Musk takes 9% stake in Twitter to become top shareholder, starts poll on edit button

April 5, 2022 | 1:08 pm

Tesla Inc TSLA.O boss Elon Musk on Monday disclosed a 9.2% stake in Twitter Inc TWTR.N, worth nearly $3 billion, making him the micro-blogging site’s largest shareholder and triggering a rise of more than 27% in the company’s shares.

Musk‘s move, revealed in a regulatory filing, comes on the heels of his tweet that he was giving “serious thought” to building a new social media platform, while questioning Twitter‘s commitment to free speech.

He also started a poll asking Twitter users if they want an edit button, a long-awaited feature on which the social media platform has been working. It was followed by Chief Executive Parag Agrawal urging users to “vote carefully”.

In less than three hours of starting the poll, more than 1.2 million users voted, with over 75% of them backing an edit option.

Last week, in another poll, Musk had asked if Twitter alogrithm should be open source. More than 82% of the users said yes, while former CEO Jack Dorsey said, “the choice of which algorithm to use (or not) should be open to everyone.”

A prolific Twitter user, Musk has over 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in hot water with regulators.

Of late, however, the world’s richest person has been critical of the social media platform and its policies, and recently ran a Twitter poll asking users if they believed the platform adheres to the principle of free speech, to which over 70% voted “no.” Read full story

In December, Musk put out a meme that compared CEO Agrawal with Soviet dictator Joseph Stalin and showed Jack Dorsey as a close associate who was later on executed.

Twitter‘s latest quarterly results and lower-than-expected user additions have raised doubts about its growth prospects, even as it pursues big projects such as audio chat rooms and newsletters to end long-running stagnation.

“It does send a message to Twitter … having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake,” said Thomas Hayes, managing member at Great Hill Capital LLC.

Musk – who, according to Forbes, has a net worth of about $300 billion – has been reducing his stake in Tesla since November, when he said he would offload 10% of his holding in the electric-car maker. He has already sold $16.4 billion worth of shares since then.

A regulatory filing on Monday showed that Musk owns 73.5 million Twitter shares, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee. Vanguard is Twitter‘s second-biggest shareholder, with an 8.79% stake, according to Refinitiv data.

Twitter shares rose 27.1% on Monday to close at $49.97. The stock, which had fallen 38% in the past 12 months through Friday’s close, on Monday added as much as $8.38 billion to its market capitalization, which now stands at $39.3 billion.

BUYOUT?

“Musk‘s actual investment is a very small percentage of his wealth and an all-out buyout should not be ruled out,” CFRA Research analyst Angelo Zino wrote in a client note.

The stake in Twitter is more likely to result in positive outcomes for shareholders than negative ones, said Ryan Jacob, chief executive officer of Jacob Asset Management, who said Twitter is one of the fund’s largest holdings.

“If (Musk) decides to take an active position and Twitter goes private, it will probably be at a higher price than it is now,” he said. “If it gets other companies interested (in acquiring Twitter), it’ll probably be at a higher price than right now.”

Musk has previously made early-stage investments in companies, including online payment processor Stripe Inc and artificial intelligence firm Vicarious.

He is also the founder and chief executive officer of SpaceX, and leads brain-chip startup Neuralink and infrastructure firm the Boring Company.

Twitter was the target of activist investor Elliott Management Corp in 2020, when the hedge fund argued the social networking company’s then-boss and co-founder, Jack Dorsey, was paying too little attention to Twitter while also running what was then called Square Inc SQ.N.

Dorsey, who owns a stake of more than 2% in Twitter, stepped down as CEO and chairman in November last year, handing the reins to company veteran Parag Agrawal.

Meanwhile, Musk and Dorsey have found some common ground in dismissing the so-called Web3, a vague term for a utopian version of the internet that is decentralized. Read full story – Reuters

U.S., Europe plan Russia sanctions as Ukraine warns of more civilian deaths

April 5, 2022 | 1:02 pm

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

LVIV, Ukraine – The United States and Europe were planning new sanctions on Tuesday to punish Moscow over civilian killings in Ukraine, and President Volodymyr Zelenskiy warned more deaths were likely to be uncovered in areas seized from Russian invaders.

