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Brutal cold seizes northeast US, shattering record lows

A DANGEROUS combination of record-setting cold temperatures and powerful winds buffeted the northeastern United States on Saturday, creating life-threatening conditions and causing the death of an infant in Massachusetts.

New Hampshire’s Mount Washington overnight recorded a wind chill — a measure of how the combined effect of air and wind feels to the skin — of minus 108 degrees Fahrenheit (-78°Celsius), which appeared to be the lowest ever in the United States. The air temperature at the peak reached minus 47 degrees F (-44 C), with winds gusting near 100 miles per hour (160 kilometers per hour), according to the Mount Washington Observatory.

The high winds brought a tree down onto a car in Southwick, Massachusetts, the Hampden district attorney said in a statement, crushing the vehicle and killing an infant passenger. The driver was transported to a hospital with serious injuries.

In Boston, where officials closed down the public school system on Friday due to the impending freeze, the low temperature hit minus 10 degrees F (-23 C), shattering the day’s record set more than a century ago, the NWS said. In Providence, Rhode Island, the mercury dropped to minus 9 degrees F (-23 C), well below the previous all-time low of minus 2 degrees F (-19 C), set in 1918.

The arctic blast flowing into the United States from eastern Canada brought record lows to Albany, New York; Augusta, Maine; Rochester, New York; and Worcester, Massachusetts, among other places, the NWS said.

The NWS office in Caribou, Maine, said it had gotten reports of “frostquakes” — tremors that feel like earthquakes but are caused by the soil cracking suddenly in the cold — as well as trees splitting open, likely due to sap freezing inside the trunks.

Several cities took emergency measures to aid residents, including opening warming centers and conducting outreach to ensure homeless people were sheltered from the brutal cold.

In Boston, Pine Street Inn, the largest provider of homeless services in New England, doubled the number of vans canvassing the city’s streets on Friday and Saturday, said Barbara Trevisan, a spokeswoman.

“They started going out early this week to warn people that the weather was going to be very extreme,” she said. “The goal last night was just to keep people alive and safe.”

Massachusetts Governor Maura Healey ordered South Station, the city’s main rail terminal, to remain open overnight to serve as an emergency shelter. About 50 to 60 homeless people stayed in the station overnight, Ms. Trevisan estimated.

Many ski areas limited operations due to the temperatures. Jay Peak, a ski mountain in northern Vermont near the Canadian border, closed down entirely on Friday and Saturday, citing the danger to staff and skiers. — Reuters

Take a bow-wow! Meet Bobi, the world’s oldest dog on record

CONQUEIROS, Portugal — When his dog was born three decades ago in a tiny village in central Portugal, Leonel Costa was only eight years old. Little did he know that his beloved Bobi would one day be recorded as the world’s oldest dog.

When Bobi, a purebred Rafeiro do Alentejo, celebrated its 30th birthday last year, Mr. Costa knew he had broken an almost century-old record held by an Australian cattle-dog that died at 29 years and five months in 1939.

Mr. Costa got in touch with the Guinness World of Records, submitted all the paperwork and a year later Bobi was officially named the oldest dog on record.

Bobi was 30 years and 269 days old as of Feb. 4.

“It’s a feeling of pride we can’t explain,” Mr. Costa, 38, told Reuters as he petted Bobi near a church in the village of Conqueiros in central Portugal.

“Some people told us we wouldn’t make it… but we knew Bobi’s age and were sure the exams would only prove what we already knew.”

The Guinness World of Records, which made the announcement on Thursday, described Bobi’s story as “miraculous”.

At the time Bobi was born, Mr. Costa’s family had many animals and little money so his father, a hunter, generally buried newborn puppies rather than keep them. But Bobi hid among a pile of firewood. Costa and his siblings found it a few days later and kept it a secret until the puppy opened its eyes.

“We knew that when he opened his eyes, my parents wouldn’t be able to bury him, “ he said.

Bobi’s breed usually has a life expectancy of 12 to 14 years and Mr. Costa attributed its longevity to a number of factors, including living in calm countryside, never having been chained or kept on a leash and always eating “human food”.

“Of course, our love and affection throughout his life has also helped,” he said, giggling.

Although Bobi still loves walks, age is taking its toll: the dog is less adventurous, its fur is thinning, its eyesight has worsened and it needs to rest more than it used to.

Mr. Costa hopes Bobi has many more years of life and is thankful the dog has put the remote village of Conqueiros on the map.

“There were other animals here who lived long lives but Bobi surpassed everything.” — Reuters

Musk’s Starlink PHL service expected to start in Q1

Elon Musk talks about his company’s Starlink project at the Mobile World Congress, Barcelona, Spain, June 30, 2021. — BRISA PALOMAR / PACIFIC PRESS/SIPA USA VIA REUTERS CONNECT

Starlink, the satellite internet unit of Elon Musk’s SpaceX, is on track to enter the Philippine market this year, with its broadband service to be introduced within the first quarter, its local partner said in a statement on Friday. 

“We are excited to finally introduce Starlink to the Philippine market by Q1 2023,” said Anthony Almeda, vice chairman and chief executive officer of Data Lake, Inc., a Manila-based firm he co-owns with tycoon Henry Sy, Jr.

Mr. Almeda said in a statement the high-speed, low-latency broadband internet service will be “game-changing” for the Southeast Asian archipelago, where broadband coverage is patchy.

In the Philippines, only seven out of every 100 people have fixed broadband subscriptions, lagging behind regional peers like Singapore, Malaysia and Thailand, data from the World Bank shows.

Data Lake said Philippine customers would have to shell out an initial $599 per unit and $99 for monthly connectivity service for a download speed of 200 Mbps. – Reuters

NEDA approves 7 ‘high-impact’ projects

PHILSTAR FILE PHOTO

The National Economic and Development Authority (NEDA) has approved seven “high-impact” projects, ranging from agriculture to transportation, the agency’s top official announced on Friday.

Three of the seven projects, namely the New Dumaguete Airport Development, Mindanao Inclusive Agriculture Development, and the first phase of the Integrated Flood Resilience and Adaptation, will be funded by official development assistance or ODA.

“These projects are expected to significantly contribute to achieving our social and economic transformation goal in the medium term,” NEDA Secretary Arsenio M. Balisacan said during a virtual briefing.

The New Dumaguete Airport Development project covers the construction of an airport facility in Bacong, Negros Oriental. It will be implemented by the Transportation department.

“This project will replace the existing Dumaguete-Sibulan Airport due to physical and operational constraints involving the latter,” Mr. Balisacan said. 

“The New Dumaguete Airport shall enhance the province’s tourism and trade potential, economic activities, and standard of living,” he noted.

The project will cost P17 billion in total, with the Export-Import Bank of Korea-Economic Development Cooperation Fund contributing P13 billion. The remainder will be borne by the Philippine government. 

Meanwhile, the Mindanao Inclusive Agriculture Development project aims to increase agricultural productivity, resilience, and access to markets and services of organized farmers and fisherfolk groups in some ancestral domains in Mindanao.

“It will improve the economic situation of the indigenous peoples in Mindanao and further strengthen the capacity of local government units (LGUs) to implement support programs that address weak market linkages and poor infrastructure in geographically isolated ancestral domains,” Mr. Balisacan said.

The project is expected to cost P6.6 billion. Of the total, the World Bank will provide P5.3 billion, the Department of Agriculture P863 million, and LGUs P461 million.

The NEDA board also confirmed the approval of the first phase of the Integrated Flood Resilience and Adaptation project.

The project hopes to mitigate flood damage, reduce flood risks, and improve climate resilience in the Abra, Ranao, and Tagum-Libuganon river basins in Mindanao.

“The first phase of this flood resilience project will have the following outputs:  the improvement of strategic flood risk management planning; the development of flood protection infrastructure in three target major river basins, and lastly, the strengthening of community-based flood risk management measures,” Mr. Balisacan said.

The project has an estimated cost of P20 billion and will be financed by the Asian Development Bank.

The NEDA also announced changes to the Davao Public Transport Modernization and Metro Rail Transit Line 3 (MRT 3) Rehabilitation projects.

The agency approved the Transportation department’s request for change in scope, increase in cost, and extension of the implementation period for the Davao Public Transport Modernization project.

The project cost was increased to P73.38 million from its initial P18.66 million.

“The project involves delivering a modern, high-priority bus system for Metro Davao, wherein interconnected bus services will be prioritized along 29 routes. The implementation period for this project is extended from 2023 to 2029,” Mr. Balisacan added.

At the same time, the MRT-3 Rehabilitation project was granted approval to change its scope, increase in project cost, extension of implementation period, additional loan, and second loan reallocation. The project cost was increased to P29.6 billion from the original P21.9 billion.

The NEDA also approved the utilization of a P2.1-billion remaining loan from the Japan International Cooperation Agency to improve air transport facilities.

On Thursday, NEDA announced the approval of the University of the Philippines- Philippine General Hospital (UP-PGH) Cancer Center public-private partnership (PPP) project.

It is the Marcos administration’s first approved PPP project. The project will build a P6-billion cancer center.

“To set the record straight, there will be no privatization of PGH services. The government shall own the entire facility and PGH shall continue to operate as a public hospital,” Mr. Balisacan added. – Luisa Maria Jacinta C. Jocson

The future of TV advertising is ‘targeted’ — industry experts

STOCK PHOTO | Image by Mohamed Hassan from Pixabay

Television (TV) advertising is shifting toward addressable TV, a service that allows advertisers to show different ads to different audiences watching the same program, according to experts.

The principle is addressability, said Jona Oboza, country manager for Southeast Asia and Korea at Pubmatic, a digital advertising technology provider.

“When we’re trying to deliver a message through a device or browser to an individual, it has to have that ability to deliver a personalized message,” she said in a panel discussion at the Feb. 2 launch of Finecast, an addressable TV solution.

Finecast provides access to the entire addressable TV system, according to Kathryn Domingo, Finecast’s director in the Philippines.

“[It] coordinates the distribution and frequency across all broadcasters and screens to reach relevant audiences no matter where they are viewing,” Ms. Domingo said.

EVOLVING CONSUMER BEHAVIOR

The traditional definition of primetime, which refers to TV shows slated between 8-10 p.m., is blurring, said Vinchi Sy-Quia, deputy country head of PCCW-OTT Philippines, which provides video streaming services.

He shared at the forum that when PCCW-OTT had a simulcast of a Korean drama,  “we saw a blip on our platform at 3 a.m., the time the Korean drama dropped.”

“People were waiting for the episode to drop, then they would wake up early [to] watch it,” he added.

“Today, all day is primetime, especially when you’re work-from-home and you got that flexibility,” Mr. Sy-Quia said. “Those peaks and valleys you used to see throughout the time of day, it’s narrowing now.”

Audience behavior has changed, agreed Eugenio Manuel “Jamie” G. Lopez IV, head of digital services at ABS-CBN.

“One of the things that’s happening is that it’s becoming more mobile-centric,” he noted.

“We also have to look at virtual viewing,” he added. “A lot of content is being consumed via portrait. You have the likes of TikTok, Reels, Shorts… It’s really exciting to see what’s going to happen next. How are the content producers going to evolve? How is consumption going to evolve?”

Southeast Asian brands that have used the power of storytelling through TV “have enjoyed high performance and profitable gains,” said Brett Poole, Finecast’s chief executive officer for the Asia-Pacific region.

“As the media ecosystem continues to evolve,” Mr. Poole noted, “TV ads continue to wield the greatest influence in generating the most positive brand impressions.” – Patricia B. Mirasol

Diokno prefers better tax administration over luxury tax

PHILSTAR FILE PHOTO

By Luisa Maria Jacinta C. Jocson, Reporter

The Finance chief on Friday said he would rather improve tax administration to generate more revenues than impose luxury taxes.

“We will look at the proposals. Right now, I’m happy with the current tax system. It’s not perfect, it can be improved, but we will be concentrated on better tax administration,” Finance Secretary Benjamin E. Diokno told reporters.

“In fact, our debt-to-gross domestic product (GDP) ratio is 60.9%, and that’s basically because of better tax collection, appreciation of the peso and higher GDP,” he added.

Albay Rep. Jose Ma. Clemente S. Salceda recently filed House Bill No. 6993, which proposes a 25% tax on luxury or non-essential goods.

Under the proposed measure, non-essential goods include jewelry, whether real or imitation, perfume and eau de toilette, yachts, wristwatches, bags, wallets, and belts worth more than P50,000; residential property worth more than P100,000 per square meter; and alcoholic and non-alcoholic beverages worth more than P20,000 per liter.

At the same time, the bill seeks to tax paintings, antiques, secondhand automobiles, and private planes.

If enacted into law, the government is seen to raise up to P15.50 billion a year.

According to Mr. Diokno, the government is also looking into a value-added tax refund program for foreign tourists.

“Right now, we’re trying to find out the most favorable modality, or the global practice. I think it’s the third parties that usually take care of the refunds,” he said.

Malacañang previously said that President Ferdinand R. Marcos, Jr. would likely issue an executive order to implement the tax refund program. It is expected to take effect next year.

Mr. Diokno also said that the government is considering issuing more foreign currency bonds, particularly dollar- and euro-denominated bonds.

“There is demand for dollar and euro-denominated bonds. We will accelerate the process… [because] there is really strong interest,” he said, adding that another dollar-bond issuance may happen in the latter part of the first quarter or early second quarter.

The Philippine government raised $3 billion from its dollar bond issuance in January.

The Bureau of the Treasury is scheduled to offer peso-denominated fixed-rate retail treasury bonds (RTBs) on Tuesday. The bonds, which have a tenor of 5.5 years, aim to raise P30 billion.

Mr. Diokno expects the RTB auction to be “well-received.”

“I think the rates are kind of coming down because of renewed confidence. Let’s see what the market will bear. We floated, the most recent was the $3 billion, that was well received, many times over. We expect the same,” he added.

With regards to the controversial Maharlika Investment Fund (MIF), Mr. Diokno said that corporations providing capital should not be required to change their charter.

“I have an objection to the proposal to tap dividends from some corporations; it will require changing their charter,” he said.

The latest version of the proposed MIF will secure funds from government-owned and -controlled corporations or GOCCs. An earlier version of the bill drew funding from pension funds.

People under domestic violence orders can own guns, says US appeals court

STOCK PHOTO | Shooting gun photo created by senivpetro - www.freepik.com

A United States (US) appeals court on Thursday declared unconstitutional a federal law making it a crime for people under domestic violence restraining orders to own firearms.

The decision by a three-judge panel of the 5th US Circuit Court of Appeals is the latest victory for gun rights advocates since a Supreme Court ruling last June granting a broad right for people to carry firearms outside the home.

That ruling, New York State Rifle & Pistol Association v. Bruen, announced a new test for assessing firearms laws, saying restrictions must be “consistent with this nation’s historical tradition of firearm regulation,” and not simply advance an important government interest.

In Thursday’s decision, Circuit Judge Cory Wilson said banning people under domestic violence restraining orders from owning firearms “embodies salutary policy goals meant to protect vulnerable people in our society.”

But the judge, appointed by Donald Trump, said the Bruen ruling made such a consideration irrelevant, and that from a historical perspective the ban was “an outlier that our ancestors would never have accepted.”

The court threw out the guilty plea and six-year prison sentence for Zackey Rahimi, who admitted to possessing guns found in his Kennedale, Texas, home after prosecutors said he participated in five shootings in Dec. 2020 and Jan. 2021.

Rahimi had been under a restraining order since Feb. 2020, following his alleged assault of a former girlfriend.

A federal public defender representing Rahimi did not immediately respond to requests for comment.

US Attorney General Merrick Garland, in a written statement disagreed with the 5th Circuit’s ruling and said the Biden administration would appeal.

“Whether analyzed through the lens of Supreme Court precedent, or of the text, history, and tradition of the Second Amendment, that statute is constitutional,” Garland said. “Accordingly, the Department will seek further review of the Fifth Circuit’s contrary decision.”

The 5th Circuit is based in New Orleans, and its decision applies in Texas, Louisiana and Mississippi.

It had upheld the federal law last June 8, just over two weeks before the Bruen decision, but withdrew its opinion and ordered additional briefing. — Reuters

China to fully resume travel with Hong Kong, Macau on Feb. 6

A woman walks past Drum Tower during morning rush hour as Beijing, China, is hit by a sandstorm, March 15, 2021. — REUTERS

By Farah Master and Twinnie Siu

HONG KONG – China said on Friday that cross border travel between the mainland, Hong Kong and Macau would fully resume from Feb. 6, dropping existing quotas and scrapping a mandatory coronavirus (COVID) test that was required before traveling.

Group tours between China and its two special administrative regions of Hong Kong and Macau would resume, while the number of customs checkpoints open will return to pre-pandemic levels, China’s Hong Kong and Macau Affairs Office said in a statement on its website.

Even after China reopened its borders to the world on Jan. 8, a quota system and COVID testing requirement remained for travelers between the mainland and Hong Kong.

The three border checkpoints that have not yet reopened will do so from Feb. 6, Hong Kong’s leader John Lee said at a press conference on Friday.

Hong Kong will also scrap a COVID vaccination requirement to enter Hong Kong for all arrivals, including non-Hong Kong residents, Lee added.

Searches on Chinese travel website Qunar for roundtrip air tickets to and from Hong Kong and the mainland increased seven-fold on Friday after China’s announcement, data from state media China Transportation News showed.

China’s announcement came a day after Hong Kong launched a promotion campaign including 500,000 free flights to lure back visitors, businesses and investors to the financial hub after more than three years of tough COVID curbs.

Hong Kong was largely sealed off behind closed borders for much of the past three years in a bid to ward off COVID, with mandatory quarantine of up to three weeks for people arriving as well as intensive testing and screening.

The former British colony closely followed China’s zero-COVID policy until the middle of 2022 when it began to gradually unwind its rules.

Hong Kong dropped most of its remaining COVID rules in December, but mask-wearing remains mandatory unless exercising, and students must take daily rapid antigen tests. – Reuters

Canada monitoring potential second suspected spy balloon incident

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

CANADA’S DEFENSE ministry on Thursday said it detected a “high-altitude surveillance balloon” and was monitoring a “potential second incident” after United States (US) officials said a Chinese spy balloon was found lingering over the western US state of Montana.

“A high-altitude surveillance balloon was detected and its movements are being actively tracked by NORAD (North American Aerospace Defense Command),” it said in a statement, without giving further details.

“Canadians are safe and Canada is taking steps to ensure the security of its airspace, including the monitoring of a potential second Incident,” it added.

The defense ministry said it was in frequent contact with the US. – Reuters

Asian stocks pull back, dollar regains footing ahead of US payrolls data

STOCK PHOTO | Image by Yibei Geng from Unsplash

By Stella Qiu

SYDNEY – Asian shares turned lower and the dollar regained some of its footing on Friday, as disappointing earnings from US tech giants undermined sentiment ahead of a key US non-farm payrolls report.

Overnight, markets sensed the end of the massive global tightening cycle, after policymakers in Britain and Europe signaled their intention to pause, sending local bonds rallying and currencies lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.5% on Friday, dragged down by a 0.9% slump in Chinese bluechips and a 1.2% tumble in Hong Kong’s Hang Seng index.

Japan’s Nikkei outperformed, rising 0.6%.

Disappointment over earnings results from Google, Apple and Amazon tempered sentiment.

S&P 500 futures slid 0.5% and Nasdaq futures fell 1.4% on Friday.

Tech shares took a beating in Thursday’s after-hours trading, with shares of Apple, Amazon and Google parent Alphabet all tumbling.

That took the shine off a strong regular trading session on Thursday, when the S&P climbed 1.5% and the Nasdaq surged 3.3%. The uptick built on strong gains from the previous day after the Federal Reserve Chair Jerome Powell said disinflationary pressures are underway in the economy, raising hopes of an imminent pause to its monetary tightening streak.

Apple projected another revenue decline in the start of the year, Amazon warned that its operating profit could fall to zero in the current quarter, and Google parent Alphabet missed expectations in its fourth-quarter profit and revenue.

Investors are also watching the fallout from this week’s plunge in shares of India’s Adani group, after market losses amounted to more than $100 billion in the wake of a US short-seller’s report.

On Thursday, the European Central bank (ECB) and Bank of England (BoE) hiked rates by 50 basis points each, with the BoE saying the tide was turning against inflation and the ECB indicating at least one more hike was on the horizon before re-evaluating its rate hike path.

Markets reacted by pushing European yields sharply lower, with the ten-year German bunds falling 22.6 basis points to 2.065%, the biggest drop since 2011, and Italian bonds tumbling 40 bps to 3.887%, the most since 2020, on hopes that the tightening from ECB will end soon.

“The wash-up is that the BoE meeting was dovish, and the ECB is now firmly open-minded and data-dependent, and the Fed chose not to fight the market and the market feels validated by that,” said Chris Weston, head of research at Pepperstone.

Alan Ruskin, macro strategist at Deutsche Bank, said given the current market price action ahead of the US payrolls data, a softer report would be regarded as endorsing all the favorite trades of the year.

“Not least it would provide the most important evidence to date to suggest that the market’s rates pricing is more appropriate than the Fed’s own more hawkish signaling,” said Ruskin.

Analysts expect 185,000 jobs were added last month, the lowest since January 2021, unemployment edged up to 3.6%, and hourly wage inflation to stay flat at 0.3% on a monthly basis, suggesting the strong labor market might have started to ease up.

Futures markets still favor another 25-basis-point hike from the Fed at its March policy meeting, while implying that

might be the end of its current tightening cycle. They have also

priced in one rate cut by the end of this year.

In the currency markets, the euro extended losses to $1.0891, pulling further away from the ten-month top of $1.1033 touched on Thursday.

The sterling fell to $1.2206 on Friday, the lowest in more than two weeks, after tumbling 1.2% the previous session.

That helped the US dollar to recoup most of its post-Fed losses, with the dollar index now standing at 101.81, away from its nine-month low of 100.80.

Treasury yields held largely steady. The yield on benchmark 10-year Treasury notes eased two basis points to 3.3799%, while the two-year yield, which rises with traders’ expectations of higher Fed fund rates, was mostly flat at 4.0959%.

In the oil market, Brent crude futures rose 0.3% to $82.41 while US West Texas Intermediate (WTI) crude also settled up 0.3%, at $76.09.

Gold was slightly higher. Spot gold was traded at $1916.1 per ounce. – Reuters

Philippines eyes at least P30 billion via new retail bond offer

BW FILE PHOTO

THE PHILIPPINES will launch next week an offer of peso-denominated retail bonds due 2028, seeking to raise P30 billion ($556.79 million) initially at a rate-setting auction on Feb. 7, the Bureau of the Treasury said.

The offer includes a swap option for holders of some bonds maturing this year, it said in a notice on its website.

The public offer period runs from Feb. 7 until Feb. 17.

The government last offered peso retail bonds in September, raising P420.45 billion pesos, the first such issue under the administration of President Ferdinand R. Marcos, Jr.

The 5.5-year bonds will be available to retail investors at a minimum amount of 5,000 pesos. – Reuters

PHL ends 2022 with P13.42-T debt

BW FILE PHOTO

By Luisa Maria Jacinta C. Jocson, Reporter

THE NATIONAL Government’s outstanding debt stood at P13.42 trillion at the end of 2022, easing from the previous month’s record high and helped in part by the peso appreciation against the US dollar, the Bureau of the Treasury (BTr) said on Thursday.

In a statement, the BTr said P13.42-trillion outstanding debt was lower by 1.7% or P225.31 billion than the record-high P13.64 trillion at end-November due to the peso’s strength and net redemption of local government securities.

This was also below the government’s P13.43-trillion program for the year.

National Government outstanding debt

Full-year debt increased by P1.69 trillion or 14.4% from P11.73 trillion at the end of 2021.

The BTr said the latest debt stock was 60.9% of the country’s gross domestic product (GDP) as of end-December, improving from the 63.7% debt-to-GDP ratio as of end-September.

This was lower than the 61.8% target under the medium-term fiscal framework, but still above the 60% threshold considered manageable by multilateral lenders for developing economies.

“This reflects the consistent drive to bolster debt sustainability through prudent cash and debt management backed by resurgent economic growth,” the BTr said.

The government aims to cut the debt-to-GDP ratio to less than 60% by 2025, and to 51.5% by 2028.

“Our medium-term fiscal plan and exemplary GDP growth have allowed us to outpace our borrowings. This gives us confidence that we can reach our targets by 2025,” Finance Secretary Benjamin E. Diokno said in a statement.

The Philippine economy expanded by 7.6% last year, surpassing the government’s 6.5-7.5% goal. It was also the fastest growth since 1976.

“Better-than-expected GDP for 2022 also pushed down the debt ratio. We think that as long as we have a credible fiscal program and GDP remains robust, the debt ratio will continue to slowly go down. By this we mean being faithful to deficit targets,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.

PESO APPRECIATION
Analysts said the stronger local currency against the US dollar had helped lower the debt level.

“We were expecting that the appreciation of the peso would really help toward the end of the year especially with outstanding debt,” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. said in a Viber message.

At the end of 2022, 68.62% of the total outstanding debt was from domestic sources, while the rest came from foreign creditors.

Domestic debt slipped by 2.3% to P9.21 trillion as of end-December from the P9.43 trillion in November. Year on year, it was up by 12.7%.

“The lower level of domestic debt was due to the net redemption of government securities amounting to P217.95 billion,” the BTr said. “Moreover, local currency appreciation against the US dollar trimmed P1.63 billion from the peso value of foreign currency denominated domestic debt.”

As of end-December, the peso strengthened by 1.4% to P55.815 against the dollar from its close of P56.598 at the end of November, based on figures from the BTr.

The government prefers to borrow from local sources to mitigate foreign currency risk.

Meanwhile, foreign debt dipped by 0.1% to P4.21 trillion as of end-December, from P4.22 trillion in the previous month. Year on year, foreign debt jumped by 18.3%.

External debt consisted of P1.88 trillion in loans and P2.33 trillion in global bonds.

The BTr said foreign debt was lower than the end-November level due adjustments on foreign currency debt valuation.

“This offset the net impact of third-currency fluctuations against the US dollar amounting to P34.07 billion and the P18.54-billion net availment of foreign loans,” it added.

The government’s guaranteed obligations went up by 2.8% month on month to P399.05 billion. Year on year, it declined by 5.9%.

“For the month, the net availment of domestic guarantees added P26.19 billion while the net effect of currency fluctuations increased the value of external guarantees by P1.58 billion. This was tempered by net repayments on external guarantees amounting to P16.72 billion,” the BTr added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the Philippines’ global bond issuance in January, which raised $3 billion (P162 billion), “could add to the National Government’s outstanding debt stock.”

Analysts said the government would need to prepare for the impact of a potential global recession on the economy.

“Global headwinds (are) expected to be more pronounced toward the middle of 2023, a stronger fiscal support may be needed and that may put pressure on higher fiscal requirements,” Mr. Asuncion said.

“The government would need to anticipate and be able to buffer the economy from external challenges and along the way secure economic growth for the year,” he added.

Ms. Velasquez said the government should raise revenues by implementing progressive taxation.

“Luxury taxes will help. We hope to see more initiatives in the next few years. Additionally, administrative efforts to improve tax collection should also increase tax efficiency,” she added.

Mr. Ricafort said tax and fiscal reform measures should raise revenue collections, and help further bring down the debt-to-GDP ratio.

“Faster economic growth, together with tax and other fiscal reform measures to further structurally increase tax revenue collections and combined with more disciplined spending would help further reduce the debt-to-GDP ratio to below the 60% international threshold to help sustain the country’s favorable credit ratings,” he said in a Viber message.

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