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Philippine c.bank sees narrower 2024, 2025 current account deficit – Reuters News

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

MANILA – The Philippines’ current account deficit is seen narrowing to $5.8 billion in 2025, or 1.1% of gross domestic product (GDP), from a projected deficit for this year of $6.1 billion, or -1.3% of GDP, the central bank said on Friday.

The Bangko Sentral ng Pilipinas’ (BSP) previous forecast of current account deficit for 2024 was at $9.5 billion, or -2.0% of GDP, which was a narrower gap versus the $11.2 billion deficit of 2023.

The lower deficit reflects the downward revision in forecast for goods import and export, the BSP said in a statement.

The outlook for 2024 and 2025 “is largely underpinned on expectations of a slight improvement in both global and domestic economic conditions”, the BSP said, adding that risks to the growth outlook are broadly balanced.

It expects a balance of payments (BOP) deficit of $0.5 billion, or 0.1% of GDP, for next year, reversing a $0.7 billion surplus, 0.1% of GDP, forecast for 2024.

Cash remittances from the millions of Filipinos living and working abroad will grow by 3% this year and the next, the BSP said.

It will help the Southeast Asian nation record end-2024 gross international reserves of $103 billion in 2024 and $102 billion in 2025. — Reuters

Volatile bitcoin falls from record high as crypto frenzy hits pause

KANCHANARA-UNSPLASH

SINGAPORE – Bitcoin eased to a one-week low in volatile trade on Friday, as investors took profit from its run to a record high and as another upside surprise on US inflation dimmed prospects of early rate cuts there and dented demand for riskier assets.

Bitcoin BTC= fell more than 5% in the Asian session to bottom at $66,629.96, before paring some of its losses to last trade 3.5% lower.

The choppy moves in the world’s largest cryptocurrency came a day after its charge to a high of $73,803.25, setting a new record for a fourth straight day.

“Bitcoin has an established history of getting volatile and ruthless after hitting (a) record high,” said Matt Simpson, senior market analyst at City Index.

“And not only did it recently hit a new high, but it looks like the (Federal Reserve) won’t be as dovish as traders had hoped.”

A slew of data out on Thursday showed that while US retail sales rebounded less than expected in February, producer prices increased more than expected.

The releases came on the heels of U.S. consumer price data out earlier in the week that pointed to still-sticky inflationary pressures.

Markets reacted by paring the chances of a Fed easing cycle beginning in June, with futures now pointing to a roughly 60% chance of a rate cut that month, down from roughly 74% a week ago, according to the CME FedWatch tool.

A higher-for-longer rates scenario, particularly in the United States, is typically bad for risk-sensitive assets such as crypto.

Still, bitcoin BTC= remains nearly 60% higher for the year to date, helped by a crypto frenzy driven by flows into U.S. spot exchange-traded crypto products and as traders remain broadly focused on the prospect of global interest rates being lower by the year-end.

In a show of optimism over bitcoin’s bull run, software firm MicroStrategy MSTR.O said it is planning to raise capital through a convertible bond offering to buy bitcoin for the second time in less than 10 days.

The company had on March 5 announced a $600 million private offering in convertible notes, as it looks to increase its exposure to the booming digital asset.

Some experts say the news also contributed to bitcoin’s volatile moves on Friday.

“Unlike traditional stock markets, the crypto market lacks regulations that limit the impact of influential individuals or entities with concentrated holdings,” said Joshua Chu, chief risk officer at Invess, an AI-enabled algo risk management financial engineering company.

“This absence allows whales to make substantial trades that can trigger cascading effects and rapid price fluctuations, leading to heightened volatility.”

Elsewhere, ether ETH=, the second-largest cryptocurrency, similarly touched a one-week low, and was last down more than 4% to $3,670. – Reuters

Japan unions will unveil results of wage talks, presaging shift at central bank

REUTERS

TOKYO – Japan’s largest trade union group is due to announce results of this week’s annual wage talks on Friday, with expectations for a rise of more than 4%, which would be the biggest boost since the early 1990s and strengthen the case for a central bank shift.

