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Philippines Blu Girls suffer heartbreaking loss to Italy, 6-5

IT WAS good while it lasted.

But when it all ended, the Philippine Blu Girls made sure everybody remembered.

And the Filipina clouters did just that Wednesday as they showed incredible resilience and rock-solid resolve against the highly favored Italians before eventually falling short with a rain, thunderstorm-delayed 6-5 defeat that concluded their WBSC Women’s Softball World Cup campaign in Castions di Strada, Italy.

The heartbreaking defeat denied the Blu Girls a chance to fight one more time for that one last ticket to the eight-team World Cup Finals the Italians would again host next year.

Instead, it was the Japanese and the Canadians who booked the Group C berths while the Italians have already made it being the hosts.

It was still a proud moment for a small country that was never given a chance to make it this deep in the tournament.

And the Blu Girls knew they did well as they smiled and walked with their heads held high when they returned to the dugout.

The country had its chances though.

Trailing 6-5 after four innings, the Blu Girls managed to send batters on base and in scoring positions in the final three innings but just couldn’t cash in on those opportunities.

The end came after Reyae Villamin flied out that left Angelu Gabriel, who reached first base via a fielding error, and Nicole Hammoude, who walked, advanced to second base on a sacrificial fly by Alaiza Talisik and moved to third thanks to Ms. Gabriel, stranded on base.

Alessandra Rotondo scored what turned out as the run that sealed the match thanks to a sacrificial fly by McKenzie Barbara at the bottom of the fourth inning. — Joey Villar

Coca-Cola announces support for PFF Women’s League 2023

COCA-COLA Philippines has announced its partnership with the Philippine Football Federation (PFF), coming on board as a major sponsor of the PFF Women’s League 2023. The support from Coca-Cola will support top local women’s football clubs and promote gender equity in sports, inspiring the next generation of athletes.

The partnership was announced during the free viewing party of the FIFA Women’s World Cup 2023™ match between the Philippines and New Zealand, which Coca-Cola Philippines co-presented. Excited football fans flocked to UP Town Center, Quezon City on July 25, 2023 to show their unwavering support for Team Filipinas and were delighted to witness the country’s historic win at the global tournament.

Through these efforts, Coca-Cola Philippines looks forward to providing meaningful support to the next generation of Filipina football players.

Jordan Henderson bids farewell to Liverpool

MIDFIELDER Jordan Henderson said farewell to Liverpool fans in a video posted on social media on Wednesday, confirming his departure from the club after 12 years ahead of a reported move to Saudi Arabia’s Al-Ettifaq.

The former Liverpool captain will join the Saudi Pro League after Al-Ettifaq paid a fee estimated at £13 million ($16.77 million), according to reports.

Mr. Henderson arrived at Anfield from Sunderland in 2011 and since then made 492 appearances with 33 goals and 61 assists in all competitions for the team. The England international helped Juergen Klopp’s side win their first Premier League title in 30 years in 2020. He also captained Liverpool to the FA Cup, League Cup, UEFA Super Cup and Club World Cup titles. — Reuters

Incur further losses

The Celtics knew they were caught between the proverbial rock and a hard place as they assessed their future with Jaylen Brown. The 2016 third overall pick had just come off a sterling season in which he normed career highs in just about every significant statistical category en route to helping steer the Celtics to a conference finals berth. It was the fifth time in his seven pro seasons that they did battle for the East crown, and yet disappointment accompanied their playoff finish. After coming to within two games of taking home the Larry O’Brien Trophy in 2022, they figured on finally going all the way with essentially the same roster; instead, they flubbed their return to the National Basketball Association Finals with an up-and-down showing in the rubber match against the supposedly overmatched Heat.

Through it all, there can be no doubting Brown’s contributions. He formed the second part of the Jay two-step with acknowledged top dog Jayson Tatum , and he was essential to their progress. On the other hand, he was likewise partly — or, from the vantage point of his myriad critics, mostly — responsible for their inability to meet expectations. While his strengths are easily identifiable, so, too, are his weaknesses. In juxtaposition with his evident progress as a scorer is his apparent failure to go left and take care of the ball. Meanwhile, he improved on his defense, but remained iffy with his on-ball coverage.

