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China confident of achieving 2023 economic growth target: state planner

A WOMAN walks across the street during morning rush hour in Chaoyang District, Beijing, China Nov. 21, 2022. — REUTERS

BEIJING – China is confident of achieving its 2023 growth target as consumption picks up steam, the vice head of the state planner said on Monday, after parliament set a modest goal of expanding the world’s No.2 economy by around 5% for this year.

Domestic stock indexes opened subdued on Monday after outgoing Premier Li Keqiang did not set China a more ambitious growth target this year as the annual session of the National People’s Congress kicked off in Beijing.

China‘s economy staged one of its weakest performances in decades last year, when gross domestic product (GDP) grew by just 3%, squeezed by stringent COVID-19 controls, a crisis in the property sector and a crackdown on private enterprise.

Thanks to changes in COVID prevention and control policies, the recovery in mobility for people and goods is speeding up, Zhao Chenxin, a deputy head of the National Development and Reform Commission (NDRC), told a news conference on Monday.

Tourism, catering and retail sales have improved significantly, fueling the consumption sector since the Lunar New Year and getting the economy off to a strong start, he added.

“China‘s economy is steadily improving,” Zhao said, adding they are “full of confidence” in achieving the 2023 economic growth target.

“The around 5% target is in line with current economic momentum… and it will help guide all parties to focus on improving the quality and efficiency of economic development.”

Meanwhile, the government will also “coordinate development and security and tackle risks related to property, finance and local government debt in an appropriate manner,” Zhao said.

Analysts noted economic and financial risks featured more prominently in this year’s work report, highlighting the government’s concerns over a slowing global economy, local government debt and persistent problems in the property sector.

“On the major tasks for the new year, the government work report spent an entire section emphasizing effectively preventing and defusing major economic and financial risks, which was not specifically discussed in last year’s government work report,” Nomura analysts pointed out in a note.

Acknowledging that food and energy costs had increased in other markets and could do so in China as the country continues its exit from zero-COVID policies, Li Chunlin, another deputy head, reiterated China had enjoyed a good harvest and hog production capacity was abundant and energy security was strong.

Steps to improve the country’s employment rate also featured prominently, following China‘s urban employment rate falling for the first time in six decades in 2022.

“Last year we set a target of 11 million new jobs, and we actually created 12 million… the target for this year is about 12 million,” Li said.

Zhou Hao, an economist at Guotai Junan International, said the higher job creation target underscored the importance of consumption in unleashing long-term growth potential.

The increased target “clearly illustrates that the government pays more attention to growth quality,” Zhou said in a note. – Reuters

Indonesia banks on dams to tackle water crisis – but at what cost?

A dam in Indonesia | STOCK PHOTO | Image by Deni Hermawan from Pixabay

PURWOREJO, Indonesia – Keen to store more irrigation water to shore up food security and protect itself from longer climate change-fueled droughts and extreme rainfall, Indonesia has embarked on a dam-building project that aims see 57 new dams in place by 2024.

But for those in their path, the work has not always brought greater security.

In Indonesia‘s Central Java province, ongoing work on the 690-hectare (1,700-acre) Bener Dam has destroyed farmer Gunawan’s small durian fruit plot, robbing him of his income.

The 33-year-old said his land in Purworejo district was bulldozed to make way for the dam despite not being earmarked for demolition when the government published its plans for the project.

The 2 trillion rupiah ($132 million) dam is set to be finished in 2024.

“I’m sad and also … angry,” Gunawan – who like many Indonesians goes by one name – said in the village of Guntur, adding that he used to make 20 million rupiah ($1,318) a year selling his durian harvest.

Now, he said, he has had little choice but to take on occasional work as a truck driver to make ends meet

“What can we do against the government?” asked Gunawan, one of thousands of small-scale farmers and other people in the area who say they have been uprooted by the dam project.

Facing worsening water security concerns, Indonesia is building more water retention dams, which it says are needed to supply irrigation, reduce the risk of flooding and provide a source of low-carbon hydroelectric power.

But dam building – as with the Bener Dam – is causing its own new challenges, from upending the lives of local people to new losses of forests and agricultural land, according to residents and campaigners.

Deforestation, in particular, can interfere with rainfall patterns and affect the ability of land to hold water, said Ully Artha Siagian, a forest and climate change campaign manager at the Indonesian Forum for the Environment (WALHI), a non-profit group.

The Bener dam “will actually add to the burden of the threat of a clean water crisis in the future,” she said. “So, converting forest areas into dams does not answer the problem.”

In response to concerns by campaigners, Dwi Purwantoro, an official at the Ministry of Public Works and Housing (PUPR), said by phone that dam building was important not only for boosting water security but also for better controlling floods.

 

COMPETING NEEDS

As climate change impacts strengthen, countries including Indonesia are attempting to be proactive in adapting to coming changes and looking for ways to curb climate-changing emissions, such as by installing renewable energy.

But many of the potential adaptations and emissions-cutting efforts put new pressure on limited land, with competing priorities such as protecting nature, boosting food security, mining minerals needed for the green transition and protecting land rights pitted against each other.

In some cases, the choices made threaten to lead to social unrest, especially if communities find themselves uprooted without consent or adequate compensation. They also raise crucial questions about how to strike a balance among competing “good” uses for land.

Indonesia in 2021 published a climate resilience development policy that outlined four priority areas for action as climate change worsens: agriculture, seas and coasts, health and water.

In the country’s regions of Bali, Java and Nusa Tenggara, areas facing water scarcity are predicted to rise from 6% in 2000 to 9.6% in 2045, according to a 2019 study by Indonesia‘s National Development Planning Agency.

Eko Cahyono, a researcher for the Sajogyo Institute, which studies agrarian issues and the environment, said he understood why Indonesia‘s government wanted to improve water security, but said that should not come at the cost of people’s livelihoods and rights.

“If this (Bener Dam project) is indeed part of climate change mitigation and adaptation (efforts), how can the government ensure social, economic and ecological justice, so that there are no more violations of people’s rights?” he asked.

 

LAND LOSSES

According to a government land procurement plan and project map published in 2019, the Bener Dam would affect plots of land belonging to at least 3,480 people, covering a total of 600 hectares.

In addition, a quarry being built in the area to mine stone for the dam would impact the garden plots of 617 people and an area of 114 hectares, the document noted.

Some residents like Gunawan say their land was also destroyed despite not having been earmarked in the planning documents. They are now demanding compensation as a result.

Purwantoro, the public works official, said that “regarding several residents’ land (being) outside the project map … now we are proposing changes to the map so it will be expanded”.

Construction of the Bener Dam was temporarily halted in August 2022 following local protests, according to state-owned construction firm PT Waskita Karya, which is working on the project.

“We still hope that there will be the best solution for the residents,” said company spokesperson Setyawan Nugroho, adding that discussions on compensation were ongoing.

The government has offered compensation ranging from about 60,000 rupiah ($4) to 215,000 rupiah ($14) per metre of land depending on area in question. Several residents said in interviews that they had refused to accept the terms.

Ully of WALHI said the project had led to “social conflict” in Purworejo because many people had lost their sources of food and lost green areas that had been in their families for generations.

There have been clashes between residents and police and soldiers doing land surveying, and authorities are seeking six suspects accused of vandalising a dam project office.

The Bener Dam is a national strategic project (NSP), making it a government priority, but critics say declaration of an NSP can result in land being seized or destroyed in the name of development and the public interest.

Dewi Kartika, secretary-general of the Consortium for Agrarian Reform (KPA), urged the government to review its development policy, saying it “has sparked agrarian conflicts in many places”.

Last year, 212 such conflicts were recorded by KPA – up from 207 in 2021. They took place in 459 villages, affecting at least 346,00 people, she said.

 

OUTLOOK FOR DAMS

The Indonesian government has cited building dams as a major solution to the country’s water security worries but hydrology experts have concerns about its approach.

Gunawan Wibisono, a lecturer at Merdeka Malang University, said Indonesia‘s dam projects will result in forest losses and their effectiveness in improving water security could be limited as sediment carried downstream fills them and by a lack of focus on recharging groundwater in their design.

None of Indonesia‘s planned dam projects are intended to help boost groundwater reserves, according to Heru Hendrayana, a hydrologist at Gadjah Mada University (UGM).

“The problem is … most (dams) are mostly for the function of collecting, not absorbing, water,” he said.

In the village of Guntur, residents such as Gunawan and Miftakhul Hafid are determined to keep protesting against the Bener Dam – a project they feel is bringing them more problems than benefits.

“The government must ensure … that residents’ rights are fulfilled,” said 28-year-old Hafid, a community leader. – Reuters

SoftBank’s Arm aims to raise at least $8 billion in U.S. IPO, sources say

NEW YORK – Arm Ltd., the British chip designer owned by Japan’s SoftBank Group Corp., is likely to aim to raise at least $8 billion from what is expected to be a blockbuster US stock market launch this year, people familiar with the matter said on Sunday.

Arm is expected to confidentially submit paperwork for its initial public offering in late April, the sources said, speaking on condition of anonymity because the discussions are confidential. The listing is expected to happen later this year and the exact timing will be determined by market conditions, the sources added.

SoftBank has picked four investment banks to lead what is expected to be the most high-profile stock market flotation in recent years. Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays and Mizuho Financial Group. are expected to be the lead underwriters for the deal, the sources said, adding that no bank has been picked for the much-coveted “lead left” position yet.

The Australian Financial Review reported on the lead banks earlier on Sunday.

The preparations for the IPO are expected to be kick-started in the US in the coming days, the sources said. The valuation range has not yet been finalized but Cambridge, England-based Arm is hoping to be valued at more than $50 billion during its share sale, the sources said.

Barclays, JPMorgan and SoftBank did not immediately respond to requests for comment. Arm, Goldman Sachs and Mizuho declined to comment.

A successful listing for Arm this year would provide a boost to the IPO market, which has been largely frozen since Russia’s invasion of Ukraine in February 2022 triggered market volatility and a huge sell-off in tech stocks.

The IPO market briefly flickered back to life last month as a number of companies including solar tech firm Nextracker Inc. and Chinese sensor maker Hesai Group listed their shares on US stock exchanges, but investors still remain wary of betting on new stocks.

IPO advisors are not expecting a full-blown recovery in capital markets until the latter half of this year. Read full story

Arm said last week it would pursue a US-only listing this year, dashing the British government’s hopes that the tech giant would return to the London stock market. Read full story

SoftBank has been pursuing a listing for Arm since its deal to sell the chip designer to Nvidia Corp. for $40 billion collapsed last year because of objections from US and European antitrust regulators. – Reuters

Chinese companies hang onto dollars, hedge to prepare for volatile yuan

A VIEW of the city skyline in Shanghai, China, Feb. 24, 2022. — REUTERS

SHANGHAI – Some Chinese companies are holding on to dollar revenues from exports, while others are turning to foreign exchange hedging in anticipation of a fall in the value of the yuan, according to executives, bankers and data analyzed by Reuters.

Several bankers in China told Reuters that clients are reluctant to convert export receipts, while exchange filings show more than 30 A-share listed companies have signed up to use currency derivatives for risk-hedging so far this year.

Central bank data also shows a shift, with dollar deposits at China’s commercial banks, which had declined over the past year, jumping by $34 billion in January to $887.8 billion.

The moves are at odds with bank forecasts for a rising yuan in 2023 and broader market expectations that the US dollar will fall this year, and could contribute to yuan weakness.

Ms. Zhu, the owner of a Shanghai-based electronic components exporter, said she is setting aside dollars, betting that her management of some $7 million annual inflow of the US currency will prove crucial to the profitability of her company.

“I may need to convert some dollars into yuan to make payments to domestic suppliers,” said Zhu, who prefers to go by her last name. “(But) it feels like I should keep some dollars on hand, as the yuan will depreciate further.”

Others anticipating a bumpy ride ahead for the Chinese currency include China Southern Airlines 600029.SS.

China’s largest carrier by fleet size said in a Feb. 28 stock exchange filing that it planned up to $4 billion worth of currency hedging in 2023 to “smooth out exchange gains and losses”, up from $850 million last year.

Such moves are perhaps not surprising given yuan volatility since Beijing suddenly unwound its zero-COVID strategy. The currency hit six-month highs in January, before dropping close to the closely-watched 7 per dollar level.

The yuan CNY=CFXS last traded at 6.9085 to the dollar.

In response to faxed questions on the yuan weakening past 7 to the dollar, the People’s Bank of China (PBOC) directed Reuters to comments by its governor Yi Gang who said the level is not a “psychological barrier”.

“Over the past five years, the exchange rate has been volatile, with a volatility rate of about 4%. And such a volatility rate is about the same as major economies,” he said.

“Overall, yuan exchange rate will remain basically stable at reasonable levels,” he added at a March 3. news briefing.

 

‘BENIGN’

The yuan had its worst year in 2022 since China unified market and official exchange rates in 1994, dropping nearly 8% as rising U.S. interest rates diverged from falling Chinese ones, supporting dollar gains.

Now the prospect of Chinese tourists using foreign exchange for their trips abroad, fresh concerns that U.S. interest rates might rise further and geopolitical tensions keeping investment flows away from China are all weighing on the currency.

“It’s possible to see the yuan go past the 7-mark against the dollar in the near term given the escalating geopolitical tensions between China and the U.S.,” said Tommy Wu, senior China economist at Commerzbank.

“Still, the yuan could stabilize somewhat if the upcoming economic data shows continued improvement in the economy.”

China on Sunday set a modest target for economic growth this year of around 5% as it kicked off its annual parliamentary gathering. With the economy staging a steady recovery, this could put a floor under the yuan and ultimately attract inflows.

While Chinese authorities have stepped in to lend support in the past and have already made it pricier to bet against the yuan, markets do not expect intervention in the near term.

“Reaction from the regulator has been benign so far, their tolerance of volatility in the yuan has risen quite a lot since last year,” Becky Liu, head of China strategy at Standard Chartered Bank, said.

And unlike in 2022, the PBOC does not seem to be using the daily setting of the currency trading band to lend support.

“We do not think the central bank will defend 7 as CFETS stays strong at around 100,” said Lemon Zhang, FX strategist at Barclays, referring to the trade-weighted CFETS index.

This gauge of the yuan‘s value against its major trading partners .CFSCNYI is up about 2% this year.

Zhang expects the yuan to hold at 7 per dollar until the end of June, before strengthening to 6.7 at the end of the year.

Ju Wang, head of Greater China FX and rates strategy at BNP Paribas, said she still holds short yuan positions against the dollar, although she does not expect significant weakness. – Reuters

The Spark Project celebrates decade of igniting social entrepreneurship, creativity

The Spark Project team with the 2023 Spark Impact Awardees. Standing (L-R): Stephen Co, founder and CEO, Nipa Brew; Rio Cuervo, creator and designer, RIOtaso; Ceej Tantengco, head of Partnerships and Development, PumaPodcast; Jamie Naval, chief toy maker, TenTwenty Kids; Jal Mustari, founder, Aretes Style; Kirk Damasco, founder, ASSES. Front row (L-R): Patch Dulay, founder and CEO, The Spark Project; Paola Betita Tan, Growth & Partnerships manager, The Spark Project; Audrey Hontiveros, Crowdfunding manager, The Spark Project; Julienne Joven, Learning & Development manager, The Spark Project. Other winners not in the photo are Ann & Louie Poco, co-founders, Gouache Bags; Ian Sarra, founder, Vitrum Bottles; Jude Gitamondoc, founder and songwriter, Kadasig; and Carla Pulido Ocampo, director, Habi Collective Media.

By Chelsey Keith P. Ignacio, Special Features and Content Senior Writer

A community of social entrepreneurs and creatives came together to mark the 10th year anniversary of The Spark Project last February.

The celebration looked back at The Spark Project’s undertakings through the years, unveiled the new services on its platform, and recognized some individuals and their projects in its community.

The Spark Project was initiated back in 2013 with a belief in Filipinos’ talent. Eventually, it developed from being a crowdfunding platform to an enabling platform, providing tools and resources to support entrepreneurs and creatives who want to make a positive impact.

“We want to use technology for good to usher in a new generation of entrepreneurs who are creative, innovative, socially conscious, and driven with passion. And that’s what we exactly did through the crowdfunding website that we launched 10 years ago,” The Spark Project Founder and Chief Executive Officer Patrick Dulay said during the event held last Feb. 25 at the Clock In by Ayala Land Offices in Ayala North Exchange in Makati City.

Throughout the 10 years, among the successes that The Spark Project community has created were the launch of 133 crowdfunding projects; 21 million funds raised for the projects; 105 enterprises incubated through the programs from the nine collaborations it made with large-scale organizations; the conduct of over a hundred community meetups and workshops; and inspired thousands of aspiring and emerging entrepreneurs.

“All these projects that we’ve sparked have really created an impact that has trickled down or created a ripple effect — creating economic opportunities for those that are marginalized, giving voice to the voiceless. We promoted the arts, celebrated and preserved our rich cultural heritage, and also cared for the environment through these projects that we’ve done together,” Mr. Dulay said.

Along with the celebration of The Spark Project’s 10th anniversary was the launch of its three solutions, which include Crowdfunding, Learning, and Entrepreneurship.

The Spark Project’s Crowdfunding Platform enables creatives and entrepreneurs to launch and raise funds for their projects. They can also get support in setting up, launching, and running their campaigns with the help of like-minded creators through the Spark Launchpad, a cohort-based crowdfunding accelerator program.

As for the new Learning solutions, the Spark School has been created, a learning hub that offers online courses and get educated by The Spark Project and its network of social entreprenuership experts. An on-demand business consultancy service is also available for creatives and entrepreneurs through Spark Consulting, where they could learn from experts about developing their businesses.

The Spark Project’s community events will also return, such as the monthly meetups, where entrepreneurs could connect and collaborate with each other, as well as its flagship conference Spark Fest, which would also bring together aspiring and emerging founders.

On the side of Entrepreneurship, The Spark Project created a dedicated page that comprise grants, events, and other opportunities in the Opportunities Platform. It also offers Small Business Services, an online marketplace where entrepreneurs could go to outsource from reliable suppliers and service providers for their projects.

Additionally, Impact Labs was also launched for organizations and corporations that want to harness their large-scale platforms to equip, empower, and enable social entrepreneurs by way of a customized incubator and funding programs.

Also launched under Entrepreneurship was the Venture Studio, which will further support social entrepreneurs in growing their businesses and building up their impact by providing them access to capital, expert support, community, and network.

Spark Impact awardees

The Spark Project also honored 10 projects and the people behind them in the first Spark Impact Awards held during the anniversary celebration.

The recipients were Ann and Louie Poco of Gouache Bags; Rio Cuervo of RIOtaso; Ian Sarra of Vitrum Bottles; Carla Pulido Ocampo of Habi Collective Media; Jamie Naval of TenTwenty Kids; Jude Gitamondoc of Kadasig; PumaPodcast; Kirk Damasco of ASSES; Jal Mustari of Aretes Style; and Stephen Co of Nipa Brew.

“These [people] are true testaments to the spirit of what The Spark Project is and a true testament and inspiration to us that it is possible to be able to create something that is meaningful, at the same time sustainable and impactful,” Mr. Dulay said.

The Spark Project works on promoting creative consciousness and empowering entrepreneurs to bring their project ideas into reality.

“Whether you are a creative, an entrepreneur, an innovator, or anyone who just wants to do something good in society and help your communities, The Spark Project is the platform and community for you to reach your full potential and get your projects off the ground,” Mr. Dulay said.

Fintech startup partners with Sitel Philippines to provide financial benefits beyond paycheck

(From left) Sitel Philippines Total Rewards Director Ruby Gealon, Sitel Group VP for HR - Philippines & China Pam Donato, Advance CEO and Co-Founder Jaime de los Angeles, and Advance COO and Head of Product Stefanie Lim

On-demand salary platform Advance has partnered with Sitel Philippines, one of the largest providers of customer experience products and solutions in the country, to advance employees’ financial wellness through its services.

With this partnership, over 43,000 employees of Sitel Philippines may easily access a portion of their salaries anytime by way of a flexible credit line through a mobile app in as quickly as a few seconds.

Users of Advance simply have to download the Advance mobile app, create an account, and complete the verification process. After successful registration, users will be granted credit lines and immediately see what they are eligible to borrow. They will then choose the amount and payment terms, review selected items and digitally sign the legal contracts to finalize the request. Once accomplished, the borrowed amount is almost instantly credited to their chosen account.

“Accessibility and ease of use are among our main considerations in designing our platform,” Advance CEO and Co-Founder Jaime de los Angeles said. “We want to ensure that our service is always reliable — 24/7 — so we can give Advance users an additional sense of security knowing that they have an immediate financial option whenever they need the assistance.”

For Sitel Philippines, one of the top employers in the country, providing overall employee wellness is a company commitment — from health, education and training, diversity and inclusion, and now financial wellness.

“Financial wellness is part of our holistic approach for the total wellness we want for our employees,” Sitel Group VP for HR – Philippines & China Pam Donato said. “Our partnership with Advance provides not only short-term aid to our employees during times of emergencies but also assistance for them to attain even bigger and long-term financial goals.”

Besides credit lines and salary advances, users of Advance can also look forward to more services, including insurance and savings features.

Advance is also developing a deeper financial suite, such as working capital lines for businesses, and educational and cash management tools to help promote financial literacy and progression among the Filipino work force.

Startup with first plantable bamboo toothbrush wins this year’s Shell LiveWIRE grand prize

(L-R): Serge Bernal, Pilipinas Shell Petroleum Corp. vice-president for Corporate Relations; Rey Abilo, chief financial officer of Pilipinas Shell; Sebastian Quinones, executive director of Pilipinas Shell Foundation, Inc.; DICT Director Emmy Lou Delfin; Mark Sultan Gervasa, founder and CEO of 2022 Shell LiveWIRE Top Tech Startup awardee Bambuhay; Ma. Divina de Leon, Shell Regional performance manager; Juancho Jimenez, senior associate at Openspace Ventures; Carlo Delantar, co-founder and partner of Core Capital; and host RJ Ledesma

Pilipinas Shell Petroleum Corp.’s year-long Shell LiveWIRE program, which mentors tech startups and community enterprises in growing their businesses, recently awarded the 2022 grand winner to a local enterprise that invented the “first bamboo plantable toothbrush”. Shell LiveWIRE also recognized the accomplishments of the two other contenders, six community enterprises, and two more small and medium enterprises (SMEs), all anchoring their pioneering products on sustainability, environmental preservation, and livelihood development.

Bambuhay, which addresses plastic pollution, deforestation, and climate change, met the top marks in the program’s criteria: viability, feasibility, environmental sustainability, local content, and integration compatibility with Pilipinas Shell’s supply chain.

Bambuhay Founder Mark Sultan Gervasa started his company with a mere capital of P10,000 and recouped his investment on a massive scale with its current sales revenue of P26 million. The startup has also uplifted 68 families out of poverty while eliminating more than 1,100 tons of plastics, as of year to date. Merging the reduction of plastic pollution with bamboo technology began with one stark recognition.

“About 16 billion pieces of plastic toothbrushes are thrown away annually around the world,” Mr. Gervasa said.

Bamboo was a natural choice to replace plastic because “it captures more carbon dioxide than any other plant. It is renewable; you plant only once and harvest for life. It is affordable, and produced naturally and ethically in the Philippines.”

Shell LiveWIRE awarded Bambuhay P500,000 to scale its operations.

The other awardees were Pieza, an automotive digital marketplace that encourages sustainable transportation; and Suds, a cleaning product company that offers fill-and-reuse cleaning pods that help customers avoid the use of plastics.

Suds has also addressed the plastic problem by saving more than 800,000 plastic bottles and sachets from reaching the country’s landfills and oceans. Its concentrated cleaning pods replace the usual bulky cleaning materials that generate a lot of carbon emission during its manufacture and transport.

Suds’ pods have their 60%-H20 composition dissolve after use and upon mixture with water, removing the need to throw them away as garbage. Suds Co-Founder Jenan Magboo-Yuzon said that the polyvinyl alcohol in the cleaning material “is biodegradable, non-toxic, and has been used in cosmetics and medicine.”

Pieza, the web and mobile app that connects automotive retail shops and motorists, aims to keep the planet cleaner by encouraging car owners to purchase spare parts instead of buying new vehicles.

Currently, Pieza has 50,000 automotive retail owners in its digital network and three fulfillment centers in Navotas, Antipolo, and Ortigas for its logistics services.

It aligns with Pilipinas Shell’s diversity and inclusion values through “a genderless platform where we can serve not just the Baldos but also the Marias,” said Pieza Chief Executive Officer Jonecca San Pascual. “We also promote a decent work capacity for them to earn better.”

Shell LiveWIRE also awarded P100,000 each to six community enterprises: Republic Junk, a “trash-vocacy” encouraging circularity by discarding trash for cash; Moto-in-Can, creator of Pinoy miniature art from recycled tin cans; Better Pililla Women’s Handicrafts Cooperative, a women’s cooperative turning waterlilies into handicrafts; Bambusa de Oro, sustainable production purveyors who repurpose bamboo into home products; Golden Parauma Agriculture Cooperative (GPAC), a farming cooperative creating organic agricultural products; and Siembre Agrarian Reform Beneficiaries Organization (SABRO), a group of farmers who produce, distribute, and sell banana chips beyond the scope of their community.

For the first time, Shell LiveWIRE chose the Tech Startup Sponsor’s A-List and extended the acceleration program to two rising stars: Carbonamics, producers of fuel-grade ethanol from carbon dioxide; and Blitzkrieg, pioneering in the early detection of diseases in livestock with their breakthrough animal test kits.

Carbonamics won the Benita and Catalino Yap Foundation (BCYF) Innovation Award, which Shell LiveWIRE supports in its long-standing commitment to empowering Filipino small and medium enterprises. The BCYF recognizes excellence in visionary innovation in business and enables participating businesses to expand their markets, upgrade their systems, and bring about positive transformation in their communities.

Serge Bernal, Pilipinas Shell’s vice-president for Corporate Relations, praised the winners and the participants for exercising the “creativity, courage, commitment, and character” required to start and support a business. He emphasized the energy company’s continuous support for “innovation that responds to the need of the local communities and generates employment for more Filipinos. We want to get more innovations off the ground to keep the Philippines moving forward.”

Since its launch in the country three years ago, Shell LiveWIRE has helped more than 3,600 innovators and business owners, equipped more than 30 tech startups and community enterprises, and created more than 400 local jobs. About 12 Shell LiveWIRE participating companies have also entered Pilipinas Shell’s supply chain as contractors, vendors, and suppliers.

Entrepreneurs who are interested to join Shell LiveWIRE 2023 can register through www.shell.com.ph/ShellLiveWIRE.

APO La Salle celebrates 51 years of servant leadership

On its 51st founding anniversary, the APO La Salle chapter celebrates its legacy by further strengthening its present foothold in the society and forging the future.

There are few things in the world more powerful than friendship. Truly, the bond among like-minded men and women lasts a lifetime, but even more so when the brotherhood and sisterhood is forged by a collective spirit of selfless service.

Such are the ties that bind Alpha Phi Omega—one of the largest premier service-oriented organizations in the world. Founded in December 16, 1925 in the United States, and with over half a million alumni members across the globe, APO seeks “to develop leadership, promote friendship, and provide service to humanity.”

Founded in December 16, 1925 in the United States, APO seeks “to develop leadership, promote friendship, and provide service to humanity.”

In the Philippines, APO La Salle was founded on February 27, 1972. Over the years, it takes pride in nurturing well-rounded and successful members of the organization belonging not only in the business community but in other sectors and industries such as the academe, military, and the government.

In celebration of its 51st founding anniversary, the chapter celebrates its legacy not only by looking back on half a century of molding exemplary men and women out of Green Archers, but also by further strengthening its present foothold in the society and forging the future through its cardinal principles of leadership, friendship, and service.

More than its individual members, APO La Salle revels in its collective achievements. Its ubiquitous presence representing all strata of life have been dedicated to the development and uplifting of impoverished communities here and abroad. Services conducted by the organization include community development and rehabilitation, calamity drives, medical-dental missions, and tutoring, among others.

For its 50+1 Anniversary, APO La Salle spearheaded a slew of humanitarian projects this February, aimed at effecting positive changes in communities in Morong, Bataan. Over a hundred of its members graced the event coming home from different parts of the globe such as the US, Canada, Middle East, and Australia. Morong Mayor Cynthia Estanislao was also present in all of the events, marking the Morong LGU’s collaboration with APO La Salle for the latter’s Pawikan conservation project.

First on the lineup was an Artesian Wells Project, which was primed to provide a sustainable water supply system for communities in Morong, Bataan. This was done in conjunction with a feeding program and a slipper donation drive.

They also undertook the aforementioned Pawikan conservation project, which will protect and boost the dwindling population of the endangered sea turtles—majestic creatures that keep seagrass beds healthy and thriving for the entire local marine biome. As members took part in freeing bales of hatchlings, the chapter recognized the support needed in this kind of initiative to help save our ecosystem.

One of the seven artisan wells made for Barangay Ginebra by APO La Salle.

These ventures are only a handful of the ways APO La Salle has offered its kindness and generosity to the community. The organization is consistently driven towards philanthropic work in order to serve and give back to communities. To empower its members in this endeavor, APO La Salle positively influences their growth, wellness, and development.

Members of APO La Salle currently living in the United States and spreading their acts of community service.

On such a commemorative event as its founding anniversary, the organization hopes to continue sharing the APO way of life and La Sallian altruism throughout the country for decades to come.

 

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Feb. inflation likely hit 8.9% — poll

A woman buys food items at a supermarket in Quezon City, March 4, 2022. — PHILIPPINE STAR/ MICHAEL VARCAS

By Keisha B. Ta-asan, Reporter

PHILIPPINE INFLATION likely further quickened in February, with upward pressure expected from higher prices of cooking gas and food, analysts said.

A BusinessWorld poll of 17 analysts yielded a median estimate of 8.9% in February, within the 8.5% to 9.3% forecast range given by the Bangko Sentral ng Pilipinas (BSP) last week. 

If realized, it would be faster than the 14-year high of 8.7% in January and the 3% a year earlier.

Analysts’ February 2023 inflation rate estimates

February would also mark the 11th consecutive month inflation exceeded the BSP’s 2-4% target.

The Philippine Statistics Authority will release February consumer price index (CPI) data on March 7.

Inflationary pressures likely remained strong in February, which would be “enough to prevent inflation from peaking,” Hongkong and Shanghai Banking Corp. economist for the Association of Southeast Asian Nations (ASEAN) Aris Dacanay said.

“Although fuel prices have eased, this was likely offset by elevated food prices as trade restrictions on food continued to put pressure on supply,” he said, citing elevated prices of onions, eggs and galunggong (round scad).

Refined sugar prices reached as high as P110 per kilogram in February, nearly double the P65 per kilogram seen a year ago. Egg prices have also gone up to P8-9 per piece from just P6 in February 2022.     

Meanwhile, prices of red onions have fallen to P100-P180 a kilo as of end-February, from P200-P330 a kilo as of end-January.   

Inflation last month could also have been driven by higher prices of liquefied petroleum gas (LPG) and “strong economic activity,” ANZ Research economist Debalika Sarkar said in an e-mail.

Cooking gas prices increased by P10.00-11.20 per kilogram in February.   

“The reduction in retail pump prices and lower electricity tariffs set by the Manila Electric Company (Meralco), however, were sources of partial relief,” Ms. Sarkar said.   

Meralco cut the overall rate for a typical household by P0.0106 to P10.8895 per kilowatt-hour (kWh) in February.

Philippine National Bank economist Alvin Joseph A. Arogo said in an e-mail that inflation may have accelerated in February as the “lagged and second-round effects of the commodities and foreign exchange spike from last year have generally not started to wear off.”

Meanwhile, China Banking Corp. Chief Economist Domini S. Velasquez said inflation in February may have been unchanged from January’s 8.7% due to the decline in vegetable prices, the rollback in pump prices and lower power rates.

Pump price adjustments stood at a net decrease of P0.50 a liter for gasoline, P5.45 a liter for diesel and P6.85 a liter for kerosene in February alone.   

“On the other hand, core inflation likely rose to 8% given more commodities being affected by persistently high inflation. Service activities such as restaurants and accommodation and recreation will likely exhibit higher prices,” Ms. Velasquez said.

Core inflation, which excludes volatile prices of food and fuel, jumped to its fastest pace in more than two decades at 7.4% in January from 6.9% in December.

Ms. Velasquez said elevated inflation may push Filipinos to seek wage increases and more subsidies, while transport groups may push for fare hikes, which may cause a “wage-price spiral” and lead to “runaway inflation.”

“Pro-active and preemptive non-monetary measures are needed to prevent another round of inflationary pressure. Sufficient food supply, improvements in domestic logistic chain and storage could help bring down food prices,” she said.   

PEAK?
Security Bank Corp. Chief Economist Robert Dan J. Roces said more food imports and targeted assistance to transport drivers, farmers, and fisherfolk are expected to cushion the impact of inflation.   

“As such, there is a good probability that the February print could be ‘toppish’ but of course significant upside risks remain for the year,” Mr. Roces said, adding that price pressures should taper off by the second quarter.

Gareth Leather, Senior Asia economist for Capital Economics, said headline inflation likely peaked in February, and will drop steadily for the rest of the year.

“But inflation is unlikely to return to (2-4%) target before the end of the year, much later than in other parts of the region,” he said.

For Makoto Tsuchiya, assistant economist at Oxford Economics, inflation is close to peaking.   

“With weaker sequential growth amid subsiding supply-side pressures and stronger currency, CPI inflation will likely peak this quarter, before moderating and reaching the BSP’s target band in the fourth quarter,” he said.   

Mr. Tsuchiya said these near-term inflationary pressures will push the BSP to continue tightening, although at a moderate pace.

Most analysts expect the Philippine central bank to deliver a 25-bp rate increase on March 23 in a bid to keep inflation expectations in check.   

“We think the BSP will hike by 25 bps at each of its March and May meetings, before pausing throughout the year,” Mr. Tsuchiya said.

While his baseline view is a 25-bp increase on March 23, PNB’s Mr. Arogo said “a significantly higher-than-expected February print may force the central bank to be more aggressive with a 50-bp hike.”

Meanwhile, Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the central bank may raise rates by as much as 50 bps again at the March meeting to “rein in inflation expectations” if inflation stood at 8.9% in February.

BSP Governor Felipe M. Medalla on Friday said the Monetary Board may likely do another aggressive rate hike at its policy meeting this month if inflation breaches the 9% level in February.

“Well, the worst-case scenario is above 9%,” Mr. Medalla said, “If that’s the case, clearly, we have to do something.”

The Monetary Board has hiked borrowing costs by 50 bps on Feb. 16, bringing the key policy rate to its near 16-year high of 6%.

This has brought the total rate hikes of the BSP since May last year to 400 bps.   

“If BSP opts for a 50-bp hike, the Monetary Board will disengage from the Fed and raise the risk of a terminal rate exceeding 6% especially if faster disinflation in succeeding months is nowhere to be seen,” Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.   

The US Federal Reserve raised the fed funds rate by 25 bps to 4.5-4.75%. It has hiked rates by a total of 450 bps since March 2022. The Fed’s next policy review will be on March 21 and 22.  

“Looking further ahead, I hope — though we’ve all been burned by this — that March will start to see a sustained slowdown in headline inflation,” Miguel Chanco, chief economist for emerging Asia at Pantheon Macroeconomics, said in an e-mail.

The BSP had revised its 2023 inflation outlook to 6.1% from 4.5% previously. It also hiked its inflation projection to 3.1% for 2024, from 2.8% previously.

DBM hopeful Congress will approve rightsizing plan within the year

Budget Secretary Amenah F. Pangandaman attends an economic briefing in Pasay City, July 26, 2022. — REUTERS

THE BUDGET department is confident that Congress will approve the government’s rightsizing program within the year.

“Hopefully this year (it will be passed). I think next week it will be passed in the House of Representatives, then we’ll try to push it in the Senate,” Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman told reporters on Thursday.

The National Government Rightsizing Act, which is one of the Marcos administration’s priority measures, is currently pending at the plenary at the House of Representatives.

It seeks to “minimize, if not eliminate, redundancies, overlaps, and duplications in its operations and simplify its rules and regulations, and systems and processes, while protecting the welfare of civil servants and other government workers.”

Analysts said that the government should ensure that its rightsizing program focuses on ramping up productivity and efficiency and not just scrapping workers.

“The conventional wisdom that the government bureaucracy is somehow too big and should be rightsized or reduced is actually inaccurate. If anything, our public sector is actually among the smallest in the world and correspondingly doesn’t provide as much of the government services that it could and should,” Sonny A. Africa, executive director of think tank Ibon Foundation said in a Viber message.

The DBM earlier said that slashing the government workforce by 5% would result in P14.8 billion in savings.

“It’s always useful to eliminate redundancy, overlaps and duplication and to promote efficiency and economy — but doing this does not necessarily make the government more effective. Trimming fat is necessary but, with the considerable development challenges facing the country, it’s actually more important to build muscle,” Mr. Africa said.

Based on latest data from the DBM, the total number of permanent positions for fiscal year 2023 is at around 1.94 million, not including ex-officio positions. Of this, about 1.77 million positions are filled and the remaining 170,668 are unfilled.

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the government should not rightsize “just for the sake of saving costs or reducing the redundancies.”

“Ultimately, the redundancies and overlaps while keeping the welfare of government workers depend on what the government is intent on doing. For instance, are we keeping the highly centralized type of management or are we going to devolve more functions to the local government? The answer to this basic question will then determine whether we have properly rightsized the government or not,” he said in an e-mail.

Meanwhile, De La Salle University law and business professor Antonio A. Ligon said that the government should perform a “comprehensive and thorough study” of what jobs will be eliminated.

“Evaluation and review of whatever consolidation or merging shall be done periodically if it will redound to faster service to our people. If not implemented properly, then it might just create confusion in government personnel and hence negatively affect the desired services to our people,” he said in a Viber message.

Mr. Africa said there may even be a need to add government jobs to boost public services and social protection.

“The rightsizing thrust is misguided in assuming that trimming the government workforce and reducing personnel services expenses will make the government more effective. On the contrary, the demands on the state to manage social and economic development are not just growing but also growing more complex,” he said.

However, he noted the government should also ensure its workforce will be better, more efficient, competent, transparent and less corrupt. — Luisa Maria C. Jocson

Subsidies extended to GOCCs up 8.5% in 2022

BW FILE PHOTO

SUBSIDIES extended to government-owned and -controlled corporations (GOCCs) reached P200.41 billion in 2022, with the Philippine Health Insurance Corp. (PhilHealth) being the top recipient.

Data from the Bureau of the Treasury (BTr) showed that budgetary support to GOCCs last year increased by 8.5% from P184.767 billion in 2021.

In December alone, subsidies surged by 419.9% to P32.07 billion from P6.169 billion in November and by 50.2% from P21.356 billion in the same month in 2021.

The government extends subsidies to GOCCs to help cover expenses that are not supported by their revenues.

In 2022, PhilHealth received P80.048 billion in subsidies, or nearly 40% of all subsidies last year. However, PhilHealth subsidies were 1.15% lower than the P80.979 billion it received in 2021.

The National Irrigation Administration (NIA) took in P40.662 billion in government subsidies, up by 6.1% from P38.311 billion in 2021.

Subsidies for the National Housing Authority (NHA) declined by 33.4% to P17.125 billion last year from P25.713 billion in 2021.

Also receiving significant subsidies were the Power Sector Assets and Liabilities Management Corp. (P8 billion), the National Food Authority (P7 billion), the National Power Corp. (P6.587 billion), and the Philippine Fisheries Development Authority (P5.603 billion).

The government also extended subsidies to the Bases Conversion and Development Authority (P4.581), the Philippine Crop Insurance Corp. (P4.366 billion), the National Electrification Administration (P3.613 billion), the Civil Aviation Authority of the Philippines (P2.439 billion), the Philippine Coconut Authority (P2.073 billion), and Small Business Corp. (P2 billion).

In December alone, PhilHealth received nearly half or 45% of the subsidies with P14.606 billion. This was followed by the NHA with P3.092 billion and the National Electrification Administration with P2.736 billion.

Other firms that received more than P1 billion in December were the NIA (P2.261 billion), Philippine Crop Insurance (P1.932 billion), Social Housing Finance Corp. (P1.783 billion), the Philippine Fisheries Development Authority (P1.665 billion), and the Philippine Coconut Authority (P1.075 billion).

The National Food Authority was the only major nonfinancial GOCC that did not receive subsidies in December.

Other GOCCs that received no subsidies in December were the Bases Conversion and Development Authority, the Cagayan Economic Zone Authority, Duty Free Phils. Corp., the National Tobacco Administration, the Power Sector Assets and Liabilities Management Corp., and the Sugar Regulatory Administration. — Luisa Maria Jacinta C. Jocson

Food imports may help tame prices in short term — analysts

Authorities seized smuggled onions and garlic in a cold storage facility in Malabon, Feb. 18, 2023. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Luisa Maria Jacinta C. Jocson, Reporter

IMPORTS of key agricultural commodities may help tame prices in the short term, but the government should address supply-side constraints to ensure inflation eases from recent 14-year highs, analysts said.

This as the Philippine government recently approved imports of onions and sugar to address supply shortages that have pushed prices higher.

“Imports can decrease inflation in the short run, but it can never be a solution in the long run. Once import prices rise, due to global stagflation and higher oil prices, these imports will only contribute to greater inflation,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in an e-mail. 

Soaring food prices have fueled inflation in recent months. Inflation accelerated to a 14-year high of 8.7% in January, from 8.1% in December amid higher prices of vegetables, eggs and fish. Analysts in a BusinessWorld poll last week expect inflation to further quicken to 8.9% in February.

“Anything, really, that the Philippines can do now to better facilitate food imports should go a long way in addressing the country’s inflation problem. The potential certainly is there for food imports to provide a relatively quick fix, too,” Pantheon Chief Emerging Asia Economist Miguel Chanco said in an e-mail.

Makoto Tsuchiya, assistant economist at Oxford Economics, said that non-monetary measures such as importation will be able to rein in supply-push inflation.

“Given the lack of supply of food is pushing up prices, it makes sense that importation should bring down inflation by boosting supply. At the same time, it is important to make sure such a policy is implemented appropriately, as the inability to get them where they are most needed will render the policy less effective,” he said in an e-mail.

Finance Secretary Benjamin E. Diokno earlier said there is a need to implement direct, non-monetary measures to address supply issues and rising inflation. He said the Bureau of Customs (BoC) needs to ensure imports “reach the intended markets as soon as possible.”

Analysts said it is important that imports will arrive on time.

“Otherwise, it will defeat the purpose of importing food or agricultural products to supplement existing domestic supply,” University of Asia and the Pacific Senior Economist Cid L. Terosa said in an e-mail.

The BoC said in a Viber message that it “recognizes its role in the fight against inflation.” It said it has instructed Customs staff at ports to ensure shipments coming into the country are released “efficiently and expeditiously to prevent any additional burden or cost against our stakeholders.”

“Moreover, the Commissioner put the BoC’s Intelligence and Enforcement Groups on task to monitor shipments closely so that any implemented trade facilitation measures are not abused to bring in illicit goods,” it added.

In an e-mail, Moody’s Analytics Senior Economist Katrina Ell said government efforts to increase imports of some items such as onions and refined sugar will help ease supply constraints.

“But it is critical that these imports are appropriately distributed to ease supply shortages. Without appropriate distribution, supply constraints will linger for longer,” she said.

Ms. Ell also noted that replenishing stockpiles is also appropriate to “smooth further supply constraints into the second half of 2023.”

For Mr. Lanzona, relying on imports places a “heavy toll on producers which can permanently disrupt the local supply chains and cause inflation in the long run.”

“The failure is this government’s insistence that they are doing well in terms of policy when obviously they have a clear inflation plan other than to adjust aggregate demand,” he added.

Mr. Terosa recommended other non-monetary measures like securing the distribution network as imports arrive for local distribution.

“Transportation and storage facilities have to be prepared for the influx of imports and their timely distribution. An efficient logistics system is therefore another non-monetary measure needed to bring down inflation,” he added.

Fitch Ratings Asia and the Pacific director Krisjanis Krustin in an e-mail recommended binding import restrictions and addressing inefficiencies in the domestic food supply chain.

“Over the long term, building the agriculture system that is more resilient to climate-related events should help stabilize prices, but such a policy usually takes a long time to bear fruit,” Oxford Economics’ Mr. Tsuchiya said.

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