Think tank: Next rate hike may only be 25 bps
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THE WORLD ›› A11
GLOBAL SHARES FALL ON MIXED MANUFACTURING INDICATORS
HE Monetary Board is expected to raise interest rates by only 25 basis points in its next policy meeting, according to a local private think tank, First Metro Investment Corp.University of Asia and the Pacific (FMIC-UA&P) Capital Markets Research. In its latest Market Call report, the think tank said inflation is expected to cool and average 8.1 percent in the first quarter of 2023. This may be the impetus for the
Bangko Sentral ng Pilipinas (BSP) to raise rates at a slower pace of 25 basis points. Last week, the Monetary Board raised interest rates by 50 basis points, effectively increasing overnight reverse repurchase facility rates to 6 percent. “Consistent with our forecast that Q1 inflation will average 8.1 percent, the Monetary Board increased policy rates by 50 bps to 6 percent in its February 16 meeting to keep inflation expectations in
check, and minimize second round effects,” FMIC-UA&P Capital Markets Research said. The think tank expects inflation to continue easing. But it will not be until the second semester of the year when the slowdown in inflation will be faster. “Notably, Thai rice prices, 5 percent broken, have risen by 21.7 percent year on year by January and threaten to upset expectedly milder food inflation in the second quarter,” the FMIC-UA&P Capital
Markets Research said. Overall, the think tank said the Philippine economy is expected to “weather the global recession relatively unscathed” this year on the back of a positive growth in jobs and increased infrastructure spending. “[The] manufacturing sub-sector gains may continue to drive domestic demand despite elevated inflation rates. The personal income See “25 bps,” A2
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Wednesday, February 22, 2023 Vol. 18 No. 130
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Senate wraps up RCEP debates S
By Butch Fernandez @butchfBM, Cai U. Ordinario @caiordinario & Jovee Marie N. dela Cruz @joveemarie
AYING the benefits outweighed the oft-cited risks to certain local sectors, the Philippine Senate on Tuesday was expected to concur in the ratification of the Regional Comprehensive Economic Partnership (RCEP), the mega trade deal creating the world’s largest free-trade zone. Senators need to muster at least 16 votes to ratify the treaty that had been signed in the previous administration, but which was not ratified in the 18th Congress for lack of time to tackle serious concerns that it would permanently, substantially damage key sectors, especially agriculture. Senators stood up one after the other late Tuesday to interpellate the treaty’s main endorsers in the chamber—Senate President Juan Miguel Zubiri and Senate President Pro Tempore Loren Legarda— as well as grill the country’s top
negotiator, Assistant Secretary Allan B. Gepty of the Department of Trade and Industry (DTI). Gepty was earlier grilled at length by Sen. Chiz Escudero, who was not impressed by the argument that only a little over a dozen agricultural commodity groups will have tariff rates lower than were set under existing freetrade agreements among Asean countries. Escudero said the exclusions list—of so-called “sensitive items” See “RCEP,” A2
NIC clears Innovation Fund drawdown for 19 projects
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HE National Innovation Cou nc i l ( N IC ) h a s ap proved 19 projects to tap into the government’s Innovation Fund, according to the National Economic and Development Authority (Neda). In a br iefing in Malacañang, Ned a Secretar y A rsenio M. Ba l isaca n sa id t he 19 projects w i l l d raw P115 m i l l ion f rom t he Innovat ion Fu nd. Balisacan said the Innovation Fund is a revolving fund that aims to strengthen entrepreneurship and enterprises engaged in developing innovative solutions. “Innovation plays a critical
role in our pursuit for sustained and accelerated economic growth and development, as it serves as a catalyst for raising overall productivity and elevating the quality of our goods and services,” Balisacan said. “Only through a collective national effort can we truly pursue and attain these goals for our future.” The project that received the largest funding was the Grassroots Innovation for Inclusive Development (GRIND): Bringing Science and Technology (S&T) closer to the Margins, with P15 million. This is
PUSHING RCEP Socioeconomic Planning Secretary and NEDA Director General Arsenio Balisacan (right), joined by Presidential briefing officer Daphne Oseña Paez, fields questions from the Malacañang Press Corps on Tuesday (Feb. 21, 2023), in a last-ditch pitch for ratification of the Regional Comprehensive Economic Partnership (RCEP). PNA/REY BANIQUET
MBC URGES SENATORS TO RATIFY RCEP SOON
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HE Makati Business Club (MBC) on Tuesday urged members of the Senate to ratify the Regional Comprehensive Economic Partnership (RCEP) which the business group said could help businesses expand abroad and accelerate job creation, among others. “We believe joining RCEP is essential to this, as it will comprise 15 countries, 2.1 billion people, and around 30 percent of global [gross domestic product] GDP,” MBC said in a statement on Tuesday. While the regional trade deal
would help the Philippines enter foreign markets, the local business group said it would also “expose” the country’s local industries to more competition at home. “We recognize that there are valid concerns about this. However, we believe that adequate safeguards have been included,” the local business group said, adding that they believe competition will result in “better local players and better products and services for Filipinos.” See “MBC,” A2
See “NIC,” A2
PESO EXCHANGE RATES n US 55.1680 n JAPAN 0.4110 n UK 66.4278 n HK 7.0419 n CHINA 8.0463 n SINGAPORE 41.3058 n AUSTRALIA 38.0935 n EU 58.9525 n KOREA 0.0426 n SAUDI ARABIA 14.7095 Source:
BSP (21 February 2023)