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Gazans strive to study as war shatters education system

Palestinian students study in a makeshift tent camp in Khan Younis, southern Gaza Strip, April 28, 2024. — REUTERS

AL-MAWASI, Gaza — Pupils sitting cross-legged on the sand take classes in a tent near Khan Younis in Gaza. Two sisters connect online to a West Bank school from Cairo. A professor in Germany helps Palestinian students link up with European universities.

After watching their schools and universities be closed, damaged or destroyed in more than seven months of war, Gazans sheltering inside and outside the territory are doing what they can to restart some learning.

“We are receiving students, and we have a very large number of them still waiting,” said Asmaa al-Astal, a volunteer teacher at the tent school near the coast in al-Mawasi, which opened in late April.

Instead of letting children lose a whole year of schooling as they cower from Israeli bombardment, “we will be with them, we will bring them here, and we will teach them,” she said.

Gazans fear the conflict between Israel and Hamas has inflicted damage to their education system, a rare source of hope and pride in the enclave that will outlast the fighting.

Gaza and the occupied West Bank have internationally high literacy levels, but Israel’s blockade of the coastal Palestinian enclave and repeated rounds of conflict left education fragile and under-resourced.

Since the war began on Oct. 7, schools have been bombed or turned into shelters for displaced people, leaving Gaza’s estimated 625,000 school-aged children unable to attend classes.

All 12 of Gaza’s higher education institutions have been destroyed or damaged, leaving nearly 90,000 students stranded, and more than 350 teachers and academics have been killed, according to Palestinian official data.

“We lost friends, we lost doctors, we lost teaching assistants, we lost professors, we lost so many things in this war,” said Israa Azoum, a fourth-year medical student at Gaza City’s Al Azhar University.

Ms. Azoum is volunteering at Al Aqsa hospital in the town of Deir al-Balah to help stretched staff deal with waves of patients, but also because she doesn’t want to “lose the connection with science.”

“I never feel tired because this is what I love doing. I love medicine, I love working as a doctor, and I don’t want to forget what I have learnt,” she said.

Fahid Al-Hadad, head of Al Aqsa’s emergency department and a lecturer at the faculty of medicine at the Islamic University of Gaza (IUG), said he hoped to start teaching again, though he had lost books and papers accumulated over more than a decade when his home in Gaza City was destroyed.

Online instruction will be complicated by weak internet, but could at least allow students to complete their degrees, he said. The buildings of IUG and Al Azhar stand badly damaged and abandoned on neighboring sites in Gaza City.

“We are ready to give in any way, but much better inside Gaza than outside. Because don’t forget that we are doctors and we are working,” Mr. Hadad said.

‘LIFESAVING ACT’
Tens of thousands of Gazans who crossed to Egypt also face challenges. Though living in relative safety, they lack the papers to enrol their children in schools, so some have signed up for remote learning offered from the West Bank, where Palestinians have limited self-rule under Israeli military occupation.

The Palestinian embassy in Cairo is planning to supervise end-of-year exams for 800 high school students.

Kamal al-Batrawi, a 46-year-old businessman, said his two school-aged daughters began online schooling after the family arrived in Egyptian capital five months ago. “They take classes every day, from 8 a.m. until 1:30 p.m., as if they were in a regular school. This is a lifesaving act,” he said.

In southern Gaza, where more than a million people were displaced, United Nations (UN) children’s agency UNICEF has been organizing recreational activities like singing and dancing with some basic learning. It is planning to create 50 tents where 6,000 children will be able to take classes in three daily shifts.

“It’s important to do it, but it remains a drop in the ocean,” said Jonathan Crickx, head of communications for UNICEF Palestine.

Wesam Amer, Dean of the Faculty of Communication and Languages at Gaza University, said although online teaching could be an interim solution, it could not provide the physical or practical learning required for subjects like medicine and engineering.

After leaving Gaza for Germany in November, he is advising students on how to match up their courses with options at universities in the West Bank or Europe.

“The challenges of the day after the war aren’t only about the infrastructure, university buildings. It is about the dozens of academics who have been killed in the war and the tough task trying to make up for them or replace them,” he said.

Those killed include IUG president Sufyan Tayeh, who died with his wife and all his five children in a strike on his sister’s house in December.

Mr. Tayeh, an award-winning professor of theoretical physics and applied mathematics, had a “great passion” for science, his brother Nabil told Reuters.

