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US Justice Department says it disrupted Russian social media influence operation

TOWFIQU BARBHUIYA-UNSPLASH

WASHINGTON — The US Justice Department said on Tuesday that it disrupted a Russian operation that used fake social media accounts enhanced by artificial intelligence (AI) to covertly spread pro-Kremlin messages in the United States and abroad.

The news comes four months before the US presidential election, which security experts widely believe will be the target of both hacking and covert social media influence attempts by foreign adversaries. Senior US officials have said publicly they are monitoring for schemes intended to disrupt the vote.

The Justice department secured court approval to seize two domain names and search nearly 1,000 social media accounts allegedly associated with the effort.

“With these actions, the Justice department has disrupted a Russian-government backed, AI-enabled propaganda campaign to use a bot farm to spread disinformation in the United States and abroad,” Attorney General Merrick Garland said in a statement.

Tuesday’s action marked the first time the United States publicly accused a foreign government of using generative AI in a foreign influence operation, according to Justice Department and FBI officials. US officials have warned that adversaries may use the growing power of AI systems to scale up efforts to spread misinformation.

The alleged operation, according to prosecutors, was organized through a private intelligence organization based in Russia staffed by Russian intelligence officers and a senior employee of the Moscow-based, government-funded news outlet Russia Today, or RT. The effort was approved and funded by the Kremlin in early 2023, according to the Justice Department.

Spokespersons for the Russian embassy in Washington and RT did not respond to requests for comment.

This private organization had designed a custom, AI-powered platform to create, control and manage hundreds of fake social accounts, which were made to look like real Americans, according to court documents.

The accounts on social media platform X have since been banned. They commonly posted pro-Kremlin talking points, including videos of Russian President Vladimir Putin, and criticized the Ukrainian government.

The United States worked with Dutch authorities on the investigation. The campaign was run from a server in the Netherlands, according to investigators. — Reuters

Pioneer continues to light the path for Filipinos as it marks Platinum Year

Pioneer Insurance Steering Committee members inaugurate Pioneer's Milestones and Achievements Exhibit. L-R: Digital Transformation and Shared Services Head Earl Ferrer, Pioneer Insurance and Surety Corp. President and CEO Betty Medialdea, Senior Advisors Ernesto Chan and Molly Uyecio, and Pioneer Group Head Lorenzo Chan, Jr.

Pioneer Insurance kicked off its 70th anniversary celebration, reinforcing its commitment to light the path forward for Filipinos, one innovation at a time.

Moving towards the future, the company’s passion to serve and innovate shines on as it continues to develop products relevant to Filipinos from all walks of life, set a global standard in inclusive insurance, mold future leaders through its Management Trainee program, create resilient communities through property coverages, and build Earth-friendly spaces through its LEED and WELL pre-certified buildings.

As part of its Platinum Year activities, Pioneer launched its Milestones and Achievements Exhibit at the Pioneer House Makati. Group Head Lorenzo Chan, Jr. opened the exhibit with a Lighting Ceremony, alongside Steering Committee members Betty Medialdea and Earl Ferrer, and Senior Advisors Ernesto Chan and Molly Uyecio.

Chan addressed employees, “The reason why we’ve done this exhibit is because we would not be here today if it weren’t for those who came before us. As you ponder where we came from, you will also ask yourselves what you will do for those who will come after you.”

Pioneer was founded in 1954 at the Quisumbing Building in Binondo, Manila, with a staff of five. Its first set of officers were Johnny Cheng as Chair, Lorenzo Chan Toh as President, and Yang Pao Wang as General Manager.

Over the years, the company wrote landmark coverages, such as the historic Thrilla in Manila featuring the heavyweight bout between Muhammad Ali and Joe Frazier in 1975. This was the precursor of Pioneer’s future involvement in sports and live events, wherein for three decades and counting, it serves as the exclusive insurer of national athletes, coaches, and trainers in the Olympics, SEA Games, Asian Games and other sporting events here and abroad.

