Philippines’ factory output lowest in 13 months
APRIL FACTORY ACTIVITY eased to its slowest pace in 13 months, as factories grappled with higher production costs due to supply chain issues and soaring fuel prices. Read the full story.
MR.D.I.Y to launch 11 new stores
HOME improvement store MR.D.I.Y is set to launch 11 new stores across the country during its grand opening from June 17 to 19.
The stores are located in Dagupan City, Pangasinan; Cabanatuan City, Nueva Ecija; Rodriguez, Rizal; Sta. Cruz and Biñan, Laguna; Quezon City; Caloocan City; Makati City; Paseo Arcenas Estate and Minglanilla, Cebu City; and Mactan City.
MR.D.I.Y has more than 2,000 stores across Malaysia, Thailand, Indonesia, Singapore, Brunei, Philippines, Cambodia, India, Turkey and Spain.
The retailer said it is working to make “a positive difference in the lives of its valued customers by offering convenience at all its stores nationwide.”
It also said that it “strives to put customers first by operating an innovative business that is flexible when it comes to providing a wide variety of products, good quality, and value-for-money, holding true to the company’s motto of ‘Always low prices.’”
The company said that all stores are managed directly and often work in collaboration with other mass merchandise retailers or owners of malls or shopfront properties.
MR.D.I.Y has a selection of approximately 18,000 stock-keeping units across five major categories: hardware; household and furnishing; electrical; stationery and sports equipment products; and others, comprising toys, car accessories, jewelery, and cosmetics. — Luisa Maria Jacinta C. Jocson
How PSEi member stocks performed — June 9, 2022
Here’s a quick glance at how PSEi stocks fared on Thursday, June 9, 2022.
Peso at over three-year low as fare hike adds to inflation risks
THE PESO weakened to an over three-year low against the dollar on Thursday as an increase in the minimum jeepney fare in Metro Manila and other regions took effect, adding to already mounting inflation concerns.
The local unit closed at P52.95 against the dollar, losing 3.5 centavos from its P52.915 finish on Wednesday, data from the Bankers Association of the Philippines showed.
This was its weakest close in over three years or since it finished at P53.10 on Dec. 20, 2018.
The peso opened Thursday’s session weaker from its previous close at P52.95 versus the dollar. Its weakest showing was at P52.97, while its intraday best was at P52.90 against the greenback.
Dollars exchanged increased to $732.62 million on Thursday from $635.56 million on Wednesday.
The local unit weakened as the minimum jeepney fare was hiked effective on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The Land Transportation Franchising and Regulatory Board (LTFRB) on Wednesday approved a P1 provisional minimum fare increase for public utility jeepneys in Metro Manila, Central Luzon and Calabarzon.
The fare hike took effect on Thursday.
This was in response to petitions filed by different transport groups amid a series of oil price hikes driven by supply chain disruptions brought by the ongoing conflict between Ukraine and Russia.
Higher fares pose another upside risk to inflation, with the headline print already reaching 5.4% in May, the fastest since the 6.1% seen in November 2018, due to rising food and transport costs.
Year to date, inflation has averaged 4.1%. This is lower than the central bank’s 4.6% forecast but above its 2-4% target for the year.
The peso also weakened as the Organization for Economic Cooperation and Development (OECD) cut its global economic outlook, Mr. Ricafort said.
The OECD, a group composed of largely wealthy nations, now expects the global economy to expand 3% in 2022, down from the 4.5% outlook in December, due to soaring global inflation.
For Friday, Mr. Ricafort expects the peso to move between P52.85 and P53 against the dollar. — KBT
Shares end lower on inflation fears, trade data
STOCKS declined on Thursday on inflation fears due to high oil prices and a weaker peso and following the release of local trade data for April.
The benchmark Philippine Stock Exchange index (PSEi) dropped by 11.03 points or 0.16% to close at 6,758.59 on Thursday, while the broader all shares index went down by 4.18 points or 0.11% to 3,600.66.
“The market declined as inflation worries dominated sentiment amid the rising international oil prices and the weakening of the peso,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said most regional markets were down due to higher oil prices that could continue to cause inflationary pressures.
Oil prices gave up early gains on Thursday after parts of Shanghai imposed new coronavirus disease 2019 (COVID-19) lockdown measures, outweighing news of China’s stronger-than-expected exports in May, Reuters reported.
