Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 2940

Burger King must face lawsuit claiming its Whoppers are too small

A US JUDGE has rejected Burger King’s bid to dismiss a lawsuit claiming that it cheated hungry customers by making its Whopper sandwich appear larger than it actually is.

US District Judge Roy Altman in Miami said Burger King must defend against a claim that its depiction of Whoppers on in-store menu boards mislead reasonable customers, amounting to a breach of contract.

Customers in the proposed class action accused Burger King of portraying burgers with ingredients that “overflow over the bun,” making it appear the burgers are 35% larger and contain more than double the meat than the chain serves.

Burger King, a unit of Restaurant Brands International, countered that it wasn’t required to deliver burgers that look “exactly like the picture,” but the judge said it was up to jurors to “tell us what reasonable people think.”

In his decision made public on Friday, Mr. Altman also let the customers pursue negligence-based and unjust enrichment claims.

He dismissed claims based on TV and online ads, finding none in which Burger King promised a burger “size,” or patty weight, and failed to deliver it.

“The plaintiffs’ claims are false,” Burger King said in a statement on Tuesday. “The flame-grilled beef patties portrayed in our advertising are the same patties used in the millions of Whopper sandwiches we serve to guests nationwide.”

A lawyer for the plaintiffs was not immediately available for comment. Earlier efforts to mediate a settlement proved unsuccessful. 

McDonald’s and Wendy’s are defending against a similar lawsuit in the Brooklyn, New York federal court. The plaintiffs’ lawyer there on Monday cited Altman’s opinion to justify letting that case continue.

Taco Bell, a unit of Yum Brands, was sued last month in the Brooklyn court for selling Crunchwraps and Mexican pizzas that allegedly contain only half as much filling as advertised.

Each lawsuit seeks at least $5 million in damages.

The case is Coleman et al v Burger King Corp, US District Court, Southern District of Florida, No. 22-20925.  — Reuters

Russia will not probe Prigozhin plane crash under international rules — Brazil agency

UNSPLASH

SAO PAULO/MONTREAL  — Russia has informed Brazil’s aircraft investigation authority that it will not probe the crash of the Brazilian-made Embraer jet that killed mercenary boss Yevgeny Prigozhin under international rules “at the moment,” the Brazilian agency told Reuters on Tuesday.

Mr. Prigozhin, two top lieutenants of his Wagner Group and four bodyguards were among 10 people who died when the Embraer Legacy 600 crashed north of Moscow last week.

He died two months to the day after staging a brief mutiny against the Russian defense establishment that posed the biggest challenge to President Vladimir Putin’s rule since he rose to power in 1999.

Brazil’s Center for Research and Prevention of Aeronautical Accidents (CENIPA), in the interests of improving aviation safety, had said it would join a Russian-led investigation if it were invited and the probe held under international rules.

Russia’s aviation authority was not obligated to say yes to CENIPA, but some former investigators said it should, as the US and other Western governments suspect the Kremlin of being behind the Aug. 23 crash of the Embraer Legacy 600, which has a good safety record.

The Kremlin denies any involvement. Mr. Prigozhin was publicly critical of Moscow’s prosecution of its invasion of Ukraine. The Wagner mercenaries fought battles there on Russia’s side.

According to the Montreal-based United Nations International Civil Aviation Organization (ICAO), the flight from Moscow with a destination of St Petersburg was domestic, so it is not subject to international rules known throughout the industry by their legal name “Annex 13.”

NO OBLIGATION TO ACCEPT INTERNATIONAL RULES
“They are not obliged, only recommended to do that,” CENIPA head Air Brigadier Marcelo Moreno told Reuters after the agency sent an email last week asking Russia whether it would open such a probe.

“But if they say they’ll open the investigation and invite Brazil we will participate from afar.”

US aviation safety consultant and former investigator John Cox said an internal Russian investigation would always be questioned without the participation of Brazil, the country where the plane was manufactured.

“I think it’s very sad,” Mr. Cox said after being told of the Russian response. “I think it hurts the transparency of the Russian investigation.”

CENIPA said in an emailed statement it got the response from the Interstate Aviation Committee — Commission on Accident Investigation (IAC) on Tuesday, with the Russian authority saying it would not open for now a probe under Annex 13.

In air crash investigations, experts work to improve aviation safety without assigning blame, but probes are often tainted by political interests.

