Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 40

Hong Kong issues highest weather warning, as rains shut schools, courts and hospital wards

STOCK PHOTO | Image by Bruno from Pixabay

HONG KONG – Hong Kong’s weather bureau said its highest “black” rainstorm warning would remain in place until 11 a.m. on Tuesday, as heavy rains lashed the Asian financial hub, closing hospital wards, schools, and the jurisdiction’s courts and register offices.

The storms follow deadly flash floods in Southern China over the weekend, which left five dead in Guangdong province and prompted a large-scale search operation involving over 1,300 rescuers.

“Persistent rainstorm will cause serious road flooding and traffic congestion. Members of the public are advised to take shelter in a safe place,” the Hong Kong Observatory said in a bulletin on its website.

The authority reported 9,837 lightning strokes over the city between 6 a.m. (2200 GMT) and 6:59 a.m.

Up to 60-90mm (2.4-3.5 inches) of rain is hitting Hong Kong and the nearby Chinese city of Guangzhou per hour, according to China’s weather authority. Hong Kong typically receives an annual average of 2,220mm of rainfall, more than half of which usually falls from June through August.

The Hong Kong Stock Exchange remains open, having changed its policy to continue trading whatever the weather late last year.

Hong Kong’s hospital authority announced that accident and emergency wards will remain open, but general outpatient clinics and geriatric and psychiatric day hospitals will close due to the extreme weather.

While the judiciary said that courts, tribunals and register offices would open “as soon as practical within two hours after the ‘black’ rainstorm warning is cancelled,” in a statement.

The post office said that all its premises and delivery services would be suspended until the storm warning had passed.

The city’s airport has not reported any disruptions.

Hong Kong Disneyland remains open, with limited operations. – Reuters

US could require up to $15,000 bonds for some tourist visas under pilot program

YOUSEF ALFUHIGI-UNSPLASH

WASHINGTON – The U.S. could require bonds of up to $15,000 for some tourist and business visas under a pilot program launching in two weeks, a government notice said on Monday, an effort that aims to crack down on visitors who overstay their visas.

The program gives U.S. consular officers the discretion to impose bonds on visitors from countries with high rates of visa overstays, according to a Federal Register notice. Bonds could also be applied to people coming from countries where screening and vetting information is deemed insufficient, the notice said.

President Donald Trump has made cracking down on illegal immigration a focus of his presidency, boosting resources to secure the border and arresting people in the U.S. illegally.

He issued a travel ban in June that fully or partially blocks citizens of 19 nations from entering the U.S. on national security grounds.

Mr. Trump’s immigration policies have led some visitors to skip travel to the United States. Transatlantic airfares dropped to rates last seen before the COVID-19 pandemic in May and travel from Canada and Mexico to the U.S. fell by 20% year-over-year.

Effective August 20, the new visa program will last for approximately a year, the government notice said. Consular officers will have three options for visa applicants subjected to the bonds: $5,000, $10,000 or $15,000, but will generally be expected to require at least $10,000, it said.

The funds will be returned to travelers if they depart in accordance with the terms of their visas, the notice said.

A similar pilot program was launched in November 2020 during the last months of Trump’s first term in office, but it was not fully implemented due to the drop in global travel associated with the pandemic, the notice said.

A State Department spokesperson listed the criteria that will be used to identify the countries that will be affected, adding that the country list may be updated.

“Countries will be identified based on high overstay rates, screening and vetting deficiencies, concerns regarding acquisition of citizenship by investment without a residency requirement, and foreign policy considerations,” the spokesperson said.

The State Department was unable to estimate the number of visa applicants who could be affected by the change. Many of the countries targeted by Mr. Trump’s travel ban also have high rates of visa overstays, including Chad, Eritrea, Haiti, Myanmar and Yemen.

U.S. Travel Association, which represents major tourism-related companies, estimated the “scope of the visa bond pilot program appears to be limited, with an estimated 2,000 applicants affected, most likely from only a few countries with relatively low travel volume to the United States.”

Numerous countries in Africa, including Burundi, Djibouti and Togo also had high overstay rates, according to U.S. Customs and Border Protection data from fiscal year 2023.

A provision in a sweeping spending package passed in the Republican-controlled U.S. Congress in July also created a $250 “visa integrity fee” for anyone approved for a non-immigrant visa that could potentially be reimbursable for those who comply with visa rules. The $250 fee goes into effect on October 1.

