A Saudi flag flutters atop Saudi Arabia’s consulate in Istanbul, Turkey, Oct. 20, 2018. — REUTERS
DUBAI — Saudi King Salman will undergo treatment at Al Salam Palace in Jeddah for a lung inflammation, the state news agency said on Sunday, hours after he underwent medical tests.
Citing the royal court, the state news agency said the 88-year-old king would be treated with antibiotics until the inflammation subsides.
Due to King Salman’s health issue, Crown Prince Mohammed bin Salman, the de facto Saudi leader, postponed a visit to Japan that had been scheduled to begin on Monday, Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said.
“Saudi Arabia informed the Japanese government that due to the health condition of King Salman of Saudi Arabia, Crown Prince Mohammed’s visit to Japan, which had been scheduled to begin on the 20th, had to be postponed,” Hayashi said at a news conference in Tokyo.
Earlier on Sunday, King Salman underwent medical tests at the royal clinics at Al Salam Palace due to “high temperature and joint pain”, the Saudi state news agency said.
The king was last admitted to hospital in April for a routine checkup, state TV reported then.
King Salman, the custodian of Islam’s holiest sites, became ruler of the world’s top oil exporter in 2015 after spending more than 2-1/2 years as the crown prince and deputy premier.
His illness struck just as the crown prince met with U.S. National Security Adviser Jake Sullivan in the kingdom for talks on a strategic agreement between Washington and Riyadh.
Saudi Arabia’s embassy in Japan did not immediately respond to a request for comment about the crown prince’s cancelled trip. He had been set to meet with Japanese Emperor Naruhito and Prime Minister Fumio Kishida during the trip scheduled from May 20-23. — Reuters
The Observatory breaks ground with residential Sora Tower
Federal Land NRE Global Inc. (FNG), a joint venture between Federal Land, Inc. and Nomura Real Estate Development Co. Ltd., is set to combine decades of experience in real estate development to build The Observatory.
Last May 3, FNG marked a significant milestone in its journey with the groundbreaking ceremony of The Observatory Sora Tower in Mandaluyong City. The event was attended by esteemed guests, including key officials from both FNG and the Mandaluyong City government.
Strategically located at the intersection of three major central business districts: Makati, Bonifacio Global City (BGC), and Ortigas Center, The Observatory provides residents with unparalleled access to prime locations.
The 4.5-hectare township features a neighborhood of residential towers, sprawling retail facilities, and an office building, all seamlessly connected through walkable and open spaces. This integrated approach to urban living ensures that residents, workers, and visitors can enjoy a well-rounded experience with easy access to various amenities and services within the complex.
Carefully curated first tower
Derived from the Japanese word meaning “sky,” Sora Tower, the first residential tower rising at The Observatory, is envisioned to soar over the city, offering its residents a prime location at the heart of urban culture and fast-paced lifestyles in Metro Manila.
The Observatory Sora Tower (Artist’s Perspective)
The Observatory Sora Tower will feature a total of 650 units, each meticulously designed to offer a diverse range of unit types, from studio units to penthouses, ranging in size from 28 square meters to 205 square meters.
Each unit is designed with functionality and practicality in mind, incorporating Japanese elements and features that enhance the overall living experience. For instance, the tower’s design and amenities are inspired by the distinct identities of remarkable districts in the regions and cities of Japan, such as Tokyo, Hokkaido, Kyoto, and Osaka. Sora Tower’s amenities take inspiration from the Shibuya district of Tokyo.
The Observatory Sora Tower provides a diverse range of amenities to cater to the needs and preferences of its residents. Indoors, residents can enjoy the garden lobby, children’s playroom, co-working and business center, yoga studio, fitness gym, entertainment room, and function room. These indoor facilities provide spaces for relaxation, work, exercise, and social gatherings, enhancing the overall living experience within the tower.
For outdoor activities, residents have access to a swimming pool and pool deck, children’s pool, children’s play area, pet park, garden, and outdoor lounge.
The Sora Tower has a user-friendly approach to storage, which aims to maximize the use of space in each unit while maintaining a clean and organized environment.
For instance, the Genkan, a traditional Japanese entryway area, is incorporated into the design of the units of Sora Tower. This space is designed to accommodate outdoor items such as shoes and other footwear, keeping them organized and out of the way. The feature not only adds a touch of Japanese identity to the unit but also helps maintain a clean and clutter-free living space.
