MB could start rate cuts in Q4, Recto signals T
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HE Monetary Board could start cutting rates in the fourth quarter of the year, as signaled by Finance Secretary Ralph G. Recto ahead of the Monetary Policy Meeting on Thursday, May 16. Recto told reporters on the sidelines of the 54th anniversary of the Development Budget Coordination Committee (DBCC) on Tuesday that the Monetary Board is likely to keep its rates unchanged in the next policy meeting. “So far, the way I see it, unless something changes between now and then, I think more or less [steady],” said Recto, a member of the Monetary Board, the highest policy-making body of the Bangko Sentral ng Pilipinas (BSP).
Moving forward, the Finance chief added he expects rates to go lower not in the next policy meeting but possibly within the end of the year. Earlier, BSP Governor Eli M. Remolona Jr. said the central bank is likely to maintain its key policy rates as inflation remains elevated. However, if inflation relaxed to 3 percent consecutively in the coming months and within the target “comfortably,” Remolona said the Board would have room to cut interest rates by 25 basis points (bps). Asked if he expects the central bank to strike a hawkish tone after the gross domestic product (GDP) settled at 5.7 percent in the first quarter of the year, Recto said it all
“So far, the way I see it, unless something changes between now and then, I think more or less [steady].”—Finance Secretary Ralph G. Recto
depends on inflation. “The expectations for inflation this year are lower than expected by the BSP. But it will be sticky,” Recto added. The Finance chief expects inflation to go “a little bit higher” next year as well. Headline inflation settled at 3.8 percent in April, within the BSP’s target range of 3.5 to 4.3 percent and the Development Budget Coordination Committee’s (DBCC) range of 2.0 to 4.0 percent. Recto expressed confidence that the country will post a growth of 6 percent before the end of the year since inflation is seen to decline together with rice prices slowing down.
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Reine Juvierre S. Alberto
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Thursday, May 16, 2024 Vol. 19 No. 212
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REVENUE TAKE MAY DIP ON SLOWER SPENDING By Reine Juvierre S. Alberto @reine_alberto
THE government’s revenue collection could drop this year due to the slowdown in household consumption, including spending on vices, according to government officials. Latest data from the Philippine Statistics Authority (PSA) on Household Final Consumption Expenditure (HFCE) showed that demand for alcoholic beverages and tobacco contracted by 2.7 percent in the first quarter of 2024. Spending for these so-called “sin products” posted a growth of 7.4 percent year-on-year in 2023. Asked by BusinessMirror if there is a concern that sin tax and VAT collections could decline this year, Finance Secretary Ralph G. Recto said: “Yes, because of illicit trade and vape smuggling.” Excise taxes on tobacco dropped to P21.975 billion as of the first quarter of the year, based on data obtained by BusinessMirror from the Bureau of Internal Revenue (BIR). This is down by 20 percent or Continued on A
SANTA ANA’S NEW TRAFFIC MIX Residents drive their tricycle past US military vehicles at the Naval Base Camilo Osias in Santa Ana, Cagayan province, northern Philippines on May 6, 2024. The Philippines and the US, which are longtime treaty allies, have identified the far-flung coastal town of Santa Ana in the northeastern tip of the Philippine mainland as one of nine mostly rural areas where rotating batches of American forces could encamp indefinitely and store their weapons and equipment within local military bases under the Enhanced Defense Cooperation Agreement, or EDCA. AP/AARON FAVILA
‘PASSPORT FOR GOODS’ TO BE Cerberus-HD Hyundai IN PLACE IN PHL IN JULY–PCCI deal to boost OSW sector
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FFECTIVE July 2024, the Philippines will implement a “passport for goods” system that simplifies customs procedures for importers and exporters without requiring these traders to pay taxes under certain conditions, according to the Philippine Chamber of Commerce and Industry (PCCI). In a statement on Wednesday, PCCI President Enunina Mangio said, “We are pleased to partner with the Bureau of Customs in launching the ATA Carnet system in the Philippines.” Mangio said the “strategic” move aims to streamline and facilitate temporary exports and
imports of goods, making crossborder trade more efficient and cost-effective for businesses. According to PCCI, ATA Carnet, also known as the “passport for goods,” is an international customs document that simplifies customs procedures for admission of goods up to one year. “It allows businesses to temporarily export and import into participating countries without the need to pay duties and taxes, provided that the goods are reexported within a specified timeframe,” PCCI said. The business group called this Continued on A
By Andrea E. San Juan @andreasanjuan
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RECENTLY inked multiyear commercial agreement between HD Hyundai, a global shipbuilding engineering firm and Cerberus Capital Management, a global investment firm, aims to start the manufacturing of offshore wind platforms within the next 12 to 18 months, which is seen to regain “economic vitality” in Subic. In a statement on Wednesday, Cerberus announced it has entered into a “multi-year” agreement at Agila Subic Compass with leading maritime manufacturer HD Korea Shipbuilding and Offshore Engineering to lease a portion of its
facility located in Subic Bay, Zambales. “So the site preparations and the modifications that will need to take place over the next 12 to 18 months, we anticipate this would be in the tens of millions or potentially even hundreds of millions of dollars of investment that will need to be mobilized,” Alexander Benard, Senior Managing Director at Cerberus told reporters in a virtual briefing on Wednesday. Once the facility is fully up and running and once the manufacturing activities are fully operational, Benard said “there will be thousands of jobs that will result from this.” Continued on A
PESO EXCHANGE RATES US 57.8510 Q JAPAN 0.3698 Q UK 72.8518 Q HK 7.4056 Q SINGAPORE 42.8019 Q AUSTRALIA 38.3263 Q SAUDI ARABIA 15.4257 Q EU 62.5890 Q KOREA 0.0425 Q CHINA 7.9982 Source: BSP (May 15, 2024)