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What does Biden’s new asylum ban at the US-Mexico border do?

U.S. President Joe Biden holds a campaign rally ahead of the state’s Democratic presidential primary, in Las Vegas, Nevada, U.S. Feb. 4, 2024. — REUTERS

WASHINGTON – US President Joe Biden’s administration will block migrants from claiming asylum at the US-Mexico border until attempted crossings fall under new actions rolled out on Tuesday.

The asylum ban went into effect at 12:01 a.m. ET (0401 GMT) on Wednesday.

 

WHAT DOES THE BIDEN ASYLUM BAN DO?

The new asylum ban allows authorities to quickly deport or send back to Mexico migrants who cross the US-Mexico border illegally without the chance to claim asylum. The ban takes effect when migrant arrests surpass 2,500 per day for a week.

Border arrests averaged 4,300 per day in April, the most recent statistics publicly available. US officials said on Tuesday that arrests remained high enough for restrictions to go into effect immediately.

The ban will stay in place until arrests drop below an average of 1,500 per day for one week. There would then be a two-week waiting period where the restrictions would remain if migrant arrests again rose to an average of 2,500 per day over a week.

The last month where migrant arrests fell below a daily average of 1,500 was in the early months of the COVID-19 pandemic in July 2020 when global travel was at historic lows.

 

WILL THESE MEASURES ‘CLOSE’ THE BORDER?

No. The restrictions apply to migrants crossing between ports of entry, but access will not be blocked for people who seek an appointment to approach a legal port of entry through a government-run cell phone app. Others who have applied from abroad to enter through various parole programs started by the Biden administration or temporary work visa holders will be allowed in.

The ban will also not apply to unaccompanied minors or people who face serious medical or safety threats and victims of trafficking, administration officials said.

Legal trade and travel across the US-Mexico border will not be affected.

 

HOW WILL THIS WORK IN PRACTICE?

Key operational questions about how the asylum ban will be implemented remained unclear, including how the administration would quickly deport migrants from far-away and uncooperative countries and how many non-Mexican migrants Mexico would accept under the new enforcement regime.

The minimum time asylum-seekers have to find a lawyer was reduced to four hours from 24 hours, a Biden administration official said on a call with reporters on Wednesday. The four-hour period must be between 7 a.m. and 7 p.m., the official said.

The aim is to screen almost all migrants faster – possibly in under a week, a US Department of Homeland Security (DHS) official told Reuters on condition of anonymity to discuss ongoing government operations. More migrant families could end up being held in tent facilities near the border while their deportation cases are being evaluated, the official said, calling the facilities “safe” but “extremely stressful” for families.

DHS did not immediately respond to a request for comment.

Local officials and shelter directors in Tijuana, Mexico – across from San Diego, California – said migrants could get stuck in Mexico where capacity to house them safely is limited.

 

WILL THE BAN BE CHALLENGED IN COURT?

Almost certainly. The American Civil Liberties Union said it intends to sue. The ACLU and other civil and immigrant rights groups challenged similar asylum bans during issued by former President Donald Trump.

 

WHY IS BIDEN DOING THIS NOW?

Mr. Biden has pushed unsuccessfully for months to pass a Senate bill that would toughen border security, including with a provision that resembles his latest moves by executive action. The bill was crafted by a bipartisan group of senators but Republicans rejected it after Trump came out in opposition.

Immigration is a key issue in the upcoming US presidential elections in November when Mr. Biden will be facing Mr. Trump again in a rematch of the 2020 race. When it comes to immigration policy, registered voters prefer Mr. Trump over Mr. Biden by a 17 percentage point margin, according to a Reuters/Ipsos poll conducted in mid-May.

Border crossings have dropped in recent months, which the Biden administration credits in part to increased enforcement by Mexico. Still, Mr. Biden in his asylum ban proclamation said factors driving record migration remain and elevated levels of migration “pose significant operational challenges.”

 

HOW ARE REPUBLICANS AND DEMOCRATS REACTING?

Republicans broadly oppose Mr. Biden’s immigration policies and many spoke out against the last asylum restrictions, saying they were politically motivated and insufficient.

In advance of the announcement, Mr. Trump’s campaign issued a statement criticizing Mr. Biden for high levels of illegal immigration and said the move to exempt unaccompanied minors would encourage child trafficking.

Mr. Trump posted on Truth Social that the move was “all for show” because the two candidates are scheduled to debate on June 27 and ripped Mr. Biden programs that allow migrants to enter legally and obtain work permits.

Democrats were split on the asylum ban with more liberal lawmakers criticizing Mr. Biden and moderates praising him.

Alex Padilla, a Democratic US Senator from California, said Mr. Biden “undermined American values” and that the order would lead to “people with legitimate asylum claims being prevented from seeking safety and returned to harm.”

On the flip side, US Representative Ruben Gallego, a Democrat running for a US Senate seat in Arizona, called the move “a step in the right direction.”

 

WHAT’S NEXT?

US officials have not provided details on how they would increase deportations or how they would deal with families, who are currently not detained after being arrested at the border.

US Customs and Border Protection on Wednesday had over 9,000 people in custody who entered before the new policy went into effect that need to be processed under the previous standards, a Biden administration official said on Wednesday’s call with reporters.

