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Term deposit yields drop as gov’t works to stem inflation

BW FILE PHOTO

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits went down on Wednesday as the government implements measures to help lower prices after inflation picked up in August.

The central bank’s term deposit facility (TDF) fetched bids amounting to P311.766 billion on Wednesday, above the P260 billion on the auction block as well as P279.725 billion seen a week ago for a P280-billion offer.

Broken down, tenders for the seven-day papers reached P167.276 billion, higher than the P160 billion auctioned off by the central bank but lower than P170.616 billion in bids seen the previous week.

Banks asked for yields ranging from 6.498% to 6.6%, lower than the 6.56% to 6.6% band seen a week ago. This caused the average rate of the one-week deposits to decline by 0.69 basis point (bp) to 6.5833% from 6.6359% previously.

Meanwhile, bids for the 14-day term deposits amounted to P144.49 billion, higher than the P100-billion offering and the P109.109 billion in tenders for a P120-billion offer seen on Aug. 30.

Accepted rates were from 6.5% to 6.605%, slightly narrower than the 6.57% to 6.62% margin recorded a week ago. With this, the average rate for the two-week deposits inched down by 1.12 bps to 6.5872% from the 6.5984% logged in the prior auction.

The BSP has not auctioned off 28-day term deposits for more than two years to give way to its weekly offerings of securities with the same tenor.

The term deposits and the 28-day bills are used by the central bank to mop up excess liquidity in the financial system and to better guide market rates.

TDF yields were lower on Wednesday as the temporary ceiling for rice prices took effect this week, which could help bring down inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Malacañang last week issued an executive order imposing a nationwide price ceiling of P41 per kilogram for regular milled rice and P45 per kilogram for well-milled rice effective on Tuesday.

TDF yields were also lower “amid proposals to reduce the import tariffs on rice from 35% to help further reduce local rice prices from imported sources,” Mr. Ricafort said.

The National Economic and Development Authority (NEDA) is looking into a “temporary and calibrated” reduction in tariffs for rice to help lower domestic prices, NEDA Secretary Arsenio M. Balisacan said on Tuesday.

Headline inflation accelerated for the first time in seven months in August, amid a spike in the prices of rice, vegetables and fuel, the Philippine Statistics Authority (PSA) said on Tuesday.

Preliminary data from the PSA showed the consumer price index (CPI) quickened to 5.3% in August from 4.7% in July, but slower than the 6.3% clip a year ago.

This was above the 4.9% median estimate in a BusinessWorld poll conducted last week. However, it settled within the Bangko Sentral ng Pilipinas’ (BSP) 4.8-5.6% forecast range for the month.

For the first eight months, the CPI averaged 6.6%, still above the BSP’s 5.6% forecast and 2-4% target for the year.

The BSP has kept benchmark rates steady at its last three meetings as it expects inflation to return to its target path within the year.

It has raised borrowing costs by 425 bps from May 2022 to March 2023 to curb inflation. — Keisha B. Ta-asan

Speciality Food & Drinks Asia returns with its 5th edition

JOSHUA ANG-UNSPLASH

GUESTS can visit a world of innovation at Speciality Food & Drinks Asia (SFDA) — Southeast Asia’s premier trade show for artisan, gourmet, and fine food and drink products and solutions. Held from Sept. 26 to 28 at the Sands Expo & Convention Centre in Singapore and co-located with the second edition of takeaway and delivery exhibition Food2Go, SFDA is expected to host up to 8,000 trade visitors and over 200 exhibitors and brands from across the world.

SFDA brings together trade professionals from the entire F&B industry, including restaurants, pubs and bars; meat and poultry; and speciality coffee and tea, to explore new products, create business opportunities, and share solutions to overcome industry challenges. A key focus this year is on embracing the digital shift in areas such as food service, packaging and production.

Visitors will be able to experience product showcases at the showgrounds, witness celebrity chefs such as MasterChef Singapore Season 4 contestant Mandy Kee and Executive Chef Victor Loy conduct cooking demonstrations at the Fine Food Live Stage, attend engaging panel discussions at the Innovation Stage, and taste the finest and newest brews at the Tap Room.

The lineup of exhibitors includes up-and-coming products and brands such as Limwood Gourmet, Irish Duck Company, Jeonbuk Institute for Food-Bioindustry, Unox, Isle Grocer & Co, LAP Spirits, and Allpress Espresso, among many others.

