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China’s March factory activity expands for first time in six months

REUTERS

SHENZHEN, China – China’s manufacturing activity expanded for the first time in six months in March, an official factory survey showed on Sunday, offering relief to policymakers even as a crisis in the property sector remains a drag on the economy and confidence.

The official purchasing managers’ index (PMI) rose to 50.8 in March from 49.1 in February, above the 50-mark separating growth from contraction and topping a median forecast of 49.9 in a Reuters poll.

Though the pace of growth was modest, it was also the highest PMI reading since March of last year, when momentum from the lifting of tough COVID-19 restrictions began to stall.

“From the indicators, domestic supply and demand has improved, while homeowner and business confidence is recovering, while willingness to consume and invest are increasing,” said Zhou Maohua, an analyst with China Everbright Bank.

New export orders rose into positive territory, breaking a 11-month slump, but employment continued to shrink, albeit at a slower rate, the PMI data showed.

Recent upbeat indicators suggest the world’s second-largest economy is slowly getting back on better footing, leading analysts to start upgrading their growth forecasts for the year.

Policymakers have wrestled with persistent economic sluggishness since the abandonment of COVID curbs in late 2022, amid a deepening housing crisis, mounting local government debts and weakening global demand.

“March data show the economy is poised for a strong end to Q1,” China Beige Book, an advisory firm, said in a note last week. “Hiring recorded its longest stretch of improvement since late 2020. Manufacturing picked up, as did retail.”

However, a deep slump in the Asian giant’s property sector remains a major drag on growth, testing the health of heavily indebted local governments and state-owned banks’ balance sheets.

The official non-manufacturing PMI, which includes services and construction, rose to 53 from 51.4 in February, marking the highest reading since September.

Premier Li Qiang announced an ambitious 2024 economic growth target of around 5% earlier this month at the annual meeting of the National People’s Congress, China’s rubber-stamp parliament.

But analysts say policymakers will need to roll out more stimulus to hit that target as they will not be able to count on the low statistical base of 2022 which flattered 2023 growth data.

Citi on Thursday raised its economic growth forecast for China for this year to 5.0% from 4.6%, citing “recent positive data and policy delivery”.

China’s cabinet on March 1 approved a plan aimed at promoting large-scale equipment upgrades and sales of consumer goods. The head of the country’s state planner told a news conference earlier this month the plan could generate market demand of over 5 trillion yuan ($691.63 billion) annually.

Many analysts worry that China may begin flirting with Japan-style stagnation later this decade unless policymakers take steps to reorient the economy towards household consumption and market-allocation of resources, and away from the heavy reliance on infrastructure investments seen in the past. – Reuters

Philippines’ Marcos boosts maritime security as China tension rises

PHILIPPINE PRESIDENT FERDINAND R. MARCOS, JR. — PPA POOL

MANILA – Philippine President Ferdinand Marcos Jr has ordered his government to strengthen its coordination on maritime security to confront “a range of serious challenges” to territorial integrity and peace, as a dispute with China escalates.

The order, signed on Monday and made public on Sunday, does not mention China but follows a series of bilateral maritime confrontations and mutual accusations over a disputed area of the South China Sea.

Beijing claims almost all of the South China Sea, a conduit for more than $3 trillion of annual ship-borne commerce. China’s claims overlap those of the Philippines, Vietnam, Indonesia, Malaysia and Brunei. The Permanent Court of Arbitration in 2016 said China’s claims had no legal basis.

The latest flare-up occurred last weekend, when China used water cannon to disrupt a Philippine resupply mission to the Second Thomas Shoal for soldiers guarding a warship intentionally grounded on a reef 25 years ago.

“Despite efforts to promote stability and security in our maritime domain, the Philippines continues to confront a range of serious challenges that threaten territorial integrity, but also the peaceful existence of Filipinos,” Mr. Marcos said in the order.

The president vowed on Thursday to implement countermeasures against “illegal, coercive, aggressive and dangerous attacks” by China’s coastguard.

His order expands and reorganizes the government’s maritime council, adding the national security adviser, solicitor general, National Intelligence Coordinating Agency chief and the South China Sea task force.

The order appears to expand the role of the military by naming the Armed Forces of the Philippines, not just the navy, among the agencies supporting the council.

The renamed National Maritime Council will be the central body to formulate strategies to ensure a “unified, coordinated and effective” framework for the Philippines’ maritime security and domain awareness.