U.S. Travel said that fee could hinder travel and said “if implemented, the U.S. will have one of, if not the highest, visitor visa fees in the world.” – Reuters

Philippine inflation at near six-year low in July, paves way for rate cuts

Inflation may have settled within the 1.3%-2.1% range in April, the central bank said. — PHILIPPINE STAR/MIGUEL DE GUZMAN

MANILA – Philippine consumer prices rose at their slowest pace in nearly six years in July as utility costs moderated and food prices declined, the statistics agency said on Tuesday, potentially allowing the central bank to cut interest rates later this year.

The consumer price index rose 0.9% year on year, the lowest rate since October 2019, and below the 1.1% median forecast in a Reuters poll. The July figure was also less than June’s 1.4%.

That brought the average rate in the seven-month period to 1.7%, below the central bank’s 2.0% to 4.0% target for the year.

Bangko Sentral ng Pilipinas Governor Eli Remolona told Reuters last week the central bank was on track to slash its key interest rate, currently at a two-and-a-half-year low of 5.25%, two more times this year, but the timing will depend on the outlook for growth and inflation.

“On balance, a more accommodative monetary policy stance remains warranted,” the central bank said in a statement following the data.

“Emerging risks to inflation from rising geopolitical tensions and external policy uncertainty will require closer monitoring, alongside the continued assessment of the impact of prior monetary policy adjustments,” it added.

The July inflation slowdown was partly driven by a faster annual decline in rice prices, which fell 15.9%, compared with June’s 14.3% drop. The statistics agency said the downward trend in rice inflation was likely to persist in the next few months.

However, core inflation – which excludes volatile food and energy prices – slightly quickened to 2.3% in July from 2.2% the prior month.

The Philippines, which has lowered its growth forecast for 2025 to 5.5%-6.5% from an earlier forecast of 6%-8%, will announce second quarter GDP data on August 7.

Mr. Remolona has expressed optimism the figure would be better than the previous quarter’s 5.4% expansion. The central bank will review the direction of interest rates on Aug. 28. — Reuters

Trump again threatens India with harsh tariffs over Russian oil purchases

REUTERS

WASHINGTON – U.S. President Donald Trump again threatened on Monday to raise tariffs on goods from India over its Russian oil purchases, while New Delhi called his attack “unjustified” and vowed to protect its economic interests, deepening the trade rift between the two countries.

In a social media post, Mr. Trump wrote, “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine.”

“Because of this, I will be substantially raising the Tariff paid by India to the USA,” he added.

A spokesperson for India’s foreign ministry said in response that India will “take all necessary measures to safeguard its national interests and economic security.”

“The targeting of India is unjustified and unreasonable,” the spokesperson added.

Mr. Trump has said that from Friday he will impose new sanctions on Russia as well as on countries that buy its energy exports, unless Moscow takes steps to end its 3-1/2 year war with Ukraine. Russian President Vladimir Putin has shown no public sign of altering his stance despite the deadline.

Over the weekend, two Indian government sources told Reuters that India will keep purchasing oil from Russia despite Mr. Trump’s threats.

India has faced pressure from the West to distance itself from Moscow since Russia invaded Ukraine in early 2022. New Delhi has resisted, citing its longstanding ties with Russia and economic needs.

Mr. Trump had already in July announced 25% tariffs on Indian imports, and U.S. officials have cited a range of geopolitical issues standing in the way of a U.S.-India trade accord.

Mr. Trump has also cast the wider BRICS group of developing nations as hostile to the United States. Those nations have dismissed his accusation, saying the group promotes the interests of its members and of developing countries at large.

 

CRUDE BUYER

India is the biggest buyer of seaborne crude from Russia, importing about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by trade sources.

India began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the Ukraine conflict, the Indian spokesperson said, calling it a “necessity compelled by global market situation.”

The spokesperson also noted the West’s, particularly the European Union’s, bilateral trade with Russia: “It is revealing that the very nations criticizing India are themselves indulging in trade with Russia.”

Despite the Indian government’s defiance, the country’s main refiners paused buying Russian oil last week, sources told Reuters. Discounts to other suppliers narrowed after Trump threatened hefty tariffs on countries that make any such purchases.

Indian government officials denied any policy change.

The country’s largest refiner, Indian Oil Corp, has bought 7 million barrels of crude from the United States, Canada and the Middle East, four trade sources told Reuters on Monday.

India also has been frustrated by Mr. Trump repeatedly taking credit for an India-Pakistan ceasefire that he announced on social media in May, which halted days of hostilities between the nuclear-armed neighbors.

The unpredictability of the Trump administration creates a challenge for Delhi, said Richard Rossow, head of the India program at Washington’s Center for Strategic and International Studies.

