Construction of new buildings alongside older establishments is seen within the business district in Makati City. S&P projects Philippines’ GDP to expand by 5.4 percent this year. (Reuters photo)
Credit rating agency S&P Global Ratings yesterday affirmed its investment-grade rating of “BBB+” long-term and “A-2” short-term on the Philippines with the outlook remaining stable.
Despite the pandemic and the economic lockdowns that went with it, the Philippines remains among a few of the countries around the world that were able to maintain its investment-grade rating.
Aside from S&P, Moody’s credit rating for the Philippines was also affirmed at Baa2 with stable outlook, while Fitch’s credit rating was last reported at BBB with stable outlook.
Tokyo-based Rating and Investment Information also maintained its rating of BBB+ with positive outlook.
Japan Credit Rating Agency (JCR) upgraded the Philippines’ credit rating by a notch from BBB+ to A- in 2020, citing the country’s resilience.
In a statement, S&P Global said the stable outlook “reflects our expectation that the Philippine economy will maintain healthy growth rates and the fiscal performance will materially improve over the next 24 months.”
“The ratings on the Philippines reflect the country’s above-average economic growth potential, which should drive constructive development outcomes and underpin broader credit metrics,” S&P Global said.
It added the ratings benefit from the Philippines’ strong external settings but warned that “the Philippines’ low GDP (gross domestic product) per capita relative to other investment-grade sovereigns and evolving institutional settings temper these strengths.”
“The government’s fiscal and debt settings have deteriorated due to the economic fallout from the pandemic and the associated extraordinary policy responses. Fiscal buffers built through a long record of prudence before the pandemic have thinned, but we expect a consolidation as the economy recovers,” S&P Global said.
S&P projects the Philippines will achieve a real GDP growth of 5.4 percent in 2023, considering the impact of external macroeconomic developments and a high base.
It noted there are “near-term risks to growth, but economic outlook remains solid for the longer term.”
“The Philippines’ economic growth has been robust in 2023 following a strong recovery last year. The pace of the growth will, however, dip as inflationary pressures and sluggish macroeconomic global conditions persist. This is reflected in data for the first three quarters of 2023, during which the economy grew by an average of 5.5 percent year-on-year compared with an average growth of 7.7 percent during the first three quarters of 2022,” it said.
Inflation, according to S&P, has shown signs of easing in recent months, decelerating to 4.9 percent in October 2023 from 5.8 percent in 2022.
Slower growth of the world economy, including that of China and the United States, the Philippines’ biggest trading partners, is also projected to drag down the economy.
“Nonetheless, economic growth in the Philippines should be well above the average for peers at a similar level of development, on a 10-year weighted average per capita basis.
The country has a diversified economy with a strong record of high and stable growth. This reflects supportive policy dynamics and an improving investment climate,” S&P said.
GDP per capita could rise to about $3,903 in 2023 and $4,273 in 2024, the agency noted, with real GDP per capita growth averaging about 4.4 percent per year over 2023-2026.
The Tromso harbor features piers and promenades where locals and visitors can take strolls, enjoy the maritime ambiance, and take in the views. (Photos by Jimmy Calapati)
From Norway’s capital, Oslo, we ventured further north to the world’s northernmost city.
Our target: to see what is often considered one of the most elusive yet sought-after natural phenomena that only occurs in the Arctic Circle–the Aurora Borealis.
As the plane descended into Tromso, a blanket of snow-covered landscape welcomed us.
Stepping onto the frosty ground, the crisp Arctic air signaled the beginning of a winter adventure like no other. Tromso, a city draped in white, felt like a scene from a fairy tale.
All 7 of us were first-time visitors–Tromso virgins. As a tourist from the Philippines, we know we might experience a significant contrast in climate, culture, and natural surroundings.
Tromso is often referred to as the world’s “northernmost city” and “Arctic City” due to its geographical location within the Arctic Circle and its status as one of the northernmost urban centers in the world.
Coming from a tropical country, October can be a unique and exciting experience as it marks the beginning of the Arctic winter.
Luxury travel
The expenses associated with traveling to Tromso from the Philippines can vary based on several factors, including the time of year, travel preferences, and the duration of your stay.
While a visit to any of the Scandinavian countries must be on every traveling Pinoy’s bucket list, a trip to the region is considered luxury travel.
The cost of flights to Tromso will be a significant portion of expenses as there are no direct flights currently from the Philippines to the Scandinavian countries. Prices can also vary based on the airline, time of booking, and whether you choose economy or premium class.
Accommodation costs depend on the type of lodging you choose, ranging from budget hostels to luxury hotels. But do note that the budget type in this city may be luxury level in others.
Dining costs can vary depending on where and what you choose to eat. Tromso has a range of restaurants with different price points. You may save money by occasionally opting for grocery store or market purchases for meals. But it is still expensive–a burger meal from a global fastfood chain costs around $13 or P720.
Participating in activities such as Northern Lights tours, fjord cruises, or dog sledding will also add to your expenses. Consider potential fees associated with currency exchange and international transactions. Using credit cards or withdrawing cash may incur additional charges.
The time of year you choose to visit Tromso will also impact your expenses. Winter months may have higher costs due to winter clothing and equipment rental for activities like dog sledding or skiing.
Modern and old
While the Aurora Borealis becomes visible only at night, it doesn’t mean you’ll just stay in your room during the daytime. Rich in history and culture, Tromso offers some of the region’s must-see destinations.
The Arctic Cathedral, with its distinctive triangular shape and striking glass mosaic, is a major landmark. Located on the mainland, it offers panoramic views of the surrounding mountains and fjords. The cathedral is not only an architectural marvel but also a symbol of the city’s rich cultural heritage.