Mr. Marcos increased the number of agencies supporting the council to 13 from nine, including the space agency and the University of the Philippines’ Institute for Maritime Affairs and the Law of the Sea. – Reuters

Vehicle sales accelerate by 23% in February

Vehicles are seen along South Luzon Expressway in this file photo. — PHILIPPINE STAR/RUSSELL PALMA

By Justine Irish D. Tabile, Reporter

New vehicle sales jumped by an annual 23.2% in February, the fastest growth in seven months, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).

The industry report sent Tuesday night showed that vehicle sales increased to 38,072 units in February from 30,905 units in the same month a year ago.

At 23.2%, this is the highest year-on-year growth in seven months or since the 33.3% sales growth in July 2023.

Auto Sales (January 2024)Month on month, vehicle sales also rose by 11.8% from the 34,060 cars sold in January.

In a statement, CAMPI President Rommel R. Gutierrez attributed the higher sales in February to “early marketing campaigns and improved inventories supported by stable interest rates.”

“We hope to keep this momentum and achieve a strong first quarter finish, which will set the outlook for 2024,” he said.

The Bangko Sentral ng Pilipinas kept its benchmark interest rate at a near 17-year high of 6.5% in February, marking the third straight meeting that it left rates unchanged.

From May 2022 to October 2023, the central bank raised borrowing costs by 450 basis points.

In February, commercial vehicle sales climbed by 19.9% to 28,434 from 23,716 in the same month a year ago. This accounted for 74.7% of the industry’s total sales.

Month on month, sales of commercial vehicles went up by 11% from 25,614 units sold in January.

Broken down, light commercial vehicle sales rose by 17.7% to 21,236, while Asian utility vehicle (AUV) sales rose by 29.9% to 6,360. Sales of light commercial vehicles and AUVs grew on a month-on-month basis by 12% and 7.9%, respectively.

In February, sales of light and heavy trucks increased by an annual 17.8% and 8.9% to 516 and 61, respectively. Light truck sales went up by 25.2% on a month-on-month basis, while heavy truck sales were down 3.2% from January.

Sales of medium trucks declined by 10.3% year on year to 261 in February and by 7.4% month on month.

Meanwhile, passenger car sales rose by an annual 34.1% to 9,638 units in February from 7,189 units a year ago. Month on month, sales of passenger cars went up by 14.1% from 8,446 units in January.

For the first two months of the year, vehicle sales went up by 19.4% year on year to 72,132 units.

Commercial vehicle sales rose by 18.2% to 54,048, while passenger car sales jumped by 23.1% to 18,084 in the January-to-February period.

As of end-February, Toyota Motor Philippines Corp. remained the market leader with a 45.9% share as its sales rose by 16.9% to 33,070 units.

Mitsubishi Motors Philippines Corp. came in second with a 24.5% increase in sales to 13,271 units in the January-to-February period.

In third spot is Ford Motor Co. Phils., Inc. as sales jumped by 24.1% to 5,178 units.

Rounding out the top five were Nissan Philippines, Inc., which saw a 45.6% increase in sales to 5,148 units, and Suzuki Phils., Inc. which posted a 0.4% rise in sales to 2,950 units.

“The sustained double-digit growth in vehicle sales may still be attributed to the continued pickup and recovery of many businesses and industries from the pandemic,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He noted demand for big-ticket items such as vehicles continued, despite the elevated interest rates since 2022.

“It is important to note that the sustained double-digit growth in vehicle sales is more than three times the country’s economic growth,” he added.

The Philippine economy grew by 5.6% in 2023, which is slower than the 7.6% expansion in 2022 and the government’s 6-7% target for 2023.

“For the coming months, possible Federal Reserve rate cuts later in 2024 that could be matched locally could help spur greater demand for vehicle sales,” Mr. Ricafort said.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said vehicle sales growth may have been driven by the introduction of new models of electric vehicles (EVs) and plug-in hybrids as well as discounts and financing deals.

“Infrastructure projects such as road construction and improvements may have also increased demand for vehicles, particularly commercial vehicles like trucks,” Mr. Arce said.

He said that consumer demand for new vehicles may be sustained if the economy “remains stable or continues to grow.”

However, Mr. Arce said “changes in government policies related to automotive industry regulation, taxation, or incentives could affect consumer behavior and sales.”

