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Rate rises could add $8.6 trillion to global borrowing costs — S&P

PIXABAY

LONDON — Central bank rate rises could land global borrowers with $8.6 trillion in extra debt servicing costs in coming years, S&P Global estimated on Friday, warning of a slowdown in economic activity as a result.

Major central banks have delivered a record 2,700 basis points of rate hikes in 2022 to stamp out high inflation while concerns have been growing about higher borrowing costs sparking a global recession.

“Higher interest expenses are already straining less-creditworthy governments and corporates, and lower-income households,” S&P Global, a financial intelligence company that includes a debt ratings service, said in a report.

Businesses’ required returns on new projects were rising along with debt costs, S&P Global added, in a trend that would “dampen future business activity volumes”.

“Rising interest rates and slowing economies are making the debt burden heavier,” S&P Global added in the report launched ahead of next week’s World Economic Forum in Davos, Switzerland.

“To mitigate the risk of a financial crisis, trade-offs between spending and saving may be needed.”

S&P Global based its estimate of an $8.6 trillion extra interest bill by applying a three-percentage point rate increase to $300 trillion worth of global debt. Around 65% of the extra debt service cost would be paid on fixed-rate bonds and loans as they were refinanced “over time,” the report said.

It also projected that the global debt-to-gross domestic product (GDP) ratio — a marker of leverage risk in the financial system — could rise in a worst case scenario to 391% by 2030, from 349% in June 2022.

S&P Global is adding its voice to a chorus of warnings from policymakers and multilateral institutions about the impact of higher debt servicing costs on fragile economies and companies, as well as struggling households.

Last month, World Bank President David Malpass said at a Reuters conference that the world’s poorest countries now owed $62 billion in annual debt service costs to official creditors, an increase of 35% over the past year, sparking concerns about a disorderly default trend.

In September, the Vulnerable Group of 20 (V20), a group of 55 economies exposed to the fallout from climate change, forecast their debt interest bill would rise to a point where they would struggle to safeguard their populations from natural disasters. — Reuters

Indonesia deploys warship to track Chinese coast guard vessel

A man is seen behind an Indonesia’s national flag in Jakarta, Indonesia in this file photo dated April 7, 2019. — REUTERS

JAKARTA — Indonesia has deployed a warship to its North Natuna Sea to monitor a Chinese coast guard vessel that has been active in a resource-rich maritime area, the country’s naval chief said on Saturday of an area that both countries claim as their own.

Ship tracking data shows the vessel, CCG 5901, has been sailing in the Natuna Sea, particularly near the Tuna Bloc gas field and the Vietnamese Chim Sao oil and gas field since Dec. 30, the Indonesian Ocean Justice Initiative told Reuters.

A warship, maritime patrol plane and drone had been deployed to monitor the vessel, Laksamana Muhammad Ali, the chief of the Indonesian navy, told Reuters.

“The Chinese vessel has not conducted any suspicious activities,” he said. “However, we need to monitor it as it has been in Indonesia’s exclusive economic zone (EEZ) for some time.”

A spokesperson for the Chinese embassy in Jakarta was not immediately available for comment.

The United Nations Convention on the Law of the Sea (UNCLOS) gives vessels navigation rights through an EEZ.

The activity comes after an EEZ agreement between Indonesia and Vietnam, and approval from Indonesia to develop the Tuna gas field in the Natuna Sea, with a total estimated investment of more than $3 billion up to the start of production.

In 2021 vessels from Indonesia and China shadowed each other for months near a submersible oil rig that had been performing well appraisals in the Tuna block.

At the time, China urged Indonesia to stop drilling, saying the activities were happening in its territory.

Southeast Asia’s biggest nation says that under UNCLOS, the southern end of the South China Sea is its exclusive economic zone, and named the area as the North Natuna Sea in 2017.

China rejects this, saying the maritime area is within its expansive territorial claim in the South China Sea marked by a U-shaped “nine-dash line,” a boundary the Permanent Court of Arbitration in the Hague found to have no legal basis in 2016. — Reuters

Biden documents bungle seen as political black eye before 2024 launch

REUTERS

WASHINGTON — This week’s revelations that US President Joseph R. Biden stored classified documents in his Delaware home from his time as vice president has caused a political headache for him and the Democratic party, just as he approaches a difficult re-election bid.

