Customers of budget carrier Cebu Pacific (CEB) who are travelling domestically from Jan. 5-31, and who wish to postpone their flight, have up to two hours before departure time to choose between the rebook or travel fund options.
The rebook option is for travel within 60 days at no additional cost, and with the fare difference waived. The travel fund option allows for the amount of a passenger’s booking to be stored in a virtual CEB wallet, and is valid for two years.
Both options are available through the Manage Booking portal at bit.ly/CEBmanageflight.
CEB also announced on Jan. 6 that is reviewing its network schedule and monitoring manpower levels considering quarantined employees. It is cancelling a number of domestic flights from Jan. 7 to 10, with passengers to be transferred to other available flights on the same day.
The affected flights are listed at bit.ly/CEBAdvisory_Jan2022Flights.
Meanwhile, the CEB Terminal 3 ticket office is closed until further notice.
To curb the post-holiday spike in COVID-19 cases, the Philippines’ Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) raised Metro Manila to Alert Level 3 Status from Jan. 3-15.
The growth of COVID-19 cases in the capital increased from -51% from Nov. 21 to Dec. 18, to +501% from Dec. 5 to Jan. 1, according to Metro Manila Development Authority chairman Benjamin de Castro Abalos, Jr. in a Jan. 5 town hall discussion.
Omicron, the latest COVID-19 variant of concern, could hamper the recovery of the tourism industry.
“[The Omicron] surge will be driven by the irresponsibility and selfishness of individuals who breach protocols instituted to ensure everyone’s safety,” said Asian Institute of Management economist John Paolo R. Rivera in a Jan. 4 BusinessWorld article. — P. Mirasol
SEOUL – North Korea fired a “hypersonic missile” this week that successfully hit a target, state news agency KCNA reported on Thursday, its second such test as the country pursues new military capabilities amid stalled denuclearisation talks.
The launch on Wednesday was the first by North Korea since October and was detected by several militaries in the region, drawing criticism from governments in the United States, South Korea, and Japan.
North Korea first tested a hypersonic missile in September, joining a race headed by major military powers to deploy the advanced weapons system.
Hypersonic weapons usually fly towards targets at lower altitudes than ballistic missiles and can achieve more than five times the speed of sound – or about 6,200 km per hour (3,850 mph).
Despite their name, analysts say the main feature of hypersonic weapons is not speed – which can sometimes be matched or exceeded by traditional ballistic missile warheads – but their manoeuvrability.
In Wednesday’s test, the “hypersonic gliding warhead” detached from its rocket booster and manoeuvred 120 km (75 miles) laterally before it “precisely hit” a target 700 km (430 miles) away, KCNA reported.
The missile demonstrated its ability to combine “multi-step glide jump flight and strong lateral manoeuvring,” KCNA said.
The test also confirmed components such as flight control and its ability to operate in the winter, KCNA added.
“The successive successes in the test launches in the hypersonic missile sector have strategic significance in that they hasten a task for modernizing strategic armed force of the state,” the KCNA report said.
While it has not tested nuclear bombs or long-range intercontinental ballistic missiles (ICBMs) since 2017, in recent years North Korea has developed and launched a range of more manoeuvrable missiles and warheads likely aimed at being able to overcome missile defences like those wielded by South Korea and the United States, analysts have said.
“My impression is that the North Koreans have identified hypersonic gliders as a potentially useful qualitative means to cope with missile defence,” said Ankit Panda, a senior fellow at the U.S.-based Carnegie Endowment for International Peace.
NEW MISSILE
Hypersonic weapons are considered the next generation of arms that aim to rob adversaries of reaction time and traditional defeat mechanisms.
Last month the United States completed construction of a massive, $1.5 billion long-range radar for a homeland missile defence system in Alaska that it says can track ballistic missiles as well as hypersonic weapons from countries such as North Korea.
Photos of the missile used in Wednesday’s test show what analysts said is a liquid-fueled ballistic missile with a conical-shaped Manoeuvrable Reentry Vehicle (MaRV) blasting off from a wheeled launch vehicle in a cloud of flame and smoke.
It is a different version than the weapon tested last year, and was first unveiled at a defence exhibition in Pyongyang in October, Panda said.
“They likely set up at least two separate development programmes,” he added. “One of these was the Hwasong-8, which was tested in September. This missile, which shares a few features in common with the Hwasong-8, is another.”