In 2007, Pioneer was also named by PULP Magazine as the country’s live events insurer. Among the many concerts covered by the company are One Direction “On the Road Again” Tour in 2015, Madonna “Rebel Heart” Tour in 2016, Coldplay “A Head Full of Dreams” Tour in 2017, Celine Dion Live in 2018, Blackpink “In Your Area World” Tour in 2019, and more.

Its market leadership and excellence has been recognized by the Euromoney Annual Global Insurance Survey which named Pioneer as Best Insurer in the Philippines for two consecutive years in 2009 and again in 2010. In 2012, Pioneer was recognized by the Insurance Commission for its contributions to the field of microinsurance, which now counts nearly 24 million in enrollments. At present, CARD Pioneer Microinsurance, Inc. is often cited as a global benchmark for inclusive insurance.

Amidst rainy days, the insurance group stayed true to its promise as it paid claims worth P1.2 billion during Typhoon Yolanda in 2013, and P4.5 billion during Typhoon Odette in 2021. Even at the height of the pandemic, Pioneer was never far away when it paid P1.13 billion worth of COVID-19-related claims from 2020-2022.

Based on the latest annual report from the Insurance Commission, Pioneer ranks No. 1 in Aviation, Marine Hull, Microinsurance, Special Risks; No. 2 in Casualty and Fire; and No. 3 in Crime Insurance and Marine Cargo.

All these milestones and achievements are featured in the exhibit, which is one of several activities lined up for the year-long commemoration of Pioneer’s platinum anniversary. Pioneer Kwentong Malasakit was also launched on social media, a series of videos that pay tribute to its various stakeholders.

“Pioneer is at a unique time in history. We ask ourselves what more can we do to add to the roster of pioneering efforts that came before us. We want to make every moment count for the people we serve,” Chan added.

 

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BPI empowers nano-entrepreneurs through enhanced SEAL Program

Photo shows Miguel's Craft Sorbetes, recognized as one of the top 20 microenterprises in the 2023 BPI SEAL-SEGA program.

The Bank of the Philippine Islands (BPI), through its social development arm, BPI Foundation (BPIF), launches the third year of its Small Enterprise Acceleration Lab (SEAL) Program with a new track called Business Education and Growth Initiative for Nano-entrepreneurs (BEGIN).

In partnership with Bayan Academy, which offers entrepreneurship and management training, SEAL provides programs that strengthen business skills and knowledge, and provides cash grants and potential linkages. With a focus on start-ups, SEAL-BEGIN will offer learning modules that amplify business creation and growth to help nano-entrepreneurs to navigate challenges and seize digital-age opportunities.

“As we launch SEAL this 2024, we are not just continuing a program; we are nurturing a movement. We are confident that the participants of this year’s SEAL program will benefit immensely from the comprehensive training, mentorship, and support that this program offers. This aligns with our vision to help build a better Philippines — one family, one community at a time,” said Carmina Marquez, BPIF Executive Director.

BPIF first introduced the SEAL Project Series in 2022 to assist and develop interventions for micro-enterprises, nano-enterprises, and those who aspire to start their entrepreneurial journey.

In support of the Republic Act No. 11337, also known as the Startup Act, SEAL-BEGIN will provide benefits and programs that enhance, encourage, and cultivate the Philippine Startup System. The new track originated in the second year of SEAL, the Small Enterprise Growth Agenda (SEAL-SEGA), which is a program designed to identify and support start-up businesses ready to develop viable ventures.

SEAL-BEGIN is open to nano-entrepreneurs and aspirants who are at least 18 years old, are either the owner or manager of the nano-enterprise, and are involved in the business operations. The nano-enterprise must be in the initial phase of establishing its proof of concept or testing its product or service-market fit. It must have business operations for at least three months, and is building up a working capital and business infrastructure. The deadline for submission for SEAL-BEGIN is July 22, 2024.

