‘Taming inflation key to boosting FDI prospects’ By Cai U. Ordinario @caiordinario
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HE government remains focused on containing inflation as high interest rates are dampening the country’s investment prospects, according to the National Economic and Development Authority (Neda). Socioeconomic Planning Secretary Arsenio M. Balisacan also said the country will continue to feel the impact of high interest rates up until the end of the year. Interest rates have risen significantly
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since last year due to the Bangko Sentral ng Pilipinas’ (BSP) decision to raise policy rates on account of high inflation. The BSP has increased interest rates by 425 basis points (bps) before taking two prudent pauses in May and June this year. “Interest rates implemented last year and early part of this year are going to [be felt] until the end of the year because there are usually long time lags, 6 months to 1 year. High interest rates are not good for investments, that’s pretty clear,” Balisacan told reporters on the sidelines of the recent banking reception for the BSP’s
30th anniversary. Containing inflation, he said, is the key to preventing high interest rates from dampening the country’s investment prospects. Inflation slowed to 5.4 percent in June 2023 but, BSP Governor Eli Remolona Jr. said, core inflation remained high at 7.4 percent in June and averaged 7.7 percent in the first six months of the year. Core inflation, which excludes volatile items in the Consumer Price Index, is an important measure of the rise in commodity prices. The Philippine Statistics
Authority (PSA) defined core inflation as measuring the “underlying trend or movement in the average consumer prices.” “Inflation is the key. If you are able to manage, contain the elevation of prices and get it moderating as you wanted it then there is no reason for interest rates to further pick up,” Balisacan said. Apart from containing inflation, Balisacan said, high interest rates are also affected by the actions done by other Central Banks around the world. See “Inflation,” A2
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Monday, July 31, 2023 Vol. 18 No. 287
P25.00 nationwide | 3 sections 24 pages |
FAST-TRACK SPENDING By Jasper Emmanuel Y. Arcalas
F
@jearcalas
INANCE Secretary Benjamin E. Diokno remains optimistic that the national government (NG) would reach its full-year budget deficit ceiling, as agencies are already crafting their catch-up plans to accelerate their spending programs. Prior to President Marcos Jr.’s state visit to Malaysia, Diokno said he met with the heads of various government agencies and asked them to craft their respective catchup plans to speed up their spending. “The problem there is they are
underspending. Their budgets were increased significantly but the spending is still not at par. We expect them to come up with a catch-up plan,” Diokno said in a recent press briefing. See “Diokno,” A2
Govt grants various perks to projects of top PHL firms
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HE government extended incentives to 25 various projects nationwide with total investments of P287.947 billion during the first year of the Marcos Jr. administration. The projected amount of incentives or the foregone revenues by the state was at nearly P30 billion, according to the Department of Finance (DOF). Finance officials disclosed that the current administration through the Fiscal Incentives Review Board (FIRB) has not disapproved of a single project that was eligible for an incentive. The projects are expected to generate at least 24,617 jobs, according to documents released by the DOF to the media.
The list of projects was topped by Unity Digital Infrastructure Inc. for its P147.493-billion investment in infrastructure that includes telecommunications in multiple locations nationwide. The project was given an incentive of P1.097 billion which involved 4 years of income tax holiday (ITH), 5 years of enhanced deductions (ED), and 11 years of duty exemption on imports. The project, with the second biggest investment, was LBS Digital Infrastructure Corp. for its P36.069-billion telecommunication infrastructure project that is expected to generate 270 jobs. The firm received P1.392 billion in incentives from the government. See “Govt,” A2
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BIG FIGHTING HEART Hali Long then makes a heart sign after the Philippine national team called Filipinas close out their historic FIFA Women’s World Cup campaign with a 6-0 loss to Norway, a team ranked 34 rungs higher in the world rankings at No. 12. The Filipinas’ debut is marked by a breakthrough 1-0 victory over tournament co-host New Zealand.
