BOJ’s public relations crisis forces rethink on inflation message

June 30, 2022 | 2:35 pm

BoJ-Bank_of_Japan-wikipedia — WIKIPEDIA.ORG

TOKYO — Japan’s central bank has stumbled into a rare public relations storm that has dragged debate about its ultra-low interest rates out of sterile boardrooms and into tabloid and social media, amid surging household ire over rising living costs.

Bank of Japan (BOJ) Governor Haruhiko Kuroda issued an unprecedented public apology and retraction earlier this month after comments that households were more “accepting” of retail price hikes triggered a flurry of angry tweets.

Once regarded for its masterful communication of complicated monetary policy to the world’s largest and shrewdest investors, Mr. Kuroda’s recent fumble shows the BOJ much less skilled at managing the wider public’s price expectations.

That could force the BOJ to rethink the way it communicates policy intentions to a population active on social media and unaccustomed to rising prices after decades of deflation or subdued price growth, three people familiar with the bank’s thinking say.

“The fact the governor had to take back his comment shouldn’t be taken lightly,” one of the sources told Reuters. “It’s become harder now to speak about changing public perceptions.”

Those concerns come amid broader questions about the credibility of central banks globally, which have drawn public fire recently for underestimating the inflationary hit to consumers and businesses from supply chain disruptions and the Ukraine war.

Public anger has been particularly strident in Japan where tabloids and television programmes criticized the 77-year-old Mr. Kuroda as someone earning a fat salary and out of touch with the pain households are facing from rising costs.

“What’s heightening is not households’ tolerance of price rises, but frustration over Kuroda’s BOJ,” Japanese tabloid Shukan Post wrote in its recent edition.

“He’s an elite celebrity who bought a luxury condominium with cash,” wrote a weekly magazine catering to housewives, taking aim at Mr. Kuroda’s salary which, at roughly 35 million yen ($258,608), is more than eight times the average Japanese households earned last year.

The BOJ told Reuters it would not comment on media reports about the governor’s private affairs.

Online, web searches made in Japanese for Mr. Kuroda’s name spiked this month to more than double the historical peak hit of April 2013, according to Google Trends, bringing unwanted public attention to the central banker whose term as governor ends next year.

“He should look at the people shopping. No one is willingly paying higher prices. They’re doing so to survive, while sighing of discontent,” wrote one Twitter user.

“Needless to say, we have no choice but to buy food and daily necessities even if their prices soar. People are absolutely not accepting price hikes,” wrote another tweet.

HECKLED, NOT HAILED
After almost a decade leading efforts to shock Japan out of deflation with a wall of money, Mr. Kuroda has finally accomplished his mission: he has stopped an economically debilitating rise in the yen and propped up inflation to his 2% target.

However, instead of being praised, he has been pilloried.

That’s because inflation is rising for the wrong reasons.

Consumer inflation exceeded the BOJ’s target for two straight months in May, but mostly due to the soaring cost of fuel and raw material imports rather than strong demand.

Unlike in Western economies, rising inflation has yet to spark strong wage growth as the economy’s delay in recovering from the pandemic discourages firms from raising pay.

In fact, wages remained flat in Japan in the decade to 2020, contrary to a 13% rise in the United States, Organisation for Economic Co-operation and Development (OECD) data showed.

“Japan is inherently a country less tolerant of price hikes, so even a small rise in inflation triggers a big public response,” said Izuru Kato, chief economist at Totan Research.

“People want prices to go down, while the BOJ wants to push it up. That gap will make the BOJ’s communication with the public extremely difficult,” said Mr. Kato, a veteran BOJ watcher.

‘UNFIT FOR JOB’
Mr. Kuroda’s remarks on June 6 were not just an off-the-cuff gaffe, but part of a speech carefully prepared by BOJ staff.

Speaking before business executives and market players at a seminar, Kuroda said households’ tolerance for price rises had increased, allowing firms to charge more for goods.

“This can be regarded as an important change from the perspective of achieving sustained inflation,” the governor said.

BOJ officials say the speech was intended to explain the need for wages to rise more to ensure households can keep paying more. That message was lost when newspaper headlines focused on his comments about households accepting price rises, rather than his arguments for pay hikes.

Mr. Kuroda was forced to retract his comment and apologize for any misunderstanding, marking an extremely rare reversal for the head of an institution proud of its independence from political meddling.

Many in the BOJ, including those at the board, were caught off guard by the reaction and initially struggled to understand why it drew fire on social media, the three sources who spoke to Reuters said.

“The BOJ has been saying similar things in the past. But the reaction was big this time partly because inflation was actually perking up and hurting households,” one of the sources said.

The BOJ lacks a playbook on how to deal with such cases beyond apologizing to politicians and clarifying its intentions at Kuroda’s public appearances, they said.

At the BOJ, public relations is handled by staff who rotate positions once every few years, rather than by professionals with experience dealing with media.

