General Wholesale Price Index in the Philippines
GROWTH in the bulk prices of general goods eased to a 20-month low in June, the Philippine Statistics Authority (PSA) said, as food price growth moderated. Read the full story.
Villar backs economic sabotage treatment for tobacco smuggling
THE chair of the Senate agriculture and food committee said tobacco smuggling needs to be an economic sabotage-level offense, amid proposals to amend the Anti-Agricultural Smuggling Act of 2016.
“We are amending the law which shall be known as the ‘Anti-Agricultural Economic Sabotage Act of 2023.’ This will include the acts of hoarding, profiteering and cartelization in agricultural products as economic sabotage,” Senator Cynthia A. Villar said during the International Tobacco Agricultural Summit on Thursday.
“Tobacco is (to) be included in the agricultural products covered by this law,” she added.
Republic Act 10845 classifies large-scale agricultural smuggling as economic sabotage, a non-bailable offense.
The current threshold for economic sabotage is smuggling P1 million worth of sugar, corn, pork, poultry, garlic, onion, carrots, fish, and cruciferous vegetables. The threshold for rice is P10 million.
Ms. Villar said the Senate is also considering a bill establishing specialist courts to try agricultural smuggling, hoarding, profiteering, and cartelization cases.
“We hope to pass these laws before the year ends so we can finally witness the apprehension of smugglers and effectively combat the illicit trade in agricultural products, including tobacco,” Ms. Villar said.
“The tobacco industry plays a substantial role in the national economy, accounting for approximately 6% of tax revenue (in 2020),” she said.
Citing Euromonitor, she said illicit trade in tobacco is expected to account for 18.5% of the industry in 2023.
The National Tobacco Administration (NTA), an arm of the Department of Agriculture, is expecting foregone revenue from illicit tobacco trading to top P30 billion this year.
“It’s better that tobacco (is) included to minimize the decrease in taxes generated from the lawful trading of tobacco,” according to Giovanni B. Palabay, officer-in-charge deputy administrator at the NTA.
Better regulation of tobacco smuggling “could bring down (foregone revenue) for the government,” he said.
Mr. Palabay said that the NTA is working with the Bureau of Internal Revenue and the Bureau of Customs to curb the illicit tobacco trade. — Sheldeen Joy Talavera
Seizures of cigarette and tobacco products hit P1.89B
THE Bureau of Customs (BoC) said it seized illicit cigarette and tobacco products valued at P1.89 billion as of the end of July.
The BoC’s collections from such seizures this year have so far exceeded its year-earlier proceeds of P1.13 billion by 67%.
“The BoC is confident that we will have more seizures. We will continue to strengthen our efforts against smuggling,” Director of the Customs Intelligence and Investigation Service (CIIS) Verne Y. Enciso told reporters on Thursday.
Mr. Enciso said that a raid in Sulu accounted for much of the growth this year.
Carried out in March, the raid on a Sulu warehouse resulted in the seizure of 19,000 cases or 190 million sticks of illicit cigarettes valued at P1.4 billion.
Since 2019, Customs said such seizures have amounted to P13.18 billion from 756 separate operations.
The National Tobacco Administration said that foregone revenue due to the illicit tobacco trade are expected to exceed P30 billion this year. — Luisa Maria Jacinta C. Jocson
MUP pension budget for 2024 set at P164B
THE GOVERNMENT is proposing to allocate around P164 billion for the pension and gratuity benefits of military and uniformed personnel (MUP) next year, according to the Department of Budget and Management (DBM).
According to the 2024 National Expenditure Plan (NEP), next year’s proposed allocation is 3.5% higher than the funding for MUP benefits this year.
The Department of Finance (DoF) is currently working on reforming the MUP pension system on the instructions of President Ferdinand R. Marcos, Jr.
MUP pension reform is on the Legislative-Executive Development Advisory Council list of 20 priority measures targeted for approval by December.
Budget Secretary Amenah F. Pangandaman said that the government plans to maintain its intended MUP funding level for next year.
“Our budget is still the same, we will still provide the funds for the MUPs,” she said in a briefing on the People’s Television Network on Thursday.
Ms. Pangandaman said that even though a pension reform law may pass before the end of the year, she expects a transition period before the reforms kick in. The government hopes to gradually increase MUP members’ share of pension contributions.
“Even if we pass the law this year, the change will not be abrupt. There is a transition before they start to contribute and it can also be in tranches so it won’t be too heavy for our MUPs. Assuming everyone will contribute — again, it will depend on the bill that is being finalized now and it will go through the legislative process,” she added in a Viber message.