CENIPA and manufacturer Embraer want to prevent future accidents but face challenges in getting information from the investigation due to sanctions on Russia and Moscow’s reluctance to allow outside scrutiny.

Some 802 Embraer regional jets with 37 to 50 seats, built on the same platform as the Legacy 600 corporate aircraft, are in service, underscoring Brazilian interest in the probe.

Embraer declined comment.

Jeff Guzzetti, a former US air crash investigator, said Russia should accept assistance from Brazil, even if CENIPA can only participate remotely.

“If they don’t, well, then that’s a sure sign that it’s not going to be a transparent investigation.”

Drawing their name from an annex to the Convention on International Civil Aviation — commonly known as the 1944 Chicago Convention — the rules represent a low-key but effective form of international cooperation that has rarely been challenged.

By promoting unusually close technical co-operation across political frontiers and steering clear of issues of blame, Annex 13 has been credited with improving air safety dramatically since it was first introduced, safety officials said. — Reuters

Asian crops output forecast lower as El Niño strengthens

A farmer guides his carabao on dry and cracked farmland in San Juan town, Batangas, April 18, 2010. — REUTERS

SINGAPORE — An unusually dry August has taken a toll on cereal and oilseed crops in Asia as El Niño intensified, and forecasts for lower rainfall in September are further threatening to disrupt supplies.

While wheat output forecasts are being revised lower due to dry weather in Australia, the world’s second-largest exporter, record-low monsoon rains are expected to reduce the volume of crops, including rice, in India, the world’s biggest shipper of the grain, meteorologists and analysts said. 

Insufficient rains in Southeast Asia, meanwhile, could dent supplies of palm oil, the world’s most widely used vegetable oil, while extreme weather in top corn and soybean importer China is putting food output at risk.

“We are in full-blown El Niño weather in several parts of the world, and it is going to intensify towards the end of the year,” said Chris Hyde, a meteorologist at US-based Maxar Technologies, a climate data analytics platform.

“The weather pattern in Asia will correlate with dry El Niño conditions.”

El Niño is a warming of Pacific waters which typically results in drier conditions over Asia and excessive rains in parts of North and South America.

India’s monsoon rains, crucial for summer crops such as rice, sugarcane, soybeans and corn, are poised to be the weakest in eight years.

“The impact of El Niño is much greater than we had anticipated,” said a senior India Meteorological Department official. “This month is going to end with a deficit of over 30%, marking it as the driest August on record. El Niño will also affect September’s rainfall.”

India, which accounts for 40% of global rice exports, has curbed shipments, lifting prices to 15-year highs. 

Australia’s wheat output estimates are being revised lower by analysts for the first time in four years as key growing areas have had insufficient rain in August.

“Wheat production is going to be three million (metric) tons lower than our initial estimate of 33 million tons,” said Ole Houe, director of advisory services at agricultural brokerage IKON Commodities. “If the dryness continues in September, we are looking at an even lower crop.”

Australia has had three straight years of bumper wheat output, boosting supplies for importers such as China, Indonesia and Japan. 

TROPICAL SOUTHEAST ASIA HIT BY DRYNESS
Rice, palm oil, sugarcane and coffee crops have received lower-than-usual rainfall in Southeast Asia, with Indonesia and Thailand the worst hit.

“Eastern parts of Indonesia and much of Thailand has had very little rain in the last 30 to 40 days,” Maxar’s Mr. Hyde said.

“In these areas, precipitation has been 50% to 70% of average. Most of September is going to be largely below normal rains in Thailand and Indonesia.”

In the United States, corn and soybean crops have suffered in recent weeks due to dryness, although the weather is not associated with El Niño, said Drew Lerner, president of World Weather, Inc.

From November to February, however, US farms will see a bigger impact from El Niño with above-average precipitation in southern states, benefiting winter wheat, Mr. Lerner said.

South American weather is expected to be crop-friendly for soybeans and corn which will be harvested early 2024. — Reuters 

IMF says $650-B reserve boost helped global economy, urges caution on future allocation

A participant stands near a logo of the International Monetary Fund at the annual meeting in Nusa Dua, Bali, Indonesia, Oct. 12, 2018. — REUTERS/JOHANNES P. CHRISTO/FILE PHOTO

WASHINGTON — The International Monetary Fund on Tuesday said its August 2021 allocation of $650 billion in Special Drawing Rights helped countries cope with the COVID pandemic and averted worse outcomes, but cautioned against rushing into future allocations.

