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Cavaliers edge Magic on late block, take 3-2 lead

EVAN MOBLEY blocked Franz Wagner’s attempted layup with five seconds remaining in the fourth quarter, helping the host Cleveland Cavaliers secure a 104-103 win over the Orlando Magic in Game 5 of their Eastern Conference first-round series.

Cleveland’s Donovan Mitchell erupted for 28 points, and Darius Garland scored 17 of his 23 points in the first quarter.

Max Strus had 16 points and Mr. Mobley collected 14 points and 13 rebounds for the fourth-seeded Cavaliers.

Cleveland has won all three of its home games to take a 3-2 lead in the best-of-seven series. Game 6 is in Orlando on Friday

Marcus Morris Sr. added 12 points off the bench to help a Cleveland team that was without Jarrett Allen, who was ruled out due to a right rib contusion he sustained in Game 4.

Mr. Allen averaged 17.0 points and 13.8 rebounds in four games this series. Orlando’s Paolo Banchero recorded 39 points and eight rebounds after being limited to just nine points on 4-of-14 shooting from the floor in Game 4.

Mr. Wagner collected 14 points and six assists and Jalen Suggs added 13 points for the fifth-seeded Magic, who have lost seven straight road games dating back to the regular season.

Mr. Banchero sank a pull-up jumper to stake Orlando to a 98-97 lead before Mr. Mobley answered on the next possession with an emphatic one-handed dunk. Mr. Mitchell added a free throw and Mr. Mobley converted a nifty feed from Garland for an easy layup to give Cleveland a 102-98 advantage with 40.6 seconds remaining in the fourth quarter.

Mr. Wagner made a layup to halve the deficit before his attempt at a driving layup was blocked by Mr. Mobley. Mr. Mitchell made a pair of free throws before Banchero sank a 3-pointer to cap the scoring.

Mr. Suggs made one of two free throws to give Orlando a 64-63 lead, but Cleveland answered with a 12-6 run to end the third quarter. Mr. Strus highlighted that surge by sandwiching 3-pointers around a driving layup. — Reuters

Adidas decided not to match Nike offer for German football federation — CEO

LONDON —  Adidas chief executive officer  (CEO) Bjorn Gulden said the German brand decided not to match Nike’s offer for Germany’s national football federation sponsorship after the US company beat Adidas on its home turf last month to end its 70-year partnership with the federation.

Nike outbid Adidas to become the official supplier for the German Football Association (DFB) and will supply all national teams from 2027 to 2034.

“I’m not annoyed at all,” Mr. Gulden said in response to a question during a press conference. “We are a company that needs to balance cost and revenue, and the price that is quoted in the press that our competitor paid is not something that we will pay.” Asked about media reports that Adidas has signed a kit deal with Liverpool, taking over from Nike, Mr. Gulden said there was nothing to announce.

Adidas, Nike, and other sports brands are constantly vying for kit deals with the biggest and best teams, as replica shirts can boost their revenue, especially during big tournaments like the World Cup or the Euros.

But core products like footwear are ultimately a bigger driver of the business. “All these sponsorship deals are about brand recognition and brand sentiment,” said Tom Scott, CEO of sports-focused communications consultancy Trippant in London. “(But) market share is not driven by which shirts you are sponsoring, it’s about which sneakers you are selling week in and week out.” — Reuters

Fairwork Philippines calls for reform on working conditions for Filipino platform workers

FREEPIK

An action research firm in their recent report on gig workers in the Philippines finds a ‘critical gap’ in government regulation and platform policies that cause subpar working conditions in the country.  

“Addressing the safety concerns and policy gaps in the platform-based ride-hailing and delivery sector in the Philippines that go beyond compliance is urgent and requires a collaborative effort from the government, platform companies, and worker representatives,” Fairwork Philippines said in their 2023 report on ‘Protecting Worker Health, Safety, and Security in the Philippine Platform Economy’. 

The organization defined platform workers as independent contractors in digital labor platforms, such as ride-hailing and delivery sectors. 

The results released by the organization were based on its five principles of fairness: 

  • Fair pay 
  • Fair conditions 
  • Fair contracts 
  • Fair management 
  • Fair representation 

Despite efforts from the government and the market to promote platform work as a viable livelihood opportunity, Fairwork Philippines said “most workers cannot meet the basic minimum wage while also facing dangerous working conditions, a lack of safety nets, and long-term financial insecurity.” 

The organization pushes for reforms to improve the quality of work for digital platforms. According to their 2022 and 2023 reports, there were no improvements in the workers’ health, safety, and security. 

Evaluated in the 2022 ratings were Angkas, Borzo, GrabCar, GrabFood/GrabExpress, Foodpanda, Joyride, Lalamove, TokTok, and Transportify. Meanwhile, Joyride Car and Maxim replaced Transportify in the 2023 data. 

GrabCar, GrabFood/GrabExpress, Angkas, and Lalamove continue to be the only platforms that have received points from Fairwork Philippines for two consecutive years.Almira Louise S. Martinez

Extreme heat is closing schools, widening learning gaps worldwide

A STUDENT refills a water bottle at a school in Manila on April 2, 2024. — PHILIPPINE STAR/ RYAN BALDEMOR

HENA KHAN, a grade nine student in Dhaka, has struggled to focus on her studies this week as temperatures surpassed 40 degrees Celsius (104 degrees Fahrenheit) in the capital city.

“There is no real education in schools in this punishing heat,” she said. “Teachers can’t teach, students can’t concentrate. Rather, our lives are at risk.”

Ms. Khan is one of more than 40 million students who have been shut out of classrooms in recent weeks as heatwaves have forced school closures in parts of Asia and North Africa.

As the climate warms due to the burning of fossil fuels, heatwaves are lasting longer and reaching greater peaks as average temperatures rise. In turn, government authorities and public health experts across the world are grappling with whether to keep students learning in hot classrooms, or encourage them to stay home and keep cool.

Either decision has consequences. About 17% of the world’s school-aged children are already out of school, according to United Nations data, but the proportion is much larger in developing countries, with nearly a third of sub-Saharan Africa’s children out of school compared to just 3% in North America. Children’s test scores in the developing world also lag far behind developed countries.

Heat could make that worse, widening learning gaps between tropical developing nations and developed countries, experts told Reuters, and even between rich and poor districts in wealthy countries. But sending children to overheated schools could make them sick.

South Sudan already this year shuttered its schools to some 2.2 million students in late March when temperatures soared to 45 degrees Celsius (113 Fahrenheit). Thousands of schools in the Philippines and in India followed suit in late April.

Meanwhile, Bangladesh continues to waver between opening and closing schools for some 33 million students amid pressure to prepare pupils for exams — even as temperatures climb to dangerous levels.

Many of the country’s schools “don’t have fans, the ventilation is not good, and they might have tin roofing which does not provide good insulation,” said Shumon Sengupta, Bangladesh country director for nonprofit Save the Children.

On Monday, one day after reopening schools which had been closed last week due to heat, Bangladeshi authorities again closed all primary schools and educational institutions in nearly half of all districts as temperatures reached 43ºC (109ºF).

HOTHEADS
Even if students continue attending classes during heatwaves, their education is likely to still suffer.

High temperatures slow down the brain’s cognitive functions, lowering pupils’ ability to retain and process information.

US high schoolers, one May 2020 study found, performed worse on standardized tests if they were exposed to higher temperatures in the year leading up to the exam.

The research, published in the American Economic Journal, found that a 0.55ºC (1ºF) warmer school year reduced that year’s learning by 1%.

Much of that impact disappeared in schools that had air conditioning, said study co-author Josh Goodman, an economist at Boston University.

Somewhere between 40% and 60% of US schools are thought to have at least partial air conditioning, according to various surveys.

Schools that do not are typically found in lower income districts which already lag behind their wealthier counterparts academically. In the US the average performance of the lowest income students is about four years behind the highest income students, according to a 2019 study in the National Bureau of Economic Research.

Mr. Goodman and his colleagues found a similar learning pattern when they looked at standardized test data in other countries.

“When [students in] these places experience a year with more heat, they appear to have learned less,” he said.

That is worrying, Mr. Goodman added, because as the world warms already hot countries moving to an extremely hot climate will suffer more than temperate countries.

“Climate change will widen the learning gaps between hot and cool countries,” Mr. Goodman said.

Some research suggests excessive heat in the tropics can impact a child’s education even before birth.

Children in Southeast Asia exposed to higher-than-average temperatures in utero and early in life obtained fewer years of schooling later in life, a 2019 study in the Proceedings of the National Academy of Sciences found.

With many people in the region dependent on farming, high temperatures could hurt food production and household incomes, said study author Heather Randell, a sociologist at the University of Minnesota.

If crops are damaged by heat, young children may not get enough to eat which can stunt their development, she said, and a family may no longer be able to afford school fees, or could pull children out of school to help on farms.

SCHOOL RULES
The number of days that schools are closed for extreme heat have been ticking up in the US, but few countries track such data.

US schools are now canceling class for an average of six to seven school days each year for heat, compared with about three to four days a decade ago, said Paul Chinowsky, a civil engineer who led a 2021 study on schools and rising temperatures for the firm Resilient Analytics, which consults for governments and NGOs.

In Bangladesh, “last year, schools were closed for 6 to 7 days,” said Save the Children’s Mr. Sengupta. “But this year, they are saying it might be closed for 3 to 4 weeks.”

May is generally the warmest month of the year in South Asia.

More closures worry him, Mr. Sengupta said. When children are not in school, they are more vulnerable to child labor and child marriage, according to NGO reports.

Bangladesh Education Minister Mohibul Hasan Chowdhury said on Tuesday that schools would be kept open on weekends if needed to complete the curriculum.

Decisions on school closures, he added, will no longer be a national directive but are to be made at the district level. — Reuters

El Niño, water management issues blamed for snarling Panama Canal

A container ship crosses the Gulf of Suez towards the Red Sea before entering the Suez Canal, April 24, 2017. — REUTERS

SAO PAULO — The El Niño climate phenomenon, not climate change, drove lower rainfall last year that reduced the Panama Canal’s water levels and contributed to shipping restrictions that disrupted global trade, a study released on Wednesday found.

Prioritizing water for human consumption rather than for the canal also played a role in shipping restrictions, according to the study by research consortium World Weather Attribution.

Panama experienced its third-driest year on record in 2023, leading the canal authority to restrict the size and number of vessels crossing the waterway that connects the Atlantic and Pacific Oceans and serves as a vital route for maritime trade. At times, more than 100 ships at a time lined up and waited up to 21 days to use the canal, which is responsible for about 5% of global shipping.

Panama has faced demand peaks for the canal in recent months since shippers began seeking alternative routes due to attacks by Houthi militants against vessels going through the Red Sea toward the Suez Canal, the world’s busiest waterway.

Scientists with World Weather Attribution, which analyzed the causes of the low rainfall, said that the canal should be able to return to normal operations this year as El Niño ends and the rainy season arrives as usual.

“We expect the canal system will be fully recharged by the end of the year and shipping should be back to normal sometime several months before then,” said Steven Paton, a study co-author and researcher at the Smithsonian Tropical Research Institute in Panama.

The study concluded that it was El Niño, not climate change, that was the key driver for rainfall falling to 26% lower than average last year in Panama.

El Niño is a naturally occurring warming in the Eastern Pacific Ocean that disrupts weather patterns globally on average every two to seven years. The latest El Niño began in mid-2023.

Mr. Paton said El Niño has ended, with Australia’s weather bureau making the same call last month. The US National Oceanic and Atmospheric Administration has yet to say El Niño is over.

Water management was also a factor in the water levels, according to World Weather Attribution.

The canal’s locks draw on a reservoir called Lake Gatun that also provides drinking water for half of Panama’s population. Authorities decided to restrict ship traffic in 2023, rather than rationing drinking water as they did in 2016 following another drought, the study said. — Reuters

Binance crypto founder Zhao sentenced to four months in prison

REUTERS

SEATTLE — Changpeng Zhao, the former chief executive of Binance, was sentenced on Tuesday to four months in prison after pleading guilty to violating US laws against money laundering at the world’s largest cryptocurrency exchange.

Once considered the most powerful crypto industry figure, Mr. Zhao, known as “CZ,” is the second major crypto boss to be sentenced to prison.

The sentence imposed by US District Judge Richard Jones in Seattle was significantly shorter than the three years sought by prosecutors, and below the maximum 1-1/2 years recommended under federal guidelines.

It was also much lighter than the 25 years behind bars that Sam Bankman-Fried received in March for stealing $8 billion from customers of his now-bankrupt FTX exchange. Mr. Bankman-Fried is appealing his conviction and sentence.

Still, prosecutors cheered the outcome of what had been a years-long investigation into Binance and Mr. Zhao, a billionaire who had been living beyond US reach in the United Arab Emirates.

“This was an epic day,” US Attorney Tessa Gorman told reporters outside the courthouse. “Incarceration was critical in this case and we’re pleased with the result.”

Before handing down the sentence, Mr. Jones faulted Mr. Zhao for making Binance’s growth and profitability a higher priority than complying with US laws.

“You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity,” he said.

Mr. Zhao, 47, did not visibly react upon hearing his sentence.

He wore a navy blue suit and tie in the courtroom, with his mother and several other family members in attendance. Defense lawyers had requested probation.

“’Crime pays’ is the message sent today,” Dennis Kelleher, head of the financial reform advocacy group Better Markets, wrote in an email, noting Mr. Zhao will still get to keep his vast wealth.

‘I’M SORRY’
Prosecutors said Binance employed a “Wild West” model that welcomed criminals, and did not report more than 100,000 suspicious transactions with designated terrorist groups including Hamas, al-Qaeda and Islamic State.

They also said Mr. Zhao’s exchange supported the sale of child sexual abuse materials and received a large portion of ransomware proceeds.

Binance agreed to a $4.32-billion penalty, and Mr. Zhao paid a $50 million criminal fine plus $50 million to the US Commodity Futures Trading Commission.

“I’m sorry,” Mr. Zhao told the judge before being sentenced.

“I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program … I realize now the seriousness of that mistake.”

Much of Binance’s misconduct, including its weak money laundering controls, was first reported by Reuters.

Mr. Zhao will surrender voluntarily to serve his sentence, most likely at a detention center near Seattle-Tacoma International Airport.

“Not prioritizing compliance is a few shades below criminal intent. It’s bad, but it’s below the usual requirement of specific intent” that would justify a years-long sentence, said Robert Frenchman, a lawyer specializing in white-collar crime.

But given the scale of Binance’s violations and the massive fines imposed, he should not have expected probation or home detention, Mr. Frenchman added.

NOT A MONSTER
Prosecutors had told the judge a tough sentence would send a clear signal to other would-be criminals.

“We are not suggesting that Mr. Zhao is Sam Bankman-Fried or that he is a monster,” prosecutor Kevin Mosley said.

Mr. But Zhao’s conduct, he said, “wasn’t a mistake. This wasn’t a regulatory ‘oops.’”

Mr. Zhao stepped down as Binance’s chief in November, when he and the exchange he founded in 2017 admitted to evading money-laundering requirements under the Bank Secrecy Act.

In seeking probation, defense lawyers said others who admitted to similar wrongdoing, including BitMEX founder Arthur Hayes, were not locked up.

Mr. Zhao “wanted to make a difference in the world,” but made mistakes, defense lawyer Mark Bartlett said.

Mr. Jones said the three-year sentence requested by prosecutors was inappropriate because they did not show that Mr. Zhao knew in advance about illegal activity.

“It’s always the case the government asks for more than they think they’ll get,” said Mr. Frenchman. “Going that much above guidelines for a pleader is unusually aggressive.”

Several other crypto moguls are also in the crosshairs of US authorities after the collapse of crypto prices in 2022 exposed fraud and misconduct across the industry. — Reuters

Breast cancer screening should begin at age 40, US panel says

ANGIOLA HARRY-UNSPLASH

NEW YORK — Women at average risk for breast cancer should get screening mammograms every other year starting at age 40, the US Preventive Services Task Force (USPSTF) said on Tuesday, cementing insurance coverage for the procedure for that age group under the law.

The USPSTF’s influential recommendation, published in JAMA, reverses its controversial 2009 guidance that breast cancer screening should begin at age 50.

Its updated guidelines bring it in line with other major organizations that say women at average risk of breast cancer should start screening at age 40.

Those organizations include the American Cancer Society, the American College of Obstetricians and Gynecologists, and the National Comprehensive Cancer Network.

A 2016 update from the USPSTF had said women could start screening at age 40 if they and their doctors so desired, but that update led “to widespread confusion for both physicians and patients,” said Dr. Evita Singh, Director of Breast Imaging at Karmanos Cancer Institute in Detroit.

US insurers are already required by law to fully cover mammograms for women over age 40 who want them, but the USPSTF’s recommendation will now ensure the continuity of that coverage under the Affordable Care Act beyond next year.

By lowering the age to start biennial screening to 40, the USPSTF is acknowledging evidence that more women under the age of 50 are now getting diagnosed with breast cancer.

Black women, in particular, stand to benefit from earlier screening, experts say. Breast cancer mortality is 40% higher among Black women than among white women, and Black women are more likely to get breast cancer at younger ages, the USPSTF report noted.

“There should hopefully be less confusion on the ‘right’ age to consider screening for average risk people,” said Deirdre Saulet, vice president of cancer care at Carrum Health, a digital marketplace for employers to purchase bundled healthcare services.

“I would anticipate that a greater proportion of the primary care doctors in the country would be recommending starting at age 40 for women of average risk,” said Dr. Carol Mangione, chair of the USPSTF.

Nearly half of all women have dense breasts, which increases the risk for breast cancer, but the task force says there is not yet enough evidence to recommend for or against additional screening with breast ultrasound or magnetic resonance imaging in these individuals.

The 16-person USPSTF is appointed by the secretary of the US Department of Health and Human Services to independently develop clinical practice guidelines. It is composed of medical professionals serving four-year terms. — Reuters

Bird flu may infect cows outside the US, says WHO

UNITED STATES MISSION GENEVA

GENEVA — There is a risk that the H5N1 bird flu virus, present in many wild birds, may infect cows in countries beyond the United States as they migrate, a World Health Organization (WHO) official said on Tuesday.

US officials are seeking to verify the safety of milk and meat after confirming the H5N1 virus in 34 dairy cattle herds in nine states since late March, and in one person in Texas.

“With the virus carried around the world by migratory birds, certainly there is a risk for cows in other countries to be getting infected,” Wenqing Zhang, head of WHO’s Global Influenza Programme, said at a news briefing in Geneva.

The virus is widespread among wild birds in the United States and sometimes infects poultry and even outdoor cats, but up until now, has been rare in cows.

Zhang reiterated that the U.N. agency deems the overall public health risk posed by the virus to be low but urged vigilance, especially among farm workers.

While the virus is not thought to be able to spread through milk, Zhang repeated long-standing WHO advice to only consume pasteurized milk.

Asked to evaluate U.S. transparency on the outbreak so far, Zhang said the global body had received regular updates and praised a decision to share the virus’ genetic sequence early.

“I do think the collaboration with U.S. CDC (Centers for Disease Control and Prevention) and the information we’ve received so far enables us to monitor the situation and to update the preparedness measures,” she said. — Reuters

EXPLAINER | Bridging the skills gap with vocational education for a future-ready workforce

BW FILE PHOTO

The Philippines has 40 million people in its labor force who can easily be upskilled, reskilled, and retooled, but work must be done to ensure a future-ready workforce that is adept in fields that require a high proficiency in reading and mathematics, such as data analytics and robotics.

Bernardo M. Villegas is an economist, accountant, professor at the University of Asia and the Pacific, and research director of the Center for Research and Communication, Manila. In this Explainer video, he talks about Philippine education vis-a-vis its skills gap, the four concurrent revolutions happening in the country, and how the country needs to tweak its K-to-12 system so “more of our high school students become technical workers rather than possessors of academic degrees that lead to nowhere.”

BSP sees April inflation at 3.5-4.3%

A customer buys rice at a stall in Paco Market, Manila, April 6, 2024. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

HEADLINE INFLATION may have accelerated further in April and possibly breached the 2-4% target, the Bangko Sentral ng Pilipinas (BSP) said.

The central bank’s month-ahead forecast showed that inflation likely settled within the 3.5%-to-4.3% range in April. This is slower than the 6.6% print in April 2023.

The upper end of the forecast would exceed the 2-4% target band for the first time in four months.

On the other hand, the lower end would be slower than the 3.7% inflation recorded in March.

The Philippine Statistics Authority (PSA) is scheduled to release April inflation data on May 7.

“Continued price increases for rice and meat along with higher gasoline prices and the peso depreciation are the primary sources of upward price pressures for the month,” the BSP said in a statement on Tuesday.

Latest data from the Agriculture department showed that local well-milled rice averaged P45-P55 a kilo as of April 29 from P39-P46 a year ago. A kilo of regular milled rice averaged P46-P52 as of April 29 from P34-P42 a year ago.

For the month of April, pump price adjustments stood at a net increase of P2.25 a liter for gasoline, and P0.50 a liter for diesel. Kerosene prices had a net decrease of P0.80 a liter.

Earlier this month, the peso sank to the P57 level for the first time in nearly 17 months or since November 2022.

BSP Governor Eli M. Remolona, Jr. earlier said that the BSP “stands ready to manage any unnecessary movement and excessive volatility.” He also noted the peso’s recent performance has been due to the US dollar’s strength amid the Middle East conflict. 

“Meanwhile, lower prices of fish, fruits, vegetables as well as lower electricity rates and the rollback in LPG (liquefied petroleum gas) prices could offset the upside price pressures,” the BSP added.

Manila Electric Co. (Meralco) lowered its overall rate by P0.9879 per kilowatt-hour (kWh) to P10.9518 per kWh in April from P11.9397 in March due to a drop in generation and transmission charges.

Prices of LPG were also lower for the month. Petron Corp. implemented a P1 per kilogram rollback in LPG prices for April.

Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail note that food inflation will continue to be a “significant driver” of overall inflation until July.

“Once the base effect from food inflation starts fading in August, and inflation begins to moderate, the central bank may have more flexibility to adjust its monetary policy stance, depending on the broader economic conditions,” he said.

Food inflation rose to 5.7% in March, its fastest print in four months or since the 5.8% seen in November 2023.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also noted palay (unmilled rice) prices have increased due to the El Niño dry spell.

Agricultural damage due to the El Niño has reached P4.39 billion as of April 23. Rice losses hit P2.71 billion, accounting for 62% of the total agricultural damage.

In March, rice inflation surged to 24.4%. This was its fastest print since the 24.6% in February 2009.

POLICY PAUSE
Meanwhile, the central bank said that it will “continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making.”

Mr. Roces said that the central bank will likely extend its policy pause at its next meeting.

“Given the elevated inflation readings, we anticipate the BSP to take a proactive approach during their upcoming policy meeting on May 16 where we expect steady rates,” he said.

The Monetary Board stood pat for a fourth straight meeting in April, keeping its benchmark rate at a near 17-year high of 6.5%.

From May 2022 to October, the Monetary Board has hiked borrowing costs by 450 basis points.

The BSP is likely to retain its hawkish tone “to signal their commitment to price stability,” Mr. Roces said.

“With inflation projected to overshoot the target in the subsequent months, the BSP will maintain a tight monetary policy stance to anchor inflation expectations and prevent second-round effects,” he said.

Mr. Roces said the BSP may have more room to loosen policy in the second half as inflationary pressures begin to ease.

Mr. Ricafort also noted some US Federal Reserve officials recently signaled cautiousness before cutting rates, “especially in ensuring that inflation is well anchored towards the Fed’s target of 2%.”

The Fed’s two-day policy meeting ends on Wednesday (May 1).

Q1 GDP likely grew by 5.8-6.3%, says Recto

People shield themselves from the scorching sun while walking along EDSA in Quezon City, April 18, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

PHILIPPINE ECONOMIC GROWTH in the first quarter could have settled between 5.8% and 6.3%, Finance Secretary Ralph G. Recto said.

“Anything higher than 5.5% is a win because last year we grew by 5.5%. If we grew by 5.8%, that’s good enough. That should be one of the highest in the region, if not one of the highest in the world,” he told reporters late on Monday.

Gross domestic product (GDP) expanded by 5.5% in 2023. For 2024, the government is targeting 6-7% GDP growth.

“The target is 6%, but because I’m realistic, it seems (first-quarter GDP) may be closer to 5.8%. But there is still hope that we hit the 6% target,” Mr. Recto said in mixed English and Filipino.

“If we get lucky, we could even get 6.3%, that depends on inflation. All of those into account, (we forecast) 5.8% to 6.3%.”

The lower end of Mr. Recto’s forecast would be faster than the 5.5% growth in the fourth quarter, but slower than the 6.4% expansion in the first quarter of 2023.

“In the first quarter last year, growth was high, so we’re starting from a high base. Put that in perspective. If we can achieve 5.8%, that’s good,” he added.

The Philippine Statistics Authority (PSA) is set to release first-quarter GDP data on May 9.

Meanwhile, the Finance chief said that inflation is still the “biggest worry.”

“If we can reduce inflation, GDP growth will be higher. So, we’re looking at that,” Mr. Recto said.

The Bangko Sentral ng Pilipinas (BSP) expects inflation to settle within the 3.5%-to-4.3% range in April. Headline inflation accelerated for a second straight month to 3.7% in March.

Mr. Recto said inflation will likely breach the BSP’s 2-4% target range in the coming months.

“That’s always been expected, maybe in the second or third quarter, according to the BSP. But within the year, we expect that it will still be within the range of 2-4%,” he said.

The BSP earlier cautioned that inflation may temporarily overshoot the 2-4% target band over the next two quarters.

The central bank expects inflation to average 3.8% this year.

Mr. Recto said that economic managers are working on initiatives to manage inflation.

The Inter-Agency Committee on Inflation and Market Outlook met last week to discuss strategies to tame inflation such as boosting agricultural productivity, expediting the issuance of African Swine Fever vaccines and combatting anti-competitive practices, among others.

President Ferdinand R. Marcos, Jr. also recently signed an order that seeks to ease the importation process of agricultural products and remove non-tariff barriers. — Luisa Maria Jacinta C. Jocson

Philippine firms tackle wage hike conundrum

PEOPLE are seen at a job fair in Marikina City Hall, April 27, 2024. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Kyle Aristophere T. Atienza, Reporter and Chloe Mari A. Hufana

ALEXANDER V. SUYAT, 36, trained to become a security guard in 2016 after years of working as a janitor, thinks he could earn more  to support his wife and two kids.

He earns P610 ($10.59) for an eight-hour work shift — the minimum wage in the Philippine capital — and he has high hopes that the P150 legislated wage increase proposed in Congress would soon become a law.

“My salary goes to many things — food and school for my children,” he told BusinessWorld in Filipino while on a break. “Many say P150 is too small, but I’ll take it because it’s better than nothing.”

Mr. Suyat’s wife works as a saleslady in a nearby mall, and their income, which they try to increase by working overtime, is just enough for the family to get by. “Prices are so high now, it’s so hard to save even if you have a stable job.”

As the couple’s income lags, the cost of living keeps rising. Philippine inflation quickened for a second straight month in March as rice prices continued to surge. Inflation accelerated to 3.7% from 3.4% in February, according to the local statistics agency.

The economy expanded by 5.5% last year and is expected to grow by 6-7% this year, still among the fastest in the region.

Despite that strong growth, wages have remained flat, and workers are pressing the government of President Ferdinand R. Marcos, Jr. to increase wages nationwide in the face of spiraling prices.

Daily minimum wages in the Philippines, which vary per region, averaged P354.32 from 1989 until 2024, reaching an all-time high of P610 in Metro Manila last year and a record low of P89 35 years ago, according to Trading Economics, citing Labor department data.

The minimum wage in the southern Philippine region of Bangsamoro — the poorest in the country — ranged from P316 to P361.

“A P150 increase is welcome and gives some relief to workers and their families, but it doesn’t even restore wages to their level after the last legislated wage hike in 1989,” Jose Enrique “Sonny” A. Africa, executive director at think tank IBON Foundation, said in a Viber message.

“The P370-plus wage hikes since 1989 haven’t been enough to keep up with inflation and the real value of the minimum wage in all regions is worth less now than 35 years ago,” he added.

The country’s largest labor organization said the El Niño weather event and climate change “justify a wage increase, particularly in sectors most vulnerable to these changes.” 

“Workers in agriculture, construction and other outdoor industries face increased health risks and disruptions to their work due to extreme weather conditions,” Federation of Free Workers Chairman Jose Sonny G. Matula said in a Viber message. 

The Philippines adjusts salaries through its wage boards, but slow and meager increases against the backdrop of rising costs of living have prompted lawmakers under the Marcos administration to legislate wage increases.

At the House of Representatives, separate bills that seek to increase wages of private sector workers by P150 to P750 have been filed, as well as another that mandates a P33,000-a-month entry wage for government employees.

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

Government economic managers have warned of the consequences of legislating wage increases. National Economic and Development Authority Secretary Arsenio M. Balisacan last month said the Senate bill could cut economic output by 0.5 percentage point, stoke inflation and worsen joblessness.

The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group, said the legislated wage hike would make it harder for companies to recover from the coronavirus pandemic and reverse business confidence.

“There were already positive signs from businesses, and confidence was gradually increasing after the pandemic,” PCCI Chairman George T. Barcelon said by telephone. He added that geopolitical tensions, persistently high inflation and the peso’s depreciation have dampened that optimism.

‘BARELY A DENT’
Mr. Barcelon said lawmakers should take into account an impending energy crisis in the whole wage hike debate as the country’s sole indigenous source of natural gas gets depleted by 2027.

“We suggest that the discussion on wage hikes be left to the Regional Tripartite Wages and Productivity Boards so that all stakeholders are represented to be able to balance the needs of workers, the capability of enterprises and varying conditions across industries and regions,” Ebb Hinchliffe, executive director of the American Chamber of Commerce of the Philippines, Inc. said in a Viber message.

British Chamber of Commerce Executive Director and Trustee Christopher James Nelson noted that while they understand workers’ predicament, in the end, inflation from wage hikes could bite them.

“We understand the concerns workers have, but inflation is a macroeconomic issue,” he said in a phone interview. “A wage hike in itself will have an inflationary impact, which will, again, impact workers.”

Mr. Nelson said persistently high inflation also keeps the Philippine central bank from cutting its benchmark interest rates, effectively increasing companies’ borrowing costs.

“Wage hikes won’t be inflationary if businesses aren’t so rigid about the profits they insist on making,” Mr. Africa said. “There are many factors causing inflation like the recent supply chain disruptions, commodity price fluctuations, currency depreciation and other external shocks. Undue alarmism about wage hikes is really just placing the burden of corporate profit-making on workers.”

A legislated wage hike would barely make a dent on corporate profits since salaries account for only as much as 11% of their expenses, Mr. Africa said, citing IBON’s study of a recent state-led annual survey of 38,000 companies of all sizes in all sectors.

“A P100 across-the-board wage hike is just 7.1% of profits on average across all firm sizes and 7.5% for micro, small and medium enterprises (MSME), while a P150 increase is just 11% across all firms and 11.3% for MSMEs,” he said.

“Even a P690 increase to raise the average wage to the current P1,207 family living wage is equivalent to just 49% of profits across all companies,” he added.

Economic managers and the business community have warned that a legislated wage hike would mainly affect MSMEs, which account for more than 99% of businesses in the country.

Mr. Africa and Mr. Matula said significantly increasing workers’ wages would boost their spending power, spurring economic activity and benefiting small businesses.

“Wage hikes are an opportunity for economic growth rather than a challenge,” Mr. Matula said. “They mean enhanced purchasing power for workers, who are also consumers. This is likely to benefit businesses, especially MSMEs.”

He said a P100 wage hike, representing a 16% raise based on Metro Manila’s minimum wage now, is not only manageable but also crucial to economic growth. “The P150 wage proposal represents 24.59% of the current P610 daily minimum wage in the National Capital Region, significantly lower than the 39.1% increase seen in 1989.”

Jenet I. Dacumos, a single mom of three who works as a janitress in a mall in Manila, is pessimistic about a legislated wage increase.

“I feel our President doesn’t empathize with the poor, so I don’t expect it to happen,” she told BusinessWorld while resting during her shift. “Food prices are driving me crazy. How can they expect us to live on P610 daily? I need another racket.”