Brent crude futures for August dipped 15 cents or 0.1% to $123.43 a barrel at 0630 GMT, while US West Texas Intermediate crude for July was at $121.91 a barrel down 20 cents or 0.2%.
Both benchmarks closed on Wednesday at their highest since March 8, matching levels seen in 2008.
Meanwhile, Philstocks Financial’s Mr. Tantiangco said investors also priced in the latest trade data.
The country’s trade-in-goods deficit narrowed in April as import growth eased to 13-month low, the Philippine Statistics Authority (PSA) reported on Thursday.
Preliminary PSA data showed the value of merchandise exports grew by 6% year on year to $6.129 billion in April.
Meanwhile, the country’s merchandise imports rose by 22.8% to $10.902 billion that month.
This brought the April trade-in-goods deficit to $4.773 billion, wider than the $3.098-billion shortfall recorded a year ago but narrower than the $5.007-billion gap in March.
Year to date, the trade balance ballooned to a $18.668-billion deficit, from a $11.442-billion trade gap in the comparable four months last year.
The majority of sectoral indices ended in the red except for industrials, which gained by 98.32 points or 1.06% to 9,293.68.
Meanwhile, services declined by 28.53 points or 1.54% to 1,819.16; mining and oil fell by 152.46 points or 1.22% to 12,269.82; holding firms lost 20.35 points or 0.32% to end at 6,254.18; financials gave up by 3.65 points or 0.22% to finish at 1,621.52; and property dropped by 1.59 points or 0.05% to 3,179.40.
Decliners beat advancers, 97 versus 79, while 56 names ended unchanged.
Value turnover dropped slightly to P5.29 billion with 827.76 million shares changing hands from the P5.37 billion with 744.91 million issues seen the previous trading day.
Net foreign selling climbed to P349.61 million on Thursday from the P156.68 million seen on Wednesday. — Luisa Maria Jacinta C. Jocson
Marcos, US envoy discuss free, open Indo-Pacific
PRESIDENT-ELECT Ferdinand R. Marcos, Jr. on Thursday talked about preserving a free and open Indo-Pacific during a meeting with the United States’ No. 2 diplomat, Washington said in a statement on Thursday.
He and US Deputy Secretary of State Wendy Sherman, who is visiting the Philippines and several Asian countries this month, also talked about boosting economic ties, human rights and regional security, it added.
The US State Department said Mr. Marcos and Ms. Sherman “highlighted the importance of the US-Philippine alliance to security and prosperity in the Indo-Pacific region and the world, and the importance of fostering respect for human rights and rule of law in the Philippines.”
“We discussed strengthening our longstanding alliance, expanding people-to-people ties, deepening our economic relationship, advancing human rights and preserving a free and open Indo-Pacific,” she tweeted separately.
The Philippines is the oldest security ally of the US in Southeast Asia and one of the five treaty allies of the US in the Pacific region. They have a Mutual Defense Treaty signed in 1951, under which both are constrained to support each other in case of an external attack.
Philippine President Rodrigo R. Duterte has derided the United States during much of his six-year term putting one of America’s oldest alliances in Asia on the back foot. He led a pivot toward China, with which he sought closer trade and investment ties.
The tough-talking leader had threatened to cancel a two-decade military pact with the US on the deployment of troops for war games. The visiting forces agreement makes it easier for US troops and ships to operate in the Philippines, including conducting large combat exercises that have alarmed China.
Mr. Marcos and Ms. Sherman had “agreed on the importance of partnering together to strengthen our economies, including the importance of public-private partnerships, clean energy and our digital economy,” Ned Price, State department spokesman, said in the statement.
“They discussed opportunities for our two nations to deepen our alliance and friendship and seize new opportunities to deliver for our people in the years to come,” he added.
Philippine Ambassador to the US Jose Manuel G. Romualdez, incoming Executive Secretary Victor D. Rodriguez and Foreign Affairs Undersecretary Ma. Theresa P. Lazaro also attended the meeting.
Ms. Sherman is also set to visit South Korea, Laos and Vietnam.
“The deputy secretary’s travel to the region reflects the United States’ continued commitment to the Indo-Pacific,” the US State Department said in a statement earlier.
Ms. Sherman’s Asia trip followed the US-Association of Southeast Asian Nations Special Summit in May, US President Joseph R. Biden, Jr.’s visit to South Korea and Japan, the Quad Leaders’ Summit in Tokyo, and the launch of the Indo-Pacific Economic Framework.
Leaders of Japan, Australia, the US and India — members of the so-called Quad alliance — last month said they oppose all attempts to “change the status quo by force, particularly in the Indo-Pacific.”
The statement came amid international pressure on Russia to stop its invasion of Ukraine, and a growing concern about whether China could try to seize self-ruled Taiwan.
Mr. Marcos earlier said the Philippines under his administration would join a US-backed economic framework for the Indo-Pacific that Washington crafted to counter China’s growing influence in the region.
Experts have said it remains to be seen whether Mr. Marcos would pursue closer ties with China since the US has elevated efforts to take its alliance with the Philippines to the next level.
Mr. Biden last month spoke with Mr. Marcos on the phone to congratulate him on his landslide election. He also looked forward to “working with the president-elect to continue strengthening the US-Philippine alliance,” the White House said earlier.
The US leader also wanted to expand bilateral cooperation on issues including the fight against the coronavirus, addressing the climate crisis, promoting broad-based economic growth and respect for human rights, it added.
Also on Thursday, Clarita R. Carlos, who will become Mr. Marcos’ national security adviser, said the incoming government would confront the Maoist insurgency by solving social injustice.
The government would not gain anything from labeling some people as communists, she told GMA News.
“Perhaps let’s not use labels,” she said. “We gain nothing if we keep on labeling people.
Ms. Carlos, a retired University of the Philippines professor, said the Marcos government would try to solve the decades-old insurgency by providing more social opportunities. “National security is human security. It should also be about the threats to your life as an individual.” — Norman P. Aquino and Kyle Aristophere T. Atienza
Philippine agents investigating Mindanao blasts
THE NATIONAL Bureau of Investigation (NBI) has started investigating the recent bus bombings in southern Philippines, as it tries to prevent the terror acts from spilling into Manila, the capital, it said in a statement on Wednesday evening.
“The bureau’s probe on the series of bombings is directed at ensuring national security as well as preventing possible major attacks not only in Mindanao but also in the entire country,” it said. “Extortion and terrorism are the motives of the bombing based on information gathered.”
NBI Officer-in-Charge Eric B. Distor, the bureau’s counter-terrorism division and a forensics team have traveled to Mindanao for the probe.
There have been six bombing incidents on bus lines in the region in the past two years, with four happening this year, NBI said.
The first of the bus bombings this year took place on Jan. 11 in the town of Aleosan, North Cotabato, killing a five-year-old boy and wounding three others. On April 24, a bus exploded in Parang, Maguindanao, injuring at least three passengers.
The most recent bombings happened on May 26 in Koronadal City, South Cotabato, hurting two civilians. The NBI also cited a separate roadside bombing on the same day in Tacurong, Sultan Kudarat.
The series of bombings started on Jan. 7 last year, when a local bus operator in Koronadal City received a bomb threat call and an extortion demand from an anonymous caller.
Local police found an improvised explosive device inside one of the buses. CCTV footage showed two male passengers leaving the device inside the bus.
Another attack took place on June 3 last year when a bus was burned in the town of M’lang, North Cotabato, killing three and wounding six other people.
Last week, a suspect in the bombing incidents was killed in a clash with police and military troops in M’lang, according to the Armed Forces of the Philippines.
The suspect was identified as a member of the Dawlah Islamiyah terrorist group in Maguindanao province. — John Victor D. Ordoñez
Justice chief seeks smooth turnover to incoming gov’t
OUTGOING Justice Secretary Menardo I. Guevarra on Thursday met with his successor to ensure a seamless turnover of responsibilities at agency.
“This meeting is important to ensure a smooth transition of leadership and uninterrupted operations at the Department of Justice (DoJ),” he told reporters in a Viber message on Thursday.
He said he might meet with incoming Justice Secretary Jesus Crispin C. Remulla again for consultations.
Mr. Remulla earlier vowed to fast-track criminal cases by developing a digital database to keep track of the jail sentences of all prisoners.
He also vowed to abide by the Constitution when he assumes office amid worries from various human rights groups over his history of accusing individuals of being communists.
During the campaign period, he linked supporters of Vice President Maria Leonor G. Robredo to the Maoist movement.
Political experts have said activists might have a hard time defending themselves if Mr. Remulla became the Justice secretary.
“While he is a lawyer by training, he spent most of his time as a politician,” Maria Ela L. Atienza, who teaches political science at the University of the Philippines, said in Viber message. “It is important to monitor his performance as the Justice secretary.”
As Justice chief, the former congressman will become a member of the newest anti-terror law’s Anti-Terrorism Council. He will also head a committee that investigates the killings of activists and dissenters.
The DoJ has faced increasing pressure from domestic and international groups to prosecute more rogue cops.
The Philippine Human Rights Commission said the Duterte government had encouraged a culture of impunity by hindering independent inquiries and by failing to prosecute erring cops involved in the government’s deadly drug war. — John Victor D. Ordoñez
Bongbong won’t get arrested if he visits US
By Kyle Aristophere Atienza
Philippine President-elect Ferdinand “Bongbong” R. Marcos, Jr. may visit the US without being arrested, according to a high-ranking American diplomat..
US Deputy Secretary of State Wendy Sherman, who met with Mr. Marcos earlier in the day, said his election as Philippine president allows him to go to the US without being arrested for a $353-million contempt order against his family in connection with a human rights lawsuit.
“When you are head of state, you have immunity in all circumstances and are welcomed to the United States in your official role,” she told reporters in Manila.
The diplomatic immunity, which is given to heads of states, would only cover Mr. Marcos, not his entire family.
The US Court of Appeals has ordered Mr. Marcos and her mother Imelda to pay $353.6 million for violating a US court order not to dissipate their assets, which have been earmarked as compensation for the victims of his father’s martial rule.
DAR nominee Estrella to focus on increasing farmer incomes
CONRADO M. ESTRELLA III, President-elect Ferdinand R. Marcos, Jr.’s nominee for the Department of Agrarian Reform (DAR), said on Thursday that his policy will focus on boosting the purchasing power of farmers.
“Ang ating hinahangad, syempre, unang una, na ang ating mga magsasaka, ang ating agrarian reform beneficiaries ay maging parte ng ating consumer group na mayroong malakas o strong purchasing power” (Our goal, first of all, is to turn our farmers and agrarian reform beneficiaries into consumers with strong purchasing power), he told state-run People’s Television Network (PTV).
“Sapagka’t kung lumaki ang ating consumer group with strong purchasing power, e susunod sunod na ’yan kahit na anong negosyo ang ipatayo mo dyan, kikita tayo” (If we grow the consumer base and ensure they have strong purchasing power, many businesses will benefit and we will prosper), he added. “’Pag ganun pati presyo ng pagkain either mapababa natin ng kaunti o kung hindi man, mayroon pera sa bulsa ang ating mamamayan upang ipambili ng pagkain nila” (We will either bring down food prices a bit or ensure ordinary people have money to buy food with).
Mr. Conrado’s nomination to DAR was announced late Wednesday. He will assume the same post held by his grandfather, Conrado Estrella, Sr., who served under the late President Ferdinand E. Marcos, Sr.
One avenue for increasing farmer incomes is to encourage them to “embark on livestock,” Mr. Estrella said. “That’s one of the things we are looking at.”
He said that the DAR will seek to accelerate the distribution of titles to farmers, a number of whom have only received Certificates of Land Ownership Award under the Comprehensive Agrarian Reform Program.
“We will try to issue more land titles so that farmers would be able to fully utilize their land,” he said, noting that titles may be monetized by being offered as collateral for bank loans.
Mr. Estrella, an outgoing deputy Speaker, is a member of the ABONO party-list that represented agriculture sector in the 18th Congress. — Kyle Aristophere T. Atienza
Country seen paying price of dependence on food imports
By Luisa Maria Jacinta C. Jocson, Reporter
THE government’s economic managers pursued an inappropriate import-heavy model for achieving food sufficiency, which is now being disrupted by the fallout from the Russia-Ukraine crisis, a poultry industry executive said.
“Our economic managers and the Department of Agriculture (DA) believe that the template for us is Singapore, which is 90% dependent on food imports and yet is food-secure,” United Broiler Raisers Association (UBRA) President Elias Jose M. Inciong said in a phone interview.
The economic managers assumed that “we can depend on imports for food security. That’s why the agri-fisheries sector has been neglected since we got into the World Trade Organization. In short, the template is to depend on imports. Now, we are vulnerable and at risk. We are being made to pay for that policy in the coming months and years,” he added.
The Philippine Statistics Authority reported this week that the price of food and non-alcoholic beverages rose by 4.9% year on year in May, fueled by a 15.2% increase in vegetables and tubers and a 6.2% jump in fish and seafood.
Mr. Inciong said that the incoming administration can forestall a supply crisis by supporting domestic production.
“Our advantage is since we still have the resources to produce, if the incoming administration will focus on production and support income-generating projects, we can minimize our risk of a really major food crisis,” he said.
“Producers are being made to compete with subsidized products; since imports have become more expensive, everyone is at risk now. Best way to solve this is for the government to support production in more creative ways,” he added.
The food crisis triggered by the war between Ukraine and Russia has led governments to restrict the export of food commodities to secure their domestic supply. Ukraine is a major producer of grain and edible oils, while Russia is also a major grain and fertilizer producer, apart from being a leading energy exporter. The war has turned the Black Sea into a conflict zone, restricting both countries’ exports through that body of water.
According to Moody’s Analytics, protectionism is surfacing throughout the Asia-Pacific in response to the food crisis.
“Protectionist policies tend to be short-lived and isolated. But in 2022, we are seeing an unusual convergence of protectionist policies on multiple food staples. This comes against the backdrop of disrupted supply chains and geopolitical uncertainties related to Russia’s invasion of Ukraine, which pose a longer-term threat to global food security,” it said in a report.
Moody’s Analytics said that the food crisis will continue over the next two to three years if substitutes cannot be found.
“For example, the variants of wheat grown in Ukraine are winter wheats, which are harvested in late June to July. Today, much of the country is in turmoil, there is limited capacity to move what little harvestable crops are left, and many silos to store the harvest have been destroyed,” it said.
The report projected a significant food shortage in 2023, with underdeveloped economies most exposed.
“And if the invasion drags on till September or November, there will not be enough time for planting wheat in Ukraine for the following year. Making matters worse, Russia is the largest exporter of fertilizer, which are necessary for reliable harvests,” it said.
“The longer Russia’s invasion of Ukraine continues, the higher food prices will go and the greater the risk of food shortages. Geopolitical forces are coming to bear on global food security. Whether it is palm oil from Indonesia, wheat and sugar from India, or chicken from Malaysia, major food producers are tightening export policies to tame inflation and shore up domestic supplies,” it added.
ADB approves $4.3-billion loans for South Commuter rail project
THE Asian Development Bank (ADB) has approved up to $4.3 billion in loans to finance the construction of the South Commuter Railway Project.
The railway runs for nearly 55 kilometers (km), and will connect Metro Manila with Calamba, Laguna. The project is part of the North-South Commuter Railway (NSCR) network, and is the ADB’s largest infrastructure financing project to date.
After its construction, the South Commuter Railway is expected to offer fast public transport, ease road congestion, and contribute to the reduction of greenhouse gas emissions. It will also halve the travel time between Manila and Calamba from the 2.5 hours it would usually take by road.
“The South Commuter Railway Project will provide affordable, safe, reliable, and fast public transport for commuters,” Ahmed M. Saeed, ADB Vice-President for East Asia, Southeast Asia, and the Pacific, said.
“This project represents ADB’s biggest infrastructure investment and reflects our commitment to helping the Philippines attain its goals of reducing poverty, improving the lives of Filipinos, and achieving green, resilient, and high economic growth,” he added.
The project will involve the construction of 18 stations, with provisions for accessibility to the elderly, women, children, and people with disabilities.
The line will connect to the future Metro Manila Subway system.
“The South Commuter Railway Project will be financed under a multitranche financing facility, with the first tranche of $1.75 billion to be made available starting this year,” the ADB said.
The second and third tranche releases are expected in 2024 and 2026, respectively. The ADB will finance civil works for the railway viaduct, stations, bridges, tunnels, and depot buildings. The Japan International Cooperation Agency is also co-financing the loan, funding railway vehicles and railway systems.
The NSCR, which also includes the ongoing construction of the Malolos-Clark line, is expected to generate more than 35,500 jobs during construction, while providing another 3,200 permanent jobs during its operation.
The ADB’s study on the South Commuter Railway Project found that cities and municipalities that have stations along the line will have access to more than 300,000 jobs on average, an average increase of 15.3% in the cities to the south of the capital, with the corresponding growth seen at 8.5% in Metro Manila.
“It will create a substantial growth multiplier effect in the economy through supplier contracts and new opportunities opened with better connectivity in the region,” the ADB said. — Tobias Jared Tomas