The Bureau of the Treasury (BTr) will offer P15 billion in Treasury bills (T-bills) on Monday, or P5 billion each in 91-, 182- and 364-day securities.

On Tuesday, it will auction off P35 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and nine months.

A trader said T-bill rates will likely go up by 5 to 10 basis points (bps) from the previous auction, while the 10-year bond鈥檚 yield could range from 5.8% to 6%.

鈥淢arket participants are still cautious given the forecasted trajectory of US Fed rate hikes and players continue to monitor the ongoing conflict between Russia and Ukraine,鈥� the trader said via Viber.

鈥淥nshore, the Bangko Sentral ng Pilipinas (BSP) said that inflation will likely breach target this year and that it is ready to respond should there be a buildup in inflation pressures.鈥�

Another trader said via Viber that rates of government securities will likely move sideways with an upward bias as inflation pressures remain, especially with another round of local oil price hikes seen on Tuesday.

鈥淢arket will also wait for the Bureau of the Treasury鈥檚 borrowing schedule for April.鈥�

The US central bank must move 鈥渆xpeditiously鈥� to bring too-high inflation to heel, US Federal Reserve Chair Jerome H. Powell said last week, adding that it could use bigger-than-usual interest rate hikes if needed to do so, Reuters reported.

In particular, he added, 鈥渋f we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 bps at a meeting or meetings, we will do so.鈥�

Fed policy makers this month raised interest rates for the first time in three years and signaled ongoing rate hikes ahead. Most of them see the short-term policy rate 鈥� pinned for two years near zero 鈥� at 1.9% by the end of this year, a pace that could be achieved with quarter-percentage-point increases at each of their next six policy meetings.

Meanwhile, the BSP Monetary Board kept benchmark interest rates at record lows during its meeting on Thursday, but said it could hike soon amid rising inflation risks amid the war between Russia and Ukraine.

The BSP now expects inflation to average 4.3% this year, above the 2-4% target and the previous 3.7% estimate.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.3212%, 1.5266%, and 1.7378%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System鈥檚 website.

Meanwhile, the 10-year tenor fetched a yield of 5.7193%.

The government partially awarded the T-bills it offered last week as rates continued to rise on expectations of further rate hikes from the US Federal Reserve. The BTr raised just P13.9 billion via the short-term securities, or less than the programmed P15 billion.

Broken down, the Treasury awarded just P4.87 billion in 91-day T-bills versus the P5 billion on offer, even as total bids reached P9.47 billion. The average rate for the three-month T-bill climbed by 23.1 bps to 1.536% from the 1.305% fetched during the previous auction.听

The government also made a partial P4.03-billion award of 364-day papers versus the P5-billion offer even as bids totaled P7.7 billion. The average yield on the one-year paper went up by 5.8 bps to 1.792% from the 1.734% fetched previously.

On the other hand, the BTr borrowed P5 billion as planned via the 182-day T-bills that attracted P8.74 billion in tenders. The tenor fetched an average yield of 1.607%, up by 14.9 bps from the 1.458% seen previously.

Meanwhile, the last time the government offered the 10-year T-bonds to be auctioned off on Tuesday was on Feb. 8. The debt papers were awarded at an average rate of 5.093% at that auction, up by 21.8 bps from the 4.875% quoted when the series was first offered on Jan. 18.

The BTr wants to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds. However, it has made several rejections and partial awards at its auctions due to rising yields.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez

The commission is keeping an eye on both the Philippine Health Insurance Corp. (PhilHealth) and the Philippine Crop Insurance Corp. (PCIC), the DoF said in a press release on Saturday.

鈥淧FRS 4 is the current and interim accounting standard imposed on insurance entities in the Philippines. It is based on the International Financial Reporting Standards,鈥� the DoF said.

The IC submitted initial findings on PhilHealth and PCIC last year, Insurance Commissioner Dennis B. Funa said.

鈥淲e will continue to monitor the compliance of PhilHealth and PCIC with the recommendations made after the examination is completed,鈥� Mr. Funa added.

Finance Secretary Carlos G. Dominguez III in December ordered PhilHealth, SSS, and the Government Service Insurance System to estimate their social benefit liabilities in accordance with the PFRS 4.

鈥淯nder PFRS 4, when an insurance entity receives money from its clients and enters into a contract with them to provide benefits when certain events occur, it must set aside a reserve to cover its liabilities,鈥� the DoF said.

鈥淭hus, premiums, fees, and contributions that the institutions receive must be reported both as income and liability.鈥�

Mr. Dominguez said social benefit liabilities represent the institutions鈥� net legal obligation to pay guaranteed amounts of money or benefits to their policyholders. This includes both actual claims and the required reserve for future claims. 鈥� J.P. Iba帽ez

MEDICAL DOCTOR Frederic L. Ting remembers when his patient, a 33-year-old woman, was diagnosed with breast cancer in late 2019, months before Manila, the capital and nearby cities and provinces were locked down to contain a coronavirus pandemic.

She was due to show up at the doctor鈥檚 office in mid-March of the following year, but had to postpone it after the first lockdown was imposed that month. She managed to see an oncologist only in September 2020.

鈥淯nfortunately, the early stage two breast cancer had already spread to the lungs and liver,鈥� Mr. Ting said in a virtual interview via Zoom.

鈥淭his was a typical scenario that many of our patients experienced because of the treatment delays caused by this pandemic.鈥�

The coronavirus disease 2019 (COVID-19) has sickened 3.7 million and killed almost 60,000 Filipinos. Treatment delays caused by lockdowns and public health fears also worsened other illnesses, including cancer.

About 475 million people have been infected by COVID-19, while deaths reached over six million worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization.

Early stage breast cancer is curable, Mr. Ting said, but when it has worsened, the goals change from being cured to controlling the cancer.

These treatment delays could set back the county鈥檚 public health in the long term. And as Filipinos get sicker, the Philippine economy, already scarred by the pandemic, could worsen.

About a third of more than a hundred cancer patients at St. Luke鈥檚 Medical Center in Quezon City and Taguig experienced treatment delays in 2020, according to a study by the Cancer Reports journal.

The Philippine Society of Medical Oncology had asked doctors to prioritize treatment based on the patient鈥檚 cancer status to avoid coronavirus infection. They should consider shorter treatment if possible, or delay chemotherapy for patients in deep remission.听

Filipinos received delayed treatment for various non-COVID illnesses because of limited healthcare supply. Some of them lost their jobs and could no longer afford drugs whose prices have also risen.

The country鈥檚 limited healthcare facilities and manpower were transferred to coronavirus patients especially during an infection surge.

鈥淢any of the machines used to diagnose tuberculosis were transferred for COVID-19 use,鈥� Valerie Gilbert T. Ulep, a research fellow at the Philippine Institute for Development Studies (PIDS), said by telephone.

The Philippines could only offer 1.2 hospital beds for 1,000 people, the government鈥檚 health facility development plan showed.

鈥淓very time a surge in coronavirus cases happens, patients infected with COVID-19 eat up valuable space in our hospitals that could have been used to accommodate non鈥揅OVID-19 patients,鈥� Mr. Ting said.

鈥淚t鈥檚 not just the literal space or room, but also the manpower and other logistical functions.鈥�

Although teleconsult services helped during lockdowns, doctors鈥� assessments were limited in the absence of a physical exam, he said.

Meanwhile, demand for healthcare treatment also declined, not because people were less sick but because they could no longer afford it.

In a study published by The Lancet journal, Mr. Ulep and his co-authors found that disease admissions and several healthcare procedures declined at more than a thousand Philippine hospitals in the first months of the pandemic. This continued to fall short of pre-pandemic levels for the rest of 2020.

The authors found that healthcare treatment for the poorest Filipinos declined at three times the pace for people who had insurance

鈥淚n the Philippines, 50% of healthcare services are out of pocket,鈥� Mr. Ulep said in mixed English and Filipino. 鈥淚f the economy sinks, household income will decline. You will not spend any more for healthcare services.鈥�

LOST WAGES
In poorer countries, he said, income is a big indicator of healthcare use. 鈥淭hat kind of shift is more apparent among the poorer segments of the population.鈥�

Mr. Ting said he had consulted with several patients whose conditions worsened because of treatment delays. 鈥淯nfortunately, this significantly decreased their quality of life and their chances of survival.鈥�

Mr. Ulep in his study published by PIDS said the economy could lose P2.3 trillion because of the pandemic. Much of this is due to foregone wages and lost productivity due to untreated diseases and deaths unrelated to the coronavirus.

鈥淎nd because of the pandemic, the prevalence of cardiovascular diseases, diabetes increased. That will linger throughout the lifespan of that person,鈥� he said.