The project also incorporates modular elements that can be adjusted to suit the residents’ preferences.
The kitchen storage solutions in the Sora Tower are also designed to optimize the use of space. Unlike traditional kitchen cabinets that often have wasted space, the units feature adjustable shelves that allow for more items to be stored.
In addition, the modular wardrobe design is another example of the project’s focus on storage solutions. With adjustable shelves that can be relocated according to changing needs, these closets are designed to accommodate the evolving lifestyle of the residents while remaining functional and efficient.
Most importantly, the tower features protected spaces within and around the units, providing a secure environment for city living. Residents can enjoy the peace of mind that comes with the elevator and main door key card access, which restricts unauthorized entry and enhances the overall security of the building.
For added convenience, the tower offers three passenger elevators, one passenger or service elevator, and five levels of residential parking, making daily routines effortless.
Residents can also benefit from direct access to retail through shuttle elevators, with lobbies conveniently located at the ground and amenity floors.
The tower’s commitment to convenience is further exemplified by amenities like pressurized fire escape stairs, key card access, and drop-off points at the ground floor and parking level 1, ensuring a seamless and comfortable living experience for all.
Built from collaboration among experts
The Observatory Cybergate Entrance (Artist’s Perspective)
The partnership between Federal Land, Inc. and Nomura Real Estate Development Co. Ltd. aims to create vibrant, sustainable, and innovative communities that meet the diverse needs of modern urban residents.
Federal Land, Inc., with over five decades of experience, has been a driving force in shaping the urban landscape of the Philippines.
On the other hand, Nomura Real Estate Group, with its roots dating back to the 1950s, is a prominent figure in Japan’s real estate sector. Its extensive experience in developing condominiums and detached houses centered in the greater Tokyo area has earned it a reputation for quality and attention to detail.
The Observatory is the culmination of the collaborative work of a team of seasoned experts and internationally-recognized professionals. The master plan and concept design of the residential towers were developed by Nikken Sekkei Ltd., while Garde Co., Ltd. was responsible for the interior and landscape design of the commercial component. Magnusson Klemencic Associates handled the structural engineering design, and Pimentel, Rodriguez, Simbulan & Partners served as the architect of record.
Sora Tower of The Observatory is set to be completed by 2030, and the groundbreaking ceremony marks the beginning of a new era of vibrant city living in Metro Manila.
To discover more about FNG and its projects, visit www.fng.ph.
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Certain genes may identify patients with obesity who are most likely to respond strongly to Novo Nordisk’s weight-loss drug Wegovy, researchers reported on Monday.
The study, released at the Digestive Disease Week meeting in Washington, found a 95% likelihood that patients with this genetic profile would be strong responders to the treatment.
Given the expense of Wegovy, the findings might be used to identify the patients most likely to get the greatest benefit from it, according to Dr. Andres Acosta of the Mayo Clinic in Rochester, Minnesota, one of the researchers.
Some people with obesity have a genetic profile that contributes to what is called a “hungry gut” – that is, they feel full during a meal but become hungry again shortly afterward because food leaves their stomach more quickly than in most other people, Mr. Acosta said.
The study involved 84 patients prescribed Wegovy for treatment of obesity. Those with the genetic variants associated with “hungry gut” lost an average of 14.4% of their total body weight after nine months on the drug and 19.5% after a year, the study found.
By comparison, study participants without this genetic profile lost 10.3% of their body weight after nine months and nothing more by 12 months.
Mr. Acosta said the researchers previously saw a similar pattern in patients taking the weight-loss drug liraglutide, which is marketed under the names Victoza and Saxenda by Novo Nordisk.
While patients without the “hungry gut” genes did lose some weight on Wegovy, they might be able to lose similar amounts with less-expensive therapies, Acosta said. The list price for Wegovy, also called semaglutide, is $1,349.02 per month.
“When you’re going to spend this much money,” Mr. Acosta said, “you have to ask, ‘Is there a cheaper approach that will yield the same results in some patients, maybe other medications or surgery?'”
Larger studies are needed to assess the reliability of the “hungry gut” genetic profile in more diverse populations, the researchers said.