The US deported and returned some migrants under the new rules on Wednesday, the officials said, declining to give exact figures. – Reuters

ECB to begin cutting rates even as inflation fight continues

REUTERS

FRANKFURT – The European Central Bank was all but certain to cut interest rates from record highs on Thursday and was likely to acknowledge it had made progress in its battle against high inflation, while also stressing the fight was not yet over.

ECB policymakers have clearly telegraphed their intention to lower borrowing costs after seeing inflation in the 20 countries that share the euro fall from more than 10% in late 2022 to just above their 2% target in recent months.

The broad-based decline was seen as more than enough for the ECB to begin undoing the steepest streak of interest rate hikes in its history, which were a response to spiraling prices in the wake of Russia’s invasion of Ukraine.

Now, the ECB will join the central banks of Canada, Sweden and Switzerland in cutting rates and moving well ahead of the influential U.S. Federal Reserve.

But what had looked like the start of a major easing cycle only a few weeks ago now appeared more uncertain amid signs that inflation may prove stickier than expected in the euro area, as has been the case in the United States.

This meant that ECB President Christine Lagarde and her colleagues were unlikely to commit to a further rate reduction at their July meeting or beyond just yet.

Instead, they were expected to stress any further move would depend on incoming data and that borrowing costs needed to remain high enough to keep a lid on inflation.

“The cut will set the new direction for policy but with economic momentum outperforming expectations and domestic inflation proving sticky in 2024, the ECB can afford to take things slowly and let the data set the parameters of the easing cycle,” Deutsche Bank economists wrote in a note to clients.

All 82 economists polled by Reuters expected the ECB to trim its deposit rate to 3.75% on Thursday from a record 4.0%, in what would be its first cut since 2019.

But not all think it is a good idea.

Gabriele Foà, a portfolio manager at Algebris Investments, said the cut “may soon be viewed as a policy mistake” and JPMorgan economist Greg Fuzesi said it was “oddly rushed”.

“The cost of waiting until September appears low while the benefit of getting more clarity on the inflation outlook appears high,” Fuzesi added. “For some reason, the ECB Governing Council, however, seems already to have decided many weeks ago to deliver a June cut.”

 

NO DECLARATION OF VICTORY

ECB chief economist Philip Lane set the tone last week, saying that a rate cut would be no “declaration of victory” and the pace of further reductions would depend on progress on domestic inflation and demand.

Most economists still expected two further rate cuts by the end of the year and money markets priced in between one and two more moves, possibly in September and December.

But some stronger-than-expected data over the last few weeks fueled fears of a more difficult “last mile” on the way to 2% inflation than the ECB has been predicting — a concern often expressed by influential board member Isabel Schnabel.

Euro zone inflation rose more than predicted in May, with price growth in the services sector, which some policymakers singled out as especially relevant because they reflect domestic demand, rebounding to 4.1% from 3.7%, according to preliminary estimates.

This was likely to mirror larger-than-expected increases in wages in the first quarter of the year, which boosted consumers’ battered disposable income after years of below-inflation pay hikes.

“We’re still confident about services inflation coming down but there’s definitely a last-mile dynamic at play here,” Paul Hollingsworth, an economist at BNP-Paribas, said.

Economic activity surveys have also pointed to a stronger-than-expected rebound by the economy after more than a year of stagnation, which is likely to force the ECB to increase its GDP forecast for this year when it publishes its new projections on Thursday.

These were still expected to point to inflation returning to the ECB’s 2% goal next year, keeping the central bank on course for more easing barring new inflation surprises.

“If anything, the five quarters of stagnation in the euro zone economy from autumn 2022 to the end of 2023 suggest that the ECB may have overreacted with its rate hikes,” Holger Schmieding, an economist at Berenberg, said. “Seen from this angle, somewhat lower rates make sense.” – Reuters

Nvidia overtakes Apple as No. 2 most valuable company

FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith/File Photo

Nvidia’s rallied to record highs on Wednesday, with the artificial intelligence chipmaker’s valuation breaching the $3 trillion mark and overtaking Apple to become the world’s second most valuable company.

Nvidia is preparing to split its stock ten-for-one, effective on June 7, a move that could increase its appeal to individual investors.

The surge in Nvidia’s market value above Apple’s marks a shift in Silicon Valley, which the company co-founded by Steve Jobs has dominated since it launched the iPhone in 2007.

Nvidia’s stock rose 5.2% to end the day at $1,224.40, valuing the company at $3.012 trillion. Apple’s market capitalization was last at $3.003 trillion after its stock climbed 0.8%.

Microsoft, based in Redmond, Washington, remained the world’s most valuable company at $3.15 trillion after its shares climbed 1.9%.

“Nvidia is making money on AI right now, and companies like Apple and Meta are spending on AI,” said Jake Dollarhide, chief executive officer at Longbow Asset Management.

“It may be a foregone conclusion that Nvidia will overtake Microsoft as well. There’s a lot of retail money that’s piling in on what they see as a straight shot up.”

Nvidia’s stock has surged 147% so far in 2024, with demand for its top-of-the-line processors far outstripping supply as Microsoft, Meta Platforms and Google-owner Alphabet race to build out their AI computing capabilities and dominate the emerging technology.

It has rallied nearly 30% just since May 22, when Nvidia issued its latest stellar revenue forecast.

Nvidia added nearly $150 million in market capitalization on Wednesday, more than the entire value of AT&T.