Mr. Biden began 2023 buoyed by unexpectedly strong midterm election results for Democrats. Since then, inflation has fallen, and the opposition Republican Party appeared in such public disarray that it took days to elect a speaker of the House of Representatives.

The president, 80, was poised to ride that wave into an announcement that he will make another run for the White House, perhaps as soon as next month, after the State of the Union address on Feb. 7, sources told Reuters.

But Attorney General Merrick Garland’s naming of a special counsel on Thursday to probe the Biden administration’s document handling has neutralized Democrats’ ability to target former President Donald Trump, Republicans’ top 2024 candidate so far, over classified documents.

“It basically … is a huge gift to Trump,” said David Axelrod, a former political adviser to President Barack Obama. Mr. Axelrod said the latest developments were an “embarrassment” because Mr. Biden criticized his predecessor after the FBI found classified government documents during a court-ordered search of Mr. Trump’s Florida resort.

“He’s been on a huge run here. And he had a lot of momentum going, and this is a bump in the road,” Mr. Axelrod said.

After Mr. Biden aides found classified documents at his residence in Delaware, including some in his garage, and at a Washington think tank he was associated with, Mr. Biden’s counsel said on Saturday that he had found five additional pages with classified markings at the president’s home.

The White House has promised to cooperate with the Department of Justice investigation and says the documents were inadvertently misplaced.

It has declined to elaborate, citing the Justice Department probe.

In September Mr. Biden called Mr. Trump’s handling of classified documents “totally irresponsible.” The former president, responding to the latest developments on his Truth Social platform, questioned when Mr. Biden’s homes would be searched. Mr. Trump announced his own re-election bid last year.

Mr. Biden has pushed infrastructure and climate change legislation through Congress and led democratic nations’ united response to Russia’s invasion of Ukraine. But he faces lackluster approval ratings and concerns about his age as he looks to 2024.

“This is a distraction for the White House right when they were starting to gain some momentum,” said Alex Conant, a Republican strategist and former spokesman for Republican President George W. Bush.

“It makes Biden look like a giant hypocrite,” Mr. Conant said. “Clearly Trump’s handling of classified materials was a lingering problem that Republicans had not had a good answer for until this week.”

While legal experts highlighted differences between the two cases — Mr. Trump refused to return documents, and about 100 marked classified were found at his home — a Democratic communications adviser, who declined to be named, said the issue would still pose questions for voters about Mr. Biden’s competence.

Mr. Axelrod said: “My guess is when this thing shakes out that it’s going to be less than it appears today, but right now it’s a huge pain.” — Reuters

Britain to send 14 of its main battle tanks, more weaponry to Ukraine

LONDON — Prime Minister Rishi Sunak’s office said late on Saturday that Britain would send 14 of its main battle tanks along with additional artillery support to Ukraine, disregarding criticism from the Russian Embassy in London.

A squadron of 14 Challenger 2 tanks will go into the country in the coming weeks and around 30 self-propelled AS90 guns, operated by five gunners, are expected to follow, the British prime minister’s office said in a statement.

The UK will also begin training Ukrainian forces to use the tanks and guns in the coming days.

“As the people of Ukraine approach their second year living under relentless Russian bombardment, the Prime Minister is dedicated to ensuring Ukraine wins this war,” a spokesperson for the prime minister said in a statement.

“Alongside his closest military advisors, he has analyzed the military picture, looked at the strategic impact of the UK’s support and identified a window where he thinks the UK and its allies can have maximum impact.”

The announcement follows a phone call with Ukrainian President Volodymyr Zelensky earlier on Saturday during which, Mr. Sunak “outlined the UK’s ambition to intensify our support to Ukraine, including through the provision of Challenger 2 tanks and additional artillery systems.”

Mr. Sunak’s office said earlier this week that Britain would coordinate its support with allies after Germany, France and the United States all indicated last week they would provide armored vehicles to Ukraine.

The office also said that the defense minister would update the British parliament with details of the security support on Monday.

The Russian Embassy in London said the decision to send the tanks would drag out the confrontation, lead to more victims including civilians, and was evidence of “the increasingly obvious involvement of London in the conflict”.

“As for the Challenger 2 tanks, they are unlikely to help the Armed Forces of Ukraine turn the tide on the battlefield, but they will become a legitimate large target for the Russian artillery,” the embassy said, according to comments cited by the TASS news agency.

