THE COUNTRY’s jobless rate and job quality worsened to six-month high in January due to the loss of seasonal jobs during the holidays, the Philippine Statistics Authority (PSA) reported on Friday. Read the full story.
Here’s a quick glance at how PSEi stocks fared on Friday, March 8, 2024.
PHILIPPINE STOCKS are expected to move sideways this week as investors book profits after the market’s seven-week rally.
“The bellwether index dropped by as low as 113 points after Philippine inflation heated anew in February, but fresh buying resumed near the weekend,” online brokerage 2TradeAsia.com said in a market note.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) rose by 1.53% or 104.87 points to close at 6,942.21. The broader all-share index gained 0.97% or 34.92 points to 3,602.81. Week on week, the PSEi added 0.33% or 22.62 points.
Philippine inflation quickened to 3.4% in February from 2.8% a month earlier due to higher food prices.
The local bourse could move sideways this week due to profit-taking, Japhet Louis O. Tantiangco, a senior research analyst at Philstocks Financial, Inc. said in a Viber message. “With the seven-week rally, we expect profit-taking pressures to be present. Still, we expect positive sentiment toward 2023 corporate results to continue providing support to the bourse.”
Wall Street’s record performance, if it continues, is also expected to spur the local market, he added.
The local market’s movement would depend on the latest inflation figures from the United States, due on March 12, Juan Paolo E. Colet, managing director at China Bank Capital Corp., said in a Viber message.
“Our market is poised for another attempt to close above 7,000, but whether it finally succeeds in overcoming the strong resistance at that level will depend largely on the US February consumer price index,” he added.
“How US equity markets react to the inflation report will influence the direction of the local stock index,” Mr. Colet said. “If we see data that bolster bullish bets of a Federal Reserve policy rate cut in June, then our market will likely benefit from risk-on sentiment and move higher this week.”
US inflation slowed to 3.1% in January from 3.4% in December.
Meanwhile, 2TradeAsia put the market’s support this week at 6,800 and resistance at 7,000.
“The 7,000 zone has so far been elusive, with recent sessions characterized by long wicks signaling strong selling pressure up top, although Friday’s technical confirmation has brought near-term technical relief,” it said.
Mr. Tantiangco put the market’s support at 6,700 and resistance at 7,000 points. — Revin Mikhael D. Ochave
By Aaron Michael C. Sy, Reporter
THE PHILIPPINE peso could trade sideways against the dollar this week as the market awaits US labor data that could dictate the US Federal Reserve’s next policy move.
It closed at P55.57 a dollar on Friday, strengthening by 25 centavos from Thursday, according to Bankers Association of the Philippines data posted on its website.
This was the peso’s strongest finish in more than two months. Week on week, the currency gained 44.5 centavos.
The peso appreciated on Friday as comments from Fed Chairman Jerome H. Powell stoked expectations of a rate cut, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
Mr. Powell on Thursday said the US central bank was “not far” from gaining the confidence it needs in falling inflation to begin cutting interest rates, Reuters reported.
“I think we are in the right place,” he told a Senate banking committee hearing. “We are waiting to become more confident that inflation is moving sustainably down to 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession.”
The Fed raised borrowing costs by 525 basis points from March 2022 to July 2023 to 5.25-5.5%.
Mr. Powell’s comments had caused the dollar to weaken to one-month lows, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
On Friday, the dollar index shed 0.52% to 102.8.
Mr. Roces expects the peso to trade sideways this week after the release of US nonfarm payroll data for January. Mr. Ricafort said this could signal when the Fed might start its easing cycle.
US job growth quickened in February, but higher unemployment moderate wage gains kept on the table an anticipated interest rate cut in June by the Fed.
Mr. Roces expects the peso to range from P55.50 to P56 as dollar this week, while Mr. Ricafort sees it moving between P55.30 and P55.80.
By Kyle Aristophere T. Atienza, Reporter
THE PHILIPPINES should brace itself for an intensified presence of China in the South China Sea that is aimed at cementing its control of resources there, analysts said, as the Xi regime calls on the Chinese military to make its maritime strategy align with economic development.
