BusinessMirror March 24, 2022

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‘BSP trigger-pulling rate hike may be too late’ B B C @BcuaresmaBM

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HILLARY CLINTON TESTS POSITIVE FOR COVID; BILL QUARANTINING

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PRIVATE economist said the Bangko Sentral ng Pilipinas (BSP) is likely to pull the trigger a little too late in its move to hike its accommodative policy rates this year, as inflation is quickly creeping higher in the economy recently. In an analysis published on Wednesday, ING Bank economist Nicholas Mapa said the BSP is set to “fall behind the curve” in their monetary policy normalization, as the market widely expects BSP Governor Benjamin Diokno to keep all monetary policy settings

on hold in their March meeting. In recent months, the BSP chief has been firm in his policy guidance of trying to keep rates low “for as long as possible” to help support the recovery of the economy. This is amid the recent Fed rate hike and the rising inflationary pressures coming from Russia’s invasion of Ukraine. The ING economist said this decision to remain dovish may cause the BSP to lose a grip on inflation expectations throughout the year. “BSP Governor Diokno has indicated that it need not ‘move in step’ with the Fed and its likely aggressive rate hikes, confident he can wait for the second half before

adjusting policy. However, by the second half of the year, the Fed may have hiked a cumulative 100 basis points with guidance from Jerome Powell suggesting that a 50-basis-points rate hike at the next meeting is very much in play,” Mapa said. “Should BSP opt to sit out the first half even as inflation surges past target, we could very well see BSP fall behind the curve again as they did in 2018. By then with inflation raging and with Filipinos saddled with astronomically high transport costs, BSP will be losing the most important battle of its inflation targeting mandate: the battle to anchor inflation expecta-

tions,” he added. Earlier this month, the BSP chief said rising oil prices due to Russia’s invasion of Ukraine could kick local inflation upwards 4 percent this year. This breaches their 2-4 percent annual target range for 2022. The governor said their sensitivity analysis has shown potentially elevated inflation rates for the year, with new forecasts on the table: If average world price of oil is $95 per barrel, local inflation would hit 4 percent; if it is $120 per barrel, it will be 4.4 percent. However, if the global price of oil hits S “BSP,” A

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DBM: 3-MOS’ P1,500 UCT TO BE RELEASED IN APRIL www.businessmirror.com.ph

Thursday, March 24, 2022 Vol. 17 No. 167

P.  |     | 7 DAYS A WEEK

2,500 hotel housekeepers needed ASAP in Israel

B J M N.  C @joveemarie

 B D. N

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@BNicolasBM

HE next administration will have to work with the current economic team to ensure that all subsidy programs are properly transitioned and sustained after the Duterte administration, an economist-lawmaker said on Wednesday, as the Budget department revealed plans to release three months’ worth of subsidies in one blow so people can feel their impact in this dire period.

House Committee on Ways and Means Chairman Joey Sarte Salceda said the monthly subsidies spell immediate relief for struggling Filipino households amid the pandemic and the rising oil prices. Earlier, President Duterte ordered Finance Secretary Carlos G. Dominguez III to raise the monthly amount to be given—as additional, but only temporary relief—to already existing UCT beneficiaries from P200 a month to P500. “I am certain, however, that part of the implementation will spill over to after June 2022. The next administration will have to work with the current economic team,” Salceda said. “Fiscal space will also remain a foremost concern for the next administration, especially given our pandemic-related fiscal constraints,” Salceda dded. Department of Budget and Management (DBM) OfficerIn-Charge Tina Canda said on Wednesday the government is now eyeing to release next month UCT of P1,500 that will already cover three months to help cushion the impact of soaring oil prices. She said providing P500 per month for three months to the 13 million household beneficiaries C  A

PESO EXCHANGE RATES

B M T-B @maloutalosig

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EMPTY water containers line a busy street in Tondo, Manila, a portent of a looming water shortage as state weather bureau the Philippine Atmospheric, Geophysical and Astronomical Services Administration warned on Tuesday that the water level at Angat Dam, the reservoir that supplies about 90 percent of raw water requirements for Metro Manila, has been dropping. Angat authorities said that as of Tuesday, the level still remained normal, but warned it is indeed lower than comfortable levels. NONIE REYES

SRAEL is hiring at least 2,500 Filipino hotel housekeepers, and they want them deployed as soon as possible, the Philippine Embassy in Tel-Aviv reported. “As Israel reopens its tourism industry, allows the entry of both vaccinated and unvaccinated travelers, and eases its travel and health restrictions, its hotel sector will require a full work force to cater to the expected influx of tourists to the Holy Land,” the Embassy said. In 2020, a month before the pandemic, some 4.5 million tourists all over the world came to Israel during the Holy Week. Half of these tourists were Christian pilgrims. This is the reason both Manila and Tel Aviv are working doubletime to process the papers of 500 Filipino hotel/hostel workers in the first week of April, ahead of Passover and Holy Week. Philippine Ambassador Macairog Alberto met with the Israel Hotel Association officials on March 14 and was told the hotels in Israel are ready to hire additional 800 Filipino workers, which will then be increased to 2,000 workers “at the earliest opportunity.” C  A

‘PHL DEBT NEEDS A DECADE TO CUT; TIME TO SHIFT TO GREEN GROWTH’ B C U. O @caiordinario

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ARING down the country’s pandemic debts could take a decade or more, according to a retired professor from the University of the Philippines Los Baños (UPLB). In a Freedom from Debt Coalition (FDC) forum on Wednesday, Community Legal Help and Policy Center Science Director Teodoro C. Mendoza said this takes into consideration growth rates of 5 percent to as high as 9 percent. If GDP growth is at 5 percent, the Philippines can wipe out its pan-

demic debts in 14 years. But if the economy grows at 9 percent, this will allow the country to pay it off in 10 years. “We have a comatose economy because we have a huge debt of P13 trillion which is equivalent to 68 percent of our GDP. We have a budget deficit of P1.7 trillion,” Mendoza said in the vernacular on Wednesday. Factors that would make this difficult include the devaluation of the peso. Mendoza said before the Duterte administration assumed office, the peso was at P48 to the US dollar. However, more recently, the peso

has been devalued further at P51 to the greenback. This is worrisome, Mendoza said, because for every peso devaluation suffered by the exchange rate, the country’s debt service increases by P24 billion. In this case when the peso has seen a devaluation of P3, following Mendoza’s estimates, this means the country needs to shell out an additional P72 billion to pay its debts. “Those are the initial calculations I came up with. This wasn’t discussed in any forum involving our presidentiables our candidates for vice president, including S “PHL,” A

■ US 52.4270 ■ JAPAN 0.4339 ■ UK 69.5392 ■ HK 6.6990 ■ SINGAPORE 38.6516 ■ AUSTRALIA 39.1315 ■ SAUDI ARABIA 13.9760 ■ EU 57.8322 ■ CHINA 8.2355

Source: BSP (March 23, 2022)


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