Photo shows an interview with previous SEAL-SEGA winners Jasmeen Obatay, owner of JAO Plaque Awards; and Fhelma Malimban, owner of Bugel’s, during the SEAL-SEGA and SEAL-BEGIN launch.

For more information about BPI SEAL-SEGA and SEAL-BEGIN, please visit BPIF’s Facebook and Instagram social media pages (@bpifoundationinc) or bpisealsega.com.ph.

 

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From across the seas: the Filipino diaspora’s support for their homeland

The rising number of Filipino Americans who want to give back to the Philippines is “partially rooted in identity,” said Audie T. Vergara, executive director of Apl.de.Ap Foundation International.

“A lot of the Filipino Americans I happen to come across today have been schooled in the United States, but they really have this interest to come back here to take whatever they do — say, in Silicon Valley — to the Philippines,” he said.

Read the related article: https://www.bworldonline.com/bw-launchpad/2024/07/10/606992/migrant-pinoys-urged-to-invest-in-phl-startups/ 

 

Interview by Patricia Mirasol
Editing by Arjale Jayrie G. Queral

Samsung Electronics union in South Korea says it will strike indefinitely

SEOUL – A workers’ union at tech giant Samsung Electronics in South Korea said on Wednesday it would continue to strike indefinitely, stepping up its campaign for better pay and benefits.

The National Samsung Electronics Union (NSEU), whose roughly 30,000 members make up almost a quarter of the firm’s South Korean workforce, said it has decided to continue striking because management has shown no indication of holding talks after a strike that started on Monday.

“We haven’t spoken to management since we started the strike on Monday,” said Lee Hyun-kuk, the union’s vice president.

The union said it would extend the strike, which was initially planned to last three days through Wednesday. Mr. Lee told Reuters that the strike has disrupted production on certain chip lines such as with equipment running more slowly.

Samsung said the strike had caused no disruption during the first three days.

“Samsung Electronics will ensure no disruptions occur in the production lines. The company remains committed to engaging in good faith negotiations with the union,” the company said in a statement.

The union is becoming more vocal and seeking to be treated as an equal partner, adding to challenges at the world’s biggest memory chipmaker which is struggling to navigate competition in chips used for artificial intelligence (AI) applications.

Mr. Lee said about 6,500 workers have been participating in the strike and that the union will encourage more members to join.

Union officials have disputed reports of low participation, telling Reuters that the five-year-old body did not have enough time to educate members about the labour issues. The union held a training session on Tuesday and will conduct another on Wednesday.

Analysts said it would be difficult to verify whether the strike has disrupted production unless the union provides details of wafers and processes.

The union said it has revised demands to include a 3.5% increase in base salary and, instead of an extra day’s annual leave, a day off to mark the union’s founding. Lee said the management previously offered a 3% rise in base salary but the union wants 3.5% to better reflect inflation.

Samsung’s share price was down 0.3% while the benchmark KOSPI index was little changed as at 0423 GMT. – Reuters

Ukraine’s Zelenskiy says can’t predict Trump’s actions if elected

Ukrainian President Volodymyr Zelensky speaks at the Shangri-La Dialogue in Singapore, June 2, 2024. — REUTERS

WASHINGTON – Ukrainian President Volodymyr Zelenskiy said on Tuesday he could not predict what Donald Trump would do if he regains the US presidency in November, but the whole world, including Russian leader Vladimir Putin, was awaiting the outcome of the ballot.

Mr. Zelenskiy, speaking in Washington as world leaders gather for this week’s NATO summit, said he hoped Mr. Trump would not quit the 75-year-old NATO alliance and that America would keep supporting Ukraine in its defense against Russia’s more than two-year-old invasion.

“I don’t know (him) very well,” Mr. Zelenskiy said of Mr. Trump, adding he had “good meetings” with him during Mr. Trump’s first presidency but said that was before Russia’s 2022 invasion.

“I can’t tell you what he will do, if he will be the president of the United States. I don’t know.”