Optimism about AI lifted chip stocks broadly on Wednesday, with the PHLX chip index .SOX surging 4.5%. Super Micro Computer SMCI.O, which sells AI optimized servers built with Nvidia chips, climbed 4%.

Nvidia CEO Jensen Huang this week was the subject of wall-to-wall coverage on Taiwanese television and was mobbed by attendees when he visited the Computex tech trade fair in Taipei, where he was born before moving to the United States.

While Nvidia rides a wave of AI enthusiasm on Wall Street, Apple is struggling with weak demand for iPhones and tough competition in China, the world’s biggest smartphone market.

Some investors also view Apple as lagging other technology heavyweights as they rush to build AI features into their products and services.

Analysts’ projections for Nvidia’s future earnings have outpaced its stellar stock gains. Nvidia is trading at 39 times expected earnings, making it less expensive on that basis than a year ago, when it traded at over 70 times expected earnings, LSEG data showed. – Reuters

Road-worthy vehicles can save lives – VICOAP

STOCK PHOTO | Image by Arek Socha from Pixabay

Maintaining a road-worthy vehicle helps provide safety for the driver and passengers, Board Secretary of Vehicle Inspection Center Operators Association of the Philippines (VICOAP) John Alison “Tonton” Uy said in an interview last Tuesday. 

“Road accidents and road fatalities is actually what I like to call a silent killer. Statistically, it’s about 12,000 deaths every year in our country alone, and that doesn’t even include injuries or…damage to property”, Mr. Uy elaborated. 

Road crashes ranked as the leading cause of death among Filipinos 15-29 years old, with 38 daily casualties, according to the United Nations Children’s Fund (UNICEF), citing studies from the University of the Philippines – National Center for Transportation Studies (NCTS).  

Although there was a decrease in 2020 due to reduced mobility during the COVID-19 pandemic, the casualty count of 7,938 in 2011 rose to 11,096 in 2021, a 39% increase, the Department of Transportation explained while referencing the Philippine Statistics Authority (PSA). 

DOTr Secretary Jaime Bautista campaigned at the Land Transportation Office (LTO) Regional Directors’ Conference last Thursday for the implementation of road safety measures and regulations to lessen road accidents.   

“Kailangan mabawasan ‘yung road crashes [We need to lessen road crashes],” he said.  

At the launch of the Philippine Road Safety Action Plan 2023-2028 last May 31, 2023, the World Health Organization (WHO) Representative to the Philippines Rui Paulo de Jesus, shared that if everyone participated in road safety measures, injuries and deaths could be avoided.  

“Road traffic injuries are a major yet often neglected public health issue. Deaths and injuries from road crashes are preventable, and all sectors have a role to play in promoting road safety,” Mr. De Jesus said. 

“Road traffic injuries are a major yet often neglected public health issue. Deaths and injuries from road crashes are preventable, and all sectors have a role to play in promoting road safety”, the World Health Organization (WHO) Representative to the Philippines Rui Paulo de Jesus said in the launch of the Philippine Road Safety Action Plan 2023-2028 last May 31, 2023. 

The Philippine Road Safety Action Plan 2023-2028 aims to create a safer road environment and reduce deaths on the road by 35% in 2028.

“After the official release of the Philippine Road Safety Action Plan, it is high time to put it in action and ensure a significant reduction of deaths on the road,” Mr. Bautista mentioned at the launch. 

“After the official release of the Philippine Road Safety Action Plan, it is high time to put it in action and ensure a significant reduction of deaths on the road,” DOTr Secretary Jaime Bautista mentioned at the launch. 

“The DOTr takes road safety seriously. Its approach is anchored on prevention. In fact, majority of transport projects are aligned towards promoting road safety”, he added. 

The Philippine Road Safety Action Plan 2023-2028 consists of five pillars targeted to address and counter the ongoing problems on roads: 

  • Road safety management 
  • Safer road 
  • Safer vehicles 
  • Safer road users 
  • Post-crash response 

– Almira Louise S. Martinez

Jollibee Foods Corporation to conduct Annual Stockholders’ Meeting virtually on June 28 at 2 p.m.

Deadline to register to vote in absentia is on June 18, 5 p.m., while deadline to vote in absentia is on June 21, 12 p.m.

 

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of Jollibee Foods Corporation (the “Corporation”) shall be held on Friday, June 28, 2024 at 2:00 in the afternoon.

The agenda for the meeting shall be as follows: 

  1. Call to Order;
  2. Certification by the Corporate Secretary on Notice and Quorum;
  3. Reading and approval of the minutes of the last Annual Stockholders’ Meeting;
  4. Management’s Report;
  5. Approval of the 2023 Audited Financial Statements and Annual Report;
  6. Ratification of Actions by the Board of Directors and Officers of the Corporation;
  7. Approval of Amendments to the Secondary Purposes of the Corporation in Article Two of the Articles of Incorporation, to remove land from among the real properties that may be acquired, mortgaged or encumbered by the Corporation;
  8. Election of Directors;
  9. Appointment of External Auditors;
  10. Other matters; and
  11. Adjournment.

Only stockholders of record as of May 28, 2024 are entitled to notice of, and to vote at, this meeting.

In the interest of public health and safety, there will be no physical meeting. The Corporation shall conduct the meeting virtually and the stockholders may attend and participate via remote communication and by voting in absentia or by appointing the Chairman of the meeting as their proxy.

