philippine agriculture sector has demonstrated resilience, bolstered by strategic interventions from the Department of Agriculture (DA), in the face of challenges posed by the adverse impact of El Niño on crop harvest and the stubborn African Swine Fever (ASF) on hog production, particularly during the second quarter,” Agriculture Assistant Secretary and Spokesperson Arnel V. de Mesa said on Wednesday.

Crops production, which accounted for half of the agriculture sector’s total production, slumped by 8.6% year on year in the second quarter. This was a reversal of the 1.2% growth a year ago.

Year to date, crops production dropped by 4.4%, reversing the 1.5% growth a year earlier.

In the second quarter, palay (paddy rice) production declined by 9.5%, while corn plunged by 20.3%.

Also posting double-digit declines in production were sugarcane (-42.3 %), onion (-37.4 %), tomato (-15.6 %), mongo (-14%), and abaca (-12.4%).

Lower output was also seen in rubber (-7.5%), cassava (-7.2%), eggplant (-7%), sweet potato (-5.8%), ampalaya (-5.1%), coconut (-4%), banana (-3.3%), mango (-2.8%), pineapple (-2.7%), tobacco (-1.9%), coffee (-1.87%) and potato (-1%).

Only calamansi (6.4%), cacao (5.9%), and cabbage (2.7%) posted growth in production in the second quarter.

“These drops are the effects of El Niño during the first semester of the year. Crops, particularly rice and corn, either did not survive or suffered yield losses due to lack of water,” Federation of Free Farmers National Manager Raul Q. Montemayor said in a Viber message.

The state weather bureau declared the start of the El Niño weather event in June 2023, bringing below-normal rainfall conditions, dry spells and droughts. El Niño ended in early June, but dry conditions are expected to continue.

Based on the Agriculture department’s final bulletin, farm damage from El Niño hit P15.3 billion, with total crop losses at 784,344 metric tons. Rice and corn were the most affected crops.

“The explanation of (the DA) that the drop was due to delayed planting by some farmers does not seem realistic… So it was not a delay in planting but an inability to plant due to lack of rain,” Mr. Montemayor said.

However, Mr. De Mesa said the DA had supported the agriculture sector during El Niño, earmarking P14.54 billion in financial aid for affected farmers, production support and loans.

LIVESTOCK DROP
Livestock production shrank by 0.3% in the quarter ending June, reversing the 0.7% expansion a year ago. It accounted for 15.3% of the total agricultural output during the April-to-June period.

Data from the PSA showed a drop in the value of production for goat (-2.7%), carabao (-2.4%) and hog (-0.3%). Higher production was seen in dairy (9.7%) and cattle (0.2%).

In the January-to-June period, the value of livestock production slid by 1.9%, a reversal of the 2.4% growth in 2023.

Former Agriculture Secretary William D. Dar said in a text message that the livestock industry, particularly hogs, is still affected by ASF.

“The 0.3% decline (in hogs) is small. Most likely, the market weights of hogs are smaller due to extreme heat, which affected the feed intake and therefore the feed conversion as well,” National Federation of Hog Farmers, Inc. Vice-Chairman Alfred Ng said in a Viber message.

Hogs account for 12.4% of livestock production.

GAINS IN POULTRY, FISHERIES
Poultry output, which accounts for 16.9% of the total agricultural output, jumped by 8.7% in the April-to-June period, an improvement from the 1.5% growth a year ago.

Higher production was seen for chicken eggs (9%), chicken (8.9%), duck (1.3%) and duck eggs (0.8%).

From January to June, the value of poultry production rose by 7.3% from 2.3% a year ago.

Former Agriculture Undersecretary Fermin D. Adriano said the growth in poultry output during the period was due to poultry growers’ improved efforts to curb the spread of bird flu.

“It is easy for poultry production to recover because there are now chicken breeds which can be harvested for less than a month. Old stock affected by bird flu can easily be replenished,” he said in a Viber message.

