Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 2912

Kings coach Mike Brown fined $50K for criticizing officials

THE NBA fined Sacramento Kings coach Mike Brown $50,000 on Tuesday for criticism of referees during and after the team’s most recent game.

Specifically, Brown entered the court of play while yelling at referee Intae Hwang, leading to the coach’s ejection Sunday in a 143-142 overtime loss at the Milwaukee Bucks.

Brown then used a laptop during his postgame press conference to point out multiple calls he disagreed with.

“The referees are human, and they’re going to make mistakes, but you just hope that there’s some sort of consistency and there’s some sort of communication between the refs,” Brown said. “The refs (Sunday), they were great, they communicated with me all night. But in terms of consistency, you guys saw it right here. In my opinion, the consistency wasn’t here (Sunday).”

The NBA’s news release described Brown’s actions as “aggressively pursuing a game official during live play, and … publicly criticizing the officiating.”

In 2012, when he coached the Los Angeles Lakers, Brown was suspended one game without pay and fined $25,000 for making contact with an official. — Reuters

Smart maintains fastest download speed — Ookla

FREEPIK

By Miguel Hanz L. Antivola, Reporter

Smart Communications, Inc., the wireless unit of PLDT Inc., posted the fastest median download speed of 37.64 megabits per second (Mbps) in the fourth quarter of 2023, maintaining its lead among mobile operators, according to global network testing firm Ookla.

In its fourth quarter mobile performance report for the Philippines released on Wednesday, Ookla said Ayala-led Globe Telecom, Inc. had a median download speed of 26.44 Mbps, followed by DITO Telecommunity Corp. with 19.74 Mbps.

Out of the three operators, Smart delivered a steady rise in median download speed throughout last year, up from 35.56 Mbps in the third quarter, 35.39 Mbps in the second quarter, and 33.39 Mbps in the first quarter.

For major cell phone manufacturers in the fourth quarter, devices from Apple recorded the fastest median download speed with 51.19 Mbps.

It was followed by Samsung (37.76 Mbps), Xiaomi (30.66 Mbps), Huawei (19.98 Mbps), and Infinix (18.90 Mbps).

However, in terms of median upload speed, Infinix topped the list with 7.49 Mbps, followed by Samsung (7.40 Mbps), Xiaomi (7.34 Mbps), Apple (7.13 Mbps), and Huawei (6.05 Mbps).

In December last year, the Philippines posted a median download speed of 28.12 Mbps and upload speed of 6.89 Mbps.

Ookla released 52 new market analyses for the fourth quarter, with insights from its Speedtest Intelligence platform.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

China’s Q4 GDP shows a patchy recovery, raises case for stimulus

A MAn rides a bike on a street in Shanghai, China, Oct. 13, 2022. — REUTERS

BEIJING — China’s economy grew slightly slower than expected in the fourth quarter (Q4), with a deepening property crisis, mounting deflationary pressures and weak demand reinforcing expectations that Beijing will have to roll out more stimulus measures soon.

Confounding most analysts’ expectations, the world’s second-largest economy has struggled to mount a strong and sustainable post-COVID pandemic bounce, burdened by the protracted real estate slump, weak consumer and business confidence, and mounting local government debts.

Gross domestic product (GDP) grew 5.2% in October-December from a year earlier, data from the National Bureau of Statistics (NBS) data showed on Wednesday, quickening from 4.9% in the third quarter but missing a 5.3% forecast in a Reuters poll.

The pace was solid enough to ensure Beijing met its annual growth target of around 5%, but analysts said the recovery remains shaky and jump-starting activity in 2024 could be a lot more challenging.

“The recovery from COVID — disappointing as it was — is over,” according to China Beige Book International’s latest survey released on Wednesday.

“Any true acceleration (this year) will require either a major global upside surprise or more active government policy.”

For the full-year 2023, the economy grew 5.2%, partly helped by the previous year’s low-base effect which was marked by COVID-19 lockdowns. Analysts had forecast 5.2% growth.

Highlighting some loss of momentum late in the year, on a quarter-by-quarter basis GDP grew 1.0% in October-December, slowing from a revised 1.5% gain in the previous quarter.

Policy insiders expect Beijing will maintain a similar growth target of around 5% for this year.

The head of NBS, Kang Yi, said at a press conference in Beijing that China’s 2023 growth was “hard won”, but added the economy faces a complex external environment and insufficient demand in 2024.

Stocks in China, already near five-year lows, fell after the disappointing data as did shares in Hong Kong, while the yuan eased. The currency has come under fresh pressure recently as market expectations grow that policymakers will have to commit soon to more interest rate cuts and other support measures.

“At present, our country’s government debt level and inflation rate are both low, and the policy toolbox is constantly being enriched,” Mr. Kang said. “Fiscal, monetary and other policies have relatively large room for maneuvering, and there are conditions and space for intensifying the implementation of macro policies.”

