Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 7646

Peso rises versus dollar on higher reserves level

THE PESO rose as the country’s dollar reserves continued to rise. – BW FILE PHOTO

THE PESO strengthened against the dollar on Monday on the back of data showing a continued increase in the country’s dollar reserves amid the coronavirus pandemic.

The local unit closed at P48.71 versus the dollar yesterday, appreciating by 5.50 centavos from its P48.765 finish on Friday, data from the Bankers Association of the Philippines showed.

Monday’s close was also its strongest in more than three years or since the P48.66-per-dollar finish on Nov. 10, 2016.

The peso started Monday’s session at P48.70 per dollar. Its weakest showing was at P48.72 while its intraday best was at P48.665 against the greenback.

Dollars traded dropped to $423.30 million on Monday from the $599.65 million logged on Friday.

The peso appreciated on the back of preference for the local currency and data from the Bangko Sentral ng Pilipinas (BSP) showing ample gross international reserves (GIR) as of July, a trader said.

“It’s still driven by the weaker dollar and then the central bank announcement that GIR is already at $98 billion. That also creates strong optimism on the peso,” the trader said in a phone call.

The country’s dollar reserves stood at $98 billion at end-July, higher by 15% from the year-ago level and by 4.8% from its May standing. This is already more than the central bank’s $90-billion projection for this year.

At its end-July level, the GIR can cover up to 8.9 months’ worth of imports of goods and payment of services and primary income. It is also equivalent to 7.5 times the short-term external debt of the country based on original maturity and 4.9 times based on residual maturity.

The peso also gained on the back of market expectations that the restriction measures in Metro Manila will be lifted this week, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

President Rodrigo R. Duterte was expected to announce on Monday night the fate of Metro Manila and some nearby provinces that were placed under modified enhanced community quarantine until Tuesday.

Mr. Duterte earlier said he cannot extend the lockdown as funds are depleted and people need to work.

For today (Aug. 18), the trader gave a forecast range of P48.70 to P48.90 per dollar while Mr. Ricafort expects the peso to move around the P48.60 to P48.80 levels. — L.W.T. Noble

PSEi declines ahead of Duterte’s announcement

PHILIPPINE SHARES ended in negative territory on Monday as investors awaited the government’s announcement of new quarantine protocols in Metro Manila and nearby provinces.

The benchmark Philippine Stock Exchange index (PSEi) fell 8.13 points or 0.13% to 6,068.78 while the broader all shares index went down 1.85 points or 0.05% to 3,594.34.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a mobile phone message that aside from anticipation for President Rodrigo R. Duterte’s announcement regarding new lockdown measures scheduled Monday night, investors are likewise still “digesting” the first-half earnings of listed companies following the last day of reporting.

“The government is expected to announce new guidelines in Metro Manila and other areas. Many investors are anticipating more relaxed lockdown measures since the Palace is very vocal that we cannot afford to extend the strict measures,” Ms. Alviar said.

“Relaxed quarantine guidelines will give a positive sentiment for the market while extending strict lockdown will point otherwise,” she added.

Meanwhile, PNB Securities, Inc. President Manuel Antonio G. Lisbona said Aug. 16 marked the start of the Chinese ghost month, when the index historically goes into a slump as investors typically hold off on trading.

“Looks like the market is poised to confirm yet another year where the ghost month’s bearish nature will prevail,” Mr. Lisbona said in a mobile phone message.

Most sectoral indices declined on Monday, except property which increased 14.28 points or 0.48% to 2,959.77 and holding firms which rose 14.09 points or 0.22% to 6,259.11

Meanwhile, industrials fell 71.81 points or 0.9% to 7,884.28; financials shrank 10.23 points or 0.88% to 1,151.69; services contracted 7.72 points or 0.53% to 1,432.01; and mining and oil retreated 25.36 points or 0.43% to 5,843.88.

Value turnover stood at P5.76 billion on Monday with 3.07 billion issues switching hands, down from the previous trading day’s P9.46 billion with 6.80 billion issues.

