By Melissa Luz T. Lopez, Senior Reporter
THE peso recovered on Friday as market players reacted to a lower-than-expected inflation reading for September, which helped ease negative sentiment towards the local currency.
The local unit ended the week at P54.23 against the dollar, nine centavos stronger than the P54.32 close on Thursday. This is the peso’s strongest showing since Wednesday’s P54.18-per-dollar finish.
The peso opened at P54.30 versus the greenback, marking a mild rebound from the previous day’s rate. It briefly touched P54.33 as its intraday peak but also settled at P54.23 as its best performance until market close.
Sought for comment, two traders attributed the rebound of the peso to positive market response following a 6.7% inflation rate in September.
“The peso strengthened following the release of softer-than-expected September headline inflation reading today,” one trader said via e-mail.
The latest inflation print settled lower than market expectations of a 6.8% inflation for the month, but still climbed to a fresh nine-year high as it maintained an ascent since the year opened.
The rate settled higher than August’s 6.4% pace as well as the three percent tallied in September 2017, and fell within the 6.3-7.1% forecast range given by the Bangko Sentral ng Pilipinas Department of Economic Research.
Prices of food and non-alcoholic drinks saw the fastest increase at 9.7%, followed by an 8% increase in transport costs and a 4.6% pickup in housing and utility rates, the Philippine Statistics Authority reported. In particular, rice prices surged by 10.4% in September, faster than a 7.1% increase the previous month.
All other components of the consumer basket saw prices rise, except for education-related expenses which slid by 3.8% from a year ago.
Inflation averaged five percent for the first nine months, still below the latest central bank forecast of 5.2% but well beyond the 2-4% target for the entire 2018.
Following the reprieve from the inflation figure, the second trader pointed out that markets are now watching out for latest nonfarm payrolls data in the United States due Friday night.
Strong labor figures would strengthen the decision of the Fed to raise interest rates for a third time this year, while a disappointing turnout may halt such plans.
Dollars traded on Friday amounted to $592.5 million, lower than the $893.1 million which exchanged hands the previous trading day.
By Arra B. Francia, Reporter
LOCAL equities fell amid lackluster trading on Friday following the release of September inflation data which revealed a new nine-year high.
The benchmark Philippine Stock Exchange index (PSEi) traded flat for most of the day before finally registering losses of 0.21% or 15.14 points to 7,078.20 by closing bell. The broader all shares index also slipped 0.16% or 6.98 points to 4,363.36.
“The local market traded flat with very low value turnover as inflation turned out to be a non-event for September… Investors are now in a wait-and-see mode as they need another cue to make sure that CPI has started to peak,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.
The Philippine Statistics Authority reported on Friday morning that the consumer price index for September accelerated to 6.7%, faster than August’s 6.4%. The figure is slightly lower than the Bangko Sentral ng Pilipinas’ projection of 6.8%, but falls within its 6.3-7.1% target band.
This marks the fastest increase in consumer prices since February 2009’s 7.2%. The PSA attributed this to the heavily-weighted food and non-alcoholic beverages index which shot up to 9.7% last month.
Turnover further thinned to P4.08 billion after some 1.13 billion issues switched hands, compared to the previous session’s P4.31 billion. Foreign investors also continued to exit the market, with net sales widening to P885.37 million from Thursday’s P423.84 million.
“With an inflation figure that fell below expectations still failing to resuscitate the PSEi and halt the outflow of foreign funds, we should remain vigilant next week if the overall negative sentiment continues,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an email.
Regina Capital’s Mr. Limlingan added there were no catalysts that could have pushed up the market, as 10-year US Treasury yields likewise hovered at around 3.2%.
With bond yields rising, the Dow Jones Industrial Average plunged 0.75% or 200.91 points to 26,627.48. The S&P 500 index dropped 0.82% or 23.9 points to 2,901.61, and the Nasdaq Composite index lost 1.81% or 145.57 points to 7,879.51.
Most Asian indices also ended in negative territory, taking cues from US Treasury yields’ seven-year high. MSCI’s broadest index of Asia Pacific shares ex Japan slid 0.3%, Japan’s Nikkei 225 dropped 0.8%, while the Hang Seng index slowed 0.19%.
Back home, four sectoral indices declined. Holding firms gave up 0.66% or 46.36 points to 6,951.46, followed by industrial which slumped 0.53% or 55.66 points to 10,405.15. Mining and oil dipped 0.41% or 35.27 points to 8,652.67, while financials went down 0.33% or 5.18 points to 1,574.96.
On the other hand, property gained 0.64% or 22.25 points to 3,487.97, while services added 0.21% or 3.14 points to 1,503.83.
Decliners outpaced advancers, 129 to 66, while 40 names ended flat.
