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Bank of Japan keeps rates steady, tweaks JGB-buying language

REUTERS

The Bank of Japan kept its short-term rates steady on Friday while removing a reference to the amount of government bonds it has roughly committed to buying each month.

As widely expected, the BOJ maintained its short-term interest rate target at a range of 0-0.1%, which was set just a month ago when it made a historical exit from its massive stimulus program.

 

MARKET REACTION:

Japan’s Nikkei share average .N225 extended gains after the BOJ opted to leave interest rates unchanged. The benchmark index rose more than 1% to as high as 38,097.5.

The Japanese yen JPY=EBS fell sharply to 156.14 to a dollar.

The benchmark 10-year JGB futures fell 0.19 yen to 143.96, but were off the day’s lows.

 

COMMENTS:

FREDERIC NEUMANN, CHIEF ASIA ECONOMIST, HSBC, HONG KONG

“The BOJ pruned its statement today, but not necessarily bond purchases. While the official statement dropped a reference to monthly bond purchases, officials left the door open to continue with the current pace of intervention in the JGB market. BOJ officials likely tried to drop a subtle hint that its balance sheet operations are subject to review, which reinforces its hawkish bias.

“At the same time, officials shied away from announcing bolder measures, likely because they would like to retain flexibility in their purchase operations. The recent spike in US yields makes it tricky for the BOJ to step away from its own JGB purchases, for any hint of a scale-back could lead to Japanese yields becoming a lot more volatile. With the Fed keepings its foot firmly on the break, the BOJ will need to retain the option of scaling up JGB purchases as needed to smoothen any impact of tighter US financial conditions on Japanese rates markets and the currency.”

 

CHARU CHANANA, HEAD OF CURRENCY STRATEGY AT SAXO, SINGAPORE

“And yet again, BOJ has proved that it can surprise dovish to even the most-dovish expectation on the Street. Markets will likely be reaffirmed in their belief of the carry, and continue to test the limit of yen weakness.

“USD-JPY could see an accelerated move towards 158-160, with Kanda’s comments of a 10-yen move in a month as a threshold for intervention giving room for further upside. US PCE on the radar, and we are back to waiting for an intervention to stop the rout in the yen. But any intervention, if not coordinated and without the support of a hawkish policy messaging, will still be futile.

“Japanese stocks could bring 40k back on target as US tech earnings have been broadly supportive and yen weakness has further room to run.

“There has been a change in the language around bond purchases – the amount 6 trillion yen per month is not mentioned. Details will be sought in Governor Ueda’s press conference, and that will be the last hope of any ‘less dovish’ shifts today.”

 

NORIHIRO YAMAGUCHI, SENIOR JAPAN ECONOMIST, OXFORD ECONOMICS, TOKYO

“The statement was surprisingly short, but no surprises that the BOJ maintained its policy rate, given the bank’s communication in March.

“JGB market had quickly priced in the reduction in JGB purchases ahead of the BOJ announcement based on media reports. The decision to keep the purchase pace unchanged could calm the market, but the outlook for QT will remain one of the key themes in the JGB market this year.

“Aside from short-term fluctuations, yields are likely to rise as the market prices in higher policy rates over the coming years.”

 

ATSUSHI TAKEDA, CHIEF ECONOMIST, ITOCHU ECONOMIC RESEARCH INSTITUTE, TOKYO

“No policy change was just as expected, but no change to (board members’) future core-core CPI forecasts was somehow surprising. And this essentially led to no change in policy. Inflationary pressures in Japan, especially in service prices, have hardly risen relative to January.

“The market’s focus now is on what Ueda talks about future rate-hike timings and scaling back JGB purchases.”

 

NAOMI FINK, GLOBAL STRATEGIST, NIKKO ASSET MANAGEMENT, TOKYO

“Governor Ueda’s statement is still upcoming this afternoon and markets remain on high alert for any indication of whether the yen’s current weakness will be interpreted as a lasting inflationary signal and invite more hawkish rhetoric from the central bank. Meanwhile, BOJ also dropped the wording on buying the same amount of bonds as before; this is significant in that it also leaves the door open to some degree of removal of stimulus by curtailing purchases even as currently held bonds mature.”

 

RODRIGO CATRIL, SENIOR FX STRATEGIST, NATIONAL AUSTRALIA BANK, SYDNEY

“The currency takeaway is certainly disappointment from the lack of guidance from the bank.

“To me, the currency market is telling us it believes that the BOJ policy is too loose and hence why the currency is so weak. The Bank has the ability to do something about that by changing its policy, and if it’s not going to change the policy, then we shouldn’t expect the yen to strengthen.

“(Currency) intervention in a scenario where we’re seeing upward pressure on U.S. Treasury yields is going to be a futile exercise.”

 

IZURU KATO, CHIEF ECONOMIST, TOTAN RESEARCH

“The BOJ made a right decision which is in line with its previous explanation that it would keep accommoditive conditions for the time being. If it raised rates today just because the yen was falling, that would prompt markets to sell the yen even more to test the BOJ’s will to support the yen.

“If the pace of import costs accelerates, that could lead the BOJ to raise interest rates as early as July, and depending on the Fed’s move to delay rate cuts later this year, the BOJ may raise rates again by the year-end.

“The yen has fallen further following the BOJ’s move but monetary policy cannot target currencies, and it is even more difficult for authorities to intervene in the currency market effectively, no matter how they try to calibrate the timing to intervene.”

 

MANSOOR MOHI-UDDIN, CHIEF ECONOMIST, THE BANK OF SINGAPORE, SINGAPORE

“The BOJ stayed dovish at its meeting by making no changes to interest rates or its QE-purchases of bonds. The decision supports Japan’s equities and bonds, but provides little help for the yen.”

 

NICHOLAS CHIA, ASIA MACRO STRATEGIST, STANDARD CHARTERED BANK, SINGAPORE

“Despite the knee-jerk dip in USD-JPY, the direction of travel for the pair is still north. Intervention risks become salient once the pair closes in on the 157-level, which may be a reason deterring more market participants from chasing USD-JPY higher.

“If the authorities do not step in at 157, then the sky is really the limit for the pair by signaling the all-clear for markets. All in, it is still a dovish meeting with repeated references to easy financial conditions despite the guidance to reduce bond purchases.”

 

JUN RONG YEAP, MARKET STRATEGIST, IG, SINGAPORE

“The BoJ’s decision to keep rates on hold is a follow-through of the central bank’s stance for a more gradual pace of policy normalization, with them reiterating once again for accommodative conditions to remain for the time being. The decision should bring little surprise, given that markets are only looking for the BoJ to adjust its rates further in the second half of this year.

“Despite recent intervention warnings on the yen from Japanese authorities, the continued dovish outcome from the BoJ seems to reflect some tolerance on the currency, which provides the go-ahead for the yen to weaken further. On the other hand, Japanese stocks responded well to the meeting outcome, which very much allow equities to continue basking in a still broadly accommodative policy environment.” – Reuters

The glitch in Japan’s plans to bolster U.S. defence

COMMONS.WIKIMEDIA.ORG

TOKYO – As the United States faces security threats across the globe, its close ally Japan has committed to stepping up as a trusted defense partner – but Tokyo’s cyber and information security vulnerabilities remain a concern, officials and experts say.

Japanese Prime Minister Fumio Kishida, who is overseeing a once-unthinkable military build-up, told the US Congress this month that Tokyo was committed to helping its partner counter challenges ranging from Russia’s war in Ukraine to an increasingly assertive China.

That came as the allies announced new areas of military cooperation, including tapping Japan’s industrial capacity to bolster defense production and possibly developing new technologies with AUKUS security partners Australia and Britain.

But Tokyo has suffered high-profile hacks in recent years that have shut down its biggest port, breached servers at its leading defense contractor, Mitsubishi Heavy Industries 7011.T, and even infiltrated the government’s own cybersecurity centre. Although Japan is not alone in being targeted by such attacks, they have elevated long-held concerns over whether Tokyo can fully support its security partners.

“It’s really been an Achilles heel for Japan and the U.S,” said Mark Manantan, director of cybersecurity and critical technologies at the Pacific Forum think tank in Hawaii.

Japan faces an uphill battle in creating the systems and finding the people it needs to plug these vulnerabilities, officials and experts say.

Dennis Blair, the former U.S. director of national intelligence, travelled to Tokyo in 2022 to address lawmakers and journalists, telling them Japan’s weak cyber defenses were the biggest liability in the countries’ security alliance.

Later that year, Japan announced plans to recruit more personnel for its cyber capabilities. But the pace of recruitment seems set to slow, according to the latest defense ministry figures, amid fierce competition for such workers and high private-sector salaries.

A US State Department spokesperson said Japan’s “ability to adequately protect sensitive data and information” would be considered when identifying collaboration opportunities.

Asked whether Washington had raised such concerns with Tokyo, Japan’s defense and foreign ministries said they had been communicating closely on the matter but declined to elaborate on the discussions.

 

RECRUITMENT PROBLEMS

In 2022, Kishida unveiled a historic plan to double defense spending over five years, including moves to quadruple its core cyber defense force to about 4,000 people, backed up by 16,000 support staff.

Kazuhisa Shimada, a former vice defense minister and one of the key architects of that plan, told Reuters the recruitment target would be tough to hit within that time frame.

“When we came up with the number, our cybersecurity officials were cautious,” he said. “Japan as a whole lacks cybersecurity human resources.”

The defense ministry said in April it had recruited 2,230 core members so far and expects to add another 180 by March 2025, but was still aiming to hit its target. It did not say how many support staff were in place.

Defense Minister Minoru Kihara has proposed easing physical fitness requirements and offering salaries up to 23 million yen ($149,108), the same as a top bureaucrat, for cyber recruits.

But that is only half of what a senior industry expert can earn, according to Itsuro Nishimoto, chief executive of Japanese cybersecurity firm LAC Co., and unlike private firms the government must hire only Japanese nationals.

Japan also said in 2022 it wants to pre-emptively hunt down and neutralise potential cyber threats, many of which originate beyond its borders, a tactic commonly used by its allies.

But the government has yet to submit the legal amendments to parliament that would allow such strikes – controversial given the country’s pacifist constitutional constraints.

