‘Stimulus urgently needed to create more jobs’
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IVEN the latest labor data and recent economic developments, local economists on Wednesday said they are not confident that job prospects in the Philippines will improve in the coming months. On Wednesday, the PSA data showed there were 2.2 million Filipinos who were unemployed and 6.2 million who were considered underemployed in December. (Full story here: https://businessmirror.com.ph/2023/02/08/2-2-million-unemployed-6-2-million-underemployed-labor-force-survey/) In an email, former Labor Undersecretary Rene Ofreneo
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told the BusinessMirror that foreign direct investments (FDI) could generate jobs but the recent pledges received from the President’s foreign trips may not be forthcoming. “After the Christmas season and revenge spending last year by the repressed Covid consumers, there might indeed be a slowdown, lalo na’t walang bagong stimulus tulad ng elections. Agriculture continues to shrink,” Ofreneo said. He said the Marcos administration must implement some “bold investment mobilization measures,” such as asking top
businesses to help raise government revenues. This, he said, could be done through at least one-off taxation as recommended by the International Monetary Fund (IMF) and asking them to invest on job-generating projects in industry and agriculture. “Wala pa naman tayong nakikitang concrete expression ng mga FDI pledges sa mga byahe ng Pangulo. Wala ring prospect for job creation this year under the Maharlika [Investment Fund],” Ofreneo added. Ateneo de Manila University’s Leonardo A. Lanzona Jr. said, how-
ever, that jobs in the services sector and in Metro Manila could become available for Filipino workers. Lanzona cautioned that job generation in other sectors and regions could remain weak. This would also be affected by poor conditions due to the overall changes in technology. “Government needs to focus on upskilling and improving the quality of education. Agriculture and industry should also be supported since this is where the relatively unskillled workers may still be employed,” he said. See “Stimulus,” A2
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PHL DOLLAR RESERVES HIT $99.72B IN JANUARY T n
By Cai U. Ordinario @caiordinario
HE country’s international reserves contracted 7.4 percent year-on-year in January, according to data from the Bangko Sentral ng Pilipinas (BSP).
BSP data showed that the country’s Gross International Reserves (GIR) declined to $99.72 billion in January 2023 from $107.69 billion in January 2022. Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort said this decline may have been caused by the weak peso. “The year-on-year decline in the GIR somewhat correlated with the relatively weaker peso in earlier months of 2022,” Ricafort said in RCBC’s Hexagon Perspective. In the coming months, Ricafort said the GIR could be driven by Overseas Filipino worker (OFW) remittances, revenues from the business process outsourcing (BPO) sector, higher exports, and foreign tourism revenues. Other factors include foreign direct investment (FDI) inflows, hot money inflows, proceeds from the proposed US dollar-bond issuances, and foreign borrowings by the national government in the first semester of 2023. However, Ricafort said these drivers may be offset by the government’s plans to reduce foreign borrowings relative to domestic borrowings in the coming months and years to better manage the country’s foreign borrowings. “[GIR growth may be] offset by the still relatively wider trade deficit/net imports compared to recent years and some net foreign debt payments, going forward,” he said. The BSP said the GIR in January is higher compared to the end-December 2022 level of $96.1 billion. The BSP said the January 2023 GIR level is 6 times the country’s short-term external debt based on original maturity and 4 times based on residual maturity.
BSP wary of ‘surprise price shocks’
T
‘BARGAIN CAPITAL OF MANILA’ People from all walks of life flock to Divisoria, dubbed the bargain capital of Manila. The latest data from the Philippine Statistics Authority (PSA) indicated that over 8 million Filipinos were jobless or looking for better employment conditions in December 2022. PHOTO BY NONIE REYES
MARCOS SEEKS STRONGER ECONOMIC TIES WITH JAPAN By Samuel P. Medenilla sam_medenilla
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RESIDENT Ferdinand R. Marcos Jr. said he will forge more partnerships with other Asian nations to boost the Philippines’s international competitiveness. Marcos also said his trip to Japan is part of a “larger foreign policy agenda” of his administration to strengthen security and economic bilateral relations with its Asian neighbors.
See “PHL,” A2
PESO EXCHANGE RATES n US 54.8480
“We will seek to further strengthen the bonds and friendship with the close neighbors, [which are] like-minded and future-oriented like us in many way and the more reliable partners of both in times of crisis and of prosperity,” the President said in his speech before his departure to Tokyo at the Villamor Airbase in Pasay City last Wednesday. Since assuming the presidency last July, Marcos has already visited Indonesia, Singapore, Cambodia, Thai-
land, and China which are all in Asia.
Bilateral deals DURING his visit to Japan from February 8 to 12, Marcos will be meeting with Japanese Prime Minister Kishida Fumio for the signing of bilateral agreements on humanitarian assistance and disaster relief, infrastructure, and digital cooperation. “Many of these MOUs [memorandum of understanding] and MOAs [memorandum of agreements], and other documents we
will be witnessing are in fact the product of our meetings in New York and also in APEC [Asia-Pacific Economic Cooperation],” he said. The President said he will also be pursuing agreements on agriculture, renewable energy, digital transformation, infrastructure, defense and security. “I look forward to bringing home as they say, more of these agreements that will be of benefit to the transformation of our economy and to mitigate See “Marcos,” A2
HE Bangko Sentral ng Pilipinas (BSP) believes inflation may have already peaked in January 2023. However, BSP Governor Felipe M. Medalla told reporters on Wednesday that “surprise price shocks” could still happen in the coming months. The pronouncements made by the central bank governor came a day after the Philippine Statistics Authority (PSA) announced that January inflation reached 8.7 percent, the highest in 15 years. “It [inflation in January] was actually higher than the high end of our forecast. Most likely [peaked]. Of course, I can’t rule out another surprise supply shock,” Medalla said. Based on PSA data, core inflation reached 7.4 percent. Core inflation is often considered an indicator of long-term inflation. Core inflation, which excludes certain highly volatile food and non-food items, posted a 7.4 percent growth. In January 2022, it was only at 1.8 percent. Core inflation was at 6.9 percent in December 2022. National Statistician Claire Dennis S. Mapa said this inflation rate was the highest since April 1999 when it hit 7.6 percent. Mapa said the PSA and BSP recently made changes to the composition of core inflation. The PSA and BSP removed items that had volatile prices comprising 29.6 percent of the weight of items included in headline inflation. He said some of the items that were removed were cereals, fish, meat, certain vegetables, electricity, diesel, and liquefied hydrocarbons, among others. Cai U. Ordinario
n JAPAN 0.4185 n UK 66.0699 n HK 6.9885 n CHINA 8.0814 n SINGAPORE 41.4197 n AUSTRALIA 38.1632 n EU 58.8354 n KOREA 0.0437 n SAUDI ARABIA 14.6195
Source: BSP (February 8, 2023)