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Philippine stock market starts trading after delayed open

REUTERS

The open of trading on the Philippine Stock Exchange was delayed for nearly two hours on Monday due to a connection issue, in the latest glitch that may put off foreign traders.

Trading on the PSE, which usually starts at 9:30 a.m. Manila time, began Monday at 11:10 a.m., with the benchmark index dropping as much as 1%.

The open “was delayed due to a system connectivity issue,” PSE President and CEO Ramon Monzon said in a memorandum to trading participants.

The Philippines’ benchmark stock index has dropped about 5% year-to-date, versus the MSCI Asia Pacific Index’s about 3% gain, weighed down by factors including US market volatility.

“We are quite used to this” and the trading delay’s impact will likely be minimal, said Raoul Santos, president of RCBC Securities Inc. in Manila. “On the foreign side, there may be some clients holding back on their buying due to this system instability,” he added.

The PSE is no stranger to trading disruptions. In January last year, the bourse said a technical issue caused a two-hour trading halt, frustrating investors.

The Philippine bourse shifted to digital trading after permanently shutting down its trading floor in 2022. Stock-trading activities have been suspended in the past due to adverse weather and closure of clearing services.

PSE officials didn’t respond to a request for further comment. — Bloomberg

After the gold rush: Asian, Mid-East sellers flood jewelry market

STOCK PHOTO | Image by Arek Socha from Pixabay

MUMBAI – As gold prices jump to successive highs, jewelers across Asia and the Middle East are grappling with displays losing their sparkle as customers race to cash in their old jewelry and coins.

If the rush to sell continues, it could ultimately lead to lower imports into major markets, potentially tempering gold’s rally, retailers and industry experts said.

Spot gold topped $3,000 an ounce for the first time on March 14, and continued climbing last week to bring year-to-date gains to more than 15%, driven by a powerful combination of political and financial uncertainty.

The stunning run higher follows an almost 30% rise in 2024, and has driven increased business for often-overlooked scrap gold buyers in Zaveri Bazaar, India’s largest bullion market.

Textile trader Unmesh Patel said he had made a return of more than 25% selling four 10-gram gold coins bought less than seven months ago after the Indian government cut import duties on the metal.

“I just decided to sell instead of waiting for prices to go up even more,” he said.

Domestic gold prices MAUc1 in India have risen more than 32% since it cut import duties in July, to a record high of 89,796 rupees per 10 grams.

“If prices stay this high all year, India’s overall demand could drop by more than 30% in 2025,” said Prithviraj Kothari, president of the India Bullion and Jewelers Association (IBJA).

“Buyers are finding it hard to keep up with the price surge, and their budgets aren’t growing either,” he added.

WEDDING SEASON SLUMP
Although India’s wedding season is in full swing, jewelers are seeing less than half their typical customer traffic, according to dealers.

Even those who are making purchases, such as bride-to-be Vaishnavi M., are opting to exchange old jewelry for new to minimize costs.

“The rates are so high that it would completely mess with my wedding budget…the plan is to exchange some of my mother’s old jewelry,” said Vaishnavi M. in the southern state of Kerala.

India’s scrap gold supply totaled 114.3 tons last year, a figure the World Gold Council forecasts will increase in 2025.

India fulfils the majority of its gold requirement through imports, while China, the biggest consumer, also meets two-thirds of demand via imports.

Jewelry hubs in the Middle East are seeing a similar dip in demand, according to a Dubai-based bullion dealer.

“A lot of Indian tourists usually shop in Dubai to avoid import taxes, but even they’re holding back,” the dealer said.

About 60% of gold demand in the UAE is for jewelry and when the prices are high, consumers purchase lower-weight products, said Andrew Naylor, Head of Middle East and Public Policy, World Gold Council.

“However, our data shows that the value of jewelry bought last year increased, despite lower volumes,” he said.

In China, the lackluster retail purchasing seen in 2024 is continuing. With jewelers charging extra premiums for craftsmanship, people who just want to hold some physical gold will buy coins and bars, said Peter Fung, head of dealing at Wing Fung Precious Metals.

