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Impact Hackathon 2020 seeks to support innovative solutions to pressing social challenges

By Patricia B. Mirasol

Impact Hub Manila (IHM) brings back its Impact Hackathon this year in the virtual space to find and support digital innovations for current social challenges.

“Last year, I had a dream: to provide the same support we’ve been doing here and bring that outside,” said Ces Rondario, founder and CEO of IHM, a social impact incubator and network of entrepreneurs and changemakers. “We wanted to find a way to decentralize stuff we were doing here in Manila and contribute to countryside development.”

The second Impact Hackathon aims to find innovations for social challenges amid the pandemic. Set to run from August 17 to 21, the virtual event will concentrate on five themes: climate change, education, food and agriculture, health and wellness, and smart cities.

TIMELINE AND ACTIVITIES

Participating teams are expected to create minimum viable products by the end of the hackathon. Winning ideas will be incubated by IHM and its partners, who will also support the scaling of the projects to ensure impact and sustainability. Winners will take home over US$100,000 worth of prizes, including access to IHM’s incubation program and its global network of experts and entrepreneurs.

Learning sessions will serve as a platform for discussions and network-building among participants, mentors, and partners.

The hackathon will culminate with a festival titled “2050 Fest,” in which experts, industry leaders, and collaborators come together for panel discussions and the announcement of winners.

The timeline is as follows:

July 1 Opening of registration portal

Aug. 17 Opening program

Aug. 18–21 Hackathon proper and learning sessions

Aug. 22–23 Jury deliberation

Aug. 24 “2050 Fest” culmination program

Aug. 25 Announcement of national winners

Teams are advised to have someone who can pitch and effectively tell the story behind their solution.
Malcolm Tan of Technicorum Holdings Pte Ltd., one of this year’s hackathon partners, also suggested looking into international and inclusive solutions. “Don’t be just restricted by geographic location. Look beyond your borders.”

Ms. Rondario shared that they are in talks with telco partners and are looking into providing Internet support for the participants. “We want to make this as accessible as possible.” She also hopes to see more women joining the event.

SOCIAL INNOVATION CATALYST

Impact Hackathon is part of Impact 2050, a multi-year program designed by IHM to create large-scale economic impact through cultivating the Philippine startup and innovation ecosystem.

Partners from Impact Hackathon 2019 like the Quezon City government, Friedrich Naumann Foundation, Asian Development Bank, and KMC will be back to support this year’s hackathon along with new collaborators such as the Office of Senator Francis Pangilinan, iProcure, Unifinity, Salesforce, Technicorum Holdings Pte Ltd., Multisys Technologies Corporation, and TrueDigital among others. Ms. Rondario likewise mentioned the support of the Department of Agriculture, National Economic and Development Authority, Department of Trade and Industry, Department of Information and Communications Technology, and the Department of Science and Technology.

For more details, go to impact2050.com. Interested participants can register at impact2050.com/impact-hackathon.

Google pulls 2,500 China-linked YouTube channels over disinformation

Google says it has deleted more than 2,500 YouTube channels tied to China as part of its effort to weed out disinformation on the video-sharing platform.

The Alphabet-owned company said the channels were removed between April and June “as part of our ongoing investigation into coordinated influence operations linked to China.”

The channels generally posted “spammy, non-political content,” but a small subset touched on politics, the company said in a quarterly bulletin on disinformation operations.

Google did not identify the specific channels and provided few other details, except to link the videos to similar activity spotted by Twitter and to a disinformation campaign identified in April by social media analytics company Graphika.

The Chinese Embassy in the US didn’t immediately respond to a message seeking comment. Beijing has in the past denied allegations of spreading disinformation.

Disinformation seeded by foreign actors has emerged as a burning concern for American politicians and technologists alike since the 2016 presidential election, when Russian government-linked actors pumped hundreds of thousands of deceptive messages into the social media ecosystem.

Many have spent the past four years trying to avoid a repeat of 2016, with companies like Google and Facebook issuing regular updates on how they’re combating online propaganda.

