Headline inflation rates in the Philippines (July 2021)
PHILIPPINE INFLATION eased to a seven-month low in July, lending support to expectations for the central bank to keep its rates accommodative. Read the full story.
Peso retreats on Fed taper hints, virus concerns
THE PESO weakened to the P50-a-dollar level on Thursday due to signals from the US Federal Reserve of a possible tapering of its asset purchases within the year and lingering concerns over the spread of the Delta variant.
The local unit closed at P50.235 per dollar yesterday, shedding 48.5 centavos from its Wednesday finish of P49.75, data from the Bankers Association of the Philippines showed.
The peso opened Thursday’s session at P49.83 a dollar. Its weakest showing was at P50.37, while its intraday best was at P49.76 versus the greenback.
Dollars exchanged increased to $1.47 billion on Thursday from $1.041 billion on Wednesday.
A trader attributed the peso’s weakness to demand for the dollar following hints from the Fed on the timing of the reduction of its bond purchases.
Fed Vice Chairman Richard Clarida said in a Wednesday webinar that he is in favor of the Fed making an announcement later this year that it will begin to scale back its bond purchases if the economy’s growth stays strong, Bloomberg reported.
The Fed has vowed to retain its asset purchases “until substantial further progress” is seen in its goal of maximum employment and 2% inflation. It is currently purchasing $120 billion of assets every month which include $80 billion of Treasury securities and $40 billion of mortgage-backed debt.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened on rising cases of the Delta variant in countries that already saw a decline in coronavirus cases previously, such as China.
For this Friday, Mr. Ricafort gave a forecast range of P50 to P50.30 while the trader expects the local unit to move between 50.15 and 50.40 a dollar. — L.W.T. Noble with Bloomberg
PSE index snaps rally as investors pocket gains
STOCKS snapped their three-day rally on Thursday as investors went profit taking and shrugged off data showing a slightly slower July inflation print.
The benchmark Philippine Stock Exchange index (PSEi) declined by 37.94 points or 0.57% to close at 6,547.27 on Thursday, while the broader all shares index lost 17.02 points or 0.41% to finish at 4,042.57.
“As the market was up for three consecutive trading days, market succumbed to profit taking today as global growth concerns hounded the US and most of regional markets,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Thursday.
Asian shares mostly held onto this week’s gains on Thursday, despite hawkish remarks from a senior official at the US Federal Reserve that boosted the dollar while weighing on risk appetite, Reuters reported.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.16%. Japan’s Nikkei climbed 0.45%.
US stocks closed mostly lower on Wednesday, with the S&P 500 receding 0.46% from a record high. The blue-chip Dow slid 0.92%, though the tech heavy Nasdaq eked out small gains with investors there attaching greater weight to positive data from the services sector than to negative job figures.
“We believe that market has largely shrugged off the release of July inflation data as it came within expectations,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in a text message.
Preliminary data from the Philippine Statistics Authority showed July inflation slowed to 4% from 4.1% in June. However, it was higher than the 2.7% print logged in the same month last year.
All sectoral indices closed in the red on Thursday except for services, which gained 10.43 points or 0.65% to end at 1,605.72, and industrials, which went up by 42.36 points or 0.45% to 9,305.30.
Meanwhile, property dipped by 81.08 points or 2.63% to 2,996.97; mining and oil shed 53.65 points or 0.54% to 9,786.97; financials inched down by 7.36 points or 0.51% to close at 1,431.63; and holding firms declined by 14.35 points or 0.21% to 6,540.97.
Value turnover inched up to P4.77 billion with 962 million issues traded on Thursday, from the P4.64 billion with 1.10 billion issues seen on Wednesday.
Decliners outnumbered advancers, 108 against 80, while 34 names closed unchanged.
Net foreign buying increased to P237.61 million on Thursday from the P83.72 recorded the previous day.
“Short-term market moves will continue to be driven by pandemic-related developments, with specific sensitivity to prospects of an extension of stricter quarantine measures,” Mr. Mercado said.
He expects the PSEi to trade sideways within the 6,500 to 6,600 range or to retest the 6,270 to 6,300 levels.
“Investors may also stick to the sidelines ahead of the second quarter GDP (gross domestic product) report due out next week,” he added. — Keren Concepcion G. Valmonte
$7B in infrastructure projects being negotiated with Japan
Global Trade Venture Co. Ltd. (GTV) and Philippine local governments are in talks for $7.5 billion worth of projects in aquaculture development, health, and artificial intelligence, the Japan-based firm said Thursday.
The company, which works on engineering and design, will help implement five concession projects in the Philippines, several of which will be built over a two-year period.
