IMF: Price spikes, $ pressure imperil growth
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THE WORLD ›› A13
RUSSIA UNLEASHES BIGGEST ATTACKS IN UKRAINE IN MONTHS
S currencies continue to tumble against the US dollar and commodity prices surge, economies such as the Philippines are expected to suffer slower growth rates starting next year, according to the International Monetary Fund (IMF). In its Global Economic Prospects report, the IMF said Philippine GDP growth is expected to average 6.5 percent this year and slow to 5 percent next year. Growth is also expected to average 6 percent by 2027.
Inflation, meanwhile, is expected to average 5.3 percent this year; 4.3 percent in 2023; and 3 percent in 2027. At the end of the year, inflation is expected to reach 5.8 percent while the end of 2023 will still see higher than expected inflation of 3.7 percent. “For the Association of Southeast Asian Nations [ASEAN]-5 economies, projected growth in 2023 is revised down to reflect mainly less favorable external conditions, with slower growth
in major trading partners such as China, the euro area, and the US,” the report stated. “[The forecast also reflects] the decline in household purchasing power from higher food and energy prices; and in most cases, more rapid monetary policy tightening to bring inflation back to target,” it added. The IMF also expects growth to slow and inflation to rise globally. The world economy is expected to average 3.2 percent this year and 2.7 percent next year.
Noting rising commodity prices, the IMF expects global inflation to peak at 9.5 percent this year before decelerating to 4.1 percent by 2024. However, there are downside risks to these forecasts, IMF said, listing these as: policy miscalibration of monetary, fiscal, and financial policy which could increase uncertainty and make the global economy more fragile. See “IMF,” A2
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
Wednesday, October 12, 2022 Vol. 17 No. 369
P25.00 nationwide | 2 sections 24 pages | 7 DAYS A WEEK
TRADE GAP WIDENS 81% TO $6B IN AUGUST–PSA n
Asean trade unions flag PHL labor issues; ILO team due By Samuel P. Medenilla @sam_medenilla
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THE PAIN GOES ON Transport groups stage a protest in front of a gas station in Quezon City on Tuesday (October 11) as oil companies raised prices by as much as P6.85 per liter for diesel, and gasoline, by P1.20 per liter. As most public utility vehicles use diesel, the price spike forced many buses and jeepneys off the road, leaving commuters scrambling for scarce transportation. The price hikes were due primarily to the announcement of a major cut in output by the Organization of the Petroleum Exporting Countries and Russia last week. Related story in A5 News, “Grant of subsidy amid latest fuel price increase pressed.” NONOY LACZA By Cai U. Ordinario
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@caiordinario
HE country’s trade deficit is expected to ease starting next year, but it may not be the news that would be welcomed by millions of Filipinos, according to a local economist.
On Tuesday, the Philippine Statistics Authority (PSA) reported that the country’s trade deficit widened 81 percent to $6 billion in August 2022 from the $3.31 billion posted in August 2021. This was the highest increase in the deficit since June 2021 when it rose 133.9 percent. This was largely due to the 2-percent contraction in the country’s export earnings and 26-percent jump in import payments in August.
“In the early months of 2023, these deficits will no longer be sustainable and decline not because we are able to produce more exports but because we can no longer afford more imports,” Ateneobased trade and labor economist Leonardo A. Lanzona Jr. told the BusinessMirror. “This means that the country will face greater hardships in the See “PSA,” A2
RADE unions in Southeast Asia flagged the Philippines for its alleged rampant human and labor rights violations. A joint resolution was issued by 30 labor representatives from 10 countries in the conclusion of the Southeast Asia conference on Trade Union Strategies for Resilience and Renewal post-Covid 19 organized by the International Labor Organization (ILO) last Tuesday. The representatives came from Cambodia,Indonesia,LaoPDR,Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor Leste and Vietnam. The group stressed the importance of “respecting freedom of association and right to bargain collectively in countries where workers do not enjoy basic human and workers’ rights such as the Philippines” to foster a sustainable recovery from the pandemic. They also called for the restoration of the democracy in Myanmar after its military took over its government in February 2021. Also discussed in the resolution would be the important role of labor participation in the crafting of pandemic or disaster recovery measures to ensure such policies will translate to decent work.
Additional pressure
K ILUSANG Mayo Uno (K MU)
Secretary-General Jerome Adonis, one of the participants in the two-day ILO forum, said the inclusion of the country in the resolution should be a “wake up” call for the country. “The government of the Philippines should be concerned because the country is now marked for violating labor rights, particularly freedom of association,” Adonis told BusinessMirror in an interview. “This should be an additional pressure to the government of the Philippines to stop the attacks against workers,” he added. Last Monday, KMU condemned the Philippine National Police for arresting two of its leaders supposedly without due process and using trumped up charges. KMU and other labor groups said they will ask the ILO High Level Mission to investigate the case.
ILO confirmation
ILO Bureau for Workers’ Activities (ACTRAV) Director Maria Helena Andre finally confirmed on Tuesday that the Mission is scheduled to arrive in January 2023. She said the mission will look into incidents of attacks against t rade u n ion ists, wh ic h were raised by local labor groups before the ILO’s Committee of Experts on the Application of Conventions and Recommendation in 2019. See “ILO,” A2
‘INEQUALITY WIDENED MOST IN PHL IN PANDEMIC’
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HE gap between the rich and the poor widened the most in the Philippines during the pandemic compared to other countries around the world, according to the World Bank Group. In its Poverty and Shared Prosperity 2022 report, the World Bank Group said the Gini index posted the largest increase in the Philippines and the largest decrease in Armenia. The pandemic-induced difference in gini index in the country may have increased by over 10 percentage points in the country in 2020. This
is calculated as the difference between the nowcast with the pandemic and the nowcast without the pandemic. “Some of the largest projected changes in inequality were seen among middle-income countries such as Brazil. The poorest countries were less likely to experience a meaningful decrease in inequality,” the report said. “The largest increase in the Gini index was observed in the Philippines, while the largest decrease occurred in Armenia,” it added. The report noted that global inequality worsened during the
pandemic and reversed the prepandemic trend in narrowing the gap between the rich and the poor. “The Covid-19 pandemic appears to have caused the largest single-year increase in global inequality since World War II. Findings from the simulated global income distribution suggest that the global Gini index increased by a little more than 0.5 points during the pandemic, from a 2019 value of 62 to an estimated 62.6 in 2020,” the report said. Part of the reason for this is the decline in jobs in the country. At the height of the
lockdow ns, unemploy ment jumped 17.6 percent and underemployment reached 18.9 percent. Citing data from the Asian Development Bank (ADB), the World Bank Group said the job losses in the pandemic had a gender dimension, with more women losing their jobs. “Young, female, less skilled workers suffered the brunt of the job losses in Indonesia, Malaysia, the Philippines, Thailand and Vietnam in the second quarter of 2020,” the report stated. See “Inequality,” A2
PESO EXCHANGE RATES n US 58.9940 n JAPAN 0.4049 n UK 65.2474 n HK 7.5154 n CHINA 8.2462 n SINGAPORE 41.0536 n AUSTRALIA 37.1308 n EU 57.2596 n KOREA 0.0413 n SAUDI ARABIA 15.6982 Source:
BSP (11 October 2022)