In a call with Japanese Foreign Minister Yoshimasa Hayashi on Thursday, U.S. Secretary of State Antony Blinken condemned the North Korea missile launch and discussed cooperation to achieve complete denuclearization and lasting peace on the Korean Peninsula, the U.S. State Department said in a statement.
Talks aimed at persuading North Korea to surrender its nuclear weapons and ballistic missile arsenal have been stalled since a series of summits between leader Kim Jong Un and then-U.S. President Donald Trump broke down with no agreement.
U.S. President Joe Biden’s administration has said it is open to talking to North Korea, but Pyongyang has said American overtures are empty rhetoric without more substantive changes to “hostile policies” such as military drills and sanctions.
The latest test came just hours before South Korean President Moon Jae-in attended a groundbreaking ceremony for a rail line he hopes will eventually connect the divided Korean peninsula, casting doubts over his hopes for an eleventh-hour diplomatic breakthrough with North Korea before his five-year term ends in May. – Reuters
Globe received a higher B rating in 2021 from the CDP (formerly Carbon Disclosure Project), as it continues to intensify efforts to address climate change. The digital solutions platform discloses its environmental impact through CDP, a global non-profit that runs the world’s leading environmental disclosure platform for investors, companies, cities, states, and regions, to show its commitment to environmental transparency.
CDP issues a score from A to F, depending on the organization’s environmental performance. Globe’s current score was a notch higher than the B- rating it received in 2020. It is also higher than the Asia regional average of B-, and at par with the media, telecommunications, and data center sector average of B. ESG ratings have become a standard assessment tool used by investors to measure a company’s sustainability performance, on top of its financial performance.
Disclosures are standard forecasts demanded by capital markets and customers. With its international standing, reporting through CDP brings tangible business benefits, from brand value to risk management and getting ahead of regulation.
“Globe annually discloses its climate action activities, practices, and programs with the CDP to continuously check our progress in creating a more sustainable ecosystem for our customers and stakeholders. We are happy to receive a slightly higher rating for 2021. This means we are on track in our climate change agenda,” said Yoly Crisanto, Globe Chief Sustainability Officer and SVP for Corporate Communications.
To qualify for the CDP rating, a company must score over a threshold percentage of the available awareness points, showing that they have assessed a broad range of environmental issues and have determined how these intersect with its business. Management points are awarded for answers that provide evidence of actions associated with good environmental management. Scoring for this relies on companies’ disclosure of processes and procedures more than judging the effectiveness of its actions. CDP scores are widely used to drive investment and procurement decisions towards a zero-carbon, sustainable and resilient economy.
CDP is fully aligned with the globally-recognized Task Force on Climate-Related Financial Disclosure (TCFD) and is a founding member of the Science-Based Targets initiative (SBTi).
Globe has also expressed its support to the TCFD to increase transparency on climate-related risks and opportunities within financial markets. It is also the first and only publicly-listed Philippine company listed by SBTi to commit to Business Ambition for 1.5 and officially join Race to Zero.
To operationalize its climate strategy, a total of 13 Globe key facilities, including its headquarters, have transitioned to 100% renewable energy through Power Purchase Agreements (PPA) with Retail Electricity Suppliers (RES). The partner RES provides Globe with Verified Emission Reduction (VER) certificates to document its carbon emission offsets.
Furthermore, Globe has deployed over 7,400 green network solutions. Nationwide, it has deployed 203 fuel cell systems, 6,467 lithium-ion batteries, 212 direct current generators, 60 DC-Hybrid Generators, and 538 free cooling systems. These green solutions require fewer fuel consumption and provide a more energy-efficient cooling system.
Globe strongly supports the United Nations Sustainable Development Goals, particularly UN SDG No. 13, which is to take urgent action to combat climate change and its impact. Globe is committed to upholding the UN Global Compact principles and contributing to 10 UN SDGs.
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NEW YORK – Pfizer Inc expects the latest results from a clinical trial for kids under the age of 5 of the COVID–19 vaccine it developed with Germany’s BioNTech SE by April, a top company scientist said on Wednesday.
“The study has been amended to give a third dose to everybody who’s less than five at least eight weeks after their last vaccination,” Dr. Alejandra Gurtman, a Pfizer vaccine researcher said at a meeting of the U.S. Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP). She said the company aims to have data for the age group by the end of March or the beginning of April.
In December, Pfizer said it was changing the design of the trial because children between the ages of 2 and 4 who were given two 3-microgram doses of the vaccine did not have the same immune response that a larger dose of the vaccine generated in older children.