GTV in a briefing said that an industrial park for marine and aquaculture project, plus a supporting cargo hub, will entail providing robotics and artificial intelligence to local government units, putting up warehouse and logistics facilities, and creating training institutes for organic farming.
“Agriculture and aquatic products produced and processed (have) already been pre-determined (along with) a ready market for product distribution lines, particularly in Japan and in other countries,” the company said in its presentation.
A Philippine offshore sea concession for fish farming will have artificial intelligence-controlled fish cages and will be backed by research and development centers, power generation and water processing plants, and warehouses. The floating facility will be 5-15 kilometers from the shoreline.
Meanwhile, a global digital datalink service network will have satellite ground station facilities for big data used for secure information transfer between GTV joint venture members and for artificial intelligence-backed operations.
A 20,000 square-meter regional medical center project operated by the Japan Medicinal Association will have a pharmacy and clinic to provide medical services to local residents.
A Philippine global artificial intelligence corridor will also be developed to attract software research and development and robot manufacturing. It is a response to Japanese manufacturing firms’ exit from China by providing locations for Japanese advanced-technology industries.
Project sites and funding details will be announced by the Philippine local governments, GTV Japan Group Senior Consultant Kazuo Sato said.
The company is an engineering consulting group supporting government projects, he said.
GTV Chairman and Chief Executive Officer Yoshihisa Arai on Thursday signed an industrial park development concession agreement for aquatic products with the provincial government of Marinduque. — Jenina P. Ibañez
DoE seeks fuel discounts for frontliners, consumers
THE DEPARTMENT of Energy (DoE) has asked oil companies to provide fuel discounts to frontliners and other consumers to offset the additional cost of fuel following rising crude prices and the impact of the public health emergency.
“The rising price of oil in the world market is regrettably beyond our control; however, we as members of the Philippine energy family could help ease some of the financial burdens of our countrymen in our continued battle against the COVID-19 (coronavirus disease 2019),” Energy Secretary Alfonso G. Cusi said in video posted on his Facebook page Wednesday.
“Once again, ako po ay nananawagan sa ating mga kasamahan sa industriya, ang mga oil companies na kung pwede magbigay ng diskwento sa fuel sa ating pong mga frontliners at sa iba po nating mga kababayan sa kahirapan po ng dinaranas natin dahilan sa pandemic, I am calling on the industry… that if able, they grant discounts to frontliners and other users to provide relief from their burdens during the pandemic,” he added.
Mr. Cusi also urged the energy sector to ensure the unhampered delivery of services in areas placed under enhanced community quarantine, including Metro Manila.
On Thursday, the DoE said that global oil demand has risen, resulting in crude oil deficits of 370,000 and 140,000 barrels per day (bpd) in the first and second quarters of 2021, respectively.
“This market sentiment will continue to develop, with projected increasing demand versus ongoing supply restrictions from the Organization of Petroleum Exporting Countries and US sanctions against Iran and Venezuela, which all seen to be the underpinning factors pointing to sustained price increases for the rest of the year,” the department said in a statement.
The US restrictions affect the supply of 2 million bpd from Iran and 700,000 bpd from Venezuela, the availability of which could have helped ease the global supply deficiency, the DoE said.
This week, gasoline, diesel and kerosene prices rose P1.05 per liter, P0.8/L and P0.75/L, respectively, following price adjustments by Seaoil Philippines, PTT Philippines Corp., Caltex Philippines, Pilipinas Shell, Petron Corp. and Phoenix Petroleum Philippines, Inc. — Angelica Y. Yang
Upgraded Butuan Airport, Surigao del Sur seaport seen boosting Caraga economic activity
THE TRANSPORTATION department said Thursday that the inauguration of the upgraded Butuan Airport in Agusan del Norte and the expanded Cantilan Port in Surigao del Sur are expected to boost economic activity in the Caraga Administrative Region.
“The Butuan Airport development project… covers the asphalt overlay of the airport’s runway, which was completed on 31 July 2021, and the repair… of the passenger terminal building,” the department said in a statement.
The airport modernization project also includes the provision of clinic, childcare room, lounge, prayer room, washroom, and concession spaces.
Transport officials also inaugurated the expanded Cantilan Port in Surigao del Sur.
The port’s development projects cover the construction of a reinforced concrete pier, a back-up area, and a port lighting system.
“Nadoble ang kapasidad ng Cantilan Port, na kung saan pati ‘yung mga kapitbahay na lugar kagaya ng Carascal, Madrid, Carmen, at Lanuza sa Surigao del Sur ay nakikinabang na rin,” (Cantilan Port’s capacity has doubled, and neighboring areas like Carascal, Madrid, Carmen and Lanuza will also benefit) Transportation Secretary Arthur P. Tugade said.
