Sanofi breaks ground on its evolutive vaccine facility in Singapore

April 20, 2022 | 2:50 pm

Pharmaceutical firm Sanofi broke ground on its evolutive vaccine facility (EVF) in Singapore on April 20. Aimed to be fully operational by 2025, the EVF is a digitalized, modular facility designed to manufacture multiple vaccines — including mRNA, enzymes, and monoclonal bodies.

As the term “evolutive” suggests, the EVF can respond quickly to future pandemic risks and with the capacity to produce at a massive scale, according to Heng Swee Keat, deputy prime minister of Singapore and coordinating minister for Economic Policies, at the ground-breaking ceremony.

“COVID-19 has reinforced the importance of pandemic preparedness and supply chain resilience. We must not take our foot off the pedal when the pandemic fades. Disease X will not be a matter of if, but when,” he said.

Added Mr. Heng, “By enhancing our capacity for manufacturing vaccines in Singapore, the region will be in a stronger position for dealing with future pandemics and the ensuing economic shocks.”

Singapore’s EVF has features such as a leak detection system, plus digital twins for each of its platforms for problem simulation and risk reduction. It is designed around a central unit comprised of several modules which can produce up to four vaccines simultaneously — regardless of the vaccine technology used (protein, mRNA, etc.).

Current industrial sites are able to produce one vaccine at a time.

The new bioproduction facility will furthermore reduce both resource consumption and waste production with the use of solar panels and green electricity purchase, minimizing its environmental impact.

INVESTMENTS FOR INNOVATION
On the same day as the groundbreaking, Sanofi also announced its investment of €900 million over five years to create two EVFs – one in Singapore, and another in France. These EVFs pave the way for future vaccine innovation worldwide.

Sanofi chose Singapore because of its top-class environment for science and innovation, as well as its ecosystem that gathers universities, startups, and corporates, said Marc Abensour, French ambassador to Singapore.

“The significant investment of Sanofi… signifies a high level of trust in our bilateral partnership, of which innovation is one of the strongest pillars,” he told the participants of the ceremony.

Per Mr. Heng, Singapore is committed to investing about 1% of its GDP (gross domestic product) in research, innovation, and enterprise. Part of the local government’s efforts in this regard includes talent development programs in biopharma manufacturing.

“To support innovation and leading-edge production, human capital is critical. This new facility will create 200 good jobs and we need to ensure that our people have the skills to take on these opportunities,” he said. — Patricia Mirasol

IMF economist sees risks that inflation expectations climb upward

April 20, 2022 | 1:52 pm

WASHINGTON – The International Monetary Fund’s new chief economist said on Tuesday he is concerned about increasing signals that inflation expectations are on the rise and may become entrenched at elevated levels, prompting more aggressive monetary policy tightening in advanced economies.

Pierre-Olivier Gourinchas, who started transitioning to the IMF‘s economic counselor role in January, told Reuters in an interview that the war in Ukraine, which has caused sharp energy and food price increases, may damage expectations for decades-high inflation to start to subside this year.

A “very, very tight labor market” in the United States is increasing demands for wage increases to “catch up” with higher prices that could help fuel expectations among consumers and businesses that prices will keep rising, the French-born former University of California-Berkeley economist said.

“So there is definitely a risk that we could have a wage-price spiral,” Gourinchas said. “And there’s a risk also that as we live through a period of elevated inflation, and we hear that it goes from five to six to seven to eight (percent) – and we don’t see it turning around – people will start reassessing what they think inflation will be in the future and businesses will also do the same thing.”

That would be bad news for the Federal Reserve and other developed-world central banks, which have argued that inflation expectations among consumers and businesses have remained reasonably anchored at levels well below the current high readings of measured inflation.

Some Fed officials have begun to fret publicly that they may have a limited window now to ensure that that remains the case and an aggressive run of rate hikes this year is needed to pull that off. Read full story

Market signals from elevated Treasury yields have been ahead of consensus private forecasts for inflation, but both are pointing higher than the 2% inflation targets of many central banks, and forecasts have been “sort of moving up,” Gourinchas said.

“And that’s really, you know, the red alarm signal on the dashboard here,” he said. “If you see that and you’re a central banker, you don’t have a choice. You have to step in more forcefully to make sure people really anticipate that inflation will remain stable, even if it’s elevated right now.”

WAGE PRESSURES

The duration of elevated inflation readings is a downside risk for the United States and some other advanced economies.

“If inflation remains elevated for more than just a couple more months, if it keeps drifting upwards, we see these wage pressures building, we see these inflation expectations drifting more permanently and in particular the consensus forecast, then I think we would see a much more aggressive tightening of monetary policy going forward.”

Earlier on Tuesday, the IMF revised down its global economic growth outlook by nearly a percentage point from January due to shocks from Russia’s war in Ukraine, with significant downside risks from tighter sanctions. It called inflation “a clear and present danger” for many countries. Read full story

Gourinchas said the Fund’s baseline forecast anticipated that inflation will peak in the current quarter and start to decline as pandemic-driven supply chain bottlenecks ease and the withdrawal of pandemic fiscal support helps cool demand.

But while a faster tightening of U.S. monetary policy would slow U.S. growth further, it would be unlikely to cause a recession, based on the current baseline of still-robust 3.7% U.S. growth for 2022, Gourinchas said.

Steeper rate hikes, energy sanctions on Russia that spike prices further or a big drop in asset prices that stokes volatility could “bring us closer” to recession, he said.

“How close we could be, that’s not something we can assess precisely at this point. Our baseline is basically the U.S. economy is still going to be growing in 2022 and 2023,” Gourinchas said.

On China, he said recent data showed that its slowdown caused by renewed COVID-19 lockdowns may be a steeper than in the IMF‘s baseline, but the Chinese government had room for more monetary and fiscal stimulus actions to counteract these trends. – Reuters

U.S. concerned after China says it signs security pact with Solomon Islands

April 20, 2022 | 1:50 pm

SYDNEY/BEIJING – China said on Tuesday it had signed a security pact with the Solomon Islands, a move set to heighten concerns of the United States and allies Australia and New Zealand about growing Chinese influence in a region traditionally under their sway.

However, Solomon Islands officials earlier appeared to suggest no agreement had yet been signed.

Douglas Ete, chairman of Parliament’s public accounts committee, told fellow lawmakers that Chinese officials would arrive in mid-May to sign cooperation pacts. Prime Minister Manasseh Sogavare told Parliament that a proposed security agreement would not include a Chinese military base.

Ete said the agreements would increase cooperation on trade, education and fisheries, but that he opposed the idea of allowing China to establish a military base.

In Washington, the White House, which is sending a high-level U.S. delegation to the Solomons’ capital, Honiara, this week, said it was concerned about “the lack of transparency and unspecified nature” of the pact. Read full story

Australian officials said China appeared to want to pre-empt the arrival of the U.S. delegation in Honiara, which the White House said would discuss concerns about China, as well as the reopening of a U.S. embassy. Read full story

Chinese foreign ministry spokesperson Wang Wenbin said the framework pact had been signed recently by State Councilor Wang Yi and Solomon Islands Foreign Minister Jeremiah Manele. He did not detail where or when the signing took place.

A spokesperson for the White House National Security Council (NSC) said the reported signing “follows a pattern of China offering shadowy, vague deals with little regional consultation in fishing, resource management, development assistance and now security practices.”

The NSC later said the United States would “intensify its engagement in the region to meet 21st-century challenges, from maritime security and economic development to the climate crisis and COVID-19.”

AUSTRALIAN CONCERNS

Canberra is concerned that the pact could be a step towards a Chinese military presence less than 2,000 km (1,200 miles) from Australia’s shores.

Foreign Minister Marise Payne said Australia was “deeply disappointed” and continued to seek details of the terms of the agreement, noting that the signing had been announced by China.

She also expressed concern about a lack of transparency and said the pact had the “potential to undermine stability in our region.”

Australian national broadcaster ABC said Sogavare planned to make an announcement in coming days.

Solomon Islands officials had previously initialed a security pact with the Chinese Embassy that would allow Chinese police to protect infrastructure and social order, but ministers had not yet signed it.

Last week, Zed Seselja, Australia’s minister for international development and the Pacific, visited Honiara to ask Sogavare not to sign. Read full story

Greg Poling, an Asia maritime security expert at Washington’s Center for Strategic and International Studies, said it was still not clear whether an agreement had been finalized.

“So the U.S. delegation, as with the recent Australian delegation that visited, are trying to convince the Solomons’ government to reverse course if possible, or at least to clarify the details and plans for implementation if not,” he said.

“The language leaked last week is quite vague and so there’s plenty of room to mitigate damage by narrowing how it will be implemented.”

A leaked memo surfaced on social media last week showing that Beijing had told the Solomon Islands in December it wanted to send a team of 10 Chinese police with weapons including a sniper rifle and machine guns as well as listening devices to protect embassy staff in the wake of riots in Honiara. Read full story

A separate leaked draft of a security pact included provisions for Chinese police to protect companies and infrastructure, and for Chinese naval vessels to replenish in Honiara.

Chinese spokesperson Wang dismissed the planned U.S. visit.

“Deliberate attempts to inflate tensions and mobilize rival camps are also doomed to fail,” he said. – Reuters

New surrender deadline in Mariupol as West promises Ukraine more arms

April 20, 2022 | 1:47 pm

Ukraine-Russia-flag-toy soldiers — Army soldier figurines are displayed in front of the Ukrainian and Russian flag colors background in this illustration taken, Feb. 13, 2022. — REUTERS/DADO RUVIC/ILLUSTRATION

KYIV/KHARKIV – Russia gave Ukrainian fighters still holding out in Mariupol a fresh ultimatum to surrender on Wednesday as it pushed for a decisive victory in its new eastern offensive, while Western governments pledged more military help to Kyiv.

Thousands of Russian troops backed by artillery and rocket barrages were advancing in what Ukrainian officials have called the Battle of the Donbas.

Russia’s nearly eight-week-long invasion has failed to capture any of Ukraine‘s largest cities, forcing Moscow to refocus in and around separatist regions.

The biggest attack on a European state since 1945 has, however, seen nearly 5 million people flee abroad and reduced cities to rubble.

Russia was hitting the Azovstal steel plant, the main remaining stronghold in Mariupol, with bunker-buster bombs, a Ukrainian presidential adviser said late on Tuesday. Reuters could not verify the details.

“The world watches the murder of children online and remains silent,” adviser Mykhailo Podolyak wrote on Twitter.

After an earlier ultimatum to surrender lapsed and as midnight approached, Russia’s defence ministry said not a single Ukrainian soldier had laid down their weapons and it renewed the proposal. Ukrainian commanders have vowed not to surrender.

“Russia’s armed forces, based purely on humanitarian principles, again propose that the fighters of nationalist battalions and foreign mercenaries cease their military operations from 1400 Moscow time on 20th April and lay down arms,” the Russian Defence Ministry said.

The United States, Canada and Britain said they would send more artillery weaponry, and the White House said new sanctions were being prepared.

U.S. President Joe Biden is expected to announce a new military aid package about the same size as last week’s $800 million one in the coming days, sources told Reuters.

U.N. Secretary-General Antonio Guterres called for a four-day humanitarian pause in the fighting this coming weekend, when Orthodox Christians celebrate Easter, to allow civilians to escape and humanitarian aid to be delivered.

Russia’s war in Ukraine is to blame for exacerbating “already dire” world food insecurity, with price and supply shocks adding to global inflationary pressures, U.S. Treasury Secretary Janet Yellen said. Read full story

CITY CAPTURED

Russia says it launched what it calls a “special military operation” on Feb. 24 to demilitarise and “denazify” Ukraine. Kyiv and its Western allies reject that as a false pretext.

Ukraine said the new assault had resulted in the capture of Kreminna, an administrative centre of 18,000 people in Luhansk, one of the two Donbas provinces.

Russian Foreign Minister Sergei Lavrov confirmed that “another stage of this operation is beginning”.

Driven back by Ukrainian forces in March from an assault on Kyiv in the north, Russia has instead poured troops into the east for the Donbas offensive.

It has also made long-distance strikes at other targets including the capital and the northeastern city of Kharkiv, where at least four people were killed by missiles, authorities said on Tuesday.

In one suburban street, the body of an elderly man lay face down near a park, a thick ribbon of blood running into the gutter.

“He worked in security not far from here,” a resident named Maksym told Reuters. “The shelling began and everyone fled. Then we came out here, the old guy was already dead.”

MARIUPOL

In Mariupol, scene of the war’s heaviest fighting and worst humanitarian catastrophe, about 120 civilians living next to the Azovstal steel plant left via humanitarian corridors, the Interfax news agency said on Tuesday, quoting Russian state TV.

A drone footage captured on Tuesday shows people buying food and other necessities at a makeshift market, as well as charging their mobile phones from a generator for about $1.35.

A Reuters correspondent said prices at the market were extremely high versus what people would normally pay there.

Mariupol has been besieged since the war’s early days. Tens of thousands of residents have been trapped and Ukraine believes more than 20,000 civilians have died there.

“The Russian army will forever inscribe itself in world history as perhaps the most barbaric and inhuman army in the world,” Ukrainian President Volodymyr Zelenskiy said.

“Deliberately killing civilians, destroying residential quarters and civilian infrastructure, and using all kinds of weapons, including those prohibited by international conventions, is already the brand signature of the Russian army,” he added in a video address.

Russia has denied using banned weapons or targeting civilians in its invasion of Ukraine and says, without evidence, that signs of atrocities were staged.

Video released by Ukraine‘s Azov battalion purported to show people living in the underground network beneath the sprawling steel plant, where they say hundreds of women, children and elderly civilians are sheltering with diminishing supplies.

“We lost our home; we lost our livelihood. We want to live a normal, peaceful life. We want to get out of here,” an unidentified woman says in the video.

“There are lots of children in here – they’re hungry. Get us out of here, we beg you. We’ve already cried out all the tears we have. We can’t cry anymore,” she added.

Reuters could not independently verify where or when the video was shot. – Reuters

Biden administration will appeal lifting of mask mandate, if CDC agrees

April 20, 2022 | 1:45 pm

WASHINGTON – U.S. President Joe Biden‘s administration said on Tuesday it would appeal a judge’s ruling ending a mask mandate on airplanes if public health officials deem it necessary to stem the spread of COVID-19.

The Centers for Disease Control and Prevention, to whom the administration was deferring, said that it would continue to study whether the mandates were still needed. The mandates apply to planes, trains and other public transportation and, prior to Monday’s ruling, had been due to expire on May 3.

“We will continue to assess the need for a mask requirement in those settings, based on several factors, including the U.S. COVID-19 community levels, risk of circulating and novel variants, and trends in cases and disease severity,” a CDC spokesperson said in a statement on Tuesday.

The Justice Department said it would appeal Monday’s ruling by U.S. District Judge Kathryn Kimball Mizelle that the 14-month-old directive was unlawful, if the CDC determined the mandate was needed to protect public health.

The ruling overturned a key presidential effort to reduce the spread of COVID-19.

“If CDC concludes that a mandatory order remains necessary for the public’s health after that assessment, the Department of Justice will appeal the district court’s decision,” the Justice Department said in a statement.

The CDC reiterated that it recommends that people wear masks on public transportation while indoors.

That came hours after Biden, on a trip to New Hampshire, answered a question about whether people should continue to wear masks on planes, by saying, “It’s up to them.”

Monday’s court decision, made in response to a lawsuit filed last year in Tampa, Florida, means the CDC‘s public transportation masking order is no longer in effect, a U.S. official said.

It comes as COVID-19 infections are rising in the United States, and more than 400 people are dying daily from the airborne disease, based on the latest seven-day average.

The ruling followed a string of judgments against Biden administration directives to fight the infectious disease that has killed nearly 1 million Americans, including vaccination or COVID testing mandates for employers.

“Public health decisions shouldn’t be made by the courts. They should be made by public health experts,” White House spokesperson Jen Psaki said. – Reuters

Petron Corporation announces schedule of annual meeting of stockholders

April 20, 2022 | 9:53 am

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.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

Robinsons Retail Holdings, Inc. to hold annual meeting of stockholders on May 13

April 20, 2022 | 9:00 am

NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS

MAY 13, 2022

Notice is hereby given that the Annual Meeting of the Shareholders of ROBINSONS RETAIL HOLDINGS, INC. (Annual Meeting) shall be held via remote communication at https://bit.ly/RRHI2022ASM on May 13, 2022 at 9:30 A.M.

www.altuspropertyventures.com.ph/DIS2022

The Agenda for the Annual Meeting is as follows:

Call to Order and Certification of Notice and Quorum
Approval of the Minutes of the Annual Meeting of the Shareholders held on May 14, 2021
Presentation of the Annual Report and Approval of the Audited Financial Statements for the year ended December 31, 2021
Election of the Board of Directors
Appointment of the External Auditor
Ratification of the acts of the Board of Directors and its committees, officers and management
Other Matters
Adjournment

Record Date Only shareholders of record as of April 5, 2022 are entitled to notice of, and to vote at, the Annual Meeting.

Attendance and Registration Shareholders may only attend the meeting via remote communication. Shareholders who intend to participate in the Annual Meeting should register by sending an email at corpsec@robinsonsretail.com.ph no later than May 5, 2022 in order to be considered as present.

Quorum For purposes of quorum, the following shareholders shall be deemed present: (1) shareholders who register by May 5, 2022; (2) shareholders who register and vote in absentia by May 5, 2022; and (3) shareholders who submit duly accomplished proxy forms.

Voting Shareholders may vote through the following: (1) by digital ballot, (2) by voting in absentia or (3) by appointing the Chairman of the Annual Meeting as their proxy. To vote by digital ballot and vote in absentia, please register by sending an email and submitting the required documents at corpsec@robinsonsretail.com.ph no later than May 5, 2022. Once the registration is validated, a digital ballot shall be generated for the shareholder who may then proceed to fill out the ballot. To vote by proxy, please submit a duly accomplished proxy form on or before May 5, 2022 either by email to corpsec@robinsonsretail.com.ph or a hard copy to the Office of the Corporate Secretary, 4^th Floor, Building A, Robinsons Retail Head Office, 110 E. Rodriguez Jr., Avenue, Libis, Quezon City. We are not soliciting proxies.

The procedure for attending the meeting via remote communication, registration, voting by digital ballot, voting in absentia and voting by proxy are explained in the Information Statement.

Visual and Audio Recording In accordance with SEC guidelines, please be informed that there will be a visual and audio recording of the Annual Meeting.

Electronic Copies An electronic copy of the Information Statement, Management Report, SEC Form 17-A and other related documents are available at https://www.robinsonsretailholdings.com.ph/investor-relations/2022 under the Annual Reports>Annual Report Documents>2022 tab and at PSE Edge.

(signed)

Atty. Rosalinda F. Rivera

Corporate Secretary

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.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

GT Capital Holdings, Inc. to conduct annual stockholders’ meeting virtually on May 11

April 20, 2022 | 8:00 am

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.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

IMF sees faster PHL growth this year

April 20, 2022 | 12:34 am

binondo-intramuros-bridge — PEOPLE stop to take photos along the new Binondo-Intramuros bridge in Manila, April 9. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

THE International Monetary Fund (IMF) expects a faster expansion for the Philippine economy this year, but still below the government’s growth target as the ongoing war in Ukraine clouds the global economic outlook.

In its latest World Economic Outlook (WEO) released on Tuesday, the IMF raised its 2022 growth projection for the Philippines to 6.5% from 6.3% previously. This is lower than the government’s 7-9% target for this year.

“The recovery is expected to further strengthen in 2022 due to a weaker-than-expected impact of the Omicron wave, which allowed most areas including Metro Manila to be moved to the least restrictive alert level,” Cheng Hoon Lim, IMF mission chief for Philippines, said in an email.

However, Ms. Lim said growth outlook remains clouded by uncertainties caused by the war in Ukraine which could hamper global supply and can lead to tighter global financial conditions.

“Greater than anticipated increases in US interest rates and slower global growth could further weigh on the recovery,” Ms. Lim said.

“There are also risk factors on the domestic front, including delays in the vaccination program and challenges from climate change and natural disasters,” she added.

The Health department said that 66.85 million people in the Philippines had been fully vaccinated against the coronavirus as of April 17, while only 12.64 million people have received booster shots.

The IMF’s growth projection for the Philippines is the fastest among five Association of Southeast Asian Nations (ASEAN) member countries, followed by Vietnam (6%), Malaysia (5.6%), Indonesia (5.4%), and Thailand (3.3%).

The ASEAN-5 is estimated to expand by 5.3% this year, and by 5.9% in 2023. This is higher than the 3.4% growth in 2021.

For 2023, the IMF expects the Philippine economic growth to slow to 6.3%. In January, IMF Representative to the Philippines Ragnar Gudmundsson has said they expect growth to “pick up close to 7%.”“The revision mainly reflects the base effect from higher growth rate in 2022 and the spillovers from intensified global uncertainties,” Ms. Lim said.The Philippine economy grew by 5.7% last year, a turnaround from the record 9.6% contraction in 2020.

With many economies yet to fully recover from the pandemic, the IMF said the Russia-Ukraine war will severely set back global recovery, slow growth, and drive inflation faster.

The IMF slashed its global growth forecast for 2022 and 2023 to 3.6%, 0.8 and 0.2 percentage points lower, respectively, than its January projection. If realized, this will be slower than the 6.1% estimated global expansion in 2021.

“The economic effects of the war are spreading far and wide — like seismic waves that emanate from the epicenter of an earthquake — mainly through commodity markets, trade and financial linkages,” the multilateral lender said.

The IMF said unusually high uncertainty clouds this global outlook, citing downside risks such as a worsening war, more sanctions on Russia, sharper-than-anticipated slowdown in China, and a renewed surge in coronavirus disease 2019 (COVID-19) infections.

Elevated inflation is now expected to persist for longer than the previous forecast due to the war and broadening price pressures, it added.

For 2022, inflation is projected at 5.7% in advanced economies and 8.7% in emerging market and developing economies, much higher than the estimates in January.

“The conflict is likely to have a protracted impact on commodity prices, affecting oil and gas prices more severely in 2022 and food prices well into 2023 (because of the lagged impact from the harvest in 2022),” it added.

The IMF expects Philippine headline inflation this year to reach 4.3%, which is already above the central bank’s 2-4% target range. By 2023, inflation is seen slowing to 3.7%.

Inflation in March quickened to 4% from 3% in February, reflecting the impact of the oil price spike due to the war.

“In other countries, the prominence of fuel- and war-affected commodities in local consumption baskets could lead to broader and more persistent price pressures,” the IMF said.

While inflation drivers like supply constraints and the war are beyond the control of central banks, the IMF said central banks need to adjust their monetary stances “even more aggressively” in case inflation expectations become de-anchored.

“As advanced economy central banks tighten policy and interest rates rise in those countries, emerging market and developing economies could face a further withdrawal of capital and currency depreciations that increase inflation pressures,” it said.

The Bangko Sentral ng Pilipinas (BSP) said it is ready to act preemptively to tame inflation risks, although it maintained it is keen on raising interest rates only by the second half of the year to support recovery.

“The BSP should stand ready to adjust the policy stance with a view to remaining ahead of the curve and maintaining stability in anticipation of Fed tightening, especially if the second-round effects of inflation risk de-anchoring inflation expectations,” Ms. Lim said.

In Asia, the IMF said developments in China will weigh on the region’s outlook. Recent COVID-19 lockdowns in key manufacturing and trading hubs in China could worsen supply disruptions.

With the ongoing war, supply shortages for some sectors may likely be prolonged until 2023, it said. — Luz Wendy T. Noble

R&I keeps Philippines’ investment grade rating

April 20, 2022 | 12:33 am

Divisoria-public-market-crowd — SHOPPERS are seen in Divisoria, Manila. — PHILIPPINE STAR/ RUSSELL PALMA

JAPAN-BASED Rating and Investment Information, Inc. (R&I) maintained the Philippines’ credit rating at BBB+ with a stable outlook as the economy continues to recover from the pandemic.

However, the debt watcher warned that soaring crude oil prices will continue driving inflation higher.

“The Philippine economy has been demonstrating solid growth since the second quarter of 2021 despite the new wave of coronavirus disease 2019 (COVID-19) infections,” R&I said in a statement on Monday.

The ratings agency last affirmed the Philippine sovereign rating in April 2021.

The Philippine economy grew by 5.7% in 2021, a turnaround from the record 9.6% contraction in 2020. This year, economic managers are aiming for a 7-9% growth.

“A surge in crude oil prices is anticipated to push inflation up, which is considered a short-term risk factor. Policy measures of the central bank of the Philippines (Bangko Sentral ng Pilipinas) toward the second half of the year will draw attention,” R&I added.

The BSP raised its inflation forecast for the year to 4.3%, citing the impact of the war on oil and commodity prices. Headline inflation in March already quickened to 4%, which matches the upper end of the BSP’s 2-4% target range this year.

The central bank has signaled it will assess the need for a rate hike by the second half of the year when the economy is expected to return to its pre-pandemic level.

“The government debt ratio is expected to stabilize in the near-term in tandem with the country’s economic recovery,” R&I said.

The country’s debt-to-GDP ratio hit a 16-year high of 60.5% last year. This is slightly above the 60% threshold considered manageable by multilateral lenders for developing economies.

Meanwhile, external debt-to-GDP slipped to 27% in 2021 from 27.2% in the prior year.

The ratings agency expects the current account deficit to widen this year as global oil prices surge due to the war in Ukraine. However, it said the country has “limited” risks associated with external position, supported by remittance and foreign direct investments.

The country’s current account deficit is expected to widen to $16.3 billion this year, which is equivalent to 3.8% of the gross domestic product (GDP), based on central bank projection. If realized, this would be bigger than the $6.922-billion gap in 2021.

“R&I will not take a negative view of the current account deficit, given that increased imports stemming from infrastructure investment will lead to economic growth in the future. Foreign currency reserves are in excess of external debt. The country’s external liabilities exceed its external assets, but only slightly. R&I considers the risk associated with the external position to be limited,” it said.

Noting the bigger budget gap last year due to the “still somewhat vulnerable economy,” R&I said it will monitor whether a stable financing environment will be maintained.

The fiscal deficit rose by 22% to P1.7 trillion in 2021. This is equivalent to 8.61% of GDP from 7.65% in 2020. For 2022, the fiscal deficit cap is set at P1.65 trillion which is 7.7% of GDP.

“R&I will keep an eye on the new administration’s policies, particularly on continuing key infrastructure projects and structural reforms, which are deemed essential in attracting investments from both domestic and external sources,” it said.

The national elections will be held on May 9.

R&I said it expects the Philippines to eventually achieve its target to become an upper middle-income country amid the steady rise in per capital gross national income.

However, it cited projections by the International Monetary Fund that the country’s per capita GDP will still be low compared to its peers in Southeast Asia. R&I said this is reflective of the local economy, where manufacturing only contributes a small share to employment as well as the low productivity of the agriculture sector.

“Eyes are on whether the country will be able to enhance its resource allocation efficiency and productivity in the medium to long term by capitalizing on reforms,” it said.

Finance Secretary Carlos G. Dominguez III said R&I’s rating action is an affirmation of the government’s policies for the vulnerable sector and infrastructure development during the pandemic, while ensuring fiscal discipline.

“We are committed to achieving full economic recovery within the soonest possible time, while mindful of staying within the boundaries of fiscal discipline, so that the debt burden from the COVID-19 is not passed on to future generations,” Mr. Dominguez said in a statement. — Luz Wendy T. Noble

March BoP surplus biggest in 3 months

April 20, 2022 | 12:32 am

By Luz Wendy T. Noble, Reporter

THE Philippines’ balance of payments (BoP) position swung to a surplus in March, driven by foreign currency deposits from the National Government and the central bank’s investments abroad.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed that BoP recorded a $754-million surplus last month. This is a turnaround from the $73-million gap a year earlier, as well as the $157-million deficit in February.

This is also the biggest BoP surplus since the $991-million surfeit in December.

“The BoP surplus in March 2022 reflected inflows arising mainly from the National Government’s (NG) net foreign currency deposits with the BSP and BSP’s income from its investments abroad,” the central bank said in a statement.

Last month’s BoP surplus could be partly attributed to the global bond issuance by the government, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Bureau of the Treasury raised $2.25 billion through its maiden triple tranche dollar-denominated bond offering in March.

The government will use the proceeds for the national budget and the sustainable finance program.

At its end-March level, the BoP reflects a final gross international reserve of $107.31 billion, down 0.5% from the $107.8 billion a month earlier.

This is enough to cover 7.1 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity. It also represents buffers equivalent to 9.5 months’ worth of imports of goods and payments of services and primary income.

The BoP position posted a $495-million surplus in the first quarter of 2022, a reversal from the $2.844-billion deficit in the same period last year.

The BoP gives a glimpse into the country’s transactions with the rest of the world. A deficit means more funds left the country, while a surplus shows that more money came in.

The ongoing war between Russia and Ukraine could complicate global and domestic recovery and affect the country’s BoP this year, Security Bank Corp. Chief Economist Robert Dan J. Roces said.

“War-induced volatility in the global financial and commodity markets has the potential to spill over to the local economy, and so this points to a negative impact to our major trading partners and leading to a [BoP] deficit for 2022,” Mr. Roces said in a Viber message.

The Philippines is a net oil exporter, making it vulnerable to the surge in fuel prices caused by the war.

For this year, the BSP expects the BoP position to post a $4.3-billion deficit, which is equivalent to 1% of the gross domestic product.

World Bank says war to cut global growth, boosts financing target

April 20, 2022 | 12:31 am

Ukraine and Russian flags — UKRAINE and Russian flags are seen through broken glass in this illustration taken March 1, 2022. — REUTERS

WASHINGTON — The World Bank is reducing its global growth forecast for 2022 by nearly a full percentage point, to 3.2% from 4.1%, due to the impacts from Russia’s invasion of Ukraine, World Bank President David Malpass said on Monday.

Malpass told reporters on a conference call that the World Bank was responding to the added economic stresses from the war by proposing a new, 15-month crisis financing target of $170 billion, with a goal to commit about $50 billion of this financing over the next three months.

Malpass said the biggest component of the bank’s growth forecast reduction was a 4.1% contraction in the Europe and Central Asia region — comprising Ukraine, Russia and surrounding countries. Forecasts also are being cut for advanced and many developing economies because of spikes in food and energy prices caused by war-related supply disruptions, Malpass said.

“We’re preparing for a continued crisis response, given the multiple crises,” Malpass said. “Over the next few weeks, I expect to discuss with our board, a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023.”

The plan follows from a World Bank $160-billion COVID-19 financing program, of which Malpass said $157 billion was committed through June 2021.

Malpass said the financing partly will support countries that have taken in refugees from Ukraine and will also help address problems in countries affected by food shortages.

Malpass said World Bank and IMF member countries this week will be discussing new assistance for Ukraine, and expects specific commitments to be announced by a number of donor countries. — Reuters