Significant May inflation rise discounted by BSP
MONETARY AUTHORITIES do not expect a substantial increase in inflation this month given stable supplies of basic commodities and a strong peso."Price movements [have so far been]... relatively benign, so we don’t expect a significant rise in inflation," central bank Deputy Governor Diwa C. Guinigundo told reporters on Friday. "Some of the supply indicators, particularly key commodities such as sugar, rice, corn as well a meat products were generally stable, so prices did not move much," he added. The strengthening of the peso "will [also] definitely help" dampen imported inflation, said Mr. Guinigundo, who did not offer an estimate for the May rise in consumer prices. Headline inflation picked up to 4.5% in April, from 4.3% in March, due to higher commodity prices traced to unrest in the oil-rich Arab world. Sought for comment, University of Asia and the Pacific economist Cid L. Terosa yesterday said, "I agree with the BSP (Bangko Sentral ng Pilipinas) as oil prices went down in the period and supply of food commodities was steady. I expect it (inflation) to inch up to around 4.7% and 4.8% just because of price increases of products related to the opening of classes." The central bank, said Mr. Guinigundo, remains vigilant against risks such as the inflow of foreign capital and possible rise in commodity prices. "Continued capital inflow remains an upside risk as it increases domestic liquidity and contributes to demand side pressures, although its impact on exchange rate can be a counterweight," he said. "Commodity prices going up are also a risk on account of high demands from emerging markets and recovery of advanced economies." Mr. Guinigundo said the BSP still expected inflation to breach 5% in the third quarter, due to price increases and capital inflows, but the full-year average would stay within the 3-5% target. Policy rates have been adjusted twice this year -- by 25 basis points on each occasion -- as authorities moved to address rising inflation. The next rate review will be on June 16. -- A. S. O. Alegado
Unemployment increasing
UNEMPLOYMENT REMAINS HIGH and has appreciably increased from late last year, the Social Weather Stations (SWS) said in a new report.
Joblessness among Filipinos at least 18 years old rose to 27.2% in March, up from 23.5% in November 2010, a poll by the independent survey research institution found. This means that an estimated 11.3 million -- split nearly evenly among those who resigned or were retrenched, plus an increase in first-time jobseekers -- are out of work from just 9.9 million four months earlier. The results of the SWS poll, made exclusive to BusinessWorld, compare to the official unemployment figure of 7.4% as of January, equivalent to an estimated 2.9 million Filipinos. The figure was up from 7.1% in October 2010. The SWS uses the traditional definition of joblessness: those "not working and at the same time looking for work." The official definition, meanwhile, since 2005 has included the concept of "availability for work": this takes away individuals looking for jobs but are not available and includes those available but not seeking work for reasons such as tiredness/belief no job is available, awaiting results of an application, temporary illness/disability, bad weather and waiting for rehire/recall. In calculating unemployment, the government also uses a lower labor force boundary of 15 years of age. Applying the official definition, the SWS said the jobless rate among adults 18 years old and above would be 16.8%, equivalent to an estimated 6.1 million Filipinos. Unemployment, the SWS said, has been high since May 2005, falling below 20% only three times -- the last being September 2010’s 18.9%. The new rate of 27.2%, it added, is similar to March 2010’s 27.1%. The SWS record is 34.2%, hit in February 2009. Over the last two surveys, adult unemployment was said to be primarily composed of those who quit or were retrenched. For the latest figure of 27.2%, the SWS said 9% had lost their jobs, 10% had voluntarily left and 7% were first-time jobseekers. Of the 9% who lost their jobs due to circumstances beyond their control, 7% did not have their contracts renewed (up from 5% in the previous survey), 1% saw their companies cease operations (unchanged from November) and 1% were laid off (down from 2% previously). Sought for comment, University of the Philippines economist Raul V. Fabella said that the latest numbers were seasonal, warning that unemployment could increase in the months ahead due to global developments. He also noted that the SWS survey was taken before the current school year ended, thus the rate could be higher in the next review round. "It depends on whether the new graduates decide to go on vacation or look for jobs... if the job market is very soft, chances are they will go [back to] school if they can’t find jobs," Mr. Fabella said. The SWS survey was conducted from March 4-7 using face-to-face interviews of 1,200 adults nationwide. The sampling error margins are ±3% for national and ±6% for area percentages. -- J. D. Poblete | 
