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Hog raisers still positive due to limited size of ASF cull

By Vincent Mariel P. Galang
Reporter

THE hog industry remains positive about its prospects this year, noting that the number of animals culled in the wake of the African Swine Fever (ASF) outbreak remains small, while prices are also expected to rise, prompting growers to increase production.

“Sabi ko naman (production will rise) this year compared last year… kasi yung na-cull lang 0.5%, so maliit lang yun sa total (We expect production to rise since the cull accounts for only 0.5% of the total swine population),” Samahang Industriya ng Agrikultura (SINAG) Chairman Rosendo O. So said in a phone interview. SINAG is a group of agriculture industry stakeholders including hog raisers.

According to the Philippine Statistics Authority (PSA) the swine herd as of July 1 was 12.7 million head, down 0.6% year-on-year. Since the emergence of ASF on Luzon in July, the hog cull has resulted in the destruction of 70,000 animals.

The hog industry accounted for agriculture output by value of 15.74% of the national total, equivalent to P27.735 billion in the third quarter, according to the PSA.

The industry typically accounts for just under 16% of production value in each of the third quarters of 2018 and 2017.

Hog production grew 1.96% to 551,620 metric tons (MT) during the third quarter of 2019.

Bureau of Animal Industry (BAI) Director Ronnie D. Domingo said the industry has room to grow given the limited cull.

“Some may have stopped producing pigs, but many are sustaining if not increasing their production and preparing for the golden period when the pork prices start to increase. Some parts of Luzon especially those affected by ASF lowered their levels of production. This might be neutralized by the guarded increase in Visayas and Mindanao anticipating the supply vacuum left by Luzon pork suppliers,” he said.

According to PSA data, average the farmgate price of hogs in the third quarter was P103.66 per kilo, down 10% year-on-year.

The United Nations Food and Agriculture Organization (FAO) said in its Food Outlook report that the Philippines will be producing 1.963 million tons of pork in 2019, up 4%, while imports will total 149,000 tons, down 8%, and exports will total 2,000 tons, little changed from a year earlier. Pork consumption is estimated at 2.11 million tons, up 3%.

Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P), said he projects industry growth to slow by the end of the year, but all will still depend on how the outbreak is managed.

“The fourth quarter growth could be lower, but it will depend on how ASF pans out. Pork demand appears to be dented by misguided consumer perceptions regarding ASF,” he said in a text message.

Next year, Mr. So said it would be difficult to forecast performance, and supported local government bans on the movement of pork products until a better quarantine system is put in place.

Mr. Dy added that lower demand for pork due to ASF “could bring 2020 growth (of) near one percent,” as consumers shift to consumption of chicken.

TRO-exempt Build, Build, Build projects raise constitutional doubts

A BILL that would insulate flagship infrastructure projects from temporary restraining orders (TROs) issued by most courts has raised questions about the emergency powers that will trigger the proposed TRO exemption, legal experts and opposition politicians said.

Lawyer and Ateneo Policy Center research fellow Michael Henry Ll. Yusingco said House Bill 5456, which will become the Flagship Emergency Act of 2019 if passed, could contain provisions that violate the 1987 Constitution.

“The first problem of the bill is that the emergency powers of the President under the Constitution can only be exercised when there is a national emergency,” he said in an e-mail Thursday.

“What is the national emergency? I think this matter has not been established as a fact yet. So there is still no justification for the exercise of the President’s emergency powers.”

He added that the provision could also be seen as a “diminution” of the powers of the Supreme Court to establish the rules of procedure for the lower courts it supervises, which may also be unconstitutional.

HB 5456, filed by Representative Jose Ma. Clemente S. Salceda of Albay’s second district, proposes to grant the President special powers that allow his infrastructure projects to not be hindered by TROs from most courts.

The bill proposes to empower the President to “urgently utilize necessary government resources, exercise police power, and employ executive actions and measures,” to implement projects.