SHAKY RECOVERY
December activity indicators released along with the GDP data showed factory output growth quickened at the fastest pace since February 2022, partly driven by stronger growth in automobile production, but retail sales grew at the slowest pace since September and investment growth remained tepid.

Data on the property sector, once a key driver of the economy, was far more grim.

China’s December new home prices fell at the fastest pace in nearly nine years, marking the sixth straight month of declines, NBS data showed.

Property sales by floor area fell 8.5% for the year while new construction starts plunged 20.4%. “I think markets were disappointed they didn’t cut interest rates on Monday, but it seems they are thinking about more targeted measures,” said Woei Chen Ho, economist at UOB. “The property issues are not fixed by broad-based rate cuts.”

On Monday, the central bank left the medium-term policy rate unchanged, defying market expectations for a cut as pressure on the yuan currency continued to limit the scope of monetary easing.

“The piecemeal rollout of support from mid-year has done little to turn things around. It’s clear that China’s economy needs extra stimulus,” said Harry Murphy Cruise, economist at Moody’s Analytics.

“Direct support for households could be the crowbar needed to pry open wallets, but the prospect of such support has been a nonstarter for officials in recent years. Instead, monetary easing and new debt issuance for infrastructure, energy and manufacturing projects look more likely.”

POPULATION FALLS AGAIN
As businesses remained wary of adding workers in the face of many uncertainties ahead, the nationwide survey-based jobless rate increased to 5.1% in December from November’s 5.0%, NBS data showed.

NBS also resumed the publication of youth unemployment data, which it had suspended for five months. The December survey-based jobless rate for 16-24 years olds, excluding college students, was at 14.9%, compared with a record high of 21.3% in June.

Recent data suggested the economy was starting 2024 on shaky footing, with persistent deflationary pressures and a slight pick-up in exports unlikely to kindle a quick turnaround in lackluster factory activity. December bank lending was also weak. 

“While we still anticipate some near-term boost from policy easing, this is unlikely to prevent a renewed slowdown later this year,” said Julian Evans-Pritchard, head of China Economics at Capital Economics.

“Although the government met its 2023 GDP growth target of ‘around 5.0%’, achieving the same pace of expansion in 2024 will prove a lot more challenging.”

Adding to concerns over China’s longer-term growth prospects, the country’s population fell for a second consecutive year in 2023. The total number of people in China dropped by 2.08 million to 1.409 billion in 2023, a faster decline than in 2022. — Reuters

Norway wealth fund CEO at Davos sees slow investment returns in 2024

ANDREY ANDREYEV-UNSPLASH

DAVOS, Switzerland — The chief executive officer (CEO) of Norway’s $1.5-trillion sovereign wealth fund, the world’s largest, told Reuters on Tuesday that return on its investments would likely be “slow” in 2024 due to high interest rates, persistent inflation and geopolitical risk.

The fund invests the Norwegian state’s revenues from oil and gas production in equities, bonds, property and renewable projects abroad.

It is the world’s largest sovereign wealth fund, holding stakes in more than 9,200 companies globally and owning 1.5% of all listed stocks.

“I think It’s going to be a very slow year. At best, pedestrian, because I think (interest) rates will be slow to get down,” Nicolai Tangen said in an interview during the World Economic Forum (WEF) annual meeting.

Inflation would remain persistent and come down “more slowly than I think is generally expected,” he said, citing higher freight rates for shipping, continuing high prices for fuel for transport and, “perhaps more importantly,” higher wages.

“Wage demand is pretty high across a lot of geographies, which means that inflation is really … sticky,” he said.

Mr. Tangen also cited the general geopolitical situation, with the continuing war in Ukraine and the war in Gaza, and “a lot of elections in many parts of the world” as a risk factor for the fund’s investments.

“We have geopolitical uncertainty in many places, that’s well known. And we have, you know, (company) valuations which are really relatively demanding,” he said.

“So I don’t see a lot of good news here.” — Reuters

Canada’s planned curbs on overseas student work may hurt tight job market

A Canadian dollar coin is pictured in this illustration picture taken in Toronto, Jan. 23, 2015. — REUTERS

TORONTO — Canada’s planned curbs on work by international students could spark shortages of temporary workers in food services and retail industries as employers are wrestling with a tight labor market and wage inflation in some pockets of the economy.

Last month, Canadian Immigration Minister Marc Miller outlined measures, including slashing the number of allowable work hours, to address bottlenecks created by a surge in international students, who have been blamed for rental shortages.

Canadians are facing increased challenges in securing affordable housing as rents climb nationwide — rising 7.7% in December from a year earlier, according to Statscan.

Canada is planning additional measures to reduce the number of international students coming to Canada, including possibly a cap, and will introduce them during the first half of this year, Mr. Miller told Reuters in an interview on Monday.

