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World food price index falls for fifth month in August

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PARIS — The United Nations food agency’s world price index fell for a fifth month in a row in August, further from all-time highs hit earlier this year, as a resumption of grain exports from Ukrainian ports contributed to improved supply prospects.

The Food and Agriculture Organization (FAO) said on Friday that its price index, which tracks the most globally traded food commodities, averaged 138.0 points last month versus a revised 140.7 for July.

The July figure was previously put at 140.9.

The index has fallen from a record of 159.7 in March, hit after Russia’s invasion of Ukraine. The August reading was, however, 7.9% higher than a year earlier.

FAO’s cereal price index fell 1.4% month on month in August, with the reopening of Ukrainian Black Sea ports under a diplomatic deal as well as favorable wheat harvest prospects in North America and Russia weighing on prices, the agency said.

But the maize price index rose 1.5% last month as hot, dry weather reduced the outlook for production in Europe and the US, it said. The vegetable oil, sugar, dairy and meat price indices all fell, partly reflecting improved supplies.

In separate cereal supply and demand estimates, FAO lowered its forecast for global cereal production in 2022 to 2.774 billion tons from a previous projection of 2.792 billion in early July. That is 1.4% below estimated output for 2021.

The cut to its prediction for 2022 cereal production was due to the weather-reduced corn prospects in the northern hemisphere, with European Union yields notably seen falling 16% below their five-year average, FAO said.

World cereal use in 2022/23 is expected to surpass production at 2.792 million tons, leading to a projected 2.1% fall in global stocks compared with 2021/22 to 845 million tons. That would represent a stocks-to-use ratio of 29.5%, down from 30.9% in 2021/22 but still relatively high historically, FAO said. — Reuters

BBC donates $1.6 M to charity over Diana interview

PRINCESS DIANA — RUSS QUINLAN/ EN.WIKIPEDIA.ORG

LONDON — The BBC said on Friday it had donated to charities £1.42 million ($1.64 million) of sales it made from an interview that it conducted with Princess Diana in 1995 and which was obtained after deceit by one of its journalists.

The broadcaster last year came under fire from critics, including Prince William, after an inquiry concluded that it tried to cover up the deceptive tactics used by its journalist Martin Bashir to secure the interview with Diana.

“The BBC had indicated its intention to donate to charity the sales proceeds derived from the 1995 Panorama interview with Diana, Princess of Wales,” the corporation said.

“The BBC has now done so. Given the findings of (the inquiry), we think this is the right and appropriate course of action.”

The donation was divided equally between seven charities linked with the late princess, including public health and homelessness organizations, the English National Ballet, and The Diana Award.

This year marks 25 years since the 1997 car accident that killed Diana, the anniversary of which was observed last Wednesday. — Reuters

National Government outstanding debt

THE NATIONAL Government (NG) debt hit another record as of end-July, but economists expressed concern whether the government can generate enough revenues for the eventual repayment of the large borrowings incurred during the pandemic. Read the full story.

National Government outstanding debt

PLDT dips after ABS-CBN–TV5 deal ends

BW FILE PHOTO

MARKET PLAYERS were cautious of PLDT, Inc. last week after its affiliate company’s landmark partnership with former broadcast giant ABS-CBN Corp. was terminated.

Data from the Philippine Stock Exchange showed the telecommunications giant trading P686.13 million worth of 409,460 shares from Aug. 30 to Sept. 2, making it the 11th most actively traded stock last week.

The stock’s price slid by 2.5% to close at P1,669 per share last Friday on a week-on-week basis. Similarly, PLDT has declined by 2.5% since the start of the year.

“PLDT fell last week due to the news that its unit TV5 Network, Inc. had terminated a landmark investment deal with ABS-CBN Corp., as well as investors being concerned about external factors, specifically concerns that the US Federal Reserve would continue to tighten policy aggressively,” Marc Kebinson L. Lood, Timson Securities, Inc. head of online trading said in a Viber message.

Manuel V. Pangilinan-led MediaQuest Holdings, Inc., a unit of PLDT Beneficial Trust Fund, is the parent company of TV5.