On top of a Singapore Pavilion showcasing some of the finest local products and suppliers, SFDA will also feature international exhibitors from 15 other countries including Belgium, China, Hong Kong, Ireland, Italy, Japan, Malaysia, the Philippines, Poland, South Korea, Taiwan, Turkey, the United Arab Emirates, the United States, and Vietnam.

Food tech investor Big Idea Ventures (BIV) will be hosting the international finals of the first-ever Big Idea Food Competition to identify the best innovations in alternative protein. The grand prize is a $200,000 investment package and automatic inclusion into Big Idea Venture’s Cohort #8 accelerator program.

The first-ever ASEAN Butchery Competition, hosted by Montgomery Asia and the Meat Traders Association Singapore (MTA), will bring together meat professionals from the region to showcase their workmanship skills in meat carving and presentation, for the title of ASEAN’s best butcher and a grand prize of S$5,000.

Returning to the event is the Singapore National Coffee Championship, organized by the Singapore Coffee Association in partnership with Speciality Coffee & Tea Asia. Singapore’s top baristas will compete in the Singapore National Latte Art Championship, Singapore Cup Tasters Championship, Singapore National Barista Championship and the Singapore National Brewers Cup, with the winners representing Singapore in the World Coffee Championships 2024.

To foster knowledge transfer within the industry, panel discussions will provide insights crucial to innovation, business growth, and sustainability. Industry leaders from organizations such as Grab, Deliveroo, foodpanda, Association of Catering Professionals Singapore, APAC Society for Cellular Agriculture, and A*STAR will delve into topics such as partnerships in the food delivery industry; the ethics of dining reservations; the future of specialty food retail and distribution; and the path towards food security, among many others.

SFDA will also witness the industry bringing the latest products and offerings to the table, and brand-new product launches by a myriad of exhibitors. These include LEI food&drinks’ organic and premium not-from-concentrate juices; Isle Grocer & Co.’s selection of hams, pate, olive oil and herbs; Wake the Crew’s cold brew coffee concentrate sachets; Choya Umeshu South East Asia’s extra smooth choya; Noomoo’s artisanal oat milk; VektroPack’s new recyclable packaging; Ecospec NovelTech’s beverage treatment products; Sanz Pte Ltd.’s new hygienic cutlery dispenser; and Smart Minds Holdings Limited’s SaaS logistics solutions; and many more.

Lucky visitors have a chance to win a specialty goods hamper (S$200) and a brand-new Thermomix TM6 (worth S$2,550).

Wider spectrum capacity and access boost download speeds

CHRISTINA WOCINTECHCHAT-UNSPLASH

IMPROVING access and quantity of spectrum capacity has boosted 4G and 5G download speeds in the Asia Pacific (APAC) region, according to Opensignal.

“Opensignal data shows that APAC users observe twice or even thrice as fast 4G download speeds and around 50% faster 5G download speeds when there are large amounts of spectrum bandwidth connected compared with low amounts. Video streaming services also benefit from increased spectrum bandwidth — however, the difference is more marked on 4G than 5G,” Opensignal said in an Aug. 31 report.

The analysis involved May to July data from 30 Asia Pacific markets, including the Philippines.

“When users are connected with greater amounts of 4G spectrum bandwidth, they experience much faster average 4G download speeds across APAC markets. While 5G has launched in many markets, 4G is still prevalent across many markets in the region and continues to contribute to the 5G experience when users connect to 5G with non-standalone access,” Opensignal said.

Average download speeds on 4G for the 20-40 megahertz (MHz) spectrum bandwidth used stood at 35.1 megabits per second (Mbps), 55.2% faster than for connections using spectrum capacity of 20MHz or less, it said.

“The 4G Download Speed score is even higher with at least three carriers used and more than 40MHz spectrum connected. Then users — see average speeds of 46.4Mbps, or more than twice as fast as when there is 0-20MHz spectrum in use. With more than 80MHz of mobile spectrum connected, average 4G download speeds in Asia Pacific rise to 64.1Mbps, which is nearly three times faster compared to speeds with just 0-20MHz connected,” Opensignal said.

“More spectrum bandwidth also boosts 5G Download Speed in the Asia Pacific region significantly. When smartphones are connected with more than 100MHz of total spectrum capacity, average 5G download speeds clocks in at 271.4Mbps. This is approximately a 50% increase in 5G Download Speed compared with 5G speeds with a spectrum bandwidth of 100MHz or less,” it added.

