Amid reports of possible money laundering, the Bank of the Philippines Islands (BPI) said only a fourth of the total global transaction of its Australian-based remittance partner, Westpac Banking Corp., was coursed through them.

Owen Cammayo, BPI head of Corporate Affairs and Communications, said that of the 23 million Westpac transactions globally cited by Financial intelligence unit Australian Transaction Reports and Analysis Center (AUSTRAC) , only 0.27 percent was coursed through BPI.

From July 2016 to October 2019, a total of only 61,687 transactions were coursed through BPI and credited to various recipient banks in the Philippines, Cammayo said.

“Of this number, 34 percent was credited to BPI accounts, the second largest in terms of transaction count,” Cammayo said.

BPI and Westpac entered into a remittance tie-up arrangement for the use of Westpac’s LitePay platform back in 2016, Cammayo said.

He added that Westpac’s clients used the platform to send remittances to the Philippines for BPI to fulfill, whether for credit to the accounts of BPI clients or for those of other Philippine banks.

“At the time of initiation of the partnership, Westpac made representations and warranties that they are in compliance with all applicable regulations,” Cammayo said.

BPI suspended its use of Westpac LitePay on Nov. 24, 2019, immediately upon learning of the Australian authorities’ investigations against Westpac.

AUSTRAC has launched legal action last month accusing Westpac of enabling 23 million payments in breach of anti-money laundering laws possibly related to child exploitation.

Cammayo said the there is no formal investigation by the Bangko Sentral ng Pilipinas (BSP) on BPI with respect to Westpac.

“The BSP has requested for certain information regarding Westpac LitePay transactions and we have submitted it to them. The alleged failures of Westpac’s LitePay facility are a very serious concern to us. We have always worked closely with the regulators and authorities to ensure continued compliance with both domestic and global money laundering laws and regulations,” Cammayo said.

On Tuesday, Chuchi Fonacier, BSP Deputy Governor said initial investigations conducted by BPI revealed it was used as a conduit for money transfer of Westpac.

“(The funds were channeled to) about 10 banks. So we’ll also be reviewing the transactions,” she added.

But Fonacier said the transactions then were not considered suspicious as it goes below the P500,000 threshold of the Anti Money Laundering Council (AMLC).

“It’s very retail. That’s why (the process of reviewing is) very tedious. But so far we’ve identified the other banks that became the recipient of the remittances from Australia,” Fonacier said.

Fonacier, however, reiterated that banks should still practice due diligence before clearing money transfers.

Fonacier did not disclose the name of the banks involved.

The Bangko Sentral ng Pilipnas (BSP) yesterday released the new P20 coin and the “enhanced” P5 coins with features that make it more distinct from other coins circulated under the BSP’s New Generation Currency (NGC) Coin Series.

Benjamin Diokno, BSP Governor, said this reaffirms “BSP’s commitment to not only uphold the highest standard of excellence, but also listen to the public’s observations as it endeavors to bring central banking closer to the people.”

Diokno said that the decision to release P20 coin was based on a study by the University of the Philippines that showed the 20-Piso banknote is the most-used denomination for payments across the country.

As a result, it is easily rendered unfit for circulation and returned to the BSP for replacement.

Diokno explained the use of the 20-Piso coin–which is now the highest denomination in the NGC Coin Series launched in 2018–is more cost-efficient to produce as it will have a longer circulation life than a 20-piso banknote.Francisco Dakila, BSP Deputy Governor, said although minting a P20 coin is more expensive than printing a corresponding banknote, the lifespan of a coin is longer.

“It costs us P2 to produce the P20 banknote and that would usually last for only six months. Whereas the coin will cost us P10, but it will last for 10-15 years,” Dakila said.

The new 20-Piso NGC coin shall co-exist as legal tender with the currently-circulating 20-Piso NGC banknote, which will be removed from circulation through natural attrition.
Dakila said BSP estimates show the P20 banknote will be out of circulation by 2021.

The new coin is bi-color and retains major elements of the 20-Piso banknote.

The enhanced 5-Piso NGC coin, meanwhile, has 9 sides to make it more distinct from other denominations in the NGC Coin Series.

The P20 coin’s front side features Manuel Quezon, the first president of the Philippine Commonwealth.

Its reverse side shows the BSP logo and the Malacañan Palace, the official residence of the Philippine President. Quezon was the first Philippine president to occupy it in his term.

Consistent with the NGC Coin Series which highlights native flora, the 20-Piso coin showcases the Nilad, the plant from which the name of the country’s capital, Manila, is believed to have originated.

BSP said the bi-color 20-Piso NGC coin is easily distinguishable from other coins in the series. It is also highly secure, as it has microprints and an identifiable edge to deter counterfeiting.

The 5-piso coin also retains the design elements of the round NGC coin, with Andres Bonifacio, the father of the Katipunan, on the front side and the Tayabak plant, on the reverse.

It also retains the security features of the round coin, including the microprints “Republika ng Pilipinas” and “Bangko Sentral ng Pilipinas.”

Diokno said the design of the country’s newest coins is approved by the President of the Philippines.

The new coins will be circulated before Christmas.

After five consecutive months of slowdown, inflation in November accelerated to1.3 percent due to the uptrend in prices of tobacco, alcoholic beverages and utilities.

Inflation in October 2019 was recorded at 0.8 percent and in November 2018, 6.0 percent.

The Philippine Statistics Authority (PSA) said inflation surged also due to higher price increases in the indices of housing, water, electricity, gas, and other fuels; furnishing, household equipment and routine maintenance of the house; health; and, communication.
PSA, however, noted slower annual gains were observed in the indices of clothing and footwear and restaurant and miscellaneous goods and services.

The index of the heavily-weighted food and non-alcoholic beverages registered an annual growth of zero percent in November 2019, from 0.9 percent annual drop in October 2019.
Excluding selected food and energy items, PSA said core inflation remained at its previous month’s annual rate of 2.6 percent.

November’s uptick, however, was expected by both the country’s economic managers and analysts.

Benjamin Diokno, Bangko Sentral ng Pilipinas Governor, said inflation was “within the BSP’s expected range of 0.9 – 1.7 percent for the month” and

The resulting year-to-date average inflation rate of 2.5 percent remained well within the government’s target range of between 2 and 4 percent.

“The latest inflation outturn remains consistent with the BSP’s prevailing assessment that inflation has bottomed out in October and is expected to gradually approach the midpoint of the target range in 2020 and 2021. The BSP will carefully consider all the latest developments here and abroad at its upcoming monetary policy meeting next week to ensure that the monetary policy stance remains consistent with the BSP’s price stability objective,” Diokno said in a statement.

The National Economic and Development Authority said the government should ensure sufficient food supply and manage upside risks such as the impact of Typhoon Tisoy and the African Swine Fever (ASF) to handle inflation.

“We expect the 2019 full-year inflation to settle within the government’s target,” said NEDA Undersecretary for Regional Development and Officer-in-Charge (OIC) Adoracion M. Navarro.

Nicholas Antonio Mapa, Senior Economist at ING Bank Manila, said “inflation to trend higher from hereon.”

“With base effects from last year’s inflation spike fading quickly, we expect the acceleration in inflation to continue going into 2020 and settle at around 3 percent throughout the most part of next year.” Mapa said.

“Given the higher than expected inflation print, we expect BSP Governor Diokno to refrain from slashing policy rates at the next policy meeting. Diokno had indicated that he remains data-dependent with inflation being his primary consideration for policy rate adjustments.  Given his dovish leaning however, Diokno could resume his rate cut cycle as early as 1Q 2020,” Mapa added.

The Monetary Board last month decided to maintain the key rates of the Bangko Sentral ng Pilipinas.

The BSP’s overnight reverse repurchase (RRP) facility remains at 4 percent. The interest rates on the overnight deposit and lending facilities were accordingly held unchanged at 3.5 percent and 4.5 percent, respectively.

PSA said inflation in the National Capital Region (NCR) picked up further by 1.5 percent in November 2019. Inflation in areas outside NCR, likewise, went up by 1.2 percent.

Six regions in areas outside NCR had higher positive annual rates during the month.  The highest inflation among the regions in areas outside NCR was still noted in  Region III (Central Luzon) at 2.2 percent, while the lowest remained in Region IX (Zamboanga Peninsula) at -0.5 percent.

As inflation is likely to settle within the government’s target for this year, the Monetary Board yesterday decided to maintain the key rates of the Bangko Sentral ng Pilipinas (BSP).

Francisco Dakila Jr., BSP deputy governor, said the BSP’s overnight reverse repurchase (RRP) facility remains at 4 percent.

The interest rates on the overnight deposit and lending facilities were accordingly held unchanged at 3.5 percent and 4.5 percent, respectively.

“Latest baseline forecasts of the BSP continue to indicate that inflation is likely to settle within the lower half of the target range of between 2 and 4 percent with the balance of risks to the inflation outlook leaning toward the upside for 2020 and toward the downside for 2021,” Dakila said.

For 2019, the Monetary Board lowered the full-year inflation forecast to 2.4 from 2.5 percent.

For the next two years, the forecast is pegged at 2.9 percent.

Inflation continued to ease in October registering 0.8 percent, from 0.9 percent the previous month, as the heavily-weighted food and non-alcoholic index continue to drop.

The Philippines Statistics Authority said this is the fifth consecutive month that inflation has slowed down this year.

October’s figure is also the slowest since May 2016.

But Dakila stressed that inflation is “likely to have bottomed out in October and it will start moving close to mid-point of the target by 2020 and 2021 as base effects starts to dissipate.”

“Again, this trend will be helped by several factors including the tapering off of the impact of the rice tariffication on inflation (and) the acceleration of domestic growth,” Dakila said.

Other upside risks to inflation over the near term emanate mainly from the potential impact of the African Swine Fever outbreak on food prices and from potential volatility in oil prices amid geopolitical tensions in the Middle East.

At the same time, weak global economic prospects continue to temper the inflation outlook, as uncertainty over trade policies weigh down on global economic activity and demand.

Meanwhile, Dakila said inflation expectations based on the BSP’s survey of private sector economists also remain well-anchored within the inflation target range.

“Notwithstanding prospects in the global front, firm private domestic spending and sustained progress in policy reforms will serve as a buffer against external headwinds. Given these considerations, the Monetary Board believes that prevailing monetary policy settings remain appropriate,” Dakila said.

“A prudent pause in monetary adjustments will enable the cumulative 75-basis-point reduction in policy rates as well as the cut in reserve requirement ratios to continue working their way through the economy,” he added.

Nicholas Mapa, ING Bank senior economist, said the Monetary Board is “waiting for the dust to settle” and the move is “appropriate for now.”

“After quite a busy 2019, the ‘pro-growth’ Governor (Benjamin Diokno) decided it was time to weigh the impact of his recent accommodative moves to close out the year. Diokno, who had previously vowed to ‘normalize’ rates, has kept the mantra of ‘data dependency’ in guiding his policy decisions and we expect him to monitor inflation forecasts and the economy’s overall growth momentum going forward,” Mapa said.

But given a possible miss on the growth objective, Mapa said they expect Diokno to come out swinging in 2020 with up to 50 basis points worth of policy rate cuts to help bolster growth momentum.

“Next year, the government will be chasing a higher growth target of 6.5-7.5 percent and BSP may likely need to shore up the fiscal stimulus while inflation dynamics allow them to do so. We also expect BSP to resume carry out its phased and pre-announced reductions to the reserve requirement ratio (RRR) in 2020 as Diokno looks to align the Philippines’ RRR with regional peers,” Mapa said.

Inflation continued to ease in October, at 0.8 percent from 0.9 percent the previous month as the heavily-weighted food and non-alcoholic index continue to drop.

The Philippines Statistics Authority said this is the fifth consecutive month that inflation has slowed down this year.

October’s figure is also the slowest since May 2016.

“The downtrend in the inflation in October 2019 was mainly due to the 0.9 percent annual drop registered in the heavily-weighted food and non-alcoholic beverages index,” PSA said.

Specifically, annual rates declined further in the indices of rice at 9.7 percent; and sugar, jam, honey, chocolate and confectionery, 4.3 percent. In addition, annual decreases were still noted in the indices of corn at 3.9 percent and vegetables at 0.8 percent.

Contributing to the decline is the transport index which registered 1.7 percent during the month.

Slower annual increments were also noted in housing, water, electricity, gas, and other fuels index; furnishing, household equipment and routine maintenance of the house index; and, health, and restaurant and miscellaneous goods and services index.

Annual increases were higher in the indices of alcoholic beverages and tobacco at 16.5 percent; and clothing and footwear at 2.8 percent.

PSA also said that excluding selected food and energy items, core inflation decelerated further to 2.6 percent in October.

In the previous month, core inflation was registered at 2.7 percent and in October 2018, 4.9 percent.

Benjamin Diokno, Bangko Sentral ng Pilipinas (BSP) governor, said the October figure was within the BSP’s forecast range of 0.5 to 1.3 percent.

“The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation has likely bottomed out in October and could start to pick up slightly in the remaining months of 2019 as base effects start to dissipate,” Diokno said.

The BSP continues to expect average inflation to firmly settle within the target range of between 2 and 4 percent for this year up to 2021.

“Global crude oil prices have started to stabilize following the recent volatility caused by geopolitical tensions in the Middle East. Meanwhile, deepening trade tensions between China and the US along with other countries in the region have raised global economic uncertainty, which pose a downside risk to the inflation outlook,” Diokno said.

“The government has been driven and focused in its anti-inflationary efforts this year. We hope to further keep inflation manageable and within the government’s target,” said Adoracion Navarro, officer-in-charge and Undersecretary for Regional Development of the National Economic and Development Authority.

Navarro said although the government welcomes the easing of inflation, the country must be in the lookout for upside risks such as cases of African Swine Fever (ASF), which have been observed so far in Rizal, Pangasinan, Bulacan, Nueva Ecija, Pampanga, Cavite and Quezon City.

“The livestock industry in the said ASF-stricken areas, which accounts for 21.7 percent of the country’s total hog production last year, remains at high risk. The government and private companies must collaborate to manage, contain, and control the spread of the disease,” Navarro said.