To the uninitiated, “cloud computing” may sound like the newest futuristic technology churned out by the geniuses at Silicon Valley. But the reality is that it’s been around for quite some time. And chances are, you’re using it right now. Cloud computing is the answer to the question: What if we got rid of servers and other clunky hardware, and operated their functions through the internet? Entire platforms have been built to facilitate these services, with users able to offload their computational heavy lifting on a pay-as-you-use basis. Sure, it’s a buzzword, much like fellow future-tech-headliners blockchain and IoT (or the Internet-of-Things). But cloud computing isn’t a budding experimental platform anymore. It’s the industry standard. As this new technology was first being introduced to the market, only startups saw the potential of cloud computing as a core component in their operations. Instead of sinking capital in building out their data infrastructure from the get-go, this new service allowed them to manage and store their data at scale. Now, more and more companies, of various sizes, have taken the plunge. Travel apps Airbnb and Expedia, game developer Supercell, streaming titan Netflix — industry leaders and young innovators alike are operating on the cloud. Jollibee’s backend runs on cloud computing. Even the Philippine government’s operations are heavily dependent on this technology. While this might sound like recent developments in the tech space, all these institutions and businesses are powered by a platform that’s over a decade old — Amazon Web Services.
Cloud computing: a growing industry in itself
Amazon Web Services (AWS) is the 12-year-old cloud computing subsidiary of US e-commerce giant Amazon. According to Vincent Quah, their APAC Regional Head for education, research, healthcare and non-profit organizations, cloud computing is a game-changer for both new and traditional organizations looking to streamline operations and boost productivity. At the Genome Institute of Singapore, their services saw a 20 percent productivity boost for the organization, and at only 10 percent of the traditional cost. “You can spend as little as $10 a month. As you build your business, that may go up. Your investment in infra is growing as much as your business is growing,” Quah told SparkUp. “It helps a lot of startups. All these startups are beneficiaries of the cloud computing model. As these people are tech inclined, they simply go at it.” Vincent Quah, APAC Regional Head of Amazon Web Services | Photo courtesy of AWS With so many businesses looking to cloud-power their operations, the demand for workers skilled in managing the adoption of this new tech has skyrocketed as well. As more and more sophisticated technologies hit the market, many have feared that rapid adoption would phase out jobs. And in some sectors, that’s absolutely the case. But Quah pointed out that the IT sector, in particular, is actually experiencing a massive shortage in talent needed to keep the tech development momentum going. Likewise, governments need to support the development of tech and tech adoption by adopting the right policies, he added. A study done by LinkedIn revealed that cloud computing is the most in-demand hard skill for 2018. This year’s edition of the World Economic Forum’s (WEF) “The Future of Jobs Report” listed cloud technology as one the main technological drivers affecting business growth until 2022. And the demand shows in the figures. Based on US data collated by Global Knowledge, companies are willing to pay an average of $121,292 a year for a worker with a cloud-computing IT certification.
Cloud education on the rise
While this is all well and good for a fresh grad with a computer science background, these trends might be alarming for pretty much anyone else. As we hurtle on through the advent of the Fourth Industrial Revolution, tech-driven jobs will only continue to grow in prominence in the coming years. So what’s a tech neophyte to do in this rapidly sophisticating world? Luckily, there are now a variety of options for kickstarting one’s tech-education. In addition to the countless courses available online (truly, there is an online course for everything), there are a growing number of workshops designed to teach people of various age groups at varying levels of proficiency the basics of cloud computing. This year’s 16th Youth Congress for Information Technology (Y4IT) saw over 2,000 secondary and tertiary-level students competing in a gamified hackathon, culminating a series of web application development sessions and boot camps. And AWS, as one of a number of major platforms helping drive this digital revolution, is doing its part to ensure more of today and tomorrow’s workers are equipped to respond to the needs of a cloud-powered future. As part of its workforce reskilling efforts, Singapore partnered with AWS to help lay the foundation for its ‘Smart Nation’ initiatives. Last May, the firm joined the National Trades Union Congress to educate Singaporean workers between the ages of 44 and 74 on the fundamentals of cloud computing and Internet-of-Things. In the Philippines, the firm has already partnered with local universities and colleges to continue its campaign in educating the youth on cloud computing. This year’s Siklab Pilipinas, AWS’s first large scale global event for tertiary students, included 2 days of hands-on training, a day-long, gamified hackathon, and a job fair . “We want students to invest in themselves, invest in developing skills.” said Quah.
Bridging the digital divide
“This industry is young and it’s developing, but it’s developing very, very fast,” Quah said. “We feel that it’s our mission to educate the people about the cloud.” As one of the pioneers pushing the development of cloud computing globally, Quah said AWS has taken on the role of not only evangelist, but scaffolding, continuing to support its growth. “I think all you need is an attitude that requires you to be curious and to want to learn,” Quah said, arguing that no one is predisposed towards being good at computing. Quah, himself, is a microbiologist by training. “You can actually learn new things. So having the right attitude plays a very critical role. Anyone can actually do it… If you put your heart and mind to it, you can do it.” “This is a beginning of a journey” he said. “I don’t think you will see the end of what we’re doing here. This is going to continue.”
By Anna Gabriela A. Mogato
The country’s banking system will keep steady despite concerns over a possibly overheating economy, a new report claimed.
In its Industry Trend Analysis released on Friday, Fitch Solutions Macro Research said it sees “little downside risks to financial stability” in the coming quarters.
This is amid faster inflation rates reported today by the Philippine Statistics Authority, clocking in at 6.7%. This is up from 6.4% in August.
“The capital and liquidity buffers of the banking sector remain adequate and well-above regulatory and industry norms,” Fitch Solutions said.
Likewise, the rising non-performing loans will continue to be manageable due to a supportive operating environment.
Fitch Solutions also noted that it still sees the country’s gross domestic product growth to stay above 6% as credit “continues to be directed towards the productive sectors of the economy.”