Other major Asian markets have also seen a slump in demand for gold jewelry, with more sellers than buyers.

Consumers are shifting towards cheaper jewelry or opting to sell their existing gold or use it as loan collateral rather than making new purchases.

Brian Lan, managing director at GoldSilver Central based in Singapore, said close to five shops had recently opened around Chinatown selling gold-plated silver.

“We have seen some clients who go home and look for jewelry that they don’t wear, or is broken, and bring it back to liquidate it,” Lan added.

These trends highlight the delicate balance between gold’s role as a traditional cultural commodity and its value as a financial asset.

Looking ahead, analysts say the outlook for jewelry demand remains gloomy, although investment demand for bullion is likely to remain strong. — Reuters

Australia to speed up $1 billion in defense spending in budget, says defense minister

STOCK PHOTO | Image by Rebecca Lintz from Pixabay

AVALON – Australia will bring forward A$1 billion in defense spending in Tuesday’s federal budget to boost its military capability, including guided weapons manufacture, an AUKUS submarine base and a frigate program, Defense Minister Richard Marles said on Monday.

Australia and other United States security allies are under pressure from United States President Donald Trump to increase defense spending.

Mr. Marles said the federal budget would contain an increase of A$10.6 billion (US$6.66 billion) for defense over the next four years, part of a previously announced A$50 billion boost over a decade, which he said was the most significant increase in defense spending since the end of the Second World War.

“Part of the A$10.6 billion sees bringing forward an additional billion dollars and that is because of the need to accelerate Australia’s capability and development,” Mr. Marles said at the Avalon Air Show in Victoria.

“This will see us have ready HMAS Stirling, the Henderson Defense Precinct for the establishment of the Submarine Rotational Force West. This will see us move forward at a faster pace in establishing the Guided Weapons and Explosives Enterprise,” he added.

Up to four United States and one British-commanded nuclear-powered submarines will rotate through Australia’s biggest naval base, HMAS Stirling in Western Australia, from 2027 under AUKUS.

The earlier spending will also accelerate the purchase of a frigate into the service fleet this decade, he said.

On Monday, Australia said it had received the first two of 42 High Mobility Artillery Rocket Systems (HIMARS) launcher vehicles ordered from Lockheed Martin, while the manufacture of guided multiple launch rocket systems (GMLRS) would begin in Australia this year. — Reuters

US delegation to visit Greenland as Trump talks of takeover

RAWPIXEL.COM

WASHINGTON – A high-profile U.S. delegation will visit Greenland this week to visit an American military base and watch a dogsled race as President Donald Trump promotes the idea of a U.S. annexation of the strategic, semi-autonomous Danish territory.

Usha Vance, wife of Vice President JD Vance, will lead the delegation that includes White House national security adviser Mike Waltz and Energy Secretary Chris Wright.

Mr. Waltz and Mr. Wright plan to visit the Pituffik space base, the U.S. military base in Greenland. The White House said they will get briefings from U.S. service members there.

They will then join Mr. Vance to visit historical sites and attend the national dogsled race.

Brian Hughes, spokesman for the White House National Security Council, said the U.S. team is “confident that this visit presents an opportunity to build on partnerships that respects Greenland’s self-determination and advances economic cooperation.”

“This is a visit to learn about Greenland, its culture, history, and people and to attend a dogsled race the United States is proud to sponsor, plain and simple,” Mr. Hughes said.

Mr. Trump has made U.S. annexation of Greenland a major talking point since taking office for a second time on January 20. Greenland’s strategic location and rich mineral resources could benefit the U.S. It lies along the shortest route from Europe to North America, vital for the U.S. ballistic missile warning system.

The governments of both Greenland and Denmark have voiced opposition to such a move.

The Greenlandic government, which currently is in a caretaker period after a March 11 general election won by a party that favors a slow approach to independence from Denmark, did not reply to requests for comments.

Danish Prime Minister Mette Frederiksen said in a written comment reacting to news of the visit that “this is something we take seriously.” She said Denmark wants to cooperate with the U.S., but it should be cooperation based on “the fundamental rules of sovereignty.”