Taking into consideration all aspects of Brown’s skill set, limitations included, the Celtics ostensibly realized they could not afford to take the risk of seeing him leave for nothing next year. And so they signed him to an extension, in and of itself a logical move. Unfortunately, the numbers have come as a shock even to his fans; in inking a five-year supermax contract worth a whopping $304 million, he has become the league’s highest-paid player. Heck, he will be paid even more than reigning Finals Most Valuable Player awardee Nikola Jokic, never mind that he’s not even the Number One option with his own team.

Needless to say, the Celtics overpaid in order to keep Brown in the fold. That said, it’s clear that they’re high on his capacity to justify the decision; at 27, he’s approaching his prime, and he may yet continue to build on his talent to the point where his paycheck becomes a bargain. Until then, though, they’ll be under scrutiny for allowing themselves to hit the second apron of the luxury tax and absorb the punitive financial and administrative penalties that come with it. It’s always a gamble to project achievements, and then compute for their net present value.

In other words, the proof of the pudding is in the eating. The Celtics could have cut their losses by dealing Brown, but they leaned to the other extreme and went all in — as clear an indication as any that they like their odds. True, he will soon be joined in the salary stratosphere by others benefiting, literally and figuratively, from good fortune. Until the green and white claim the hardware, though, they should expect to be second-guessed. After all, their luck hasn’t been the best of late, and there are any number of permutations that will see them throwing good money over bad in the end.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and human resources management, corporate communications, and business development.

Typhoon Doksuri shuts businesses, grounds flights in Taiwan

A closeup shot of a sign that says "Sorry We're Closed" hanging on a glass door Wood photo created by wirestock - www.freepik.com

TAIPEI – Southern Taiwan on Thursday shut businesses and schools while airlines cancelled hundreds of flights amid warnings of landslides and floods as Typhoon Doksuri churned past the island en route to China where it will make landfall later this week.

As of 10:15 a.m. (0215 GMT) Typhoon Doksuri, categorized at the second-strongest typhoon level by Taiwan‘s weather bureau, headed towards the southern Taiwan Strait with maximum winds of 191 km (118 miles) per hour.

At one point Doksuri was a super typhoon, but lost some of its strength after it lashed the coastline of the northern Philippines on Wednesday, bursting banks of rivers and leaving thousands without electricity.

Doksuri killed five people in the Philippines, according to the country’s disaster agency.

Taiwan‘s weather bureau issued wind and rain warnings on Thursday for the southern and eastern part of the island, including the major port city of Kaohsiung where businesses and schools were closed and landslide warnings issued.

All domestic flights and ferry lines were suspended in Taiwan while more than 100 international flights were cancelled or delayed. Railway services between southern and eastern Taiwan were shut.

More than 5,700 people were evacuated as a precaution, mostly in the mountainous southern and eastern Taiwan, where more than 0.7 meters of rainfall was recorded in some areas and up to 1 meter of rain was forecast.

The storm had cut power from more than 49,000 households across Taiwan but the majority of them had since been restored.

“Typhoon Doksuri should not be underestimated,” Kaohsiung city mayor Chen Chi-mai said in a Facebook post late on Wednesday.

“The police and military force will assist in the effort of forced evacuation if needed,” he said, pointing threats by torrential rain in mountainous areas.

Braving occasional showers and winds, Taiwan‘s armed forces pressed ahead with a large-scale anti-landing drill on a beach near the major Taipei Port just outside the capital, simulating the repulsion of an enemy force with ground troops and tanks amid high military tensions with neighboring China.

The storm has disrupted parts of Taiwan‘s main annual Han Kuang exercises and air-raid drills that started on Monday, as authorities cancelled some exercises citing safety concerns and the need to make preparations for the typhoon. – Reuters

Australia awards South Korea’s Hanwha $4.7 billion defense contract

Logo of Hanwha Aerospace

SYDNEY – South Korea’s biggest defense company Hanwha Aerospace on Thursday beat Germany’s Rheinmetall to win an Australian contract worth up to A$7 billion ($4.74 billion) for building 129 infantry fighting vehicles.

The deal, which Defense Industry Minister Pat Conroy described as one of the largest projects in the history of the Australian army, will have a value of A$5 billion to A$7 billion.