Navarro added stricter biosecurity measures must be enforced and quarantine checkpoints and disinfection facilities must be expanded and placed in key gateways such as seaports, airports, and expressways to prevent the spread of ASF.

Salvador Panelo, chief presidential legal counsel, said Malacanang welcomed the announcement and said that “this should be good news to all Filipinos, especially to President Duterte’s doubters or cynics.”

“Bringing a comfortable life for all Filipinos, which includes taming inflation, is the foremost socioeconomic goal of the Duterte Administration,” he said.

Panelo said the latest inflation rate is a testament that the President’s strong political will which, together with his economic team’s sound and working macroeconomic policies and measures, contributed to the downward trend of prices and goods.

Per region, PSA said inflation was higher in National Capital Region (NCR) at 1.3 percent from 0.9 percent the previous month.

The uptrend was brought about by  higher annual increments in the indices of food and non-alcoholic beverages, and clothing and footwear, both registered at 1.8 percent; and alcoholic beverages and tobacco at 10 percent.

Inflation in areas outside NCR decelerated further to 0.7 percent in October from 0.9 percent in September.

Declines were still registered in the indices of food and non-alcoholic beverages at 1.4 percent; and transport, 1.3 percent.

Twelve regions in areas outside NCR either had negative or lower annual rates in October 2019.

The lowest annual rate of -1.3 percent during the month was still observed in Region IX (Zamboanga Peninsula), while the highest inflation of  2.3 percent was recorded in  Region III (Central Luzon).

Inflation, or the rate at which the average price of selected goods and services increases over a period of time, slowed down further in August to a near three-year low.

The Philippine Statistics Authority said  August inflation decelerated further to 1.7 percent last month from 2.4 percent in July and 6.4 percent in August last year. Last month’s level is the lowest inflation since October 2016 when the rate was 1.8 percent.

PSA said the slowdown was mainly “due to the slower annual increase in the index of the heavily-weighted food and non-alcoholic beverages at 0.6 percent.”

Other commodity groups that posted slower annual rates during the month are housing, water, electricity, gas, and other fuels; health; recreation and culture; and, restaurant and miscellaneous goods and services.

PSA also said the transport index, which dropped by 0.2 percent, also contributed to the downtrend of inflation this month.

Higher annual increments were noted in the indices of alcoholic beverages and tobacco; clothing and footwear; and education.

Excluding selected food and energy items, core inflation eased further to 2.9 percent in August from 3.2 percent July and 4.8 percent in August last year.

Inflation now averages 3 percent which is at the midpoint of the government’s full-year target range of between 2 and 4 percent.

The August level is also within the monthly forecast range of the Bangko Sentral ng Pilipinas.

“The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation will continue to decelerate in the third quarter of this year and pick up slightly in the fourth quarter,” BSP Gov. Benjamin Diokno said.

Diokno said BSP continues to expect average inflation to firmly settle within the target range as “ample domestic food supply conditions along with lower global oil prices have contrib1uted to a manageable inflation environment.”

“Deepening trade tensions between China and the US along with ongoing geopolitical risks have raised global economic uncertainty which poses a downside risk to the inflation outlook,” Diokno said.

He said  the BSP will continue to keep a close watch over latest economic developments here and abroad to “ensure that the monetary policy stance remains consistent with the BSP’s price stability objective while being supportive of economic growth.”

Decelerating inflation allowed the Monetary Board to cut rates twice, totaling 50 basis points, to buffer the economy from external forces like the US-China trade war.

Inflation in NCR continued to move at a slower pace during the month at 1.4 percent.

Inflation in areas outside NCR also eased further to 1.8 percent.

PSA noted that Region IX (Zamboanga Peninsula) exhibited the lowest inflation of 0.5 percent in August 2019, while MIMAROPA Region still registered the highest inflation at 4.6 percent.

Meanwhile, the National Economic and Development Authority expects the Rice Liberalization Act to further bring down the price of rice.

In a statement, NEDA said rice deflation was also observed for the fourth consecutive month, reaching -5.2 percent in August 2019 from -2.9 percent in July.

“The Rice Liberalization Act (RLA) continues to help increase rice supply in the country. This allows more Filipinos to access cheaper rice. This is especially helpful since a large number of families spends almost 30 percent of their total food expenditure on rice,” NEDA Undersecretary for Policy and Planning and currently Officer-in-Charge (OIC) Rosemarie Edillon said.

Domestic retail and wholesale price of rice is now lower compared to the price levels last year, down by 10-13 percent year-on-year or around P4.20-5.20 per kilo. This is due to the higher inventory, increasing by 31.9 percent in July 2019.

Malacanang welcomed the continued downward trend in inflation saying this is positive proof that  macroenomic policies and measures government put in place  are sound and resilient in curbing soaring prices.