Mr. Trump, the presumptive Republican nominee for the US presidential election in November, has frequently criticized the size of US military support for Ukraine – some $60 billion since Russia’s full-scale invasion in 2022 – and called Mr. Zelenskiy “the greatest salesman ever.”

Two of his national security advisers have presented Mr. Trump with a plan to end US military aid to Ukraine unless it opened talks with Russia to end the conflict.

Mr. Trump’s dealings with Mr. Zelenskiy became the subject of his first impeachment as president by the US House of Representatives in 2019. He was accused of pressing Mr. Zelenskiy to help smear Joe Biden in return for aid, but was acquitted by the Senate in 2020.

On policy toward NATO, Trump has said he would “encourage” Russia to do “whatever the hell they want” to any alliance member that did not spend enough on defense and he would not defend them. The NATO charter obliges members to come to the defense of those who are attacked.

Mr. Zelenskiy urged US political leaders on Tuesday not to wait for the outcome of America’s November presidential election to move forcefully to aid his country, as he called for fewer restrictions on the use of US weaponry.

“Everyone is waiting for November. Americans are waiting for November, in Europe, Middle East, in the Pacific, the whole world is looking towards November and, truly speaking, Putin awaits November too,” Mr. Zelenskiy said.

“It is time to step out of the shadows, to make strong decisions … to act and not to wait for November or any other month.”

Earlier on Tuesday, President Joe Biden pledged to forcefully defend Ukraine at the NATO summit.

But Mr. Biden, 81, is reeling from 12 days of withering questions about his fitness for office as some of his fellow Democrats on Capitol Hill and campaign donors fear that he will lose the election after a halting debate performance on June 27.

Mr. Trump is leading Mr. Biden by 2.1 percentage points nationally, according to a polling average maintained by website FiveThirtyEight.

Asked about Mr. Putin’s views of Mr. Biden and Mr. Trump, Mr. Zelenskiy said cautiously: “Biden and Trump are very different. But they are supportive (of) democracy. And that’s why I think Putin will hate both of them.”

Mr. Zelenskiy’s choice of venue, the Ronald Reagan Institute, could be another sign of Ukraine’s effort to reach out to Republicans.

Andrew Weiss at the Carnegie Endowment think-tank said Kyiv has been trying to build “as many bridges to the Republican mainstream establishment as possible.”

“There’s a process underway in Kyiv of trying to think through the implications of a possible Trump return to the White House,” Mr. Weiss said.

Mr. Zelenskiy was introduced by top US Senate Republican Mitch McConnell, who lauded the Ukrainian leader and strongly supported greater assistance to Kyiv.

“They need the tools to defend themselves to impose costs on their aggressors and to negotiate from positions of strength,” Mr. McConnell said. – Reuters

From FLiRT to FLuQE: what to know about the latest COVID variants on the rise

UNSPLASH

Disclaimer: This asset – including all text, audio and imagery – is provided by The Conversation. Reuters Connect has not verified or endorsed the material, which is being made available to professional media customers to facilitate the free flow of global news and information.

 

SOURCE: THE CONVERSATION

 

by Professor, School of Biomedical Sciences and Pharmacy, University of Newcastle

We’re in the midst of a bad cold and flu season in Australia. Along with the usual viral suspects, such as influenza, RSV, and rhinoviruses (which cause the common cold), bacterial pathogens are also causing significant rates of illness, particularly in children. These include Bordatella pertussis (whooping cough) and Mycoplasma pneumoniae.

Meanwhile, SARS-CoV-2 (the virus that causes COVID) is responsible for recurring waves of infection as it continues to evolve and mutate into new variants which keep it a step ahead of our immunity.

The latest variant is nicknamed “FLuQE”, and is reportedly gaining traction in Australia and other countries. So what is there to know about FLuQE?

In recent months, you may have heard of the “FLiRT” subvariants. These are decedents of the Omicron variant JN.1, including KP.1.1, KP.2 and JN.1.7.

KP.2, in particular, significantly contributed to COVID infections in Australia and elsewhere around May.

