IMF Outlook report: More Pinoys jobless in ’24
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US AIRLINES PULL BACK FROM ISRAEL FLIGHTS AS STATE OF WAR DECLARED
ORE Filipinos are expected to join the ranks of the unemployed next year, according to the World Economic Outlook (WEO) released by the International Monetary Fund (IMF). IMF said the country’s unemployment rate is expected to average 4.7 percent this year, which will rise to 5.1 percent next year. If t he unemploy ment rate breaches 5 percent next year, this will be the highest since 2022, when the unemployment rate averaged 5.4 percent. “The task for central banks is complicated by the difficulty of estimating with confidence levels
of neutral rates of interest and of unemployment, as well as by lags in policy transmission uncertainties associated with forecasting inflation in this environment, and the differing potency of the transmission mechanism across economic sectors,” the report said. “Calibrating monetary policy will require weighing the costs of lowering nominal rates prematurely versus those of delaying too much.” IMF said the unemployment for 2024 is also expected to grow by an average of 0.1 percentage point over 2022–2024 in advanced economies. The report said the increase in unemployment is expected
to be higher in Canada with a 1-percentage-point increase; the United Kingdom, 0.9 percentage points; and the United States, 0.2 percentage points. “With wage growth slowing [in the United States], savings accumulated during the pandemic running out, and the Federal Reserve maintaining tight monetary policy, growth is expected to slow in the second half of 2023 and in 2024,” IMF said in its report. “The unemployment rate is forecast to rise from 3.6 percent in the second quarter of 2023 to a peak of 4 percent by the last quarter of 2024—a lower peak than previously projected [5.2 percent
in the April 2023 WEO and 5.6 percent at the time of the October 2022 WEO], consistent with a softer landing than earlier expected for the US economy,” it added. Philippine Statistics Authority (PSA) data showed the country’s unemployment rate slowed to 4.4 percent in August from the 4.8 percent in July 2023 and 5.3 percent in August 2022. The PSA said there were 2.21 million unemployed Filipinos in August. This represented a decrease of 468,000 from August 2022 and 60,000 decline from July 2023. See “IMF,” A2
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
Wednesday, October 11, 2023 Vol. 18 No. 359
BSP: JAN-JULY FDI DIPS 14.7% ON SLOW GROWTH n
P25.00 nationwide | 2 sections 26 pages | 7 DAYS A WEEK
By Cai U. Ordinario
PSA: Trade gap shrinks in August to $4.13B
@caiordinario
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EARS that global economic growth will slow spooked foreign investors this year, causing the country’s Foreign Direct Investments (FDIs) to contract 14.7 percent between January and July 2023 despite the growth in FDIs in July, the Bangko Sentral ng Pilipinas (BSP) said. Data showed FDIs settled at $4.7 billion, slower than the $5.5 billion in the same period last year. “FDI declined amid concerns over slowing global growth,” BSP said in a statement released on Tuesday. In July, FDIs reached $753 million, higher by 35.7 percent than the $555 million recorded net inflows in the same month last year. BSP traced the growth in FDI to the 108.4-percent increase in nonresidents’ net investments in debt instruments to $575 million in July 2023 from $276 million in July 2022. This, the central bank said, more than offset the decrease in nonresidents’ net investments in equity capital other than reinvestment of earnings by 52.6 percent to $65 million from $137 million; and their reinvestment of earnings by 20.1 percent to $114 million from $142 million. “By country of source, equity capital placements during the month came mostly from Japan, the United States and Singapore. Said investments were channeled primarily to the manufacturing; real estate; and financial and insurance industries,” BSP said. The BSP explained that statistics on FDI are compiled based on the Balance of Payments and International Investment Position Manual, 6th Edition (BPM6). FDI includes investments by a nonresident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investments made by a nonresident subsidiary/associate in its resident direct investor. FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
Israel-Hamas
IN an economic note, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said
By Andrea E. San Juan @andreasanjuan
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DEADLY WAR Palestinians inspect the rubble of the Yassin Mosque destroyed after it was hit by an Israeli airstrike at Shati refugee camp in Gaza City, early Monday, October 9, 2023. Israeli warplanes pounded downtown Gaza City, home to Hamas’s centers of government, with relentless bombardments into early Tuesday, after Israel’s prime minister vowed retaliation against the Islamic militant group that would “reverberate for generations.” The 4-day-old war has already claimed at least 1,600 lives, as Israel saw gun battles in the streets of its own towns for the first time in decades and neighborhoods in Gaza were reduced to rubble. Hamas also escalated the conflict, pledging to kill captured Israelis if strikes targeted civilians without warning. Story in World, A15. AP/ADEL HANA
HE countr y’s trade deficit in August narrowed to $4.13 bi l l ion, f rom the previous year’s $6.01 billion, according to the latest data from the Philippine Statistics Authority (PSA). Figures from the PSA showed that the trade gap shrank as exports during the month grew by 4.2 percent while import payments contracted by 13.1 percent. Export sales in August reached $6.7 billion, higher than last year’s $6.43 billion. “The commodity group with the highest annual increase in the value of exports in August 2023 was electronic products with $221.73 million,” the PSA said. “This was followed by cathodes and sections of cathodes, of refined copper with an annual increase of $127.92 million and gold See “PSA,” A2
GROUP FLAGS UNTESTED PORK IMPORTS RISK
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HE “unlimited entry” of “untested imported pork” at the port of first entry will continue to pose difficulties to the local hog sector, according to the Samahang Industriya ng Agrikultura (Sinag). T he far mers’ group also accused the Department of Agriculture (DA) of having “a continuing bias” for pork imports. “[They removed] insurance and compensation for local hog raisers while [DA] pushed for the tariff reduction of imports that remain untested for African swine fever [ASF],” Jayson Cainglet, Sinag executive director, said in a statement.
The group said the government shou ld impose f irstborder protection measures to protect the domestic hog population from ASF, which has devastated a number of farms in the Philippines. “The ASF is a global phenomenon, and yet the impact and devastation is longer and more destructive in our country. This is so because we continue to be the only country without first-border inspection facilities,” it said. “It will not matter if we impose the strictest movement protocols and biosecurity measures for local hog raisers and in the transport of live hogs, but continue to have unlimited
entry of untested imported pork at the port of first entry,” the group added. It noted that local producers are bearing the cost of increased biosecurity at the farm level, continued regular testing of pigs for ASF and related diseases, stricted ordinances on pig movement yet there is no inspection of imported pork.
First case in Oriental Mindoro
THE group issued the statement after the local government of Oriental Mindoro said Monday it detected the first ASF cases in the province. See “Pork,” A2
See “BSP,” A2
PESO EXCHANGE RATES n US 56.8760 n JAPAN 0.3829 n UK 69.6333 n HK 7.2647 n CHINA 7.7982 n SINGAPORE 41.6521 n AUSTRALIA 36.4461 n EU 60.1066 n KOREA 0.0423 n SAUDI ARABIA 15.1637 Source:
BSP (10 October 2023)