The investment deal between the Lopez-owned media company and TV5, signed last Aug. 10, was scrapped last Thursday.

The landmark deal would have let ABS-CBN buy a 34.99% stake in TV5 for P2.16 billion.

The two companies also ended their subsidiaries’ agreement. Cignal Cable Corp. was supposed to acquire a minority 38.88% stake in Sky Cable Corp. worth P2.86 billion.

The underwriting could have opened revenue-generating “synergies,” but lawmakers questioned the contract’s legality.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message that politics just entered the conversation but should not “take away anything from its core business” and shall be seen as a strategic move for both parties to avoid any “significant blow.”

Both analysts said traders should keep an eye on the telco group’s latest launch of Tindahan Ni Bossing (TINBO).

Last week, PLDT Global Corp., the technology services arm of PLDT, announced the launch of TINBO, a one-stop gateway for overseas Filipino workers (OFWs). This payment medium allows Filipino employees abroad to manage personal transactions for their families.

A TINBO virtual number, which lets the user receive calls and texts, enables them to receive a secured one-time password for bills payment, e-government services, and other related transactions.

Other than finances, the TINBO number can also be used to buy prepaid loads for cellular phones, Pay TV, and internet needs.

Mr. Lood said traders are still testing the waters on TINBO’s developments as a payment medium for OFWs.

“In the long term, we expect it to be a convenient way for OFWs to manage their finances and a widely used fintech, potentially bringing in more revenue for PLDT,” he said.

“In the short term, we believe it will have little impact on PLDT’s revenue because only a small percentage of OFWs will have access for the time being, and there are already existing Fintech mobile applications in the Philippines and abroad that OFWs are using,” Mr. Lood said.

The net income attributable to equity holders of PLDT increased by 7.6% year on year in the second quarter to P7.66 billion. This brought the first-half attributable net earnings to P16.74 billion, a 29.6% jump from the same period last year.

Service revenues picked up by 7% to P49.13 billion in the second quarter. In the six months to June, service revenues rose by 6% to P97.10 billion.

Mr. Lood expects PLDT’s net income to reach P33.56 billion by yearend.

He sees the stock’s support level to stay at P1,650 while resistance at P1,830 for this week.

Mr. Arce, for his part, projects the telco company’s net earnings in the third quarter to hit P6.9 billion, while full year at P31.4 billion.

For the week, he also pegs PLDT’s support price at P1,650.00 and resistance at P1,775 to P1,800.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest, has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ana Olivia A. Tirona

How PSEi member stocks performed — September 2, 2022

Here’s a quick glance at how PSEi stocks fared on Friday, September 2, 2022.

Peso may rise ahead of inflation data

BW FILE PHOTO

THE PESO may rebound against the dollar this week as its recent decline and expectations of still-elevated August inflation may prompt the Bangko Sentral ng Pilipinas (BSP) to continue hiking borrowing costs.

The local unit closed at a new all-time low of P56.77 on Friday, weakening by 35 centavos from its P56.42 finish on Thursday, data from the Bankers Association of the Philippines showed. This eclipsed the previous record of P56.45 set in 2004.

For the year so far, the peso has weakened by P5.77 or 11.31% from its Dec. 31, 2021 close of P51 per dollar, making it the third worst performer in Asia in 2022, after the Japanese yen and South Korean won.

Week on week, the local unit sank by 75 centavos from its P56.02 close on Aug. 26.

The peso opened Friday’s session at P56.50 per dollar, which was also its intraday best. Its weakest showing was at P56.90 against the greenback.

Dollars exchanged dropped to $936.95 million on Friday from $1.09 billion on Thursday.

The peso weakened on Friday amid hawkish signals from the US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Fed Chair Jerome H. Powell last month said the US central bank will continue hiking rates and keep them elevated to bring inflation back within its target. The Fed has raised rates by 225 basis points (bps) so far since March.

The peso also weakened on “the expected seasonal increase in importation in Q3 in preparation for the expected increase in sales during the holiday season in Q4,” Mr. Ricafort said.

Still, the peso could be supported by the traditional increase in remittances and export sales during the holiday season in the Philippines, he said.

For this week, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the peso may rebound ahead of the release of August inflation data, which could provide clues about the BSP’s next move.

Mr. Asuncion said high inflation and the peso’s recent depreciation may give the central bank a reason to continue hiking benchmark interest rates. Another off-cycle move may even be in the cards if the peso posts massive losses against the dollar, he added.

BSP Governor Felipe M. Medalla on Friday said the Fed’s next policy move will be a “big factor” to consider for the Monetary Board at their Sept. 22 meeting, especially as the US central bank will also meet on Sept. 20-21.

“You cannot not react to what the Fed is doing,” Mr. Medalla said during the virtual Reuters NEXT Newsmaker event on Friday. “We are concerned about the effects of the exchange rate on inflation.”

He noted that the peso’s recent decline was due to the dollar’s continued strength amid rate hike expectations in the world’s largest economy.

The BSP has hiked benchmark rates by 175 bps since May to keep rising prices in check. It sees inflation averaging 5.4% this year, beyond its 2-4% target.

Headline inflation hit a near four-year high of 6.4% in July, bringing the seven-month average to 4.7%.

A BusinessWorld poll of 13 analysts yielded a median estimate of 6.4% for August inflation, well within the BSP’s 5.9-6.7% forecast for the month and unchanged from July pace.

For this week, Mr. Ricafort expects the local unit to move from P56.50 to P56.90 per dollar, while Mr. Asuncion gave a wider and lower forecast range of P56.20 to P56.80. — Keisha B. Ta-asan

Volatile trading seen ahead of Aug. inflation data

BW FILE PHOTO

SHARES may continue to climb this week on sustained bargain hunting, but trading may be volatile as investors await the release of August inflation data.

The Philippine Stock Exchange index (PSEi) went up by 104.37 points or 1.58% to close at 6,692.65 on Friday, while the broader all shares index rose by 50.49 points or 1.44% to 3,548.53.

Week on week, the PSEi declined by 59.85 points or 0.89% from its close of 6,752.50 on Aug. 26.

“The index posted a strong uptick [on Friday] as bargain hunters picked up shares following the recent pullback, which resulted in the successful test of the 6,500-6,600 support level,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail.

“The local market ended the week on a strong note, almost erasing a 183-point drop midweek, as investors repositioned ahead of US labor data,” online brokerage 2TradeAsia said in a report.

For this week, Mr. Mercado said that the market could move with an upward bias early on amid momentum from Friday’s climb.

“We see [Friday’s] bullish momentum carrying over into the early part of next week following the successful test of the 6,500-6,600 support,” Mr. Mercado said.

However, this upward momentum will likely be accompanied by higher volatility as investors react to key economic data, he said. These include US job data released on Friday and the August Philippine inflation report set to come out on Sept. 6, Tuesday,

The US Labor department’s employment report released on Friday showed nonfarm payrolls increased by 315,000 jobs last month after surging 526,000 in July, marking the 20th straight month of job growth.

Meanwhile, a BusinessWorld poll of 13 analysts yielded a median estimate of 6.4% for August inflation, within the 5.9-6.7% forecast of the Bangko Sentral ng Pilipinas and steady from the July level.

If realized, it would exceed the central bank’s annual 2-4% target for the fifth straight month and its 5.4% forecast, and would also be quicker than the 4.4% print in the same month last year.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said hawkish signals from the US Federal Reserve will continue to affect the local market.

“The aggressively hawkish policy outlook of the Federal Reserve is still expected to weigh on the local market [this] week, especially if the rise in US interest rates and the decline in Philippine peso continues,” Mr. Tantiangco said in a Viber message.

The peso closed at a new all-time low of P56.77 on Friday, down by 35 centavos from its P56.42 finish on Thursday, data from the Bankers Association of the Philippines showed.

Year to date, the peso has weakened by P5.77 or 11.31% from the P51 close on Dec. 31, 2021.

China Bank Securities’ Mr. Mercado placed the PSEi’s support at the 6,500-6,600 range and resistance at 6,900, while Philstocks Financial’s Mr. Tantiangco put support at 6,600 and immediate resistance at its 200-day exponential moving average of 6,734.81. — Justine Irish D. Tabile

Customs exceeds August collection target by 34.1%

THE Bureau of Customs (BoC) said on Sunday that it exceeded its August collection target by 34.1%, which it credited to the digitalizing and streamlining of its processes, and as imports rose following the reopening of the economy.

In a statement, the BoC said August collections hit P78.902 billion, exceeding the target of P58.849 billion. This is the eighth consecutive month it has exceeded its monthly target.

It collected P77.9 billion from 17 ports, all of which surpassed their targets by a combined P15.8 billion or 25%.

The rest of the revenue consists of P248.2 million from the Post Clearance Audit Group and P677.4 million from the Tax Expenditure Fund.

As early as Aug. 25, the BoC said it had exceeded its revenue target for the month.

In the first eight months of the year, the BoC collected P559.2 billion, surpassing by 35.6% the P412 billion collection target for the period.

On Wednesday, Budget Secretary Amenah F. Pangandaman said that P3.56 billion of the 2023 proposed national budget will be allocated for the digital transformation programs of the BoC and the Bureau of Internal Revenue.

“We will prioritize digitalization and accelerate digital transformation… the improvement of revenue collection through digitalization will also be a priority,” Ms. Pangandaman said, noting that the amount is equivalent to 28.6% of the Department of Budget and Management’s proposed P12.4 billion for information and communications technology projects.

The World Bank is currently supporting the digitalization of the BoC through a $88.28-million facility for the Philippine Customs Modernization Program.

The BoC was given a P765.59-billion collection target for 2023, up 6.11%. — Diego Gabriel C. Robles

Tourism industry understaffed for ‘revenge travel’

Back to almost normal. Fans who waited for the arrival of K-pop act Super Junior at the Suvarnabhumi International Airport begin to disperse after midnight. On the whole, Thais displayed mask discipline — perhaps equal or even better than our own. — PHOTO BY KAP MACEDA AGUILA

By Luisa Maria Jacinta C. Jocson, Reporter

THE tourism industry is struggling to staff up for the wave of “revenge travel,” with many employees from businesses that shut down having moved on to other jobs, the travel agency industry association said.

“The biggest problem is we lack frontliners. The travel agencies that closed (saw their) employees look for other jobs. Now that the business is back because of revenge travel, it’s not easy for them to get their old employees back,” Philippine Travel Agencies Association (PTAA) President Michelle G. Taylan said during a press conference on Friday.

“We are now getting back to where we used to be… We are in need of tourism frontliners so that means jobs in the tourism industry are coming back,” she added.

Ms. Taylan said that the industry is hoping to promote destinations in Mindanao and others that are less well known or commercial.

“Mostly we will be promoting provinces, especially those not widely visited,” she said.

“We have to promote the entire Philippines, not just popular destinations like Boracay,” she added.

According to the PTAA, the top travel destinations this year are Boracay, Palawan, Siargao, and Cebu.

Ms. Taylan said many PTAA members are urging the government to establish a tourist police force and reduce fees for business permit applications.

“Our board members keep mentioning tourist police in order to clean out all the illegal travel agencies,” she said.

“As we are at the peak of the recovery, we are asking for business permits for travel agencies and discounts on taxes from local government units, especially for those not able to renew their permits during the pandemic. If they are going to renew next year, the penalty will be very big,” she added.

Tourism Secretary Maria Esperanza Christina G. Frasco said in speech on Friday that the pace of the industry’s recovery is “promising.”

“As of today, we have over 1.3 million arrivals (since borders reopened). We welcome the recovery of the tourism sector with optimism and hope. The industry is a major economic pillar for our nation’s recovery,” she added.

For 2023, Ms. Taylan projected arrivals to double or triple.

“I am just basing it off the number of bookings. Based on the experience of our members, they are overflowing with bookings,” she added.

Air quality worst in Benguet, Rizal, Metro Manila, Greenpeace says

DOT.GOV.PH

BENGUET, Rizal, and Metro Manila are at the bottom of the air quality standings, with over 97% of their population exposed to some of the highest particulate matter (PM) concentrations in the entire country, Greenpeace said in a report.

All Filipinos are exposed to air that fails to meet World Health Organization (WHO) guidelines, Greenpeace said. The WHO considers air of acceptable quality to contain no more than 5 micrograms of PM per cubic meter of air (5 µg/m3), it said in a report issued on Sept. 2.

However, Benguet, Rizal, and Metro Manila average 25 µg/m3, the non-government organization said.

PM refers to fine inhalable particles. Particles of about 2.5 micrometers are referred to as PM2.5, the industry standard for airborne pollutants.

To address the air quality problem, Greenpeace supports a phaseout of fossil-based energy projects and a reliable energy source that does not depend on imports.

Greenpeace Campaigner Khevin Yu told BusinessWorld by phone over the weekend that the argument against imported fuel is also economic because “Right now, in terms of fossil gas prices here and globally, it is expensive.”

“Improving air quality is not only a matter of ensuring health and justice, but also of addressing the climate crisis and eliminating the common denominator — our country’s dependence on dirty energy,” Mr. Yu said in a statement released earlier.

A separate report issued by the Global Wind Energy Council (GWEC) and the Global Solar Council (GSC) highlighted the dangers of fossil fuel dependence, as reflected in the current energy crisis.   

GWEC and GSC said governments need to encourage public and private investment in clean energy.

Michael O. Sinocruz, director of the Energy Policy Planning Bureau at the Department of Energy (DoE), said in an e-mail on Sept. 1 that net-zero goals imply a 100% share of renewable energy (RE) in the power generation mix, or an effort to “blend renewable energy with other emerging clean energy technologies.”

Currently, the DoE is targeting an RE share of 30% in the energy mix by 2030 and 50% by 2040. — Ashley Erika O. Jose

GOCC subsidies rise 398.78% in July

SUBSIDIES provided to government-owned and -controlled corporations (GOCCs) rose 398.78% year on year to P30.321 billion in July, the Bureau of the Treasury (BTr) reported.

Budgetary support to GOCCs also rose 145.95% compared to the June total. Subsidies amounted to P75.01 billion in the first seven months, according to preliminary data from the BTr.

Subsidies are extended to GOCCs to cover operational expenses not supported by their revenue.

The Philippine Health Insurance Corp. (PhilHealth) was the top recipient, taking in P22.462 billion or 74.08% of all subsidies in July. It did not receive subsidies prior to July.

The National Irrigation Administration (NIA) received P5.872 billion in July, with its seven months to July total at P24.218 billion to lead all GOCCs.

The National Privacy Commission received P400 million, against zero the preceding month.

Other top recipients in July were the Development Academy of the Philippines (P214 million), the Light Rail Transit Authority (P162 million), the Sugar Regulatory Administration (P157 million), the Philippine Heart Center (P153 million), and the National Food Authority (P137 million).

Other GOCCs that were given at least P50 million were the National Kidney and Transplant Institute (P107 million), the Philippine Children’s Medical Center (P105 million), the Philippine Coconut Authority (P100 million), the Philippine Rubber Research Institute (P74 million), the Lung Center of the Philippines (P58 million), and the National Tobacco Administration (P50 million).

The Local Water Utilities Administration, the National Electrification Administration, and the National Housing Authority (NHA) were among the major nonfinancial GOCCs that did not receive subsidies.

Other GOCCs that received no subsidies during the month were the Bases Conversion and Development Authority, the Civil Aviation Authority of the Philippines, the Philippine Crop Insurance Corp., the Philippine Fisheries Development Authority, the Small Business Corp., the Subic Bay Metropolitan Authority, and the Social Housing Finance Corp.

In the seven months to July, subsidies fell 20.51% from a year earlier.

The NIA accounted for 32.29% of the total, followed by PhilHealth and the NHA, which got P22.462 billion and P8.941 billion respectively.

Government subsidies to GOCCs totaled P184.77 billion in 2021, a 19.3% decline from the previous year. In 2021, the PhilHealth received P80.98 billion, nearly 44% of the total. — Diego Gabriel C. Robles

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