By Elijah Joseph C. Tubayan Reporter
THE WORLD BANK has downgraded its 2018 economic growth forecast for the Philippines — making it the third multilateral lender to do so since last week due to heightened external uncertainties and surging inflation locally — but overall prospects should remain “strong” enough for it to maintain the country’s projections for 2019-2020.
In its bi-annual Philippines Economic Update published yesterday, the Washington-based multilateral lender said it expects Philippine gross domestic product (GDP) to grow 6.5% this year, down from a 6.7% April projection and 2017’s actual 6.7%. At the same time, the World Bank kept its 2019 and 2020 forecasts at 6.7% and 6.6%, respectively.
“The Philippines’ medium-term growth outlook remains strong, supported by an expected rise in public investment spending and a robust private demand,” the report read, noting that consumption is supported by a “steady” labor market, continuous remittance inflows and “inflation easing,” following Palace administrative orders to boost food supply and speed up distribution.
World Bank Senior Economist Rong Qian, in a media briefing on Thursday at the bank’s Philippine office in Taguig City, said that the latest projection took into account the slower-than-expected six-percent growth in the second quarter that compared to 6.6% in the same period last year and last January-March, due to weak exports and weak farm performance.
The same report shows the World Bank expects growth to accelerate this semester and into next year despite high inflation, as election-related spending kicks in. “GDP growth is expected to accelerate in the second half of 2018 and in early 2019, boosted by upcoming senatorial and local preelection spending and continued strong public investment growth. This is consistent with the government’s plan to speed up the implementation of its infrastructure program. Investment spending is expected to accelerate import growth, while export growth is expected to remain moderate given the slowdown in global trade,” it said.
The World Bank’s estimates are below the government’s 7-8% annual target until 2022.
The World Bank’ forecasts match the International Monetary Fund’s 6.5% and 6.7% for 2018 and 2019, respectively. The Asian Development Bank has a slightly lower estimate of 6.4% for this year, but has the same 2019 projection of 6.7%.
The Philippines’ 6.5%, 6.7% and 6.6% updated forecasts for 2018, 2019 and 2020 are outdone or matched for the same years only by Vietnam (6.8%, 6.6% and 6.5%, respectively) and the less developed Association of Southeast Asian Nations (ASEAN) members Cambodia, Laos and Myanmar. “Developing ASEAN” — which excludes Singapore and Brunei — is expected to grow by 5.4% this year and 5.3% in the succeeding two years, while “developing” East Asia and the Pacific — which includes China — is projected to expand by 6.3% this year and by six percent in each of the succeeding two years. China itself will grow by 6.5% this year and 6.2% in 2019 and in 2020.
Other international institutions have yet to update their forecasts. The United Nations Economic and Social Commission for Asia and the Pacific as of May expected the Philippines to grow 6.8% and 6.9% this year and in 2019, respectively, while the Organization for Economic Cooperation and Development as of July projected 6.7% for both years.
Ms. Qian also noted that the “inflation is high but private consumption remains robust. That shows how the Philippines is pretty resilient to inflation.”
For Birgit Hansl, World Bank Lead Economist for Brunei, Malaysia, Philippines and Thailand, “high inflation suppresses consumption growth, but what we see in the second half you will have pre-election spending, so that will balance it out.”
Headline inflation averaged 4.8% in the first eight months, well above the 2-4% target band for 2018 after the Augusts’s 6.4% that was the fastest in about nine years.
Ms. Qian cited key downside risks to the outlook as faster policy rates hikes by the Federal Reserve and worsening trade tensions between United and China.
Such developments will trigger bigger capital outflows, in turn widening the country’s current account deficit and putting more pressure on the peso — already among the worst-performing emerging market currencies — to weaken further.
Although Ms. Qian said that the Philippines has enough buffers, the government should “monitor it (current account deficit) closely to prevent it from widening too much and too fast.”
“Philippines’ macro fundamentals are strong given the country’s flexible exchange rate regime, large international reserves, low public debt, low external debt and robust inflow of remittances. In addition, the Philippines is relatively resilient to capital flows as the country has low exposure to portfolio flows from foreign investors,” Ms. Qian said.
“Yet, given the increased global uncertainties, to mitigate downside risks, it would be prudent to monitor the evolution of the current account deficit.”
At the same time, she noted that the current account shortfall “could be considered a good deficit because it finances capital goods imports to help close the country’s long-due infrastructure gap, and that currently FDI (foreign direct investment) is financing the current account deficit.”
By Susan Claire Agbayani
Maybe it is best that people learn about road safety at a young age — perhaps as early as grade school.
Senator Joseph Victor “JV” Ejercito suggested making it part of the grade school subject Good Manners and Right Conduct last Thursday during a press conference on road safety organized by Vera Files in Malate, Manila. As is, there is a bill working its way through congress which aims to integrate road safety education as early as daycare and preschool.
Considering that the most frequent victims of road crashes, according to the Philippine Statistics Authority (PSA), are young adults between 20 and 24 years of age, followed by those between 25 and 29, it is probably a good idea for future drivers to learn about road safety long before they get a chance to get behind the wheel of a car. STATS FROM WHO AND PSA
The Global Status Report on Road Safety states that road traffic injuries are a global health and development problem. In her preface to the report, Dr. Margaret Chan, who was World Health Organization (WHO) Director General until 2017, wrote, “More than 1.2 million people die in the world’s roads every year, and as many as 50 million others are injured.” Interestingly, and sadly, 90% of those deaths happen in low-income and middle-income countries, the Philippines included.
