‘High inflation, rates to stymie growth goals’
H THE WORLD ›› A16
UN CHIEF: SUDAN ON THE BRINK OF ‘FULL-SCALE CIVIL WAR’ AFTER NEARLY 3 MONTHS OF FIGHTING
ROTARY CLUB OF MANILA JOURNALISM AWARDS
2006 National Newspaper of the Year 2011 National Newspaper of the Year 2013 Business Newspaper of the Year 2017 Business Newspaper of the Year 2019 Business Newspaper of the Year 2021 Pro Patria Award PHILIPPINE STATISTICS AUTHORITY 2018 Data Champion
IGH inflation and interest rates are expected to prevent the Philippines from hitting its growth target this year, according to the latest economic brief from Maybank. The Philippine economy is expected to post a growth of only 5.5 percent by yearend. This is below the target set by the Development Budget Coordination Committee (DBCC). In June, the DBCC said its growth assumption was set at 6 to 7 percent for 2023 and 6.5 to 8 percent between 2024 and 2028.
“We expect Philippines’s real GDP 2023 growth to ease to 5.5 percent as we see growth being affected by global economic downturn and domestic headwinds due to the combo of elevated inflation and interest rates,” Maybank said. “Hence, we expect sluggish external demand in coming quarters, with China’s economic activities so far [having] been slower than expected despite the zero Covid-19 policy exit and full reopening,” it added. Maybank noted the results of the latest Business Outlook Survey by
the Bangko Sentral ng Pilipinas (BSP) showing businesses were less optimistic for the third quarter of the year and the next 12 months. The economic brief also cited the constraints identified by survey respondents, topped by high interest rates. Maybank noted that rising interest rates are expected to dampen business sentiment and job creation moving forward. However, Maybank noted the improvement in the recent employment numbers. Given this, Maybank expects the unemployment rate to continue improving.
Last week, the Philippine Statistics Authority (PSA) reported that the country’s unemployment rate was at 4.3 percent, the second lowest since April 2005 when the government changed the definition of unemployment, adopting the ILO’s. In November 2022, the jobless rate was at 4.2 percent. (Earlier story here: https://businessmirror. com.ph /2023/07/07/unemployment-down-to-second-lowest-ratein-may-psa/).
BusinessMirror
w
Tuesday, July 11, 2023 Vol. 18 No. 267
See “High,” A2
EJAP JOURNALISM AWARDS
BUSINESS NEWS SOURCE OF THE YEAR
(2017, 2018, 2019, 2020, 2021) DEPARTMENT OF SCIENCE AND TECHNOLOGY
2018 BANTOG MEDIA AWARDS
APRIL FDI DIP ON GLOBAL SLOWDOWN, INFLATION T By Cai U. Ordinario
n
P25.00 nationwide | 3 sections 32 pages |
@caiordinario
HE Philippines’s foreign direct investments (FDI) contracted anew in April on the back of a global economic slowdown and high inflation, according to the Bangko Sentral ng Pilipinas (BSP).
BSP data showed FDIs contracted 14.1 percent to $876 million worth of net inflows in April 2023 from $1 billion in April 2022. The year-to-date FDI net inflows reached $2.9 billion, an 18-percent contraction from the $3.6 billion recorded in the comparable period in 2022. “The decline in FDI may be attributed to concerns over slowing economic growth and relatively high inflation levels globally,” BSP said. The data showed that in terms of components, net investments in debt instruments, which declined by 7.7 percent to $663 million, continued to comprise most of the country’s FDI for the period. Net equity investments other than reinvestment of earnings registered the highest decline of 33.8 percent to $136 million.
Bulk of the equity capital placements during the month came from Japan, the United States and Singapore. The investments were channeled mostly to the manufacturing; real estate; and financial and insurance industries. BSP explained that FDI are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6). FDI includes investment by a non-resident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a non-resident subsidiary/associate in its resident direct investor. BSP also said FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
U.S. FIRMS PUSH NEW BUSINESS DEALS VITAL TO U.S. SECURITY By Samuel P. Medenilla @sam_medenilla
A
MERICAN firms are now pushing for new cooperation and investment deals with the Philippines on sectors deemed crucial for United States (US) national security. In a statement, the Presidential Communications Office (PCO) said members of the Business Executives for National Security (BENS) made the disclosure during their meeting with President Ferdinand R. Marcos Jr. in Malacañang last Monday. The 10-member US-based business group said they are interested in signing new agreements related to health, digital infrastructure and energy programs. They also lauded the President for “restoring the special and important alliance between the governments of the Philippines and the US.” Marcos discussed how the government is addressing the problems in the priority sectors of BENs, which include the country’s lack of Filipino health care
workers (HCW) as they remain in demand in many countries, including the US. Among the initiatives to address the workforce shortage, he said, is a proposed arrangement wherein countries must train a sufficient number of replacements for Filipinos HCWs, who they will hire, as well as accelerating the board examinations of nurses. The chief executive also talked about the government’s efforts to fix energy issues through improved distribution mechanisms, and the mainstreaming of digitalization of government transactions to improve ease of doing business. He also pointed out the country is engaged in retraining and re-skilling its workforce so they will meet the changing demands in the labor market. “We need to catch up in terms of training, in terms of getting involved in the new technologies that we are seeing for many, many reasons: for the digitalization, for the climate change, for the cybersecurity,” Marcos said. See “US,” A2
FILL ‘EM UP Residents of Manila may be seen lining up with empty water containers, anticipating a water supply interruption in parts of Navotas, Malabon and Caloocan on Monday, July 10, 2023. Manila Water, in an announcement made on Sunday, said the interruption is due to the low water level in Angat Dam. The dam is projected to reach its minimum operating level of 180 meters above sea level, causing more than 500,000 Maynilad customers to experience a 9-hour water interruption. This situation affecting millions of customers of the two water utilities highlights the pressing need to conserve water resources and address the challenges posed by the current water supply conditions. See related story on page A2, “Marcos: Mitigation plan for impact of El Niño to be unveiled this week.” ROY DOMINGO
Marina pitches seafarer issues in new IMO plan on ship GHG By Lorenz S. Marasigan @lorenzmarasigan
T
HE Maritime Industry Authority (Marina) said on Monday it has “strongly advocated” for the recognition and inclusion of seafarers’ concerns in the revised International Maritime Organization (IMO) strategy on greenhouse gas (GHG) reduction from ships. During the 80th session of the Marine Environment Protection Committee (MEPC), Philippine maritime and diplomatic representatives “emphasized the imperative of addressing seafarers’ interests in the strategy,” with Philippine Ambassador to the United Kingdom Teodoro
L. Locsin Jr. stressing that seafarers play a “crucial role” in achieving decarbonization objectives in the global shipping industry. According to the Marina, the Philippines has welcomed the adoption of the 2023 IMO Strategy on GHG Reduction from Ships “as a clear demonstration of the organization’s commitment to combating climate change.” “Notably, Item 3 in the MEPC resolution, which endorses the revised strategy, acknowledges the significance of addressing the human element and the impact on seafarers and other maritime professionals in ensuring a safe implementation of the strategy,” Marina said. See “Marina,” A2
PESO EXCHANGE RATES n US 55.5970 n JAPAN 0.3911 n UK 71.3699 n HK 7.1030 n CHINA 7.6951 n SINGAPORE 41.2961 n AUSTRALIA 37.1833 n EU 60.9732 n KOREA 0.0428 n SAUDI ARABIA 14.8207 Source: BSP (July 10, 2023)