Gurtman also said the company was studying a third dose of its vaccine in children ages 5 to 11, six months after their second dose.
The Pfizer-BioNTech vaccine is authorized in the United States for people age 5 and older. On Wednesday, ACIP backed booster shots of the vaccine for ages 12 to 15. – Reuters
JAKARTA – Aji Tri Atmojo lives in a traditional Javanese house with wooden walls on the outskirts of the Indonesian capital of Jakarta, but his rustic home got a modern touch after he installed a row of solar panels on his roof.
Since putting them up in 2020 at a cost of 10 million rupiah ($702.25), he has halved his monthly electricity bill and within five years the investment should break even.
With a patchy track record on renewables, Indonesia‘s energy mix is still heavily dependent on coal but if early signs of a jump in the take up of solar are sustained, it could have a transformative impact on Southeast Asia’s biggest economy.
“Because nearly all electricity generation in Indonesia … comes from coal. This way (my family) can reduce greenhouse gas emissions,” Aji told Reuters. Indonesia aims to wean itself off coal and become carbon neutral by 2060 or sooner.
Despite being a tropical archipelago of 17,000 islands blessed with year-round sunshine, Indonesia ranks last for solar power capacity among the G20 nations.
But demand is starting to pick up in the world’s fourth-most populous country, driven by policy changes, a steep fall in the prices of Chinese-made photovoltaic cells (PV) and environmentally conscious middle-class consumers such as Aji, an engineer at a dairy company.
From the end of 2018 to November 2021, the number of private rooftop solar panel users has risen more than sevenfold to about 4,500, with an installed capacity of 44 megawatts (MW), up from just 1.5 MW, according to state-owned power utility Perusahaan Listrik Negara (PLN).
RISING ELECTRICITY NEEDS
The Indonesia Solar Energy Association (ISEA) predicts installed capacity for rooftop solar panels could top 1,000 MW next year and rise by between 3,000 MW and 5,000 MW per year starting in 2025.
“People are becoming more aware about the importance of renewable energy,” said Amarangga Lubis, co-founder of engineering, procurement, and construction (EPC) firm SolarKita. “Since the pandemic, the work from home culture has been established and electricity needs at home are rising.”
Lubis predicts massive growth in solar power installations over the next five years. “People will be more picky and they will invest in things that are more beneficial” for the environment, he said.
To be sure, solar remains a minor energy source in Indonesia, the world’s biggest exporter of the thermal coal used in power plants.
Coal powers about 60% of Indonesia‘s 73,000 MW of electric generation capacity, compared with solar‘s 180 MW, which includes solar farms and private rooftop PV cells.
But, Indonesia has the potential for 400,000 MW of solar power, its energy ministry has forecast.
Falling prices for Chinese PV cells has driven the rise in private installations since the solar power produced from the panels is cheaper than power sold from PLN.
The systems from western countries that were the only ones previously available were also 10 times more expensive, said Ilham Rizky, founder of solar installer Batara Energi.
New financing methods, such as solar panel leasing for commercial users, have also helped businesses invest in solar, said Solarkita’s Lubis.
CARBON MARKET
Regulatory changes have also spurred growth, with PLN reducing its minimum energy charges in late 2019, which lowers the amount of time for solar users to recoup their installation costs.
Commercial solar users can also fully export their excess power to PLN as of August, up from only 65% previously, and they can participate in an Indonesian carbon market due to launch in 2025.
These changes, as well as agreements by multinational companies to curb carbon emissions, mean higher solar demand from companies, factories and commercial buildings in coming years, said Fabby Tumiwa, the ISEA executive director.
In addition to the commercial demand, Tumiwa also expects at least 2% of PLN’s 77 million household customers to put up solar PV cells in the next three to five years. – Reuters
VILNIUS – Taiwan said on Wednesday it would create a $200 million fund to invest in Lithuanian industries and boost bilateral trade as it tries to fend off diplomatic pressure on the Baltic state from China.
The Lithuanian government, meanwhile, ordered the state-owned railway company not to sign a contract with a China-owned Spanish bridge builder, citing “national security interests,” the prime minister’s spokesperson told the Baltic News Service.
Lithuania is under pressure from China, which claims democratically ruled Taiwan as its own territory, to reverse a decision last year to allow the island to open a de-facto embassy in Vilnius under its own name.
Taiwanese representations in other countries, except the unrecognized Somaliland, are named after Taiwan‘s capital Taipei.