“While an SDR allocation is a very useful and important mechanism to build confidence and strengthen global economic and financial resilience, it is not a silver bullet,” the heads of the IMF’s finance and strategy departments wrote in a new blog released alongside a full report on the issue.

Finance director Bernard Lauwers and strategy chief Ceyla Pazarbasioglu said members should carefully evaluate any future moves to issue more SDRs given the current environment of higher interest rates and inflation.

“With close to $1 trillion in SDRs allocated to date, the international community has a collective responsibility to evaluate carefully any future decisions to issue SDRs and ensure transparency in the use of such global reserve assets,” they said. 

“At the current juncture, members need to take into account the environment of higher interest and inflation rates, which is making the use of SDRs more costly.”

The $650 billion SDR allocation was the IMF’s largest ever. The 45-page report concluded it was generally beneficial, helped meet the long-term global need for reserves and supported market confidence.

It said the allocation of new unconditional reserve assets benefited all IMF members, especially low-income countries, whose reserves were bolstered by 23% on average and by up to 40% for some sub-Saharan African countries.

Twenty-nine members had pledged a total of $103.4 billion in SDRs to two IMF trusts benefiting vulnerable low- and middle-income countries, the report found, although it said more efforts were needed to turn pledges into actual contributions, and close remaining fundraising gaps.

“This is critical to adequately resource the global financial safety net and support vulnerable countries facing multiple shocks and challenging transitions,” they said.

The blog said countries generally used the emergency reserves to boost reserve buffers, lowering borrowing costs, while a number of emerging market economies and low-income countries also use them to finance pressing fiscal needs.

The report showed that governments generally pursued what the IMF called “responsible policies” and saved SDRs to protect against future shocks, with only some emerging markets and developing countries delaying adjustments and reforms. — Reuters

Fossil fuels’ share in EU power mix at lowest level since records began —report

REUTERS

BRUSSELS — Fossil fuels produced just 33% of the EU’s power in the first half of this year, the lowest share on record based on data going back to 1990, researchers said on Wednesday.

The main reason was lower electricity demand, which meant rising renewable energy output could meet a bigger proportion of electricity demand, the think tank Ember said. 

Mild weather, consumption-cutting policies and high gas and power prices, in the wake of Russia slashing gas deliveries to Europe last year, have encouraged industries and consumers to curb energy use.

EU power demand in January-June was 4.6% lower than the same period in 2022 and the 33% generated by fossil fuels was down from 38% in the same period a year earlier.

Across the EU’s 27 member countries, fossil fuel-based power generation fell by 17% in the first half of the year, compared with the first half of 2022, Ember said. Coal, the most CO2-emitting fossil fuel, posted the steepest decline.

In May, coal produced less than 10% of EU electricity for the first time on record.

The drop in gas-fueled power generation was less steep, as EU countries replaced Russian gas with alternatives.

Clean energy generation increased as countries continue to install wind farms and solar panels. However, while wind and solar produced 23TWh more power in January-June 2023, compared with the same period last year, Ember said action to integrate more renewables into power grids was urgently needed.

In countries including Spain and Poland, solar power has at times been cut off to avoid overwhelming power grids or because it is cheaper to cut off solar power than switch off fossil fuel power plants.

“There are hot-spots of grid congestion and renewables curtailment,” Ember analyst Chris Rosslowe said.

“One really quick thing that could be done is accelerating the deployment of storage on the grid. Battery storage projects can be constructed very quickly,” he said.

Hydropower generation in January-June recovered compared with last year’s drought-driven lows, while nuclear output was slightly lower year on year. — Reuters

UK home sales on course to fall to lowest since 2012: Zoopla

REUTERS

LONDON — The number of house purchases in Britain this year is on course to drop by 21% to its lowest since 2012 as a result of rising borrowing costs, property website Zoopla forecast on Wednesday.

Zoopla forecast there would be 1.0 million residential housing sales this year, down from 1.26 million last year and a 14-year high of 1.48 million in 2021, when ultra-low interest rates and pandemic tax incentives boosted demand.

“While UK house prices are 0.1% higher over the year, it is the number of sales that have been hit hardest by higher borrowing costs, especially amongst mortgage-reliant buyers,” Zoopla’s executive director, Richard Donnell, said.