“Globally, almost half of those who die in road traffic crashes are pedestrians, cyclists, and users of motorized two-wheelers,” who are collectively referred to as “vulnerable road users,” says the WHO report.
In nine years, between 2006 and 2015, there was a huge jump in the number of people who died in road crashes in the Philippines — from 6,869 to 10,012 — a 45.76% increase. And the number has been steadily growing through the years. DRIVER EDUCATION
Mr. Ejercito mentioned the need for motorcycle manufacturers to provide driver education, saying that 70% of vehicles that figure in road crashes are motorcycles.
A few months ago, he filed Senate Bill No. 1822, or the Motorcycle Safety Training Act of 2018, which requires riders to undergo mandatory safety riding training, noting that motorcycle riders have been the primary victims in road crashes in Metro Manila since 2010. The Honda Safety Driving Center includes a training circuit “that simulates traffic network and actual road conditions.”
“As part of the corporate social responsibility (of motorcycle manufacturers) — before the unit is turned over to the buyer he should undergo some sort of education. Definitely, education would play a crucial role in reducing accidents. It’s very important,” Cesar Sarmiento, the congressman of the lone district of Catanduanes, told BusinessWorld after a meeting on road safety of the Committee on Transportation — which he chairs — in Congress last month.
In the Philippines, Honda has a 2.4-hectare facility along SLEX called the Honda Safety Driving Center (HSDC) that includes a training circuit “that simulates traffic network and actual road conditions.”
“We incorporated road safety education as part of the basic operations of our dealership, in our business of selling motorcycles. Many of our dealers are involved in our road safety campaigns,” said Jun Lomibao, Division Chief of Honda’s safety driving promotions, during an interview at HSDC. NOT A ‘SILVER BULLET’
“Driver education is important, but it’s not a silver bullet,” said Dr. John Juliard Go, Program Officer of World Health Organization (WHO) Philippines, after the road safety forum. “By itself, it will not work.”
Mr. Sarmiento agrees, saying, “Many factors would lead to the reduction of road accidents. No. 1 is education, plus discipline, and strict enforcement.” He added that these factors should complement one another as knowledge of the necessary information would be rendered useless if enforcement governing road safety laws is lax.
“Road safety education should be comprehensive in its scope; and has to have elements of interventions with other factors,” said Dr. Go.
“Driver education can only work if you implement (it) together with other interventions that target road users: make them more aware and comply with our road traffic regulations on seat belts, helmet, speeding, speed limiters and drink driving, right?”
WHO-Philippines’ Technical Officer on Road Safety and Communicable Diseases Dr. Ronald Quintana agrees. In an interview at the House of Representatives after the congressional hearing on transportation, he said, “Providing education for motorcycle drivers is important — particularly on road safety — but it doesn’t necessarily lead to behavior change. Knowledge gained should be practiced.” The newly introduced National Road Safety Awareness Act aims to integrate road safety education in the school curricula in all levels including barangay day care, preschool, non-formal, technical, vocational, indigenous learning, and out-of-school youth courses.
Among the other crucial factors Dr. Quintana mentioned are:
• Engineering/road infrastructure (“better roads and roadways”) as one of the means of prevention of road crashes;
• strict implementation and enforcement of road safety laws;
• interventions related to speed, which is one of the behavioral risk factors;
• safer vehicles, which should have standards and regulations; and,
• interventions to protect road users: the pedestrians, drivers, and passengers.
Many road safety laws have been passed in the last few years, including the Motorcycle Helmet Law (RA 10054), the Anti-Drunk and Drugged Driving Act (RA 10586), the Road Speed Limiter law (RA 10916), and the Extension of Validity of Driver’s License (RA 10930). Also, the Seat belt Law (RA 8750), the Anti-Distracted Driving Law (RA 10913), and Children’s Safety on Motorcycles Act (RA 10666).
Road safety advocates in the Senate are now pushing for Child Safety in Motor Vehicles Act of 2017 (SB 1447), the Anti-Overloading Act (SB 1446), as well as the Creation of a National Transportation Safety Board (SB 1375), among others.
And coming back to the children, over at the House of Representatives, Mr. Sarmiento introduced House Bill No. 7915 or the National Road Safety Awareness Act, which promotes “national road safety awareness through road safety education, road safety events and activities and multi-stakeholder consultation and collaboration…”
Section 3 of the bill enjoins the Department of Education, the Commission on Higher Education, the Technical Education and Skill Development Authority — in coordination with the Department of Transportation, the Land Transportation Office and other concerned agencies — to “integrate road safety education in the school curricula at all levels, whether public or private, including the barangay day care, preschool, non-formal, technical, vocational, indigenous learning and out-of-school youth courses and programs.”
This story was produced under the Bloomberg Initiative Global Road Safety Media Fellowship implemented by the World Health Organization, Department of Transportation and Vera Files.
By Melissa Luz T. Lopez Senior Reporter
THE PHILIPPINES has ample policy space to respond to persistent threats of surging inflation, a weaker peso and a growing trade gap, a senior central bank official said, describing such concerns as “growing pains” for the economy.
