Construction material prices grew by 1.5 percent in Oct.

Retail prices of construction materials in Metro Manila grew by 1.5 percent in October, slightly higher than the 1.1 percent last year, according to data from the Philippine Statistics Authority (PSA).

On a monthly basis, the construction materials retail price index (CMRPI) was also higher than the 1.2 percent in September.

The PSA cited the increase to the higher annual spike in the heavily weighted tinsmith materials index at 2.3 percent from 1.5 percent in the previous month.

Likewise, three commodity groups posted annual increases in prices in October: carpentry materials at 0.9 percent from 0.7 percent in September; painting materials and related compounds at 2.5 percent from 2.1 percent; and plumbing materials at 1.0 percent from 0.8 percent.

An annual increase was also recorded in the price index of masonry materials at 0.1 percent last month from a 0.1 percent annual decline in September.

On the other hand, a slower annual increase was observed in the index of miscellaneous construction materials at 1.1 percent from 1.5 percent in the previous month.

The index of electrical materials, meanwhile, retained its previous September annual rate of 1.7 percent.

In an earlier report, the PSA said the wholesale price growth of construction materials in NCR slowed down in the same month compared to 2023. The construction materials wholesale price index's (CMWPI) 0.3 percent growth was slower than the 1.4 percent in October 2023.

A primary contributor to the CMWPI uptrend was the faster annual increase in the index of hardware at 0.7 percent in October from 0.5 percent.

Source: Manila Times and PSA

PH digital competitiveness drops

The Philippines' digital competitiveness has fallen for a second straight year based on an annual ranking released on Thursday by Switzerland's Institute for Management Development (IMD).

The country was 61st out of 67 economies in the 2024 list, produced by the IMD's World Competitiveness Center (WCC). This was down from 59th last year when it lost three spots from 56th in 2022.

It was next to last among 14 Asia-Pacific countries, unchanged since 2020, and 25th among 30 economies with populations of more than 20 million, also the same as last year.

Singapore continued to lead the list while the United States experienced a three-place drop to fourth. Switzerland and Denmark took second and third, respectively.

Singapore's top ranking was said to reflect its advanced city management, prolific high-tech patent grants, and robust banking and financial sectors.

Switzerland, meanwhile, improved in terms of high-tech exports and cybersecurity, and Denmark was strong in the areas of employee training, e-governance and secure internet servers.

In contrast, the US saw declines in its attitude to globalization, international managerial experience and increasing fears of failure among entrepreneurs.

The IMD ranking measures digital competitiveness using three main factors — knowledge, technology and future readiness — and the Philippines lost places with regard to the first two.

It was 64th in terms of knowledge, 56th in terms of technology — down from last year's 59th and 63rd, respectively. It edged up, however, to 58th from 59th in the area of future readiness.

Broken down further, the Philippines' rankings also slipped with regard to sub-factors under the three main categories.

It fell to 60th from 56th in terms of talent, 61st from 58th in scientific concentration, and remained 62nd in training and education — all under the knowledge pillar.

Sub-factor rankings under technology all fell: 66th from 63rd for regulatory framework, 45th from 41st for capital and 53rd from 43rd in the area of technological framework.

Improvements, however, came in the future readiness sub-factors of adaptive attitudes (52nd from 59th) and IT integration, 58th from 60th, although a drip to 54th from 50th was seen in the area of business agility.

There were some bright spots for the country: it was second overall in terms of female researchers (under scientific concentration) and high-tech exports (technological framework).

It was 22nd with regard to science graduates (training and education), 9th in telecommunication invest ments (capital), and 19th in flexibility and adaptability (adaptive attitudes).

The biggest weaknesses, meanwhile, were in the areas of artificial intelligence (AI) articles (66th, scientific concentration), secure internet servers and communications technology (64th and 66th, respectively, under technological framework), and starting a business and enforcing contracts (65th and 64th, regulatory framework).

The country's main challenges, according to IMD partner the Rizalino Navarro Policy Center for Competitiveness of the Asian Institute of Management, are:

– sustaining job-generating investments;

– ensuring food security to temper inflation and keep prices affordable;

– addressing learning gaps to improve the education system;

– building sustainable infrastructure to reduce climate change vulnerability; and

– resolving the Philippines' territorial rights to the West Philippine Sea diplomatically and peacefully.

Jose Caballero, senior economist at the WCC, said that geopolitical rivalries — particularly between the US and China — were fragmenting the global digital landscape.

Geopolitical tensions have also become a defining feature in shaping digital competitiveness, the IMD said.

Economies, the business school said, will have to grapple with the pace of technological change and capability requirements.

Countries that effectively exploit the power of new technologies such as AI, blockchain and quantum computing, it added, "are likely to enhance their digital competitive advantage, leading to sustained economic growth, improved productivity and greater global influence.

Source: Manila Times

PH to miss income status goal

Economic growth will likely fall short of official targets for this year and the next, a government-owned think tank said, delaying the Philippines' bid to hit upper middle-income status by 2025.

"[The] outlook on Philippine GDP (gross domestic product) growth remains volatile, uncertain, complex, ambiguous, and disruptive (VUCAD) as indicators remain conditioned on economic policies to be implemented by global powers and how responsive the economy would be," the Philippine Institute for Development Studies (PIDS) said in a November discussion paper.

Lower-than-expected third-quarter GDP growth of 5.2 percent has put this year's 6.0- to 7.0-percent goal at risk. As of end-September, growth was below target at 5.8 percent — a 6.6-percent fourth-quarter expansion will be needed to hit the lower end of 6.0 percent.

The PIDS said that October-December growth could pick up to 6.0 percent, driven by "continued government spending on infrastructure development but hampered by the damages of recent natural calamities."

While higher than the previous quarter, full-year growth will fall between 5.8 percent and 6.0 percent, it added.

Moreover, 2025 growth is expected to also fall below the 6.5- to 7.5-percent target at 6.1 percent. Easing inflation and policy rates that will reinforce both consumption and investment activities of the private and public sectors were seen as driving the expansion.

"While the Philippines continued above-expectation results in the first half of 2024 at 6.1 percent... it remained short of the required growth for the Philippines to be escalated to an upper middle-income economy by 2025," the think tank noted.

The goal can be achieved by late next year or early in 2026 " if the economy can grow as much as 8.0 percent with an exchange rate not depreciating much beyond the PHP/USD 58.00 mark," the PIDS said.

Hiking gross national income (GNI) will be crucial to achieving the income status goal, and the think tank said that "by sustaining at least a six to seven percent GDP growth, accompanied by continued growth in net factor income from abroad through remittances and overseas investment income, GNI can increase alongside the current decline in average annual population growth rate."

The country's GNI per capita rose to $4,230 in 2023, up from $3,950 in 2022. This is still within the lower-middle income range of $1,146 to $4,515, which was updated from the $1,136 to $4,465 level set last year.

To achieve upper-middle income status, GNI per capita has to hit $4,516 to $14,005, also now higher than the previous range of $4,466 to $13,845.

Economic managers are still optimistic about hitting the income status by the end of next year, stressing that a nominal growth of 10 percent should take the country there.

Nominal GDP growth, which is not adjusted for inflation, was reported at 8.8 percent as of March 2024, lower than the 9.28 percent recorded in December 2023.

Significant headwinds to growth will persist into next year, the PIDS said, with the key risks being a global economic slowdown, inflationary pressures, currency volatility, rapid climate change, political and governance issues, skills mismatches and other labor issues, and geopolitical tensions.

To address this, it recommended that households improve their financial resilience, private firms adapt to a VUCAD economy and the government work on promoting economic stability and resilience via effective policy directions.

Source: Manila Times