INFLATION, TEPID GROWTH MAY FORCE ECONOMIC MANAGERS TO CHANGE G.D.P. GOALS IN 2018 By Bernadette D. Nicolas
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@BNicolasBM
HE economic growth target for the year may be revised downward later this month following the release of the August inflation data—hitting a new nine-year high—and given the tepid growth in the gross domestic product (GDP) in the first half. Budget Secretary Benjamin E. Diokno told reporters that the Development Budget Coordination Committee (DBCC) might meet on
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the third or fourth week of September to discuss the possible revision of economic assumptions, including the inflation forecast for the year. “We will convene the DBCC and see if there is a need to reflect the new developments,” said Diokno, the DBCC chairman. Asked on the possibility of the DBCC’s revising downward the GDP target, since the first half is already below expectations, Diokno said: [The current GDP target is] 7 to 8 [percent], so the likelihood that it might
be revised below 7 [percent] is quite high.” First-quarter GDP growth rate was at 6.6 percent, below the government’s 7-8 percent target range. For the second quarter, the economy posted a GDP growth rate of 6 percent, causing disappointment to a number of Filipinos. With the first-half growth rate at an average of 6.3 percent, the economy needs to expand by 7.7 percent in the second half to meet the government’s target for the year of 7 to 8 percent. See “GDP,” A3
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Thursday, September 6, 2018 Vol. 13 No. 327
Nonmonetary options listed to fight inflation W
By Bianca Cuaresma @BcuaresmaBM & Rea Cu @ReaCuBM
HILE the Bangko Sentral ng Pilipinas (BSP) weighs the need for further monetary policy action to rein in inflation, the Economic Development Cluster (EDC) on Wednesday announced several nonmonetary measures aimed at immediately easing high consumer prices.
“An unfortunate confluence of cost-push factors continues to drive consumer price inflation in August beyond the acceptable target range. Much of it has to do with food supply shocks. Rice in particular... These warrant more decisive non-monetary measures to fully address.”—Espenilla
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@cuo_bm
ORE Filipinos may fall deeper into poverty this year, given the high commodity prices being experienced by households nationwide for the past eight months, local economists said, as the economy posted a nine-year high inflation rate on Wednesday. Data released by the Philippine Statistics Authority (PSA) showed inflation reached 6.4 percent in August 2018. This has brought the average inflation for the year to 4.8 percent. Economists believe more expensive commodities could make it more difficult for the government to meet its target of reducing poverty to 14 percent by 2022, from the 21.6 percent recorded in 2015. “Higher prices, particularly higher food prices—as what we are seeing now—hurts the poor households more since 60 percent of their budget is spent on food. During periods when inflation rates are high—example [in] 2009—poverty incidence did not decrease significantly [from 2006],” University of the Philippines School of Statistics Dean Dennis Mapa said. “The government will have a hard time achieving its commitment to significantly reduce poverty incidence—we will see the initial numbers from the 2018 FIES [Family Income and Expenditure Survey]—given the higher infla-
Labor and social rules for ‘industry 4.0’ Rene E. Ofreneo
LABOREM EXERCENS
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The EDC unveiled measures to ease high food prices after the
Y now, it is abundantly clear that the world of business is rapidly changing under the Fourth Industrial Revolution, simply referred to by human resource managers as “industry 4.0”. In turn, the way work is organized and managed is also rapidly changing.
See “Nonmonetary,” A2
Continued on A7
PHL importing 250K MT rice to pull down rising prices
The government will have a hard time achieving its commitment to significantly reduce poverty incidence— we will see the initial numbers from the 2018 FIES [Family Income and Expenditure Survey]—given the higher inflation rate.” —Dean Dennis Mapa
tion rate,” he added. The inflation rate in August was significantly higher than the government’s full-year target of 3.5 to 4.5 percent inflation. This was also higher than economists’ expectation that inflation would reach or peak at 6 percent. Mapa said urban and rural poor households, as well as near-poor households, are negatively affected because food inflation rates are high for Metro Manila at an eight month average of 6.7 percent and areas outside the National Capital Region with 5.9 percent. This is consistent with the findings of a 2008 study of Asian Development Bank (ADB) economist Hyun Son which stated that a 10-percent increase in prices of food could lead to 2.3 million poor See “Inflation,” A8
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Higher inflation seen to plunge more Pinoys into poverty this year By Cai U. Ordinario
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By Jasper Emmanuel Y. Arcalas @jearcalas
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increased. The additional employment is composed of bad-quality jobs [such as] informal sector jobs,” Fernando T. Aldaba, dean of the School of Social Science at the Ateneo de Manila University, told the BusinessMirror. “There seems to be a lot of additional service sector jobs that are of bad quality in the sense that they pay very low or arer mismatched [to the skills of workers]. They are employed physically eight hours, six days a week,” he added. By sector, PSA data showed 46.8 percent of the underemployed worked in the services sector, while 32.4 percent
ANILA will be importing an additional 250,000 metric tons (MT) of rice via open tender to beef up the National Food Authority’s (NFA) stockpile and arrest the spiking retail prices of the staple in the market. The NFA on Wednesday said the NFA Council approved half of its 500,000 MT rice-importation request last September 4. “In a meeting held at the NFA Boardroom on September 4, the Council has instructed the NFA to hold an open tender immediately for the importation of the additional rice stocks to arrive in November 2018,” the food agency said in a news release. The NFA is set to hold its open tender within the month to be able to hit the November 2018 arrival time frame, sources privy to the development told the BusinessM irror. The sources, who spoke on condition of anonymity, said importers must bring in the volume within the whole month of November. The sources said the NFAC’s marching order to the NFA is to ramp up its market participation to about 20 percent from its current rice inventory to ensure that people would not be falling in line for cheap staple. “The additional importation can increase the NFA’s active participation in the market by as much as 20 percent,” the NFA said.
See “Pinoys,” A8
See “Rice,” A2
A MAN fixes the umbrella installed in his cart filled with plastic ware—chairs, baskets and food containers—somewhere in Makati City. Economists see more people driven to low-quality jobs such as this itinerant hawker’s, as local businesses are gouged by inflation. ALYSA SALEN
More Pinoys stuck in low-quality jobs–experts
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HE country’s employment numbers may have risen on account of the increase in the number of Filipinos employed in low-quality jobs, according to local economists. Based on the results of the Labor Force Survey (LFS) released by the Philippine Statistics Authority (PSA) on Wednesday, the country’s employment rate increased to 94.6 percent, the highest in a decade, while the unemployment rate was at 5.4 percent in July. However, the country’s underemployment rate increased to 17.2 percent in July 2018, from 16.3 percent in July 2017. More than half or 52.9 percent of these workers are considered
46.8% The proportion of the underemployed who are in the services sector; 32.4 percent were in agriculture and 20.8 percent in industry
invisibly employed or those who are already working over 40 hours a week but would like more work. “This is not so good because invisible underemployment might have
n JAPAN 0.4803 n UK 68.8342 n HK 6.8199 n CHINA 7.8203 n SINGAPORE 38.9054 n AUSTRALIA 38.4185 n EU 62.0038 n SAUDI ARABIA 14.2716
Source: BSP (5 September 2018 )