Aside from building more military outposts in the waterway, China is also likely to put up maritime buffer zones seaward, Enrico Cau, an associate researcher at the Taiwan Center for International Strategic Studies, said in a Facebook Messenger chat.
Chinese President Xi Jinping last week called on his country’s armed forces to coordinate preparations for military conflicts at sea and help in the development of the maritime economy.
Mr. Cau said China could enforce a “threefold” strategy: resource control, geographic dominance, and denial of space from the other claimants.
“This means that China is not only trying to control the resources. It means that, likely, it is trying to use the resources while at the same time denying strategic access to both resources and strategic locations that could be exploited by others,” he said.
“The purpose of occupation would not be only resource exploitation. Rather a sustainable model that entails denial to others while developing resources in occupied areas,” he added.
Mr. Xi, speaking to a delegation of the People’s Liberation Army and police force at an annual parliament meeting last week, also underscored the need to build a defense system in cyberspace and boost his country’s national security network.
Chinese legislators, meanwhile, vowed to push for a set of new laws that would modernize China’s capacity for national security and safeguard its “sovereign interests.”
Following Mr. Xi’s remarks, the Philippines Department of National Defense (DND) said on Friday it had already launched the Comprehensive Archipelagic Defense Concept which, in plain language, means “we are developing our capability to protect and secure our entire territory and exclusive economic zone.”
Filipinos “shall freely reap and enjoy the bounties of the natural resources that are rightfully ours within our domain,” it said.
POLL: MOST FILIPINOS WILLING TO FIGHT A ‘FOREIGN ENEMY’
An OCTA Research poll conducted in December, which was commissioned by the Armed Forces of the Philippines, showed 77% of Filipinos were willing to fight for the country in case of a conflict with a “foreign enemy.”
“Across major areas, at least 60% of adult Filipinos are willing to fight for the country, with the highest percentage observed in Mindanao (84%) and the lowest percentage in Visayas (62%),” OCTA said in a statement on Sunday.
The highest percentage was recorded among those aged 45 to 54, at 87%. The lowest recorded percentage was among those aged 65 to 74 at 69%.
OCTA interviewed 1,200 adult Filipinos face-to-face nationwide from Dec. 10 to 14. The poll had a ±3% margin of error at a 95% confidence level.
CHINA HIKES MILITARY BUDGET, POSES ‘CIVIL-MILITARY FUSION’
Despite the bumpy road for its economy, which is threatened by a two-million drop in the Chinese population, soaring debt and declining foreign investments, China has increased its defense budget for 2024 year by 7.2%.
Its military is expecting a big boost this year as the Xi regime seeks to lower the costs for weapons acquisition.
“The comments relating to new quality fighting forces could be read, I believe, as a push to an overall improvement of the military,” Mr. Cau said. “The statements not only seem to signal a heightened attention towards military preparedness, but it also resonates with calls for the military to focus on real combat capabilities.”
Raymond M. Powell, a fellow at the US-based Gordian Knot Center for National Security Innovation, said Mr. Xi’s call for the military to be involved in economic matters is not really new since China does not draw a hard distinction between civilian and military matters.
“In fact, they engage in what is often referred to ‘civil-military fusion,’” he said in an X message.
“Xi has aggressively brought China’s civil and economic sectors under state control, and the state under Communist Party control,” he added. “What we’re watching is China embracing an authoritarianism bordering on Stalinism.”
China may have the industrial capacity to enforce Mr. Xi’s call for the Chinese military to dovetail its maritime presence with economic development, but “it will cost them over the long term,” Mr. Powell said.
The so-called civil-military fusion — an act liberal democracies avoid in favor of free markets — “provides authoritarian governments certain advantages at least in the short term,” he said. “However, it also has its downsides, to include a temptation for military officials toward graft.”
“Xi’s recent anti-corruption moves removing certain high-ranking military officers suggest that this likely remains a serious problem in China’s system,” Mr. Powell added.
Chester B. Cabalza, founder of Manila-based International Development and Security Cooperation, said China is expected to step up its expansionist agenda in the South China Sea to divert its citizens’ attention away from the country’s economic woes.
“This is Xi Jinping’s ‘wag the dog’ moment to make Xi Jinping immune from the weak economy today,” he said in a Facebook Messenger chat.
Forecasts from the International Monetary Fund show China’s growth will slow to 4.6% in 2024 from an estimated 5.4% last year.
China’s growth last year, which experienced ups and downs, was driven by the resilience of the high-tech and services sectors, “while challenges came from declining property investment, debt risk and weak consumption growth,” according to the East Asia Forum.
“I believe that the Chinese are aware that the costs of a war for China will be very high,” Mr. Cau said.
“Therefore, President Xi will try to avoid a war at any cost,” he noted, “However, should the necessity arise, China will not hesitate to fight.”
In the South China Sea, Beijing has been conducting aggressive moves that fall short of a shooting war, which maritime experts call gray zone operations.
The year 2023 saw increased tensions between the Philippines and China, whose coast guard and maritime militia forces have been conducting dangerous maneuvers and firing water cannons to block Philippine resupply missions within Manila’s 200-nautical mile exclusive economic zone.
In the face of an increasingly belligerent China, the Philippines under President Ferdinand R. Marcos, Jr. has pursued closer ties with the US and other Indo-Pacific powers such as Japan and Australia.
Just last month, the US and its treaty ally, the Philippines, conducted the air component of their Maritime Cooperative Activity’s third iteration, which began early in February. The two forces held their first and second joint patrols last year.
Japan and Australia last year expressed willingness to take part in the Philippines’ joint maritime patrols with the US.
The Philippines allocated P285.69 billion for defense sector in 2024 compared to the P203.4-billion allocation in 2023, but Mr. Cau said the country still “lacks the financial capabilities and the time to build sufficient deterrence to keep China at bay.”
“Recurrent flares of insurgency and other issues ashore are also bound to impact Philippines capability to entirely refocus on its maritime strategy,” he said.
“The sole solution for the Philippines remains the physical occupation of the areas, while wisely navigating cooperation and competition with China and its relations with the allies,” he added, noting that allies could provide a crucial role in preventing Chinese interference in Philippine reclamation and construction activities.
Mr. Cabalza said the Philippines should continue to “widen its diplomatic networks and allies,” in line with its efforts to help promote a rules-based order in the South China Sea.
Mr. Marcos, who has veered away from his predecessor’s pivot to China, will visit Germany and Czech Republic from March 11 to 15.
In Germany, the Philippine leader is expected to seal a cooperation agreement on maritime trade.
THE NATIONAL Food Authority’s (NFA) claim that no irregularities happened in its sale of rice buffer stocks should be scrutinized further by the House Agriculture Committee, Quezon Rep. Wilfrido Mark M. Enverga said over the weekend.
Mr. Enverga, the panel chairman, said NFA Administrator Roderico R. Bioco’s explanation that the agency’s disposition of rice stocks need not undergo regular bidding processes exposed gaps that should be investigated further.
“Upon questioning, NFA Administrator Bioco could not justify which mode allows him to sell to traders under Commission of Audit (CoA) memorandum circular 89-296,” the lawmaker told BusinessWorld in a Viber message. “Even the NFA council resolution on warehousing does not allow him to do the same.”
The NFA’s alleged improper sale of rice buffer stocks prompted the House panel to scrutinize the sale of some “75,000 bags” of “aging and deteriorating” rice to private rice traders as it did not seem to follow proper guidelines.
Mr. Bioco earlier said that NFA’s sale of rice stocks does not require bidding as it is exempted from procurement law “because this is a regular function of (aging rice) disposal.”
However, Mr. Enverga said the panel should scrutinize the alleged exemption of rice stock disposal from public auction in the interest of transparency and public fairness.
“Director Bioco’s statement on skipping public bidding for aging rice disposal needs scrutiny,” he said. “Transparency and fairness are vital, even for routine functions. Any deviations should be justified and closely monitored.”