Decliners beat advancers, 104 against 73, while 62 names ended unchanged.

Net foreign selling stood at P489.04 million at the close of Monday’s session versus Friday’s net buying worth P516.25 million.

“Foreigners turned net sellers after two consecutive days of being net buyers. As we progress through the week, we’ll have to see if the 6,000 support area holds,” Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said in a mobile phone message.

“Given the current economic circumstances, the odds are high that the market will not break through 6,100 or sustain a move above 6,100 if it does break out,” PNB’s Mr. Lisbona said. — R.M.D. Ochave

More contagious virus strain found in Manila

FILIPINO RESEARCHERS said they have found a strain of the novel coronavirus in the country that is said to be more infectious than the one that was first detected in Wuhan, China.

The Philippine Genome Center on Monday said it found the G614 strain in a small sample of positive cases in Quezon City in July.

“Although this information confirms the presence of G614 in the Philippines, we note that all the samples tested were from Quezon City and may not represent the mutational landscape for the whole country,” it said in an Aug. 13 bulletin.

Foreign researchers earlier said the variant has become the dominant strain globally.

The Philippine Genome Center in a statement said it did a whole genome as well as targeted sequencing of the COVID-19 virus in the country.

In a study published in July, the scientific journal Cell said the G614 was now the dominant strain and its mutation could increase the transmission rate.

The study said the strain was associated with higher viral loads in COVID-19 (coronavirus disease 2019) patients and could replicate better.

“There is still no definitive evidence showing that carriers of the G614 variant are actually more transmissible than those with D614, and the mutation does not appear to substantially affect clinical outcomes,” the Philippine Genome Center said.

It added that continuous monitoring must be done to understand the “evolutionary trajectory” of the COVID-19 virus so it could be better contained and treated.

Health Undersecretary Maria Rosario S. Vergeire told an online news briefing the Philippine Genome Center had been authorized to continue the study to get more information.

People should observe minimum health standards regardless of what the dominant strain of the virus is in the country, she said.

Filipino scientists are trying to trace the source of the novel coronavirus in the country using genome sequencing to understand the pandemic better.

Genome sequencing involves decoding the genomes that make up an organism’s DNA or RNA, where genetic information is stored.

American and British researchers earlier examined genome samples published on GISAID, an international resource for sharing genome sequences.

In a study of 999 British coronavirus patients, the researchers found that the G614 strain had more viral particles, although this did not change the severity of the disease.

Laboratory experiments also showed that the variant was three to six times more capable of infecting human cells.

The Department of Health (DoH) reported 3,314 new coronavirus infections on Monday, bringing the total to 164,474.

The death toll rose to 2,681 after 18 more patients died, while recoveries increased by 237 to 112,759, it said in a bulletin.

There were 49,034 active cases, 91.1% of which were mild, 6.5% did not show symptoms, 1% were severe and 1.4% were critical, DoH said.

Of the new cases, 1,918 came from Metro Manila, 274 from Laguna, 219 from Cavite, 118 from Rizal and 105 from Bulacan, it added.

Five of the new deaths came from the Calabarzon region, four each from Central Visayas and Metro Manila, three from Central Luzon, and one each from Northern Mindanao and the Bangsamoro Autonomous Region in Muslim Mindanao.

More than 1.9 million people have been tested for the virus, the agency said.

The Health department said the coronavirus death rate in the Philippines was 1.63%, lower than the global rate of 3.49%.

The infection rate was 10.35%, higher than the less than 5% benchmark of the World Health Organization, it said.

It added that the reproduction number of the disease was 0.917 as of July 28, meaning one person can infect one more.

It also takes 9.52 days for cases to double and 13.96 days for deaths to double, according to DoH.

Meanwhile, DoH and East Avenue Medical Center opened a six-story Center for Emerging and Re-emerging Infectious Disease that will help manage severe and critical coronavirus patients in the capital region.

