PHL at risk in Russia-Ukraine grain deal halt
F
ILIPINOS should brace for high commodity prices, particularly products that use wheat, as the Kremlin has halted a wartime agreement to allow grain exports from Ukraine, according to local economists. Reports late Monday said Russia has suspended its wartime grains deal or the Black Sea deal brokered by the United Nations and Turkey until its food and fertilizer reach world markets. Local economists such as Ateneo de Manila University economist Leonardo Lanzona Jr. told the BusinessMirror that this will not only affect prices but could also lead to hunger and “shrinkflation” of wheat-based Filipino favorites such as pan de sal.
“I don’t see the people’s concern to mitigate inf lation to decline. In fact, we would hear greater clamor for the government to take more action,” Lanzona told this newspaper. Monetary Board Member Bruce J. Tolentino told the BusinessMirror that the suspension of the Black Sea deal “poses a serious risk” to the country. Ukraine and Russia, he said, are the world’s leading suppliers of wheat. University of the Philippines Los Baños (UPLB) College of Economics and Management Department of Economics Assistant Professor Luisito C. Abueg noted the Philippines does not have the ability to produce wheat, and as such, is a net wheat importer.
Abueg said this could create “waves of inflation” for the Philippines, already saddled by other supply issues involving other commodities. This recent development will lead to food supply problems down the road. “ This poses a serious risk. Russia and Ukraine combined are the world’s largest suppliers of wheat, and a sharp decline in wheat supplies will also push up grain prices overall—since the demand for rice and food [not feed] corn will also increase to the extent that such a substitute for wheat,” Tolentino said. But, Lanzona said, the world has already adjusted to the impact of the Ukraine-Russia war. He said global value chains for a certain
number of commodities have already changed in order to work around the war.
El Niño and Opec cuts, too
INFLATION in the country, added Lanzona, will be worsened by the El Niño and not just the possible spike in wheat prices. Given the El Niño, he expects inflation to be higher than 6 percent in the coming months. Lanzona said the BSP may also be prompted to impose higher rates to fight off second-round effects of inflation. Jonathan L. Ravelas, senior adviser at professional services firm Reyes Tacandong & Co., told See “Grain,” A2
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
n
Wednesday, July 19, 2023 Vol. 18 No. 275
P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK
MARCOS SEES ‘PROGRESS’ WITH MAHARLIKA, VOWS NO POLITICS
PRESIDENT Ferdinand R. Marcos Jr., flanked by leaders of the Senate and the House of Representatives and Cabinet members, signs the controversial Maharlika Investment Fund (MIF) Act aimed at attracting more investors to the country. The signing ceremony took place at the Kalayaan Hall in Malacañang despite warnings of possible misappropriation of government funds and legal challenges. President Marcos emphasized that the MIF would enable the government to leverage a small portion of its significant but underutilized investable fund to stimulate the economy without incurring additional fiscal and debt burden. ROLANDO MAILO/NIB-PNA By Samuel P. Medenilla
W
@sam_medenilla
ITH his signing of Republic Act 11954 or the Maharlika Investment Fund (MIF) Act on Tuesday, President Ferdinand R. Marcos Jr. said the government can now generate additional revenue, while accelerating economic growth through increased investments from the creation of the country’s first sovereign fund. Besides citing its safeguards against abuse, he also vowed to spare it from politics. The signing ceremony of RA
11954 was held at the Kalayaan Hall in Malacañang amid criticisms from See “MIF,” A2
GROWTH, INFRA BOOST EYED WITH MAHARLIKA By Cai U. Ordinario @caiordinario
T
HE signing of the Mah a rl i k a Invest ment Fund (MIF) will give the country’s infrastructure program and economic growth targets a much-needed boost while creating more jobs, and will prepare the country for being weaned away from an over-reliance on debts for development, economic managers said on Tuesday. The Department of Finance and the National Economic and Development Authority (Neda) struck the positive
note hours after President Ferdinand R. Marcos Jr. signed into law Republic Act No. 11954 establishing the Philippines’s first sovereign wealth fund. The MIF, DOF said, will widen the government’s fiscal space and ease the burden on local funds to undertake infrastructure projects. The MIF will also reduce the country’s reliance on official development assistance in funding big-ticket projects such as those specified in the recently approved Infrastructure Flagship Project (IFP) list. See “Maharlika,” A2
BOI investment approvals hit ₧698B in H1, up 203% By Andrea E. San Juan @andreasanjuan
T
RADE and Industry Secretary Alfredo E. Pascual, who chairs the Board of Investments (BOI), said the Philippines is poised to become Asia’s “premier” investment destination as the BOI just approved P698 billion worth of investment approvals for the first half of 2023, a 203-percent growth from the P230 billion recorded in the same period a year ago. According to the Department of Trade and Industry (DTI), the mother agency of BOI, the P698 billion worth of investments comprises 155 projects for the first semester.
“The Philippines is poised to become Asia’s premier investment destination. The signs are emerging. Foreign investment pledges are at a record high,” said the Trade chief, who just returned from a three-week European Investment Roadshow. Data from the BOI showed that foreign investment approvals accounted for 60 percent of the total investment approvals pie, which is equivalent to P423 billion, a 52-fold increase from just P7.89 billion in the first half of 2022. Meanwhile, the investment promotion agency said domestic investment approvals reached See “BOI,” A2
PESO EXCHANGE RATES n US 54.4160 n JAPAN 0.3923 n UK 71.1544 n HK 6.9639 n CHINA 7.5852 n SINGAPORE 41.1619 n AUSTRALIA 37.0791 n EU 61.1636 n KOREA 0.0431 n SAUDI ARABIA 14.5202 Source:
BSP (18 July 2023)