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Philippines Preparing for Possible Economic Fallout With China Amid Sea Row – BNN Bloomberg

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(Bloomberg) — The Philippines is seeking new avenues for trade in a bid to build economic resilience amid the possibility that escalating maritime tensions with its top trading partner China may lead to sanctions, according to the government’s top diplomat.

Relations between the two nations have been strained over the past year as President Ferdinand Marcos Jr. pursues a more assertive posture to counter China’s sweeping claims of the disputed South China Sea. Part of that effort has seen Manila turn to its longtime ally, the US, for security as well as much-needed investments to spur one of Asia’s fastest-growing economies. 

Manila has not ruled out the prospect of the tensions leading to economic retribution from a country that it did $40 billion in trade with last year, with China serving as a major export destination for products like bananas and nickel ore. That could include some form of trade sanctions and requires planning for, Foreign Affairs Secretary Enrique Manalo said during an interview on Friday.

“Unfortunately, sometimes that’s a possibility,” he said from his office in Manila. “That’s why you have to reach out to other partners and you don’t put your eggs in one basket. In the event it happens, at least you have a means of adapting.”

Beyond deepening its defense partnership with the US, the Philippines has been building ties with other countries in Asia as well as with America’s allies in Europe. Part of the strategy has included expanding economic ties with countries like South Korea and France while launching negotiations for a visiting forces agreement with Japan.

A US trade delegation led by Commerce Secretary Gina Raimondo is due to arrive in Manila next month and Manalo said the Philippines is also seeking a free trade agreement with the European Union.

The Philippines and China have been locked in a territorial dispute in the South China Sea, with Beijing claiming nearly all of the resource-rich waterway including areas that Manila says are part of its exclusive economic zone. Tensions came to a head last year when the Philippines ramped up troop rotation and resupply missions to BRP Sierra Madre, a rusting warship that it deliberately grounded in 1999 to serve as its military outpost in the Second Thomas Shoal in the Spratly Islands. 

Some of those missions have been met with water cannons and near collisions from approaching Chinese ships. Despite moves by the Philippines to diversify its economy, trade sanctions from Beijing do not appear imminent, said Manalo. “So far nothing like that has happened. But you know, you have to prepare for any eventuality the best you can,” he said.

But the dispute has stalled the Philippines’ plans to explore oil and gas in areas that it considers as part of its territory. Marcos has said discussions with China have been in a deadlock even after both nations agreed to resume talks on joint exploration in the South China Sea in January last year.

Manalo said while Manila remains open to further negotiations with Beijing, it cannot agree to yield control of any venture to China as provided under Philippine laws.

“We haven’t closed the door to negotiations, but we have certain positions we have to maintain,” the minister said.

Other nations can also participate in the Philippines’ energy exploration plans within areas it claims in the South China Sea. “Other countries, if they’re interested, I suppose could make their offers,” he said.

©2024 Bloomberg L.P.

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

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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

The Canadian Press. All rights reserved.

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

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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.

The Canadian Press. All rights reserved.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

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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.

The Canadian Press. All rights reserved.

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