Under the NEP, the proposed allocation for pension benefits of MUPs and veterans is P140.68 billion, against this year’s budget of P139.5 billion.
The budget for MUP retirement gratuities and terminal leave is P23.41 billion, up from P18.87 billion for this year.
Currently, MUPs do not contribute to their pension fund. The funds are instead taken from the national budget.
Finance Secretary Benjamin E. Diokno has said that the latest version of the reform bill will require active-duty MUPs to contribute gradually while new recruits will pay the full premiums for their pension benefits. Retirees will not be required to contribute to their pensions.
The DoF is hoping to present a bill to Congress this month. It also expects the bill to be passed before the end of the year.
Bienvenido S. Oplas, Jr., president of a research consultancy and of the Minimal Government Thinkers think tank, said that the pension system should require contributions from new entrants and active-duty MUPs.
However, he said that retirees’ pensions should at least be taxed if they are not required to contribute.
“Retirees not contributing (is) wrong. (It’s) okay if their pensions will be taxed,” he said in a Viber message.
Accumulating pension liabilities may increase public debt by as much as 25% by 2030, according to a DoF estimate.
The Bureau of the Treasury also reported that unfunded pension liabilities have hit P9.6 trillion.
The MUP pension program covers members of the Armed Forces of the Philippines, Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine National Police, the Public Safety College, Coast Guard, and Bureau of Corrections. — Luisa Maria Jacinta C. Jocson
Nearly a third of PHL workforce expecting to switch jobs over next 12 months — study
SOME 29% of the workforce is considering switching jobs over the next 12 months, with a large majority likely to seek promotion or a salary increase, according to a survey conducted by consulting firm PwC.
According to PwC Philippines’ 2023 Hopes and Fears Global Workforce Survey, which launched in the Philippines on Thursday, 29% of survey participants said they expect to change jobs, with 35% of potential job-switchers considering industries such as engineering and construction, with 31% eyeing hospitality and leisure.
PwC added that 70% of respondents are likely to seek a pay raise, with 59% are seeking a promotion.
The global survey, carried out in April, covered 53,912 individuals across 46 countries and included 1,000 Filipinos. Globally, 26% of employees are considering a change of employment.
“There are different factors that drive an employee to consider changing employers. The most immediate one usually is a pay rise or possibly a different role or promotion,” PwC Philippines Managing Principal Veronica R. Bartolome said at a briefing in Makati City on Thursday.
The survey also found that 74% of Filipino respondents whose jobs require specialist training are likely to ask for a pay raise, while 64% are seeking promotions, while 27% stated they are not looking to change employers.
The survey also found that 39% of Filipino respondents do not expect their organization to remain in operations beyond 10 years.
Martijn Schouten, PwC Southeast Asia consulting partner, said the Great Resignation has yet to run its course.
“There is still a massive restlessness in the workforce. What is hindering people from moving around is the global crisis, which makes them want a little bit more security,” he added.
According to Ms. Bartolome, employers should prepare for “workers (that are) more assertive, more demanding, and more ambitious. The Great Resignation is far from over, so employers need to brace themselves.”
“It is not just about the salary or the promotion. They place equal importance on how they can thrive, how they can achieve work-life balance, and their overall wellbeing at the workplace,” she added. — Revin Mikhael D. Ochave
Property insurer profits expected to deteriorate
THE profitability of property and casualty (P&C) insurers in the Philippines could weaken this year despite strong topline growth, S&P Global Ratings said, citing inflation pressures and higher costs.
Eileen Tay, an analyst with S&P Global Ratings, said in an e-mail to BusinessWorld: “We consider the higher claims (stemming from continued high inflation) and expenses (higher reinsurance costs and capacity challenges) to impact overall profitability.”
“The insurers’ ability to pass through higher reinsurance rates to consumers could be constrained amid strong market competition,” she said.
Inflation in the Philippines has been declining since peaking at 8.7% in January. A BusinessWorld poll of 17 analysts last week returned a median estimate of 4.9% for July inflation, settling at the upper end of the central bank’s 4.1-4.9% forecast for the month.
If realized, inflation would have likely slowed from the 5.4% reading in June and the 6.4% logged in July 2022.
The central bank has said inflation could ease further in the next few months and be within the 2-4% target band by the fourth quarter. It sees inflation averaging 5.4% for the year and 2.9% for 2024, before picking up to 3.2% in 2025.
According to Ms. Tay, the rising frequency of natural catastrophes could impact P&C insurers.