Zoopla forecast that house purchases funded by mortgages would drop 28% this year, while cash buyers would fall just 1% and account for more than a third of sales.

The most recent official data showed that there were 22% fewer house purchases in the three months to the end of June than a year earlier.

Average house prices in May were down 2% from their peak last September, but were still more than 20% higher than before the start of the COVID-19 pandemic, when cheap finance and demand for more spacious homes drove a surge in prices in many Western countries.

Since December 2021, the BoE has raised interest rates 14 times to 5.25% – their highest since 2008 – from 0.1% in a bid to tackle rampant inflation, and markets expect two further rate rises to 5.75% this year.

The BoE is due to release July mortgage lending data at 0830 GMT.

Zoopla provides property valuations and also advertises more than 1 million properties for sale or to rent. — Reuters

X will allow political ads from candidates, parties ahead of US election

ELON MUSK — REUTERS

X, the social media company formerly known as Twitter, said Tuesday it would now allow political advertising in the U.S. from candidates and political parties and expand its safety and elections team ahead of the 2024 presidential election.

Before billionaire Elon Musk acquired the company in October, Twitter had banned all political ads globally since 2019. 

In January, Twitter lifted the ban and began allowing “cause-based ads” in the U.S. that raise awareness of issues such as voter registration, and said it planned to expand the types of political ads it would allow on the platform.

The move to allow all political ads in the U.S. could help X grow its revenue at a time when many advertisers have fled or reduced spending on the platform for fear of appearing next to inappropriate content.

In a blog post on Tuesday, X said it would grow its teams to combat content manipulation and “emerging threats”.

The company said it would create a global advertising transparency center, which would let users see what political ads were being promoted on X, and added it would continue to prohibit political ads that spread false information or seek to undermine public confidence in an election.

The platform, like other social media companies, has long been criticized by researchers and lawmakers for not doing enough to prevent misleading or false content during major elections.

Since Musk’s acquisition, X in particular has faced questions about its readiness for the U.S. presidential election after laying off thousands of employees, including those who had worked on the trust and safety team. — Reuters

Unilever beats shareholder case over Ben & Jerry’s Israel boycott

REUTERS

A Manhattan federal judge dismissed a lawsuit against Unilever Plc on Tuesday that claimed the company misled United States investors by not immediately disclosing a decision by its Ben & Jerry’s unit to stop selling ice cream in Israeli-occupied Palestinian territories.

A Michigan pension fund sued in June 2022, seeking damages for a drop in Unilever shares after Ben & Jerry’s announced in July 2021 it would stop sales in the Israeli-occupied West Bank and parts of East Jerusalem.

U.S. District Judge Lorna Schofield ruled on Tuesday that Unilever was not required to disclose the boycott when Ben & Jerry’s board decided on it in 2020 because Unilever had ultimate control over whether to implement it.

While Ben & Jerry’s board oversees its social mission, Unilever retained authority over financial and operational decisions when it bought the ice cream company in 2000.

Schofield said the delay in announcing the board’s resolution was likely “to determine what, if anything, to do about it.”

An attorney representing the pension fund for fire and police in the Michigan community of St. Clair Shores and a Unilever spokesperson did not immediately respond to requests for comment.

The pension fund had sought damages for those who held Unilever American depositary receipts in July 2021, when they fell after several U.S. states reviewed their relationships with the British consumer goods company and some Jewish groups accused Ben & Jerry’s of antisemitism.

Founded in 1978, Ben & Jerry’s has long positioned itself as socially conscious. It said in July 2021 that selling ice cream in the occupied Palestinian territories was “inconsistent with our values.”

Most countries consider Israeli settlements in those territories illegal, which Israel disputes. In 2022, Unilever sold its interest in Ben & Jerry’s operations in Israel.

The Vermont-based ice cream maker sued to block the sale. The companies settled the dispute in December.

The case is City of St. Clair Shores Police and Fire Retirement System v. Unilever Plc et al, U.S. District Court, Southern District of New York, No. 22-05011. — Reuters

Rules for Maharlika fund released

President Ferdinand R. Marcos, Jr. in July signed into law Republic Act No. 11954, which created the Philippines’ first sovereign wealth fund. — PHILIPPINE STAR/KRIZ JOHN ROSALES

THE PHILIPPINES took a step closer to starting the operations of its first sovereign wealth fund with the release of the implementing rules and regulations (IRR) for the Maharlika Investment Fund (MIF).

