Economy

Philippine Economy Signals Shaky Rebound From Worst of Virus

Published

4 years ago

November 10, 2020

(Bloomberg) — The Philippines’ economic contraction moderated in the third quarter by less than forecast, signaling an unsteady recovery from the pandemic even as movement restrictions were relaxed and businesses reopened.

Gross domestic product shrank 11.5% in the three months through September from a year earlier, an improvement from the second quarter’s revised 16.9% drop. The median forecast in a Bloomberg survey of 20 economists was for a 9.6% decline.

Compared to the previous quarter, the economy expanded 8%, below the median estimate of 8.9% among seven economists surveyed, Tuesday’s data showed. The first sequential growth this year shows the economy is on the mend heading into 2021, Acting Economic Planning Secretary Karl Chua said.

“The economic team is optimistic that the worst is over for the country,” Chua said, adding that officials would reassess their economic projections in light of Tuesday’s data. “The path is clearer to a stronger bounceback in 2021.”

The peso fell 0.2% to 48.25 per dollar as of 11:08 a.m. in Manila. The country’s benchmark stock gauge rose more than 3%, joining a rally in Asia on vaccine optimism.

The quarter-on-quarter growth comes after two straight periods of contraction, including a revised 14.9% drop in the second quarter, when the economy entered recession amid Southeast Asia’s second-worst Covid outbreak.

“While growth is going in the right direction, it will take a while until pre-pandemic production is attained,” said Eugenia Victorino, head of Asia strategy at Skandinaviska Enskilda Banken AB in Singapore. “The risk is the longer the recovery takes, the more permanent the destruction of incomes become. This will cap growth momentum going forward.”

Consumer and business sentiment remain weak after a stricter quarantine was reimposed in Manila for two weeks in August. Unemployment rose in the capital region, which accounts for about a third of the economy, even as the nationwide jobless rate eased in July from a record high in April.

What Bloomberg Economics Says…

“Another double-digit slump in Philippine GDP underscores the challenge of reviving the economy amid an uncontained virus outbreak, ongoing containment measures and restrained fiscal support. While the loosening of movement restrictions should help to release some pent-up demand in the months ahead, we anticipate the economy will remain in annual contraction in 4Q.”

— Justin Jimenez, Asia economist

Fading Potential

No major sector performed strongly in the third quarter, according to Nicholas Mapa, economist at ING Groep NV.

“More worrisome is the sustained weakness in capital formation, which points to fading potential output and slower growth for quarters to come, no matter how much government pushes to reopen,” he said.

Tuesday’s data showed:

The agricultural sector expanded 1.2% year-on-year
Industry contracted 17.2% compared to a year earlier
Services were down 10.6% from the year-ago period

The central bank, which is scheduled to review monetary policy Nov. 19, will likely retain its easing measures until long-term economic growth and job targets are reached, Governor Benjamin Diokno said Nov. 5. So far this year, the bank has cut its key rate by 175 basis points, eased some lending rules and boosted money supply.

The government is banking on next year’s record 4.5 trillion-peso ($93.5 billion) budget to boost an economy expected to contract by as much as 6.6% this year. Timely passage of the budget is crucial in attaining the 6.5%-7.5% growth projection for next year, with Chua estimating that each day of delay results in 1.1 billion pesos not spent.

Chua said the government won’t revert to stricter curbs on movement to fight the pandemic, and will instead pursue a strategy of implementing minimum health standards.

“Managing risks instead of avoiding them will allow us to safely open more of the economy,” he said. “This will also put the Philippines on its solid growth and development trajectory.”

(Updates market levels in fifth paragraph, adds bullet points.)

Source:- BNN

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

14 hours ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

5 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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