Polaria is an arctic-themed experience center and aquarium, showcasing the unique flora and fauna of the region. It features interactive exhibits, seal feedings, and an underwater panorama providing visitors with a deeper understanding of the Arctic environment.
Tromso’s main street is Storgata, which is the central thoroughfare running through the heart of the city. It stretches from the waterfront in the west to the Tromso Cathedral in the east.
Storgata is lined with shops, boutiques, cafes, and restaurants. Visitors can explore a range of shops offering everything from local crafts and souvenirs to fashion and design. The city’s vibrant and diverse atmosphere is reflected in the mix of modern structures and older, traditional buildings.
In the winter months, Storgata is sometimes referred to as “Aurora Borealis Alley” because it is a popular spot for locals and tourists to gather for Northern Lights sightings due to its relatively darker surroundings compared to other parts of the city.
Tromso also is the home of the world’s northernmost Catholic Cathedral. The cathedral is designed in a Gothic Revival architectural style, giving it a distinctive and historic appearance. The foundation stone was laid in 1861, and the cathedral was consecrated als in the same year. The interior of the cathedral is adorned with religious artworks, statues, and stained glass windows.
Then there is the Tromso Harbor. A vibrant and picturesque area located in the heart of the city, it is surrounded by the city’s main attractions, including the city center and various cultural and historical landmarks.
The harbor features piers and promenades where locals and visitors can take strolls, enjoy the maritime ambiance, and take in the views. The waterfront is a popular spot for both daytime and evening walks.
Tromso Harbor serves as a starting point for various boat tours and activities. These may include fjord cruises, whale-watching tours, and expeditions to witness the Northern Lights.
The harbor’s accessibility makes it a convenient departure point for Arctic adventures.
Reindeer hotdog
Given its proximity to the Norwegian Sea, seafood plays a significant role in local cuisine.
Fresh catches like cod, salmon, shrimp, king crab, and various types of fish are often featured in dishes.
Reindeer meat is a staple in the Arctic region, and Tromso is no exception. Reindeer meat is often served in various forms, including steaks, stews, and sausages.
Berries like lingonberries and cloudberries are common in the region. Local dairy products like brown cheese and various cheeses from nearby farms may be featured in meals or on cheese platters.
Norwegian bread, particularly dark and hearty varieties, is commonly served. Flatbreads like crispbread are also traditional accompaniments.
Some restaurants in Tromso may offer themed dishes or cocktails inspired by the Northern Lights, adding a touch of creativity and local flair to the dining experience.
For the budget-conscious, Tromso is home to the northernmost branches of Burger King and 7-11. Local supermarkets also offer food items at a much lower price.
Many restaurants in Tromso also focus on providing Arctic culinary experiences. These may include tasting menus featuring a variety of local ingredients and flavors.
Hunt for Aurora
Perhaps one, if not the only, reason for visiting Tromso is the possibility of seeing the Aurora Borealis, or the Northern Lights. The city is one of the best places on Earth to witness this celestial display.
In recent decades, Tromso has seen a significant increase in tourism, driven in part by its reputation as a prime location for witnessing the Northern Lights.
There are various ways to experience the Northern Lights, ranging from guided tours to independent excursions. Visitors often embark on Northern Lights tours that take them to dark, secluded locations away from the city lights, maximizing the visibility of the auroras.
On our first night, our guide Eduardo Ygot, a Filipino, took us to Mount Storsteinen via the Fjellheisen cable car. At the top of Mount Storsteinen, approximately 420 meters above sea level, visitors are greeted with a breathtaking panorama of the city. The viewing platform offers unobstructed views of Tromso, the Arctic Cathedral, the neighboring islands, and, on clear nights, the Northern Lights during the winter months.
On our second, and last night, we opted to try out the Northern Lights dinner cruise.
Operated by Brim Explorer, the cruise provides an opportunity to witness the auroras while enjoying a meal on board. Ed tells us that cruises are often conducted in areas with minimal light pollution, increasing the chances of seeing the Northern Lights.
The anticipation of witnessing the Northern Lights in Tromso created for us a sense of excitement and wonder. However, the ethereal dance of the auroras remained elusive even after two consecutive nights of anticipation.
We were disappointed, definitely, as the expectation to witness the Northern Lights is a significant part of this journey.
But knowing that the Northern Lights are a natural phenomenon subject to various factors like solar activity, weather conditions, and light pollution, there’s a realization that nature follows its timeline.
Despite the disappointment, we realized that Tromso offers a myriad of other experiences.
The Arctic landscapes, the tranquil fjords, and the unique culture of the region become alternative sources of appreciation, helping to shift the focus from one particular expectation to the overall adventure.
As the trip passed without witnessing the Northern Lights, we began to accept that nature follows its rhythm, and the auroras are not guaranteed. In the end, the absence of the Northern Lights for two nights in Tromso becomes part of the overall adventure.
So, whether you’re an adventure seeker, nature lover, or cultural enthusiast, Tromso offers a unique blend of experiences that can make it a memorable addition to your travel bucket list.
The policymaking Monetary Board yesterday decided to keep the key rates of the Bangko Sentral ng Pilipinas as forecasts show inflation, although still above the government’s target, moderated over the policy horizon.
BSP’s Target Reverse Repurchase (RRP) Rate was kept at 6.5 percent. The interest rates on the overnight deposit and lending facilities will still be at 6 percent and 7 percent, respectively.
These rates were adjusted two weeks ago after the Board did an off-cycle action. Key rates are now at their highest in more than 16 years.
Francisco Dakila, BSP Deputy Governor, speaking for the Board, said “keeping the policy rate steady will allow previous policy interest rate adjustments, including the interest rate increase in October, to continue to work their way through the economy.”
While the risk-adjusted inflation forecasts remain above the government’s target range for 2024 at 4.4 percent, it was, however, lower than the 4.7 percent in the previous meeting in October and within the target for 2025 at 3.4 percent.
