HIKERS are seen at Harding Icefield in Kenai Fjords National Park, Alaska, US, July 15, 2017. — REUTERS
GLACIERS in the Juneau Icefield in southeastern Alaska are melting at a faster rate than previously thought and may reach an irreversible tipping point sooner than expected, according to a study published on Tuesday.
Researchers at Newcastle University in England found that glacier loss in the ice field, located just north of Alaska’s capital city of Juneau, has accelerated rapidly since 2010.
Glacier melt is a major contributor to rising sea levels, a threat to coastal settlements worldwide. Current rates of ice melt could result in a permanent decline of Juneau Icefield, researchers said.
“As glacier thinning on the Juneau plateau continues and ice retreats to lower levels and warmer air, the feedback processes this sets in motion is likely to prevent future glacier regrowth,” Bethan Davies, senior lecturer at Newcastle University and the study’s lead, said in a press release.
In the study, published in the journal Nature Communications, researchers found that the ice field’s volume shrank between 2010 and 2020 at twice the yearly rate recorded from 1979 to 2010.
Juneau Icefield, which runs along Alaska’s border with the Canadian province of British Columbia, has lost a little less than a quarter of its earlier ice volume, according to records going back to 1770, the researchers said. The press release did not give an estimate of when the ice field could completely disappear at its current rate of volume loss.
Every glacier in Juneau Icefield mapped in 2019 had receded relative to their position in 1770, and 108 glaciers had disappeared completely.
“Alaskan ice fields — which are predominantly flat, plateau ice fields — are particularly vulnerable to accelerated melt as the climate warms since ice loss happens across the whole surface, meaning a much greater area is affected,” said Ms. Davies.
Scientists have long warned that warming global temperatures, driven by the release of greenhouse gases from the fossil fuel industry, are eating away at glaciers and ice sheets around the world, contributing to higher sea levels that threaten populous coastal cities.
Alaska contains some of the world’s largest ice fields, including the Juneau Icefield, which ranks as the fifth largest in North America. The ice field is about 1,500 square miles, according to the US Forest Service, or about the size of Rhode Island.
The researchers believe the same conditions thinning the Juneau plateau could affect similar ice fields across Canada, Greenland, Norway and other high-Arctic locations.
Current projections suggest Juneau Icefield’s volume loss will remain consistent until 2040 and accelerate again after 2070, but the researchers believe those projections may need to be updated to reflect their study’s findings. — Reuters
SINTRA, Portugal — The US is back on a “disinflationary path,” US Federal Reserve Chair Jerome Powell said on Tuesday, but policy makers need more data before cutting interest rates to verify that recent weaker inflation readings provide an accurate picture of the economy.
Data for May showed the Fed’s preferred measure of inflation did not increase at all that month, while the 12-month rate of price increases has ebbed to 2.6%, still above the US central bank’s 2% target but on the way down after a scare in the first months of the year.
“We just want to understand that the levels that we’re seeing are a true reading on what is actually happening with underlying inflation,” Mr. Powell said at a monetary policy conference in Portugal sponsored by the European Central Bank.
“I think the last reading… and the one before it to a lesser suggest that we are getting back on the disinflationary path,” Mr. Powell said. “We want to be more confident that inflation is moving sustainably down toward 2%… before we start… loosening policy.”
Powell would not comment on when US rate cuts might begin, but acknowledged the Fed has entered a sensitive phase in its deliberations in which the risks to its inflation and employment goals “have come back much closer to balance” — meaning neither can take full priority in setting policy.
In particular, some closely watched measures of the job market suggest the US economy may be at a point where further progress on inflation will involve the sort of tradeoffs with rising unemployment that the Fed has so far avoided.
“You can’t know that with precision,” Mr. Powell said, “but it is understood that we have two-sided risks.”
The US unemployment rate has been at or below 4% for more than two years, a fact that many Fed policy makers have used to argue for patience in deciding when to cut the central bank’s benchmark policy rate.
“Given the strength we see in the economy we can approach the question carefully,” Mr. Powell said, while also noting that policy makers don’t want to keep policy too tight for too long and “lose the expansion.”
‘WARNING SIGNS’ In separate comments to CNBC, Chicago Fed President Austan Goolsbee said he felt there were “warning signs that the real economy is weakening,” and though conditions still remain strong, the Fed needed to be careful not to keep monetary policy at such a tight level longer than needed.
The unemployment rate, while low by historical standards, has risen steadily from 3.4% in April of 2023 to 4% as of May. The US Labor department will release the monthly employment data for June on Friday.
The challenge for the Fed is deciding how and when to signal that a policy change is imminent, particularly given that further progress in lowering inflation is expected to be slow.
Mr. Powell said on Tuesday that inflation is not likely to be back at the 2% target until late next year or in 2026. But he also anticipated it will have fallen to between 2% and 2.5% a year from now, which he said would be a “great outcome.”
Mr. Goolsbee and others have argued that at some point falling inflation should trigger lower interest rates to keep the inflation-adjusted “real” cost of borrowing from increasing.
US short-term interest rate futures were little changed on Tuesday, with prices continuing to imply that the Fed would deliver its first rate cut in September and a second one in December.
The Fed has kept its benchmark policy interest rate steady in the 5.25%-5.5% range since last July, and still described inflation as “elevated” in its June 12 policy statement.
Whether the Fed ends up cutting in September or winds up on a more delayed timetable will hinge on coming employment and inflation reports, including the monthly jobs report on Friday and the July 11 release of the consumer price index for June.
The Fed will hold its next policy meeting on July 30-31.
