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NASA’s DART spacecraft hits target asteroid in first planetary defense test

Illustration of the DART spacecraft flying towards the asteroids Dimorphos and Didymos. — NASA/Johns Hopkins/APL

NASA’s DART (Double Asteroid Redirection Test) spacecraft successfully slammed into a distant asteroid at hypersonic speed on Monday in a test of the world’s first planetary defense system, designed to prevent a potential doomsday meteorite collision with Earth.

Humanity’s first attempt to alter the motion of an asteroid or any celestial body played out in a NASA webcast from the mission operations center outside Washington, DC, 10 months after DART was launched.

The livestream showed images taken by DART’s camera as the cube-shaped “impactor” vehicle, no bigger than a vending machine with two rectangular solar arrays, streaked into the asteroid Dimorphos, about the size of a football stadium, at 7:14 p.m. EDT (2314 GMT) some 6.8 million miles (11 million km) from Earth.

The mission was devised to determine whether a spacecraft is capable of changing the trajectory of an asteroid through sheer kinetic force, nudging it off course just enough to keep our planet out of harm’s way.

Whether the experiment succeeded beyond accomplishing its intended impact will not be known until further ground-based telescope observations of the asteroid next month. But NASA officials hailed the immediate outcome of Monday’s test, saying the spacecraft achieved its purpose.

“NASA works for the benefit of humanity, so for us it’s the ultimate fulfillment of our mission to do something like this — a technology demonstration that, who knows, some day could save our home,” NASA Deputy Administrator Palm Melroy, a retired astronaut, said minutes after the impact.

DART, launched by a SpaceX rocket in November 2021, made most of its voyage under the guidance of NASA’s flight directors, with control handed over to an autonomous on-board navigation system in the final hours of the journey.

Monday evening’s bullseye impact was monitored in near real time from the mission operations center at the Johns Hopkins University Applied Physics Laboratory in Laurel, Maryland.

Cheers erupted from the control room as second-by-second images of the target asteroid, captured by DART’s onboard camera, grew larger and ultimately filled the TV screen of NASA’s live webcast just before the signal was lost, confirming the spacecraft had crashed into Dimorphos.

DART’s celestial target was an oblong asteroid “moonlet” about 560 feet (170 meters) in diameter that orbits a parent asteroid five times larger called Didymos as part of a binary pair with the same name, the Greek word for twin.

Neither object presents any actual threat to Earth, and NASA scientists said their DART test could not create a new hazard by mistake.

Dimorphos and Didymos are both tiny compared with the cataclysmic Chicxulub asteroid that struck Earth some 66 million years ago, wiping out about three-quarters of the world’s plant and animal species including the dinosaurs.

Smaller asteroids are far more common and present a greater theoretical concern in the near term, making the Didymos pair suitable test subjects for their size, according to NASA scientists and planetary defense experts. A Dimorphos-sized asteroid, while not capable of posing a planet-wide threat, could level a major city with a direct hit.

Also, the two asteroids’ relative proximity to Earth and dual configuration make them ideal for the first proof-of-concept mission of DART.

ROBOTIC SUICIDE MISSION

The mission represented a rare instance in which a NASA spacecraft had to crash to succeed. DART flew directly into Dimorphos at 15,000 miles per hour (24,000 kph), creating the force scientists hope will be enough to shift its orbital track closer to the parent asteroid.

The DART team said it expects to shorten the orbital path of Dimorphos by 10 minutes but would consider at least 73 seconds a success, proving the exercise as a viable technique to deflect an asteroid on a collision course with Earth — if one were ever discovered.

A small nudge to an asteroid millions of miles away years in advance could be sufficient to safely reroute it.

Earlier calculations of the starting location and orbital period of Dimorphos were made during a six-day observation period in July and will be compared with post-impact measurements made in October to determine whether the asteroid budged and by how much.

Monday’s test also was observed by a camera mounted on a briefcase-sized mini-spacecraft released from DART days in advance, as well as by ground-based observatories and the Hubble and Webb space telescopes, but images from those were not immediately available.

DART is the latest of several NASA missions in recent years to explore and interact with asteroids, primordial rocky remnants from the solar system’s formation more than 4.5 billion years ago.

Last year, NASA launched a probe on a voyage to the Trojan asteroid clusters orbiting near Jupiter, while the grab-and-go spacecraft OSIRIS-REx is on its way back to Earth with a sample collected in October 2020 from the asteroid Bennu.

The Dimorphos moonlet is one of the smallest astronomical objects to receive a permanent name and is one of 27,500 known near-Earth asteroids of all sizes tracked by NASA. Although none are known to pose a foreseeable hazard to humankind, NASA estimates that many more asteroids remain undetected in the near-Earth vicinity.