China has recalled its ambassador to Lithuania and downgraded diplomatic ties, and is pressuring companies like German car parts giant Continental to stop using Lithuanian-made components. It has also blocked Lithuanian cargos from entering China.
U.S. Secretary of State Antony Blinken referred to China‘s pressure on Vilnius https://www.reuters.com/world/china/exclusive-china-asks-germanys-continental-cut-out-lithuania-sources-2021-12-17 in a joint news conference with German Foreign Minister Annalena Baerbock after a meeting in Washington and vowed to work with Berlin and others against such “intimidation.”
Blinken said Germany and the United States agree on the importance of trans-Atlantic coordination on China “because it poses a significant challenge to our shared values, to the laws, rules and agreements that foster stability, prosperity and freedom worldwide.”
“We have immediate concern about the government of China‘s attempts to bully Lithuania … China is pushing European and American companies to stop building products with components made in Lithuania, or risk losing access to the Chinese market, all because Lithuania chose to expand their cooperation with Taiwan.”
Lithuania‘s export-based economy is home to hundreds of companies that make products such as furniture, lasers, food and clothing for multinationals that sell to China.
The head of Taiwan‘s representative office in Lithuania, Eric Huang, said the strategic investment fund would be funded by Taiwan‘s national development fund and backed by its central bank.
“We will establish the fund as soon as possible and we hope this year we will have some tangible results … I can imagine the first top priorities will be semiconductor, laser (and) biotechnology,” he told a news conference.
Taiwan has redirected 120 shipping containers from Lithuania blocked by China into its market, and will take “as much as possible” more, Huang said.
Taiwan will also accelerate its approval process for Lithuanian dairy and grain exports into Taiwan and seek to link Lithuanian businesses into Taiwanese supply chains, he said.
Integrating Lithuania‘s laser industry into manufacturing semiconductors in Taiwan was another possibility, Huang said.
Taiwanese Deputy Foreign Minister Tseng Hou-jen called the Chinese pressure on Lithuania “disproportionate.”
“The U.S. and EU refer to Taiwan as Taiwan in their official documents, and China keeps quiet,” he said. “China‘s action seems to have targeted what it perceives as vulnerable country, for its political gains. But giving in is not the best way in dealing with bullies.” – Reuters
Efforts to institutionalize financial education in the capacity-building initiatives of the Armed Forces of the Philippines (AFP) gained momentum with the unveiling of financial education materials intended for the uniformed and civilian personnel of the Philippine Air Force, Philippine Army, and Philippine Navy.
In a virtual ceremony, the Bangko Sentral ng Pilipinas (BSP) and BDO Foundation turned over to the AFP a set of learning tools composed of new financial education videos, modules, and a trainer’s manual as part of the ongoing financial education program for the armed forces. The program is in line with the AFP’s Transformation Roadmap or ATR, which considers financial wellness as an integral aspect of a person’s holistic development.
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Through the financial education program for the armed forces, the BSP, AFP, and BDO Foundation aim to equip the 140,000 uniformed and civilian personnel of the AFP with tools, knowledge, and resources to make sound financial decisions.
Through the financial education program for the armed forces, the BSP, AFP, and BDO Foundation aim to equip the 140,000 uniformed and civilian personnel of the AFP with tools, knowledge, and resources to make sound financial decisions.
During the event, three new learning videos were introduced covering topics such as debt management, investments, retirement planning, digital literacy, and scam prevention. The AFP can now leverage a total of six videos tailor-fitted for the armed forces for its financial literacy learning sessions across the country.
The ceremonial turnover was spearheaded by BSP Governor Benjamin E. Diokno, AFP Chief of Staff Gen. Andres C. Centino, and BDO Unibank President and CEO, as well as BDO Foundation Trustee, Nestor V. Tan. The event was witnessed by BSP Economic and Financial Learning Office Director Maria Farah Angka, AFP Deputy Chief of Staff for Personnel Maj. Gen. Adriano Perez Jr., BDO Foundation President Mario A. Deriquito, and BDO Foundation Trustees Ma. Corazon Mallillin and Evelyn Salagubang.
The BSP Governor emphasized that the country’s central monetary authority “will continue to enhance and intensify the delivery of its financial education programs to reach the unserved and underserved sectors, including the AFP’s over 140,000 personnel and their families.”
“We salute and thank the men and women of the Philippine Air Force, the Philippine Army, and the Philippine Navy for your hard work and sacrifice for our country and our people – not only as peacekeepers, but also as security frontliners during the pandemic,” the BSP Governor added.
Meanwhile, Gen. Centino highlighted the importance of improving the financial well-being of soldiers and civilian personnel saying, “As we continue to adapt to the challenges posed by the COVID-19 pandemic, it is important that our personnel are financially literate and stable in order for them to focus on their jobs.”
In October 2021, the AFP issued a directive on the integration of financial literacy modules in the career courses of its officers, enlisted personnel, and civilian human resources as well as the utilization of the learning materials developed under its partnership with the BSP and BDO Foundation. The financial education partnership, which began in 2019, is in line with the BSP’s National Strategy for Financial Inclusion and BDO Foundation’s financial inclusion advocacy. The Program’s vision for the men and women of the armed forces is aptly captured in the program’s tagline, “Ang sundalo ng bayan, armado ng pinansyal na talino at kaalaman.”
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Inflation in December eased to 3.6%, the lowest in 12 months. — PHILIPPINE STAR/ MICHAEL VARCAS
By Bernadette Therese M. Gadon, Researcher
PHILIPPINE INFLATION in December eased to its lowest in 12 months, due to the slower increase in the prices of food and transport, but the full-year inflation still exceeded the central bank’s 2-4% target band.
Preliminary data from the Philippine Statistics Authority (PSA) showed headline inflation slowed to 3.6% in December, from 4.2% in November.
December’s inflation print was the slowest reading in 12 months or since the 3.5% reading in December 2020.
The headline figure is lower than the 3.9% median in a BusinessWorld poll conducted late last week, but falls within the 3.5%-4.3% estimate given by the Bangko Sentral ng Pilipinas (BSP) for the month.
However, this brought the full-year inflation average to 4.5%, higher than the 2.6% recorded in 2020, and breached the BSP’s 2-4% target band as well as the revised 4.4% forecast for the year. This was the highest print in three years or since the 5.2% logged in 2018.
BSP Governor Benjamin E. Diokno on Wednesday said he expects inflation to ease near the midpoint of the 2-4% target for this year and 2023.
“Looking ahead, the BSP stands ready to maintain its accommodative monetary policy stance to support the economy’s recovery while guarding against any emerging risks to its price and financial stability objectives,” he said in a Viber message to reporters.
SLOWER FOOD INFLATION The National Economic and Development Authority (NEDA) noted slower food inflation as the main driver of the easing headline inflation in December. In particular, inflation in vegetables, which dropped 10% from the 1.8% decline seen in November, while fish inflation eased to 7% from the previous month’s 7.9%.
Meat inflation, meanwhile, rose to 11.3% from 10.7%, partly due to a 17.9% increase in pork prices from 17.3% in November.
The prices of food and non-alcoholic beverages, which contributed 52.8% to the inflation print, eased to 3.1% in December from the previous month’s 3.9%. This group accounts for the largest chunk (38.3%) of the theoretical basket of goods and services that an average Filipino household consumes.
The food-alone index decelerated to 3.2% in December, from 3.9% in November and 4.9% in December 2020.
Transport prices, which accounted for 37.5% of December inflation, also slowed to 6.1% that month from 8.8% in November. Inflation in petroleum and fuels as well as tricycle fares decelerated to 29.4% (from 42.1% in November) and 1.7% (from 2.6%). Jeepney fares, meanwhile, declined to 0.2% from 0.5% growth in November.
Core inflation, which discounted volatile prices of food and fuel, stood at 3.6% in December — slower than the previous month’s 4.2% but higher than 3.5% a year earlier. It averaged 3.3% in 2021.
Similarly, the December inflation rate for the bottom 30% of households further slowed to 3.3% from 4.2% in November and 4.2% in December 2020. The inflation rate for this segment was the slowest in 14 months or since the 2.9% in October
For the year, inflation as experienced by poor households averaged at 4.8%, higher than 4.3% in 2020.
“With the National Capital Region (NCR) and the neighboring provinces of Cavite, Rizal, and Bulacan now under Alert Level 3, it is important to ensure affordable food prices and the continued delivery of goods and services,” Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement.
“To temper inflation in meat, especially pork, the government is working to increase local supply and ensure regular unloading of stocks from cold storages,” he added.
NEDA recommended the extension of validity of Executive Order (EO) No. 133, which allows the increase in minimum access volume for pork, to December 2022 to ensure adequate pork supply throughout the year.
“The emergence of new variants has shown us that the COVID-19 (coronavirus disease 2019) virus is not going to go away easily. The good news is even as we temporarily impose more stringent restrictions to contain the spread of the Omicron variant, we have learned to manage the risks and live with the virus. Economic prospects in 2022 still remain promising, and we urge everyone to play their role in the recovery by getting vaccinated, availing of booster shots, and strictly adhering to the minimum public health standards,” Mr. Chua said.
Metro Manila is currently under the more stringent Alert Level 3 until Jan. 15 to contain the sudden spike in COVID-19 cases.
ODETTE’S ‘LAGGED EFFECTS’ “We had expected food inflation to spike due to storm damage of up to P10 billion which could indicate that the impact on food inflation may be felt in 2022 instead,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in note sent to reporters.
Typhoon Odette (international name: Rai) ravaged the southern part of the country in December.
Based on latest estimates, total agricultural damage is at P10.8 billion.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the normalizing base effects coupled with local oil price rollbacks and non-monetary measures to secure food supply “overshadowed” the damage caused by the typhoon.
“There could still be some lagged effects by the Typhoon Odette storm damage that could have led to some temporary increase in prices/inflation in hard-hit areas especially in January 2022 or even shortly thereafter,” he said in a note sent to reporters.
The BSP said the disruptions brought by Typhoon Odette will likely result in temporary uptick in the food prices and other necessities over the near term.
“As with previous episodes of natural disasters, the effective implementation of non-monetary government intervention measures to ensure adequate domestic food supply must be sustained in order to mitigate potential supply-side pressures on inflation,” Mr. Diokno said.
“The BSP will have to include the typhoon’s impact into its projections once firm estimates become available,” he added.
ANZ Research Chief Economist Sanjay Mathur and economist Debalika Sarkar welcomed the return of December’s print to the official target band as a “positive development.”
“However, we emphasize the need to maintain vigilance as recent weather-related disturbances could have reversed this moderation. Transport prices, too, can gain momentum in January following the recent rise in crude oil prices. Yet the fading of base effects will be favorable for the headline print,” ANZ Research said in a note.
Mr. Mapa said inflation will stay “more subdued” this year.
“The PSA shift to 2018 as base year for CPI (consumer price index) inflation calculations will likely translate to a one-off favorable base effect for lower price gains this year,” he said, noting that 2018 was the last time inflation breached the central bank target.
Global oil market developments also point to moderation in crude oil prices as the Organization of the Petroleum Exporting Countries opted to increase production to help the tight market, Mr. Mapa said.
“Despite strong gains in terms of GDP (gross domestic product) growth, demand dynamics suggest that the Philippine economy continues to operate below potential with the output gap yet to be closed,” he added.
CPI REBASED TO 2018 Separately, the PSA announced the rebasing of its CPI — used to calculate the inflation rate — to a 2018 base from 2012 currently starting next month for the reporting of January 2022 inflation data onwards.
“The rebasing of the CPI is done periodically by the PSA due to the following: (1) to ensure that the CPI market basket continues to capture goods and services commonly purchased by households over time; (2) to update expenditure patterns of households; and (3) to synchronize its base year with the 2018 base year of the Gross Domestic Product and other indices produced by the PSA…,” the agency said.
Aside from the base year, the rebasing will also change the market basket, the weights, and index computation. The new weights for the 2018-based CPI were derived from the spending data of the 2018 Family Income and Expenditure Survey.
The 2018 rebasing is the 12th base period and 11th rebasing for the CPI.
Several buildings are seen amid the sunset in Metro Manila. — PHILIPPINE STAR/ MICHAEL VARCAS
LOCAL BANKS and trust entities saw a decline in their exposure to the real estate industry at the end of the third quarter of 2021, based on data from the Bangko Sentral ng Pilipinas (BSP).
Banks and trust departments have a cumulative 22.18% exposure to the property market as of end-September, well-within the 25% limit set by the central bank. It inched down from the record 22.2% exposure seen as of end-June.
“I think [this level of exposure] is not much of a concern because we are still grappling with the pandemic and it is only in the fourth quarter that much of the demand [in the sector] has returned,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
“The Omicron threat may again dampen overall demand and may eventually affect demand for real estate at least in the short term,” he added, referring to the more transmissible coronavirus disease 2019 (COVID-19) variant that is driving a fresh surge in infections.
Broken down, real estate exposure of Philippine banks edged up to 22.24% as of end-Sept. from 22.21% as of end-June.
Meanwhile, trust departments’ exposure to the property sector plunged to 14.69% as of end-September from 21.16% as of end-June.
BSP data showed that loans and investments to the real estate industry reached P2.76 billion as of end-September, higher by 8.3% from the P2.548 billion seen in the same period of 2020.
Lending to the property sector reached P2.367 billion, up 6.9% from P2.214 billion a year ago. Broken down, banks disbursed credit worth P2.356 billion, while trust department extended loans amounting to P11.5 billion.
Gross nonperforming real estate loans hit P122.812 billion, rising 32% from the P92.991 billion as of end-September 2020. This brought the ratio to 5.19%, up from the 5.15% seen at the end of the second quarter as well as the 4.2% a year prior.
Meanwhile, past due real estate loans amounted to P152.186 billion as of end-September, up 6.11% from P143.411 billion a year earlier. These borrowings accounted for 6.43% of credit to the sector, edging up from the 6.41% as of June but lower than the 6.48% seen as of end-September 2020.
Real estate investments to debt and securities amounted to P394.476 billion as of end-September, increasing by 18% from the P334.256 billion a year earlier. Investments by banks amounted to P104.969 billion, while P289.506 billion came from trust departments.
The BSP monitors lenders’ exposure to the real estate industry as part of its mandate to guide financial stability.
As part of its relief measures during the pandemic, the central bank in August 2020 raised the real estate loan limit of banks to 25% of their total loan portfolio from 20% previously. The move was done to unleash liquidity for the sector during the crisis.
Home prices in the third quarter of 2021 rose by 7.3% year on year, ending two consecutive quarters of annual decline, based on data released by the BSP last month. The higher prices was attributed to the uptick in demand for condominium units and townhouses. — Luz Wendy T. Noble
Kids play within the Baseco area in Tondo, Manila, Jan. 22, 2021. — PHILIPPINE STAR/ MICHAEL VARCAS
A SUBSIDY CAP monitoring three children per household for the Philippine government’s conditional cash transfer program has resulted in reduced household resources for the unsubsidized children who receive less schooling and health investment, an Asian Development Bank (ADB) report said.
The government’s Pantawid Pamilyang Pilipino Program (4Ps) provides cash grants for up to three children per household if they stay in school and submit to health examinations.
But an ADB report “Intrahousehold Responses to Imbalanced Human Capital Subsidies” showed that the children not monitored by the program have received less investment from households that shift their resources towards the monitored children.
“While subsidized children are caused to have increased household investment, in terms of greater aspirations, grit, health, education, and reduced child labor, unsubsidized children have reduced aspirations, lower heath investment, poorer nutrition, reduced schooling, and reduced learning as a result of the program,” the ADB said.
The report, which was released in December, was authored by ADB Economic Research and Regional Cooperation Department economist David Raitzer and ADB consultants Odbayar Batmunkh and Damaris Yarcia.
“Across a range of indicators, household resources are being withdrawn from unsubsidized children and redirected toward those who are subsidized,” the ADB said.
Under the 4Ps, parents or guardians are required to attend family development sessions. Depending on their age, children must receive preventive health checkups and vaccines, attend school, and avail of regular deworming pills.
The ADB said the 4Ps only monitored beneficiary children for educational compliance and few children for health compliance.
The beneficiary families, which have few resources, tend to maximize those resources by channeling them towards the monitored children.
“Such behavior is likely to maximize total expected income, it also means that disparities are exacerbated within families,” the ADB said.
In response, the ADB said all eligible children must be registered for educational monitoring even within the existing three-children cap.
“The 4Ps program is designed to promote investment in human capital, and those investments in terms of health are already intended to span all children. However, this is hampered by limited outreach to ensure that new pregnancies and births are registered and that health conditionalities are enforced. Were health monitoring conducted of all children, the health effects of underinvestment in certain children would be more apparent to healthcare providers,” it said.
The social assistance program could also focus on children at greater risk of dropping out of school, the ADB said.
The Philippine government’s 2022 national budget set aside P107.67 billion for the 4Ps.
The World Bank in 2020 approved a $600-million loan for the conditional cash transfer program, while the ADB has granted loans worth $500 million.
The program has over four million beneficiaries. — Jenina P. Ibañez
WASHINGTON — The International Monetary Fund (IMF) will release its World Economic Outlook on Jan. 25, a week later than planned, to factor in the latest coronavirus disease 2019 (COVID-19) developments, a spokesperson for the global lender said on Tuesday, amid signs another downgrade is coming.