She added that dialogue with the U.S. regarding Greenland would take place in close coordination with the Danish government and the future Greenlandic government. — Reuters

Thai PM faces censure motion as opposition takes aim at father’s influence

PIXABAY

BANGKOK – Thai Prime Minister Paetongtarn Shinawatra faces a no-confidence motion in parliament starting on Monday, with the opposition set to grill her over an underperforming economy and her powerful father’s perceived influence over her administration.

Despite lukewarm ratings in opinion polls, Paetongtarn comes into the debate in a firm position, with no signs of turmoil in a ruling coalition that commands a parliamentary majority, making it unlikely the motion will prosper when it goes to a vote on Wednesday.

The opposition People’s Party has accused Paetongtarn of taking direction from her father, divisive political heavyweight Thaksin Shinawatra, a billionaire former premier who is banned from holding office over a conviction for conflicts of interest and abuse of power that kept him in self-exile for 15 years.

Thaksin, Thailand’s most influential and polarizing politician, has loomed large over Thai politics for the past 24 years. He returned home in 2023 and spent six months in detention in hospital under a government led by the Pheu Thai Party he founded, before being released on parole.

He has spoken openly and frequently about policies that include legalizing gambling and adopting cryptocurrency and championed a $14 billion handout scheme to stimulate the economy, all of which the Pheu Thai-led government has pursued.

Paetongtarn has insisted her government is not under anyone’s influence, while Thaksin, 75, has said he is retired and only offers advice.

The government’s economic measures so far have yet to spur significant growth in Southeast Asia’s second-largest economy, with last year’s 2.5% expansion far adrift of regional peers.

The anchors to growth including structural issues and household debt of 16.34 trillion baht ($486 billion), or 89.0% of gross domestic product, among the highest ratios in Asia, which the opposition says the government is not addressing.

Lawmakers will be unable to name Thaksin during the motion due to parliamentary rules that say outsiders should not be mentioned. After weeks of debate on the issue, the house speaker has allowed “family member” to be used.

“The opposition’s tactic to delegitimize Paetongtarn’s leadership is not new because she already faces criticism from society,” said Yuttaporn Issarachai, a political scientist at Sukhothai Thammathirat Open University.

“The focus on Thaksin’s role and interference makes it too political and not beneficial to public, instead of raising issues on the economy and security,” Yuttaporn said.

Paetongtarn, 38, took over as premier in August after political ally Srettha Thavisin was ousted by a court over an ethics violation. She is the fourth member of the Shinawatra family to hold the top post. — Reuters

Israel panel approves 2025 budget, set for final vote in parliament by end-March

Supporters of bereaved family members and the families of hostages who were kidnapped during the deadly Oct. 7 attack by Palestinian Islamist group Hamas, protest on a Day of Disruption by anti-government protest groups outside the Knesset, Israel’s Parliament in Jerusalem, May 20, 2024. — REUTERS

JERUSALEM – Israel’s parliamentary finance committee late on Sunday approved the 2025 state budget, setting up a final vote by lawmakers before its March 31 deadline to prevent the government’s collapse.

The committee cleared the long-delayed wartime budget after a 13-hour debate in which opposition members accused the government of a lack of transparency over spending. The Finance Ministry said that these funds are not yet subject to a government decision and therefore do not appear in the budget.

The total budget will be 756 billion shekels ($203.5 billion), or 620 billion excluding debt servicing for a 21% rise in spending over 2024. The defense budget alone will be a record 110 billion shekels, while the deficit is set at 4.9% of gross domestic product.

Israel spent $31 billion on its military conflicts in Gaza and Lebanon in 2024 and the government vowed to sharply boost defense spending going forward.

While failure to approve the budget by the end of March would trigger snap elections, it appears there is little chance the government will collapse.

Finance Minister Bezalel Smotrich had hoped the budget would be approved by the end of 2024, but political infighting among coalition partners delayed the final vote.

It was not clear when the full parliament would vote on the budget, which features a series of tax hikes to prevent the deficit – which was 6.8% in 2024 and led to credit rating downgrades – from becoming unsustainable while Israel finances its military conflicts.

“This is not an easy budget in a difficult period. We did everything we could and ultimately succeeded in reducing many of the taxes that the Treasury had proposed, thereby easing the burden on citizens,” said committee chair Moshe Gafni.

“The reality we are living in is extremely difficult, and the responsibility shown by the members is commendable.”

Opposition member Vladimir Beliak called the budget “socially and morally disastrous”.

“Credit rating agencies are reviewing the budget and are considering another downgrade for Israel. If the finance minister’s policies continue, there is a high likelihood that taxes will need to be raised again by the end of the year,” he said. — Reuters

Sound Sphere AI Run raises awareness on hearing health at UP Diliman

The finish line at the Sound Sphere AI Run.

Hundreds of participants gathered at the University of the Philippines Diliman last March 16 for the inaugural “Sound Sphere AI Run: Changing Mindsets, Changing Lives,” in celebration of National Hearing Month.

Organized by Manila Hearing Aid, the event brought together doctors, professionals, families, and individuals to promote hearing health awareness and highlight innovations in hearing technology.

The main stage of the Sound Sphere AI Run, serving as the center for discussions and inspiring stories about hearing health.

Beyond the race, Manila Hearing Aid set up booths offering free hearing tests and information on hearing protection. These interactive stations educated attendees on the risks of hearing loss, the benefits of early detection, and strategies for maintaining auditory health.

According to Dr. Liza Abaño-Robles, president of Manila Hearing Aid, the event was designed not only to support individuals with hearing loss but also to educate the public on early detection and prevention.

Dr. Liza Abaño-Robles, president of Manila Hearing Aid, kicks off the Sound Sphere AI Run with an inspiring message on the importance of hearing health and innovation in audiology.

“Our mission has always been to help individuals achieve better hearing and a better quality of life. Many people assume hearing loss is only a concern for those already affected, but awareness and prevention are just as important,” Dr. Abaño-Robles added.

She also noted that many Filipinos do not realize how exposure to loud environments can cause long-term damage. “In the Philippines, awareness about hearing health remains low. Many people do not realize that hearing loss is not just part of aging. Exposure to loud noise — whether from concerts, clubs, or daily activities — can cause irreversible damage.”

Carlos Jose Bate, general manager of Manila Hearing Aid, wraps up the Sound Sphere AI Run, celebrating the success of the event and its impact on hearing health awareness.

A 2020 study by the University of Santo Tomas reported that 15% of Filipinos experience moderate to severe hearing loss. Many cases go undiagnosed until the impairment affects daily activities, according to the Manila Hearing Aid president.

“Hearing health is not something you should delay. Just like any medical condition, early diagnosis is crucial,” Alyssa Patricia Co-Ong, product audiologist at Phonak, told BusinessWorld. “When someone loses their ability to hear clearly, it’s not just a physical issue; it affects their emotional and mental well-being as well.”

Alyssa Patricia Co-Ong, in-country product audiologist for Sonova Asia, demonstrates the advanced features of Phonak’s latest hearing aid.

“Filipinos are very sociable,” she added. “We’re always in the community, engaging in activities that involve gatherings. When you have hearing loss and cannot fully participate, it can lead to feelings of isolation.”

Advancing hearing technology

One of the event’s highlights was the introduction of the Phonak Audéo Sphere Infinio, an AI-powered hearing aid designed to make conversations clearer by filtering out background noise, even in busy environments.

“This run is more than just a race — it’s a movement to inspire change and champion hearing accessibility,” Dr. Abaño-Robles said. “With the launch of the Phonak Audéo Sphere Infinio, we are introducing a breakthrough innovation that improves the listening experience for individuals with hearing loss.”

Utilizing the DEEPSONIC chip, the device differentiates speech from surrounding noise in real-time, allowing users to hear effortlessly from any direction. The technology also reduces listening fatigue, making communication smoother and more natural.