Canada has emerged as a popular destination for international students since it is relatively easy to obtain work permits after finishing courses. International students are also a cash cow for universities as they bring in about C$22 billion ($16.4 billion) annually, and the government is facing push back from student associations and advocates over its new proposals.

“We need to have international students coming in. It’s a key group working in the industry for us,” said Maximilien Roy, vice president of the industry lobby group Restaurant Canada, from Quebec Province.

Restaurants across Canada are grappling with labor shortages with nearly 100,000 vacancies, and international students made up 4.6% of 1.1 million workers in the food service industry in 2023, Mr. Roy added.

The government plans to limit international students’ weekly work hours to 20 from 40 hours starting in April. Mr. Miller said the measures are necessary to improve the overall quality of education and the integrity of the immigration system.

“The main purpose of international students to be in Canada is to study,” Mr. Miller said while proposing the new measures.

Canada’s international student intake is expected to touch a record 900,000 for 2023, about three times that of a decade ago, according to government data. That has provided a plentiful supply of temporary workers for employers and helped keep overall costs in check.

FINANCIAL INDEPENDENCE
Reuters spoke to international students, labor experts, restaurant workers and officials from the food and retail industries, who said the disadvantages of the plan outweighed its benefits.

“I came to Canada because I wanted to be independent myself and no one should pay for my tuition fees,” said Bhavjeet Singh Kalra, 21, an undergraduate student seeking a public relations degree at Humber College in Ontario, a sentiment shared by many international students.

Mr. Kalra worked 40 hours a week during the summer break, which helped him fund his tuition after his parents covered the initial deposit of C$10,000 ($7,420) for the study permit application and the first year’s tuition fees.

Many students expressed concern that the new rules will expose them to exploitation, as some will inevitably find themselves working beyond the specified hours without adequate protections.

Pat Chaisang, a former international student from Thailand who founded Isempower, a job-search platform for overseas students, said cutting the working hours will limit students’ ability to gain valuable work experience.

“Providing a solid work opportunity that match their area of study to help them transition into the workforce,” she said.

A lack of temporary workers also risks pushing up wage growth, which has been a concern for the central bank in its fight against inflation.

Canada’s wage growth accelerated to an annual rate of 5.7% in December from 5.0% in November. Employers struggled to fill nearly 700,000 jobs in October last year, according to StatsCan data.

Canadian Alliance of Student Association said barriers rather than work hours should be reduced for international students. In a statement, the group said that would enhance their educational experience, and “will ensure that Canada has the skilled workers we need for a thriving economy.” — Reuters

France to reform parental leave after births hit postwar low

A PEDESTRIAN and her dog stand in front of a window display at the Printemps department store in Paris, France, Nov. 17, 2020. — REUTERS

PARIS — French President Emmanuel Macron promised on Tuesday to overhaul parental leave so it pays better after France saw the lowest number of births since World War II last year, in a blow to its traditionally strong demographic profile.

France registered 678,000 births last year, representing a decrease of 7% from 2022 and down 20% since peaking in 2020, INSEE said in its annual census report.

The country has for decades been an outlier compared to other European countries, avoiding a collapse in birth rates as seen in Germany, Italy and Spain.

Demographers have traditionally put this down to France’s generous health and childcare system as well as tax breaks and other benefits for having children, especially three or more.

That has helped soften the impact of an aging population while contributing to the country’s long-term growth prospects, which economists say are generally determined by demographics, productivity gains and labor force participation.

“France will only be stronger if it revives the birth rate,” Mr. Macron said during a wide-ranging news conference.

“A new, better paid parental leave will allow both parents to be with their children for six months if they want,” he added.

In addition to basic maternity leave, French parents can currently take additional parental leave for one year with the possibly of renewing twice.

However, it only pays slightly more than 400 euros ($435) per month, which Mr. Macron said was a source of anxiety for some parents. He said it also cut mothers off from the labor market too long.

INSEE said the average number of children per mother fell last year to a three-decade low of 1.68 from 1.79 in 2022. In 2021, France had the highest birth rate in the European Union along with the Czech Republic at 1.83, the last year for which comparative figures are available.

Not only is the 2023 figure below the 2.2 generally considered to be necessary to maintain population levels in developed countries, it is also below the 1.8 births estimate that underpinned a deeply contested 2023 retirement reform.

That could mean that if the birth rate stays at 2023 levels the reform will not reduce the pension deficit as planned.

However, a recovery in the birth rate in the coming years is possible as people born in 2000-2010 — a period of high births — themselves begin to have children, researchers at the Institut National d’Etudes Demographiques said in a note.

While people are having fewer children, pro-family Unis pour les Familles association says that the decline does not mean people want fewer children but rather conditions are not necessarily good. 

