SEOUL — North Korea’s rubber-stamp parliament convened this week to pass legislation aimed at turning the country into a “beautiful and civilized socialist fairyland,” state media reported on Thursday.
The North Korean Supreme People’s Assembly (SPA) met for its first session on Wednesday, and adopted laws on landscaping and rural development, state news agency KCNA reported.
The two laws will help advance the ruling party’s efforts to bring about “a radical turn in the rural community and its policy on landscaping to achieve a rapid development of the Korean-style socialist rural community and spruce up the country into a beautiful and civilized socialist fairyland,” KCNA said, citing a deputy’s speech to the gathering.
North Korean leader Kim Jong Un, who did not attend the session, has vowed to improve people’s livelihoods and boost rural development amid spiralling economic crises caused by self-imposed coronavirus disease 2019 (COVID-19) lockdowns, international sanctions over the country’s nuclear weapons program, and natural disasters.
Many of Mr. Kim’s economic promises have yet to be fulfilled, analysts say, and aid organizations have warned of rampant food shortages and other hardships.
According to a report last month by 38 North, a US-based site that monitors North Korea, Mr. Kim’s vow to rebuild a typhoon-ravaged province in the country’s North and transform it into a “model” mining community has made little progress.
The United States has accused Kim of pouring resources into military projects at the expense of the country’s people. It said this week Russia had approached North Korea about buying ammunition, potentially providing a windfall for the cash-strapped government in Pyongyang. Russia said the US report was “fake.” — Reuters
Continuing a legendary passion for science and space, OMEGA has taken part in the Starmus VI Festival this year, hosted in Yerevan, Armenia. As it has done for the past two editions, the brand was proud to award an exclusively designed Speedmaster Moonwatch to each of the individual winners of the Stephen Hawking Medal for Science Communication.
The Starmus Festival is a combination of science, art and music, and its goal is to help the general public understand and appreciate science. Since 2011, it has included performances and presentations from astronauts, cosmonauts, Nobel Prize winners, and prominent figures from science, culture, the arts and music.
As part of its partnership, OMEGA supports the Stephen Hawking Medal for Science Communication, which recognizes those who promote science through three different disciplines including Science Writing; Films; and Music and Art.
This year’s four winners included Brian May, Jane Goodall, Diane Ackerman and the NASA Communications Unit.
As a reward for their achievements, each individual recipient received a special Speedmaster Moonwatch crafted in 18K Sedna™ Gold – OMEGA’s own exclusive red gold alloy. Inside, the watch is powered by the modern Co-Axial Master Chronometer 3861 movement, a direct descendent of the iconic Calibre 321 that went to the moon. Most impressively, the timepiece features a smoked sapphire crystal glass caseback, which has been uniquely engraved in white to depict the medal itself. This includes an image of the cosmonaut Alexei Leonov during the first ever human spacewalk as well as the “Red Special” guitar of Queen’s Brian May.
Speaking about this year’s award ceremony, Raynald Aeschlimann, President and CEO of OMEGA said, “What we love about the Starmus Festival is that they make innovative and complex subjects accessible to everyone. It’s a celebration of creativity and getting more people excited about the universe around us. We’re very honored to play a part and gift these watches to such deserving winners of the Stephen Hawking medal.”
Taking place this September, the Starmus VI Festival is dedicated to “50 Year On Mars”. The five-day event will welcome many notable names from the world of science, including OMEGA’s own ambassador, the Apollo 16 astronaut Charlie Duke. OMEGA has supported the festival since 2017, and this year will mark the brand’s third appearance.
Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.
The country’s unemployment rate dropped to its lowest level in more than two years, the Philippine Statistics Authority reported on Thursday morning.
Preliminary data from the statistics agency showed the unemployment rate at 5.2% in July, easing from the jobless rate of 6% in June and 7.2% in July last year.
It was the lowest share of the unemployed Filipinos to the total labor force under the monthly labor force survey since January 2021. Including the quarterly surveys, July’s unemployment rate was the smallest since 4.5% in October 2019.
