Peso strengthens as Diokno signals steady policy stance
THE PESO strengthened against the greenback on Monday as the central bank chief signaled rates are likely to be maintained in the upcoming policy-setting meeting.
The local unit closed at P49.01 per dollar, appreciating by 3.10 centavos from its P49.041 finish on Friday, data from the Bankers Association of the Philippines showed.
Monday’s close is its strongest in more than three years or since it finished at P48.95 per dollar on Nov. 11, 2016.
The peso opened Monday’s session at P49.05 per dollar. Its weakest was at P49.06 while its strongest showing was at its close of P49.01 against the greenback.
Dollars exchanged dropped to $409.3 million on Monday from the $647.4 million logged on Friday.
The peso gained after Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said they do not need to raise rates at the moment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
This comes ahead of the Aug. 20 policy-setting meeting of the Monetary Board.
“Signals of no local policy rate cuts supported the peso,” Mr. Ricafort said in a text message.
Mr. Diokno said in a television interview on Monday there is “no compelling reason” to slash rates further following the 175 basis points in cuts so far this year.
“I don’t see a strong reason why we should have another policy cut,” Mr. Diokno said.
Rates on the BSP’s overnight reverse repurchase, lending, and deposit facilities are at record lows of 2.25%, 2.75%, and 1.75%, respectively.
Meanwhile, a trader said the peso strengthened on expectations of a continued rise in the country’s dollar reserves.
Gross international reserves stood at a record $93.32 billion at end-June, rising by a tenth from a year ago and by $30.5 million from its May level, BSP data showed. This has already surpassed the central bank’s $90-billion projection for the year.
For today, the trader expects the local unit to move between the P49 to P49.20 levels against the dollar while Mr. Ricafort gave a forecast range of P48.95 to P49.10. — L.W.T. Noble
Bargain hunting pushes benchmark index higher
THE MAIN INDEX started the week with gains as investors continued looking for bargain stocks following last week’s sell-off.
The bellwether Philippine Stock Exchange index (PSEi) picked up 84.90 points or 1.45% to close at 5,930.92 on Monday. The broader all shares index increased 45.84 points or 1.32% to end at 3,513.37.
“Bargain hunting spilled over to the start of the week as the latest (United States) employment report showed the economy added more jobs than expected last month…,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
The Nasdaq closed lower on Friday, as data showed a sharp slowdown in US employment growth and investors worried lawmakers would fail to agree on another fiscal stimulus bill to bolster the economy from a coronavirus-induced recession.
The S&P 500 and the Dow Jones index ended flat to slightly higher on the day.
With the benchmark S&P 500 index now about 1.5% below its record high, defensive sectors including utilities and real estate were among the gainers. Tech-related stocks, which have fueled a Wall Street rally since March, posted the biggest declines and helped push the Nasdaq down more than 1% during the session.
The United States reported adding 1.8 million jobs in July, its third straight month of improvement, to boost its slowing economy that saw a record 20.5 million job losses in April.
The Dow Jones Industrial Average rose 46.50 points or 0.17% to 27,433.48; the S&P 500 gained 2.12 points or 0.06% to 3,351.28; and the Nasdaq Composite dropped 97.09 points or 0.87% to 11,010.98.
Leftover optimism, as well as bargain hunting, brought the PSEi up on Monday, particularly from a push from the property sector.
“Investors picked up on (the property) sector after it had the biggest loss last week of 3.46% week-on-week,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message. The property index rose 72 points or 2.56% to 2,884.12 on Monday.
Most of the other sectoral indices also ended the session with gains. Holding firms grew 103.76 points or 1.73% to 6,076.56; industrials increased 107.34 points or 1.39% to 7,822.97; services added 15.94 points or 1.12% to 1,437.12; and mining and oil climbed 43.85 points or 0.75% to 5,856.25. The only index in red territory was financials, which shed 6.06 points or 0.54% to 1,115.65 at the end of session.
Monday’s value turnover of P4.88 billion was down from Friday’s P10.92 billion. Some 82.96 billion issues switched hands.
“Trading…remained tepid with value turnover of P4.88 billion only, lower than year-to-date’s average of P6.5 billion, indicating that some investors are on the sidelines waiting for the fresh strong catalyst to move the market,” Ms. Alviar said.
Advancers outnumbered decliners, 125 against 74, while 45 names ended unchanged. Net foreign selling dropped to P714.27 million from P6.78 billion in the last session. — Denise A. Valdez
PhilHealth probe to continue as chief takes medical leave
A SENATE investigation of the Philippine Health Insurance Corp. (PhilHealth) for alleged corruption will continue even if the agency’s chief executive officer takes a medical leave, a lawmaker said on Monday.
“It won’t stop our inquiry and other witnesses and testimonies from coming out,” Senate President Vicente C. Sotto III said in a mobile phone message. “It won’t also stop the filing of charges against erring officials of PhilHealth if warranted.”
PhilHealth President and CEO Ricardo C. Morales told CNN Philippines he wanted to go on leave after being diagnosed with cancer in February. He said he had been undergoing chemotherapy.
“They said it’s not wise to change horses in the middle of the stream, and that was what I was trying to avoid,” he said. “In this case, nature has intervened and we’ll have to take the doctor’s advice.”
“I have relayed to my bosses my intention, so it’s up to them to decide,” Mr. Morales said.
The Senate Committee of the Whole will resume its probe on Tuesday. The state-owned insurance company allegedly bought overpriced items and gave financial aid to ineligible health facilities.
Mr. Sotto said Mr. Morales would attend the hearing via teleconferencing. Also invited were officials from the Commission on Audit, Department of Information and Communications Technology and the Presidential Anti-Corruption Commission (PACC).
The PACC last week said it had recommended the filing of charges against three dozen PhilHealth officials, which the Senate may adopt in its committee report.
“We will listen to them,” Mr. Sotto said, referring to officials from the anti-graft body. “We will ask for evidence and the reason why they’re recommending this,” he said at an online briefing.
The Senate committee might recommend that charges be filed by the Office of the Ombudsman and the Department of Justice once it ends its investigation, he said.
Meanwhile, Mr. Sotto said public officials like Mr. Morales, who complained about his illness being reported on, have no privacy.
“When you hold a high public office, you are a servant of and answerable to the people,” he said in a separate phone message. “There is no privacy. If you cannot stand the heat, get out of the kitchen.”
PhilHealth Vice-President for Operations Augustus de Villa last week quit his job but promised to cooperate with the congressional probe. Mr. De Villa, a retired military officer, said he had briefed Mr. Morales about his resignation.
Former PhilHealth anti-fraud legal officer Thorsson Keith told senators at a hearing the agency’s top officials had pocketed P15 billion through fraudulent programs.
He said the sum came from overpriced equipment the agency had bought, as well as from a program that gave financial aid to health facilities amid a coronavirus pandemic. Mr. Keith called PhilHealth executive committee officers in-house mafia members.
The agency allegedly gave advance payments to health institutions by up to three months during the pandemic, even if only P1 billion had been liquidated.
PhilHealth has denied the allegations.
Meanwhile, Justice Secretary Menardo I. Guevarra said PhilHealth officials should take a leave pending investigation.
“If they are not hiding anything, they can take a leave of absence to enable the investigators/auditors to freely complete their inquiry,” Mr. Guevarra, whose office is also conducting a probe, told reporters in a Viber group message.
“Besides, the national privacy commission has repeatedly declared that the Data Privacy Act may not be used to hinder the conduct of legitimate government investigations,” he added. — Charmaine A. Tadalan and Vann Marlo M. Villegas
DoH allots P2.4B for COVID-19 vaccines
THE Department of Health (DoH) has allotted P2.4 billion for coronavirus vaccines in its budget for next year. The amount could change depending the price of vaccines once they become available, it said.
President Rodrigo R. Duterte on Friday said China had promised to prioritize the Philippines once it finds a vaccine.
Finance Secretary Carlos G. Dominguez III also said the government was planning to buy 40 million doses for 20 million people under its free vaccination program.
Health authorities said they would start the trial of the Japanese anti-flu drug Avigan as treatment for the coronavirus on Aug. 17. The drug will be given to a hundred patients aged 18 to 74.
Japan in April said it would send the drug manufactured by Fujifilm Toyama Chemical Co., Ltd. to 38 countries, including the Philippines after clinical trials.
DoH reported 6,958 new infections on Monday, bringing the total to 136,638. The death toll rose to 2,293 after 24 more patients died, while recoveries increased by 633 to 68,159, it said in a bulletin.
DoH said there were 66,186 active cases, 92% of which were mild, 7.2% did not show symptoms, and less than 1% each were severe and critical.
Of the new cases, 4,163 came from Metro Manila, 400 from Laguna, 363 from Rizal, 312 from Cavite and 178 from Bulacan.
More than 1.6 million people have been tested, it said.
Health authorities on Sunday warned the public against buying and selling convalescent plasma — antibody-rich products collected from eligible donors who have recovered from COVID-19 (coronavirus disease 2019) — because these are “illegal, reckless and dangerous.”
The Philippine Blood Center and Philippine Red Cross-Port Area are the only certified non-hospital collection facilities, while the Philippine General Hospital and St. Luke’s Medical Center are the only ones allowed to collect plasma for treatment, it said in a statement. — Vann Marlo M. Villegas
DepEd claims to be ready for school opening on Aug. 24
EDUCATION authorities on Monday said the agency was ready to start classes on Aug. 24 despite criticisms about the viability of online learning amid a coronavirus pandemic.
Education Secretary Leonor M. Briones dismissed calls to put off basic education classes this year, which she said could negatively affect students.
The Philippines is also one of the two remaining countries — Cambodia is the other one — that have yet to open classes this year, she told an online news briefing.
Technical glitches marred the launch of the Education department’s school readiness program on Monday, according to ABS-CBN News.
The agency was supposed to showcase the different learning strategies that it will enforce starting this month, including radio, television, and learning modules.
President Rodrigo R. Duterte earlier said he would not allow face-to-face classes until a vaccine for the coronavirus is found.
The Education department earlier said 18.2 million students had enrolled for this year, 17.4 million of whom were public school students. Enrollment ended on July 15.
Education officials earlier said less than half of the country’s 800,000 public school teachers had been trained for distance learning amid a coronavirus pandemic, leading senators to question the school system’s readiness to start online classes this month.
Some senators also criticized the agency for failing to map out areas where different learning methods would be used. — Gillian M. Cortez
#COVID-19 Regional Updates (08/10/20)
COVID-19 cases in Bangsamoro region reach 500; Lanao del Sur reports local transmissions
CORONAVIRUS CASES in the Bangsamoro Autonomous Region in Muslim Mindanao reached 500 as of Aug. 9, with 116 active, 373 recovered, and 11 deaths. The active cases are located in the following provinces: Lanao del Sur including Marawi City, 37; Basilan including Lamitan City, 37; Maguindanao, 27; Tawi-Tawi, 2; and Sulu 1. There are also 499 suspected and 11 probable patients who are under monitoring, with the highest in Lanao del Sur at 154.
LOCAL TRANSMISSION
The coronavirus disease 2019 (COVID-19) task forces of Lanao del Sur and Marawi announced over the weekend that 21 of the current cases have been confirmed as the first set of local transmissions and called for a more stringent observance of health protocols. “This is a precautionary pronouncement to ensure that our local governments, public and private healthcare providers and other stakeholders can prepare for possible increase in suspected and confirmed cases,” the COVID-19 task forces said.
Contact tracing and isolation protocols are ongoing, they assured. Meanwhile, the Lanao del Surprovincial government announced that its capitol complex, located in Marawi City, will be closed from Aug. 10 to 13 for disinfection. A curfew of 8 p.m. to 4:30 a.m. is also in effect.
No pending telco tower application in Davao Region, says DILG-11
THE DEPARTMENT of Interior and Local Government-Davao (DILG-11) office said there are no pending applications in the region for the construction of telecommunication towers by leading providers Globe Telecom, Inc. and PLDT wireless subsidiary Smart Communications, Inc. “Starting on Aug. 6… we conducted our inventory… Based on our inventory, in Davao Region, existing operators such as Globe and Smart have no pending applications for new towers,” DILG-11 Regional Director Alex C. Roldan said in on online briefing. “This means that LGUs (local governments units ) have processed and no pending applications,” he added. President Rodrigo R. Duterte, in his 5th State of the Nation Address on July 27, threatened to close down or expropriate the assets of telcos if they fail to improve services by the end of the year. Telecom officials, on the other hand, have cited the longstanding challenge of having to secure numerous permits for telco tower installation and infrastructure rollout, citing in particular delays at the LGU level. Mr. Roldan said only new player DITO Telecommunity Corp., owned by Davao businessman Dennis A. Uy, has pending permit applications, which were recently filed. DITO recently unveiled a new tower in Davao del Norte, one of 170 towers planned for installation nationwide. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld.
Nationwide round-up
Journalist, non-profit groups among latest to file petition vs anti-terrorism law
THE CENTER for International Law, Inc., together with a group of law professors, journalists, and a non-profit organization, filed the 27th petition before the Supreme Court questioning the validity of the Anti-Terrorism Act. The petitioners include Foundation for Media Alternatives, Inc., Democracy.net.ph, Inc, VERA Files, Inc., and law professors from the Lyceum of the Philippines, among others. Similar to the earlier filings, they argued that the law, which took effect last July 18, contained provisions that infringe on fundamental rights in the Constitution such as the right to freedom of speech, the right of the people to peaceably assemble and petition the government for redress of grievances, and the right to freedom of association. They also pointed out that acts that can be penalized under the law are “incomprehensible and overbroad,” it said, noting that “mere thought and inception of an idea in a person” fall under the definition of terrorism in the law. “Never has intent alone been a level of culpability punishable by penal statutes because our laws have always required overt illegal acts to be the standard when it comes to punishment,” the lawsuit read. Petitioners said they they do not dispute that terrorism must be stopped, “but to direct government and citizens alike to a clearer and firmer conviction about the very purposes of government and the State, at a time when freedoms are denied in the name of national security.” — Vann Marlo M. Villegas
DFA reports 5 more injured Filipinos in Beirut blast
FIVE MORE overseas Filipinos in Beirut were reported to have been injured in the Aug. 4 explosion, the Department of Foreign Affairs (DFA) confirmed on Monday. “We are still thankful that the injuries sustained by our kababayans are not life-threatening,” Foreign Affairs Assistant Secretary Sarah Lou Y. Arriola said in a statement. This brings the total number of injured persons to 47 as of Aug. 10. In its previous report, the DFA said there were two other Filipinos missing, while four have died. The explosion occurred at a port warehouse that stored 2,750 tons of ammonium nitrate, a substance used for fertilizers and explosives, according to reports. The department is set to bring home the remains of the four victims on Aug. 16. The repatriation flight will also transport some 400 overseas workers in Lebanon. Ms. Arriola said the repatriation expense will be shouldered by the government. The Department of Labor and Employment announced Sunday that P5 billion more has been allotted to fund repatriation efforts off the government. About 32,000 Filipinos are in Lebanon, down from 33,000 in December after some of them came home amid the global coronavirus pandemic. — Charmaine A. Tadalan
Evidence of ‘gradual’ recovery emerges in June — Finance dep’t
BUSINESS leaders have reported the start of a “gradual” recovery in their sales starting June, Finance Secretary Carlos G. Dominguez III said.
“We have also learned from the industry leaders that business activities in various sectors of the economy have started to pick up following the economic standstill during the lockdown. In general, most firms reported that they have begun to see a gradual sales recovery in June, coinciding with the partial reopening of the economy,” Mr. Dominguez said in a statement Monday.
Mr. Dominguez, who has resisted pressure to spend massively at the outset of the crisis in order to keep some funds in reserve in case the pandemic is prolonged, warned that the government must perform a “difficult balancing act,” in terms of saving lives while minimizing economic damage.
He said evidence of the recovery is also showing up in the import volume and value-added tax data filed by the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR) in July.
The BIR surpassed its collection goal last month by 2.08%, generating P127 billion, while the BoC exceeded its target by 5% after generating P50 billion in duties and taxes.
Lockdown restrictions in the capital, along with the rest of the country, were eased starting June.
However, Metro Manila and nearby cities were returned to a stricter form of lockdown — known as modified enhanced community quarantine — for the first two weeks of August due to the continued rise in coronavirus cases.
He said reimposing lockdown measures will have an adverse impact over the short term but will ultimately benefit the country if it succeeds in slowing down the spread of the virus.
“The Duterte administration will not rest until we have prevailed over this extraordinary challenge. We will redouble our efforts to protect our economic gains over the past three years, prepare our economy for a strong recovery, strengthen our resilience, and solidify our return to the path of inclusive growth,” Mr. Dominguez added.
Mr. Dominguez is hoping for a “steady, yet moderate” economic recovery in the third quarter.
The economy contracted by 16.5% in the second quarter at the height of the lockdown, taking the first-half average to -9%.
Gross domestic product (GDP) should not decline by more than 2.2% in the second half to keep the full-year average within the government’s target of a 5.5% contraction.
Economic managers have set a GDP forecast range of -4.5 to -6.6% this year, against an earlier estimate of -2 to -3.4%. — Beatrice M. Laforga
Subic Freeport Expressway project 50% complete
NLEX CORP. said Monday that its P1.6-billion Subic Freeport Expressway (SFEx) capacity expansion project, which is expected to ease travel to and from the freeport zone, is now 50% complete.
Construction activities “are in various stages of development and seen to be completed by the end of the year,” NLEX Corp. said in a statement.
The project involves the construction of “two additional expressway lanes, two new spans at the Jadjad and Argonaut bridges, and a new tunnel adjacent to the existing one, transforming the road into a four-lane expressway,” it added.
NLEX Corp. expects the transport of goods in and out of the Subic Freeport to be faster and simpler once it completes the project.
Subic is home to the Subic Bay Freeport Zone, serving as a major port for Central and North Luzon.
“By increasing the road capacity of SFEx, which traverses the provinces of Bataan and Zambales, transport of goods in and out of the Subic Freeport will be faster and easier. This would also mean that the expressway can accommodate more motorists at a given time,” NLEX Corp. President and General Manager J. Luigi L. Bautista was quoted as saying.
The company said it has partnered with the Subic Bay Metropolitan Authority to include in the project scope “the raising of elevation of the Maritan Highway-Rizal and Highway-Tipo Road Junction and enhancing its drainage system to improve flood management in the area.”
The SFEx expansion is also expected to make Subic a more viable tourist and investment destination because of improved connectivity.
NLEX Corp. is a unit of Metro Pacific Tollways Corp. Its parent Metro Pacific Investments Corp. is one of three key Philippine units of Hong Kong’s 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 a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin
Mindanao rail phase 1 construction moved to 2021
THE start of the construction of the China-funded Mindanao railway phase 1 has been moved to the first quarter of 2021, with the government yet to decide on a contractor.
The Transportation department is targeting the start of construction for the Mindanao Railway Project-Tagum-Davao-Digos (MRP-TDD) by the first quarter of 2021, the National Economic and Development Authority (NEDA) Region XI said in a recent statement.
The Transportation department said in December that the groundbreaking for the project would be in the first quarter of 2020, but it did not happen.
Transportation Assistant Secretary for Project Implementation-Mindanao Cluster Eymard D. Eje told BusinessWorld by phone Monday that the department had received from the Chinese embassy the shortlist of bidders for the project monitoring consultancy package of the rail works.
Mr. Eje said the department is still waiting for the shortlist of bidders for the design-and-build package.
The list of bidders for the build-and-design contract was expected in June.
The P82.9-billion railway’s first phase, covering the 100.2-kilometer Tagum-Davao-Digos segment, will be financed through an official development assistance package from the Chinese government.
In its statement, NEDA Region XI said there was a special meeting on July 21 where Project Manager Clipton J. Solamo “reported that the validation of affected parcels in Digos City, Davao City, Panabo City, Carmen, and Tagum City is at 100%, while the Municipality of Sta. Cruz was at 69%.”
“Atty. Solamo further reported that the tagging of structures would be at 100% before the end of July 2020.”
It also said the Transportation and the Public Works and Highways departments were undertaking a study “to resolve the alignment interfaces between the MRP-TDD and the ongoing Davao City Bypass Construction project, which will commence construction in the third quarter of 2020.”
Also discussed at the meeting was “the updated timeline for the implementation of the MRP-TDD in view of the postponed field operations due to the COVID-19 quarantine,” NEDA Region XI said. — Arjay L. Balinbin
Downgrades issued by HSBC Research, Nomura after dismal GDP data
TWO major institutions downgraded their full-year growth forecasts for the Philippines in 2020 in the wake of the 16.5% contraction in second-quarter gross domestic product (GDP), with HSBC Research pricing in what would be a record contraction for the year of 9.6%.
In a report issued Monday, HSBC Economist Noelan Arbis said the institution slashed its GDP forecast for the Philippines from -3.9% previously, projecting that the “recovery ahead will be shallow” with COVID-19 (coronavirus disease 2019) cases still rising and new lockdowns ordered.
“The continued rise in COVID-19 cases domestically remains a serious concern, and in our view, has dashed any hopes for a meaningful recovery in the second half of 2020. Moreover, the absence of a big-ticket stimulus is likely to put a damper on the recovery in the year ahead,” Mr. Arbis said.
He said private consumption, a growth driver for the domestic economy, is unlikely to “bounce back meaningfully” in the third quarter since economic centers, including Metro Manila, have reverted to stricter forms of lockdown.
“Another factor weighing on our outlook is a potential decline in the government’s ability to spend on infrastructure in the quarters ahead… As COVID-19 lingers, the government’s fiscal ammunition is likely to be diverted toward more needed expenditures (i.e. health and social safety nets) and away from infrastructure,” he added.
Nomura Global Markets Research on Monday also trimmed its 2020 GDP forecast to -6.6% from -4.8% as the escalating COVID-19 outbreak points to “a shaky economic recovery.”
“The surge in unemployment and falling remittances will continue to likely weigh heavily on consumption. With still rising COVID-19 cases, the outbreak is still posing a threat to the recovery,” Nomura Global said.
The economy declined by 16.5% in the second quarter following the revised 0.7% contraction in the first quarter. The two consecutive contractions puts the Philippines in a recession, the first since 1991.
Mr. Arbis also lowered his 2021 GDP forecast to 5.7% from 7% previously, while Nomura Global expects 8.1% growth next year.
HSBC Research and Nomura Global both flagged the size of the stimulus package currently pending in Congress.
“The absence of a big-ticket stimulus program from the government has also reduced our expectations for a meaningful recovery in the near-term,” HSBC Research’s Mr. Arbis said, noting that the modest size of the package could weigh on growth prospects both this year and next year.
Nomura Global also warned of a “fiscal cliff” threatening further the economy for the rest of the year, as the government prioritizes longer-term reforms and sets limits to additional spending. It estimated fiscal expenditure growth slowing to 0.2%-5.4% year on year in the second half, against the 26.6% growth in the first half.
“Without a new program that either expands the 2020 budget or supplements it to allow new spending, we expect fiscal spending growth to slow materially in H2 vs H1 at a time when fiscal support measures are critically needed in the war against COVID-19,” it said.
It said the proposed corporate income tax cut to 25% this year from 30% under Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill “is unlikely to be an effective stimulus measure” since the benefit of a lower tax rate will remain “minimal” and may not spur spending as the profitability of businesses will be hit hard this year.
“In contrast, we think ARISE would be more appropriate if the goal is to support a more sustainable recovery and prevent the damage due to the pandemic from becoming permanent,” it added.
Several rescue bills are currently being discussed by Congress, ranging from P140 billion under the Bayanihan to Recover as One Act (Bayanihan II), which has been endorsed by the economic team; to the P1.3-trillion Accelerated Recovery and Investments Stimulus for the Economy (ARISE) bill, which economic managers said is “unfundable.”
“We think such conservatism runs the risk of undermining the economic recovery, given that the Philippines continues to see a worsening of the local outbreak despite the lockdown in mid-March,” Nomura Global said.
Economic managers expect the economy to contract 4.5%-6.6% this year, with the midpoint of the range at about -5.5%, before bouncing back to 6.5%-7.5% growth next year. — Beatrice M. Laforga