President Duterte explains that he is first making sure that the
country’s defense capabilities are strong as he sees “dark clouds
ahead,” particularly in Mindanao.
Duterte made the statement as he explained that he first has to make
sure that the defense of the country is strong before he commits to
other sectors, particularly the Micro, Small, and Medium Enterprises
“Maybe inuna ko lang ‘yung (Maybe I’m just prioritizing first our)
defense because I said there’s a — I see dark clouds ahead,” he said in a
speech in Pampanga Tuesday.
“So inuna ko muna ‘yung (So I’m taking care first of) matters that would make us strong,” he added.
Duterte also reminded the public that the country is not yet done
with its fight against terrorism despite its victory in the five-month
war against ISIS-inspired terrorists in Marawi City, Lanao del Sur last
“Just be put on notice that we are not yet over the hump in our
troubles with the law and order particularly in some parts of the
Philippines. Mindanao is one area which you have to look with guarded
eyes,” he said, adding that ISIS remains to be a wildcard in Mindanao.
“Dito sa Luzon, medyo maganda nang kaunti (The situation is Luzon is
quite better). It is not really as bad as down there in Mindanao because
the fighting is limited to certain groups but not fronts,” he added.
The President also reminded the public of their role in keeping the law and order in the country.
“As we go along with our governance, there are many things which I
would like to pass on to you na dapat (that should be) — the role of the
citizen of this country,” he said.
President Duterte earlier explained that Mindanao is the only
possible place in Southeast Asia where the ISIS will go to after being
driven out of the Middle East due to the number of infidels or
Last month, a firefight occurred between the Armed Forces of the
Philippines (AFP) and remnants of the ISIS-inspired Maute Group in
Tubaran, Lanao del Sur. The said firefight prompted the evacuation of
around 500 families.
Presidential Spokesperson Harry Roque said that the firefight only
proves that martial law is still needed in Mindanao as there are still
enemies in the region.
Government forces had won its five-month battle against the
ISIS-inspired Maute terrorists in Marawi City, Lanao del Sur in October
last year. The military was able to kill the terrorists’ leaders Isnilon
Hapilon and Omar Maute.
When the war erupted on May 23, 2017, President Duterte placed the
entire island of Mindanao under martial law and has suspended the
privilege of the writ of habeas corpus.
When the martial law expired the following month, the Congress
granted it a six-month extension. In December last year, the Congress
also allowed an extended martial law until December 31, 2018.
Duterte's 'crass leadership' putting off investors – Capital Economics
MANILA, Philippines – Businessmen are getting worried about President Rodrigo Duterte's "erratic and crass leadership style," said London-based research consultancy firm Capital Economics on Tuesday, June 26.
Capital Economics senior Asia economist Gareth Leather said in the firm's report that "a string of inflammatory comments and policy changes by Duterte have raised concerns in the minds of investors over the President's judgement and commitment to the rule of law."
The report also noted the stock market's underperformance and the decline of foreign direct investment pledges under Duterte's watch.
"If investment starts to slow sharply, medium-term growth prospects will suffer," Capital Economics said.
The report also underscored the negative effects of accelerated inflation and the surge in imports of capital goods due to the government's aggressive infrastructure push.
Inflation peaked at 4.6% in May and the peso slid to a 12-year low, trading at P53 against the United States dollar.
Leather also noted how the country's history of "poor leadership and political uncertainty" can affect the economy.
"The biggest risk for the Philippines is that history now repeats itself. There are already signs that things are taking a turn for the worse," added Leather.
But Capital Economics did say that the Philippine economy is still rosy and Duterte "has not been the disaster" some have feared since he left the economic aspects of the job to technocrats.
"For the most part, Duterte has stuck to his campaign promise by staying out of the day-to-day running of the economy. Instead he has delegated economic management to a few respected officials, most importantly, Carlos Dominguez as finance minister, who has provided reassurance to investors concerned about Duterte's war on drugs and other controversial policies," the report said.
"Growth has remained strong, while economic policy has been left in the hands of technocrats, who have pushed through a number of sensible reforms," Leather added.
Capital Economics also lauded the government's Build, Build, Build program and the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
The country's gross domestic product (GDP) grew 6.8% in the 1st quarter. The growth was among the fastest in the region, but still below the 7% to 8% full-year 2018 target
The inflation blunder
The toughest acts in the coming days need to come from Room 501 of the Bangko Sentral ng Pilipinas (BSP).