The Rengo union group will unveil the results on Friday at around 4:15 p.m. (0715 GMT), officials said, days after Toyota Motor 7203.T, the bellwether of annual talks, unveiled its biggest pay increase in 25 years, prompting analysts to raise pay hike projections to 4% or more.

Analysts had previously seen increases at around 3.9% this year, after last year’s 3.6%, itself a three-decade high.

Rengo represents about 7 million workers, many at large companies.

Japanese businesses are facing a chronic labor shortage due to an ageing and dwindling pool of workers. Prime Minister Fumio Kishida is pushing companies to raise wages to help Japan shake off years of deflation.

The higher wage hikes are likely to boost expectations the central bank will end negative interest rates as early as its next policy setting meeting on March 18-19.

“Taken together, we can expect hikes to top my forecasts to reach around 4.5% or closer to 5%,” said Yasunari Ueno, chief market economist at Mizuho Securities.

“That should give the Bank of Japan a strong tailwind as the central bank is expected to remove negative rates policy as early as in March.”

On Wednesday, Panasonic 6752.T, Nippon Steel 5401.T and Nissan 7201.T were among some of Japan Inc’s biggest names that agreed to fully meet union demands for pay hikes at the annual wage talks.

The annual pay negotiations – called “shunto” or “spring labour offensive” – are one of the defining features of Japanese business, where relations between labor and management tend to be more collaborative than in some other countries. – Reuters

US FDA expands use of Bristol Myers’ cancer therapy

Source: https://www.breyanzi.com/lbcl/about

The US Food and Drug Administration on Thursday expanded the use of Bristol Myers Squibb’s cell therapy, Breyanzi, for a type of slow-growing blood cancer, marking the second approval for the treatment.

Breyanzi was initially approved in the United States in June 2022 to treat a type of blood cancer known as large B-cell lymphoma in adult patients whose disease has returned or stopped responding to treatment.

With the FDA’s decision, the therapy is now approved to treat patients with chronic lymphocytic leukemia or small lymphocytic lymphoma.

The disease is characterized by increased production of abnormal white blood cells that have difficulty fighting infections. These faulty cells can be found in the bone marrow or lymph nodes.

The therapy brought in $364 million in revenue for Bristol in 2023.

Sales of Breyanzi are expected to reach $2 billion by 2030, according to LSEG estimates, helping it fill in some of the expected gap when top-sellers such as cancer drug Opdivo lose patent protection.

‍The wholesale list price of the therapy is $487,477, a company spokesperson said in an emailed statement.

Like other CAR-T therapies, Breyanzi comes with a serious warning about the risk of secondary malignancies, or cancers, in patients who use the drug.

The warning was added to the label information for similar therapies earlier this year after reports of T-cell cancers that occurred after treatment with CAR-T.

Breyanzi is also under review for use in patients with two other types of cancers that affect disease-fighting white blood cells, known as follicular lymphoma and mantle cell lymphoma.

A decision from the US FDA is expected by May.

The current approval was based on an early-to-mid stage study in which the therapy showed a complete disappearance of tumors in 18.4% of patients of either refractory chronic lymphocytic leukemia or small lymphocytic lymphoma.

The rate of new cases for both cancers is 4.4% per 100,000 men and women in the United States per year, according to government data. – Reuters

Can EU’s gig worker rules tame management by algorithm?

STOCK IMAGE | Image by Mohamed Hassan from Pixabay

BRUSSELS – Low pay, few labor rights and dangerous working conditions – for millions of European gig workers, it can be a rough job. But a deal thrashed out by EU ministers this week addresses one of their biggest headaches – management by algorithm.

Drivers and delivery riders for online platforms such as Uber and Deliveroo say the opaque nature of algorithmic management tools can result in random job assignments and performance ratings, and even account deactivation – hitting their earnings and morale.