Mr. Dar said the growth in poultry was driven by the sustained investments of large poultry companies including small- and medium-sized growers.

Meanwhile, fishery production increased by 2.2% in the second quarter, a turnaround from the 13.8% decline a year ago. The subsector made up 14.6% of the total farm output.

Year to date, the value of fishery output inched up by 1.1%, a turnaround from the 7.5% decline last year.

“Fisheries were coming from a very low base, so it was relatively easy for the sector to show an uptick.  Maybe the hot weather induced more phytoplankton production,” Mr. Montemayor said.

Gains were seen in skipjack or gulyasan (141.2%), bigeye tuna (94.1%), yellowfin tuna (43.2%), frigate tuna or tulingan (33.7%), P. Vannamei (33.6%), blue crab (7.4%), fimbriated sardines (5.9%) and cavalla or talakitok (4%).

On the other hand, production declined for tiger prawn or sugpo (-40.3%), grouper or lapu-lapu (-34.8%), seaweed (-25.8%), slipmouth or sapsap (-24.7%), big-eyed scad or matangbaka (-22.3%), mudcrab or alimango (-18.3%), round scad or galunggong (-13.6%), squid (-6.8%), tilapia (-6%), milkfish or bangus (-4.6%), threadfin bream or bisugo (-4.4%), and Bali sardinella or tamban (-0.1%).

Mr. Adriano noted that the open fishing season in Philippine waters coupled with better weather contributed to the increase in fishery production.

The DA is targeting 1-2% agricultural growth in 2024, taking into account the effects of the El Niño and La Niña weather events.

June jobless rate falls to lowest in two decades

People flock to a job fair at SM City San Lazaro in Manila, June 26, 2024. — PHILIPPINE STAR/EDD GUMBAN

THE UNEMPLOYMENT RATE in June fell to 3.1%, the lowest in two decades, as hiring in the construction sector surged, the Philippine Statistics Authority (PSA) reported on Wednesday.

Preliminary data from the Philippine Statistics Authority (PSA) showed the jobless rate slipped from 4.1% in May and 4.5% in June 2023.

The June unemployment rate was the same as in December 2023. It was also the lowest jobless rate since April 2005, when the statistics agency revised its definition of unemployed to Filipinos aged 15 years and older without a job, available for work, and actively seeking one.

Philippine Labor Force Situation

This translated to 1.62 million unemployed Filipinos in June, down by 486,000 from 2.11 million in May.

Year on year, unemployment went down by 707,000 from 2.33 million in June 2023.

This was also the lowest number of unemployed Filipinos since the 1.6 million recorded in December last year.

In the first half, the unemployment rate averaged 3.9%, lower than the 4.6% average a year ago.

“We can see the economic activity linked to construction activities substantially increased… (In construction) we added 938,000 jobs (year on year),” PSA Undersecretary and National Statistician Claire Dennis S. Mapa said in mixed English and Filipino during the press briefing on Wednesday.

However, underemployment — those who want longer hours or an additional job — went up to 12.1% in June from 9.9% in May. This was a tad higher than 12% in June 2023.   

The ranks of the underemployed Filipinos reached 6.08 million, up by 1.27 million month on month and 208,000 year on year.

As of end-June, the average underemployment rate stood at 12.3%, lower than 12.5% last year.

“Year on year, the labor force participation rate increased substantially… What happens is that the labor market cannot absorb this, so not everyone can get full-time jobs… This is why there is an increase in underemployed people,” Mr. Mapa said.

Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message the higher underemployment rate could have been due to the sectoral slowdowns and lack of available part-time work.

In June, the employment rate rose to 96.9%, equivalent to 50.28 million Filipinos. This was slightly higher than 95.9% (equivalent to 48.87 million) in May, and 95.5% (48.84 million) in June 2023.

In the first half, the employment rate averaged 96.1%, up from 95.4% a year ago.