NASA has put the entire cost of the DART project at $330 million, well below that of many of the space agency’s most ambitious science missions. — Reuters

CARD Pioneer framework used as global benchmark for financial inclusion

The country’s first microinsurance company, CARD Pioneer Microinsurance Inc. (CPMI), has partnered with global accelerator Microinsurance Master to share best practices in protecting low-income households through simple, affordable and accessible insurance solutions.

This is the Pioneer group’s third time to host the Microinsurance Master in the Philippines. Twenty microinsurance practitioners from 14 different countries are attending the program to learn from Pioneer’s experience in growing its market from 270,000 to over 18 million enrolments in less than a decade.

CPMI is a joint venture between the Pioneer group and CARD MRI, the country’s largest microfinance institution, to principally address the range of protection needs of the low-income population, including but not limited to coverage for calamity, agriculture, business interruption, health, accident and loss of life.

“The fulfillment of our shared vision to eradicate poverty starts from providing Filipinos in the low income bracket affordable and accessible insurance. By understanding their needs and filling the gaps, we were able to not only grow our market but also to protect more Filipinos from unforeseen and unavoidable risks,” said CARD MRI founder Dr. Aris Alip in a session also attended by Pioneer Group Head Lorenzo Chan Jr.

“Microinsurance is such an important tool for low-income families in emerging markets and developing countries like the Philippines, where almost 24% of the population are engaged in agriculture,” said Mr. Chan. From 2010 to 2019, agricultural damage amounted to P290 billion. Typhoons in 2020 alone have wiped out P14.25 billion worth of agricultural goods. “By making insurance products more affordable and accessible, you bring value to your customers by offering a solution to those who need it most.”

Mr. Chan also stressed the role of public-private partnerships in making social development more inclusive through microinsurance. Early this year, state-run Philippine Crop Insurance Corp. and CPMI entered a risk-sharing program that would benefit the agriculture sector by protecting them from risks such as flood, typhoon, drought, plant diseases, and pest infestation, among others. This will cover crops ranging from rice and corn to coffee, banana, sugar etc.

“This public and private partnership in agri-insurance is the first in the Philippine market. An effective collaboration between the two sectors is vital to provide sustainable and effective insurance products to farmers and ultimately help those who provide food for our tables manage the risks they face,” Mr. Chan stressed in another recent global forum.

Microinsurance Master is a unique leadership programme intended to inspire, equip and strengthen those who are involved with or wish to embark on microinsurance with transformative insights, frameworks, and tools. The program is initiated by Bert Opdebeeck, a believer in inclusivity who works closely with various microinsurance champions.

 


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Canada to remove all COVID travel restrictions from Oct. 1

A PERSON stands in front of a Canadian flag in Montreal, Quebec, Canada, Sept. 20, 2022. — REUTERS

OTTAWA — Canada will drop all coronavirus disease 2019 (COVID-19) restrictions for travelers from Oct. 1, including vaccination and masking requirements for flights and trains, the government said on Monday.

The move is likely to boost the Canadian travel industry, already booming after months of lull during the pandemic.

Canadian carriers were also pressing for an end to mask mandates on flights, citing thousands of incidents of non-compliance this year alone.

“As Canadians and international visitors look to make travel plans, the long-awaited removal of all remaining measures effective Oct. 1, 2022, will further expedite recovery for our industry and the Canadian economy,” Canada’s second-largest carrier WestJet Airlines said in a statement.

The decision to end restrictions was based on Canada’s vaccination rate, availability of newer vaccines and treatments and data showing the country had passed the peak of the latest wave of coronavirus infections, the government said.

More than 90% of Canadians over 12 have taken the primary series of a COVID vaccine. This month, Canada authorized Moderna Inc’s bivalent COVID-19 shots for adults, the country’s first Omicron-adapted vaccine.

“Thanks largely to Canadians who have rolled up their sleeves to get vaccinated, we have reached the point where we can safely lift the sanitary measures at the border,” Health Minister Jean-Yves Duclos said.

Mr. Duclos said the government was prepared to reinstate restrictions if needed.

“Obviously we have no hope to reintroduce some of these measures but if we need to protect the safety of Canadians, we will have to,” he told reporters in Ottawa.

Travelers, regardless of citizenship, will not have to submit health information through the ArriveCAN app or provide proof of vaccination from Saturday.