Socioeconomic Planning Secretary Karl Kendrick T. Chua has said the country is poised to reach upper middle-income country status 鈥� an economy with a gross national income per capita of $4,096 to $12,695, according to the World Bank 鈥� by end-2022.

Philippine gross national income per capita fell by 11% to $3,430 in 2020 from a year earlier, according to the multilateral lender.

But the country鈥檚 healthcare outcomes, such as infant and maternal deaths, don鈥檛 match upper middle-income countries, Mr. Ulep said.

鈥淓ven if we are transitioning to an upper middle-income country, our health status is actually not that great,鈥� he said. 鈥淏ecause of COVID-19 that might also suffer. That鈥檚 how dismal it is. The problem in the Philippines is that the high infant mortality rate is actually because of the large disparity between the poorest and richest.鈥�

He cited the need to boost state investment in public health.

The Philippine Health Facilities Development Plan 2020-2040 aims to provide 2.7 hospital beds to 1,000 people by 2040, requiring 400,000 more beds. Upper middle-income countries, the report said, have 3.8 beds for 1,000 people.

Southeast Asian governments should invest more in their healthcare systems to improve labor productivity and boost economic growth, according to the Asian Development Bank.

鈥淲e need to fully implement the Universal Health Care law,鈥� Mr. Chua said in a Viber message.

Senator and presidential candidate Panfilo M. Lacson in January said the law, signed by President Rodrigo R. Duterte in 2019, had not been fully implemented to offer enough hospital beds and medical services because it lacks funding.

Meanwhile, Mr. Ting hopes that more people would get vaccinated against the coronavirus.

鈥淚t鈥檚 a vicious cycle,鈥� he said. 鈥淲e spend more resources every time we have a COVID-19 surge in the country, and we should remember the collateral damage of COVID-19 on patients whose conditions worsen because of treatment delays,鈥� he said.

鈥淲e have to help each other out so we can end this pandemic soon and hopefully stop the vicious cycle.鈥�

THE PHILIPPINES raised $2.25 billion from its first triple tranche US dollar-denominated bond offering, which included its first-ever green bonds, despite heightened market volatility from the Russia-Ukraine crisis and the start of the US Federal Reserve鈥檚 policy tightening cycle.

In a statement on Tuesday, the Bureau of the Treasury (BTr) said it raised $1 billion from the inaugural 25-year green bond offer, as well as $500 million from five-year bonds, and $750 million from 10.5-year bonds.

The Treasury said the new five-year global bonds were priced at 90 basis points (bps) over Treasuries or a coupon of 3.229%. This was after the initial price guidance of 125 bps over the Treasuries area.

The 10.5-year bonds were priced at 3.556% or 125 bps over Treasuries, after the initial guidance of 165 bps over the Treasuries. The 25-year notes were priced at 4.2%, 50 bps tighter than the initial guidance of 4.7%.

鈥淎fter a few weeks of volatility in the global equity and credit markets, the Republic was able to take advantage of the improving market sentiment (after) the March FOMC (Federal Open Market Committee) meeting,鈥� the BTr said.

The US Federal Reserve last week raised rates by a quarter percentage point, the first time since 2018, to help combat soaring inflation.

The BTr said proceeds from the shorter-term tenors will be used for budget financing, while those from the 25-year global bonds will be used for the government鈥檚 sustainable finance program.

鈥淭he fact that our debut sustainability bond tranche secured the strongest demand among the three tranches highlights the strong investor confidence in the National Government鈥檚 commitment to achieving sustainable development and mitigating climate change, notably the pledge to reduce our greenhouse gas emissions by 75% by 2030,鈥� Finance Secretary Carlos G. Dominguez III said, referring to the country鈥檚 first environment, social, and governance global bond offering.

National Treasurer Rosalia V. de Leon said strong investor demand shows the country鈥檚 access to international capital markets.

鈥淏eing the first and largest offshore Southeast Asia sovereign offering in 2022, the Republic鈥檚 transaction has reopened the Asian bond markets for long-dated offerings and cements the Republic鈥檚 position as the leading capital market participant in Asia,鈥� she said.

The deal is expected to be settled on March 29. Maturity dates for the five-, 10.5-, and 25-year bonds are on March 29, 2027; Sept. 29, 2032; and March 29, 2047, respectively.

The global bonds were rated 鈥淏aa2鈥� by Moody鈥檚 Investor鈥檚 Service, and are expected to be rated 鈥淏BB+鈥� by S&P Global Ratings, and 鈥淏BB鈥� by Fitch Ratings.

The Bank of China, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Mizuho Securities, Morgan Stanley, Standard Chartered and UBS are joint lead managers and bookrunners.

The deal follows last year鈥檚 offshore debt issues by the Philippines including a $3-billion dual-tranche global bonds, the 2.1-billion-euro triple-tranche global bonds, and the 55-billion-yen Samurai bonds.

The Philippines, one of Asia鈥檚 most active sovereign debt issuers, is looking to raise P2.2 trillion ($42 billion) to plug its budget deficit this year, about 75% of which is to be sourced from the domestic market. 鈥� Jenina P. Iba帽ez and Reuters

The Organisation for Economic Co-operation and Development (OECD) said Philippine gross domestic product (GDP) will likely expand by 7% this year, driven by infrastructure spending and remittances. The OECD released its Economic Outlook for Southeast Asia, China, and India 2022 report on Tuesday.

鈥淔aster implementation of investment projects in infrastructure, plus the recovery in cash remittances by overseas Filipino workers constitute upside factors to the forecast,鈥� Kensuke Tanaka, OECD Development Centre Asia head of unit, said in an e-mailed response to questions.

鈥淧andemic-related uncertainties as infections due to the Omicron variant remain elevated continue to pose downside risks to the forecast,鈥� he added.

The government allocated P1.18 trillion for its infrastructure program this year, or the equivalent of 5.3% of GDP.

The central bank expects remittances to grow by 4% this year. In January, cash remittances went up by 2.5% year on year to $2.668 billion.

鈥淭he war in Ukraine is anticipated to affect the Philippines through higher prices for oil, natural gas, but also through higher food prices,鈥� Mr. Tanaka said.

The OECD鈥檚 GDP estimate for the Philippines is at the lower end of the government鈥檚 7-9% growth forecast for 2022. The forecast is also higher than the OECD鈥檚 5.8% average growth seen for emerging Asia this year.

The Philippine economy accelerated by 5.6% last year following a record 9.6% contraction in 2020.

The OECD expects the Philippines to post a 6.1% GDP growth next year, still higher than the 5.2% it estimates for emerging Asia in 2023.

LOWER FORECAST
On the other hand, Citigroup, Inc. lowered its GDP forecast for the Philippines this year to 6.5%, down from its previous 6.8% estimate.

鈥淸R]ecent increases in commodity prices, especially energy, will still weigh on consumer confidence and household consumption, especially with a lack of energy subsidies at this juncture and weak income growth,鈥� Citi economist for the Philippines Nalin Chuchotitham said in a report.

Household spending makes up more than three-fourths of the Philippine GDP. It expanded by 4.2% in 2021 from a decline of 7.9% in 2020.

Ms. Chuchotitham said their estimates show GDP growth could be slashed by around 0.07 percentage point in a scenario where crude oil will increase by around 11%.

Citi revised its average Brent crude price forecast for this year to $91 a barrel as of March 7, from $79 a barrel as of Feb. 25. Oil prices are seen to go up to $102 a barrel in the second quarter, before falling to $79 in the fourth quarter.

Fuel retailers slashed prices of gasoline, diesel, and kerosene on Tuesday, ending 11 weeks of steadily rising prices. Since January, pump prices of gasoline, diesel and kerosene have now increased by P14.90, P19.20, and P16.35 per liter, respectively.

The more relaxed virus restrictions are also seen to drive recovery as more consumers go out and spend. Metro Manila and other provinces have been under Alert Level 1 since the start of March as coronavirus infections declined.

鈥淭his is consistent with our expectations and supportive of continued domestic demand recovery,鈥� Ms. Chuchotitham said.

Meanwhile, Citi now projects inflation to reach 3.5% in 2021, faster than their previous 3.2% estimate but still within the central bank鈥檚 2-4% target.

鈥淭his is mainly from energy prices in 2022, but we expect the year-on-year food inflation to be less pronounced, although mainly due to a high base last year,鈥� Ms. Chuchotitham said.

As there is still a need to support the economy given the negative output gap and the lackluster labor market, Citi said the Bangko Sentral ng Pilipinas will only start increasing interest rates by 25 basis points in the fourth quarter of 2022.