The bulletin also mentioned activity tied to other countries, including Iran and Russia. — Reuters

Facebook purges ads for illegal wildlife in SE Asia as online trade surges

YANGON — An ad showing a civet cat cowering in a cage being offered for sale on Facebook was just one of hundreds that the social media giant has removed in a crackdown on Southeast Asia’s illegal wildlife trade during recent weeks.

“Not too wild, not too-well behaved. If interested, call…” the seller wrote on the post, using an account in Myanmar, a major source and transit point for the trade in wild animals.

Facebook has a ban on the sale of animals on its platform.

But, in the five months through May 2020, a report seen by Reuters showed World Wildlife Fund researchers had counted 2,143 wild animals from 94 species for sale on Facebook from Myanmar alone.

The vast majority of posts—92%—offered live animals, including birds of prey, while gibbons, langurs, wild cats, and hornbills were in high demand.

Wildlife charities said more than 500 posts, accounts, and groups were taken down in April and July after they alerted Facebook, which said its staffers remove content that breaches rules as soon as they become aware.

“We are committed to working with law enforcement authorities around the world to help tackle the illegal trade of wildlife,” a Facebook spokesperson said.

‘INCREASING IN EVERY COUNTRY’

Campaigners say the advent of zoonotic diseases like the novel coronavirus, which is suspected of having jumped from animals to humans, has not quashed demand from buyers.

Southeast Asia is a major hub in the multi-billion dollar global wildlife trade and, according to monitors, sellers are increasingly using social media due to its massive reach and private chat functions.

“It’s increasing in every country,” said Jedsada Taweekan, a regional program manager for WWF, adding that the volume of wildlife products sold online had approximately doubled since 2015.

Myanmar came under fire in recent weeks over reported plans to allow captive breeding of about 175 threatened species including tigers and pangolins. Naing Zaw Htun, a senior forestry department official, told Reuters social media had become “one of the major drivers of the wildlife trafficking,” and the aim of the captive breeding plan was to reduce poaching.

Fighting the illegal online wildlife trade poses a serious challenge for governments across the region, where many national laws lag behind, said Elizabeth John, senior communications officer for TRAFFIC, a non-government organisation.

She said Facebook had been “very proactive in trying to address the online trade” but faced a “considerable logistical challenge” monitoring posts.

A study by TRAFFIC published in early July found more than 2,489 ivory items for sale across Indonesia, Thailand, and Vietnam on Facebook and Instagram, which is owned by Facebook.

TRAFFIC said 557 out of 600 posts, groups and profiles subsequently flagged to Facebook were removed. WWF said four Facebook accounts and seven groups, each with thousands of members, were removed in response to their research in Myanmar.

The company says it uses a combination of technology and reports from NGOs and others to detect and remove content.

Relying on tip-offs isn’t good enough, said Michael Lwin, founder of Myanmar-based tech start-up Koe Koe Tech. “Social media platforms, in general, need a more systematic response,” Mr. Lwin said.

After the cloud, the edge is computing’s next frontier

by Patricia B. Mirasol

We are in the cloud-computing era. Many of us already use cloud-based services like Dropbox, Gmail, Office 365, and Slack, even as more cloud-powered services like the soon-to-launch Xbox Game Pass Ultimate are being developed for our benefit. 

The next frontier after cloud computing is edge computing—or computing that’s done at or near the data source instead of relying on the cloud in one of the many data centers spread all over to do the work.

Self-driving cars and robotic surgery demonstrate how edge computing works. Instead of relying on a data center in, say, Singapore to process the coordinates of a self-driving car and its immediate environment in the streets of Manila, it makes more sense to have the processing capabilities as close as possible to where the car is. 

Edge computing delivers low latency (meaning there is minimal delay despite a high volume of data messages) and handles high bandwidth requirements where clients need to make very quick decisions. 

