Gov’t reactivates LGU price councils
The departments of Agriculture, Trade and Industry and Health have reactivated local price coordinating councils (LPCCs) to closely monitor the prices of farm and fishery products, processed goods and medicines sold in Metro Manila and other urban centers nationwide as the government strengthens its quarantine efforts.
Under a recent joint memorandum circular, the three agencies agreed to allow the LPCCs of different local government units to help implement the suggested retail price (SRP) scheme, which means they have the power to issue warnings and apprehend offenders, including those who sell online.
Updated price bulletins will also be provided to the LPCC, market supervisors, retailers and suppliers, and these must be displayed in prominent areas in public markets.
“The reactivation of LPCCs was one of the measures approved by the Inter-Agency Task Force on the Emerging Infectious Disease to monitor and forestall the excessive and unreasonable price spikes of agrifishery commodities, processed products and medicines,” Agriculture Secretary William Dar said in a statement.
Our aim is to protect consumers against undue price spikes as the nation is under a state of emergency due to the spread of the novel coronavirus disease,” he added.
In the past week, the Department of Agriculture’s daily price monitoring showed prices of selected food items skyrocketed by as much as 45 percent, mostly due to delivery gaps from conflicting checkpoint guidelines rather than a shortage of stocks.
Most of the stalls jointly monitored by Dar and Trade Secretary Ramon Lopez on Thursday were also found selling food items above the SRP.
As such, the three agencies are looking whether or not the SRP scheme should be expanded to include other commodities.
“We currently impose an SRP on nine food commodities and we are analyzing the price monitoring data we have collected for the entire country in the last three months to serve as basis to expand the list if warranted,” Dar said.
Any person or entity found violating the SRP under the Price Act would be fined between P5,000 and P2 million and could face jail terms between five and 15 years.
According to Dar, they expected prices to start settling at reasonable and affordable levels by the end of this week as the transport of food and other cargoes, including the movement of farmers, fishers, food logistics providers and food processing workers begins to improve.
PH economic slowdown seen to persist through Q1 2021
The COVID-19 pandemic is likely to gnaw sharply on the Philippine economy until the first quarter of 2021 alongside a steeper global economic downturn and the tightening of global financing conditions, think tank Fitch Solutions said.
While Fitch Solutions does not expect an economic shock to the extent seen during the 2007-2008 global financial crisis, it said in a research note issued yesterday that this outbreak was likely to drag on the Philippine economy through the fourth quarter of this year and the first quarter of 2021.
Fitch Solutions thus sees the Philippine gross domestic product (GDP) coming in at its slowest pace since 2011. It has revised its Philippine GDP growth forecast this year to 4 percent from 6 percent, in line with downgrades to most other economies elsewhere in the world. The think tank noted how the Philippines would suffer from the COVID-19 pandemic through four channels: tourism, remittances, supply chain disruption and weakening of foreign direct investment (FDI) inflows.
“Indeed, tourism has all but stopped as of March, remittance flows will likely suffer given the global growth slowdown, supply chains have been affected across continents and FDI inflows will have dried up as businesses globally face short-term liquidity constraints,” Fitch Solutions said.
It said the outbreak had gotten worse since its previous downgrade of its Philippine GDP growth forecast to 6 percent, from 6.3 percent. What began as a shock to the Chinese economy has now become a global pandemic and economic crisis, it added.
The monthlong lockdown in Luzon—the most significant contributor to the domestic economy at over 15 percent of output—would result in a sharp contraction in domestic activity, with household consumption and investment activity collapsing, the research said.
“The lockdowns are in place until April 12 but could be extended given initial difficulties implementing the measures and the confusion over what restrictions were in place,” the research said.
Fitch Solutions said household finances, in particular, would be weakened by the outbreak, although lower oil prices could offset some of the impact.
“With remittance flows likely to slow more aggressively as the outbreak spreads to the United States, which accounts for around 40 percent of remittances, a valuable driver of household consumption will shrink. In addition, during the lockdown, workers will likely see income drop, with the self-employed particularly hit, accounting for around 25 percent of the labor force,” the research said.
Fitch Solutions also flagged risks of rising unemployment, given the collapse in tourism and likely cash flow difficulties for small and medium enterprises during the lockdown.
“This will weigh on growth over an extended period and risks turning the shock into a more sustained decline in domestic demand. That said, lower oil prices will cushion some of the impact on disposable income, with prices over 50 percent lower than end-2019,” it said.
Airlines seek emergency help from gov’t
The trade group of the world’s airlines is calling on governments in the Asia-Pacific region to extend emergency support to the industry devastated by the new coronavirus disease (COVID-19).
The International Air Transport Association (IATA) said it wrote the heads of governments in the region to provide financial support as carriers “fight for survival due to the dramatic loss of air travel demand due to the COVID-19 crisis.”
For airlines, it’s apocalypse now,” IATA director general and CEO Alexandre de Juniac said in a statement.
IATA reached out to 18 governments, including the Philippines, Bangladesh, India, Japan, Malaysia, Pakistan, Republic of Korea, Thailand and Vietnam.
IATA said the industry needed a financial lifeline of $200 billion. At risk are 2.7 million airline jobs on top of millions more that support the sector.
The crucial passenger business, in particular, had collapsed with flight restrictions and warnings against nonessential travel.
“There is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry,” de Juniac said.
IATA proposed state-backed measures such as direct financial support, loans or loan guarantees and tax breaks. It said the COVID-19 crisis would wipe out some $88 billion in revenue and cut passenger demand by 37 percent this year versus 2019.
This is based on a scenario where severe restrictions on travel are lifted after three months, followed by gradual recovery, it added.
Roberto Lim, vice chair of the Air Carriers Association of the Philippines Inc., earlier warned that flight suspensions could trigger a so-called cash drain as revenues vanish while airlines return billions of pesos in refunds.
The country’s three major airline companies—Philippine Airlines, Cebu Pacific and AirAsia Philippines—have halted all passenger operations after wider quarantine measures were ordered by the Philippine government to contain the spread of COVID-19.
PSEi down 2.5% on profit-taking
The local stock barometer returned to the doldrums on Friday as investors pocketed recent gains ahead of the weekend.
Ending a three-day rebound and missing a sustained upswing across regional markets, the main-share Philippine Stock Exchange index (PSEi) tumbled by 134.96 points or 2.5 percent to close at 5,266.62.
Because of the gains made in the last three days, particularly on Thursday, the PSEi was still a net gainer of 487.86 points or 10 percent on a week-on-week basis as investors cheered a massive COVID-19 spending program in the United States. Locally, the week marked the second week of the lockdown of the whole of Luzon.
On Friday, the market was weighed down most by the property counter, which fell by 4.63 percent.
The financial counter lost 3 percent while the holding firm and mining/oil counters both declined by over 2 percent.
The industrial counter slipped by 0.66 percent.
On the other hand, the services counter rose by 3 percent.
Value turnover for the day amounted to P7.95 billion. There was modest net foreign selling of P23.35 million.
Despite the PSEi’s decline, market breadth was positive. There were 101 advancers that outnumbered 90 decliners, while 36 stocks were unchanged.
The PSEi was weighed down most by Aboitiz Power, which tumbled by 13.33 percent, while BDO Unionbank lost 11.75 percent.
Property giant SM Prime slid by 8 percent, wile SM Investments and JG Summit both lost nearly 5 percent.