A requirement for travelers to wear masks on planes and trains would also be dropped. Cruise ship passengers and crew would also no longer be subject to vaccine requirements or COVID testing. — Reuters

Philippines to shut 175 offshore gambling firms, deport 40,000 Chinese workers

REUTERS

MANILA — The Philippines will stop operations of 175 offshore gambling firms and deport about 40,000 Chinese workers, a justice ministry official said on Monday, part of a crackdown on the notoriously opaque online gaming industry.

The sector emerged in the Philippines in 2016 and grew exponentially, as operators capitalised on the country’s liberal gaming laws to target customers in China, where gambling is banned.

At their peak, Philippine offshore gambling operators, or POGOs, employed more than 300,000 Chinese workers, but the pandemic and higher taxes have forced many to operate elsewhere.

“The crackdown was triggered by reports of murder, kidnapping and other crimes committed by Chinese nationals against fellow Chinese nationals,” justice ministry spokesperson Jose Dominic F. Clavano IV said.

The POGOs targeted for closure had licenses that either expired or were revoked, for violations like non-payment of government fees, Clavano said, adding the deportation of the Chinese workers would start next month.

The government generated P7.2 billion ($122.21 million) in 2020 and P3.9 billion last year in POGO fees alone, according to the finance ministry. Economists estimate considerably larger amounts are being spent on taxes, workers’ spending and office rental.

China’s embassy in Manila in a statement said Beijing supports the deportation and crackdown on POGO-related crimes, adding the government “firmly opposes and takes tough measures to combat gambling.”

The Philippine regulator, which recently said there were 30 licensed POGO firms versus 60 before the pandemic, did not immediately respond to a request for comment.

Real estate consultancy Leechiu Property Consultants estimates that a complete exit of the POGO industry would leave vacant 1.05 million square meters (259 acres) of office space — a third of the size of New York’s Central Park — and P8.9 billion ($151 million) in foregone annual rent.

The sector employs 201,000 Chinese and 111,000 Filipinos, according to Leechiu’s data, which estimates POGOs deliver P190 billion ($3.22 billion) to the economy each year, a boon to the property and retail sectors. ($1 = 59.01 Philippine pesos) — Reuters

Energy, inflation crises risk pushing big economies into recession — OECD

OECD/Flickr

PARIS — Global economic growth is slowing more than was forecast a few months ago in the wake of Russia’s invasion of Ukraine, as energy and inflation crises risk snowballing into recessions in major economies, the Organisation for Economic Cooperation and Development (OECD) said on Monday.

While global growth this year was still expected at 3.0%, it is now projected to slow to 2.2% in 2023, revised down from a forecast in June of 2.8%, the OECD said.

The Paris-based policy forum was particularly pessimistic about the outlook in Europe — the most directly exposed economy to the fallout from Russia’s war in Ukraine.

Global output next year is now projected to be $2.8 trillion lower than the OECD forecast before Russia attacked Ukraine — a loss of income worldwide equivalent in size to the French economy.

“The global economy has lost momentum in the wake of Russia’s unprovoked, unjustifiable and illegal war of aggression against Ukraine. GDP growth has stalled in many economies and economic indicators point to an extended slowdown,” OECD Secretary-General Mathias Cormann said in a statement.

The OECD projected euro zone economic growth would slow from 3.1% this year to only 0.3% in 2023, which implies the 19-nation shared currency bloc would spend at least part of the year in a recession, defined as two straight quarters of contraction.

That marked a dramatic downgrade from the OECD’s last economic outlook in June, when it had forecast the euro zone’s economy would grow 1.6% next year.

The OECD was particularly gloomy about Germany’s Russian-gas dependent economy, forecasting it would contract 0.7% next year, slashed from a June estimate for 1.7% growth.

The OECD warned that further disruptions to energy supplies would hit growth and boost inflation, especially in Europe where they could knock activity back another 1.25 percentage points and boost inflation by 1.5 percentage points, pushing many countries into recession for the full year of 2023.

“Monetary policy will need to continue to tighten in most major economies to tame inflation durably,” Mr. Cormann told a news conference, adding that targeted fiscal stimulus from governments was also key to restoring consumer and business confidence.

“It’s critical that monetary and fiscal policy work hand in hand”, he said.

Though far less dependent on imported energy than Europe, the United States was seen skidding into a downturn as the US Federal Reserve jacks up interest rates to get a handle on inflation.

The OECD forecast that the world’s biggest economy would slow from 1.5% growth this year to only 0.5% next year, down from June forecasts for 2.5% in 2022 and 1.2% in 2023.

Meanwhile, China’s strict measures to control the spread of COVID-19 this year meant that its economy was set to grow only 3.2% this year and 4.7% next year, whereas the OECD had previously expected 4.4% in 2022 and 4.9% in 2023.