In an Opinionway poll of 11,000 people for the association, two-thirds who did not have children said that they wanted to while one out of five parents said they would have liked more children.

The most common reasons people gave for not having more children were concerns about the economic, social and climatic outlook, cited by 30% of those polled. Some 28% said raising children cost too much.

The successive crises over the COVID-19 outbreak, surging energy prices and record inflation have taken a heavy toll on household confidence, which has struggled to recover from record lows reached in mid 2022, according to INSEE’s monthly survey. — Reuters

NCC Group Manila to build local talent for cybersecurity

PIXABAY

By Miguel Hanz L. Antivola, Reporter

NCC Group, a global cybersecurity advisory company from the United Kingdom, has opened an office in the Philippines in a bid to develop local technology talent and enhance its global capacity for clients.

“Our role is to build the [cybersecurity] talent that is able to support the changing environment we’re all operating in,” Mike Maddison, NCC Group global chief executive officer, told reporters during its Manila office launch on Wednesday.

“It has grown as an attractive career path for people now, especially with the scale of the skills gap on a global basis in cybersecurity capability,” he noted.

“Being able to tap that in the Philippines is incredibly exciting,” he added on Manila being the company’s second office location in Southeast Asia after Singapore.

The cybersecurity workforce gap in the Asia Pacific region rose to about 2.7 million, up by 23.4% from 2022’s 2.2 million, according to a study by non-profit ISC2. Globally, the shortfall has risen to about 4 million, with a 12.6% year on year increase.

“Organizations may have a number of cybersecurity workers, but if those workers all lack certain critical skills, that surplus of headcount can be completely negated,” the study said.

It also noted the biggest skills gap in areas deemed important for mitigation, such as cloud security (35%), artificial intelligence (AI) or machine learning (32%), zero trust (29%), and penetration testing (27%).

The Fortinet 2023 global cybersecurity skills gap report showed 86% of IT and cybersecurity decision makers in the Philippines and Malaysia have agreed that the skills shortage creates more cyber risks for their organizations.

Over half have admitted struggling to recruit and retain qualified professionals for their security team, it added.

Additionally, a report by Palo Alto Networks said the Philippines has been hit the hardest by cyberattacks among its Southeast Asian peers this year.

NCC Group’s Mr. Maddison noted the public, intellectual property, and financial service sectors are those expected to see the most number of cybersecurity challenges.

“Those heavily regulated sectors with sensitive information,” he said.

Saira Acuna, Philippine country director at NCC Group said the Manila office has so far hired 60 talents, with an open goal of building a Filipino community of cyber leaders through its junior and comprehensive on-the-job training programs.

It has started forging partnerships with the public sector through the Justice department and the IT and Business Process Association of the Philippines.

It is also eyeing engagements with educational institutions to help share curricula and sponsor programs for the creation of job-ready cybersecurity talent.

“I hope Filipinos will recognize this opportunity to be part of a burgeoning industry,” Ms. Acuna said on heeding the call for citizens to grow a career in cybersecurity.

Philippines bans poultry imports from California, Ohio to prevent bird flu spread

MANILA — The Philippines’ farm ministry said on Wednesday it has banned poultry imports from California and Ohio in the United States because of several outbreaks there of highly pathogenic avian influenza.

The ban, which aims to protect the health of the Philippines’ poultry population, covers imports of domesticated and wild birds, including poultry meat and eggs, the ministry said in a statement.

All shipments coming from California and Ohio that are already in transit, loaded, or accepted at Philippine ports before January 15 will be allowed entry if they were slaughtered two weeks before the outbreak began, it added.

In 2023, the Philippines imported 166,356 tons of poultry products worth $175.8 million from the United States, which is the second-largest supplier to the Southeast Asian nation accounting for 40% of arrivals, government data showed.

Earlier this month, the Philippines halted imports of poultry products from Belgium and France, also because of a bird flu outbreak.

Bird flu is carried by migrating wild birds and can then be transmitted between farms. It has ravaged flocks around the world in recent years, disrupting supply and pushing up food prices. — Reuters

Malaysia to review migrant labor deals to stamp out exploitation

KUALA LUMPUR— Malaysia will review bilateral agreements with 15 nations from which it sources laborers in a bid to address exploitative practices and manpower imbalances that have left thousands of migrant workers stranded without jobs, officials said.

Since last year, thousands of migrants, mostly from Bangladesh and Nepal, have been left in limbo after arriving in Malaysia, where they were told that jobs promised to them in exchange for steep recruitment fees were no longer available.

The plight of the migrants coincided with concerns over workplace abuses in Malaysia, with several companies facing US bans over the use of forced labor in recent years. Many laborers said they had not been paid any wages.

Speaking to reporters late on Tuesday, the labor and home affairs ministers said the distribution of laborers was uneven across the economy, prompting a need to review the bilateral agreements.

They said Malaysia still had a shortage of workers in the agriculture and plantations sector, while quotas have been exceeded in other industries.

“We will revisit the agreements looking at various elements including fees, costs, contract conditions, health and so on,” Home Minister Saifuddin Nasution Ismail said, adding that the government would allow the transfer of worker quotas across sectors.

Workers from Indonesia, Bangladesh and Nepal account for over 70% of Malaysia’s migrant labor, with the remainder coming from countries including India, Vietnam, Pakistan, and Thailand.

Human Resources Minister Steven Sim said authorities had completed investigations into five firms involved in hiring hundreds of workers who later found themselves without jobs.

He said employers who hired such workers must pay them wages even though they do not have jobs, adding that companies and individuals who violate the law will be barred from hiring migrant laborers.

Sim said 751 Bangladesh migrant workers had filed cases with the labor department to claim unpaid wages, involving a total of 2.2 million ringgit ($467,687). — Reuters

China’s population drops for 2nd year, raises long-term growth concerns

JAVIER QUIROGA-UNSPLASH

BEIJING — China’s population fell for a second consecutive year in 2023, as a record low birth rate and a wave of COVID-19 deaths when strict lockdowns ended accelerated a downturn that will have profound long-term effects on the economy’s growth potential.

The National Bureau of Statistics said the total number of people in China dropped by 2.08 million, or 0.15%, to 1.409 billion in 2023.

That was well above the population decline of 850,000 in 2022, which had been the first since 1961 during the Great Famine of the Mao Zedong era.

China experienced a dramatic nationwide COVID surge early last year after three years of tight screening and quarantine measures kept the virus largely contained until authorities abruptly lifted curbs in December 2022.

Total deaths last year rose 6.6% to 11.1 million, with the death rate reaching the highest level since 1974 during the Cultural Revolution.

New births fell 5.7% to 9.02 million and the birth rate was a record low 6.39 births per 1,000 people, down from a rate of 6.77 births in 2022.

Births in the country have been plummeting for decades as a result of the one-child policy implemented from 1980 to 2015 and its rapid urbanisation during that period. As with earlier economic booms in Japan and South Korea, large populations moved from China’s rural farms into cities, where having children is more expensive.

Japan’s birth rate was 6.3 per 1,000 people in 2022, while South Korea’s rate was 4.9.

Further denting appetite for baby-making in China in 2023, youth unemployment hit record highs, wages for many white-collar workers fell, and a crisis in the property sector, where more than two-thirds of household wealth is stored, intensified.

The fresh data adds to concerns that the world’s No.2 economy’s growth prospects are diminishing due to fewer workers and consumers, while the rising costs of elderly care and retirement benefits put more strain on indebted local governments.

India surpassed China as the world’s most populous nation last year, according to estimates by the United Nations, fueling more debate over the merits of relocating some China-based supply chains to other markets, especially as geopolitical tensions rise between Beijing and Washington.

Long-term, UN experts see China’s population shrinking by 109 million by 2050, more than triple the decline of their previous forecast in 2019.

POLICY ISSUES

China’s 2023 rate of 7.87 deaths per 1,000 people was higher than a rate of 7.37 deaths in 2022.

The country’s retirement-age population, aged 60 and over, is expected to increase to more than 400 million by 2035 – more than the entire population of the United States – from about 280 million people currently.

The state-run Chinese Academy of Sciences sees the pension system running out of money by 2035.

High childcare and education costs put many Chinese couples off having children, while uncertainty in the job market discourages women from pausing their careers. Gender discrimination and traditional expectations that women assume the caretaker role in the family exacerbate the issue, demographers say.

President Xi Jinping said last year that women should tell “good family tradition stories,” adding it was necessary to “actively cultivate a new culture of marriage and childbearing,” which he linked to national development.

Local governments have announced various measures to encourage childbirth including tax deductions, longer maternity leave and housing subsidies.

But many of the policies have not been implemented due to insufficient funding and a lack of motivation by local governments, said a Beijing policy institute, urging a unified nationwide family subsidy scheme instead.

China may get some relief next year from a pick-up in marriages in 2023, when the COVID backlog cleared. Marriages are a leading indicator for birth rates in China, where most single women cannot access child-raising benefits. — Reuters

High rates to weigh on economy till ’25

Economic managers are targeting 6.5-7.5% gross domestic product growth for the Philippines this year. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Keisha B. Ta-asan and Luisa Maria Jacinta C. Jocson, Reporters

THE PHILIPPINES’ gross domestic product (GDP) will likely fall short of the government growth targets through 2025 as the impact of multi-year high interest rates may continue to weigh on the economy, the Bangko Sentral ng Pilipinas (BSP) said.   

In the highlights of the Monetary Board meeting in December, the central bank said it has raised its growth forecasts through 2025, reflecting the faster-than-expected GDP outturn in the third quarter of 2023.   