The central, after all, must now race against time to quash the quickening inflation – a five-year high of 5.2 percent in June – that is hurting our pockets.
But first the BSP must realize that it miscalculated the inflation outlook. As a result, it failed to act earlier than it should have. Surely, the BSP’s rear view mirror must have shown that global interest rates were already on the rise two years ago, something that would weaken the peso, which in turn would worsen inflation.
This released around P190 billion in additional funds to the financial system.
It’s now time to move fast. But before all that, monetary authorities and Duterte’s economic team must stop downplaying the situation. Clearly, there was a blunder along the way.
Monetary authorities said they didn’t act because inflation pressures came from the supply side and had little to do with TRAIN. But economic officials are now saying that there’s money going around because of TRAIN and free tuition and this aggravated the situation.
Of course, there are factors outside BSP’s control that contributed significantly to the uptick in inflation. Global crude prices, for one, have risen to as high as $75 per barrel.
Hopefully, there’s still time to catch up.
I have high respect for the central bank because the institution has performed well over the years. My mother worked there for 25 years and so did her mother before her, for 35 years.
I am optimistic BSP Governor Nestor Espenilla Jr., would be able to steer the institution back to its rightful place — independent, sovereign and capable of fulfilling its primary mandate of maintaining price stability that is conducive for growth.
He is somewhat “lucky” to have an external crisis of this magnitude -- foreign fund outflows, spiraling crude prices in the market, a trade war – to show his mettle. Others didn’t have that chance.
When he took over the BSP last year, I teased Gov Nesting that with his hoarse voice — a result of a medical procedure — he sounded like Mario Puzo’s Don Vito Corleone, the Italian mafia boss. I told him that sounding like the Don was quite fitting for his new role as the BSP’s big boss. He laughed off my ribbing.
But these days, the governor can learn some lessons from the Corleone family’s rise and fall. And the most important one is to watch out for the Salvadore Tessios in his midst who may be preventing him -- one way or another -- from doing his job well. He should realize that when s#*t hits the fan, they would all be putting the blame on him. Maybe they’re not out to get his job, but perhaps they’d be so eager to see him bungle it.
As Corleone’s son Michael said, “Tessio was always smarter.”
MANILA, Philippines — The weakening of the
Philippine peso, one of Asia’s worst performing currencies so far this
year, is a “net win” for the country, Budget Secretary Benjamin Diokno
said Tuesday amid concerns over the local currency’s slump.
According to Diokno, the depreciation of the peso is expected to
benefit overseas Filipino workers, the business process outsourcing
industry and the country’s exports.
“A weak peso does not mean a weak economy,” Diokno told ANC’s “Headstart.”
Philippine President Rodrigo Duterte’s plan to keep his country’s
growth engine humming by spending more than P8 trillion on
infrastructure has been fueling demand for imports of
The heightened purchase of capital goods overseas due to the
infrastructure boom has reversed the country’s current account surplus
to a deficit, pressuring the peso.
The Philippines’ trade deficit in May rose to a five-month high of
$3.70 billion driven by double-digit growth in imports. However, exports
fell for a fifth consecutive month in May.
Meanwhile, remittances in the first four months of 2018 hit $9.353
billion, 3.5 percent more than the $9.036-billion inflows received in
the same period in 2017 but below the central bank’s 4 percent growth
projection for this year.
Export revenues in BPO services grew 7.5 percent to $5.5 billion in
the first three months of 2018 from 9.9 percent in the first quarter
The peso on Tuesday closed P53.46 against the greenback, weaker than
its P53.4-per-dollar finish last Monday. Year-to-date, the local unit
has depreciated by more than 7 percent against the US dollar.
Some economists believe rising inflation, which jumped 5.2 percent in
June, cancels out any gains from a weaker peso by eroding consumers’
purchasing power. — Ian Nicolas Cigaral
The Philippine trade deficit widened by 47.62 percent in May as
import receipts continue to grow while exports registered a decline,
data released by the Philippine Statistics Authority (PSA) showed
Tuesday. The country’s balance of trade in goods expanded to a
$3.701-billion deficit in May, up 47.62 percent from the $2.507 billion a
year earlier. Total exports declined by 3.8 percent to $5.76 billion from $5.99 billion in the same comparable period. Imports increased by 11.4 percent to $9.46 billion from $8.49 billion.
“The widening of the trade deficit is expected as we are importing a
lot of capital goods to accommodate the investment needs of the
country,” Land Bank of the Philippines market economist Guian Angelo
Dumalagan said. A wider trade deficit will subtract some points
from growth, but it could be compensated by a stronger expansion in
investment spending. “Moving forward, higher importation of
capital goods also sets the stage for stronger growth in the future, as
these goods could improve the country’s productive capacity,” Dumalagan
But a widening trade
gap could be “worrisome” when it contributes to weaken the peso and
raise domestic prices, said Cid Terosa, dean of the University of Asia
and the Pacific School of Economics. “At the same time,
however, it reflects greater government spending on infrastructure and
relatively higher cost of petroleum products in the world market,” he
said. The negative impact of a widening trade deficit on gross
domestic product can be offset by positive stimulus from government
spending, Terosa noted.
The Philippines stands to lose its investment-grade credit ratings and may have to stop construction of big-ticket infrastructure projects if the Supreme Court ruling that grants local
government units (LGUs) a share from “all” national taxes gets
implemented, Budget Secretary Benjamin E. Diokno said.
As such, Diokno said they would ask the Office of the Solicitor
General to file a motion seeking a reversal of the high court’s decision
on LGU’s internal revenue allotment (IRA).
Last week, the Supreme Court ruled that the “just share” of LGUs’ IRA
must come from all national taxes, not only from national internal
revenue taxes as was the current practice.
“All national taxes” include collections of import duties and other
levies imposed by the Bureau of Customs, among other revenue collection
Internal revenue taxes, meanwhile, referred to those collected by the
Bureau of Internal Revenue, including documentary stamp tax, donor’s
tax, excise tax, estate tax, income tax and value-added tax.
To recall, former Batangas representative and now Governor Hermilando
Mandanas in 2012 filed a petition in the Supreme Court alleging that
between 1992 and 2012, P500 billion in IRA was not released to LGUs
across the country due to wrong calculations.
During the “Tatak ng Pagbabago: Tatak ng Malasakit at Pagkakaisa”
forum, Diokno said that implementing the ruling would cost the
government between P1.2 trillion and P6 trillion, based on various
“We have yet to receive a copy of the decision, so we don’t know
exactly how much will be the damage to the government,” Diokno later
Even with the varying estimates, he said the government could not afford to shoulder it.
For one, remitting a bigger share of all national taxes to LGUs would
widen the government’s budget deficit to 6 percent of gross domestic
product (GDP), Diokno said.
“It will be what we call an unmanageable public sector deficit,” he added.
The Duterte administration had capped the budget deficit program to 3
percent of GDP from 2019 to 2022, while this year’s balance was
expanded to a 3.2-percent deficit as the government wanted to ramp up
spending on infrastructure and social services.
With a larger-than-programmed budget deficit, Diokno warned that the country’s credit ratings would drop.
The Philippines currently enjoys investment grade credit ratings from
the top three debt watchers, namely Fitch, Moody’s and S&P.
Credit ratings are a measure of a government’s credit-worthiness. As
the stability of state finances is also related to its performance,
credit scores serve as a proxy grade for the economy.
gotta lick it said:
INCOMPETENT DuDirty is destroying the Philippine ECONOMY.
Hot money outflows rise in June
The central bank registered a higher net foreign portfolio investment or hot money outflows in June of $516 million compared to the previous month’s $206 million, citing investors’ inflation and exchange rate concerns.
The June withrawal of funds contrasted with same time last year’s market sentiment which saw net inflows of $73 million.
For the period, Bangko Sentral ng Pilipinas (BSP) data showed total inflows amounted to $911 million which was 24.9 percent lower than May’s $1.2 billion and also 54.8 percent lower than same time in 2017 of $2 billion.
According to the BSP, the decline “may be attributed to the US Federal Reserve’s decision to increase interest rates and investor concerns on inflation and the further weakening of the peso.” In June, inflation rose to a five-year high of 5.2 percent from 4.6 percent in May while the peso has averaged at P53.4 to the US dollar in the last 12 days.
The US, United Kingdom, Singapore, Hong Kong, and Switzerland are top investor countries with total combined of 82.5 percent.
About 92 percent of investments were placed in listed securities such as holding firms, property, banks, food, beverage and tobacco firms, and utilities companies while rest are in government securities. Net outflows of $346 million were however recorded in government securities, and $170 million in other debt instruments.
In terms of overall outflows, this amounted to $1.4 billion in June which was down by 26.6 percent from $1.9 billion last year. It was almost unchanged from May this year. The BSP said the numbers “closely reflected (May’s) level as investors reacted to the continuing trade war between the US and China coupled with sustained net foreign selling of PSE-listed securities since February of this year.” About 82.7 percent of outflows were traced to the US.
The BSP projects foreign portfolios to register a net outflow of $900 million at the end of this year, which was better than the $800 million net outflows in 2017.
The BSP is confident that despite a wider balance of payments shortfall for 2018, the BOP balance continue to be reliably supported by strong structural foreign exchange inflows.
The BOP and current account deficits are expected to climb to $1.5 billion and $3.1 billion, respectively, for 2018 from previous estimates of $1 billion and $700 million.
Economic growth under the administration of President Rodrigo Duterte has been “illusory” as it has not trickled down to the masses, research group IBON Foundation claimed on Thursday.“Government can talk about all the nice figures, growth and fundamentals, but the issue is that the economy is not creating enough jobs, wages remain stagnant, the quality of work is actually getting worse, and inflation is accelerating,” Sonny Africa, executive director of IBON Foundation, told reporters in Quezon City.“The Philippine economy actually shed jobs last year. Labor force participation rates are indicating people are dropping out—discouraged workers—and wages remain low,” said Africa.The National Economic and Development Authority (NEDA) has attributed the drop in employment to workers, particularly the youth, going back to school.The government has made available more than 11,000 job opportunities related to the infrastructure program, which is expected to drive economic growth further.
Under the Build, Build, Build program, the government plans to spend over P8 trillion until 2022, largely funded tax revenue.“A short-term illusion of growth is created because they’re spending, but the long-term foundations really are not being grown,” Africa noted. To ensure long-term growth, more jobs need to be created in agriculture and manufacturing especially in the outskirts of the metropolis.“The infrastructure which accelerated does not necessarily translate to stronger agriculture or a stronger domestic industry,” he said. Data from the Philippine Statistics Authority showed agriculture output grew by 1.47 percent in the first quarter of the year, compared with 5.21 percent in the same period in 2017.“We think the government is not giving us the whole picture of the economy. The big picture should also include what is the real jobs situation,” Africa said.
Metro Manila (CNN Philippines, July 13) - The Philippine economy will still experience steady growth while key indicators are seen to rise due to recent economic trends, the World Bank said Friday.
In a statement, World Bank said the country will sustain a 6.7 percent gross domestic product (GDP) growth this year until 2019, steady from its April projection.
Government consumption is seen to increase while private consumption growth is expected to go up by 5.9 percent in 2018 and 6.2 percent next year.
World Bank slightly adjusted upwards its previous forecast for investment growth due to companies' higher capital expenditures, including bigger infrastructure spending.
The multilateral lender is expecting the country's GDP growth pace to pick up by year-end and into the first half of 2019 due to anticipated higher election-related public spending.
World Bank Lead Economist for the Philippines Birgit Hansl said the country can attain its 6.5-7.5 percent medium term target depending on the implementation of the government's investment spending agenda.
"Higher private investment levels will be critical to sustain the economy's growth momentum as capacity constraints become more binding," Hansl added.
However, World Bank also said Philippine exports will decrease in the coming years amid the expected slowdown in the global economic growth.
According to World Bank's June 2018 Global Economic Prospects, the global economy will slow down over the next two years due to rising commodity prices, decreasing global demand, and tightening of global financing conditions. It added that uncertainty around global growth conditions can lead to trade and other policy shocks among major economies. It added that trade and other policy shocks can possibly emerge from major economies amid rising uncertainty around global growth conditions.
Sacrificing farmers for politics
VP ROBREDO’S WRONG RICE MATH: AN INJUSTICE TO FILIPINO FARMERS
By Manny Piñol Secretary of Agriculture
Ever since I assumed the position of Secretary of Agriculture, I have
made it a policy not to dip my fingers into political issues and this is
a policy which I have asked all other workers of this department to
“Leave politics to politicians and let us just focus on
our task to help farmers and fishermen produce food for the country” is
my standing directive to workers in my department.
however, I will have to cross the red line simply because one of the
highest officials of this country has ventured into the realm of
agriculture, not to help Filipino farmers, but to use rice as a
political issue against this administration.
Two days ago, Vice
President Leni Robredo in a press conference, made an off-the-cuff
computation on the increase in the cost of rice which she claimed was
hurting Filipino consumers using it as a proof that the administration
has done little to address rising prices.
Not only was her “40 x 4
= 1,600” ridiculously and atrociously wrong, it actually showed her
lack of profound understanding of the true state of Philippine
Agriculture and the poverty that pervades in the farming and fisheries
Worse, she perpetuated the injustice which has long been
inflicted on Filipino farmers and fishermen who always get the blame
when the price of rice, fish, meat and vegetables tick up a little in
I can understand that she made a mental computation
of the “40 x 4” which resulted in the wrong total of “P1,600” but what I
cannot comprehend is why use the increase in the price of rice to
emphasize that something is wrong with the way President Duterte is
Let me just cite some figures and present
data which were not pulled out from the blue air (hindi hugot sa hangin)
but from studies and researches made by the Philippine Statistics
Authority and other research institutions:
1. In 2008, the
government support price for palay procurement was P17 per kilo, clean
and dry at 14% moisture content. Today, 2018 or 10 years later, it is
still P17, although rice farmers are happier now because the buying
price by private rice traders has reached historic high at P21.50 per
kilo. Using these numbers, a poor rice farmer who owns one hectare of
un-rrigated land which produces 4 metric tons once a year could now earn
P86,000 which with a production cost of P12 per kilo would earn him a
net of P36,000. That net earnings, divided into 12 months would mean a
monthly income of P3,166.
2. In 2008, the Cost of Living at Current Prices Per Family Per Year was P63,246.19.
Today, 10 years later, the Cost of Living Per Family Per Year is at
P110,690.45 or an increase of P47,444 which means that a family needed
to spend an additional P3,953 more than in 2008.
This means that at current prices, a family has to spend P9,224 every month to lead a decent life.
These numbers indicate that even at current buying prices of paddy rice
which the PSA indicated were at historic high, the small rice farmer in
an unirrigated rice farm is short by a whooping P6,058 per month to
cope up with the high Cost of Living and this means that he has to do
away with the simple luxiries in life, like perhaps a colored TV which
is an ubiquitous equipment in almost all households and he could not
even bring his children to the mall.
The ordinary farmer is able
to survive because he could grow the food that he needs like vegetable,
chicken, hogs and other animals.
The story may be different for
the rice farmer whose field is irrigated and who could harvest 6 metric
tons twice a year but this group represents only 1/3 of the total number
of rice farmers in the country.
So, going back to the issue of
why the price of rice has gone up, the basic and simple answer is it is
because the Cost of Living has gone up.
Tuition fees (although
this is now free in state colleges and universities) have gone up over
the last 10 years; fuel prices have gone up and down and up again over
the last 10 years; the cost of farm inputs, including seeds, has
increased tremendously; the cost of transport, handling and labor has
gone up; and even cost of fare for both land and sea transportation has
While policemen, teachers, government workers and even
ordinary office workers have enjoyed tremendous increases in their
salaries and wages over the last 10 years, the ordinary rice farmer’s
monthly income has increased by only about P750 per month over the last
In spite of the neglect and lack of understanding of
some of our top officials of the actual state of life of the Filipino
farmers and fishermen, they have steadily contributed to stabilizing the
supply of food in the country.
Last year, rice farmers produced
19.3-million metric tons of paddy rice which was the highest in the
country’s history; the hog and poultry industry, with minimal help from
government have performed dramatically; the fisheries sector is
recovering from years of neglect; corn farmers have produced more than
enough for the country’s requirements while the high value crops farmers
have steadily earned foreign exchange for the country.
reforms being implemented in the Agriculture and Fisheries sectors like
improving farm mechanization and providing post-harvest facilities but
the effects of these efforts would not be felt right away.
not want to sound arrogant but to those who are asking farmers and
fishermen to bring down the price of their produce, let me give them
this answer: Yes, the farmers and fishermen could do that, provided,
however, that you bring down the cost of tuition, fertilizer, farm
inputs, fuel and the other things they need to produce and survive.
People must realize that farmers and fishermen too have families to
raise, children to send to school and they too dream of simple luxuries
and comfort in life.
“Hindi lang naman kayo ang anak ng Diyos."
I mean no disrespect to Vice President Robredo but perhaps she should
have asked for a briefing from the Department of Agriculture before
attempting to use the rice issue to get back at President Rody Duterte
who gave an unflattering evaluation of her capacity to lead the country.
Even this late, however, I am still offering to give Vice President
Robredo a briefing on the State of Philippine Agriculture to help her
realize that the “Laylayan ng Lipunan” that she fondly talks about and
says have been neglected by government are actually the farmers and
fishermen, the very people whose lives will be affected if she continues
to use the price of rice and other food commodity as a political issue.
(All photos were downloaded from public websites.)