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EU seeks to halve use of pesticides, restore nature with landmark laws

REUTERS

BRUSSELS — The European Commission proposed on Wednesday legally binding targets to halve the use of chemical pesticides and restore nature across the EU, in an attempt to better protect health and restore plunging wildlife populations.

European Union (EU) Environment Policy Chief Virginijus Sinkevicius told Reuters the proposal on repairing habitats would require EU countries to take steps to restore nature to at least 20% of EU land by 2030 and all degraded ecosystems by mid-century.

Under the proposals, the use of chemical pesticides should also be cut by 50% by the end of this decade. They will be banned altogether in sensitive places such as public parks and protected areas.

A senior EU Commission official acknowledged studies showing that a significant drop in use of pesticides could lead to lower yields and higher food prices, but stressed that new techniques were now available which can effectively replace chemical pesticides without reducing agriculture output.

The rules on pesticides, if approved by EU governments, would replace the existing laxer law that the Commission said had been applied inconsistently across the EU.

Under the new regime, governments would have to submit regular reports on their progress towards the targets.

“Nothing can replace ecosystem services that the oceans provide, our soils or our forests,” Mr. Sinkevicius said in an interview about the proposal to restore nature, which would be the EU’s first such law.

The proposed law lays down binding goals to increase farmland bird populations, reverse the decline of pollinators, and restore 25,000 km (15,500 miles) of rivers to flow along their natural courses by 2030.

Countries will have to produce national plans to contribute to the EU-wide aims.

Intensive farming, forestry and urbanization are fueling the degradation of natural habitats. Most of Europe’s protected habitats and species have a negative conservation status, and a third of bee and butterfly species have declining populations.

The proposal on nature, which has been delayed twice, will need approval from the European Parliament and EU countries — some of whom have sought to delay or roll back sustainable farming measures, citing the Ukraine war’s impact on global food supply.

Mr. Sinkevicius said the global food crisis was caused entirely by Russia blocking the export of millions of tons of Ukrainian grain. He warned that failing to stop the degradation of nature would ultimately diminish Europe’s farming abilities.

“If we lose soil fertility, if soil erosion and degradation continue, that is going to be a major impact on our agricultural output,” he said. Soil erosion already costs Europe around €1.2 billion ($1.3 billion) a year in lost agricultural production.

Economic activities like farming would not be banned on land where nature restoration measures are rolled out, under the EU law. — Reuters

Fashion as art, art in fashion

ART is woven into fashion at Voyageur, a fashion collection exhibited at Alabang’s Art Lounge Manila until June 28. Voyageur was made in a collaboration between label Septième Rebelle and Fundacion Sansó.

The collection married the structure of Septième Rebelle with the textile designs of artist and Presidential Medal of Merit awardee Juvenal Sansó. Before making a name as a master painter, Sansó created textile designs for fashion houses: one of the most prominent among this list was Balenciaga in its heyday in the late 1950s to the ’60s. Designing textiles was a way for the artist to support himself after graduating from the École Nationale des Beaux Artes in Paris. These efforts would pay off — he was discovered by premier pre-war couturier Elsa Schiaparelli, who introduced Sansó to Galerie Lucie Weill, which gave him his first solo art exhibition.

This is the second collaboration of Fundacion Sansó with Septième Rebelle, the first one being held last year (Story here: https://www.bworldonline.com/arts-and-leisure/2021/12/13/416877/septieme-rebelle-brings-sansos-textile-prints-to-life/).

Septième Rebelle’s Creative Director, Robbie Santos, made about 70 to 100 rough sketches, and after receiving cues from Fundacion Sansó on which textile designs to use, these designs were printed onto fabric. During a June 15 show, Mr. Santos said about 30% of the clothes came from this archive. “Fundacion Sansó has a supplier that can print on fabrics,” he explained during a group interview backstage.

Voyageur took inspiration from the itch to travel after the pandemic. “It’s all about self-expression. We’ve all felt so stifled. Hindi ka puwedeng mag-travel (you can’t travel),’ said Mr. Santos. He rattled off a list of travel restrictions that were in place up until a few months ago.

“It’s an expression of your freedom,” he said of the resort-themed collection, which takes its bearings from activities one might do on vacation: dance, dine, party, or lounge. These have been polished by mixing in classic silhouettes for both men and women during the show: think softly tailored leisure suits for men in the ’60s; or else asymmetrical gowns from the late ’50s, all of them printed with the abstractions that would become Sansó’s trademark during the height of his own fame.

Mr. Santos reflects on his own similarities with the artist. “He was forced to do things to earn a living na hindi naman niya gusto (that he didn’t like).” The label’s name itself means “seventh rebel” in French, pointing to Mr. Santos’ own status as a seventh child. “For me, I could relate to that… there are some people who do something, but it’s not really their passion.” While receiving an education from Istituto Marangoni-Paris, London College of Fashion, and Central Saint Martins, he said that designing was his second phase in life, having built a former career in the academe.

He discussed the difference of discipline between art and fashion: “In fashion, you have to deal with bodies. You have to measure the body of the model… In art, all you have to do is take a look at the canvas, find out what your inspiration is, maybe you make a few rough sketches, then tira ka na (go ahead),” he said. “In fashion, it’s difficult. The fabric has to conform to the body of the person wearing it. If the process of painting is tedious, it’s because you paint layer upon layer of paint. In fashion, it becomes tedious because you have to do fitting upon fitting.”

While Septième Rebelle certainly makes nice clothes, they aren’t very well-known, and seeing a Septième Rebelle piece in the wild is a bit like spotting a bit of secret code. Mr. Santos said, “I don’t want to be so big that you sacrifice quality. I don’t want to be so famous that you end up being shallow.” —  Joseph L. Garcia

SEC joins global group ANNA to boost local market’s security

THE Securities and Exchange Commission (SEC) said it recently secured membership as a partner in the Association of National Numbering Agencies (ANNA), a global association that seeks to foster standardization within the financial industry.

The agency’s membership in ANNA is expected to help make the Philippine capital market more accessible and transparent, the SEC said in a statement over the weekend.

“Our membership in ANNA as a partner is a significant step toward making the Philippine market more accessible, transparent and, more importantly, secure,” SEC Chairperson Emilio B. Aquino said.

As a partner, the SEC will act as the national numbering agency for the Philippines.

“The commission will be primarily responsible for the allocation of ISIN (International Securities Identification Number), Financial Instrument Short Name (FISN) and Classification of Financial Instruments (CFI) codes to all instruments in the market, including unlisted securities,” the agency said.

It noted that it has already developed a national numbering system that will assign the securities identifiers — ISIN under ISO 6166, CFI under ISO 10962, and FISN under ISO 18774.

“The SEC National Numbering System (NNS) can assign securities identifiers to both corporate securities and securities issued by the government such as those issued by the Bureau of the Treasury and the Bangko Sentral ng Pilipinas.”

According to Mr. Aquino, by adopting standard identifiers, recognized in now more than 120 jurisdictions, securities first issued within the country can be acknowledged and traded between buyers and sellers virtually anywhere in the world.

He added that the commission expects a more robust activity in the domestic capital market. — Arjay L. Balinbin

NorthWind cleared to build power transmission facility

NORTHWIND Power Development Corp. has secured regulatory approval to build a point-to-point energy transmission facility that will connect its 51.9-megawatt (MW) Bangui Bay wind farm to the Luzon grid.

In a decision promulgated last week, the Energy Regulatory Commission (ERC) said it had authorized the company to develop the limited transmission line that will connect its project to the 69-kilovolt (kV) bus at the Laoag substation to the National Grid Corp. of the Philippines (NGCP).

“The dedicated point-to-point limited transmission facilities shall be used solely by Phase I and Phase II, and Phase III of the Bangui Bay Project, respectively,” the ERC said.

However, it said NorthWind is not authorized to own the 52.2-kilometer 69-kV transmission line and the 69-kV bus at the Bangui substation. These facilities must be turned over to state-led National Transmission Corp. and privately owned NGCP.

NorthWind owns and operates the wind project located at Bangui, Ilocos Norte. The wind farm is composed of 26 wind turbines, which were developed in three phases.

The company holds a wind energy service contract with the Department of Energy, granting it the exclusive right to explore, develop and utilize the wind energy resources within its designated contract area.

The first phase of the Bangui Bay project is comprised of 15 Vestas V82 wind turbine generator units, each with a capacity of 1.65 MW. The initial phase has a rated capacity of 24.75 MW.

Construction for the first phase began in May 2004 while commercial operations started in June 2005. It is connected to the Luzon grid via a direct connection to NGCP’s Laoag substation.

The initial phase and its connection facilities, including related auxiliary equipment, were required in NorthWind’s electricity supply agreement with Ilocos Norte Electric Cooperative, Inc. (Inec).

Meanwhile, the project’s second phase comprises five Vestas V82 wind turbine generator units, each with a capacity of 1.65 MW, increasing the wind farm’s capacity to 33 MW.

The project’s third phase involved the construction of six 3.15-MW 3.0 108 DD Siemens wind turbine generators, further increasing the wind farm’s capacity to 51.9 MW. It started commercial operations in October 2014.

Based on NorthWind’s filing with the ERC, sometime in 2007 when its electricity supply agreement with Inec was still in effect, the electric cooperative constructed a 10-megavolt ampere (MVA) substation in Burgos and connected the same to the company’s transmission line.

NorthWind said its transmission line was designed for its exclusive use — to connect its Bangui wind farm to the Luzon grid. It said the cost of the connection facilities is a combination of about $1.76 million for its foreign component and P148.98 million for the local component.

Subsequently, NorthWind and Inec agreed to terminate their supply agreement with the condition, among others, that Inec’s substation in Burgos would continue to be connected to NorthWind’s transmission line.

To date, NorthWind said Inec’s Burgos substation continues to be connected to the company’s transmission line.

The Bangui Bay wind farm is said to be the first wind energy project developed and operated in the Philippines and Southeast Asia. — VVS

Success in weightlifting to continue beyond Tokyo — Puentevella

TOKYO OLYMPIC GOLD MEDALIST HIDILYN DIAZ

SAMAHANG Weightlfiting sa Pilipinas president Monico Puentevella said the country has a strong chance of replicating Hidilyn Diaz’s Tokyo Olympics gold medal feat not just in the 2024 Paris Games, but also in the 2028 Los Angeles edition.

“We’ll get another medal in Paris, could be silver or gold. With enough international exposure and proper training, I can see it coming,” Mr. Puentevella, who was inducted to the International Weightlifting Federation Hall of Fame in Tirana, Albania Saturday, told The STAR yesterday.

“We’re among the best in the world now, our program is bearing fruit,” he added.

Mr. Puentevella sees Ms. Diaz, Asian champion and Southeast Asian Games gold medalist Vanessa Sarno, Elreen Ando and Kristel Macrohon as the country’s top bets in Paris while he has high hopes world junior champion Rose Jean Ramos and his sister Rosegie would qualify in LA.

“I can see the Ramos sisters as making it to Los Angeles 2028,” he said.

Under Mr. Puentevella’s leadership, the country delivered its breakthrough Olympic gold in Ms. Diaz in Tokyo last year.

And thanks to the emergence of Ms. Sarno and the Ramos siblings, the country’s success story will not start in weightlifting will not start and end with Ms. Diaz’ magnificence in Tokyo. — Joey Villar

Britain, Germany push G7 to suspend biofuel mandates

REUTERS

LONDON — Officials from some G7 countries, including Germany and the UK, will push for temporary waivers on biofuels mandates to combat soaring food prices when leaders from the group of wealthy nations meet this week, three people familiar with the matter told Reuters.

The food crisis caused by the war in Ukraine has sparked a food versus biofuel debate, with some policymakers calling for an easing of mandates for blending biofuels into gasoline and diesel to increase the supply of global grain and vegetable oil.

“We’re quite keen to look at the issue of biofuel mandates to ensure that crops are prioritized for food consumption and not necessarily for use in fuels,” a British government official told Reuters.

It’s not clear whether there’s broad-based support to temporarily waive biofuel mandates across the G7 members which include Canada, France, Germany, Italy, Japan, the UK and the world’s largest biofuel producer, the US. Surging oil and gas prices have also increased the demand for energy sourced from crops.

“The issue of biofuel mandates is at a preliminary stage of discussion at the working level,” said a spokesman for Canada’s agriculture ministry.

The group began a three-day meeting in Bavaria, Germany, on Sunday and food security is on the agenda, after the presidency launched a Global Alliance for Food Security in May to tackle hunger. — Reuters

Manila lags in Digital Cities Index

The Philippines’ capital, Manila, placed last in the inaugural 2022 Digital Cities Index (DCI), developed by Economist Impact and supported by NEC. The index assessed the extent and impact of digitization in 30 cities while considering four thematic pillars: digital connectivity, services, culture, and sustainability. Manila scored 39.1 out of 100 in the index, below its Asia-Pacific average score of 59.4 and the global average score of 63.3.

Manila lags in Digital Cities Index

Yields on government debt mixed after BSP decision

YIELDS on government securities (GS) ended mixed after moving sideways last week after the Bangko Sentral ng Pilipinas (BSP) raised borrowing costs by another quarter percentage point, as expected, to contain soaring inflation.

GS yields, which move opposite to prices, at the secondary market edged up by 4.01 basis points (bps) on average week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of June 24 published on the Philippine Dealing System’s website.

Yields ended mixed as rates on the short-dated 91- and 364-day Treasury bills (T-bills) climbed by 5.57 bps and 21.72 bps to 1.6262% and 2.4186%, respectively, while the rate of the 182-day T-bill fell by 0.19 bp to 1.9347%.

Rates on the two-, three-, four-, and seven-year Treasury bonds (T-bonds) also rose by 6.7 bps (to 4.4008%), 2.23 bps (5.1098%), 0.13 bp (5.6767%), and 0.47 bp (6.6664%), respectively.

However, the yield on the five-year T-bond inched down by 0.40 bp to 6.1127%.

At the long end, the rate on the 10-year paper jumped 15.63 bps to 7.1379%, while the 20- and 25-year T-bonds slid by 3.92 bps and 3.85 bps to yield 6.4774% and 6.4589%, respectively.

Meanwhile, total GS volume reached P5.245 billion last Friday, higher than the P4.302 billion seen on June 17.

“GS market did not move much [on Friday] as the move by BSP was communicated before the actual announcement,” a bond trader said in a Viber message.

However, concerns over the weakening peso and the risk of elevated inflation due to higher food and oil prices pushed up the long end of the curve, while the belly of the curve remained fairly flat over the week, another bond trader said.

“Aside from an expected policy rate hike from the BSP, market participants remained on watch over the monetary policy comments from various Federal Reserve officials,” the second bond trader said in an e-mail.

The BSP on Thursday hiked its key rate for the second straight meeting by another 25 bps to 2.5%, as signaled days earlier, to temper rising domestic inflation.

The rates on the overnight deposit and lending facilities were also raised by 25 bps to 2% and 3%, accordingly.

At last week’s meeting, the central bank upwardly revised its inflation forecast this year to 5% from 4.6% previously, well beyond the 2-4% target. It also raised its inflation forecast for 2023 to 4.2% from 3.9%. For 2024, inflation is seen to return within the target band and reach 3.3%.

With the market hoping for a 50-bp increase from the BSP as inflation risks mount, the local currency dropped to its lowest in nearly 17 years on Friday, closing at P54.985 against the dollar, data from the Bankers Association of the Philippines showed. It was the peso’s weakest showing since it closed at P55.08 on Oct. 27, 2005. 

Meanwhile, a week after hiking rates by 75 bps, which was the biggest increase since 1994, Fed Chair Jerome H. Powell told a US Congress hearing on Thursday that the US central bank is committed to bringing down inflation despite risks of a downturn, but said it is not trying to engineer a recession.

For this week, local GS yields might move sideways with an upward bias as the market expects more rate hikes from the BSP and the Fed, the second bond trader said.

“The possible uptick in the Fed’s preferred inflation in May 2022 may further fuel hawkish policy views and raise concerns over a global slowdown due to rising interest rates,” the second trader said.

The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose by 6.3% annually in April after jumping by 6.6% in March.

Excluding the volatile food and energy components, the PCE price index increased 4.9% year on year in April after rising 5.2% in March.

Meanwhile, the first trader expects GS yields to continue moving with an upward bias this week ahead of the reissuance of seven-year papers on Tuesday and the release of the Treasury’s July domestic borrowing program.

On Tuesday, the Bureau of the Treasury will offer P35 billion in reissued seven-year debt with a remaining life of six years and 10 months. — Ana Olivia A. Tirona

Michelin x Bamford chrono features repurposed tire rubber

PHOTO FROM MICHELIN

ONLY 133 examples of the Michelin x Bamford B347 Pilot Sport chronograph will be made. This number is significant for the France-headquartered tiremaker as it was founded in 1889 — 133 years ago. Featuring a strap made from recycled Michelin Pilot Sport 5 test tires, the watch is said to “perfectly fuse the two brands and takes its collaboration to the next level.”

Bamford London had launched the Swiss-made Bamford B347 model last year. Now, the Michelin x Bamford B347 Pilot Sport employs new materials and design choices.

“What started out as a light-bulb moment, (as I) stood next to a lineup of Porsches at a car event with a friend who works at Michelin, has developed into this stunning display of two pioneering brands. The racing-inspired design, lightweight carbon body, integrating the recycled tire rubber and marking this by adding the tread pattern from their latest tire — it all works,” said Bamford London Founder George Bamford.

The timepiece is an automatic monopusher chronograph with a 41.5-mm black cutting-edge forged carbon case housing a Sellita SW510 automatic movement. The single push-button at two o’clock provides the start-stop-reset function. The racing-inspired tachymeter sports a checkered pattern representing a start/finish flag. The signature Michelin yellow is present on the seconds and sub-dial hands.

The black dial bears white accents as well as luminous hour and minute hands. The white sub-dials are a nod to Michelin’s latest brand campaign showing tires on vehicles as white, cartoon-style circles. It must be recalled that tires used to be white. The Michelin yellow is also featured as a unique colored fleck on the strap. The material is from Michelin’s research and development campus, Ladoux, based in Clermont-Ferrand, France. The strap features a real tread pattern, taken from the Pilot Sport 5 — specifically, a 225/40 ZR18 (92Y) tire. This size would be used on cars like the retro BMW E36 and E46 M3, and the British-built Lotus Evora and 3-Eleven Models, plus the Morgan Aero 8, and various iterations of the Volkswagen Golf GTI hot hatch.

Partnering with Bamford London and Michelin to create the unique watch strap, Greenology, a specialist in full circle, sustainable solutions for end-of-life tires, used the recycled tires sourced from Michelin’s research and development campus. Said Greenology Director Laura Hepburn, “It has been a privilege to work in collaboration with Michelin and Bamford, who are fellow innovative forward-thinking companies, to responsibly deal with tires in a whole new way. This collaboration is an excellent example of working together to help create a transition to net zero and a greener, cleaner tire industry.”

Adding to the special elements of this timepiece, the caseback and custom box feature a heritage “race winner” Bibendum (or the Michelin Man) which is usually reserved for Michelin’s own use. The watch costs £2,500, available from Bamford London (www.bamfordlondon.com).

Shop and fly and vice versa

THE SM Advantage Card (SMAC) program and Philippine Airlines’ (PAL) Mabuhay Miles loyalty program will give frequent flyers and shoppers a new deal.

Under the “Shop to Fly,  Fly to Shop” program, launched at the Conrad hotel earlier this month, PAL’s frequent flyers can convert their Mabuhay Miles to SMAC points and SM loyal shoppers can convert their SMAC points to Mabuhay Miles.

Every 500 Mabuhay Miles Points can be converted to 50 SMAC Points, while every 250 SMAC points can be converted to 100 Mabuhay Miles Points.

SMAC points are currently earned and rewarded at the following stores: The SM Store, SM Supermarket, Hypermarket, and Savemore, and other retail brands like Waltermart, Alfamart, The Body Shop, Uniqlo, Levi’s, SM Appliance, Our Home, Crate and Barrel, Surplus Shop, Toy Kingdom, among others.

One can convert Mabuhay Miles to SMAC points by calling Mabuhay Miles hotline numbers (available at their website www.mabuhaymiles.com). As for SMAC members, they can convert their SM points to miles via the SMAC website (smac.ph). To be able to convert SMAC Points to Mabuhay Miles, one needs to be registered via smac.ph or the SMAC app.

As a SMAC member with an unexpired account, one must have at least 250 SMAC points. As a Mabuhay Miles member with an unexpired account, one must have at least 500 miles in their account.

During the launch, the COO of Digital Advantage Corp. (which handles the SMAC program), Kevin Hartigan-Go pointed out that the SMAC program, while recently renamed from SM Advantage to the much shorter acronym, has been in operation for about 20 years. On the other hand, he said that the Mabuhay Miles program is one of the oldest in the country, racking in points for almost 40 years. “PAL shares exactly the same values as we do: service excellence, and a focus on recognizing and rewarding its most valuable customers.”

Meanwhile, PAL President and Chief Operating Officer Stanley Ng said in a speech, “We thank SM Advantage and the SM Group for collaborating with us and combining our strengths to bring greater value to the travelers and the people of the Philippines we serve.” — JLG

PSEi to rise on bargain hunting, window dressing

BW FILE PHOTO

PHILIPPINE STOCKS may rise on bargain hunting in the coming days after three weeks of decline as well as month-end window dressing, but sentiment is expected to remain week due to lingering economic concerns here and abroad.

The bellwether Philippine Stock Exchange index (PSEi) climbed 152.33 points or 2.51% to end at 6,217.56 on Friday, while the broader all shares index improved by 52.90 points or 1.61% to finish at 3,337.63.

Week on week, the main index dropped by 1.8% or 114 points from its close of 6,331.56 on June 17.

Online brokerage 2TradeAsia.com said in a market note that the market continued to decline following the Bangko Sentral ng Pilipinas’ (BSP) decision to raise its benchmark interest rates for the second consecutive meeting amid rising inflation.

“As the macro environment remains volatile, note that the allure of cash flow-secure/high dividend yielding securities are warranted as the market contends with fixed assets that reprice at higher rates. Brace for quarter-end window dressing activity from funds,” 2TradeAsia.com said.

“With already three straight weeks of decline, episodes of bargain hunting may be experienced in [this] week’s trading. Still, bearish sentiment is expected to remain weighing on the overall market amid lingering downside risks,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “This includes the weakened peso, which is already nearing the P55 per US dollar level, mounting upside risks to inflation, and the possibility of a global economic slowdown amid the recession risk in the United States, and the ongoing Russia-Ukraine war.”

Mr. Tantiango said the market will also monitor the latest purchasing managers’ index data for clues about the local economy.

The BSP on Thursday raised benchmark interest rates by 25 basis points (bps) for a second straight meeting to cool rising prices and continued to signal gradual normalization, even as it said it is prepared “to take all necessary policy action” to bring inflation within its target over the medium term.

The BSP raised its average inflation forecast for this year to 5% from 4.6% previously, well above its 2-4% target.

With the market hoping for a 50-bp increase from the BSP as inflation risks mount, the local currency dropped to its lowest in nearly 17 years on Friday, closing at P54.985 against the dollar, data from the Bankers Association of the Philippines showed. It was the peso’s weakest finish since it closed at P55.08 on Oct. 27, 2005.

“The market’s immediate support is seen at the 6,100-6,150 range. Immediate resistance is seen at the market’s 10-day exponential moving average, at 6,308.05 as of June 24,” Mr. Tantiangco said.

Meanwhile, 2TradeAsia.com put the PSEi’s immediate support ay 6,000, while resistance is at 6,300-6,400 and Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed immediate support at the 6,000 mark and the next resistance at the 6,500 level. — R.M.D. Ochave

Peso may depreciate further on US recession fears due to hawkish Fed

BW FILE PHOTO

THE PESO may continue to depreciate against the dollar this week on fears of a recession in the United States after the US Federal Reserve chief said they are committed to bringing inflation within target.

The local unit closed at P54.985 on Friday, weakening by 28.5 centavos from its P54.70 finish on Thursday, data from the Bankers Association of the Philippines showed. This was the peso’s weakest finish in over 16 years or since it closed at P55.08 on Oct. 27, 2005.

The peso also sank by P1.235 from its P53.75-per-dollar close a week ago.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the peso’s decline to the Bangko Sentral ng Pilipinas’ (BSP) dovish stance despite the expectations of more aggressive rate hikes from the Fed in the coming months.

The Fed’s hawkishness caused the peso to sink further on Friday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

A week after hiking rates by 75 basis points (bps), which was the biggest increase since 1994, Fed Chair Jerome H. Powell told a US Congress hearing on Thursday that the US central bank is committed to bringing down inflation despite risks of a downturn, but said it is not trying to engineer a recession. Markets are pricing in another 75-bp hike at the Fed’s July meeting as several Fed officials have said they would support more aggressive hikes as inflation remains high.

Even with the Fed being increasingly hawkish, the BSP last week raised benchmark interest rates by just 25 bps for a second straight meeting to cool rising prices and continued to signal gradual normalization, even as it said it is prepared “to take all necessary policy action” to bring inflation within its target over the medium term.

The BSP raised its average inflation forecast for this year to 5% from 4.6% previously, well above its 2-4% target. For 2023, the BSP now sees inflation averaging 4.2% from 3.9% previously and then slow to 3.3%, back within target, in 2024

Inflation rose to 5.4% in May, the highest in three and a half years, amid the continued rise in food and fuel prices.

For this week, Mr. Asuncion said the peso may continue to weaken versus the greenback along with other emerging market currencies due to the risk of a US recession amid the Fed’s aggressive tightening.

He added that expectations of gradual rate increases from the BSP would give little support for the peso as the dollar will be more attractive.

“The situation in the financial markets would remain similar for as long as the Russia-Ukraine conflict drags on, in terms of relatively elevated global commodity prices and inflation,” Mr. Ricafort added.

He said the peso’s recent decline also makes up for the interest rate differential between the US and the Philippines.

For this week, Mr. Asuncion gave a forecast range of P54.50 to P55 per dollar, while Mr. Ricafort expects the peso to move within the P54.70 to P55.10 levels. — K.B. Ta-asan