S&P: High oil prices may delay BSP rate cuts
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IGH oil prices may prompt the Bangko Sentral ng Pilipinas (BSP) to further delay any rate cuts, according to Standard & Poors (S&P) Global Ratings. In its latest brief, S&P Global Ratings said the recent spike in oil prices may disrupt any slowdown in the increase in commodity prices, particularly in emerging markets like the Philippines. High oil prices will have a significant impact on emerging markets that are major energy importers which include the Philippines, Chile, Hungary, Poland, Turkiye, Thailand, and India.
“The recent rise in oil prices, if it persists, threatens to disrupt disinflation across most EMs. This could slow, or delay, central banks’ interest-rate reduction, as they were expected to ease policy in the coming quarters,” S&P Global Ratings said. Apart from interest rates, the increase in commodity prices could also negatively impact economic growth this year. S&P Global Ratings expects the country’s GDP to average 5.9 percent. This is lower than the 6 to 7 percent growth target for the year. However, growth is expected to recover in 2025 to 2027 when
GDP growth could average 6.2 percent, 6.5 percent, and 6.4 percent, respectively. “Vietnam has seen the strongest rebound in the region with robust tourism activity. The Philippines, Indonesia, and India are yet to see a full travel recovery,” S&P Global Ratings said. Earlier, the BSP said it remains undaunted by the recent depreciation of the peso as well as the rise in oil prices due to geopolitical tensions in the Middle East. In a briefing, BSP Governor Eli M. Remolona Jr. told reporters the depreciation of the peso is an “adjustment” that would only
have a small impact on monetary policy. As to the impact of higher oil, Remolona said there is no sense of escalation with regard to the tensions in the Middle East and that “retaliation will not be massive.” The rise in oil prices has led some analysts to believe that it may prompt the US Federal Reserve to tighten monetary policy further instead of easing it. However, Remolona said this only supported his expectations that the Fed will not ease monetary policy as early as the market anticipates.
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Tuesday, April 23, 2024 Vol. 19 No. 189
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By Cai U. Ordinario @caiordinario
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HE government is preparing new measures to combat the steep rise in commodity prices, according to the National Economic and Development Authority (Neda).
The President has issued Administrative Order (AO) No. 20, which instructed the Department of Agriculture (DA) to take the lead in streamlining administrative procedures and policies on the importation of agriculturalproducts,andremovenon-tariff barriers. (See: https://businessmirror.com.ph/2024/04/22/ marcos-wants-non-tariff-curbson-farm-products-out/). Local producers, however, are wary of the order, saying it will gravely hurt even more their ranks. Story on A14 “AO 20 could favor undervalued, misdeclared agri goods—Sinag” On the sidelines of the Filipinnovation forum on Monday, Neda Undersecretary for Planning and Policy Rosemarie G. Edillon told reporters these measures include fast-tracking the release of Sanitary & Phytosanitary Import Clearances (SPSIC). “If there’s really a pressing issue, to disapprove it, do it right away. If none, then once it’s not acted upon for a certain period, and it seems there’s no problem, then, it should be deemed approved,” Edillon told reporters. See “NEDA,” A2
PARCHED PARKING On Monday, April 22, 2024, at 1:28 pm, chaos erupted at Naia Terminal 3’s parking extension area as fire engulfed multiple vehicles. The Manila International Airport Authority (Miaa) responded swiftly, extinguishing the flames by 1:57 pm. Unfortunately, 18 cars were completely charred, while one narrowly escaped with partial damage. The Avsecom secured the scene for investigations into the fire’s cause—initially pinned on a grass fire—and the extent of damage. Story on A2. ROY DOMINGO
EXTENDING RCEF, USING IT FOR NON-RICE SECTORS, POSSIBLE
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HE National Economic and Development Authority (Neda) is open to extending the Rice Competitiveness Enhancement Fund (RCEF) and using it for other sectors apart from rice. According to Socioeconomic Planning Secretary Arsenio M. Balisacan, using the RCEF for other sectors may lead to higher productivity in other agriculture sectors and will also bode well for the country. Balisacan said there are arguments to support and do not support the extension of the RCEF,
but all these should be carefully studied. “Using it for agriculture, but ensuring this time that it’s really used for highly productive uses, especially those that will address low productivity issues in the rice sector. I think that will be a good move,” Balisacan said. Neda Undersecretary Rosemarie G. Edillon also said proposals to extend the RCEF are welcome, but should be made pending an evaluation of the previous program. See “RCEF,” A2
BIR targets ₧120-B VAT in April; no extension seen By Reine Juvierre S. Alberto
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S the state aims to collect more than P120 billion in value-added tax (VAT) this April, the main tax collecting agency’s top official remained firm in the deadline for the filing and payment of the VAT. Internal Revenue Commissioner Romeo D. Lumagui Jr. told the BusinessMirror, “[There will be] no extension on the [deadline],” on April 25. VAT is a sales tax on consumption imposed on the sale, barter, exchange, or lease of goods and services in the Philippines and on the importation of goods into the country.
VAT is an indirect tax, which may be shifted or passed on to the buyer, transferee, or lessee of goods, properties, or services, according to the BIR. Those required to file for VAT returns include any person or business entity registered for VAT purposes with annual gross sales or receipts exceeding P3 million. A person who is required to register as a VAT taxpayer but failed to register or any person, whether or not made in the course of his trade or business, who imports goods, is also required to file for VAT returns with the BIR. See “BIR,” A2
PESO EXCHANGE RATES n US 57.5380 n JAPAN 0.3724 n UK 71.1918 n HK 7.3459 n CHINA 7.9484 n SINGAPORE 42.2763 n AUSTRALIA 36.9221 n EU 61.3298 n KOREA 0.0419 n SAUDI ARABIA 15.3394 Source: BSP (April 22, 2024)