Despite the fast deteriorating outlook for major economies, the OECD said further rate hikes were needed to fight inflation, forecasting most major central banks’ policy rates would top 4% next year.

With many governments increasing support packages to help households and businesses cope with high inflation, the OECD said such measures should target those most in need and be temporary to keep down their cost and not further burden high post-COVID debts. — Reuters

World Bank slashes East Asia growth outlook for 2022

MANILA – Economic growth in East Asia and the Pacific will weaken sharply in 2022 due to China’s slowdown, but the pace of expansion will pick up next year, the World Bank said on Tuesday.

The Washington-based lender said in a report it expected 2022 growth in the East Asia and Pacific region, which includes China, to slow to 3.2%, down from its 5.0% forecast in April, and the previous year’s growth of 7.2%.

The weaker forecast was due mainly to a sharp slowdown in China, caused by its strict zero-COVID rules that have disrupted industrial production, domestic sales and exports, the World Bank said.

China, which constitutes 86% of the 23-country region’s economic output, was projected to grow 2.8% this year, a significant deceleration from the bank’s previous forecast of 5.0%. In 2021, China’s economy expanded 8.1%, its best growth in a decade.

For 2023, the world’s second-largest economy was seen growing at 4.5%.

“As they prepare for slowing global growth, countries should address domestic policy distortions that are an impediment to longer term development,” World Bank East Asia and Pacific Vice President Manuela Ferro in a statement.

Another risk to the region’s outlook was aggressive interest rate hikes that central banks across the world are undertaking to combat soaring inflation. These have caused capital outflows and currency depreciations, the World Bank said.

The multilateral aid agency cautioned policymakers on imposing price controls by way of subsidies, warning these measures would only benefit the wealthy and draw government spending away from infrastructure, health and education.

“Controls and subsidies muddy price signals and hurt productivity,” World Bank East Asia and Pacific Economist Aaditya Mattoo, said in a statement. — Reuters

Digital nomad hotspots grapple with housing squeeze

UNSPLASH

LISBON/MEXICO CITY — Among the glitzy new apartment buildings springing up in Mexico City’s Juarez neighborhood, fashionable coffee shops are taking the place of taco stands and English is replacing Spanish on signs and posters aimed at an influx of newcomers.

The remote work boom sparked by coronavirus disease 2019 (COVID-19) has lured large numbers of “digital nomads” from the United States to the Mexican capital and other cities, drawn in part by lower housing costs south of the border.

But their arrival has fueled some residents’ anger — and protests — about gentrification, which they say is pricing local families out of their homes and leading to evictions in areas coveted by developers such as Juarez, Roma and Condesa.

“We’re starting to see posters on the street saying that (digital nomads) aren’t welcome, and people are getting very angry,” said Sofia Ramirez, director of the think-tank Mexico ¿Como Vamos?.

Landlords in some popular districts are increasingly opting to let their properties to foreigners via Airbnb at higher rates, locals and researchers say, putting them out of reach of most existing residents.

Of the roughly 10,000 apartments listed on Airbnb in Mexico City, the average price per night is 1,450 pesos ($72), while 95% of Mexican workers earn less than 518 pesos ($26) per day, according to an analysis by the Thomson Reuters Foundation of data from advocacy group Inside Airbnb.

As the global nomadic workforce tops 35 million, according to a recent estimate by the ABrotherAbroad.com site, researchers and locals say authorities must take steps to protect residents from surging housing demand and ensure they see economic benefits from the shift.

“Digital nomadism wouldn’t be a problem if it was regulated to generate the least possible damage to locals. However, we see one population being affected to benefit a different one,” said Sergio Gonzalez from the 06600 Juarez Neighborhood Platform and Observatory, set up to shield local communities from gentrification.

‘HEART OF THE PROBLEM’

In Portugal’s capital, Lisbon — another hotspot for digital nomads — authorities have taken some measures to address a housing crunch caused partly by sizzling demand for short-term accommodation.

While Lisbon and Mexico City are relatively affordable for many foreigners, they were ranked the world’s third- and fourth-least liveable cities based on local rents and wages, a recent study by CIA Landlord Insurance found.

“Here you are at the heart of the problem,” said Susana Peralta, gesturing to the Alfama district, a formerly working-class neighbourhood dotted with chic restaurants and bars dedicated to Portugal’s traditional fado music.

“The concentration of short-term rentals in this neighborhood is this huge.”

Some researchers estimate the proportion based on short-term rental listings to be more than 50% of all residential properties in the inner city district of Santa Maria Maior.