The procedures for participating in the meeting through remote communication and for voting in absentia are set forth in the Information Statement and shall also be published in the Corporation’s website at https://asm.jollibeegroup.com/. The deadline for registration to vote in absentia shall be until 12:00 P.M. of June 21, 2024.

Stockholders who will join by proxy shall download and complete the proxy form found in the Corporation’s website at http://www.jollibeegroup.com and submit the duly accomplished proxy forms by email to corporatesecretary@jollibee.com.ph no later than 5:00 p.m. of June 18, 2024. Proxies received thereafter shall not be recognized for the meeting.  We are not soliciting your proxy.

 

Pasig City, June 5, 2024.

 

WILLIAM TAN UNTIONG

Corporate Secretary

 

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Inflation picks up to 6-month high

Inflation rose for a fourth straight month in May, the statistics agency said on Wednesday. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

INFLATION ACCELERATED to a six-month high in May, driven by the faster rise in utility and transport costs, the Philippine Statistics Authority (PSA) said on Wednesday.

The consumer price index (CPI) picked up to 3.9% year on year in May from 3.8% in April but slowed from 6.1% in the same month last year.

It was the fastest inflation since 4.1% in November and matched the 3.9% inflation in December.

Inflation rates in the Philippines

May inflation also fell within the Bangko Sentral ng Pilipinas’ (BSP) 3.7-4.5% forecast for the month. However, it was slightly below the 4% median estimate in a BusinessWorld poll of 16 analysts last week.

May also marked the fourth straight month of faster annual inflation, and the sixth straight month that inflation settled within the BSP’s 2-4% target band.

Month on month, inflation inched up by 0.1%. Stripping out seasonality factors, month-on-month inflation picked up by 0.3%.

Core inflation, which excludes volatile prices of food and fuel, slowed to 3.1% in May from 3.2% in April and 7.7% in the same month a year ago.

From January to May, headline inflation averaged 3.5%, matching the BSP’s full-year forecast.

“The inflation outturn is consistent with the BSP expectations that inflation could temporarily accelerate above the target range over the near term due to adverse weather conditions on domestic agricultural output and positive base effects,” the central bank said in a statement.

National Statistician Claire Dennis S. Mapa said the inflation uptick was driven by the faster increase in the housing, water, electricity, gas and other fuels index. It rose to 0.9% in May from 0.4% in April.

“One of the main contributors to the increase in housing, water, electricity, gas, and other fuels was the slower pace of decrease in electricity prices… (and) the faster rise in prices of liquified petroleum gas (LPG), which had 9.4% inflation,” he said in mixed English and Filipino.

He also noted that the yellow and red alerts placed on the Luzon and Visayas grids contributed to higher electricity prices.

Mr. Mapa also noted the faster annual growth in transport index at 3.5% in May from 2.6% in the previous month and -0.5% in May 2023. This was driven by higher gasoline and diesel prices, as well as rising fares for passenger transport by sea.

Meanwhile, the heavily weighted food and non-alcoholic beverages index was the main contributor to overall headline inflation, accounting for 56.6% or 2.2 percentage points (ppts).

The food index rose to 5.8% in May, slowing from 6% a month ago and 7.4% in May 2023. The cereals and cereal products index, which includes rice, eased to 16.6% from 16.9% in April.

Rice inflation eased to 23% from 23.9% a month earlier. May marked the second straight month of slower rice inflation.

PSA data showed that the average price of a kilo of well-milled rice declined to P56.06 in May from P56.42 in April while special rice dropped to P64.41 from P64.68 per kilo.

Mr. Mapa noted that rice prices continue to see “incremental decreases” as global rice prices are also going down.

He also cited faster inflation in the ready-made and other food products, particularly ginger. The average price of a kilo of ginger rose to P148.72 in May from P127.66 in April.

Meanwhile, the inflation rate for the bottom 30% of income households settled at 5.3% in May, the same as a month ago but slower than 6.7% a year earlier.

In the first five months, the inflation rate averaged 4.6% for the bottom 30%.

In the National Capital Region (NCR), inflation quickened to 3.1% from 2.8% in April. Inflation in areas outside NCR averaged 4.1%, unchanged from the previous month.

RISKS TO INFLATION
Meanwhile, the BSP said that risks to the inflation outlook continue to tilt toward the upside.

“Possible further price pressures are linked mainly to higher transport charges, elevated food prices, higher electricity rates, and increase in global oil prices,” it said.

However, the central bank said it still expects average inflation to return to the target range for both 2024 and 2025.

PSA’s Mr. Mapa said that inflation could ease further after the National Economic and Development Authority (NEDA) Board recently approved a medium-term plan to reduce tariffs on key agricultural and industrial products. Tariffs for rice imports will be slashed to 15% from 35% previously until 2028.

“Our inflation of rice has a very substantial contribution to overall inflation. It’s even bigger for the bottom 30% income households… It would reduce the overall inflation, given the contribution of rice to the overall inflation, all things being the same,” Mr. Mapa said.

NEDA Secretary Arsenio M. Balisacan said in a statement on Wednesday that the tariff reduction will “help manage food inflation, promote policy stability and investment planning, and enhance food security.”

How much did each commodity group contribute to May inflation?