If the new results are confirmed, Mr. Acosta said, doctors can finally tell some of their patients, “‘We know why you are struggling with obesity,’ and we can say with confidence, ‘This expensive drug will help you,’ or, ‘Hey, this might not be for you.'” — Reuters
CIVILIAN VESSELS on a symbolic mission to assert the Philippines’ claim to Scarborough Shoal (Bajo de Masinloc) in the South China Sea were blocked by a Chinese Coast Guard ship while a Philippine Coast Guard vessel kept watch on May 16, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN
MANILA – The Philippines challenged China on Monday to open Scarborough Shoal to international scrutiny after it accused Beijing of destroying the shoal’s marine environment.
“We are alarmed and worried about the situation that’s happening there,” National Security Spokesperson Jonathan Malaya told a press conference.
Mr. Malaya said there was a growing consensus within the Philippine government on the need to file a case against China over the destruction of coral reefs, including the harvesting of endangered giant clams, in the South China Sea.
The Philippines secured a landmark victory in 2016 a case against China that concluded Beijing’s claim to sovereignty over most of the South China Sea had no basis under international law.
China, which has refused to recognise the 2016 ruling and has chafed at repeated mention of the case by Western powers, has repeatedly denied the claims of destruction of coral reefs.
“If you really believe in what you’re saying, open up Bajo de Masinloc to international scrutiny, it has to be a third party,” Mr. Malaya said.
Manila refers to Scarborough Shoal as the Bajo de Masinloc or Panatag Shoal. — Reuters
Engr. Federico A. Monsada, president of the Philippine Technological Council (PTC); and Dr. Reynaldo B. Vea, past president of Mapúa University and Chairman and CEO of iPeople, Inc., stand alongside BatStateU The NEU President Dr. Tirso A. Ronquillo during the official launch of the Philippines’ National Engineering Education Development (NEED) Program, signaling a collaborative effort towards advancing engineering education nationwide.
Batangas State University (BatStateU) launched the Philippines’ National Engineering Education Development (NEED) Program last May 8, marking a transformative step forward in the advancement of engineering education in the Philippines.
Positioned to significantly contribute to the development of highly skilled engineers and professionals who will drive the nation’s progress and prosperity, the NEED Program was officially introduced at the International Conference on Innovations in Engineering Education (ICIEE) 2024.
Propelled by the Center for Innovation in Engineering Education (CIEE), the NEED Program is designed to achieve several outcomes by 2027. These include providing an understanding of the landscape of Philippine engineering education, advancing towards a truly outcomes-based engineering education, supporting the elevation of national accreditation standards, redefining the curricula that meets industry demands, and building sustainable local and global academe-industry networks.
Correlated with this, the NEED program aims to comprehensively enhance engineering education in the Philippines by focusing on six essential components. Initially, it profiles the landscape of engineering education, assessing and refining elements such as curriculum, delivery systems, infrastructure, employability, and industry linkages. It also strengthens outcomes-based engineering education nationwide, offering extensive training for deans and chairs on outcomes-based teaching, learning, and assessment (OB-TLA), curriculum mapping, integration strategies, the CDIO Framework, and engineering education for sustainable development (EESD). Further, it accelerates engineering program accreditation, enhancing participation and compliance among Higher Education Institutions (HEIs) with improved local accreditation standards, mentoring deans and chairs in ABET criteria through the Professional Regulation Commission (PTC), and organizing the National Conference on Quality Assurance in Engineering Education.
Moreover, it also re-engineers the curriculum by developing industry-aligned courses through collaborative efforts involving government, universities, and industry.
Another critical aim is to boost faculty excellence, enhancing their expertise to elevate Philippine HEIs as global centers of engineering education and research excellence.
Lastly, the program enhances engineering research collaboration, increasing research visibility, fostering global engagement, and enhancing scholarly impact.
NEW DELHI – As Prime Minister Narendra Modi faces voter fatigue and some resistance from a resurgent opposition in India’s mammoth general election, foot soldiers of his party’s Hindu nationalist parent have stepped in to help regain momentum, insiders said.
With less than two weeks left of a six-week voting schedule, voter turnout has been lower than previous elections, raising concern within the Bharatiya Janata Party (BJP) that some of its core supporters were staying away.
Mr. Modi’s party, chasing a rare third term in office, has also faced stronger opposition than anticipated in a handful of states, leading election experts and Indian financial markets to adjust forecasts of a landslide win.