Among Asia Pacific markets, Malaysia benefits the most from wider spectrum bandwidth for 4G download speeds as it was two times faster for 40-60MHz and 2.3 times faster for 60-80MHz.

For 5G, download speed was up to 271.4 Mbps at over 100MHz, from 178.7 Mbps at 0-50MHz.

“4G Download Speed also more than doubles in Indonesia where more than 60MHz spectrum is used, compared to 0-20MHz — and is nearly twice as high in Australia and South Korea using respective bandwidths. Our users in Japan observe a smaller relative impact of more spectrum used for 4G connectivity — average 4G download speeds are only around 40% faster for 40-60MHz bandwidths and slightly more than 70% faster for 60-80MHz,” Opensignal added.

Higher spectrum capacity also boosted video streaming speeds, it said.

“With more spectrum assigned to mobile connections, our users in the APAC region also enjoy shorter initial delays in playing video streams,” Opensignal said.

“The Video Experience score increases from 59.7 points (out of 100) for a spectrum bandwidth of 20MHz or less, up to 71.6 points when the total spectrum bandwidth connected exceeds 80MHz,” it added.

However, Opensignal noted that some Asia-Pacific markets have limited access to spectrum, which affects their economies.

“More spectrum assigned to mobile operators leads to faster speeds and a better mobile user experience — which in turn leads to socioeconomic benefits,” it said.

Ronald Gustilo, national campaigner of Digital Pinoys, said spectrum access and allocation in the country should conform to constitutional limitations.

“Anyone seeking to access additional spectrum should secure a congressional franchise as it is a finite resource which should only be available to Filipino nationals under the 1987 Constitution,” he said in a Viber message to BusinessWorld.

“The government must welcome applicants so long as they comply with the requirements of the law,” he said on the creation of proper regulations for spectrum management. “Further, government should focus more on developing connectivity in isolated, far-flung communities.” — M.H.L. Antivola

Chips, silk and paper: You can’t keep secrets forever

BENZOIX-FREEPIK

CHINA appears to have built a chip that matches some of the West’s most advanced semiconductors. While it may alarm US defense experts and sanctions proponents, the development shouldn’t have been too surprising. Industrial secrets are impossible to keep for long, as the Chinese themselves know from millennia of what we’d now call intellectual property lost by way of trade, theft, and war. No one has a monopoly on innovation.

The progress toward parity with the West was revealed in a teardown conducted for Bloomberg News of the latest smartphone from Huawei Technologies Co., which utilizes a chip made by Shanghai-based Semiconductor Manufacturing International Corp. The Kirin 9000s chip is still two generations behind the most advanced Western products. At seven nanometers, it will soon be outdistanced by the even thinner three-nanometer chip that Apple Inc. will use in its next iPhone. Still, it reflects a porousness that lets knowhow slip through stringent US sanctions.

History has lots of examples of technology spreading in spite of government attempts at monopoly — mostly to the detriment of China. The Chinese had developed sericulture thousands of years ago, managing to keep the techniques for turning caterpillars into clothing a secret for hundreds of years. But the rulers of China needed Central Asian horses to wage war and control their territory (As Jessica Rawson explains in her magisterial Life and Afterlife in Ancient China, the soil in the Yellow River valley doesn’t have enough of the selenium required for the strong bones and muscles of military breeds). And so they traded silk for the right animals and quickly generated demand for the fabric outside the country. Because silk was key to China’s martial-equine needs, its secrets were strictly controlled. Breaking the sanctions could lead to death.

Still, the rewards of commerce moved the material westward by land and sea via the so-called “silk routes,” causing one of the world’s first trade imbalances. One estimate had the Roman Empire spending the equivalent of 1% of its gross domestic product on the cloth. Legend has it that the Chinese monopoly was broken by the Byzantine Emperor Justinian I in the 6th century when he had two Nestorian monks smuggle back silkworm eggs in bamboo cases, plus seedlings of the mulberry tree they fed on. But I suspect traders had already brought knowledge of silkworm cultivation to the West much earlier, just because such things do slip through. Hence, the explosion of silk manufacturing when Justinian made it part of his industrial policy. The Byzantines just got better at it.