“Particularly, in the face of hardening reinsurance prices and more selective risk appetite by reinsurers, the margin compression for insurers could intensify. Concurrently, global macro headwinds could also impact the insurers’ growth momentum,” she said.
The Insurance Commission (IC) reported that net premiums written by nonlife insurance companies rose 0.09% to P15.88 billion in the first quarter.
Total premiums earned rose 15.68% to P15.99 billion, while gross premiums written rose 14.68% to P26.17 billion. The segment’s net income rose 137.32% to P2.63 billion at the end of March.
Robust economic growth may support the insurance industry this year, as the Philippine economy is expected to expand 5.9% in both 2023 and 2024, she said.
“We see the government’s ongoing efforts to address infrastructure gaps and improvements in the business climate, through regulatory and tax reforms, should support growth in economic productivity,” Ms. Tay said.
“Particularly, we view that the insurance sector will benefit from the government’s continued focus on infrastructure development and the public-private partnerships to narrow the catastrophe protection gap,” she said.
The government is planning to spend the equivalent of 5-6% of gross domestic product (GDP) on infrastructure until 2028.
“This will contribute positively to revenue growth for the property and casualty insurers in the longer term, particularly property and engineering lines,” Ms. Tay said.
She expects more demand for fire and engineering insurance coverage alongside more infrastructure projects. The market for workers’ compensation insurance may also grow.
“However, as with most infrastructure projects, such projects are time-intensive and dependent on execution. The immediate contribution to insurance premiums for the insurers could take time,” she said. — Keisha B. Ta-asan
Environment dep’t backs waste-to-fuel processing operations to keep solid waste volumes in check
THE Department of Environment and Natural Resources (DENR) said waste-to-fuel co-processing could be a sustainable solid waste management solution.
The DENR issued the statement after Environment Secretary Maria Antonia Yulo-Loyzaga toured the new shredder platform of Republic Cement in Taysan, Batangas.
Republic Cement maintains a waste-to-fuel co-processing operation under a joint venture between the Aboitiz Group and Irish building materials company CHR.
Co-processing converts waste into an alternative fuel for cement manufacturing plants.
Republic Cement uses alternative fuels and raw materials in cement manufacturing.
It can reuse or recover the thermal and mineral properties of waste materials, such as residual plastic or rice husk, as alternative fuels.
“Over 890 dump trucks filled with plastic waste have been processed through strong multi-stakeholder collaboration with materials collection and recovery groups and local government units,” the DENR said.
“Using solid waste as fuel enabled the company to avoid potential methane emissions at landfill sites while at the same time decreasing the carbon intensity of its cement products,” it added. — Sheldeen Joy Talavera
June wholesale price growth eases to 20-month low
GROWTH in the bulk prices of general goods eased to a 20-month low in June, the Philippine Statistics Authority (PSA) said, as food price growth moderated.
According to preliminary data, the general wholesale price index (GWPI) rose 4% year on year in June, slowing from the 5% posted in May and 9% from a year earlier.
The reading was the lowest since the 3.9% logged in October 2021.
In the first half, the national GWPI averaged 5.3%, decelerating from the 7.2% reading a year earlier.
Domini S. Velasquez, chief economist at China Banking Corp., said base effects are a factor apart from easing global commodity prices and softer demand from manufacturers.
“Favorable base effects from last year’s price highs also likely helped bring down the inflation print,” she said in a Viber message.
Inflation in June eased to 5.4% from 6.1% in May, the lowest level in 14 months. Year to date, inflation averaged 7.2%, exceeding the revised 5.4% projection issued by the central bank.
The PSA attributed the slowdown in index growth to the downtrend in the heavily-weighted food segment, where growth slowed to 8.5% in June from 10.4% in May. Growth in prices of manufactured goods classified chiefly by materials also eased, to 5.1% from 5.8% the prior month.
Commodity groups that experienced accelerated price growth were beverages and tobacco (7.6% from 7.3% a month earlier) and machinery and transport equipment (1.6% from 1.5%).
Luzon’s GWPI exceeded the national average, rising 4.1% in June, against 4.9% in May and 9.4% in June 2022. Luzon price movements were also driven by the food index, where growth was 8.8% in June against 10.6% in May, the PSA said.
In the Visayas, growth in the GWPI eased to 3.5% in June from 3.9% in May. The year-earlier reading had been 5.2%.
Mindanao price growth also slowed to 3.4% in June from 5.7% in May. In June 2022, the increase in bulk prices had been 4.6%.
Ms. Velasquez is projecting an uptick in wholesale prices due to higher input costs going forward.
“Global oil prices have been rising recently and the minimum wage in (the National Capital Region) was increased. Other regions may also impose wage increases of similar magnitude,” she said.
She also added that July manufacturing Purchasing Manager’s Index (PMI) is signaling that “price pressures have slightly intensified.”
“Improving demand for manufactured goods could also drive up wholesale prices,” she said.
The NCR Tripartite Wages and Productivity Board approved a P40 increase in the daily minimum wage in Metro Manila, which took effect on July 16.
This brought the daily minimum wage to P610 for workers outside the agriculture sector and P573 for those in agriculture, service retail establishments with 15 or fewer workers, and manufacturing companies with less than 10 workers.
Meanwhile, manufacturing activity metrics signaled an improvement with the July S&P Global Philippines Manufacturing PMI rising to 51.9 from 50.9 in June.
The July reading marked the 18th straight month the PMI was above 50, the threshold for expanding activity. The PMI is a leading indicator of future factory utilization, measuring the confidence of purchasing managers in ordering raw materials for future conversion into finished goods. — Abigail Marie Pelea Yraola
Preferred research activities, incentives outlined for schools seeking innovation ecozone status
THE Philippine Economic Zone Authority (PEZA) and the Department of Science and Technology (DoST) signed an agreement outlining the preferred research activities and incentives on offer for schools seeking to register as knowledge, innovation, science, and technology (KIST) economic zones.
At a briefing in Taguig City on Thursday, PEZA Director General Tereso O. Panga and Science and Technology Secretary Renato U. Solidum, Jr. signed a joint memorandum circular (JMC) setting the rules for higher education institutions (HEI) seeking KIST status.
“KIST parks will play a significant role in increasing research and development infrastructure, fostering collaboration in research and development with foreign partners, facilitating technology transfer, and upskilling our workforce towards innovation. Together with the DoST, we can do a lot to boost our knowledge and technology inputs-outputs towards enhancing our global invocation index ranking,” Mr. Panga said.
According to Mr. Panga, the first KIST park arose in Batangas State University, which was proclaimed by then President Rodrigo R. Duterte in 2020.
He said the PEZA board has since approved three KIST park registrations that are awaiting proclamation from President Ferdinand R. Marcos, Jr.
“These are the De La Salle University Innovation Hub located in Biñan, Laguna; AltaHub at the University of Perpetual Help in Bacoor, Cavite; and the Lyceum of the Philippines-Laguna KIST Park,” Mr. Panga said.
Mr. Panga said that another HEI looking to register as a KIST ecozone is Catanduanes State University.
The JMC set the size requirement for KISTs at 5,000 square meters (sq.m.) of contiguous land ecozones in the National Capital Region (NCR) and other metropolitan areas. Outside of the NCR and other metropolitan areas, the minimum is 10,000 sq.m.
The minimum gross floor area for KIST facilities is 10,000 sq.m. in the NCR and other metropolitan areas. Outside these areas, the minimum is 5,000 sq.m.
The JMC said KIST ecozones must engage in preferred activities like research and development in biotechnology, food and nutrition, agriculture, engineering, electronics, robotics, renewable energy, transport solutions, data analytics, artificial intelligence, or any other such priority area determined by the DoST.
The incentives available to KIST export locators include income tax holidays, a special corporate income tax, and value-added tax zero rating on local purchases and exemption on imports.
“Through KIST parks, we aim to foster the production of a diverse array of unique products and services, utilizing our indigenous materials and talent,” Mr. Panga said. — Revin Mikhael D. Ochave
Archer Naina Tagle emerges as 1st Palaro quadruple gold medalist
EAGLE-EYED Naina Dominique Tagle of Central Visayas emerged the Palarong Pambansa’s first quadruple gold medalist after topping the 1440 round yesterday at the STI Gold Toe Archery Center in Marikina.
Ms. Tagle, a 15-year-old Silliman University student from Dumaguete and younger sister of Southeast Asian Games silver medalist Nicole, fired 1278 in ruling the event that added to her earlier triumphs in the 60 meters, 50m and 30m.
She missed a fifth after settling for silver in the 70m with a score of 306 behind the National Capital Region’s Giuliana Venice Garcia, who took the mint with a 310.
There was a four-gold winner in swimming in Calabarzon’s Hugh Alberto Parto, who reigned supreme in the elementary boys 200m freestyle, 50m butterfly, 200m freestyle relay and the 200m medley relay.
But there was confusion if Mr. Parto’s gold in the medley relay would be counted since his squad was awarded the mint although there was only one participant.