While Monday‘s watered-down deal to boost gig workers‘ employment rights fell short of unions’ demands, they hailed the Platform Work Directive‘s provisions for greater transparency over algorithmic management systems as a crucial step to protect European workers from machine-made decisions.

The draft rules should act as a “wake-up call” over the risks of artificial intelligence (AI) turning Europe into a “wild west” for workers’ rights, Jonathan L’Utile Chevallier, who coordinates a delivery riders’ cooperative in the French city of Bordeaux, told the Thomson Reuters Foundation.

Under the new rules, automated decisions affecting working conditions must have some human oversight, and workers would have access to the information driving AI-powered decisions. Such provisions complement parts of the landmark EU AI Act endorsed by European lawmakers on Wednesday.

By guaranteeing greater transparency over algorithmic decisions, workers’ and labor advocates will be able to establish whether structural injustices such as racial or gender bias are baked into the code used to allocate jobs or evaluate performance.

That information could be used in potential lawsuits challenging discrimination or other labor rights infringements, said Oguz Alyanak, a researcher at Fairwork, a gig research project at Britain’s Oxford Internet Institute.

“This is a big step,” Mr. Alyanak said.

 

AI’S WORKPLACE REVOLUTION

Algorithmic management is not limited to gig work, as artificial intelligence (AI) begins to revolutionize the workplace – increasingly used as a tool to monitor workers performance and taking over tasks previously carried out by humans.

The boom in the technology that started in 2022 could replace 300 million full-time jobs – approximately 18% of work globally, according to Goldman Sachs.

Some companies are also embracing automation in the hiring process, including resume screeners that scan applicants’ submissions, assessment tools that grade an online test, and facial or emotion recognition tools that can analyze a video interview.

The draft EU rules are the first attempt at regulating the impact of algorithmic management for Europe’s roughly 28 million gig workers, and set the standard for future legislation, union leaders said.

“This directive is the antidote to uberisation,” said Brahim Ben Ali, a former Uber driver and secretary-general of the INV union in France who has been pushing for the EU rules since 2019.

“It’s important to recognize the work of working-class communities in achieving something so monumental,” he added.

Move EU, a Europe-based group representing ride-hailing companies, declined to comment on the draft EU rules. Delivery Platforms Europe, which represent food delivery firms, did not immediately reply to requests for comment.

 

‘BITTERSWEET VICTORY‘

Still, Monday’s provisional deal on the directive – which focused primarily on recognizing gig workers as employees with rights including sick pay, pensions and unemployment benefits, was “a bittersweet victory”, said L’Utile Chevallier.

It fell short of unions’ hopes and scrapped a set of criteria proposed by the European Commission to determine if an online company is an employer.

Instead national law, collective agreements and case law will dictate whether a worker is an employee, in effect maintaining the status quo. The burden of proof will be on companies to show that their gig workers are not employees.

“It’s not the deal we wanted,” said Livia Spera, general secretary of the European Transport Workers Federation, adding that workers would have benefited more from EU-wide employment criteria.

By leaving the details up to each member state, the risk is that gig workers in one country may end up with tougher employment criteria than in another.

Once endorsed by a final vote in the European Parliament, the countries generally have up to two years to transpose the directive into national law, and unions vowed to maintain their pressure for greater social and labor rights.

“This is a long fight,” said Felipe Corredor Alvarez, a former Deliveroo rider in Barcelona and member of the RidersXDerechos (Riders for Rights), saying gig workers would now shift their attention to laws in individual countries.

“We have a long road ahead of us,” he said. – Reuters

China c.bank leaves key policy rate unchanged, as expected

FREEPIK

SHANGHAI/SINGAPORE – China’s central bank left a key policy rate unchanged while withdrawing cash from a medium-term policy loan operation on Friday, as authorities continued to prioritize currency stability amid uncertainty over the timing of expected Federal Reserve interest rate cuts.

The Fed’s historic monetary tightening has bolstered the dollar and pressured the yuan over the past few years. Cutting rates before a move by the Fed or other major central banks would widen yield differentials, potentially putting more pressure on the local currency.

The People’s Bank of China (PBOC) said it was keeping the rate on 387 billion yuan ($53.80 billion) worth of one-year medium-term lending facility (MLF) loans CNMLF1YRRP=PBOC to some financial institutions unchanged at 2.50% from the previous operation.

With 481 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 94 billion yuan fund withdrawal from the banking system. It marked the first cash withdrawal through the liquidity instrument since November 2022.

The central bank said the Friday’s loan operation has “fully met financial institutions’ demand” to maintain banking system liquidity reasonably ample, according to an online statement.

“Net cash withdrawal is an obvious signal, echoing the content of the government work report on preventing idling of funds,” said Xing Zhaopeng, senior China strategist at ANZ.

“Given major commercial banks have not yet lowered deposit rates again, chances of another policy rate cut are low.”

In a Reuters poll of 36 market watchers, 32, or 89%, of all respondents, expected the central bank to keep the borrowing cost of the one-year MLF loans unchanged.

China has set an ambitious 2024 economic growth target of around 5%, promising steps to transform the country’s development model and defuse risks fueled by bankrupt property developers and indebted cities.

PBOC Governor Pan Gongsheng said last week the bank would keep the yuan basically stable and sent a dovish message to the market by saying China had “rich monetary policy tools at its disposal.”

Investors have since ramped up their bets authorities will roll out more monetary easing measures, including a further reduction to bank reserves, to support the world’s second-largest economy.

The MLF operation “may suggest that a reserve requirement ratio (RRR) cut is forthcoming,” said Frances Cheung, rates strategist at OCBC Bank.

“There may be an intention to replace part of MLF with liquidity released from an RRR cut. After all, there have been strong hints from officials of an RRR cut.”

The central bank also injected 13 billion yuan through seven-day reverse repos while keeping the borrowing cost unchanged at 1.80%, it said in a statement. – Reuters

Singlife’s Cash for Funeral Costs provides financial relief in the most difficult time

Singlife recently launched Cash for Funeral Costs.

At the end of the day, being faced with a five to six-figure bill isn’t something everyone can afford to deal with. But, it is something you can be prepared for.

Facing the loss of a loved one is a deeply emotional experience, and the last thing families should worry about during this period are financial burdens. Singlife Philippines understands this, which is why their new Cash for Funeral Costs plan empowers Filipinos to plan for end-of-life expenses with peace of mind.

Protecting families from high funeral costs

Filipinos are family first. They will do everything in their capacity to help alleviate the emotional and financial strain brought on by loss. Likewise, bereaved families would want to give dignified farewells to honor their departed. But funeral expenses can easily hit six-digits, creating a significant financial strain on families who are already coping with the loss of their loved ones.

Singlife’s Cash for Funeral Costs alleviates this burden by providing up to P300,000 cash benefit paid to the insured’s beneficiaries with premiums starting at only P447 per month. This gives families the flexibility to use that money to fulfill their loved ones’ final wishes, or use it for any other unexpected end-of-life expenses so they can focus on grieving and remembrance.

The product was designed with customers in mind. Its key benefits aim to provide as much ease as possible when making funeral arrangements.

Benefits of Cash for Funeral Costs

  • Meaningful financial support: Receive up to P300,000 in cash to cover funeral expenses. Plans start at only P447/month.
  • Yearly coverage boost: Your funeral costs plan gets more valuable over time because your coverage increases every year at no additional cost*. This can help you cover possible price increases in funeral arrangements.
  • Flexible payment duration: You can choose to pay your monthly installments for five or 10 years, and you are covered until 120 years old.
  • Be covered in case of disability: In case you get permanently disabled, all your remaining unpaid premiums will be considered paid but you will still keep your coverage intact.
  • Family plan: No need to transfer or share plans. With one plan, your spouse or life partner is also covered. We’ll also cover your children for free starting in your second year.
  • Immediate financial assistance: Upon confirmation of death, we’ll give your beneficiaries immediate funeral cash assistance for urgent funeral expenses.
  • Memorial care support: When you pass away, Singlife’s dedicated team will guide your family with arrangements.