China’s monopoly on paper manufacturing was broken much faster (well, six centuries) but more dramatically, after the emperor’s army lost a battle in Central Asia to the Arabs of the expanding Abbasid caliphate. Among the prisoners of war were military paper-makers who brought their secrets to the Middle East, from where it spread further west. (The origins of gunpowder for military use and guns are a little more nebulous, but the technology may have coursed westward along the same Central Asian routes.)

Porcelain — which sparked a health and sanitation revolution because of the ease with which it could be cleaned — was also much desired outside the Chinese world. So much so that China is still a synonym for the wares. From the 12th century on, Chinese emperors used the ceramics in much the same way they used silk, to gain influence over neighboring countries they wished to cultivate for reasons of prestige or policy. At the same time, traders would sell plates and jars designed for specific markets in the Islamic world and in Europe. It was not until the 18th century that factories in Meissen in Germany and Limoges in France discovered the kind of clay required and figured out the firing techniques to create true porcelain.

The story of tea is more familiar but still fraught with residual geopolitical indignation to this day. As with the Romans, the British faced a huge deficit because China dominated one product, in this case, tea. Furthermore, the emperors in Beijing didn’t feel the need to liberalize their trade policies to alleviate foreign anxieties. And so the English decided to correct the imbalance and the impasse by smuggling opium — a banned substance — into China. That immediately changed the trade equation. Chinese objections led to the British waging two Opium Wars, beginning in 1838, to open the country in the name of free trade. By the end of the century, the cascading effects of humiliation and stagnation led to the fall of the Qing dynasty.

So China comes to the semiconductor contest with a lot of… uhm, chips on its shoulder. Nothing is helped by the military faceoff with the US. Chinese patriots like to point out that the country had to “discover” its own way to atomic war technology to overcome the joint monopoly over the bomb by Washington and Moscow. Now the Biden administration’s semiconductor stranglehold is seen as just the latest attempt by the West to suppress China’s destined path back to No. 1. Beijing’s belligerence is deepened by its own millennia-long and misguided attempts to achieve autarky — as if the “Middle Kingdom” could thrive without the rest of the world.

It’s possible that the Chinese aren’t yet able to make advanced chips in quantity. Or make the state-of-the-art semiconductors the West is already deploying in consumer products. Again, it won’t be surprising if they just get better at it — especially if the government is raising $40 billion to support the domestic chip industry, as Reuters reports. The US can always tighten its sanctions regimes and strengthen the safeguards to slow the proliferation. But commerce will almost always force out technological secrets.

The bigger picture is more ominous. If China and the US continue to use trade and technology in a zero-sum game of world domination, we are all likely to end up on the zero end of the equation.

BLOOMBERG OPINION

DLSU and ADMU tie up to boost social entrepreneurship

SOCIAL ENTREPRENEURSHIP enabled by the academe can boost the sustainable economic development goals of the country, according to universities.

The De La Salle University (DLSU) and Ateneo de Manila University (ADMU) signed a three-year memorandum of understanding (MoU) targeting the fields of social entrepreneurship and sustainability on Tuesday.

The MoU is led by the Lasallian Social Enterprise for Economic Development (LSEED) Center and Ateneo Center for Social Entrepreneurship (ACSEnt) for mobilizing internal and external stakeholders to share good practices and localize the sustainable development goals (SDG) of the United Nations (UN).

“This partnership aims to forge pathways and produce synergies for social entrepreneurs to become bold and innovative leaders, doers, and dreamers who will impact their communities and the world around them,” Roberto C. Yap, ADMU president, said during the MoU signing.

“The role of the academe is not limited to educating minds but forming a generation that understands the value of education in real life,” said Norby Roque Salonga, founding director of the LSEED Center.

“I am confident that we can inspire more institutions to use social entrepreneurship as a sustainable approach to development,” said Fritzie Ian P. de Vera, vice-president for Lasallian Mission at DLSU.

“We hope to create greater impact by working with young people and communities to transform society,” she added on promoting innovative inclusion through community-student partnerships.

There are 164,473 social enterprises in the Philippines, amounting to 17% of registered companies, according to estimates from the British Council and Philippine Social Enterprise Network in 2015-2017, which included financially unsustainable entities.

Among the social enterprises, 70% operated as micro, small, and medium enterprises (MSMEs), 23% as nongovernment organizations, and 6% as cooperatives.