Bangko Sentral ng Pilipinas (BSP) Assistant Governor Restituto C. Cruz said the Philippines remains well-positioned to sustain robust economic growth, even in the face of economic woes weighing down market sentiment.
Mr. Cruz filled in for BSP Governor Nestor A. Espenilla, Jr. at the event as the latter extended his medical leave for two weeks.
The senior central bank official said the economy will sustain above-six percent growth with “strong” structural dollar inflows, even in the face of a widening current account deficit. Remittances from overseas Filipino workers business process outsourcing revenues as well as tourism receipts will keep flowing in, adding to the economic boost of last semester’s 42.4% surge in foreign direct investment net inflows.
The current account posted a $3.1 billion deficit as of end-June, compared to the $133-million gap in 2017’s first half and already matching the BSP’s full-year estimate for 2018.
However, he maintained that the deficit is “largely reflective of the economy’s strength,” as a surge in capital imports will eventually translate to improved productivity.
“Over time, as investment-led economic activities result in the expansion of the economy’s potential capacity and support the needed infrastructure development, there can be subsequent rise in goods exports, eventually alleviating the current account deficit,” Mr. Cruz said in a speech during The Asset 13th Philippine Forum on Wednesday.
The wider trade gap has also added to a risk-off attitude taken by market players towards the peso, which has depreciated by roughly eight percent versus the dollar year-to-date.
Unrelenting inflation has also been flagged as a major concern, although the central bank official pointed out that such price shocks continue to be supply-driven.
“These three major developments can be seen as ‘growing pains’ or the adjustments that the domestic economy has to endure as it moves to a higher plane of growth,” Mr. Cruz said.
“Should potential risks emanating from these outcomes materialize, the Philippines has ample policy space to respond.”
Prices of widely used goods rose by 6.4% in August, marking a nine-year high amid scarce supply of rice, vegetables, meat and fish, as well as rising global oil prices. September inflation is expected to clock in even higher at 6.8%, based on estimates of the BSP and BusinessWorld’s poll of economists last year.
In response, the BSP raised rates by another 50 basis points (bp) last week amid signs that inflation could log a fresh multiyear high in September. The central bank has hiked benchmark yields by a cumulative 150 bp since May to douse inflation expectations and show a strong hand to commit to bringing the pace of price increases back to the 2-4% target range.
The latest rate hike is expected to lend support to the peso, which has been trading weaker than P54 to $1 in recent weeks.
By Michelle Anne P. Soliman Reporter
BORN to a poor family and struggled to find success as an actor, Hans Christian Andersen ventured into writing fairy tales early in the 1800s. As a storyteller, Andersen presented deep ideas and feelings with a style that appealed to a child’s perspective.
In 1886, Jose Rizal completed translating five of Andersen’s fairy tales (from German translation) and sent the copies to the Philippines as a gift to his nephews and nieces so that they would know what the children in Europe read.
Children’s book specialist Katrina Gutierrez recalled in an essay how she came across the book of Rizal’s translations during a visit to the Hans Christian Andersen Museum in Odense, Denmark: “The Museum at the heart of the city boasts the largest collection of Andersen stories in translation… The books are grouped by language, and the labels on the shelves alert museum goers to the start of a collection from another part of the world… One of these languages was Tagalog… I pressed my face closer to the glass, and this time I was truly surprised. On the spine in faded but clear letters was the name: Jose Rizal.”
Today one does not have to go all the way to Denmark to read Rizal’s fairy tales thanks to The Embassy of Denmark and Anvil Publishing which have released Hans Christian Andersen and Jose Rizal: From Denmark to the Philippines, a compilation of Andersen’s fairy tales translated by Rizal into Tagalog.
The book contains Rizal’s Tagalog translations of five Andersen fairy tales: “The Fir Tree” (“Ang Punong Pino”), “Thumbelina” (“Si Gahinlalaki”), “The Ugly Duckling” (“Ang Pangit na Sisiw na Pato”), “The Angel” (“Ang Sugo”), and “The Little Matchgirl” (“Ang Batang Babaeng May Dalang Sakafuego”).
Ambassador of Denmark to the Philippines Jan Top Christensen said that the fairy tales remain relevant today as they depict the human condition. “Hans Christian Andersen has become world famous mainly because of his fairy tales. They appeal to a very large public not only children because of the direct narrative, but also because of the many layers in the stories that in many ways talk about the human condition,” Mr. Christensen told BusinessWorld shortly after the launch.
Historian and professor Ambeth R. Ocampo said that children’s stories affect readers differently when read as adults. “These are simple Andersen [fairy]tales. It does not just have one meaning but I guess it lives on in people as they grow older. The book is not just about translating the text but transmitting a part of not just Andersen but also Rizal,” he said during the launch.
The book also contains essays by Ms. Gutierrez, Mr. Ocampo, and Danish scholars Ejnar Stig Askgaard and Johs. Norregaard Frandsen, and an introduction about the historical links between Denmark and the Philippines by Mr. Christensen. Hans Christian Andersen and Jose Rizal: From Denmark to the Philippines is available online at www.anvilpublishing.com, and at National Bookstore and Powerbooks branches beginning Oct. 5 for P695 (soft cover) and P1,500 (hard cover).