A real-life story of financial protection

While adding an insurance plan to your budget is an extra expense, it will provide peace of mind and significant financial support in crucial moments. Take, for example, the story of John. He was the sole provider for his senior parents. Tragically, John suddenly passed away in his sleep at the young age of 28.

But, because of the insurance policy he got from Singlife, his parents received a benefit of almost P1.5 million from his Singlife policy, helping them financially bounce back from their son’s death and grieve their loss without added financial strain.

John’s insurance plan prepared him and his family for that difficult time, thanks to Singlife.

Singlife Philippines and GCash innovate together to provide financial security to Filipinos

Singlife Philippines and GCash recognize the importance of financial security in every life stage for Filipinos. Even at the end, sending you off with dignity shouldn’t have to push your loved ones into a financial crisis.

Death may be unpredictable, but Cash for Funeral Costs puts financial control in your hands and helps you make a choice to financially prepare for this moment and focus on leaving a lasting legacy for your loved ones.

 

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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Tokyo’s controversial Yasukuni Shrine picks ex-admiral as chief priest

Source: https://en.wikipedia.org/wiki/Yasukuni_Shrine

TOKYO – Japan’s Yasukuni Shrine has picked a former military commander as its chief priest in a move that could stir controversy over a site that other Asian nations see as a symbol of Japan’s wartime aggression.

Umio Otsuka, 63, a former Maritime Self Defense Force (SDF) commander and a one-time ambassador to Djibouti, confirmed his appointment, which marks the first time since 1978 for an ex-military official to assume the post.

The last retired military officer appointed as chief priest, Nagayoshi Matsudaira, enshrined 14 prominent convicted war criminals alongside the 2.5 million war dead honored at the shrine, including World War Two-era prime minister Hideki Tojo.

“I feel very honored that the next stage of my life will be to serve this shrine for peace, where the spirits of those who gave their precious lives for the country are commemorated and honored,” Mr. Otsuka told Reuters.

A spokesperson for Yasukuni Shrine, whose name means “peaceful country” in Japanese, declined to confirm his appointment.

Visits to the shrine by senior Japanese political figures have drawn criticism from countries such as South Korea, which was under Tokyo’s colonial rule for 35 years, and China, which Japan invaded.

Conservatives assert that Yasukuni, which was established in 1869 as Japan emerged from more than 250 years of isolation, is meant to commemorate all the nation’s war dead and is not a shrine dedicated to those blamed for waging war on Japan’s neighbors.

Mr. Otsuka’s appointment comes as Tokyo and Seoul deepen security cooperation with each other and their shared ally, the United States, in response to escalating regional threats from China, Russia and North Korea.

No serving Japanese prime minister has visited the shrine since Shinzo Abe went in 2013, prompting an expression of disappointment by then-US President Barrack Obama. – Reuters

How DonBelle lives for real to live more

Phenomenal loveteam Donny Pangilinan and Belle Mariano or DonBelle

This generation’s phenomenal loveteam, Donny Pangilinan and Belle Mariano or DonBelle, disclosed that living for real is the secret to living more. In a recent interview for their latest Smart Prepaid campaign, the tandem shared that navigating fame in the digital age could be tricky, but grounding oneself in reality makes all the difference.

Below, DonBelle peels the layers of online fame by sharing tips on authenticity, finding balance and voice during social media-heavy times. As Gen Zs themselves, Donny and Belle recognize the need to keep things grounded and authentic despite fame, and this is something their followers would spot and relate to right away.

Don’t let social media dictate who you are

It’s easy to join the bandwagon and post what everybody else is posting but for DonBelle, authenticity is a priority and people should find beauty in imperfection.

“Don’t let the digital world dictate who you are. Being true to yourself and finding your voice is what makes you genuinely shine,” said Donny to start the conversation.

Belle agreed, “Totoo ‘yan. It’s our real stories, our truths, that connect us.”

Unfiltered bravery in social media realness

For DonBelle, being real means being brave. It takes courage to be real, they said as Donny elaborated on the courage it takes to showcase one’s true self.

“In an age where everyone is curating their online personas, being authentic is a brave act. It’s about peeling off the layers of expectation and daring to be seen for who you really are,” he added.

Belle added, “Mahirap sometimes, pero worth it. Real beats perfect any day. And you also become more relatable.”

Finding balance when it comes to sharing things online

The young actors find balance in knowing what to share and when to share things on social media.

“Every day is an opportunity to be a better version of ourselves. It’s not about the likes or the follows, but being real with yourself and with others,” Donny said.

Belle echoed, “Stay true, kahit online. Even though we may be in the public eye, we are still normal people who value family and friends the most.”

Donny intimated that achieving balance online “is about finding those moments of quiet in a day that’s constantly buzzing with notifications.”

On the other hand, Belle offered a glimpse into her strategy, “Simple joys lang, like reading or spending time with family, help me stay true to myself.”

Evolve to inspire

“The real challenge is to continuously evolve and share that journey with others. It’s about being genuine, which truly connects us,” said Donny, underscoring the impact of authenticity on forming meaningful connections.

Belle supported this sentiment with a simple yet powerful message, “Be real, inspire. If we can somehow encourage our community to be better versions of themselves, if we can bring joy to their lives, and if we can help them live for real to live more, happy na kami ni Donny.”

‘Live for Real’ with Smart Prepaid

Like DonBelle, Smart Prepaid encourages subscribers to “Live for Real” to live more in its latest campaign. This campaign highlights its commitment to enabling genuine and real connections through innovative offers, highlighting Smart’s latest prepaid offerings such as Power All, Magic Data, and Smart Prepaid eSIM.

PowerAll 99 offers 8 GB data for all sites and apps, Unlimited All-Net Texts, and Unlimited TikTok for 7 days, while Magic Data 99 comes with NO EXPIRY 2 GB for all sites and apps with no expiration, Magic Data starts at 99. Subscribers can conveniently register for these offers via the Smart App or through their trusted retailers.

On the other hand, the Smart Prepaid eSIM makes it so much easier for subscribers to enjoy greater flexibility with multiple SIMs in one device — without the need for a physical SIM card. Mobile users can now order the Smart Prepaid eSIM at the Smart Online Store and can be digitally delivered via email instantly. It is also available at accredited retailers at local and international airports, malls, and Smart flagship stores on e-commerce sites like Lazada and Shopee.

Smart Prepaid’s value-packed offers are powered by the Smart mobile network, recently recognized for delivering the Philippines’ Best 5G Coverage and 5G Availability in the latest report by independent analytics firm Opensignal.

To know more about Smart Prepaid offers, visit https://smart.com.ph/Prepaid/liveforreal or follow its official accounts on Facebook, Instagram, YouTube, and TikTok.

 

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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PHL to grow 6.4% this year — Fitch

REUTERS

THE PHILIPPINES is expected to be the fastest-growing economy in Southeast Asia this year, according to Fitch Ratings.

Data from Fitch Ratings’ Asia-Pacific Sovereigns Credit Outlook for February showed that the Philippines’ gross domestic product (GDP) is projected to expand by 6.4% this year.

This will be the fastest growth in Southeast Asia, ahead of Vietnam (6.3%), Indonesia (5%), Malaysia (4.2%), Thailand (3.8%) and Singapore (2.3%).

Krisjanis Krustins, Fitch Ratings’ primary sovereign analyst for the Philippines, said Philippine GDP growth would likely remain above 6% in the next few years.

“We forecast real GDP growth of above 6% over the medium term, considerably stronger than the ‘BBB’ median of 3%, supported by large investments in infrastructure and reforms to foster trade and investment, including through public-private partnerships (PPPs),” he said in an earlier commentary.

Fitch Ratings’ forecast is slightly below the government’s 6.5-7.5% target this year.

The Philippine economy grew by 5.6% in 2023, slower than 7.6% in 2022 and fell short of the government’s 6-7% full-year target.

Economic managers have said they might revise growth assumptions and targets to be more “realistic” and account for global economic conditions.

The Philippine Statistics Authority (PSA) is set to release first-quarter GDP data on May 9.

For 2025, Fitch expects Philippine economic output to expand by 6.5%. This also makes it the fastest-growing economy in the region next year, alongside Vietnam.

It will be ahead of Indonesia (5.2%), Malaysia (4.5%), Thailand (3.4%) and Singapore (3%).

In November, Fitch Ratings affirmed the Philippines’ “BBB” investment grade rating and kept its “stable” outlook.

A “BBB” rating indicates low default risk and reflects the economy’s adequate capacity to pay debt. A “stable” outlook on the rating also means it is likely to be maintained over the next 18-24 months.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said Philippine GDP growth could settle at 6% this year and potentially in the next 10 years.

“Before the pandemic, Philippine GDP consistently grew by at least 6% from 2012-2019 due to the demographic sweet spot and other important economic bright spots,” he said in a Viber message.

He cited strong remittances, low unemployment, improved government spending and the uptick in tourism as growth drivers.

Meanwhile, Fitch sees inflation averaging 4% this year, within the central bank’s 2-4% target. However, it is above the Bangko Sentral ng Pilipinas’ (BSP) average forecast of 3.6% for the full year.

It also expects inflation to ease further to 3.5% next year, above the BSP’s forecast of 3.2%.

The BSP earlier said it expects inflation to accelerate above the 2-4% target in the second quarter due to the El Niño weather event, as well as positive base effects.

Meanwhile, Fitch Ratings raised its global GDP growth projection by 0.3 percentage point to 2.4%, as it expects faster US growth.

In its latest Global Economic Outlook, the debt watcher said it also raised its US growth forecast to 2.1% from 1.2%.

It trimmed its China growth forecast to 4.5% for this year from 4.6%.

“An unprecedented pro-cyclical widening in the US fiscal deficit in 2023 boosted domestic demand and helped explain the surprising resilience of GDP growth,” Fitch said. “But we expect the fiscal impulse to fade this year and household income growth to slow.”

For 2025, Fitch expects global economy to grow by 2.5% as “the eurozone finally recovers on a pickup in real wages and consumption — but US growth slows.” — Luisa Maria Jacinta C. Jocson

Philippines slightly improves in Human Development Index

Students are seen walking to school in Manila, Feb. 24, 2024. — PHILIPPINE STAR/EDD GUMBAN

THE PHILIPPINES jumped five spots in the latest Human Development Index, but remained one of the laggards in Southeast Asia, the United Nations Development Program (UNDP) said.

The Philippines ranked 113th out of 193 countries in the UNDP’s index, which measures a country’s health, education and standard of living.

The Philippines’ score improved to 0.71 in 2022 from 0.692 in 2021. This also marked the country’s highest score since 0.714 in 2019.

Philippines moves up in Human Development IndexThe Philippines’ score was below East Asia and the Pacific’s average of 0.766 and the global average of 0.739.

In Southeast Asia, human development levels were “very high” in Hong Kong (fourth), Singapore (ninth), Brunei Darussalam (55th), Malaysia (63rd), and Thailand (66th).

The Philippines had a “high” human development level, along with Vietnam (107th) and Indonesia (112th).

On the other hand, human development was considered “medium” in Laos (139th), Myanmar (144th), Cambodia (148th) and Timor-Leste (155th).

“The world has achieved a new record in human development. After steep losses in 2020 and 2021, the Human Development Index… has climbed to its highest level ever recorded at the global level,” the UNDP said in a report.