“India’s continued energy and defense purchases from Russia presents a larger challenge, where India does not feel it can predict how the Trump administration will approach Russia from month to month,” he said. – Reuters

Brazil dismisses calls to relocate COP30 amid Amazon city price surge

STOCK PHOTO | By Burn86 - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=54246088

BRASILIA – Brazil is resisting calls to move the global COP30 climate summit, scheduled for November, out of Belem, even as it faces mounting pressure over soaring accommodation prices in the Amazonian city.

“The COP will be in Belem, the leaders’ summit will be in Belem,” Andre Correa do Lago, the president of COP30, told reporters on Friday. “There is no plan B.”

Nearly every government in the world will gather at the annual U.N. summit to negotiate their joint efforts to curb climate change.

But concerns about logistics, rather than global climate policy, have dominated pre-summit chatter. Developing countries have warned that they cannot afford Belem’s accommodation prices, which have soared amid a shortage of rooms.

Last week, representatives of several countries pressured Brazil to move the conference away from Belem during an emergency meeting at the United Nations’ climate bureau, Correa do Lago said.

That brought to a head a steady stream of concerns raised by members of the U.N. climate secretariat, known as UNFCCC, with Brazil over the price and lack of accommodation in Belem for months.

At the same meeting of the COP bureau last month, the UNFCCC told participants it had provided advice to Brazil on potentially moving parts of COP30 – such as the section where world leaders speak – out of Belem to ease pressure on accommodation, according to a summary of the COP bureau meeting, seen by Reuters. Brazil rejected the idea, the summary said.

The UNFCCC declined to comment.

The Brazilian Presidency said in a statement “there is no discussion regarding a change in the host city for COP-30” and the Brazilian government “reiterates its commitment to holding a comprehensive, inclusive, and accessible climate conference.”

Para’s government told Reuters that is in constant contact with hotels, landlords and real estate agencies to “reinforce the need for responsibility and good practices”, but stated that Brazilian law does not allow government interference in a process that is governed by free negotiation.

Hotels in Belem are few, and despite requests from the government, are charging 10 or even 15 times what they charge regularly, Mr. Correa do Lago said.

“Maybe the hotels aren’t aware of the crisis they are creating,” he added.

Countries are not just concerned about accommodation. They are also worried about whether rooms being offered to delegations will be close enough together so negotiations can run smoothly, whether there will be enough food options and whether local airports will be able to handle the influx of visitors.

But Brazil has maintained that preparations for the conference are on track, with Brazilian President Luiz Inacio Lula da Silva showing no willingness to backtrack on his promise to present the Amazon rainforest to the world at COP30.

His administration has poured hundreds of millions of dollars into improving infrastructure in Belem to host the conference, helping state Governor Helder Barbalho attract public and foreign investment.

An old political ally, Mr. Barbalho helped Mr. Lula win the election in Pará in 2022, and will be a key element for the president’s campaign next year.

Mr. Lula and Mr. Barbalho did not immediately reply to a request for comment.

Brazil has offered 10 to 15 rooms at prices of up to $220 a night to delegations of countries considered to be among the least developed in the world. But that amount exceeds the $146 the United Nations offers to diplomats of such countries to pay for accommodation, meals and transport.

Infrastructure issues, Mr. Correa do Lago told reporters on Friday, “are interfering at a time, deep down, we should be using to discuss substantive issues.”

On Friday, Brazil opened a booking platform to the public. On Monday morning, the website showed a wait list of almost 2,000 people, but Reuters was able to access it after waiting an hour. It showed rates from $360 to $4,400 a night. – Reuters

Canada airdrops aid into Gaza, says Israel violating international law

WIKIMEDIA.ORG

Canada said on Monday it delivered humanitarian assistance through airdrops to Gaza, which has been under a devastating Israeli military assault for almost 22 months, with Ottawa again accusing Israel of violating international law.

“The (Canadian Armed Forces) employed a CC-130J Hercules aircraft to conduct an airdrop of critical humanitarian aid in support of Global Affairs Canada into the Gaza Strip. The air drop consisted of 21,600 pounds of aid,” the Canadian government said in a statement.

The Canadian Broadcasting Corporation reported that it was Canadian Armed Forces’ first humanitarian airdrop over Gaza using their own aircraft.

The Israeli military said 120 food aid packages for Gaza’s residents were airdropped by six countries, including Canada. The other five were Jordan, the United Arab Emirates, Egypt, Germany and Belgium.

Canada said last week it plans to recognize the State of Palestine at a meeting of the United Nations in September, ratcheting up pressure on Israel as starvation spreads in Gaza.

Canada also said on Monday that Israeli restrictions have posed challenges for humanitarian agencies.

“This obstruction of aid is a violation of international humanitarian law and must end immediately,” Canada’s government said.

