ADB lowers growth forecast on inflation hike
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HE recent spike in inflation prompted the Asian Development Bank (ADB) to revise its growth forecast for the Philippines this year. In its latest Asian Development Outlook (ADO) report, ADB said the Philippine GDP growth is expected to average 5.7 percent, three percentage points lower than its estimate in April. Data from the Philippine Statistics Authority (PSA) showed inflation averaged 5.3 percent in August on the back of higher rice and vegetable prices. (Full story here: https://
businessmirror.com.ph/2023/09/06/ august-inflation-swells-to-5-3-onprice-spikes/)
“Domestic demand and public investment are expected to contin-
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ue to support growth. As in ADO April 2023, inflationary pressures are projected to moderate next year and the current account deficit to narrow,” ADB’s report stated. However, the Manila-based multilateral bank retained its April growth forecast for the country’s GDP growth at 6.2 percent in 2024. ADB also retained its inflation forecast at 6.2 percent in 2023 and 4 percent in 2024. ADB said the downside risks to its outlook for the Philippine economy may come from global headwinds such as geopolitical tensions and a sharper-than-expected slowdown in major advanced economies. Other risks, ADB said, include possible severe weather distur-
bances including the El Niño dry weather phenomenon, and pressures from higher global commodity prices. ADB also said second-round effects from higher transport fares and minimum wage hikes could keep inflation high. “The Philippines’ growth story remains strong despite an expected moderation in 2023. Public investment and private spending fueled by the low unemployment rate, sustained increase in remittances from Filipinos overseas, and buoyant services including tourism will support growth,” said ADB Philippines Country Director Pavit Ramachandran. “The government’s large infrastructure projects should stimulate consump-
tion, boost jobs, and spur more investment.” ADB noted that the government met its target spending on infrastructure of 5.3 percent of GDP in the first half of the year and is expected to maintain this level of investment with several big-ticket projects underway. The bank is helping finance some of these major, transformative projects such as the MalolosClark Railway Project, South Commuter Railway Project, Improving Growth Corridors in Mindanao Road Sector Project, and Integrated Flood Resilience and Adaptation Project—Phase 1 approved last week. S “ADB,” A
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AUGUST BOP WIDENS TO ■
$57M ON DEBT PAYMENTS T B C U. O @caiordinario
HE country continued to post a Balance of Payments (BOP) deficit for the fifth consecutive month in August 2023, according to the Bangko Sentral ng Pilipinas (BSP).
The country’s overall BOP deficit reached $57 million in August, wider than the $53 million posted in July, but narrower than the $572 million recorded in the same month last year. “The BOP deficit in August 2023 reflected net outflows arising mainly from the National Government’s [NG] payments of its foreign currency debt obligations,” BSP said. However, BSP said that the wider deficit in August did not prevent the country from posting a BOP surplus in the January to August period this year. Based on the data, the country’s cumulative BOP position was at a surplus of $2.1 billion in the eight-month period. This was a reversal from the $5.5-billion deficit recorded in the same period a year ago. “This development reflected mainly the improvement in the balance of trade and the sustained net inflows from personal remittances, trade in services, and foreign borrowings by the NG,” BSP said. Last week, the Philippine Statistics Authority (PSA) said the country’s trade deficit for January to July 2023 reached $32.2 billion. Based on the preliminary International Merchandise Trade Statistics data, this was a narrower trade deficit than the $35.8-billion deficit posted in the same period last year. Meanwhile, with the latest BOP data, the country’s gross international reserves (GIR) level decreased to $99.6 billion as of endAugust 2023 from $100 billion as of end-July 2023. The latest GIR level represents a more-than-adequate external C A
AGAINST the backdrop of rising fuel prices that have significantly impacted Filipino households in recent weeks, a pedestrian, donning a face mask as a lingering symbol of the Covid-19 pandemic, walks past the vibrant and oversized Christmas ornaments adorning the lobby of a Mandaluyong City mall along Edsa. These decorations exemplify the holiday spirit and resilience, as the nation cautiously approaches the Christmas season amid serious economic challenges. NONOY LACZA
MORE EUROPEAN TOURISTS SEEN WITH EU-PHL FREE TRADE PACT B M. S F. A
@akosistellaBM Special to the BM
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HE Europeans are coming! This was the assurance made by Romania’s Ambassador to the Philippines Raduta Dana Matache on Wednesday at a European Chamber of Commerce of the Philippines (ECCP) luncheon where tourism prospects in the Philippines were discussed. “We hope in a few months there will be a free trade agreement [FTA] between the Philippines and the European Union [EU]. This will be an engine for business coming here. Business also attracts tourists. So I believe that there will be a lot more European tourists in the Philippines,” she said at the event’s open forum. Talks have resumed between the Philippines and the EU for an FTA, which started in 2015 under
IT-BPM jobs on track to reach 1.7M by yearend B A E. S J @andreasanjuan
T TOURISM Undersecretary for Finance and Administration Shereen Gail Yu-Pamintuan (center) invites ambassadors and business executives from Europe to send more tourists to the Philippines at a luncheon meeting of the European Chamber of Commerce of the Philippines. Guest panelists are Samuel David, IATA Country Manager for the Philippines (right) and Cenelyn Manguilimotan-Dalnay, COO Parklane Hotels and Resorts (on screen). Benito Bengzon Jr., Executive Director of the Philippine Hotel Owners Association (left) hosts and moderates the event. PHOTO FROM ECCP FB PAGE
the administration of President Aquino, but ground to a halt under the term of President Duterte. The EU is the Philippines’s fourth largest trade partner, with bilateral trade having reached US$19 billion in 2022.
DOT Undersecretary for Finance Shereen Yu-Pamintuan, a key speaker at the ECCP meeting, said the agency recognizes the importance of Europe as a major C A
HE IT-BPM industry is on track to reach 1.7 million full-time employees (FTEs) by the end of 2023, despite the industry having “more demanding” job requirements for job seekers and graduates, IT and Business Process Association of the Philippines (IBPAP) President Jack Madrid said on Wednesday. “We started with 2023 with 1.57 million and I would say that we are on track to touch 1.7 million by the end of 2023,” Madrid said in a televised interview on Wednesday. Based on the IT-BPM Roadmap 2028, the industry is eyeing to provide jobs to 2.5 million full-time employees by the end
of 2028. By 2023, the IT-BPM industry expects to reach 1.7 FTEs and US$35.9 billion in revenue. With the industry’s goal of attaining the said employment target for the year, however, Madrid explained the issue on demand-supply talent gap that the IT-BPM currently faces. “The reason for the gap is that there really is a very big demand curve, that’s one. Second, the supply of employable talents in this increasingly competitive job market is not quite enough. And the second reason that I want to cite is that while we have almost 800,000 college graduates, there is a skills gap that has resulted in a job skills mismatch,” the IBPAP head explained. S “IT-BPM,” A
PESO EXCHANGE RATES US 56.7700 ■ JAPAN 0.3842 ■ UK 70.3721 ■ HK 7.2599 ■ SINGAPORE 41.6355 ■ AUSTRALIA 36.6394 ■ SAUDI ARABIA 15.1362 ■ EU 60.6417 ■ KOREA 0.0428 ■ CHINA 7.7799 Source: BSP (September 20, 2023)