While the index value is greater than in 2019, the UNDP said it does not mean the world has fully recovered from the impact of the coronavirus pandemic and other crises.

“Essentially, we have not reached the level of human development that could have been expected had the pandemic not happened,” it said.

Life expectancy at birth is at 72.2 years in the Philippines,” according to the Human Development Index. The expected years of schooling for Filipinos is 12.8, while the mean years of school is nine.

Life expectancy in Singapore is 84.1, with 16.9 expected years of schooling and 11.9 mean years of school.

The Philippines’ gross national income per capita is about $9,059, a far cry from Singapore’s $88,761.

The Philippines also ranked 92nd in the gender inequality index with a score of 0.388, while its gender development score stood at 0.966.

Jose Enrique A. Africa, executive director of think tank IBON Foundation, said the Philippines’ human development ranking does not reflect an improvement in the poverty situation.

“The appearance of improvement is unwarranted though, because the country’s economic growth has long been grossly inequitable and manifests disproportionately as income, profit and wealth gains for the richest rather than a generalized improvement in the conditions of the majority,” he said in a Viber message.

Almost half of Filipino families, equivalent to 13 million households, consider themselves poor, according to a survey by the Social Weather Stations in late 2023.

Mr. Africa said the index’s measure of education does not even capture the poor quality of education in the country.

“Amid low family incomes, the government has so much more to do to improve the reach and quality of the public school system,” he said.

The Philippines had one of the longest and strictest lockdowns in the world, with schools closed between April 2020 and March 2022. — B.M.D.Cruz

FSCC keeps eye on potential spillovers from global uncertainties

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

THE FINANCIAL STABILITY Coordination Council (FSCC) is keeping a close eye on the possible spillover effects from global developments, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said.

In a statement, Mr. Remolona, who is also FSCC chairman, said uncertainties in advanced economies were “likely to affect the Philippines in different ways.”

“While global markets have been very fluid, the Philippines has shown its resilience by expanding at a pace that exceeds that of most other economies in the world,” he said. “The FSCC recognizes that expectations at the end of 2023 of early rate cuts by the US Federal Reserve have been tempered by recent US data.”

“That said, the council weighs the potential spillovers coming from abroad versus the resilience that the local market continues to exhibit,” he added.

In February, the US Federal Open Market Committee kept interest rates steady for the fourth straight meeting. From March 2022 to July 2023, the Fed raised borrowing costs by 525 basis points (bps) to bring the target Fed fund rate to 5.25-5.5%.

In its Financial Stability Report released last month, the FSCC said the US central bank was unlikely to cut key rates soon and would likely keep policy rates elevated for longer than expected.

Markets widely expect the BSP to only begin policy easing after the Fed starts to cut rates.

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 raised rates by 450 bps. The Monetary Board is set to hold its next policy meeting on April 4.

Meanwhile, the FSCC said estimates show that a “sizable” portion of corporate bonds and loans would mature this year.

“Given the nature of these debts, the FSCC expects a significant amount to be refinanced,” it said.

“The council recognizes that the banking sector has been able to provide much of the corporate funding through the years. However, the FSCC also looks to a stronger capital market to complement the banking sector and to better manage various risks,” it added.

The report showed that while outstanding corporate bonds have grown “significantly” over the past 15 years. They have remained flat over the past five years.

At end-2023, outstanding corporate bonds stood at P1.55 trillion, lower than P1.6 trillion at end-2022. This was also reflective of the P259.3 billion in maturing bonds.

The FSCC is also seeking to expand the access of Philippine corporations to the bond market.

“Enhancing the capital market is an issue that is shared by all members of the FSCC. We recognize that regulators must take a more proactive role in market development and encourage deliberate collaboration among stakeholders,” Mr. Remolona said.

The FSCC is an interagency council composed of officials of the BSP, Department of Finance, Securities and Exchange Commission, Insurance Commission and Philippine Deposit Insurance Corp. — Luisa Maria Jacinta C. Jocson

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