Mr. Salceda, who is the chamber’s Ways and Means Committee chairman, said in the explanatory note that the completion of key government projects, known as “Build, Build, Build” (BBB) in this administration, will complement economic and social legislation in Congress.

Senate Minority Leader Franklin M. Drilon, who questioned the slow progress of “Build, Build, Build” earlier this week, said the real issue is government agencies’ ineffective spending, and not the need for emergency powers.

“Kung nangangailangan ka ng 2,000 engineers sa DPWH (Department of Public Works and Highways), hindi kailangan ang emergency powers… to make sure that you spend the money allotted on time (If the DPWH needs 2,000 engineers, emergency powers are not needed and will not cause that department to spend the money allotted on time)” he told reporters in a briefing Thursday.

Mr. Drilon called “Build, Build, Build” a “dismal failure” earlier this week, claiming that the government has only started building nine of 75 flagship projects. The government has since revised its list of projects to 100, including those initiated by the private sector.

Section 11 of the bill prevents the courts, except the Supreme Court, from TROs or preliminary injunctions that would restrain project implementation.

The measure designates the chairman of the Bases Conversion Development Authority as the Flagship Program Manager to oversee the management and implementation of the program. The Flagship Program Manager is authorized to engage in direct contracting and direct negotiation of contracts.

The President’s spokesperson Salvador S. Panelo responded positively to the bill, saying that a common hurdle to the timely implementation of key projects is the need to acquire right of way.

“Sa tingin ko maganda yan yung kay (I think that is a good proposal of) Congressman Salceda because one of the reasons why bumabagal ang projects (projects are slow) is because of the right of way. Yung ibang owners kasi ayaw pumayag, yung iba nag-TRO (Some landowners don’t grant it while others file for TROs),” he said in a briefing Thursday.

Mr. Panelo’s statement comes after Albay Second District Representative Joey S. Salceda filed House Bill 5456 on Wednesday, which grants the President “special powers” in order to create policies and reorganize his office to implement the BBB better.

On Wednesday, Presidential Adviser for Flagship Projects Vivencio B. Dizon said that the government is not satisfied with the infrastructure program but clarified that 35 projects are currently under construction, contrary to Mr. Drilon’s count of nine, not including other projects that have been completed.

The program involves government spending on construction equivalent to 5.5% of GDP last year.

The total cost of the infrastructure program is P8.2 trillion. — Gillian M. Cortez and Charmaine A. Tadalan

Senate sees tough going for ‘ambitious’ FIA amendment

THE Senate will discuss a “more ambitious” amendment to the Foreign Investment Act (FIA) after the budget is approved, Economic Affairs committee chair and Senator Ma. Imelda Josefa R. Marcos said.

“I don’t see any easy sailing for the Foreign Investments Act,” Ms. Marcos told reporters in a briefing Thursday.

“It’s inevitably, extremely controversial but there’s no doubt that we need to start with a new investment act.”

The proposed amendment of Republic Act No. 7042, or the FIA of 1991, will make the Philippines less restrictive to foreign investment, and has been named a top priority of the economic development cluster for the first regular session of the 18th Congress, which closes on June 5 next year.

It is also included in the list of bills, supported by 14 local and foreign business groups, which was submitted to the Office of the President and the two chambers of Congress at the session opening.

“I think immediately after the budget, after all the foreign investment act is one of the priority measures of the administration,” she said when asked when the debates will be held.

“It’s already been passed on third reading in the House but they have much simplier version. I believe ours is a little more ambitious.”

The bill among others proposed to create the Investment Promotions Council, to be led by the Trade Secretary, to integrate efforts to attract foreign investment.

It also lowered the minimum employment requirement to 15 from 50 direct local hires for small- and medium-sized domestic enterprises with paid-in capital of at least $100,000. The provision is also present in the House version.

The bill also introduces new penalties ranging from P1 million to 20 million in fines and imprisonment of 6 to 30 years for graft and corrupt practices.

The House of Representatives, in its counterpart House Bill No. 300, excludes the “practice of profession” from the coverage of the Foreign Investment Negative List (FINL). The bill passed on final reading on Sept. 9.

The measure nearly made it out of the 17th Congress after securing third-reading approval in the House in January, but failed to make it out of the Senate before the June 3 adjournment. — Charmaine A. Tadalan

PECO digs in, won’t sell distribution assets to new franchise holder MORE

PANAY ELECTRIC CO., INC. (PECO) is not interested in selling its power distribution assets in Iloilo City to the area’s new utility, a company official said on Thursday, citing unresolved legal issues between the two parties and the need for rules on takeovers.

“We’re not interested in selling our assets to MORE [Electric and Power Corp.],” Marcelo U. Cacho, PECO head of public engagement and government affairs, said in a briefing Thursday at the office of Divina Law, the company’s legal counsel, in Makati City.

He made the statement when asked if there is a chance for PECO and MORE to settle their dispute.

PECO previously held the franchise to distribute power in Iloilo City, which it held for 95 years. MORE now holds the franchise, awarded by Congress early this year.

“What is happening right now between PECO and MORE does not just concern Iloilo City or the people of Iloilo,” he said.

Mr. Cacho said the way the expropriation of the assets was written under MORE’s franchise could affect every power distribution utility in the country “be it Meralco (Manila Electric Co.), be it PECO, be it all the cooperatives.”

“This can impact every cooperative because now it could create an opening for the takeover of every single cooperative by big businessmen that may or may not have the interest of the people in mind. So that’s really one of the biggest issues,” he said.

“There should be a proper mechanism that will be put in place to first study whether a utility should be taken over,” he added. “In the case of PECO versus MORE there was no such assessment made.”

Mr. Cacho also addressed the recent blackouts across Panay Island and the near-simultaneous electric pole fires in the city, which he said were beyond the control of PECO.

“Now, consumers of Iloilo are asking if this is sabotage to mask the reality that the new power distribution franchise holder is not capable of serving Iloilo because they have no distribution infrastructure in place at all,” he said.

He noted that MORE has tried to portray PECO in a bad light following these incidents.

“On the legal front, we have taken legal action against MORE. We have already, in fact, secured a judgment from the Regional Trial Court (RTC) of Mandaluyong declaring unconstitutional the expropriation that MORE is trying to implement against PECO,” lawyer Estrella C. Elamparo of Divina Law said.

“This judgment contains a permanent injunction prohibiting MORE from taking over the assets of PECO. They have now appealed that judgment in our favor to the Supreme Court. And they have in fact asked the Supreme Court for a temporary restraining order (TRO) to restrain the implementation of that permanent injunction and they have failed. The Supreme Court has already denied their prayer for a TRO,” she said.

“So the battle goes on, but so far the latest decision of not just the RTC Mandaluyong and the latest resolution of the Supreme Court have favored us,” she added. — Victor V. Saulon

Lazada reports record number of sellers topping P1M on Nov. 11

E-COMMERCE retailer Lazada Philippines said 1,141 of its sellers reported sales of at least P1 million on Nov. 11, the so-called “Singles’ Day” shopping holiday originating in China.

“By the end of the day, the Lazada Millionaires Club, where sellers past the P1 Million sale mark earn membership, rose to a new total of 1,141 sellers,” Lazada said in a statement Thursday.

In a phone message, Lazada Philippines said: “The Lazada Group set a new record with of over 3 million orders within the first hour across six markets in Southeast Asia — the Philippines, Singapore, Vietnam, Indonesia, Malaysia and Thailand. The Lazada group also hit more than double year-on-year growth in three areas — sellers, buyers and orders.”

Lazada Philippines also said that during the first hour of Singles’ Day 2019, one million Filipinos joined and one million items were immediately sold.

Singles Day, known in Chinese as Guanggun Jie, is meant to celebrate single people and relationships because of the number of times the numeral “1” appears in the Nov. 11 date, or 11/11. It has become the largest single shopping day in the world.

Lazada said Filipino shoppers collected up P170 million worth of vouchers for Singles’ Day.

“Big discounts were used by shoppers across categories, on top of the price mark-offs that reached as high as 95%,” it added.

Top performing brands during the Singles’ Day, according to Lazada, were Xiaomi, RealMe, and Huawei for Mobile; CooCaa, Philips, and TCL under Home Appliance; Pampers, Huggies, MamyPoko under Mother & Baby; Hydro Flask, Klean Kanteen, Mitsushi under General Merchandise; Maybelline, L’Oreal Paris, Olay for Health and Beauty; and American Tourister, Adidas, and FitFlop under Fashion.

Lazada Philippines Chief Executive Officer Raymond N. Alimurung said: “The support of customers to this year’s sale affirm 11/11’s crucial role in driving growth for eCommerce in the country.”

“Lazada is proud to be the pioneer of this Shopping Festival in Southeast Asia and look forward to setting new records with our partner brands and sellers in the upcoming mega campaigns we will have locally,” he added. — Arjay L. Balinbin

PHL to highlight coconut products at German fair

PHILIPPINE food manufacturers will head to Germany’s organic trade fair BioFach to promote their coconut products, the Department of Trade and Industry’s Center for International Trade Expositions and Missions (CITEM) said in a statement Thursday.

The Philippines is the second-largest coconut producer, and is the number one supplier of coconut oil to Germany. More than half of Philippine export revenue from Germany in 2017 was generated by coconut oil.

Nine Philippine companies will exhibit at BioFach, the world’s largest trade fair for organic food and agriculture, on Feb. 12-15. The trade fair welcomed 51,500 visitors and buyers in 2019, with 3,273 exhibitors from 98 countries.

“We are kicking off our 2020 export promotion activities for the food industry with a comeback to the world’s leading platform for organic food in line with DTI’s renewed thrust in elevating the country’s globally competitive food products from the organic, healthy and natural segment,” DTI Undersecretary Abdulgani M. Macatoman said in the statement.

CITEM Executive Director Pauline Suaco-Juan said the Philippines first joined the BioFach trade fair through CITEM in 1996, which resulted in initial orders of coconut oil-based herbal soap. Exhibitors from the Philippines came again in 1999, generating $80,000 in initial orders, mostly for banana chips.

Six of the Philippine companies attending the trade fair next year are coconut producers or manufacturers.

The companies will be showcasing virgin coconut oil (VCO), medium chain triglycerides (MCTs) oil, coconut water, coconut sap, vinegar and vinaigrette, coco syrup, sugar and flour, desiccated coconut, coconut cream and coco crisps. The Philippine pavilion will also featured banana chips, cacao chips and muscovado sugar.

The companies participating are AG Pacific Nutriceuticals Corp., Brandexports Philippines, Inc., Cardinal Agri Products, Inc., CJ Uniworld Corp., Filipinas Organic Coconut Product Corp., Lao Integrated Farms, Inc., See’s International Food Manufacturing Corp., Raw Brown Sugar Milling Co., Inc. and Tongsan Industrial Development Corp.

According to the Philippine Statistics Authority, export sales of coconut oil totaled $706 million in the first nine months of 2019, down 11.7% from a year earlier.

Desiccated coconut exports fell 30.8% to $182 million, while other coconut product exports fell 18.8% to $36 million.

The Philippines in October signed a memorandum of understanding with other members of the Association of Southeast Asian Nations (ASEAN), agreeing to specialize in seaweed and coconut product exports to international markets. — Jenina P. Ibañez

Tech could help workplaces become more elder-friendly

TECHNOLOGY will aid the absorption of more elderly workers into the labor force, a key consideration for regional economies where populations are rapidly aging the Asian Development Bank (ADB) said.

ADB Chief Economist Yasuyuki Sawada said in a statement Wednesday that while the aging populations aren’t reversible, governments can create a “silver dividend” by encouraging technology that complements the skills of older workers.

“Today’s elderly are better-educated and healthier than in the past. The right policies on technology could extend working lives, generating a substantial contribution to the overall economy,” he said.

In ADB’s Asian Economic Integration Report 2019/2020 (AEIR): Demographic Change, Productivity, and the Role of Technology, the average healthy life span has increased in Asia and Pacific between 1990 to 2017 by seven years, from 57.2 years to 63.8. The average years spent in education has also increased for 55 to 64 year olds in the same period, from 4.8 years to 7.8 years.

ADB said that technology policy needs to boost productivity among older workers and has classified countries accordingly by their population age profile. Type-1 countries are defined as fast-aging and above-median education, Type-2 are fast aging and below-median education, Type-3 slow-aging and below-median education, and Type-4 slow-aging and above-median education.

ADB said Type-1 and Type-2 countries “will need to prioritize technology adoption that fosters professional and foundational skills and improves job matching for workers, given the general difficulties faced by older workers in finding jobs.”

Type-3 and Type-4 countries on the other hand “will need to prioritize technologies and policies that take advantage of a young and still-expanding workforce while addressing challenges that impact both older and younger work forces to meet the future demand for skilled labor.”

While most see the aging workforce as an economic impediment to growth due to diminished output, this “can induce rapid adoption of labor-saving technologies.”

In the report, ADB also said that physical ability decreases with age but technology can help the elderly maintain their work performance. Such innovations include physical augmentation technologies that help in mobility.

Other policies that are elderly-friendly include telecommuting or working anywhere outside the workplace. ADB said that this cuts travel time for the aging worker and increases their productivity. — Gillian M. Cortez

DBM says 2019 Budget 96.7% released as of end-Oct.

THE Department of Budget and Management (DBM) said it released 96.7% of the 2019 budget in the first 10 months.

In a statement yesterday, the DBM said it released P3.542 trillion out of the P3.662 trillion 2019 budget.

Of the total, P2.027 trillion worth of allotment releases went to line departments including the Executive branch, Congress, the Judiciary as well as other constitutional offices.

DBM released P337.42 billion in special-purpose funds, which are allocations in the General Appropriations Act (GAA) for specific socio-economic purposes.

This includes budgetary assistance to state firms and allocations for local governments, the contingent fund, the miscellaneous personnel benefits fund, the National Disaster Risk Reduction and Management fund, as well as the pension and gratuity fund.

Automatic appropriations accounted for P1.075 trillion, the bulk of which were internal revenue allotments of local government units (P575.52 billion) and interest payments (P399.57 billion).

“The immediate release of funds by the DBM will ensure that national government agencies are able to swiftly implement their programs and projects, such as the construction of new roads, schools, and hospitals, and the protection and promotion of the welfare of the poor and marginalized sectors, among others,” it said.

The unreleased balances for the rest of the year total P119.34 billion.

Meanwhile, the releases of continuing appropriations from the 2018 budget amounted to P25.54 billion, consisting of support for projects that require obligations of more than one year, such as multi-year construction projects.

At the end of October, P50.518 billion was released for unprogrammed appropriations, which are standby appropriations that provide agencies additional spending when revenue collections exceed targets.

Allotments for other automatic appropriations were also released worth P26.641 billion. — Beatrice M. Laforga

Davao chamber signs deal to promote disaster resilience for small firms

DAVAO CITY — The Davao City Chamber of Commerce and Industry, Inc. (DCCCII) has signed a partnership agreement with the Asia Pacific Alliance for Disaster Management (A-PAD) to develop a continuity program that will help small firms sustain their operations during calamities.

“A business continuity program protects the business and lessens impact of disasters,” DCCCII President Arturo M. Milan said during this week’s Habi at Kape forum.

A-PAD will also help in the implementation phase, targeted for early 2020.

Mr. Milan said while most medium and large businesses have their respective continuity programs, the micro and small establishments need to “change their mindset” in terms of preparing for disasters such as the recent earthquakes that hit parts of Mindanao, including Davao City.

He acknowledged that most small businesses “don’t have that luxury” in terms of human and financial resources to develop continuity plans, but said there are simple measures they can adopt.

“That’s part of how you plan based on location, the people, and the processes that you will do,” he said.

Mr. Milan also urged the government to review the National Building Code to ensure the integrity of infrastructure in light of new information on natural hazards.

The business sector, he added, is also being urged to come up with a list of standards that may be considered in the Building Code reassessment.

Following assessments in the aftermath of the three strong earthquakes last October, the city government condemned two condominium projects, Ecoland 4000 and Palmetto Place. — Carmelito Q. Francisco

All Mindanao utilities to join WESM; Jan. start targeted

DAVAO CITY — All power distribution utilities (DU) in Mindanao, both electric cooperatives and private companies, have applied to participate in the wholesale electricity spot market (WESM), which is targeted to start commercial operations on Jan. 26.

Eric Niño U. Louis, corporate communications manager of the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP), said it is now waiting for the DUs to complete all the requirements, particularly the prudential deposit.

The size of the prudential deposit will depend on consumption for DUs and capacity for generators, along with the projected volume that will be drawn and sold in the market.

There are 28 electric cooperatives and four privately-owned distribution utilities in the southern islands, based on government data.

IEMOP is also awaiting approval from the Energy Regulatory Commission for its pricing cap mechanism, Mr. Louis said during a round table discussion Tuesday.

The seven major generating companies, including the government-run Power Sector Assets and Liabilities Management (PSALM) that operates the Agus and Pulangi hydropowerplants, have completed their applications, he added.

Philippine Electricity Market Corp. (PEMC) Chief Governance Officer Rauf A. Tan, meanwhile, said the system has been undergoing test runs over the last two years and the company is confident that it is ready for commercial operations.

“(The percentage of participation in the trial operations) is a little bit low; nonetheless, that percentage of participation is not a major factor because it is supposed to just test the system if it works,” Mr. Tan said.

The PEMC, the former market operator which now functions as the WESM governance and regulatory body, and IEMOP have been doing road shows in Mindanao, which include practice sessions to help WESM participants familiarize themselves with the wholesale market process.

Robinson P. Descanzo, IEMOP chief operating officer and trading head, said one of the main benefits of the WESM is that DUs that have contracted supply that exceeds their requirements will have a mechanism to resell their surplus.

Mindanao currently has a capacity of about 3,300 megawatts (MW) and an average requirement of about 2,300 MW, leaving an excess supply that will be available at WESM.

The P52-billion Mindanao-Visayas grid connector project is also targeted for completion by 2020, which would give Mindanao suppliers access to the nationwide system. — Carmelito Q. Francisco

Stocks decline further on dovish Powell speech

By Denise A. Valdez, Reporter

THE MAIN INDEX failed to recover on Thursday as investors continued to react to developments outside the country.

The benchmark Philippine Stock Exchange index (PSEi) lost 13.76 points or 0.17% to close at 7,933.71 on Thursday, while the broader all shares index gave up 6.16 points or 0.12% to 4,757.73.

“The local market is still weighed down by offshore worries,” Senior Research Analyst Japhet Louis O. Tantiangco of Philstocks Financial, Inc. said in a text message.

“Primary concern right now is the alleged impasse on the US-China negotiations which could deter the Phase 1 deal. At the same time, you have China’s economic slowdown as seen on its latest investment and industrial output data. The slowdown is feared to spill over to its neighboring countries including the Philippines,” Mr. Tantangco added.

For his part, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the lower close of the PSEi is due to the testimony of US Federal Reserve Chair Jerome Powell and the public hearing on US President Donald Trump’s impeachment case.

On Wednesday, Mr. Powell went against Mr. Trump’s appetite for negative interest rates, saying in a speech in a Congress hearing that the current state of the monetary policy is more appropriate for the US economy now.

Wall Street ended mixed on Thursday. The Dow Jones Industrial Average rose 92.1 points or 0.33% to 27,783.59; the S&P 500 gained 2.2 points or 0.07% to 3,094.04; and the Nasdaq Composite dropped 3.99 points or 0.05% to 8,482.10.

Meanwhile, most Asian markets declined on Thursday. Japan’s Nikkei 225 and Topix indices declined 0.76% and 0.94%, respectively, as Hong Kong’s Hang Seng index shed 0.93% and Singapore’s Straits Times Index gave up 0.23%. Some markets gained, such as China’s Shanghai SE Composite index (0.16%) and South Korea’s KOSPI index (0.79%).

Back home, two sectoral indices advanced on Thursday: property by 12.02 points or 0.29% to 4,138.43 and financials by 1.16 points or 0.06% to 1,908.22.

Meanwhile, industrials lost 180.31 points or 1.75% to end at 10,121.17; holding firms erased 9.33 points or 0.11% to 7,823.42; services went down 0.53 points or 0.03% to 1,547.89; and mining and oil shed 2.02 points or 0.02% to close the session at 8,909.50.

Value turnover declined further to P4.18 billion from P4.63 billion on Wednesday, with 655.29 million issues changing hands.

Stocks that lost outpaced those that gained, 107 against 78, while 55 names were unchanged.

Foreign investors remained bearish on Thursday, although net selling declined to P496.57 million from P720.69 million on Wednesday. — with Reuters

Peso strengthens as BSP keeps interest rates steady

THE PESO strengthened on Thursday as markets expected the central bank to keep rates steady at its policy meeting later in the day.

The local unit finished trading at P50.68 versus the greenback on Thursday, rising by 14 centavos from its P50.82 a dollar close on Wednesday, according to data from the Bankers Association of the Philippines.

The peso opened weaker at P50.93 per dollar. Its weakest point for the day was at P50.95, while its best showing against the dollar was at P50.68.

Dollars traded on Thursday slipped to $1.17 billion from the $1.464 billion recorded on Wednesday.

A trader said the peso’s rebound came on the back of market expectations that the central bank would keep policy rates on hold.

“The peso strengthened from market expectations that the Bangko Sentral ng Pilipinas (BSP) is expected to hold policy rates in today’s Monetary Board meeting,” a trader said in an email on Thursday.

“The peso closed stronger today after the BSP kept its policy rates, resulting in wider interest rate differentials in favor of the peso. Peso still traded among the strongest versus [its performance] in 22 months or since January 16,2018 when it closed at P50.49,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message on Thursday.

The BSP’s Monetary Board, at the close of markets yesterday, said it kept untouched the rates for its overnight reverse repurchase, as well as overnight deposit and lending facilities to four percent, 3.5%, and 4.5%, respectively, citing cooling inflation.

“Latest baseline forecasts of the BSP continue to indicate that inflation is likely to settle within the lower half of the target band (2-4%) for 2019 up to 2021, with the balance of risks to the inflation outlook leaning toward the upside for 2020 and toward the downside for 2021,” BSP Deputy Governor Francisco G. Dakila Jr. said in a briefing Thursday afternoon.

The central bank this year slashed benchmark rates by a total of 75 basis points (bp) through three 25-bp cuts in May, August, and September.

BSP Governor Benjamin E. Diokno had said previous interviews with ANC and Bloomberg that the central bank is “likely done” in pushing for rate cuts this year.

Mr. Diokno has also said that the current monetary policy in place “remains appropriate” as the economy is back on track to a stronger growth path.”

For today, the trader sees exchange rates moving within the P50.65 to P50.85 range, while Mr. Ricafort had a forecast of a P50.55-P50.85 band. — Luz Wendy T. Noble

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