Akihisa Nagashima, a ruling party lawmaker and former deputy defense minister, said those amendments may not reach parliament until next year, which was disappointing given “Japan is getting cyber attacks on a daily basis”.

Japan’s National Police Agency said the daily average number of cases of suspicious internet access, a broad measure that includes cyberattacks, hit a record of 9,144 last year, up from a previous record of 7,708 in 2022.

 

SLOW PROGRESS

Expectations that Japan can step up international collaboration on defense projects have been bolstered by Tokyo recently relaxing rules on defense exports.

The country can now ship Patriot air defense missiles it builds under license back to the United States, for example, and will let Britain and Italy export an advanced jet fighter they are developing together.

Although it would be a leap for Japan to supply arms to a country at war, the rule changes have opened the door for overseas arms manufacturers to tap industrial capacity that was once off limits.

Even that may be tangled in bureaucracy, however. Because Japan does not have a system for companies to handle classified information comparable to those of the US and its other allies, projects such as the fighter jet are done under burdensome bespoke frameworks, said Jeffrey Hornung, an expert in Japanese security policy at the Rand Corporation.

Legislation proposed in February is meant to remedy this, but it could take up to five years for a new vetting system to become operative, said Jun Osawa, a senior research fellow at Nakasone Peace Institute in Tokyo.

“Japanese companies don’t have a culture of handling information that requires clearance, which takes more time,” Osawa said.

All the hurdles add up, officials say, even as Japan produces more weapons and regears its defense industry.

Former Pentagon official Bill Greenwalt dismissed as “political theatre” the idea that Japan could be plugged into Western security projects such as AUKUS.

“There is no chance to do so with Japan, whose security apparatus is still in a peacetime mode and immature,” he said. – Reuters

 

China passes tariff law as tensions with trading partners simmer

FREEPIK

BEIJING – China on Friday passed a law leaving its biggest trade partners in no doubt that it can hit back should they put tariffs on the exports of the world’s No.2 economy as Washington and Brussels take aim at Beijing over excess industrial capacity.

The Tariff Law, which was approved by China’s top legislature after three rounds of deliberations going back to 2022, is the latest addition to Beijing’s arsenal of trade defense instruments as it maintains an uneasy truce with the US following a trade war that kicked off during the Trump administration.

The law, which will take effect from Dec. 1, outlines a range of legal provisions related to tariffs on Chinese imports and exports, from what constitutes tax incentives to China’s right to hit back at countries that renege on trade agreements.

Beijing has stepped up its trade defense capabilities since President Xi Jinping came to power in 2012, ushering in laws empowering officials with ways of retaliating against countries that take issue with the way China trades by interfering with the movement of goods, data and personnel between those markets.

Rising tensions between China and the United States and European Union have only validated Beijing’s belief it needs to consolidate and improve the measures it has at its disposal, analysts say.

“It’s like a nuclear weapon: the point of having it is not to use it, but to deter others from using the same against you,” said Henry Gao, professor at Singapore Management University.

“You could argue that this is not really necessary, as when China upgraded its Foreign Trade Law in 2004, there were measures on applying retaliatory tariffs,” Mr. Gao added.

“But I think one point China is trying to make by including this in the new Tariff Law is that this is our prerogative: If you’re going to hit us with tariffs, we can do the same.”

Growing alarm over Chinese industrial overcapacity flooding the European Union with cheap products is opening a new front in the West’s trade war with Beijing, which kicked off with Washington’s import tariffs in 2018.

Brussels is currently investigating whether to apply tariffs on Chinese electric vehicles, while Beijing is conducting its own anti-dumping probe into EU brandy. – Reuters

Does fighting inflation always lead to recession? What 60 years of NZ data can tell us

SULTHAN AULIYA-UNSPLASH
SOURCE: THE CONVERSATION

There is an ongoing global debate over whether the high inflation seen in the aftermath of the COVID-19 pandemic can be lowered without a recession.

New Zealand is not immune to this issue. Reserve Bank governor Adrian Orr has said a recession is needed to tame inflation – described as a “hard landing”. Others have disagreed, arguing New Zealand could and should aim for a soft landing (a reduction of inflation with no recession).

But are reductions in inflation inextricably linked to recessions?

New Zealand’s own economic history, it turns out, can give some guidance on this, and point to the risk factors within the country’s economic outlook.

There is no hard and fast definition of a recession. The term “technical recession” is widely used to refer to a period with two consecutive quarters of negative real growth in gross domestic product. By this measure, New Zealand entered a recession at the end of last year.

But many economists prefer the alternative definition from the National Bureau of Economic Research (NBER) in the United States: a recession is “the period between a peak of economic activity and its subsequent trough, or lowest point”.

Technical recessions and recessions meeting the NBER criteria do not always coincide.

In 2014, two researchers used the Bry-Boschan algorithm, which is based on the NBER definition, to identify New Zealand’s recessions between 1947 and 2012.

The question is whether we can identify these recessions in real time rather than in hindsight. The so-called Sahm rule stipulates a recession is likely when the unemployment rate starts to increase after recent lows, which can help with timely analysis of the economic conditions.