The target range for both years was set at between 2 and 4 percent.
“Supply-side inflation pressures continue to ease due in part to the National Government’s non-monetary interventions as well as seasonal factors,” Dakila said.
“Nevertheless, the balance of risks to the inflation outlook still leans significantly toward the upside, notwithstanding the recent improvement in food supply conditions.”
Key upside risks, according to Dakila, are associated with the potential impact of higher transport charges, electricity rates, and international oil prices, as well as of higher-than-expected minimum wage adjustments in areas outside the National Capital Region.
The impact of a weaker-than-expected global recovery as well as government measures to mitigate the effects of El Niño weather conditions, meanwhile, could reduce the central forecast.
“On balance, the rebound in Q3 GDP growth supports the view that the country’s medium-term growth prospects remain largely intact, even as pent-up demand continues to diminish in the near term. The BSP will also continue to assess how firms and households are responding to tighter monetary policy conditions, especially as credit growth continues to moderate,” Dakila said.
“The Monetary Board reiterates its support for the national government’s efforts to sustain growth through programmed spending, as well as non-monetary intervention measures to mitigate the impact of lingering supply-side factors on inflation,” Dakila added.
Dakila stressed the Monetary Board “continues to deem it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes fully evident and inflation expectations are firmly anchored.”
“Guided by incoming data, the BSP remains prepared to resume monetary policy tightening as necessary to steer inflation towards a target-consistent path, in line with its price stability mandate,” Dakila said.
Aris Dacanay, Economist for Asean of HSBC Global Research, said with the domestic economy returning back to balance, they expect the BSP to keep policy rates steady until inflation credibly returns to target by the third quarter of next year.
“The BSP remained hawkish, signalling its readiness to hike policy rates if an inflation shock reignites any second round effects,” Dacanay said.
He said with the dollar-peso rate below 57 and with inflation in October surprising to the downside, “there was no urgent need for the BSP to hike just after the off-cycle hike in October.”
“The off-cycle move was for the central bank to give itself legroom in case the Fed hiked in November, which it did not. Global rice and oil prices are also off their peaks altough still elevated, which also gives the BSP some room to breathe. Nonetheless, the BSP remained hawkish – strongly highlighting that inflation risks are heavily tilted to the upside while signalling its readiness to hike policy rates if needed,” Dacanay said.
“With the current monetary stance already cooling credit, boosting savings, and guiding the domestic economy back to balance, we continue to expect the BSP to keep the policy rate at 6.5 percent but reiterate the BSP’s sensitivity to inflation shocks. And the upside surprise in 3Q 2023 growth should have given the BSP space to tighten its monetary grip if an inflation shock ripples in the form of second round effects. With headline inflation still finding itself above the BSP’s 2-4 percent target band for almost two years, this hawkish stance by the BSP shows its commitment to fulfil its inflation mandate. We continue to believe that rate cuts are off the table until 3Q 2024, when inflation is credibly well within the BSP’s 2-4 percent target band and when the Fed begins cutting rates,” Dacanay added.
Visitors to Oslo often appreciate the Royal Palace not only for its architectural elegance but also for its role in Norwegian history. (Photos by Jimmy Calapati)
As the plane descended through a sea of clouds, the Scandinavian Peninsula emerged beneath. It was October, and the promise of autumn’s chilly weather hung in the air, setting the stage for a journey that would unveil the true heart of Norway’s capital city.
Visiting Oslo for the first time in October is a perfect time to explore a city known for its fusion of modernity and timeless charm. You’ll experience the city as it transitions into autumn, with the foliage turning beautiful shades of red and gold.
October can be quite chilly, so pack layers and warm clothing. Rain is possible, so a waterproof jacket and comfortable, waterproof shoes are advisable.
Whether you’re into hiking or simply enjoying a stroll, Oslo offers a wide range of tourist destinations.
The sculptures at Vigeland Park are impressive any time of year, but the fall foliage provides a beautiful backdrop. This park is the largest sculpture park in the world dedicated to a single artist, Gustav Vigeland.
Born in 1869, Gustav Vigeland was a Norwegian sculptor best known for his depictions of the human form. His work often explores themes of life, death, and the human condition. Vigeland spent much of his career working on sculptures for the park.
Whether strolling along its sidewalks, enjoying its shops, or attending cultural events, Karl Johans Gate is an iconic feature of Oslo.
The idea for Vigeland Park began in the early 20th century when Vigeland agreed with the city of Oslo. In 1921, a plot of land in Frogner Park was designated for the project.
Vigeland not only created the sculptures but also designed the layout of the park. Begin with the bridge, adorned with 58 bronze sculptures, showcasing the various stages of human life, from birth to death. These sculptures are known for their emotional intensity and realism.
The Fountain, another prominent feature of the park, is a large bronze structure depicting numerous figures engaged in various activities. It symbolizes the life force of humanity
The central axis of the park is a long, straight pathway featuring the famous Monolith, a towering sculpture carved from a single block of granite. It is intricately carved with intertwined human figures, representing the circle of life. The Monolith is surrounded by a mosaic of individual sculptures.
The park was officially opened to the public in 1940. Vigeland passed away in 1943, but his legacy lives on through Vigeland Park, which attracts millions of visitors each year who come to admire the artistry, symbolism, and emotional depth of Vigeland’s sculptures.
The next stop would be the Oslo Opera House and the nearby attractions at the waterfront.
The Oslo waterfront is a picturesque and vibrant area along the shores of the Oslo Fjord, offering a stunning blend of natural beauty, modern architecture, and cultural attractions. The combination of water, sky, and green spaces creates a tranquil and scenic environment.
The waterfront is home to several cultural landmarks, including the Oslo Opera House. The building is characterized by its contemporary and innovative design, featuring a sloping roof that allows visitors to walk to the top and enjoy panoramic views of the city and the Oslofjord.