POLICY IMPLICATIONS
The central bank said it will consider the latest inflation data in its next policy review on June 27.

“The BSP also continues to support the National Government’s nonmonetary measures to address supply-side pressures on prices and sustain the disinflation process,” it added.

Chinabank Research said in an e-mail note that recent nonmonetary measures could result in a lower inflation path and ensure that full-year inflation falls within the BSP’s target.

“While unfavorable base effects will continue to help drive up inflation until July and upside risks persist, recent nonmonetary interventions such as tariff cuts on key commodities and the exemption of agri-trucks from toll fee hikes starting this month brought positive developments to the inflation outlook,” it said.

The BSP earlier said that inflation could overshoot the 2-4% target band from May to July amid base effects.

“The monthly year-on-year inflation is expected to peak in July and anticipated to begin its downward trend in August,” Metrobank Research and Market Strategy Department said in a report.

Pantheon Macroeconomics in an e-mail note said that it expects inflation to average 3.3% this year, below the BSP’s full-year target.

Chinabank Research said that latest inflation data may also prompt the BSP to begin policy easing earlier than expected.

“(This) could support possible local policy rate cuts as early as the latter part of 2024 especially if the Fed starts cutting rates,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Pantheon said it expects the BSP to cut by a total of 75 basis points (bps) this year, beginning in August.

The Monetary Board last month kept its benchmark steady at a 17-year high of 6.5%. The central bank raised borrowing costs by 450 bps from May 2022 to October 2023.

BSP Governor Eli M. Remolona, Jr. earlier said that the Monetary Board can begin policy easing as early as August.

Metrobank Research said it expects the BSP to begin its easing cycle in the fourth quarter should the US Federal Reserve start cutting in September.

Mr. Remolona earlier said that the BSP does not need to wait for the Fed and can cut ahead of the US central bank.

Lower rice tariffs to bring down retail prices as early as July

The National Economic and Development Authority (NEDA) Board has approved a medium-term plan to lower tariffs on agricultural and industrial products, including rice. — PHILIPPINE STAR/EDD GUMBAN

THE GOVERNMENT’S move to slash tariffs on imported rice could bring down average retail prices by P6-P7 per kilo as early as July, the Department of Agriculture (DA) said on Wednesday.

“The potential price reduction will be between P6 and P7 per kilo… In a month’s time we can expect that the prices would drop,” Agriculture Assistant Secretary and Spokesperson Arnel V. De Mesa said in a virtual briefing.

He said consumers could see the drop in retail prices of imported rice by July or August, noting that it takes around two to three weeks for imports to arrive in the country.

The National Economic and Development Authority (NEDA) Board has approved a medium-term plan to lower tariffs on agricultural and industrial products. This included the further reduction in rice import tariffs to 15% from 35% until 2028.

“We will do everything within our power to make sure the substantial cut in rice tariff will translate to a significant reduction in retail price of the grain,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a separate statement.

According to the DA’s Price monitoring of Metro Manila markets as of June 4, a kilo of imported well-milled rice was P52-P55, while regular milled rice was P49-P51 per kilo.

The Department of Finance earlier said that it is willing to forego an estimated P10 billion in tariff collections to lower the price of the food staple.

Mr. Tiu Laurel said the agency will plug the potential funding gaps for the Rice Competitive Enhancement Fund (RCEF). RCEF is funded by tariff collections on rice imports, mandated under Republic Act No. 11203, the Rice Tariffication Law.

“Our priority is to ensure that our rice farmers will continue to benefit from the Rice Fund created under the Rice Tariffication Law and is confident it will be extended until 2030 to improve the lives of millions of impoverished rice farmers,” he said.

The DA is seeking to extend RCEF and bring back some regulatory powers to the NFA to bring down rice prices.

LOWER INFLATION
Meanwhile, HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said the implementation of lower tariffs on key commodities would likely help cool inflation,

The consumer price index (CPI) may ease by as much as 1.8 percentage points if the government swiftly implements the lower tariffs on rice, corn, pork and mechanically deboned meat, he said at a media briefing.

“But if, let’s say, the rice tariff rate cut happens tomorrow, or happens within June, I do think that’s a big downside risk to the inflation outlook, and perhaps, you know, inflation will not breach target,” he said.

Annual inflation quickened for a fourth straight month in May. Inflation rose to 3.9% year on year in May from 3.8% in April but slowed from 6.1% in the same month last year.

May marked the sixth straight month that inflation settled within the central bank’s 2-4% target band.

Mr. Dacanay said inflation may likely breach the government’s 2-4% target until July due to unfavorable base effects.

“It’s going to range between 4% and 4.5%, perhaps up until July. It’s only in August where it will return back to within target,” he said. — Adrian H. Halili with inputs from B.M.D.Cruz

HSBC sees above 6% growth for PHL in Q2

The Philippine economy is expected to grow by 6-7% this year. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE PHILIPPINE ECONOMY is expected to grow above 6% in the second quarter amid base effects and improved government spending, HSBC Global Research said on Wednesday.

“For the second quarter, [the economy is] going to grow above 6%, mainly because of base effects, because as you remember, in second quarter of last year, the government underspent their budget,” HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said at a media briefing.

If realized, the second-quarter gross domestic product (GDP) growth would be faster than 4.3% in the same period in 2023, and the 5.7% expansion in the first quarter.