“The MIF will serve as a crucial financing mechanism to widen fiscal space, ease the burden on local funds, and reduce reliance on official development assistance (ODA) in funding big-ticket projects such as those specified in the recently approved Infrastructure Flagship Project (IFP) list,” Finance Secretary Benjamin E. Diokno said in a statement.

In July, President Ferdinand R. Marcos, Jr. signed into law Republic Act No. 11954, which created the Philippines’ first sovereign wealth fund. The IRR, which was published in the Official Gazette on Monday, will take effect on Sept. 12. A copy of the IRR was not yet available on the Official Gazette website as of press time.

“The MIF Act’s IRR is faithful to the law to ensure that the prescribed procedures and guidelines will lead to its harmonized application,” National Treasurer Rosalia V. de Leon said.

Ms. De Leon said the Bureau of the Treasury (BTr), Development Bank of the Philippines (DBP), and Land Bank of the Philippines (LANDBANK) worked to ensure the IRR is consistent with the MIF Act.

The fund will be managed by the Maharlika Investment Corp. (MIC), which will have an authorized capital stock of P500 billion ($8.9 billion).

Under the law, the MIC’s initial P125-billion funding will come from the National Government (P50 billion), LANDBANK (P50 billion) and DBP (P25 billion).

The National Government will source its P50-billion contribution from 100% of the dividends of the Bangko Sentral ng Pilipinas (BSP) for the first two years, and the 10% share from Philippine Amusement and Gaming Corp.’s income for five years. It will also source its contribution to the fund from a 10% share of revenues from gaming operations of other government-owned gaming operators and regulators; proceeds from the privatization of government assets; and other sources such as royalties and/or special assessments for a period of five years.

“Other government financial institutions and government-owned and -controlled corporations may invest in the MIF as well… However, those providing social security and public health insurance services are absolutely prohibited from investing in the MIF,” the Department of Finance (DoF) said.

INVESTMENTS
According to the DoF, the IRR states that the MIC is authorized to “invest in a wide range of products, activities and projects, to wit: cash and other tradable commodities; fixed-income instruments issued by sovereigns; domestic and foreign corporate bonds; listed or unlisted equities; and Islamic investments, such as Sukuk bonds, among others.”

The MIC may also issue bonds, debentures, and securities, but these will not be guaranteed by the Philippine government.

“We will pursue public road networks, tollways, railways, green energy, water resources, agro-industrial ventures, and telecommunications. These critical areas offer high rates of return and significant socioeconomic impact,” Mr. Diokno said.

He said that the fund can also be used for “green and blue projects, countryside development, environment, social, and governance and cutting-edge technologies.”

Meanwhile, Mr. Diokno said the “search is on” for the president and chief executive officer (CEO) of the MIC, as well as other board members.

The MIC board will be composed of the Finance secretary as ex-officio chair, the MIC president and CEO as the vice chair, LANDBANK president and CEO, DBP president and CEO, two regular directors and three independent directors. The board members’ qualifications are “explicitly set out” in the IRR, the DoF said.

“The success of the implementation of the MIF hinges on selection of the best people to oversee and manage the Fund and strict compliance with the provisions of the law. This is why we made sure to include all possible safeguards in the IRR, ensuring that all our bases are covered,” Mr. Diokno said.

The MIC will also be guided by an advisory body composed of secretaries of the Department of Budget and Management, the National Economic and Development Authority, and the national treasurer.

“The advisory body met for the first time in Tokyo, Japan where they attended the public-private partnerships (PPP) and MIF session. The session was held in the JICA headquarters. It serves as an avenue to brief Japanese trading houses, financial institutions, Japanese government agencies, multilateral institutions, and the private sector on their possible involvement in PPP projects in the Philippines and the MIF,” Mr. Diokno said.

The DoF also said that the IRR contains the list of penalties “to ensure the integrity of the Fund.”

Penalties range from P1 million to P15 million and imprisonment of six to 20 years for offenses such as “willfully holding office while in possession of any disqualification; knowingly certifying the corporation’s financial statements despite its gross incompleteness or inaccuracy; willingly allowing oneself to be used for fraud; and failure to sanction, report, or file appropriate action for graft and corrupt practices.” — Luisa Maria Jacinta C. Jocson

Philippines, JICA sign ¥30-billion loan deal

The Philippine government and the Japan International Cooperation Agency (JICA) signed the ¥30-billion post-disaster standby loan Phase 3 in Tokyo, Japan. — REUTERS

THE PHILIPPINES and the Japan International Cooperation Agency (JICA) signed a ¥30-billion (around P11.6-billion) loan agreement to strengthen the country’s disaster resilience.