The department also said Cantilan Port can now handle more than 25,000 to 30,000 bags of cement a month.
Philippine Ports Authority General Manager Jay Daniel R. Santiago said the region should expect more port development projects.
“Tuloy-tuloy ang pag-improve natin sa mga pasilidad natin dito sa Caraga region. Tuloy-tuloy din ang repair works at expansion sa Ports of Surigao at Masao, at ang Nasipit Port Management Office, (Caraga facilities scheduled for upgrades include repairs to and expansion of the Port of Surigao and Masao and Nasipit Port Management Office)” he said. — Arjay L. Balinbin
Duterte signs law streamlining land titling system
PRESIDENT RODRIGO R. Duterte has signed into law a measure simplifying the procedures and requirements for issuing land titles.
Republic Act No. 11573 simplifies the interpretation of land laws and improves the confirmation process for imperfect land titles by amending Commonwealth Act 141 or the Public Land Act and Presidential Decree 1529 or the Property Registration Decree.
The law, which was signed by the President on July 16, allows Filipino occupants to apply for free patent for up to 12 hectares of land, provided they occupied and cultivated it and paid real property taxes for years preceding the filing.
The patent must be filed before the Community Environment and Natural Resources Office (CENRO) of the Department of Environment and Natural Resources (DENR), according to the law. For provinces with no CENRO, the application may be filed with the Provincial Environment and Natural Resources Office (PENRO), it said.
The agencies have been given 120 days to process an application. The application then must be forwarded to “PENRO if the area of the land is below five hectares; to the DENR Regional Director if the area is at least five up to 10 hectares; and to the Secretary of the DENR if the area is more than 10 up to 12 hectares.”
“In case of conflicting claims among different claimants, the parties may seek the proposer administrative and judicial remedies,” according to the law.
Those occupying land in the public domain or claiming ownership but whose titles have not been perfected or completed may file a petition before a regional trial court “for confirmation of their claims and the issuance of a certificate of title to land not exceeding 12 hectares,” according to the law.
Under the law, applicants are required to secure a certification that the land is alienable or disposable, through the submission of a projection map prepared by a geodetic engineer and verified by the DENR.
The law penalizes any geodetic engineer or DENR official involved in falsification of documents or any gross negligence with a fine of up to P500,000 and imprisonment of up to six years. — Kyle Aristophere T. Atienza
MGB dismantles illegal mine in Nueva Vizcaya
MINING EQUIPMENT used in illegal small-scale mining activity was seized and dismantled in Quezon, Nueva Vizcaya in late July, the Mines and Geosciences Bureau (MGB) said.
The MGB said in a statement this week that the equipment included ball mills, diesel engines, pulleys, and other items, which were dismantled, while a number of small-scale miners were also apprehended.
The illegal activity was halted following joint operations by the MGB, the Department of Environment and Natural Resources, and the Provincial Environment and Natural Resources Office of Nueva Vizcaya.
According to MGB Region 2 Director Mario A. Ancheta, the absence of documentation to conduct mining operations and transport minerals or mineral products and by-products is considered prima facie evidence of illegal mining.
“This shall cause the seizure or confiscation of the minerals or mineral products and by-products and the tools, conveyances, and equipment used in the commission of the offense in favor of the government,” Mr. Ancheta said.
Environment Secretary Roy A. Cimatu said miners involved in illegal small-scale mining usually dig and drill without proper oversight.
“These unregulated mining activities pose a danger to the environment, and to human life,” Mr. Cimatu said.
Before the operation, the MGB had ordered an investigation into small-scale mining within the Financial or Technical Assistance Agreement contract area of FCF Minerals Corp., which has not yet developed the area. — Revin Mikhael D. Ochave
China typhoons pose latest threat to supply chains after port disruptions
EXTREME WEATHER in China is becoming the latest challenge to global supply chains, as a heavy typhoon season threatens to further delay goods stuck at some of the world’s busiest container ports.
Yantian port in southern China’s export and industrial hub of Shenzhen temporarily stopped drop-off services of containers on Tuesday night due to a typhoon alert. Just two weeks earlier, Shanghai’s Yangshan mega-terminal facility and nearby ports evacuated ships as Typhoon In-Fa slammed into the coast, bringing widespread flooding and toppling containers stowed in the hold of a bulk carrier traveling to the US.
Heavy rain, high winds and flooding this year are tying up global trade as the already overstretched shipping industry struggles to recover from disruptions ranging from COVID-19 outbreaks to geopolitical unrest. There may be worse to come, as officials predict more typhoons will hit China this month.
From August to December, 16 to 18 typhoons are forecast to form in the Northwest Pacific and South China Sea, the Meteorological Administration said Wednesday. Four to six of these are expected to make landfall in China or affect the country.
“Each time a port is forced to close, containers continue to pile up, adding to existing delays,” said Alex Hersham, CEO of digital freight-forwarder Zencargo. “And as this season is expected to be heavier than usual for tropical cyclones, we can expect more delays like this.”
Supply chains have faced a string of bad luck this year. A COVID-19 outbreak among port staff was to blame for a partial closing of Yantian in May, leading to container goods piling up for a month. As ships diverted away from southern China, some factories in the nearby manufacturing hub of Guangdong shut down because of excess inventory that couldn’t be exported, according to analysts and logistics intelligence firm project44.
“The impact of Yantian’s closure was unprecedented on the supply chain because it serves one of the world’s largest manufacturing bases,” said Salmon Aidan Lee, head of polyesters at consultant Wood Mackenzie Ltd. “If we have a few more typhoons that come our way, and knock down production a few days each time, this problem will get worse.”
While the average waiting time for a container to be exported at Yantian has dropped to five days from 25 in June, and operations resumed at the port Wednesday evening, the situation could easily worsen again if weather-related delays at other Chinese ports build up, said Hersham.
Typhoon In-Fa also impacted factory operations in eastern China, while major ports along the Yangtze River, the country’s busiest inland waterway, halted operations last week, the Shanghai Shipping Exchange said in a July 30 note. Torrential rains and flooding have affected flows of commodities like oil and coal, the company said.
The disruptions are driving the cost of shipping a 40-foot box from China to the US to record levels above $10,000, according to maritime consultant Drewry. Ultimately, the snarls will add to inflation, said Lee, who predicts US consumers will have to pay about 20% more for Christmas presents — from toys to furniture. — Bloomberg
Poe says Senate to give water franchises bills due scrutiny
SENATOR Mary Grace Natividad S. Poe-Llamanzares, who chairs the chamber’s Committee on Public Services, said her panel will subject the water franchise bills to the required scrutiny, following allegations the measures were rushed by the House.
“Businesses imbued with public interest must ensure that citizens’ welfare takes precedence over private profit,” Ms. Poe said in a statement.
Ms. Poe made the remarks after claims that the franchise bills for Manila Water Co., Inc. and Maynilad Water Services, Inc. were approved too quickly in the House.
Voting was 206-7-0 for both House Bill (HB) No. 9422 and HB No. 9423, which granted separate 25-year congressional franchises to the two companies.
She said the bills must “address the looming water scarcity exacerbated by the growing demand for the commodity and the lack of urgency in tapping new sustainable sources.”
“We must put an end to the woes drowning many households for years due to lack of safe water to drink, high rates and constant supply interruption,” said Ms. Poe. — Alyssa Nicole O. Tan
Customs seizes over P10B worth of smuggled goods in first half
THE BUREAU of Customs (BoC) said it confiscated P10.169 billion worth of smuggled goods from 557 operations in the first six months of the year, about the same as the year-earlier level of seizures.
The first-half seizure total is equivalent to 95.7% of the seizures recorded over the 2020 full year, according to the BoC’s mid-year accomplishment report posted on the bureau website.
Some P6.678 billion was seized through various enforcement operations while the remainder was discovered in the course of regular examinations and port inspections.
Fake goods topped the list of smuggled goods by value at P5.575 billion, followed by P1.97 billion in smuggled fuel, P1.869 billion worth of illegal drugs and P1.1 billion in illicit cigarettes.
The bureau issued 62 letters of authority to check suspicious inventories of imported goods in those six months, 57 of which led to enforcement action.
The BoC also condemned P4.243 billion worth of forfeited goods between January and June.
The sale of confiscated and forfeited goods through public auctions yielded P279.52 billion in revenue for the bureau.
Post-audit activities generated P483.33 million in additional customs duties and taxes.
The BoC collected P359.93 billion in the seven months to July, exceeding its target for the period by 4.15%. This was also 4.2% bigger than its year-earlier total.
The bureau is expected to collect P620 billion this year. — Beatrice M. Laforga
Philippines reports 116 more Delta infections
By Kyle Aristophere T. Atienza, Reporter
PHILIPPINE health authorities on Thursday said 116 more people had been infected with the more contagious Delta coronavirus variant, hours before Manila, the capital and nearby cities enter a strict lockdown to contain a fresh surge.
This brought the total Delta cases to 331 the Department of Health (DoH) said in a statement. It added that of the new Delta patients, 95 were locals, one was a returning migrant Filipino and 20 were still being verified.
Metro Manila will be under an enhanced community quarantine from Aug. 6 to 20 after researchers from the University of the Philippines warned that the variant from India might be freely roaming in the community.
Of the 95 local cases, 83 had addresses in the National Capital Region, three in Southern Tagalog, four in Central Visayas, two in the Davao region, and one each in Zamboanga Peninsula, Cagayan Valley and Ilocos region, the agency said.
The Health department reported 8,127 coronavirus infections on Thursday, bringing the total to 1.63 million.
The death toll rose to 28,427 after 196 more patients died, while recoveries increased by 4,343 to 1.53 million, it said in a bulletin.
There were 66,895 active cases, 94.6% of which were mild, 1.0% did not show symptoms, 1.9% were severe, 1.3% were moderate and 1.1% were critical.
The agency said 135 duplicates had been removed from the tally, 125 of which were reclassified recoveries. Fifteen recoveries were reclassified as active cases, while 131 recoveries were tagged as deaths.
One laboratory was not operational on Aug. 2, while three others did not submit data.
DoH also said 113 more people had been infected with the Alpha coronavirus variant first detected in the United Kingdom, bringing the total to 1,968.
The country now has 2,268 cases of the Beta variant after 122 more Filipinos got infected with the virus strain first detected in South Africa.
Meanwhile, the presidential palace flagged the increasing health care use rate in the country amid the threat of the Delta variant, which is believed to be 60% more contagious than the Alpha variant.
Presidential spokesman Herminio L. Roque, Jr. told a televised news briefing 61% percent of about 3,800 intensive care unit beds in the country had been used as of Aug. 4. He added that 53% of isolation beds and 52% of ward beds were occupied.
ICU occupancy in Metro Manila was at 59%, Mr. Roque said. Fifty-three percent of its isolation beds and 52% of ward beds had been used.
VACCINE DRIVE
Also on Thursday, Mr. Roque said about 10 million Filipinos have been fully vaccinated, more than five months since the government started its vaccination drive.
“We have reached a very important milestone in our national vaccination program,” he said.
The Philippines gave out a record 700,000 COVID-19 vaccine doses on Tuesday vaccine czar Carlito G. Galvez, Jr. said in a statement. About 233,000 doses were given out in Metro Manila.
“What we projected for the second quarter was just 500,000 jabs daily and the 700,000 mark was our goal for the fourth quarter,” he said.
About 22.48 million doses had been given out as of Aug. 4, 12.2 million of which were first shots, Vivencio B. Dizon, deputy chairman of the government’s pandemic plan, separately told a televised news briefing.
The government seeks to fully vaccinate 15 million Filipinos by the end of the month and sustain the average daily vaccination of 600,000 to 700,000, Health Undersecretary Myrna C. Cabotaje earlier said.
The country is inoculating health workers, outbound migrant Filipino workers, family members of health workers, seniors, seriously ill people, essential workers and the poor.
The rest of Filipinos would get vaccinated as early as next month, she said. The government has yet to issue rules on the vaccination of minors.
The vaccination in Metro Manila would continue during the two-week enhanced lockdown, Mr. Roque said, adding that the National Government would allot four million more vaccines for the region.
Meanwhile, the Health department said workers who fail to get vaccinated won’t be discriminated against in terms of employment.
Under the law, vaccine cards “shall not be considered as an additional requirement for employment purposes.”
President Rodrigo R. Duterte last month warned that vaccine decliners would not be allowed to leave their homes.
The President in June said he would order the arrest of those who refuse to take part in the government’s vaccination program.
He also threatened to require village officials to prepare a list of those who decline to get vaccinated.
Critics have said vaccine shortage, not vaccine hesitancy, is the biggest problem in the government’s immunization program.
Meanwhile, Vice President Maria Leonor “Leni” G. Robredo urged the government to fast-track the distribution of cash aid to low-income residents who will be affected by the metro lockdown.
The government should have by now crafted a better method of cash aid distribution since the capital region had been placed under lockdown before.
Mr. Roque earlier said the cash aid would be distributed before the start of the hard lockdown.
The government has allotted P13.1 billion to fund the financial aid for 10.7 million Metro Manila residents.
Lawmakers have been calling for the passage of a third stimulus measure that seeks to provide P401 to pandemic-hit sectors. Mr. Duterte did not press lawmakers to approve the bill in his last address to Congress.