The service sector remained the top employer, accounting for 58.7% of jobs in June, followed by agriculture (21.1%) and industry (20.2%).

In June, month-on-month job gains were recorded in construction (up 680,000 to 5.77 million), agriculture and forestry (up 571,000 to 9.53 million), and wholesale and retail trade (490,000 to 10.6 million).

“The government’s swift implementation of infrastructure projects and the continued improvement of operating conditions for manufacturing firms have led to these employment gains. Increasing investments in renewable energy, water supply, and mining and quarrying have also supported employment growth in these areas,” National Economic and Development Authority Secretary Arsenio M. Balisacan said in a statement.

On the other hand, the biggest monthly job loss was seen in public administration and defense, which cut 466,000 jobs to 2.67 million. Job losses were also seen in education (down 184,000 to 1.51 million), and transportation and storage (down 152,000 to 3.57 million).

Meanwhile, construction saw the largest annual increase in jobs, adding 938,000 jobs to 5.77 million. Significant job gains were also seen in wholesale and retail trade (up 527,000 to 10.6 million), and accommodation and food service activities (up 396,000 to 2.62 million).

Year on year, agriculture and forestry cut 916,000 jobs to 9.53 million. Annual job losses were also seen in public administration and defense (down 340,000 to 2.67 million) and fishing and aquaculture (down 81,000 to 1.09 million).

Sentro ng mga Nagkakaisa at Progresibong Manggagawa Secretary-General Josua T. Mata questioned what he called the “flawed employment strategy” of the government.

“Worker underutilization remains high. The combined underemployment and unemployment rate rose from 14% in May 2024 to 15.2% in June 2024. This means nearly one in six workers are either unemployed or underemployed and unable to fully contribute to the economy,” he said in a Viber message.

The country’s labor force reached 51.9 million in June, increasing by 926,000 from 50.97 million in May.

On an annual basis, the labor force increased by 730,000 from 51.17 million.

This translated to a labor force participation rate of 66%, higher than the 64.8% in the previous month, but lower than 66.1% last year.

The average Filipino employee worked for 40.9 hours a week, up from 40.6 hours in May and from the 40 hours in June 2023. — Charles Worren E. Laureta

Forex buffer hits over 2-year high of $105.6B

JOHN GUCCIONE-PEXELS

By Luisa Maria Jacinta C. Jocson, Reporter

THE COUNTRY’S gross international reserves (GIR) jumped to $105.65 billion as of end-July, its highest level in over two years, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary data from the BSP showed gross dollar reserves inched up by 0.4% from $105.19 billion as of end-June.

Dollar reserves rose by 5.7% from $99.95 billion year on year.

This was also the highest level of reserves in 28 months or since the $107.3-billion level recorded in March 2022.

“The month-on-month increase in the GIR level reflected mainly the upward valuation adjustments in the BSP’s gold holdings due to the increase in the price of gold in the international market, net income from the BSP’s investments abroad, and the National Government’s (NG) net foreign currency deposits with the BSP,” it said.

As of end-July, the level of dollar reserves was enough to cover about 6.1 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.

It was also equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income.

Ample foreign exchange (forex) buffers protect an economy from market volatility and ensure the country can pay its debts in the event of an economic downturn.

BSP data showed that foreign investments edged higher by 0.09% to $90.07 billion from $89.99 billion a month ago. Year on year, investments increased by 7.6% from $83.68 billion.

Reserves in the form of gold were valued at $10.31 billion as of end-July. This was up by 4.1% from $9.9 billion in the previous month and by 0.09% from $10.3 billion a year ago.

On the other hand, net foreign currency deposits slipped by 1.4% to $791.2 million from $802.2 million month on month. It also fell by 42.1% from $1.37 billion a year earlier.

As of end-July, net international reserves edged up by 0.4% to $105.62 billion from $105.16 billion the  month prior.

Net international reserves are the difference between the BSP’s reserve assets or GIR and reserve liabilities, such as short-term foreign debt and credit and loans from the International Monetary Fund (IMF).