The government is targeting 6-7% GDP growth this year.

The Philippine Statistics Authority (PSA) will release second-quarter GDP data on Aug. 8.

“Right now, we’re not underspending. So, with the spending plan in check, with consumption slowing down but still robust; with investments, again, cooling, but not really falling off a cliff, quarter-on-quarter growth should be a little less than potential,” Mr. Dacanay said.

Household consumption, which accounts for about 80% of GDP, grew by 4.6% in the first-quarter period, the slowest since the coronavirus pandemic.

Government final consumption expenditure growth slowed to 1.7% in the first quarter from 6.2% in the same period in 2023.

Last week, Budget Secretary Amenah F. Pangandaman said measures on early procurement and digitization of state transactions would ensure that government spending is on track this year.

However, Mr. Dacanay said there is still a risk that weak consumption could weigh on growth. Consumption accounts for around a quarter of GDP growth.

“We do expect consumption or demand will likely be weak in the second or third quarter of 2024, since we’re still adjusting with high interest rates. We’re still adjusting to high inflation. We’re still building our savings back up,” Mr. Dacanay said.

The National Economic and Development Authority Board’s move to reduce tariffs on basic commodities like rice should ease pressure on household budgets and boost private spending, HSBC said.

“Cutting the tariff rate of rice by 20 percentage points (ppts) could unlock around 2% of household budgets to be spent on other things, more so for the low-income households who spend a larger portion of their budgets on rice,” Mr. Dacanay said, adding this could contribute around 1.4 ppts to overall growth.

Mr. Dacanay clarified that HSBC has yet to consider the recent tariff reduction in its official GDP growth forecast.

HSBC also expects the Bangko Sentral ng Pilipinas (BSP) to cut its key policy rate by 25 basis points (bps) in the fourth quarter after the US Federal Reserve starts its easing cycle. Another 125 bps of rate cuts is expected in 2025.

“With growth still strong, I do think the BSP will tilt towards the safer side of things, and basically lead to cut in the fourth quarter of 2024 after the Fed,” Mr. Dacanay said.

“Cutting ahead of the Fed would still be tricky and would depend on how fast the disinflationary impact of the tariff adjustment would come through,” Mr. Dacanay said.

The Philippines could potentially attract more foreign direct investments (FDIs) once central banks begin their easing cycles.

“When all the central banks in the world ease their policy rates, the Philippines will be one of the benefactors in terms of FDI, in terms of capital flowing in,” Mr. Dacanay said. 

However, he said the government needs to improve the ease of doing business in the country as well as lower power costs to attract investors. — B.M.D.Cruz

Government warned against low tariff regime

Workers arrange sacks of National Food Authority (NFA) rice in Balagtas, Bulacan. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Kyle Aristophere T. Atienza, Reporter

TRADE PROTECTION is needed if the government is serious about rescuing its agriculture and manufacturing sectors, experts said after the Philippines announced a new low tariff regime covering industrial and agricultural products.

Farmers, meanwhile, said the government has failed to keep its promise that it would not reduce tariffs for sensitive agricultural commodities while the Philippines is still a party to the world’s largest free trade agreement.

The country has been lowering tariffs since the early 1980s, with manufacturing falling to its smallest share of economic output since 1949 and agriculture down to its smallest in the country’s history, said Jose Enrique A. Africa, executive director of think tank Ibon Foundation.

“Mindlessly cutting tariffs further will just continue this long-term trend of weakening agriculture and manufacturing,” he said in a Facebook Messenger chat.

The National Economic and Development Authority (NEDA) Board on Monday approved a medium-term plan to lower tariffs on agricultural and industrial products, amid concerns over rising inflation, and slowing manufacturing output.

Under the Comprehensive Tariff Program for 2024 to 2028, the government would keep the rates for more than half of the tariff lines for products that have relatively low tariffs, a move that NEDA Secretary Arsenio M. Balisacan said would boost manufacturers’ competitiveness.

“Agricultural and industrial competitiveness is, most of all, built up from the ground with state subsidies and support to build capacity astride judicious trade and tariff protection,” Mr. Africa said.

He cited the case of the United States, which has been on a mission to subsidize its manufacturing sector amid growing competition with China, which accounted for 28.4% of global manufacturing output last year.

“If an industrial power like the US sees the need for protection, it’s bizarre that the underdeveloped Philippines somehow thinks otherwise,” he said.

Under the tariff program, the reduced tariff rates for corn, pork and mechanically deboned meat that started in 2019 would be kept until 2028. Rice tariffs will go down to 15% from the current 35% until 2028.

Raul Q. Montemayor of the Federation of Free Farmers lamented that the government earlier assured farmers that rice and other sensitive agricultural commodities would not suffer any diminution in tariff protection while the Philippines is part of the Regional Comprehensive Economic Partnership (RCEP).

The National Government has also failed to consult stakeholders before deciding to lower tariffs for industrial and agricultural products including rice, he added in a Viber message.

“NEDA has deprived industry stakeholders of their right to genuine consultation and due process,” he said.

Proposed tariff changes have to undergo hearings conducted by the Tariff Commission, which will then give the recommendations to the NEDA Board chaired by the President.

Mr. Montemayor said further reduction in rice tariffs would “hugely” affect the “morale and productive efforts” of three million domestic rice farmers and the rice industry as a whole, noting that the country’s dependence on rice imports has grown to 25% from 10%.

“Our experience since trading in the rice industry was liberalized… and tariffs were lowered also on non-ASEAN (Association of Southeast Asian Nations) rice imports has not been salutary. But rice retail prices have risen,” he said. “That the 15% tariff on rice will provide major and lasting relief to consumers is more a shot in the dark than a probable result.”

The Samahan ng Industriya ng Agrikultura said that when the Finance department last year announced plans to lower rice tariff, Vietnam and Thailand started to increase rice prices to $680 per metric ton (MT) from $630/MT of the 5% broken rice variety.

Non-ASEAN rice exporters like India and Pakistan simply increased their export tax, it said in a Viber message.

As of end May, the Philippines has already imported two million MT of rice, equivalent to 53% of projected imports.

The agriculture sector’s contribution to the gross domestic product last year fell to 8.6% — the smallest in the country’s history — from 9.55% a year earlier.

Political economy researcher Hansley A. Juliano from the Ateneo de Manila University noted the farm sector’s weakening power in terms of policy lobbying.

“Unfortunately, our farmer sector is getting older so just by themselves, even the successful agrarian reform beneficiaries and cooperative farm movements, they’re not really a strong lobby,” he said via Messenger chat.

Meanwhile, the government’s move to reduce tariffs on coal is unlikely to lower the cost of electricity as coal prices continue to rise, Greenpeace Philippines campaigner Khevin Yu said via Messenger chat.

He said the move will prolong the country’s reliance on coal and affect its transition to renewables.

“The best way to reduce electricity cost is to utilize the cheapest source of energy which is renewable energy,” he added, blaming “faulty operational capacity” of coal-fired power plants that led to yellow power alerts across the main island of Luzon.

A 2024 Green Economy Report for Southeast Asia led by Bain & Company said the Philippines saw a 57% increase in “green” investments to $1.46 billion in 2023, but still falls short of the over $16 billion in required capital investments needed for its green transition.

“NEDA should instead create more incentives for power generators, distributors and even for electric consumers who use renewables,” Mr. Yu said.

Alternergy starts building P10-B Tanay Wind Power Project

MONICA DAHIYA-UNSPLASH

ALTERNERGY Holdings Corp. announced on Wednesday the start of the construction of its 112-megawatt (MW) Tanay Wind Power Project in Rizal.

The company, through its subsidiary Alternergy Tanay Wind Corp. (ATWC), aims to attain additional capacity by the end of 2025, Alternergy said in a statement.

“There will be a lot of growth that is going to happen in the next 18 months, but please bear with us for this construction phase,” ATWC President Knud Hedeager said, adding that the tourism industry in Tanay is expected to become “busier” by 2026.

The wind farm project has a total cost of P10 billion, of which up to P8 billion in funding came from the Bank of the Philippine Islands and Security Bank Corp.

“We are grateful for the huge support given to the Tanay Wind Power Project, which has finally led us to this groundbreaking. We are hoping that the same support will be extended to us as we move ahead with the construction phase,” Alternergy Chairman Vicente S. Pérez said.

Rizal Governor Nina Ricci Ynares-Chiongbian said that the Tanay Wind Power would be Alternergy’s second wind project in Rizal. The first, the Pililla Wind Project, commenced commercial operations in 2015.

“What we have started here with our partnership is a testament to our commitment to bringing alternative energy as a source of clean energy to the fold of our daily living,” she said.

Last month, the company also hosted a groundbreaking ceremony for its P7-billion 64-MW Alabat Wind Power Project.

Alternergy President Gerry P. Magbanua said on Monday that the company has raised over P20 billion from its capital-raising activities over a period of 15 months since its initial public offering. This achievement occurred earlier than forecasted, which was expected to take three to five years.

The capital-raising program is aimed at funding the accelerated construction of its new projects with a capacity of up to 204 MW.

Alternergy hopes to develop up to 474 MW of additional wind, solar, and run-of-river hydropower projects in the next three years.

At the local bourse on Wednesday, shares in the company rose by two centavos or 2.94% to close at P0.70 each. — Sheldeen Joy Talavera

DMCI allots P6B for eco-agri condotel project in Benguet

CONSUNJI-LED DMCI Homes announced on Wednesday that it has allocated P6 billion for its eco-agri condotel Moncello Crest in Tuba, Benguet.

The residential resort project initially launched 522 units in May, DMCI Homes said in a statement on Wednesday.

The company stated its leisure arm, DMCI Homes Leisure Residences, is expanding in northern Luzon following the completion of its Solmera Coast property in San Juan, Batangas.

Moncello Crest, designed as a mountain resort, is equipped with amenities such as a heated outdoor jacuzzi, fire pits for guests, and a roof deck for visitors.

DMCI said that the complex will host an all-day dining restaurant, café, game room, spa, gym, multi-purpose athletics play area, daycare center, and convention center for large events.

“Moncello Crest’s name draws from montel, an Italian word for mountain, and the Spanish word ariceli referring to an “altar in the sky,” the company said.

Located in Tuba, the condotel is accessible via Marcos Highway and is within Barangay Poblacion. 

Within the municipality, residents can visit the BenCab Museum, hot spring resorts, and Pan Ay-Ayaman Eco Park. The “Bridal Veil” Falls, Aran Cave, and Ifugao Woodcarvers Village can also be explored while staying in Moncello Crest.

“Tuba, Benguet has emerged as a popular tourist destination given its proximity to Baguio City and its thriving agri-tourism industry,” the company said. — Aubrey Rose A. Inosante

Melo’s daughter reopens Carmelo’s

CHEF CRISTINA SANTIAGO of Carmelo’s Steakhouse

(The steaks are still the focus, as are her desserts)

By Joseph L. Garcia, Senior Reporter

FOR MANY Filipinos, their first taste of a really good steak was at Melo’s. Carmelo “Melo” Santiago, opening his first branch of Melo’s in 1987, popularized Angus steaks in the Philippines. Later projects also saw him bringing Japanese wagyu beef to the Philippines through House of Wagyu Stone Grill in 2007. Melo’s name thus still has some heft in the restaurant industry, despite his passing away in the middle of the COVID-19 pandemic in 2021.

He and his daughter, Cristina, had first opened Carmelo’s in Greenbelt in 2014 (according to her memory; some news outlets say they opened the year before that).

In an interview with BusinessWorld during a tasting on May 30, she recalled that their joint venture began after she set up her dessert business, Sweet Bella. A graduate of the California School of Culinary Arts, she had planned to open a cafe, but her father insisted they open a steakhouse instead, with her desserts included in the menu (she had, after all, won The Best Dessert award from the Philippine Daily Inquirer three times).

In 2020, while the restaurant was under renovation, the pandemic struck, and they decided not to reopen at the time. “Before he passed away, he even told me in the hospital: ‘Let’s build Carmelo’s again.’” She reassured him that they would, but mindful of his health, she also urged him to take it one step at a time.

“He passed away — I lost… naiiyak ako (I want to cry),” she said, her voice breaking slightly. “I lost my hero. I didn’t know what to do.”

She told us though that after seeing an available space at The Proscenium Retail Row at Rockwell, “There was something in me that I said, ‘I think I’m ready to build Carmelo’s.’

“I never really thought of opening na eh,” she said.

She was surprised by the ease with which she got the space, simply walking into Rockwell’s leasing department. “Somebody up there helped me.”

The space, as we entered it, had its ceilings dripping with golden chains, and was paneled in wood. The private dining room was modeled after her father’s music room at home (the electric fireplace was her idea, though), and his portrait and a book about his achievements (which she presented to him) are there.

The meal opened with oysters, served on a bed of dry ice (lending a smoky effect); the oysters were very plump and had a very clean flavor. Despite the theatrical flair with which it was served, her father’s old-world imprimatur was still present: the oysters were served with a small bowl of mid-20th century cocktail sauce (not a bad addition, and I could pretend for the few seconds that I was swallowing an oyster that I was somehow on a transatlantic flight back in the 1960s). Her father’s classic paté was also on the table.

“Times are changing. Now they like new sauces, like miso sauce or something,” she said. Other changes included more flair in the service (as in the oysters, and later for the main course when sides were served on tiny copper pots).

The tuna tataki that came next was definitely modern: it had a very mild flavor, given some power by the savory miso sauce. The grilled Octopus a la Plancha was the yang to the tuna’s yin: the octopus itself was robust, while the creamy cauliflower puree was a clever way to tame the octopus. All these were served with a La Fiole Cote du Rhone Blanc, which also complimented the Prawn Bisque (the plate arrived with the prawns curled up in it, then the soup itself was poured out of a teapot; lovely videos await).

Then the Grilled Wagyu Ribeye arrived (perhaps a nod to the changing times — this, instead of her father’s Angus, was her showpiece for that day; though of course, Angus is also on the menu). A knife cut through it like butter, and it tasted luxurious. It was all very simply grilled, letting the beef speak for itself. It was served with steak rice, mashed potatoes, and grilled vegetables. We left exactly one bite of steak on the plate, for we had unfortunately filled up on the excellent bread and the truffle burrata pasta (good, but could be better; we note the pasta’s mushiness). These were paired with Cabernet Sauvignon-Merlot Chateau Loyasson from Bordeaux, which added even more dimension to the otherwise already-perfect steak.

A headache kept us from Ms. Santiago’s award-winning desserts (her Pearl, guava mousse with fresh mango coulis, looked like a real treat), but the two bites we took of the Angelina — her hazelnut mousse with a hazelnut praline crust, adorned with vibrant raspberry coulis and edible red magnolia flowers — left us wishing we felt better so we could enjoy it.

While Carmelo’s bears her father’s name, it’s run independently from the Melo’s chain which is operated by her siblings. Still, family and tradition leave a heavy imprint.

“Always make sure that your food is the best quality,” she said, asked about the things she learned about the business from her father. “The only thing that my dad really requested is never change my supplier.” Her father’s steaks, and now hers, are sourced from Australia and the United States.

“Always connect with your customers. When they come back, they feel like a special person,” she added.

“For me, it was a moving forward also. I’ve accepted that he’s gone, and now I can do the things that he had implanted, and practice it, and make a name; knowing that he was the one who polished me, how to be who I am now,” she said.

Carmelo’s Steakhouse is located at the second floor of The Proscenium Retail Row, Rockwell, Makati. Follow @carmelossteakhouse on Instagram for updates on the restaurant. For reservations, contact 0915-903-8005.

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