This translated to 2.602 million jobless Filipinos in July, down by 388,000 from June. It also declined by 627,000 from year-ago level of 3.229 million.
Meanwhile, job quality deteriorated as the underemployment rate rose to 13.8% in July from 12.6% in June. However, this was lower than 21% in July last year.
This was the highest underemployment rate in two months, or since May’s 14.5%.
In absolute terms, the ranks of Filipinos already working but still looking for more work or longer working hours to the total employed population increased by 655,000 month on month to 6.543 million in July. But this was lower by 2.226 million from 8.769 million underemployed Filipinos in July last year.
The size of the labor force in July was estimated at 49.994 million in July, up by 412,000 from 49.581 million in June. This brought the labor force participation rate (LFPR) to 65.2% of the country’s working-age population in July, inching up from 64.8% the previous month.
In the seven months to July, the unemployment rate averaged 5.9%, lower than 8.0% in the same period last year.
The underemployment rate also improved, averaging 14.2% in the seven months to July, from 16.4% a year ago.
The employment rate in the January to July period stood at 94.1%, from 92% last year, while the LFPR slightly increased to 63.9% during the same period from 63.0%.
New entrants to the labor force reached 1.289 million in July, larger than 980,619 recorded in June.
The employment rate reached 94.8% in July from 94.0% in June. This translated to 47.391 million employed Filipinos in July from 46.592 million the previous month.
Services sector remained the top employer in July after recording an employment rate of 58.8%, increasing from 56.5% in June.
However, employment rate in agriculture and industry eased to 23.5% in July (from 24.5% in June) and 17.7% (from 19%), respectively.
On average, an employed Filipino worked 40.5 hours a week in July, slightly increasing from the 40.3 hours logged the previous month, but lower than the 41.7 hours in July last year. — Ana Olivia A. Tirona
The gateway model into the luxurious world of Lexus is also a stepping stone to an electrified tomorrow.
The Lexus UX is known as the gateway into the Lexus luxury brand. This subcompact urban crossover delivers a premium driving experience alongside Lexus’ famous refinement, comfort, and Takumi craftsmanship details. Now, Lexus ushers in a new era by introducing the all-hybrid Lexus UX lineup. Choose to take the very first step into Lexus’ luxury world, and you will also be contributing to a greener future. For Lexus, amazing experiences go hand with sustainability and a genuine concern for the natural environment.
The UX is a showcase of Lexus’ innovative design, luxury features, and advanced safety. It is a package that combines charismatic styling elements and an ultra-efficient powertrain. These features—which draw from a vibrant Japanese heritage—are proudly built and engineered by master craftsmen.
Lexus Philippines will be offering the NEW Lexus UX in two hybrid variants: The UX 250h F Sport (P3,798,000) and UX 250h Premier (P3,058,000). These models are very responsive to drive and, like all Lexus hybrids, offer better fuel efficiency and lower emissions. They also require no plugging in for recharging and have no issues where driving range is concerned.
ADVANCED HYBRID DRIVETRAIN
Both UX 250h F Sport and UX 250h Premier variants are equipped with a Lexus self-charging hybrid powertrain, featuring multiple cutting-edge components, including the 2.0-liter gasoline engine, hybrid transaxle, compact battery, and power control unit. With 184ps/135kW total system output, it combines high fuel efficiency with a very smooth, natural and responsive driving experience.
The UX hybrid system couples the gasoline engine with two electric motor/generators in a new-generation hybrid transaxle that is more compact, lighter and has less internal friction than previous Lexus hybrid systems. The Power Control Unit (PCU) is more powerful yet is 20% smaller and 10% lighter. Optimizing the level of electric motor assistance and engine rpm produces a linear acceleration feel without the engine running at high revs. Engine speed is synchronized with vehicle speed to create an immediate and continuous acceleration feel. The transaxle mounts the electric motor/generators (MG1 and MG2) coaxially rather than inline. The resulting smaller and lighter package reduces frictional losses by 25%. In addition, MG2 is now a higher speed motor, yielding better performance and efficiency.
With the new 4th generation hybrid battery, the NEW UX now comes with an 8-year HEV battery warranty. It also comes with the standard drive train warranty of 3 years or 100,000 kms. (whichever comes first)
The new UX has a 2.0-liter in-line four-cylinder engine achieving class-leading 41% thermal efficiency, thanks to its use of laser-clad intake valve seats with an all-new intake port profile; a high compression ratio (14:1); and D4-S fuel injection combining direct and secondary port injectors to achieve high-speed combustion. VVT-iE intelligent variable valve-timing with an electric actuator on the intake side also improves drivability while reducing emissions. A continuously variable capacity oil pump and a variable cooling system with an electric water pump contribute to ultra-low internal friction, further optimising engine performance and fuel efficiency.
The Sequential Shiftmatic of the CVT automatic transmission delivers responsive engine braking force in six steps with a shift feel similar to a manual transmission, using steering wheel shift paddles or the S position on the shift lever. The compact and lightweight nickel-metal hydride (NiMH) battery and compact cooling system are located below the rear seat, which helps give the vehicle its low center of gravity.
SAFETY AND CONVENIENCE FEATURES
The UX 250h F Sport is now equipped with Lexus Safety Sense (LSS) fitted as standard—a suite of active safety technologies that support the driver and reduce the risk and severity of a range of potential accidents. It includes Dynamic Radar Cruise Control, Pre-Collision System (PCS) with pedestrian detection, Lane Keep Assist with Lane Departure Alert and Steering Assist, Lane Trace Assist and Intelligent High-Beam headlamps or Adaptive High-beam System (AHS).
Other notable features found on the UX 250h F Sport variant are adaptive variable suspension; an 8in multi-information display; paddle shifters behind the steering wheel; and interior and exterior trim pieces that are exclusive to this variant.
Both the UX 250h F Sport and UX 250 Premier are equipped with LED headlamps, DRLs, and taillamps; voice recognition; power rear hatch with kick sensor; wireless Apple CarPlay and Android Auto; and a 10-speaker audio system. For added safety and convenience, both variants come with Hill-Start Assist (HSA), Vehicle Stability Control (VSC); and Blind Spot Monitor (BSM).
EXCEPTIONAL DESIGN
Lexus designed the UX cabin to evoke the feel of a dynamic, luxury saloon, but with the higher seating position and versatility that are required of an SUV. The materials and finish are pure Lexus, combining Japanese traditions in craftsmanship and hospitality with innovative production techniques.
The interior also conveys a sense of security. For example, the form of the door shoulders evokes a robust frame beneath. The designers have created a feeling of seamless continuity inside the UX, inspired by engawa, a traditional Japanese architecture concept that blurs the boundary between the inside and outside of a home.
LEXUS ELECTRIFIED
The road to a Lexus Electrified future in the Philippines has already been paved by the current crop of hybrid models. Locally, the Lexus LS flagship, Lexus IS sport sedan, Lexus RX SUV, Lexus NX crossover and the Lexus ES sedan are offered with hybrid variants. Now, the all-hybrid UX lineup joins their ranks and is ready to cater to customers committed to a greener future.
To learn more, visit the Lexus website at lexus.com.ph or visit their social media pages on Facebook and Instagram at Lexus Philippines.
To arrange a consultation with your personal sales consultant, visit the Lexus Remote page at https://fal.cn/3eSWW.
You may also download the MyLEXUS App available on both Android and iOS users to receive live updates and access other premium services.
Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.
Manufacturing rose for the second straight month in July, the Philippine Statistics Authority (PSA) reported on Thursday morning.
Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed the volume of production index (VoPI) increased by 2.5% year on year in July from the revised 0.7% growth in June.
However, this was slower compared with the 534.4% growth in the same month a year ago.
This was the second straight month of growth since the revised 0.3% decline in May. Year to date, factory output rose by 24.1%.