“However, GDP growth could settle below the Development Budget Coordination Committee’s (DBCC) target from 2023 to 2025 as subdued global economic conditions and the lagged impact of the policy rate adjustments weigh on economic activity,” the BSP said.   

At its December meeting, the DBCC maintained its growth target at 6-7% for 2023 amid robust domestic demand. The GDP growth goal range for 2024 was narrowed to 6.5-7.5% from 6.5-8% previously, while the 6.5-8% goal from 2025 to 2028 was retained.

The Philippine economy expanded by 5.9% in the third quarter of 2023, faster than the 4.3% growth in the previous quarter due to increased private and public spending. This brought the year-to-date GDP growth to 5.5%.

Despite the below-target forecasts, the BSP said the Philippines’ growth prospects remained firm amid easing price pressures and stable labor market conditions.

“Labor market conditions have remained generally stable compared to the previous month, with the higher share of wage and salaried workers and the decline in underemployment signaling an improvement in employment quality,” it said.

The country’s unemployment rate dropped to 4.2% in October, which translated to 2.09 million jobless Filipinos during the month, 150,000 lower than 2.24 million in the same month last year.

For the first 10 months of 2023, the unemployment rate stood at 4.6%, which is below the 5.3-6.4% target for 2023 under the Philippine Development Plan.

“In addition, the sustained growth in vehicle sales in October likewise suggested that private consumption remained relatively firm despite tighter financial conditions,” the central bank added.   

New vehicle sales jumped by an annual 18.6% to 38,128 units in October from 32,146 units in the same month a year ago.

The BSP said improving labor market quality and robust domestic demand will mitigate the impact of higher interest rates and the El Niño weather conditions on economic activity.   

At its last policy meeting for 2023, the Monetary Board maintained its target reverse repurchase rate at a 16-year high of 6.5%. This was the second straight meeting that the BSP maintained key rates since its 25-basis-point (bp) off-cycle hike on Oct. 26, 2023.

The central bank raised borrowing costs by a total of 450 bps from May 2022 to October 2023 to tame inflation and quell inflationary expectations. 

The Philippine Institute for Development Studies (PIDS) said it sees GDP growth at 5.5-6% this year.

“Financial conditions have also not worsened (yet) as one might expect amid monetary tightening, with macro conditions set to further improve with declining inflation and some credit easing (this) year,” PIDS said in its latest Macroeconomic Outlook report.

However, the think tank’s forecast is faster than its 5.2% GDP growth projection for 2023.

“In line with previous expectations, monetary tightening and fiscal constraints due to a rising debt burden, and a generally ‘gloomy and uncertain’ outlook for the world economy, with many countries battling high inflation and experiencing a slowdown, has constrained consumer and government spending (last) year,” it added.

The think tank said other growth drivers this year would be the resilience of the service sector and a resurgence in construction amid improved business sentiment.

“Consumption may still support growth despite weak global economic prospects, given the steady flow of remittances from abroad; increased wages, which may partially offset lost purchasing power; and an improved jobs picture, with an increase in wage and salary employees,” it added.

Fourth-quarter and full-year 2023 GDP data are set to be released on Jan. 31.

HIGH INFLATION
The Monetary Board said there is still a need to keep the current monetary policy settings tight until inflation expectations are firmly anchored.

“In this regard, the Monetary Board continues to closely monitor the impact of previous monetary policy adjustments on inflation, inflation expectations, and overall economic activity,” the BSP said.   

“Should inflation risks further escalate, the Monetary Board stands ready to adjust monetary policy settings as necessary to steer inflation toward a path consistent with the BSP’s price stability mandate,” it said.   

Last month, the BSP lowered its risk-adjusted inflation forecast for 2023 to 6% (from 6.1% in November) and 4.2% (from 4.4%) for 2024. It kept its inflation forecast at 3.4% for 2025.   

The BSP maintained its average inflation baseline forecasts at 6% for 2023, 3.7% for 2024, and 3.2% for 2025.     

Risks to the inflation outlook are still on the upside over the near term, the BSP said, as transport fares may further increase given the pending fare hike petitions for jeepneys, taxis, and the train railway system.   

Electricity rates could increase this year as well following the Supreme Court decision in July 2022 to nullify the order issued by the Energy Regulatory Commission, that regulated the prices in the Wholesale Electricity Spot Market in November and December 2013, the BSP said.   

Other upside risks to inflation include higher global oil prices amid the conflict in the Middle East, larger-than-expected minimum wage hikes, and the possible spike in food prices due to supply constraints.   

Meanwhile, mean inflation forecasts of private sector analysts for 2024 and 2025 are within the 2-4% target range, according to a BSP survey.

In its survey of 25 external analysts between Dec. 5 and Dec. 10, the BSP said there were lower mean inflation forecasts for 2023 (at 6% in December from 6.1% in November) and for 2024 (at 3.9% from 4%).     