“The state-of-the-art vehicles will come with the latest generation armour, cannon and missiles, providing the protection, mobility and firepower needed by soldiers in close combat,” Conroy told reporters.

The new vehicles, to be built in Australia at Hanwha‘s facilities in Victoria state, will replace the M113 armoured personnel carriers that first entered service in 1964.

Australia has been upgrading its defense capabilities, citing the changing strategic environment in the Pacific region, where China is looking to increase its influence.

Conroy said the government will speed up the process so that the first vehicle can be delivered in early 2027, two years earlier than planned, and the final vehicle by 2028.

Hanwha said the deal would further boost ties between Australia and South Korea and had “significant implications” for defence and economic cooperation. Rheinmetall did not respond immediately to a request for comment.

The decision to pick Hanwha‘s Redback as Australia‘s new infantry fighting vehicle comes two weeks after a trip by Prime Minister Anthony Albanese to Germany, where he signed an in-principle agreement to export 100 Boxer armed carriers made in Australia by defense contractor Rheinmetall back to Germany. – Reuters

California, other states move to block 3M’s $10.3 billion PFAS deal

A group of 22 states and US territories on Wednesday moved to block a proposed $10.3 billion settlement that would resolve claims against 3M Co. over water pollution tied to “forever chemicals,” claiming the deal fails to adequately hold the company accountable.

The group, led by California and including Texas, New York and the District of Columbia, filed a motion opposing approval of the settlement in a South Carolina federal court, where thousands of lawsuits against 3M and other companies over per- and polyfluoroalkyl substances, or PFAS, are being fought.

The proposed deal would provide funds over a 13-year period to cities, towns and other public water systems to test and treat contamination of PFAS. But the states said it isn’t enough to account for the damage caused by the chemicals, which are used in a wide range of products from firefighting foam to non-stick cookware to cosmetics and have been linked to cancers, hormonal dysfunction and environmental damage.

A 3M spokesperson said in a statement that the deal provides funding for remediation and testing without the need for future litigation on the matter, and it isn’t unusual for there to be objections to significant settlements. The spokesperson said the company would continue to “work cooperatively” to address questions about the deal.

Scott Summy, a lead attorney who helped negotiate the settlement on behalf of US water systems, said initial oppositions to large settlements are common and they will work to address issues raised by the states.

The states said the deal, announced June 22, would require public water systems across the United States to decide whether to opt in to the settlement before knowing how much they would receive, and in some cases before they are aware of their contamination levels and the costs associated with remediation.

They also said the deal could shift liability for future health concerns caused by PFAS from 3M onto the water systems themselves. That means the chemical maker could potentially seek compensation from the water systems in future litigation over things like PFAS-related cancer clusters, the states said.

“While I appreciate the effort that went into it, the proposed settlement in its current form does not adequately account for the pernicious damage that 3M has done in so many of our communities,” California Attorney General Rob Bonta said in a statement.

The settlement must be approved by US District Judge Richard Gergel, who is overseeing the cases in South Carolina.

3M, which is facing thousands of lawsuits over PFAS contamination, did not admit liability in the proposed settlement. It said in June that the money will help support remediation at public water systems that detect PFAS “at any level.”

The deal did not cover claims related to personal injury or property damage from PFAS contamination.

Three New York State cities with claims related to cleaning up PFAS at superfund sites in their jurisdiction also moved to block the settlement earlier this month. They claimed the water system settlement would reduce the amount of 3M money available to clean up those types of sites across the country, which the US Chamber of Commerce estimates could cost more than $17 billion.

The US Environmental Protection Agency has called PFAS an “urgent public health and environmental issue.” The substances are dubbed “forever chemicals” because they do not easily break down in the human body or environment.

The EPA has taken several steps in recent years to tighten regulations for the chemicals, and in March announced the first-ever national drinking water standards for six of the chemicals.

3M in December set a 2025 deadline to stop producing PFAS. – Reuters

Ship carrying nearly 3,000 cars ablaze off Dutch coast, crew member dead

AMSTERDAM – A fire blazed on a cargo ship off the Dutch coast with nearly 3,000 vehicles on board on Wednesday, killing one member of the crew and injuring several others, the coastguard said.

Several crew members were forced to jump overboard after the fire began on Tuesday night on the 199-meter (655-foot) Panama-registered Fremantle Highway as it was en route from Germany to Egypt.