The Challenger 2 is a battle tank designed to attack other tanks, and has been in service with the British Army since 1994. It has been deployed in Bosnia and Herzegovina, Kosovo and Iraq, according to the army.

“The prime minister and President Zelensky welcomed other international commitments in this vein, including Poland’s offer to provide a company of Leopard tanks,” Mr. Sunak’s spokesperson said.

Mr. Zelensky, in his nightly video address published before the detailed British announcement, called the expected help “important” for Ukraine’s defense.

“It’s really what is needed,” Mr. Zelensky said. “And I believe that similar decisions will still be made by other partners — those who understand why such evil cannot be given a single chance.” — Reuters

Ayala Corp. seeks legal action against makers of fake app

AYALA Corp. is seeking legal action against the makers of a fake investment application circulating on social media channels.

The fake “Ayala Investment App” uses the Ayala Corp. logo and reposts content from Ayala’s official Facebook page and website, an advisory said.

“We are now working with internal and external partners to take down the app and identify its source, and subject the individuals behind this app to law enforcement and prosecutorial action,” said Catherine R. Bengzon, Ayala Corp. brand and reputation management head, in an e-mail to BusinessWorld.

“In addition, we have published a public notice across our digital channels. We are also sending cease and desist letters to known promoters of the app,” she added.

Ayala Corp. stocks can only be purchased via licensed stockbrokers accredited by the Philippine Stock Exchange.

“‘Investments’ in the Corporation or any of our business units and subsidiaries are not done through third-party apps and websites,” said Ms. Bengzon. — Patricia B. Mirasol

China’s trade tumbles sharply in Dec., clouds 2023 growth outlook

BEIJING — China’s exports shrank sharply in December as global demand cooled, highlighting risks to the country’s economic recovery this year, but a more modest decline in imports reinforced views that domestic demand will slowly recover in coming months.

While imports are expected to ride a wave of pent-up demand after China dropped its tough coronavirus disease 2019 (COVID-19) measures in December, its exports are seen weakening well into the new year as the global economy teeters on the brink of recession.

“The weak export growth highlights the importance of boosting domestic demand as the key driver for the economy in 2023,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding markets expect Beijing to announce more policies to support consumption.

Exports contracted 9.9% year-on-year in December, extending a 8.7% drop in November, though slightly beating expectations, customs data showed on Friday. The drop was the worst since February 2020.

Reflecting faltering world demand, outbound shipments to the United States shrank 19.5% in December, while those to the EU fell 17.5%, according to Reuters’ calculations based on the official data.

Despite the sharp falloff in shipments in the last few months, China’s total exports rose 7% in 2022 thanks to its strong trade with Southeast Asian nations as well as an export boom of new energy vehicles. Still, growth was a far cry from a 29.6% gain in 2021.

Imports fell 7.5% last month, moderating from a 10.6% decline in November and better than a forecast 9.8% decline.

China’s 2022 trade surplus hit an all-time peak of $877.6 billion, the highest since records started in 1950, compared with $670.4 billion in 2021.

DOMESTIC DEMAND KEY TO 2023 RECOVERY
Boosting domestic consumption will be vital to Beijing’s economic recovery plans, and there is lots of lost ground to recover — imports rose only 1.1% last year, down sharply from 30% growth in 2021.

China’s purchases of coal and copper shrank in December, as industrial activity slowed on a surge in COVID-19 infections.

Policymakers have pledged to increase support for the economy as they are eager to underpin growth and ease disruptions caused by the sudden end to COVID-19 curbs.

Measures to ease a crippling funding crunch in the property sector, in particular, could revive home sales and boost imports of industrial materials from iron ore to copper.

Lloyd Chan, senior economist at Oxford Economics, expects more support for property developers and households, but said net trade is still likely to be a drag on China’s growth this year.

“Any near-term lift is unlikely given weak domestic sentiment and the ongoing COVID surge.”

WEAK GLOBAL DEMAND COULD TEMPER ECONOMIC RECOVERY
China’s commerce ministry said on Thursday that slowing external demand and the rising risks of a global recession are posing the biggest pressures to the country’s trade stabilization, leaving “arduous tasks.”

An official factory activity survey showed a sub-index of new export orders has remained in contraction territory for 20 consecutive months.