“Even in the middle of the war, he (Tayeh) was still working on his own research,” he said.

The UN estimates that 72.5% of schools in Gaza will need full reconstruction or major rehabilitation.

Mental health and psychosocial support will also be needed for children to “feel safe in going back to a school that might have been bombed,” Mr. Crickx said. — Reuters

Thousands descend on Portugal’s Fatima to pray for peace as wars rage

PILGRIMS participate in the candlelight procession during an event marking the anniversary of the reported appearance of the Virgin Mary to three shepherd children, at the Catholic shrine of Fatima, Portugal, May 12, 2024. — REUTERS

FATIMA, Portugal — As wars rage in Ukraine, Gaza and elsewhere, tens of thousands of faithful prayed for peace on Sunday at Portugal’s Fatima shrine, one of Catholicism’s most famous sanctuaries.

The annual event, which brings together pilgrims from countries such as India, Canada, Brazil and Ivory Coast, marks the first of three reported visions of the Virgin Mary, also known as Our Lady, more than 100 years ago.

“War leads nowhere,” said 67-year-old Maria do Carmo as she waited patiently for the candlelight procession to start, the highlight of the evening. “We are also here to ask Our Lady to put an end to wars.”

The Roman Catholic Church teaches the Virgin Mary appeared to three Portuguese children in 1917 in Fatima, which was then an impoverished farming village. It believes she gave the children three messages, the so-called secrets of Fatima.

Pope Francis made two of the shepherd children saints in 2017.

For Jim Grimes, a 68-year-old from the United States, the event was his first time at the Fatima shrine and he also took the opportunity to reflect on the world’s conflicts.

“We have to start talking to each other, we have to start being tolerant of each other,” he said. “It’s the way to change the world.”

The Israel-Gaza war has killed over 35,000 people in Hamas-run Gaza, according to health authorities there. About 1,200 people were killed in Israel and 253 taken hostage on Oct. 7 when Hamas launched the attack that started the war, according Israeli tallies. The Israeli bombardment has laid waste to the coastal enclave and caused a deep humanitarian crisis.

Some pilgrims also brought Ukrainian flags in a show of support following Russia’s invasion in February 2022, which has killed tens of thousands and driven millions from their homes.

“Nobody likes wars…but the fact is that they happen,” said pilgrim David Garcia, 42, as he sat next to his wife and two children. “We must be united because the world needs our prayer.” — Reuters

North Korea denounces Western states for surveillance

REUTERS

SEOUL — North Korea denounced on Monday what it called increased surveillance of North Korea by US allies under the guise of monitoring United Nations (UN) sanctions violations, and said it will take necessary steps to protect its sovereignty and security, according to state media KCNA.

Pyongyang called out the United Kingdom (UK), Canada, Germany, France, New Zealand and Australia to immediately stop their “blatant military intervention in the Asia-Pacific” by using UN sanctions as an excuse, in a statement by its foreign ministry via KCNA.

“The Democratic People’s Republic of Korea will take necessary measures to thoroughly protect its sovereignty and safety” concerning such surveillance, KCNA said without elaborating, using North Korea’s official name.

South Korea and the UK carried out joint maritime patrols in waters near the Korean Peninsula in April to enforce UN Security Council sanctions resolutions against North Korea, South Korea’s defense ministry had said.

Meanwhile, North Korean leader Kim Jong Un visited arms factories on Saturday and Sunday, personally inspecting weapons such as sniper rifles and rocket launchers, KCNA said on Monday.

Mr. Kim, accompanied by high-ranking officials including his powerful sister Kim Yo Jong, praised the quality of the weapons and called for the factories to implement production plans without fail, KCNA said. — Reuters

France gets $16 billion of foreign investments as part of ‘Choose France’ event

STOCK PHOTO | Image by Rodrigo Pignatta from Pixabay

 – This year’s “Choose France” event – an annual summit aimed at attracting foreign investment to France – will result in 15 billion euros ($16.2 billion) worth of foreign investments, said the French presidency on Monday.

That amount represents an increase from last year’s summit, which brought in 13 billion euros worth of foreign investments.

President Emmanuel Macron kicks off the event on Monday.

The summit is aimed at burnishing Paris’ reputation as a leading European business centre as France – the euro zone’s second-biggest economy – faces headwinds over its budget deficit and tepid first-quarter economic growth.