Influencer Andrea Kyra Mahinay wears her Phonak hearing aid during the Sound Sphere AI Run.

Designed for individuals with active lifestyles, the AI-powered hearing aid addresses hearing imbalances that can affect movement, situational awareness, and overall well-being.

“Our hearing aids are all about lifestyle. We want people with hearing loss to enjoy a good quality of life. We don’t want them to miss out on hobbies, work, or school,” Ms. Co-Ong explained.

Breaking the stigma

Experts at the Phonak Dome guide attendees through hands-on demonstrations and trials of Phonak’s AI-powered hearing aids.

Dr. Abaño-Robles stressed that many individuals neglect early signs of hearing loss. “We take our hearing for granted. But as we age, it naturally declines — just like vision. The earlier we protect it, the better.”

Manila Hearing Aid offers free hearing aid trials, allowing individuals to experience the benefits before making a commitment. The process begins with a diagnostic test, followed by a trial period where patients can wear the device in real-life settings such as shopping malls.

“As we age, our ability to pick up speech over noise decreases. Early testing can help us manage these changes and find the right support,” the Manila Hearing Aid president added.

The Phonak Dome as an interactive space for participants to explore and experience the latest hearing aid technology firsthand.

She also advised people to be mindful of their hearing health by avoiding excessive noise exposure.

“If you’re in a loud environment, try to limit exposure. When you have a cold, don’t ignore it, as an infection can lead to long-term damage. Even something as simple as blowing your nose too hard or experiencing air pressure changes on flights can affect your ears.”

Similarly, Ms. Co-Ong advocated for regular hearing checkups. “Hearing health is not something you should delay. The moment you experience any difficulty, see a doctor and get tested right away.”

On the other hand, the Phonak product audiologist acknowledged the persistent stigma surrounding hearing aids, noting that many people hesitate to seek help due to concerns about appearance or social perception.

“You cannot put a price on quality of life,” Ms. Co-Ong emphasized. “If you have hearing loss, don’t be ashamed. Wearing a hearing aid is just like addressing any other medical condition — it helps you stay connected with family, friends, and the world around you.”

 


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Philippine wild card Alex Eala stuns Madison Keys

ALEX EALA — GLOBE

Australian Open champion Madison Keys was dumped out of the Miami Open third round on Sunday, falling 6-4 6-2 to Philippine wild card Alexandra Eala, while Novak Djokovic earned a record-setting 411th ATP Masters 1000 level match win.

For 19-year-old Eala, the upset victory over the American fifth seed extended her dream run in Miami where she has now toppled two Grand Slam champions having beaten 2017 French Open winner Jelena Ostapenko in the second round.

“I am just in disbelief,” she told Tennis Channel. “I knew I could win from the start but the chances were low given that she is a great player, but I think my belief and the trust I had in myself is what pushed me through.”

Eala, who has trained at Rafa Nadal’s academy in Mallorca since she was 13, required a medical timeout for what appeared to be a leg injury but was a force from the baseline against Keys, who reached the Indian Wells semi-final last week.

Up next for Eala, who has not dropped a set in Miami, will be Spanish 10th seed Paula Badosa, a 6-3 7-6(3) winner over Dane Clara Tauson.

Former champion Iga Swiatek earned a 7-6(2) 6-1 win over Belgian 27th seed Elise Mertens that made the Polish second seed the first player to reach the last 16 of a WTA 1000 event in 25 consecutive appearances.

Swiatek built a seemingly comfortable 5-2 lead in the first set but Mertens managed to claw back to 5-5 before the Pole ran away with the tiebreaker and breezed through the second frame.

CONFIDENCE HIGH
“I’m happy that I got my level up in the tiebreaker to close it in two sets. Also in the second set I felt like I was playing good, big confidence,” said Swiatek. “Yeah, overall I’m happy with the performance and how I worked through some issues.”

Up next for Swiatek will be Ukrainian Elina Svitolina, who beat Czech 15th seed Karolina Muchova 6-2 3-6 6-2 and is looking to build on her run to the Indian Wells quarter-final where she lost to eventual champion Mirra Andreeva.

American fourth seed Jessica Pegula rallied to beat Russian Anna Kalinskaya 6-7(3) 6-2 7-6(2) and will face Ukraine’s Marta Kostyuk in the fourth round.

Six-times champion Djokovic moved into the fourth round with a 6-1 7-6(1) triumph over Argentine lucky loser Camilo Ugo Carabelli that moved the Serbian fourth seed ahead of Nadal and into top spot on the all-time list of Masters 1000 match wins.

Djokovic, who is also seeking a record seventh Miami title, will next face Lorenzo Musetti after the Italian 15th seed beat Canada’s Felix Auger-Aliassime 4-6 6-2 6-3.

In other men’s action, Bulgarian 14th seed Grigor Dimitrov, who lost in last year’s final, was a 6-7(3) 6-4 7-5 winner over Russian Khachanov and set up a clash against either Belgian David Goffin or American Brandon Nakashima.

American Sebastian Korda upset Greek ninth seed Stefanos Tsitsipas 7-6(4) 6-3 and will next face either Spaniard Jaume Munar or Frenchman Gael Monfils. — Reuters

SM Investments Corp.’s Annual Stockholders’ Meeting to be held on April 30

 


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Lower IPO float creates uneven field

BW FILE PHOTO

By Revin Mikhael D. Ochave, Reporter

THE RECENTLY ANNOUNCED move of the Philippine Stock Exchange (PSE) to lower the minimum public ownership (MPO) for large initial public offerings (IPOs) may not be good for investor confidence as it creates an “uneven playing field,” stock market analysts said.

“It’s not good optics for the PSE, since they have been fairly active in penalizing companies that fall below public float requirements, and this might be viewed as the regulator bending the rules a little bit to accommodate big corporate interests,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said in a Viber message that the lower MPO creates an uneven playing field.

“If exemptions become the norm, it might create an uneven playing field where larger firms get more leniency than smaller ones, potentially discouraging fair competition,” she said.

PSE President and Chief Executive Officer Ramon S. Monzon said last week that the market operator has secured approval from the Securities and Exchange Commission (SEC) to lower the public float requirement to encourage undecided companies to proceed with their listing plans.

IPO-bound companies can initially comply with a 15% public float, as long as they commit to raising the public float to 20% within two years.

Mr. Monzon has said the move is not permanent and will be revisited in the coming years.

“We have a two-year window, then if that’s not working, we will extend it for another two years,” he added.

The PSE’s move comes as GCash, controlled by Globe Fintech Innovations (Mynt), plans to go public later this year.

Bloomberg quoted Globe Telecom, Inc. President and Chief Executive Officer and Mynt Chairman Ernest Cu as saying that the GCash IPO will partly depend on regulators agreeing to lower the public float to 10-15% for bigger offerings.

However, Mr. Garcia said relaxing the public float requirement for IPOs is not in line with ongoing efforts to improve corporate governance standards in the country.

“A lower percentage of public ownership means that the public is a smaller minority that can easily be overruled or ignored when making corporate decisions,” he said.

“It would also have long-term implications in terms of the attractiveness of the Philippine market to investors. The requirement to raise the public ownership level up to 20% would also provide an overhang for those subscribing to the IPO, since there is a sure dilution of your stake in the next two years,” he added.

Ms. Estacio-Cruz said a prolonged lower public float may also “lead to reduced stock liquidity and higher price volatility, making the market less attractive for retail investors.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the lower public float for IPO-bound firms should only be a temporary relief.

“This could be a temporary regulatory reprieve while there is market volatility that somewhat reduced market interest. It could be reinstated after some time especially once market conditions improve, since these are part of market reforms,” Mr. Ricafort said.

“However, there should be a delicate balance to encourage more companies to list shares in a challenging market environment,” he added.

Meanwhile, China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the recent move by the PSE will help persuade some companies that are facing difficulty in meeting the 20% MPO.

“Ideally, we would like listed companies to have a high public float to enable more investors to participate in wealth creation, promote better corporate governance standards, and enhance market liquidity,” he said.

“Public float and liquidity are particularly important to foreign investors and are critical criteria for inclusion in global and regional equity indices. Thus, if we would like to attract more foreign capital flows into our stock market, it would make sense to promote measures and cultivate conditions that boost public ownership and trading levels,” he added.

The local bourse has yet to see an IPO this year. However, some of the expected public listings include GCash, Pangilinan-led water concessionaire Maynilad Water Services, Inc., and Cebu-based fuel retailer Top Line Business Development Corp.

The PSE is expecting six IPOs this year.

Federal Reserve pause may delay further BSP easing — analysts

THE EXTERIOR of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, D.C., US, June 14, 2022. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE US Federal Reserve’s latest pause and cautious stance could push the Bangko Sentral ng Pilipinas (BSP) to delay its own easing cycle, analysts said.

“If this policy drift continues, that would somewhat limit the pace of monetary easing by the BSP,” GlobalSource Partners country analyst Diwa C. Guinigundo said in a Viber message.

“While some people dream of a US Fed-delinked BSP, we believe the BSP will correctly be guided by data and information to avoid a possible market backlash from a reduced interest rate differential between the US Fed and the BSP.”

The US central bank last week held its benchmark overnight rate steady in the 4.25%-4.5% range amid expectations of rising prices as President Donald J. Trump threatens to impose tariffs on all its trading partners.

While Fed policy makers still expect the central bank to deliver two quarter-percentage-point rate cuts by the end of this year, that is largely due to weakened economic growth offsetting higher inflation, and what Fed Chair Jerome H. Powell called the “inertia” of not knowing what else to do given the muddled outlook, Reuters reported.

“Clearly, the US Fed tilted in favor of sustaining economic growth over its second goal of maintaining price stability even as it described it as ‘elevated,’” Mr. Guinigundo said.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the Fed’s decision signals a “more cautious but still dovish stance, driven by persistent inflation risks and elevated economic uncertainties.”

“This approach suggests the Fed wants to retain flexibility, which could influence emerging markets like the Philippines to also proceed more cautiously with monetary easing,” he added.

Investment banker and Managing Director at China Bank Capital Corp. Juan Paolo E. Colet also noted that while the Fed is expected to resume easing eventually, there is still “a lot of uncertainties on the timing and magnitude of rate cuts.”

This could prompt the BSP to slow its own pace of rate cuts, analysts said.

“While both the US and the Philippines are struggling with serious domestic political and economic issues, foreign investors would always be conscious of interest rate differentials which, in turn, could trigger capital flows and weakness in the peso,” Mr. Guinugundo said.

The Philippine central bank last month kept its key rate on hold at 5.75%, citing the risk of global trade uncertainties. Since August, it reduced interest rates for three straight meetings for a total of 75 basis points (bps) worth of rate cuts.

“For BSP, this could delay its own rate cuts slightly, especially if the Fed’s caution leads to short-term volatility in capital flows or pressure on the peso,” Mr. Rivera said.

He said the central bank will need to balance the inflation outlook and economic growth against risks of a depreciating peso and weakening investment outflows if it moves ahead of the Fed.

The peso closed at P57.33 per dollar on Friday, weakening by 10.8 centavos from its P57.222 finish on Thursday.

“The Fed’s decision not to lower policy rates will keep the US at the same level of strength and thus easing of rates on our part will cause our peso to depreciate,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said in an e-mail.

“Once we reduce our policy rates, investors will likely shift their position to the US dollar. Furthermore, high tariffs in the US can limit our exports making the demand for the peso lower, thus reinforcing the possibility of a depreciation.”

The US dollar is considered a safe-haven currency as investors often flock to the dollar during times of financial crisis.

Mr. Guinigundo also noted through the exchange rate pass-through, which could be inflationary. This means there is scope for the BSP to “imbibe more cautiousness into its calculus,” he added.

Though it expects annual inflation to remain within the 2-4% target, the BSP has said there is a chance inflation could overshoot the target range in the second half of this year amid base effects.