The Asian Development Bank (ADB) reported that the size and scale challenges of social enterprises include access to capital, innovative financial mechanisms to unlock additional capital, ecosystem knowledge of social enterprises, and data on social enterprise impact.

“Social enterprises have enormous potential to bring financially sustainable, market-based approaches to help achieve national goals and the SDGs,” the ADB report said.

However, no targeted public sector support is available to social enterprises beyond what is available to regular businesses or MSMEs, it added.

“Our good reputation in the SE (social enterprise) sector and efforts to expand our reach in terms of linkages with both public and private sectors are now in place,” Mr. Salonga said on mobilizing stakeholders to improve capacity-cooperation building and resource generation endeavors for the sector.

Among other programs, the MoU will leverage the LSEED Center’s committee membership in the MSME Development (MSMED) Council under the management and labor capacities since 2017, alongside ACSEnt’s National Social Enterprise Conference as a national platform to discuss important developments.

“We are currently co-leading a social enterprise profiling effort nationwide to update the number spread impact and models of social enterprise segments,” Mr. Salonga said.

The LSEED Center is an active member of the Poverty Reduction through Social Entrepreneurship (PRESENT) Coalition, which helps government agencies develop responsive SE programs and policies at both the national and local levels.

“No institution can do it alone,” said Maria Luz C. Vilches, vice-president for higher education at ADMU.

“This is a very good opportunity for our resources, strengths, and expertise to come together.” — Miguel Hanz L. Antivola

Huawei’s new advanced chip breakthrough likely to trigger closer US scrutiny — analysts

REUTERS

SHENZHEN, China/SAN FRANCISCO, California — Huawei Technologies’ breakthrough in making an advanced chip underscores China’s determination and capacity for fighting back against US sanctions, but the efforts are likely very costly and could prompt Washington to tighten curbs, analysts said.

Huawei unexpectedly unveiled the latest Mate 60 Pro smartphone last week during US Commerce Secretary Gina Raimondo’s visit in China, as the government readies a new $40-billion investment fund to bolster its developing chip sector.

The Mate 60Pro is powered by its proprietary chip Kirin 9000s and manufactured by the country’s top contract chipmaker SMIC using an advanced 7 nanometer (nm) technology, according to a teardown by Ottawa-headquartered TechInsights.

Its findings and claims by early users about the phone’s powerful performance indicate China is making some headway into developing high-end chips, even as Washington has over the recent years ramped up sanctions to cut its access to advanced chipmaking tools.

It “demonstrates the technical progress China’s semiconductor industry has been able to make without EUV tools. The difficulty of this achievement also shows the resilience of the country’s chip technological ability,” TechInsights analyst Dan Hutcheson said.

EUV refers to extreme ultraviolet lithography and is used to make 7 nm or more advanced chips.

“At the same time, it is a great geopolitical challenge to the countries who have sought to restrict its access to critical manufacturing technologies. The result may likely be even greater restrictions than what exist today.”

Jefferies analysts said TechInsights’ findings could trigger a probe from the US Commerce Department’s Bureau of Industry and Security, create more debate in the US about the effectiveness of sanctions and prompt the Congress to include even harsher tech sanctions in a competition bill it is preparing against China.

“Overall the US-China tech war is likely to escalate,” they said in a note.

A US Department of Commerce representative did not immediately reply to a request for comment on Tuesday morning.

Huawei declined to comment. SMIC and China’s State Council, which handles press queries on behalf of the Chinese government, did not immediately respond to requests for comments.

LIMITED ACHIEVEMENT
The most advanced chip SMIC had previously been known for making was 14 nm, as it was barred by Washington in late 2020 from obtaining an EUV machine from Dutch firm ASML. 

But TechInsights last year said it believed SMIC had managed to produce 7-nm chips by tweaking simpler DUV machines it could still purchase freely from ASML.

Some analysts including Jefferies’ said there was also a possibility Huawei had purchased the tech and equipment from SMIC to make the chip rather than doing it in collaboration.

Whoever is making the chip, Tilly Zhang, an analyst at Gavekal Dragonomics, downplayed the success, citing a low yield rate which reduces the number of useable chips from each wafer and raises costs, and new export controls imposed by the Netherlands that will limit SMIC’s access to more immersion DUV machine.