The Big City’s Karl Eldrew Yulo has also got into the position of winning four or more in men’s artistic gymnastics as he qualified in all four apparatuses — floor exercise, vault, mushroom and horizontal bar — where he scored 14.5, 13.25, 9.4, 9.1, respectively, for a total of 46.25 that sealed him the individual all-around mint Wednesday night.
If he sweeps all four gold, which was expected of him, and his team of King Cjay Pernia and Hillarion Palles, tops the team event today, the younger brother of world champion Carlos could go home with a six-gold sweep.
Western Visayas, for its part, unleashed its wrath in centerpiece athletics at the Marikina Sports Complex Angel Villagracia (secondary girls 100m hurdles) Krisha Aguillon (secondary girls 100m dash) and Mico Villaran (secondary boys 110m hurdles).
It was the third gold for the brawny Mr. Villaran after the 16-year-old product of Romanito Maravilla High in Bacolod also topped the 200m and 400m hurdles. — Joey Villar
Pinoy booters make their debut at Asian Games
NOW certified “World Cuppers,” the Filipinas are generating a lot of positive vibes as they make their debut in next month’s 19th Asian Games in Hangzhou, China.
The Pinay booters claimed a historic first goal and first win in the FIFA Women’s World Cup and hopes are high their maiden gig in the Sept. 19 to Oct. 7 Asiad will be just as stellar
“We should expect the team to play to win in any competition just like the Asian Games,” Philippine Football Federation General-Secretary Edwin Gastanes told The STAR.
The Filipinas will go up against South Korea, Myanmar and Hong Kong in Group E competition in China.
It will be an opportunity for revenge against the Koreans and the Burmese, two familiar foes.
The 46th-Philippines ladies lost to the No. 17 Koreans in the semifinals of the AFC Women’s Asian Cup, 2-0, and sustained a 1-0 defeat to the No. 50 Burmese in the group stage of the last Southeast Asian Games.
But a lot has happened since then.
The Filipinas will enter the competition carrying valuable experience from the world meet, where they scored a huge underdog win over host New Zealand, 1-0, and fought furiously before yielding to Switzerland (2-0) and Norway (6-0) in Group A.
The team, which received a heroes’ welcome when they arrived at the airport the other day, will venture on this mission minus their coach for the last 18 months — Alen Stajcic.
The Australian left after his contract ended and just yesterday signed with A-League club Perth Glory.
“We are in the process of interviewing candidates as possible replacements for coach Alen,” said Mr. Gastanes. — Olmin Leyba
De La Salle heavy favorite to advance in SSL finals
Games Friday
(Filoil EcoOil Centre)
2 p.m. — Adamson vs Perpetual
4 p.m. — De La Salle vs UST
DE LA SALLE University (DLSU) takes on University of Santo Tomas (UST) as Adamson University tests the mettle of surprise squad University of Perpetual Help System Dalta in the Shakey’s Super League (SSL) National Invitationals Final Four today (Aug. 4) at the Filoil EcoOil Centre in San Juan.
All eyes are on De La Salle as the heavy favorites to advance in the finale but Santo Tomas is out to give the UAAP champion a run for its money while Adamson has to withstand a spirited Perpetual side that just stunned two-time NCAA champion College of St. Benilde.
Hostilities erupt at 2 p.m. starting with the Lady Falcons against the Lady Altas followed by the collision of the Lady Spikers and the Lady Falcons in the main tiff at 4 p.m. — with the two survivors advancing to the best-of-three finals next week.
It’s a semis rematch for De La Salle and UST after their UAAP Season 85 Final Four clash won by the Lady Spikers en route to a near-perfect title campaign in 16 matches save for a lone defeat to the Golden Tigresses in the prelims.
Now, they meet again and the Taft-based spikers remain cautious anew despite a dominant so far, sweep after sweep in the SSL presented by Eurotel as the official hotel and Victory Liner as office transport provider, and in cooperation with the Commission on Higher Education (CHED).
UST definitely has what it takes to go fire with fire against De La Salle. The UAAP bronze medalist Adamson, too, against Perpetual, which albeit marches into the Final Four with the biggest momentum in the 12-team SSL that featured champions from the NCR, Luzon, Visayas and Mindanao.
Behind the superwoman performance of NCAA MVP Mary Rhose Dapol with 33 points, the Lady Altas gained a piece of history by being the first NCAA team to beat and eliminate the Lady Blazers, 25-16, 20-25, 28-26, 16-25, 15-12. — John Bryan Ulanday