With no exit polls allowed until all the voting is completed on June 1, it’s difficult to judge how well or poorly candidates are faring. But most analysts say Modi should be able to retain a majority in the 543-seat parliament when votes are counted on June 4.
“The trend is suggesting that Mr. Modi will be back in power with a reduced majority,” said Rasheed Kidwai, a visiting fellow at the Observer Research Foundation think tank.
But he added: “Any shortfall of a clear mandate of 300 seats for BJP will reflect poorly on Mr. Modi.”
At the start of the campaign, Modi was projected to win up to three-fourths of the seats, with the opposition led by Rahul Gandhi, the scion of the Gandhi-Nehru dynasty, a distant second.
After the first two phases of voting, though, analysts and political workers said the chances of the BJP getting above 362 seats, the two-thirds majority required to bring changes in the constitution, had been affected.
One reason the opposition is clawing back ground is the fading of the euphoria in India’s Hindu majority when Modi inaugurated a temple in January on a site disputed with the country’s minority Muslims.
Bread and butter issues seem to be replacing religious fervor in many parts of the country.
Jobless youth in northern Haryana state have held street protests against the BJP during the campaign and in western Maharashtra, farmers incensed over a ban on onion exports canvassed support for an opposition candidate.
In the big, battleground state of Bihar, a BJP lawmaker has defected to the opposition Congress party saying the poor have been left behind in India’s world-beating economic growth.
Some of the unhappiness is resulting in a swing to the opposition or in apathy, analysts have said.
“The decline in voting has been a cause of concern in recent weeks and we have been working to bring a shift in the numbers,” said Rajiv Tuli, an official at the Rashtriya Swayamsevak Sangh (RSS), the Hindu group that is the ideological parent of the BJP.
“Meetings, outreach campaigns and even a renewed push to remind voters about ensuring a full-majority government comes to power did become critical after the first phase of voting.”
GO OUT AND VOTE
RSS volunteers are hosting neighborhood meetings in their homes to persuade people to go out and vote, said Ritesh Agarwal, the senior publicity official for the group in the New Delhi region.
Three national spokespersons of the BJP said they were aware that the RSS was working to help improve voter turnout but declined comment on how this would affect the BJP.
“I don’t think there is any sense that BJP is in a weak position,” said spokesperson Shehzad Poonawalla, adding that a low turnout affected all parties and that voter numbers had increased after the first two phases.
In Haryana, some youngsters have criticized a government decision to cut back on recruitment to the military and switch to temporary commissions to control a bloated defense budget. Jobs are so scarce, residents say, that people are lining up for employment in Israel which has turned to India to plug a labor shortage following the war in Gaza.
“We see no future for ourselves,” said 28-year old Kuldeep Singh in the northern state’s Jahangirpur village, where black ink was smeared on walls displaying Modi’s campaign slogans.
Ganesh Wadhwan, a farmer in Maharashtra’s Dindori constituency said he sought funds for opposition candidate Bhaskar Bhagare ahead of the vote there on Monday to punish the Modi government for blocking onion exports.
“We believed Modi would double our income as promised. But instead, our incomes have halved,” said Wadhwan.
Some analysts say there is also considerable disapproval of the government in Bihar, one of India’s poorest states which has fallen behind as incomes climb in other parts of the country.
Together, Maharashtra, Bihar and Haryana account for nearly 100 seats in parliament, but it was not clear how far the discontent had spread there or in other parts of the country.
The opposition has said its campaign rallies are drawing good crowds and Gandhi, the alliance leader, is predicting it will unseat the BJP and form the government.
India’s stock markets fell sharply last Monday on the possibility of political instability before recovering later in the week.
The underground betting market is currently predicting that the BJP will win fewer than 300 seats but well clear of the 272 required for a majority, according to a trader who runs one of the betting pools.
He declined to be identified as these pools are illegal.
Yashwant Deshmukh, founder of polling agency CVoter Foundation, said all the evidence pointed to Modi winning.
“Jobs and unemployment are huge issues but not really an electoral issue. When we asked who will give a solution to these problems – jobs, inflation, unemployment and the economic situation – Modi’s score was 2:1 over Rahul Gandhi.” – Reuters
DUBAI – A helicopter carrying Iranian President Ebrahim Raisi and his foreign minister crashed on Sunday as it was crossing mountain terrain in heavy fog, an Iranian official told Reuters, and rescuers were struggling to reach the site of the incident.