“They have just demonstrated that they are willing to accept much higher costs than are normally considered worthwhile… It is only the combination of Huawei’s own large financial resources and generous government subsidies that could allow it to sell phones using these chips at normal market prices,” Ms. Zhang said.

Reuters reported on Tuesday that China is set to launch a new state-backed investment fund that aims to raise about $40 billion for its chip sector, as the country ramps up efforts to catch up with the US and other rivals.

Some research firms forecast SMIC’s 7-nm process has an yield rate below 50%, versus the industry norm of 90% or more, and it would limit shipments to around 2-4 million chips, not enough for Huawei to regain its former smartphone market dominance.

Jefferies analysts reckon Huawei is preparing to ship 10 million units of the Mate 60 Pro, though it may struggle to support that quantity with China-made 7-nm chips.

In that case it could turn to 10-nm chips, but with an estimated 20% yield, which refers to the number of working chips on each silicon wafer, Jefferies said, it would be far below the 90% for most consumer devices.

“The (US) controls are imposing high costs for producing controlled technologies in China,” said Doug Fuller, a chip researcher at the Copenhagen Business School, adding that the Chinese government was likely footing the bill. — Reuters

Thrift bank sector expands despite growing challenges

THE THRIFT banking industry saw its assets and loans grow despite challenges brought by increasing digitalization in the financial sector.

“The past year has been marked by a positive trajectory in the thrift banking sector’s performance. Despite external challenges, the industry has managed to not only maintain its stability, but also achieve substantial growth across various crucial metrics,” Chamber of Thrift Banks (CTB) President Cecilio D. San Pedro said in a statement on Wednesday.

The sector’s assets grew by 5.3% to P943 billion at end-May from P895 billion in the same period last year.

This was attributed to deposit mobilization, which led to increased resources and overall stability, CTB said.

“Lending activity has also shown expansion, with core lending figures rising by 14.6%, reaching P616 billion from the previous year’s P537 billion,” CTB added.

“This growth is significant as it [shows] the sector’s commitment to serving its designated operational niches, which include SMEs (small and medium enterprises), housing, and consumers,” Mr. San Pedro said.

The sector’s non-performing loan ratio stood at 7.19% at end-May.

Meanwhile, deposit liabilities grew by 4.7% to P713 billion from P681 billion in the same period.

Total capital also surged by 12% to P151 billion from P135 billion.

As of end-2022, the industry’s capital adequacy ratio stood at 19.17%, above the minimum 10% requirement set by the Bangko Sentral ng Pilipinas.

Thrift banks posted growth despite challenges brought by the growing digitalization of the financial sector, CTB said. These challenges include cybersecurity risks, rising competition from financial technology firms, and evolving regulations, it added.

“Our member banks are poised for a range of growth opportunities. These prospects include the ongoing digital transformation in banking,” Mr. San Pedro said.

“Favorable regulatory changes can fuel innovation, while a strong commitment to data security and privacy will bolster customer trust,” he added.

He said member banks should focus on supporting SMEs, exploring sustainable finance and expansion, and boosting financial inclusion by designing accessible products for marginalized populations.

“We at the CTB can look forward to a future full of growth opportunities. By embracing these avenues and remaining adaptable to evolving customer needs and market trends, member banks can position themselves for success in an increasingly dynamic and competitive banking landscape,” he said. — AMCS

The Rolling Stones set to announce new album Hackney Diamonds

LONDON — The Rolling Stones are set to announce Hackney Diamonds, their first album of original music for 18 years.

The band, who formed more than six decades ago, heralded a “new album, new music, new era,” on X, formerly Twitter, with details to be revealed on Wednesday.

Mick Jagger, Keith Richards and Ronnie Wood — the surviving core of the band — will be interviewed by Jimmy Fallon in Hackney, east London, streamed online at 1330 GMT, according to a skit featuring the US chat show host answering a call on the “Stones Phone.”

Music fans have been awaiting the announcement since a cryptic advertisement appeared in a local newspaper last month, with references to some of the band’s biggest tracks and the name of the new album.

Clips of a new song, “Angry,” have also been posted on a website called don’tgetangrywithme.com. The album will be the first since the death of drummer Charlie Watts in August 2021. — Reuters

Alviera Country Club, Inc. to hold 2023 Annual Meeting of Stockholders on Sept. 29

 


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High inflation with high growth, the case of the Philippines, Indonesia and India

STORYSET-FREEPIK

One concept or theory in economics related to inflation and growth is the Philips Curve. It says that there is an inverse relationship between inflation and unemployment, so high inflation leads to low unemployment and, by extension, high growth because high growth leads to more job creation and hence, low unemployment.

This is not a rock-solid economic law or theory, unlike the law of supply and demand and price movement, and the law of diminishing marginal utility or revenue, with almost 100% accuracy and predictability. But somehow the Philips Curve theory seems to apply in the current situation of the Philippines, Indonesia, and India.

The Philippine Statistics Authority (PSA) reported last Wednesday that the country’s inflation rate is 5.3% — breaking six months streak of continued decline in inflation, which was only 4.7% last July.

I construct a table showing the inflation rate and growth rate of major economies in the world, focusing on countries with inflation of 4% or higher in 2023.

Among Group A (Asian countries), the Philippines has the highest average inflation rate this year with 6.6%, followed by India and Indonesia. The three countries are also in the top five of a list of the fastest growing countries among the top 50 largest economies in the world by GDP size, in the first half (H1) of 2023. The other two countries in the top five were the United Arab Emirates at 8.5%, and China at 5.4%.

Singapore has escaped the Philips Curve theory — it has high inflation with low growth. As did the Group B countries (Europe), especially the United Kingdom and Germany which had inflation rates of 9% and 7.1%, and growth of 0.3% and -0.2%, respectively.

Group C — the biggest economies of North and South America — also had high inflation but with modest growth, higher than Europe but lower than the Asians (see Table 1).

So, the high inflation in the Philippines, Indonesia, and India has not cooled down domestic consumption nor production by various sectors. Their huge populations have created dynamic domestic economies that continue to grow despite the worsening global economic environment.

While continued high inflation is bad news in the Philippines, high growth in H1 is good news. And from the PSA data, the main contributors to the 5.3% inflation in August were Alcoholic beverages and tobacco (10.1%), Food and non-alcoholic beverages (8.1%), and Restaurants and accommodation services (7.1%). This implies that many people are going out more: partying, drinking, smoking, and going to restaurants, hotels, and resorts. Which creates more jobs in the services sector.

Jobs creation should continue, be sustained and expanded. So long as people have jobs, they can adjust to rising prices.

The rise in inflation in August coincided with a slow rise in the global prices of oil as OPEC and Russia have cut their production and exports.

In Table 2 is a comparison of the global prices of some important commodities six months apart over the last two years. One can see that oil prices increased in August this year, but these are similar to levels from a year ago. Coal prices have increased slightly, but these are still low compared to prices in January to May this year, and previous months.

Rice prices are not rising fast as predicted by food crisis alarmists due to the current El Niño season and rice export ban by India. Current rice prices are similar to those of a year ago. Corn and wheat prices now are lower than the past two years (see Table 2).

So we should not entertain the alarmist narrative of further rising inflation. Prices are still in their natural modest fluctuation, not on a severe upward or continuously rising trend.

The government can help by cutting food imports tariffs and revive free trade policy especially in food. And the public should continue to do more productive work and be less alarmist, and lobby less for additional food and cash subsidies. If we want cheaper food and other commodities, we should expand food production, move towards more corporate farming and land consolidation with economies of scale. More political accommodations via subsidies that will require more taxation and borrowings will only worsen, not improve, the high inflation problem.

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers

minimalgovernment@gmail.com

No comment

VOLODYMYR HRYSHCHENKO-UNSPLASH

IN the corporate setting, especially for listed companies, rules on discussing issues can require recusals (excusing oneself from giving any comment) as when the matter at hand involves a possible conflict of interest. The party with a pecuniary stake on an item on the agenda may even opt to leave the room to allow a more freewheeling discussion, without the distraction of body language, say a glowering look at opponents to a proposal under consideration. (Did you consider my company’s property as a site for the new head office?)

The effort to maintain an arm’s-length detachment in the evaluation of an item that involves a conflicted party, who may have stepped out of a board meeting, does not always succeed. There are minutes of the meeting to show how the votes went. The recusing party is bound to find out who the naysayers were and may exact his revenge later — this has nothing to do with your violent opposition to a proposal three years ago.