While the timing of an initial rate cut may matter little to the larger economic outcomes the Fed is seeking, policy makers are sensitive to the signal they will send by cutting rates.
They want to be sure, in particular, that the first reduction in borrowing costs becomes the start of a full monetary easing cycle that brings rates steadily down to a level where the Fed feels it is neither encouraging nor discouraging businesses and households to invest and spend.
For many officials that has been an argument in favor of being patient and waiting longer to make the first rate cut. — Reuters
Standard Chartered Bank (SCB), the oldest international bank in the country, has been helping drive the development of the Philippine economy since 1872 by striving to be an enabler of growth by supporting liquidity, shoring up investor sentiment. As a long-standing partner of the Republic of the Philippines (RoP), SCB supports efforts to accelerate digital transformation and achieve long-term sustainable and inclusive economic growth.
The bank has been a staunch partner of the RoP in advancing its commitment to sustainable development and financial inclusion. SCB was among the banks mandated as joint lead managers and joint bookrunners for the Philippines’ maiden offering of $1-billion Islamic or sukuk bonds. Early this year, the bank supported the government’s $2-billion dual tranche global bond sale. Funds raised from the 25-year sustainability bonds will support the government’s refinancing programs and expenditures in line with the Republic’s sustainable finance framework, where SCB acted as a sustainability structuring bank.
The bank acts as the Republic’s sovereign credit rating adviser since 2010 and has assisted the government in achieving positive rating actions and upgrades, resulting in strong investment grade credit ratings by both S&P and Fitch, establishing the country as a strong investment destination to offshore investors.
Recently, SCB Philippines has been recognized by prestigious institutions and publications reflecting its leadership position in delivering innovative and bespoke banking solutions in response to changing market trends and client needs.
The Asset Triple A Treasurise Awards 2024 recognized Standard Chartered as Best Service Provider as E-Solutions Partner for the third consecutive year, demonstrating the bank’s commitment to invest in platforms and capabilities to deliver optimal client experience. The bank also won Best Solution Healthcare Award for its digital solution to IDS Medical Systems Philippines, Inc. (IDSMED) for the use of Straight2Bank payment link which provides seamless online collections from various InstaPay and PESONet participating firms and Best Solution E-Commerce-Media-Technology Award for its Virtual Account solution deployed to Ksher Philippines to aid in reconciliation and ensuring all collections are accounted for and properly identified.
The bank also won Best Bank for Cash Management in the Philippines at the 2024 Global Finance’s World’s Best Treasury & Cash Management Systems & Services Awards highlighting the bank’s leadership position in transaction banking for product development, breadth of coverage and service excellence.
The bank’s Financing and Securities Services also received recognition as Best Sub-custodian Bank in the Philippines at The Asset Triple A Sustainable Investing Awards 2024 (for the 4th consecutive year) and Global Finance’s Best Sub-custodian Bank Awards 2024 (for the 5th consecutive year). These awards highlight the bank’s market leadership through mandates won, product innovation and service quality.
The bank also received the Best Sustainability Bond — Philippines Award for the RoP $1.25-billion sustainability bond issued in January 2023 from The Asset Triple A Awards 2024, testament to SCB’s leadership in bringing innovation to Philippine issuers consistent with our focus on sustainable finance.
The Philippine Dealing System Holdings Corp. & Subsidiaries (PDS Group) also recognized Standard Chartered as among the Top 4 Corporate Issue Manager/Arrangers at the PDS Awards 2024. The bank was also recognized as part of the Top 5 Fixed Income Dealing Participants. These awards highlight the bank’s contribution to the growth and stability of the Philippine financial markets.
SCB was also recognized Best in Foreign Market Coverage (First Place) for the second consecutive year at the 2023 Fund Managers Association of the Philippines, Inc. (FMAP) Awards highlighting the bank’s capabilities and commitment to serve its clients amid the changing markets.
SCB Philippines Chief Executive Officer Mike Samson reaffirms, “Standard Chartered Bank is committed to support the nation’s development as well as our clients’ growth and strategic aspirations. We will continue to leverage our unique position in the Philippines and the ASEAN region to deliver sustainable growth for all our stakeholders.”
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CHINESE AND TAIWANESE flags are seen in this illustration, Aug. 6, 2022. — REUTERS
TAIPEI – Chinese officials boarded and then seized a Taiwanese fishing boat operating near China’s coast close to a Taiwan-controlled island and took it to a Chinese port, the Taiwan coast guard said late on Tuesday in a further escalation of tensions.
China views democratically governed Taiwan as its own territory and has ramped up pressure on Taipei since President Lai Ching-te took office in May, a man Beijing accuses of being a “separatist”.
The fishing boat was operating near the Taiwan-administered Kinmen islands, which sit next to the Chinese cities of Xiamen and Quanzhou, on Tuesday night when it was boarded and seized by two Chinese maritime administration boats, Taiwan’s coast guard said.
Taiwan sent it own coast guard ships to assist and broadcast warnings asking China to release the fishing boat, but China’s ships broadcast back saying not to interfere, Taiwan’s coast guard said in a statement.
Taiwan’s ships then backed off to avoid a conflict and the Taiwanese fishing vessel was then taken to a Chinese port, it added.
China’s Taiwan Affairs Office did not answer calls seeking comment outside of office hours.
Chinese maritime enforcement and coast guard ships have been regularly operating around Kinmen since February after two Chinese fishermen died trying to flee Taiwan’s coast guard. – Reuters
Magic, a US startup developing artificial-intelligence models to write software, is in talks to raise over $200 million in a funding round valuing it at $1.5 billion, just several months after its last capital raise, three sources told Reuters.
Investors including Jane Street are expected to participate in the round, which could triple Magic’s valuation from its last round, despite earning no revenue and having no product for sale, according to sources who requested anonymity to discuss private matters.
The startup, which has about 20 employees, was last valued at $500 million after the previous February fundraising, according to PitchBook data. It has raised $140 million since it was founded in 2022, from backers including Nat Friedman and Daniel Gross’ NFDG Ventures, as well as Alphabet’s CapitalG.
Magic declined to comment. Jane Street did not respond to a request for comment.
Magic’s new round is the latest fundraising in one of the most promising applications of generative AI technologies. Software developers represent a significant cost for tech companies, and tools that can generate code or assist developers in more efficient programming are highly attractive.
The early success of Microsoft’s GitHub has further stoked investors’ enthusiasm. In April, coding-assistant startup Augment raised $252 million, while Cognition, developer of the AI-powered coding assistant Devin, secured $175 million in a round led by Founders Fund at a $2 billion valuation.
Investors say they see GitHub Copilot’s success as proof of how large the market is. GitHub reported 40% higher year-over-year revenue in the latest quarter, driven by Copilot, which has 1.3 million paid subscribers.
“The success of Microsoft has validated the commercial market for AI code assistants, leading everyone to believe there is clear market demand and a customer willingness to pay for the right product. The opportunity is enormous, with likely multiple winners in this category,” said Brian Dudley, partner at Adams Street Partners.
While commercially available products like GitHub Copilot or OpenAI’s ChatGPT can suggest how to complete lines of code, the next frontier for coding assistants is to design and write entire software applications without human help.
Magic and a few other startups are trying to achieve this by training their own large language models for coding-specific tasks. This effort is cost-intensive, however, for purchasing data, chips and electricity.
Magic plans to spend its funding on improving its own models that support long-context windows, which refer to AI systems that can process more data in one query, the sources added.
Magic’s ability to understand and process a large amount of context at once is due to an innovative design that goes beyond the traditional “transformer model” commonly used in large language models such as OpenAI’s GPT models, according to one of the sources.
Poolside AI, a Paris-based startup that is taking a similar approach to Magic, is in talks to raise $450 million at a $2-billion valuation, TechCrunch reported in June. Poolside also has no commercially-available products. – Reuters
MABINI, Philippines – Green campaigners in a diving resort in the Philippines have come up with a novel way to clean up the town’s shores – offering to swap a bag of rice for every sack of trash gathered by local residents.
Mabini in Batangas province is known for its vibrant corals and marine biodiversity, but a rising tide of plastic pollution poses an increasing threat to marine animals such as sea turtles, said volunteer Giulio Endaya.
“They’ve been known to eat straws and plastic bags, and the fish also eat microplastics that have been broken down in the shore,” Mr. Endaya said.
But since the rice-for-trash program began nearly two years ago, more than 4.3 metric tons (9,400 pounds) of plastic waste have been collected, he added.
In turn, 2.6 tons (5,700 pounds) of rice have been distributed. The rice is handed out in 1-kg bags (2.2 pounds) – enough to meet a small family’s daily needs.
Private donors and small companies contribute funding to the program, which also helps low-income families reduce their food bills following a sharp rise in rice prices in recent years.
“In a month I need four-and-a-half sacks of rice, now all I have to buy is two sacks, which is a big help,” resident Janeth Acevedo, 46, said as she sorted through trash that she had gathered.
The Philippines is the world’s largest contributor to plastic waste in the ocean, accounting for 36% of the global total, according to an updated April 2022 report by the Our World in Data project at the University of Oxford. – Reuters
It’s the dawn of a new era for OPPO, one of the country’s leading global smart device brands, as it welcomes its newest AI Phone, the OPPO Reno12 Series 5G on July 12.
Coming in two variants, the OPPO Reno12 5G and OPPO Reno12 Pro 5G, the newest addition to the brand’s series of Portrait Experts promises to deliver cutting-edge and intuitive AI technology, in line with the company’s goals of making the AI smartphone experience accessible to more Filipinos.
AI Portrait: The Future-Forward Portrait Expert
The OPPO Reno12 Series 5G packs exciting AI imaging features such as the upgraded AI Eraser 2.0, which now has a “Remove People” capability for easier and faster removal of photobombers. This is on top of improved accuracy for Smart Lasso and Paint Over options from the initial introduction of the feature last April in the OPPO Reno11 Series 5G. The OPPO Reno12 Series 5G also features AI Studio, a pre-installed app that lets you transform any photo of yourself into your own digital avatar or profile picture with a variety of creative filters and likenesses to choose from.
Living up to the Reno Series’ renowned photography standard, the OPPO Reno12 5G boasts a 50MP Sony LYT-600 Sensor with an All Pixel Omni-Directional PDAF and OIS for its main camera while the OPPO Reno12 Pro 5G features a 50MP telephoto portrait camera.
Both selfie cameras of the OPPO Reno12 5G (32MP) and OPPO Reno12 Pro 5G (50MP) are equipped with advanced AI Portrait capabilities that support both autofocus and Portrait Mode, allowing users to switch between different zoom levels to frame the perfect shot. The Natural Tone feature of both phones will intelligently adjust exposure based on the scene, which will help provide more realistic lighting effects and skin tones for individual and group photos.
AI LinkBoost: Seamless Connectivity Anywhere, Anytime
The OPPO Reno 12 Series 5G is set to redefine connectivity standards with AI LinkBoost, a next-generation proprietary communication technology developed by OPPO. It features a 360º Surround Antenna solution consisting of nine individual antennas that can provide robust connectivity, even in the most challenging scenarios. Moreover, its BeaconLink technology enhances Bluetooth uplink capabilities by 300%,enabling device-to-device voice calls over Bluetooth at a distance of up to 200 meters in a completely disconnected environment.