Alfonso Nuñez, chief of East Avenue Medical Center in Quezon City near the capital, said the center can house as many as 40 patients in the emergency room. The hospital will also have an operating, labor and delivery rooms for COVID-19 patients.

In a separate statement, the Health department said the center would have two intensive care units that can serve as many as 30 critical patients, and has eight to 10 hemodialysis units.

“Ward type rooms and isolation rooms are available to ensure that these patients meet the minimum health standards to prevent further spread of the infection,” it said.

“The new building will also have an infirmary to cater to the needs of the healthcare workers who may inadvertently contract the disease,” it added.

East Avenue Medical Center needs to hire 900 more health workers including medical specialists, nurses and nursing aides, paramedic staff and other support services so it could fully operate, DoH said.

The private sector will provide medical equipment for 50 isolation rooms and 20 ICU beds, while partner agencies will help finish one of the ICU facilities, it said.

The center, built in Quezon City with the help of an inter-agency task force against the coronavirus, was not intended to be an infectious disease center. It was converted into one given the need for more facilities for COVID-19 patients. — Vann Marlo M. Villegas

Duterte isolated after coming into contact with positive official

PRESIDENT Rodrigo R. Duterte has been isolated after a Cabinet official he met with last week tested positive for the coronavirus, the presidential palace said on Monday.

No one can come close to the President while he is under quarantine, his spokesman Harry L. Roque told an online news briefing. Palace guards have also made sure that Mr. Duterte follows strict health protocols such as social distancing and avoiding physical contact.

Interior Secretary Eduardo M. Año said at the weekend he had tested positive for the COVID-19 virus again. He said he began experiencing flu-like symptoms including sore throat and body aches on Aug. 13, prompting him to go on self-quarantine.

He had himself tested for the virus the following day. He got his positive results on Aug. 15, adding that he was being closely monitored by doctors while under quarantine.

Mr. Año was the first Cabinet member to get the coronavirus back in March.

The Interior chief had called on people with whom he had close contact to go on self-quarantine and monitor possible symptoms in accordance with the Health department’s guidelines.

“I also make this announcement to emphasize the severity of the virus, and to encourage everyone to wear a mask, wash their hands frequently, and practice social distancing,” he said last week. “By adhering to these guidelines, we can all help keep our loved ones and our community safe.”

Mr. Duterte’s last talk to the nation was Monday last week, where Mr. Año was present. Mr. Roque said the President had not come into close contact with anyone during the meeting.

The President was being tested regularly for the coronavirus, Mr. Roque said. He added that Mr. Duterte, who was in his hometown of Davao City, was fine. — Gillian M. Cortez

Customs confiscates P2.2 billion worth of smuggled cigarettes

THE Bureau of Customs seized P2.2 billion worth of illegal cigarette-making machines and tobacco products from May 28 to mid July as lockdowns were eased.

The latest operations was on July 12 at the Davao port, where Customs seized P53 million worth of cigarettes smuggled from China, the Department of Finance said in a statement on Monday, citing a report from the bureau.

SITC Container Lines Philippines, Inc. imported the shipment, initially declared as tissue paper, from Ningbo, China, it said.

“The men and women of the Bureau of Customs will remain vigilant and committed in securing our country’s borders against smuggling and other customs fraud,” Customs Commissioner Rey Leonardo B. Guerrero said in the statement.

Finance Secretary Carlos G. Dominguez III earlier said cigarette smuggling might have escalated due to higher taxes and low supply.

The government barred the transport of cigarettes from factories after locking down the entire Luzon island in mid-March.

Tax stamps released by the Bureau of Internal Revenue dropped by 59% from a year earlier to 537.13 million the three months through June. This brought down the value to P18.8 billion from P59.56 billion worth of stamps released in the same period last year.