The official said the lives of Mr. Raisi and Foreign Minister Hossein Amirabdollahian were “at risk following the helicopter crash”, which happened on the way back from a visit to the border with Azerbaijan in Iran’s northwest.
“We are still hopeful but information coming from the crash site is very concerning,” the official told Reuters, speaking on condition of anonymity.
State TV quoted an official as saying at least one passenger and one crew member had been in contact with rescuers.
A Turkish drone identified a source of heat suspected to be the helicopter’s wreckage and had shared the coordinates of the possible crash site with Iranian authorities, Anadolu news agency said on X.
Iranian Supreme Leader Ayatollah Ali Khamenei, who holds ultimate power with a final say on foreign policy and Iran’s nuclear program, sought to reassure Iranians, saying there would be no disruption to state affairs.
Iranian state media said bad weather caused the crash and was complicating rescue efforts. State news agency IRNA said Mr. Raisi was flying in a US-made Bell 212 helicopter.
The chief of staff of Iran’s army ordered all resources of the army and the elite Revolutionary Guards to be put to use in search and rescue operations.
Earlier, the national broadcaster had stopped all regular programming to show prayers being held for Mr. Raisi across the country.
In the early hours of Monday, it showed a rescue team, wearing bright jackets and head torches, huddled around a GPS device as they searched a pitch-black mountainside on foot amid a snowy blizzard.
“We are thoroughly searching every inch of the general area of the crash,” state media quoted a regional army commander as saying. “The area has very cold, rainy, and foggy weather conditions. The rain is gradually turning into snow.”
Neighboring countries expressed concern and offered assistance in any rescue. The White House said US President Joe Biden had been briefed on reports about the crash. Turkey said it had assigned a drone, a helicopter, vehicles and a rescue team after a request by Iranian authorities. The European Union offered emergency satellite mapping technology.
HARDLINER, POSSIBLE SUCCESSOR TO KHAMENEI
The crash comes at a time of growing dissent within Iran over an array of political, social and economic crises. Iran’s clerical rulers face international pressure over Tehran’s disputed nuclear program and its deepening military ties with Russia during the war in Ukraine.
Since Iran’s ally Hamas attacked Israel on Oct. 7, provoking Israel’s assault on Gaza, conflagrations involving Iran-aligned groups have erupted throughout the Middle East.
Mr. Raisi, 63, was elected president in 2021, and since taking office has ordered a tightening of morality laws, overseen a bloody crackdown on anti-government protests and pushed hard in nuclear talks with world powers.
In Iran’s dual political system, split between the clerical establishment and the government, it is Mr. Raisi’s 85-year-old mentor Khamenei, supreme leader since 1989, who holds decision-making power on all major policies.
For years many have seen Mr. Raisi as a strong contender to succeed Khamenei, who has endorsed Mr. Raisi’s main policies.
Mr. Raisi’s victory in a closely managed election in 2021 brought all branches of power under the control of hardliners, after eight years when the presidency had been held by pragmatist Hassan Rouhani and a nuclear deal negotiated with powers including Washington.
However, Mr. Raisi’s standing may have been dented by widespread protests against clerical rule and a failure to turn around Iran’s economy, hamstrung by Western sanctions.
Mr. Raisi had been at the Azerbaijani border on Sunday to inaugurate the Qiz-Qalasi Dam, a joint project. Azerbaijan’s President Ilham Aliyev, who said he had bid a “friendly farewell” to Raisi earlier in the day, offered assistance in the rescue. – Reuters
TAIWAN President-elect Lai Ching-te, of Democratic Progressive Party (DPP), holds a press conference, following his victory in the presidential elections, in Taipei, Taiwan, Jan. 13, 2023. — REUTERS
TAIPEI – Lai Ching-te took office as Taiwan’s new president on Monday, facing an angry and deeply suspicious China that believes he is a “separatist”, and a fractious parliament with an opposition champing at the bit to challenge him.
Mr. Lai was sworn in at the Japanese-colonial-era presidential office in central Taipei, taking over from Tsai Ing-wen, having served as her vice president for the past four years.
Mr. Lai will express goodwill towards China in his inauguration speech on Monday morning, and call for both sides of the Taiwan Strait to pursue peace, according to a senior official briefed on the matter.
Beijing views proudly democratic Taiwan as its own territory, and has never renounced the use of force to bring the island under its control. Mr. Lai has offered talks, which have been rebuffed, and says only Taiwan’s people can decide their future.
Taiwan has faced ongoing pressure from China, including regular air force and navy activities close to the island, since January’s election victory by Mr. Lai, who is 64 and widely known by his English name, William.
Taiwan’s defense ministry, in its daily report on Monday about Chinese military activities in the previous 24 hours, said six Chinese aircraft had crossed the Taiwan Strait’s median line, which previously served as an unofficial boundary but that China says it does not recognize.
At least one of the aircraft got within 43 nautical miles (80 km) of the northern Taiwanese port city of Keelung, according to a map provided by the ministry.
In attendance at the ceremony are former US officials dispatched by President Joe Biden, lawmakers from countries including Japan, Germany and Canada, and leaders from some of the 12 countries that still maintain formal diplomatic ties with Taiwan, such as Paraguay President Santiago Pena.
Last week, China’s Taiwan Affairs Office said Mr. Lai, whom it called the “Taiwan region’s new leader” had to make a clear choice between peaceful development or confrontation.
Chinese state media did not immediately report on Lai’s swearing in.
Late Sunday, widely read state-backed Chinese newspaper the Global Times said Mr. Lai could become “more and more provocative” once he takes office.
“So in the long term, the state of cross-straits relations will not be optimistic,” it said in an online commentary.
Mr. Lai’s domestic challenges loom large too, given his Democratic Progressive Party (DPP) lost its parliamentary majority in the January election.
On Friday, lawmakers punched, shoved and screamed at each other in a bitter dispute over parliamentary reforms the opposition is pushing. There could be more fighting on Tuesday when lawmakers resume their discussions. – Reuters
SEOUL – North Korea said on Monday a recent subcritical nuclear test by the United States adds new tension to the international nuclear arms race and vowed to take measures necessary for improving its nuclear deterrence posture, state KCNA news agency said.
The US Department of Energy has said its National Nuclear Security Administration conducted a subcritical experiment at its Nevada test site to collect data to support the reliability and effectiveness of nuclear warheads.
“To cope with the strategic instability in the region and the rest of the world caused by the US unilateral action, (we) cannot but reconsider the measures necessary for the improvement of the overall nuclear deterrence posture within the range of its vested sovereign right and possible options,” KCNA said.
It did not elaborate on what measures it would consider.
Subcritical nuclear tests do not involve a nuclear explosion and do not trigger a fissile chain reaction. The United States is a signatory to the global nuclear test ban treaty and ended nuclear explosion tests in 1992.
North Korea has conducted six underground nuclear tests and is believed to be ready for a seventh, although South Korean officials have said there are no indications of an imminent test.
North Korea is under UN Security Council sanctions for its nuclear tests and for ballistic missile development. – Reuters
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Bangko Sentral ng Pilipinas main office in Manila — BW FILE PHOTO
By Luisa Maria Jacinta C. Jocson, Reporter
THE BANGKO Sentral ng Pilipinas (BSP) still has room to cut rates before the US Federal Reserve, analysts said, but warned of such a move’s impact on the peso.
Last week, BSP Governor Eli M. Remolona, Jr. signaled that the central bank could start rate cuts as early as August, even as he expects the US central bank to begin easing in September.
“It is a positive signal, indicating that the BSP believes the Philippine economy is well-positioned to handle a slight divergence from the Fed’s monetary policy stance,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
Last week, the Monetary Board (MB) maintained its target reverse repurchase (RRP) rate at a 17-year high of 6.5% for a fifth straight meeting. However, Mr. Remolona said the BSP may cut rates in August, possibly by 25 basis points (bps).
“Such a scenario is not impossible if domestic inflation remains under control, but it risks both higher imported inflation down the road and capital flight, especially in times of high geopolitical tensions,” Makoto Tsuchiya, economist at Oxford Economics, said in a note.
Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said that the possibility of the BSP cutting ahead of the Fed cannot be ruled out.
“If local inflation dynamics improve so dramatically that it outweighs the exchange rate pass through impact of a series of reserve requirement ratio (RRR) and RRP cuts, the BSP MB may have room to cut ahead of the Federal Open Market Committee (FOMC),” Mr. Neri said in a Viber message.
Mr. Roces noted that the BSP governor’s willingness to consider rate cuts ahead of the Fed “suggests that the BSP is either more confident in the stability of the domestic economy and the anchoring of inflation expectations, or that it may be worried about the potential impact of prolonged elevated rates to the economy.”
The economy grew by 5.7% in the first quarter, better than 5.5% in the previous quarter but slower than the 6.4% expansion a year earlier.
The government is targeting 6-7% growth for the full year.
IMPACT ON PESO However, Mr. Roces said if the BSP cuts rates ahead of the Fed, the challenge is “to carefully balance the benefits of lower rates with the risks of capital outflows and currency depreciation.”
“When a central bank lowers interest rates while other major central banks maintain higher rates, it can make the currency less attractive to foreign investors seeking higher yields,” he said.
“This could lead to capital outflows and depreciation pressure on the peso because of a narrower interest rate differential. 2022 comes to mind, when the Fed hiked and we didn’t and sent the peso to near P60,” he added.
Mr. Remolona has said he is not worried about cutting ahead of the Fed and its potential impact on the peso, noting that there would only be a bit of pressure on the currency.
Mr. Roces said Mr. Remolona’s statement indicates that the BSP sees the impact on the peso as “manageable.”
“This view may be based on factors such as the Philippines’ strong economic fundamentals, that the peso’s current depreciation may be just temporary, adequate foreign exchange reserves, and the potential for the rate cut to stimulate domestic growth and attract foreign investment in the longer term,” he added.
The peso closed at P57.62 against the dollar on Friday, depreciating by 15.5 centavos from its P57.465 finish on Thursday.
Week on week, the peso also weakened by 20 centavos from its P57.42 finish on May 10. The peso sank to the P57 level in mid-April, mainly driven by the conflict in the Middle East.
“If forthcoming US inflation and growth data increasingly improve the odds of Fed cuts, BSP can also cut ahead of the Fed without necessarily causing too much exchange market pressure,” BPI’s Mr. Neri said.
On the other hand, some analysts said that the BSP is still unlikely to cut before the Fed.
“We continue to expect the BSP to only cut after the Fed. Our baseline scenario is for the Fed to begin its easing cycle in the fourth quarter of 2024, starting with a 25-bp rate cut,” HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said in a report.
HSBC sees the BSP cutting rates by 25 bps in the fourth quarter to end the year with a benchmark rate of 6.25%.
In a commentary, Nomura Global Markets Research said a cut by BSP in August is “still unlikely,” citing persistent inflation and the current account deficit.
Nomura Global Markets said this suggests a need for BSP to “keep interest rate differentials supportive of the currency and keep imported inflation in check.”
The BSP last week reiterated its outlook that inflation could temporarily overshoot the 2-4% target range from May to July due to positive base effects.
“Overall, we do not believe BSP turned decisively dovish (last week), much less opened the door to rate cuts in the near term. We would put more weight on the hawkish policy statement,” Nomura said.
Mr. Remolona had said that he was “less hawkish” but still noted that risks to the inflation outlook remain on the upside.
Nomura expects the BSP to cut rates by a total of 50 bps this year, starting with a 25-bp cut in October.
RRR CUT Last week, Mr. Remolona also said that he is seeking to reduce the RRR to 5% from the current 9.5%.
The BSP reduced the ratio for big banks and nonbank financial institutions with quasi-banking functions by 250 bps to 9.5% in June 2023.
The central bank has brought down the RRR for universal and commercial banks to a single-digit level from a high of 20% in 2018.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the BSP may reduce its RRR once it also starts policy easing.
“Any further cut in RRR could infuse more liquidity into the financial system in terms of more loanable funds for banks that could also reduce intermediation costs and help further spur loan or credit growth and demand, which, in turn, would help further stimulate more business and economic activities,” he said in a Viber message.
Mr. Ricafort said that a cut of one percentage point could infuse roughly P146 billion into the banking system as this would mean more loanable funds by the largest banks.
The RRR is the percentage of bank deposits and deposit substitute liabilities that banks cannot lend out and must set aside in deposits with the BSP.