The Israeli embassy in Ottawa had no immediate comment. Israel denies accusations of violating international law and blames Hamas for the suffering in Gaza.

Israel cut off food supplies to Gaza in March and then lifted that blockade in May – but with restrictions that it said were needed to prevent aid from being diverted to militant groups.

President Donald Trump also claimed Hamas militants were stealing food coming into Gaza and selling it. However, Reuters reported late last month that an internal U.S. government analysis found no evidence of systematic theft by Hamas of U.S.-funded humanitarian supplies.

Israel says it is taking steps for more aid to reach Gaza’s population, including pausing fighting for part of the day in some areas, allowing airdrops and announcing protected routes for aid convoys.

The latest bloodshed in the decades-old Israeli-Palestinian conflict was triggered in October 2023 when Hamas attacked Israel, killing 1,200 and taking about 250 hostages, Israeli tallies show.

Gaza’s health ministry says Israel’s subsequent military assault has killed over 60,000 Palestinians. It has also caused a hunger crisis, internally displaced Gaza’s entire population and prompted accusations of genocide at the International Court of Justice and of war crimes at the International Criminal Court. Israel denies the accusations. – Reuters

DA wants rice imports suspended

WORKERS unload sacks of rice on Dagupan Street in Manila. — PHILIPPINE STAR/RYAN BALDEMOR

By Chloe Mari A. Hufana, Reporter

THE Department of Agriculture (DA) on Monday recommended to President Ferdinand R. Marcos, Jr. a suspension of rice imports and increased tariffs to protect local farmers amid declining farmgate prices.

This is meant to shield Filipino rice producers from the continued influx of lower cost imported rice, which has been putting pressure on domestic prices in recent months, according to the Presidential Palace.

The move seeks to strike a balance between supporting local farmers and maintaining a stable food supply across the country, it added.

Presidential Communications Office Acting Secretary Dave M. Gomez did not give further details regarding the proposal but noted that Cabinet members will discuss this with Mr. Marcos during his trip to India from Aug. 4 to 8.

In June, Agriculture Secretary Francisco P. Tiu Laurel, Jr. told the House of Representatives that he recommended that the Tariff Commission implement a phased increase in rice import duties to the original 35% from the current 15%.

He also proposed that the tariff adjustment be aligned with the harvest periods of the Philippines’ key suppliers — around late September for Vietnam and December for Pakistan — to mitigate any adverse impact on the local market.

Mr. Marcos signed Executive Order (EO) No. 62 in June 2024, which slashed rice import tariffs to 15% from 35% until 2028 in a bid to curb rice prices. The tariff is subject to review every four months.

Former Agriculture Undersecretary Fermin D. Adriano said suspending rice imports or limiting these to 1 million metric tons (MT) could trigger a severe supply shortage.

Last year, the Philippines imported 4.7 million MT and is expected to import even more this year.

“The United States Department of Agriculture predicts we will import a higher amount this year,” Mr. Adriano said in a Viber chat. “How will DA fill up the huge supply gap, given that dramatic productivity levels cannot be achieved in a year’s time?”

Mr. Adriano proposed a seasonal tariff system — lower tariffs during off-peak seasons and raise them during local harvests to protect small farmers.

Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said since Congress is currently in session, Mr. Marcos should request the passage of “enabling legislation that will revert rice import tariffs to their original levels.”

“If the discussions with the President push through, the President can perhaps request Congress to act swiftly on the proposal to restore the rice tariff,” he said.

The President can only increase tariffs via an EO when Congress is on recess.

Mr. Cainglet said waiting until Congress’ recess in October “is not an option.”

“Farmers are having second thoughts about planting right now. Those who have already planted are worried because the price of unmilled rice is only between P8 and P12, and that’s during the off-peak harvest. So, what more when the peak harvest comes in October or November?”

Meanwhile, Federation of Free Farmers (FFF) Raul Q. Montemayor said adjusting the tariffs on rice through an EO will have to undergo a lengthy process of consultation and deliberations.

FFF proposed that the tariff adjustment be done by invoking Republic Act 8800 or the Safeguard Measures Act, which authorizes the secretary of agriculture to impose provisional duties on top of current tariffs in the event of an import surge that harms or threatens to harm local farmers.

Mr. Montemayor said provisional duties can be set to a level that would temporarily discourage additional imports and would apply to imports from both Association of Southeast Asian Nations (ASEAN) and non-ASEAN countries.

Citing field reports, Mr. Montemayor said prices for freshly harvested palay have fallen by 31% to as low as P8 per kilo from prices a year ago, resulting in an estimated P54.5-billion drop in farmers’ incomes during the first six months of the year.

He attributed this steep decline to the “uncontrolled entry of cheap imports.”

The supply glut was exacerbated by the aggressive rollout of the subsidized P20-per-kilo rice program, he added.

Mr. Montemayor noted that while the option for the President to impose a temporary ban on rice imports is provided under the amended Rice Tariffication Law, it may be flagged as a violation of World Trade Organization rules that prohibit the reimposition of quantitative import restrictions.

RESOLUTION FILED
Meanwhile, two senators on Monday filed a joint resolution calling for the removal of the President’s authority to adjust tariff rates on imported rice, and reverting tariffs to 35%.

Senate Joint Resolution No. 2, called on Congress to “terminate the delegated authority of the President to adjust tariff rates on rice, and reverting tariffs to previous levels.”

Palace Press Officer Clarissa A. Castro did not immediately reply to a Viber message seeking comment.

The resolution was signed by Senator Ana Theresia N. Hontiveros-Baraquel and Senator Francis “Kiko” N. Pangilinan.

The Philippine president has the authority to increase, reduce, revise, or adjust existing rates of import duty on rice under the Constitution and Republic Act No. 10863, or the Customs Modernization and Tariff Act.

“The plight of Filipino farmers is urgent and demands decisive legislative action to ensure they receive a fair return for their produce and to secure the nation’s food future by prioritizing domestic production over unchecked imports,” the resolution said.

The resolution also called on the government to revert tariffs on rice to 35% from both in-quota and out-quota.

The resolutions also proposed that the committees of both chambers hold caucuses to review the current situation of the rice industry. This includes market prices, production costs, import volumes, and the welfare of local producers.

The chairpersons of each committee will then suggest policies that will establish appropriate and responsive tariffs and rice import levels “that effectively protect domestic producers, ensure national food security, and promote the long-term viability of the local rice sector.” — with inputs from Adrian H. Halili and Kyle Aristophere T. Atienza

Philippine economy likely expanded by 5.5% in second quarter — poll

A view of the central business district of Makati City on July 10. — PHILIPPINE STAR/RYAN BALDEMOR

THE PHILIPPINE ECONOMY likely expanded in the second quarter thanks to cooling inflation, election-related spending, and faster exports, analysts said.

However, uncertainty over US tariffs may have tempered economic momentum in the April-to-June period, they added.

Gross domestic product (GDP) likely grew 5.5% in the second quarter, according to a median forecast of 17 economists polled by BusinessWorld.

Q2 GDP Growth Forecast

If realized, this would be a tad faster than the 5.4% growth recorded in the first quarter. However, it would be slower than the 6.5% expansion in the second quarter last year.

This would place average growth at 5.5% for the first half, aligning with the lower end of the government’s revised 5.5-6.5% target range.

The Philippine Statistics Authority (PSA) is scheduled to report second-quarter GDP data on Aug. 7.

“Household consumption, the country’s main growth engine, likely strengthened on the back of low and stable inflation, steady remittances, and robust labor market conditions,” Chinabank Research said.

In June, headline inflation ticked up 1.4%, a tad faster than the 1.3% in May but still slower than 3.7% in June 2024, official government data showed. June marked the fourth straight month that inflation was below the central’s bank’s 2-4% target for the year.

Inflation averaged 1.8% in the first half, decelerating from 3.6% a year ago.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said household consumption likely remained the main growth driver in the second quarter, supported by election-related spending, easing inflation, and continued strength in consumer lending.

“While disinflation has helped ease cost pressures and support consumption, overall domestic demand remains cautious due to weak consumer and business sentiment, limited fiscal impulse during the election period, and muted employment quality,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said.

However, the Commission on Elections’ 45-day ban on public works spending, which started on March 28 and ended with the May 12 elections, may have dampened government spending.

“For the most part, domestic demand lost some steam in the quarter that has just gone by, particularly government spending, which was to be expected given the natural lull in such expenditure during an election season,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said.

Philippine National Bank economist Alvin Joseph A. Arogo said GDP growth likely slowed in the second quarter due to “tapering of government spending, weak business sentiment due to trade uncertainty.”

NARROWER TRADE GAP
“A narrower goods trade deficit, driven in part by frontloading from US importers ahead of the imposition of higher US tariffs and by growing demand for Philippine products in other export markets, also likely contributed to the upside,” Chinabank Research said.

In April, US President Donald J. Trump announced a 17% reciprocal tariff rate for goods from the Philippines, but the implementation was suspended until July.

Mr. Trump threatened to raise the tariff to 20% in early July, but eventually set a 19% tariff on Philippine goods after a meeting with Philippine President Ferdinand R. Marcos, Jr. The new tariff rate is expected take effect on Aug. 7.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said the narrower trade deficit in June may have been driven by US firms frontloading imports before the US tariffs took effect.

