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House approves LDF bill

PHILSTAR FILE PHOTO

THE HOUSE of Representatives on Tuesday approved on second reading a bill that seeks to give the Loss and Damage Fund (LDF) Board a legal personality and allow it to operate in the Philippines.

Approved via voice vote, House Bill No. 10722 gives juridical and legal personality to the LDF Board, allowing it to buy assets and enter into contracts in the Philippines. It will also authorize the Board to negotiate with the World Bank.

The LDF Board is exempt from property and transaction taxes under the measure. It also exempts visiting Board officials from income taxes.

“The task of providing an enabling law conferring legal personality to the Board has fallen to this august chamber,” Bohol Rep. Edgar M. Chatto said in a sponsorship speech in plenary. “The Board is accorded legal personality and capacity where it can enjoy certain privileges and immunities.”

The Philippines in July won the bid to host the LDF. Philippine President Ferdinand R. Marcos, Jr. earlier said this reinforces the country’s dedication to become a leader in shaping international climate policies. — Kenneth Christiane L. Basilio

P5B more released for 4Ps

PHILIPPINE STAR/ MICHAEL VARCAS

THE DEPARTMENT of Budget and Management (DBM) on Tuesday said about P5 billion from last year’s budget would be released for the government’s conditional cash transfer program.

In a statement, the agency said the fund seeks to help ease the effects of rising prices on more than 700,000 households under the Pantawid Pamilyang Pilipino Program (4Ps).

“The DBM will do its part to streamline budget processes so that our citizens benefit from faster and more efficient delivery of essential services such as our 4Ps,” Budget Secretary Amenah F. Pangandaman said in the statement. — BMDC

ILO, Canada work vs child labor

THE International Labour Organization (ILO) and the Canadian government has partnered to strengthen freedom of association and combat child labor in the Philippines through a five-year project launched on Tuesday.

The project aims to promote the enforcement of international labor standards. It is funded by the Labour Program of Employment and Social Development Canada.

“Canada sets the bar on workers’ rights around the world,” Canadian Labor Minister Steven MacKinnon said in a statement. “Supporting our trading partners to strengthen workers’ rights is how we make sure those rights are upheld everywhere, so every worker has a workplace that is fair, safe and equitable.” — Chloe Mari A. Hufana

Maoist rebels convicted

THE DEPARTMENT of Justice Task Force on Counter-Terrorism I (DoJ-TFCT 1) on Tuesday said it scored a victory after a Mindoro Oriental trial court convicted two Communist Party of the Philippines-New People’s Army (CPP-NPA) members for the unauthorized issuance of authority to carry and illegal transfer of firearms.

Assisting Judge Jose C. Real, Jr. meted each defendant with a jail time of a year per crime.

“The period within which they are detained shall be credited in full should they abide by and follow the rules and regulations of the institution where they are continuously detained,” according to a copy of the decision promulgated on July 9. — Chloe Mari A. Hufana

Benguet vegetables saved

LA TRINIDAD, BENGUET — Benguet lawmaker Eric Go Yap has started the buying and distribution of 100 tons of cabbage and assorted vegetables for free in Metro Manila, to help farmers recover from the economic impact of Super Typhoon Carina.

Floods caused by the typhoon wreaked havoc on the trading of high-value crops after major road networks in Benguet and nearby provinces were closed. — Artemio A. Dumlao

Peso climbs to new two-month high on hawkish BSP bets

BW FILE PHOTO

THE PESO strengthened to a fresh two-month high against the dollar on Tuesday as faster-than-expected July inflation tempered expectations of a rate cut by the Bangko Sentral ng Pilipinas (BSP) next week.

The local unit closed at P57.81 per dollar on Tuesday, rising by nine centavos from its P57.90 finish on Monday, Bankers Association of the Philippines data showed.

This was the peso’s strongest finish since its P57.62-per-dollar close on May 17.

The peso opened Tuesday’s session weaker at P57.96 against the dollar. Its intraday best was at P57.80, while its weakest showing was at P58.02 versus the greenback.

Dollars exchanged went down to $1.21 billion on Tuesday from $1.76 billion on Monday.

The peso was initially weaker on safe-haven demand for the dollar due to recession fears in the US but rebounded in the afternoon as faster Philippine July inflation” [fanned] bets that the BSP may hold rates steady versus the Federal Reserve’s more aggressive tone, the first trader said by phone.

“The peso gained after hawkish remarks from BSP Governor Eli M. Remolona, Jr. that the central bank might consider holding its policy rates steady in its meeting next week,” the second trader said in an e-mail.

Mr. Remolona on Tuesday said a rate cut at its Aug. 15 review is “a little bit less likely” following the “worse-than-expected” July inflation print.

Headline inflation accelerated to a nine-month high of 4.4% in July from 3.7% in June. This was slower than the 4.7% print in the same month a year ago and was within the BSP’s 4%-4.8% forecast for the month.

However, this was higher than the 4% median estimate in a BusinessWorld poll of 15 analysts and was the fastest in nine months or since the 4.9% clip in October 2023.

The July consumer price index marked the first time since November that headline inflation exceeded the central bank’s 2-4% annual target.

The BSP chief previously signaled that they were on track to cut rates for the first time in over three years this month, possibly by 25 basis points (bps), adding that another 25-bp cut is likely next quarter.

The Monetary Board in July kept its policy rate at a 17-year high of 6.5% for a sixth straight meeting. It raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023 to help tame elevated inflation.

For Wednesday, the second trader said the peso could weaken ahead of a potentially higher Philippine unemployment rate.

The first trader sees the peso moving between P57.50 and P58 per dollar, while the second trader sees it ranging from P57.65 to P57.90. — A.M.C. Sy

Index inches lower on last-minute profit taking

REUTERS

THE BELLWETHER INDEX inched lower on Tuesday due to last-minute profit taking and faster-than-expected July inflation.

The Philippine Stock Exchange index (PSEi) slipped by 0.02% or 1.49 points to end at 6,433.24 on Tuesday, while the broader all shares index rose by 0.12% or 4.47 points to finish at 3,520.94.

“The local bourse inched down… as investors took profits at the last minute. The market was initially trading in the green due to bargain hunting after Monday’s steep decline. However, a surge of last-minute profit taking pushed the market into negative territory,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

Wall Street’s decline overnight due to US recession fears and the pickup in Philippine headline inflation last month clouded investor sentiment, Mr. Plopenio said.

“Philippine shares ended with flat performance despite a strong rebound early morning as the investors continue to monitor economic data in both US and Japan especially for signs of a global recession,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Major US stock indexes ended sharply lower on Monday as US recession worries shook global markets and drove investors out of risky assets, Reuters reported. The recession concerns followed weak economic data last week, including Friday’s soft US payrolls report.

The S&P 500 lost 160.23 points or 3% to end at 5,186.33 points; while the Nasdaq Composite lost 576.08 points or 3.43% to 16,200.08. The Dow Jones Industrial Average fell 1,033.99 points or 2.6% to 38,703.27.

Meanwhile, headline inflation accelerated to a nine-month high of 4.4% in July from 3.7% in June, the Philippine Statistics Authority reported on Tuesday.

This was slower than the 4.7% print in the same month a year ago and was within the Bangko Sentral ng Pilipinas’ (BSP) 4%-4.8% forecast for the month.

However, this was higher than the 4% median estimate in a BusinessWorld poll of 15 analysts conducted last week and was the fastest in nine months or since the 4.9% clip in October 2023.

For the first seven months, inflation averaged 3.7%, above the BSP’s 3.3% forecast for the year.

Sectoral indices were mixed on Tuesday. Mining and oil dropped by 1.75% or 143.46 points to 8,024.09; industrials retreated by 0.54% or 47.92 points to 8,801.81; and financials went down by 0.15% or 3.11 points to 1,963.28.

Meanwhile, property increased by 0.6% or 14.99 points to 2,508.59; services rose by 0.38% or 7.58 points to 1,983.42; and holding firms went up by 0.09% or 5.44 points to 5,627.89.

Value turnover dropped to P5.12 billion on Tuesday with 419.01 million shares changing hands from the P5.64 billion with 638.56 million issues traded on Monday.

Decliners outnumbered advancers, 97 versus 84, while 56 names were unchanged.

Net foreign selling climbed to P635.78 million on Tuesday from P621.93 million on Monday. — R.M.D. Ochave with Reuters

Palay yield target set at 7.5 metric tons per hectare

A farmer threshes newly harvested palay grains at a ricefield in Mogpog, Marinduque in central Philippines, March 22, 2016. — REUTERS

THE Department of Agriculture (DA) said it set the yield target at 7.5 metric tons (MT) of palay per hectare for the Masagana Rice Industry Development Program (MRIDP).

“We’re recalibrating the program to identify areas for enhancement, including the distribution of improved seed, expansion of irrigation systems, and adjustments to rice cropping schedules,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a statement on Tuesday.

The current national average yield is 4.17 MT per hectare, equivalent to 84 50-kilogram bags of palay, or unmilled rice.

The average yield of palay in irrigated areas is 4.51 MT. In non-irrigated areas it averages 3.34 MT.

“As we move forward, our aim is not just to increase productivity but also to ensure sustainability and resilience in our agricultural sector,” Mr. Laurel added.

The upgraded target could translate to annual rice production of more than 25 million MT, even if the target yield is achieved only in the 3.39 million hectares of irrigated farmland.

The DA has said it expects palay production this year of 20.44 million MT, up from 20.05 million MT in 2023.

In the first half, palay production declined 5% year on year to 8.53 million MT, according to the Philippine Statistics Authority.

“We must adopt a more scientific approach to farming to boost output and manage costs effectively,” Mr. Laurel added.

The MRIDP aims to stabilize the rice supply at between 24.99 million MT and 26.86 million MT a year, in the process lowering growth in rice prices to less than 1% annually.

It also seeks to increase farmer incomes by 54% and ensure adequate reserves held by the National Food Authority.

“With increased production, farmers will enjoy gains from their labor while consumers should enjoy lower food prices,” Mr. Laurel said. — Adrian H. Halili

Exporters batting for exemption from BoC container tracking system

REUTERS

By Justine Irish D. Tabile, Reporter

EXPORTERS said they are in talks with the Bureau of Customs (BoC) to exempt their cargoes from the Electronic Tracking of Containerized Cargo  (E-TRACC) system, saying its shipments are already tracked.

Philippine Exporters Confederation, Inc. President Sergio Ortiz-Luis, Jr. said the organization is in talks with the BoC “towards the exemption of exports from this because most of our logistics providers use GPS (global positioning system),” Mr. Ortiz-Luis told BusinessWorld via Viber.

The exporters’ comments come after the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) also flagged the redundancy of E-TRACC.

According to SEIPI President Danilo C. Lachica, the system will also cost exporters P1 million to P2 million on top of the rising logistics costs.

“Plus, there has been no record of export diversion to the domestic market because exporters need to ship these goods; otherwise, they don’t get paid. So E-TRACC is redundant and extra cost and time for exporters,” he added.

Launched in 2020 through Customs Memorandum Order No. 04-2020, E-TRACC enables real-time monitoring of inland movements of containerized goods.

With the use of a GPS-enabled tracking device, the system secures the transport of the goods and prevents diversion and tampering.

In July 2022, the BoC fully implemented E-TRACC on all containers processed with no exceptions. 

British Chamber of Commerce of the Philippines Executive Director Chris Nelson told BusinessWorld that the chamber understands why there is a request for the system to be waived for exporters, where cargo diversion is not a concern.

“The issue is obviously for imports … While we haven’t heard particularly of this system from our companies, what I would say is that we support things that strengthen and support legitimate sales,” Mr. Nelson said in a phone interview.

“In that context, we are very strong supporters of the Anti-Agriculture Economic Sabotage Act, although that’s different, it’s about supporting and making sure that genuine imports that support the economy are there,” he added.

He cited the importance of the government to take action against smuggling.

Confederation of Wearable Exporters of the Philippines Executive Director Maritess Jocson-Agoncillo told BusinessWorld that E-TRACC is redundant, noting that the industry  has measures in place to track containers.

“The system flow has been efficient … once containers are locked and released from the port of origin,” Ms. Jocson-Agoncillo said via Viber.

“We have not experienced any hijacking, or even attempts, to open containers in transit,” she added.

PHL urged to boost long-term El Niño readiness — UN agency

RENZO D SOUZA—UNSPLASH

By John Victor D. Ordoñez, Reporter

THE PHILIPPINES needs to work on long-term preparations and inter-agency communication to mitigate the impact of drought and dry spells during El Niño episodes, according to the United Nations (UN) Office for the Coordination of  Humanitarian Affairs (OCHA) Philippines.

At a Senate hearing of the environment, natural resources, and climate change committee, UN OCHA Philippines Head Manja Vidic described El Niño as a slow-onset disaster requiring a different approach to preparations compared to typhoons.

“El Niño becomes a crisis because we wait too long, but we have enough time and months to prepare for this compared to typhoons,” she said.

“It’s probably a governance issue rather than something that is purely a natural disaster issue.”

She said her office has noted some sound practices in response to El Niño, singling out the information caravans organized by Bicol local governments.

“The LGUs did go ahead and communicated with the tools it had in place and engaged with the local population,” Ms. Vidic said.

Farm damage caused by El Niño was reckoned at P15.3 billion, with 333,195 farmers and fisherfolk affected by droughts and dry spells, according to the Department of Agriculture (DA).

In its final farm damage bulletin connected to El Niño, the DA said crop losses amounted to 784,344 metric tons, spanning farmland of 270,855 hectares.

About 184,182 hectares of crops were deemed recoverable, it added.

Palawan, Iloilo, Camarines Sur and Occidental Mindoro were most affected by these dry spells and drought, the DA said.

In June the government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), announced the end of El Niño after conditions in the tropical Pacific returned to El Niño Southern Oscillation neutral levels, meaning neither El Niño nor La Niña was in effect.

Senate ratifies bicam report of farm smuggling measure

BUREAU OF CUSTOMS

THE SENATE approved and ratified on Tuesday the bicameral conference committee report on an amendment stiffening the penalties on smugglers and hoarders of agricultural products.

At a plenary session, Senator Cynthia A. Villar, who filed the Senate version of the bill, said the harmonization of Senate Bill No. 2432 and House Bill No. 9284 resulted in the inclusion of the Department of Finance in the Anti-Agriculture Economic Sabotage Enforcement Group, to be implemented when the measure becomes law.

“The reason for this is to prevent connivance between smugglers and employers of the Bureau of Customs,” she said.

“The problematic system within the Bureau of Customs is one of the reasons why RA 10845 or the original Anti-Agricultural Economic Sabotage Law… proved to be inadequate.”

The Senate approved the measure on final reading on Dec. 11, while the House of Representatives passed its counterpart bill on Sept. 27.

The bill will lower the threshold on instances of smuggled agriculture and fishery products to P1 million from P10 million for the violation to be classified as an act of economic sabotage.

Violators could face life imprisonment and a fine of thrice the value of agricultural and fishery products smuggled.

The government has been foregoing at least P200 billion in revenue each year to smuggling, Ms. Villar has said, citing government estimates.

Later Tuesday, the House of Representatives also ratified the bicameral conference committee report by voice vote. — John Victor D. Ordoñez

Livestock dev’t bill hurdles Senate on second reading

REUTERS

THE SENATE approved on second reading on Tuesday a bill seeking to develop a modernization plan for the livestock, poultry and dairy industries.

Senate Bill No. 2558, filed by Senator Cynthia A. Villar, calls for a livestock, poultry, and dairy competitiveness fund to be set up with funding from import tariffs of P7.8 billion a year for the next 10 years.

It also calls for the establishment of the Office of the Undersecretary of the National Livestock, Poultry, Dairy, and other Animals Program to oversee policy geared at boosting production in these industries.

“For the longest time, the Livestock, Poultry and Dairy sector has been left to be run by the private sector. With this Act, the government will actively support and participate in the development of the sector,” Ms. Villar said in May.

Farm output growth was little changed in the first quarter at 0.05%, amid a prolonged dry spell brought on by El Niño.

Poultry production grew 5.9% year on year during the period, slowing from 7.8% in the fourth quarter of 2023. — John Victor D. Ordoñez

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