Earlier this month, the National Economic and Development Authority (NEDA) said that there was a discussion between agencies on the possible expansion of Executive Order (EO) No. 12, which grants incentives for EVs, to include e-motorcycles and hybrid vehicles.

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said that the strong vehicle sales in February “signals a robust recovery, fueled by increased consumer confidence and strategic marketing efforts.”

“Dominance by GT Capital Holdings Inc.’s Toyota highlights market consolidation. However, risks such as supply chain disruptions warrant monitoring,” Mr. Limlingan said in a Viber message.

“Despite challenges, the industry’s 9% sales growth target for the year reflects optimism for sustained momentum. Investors should stay vigilant amid evolving market dynamics,” he added.

For 2024, CAMPI gave a conservative sales forecast of 468,300 units, 9% up from the 429,807 units sold in 2023.

Residential property price growth further slows in Q4 – BSP data

A VIEW of residential condominium buildings in Mandaluyong, Metro Manila, Aug. 22, 2016 — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

Housing prices nationwide rose at a much slower pace in the fourth quarter of 2023, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The Residential Real Estate Price Index (RREPI) rose by 6.5% year on year in the October-to-December period. This was much slower than the 12.9% expansion in the third quarter and the 7.7% growth in the same period a year earlier.

This was also the slowest growth in residential property prices since the 2.6% in the second quarter of 2022.

House prices up 6.5% in Q4 2023On a quarterly basis, nationwide home prices contracted by 3.6%, ending two quarters of growth.

Joey Roi H. Bondoc, associate director for research at Colliers International Philippines, said the quarter-on-quarter contraction in prices may have been due to a slower take-up in the fourth quarter.

“This is probably due to some end-users and investors, especially those that depend on Overseas Filipino Worker (OFW) remittances, having to factor in other expenses due to the holiday season and other big-ticket purchases including cars,” he said in an email.

The RREPI tracks the average price changes of residential properties across different housing types and locations. This provides the central bank with insights into the property market, which is regulated due to bank exposure.

BSP data also showed that the prices of single-detached/attached houses rose by an annual 9.5% in the fourth quarter, slower than the 16.8% expansion in the previous quarter and the 10% growth a year ago.

Prices of townhouses grew by 4.9% in the October to December period, easing from 9.3% in the third quarter but a turnaround from 6.8% decline in the same period in 2022.

Prices of condominium units went up by 4.1% in the fourth quarter, slower than the 8.3% and 12.9% posted in the third quarter of 2023 and fourth quarter of 2022, respectively.

On the other hand, prices of duplex units dropped by 33.5%, a reversal of the 57.7% growth in the July-September period and 42.9% expansion in fourth quarter of 2022.

OUTSIDE NCR
Meanwhile, residential property prices in the National Capital Region (NCR) increased by 4.3% in the fourth quarter, slower than the 12.3% in the previous quarter and 16.1% a year ago.

In contrast, residential property prices in areas outside NCR (AONCR) jumped by 7.8%. This was a faster clip than the 4.5% in the same period a year earlier but slower than the 14.3% in the third quarter.

In the fourth quarter, residential and real estate loans granted for all types of new housing units spiked by 30.5% year on year, despite elevated interest rates.

Housing loans in NCR and AONCR increased by 38.5% and 26.6%, respectively.

By type, most of the loans were used to purchase single-detached/attached houses and condominium units (both at 42.6%), followed by townhouses (14.7%.)

“Much of the loans are still cornered by NCR, Central Luzon, Calabarzon, Western Visayas, Central Visayas, and Davao region. This is expected given that developers have also been aggressively launching massive horizontal and vertical projects in these regions,” Mr. Bondoc said.

“We expect these regions to dominate in terms of real estate loans, especially once developers launch the residential projects that they have lined up within their master-planned communities,” he added.

BSP data also showed the average appraised value of new housing units in the Philippines stood at P89,042 per square meter (sq.m.) in the last three months of 2023.

The average appraised value in NCR was P134,178 per sq.m., while the average appraised value in AONCR stood at P65,186 per sq.m.

For the rest of the year, Mr. Bondoc expects a continued increase in property prices.

“We see the rise in residential prices being driven by horizontal projects including house-and-lot and lot-only developments. Single detached and attached units, for instance, remain popular among OFW investors and households that receive remittances from Filipinos working abroad,” he said.

However, he does not see a substantial increase in condominium prices amid the “tepid pre-selling market,” particularly  in Metro Manila.