Federation of Free Farmers National Manager Raul Q. Montemayor said they view NFA’s sale as anomalous because the rice buffer stocks sold to private traders were allegedly worth much more “than the negotiated P25 per kilo (of rice) selling point” in the public market.
“Instead of the government benefitting from the rice products, it was private rice traders who reaped and made profit from the selling of aging rice,” Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet, speaking in Filipino, told BusinessWorld in a phone call.
Mr. Cainglet observed that rice traders made significant profits from the lopsided rice deal as private retailers allegedly sold NFA-milled rice at P52 per kilo.
“Palay was bought at P25, but because you expended manpower to mill the rice, the total expenses by the government rose to P38 to P39 per kilo of rice,” he said. “It was sold at P25 to rice retailers, which they would then sell at P52 per kilo to the public.”
Mr. Montemayor said that Mr. Bioco’s statement that the NFA released “aging and deteriorating” rice buffer stocks must be “verified through laboratory analysis.”
“NFA was also supposed to release aging stocks on a ‘first-in-first-out’ basis so buyers would get the oldest stocks first,” he said. “There have been reports in the past of the sale of supposedly aging stocks which were actually just newly milled (rice stocks).”— Kenneth Christiane L. Basilio
THE UNITED STATES is not blocked from seeking the extradition of televangelist Apollo C. Quiboloy on the grounds that he has a pending case in the Philippines, a law expert said on Sunday.
University of the Philippines professor on Constitutional Law, Michael T. Tiu, Jr., told BusinessWorld via Viber message that the treaty between the two nations only prohibits extradition if the person accused is already convicted or acquitted of the same offense in the Philippines.
“Article 4 of the US-PH extradition treaty states that extradition is only prohibited if the person had either been convicted or acquitted for the same offense in the PH,” Mr. Tiu said, noting that the Philippines cannot just set aside a US request for extradition.
“They [Philippine government] cannot use a pending case as a legal block to justify denial [of a request for extradition by the US],” he added.
On Thursday, California Judge Terry J. Hatter, Jr. ordered the arrest warrant for Mr. Quiboloy to be unsealed. Mr. Tiu said “it will just mean cooperation can now be open about enforcing the warrants.”
However, National Union of Peoples Lawyers (NUPL) president Ephraim B. Cortez said the end decision on extraditing an individual will solely rely on the Philippine government.
“The Philippines has the option to allow or disallow the request for extradition due to the pendency of criminal action in the Philippines. There is a provision in the treaty that allows extradition if the requested party discontinues the prosecution,” said Mr. Cortez.
Mr. Tiu explained that there are three steps the Philippine government can take regarding the extradition request of the US.
“First, evaluate the request and if it finds that the preconditions are there. File the petition in court. Second, deny the request because it’s [a] political offense or it falls under par. 1 of Art 4 of the treaty. Third, take its time in evaluating the request if it wants to pursue prosecution but this will risk not complying with the treaty.”
Mr. Quiboloy is wanted by the Federal Bureau of Investigation (FBI) in the US for sex trafficking and cash smuggling, among others.
The Senate, led by Sen. Ana Theresia Hontiveros-Baraquel, is also calling for Mr. Quiboloy’s arrest as his side kept ignoring the calls for an investigation.
The Department of Justice (DoJ) overturned a decision of the Office of the City Prosecutor Davao City last March 4 regarding Mr. Quiboloy’s case on qualified human trafficking and other acts of child abuse. — Chloe Mari A. Hufana
By John Victor D. Ordoñez, Reporter
THE QUICK approval of economic Charter change (“Cha-cha”) for a plenary vote at the House of Representatives will not pressure the Senate to speed up its own deliberations on its version of the bill, the Senate minority leader said at the weekend.
“Nope. We are independent,” Senate Minority Leader Aquilino Martin “Koko” D. Pimentel III told BusinessWorld in a Viber message when asked if the House committee’s swift approval of Resolution of Both Houses No. 7 (RBH 7) would affect the Senate’s timeline in deciding on Resolution of Both Houses No. 6’ (RBH 6).