The Indian Embassy in the Netherlands said in a social media post the fire had “resulted in the death of an Indian seafarer and injuries to the crew“, and that it was in touch with family of the deceased. Japan’s Shoei Kisen, which owns the ship, said the entire crew of 21 was Indian.

Rescue ships sprayed water onto the burning vessel to cool it down, but using too much water risked its sinking, the Dutch coastguard said. It was attached to a salvage vessel to prevent it drifting.

The fire might last for several days, Dutch news agency ANP reported, citing the coastguard. Smoke continued to billow from the vessel near the northern Dutch island of Ameland.

“The fire is most definitely still not controlled. It’s a very hard fire to extinguish, possibly because of the cargo the ship was transporting,” said Edwin Versteeg, a spokesperson for the Dutch Department of Waterways and Public Works.

The coastguard said on its website the cause of the fire was unknown, but a coastguard spokesperson had earlier told Reuters it began near an electric car. Roughly 25 out of 2,857 vehicles on the ship were electric.

The International Maritime Organization, which regulates safety standards at sea, plans to evaluate new measures for ships transporting electric vehicles next year in light of the growing number of fires on cargo ships, a spokesperson said.

“Electric cars burn just as much as combustion engine cars. When batteries overheat and a so-called ‘thermal runaway’ occurs, then it gets dangerous,” said Uwe-Peter Schieder, master mariner and representative of the German Insurance Association.

“A chemical reaction in the battery produces gases which inflate the battery.”

New rules under consideration could take years to implement, but may include specifications on the types of water extinguishers available on boats and limitations on the amount a battery can be charged, which impacts flammability.

Around 350 of the vehicles on board were Mercedes-BenzE cars, the German company said.

 

HELICOPTER AIRLIFT

The coastguard said the Fremantle, which had departed from the port of Bremerhaven, had been towed out of shipping lanes. It was 27 km (17 miles) north of Ameland when the fire started.

It spread so quickly that seven crew members leaped overboard, said Willard Molenaar of the Royal Dutch Rescue Company (KNRM), who was among the first at the scene.

Mr. Molenaar told NOS some people were injured jumping into the water, while one crew member had died in the flames.

“There was lot of smoke and the fire spread quickly, much faster than expected,” he said. “The people on board had to get off quickly … We fished them out of the water.”

A helicopter airlifted the remaining members of the crew off the burning ship. The injured were being treated for breathing problems, burns, and broken bones, local Dutch authorities said.

Coastguard spokesperson Edwin Granneman said salvage experts were trying to work out the next steps for the burning boat.

Ship owner Shoei Kisen said it was working with Dutch authorities and management company Wallem Ship Management to extinguish the fire.

The incident was the latest of several fires recently on car carriers.

Earlier this month, two New Jersey firefighters were killed and five injured battling a blaze on a cargo ship carrying hundreds of vehicles. There were no electric cars on that vessel, the operator said.

Another fire destroyed thousands of luxury cars, some electric with lithium-ion batteries, on a ship off the coast of Portugal’s Azores islands in February last year. – Reuters

Facebook parent Meta sees advertising jump, tops Wall Street targets

Meta

Meta Platforms on Wednesday reported a strong rise in advertising revenue, topping Wall Street financial targets for the second quarter and forecasting third-quarter revenue above market expectations.

The results from Meta, Facebook‘s parent company, come a day after a strong performance from Alphabet’s Google and make the case that consumers, and the advertisers eager to reach them, are spending despite broad economic concerns.

Still, the company also forecast that expenses would rise in both 2023 and 2024, citing costs including legal fees and increased spending on infrastructure considered key to the tech sector’s feverish AI race.

That spending comes after aggressive cost-cutting in other parts of the company, including safety teams and basic business functions.

Meta shares were up 7.5% in after-hours trade.

“We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall,” Meta Chief Executive Mark Zuckerberg said.

Meta‘s second-quarter revenue grew 11% to $32 billion in the quarter ended June 30, compared with analysts’ average estimate of $31.12 billion.

Ad revenue rose 12% in the quarter, faster than growth at Google, where ad revenue rose 3%. Adjusted earnings per share of $2.98 topped Wall Street targets of $2.91, according to data from Refinitiv.