In other fora, say in the board meeting of a managed fund, discussions on the effect of the downgrading of the credit rating of the number one economy, the forecasted exchange rate by yearend, and the favored stocks in the market are reserved for designated experts from research or gray hairs around the table. A revered one slumped on his chair (Is he dozing off?) may be tapped and given the microphone to provide an opinion on China’s GDP prospects after the pandemic. Everybody is expected to pay close attention as the wisdom pours forth softly to the receptive ears around the table — the aging population is likely to worsen the profile of the labor force.

Withholding comment is best done voluntarily. There should be no need for someone to interject rudely — you’re full of brown matter. However, for a designated moderator with guests around the table some order must be imposed in soliciting comments. This panel format is now used for live conferences with a host and selected “reactors” (nothing nuclear) discussing a particular topic.

The host (even females are seldom referred to as “hostesses”) tries to go around the table and ensure that all panelists are given a chance to pontificate. It is considered bad form to have one guest brooding in silence with only an audible shifting in the chair to express his ennui. The realization that one panelist has yet to speak up puts the host in a mild panic, as she scrambles to ask a question for “our youngest guest in the panel” (somebody who shouldn’t be here and has no gravitas to speak of) — do farmers feel the benefits of the country’s lower inflation rate? Short answer: No, ma’am. (Let’s take a short break for some announcements.)

Prodding guests that have long pauses between words and sentences (called dead air in TV parlance) to hurry up smacks of discourtesy especially when cutting off icons still clearing their throats. This can also invite social media attacks as a bad case of ageism.

Withholding comment is not easy, especially when one has something to contribute on a topic, sometimes an informed and objective opinion. Even here one needs a moderator to call out the expert to give his comments. (And now for some adult perspective on this topic.)

Still, even an acknowledged expert on an arcane topic like artificial intelligence may opt to clam up. This is to avoid pontificating and giving definitions that are taken for granted in this person’s circle — no ma’am, “natural intelligence” is not the opposite of “artificial intelligence.” Jumping into a conversation where the expertise is not evenly distributed can smack of condescension by someone just trying to correct misconceptions on the topic under discussion.

In more formal fora, even the parliamentary rules can seem too liberal. The highest level of adversarial discussion can limit one’s role in a legislative proceeding. Non-participation can take the form of manifesting personal hygiene rituals like combing out the lice in one’s moustache, while staring in space.

Active participation in this setting can even be more disconcerting.

Rambling on about the public debt’s solution to be the increase in population to reduce the per capita statistic may not even be fit for casual conversation. To see such displays of ignorance as part of TV news in a senate hearing may make one crave for silence… and a pining for the good old days of parliamentary brilliance.

 

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com

Sikorsky taps firm for Black Hawk helicopters in PHL

AIRCRAFT manufacturer Sikorsky has signed an agreement with Philippine firm Asian Aerospace Corp., making the latter the only original equipment manufacturer (OEM)-authorized reseller of spare parts and repair services for Black Hawk helicopters in the country.

“Sikorsky has partnered with Asian Aerospace to bid on public tenders, leveraging their local expertise to navigate the Philippine procurement processes quickly and efficiently. This will put OEM-approved, high-quality parts in the hands of the customers to support their rapidly growing fleet,” Sikorsky Global Sustainment Director Felipe Benvegnu said in a statement on Wednesday. 

“Sikorsky is establishing scalable strategies to support the sustainment needs of the growing fleet, and Asian Aerospace is a key component to that strategy,” he added.

The Philippine Air Force currently has 15 S-70i Black Hawk helicopters and is set to take delivery of 32 additional units over the next three years, making it the largest operator of the model in the world.

“We’re excited to partner with Sikorsky to deliver authorized parts and high-quality repair services for our Black Hawk customers here in the Philippines. This alliance ensures timely and dedicated support to the largest S-70i Black Hawk fleet in the world,” Asian Aerospace Executive Vice-President Peter Angelo Rodriguez said.   

The S-70 Black Hawk is manufactured at Lockheed Martin’s PZL Mielec facility in Poland. The helicopter is a utility aircraft worldwide, featuring unmatched multi-mission versatility and military-grade airworthiness capable of operating in extreme weather conditions, day or night.

Sikorsky is under US-based Lockheed Martin, which is a global security and aerospace company that has about 116,000 employees worldwide. It is engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products and services.

Based on its website, Asian Aerospace has business interests in aircraft charters, aircraft service, aircraft distributorships, fixed-based operations, and aerospace and ground support equipment. — Revin Mikhael D. Ochave