Russian forces withdrew from towns north of the capital Kyiv last week as it turns its assault to Ukraine‘s south and east. Ukrainian troops recaptured towns devastated by nearly six weeks of war, including Bucha, where dead civilians lined the streets.

Searing images of a mass grave in Bucha and the bound bodies of people shot at close range drew an international outcry on Monday.

U.S. President Joe Biden called for a war crimes trial against Russia’s President Vladimir Putin and the United States will ask the U.N. General Assembly to suspend Russia from the Human Rights Council. Read full story

Russia denied any accusations related to the murder of civilians and said it would present “empirical evidence” to a meeting of the United Nations Security Council on Tuesday proving its forces were not involved. Read full story

In an early morning video address, Zelenskiy said he would also address the Security Council on Tuesday as he builds support for an investigation into the killings in Bucha.

“And this is only one town. One of many Ukrainian communities which the Russian forces managed to capture,” Zelenskiy said. “Now, there is information that in Borodyanka and some other liberated Ukrainian towns, the number of casualties of the occupiers may be even much higher,” he added, referring to a town 25 km (16 miles) west of Bucha. Read full story

Reuters saw several bodies apparently shot at close range, along with makeshift burials and a mass grave in Bucha, but could not independently verify the number of dead or who was responsible.

Ukraine‘s foreign minister, Dmytro Kuleba, said he spoke with U.N. Secretary-General Antonio Guterres about Bucha and stressed “that Ukraine will use all available UN mechanisms to collect evidence and hold Russian war criminals to account.” Read full story

Kuleba also spoke with his Chinese counterpart Wang Yi in a phone call on Monday, with Beijing again calling for talks to end the conflict in Ukraine. Read full story

The call, which Beijing said was made at Ukraine‘s request, was the first reported high-level conversation between the countries since March 1, when Kuleba asked Beijing to use its ties with Moscow to stop Russia’s invasion, the Ukrainian foreign ministry said at the time.

‘FEEL THE CONSEQUENCES’

Russia launched what it calls a “special military operation” in Ukraine on Feb. 24, aiming to demilitarize and “denazify” Ukraine. Ukraine and the West say the invasion was illegal and unjustified.

Russian forces pulled back from the capital Kyiv in the face of unexpectedly lethal and mobile Ukrainian resistance using Western anti-tank weaponry.

Moscow painted the withdrawal as a goodwill gesture at peace talks, which last convened on Friday. Negotiators had been due to convene on Monday, but neither side has given an update on the talks.

German Chancellor Olaf Scholz said on Monday that Putin and his supporters would “feel the consequences” of events in Bucha and that Western allies would agree further sanctions against Moscow in the coming days.

Biden’s national security adviser, Jake Sullivan, said new U.S. sanctions against Moscow would be announced this week. The U.S. State Department said it was supporting an international team of prosecutors and experts to collect and analyze evidence of atrocities. Read full story

France and Germany said they would expel Russian diplomats.

Russia would respond in kind and “slam shut the door on Western embassies”, Russian ex-president and deputy head of security council Dmitry Medvedev said.

“It will be cheaper for everyone. And then we will end up just looking at each other in no other way than through gunsights.”

German Defence Minister Christine Lambrecht said the European Union must discuss banning Russian gas, though other officials urged caution around measures that could touch off a European energy crisis.

Russia supplies about a third of Europe‘s gas, and Putin has tried to use energy as a lever to fight back against Western sanctions. But Moscow has maintained gas flows through key pipeline routes into Europe, despite uncertainty over Putin’s demands for payments in roubles. Read full story

The United States stopped the Russian government from paying holders of its sovereign debt more than $600 million from reserves held at American banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of U.S. dollars. Read full story

BATTLES IN THE EAST

Ukraine said it was preparing for about 60,000 Russian reservists to be called in to reinforce Moscow’s offensive in the east, where Russia’s main targets have included the port of Mariupol and Kharkiv, the country’s second-largest city.

Ukraine‘s general staff said Russian forces aimed to fully take over the Donetsk and Luhansk provinces claimed by Russian-backed separatists and encircle a group of Ukrainian forces.