The social media giant has been climbing back from a bruising 2022, buoyed by hype around emerging AI technology and an austerity drive in which it has shed around 21,000 employees since last fall.

The company’s shares have more than doubled in value this year as a result.

Advertisers are reinforcing those gains by pumping money into digital ads again after months of muted spending, heartened by signs that the economy may overcome a bout of high inflation without suffering a major meltdown.

Brands are hedging their bets, however, and sticking with tried and true platforms. That helps Meta and Alphabet while punishing smaller players like Snap, which reported disappointing sales on Tuesday.

Meta‘s revenue forecast did not specify whether the figure includes any sales that might come from the recently launched Threads app, which does not yet have ads.

 

LOSSES AND EXPENSES

The revenue gains provide relief as Meta makes massive investments to upgrade its data centers and stay competitive in an emerging arms race around AI technology, while continuing to invest more than $10 billion a year in a longer-term bet on “metaverse” hardware and software.

Meta cut its capital expenditure forecast for 2023, driven in part by pushing some costs related to artificial intelligence into 2024, when capex is expected to grow.

Mr. Zuckerberg told investors that executives were “debating heavily” how much AI capacity to bring online to prepare for a potential explosion in need. He saw three product categories for AI: features for advertisers, AI agents on chat and internal company productivity tools.

He said he envisioned some revenue coming from Meta‘s recently released Llama 2 model, which is largely open source but requires a license for use by companies with more than 700 million users.

“We want this to be open. But if you’re someone like Microsoft or Amazon or Google and you’re going to basically be reselling these services, that’s something that we think we should get some portion of the revenue for,” Mr. Zuckerberg said.

Meta‘s Reality Labs unit, which is responsible for developing metaverse-oriented technology like augmented reality glasses, reported sales of $276 million, down from $452 million in the same quarter last year.

The unit lost $3.7 billion in the second quarter, putting it on track to have far higher costs than the $5 billion annual target set out in a widely circulated investor note in the fall.

The unit has lost more than $40 billion since 2021, including $13.7 billion last year.

Meta said it expected Reality Labs operating losses to “increase meaningfully” in 2024 as the company continued to invest in augmented and virtual reality and “scale our ecosystem.” Mr. Zuckerberg had previously said Meta would “pace” investments in the division after 2023.

He told investors he understood why many of them would feel discomfort over such a long-term bet.

The company expects 2023 total expenses in the range of $88 billion to $91 billion, compared with its previous forecast of $86 billion to $90 billion, citing “legal-related expenses.”

Meta said second-quarter expenses included legal costs of $1.87 billion, mostly related to a fine by Ireland’s Data Protection Commissioner in May for transferring user information to the United States. The fine itself was 1.2 billion euros ($1.3 billion).

It said it expected “higher infrastructure-related costs” in 2024, as well as growth in payroll expenses “as we evolve our workforce composition toward higher-cost technical roles.” – Reuters

Fed lifts rates, Powell leaves door open to another hike in September

REUTERS

WASHINGTON – The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday and Fed Chair Jerome Powell said the economy still needed to slow and the labor market to weaken for inflation to “credibly” return to the US central bank’s 2% target.

The hike, the Fed’s 11th in its last 12 meetings, set the benchmark overnight interest rate in the 5.25%-5.50% range, a level last seen just prior to the 2007 housing market crash and which has not been consistently exceeded for about 22 years.

“The (Federal Open Market) Committee will continue to assess additional information and its implications for monetary policy,” the Fed said in language that was little changed from its June 14 statement and which left the central bank’s policy options open as it searches for a stopping point to the current tightening cycle.

Mr. Powell made no promises either way, with a September meeting eight weeks from now considered “live” for another rate increase, though a continued slowing of inflation and weaker economic data may also prompt policymakers to pause.

In a press conference following the Fed’s latest policy move, the Fed chief said the central bank was very much looking at “the totality” of incoming data, and particularly studying it for signs that the economy is heading for a period of “below-trend” growth that Mr. Powell thinks is necessary for inflation to fall.

Key price measures are still increasing at more than double the Fed’s target. While inflation has been easing, that has so far happened with little apparent cost to the labor market, where the unemployment rate remains at a low 3.6%. Economic growth has remained above the Fed’s estimated 1.8% trend rate; economists polled by Reuters expect data on Thursday will show second-quarter gross domestic product expanded at just that level.

Mr. Powell acknowledged as a positive development that inflation has fallen from the highs of last year without serious damage to the economy.

But as the Fed enters a tricky period in its inflation fight, balancing the need for further rate increases against the risks of going too far, he said finishing the task on inflation will likely require some economic losses.

“My base case is that we will be able to achieve inflation moving back down to our target without a really significant downturn that results in high levels of job losses,” Mr. Powell said. “But it’s a long way to be sure and we have a lot left … Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions.”

As stated after its meeting last month, the Fed said it would watch incoming data and study the impact of its rate hikes on the economy “in determining the extent of additional policy firming that may be appropriate” to reach its inflation target.

Though inflation data since the Fed’s June 13-14 meeting has been weaker than expected, policymakers have been reluctant to alter their hawkish approach until there is more progress in reducing price pressures. In their most recent projections, issued at the end of the June meeting, 12 of 18 policymakers said they anticipated at least one more rate increase would be needed by the end of this year for financial conditions to be restrictive enough to ensure inflation continued to decline.

Mr. Powell said decisions would continue to be made on a meeting-by-meeting basis and that officials can only provide limited guidance about what’s next for monetary policy in the current environment.

“It is certainly possible that we would raise the (federal) funds rate again at the September meeting if the data warranted, and I would also say it’s possible that we would choose to hold steady at that meeting” if that was the right policy call, Mr. Powell said.

He cautioned, however, against expecting any near-term easing in rates. “We’ll be comfortable cutting rates when we’re comfortable cutting rates, and that won’t be this year,” Mr. Powell said.

‘MODERATE’ GROWTH’

US Treasury yields slid in choppy trading after the release of the Fed policy statement, while US stocks ended largely unchanged. Futures markets showed little change in bets on the path of Fed rate increases over the remainder of the year, with small odds given to a rise in September.

“The forward guidance remains unchanged as the committee leaves the door open to further rate hikes if inflation does not continue to trend lower,” said Kathy Bostjancic, chief economist at Nationwide. “Our view is the Fed is likely done with rate hikes for this cycle since continued easing of inflation will passively lead to tighter policy as the Fed holds the nominal fed funds rate steady into 2024.”

The Fed statement nodded to the economy’s continued outperformance.

That has been captured in data as varied as continued job growth, strong vehicle sales, and the gargantuan attendance numbers from the new “Barbie” movie to the Taylor Swift concerts that earned a mention in the central bank’s most recent “Beige Book” report on economic activity.

Job gains remain “robust,” the Fed said, while it described the economy as growing at a “moderate” pace, a slight upgrade from the “modest” pace seen as of the June meeting.

Mr. Powell said he’s still holding out hope the economy can achieve a “soft landing,” a scenario in which inflation falls, unemployment remains relatively low and a recession is avoided.

But his comments about the need for slower growth suggest a possible bias towards higher rates to put more pressure on demand. Though Mr. Powell said Fed staff had relaxed a prediction of a recession in coming months, outside analysts still think that’s what it may take to finish the inflation fight.

“We would still think that you need a recession or some deeper slowing at some point in order to get inflation back to 2%,” said Veronica Clark, an economist at Citi. “So if we’re not having a recession in the next year, inflation is not back to 2% either … You are still dealing with high inflation and you do still need to slow things more.” — Reuters

Economy faces external headwinds

Farmers pack newly harvested onions at a farm in Bongabon, Nueva Ecija province, Philippines, Jan. 27, 2023. The El Niño weather pattern threatens to hurt agricultural production, which accounts for a tenth of Philippine economic output. — REUTERS

THE PHILIPPINES is on track to be one of the fastest-growing economies in the Asia-Pacific region this year, Moody’s Analytics said, but faces risks from China’s slow economic recovery and a potential reacceleration of inflation arising from Russia’s exit from the Ukraine grain deal, India’s rice export ban, and El Niño.

Moody’s Analytics Chief Asia-Pacific Economist Steven Cochrane said the expansion of the Philippine economy will mainly be supported by strong domestic demand and high infrastructure spending this year.