One product that capitalizes on edge computing is IBM’s Cloud Satellite. “Cloud Satellite has the ability to take a piece of public cloud functionality and bring it as close as possible to the customer. Rather than having a cloud service sitting in Singapore, Japan, or Sydney, you’re taking some of the cloud functionality and bringing it to the Philippines, so you can effectively deploy in the Philippines rather than connecting back to the public cloud,” said Gajun Ganendran, Chief Technology Officer and Presales Leader of IBM Cloud Platform Asia Pacific. 

Apart from transportation and healthcare, the technology has practical applications in sectors such as telecommunications and travel. Ditto for regulated industries like banking and finance that may have requirements on security and data sovereignty (the concept that data may be subject to the laws of more than one country; occurs when data is stored digitally with a cloud service provider and may be stored overseas).

Since vendor lock-in is a challenge that many clients face when they adopt public cloud technology, IBM is making it more accessible through OpenShift, Mr. Ganendran said. OpenShift is an open, automated, applications-based platform by IBM subsidiary RedHat. Using such a platform gives the clients the ability to break away from vendor lock-in requirements.

IBM Cloud Satellite will be available later this year.

India widens China app ban to cover more from Xiaomi, Baidu

NEW DELHI — India has banned some mobile apps of Chinese companies such as Xiaomi Corp. and Baidu Inc., three sources told Reuters on Wednesday, in New Delhi’s latest move to hit Chinese companies following a border clash between the neighbors.

India in June outlawed 59 Chinese apps for threatening the country’s “sovereignty and integrity,” including ByteDance’s video-sharing app TikTok, Alibaba’s UC Browser and Xiaomi’s Mi Community app.

Another ban was imposed in recent weeks on about 47 apps which mostly contained clones, or simply different versions, of the already banned apps, the sources said.

Unlike its June move, the government did not make its latest decision public, but there are a few new apps that have made it to that list, including Xiaomi’s Mi Browser Pro and Baidu’s search apps, the sources said.

It wasn’t immediately clear how many new apps have been affected.

India’s IT Ministry and the Chinese Embassy in New Delhi did not respond to a request for comment. China has previously criticized India’s decision to ban the apps.

A spokesman for Xiaomi in India said the company was trying to understand the development and will take appropriate measures. Baidu declined to comment.

A ban on the Mi Browser, which comes pre-loaded on most Xiaomi smartphones, could potentially mean the Chinese firm will need to stop installing it on new devices it sells in India.

Xiaomi is India’s top smartphone seller with close to 90 million users, according to Hong Kong-based tech researcher Counterpoint.

The bans are part of India’s moves to counter China’s dominant presence in the country’s Internet services market following a border clash in June between the two nuclear-armed neighbors in which 20 Indian soldiers were killed.

India has also made approval processes more stringent for Chinese companies wanting to invest in the country, and also tightened norms for Chinese companies wanting to participate in government tenders. — Reuters

Facebook, Twitter pull Trump posts over coronavirus misinformation

Facebook Inc. on Wednesday took down a post by US President Donald J. Trump, which the company said violated its rules against sharing misinformation about the coronavirus.

The post contained a video clip, from an interview with Fox & Friends earlier in the day, in which Mr. Trump claimed that children are “almost immune” to COVID-19.

“This video includes false claims that a group of people is immune from COVID-19, which is a violation of our policies around harmful COVID misinformation,” a Facebook spokesman said.

A tweet containing the video that was posted by the Trump campaign’s @TeamTrump account and shared by the president was also later hidden by Twitter Inc. for breaking its COVID-19 misinformation rules.

A Twitter spokesman said the @TeamTrump account owner would be required to remove the tweet before they could tweet again.

The Trump campaign accused the companies of bias against the president, saying Mr. Trump had stated a fact. “Social media companies are not the arbiters of truth,” said Courtney Parella, a spokeswoman with the campaign.

The Centers for Disease Control and Prevention (CDC) has said that while adults make up most of the known COVID-19 cases to date, some children and infants have been sick with the disease and they can also transmit it to others.

An analysis by the World Health Organization of 6 million infections between Feb. 24 and July 12 found that the share of children aged 5–14 years was about 4.6%.

