Analysts: PHL may not be able to cut rates ahead of Fed By Cai U. Ordinario @caiordinario
T
HE Bangko Sentral ng Pilipinas (BSP) may not have sufficient resources to cut interest rates ahead of the United States Federal Reserves, according to foreign analysts. In its latest Philippine update, ANZ Research stated that while the country’s current account deficit was receding, this is “still not at comfortable levels.” In 2023, the country’s current account deficit narrowed to $11.21 billion from the $18.26 billion recorded in 2022. It can be noted that in 2020,
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
the country had a current account surplus of $11.578 billion and a deficit of $5.943 billion in 2021. “We also think that it would be difficult to move ahead or in sync with the US Fed. Though the current account deficit is receding, it is still not at comfortable levels,” ANZ research said. “We, therefore, expect the first rate cut of 25bp [basis point] to materialize in the first quarter of 2025.” On Friday, the BSP said it is eyeing to cut key policy rates twice in the second half of the year. BSP Governor Eli M. Remolona Jr. told reporters this may be delivered in increments of 25 basis points as early as August.
This means, the maximum rate cut that is expected to be delivered by the Monetary Board is 50 basis points by the end of the year. If the BSP will cut rates by a maximum of 50 basis points, this will place key policy rates at 6 percent by the end of the year. Should this happen, the BSP would be cutting its policy rates ahead of the United States Federal Reserve which is expected to deliver its rate cuts starting in September. (See: https://businessmirror.com.ph/2024/05/17/ bsp-keeps-rates-but-eyes-2-cuts-in2nd-half/) “All in all, macroeconomic conditions are becoming more and more balanced
and the central bank’s ‘monetary policy freedom’ from the Fed is increasing,” HSBC Asean economist Aris Dacanay said. “Although we don’t think the level of improvement is large enough for the BSP to cut ahead of the Fed, it may be enough for the BSP to keep its monetary stance steady if another episode of Fed repricing occurs,” he added. However, Citi’s economist for the Philippines Nalin Chutchotitham said that despite recent adjustments in inflation projections, they maintained their initial estimate that BSP will deal a 25 bps cut in August. See “Analysts,” A2
BusinessMirror
EJAP JOURNALISM AWARDS
BUSINESS NEWS SOURCE OF THE YEAR
(2017, 2018, 2019, 2020, 2021) DEPARTMENT OF SCIENCE AND TECHNOLOGY
2018 BANTOG MEDIA AWARDS
DOF: GROWTH WILL HIT n
Monday, May 20, 2024 Vol. 19 No. 216
P25.00 nationwide | 2 sections 22 pages |
LOW END OF 6-7% GOAL T
By Reine Juvierre S. Alberto
HE Philippines’ economic growth could settle within the lower end of the national government’s target of 6 to 7 percent this year, according to the Department of Finance (DOF). The Philippine economic growth settled at 5.7 percent in the first quarter of 2024, higher than the 5.5 percent recorded in the last quarter of 2023, but slower than the 6.4 percent posted in the first quarter last year. (See: https://businessmirror.com.ph/2024/05/09/ phl-economy-posts-5-7-growthin-q1-of-2024-psa/). “When we look at it, moving forward, it seems that the Philippines will be growing at this kind of pace,” Velasquez said. The economist banked on the government’s expectations on household consumption, which contributes around 80 percent of the GDP, to continue improving in the coming quarters. See “DOF,” A2
IPOPHL MAKES SITE-BLOCKING BIS VS TOP PIRACY WEBSITE By Andrea E. San Juan @andreasanjuan
T
HE Intellectual Property Office of the Philippines (IPOPHL) said it has issued its first siteblocking request against 11 sites under the YTS brand, one of the top piracy websites in the world. The decision of IPOPHL’s IP Rights Enforcement Office (IEO) revealed that the websites associated with YTS are “hosting pirated versions of movies or TV shows, allowing users to access these illegal copies by downloading them through links on same website or by streaming them online.” “The IEO found that the 11 sites associated to YTS, namely yts.mx, yts.rs, yts.do, ytsuproxy. to, yts.dirproxy.com, yts.unblocked. love, ytssss.jamsbase.com, yts. lt, yts.ag, yts.am and torrents.yts.rs., all committed piracy or copyright infringement, violating Section 216 of the Intellectual Property Code of the Philippines, as well as Memorandum Circular 23-025 or the Rules on Voluntary Administrative Site Blocking,” IPOPHL said in a
statement over the weekend. The country’s intellectual property rights watchdog said infringers were operating by using “various methods” to distribute and access copyrighted material illegally, including via peer-to-peer networks for sharing files, hosting content on illegal streaming websites, distributing files through direct downloads and using tools like virtual private networks (VPNs) to hide their activities. According to the decision of IPOPHL’s enforcement arm, the websites under complaint are also listed in the World Intellectual Property Organization’s (WIPO) Alert, a data-sharing platform on piracy of the global IP organization. “The YTS is the official home of YIFY, one of the world’s most prolific sites involved in the illegal replication and distribution of copyright content,” IPOPHL explained. IPOPHL cited a 2015 report from the Motion Picture Association (MPA) of America which said that the site has a library of some 4,500 “infringing” motion picture titles. See “IPOPHL,” A2
PEDAL FOR PEOPLE AND PLANET Thousands of families and bike enthusiasts joined the “Pedal for People and Planet” event at the weekend, advocating for 100-percent renewable energy to ensure a fossil fuel-free future for our children. The event took place simultaneously in the Philippines, Pakistan, Nepal, Bangladesh, and Indonesia. This bike action underscored the urgent need for 100-percent renewable energy to keep the planet’s average temperature below 1.5°C. In the Philippines, the event was held at the University of the Philippines Campus in Diliman, Quezon City. ROY DOMINGO
No excise tax rate hike amid projected revenue dip–DOF
T
HE Department of Finance (DOF) will not impose a rate hike in excise taxes, particularly on sin taxes, amid the expected drop in revenues to be collected this year, according to its chief economist. This, after Finance Secretary Ralph G. Recto said sin tax and value-added tax (VAT) collections could decline this year due to the slowdown in household consumption. (See: https://businessmirror.com.ph/2024/05/16/ revenue-take-may-dip-on-slower-spending). Office of the Chief Economist Undersecretary Domini SD. Velasquez said that the government will not increase the tax rate of sin taxes but instead attempt to plug the much-needed taxes leaking from the e-marketplace. “What they’re looking at is not a hike. We are not there yet except for the existing [annual tax rate
increase],” Velasquez said during the EJAP-SMC Business Journalism Seminar on Saturday. Velasquez underscored the state’s lower collections of sin taxes and put the blame on illicit trade and consumers’ shift to ecigarettes, such as vaping products, sold in the e-marketplace. Data from the Philippine Statistics Authority (PSA) on Household Final Consumption Expenditure (HFCE) showed that demand for alcohol products and tobacco contracted by 2.7 percent in the first quarter of 2024. Meanwhile, data from the Bureau of Internal Revenue (BIR) showed that excise taxes on tobacco dropped to P21.975 billion as of the first quarter of the year, down by 20 percent or P5.495 billion from the P27.471 billion collected in the same period a year ago. See “No,” A2
EXPLAINER »B4
JESUS IS THEIR SAVIOR, TRUMP IS THEIR CANDIDATE: Why Evangelicals and conservative Christians support Trump in 2024
PESO EXCHANGE RATES n US 57.3580 n JAPAN 0.3692 n UK 72.6841 n HK 7.3531 n CHINA 7.9444 n SINGAPORE 42.6232 n AUSTRALIA 38.2922 n EU 62.3424 n KOREA 0.0426 n SAUDI ARABIA 15.2942 Source: BSP (May 17, 2024)
AP/JESSIE WARDARSKI
During the SMC-EJAP Business Journalism Seminar on Saturday, Office of the Chief Economist Undersecretary Domini SD. Velasquez said this could be achieved if the country’s gross domestic product (GDP) grew by 6.1 percent consistently in the second to fourth quarter of the year. The country is poised to be one of the fastest-growing economies among Asean countries, with the International Monetar y Fund (IMF) projecting the Philippines to lead Asean-6, China, and the global economy in 2024 and 2025. “We need 6.1 percent for the rest of the year to actually reach that 6 percent. I think that’s very achievable,” Velasquez said at the weekend.