The central bank also earlier flagged the potential inflationary pressures from higher global oil and non-oil prices, peso depreciation, and recent above-expectation inflation readings.

Accounting for risks, the BSP forecasts inflation to average 3.5% this year and next year.

“Thus, the combined high tariffs and the low interest rates in the US makes it very difficult for the BSP to ease interest rates as the peso depreciation and prospective increase in aggregate demand can cause inflation,” Mr. Lanzona said.

“Easing the interest rate will still be acceptable if it raises consumption to spur growth. What we do not need is a substantial decrease that can cause significant inflation because of these developments.”

RATE CUT OUTLOOK
The BSP could cut by a total of 50 bps this year, Mr. Guinigundo said, “all other things being equal.”

“We are sure the market has already priced in such magnitude of monetary easing on top of the monetary expansion through the aggressive reduction in the required reserve ratio.”

“With such dual steps by the BSP, that should challenge the domestic banks to respond and start easing their lending rates and further improve the credit condition faced by Philippine business,” he added.

For his part, Mr. Rivera said that the timing and pace of rate cuts could be delayed to the latter half of the year.

“This would give the BSP more clarity on inflation trends and Fed actions while avoiding financial market instability,” he said.

“A delay in easing could keep borrowing costs higher for longer, slightly slowing domestic demand, but it would also anchor currency stability and maintain investor confidence in the short term.”

He added that the BSP may choose to adopt a “gradual and data-dependent approach to avoid undue risk to financial and external stability.”

“If local inflation continues to trend lower and the peso remains stable, the BSP can diverge a bit from the Fed in terms of timing by cutting rates ahead, as long as our country maintains a minimum 100-bp policy rate differential with the US,” Mr. Colet said.

He expects the Monetary Board to cut by 25 bps at its next rate-setting meeting on April 10, as well as another 25-bp cut by the second half.

External debt service burden rises to $17.2 billion in 2024 — BSP data

JOHN GUCCIONE-PEXELS

THE COUNTRY’S external debt service burden jumped to $17.16 billion in 2024, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).

Central bank data showed debt servicing on external borrowings climbed by 15.6% to $17.16 billion last year from $14.85 billion in 2023.

Broken down, amortization payments rose by 15.3% to $8.94 billion in 2024 from $7.76 billion in the previous year.

Meanwhile, interest payments increased by 15.9% year on year to $8.22 billion in 2024 from $7.1 billion in 2023.

The BSP said that the debt service burden represents principal and interest payments after rescheduling.

This includes principal and interest payments on fixed medium- and long-term credits including International Monetary Fund credits, loans covered by the Paris Club and commercial banks’ rescheduling, and New Money Facilities.

It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service burden data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

Latest data from the BSP showed the Philippines’ outstanding external debt rose by 9.8% to $137.63 billion as of end-December 2024 from $125.39 billion in the same period in 2023.

This brought the external debt-to-gross domestic product (GDP) ratio to 29.8% at the end of 2024, higher than 28.7% at end-2023.

At end-2024, the external debt service burden as a share of GDP stood at 3.7%, up from 3.4% in the previous year.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rise in external debt payments was due to the National Government’s need to finance the budget deficit amid relatively higher interest rates.

“Large amounts of borrowings since the pandemic also increased both principal and interest payments, as some of them already started to mature,” he said.

“However, most of the country’s external debts are mostly medium- to long-term, thereby making debt servicing more manageable,” he added.

The NG’s budget deficit narrowed by 0.38% to P1.506 trillion in 2024 from P1.512 trillion in 2023. However, it exceeded the P1.48-trillion deficit ceiling set by the Development Budget Coordination Committee.

“Going forward, future external borrowings would be a function of budget deficit performance in the coming months amid tax and other fiscal reform measures to help narrow the budget deficit,” Mr. Ricafort said.

Further policy easing by the BSP could also help ease interest payments, he added.

From this year to 2027, the NG plans to source at least 80% of its borrowing program from domestic sources, and 20% from foreign lenders. The government previously adopted a 75:25 borrowing mix. — Luisa Maria Jacinta C. Jocson