The new sin tax law that took effect in January slapped higher excise taxes on tobacco products, electronic cigarettes and alcoholic drinks. — Beatrice M. Laforga

Regional Updates (08/17/20)

Sevilla Bridge reopens

THE renovated Sevilla Bridge, connecting Shaw Boulevard in Mandaluyong City and Sta. Mesa in Manila, fully reopened its four lanes on Aug. 17. The bridge reconstruction, a joint undertaking of the Department of Public Works and Highways and San Miguel Corp., gave way to construction works of the Metro Manila Skyway Stage 3. Public Works Secretary Mark A. Villar said the renovation was also intended to improve San Juan River’s flow to mitigate flooding.

Senator questions designation of Cabinet members as local government overseers

A RESOLUTION has been filed in the Senate seeking to look into the “micromanagement” by some Cabinet members of certain local governments by designating them as overseers of the local coronavirus response. Senate Resolution No. 495 was filed by Senator Risa N. Hontiveros-Baraquel after members of the national Inter-Agency Task Force (IATF) on the coronavirus response were assigned to monitor cities in the capital Metro Manila and neighboring provinces, the area considered as the country’s epicenter of the coronavirus outbreak. “The IATF members, while arguably experts in their respective fields, are not experts nor do they have any experience in health system performance, critical care capacity, and surveillance, isolation, and treatment protocols,” Ms. Hontiveros said in a statement on Monday. She questioned, for one, the reason for the assignment of Health Secretary Francisco T. Duque III in Quezon City, when he is tasked to lead the Philippines’ overall COVID-19 response. “The members of the IATF, many of whom have no background in local governments or pandemic response, are unnecessarily overstepping,” she said, “What the LGUs need is a coherent national COVID management strategy, not undue interference.”  — Charmaine A. Tadalan

DoTr targets partial operation of Mindanao railway by Q4 2021

TRAINS BETWEEN the cities of Davao and Tagum in Davao del Norte are targeted to start running by the fourth quarter 2021, based on the Department of Transportation’s latest timeline for the Mindanao Railway Project. Full operation of the railway’s first phase — covering Tagum, Davao, and Digos City in Davao del Sur — is seen by the 2nd quarter of 2022. MRP Project Manager Clipton J. Solamo said they remain on track with the adjusted project schedule with the shortlist of project management consultants already under review. The shortlist for the design-and-build contractor is still being finalized by the Chinese government, which will provide official development assistance to partly fund the P82.9-billion first phase. “It’s (the railway project) undergoing procurement process. It’s a long process. We will follow RA 9184,” Mr. Solamo said in a text message. He is referring to Republic Act 9184, the Government Procurement Reform Act, which prescribes rules and regulations for the modernization, standardization, and regulation of procurement activities, including for project consultants. The railway, among the first priority projects listed under the Build, Build, Build program of the Duterte administration, has faced several delays due mainly to right-of-way issues. The first phase will span 102 kilometers, with three stations in Davao del Norte (Tagum City, Carmen, Panabo), three in Davao City (Mudiang, Davao central, Toril), and two in Davao del Sur (Sta. Cruz, Digos). A 10-hectare depot will be built in Tagum. The full MRP is envisioned to around the entire Mindanao mainland. — Maya M. Padillo

 Possible typhoon may affect northern Luzon this week

A LOW pressure area (LPA) east of Cagayan may become a tropical depression within 48 hours from Monday morning, weather bureau PAGASA reported. “Owing to its proximity to land, Tropical Cyclone Wind Signal #1 may be immediately raised over some provinces in northern Luzon in the initial Severe Weather Bulletin. This may result in disruption of maritime travel in these areas,” PAGASA said in its 10 a.m. bulletin on Aug. 17. The LPA at that time was about 25 kilometers east of Calayan, Cagayan. Once declared a typhoon, it will be named Helen, the 8th to enter the country this year. The last three typhoons did not make landfall and had minimal effect. With the low pressure area and prevailing southwest monsoon, rains are expected in most parts of the country until Tuesday.

