PSA: MANUFACTURING OUTPUT GROWS IN APRIL

The country’s manufacturing output grew in April both in volume and value, which is a rebound from the contraction recorded in March, data from the Philippine Statistics Authority (PSA) showed.

Results of the latest Monthly Integrated Survey of Selected Industries released by the PSA on June 7 showed the value of the production index (VaPI) grew by 5.9% in April from -6.8% in March.

“The annual increase of VaPI in April 2024 from an annual drop in March 2024 was mainly attributed to the annual increase in the manufacture of food products at 7.4% during the month from an annual decrease of 12.5% in March 2024,” said the PSA.

Other primary contributors to the annual increment of VaPI during the month were the annual increases in the manufacture of transport equipment at 6.6% from -11.4% in the previous month, and in the manufacture of electrical equipment at 40.9% during the month from an annual decrease of 4.3% in March 2024.

The volume of production index (VoPI), meanwhile, grew by 6.7%, a turnaround from the -5.8% seen in March.

The PSA said the growth in VoPI in April was due to the annual increase in the manufacture of food products at 6.8% from -13.2% in March 2024.

EUROPEAN CENTRAL BANK CUTS INTEREST RATE SETTINGS

The European Central Bank (ECB) on June 6 reduced interest rate settings for the first time in five years, cutting its three key benchmarks by 25 basis points, which met market forecasts.

The interest rates on the main refinancing operations plus the marginal lending facility and the deposit facility were lowered to 4.25%, 4.50%, and 3.75%, respectively, an ECB statement said.

“Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady,” it said.

The euro area annual consumer inflation rate rose to 2.6% in May, from 2.4% in both March and April, according to the latest data from Eurostat, which became the basis for the rate cut by the ECB.

ANALYST: RICE TARIFF CUT CAN HELP EASE INFLATION

An economist from HSBC Global Research said on June 6 that the proposed tariff cut on rice imports, if implemented timely and successfully, will help ease inflation and boost economic growth.

HSBC Global Research ASEAN economist Aris Dacanay said reducing the rice tariff to 15% from the current 35% percent until 2028 will help release 2% of household income that will support household consumption and boost economic growth.

Dacanay said that under a best-case scenario, the tariff rate cut has the potential to boost growth by a maximum of 1.4 percentage points (ppt).

“Consumption is 70% of GDP (gross domestic product). So that’s basically your household budget. That’s how much people spend. People spend 10% of their budgets on rice. If you reduce rice prices by 20%, you’re basically saving 2% of your household budget,” he said.

BYD TARGETS 22 DEALERSHIPS BEFORE YEAR-END

ACMobility, the official BYD distributor in the Philippines, is targeting to end the year with 22 dealerships nationwide that will help fast-track the adoption of electric vehicles (EVs) in the country.

ACMobility, the automotive and mobility unit of Ayala Corporation, said on June 5 that it has secured 11 new dealership deals for BYD to open sales networks in major cities and provinces such as Alabang, Cagayan De Oro, Cavite, Dagupan, Davao, Iloilo, Lipa, Marikina, Naga, Pampanga, and Sta. Rosa.

To date, BYD has four dealership networks in Quezon City, Makati, BGC Taguig, and Cebu.
“ACMobility and BYD Cars Philippines are excited to welcome our new dealer partners in the growing BYD network,” the firm’s automotive retail and distribution head Antonio Zara III said.

ACMobility is also increasing the number of charging infrastructure throughout the country to support the adoption of more EVS, adding to its current 48 charging stations in 23 locations.

CEBU LANDMASTERS SETS P14.5-BILLION CAPEX

Cebu Landmasters, Inc. (CLI) announced on June 4 that it has set P14.5-billion in capital expenditure (capex) for 2024 which includes spending for its maiden project in Luzon.
CLI chief operating officer Jose Franco Soberano said during the company’s annual stockholders’ meeting in Cebu City that the P14.5-billion capex this year is record, as it exceeds by 12% 2023’s spending of P12.89 billion.

He said this year’s capex will be spent on project development and land banking.
Soberano also announced that the company is embarking on a P27.6-billion new project launches this year, including its first residential project in Luzon, amid the strong demand for housing units in the northern part of the country.

“The year 2024 will see CLI entry into the Luzon housing space, and it will see CLI’s value-for-money approach reaching more territories and families,” he said.

PH ECONOMIC GROWTH SEEN HITTING 5.9% UP TO 2026

Philippine economic growth as measured by gross domestic product (GDP) is forecast to increase by an average of 5.9% between 2024 and 2026, driven by the strong domestic demand and pickup in global growth, the World Bank said.

In its Philippines Economic Update report released on June 4, the World Bank retained its 2024 and 2025 Philippine GDP growth projection at 5.8% and 5.9% from the 5.5% GDP expansion in 2023.

For 2026, the World Bank expects Philippine GDP to grow by 5.9%.

“For the Philippines, we project growth to average to about 5.9 percent between 2024 [and] 2026 supported by robust domestic demand, strong services growth, and improved trade,” World Bank senior economist Ralph Van Doorn said in a briefing in Taguig City.

BSP NOT OPEN TO 150-BASIS POINTS RATE CUT

The Bangko Sentral ng Pilipinas (BSP) said on June 4 that easing the policy rate setting 150 basis points (bps) in two years would be “too aggressive” based on the current pace of the country’s economic growth.

“Given the present trajectory (of growth), it is too aggressive,” BSP Governor Eli Remolona Jr. said.

He said one of the risks of an aggressive easing of policy rates is a hard landing, or a rapid decline in economic growth.

“In taming inflation, we don’t want unnecessary loss of output… although sometimes, we cannot avoid the loss of output… But if there will be big losses, then we have to react to that,” he added.

Last week, Finance Secretary Ralph Recto said the central bank could ease its monetary policy by 150 bps in the next two years.

SSS OPTIMISTIC ON REIT INVESTMENTS

The Social Security System (SSS) is optimistic on the P6-billion investments it made in nearly all real estate investment trusts (REITs) available in the country.

SSS President and Chief Executive Officer Rolando Ledesma Macasaet said on June 3 that the optimism was due to the expected rate cut in the second half of the year by the Bangko Sentral ng Pilipinas (BSP) and the increasingly favorable market conditions.

Macasaet said the positive outlook sets the stage for potentially higher returns on SSS’ investments.

Of the P6 billion investments in REITs, more than 75 percent were purchased this year.

ALTERNEGY SEEKS FUNDS FOR 500-MW ENERGY PROJECTS

Listed renewable energy (RE) company Alternergy Holdings Corporation is aggressively seeking funds to reach its goal of nearly 500 megawatts (MW) capacity of clean energy by 2026.

Alternergy chief financial officer Carmen Diaz said that the company is securing at least P8.33 billion in project financing this month toward the second half of 2024.

For this month alone, the RE firm aims to seal the P5.33-billion Alabat wind power project financing and the P1-billion Solana Solar financing deal with local commercial banks.

The company is also targeting to secure a P2-billion second tranche of green corporate loan by the second half of 2024.

(PNA photo by Joan Bondoc)