“The loan seeks to support swift recovery after natural disasters by promoting policy actions on Disaster Risk Reduction and Management (DRRM) and strengthening disaster preparedness by providing quick-disbursing budget support,” the Department of Finance (DoF) said in a statement on Tuesday.

Finance Secretary Benjamin E. Diokno and JICA Senior Vice-President Nakazawa Keiichiro signed the loan agreement on Monday in Tokyo, Japan.

The agreement covers the third phase of the post-disaster standby loan (PDSL), which would provide funds to ensure that recovery and reconstruction will be accelerated.

“JICA continues to support the Philippines in its disaster risk reduction and management efforts, and the PDSL will help boost resilience in times of disasters. We are living in the same disaster-prone countries, and we can support each other as close partners,” JICA Chief Representative Sakamoto Takema said in a separate statement.

JICA said the latest loan will also contribute to the Philippines’ efforts towards achieving sustainable development goals (SDGs), such as Goal 9 – Industry, Innovation and Infrastructure, Goal 11 – Sustainable Cities and Communities, and Goal 13 – Climate Action.

The Philippines received ¥50 billion under the first phase of the post-disaster loan to support the rehabilitation of areas affected by Typhoon Yolanda in 2013.

It also received ¥50 billion from JICA under the second phase of the loan to manage the country’s recovery from the pandemic in 2020.

According to JICA, the Philippines is the biggest recipient of the agency’s programs in Southeast Asia worth ¥418 billion in 2022.

JICA is currently supporting 28 ongoing loans in the Philippines.

Mr. Diokno said the Philippines will continue to secure concessional terms and conditions through JICA’s Special Terms for Economic Partnership.

“We are grateful for Prime Minister Fumio Kishida’s commitment to support the Philippines’ pursuit of the upper middle-income country status through impactful ODA and private sector investments,” said Mr. Diokno, who was part of the Philippine delegation that paid a courtesy visit to Mr. Kishida in Tokyo.

The Finance chief said both countries discussed available financing options once the Philippines achieves upper middle-income country status by 2025.

“These include new frameworks such as the ‘private capital mobilization-type’ grant that attracts investment and the ‘offer-type’ that proposes a menu of cooperation that takes advantage of Japan’s strengths,” the DoF said.

Based on the latest World Bank income classification, the Philippines is currently a lower middle-income economy, with gross national income (GNI) per capita of $3,950 in 2022.

Lower middle-income countries have a GNI per capita of $1,136-$4,465. The bracket for upper middle-income economies is set at $4,466-$13,845.

Mr. Diokno and other members of the Philippine cabinet were in Japan on Monday for the 14th Philippines-Japan High-Level Joint Committee Meeting on Infrastructure Development and Economic Cooperation. — Luisa Maria Jacinta C. Jocson

PHL economic growth seen to further slow

PHILIPPINE STAR/WALTER BOLLOZOS

PHILIPPINE ECONOMIC GROWTH is likely to further slow this year and in 2024, amid “strong” external headwinds and the end of “revenge spending,” GlobalSource Partners said in a report.

GlobalSource said it cut its Philippine gross domestic product (GDP) forecast to 5.2% for this year from 5.5% previously. It also slashed its GDP forecast for 2024 to 5% from 5.8% previously.

Both projections are below the government’s 6-7% target this year and the 6.5-8% goal in 2024.

“Economic growth is slackening. On one hand, multiple headwinds continue to buffet the economy — from weak external growth and tight global financial conditions to volatile commodity prices and high local inflation,” GlobalSource analysts Romeo L. Bernardo and Maria Christine Tang said in a report dated Aug. 28.

“On the other hand, the tailwind from post-pandemic revenge spending is losing force and, here as elsewhere, the expected swift recovery of Chinese tourism is not happening,” it added.

The Philippine economy expanded by a weaker-than-expected 4.3% in the second quarter, its slowest growth in over two years.

For the first half, GDP growth averaged 5.3%. The economy would have to grow by 6.6% in the second half to hit the government’s target.