Nationwide round-up

Gov’t officials downplay 45.5% unemployment in SWS survey; labor groups call for better response

GOVERNMENT OFFICIALS have downplayed a survey indicating a 45.5% joblessness rate, representing 27.3 million adult Filipinos, with half of them losing their livelihood during the still ongoing coronavirus crisis. Labor Secretary Silvestre H. Bello III said while the survey result “seriously concerns” his department, he noted a difference in the definition of jobless and unemployed. He said the official source of employment information comes from the Philippine Statistics Authority (PSA). Data released by PSA on June 5 show a 17.7% unemployment rate in April 2020, accounting for 7.3 million Filipinos. “This is a record high in the unemployment rate reflecting the effects of coronavirus disease 2019 (COVID-19) economic shutdown to the Philippine labor market. Unemployment rate in January 2020 was 5.3% while in April 2019, it was recorded at 5.1%,” PSA said. The survey, on the other hand, was conducted by the  Social Weather Stations on July 3 to 6. “We hope that a vaccine can be made available soonest so that we can bring back the confidence of our people. Also, with the anticipated enactment of the Bayanihan to Heal as One Act, the government can provide the much needed assistance to workers in the formal and informal sectors, including affected OFWs (overseas Filipino workers), to restart the economy,” Mr. Bello said.

‘COULD HAVE BEEN WORSE’
Presidential Spokesperson Harry L. Roque, meanwhile, said the survey result “could have been worse” and that he is glad that not 100% lost their jobs. “Ako po ay nagagalak na hindi 100% ang nawalan ng trabaho. Dahil po sa lockdown (I am glad that it isn’t 100% that lost jobs. Because of the lockdown), I am surprised by the resilience,” he said in a virtual briefing Monday. Labor groups expressed disappointment over the survey results as well as the government’s reaction. “The government as well as the capital should now accept the reality that the ‘whole of nation approach’ must have the frontliner and backliner workers as main element of the pandemic response. We need to preserve jobs. We need to generate new employment,” Nagkaisa Labor Coalition Chair Sonny Matula said in a statement. Another group, Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO), said Mr. Roque’s statement showed a lack of compassion for the labor sector.  SENTRO Secretary General Josua Mata said in a message to reporters, “This is a time when we need a government that is truly decisive and compassionate. One that can assure its citizens that they will not be abandoned and that action is on the way. Roque’s statement gave neither.” — Gillian M. Cortez

Private sector, local governments to conduct pooled testing for COVID-19

THE PRIVATE sector is partnering with local governments for the conduct of coronavirus pooled testing, Presidential Adviser on Entrepreneurship Joey A. Concepcion announced Monday. He said 18 companies have already committed to support the program, which will start in Makati City then expand to the 15 other cities and one municipality in the National Capital Region. Pooled testing involves taking swab samples from several individuals and testing them all together using one kit. If the test result is negative, everyone in the pool is cleared; if positive, then each one will have to be tested individually. Mr. Concepcion said they plan to start with a pool of five swabs. — Gillian M. Cortez  

11 courts designated for expropriation cases on national infra projects

THE SUPREME Court has designated 11 regional trial courts to handle expropriation cases involving national government infrastructure projects. These are located in the cities of Imus, Trece Martires, Dasmariñas, and Tagaytay in Cavite, Manila, and Caloocan City. “(T)o address the impending volume of expropriation cases to be filed before the courts, eleven RTCs may be initially designated as ‘Special Expropriation Courts for Public Roads’ to hear, try, and decide expropriation cases involving national government infrastructure projects in their respective territorial jurisdictions,” the high court said in its memorandum. More courts may be assigned upon the recommendation of the Department of Public Works and Highways (DPWH). The memo was prompted by a letter from DPWH Secretary Mark A. Villar in June seeking assistance on the possibility of expropriation proceedings for the acquisition of right-of-way for priority projects under the Build, Build, Build program. Mr. Villar, in his letter, informed the Office of the Chief Justice that two projects — the Cavite-Laguna Expressway Project and North-South Luzon Expressways Connector Road Projects — have a combined 308 expropriation cases pending in local courts. Over 900 more cases are expected to be filed in courts relating to the two projects. The Supreme Court said several Regional Development Councils have made a similar request on assigning courts for expropriation cases. — Vann Marlo M. Villegas

New round of budget cuts in July as pandemic expenses mount

THE Department of Budget and Management (DBM) has once more reduced the budgets of government agencies last month, with the agencies leading the infrastructure program giving up the most to the pandemic containment effort.

The Transportation department budget was reduced by P7.6 billion in July, bringing down its total to P82.912 billion, while that of the Department of Public Works and Highways was reduced once more by P3.2 billion to P454.555 billion. Budget reductions ordered for the two departments totaled P16.483 billion and P126 billion, respectively.

Some 20 national government agencies experienced budget cuts while two got higher allocations.

The Department of National Defense’s (DND) budget was cut by a further P2.44 billion, bringing the total reduction to P12.387 billion. The Department of the Interior and Local Government (DILG) gave up P2.2 billion, bringing the total clawed back to P5.53 billion. The DND and DILG budgets are now at P179.357 billion and P234.317 billion, respectively.

The budgets of the Department of Foreign Affairs (DFA), Department of Science and Technology (DoST) and the Department of Trade and Industry (DTI) were trimmed by P1.36 billion, P1.28 billion and P1.1 billion respectively, bringing their allocations to P22.02 billion, P19 billion and P15.8 billion.

The Department of Agrarian Reform (DAR), Civil Service Commission, and the DBM received fresh budget cuts worth P332 million, P15.8 million and P5.1 million that month, respectively.

Other agencies whose budgets were further lowered last month were: the Department of Tourism (DoT), P792 million; Department of Environment and Natural Resources (DENR), P367 million; Department of Justice (DoJ), P319 million; state universities and colleges, P310 million; the National Economic and Development Authority (NEDA), P246 million; the Department of Information and Communications Technology (DICT), P196.26 million; the Office of Presidential Communications, P161 million; the Office of the Vice-President, P51 million; the Legislative Executive Development Advisory Council (LEDAC), P26 million; and other executive offices, P129 million.

Receiving additional budget allocations were the Department of Agriculture (DA) and the Department of Education (DepEd).

The DBM did not outline how much was added to their budgets, but said the DA budget as of July was P48.43 billion compared with P48.42 billion in June. The DepEd’s budget was listed at P499.43 billion in July against P497.16 a month earlier.

The DBM has adjusted agency budgets four times this year. — Beatrice M. Laforga

Aerospace firms back fiscal incentives for manufacturing sector

THE aerospace sector backed calls for fiscal incentives to prop up manufacturers and the construction industry to help the economy recover from the coronavirus disease 2019 (COVID-19) pandemic.

The Department of Trade and Industry (DTI) has proposed to Congress incentives for companies that retain their workers and relocate to the provinces, addressing areas not tackled by the Bayanihan II stimulus bills now being harmonized in bicameral conference sessions.

The Aerospace Industries Association of the Philippines (AIAP), in a letter dated Aug. 12 to Senator Juan Edgardo M. Angara and Representative Luis Raymund F. Villafuerte, Jr.,  said that they support the DTI proposals, including income tax holidays for companies that retain 90% of their workers.

The business group representing aerospace parts manufacturers and suppliers said that the manufacturing sector has been “badly affected” by the pandemic.

“Some of our members have repurposed their equipment to help in fighting the pandemic. The Bayanihan II can help the country recover faster since there is a huge decline in air travel thereby affecting the whole aerospace industry,” the group said.

The group supports proposals to relax nationality restrictions for foreign investors relocating production facilities to the Philippines, ease requirements for industrial and service facilities that meet certain requirements to be proclaimed as export zones, and extend preferential treatment to domestic suppliers in government procurement.

AIAP also backed the expansion of government loan programs for micro, small, and medium-sized enterprises as well as the year-long grace period on loan payments.

Finance Secretary Carlos G. Dominguez III asked to further shorten the proposed grace period to 45 days, after the Bicameral Conference Committee working on the Bayanihan to Recover as One Act (Bayanihan II) bill agreed to cap it at 60 days.

AIAP said that a loan payment freeze would help the sector recover while it waits for demand to return.

The group also supports a state bank’s involvement in a joint-venture special holding company to help companies affected by the pandemic to address solvency issues.

“As of now, most airline-associated supply chains are greatly affected and this provision can maintain and sustain the industry so it can get back on track if there is a need for the government to be part of that company to ensure the survival of certain companies deemed strategic,” AIAP said.

Separately, the Chemical Industries Association of the Philippines also supported the Trade department’s proposals.

In a letter to Secretary Ramon M. Lopez on Aug. 12, the group said that a resurgence of the manufacturing sector would help create employment opportunities.

“We fully support the inclusion of the Manufacturing Sector and the Construction Industry in the funding allocations provided for in the consolidated bill that will be deliberated on by the Bicameral Committee of the Philippine Congress,” it said. — Jenina P. Ibañez

Reducing ASEAN trade barriers seen key to EU investments

THE Philippines’ prospects for attracting European investment in the post-pandemic period could hinge on regional partnerships and the reduction of non-tariff barriers among ASEAN member states, the EU-ASEAN Business Council (EU-ABC) said.

Businesses are more likely to invest in the Philippines if it expands its market beyond its 100 million population to the 650 million within the Association of Southeast Asian Nations (ASEAN), EU-ASEAN Business Council (EU-ABC) Executive Director Chris Humphrey said in an online interview Tuesday.

“If these non-tariff barriers continue to exist between the ASEAN member states, you are naturally restricting your markets and therefore your attractiveness,” he said.

Non-tariff barriers include some sanitary and phytosanitary measures, pre-shipment inspections, complex regulations, and quantity and distribution restrictions, among others.

Mr. Humphrey said that ASEAN must harmonize its trade standards, simplify customs procedures, and reduce restrictions on business ownership.

“I don’t think any one country in the region can achieve what is needed coming out of this pandemic. It needs all 10 working together, and working faster together. If you get the regional approach right first then at that point the 10 countries can compete like crazy for the investments that they’re all going to be seeking going ahead,” he said.

“The economies of each country are not going to be big enough to attract the levels of investment that are required. They need to be moving as a bloc of 10.”

Mr. Humphrey said that he expects a redistribution of supply chains to minimize disruptions after the pandemic, which could create opportunities for the Philippines.

“You’ve got a young, dynamic, fairly well-educated population there as well, so there is a big chance here for the Philippines moving forward and attract more investment. But it needs to drag its ASEAN partners along with it.” — Jenina P. Ibañez

NCR wholesale price growth of construction materials eases

GROWTH in wholesale prices of construction materials in Metro Manila slowed in June, the Philippine Statistics Authority said Monday.

The construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) grew 1.2% year on year in June, against an increase of 1.3% in May.

The June reading was the lowest since December, when it also posted a gain of 1.2%.

The deceleration in the CMWPI was driven by the decline in plumbing fixtures and accessories/waterworks at 0.5% compared to May’s 0.8% growth. Contractions were also noted in the prices of fuels and lubricants (-10.5% from -21.3%) and plywood (-0.4% from -0.9%).

Also posting slower price growth were hardware (3.2% in June from 4.7% in May); galvanized iron sheets (1.5% from 2.8%); tileworks (16.5% from 17.5%); doors, jambs, and steel casements (0.1% from 0.4%); electrical works (0.9% from 1.1%); and polyvinyl chloride (PVC) pipes (6.8% from 7.5%).

The year-on-year growth in other commodities remained unchanged from the previous month: sand and gravel (1.3%); and glass and glass products (7.1%).

Meanwhile, price growth accelerated for concrete products and cement (0.8% from 0.7%); lumber (3.9% from 3.3%); reinforcing and structural sheets (0.4% from 0.3%); and painting works (0.9% from 0.7%).

Price growth was flat for asphalt and machinery and equipment.

“The decline in the wholesale price index for construction materials may reflect the poor demand for construction projects at this time given the pandemic,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

“As noted in (the second-quarter) gross domestic product (GDP), the gross value added (GVA) in construction was down by double digits from the same period last year due to restrictions in movement and the general slowdown in economic activity,” he added.

GDP declined 16.5% in the second quarter — the worst quarterly performance based on available government quarterly data dating back to 1981. Construction, in particular, declined by 33.5% year on year during the period.

“Given the dire outlook for construction and the economy as a whole, we expect wholesale prices for construction to remain on the downtrend for the next couple of quarters,” Mr. Mapa said. — Michelle Anne P. Soliman

No urgency to explore in West PHL Sea while pandemic depresses prices — academic

WEAK OIL PRICES during the pandemic serve as a disincentive to joint exploration with China in the West Philippine Sea, a maritime law expert from the University of the Philippines said.

Jay L. Batongbacal, head of the University of the Philippines Institute for Maritime Affairs and Law of the Sea, said in a virtual forum Monday that although global oil demand is starting to pick up, prices remain low, undercutting the case for exploration.

“With lower oil prices, (the) incentive to explore is not as high or not as urgent at this point,” he said.

“It’s a kind of a disincentive for us to really push hard and fast on joint exploration because ‘di ganoon ka-urgent ‘yung need (the need is not really urgent) and the market is not favorable right now,” he said.

Exploration typically needs to be supported by buoyant prices to offset the added expense and risk of prospecting. The oil industry works on the basis of tapping fields that cost least to produce from, which can be profitable even when prices are low. Such fields return high margins when prices are high. Marginal areas that are in deep waters, are hard to reach, or are subject to territorial disputes become more attractive as high prices make them profitable.

Representatives from China and the Philippines have yet to meet to discuss exploring the disputed sea, according to Energy Undersecretary Felix William B. Fuentebella, speaking at the same briefing.

“The legal groups between China and Philippine will still meet to discuss the details (of the joint exploration); that’s the latest for now,” he said.

Prof. Batongbacal claimed that foregoing the opportunities in exploring the WPS won’t have “as big of an impact on our energy needs for now” as the need for it is not yet high.

The suspension of discussions has given the Philippines more time to study and to come up with a legislative framework required for exploration and development of the contested waters, the lawyer said.

“‘Yung rules kasi natin naka-set up na (Our rules are set up in a way that the) government is contracting to the private sector, at ‘yung government-to-government, na may isyu pa ng pakikipag-agawan ng teritoryo, ay hindi covered (and they do not cover government-to-government deals where territory is disputed),” Mr. Fuentebella said.

“As it is right now, we have to update the exploration laws,” he said, referring mainly to Presidential Decree No. 78 or the Oil Exploration and Development Act of 1972.

China is not receptive to deals structured as partnerships between a government and a foreign private firm, in which the company is subject to the laws of the government.

The Department of Energy’s Philippine Conventional Energy Contracting Program seeks investments from both local and foreign entities who can either choose to bid among the 14 predetermined areas for exploration offered by the country or to nominate other areas.

The department has received offers from undisclosed investors to survey three oil prospects in the WPS under this program.

According to Mr. Batongbacal, there must be a framework that recognizes the equal legislative powers of two states entering into a joint agreement, which does not bind them to each other’s laws.

Another crucial issue in the ongoing deal is the perception of surrendering the country’s sovereign rights to its territory.

“The legislation has to make it very clear na (that) any action or agreement into, like this, wala talaga siyang prejudice sa ating position (it’s without prejudice to our position),” he said.

He also proposed a treaty governing state-to-state partnerships. “It’s basically another treaty with its own special legislation to implement that treaty,” he said. — Adam J. Ang

1...7,6457,6467,647...12,701Page 7,646 of 12,701
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube