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Diokno does not favor tax hikes to tackle debt

By | Property News

Philippine central bank governor Benjamin E. Diokno, who takes on a new role as finance secretary next month, said on Friday he does not favor raising taxes even as the incoming government is set to inherit a huge pile of debt.
Mr. Diokno, who is President-elect Ferdinand “Bongbong” R. Marcos, Jr.’s choice to lead the finance ministry, would rather see an improvement in tax administration and collection, including reducing corruption through digitalization, he said.
“To me, grow the economy, focus on tax administration first, improve the collection,” Mr. Diokno told ANC news channel.
Mr. Diokno’s comments should help ease concerns among labor groups, which have opposed proposals by the outgoing government to impose more excise taxes on oil, defer scheduled tax cuts, and remove some value-added tax exemptions.
Mr. Marcos on Thursday said he preferred to reduce the tax burden for those suffering from the economic impact of the pandemic.
Mr. Diokno, who before being appointed central bank governor in 2019 served as budget minister, said he was “satisfied with the current tax structure.”
The tax system has already undergone reform in the past six years after incumbent President Rodrigo R. Duterte’s government lowered corporate and personal income taxes while raising levies on tobacco and alcohol products.
The new Marcos administration is inheriting P11.7 trillion ($224 billion) in government debt, equivalent to 60.5% of gross domestic product as of the end of 2021, the highest ratio in 16 years, fueled by borrowing to address the coronavirus disease 2019 (COVID-19) pandemic.
The debt level was almost double the P6.4 trillion of liabilities when Mr. Duterte took office in June 2016, government data showed.
“I am not worried about the level of the debt,” said Mr. Diokno, who sees it as “easily manageable” as long as the economy is able to return to a pre-pandemic annual growth rate of 6% to 7%. ($1 = P52.26) — Reuters

Source: https://www.bworldonline.com/top-stories/2022/05/27/451298/diokno-does-not-favor-tax-hikes-to-tackle-debt/

‘Protect the truth’: A Marcos return in Philippines triggers fear for history

By | Property News

Books about the late Philippine dictator Ferdinand E. Marcos and his brutal era of martial law are flying off the shelves, spurred by “panic buying” after his son and namesake won a May 9 presidential election. 
Ferdinand “Bongbong” R. Marcos, Jr.’s presidency, set to begin on June 30, has many people worried about losing access to books and other accounts of his father’s rule, given his family’s decades-long effort to rehabilitate its name through what critics describe as a campaign of historical revisionism. 
“They are panic buying,” Alexine Parreno said of her customers, many of them parents buying books about martial law aimed at children. 
“They are really worried and scared that the books will be pulled out and that everything will be revised.” 
One shopper was Faith Alcazaren, a mother of two, who picked up extra bundles of books to send to friends overseas. 
“I felt like the smallest thing I can do and have control over is to protect the truth,” she said. 
Thousands of opponents of the senior Marcos were jailed, killed or disappeared during martial law, from 1972 to 1981, when the family name became synonymous with cronyism and extravagance as billions of dollars of state wealth disappeared. 
The younger Marcos has called for a revision of textbooks that cover his father’s rule, saying they are teaching children lies. 
His choice of education minister, vice president-elect Sara Z. Duterte-Carpio, daughter of outgoing strongman leader Rodrigo R. Duterte, has raised fears the Marcos family will finally succeed at entrenching its sanitized version of history. 
“We already thought that textbooks and the teaching of history in basic education was woefully inadequate in terms of explaining to our youth and children what the martial law period meant,” said Ramon Guillermo, a professor at the University of the Philippines. 
“If the Marcoses come back to power and Dutertes are supporting them, we could even have a more difficult situation in teaching what really happened,” said Mr. Guillermo. 
YEARS OF INVESTIGATION 
Mr. Guillermo, with a group of fellow scholars, launched a manifesto last week pledging to combat attempts to falsify history to suit the Marcos narrative, and to oppose all censorship and book-banning. 
The manifesto, signed by 1,700 people, came after a government task force labeled as communist a children’s book publishing firm selling five titles on martial law and dictatorship it called “#NeverAgain Book Bundle.” 
“Never Again!” was the battlecry of millions of protesters who joined the historic “people power” revolution that toppled the 20-year dictatorship in 1986, when the senior Marcos and his notoriously extravagant wife, Imelda, fled with their children into exile in Hawaii. 
“History cannot be bought, but books about history can be purchased,” one book buyer said on Instagram. 
“We will continue to fight historical revisionism.” 
Mr. Marcos and Ms. Duterte-Carpio did not respond to requests for comment. In a 2020 media forum, Mr. Marcos dismissed accusations his family was attempting to rewrite history. 
“Who is doing revisionism? They put it in the books, the children’s textbooks that the Marcoses stole this, we did this … what they have been saying about what we stole, what we did, not all of them are true.” 
Years of investigation and legal proceedings followed the rule of the senior Marcos. The Presidential Commission on Good Government set up in 1986 has retrieved about $5 billion of the Marcos fortune, its chairman, John A. Agbayani said. Another $2.4 billion is still caught up in litigation, he said. 
‘TSUNAMI OF DISINFORMATION’ 
The younger Marcos fought the election with the slogan “Together, we shall rise again,” invoking nostalgia for his father’s rule, which his family and supporters have portrayed as a golden age. 
His campaign rode what academics called a “tsunami of disinformation” with social media flooded with narratives playing down rights abuses and corruption under his father. 
On the day it became clear that Marcos had won, a book published in 1976 that details corruption and abuses during the Marcos regime sold 300 copies, its publisher said. 
More than a week later, 500 copies of the book, The Conjugal Dictatorship of Ferdinand and Imelda Marcos, were sold within an hour of being posted online. 
“I wanted to make sure that inside our home, I can keep a version of the martial law era that has not been tampered with by their hands,” said college student Jose Anonat, who got the book. 
In an indication of the sort of history re-writing that Marcos supporters want, Juan Ponce Enrile, the late dictator’s defense minister, said in a conversation with the younger Marcos that appeared on YouTube in 2018, that not one person was arrested for political and religious views, or for criticizing the elder Marcos. 
The clip has been viewed more than 1.5 million times. 
There were also attempts to remove the terms “dictator” and “kleptocrat” describing the elder Marcos on Wikipedia, said Carlos Nazareno, of the Wiki Society of the Philippines, part of a movement against disinformation. 
Carmelo Crisanto, who heads an agency memorializing martial law victims, is digitizing documents relating to 11,103 survivors who were awarded reparations from seized Marcos family wealth. He hopes the database will be online by September, in time for the 50th anniversary of the declaration of martial law. 
“These archives will be alive,” said Mr. Crisanto. “They will never be suppressed.” — Reuters

Source: https://www.bworldonline.com/the-nation/2022/05/27/451279/protect-the-truth-a-marcos-return-in-philippines-triggers-fear-for-history/

Demand for Filipino seafarers still high, but quality of training is dipping

By | Property News

The Philippines risks losing out on seafaring jobs if the quality of training in local maritime schools continues to dip, according to experts.
“Is there still a demand for Filipino seafarers? The answer is a big yes,” said Jøran Nøstvik, a captain and global owner’s representative of Noatun Maritime, a crew assessment and development services company.
The demand, however, has been difficult to fill: Noatun Maritime recruited 400 local applicants at one point, but only two passed its screening. 
At a May 26 joint maritime committee meeting by the German-Philippine Chamber of Commerce and Industry (GPCCI), Mr. Nøstvik recommended developing senior crew officers; developing ratings for crew roles such as fitters, bosuns, and pumpmen; tapping senior crew officers to serve as part-time school instructors; and creating more government-owned maritime schools. 
“If we invest and spend more time and money on this, the return on investment will be three months after the [trained crew] has onboarded,” he said.
Shipping companies that have compensated for substandard training by implementing their own bridging programs bear “a responsibility for the sad state of affairs,” said Tore Henriksen, chair of GPCCI’s joint maritime committee.
“The schools never had to deliver — because we have accepted that it’s substandard,” he said. 
In Europe, incompetent applicants aren’t accepted in the first place, said Mr. Nøstvik.
According to the European Maritime Safety Agency Outlook for 2020, the Philippines leads non-European Union countries in the number of officers working on EU-flagged vessels, with a total of 30,615.
Ship management companies want quality labor and not cheap labor, according to a 2022 survey reported by Splash, a maritime news site. 
The Philippines, known to be the seafaring capital of the world, had a total of 217,223 seafarers deployed overseas in 2020 — a drop of 54% from the 2019 figure.   
In October 2018, the Maritime Industry Authority (MARINA) submitted proof of its compliance with the recommendations for Philippine maritime education given by the European Maritime Safety Agency (EMSA). 
In the same year, both the agency and the Commission on Higher Education (CHED) monitored the country’s 75 approved maritime schools, and noted deficiencies in facilities and training equipment; examination and assessment system; quality standard shipment shortcomings; and quality of shipboard training.  
MARINA is open to publishing the passing rates of these schools, pending the approval of the CHED, said Marina administrator and vice admiral Robert A. Empedrad, at the same hybrid May 26 meeting. 
The marine authority inaugurated on May 26 a training and research development arm in Panaad Park, Bacolod City.  
“There is much to be done in terms of raising our standards… we will make sure that we continue to be the number one producing country as far as professional seafarers are concerned,” Mr. Empedrad said. — Patricia B. Mirasol

Source: https://www.bworldonline.com/sparkup/2022/05/27/451254/demand-for-filipino-seafarers-still-high-but-quality-of-training-is-dipping/

A first look: How financial intermediaries can integrate crypto

By | Property News

By Team Ripple
SAN FRANCISCO — Most crypto owners would prefer to interact with digital assets through their banks and other traditional financial institutions. In the United States, as many as 65 million customers — most of whom do not own any digital assets today — are potential owners, and would use digital assets through their existing financial institution if available.
“Navigating Crypto: How Banks and Other Financial Intermediaries Can Integrate Crypto Assets,” a new report from Oliver Wyman commissioned by Ripple, examines how banks and other intermediaries are increasingly exploring offering digital assets to their customers and outlines the necessary requirements to do so. This involves accommodating a range of technical, commercial, organizational and regulatory factors to enable customers to interact with crypto, which must be done strategically in order for banks and FI’s to position themselves for success in the short and long terms.
Nikolai Dienerowitz, Oliver Wyman Partner in London, said: “Financial institutions that develop capabilities to serve this market have an opportunity to differentiate themselves in the near term — and develop capabilities in the longer term that may position them well to broaden out their digital asset services. For example, a bank investing in technology to manage the nearly-instant settlement with digital assets today may be better placed in the future if they want to serve customers with CBDCs.”
A Deep Dive into the Current Crypto Landscape
Broken out into five distinct sections, the paper explores the evolution of the market and highlights its rapid growth over the last few years, extrapolating along its current growth trajectory. (If extrapolated, there could be as many as 1 billion global crypto asset owners by 2024.)
While the authors acknowledge the future of crypto is still uncertain and hinges on three primary factors — regulatory oversight, new use cases and end-user demand — they say the potential to serve these customers and become the primary gateway between fiat and digital assets is real for banks and financial intermediaries. Those that do so have the opportunity to position themselves for success in a potential future in which digital assets are more prevalent.
What Do I Need to Offer Crypto Services?
For banks seeking to capitalize on this opportunity, the paper outlines seven core technical requirements (e.g. liquidity solution, settlement network, etc.) and suggests a five-step checklist for how to begin this process, including goal setting, identifying key requirements, determining a development strategy, accounting for risk and regulation, and establishing a delivery strategy.
Since many organizations lack the expertise and capabilities to build and manage these requirements in-house, the report highlights the benefits of a partnership strategy to help maximize speed to market and fully realize the customer opportunity. In support of that strategy, it also provides a high-level overview of the types of crypto partners available and how each fulfills specific strategic requirements. Arriving later this year, Ripple Liquidity Hub is one such solution that is purpose-built to solve many of the challenges financial intermediaries face that are outlined in the report.
“With a decade of experience in crypto, Ripple has a deep understanding of what it takes to build crypto-first products, with a track record of leveraging blockchain to serve financial institutions,” comments Brad Chase, Ripple’s Senior Director of Engineering. “In launching Liquidity Hub, we are packaging Ripple’s expertise and capabilities behind simple APIs, so these customers can easily offer crypto to their end-users without having to rebuild the entire tech stack.”
Eric Czervionke, Oliver Wyman Partner in New York, adds “Large banks with commensurate tech budgets typically have advantages in realizing economies of scale in investing in new technology capabilities. That may be less true in crypto where most banks will rely on partners to offer new services to their clients — so smaller banks may compete on relatively more equal footing.”
What’s Next For the Market and Financial Institutions
Ultimately, the paper predicts that those banks and financial providers that move quickly and decisively to meet demand can become vital members of the crypto market. Those that adopt a “wait and see” approach run the risk of being crowded out by competitors, including crypto-native firms that will continue to build better products, attain bank-level security and convenience features, and gain greater brand recognition and trust.
Download Oliver Wyman’s Navigating Crypto report here to read more about the future of crypto and how financial organizations can get ahead.
About Ripple
Ripple is a crypto solutions company that transforms how the world moves, manages and tokenizes value. Ripple’s business solutions are faster, more transparent, and more cost effective — solving inefficiencies that have long defined the status quo. And together with partners and the larger developer community, we identify use cases where crypto technology will inspire new business models and create opportunity for more people. With every solution, we’re realizing a more sustainable global economy and planet — increasing access to inclusive and scalable financial systems while leveraging carbon neutral blockchain technology and a green digital asset, XRP. This is how we deliver on our mission to build crypto solutions for a world without economic borders.
 
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Source: https://www.bworldonline.com/spotlight/2022/05/27/451271/a-first-look-how-financial-intermediaries-can-integrate-crypto/

China, Russia veto US push for more UN sanctions on North Korea

By | Property News

UNITED NATIONS — China and Russia vetoed on Thursday a US-led push to impose more United Nations sanctions on North Korea over its renewed ballistic missile launches, publicly splitting the UN Security Council for the first time since it started punishing Pyongyang in 2006. 
The remaining 13 council members all voted in favor of the US-drafted resolution that proposed banning tobacco and oil exports to North Korea, whose leader Kim Jong Un is a chain smoker. It would also have blacklisted the Lazarus hacking group, which the United States says is tied to North Korea. 
The vote came a day after North Korea fired three missiles, including one thought to be its largest intercontinental ballistic missile (ICBM), following US President Joseph R. Biden Jr.’s trip to Asia. It was the latest in a string of ballistic missile launches this year, which are banned by the Security Council. 
US Ambassador to the UN Linda Thomas-Greenfield described the vote as a “disappointing day” for the council. 
“The world faces a clear and present danger from the DPRK (North Korea),” she told the council. “Council restraint and silence has not eliminated or even reduced the threat. If anything, DPRK has been emboldened.” 
She said Washington had assessed that North Korea had carried out six ICBM launches this year and was “actively preparing to conduct a nuclear test.” 
Over the past 16 years the Security Council has steadily, and unanimously, stepped up sanctions to cut off funding for Pyongyang’s nuclear weapons and ballistic missile programs. It last tightened sanctions on Pyongyang in 2017. 
Since then China and Russia have been pushing for an easing of sanctions on humanitarian grounds. While they have delayed some action behind closed doors in the Security Council’s North Korea sanctions committee, the vote on the resolution on Thursday was the first time they have publicly broken unanimity. 
“The introduction of new sanctions against the DPRK (North Korea) is a path to a dead end,” Russia’s UN Ambassador Vassily Nebenzia told the council. “We have stressed the ineffectiveness and the inhumanity of further strengthening the sanctions pressure on Pyongyang.” 
China’s UN Ambassador Zhang Jun said that additional sanctions against North Korea would not help and would only lead to more “negative effects and escalation of confrontation.” 
“The situation on the Peninsula has developed to what it is today thanks primarily to the flip flop US policies and failure to uphold the results of previous dialogues,” he told the council. 
China has been urging the United States to take action — including lifting some unilateral sanctions — to entice Pyongyang to resume talks stalled since 2019, after three failed summits between Kim and then-US President Donald Trump. The United States has said Pyongyang should not be rewarded. 
The UN General Assembly will now discuss North Korea in the next two weeks under a new rule requiring the 193-member body to meet every time a veto is cast in the Security Council by one of the five permanent members — Russia, China, the United States, France and Britain. — Reuters

Source: https://www.bworldonline.com/world/2022/05/27/451260/china-russia-veto-us-push-for-more-un-sanctions-on-north-korea/

Marcos names more economic managers

By | Property News

Central bank Governor Benjamin E. Diokno talks during an economic briefing in Pasay City, April 5. — PHILIPPINE STAR/ GEREMY PINTOLOPRESIDENT-ELECT Ferdinand “Bongbong” R. Marcos, Jr. on Thursday announced he is tapping Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno to be his Finance secretary when he assumes office on July 1.
In a televised briefing, Mr. Marcos said Mr. Diokno will be replaced by Monetary Board member Felipe M. Medalla as governor of the BSP. Mr. Medalla will serve the rest of Mr. Diokno’s unexpired term that is scheduled to end in July 2023.
“The first priority is always going to be the economy. That’s why we have been very careful in choosing the economic team. It’s still down to jobs, the increasing prices of commodities, some relief for the business community. We have to streamline the operations of government,” Mr. Marcos said.
Mr. Diokno, who served as Budget secretary from 2016 to 2019, on Thursday said he will continue the macro and fiscal policies that have helped the Philippine economy recover from the pandemic.
“As Finance Secretary, I will strive to continue prudently and carefully balancing the need to support economic growth, on one hand, and to maintain fiscal discipline, on the other,” he said.
Mr. Diokno and Mr. Medalla were both part of President Joseph E. Estrada’s Cabinet. Mr. Diokno was also Budget secretary, while Mr. Medalla was the Socioeconomic Planning secretary and National Economic and Development Authority director-general.
They join incoming Socioeconomic Planning chief Arsenio M. Balisacan in the Marcos administration’s economic team.
Mr. Marcos also named former University of the Philippines President Alfredo E. Pascual as the head of the Department of Trade and Industry (DTI), and SMC Tollways President and Chief Executive Officer Manuel M. Bonoan as the head of the Department of Public Works and Highways (DPWH).
“He has spent almost his entire professional life in the DPWH,” the president-elect said. “I know him very well so I think he will do a good job.”
Mr. Bonoan served as DPWH undersecretary for operations in the Visayas and Mindanao in 1998.
Mr. Marcos has vowed to continue President Rodrigo R. Duterte’s aggressive infrastructure program to drive economic growth.
VOTE OF CONFIDENCEMr. Marcos’ move to appoint familiar names to his Cabinet was largely welcomed by the markets, business groups and economists. The Philippine Stock Exchange index (PSEi) closed 0.72% up.
Philippine Chamber of Commerce and Industry President George T. Barcelon said the appointment of these “seasoned and competent economic leaders” would boost the confidence of local and foreign businesses.
“We believe they would do good in managing our fiscal affairs. As you know, we are faced with critical issues such as the huge debt deficit, and the need for post pandemic reforms and programs to sustain recovery, among others,” Mr. Barcelon said in a statement.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said the appointees’ “wealth of experience” would be an advantage for the incoming administration’s economic team.
“The appointments will help ensure greater stability, order, and predictability on the local economy and financial markets. These appointments also help provide a more conducive environment for business and investment activities,” he said.
In an e-mail, Pantheon Chief Emerging Asia Economist Miguel Chanco said it may be “a bit of gamble” to move Mr. Diokno from the BSP at a time of rising inflation and policy normalization.
“(Mr. Diokno will) definitely bring some welcome credibility in the post of Finance Secretary, which is much-needed given the Philippines’ huge budget blowout over the past two years and the urgency to consolidate the country’s finances as soon as possible,” he said.
The BSP earlier this month raised interest rates for the first time since 2018, as it sought to curb intensifying inflationary pressure. Inflation surged to a three-year high of 4.9% in April due to the spike in oil and food prices.
The appointments signal a continuity in economic policy, Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University said in a Messenger chat.
“What we need to do is to address the structural weaknesses that were exposed by the pandemic. What we will see may mostly be a combination of monetary and fiscal policies intended to pay debts and minimize inflation. This will not be enough to produce growth,” he said.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said Messrs. Diokno and Medalla are “well aware of the challenges that the country faces, including high debt levels, accelerating inflation and rising borrowing costs.”
“Next question is who will replace Medalla next year as BSP governor for a full six-year term,” he said via e-mail.
TAX RELIEFMeanwhile, Mr. Marcos said an economic recovery plan should be put in place before considering the fiscal consolidation plan of the outgoing Finance Secretary Carlos G. Dominguez III.
“We have to have an economic recovery plan (first) and fiscal policy will follow,” he said.
The Finance department on Wednesday presented a fiscal consolidation plan for the next administration, which includes imposing new taxes and deferring personal income tax reductions in order to generate more revenues to pay off the country’s ballooning debt. As of end-March, National Government debt stood at a record P12.68 trillion.
Mr. Marcos said they are considering tax relief for sectors most affected by the pandemic such as micro, small and medium enterprises (MSME) and the agriculture sector.
“For MSMEs, we can reduce (tax), give tax holiday, tax amnesty, we’re studying it right now, microfinancing. We want them to come back… We want to reduce as much of the tax collections from those who are suffering from the pandemic, MSMEs, agri sector, transport,” he said.
Mr. Marcos was also cool to the proposal to immediately suspend the excise tax on fuel products, as the government would need funds for its projects. Instead, he said he is considering subsidy programs for the transport sector.
“In terms of oil excise tax, I think we still have to look at that very well. We can support those areas hit by rising oil prices — number one there was transport,” he said.
President Rodrigo R. Duterte’s administration rejected calls to suspend the excise tax on fuel, saying it could reduce government revenues by billions. Instead, cash subsidies were given to the transport and agriculture sector. — Kyle Aristophere T. Atienza with inputs from Tobias Jared Tomas

Source: https://www.bworldonline.com/top-stories/2022/05/27/451174/marcos-names-more-economic-managers/

For next Finance chief, the top priority is debt management

By | Property News

BANGKO SENTRAL ng Pilipinas (BSP) Governor Benjamin E. Diokno on Thursday said he will prioritize debt management when he assumes his new post as Finance secretary in July.
“Maybe the first item in the agenda will be the sustainability of our public debt,” Mr. Diokno said at a briefing on Thursday afternoon, hours after President-elect Ferdinand R. Marcos, Jr. announced his appointment.
The National Government’s debt stood at a record P12.68 trillion as of end-March, equivalent to 63.5% of gross domestic product (GDP). The debt-to-GDP ratio exceeds the 60% threshold considered manageable by multilateral lenders for developing economies.
“Our debt-to-GDP ratio is slightly above the 60% limit. I don’t think that is really a cause for concern because as long as we continue to grow at around 6-7% on a sustainable basis, we can easily outgrow our debt,” Mr. Diokno said.
However, it is equally important to look at the sustainability of the debt, he added.
“This is, of course, to assure everybody, the domestic audience and our international credit watchers that we are serious about consolidating our fiscal resources so that we are able to reduce our debt and deficit-to-GDP ratio over time,” Mr. Diokno said.
In a recently published discussion paper by the Philippine Institute for Development Studies, the debt-to-GDP ratio is estimated to peak at 66.8% until 2024.
Also, Mr. Diokno said they will look at the fiscal consolidation plan proposed by outgoing Finance Secretary Carlos G. Dominguez III.
“This government has done a lot of reforms. The tax system that we are leaving to the next government, which I’m going to receive for the incoming government, is much much better than the tax system that we inherited from the previous administration. I’m not saying it’s a perfect tax system. There can be some improvements,” he said.
The Department of Finance (DoF) proposed three tax reform packages that it described as “fair, efficient and corrective,” which will be implemented from 2023 to 2025. This includes imposition of new taxes on digital services, luxury goods and single-use plastic; deferment of personal income tax reductions for three years; and a repeal of some tax exemptions.
The Bureau of the Treasury has estimated the government needs to raise P249 billion every year in revenues to avoid resorting to borrowings to pay the P3.2-trillion additional debt incurred during the pandemic.
Mr. Dominguez also warned the government should not cover existing debt by borrowing more or reducing spending. — Keisha B. Ta-asan

Source: https://www.bworldonline.com/top-stories/2022/05/27/451173/for-next-finance-chief-the-top-priority-is-debt-management/

Gov’t to borrow P250 billion from domestic market in June

By | Property News

THE NATIONAL Government plans to borrow P250 billion from the domestic market in June, the Bureau of the Treasury (BTr) said on Wednesday.
Next month’s borrowing plan is 25% higher than the P200-billion program for May. However, the government raised just P141.31 billion from domestic borrowings this month.
The BTr will hold auctions for Treasury bills (T-bills) every week, which is projected to raise P75 billion.
The auctions for Treasury bonds (T-bonds) are projected to generate P175 billion.
According to the BTr, P5 billion worth of 91-day, 182-day, and 364-day T-bills will be offered on May 30, June 6, 13, 20, and 27.
For the long-term tenors, BTr is looking to raise P35 billion in three-year T-bonds on May 31; P35 billion in five-year debt papers on June 7; P35 billion in seven-year instruments on June 14; P35 billion in 10-year securities on June 21; and in seven-year papers again on June 27.
National Treasurer Rosalia V. de Leon said in a Viber message to reporters that the “volume has been calibrated based on domestic requirement and past rejections.”
The government spent heavily on its coronavrius disease 2019 (COVID-19) pandemic response, putting more pressure on revenue generation.
A trader said in an e-mailed message that he does not expect the Treasury to scale down its scheduled borrowings in the coming months.
“Not much has changed in the borrowing program of the BTr versus this month’s schedule,” the trader said. “[The] only (difference) is the added week for June, but weekly auctions are still the play.”
The trader said that markets were concerned with bond supply as the BTr has not “tightened the spigot.”
“With this, and this month’s CPI (consumer price index) focus for June, [the] market will continue to be defensive moving forward.”
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the higher borrowing plan reflects the need to finance the widening budget deficit as the government continues to spend for infrastructure projects and pandemic response programs.
The National Government recorded a P187.7-budget deficit as of end-March. Its total debt surged to a record-high P12.68 trillion as of end-March.
“(Government security) maturities and issuances tend to be less shortly before the elections and tend to increase again after the elections, a pattern consistently seen in recent years,” Mr. Ricafort said.
The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year.
The National Government has a gross domestic borrowing program of P1.91 trillion this year. Of this amount, T-bills are expected to bring in P52 billion, while the fixed-rate T-bonds are seen to raise P1.86 trillion. — Tobias Jared Tomas

Source: https://www.bworldonline.com/top-stories/2022/05/27/451172/govt-to-borrow-p250-billion-from-domestic-market-in-june/

BSP signals rate hike in June

By | Property News

THE PHILIPPINE central bank is likely to raise its key interest rate by another 25 basis points (bps) at its next policy meeting in June.
“We are probably inclined to have another 25-basis-point adjustment on our next Monetary Board meeting which is on June 23,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said at a briefing on Thursday.
The BSP delivered its first interest rate hike since November 2018 when it raised its benchmark interest rates by 25 bps on May 19 as it tries to temper rising inflationary pressures.
The BSP upwardly revised its average inflation forecast for 2022 to 4.6% from the previous forecast of 4.3%, exceeding the 2-4% target band. For 2023, the BSP’s inflation forecast was hiked to 3.9% from 3.6% previously.
The Development Budget Coordination Committee (DBCC) adjusted the average inflation rate assumption to 3.7-4.7% this year, from 2-4% previously, reflecting the impact of soaring oil and food prices caused by the ongoing Russia-Ukraine war and supply chain disruptions.
Inflation climbed to 4.9% in April, the highest in more than three years.
“The economy is strong enough to weather any further hike in local policy rates,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“Furthermore, policy rate hike/s in the coming months could also be needed to address risk of second-round inflation effects after the approved minimum wage hikes and possible hike in transport fares, all of which would lead to higher prices of other affected goods and services in the economy,” Mr. Ricafort added. — Keisha B. Ta-asan

Source: https://www.bworldonline.com/top-stories/2022/05/27/451171/bsp-signals-rate-hike-in-june/