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Australia to recommend minimum wage rise in line with inflation

STOCK PHOTO | Image by Rebecca Lintz from Pixabay

SYDNEY – Australia’s government will support a minimum wage increase in line with inflation this year as low-income families continue to grapple with costs of living, although the rise would be smaller as inflation eased.

In a submission to the Fair Work Commission’s 2023-24 Annual Wage Review to be unveiled on Thursday, the Labor government will recommend the increase to ensure “the real wages of the low-paid workers do not go backwards”, a position the government has held in the last two years.

“Certainly the expectation is that the minimum wage will be lifted. What we’re trying to ensure is that people on the lowest pay in our economy and in our country don’t go backwards,” Treasurer Jim Chalmers said in an TV interview on Monday.

“This is all about ensuring that people can earn more… And that’s because we recognize that these cost-of-living pressures do fall disproportionately on the lowest paid in our workplaces.”

Last July, the FWC hiked the minimum wage by 5.75% as costs of living surged, a decision some had feared would further stoke inflation. However, there has been no sign of a damaging wage-price spiral and inflation has slowed to two-year lows of 3.4% from a peak of 8.4%.

The Reserve Bank of Australia sees inflation edging down to 3.3% by June 2024.

The Labor government has also pledged more costs of living relief in the upcoming budget in May. It will deliver tax cuts for every taxpayer from July this year. – Rueters

Britain plans to boost nuclear workforce

STOCK PHOTO | Image by Markus Distelrath from Pixabay

LONDON – Prime Minister Rishi Sunak will set out plans to boost Britain’s nuclear workforce on Monday, as increased submarine building and the growing needs of the nuclear energy industry are forecast to create 40,000 new jobs by 2030.

The government will partner with defense companies BAE Systems, Rolls-Royce and Babcock plus energy giant EDF to invest more than 763 million pounds ($961 million) by the end of the decade in skills, jobs and education, it said in a statement.

The government needs to ensure there are sufficient nuclear workers to help build and maintain its fleet of submarines, vital for defense and security as they are the basis of the UK’s continuous at-sea nuclear deterrent.

“Safeguarding the future of our nuclear deterrent and nuclear energy industry is a critical national endeavor,” said Mr. Sunak, who will on Monday visit Barrow-in-Furness in the northwest, where Britain’s nuclear submarine industry is based.

“Today we usher in the next generation of our nuclear enterprise, which will keep us safe, keep our energy secure, and keep our bills down for good.”

Britain’s nuclear submarine industry will expand in the coming years as new boats are built for the UK, and also Australia under the AUKUS security pact.

Further details on how Britain will deliver the capabilities necessary for to maintain its nuclear deterrent will be published by defense secretary Grant Shapps on Monday in the “Defense Nuclear Enterprise Command Paper”, Mr. Sunak’s office said.

As part of it plans to boost the nuclear workforce, the government said it will invest 200 million pounds in Barrow over the next decade to help support people into jobs, improve the area’s transport infrastructure and build more homes. – Reuters

For mineral-rich Philippines, green metals rush is a balancing act

A back hoe loads soil containing nickel-ore minerals into a barge in the mining town of Sta Cruz Zambales in northern Philippines February 8, 2017. Picture taken February 8, 2017. REUTERS/Erik De Castro

DIDIPIO, Philippines (Thomson Reuters Foundation) – As the Philippines works to ramp up mining to meet global demand for metals crucial to the green energy transition, environmental groups are demanding strict limits to protect nature and Indigenous lands.

The Philippines has the world’s fourth-largest copper reserves, fifth-biggest nickel deposits and is also rich in cobalt – all of which have important uses in clean energy technologies, from lithium-ion batteries for electric vehicles (EVs) to solar panels.

Mineral requirements for renewable energy technologies must be quadrupled by 2040 to reach the goals of the Paris Agreement, and the World Bank estimates a 500% increase in the demand for transition minerals.

That is encouraging mineral-rich countries like the Philippines, where mining is relatively undeveloped and only accounts for 1% of gross domestic product (GDP), to boost their production of so-called critical minerals.

But with nearly two-thirds of the Philippines’ mineral reserves lying on Indigenous lands, environmental and rights campaigners are demanding new legislation to limit mining activity to the minimum needed for the green energy switch.

“Mining is a necessary evil in our civilization and daily life. But we believe in mining anchored on just minerals transition, or mining what is absolutely necessary and sourcing them responsibly,” said Maya Quirino, advocacy coordinator at the Legal Rights and Natural Resources Centre (LRC), a local nonprofit that works for Indigenous and environmental rights.

“For example, gold is not essential to the energy transition,” she told Context.

Ms. Quirino’s organization is leading calls for a new mining law that would only permit the “indispensable extraction” of critical minerals. It also seeks to prohibit destructive open-pit mining, or mining in sensitive ecosytems, and hike taxes on the companies to give great benefits to local communities.

A draft bill filed by lawmakers and supported by the LRC in 2021 is still pending in Congress, but its backers are working to gain more support this year from legislators.

 

JUST TRANSITION?

Globally, the area covered by mines has doubled over the past three years, driven by demand for critical minerals, according to a 2023 study by LRC.

In the Philippines, the group says, that has exacerbated mining’s negative impacts on people and the environment – whether by depleting water supplies or forcing Indigenous peoples to move elsewhere.

Mining projects in the Southeast Asian country have often prompted protests by Indigenous people and disputes over their land rights, and the impact of mines on the environment, including water supplies.

Recent examples include the Tampakan and Didipio gold and copper mines in South Cotabato and Nueva Vizcaya provinces, where local communities have protested over pollution and water shortages they blame on the mines.

“Since 2017, we could no longer farm on my father’s land because it dried up. Many farmlands here no longer function due to irrigation issues,” said Myrna Duyan, a member of the Tuwali indigenous group who lives near the Australian-owned open-pit Didipio mine.

Ms. Duyan said some Indigenous people had been displaced by the mining, while others said it had split the community between those opposed to the mine and those who saw it as a welcome economic boost.

Despite the perceived economic benefits, “most of the taxes from mining goes to the national government and not to the local communities”, said Ms. Quirino, whose group says the royalties paid by mining companies should be hiked.

Under current laws, miners pay 4% in excise tax to the state and 1% in royalties to Indigenous communities.

While Philippine President Ferdinand Marcos Jr. has vowed to overhaul the industry’s tax regime, the proposed minerals management bill is not among his priority measures and he has not commented publicly on campaigners’ wider demands.

The bill, which seeks to raise the current excise tax and royalties to 10% each, also seeks heavier fines on individuals and corporations for human rights and environmental harms.

“If we don’t have a framework anticipating the huge demand for minerals, we will only open the country to mining that only promises money but without a nuanced approach to our resources,” said Ms. Quirino. – Reuters

PHINMA Corp. announces Annual Stockholders’ Meeting on April 23 at 10:00 a.m.

 

 

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Mondelez International inspires inclusion

'#InspireInclusion She-ssions' held by Mondelez International last March 4

Celebrates International Women’s Month by leading discussions on DEI, joining Women’s Run PH

Mondelez International, a leading global snacks company, proudly inspired inclusion during its Women’s Month celebration activities in the Philippines with a commitment to foster Diversity, Equity, and Inclusion (DEI) inside and outside its workplace. To empower the women in their organization, the company’s ambition is to continuously grow the number of women leaders in its organization.

Talking, Leading, and Running for Women Empowerment

Parañaque City Vice-Mayor Joan Villafuerte

As part of its commitment to DEI, Mondelez International hosted three events for its colleagues and stakeholders this March. The first one was the “#InspireInclusion She-ssions” held last March 4, which was a panel discussion on empowering women in the workplace. This event served as a platform for thought leaders, advocates, and professionals to engage in dialogue surrounding the vital importance of women’s empowerment in today’s landscape. The event featured women leaders within the organization from Sales and Manufacturing; as well as external speaker Audrey Dimarucot, mom, entrepreneur, and owner of clothing brand googooandgaga; and Parañaque City Vice-Mayor Joan Villafuerte, who shared her insights on women in government and how to inspire inclusion in the country. Mondelez International has called Parañaque City its home for the past 61 years, and the company looks to its leaders to share insights on promoting DEI.

“The more that people are invited, the more they are involved and the more that they follow policy,” shared Ms. Villafuerte. “For me that is inclusion. It means empowering people to speak up, empowering people to participate, and making them realize that they are part of government.”

In a significant stride towards inclusion, the company welcomed its first Filipino woman managing director in 15 years — Aleli Arcilla. This milestone not only underscores the company’s commitment to promoting female leadership but also exemplifies the tangible strides towards gender parity within its ranks.

Ms. Arcilla was recently herself a panelist during the second event, the “Building Inclusive Workplaces” session, hosted by the Makati Business Club last March 1.

“At Mondelez Philippines, we understand that diversity fuels creativity, equity promotes fairness, and inclusion fosters belonging,” said Ms. Arcilla. “These principles are not just aspirational; they are integral to our workplace culture and essential for driving long-term success in an ever-evolving snacks industry.”

In addition to these discussions, Mondelez International sought to show woman power by participating in a third event, the Filipina CEO Circle (FCC) Women’s Run PH, further demonstrating its solidarity with the broader movement towards gender equality. 20 women employees joined the run, proof that women are strong and ready to take on the world. The runners were from different departments, from Finance, Marketing, Sales, HR, and Logistics and was also part of the company’s wellbeing initiatives.

Calling Women Leaders to the Front

Mondelez International proudly boasts a leadership composition comprising 69% women, indicative of its steadfast dedication to providing equal opportunities for career advancement and professional growth. In alignment with its broader commitment to Economic Inclusion and Supplier Diversity (EISD), the company also collaborates with women-owned businesses within its supply chain. Through training and empowerment sessions, the goal of the engagement is to help support the growth of these businesses.

Through these initiatives and achievements, Mondelez International reaffirms its steadfast commitment to fostering a workplace culture that celebrates diversity, champions equity, and ensures the inclusion of all voices.

 

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Celebrating Women Who Lead at EastWest Ageas

The strides that the women’s empowerment movement has made have been remarkable and truly worth celebrating. When women are empowered, we are ensuring the health and societal development of families, communities, and countries.

That’s why this Women’s Month, we ask these four women leaders’ advice on how to advocate for yourself and make your own mark in the world:

Weng, Chief Operating Officer  

Weng is always looking at the big picture and feels the most empowered when she knows how she can contribute something of value to her people, whether by action or example. And in her personal time, this wife and mom feeds her fantasy needs by reading fiction favorites like Harry Potter and Percy Jackson.

Weng’s advice on making your mark  

“You do you. Be your own version, with your own brand of leadership and competencies. And always learn for yourself, add value to yourself, even as you continue to provide value to your customers, shareholders, and fellow employees.”

Lois, Chief Human Resources Officer  

This NBA enthusiast looks to Golden State Warriors point guard, Stephen Curry, for embodying the qualities of a leader. She finds his use of his own personal brand and impact to better the sport and other causes deeply inspiring. This same thinking is what Lois applies as she builds a culture of purpose and influence where Stewards become business enablers while still developing their own personal growth. 

Lois’s advice on how to lead  

“We live in a fortunate time where women’s empowerment is celebrated. Let’s give the world something to truly celebrate by ensuring we lead with integrity and grace. We owe it to the people we lead to take our roles seriously and show we are more than qualified to be where we are.” 

Martha, Chief Bancassurance Officer   

Driving collaboration and creating new solutions is what she likes best about her role. Martha enjoys meeting the various needs of our customers and the people as well. But more than just being a leader, she is a mother who always makes it a point to treasure the moments she spends with her family.

Martha’s advice on empowering yourself  

“Always believe in yourself and your abilities. Never underestimate your potential to make a difference, and always remain tough and determined. And make sure to find fulfillment in balancing your work with the priceless moments of connection and love in your life.” 

Rachelle, SVP, Head of Product Pricing and Management  

When it comes to life, Rachelle always makes sure that she gives her very best. And her key to this is ensuring that she has plans in place. But her role as a mother has led to her realization that life offers much more when you open yourself to more unexpected opportunities. 

Rachelle’s advice on taking risks  

“Take chances. Get out of your comfort zone. Just try. Never deprive yourself of opportunities just because you are scared. You will learn as you go, and you will find out that you can do it. You just must take chances and bet on yourself.” 

Even with the advances women now experience, society still has a long way to go to be truly equal. According to the Women’s Empowerment Principles, penned by the UN Women and UN Global Compact, there are a myriad of ways to continue empowering women in the workplace and community.

Whether it’s promoting their professional development, championing equality through initiatives and advocacy, or ensuring all workers are treated fairly, a lot can be done and can still be done for gender equality. 

And here at EastWest Ageas, we ascribe to that principle in making sure we are a #GreatPlaceToGrow.

 

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FORCES OF NATURE: AboitizPower’s BABAEngineers champion PH RE push

AboitizPower women engineers from its wind, geothermal, and hydro projects. (L-R) ARI Wind Project Development Manager Sandra Banisa, APRI Project Control Supervisor Sheryl Villegas, and Hedcor Civil Support Engineer Cherry Ann Gutierrez all thrive in their respective roles within the complexly transitioning and male-dominated industry of power generation.

BABAEngineer Sandra Banisa has been with Aboitiz Renewables, Inc., an AboitizPower subsidiary, for nine years. She is currently fulfilling the critical role of a Wind Project Development Manager in a period when the company is adding wind power to its generation portfolio for the first time.

“I have been involved in hydro construction and wind power plant development in AboitizPower. This has allowed me to actively participate in reducing reliance on fossil fuels, mitigating environmental impact, and driving innovation in sustainable energy technologies,” she said. “Additionally, the opportunity to engage with local communities, promote environmental stewardship, and positively impact socioeconomic development further fulfills my role in the company.”

Sandra is among the empowered AboitizPower BABAEngineers — a portmanteau of the words “babae” or woman and “engineer” — who show how women can be accomplished in a male-dominated industry such as power generation, more so amidst a crucial point in which the country is transitioning to cleaner technologies.

“AboitizPower’s mission of providing reliable and sustainable energy to businesses and communities in the country aligns with my desire to create a better world for my children,” she added, while recounting her involvement in the business development of the upcoming 206-megawatt wind plant in San Isidro, Northern Samar, done in partnership with other energy companies.

The Makiling-Banahaw (Mak-Ban) Geothermal Power Plant of AP Renewables, Inc. is a 458-megawatt geothermal power station complex in Laguna and Batangas that delivers clean and renewable baseload power.

Aligned with the country’s ambition of having a 35% share of renewable energy (RE) in the power generation mix by 2030 and 50% by 2040, AboitizPower is adding 3,700 megawatts of new RE capacity en route to a balanced portfolio of 4,600 megawatts each between its thermal and renewable assets.

Currently, over 1,000 megawatts of disclosed energy projects — including solar, wind, geothermal, and battery energy storage systems — are in the pipeline.

To deliver these, AboitizPower and its BABAEngineers are hard at work.

This includes AP Renewables, Inc. Project Control Supervisor Sheryl Villegas, who oversees RE construction and engineering projects, ensuring that project plans and targets are met. This year, the company is looking to put online a 17-megawatt binary geothermal power plant in Tiwi, Albay.

Reminiscing on her experiences in the power sector, she tells fellow and aspiring BABAEngineers that she is “more than willing to share knowledge, offer unwavering support, and recognize even their small achievements to motivate and help them achieve significant progress over time.”

“I empower myself through continuous learning and development, exploring new directions and opportunities, instilling a positive outlook, and surrounding myself with networks of reassuring individuals. These, I think, are essential to anyone’s personal and professional growth,” she explained, outlining her last 14 years with AboitizPower.

Like Sheryl, BABAEngineer Cherry Ann Gutierrez also recognized the importance of a support system underpinned by a culture of inclusivity and meritocracy.

“I appreciate the support and encouragement from my colleagues, supervisors, managers up to top management. AboitizPower values diversity, ensuring that female engineers like me have equal opportunities for career growth,” she shared. “I’m treated equally and get recognized for my skills, regardless of my gender. It’s empowering to work in an environment that breaks gender stereotypes in engineering.”

Ampohaw Hydro in Sablan, Benguet is one of 22 run-of-river hydropower facilities by Hedcor. It is also the first automated plant, having undergone automation in 1997.

Cherry’s tenure with AboitizPower has lasted for more than 16 years and counting. Currently, she is Hedcor’s Civil Support Engineer in Mindanao. AboitizPower’s Hedcor has generated electricity from run-of-river hydropower systems for more than 45 years and recently added solar facilities in its roster of RE capacity.

“I get to stay updated on the latest industry trends, technologies, and regulations that relate to the power generation sector,” she said of her role. “We have been involved in new engineering software applications that extend our skills and enable new learning.”

As a mother to a growing boy, Cherry said that she is also satisfied with the work-life balance in AboitizPower, which enables her to find reward and enrichment in both her professional career and her personal life.

Extending her maternal trait of being protective and caring, she said: “I’m proud to actively contribute to implementing vital safety measures in power plants and construction sites, a responsibility I consistently uphold across all entrusted projects.”

AboitizPower’s BABAEngineers are Transforming Energy for a Better World one project at a time. They are thriving in a culture that values diversity, inclusion, personal merit, and skill; one where success is rewarded irrespective of one’s gender.

“I have remained focused on my goals and committed to proving my capabilities through hard work, professionalism, and dedication,” Sandra said. “I have persevered and demonstrated my worth through my performance and achievements.”

 

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StanChart creates a shared, progressive future through empowerment

SC Corporate Affairs, Brand and Marketing Head Mai Sangalang (2nd from right, standing) and ASKI President Rolando Victoria (3rd from right, standing) led the launch of Futuremakers by Standard Chartered program ‘Lifting Participation of Women Youth through Microentrepreneurship.’

Power is a word often undervalued in everyday life. From its most popular usage, it denotes control and influence over others, bringing to mind kings and presidents, armies and the often-quoted descent into corruption. What most people overlook is power’s more mundane definition — that of ability.

Electric power, for instance, is what enables most of the luxuries and conveniences of modern life. Sadly, like the power of kings and presidents, even this more commonplace ability is not accessible to all.

The government, under its 2023-2032 National Total Electrification Roadmap, plans to electrify 3.677 million households over the next five years, of which, 2.706 million are within the franchise areas of the electric cooperatives (ECs) requiring different modes of connection and some degree of subsidy for initial energization. About 1.29 million of these are also in off-grid areas, which include those residing in the main grid but are very difficult to reach through regular connection and require alternative solutions.

The rest are expected to be served by private investor-owned utilities and local government unit-owned utilities, and are expected to be undertaken generally through regular connections.

This is cold comfort, however, to those in the regions who still lack electric power today or are in constant risk of power outages from typhoons.

This is the issue that Standard Chartered Bank’s Futuremakers program seeks to address. The project provides microfinancing to 15 women-youth microentrepreneurs in typhoon-prone provinces of Nueva Ecija, Aurora and Isabela with loan amount ranging from P100,000 to P200,000 at no interest, which will be used for green energy adoption through installation of solar panels for their business operations to become more efficient and resilient.

“For four years now, under Futuremakers by Standard Chartered, we have been supporting women, youth and other microentrepreneurs, most recently in calamity and typhoon-prone areas such as Nueva Ecija and Aurora, to build resilience by adopting renewable energy in their business operations,” Mai Gacilo Sangalang, head of corporate affairs, brand and marketing at Standard Chartered, said.

With the cooperation of Alalay Sa Kaunlaran Microfinance Social Development Inc. (ASKI), a local microfinance institution that will manage the funds, the project aims to enable young women entrepreneurs by supplementing their electricity needs and reducing their reliance on their region’s main grid.

“Aurora is a coastal region located in a typhoon-prone area. The province’s geographical location makes it susceptible to the annual typhoon season, which typically occurs between June and November. The typhoons in this region can bring heavy rains, strong winds, and even flooding, causing damage to power infrastructure,” ASKI said.

“Aurora Electric Corp. has consistently strived to provide reliable and uninterrupted power supply to the people of the Aurora region. However, several challenges have been impacting our ability to maintain this reliability.”

During the worst scenarios, such as when Tropical Storm Paeng devastated the region in late 2022, power could be out for weeks.

Such outages severely hurt businesses like those of Jenny Dimaandac’s, whose family owns a fishery and resort in Aurora which rely heavily on the electricity for their water pumps, or Lorela Esparis’s, whose ice cream business cannot operate without their freezers.

Using the solar panels funded by green energy loans from the Futuremakers program, entrepreneurs like them could have a contingency plan that would help them in their business. And, due to plentiful sunlight in the region, it could significantly reduce their costs as well. In fact, some of ASKI’s clients reported as much as 80-90% reduction in their electricity bills, enabling them to reinvest their savings back into their businesses.

Futuremakers by Standard Chartered encourages increased economic inclusion throughout its markets as a means of addressing inequality. The program helps underprivileged youth (ages 35 and under), particularly women and those with visual impairments, acquire new skills and increase their employability or entrepreneurial prospects. Additionally, it fosters the success of micro and small firms by offering them the funding and expertise in financial management that they require to expand.

Beneficiaries are engaged in trading, agripreneurship, or value chain program, and whose businesses are recovering from the protracted pandemic and current economic challenges. All beneficiaries will adopt solar electrification for their microbusinesses to sustain their operations given the frequency of typhoons (resulting to power outage) and high cost of electricity in the area.

To ensure sustainability, the program also includes other components focused on skills development such as digital technology, personality development, product marketing and entrepreneurship trainings.

“It is fulfilling to see how our programs are helping beneficiaries improve their quality of life and business conditions by redeploying savings from electric costs to expand and/or diversify their enterprises. It is our aspiration to help more microentrepreneurs fully recover from the pandemic and transition into clean energy to operate more efficiently, responsibly and sustainably,” Ms. Sangalang said.

 

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Inflation uptick may delay rate cuts

A VENDOR sells meat at a public market in Manila, March 5. Inflation data for March is scheduled to be released on April 5. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

A POTENTIAL uptick in inflation over the next few months could prompt the Bangko Sentral ng Pilipinas (BSP) to delay its rate easing cycle, analysts said.

“This could keep the BSP from cutting rates as anticipated by market players. If inflation persists, they might not cut at all,” Jonathan L. Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., said in a Viber message.

BSP Governor Eli M. Remolona, Jr. last week said that inflation could have quickened further to 3.9% in March.

Inflation accelerated to 3.4% in February, the first time it quickened in five months. If the headline print picks up in March, this would mark the second straight month that inflation accelerated.

Inflation data for March is scheduled to be released on April 5.

The BSP earlier said that inflation could temporarily accelerate above the 2-4% target range in the second quarter due to the El Niño dry spell and positive base effects.

“The uptrend in inflation will definitely delay the decision to cut rates since inflation is the key variable that BSP is monitoring to guide its decision regarding policy rates,” University of Asia and the Pacific (UA&P) Senior Economist Cid L. Terosa said in an e-mail.

The Monetary Board kept its benchmark rate steady at a near 17-year high of 6.5% for a third straight meeting in February. From May 2022 to October 2023, the BSP has raised borrowing costs by 450 basis points (bps).

The Monetary Board moved its policy meeting, originally scheduled for April 4, to April 8, citing the timing of key data releases such as March inflation.

Finance Secretary Ralph G. Recto last week said that while inflation may remain elevated in the coming months, it will eventually return to within the 2-4% target.

Mr. Recto said he expects March inflation to settle at around 3.9%, similar to Mr. Remolona’s estimate.

“But, I think within the year, it’s still going to be within 2-4%. It’s going to be a bumpy road, but I think within the band. Even if it overshoots, it will return to target, more or less,” he said in mixed English and Filipino at the sidelines of an event last week.

This year, the BSP expects inflation to average 3.6%.

Mr. Ravelas said the central bank may begin to cut rates by the second semester.

“We will see after June if we can cut rates. But I am looking at the end of the third quarter as the first cut, if any,” he said.

The BSP is seen to begin slashing rates in sync with the US Federal Reserve, which is widely expected to start its easing cycle by June.

The FOMC (Federal Open Market Committee) stood pat at its meeting last week, keeping its fed funds steady at the 5.25-5.5% range. From March 2022 to July 2023, the Fed increased rates by a total of 525 bps.

Mr. Remolona earlier said that while the Monetary Board closely monitors the Fed, its own policy decisions are not dependent on the US central bank. He also said the BSP will likely begin cutting “in the next few policy meetings.”

Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco likewise said that the BSP does not necessarily need to move in step with the Fed.

“I don’t think that the BSP needs to mirror the Fed, but when the latter does start cutting rates, it will give the former more confidence to do so, as cutting rates in such an environment will have less of an impact on the peso’s stability,” he said in an e-mail.

UA&P’s Mr. Terosa said the BSP is likely to mirror the Fed in terms of easing.

“While it will be economically advantageous for the country to mirror the Fed in terms of easing, I believe that there is leeway for the country to make decisions on rate cuts ahead of Fed depending on marginal changes in the inflation rate,” he said.

“Changes in the inflation rate that do not drastically move the economy away from its target range can give the country some room to cut rates ahead of the Fed. Given past decisions on policy rates, however, I think the BSP will mirror the Fed in terms of easing,” he added.

Bank of America (BofA) Global Research said that if the Fed cuts rates as expected in June, the BSP will likely begin rate cuts “around the same time or in the second half of 2024.”

However, if the Fed delays its first rate cut, this could also affect the BSP’s own policy easing.

“If the Fed’s first cut is delayed beyond June, the marginal impact will likely be more notable for a few regional central banks. The People’s Bank of China, Bank Indonesia and BSP might postpone rate cuts to safeguard foreign exchange stability,” it said in a report dated March 22.

Both Pantheon Macroeconomics and BofA expect the BSP to reduce borrowing costs by a total of 100 bps this year. If realized, this would bring the benchmark rate to 5.5% by year end.

New taxes ‘last resort’ — Recto

THE Bureau of Internal Revenue is encouraging taxpayers to file their tax returns ahead of the April 15 deadline.— PHILIPPINE STAR/ EDD GUMBAN

THE Finance department may not introduce any new tax proposals under the Marcos administration, but will instead focus on improving tax collection efficiency, its top official said.

“It is incumbent upon this administration that its last resort should always be to increase taxes,” Finance Secretary Ralph G. Recto told reporters in mixed English and Filipino at the sidelines of an Economic Journalists Association of the Philippines event last Thursday.

Asked if there is a chance that there will be no new tax measures until the end of the administration, Mr. Recto said: “There is a possibility. I think we should try first to collect what’s there. There are so many leakages.”

Latest Development Budget Coordination Committee (DBCC) data showed that the government is targeting to generate P4.235 trillion in revenues this year, equivalent to 15.5% of gross domestic product (GDP).

Of this, the Bureau of Internal Revenue and the Bureau of Customs are expected to collect P3.055 trillion and P959 billion, respectively.

Mr. Recto earlier said he does not plan to push for new tax measures at least this year and the next, save for the pending tax reforms in Congress, such as the rationalization of the mining fiscal regime and the Passive Income and Financial Intermediary Taxation Act.

Current tax rates are already high as is, Mr. Recto said. “In my view, taxes are already high. What can you tax? 60% of our revenue already is indirect tax. And it’s the most efficient way to collect, indirect tax.”

“I cannot tax oil anymore. I cannot tax power anymore. I cannot increase the price of your vehicle anymore. I cannot increase the registration of your vehicle anymore,” he added.

Mr. Recto is also not keen on imposing luxury taxes.

Asked about taxing luxury cars, he said: “Cars already have excise and value-added tax (VAT). There’s registration fees, there’s motor vehicle user’s charge.”

Raising sin taxes such as a tobacco tax would also result in more smuggling, he added.

“Hopefully there will be no trigger (or need to impose new taxes). Collection efficiency first. But that will take time. You have to digitize, digitalization, so on and so forth. I think it is prudent for us to say, let’s first try to improve tax collection efficiency,” he said.

“The best way to grow your revenues is to grow the economy. If you grow the economy, you’ll collect more taxes.”

Instead of major tax proposals, Mr. Recto said he would be willing to study proposals on higher fees and charges. “We can probably look at fees and charges. I’m willing to take a look too. User fees, like that.”

The Finance department is also looking at ways to better tax the e-commerce sector, he said.

“People are shifting to e-commerce. It’s hard to collect there. We have to find a way, so let’s concentrate on that. But like we said, it’s easy to make a law but will you be able to enforce it? Maybe we should computerize that.”

“It’s unfair to brick-and-mortar (stores) that they pay taxes and those in e-commerce don’t,” he added.

A Senate bill seeking to impose a 12% VAT on digital transactions is now up for second reading, while the counterpart bill was approved by the House of Representatives in November 2022.

Latest data from the Bureau of the Treasury (BTr) showed that the National Government (NG) posted a budget surplus of P88 billion in January, driven by a 21.15% jump in revenues to P421.8 billion.

The NG’s deficit ceiling is capped at P1.39 trillion or 5.1% of GDP this year. As of end-2023, the deficit-to-GDP ratio stood at 6.2%. — Luisa Maria Jacinta C. Jocson

DoE sees yellow alert in April, May

The sun sets over Parañaque City, March 7, 2024. — PHILIPPINE STAR/RUSSELL PALMA

By Sheldeen Joy Talavera, Reporter

THE Luzon grid may potentially experience yellow alerts in April and May as the operations of several hydroelectric power plants have been affected by the El Niño weather event, according to the Department of Energy (DoE).

This comes after the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) on Friday declared the official start of summer in the country.

The country also continues to experience the effects of the El Niño weather event, which has triggered drought and dry spells around the country.

“Based on the latest DoE simulations, with hydroelectric power plants running below capacity level due to the El Niño phenomenon, the Luzon grid might experience yellow alert in April and May,” it said in a statement.

Yellow alerts are declared when supply available to the grid falls below a designated safety margin.

The DoE, however, said the Visayas and Mindanao grids will have “normal reserve level” during the second quarter.

Irma C. Exconde, director for DoE’s Electric Power Industry Management Bureau, said that the possible yellow alert in April and May is based on the scenario that “there’ll be 70% reduction” or “zero” capacity from hydropower plants.

“The demand forecasts remain as we have forecasted this year under an El Niño scenario of 12% increase from 2023,” Ms. Exconde told BusinessWorld in a Viber message.

However, Ms. Exconde said that the actual peak demand last week is lower by 1,585 megawatts (MW) compared to the week earlier which is “not yet as high” as forecasted for an extreme El Niño.

There are 44 existing hydropower plants with an installed capacity of 2,548 MW connected to the grid, according to the data from the DoE as of end-November 2023.

In its latest advisory, PAGASA said that the El Niño across the tropical Pacific Ocean is showing “signs of weakening” and is expected to persist until May.

Energy Secretary Raphael P.M. Lotilla said the DoE continues to monitor the power situation especially as “scorching temperatures” are expected in the next three months.

“The summer period exerts significant pressure on electricity demand due to increased cooling needs, leading to peak demand shifts in consumption and infrastructure strain,” he said in a statement on Sunday.

“We are, therefore, closely coordinating with all the stakeholders to carefully manage and plan for the effects of the summer period and the on-going El Niño to ensure reliable and sustainable electricity supply.”

As of Sunday morning, the Luzon grid has an available generating capacity of 13,715 MW and a system peak demand of 8,821 MW, data from the National Grid Corp. of the Philippines (NGCP) showed.

To avoid issuing alert notices, the DoE said that it is monitoring the grid by continuously updating the power outlook that “considers any changes particularly in the operations of power generating units.”

It added that it is coordinating with government agencies to facilitate timely approval of regulatory requirements for the completion of power facilities.

“The injection of power to the grid of generation facilities under testing and commissioning are allowed to provide additional capacity to the grid. The NGCP is likewise directed to expedite completion of this activity,” the DoE said.

The DoE also urged the public to continue practicing energy conservation “to minimize the cost of running oil-based power plants” during the period.

In 2023, the Philippines raised two red alerts and eight yellow alerts, according to the DoE, below the initial projection of 12 yellow alerts.

Gross borrowings slump in Jan.

JOHN GUCCIONE-PEXELS

THE National Government’s (NG) gross borrowings slumped by nearly half to P203.151 billion in January, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that total gross borrowings declined by 44.6% in January from the P366.863 billion in the same month in 2023.

During the month, domestic borrowings accounted for more than two-thirds or 69.7% of the total.

Gross domestic debt stood at P141.505 billion in January, a 21.1% drop from the P179.3 billion seen a year ago.

This consisted of fixed-rate Treasury bonds amounting to P130 billion and Treasury bills worth P11.505 billion.

Meanwhile, gross external debt dropped by 67.1% to P61.646 billion in January from P187.563 billion a year ago.

Broken down, program loans stood at P56.298 billion and new project loans were recorded at P5.348 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the year-on-year drop in gross borrowings was primarily due to the dollar-bond offering in January 2023.

In January last year, the Philippines raised $3 billion from its US dollar bond issuance. This was the second global bond offering under the Marcos administration.

“Global bond issuance by the National Government has yet to start but scheduled as early as the first half of 2024, thus resulting to the sharp year-on-year decline in gross borrowings,” Mr. Ricafort said in a Viber message.

Finance Secretary Ralph G. Recto earlier said that the Treasury is working on finalizing its first offshore issuance of the year. No details were available.

For the coming months, Mr. Ricafort said that the NG’s gross borrowings could rise. “Furthermore, the Retail Treasury Bond (RTB) issuance in the latter part of February 2024 would lead to some pick up in gross borrowings to start with, on top of other sources of borrowings,” he added.

In February, the government raised P584.86 billion from its offering of five-year RTBs, higher than the P400-billion target set by the BTr.

This year, the government’s borrowing program is set at P2.46 trillion, with P1.85 trillion to be raised from the domestic market and P606.85 billion from foreign sources.

In 2023, the NG’s gross borrowings rose by 1.38% to P2.193 trillion, but was slightly below the P2.207-trillion borrowing program for the year. — Luisa Maria Jacinta C. Jocson

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