The name FLiRT refers to the amino acid substitutions in the spike protein (F456L, V1104L and R346T). Amino acids are the molecular building blocks of proteins, and the spike protein is the protein on the surface of SARS-CoV-2 which allows it to attach to our cells. These changes in the spike protein arise from mutation – random changes in the genetic code of the virus.

SARS-CoV-2’s goal is to select mutations that produce a spike protein that binds strongly to our cells’ receptors to support efficient infection (sometimes called viral fitness) while avoiding neutralizing antibodies in our immune system (immune pressure).

The FLiRT mutations seem to reduce the ability of neutralizing antibodies to bind to the spike protein, potentially enabling the virus to better evade our immunity.

But at the same time, it appears the immune pressure which has selected for these mutations may have affected the ability of the virus to bind to our cells.

These findings are yet to be peer-reviewed (independently verified by other researchers). However, they suggest the FLiRT variants may have traded in some ability to infect our cells for a spike protein that’s more resistant to our immune system.

According to experts in Australia and internationally, what appears to have occurred with FLuQE is an additional mutation has restored fitness that may have been lost with the FLiRT mutations.

FLuQE (KP.3) is a direct descendant of FLiRT, meaning it has inherited the same mutations as the FLiRT variants. But it has an additional amino acid change in the spike protein, Q493E (giving FLuQE its name).

This means the amino acid glutamine at position 493 has changed to glutamic acid (the spike protein is 1,273 amino acids long). Glutamine is a neutral amino acid, whereas glutamic acid has a negative charge, which changes the properties of the spike protein. This could improve the ability of the virus to infect our cells.

It’s still early days for FLuQE and we don’t have peer-reviewed research on this yet. But it appears we now have (another) immune evasive virus that is also well adapted to infecting our cells. It’s no surprise, then, that FLuQE seems to be becoming dominant in many countries.

We would expect with widespread transmission of and infection with FLiRT and FLuQE variants, population immunity to these variants will mature, and in time, their dominance will be supplanted by the next immune-evasive variant.

The tug of war between our immune system and SARS-CoV-2 evolution continues. The issue we are dealing with now is vaccines don’t sufficiently protect from infection or suppress virus transmission. While they’re very good at protecting against severe disease, the virus still infects lots of people.

As well as the burden on people and health care, lots of infections means more opportunities for the virus to evolve. The more “rolls of the dice” the virus has to find a mutation that helps it evade our immune system and infect our cells, the more likely it is to do so.

Next-generation vaccines and therapies really need to boost immunity in the upper respiratory tract (nose and throat) to reduce infection and transmission. This is where infection initiates. A human challenge study, where volunteers are experimentally exposed to SARS-CoV-2, showed people who didn’t become infected had a robust anti-viral immune response in their upper respiratory tract.

To this end, there are immune-stimulating nasal sprays and nasal vaccines in clinical development. The hope is this approach will slow down the evolution of SARS-CoV-2 and the emergence of new subvariants that continue to drive waves of infection and disease.

Fortunately, so far these mutations have not generated a virus that is obviously more pathogenic (causes worse disease), but there are no guarantees this won’t happen in the future. – Reuters

Chinese carrier passes close to Philippines on way to Pacific drills, Taiwan says

PHILEMBASSY.NO

TAIPEI – Chinese aircraft carrier the Shandong passed close to the northern Philippines on its way to drills in the Pacific, Taiwan‘s defense minister said on Wednesday, as Taipei reported dozens of warplanes joining the ship for exercises.

Taiwan, which China claims as its own territory, keeps a close watch on Chinese movements given the daily military activity around the island.

Taiwan‘s defense ministry said starting around dawn on Wednesday it had detected 36 Chinese military aircraft, including J-16 fighters and nuclear-capable H-6 bombers, flying to the south and southeast of the island heading to the Western Pacific to carry out drills with the Shandong.

Speaking to reporters at parliament shortly before his ministry announced details of the latest mission by the Shandong, commissioned by China in 2019, Taiwan Defense Minister Wellington Koo said they had a “full grasp” of the ship’s movements.

