‘BSP ready to use all available tools to temper inflation’
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he Bangko Sentral ng Pilipinas (BSP) is ready to take all monetary policy actions to attain the country’s inflation targets amid rising commodity prices. On Thursday, the Philippine Statistics Authority (PSA) reported the country’s headline inflation rate reached 8.1 percent in December and averaged 5.8 percent in 2022. (See story here: https://businessmirror. com.ph/2023/01/05/ph-inflation-up-
8-1-in-december/) The BSP said in a statement that given the high inflation recorded in December, the country’s “inflation outlook remains tilted to the upside” this year but “broadly balanced” next year. “The BSP remains prepared to take all monetary policy action necessary to bring inflation back to a target-consistent path over the medium-term,” the BSP said in
a statement. “The BSP also continues to support the timely implementation of non-monetary government measures to mitigate the impact of persistent supply-side pressures on inflation,” it added. BSP said these upside risks include local trade restrictions as well as increased prices of fruits and vegetables due to weather disturbances. Other factors that could increase
inflation include higher sugar prices, pending petitions for transport fare hikes, and potential wage adjustments in 2023. “The expected upside risks to inflation over the policy horizon stem mainly from elevated international food prices due to high fertilizer prices and supply chain constraints,” the BSP said. See “BSP,” A2
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PURCHASING POWER OF PESO WEAKENS FURTHER T www.businessmirror.com.ph
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Friday, January 6, 2023 Vol. 18 No. 83
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By Cai U. Ordinario
Marcos set to visit Japan, Switzerland
@caiordinario
he purchasing power of the peso was at its weakest in four years as more expensive food and fuel caused inflation to accelerate to a 14-year high in 2022, according to data from the Philippine Statistics Authority (PSA).
On Thursday, the PSA reported the country’s headline inflation rate reached 8.1 percent in December and averaged 5.8 percent in 2022, the highest since 2008. (See story here: https://businessmirror. com.ph/2023/01/05/ph-inflation-up-8-1-indecember/) For economists like Ateneo de Manila University’s Leonardo A. Lanzona Jr., the erosion of the purchasing power may continue given that inflation will remain an issue this year. “The same side constraints induced by the Ukraine-Russian war persists. Second, the opening of China will increase the demand for basic material, such as oil, and so is expected to reinforce the inflationary pressures,” Lanzona told the BusinessMirror. “Third, the recession itself could possibly reduce the demand for goods globally, but the inflation is fundamentally a supply problem, hence the recession can only make the supply constraints more significant,” he added. Data obtained from the PSA showed that the purchasing power of the peso fell by P0.0505 centavos to P0.8674 by the end of 2022 compared to P0.9179 at the end of 2021. This erosion of the purchasing power was the largest since 2018, when it declined by P0.0525 centavos. This means every Filipino shelled out an additional P13.26 to buy goods worth P100 in 2022. Products worth P100 in 2018, which is the base year used to compute the Consumer Price Index (CPI), cost P113.26 last year. See “Purchasing,” A2
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President Ferdinand Marcos Jr. shakes hands with President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing, Wednesday, January 4, 2023. Marcos has cited stable ties with China during a visit to Beijing in which he has sought to downplay territorial disputes in the South China Sea. After being hard hit by the Covid-19 pandemic, both nations are seeking to recharge investments in bridges and other projects, along with tourism and agriculture. Office of the Press Secretary via AP
EIJING—President Ferdinand R. Marcos Jr. is set to fly to Switzerland and Japan following his state visit in China this week. In a press conference prior to his departure from Beijing last Thursday, Marcos said he will travel to Davos, Switzerland later this month to attend the World Economic Forum (WEF). “I have a trip to…later this month to Davos and Japan maybe will be the next one after that,” he said. House Speaker Martin G. Romualdez earlier said Marcos accepted the offer of WEF Founder and Executive Chairman Klaus Schwab to attend the next forum in Switzerland from January 16 to 20. WEF is an annual event held by nonprofit organizations, which is attended by political, business, and cultural leaders of society to discuss possible international and industry agenda. See “Marcos,” A2
‘Concessions’ for China EV makers eyed By Samuel P. Medenilla
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sam_medenilla
EIJING—President Ferdinand R. Marcos Jr. is considering the grant of “concessions” to Chinese firms engaged in mineral processing and electric vehicle (EV) production to boost foreign investment inflows into the Philippines. In his press conference before his departure from Beijing last Thursday, Marcos said he is considering the measure to encourage investments in the country's “infant industries.” “So maybe that they are asking for some concession. So pinagaaralan natin ‘yan [so we are now studying that] and — but it is very important to the Philippines for
PESO exchange rates n US 56.0140
such industries to enter the country since these are part of the green economy that’s coming up. So we have to be part of it,” Marcos said. “ T h at is where t he globa l economy is headed. So kailangan makapag-position tayo [so we need to position ourselves] and I think we’re heading in the right direction," he added. During his State Visit in China from January 3 to 5, Marcos was able to secure $22.8 billion worth of investment pledges. T hese investment commitments include $1.72 billion for agribusiness, $13.76 billion for renewable energy, and $7.32 billion for strategic monitoring (electric vehicle, mineral processing). In the agribusiness roundtable meeting during the visit, Marcos
witnessed the signing of the protocol on market access for Philippine durian to China. Also signed during the visit are investments in coconut and food processing; development of durian production; and processing and marketing, as well as alternative green technology for animal feeds and other agriculture related products; and sustainable supply of agriculture inputs, especially fertilizers. Other signed agreements involve Chinese investments in renewable energy pursuits such as in solar and wind, as well as in related sectors including battery energy storage systems and offgrid power supply systems. See “Concessions,” A2
n japan 0.4223 n UK 67.5305 n HK 7.1666 n CHINA 8.1220 n singapore 41.7765 n australia 38.2688 n EU 59.3916 n KOREA 0.0441 n SAUDI arabia 14.9013 Source: BSP (January 5, 2023)