Aker Brygge is known for its iconic features, including the “She Lies,” a floating stainless steel and glass artwork.
Construction of the opera house began in 2003 and was completed in 2007. The exterior of the opera house is clad in white Carrara marble and aluminum, contributing to its sleek and modern appearance.
The opera house houses the main performance venue, known as the Main House or the Operasalen, with a seating capacity of over 1,300. The hall is designed for opera and ballet performances and is renowned for its exceptional acoustics.
The Oslo Opera House has become a cultural hub in the city, hosting a variety of performances, including opera, ballet, concerts, and theatrical productions. Its design and cultural significance have made it a notable landmark in Oslo.
Aker Brygge is a prominent part of the waterfront, known for its modern architecture, shopping, dining, and recreational spaces. It was historically an industrial area along the Oslo Fjord, home to shipyards and factories. In the mid-20th century, as industrial activities declined, the area underwent redevelopment to transform it into a vibrant urban space.
In the 1980s, Aker Brygge underwent a significant transformation led by the Aker Brygge Foundation. The industrial facilities were replaced with contemporary buildings, creating a modern and attractive waterfront neighborhood.
The architecture is characterized by modern and innovative designs. The buildings feature a mix of residential apartments, office spaces, and commercial establishments, contributing to a dynamic and cosmopolitan atmosphere.
It is home to a diverse range of shops, boutiques, cafes, and restaurants, offering both local and international cuisines. The area is particularly popular for its waterfront dining options.
In addition to modern structures, the waterfront features historical architecture, such as the City Hall (Radhuset), which overlooks the harbor. The City Hall is renowned for its distinctive design and serves as a symbol of Oslo.
After a meal, walk towards the Royal Palace of Oslo, commonly known as the Oslo Palace, which is the official residence of the Norwegian monarch in the capital city.
The Royal Palace was built in the first half of the 19th century as the Norwegian residence for King Charles III, who was also King of Sweden. Construction began in 1824 and was completed in 1849.
The Angry Boy, probably the most famous sculpture in Vigeland Park.
The palace is designed in the Neo-Classical architectural style, characterized by symmetry, columns, and a sense of grandeur. It features a facade with a central projection and two wings, creating a balanced and imposing appearance.
While the Royal Palace is the official residence of the monarch, King Harald V, and Queen Sonja, it is also used for official events, state visits, and ceremonies. The palace is open to the public during the summer months, allowing visitors to explore its state rooms and learn about its history.
The palace is guarded by the King’s Guard, and the daily Changing of the Guard ceremony is a popular attraction for tourists. The guards, dressed in distinctive uniforms, march from the nearby military camp to the palace square.
Visitors to Oslo often appreciate the Royal Palace not only for its architectural elegance but also for its role in Norwegian history and its continued significance in contemporary royal affairs.
The Royal Palace is situated on a rise at the end of Karl Johans Gate, named after King Charles III John (Karl Johan in Norwegian).
Commonly known as Karl Johan, the main street of Oslo stretches from the Oslo Central Station to the Royal Palace, providing a central axis for the city.
The street has historical significance as it connects several important landmarks, including the Parliament of Norway (Stortinget), the University of Oslo, the National Theatre, and the Royal Palace. It serves as a central thoroughfare for both locals and visitors.
Karl Johan is a bustling street lined with shops, cafes, and restaurants. It is a popular shopping destination and a vibrant cultural hub, hosting events, parades, and celebrations.
Karl Johan is a key attraction for tourists exploring Oslo, offering a mix of historical architecture, modern amenities, and a lively atmosphere. It provides a glimpse into the city’s past and present.
Whether strolling along its sidewalks, enjoying its shops, or attending cultural events, Karl Johan remains a central and iconic feature of Oslo, embodying the city’s history and contemporary vibrancy.
At the southern end of Karl Johans Gate is the City Center, often referred to as Sentrum, which is the central business and cultural district of Oslo.
The City Center has historical significance, with roots dating back to the foundation of Oslo in the 11th century. Over the years, it has been the focal point for political, economic, and cultural activities in the city.
Oslo Central Station, located at the southern end of Karl Johans gate, serves as a central transportation hub, connecting various modes of transportation, including trains, buses, and trams.
The Oslo Opera House allows visitors to walk to the top and enjoy panoramic views of the city.
If time permits, do visit the Holmenkollen Ski Museum and Tower, closely tied to the history of skiing in Norway, one of the birthplaces of modern skiing.
The site is renowned for its ski jump, the Holmenkollbakken, which has been a venue for ski jumping competitions since 1892. Over the years, the ski jump has undergone several reconstructions and improvements.
The Ski Museum, established in 1923, is the world’s oldest ski museum. It is located at the base of the Holmenkollen Ski Jump and showcases the history of skiing, featuring a collection of artifacts, equipment, and memorabilia related to the sport.
The combination of the historic ski jump, the museum, and the tower make Holmenkollen a must-visit destination for those interested in the history and culture of skiing, as well as those seeking stunning views of Oslo and its surroundings.
Overall, Oslo offers a unique blend of natural beauty, cultural richness, and a high quality of life, making it a destination worth including on your travel bucket list. Just remember to check the opening hours of attractions, as some may have seasonal variations.
Slower annual increases in prices of food and non-alcoholic beverages pulled inflation lower to 4.9 percent in October, the Philippine Statistics Authority yesterday said.
This makes the national average inflation from January to October 2023 at 6.4 percent, still above the 2 percent to 4 percent target range of the government.
Dennis Mapa, national statistician and civil registrar general, said the downtrend in the overall inflation was primarily brought about “by the slower year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 7 percent in October 2023 from 9.7 percent in the previous month.”
