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“Also, we are adding more immigration counters,” Bautista said and the government is now taking space now occupied by concessionaires for the planned improvements. In July, the 26 immigration counters were increased to 44. All the improvements are meant to induce comfort for the passengers. And this includes upgrading the air conditioning system.

Upfront payment

L A ST J uly 25, Bautista said the government will require the winning bidder for the multibillion-peso Naia redevelopment deal to make an upfront payment—initially pegged at P30 billion.

This premium payment, which is typical for public-private partnership (PPP) deals even during the past two ad -

Monetary authorities revised their outlook this year and the next two years. Inflation is now expected to average 5.6 percent this year from the initial estimate of 5.5 percent.

For next year, the BSP's inflation forecast was raised to 3.3 percent from the initial projection of 2.8 percent. The inflation forecast was pegged at 3.4 percent in 2025.

BSP Deputy Governor Francisco Dakila Jr. said among the commodities that the BSP is monitoring in terms of prices are rice, oil and non-oil commodities.

Rice, as part of the Consumer Price Index (CPI), has a weight of 8.87 percent for all households and 17.87 percent for Bottom 30 percent of households.

It can be noted that rice prices in July increased 4.7 percent, the highest since February 2019 when the increase in the commodity’s prices was at 4.5 percent. The Rice Trade Liberalization (RTL) Act was implemented in March 2019. (Full story: https:// businessmirror.com.ph/2023/08/04/ rice-price-hike-may-dampen-momentum-to-tame-inflation/)

Data from the Philippine Statistics Authority (PSA) showed that the Operation of Personal Transport Equipment had a weight of 2.81 percent on the CPI for all households and 1.73 percent for the basket of the poorest households.

Non-oil commodities, Dakila said, are also being monitored because, according to data from the International Monetary Fund (IMF) are expected to clock in an inflation of 4.8 percent in 2023; 1.4 percent in 2024; and 0.5 percent in 2025. PSA said transportation prices contracted 3.2 percent in July.

These, Dakila said, could help mitigate inflation in the coming months. He also noted that while the El Niño is considered as a moderate risk for inflation and GDP growth.

Remolona stressed that the country's GDP target for this year remains attainable. The Development Budget Coordination Committee (DBCC) targets a GDP growth of 6 to 7 percent this year.

"The balance of risks to the inflation forecast continues to lean towards the upside. Potential price pressures are ministrations, was triggered by the demand for the project, Bautista had explained then.

“Investors have a huge opportunity to invest in the Manila airport, given that other countries have already upgraded their airports. With the volume of passengers, the Manila airport would be a good deal for them,” he said.

Bautista said, “Part of the terms of reference is a socalled upfront payment. We are still finalizing the amount, but we are initially looking at P30 billion,” he said.

He defended this provisional requirement by noting that the proponent of the unsolicited proposal called Naia Masterplan even offered as much as P55 billion just to snag the deal.

The proponent, the Manila International Airport Consortium (Miac), is composed of six of the Philippines’ largest conglomerates: Aboitiz InfraCapital Inc., AC Infrastructure Holdings Corp., Asia’s Emerging Dragon Corp., Alliance linked to the impact of possible higher transport charges; higher minimum wage adjustments; persistent supply constraints on key food items; and the effects of El Niño weather conditions on food prices and power rates. Meanwhile, a weaker-thanexpected global economic recovery remains the primary downside risk to the inflation outlook," Remolona said.

Expert views

G I v E N t he latest pause in monetary policy, Oxford Economics said it expects a pause in the succeeding policy meetings of the Monetary Board. A rate cut, however, is expected in the first quarter of 2024. The United Kingdom-based think tank believes the recent inflationary pressures are “supply-driven and unlikely to be sustained.”

Nonetheless, Oxford Economics said, upside risks to inflation include the nationwide minimum wage hike.

The BSP also views the minimum wage hike, particularly in Areas Outside the National Capital Region (AONCR), as a key risk that could lead to higher inflation. Transport fare hikes could also prompt inflation to increase.

“With the global economy set to slow, growth concerns should make the central bank more dovish, raising the risk of an earlier rate cut,” Oxford Economics said.

Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort said he expects the local policy rates would still be a function of future Fed rate moves, regardless of whether this would be a pause or a hike. Ricafort also said the local inflation trend and the behavior of the peso exchange rate, which affects import prices and overall inflation, may also factor in future monetary policy meetings.

“The timeliness and size of any future local policy rate moves (pause or hike) would also be a function of the behavior of peso exchange rate, given its impact on import prices and overall inflation,” Ricafort said.

“So if the peso exchange rate is relatively stable, any future local policy rate adjustments would just match any future Fed rate moves (pause or hike) in the coming months of 2023,” he added.

On Thursday, the peso closed at P56.77 to the United States dollar. It traded at a high of P56.81 and a low of P56.57 to the greenback.

Global - Infracorp Development Inc., Filinvest Development Corp., and JG Summit Infrastructure Holdings Corp. Its P267-billion, 25-yearconcession proposal was placed in the back burner after the National Economic and Development Authority (Neda) approved the P170-billion Naia Rehabilitation Project under a solicited scheme.

Meanwhile, at Thursday’s Rotary forum, Bautista said other projects in the pipeline include tackling the traffic situation as he cited a study that the cost of traffic to the economy is P1.277 trillion a year. Thus, new rail lines are being undertaken, and “shovel-ready” infra modernization thrusts are under way.

The DoTR projects include modernizing the Kalibo, Catbalogan, Laguindingan and Caticlan airports; and pushing forward the rail lines that include that in Mindanao.

All the projects are meant to nudge the economy, especially with the post-Covid situation.