The Monetary Board will hold a policy review meeting on March 24. 鈥� Luz Wendy T. Noble and Jenina P. Iba帽ez

The Bureau of the Treasury (BTr) raised just P15.69 billion via the reissued seven-year T-bonds it auctioned off on Tuesday, less than half the programmed P35 billion, even as the offering attracted P40.59 billion in bids.

The debt papers, which have a remaining life of six years and four months, were awarded at an average rate of 5.601%, up by 91.2 basis points (bps) from the 4.689% quoted when the series was last offered on Jan. 25.

The average yield fetched for the debt papers was also higher than the 5.4858% quoted for the seven-year tenor at the secondary market prior to the auction, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System鈥檚 website.

Had the Treasury made a full award of its offer, the reissued bonds would have fetched an average rate of 5.881%.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters that the market has remained defensive after US Federal Reserve Chair Jerome H. Powell hinted on the possibility of 50-bp rate hikes at the next Federal Open Market Committee (FOMC) meetings.

鈥淢eanwhile, higher inflation is seen this month with still elevated oil and commodities prices,鈥� Ms. De Leon said.

A trader likewise said investors asked for higher returns in response to inflation risks and Mr. Powell鈥檚 indications of a 50-bp rate hike in May.

The US central bank must move 鈥渆xpeditiously鈥� to bring too-high inflation to heel, Mr. Powell said on Monday, adding that it could use bigger-than-usual interest rate hikes if needed to do so, Reuters reported.

鈥淭he labor market is very strong, and inflation is much too high,鈥� Mr. Powell told a National Association for Business Economics conference. 鈥淭here is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability.鈥�

In particular, he added, 鈥渋f we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.鈥�

Fed policy makers last week raised interest rates for the first time in three years and signaled ongoing rate hikes ahead. Most of them see the short-term policy rate 鈥� pinned for two years near zero 鈥� at 1.9% by the end of this year, a pace that could be achieved with quarter-percentage-point increases at each of their next six policy meetings.

By the end of next year, Fed policy makers expect the central bank鈥檚 benchmark overnight interest rate to be at 2.8%, bringing borrowing costs to a level where they would actually start biting into growth. Most Fed policy makers see the 鈥渘eutral鈥� level as somewhere between 2.25% and 2.5%.

Meanwhile, the Philippine central bank is widely expected to maintain policy rates at record lows on Thursday even amid rising inflation risks in line with its signals it will continue to support economic recovery.

A 大象传媒 poll last week showed 15 out of 17 analysts still anticipate the Bangko Sentral ng Pilipinas (BSP) Monetary Board keeping rates on hold on March 24, the second policy review this year.

Analysts believe the BSP will remain focused on providing support for a more sustainable economic recovery despite inflationary risks caused by the Russia-Ukraine war.

The BTr wants to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit seen to hit 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez with Reuters

The DoF said in a statement on Tuesday that it reviewed the contracts for the Mactan-Cebu Airport Project, the Cavite-Laguna Expressway, the Clark International Airport Expansion Project and the Metro Rail Transit Line 3, as well as the concessions to supply water to the capital region held by Maynilad Water Services, Inc. and Manila Water Co.

Also reviewed were the contracts of the LRT1 Cavite Extension and Operations and Maintenance Project, MRT Line 7, the Muntinlupa-Cavite Expressway, the NLEX-SLEX Connector Road, the Bulacan Bulk Water Supply Project and the Southwest Integrated Transport System Phases 1 and 2.

The DoF said its privatization and special concerns office conducted the review. The office has recommended the creation of a specialized risk management office.

鈥淪uch extensive review of PPP projects, which we hope to be institutionalized for the ultimate benefit of our people, would ensure that the government is free from undue risks or contingent financial liabilities,鈥� Finance Secretary Carlos G. Dominguez III said.

These risks, he said, 鈥渉ave to be shouldered by the public in the form of more taxes or higher fees charged by the concessionaires for the use of their facilities until such time that these are turned over to the state.鈥�

The office is also evaluating 40 PPP proposals submitted to the听National Economic and Development Authority听(NEDA) which have not yet been acted on, and its input was considered in amending the implementing rules of the Build-Operate-Transfer (BOT) law. This law authorizes the private sector to finance, build, operate, and maintain infrastructure projects.

The听NEDA听and the PPP Center earlier this month detailed the proposed changes to the implementing rules and regulations of Republic Act No. 6957, or the BOT law.

Under the draft rules, projects to be considered will need a complete feasibility study, along with economic and financial models based on recent data.

Finance Undersecretary Grace Karen Singson said that the government should make the assessment of risk, government guarantees, and contingent liabilities a permanent feature, such as a specialized risk management office at the project proposal level.

Risk management has thus far only been performed on an ad hoc basis by technical working groups without resources, she said.

鈥淐urrently, the provisioning for contingent liabilities is based on estimated termination payments, a low probability event, and does not account for actual claims that are frequently demanded by concessionaires during the implementation of their PPP projects,鈥� the DoF said.

The proposed risk management office will evaluate contingent liabilities and risks the government may be exposed to, recommend risk mitigation measures, and help the Development Budget Coordination Committee implement a risk management program.

The proposed office would also evaluate proposals that need sovereign guarantees, the DoF said. 鈥� Jenina P. Iba帽ez

The Governance Commission for GOCCs said RA 10149, or the GOCC Governance Act of 2011, excludes state universities and colleges from its jurisdiction.

The DAP, as a higher education institution, should be considered a state university or college and is not covered under the law, the commission said in Memorandum Order 2022-04 published on Tuesday.

The commission oversees all GOCCs, government financial institutions, and government corporate entities. It has no jurisdiction over the central bank, cooperatives, local water districts, economic zone authorities and research institutions.

The DAP is included in the Commission on Higher Education鈥檚 list of schools authorized to offer undergraduate and graduate courses.

The academy offers courses and training sessions, and runs a graduate school in public and development management.

The exclusion of the academy can be reevaluated if there are any changes to the circumstances of the institution, the Governance Commission for GOCCs said. 鈥� Jenina P. Iba帽ez

The borrower has opened orders for a five-year bond at the 125 basis points (bps) over Treasuries area, a 10.5-year note at the 165 bps over Treasuries area and a 25-year bond at the 4.7% area, the document showed.

Proceeds from the two shorter-term issues will be used for budget financing, while the 25-year bond offer was specifically intended to raise money for the government鈥檚 鈥渟ustainable finance framework鈥� program.

The settlement date is March 29. The size of the offering is set at the US dollar benchmark.

National Treasurer Rosalia V. de Leon declined to comment on the issuance.

Finance Secretary Carlos G. Dominguez III last month said the Finance department had been in talks with banks on a $500-million green bond offering.

Funds raised from green bonds are used for climate change mitigation and environmental projects. The country鈥檚 sustainable finance framework seeks to harness public and private investments to support the transition to a clean, sustainable and climate-resilient economy, Mr. Dominguez said.

The maturity dates for the five-, 10.5-, and 25-year bonds are March 29, 2027; Sept. 29, 2032; and March 29, 2047, respectively.

For this three-tranche offering, the Bank of China, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Mizuho Securities, Morgan Stanley, Standard Chartered and UBS are joint lead managers and bookrunners.

Moody鈥檚 Investors Service assigned senior unsecured ratings of 鈥淏aa2鈥� to the Philippines鈥� dollar-denominated global bond offerings. This mirrors the 鈥淏aa2鈥� credit rating with a stable outlook for the Philippines given by Moody鈥檚 in July 2020.

Fitch Ratings last month kept the Philippines鈥� investment grade 鈥淏BB鈥� rating, but maintained the 鈥渘egative鈥� outlook. S&P Global Ratings kept the country鈥檚 鈥淏BB+鈥� rating with a stable outlook in May last year.

鈥淭he government still needs to fund the relatively wider budget deficit since the pandemic started in 2020,鈥� Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said via Viber.

鈥�(The pandemic) reduced the government鈥檚 tax revenue collections especially since the lockdowns and the relatively slower recovery thereafter.鈥�

The Philippines, one of Asia鈥檚 most-active sovereign debt issuers, is looking to raise P2.2 trillion ($42 billion) to plug its budget deficit this year, about 75% of which is to be sourced from the domestic market.

As of the end of last year, the government recorded P11.73 trillion in outstanding debt, up by 19.7% year on year. Foreign borrowings represented just over 30% of the total.

This meant the debt-to-GDP ratio is now at 60.5%, higher than the 54.6% a year earlier and slightly above the 60% threshold considered as manageable by multilateral lenders for developing economies.

Mr. Dominguez previously said he expects the debt-to-GDP ratio to moderate by the end of 2022 or in 2023 as the economy expands and tax collections grow. 鈥� Reuters with Jenina P. Iba帽ez

The Bureau of the Treasury (BTr) raised just P13.9 billion via the short-term securities auctioned off on Monday or less than the programmed P15 billion, even as the offering attracted P25.91 billion in bids.

Broken down, the Treasury awarded just P4.87 billion in 91-day T-bills versus the P5 billion on offer, even as total bids reached P9.47 billion. The average rate for the three-month T-bill climbed by 23.1 basis points (bps) to 1.536% from the 1.305% fetched during the previous auction.

The government also made a partial P4.03-billion award of 364-day papers versus the P5-billion offer even as bids totaled P7.7 billion. The average yield on the one-year paper went up by 5.8 bps to 1.792% from the 1.734% fetched previously.

Meanwhile, the BTr borrowed P5 billion as planned via the 182-day T-bills that attracted P8.74 billion in tenders. The tenor fetched an average yield of 1.607%, up by 14.9 bps from the 1.458% seen previously.

At the secondary market prior to the auction on Monday, the 91- 182- and 364-day T-bills were quoted at 1.2005%, 1.4172% and 1.7486%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System鈥檚 website.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters that T-bill rates continued to rise on expectations of further actions from the US Federal Reserve to curb inflation.

Still, the climb in yields was 鈥渢empered by expectations that BSP (Bangko Sentral ng Pilipinas) will keep rates steady,鈥� Ms. De Leon said.

Meanwhile, a trader said via Viber that the T-bill yields were within expectations as the country moves towards policy normalization.

鈥淲hile (the) market is pretty much assured of steady policy rate domestically, the indicators for consumer price index (are) not that favorable moving forward,鈥� the trader said.

The trader noted that Dubai crude averaged at $95 per barrel year to date, which could make inflation to come in at 4%, based on the BSP鈥檚 sensitivity analysis.

鈥淭hat, coupled with aggressive Federal Open Market Committee guidance, there will be continued pressure on domestic rates.鈥�

The Fed last week raised rates by a quarter percentage point, the first time since 2018, to help combat rising inflation. It penciled in six more increases for the rest of 2022.

The US consumer price index was at 7.9% year on year in February, the fastest in four decades.

Global oil prices have been surging after the Feb. 24 Russian invasion of Ukraine, further raising inflation concerns here and abroad.

Despite inflationary pressures, the BSP is expected to keep benchmark interest rates steady at its March 24 meeting as it supports economic recovery, 15 out of 17 analysts polled by 大象传媒 said.

The BTr wants to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez

The two groups confiscated 161 counterfeit Philippine currency banknotes and 78 fake foreign banknotes on Jan. 19, the BSP said in a press release on Monday.

They arrested four suspects during law enforcement operations in Pampanga and Tarlac.

The four suspects were charged with alleged violations of the revised penal code, including the illegal possession and forging of false treasury or bank notes.

People who fake Philippine currency may be imprisoned for up to 20 years or pay a fine up to P2 million.

鈥淭he central bank, together with law enforcement agencies, such as the NBI, has been actively conducting joint anti-counterfeiting operations,鈥� the BSP said.

BSP Governor Benjamin E. Diokno in January said the central bank is drafting proposals for stiffer penalties against currency counterfeiting and hoarding.

He said the BSP conducted 100 law enforcement operations from 2010 to 2021, seizing 12,400 fake banknotes with a notional value of P7.8 million.

The central bank also seized 14,300 counterfeit dollar bank notes with a notional value over $92 million.

The BSP is asking the public to report information on currency counterfeiting to law enforcement. 鈥� Jenina P. Iba帽ez

In a note on Monday, Moody鈥檚 said the BSP still has leeway to keep rates on hold after inflation eased to 3% in February.

鈥淭he central bank is keeping a close watch on inflation expectations,鈥� Moody鈥檚 said.

鈥淩ussia鈥檚 invasion of Ukraine has heightened upside risks from high global energy and food prices. Monetary policy is expected to start normalizing in the September quarter.鈥�

The BSP is likely to keep rates steady at its March 24 meeting, according to 15 out of 17 analysts polled by 大象传媒. The central bank is expected to maintain its support for the economic recovery despite inflationary pressures caused by the war.

Oil prices have been volatile since Russia, a top exporter of crude oil, invaded Ukraine in February.

Although the Asia-Pacific is not experiencing the same rate of price growth seen in North America and Europe due to the war, Moody鈥檚 Analytics in a separate note said the region can expect rising producer and consumer prices in the second quarter.

Noting strong economic performance in parts of the Asia-Pacific, Moody鈥檚 said central banks in the region could start policy normalization soon.

鈥淭aiwan joins South Korea, Singapore and New Zealand on the road toward policy normalization,鈥� the research firm said.

鈥淭he next may be the Philippines, where recent economic performance has been very strong.鈥�

The BSP鈥檚 next policy review after Thursday is on May 19. 鈥� Jenina P. Iba帽ez

The Bureau of the Treasury (BTr) will offer P15 billion in Treasury bills (T-bills) on Monday, or P5 billion each in 91-, 182- and 364-day securities.

On Tuesday, it will auction off P35 billion in seven-year Treasury bonds (T-bonds) with a remaining life of six years and four months.

A bond trader said via Viber that T-bill yields may inch up by 5 basis points (bps) this week, while the seven-year T-bond rates could range between 5.35% and 5.55%.

鈥淭he Fed rate hike was as expected, but the elephant in the room remains to be the ongoing conflict between Russia and Ukraine as this also impacts domestic inflation,鈥� the trader said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said T-bill yields could continue to go up this week in line with a weekly rise in the secondary market.

He said the rate hike fired off by the US Federal Reserve last week has already been priced in by the market, along with Russia鈥檚 continued invasion of Ukraine, which had pushed up global oil and commodity prices.

The Fed last week raised rates by a quarter percentage point, the first time since 2018, to help combat rising inflation. It penciled in six more increases for the rest of 2022.

Global oil prices have been surging after the Feb. 24 Russian invasion of Ukraine, raising inflation concerns here and abroad.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.2005%, 1.4172%, and 1.7486%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System鈥檚 website.

Meanwhile, the seven-year bonds fetched a yield of 5.48%.

The government partially awarded the T-bills it offered last week as investors asked for higher rates due to rising oil prices and ahead of the Fed鈥檚 rate hike. The BTr raised just P9.14 billion via the short-term securities or less than the programmed P15 billion even as the offering attracted P23.35 billion in bids.

Broken down, the Treasury awarded just P3.04 billion in 91-day T-bills even as total bids reached P8.96 billion for the P5 billion on offer. The average rate for the three-month T-bill climbed by 40.6 bps to 1.305% from the 0.899% fetched during the previous auction.

The BTr also awarded only P3 billion in 182-day T-bills that attracted P7.22 billion in tenders versus the P5-billion program. The tenor fetched an average yield of 1.458%, up by 30.1 bps from the 1.157% seen previously.

The government likewise made a partial P3.1-billion award of the 364-day papers versus the P5-billion offer even as bids totaled P7.17 billion. The average yield on the one-year paper went up by 16.6 bps to 1.734% from the 1.568% fetched previously.

Meanwhile, the last time the government offered the seven-year T-bonds to be auctioned off on Tuesday was on Jan. 25, when it borrowed P35 billion as planned as total tenders reached P55.62 billion.

The debt papers were awarded at an average rate of 4.689%, up by 22.1 bps from the 4.468% quoted when the series was last awarded on Oct. 26.

The BTr plans to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez

An SEC crackdown on abusive and illegal lending has led to the conviction of 76 individuals, based on eight cases on violations of the Lending Company Regulation Act (LCRA), the DoF said in a news release on Saturday.

The SEC revoked the registration of 2,081 firms.

The regulator has also issued cease-and-desist orders against 73 lending applications and cancelled the licenses of 36 financing or lending companies for violating the LCRA and other rules.

鈥淲e are also creating a financing and lending companies division within the SEC to focus exclusively on the regulation and monitoring of these entities,鈥� SEC Chairman and Chief Executive Officer Emilio B. Aquino said.

Mr. Aquino said that the SEC has been rolling out a campaign on abusive lending companies after the commission received complaints from consumers about the firms鈥� collecting practices. Such practices include threats and insults against borrowers.

Meanwhile, the SEC and the Philippine National Police in February arrested 46 employees of Cashtrees Lending Corp. for violations of the Cybercrime Prevention Act and the LCRA.

The SEC said most of the company鈥檚 online applications, including Goodpocket, Easymoney, 365 Cash, and Rushloan, are unregistered.

鈥淭o date, we revoked over 2,000 certificates of registration of lending companies that failed to secure their requisite certificate of authority, pursuant to LCRA,鈥� Mr. Aquino said.

鈥淥ur next step is to sustain this crackdown on unregistered and abusive collection practices of online lending applications.鈥� 鈥� Jenina P. Iba帽ez

The department鈥檚 Chief Economist Gil S. Beltran, in an economic bulletin on Saturday, said debt reduction efforts need to be focused on bringing down the debt-to-GDP ratio by narrowing the deficit.

鈥淭he current medium-term fiscal program is calibrated such that the deficit gradually narrows down without sacrificing infrastructure spending,鈥� he said.

The DoF is preparing a fiscal consolidation plan to manage the government鈥檚 outstanding debt, which grew nearly 20% to听P11.73 trillion at the end of 2021. This pushed the debt-to-GDP ratio to 60.5%.

The 2021 deficit was P1.7 trillion, up 21.87%, with the Treasury bureau citing spending growth due to infrastructure investment and pandemic recovery efforts.

鈥淭he 2021 deficit is estimated to be around 8.2% of GDP (gross domestic product) and is programmed to fall to 5.1% by 2024,鈥� Mr. Beltran said.

鈥淚n contrast, infrastructure spending, (as a share of) GDP, could have reached as much as 5.6% last year, set to increase to 5.9% this year, and settle at 5.4% by 2024.鈥�

Mr. Beltran said continued infrastructure spending is key to attracting investors.

鈥淐utting infrastructure spending may narrow down the deficit momentarily but will definitely be counter-productive in the long run as far as economic recovery is concerned,鈥� he said.

鈥淪imply put, a half-finished bridge does not cut travel time even by a minute. Infrastructure projects have to be fully completed before they can increase the country鈥檚 productive capacity and enhance its growth potential.鈥�

Institute for Leadership, Empowerment, and Democracy Executive Director Zy-za Nadine Suzara said last month that the听government should avoid wasteful expenditure and instead focus on funding pandemic-response measures.

She called budget priorities in 2022 鈥渦nfairly (weighted towards) infrastructure projects鈥� while P250 billion in projects for education, health, and social services were to be funded via unprogrammed appropriations, which can only be financed from excess or new revenue. 鈥� Jenina P. Iba帽ez

PhilHealth in 2021 received P80.9 billion, up 29.8%.

The National Irrigation Administration received P38.3 billion in subsidies, up 13.8%.

Last year鈥檚 total declined as subsidies extended to the Land Bank of the Philippines (LANDBANK) fell to P476 million from P23.3 billion a year earlier.

Subsidies to other government corporations, excluding financial institutions and major non-financial government corporations, slipped by 18.9% to P106.6 billion.

The government subsidizes state-run firms to cover operational expenses not supported by their revenue.

In December, subsidies given to GOCCs fell by nearly half year on year to P21.4 billion, down 48.1%.

The National Housing Authority received the most subsidies in December with P8.1 billion.

The National Irrigation Administration got P4.1 billion, PhilHealth P4 billion and Philippine National Railways P1.2 billion.

Other top recipients in December included the National Electrification Administration with P756 million, the Philippine Coconut Authority P705 million and LANDBANK P476 million.

GOCCs that did not receive budget support in December were Small Business Corp., Philippine Postal Corp., the Philippine Fisheries Development Authority, the Philippine Crop Insurance Corp., the Cagayan Economic Zone Authority, the Bases Conversion Development Authority, the Local Water Utilities Administration, the National Food Authority, and the National Home Mortgage Finance Corp.

Subsidies in 2020 had increased 13.6% to P229 billion. 鈥� Jenina P. Iba帽ez

In a study, the ADB found that RCEP implementation adds $263 billion to global income, based on 2030 baseline projections, Cyn-Young Park, ADB director for Regional Cooperation and Integration, Economic Research and Regional Cooperation Department said in a webinar on Thursday.

The RCEP is a trade deal involving Australia, China, Japan, South Korea, New Zealand and the 10 members of the Association of Southeast Asian Nations (ASEAN). It has been in force in 11 countries since Jan. 1.

Meanwhile, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to add $188 billion.

鈥淭he income gains (for RCEP) are somewhat greater than those from the CPTPP,鈥� she said.

The CPTPP is a trade deal among听Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

鈥淚n terms of export effects, the patterns are quite similar to income effects,鈥� Ms. Park said.

RCEP adds $496 billion to world exports, while the CPTPP adds $312 billion.

President Rodrigo R. Duterte ratified RCEP on Sept. 2, 2021.听The Senate failed to give its concurrence before it adjourned on Feb. 3 for the election break.

Groups such as the Federation of Free Farmers have said that safeguards for the agriculture sector need to be in place before the Philippines signs on to the deal.

Trade Assistant Secretary Allan B. Gepty has said that delayed participation in the RCEP will send the 鈥渨rong signal鈥� to investors and put Philippine businesses at a disadvantage in the region. 鈥� Jenina P. Iba帽ez

The current payment system is only open from 8 a.m. to 5 p.m. daily, Customs Commissioner Rey Leonardo Guerrero said in a webinar on Thursday.

鈥淲e鈥檙e working with the Philippine clearing house center for us to be able to come up with an upgraded version of this payment system… which will allow 24/7 payment for these shipments, or particularly exports.鈥�

Mr. Guerrero said exporters can also open a pre-payment account for their shipments.

Meanwhile, Mr. Guerrero also addressed corruption allegations at his bureau.

Most presidential candidates at a televised debate held by CNN Philippines last month indicated that they would investigate the Bureau of Customs for corruption if they won the presidency.

鈥淭hat was really a sad awakening for us because all the while we were confident that we were doing our best to address all of these issues,鈥� Mr. Guerrero said. 鈥淭he bad impression that the bureau has acquired over many decades of neglect cannot be erased in just two or three years. This is something we have to work on.鈥�

The bureau reported that it transferred 721 of its employees to other offices and ports last year following an anti-corruption campaign.

Customs dismissed three employees and suspended 17 over the course of the year. Another 19 were relieved from their posts but remain in active service.

鈥淲e tried our best to investigate and follow up the prosecution of those found involved in malpractice or in graft and corruption. However, the decision, the outcome of the cases, is actually outside the jurisdiction of the Bureau of Customs. This is a concern that we have raised with the agencies concerned,鈥� Mr. Guerrero said.

The Philippines fell two spots to 117th place out of 180 countries and territories in the 2021 Corruption Perceptions Index.

Transparency International gave the Philippines a score of 33 out of 100, which is based on perceived levels of public sector corruption, a 鈥渉istoric low鈥� for the country. 鈥� Jenina P. Iba帽ez

The ADB in its Southeast Asia: Rising from the Pandemic report launched Wednesday said the coronavirus disease 2019 (COVID-19) pandemic disproportionately affected young people in the Philippines.

While Filipinos in many sectors lost their jobs, employment in information and communications technology along with professional and business services was more resilient.

鈥淭his divergence will increase skills mismatches as workers do not transition easily between sectors given differences in required skills. Companies have also been rapidly adopting digital technology in their business models, further raising demand for higher value-added skills,鈥� the ADB said.

鈥淭hese developments are likely to increase the mismatch between new skills demanded by employers and those possessed by displaced workers.鈥�

The jobless rate for 2021 eased to 7.8% from 10.4% a year earlier.

Philippine unemployment had hit a record high of 17.6% in April 2020, when the government implemented strict lockdowns to contain the pandemic.

The International Labour Organization (ILO) in January said Philippine unemployment could hit 1.1 million in 2022, or 10% higher than pre-pandemic levels.

The impact of the pandemic on jobs could be even bigger after a large-scale exit from the labor force, which does not count as unemployment, the ILO said.

鈥淲hile job losses have occurred across most sectors, the hardest-hit sectors are those dependent on personal contact, such as accommodation, food services, transportation, and recreational services,鈥� the ADB report said.

In response, the ADB said the Philippines should invest in upskilling through industry-led training and apprenticeship programs. Public-private partnerships, the report added, can help link those that do not have access to digital technology to training.

The ADB also noted that unemployment insurance is limited in the Philippines.

鈥淚t is critically important that the Social Security System has a well-funded unemployment insurance scheme to provide workers with income stability during major economic shocks and disruptions to the labor market,鈥� it said.

The report said that Southeast Asian governments should invest more in health systems to respond to future pandemics and support economic growth.

鈥淲e encourage Southeast Asian governments to invest in smart, green infrastructure and adopt technological innovations to reinvigorate economic growth,鈥� ADB President Masatsugu Asakawa said. 鈥� Jenina P. Iba帽ez

THE NATIONAL Economic and Development Authority (NEDA) is confident the Philippines could still reach its economic growth target this year, despite the impact of Russia鈥檚 invasion of Ukraine on prices.

鈥淎s of the end of year 2021, I believe we were a hundred billion short from reaching pre-pandemic level. So, I still believe, in the first quarter, we will exceed the 2019 level, and there have been significant developments in the domestic economy,鈥� Socioeconomic Planning Secretary Karl Kendrick T. Chua said at a Tuesday briefing.

The shift to Alert Level 1, the least strict pandemic restrictions, in several areas has added over P9 billion to the economy per week, he added.

NEDA also expects a return to face-to-face schooling to add P12 billion to the economy each week.

However, there are concerns the ongoing geopolitical conflict in Eastern Europe may hurt the Philippine economy鈥檚 recovery. Consumption is expected to take a hit as prices of fuel and basic commodities continue to climb.

鈥淯nfortunately, we are facing global headwinds to our economy. We believe we have a very strong domestic economy that can withstand that. We also believe the current global tension is temporary in nature,鈥� Mr. Chua said.

Government economic managers said the Philippine economy will be 鈥渃ollateral damage鈥� to the Russia-Ukraine war as oil and food prices increase. The conflict could also push up interest rates or the cost of borrowing, while investors are expected to be more conservative.

To assist public utility vehicle drivers and agricultural workers affected by oil price hikes, the government has released P3 billion in subsidies so far.

鈥淲e are ready to support the affected sectors. We also have to think about our strategies and calibrate our policies so that we achieve the highest gain for the people, not only certain groups,鈥� Mr. Chua said.

鈥淚 think we are still very much on track to our projected growth targets for this year,鈥� he added.

The government expects the economy to expand by 7% to 9% in 2022. The statistics agency is scheduled to release the first-quarter gross domestic product (GDP) data on May 12.

In 2021, the economy grew by 5.6%, reversing the 9.6% contraction a year earlier but remained below pre-pandemic expansion.

鈥淲e really don鈥檛 know how long this crisis or tension (in Ukraine) would last. Of course, we are hoping a few weeks or months,鈥� Mr. Chua said.

Meanwhile, the peso is seen to be vulnerable to the effects of the Russia-Ukraine war as the net importing country faces twin budget and current account deficits, adding pressure on the central bank to hike rates, Oxford Economics said.

The peso weakened by 1.6% since the crisis began on Feb. 24, the think tank said. 鈥� 闯.笔.滨产补帽别锄

The Bureau of the Treasury (BTr) raised just P13.035 billion via the reissued five-year T-bonds it auctioned off on Tuesday, less than the programmed P35 billion, even as the offering attracted P35.305 billion in bids.

The debt papers, which have a remaining life of four years and 23 days, were awarded at an average rate of 4.669%, up by 58 basis points (bps) from the 4.089% quoted when the series was last offered on Feb. 3.

The average yield fetched for the debt papers was also higher than the 4.4168% quoted for the four-year tenor 鈥� the closest benchmark to the remaining life of the reissued papers 鈥� at the secondary market prior to the auction, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System鈥檚 website.

Had the Treasury made a full award of its offer, the reissued bonds would have fetched an average rate of 5.015%.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters that yields bid by investors continued to rise as they remained defensive ahead of the Fed鈥檚 policy decision this week.

鈥淟ingering concerns on higher inflation continues,鈥� she said.

Meanwhile, a bond trader said via Viber that the yields sought by investors remained high as expected as they expect inflation to exceed the central bank鈥檚 2-4% target anew due to rising prices of oil and other commodities.

鈥淥f course, this is being triggered by effects of ongoing Ukraine-Russia tension, as well as the lockdown in China, which may prolong supply chain disruptions,鈥� the trader said.

鈥淎nother thing is the FOMC (Federal Open Market Committee) meeting on Thursday, where markets are wary on how hawkish they will be given last week鈥檚 oil rally.鈥�

Fed Chairman Jerome H. Powell previously said he is inclined to support a 0.25% rate hike at the March 15-16 FOMC meeting and is open to a more aggressive move in the future if inflation continues to rise.

Global oil prices have been surging since the Feb. 24 Russian invasion of Ukraine, raising inflation concerns here and abroad.

These concerns were exacerbated by potential supply chain disruptions after China expanded lockdown restrictions in response to an increase in coronavirus disease 2019 cases there.

The BTr wants to raise P250 billion from the domestic market this month, or P75 billion via Treasury bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez

The state-run bank lent P30.96 billion to 687 borrowers at end-January, LANDBANK said in a press release on Tuesday. The project, known as I-RESCUE (Interim REhabilitation Support to Cushion Unfavorably affected Enterprises by COVID-19), was launched in April 2020.

Broken down, loans went to 462 micro, small and medium enterprises, 115 cooperatives, 105 large enterprises, and five microfinance institutions.

They can borrow up to 85% of their emergency or permanent working capital needs. The program has an interest rate of 5% per year over three years, after which it is subject to repricing. The loan is payable in 10 years and has a two-year maximum grace period on the principal repayment.

The program 鈥渁ims to provide credit and loan restructuring assistance to businesses adversely affected by the pandemic, under more flexible terms and conditions.鈥� Borrowers may avail of the loans until the end of 2022.

鈥淟ANDBANK recognizes the crucial role of local businesses to ramp-up the country鈥檚 ongoing economic recovery,鈥� LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said.

鈥淲e will continue to provide timely and accessible credit assistance to serve their financial requirements amid the pandemic and beyond.鈥�

As of end-January, the bank also approved P101.1 billion worth of loans to 365 local government units to finance coronavirus response initiatives.

LANDBANK posted a net profit of P21.75 billion in 2021, up 27%. 鈥� Jenina P. Iba帽ez

The Bureau of the Treasury (BTr) raised just P9.14 billion via the short-term securities or less than the programmed P15 billion even as the offering attracted P23.35 billion in bids.

Broken down, the Treasury awarded just P3.04 billion in 91-day T-bills even as total bids reached P8.96 billion for the P5 billion on offer. The average rate for the three-month T-bill climbed by 40.6 basis points (bps) to 1.305% from the 0.899% fetched during the previous auction.

The BTr also awarded only P3 billion in 182-day T-bills that attracted P7.22 billion in tenders versus the P5-billion program. The tenor fetched an average yield of 1.458%, up by 30.1 bps from the 1.157% seen previously.

The government likewise made a partial P3.1-billion award of the 364-day papers versus the P5-billion offer even as bids totaled P7.17 billion. The average yield on the one-year paper went up by 16.6 bps to 1.734% from the 1.568% fetched previously.

At the secondary market prior to the auction on Monday, the 91- 182- and 364-day T-bills were quoted at 1.1362%, 1.2738% and 1.6577%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System鈥檚 website.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters that all T-bill tenors were partially awarded as rates continued to climb due to the surge in oil and commodity prices due to the war between Russia and Ukraine.

Yields also went up as markets priced in the anticipated US Federal Reserve rate hike this week, she said.

Market players were defensive amid geopolitical tensions between Ukraine and Russia and ahead of the US Federal Reserve meeting this week, a trader said.

Oil prices have been surging since Russia invaded Ukraine on Feb. 24, but slipped on Monday amid diplomatic negotiations to end the war, Reuters reported.

Brent crude futures fell by 2.7% to $109.62 a barrel on Monday, while US West Texas Intermediate futures declined by 2.8% to $106.23 per barrel.

Meanwhile, US Federal Reserve Chairman Jerome H. Powell previously said he is inclined to support a 0.25% rate hike at the upcoming March 15-16 meeting of the Federal Open Market Committee.

Mr. Powell has also said that the Fed could raise rates faster in the next meetings if inflation does not ease. The US consumer price index rose to a four-decade high of 7.9% year on year in February as gasoline and food prices increased.

The government had rejected all T-bill and Treasury bond (T-bond) bids in the previous two weeks due to rising rates.

The BTr wants to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez with Reuters

鈥�(Digital payments) would be serving the manufacturing sector and the banking sector as well as small and medium businesses,鈥� Hitachi Asia Corporate Strategy General Manager Gerald Hane said in a virtual interview.

The company鈥檚 services could be used to connect unbanked Filipinos to digital payments, he said.

鈥淲e have some experience in other countries, but in the Philippines, this is something we鈥檙e moving toward. It is to be deployed.鈥�

Hitachi Payment Services Pvt. Ltd. offers point of sale systems, internet payments solutions for e-commerce, and transit technology for metro rail projects, among others.

A business-to-business firm, Mr. Hane said the company provides the underlying technology or backbone behind digital payments.

The company has rolled out cash recycling machines used for deposits and withdrawals in the Philippines.

鈥淗itachi has installed over 1,200 of these cash recycling machines in Manila, and some surrounding cities as well,鈥� Mr. Hane said.

The conglomerate works on projects in water, renewable energy, mobility, and financial services.

In the Philippines, the company is working on desalination projects and is eyeing transport projects.

鈥淥ne of Hitachi鈥檚 offerings is in the area of mass transit, and that is both in the electrification of buses as well as trains. So trains are a long-standing business line for Hitachi, and that鈥檚 been expanding globally,鈥� Mr. Hane said.

鈥淚n the Philippines, Hitachi is interested in also contributing to this area of mobility leveraging its capability of trains, and will hopefully be able to contribute to projects such as the North-South commuter railway, which is one area in which Hitachi is interested.鈥� 鈥� Jenina P. Iba帽ez

The local unit closed at P52.475 per dollar on Monday, shedding 18.5 centavos from its P52.29 finish on Friday, based on Bankers Association of the Philippines data.

This was the peso鈥檚 weakest finish in more than two years or since it closed at P52.475 on Aug. 15, 2019, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The peso opened Monday鈥檚 session at P52.32 per dollar, which was also its intraday best. Meanwhile, its weakest showing was at P52.49 against the greenback.

Dollars exchanged dropped to $806.55 million on Monday from $1.099 billion on Friday.

Mr. Ricafort said the peso鈥檚 weakness reflected the volatility in global financial markets amid the Russia-Ukraine conflict. This was also the case for the local stock market, as the Philippine Stock Exchange index plunged by 295.24 points or 4.15% to 6,816 on Monday. The wider all shares index dropped by 126.97 points or 3.36 points to 3,638.49.

Reuters reported that Russia has continued to advance its military forces in Ukraine and on Sunday fired at a military base near the border of Poland, which is a member of the North Atlantic Treaty Organization. Despite the atrocities, both sides are still gearing for further diplomatic talks in hopes to resolve their issues.

Meanwhile, a trader in an e-mail said there was cautious sentiment in the market ahead of the Federal Open Market Committee鈥檚 two-day meeting which starts on Tuesday.

The Fed is widely expected to start increasing interest rates in order to quell a four-decade high inflation in the United States. Fed Chairman Jerome H. Powell has said he would support a quarter-percentage-point interest rate hike.

For Tuesday, Mr. Ricafort gave a forecast range of P52.35 to P52.55, while the trader expects the local unit to move within P52.35 to 52.60 per dollar.

TWIN DEFICITS
The peso is seen to be vulnerable to the effects of the Russia-Ukraine war as the net importing country faces twin budget and current account deficits, adding pressure on the central bank to hike rates, think tank Oxford Economics said.

Sung Eun Jung, Oxford Economics senior economist, said in a brief on Monday that Russia鈥檚 invasion of Ukraine was not priced in by markets, leading to a surge in commodity prices and boosting demand for the US dollar.

While commodity exporters in the Asia-Pacific outperformed, the currencies of commodity importers did the opposite. The Philippine peso, along with the Indian rupee, South Korean won, and Thai baht, depreciated by about 2% against the greenback, the think tank said.

The peso specifically weakened by 1.6% since the crisis began on Feb. 24.

鈥淒ownside risks are strongest for historically 鈥榯win deficit鈥� countries who are also net commodity importers in the region, namely India and the Philippines,鈥� Ms. Jung said.

Higher inflation and worse deficits heighten the pressure on the Bangko Sentral ng Pilipinas to raise rates, she said.

鈥淏ut slowing growth is making them drag their feet on policy normalization,鈥� she said. 鈥淗ow they navigate this policy dilemma will have implications for their FX trajectory once the dust settles.鈥�

Oxford Economics expects the currency divergence between net importers and exporters in the Asia-Pacific to narrow if the US dollar weakens by the second half. 鈥� Luz Wendy T. Noble and Jenina P. Iba帽ez with Reuters

The BTr said the government鈥檚 debt payments rose by 25% from P962.5 billion the previous year. Last year鈥檚 total was just under the P1.28-trillion debt service budget for 2021.

In December alone, the debt service bill stood at P69.9 billion, down by 5% from the same month in 2020.

Amortization payments accounted for 60.9% of the total debt service bill in December, after slipping by 11.9% to P42.66 billion.

Principal payments to foreign creditors that month amounted to P6.3 billion, while those to domestic lenders totaled P36.36 billion.

Meanwhile, interest payments in December grew by 7.9% to P27.33 billion.

Broken down, interest paid on domestic debt reached a total of P24.18 billion, up by 2.4% year on year.

These payments consisted of P12.79 billion in retail Treasury bonds, P9.2 billion in fixed-rate Treasury bonds, and P1.07 billion in Treasury bills.

On the other hand, interest paid on external debt surged by 82.6% year on year to P3.14 billion.

The government borrows from foreign and local sources to plug its budget deficit as it spends more than it makes to support programs that will stimulate economic growth.

As for the full-year 2021, amortization payments made up 64.3% of the total debt service bill, while the rest went to settle interests.

Amortization payments in the period jumped by 33.1% to P774.73 billion.

Broken down, principal payments made to external sources reached P237.19 billion, up by 67.4% year on year. Those made to domestic lenders rose by 22% to P537.54 billion.

On the other hand, interest payments as of the end of last year increased by 12.9% to P429.43 billion.

Interest paid to domestic debt in 2021 hit P333.34 billion, jumping by 19.5% year on year. In contrast, interest payments on external debt slipped by 5.2% to P96.1 billion.

The government鈥檚 borrowings reached P2.58 trillion in 2021, declining by 5.9% year on year. 鈥� 闯.笔.滨产补帽别锄

The Bureau of the Treasury (BTr) will offer P15 billion in Treasury bills (T-bills) on Monday or P5 billion each in 91-, 182- and 364-day securities.

On Tuesday, it will auction off P35 billion in reissued five-year Treasury bonds (T-bonds) with a remaining life of four years and 23 days.

鈥淎fter two consecutive T-bill auction rejections, yields for this T-bill auction will be much higher to realign with yields in the secondary market,鈥� a trader said via Viber.

Meanwhile, the trader said the average yield on the five-year paper would likely range between 4.35% and 4.6%.

鈥淏ids are expected to be defensive given the anxiety brought by the ongoing war in Ukraine that resulted to oil prices skyrocketing and this is expected to exert some pressure to our inflation,鈥� the trader added.

Global oil prices increased on Friday as talks to restore the Iran nuclear deal, which would lift US sanctions on Iran鈥檚 oil sector, were paused over last-minute Russian demands, Reuters reported.

Brent crude futures increased by 3.1% to $112.67 a barrel on Friday.听 US West Texas Intermediate crude futures rose by 3.1% to $109.33 a barrel.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that government securities yields would still be higher, in line with the secondary market, after a weaker peso exchange rate.

Higher inflation in the United States has also increased the likelihood of a rate hike from the US Federal Reserve, he said.

The peso closed at P52.29 versus the dollar on Friday, depreciating from P52.155 the day before听 US inflation hit a 40-year high.

The US consumer price index rose to a four-decade high of 7.9% year on year in February as gasoline and food prices increased.

US Federal Reserve Chairman Jerome H. Powell previously said he is inclined to support a 0.25% rate hike at the upcoming March 15-16 meeting of the Federal Open Market Committee.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.1362%, 1.2738%, and 1.6577%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System鈥檚 website.

Meanwhile, the five-year bond fetched a yield of 4.8103%.

As rates continued to rise, the government rejected all T-bill and T-bond bids in the previous two weeks.

Last week, the BTr did not award any T-bills even as tenders reached P21.23 billion, higher than the P15 billion on offer.

Broken down, bids for the 91-day securities reached P7.61 billion, higher than the P5-billion plan. Had the Treasury made a full award, the three-month debt papers would have fetched an average rate of 1.577%, surging by 67.8 basis points (bps) from the 0.899% seen the last time the BTr borrowed the full amount.

The BTr also rejected the P6.46 billion in tenders for the 182-day securities even as this was higher than the programmed P5 billion. The average rate of the six-month T-bill would have gone up by 81 bps to 1.967% from 1.157% previously had the government made a full award.

Lastly, the government turned down P7.17 billion in bids for the 364-day debt papers from an initial offer of P5 billion. If the tenor was fully awarded, the average yield on the one-year instrument would have stood at 1.943%, jumping by 37.5 bps from the 1.568% fetched previously.

Meanwhile, the last time the government offered the five-year T-bonds to be auctioned off on Tuesday was on Feb. 3, where it raised P35 billion as planned as total tenders reached P60.66 billion. The debt papers were awarded at an average rate of 4.089%.

The BTr wants to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. 鈥� Jenina P. Iba帽ez with Reuters

The DoF approved 254 coronavirus disease 2019 (COVID-19) tax exemptions valued at P8.7 billion last year, it said in a statement on Saturday. This represents 37% or nearly two-fifths of the total import tax exemptions processed by the department鈥檚 revenue office.

The P23.4 billion in estimated total foregone revenue from imports in 2021 is close to the pre-pandemic total of P23.9 billion in 2019.

鈥淗owever, this is primarily due to the foregone revenue attributable to imports of COVID-19 vaccines, as well as imports of items related to the COVID-19 response,鈥� Finance Assistant Secretary Dakila Elteen Napao said.

The office also approved over 800 applications for value-added tax exemptions for COVID-19 medicine and medical devices. Total foregone revenue from these exemptions hit P382.1 million.

Finance Secretary Carlos G. Dominguez III has included COVID-19 vaccines in the revenue office鈥檚 express lane, making such shipments eligible for tax exemption processing within 24 hours, as against the usual three-day process. Filing fees for express lane applications have been waived for vaccines.

The department announced in February 2021 that the vaccines had been granted tax and duty exemptions.

The Bureau of Customs collected P645.77 billion in revenue in 2021, up 20% as import volumes gradually improved. The 2020 total had declined by 14% as the pandemic slowed down international trade. 鈥� Jenina P. Iba帽ez

LANDBANK approved P101.1 billion worth of loans to 365 LGUs as of the end of January, the bank said in a statement on Sunday. The LGU coronavirus disease 2019 (COVID-19) lending program was launched in July 2020.

The lending program鈥檚 funding is P150 billion, raised drastically from the initial P10 billion, in order to accommodate more LGU needs.

Eligible uses for funding from the RISE-UP LGUs program, or Restoration and Invigoration package for a Self-Sufficient Economy towards UPgrowth for LGUs, include the purchase of produce from farmers in their jurisdictions and the construction of facilities that link products to their markets.

Projects enhancing basic and support services, social welfare, healthcare, and infrastructure are also eligible under the program.

The bank also encouraged LGUs to take advantage of an interest subsidy program.

Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) allotted P1 billion each to state-run banks to provide interest subsidies to LGUs that require additional financing for pandemic recovery programs.

鈥淟ANDBANK is the biggest development partner of the LGU sector, with all provinces, cities, and municipalities now maintaining deposit accounts with LANDBANK,鈥� LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said.

LANDBANK posted a net profit of P21.75 billion in 2021, up 27%. 鈥� Jenina P. Iba帽ez

鈥淭he BSP remains focused on preserving monetary policy support as sustaining the economic recovery remains a priority,鈥� BSP Governor Benjamin E. Diokno said in a statement sent to reporters via Viber.

鈥淎t the same time, the BSP stands ready to respond to potential second-round effects arising from elevated inflation that can disanchor inflation expectations in keeping with our price and financial stability mandates,鈥� he added.

The Monetary Board raised its inflation forecast for the year to 3.7% from 3.4%, previously. This is still within the BSP鈥檚 2-4% target range. Mr. Diokno earlier warned that the increase in oil prices could cause inflation to breach the target in the second quarter before slowing again in the next six months.

Aside from oil, the BSP said the Russia-Ukraine crisis may push wheat prices to rise, as both countries are major exporters of the commodity.

鈥淭he ongoing conflict could also cloud prospects for global trade and investment, as uncertainty spills over into financial markets through higher volatility and weaker market confidence,鈥� Mr. Diokno said.

The BSP called on the National Government to implement measures that will address the inflation risks and threats to economic recovery caused by the ongoing war in Eastern Europe. It noted that easing restrictions will allow more economic activities and boost market confidence.

Economic managers on Monday recommended to President Rodrigo R. Duterte that the entire country be shifted to Alert Level 1 to help strengthen the domestic economy.

The BSP will have its next policy review on March 24. It kept rates steady last month, citing the need to keep supporting economic recovery.

Economic managers target 7-9% growth this year after a 5.6% growth in 2021.

OIL PRICES TO HIT GROWTH
Meanwhile, economic growth may be slashed by 100 basis points (bps) if fuel prices continue to surge, as elevated inflation could hit consumers and businesses still reeling from the pandemic, according to ANZ Research.

In a report published on Thursday, ANZ Southeast Asia and India Chief Economist Sanjay Mathur and economist Krystal Tan warned that the supply shock comes at a time when economies are still recovering from the crisis. They said this could also worsen inflation dynamics in the region.

Given oil imports of the Philippines is equivalent to 3.3% of the gross domestic product (GDP), the ANZ analysis showed that a 10%, 20%, and 30% increase in fuel prices could reduce economic growth by 33 bps, 67 bps, and 100 bps, respectively. The percentage increase is relative to the 2021 average Brent crude price of $71.

鈥淎s Indonesia and Malaysia are net energy exporters, they stand to gain from higher prices via stronger terms of trade. By contrast, Thailand is the worst impacted, followed by India and the Philippines,鈥� ANZ said.

While fiscal parameters have significantly deteriorated from the pandemic, ANZ Research said ensuring assistance to affected sectors will be key to mitigate the spillover impact of the Ukraine crisis.

鈥淭here is also some scope to reallocate development spending towards subsidies, particularly in India and the Philippines where significant increases in development spending have been budgeted for 2022,鈥� it said.

ANZ said the accommodative stance of central banks in the region can still be maintained, depending on the extent that fiscal authorities will be able to address the situation.

鈥淭he more inflation can be managed, the greater should be the ability of central banks to focus on growth,鈥� it said.

The Philippine government has vowed to release fuel subsidies for the transport and agriculture sector amid the surging prices. It is also reviewing petitions seeking to raise the minimum fare for public utility vehicles.

On the other hand, inflation could still fall within the central bank鈥檚 target range this year as oil price surges driven by Russia鈥檚 invasion of Ukraine pose minimal pressures on recovery, think tank Pantheon Macroeconomics said.

鈥淭he spike in oil prices and consequent increase in futures look severe, on the surface,鈥� Pantheon Senior Asia Economist Miguel Chanco said in a note on Thursday. 鈥淏ut we鈥檇 still need to see bigger gains for transport inflation to flirt with the 2021 peak.鈥�

Transport inflation could add just 0.2 percentage point to headline inflation, he said, noting a possible peak in May.

Mr. Chanco, however, said it is too soon to say that inflation will threaten Philippine consumption. Household spending slipped by just 2% month on month during the Omicron-driven surge in coronavirus cases in January, he said.

Pantheon raised its inflation estimate for 2022 to 3.5% from the previous 2.8% after assessing commodity prices.

鈥淏ut this still broadly represents a slowdown from last year鈥檚 3.9% print,鈥� Mr. Chanco said. This also falls within the BSP target range

Although the war between two of the largest wheat exporters pushed up global prices, the surge is unlikely to add much pressure to a country that mostly eats rice as staple food.

鈥淭he reassuring news for the BSP is that rice accounts for the lion鈥檚 share of the starch in Filipino diets, making up for 72% of the weight of 鈥榗ereal and cereal products鈥� in the CPI (consumer price index) basket,鈥� Mr. Chanco said.

Higher wheat prices, however, could still drive prices of pork higher because the cereal grain is used as a substitute for corn in feed.

John Paolo R. Rivera, Asian Institute of Management economist, said the country has yet to see the impact of the crisis on commodities other than oil.听 He noted the war may have medium- to long-term impact on prices, with the consequences worsening if the crisis is not resolved soon.

鈥淎s oil prices continue to surge, all other sectors dependent on oil would react significantly that will reinforce inflation further. Consider also that the economy is opening up from closures during the pandemic. Both demand pull and cost push inflation are in action,鈥� he said.

Although it is too early to assess if average inflation this year will stay within the central bank target, Mr. Rivera said it would likely be on the higher end, unless tempered by monetary policy.

鈥淎lso, it鈥檚 election season. We have relatively spiked inflation during such period due to election spending that boost demand pull inflation,鈥� he said. The national election is scheduled on May 9.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said on Viber that the risk of second-round inflation effects could be triggered if higher transport fares and wages lead to more price increases.

He said this could lead to stagflation 鈥� or high inflation rate combined with slow economic growth 鈥� 鈥渁mid fragile economic recovery as the country is still reeling from the adverse economic effects of the COVID-19 pandemic.鈥� 鈥� Luz Wendy T. Noble and Jenina P. Iba帽ez