Paris has also traditionally lagged New York and London as a global financial hub, with the closely watched Z/Yen survey published in March ranking New York as the world’s top financial centre, with London in second place.

The French presidency said this total of 15 billion euros worth of foreign investments came from 56 different business projects, with key sectors for investments including technology, artificial intelligence (AI) and finance.

Over the weekend, France said Amazon would announce a 1.2 billion euros investment at the event, while leading healthcare companies Pfizer and AstraZeneca also announced investments worth a total of nearly $1 billion.

French Finance Minister Bruno Le Maire will also host meetings on Monday with the CEOs of JPMorgan, Goldman Sachs, Morgan Stanley and Bank of America, among others. – Reuters

Indonesia’s Mt Ibu erupts, spewing ash clouds

Screenshot of the location Mt. Ibu from Google Maps

 – Indonesia’s Ibu volcano erupted on Monday morning, spewing thick columns of grey ash several kilometers into the sky, the country’s volcanology agency said.

The volcano on the remote island of Halmahera erupted at 9.12 a.m. (0012 GMT) for about five minutes, projecting ash into the sky as high as 5 km (3.1 miles), officials said.

A smaller eruption was also recorded on Friday.

The alert status of the volcano remains at the second-highest level, Hendra Gunawan, head of Indonesia’s Volcanology and Geological Hazard Mitigation Centre, said in a statement.

All activities within a five-kilometer radius of the volcano were prohibited, he added.

“If it starts to rain ash, we recommend people who are near the volcano to wear a mask and glasses,” Hendra said.

Footage of the eruption shared by the centre showed clouds of grey ash billowing from the crater. The official said a booming noise was also heard.

No evacuation of residents has been reported so far.

Indonesia sits on the Pacific “Ring of Fire” and has 127 active volcanoes, according to the volcanology agency.

In recent weeks North Sulawesi’s Ruang volcano has erupted, spewing incandescent lava as lightning flashed from its crater. The eruption prompted authorities to evacuate more than 12,000 people living on a nearby island.

In December, more than 20 people were killed after Marapi volcano, one of Sumatra’s most active volcanoes, erupted and belched grey clouds of ash as high as 3 km. – Reuters

Indian election enters fourth phase as rhetoric over religion, inequality sharpens

STOCK PHOTO | Image by jorono from Pixabay

 – India voted on Monday in the fourth phase of a seven-week long general election, as campaign rhetoric became more strident over economic disparities and religious divisions.

The world’s most populous nation began voting on April 19 in a seven-phase election in which nearly one billion people are eligible to vote, with ballots set to be counted on June 4.

Prime Minister Narendra Modi is seeking a rare, third straight term in a vote which pits his Hindu nationalist Bharatiya Janata Party (BJP) against an alliance of more than two dozen opposition parties, including main rival Congress.

“I appeal to all to vote for a decisive government,” said Amit Shah, Mr. Modi’s powerful aide and the country’s interior affairs minister, as voting began.

Polling will be held for 96 seats in 10 states and territories on Monday, with 177 million people eligible to cast their ballots. A large number of seats are in the southern and eastern states of Telangana, Andhra Pradesh and Odisha where the BJP is not as strong as other parts of the country.

Turnout is being closely watched as marginally lower numbers in the first three phases has raised concerns about voter disinterest in an election without a strong, central issue. The impact of hot weather on voting is also being watched with maximums in many parts of the country around 40 degrees Celsius (104°F) or higher.

The lower turnout has raised doubts over whether BJP and its allies can win the landslide predicted by opinion polls.

Analysts say the lower turnout prompted Modi to change the tack of his campaign after the first phase, shifting focus from his economic record to accusing the Congress of planning to extend welfare benefits to minority Muslims at the expense of disadvantaged tribal groups and Hindu castes.

Congress has denied making any such promise and has said Modi is rattled by the turnout, which the BJP denies.

About 80% of India’s 1.4 billion people are Hindus but it also has the world’s third largest Muslim population of about 200 million people. Surveys suggest voters are most concerned about unemployment and price rise.

Led by Rahul Gandhi, Congress is pitching for better representation and welfare programs for India’s poor and disadvantaged groups, stating that wealth inequality has worsened during Modi’s 10-year term, a charge rejected by the government.

The opposition INDIA alliance led by Congress got a shot in the arm ahead of Monday’s vote when the Supreme Court gave temporary bail to Arvind Kejriwal, chief minister of the national capital territory of Delhi and a key opposition leader, allowing him to campaign.