ON TRACK for their first annual drop since 2015, emerging Asia’s sovereign bonds look set to call time on a two-year binge fueled by a tide of cheap money.
Investors start the fourth quarter on the defensive, thanks to soaring oil prices, a raging US-China trade war and a stronger dollar.
Indian and Indonesian debt will be the most vulnerable as risk sentiment remains fragile, even as policy makers step up efforts to contain the weakness, according to fund managers surveyed by Bloomberg.
South Korean and Thai bonds are seen among the safest bets, with the economies’ current-account surpluses compensating for their relatively low yields.
“There is room for some more correction in emerging Asian government bond markets,” said Roland Mieth, Singapore-based emerging markets portfolio manager at Pacific Investment Management Co. (PIMCo). “The main driver for this is global factors and the China outlook.”
Thomas Wu, head of Asia fixed income for discretionary portfolio management at Pictet Wealth Management in Hong Kong, agrees. “Until the US-China trade situation is resolved, we’re not really constructive on EM Asian FX,” he said. “For sovereign bonds, we are equally defensive and we’re not seeing an improvement or a turnaround for the time being.”
From a surge in crude oil to a stronger dollar, trade tensions to deficit fears, geopolitical risks to footloose global capital flows, investors face a busy end to the year trying to pick the region’s winners and losers. With the Bloomberg Barclays EM Local Currency Government Asia Index already down 3.6% this year, they may face a further headache after Treasury yields rallied to a seven-year high Wednesday. PHILIPPINES
Philippine bonds were the region’s worst performer last quarter, with a loss of almost five percent.
The peso slumped to the lowest since 2005 last month amid worries about the nation’s current-account deficit and a perception that the central bank was behind the curve in tackling inflation.
The negative sentiment may ease after Bangko Sentral ng Pilipinas raised its benchmark interest rate by half a percentage point for a second consecutive meeting in September. Policy makers have also pledged to do what’s necessary.
For AllianceBernstein — which has been underweight Philippine bonds for the past five years — peso yields may be approaching attractive levels.
“Philippine bond yields are around six percent and the BSP has become more aggressive with tightening,” said Gibson at AllianceBernstein.
“Philippine bonds will start to look attractive for the first time in many years as the yield you can earn on the Philippine peso is sufficient for the volatility you may incur. INDIA
Indian sovereign bonds are down 12% so far in 2018, erasing last year’s gain as the rupee set a succession of record lows.
Once favored for their high yields, rupee notes have lost their shine as a rally in crude prices threatens to inflate India’s oil import bill and worsen a current-account shortfall which stands at a five-year high. Policy makers are set to raise interest rates for a third time this year on Friday, adding to a recent flurry of measures aimed at shoring up the currency.
As oil marches toward the $100 mark for the first time since 2014, analysts warn costlier crude will further stoke inflation and hurt sentiment toward a market that’s already reeling from a rare default at a local lender.
“If the oil price continues to go up, that will continue to weigh on the current-account balance and add to further weakness,” said Alexandre Bouchardy, head of Asset Management Singapore at Credit Suisse Asset Management. “It’s hard to say how much more interest rates have to rise as it depends on where oil prices go, but probably anything between 50-200 basis points from current levels.” INDONESIA
With yields of around eight percent — the highest in Asia’s major markets — rupiah sovereign bonds were once a magnet for global funds.
Indonesia is now regarded as among the most susceptible to outflows due to the substantial foreign ownership of its bonds.
Global funds hold more than a third of Indonesian government debt, compared with just over a quarter of Malaysian securities and under a fifth of Thai bonds.
Rupiah bonds are also suffering from the same ailment that’s plaguing their Indian peers: a widening current-account shortfall, which swelled to a four-year high in the second quarter.
The rupiah sank to the lowest in two decades this week, even after policy makers delivered five interest-rate hikes in the past four months and a raft of measures to try to stabilize onshore markets.
“About 20-25% of Indonesia’s government borrowings are in US dollars so Indonesia, more than any other Asian government, is subject to changes in US rates, the U.S. dollar and external conditions,” said Brad Gibson, head of Asia-Pacific fixed-income portfolio management at AllianceBernstein LP in Hong Kong.
“Once the external environment improves, then rates can actually rally quite strongly in Indonesia as there is no domestic reason for the central bank to continue to hike.” MALAYSIA
As the only net exporter of energy among Asia’s major EM economies, Malaysia stands to benefit from the rise in crude prices.
Oil contributes just under a fifth of revenue, and higher prices will provide a buffer for the nation’s bonds.
Inflation has cooled after the authorities scrapped a consumption tax in June while concerns about the government’s debt levels have eased.
The ringgit lost about two percent this year, compared with declines of 10% for the rupiah and almost 13% for India’s rupee.
“Malaysian government bonds have been quite stable and we are slightly positive. They have high real interest rates and inflation is contained,” said Bouchardy at Credit Suisse Asset Management.
“The only potential thing to monitor is the proportion of the foreign ownership of the local-currency bond market. It’s still high.” THAILAND
As funds soured on risk assets, Thai bonds offered a safe — if somewhat unexciting — proposition. A sizable current-account surplus and a relatively low level of foreign ownership of its bonds mean that Thailand has been less exposed to the volatility buffeting regional markets.
Thai bonds attracted more than $7 billion this year, after drawing $10.6 billion during the whole of 2017. The baht has held steady against the dollar this year, and is the region’s best performer. Still, investors seeking refuge in Thai debt have to contend with yields that are below that of US Treasuries.
“Thailand is a very low-yielding market,” said Mr. Bouchardy at Credit Suisse Asset Management.
“There are no inflation pressures, current account is in surplus, interest rates are low but it is hard to envision high returns for this market.” SOUTH KOREA
South Korean bonds have drawn almost $37 billion of inflows this year, second only to China among eight regional markets tracked by Bloomberg.
Funds are staying put in Asia’s fourth-largest economy, as a decent but unspectacular pace of growth means the central bank is unlikely to embark on an aggressive tightening cycle.
Investors are also deriving comfort from the nation’s current account surplus which rose to $8.8 billion in July, the widest in 10 months, and a stockpile of foreign-exchange reserves that are at a record high.
“If you look at countries with current-account surpluses and larger onshore markets, you will expect those countries to be more resilient and this includes China, South Korea and Singapore,” said PIMCo’s Mr. Mieth.
“But if US Treasury yields move higher, no market in the region will be able to rally.” — Bloomberg
PLDT, Inc. announced on Thursday it has signed an agreement to sell separately $175 million worth of shares in its digital innovations unit Voyager Innovations, Inc. to a group of foreign investors led by investment firm Kohlberg Kravis Roberts & Co. (KKR) and Chinese tech company Tencent Holdings Ltd.
“Upon the closing of the transaction, which is expected within the fourth quarter of 2018, PLDT will remain as the majority shareholder of Voyager Innovations. The agreements also contain provisions for Voyager Innovations to issue additional shares to other investors which, if this were to occur, would reduce PLDT’s ownership to less than 50% while still remaining as the largest shareholder,” the company said in a statement.
Voyager is the subsidiary of PLDT handling mobile wallet PayMaya and remittance network Smart Padala. It also manages the company’s online loaning platform Lendr, and free mobile browsing app Freenet.
Tencent is the Chinese firm behind messaging mobile application WeChat and KKR is an investment company that also supported Indonesian ride-hailing company Go-Jek and Chinese finance management platform Suishou Technology.
PLDT Chairman, President and CEO Manuel V. Pangilinan first revealed details of the Voyager deal in August, saying then the sale of majority stake would help the company recoup its losses from the unit, which widened to P1.3 billion in the first half of 2018 from P300 million in the same period last year.
“It’s likely to produce a significant gain to the accounts of PLDT. I think if we can expedite the approval from the (Philippine Competition Commission), it is likely that we can see the gain some time in the fourth quarter of 2018,” Mr. Pangilinan said then.
He said in Thursday’s announcement, “Having global powerhouses such as KKR and Tencent as investors in Voyager Innovations demonstrates not only their confidence in the company’s ability to execute its vision, but also their confidence in the Philippine technology industry as a whole.”
“The foregoing investment in Voyager Innovations is not subject to the compulsory merger notification regime under the Philippine Competition Act and its Implementing Rules and Regulations. In addition, the Bangko Sentral ng Pilipinas, the Philippines’ central bank, confirmed that it interposes no objection to the investment,” it added.
PLDT has said since late last year its plan for Voyager was to find foreign partners that would help the unit expand its coverage, at least within the ASEAN market. It targets to have 30 million users on its platforms by 2020.
The original plan was for Voyager to seal a deal with Tencent within the first half of 2018, but Mr. Pangilinan said in May this was not pushing through as they didn’t initially get feedback from the Chinese tech giant.
PayMaya’s closest competition, Globe Telecom, Inc.’s GCash, took a minority investment from Chinese billionaire Jack Ma’s Ant Financial Services Group last year. Globe is to receive from Ant Financial, which owns China’s largest online payment service Alipay, its “know-how in using technology to provide equal access to financial services.”
Mr. Pangilinan said PLDT has invested some P9 billion to P10 billion in Voyager since 2013, and the entry of foreign investors is expected to generate significant development to the innovations unit.
“Since this will involve as well a significant amount to be injected into Voyager, it could fund the operations of Voyager on expanding in the next three to four years,” he said in August.
PLDT posted a 29% decline to its attributable net income at P11.76 billion in the first half, primarily due to lower net income from its wireless and other businesses.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez
TWITTER, INC. announced on Thursday it is making its in-stream video advertisements available globally and has forged partnerships with local companies ABS-CBN Corp. and GMA Network, Inc.
In a statement, the social media platform said: “Previously, in-stream video ads were limited to the markets in which publishers are based, but in many cases, publishers have a global following. With this capacity, publishers can now monetize their organic following outside of their home country.”
In-stream videos are advertisements that are played at the beginning of a video content. According to its website, Twitter said what it does is pair an ad with a video content it finds relevant to the product.
In his prepared presentation for DigiCon 2018, which was presented to journalists on Wednesday, Twitter Managing Director for Southeast Asia Arvinder Gujral said the social media site is an ideal platform for advertisers as it allows its users to customize their feeds according to their interests.
“This is not a social network. This is the largest social interest network. Big difference. Social network is for relationships. Social interest network is banked on your passions and things you find interesting,” he said.
He noted users watch videos on Twitter 3.5 times longer than in other platforms, citing results from a neuroscience study the company commissioned a few months ago.
“People watch videos on Twitter far longer than in any other platform. Why? In other platforms they get interrupted. You are there to see your friends and families (and the content they share). On Twitter, (videos) come contextually on a timeline you have created,” he said.
He added, “If my timeline is all about gadgets… and a new smartphone ad launch comes in, chances are that’s going to be watched way higher than if my timeline was full of (varied content).”
Mr. Gujral also said Twitter users in the Philippines are a very interesting market, as the median age of users are within 16 to 24 years old, while 42% have a bachelor’s degree or higher.
“It’s largely the millennials that are coming to Twitter, and this is an audience that is very difficult to get for marketers and agencies. And this is the platform where they are very receptive,” he said.
With the announcement of its partnership with ABS-CBN and GMA, Mr. Gujral noted Twitter users in the Philippines are a very television-led market.
“If you look at the conversations, there are many TV-led conversations on the platform. The top 10 hashtags, those are TV-led conversations happening. Which is slightly unique to the Philippines. You don’t see that in every market,” he said.
He added with this insight, Twitter could be seen as an effective supplement to TV shows and events.
Twitter said its partnership with ABS-CBN will involve mostly its entertainment and sports programs, while with GMA it will be for its news content and some TV series. — Denise A. Valdez
NINETEEN Filipino films have made their way to South Korea’s 23rd Busan International Film Festival (BIFF) as Philippines is the festival’s Country of Focus, marking 100 years of Philippine Cinema.
The BIFF runs from Oct. 4 to 13.
“We cannot stress how great of an honor it is to be selected as the Country of Focus in Busan in time for our centennial… being the Country of Focus mean greater exposure for our filmmakers and more platforms for us to showcase this work,” Mary Liza Dino, chairperson and CEO of the Film Development Council of the Philippines (FDCP) said in a press release.
Of the 19 films, 10 are featured in the festival’s special retrospective program. Entitled “Cinema as a Response to the Nation” the lineup includes A Portrait of the Artist as Filipino (1965) by Lamberto V. Avellana, Ganito Kami Noon, Paano Kayo Ngayon? (1976) by Eddie Romero, Tatlong Taong Walang Diyos by Mario O’Hara (1976), Ang Panday (1980) by Fernando Poe, Jr., Cain at Abel (1982) by Lino Brocka, Moral (1982) by Marilou Diaz-Abaya, Himala by Ishmael Bernal (1982), Bayaning 3rd World (2000) by Mike de Leon, Dekada ’70 (2002) by Chito S. Roño, and Ang Damgo ni Eleuteria (2010) by Remton Siega Zuasola.
“[When choosing the films] we asked the question, ‘which films broke boundaries in the period it was created?’ It was, at the very core, how we chose our films,” Tito G. Valiente, an educator and a member of the Manunuri ng Pelikulang Pilipino (MPP), told the media during a press conference on Oct. 2 at Max’s Restaurant in Quezon City.
“This was hard because we are condensing the 100 years of Philippine cinema in 10 films,” said Teddy Co, director and a commissioner at the National Commission for Culture and the Arts (NCCA).
Mr. Co bemoaned the fact that much of the country’s cinematic history was lost during the Second World War and to poor storage, which limited their scope to post-war films, this even though the Philippines has produced more than 10,000 films since the release of the first Filipino full-length film, Dalagang Bukid by Jose Nepomuceno in 1919.
The retrospective will be accompanied by a talk titled “Spotlight: Philippines, Cinema Centennial Talks” featuring actors Christopher de Leon (who starred in Cain at Abel, Ganito Kami Noon, Paano Kayo Ngayon?, Dekada ’70, and Tatlong Taong Walang Diyos), Joel Torre (Bayaning 3rd World), Sandy Andolong (Moral), and Piolo Pascual (Dekada ’70).
Aside from the 10 films presented in the retrospective, nine films are included in the festival’s A Window on Asian Cinema Section. These are Citizen Jake (2018) by Mike de Leon, Alpha: The Right to Kill (2018) by Brillante Ma. Mendoza, The Eternity Between Seconds (2018) by Alec Figuracion, Gusto Kita with all My Hypothalamus (2018) by Dwein Baltazar, Lakbayan (2018) by Lav Diaz, Brillante Ma. Mendoza and Kidlat Tahimik, and Signal Rock (2018) by Chito S. Rono. Signal Rock is also the country’s official entry to the 91st Academy Awards Foreign Language Film category.
Two short films also made their way to the festival’s Wide Angle Short Film Showcase — Last Order (2018) by Joji Alonso and Manila is Full of Men Named Boy (2018) by Stephen Lee — while the Wide Angle Documentary Showcase will feature Land from God (2018) by Stephen Lee.
Aside from the films, the BIFF is launching a book entitled Centennial Anniversary of the Philippine Cinema on Oct. 5 at the Busan Cinema Center. Educator and film scholar Nick de Ocampo, alongside Mr. Valiente and Mr. Co, wrote individual essays for the publication.
The FDCP will also be holding an exhibit curated by Mr. de Ocampo on the history of Philippine cinema titled Cinema Un/Bound: Archipelagic Cinema of the Philippines which will be on view at the Busan Cinema Center from Oct. 6 to 11. — Zsarlene B. Chua
