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Japan issues fresh warnings against sharp yen falls

JUN RONG LOO-UNSPLASH

TOKYO – Japanese authorities will take necessary actions on currencies, Finance Minister Shunichi Suzuki said on Thursday, signaling readiness to intervene in the exchange-rate market after the yen’s slide to a fresh 38-year low against the dollar.

“It’s desirable for exchange rates to move stably. Rapid, one-sided moves are undesirable. In particular, we’re deeply concerned about the effect on the economy,” Suzuki told reporters.

“We are watching moves with a high sense of urgency, analysing the factors behind the moves, and will take necessary actions,” he said.

Chief Cabinet Secretary Yoshimasa Hayashi also told a news conference on Thursday that Tokyo will take “appropriate” action against excessive currency moves. He declined to comment on yen levels and whether authorities would intervene.

The yen stood at 160.45 per dollar in Asia on Thursday, remaining a fraction away from the 38-year low of 160.88 hit overnight on Wednesday.

Japanese authorities are facing renewed pressure to combat sharp declines in the yen, which has fallen 12% so far this year against the dollar as traders focus on the wide interest rate divergence between Japan and the United States.

The yen’s fast-pitch decline below the key 160-to-the-dollar level is heightening market alarm over the chance of imminent yen-buying intervention.

“At this point, authorities are probably starting to worry not just about the speed but the level,” Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said in a research note. “Unless they intervene, there’s a risk the yen will slide toward 162.”

But analysts doubt whether jawboning, and even intervention, can reverse the weak-yen tide that is driven mostly by uncertainty over how soon the US Federal Reserve will start cutting interest rates.

The Bank of Japan has dropped signals of an imminent interest rate hike, though any increase in the current near-zero short-term policy target will still keep Japan’s borrowing costs very low. Its next policy meeting will be held on July 30-31.

Tokyo spent 9.8 trillion yen ($61 billion) intervening in the foreign exchange market at the end of April and early May, after the Japanese currency hit a 34-year low of 160.245 per dollar on April 29. – Reuters

Philippines needs to ‘do more’ than protest China’s actions in South China Sea, Marcos says

PHILIPPINE STAR/KJ ROSALES

MANILA – Philippine President Ferdinand Marcos Jr said on Thursday his country needed to “do more” than protest the “illegal action” taken by China against his country’s navy during last week’s routine resupply mission in the South China Sea.

“We have filed over a hundred protests, we have already made a similar number of demarche,” Mr. Marcos told reporters. “We have to do more than just that.”

No shots were fired on June 17, so the actions by the China Coast Guard could not be considered an armed attack, but it was a “deliberate action to stop our people” from resupplying troops stationed at the disputed Second Thomas Shoal, Marcos said.

China’s embassy in Manila did not immediately respond to a request for comment on Marcos‘ remarks Thursday.

A Philippine sailor suffered “serious injury” after what its military described as “intentional-high speed ramming” by the Chinese Coast Guard, which the Chinese foreign ministry has disputed, saying their coast guard’s actions were lawful.

The United States, which has condemned China’s actions, reaffirmed its ironclad commitment to the Philippines during a call between Defense Secretary Lloyd Austin and his Philippine counterpart on Wednesday.

“The two officials discussed the importance of preserving the rights of all nations to fly, sail, and operate — safely and responsibly — wherever international law allows,” the Pentagon said in a readout.

The Philippines has not asked the United States for support in resupplying its troops, its Washington ambassador said on Wednesday, adding that the United States was providing only “visuals” to aid his country.

Ambassador Jose Manuel Romualdez said the Philippines had sought a meeting with Chinese officials to lower tensions, not resolve territorial claims, and hoped it would occur “maybe early next month”.

Mr. Romualdez said that if the Philippines was not able to resupply its troops, it would amount to “killing our soldiers” through starvation and thirst.

“I don’t think China wants to have a major conflict. And definitely we do not want to have one. And so, that’s a good starting point,” he said.

China claims almost the entire South China Sea, including parts claimed by the Philippines, Vietnam, Malaysia and Brunei.