However, the mean inflation forecast for 2025 stood at 3.5%, a tad higher than 3.4% previously.   

The Monetary Board will meet again on Feb. 15, its first policy review for this year.

Meanwhile, PIDS expects inflation to settle within the central bank’s 2-4% target band this year.

However, it warned of several risks that could push food prices higher, such as  India’s export ban and the El Niño phenomenon.

The state weather bureau’s latest bulletin showed that the majority of global climate models suggest that El Niño will likely persist until May.

“Moreover, as previously mentioned, renewed geopolitical conflicts may lead to large volatilities in commodities prices, which could disturb the downward trend in global inflation,” PIDS added.

To ensure inflation does not spike, the think tank said that the government must “make use of every weapon in its arsenal” to tame prices.

“Particularly those that work through the supply side, such as easing import restrictions on agriculture products that may face shortages and instituting a better system for anticipating and addressing these shortages,” it said.

It also called on the central bank to employ “high-frequency monitoring and a calibrated response to price developments that carefully considers the nature of shocks, estimated pass-throughs, and policy lags to ensure that monetary decisions are always well-timed.”

PIDS also emphasized the need to have a “sound and credible” fiscal consolidation plan.

“Although our debt sustainability analysis generates still relatively benign results, and while the Philippine economy has been among the fastest growing in the region, it may be hard to generate the speed of growth needed to quickly climb out of debt, given narrower fiscal space and current weak macroeconomic prospects globally,” it said.

The government is aiming to bring down the debt-to-GDP ratio to below 60% by 2025 and the deficit-to-GDP ratio to 3% by 2028.

MAHARLIKA FUND
PIDS also noted that the Maharlika Investment Fund (MIF) must be managed efficiently amid tight fiscal space.

“With the country’s fiscal position still just recovering from the pandemic crisis, economic managers need to make sure that the establishment of the MIF will not draw from an already scarce state fund,” it said.

Investments made by the fund should also match the needs of national development, PIDS said.

“As what the government ideally strives for when crafting the public budget, the likelihood of turning a profit may be higher if investment decisions are kept free of political complexities and patronage. Fund success consequently hinges on finding ways to settle this conflict,” it added.

The country’s first sovereign wealth fund should also be able to attract new capital from multilaterals, other sovereign funds, large institutional investors, and private funds.

“In the end, success of the MIF will depend on whether it has, in fact, enhanced capital (and use of capital), boosted infrastructure development, fostered FDI, and promoted economic growth,” it said.

“All while also turning in a profit, or otherwise proving itself viable. It will be — and should be — highly monitored by the public, as these funds are now beyond the usual (budgetary) controls, with strategic decisions affecting the entire country now largely up to the board,” it added.

Marcos urged to harness economic reforms’ potential instead of ‘Cha-cha’ push

President Ferdinand R. Marcos, Jr.’s allies in Congress are again pushing for “Cha-cha,” which is typically revived by lawmakers every year. — PHILIPPINE STAR/KRIZ JOHN ROSALES

By Kyle Aristophere T. Atienza, Reporter

PHILIPPINE President Ferdinand R. Marcos, Jr. should work on food security, boost the quality of education and healthcare while improving governance to attract foreign investments instead of pushing for changes to the 1987 Constitution, which is a distraction, economists and legal experts said.

The Philippines already made amendments to its Commonwealth-era Public Service Act (PSA), limiting the definition of public utilities to allow full foreign ownership in key domestic sectors, Bernardo M. Villegas, one of the framers of the 1987 Constitution and professor emeritus at University of Asia and the Pacific, said in an e-mail.

“The amendment of the Public Service Act has already opened the most vital sectors in infrastructure (airports, railways, subways, tollways) to 100% foreign ownership,” he said, adding that full foreign ownership is also now allowed in the renewable energy sector.

The new PSA, signed by then-President Rodrigo R. Duterte in March 2022, also allows full foreign ownership in telecommunications and domestic shipping.

Mr. Villegas, who had supported moves to amend the Constitution before the passage of the amended PSA, noted that the remaining sectors not allowed for full foreign ownership such as education, media and advertising, are “not vital to high economic growth today.” 

The Philippines continues to limit land ownership to Filipino citizens and corporations that are at least 60% Filipino-owned as enshrined in the Constitution.

But Mr. Villegas said foreign investors who are considering large-scale agribusiness investments “do not need to own land.”

“They can lease the land long term as in the nucleus estate model of palm oil in Malaysia and Indonesia.”

Mr. Marcos’ allies in Congress are again pushing for Charter change (Cha-cha), which is typically revived by lawmakers every year.

The Philippine leader last month said efforts were underway to revisit the economic provisions of the 1987 Constitution and domestic laws as his administration seeks to make the country “an investment-friendly place.”

On Monday, Senate President Juan Miguel F. Zubiri said Mr. Marcos had asked the upper chamber to lead the review of the Constitution’s economic aspects, noting that the President views a supposed people’s initiative pushing for Cha-cha, which has been tainted with vote-buying allegations as “too divisive.”

“In this way, we can preserve our bicameral nature of legislation,” said Mr. Zubiri, who was previously cool on Cha-cha proposals.

The Senate president on Monday filed Resolution of Both Houses 6 proposing amendments to Articles 12, 14 and 16 of the charter.

Christian S. Monsod, who was also among the Charter’s framers, noted that the Philippine Development Plan for 2023 to 2028 didn’t even cite the need to amend the Charter to achieve the country’s economic goals and that Mr. Marcos has been able to secure investment pledges  — now worth over P700 billion — in his foreign trips without the condition from investors that the country needs to amend the Charter’s economic provisions.

Mr. Monsod, reacting to remarks that the Constitution “remains a hindrance” to FDIs, said the Charter never barred full foreign ownership in the manufacturing sector and noted that the domestic sector has not been a target of foreign investors due to issues not related to the constitution.

“Manufacturing companies in the country can be 100% foreign owned, so why didn’t they come?” he told ABS-CBN News Channel on Monday, citing investment concerns such as lack of public infrastructure.

Aside from the amended PSA, Mr. Monsod also cited a 2001 Electric Power Industry Reform law, which allows foreign ownership in electric generation, and a mining law that allows full foreign ownership in partnership with the government.

“Vietnam has already surpassed us in terms of manufacturing and agriculture, while Thailand has been reaping the benefits of its strong tourism campaign,” Emy Ruth S. Gianan, who teaches economics at the Polytechnic University of the Philippines, said in a Facebook Messenger chat, noting that ownership aspect is no longer the issue.

“There are already remedies made through legislation to open our economy for increased foreign investments. The PSA is a testament to that. Why are they not coming then?” she said.

“Not because of our ownership laws, but a confluence of various factors: for one, we need to upskill our labor force to effectively compete with our neighbors. Our supposed advantage as a strong English speaker is gradually overcome by tech-related skills and other specializations.”

‘VERY CONTROVERSIAL PROCESS’
Mr. Bernardo said going through a “very controversial process” of Cha-cha will just distract the country from addressing pressing economic and development issues.

“To attract more FDI (foreign direct investments), we have to focus on removing red tape, inability to enforce right-of-way in construction projects, corruption especially at the lower levels of the Public Works department and among local government officials — issues which have nothing to do with ownership,” he said.

“The most urgent tasks facing the President are food security, the quality of public education and health services and improving governance.”

For the January-to-October period last year, FDI net inflows declined by 17.5% to $6.533 billion, central bank data showed.

Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said the Constitution allows for varied legislative reforms that can boost foreign investments “while keeping its commitment to protecting the country’s interest.”

He cited the Retail Trade Liberalization Act, which allowed increased foreign participation in the domestic retail sector by lowering the minimum paid-up capital requirements for foreign retail enterprises.

“This move of changing the economic provisions of the Constitution is just another decoy for tampering with its political provisions,” he said.

Lawmakers including House Speaker Ferdinand Martin G. Romualdez, a cousin to Mr. Marcos, have been pitching Cha-cha as a way to boost FDI inflows into the Philippines, which slumped to the lowest level in over three years in September 2023.

“I propose that we think of amending the Constitution, which I admit is very imperfect, once our gross domestic product starts to grow at 8-10% and our poverty incidence is at a single-digit level (from its present 21%), which is the highest in East Asia,” Mr. Bernardo said.

Meanwhile, GlobalSource Partners Country Analyst Diwa C. Guinigundo said that simply amending the Constitution will not be able to address the country’s economic and political issues.

“True, as claimed by some legislators, it is within the prerogative of established democracies to change their fundamental laws to sustain their relevance to the changing times,” he said in a brief dated Jan. 15. “The issue in the Philippines is whether a constitutional amendment could address what sets back its politics and the economy.”

Mr. Guinigundo noted proposals to amend the form of government from presidential to parliamentary stands to benefit officials who are trying to avoid a national election.

“Running for parliamentary seats and gaining the support of majority of the members of parliament are easier routes to becoming head of the government than mounting a national election to win the presidency,” he added.

There have also been calls to amend the Constitution to extend term limits of incumbent elected officials.

“This is mostly frowned upon based on public reactions in the press and social media. Among others, this could be used to incentivize members of Congress who would sit as a constituent assembly to amend the Constitution based on some preconceived notion of Charter change,” Mr. Guinigundo added. — with Luisa Maria Jacinta C. Jocson

1...2,9112,9122,913...13,372Page 2,912 of 13,372
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube