GRAYISH-WHITE volcanic ash were observed spewing out of Mayon Volcano on Thursday morning, Dec. 27, generated by two phreatic eruptions, according to the Philippine Institute of Volcanology and Seismology (Phivolcs). In its 10 a.m. update, Phivolcs said the eruptions were observed at 8:17 a.m. and 8:28 a.m. “Prior to these events, Mayon Volcano’s seismic monitoring network recorded one (1) volcanic earthquake during the 24-hour observation period. Fair crater glow from the summit could be observed at night,” the agency said. Despite the volcanic events, Phivolcs said the prevailing alert level 2 will be maintained, which means “that Mayon is at a moderate level of unrest.” Under a level 2 warning, “sudden explosions, lava collapses, pyroclastic density currents or PDCs and ashfall can still occur and threaten areas in the upper to middle slopes of Mayon.” Entry into the Permanent Danger Zone (PDZ) and precautionary seven-kilometer-radius Extended Danger Zone is strictly prohibited. “Active stream/river channels and those identified as perennially lahar-prone areas on all sectors of the volcano should also be avoided especially during extreme weather conditions when there is heavy and prolonged rainfall,” Phivolcs said in its advisory.
PRESIDENT Rodrigo R. Duterte has raised the reward money to P50 million for information on the killers of AKO Bicol Rep. Rodel M. Batocabe. “The reward is at this time P30 million. I’m raising the ante. I’m putting it at plus P20 to P50” Mr Duterte was quoted as saying on Wednesday during a chance interview after his visit to the wake of Mr. Batocabe in Albay. In a statement on Thursday, Presidential Spokesperson Salvador S. Panelo said the President has also recommended to the Commission on Elections (Comelec) to place the town of Daraga in Albay under the agency’s control. “The President vowed that he will not allow political terrorism, oppression, and intimidation… The President also reiterated the Alunan doctrine that no candidate should move around with bodyguards with long firearms, unless a permit is granted by the Comelec,” Mr. Panelo said. The Comelec, meanwhile, is set to review the President’s recommendation, which is the same as the one made by local election officials. In a press briefing on Thursday, Comelec Spokesperson James B. Jimenez said local Comelec officials fear that the recent killing of Mr. Batocabe and two other still unidentified victims in Daraga would intensify political rivalries. “Under the law, if the municipality is riddled with intense political rivalry, this can be placed under Comelec law,” Mr. Jimemez said. He added that the Philippine National Police has already expressed support for this proposal. In an area under Comelec control, “the Commission exercises full control and supervision over all national and local law enforcement agencies,” including the military. — Camille A. AguinaldoandGillian M. Cortez
PHILIPPINE NATIONAL Police (PNP) Director General Oscar D. Albayalde has ordered the cancellation of the license to own and permit to carry firearms of Guimbal Mayor Oscar G. Garin, Sr. and his son, Iloilo 1st District Rep. Oscar Richard S. Garin Jr., after they mauled a town cop.
“I have ordered the cancellation of all Permits to Carry Firearms outside of Residence (PTCFOR) and License to Own and Possess Firearms (LTOPF) issued by the PNP in favor of Iloilo 1st District Rep. Richard Garin and incumbent Mayor Oscar Garin of Guimbal, Iloilo as an administrative action to their involvement in a criminal case involving the use of firearms,” Mr. Albayalde said in a statement on Thursday, Dec. 27.
“Our firearms information database indicate that Rep. Richard Garin is the registered owner of eleven (11) firearms, three (3) of which have expired licenses, while Mayor Oscar Garin is the registered owner of eight (8) firearms, five (5) of which also have expired licenses. All these firearms are now subject to confiscation upon revocation of their License to Own and Possess Firearms, effectively making them ineligible to own and possess guns,” he said.
Meanwhile, the Department of the Interior and Local Government (DILG) is removing the authority of the Guimbal mayor over the local police.
DILG Secretary Eduardo M. Año, in a statement on Thursday, said the mauling incident “is a clear ground for the withdrawal of Mayor Garin’s authority over the local Philippine National Police (PNP) unit.”
“What the congressman and the mayor did was abuse of authority and display of arrogance; a conduct unbecoming of men in authority and well-deserving of punishment. I… will order the removal of Mayor Garin’s deputation authority over the Guimbal police once the investigation results are out,” Mr. Año said,
He added that criminal and administrative charges will also be filed after the probe is concluded.
President Rodrigo R. Duterte said late Wednesday that he is “ordering him (Mr. Año) to file a case against the two.”
The father and son politicians reportedly held Police Officer 3 Frederico Macaya Jr. at gunpoint and in handcuffs at the Guimbal Public Plaza, where the younger Garin “mauled, spat at and slapped” the cop, according to the DILG.
Mr. Macaya Jr. has already filed criminal charges for physical jnjuries, assault upon a person in authority, alarm and scandal, grave coercion and grave threats.
Mr. Albayalde said the PNP Legal Service will be assisting Mr. Macaya.
“I cannot in conscience let this abuse and oppression pass without justice. I am directing the PNP Legal Service to provide legal assistance to PO3 Macaya in his complaint and possible counter charges by the respondents,” the PNP chief said.
Meanwhile, Western Visayas Police Regional Director Chief Superintendent John C. Bulalacao has also requested the National Police Commission (Napolcom) to remove the mayor’s authority over the local PNP.
Mr. Albayalde also said that he is “endorsing to the Napolcom en banc, the recommendation of” Mr. Bulalacao.
Rep. Garin has issued an apology over the incident. — Vince Angelo C. Ferreras
THE DAVAO Police Regional Office (PRO-11) is now investigating how armaments with government markings ended up in the hands of New People’s Army (NPA) members who recently surrendered in Davao City. A family of three turned themselves in to the PRO-11 last week, bringing with them government-marked arms and ammunition. The family, composed of a couple and their son, was reportedly operating in the hinterlands of the city and were members of the Pulang Bagani Command, which used to be headed by Leoncio Pitao, also known as Kumander Parago. “We will trace (how the armaments reached the rebels),” Chief Supt. Marcelo C. Morales, PRO-11 director, said. Mr. Morales said the military will also conduct a separate investigation. — Carmelito Q. Francisco
A PASIG City court on Thursday convicted a brother of an Abu Sayyaf chieftain for kidnapping, including students and teachers, in Sumisip, Basilan on March 20, 2000. The Pasig City Regional Trial Court Branch 261 found Hector Janjalani, brother of Abu Sayyaf leader Khadaffi Janjalani, guilty of 18 counts of kidnapping and serious illegal detention and is sentenced to reclusion perpetua or 20-40 years of imprisonment without parole. Abu Sayyaf member Daud Baru, meanwhile, was convicted of 52 counts of the same charges. They were also both ordered to pay P180,000 for damages. Abdulazan Diamla, meanwhile, was acquitted of the charges. The three were among the 66 Abu Sayyaf members convicted by Pasig court last Dec. 14 over the 2000 Basilan kidnapping incident. Twenty others were acquitted from the case. — Vann Marlo M. Villegas
Home-sharing has become an automatic option for most travelers when it comes to finding accommodations. With access to a wide and varied catalogue of residences, customers can customize the accommodation to their needs, whether it’s a two-day staycation or month-long family trip.
But home-sharing services offer more than lodging for tourists. In their newly-launched book “At Home Around the World: The Short-Term Rentals Handbook for Guests, Hosts, Neighbors and Governments”, Robert Rosenstein and Peter Allen explore how the industry has positively impacted economies on both the micro- and macro-levels.
Boosting incomes and economies
One of home-sharing’s most immediate effects is how it’s opened financial opportunities for locals. By renting out their private properties, hosts are able to generate income on an asset that otherwise would have been monetarily stagnant. And since more accommodations are emerging due to this incentive, tourism also begins to boom.
“Local host rentals augment supply during peak events, helping municipalities not only manage tourism surges, but also by channeling more resources to the local economy,” said Allen, managing director of Agoda Outside. “And we also have reports showing guests stay anywhere from 25 to 50 percent longer in a home-share as compared to hotels, which of course has incremental benefits to the local economy.”
Aside from the hosts, cleaning and security services as well as payment and marketing platforms have also flourished with this industry.
Globally, these benefits are already being felt. According to a 2017 Skift report, home-sharing is expected to hit $169 billion in total global revenue by the end of the year.
What’s to come
Of course, the industry was met its fair share of challenges. According to Rosenstein, founder and chairman of Agoda Company Pte. Ltd., governments are still struggling with how to integrate home-sharing in legislation, which includes licensing and registration requirements and taxation.
On a local scale, government officials in Davao have been calling for tighter legislation on home-sharing operations within the city.
But with an annual growth rate of 30 percent, and an estimated $2 billion in local global tax revenue for the next 10 years, it seems that home-sharing will be catering to the global traveler’s lifestyle for decades to come.
By Elijah Joseph C. Tubayan, Reporter
ECONOMIC MANAGERS will discuss in a meeting next month of the Development Budget Coordination Committee (DBCC) ways to mitigate the economic impact of a partially reenacted budget and the public works ban ahead of the May 13, 2019 midterm elections, the chairman of the interagency body said on Wednesday.
His statement coincided with a Department of Budget and Management (DBM) report showing government agencies’ budget use in proportion to total allocations slipped in the 11 months to November from the same period last year, even as amount was more than a year ago.
“DBCC will address that before end January, when we would have a better handle of the situation — how early or late the 2019 budget will be approved, the size of the infra[structure] budget that will be affected by election ban, which I think will take effect in the last week of March,” Budget Secretary Benjamin E. Diokno said in a mobile phone message.
“Will use the first month of the year to assess where we are and how to move forward, with the least damage to the economy in mind.”
The DBCC is mandated to set and review macroeconomic assumptions for state budgeting purposes; as well as revenue projections, borrowing level, aggregate budget amount and expenditure priorities; and recommend the fiscal program to the Cabinet and the President.
The body consists of the DBM, the Department of Finance, the National Economic and Development Authority, the Office of the President and the Bangko Sentral ng Pilipinas as a resource institution.
Congress went on a month-long break on Dec. 15 without passing the P3.757-trillion 2019 national budget and Malacañang said it won’t ask Congress to hold a special session as the Senate said it will not be able to finish deliberations on the proposed fiscal plan regardless.
Failing to enact a new budget would mean that the current spending plan will be reenacted, meaning no new project can begin.
Lawmakers return to work on Jan. 14.
The Senate’s budget timetable shows the chamber aims approval on third and final reading on Jan. 16, ratification by both chambers on Jan. 29 and submission to Malacañang for signing into law by President Rodrigo R. Duterte on Feb. 7.
The economic managers had warned that a reenacted budget for the whole year may cut economic growth by 1.1-2.3 percentage points, although Mr. Diokno said that he expects the government to operate on a new budget some time in February.
Delays in processing the proposed 2019 national budget began at the House of Representatives, halting committee-level deliberations for two weeks due to confusion over the shift to an allocation system based on the limited spending capacities of departments and agencies. Hence, this year’s budget is slightly bigger at P3.767 trillion.
The House approved the spending plan on final reading on Nov. 20.
The Senate argued that this left it will little time to examine the budget version that left the House.
At the same time, Batas Pambansa Bilang 881 or the Omnibus Election Code prohibits the government from releasing funds for public works 45 days before a regular election — which next year falls on May 13 — except for projects that have been awarded prior to that period. It also prohibits public works construction within 45 days before elections.
The Senate plans a joint resolution with the House that will provide for selective exemption from that public works ban in hopes of mitigating the economic impact of budget reenactment.
The DBCC targets a 7-8% economic growth rate for 2019-2022, which, if realized, is faster than the actual 6.7% in 2017 and 6.3% in the first three quarters of the year. BUDGET USE
Also on Wednesday, the DBM reported that overall utilization rate of the DBM’s Notice of Cash Allocations (NCAs) stood at 88% as of November, lower than the 90.7% recorded in the same period last year even as it was more higher than the 81% logged in the 10 months to October.
The NCA is a quarterly disbursement authority issued by the DBM to government offices, allowing them to secure checks from the Bureau of the Treasury to pay for contracted projects. Once encashed, funds are deemed disbursed.
State departments and agencies utilized a total of P2.6 trillion in the 11 months to November of the P2.94 trillion released to them by the DBM, which was up 26.86% year on year. This leaves P339.54 billion in total unused funds, 61.69% higher year on year.
“It’s more than the frontloading we are seeing this year,” Budget Undersecretary Laura B. Pascua said in a mobile phone message when asked for an explanation.
“For some reason, contractors are speeding up the implementation of prior obligations which is consistent with the ACBA (Annual Cash-Based Appropriations). We want to wind down prior-year obligations which have yet to be implemented.”
The Department of Public Works and Highway (DPWH) had the highest NCA utilization ratio at 95% of the P535.73 billion released to it, marking the biggest sum of NCAs released by the DBM as of November.
National government agencies that received some of the biggest releases include the Department of Education, which used 88% of the P479.30 billion funds released to it; the Department of Interior and Local Government, which used 88% of its P240.33-billion allocation; the Department of National Defense, which used 90% of P224.47 billion; the Department of Social Welfare and Development, which used 84% of P135.32 billion; and the Department of Transportation, which used 69% of the P49 billion it got.
The National Economic and Development Authority logged the lowest utilization rate at 52%, followed by the Commission on Elections’s 61%.
THE PHILIPPINES can be expected to close in on the top 10% of the world’s major economies in the next 15 years, partly as improved infrastructure spurs overall economic growth, according to a London-based consultancy. Read the full story.
Elevated inflation, however, remains a risk to growth.
THE PHILIPPINES can be expected to close in on the top 10% of the world’s major economies in the next 15 years, partly as improved infrastructure spurs overall economic growth, according to a London-based consultancy.
According to the annual World Economic League Table (WELT) report produced by Centre for Economics and Business Research (CEBR), the Philippines is expected to be the 22nd among 193 major economies by 2033, from 40th this year.
Compared to select peers in Asia, the Philippines will fall below Indonesia’s 12th rank and Thailand’s 21st position in 2033, from those neighbors’ respective 16th and 25th ranks currently.
The Philippines will fare better than Vietnam, which will move up to 30th place by 2033 from 47th spot this year.
“High levels of infrastructure spending together with strong levels of domestic demand from the Philippines’ large and fast-growing population are set to sustain annual growth of around 6.6% per year over the next two years. In the longer term, improvements to infrastructure have the potential to unlock major productivity gains, fuelling annual growth of close to seven percent,” the report said, as it sees the Philippines placing 39th next year, 28th in 2023 and 25th in 2028 before reaching 22nd in 2033.
“It is less reliant on exports than many other countries at a similar level of development,” the consultancy noted in its report.
“This, together with consistently strong levels of domestic demand, has enabled it to sustain positive growth in every year since the turn of the millennium, despite many external shocks such as the 2008 global financial crisis.” DRIVERS AND RISKS
CEBR expects the Philippines to grow 6.5% in 2018, which would be slower than the 6.7% recorded in 2017, but will sit within the government’s target of 6.5-6.9% for this year.
The consultancy cited the government’s infrastructure drive among the main growth drivers, as well as inflows of foreign direct investments, but flagged a tightening external monetary policy environment and continued elevated inflation as risks.
“The Philippines has long lagged behind competing countries in delivering the infrastructure needed to attract foreign investment and a diverse manufacturing sector. President (Rodrigo R.) Duterte’s ‘Build Build Build’ policy recognizes this issue, and the government plans to raise spending on transport infrastructure from five percent of GDP currently to seven percent of GDP by 2022,” the report read.
“While tax reforms have been implemented to finance this investment drive, much of the funding will also come from overseas,” it added.
“The government has actively promoted this by easing limits on inward investment. With global interest rates on the rise, turning overseas for funding does represent a risk.”
Compared to many others on the list, “the Philippines is better placed than most to manage this risk, with high levels of foreign exchange reserves and only a small current account deficit, which is contained by the regular flows of remittances from overseas Filipino workers,” the report read.
And while “[i]nflation is felt particularly acutely by poorer households, and this represents a risk to growth in the coming years… the government has taken positive steps to tackle this issue by easing limits on food imports and lifting non-tariff barriers,” it added, noting that the central bank has raised rates by a total of 175 basis points this year “in order to stop the economy from overheating.”
The top four spots this year and in 2019 will be occupied, in descending order, by the United States, China, Japan and Germany. The United Kingdom, fifth this year, will slide to seventh place, while France will retain sixth rank. India, seventh this year, will unseat UK to grab fifth in 2019, while Italy, Brazil and Canada will retain eighth, ninth and 10th places, respectively. — Elijah Joseph C. Tubayan
THE PHILIPPINES will likely see a narrower external trade gap in 2019, a global bank said, citing help from falling oil prices in the world market.
Analysts at ANZ Research said the country’s current account deficit could see a slight narrowing next year, coming from a wide gap posted in 2018.
“We also forecast an improvement in the current account positions in India, Indonesia and the Philippines in 2019,” ANZ Research said in its Q1 2019 Outlook report.
Every $10 per barrel change in world crude prices will adjust the current account by an equivalent of 0.50% of gross domestic product (GDP), given that the Philippines is a net oil importer.
The impact is smaller for India and Indonesia at 0.25% and 0.11% of GDP, respectively.
“Thus, the recent fall in crude oil prices has been unambiguously positive for all three economies,” the bank economists said.
However, aggressive Philippine government spending may partly offset the impact of lower crude costs.
“The correction in the Philippines should be more moderate, hampered by a persistent expansionary fiscal policy,” ANZ Research said.
