Home Blog Page 1749

US and Taiwan navies quietly held drills in April

The Arleigh Burke-class guided-missile destroyer USS Kidd and U.S. Coast Guard cutter Munro conduct Taiwan Strait transits August 27, 2021. U.S. — NAVY/HANDOUT VIA REUTERS

TAIPEI — The US and Taiwan navies conducted joint drills in the Pacific in April that, officially, did not take place, four people briefed on the matter said, as the two militaries boost cooperation amid rising Chinese military threats.

Washington and Taipei have been expanding their military cooperation in recent years amid almost daily Chinese incursions into Taiwan’s air defense identification zone and drills by Chinese forces near the island.

US-Taiwan military engagement, including visits and training, are kept low-key and are often not officially confirmed because of China’s objection to any military contacts between Washington and Taipei. China claims democratically governed Taiwan as its own territory, which the island strongly rejects.

The drills, which were not publicized, took place last month in the Western Pacific, according to the sources, who requested anonymity given the sensitivity of the matter.

One source said “multiple military assets” were involved. A second source said the drills did not officially exist and were dubbed “unplanned sea encounters,” pointing to a tacit agreement in which both sides claim the exercises were simply the result of coincidental encounters.

“It’s like I am dining in this restaurant, and you also happen to be here,” the source said. “Then it looks like I am only sharing the same table with someone.”

That source also said about half a dozen navy ships from both sides, including frigates and supply and support vessels, participated in the days-long exercises, which were designed to practice “basic” operations such as communications, refueling and resupply.

Taiwan’s navy said in a statement to Reuters that to handle unexpected scenarios at sea and to minimize “interference” with each another, the navy “acts in concert with the US-promoted Code for Unplanned Encounters at Sea,” also known as CUES.

“The Navy often makes contact with vessels of other countries and conducts encounter drills as needed,” the statement said, without elaborating.

The Pentagon declined to comment.

Taiwan and the United States have no official diplomatic relationship, as Washington formally recognizes Beijing but is bound by law to provide Taiwan with the means to defend itself and is the island’s most important international backer.

A third source said although the “unplanned encounters” of the two navies involved mostly basic exercises, such drills are vital to ensure the two militaries can operate together in times of emergency.

The source added that the two navies also practiced various tactical manoeuvres, including searching for underwater targets.

CUES was formulated about a decade ago to help de-escalate tensions between militaries at sea, providing guidelines such as safe speeds and distances, a common communications language, and what actions to take if a ship becomes disabled.

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

Taiwan’s navy chief, Tang Hua, last month visited the United States and discussed how to boost bilateral naval cooperation, Reuters reported. In response, China’s foreign ministry said it firmly opposed “military collusion” between the United States and Taiwan.

This month, Taiwan’s Chief of the General Staff Admiral Mei Chia-shu attended the change-of-command ceremony for U.S. Indo-Pacific Command in Hawaii, which only came to light after he was spotted in the audience in an official picture.

China has long said Taiwan is China’s most sensitive territorial issue, which is a major bone of contention in Sino-US ties.

Beijing has not renounced the use of force to bring Taiwan under its control, while Taipei says the Chinese territorial claims are void as the People’s Republic of China has never governed the island. — Reuters

White House sees no genocide in Gaza, condemns aid convoy attacks

IMAGE VIA ARCHITECT OF THE CAPITOL

WASHINGTON — US national security adviser Jake Sullivan said on Monday that President Joseph R. Biden’s administration does not view the killings of Palestinians in Gaza by Israel in its war with Hamas as genocide.

Mr. Sullivan said the United States wants to see Hamas defeated. He also said that Palestinians caught in the middle of the war were in “hell” and that a major military operation by Israel in Rafah would be a mistake.

“We do not believe what is happening in Gaza is a genocide. We have been firmly on record rejecting that proposition,” Mr. Sullivan told reporters at the White House.

Mr. Sullivan expressed concern about reports of Israeli settlers attacking a humanitarian aid convoy on its way to Erez Crossing in northern Gaza, the second such incident in less than a week. “It is a total outrage that there are people who are attacking and looting these convoys,” Mr. Sullivan said. “It is completely and utterly unacceptable behavior.”

Mr. Biden, who is running for re-election this year, has faced heavy criticism from his own supporters domestically for his support of Israel; some of those critics have accused Israel of committing genocide. More than 35,000 Palestinians in Gaza have died, according to Gaza health officials.

Biden has sought to influence Prime Minister Benjamin Netanyahu’s approach to the war, Mr. Sullivan said, but Israel is a sovereign, democratic nation that ultimately makes its own decisions, Mr. Sullivan said.

“The prime minister doesn’t have to answer to us. He’s got to answer to the Israeli people,” Mr. Sullivan said.

Reiterating a comment made by Mr. Biden on Saturday, Mr. Sullivan said there could be a ceasefire in Gaza now if Hamas would release hostages. The world should be calling on Hamas to return to the negotiating table and accept a deal, Mr. Sullivan said.

The United States is working urgently for a ceasefire and hostage-release deal, Mr. Sullivan said. He said he could not predict when or if such a deal would be sealed. — Reuters

Survey shows LGBTIQ people in EU face less discrimination, more violence

CHANDLERVID85-FREEPIK

VIENNA — Lesbian, gay, bisexual, transgender, intersex and queer (LGBTIQ) people in the European Union (EU) face less discrimination but more physical or sexual attacks than three years ago, a vast survey by an EU rights body showed on Tuesday.

The online survey of more than 100,000 people who identify as LGBTIQ carried out in June, July and August of 2023 found only slight overall changes compared with the previous such survey three years earlier, the EU Agency for Fundamental Rights (FRA) said in a report on the findings published on Tuesday.

“More LGBTIQ people in Europe are now open about who they are. At the same time, they face more violence, harassment, and bullying than before,” the Vienna-based FRA said in a statement on the report.

Data adjusted to allow comparison between surveys showed the proportion of respondents in the 27 EU member states who said they had experienced a physical or sexual attack in the five years before the survey for being LGBTIQ rose to 14% from 11% in the previous survey.

The worst-performing EU countries were Bulgaria (18%) and Latvia (17%). Intersex and trans people had the highest rates.

Roughly 36% of respondents in the European Union reported feeling discriminated against in at least one area of their lives in the year before the latest survey because they are LGBTIQ, down from 42% in the previous one.

The countries with the highest rates were Bulgaria and Cyprus, both with 48%. The people who reported feeling discriminated against the most were intersex (61%) and trans people (54%), the only categories that were above 50%.

The areas of life referred to included work, education, healthcare, contact with public services, as well as in shops, restaurants, bars and night clubs.

The survey also included EU candidate countries Albania, North Macedonia and Serbia.

“Being openly LGBTIQ in Europe should not be a struggle. Even though we see signs of progress, bullying, harassment and violence remain constant threats,” FRA chief Sirpa Rautio said in the statement. — Reuters

Melinda Gates to exit Gates Foundation with $12.5 billion for own charity work

BILL AND MELINDA GATES attend a debate on the 2030 Sustainable Development Goals in Brussels Jan. 22, 2015. — REUTERS

MELINDA FRENCH GATES is leaving the charitable foundation she co-founded with former spouse Bill Gates more than 20 years ago and will get $12.5 billion for her own work to uplift women and families, she said on Monday.

The billionaire benefactors parted ways in 2021 after 27 years of marriage but had pledged to continue their philanthropic work together. Their final divorce order filed in a Seattle court had no details on an agreement reached between the two on how to divide their marital assets.

“Under the terms of my agreement with Bill, in leaving the foundation, I will have an additional $12.5 billion to commit to my work on behalf of women and families,” Melinda Gates said on social media platform X, without disclosing more details about her plans.

With her departure as co-chair, the foundation will change its name to Gates Foundation and Bill Gates will be its sole chairperson, said Chief Executive Officer Mark Suzman.

“After a difficult few years watching women’s rights rolled back in the U.S. and around the world, she wants to use this next chapter to focus specifically on altering that trajectory,” Mr. Suzman said.

The foundation is one of the most powerful and influential forces in global public health, having spent more than $75 billion since its inception to bring a business approach to combating poverty and disease.

From 1994 through 2018, Bill and Melinda gifted about $59.5 billion to the Seattle-based foundation, its website said.

Her last day at the foundation will be June 7.

“I am sorry to see Melinda leave, but I am sure she will have a huge impact in her future philanthropic work,” Microsoft co-founder Bill Gates said in a post on X.

Melinda Gates, who has a net worth of $11.3 billion according to Forbes, manages some of her investments and charitable work through her Pivotal Ventures. The investment company, founded in 2015, focuses on women and families. — Reuters

New Caledonia closes airport, imposes curfew after violence

YOUSEF ALFUHIGI-UNSPLASH

 – New Caledonia mobilized security forces, closed its international airport and imposed a curfew in the capital after protests turned violent and police were attacked, the French High Commission said on Tuesday.

New Caledonia’s government called for calm and condemned the destruction of property.

“Every reason for discontent, frustration and anger could not justify undermining or destroying what the country has been able to build for decades and mortgaging the future,” it said in a statement on Tuesday.

Video showed the police patrolling the streets among burnt-out cars and plumes of smoke, after protesters had set up blockades on key roads on Monday.

The protests and violence happened on Monday ahead of debate on Tuesday in the French National Assembly on changes to the New Caledonian constitution. The proposed changes would allow more French residents to vote in New Caledonia elections, which independence supporters fear will dilute the vote of indigenous Kanak.

New Caledonia President Louis Mapou was elected in 2021 as the first pro-independence indigenous Kanak leader. Elections for New Caledonia’s assemblies and congress due in May have been delayed until the end of the year.

“We hope that our voice, our dignity and our pride of being the people of Kanaky, will be heard by the General Assembly,” one protestor said.

The French High Commission said in a statement that significant disturbances in the capital, Noumea, and surrounding townships were ongoing, and numerous buildings including shops, pharmacies and car dealerships were damaged. So far 36 people had been arrested.

It said security forces had been mobilized, all gatherings had been banned in the greater Noumea area, and a liquor ban had been put in place.

The curfew would be imposed from 6 p.m. (0700 GMT) on Tuesday until 6 a.m. on Wednesday in Noumea.

The international airport in Noumea had been closed and all commercial flights cancelled, the airport operator said in a statement on Tuesday.

One of five island territories spanning the Indo-Pacific held by France, New Caledonia is the centerpiece of French President Emmanuel Macron’s plan to increase its influence in the Pacific.

The nickel-rich territory is 20,000 km (12,427 miles) from France, with a population of 270,000 including 41% Melanesian and 24% of European origin, mostly French.

A 1998 Noumea Accord helped end a decade of conflict that resulted in 80 deaths by outlining a path to gradual autonomy and restricting voting to the indigenous Kanak and migrants living in New Caledonia since 1998.

France wants to open voting rights to migrants who have lived in New Caledonia for 10 years.

The unrest prompted New Zealand to postpone a visit this week by Foreign Minister Winston Peters, which a spokesperson said would allow authorities to focus on the current situation.

“We are aware of events in New Caledonia, and hope that peace and calm will prevail,” the spokesperson said. – Reuters

Recovering euro keeps dollar ‘gorilla’ from derailing ECB rate outlook

BW FILE PHOTO

 – The euro has resisted falling to parity with the dollar for now, thanks to a rosier economic backdrop, to the relief of European Central Bank policymakers who could be struggling to detach themselves from the Federal Reserve’s monetary policy outlook.

Just a month ago, the euro’s fall to five-month lows prompted some talk among analysts about a return to parity against the dollar as the fragility of the euro zone contrasted with a resilient US economy that boosted the dollar and prompted investors to dial back Federal Reserve rate cut bets.

Lower euro area interest rates than those in the United States remain a headwind, but the euro seems on a stronger footing thanks in part to an improving macro backdrop.

The most recent round of purchasing manager surveys, for example, showed business activity in the euro zone expanded at a faster clip than that in the United States in April for the first time in a year.

That has helped the euro recover roughly 1.7% from April’s lows to around $1.0708 EUR=EBS.

“We’re starting to see that divergence between economic performance close, offering some help to the euro,” said Fiona Cincotta, market strategist at City Index.

“That is also a cause for relief for the ECB and a reason for them to be more relaxed as well. It’s almost as if their ducks have lined up quite nicely so far.”

Citi’s economic surprise index for the euro zone has trended lower in recent weeks, but at 27, is comfortably in positive territory, as business activity and growth improve. In contrast, the US index has fallen below zero for the first time since early 2023, as crucial data such as growth and employment have missed expectations.

On a trade-weighted basis, the euro is up 0.5% this year EUREER=ECBF and not far from 2023’s record highs. A lot of this is down to weakness in the likes of the Chinese yuan and Japanese yen.

That offers a less negative picture on the euro than purely looking through the lens of the dollar in that it neutralizes some imported inflation.

 

GORILLA IN THE ROOM

Still, a sustained drop in the euro could boost import prices and rekindle inflation, thereby limiting the ECB’s scope to cut rates.

The euro has lost around 2.5% against the dollar this year and the ECB, which does not target an exchange rate, cannot easily ignore more weakness.

“To a certain extent, our data and decisions are naturally influenced by the Fed. We are not working in a vacuum. With the dollar, the Fed is, figuratively speaking, the gorilla in the room,” Austrian central bank Governor Robert Holzmann told Handelsblatt in an interview published on May 8.

Other factors such as a spike in the oil price, or a deterioration in geopolitical tensions could undermine the euro area by again hurting the growth outlook and magnifying the inflationary effect of a weaker currency.

Right now, markets show traders believe the ECB will deliver three quarter-point cuts, bringing the benchmark rate to around 3.25% by year end. The Fed is expected to cut just twice, to a range of 4.75-5.25%, leaving the premium of U.S. rates over euro zone ones at 175 basis points.

Some analysts think three cuts from the ECB and no cuts from the Fed this year, bringing the gap to 213 bps, might tip the euro back to parity, which could sound alarm bells at the ECB if currency weakness threatens to fuel inflation.

The euro last hit parity around August 2022, when the rate gap between the two central bank rates was 238 bps.

“If the market prices out Fed rate cuts for this year and pushes the cuts later into next year and the ECB pricing remains at the current levels, parity becomes a possibility and such a move would be enough to make the ECB delay its easing cycle,” Athanasios Vamvakidis, global head of G10 forex research at BofA, said.

Neil Mehta, a portfolio manager at BlueBay Asset Management, said the currency market was where the divergence in interest rates would play out most clearly, with the dollar emerging as the likely winner, with parity for the euro, a possibility.

“It’s not the base case, but we certainly see the risks tilted in that direction. We think the first step is $1.05,” he said. – Reuters

Walmart to lay off hundreds of corporate staff and relocate others, WSJ reports

CORPORATE.WALMART.COM

Walmart is cutting hundreds of corporate jobs and asking most remote workers to move to offices, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Meanwhile, workers at the US retail giant’s smaller offices in Dallas, Atlanta and Toronto are being asked to move to other central hubs such as Walmart’s corporate headquarters in Bentonville as well as Hoboken or Southern California, the report added.

Walmart will still let staff work remotely part time, as long as they are in offices a majority of the time, the report said.

Walmart employed approximately 2.1 million associates as of Jan. 31, 2024, according to regulatory filings.

The company has been making moves to shrink its workforce over the past year and had said in April last year that it expects about 65% of its stores to be serviced by automation by the end of its fiscal year 2026.

In February 2023, it shut three of its US technology hubs and asked hundreds of workers to relocate to keep their jobs, pushing for more employees to report to work from office.

Walmart didn’t immediately respond to a Reuters request for comment. – Reuters

Biden signs into law ban on Russian nuclear reactor fuel imports

REUTERS

 – President Joe Biden signed into law a ban on Russian enriched uranium on Monday, the White House said, in the latest effort by Washington to disrupt President Vladimir Putin’s invasion of Ukraine.

The ban on imports of the fuel for nuclear power plants begins in about 90 days, although it allows the Department of Energy to issue waivers in case of supply concerns.

Russia is the world’s top supplier of enriched uranium, and about 24% of the enriched uranium used by US nuclear power plants come from the country.

The law also unlocks about $2.7 billion in funding in previous legislation to build out the US uranium fuel industry.

“Today, President Biden signed into law a historic series of actions that will strengthen our nation’s energy and economic security by reducing, and ultimately eliminating, our reliance on Russia for civilian nuclear power,” Jake Sullivan, the national security adviser, said in a statement.

Mr. Sullivan said the law “delivers on multilateral goals we have set with our allies and partners,” including a pledge last December with Canada, France, Japan and the United Kingdom to collectively invest $4.2 billion to expand enrichment and conversion capacity of uranium.

The waivers, if implemented by the Energy Department, allow all the Russian uranium imports the US normally imports through 2027.

Anatoly Antonov, Russia’s ambassador to the United States, said that Washington’s decision is leading to shocks in global economic relations, but will not bring the desired results.

“The delicate balance between exporters and importers of uranium products is being disrupted,” the Russian embassy in Washington cited Mr. Antonov as saying in a post on its Telegram messaging channel.

“Life has confirmed that the Russian economy is ready for any challenges and quickly responds to emerging difficulties, even extracting dividends from the situation. It will be so this time too.” – Reuters

How tourists and local communities contribute to a sustainable economy

BW FILE PHOTO

by Patricia Mirasol, Producer

Community engagement matters when it comes to fostering a sustainable economy, according to Riza Joy A. Abat, municipal environment and natural resources officer designate of San Juan, La Union, a province frequented by surfers and beachgoers alike.

The local government does its part in community awareness – but the community has a bigger role, she said in an interview on April 22.

“If you’re a tourist, you become part of that local community for some time, and [thus] contribute to its sustainable development, as well as the preserving of its environment,” she said in the sidelines of the Pawi-CAN Sustainability Project launch of Athena, an executive assistant firm.

San Juan has beach marshals and beach cleaners, but “it may not be sufficient if tourists don’t care about their impact to the environment,” Ms. Abat told BusinessWorld.

“Without awareness embedded, it’s difficult to manage tourism areas,” she added.

 

“Pawi-CAN”

“PawiCan” in San Juan, La Union

Athena partnered with La Union’s local government to deploy turtle-shaped bins in the Urbiztondo, San Juan areas patronized by tourists and remote workers.

Designed by visual artist John Parmisano, the turtle bins are part of the Pawi-CAN Sustainability Project, which aims to promote responsible garbage disposal and environmental protection.

The April 22 launch also had a coral reef planting workshop facilitated by EcoSurf.

“This is a sustained effort that will be there for six months,” said Glenn Anthony Chua, Athena’s marketing director, in a separate interview. “After, it will break into smaller Pawi-CANS…this is not a one-and-done activity.”

Updates will be posted on the progress of coral propagation, as well as how many bottles have been collected by the bins, Mr. Chua said.

Other partners of the project are the San Juan Resort and Hotel Association Inc (SJRRHASS), Urbiz Garden, Dragon 8 Junkshop, ECOSURF Program Fostering Education and Environmental Development Inc (FEED, INC), Coastal Underwater Resource Management Actions (CURMA), and La Union Soul.

 

Caring for the “locals”

DENR-REGION 12

San Juan may be the surfing capital of the northern part of Luzon, said Ms. Abat, but it’s also home to pawikans – sea turtles that promote the ocean’s health and biodiversity – whom residents call “locals.”

All marine turtles are protected pursuant to the Wildlife Resources Conservation and Protection Act (Republic Act No. 9417) of 2001, also known as the Philippine Wildlife Act.

“May instances when pawikans go to…nest and dinadagsa sila ng tourists. Nase-stress ang mga pawikans, at bumabalik na lang sila sa dagat (When tourists mill about the pawikans when they go to nest, the turtles get so stressed they end up going back to the ocean instead),” Ms. Abat said.

The Pawi-CAN shoots two birds with one stone, she said.

“It’s solid waste management plus educating them about the pawikan,” she added. “People will ask… and the locals can [spread awareness] about these endangered species.”

OpenAI unveils new AI model as competition heats up

ChatGPT maker OpenAI said on Monday it would release a new AI model called GPT-4o, capable of realistic voice conversation and able to interact across text and image, its latest move to stay ahead in a race to dominate the emerging technology.

New audio capabilities enable users to speak to ChatGPT and obtain real-time responses with no delay, as well as interrupt ChatGPT while it is speaking, both hallmarks of realistic conversations that AI voice assistants have found challenging, the OpenAI researchers showed at a livestream event.

“It feels like AI from the movies … Talking to a computer has never felt really natural for me; now it does,” OpenAI CEO Sam Altman wrote in a blog post.

Microsoft-backed OpenAI faces growing competition and pressure to expand the user base of ChatGPT, its popular chatbot product that wowed the world with its ability to produce human-like written content and top-notch software code.

At the livestream event, OpenAI researchers showed off ChatGPT’s new voice assistant capabilities. In one demo, ChatGPT used its vision and voice capabilities to talk a researcher through solving a math equation on a sheet of paper.

In another demo, researchers showed the GPT-4o model’s capability of real-time language translation.

OpenAI’s demonstrations verged on science-fiction, with ChatGPT and its interlocutor at one point engaging in coquettish banter. The OpenAI researcher told the chatbot he was in a great mood because he was demonstrating “how useful and amazing you are.”

ChatGPT responded: “Oh stop it! You’re making me blush!”

Altman posted on X after the demo, “her,” in what appeared to be a reference to the so named 2013 film by Spike Jonze about a man falling in love with his AI assistant, voiced by Scarlett Johansson.

OpenAI’s chief technology officer, Mira Murati, said at the event that the new model would be offered for free because it is more cost-effective than the company’s previous models. Paid users of GPT-4o will have greater capacity limits than the company’s free users, she said. The GPT-4o model will be available in ChatGPT over the next few weeks, the company said.

In addition, free ChatGPT users now have access to a “browse” feature that enables ChatGPT to display up-to-date information from the web, Ms. Murati told Reuters after the event. The company does not intend to make money off free users through selling ads, Ms. Murati said.

Shortly after launching in late 2022, ChatGPT was called the fastest application ever to reach 100 million monthly active users. However, worldwide traffic to ChatGPT’s website has been on a roller-coaster ride in the past year and is only now returning to its May 2023 peak, according to analytics firm Similarweb.

OpenAI made the announcements a day before Alphabet is scheduled to hold its annual Google developers’ conference, where it is expected to show off its own new AI-related features. Reuters reported last week that OpenAI planned to announce an AI-powered search product, citing sources. But the company decided to delay the search product announcement, according to one source familiar with the matter.

Shares of Alphabet were down 0.4% on Monday afternoon, after falling nearly 3% earlier in the day. Microsoft shares were down 0.2%. – Reuters

Sanden and Copeland to host ‘Smarter Cold Room Revolution’ on May 21

Join Sanden and Copeland for the Smarter Cold Room Revolution at Laus Group Event Center in San Fernando, Pampanga on May 21, 2024.

Explore advanced cold chain technology alongside industry leaders and experts. Discover innovative solutions that enhance efficiency, reliability, and sustainability through discussions, workshops, and live demonstrations.

Experience the benefits of smarter cold room solutions firsthand, optimizing operations, reducing costs, and promoting environmental sustainability.

Attendance is FREE, but spots are limited, so RSVP by May 10, 2024!

To know more about this event, visit https://www.sandencoldchain.com.ph/media-and-events-2/.

 


Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

BSP seen to start easing in 3rd quarter

BW FILE PHOTO

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) could begin easing policy as early as the third quarter if inflation continues to stabilize, analysts said.

“At the earliest, rate cuts could begin next quarter, which would ease the pressure on households,” Moody’s Analytics said in its weekly highlights report.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said inflation might continue to “surprise on the downside before falling sharply by the third quarter.”

“By then, we expect BSP to have scope to start easing monetary policy all the more given the signs of a slowing economy after first-quarter GDP showed a disappointing print of 5.7% year on year,” he said in an e-mailed note on Monday.

BSP Governor Eli M. Remolona, Jr. has said the central bank will consider rate cuts if inflation can settle firmly at around 3% for several months.

The Monetary Board is set to have its next policy review on Thursday. A BusinessWorld poll showed that 17 of 19 analysts expect the central bank to keep its key rate steady at a 17-year high of 6.5%.

In a follow-up e-mail, Moody’s Analytics economist Sarah Tan said the BSP would consider inflation and the peso’s recent performance in its monetary decisions.

“There has been good progress made on the inflation front, with the latest print for April settling within BSP’s 2-4% target range for a fifth straight month,” she said.

Inflation quickened to 3.8% in April from 3.7% in March. However, it was the fifth straight month that inflation settled within the BSP’s 2-4% target.

The BSP expects inflation to average 3.8% this year.

“While we expect inflation to slightly bump around the upper limit over the next few months as dry weather associated with the El Niño climate pattern hurts food harvests and disrupts supply, inflation will return to the target range by early in the third quarter,” Ms. Tan said.

The central bank earlier cautioned that inflation could temporarily overshoot the 2-4% target in the next two quarters due to base effects and weather conditions that have hurt agricultural output.

The El Niño in the tropical Pacific is seen weakening but “hotter and drier conditions” continue to persist, according to the state weather bureau.

Farm damage from El Niño had climbed to P6.35 billion as of May 8. Rice was the most affected crop, accounting for 51.93% or P3.3 billion of the total damage. This was followed by corn at P1.94 billion and high-value crops at P1.07 billion.

“El Niño is expected to wane starting in May and we can expect some relief from the heat thereafter, which could also benefit our agriculture sector,” Mr. Mapa said.

Agricultural production was flat in the first quarter, growing by 0.05% to P428.99 billion amid the dry spell.

Mr. Mapa said inflation could sharply decelerate by the third quarter.

“Market participants are currently predicting inflation breaching the top end of the BSP’s inflation target of 2-4%. However, if rice prices stay unchanged at roughly P55 per kilo, oil prices sustain their decline and domestic demand stays soft, we could see inflation skirt the target and drop sharply as early as August,” he said.

Meanwhile, Ms. Tan noted that while the peso has weakened in the past few weeks, it is expected to stabilize next quarter.

“Should these developments materialize, it will give the BSP confidence to trim rates as early as August — the only Monetary Board meeting in the third quarter,” she added.

After Thursday, the Monetary Board’s next two policy meetings are on June 27 and Aug. 15.

However, Ms. Tan said rate cuts could be delayed if inflation further accelerates.

“However, there is a chance that monetary easing could be delayed till October should inflation accelerate above the target range for longer than expected, or if the Philippine peso weakens further,” she said.

“In this regard, the BSP will keep an eye on the movements by the US Federal Reserve to ensure stability of the peso,” she added.

Meanwhile, HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said the BSP would likely cut rates by the fourth quarter, after the US Federal Reserve begins easing.

“The BSP has the luxury to keep its monetary stance tight while the Fed maintains a more hawkish tone. Liquidity in the system remains intact so there is no urgency to loosen the monetary reins,” he said.

Markets were initially anticipating the US central bank to cut rates as early as June, but this has been pushed back to as late as the fourth quarter due to persistent inflation.

Mr. Remolona earlier said that while the central bank monitors the Fed, its decisions are independent.

The US central bank kept its Fed funds rate steady at 5.25-5.5% at the end of its April 30-May 1 meeting.