Mr. Kejriwal is a fierce critic of Modi and was arrested a month before the elections in a liquor policy graft case, sparking accusations Modi’s government was seeking to cripple the opposition through investigations and arrests.

Mr. Kejriwal denies the corruption allegations while the government says it does not influence law enforcement agencies. – Reuters

Australia to boast budget surplus, eye inflation’s earlier return to target

FLATART-FREEPIK

 – Australia’s government is expected to boast another surplus in its annual budget due on Tuesday, courtesy of strong employment and high commodity prices, giving it cash to afford more cost of living relief and industry incentives.

Ahead of his third budget since the centre-left Labor government won power in 2022, Treasurer Jim Chalmers predicted inflation could ease to the central bank’s 2-3% target band by the end of this year, helped by measures Canberra plans to introduce to cool prices.

That would be a welcome surprise for the Reserve Bank of Australia (RBA), which does not expect inflation to return to target until late 2025.

“I think it is cost of living relief that they’re assuming kicks in to lower inflation,” said Shane Oliver, chief economist at AMP. “They’re not making any allowance for people possibly spending more on the back of that relief. Technically it might be alright, but it does run the risk of ignoring the spending effect.”

The centrepiece of the budget would be an already legislated income tax cut for every Australian taxpayer worth A$395 billion ($260.58 billion) over 10 years. Chalmers is also likely to renew energy rebates that were set to expire this year.

The budget will feature tax incentives for Labor’s Future Made in Australia subsidy program to help domestic industries compete globally, as well as more defense funding and measures to cut costs for higher education.

Chalmers is under pressure to curb spending to avoid stirring up inflation, but he has defended the measures as “unavoidable” and “warranted”. Australians are due to head to polls again by early next year.

Three of the big four Australian banks expect the government to record a back-to-back surplus in the fiscal year ended June 30, a feat not achieved since the early 2000s.

ANZ predicted a small surplus of A$4.5 billion for the 12-months ending June this year, while Commonwealth Bank of Australia tipped a surplus of a A$15 billion.

“The Budget will focus on providing targeted cost of living support and securing Australia’s economic and strategic future,” said Pat Bustamante, a senior economist at Westpac.

“This comes with a price tag that will see the cumulative budget position deteriorate and the budget tip into the red.”

Westpac expects a A$9.4 billion surplus this year, though that will likely swing to a deficit of $10.1 billion in 2024/25 in part as the cost of past borrowing mounts. – Reuters

 

Putin taps economist to run defense, replacing Shoigu in unexpected move

 – Russian President Vladimir Putin tapped a civilian economist as his surprise new defense minister on Sunday in an attempt to gird Russia for economic war by trying to better utilize the defense budget and harness greater innovation to win in Ukraine.

More than two years into the conflict, which has cost both sides heavy casualties, Putin proposed Andrei Belousov, a 65-year-old former deputy prime minister who specializes in economics, to replace his long-term ally, Sergei Shoigu, 68, as defense minister.

Putin wants Shoigu, in charge of defense since 2012 and a long-standing friend and ally, to become the secretary of Russia’s powerful Security Council, replacing incumbent Nikolai Patrushev, and to also have responsibilities for the military-industrial complex, the Kremlin said.

Patrushev will get a new, as yet unannounced, job.

The changes, certain to be approved by parliamentarians, are the most significant Putin has made to the military command since sending tens of thousands of troops into Ukraine in February 2022 in what he called a special military operation.

Kremlin spokesman Dmitry Peskov said the change made sense because Russia was approaching a situation like the Soviet Union in the mid-1980s, when the military and law enforcement authorities accounted for 7.4% of gross domestic product (GDP).

That, said Mr. Peskov, meant it was vital to ensure such spending aligned with and was better integrated into the country’s overall economy, which was why Putin now wanted a civilian economist in the defense ministry job.

“The one who is more open to innovations is the one who will be victorious on the battlefield,” Mr. Peskov said.

Mr. Belousov, a former economy minister known to be very close to Putin, shares the Russian leader’s vision of rebuilding a strong state, and has also worked with Putin’s top technocrats who want greater innovation and are open to new ideas.

Mr. Belousov has played an important role in overseeing Russia’s drone program.

The shake-up, which caught the elite off-guard, indicates Putin is doubling down on the Ukraine war and wants to harness more of Russia’s economy for the war after the West sought, but failed so far, to sink the economy with sanctions.

 

ECONOMIC WAR

Russia’s economists have so far largely ensured economic stability and growth despite the toughest sanctions ever imposed on a major economy, even though the failings of the Russian military were laid bare shortly after the invasion.

“The proposal to appoint one of the main court economists and the main state minister in the economic bloc to head the Defence Ministry may mean that Putin is planning to win the war with the defense industry plants and international markets,” said Alexander Baunov, a former Russian diplomat who is now a senior fellow at the Carnegie Russia Eurasia Center.

“The winning strategy in this case will not be mobilisations and breakthroughs, but slow pressure on Ukraine with the superior power of the Russian military-industrial complex and the economy as a whole, which, apparently, is supposed to be made to work more effectively for the front and rear.”

Putin’s move, though unexpected, preserves balance at the top of the complex system of personal loyalties that make up the current political system.

The shake-up gives Shoigu a job that is technically regarded as senior to his defense ministry role, ensuring continuity and saving Shoigu’s face. Valery Gerasimov, the chief of Russia’s General Staff and someone with a more hands-on role when it comes to directing the war, will remain in post.

Shoigu was heavily criticized by Russian military bloggers for a series of retreats the Russian military was forced to make in 2022. Yevgeny Prigozhin, the leader of the Wagner mercenary group and one of Shoigu’s fiercest critics, led an abortive mutiny he hoped would topple Shoigu last year before agreeing to call it off. Prigozhin was later killed in a plane crash.

Mark Galeotti, director of the London-based Mayak Intelligence consultancy, said the defense minister’s job in Russia at a time of war was to ensure the military had everything it needed, while Gerasimov’s job was the “key one” as he now reported directly to Putin, the commander-in-chief.

“In that context, having an economist, someone who has been speaking about the need to basically subordinate much of the economy to the needs of the defense sector, makes a certain amount of sense. It is now essentially a financial administrator’s job and Mr. Belousov can do that,” said Mr. Galeotti.

The change is likely to be seen as an attempt by Putin to subject defense spending to greater scrutiny to ensure funds are effectively spent after a Shoigu ally and deputy defense minister, Timur Ivanov, was accused by state prosecutors of taking kickbacks worth nearly $11 million.

Putin left Alexander Bortnikov and Sergei Naryshkin, the chiefs of the Federal Security Service (FSB) and the Foreign Intelligence Service (SVR), in their posts.

Sergei Lavrov, the country’s veteran foreign minister, will also stay in his job, the Kremlin said. – Reuters

Philippine coast guard won’t allow China reclamation at disputed shoal, official says

PHILIPPINE COAST GUARD/HANDOUT VIA REUTERS

 – The Philippine Coast Guard (PCG) is committed to sustaining a presence in a disputed area of the South China Sea to ensure China does not carry out reclamation activities at the Sabina Shoal, its spokesperson said on Monday.

The PCG said on Saturday it has deployed ships to Sabina Shoal, where it accused China of building an artificial island, amid an escalating maritime row.

Since the ship’s deployment in mid April, the PCG said it has discovered piles of dead and crushed coral that had been dumped on the sandbars of Sabina Shoal, altering their sizes and elevation.

PCG spokesperson Jay Tarriela told a press conference on Monday the Coast Guard had to make sure it was able to prevent “China from carrying out a successful reclamation in Sabina Shoal”.The shoal, which Manila calls Escoda, lies within the Philippines’ exclusive economic zone. It is the rendezvous point for vessels carrying out resupply missions to Filipino troops stationed on a grounded warship at the Second Thomas Shoal, where Manila and China have had frequent maritime run-ins. – Reuters

On par for a purpose: Wilcon’s drive to 100th

The 7th Wilcon Cup participants

Wilcon Depot’s 7th Wilcon’s Cup success

Wilcon Depot aced another milestone with the staging of the 7th Wilcon Cup after a three-year hiatus due to the pandemic. The 7th Wilcon Cup was held at Wack Wack Golf and Country Club on May 7, with over a hundred roster participants, including Wilcon’s industry partners, esteemed suppliers, and media friends.

The Wilcon Cup is an annual event of Wilcon Depot, an activity which manifests its strong sense of social responsibility. As the leading home improvement needs and construction supplies retailer’s flagship charity cup, it gathers its partners to combine recreation and giving back to the community. It was temporarily paused because of the COVID-19 health crisis.

From its first tee off in 2015, the annual golf tournament has channeled collective energy to raise substantial funds for beneficiaries which include the ABS-CBN Foundation-Bantay Kalikasan, Wilcon Builders Foundation, and Crocodylus Porosus Philippines. The golf tournament is just one of the many initiatives of the company that reflect its social conscience.

More than a hundred golf enthusiasts, prominent names in the building and construction industry, including media personalities graced the event. The day began with ceremonial tee shots from Wilcon Depot Founder & Chairman Emeritus Dr. William T. Belo, President and CEO Lorraine Belo-Cincochan, SEVP-COO Rosemarie Bosch-Ong, and Boysen Philippines Ambassador Derek Ramsay.

The awarding ceremony was hosted by RJ Ledesma, during which the participants culminated and had fellowship before a sumptuous meal. In the afternoon, Ms. Bosch-Ong and Ms. Belo-Cinchochan graciously extended their appreciation to all the Cup’s players. She particularly expressed gratitude to the Wilcon executives, and representatives of its major sponsors, such as Boysen Paints, Kohler, and Grohe, who also attended the ceremony.

The 7th Wilcon Cup champions (West Course) were Jaime Alberto Melo for Division I and Arturo Alcantara for Division II. The runners-up were Edgar Allan Pasion and Arniel Caeser Idos, respectively. In the ladies’ division, Ashley Llena was hailed as the champion.

Derek Ramsay emerged as the Low Net and Longest Drive Hole #13 winner, Marvin Caparros for Low Gross, Jordan Tan for the Nearest to Pin Hole #3, and Adones Baluyut for Most Accurate Drive Hole #13 winners.

The staging of the 7th Wilcon Cup takes on special meaning as the company approaches its 100th store mark, a proud accomplishment of the #FlyingHighTo100 expansion campaign.

All proceeds from the tournament will benefit the company’s chosen foundation, providing vital resources to support the needs and dreams of the children and to save the endangered crocodiles in the country.

The following were the 7th Wilcon Cup sponsors: Platinum Sponsors — Boysen Paints, Kohler Philippines, and Grohe Philippines; Diamond sponsors — ABC Philippines, Alpha Chroma, Kent Floors, HCG, Landlite Lighting Solutions, Novtek Corp., and OMNI; Gold Sponsors — STN Ceramica and Pamesa Ceramica; Silver Sponsors — Alphalux, American Standard, Bestanks, Davies Paints, Exatect, GT Stoneworks, Hamden, Hanabishi, Handle Bar, Hills, Jardine Distribution, Kessel, Philips, Pozzi, Primeo, Saigres, Santa Clara Marine Plywoods, and Sentry Locks and Handtools. While Big Ass Planks as the Major Sponsor for raffle giveaways.

Media partners that supported the activity include Business Mirror, BusinessWorld, Inquirer Golf, Kanto, ABS-CBN’s Metro Channel, Net25, One Mega, Philippine Daily Inquirer, The Philippine Star, Summit Media, and The Manila Times.

For more information about Wilcon, visit www.wilcon.com.ph or follow their social media accounts on Facebook, Instagram, and TikTok, or subscribe and connect with them on Viber Community, LinkedIn, and YouTube. Or you may contact Wilcon Depot Hotline at 88-WILCON (88-945266) for inquiries.

 


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BSP expected to keep rates steady 

The Philippine central bank is widely expected to keep policy rates at a 17-year high of 6.5% at its meeting this week. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) is widely expected to extend its policy pause for a fifth straight meeting this week as inflation risks remain.   

A BusinessWorld poll of 19 analysts conducted last week showed 17 analysts expect the Monetary Board to maintain its target reverse repurchase rate at a 17-year high of 6.5% at its policy review on Thursday.

On the other hand, one analyst expects the BSP to cut rates by 25 basis points (bps), while another sees the central bank raising rates amid persistent inflation.

Analysts’ Expectations on Policy Rates (May 2024)The central bank has raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023 to tame inflation.

“The Philippine central bank’s May 16th meeting is likely to see a hold on interest rates. This aligns with their recent cautious approach and the need to balance inflation control with economic growth,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail.

Headline inflation quickened for a third straight month to 3.8% in April from 3.7% in March. April marked the fifth straight month that inflation fell within the BSP’s 2-4% target range.