The White House did not immediately respond to a request for comment. During a briefing at the White House, Trump repeated his claim that the virus had little impact on children.

“Children handle it very well,” he told reporters. “If you look at the numbers, in terms of mortality, fatalities… for children under a certain age… their immune systems are very very strong and very powerful. They seem to be able to handle it very well and that’s according to every statistical claim.”

It was the first time Facebook had removed a Trump post for coronavirus misinformation, the company’s spokesman said.

It also appeared to be the first reported instance of the social media company taking down a post from the president for breaching its misinformation rules.

Twitter has taken down a post retweeted by Mr. Trump pointing to a misleading viral video about the coronavirus, but left up clips of the president suggesting scientists should investigate using light or disinfectant on patients.

Twitter said those remarks expressed a wish for treatment, rather than a literal call for action.

It also left up a March post from Tesla Inc.’s outspoken CEO Elon Musk stating that “kids are essentially immune” from the virus.

Facebook has taken heat from lawmakers and its own employees in recent months for not taking action on inflammatory posts by Mr. Trump.

The company has previously removed ads from Mr. Trump’s election campaign for breaking misinformation rules, in that case around a national census.

It also took down both Trump posts and campaign ads that showed a red inverted triangle, a symbol the Nazis used to identify political prisoners, for violating its policy against organized hate. — Reuters

Startup entrepreneurs see opportunities in PH agriculture

By Mariel Alison L. Aguinaldo

The agricultural supply chain must be shortened, consolidated, and modernized, said agritech (agricultural technology) startup entrepreneurs.  

“Every time there’s a drop or any handling, you have to peel away the layers, and then that becomes waste… If you shorten the supply chain, you can greatly reduce your waste,” said Pierre Curay, co-founder and CEO of software-as-a-service provider InsightSCS, during a webinar on making local farming “pandemic-proof.”

In the Philippines, the agricultural system is fraught with middlemen, whose services increase the cost of produce. According to the Food and Agriculture Organization, 14% of food is lost before it reaches the retail level.

Optimizing the supply chain entails collaboration and data consolidation among stakeholders, including farmers, traders, consolidation hubs, and logistics providers. Mr. Curay cited the supply chains in the fast-moving consumer goods sector as a model for agriculture.

“Everybody shares information. We know, at each point of the supply, when it will arrive, when it will get delivered, and when it’s going to be manufactured. That’s something that we need to have,” he said.

Entrepreneurs can modernize parts of the system through e-commerce channels that allow customers to buy produce, without having to leave their homes. 

“You could have your produce delivered within 30 minutes,” Joshua Aragon, founder and chief executive officer of Zagana, a platform that delivers produce door-to-door from 6 a.m. to 7 p.m.

Agritech entrepreneurs Like Mr. Aragon are asking help from the government to collate and digitize relevant data, such as the consumption rates for different areas.

“Even if my company moved around 420 tons of goods in the past three months, that’s just a fraction of the consumption data that’s actually needed to drive production. There has to be some way so that we can go micro in terms of each barangay… just so we actually forecast what’s needed for every city and every barangay in this country,” said Henry James Sison, founder and chief farming officer of Agro Digital PH, an enterprise resource planning utility and service for organized farmers.

Philippines plunges into recession, the first since 1991

The Philippine economy shrank for the second consecutive quarter, officially entering recession territory, data by the Philippine Statistics Authority (PSA) showed.

The Philippine gross domestic product (GDP) shrank 16.5% in the second quarter, the PSA reported earlier this morning.
The preliminary figure was lower than the 0.7% decline in the previous quarter and a reversal from the 5.4% growth in the second quarter of 2019.

This was the biggest contraction based on available PSA data. The second-largest drop was in the third quarter of 1984 when the economy posted a 10.7% decline.

The second-quarter result also put the Philippines into a technical recession—defined as the economy’s GDP posting two straight quarters of decline—for the first time since 1991.

The latest figure was lower than the median decline of 11% in a BusinessWorld poll of 17 economists conducted last week.

The country’s first-half GDP performance stood at -8.6%, way off the expected contraction of the government at 2.0-3.4% this year.

Gross national income—the sum of the nation’s GDP and net income received from overseas— posted a 17% decline in the April-June period compared to 4.9% growth in the 2019’s comparable three months. — Marissa Mae M. Ramos

Agricultural output edges up in Q2

Agricultural output rose 0.5% in the second quarter, thanks to growth in crops and fisheries sectors. — BLOOMBERG

By Revin Mikhael D. Ochave

THE country’s agricultural output picked up slightly in the second quarter, driven by growth in crops and fisheries sectors, the Philippine Statistics Authority (PSA) said on Wednesday.

The PSA said the value of production of the farm sector — which contributes about a tenth to the country’s gross domestic product (GDP) and a fourth of jobs — grew by an annual 0.5% in the April to June period from -1.4% seen in the same period in 2019. It was also an improvement from the -1.7% in the first quarter, which was revised from the initial -1.2% reported last May.

For the first half, agricultural output contracted by 0.6%.

“Production increases were noted for crops and fisheries during the period. On the other hand, livestock and poultry posted decreases in outputs. At current prices, the value of agricultural production amounted to P439.8 billion. This was 4.6% higher than the previous year’s record,” the PSA said.

Glenn B. Gregorio, director of Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) said the second-quarter result, despite being positive, must be taken with a grain of salt.

“Despite the expected contraction due to coronavirus disease 2019 (COVID-19) pandemic, the positive growth, albeit at 0.5%, is a good sign as it points to the need for the agriculture sector not to just simply ‘weather the storm’ but ensure that it provides enough food for everyone for the long haul,” Mr. Gregorio said in an e-mail.

LOWER TARGET
Even with the improvements seen in the second quarter, Agriculture Secretary William D. Dar said they are now targeting 1.5% agricultural output growth for the entire year..

“But with this pandemic, reaching our (original) 2% growth target for the year is difficult. We hope that we can at least reach 1.5%. If the situation permits and the country’s agricultural sector will continue to work hard, combined with the help of our farmers, fishers, and the agriculture business sector, we will almost reach 2%,” Mr. Dar said in a virtual briefing.

However, Finance Secretary Carlos G. Dominguez III said the Agriculture department should still strive to achieve the original 2% annual growth target.

“I leave this challenge to Secretary Dar and the Department of Agriculture (DA): you must fulfill the target of an annual growth rate of at least 2% for the agriculture sector. This is needed to keep ahead of the country’s annual population growth rate, which is estimated to be around 1.4% in 2019 based on the Philippine Statistics Authority data. The steady growth of our agriculture sector is crucial to achieving stable food prices for all Filipinos,” Mr. Dominguez said in a speech at a DA event.

BRIGHT SPOTS
Crops output, which accounted for over half of the sector’s total production, grew by 5% in the second quarter, as palay and corn production jumped by 7.1% and 15.4%, respectively. For the first six months of 2020, crop production went up by 1.1%.

Bangko Sentral ng Pilipinas (BSP) Monetary Board Member V. Bruce J. Tolentino said the 7.1% growth in palay production may be attributed to the positive impact of the DA’s Rice Competitiveness Enhancement Fund (RCEF) program.

“However, rice prices increased 10.1% in the second quarter of 2020 compared to the same period in 2019, most likely due to the transport and logistics constraints arising from the lockdowns imposed due to the pandemic,” Mr. Tolentino, former deputy director-general of the International Rice Research Institute, said in an e-mail.

For Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P), the second-quarter result was not a surprise.

“The country’s palay production is up, plus our rice stocks are well supplied with imports, while hog and poultry production are down,” Mr. Dy said in a mobile phone message.

Mr. Dy also noted the increase in local corn production during the quarter was surprising because its peak season is during the third quarter.

Fisheries output edged up 0.9% in the April to June period, accounting for 16% of total agricultural output. However, fisheries production slipped 0.7% for the first half.

Pampanga State Agricultural University professor Roy S. Kempis attributed the improvement in the fisheries sub-sector to the National Government’s efforts in opening up the economy despite the pandemic.

“The opening up of the economy made fishing grounds in the seas and fish areas accessible. More fish could now be caught and/or produced,” Mr. Kempis said in a mobile phone message.

Meanwhile, the country’s livestock production, which contributed 17.3% of total farm output, fell 8.5% in the second quarter. Hog production slipped 5.2%, while cattle and carabao production dropped 29.5% and 26.5% respectively.

“With the rising prices in meat, this was a result of the consequential decline in production especially on pork due to the closure of pig farms and operations brought about by the African Swine Fever (ASF),” Mr. Kempis said.

The country’s poultry sub-sector, which accounted for 13% of total agricultural output, also slid 4.7%. Chicken and duck production both declined by 7.8%.

“In chicken, oversized dressed chickens abound in markets may be a consequence of the delaying release of production from 28 to 32-35 days. This may have happened because of the limited or restricted operations of restaurants and carinderias,” Mr. Kempis said.

UA&P’s Mr. Dy said the agriculture sector may be able to sustain growth into the third quarter, although it will be minimal.

“The stricter lockdowns across the country are hurting demand, coupled with many Filipinos with no jobs and no income. This will result in less food demand,” Mr. Dy said.

Mr. Kempis said the agricultural output growth may be better than 0.5% in the third quarter.

Meanwhile, SEARCA’s Mr. Gregorio said the country’s agriculture sector still has much work to sustain the growth for the rest of the year.

“May I rally for more technological innovations, such as tunnel ventilation technology, to support the swine and poultry sector to allow them to bounce back with its production for the rest of the year,” Mr. Gregorio said.

“There is also a need to support the government in its efforts to control and eradicate ASF, among other challenges the livestock sector is facing,” he added.

The government is scheduled to release second-quarter gross domestic product (GDP) on Thursday (Aug. 6). Agriculture typically accounts for not more than 10% of overall economic output.

Performance of Philippine Agriculture

Performance of Philippine Agriculture

THE country’s agricultural output picked up slightly in the second quarter, driven by growth in crops and fisheries sectors, the Philippine Statistics Authority (PSA) said on Wednesday. Read the full story.

Performance of Philippine Agriculture

Inflation picks up in July

Inflation quickened in July as lockdown restrictions eased, the statistics agency said on Wednesday. — PHILIPPINE STAR/EDD GUMBAN

THE overall year-on-year increase in prices of widely used goods quickened slightly in July, the fastest in six months, the Philippine Statistics Authority (PSA) reported on Wednesday.

Preliminary data from the PSA showed headline inflation at 2.7% last month, picking up from the 2.5% pace in June and the 2.4% rate in July 2019.

The July figure was a tad higher than the 2.6% median in a BusinessWorld poll conducted late last week and fell within the 2.2%-3% estimate given by the Bangko Sentral ng Pilipinas (BSP) for that month.

Year to date, inflation settled at 2.5%, still within the BSP’s 2%-4% target band and above the 2.3% forecast for the entire 2020.

Core inflation, which discounted volatile prices of food and fuel, stood at 3.3% in July, accelerating from 3% the previous month and 3.2% logged last year.

Food-alone inflation eased to 2.5% from 2.7% the previous month, but faster than 1.7% a year ago.

The PSA attributed the July result mostly to the transport index, which recorded a faster inflation rate of 6.3% during the month from 2.4% in June.

The PSA also noted annual increments in the following commodity groups: alcoholic beverages and tobacco (19.3% from 18.5% in June); housing, water, electricity, gas and other fuels (0.8% from 0.3%); restaurant and miscellaneous goods and services (2.5% from 2.3%).

Moreover, the PSA reported preliminary figures for inflation as experienced by low-income households for July. With heavier weights on essentials such as food, the inflation rate for the bottom 30% of income households was 2.9%, slower than June’s three percent, but faster than July 2019’s 2.5%.

“The July 2020 [headline] inflation of 2.7% was within the BSP’s forecast range of 2.2-3.0%. The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation is expected to remain benign over the policy horizon due largely to the potential adverse impact of COVID-19 on the domestic and global economic prospects,” BSP Governor Benjamin E. Diokno said in a Viber message to reporters. 

Mr. Diokno said inflation is likely to settle close to the midpoint of the government’s 2-4% target range for 2020 to 2022, adding the Monetary Board (MB) will consider the latest inflation outlook along with the release of second-quarter gross domestic product (GDP) data today (Aug. 6) when it meets on Aug. 20 to discuss monetary policy.

In a note, HSBC Global economist Noelan Arbis said inflation “remains largely contained” in the country, but noted a “few interesting surprises.”

“Transport costs continued to rise at an above-trend pace sequentially, despite global oil prices remaining relatively steady compared to the previous month. This might be a result of higher demand for transportation services, as the economy emerged out of lockdown. Other discretionary line items, such as restaurants and miscellaneous goods and services, also saw above-trend price increases perhaps due to the economy re-opening,” Mr. Arbis said, who noted these are more likely one-off price increases.

“We expect inflation to remain below midpoint of the BSP’s 2-4% target range for the remainder of the year,” he added.

OUTLOOK
“With moderate inflation, the BSP is likely to focus more closely on growth in its policy rate decisions in the months ahead,” HSBC’s Mr. Arbis said.

“All things considered, we expect the BSP to cut the policy rate by another 25 basis points (bps) to 2.00% by year-end, likely in [the fourth quarter]. Moreover, we forecast an additional 200-bp cut in the RRR (reserve requirement ratio) by year-end to provide another boost to domestic liquidity. This would bring the RRR down to 10% by year-end,” he added.

The BSP has so far shaved rates by a total of 175 bps this year, with the latest easing round in June. This brought the overnight reverse repurchase, lending, and deposit rates to record lows of 2.25%, 2.75%, and 1.75%, respectively.

The central bank has likewise cut the RRR of universal and commercial lenders by 200 bps in April to 12% to boost liquidity in the midst of the lockdown. The RRR for thrift and rural banks were also cut by 100 bps in July to three percent and two percent, respectively, to support increased lending for small businesses amid the crisis.

The MB is authorized to cut up to 400 bps of lenders’ reserve requirement this year to support banks’ lending capacity during the crisis.

For ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa, the slight uptick in inflation for July “may be enough” for the central bank to keep rates on hold at their next policy meeting.

“The BSP Governor [Diokno] previously indicated he would keep his stance unchanged ‘for at least two quarters’ and we believe he will refrain from cutting policy rates further to prevent real policy rates from falling too deep into negative territory,” Mr. Mapa said in an e-mail.   

“BSP… has also shared that it will take the [second-quarter] GDP report into account for future policy decisions, but we only expect BSP to alter its stance should growth fall well past the most pessimistic GDP forecast for [the second quarter],” Mr. Mapa added.

For Security Bank Chief Economist Robert Dan J. Roces: “The latest print increases the probability that the BSP will again refrain from cutting its policy rate as real interest rates now at -0.45%. This expectation of steady rates will provide further support to the peso, although we have yet to see [the second-quarter] GDP numbers,” he said in a separate e-mail.

In a statement, the National Economic and Development Authority (NEDA) called for the national and local governments to bolster risk management systems to ensure sufficient supply and delivery of essentials that will support a stable inflation for the country.

“Although we expect that the overall consumer prices will remain benign until 2021, we recognize that the upside risks to the inflation outlook still remain,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua was quoted in the NEDA statement as saying.

“We need to remain vigilant and ensure that strategies are well-placed to ensure stable supply and delivery of essential commodities in all parts of the country,” he added. — Lourdes O. Pilar

External trade continues slump in June as coronavirus pandemic drags on

For the first half of 2020, exports declined by 17.8% to $28.43 billion. — PHILIPPINE STAR/EDD GUMBAN

THE COUNTRY’S exports and imports continued to plunge, albeit at a slower pace in June, the Philippine Statistics Authority (PSA) reported on Wednesday.

Merchandise exports shrank by 13.3% to $5.33 billion in June after a 26.9% yearly decline in May, preliminary trade data from the PSA showed.

Likewise, merchandise imports fell 24.5% to $6.63 billion in June, slower than the 40.6% plunge recorded in May.

June marked the fourth straight month of decline for exports and 14th straight month of downturn for merchandise imports.

Trade deficit in June was recorded at $1.30 billion, smaller than the $2.64-billion gap in the same month last year.

For the first half, exports were down 17.8% to $28.43 billion, worse than the -4% expected by the Development Budget Coordination Committee (DBCC) this year

Meanwhile, the merchandise import bill dropped 29% to $39.03 billion on a cumulative basis against the DBCC’s target of a 5.5% contraction for the year.

That brought the year-to-date trade balance to a $10.60-billion deficit, smaller than the $20.42-billion shortfall in the same six months last year.

In a statement released by the National Economic and Development Authority (NEDA), the continued decline in merchandise exports can be partly due to “demand factors,” particularly the economic performance of the country’s main trading partners amid the pandemic.

“With restricted mobility and economic activity due to the global pandemic, GDP (gross domestic product) growth is negatively affected. Our major trading partners’ GDP has declined in the second quarter of the year, resulting in a reduced appetite for imported goods. This has led to lower demand for Philippine exports,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua was quoted in the NEDA statement as saying.

Export of manufactured goods, which account for around 82.7% of the total exports in June, slipped 13.6% year on year to $4.41 billion from $5.10 billion last year. Total agro-based products were also down 18.1% to $403.51 million in June from $492.50 million previously. 

Electronic products, which made up more than half of the total June export sales, contracted by 10.4% to $3.18 billion. Semiconductors, which account for more than three-fourths of electronic products, also slid by 8.1% to $2.44 billion.

On the import side, raw materials and intermediate goods, which account for 42.9% of the imports bill in June, declined by 10.7% to $2.85 billion.

“This slower decline in the country’s trade performance signals the resumption of economic activities,” NEDA’s Mr. Chua said.

Even so, external trade is expected to contribute negatively to economic growth in the second quarter.

“[Second-quarter] GDP performance is expected to be worse than [first-quarter GDP]… mainly due to the pandemic. The decline in merchandise exports is a contributing factor to the decline, which is also caused by the pandemic,” John Paolo R. Rivera, Asian Institute of Management economist and adjunct faculty, said in an e-mail.

“Trade performance for the rest of the year will depend on the decisions taken by the government now to manage and contain the pandemic and chart a rapid and robust economic recovery. A good policy mix from the fiscal sector and monetary authority will influence trade as it should create a favorable trading, business, and investment environment for exporters and importers,” Mr. Rivera added.

The government will release second-quarter GDP data today.

Philippine Exporters Confederation, Inc. President and Chief Executive Officer Sergio R. Ortiz-Luis, Jr. said export performance is expected to return to positive territory towards the end of the year as businesses open up and lockdowns loosen.

“By next year, we think that it will definitely be positive,” he said in a phone interview.

“[These figures] should translate to weaker potential output for the Philippine economy in the coming months,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a note to reporters.

“[We] also expect GDP momentum to be slowed even further as the flow of capital goods, raw materials and consumer goods remains weak with positive GDP growth only expected to return in a base-effect induced rebound in 2021,” Mr. Mapa added.

China was the top market for Philippine goods in July, accounting for 16.7% with $891.58 million. It was followed by Japan with a 15.1% share or $807.05 million, and the United States’ 14.4% share or $768.66 million.

China was also the Philippines’ biggest source of foreign goods purchased in July, accounting for 23.7% at $1.57 billion. Other major import trading partners were Japan and the US, which contributed 8.5% ($567.14 million) and 8.2% ($544.28 million), respectively. — Jobo E. Hernandez

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