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Thursday, May 4, 2023 Vol. 18 No. 199
EJAP JOURNALISM AWARDS
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SEVERITY, NOT TIMING, IS BIGGER FACTOR, SAYS MEDALLA
BSP flags El Niño’s inflation impact
CHILLING AT THE AIRPORT NAIA Terminal 2 now offers passengers the opportunity to relax in new seating areas furnished with locally made Filipino furniture, alongside a tourist information center and a comfortable lounging space complete with a mini-garden. The airport also boasts new charging stations and waiting areas, as well as features such as trees, plant walls, and solihiya panels that showcase the craftsmanship of Filipino artisans. A relaxing ambience, indeed, although the entire NAIA complex is beset with problems, not least the technical breakdowns that disrupt operations, delaying or cancelling flights and stranding thousands. Meanwhile, the Department of Transportation is set to review the unsolicited proposal of a newly formed consortium worth P100 billion to upgrade and operate the Ninoy Aquino International Airport. NONIE REYES
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By Cai U. Ordinario
@caiordinario
NCHEON, South Korea—The Philippines has mechanisms in place to cushion the impact of El Niño on food supply but the Bangko Sentral ng Pilipinas (BSP) says the extent of the impact, particularly on inflation, remains to be seen. See “BSP,” A2
PBBM, Harris affirm defense cooperation
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RESIDENT Ferdinand R. Marcos Jr. expressed great concern over the incidents of provocation by Chinese ships in the West Philippine Sea (WPS) despite his ongoing efforts to establish direct communication lines with Beijing. “It is one of the major issues
that we have to face back home,” Marcos said in a chance interview during his meeting with US Vice President Kamala Harris on Tuesday at the US Naval Observatory in Washington, D.C. Prior to his departure for his working visit in the US, Marcos said the government was still
waiting for a response from C hina to operat iona l i ze t he proposed communication lines between Manila and Beijing to prevent misunderstandings in the WPS. This after the near-collision between the Philippine Coast Guard and the Chinese Coast
Guard in the Ayungin Shoal last month as well as the 100 alleged Chinese ships which swarm the WPS last week. Amid such tensions in the WPS, Marcos said the country will continue to maintain its enhanced security cooperation with the US. See “PBBM,” A2
GIVE UP CASH HABIT, SO CENTRAL BANK CAN SAVE ON COSTS
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NCHEON, South Korea— If more Pinoys go cashless, the national government could see its costs decrease by way of lower cash printing and coin minting costs, according to the Bangko Sentral ng Pilipinas (BSP). In a session here on Wednesday, BSP Governor Felipe M. Medalla said the BSP spends quite a significant amount on cash. This is considered a subsidy that makes cash seem cheap for the average Filipino. However, in reality, Medalla said cash is not cheap, especially where the government is concerned. This is the reason for the government’s push for financial inclusion by way of
financial technologies. “Let me first say that cash looks cheap because the central bank absorbs the cost. It costs P10 to make a P20 coin so quite a bit of subsidy of the central bank on the physical cash system. So in a sense, if you literally reduce the demand for cash, the central bank cost for minting will go down,” Medalla said. Nonetheless, Medalla admitted that more needs to be done to encourage the use of financial technologies among Filipinos. It has to do with making financial technology costs lower and investing in infrastructure. Medalla said bringing down or removing the cost of money
transfers has already been put forth as one solution. This has already been supported by the banking industry, especially since the BSP agreed to bring down the reserve requirement ratio should this happen. The BSP governor said not all the solutions can be borne on the shoulders of the private sector and consumers. Efforts from the government are needed, especially in improving digital connectivity nationwide. Data gathered by the BSP showed that for CARD bank, half of its transactions were still assisted transactions. This means the technology is brought to customers in order for them to access their funds, which is
also common practice for small banks. From a regulatory perspective, Medalla said the BSP helps by creating “sandbox” regulations for small banks that allow them to cope while they are still growing. Once they become larger banks, they can be subjected to greater regulation from the central bank. “What the government can do is improve the signal. There’s nothing that the banks can do about the signal,” Medalla said. “Clearly, there are many things that government can do; it’s the signal and making sure that poor people, when they’re hit by disaster, have a fallback position.” See “Cash habit,” A2
PESO EXCHANGE RATES n US 55.3670 n JAPAN 0.4055 n UK 69.0537 n HK 7.0534 n CHINA 8.0006 n SINGAPORE 41.4827 n AUSTRALIA 36.8855 n EU 60.9203 n KOREA 0.0413 n SAUDI ARABIA 14.7646 Source: BSP (May 3, 2023)