Mapa said restaurants and accommodation services, with an inflation rate of 6.3 percent during the month from 7.1 percent in September , also contributed to the downtrend of the headline inflation.
He noted slower annual increases in the indices of alcoholic beverages and tobacco; furnishings, household equipment and routine household maintenance; health; transport; recreation, sport and culture; and personal care, and miscellaneous goods and services.
“Food inflation at the national level slowed down to 7.1 percent in October 2023 from 10 percent in the previous month. In October 2022, food inflation was higher at 9.8 percent,” Mapa said.
He said the deceleration of food inflation was primarily influenced by the lower annual growth of vegetables, tubers, plantains, cooking bananas and pulses.
This was followed by rice with an inflation rate of 13.2 percent in October from 17.9 percent in September.
Corn index also recorded an annual decrease of 2.4 percent during the month from an annual growth rate of 1.6 percent in September, while oils and fats index decreased further at 2.5 percent annual drop in October from 1.3 percent annual decline in the previous month.
Meanwhile, compared with their previous month’s inflation rates, higher year-on-year growth rates were observed in the indices of milk, other dairy products and eggs at 7.5 percent during the month from 7.3 percent in September, and fruits and nuts at 13.5 percent in October from 11.6 percent in the previous month.
Inflation rate in the National Capital Region (NCR) also decelerated to 4.9 percent in October from 6.1 percent in September, mainly brought about by the slower annual increase in food and non-alcoholic beverages.
Inflation rate in areas outside NCR likewise slowed down to 4.9 percent in October from 6 percent in September, also mainly due to the slower annual increase in food and non-alcoholic beverages.
Decisive, timely actions
Finance Secretary Benjamin Diokno said this positive development “is the result of the government’s decisive and timely actions in mitigating inflation.”
“The government will continue to implement a package of measures to address non-competitive market behavior to help ensure that rice and vegetable inflation will further decelerate for the rest of the year, while also supporting farmers and protecting the vulnerable,” Diokno said.
Rosemarie Edillon, National Economic and Development Authority (NEDA) undersecretary, said Secretary Arsenio Baliscan ordered that even as inflation has eased, “it is crucial to continue monitoring the prices of commodities particularly food, transportation, energy amid global challenges such as the geopolitical uncertainties and also the El Niño.”
She said among the measures that the government is implementing or plan to continue implementing to cushion the impact of inflation include subsidies or some form of aid for vulnerable sectors or those heavily affected, and importation to increase the food supply.
“We also need to address the longstanding challenges in agriculture and food production, and help our local farmers boost their productivity and resilience through investment in irrigation, R&D (research and development), post-harvest facilities and others,” Edillon added.
Apart from the inflation update, the Economic Development Group, during the sectoral meeting, also recommended the extension of the reduced tariff rates for the most favored nation under Executive Order (EO) No. 10, Series of 2022 until the end of 2024.
It will be subject to a mid-year review.
Under EO 10, which the President issued in December last year to address rising prices of commodities, the tariff rates for imported swine meat within the minimum access volume (MAV) quota will be 15 percent while those exceeding the quota will be 25 percent.
Tariff on corn within the MAV quota is 5 percent and those exceeding the quota is 15 percent, while tariff on rice for both within and excess of the MAV quota is 35 percent.
The tariff rate is effective until December 31.
The government will also intensify the utilization of Rice Competitiveness Enhancement Fund programs, such as farm mechanization, seed development, propagation and promotion, credit assistance, and extension services to improve the productivity of rice farmers, reduce production costs and link them to the value chain, Diokno added.
“The national government continues to undertake measures to mitigate non-food inflation across several fronts, namely on demand and supply management measures for energy and water; careful review of wage and fare hike petitions; and monitoring of the suspension of pass-through fees for delivery trucks as enforced under Executive Order No. 41,” Diokno said, adding the government also aims to complete the provision of financial assistance to the vulnerable sectors.
“This ensures the protection of the purchasing power of the most vulnerable families and the continued delivery of essential services such as public transportation and agricultural activities,” Diokno said.
Within target data
“There is no urgency for more local policy rate hikes amid stronger peso, lower global oil prices, better weather conditions that help ease food prices, as all of these factors are conducive to the anchoring inflation and the achievement of within target inflation data by early 2024,” said Michael Ricafort, RCBC chief economist.
Ricafort said provided there is no escalation of geopolitical risks particularly on the Israel-Hamas war and the effects on world oil prices and no large storm damage that tends to increase food prices for the rest of 2023, “headline inflation could ease further to a little over 4 percent from November to December and could ease further to below the 2 percent-4 percent BSP (Bangko Sentral ng Pilipinas) inflation target by January 2024 to even below 3 percent by January 2023 and 3 percent levels for February-March 2023.”
“Next local policy rate-setting meeting could match the pause in the latest Fed rate decision to maintain healthy interest rate differentials to support the stability of the peso exchange rate, import prices, and overall inflation,” Ricafort added.
In an off-cycle move, the Monetary Board late last month decided to raise the key rate of the BSP by 25 basis points to 6.50. The interest rates on the overnight deposit and lending facilities were also raised to 6.0 percent and 7.0 percent, respectively. With Jocelyn Montemayor
Vendors and shoppers at a public market in Quezon City. (Reuters Photo)
In an off-cycle move, the Monetary Board yesterday decided to raise the key rate of the Bangko Sentral ng Pilipinas by 25 basis points to 6.50 percent effective today.
Accordingly, the interest rates on the overnight deposit and lending facilities will be set to 6.0 percent and 7.0 percent, respectively.
Rates are now at their highest in more than 16 years.
Eli Remolona, BSP governor and Monetary Board chief, said the Board “recognized the need for this urgent monetary action to prevent supply-side price pressures from inducing additional second-round effects and further dislodging inflation expectations.”