“I don’t think they thought about the comprehensive impact of the message on the entire audience universe, including how the media would react,” David Wagner, a media specialist with experience with Japanese organizations for two decades, said of Mr. Kuroda’s comments.

“They have to make sure that their messages are really strategically considered before they release them,” he said. “Not complicated, not rocket science — it’s pretty simple.”

A MESSAGING MESS
That communication challenge could become even more critical as the central bank increasingly communicates its view on future price moves and an eventual exit from ultra-loose policy.

Public discontent over Mr. Kuroda also risks undermining the BOJ’s credibility and leaves it vulnerable to political attack.

Opposition parties jumped on Mr. Kuroda’s remark as a perfect opportunity to attack the government’s stimulus policies.

“It’s a comment insensitive to what people are going through,” Kenta Izumi, head of Japan’s leading opposition, said on Kuroda’s remark, urging the BOJ to end its zero interest-rate policy to stem yen falls that were pushing up import costs.

A survey by Kyodo news agency, taken on June 11–13, showed 77.3% of respondents thought Kuroda’s comment was inappropriate, and 58.5% thought he was unfit for the job. Over 70% said they will take into account soaring prices in voting at the election.

So far, Prime Minister Fumio Kishida is defending Kuroda and his ultra-loose monetary policy, saying repeatedly that there was no need to change the BOJ’s stimulus policy.

But some ruling party lawmakers have not hidden their discomfort over Mr. Kuroda’s remark, which came weeks ahead of an upper house election slated for July 10.

While a weak opposition means Kishida’s Liberal Democratic Party is expected to stay in power, Kuroda’s remark and public concern over rising inflation may affect the premier’s popularity. That, in turn, could affect Kishida’s choice of next BOJ governor when Kuroda’s term ends in April next year.

“Frankly, it doesn’t help for Kuroda to talk about households accepting price rises,” said ruling party lawmaker Shoji Nishida. “It’s particularly so as we’re facing an election.” — Leika Kihara and Kantaro Komiya/Reuters

Companies cut spending, jobs as outlook grows less certain

June 30, 2022 | 2:03 pm

Executives at electric carmarker Tesla, drugmaker Novartis, and retailer Bed Bath and Beyond are cutting spending or jobs while others are shelving projects or deals as inflation rages and confidence in the world economy wanes.

Manufacturing growth is slowing worldwide as China’s coronavirus disease 2019 (COVID-19) curbs and Russia’s invasion of Ukraine disrupt supply chains and keep inflation at the highest in years, while the growing risk of a US recession poses a new threat to the global economy.

More companies are now taking early action to help them weather any downturn, a preview that more drastic cuts may loom when earnings reports pour in next month.

“The overarching concern that corporations have right now is how much will the economy slow down, and can we avoid a recession,” said Art Hogan, chief market strategist at National Securities in New York.

“Markets have been held hostage by fears of an inflation-fighting Fed-induced recession. Those concerns have been front and center for most of the year.”

‘ACUTE SHIFT’
US home goods retailer Bed, Bath and Beyond Inc. said on Wednesday its first-quarter sales tumbled 25%.

“In the quarter there was an acute shift in customer sentiment and, since then, pressures have materially escalated, Sue Gove, the company’s interim chief executive officer said in a statement. “This includes steep inflation and fluctuations in purchasing patterns.”

In response, the retailer said it is cutting capital expenditures by about 25% and put on hold plans to remodel and build new stores.

Others are shelving expansion plans or cutting jobs.

South Korean battery maker LG Energy Solution Ltd , a major supplier to US carmakers including Tesla Inc, is reassessing a $1.3-billion investment in an Arizona factory citing “unprecedented” economic conditions, a plan that was unveiled only three months ago.

Tesla, whose Chief Executive Officer Elon Musk previously said he had “super bad” feeling about the economy, has shuttered a California office and laid off about 200 workers. Mr. Musk has said the company needs to cut staff by about 10%.

Swiss drugmaker Novartis said on Tuesday a previously-announced restructuring program could lead to 8,000 jobs being cut, or about 7.4% of its global workforce, as it streamlines its oncology business and non-oncology businesses.

More companies are also increasingly finding it difficult to pass rising costs for raw materials and labor to customers as inflation stubbornly sticks to the highest level in decades.

“For the majority of companies, they have to swallow a lot of these price rises themselves, and that means cutting back elsewhere,” said Stuart Cole, head macro economist at Equiti Capital.

In contrast, the chief executive officer of Cheerios maker General Mills on Wednesday told investors higher prices prompted more consumers to forego restaurants and eat at home.

“As consumers become more concerned about the economic reality, the first thing they tend to do is eat more at home,” Chief Executive Jeff Harmening said.

DEALS ON ICE
Market uncertainty has also left a growing number of deals on hold.

Walgreens Boots Alliance on Tuesday shelved plans to sell its UK high street pharmacy chain blaming global financial market conditions which meant potential buyers were struggling to borrow enough money.

“M&A events tend to get done in stable or rising markets, so volatility like what we have been experiencing so far this year can negatively affect those activities,” said Morningstar analyst Julie Utterback.

Shares in Europe’s largest online meal ordering company Just Eat Takeaway.com hit an all-time low on Wednesday amid dual doubts the loss-making company will successfully sell its US Grubhub operation, and whether it will be able to reach profitability without additional funding.

The sell-off came following a note by Berenberg analysts initiating coverage with a “Sell” rating. The analysts questioned whether the company would be able to dispose of Grubhub for anything resembling the $5.8 billion it paid for it in an all-shares acquisition that closed in June 2021. — Medha Singh/Reuters

Hurdles ahead as Marcos begins six-year presidency

June 30, 2022 | 1:25 pm

Marcos-BBM-1 — PRESIDENT FERDINAND R. MARCOS, JR. FACEBOOK PAGE

Ferdinand “Bongbong” R. Marcos, Jr., starts his six-year term as Philippines president on Thursday facing a host of challenges, from rising inflation and pandemic recovery to balancing relations between competing superpowers the United States and China.

The 64-year-old, who is allowed only one term in the top job, has yet to fill all cabinet posts, but he has so far nominated experienced technocrats to handle the economy, helping to ease some market fears about his presidency and policy inexperience.

WHAT ARE THE IMMEDIATE PRIORITIES?

Mr. Marcos is inheriting an economy that is on a solid footing after bouncing back from the worst of the pandemic, but he will be under pressure to sustain that recovery while battling soaring inflation. Taming it will be his top priority.

Having promised during the campaign to halve the cost of rice, the national staple, Mr. Marcos has appointed himself agriculture minister, citing the urgent need to boost farm production to strengthen food security and also keep food prices under control.

Rising inflation driven by higher food and fuel costs, has prompted the Philippines to join global peers in starting to dial back policy stimulus. The new central bank governor Felipe M. Medalla has signaled the prospect of a series of gradual interest rate hikes to combat runaway inflation.

WHAT ABOUT LONGER-TERM PROJECTS?

Weak infrastructure has long been an impediment to attracting foreign investment in the Philippines and upgrades to ports, roads, rail, air terminals, power transmission and utilities are long overdue.

The Marcos team has said it was open to tapping private funds for the infrastructure and would continue his predecessor’s pandemic-delayed “build, build, build” program. Advancing this would help Mr. Marcos show tangible results, while creating jobs and foreign investor interest.

However, to avoid constraints on funding, Mr. Marcos and his economic team will also need to control government debt that had ballooned to 60.5% of gross domestic product at the end of 2021, the highest ratio in 16 years, from 39.6% before the pandemic.

His finance minister, Benjamin E. Diokno, said he prefers to focus on improving tax administration and collection, including reducing corruption, than raising taxes, to boost revenues.

WHAT APPROACH WILL MARCOS TAKE ON MINING?

Mr. Marcos faces a difficult task of balancing the economic benefits of exploiting the Philippines’ vast untapped mineral resources with protection of its stunning but fragile natural environment.

Mining accounts for just 1% of the economic output of the Philippines and only an estimated 5% of its minerals have been extracted so far. A third of its land mass is deemed by experts to have high mineral potential.

Mr. Marcos has said he would push for “clean mining” and wants to see some value added to mineral exports by selling processed materials instead of just ores. The Philippines is China’s biggest supplier of mostly low-grade nickel ore.

WHICH DIRECTION WILL HIS FOREIGN POLICY GO?

While Mr. Marcos is widely perceived to be friendly to China, political observers believe his approach will differ from that of predecessor Rodrigo Duterte, who enthusiastically courted Beijing — with little in return — while threatening to downgrade ties with former colonial ruler, the United States.

Mr. Marcos said during the campaign he would have to “walk a very, very fine line” between Beijing and defense treaty ally Washington. While he has expressed intent to elevate ties with China, he has also vowed to stand firm against any threat it poses to Philippine sovereign interests.

“Marcos realized there’s a lot of public skepticism after years of Duterte’s fruitless flirtations with China,” said Richard Heydarian, an author and academic who specializes in politics and foreign relations.

Maintaining the country’s alliance with the United States, Mr. Heydarian said, will be essential in keeping the military and the public onside in a country with historically strong links to the United States. — Karen Lema and Enrico Dela Cruz/Reuters

Leaders of US, South Korea, and Japan agree closer cooperation over North Korea threat

June 30, 2022 | 1:15 pm

MADRID — The leaders of the United States, South Korea, and Japan on Wednesday expressed deep concern over North Korea’s missile tests and said they would cooperate more closely to address the threat posed by Pyongyang.

US President Joseph R. Biden, Jr., Japanese Prime Minister Fumio Kishida, and South Korean President Yoon Suk-yeol met on the sidelines of the North Atlantic Treaty Organization (NATO) summit in Madrid and agreed that the progress of North Korea’s nuclear and missile programs posed serious threats to not only the Korean peninsula but also East Asia and the world.