“The Philippines is actually one of the faster-growing economies in the region and there are a number of positive factors that are helping the Philippine economy. One, inflation has come (down) quite a bit and that’s a good sign,” Mr. Cochrane said in a webinar on Wednesday.

Stable remittances and foreign direct investment will also help support growth.

“But even more important than that is broad consumer demand. It seems to be quite strong in the Philippines. So, the outlook is good,” he said.

In an e-mail to BusinessWorld, Mr. Cochrane said he projects 6% gross domestic product (GDP) growth for the Philippines this year, and 5.6% in 2024.

A slower-than-expected recovery in China may impact the Philippines’ overall trade and tourism, according to Mr. Cochrane.   

“Almost all of Southeast Asia and indeed much of the Asia-Pacific region is highly dependent on exports both to China as well as to developed markets around the world. For the Philippines, as of April, there hasn’t been any recovery yet in terms of exports,” he said.   

Exports dropped by 20.2% in April, marking the fifth straight month of decline. However, exports rebounded in May as it inched up by 1.9% to $6.44 billion, the fastest growth since the 13.1% logged in November 2022.

Mr. Cochrane said trade may improve as China announced on Tuesday it will be stepping up its policy support for its economy, focusing on boosting domestic demand.   

“I’m expecting that second-half trade will begin looking better. That is assuming that the economy continues to grow in the developed economies and that Chinese stimulus has a good impact on domestic demand and import demand from China,” he said.   

While the Philippine tourism sector has improved, Mr. Cochrane noted that visitor arrivals from China are at about 18-20% of their pre-pandemic levels.

Data from the Department of Tourism showed Chinese visitor arrivals reached 114,663 as of end-June. This accounts for 4.24% of the total number of foreign tourists.

The Philippine government’s new infrastructure projects have also added to positive investor sentiment, especially if the projects are finished on time, Mr. Cochrane said.   

The Philippine government hopes to spend 5.3% of GDP or around P1.29 trillion on infrastructure this year.

INFLATION RISKS
Meanwhile, Moody’s Analytics sees Philippine inflation averaging to 5.6% this year, a tad higher than the central bank’s 5.4% forecast. It expects inflation to ease to 2.5% in 2024.

Even though inflation has started coming down from its 8.7% peak in January, there are still significant headwinds, particularly on food inflation, Mr. Cochrane said.

“I was less worried about inflation until Russia’s exit from the Black Sea grain agreement. There could be significant increases in wheat prices. The Philippines doesn’t buy a lot of wheat directly from Ukraine, but with global price rising, it’ll impact food prices in the Philippines,” he said.   

Last week, Russia exited from a deal allowing Ukrainian grain exports via the Black Sea, raising fears this could push global grain prices higher and reignite inflation.

Prices of global crude oil have also gone up amid tighter supply, Mr. Cochrane said.

“We expected some increase, prices are still within a range that will allow for continued growth, but if it goes up much higher, if say for example, Saudi Arabia cuts production more or Russia cuts production more, we could see energy prices going back to that position of really giving a push to a renewed inflation,” Mr. Cochrane said.   

The El Niño weather pattern and the broader issue of climate change may also cause fuel volatility in food prices worldwide.   

“The experts have indicated that one of the biggest impacts of climate change could very well be a reduction in agricultural output globally and then an increase in prices,” Mr. Cochrane said.

“Right now, we’re seeing that impact from the potential impact from India as they are blocking exports of certain grains of rice,” he said.   

India last week ordered a halt to its largest rice export category to calm domestic prices, which climbed to multi-year highs in recent weeks as disruptive weather threatened production. India accounts for 40% of world rice exports.   

“If that becomes a common theme across the world, of countries trying to protect their own local consumers and put roadblocks in front of exports, tightening trade patterns might make agricultural goods more expensive,” Mr. Cochrane said.   

He hopes that discussions among countries will help address likely food protectionism and ease any impact from unilateral disruptions of food trade.   

Risks to the inflation outlook may prompt the Bangko Sentral ng Pilipinas (BSP) and other central banks around the world, to keep interest rates elevated for some time.

“I think that central banks in this part of the world, including the BSP, might be hesitant to begin that easing cycle which we expect sometime probably in this first or second quarter of next year,” Mr. Cochrane said.   