“The Monetary Board deems it necessary to keep monetary policy settings tighter for longer until inflationary expectations are better anchored and a sustained downward trend in inflation becomes evident,” Remolona said.
The Board has been keeping the rates steady for the past 4 meetings at 6.25 percent. The next monetary policy setting meeting will push-through, as scheduled, on November 16.
Remolona stressed that the Board is prepared for a follow-through action “as necessary to bring inflation back to a target-consistent path, in keeping with its price stability mandate.”
Data from the Board showed latest baseline projections point to an “elevated inflation path over the policy horizon as upside risks continue to manifest.”
“Before today’s monetary policy action, the staff risk-adjusted forecast for 2024 was 4.7 percent, from 4.3 percent previously. This is well above the government’s target range. At the same time, second-round effects have broadened, including transportation fare increases and minimum wage adjustments. Inflation expectations have risen sharply, highlighting the risk of further second-round effects,” Remolona said in a statement.
He explained that the balance of risks to the inflation outlook “still leans significantly toward the upside, due mainly to the potential impact of higher transport charges, electricity rates, international oil prices, and minimum wage adjustments in areas outside the National Capital Region.”
“The Monetary Board is closely monitoring the impact of the increase in interest rates as these work their way through the economy. The Monetary Board also continues to support fiscal efforts to sustain growth through more rapid programmed spending, as well as non-monetary interventions to address persistent supply-side pressures on prices,” Remolona said.
Nicholas Mapa, ING senior economist, said “rate hikes will work to slow growth further, resulting in less demand side pressure and eventually slower demand pull inflation.”
“We expect further tightening from BSP in the near term as Remolona has indicated 6.75 percent as his potential terminal rate. Against this backdrop, we believe inflation could still remain elevated in 2024 unless supply side remedies are deployed while growth will likely grind slower to 4.7 percent in 2023 and 4.5 percent in 2024,” Mapa said.
Michael Ricafort, RCBC chief economist, said the surprise local policy rate hike “could be something preemptive in nature to better manage both actual inflation as well as inflation expectations, in terms of the need to better anchor inflation back to the central bank’s target of 2 percent-4 percent range.”
Ricafort said local inflation could still reach the BSP’s target of 2 percent to 4 percent by the first quarter of next year, instead of the earlier forecast of by the fourth quarter this year.
“If local inflation reaches the BSP’s target, this could support a possible cut in local policy rates in 2024 as signaled by some local authorities and could also support a possible cut in banks’ reserve requirements or at least the continued hawkish pause stance as signalled and reiterated recently,” he added.
Local policy rates, he said, would still be “largely a function of future Fed rate moves (pause or hike) as well, fundamentally, the local inflation trend, and the behavior of the peso exchange rate, which affects import prices and overall inflation.”
Thailand’s rich cultural heritage and vibrant cities provide an attractive backdrop for health and wellness activities. Visitors can combine medical treatments with leisure and sightseeing experiences. (Photos by Jimmy Calapati)
BANGKOK.– Thailand has been a popular destination for medical tourists seeking a wide range of medical and wellness services, including cosmetic surgery, dental procedures, fertility treatments, and more. The country’s reputation for quality healthcare services has contributed to its growth in this sector.
Thailand’s reputation for traditional therapies, spa treatments, and holistic wellness practices has also contributed to its appeal as a health and wellness destination.
The Thai government has also actively supported the growth of the healthcare sector, including the implementation of policies to attract medical tourists and promote medical excellence.
Recently, Informa Markets (Thailand) gathered over 1,000 local and international food entrepreneurs from more than 45 countries around the globe to join Fi Asia 2023 (Food Ingredients Asia 2023) and over 460 dietary supplement and extract providers from 40 countries to Vitafoods Asia 2023 at the Queen Sirikit National Convention Center to reiterate its confidence in Thailand’s potential to become No.1 health hub in Asia.
Rungphech Chitanuwat, Asean Regional Director, Informa Markets (Thailand), revealed Thailand plays a crucial role, aside from being a wellness destination, to be a hub for global exports of food ingredients.
“Informa Markets aims at being another driver to advance the food industry, especially Future Food, and turn Thailand into a food and nutrition bank, as well as a convocation space for future food experts to ensure effortless accessibility for both operators and consumers,” Chitanuwat said.
At the same time, she added that dietary supplements are another industry that has witnessed a significant growth over recent years as global consumers shift their focus more to health and well-being.
“Apart from nutritious foods, they are also looking for dietary supplements of quality to nourish their physical needs, boost immunity, and prevent certain diseases, or taking care of skin health even more,” Chitanuwat said.
She said the growth of the dietary supplements market in Asia Pacific marked up to $187 billion and is expected to achieve $229 billion in 2025, at the growth rate of 6 percent.
Key markets are mainly China, Japan, India while markets of high growth potential are Indonesia, Malaysia and Singapore.
Likewise, the dietary supplements market in Thailand boasts constant growth, that is, from $190 billion in 2021 expectedly to $239 billion in 2025 at the growth rate of 9 percent.
“Fi Asia 2023 heightens the reputation of Asia’s No.1 event that unlocks opportunities for entrepreneurs to share and update global food trends, aiming at amplifying potential and ensuring local raw material and beverage operators are well-armed for the global arena. This year’s Fi Asia is revamped to give a more modern sense, solidifying our position as the taste maker, being a hub that gathers raw materials from every corner of the world. Thus, it proves Thailand’s potential to become a platform for raw material exports in the future,” Chitanuwat said.
The number of visitors who went to Fi Asia 2023 and Vitafoods Asia 2023 reached more than 21,000 while the trade value soared beyond 500 million baht.
The number of visitors who went to Fi Asia 2023 reached more than 21,000 while the trade value soared beyond 500 million baht. The event was also an economic stimulus, generating over 180 million baht spending of foreigners for Thailand.
With respect to Vitafoods Asia 2023, she said they target to propel Thailand toward becoming a “hub for dietary supplement and extract innovations, unlocking limitations in dietary extract quality, being a creditable manufacturer and solution provider to broadening opportunities for business connection.”
Aside from the numerous destinations Thailand is known for, the country’s food tourism also offers an unforgettable experience that tantalizes the taste buds and immerses one in a rich culinary culture.
Thailand’s cuisine is incredibly diverse, ranging from fiery curries in the south to aromatic and herby dishes in the north. Each region offers a unique flavor profile and culinary tradition.
The street food is also legendary. The bustling markets are a sensory overload of sights, sounds, and, of course, incredible aromas. It’s a chance to savor local delicacies prepared right in front of you.
Thai food emphasizes the use of fresh, locally sourced ingredients. The markets are filled with vibrant produce, aromatic herbs, and exotic fruits. Thailand is also a paradise for fruit lovers. Try mangosteen, rambutan, longan, and the notorious durian. Each fruit offers a unique and delicious experience.
Dishes like Pad Thai, Green Curry, Tom Yum Goong, and Mango Sticky Rice are just a few examples of the unforgettable flavors that will leave a lasting impression on one’s taste buds.
Still-high prices of food, particularly rice, pushed inflation faster in September, hitting 6.1 percent from 5.3 percent the previous month, and the Bangko Sentral ng Pilipinas (BSP) expects prices to remain elevated.
The Philippine Statistics Authority (PSA) said inflation now averages at 6.6 percent, way above the government’s full-year target range of between 2 and 4 percent.
PSA said the uptrend in the overall inflation was “primarily brought about by the higher year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 9.7 percent from 8.1 percent.
Transport, with inflation rate of 1.2 percent, also contributed to the uptrend of the headline inflation.
Food inflation at the national level rose to 10 percent from 8.2 percent, mainly brought about by the higher inflation for rice with a double-digit inflation rate of 17.9 percent in September from 8.7 percent in August.
This was followed by meat and other parts of slaughtered land animals with an inflation rate of 1.3 percent. Faster annual growth rate was also noted in fruits and nuts at 11.6 percent and corn at 1.6 percent.
Core inflation, which excludes selected food and energy items, decelerated further to 5.9 percent in September, bringing the average to 7.2 percent.
Eli Remolona, BSP governor, said “higher prices for oil and key agricultural commodities drove inflation during the month.”
“Inflation is likewise expected to remain elevated in the coming months due to continued impact of supply shocks on food prices and the rise in global oil prices. Nonetheless, inflation is still projected to decelerate back to within the inflation target by end-2023 in the absence of further supply shocks,” Remolona said.
He stressed that the risks to the inflation outlook remain skewed significantly to the upside for 2023 to 2025.
“The potential impact of new petitions for transport fare adjustments, higher domestic prices of key food items facing persistent supply constraints, higher-than-expected minimum wage adjustment in areas outside NCR (National Capital Region), impact of El Niño weather conditions on food prices and utility rates, and higher electricity rates are the major upside risks to the inflation outlook,” Remolona added.
Remolona said the BSP stands ready to resume monetary policy tightening as necessary to prevent the renewed broadening of price pressures as well as the emergence of additional second order effects in view of the persistent upside risks to the inflation outlook.
As inflation is still projected to revert within the target range by the fourth quarter, the Monetary Board last month decided to maintain key rates.
After the fourth straight meeting, the target reverse repurchase (RRP) rate is still at 6.25 percent. The interest rates on the overnight deposit and lending facilities were retained at 5.75 percent and 6.75 percent, respectively.
Addressing challenges
Meanwhile, the Presidential Communications Office (PCO) said the government is committed to addressing the challenges posed by the 6.1 percent inflation rate and has initiated a series of measures, including a digital Food Stamp Program, fuel subsidies, and targeted assistance for farmers, which extend beyond the short term.
It added President Ferdinand Marcos Jr. and his Cabinet are also actively working on measures that would alleviate transportation costs and make long-term investments in irrigation and modern farming practices to support the agricultural community.
“Our economic managers anticipate a moderation in rice prices, as local production increases due to the onset of the harvest season and the entry of rice imports previously ordered. This will further alleviate the burden on our citizens,” PCO said.
All hands on deck
Benjamin Diokno, finance secretary, said “the government is all hands on deck in ensuring that we have the right policy measures, programs, and monitoring mechanisms in place to arrest rising commodity prices, which remain to be the top-of-mind concern of our citizens.”
“To help ensure that rice and vegetable inflation will decline for the rest of the year, the government will continue to implement a package of measures that seeks to address non-competitive market behavior, support farmers, and protect the vulnerable,” Diokno said.
Lower tariff
The Inter-Agency Committee on Inflation and Market Outlook, meanwhile, recommended on October 3 the extension of the lower Most Favored Nation (MFN) tariff rate on rice under Executive Order (EO) No. 10 until December 2024, but subject to review in July 2024.
PCO said Socioeconomic Planning Secretary Arsenio Balisacan said the recommended extension aims to address the increasing price of rice and ensure enough supply through timely and adequate importation.
“The policy response, however, must be complemented by efforts to improve the predictability and transparency of issuing the Sanitary and Phytosanitary Import Clearance for rice and all commodities,” PCO said quoting Balisacan.
The administration was already considering revisiting the proposal to temporarily lower rice tariffs, regardless of origin, if the global price of rice continues to rise due to the impacts of El Niño and the rice export bans among key rice-exporting countries, he added.
Over the weekend, President Marcos, Jr. issued EO 41 which prohibits the collection of pass-through fees on national roads and urged local government units to suspend the collection of fees from vehicles transporting goods. With J. Montemayor
As inflation is still projected to revert within the target range by the fourth quarter, the Monetary Board yesterday decided to maintain the Bangko Sentral ng Pilipinas’ (BSP) key rates but stressed that it is ready “to resume its tightening actions in the face of upside risks and potential second-round effects that could dislodge inflation expectations.”
After the fourth straight meeting, the Target Reverse Repurchase (RRP) Rate is still at 6.25 percent. The interest rates on the overnight deposit and lending facilities were retained at 5.75 percent and 6.75 percent, respectively.
Eli Remolona, BSP governor and Monetary Board chairman, said the latest BSP baseline projections show a slightly higher inflation path but “it is still projected to revert to the 2 to 4 percent target range by Q4 2023 in the absence of further supply-side shocks.”
“While food and transport prices continue to drive headline inflation, core inflation has moderated further, implying an easing in underlying pressures. In addition, inflation expectations remain anchored to the target range over the policy horizon,” Remolona said.
Remolona added the Board is ready to raise rates “if shocks are significant enough.”
“While (rate) cuts are off the table for 2023, (rate) hikes are not,” Remolona said.
Average inflation is now seen to reach 5.8 percent in 2023 from 5.6 percent previously, while the forecast for 2024 likewise rose to 3.5 percent from 3.3 percent.
For 2025, the forecast is unchanged at 3.4 percent.
Remolona said the upward adjustments in the 2023 and 2024 projections “reflect the spillovers from weather disturbances, rising global crude oil prices, and the recent depreciation of the peso.”
He also said the balance of risks to the inflation outlook “remains skewed toward the upside.”
“The major upside risks to the inflation outlook are the potential impact of further adjustments in transport fares and electricity rates,” he said.
He said the Board noted that recent indicators of domestic economic activity “pointed to waning pent-up demand, even as the impact of prior monetary policy tightening continues to weigh on credit.”
The Monetary Board also reiterated the need for non-monetary interventions, including the temporary reduction of import tariffs with calibrated volumes and timely arrival of import commodities.
Higher prices for oil and key agricultural commodities drove inflation faster in August, hitting 5.3 percent from 4.7 percent in July.
According to the Philippine Statistics Authority, the uptrend in the overall inflation “was primarily influenced by the higher year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 8.1 percent during the month from 6.3 percent in the previous month.”
August’s upturn brings the national average inflation to 6.6 percent, still above the government’s target range of between 2 and 4 percent.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said if local inflation reaches the BSP’s target range of between 2 and 4 percent by the fourth quarter of this year, “this could support a possible cut in local policy rates as early as the first quarter of next year as signaled by some local authorities.”
“Local policy rates would still be largely a function of future Fed rate moves (pause or hike) as well, fundamentally, the local inflation trend, and the behavior of the peso exchange rate, which affects import prices and overall inflation,” Ricafort said.
However, Ricafort said the cumulative hikes of +4.25 in local policy rates since May 2022, at some point, could become a drag on loan growth and overall economic growth.
For the third straight meeting, the policymaking Monetary Board (MB) yesterday decided to keep the interest rate on the Bangko Sentral ng Pilipinas’ (BSP) overnight reverse repurchase facility at 6.25 percent.
The interest rates on the overnight deposit and lending facilities were also retained at 5.75 percent and 6.75 percent, respectively.
REMOLONA
Eli Remolona, BSP governor and MB head, said the MB “deemed it appropriate to maintain monetary policy settings to allow a moderation of inflation even as authorities continue to assess the emerging risks to the inflation outlook.”
“Latest baseline projections continue to show a return to the inflation target in the fourth quarter of 2023 despite a generally higher path for inflation relative to the previous forecast from the monetary policy meeting in June, reflecting mainly the impact of higher international oil prices,” Remolona said.
Latest forecasts show average inflation for 2023 is seen to reach 5.6 percent, while the average inflation forecasts for 2024 and 2025 now stand at 3.3 percent and 3.4 percent, respectively.
Remolona said inflation expectations for 2023 have remained steady, while those for 2024 and 2025 have declined slightly.
“Nonetheless, the balance of risks to the inflation forecast continues to lean towards the upside,” he added.
Potential price pressures include the impact of possible higher transport charges, higher minimum wage adjustments, persistent supply constraints on key food items, and the effects of El Niño weather conditions on food prices and power rates.
A weaker-than-expected global economic recovery remains the primary downside risk to the inflation outlook, Remolona said.
The MB also recognized the challenging outlook for economic growth “as the weaker GDP (gross domestic product) outturn for the second quarter of 2023 reflected a broad-based slowdown in domestic demand,” the central bank chief added.
“Household consumption slowed due to elevated commodity prices, while government spending contracted relative to the previous year,” Remolona said.
Michael Ricafort, RCBC chief economist, noted the possibility that year-on-year inflation could have topped out in the first quarter and may further ease gradually or even ease year-on-year significantly due to denominator effects.
“Mathematically, the peak in local inflation was already seen at 8.7 percent in January 2023, or shortly before the anniversary of the Russia-Ukraine war that led to the sharp increase in global commodity prices and the main source of the elevated inflation in many parts of the world,” Ricafort said.
“Thus, further local policy rate pause or even cuts could already be possible for the coming months, especially into 2024,” Ricafort said.
“Inflation in recent months largely due to supply-side factors, not due to higher demand thus any additional local policy rate hike may not necessarily be effective in addressing these supply-side inflationary pressures,” he added.
“Still, relatively higher local policy rates would lead to some increase in borrowing costs that could lead to lower earnings and valuations, as well as slow down the economy as an unintended consequence in the quest to fight off inflationary pressures,” Ricafort said.
Tromso is often referred to as the world’s “northernmost city” and “Arctic City” due to its geographical location within the Arctic Circle and its status as one of the northernmost urban centers in the world.