North Korea has this year been conducting missile tests at an unprecedented pace, and is believed by some to be preparing for another nuclear test.

The three leaders agreed to explore further means to reinforce “extended deterrence” against North Korea — the ability of the US military, particularly its nuclear forces, to deter attacks on US allies — along with security cooperation.

“The deterrence capabilities of the Japan-US and US-Republic Of Korea (ROK) alliances need to be upgraded as part of the essential effort to strengthen the trilateral partnership between Japan, the US, and ROK,” Mr. Kishida said.

The South Korean and Japanese leaders are attending NATO’s annual summit as observers for the first time.

Ties between Japan and South Korea have long been strained by memories of Japan’s occupation of the Korean Peninsula from 1910 to 1945.

Relations deteriorated to their worst in years under South Korea’s previous President Moon Jae-in, with spats over territory and history and the two nations calling off an intelligence sharing pact. Mr. Yoon, though, has expressed a desire to repair ties, and Mr. Kishida has also seemed to respond favorably. — Reuters

Micro-certification to provide alternative to formal schooling

June 30, 2022 | 1:07 pm

kyle-gregory-devaras-6RTM8EsD1T8-unsplash — UNSPLASH

Micro-certification of soft skills and digital skills will boost the employability of Filipinos who may not have gone through the formal education system, according to learning experts.

“In the assessment of 21^st century skills — of which digital competency is a part of — the micro-certification created for ALS [Alternative Learning System] will eventually expand to include some of these digital skills,” said Pam Robertson, Australian deputy director at the Assessment, Curriculum & Technology Research Centre (ACTRC), an Australian Aid initiative that seeks to advise and inform the Philippine education system through curriculum, teaching, and assessment research.

ACTRC, which celebrated its tenth anniversary, is conducting a feasibility study on incorporating the ALS’ life skills modules to determine how micro-certification can “provide an alternate pathway to existing formal education” and meet the needs of both learners and employers.

Micro-certification is the credentialing of the attainment of small units of learning that gives learners the potential to receive credit for components of a program.

These provide prospective employers with more information on a learner’s competency as compared to a certificate indicating a passing score. The ALS Law defines micro-certification as “a flexible means of verifying attainment of specific elements of ALS K-to-12 minimum competencies.”

Both hard skills (such as front-end web development) and soft skills (such as critical thinking) can be micro-certified.

Ms. Robertson noted that any credentialing process should be grounded on assessment, and that micro-certifications are only useful if the assessment process is trusted.

“You have to set a rigorous framework to see that real competence is being captured,” she said at the June 29 event.

ACTRC Philippine deputy director Nona Marlene B. Ferido recommended the reporting of student proficiency not through scores but through “a learner’s demonstration of a given skill described in a profile of increasing competence called learning progressions.”

This enables teachers to give effective feedback to learners and adjust instruction according to their development level, she said.

A sample ALS micro-certification of learner capabilities could be: “Learner A is a responsible collaborator (performs teamwork without needing guidance and contributes harmony to a group), but Learner B is a value-adding collaborator (performs to a higher than the required standard, and takes initiative to improve the work of the group),” Ms. Ferido told BusinessWorld in an email.

Employers are now also pushing for assessment information to tailor to their needs, she said: “Employers are more interested in what someone can do, and less interested in what someone knows.”

Ms. Robertson pointed out that the K-to-12 curriculum is “much stronger” than its previous version, adding it takes at least a decade to see the impacts of change within a country.

“These changes take a long time to work through … we need to make sure we keep the direction.” — Patricia B. Mirasol

Filipina changemakers highlight moments they dared to dream

June 30, 2022 | 10:56 am

A voracious reader growing up, Jia A. Tolentino started her writing career not as glamorously as she had dreamed but by churning out press releases, research assignments, and search engine–optimized articles.

In Fearless Filipinas II, a compilation of success stories of 24 Filipino women in various fields, the Ms. Tolentino shares how she went from anonymous scribe to prolific New Yorker staff writer to best-selling author.

“When you’re a writer, everything in your life—anything you read, or anything in your brain—is potential material,” she said. This openness to source material later became her bestselling book Trick Mirror.

As a follow up to Fearless Filipinas: 12 Women Who Dared to Be Different, the second volume differs by zeroing in on fearless moments similar to Ms. Tolentino’s steep climb.

“Twelve women in the first edition was really not enough to encompass the whole spectrum of very successful Filipinas out there,” said Maria Angelica “Mica” B. Magsanoc, a founding editor of the series, at the virtual launch on June 15.

“We had more women we wanted to include that, with time constraints, we couldn’t.”

Fearless Filipinas II was expanded to celebrate 24 women, this time by highlighting their fearlessness in their respective fields.

ANYONE CAN DREAM

Natasha M. Tanjutco’s moment came at 15 years old, when she suggested that part of the profits from her mom’s final art exhibit be donated to the United Nations’ children’s agency UNICEF.

The exhibit, composed of works created by kids, was the origin of Kids for Kids, a movement that Ms. Tanjutco and her sister Isabella cultivated by organizing fun run fundraisers and sports and arts outreach initiatives.

Kids for Kids later branched out to other advocacies, but as Ms. Tanjutco and her fellow volunteers approached college age, their priorities shifted to more urgent issues.

Her second “fearless moment” came when she established a multidisciplinary change agency and design studio called TAYO to connect her advocacies.

“How much of a difference are we really making?” she asked her sister one night, burnt out from being a student and overseeing the agency.

After a pep talk from Isabella, she kept on and later that week managed to recruit more to the cause when she called for climate action after Typhoon Rolly hit the Philippines in 2020.

Ms. Magsanoc said at the launch: “These are women who came from so many different backgrounds or struggled with so many different things but still came through.”

The 24 women featured are:

Alex Eala — Tennis player
Anoinette Jadaone — Filmmaker
Cam Rodriguez — Footballer
Cathy Garcia-Molina — TV and Film Director
Ces Drilon — Journalist
Fe Del Mundo — Pediatrician
Hershey Hilado — Entrepreneur
Jia Tolentino — Journalist
Josie Trinidad — Disney animator
Justine Cordero — Founder of Color Manila
Kara Magsanoc-Alikpala — Founder of ICanServe Foundation
Kim King — Owner of Kim King’s Kitchen
Macy Lee — Talang Dalisay founder
Megan Young — Miss World 2013
Michele Bumgarner — Racecar driver
Pia Ranada — Journalist
Regina Manzana-Sawhney — Co-founder of Filipino Googler Network
Rian Gonzales — Artist
Rowena Romulo — Owner of Romulo Café
Ruby Ibarra — Rapper
Tasha Tanjutco — Co-founder of Kids For Kids Philippines
Vicky Morales-Reyno — Broadcast journalist
Yasmin Busran-Lao — Women’s rights advocate
Zara Carbonell — Miss Tourism Worldwide 2018

Katya F. Lichauco, the series’ co-author and managing editor, added that there is no shortage of subjects to cover, hinting at more to come after the second book.

“There are countless women with stories to tell, which is why we intend on making Fearless Filipinas a series,” she said.

“These stories taught me that I myself can dare to dream and I hope the readers feel the same way.” — Brontë H. Lacsamana

Fostering unity in a time of great challenge

June 30, 2022 | 9:00 am

SF_BBM-Marcos-FB-page-OL — Photo from facebook.com/bongbongmarcos

Ferdinand “Bongbong” R. Marcos, Jr. will become the 17^th President of the Philippines today. Elected on promises of uniting the country, he has planned to make his inauguration a ‘very solemn and simple’ affair with respect to Filipino tradition.

Mr. Marcos has been in the government for over 25 years, having first been elected unopposed to a vice-gubernatorial seat in the 1980s when his father, then President Ferdinand Emmanuel Edralin Marcos, Sr., was still in office. He has since then been in several positions in both the Executive and Legislative branches of government, including a seat in Congress and the Senate. Most notably, he has run for the office of the Vice-President unsuccessfully in 2016.

Before that, Mr. Marcos obtained his kindergarten and elementary education at Institucion Teresiana and La Salle Greenhills in Manila, respectively. He was then sent to England by his parents, where he lived and studied in Worth School, which is an all-boys Benedictine abbey.

He graduated with a Special Diploma in Social Studies from Oxford University in England, before pursuing a Masters in Business Administration in Wharton School of Business, University of Pennsylvania in Philadelphia, USA. He did not finish his Masters, however, as he chose to serve instead as vice-governor of the province of Ilocos Norte in 1981, at a young age of 23. He became governor of the province from 1983 to 1986.

Notably, it was also during his term as governor in Ilocos Norte where he found experience in sustainable energy development, as the region became a pioneer in wind power technology. The wind farms erected in the region still serves to boost power capacity in the Luzon grid in Northern Luzon.

When he returned from exile with his family in 1992, Mr. Marcos then went on to a seat as Congressman in the Second District of Ilocos Norte. In his two terms in office at the House of Representatives, he contributed to the passage of laws that created the Department of Energy and the National Youth Commission.

Mr. Marcos found more success when he served in the Senate, where he was credited in 51 Senate bills in his first three years in office. Those passed into law include the Anti-Drunk and Drugged Driving Act, National Health Insurance Act, and the Cybercrime Prevention Act. During the second half of his term, he contributed to legislation such as the Postponement of the Sangguniang Kabataan Elections, and the Expanded Senior Citizens Act.

A policy of looking forward

Mr. Marcos now comes into the Office of the President amidst a time of great challenge. The country is slowly gearing up for an economic recovery after the impact of the global COVID-19 crisis, but issues such as rising oil prices, quickening inflation rates, as well as the effects of the war in Ukraine, a worldwide food crisis, and climate crisis pose massive risks to its development.

“We have all heard encouraging statements from the incoming economic managers led by outgoing Bangko Sentral governor and incoming Finance chief, Benjamin Diokno, that our new administration will be taking off from sound economic fundamentals,” Mr. Marcos said on his website.

“It will not be an easy road ahead, but we are not without the necessary wherewithal and elbow room to manage the challenges,” he added.

Part of his plan to enable the country’s growth is to build on and strengthen the present momentum created by the Duterte administration, particularly the “Build, Build, Build” infrastructure program. Mr. Marcos pledged to focus on building an economic team that can steer the economy through its current challenges.

“The first priority is always going to be the economy. That’s why we have been very careful in choosing the economic team. It’s still down to jobs, the increasing prices of commodities, some relief for the business community. We have to streamline the operations of government,” Mr. Marcos said.

Mr. Marcos went further to tackle the issue of food shortage head-on, as he announced that he would take over the Agriculture department for the present.

“For agriculture, I think the problem is severe enough that I have decided to take on the portfolio of secretary of Agriculture at least for now,” he said. “At least until we can reorganize the Department of Agriculture in a way that it can be ready for the years to come.”

Mr. Marcos said he would focus on boosting food production amid rising food protectionism around the world. Thailand and Vietnam, where the country primarily imports its rice from, have recently announced that they will be banning rice exports in a bid to raise prices and boost farmer income.

Agriculture contributes about a 10^th to the Philippines’ gross domestic product and a fourth of jobs in the country. However, its output has shrank by an annual 0.3% in the first quarter, as fisheries, livestock and crop production declined due to the spike in oil and fertilizer prices after Russia’s invasion of Ukraine in late February. — Bjorn Biel M. Beltran

Building safe havens

June 30, 2022 | 9:00 am

PAGCOR---FPFC---063022---SF-AD--3-OL — PAGCOR Chairman and CEO Andrea Domingo (right) and La Paz Mayor Venustiano Jordan unveil the marker of the newly built Multi-Purpose Evacuation Center.

PAGCOR allots more than P4 billion for the construction of disaster-resilient structures nationwide

Being situated within the Pacific Ring of Fire makes the Philippines vulnerable to volcanic eruptions and earthquakes. As if this is not enough, the country also sits on the western rim of the Pacific Ocean, where destructive tropical cyclones develop.

Hence, thousands of Filipinos who are at the mercy of these devastating natural disasters often risk losing their properties and even lives.

PAGCOR Chairman and CEO Andrea Domingo (left) congratulates the people of La Paz town in Tarlac for the swift completion of their Multi-Purpose Evacuation Center.

To help mitigate the impact of natural calamities and support the government in providing comfortable, disaster-resilient establishments to vulnerable communities, the Philippine Amusement and Gaming Corporation (PAGCOR) released a total of P4.68 billion from 2016 to 2022 for the construction of typhoon-resilient structures in various sites nationwide.

In November 2020, PAGCOR launched its Multi-Purpose Evacuation Centers (MPEC) project, which aims to build permanent edifices in vulnerable communities mainly to serve as evacuation centers to mitigate the loss of lives during calamities.

The agency has allotted P3.50 billion for the construction of 77 MPECs in provinces that are frequently hit by typhoons.

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Locations include Mountain Province, Kalinga, Benguet, Ilocos Sur, Pangasinan, Isabela, Cagayan, Aurora, Bataan, Bulacan, Pampanga, Tarlac, Zambales, Cavite, Batangas, Laguna, Quezon, Occidental Mindoro, Oriental Mindoro, Romblon, Albay, Camarines Norte, Camarines Sur, Catanduanes, Capiz, Leyte, Eastern Samar, Northern Samar, Southern Leyte, Zamboanga del Sur, and Davao de Oro.

When the MPECs are not being used as evacuation centers, they may be utilized by recipients for other purposes and community activities such as sports meets, vaccination drives and seminars.

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Meanwhile, the state-run gaming firm also unveiled in 2021 the “PAGCOR Village”, a charitable project that seeks to safeguard the living conditions of families displaced by the eruption of Taal Volcano in Batangas in 2020.

This project, with a funding of P150 million, will benefit the towns of Agoncillo, Lemery, Balete, Mataas na Kahoy and Taal. Said towns are all in close proximity to Taal Volcano’s danger zone.

Moreover, PAGCOR also granted a total of P1.03 billion assistance to some LGUs and organizations from 2016 to 2022.

Among them is the P11-million donation to the provincial governments of Ilocos Norte, Ilocos Sur, Cagayan, Isabela, Kalinga, Apayao and Mountain Province for the rehabilitation of various infrastructure damaged by typhoon Lawin in 2016.

PAGCOR also donated P50 million to the City of Marikina for the construction of two covered courts.

Apart from the communities, PAGCOR provided financial support to Veterans Memorial Medical Center (P123.65 million) and V. Luna Medical Center (P53.22 million) for the construction of dormitories which will serve as a halfway house for the families and watchers of patients confined in the hospital.

The impact of disasters on the lives and well-being of affected families is real. But by bankrolling long-term infrastructure projects, PAGCOR is helping build safe communities for more Filipinos — improving their disaster-preparedness and mitigating the loss of lives.

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Cabinet members, economic team joining the Marcos administration

June 30, 2022 | 8:55 am

Cabinet-OL — In photo (clockwise from top left) are Vice President-elect Sara Z. Duterte-Carpio, Benjamin E. Diokno, Arsenio M. Balisacan, Amenah F. Pangandaman, Felipe M. Medalla, and Alfredo E. Pascual. — Photos from facebook.com/davaocitygov/, DBM | WIKIMEDIA COMMONS, University of the Philippines | WIKIMEDIA COMMONS, and facebook.com/DBMgovph

President-elect Ferdinand “Bongbong” Marcos, Jr., who will be inaugurated as the 17^th president of the Philippines today, has named certain appointees who will be part of the incoming administration.

So far, there are 25 names officially announced for the Marcos, Jr. Cabinet as of June 23. Most of the appointees are still subject to confirmation of the Commission on Appointments.

Vice President-elect Sara Z. Duterte-Carpio, the outgoing mayor of Davao City and daughter of President Rodrigo R. Duterte, was announced to head the Department of Education last May 11. She has taken her oath as the 15^th Vice-President of the Philippines last June 19 in Davao City.

On May 13, Benjamin “Benhur” Abalos, Jr. was announced as the next Secretary of the Department of Interior and Local Government. Mr. Abalos served as the chairman of the Metropolitan Manila Development Authority from 2021 to 2022 and Marcos, Jr.’s campaign manager for the 2022 presidential elections.

Jesus Crispin “Boying” Remulla, currently Cavite 7^th District Representative, will be the next secretary of the Department of Justice, as announced last May 23.

Former Labor secretary Bienvenido “Benny” Laguesma, who served the department from 1998 to 2001 during the Estrada administration, was also announced to return and lead the Department of Labor and Employment.

Susan “Toots” Ople was assigned to head the newly-created Department of Migrant Workers (DMW). Ms. Ople was a Labor undersecretary under the Arroyo administration.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno will lead the Department of Finance, announced last May 26. Economist Felipe M. Medalla will be the next central bank governor.

Manuel “Manny” Bonoan, president and CEO of SMC Tollways, will lead the Department of Public Works and Highways, as also announced last May 26.

The Department of Trade and Industry’s incoming secretary will be Alfredo E. Pascual, president of the Management Association of the Philippines.

On May 30, BSP Assistant Governor Amenah F. Pangandaman accepted the President-elect’s invitation to be the next Department of Budget and Management secretary.

IT expert Ivan John Uy will be the incoming Secretary of the Department of Information and Communications Technology.

Television and radio broadcaster Erwin Tulfo was named by the President-elect to head the Department of Social Welfare and Development.

Christina Frasco will be the next Department of Tourism secretary. The Liloan, Cebu mayor is also the spokesperson of Vice President-elect Sara Duterte-Carpio.

The incoming Department of Agrarian Reform Secretary is Abono Party-list representative Conrado Estrella III, as announced last June 8.

Retired Gen. Jose Faustino, Jr., former chief of staff of the Armed Forces of the Philippines, was chosen to be the next Department of National Defense officer-in-charge.

Last June 20, President-elect Marcos, Jr. said he will be the Department of Agriculture chief “for now.”

Jaime Bautista was announced to be the next Department of Transportation (DoTr) secretary last June 23. He was the former president of Philippine Airlines.

Arsenio M. Balisacan will return to the National Economic and Development Authority (NEDA), who has served as the NEDA director-general and Socioeconomic Planning Secretary from 2012 to 2016 under the Aquino administration.

Outgoing Justice Secretary Menardo Guevarra will be the next Solicitor General.

Retired Philippine National Police Deputy Director-General Ricardo de Leon was chosen to be the next director-general of the National Intelligence Coordinating Agency.

President-elect Marcos, Jr. chose his spokesperson Atty. Victor Rodriguez as his executive secretary. Former Senate President Juan Ponce Enrile was announced to be the chief presidential legal counsel. Retired political science professor Clarita Carlos will serve as Marcos, Jr.’s national security adviser. Antonio “Anton” Lagdameo, Jr., former Davao del Norte 2^nd District Representative, will be the Special Assistant to the President. Maria Zenaida Angping will head the Presidential Management Staff. Rose Beatrix “Trixie” Cruz-Angeles, a lawyer and vlogger, is chosen to be the next Presidential Communications Operations Office (PCOO) secretary.

The economic team

“The first priority is always going to be the economy. That’s why we have been very careful in choosing the economic team. It’s still down to jobs, the increasing prices of commodities, some relief for the business community. We have to streamline the operations of government,” Mr. Marcos was quoted saying in a May 27 BusinessWorld report.