Last week, congressmen said that the pressure is on Senate President Juan Miguel F. Zubiri to pass RBH 6 as he would need 18 votes in favor of the measure seeking to ease constitutional provisions on foreign ownership in education, public utilities, and advertising.
The House Committee of the Whole on March 6 approved RBH 7 which seeks to liberalize foreign restrictions in the current Charter. The measure was filed on Feb. 19.
“Obviously, they (lawmakers) need to synchronize their efforts, meaning, both chambers should primarily agree on the amendment proposals to deliberate on. Meaning, both chambers should primarily agree on the amendment proposals to deliberate on.” Michael Henry L. Yusingco, a lawyer and constitutionalist said in a Facebook Messenger chat.
“But still, the Senate must not be pressured by the decision of the House of Representatives, and vice versa.”
The Senate plans on finishing the hearings and consultations on RBH 6 before President Ferdinand R. Marcos, Jr.’s address to Congress in July, Senator Juan Edgardo M. Angara told reporters after a hearing on the “Cha-cha” measure on March 5.
Commission on Higher Education (CHED) Chairman Prospero E. De Vera III earlier told congressmen and senators that opening up ownership in the sector would help colleges and universities become more globally competitive.
“The Constitution envisions both chambers to act on their own wisdom and discretion,” Mr. Yusingco said.
“For Congress to exercise its constituent power the right way, both chambers must vote on the same amendment proposals.”
A GLOBAL human rights watchdog has condemned recent Philippine military airstrikes as part of a counterinsurgency operation along the border of the provinces of Camarines Sur and Quezon in southern Luzon that have adversely affected the livelihood of residents.
In a statement over the weekend, the International Coalition for Human Rights in the Philippines (ICHRP) said the military action “caused widespread fear to the residents in the area, affecting the livelihood of farmers.”
The group said the airstrike was carried out by the 81st Infantry Brigade of the Philippine Army in the early morning of March 4. It called for an immediate investigation to ensure the safety of civilians.
“In these cases, the military conveniently hides under the banner of its US-backed counterinsurgency program against communist rebels, to justify its disproportionate use of force that impacts civilians in the countryside,” the watchdog said. — John Victor D. Ordoñez
COTABATO CITY — A unit of the Philippine Navy foiled last Saturday an attempt to deliver P64 million worth of cigarettes from Indonesia to Tawi-Tawi.
Local authorities reported that the watercraft carrying 2,000 cases of cigarettes with Indonesian brands, the M/L Yasmen, was intercepted a few miles off Manuk Mangkaw Island in Simunul, Tawi-Tawi by Navy personnel on a sea patrol.
The M/L Yasmen was impounded by the Navy unit in Tawi-Tawi, and the contraband was turned over to the office of the Bureau of Customs in Bongao, capital town of Tawi-Tawi.
Rear Admiral Donn Anthony L. Miraflor, Naval Forces Western Mindanao (NFWM) commander, said these operations are the result of multi-agency collaborations.
Brig. Allan C. Nobleza, director of the Police Regional Office-Bangsamoro Autonomous Region, said the Bangsamoro Autonomous Region in Muslim Mindanao’s (BARMM) Ministry of Transportation and Communications, Ports Management Authority are just two of the agencies who support efforts to address cigarette smuggling in the region. — John Felix M. Unson
A LAWMAKER is asking the House Committee on Labor and Employment to consider his idea of clustering the Regional Tripartite Wages and Productivity Boards (RTWPB) for a progressive scaling of wage rates.
“The clustering I suggest groups together regions that are economically interdependent because of the mobility of labor, goods, and capital among them,” Manila Rep. Joel R. Chua told BusinessWorld in a Viber message.
He said this would allow regions with low wage rates to catch up with the region with the highest pay rate in the cluster.
However, Foundation for Economic Freedom President Calixto V. Chikiamco said that “clustering negates the original intent of RTWPBs as each respective region have different cost and employment conditions” which should be considered in wage setting.