“The postponement of these tariffs gave room for firms to order more from [Philippine] exporters before they take effect,” Mr. Erece said.

The Philippines’ trade-in-goods deficit narrowed to $3.95 billion in June, as exports jumped by 26.1% to $7.02 billion, driven by frontloading in the run-up to higher US tariffs.

In June, the United States was the top destination for Philippine-made goods with $1.22 billion, accounting for 17.3% of total exports.

“Uncertainty over US tariff rates and the ongoing price correction in the Philippines’ real estate market also likely took a toll on the expansion plans of firms and businesses,” HSBC Global Research economist for ASEAN Aris Dacanay said.

Mr. Asuncion said selective export strength, particularly electronics and mineral products, “provided some lift.”

“But global uncertainties and the delayed US Fed easing following a stronger-than-expected US inflation report continue to weigh on investor confidence and trade dynamics,” he said.

WEATHER DISRUPTION
Marites M. Tiongco, professor and dean of the School of Economics at the De La Salle University, said that the modest growth in the second quarter would fall short of earlier expectations as weather disruptions affected the agriculture sector.

“The projected 5.5% GDP growth in the second quarter of 2025 is attributed to the continued strength of domestic demand and public sector infrastructure spending but moderated by the negative impact of back-to-back typhoons on the agriculture sector and rural consumption,” she said.

Ms. Tiongco said the agriculture sector was “a key drag” on GDP growth in the second quarter.

“Unlike the anticipated dry-season El Niño impact, second-quarter 2025 was instead defined by typhoon-related damages that reduced yields in rice, corn, and fisheries. These disruptions had a twofold effect: first, by directly lowering agricultural value-added, and second, by indirectly constraining rural household spending and transport flows,” she said.

Agriculture accounts for about a tenth of gross domestic product and about a quarter of all jobs. The PSA will release second-quarter agriculture and fishery production data on Aug. 6.

Ms. Tiongco said the Philippine economy is on track to grow between 5.5% and 5.8% in 2025.

“(The economy’s) resilience rests on domestic consumption, strong infrastructure investment, and stable remittances. However, external fragilities — particularly from shifting US trade policy and geopolitical dynamics — pose downside risks, underscoring the need for proactive trade diplomacy, resilient supply-chain strategy, and climate-adaptive investments,” she said.

Security Bank Corp. Vice-President and Research Division Head Angelo B. Taningco said he expects full-year economic growth at 5.6%.

“For the remainder of the year, I expect GDP growth to be at sub-6%, i.e., at 5.8% in the second half of the year,” he said.

GlobalSource Partners Country Analyst Diwa C. Guinigundo said the lower end of the government’s target may be achievable this year amid “greater uncertainties” due to geopolitical tensions and US tariffs in the second half.

“The Philippine economy for the rest of the year may be more challenging because by then the impact of higher tariff in the US might have kicked in, both in terms of moderating exports and overall economic growth,” Mr. Guinigundo said.

Chinabank Research said it expects domestic economic conditions to remain favorable for growth for the rest of the year.

“However, the local economy would likely continue to contend with external headwinds, including elevated uncertainty, steep US tariffs, and a potential slowdown in global economic activities,” it said. — L.P.Q.Batoon

Easing inflation to lift consumer spending but household debt a risk

Motorists queue at a gasoline station in Quezon City. — PHILIPPINE STAR/MIGUEL DE GUZMAN

HEADLINE INFLATION is seen to settle within the 2-4% target this year, which could provide a much-needed boost to consumer spending, Fitch Solutions’ unit BMI said.

In a report, BMI said its country risk team expects inflation to average 2.2% this year. “In 2026, inflation will rise further and average 2.7% year on year,” it added.

However, it noted these forecasts are still lower than rates seen before the coronavirus pandemic. Inflation averaged 2.8% from 2015 to 2019.

“If nominal income growth keeps pace with inflation, the purchasing power of consumers will improve, which would be a boost to their spending,” it said.

The Bangko Sentral ng Pilipinas (BSP) projects inflation to average 1.6% for this year and 3.4% for 2026.

This year so far, monthly inflation has settled within the 2-4% target, with the March-to-June print even falling below the target band.

A BusinessWorld poll of 17 analysts yielded a median estimate of 1.2% for the July consumer price index, slower than the 1.4% in June and 4.4% clip a year ago. If realized, this would be the slowest inflation in nearly six years or since the 0.6% print posted in October 2019.

“Easing inflationary pressures will provide relief to real household incomes and enable growth in spending,” it added.

BMI said it is keeping a “cautious but positive” outlook for consumer spending. Real household spending growth is seen to slow to 4.5% this year from 5% in 2024.

“Spending will remain influenced by the elevated inflationary pressures seen over 2025 as well as currently high debt levels, along with related debt servicing costs,” BMI said.

“A tight labor market will support spending, as real wage growth returns to positive territory, which will support purchasing power over the year.”

BMI noted consumer confidence was “sluggish” despite the market recovering from the pandemic.

“The recent weakness in consumer sentiment is driven by pessimism over the Philippines’ economic condition and consumers’ personal family financial situation,” it added.

The BSP’s latest Consumer Expectations Survey showed that Filipino consumers were more pessimistic in the second quarter as the overall confidence index in the second quarter fell to -14% from -13% in the previous quarter.

Consumers cited “higher inflation, lower family income, and fewer job opportunities” as the reasons for the downbeat sentiment, according to the survey.

BMI said its outlook for consumer spending is in line with its gross domestic product (GDP) forecast of 5.4% this year.

“A deteriorating external demand will likely be a drag on the Philippines’ GDP,” it added.

The government trimmed its growth target to 5.5-6.5% this year. A BusinessWorld poll of 17 economists yielded a median estimate of 5.5% for second-quarter growth.

If realized, this would be faster than the 5.4% growth recorded in the first quarter but slower than the 6.5% expansion in the same period a year ago.

HOUSEHOLD DEBT
Meanwhile, BMI flagged rising levels of household debt as a risk to its consumer outlook.

“It not only constrains future borrowing capacity but impacts current disposable income levels. This is particularly true as debt servicing costs rise in response to increases in interest rates,” it said.

“In many markets, central banks rapidly hiked interest rates during the 2022-2023 high inflationary period, reaching levels to which most households have not been accustomed over the past decade.”

If inflationary pressures worsen, central banks could turn hawkish and “reignite the burden of debt servicing.”

This year, BMI said the consumer sector could also be “significantly impacted by a highly uncertain macroeconomic outlook.”

“Persistent inflationary pressures, heightened trade tensions, fluctuating interest rates and the potential weakening of labor markets are key concerns,” it said.

“These factors, combined with elevated geopolitical and economic risks, are likely to shape consumer spending decisions, particularly on discretionary purchases.”

Political turmoil could also impact household purchasing power and corporate margins, indirectly influencing consumer and business sentiment, it added.

“While inflationary pressures have largely eased in many markets, price levels remain high, leaving many households without real wage growth sufficient to restore purchasing power to those levels seen before 2022-2024.”

PESO
Meanwhile, BMI said it expects the peso to settle at P58 per dollar this year from an average of P57.30 in 2024.

“Despite the 1.7% depreciation of the peso, this is still a relatively positive outcome compared with the depreciation of 11% seen in 2022 and the 2% seen in 2023.”

“The weaker rate in 2025 is due to the combination of a higher expected consumer price index in the Philippines as well as the US Federal Reserve’s hawkish tilt.”

BMI said intervention by the BSP in the foreign exchange market “will help to curb depreciatory pressures on the peso” but earlier rate cuts will continue to weigh on the peso.

“Nevertheless, the relatively stable rate will mean that the Philippines, which remains heavily reliant on imports to meet local demand, will see relative stability in import inflation,” it added. — Luisa Maria Jacinta C. Jocson

SM Prime Q2 income climbs 10% to P12.8B on property gains

SM CITY FAIRVIEW’S ROOFTOP solar photovoltaic system. — SMPRIME.COM

SM PRIME Holdings, Inc. said its second-quarter (Q2) net income rose by 10% to P12.8 billion, bringing first-half earnings to P24.5 billion, up 11% from a year earlier, on the back of higher rental income, real estate sales, and ancillary revenues.

Top line during the April-to-June period increased by 4% to P35.3 billion, SM Prime said in a statement on Monday.

First-half consolidated revenue increased by 5% to P68 billion from P64.7 billion last year.

Rental income from malls, offices, hospitality, and MICE (meetings, incentives, conferences, and exhibitions) took up 60% of total revenues, followed by real estate sales at 29%, and cinema ticket sales, food and beverage, amusement and related offerings at 11%.

Malls took up the largest share of earnings at 69%, contributing P17 billion — up 14% year-on-year — led by new openings, higher foot traffic and strong occupancy.

Income from residential projects went up 2% to P5.1 billion, accounting for 21% of total earnings, on recognized revenue from completed units and prior-year sales.

The office and warehouse segment contributed 7%, with earnings increasing 9% to P1.7 billion on improved warehouse occupancy.

Hotels and convention centers accounted for 3% of total income after contributing P635 million, up 20% from P527 million, due to strong room bookings and a busy MICE calendar.

“The redevelopment and new attractions at our flagship Mall of Asia drove strong foot traffic and tenant sales,” SM Prime President Jeffrey C. Lim said.

“Robust consumer activity and improving business confidence also lifted contributions across our portfolio,” he added.

SM Prime said its capital expenditure (capex) as of the first semester is at P37.3 billion, adding that its P100-billion capex this year is on track.

In a separate virtual briefing, SM Prime Chief Finance Officer John Nai Peng C. Ong said the property developer is eyeing to raise P15 billion to P20 billion from a planned retail bond issuance in the fourth quarter of the year.

Mr. Ong said the proceeds will be used to refinance the company’s maturing loans.

“We are looking at around P15-20 billion in retail bonds that we intend to tap during the fourth quarter of this year,” he said.

“We remain optimistic, backed by strong consumption, lower interest rates and continued recovery in retail and tourism,” the company said.

“With inflation contained and policy easing underway, we expect stronger consumer sentiment to drive demand across our businesses,” it added.

“Our results underscore the resilience of our businesses and the strength of our diversified portfolio. With our capex program progressing as planned, we are well-positioned to drive long-term growth across key markets,” Mr. Lim said.

On Monday, SM Prime shares rose by 3% or 70 centavos to P24 apiece. — Revin Mikhael D. Ochave

Megaworld earmarks MREIT share sale proceeds for Cebu, Bacolod townships

LISTED property developer Megaworld Corp. said it will use the proceeds from its recent block sale of MREIT, Inc. shares to support the continued development of its townships in Cebu and Bacolod.

The block sale, executed on July 25, involved 84.8 million common shares of MREIT sold at P13.82 per share. MREIT is the real estate investment trust of Megaworld.

Megaworld generated P1.16 billion in net proceeds from the block sale, it said in a regulatory filing on Monday.

“Megaworld intends to use the net proceeds received from the sale to fund ongoing and future investments in real estate properties in two townships located in Cebu and Bacolod for the development of malls, offices, and other developments within each township…,” it said.

The company will allocate P700 million to continue developing the 30-hectare Mactan Newtown township in Cebu, while P457.6 million will be used for projects in the Bacolod township.

Megaworld is developing the 34-hectare The Upper East township in Bacolod.

“All disbursements for such projects are intended to be distributed within one year upon receipt of the money raised from the sale,” Megaworld said.

Megaworld tapped Maybank Securities, Inc. and BDO Securities as brokers for the block sale.

In June, Megaworld’s tourism and leisure township development subsidiary, Global-Estate Resorts, Inc., earmarked P5 billion to develop the 116-hectare Nascala Coast beachside township in Nasugbu, Batangas, over the next five years, marking the 36th township in its portfolio.

Nascala Coast will consist of residential villages, beachside condominium clusters, commercial hubs, and leisure destinations.

On Monday, Megaworld shares rose by 1.02% or two centavos to P1.99 apiece. — Revin Mikhael D. Ochave

Meralco signs 20-year biogas supply deal

A Meralco worker examines a transformer in Navotas City. — PHILIPPINE STAR/RYAN BALDEMOR

MANILA ELECTRIC CO. (Meralco) has entered into a 20-year power supply agreement (PSA) with First Quezon Biogas Corp. (FQBC) to source part of its renewable energy (RE) supply from a 1.4-megawatt (MW) biogas power plant.

In a statement on Monday, Meralco said it will draw 1.25 MW from FQBC’s biomass power plant located in Candelaria, Quezon province, a facility that converts locally sourced agricultural waste into electricity.

“We hope that the signing of the PSA would encourage more investment in biogas to help local communities and to further develop this type of RE technology,” Meralco Senior Vice-President and Head of Regulatory Management Jose Ronald V. Valles said.

According to Meralco, the power plant provides “sustainable disposal solution” for agricultural waste and manure from farms in the province, reducing greenhouse gas emissions.

The PSA, which is scheduled to commence on June 26, 2026, will be submitted to the Energy Regulatory Commission for review and approval.

The new deal forms part of Meralco’s compliance with its obligation under the renewable portfolio standards (RPS), which mandate electricity suppliers to source a portion of their RE requirement. At present, the RPS requirement increases by 2.52% per year.

To date, the power distributor has secured a total of 1,535 MW in RE capacity from various suppliers, surpassing its initial target of 1,500 MW. The company expects RE to account for 26% of its supply portfolio by 2030.

Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

1...394041...13,082Page 40 of 13,082
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube