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Peso rebounds ahead of BSP decision, US data

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THE PESO strengthened versus the greenback on Thursday on expectations that the central bank would keep rates at record lows and ahead of the release of US jobs data.

The local unit closed at P48.735 per dollar yesterday, gaining seven centavos from its P48.805 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso started Thursday’s trading at P48.755 versus the dollar. Its weakest showing was at P48.92, while its intraday best was its closing level of P48.735.

Dollars exchanged decreased to $1.005 billion on Thursday from $1.103 billion on Wednesday.

The peso strengthened ahead of the close of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

After the market’s close, BSP Governor Benjamin E. Diokno said in an online briefing that the Monetary Board kept the key policy rate at a record low of 2% at yesterday’s meeting to support an economy that continues to face uncertainties even while already showing early signs of recovery.

“On balance, the expected path of inflation and downside risks to domestic economic growth warrant keeping monetary policy settings unchanged,” Mr. Diokno said in an online briefing.

“The Monetary Board believes that sustained monetary policy support for domestic demand should help the economic recovery gain more traction, especially as risk aversion continues to temper credit activity despite ample liquidity in the financial system,” he added.

Meanwhile, a trader said the peso climbed as investors expect improvement in the US labor market. Initial jobless claims data were scheduled to be reported by the US Labor Department on Thursday.

For Friday, Mr. Ricafort gave a forecast range of P48.65 to P48.85 per dollar, while the trader expects the local unit to move within the P48.70 to P48.85 band. — L.W.T. Noble

Stock index declines in the absence of catalysts

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PHILIPPINE shares declined on Thursday amid a lack of catalysts and as investors continue to monitor the country’s coronavirus disease 2019 (COVID-19) situation.

The benchmark Philippine Stock Exchange index (PSEi) lost 32.41 points or 0.46% to close at 6,886 on Thursday, while the all shares index went down by 3.70 points or 0.08% to 4,199.89.

“The market traded flat for most of the session on lack of catalysts,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message.

“The market ended lower as traders sold shares during the last minute of trading, after two consecutive days of rallying up to the 6,900 level,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a separate Viber message.

“Investors may be assessing the COVID-19 situation, and are waiting for signs that the currently enforced lockdown measures will be relaxed in the coming weeks,” he added.

Majority of sectoral indices closed in the red on Thursday except for industrials, which gained 25.72 points or 0.27% to 9,505.06; and financials, which rose by 3.26 points or 0.21% to end at 1,491.35. 

Meanwhile, mining and oil declined by 113.25 points or 1.21% to 9,226.95; holding firms went down by 57.11 points or 0.82% to 6,865.43; services shed 12.44 points or 0.79% to 1,561.66; and property lost 18.55 points or 0.54% to end at 3,393.63.

Value turnover inched up to P6.48 billion with 4.36 billion issues traded on Thursday, from the P6.14 billion with 4.2 billion shares switched hands on Wednesday.

Decliners narrowly beat advancers, 100 against 97, while 52 names remained unchanged.

Net foreign selling slowed to P912.22 million on Thursday from the P1.44 billion logged in the previous day.

AB Capital Securities’ Mr. Soledad said catalysts for Friday’s trading will be the results of the Bangko Sentral ng Pilipinas’ (BSP) monetary policy meeting on Thursday.

He said he expects the index to trade between 6,800 and 7,000, while Timson Securities’ Mr. Pangan forecasts the market to finish between 6,760 to 7,080.

The BSP announced after the stock market’s close that its Monetary Board decided to maintain the interest rate on the central bank’s overnight reverse repurchase facility at its record low of 2%, as expected. The interest rates on its overnight deposit and lending facilities were likewise kept at 1.5% and 2.5%, respectively.

The central bank said it kept borrowing costs steady amid lingering economic risks.

“On balance, the expected path of inflation and downside risks to domestic economic growth warrant keeping monetary policy settings unchanged. The Monetary Board believes that sustained monetary policy support for domestic demand should help the economic recovery gain more traction, especially as risk aversion continues to temper credit activity despite ample liquidity in the financial system,” it said. — K.C.G. Valmonte

TV viewing level in PHL down in Q1 — Nielsen

PIXABAY

TELEVISION VIEWING level in the Philippines dropped to 13.5% in the first three months of 2021 from 17% in the same period a year ago, mainly due to the shutdown of ABS-CBN Corp.’s broadcast operations, a global measurement and analytics company said.

At the start of the pandemic last year, “When ECQ (enhanced community quarantine or the strictest lockdown level) was enacted, TV viewing heightened, with 21.2% ratings at the end of March 2020, an over five-percentage-point increase from the month before,” Nielsen said in an e-mailed statement on Wednesday.

“This significant upswing was observed throughout all day-parts and can be attributed in large part to the need for news and ‘thoughtful programming,’” it added.

ABS-CBN, however, stopped broadcast operations in early May after the National Telecommunications Commission issued a cease-and-desist against the company. It was followed by the adoption of a resolution denying the media company’s franchise application by the House of Representatives Committee on Legislative Franchises on July 10.

“While COVID-19 (coronavirus disease 2019) led to this disruption and led to similar changes globally, the shutdown of ABS-CBN made the Philippines a unique case as the network’s main channel on its own took 33.5% of the total TV audience share in Q1 (first quarter) 2020,” Nielsen noted.

“The shutdown has led to lower total TV viewing levels overall (13.5% for Total Philippines for Q1 2021 compared to 17.0% in Q1 2020), but higher individual ratings for the remaining channels,” it also said.

With the absence of ABS-CBN’s free TV and the adoption of work-from-home setup, internet penetration had increased even more.

“The increase in internet penetration was more than four million people in urban Philippines alone (from 76% in Q1 2020 to 84% in Q1 2021),” Nielsen said. “While individual channels increased in ratings, the lower ratings for total TV point to a higher incidence of these multi screeners deciding to go purely digital,” it added.

Nielsen further explained, “All of this is to say that the disruptions have led to a new balance in the media landscape and therefore leads to a higher need for always-on cross-platform measurement. Advertisers need to know which media and channels to allocate their budget and also need to be able to optimize their campaigns with data-driven decisions. Similarly, publishers need to be able to quantify to their advertiser clients what their platforms are able to provide.” — Arjay L. Balinbin

89 State colleges, universities to get P2B from Bayanihan II for shift to smart campuses 

THE COMMISSION on Higher Education (CHED) said it has allocated a total of P2 billion to 89 state-owned universities and colleges across the country under the Bayanihan II stimulus fund, to be used for the shift into smart campuses.

As of Thursday, 19 schools out of the 89 have formally signed a memorandum of agreement with CHED, to be spent on various requirements for setting up flexible learning systems.

The remaining 70 schools are currently finalizing their proposals and expected to receive their grants “in two to three days,” CHED chairman Prospero E. de Vera said in a press conference on Thursday.

Of the P2 billion, total disbursement stood at P416.6 million as of Thursday.

Mr. De Vera said they are confident that CHED “will beat the June 30 deadline for the disbursement of the Bayanihan II funds.”

He further called on Congress to grant the commission additional funds under the proposed Bayanihan III to continue the smart campus initiative.

“We have started to build the foundations for smart campuses of our state universities and colleges. We have used the money allocated by Congress under Bayanihan II,” Mr. De Vera said.

CHED also spent P1 billion to buy laptops for faculty members while P300 million was used to cover unpaid tuition and miscellaneous fees of 50,000 students in private universities across the country.

Another P300 million were disbursed, through the Department of Labor and Employment, to part-time faculty members with no salary during the pandemic because of the “no teach no pay policy.”

Meanwhile, CHED and the Department of Health (DOH) have authorized 93 higher education institutions to conduct limited face-to-face classes as of Thursday.

The 93 schools were among the 155 that filed applications for the authority to conduct limited in-person classes, CHED director Lily Freida M. Milla said. — Bianca Angelica D. Añago

8,000 seedlings up for grabs in 4 NCR cities on Arbor Day

DENR NCR FB PAGE

THE FIELD offices of the Department of Environment and National Resources (DENR) in Metro Manila will open four community “PanTrees” to distribute free seedlings of fruit-bearing trees and vegetables in celebration of Philippine Arbor Day on June 25.

DENR National Capital Region (NCR) Executive Director Jacqueline A. Caancan told BusinessWorld in phone call on Thursday that a total of 8,000 seedlings are up for distribution across the four sites from 9 a.m. to 12 noon.

These will be located in the following covered basketball courts: Barangay Lower Bicutan, Taguig; Barangay 863, Pandacan in Manila; Barangay UP Campus, Quezon City; and Barangay Marikina Heights, Marikina.

On Arbor Day, government agencies and the public are encouraged to participate in tree planting activities.

“The roll-out of the PanTrees will be simultaneous, then we’ll take it from there on what the public’s response will be. And then we’ll line up the barangays (that the panTREES will visit),” she said.

Earlier this week, the DENR brought its mobile community PanTree project to Barangay 163 in Caloocan City where residents were able to receive free seedlings of guyabano, mango, jackfruit, among other fruits and vegetables.

In April, the DENR-NCR began a community PanTree at its headquarters in Quezon City with the goal of promoting urban and backyard gardening, while helping residents cope with quarantine fatigue and other mental health issues associated with the global health emergency. — Angelica Y. Yang

Call for probe on DepEd’s laptop procurement ‘premature and unfair’ — DBM 

THE PROCUREMENT Service of the Department of Budget and Management (PS-DBM) said the call of a lawmaker to investigate the procurement of 39,000 laptops for public school teachers is “premature and grossly unfair” because the bidding process is still ongoing.   

“The bidding process is ongoing and no contract has been awarded. Thus, Rep. (Bernadette) Herrera-Dy’s call for a Congress probe is not only premature but grossly unfair. By prejudging the bidder selection process, she is in fact, trying to influence the final outcome of the PS-DBM’s procurement decision,” the agency said in a statement.   

PS-DBM said it cannot release further information about the bidding since this is prohibited under existing procurement rules.  

Ms. Dy on Wednesday called on the lower chamber to look into what she tagged as a “questionable” procurement by the Department of Education (DepEd) of the laptops.  

She claimed that the contract will likely be secured by the second-lowest bidder at P2.3 billion, higher than another party’s offer of P167 million. 

PS-DBM said existing rules provide that government projects should be awarded to bidders with the lowest calculated responsive bid (LCRB), and not necessarily to the lowest bidder. 

“The LCRB is defined by law as the lowest bid from a technically, legally, and financially capable supplier that is compliant with all the technical specifications as required and stated on the bidding documents,” it said.  

“In light of these misinformed claims and allegation, PS-DBM urges Rep. Herrera-Dy to refrain from making premature remarks and to be enlightened of the procurement process.” — Beatrice M. Laforga 

Hontiveros plans to seek reelection in 2022

SENATE.GOV.PH

SENATOR RISA N. Hontiveros-Baraquel on Thursday said she is eyeing to run for reelection in 2022.

In an online briefing, Ms. Baraquel said she will make a bid for another term as legislator when asked by reporters.

“But there will be time to share more about that with you kasi nga may iniintay tayong anunsyo ng isang kapwa pamilya natin (because we are still waiting for announcements from our fellow political family),” she said.

Ms. Baraquel, national chairperson of Akbayan party, said the party is also preparing for possible alliances.

“For now, it’s early stages also, like most, there are a lot of discussions on alliances,” she said in a mix of Filipino and English.

She added that her party supports the call to form unity among Filipinos. — Vann Marlo M. Villegas

Social, work interactions cited for COVID-19 surge in Davao City

DAVAO CIO

SOCIAL GATHERINGS and work-related interactions among those 24 to 40 years old, described as “high risk behaviors” by Davao City’s coronavirus task force, were cited as the main cause of the recent surge in local transmissions.

“We all know millennials, these are the population with high-risk behaviors. This is the age group that love to socialize, have get-together in social gatherings. Since they are also part of the working group, they go out to socialize and interact. They are likely highly to get infected,” Michelle B. Schlosser, task force spokesperson, said partly in Filipino in a statement from the city government.

As of June 19, the city recorded 21,453 coronavirus disease 2019 (COVID-19) cases, 62% of which or 13,394 belong to the 20-49 age group, according to City Health Office acting head Ashley G. Lopez.

Broken down further into specific age brackets, Mr. Lopez said the 20-29 group accounted for the highest number of COVID-19 cases at 5,721, followed by the 30-39 group with 4,584.

Ms. Schlosser said the recovery rate is high among millennials and many are asymptomatic.

The city is currently under the second strictest quarantine level and social gatherings, including home visits, are prohibited.

Earlier this week, Mayor Sara Duterte-Carpio said the city government is looking at setting up an additional 250 isolation beds as well as preparing medical care kits for asymptomatic and mild patients who can do home-isolation and guided through telemedicine.

The city currently has 2,408 beds dedicated to COVID-19 patients, with 873 still available as of June 21.

“We are working on four more (isolation facilities). The biggest one is the one at the Department of Public Works and Highways but we are not optimistic about it since it still needs a lot of work before it can be used. So, we have three (others) that we are readying and we know will be utilized soon,” Ms. Carpio said over the local government-run radio. — MSJ

Angat Dam water level drops, but seen to recover with rains by July

PHILSTAR

THE WATER level of Angat Dam is still enough and expected to improve with rain in the coming months despite approaching its minimum operating level on Thursday, according to the National Water Resources Board (NWRB).

NWRB Executive Director Sevillo D. David, Jr. estimated that Angat Dam in Bulacan, the primary water source of Metro Manila, will increase its water level by the end of July based on the rainfall projections of state weather agency PAGASA.

“The dam’s water level will recover in the coming months since we are expecting rain to arrive. Also, PAGASA projected that rainfall for this year is normal,” Mr. David said in a radio interview on Thursday.   

As of Thursday morning, PAGASA data showed that the water level of Angat Dam was at 187.63 meters, down 21 centimeters from 187.84 meters the previous day.   

The dam’s minimum operating level is 180 meters.   

“Despite PAGASA’s announcement that the rainy season has already started, the rainfall being experienced does not have an effect yet on Angat Dam since the rain does not reach the mountains. But once rainstorms arrive in July and August, the dam’s water level is estimated to recover,” Mr. David said.

Mr. David confirmed in a separate mobile phone message to BusinessWorld that the current water allocation for Metro Manila is at 48 cubic meters per second (cms) while water allocation for irrigation is at 15 cms.   

Sought for comment, both representatives of Manila Water Co., Inc. and Maynilad Water Services, Inc. said the water supply situation remains normal in their respective concession areas.    

Manila Water provides water for the east zone of Metro Manila while Maynilad supplies the west zone.   

“The water supply situation is still normal since the raw water allocation for the Metropolitan Waterworks and Sewerage System (MWSS) remains at 48 cms per day. And with PAGASA declaring the onset of the rainy season, we expect the rainfall to help replenish water stored in Angat Dam,” Maynilad’s Head of Corporate Communications Jennifer C. Rufo said in a mobile phone message.   

“Supply remains normal in the east zone. We continue to be very aggressive in addressing leaks to reduce water losses and conducts regular preventive maintenance. Nonetheless, we continue to advocate responsible use of water among our consumers,” Manila Water Corporate Strategic Affairs Group Head Nestor Jeric T. Sevilla, Jr. said in a mobile phone message.   

Both water concessionaires also assured that they have contingency measures in place if additional supply will be needed.   

“Contingency and augmentation programs are in place for additional supply. Manila Water can operate its Cardona Water Treatment Plant at full capacity. There are deep wells on standby. The Marikina portable treatment plant is available,” Mr. Sevilla said.   

“Our contingency measures include pressure management, optimization of our treatment plants that get water from Laguna Lake, activation of deep wells, and use of modular treatment plants that will get water from Cavite rivers,” Ms. Rufo said.   

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave 

Bill filed for declaration of 2 sites as protected areas

Senator Cynthia A. Villar

SENATOR CYNTHIA A. Villar filed measures to include two more sites — Mount Arayat in Pampanga and Hinakpam Mystical Hills Natural Monument in Negros Oriental — under the National Integrated Protected Areas System (NIPAS).

In a statement on Thursday, Ms. Villar, chair of the committee on environment and natural resources, said Mount Arayat is a “key biodiversity area” with endemic tree species like Arayat Pitogo and other rare flora such as tibig, molave and tumbang.

Hinakpam Mystical Hills Natural Monument, meanwhile, has unique biological features like geologic formation of karstic conical hills, caves, sinkholes and valleys.

There are currently 107 declared protected areas under Republic Act No. 7586 or the Expanded NIPAS Act of 2018, the senator said.

The law mandates the protection of “ecologically rich, unique and biologically important areas that are habitats of threatened species of plants and animals, biographic zones and related ecosystem, whether terrestrial, wetland or marine.”

Ms. Villar earlier filed five other bills to include more protected areas under the system. — Vann Marlo M. Villegas

Red tide warning lifted in parts of Western Samar, Leyte 

THE BUREAU of Fisheries and Aquatic Resources (BFAR) declared parts of Western Samar and Leyte free from red tide contamination based on the latest test results.   

BFAR said in its 18th shellfish bulletin that red tide warnings are lifted in Zumarraga, San Pedro Bay, Maqueda Bay, and Villareal Bay in Western Samar, and Carigara Bay and Ormoc Bay in Leyte.   

On the other hand, areas still positive for red tide include Dauis and Tagbilaran City in Bohol; Tambobo Bay in Negros Oriental; and Daram Island, Cambatutay Bay, and Irong-irong Bay in Western Samar.

Other areas affected by red tide are Calubian and Cancabato Bay in Leyte; Murcielagos Bay in Zamboanga del Norte; Balite Bay in Davao Oriental; and Lianga Bay and Bislig Bay in Surigao del Sur.   

All types of shellfish and Acetes sp. or alamang sourced in areas with red tide warnings are unsafe for human consumption. Other marine species harvested in the contaminated waters can still be eaten with proper handling.

Red tide happens due to high concentrations of algae in the water. Human consumption of contaminated shellfish may result in paralytic shellfish poisoning, which affects the nervous system.

Usual indications of paralytic shellfish poisoning are headaches, dizziness, and nausea. Severe cases may also cause muscular paralysis and respiratory problems. — Revin Mikhael D. Ochave 

A brave face

STUDIOGSTOCK-FREEPIK

There was some convergence between market expectations of steady monetary policy on the part of the Bangko Sentral ng Pilipinas (BSP) and its two recent pronouncements.

Before the weekend, BSP Governor Ben Diokno was quoted saying “the BSP will continue to focus on keeping its monetary policy stance supportive of the government’s initiatives to address the effects of the pandemic, for as long as necessary, until the economic recovery gets underway.” This is a fair comment considering that the US Federal Reserve Board issued some forward guidance that it could accommodate its current policy settings until 2023. This will also help the BSP keep domestic liquidity in dizzying quantity amounting to P2.2 trillion or 12% of GDP.

Two days ago, the BSP was again reported declaring that “the Fed rate hikes are seven quarters away. The Philippine government should continue with its game-changing Build, Build, Build program and its structural reforms pending in Congress.” The monetary authorities discount the possible threat of an early monetary normalization in the US.

The BSP therefore believes that the required interest rate adjustment could wait. After all, the Philippine macroeconomy has sound fundamentals and a “Fed rate hike in 2023 is less of a threat to the Philippine economy compared to other developing and emerging economies.”

The BSP could not have put on a braver face.

Market analysts, being generally backward-looking, took the hint and 14 out of 16 analysts polled projected the BSP would keep its policy rate steady. One outlier indicated a possible easing by 25 basis points even as the current policy rate is already below the 4.4% actual average inflation rate for the first five months.

The other outlier expected tightening by 25 basis points. As if a rebuke, one among the herd issued an incredible warning that “a calibration of rate settings at this point would derail the very fragile recovery and only delay the economy’s bounce back.” He must have an incurable faith in the signaling effect of a thin slice of a rate adjustment.

But some research outfits would rather place the year of normalization in the US as early as next year. Fitch Solutions Country Risk and Industry Research, for instance, expects the Monetary Board to be more preemptive by jacking up interest rate by as much as 50 basis points next year. Fitch believes in the possible recovery of the Philippine economy next year and unless some compensatory increases in its policy rate are done, the BSP might see some insipient depreciation pressures against the peso. But it is also seeing signs of pandemic resurgence due to the sluggish rollout of the vaccines. From a forecasting standpoint, it makes sense to be more conservative and assume that risks would appear earlier than would normally be expected.

If we are to give credence to the latest pronouncement of US Fed Chairman Jerome Powell, his hint of a future monetary policy stance is actually ambiguous. Bloomberg reported him saying, “the price increases seen in the economy recently are bigger than expected but reiterated that they will likely wane.”

The large size should call for a more progressive and preemptive move, but the short duration calls for a steady hand.

Local market analysts should be more careful in appreciating Powell. He covered his tracks by acknowledging the uncertainty around the view that the price pressure accompanying economic recovery could be short-lived. The Fed Chairman was also quick to say “they may turn out to be more persistent than we expected.” This means those large inflationary pressures might not be transitory. The flip side is that the US, after successfully overcoming the pandemic challenge, could already open up international travel and the macroeconomy. US economic recovery could be stronger than originally believed.

What seems to be the emerging view on the timing of policy rate normalization?

Fed officials seem to be divided.

US Fed quarterly projections show 13 of 18 officials were in favor of at least one rate increase by end-2023 versus seven in March. This is exactly the inclination of the BSP and most market analysts. However, some 11 officials place the tightening twice before the end of 2023. But one should not dismiss the view of seven members seeing some normalization as early as next year. But the prospective US Fed action is only one of the balls in the air.

President Biden’s decisive approach to pandemic management might just be the tipping point. The American Rescue Plan allocated $1.844 trillion or 8.8% of GDP, focused on providing public health response and time-bound assistance to families, communities and businesses. Unemployment benefits have been extended, direct aid supported local governments and funded school reopening. Various facilities were also introduced to support credit flow to key business sectors.

With confidence in the US economy seemingly restored, and the vaccines rolled out in a big way, the recovery in the world’s biggest economy should be forthcoming.

We believe this is the upside risk to inflation pressure both in size and duration. This could also be the US Fed’s uncertainty surrounding their forecasts.

The wild card is China. CNBC recently reported that authorities in the southern Chinese province of Guangdong launched massive testing and tracing for those possibly infected with the latest Delta COVID-19 variant. Guangdong is the most populous province of China.

Chinese authorities immediately locked down certain parts of the provincial capital of Guangzhou, 24-hour checkpoints were set up. In 10 days from the last week of May, 16 million tests were completed and the needs of the areas quarantined were reportedly served by China’s driverless cars under various umbrellas like WeRide and Pony.ai.

China is a wild card of sort because the imposition of a lockdown could affect industrial production and global transport. While the cases pale in comparison against past records in China and in the world, Guangzhou is an industrial city. In Shenzhen, they host one of China’s busiest container ports, the Yantian International Container Terminal. On top of that, the Shenzhen International Airport was closed and a large number of flights were cancelled. Normalization is expected only by the end of June.

While China faced 2021 from a position of strength, as shown in the last Article IV consultation with China, the challenge of uneven and imbalanced growth process could not be ignored. Private demand is yet to fully recover as the economy has been reliant mainly on public support.

If both the US and China steam ahead, and Japan continues to be driven by fiscal stimulus at home and abroad, the stage is set for a stronger global economic recovery. Europe itself appears on the way to stronger growth. The European Commission issued its spring forecast for a 4.2% expansion this year and 4.4% next year.

These writings on the walls are supported by the ability to manage the health pandemic by sustained observance of health protocols and massive administration of vaccines across age groups and localities.

This prospect is also consistent with the latest forecasts of the IMF’s World Economic Outlook for the global economy. For 2021 and 2022, growth forecasts are 6% and 4.4%, respectively, which are both marginally higher than the previous forecasts in October 2020.

Unfortunately, the IMF downgraded the Philippines real GDP projection from 6.9% to only 5.4%, lower than the official target of 6-7% in 2021.

It should not be difficult for the Monetary Board to decide. It has been capable of abstracting from all possible scenarios in hundreds of pages of facts. Like Powell, the Monetary Board could always say there are substantial uncertainties surrounding the forecasts, the global economy continues to recover from both the pandemic and the deep recession, price pressures are mounting but the duration is yet to be ascertained.

All up, it is best to wait for more data and with lower growth prospect, keep the policy rate steady. But saying the US Fed rate hike is not a threat to the Philippines is really putting on a brave face. Sooner or later, it will push the monetary lever at home, to the direction of normalization.

Time will find us out.

 

Diwa C. Guinigundo is the former Deputy Governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was Alternate Executive Director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.