He noted that the BSP will monitor any possible rebound in inflation while keeping a close eye on the future policy decisions of the US Federal Reserve and the European Central Bank.

“If there is any uptick in food prices, even though these are externally determined and not so much determined by domestic demand, it’s going to put a little bit of a roadblock in front of the central banks in terms of easing monetary policy too quickly. They’re going to want to make sure that at least inflation expectations stay low,” he said.   

The Monetary Board has hiked the key interest rate by 425 basis points to 6.25% from May 2022 to March 2023.   

BSP Governor Eli M. Remolona earlier said it is premature to talk about rate cuts, given that inflation is still elevated and global financial conditions may continue to tighten.   

The BSP will meet on Aug. 17 to discuss policy. — Keisha B. Ta-asan with Reuters

PHL confident it will bring down poverty rate to 9% by 2028

Sea waves slam makeshift houses along the coastal area of Baseco, Tondo in Manila, July 26, 2023. — PHILIPPINE STAR/ EDD GUMBAN

THE PHILIPPINES is on track to reducing poverty incidence rate to 9% by 2028, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.

“I think given the recent developments and economic data we’ve seen, we are definitely on track,” he said during the Post-State of the Nation Address (SONA) Discussion in Pasay City on Wednesday.

Poverty incidence among individuals rose to 18.1% in 2021, from the 16.7% recorded in 2018, latest data from the Philippine Statistics Authority (PSA) showed. This is equivalent to 19.992 million Filipinos living in poverty in 2021.

Poverty incidence refers to the proportion of Filipinos whose incomes fell below the per capita poverty threshold from the total population.

Under the Philippine Development Plan, the government is targeting to reduce the poverty incidence rate to 16.4% this year, to 13.2% by 2025, and to 9% by 2028. It aims to have a “prosperous, predominantly middle-class society where no one is poor” by 2040.

Mr. Balisacan told reporters that sustained growth will be crucial to meet the Marcos administration’s poverty reduction goal.

“The requirements are we keep our growth target. We make that growth inclusive by ensuring that everyone benefits from that growth, even those who are suffering from shocks,” he said.

This year, the government is targeting 6-7% gross domestic product (GDP) growth and 6.5-8% growth from 2024 to 2028.

Job creation will also help pull people out of poverty, the NEDA secretary said.

“What’s the socioeconomic development agenda? Primarily it’s about creating jobs, not just more jobs but better-quality jobs so that we can achieve poverty reduction to single-digit levels,” Mr. Balisacan said.

The Philippines’ unemployment rate in May eased to 4.3%, from 6% in the same month last year. The number of unemployed Filipinos also decreased by 760,000 to 2.17 million from a year ago.

Mr. Balisacan said it is important to improve job quality and employability of workers, as well as enhance human capital development.

The skills of workers should also “match the kinds of jobs needed by emerging sectors like the internet, artificial intelligence, the green economy and so on,” he added.

Ramping up the creation of quality jobs will also require massive investment, Mr. Balisacan said.

“Without investment, there’s no way to improve the quality of jobs. You have to build factories, plants, roads, bridges, and so on to employ more people in areas where our people can earn decent incomes,” he said.

“That’s the challenge, and we are in a hurry because many of our neighbors have left us long ago, but now we have the opportunity… If we get our act together, there’s no reason we can fail this time.”

Price stability will also be crucial in supporting poverty reduction, Mr. Balisacan said.

With more jobs and stable prices, the “effects of economic growth on poverty will be quite strong,” he added.

While he still expects progress on poverty reduction, he noted this may not be linear as elevated inflation dampened the impact of economic growth.

“Usually, when inflation is low and economic growth is high, then the rate of poverty reduction is faster,” he said. “This time, 2023, and the latter half of 2022, inflation was elevated, and the pandemic also made inflation and prices elevated. That is what dampens economic recovery in poverty.”

Inflation has remained elevated since last year. June saw inflation slowing to a 14-month low of 5.4%, but it still marked the 15th straight month of inflation exceeding the central bank’s 2-4% target band.

Average inflation stood at 7.2% in the first half. The Bangko Sentral ng Pilipinas has said inflation is on a downtrend, expecting it to average 5.4% this year. — Luisa Maria Jacinta C. Jocson

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