BSP sees inflation within target range by Sept
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HE Bangko Sentral ng Pilipinas (BSP) expects the country’s headline inflation to be within its target range as early as September, as the increase in prices of goods and services continues to ease. “Our forecast is that by September or October, the headline inflation on a year-on-year basis will be below 4 percent unless there are new developments,” BSP Governor Felipe M. Medalla told reporters in an interview on Monday in Taguig City. The national government’s inflation target is between 2 and 4 percent. Medalla explained that the BSP has observed that headline inflation, on a month-on-month basis,
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has been stagnant or near zero since January. “At least from one month to the next, inflation is now moving that much. Of course, that will be the temporary effect of already high prices, but once that is gone, it will normalize,” he said Medalla said the government’s anti-inflation measures, which involved monetary and non-monetary actions, are already working, as exemplified by the downward trend in the country’s inflation rate. Medalla added that the BSP sees no more lingering supply shocks that could impact the prices of goods in the country. “The decision of the government to relax the importation of
goods with short supply contributed to that plus the fact that our higher policy rates also began to work,” he said. Without disclosing exact figures or range, the Central Bank governor said the inflation rate for May would be “significantly” lower on a year-onyear basis because of base effects. The country’s headline inflation in May 2022 was at 5.4 percent. The country’s inflation rate in April was at 6.6 percent, the lowest in four months and the third consecutive month that inflation was on a downward trend since the 8.7 percent in January. Medalla also disclosed that the BSP foresees headline inflation in January next year to be below 2 per-
cent because of base effects. The country’s improving inflation situation encouraged the BSP last month to pause its aggressive monetary policy tightening campaign. (Related story: https://businessmir ror .com.ph /2023/05/19/ bsp-pauses-interest-rate-hikesas-inflation-cools-and-consumerdemand-eases/) The BSP earlier said it expects inflation to average 5.5 percent this year, lower than the February estimate of 6.1 percent. The increase in commodity prices is also expected to average 2.8 percent in 2024, slower than the 3.1 percent estimate made in the last monetary policy report. Jasper Emmanuel Y. Arcalas
BusinessMirror
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Tuesday, May 30, 2023 Vol. 18 No. 225
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P66.8-B BUDGET SURPLUS IN APR HIGHEST IN 4 YRS n
FOOD, GLORIOUS FOOD! From May 26-28, food enthusiasts and manufacturers came together at the World Trade Center to participate in this year’s IFEX Philippines event. Serving as a comprehensive business-to-business platform, it offered a convenient opportunity for individuals seeking new flavors, suppliers and partnerships. The main ballroom, captured in the accompanying photo, was transformed into a bustling one-stop shop and a 2-story hub for manufacturers and local food chain suppliers. BERNARD TESTA
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By Jasper Emmanuel Y. Arcalas
@jearcalas
HE national government posted a budget surplus of P66.8 billion in April, over 1,250 percent higher from last year, as revenue collections outmatched spending during the period.
The Bureau of the Treasury said the budget surplus during the reference month was P61.9 billion higher than the P4.9 billion recorded surplus in April of last year. The national government’s budget surplus in April was the highest in four years, or since the P86.872 billion recorded in April 2019, historical BTr data showed. The budget surplus allowed the national government to trim its overall budget deficit on a year-to-date basis. The national
government’s budget deficit in Januar y to April was at P204.1 billion, about 35 percent lower than the P311.9-billion recorded deficit in the same period last year. Rizal Commercial Banking Corp. Chief Economist Michael Ricafort attributed the surge in government earnings in April to the “seasonal peak” of revenue collections, which government officials describe as the tax season. See “Budget surplus,” A2
M.A.P. FLAGS MALNUTRITION’S THREAT TO DIGITAL-AGE LABOR By Andrea San Juan
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HE Management A ssociation of the Philippines (MAP) has underscored the need to address malnutrition and child stunting, saying the workforce in the decades ahead will be in a “tech-driven” environment given the Digital Age and Artificial Intelligence (AI). “We cannot afford to have a major segment of our abundant workforce ill-equipped to meet the demands of the future AI-driven economy, by having lower mental capacities due to impaired brain development stemming from stunting at an early stage,” former National
Economic and Development Authority (Neda) chief Cielito Habito said during MAP’s recent multisectoral meeting with various stakeholders to operationalize the MAP “Campaign Against Malnutrition and Child Stunting” (CAMACS). Habito is Governor-in-Charge of the MAP Cluster on Resilience and Recovery. For her part, MAP President Benedicta Du-Baladad stressed in the same meeting that, “Child stunting affects cognitive development, and this can later on have an impact on their capacity to be productive, resulting in lower economic output and poorer quality of life.” See “M.A.P. flags,” A2
Think tank flags PHL risks despite good Q1 growth
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HILE gross domestic product (GDP) data from the Philippines beat Oxford Economic’s expectations in the first quarter of 2023, the think tank said its tracker continues to soften, pointing to a significant weakening in growth due to poor export performance and delayed impact of a sharp monetary tightening. The UK-based think tank described growth within the Association of Southeast Asian Nations (Asean) region as “some steady, some softening.” For one, it said the “brighter spots” of the region are Indonesia and Thailand. In Indonesia, Oxford said activity looks to be growing steadily, around the usual prepandemic pace of 5 percent. In Thailand, Oxford said its model has “underestimated growth
in the past few quarters, likely because it doesn’t fully account for the outsized importance of tourism.” In contrast, the UK-based think tank said, “Elsewhere the story is less upbeat” when it comes to the growth of the Philippines. In Oxford Economics’ forecast last February 2023, the UK-based think tank said the country’s economic growth will only reach 4.1 percent this year and 4.5 percent in 2024 on the back of sticky inflation which is expected to dampen demand. “Our tracker continues to soften pointing to a significant weakening in growth. That’s consistent with the headwinds faced from a poor export performance and the delayed impact of a sharp monetary tightening,” Oxford Economics said. See “Think tank,” A2
PESO EXCHANGE RATES n US 55.8330 n JAPAN 0.3969 n UK 68.9593 n HK 7.1279 n CHINA 7.9056 n SINGAPORE 41.2966 n AUSTRALIA 36.4143 n EU 59.8865 n KOREA 0.0422 n SAUDI ARABIA 14.8876 Source: BSP (May 29, 2023)