Similarly, Federation of Free Workers President Jose “Sonny” G. Matula buckled at the suggestion since their advocacy is focused on “a significant one-time wage hike to effectively stimulate the local economy.”
“We beg to disagree with clustering, and we go for P150 a day (minimum wage increase),” he said.
Mr. Chua recommended that RTWBs be clustered as the current regional wage systems are too complicated given the range of varying minimum wage rates in each region that businesses must adhere to.
“We have a complicated minimum wage system. Too many tiers — one for every region, and within some regions there are many tiers as well,” he said.
Earlier, members of the House introduced bills on increasing minimum wage rates due to inflation and the surge of prices on basic needs and commodities, which have decreased the real value of wages received by workers.
“Minimum wage increase at a national level is long overdue,” Party-list Rep. Raoul Danniel Manuel told BusinessWorld in a Viber message. “Prices have soared while the real value of wages has stagnated.”
Mr. Manuel, who is also a member of the House labor and employment committee, said that the across-the-board increase in the minimum wage would “enable the workers to purchase goods and services” which will help increase the circulation of money “in the economy and have a positive effect on small businesses.”
For Mr. Chikiamco, a legislated wage increases could induce “slower growth, higher unemployment, lower investment spending, and a wage-price spiral,” which would hurt the local economy.
He said the proposed minimum wage hike will only hurt workers in the informal sector from the effects of “spiraling inflation.”
“The legislated wage increase will only benefit only about 10% of our workforce. It won’t benefit informal workers like motorcycle-taxi drivers, market vendors, fishermen, ambulant cigarette vendors,” Mr. Chikiamo said. “On the contrary, these informal workers, which are 10 times more than the organized minimum wage earners, will suffer greatly from the spiraling inflation that a legislated wage increase will bring.”
For his part, Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon told BusinessWorld that business groups are not supporting the proposed legislated wage hikes as they are “concerned” that the “effects will be negative” as some “micro, small and medium enterprises may not be able to afford such an increase.”
In response to the concerns of business groups, IBON Foundation Executive Director Sonny Jose Enrique “Sonny” A. Africa said that the wage hikes will only be inflationary if employers increase prices for their sold products and services instead of “giving this to workers out of their profits.”
“A P100 across-the-board wage hike is equivalent to just a 7.1% cut in profits across all establishment sizes,” Mr. Africa told BusinessWorld in a Viber message. On the other hand, a P350 across-the-board minimum wage hike is set to cut 25% of establishment profits.
“Big businesses, which employed 37% of workers in the formal economy in 2022, can shoulder legislated wage hikes,” Mr. Manuel said. “Small businesses can be assisted by the government through wage subsidies which are part of the bills we filed for wage hikes.” — Kenneth Christiane L. Basilio
THE HOUSE of Representatives is looking to approve on second reading the Resolution of Both Houses (RBH) No. 7 by Wednesday, House Senior Deputy Speaker and Pampanga Rep. Aurelio D. Gonzales, Jr. said on Sunday.
Mr. Gonzales said the House plans to deliberate RBH No. 7 in three days, with its voting happening shortly after at Wednesday’s plenary session.
“In plenary, the proponents of the economic Charter changes will defend their proposals,” Mr. Gonzales said in a statement. “The plan is to have three days of debates, with the second-reading vote set shortly after the termination of discussions and the period for amendments on the third day.”
He said that the House is also intent on finishing RBH No. 7 on third and final reading before the Holy Week break.
The committee report of RBH No. 7 was approved “without amendment” last week amid extensive deliberation from lawmakers.
The proposed economic amendments included in RBH No. 7 would give Congress the flexibility needed to change foreign participation restrictions in the Constitution.
It specifically seeks to amend Articles 12, 14, and 16 of the Charter which stipulates foreign ownership restrictions to public utilities, educational institutions, and advertising.
“The ratification of the amendments will immediately send a powerful signal to investors that we want to attract more foreign investments in these sectors of the economy by changing those limitations down the road,” Mr. Gonzales said. — Kenneth Christiane L. Basilio
