Search for:

NEDA sees nickel resources as key to green transition

THE PHILIPPINES needs to better exploit its nickel resources to advance its transition to green industries, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.

“The Philippines could also leverage its favorable position in the green metals industry regarding the green transition. The country is a top supplier of nickel, which is integral in manufacturing electric vehicle batteries,” he said in a pre-recorded speech at a Philippine Institute for Development Studies conference.

The Mines and Geosciences Bureau reported that metal output grew 8.06% by value in the first half.

Nickel ore and nickel byproducts generated P57.32 billion, accounting for almost half or 46.57% of the industry’s total.

The Philippines “is also one of the top cobalt producers in the world and possesses a steady supply of copper,” he added.

In the first half, copper output rose 6% to 133,072 dry metric tons.

Mr. Balisacan said going green and digital will be an “integral strategy” for the economy.

“The challenge now lies in simultaneously harnessing the green transition and digitalization for sustainable development. This process, called ‘twin transition’ or ‘dual transformation,’ entails the integration of digital technologies and the adoption of green processes for sustainability,” Mr. Balisacan said.

Between 1990 and 2018, global greenhouse gas emissions more than doubled in the Asia-Pacific region, he said.

“Digitalization and a green transition are interconnected because digitalization plays a significant role in accelerating such a transition and mitigating the effects of climate change,” he added.

Citing the World Economic Forum, digital solutions could “reduce global emissions by 20 percent by 2050.”

Mr. Balisacan said that the digital economy has “contributed significantly to the country’s income in the last five years.”

The digital economy’s gross value added was about 9 to 10% of gross domestic product.

“The sector is also an important source of jobs for Filipinos, constituting around 12-13% of the country’s workforce,” he said.

“Digitally deliverable services accounted for 77.8% of the country’s services exports and 54% of services imports in 2021,” he added. — Luisa Maria Jacinta C. Jocson

#NEDA #sees #nickel #resources #key #green #transition

Remolona sees no need for rate hike if there are no new supply shocks

Remolona sees no need for rate hike if there are no new supply shocks

By Keisha B. Ta-asan,  Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) does not see the need to resume monetary tightening if there are no more supply shocks such as those that fueled the uptick in August inflation.

BSP Governor Eli M. Remolona, Jr. told reporters on Thursday that the acceleration in August inflation was caused by supply shocks in food and fuel, which dissipate “fairly quickly.”

“If that’s all there is, if there are no further supply shocks beyond that uptick in August, then it won’t be necessary to hike the policy rate,” he said in a press briefing during the Alliance for Financial Inclusion (AFI) Global Policy Forum. “It won’t justify an easing, (but) it won’t be necessary to raise the policy rate.”

The BSP has kept its key policy rate at a near 16-year high of 6.25% for the last three meetings. It has hiked borrowing costs by 425 basis points (bps) from May 2022 to March 2023.

Headline inflation quickened for the first time in seven months in August, hitting an annual 5.3%. It marked the 17th consecutive month that inflation surpassed the BSP’s 2-4% target range. Inflation averaged 6.6% in the eight-month period.

“I think we should hit the (2-4%) target range by October if there are no further supply shocks. But hitting the target range is not enough. We want to be comfortably within the target range for the year,” Mr. Remolona said.

The BSP projects inflation to hit 5.6% in 2023, before easing within the target to 3.3% in 2024 and 3.5% in 2025.   

Makoto Tsuchiya, assistant economist from Oxford Economics Japan, said the Philippine central bank is expected to maintain its pause despite the quicker inflation in August.

“The central bank is likely to see through the transitory rise in prices. Inflation is still too high to pivot to easing, but the weakening growth picture means a hike is also undesirable,” he said.

Mr. Tsuchiya said inflation could settle within the 2-4% target range by the end of the year, bringing the full-year average to 5.8%. This will allow the Monetary Board to start cutting rates in the first quarter of 2024, he added.

Security Bank Corp. Chief Economist Robert Dan J. Roces in a note said the central bank will consider inflation, economic growth, and other external factors at next week’s policy-setting meeting.

“The recent uptick in the August inflation alone is unlikely to prompt the BSP to resume tightening, recognizing the supply-side nature of the uptick and the fact that there would only be so much that monetary policy can do in such a situation, which requires fiscal complement,” he said.   

Mr. Roces said the BSP will likely keep interest rates unchanged on Sept. 21.   

Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila, also expects the BSP to keep rates untouched at its next meeting.

“We believe the hurdle for additional rate hikes will be quite high given the glaring slowdown in growth momentum. BSP admits that tightening efforts have yet to be fully felt with the lagged impact still feeding through to bank lending,” Mr. Mapa said.   

The Philippine economy expanded by 4.3% in the second quarter, the slowest in two years. This was slower than the 6.4% growth in the first quarter and 7.5% in the same period last year. For the first half, economic growth averaged 5.3%, lower than the government’s 6-7% target. 

Mr. Mapa noted recent price shocks to inflation are supply side in nature and is best dealt with non-monetary measures.   

“BSP will only hike should inflation expectations become disanchored or to steady the currency,” he said, adding that the Philippine central bank will likely consider the policy decision of the US Federal Reserve.   

The Federal Open Market Committee is scheduled to meet on Sept. 19 and 20.

The Monetary Board will be having its sixth policy review of the year on Sept. 21.

Mr. Remolona told reporters that the new Monetary Board members will be participating in next week’s meeting.

National Treasurer Rosalia V. de Leon and former Finance undersecretary Romeo L. Bernardo were recently appointed as the new members of the policy-making body of the BSP.

#Remolona #sees #rate #hike #supply #shocks

PEZA sees trade deal helping South Korea climb FDI rankings

THE Philippine Economic Zone Authority (PEZA) said it expects South Korea to become a top-four source of foreign direct investment (FDI) after the recently signed free trade agreement (FTA).

“If they are currently number five right now, they might be number four,” PEZA Director General Tereso O. Panga said on the sidelines of a Philippine Information Agency briefing on Friday.

“If you look at the numbers, from January to September we saw a strong increase in Korean investment,” he said.

PEZA estimates that South Korean FDI in the January-Sept. 7 period was P1.41 billion.

Japan topped the list with P22.61 billion approved investments, followed by Singapore (P15.4 billion), the Cayman Islands (P11.63 billion) and the UK (P2.75 billion).

Mr. Panga said the FTA with South Korea is expected to drive increased FDI in electronics, agro-processing, renewable energy, automotive, and frontier technology.

Trade Undersecretary and Board of Investments managing head Ceferino S. Rodolfo said that the FTA, signed on Thursday, will correct tariff disadvantages hindering major Philippine exports to South Korea.

The Philippines was able to secure tariff elimination on 1,531 lines of agricultural goods, of which 1,417 lines will be removed upon entry into force (EIF) of the bilateral FTA.

Bananas, which are currently charged a 30% tariff, are set to go to zero tariffs over five years, while tariffs on processed pineapples, which are currently charged 36%, will obtain tariff elimination in seven years.

For industrial goods, the FTA led to tariff elimination for 9,909 lines, of which 9,747 lines are set for tariff elimination upon EIF.

Ateneo de Manila economics professor Leonardo A. Lanzona said in an e-mail that the FTA will likely lead to large domestic companies forging tie-ups with their Korean counterparts.

“It is crucial then also that the micro, small, and medium enterprises (MSMEs) are made to link with the domestic companies that are going to be tied to the multinational Korean companies,” Mr. Lanzona said.

“(The Korea FTA) is a welcome development. The more free trade agreements there are, the better,” he said.

“To maximize the benefits from these FTAs, we need to support more MSMEs and upgrade the skills of the workers to give them opportunities to participate in these activities,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the FTA will boost trade and FDI in the Philippines.

The Philippines can be positioned as “an alternative manufacturing hub as well as hedge (against disruptions of) the global supply chain for the international operations of South Korean global companies,” he said.

In turn, the FTA could also encourage the hiring of Filipino workers in South Korea, in view of improved economic ties, Mr. Ricafort said.

“Thus, the FTA will boost gross domestic product growth in view of the increase in external trade and investment,” he said.

He added that the agreement may also boost tourism from South Korea, already a leading source of visitors for the Philippines.

However, Ateneo’s Mr. Lanzona cited the need to amend the Constitution with the expansion of FDI to more industries.

“The Constitutional provision that limits foreign ownership of firms to 40% needs to be revised.  Greater flexibility in our trade agreements is needed as long as greater production with more and better jobs are achieved,” he said. — Justine Irish D. Tabile

#PEZA #sees #trade #deal #helping #South #Korea #climb #FDI #rankings

Maynilad sees ‘optimal’ service after maintenance plan

MAYNILAD Water Services, Inc. is expecting optimal water supply to its customers in Metro Manila after the maintenance activities in its treatment plants.

“After the maintenance program, we can ensure sustained optimal performance from our treatment plants,” Maynilad Corporate Communications Head Jennifer C. Rufo said in a Viber message.

According to Ms. Rufo, the first phase of the maintenance program in its treatment plants in Putatan, Muntinlupa City went well last month.

In August, the west zone water concessionaire implemented a plant shutdown from Aug. 21-22 as part of the first phase of the maintenance activities. This involves the repair of the leakage in the inlet pipe, which carries water to the reservoir.

“We completed all of the planned repair and maintenance works early, so the water service to affected customers actually resumed earlier than the scheduled interruption,” she said.

Maynilad is now in the process of planning for the second phase of the maintenance program, which is set for this month. The major activities include the replacement of several valves and electrical cables, Ms. Rufo said.

Maynilad has two treatment plants in Muntinlupa that provide 300 million liters per day (MLD) of water supply for around 1.7 million customers in the south.

Last month, the company announced that the construction of its new water treatment plant in the city was 80% complete.

The new treatment plant will be the third facility to tap Laguna Lake as an alternative source of water to the Angat Dam. It is expected to produce 50 MLD of additional water by the end of the year.

Asked to comment on the increasing water level of Angat Dam, Ms. Rufo said that Maynilad keeps track of its water level. 

“We’re also closely monitoring Angat Dam water levels, especially since it is still our primary raw water source. We want it to be at ideal levels so that we will have enough supply for sharing among the dam’s various users,” she said.

As of 6:00 a.m. on Thursday, the water level of Angat Dam was at 203.84 meters, higher than the 203.56 meters seen on Wednesday.

The Metropolitan Waterworks and Sewerage System earlier said that the National Water Resources Board approved its proposed water allocation of 50 cubic meters per second.

Maynilad serves Manila, except for portions of San Andres and Sta. Ana, and operates in Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, and Malabon. It also supplies the cities of Cavite, Bacoor, and Imus, and the towns of Kawit, Noveleta, and Rosario, all in Cavite province.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

#Maynilad #sees #optimal #service #maintenance #plan

BSP sees within-target inflation by Q1

BSP sees within-target inflation by Q1

INFLATION is now likely to land within the Bangko Sentral ng Pilipinas’ (BSP) target by the first quarter of 2024, not the fourth quarter of this year, BSP Governor Eli M. Remolona, Jr. said.

“We’re not quite clear about the fourth quarter (of 2023) yet. We’re still looking at the way our tightening measures have been working their way through the economy on the demand side. We’re not sure about the fourth quarter because if there are further supply shocks, then the numbers will be different,” Mr. Remolona said in an interview with BusinessWorld Editor-in-Chief Wilfredo G. Reyes on Sept. 4, a day before the government reported a faster-than-expected 5.3% inflation for August.

BusinessWorld’s one-on-one interview with Mr. Remolona will be streamed on BusinessWorld and The Philippine Star’s Facebook pages, as well as the BusinessWorldTV YouTube page, at 11 a.m. today (Sept. 8).

“My best guess is it will be the first quarter of 2024, before we get into the (2-4%) target range,” Mr. Remolona said.

The BSP will likely upwardly revise its full-year forecast of 5.6% for 2023 at the next policy meeting on Sept. 21, he said.

Inflation unexpectedly accelerated for the first time in seven months in August, as food and transport costs rose. The consumer price index (CPI) quickened to 5.3% in August from 4.7% in July, above the 4.9% median estimate in a BusinessWorld poll conducted last week.

August marked the 17th consecutive month that inflation surpassed the central bank’s 2-4% target range. 

For the first eight months of 2023, inflation averaged 6.6%.

Mr. Remolona said the central bank still has space for further tightening.

“If inflation continues to be an issue, then we could raise policy rate from 6.25% to a higher policy rate. If we think the tightening is already very effective, then we wouldn’t need to increase further,” he said.

The BSP has kept its key policy rate at a near 16-year high of 6.25% for the last three meetings. It has hiked benchmark interest rates by 425 basis points (bps) from May 2022 to March 2023 to curb inflation.

Aside from inflation, Mr. Remolona said the Monetary Board will also be taking into account recent economic output data at its next policy-setting meeting on Sept. 21.

“That (output data) for us is an indicator of how much we’ve done on the demand side to compensate for the pressures from the supply side,” he said.

“We could still hike. We have a sense of how high we can hike before growth becomes an issue, we compute what we call the natural rate and we’re still below the natural rate. We have room to hike because of our calculations.”

Mr. Remolona said the Philippine economy can still grow by 6% this year, the lower end of the 6-7% growth target for 2023, if the government ramps up spending.

Gross domestic product grew by a slower-than-expected 4.3% in the second quarter, partly due to government underspending. This brought the six-month average to 5.3%, still below the government’s 6-7% target this year.

Meanwhile, Mr. Remolona said the US Federal Reserve is still hawkish, but the Jackson Hole speech by Chairman Jerome H. Powell in August had more uncertainty compared with the previous Federal Open Market Committee (FOMC) statement.

“But I think, in my opinion, they’re slightly behind the curve in terms of tightening. I think we’re closer to being on track in terms of tightening,” he added. 

The US Federal Reserve hiked borrowing costs by 25 bps at its meeting in July. This brought the Fed funds rate to 5.25-5.5%, its highest level in 22 years.

The next meeting of the FOMC is scheduled for Sept. 19-20.

Mr. Remolona, however, noted that several financial crises occurred after the Fed raised its policy rate “very sharply.”

“In November 1994 for example, for the first time the FOMC raised its policy rate by 75 bps, within a few months we saw the Tequila crisis. And within the two years we saw the Asian (financial) crisis,” he said.

“This time, the FOMC has been even more aggressive than it was in 1994, so this makes me worried about what might happen down the road,” he said.

Earlier this year, markets around the world were rattled by the back-to-back collapse of Silicon Valley Bank (SVB) and New York’s Signature Bank. A crisis of confidence also hit Credit Suisse, which resulted in a state-led rescue by its Swiss rival UBS Group. 

“We already saw SVB, we already saw Credit Suisse, I’m concerned that there may be further financial accidents in the future. I think what high levels of interest rates do is they make the floor more slippery for banks and so they make accidents, or slips, more likely to happen,” Mr. Remolona added. — Keisha B. Ta-asan

#BSP #sees #withintarget #inflation

Sugar regulator sees rise in production assuming mild El Niño

Sugar regulator sees rise in production assuming mild El Niño

SUGAR production in 2023 is expected to rise slightly, on the assumption that the impact of El Niño isn’t too severe, the Sugar Regulatory Administration (SRA) said.

At an agriculture forum organized by the European Chamber of Commerce on Thursday, SRA Administrator Pablo Luis S. Azcona said sugar production could increase by 50 thousand metric tons (MT).

Mr. Azcona added that the total area planted to sugarcane is estimated to rise by at least 3,000 hectares.

“We have a slight increase in area despite the fact that (output fell) in Batangas because of the closure of the mill,” he said.

In the last crop year, sugar production declined to about 1.8 million MT from the 2.1 million MT previously, due to a number of typhoons affecting cane production, he said.

“For the initial balance of inventory for this crop year, locally produced sugar posted a 450% increase (from a year earlier), he added.

To date, the stock of domestic sugar is at 150 thousand MT, against 27 thousand MT a year earlier.

“With the harvest season having begun, we will see an increase in raw sugar stock,” he said.

The sugar crop season typically begins in September.

A severe El Niño, however, could result in a 10% to 15% decline in output.

“(It) all depends on the El Niño’s severity.” Mr. Azcona said, with the worst of the weather phenomenon, which can cause dry spells, expected to manifest starting around November.

The government weather service expects El Niño to strengthen towards late 2021, persisting until the first quarter of 2024.

“If it’s not so severe, we might even see an increase (because of the timing of) harvest season. Drier weather results in more bags of sugar per ton of sugarcane,” he added. — Adrian H. Halili

#Sugar #regulator #sees #rise #production #assuming #mild #Niño

Converge sees enterprise unit’s growth

LISTED Converge ICT Solutions, Inc. is seeing sustained growth in its enterprise business after expanding into new areas and launching products and services catered to local businesses. 

In a statement on Tuesday, Converge said it had seen growth for its unit Converge Business as revenues surged 26% to P2.5 billion in the first half as supported by its expansion efforts. 

“We are pleased to see an upswing in our enterprise unit, Converge Business, and we’re bound to see more growth as we introduce new products and services that go beyond connectivity,” Converge Chief Operations Officer Jesus C. Romero said. 

“Our expansion into key tourism destinations like Boracay and Palawan will also bolster opportunities to tap both small and large companies in these areas,” he added.

Leonardo Baniqued, Converge’s assistant vice-president and head of innovation and product management, said in a presentation at a recent conference that the company could enable emerging businesses since its digital infrastructure is laid out across the country. 

“We have the broadest fiber network in the country and this means that our network is already available in cities that are just planning to shift to digital or even cities that are just being planned. Converge is there from the start,” Mr. Baniqued said.

One of the company’s product offerings to businesses is its flexiBIZ solution, which is a fiber connection tailored for small and medium enterprises at doubled speeds of up to 300 Mbps in daytime or peak hours.

Converge also offers value-added services such as its workplace automated HR and payroll solution, and hotel management software for big and small companies. 

Another offering is SweldoMo, which is an automated human resources, payroll, and timekeeping solution. 

Meanwhile, Mr. Romero said Converge is expecting higher revenues after its recent foray into the international wholesale market.

He added that investments in additional capacities for upcoming international cable systems and data centers have prepared the company to serve more global firms and the wholesale market. 

“We have already set up a Singapore office which is now in full operation with the hiring of a general sales manager,” Mr. Romero said.

On Tuesday, shares of Converge at the local bourse rose 22 centavos or 2.72% to close at P8.30 apiece. — Revin Mikhael D. Ochave

#Converge #sees #enterprise #units #growth