“Developers have taken a more cautious stance in terms of their pre-selling condominium launches in Metro Manila and this is likely to result in slower turnover of condominium units in the next three to five years,” he said.

“Developers have been offsetting the lukewarm demand in Metro Manila by launching massive and expansive projects outside of the capital region,” he added.

S&P Global keeps Philippine GDP growth outlook for 2024, 2025

People are seen enjoying the view at Manila Bay, March 27, 2024. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Luisa Maria Jacinta C. Jocson, Reporter

S&P Global Ratings maintained its gross domestic output (GDP) forecast for the Philippines this year and 2025, as it expects the country to be among the top performers in the region again.

“The economy’s growth is likely to improve over the next two years. As inflation moderates further, we forecast real GDP growth to about 6% for 2024 and 2025, compared to the 5.6% for 2023,” S&P Global Ratings Director Nikita Anand said in a webinar on Wednesday.

The credit rater sees Philippine GDP averaging 5.9% this year and 6.2% in 2025, the same as the forecasts it gave in November.

Both forecasts are still below the government’s 6.5-7.5% and 6.5-8% growth targets for 2024 and 2025, respectively.

“Although low relative to the Philippines’ recent history, this is actually one of the higher growth rates in the region as forecasted at the moment,” S&P Global Ratings Senior Economist Vincent Conti said.

“Our outlook is for the Philippines to do relatively well compared to the region, but kind of a little bit under where growth has been in the recent few years. Especially outside of the COVID-19 (coronavirus disease 2019) years,” he added.

With the 5.9% GDP growth forecast, the Philippines is expected to be the second-fastest growing economy in the region this year, behind only Vietnam (6.1%). It is ahead of Indonesia (4.9%), Malaysia (4.3%), Thailand (3.9%) and Singapore (2.2%).

For 2025, the Philippines also has the second-fastest projected growth in the region, after Vietnam (6.7%).

Last year, the economy grew by a weaker-than-expected 5.6%, failing to meet the government’s 6-7% goal.

Mr. Conti said that the economy is still feeling the impact of elevated inflation and weaker investments.

“Last year’s high inflation is likely to still weigh on consumption this year as last year’s prices would have eaten into disposable income and savings,” he said.

“The second headwind is the deceleration of investment last year, which we continue to expect to decelerate even further this year and that’s really due to the lagged impacts of the rate hikes. Investment is also going to be weighed by the aforementioned slower consumption,” he added.

S&P Global maintained its inflation forecast for the Philippines at 3.4% this year, slightly lower than the Bangko Sentral ng Pilipinas’ (BSP) 3.6% projection this year.

The credit rater sees inflation settling at 3.2% in 2025, in line with the BSP’s expectation.

“We’re already seeing inflation drop back into the BSP’s target range, where we expect that to continue to be the case for this year… that gives the BSP some leeway to be able to consider starting to cut rates,” Mr. Conti said.

“We also believe policy rates could decrease in 2024 as inflation stays moderate. Our base case is a 75 basis-point (bp) reduction in the second half of this year,” Ms. Anand added.

The BSP has kept its benchmark interest rate at a near 17-year high of 6.5% for three straight meetings. It raised borrowing costs by 450 bps from May 2022 to October 2023.

BSP Governor Eli M. Remolona, Jr. earlier said he expects to begin cutting rates “in the next few meetings.”

The Monetary Board is scheduled to meet on April 8.

Exporters cite job creation potential of Tatak Pinoy Act

CITEM

The Philippine Exporters Confederation, Inc. (Philexport) said that the Tatak Pinoy Act can help generate jobs for Filipinos and develop lagging industries.

In a statement Wednesday, Philexport President Sergio R. Ortiz-Luis, Jr. said that the export community welcomes the passage of Republic Act (RA) No. 11981, as similar efforts to encourage the purchase of Filipino products have mostly “fizzled out.”

“Particularly commendable is that RA 11981 enshrines private sector representation. For the first time, they thought of putting up a platform to really put together the government and the different industries to ensure sustainability of effort,” Mr. Ortiz-Luis said.

“It makes us happy that at least we have a vehicle to be able to address this. There have been a lot of laws passed lately whose value is debatable, but this law is surely of benefit to the country,” he added.

He said that in the short term, the law tackles low-hanging fruit such as job generation, by complementing the projects led by the Department of Trade and Industry.

“Later on, more projects can be identified for medium- and long-term development under the Tatak Pinoy Act,” he said.

“We have many industries that need to be developed that are not being developed, such as the bamboo industry,” he added.

Signed on Feb. 26, the law aims to develop a Tatak-Pinoy Strategy to support local industries “from the time of development to market expansion and to associate the Filipino brand with high-quality products.”

“The law aims to elevate the standard and competitiveness of Philippine products and services by fostering stronger collaboration between government agencies and the private sector,” Philexport said.

The law also calls for the establishment of the Tatak Pinoy Council, which will be chaired by the Trade secretary and co-chaired by the National Economic and Development Authority and Finance secretaries.

“The Council is tasked to implement the program’s initiatives and ensure that Philippine products and services are highlighted in international exhibitions and strategic retail placements,” the organization said.

Under the law, the government will also allot funding to businesses and provide them incentives, such as expedited processing of permits and certifications, over a 10-year period.

“The government is hoping that by passing RA 11981, it will improve the country’s ranking in the Atlas of Economic Complexity, which measures a nation’s capacity to make more complex products,” Philexport said.

“The Philippines currently ranks 33rd out of 133 countries in terms of the level of sophistication of export products,” it added. — Justine Irish DP Tabile

ODA projects should be targeted for procurement streamlining – think tank

DOF.GOV.PH

NATIONAL government agencies need to ensure that the preparatory stages for projects funded with official development assistance (ODA) are streamlined to avoid delays, according to a think tank attached to the House of Representatives.

“To address delays inherent in procurement processes, a comprehensive approach encompassing legal resolutions, administrative streamlining, and sound financial planning and management, among others, may be necessary,” the Congressional Policy and Budget Research Department (CPBRD) said in a report.

Delayed implementation of ODA-financed projects  increases the financial burden on the government, which depends on ODA for low-cost financing, the CPBRD said.

“In addition to the opportunity cost, the government may also incur additional commitment fees, extra interest, higher foreign exchange differentials, and even penalties due to significant project implementation delays,” it added.

According to the National Economic and Development Authority’s (NEDA) 2022 ODA portfolio report, combined disbursements for project and program loans fell to $4.82 billion from $5.52 billion in 2021.

Citing NEDA reports, the CPBRD said that procurement is one of the major concerns in implementing ODA projects. Other issues include budget flow, site conditions and availability, institutional support, and force majeure.

The active ODA portfolio at the end of 2022 consisted of 106 loans worth $30.2 billion and 320 grants amounting to $2.2 billion.

“In 2022, ODA projects executed by the Bureau of Customs (BoC), Department of Agriculture (DA), Department of Agrarian Reform (DAR), Department of Education (DepEd), Department of Energy (DoE), Department of Health (DoH), and Department of Transportation (DoTr) encountered procurement difficulties in acquiring project consultants, contractors for civil works, and suppliers of goods, which eventually resulted in implementation delays,” it said.

“While recognizing that procurement is just one facet influencing project implementation, it significantly contributes to the overall success and timeliness of government projects,” the think tank added.

The Asian Development Bank, the Philippines’ largest ODA provider, accounted for 33% of th portfolio, followed by Japan, the World Bank, China, and South Korea. — Beatriz Marie D. Cruz

EU rules favor garments from countries that source their own textiles, PHL exporters say

Image via IndustriALL Global Union/Flickr/CC BY-NC-ND 2.0

Export markets like the European Union favor garments from countries that source their own textiles internally, to comply with Rules of Origin (ROO) regulations, exporters said.

As such, the government needs to help establish a commercial-scale textile factory to help supply wearables exporters, especially those shipping to the EU, according to Robert Young, trustee for the textile, yarn, and fabric sectors of the Philippine Exporters Confederation, Inc. (Philexport).

He said such a factory would be vital if the industry is to achieve its revenue target for the year of $1 billion.

“Just one will be enough; we have to quickly start something so that these foreign investors will follow suit,” he said. “Garments, once they’re there, can be a lifesaver to any economy, just like in Bangladesh, Vietnam, India, Laos, and Cambodia.”

Mr. Young, who is also the president of the Foreign Buyers Association of the Philippines, said that Philippine garments exported to the EU are subjected to a 12% or higher duty due to the strict ROO requirements.

“They (EU) prefer that the fabric we use is sourced from the Philippines. So this is one way of saying the Philippines has to produce its own fabric,” he said.

“Which, as everybody knows, is not possible because we do not have the textile industry in the Philippines right now to be used for these products for exports, and therefore, we have to import,” he added.

He said Philippine garments that enter the EU market are duty-free, as provided by the Generalized Scheme of Preferences Plus (GSP+). However, because of the ROO regime, Philippine garments that use imported fabric do not qualify for zero duty.

“Building a pilot factory to produce our own fabric or textile is thus imperative, especially as the revival of negotiations for the country’s bilateral free trade agreement (FTA) with the EU is expected to also prescribe the same ROO on textile usage for exported garments,” he added.

Last week, the EU and the Philippines announced the resumption of negotiations for an FTA after being halted in 2017 due to concerns raised by the EU over the policies of the former Philippine government. The FTA is expected to increase bilateral trade by 6 billion euros.

The Philippines participates in the EU’s GSP+, a special incentive arrangement for low- and lower-middle-income countries. It charges zero duty on 6,274 Philippine-made products.

Mr. Young said that due to the ROO, the industry only expects to hit 80% of its $1 billion revenue target for the year.

“We underperform now. How will we perform if we are not allowed to use imported materials? There is another way to use the imported material, but we have to buy from an FTA country that has a bilateral agreement with the Philippines. We have to look for these kinds of countries,” he said.

The EU currently accounts for 10% of the country’s export receipts of garments, textiles, and apparel, while the US remains the main export destination. Other top export destinations are Australia, Canada, and Japan.

“The industry group has been requesting the government submit a derogation letter to the EU to allow the country to use imported fabric and qualify for zero duty while the pilot factory is not yet built,” Mr. Young said. — Justine Irish DP Tabile

PHL household food waste falls sharply to nearly 3 million tonnes a year — UNEP

REUTERS

PHILIPPINE households wasted nearly 3 million tonnes of food a year, down sharply from 2021 totals, the UN Environment Programme (UNEP) said in a report.

According to the UNEP’s 2024 Food Waste Index Report, Philippine household food waste amounted to 2.95 million tonnes a year, or 26 kilograms (kg) per capita.

The 2024 report finding is 68.35% lower than the 9.33 million tonnes/year reported in 2021.

The Food Waste Index measures the amount of food and its inedible parts wasted in retail, food service, and households.

The household sector worldwide accounted for 60% or 631 million tonnes of wasted food, followed by food service at 28% (or 290 million tonnes) and retail 12% (or 131 million tonnes).

“Not only is this a major development issue, but the impacts of such unnecessary waste are causing substantial costs to the climate and nature,” UNEP executive director Inger Angersen said in a statement.

Philippine per-capita household food waste is also lower than the Southeast Asian average of 70 kilograms.

The UNEP also measured the amount of food waste in three provinces within the Philippines. It reported that Cagayan De Oro had a food waste estimate of 26 kg/per capita in a year, Legazpi at 33 kg/per capita, and Ormoc at 18 kg/per capita.

The report also found out that countries with higher temperatures generate more food waste per capita in households, citing the potential for food to spoil, as well as insufficient cold storage facilities.

“The data confirms that food waste is not just a ‘rich country’ problem, with levels of household food waste differing in observed average levels for high-income, upper-middle, and lower-middle- income countries by just 7 kg per capita,” according to the report.

Household food waste in the Philippines may have declined due to improved distribution facilities like farm-to-market roads and storage, said Ateneo De Manila economics professor Leonardo A. Lanzona.

However, the continued surge food prices is attributed to middleman control of the supply chain, especially in distribution.

“This suggests that the farmers do not have much access to these facilities. The middlemen who distribute these farm products are able to utilize these facilities to their advantage,” Mr. Lanzona said in a Facebook Messenger chat.

Food inflation in February accelerated to 4.8% from 3.3% in January, mainly due to rice prices, according to the Philippine Statistics Authority.

The government should ensure that farmers gain equal access to distribution facilities to ease prices and avoid food waste, according to Mr. Lanzona.

Governments are also urged to engage in public-private partnerships to ensure all stakeholders participate in reducing wastage in the food supply chain, according to the report. — Beatriz Marie D. Cruz

DFA urged to file UN resolution vs China

COURTESY OF BFAR

By John Victor D. Ordonez, Reporter

A PHILIPPINE senator has called on the Department Foreign Affairs (DFA) to file a resolution before the United Nations (UN) General Assembly condemning China’s aggression in the South China Sea.

In a statement, Senator Ana Theresia N. Hontiveros-Baraquel said the resolution should call on China to stop “blatant violence” in Philippine waters.

“I also hope the DFA can gather our neighbors in Southeast Asia, particularly Vietnam and Malaysia, to stand with the Philippines as we face common security threats and assaults by China,” she added.

A Chinese coast guard vessel at the weekend fired a water cannon at a Philippine boat trying to bring food and other supplies to a grounded World War II-era ship at Second Thomas Shoal.

A Chinese People’s Liberation Army Navy helicopter also harassed a team of Filipino scientists at Thitu Island by hovering at a close distance to one of its sand bars, the Philippines said on Tuesday.

Manila later lodged a protest and said the boat was heavily damaged and some crew injured. It then summoned China’s envoy in Manila to protest “aggressive actions” in the South China Sea.

The Philippines will make a significant move on China’s continued aggression at sea, National Security Council (NSC) Assistant Director General Jonathan Malaya told the ABS-CBN news Channel on Wednesday.

President Ferdinand R. Marcos, Jr. is weighing the recommendations of the council at a high-level meeting at the presidential palace, he added.

Mr. Malaya also warned of a possible foreign interference during the 2025 midterm elections in the Philippines in the form of cyber-attacks.

Beijing has warned Manila to act cautiously and seek dialogue, reiterating that the resupply vessels had trespassed into Chinese territory.

“Let us show our troops that we are also taking concrete steps to fight for them in all diplomatic and political avenues available to us,” Ms. Hontiveros said.

In a separate statement, Senate Majority Floor Leader Emmanuel Joel J. Villanueva said he would sponsor a resolution before the Senate floor calling on the DFA to update the chamber on state efforts to deter Chinese aggression in the waterway.

“This latest incident, as well as all other aggressions of China towards our countrymen, is totally inhumane, illegal and barbaric,” he said. “We will file and sponsor a resolution calling on the DFA to take all necessary actions to stop these incidents.”

Tensions between the Philippines and China have worsened in the past year as China’s coast guard continues to block Philippine resupply missions to Second Thomas Shoal.

The shoal is about 200 kilometers from the Philippine island of Palawan and more than 1,000 kilometers from China’s nearest major landmass, Hainan Island.

At the Inter-Parliamentary Union General Debate on March 24, Senate President Juan Miguel F. Zubiri called on the international community to stand with the Philippines in ensuring that international law and freedom of navigation are upheld in the South China Sea.

‘GENTLEMAN’S AGREEMENT’
“Let me emphasize that the Philippines has consistently adhered to the international rules-based order, ensured freedom of navigation in the area and practiced restraint in dealing with the harassment and provocations of our neighbor in the north,” he said in a speech, a copy of which was sent to reporters on Thursday via Viber.

The Philippine Senate has approved a bill that seeks to set up maritime zones and territories in the South China Sea and another that aims to attract investments in local defense equipment manufacturing.

Also on Thursday, former presidential spokesman Herminio “Harry” L. Roque, Jr. said the government of ex-President Rodrigo R. Duterte had entered into a “gentleman’s agreement” with China not to bring construction and repair materials to BRP Sierra Madre, the dilapidated ship at Second Thomas Shoal.

In a Viber message to BusinessWorld, he said the deal involved keeping the “status quo” at the shoal, but did not entail the BRP Sierra Madre’s removal.

The Philippines intentionally grounded the ship in 1999 to assert its sovereignty.

“Since it’s not in writing and not a treaty, it may not bind the administration of President Marcos,” Mr. Roque said.

In a statement on March 23, Chinese Coast Guard spokesman Gan Yu accused the Philippines of transporting construction materials to the grounded ship.

The DFA did not immediately reply to a WhatsApp question whether resupply missions involve bringing building materials to the shoal.

A five-member United Nations-backed arbitral court in 2016 ruled China had violated Philippine sovereign rights in its exclusive economic zone by building artificial islands and failing to prevent its citizens from fishing in the zone.

“It takes a community of nations to preserve and nurture peace, thus, we appeal to the international community to support and stand firm with us in promoting freedom of navigation and adherence to an international rules-based order in the West Philippine Sea,” Mr. Zubiri said.

Seven of 10 Filipinos against ‘Cha-cha’

By Kenneth Christiane L. Basilio

Seven of 10 Filipinos are against a proposal to change the 1987 Constitution, according to the results of Pulse Asia Research, Inc.’s poll this month.

In a statement, the pollster said 74% of Filipinos did not see the need for Charter change (Cha-cha) regardless of timing.

“This opinion is echoed by small to big majorities in the various areas and classes (69% to 82% and 58% to 80%, respectively),” Pulse Asia said.

It added that 8% of Filipinos thought the Charter should be amended now, while another 8% were open to it under the next government.

Pulse Asia said 6% of Filipinos opposed constitutional amendments now but support at some other time under the present government, while 4% were undecided.

Opposition to Charter change increased by 43% from last year.

“This survey is a true eye opener, that’s why we are carefully studying this and not rushing it,” Senate President Juan Miguel F. Zubiri told reporters via Viber. “The Senate will still conduct hearings in Luzon, Visayas and Mindanao to truly see the pulse of the people.”

In the Pulse Asia poll, Filipinos were against measures lifting foreign ownership limits in the Constitution (78%), combining both chambers of Congress (74%), extending the term limits of local and national officials (73%) and shifting to a federal government system (71%).

They were also against measures allowing foreign participation in mass media (71%) and foreign ownership of schools (68%).

The pollster interviewed 1,200 adults on March 6 to 10 for the poll, which had an error margin of ±2.8 points.

The House of Representatives last week approved on final reading a proposal to lift foreign ownership limits in the 1987 Philippine Constitution to boost foreign direct investments.

With 288 congressmen voting in favor, the House agreed to liberalize the country’s public utilities, education and advertising sectors, saying these would benefit from increased foreign capital.

A similar Charter change proposal is pending at the Senate committee level.

The Pulse Asia results disagree with the results of a similar poll released last week by Tangere, which said half of Filipinos support the Charter change push.

“It is possible that others might be using different questions that may be prompting their respondents to say the expected response,” Arjan P. Aguirre, an assistant professor of political science at the Ateneo de Manila University, said in a Facebook Messenger chat.

Surveys are powerful tools that could be used to sway public opinion on a certain issue, he said. “Surveys can be politicized too.”

Hansley A. Juliano, who teaches political science at the Ateneo, said of Tangere: “Their methods are already different and likely uncritically sampled.”

“Tangere is a market research firm whose products are for sale and are part of an ecosystem of corporate marketers and public relations dipping into social science discourse,” he told BusinessWorld via Messenger chat.

Mr. Aguirre said Pulse Asia is “deemed credible by social scientists and academics” because their polls are open to public scrutiny. — with John Victor D. Ordonez

Philippine, US, Japan diplomats gearing up for April summit

PHOTO FROM PHILIPPINE COAST GUARD

Diplomats from the Philippines, United States and Japan have agreed to do advance work on potential cooperation in defense, cyber-security, critical minerals and economic security ahead of a summit at the White House in April, the Philippine Embassy in Tokyo said on Tuesday.

“The three parties agreed to lay the foundation for a successful and productive inaugural trilateral summit in Washington, DC in April 2024, which (Philippine Foreign Affairs) Undersecretary Maria Theresa P. Lazaro said would be a historic meeting,” the embassy said, citing the foreign ministers’ meeting on March 21.

US President Joseph R. Biden is set to host Japanese Prime Minister Fumio Kishida and Philippine President Ferdinand R. Marcos, Jr. at a summit in Washington on April 11 to discuss economic ties and issues in the Indo-Pacific region.

Ms. Lazaro told her foreign counterparts that their countries should have “the peace, stability and prosperity of the Indo-Pacific at the forefront.”

She had met with Japanese Senior Deputy Minister Funakoshi Takehiro and US Deputy Secretary of State Kurt Campbell in Tokyo to discuss strengthening trade and geopolitical issues as well as the safety of seafarers in the Red Sea amid attacks by Houthi rebels.

In his visit to Manila last week, US Secretary of State Antony Blinken said the three-way summit is a very important platform for peace. “(It) is not designed against anyone, but in service of realizing a common vision for the future to the benefit of people in all of our countries,” he told a news briefing on March 19.

Ties between the Philippines and China have soured amid repeated spats over disputed features within the Philippines’ exclusive economic zone, and Manila has accused China’s coast guard of a policy of aggression. — John Victor D. Ordonez

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