An international tribunal dismissed China’s expansive claims in 2016, a ruling that Beijing rejects. – Reuters

Philippines has not sought US resupply support in China dispute -ambassador

Philippine Coast Guard personnel documents a Chinese Coast Guard vessel shadowing the Philippines’ resupply mission at Second Thomas Shoal in the South China Sea, March 5, 2024. — REUTERS

WASHINGTON – The Philippines has not asked the United States for support in resupplying its troops in a stand-off with China in the disputed South China Sea, its Washington ambassador said on Wednesday, adding that the U.S. was providing only “visuals” to aid his country.

Manila has complained that the Chinese Coast Guard used “aggressive and illegal force” last week to disrupt a resupply mission for Filipino troops stationed on a rusting warship grounded on the Second Thomas Shoal, part of an escalating territorial row with the Philippines, which has a long-standing defense treaty with the United States.

Ambassador Jose Manuel Romualdez told reporters Manila’s patience was being stretched by China‘s actions, but it was hoping for talks to deescalate tensions with Beijing as soon as July, and did not want to invoke the US treaty.

“We would like to be able to supply our soldiers on our own without really bringing in any third party because, as I said, this is our territory, which we’ve made very clear from the very beginning. And so, we have not asked the United States for any assistance whatsoever,” Mr. Romualdez said.

He said the US only was providing “visuals” to help view the situation around the ship.

The Philippines said a sailor was severely injured and vessels damaged in the clash last week. China‘s Coast Guard personnel carrying knives and spears looted firearms and “deliberately punctured” Philippine boats involved in the mission, the Philippines military said.

China disputed the Philippine account, saying necessary measures taken were lawful, professional and beyond reproach.

Mr. Romualdez said the Philippines had sought a meeting with Chinese officials to lower tensions, not resolve territorial claims, and hoped it would occur “maybe early next month.”

Philippines Foreign Affairs Secretary Enrique Manalo told a Senate hearing in Manila on Tuesday the Philippines is committed to working with China to develop “confidence building measures” to manage tensions in the South China Sea.

Philippines media quoted Mr. Manalo as saying that the countries held a working group meeting last week in preparation for a potential Bilateral Consultation Mechanism meeting in July.

Mr. Romualdez said that if the Philippines was not able to resupply its troops, it would amount to “killing our soldiers” through starvation and thirst.

“I don’t think China wants to have a major conflict. And definitely we do not want to have one. And so, that’s a good starting point,” he said. – Reuters

Philippine Treasury says Q3 domestic debt sales to raise $10.7 bln

WIKIPEDIA/JUDGE FLORO
MANILA – The Philippines plans to raise as much as 630 billion Philippine pesos ($10.70 billion) from the sale of treasury bills and bonds in the third quarter, the Bureau of the Treasury (BTr) said on Thursday.
The BTr would hold weekly auctions for 91-day, 182-day and 364-day T-bills in July to September, offering up to 20 billion pesos each.
It would also offer 115 billion pesos of T-bonds each in July and September, and 140 billion pesos in August, BTr said in a posting on its website. – Reuters

Philippines plans 200,000 metric tons of sugar imports, minister says

ALEXANDER GREY-UNSPLASH
MANILA – The Philippines is looking to import up to 200,000 metric tons of sugar by September to fill a projected supply shortfall before the harvest season, its farm minister said late on Wednesday.
“The current stock will fall by August, September, so we have to (cover a gap) of up to 200,000 tons by then,” Agriculture Secretary Francisco Tiu Laurel told reporters. – Reuters

Nintendo’s Payday Sale on Shopee: Enjoy massive discounts up to 40% off and flexible payments with Spaylater, 0% interest for 3 months

Calling all gamers and Nintendo enthusiasts! Nintendo’s Payday Sale on Shopee is here, and it’s packed with incredible offers that will elevate your gaming experience. Whether you’re looking to upgrade your console or dive into the world of Nintendo for the first time, this sale is designed to delight with up to 40% off on select models and more.

Unbeatable Discounts 

Nintendo and Shopee have teamed up to bring you unprecedented savings on some of the most sought-after gaming consoles: 

  • Nintendo Switch Gray Console and Neon Blue Neon Red V2: Huge savings of 6000 OFF, bringing the price down from Php 17,990 to just Php 11,299.
  • Nintendo Switch Mario Red OLED: Save 4000 OFF, reducing the price from Php 19,990 to Php 15,990.

These discounts are not to be missed, especially for those looking to get their hands on the latest Nintendo consoles. Save more when you check out with Shopee’s Mega Discount Voucher up to Php 1,000 OFF!

Flexible Payments with Spaylater

In addition to these incredible discounts, Nintendo is offering flexible payment options through Spaylater on Shopee. This means you can spread the cost of your purchase over three months with 0% interest, making it easier than ever to bring home your favorite Nintendo console without straining your budget.

How to Take Advantage of the Sale

To make the most of Nintendo’s Payday Sale on Shopee:

  1. Explore Your Options: Consider which Nintendo console suits your gaming style and preferences.
  2. Use Spaylater Wisely: Take advantage of the 0% interest payment plan to manage your budget effectively.
  3. Apply Mega Discount Vouchers: Ensure you apply any available vouchers during checkout to maximize your savings. 
  4. Act Quickly: Sales events like these are popular, so don’t hesitate too long to secure your purchase.

Nintendo’s Payday Sale on Shopee is an opportunity not to be missed for anyone looking to elevate their gaming setup. With substantial discounts on Nintendo Switch consoles, flexible payment options through Shopee Spaylater, and additional perks like mega discount vouchers and free shipping, now is the perfect time to level up your gaming experience.

So, what are you waiting for? Head over to Nintendo’s official store on Shopee and browse the offers and secure your favorite Nintendo console at an unbeatable price. Whether you’re treating yourself or shopping for a loved one, Nintendo’s Payday Sale on Shopee promises gaming fun for everyone. Happy gaming! 

Shop here: https://bit.ly/SHPNintendoJune2024

 

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[B-SIDE Podcast] Importance of road-worthy vehicles on the daily lives of Filipinos

Follow us on Spotify BusinessWorld B-Side

According to the World Health Organization, despite an alarming number of cases, road traffic injuries are often neglected public health issues. With this concerning issue, Mr. John Alison Uy of the Vehicle Inspection Center Operators Association of the Philippines (VICOAP) elaborated on the importance of road safety and road-worthy vehicles to avoid road crashes and deaths.

Editing by Arjale Queral

Follow us on Spotify BusinessWorld B-Side

A comprehensive guide to Astoria Hotels and Resorts’ MICE offerings

In today’s evolving landscape where business intersects with leisure, the strategic choice of a MICE-equipped (Meetings, Incentives, Conferences, and Exhibitions) hotel or resort holds significant importance. The selection process involves assessing state-of-the-art conference amenities, upscale lodging options, and diverse leisure activities to maximize the success of your corporate event.

Astoria Hotels and Resorts (AHR) is an esteemed domestic hospitality chain based in the Philippines. Renowned for its establishment of properties in prime tourist destinations across the country, the brand also boasts modern, expansive, visually appealing, and highly functional venues tailored for meetings, incentives, conferences, and exhibitions (MICE).

Astoria Palawan, Ready for Companies Big or Small

Situated alongside the scenic Sulu Sea, Astoria Palawan offers breathtaking views of lush landscapes and majestic mountain ranges that showcase the natural splendor of Palawan. The resort not only boasts stunning surroundings but also provides a wide range of recreational activities and upscale dining options for guests to savor. Amenities include several swimming pools, a recreation pavilion with karaoke and various games, and a selection of dining venues. Furthermore, catering to both business and leisure travelers seeking a seamless integration of work and leisure, the Mangrove Conference & Convention Center By Astoria and Palawan Waterpark By Astoria ensure an unforgettable experience characterized by both productivity and relaxation.

Mangrove Conference & Convention Center By Astoria is an ideal venue for companies looking to host significant business events or corporate celebrations with sophistication. The expansive Main Convention Hall spans 439 square meters and has a seating capacity of 450 people. For more intimate gatherings, Astoria Palawan provides three additional function rooms. The Raffia Hall offers 119 square meters of space and can accommodate up to 100 guests, while Buri and Dao rooms, with 49 square meters each, have a capacity of 50 guests each.

Astoria Palawan offers an elegant venue for corporate events seeking a serene setting. Aqua Cena boasts remarkable views of the resort’s waterpark, spanning a spacious 302 square meters to accommodate up to 180 guests. For those in search of a grand dining experience, The Reserve presents a distinctive setting for guests to savor a blend of local and international cuisine. With 280 square meters of space, this venue comfortably seats up to 170 attendees, who can indulge in the culinary delights while enjoying picturesque beachfront vistas.

Located just a short distance from The Reserve, Habitat offers a tranquil and intimate dining experience by the beach. With a floor area of 150 square meters, this restaurant can comfortably accommodate up to 90 guests, making it an ideal venue for private professional gatherings. Additionally, for those looking to end the evening with a touch of sophistication, Halo Dome provides a setting with a capacity of 70 people. This 115 square meter events space is suitable for hosting intimate gatherings, business meetings, and vibrant nights filled with music and entertainment.

To know more about Astoria Palawan, you may visit www.astoriapalawan.com. You may also follow them on Facebook, Instagram, TikTok, and YouTube.

You may also contact the Astoria Palawan team via:

Email: reservations@astoriapalawan.com 

Mobile: (+63) 998-961-3419 

Landline: (+63 2) 8687-1111 local 8302 

Astoria Boracay, Embark on Luxurious Corporate Retreats

Indulge in your ideal vacation experience at Astoria Boracay. Situated in the serene and upscale Station 1 of Boracay, this resort provides a peaceful retreat featuring a contemporary pool, a state-of-the-art fitness center, and an on-site dining venue. Ideal for both leisure travelers and individuals seeking venues for corporate meetings and social gatherings, this exclusive sanctuary guarantees a memorable island escape.

Astoria Boracay offers two function rooms spanning a total floor area of 121 square meters, capable of accommodating up to 80 individuals collectively. For smaller business groups, the rooms can be partitioned into two halves, with Function Room A accommodating 45 participants and Function Room B seating 32. These versatile spaces are ideal for hosting small business meetings, gatherings, or presentations.

Astoria Boracay offers stunning shoreline views and presents an intimate dining experience at its restaurant, Soleggiato, tailored for corporate executives. The restaurant boasts a 56-square-meter space that can comfortably seat up to 25 guests, making it a perfect setting for brief meetings accompanied by exceptional cuisine.

To know more about Astoria Boracay, you may visit www.astoriaboracay.com. You may also follow them on Facebook, Instagram, TikTok, and YouTube.

You may also reach out to Astoria Boracay via:

Email: reservations@astoriaboracay.com 

Mobile: (+63) 908-872-7922 

Landline: (+63 2) 8687-1111 locals 8739, 8740, 8738, and 8737 

Astoria Current, From Boardroom to Beachfront

Boasting a contemporary aesthetic tailored to the preferences of discerning clientele, Astoria Current is an ideal destination for individuals seeking an enjoyable and dynamic beach retreat, as well as those in pursuit of vibrant venues suitable for off-site professional conferences and social events. Featuring two luxurious pools, a spa, and a fully equipped gym, the resort’s sleek and modern architecture is designed to captivate today’s sophisticated business traveler.

Astoria Current’s Annex Building Function Room boasts a 140-seating capacity for medium-sized companies, with adequate space at 247 square meters that can be customized for different setups for events, receptions, and major company planning. For majestic views of the expansive Sulu Sea, the Sales Deck Function Room can be utilized to seat 100 people, thanks to its 223 square meter space.

To know more about Astoria Current, you may visit www.astoriacurrent.com. You may also follow them on Facebook, Instagram, TikTok, and YouTube.

You may also reach out to Astoria Current via: 

Email: rsvn@astoriacurrent.com  

Mobile: (+63) 998-968-1265 

Landline: (+63 2) 8687-1111 local 8731  

You may also book directly via www.astoriacurrent.com.

Astoria Bohol, Retreat to Breathtaking Baclayon

The Annex Building Function Room at Astoria Current offers a seating capacity of 140, making it suitable for medium-sized companies. With a spacious area of 247 square meters, this room can be tailored to various event setups, receptions, and corporate gatherings. Additionally, the Sales Deck Function Room, spanning 223 square meters, provides a picturesque view of the vast Sulu Sea and can accommodate up to 100 guests.

Organizations seeking scenic views of Baclayon’s natural beauty will find Astoria Bohol’s Lantawan Events Hall to be a delightful option. This hall offers 184 square meters of space, accommodating up to 60 guests and can be customized for both corporate conferences and social gatherings. For a taste of traditional Baclayon cuisine and a peaceful view of the Bohol Sea, look no further than Pamana. This restaurant can be arranged to host up to 30 individuals, ideal for intimate business meetings and small gatherings for key company stakeholders.

In anticipation of a larger gathering, Astoria Bohol offers the opportunity to host corporate events on its beachfront premises. With ample space capable of accommodating up to 300 guests, our venue can cater to a wide range of corporate functions and major events.

To know more about Astoria Bohol, you may visit www.astoriabohol.com. You may also follow them on Facebook, Instagram, TikTok, and YouTube.

You may also reach out to Astoria Bohol via: 

Email: rsvn@astoriabohol.com 

Landline: (+63 2) 5335-1111 local 8745/8746 

Mobile: (+63) 917-889-8275, (+63) 919-911-3961, (+63) 917-545-9683 

Astoria Hotels and Resorts are not just known for their luxurious accommodations and breathtaking locations, but also for their exceptional MICE offerings that cater to the diverse needs of business travelers. From state-of-the-art conference facilities to exquisite dining options and world-class amenities, Astoria Hotels and Resorts provide the perfect setting for successful meetings, conferences, and events.

With a strong commitment to excellence and customer satisfaction, Astoria Hotels and Resorts have established themselves as a premier choice for MICE travelers seeking both productivity and relaxation. Whether you are planning a corporate retreat, a team-building workshop, or a grand conference, Astoria Hotels and Resorts’ comprehensive MICE offerings ensure that every event is executed seamlessly, leaving an impression on attendees.

Experience the pinnacle of hospitality and innovation with Astoria Hotels and Resorts, where business meets leisure in the most spectacular way.

 

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

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MIRU’s track record: A concern for the US

By Rep. Rodante Marcoleta, SAGIP Party-List

An investigative piece by the US-based journal Politico has cast a spotlight on Miru Systems, questioning the deployment of their voting technology in Iraq and Congo — nations supported by US election funding but plagued by technical glitches. More than focusing on technological snafu, the article calls the attention of the US Agency for International Development (USAID) to reassess the wisdom of supporting countries using Miru technology.

Even more grimly, the Politico investigative report cited sanctions imposed by the US Treasury Department on the president of the Congo Election Commission for corruption — stating how he padded a contract for Miru’s machines by up to US $100 million which was then deposited into a company he controlled.

This scrutiny gains local significance as Miru bagged a sole-bidder contract with Comelec to supply voting equipment for the Philippines’ 2025 elections. Despite calls for vigilance from election watchdogs and lawmakers, Comelec’s lackluster response was: “The winners in Congo and Iraq are happy and satisfied with Miru’s performance.” Really?

Amplifying these concerns is the dubious connection between Miru and Russian elections. Miru is openly affiliated with Bauman Moscow State Technical University, a relationship instrumental in the development of election scanners used in Russia’s contentious 2018 presidential election and subsequently in Iraq, yet another authoritarian regime. Who knows—it might be the scanning technology we will use come 2025.

Miru’s involvement in Russia reportedly began around 2009 and extended to their recent 2024 presidential elections. It may be recalled that during the March 19 Senate hearing, the company representative boasted on the supply of technology in that Russian elections—which was marked by Putin’s sweeping victory for a fifth term. Such ties, ignored by Comelec amid the global pushback against Russian electoral practices, could cast a cloud of doubt over the transparency of the Philippines’ electoral venture.

Filipinos’ trust in Western-led democratic principles versus their skepticism of Russian and Chinese aggression, as revealed by Pulse Asia surveys, underscores the potential geopolitical conflict in Comelec’s choice. A recent survey by Pulse Asia confirmed this, with 80% of Filipinos expressing a desire for the Philippines to work with the United States to counter China’s increasing belligerence in the West Philippine Sea. Another survey revealed that 61% of Filipinos distrust China, while 58% distrust Russia. Comelec should seriously weigh the wisdom of being associated with a company doing business in Russia even as the administration labors to bolster our ties with the US and western democracies.

These unsettling revelations beg one question: Did Comelec even realize that the optical scanners it purchased might have originated from Russia, where elections are reportedly a farce? Proper due diligence should have alerted Comelec to these shady connections that could result to shady elections. The outcome of such due diligence, or lack of it, might not just impact on the credibility of our own elections, but also the nation’s international repute as a regional beacon of democracy caught in a tense geopolitical landscape.

That said, something smells fishy with Comelec’s choice. And the smell reportedly reeks from the Philippines all the way to the Cayman Islands in the Caribbean, North America, China, and Singapore.

This is a paid advertisement.

 

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CEOs worry over business viability

More than half of Philippines-based chief executive officers are worried over the viability of their businesses in the next decade, a survey showed. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Justine Irish D. Tabile, Reporter

OVER HALF of Philippine-based chief executive officers (CEOs) are concerned over the viability of their businesses in the next 10 years without reinvention, according to a report by PwC Philippines. 

The Philippine report of PwC’s 27th Global CEO Survey showed that 54% of CEOs believe that their companies “will not be economically viable in the next decade if they continue on their current path.” This is lower than the Asia-Pacific average of 63%.

Asked about the long-term viability of their businesses, 46% of Philippine-based CEOs expressed concern, much higher than the 34% average in the Asia-Pacific region.

Conducted from October to November 2023, the survey covered 1,774 CEOs in the Asia-Pacific region, including 35 CEOs in the Philippines.

More than half or 57% of Philippine-based CEOs are optimistic that the global economy will improve over the next 12 months, higher than the Asia-Pacific average of 40%.

Around 77% of Philippine-based CEOs said the United States is the most important for their growth prospects, while 40% cited China.

“The Philippines has undertaken efforts to improve its investment climate and attract foreign direct investment. This sustained growth and the positive investment climate could have promoted optimism among CEOs regarding both local and global economies,” PwC Philippines Deals and Corporate Finance Managing Partner Mary Jade Roxas-Divinagracia said in a statement.

For the next 12 months, 40% of Philippine-based CEOs identified geopolitical conflict as a key threat, while 37% cited inflation. At least 29% of the CEOs said macroeconomic volatility and cyber risks are also main threats.

PwC Philippines Chairman and Senior Partner Roderick M. Danao said that there is growing impetus to reinvent among Philippine business leaders.

“Many of our country’s business leaders are now working on accelerating the transformation of their business models, investing in technology and their workforce, and managing the risks and opportunities related to climate change,” Mr. Danao said in a statement.

“In this era of continuous reinvention, CEOs have vast opportunities to reshape their organizations and themselves, to thrive on disruption, and to transform aspirations into realities,” he added.

According to the report, 97% of the Philippine respondents said that they have already taken steps to change “how they create, deliver, and capture value over the past five years.”

Meanwhile, 86% said that they at least took one action that largely impacted their company’s business models.

However, 71% of the Philippine CEOs cite the lack of workforce skills as a barrier to reinventing the business models of their companies.

The other top challenges cited by business leaders are the lack of technological capabilities (69%) and competing operational priorities (65%).

Michael L. Ricafort, chief economist of the Rizal Commercial Banking Corp., said that businesses will need to digitize and adopt the best technologies globally to drive growth.

“These will help grow their business by leaps and bounds, further boost productivity and output, and reduce costs,” Mr. Ricafort said in a Viber message.

Aside from making their businesses viable, he said digitization and the adoption of the latest technologies will also help improve businesses’ competitiveness.

Sought for comment, Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said organizations that want to remain viable need to reinvent themselves by improving and adjusting to the current environment.

“Being relevant can ensure its existence and hopefully profitability and resilience,” he added.

AI IMPACT
According to PwC, CEOs are seeing generative artificial intelligence (GenAI) as a catalyst for reinvention “that will power efficiency, innovation, and transformational change.”

At least 60% of the CEOs in the Philippines are expecting GenAI to impact the workforce in the next three years, while 57% believe GenAI will positively impact revenue and profitability.

Mr. Danao said that they have been seeing “heightened interest” from business leaders in GenAI.

“Their enthusiasm over the opportunities for growth and innovation that GenAI brings demonstrates their understanding of the need for fundamental reinvention of their businesses,” he added.

However, 80% of the CEOs said that to be able to reap the “transformative benefits” of GenAI, there is a need to upskill the workforce.

Meanwhile, 69% of them are concerned about cybersecurity risks, while 57% are concerned about misinformation.

NCR wage increase likely in July, says Labor chief

Laborers are seen working on a construction site in Navotas City, June 22, 2024. — PHILIPPINE STAR/RYAN BALDEMOR

By Chloe Mari A. Hufana

A WAGE INCREASE in the Philippine capital and nearby cities is likely in July, based on past decisions by the regional wage board, according to the country’s Labor chief.

“There is always an adjustment based on historical data,” Labor Secretary Bienvenido E. Laguesma told reporters on the sidelines of an event on Wednesday. “The challenge is how much.”

He declined to give an estimate.

The wage board in the National Capital Region (NCR) is expected to release its decision on the petitions to raise the daily minimum wage on or before July 16, the anniversary of the previous wage order.

To recall, the NCR wage board last July approved a P40 increase, which brought the daily minimum wage to P610 for nonagriculture sector workers and P573 for agricultural workers.

The Employers Confederation of the Philippines (ECoP) on Wednesday sought minimum wage-setting mechanisms that consider productivity, the market value of jobs, and the financial capacity of businesses, especially micro, small, and medium enterprises.

This would “ensure sustainable job creation and business growth,” the group said in a resolution signed at the National Employment Summit.

Wage hike decisions should also consider the impact on the majority of the population that will not benefit from such adjustments, ECoP said.

ECoP Governor and Philippine Chamber of Commerce and Industry Director Arturo “Butch” C. Guerrero III said the wage-setting mechanism they are pushing for is through a tripartite system, not a legislated one.

The Senate last February approved on third and final reading a bill increasing the daily minimum wage in the private sector by P100.

At the House of Representatives, separate bills that seek to increase wages of private sector workers by P150 to P750 have been filed.

“A wage increase of P150 across the board nationwide will lift many workers out of poverty wages. This moderate increase represents about 24% of the NCR minimum wage of P610 per day,” Federation of Free Workers President Jose Sonny G. Matula said.

Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said a wage hike will “maintain the level of real wages.”

“[The] recent quarter showed a slowdown in consumption, which could suggest that people’s reluctance to spend because of higher prices,” he told BusinessWorld in a Viber message.

“So, an increase in minimum wage will not necessarily translate into a wage-price spiral so long as the minimum wage is tempered and is intended to adjust for inflation,” he added. “The wage hike intends to recover [the] previous level of disposable income, which, however, was eroded by high inflation.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld in a Viber message that a wage hike is needed, especially by the poorest of the poor, to cope with rising prices.

“Inevitably, [wage hike will contribute to inflation], through second-round inflation effects as seen in 2022 and 2023,” he added.

However, ECoP said a P15 increase in minimum wages for NCR workers is at par with the consumer price index’s rise.

“[Wage increase is] a delicate balancing act and I would like to look at the situation where the members of the board will be able to consider and look at the arguments, positions, and the stand offered during the public hearing,” Mr. Laguesma told reporters on Wednesday.

Meanwhile, ECoP urged the Marcos administration to develop national resilience programs, social protection mechanisms, and transition strategies to support both workers and employers as artificial intelligence (AI), machine learning, and other disruptive technologies reshape the workplace.

ECoP said schools should prioritize developing “life skills, technological skills and soft skills” in students to prepare them for employment.

“These technological disruptions together with issues on climate change, demographic shifts, and geopolitics will create both opportunities and challenges that will impact social dialogue and collaboration among bipartite and tripartite partners in addressing issues in a technology-driven environment,” according to the resolution signed by ECoP Chairman Edgardo G. Lacson and President Sergio R. Ortiz-Luis, Jr.

ECoP’s Mr. Guerrero told reporters that national resilience programs are needed to address the impact of the pandemic on businesses.

“Many people are taking jobs just to have a job. But their skills are not adept for the job they’re doing. They’re overqualified. So, it’s a matter of matching the jobs. That’s why we have a jobs program to make it appropriate,” he said.

The Technical Education and Skills Development Authority (TESDA) offers upskilling programs, he added, but they are outdated. Instead, an industry-led upskilling program should be undertaken.

“The government manual is not updated. It no longer fits. So, it should be industry-led. It should come from the employers. The TESDA manuals should be in collaboration with their old manuals and that’s what we will roll out,” he said. “Because if you roll out an outdated manual, you just wasted your time trying to upskill these people.”

Philippines’ current account deficit seen to further narrow this year

ICTSI

THE PHILIPPINES’ current account deficit is seen narrowing further this year amid a more positive global outlook, Fitch Solutions’ unit BMI said.

In a report dated June 25, BMI lowered its current account deficit forecast to 2.3% of gross domestic product (GDP) from 2.8% previously.

This is narrower than last year’s current account deficit which stood at 2.6% of GDP, but wider than the average of -0.4% from 2015-2019.

The BSP projects a $4.7-billion current account deficit for 2024, equivalent to 1% of GDP.

“A more optimistic global outlook was the main reason behind this revision. We initially anticipated a more significant downturn in worldwide demand,” BMI said.

“However, the global economy has proven to be much more resilient, prompting us to pencil in a stronger (global) expansion of 2.4% in 2024 after initially projecting global GDP growth of 2.1% at the start of the year,” it added.

The latest data from the BSP showed that the current account deficit stood at $1.7 billion in the first quarter, equivalent to -1.6% of GDP. This was lower than the $4.4-billion gap or -4.3% of GDP seen in the same period a year ago.

“Risks to our current account outlook lean towards a larger shortfall. Much hinges on trends in the global economy,” it said.

BMI said that it sees external demand weakening in the second half of the year, due to an expected economic slowdown in China, the United States, Japan, Hong Kong and Singapore.

“While external demand has held up relatively well in the first half of the year, we think that it will slow in earnest in the latter half as major trading partners face domestic economic headwinds of their own,” it said.

BMI said the tourism sector’s recovery may “not be as strong as the numbers suggest” and may be the “result of an anomaly.”

“International visitors are still 40% lower than prior to the pandemic even though revenues have already exceeded pre-pandemic levels. We have determined that this increase is due to a temporary change in spending patterns, driven by a backlog of travel demand after the pandemic,” it said.

The uptick in tourism revenues is expected to taper off soon, with some signs of a slowdown already emerging.

“Average expenditure to date this year is roughly 5% less than in 2023, once inflation adjustments are made,” BMI said.

Foreign investments are also seen to remain muted this year, a trend seen in other countries in the region.

“While we are of the belief that extensive reforms implemented in recent years will indeed pay dividends, the prevailing environment of high interest rates will keep a lid on investment activity for now,” BMI said.

BMI data showed FDI as a share of GDP averaged 1.9% in the last four quarters, lower than the previous decade’s average of 2.2%.

The Bangko Sentral ng Pilipinas (BSP) has kept the key rate at a 17-year high of 6.5% since October 2023.

In a separate report, BMI said that it expects the central bank to keep rates steady at its meeting on Thursday.

This is in line with a BusinessWorld poll conducted last week where all 15 analysts surveyed expect the Monetary Board to stand pat for a sixth straight meeting.

“Given that the economy has remained fairly resilient thus far, the Bank will be in no hurry to cut rates until price pressures have eased more convincingly,” BMI said.

BMI said it is keeping its positive outlook for consumer spending in the Philippines despite elevated interest rates.

“Easing inflation and a tight labor market will support spending, as real wage growth returns to positive territory, which will support purchasing power over the year,” it added.

The BSP expects inflation to temporarily accelerate to above the 2-4% target until July but settle within target after. — Luisa Maria Jacinta C. Jocson

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