“The World Economic Outlook update will be launched on Jan. 25 to allow our teams to incorporate the latest developments related to the COVID-19 pandemic into the economic forecasts,” the spokesperson said.
IMF spokesperson Gerry Rice last month told reporters to expect the update on Jan. 19.
Managing Director Kristalina Georgieva last month told the Reuters Next conference that the IMF was likely to further downgrade its global economic growth projections in January to reflect the emergence of the Omicron variant of the coronavirus.
In October, the IMF had forecast global economic growth of 5.9% in 2021 and 4.9% this year, while underscoring the uncertainty posed by the new coronavirus variants.
The coronavirus has killed nearly 5.8 million people worldwide over the past two years.
Economists expect the IMF to cut its economic forecast for the United States, the world’s largest economy, given the rapid spread of the highly contagious Omicron variant, as well as the failure of Congress to pass US President Joseph R. Biden’s $1.2-trillion social and climate spending package.
In October, it had already slashed its forecast for US gross domestic product growth in 2021 by a full percentage point to 6%, citing supply chain disruptions and a labor crunch, while forecasting growth of 5.2% in 2022.
Since then, the pandemic has surged again, and divisions in Congress have deepened.
The United States set a global record of almost one million new coronavirus infections on Monday, according to a Reuters tally, and its daily average has totaled 486,000 cases over the last week, a rate higher than that of any other country. — Reuters
THE Securities and Exchange Commission (SEC) has issued advisories against three entities offering unlicensed investment programs to the public.
In two advisories dated Jan. 4, the regulator flagged TuneGaga and OUTRACE “Play to Earn” for soliciting investments without authority from the SEC.
The regulator warned that the schemes offered by the two entities resemble a Ponzi scheme, “which is fraudulent and unsustainable, is not a registrable security.” Investments of newer investors are used to pay off “fake profits” of those part of the scheme earlier.
TuneGaga is not registered with the commission and it also does not have the license to offer investments to the public. The commission said it is luring investors through social media and through their independent website, which no longer works as of writing.
“TUNEGAGA/TuneGaga is a mobile application that can be downloaded in Google Play Store,” the SEC said in its advisory dated Jan. 4.
Users of the mobile application can allegedly earn extra income by just listening to music of their own choice. TuneGaga’s investors can supposedly earn weekly through its various subscription plans “with corresponding tasks.”
BusinessWorld reached out to TuneGaga for comment, but it has yet to receive a response as of press time. According to user comments of its app on Google Play, users have been experiencing problems on the app since late November.
Meanwhile, the SEC said OUTRACE is being run by another SEC-flagged entity, BCPay Financial Technology, Inc.
The regulator said OUTRACE is promising high returns for its players and “OUTRACE $ORE” token holders via acquiring its in-game non-fungible tokens (NFT) while on pre-sale and through initial coin offering for a cheaper price.
OUTRACE is luring investors “on the pretext that both will considerably increase in value once the $ORE is listed on public exchanges.” However, the entity is not registered with the SEC. It is also not licensed to solicit investments and it does not have the appropriate registration to offer or sell securities to the public.
OUTRACE is not registered with the Bangko Sentral ng Pilipinas (BSP) and it also does not have a certificate of authority as a money service business (MSBs) as required under the Guidelines for Virtual Asset Service Providers of the BSP.
“Likewise, its name does not appear among those listed as registered MSBs as of January 2021 with the Anti-Money Laundering Council under the Anti-Money Laundering Act, as amended,” the SEC said its advisory against OUTRACE dated Jan. 4.
On the other hand, UP-Mass Innovative Marketing Corp. or UMIM Corp. was also flagged by the commission for its unauthorized investment solicitation activities. Its program has members “invest, wait, and earn without having to do anything.”
“It has come to the attention of the commission that purportedly, [UP-MASS Innovative Marketing or UMIM] has acquired MassDrop and MDM Ventures Corp. and those who invested with the two corporations are being offered three options under the ‘transition’ program,” the commission said.
The SEC recently revoked the registrations and the certificates of incorporation of MassDrop and MDM Ventures after being found that their unlicensed investment programs also resembled a Ponzi scheme.
While UMIM is registered with the SEC, it does not have the required secondary license. Its articles of incorporation also explicitly state that the entity should not collect or take investments from the public nor shall it issue investment contracts.
The SEC is calling on the public to report any information on the operations of the three entities.