‘BULACAN SEAPORT TO BOLSTER FIGHT AGAINST AGRI SMUGGLING’ By Andrea E. San Juan
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HE construction of a seaport beside the planned airport in Bulacan will provide a big boost to the government’s campaign against agricultural smuggling, according to the chief of logistics firm Royal Cargo Inc. Michael Kurt Raeuber, chairman and CEO of Royal Cargo Inc., said the Cold Examination Facility in Agriculture (Cefa), the first border inspection facility for agricultural imports in Bulacan, could be a “positive development” if a seaport would be constructed beside the planned airport in the province. “Because then you have also the idea of cluster which Doris Ho-Magsaysay is in favor of and is presenting to us because then you have a port, an airport, a cold storage, a facility to test the food,” Raeuber told the BusinessMirror on the sidelines of the Joint Maritime Committee Meeting of the Dutch Chamber of Commerce in the Philippines, the GermanPhilippine Chamber of Commerce and Industry, the Nordic Chamber of Commerce in the Philippines, and the Philippines Norway Busi-
ness Council last Thursday. “But right now out of nowhere...such a facility is being constructed. Who pays for all of that? And it’s 50 kilometers away from the port. If it would be near a port, it’s a different story. But it’s not,” he added. BusinessMirror reported that the Department of Agriculture (DA) allotted P2.3 billion in its 2023 budget for the construction of the facility, which would include hubs in Cebu and Davao. The Cefa, which will house “state-of-the-art testing laboratories,” aims to strengthen the country’s capability to conduct first border inspections and improve its examination of containerized agricultural commodities and prevent smuggling. DA Assistant Secretary James Layug said during the signing of the memorandum of understanding (MOU) on Cefa last July 20 that all imported agri-fishery products are to undergo a 100 percent examination by the various food regulators like the Bureaus of Animal Industry, Plant Industry, Fisheries and Aquatic Resources, as well as the National Meat Inspection Service.
‘Egay’ and monsoon kill 16; farm damage rises to ₧1.3B By Rene Acosta
@reneacostaBM
& Raadee S. Sausa
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HE government said the death toll from Super typhoon Egay and the prevailing southwest monsoon rose to 16. The Department of Agriculture (DA) also said in its latest bulletin that losses incurred by farmers and fishers climbed to P1.3 billion. The latest casualty number was reflected in the report of the National Disaster Risk Reduction and Management Council (NDRRMC) on Sunday, but said the number of deaths is still being validated, as it reported that flooding in some areas of the country have already receded. Severe flooding was also reported in some areas in Central Luzon due to the rains brought by Egay, the enhanced southwest monsoon and tropical storm Falcon, which the state weather bureau said will develop into a typhoon on Sunday evening or on Monday. The NDRRMC said response agencies and personnel continued to deliver emergency relief goods
and other forms of quick assistance to typhoon and flood-affected provinces around the country, including in Ilocos Norte where United States Marines and Filipino soldiers brought and unloaded emergency supplies. Members of the Armed Forces of the Philippines, the Philippine National Police and the Philippine Coast Guard (PCG) have been in the forefront of the ongoing humanitarian assistance and disaster response operations. The uniformed services and other agencies of the government were also in the thick of road clearing and rehabilitation efforts, including restoring power supply and telecommunication lines. At least 124 cities and municipalities are yet to be reconnected to power supply. As of Sunday, the NDRRMC said at least 291,262 families or 1,029,724 individuals in 2,615 barangays in Northern, Central and Southern Luzon, Southern Tagalog, Bicol region, National Capital Region, Cordillera Administrative Region, and a large part of the Visayas and Mindanao have been affected by Egay. See “Egay,” A2
PESO EXCHANGE RATES n US 54.5300 n JAPAN 0.3911 n UK 69.7984 n HK 6.9884 n CHINA 7.6053 n SINGAPORE 40.9723 n AUSTRALIA 36.5733 n EU 59.8685 n KOREA 0.0425 n SAUDI ARABIA 14.5370 Source: BSP (July 28, 2023)