The dashed line in the graph below shows a recession indicator based on unemployment, dating back to 1986 when quarterly unemployment data was first published. The indicator usually coincides (within one quarter) with the start of a recession based on the Bry-Boschan algorithm.

According to this indicator, we were not in recession in the fourth quarter of 2023. However, if the rise in online job applications and fall in job ads continues, this indicator might flash red soon.

Since 1961, New Zealand has experienced eight falls in inflation (disinflations) of four percentage points or more. (Disinflation refers to when inflation drops but remains positive, while “deflation” occurs when the inflation rate falls below zero).

This four percentage point drop is required for New Zealand’s inflation to reach the Reserve Bank’s target of 1-3%, down from the 7.3% recorded in the third quarter of 2022.

Each letter in the graph above identifies the inflation peak before historical disinflation episodes. The shaded area identifies recessions up to 2012.

The graph shows four drops in inflation – B, E, F and C – seem to be associated with recessions, while drops A, D and G were not. Disinflation G does have a recession quite late in the piece, the Asian Financial Crisis, but approximately half the inflation fall had already occurred before the crisis took hold.

The message is a positive one: a fall in inflation does not necessarily have to be associated with a recession.

But are any of the historical disinflation episodes more instructive than others about what might happen in the current situation?

Disinflations D and G, which were associated with soft landings, followed increases in short-term interest rates (such as New Zealand has recently experienced). Disinflation D was also helped by a halving in oil prices between November 1985 and March 1986.

Disinflation H is a bit of an anomaly. The inflation peak in 2011 was an artificial high as it came on the back of an increase in the goods and services tax in 2010.

Turning to the hard landings in the sample, early 1974 saw a large increase in oil prices after the 1973 Arab-Israeli war. The resulting global recession, coupled with restrictive domestic fiscal policy to quell oil price-induced inflation, contributed to disinflation between the second quarter of 1976 and the fourth quarter of 1978 (marked B on the graph).

Disinflation F, between the second quarter of 1990 and the first quarter of 1992, again occurred against the backdrop of a slowdown in the world economy. This reflected, in part, the increase in oil prices in 1990 due the first Gulf War, and tight domestic monetary and fiscal policies.

Disinflations B and F share similarities with New Zealand’s current situation, including restrictive (monetary) policy and unrest in the Middle East. Oil prices are up more than 15% this year, although they are yet to reach their mid-2022 highs.

Disinflations C and E were also associated with recessions reflecting global events. During deflation C, events in Iran led to an oil price increase, which both directly and through policy actions sent the US into recession in the early 1980s.

Disinflation E coincided with the October 1987 sharemarket crash which set off instability in New Zealand’s newly-liberalized financial system.

So if New Zealand is not currently in a recession, what are the country’s chances of avoiding one while trying to reduce inflation?

History suggests it is possible. But favorable global conditions are needed and, in particular, favorable geopolitics. Recent events in the Middle East, coupled with the ongoing war in Ukraine, are not positive signs.

Disclaimer: This asset – including all text, audio and imagery – is provided by The Conversation. Reuters Connect has not verified or endorsed the material, which is being made available to professional media customers to facilitate the free flow of global news and information.

South America weather experts see La Nina, El Nino frequency rising

LIMA – The climate phenomena known as El Nino and La Nina, which bring waves of heat, cold, rain or drought, will be more frequent and extreme in coming years, after South America suffered the most intense El Nino in decades, weather experts said on Thursday.

According to the Ecuador-based International Center for Research on the El Nino Phenomenon (CIIFEN) and the Peruvian meteorology and hydrology agency SENAMHI, the recent El Nino was among the five strongest since 1950.

“The pattern has changed a lot,” said Yolanda Gonzalez Hernandez, director of CIIFEN, at a press conference after a meeting of experts from the region in Lima on climate.

“Where before there was no significant impact of the El Nino phenomenon, now they are occurring with more intensity.”

Ms. Gonzalez said temperature changes from one to the other will be faster, with a La Nina expected for the second half of this year, replacing the El Nino that is starting to weaken.

El Nino and La Nina hit different parts of the world distinctly. In Latin America they have affected crops such as wheat, soy and corn, damaging regional economies often highly dependent on farming.

“We are permanently breaking records at the local, national and global level in temperature anomalies,” said Ms. Gonzalez.

Temperatures are estimated to be above normal in much of South America, although below normal on the coast of Ecuador, northern Peru, and southern Argentina and Chile.

With the recent El Nino, Peru had the warmest winter in the last 60 years, according to CIIFEN, while in Colombia, temperatures reached records in different parts of the country.

Argentina and Chile saw more rain, which in the former helped soy and corn production after a drought the year before. – Reuters

Indigenous people protest Brazil not protecting ancestral lands

STOCK PHOTO | Image by LhcCoutinho from Pixabay

BRASILIA – Several thousand Indigenous demonstrators marched chanting to drum beats on Thursday to the seat of power in Brazil’s capital to protest against the government’s failure to protect their ancestral lands.

The annual event this year focused Indigenous anger over plans to build a railway to transport grain from farm states to Amazon ports for export that they fear will destroy the environment of tribal communities near the Tapajos river.

For a mock-up of the Ferrograo railway the marchers used a tractor-trailer truck dubbed the “Rails of Destruction” and painted with the names of multinational grain traders ADM, Bunge, LDC and Cargill.

“Ferrograo is the train of death, of deforestation,” said Alessandra Korap Munduruku, winner of the Goldman environmental prize. “The railroad is not going to carry people, as they claim, but grain production of international companies financing this project.”

Kleber Karipuna, head of Brazil’s largest Indigenous umbrella organization APIB, said the communities had not been consulted on the railway, whose announcement by the government has set off a wave of land grabbing along its planned path.

President Luiz Inacio Lula da Silva received a group of Indigenous leaders who led the march to a square located between the Planalto presidential palace and the Supreme Court.

Their main complaint was the failure of his government to deliver on promises to officially recognize Indigenous reservations that have completed the demarcation process establishing that they are ancestral lands. The recognition is vital to protect their territories from invasion by illegal loggers, wildcat gold miners and land grabbers at the front of an agricultural frontier that is expanding into the Amazon.

Lula’s minority government is also undecided on whether to approve the railway project that has strong backing from Brazil’s powerful farm lobby.

The farm caucus in Congress said it is pressing for the execution of a project that was first proposed in 2015 for a 950-km railway to carry soy from Mato Grosso state to the port of Miritituba on the Tapajos, an affluent of the Amazon river.

“We are in favor of Ferrograo, a federal government project of extreme importance for the shipment of grains,” the caucus said in a statement to Reuters. The railway will cut freight costs by 25% and release less CO² into the atmosphere that the trucks that currently carry the grain.

Indigenous leaders on Wednesday also urged the country’s Supreme Court to rule on a pending case on the fundamental right of their people to ancestral lands as established in the Constitution, a right that Congress has voted to limit in time.

They criticized lawmakers for advancing bills that would allow commercial agriculture and mining on reservation lands, which they fear will increase illegal logging and deforestation. – Reuters

CCIFP holds the 2024 edition of Tastin’ France Manila

Wines celebrate much more than their culture and history; they also allow people to connect and bond with each other. With what wine can do for people, the recent Tastin’ France Manila takes that to new heights by inviting wine & spirits producers and local importers, retailers, and distributors to participate in a business trade event last April 8, with relevant activities related to learning more about the wine and spirit industry. The event’s success is thanks to Team France Export through a collaboration between the French Chamber of Commerce in the Philippines and Business France.

From wine exhibitors producers in different regions of France, guests and attendees could enjoy a wide variety of wines at the trade event. Exhibitors include Loire Vins Domaine from Loire Valley; Alain Corcia and Domaine Gille from Bourgogne; Same River Twice Wines from Rhone Valley; Les Vins De Roquebrun, LGI Wines, Vignobles Vellas and Wines Tree; Vignobles Mauve & Co (Les Grand Châteaux) from Languedoc/Bordeaux; and Wines Overload, Les Petit Clos, ABK6 Cognac, and Godet Freres Cognac from multi-region.

The day started in the morning with a market presentation including a panel discussion with five invited speakers who gave relevant insights on the wine industry in the Philippines. The featured speakers had many things to share about as they had their specialties in the wine and spirit industry, which are the following: Julian Gagliardi, general manager of Happy Living; Jorinda Badilla-Flour, owner and sales director of Le Cellier French Wine Selection; Jean Philippe Guillot, general manager of the Philippines from A Wine Company (AWC) and Winedrop; Matthieu Gaillard, founder and partner of Manila-Wine; and Vincent Landais, owner of Dr. Wine.

After a filling lunch, the afternoon session was welcomed by Filipino attendees, with a record of more than 75 guests participating in the French wine trade delegation. With the whole afternoon dedicated to networking and building connections, with French wines and spirits of course, Tastin’ France Manila has achieved their mission of strengthening the connection of France and the Philippines together for this event.

 

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Okada Manila hosts Barbie’s 65th anniversary celebration: A tribute to empowerment and dreams

Okada Manila is thrilled to announce an exceptional event celebrating the 65th Anniversary of Barbie, the quintessential icon of inspiration and empowerment across generations. Dubbed “Barbie 65th Anniversary – Inspiring Stories, Shaping the Future,” this grand celebration will unfold at Cove Manila from April 27 to June 2, 2024, commemorating Barbie’s profound influence on encouraging dreams and aspirations since her inception in 1959. This celebration is designed to bring together Barbie fans of all ages, highlighting her significant impact on culture and society.

Event Highlights

The Barbie 65th Anniversary celebration will see Cove Manila transformed into a colorful journey through Barbie’s storied history. Highlights include:

Barbie Interactive Tunnel (Crystal Pavilion): A spotlight feature where attendees can traverse Barbie’s iconic moments. It includes a beautifully lit Barbie acrylic logo with spaces for visitors to engage in activities such as sharing inspirational stories on a post-it note wall and expressing how Barbie has inspired their futures.

Barbie Dream Camper: For the first time ever, a life-sized Barbie open camper will be presented, divided into three play areas for an immersive experience into Barbie’s world.

Barbie Diorama: An extensive exhibition featuring over 130 Barbie Career Dolls from 1959 to the present day, showcasing the evolution of Barbie’s roles and professions.

Barbie Ice Cream Cart and Food Truck: Offering toys-inspired treats and actual food, creating a delightful experience for kids and families.

“You Can Be Anything” Pop-Up Booth: Lighted booths depicting various Barbie careers to inspire visitors about the endless possibilities they can achieve.

Barbie Activity Area and 65th Photo Op Box: An area dedicated to interactive activities including a diorama display, a free play table, and a TV for webisode playback. It also features a mini-mirror for kids’ selfies and an interactive wall where visitors can post their dreams.

The beach club of the iconic Cove Manila

Year-Round Family Getaway at Cove Manila

In addition to the Barbie celebration, Cove Manila continues to be a premier family destination throughout the year. Its 9,000-square-meter dome, equipped with temperature control and UV protection, offers a unique beach club experience right in the heart of the city. It’s the perfect year-round getaway for families seeking fun and relaxation.

Empowering the Next Generation

This event transcends mere nostalgia, aiming to inspire the next generation with interactive and engaging exhibits that encourage children to dream without limits.

“We are honored to host the 65th Anniversary of Barbie at Cove Manila, showcasing her lasting impact in empowering young minds to break traditional boundaries,” said Vikki Aquino, Director of Spas, Recreation, and Kids’ Club at Okada Manila. “We invite everyone to join us in this inspirational celebration.”

Moreover, the celebration includes a “Daycation” package, allowing guests to experience Barbie’s world firsthand, exploring her house and the myriad of careers she has represented over the years.

Mark your calendars for this memorable event at Cove Manila, Okada Manila, from April 27 to June 2, 2024. It’s an opportunity to honor Barbie’s enduring legacy and the unlimited possibilities she symbolizes. The ticket price for this once-in-a-lifetime event is PHP1,988, inclusive of a set meal, promising a celebration that will be both inspiring and fun.

 

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Coal plant moratorium to stay — DoE

PIXABAY

By Ashley Erika O. Jose, Reporter

The Department of Energy (DoE) is maintaining a moratorium on the development of greenfield coal-fired power plants even as most hydropower plants are currently running on derated capacities, resulting in insufficient power supply affecting the main grids.

“The moratorium (stands, if the LNG or liquefied natural gas) power plants would have a higher degree of reliability, then the private sector may opt for that rather than put up coal plants,” Energy Secretary Raphael P.M. Lotilla said in a virtual press briefing on Thursday.

In 2020, the Energy department issued a moratorium on the development of new coal-fired power plants, as the country sought to reduce its dependence on coal.

Mr. Lotilla said the DoE sees no reason to lift the moratorium for now as more than 4,000 megawatts (MW) of power supply is expected to boost the country’s overall supply.

At least 4,164.92 MW of power projects are expected to come online this year, which are expected to boost the country’s overall power supply.

Broken down, 4,030 MW will be in Luzon, 80.25 MW are in Visayas and 52.50 MW are in Mindanao.

About 1,224.655 MW will begin operations within the second quarter, while 1,352.167 MW will go online in the third quarter and 1,571.154 MW by yearend.

At present, 161.20 MW of these committed projects are now in full commercial operation, while 835.888 MW are under the commissioning and testing stage.

The DoE said these power projects are a combination of both renewable energy and conventional power plants and even liquefied natural gas (LNG) powered plants.

The higher-than-expected temperatures this summer months caused hydropower plants to run on derated capacities, the Institute for Climate and Sustainable Cities (ICSC) said.

YELLOW ALERT

On Thursday, a yellow alert status was raised over the Luzon and Visayas power grids for the eighth time this month, the National Grid Corp. of the Philippines (NGCP) said.

The Energy department said yellow alert will continue affecting the country’s main grids until next month due to higher-than-expected temperatures and rising power demand.

According to the grid operator’s advisory, a yellow alert was raised over Luzon from 1-5 p.m and 7-11 p.m. as 19 power plants are still on forced outage while one power plant is running on derated capacity. This resulted in the unavailability of 1,424.3 MW to the grid.

Of the 19 power plants, NGCP said that four have been offline since last year, while three were on forced outage since January. Twelve plants have been on forced outage since April.

Yellow alerts are issued when the supply available to the grid falls below a designated safety threshold. If the supply-demand balance deteriorates further, a red alert is declared.

Luzon’s power demand on Thursday reached 13,941 MW against available capacity of 14,568 MW.

Visayas power grid was also placed under yellow alert from 1-4 p.m., 6-7 p.m., and 8-9 p.m. due to the unavailability of 670.8 MW to the grid.

A total of 24 power plants are offline in Visayas, while 12 are running on derated capacities.

Luningning G. Baltazar, assistant director of the DoE’s Electric Power Industry Management Bureau, said Luzon has already breached the projected peak demand for the year.

Data provided by the DoE showed Luzon hit a peak demand of 14,016 MW on Wednesday against a projected peak demand of 13,917 MW this year. Peak demand in Visayas and Mindanao on Wednesday hit 2,586 MW and 2,534 MW, respectively. Visayas and Mindanao have a projected peak demand of 2,891 MW and 2,584 MW, respectively, for the year.

Energy Undersecretary Rowena Cristina L. Guevara said more yellow alerts, and possibly red alerts are expected until May.

The Energy Regulatory Commission (ERC) said it has already called on six power generation companies to explain the recent power plant outages.

“The ERC expects to have preliminary findings by the first week of May to determine whether show cause orders need to be issued to the relevant stakeholders, in view of possible violations of outage allowances,” ERC said in a statement.

The power regulator declined to identify the six power generating plants as its investigation is still ongoing.

“The Commission is diligently studying additional measures we can put in place under this extraordinary increase in demand, as a result of the effects of El Niño, and unavailability of supply or reserves,” ERC Chairperson Monalisa C. Dimalanta said.

The ERC said it is also monitoring the price of the Wholesale Electricity Spot Market (WESM) as the spot market prices climbed 47% this week.

“While we are completing our investigation on the outages, we are not losing sight of the fact that consumers — households and businesses alike — will bear the brunt of unavailable supply and/or high WESM prices. That is why, early on, we have emphasized to distribution utilities the importance of contracting for power supply to at least avoid exposure to price spikes in the WESM,” Ms. Dimalanta said.

Last year, the ERC said it had imposed a total of P60 million worth of penalties against generation companies for breaching the allowable number of outage days.

Peso fall won’t spur rate hike yet, says Recto

BW FILE PHOTO

THE PHILIPPINE peso’s current slump is unlikely to prompt the central bank to raise its key interest rate from a 17-year high at this time, according to Finance Secretary Ralph G. Recto.

The Bangko Sentral ng Pilipinas’ (BSP) next policy move “will be dependent on inflation data,” Mr. Recto said in a mobile-phone reply to Bloomberg News. Asked if a rate hike is being considered as the local currency slipped to as low as P57.96 against the dollar on Thursday, Recto said: “For now, I don’t think so.”

The peso fell to a fresh 17-month low against the dollar, staying past the closely watched P57-level for the second week as central banks grapple with the outlook of higher-for-longer US rates and tensions in the Middle East.

Mr. Recto, one of seven members of the BSP’s monetary panel, is signaling patience, even after a resurgent dollar prompted its neighbor Indonesia on Wednesday to unexpectedly raise interest rate to defend its currency.

Aside from the exchange rate, inflation and economic growth will also weigh on the BSP’s next policy decision on May 16. Price gains accelerated for a second month in March, and BSP Governor Eli M. Remolona, Jr. sees rising risk that inflation may breach the central bank’s 2%-to-4% goal for a third straight year.

The BSP chief said last week that the central bank is still on course to cut rates later this year or in early-2025 despite the peso’s weakness.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan on Thursday, meanwhile, said tight monetary policy could crimp growth, as he underscored the need for non-monetary measures to tame inflation.

“Even though interest rate hikes — a monetary policy tool utilized by the BSP — can decelerate inflation by discouraging consumption and investment activities, it may also dampen demand and reduce economic opportunities made available to Filipino workers,” Mr. Balisacan said in a statement that backs a plan to ease importation rule — Bloomberg

HSBC expects BSP to begin easing in Q4

Bangko Sentral ng Pilipinas main office in Manila. — BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) is expected to delay its policy easing as upside risks to inflation have worsened, but rate hikes are unlikely, HSBC Global Research said.

“The easing cycle may be delayed, but we don’t think there will be any rate hikes ahead with non-monetary policies at work,” HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said in a report on Thursday.

HSBC said the central bank is expected to start easing with a 25-basis-point (bp) cut in the fourth quarter, later than its earlier forecast of rate cuts in the third quarter.

It now sees the benchmark rate falling to 6.25% by yearend from 5.75% previously.

“Nonetheless, we continue to expect the BSP to bring its policy rate down to as much as 5% by the end of 2025.”

The Monetary Board has hiked borrowing costs by 450 bps from May 2022 to October 2023, bringing the policy rate to a near 17-year high of 6.5%. The BSP stood pat for a fourth straight meeting in April.

Mr. Dacanay cited recent developments that have added to upside risks to the inflation outlook, such as volatile oil prices.

“Risks to inflation have risen over the past two weeks. Tensions in the Middle East have brought oil prices up, while global rice prices remain elevated,” he said.

HSBC also noted the dollar’s recent strength, coupled with sticky inflation in the United States, may push the US Federal Reserve to keep rates tight for longer.

BSP Governor Eli M. Remolona, Jr. earlier said that expectations of rate cut delays by the Fed have caused weakening in other currencies against the dollar, including the peso.

Fed Chairman Jerome H. Powell has said they might have to keep “restrictive” policy rates for longer amid persistent inflation in the US. Markets are now seeing the Fed cutting rates by September instead of initial expectations of June.

“Market players already expect headline inflation to breach the BSP’s 2-4% target band in the few months ahead due to base effects being unflattering,” HSBC added.

Inflation accelerated for a second straight month to 3.7% in March. This brought the first-quarter inflation average to 3.3%.

April inflation data will be released on May 7.

The BSP expects full-year inflation to settle at 3.8%. The central bank also earlier warned that inflation could overshoot the 2-4% target over the next two quarters amid persistent upside risks.

“To better support the peso and tighten one’s grip on inflation expectations, the BSP will likely stick to its word and begin its easing cycle late this year. And the BSP can easily do this with robust growth,” Mr. Dacanay added.

He also cited other macroeconomic indicators that give the BSP room to delay its easing, such as strong labor market conditions, faster credit growth, stable exports, and improved manufacturing.

“We also downplay the risk of further rate hikes. Although inflation risks have emerged in the form of high oil and rice prices, these risks are supply-side in nature,” HSBC said.

Mr. Dacanay said the most efficient way to mitigate the potential impact is through supply-side interventions.

Mr. Remolona earlier said that current policy settings are “already tight.” The central bank would only consider further tightening if inflation expectations are deanchored. — Luisa Maria Jacinta C. Jocson

NCR economic output grew by 4.9% in 2023

Buildings are seen from the Mabini Bridge in Manila, June 16, 2023. -- PHOTO BY MIGUEL DE GUZMAN, The Philippine Star

METRO MANILA’S economic output expanded by 4.9% in 2023, the slowest pace in two years, due to base effects and weaker output of key sectors, the Philippine Statistics Authority (PSA) said on Thursday.

Preliminary PSA data on the latest regional accounts showed that the National Capital Region’s (NCR) economic growth slowed sharply in 2023 from the 7.2% expansion in 2022.

This was Metro Manila’s weakest economic growth since the 4.4% print in 2021.

NCR growth was also slower than the Philippines’ 5.5% gross domestic product (GDP) print last year.

“NCR’s growth, although slower, was still in positive territory. An easing from the 2022 figure which reflected the economy’s reopening was only expected,” PSA-NCR Regional Director Paciano B. Dizon said during the briefing.

He also said that base effects are at work with the normalization of the post-pandemic boom becoming apparent in the 2023 GDP growth.

At constant 2018 prices, the economy of NCR amounted to P6.57 trillion last year, 5% higher than P6.27 trillion in 2022.

NCR contributed the largest share to the overall Philippine economy last year at 31.2%, followed by Calabarzon (14.7% share) and Central Luzon (11%).

All 17 regions posted growth in 2023, although slower than the prior year. Eight regions posted economic growth faster than the national average.

Central Visayas was the fastest-growing region at 7.3%, easing from 7.6% in 2022. This was followed by Western Visayas at 7.2% (from 9.3%) and Ilocos Region at 7.1% (from 7.6%).

Meanwhile, Soccsksargen recorded the slowest growth among the regions with 3.5% in 2023, from 6.6% in 2022. It was followed by the Bangsamoro Autonomous Region in Muslim Mindanao (4.3% from 6.6%), Bicol Region (4.6% from 8%), and Zamboanga Peninsula (4.6% from 7.5%).

Metro Manila’s economy was primarily driven by services, which accounted for 82.7% of its economy. Services increased by 5.7% last year, slowing from 8.2% in 2022.

Wholesale and retail trade, which accounted for more than a fourth of services, grew by 4.4% in 2023, slower than 7.2% in 2022.

Financial and insurance activities, which made up 24% of services, expanded by 8% last year versus 7.1% in 2022. Professional and business services growth slowed to 5.8% last year from 9.6% in 2022.

Meanwhile, industry, which accounted for 17.3% of the NCR economy, grew by 1.3% last year, slower than the 3.2% in 2022.

Agriculture, which accounted for 0.01% of NCR’s economy, was the only major sector that posted annual growth. Agriculture expanded by 5.4% in 2023 versus 3.5% in 2022.

“Contributing to [NCR’s] slowdown despite the country’s full reopening include inflationary pressures amidst high policy rate,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

The Monetary Board has hiked borrowing costs by 450 bps from May 2022 to October 2023, bringing the policy rate to a near 17-year high of 6.5% Headline inflation averaged 6% last year.

“The (NCR) growth is slower than what it should be due to the higher interest rates, volatility in the market, and supply chain constraints,” John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., said in a Viber message.

By sectoral output, Western Visayas had the quickest growth in services to 10.2% last year but slower than the 13% in 2022. It was followed by Cordillera Administrative Region (8.9% from 10.9%) and Mimaropa (8.8% from 11.7%).

Cagayan Valley led the industry sector with 8.5% growth last year, easing from 11.5% in 2022.

Central Visayas posted the fastest growth in agriculture output with 8%, reversing the 4.7% contraction of the previous year.

On the expenditure side, BARMM posted the highest growth in household spending (7.5% from 6.2%).

Government spending growth was the fastest in Northern Mindanao at 4.3% last year from 4.2%.

Western Visayas had the quickest expansion in gross capital formation, the investment component of the region’s economy, at 12.9% last year. This was still lower than the 14.8% in 2022.

NCR remained the largest gross regional domestic product (GRDP) on a per-capita basis at P460,969 last year, up by 3.8% from P443,976 figure in 2022.

“Looking ahead, the [NCR’s] GRDP is projected to pick up pace based on resilient commercial activities, increased public infrastructure spending, and the growth of digital financial services,” Mr. Roces said, “provided inflation is managed effectively.”

PSA will release April inflation data on May 7. — Andrea C. Abestano

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