The statistics agency said 14 out of 22 industry divisions contributed to the growth led by manufacture of fabricated metal products, except machinery and equipment with 30.3% in July, however, this is slower compared with the 45.8% growth reported in June.
This is followed by manufacture of machinery and equipment except electrical (29.1% in July), and manufacture of wood, bamboo, cane, rattan articles and related products (28.5%).
In comparison, S&P Philippines Manufacturing Purchasing Managers’ Index (PMI) slipped to 50.8 in July from 53.8 in June. A reading above 50 marks improvement for the manufacturing sector while anything below indicates deterioration.
The capacity utilization rate of these factories averaged 71.3% in July, a tad higher from 71.2% in June and 65.8% in the same month a year ago. All 22 sectors averaged a capacity utilization rate of at least 50%. — BTMG
“Education is the greatest equalizer.” This is a belief held by Henry Sy, Sr.
The late founder of the SM group deemed that if he could help send one child to school, that child could then help their siblings to also finish their schooling. And eventually, together, they could help uplift their family out of poverty.
As the group’s social good arm, SM Foundation, Inc. (SMFI) hence anchored its scholarship program to the belief of its founder.
SMFI offers scholarship grants to poor yet deserving students as a way to contribute in eradicating the intergenerational cycle of poverty in the Philippines. This year, SMFI has welcomed new scholars from across the country to sustain this vision.
The more than 300 new college scholars of SMFI were officially welcomed in The Online Awarding of the SM College Scholarship themed “Rise to Greatness”, broadcasted live on SMFI’s Facebook page and YouTube Channel last Aug. 27.
Of these more than 300 scholars, 60% come from provinces nationwide, while 40% are from Metro Manila. SMFI currently has over 1,300 college scholars in total.
The virtual event imparted inspiring stories from the new SM scholars, an alumnus of SM’s scholarship program, and messages from some officials of SMFI.
“We do this every beginning of the school calendar. But do you think we get tired? Not a bit. Because while the program agenda remains almost constant, the many stories behind each scholar applicant’s journey from application to being chosen as scholar take different forms, surface from diverse situations and locations, resulting to varied emotions,” Carmen Linda Atayde, SMFI’s executive director for education programs, said in her welcome remarks.
The new SM college scholars were also oriented about the program’s benefits and how to maintain their scholarship grants.
Their benefits include free tuition and miscellaneous fees; a monthly allowance of P2,000 for scholars studying in the provinces and P3,000 for those studying in Metro Manila; fun-filled and enrichment activities like Christmas party and recollection; an opportunity to work at SM during Christmas and summer break; and exclusive job offers with the SM group upon graduation.
The field of studies covered by SMFI’s college scholarship program include Computer Science, Information Technology, Engineering (Civil, Electrical, Mechanical, Computer, and Electronics), Education (Elementary and Secondary); Accountancy, and Financial Management.
SMFI SAVP for education program Eleanor Lansang presented the benefits of the program to the new SM scholars.
“I hope that all of the benefits presented to you this morning will be enough motivation for you to really excel in your college journey,” Eleanor Lansang, SMFI senior assistant vice-president for education programs, told the scholars during the event.
Stories of ‘Rising to Greatness’
“Since I was a child, I already know the importance of good education and character,” Joyson Abucay, one of the new college scholars of SMFI said. During his 12th grade, he knew that his parents could not financially support him on their own. Thus, he researched about scholarships available for students like him. Then he found SM College Scholarship online.
“Applying for scholarships and colleges were challenging and I sacrificed a lot,” he said. “In the end, it was all worth it. Now, I am studying Bachelor of Secondary Education Major in English [at] Saint Louis University.”
New SM scholar Joyson Abucay
In the future, Mr. Abucay sees himself working as an employee of SM.
“I believe that SM College Scholarship will not just help me finish my college education, but also help me become a productive citizen as well,” he said.
Another student who received an SM college scholarship grant is Diorella Songcuya, who is now studying Bachelor of Science in Accountancy at the University of the Philippines Visayas (Iloilo).
Ms. Songcuya first knew about the SM scholarship back in her years in junior high school. She saw a tarpaulin on her school fence acknowledging two graduates who passed the SM Scholarship.
“I was amazed by them passing the said scholarship and hoped that someday I could also qualify and be like them,” she recounted. A teacher also told her to stay updated about the scholarship program and try to apply. “She really specified that I try applying for the SM scholarship. So, that’s what I did.”
When her 12th grade began, she tried to search for Facebook pages and groups posting updates about scholarships. She also joined a group chat in telegram that sends links in relation to different scholarship offers.
“But of course, the update I mostly wanted to receive at the time was about the SM Scholarship since I heard that it offers great benefits for students,” she said.
New SM scholar Diorella Songcuya
Upon seeing her Facebook friends sharing the application for SM Scholarship, she did not hesitate and immediately applied for it.
Ms. Songcuya believes that the SM college scholarship “substantially benefits” her and her family in numerous ways.
Aside from providing assistance in reducing their financial obligations, she said the benefits from the scholarship, such as the allowance, would help in her scholastic needs. She also saw that the opportunity given to them scholars to work at SM Stores during Christmas and summer breaks would not only enable them to earn income and save but also be a means to sharpen their skills and prime themselves in a work environment setup. Meanwhile, access to events like Christmas parties and reunions offered exclusively to them by SMFI would allow them to develop their socialization skills and even extend their networks.
“Through the SM scholarship, my vision of achieving my dreams becomes clearer and more possible. As the theme of this year’s SM Scholarship Awarding goes, ‘Rise to Greatness’, I believe that this scholarship will serve as a ladder for me as I strive for success and rise to greatness.”
Since the establishment of its scholarship program in 1993, SM Foundation has supported and produced more than 8,000 college and tech-voc scholar-graduates.
Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.
Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.
Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla attends an economic briefing in Pasay City, July 26, 2022. — REUTERS
THE BANGKO Sentral ng Pilipinas (BSP) said it has room to further hike policy rates this year to support the peso as the US Federal Reserve is expected to continue its aggressive policy tightening.
This as the Philippine peso on Wednesday closed at a record low of P57.135 against the US dollar.
Year to date, the peso has weakened by 12.02% or P6.135 from its P51-a-dollar close on Dec. 31, 2021.
“These are challenging times because US interest rates are not just high but these should get higher. In turn, that means possibly, a weaker peso as shown in the case of yen (and) euro,” BSP Governor Felipe M. Medalla said at a Philippine economic briefing in Singapore on Wednesday.
“We have increased policy rates by 25 (bps), 25 (bps), 75 (bps), and then another 50 (bps). And of course, you cannot say it’s the end of it because if the US keeps doing 75 (bps hikes), we cannot, not react,” he added.
Fed Chairman Jerome H. Powell has made it clear that policy makers are prepared to raise rates as high as needed to cool inflation. Markets are now pricing in another 75-bp increase at their next meeting on Sept. 20-21.
The Monetary Board’s next meeting is on Sept. 22.
Since May, it has raised borrowing costs by 175 bps, bringing the benchmark rate to 3.75%.
Despite the aggressive rate hikes, Mr. Medalla said the overnight repurchase rate is still lower than the BSP’s 5.4% inflation forecast for the year.
“Monetary policy still has much room. Whatever happens we have the capacity to make sure that we will have…a target consistent with the inflation path,” he said.
Headline inflation eased to 6.3% year on year in August, from the nearly four-year high of 6.4% in July. It marked the fifth consecutive month that inflation went above the BSP’s 2-4% target.
“There are forces that are working in our favor. If US monetary policy becomes too restrictive, demand will fall and the things we import will fall because right now the increase in our current account deficit, two-thirds of that is because of high prices of the things we import,” Mr. Medalla said.
“There’s more downside than upside, but on balance, we are confident we have enough room. The economy’s strong enough, the banking system is strong enough and the payment system is also improving very fast,” he added.
The Philippine economy expanded by 7.8% in the first half, above the government’s 6.5-7.5% goal for the full year.
“Fortunately, despite this very difficult environment, we have one thing going for us. We are looking at the scenario where we have no more lockdowns. (Pent-up demand) will enable us to grow very fast despite tightening monetary conditions,” Mr. Medalla said.
“The key then is to achieve predictable inflation without necessarily bringing down growth too much.” — Keisha B. Ta-asan
THE PHILIPPINE peso closed at a record low for the fourth straight day, as the US dollar continued to strengthen amid expectations that the US Federal Reserve will continue to aggressively tighten policy.
The local unit closed at P57.135 a dollar on Wednesday, depreciating by 13.5 centavos from its P57 finish on Tuesday, Bankers Association of the Philippines data showed.
Year to date, the peso has weakened by 12.02% or P6.135 from its P51-per-dollar close on Dec. 31, 2021.
The local unit opened Wednesday’s session at P57 against the dollar, which was also the intraday best.
The peso’s weakest showing was at P57.33, a fresh intraday low.
Dollars exchanged rose to $1.23 billion from $812.19 million on Tuesday.
Wednesday marked the fourth day in a row that the peso closed at a record low.
“The peso weakens alongside the rest of the Asian foreign exchange space on broad dollar strength,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.
He said the US Federal Reserve and European Central Bank would inevitably deliver aggressive rate hikes as they try to cool red-hot inflation.
“With inflation likely kicking into higher gear as we head for the winter season, central banks have dug into the sand and vowed to snuff out inflation, seemingly at all costs,” Mr. Mapa said.
US economic data on Tuesday showed the service industry picked up in August, reinforcing expectations the Fed will hike rates by 75 basis points (bps) at its next meeting on Sept. 20-21.
The weaker peso could lead to higher inflation and prompt the BSP to implement more aggressive rate hikes to stabilize the currency and tame inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The Bangko Sentral ng Pilipinas (BSP) has raised benchmark rates by 175 bps since May to tame inflation.
Headline inflation eased to 6.3% year on year in August, from the nearly four-year high of 6.4% in July. It marked the fifth consecutive month that inflation went above the BSP’s 2-4% target.
BSP Governor Felipe M. Medalla said the central bank is likely to increase policy rates this year to support the peso.
“These are challenging times because US interest rate is not just high but it should get higher. In turn that means possibly, a weaker peso as shown in the case of yen and euro,” he said at a Philippine economic briefing in Singapore on Wednesday.
The Monetary Board’s next meetings are scheduled for Sept. 22, Nov. 17 and Dec. 15.
“The peso weakened from inflationary concerns after Russia announced a prolonged shutdown of a key gas pipeline in Europe,” a trader said in an e-mail.
“The local currency might depreciate ahead of potential hawkish comments from various Fed officials overnight,” the trader added.
For Thursday, the trader expects the peso to move between P57.05 and P57.25 against the dollar, while Mr. Ricafort gave a forecast of P57 to P57.20. – K.B.Ta-asan
A woman visits a semiconductor device display at the Appliance and Electronics World Expo (AWE) in Shanghai, China, March 23. — REUTERS
By Revin Mikhael D. Ochave, Reporter
THE SEMICONDUCTOR and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) is confident of reaching its 10% export growth target this year, amid the continued weakness of the peso against the US dollar.
“The Philippine electronics (sector) can meet its 10% growth projection,” SEIPI President Danilo C. Lachica said via Viber.
“We projected a 10% growth this year and as of June year to date, we recorded about $22.6 billion (in exports), and at this rate, we will exceed the 2021 numbers.”
In 2021, the industry reported $45.6 billion in exports, which he said was already higher than pre-pandemic numbers.
The weaker peso is benefiting exporters, particularly those in the semiconductor and electronics industry, Mr. Lachica said.
The Philippine peso on Wednesday closed at a record low of P57.135 versus the greenback.
“We used to see about 1.5-2% increase in sales. Now at the rate that we’re seeing today, this may jump to about 4-5%, so it is beneficial for the exporters but then again, it’s not so good for our local consumers,” Mr. Lachica said in an interview with BusinessWorld Live on One News channel.
Mr. Lachica noted the semiconductor and electronics industry has been affected by supply chain disruptions, the Russia-Ukraine war, volatile oil prices and elevated inflation this year.
“But as long as the peso continues to decline, it really is favorable for the exporters,” he added.
The peso depreciation will likely stoke inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
“For net importing countries (such as the Philippines), weaker local currencies would tend to increase the import costs/prices and overall inflation. Weaker peso exchange rate also increases the peso equivalent of the foreign debts of the government, some businesses, and other borrowers in US dollars or foreign currency, thereby potentially increasing the country’s debt stock,” he said in a Viber message.
The weaker peso mightadd to inflationary pressures, increasing the price of imported oil and other commodities, he added.
Inflation slowed to 6.3% in August from 6.4% in July, but economic managers expect elevated inflation for the rest of the year.
Foundation for Economic Freedom President Calixto V. Chikiamco said exporters, industries with high domestic input like agriculture, tourism, business process outsourcing firms, and overseas Filipino workers will benefit from the weaker peso.
“It is hard to say when consumers will feel the impact (of the peso’s decline) because imports from countries with weakening currencies like Japan and the euro won’t be affected. The weakening peso should affect our oil imports but oil prices have been going up and down,” he said.
“The weakening peso, however, will negatively affect our food imports and therefore, there will be cost-push food inflation considering also that there is currently a food shortage,” he added.
Dark clouds hover over Manila before dawn, Sept 3. — PHILIPPINE STAR/ MIGUEL DE GUZMAN
PRESIDENT Ferdinand R. Marcos, Jr. on Wednesday wooed foreign businesses in Singapore to invest in the Philippines, which he described as “Asia’s fastest rising star.”
“We are presently on a steady path to a strong recovery from the pandemic and a robust economic expansion. In the next few years, our economy is expected to outperform our regional peers,” Mr. Marcos said at a Philippine economic briefing in Singapore that was livestreamed on Facebook.
The Philippine economy grew by 7.8% in the first half, as business activity picked up amid the decline in coronavirus infections. The government is targeting 6.5-7.5% gross domestic product (GDP) growth for the full year, and 6.5-8% for 2023 to 2028.
Mr. Marcos, who is on a state visit to Singapore, said the administration is committed to establishing “an even more competitive business climate, conducive to high-value investments.”
Finance Secretary Benjamin E. Diokno said the economy’s prospects are “bright and promising” as it continues to recover from the pandemic.
“The country’s solid macroeconomic fundamentals reinforced by structural reforms enabled us to withstand the headwinds of the pandemic and mount a strong recovery,” Mr. Diokno said at the same event.
He highlighted several key economic reforms, such as amendments to the Retail Trade Liberalization Act, Public Service Act and Foreign Investment Act, which are aimed at encouraging foreign companies to invest in previously protected sectors.
The Finance chief also touted the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which reduced the corporate income tax on companies.
“We have changed drastically our environment, and now I think you’re welcome to do business in the Philippines. It’s a much improved environment. Plus, our secret weapon is our young population,” Mr. Diokno said.
Socioeconomic Planning Secretary Arsenio M. Balisacan said the administration is working to address inflation and the economic scars inflicted by the pandemic, as well as create jobs and reduce poverty.
“What we are putting across, the plans and programs we are putting together, we are confident that doing business in the Philippines is not only profitable but also more fun,” he said.
SM Investments Corp. Vice Chairperson and BDO Unibank, Inc. Chairperson Teresita T. Sy-Coson expressed support for the economic team, saying that monetary and fiscal policies are “very stable.”
“In spite of the inflation rate and the depreciation [of the peso], we’re still very much okay. And you don’t hear a lot of complaints (from) the private sector. So, we’re confident that we’re altogether (heading) toward a better economic future in the Philippines,” she said.
In order to attract more foreign investments, Trade Secretary Alfredo E. Pascual said the Philippines is looking at entering into more free trade agreements, and plans to sign one with South Korea by November.
He also said the new administration will prioritize the ratification of the Regional Comprehensive Economic Partnership (RCEP). The previous Senate failed to ratify the RCEP due to concerns over the lack of protection for the agriculture industry.
AGREEMENTS Meanwhile, the Philippine government sealed bilateral agreements with Singaporean counterparts covering water services, digital cooperation, personal data protection and air transport, according to the Department of Foreign Affairs (DFA).
The Bases Conversion Development Authority (BCDA) and Enterprise Singapore signed a memorandum of understanding (MOU) “to jointly develop the New Clark City through technology transfer and partnerships in urban and smart city solutions.”
The armed forces of the Philippines and Singapore sealed a deal wherein a Philippine team will be assigned to the Regional Counter-Terrorism Information Facility in Singapore.
The Department of Information and Communications Technology and its Singaporean counterpart inked a MOU on digital cooperation.
The National Privacy Commission and Singapore’s Personal Data Protection Commission also renewed their MOU that would pave the way for more collaboration in the digital economy and data protection.
The Metropolitan Waterworks and Sewerage System renewed the MOU on water collaboration with Singapore’s Public Utilities Board.
“To increase connectivity and create more opportunities for collaboration and growth, the two sides are also working to realize progress on the expansion of the bilateral air transport agreement which will increase connectivity and create more opportunities for collaboration and growth,” the DFA said. — Diego Gabriel C. Robles and Kyle Aristophere T. Atienza
Job seekers fill up documents during a job fair in Manila, June 20. — PHILIPPINE STAR/KRIZ JOHN ROSALES
THE PHILIPPINES is eyeing two loans from the Asian Infrastructure Investment Bank (AIIB) and Asian Development Bank (ADB) worth a combined $800 million next year to fund the government’s post-pandemic business and employment recovery program.
The AIIB and ADB will co-finance the program, which is aimed at sustaining the business and job market recovery from the coronavirus pandemic. Each multilateral lender will provide a $400-million loan to the Philippines.
“The pandemic shock to the Philippines’ economy created a longer-lasting negative impact on private sector employment in the country and has persisted even after the economy has started to recover. Working-age population and elders, especially women, have been the most negatively affected,” the AIIB said.
The annual unemployment rate reached a record-high 10.3% in 2020, reflecting the impact of the strict lockdowns to curb the spread of COVID-19. As the economy continued to reopen, the jobless rate dropped to 6% in June 2022.
The proposed Post-COVID-19 Business and Employment Recovery Program is based on the National Employment Recovery Strategy, which incorporates business, skill development and employment-related reforms.
“The expected outcome will be to enhance the business environment and increase access to formal employment in the private sector. The proposed program will lead to an increase in wage and salary employment in the private sector by an average of 600,000 to 700,000 jobs per year, with the share of such employment in total employment increased to 53% by 2025,” the AIIB said.
The program seeks to liberalize the post pandemic business and investment framework, address “pandemic-induced skills mismatch,” and implement labor market programs.
Vulnerable or informal workers, especially women, are expected to benefit from the training, reskilling, and upskilling programs.
“A jobs transition program tailor-made for the needs of women will be piloted, including skills training, livelihood grants and childcare assistance,” the AIIB said.
It said the estimated date of financing approval is in November, while the loan closing will be in December 2023.
Program loans account for 39.6% of the country’s proposed total gross external borrowings for 2023. The rest is composed of project loans, as well as bonds and other inflows, which account for 12.5% and 47.9%, respectively.
The government will borrow from local and external sources to help fund a budget deficit capped at P1.45 trillion next year, equivalent to 6.1% of gross domestic product. As a lower middle-income economy this year, the country has access to concessional loans of its development partners. — Diego Gabriel C. Robles
