‘BSP to await Fed cuts before lowering rates’ By Cai U. Ordinario @caiordinario
T ROTARIANS AND NSC Gen. Benjamin R. Madrigal Jr. (Ret.), the Deputy Director General and Chief of Staff of the National Security Council, joins Rotary Club of Manila President Rafael “Raffy” Alunan III and Rotarian Carlos G. Serapio during the 34th Rotary Club of Manila Weekly Membership Meeting at Manila Polo Club in Makati City. He was guest of honor and speaker. NONOY LACZA
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HE World Bank expects the Bangko Sentral ng Pilipinas (BSP) to wait for Federal Reserve rate cuts before it decides to lower key policy rates in the country. Gonzalo Varela, World Bank Lead Economist and Program Leader of the Equitable Growth, Finance and Institutions Practice Group for Brunei, Malaysia, the Philippines and Thailand, said this is possible since inflation remains
a major concern for the country. Varela, citing the words of BSP Governor Eli M. Remolona Jr., said the country was not out of the woods yet when it comes to inflation. The BSP earlier said it expects March inflation to again increase. (See: https://businessmirror. com.ph/2024/04/02/bsps-march-outlook-inflation-at-3-4-4-2/). “What has been discussed is that we are not out of the woods, to use the same term, the same terminology that governor of central bank used. So we expect the normalization of monetary policy to
take a little bit, take a little while,” Varela said. One key risk to inf lation is oil. World Bank Group Deputy Chief Economist and Director of the Prospects Group M. Ayhan Kose said oil prices have been rising and the impact could be significant on countries like the Philippines. The country is a net oil importer since it depends on imports to supply its domestic needs for crude. This makes it vulnerable to price volatilities in the international market.
Kose said the World Bank expects oil prices to be “rangebound” at between $80 and $90 per barrel this year. If oil prices, however, continue to increase, it would lead to higher inflation and, consequently, slower economic growth. One factor that could drive oil prices this year are “intensified geopolitical tensions.” These tensions could lead to 0.2 percentage point cuts in global GDP growth and “complicate the jobs of central banks.”
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DBCC CUTS GDP GROWTH TARGET IN ’24 TO 6.0-7.0% T By Reine Juvierre Alberto @reine_alberto
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HE Cabinetlevel Development Budget and Coordination Committee (DBCC) cut its gross domestic product (GDP) growth target for the Philippine economy this year to 6.0 to 7.0 percent from its 6.5 to 7.5 percent outlook.
Temporary tents provide shelter for visitors enjoying the scenic bay of Cavite City as the country braces for continued scorching temperatures brought on by the El Niño phenomenon. In response, some schools are transitioning to online learning to mitigate the effects of the sweltering summer heat. NONIE REYES
DBCC member and Socioeconomic Planning Secretary Arsenio Balisacan announced in a Malacañang press briefing on Thursday that the downward revision in growth targets for 2024 takes account of last year’s fiscal performance and the recent developments in the global economy, particularly in trade and finance. See “DBCC,” A
‘AMID LOWER GROWTH GOALS, UMIC STATUS STILL POSSIBLE’ By Cai U. Ordinario @caiordinario
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HE government’s aim of reducing poverty to single digit levels by the time the President steps down from office and becoming an Upper Middle Income Country (UMIC) next year remain achievable despite lower growth targets. In a briefing on Thursday, Socioeconomic Planning Secretary Arsenio M. Balisacan said while the growth target of the government was reduced to 6 to
7 percent this year, it will still contribute to poverty reduction and the increase in incomes. In 2025, the government said the government aims to post a growth of 6.5 to 7.5 percent and in the period of 2026 to 2028, post even faster growth of 6.5 to 8 percent. “(The) 6.5 percent or 6 to 7 percent is still quite a high growth. We still fall within the realm of possibility for our entry to the upper middle income class. The threshold of almost See “Amid,” A
VAT collection efficiency below global, regional averages in PHL, 3 others
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AT collection efficiency is “substantially below” regional and global averages in Armenia, the Philippines, Sri Lanka and Türkiye, indicating that there is space for higher VAT revenue collections, according to the United Nations Economic and Social Commission for Asia and the Pacific (Unescap). “On average, the developing Asia-Pacific region outperforms other developing regions in the world and OECD countries in the collection efficiency of value added
tax [VAT],” the Economic and Social Survey of Asia and the Pacific 2024 noted. Nonetheless, the study noted that “VAT collection efficiency is substantially below regional and global averages in Armenia, the Philippines, Sri Lanka and Türkiye, indicating that there is space for more VAT revenue collection.” To further increase VAT revenue collection, the study said, citing a 2021 study by Acosta-Ormaechea See “VAT,” A
PESO EXCHANGE RATES Q US 56.3940 Q JAPAN 0.3719 Q UK 71.3553 Q HK 7.2035 Q CHINA 7.7978 Q SINGAPORE 41.8384 Q AUSTRALIA 37.0057 Q EU 61.1085 Q KOREA 0.0420 Q SAUDI ARABIA 15.0364 Source: BSP (April 4, 2024)