As proof of the AI LinkBoost’s capability to enhance connectivity, OPPO collaborated with Smart Communications to put the OPPO Reno12 Series 5G in a series of trials including areas with weak signal, network switching, crowded area and recovery tests. OPPO Reno12 5G and OPPO Reno12 Pro 5G gave impressive results and bested competing brands in all four (4) categories.
Space-Craft inspired and Classic Design
The OPPO Reno12 Series 5G embraces the future with its design and colorways. Its space-craft inspired and metallic design gives a futuristic vibe to the phones while still maintaining a classic feel, making it a trendy phone for all ages. The OPPO Reno12 5G comes in Astro Silver, Sunset Pink, and Matte Brown while the OPPO Reno12 Pro 5G comes in Nebula Silver and Space Brown.
Prepare to enter your AI Era with OPPO! To know more about the OPPO Reno12 Series 5G, visit OPPO Philippines’ official website at www.oppo.com.ph and Facebook page.
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The main office of the Bangko Sentral ng Pilipinas in Manila. — BW FILE PHOTO
THE BANGKO SENTRAL ng Pilipinas (BSP) may delay its easing cycle amid continued risks to the inflation outlook, the peso’s depreciation and a hawkish US Federal Reserve, analysts said.
“We expect BSP to start its cutting cycle only after the Fed (i.e., in October), which is when we also expect inflation to be more entrenched within BSP’s 2-4% target,” Nomura Global Markets Research said in a report.
According to Nomura data, the Philippines was among the top countries facing “underlying inflationary pressures” in Asia, second only to Singapore.
Nomura sees the BSP cutting rates by 50 basis points (bps) this year and another 100 bps in 2025.
The Monetary Board only has three policy review meetings left for the year — Aug. 15, Oct. 17 and Dec. 19.
Citi economist for the Philippines Nalin Chutchotitham said there is a chance the BSP will have a “slower” easing cycle.
“In any case, we note the risk of slower rate cuts, which most likely depend on the speed of inflation decline, the timing of the Fed’s rate cuts and potential depreciation pressure on the peso,” she said in a commentary.
Fed officials earlier signaled the possibility of rate cuts being pushed back to as late as December.
The peso has been trading at the P58-per-dollar range since May, when it sank to the level for the first time since November 2022.
However, Citi still forecasts that the BSP will begin cutting rates by August for a total of 75 bps this year.
“We continue to maintain our call for 25-bp rate cuts in August, October, and December 2024, followed by 25-bp rate cuts in February, May, and August 2025 as our base case,” she said.
Citi said that weaker-than-expected growth will also pave the way for reducing rates.
“Negative output gap projection supports monetary easing. While growth has been resilient so far, first-quarter 2024 gross domestic product (GDP) growth at 5.7% was below market’s expectation,” Ms. Chutchotitham said.
The government is targeting 6-7% growth this year.
Meanwhile, Diwa C. Guinigundo, the country analyst for the Philippines of GlobalSource Partners and former BSP deputy governor, said he sees just one rate cut by the BSP this year.
“One rate cut is therefore more likely, as the forward guidance has been quite confirmatory so far,” he said in a brief, though did not specify the timing of the cut.
“A second reduction in November or December is, as usual, data-driven both in terms of actual and projected inflation rates in the next two years. The balance of risks would also be an important metric for the BSP,” he added.
Mr. Guinigundo also said June inflation could breach the BSP’s 2-4% target amid higher food prices and the impact of the peso depreciation.
“Higher domestic production of basic commodities like grains and meat and timely importation in case of some shortfall would be key to sustained stabilization of price pressures and inflation. Non-monetary measures are important complementary policy intervention,” he said.
Inflation likely settled at 3.9% in June, based on the median estimate in a BusinessWorld poll of 14 analysts conducted last week. This would mark the seventh straight month that inflation settled within the BSP’s 2-4% target. June inflation is set to be released on Friday (July 5).
“Although difficult to pin down, a good computation of the country’s output gap will also help in ensuring that an early or more easing would not dislodge inflation expectation and add inflationary pressure to an otherwise manageable inflation scenario,” Mr. Guinigundo said.
BSP Governor Eli M. Remolona, Jr. has said that the central bank can begin policy easing as early as August.
He signaled the BSP can cut rates by a total of 50 bps this year — a 25-bp cut in the third quarter and another in the fourth quarter. — Luisa Maria Jacinta C. Jocson
SENATOR Juan Edgardo M. Angara is set to take over the Department of Education amid a learning crisis in the Philippines. — PHILIPPINE STAR/WALTER BOLLOZOS
By Kyle Aristophere T. Atienza, Reporter
MALACAÑANG on Tuesday named Senator Juan Edgardo M. Angara as the new secretary of the Department of Education (DepEd) as the Philippines faces a learning crisis spurred by the pandemic and decades-old bureaucratic inefficiencies.
Mr. Angara will take over the DepEd after Vice-President Sara Duterte-Carpio’s resignation from the post takes effect on July 19, the Presidential Palace said in a press release.
The Palace recognized Mr. Angara for pushing “significant educational reforms” since joining the Senate in 2013, including a law that added two more years to secondary education in a bid to make Filipino students “globally competitive.”
“With a Master of Laws from Harvard University, a Bachelor of Laws from the University of the Philippines, and a Bachelor of Science in Economics from the London School of Economics, his background positions him well to lead DepEd,” the Palace said, quoting President Ferdinand R. Marcos, Jr.
Mr. Angara was endorsed by the Coordinating Council of Private Educational Associations and the Philippine Association of Colleges and Universities. He was also included in the Philippine Business for Education’s (PBEd) short list of candidates for the position.
PBED said his experience as commissioner of the Second Congressional Commission on Education (EDCOMM2) “will bolster our chances of addressing the learning crisis effectively.”
Mr. Angara, who was among the legislators who pushed for the creation of EDCOMM2, said he’s committed to working with “all sectors of society, including my predecessor, Vice-President Sara Duterte, to ensure that every Filipino child has access to quality education.”
“I look forward to building upon her accomplishments,” he said in a statement.
Ms. Duterte-Carpio left the education in a poor state, with Filipino students faring poorly in global education assessments.
Filipino students were still among the world’s weakest in math, reading and science, according to the 2022 Program for International Student Assessment (PISA), with the Philippines ranking 77th out of 81 countries and performing worse than the global average in all categories.
In a recent report on PISA 2022 earlier this month, the Organization for Economic Cooperation and Development said 15-year-old Filipino students also ranked 63rd out of 64 countries in terms of creative thinking.
Nine in 10 Filipino students aged 10 can’t read basic text, according to a 2022 World Bank report.
“These results highlight the urgent need for an experienced leader who will be able to transform and revive the Philippine education system,” the Makati Business Club (MBC) said in a statement as it welcomed Mr. Angara’s appointment.
“A well-educated population is key to creating a competitive workforce that will be able to keep up with rapid technological developments given the acceleration of artificial intelligence,” it added.
MBC said the new Education chief should ensure that elementary and high school principals and teachers are equipped with literacy, technical, and character skills needed to make Filipino children responsive to emerging challenges.
Ms. Duterte-Carpio had launched efforts to review the K-12 program that Mr. Angara championed in 2013, citing its “congested curriculum” and its failure to produce job-ready graduates.
The review was still unfinished when Ms. Duterte resigned from her post on June 19 amid the growing political divide between her family and the Marcos administration.
As EDCOMM 2 commissioner, Mr. Angara had promised a comprehensive review of the program amid public pressure to either revise or scrap it.
REFORMS NEEDED Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said appointing a politician to the Education department could “lead to neglect of long-term educational reforms that require sustained effort and do not provide immediate political benefits.”
“Politicians often operate within short election cycles and may prioritize policies that yield immediate, visible results,” he said in a Facebook Messenger chat. “The question is: Will Angara give up his political ambitions upon acceptance of this position?”
David Michael M. San Juan, a professor at De La Salle University and convener of Professionals for a Progressive Economy, urged Mr. Angara to apply a “more bottom-up approach” to the education sector and veer away from the “usual top-down imposition of policies.”
“He’s an advocate of upgrading teachers’ salaries. Teachers’ organizations have known him to be receptive to dialogue on education sector issues,” he said via Messenger chat. “I hope that his experience and network as a legislator help DepEd secure the necessary resources to help resolve our education crisis.”
Some groups critical of the Marcos administration have welcomed Mr. Angara’s appointment but said he should address key issues overlooked by the previous DepEd leadership.
ACT Teacher Party-List Rep. France L. Castro said the incoming DepEd chief should tackle education issues head-on including a comprehensive reform of the K-12 program and “long-standing” demands of teachers and education support personnel.
“He must prioritize the improvement of working conditions, salaries, and benefits of our teachers and education support personnel,” she said in a statement. “These frontliners in education have long been calling for just compensation and better support systems.”
Gabriela Women’s Party-list Rep. Arlene D. Brosas said Mr. Angara should reconsider his support for a bill seeking mandatory military training for college students and should put focus on the shortage of classrooms and learning materials.
The classroom shortage stood at 91,000 when Ms. Duterte assumed office in July 2022, but a year later, it rose to 159,000.
“The change in leadership at DepEd must not be mere musical chairs,” Ms. Brosas said.
The Liberal Party called on Mr. Angara to ensure a comprehensive review of the K-12 program and “uphold the integrity of our educational institutions.”
People cross the street in Caloocan City, April 29, 2024. — PHILIPPINE STAR/ MIGUEL DE GUZMAN
THE PHILIPPINES is unlikely to achieve the government’s goal of becoming an upper middle-income country by 2025, analysts said.
Analysts said Philippine gross domestic product (GDP) needs to expand by at least 6% annually in the near term to ensure a significant growth in Filipino incomes.
“The Philippines can still become an upper middle-income country if it grows by 6-6.5% every year for the next two to three years,” University of Asia and the Pacific Senior Economist Cid L. Terosa said in an e-mail.
The Marcos administration is aiming to achieve upper-middle income status for the country by 2025, but this may take longer as the World Bank raised the income classification levels again.
To become an upper middle-income country, the Philippines now needs to have an estimated gross national income (GNI) per capita of $4,516 to $14,005. This is higher than the previous range of $4,466 to $13,845.
According to the World Bank’s latest income classification data, the Philippines remained a lower middle-income country with a GNI per capita of $4,230 in 2023, higher than $3,950 in 2022.
The World Bank now classifies a country as lower middle-income if the GNI per capita level is at $1,146 to $4,515. This is higher than the $1,136 to $4,465 level set last year.
The World Bank computes a country’s GNI through the Atlas method, which serves as the basis of its income classifications — low, lower-middle, upper-middle and high. GNI refers to the total amount of money earned by its residents both inside and outside its borders.
“Upper middle-income status is just a number but there are strong reasons to doubt if the Philippines will achieve even that in 2025,” IBON Foundation Executive Director Jose Enrique A. Africa said citing the economy’s slowing growth over the past year.
“This continues a general slowdown that actually started in 2017 and was momentarily camouflaged by the pandemic lockdowns, contraction and rebound,” he said in a Viber chat message.
Last week, National Economic and Development Authority Secretary Arsenio M. Balisacan said the country can reach the upper middle-income status by late 2025 or early 2026.
The Philippines has been classified as a lower middle-income country since 1987.
“In a way, the administration has implicitly recognized that it won’t reach upper middle-income as scheduled when it lowered the growth target in April,” Filomeno S. Sta. Ana III, executive director and co-founder of Action for Economic Reforms, said in a Viber chat message.
Economic managers are targeting 6-7% GDP growth this year.
Earlier, the World Bank has said that it may take up to three years before the Philippines can reach the upper middle-income level.
“To do this, the government should raise productivity and increase the number and quality of jobs. In this regard, the country should prioritize infrastructure, institutional integrity and efficiency, education, and technology,” Mr. Terosa said.
Mr. Sta. Ana said the government should focus on addressing constraints to economic growth, such as elevated inflation, tight fiscal space, and high power rates.
“(The) administration’s time is eaten up by too much politicking, which has also distorted economic policy making,” he said.
For Mr. Africa, reaching upper middle-income status does not guarantee the country’s situation will improve.
“The Philippines cannot but eventually reach upper middle-income status — population growth alone will ensure that this will happen sooner or later. But this is just an aggregate number and won’t mean that chronic poverty for the poorest, bloating disguised joblessness or worsening inequity have been resolved. That aggregate number of GNI or GDP per capita will hide all sorts of development sins,” he said.
Other lower middle-income economies in Southeast Asia include Cambodia, Laos, Myanmar and Vietnam.
Indonesia, Malaysia and Thailand are classified as upper middle-income countries, while Singapore is considered a high-income economy. — Beatriz Marie D. Cruz
THE PHILIPPINES will continue to post large deficits for the current account and budget this year due to an expected increase in rice imports and infrastructure spending, Nomura Global Markets Research said.
“We expect the current account deficit (CAD) to remain large and fiscal consolidation targets to be challenging this year,” it said in a report.
“In our view, prioritization of infrastructure projects under the ‘Build Better More’ program and a substantial reduction of rice import tariffs will result in the current account deficit remaining large, make fiscal consolidation more challenging and could imply persistence in currency weakness.”
The government is aiming to spend 5-6% of gross domestic product (GDP) on infrastructure annually. The Marcos administration has approved 185 infrastructure flagship projects valued at P9.55 trillion.
“The upshot is a still-large CAD, which we forecast at 2.7% of GDP in 2024, well above the pre-pandemic (2016-2019) average of 1.1% and reflecting, in part, rising capital goods and raw materials imports due to infrastructure implementation,” Nomura said.
The central bank projects a $4.7-billion current account deficit for 2024, equivalent to 1% of GDP.
The current account deficit stood at $1.7 billion in the first quarter, equivalent to 1.6% of GDP.
Meanwhile, Nomura also sees the National Government’s (NG) fiscal deficit reaching 5.9% of GDP this year. This is slightly higher than the government’s deficit ceiling of 5.6% of GDP, equivalent to P1.48 trillion.
Nomura said its higher deficit-to-GDP forecast is due to the Philippine government’s “challenging” fiscal targets.
“Our recent discussions with officials suggest the risk of a repeat of last year’s underspending is low, thanks to catch-up plans and recent budget reforms,” it added.
Latest data from the Treasury showed that the NG’s budget deficit in the January-May period widened by 24.06% to P404.8 billion.
The Budget department last month tasked underspending government agencies to submit “catch-up plans” to address low budget utilization.
Meanwhile, Nomura said that the recent reduction in rice import tariffs will also contribute to the twin deficits.
“Food importation will remain a recourse of the government to increase domestic supply amid continued weather-related risks and now likely higher rice import demand due to lower tariffs,” it said.
President Ferdinand R. Marcos, Jr. last month signed Executive Order No. 62, which slashed tariffs on rice imports to 15% from 35% previously, until 2028.
The Department of Agriculture expects rice imports to hit 3.9 million metric tons (MMT) this year, while the US Department of Agriculture expects imports to reach 4.6 MMT.
“The tariff cut also implies some forgone fiscal revenues of about 0.05% of GDP, by our estimates,” Nomura said.
The Finance department earlier estimated that foregone revenues from the tariff cut could reach up to P22 billion.
Due to the tariff cut, Nomura also cut its inflation forecast to 2.8% this year from 3.7% previously. The BSP expects full-year inflation to settle at 3.3%.
The government’s efforts to ramp up infrastructure spending as well as the recent tariff cut may also lead to “persistent foreign exchange (FX) weakness.”
“Relatively large twin deficits under BSP’s flexible market-determined FX regime could imply persistence in currency weakness,” it added.
The peso closed at P58.795 against the dollar on Tuesday, weakening by 14.5 centavos from its P58.65 finish on Monday.
The peso has been trading at the P58-per-dollar level since May. — Luisa Maria Jacinta C. Jocson
Photo from the Bangko Sentral ng Pilipinas Annual Report 2023
A central bank needs to accomplish a few things in its service to the nation: among which are monetary policy, which involves controlling the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, managing employment levels, maintaining economic stability; the regulation and supervision of banks and other financial institutions; and acting as the banker, financial advisor, and fiscal agent for the government.
Additionally, central banks manage foreign currency reserves to stabilize the national currency and ensure liquidity, and they often serve as lenders of last resort during financial crises to maintain confidence in the financial system.
In celebrating the 31st anniversary of the Bangko Sentral ng Pilipinas (BSP), reflecting on its history is essential to appreciating its contributions to the country. From navigating economic crises to implementing forward-thinking monetary policies, the BSP has played a crucial role in shaping the financial landscape of the Philippines and promoting sustainable economic growth, serving as a true bulwark to economic progress.
When the Filipinos first conceptualized the BSP, it came as part of the processing of the Hare-Hawes Cutting bill, the Philippine independence bill approved by the US Congress. But it was not until after the Japanese occupation did the country first see the concept come to life. Until then, the country’s monetary system was administered by the Department of Finance and the National Treasury.
In 1946, after the Philippines fully gained its independence, President Manuel Roxas tasked Finance Secretary Miguel Cuaderno, Sr. to draft a central bank charter. The task became an imperative a year later as a result of the findings of the Joint Philippine-American Finance Commission, which studied Philippine financial, monetary and fiscal problems in 1947, recommending a shift from the dollar exchange standard to a managed currency system.
Republic Act No. 265 officially established the Central Bank of the Philippines (CBP) on Jan. 3, 1949. This action was crucial in the changeover to a controlled currency system from the old dollar exchange standard.
The CBP underwent several transformations to better address the country’s economic needs. In 1972, then President Ferdinand E. Marcos issued Presidential Decree No. 72, which expanded the bank’s authority to regulate the entire financial system. Further amendments in 1981 strengthened the financial system, increasing the CBP’s capitalization from ₱10 million to ₱10 billion.
The modern BSP, as Filipinos know it today, was established on July 3, 1993. A month before, then President Fidel V. Ramos signed Republic Act No. 7653, the New Central Bank Act, into law in compliance with a 1987 Constitutional mandate.
(Front row, from left) Asian Development Bank Senior Financial Sector Specialist Kelly Hattel, Philippine Space Agency Deputy Director-General Denis F. Villorente, BSP Deputy Governor Mamerto E. Tangonan, Monetary Board Member Rosalia V. De Leon, Deputy Governor Chuchi F. Fonacier, Assistant Governor Lyn I. Javier, Department of Information and Communications Technology’s National Broadband Program Project Director Antonio Edward E. Padre, BSP Managing Director Eugene C. Teves, Deputy Director Alona H. Isidro, Bank Officer Ma. Ciefrel T. Desquitado, (second row, second from left) BDO Network Bank, Inc. First Vice-President Norman Vic C. Aycocho and the participants of the Rural Bank Strengthening Program Technology and Innovation Forum at the BSP Head Office in Manila last May 31 — Photo from bsp.gov.ph
The fundamental goal of the BSP, an autonomous monetary institution that will be established in accordance with the law, is to maintain price stability as the previous Central Bank charter simply made reference to this goal in passing. Additionally, the Bangko Sentral now has fiscal and administrative autonomy granted by law, which the previous Central Bank did not.
Now, the BSP maintains its duty to promote and maintain price stability, while creating a strong financial system, and a safe and efficient payments and settlements system conducive to a sustainable and inclusive growth of the economy. All this under a vision of becoming recognized globally as the Philippines’ central monetary authority and primary financial system supervisor that supports a strong economy and promotes a high quality of life for all Filipinos.
And throughout its history, the BSP has been successfully recognized as such for its regulatory excellence and initiatives in financial literacy and inclusion. For instance, in 2013, it was named the Best Macroeconomic Regulator in the Asia-Pacific Region by The Asian Banker. It got this recognition once more in 2017.
Most notably, the BSP was acknowledged at the Asian Banker Leadership Achievement Award Virtual Ceremony 2020 as the Best Systemic and Prudential Regulator in Asia-Pacific, as part of The Asian Banker Regulation & Supervision Awards. This comes as an achievement, proving the central bank’s undeniable service as a guardian of financial stability during the COVID-19 crisis.
“BSP has focused on prudent oversight of financial institutions to ensure financial stability amid increased uncertainty. The prudential measures aim to enable the financial system to assist micro, small and medium enterprises (MSMEs) and large enterprises to carry on businesses during the COVID-19 crisis and hasten recovery and sustainability of their operations,” The Asian Banker wrote.
Bangko Sentral ng Pilipinas (BSP) Research Academy and the Department of Agriculture’s (DA) Agricultural Credit Policy Council (ACPC) launched the regional public information campaign on the “2022 Countryside Bank Survey” report in Naga City on June 4. Photo shows Agricultural Credit Policy Council Director Magdalena Casuga, BSP Principal Researcher Dr. Veronica Bayangos, Regional Director Tomas Cariño, and Researchers Ferdinand Co (front row, seventh to tenth from left) and Jade Eric Redoblado (third from right). — Photo from bsp.gov.ph
“It has served as a guardian of financial stability during the COVID-19 crisis and implemented prudential relief measures to assist BSP supervised financial institutions (BSFIs), and support households and business enterprises. The measures serve to complement the BSP’s existing regulatory relief policies and set a uniform and systematic approach in granting regulatory relief for banks.”
Furthermore, the BSP has been recognized for implementing appropriate strategies to address the increasing demand for digital channels in its efforts for digitizing the Philippine economy.
During the pandemic, the BSP established regulations to guarantee retail clients’ access to official financing channels and to encourage and heavily utilize information technology for financial operations. The BSP also loosened know-your-customer (KYC) regulations in order to make official funding channels more accessible. Meanwhile, to effectively control the rising number of financial crimes and cyberattacks due to digitization, it advised BSFIs to remove fees and charges for using online banking or e-money and to implement adequate strategies to accommodate the growing demand for digital channels.
BSP Governor and Financial Stability Coordination Council (FSCC) Chairman Eli M. Remolona, Jr. (third from left) led the launch of the 2023 Financial Stability Report (FSR) at the BSP head office in Manila last Feb. 13. Also in photo are members of the FSCC Executive Committee, namely (from left) SEC Commissioner Kelvin Lester K. Lee, PDIC President Roberto B. Tan, SEC Chairman Emilio B. Aquino, PDIC Senior Vice-President Sandra A. Diaz, and FSCC Technical Secretariat Head and BSP Senior Assistant Governor Johnny Noe E. Ravalo. — Photo from bsp.gov.ph
Benjamin E. Diokno, who served as BSP Governor at the time, in his acceptance speech said: “The BSP continues to be front and center of the Philippines’ COVID-19 economic response by ensuring ample liquidity in the financial system, providing regulatory relief to banks and implementing policies to assist Filipino businesses and households weather and recover from the crisis.”
Towards a shared prosperity
In a speech in March, BSP Governor Eli M. Remolona, Jr. noted three challenges the BSP is facing this year: the challenge of monetary policy, digitization, and deepening the country’s capital markets.
The central bank head addressed the complexities of managing monetary policy in an economy increasingly affected by supply shocks. Unlike the past, today’s economy faces frequent disruptions from oil, food, and fertilizer price surges. These shocks have driven inflation to peak at 8.7% in January 2023, the highest in 14 years, although it has since been reduced to 3.4% due to effective monetary measures. Mr. Remolona emphasized the challenge of managing second-round effects, where initial price hikes lead to broader inflation that is much slower to recede. He hopes that by targeting inflation within a 2%-4% range, the central bank has anchored expectations, making these persistent second-round effects easier to handle.
Monetary Board Chairman and Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. (fourth from left) leads the ceremonial toast of the annual reception for the banking community hosted by the BSP at the Fort San Antonio Abad in Manila last January. — Photo from bsp.gov.ph
In addition to stabilizing inflation, Mr. Remolona outlined ambitious plans to further the BSP’s plans to digitalize the country’s banking and payment systems, with key initiatives like the Open Finance Framework, which enables banks to use APIs (application programming interfaces) for better service integration, and the promotion of digital banking despite cultural hurdles in loan collection.
“Open finance means working with application programming interfaces (APIs). These platforms connect you to other financial services and connect your customers to other financial services. Then, you have to figure out how to integrate that platform into your system,” he said.
“But banks now are working with 50 [to] 100 APIs doing many different things,” he continued. “Our role here is to make sure that when you use your customers’ data, you use it with their permission. They still own the data; you do not own that data. Your customers own their data and want to ensure that when you use that data with APIs or other platforms, you get their permission first, and then you can do whatever you like.”
BSP Assistant Governor Arifa Ala (center), one of WOMANi’s “Most Influential Women in Islamic Business and Finance,” receives award from (from left) Professor Humayon Dar, chairperson of the WOMANi Programme and director-general of the Cambridge Institute of Islamic Finance, and Pakistan’s Finance Minister Dr. Shamshad Akhtar. — Photo from bsp.gov.ph
He also noted that a regulatory sandbox will allow innovators to test new concepts with regulatory guidance, minimizing uncertainties. He also acknowledged the growing influence of generative AI, advocating for human oversight to prevent errors.
“The regulator is there to help you and tell you what the regulatory implications might be if you succeed. We are not there to judge whether you will succeed or not. We are just there to help you. If you grow, you know what you are getting into regarding regulations. It is about minimizing regulatory uncertainty. If you have a new idea, enter a sandbox. We will assign you a regulator. We will scold you, ‘Bawal ’yan’ (‘That’s not allowed’); but that is for your own good.”
Mr. Remolona highlighted efforts to extend digital payments to the unbanked through e-wallets and simplified accounts, aiming to integrate more people into the formal financial system. He also introduced Project Nexus, an ASEAN initiative to connect fast payment systems across member countries by 2026, facilitating efficient cross-border remittances.
Turning to capital markets, he stressed the need for a reliable benchmark yield curve to enhance liquidity and stability. He proposed adopting a swaps curve, which has proven effective in Europe, to address existing market issues.
For another measure, he called for a more inclusive corporate bond market, urging for a range of credit ratings beyond predominantly triple-A issues. Furthermore, the central bank governor discussed the importance of attracting passive investment flows by resolving barriers such as withholding taxes and improving the country’s inclusion in major global indices.
Mr. Remolona’s vision is clear: adapt monetary policy to manage supply shocks effectively, digitalize the financial system to enhance inclusion and efficiency, and deepen capital markets to attract diverse investments. His strategic approach aims to fortify the Philippine economy against future challenges while fostering sustainable growth and financial innovation. — Bjorn Biel M. Beltran
The bank also won Best Bank for Cash Management in the Philippines at the 2024 Global Finance’s World’s Best Treasury & Cash Management Systems & Services Awards highlighting the bank’s leadership position in transaction banking for product development, breadth of coverage and service excellence.
Mr. Remolona’s vision is clear: adapt monetary policy to manage supply shocks effectively, digitalize the financial system to enhance inclusion and efficiency, and deepen capital markets to attract diverse investments. His strategic approach aims to fortify the Philippine economy against future challenges while fostering sustainable growth and financial innovation. — Bjorn Biel M. Beltran