The President-elect had a meeting with his economic team earlier this month — attended by incoming executive secretary Mr. Rodriguez, incoming Finance Secretary Mr. Diokno, incoming Budget Secretary Ms. Pangandaman, incoming Socioeconomic Planning Secretary Mr. Balisacan, incoming Labor Secretary Mr. Laguesma, and incoming Public Works and Highways Secretary Mr. Bonoan — to discuss “priorities” and gave orders with the aim for the country’s economic recovery from the COVID-19 pandemic.

After the country’s gross domestic product (GDP) contracted 9.5% in 2020 amid the pandemic, the Philippine economy improved by 5.7% in 2021 and posted an 8.3% growth in the first quarter of 2022, according to the Philippine Statistics Authority.

Despite such growth, the country still faces external headwinds from growing world inflation, said S&P Global.

In addition, the government’s debt reached P12.76 trillion as of end-April, according to the Bureau of the Treasury. As of the end of the first quarter, the country’s debt-to-GDP ratio is at 63.5%, which is over the 60% threshold that multilateral lenders deemed manageable for developing economies. — Chelsey Keith P. Ignacio

Duterte administration’s legacy through the years

June 30, 2022 | 8:23 am

As President Rodrigo R. Duterte’s term ends today, we show how select economic, financial, and development indicators have changed throughout the years from his first year of office up until June 30, 2022. These indicators were culled from various local and foreign sources that include the Philippine Statistics Authority, the Bureau of the Treasury, the World Bank, and the United Nations Development Program, among others.

Manila falls 44 places in costliest city list for expats

June 30, 2022 | 8:20 am

The cost of living in Metro Manila became relatively cheaper for employees working abroad, based on Mercer’s 2022 Cost of Living Survey. The Philippines’ capital city was tagged the 122nd most expensive city out of 227 localities, down 44 spots from the previous year’s ranking of 78th out of 209. The study looks at the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment. Cost of living and rental accommodation cost comparisons were derived from a survey conducted in March this year. Read the full story here.

Peso sinks to 16-year low vs dollar

June 30, 2022 | 12:40 am

THE peso sank to the P55-a-dollar level on Wednesday — its weakest in more than 16 years — amid fears of a recession in the United States and after officials of the US Federal Reserve said they would try to bring inflation within target.

The local currency closed at P55.06 a dollar, weakening by 29 centavos from its P54.77 close on Tuesday, according to data from the Bankers Association of the Philippines posted on its website. It was its weakest level since it closed at P55.08 on Oct. 27, 2005.

The Bangko Sentral ng Pilipinas (BSP) might consider bigger interest rate hikes to support the peso, though it would not be obliged to match policy tightening by the US Fed, incoming Governor Felipe M. Medalla told a news briefing.

“If we see that the exchange rate is overshooting too much and that selling forex will not make the problem go away we would consider maybe increasing policy rates more than our planned 25-basis-point hike,” he said.

The peso opened the session at P54.90 a dollar and weakened to as much as P55.10. It rose to as much as P54.88 a dollar during the day. Volume went down to $1.27 billion from $1.65 billion a day earlier.

Zeno Ronald R. Abenoja, managing director of the Philippine central bank’s Department of Economic Research, traced the peso’s weakening to normalized monetary policy rates in the US and other advanced economies.

“Investors move their money to the US when interest rates there increase,” he told One Balita Pilipinas in Filipino. “As the dollar strengthens, other currencies weaken.”

The US Federal Reserve hiked its benchmark policy rate by 75 basis points (bps) and has signaled more increases at its future meetings to cool down inflation.

The US consumer price index rose by 8.6% in May, the fastest since December 1981. This caused renewed concerns that the Fed’s aggressive action could dampen growth prospects for the world’s largest economy.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. said the peso depreciated as New York Fed President John T. Williams and San Francisco Fed President Mary C. Daly promised further interest-rate hikes on Tuesday.

“We need to move expeditiously,” Mr. Williams told CNBC. “In terms of our next meeting I think 50 (bps) or 75 is clearly going to be the debate.”

Ms. Daly said she expects the economy to slow but not stop growing.

“Many are worried that the Fed might be acting too aggressively and maybe tip the economy into recession,” Ms. Daly said in an interview on LinkedIn. “We are working towards that as quickly as we possibly can, and hopefully Americans everywhere will start to see some relief in their pocketbooks.”

“The peso weakened as recession concerns prevailed following the sharp decline in the US consumer sentiment report,” a trader said in an e-mail.

US consumer sentiment hit a new record low in June amid growing concerns about inflation, according to a closely followed University of Michigan survey released on Friday.

Inflation remained the biggest concern for consumers, with 47% of them blaming the rising prices for their worsening living standards.

“The local currency might weaken further ahead of Fed Chairman Jerome H. Powell’s speech tonight,” the trader added.

Mr. Ricafort expects the peso to trade at P54.85 to P55.10 on Thursday. — Keisha B. Ta-asan with Reuters