Meanwhile, the country’s reserve position in the IMF slid by 2.8% to $719.9 million as of end-July from $740.4 million as of end-June.

Special drawing rights, or the amount the country can tap from the IMF, was unchanged at $3.75 billion.

“The Philippines’ gross international reserves slightly increased in July, primarily due to higher gold valuations and positive investment returns. This maintains a robust external liquidity buffer, essential for safeguarding the country’s financial stability,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the GIR level continued to rise due to the new record highs in world gold prices, which boosted the value of the BSP’s gold holdings.

Mr. Ricafort said the country’s dollar reserves could improve in the coming months amid steady growth in overseas Filipino worker remittances, business process outsourcing revenues, foreign tourism revenues, and foreign direct investments.

The BSP expects the GIR level to settle at $104 billion by yearend.

First-quarter GDP growth revised upwards to 5.8%

A vendor arranges watermelons at a stall along a highway in Naic, Cavite, March 2, 2024. — PHILIPPINE STAR/EDD GUMBAN

THE PHILIPPINE ECONOMY grew slightly faster than initially reported in the first quarter, the Philippine Statistics Authority (PSA) said on Wednesday.

The PSA said in a statement the gross domestic product (GDP) growth rate for the January-to-March period was raised to 5.8% from the 5.7% previously reported. This was the fastest GDP growth since 6% in the third quarter of 2023.

The PSA said the main sources of the revision were financial and insurance activities (10.3% from 10%); wholesale and retail trade and repair of motor vehicles and motorcycles (6.6% from 6.4%); and electricity, steam, water and waste management (6.9% from 6.3%).

On the other hand, the largest downward revisions were recorded in education (3.7% from 4.6%), accommodation and food service activities (13.1% from 13.9%), and professional and business services (7% from 7.5%).

On the expenditure side, household and government spending growth remained unchanged at 4.6% and 1.7%, respectively.

Exports of goods and services, on the other hand, were revised upwards to 8.4% from 7.5%, while imports were revised downwards to 2.2% from 2.3%.

Gross capital formation growth was downgraded to 0.5% from the preliminary estimate of 1.3%.

The net primary income from the rest of the world was also higher at 57.6% from 57%.

Meanwhile, the gross national income — the sum of the nation’s GDP and net primary income from the rest of the world — for the first quarter was revised upwards to 9.8% from 9.7%.

National account revisions are based on approved revision policy, which is consistent with international standard practices, the PSA said.

The PSA will release second-quarter GDP data on Aug. 8. — Karis Kasarinlan Paolo D. Mendoza

Philippines in talks with JPMorgan for bond index inclusion, sources say

BLOOMBERG

THE PHILIPPINES is in talks with JPMorgan Chase & Co. for the inclusion of its peso government bonds in the US bank’s emerging-market debt gauge that’s tracked by billions of dollars’ worth of global funds.

Finance Secretary Ralph G. Recto told Bloomberg News that he knew there are discussions and that he was awaiting an update.

Joining the benchmark is typically a breakout moment for emerging economies, as the move attracts fresh inflows of overseas capital into their debt markets. India acceded to the gauge in late June, having been placed on watch for eligibility three years before.

For officials in Manila, the talks mark a potential turnaround after its global peso notes dropped out of the index due to illiquidity in January 2024. The Philippines has different types of local currency notes.

“Everyone’s pushing for stronger capital markets for the Philippines,” said Helen Go Oleta, a fund manager at RCBC Trust Corp. The development would be welcome as it would “provide a very healthy two-way market.”

The Philippines is not the only country to have been removed from the index in recent years. Russia got excluded in 2022 following the invasion of Ukraine, while Egypt was cut earlier this year after suffering dire shortages of foreign exchange.

A spokesperson for the Wall Street bank did not respond to Bloomberg’s e-mail and telephone call requesting comment. — Bloomberg