The current account, which measures fund flows from goods and services trading, posted a $6.47-billion deficit in the nine months to September. The Bangko Sentral ng Pilipinas (BSP) expects this level to hold till yearend at $6.4 billion, equivalent to 1.9% of GDP, amid a steady rise of the import bill.
Contrary to ANZ Research expectations, the central bank projects the trade gap to bloat to an $8.4-billion deficit next year — equivalent to 2.3% of GDP which will be the biggest proportion in 17 years — as the country brings in even more raw material and capital goods.
Still, BSP Assistant Governor Francisco G. Dakila, Jr. said that the trade shortfall remains sustainable, with oil price “normalization” helping to temper the increase in import payments.
ANZ Research said the current account gap will sustain the weakness of the peso, which has depreciated versus the dollar for much of 2018. “The Philippine peso will stay under pressure from the deteriorating current account deficit, as the government’s infrastructure building program lifts imports,” the report read.
Philippine GDP growth is expected to decelerate to 6.1% next year from 6.3% this 2018, shy of the government’s 7-8% target.
Meanwhile, inflation is seen returning to the BSP’s target range to average 3.8% in 2019, following a 5.2% estimate this year against an actual 5.2% in the 11 months to November. — Melissa Luz T. Lopez
SINGAPORE — Last year, economists predicted Southeast Asia would be blessed with a strong and vibrant 2018.
For next year, they’re not quite so optimistic.
Moderating economic growth and higher interest rates lie ahead.
The Federal Reserve is set to keep everyone on edge as it navigates an even trickier interest-rate path in 2019, while the trade war between the United States and China is already hurting exports in the region.
The Philippines might eke out a small gain in growth in 2019, if its bets that inflation will diminish come to fruition.
“ASEAN growth and inflation look set to soften in 2019,” said Tamara Henderson at Bloomberg Economics.
“Even so, a desire to attract investment inflows may require that the region’s central banks maintain a bias toward tightening — at least until a pause by the Federal Reserve comes into view or China’s stimulus starts to bear fruit.”
To top it off, elections in Thailand, Indonesia and the Philippines could rock the boat even more.
Here are the big economic themes for the region in 2019: GLOBAL WEAKENING
We’d like to see the good times roll, but most economists are seeing a further slowing of global growth in 2019, just as this year couldn’t beat the previous one.
While economies like the Philippines and Vietnam remain outperformers, the slowdown probably will take its toll in Southeast Asia.
Especially due to China’s tight relationship with the region, demand that’s taken quite a hit in the world’s no. 2 economy amid tariffs and structural changes will negatively affect the neighborhood. TRADE SLOWDOWN
The domino effect of trade pain remains a high risk amid both the delayed impact of third-quarter tit-for-tat duties and the uncertain outlook of a fragile truce forged between the US and China this month.
“Asia is going to face quite a few challenges” in early 2019, Rob Subbaraman, head of emerging markets economics and Asia ex-Japan fixed income research at Nomura Holdings, Inc., told reporters on Dec. 13.
Especially for global trade, things will get worse before they get better, with the technology cycle finding a bottom in the first half of the year, Nomura analysts project.
Merchandise trade accounts for more than 200% of Singapore’s economy, and more than 100% of those of Vietnam, Malaysia, and Thailand. ELECTION UNCERTAINTIES
Thailand is set finally to hold a vote Feb. 24 after more than four years of military rule, and analysts are fretting over the potential of social unrest that could hurt tourism and investor sentiment.
Indonesia’s turn is in April — a rematch between President Joko Widodo and his rival Prabowo Subianto.
The Philippines is set to hold midterm elections in May. FOLLOWING FED MOVES
Central banks will struggle with the US Federal Reserve’s evolving interest-rate path and act accordingly to protect their currencies and keep current accounts in check.
While Nomura analysts see a brighter second-half than the first, Selena Ling, an economist at Oversea-Chinese Banking Corp. in Singapore, conversely sees challenges mounting as the year goes on. A big part of her regressive-outlook view is a rocky Fed transition amid further balance-sheet trimming and the potential for the central bank to move beyond neutral rates. INFLATION SURPRISE?
Economists are seeing a quiet rise in inflation for much of Southeast Asia next year.
Just the Philippines will be spared, according to Bloomberg surveys. Central bankers in the Philippines just slashed their inflation forecasts, seeing a continued calm for oil prices and relief from legislation that eases rice import restrictions.
Could the diminished expectations expose some analysts to a shock in price growth that leaves some central bankers behind?
It’s a risk worth watching, especially as the relatively low interest rates in much of the region have left the Philippines with a negative real rate, and Thailand’s close to zero. — Bloomberg