But the ministry said major exporting provinces have reported seeing some improvement in getting new orders. After three years, Chinese authorities have finally removed anti-virus curbs that disrupted port logistics and shut down factories in key manufacturing hubs.

REBOUND
Analysts polled by Reuters expect China’s economic growth to rebound to 4.9% in 2023, before steadying in 2024, a Reuters poll showed.

The economy likely grew just 2.8% in 2022 amid widespread lockdowns, well below the official target of around 5.5%. Fourth quarter and 2022 gross domestic product data (GDP) data will be released on Jan. 17.

International Monetary Fund Managing Director Kristalina Georgieva said on Thursday she expected China to become a net contributor to the global economy by mid-2023, and urged Beijing to stay the course in reversing its earlier zero-COVID policy.

Analysts at the Bank of America expect China’s consumption to have a “faster and sharper” rebound than that seen in the rest of Asia.

But some manufacturers remain cautious about the outlook.

Jin Chaofeng, whose company in the east coast city of Hangzhou exports outdoor rattan furniture, said he has no market expansion or hiring plans for 2023.

“With the lifting of COVID curbs, domestic demand is expected to improve but not for exports…,” he said.

“With no signs of the ending of the Russia-Ukraine war or crucial improvement in China-US relations, this year’s exports may be worse than 2022,” Jin said, adding his company has been reducing inventories over recent months. — Reuters

Bank of Korea raises interest rates, hints they will now be steady

REUTERS

SEOUL — South Korea’s central bank raised its policy interest rate by 25 basis points on Friday, as expected, but bond yields plunged in response to comments suggesting its 1-1/2-year rate-hike campaign had ended.

The benchmark 10-year treasury bond yield dived as much as 14.3 basis points to 3.270%, its lowest since late August and far below the Bank of Korea’s policy rate, which was raised to 3.50% on Friday.

The central bank said in a statement that economic growth this year would fall short of forecasts issued in November while inflation would slow in line with its expectation of two months ago. It abandoned a formerly regular reference to the need for more interest rate rises.

“The Board will judge whether the Base Rate needs to rise further while thoroughly assessing the economic downside risks and financial stability risks, the effects of the Base Rate raises, the pace of inflation slowdown, and monetary policy changes in major countries,” it said in the statement.

Economists in a Reuters poll had predicted Friday’s rate increase would mark the end of the rate-hike cycle, which the Bank of Korea began in August 2021.

“There were more dissenters than expected and the governor’s comments were dovish in general,” said Ahn Jae-kyun, fixed-income analyst at Shinhan Securities.

Bank of Korea Governor Rhee Chang-yong told a news conference that two of the six board members had voted to hold interest rates steady. Rhee does not vote when a majority is formed among the other six.

Gross domestic product was probably lower in the fourth quarter of 2022 than in the previous quarter, Mr. Rhee said. That would be the first fall since mid-2020. Data for October-December has not been issued yet.

He said it was premature to say whether the economy would suffer two consecutive quarters of contraction but he hoped growth would be better in the current quarter.

Friday’s decision marked the 10th rise in the current tightening cycle and brought the total amount of increase to 300 basis points. — Reuters

Malaysia says it could stop palm oil exports to EU after new curbs

CRAIG MOREY/FLICKR/CC BY-SA 2.0

KUALA LUMPUR — Malaysia said on Thursday it could stop exporting palm oil to the European Union (EU) in response to a new EU law aimed at protecting forests by strictly regulating sale of the product.

Commodities Minister Fadillah Yusof said Malaysia and Indonesia would discuss the law, which bans sale of palm oil and other commodities linked to deforestation unless importers can show that production of their specific goods has not damaged forests.

The EU is a major palm oil importer and the law, agreed to in December, has raised an outcry from Indonesia and Malaysia, the top producers.

“If we need to engage experts from overseas to counter whatever move by EU, we have to do it,” Mr. Fadillah told reporters on the sidelines of a seminar on Thursday.

“Or the option could be we just stop exports to Europe, just focus on other countries if they (the EU) are giving us all a difficult time to export to them.”

Environmental activists blame the palm oil industry for rampant clearing of Southeast Asian rainforests, though Indonesia and Malaysia have created sustainability certification standards mandatory for all plantations.

Mr. Fadillah, who is also deputy prime minister, urged the members of the Council of Palm Oil Producing Countries (CPOPC) to work together against the new law and to combat “baseless allegations” made by the EU and United States about the sustainability of palm oil.

CPOPC, which is led by Indonesia and Malaysia, has previously accused the EU of unfairly targeting palm oil.

Responding to Mr. Fadillah, the EU’s ambassador to Malaysia said it was not banning any imports of palm oil from the country and denied that its deforestation law created barriers to Malaysian exports.

“(The law) applies equally to commodities produced in any country, including EU member states, and aims to ensure that commodity production does not drive further deforestation and forest degradation,” EU Ambassador Michalis Rokas told Reuters.

Mr. Rokas added that he looked forward to meeting Mr. Fadillah to ease Malaysia’s concerns.

EU demand for palm oil was expected to decline significantly over the next 10 years even before the new law was agreed to. In 2018, an EU renewable-energy directive required the phasing out of palm-based transportation fuels by 2030 because of their perceived link to deforestation.

Indonesia and Malaysia have launched separate cases with the WTO, saying the fuels measure is discriminatory and constitutes a trade barrier.

Indonesian President Joko Widodo and Malaysian Prime Minister Anwar Ibrahim this week agreed to “fight discrimination against palm oil” and strengthen cooperation through CPOPC.

The EU is the world’s third-largest palm oil consumer, according to Malaysian Palm Oil Board data. It accounts for 9.4% of palm oil exports from Malaysia, taking 1.47 million tonnes in 2022, down 10.5% from a year earlier. — Reuters

Australia’s natural disasters bill hits $3.5 billion in 2022, billions more to come

STOCK PHOTO | Image by Andi Graf from Pixabay

SYDNEY — Floods and natural disasters that hit all but one Australian state and territory in 2022 cost the economy A$5 billion ($3.48 billion) and stoked inflation according to Treasury estimates which forecast billions more spending in 2023.

Australia suffered four major bouts of flooding last year, with global reinsurer Munich Re estimating that February and March flooding across northern New South Wales state that killed more than 20 was the fourth most costly global disaster in 2022.

Natural disasters cost the economy A$5 billion or 0.25% of real GDP for last financial year, according to Treasury estimates, particularly delays to mining and construction plus the destruction of crops. The figures did not include damage or destruction of infrastructure and other assets.

“We’ve put that number out there really just as a reminder that even though we are rightly focused on the human cost of these natural disasters, which are becoming more and more frequent, there is a cost to the economy as well and a cost to the budget,” Treasurer Jim Chalmers told ABC radio on Friday ahead of a tour of Lismore, a town 700 kilometers (435 miles) north of Sydney devastated by floods last year.

Flooding worsened last year’s record inflation, according to the Treasury, with washed out crops and disrupted logistics contributing to a 16.2% rise in fruit and vegetables prices compared to the pre-COVID decade average of 2.5%.

Days after inflation surprised forecasters to the upside, the Treasury believes fresh food prices will continue to rise.

Mr. Chalmers also flagged more demands on the budget he will deliver in May, with billions of additional disaster-related spending expected this year on top of A$3.5 billion spent in 2022.

The government will focus on mitigating future disasters, he said, instead of policies like subsidizing expensive insurance for those who live in disaster-prone areas.

“We need to be careful about how we expose the government’s balance sheet to some of these big risks,” he said. — Reuters

Why the US needs Japan’s help on China chips restrictions

REUTERS

WASHINGTON — When the Biden administration unveiled aggressive export controls in October aimed at blocking China from becoming a global leader in advanced semiconductors it was missing a key ingredient: agreement from US allies to impose their own matching restrictions.

Persuading Japan to join the US effort, which limits Chinese access to US chipmaking technology and cuts China off from certain semiconductor chips made anywhere in the world, will be high on US President Joseph R. Biden, Jr.’s to-do list when he meets with Japanese Prime Minister Fumio Kishida in Washington on Friday.

American officials, touting an ever-closer strategic alignment with Japan, are praising Tokyo’s plan for the biggest Japanese military buildup since World War Two as rivalry with China in the region grows.

But while Japan is broadly in-line with the goals of the Mr. Biden administration’s expanded US export controls, Mr. Kishida’s government has been vague about the extent to which it will join in.

Speaking in Washington last week, Japan’s minister of Economy, Trade and Industry, Yasutoshi Nishimura, promised to work more closely with Washington on export controls, although he did not say whether Tokyo would match sweeping US restrictions.

The hesitation is understandable — Japan is a top producer of the specialized tooling equipment needed to manufacture advanced chips and its companies hold 27% of global market share, according to the Semiconductor Industry Association. Tokyo Electron, Japan’s leading chip manufacturing equipment maker, relies on China for about a quarter of its revenue.

The other top producers of chip-making gear are the United States and the Netherlands, home to ASML, another of the world’s biggest makers of chip-making tools.

SEEKING A DEAL

US officials are quick to play down the differences between the United States, Japan and other allies.

“I think there’s a very, very similar vision of the challenges,” a senior US administration official told Reuters on Wednesday, adding that Japanese export restrictions may not be exactly the same as the U.S. controls.

“But I don’t think the Japanese question the basic premise that we need to be working closely together on this.”

A US Commerce Department official said in October he expected a deal with allies in the near term.

Netherlands Prime Minister Mark Rutte will travel to Washington to meet Biden on Tuesday and discuss “cooperation on critical technologies and shared vision for a free and open Indo-Pacific,” the White House said on Thursday.

Still, said Daniel Russel, a former top US diplomat for Asia, a gap remains between the US and Japanese positions.

“Kishida wants the US to take a Goldilocks approach that is tough enough to deter Chinese assertiveness, but cautious enough to allow Japan’s business interests to thrive,” he said.

Behind the US drive for high-tech export controls is rising alarm about China’s military buildup and its effort to outpace the United States in technologies such as artificial intelligence and quantum computing.

Fearing that this will yield a military edge for an increasingly assertive China, US officials hope that keeping the most sophisticated chips – and the tools needed to make them — out of China’s hands will slow the country’s progress on advanced technologies.

But unless Japan and the Netherlands impose their own export controls, China will soon perfect other ways of getting the equipment it needs, even as American companies stand to lose market share.

A US deal with the Netherlands could also be within reach. One toolmaking industry executive familiar with that country’s sector said that if the Dutch government imposed similar export controls on its industry, ASML would probably not suffer a severe impact due to its extensive network of customers beyond China.

If US diplomacy succeeds, its policies could have the intended impact, argues Chris Miller, author of “Chip War” and an associate professor at Tufts University.

With Japan on board, particularly in terms of chip manufacturing tools, the United States could put up “a really large number of road blocks to China’s ability to advance its own domestic chipmaking,” Mr. Miller said.

That would have knock-on effects for Beijing’s other tech ambitions, including in artificial intelligence.

Japanese companies can make up for lost China business by expanding elsewhere, such as Southeast Asia, a chip industry source familiar with internal discussions about export restrictions said.

“For better or worse, Japan’s semiconductor strategy is moving in accordance with what the United States wants.” — Reuters

Four out of five Filipinos are interested in entrepreneurship – OCTA Research

STOCK IMAGE | Image by pikisuperstar on Freepik

Eighty-one percent (81%) of adult Filipinos would prefer to go into business – granting they had enough know-how to do so, according to the results of a survey conducted in October 2022 by OCTA Research, a private polling, research, and consultation firm,  

Results of the national survey was released January, 2023 by the office of Jose Ma. “Joey” A. Concepcion III, founder of GoNegosyo, a non-profit that supports Filipino entrepreneurs, and which commissioned the said survey. 

Across socioeconomic classes, the desire for entrepreneurship was at 80% among classes ABC and D, and 74% from class E. The national survey, commissioned by Go Negosyo, a non-profit that supports Filipino entrepreneurs, also found that capital provision is the kind of government support that small entrepreneurs need the most (69%), and that mentorship is a very important component for a small business to be more successful (66%). 

Filipinos have high interest for entrepreneurship, according to Ranjit Singh Rye, an OCTA Research fellow and a professor at the University of the Philippines, in a January 11 phone call.  

“It’s also clear they want government to support MSMEs [micro, small, and medium enterprises] by funding two things: loans and mentoring,” Mr. Rye said. 

“My opinion is that the government needs to expand investment in programs that broaden and deepen the development of MSMEs in the country.…Filipinos are hankering for support,” he added. “This is the viable way forward for us not just to recover, but prosper as a nation.”  

Among those Filipinos who prefer to get into business, the top reasons are: 

  • no boss to report to/get along with (24%) 
  • management of one’s own time/schedule (21%) 
  • working and earning at home or from anywhere (14%) 
  • daily income/money (13%) 
  • and no limit in profit/bigger salary (12%).  

Those who prefer work, in contrast, cite having a fixed/monthly income (34%), financial security (29%), and not having to need money/capital to start (17%) as their top reasons.  

Either way, three-fifths of adult Filipinos (62%) think the positive impact on the community is the main reason for supporting and favoring small businesses. 

 

Information sources 

Relatives and family are the main source of information about entrepreneurship for adult Filipinos (59%), with the local government unit (LGU) following at 43%. Only about 23% of the same segment consider the Department of Trade and Industry as the source of information about entrepreneurship. 

The October 2022 survey further found that more than half – or 53% – were also aware of Go Negosyo and its founder, Jose Ma. “Joey” A. Concepcion III. Go Negosyo is seen by adult Filipinos as either as a partner or supporter of small businesses (52%), or as one that teaches how to run a business (47%). 

“With the pandemic now behind us, and even with the current headwinds facing the global economy, I am confident that 2023 will be a much better year for our entrepreneurs,” Mr. Concepcion said in a January 8 press statement.  

“I think our growth will continue, and I believe that, perhaps by the second quarter, we will reach a tipping point where commodity prices will go down. Interest rates definitely will taper off, and hopefully, by the second quarter and maybe towards the third, interest rates will go down, and it will be the same with power rates,” said Mr. Concepcion. 

“Barring any further escalation between Russia and the Ukraine, we might have already seen the worst,” he added in the same press statement. 

Micro, small, and medium enterprises account for 62.66% of job generation in the Philippines, which amounts to 5,380,815 jobs, per the Department of Trade and Industry’s 2020 figures. 

The Philippines Statistics Authority classifies an enterprise as a micro enterprise if it has less than 10 employees, small if it has 10-99 employees, medium with 100-199 employees, and large if it has 200 or more employees. The Small and Medium Enterprise Development Council, on the other hand, uses asset size (up to P3,000,000 for microenterprises, and up to P100,000,000 for medium ones) as its basis for classification. – Patricia B. Mirasol

The survey involved 1,200 respondents aged 18 years and older, covering socioeconomic classes AB, C, D, and E.  

Animal and pet-related Reels get most engagement on Facebook and Instagram in 2022

Reels of animals and pets received the most engagement on Facebook and Instagram in the first three quarters of 2022, according to Meta, the company that owns the two social media platforms. 

The Reels feature is a feed of short-form videos that were launched in the Philippines early 2022 (for Facebook) and late 2021 (for Instagram). 

For Facebook Reels, the top 5 most engaged topics from Filipino creators in 2022 are: 

  • Animals and pets 
  • Comedy/skit 
  • Sports 
  • Fashion 
  • Family and parenting 

For verified Philippine-based Instagram accounts, former Pinoy Big Brother housemate, Andrei King (@king.dreii), created the Reel with the highest number of views with his “Instagram vs. Reality” experience about taking Instagram-worthy travel photos, garnering 1,228,238 likes.  

Actress Maricar Reyes-Poon (@maricareyespoon) takes second place for most played Instagram Reels with her transformation from sweet and charming girl next door to chic and sophisticated lady with the Cruella filter. 

Philippine-based Korean creator Dasuri Choi’s quick glam change, fashion blogger Kryz Uy’s moment with husband Slater, and When In Manila’s sushi pun round up the top 5. 

Meta also noted that Jeeca Uy, the home cook behind The Foodie Takes Flight, gained more than 117,000 new Instagram followers after they viewed one of her Reels.  

“Reels enables everyone to create entertaining short-form videos and get discovered on a global stage. Since we launched Reels on Instagram in 2021, we have seen just how much Reels content reflect authentic Pinoy culture as a whole—from our soft spot for animals, to our penchant for finding humor in everyday life, how we value family, and how we express our shared love for food,” said John Rubio, Philippine country director at Meta, in a January 5 press statement. 

 “We look forward to seeing Filipino Creators expand their repertoire, grow their following, and explore fun new ways to engage people through short-form content in 2023,” he added. – Patricia B. Mirasol

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