A change in the short-term rental law of 2018 gave power to the municipalities to limit the number of short-term rentals in certain neighborhoods, though it has not been strictly applied in some districts outside the center, said Luis Mendes, a geographer at University of Lisbon who studies gentrification.

When the pandemic hit, Portuguese authorities banned evictions and key workers were housed in short-term rentals left empty by tourists, but such relief measures have since been lifted in tandem with travel curbs.

For Lisbon Mayor Carlos Moedas, tourism is “essential for the city”. He said he was not afraid of overtourism — it is simply a question of managing it.

He talked enthusiastically about supporting digital nomads and locals via tech startups and the “trickle-down effect” their presence in Portugal could have for the broader economy and local people.

There are signs of this happening, said Romanian fitness app entrepreneur Olivia Benton, who runs Lisbon’s Digital Nomad Meetup Group.

The group attempts to create “deeper connections” with the local community through talks, visits and hosting events at local cafes and is open to Portuguese residents.

Benton said she had never felt resentment or hostility from locals towards nomads like herself.

At one recent cafe meetup, dozens of young remote workers tapped away at their keyboards as cafe manager Daniella Siragusa served them cups of strong “bica” coffee.

“It’s good to have nomads here,” she said, adding that she was thankful for the business after repeated coronavirus lockdowns that she said had brought little by way of state support.

MAXIMIZE VALUE

Blaming digital nomads as the source of housing shortages in Mexico City’s up-and-coming neighborhoods is misguided, and highlights the need for policy to address such social shifts, said Ms. Ramirez, the director of Mexico ¿Como Vamos?.

“Mexican authorities are responsible for the absence of a plan to relocate locals or to provide credits to affected businesses,” she said.

According to a May report by Mexico ¿Como Vamos?, the lack of data on digital nomads has stopped the country from capitalizing on their presence.

It recommends creating a legal status for digital nomads that provides them with opportunities to invest, create startups, and pay taxes in Mexico.

Many other tourist hotspots have been quick to embrace the nomads, seeing the trend of remaining longer in one location as a way to recoup pandemic losses.

Destinations such as Aruba, Barbados, Cape Verde, Croatia, Estonia, Indonesia, Malta, and Norway have created digital nomad visas, allowing people to stay put and work for up to two years.

Beyond the dollars nomads spend, they can collaborate with local workers, helping to share their skills and knowledge, said Prithwiraj Choudhury, an expert on the future of work and associate professor at Harvard Business School.

Instead of trying to limit their numbers, he said governments should seek to “maximize the value creation from nomads.” — Thomson Reuters Foundation

Binance partners with CICC to aid PHL agencies in cybercrime prosecution and blockchain forensics

Binance Asia Pacific Head of Intelligence and Investigations, Jarek Jacubcek (center) in a cybersecurity training conducted with the Cybercrime Investigation and Coordination Center (CICC), and attended by Philippine law enforcement agencies like the PNP Anti-Cybercrime Group. The PNP contingent was led by PCol. Armel Gongona (second from the left).

Manila, Philippines – Binance, the world’s largest blockchain ecosystem, recently partnered with the Cybercrime Investigation and Coordination Center (CICC) under the Department of Information and Communications Technology (DICT), to share its insights and experiences in preventing cybercrime using blockchain forensics with the various law enforcement agencies.

The seminar was designed by Binance and conducted by the company’s Asia Pacific Head of Intelligence and Investigations Jarek Jacubcek. During the two days-long seminar, Mr. Jacubcek covered the technical aspects of interactions with and between exchanges, cryptocurrency tracing, common cybercrime activities, investigative techniques, prosecution of financial crimes, and forensics report development using open-source intelligence tools.

Mr. Jacubcek, a former member of the Garda, the Irish National Police, and Europol’s Cybercrime Centre, joined the Binance team in May and is tasked to take down malicious activities in the crypto ecosystem with the help of law enforcement agencies across the region. The seminar was also graced by the presence of CICC Usec. Alexander K. Ramos, CICC Deputy Director Mary Rose Magsaysay, and PCol. Armel Gongona, Deputy Director of Administration of the Philippine National Police (PNP) Anti-Cybercrime Group.

“We are here to increase the technical capacity of our law enforcement and to help the judicial system appreciate cryptocurrency and how it is used as digital evidence in the judicial system. We are doing this because we need the public reassured that our law enforcement system is catching up to high-tech criminals. We welcome cryptocurrency transactions so that the public may be able to use it for their economic activities,’’ says Mary Rose Magsaysay, Deputy Executive Director, CICC.