GlobalSource said the Philippine economy will continue to face “strong” headwinds going into 2024, amid a slowdown in major trading partners, relatively tight financial conditions and fiscal constraints

“Although we expect monetary easing to start next year, the absence of new growth drivers beyond remittances and service exports compels a significant reduction in our (2024) GDP growth forecast from 5.8% to 5%,” GlobalSource said.

An economic rebound will depend on the government’s ability to implement its catch-up plan for spending. The weak second-quarter growth was partly blamed on the 7.1% contraction in government spending.

“We think that under the supervision of economic managers, spending will improve, although not fully and perhaps with potential costs to spending quality,” it added.

Other risks to the Philippine outlook include a potential recession in the US, a sudden spike in inflation due to food supply issues, geopolitical tensions and other shocks, GlobalSource said.

It kept its inflation forecast for this year at 5.5%, while lowering the 2024 projection to 3.3% from 3.5% previously.

Inflation averaged 6.8% in the first seven months of the year, still above the central bank’s revised 5.6% full-year forecast.

GlobalSource expects the Bangko Sentral ng Pilipinas (BSP) to start cutting rates next year, “possibly leading to more upbeat sentiment.”

The BSP earlier this month extended its policy pause for a third straight meeting, keeping its benchmark interest rate at a near 16-year high of 6.25%.

“The odds of a rate hike will be higher if the sharp currency depreciation comes alongside higher-than-expected headline inflation, reflecting currently high crude oil prices and exacerbated by spikes in prices of key food items, notably rice, and higher-than-expected wage increases,” it said.

However, GlobalSource said the current rate pause is likely to extend through the end of 2023. It noted the BSP is awaiting more definite signals from the US Federal Reserve that it is ending its tightening cycle and beginning its rate cuts.

“Ahead of any Fed cut, the BSP may also consider another cut in banks’ reserve requirement ratio (RRR) if the inflation outlook turns benign. BSP Governor Eli M. Remolona reportedly said that he would like to see the RRR eventually fall to 5% from the current 9.5%,” it added.

In June, the BSP cut the RRR for big banks and nonbank financial institutions with quasi-banking functions by 250 basis points (bps) to 9.5%.

It also reduced the ratio for digital banks by 200 bps to 6% and by 100 bps for thrift banks, and rural and cooperative banks to 2% and 1%, respectively. — Luisa Maria Jacinta C. Jocson

BIR surpasses July collection target by 5%

The Bureau of Internal Revenue collects about 70% of government revenues every year. — PHILIPPINE STAR/EDD GUMBAN

THE BUREAU of Internal Revenue (BIR) exceeded its collection target in July, as the agency ramped up its efforts against buyers and sellers of fake receipts.

The BIR collected P273.13 billion in July, surpassing its P259.91-billion collection target by 5.09%.

This was also 38.37% or P75.73 billion higher than its collection in July 2022.

For the first seven months, the BIR’s gross collections jumped by 12.21% to P1.49 trillion (net of tax refund).

“With the intensification of the Bureau’s tax enforcement activities, specifically on the campaign against sellers and buyers of fake receipts, and with our newly forged partnership with multi-sectoral groups for the enhancement of taxpayers’ service, we are confident that the BIR can attain, if not surpass, its annual collection target this year,” BIR Commissioner Romeo D. Lumagui, Jr. said in a statement.

The BIR is targeting to collect P2.64 trillion this year, which is 13% higher than the actual collection of P2.34 trillion in 2022.

Broken down, the agency is targeting to collect P1.32 trillion from taxes on net income and profits. It also aims to collect P538.13 billion from value-added tax, P336.1 billion from excise taxes, P124.65 billion from percentage taxes, and P224.15 billion from other taxes.

The BIR earlier this year filed numerous criminal cases against sellers and buyers of so-called “ghost receipts.”

Mr. Lumagui earlier estimated that as much as P370 billion in tax revenue may have been lost due to the proliferation of fake receipts.

“We computed the total purchases (of those ghost receipts), we totaled the value-added tax and income tax and that (P370 billion) is the revenue loss to date… There are still many other groups that sell ghost receipts. It’s a challenge to catch them,” he said.

The BIR also signed a memorandum of agreement with several business groups, including the Philippine Chamber of Commerce and Industry and the Management Association of the Philippines, to gain insights on how to streamline tax administration.

The agency collects about 70% of government revenues. — AMCS

1...2,9392,9402,941...12,781Page 2,940 of 12,781
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube