Stocks, peso fall on sluggish GDP growth

By Jenniffer B. Austria

STOCKS and the peso fell Thursday after the government reported a weaker-than-expected gross domestic product growth in the second quarter of 2023.

The 30-company Philippine Stock Exchange index lost 80.79 points, or 1.23 percent, to close at 6,449.66, while the broader all-shares index declined 34.78 points to settle at 3,445.38.

“The market fell after a surprisingly disappointing Philippine second-quarter GDP print of 4.3 percent, which was below the consensus forecast of 6 percent,” China Bank Capital managing director Juan Paolo Colet said.

PSEi August 10, 2023

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Colet said the lower growth raised investors’ concern that full year expansion would be lower than the government’s target range of 6 percent to 7 percent.

“Traders will now turn their attention to July inflation release for market direction,” Colet said.

The peso also retreated to 56.22 against the US dollar Thursday from 56.20 Wednesday following the release

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SAN FRANCISCO, United States—

Disney on Wednesday reported a loss for the most recent quarter, with the number of subscribers to its streaming service shrinking again, but a pledge to crack down on password sharing sent shares higher in after-market trades.

The falling Disney+ subscriber numbers—for the third consecutive quarter—came as a crippling writers and actors strike hits the US entertainment industry, threatening the company’s ability to produce content key to the streaming service’s appeal.

“It is my fervent hope that we quickly find solutions to the issues that have kept us apart these past few months,” chief executive Bob Iger, whose contract has been extended through 2026, said of negotiations with striking actors and writers.

“I am personally committed to working to achieve this result.”

Hollywood television and movie writers went on their first strike in 15 years in May, only to be joined in midJuly by actors.

The last time Hollywood writers laid down their pens and keyboards, in 2007, the strike lasted 100 days and cost Los Angeles’s entertainment economy around $2 billion.

This time, the two sides are clashing as writers demand higher pay, minimum guarantees of stable employment and a greater share of profits from the boom in streaming, while studios say they must cut costs due to economic pressures. AFP of the GDP report.

Ryota Abe, an economist at Sumitomo Mitsui Banking Corp. said the 4.3-percent expansion was below the market forecast of 6.0 percent.

“As the central bank of the Philippines is still concerned about high inflation, even if concerns about an economic slowdown increase, it would be difficult to start cutting rates immediately. I believe BSP can seriously consider rate cuts in the meetings in the fourth quarter. The latest GDP data will no doubt make BSP more wary than ever of an economic slowdown,” he said.

“The BSP’s concern is expected to shift from inflation to the economy going forward. The policy rate will prob ably be held steady at 6.25 percent at the next meeting on Aug. 17,” he said. He said that as the BSP would likely cut interest rates ahead of the US Federal Reserve, the interest rate differential between the US and the Philippines will narrow. “From this perspective, based on the above outlook, the possibility of PHP depreciating against USD cannot be ruled out. Although USD could fall further as market participants start to price in Fed rate cuts, some believe that the Fed’s hawkish stance will last longer than expected,” he said. Oxford Economics, a London-based think tank, said the growth slowdown in the second quarter came from the domestic sector, which was finally feeling

China resumes outbound group tours to US, UK, Japan

BEIJING, China—Beijing on Thursday lifted a Covid-era ban on outbound group tours to dozens of countries including the United States and Japan, a move that could see crowds of Chinese tourists return to destinations around the world.

China cut itself off from the world in 2020 as part of a strict zero-Covid strategy, using visa suspensions and lengthy quarantines to curb the import of virus cases into the country.

Thursday’s announcement is the latest move towards reopening, after the Chinese government dropped its containment measures abruptly in December.

“From now on, travel agencies across the country and online travel companies will resume operating outbound group tours” to more than 70 countries, including the United States, United Kingdom, Japan and South Korea, the Chinese Ministry of Culture and Tourism said in a statement.

Among numerous others, the list also gave the green light for trips to most European Union member states, India, Pakistan, and Australia.

The inclusion of Australia coincides with a thawing in the frostiness between Canberra and Beijing that has dominated relations over the last few years.

Last week, China announced it was removing extra tariffs on Australian barley imposed in 2020 at the height of a bitter dispute with the then-conservative government over issues including China’s overseas influence operations.

‘Positive role’ Chinese tour groups had already received permission to visit a small number of countries earlier this year under a trial programme, including tourist magnets Thailand, Italy and France.

The tourism ministry on Thursday said outbound tourism had been developing in a stable manner since the start of the trial period, “playing a positive role in promoting tourism exchanges and cooperation”.

China had the largest outbound tourism market in the world in 2019, with mainland Chinese residents taking 155 million trips abroad that year, according to consulting firm McKinsey.

That outflow narrowed to a trickle in the past three years as Chinese authorities restricted passport renewals and cut international flights in a bid to deter travel.

“Currently, international passenger flights continue to resume, and the desire of Chinese people to travel abroad is increasing,” the foreign ministry said in a statement on Thursday.

In early December, Chinese authorities effectively ended the country’s regime of mass testing, lockdowns and long quarantines -- but the abrupt reversal led to a spike in Covid cases.

Beijing announced in late December that inbound travelers to the country would no longer need to quarantine from January 8, but kept in place visa restrictions on foreigners. AFP the impact of monetary tightening.

“We think the outlook remains challenging. The effect of rapid monetary tightening will not be contained to one quarter but will likely linger for some time. On top of this, soft external demand will likely exert downward pressures on goods exports in second half of 2023 and into 2024. We will downgrade our already below-consensus growth forecast of 5.4 percent this year given today’s print,” it said.

“We think the outlook remains challenging. Today’s print indicates the lagged impact of monetary tightening on growth is finally kicking in, which we expect will last for some time,” Oxford Economics said. With AFP

White House says millions offered for hacker-thwarting AI

WASHINGTON, United States—The White House on Wednesday launched a competition offering millions of dollars in prize money for creating new artificial intelligence systems that can defend critical software from hackers.

Competitors vying for some of the $18.5 million in prize money will need to design novel AI systems that quickly find and fix software vulnerabilities in electric grids, subways or other key networks that could be exploited by hackers, President Joe Biden’s administration said.

“This competition will be a clarion call for all kinds of creative people in organizations to bolster the security of critical software that American families and businesses and all of our society relies on,” the director of the White House Office of Science and Technology Policy, Arati Prabhakar, told a briefing.

To boost participation, the Defense Advanced Research Projects Agency (DARPA) running the competition will put $7 million into funding small businesses that want to compete, according to the White House.

DARPA is collaborating with AI tech titans Anthropic, Google, Microsoft, and ChatGPT-maker OpenAI, which will provide expertise and technology for the competition, Prabhakar said.

The challenge is intended to “bring together diverse thinkers from all across the nation to think about how we can use AI to dramatically improve cybersecurity,” Deputy National Security Advisor for Cyber and Emerging Technology Anne Neuberger said in the briefing.

The challenge was announced in Las Vegas at a cyber security conference ahead of a Def Con gathering where hackers will attempt to penetrate various AI systems.

“We’ll have thousands of people over two and a half days red teaming leading AI models to see how they stack up,” Prabhakar said. AFP