“It did not pass through the Bashi Channel,” he said, referring to the waterway that separates Taiwan from the Philippines and is the usual route Chinese warships and warplanes take when they head into the Pacific.

“It went further south, through the Balintang Channel, to the Western Pacific,” Mr. Koo added, a waterway between the Philippines’ Batanes and Babuyan Islands.

China’s defense ministry did not immediately respond to a request for comment.

The Philippines military said it was concerned with the deployment of the Chinese carrier group.

“We emphasize the importance of maintaining peace and stability in the region and urge all parties to adhere to international laws and norms,” said spokesperson Francel Margareth Padilla.

The Philippines is currently involved in a stand-off with China over the disputed Second Thomas Shoal in the South China Sea.

Late Tuesday, Japan’s Self Defense Forces said they detected the Shandong along with an escort of two missile destroyers and a frigate around 500 km (310 miles) south of its Okinawa islands.

Two Japanese navy ships were observing their movements while Japanese fighter jets scrambled in response to the aircraft launched by the carrier, it said in a statement.

Taiwan has previously reported the Shandong operating near the island, including in December when it passed through the Taiwan Strait just weeks ahead of Taiwanese elections.

Taiwan holds its annual Han Kuang war games starting July 22, and China has stepped up its own activities ahead of that.

Since the start of this month, Taiwan has reported detecting a total of more than 270 Chinese military aircraft operating around the island, as well as two Chinese “joint combat readiness patrols” with warplanes and warships.

One security source, who is familiar with Chinese deployments in the region, told Reuters the better weather of the summer months was when China traditionally carries out drills, but noted the “unusual” uptick in recent movements.

“The security situation around Taiwan is worrying,” the source added, speaking on condition of anonymity as they were not authorised to comment publicly.

China has made no secret of its dislike of Taiwan President Lai Ching-te, and carried out two days of war games shortly after he took office in May.

China says he is a “separatist” and has rebuffed his repeated offers of talks. Mr. Lai rejects Beijing’s sovereignty claims, saying only Taiwan‘s people can decide their future. – Reuters

China’s coast guard says ‘allowed’ Philippines to evacuate sick person in S.China Sea

PHILIPPINE COAST GUARD PHOTO

BEIJING – China’s coast guard said it had on humanitarian grounds “allowed” the Philippines to evacuate a person who had fallen ill on a rusting warship beached on the Second Thomas Shoal located in waters claimed by both countries.

The Chinese Coast Guard said in a statement late on Tuesday that it monitored and verified the entire operation on Sunday, which its spokesperson said was at the request from relevant parties in the Philippines.

The Philippine Coast Guard (PCG) did not immediately respond to a request for comment on its counterpart’s statement. The spokesperson for the National Security Council said it has no comment for now.

The PCG, however, said on Tuesday its sailors along with the military “successfully carried out” the medical evacuation “despite numerous obstructing and delaying maneuvers” by China’s coast guard.

A month ago, the PCG accused its Chinese counterpart of blocking a medical evacuation from the warship, calling the actions “barbaric and inhumane”.

China’s foreign ministry said the same day that China will allow the Philippines to deliver supplies and evacuate personnel if Manila notifies Beijing ahead of a mission.

The Philippines has soldiers living aboard a rusty, aging warship on the Second Thomas Shoal, which was deliberately grounded by Manila in 1999 to reinforce its maritime claims.

China’s navy has clashed several times with Philippines forces seeking to resupply the grounded ship.

China claims most of the South China Sea, a key conduit for $3 trillion of annual ship-borne trade, as its own territory. Beijing rejects the 2016 ruling by The Hague-based Permanent Court of Arbitration which said its expansive maritime claims had no legal basis. – Reuters

Philippines chosen to host climate ‘loss and damage’ fund board

MANILA – The Philippines has been chosen to host the board of the “Loss and Damage” fund created by U.N. talks, marking another step towards providing financial help for countries to recover and rebuild from the impact of global warming.

Last month, the World Bank’s board approved a plan for the bank to act as interim host of the fund for four years.

Some countries, however, voiced concern that allowing the World Bank to host would give donors, including the United States that appoints the World Bank’s president, too much influence.

Philippine President Ferdinand Marcos Jr announced his country’s election from a pool of seven contenders in a post on X on Tuesday.

Hosting the board, Mr. Marcos said, “reinforces our dedication to inclusivity and our leadership role in ensuring that the voices of those most affected by climate change shape the future of international climate policies”.

The Philippines must enact legislation before it can become host and Mr. Marcos did not say when it would take on its role.

An archipelago of more than 7,600 islands, the Philippines, which also has a seat on the fund’s board, is frequently hit by typhoons and other climate-change induced disasters.

As host, Manila could focus attention on the Asia-Pacific region, where many countries struggle with limited resources, hindering their ability to respond to the effects of climate change.

Who pays for loss and damage has been among the most intractable issues at U.N. climate talks, as developed countries blamed for producing the most emissions historically have been nervous about how much of the bill for redressing damage they might face.

COP27 in Egypt in 2022 however managed to establish a U.N. “loss and damage” fund dedicated to addressing irreparable climate-driven damage from drought, floods and rising sea levels, but did not decide on detail.

Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD), said it was up to the Philippines to demonstrate political leadership.

They should demand developed countries “fulfil their historical, legal, and moral obligation to provide reparations for climate devastation,” Nacpil said in a statement. — Reuters

Factory output growth slows in May

PHILIPPINE STAR/KJ ROSALES

By Lourdes O. Pilar, Researcher

MANUFACTURING OUTPUT GROWTH eased in May as production of computer, chemical, and metal products contracted, the Philippine Statistics Authority (PSA) reported on Tuesday.

Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the volume of production index (VoPI), grew by 3.2% year on year in May.

However, May output growth slowed from the revised 6.3% in April and 6.1% logged in the same month a year ago.

It was also the slowest pace of growth in two months since the revised 5.5% decline in March.

On a month-on-month basis, the manufacturing sector’s VoPI rose by 1.5% in May from the 1.1% decline in April. Stripping out seasonality factors, factory output that month dipped by 0.03%.

For the January-to-May period, factory output growth averaged 0.9%, significantly slowing from 6.3% a year ago.

To compare, S&P Global Philippines Manufacturing Purchasing Managers’ Index stood at 54.1 in May, slightly down from 54.3 in April. A reading above 50 marks improvement for the manufacturing sector while anything below indicates deterioration.

Ser Percival K. Peña-Reyes, director of the Ateneo de Manila University Center for Economic Research and Development, said in a phone interview that manufacturing growth in May eased due to sluggish demand.

“The lethargic demand is still contending with inflation. Although it is decelerating, people can still feel it,” he said.

On the supply side, Mr. Peña-Reyes said manufacturers have also had to deal with rising costs, delays at Customs and traffic.

“All of these contributing to the easing of manufacturing. If you are to imagine the buyer’s supply and demand curves, both are shifting to the left, output unequivocally decreases, but the effect on price is ambiguous,” he added.

John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said high inflation and the peso depreciation also contributed to the easing manufacturing output.

“These contributed to making the raw materials and work-in-progress costlier, especially those that are being imported. Currency depreciation makes imported inputs to manufacturing more expensive,” Mr. Rivera said in an e-mail.

In mid-May, the peso sank to the P58-per-dollar level for the first time in 18 months or since November 2022. The peso closed at P58.52 against the dollar as of end-May, depreciating by P0.94 from its P57.58 finish as of end-April.

Inflation accelerated to a six-month high in May, driven by the faster rise in utility and transport costs. The consumer price index picked up to 3.9% year on year in May from 3.8% in April but slowed from 6.1% in the same month last year.

The PSA said the contraction in three leading industry divisions weighed on overall output, namely fabricated products, except machinery and equipment (-13.4% in May from 29.9% in April); chemical and chemical products (-17.7% from 16.6%); and computer, electronic, and optical products (-0.3% from 5.2%).

Fifteen industry divisions also saw contractions in May.

On the other hand, the manufacture of coke and refined petroleum products posted the fastest growth at 53.6% from 18.7% in April.

Average capacity utilization — the extent to which industry resources are used in producing goods — averaged 75.5% in May. This is slightly higher than 75.3% in the previous month and 73.5% in May 2023.

All industry divisions recorded an average capacity utilization rate of at least 60% for the month. The manufacture of paper and paper products recorded the slowest growth at 65%.

“Inflation tends to dampen spending, but if inflation improves, manufacturing could grow better in June,” said Mr. Peña-Reyes.

Peso may slide to P59:$1 if BSP cuts early

BW FILE PHOTO

By Luisa Maria Jacinta C. Jocson, Reporter

THE PESO may breach the P59-per-dollar level if the Philippine central bank cuts rates as early as August, Fitch Solutions’ unit BMI said.

“In our view, we think that such an early cut remains out of the question, even if price pressures ease,” Shi Cheng Low, BMI Asia country risk analyst, said in a webinar on Tuesday.

If the Bangko Sentral ng Pilipinas (BSP) cuts in August, Mr. Low said this would mean that the central bank is “practically signaling that they are giving up currency stability in exchange for economic growth.”

An August rate cut could also lead to the peso breaching the P59-per-dollar level and possibly even hitting the P60 mark, he added.

The peso had reached a record low of P59 against the dollar in October 2022, prompting BSP intervention in the foreign exchange markets and a rate hike.

BMI said the biggest barrier to the BSP’s monetary easing is currency stability.

“The Philippine peso has emerged as one of the poorest performing currencies in the region. As such, the BSP will be extremely mindful of a preemptive return to policy easing for fear of exacerbating weakness in the already weak peso,” Mr. Low said.

The peso has been trading at the P58-per-dollar range since May. The central bank has attributed the peso’s weakness to safe-haven demand for the dollar amid geopolitical tensions as well as hawkish signals by the US Federal Reserve.

“I think that currency stability will be the biggest constraint going forward and that will depend if the BSP is willing to give up on that to support the economy at least this year,” Mr. Low said.

BMI expects the BSP to only begin cutting rates in October this year for a total of 50 basis points (bps) for 2024 and 150 bps in 2025.

BSP Governor Eli M. Remolona, Jr. has said that the central bank can begin its easing cycle by August. While the BSP monitors the movements of the Fed, he has insisted its moves are independent of the US central bank.

“With the governor keeping the door open for monetary loosening in August, policy makers are holding a different view from us. They are signaling the peso weakness would not be the deciding factor to policy easing,” Mr. Low said.

“As such, the BSP could very well surprise us with a cut next month if inflationary pressures recede faster than we currently expect,” he added.

Mr. Low cited recent measures that would help further tame inflation, such as the recent executive order that slashes tariffs on rice imports.

“Our estimates show that the tariff cut can lower headline inflation by up to 1.3 percentage points over the coming months. This will, however, take some time before its full impact feeds through to rice prices,” he said.

President Ferdinand R. Marcos, Jr. last month issued an order slashing rice import tariffs to 15% from 35% until 2028 in a bid to bring down prices of the staple grain.

Meanwhile, Mr. Low also noted the impact of an August rate cut on the economy would be seen in the fourth quarter.

“If there’s a rate cut in August, then monetary transmission will go through and we’ll see some form of it or some impact of it materializing down maybe in the fourth quarter and we’ll see investment pick up once again, which obviously supports the Philippine economy.”

“But let’s just say if they cut in October, then it might be slightly too late for its impact to materialize this year at the very least,” he added.

The economy grew by 5.7% in the first quarter. The government is targeting 6-7% growth this year.

Second-quarter gross domestic product data will be released on Aug. 8.

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