The Philippine economy expanded by 5.7% in the first quarter of 2024. — PHILIPPINE STAR/WALTER BOLLOZOS
By Beatriz Marie D. Cruz, Reporter
THE PHILIPPINE ECONOMY must grow by an average of 6.1% for the rest of the year to meet the lower end of the government’s 6-7% target, the Department of Finance (DoF) said over the weekend.
“We need 6.1% [growth] for the rest of the year to actually reach the 6% target. I think that’s very achievable,” Finance Undersecretary and Chief Economist Domini S. Velasquez said during a forum organized by the Economic Journalists Association of the Philippines and San Miguel Corp.
The Philippine economy expanded by 5.7% in the first quarter, slightly faster than 5.5% in the previous quarter, but below the government’s 6-7% target band.
For the coming months, the DoF expects higher spending and declining inflation to drive growth.
“We expect that consumption will increase as inflation continues to moderate,” Ms. Velasquez said.
Household consumption, which accounts for about 80% of GDP, grew by 4.6% in the January-to-March period, the slowest since the coronavirus pandemic. It was also weaker than 5.3% in the fourth quarter and 6.4% in the same period last year.
“Once we have a bit of stable inflation, we do think that this will increase and it will prop up growth because those are the heavy lifters of growth,” Ms. Velasquez said.
Calixto V. Chikiamco, Foundation for Economic Freedom (FEF) president, said first-quarter consumption was hampered by rising prices of food.
“The government needs to tackle the high food prices, which are discouraging consumption, and also forcing the BSP (Bangko Sentral ng Pilipinas) to maintain higher interest rates for longer, despite slowing inflation,” he said in a Viber message.
Last week, the BSP’s Monetary Board maintained its target reverse repurchase (RRP) rate at a 17-year high of 6.5% for a fifth straight meeting.
However, he noted a proposed amendment to the Rice Tariffication Law authorizing the NFA to directly import rice “will only exacerbate the deficit but will also be ineffective.”
The House of Representatives is expected to approve the measure on third reading this week.
To tame food prices, Mr. Chikiamco called on the government to further cut rice tariffs to 10% from 35%, and expand the Minimum Access Volume for corn, chicken and pork.
SPENDING Government spending is expected to pick up for the rest of the year, Ms. Velasquez said, after slowing to 1.7% in the first quarter.
Faster exports and an improving job market should also sustain the economy’s growth prospects, Ms. Velasquez also noted.
“China is showing signs of recovery which will benefit the Philippines. Additionally, the global outlook for the technology sector is positive, which will benefit exports of semiconductors,” she said.
Ms. Velasquez said the Philippines will also benefit as global sales of semiconductors are projected to increase this year.
However, she noted that growth in the manufacturing sector is being hampered by high power costs, which would be addressed by the passage of the CREATE MORE (CREATE to Maximize Opportunities for Reinvigorating the Economy) bill.
Under CREATE MORE, corporations will be granted a 200% deduction for power costs incurred during the Income Tax Holiday period.
Security Bank Corp. Chief Economist Robert Dan J. Roces said the government should ramp up infrastructure spending, attract more private sector investments, and support high potential sectors like agriculture and manufacturing to reach their targets.
“The government can bolster its spending to contribute to growth by prioritizing high-impact infrastructure projects, improving budget execution, encouraging public-private partnerships, providing targeted support to key sectors, and investing in social infrastructure,” he said in a Viber message.
There are currently 185 infrastructure flagship projects worth P9.14 trillion in the pipeline, according to the National Economic and Development Authority.
However, Ateneo de Manila economics professor Leonardo A. Lanzona said the government appears to be focusing on inflation as the main constraint to growth.
“But that is not true. Growth can be achieved even in the midst of inflation which to some extent can be a consequence of growth,” he said in a Facebook Messenger chat.
He cited Japan and Singapore, which implemented policies to support domestic production particularly in high-tech industries, which helped grow their respective economies amid high inflation and interest rates.
“The Philippines is an interesting case since economic growth was lower than expected and yet inflation remained high. This suggests the beginnings of stagflation,” Mr. Lanzona said.
“The incapacity of the institutions to adapt to changing conditions and the insistence that things are ‘business as usual’ has led to poor policies and the failure to maximize the full potential of the Filipino.”