“Russian troops have attacked Mykolayiv with cluster munitions banned by the Geneva convention. Whole blocks of civilian buildings have come under fire, in particular, a children’s hospital. There are dead and wounded, including children,” the general staff said in a daily update on Tuesday.

Reuters could not independently verify the claims.

In Mariupol, a southeastern town on the Azov Sea that has been under siege for weeks, Reuters images showed three bodies in civilian clothes lying in the street, one against a wall sprayed with blood.

A team from the International Committee of the Red Cross (ICRC) was stopped during an attempt to reach Mariupol to evacuate civilians, and is now being held in a nearby town, a spokesperson said on Monday. Read full story

West of Mariupol, in the town of Mykolaiv, shelling on Monday killed 10 people, including a child, and injured 46 others, regional administration head Oleksandr Senkevich said. Reuters was not immediately able to verify the report. – Reuters

West Africa faces historic food crisis driven by conflict, price surge

April 5, 2022 | 12:58 pm

DAKAR – West Africa is facing its worst food crisis on record driven by conflict, drought, and the impact of the war in Ukraine on food prices and availability, aid agencies said on Tuesday.

There are about 27 million people suffering from hunger in the region and that number could rise to 38 million by June, a 40% increase from last year and a historic high, said 11 international aid organizations in a joint statement.

Large swathes of West Africa, including parts of Burkina Faso, Mali, Niger and Nigeria, are facing Islamist insurgencies that have forced millions of people off their land. Along with Chad, those are the countries most affected by hunger.

The region has also seen worsening floods and droughts due to the effects of climate change, making it harder to farm. Cereal production in 2021/22 was down 39% year-on-year in Niger and 15% in Mali, according to West Africa‘s Food Crisis Prevention Network.

On top of that, global food prices have surged and trade has been disrupted due to Russia’s invasion of Ukraine. Border closures due to COVID-19 have also had a negative impact, the Food Crisis Prevention Network said.

“What is new and worsening is mainly all the displaced people and abandoned land because of conflict, but also we are witnessing new drivers,” said Assalama Dawalack Sidi, Oxfam’s regional director for West and Central Africa.

Six West African countries import 30-50% of their wheat from Russia and Ukraine, according to the United Nations Food and Agriculture Organization (FAO).

The Ukraine war also risks redirecting much-needed funding from the region, Sidi warned.

“Many donors have already indicated that they may cut funding for Africa to pay for refugees in Europe,” she said. – Reuters

World Bank cuts East Asia’s 2022 GDP forecast on Ukraine war

April 5, 2022 | 11:33 am

MANILA – The World Bank cut its growth forecast for East Asia and the Pacific for 2022 to reflect the economic impact of Russia’s invasion of Ukraine, warning the region could lose further momentum if conditions worsen.

The Washington-based lender said in a report on Tuesday it expected 2022 growth in the developing East Asia and Pacific (EAP) region, which includes China, to expand 5.0% percent, lower than its 5.4% forecast in October.

But growth could slow to 4.0% if conditions worsened and government policy responses were weaker, World Bank said.

China’s economy is expected to grow 5.0% this year, down from a previous estimate of 5.4%, it said, noting its government’s capacity to provide stimulus to offset adverse shocks.

“The region confronts a triad of shocks which threaten to undermine its growth momentum,” said World Bank East Asia and Pacific Chief Economist Aaditya Mattoo.

The war between Russia and Ukraine, which Mattoo said was the “most serious risk” to the region’s growth outlook, is leading to food and fuel price increases, financial volatility and reduced confidence all over the world.

Mattoo said Russia’s invasion of Ukraine was more worrying given that the region was still contending with the effects of the COVID-19 pandemic, a structural slowdown in China and faster inflation that could prompt quicker U.S. monetary tightening.

The war’s impact on economies in East Asia and the Pacific would vary depending on their exposure and resilience, Mattoo said. Excluding China, output in the rest of the region is projected to expand 4.8% this year.

“Just as the economies of East Asia and the Pacific were recovering from the pandemic-induced shock, the war in Ukraine is weighing on growth momentum,” World Bank Vice President for East Asia and Pacific Manuela Ferro said in a statement.

“The region’s largely strong fundamentals and sound policies should help it weather these storms.” — Reuters

Inflation quickens to 6-month high in March

April 5, 2022 | 10:53 am

Prices of widely used goods rose to a six-month high in March as food, utilities, and transport costs increased amid a spike in global oil prices brought by Russia’s invasion of Ukraine.

Preliminary data from the Philippine Statistics Authority (PSA) showed annual headline inflation at 4% last month, faster than the 3% in February’s 3% but slightly slower than the 4.1% print in March last year.

This matched the 4% print in October last year and the fastest since the 4.2% inflation in September 2021.

It also matched the 4% median in a BusinessWorld poll conducted last week, and near the upper bound of the 3.3-4.1% forecast of Bangko Sentral ng Pilipinas (BSP) for March.

Month on month, it picked up 0.6%.

For the first quarter, inflation settled at 3.4%, within the 2-4% of the central bank’s inflation target this year.

Inflation of heavily weighted food and non-alcoholic beverages picked up to 2.6% in March from 1.2% in February.

Housing, water, electricity, gas and other fuels rose to 6.2% from 4.8%, while transport quickened to 10.3% from 8.8%.

Meanwhile, the February inflation rate for the bottom 30% of households, which is still using the 2012-based prices, picked up to 3.3% last month from 2.7% in February, but lower than 5.5% in March 2021.

Year to date, inflation as experienced by poor households settled at 3%.

The PSA said the rebased 2018-based inflation for bottom 30% income households is scheduled to be released in December 2022. — Bernadette Therese M. Gadon

Metrobank announces notice of annual stockholders’ meeting

April 5, 2022 | 9:00 am

Metropolitan Bank & Trust Co. (Metrobank) will virtually hold its 2022 Annual Stockholders’ Meeting on Wednesday, April 27, 2022 at 2PM via Cisco Webex.

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.

Filinvest Development Corp. to hold annual stockholders’ meeting virtually on April 29

April 5, 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.

Semirara Mining and Power Corp. to hold annual stockholders’ meeting via remote communication on May 2

April 5, 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.

SM Investments Corp. sets schedule of annual stockholders’ meeting on April 27

April 5, 2022 | 7:59 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.

Rules for economic reform laws sought

April 5, 2022 | 12:33 am

Airplanes are seen on the runway at the Ninoy Aquino International Airport, March 20. — PHILIPPINE STAR/ MICHAEL VARCAS

By Revin Mikhael D. Ochave, Reporter

FOREIGN business chambers are pressing the government to immediately issue the implementing rules and regulations (IRR) of recently signed laws amending the Public Service Act (PSA) and Foreign Investment Act (FIA) before President Rodrigo R. Duterte steps down from office by end June.

“Consistent with the aim of Executive Order 166, which adopts the Economic Development Cluster’s 10-point policy agenda for pandemic recovery, to speed up and sustain the country’s recovery from the coronavirus disease 2019 (COVID-19) pandemic, we call on relevant government agencies to ensure that the IRRs on Republic Act (RA) 11659 and RA 11647 are also issued, with sufficient stakeholder consultation, before the end of the current administration,” members of the Joint Foreign Chambers (JFC) said in a statement on Monday.

Mr. Duterte last month signed RA 11659, which amends the 85-year-old Commonwealth Act No. 146, or the PSA Act, easing restrictions on full foreign ownership of businesses in key sectors such as telecommunications, shipping, airlines, railways and subways.

He also signed into law RA 11647, which amends the Foreign Investment Act in order to make the Philippines more attractive to foreign investors.

“We share this administration’s thrust to propel the country’s economic recovery post pandemic through the enactment of game-changing economic liberalization laws,” JFC said. “Prompt issuance of IRRs for these laws would hasten the realization of gains expected from the passage of these liberalization laws, to the benefit of the public.”

Foreign business groups have been pushing for the passage of these measures, along with RA 11595 or the amendments to the Retail Trade Liberalization Act, to attract foreign capital needed to drive Philippine economic recovery from the coronavirus pandemic. The rules enforcing it were released last month.

Foreign chambers said the Philippines would benefit from the capital, technology and increased competition that come with these economic reform measures, adding that this would bring more jobs and better products and services.

“The members of the JFC express strong support for the full implementation of these new laws and pledge our efforts to bring the reforms to the attention of appropriate firms in our member countries in the United States, Australia-New Zealand, Canada, Korea, Japan, and Europe and encourage these firms to invest in the Philippines,” they said.

John D. Forbes, American Chamber of Commerce of the Philippines, Inc. senior adviser, said in a Viber message the group is waiting for public consultations on the implementing rules.

“We appreciate being invited to comment on the draft implementing rules and regulations, which is a good universal practice in all countries, to obtain views of the private sector before new rules become final. During these public consultations, we often make suggestions. When the IRRs are final, we can better propagate the new reforms abroad to potential investors,” Mr. Forbes said.

Lars Wittig, European Chamber of Commerce of the Philippines president, said in Viber message the group is hoping the rules would follow “the spirit of the law” and that there “will be no bureaucratic or other layers to complicate and discourage foreign direct investments in the Philippines.”

“We look forward to the business community and other relevant stakeholders participating in the consultations of the implementing rules and regulations to ensure that all possible inputs are taken into consideration as the measures are implemented,” he added.

In a Viber message, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the National Economic and Development Authority (NEDA) would be the lead agency in drafting the rules.

“We will announce (the start of the consultations) when available,” Mr. Chua said, without giving details.

The amended Public Service Act allows 100% foreign ownership will be allowed in key sectors such as telecommunications, airlines, railways and shipping, which were previously covered by the 40% foreign ownership limit set by the Constitution.

Changes to the Foreign Investment Act allow international investors to set up and fully own domestic enterprises, including micro, small and medium enterprises in the country.

Foreign nationals can now set up these companies with a minimum paid-in capital of $100,000, provided they meet certain conditions.

The JFC statement was signed by the American Chamber of Commerce of the Philippines, Australian-New Zealand Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce & Industry of the Philippines, Korean Chamber of Commerce of the Philippines and Philippine Association of Multinational Companies Regional Headquarters, Inc.

BoC exceeds March collection goal by 23%

April 5, 2022 | 12:32 am

The Bureau of Customs and the National Bureau of Investigation-Special Action Unit raided a warehouse filled with illegally imported red and yellow onions and other agricultural products in Punturin, Valenzuela City, March 11. — BUREAU OF CUSTOMS

THE BUREAU of Customs (BoC) on Monday said it collected a record P70.72 billion in March, mainly due to higher imports and improved valuation.

In a statement, it said it exceeded the monthly collection target of P57.69 billion by 23%.

“The BoC posted a surplus of P13.037 billion or 22.6% higher than its target, and remarkably, the bureau has consistently met and exceeded its monthly revenue collection target since January this year,” it said.

The March collection was also 29% higher than P54.5-billion in March 2021.

Citing a preliminary report from the BoC-Financial Service, the bureau said 14 of the 17 collection districts hit their monthly targets.

These were the ports of San Fernando, Manila, Batangas, Iloilo, Cebu, Cagayan de Oro, Zamboanga, Davao, Subic, Clark, Aparri, and Limay, as well as the Manila International Container Port (MICP) and Ninoy Aquino International Airport (NAIA).

For the first three months of 2022, the BoC collected P188.506 billion, making up nearly 27.8% of the 2022 collection target of P679.226 billion.

The bureau attributed its strong revenue collections to the “improving volume of importation in the country, the improved valuation, and the intensified collective efforts of all the collection districts.”

The Department of Finance (DoF) earlier said in a statement modernization programs and automated processes were behind increased collections by the Customs bureau.

The BoC modernization program integrated data from the ports of Manila, Cebu and Davao and the MICP for monitoring by the Customs Operation Center (COC), Customs Commissioner Rey Leonardo B. Guerrero said in the statement.

He cited BoC initiatives included the cargo targeting system and information and communications technology-enabled projects that have automated the submission, processing and approval of applications by importers and exporters.

The BoC plans to roll out a day-and-night payment system for exporters to speed up the release of goods being delayed by the limited hours of operations. The payment system only runs from 8 a.m. to 5 p.m., Mr. Guerrero said.

In 2021, the BoC collection reached P645.77 billion, 4.7% higher than its full-year goal of P616.75 billion. This was also 20% higher than P537.69 billion in 2020, when the pandemic affected supply chains.

The BoC and Bureau of Internal Revenue collected P2.732 trillion in 2021, 1.26% higher than their combined target of P2.698 trillion. — Tobias Jared Tomas

BSP seen hiking rates by 75 bps in 2^nd half

April 5, 2022 | 12:31 am

THE PHILIPPINE central bank is likely to raise its benchmark rate by a total 75 basis points in the second half when the economy is expected to regain its pre-pandemic level, Mitsubishi UFJ Group (MUFG) said.

“We continue to expect policy tightening to materialize in the second half of 2022, but a cumulative 75 basis points (bps) of rate hikes could be done versus our previous estimate of 50 bps,” it said in a note on Monday.

Last month, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said they would only consider increasing interest rates by the second half.

The Monetary Board on March 24 kept rates steady, saying it would keep supporting recovery until it gains traction. It, however, stressed it would be ready in case there was a need to respond to second-round effects of inflation.

MUFG analyst Sophia Ng said the progress of the Philippines’ economic rebound would determine the timeline of the BSP’s policy normalization.

“The BSP is likely to hike as early as the third quarter because that’s when the economy is expected to return to pre-pandemic levels as well. This would be the most important factor determining the timing of the first rate hike by the BSP,” she said in an e-mail.

She added that the central bank would likely become more aggressive if inflation breaches the 4.3% full-year projection.

“Looking at the current trajectory, the headline consumer price index may exceed 4% as soon as June, which is above the BSP’s inflation target range,” Ms. Ng said.

“As there is scope for oil prices to continue to rise, there are upside risks to the BSP’s inflation outlook. Should supply-side measures fail to rein in inflationary pressures the onus would be on the BSP to do so via the demand side by raising interest rates,” she added.

Inflation in March was likely 4%, according to a median estimate of 18 analysts in a BusinessWorld poll, near the upper end of the central bank’s 3.3-4.1% estimate. This would still be within the 2-4% target but faster than 3% in February. Inflation data is scheduled to be released on April 5.

The Monetary Board’s next rate-setting meeting is on May 19, while its first review in the third quarter is on Aug. 18.

MUFG also warned that the peso might continue to weaken due to risk aversion caused by the policy normalization of the US Federal Reserve.

It noted that the peso has been among the worst-performing Asian currencies in March. The peso last month slumped to its weakest level since October 2018.

On March 7, the peso breached the P52-a-dollar level for the first time during the month, closing at P52.18. Its weakest close in March was P52.475 on March 14.

The peso gradually strengthened to close at P51.74 on March 31, which is 1.45% weaker than its 2021 finish of P50.999.

“With the Philippines likely to record net capital outflows as well due to ongoing risk aversion and upcoming rate hikes by the Fed, the Philippines’ balance of payments is expected to record a deficit in 2022 from 2021’s surplus at 0.2% of gross domestic product, which will put further downward pressure on the peso,” MUFG said.

The Fed started to hike interest rates last month in a widely expected move to quell decades-high inflation in the United States.

Mr. Diokno said the BSP does not need to move in lockstep with the US Federal Reserve, noting that they only take into account external developments as far as they affect growth and the inflation outlook.

The Japanese bank also said the war in Ukraine has propelled demand for the safe-haven dollar.

“This will inevitably lead to larger trade and current account deficits, making the peso more vulnerable to rallies in oil prices as opposed to most other Asia excluding Japan currencies,” MUFG said.

It noted that the BSP’s current account deficit projection of 3.8% of the gross domestic product in 2022, if realized, will be the largest since the 5.3% in 1997 during the Asian Financial Crisis.

Despite the uncertainties caused by the war, MUFG on Friday raised its growth outlook for the Philippines to 6.5% from 6% previously, noting consumer spending amid more relaxed restrictions could boost recovery. However, this remains below the 6-7% target set by the government. — Luz Wendy T. Noble