Inflation averaged 3.4% in the first four months, still below the central bank’s 3.8% full-year forecast.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said that the central bank will keep its benchmark rate unchanged as “inflation remains uncertain just as growth indicators generally continue to show resilience.”

In a note, Chinabank Research said the BSP would likely maintain its hawkish stance this week, given the risks to inflation and weaker-than-expected gross domestic product (GDP) expansion in the first quarter.

“The country’s GDP growth came in weaker than expected at 5.7% in the first quarter but was still a solid print, outperforming some of our regional peers.

This should provide the BSP room to keep monetary settings unchanged (this) week,” Chinabank Research added.

The Philippine economy grew by 5.7% in the first quarter, faster than 5.5% in the fourth quarter but slower than 6.4% in the year-ago period.

This fell short of the government’s 6-7% full-year target for 2024 and was below the 5.9% median forecast in a BusinessWorld poll of 20 economists.

“The BSP will be careful not to cut rates prematurely as it is anticipating a pickup in forthcoming monthly inflation prints just as risk of inflation reacceleration remains somewhat elevated amid trade, climate and geopolitical uncertainties from August 2024 onwards,” Mr. Neri said.

The BSP has said that inflation could temporarily accelerate to above the 2-4% target range in the next two quarters due to base effects and the impact of weather conditions on agricultural production.

“Our baseline forecasts still point to a breach of the inflation target from May to August due to the continuation of unfavorable base effects amid a challenged supply environment,” Philippine National Bank economist Alvin Joseph A. Arogo said in an e-mail.

Sarah Tan, an economist from Moody’s Analytics, said that inflation may “bump around the upper limit” over the coming months due to the El Niño dry spell.

As of April 30, agricultural damage from El Niño had reached P5.9 billion. Rice was the most affected crop, accounting for 53.21% or P3.14 billion of the total damage.

“We still expect inflation to breach the upper bound of the BSP’s target range in the short term in May, but this should be temporary and we’re hoping that the (Monetary) Board will see past this at next month’s meeting,” Pantheon Chief Emerging Asia Economist Miguel Chanco said.

Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion also cited other risks to the inflation outlook, such as a potential adjustment to daily minimum wages.

“President Ferdinand R. Marcos, Jr. has ordered a review of the daily wage rates through the regional tripartite wage boards that will be treated as a looming risk to the inflation outlook,” he said.

In June 2023, the wage board in the National Capital Region approved a P40 increase, bringing the minimum wage to P610 from P570 for workers in the non-agricultural sector.

Senators have approved a bill on second reading increasing the daily minimum wage in the private sector by P100.

PESO WEAKNESS
Analysts said that the BSP is likely to keep rates steady amid the recent peso weakness.

“We expect the BSP to remain on hold at the next meeting given the still elevated inflation rate and high pressures on the peso from the stronger US dollar,” Makoto Tsuchiya, an economist from Oxford Economics, said in an e-mail.

The local unit closed at P57.42 against the dollar on Friday, weaker by four centavos from its P57.38 finish on Thursday. The peso returned to the P57-level in April amid the escalating conflict in the Middle East.

“Moreover, the Fed is unlikely to cut rates soon and a reduction in the Philippine-US interest rate differential will put more pressure on the exchange rate to weaken,” Mr. Arogo said.

The central bank is also unlikely to cut rates ahead of the US Federal Reserve, analysts said.

“With the Fed likely cutting rates in September or possibly even later, BSP’s first rate cut will likely follow the Fed action,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

Mr. Asuncion said the BSP will likely wait to cut rates “until El Niño effects have receded, local food supply has normalized, and rice inflation has materially narrowed.”

BSP Governor Eli M. Remolona, Jr. has said that while the central bank monitors the Fed, its decisions are independent of the Fed’s own moves.

The US central bank kept its Fed funds rate steady at 5.25-5.5% at its latest meeting.

“The latest inflation data is still within the BSP’s inflation target of 2-4% for the fifth straight month that could still support possible local policy rate cuts later in 2024, especially if the Fed starts cutting rates,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Capital Economics Senior Asia Economist Gareth Leather sees the BSP cutting rates starting as early as August.

Meanwhile, Moody’s Analytics Ms. Tan said that the odds of a rate hike at Thursday’s meeting are low.

“With inflation surprising to the downside, there is no pressure for the BSP to hike its policy rate further in the Monetary Board meeting (this) week. There is also no need to hike to support the peso and prevent any forex-induced inflation with the peso strengthening against the US dollar after the US jobs data came in weaker than expected,” HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said.

On the other hand, De La Salle University School of Economics professor Jesus Felipe said that the BSP may possibly raise rates by 25 bps.

“The situation is complicated. On the one hand, inflation uncertainty remains plus the peso depreciation,” he said in an e-mail.

“Our models indicate that the currency will stay at the current level and that inflation will stay in the upper part of BSP’s target, between 3.5% and 4%. This leads us to think that BSP may increase its policy rate,” he added.

Meanwhile, Ser Percival Peña-Reyes, director of the Ateneo de Manila University Center for Economic Research and Development, said that the central bank may consider easing rates as inflation is still within target.

“The BSP might go for a rate cut this time due to weaker-than-expected economic growth. Its decision to do so might be influenced by the fact that inflation came within its target,” he said.

Mr. Remolona earlier said they may consider cutting rates if inflation can settle firmly at around 3% for consecutive months.

FDI net inflows soar to over two-year high

REUTERS

NET INFLOWS of foreign direct investment (FDI) in February soared to its highest level in over two years, data from the Philippine central bank showed.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that FDI net inflows climbed by 29.3% to $1.364 billion in February from $1.055 billion in the same month a year ago.

This was its highest level in 26 months or since the $2.662-billion net inflows recorded in December 2021.

Net Foreign Direct Investment (February 2024)Month on month, FDI net inflows increased by 50% from $907 million in January.

The BSP said this was mainly due to the expansion in nonresidents’ net investments in equity capital (other than reinvestment of earnings), which offset the decline in net investments in debt instruments.

Nonresidents’ net investments in equity capital (other than reinvestment of earnings) skyrocketed (927.3%) to $764 million from $74 million in the same month in 2023.

Broken down, equity capital withdrawals more than doubled (142.1%) to $93 million in February from $38 million a year ago, while placements surged (660.2%) to $857 million from $113 million a year ago.

The BSP said that the majority of equity placements in February came mainly from the Netherlands (89%). These were invested mostly in the financial and insurance industries.

On the other hand, nonresidents’ net investments in debt instruments of local affiliates plunged by 41.5% to $533 million in February from $912 million a year earlier.

BSP data also showed that investments in equity and investment fund shares ballooned (480.4%) to $830 million in February from $143 million year on year.

On the other hand, reinvestment of earnings slipped by 3.8% to $66 million from $69 million a year ago.

TWO-MONTH PERIOD
For the January-to-February period, total FDI net inflows rose by 48.2% to $2.271 billion from $1.533 billion last year.

Investments in equity capital other than reinvestment of earnings surged (350.3%) to $753 million in the first two months from $167 million a year ago.

Placements nearly tripled (265.7%) to $956 million while withdrawals more than doubled (115.5%) to $203 million.

Reinvestment of earnings went up by 7.4% to $165 million in the two-month period from $154 million in the same period a year ago.

Investments in debt instruments increased by 11.6% to $1.353 billion in the January-to-February period from $1.212 billion last year.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the rise in FDI inflows can be attributed to the improved economic performance.

“Philippine economic growth is among the fastest in Asia… thereby encouraging more FDIs to come into the country amid favorable demographics and lower long-term interest rates that help boost investments globally,” he said in a Viber message.

The Philippine economy grew by 5.7% in the first quarter, faster than 5.5% in the previous quarter but slower than 6.4% in the first quarter of 2023.

The country’s growth is also about the same as Vietnam’s 5.66% and is ahead of China (5.3%), Indonesia (5.1%), Malaysia (3.9%), and Singapore (2.7%).

“Increased FDIs could have also partly been brought about by some realized investment commitments made for more than a year already during the various foreign trips of the administration,” Mr. Ricafort added.

The Department of Trade and Industry (DTI) earlier reported that President Ferdinand R. Marcos, Jr.’s foreign trips have generated $14.2 billion in actual investment, accounting for about 20% of investment pledges.

As of December, the President’s business travels generated pledges of $72.2 billion, the DTI said.

Mr. Ricafort said that possible rate cuts could help reduce borrowing costs and lead to more FDI inflows.

The BSP stood pat for a fourth straight meeting in April and kept its benchmark rate at a 17-year high of 6.5%. The Monetary Board will hold its next policy review on Thursday. The BSP expects to record FDI net inflows of $9 billion at end-2024. — Luisa Maria Jacinta C. Jocson