 

Binance on Cybersecurity

Binance has a strict KYC policy that imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money. Binance’s KYC processes are compliant with AML/CFT rules in over 200 jurisdictions. Binance does not allow users to trade on its platform without passing KYC checks that include country of residence and personal identification information.

Mr. Jacubcek notes, “Our primary objective over the past 18 months has been to assemble a globally recognized security and compliance team, consisting of more than 500 people from across the globe.” At the same time, Mr. Jacubcek notes that while exchanges like Binance do its share of ensuring that their platform is secure, users also need to take responsibility and cyber hygiene seriously.

“Cryptocurrency gives users power. All of a sudden, people have ownership of the funds. They can send funds from one person to another. But with the power comes responsibility. So, people should be very careful about their sensitive data and their cryptocurrencies when they’re making these transactions. With more education, consumers will appreciate the importance of personal data hygiene and better cybersecurity practices,” says Mr. Jacubcek.

Aside from the recent training session held in Quezon City, Binance also delivered workshops for law enforcement agencies and banking professionals in Germany (BKA, LKA, prosecutors), Canada (mixed Law Enforcement audience), Italy (Guardia di Finanza), Paraguay (prosecutors) and Brazil (Brazilian

Federal Police and Prosecutors) to help facilitate investigations of cybercrimes around the world. To protect their users, Binance has one of the world’s largest insurance funds called SAFU (secure asset fund for users) with holdings of $1 billion held transparently in two separate wallets that are auditable by the public at any time. The funds can be used to payout to users should their accounts be subject to hacks.

 


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IMF cuts Philippine growth estimate

SEAN YORO-UNSPLASH

By Keisha B. Ta-asan

THE INTERNATIONAL Monetary Fund (IMF) expects Philippine expansion to slow this year as rising interest rates cloud the global economic outlook.

It lowered its growth forecast for this year to 6.5% from its 6.7% estimate in July, matching the lower end of the government’s 6.5-7.5% goal.

“IMF staff projected real gross domestic product to grow by 6.5% in 2022 but slow to 5% in 2023, as the confluence of global shocks weigh in the economy in the coming months,” IMF Mission Chief for the Philippines Cheng Hoon Lim told a news briefing in Manila on Monday after finishing their yearly review.

“The IMF has had successive downgrades of global growth, including China and the US. The Philippines is not isolated from the rest of the world. So if these countries slow down, the Philippines will also slow down,” she said.

Ms. Lim said the growth outlook remained clouded by uncertainties caused by the slowdown in major economies such as the United States and China, and tightening monetary policy to temper inflation. 

In its latest World Economic Outlook (WEO) the IMF slashed the global GDP growth outlook to 3.2% from 3.6% this year and to 2.9% from 3.6% for 2023.

Inflation is also expected to rise to 5.3% this year before declining in 2023 as tighter monetary policy keeps inflation expectations anchored, Ms. Lim said.

Prices rose by 6.3% year on year in August — above the central bank’s 2-4% target — for a fifth straight month. The average inflation in the first eight months was 4.9%.

The Bangko Sentral ng Pilipinas (BSP) has raised benchmark interest rates by 225 basis points (bps) this year to tame inflation, including its 50-bp hike last week.   

Ms. Lim said the central bank’s policy tightening is appropriate to keep inflation expectations anchored.

The IMF said the Philippine banking system has shown resiliency as profitability returned to pre-pandemic levels and bad loans have only increased slightly.   

“Downside risks to growth and higher interest rates warrant close monitoring of financial stability risks especially in sectors that are overleveraged,” Ms. Lim said, citing the need to amend the country’s Bank Secrecy Law and enhancing bank supervision.

The Philippines’s continued fight against money laundering and terrorist financing would also improve business sentiment and encourage more foreign direct investments.

“The government’s plan to undertake fiscal consolidation while prioritizing highest infrastructure spending is commendable,” the IMF mission chief said. “The issuance of the medium-term fiscal framework that covers a six-year horizon, beyond the usual three-year horizon, helps signal the National Government’s commitment to fiscal consolidation and fiscal sustainability.

“Fiscal consolidation should be underpinned by stronger revenue mobilization and cost-effective government spending. This is important to secure the resources needed for the Philippines’ important social and development plans,” she added.   

Ms. Lim said central bank intervention in the foreign exchange market could ease inflationary pressures especially when there is “heightened volatility with sharp and disorderly exchange rate depreciation.” This could relieve some of the pressure on monetary policy and lower output costs.

Meanwhile, S&P Global Ratings lowered its growth forecast for the Philippines to 6.3% from its 6.5% estimate in June, citing rising interest rates meant to curb inflation that could temper expansion.

“More domestic demand-oriented economies are less exposed to the global slowdown,” it said in a report. “We expect a larger slowdown in 2023 in South Korea and Taiwan than in India, Indonesia and the Philippines.”

“Considering economies other than Indonesia, we expect elevated core inflation to drive up policy rates materially further in Australia, India, New Zealand, the Philippines and South Korea,” the credit rating company said.

S&P said it expects inflation in the Philippines to quicken to 5% this year before easing to 4.25% in 2023 and to 3.5% in 2024.

It also sees the central bank further raising key policy rates by 75 basis points (bps) to end the year at 5% before cutting rates by 75 bps to 4.25% in 2023 and another 75 bps to 3.5% in 2024.

“In some countries, the domestic demand recovery from COVID-19 has further to go,” it said. “This should support growth next year in India, Malaysia, the Philippines and Thailand. The latter three should also further benefit from improving tourism.”

Fitch Solutions, Moody’s eye more rate increases

THE PHILIPPINE central bank is expected to raise the policy rate to 5% by yearend — higher than the initial 4.5% forecast — to tame inflation and protect the peso, Fitch Solutions Country Risk & Research said.

“Over the coming months, we expect that the elevated inflationary backdrop and a continued hawkish US Fed will prompt the Bangko Sentral ng Pilipinas (BSP) to tighten its monetary policy setting further,” it said in a Sept. 23 note.

Moody’s Analytics in a separate note dated Sept. 23 also said it expects the BSP to further increase borrowing costs at its Nov. 17 and Dec. 15 policy meetings.

“Currency weakness is a key issue for BSP; the peso has slipped more than 10% year to date against the greenback, making it one of the worst-performing emerging market currencies,” it said.

The BSP last week raised its benchmark policy rate by 50 basis points (bps) to 4.25%. Rates on the overnight deposit and lending facilities also rose by 50 bps to 3.75% and 4.75%.

“Energy and food prices will remain a significant source of upward price pressures in the Philippines,” Fitch Solutions said in its report.

It kept its average inflation forecast for the Philippines at 5.6% for 2022, matching the central bank’s revised 5.6% average inflation estimate.

Inflation quickened to 6.3% in August from a year earlier, exceeding the central bank’s 2-4% target for a fifth straight month. It averaged 4.9% in the first eight months.

Oil prices are still higher than last year even if they have started to decline, the data analytics company said.

“Our Oil & Gas team continues to forecast Brent crude oil to average $105 per barrel in 2022 and $100 per barrel in 2023, compared with  $70.95 per barrel in 2021,” it said.

“We expect global monetary conditions to tighten further, which will force the BSP to hike more aggressively to safeguard external stability,” it added.

The US Federal Reserve has hiked its federal fund rate by 300 bps since March to a target of 3-3.25%. Fitch Solutions expects another 75-bp increase by yearend.

“So far, the BSP has continued to lag behind the Fed’s tightening cycle, causing the peso to weaken substantially against the dollar,” it said.

The peso closed at P58.50 a dollar on Friday from P58.49 a day earlier, Bankers Association of the Philippines data showed. It has weakened by 14.7% or P7.50 from its P51-a-dollar close last year.

Markets were closed on Monday due to Super Typhoon Karding (international name: Noru), which slammed into the Philippines’ main island of Luzon on Sunday, prompting President Ferdinand R. Marcos, Jr. to suspend work and school.

“If the BSP chooses to stand pat in subsequent meetings as the US Fed continues to hike, real interest rate differentials could widen in favor of the US and trigger capital outflows, exacerbating downside volatility for the peso,” Fitch Solutions said.

“The Philippines’ strong economic recovery will provide more room for the BSP to normalize its monetary policy,” it added.

The economy is expected to continue to recover this year. Fitch Solutions earlier raised its gross domestic product (GDP) growth forecast for the Philippines to 6.6% from 6.1%.

The country grew by 7.4% in the second quarter, bringing the first-half growth to 7.8%.

Moody’s said the weak peso has put greater pressure on imported inflation, while the trade deficit has widened to record levels in recent months.

Data from the local statistics agency showed the trade-in-goods balance stood at a record $5.927-billion deficit in July. This was wider than the $5.869-billion gap in the previous month and the $3.505-billion deficit a year earlier.

“Price pressures are expected to broaden after the government approved hikes in the minimum wage and transport fares,” Moody’s said. “The rise in core inflation over the last few months indicates that demand-side pressure is building.”

“Above-target inflation keeps the door open for BSP to continue with rate hikes. The central bank will also be pressured to move in tandem with the Fed to support the peso,” it added. — Keisha B. Ta-asan

Marcos told to harness local maritime industry

PHILSTAR FILE PHOTO

By Kyle Aristophere T. Atienza, Reporter

PRESIDENT Ferdinand R. Marcos, Jr. should fulfill his campaign promise to modernize the Philippines’ maritime industry, which could be a game changer in the country’s post-pandemic recovery, economists said.

Developing the maritime sector should be in line with the global push for sustainability and the demands of the country’s ocean-based economy, they added.

“Shipping is an important item in transaction costs for a country with an archipelagic feature, and it plays an important role in the cost-effective distribution of final goods,” said George N. Manzano, an economist at the University of Asia and the Pacific.

“Agricultural produce could easily be shipped from regions with low prices to regions where prices are spiking,” he added.

Mr. Marcos had promised to develop the maritime sector by making the Philippines a logistics hub and harnessing the country’s sea resources.

The maritime sector should be an important aspect of the president’s food security push, Mr. Manzano said in a Facebook Messenger chat.

Efficient shipping could cut the costs of agricultural produce and stabilize the prices of basic goods across regions, while boosting the country’s export sector. “It would improve the load factor of containers coming into and going out of the country.”

The Organization for Economic Cooperation and Development has said 80-90% of global trade is shipped by sea.

“A large proportion of the output of the maritime industry contributes to the food sustainability thrusts of the administration,” Philip Arnold “Randy” P. Tuaño, dean of the Ateneo School of Government, said in an e-mail.

The Philippines was eighth among the top fish-producing nations in the world in terms of production volume in 2018, accounting for 2.06% of the global total, Mr. Tuaño said, citing the United Nations-backed Food and Agriculture Organization.

Mr. Marcos has yet to detail his plans for the maritime industry, having failed to mention it in his first address to Congress on July 25.

The Transportation department has told a congressional hearing the Budget department had rejected its 2023 plan to build more seaports and upgrade existing ones for P800 million.

‘BLUE SUMMIT’
Mr. Tuaño said the state should see the actual and potential economic and environmental gains from the maritime sector.

Tourism, food production, shipbuilding and offshore power generation are just some of the key activities in the maritime industry that can boost employment and the economy, policy analyst Michael Henry Ll. Yusingco said in an e-mail.

Developing the maritime industry should be in line with the demands of a blue or ocean economy, which Mr. Marcos included in his economic agenda during his presidential campaign, he pointed out.

“We have one of the longest coastlines in the world,” Mr. Yusingco said. “The seas surrounding us are undeniably economic assets. Sadly, these assets remain underdeveloped. Our maritime sector pales in comparison to other island nations such as Australia.”

He said the government should craft a maritime policy framework and not just focus on infrastructure development.

“Simply improving ports may not be enough if there is no overarching maritime policy framework being followed,” he said. “In this regard, the administration should consider organizing a blue economy summit to jumpstart the process.”

Experts have cited challenges in seeking to modernize the maritime sector and make it resilient to future shocks.

Reducing the carbon emissions of the shipping sector and stricter environmental regulations were among the top concerns of senior maritime stakeholders around the world, according to a report by Global Maritime Issues Monitor this month.

Geopolitical issues and workforce shortages were also cited as key issues likely to affect the sector in the next 10 years, it added. “The industry feels least prepared for autonomy technology and failure or shortfall in infrastructure.”

Mr. Tuaño said the Philippine maritime industry is notorious for high shipping costs, low service quality, and a poor safety record based on frequent sea accidents.

The government must also address issues hounding the country’s maritime workforce, he said. “Strategies to strengthen and upgrade the quality of education and training of seafarers through policy and institutional reform are also important.”

The European Commission in December cited deficiencies in the Philippines’ seafarer education, training and certification system, flagging the country’s poor compliance with a 1970s convention.

The government should review maritime laws to streamline systems and address potential conflicts of interest, Mr. Manzano said.

It should participate in cooperation agreements in the region on fisheries, sea transport and security, he added.

Creating a robust workforce, streamlining the bureaucracy, marine resource conservation, security and identifying the links between agriculture productivity and marine development are some of the issues that stakeholders should discuss, Mr. Yusingco said.

“It’s a boon that there is already a wealth of academic and industry studies on the blue economy,” he said. “This administration simply needs to capitalize on this moment to fulfill the president’s promise.”

Philippine companies seen to hike 2023 salaries by 5.7%

PHILIPPINE EMPLOYERS will probably increase their budget for pay increases next year amid a tight labor market and rising prices, according to Willis Towers Watson (WTW). Read the full story.

Philippine companies seen to hike 2023 salaries by 5.7%