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AgriNurture forges deal to buy 2 million MT of rice from Vietnam

AGRINURTURE, Inc (ANI) announced on Monday that it had signed a $1-billion exclusive deal with Vietnam Southern Food Corp. (Vinafood II) to import 2 million metric tons (MT) of rice to the Philippines starting this year.
Vinafood II is a state-owned corporation designated by the government of Vietnam to export rice and help achieve food security in Southeast Asia.
The deal was granted an original proponent status last month. Under the joint venture agreement, it was proposed that the “consortium shall finance the supply of NFA rice with no cash out on the part of government.”
Both parties will jointly determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports, while the NFA (National Food Authority) will determine the type of commodity to be imported, its specifications and quantity.
“As accepted by NFA, the ANI consortium will import as much as 500,000 metric tons of rice, equivalent to two weeks national inventory of subsidized NFA rice per quarter,” ANI said in a statement.
“Since NFA will not release a single peso for said purchases, the agency can use its budget to buy more palay from local farmers or import more rice as needed,” it added.
ANI has been engaged in rice importation and trading in the first quarter of 2015.
The NFA has been a subject of criticisms recently for failing to procure rice from local farmers, leading to a diminished supply of NFA rice in the market and the increased price of commercial rice.
According to NFA, instead of buying palay, it used its funds to pay maturing loans, which lawmakers said was a technical malversation of funds. — Reicelene Joy N. Ignacio

Predator slays competition at N.America box office


LOS ANGELES — The Predator — the latest installment in the long-running sci-fi action series — chewed up its rivals to debut atop the North American box office this weekend, industry data showed Sunday.
But the Fox reboot, which cost $88 million to make, will look to earn back some money in international markets, as its estimated $24 million haul did not meet expectations.
The movie, which comes more than 30 years after the franchise’s original film starring Arnold Schwarzenegger, courted controversy before its release when the studio cut a scene featuring an actor who was a registered sex offender.
Star Olivia Munn had requested the change, saying she was unaware of the actor’s past when the scene was filmed. Director Shane Black initially said he hired the actor because he was a friend, but later issued a strong apology.
Dropping to second place was last week’s top draw, horror movie The Nun — the latest fright fest in the popular Conjuring series. It earned an estimated $18.2 million in its second week, box office tracker Exhibitor Relations said.
Nun stars Taissa Farmiga — whose sister Vera headlined two Conjuring films — in a story about a young nun, an exorcist and a guide stumbling onto a dark secret deep in Dracula country: the Romania of 1952 — Transylvania, no less.
Opening in the third spot was A Simple Favor, a tale about a mommy blogger (Anna Kendrick) investigating the disappearance of her friend (Blake Lively). The Lionsgate film raked in $16.1 million on the back of positive reviews.
Matthew McConaughey’s new film White Boy Rick opened in fourth place with $8.8 million. The movie, based on a true story, stars the Oscar winner as the father of a teenage boy who became an informant for the FBI in the 1980s.
Glitzy rom-com Crazy Rich Asians, another Warner Bros. product along with The Nun, fell to fifth place. The film, with a nearly all-Asian cast led by Henry Golding and Constance Wu, took in $8.7 million, building on a crazy-good run.
Its North American take stands at nearly $150 million, with another $28 million earned overseas.
Rounding out this weekend’s top 10 were: Peppermint ($6.1 million); The Meg ($3.8 million); Searching ($3.2 million); Unbroken: Path to Redemption ($2.4 million); and, Mission Impossible — Fallout ($2.3 million). — AFP

Ayala hops on co-living space trend

AYALA LAND Inc. (ALI) is entering the co-living space business, as it opened The Flats Amorsolo in Makati City.
In a statement, ALI said the 15-storey building, located along Amorsolo Street, features co-living spaces catering to young urban professionals who are tired of their long commute to their offices in Makati.
“Ayala Land has always been responsive to the needs of young urban professionals who aspire for a perfectly balanced life. Co-living is an urban lifestyle concept that offers an affordable alternative to lengthy commutes and paying expensive transportation fares. We’re glad to announce that The Flats Amorsolo is now open,” Shiella Aguilar, ALI Makati project development head, was quoted as saying.
The Flats Amorsolo boasts of a central location in the business district, as it is within a five-minute walk to Ayala Avenue and near the Dela Rosa Walkway.
Co-living units are available for a six-month minimum lease term. Each unit can host a maximum of four occupants. There are also units designed for three or two occupants.
ALI said the units are designed for optimal space usage, with built-in beds, built-in cabinets, individual desk spaces, air-conditioning, a kitchenette, and an en suite toilet and bath with shower. Occupants are given an electronic key card.
The building also has a lobby and reception area with basic service shops. Parking spaces are also available for lease.
ALI said it is planning to open more co-living spaces in other areas in Makati and Bonifacio Global City to meet the growing demand. — CRAG

EDC allowed to extend tender offer period

ENERGY Development Corp. (EDC) has secured approval from the securities regulator on its request for exemptive relief from compliance with the 60-business day rule to complete its tender offer.
In a disclosure to the stock exchange, the Lopez-led renewable energy company said the approval from the Securities and Exchange Commission (SEC) allows the company to extend the offer period for 20 more business days from Oct. 22, 2018, “if an extension is necessary or desirable” to complete the tender offer.
EDC quoted the SEC’s letter as saying that the commission viewed “that under this situation extending the tender offer period is for the benefit of the Company’s shareholders. Thus granting the extension request is consistent with public interest and protection of investors.”
In August, EDC said it would conduct a tender offer for up to 2,040,006,713 common shares at P7.25 each that are held collectively by the public. The move is ahead of the company’s plan to delist from the stock exchange.
“The intention to eventually delist EDC was shared with the market last year and the tender offer that our board has approved today presents a meaningful opportunity for our minority shareholders to realize their investment prior to the delisting of the company, at a significant premium to the current share price,” EDC President and Chief Operating Officer Richard B. Tantoco stated.
On Monday, shares in EDC slipped by 0.14% to close at P7.06 each.

Green Book wins Toronto film fest’s top prize

TORONTO — Peter Farrelly’s dramatic comedy buddy movie Green Book, starring Mahershala Ali and Viggo Mortensen, won the Toronto International Film Festival audience prize on Sunday, making it a surprise Oscar contender.
The film follows a working-class Italian-American bouncer who takes a job chauffeuring an African-American classical pianist through the US South in the 1960s, because it is too dangerous for him to travel alone.
“I’m still reeling from the response to the film (in Toronto) so this is incredible,” Farrelly, who is best known for comedies Dumb and Dumber and There’s Something About Mary, said in a statement.
“This win is beyond my wildest dreams,” he said.
The film beat out Alfonso Cuaron’s Roma (second runner up) and Barry Jenkins’s If Beale Street Could Talk (first runner up) for the festival’s top prize.
Based on a true story, the film tells of Don Shirley (Ali), the well-dressed son of Jamaican immigrants who carries himself with the confidence of a prince, and speaks perfect English but is, according to a write-up by festival organizers, “not built for the brutal bigotry of his time.”
So he hires street-fighting, loud-mouthed Tony “Lip” Vallelonga (Mortensen) to accompany him on his journey, guided by the Negro Motorist Green Book to safe hotels and restaurants in the segregated South.
While delving into the heavy topic of US race relations, the film uses levity to dispel the foundations of prejudice and discrimination, as the traveling pair learn that people — black or white — aren’t so different from each other.
NEXT UP: THE OSCARS
The Toronto film festival is the biggest in North America and has traditionally been a key event for Oscar-conscious studios and distributors, as it is attended by a sizable contingent of media.
Given out since 1978 and based entirely on audience votes, its People’s Choice Award is a bellwether for the Academy Awards.
Seven past winners went on to win an Oscar for best picture: Chariots of Fire, American Beauty, Slumdog Millionaire, The King’s Speech, Argo, 12 Years a Slave, and Spotlight. Nearly a dozen more were nominated in the top category.
In contrast, Cannes’ coveted Palme d’Or has been an indicator of Oscar success only once in 1955 for Marty starring Ernest Borgnine.
This year’s Toronto audience prize winner beat out several films already generating Oscar buzz including Damien Chazelle’s Neil Armstrong biopic First Man, starring Ryan Gosling and Claire Foy, Steve McQueen’s feminist kick-ass heist movie Widows with Viola Davis, and Bradley Cooper’s directorial debut A Star Is Born with Lady Gaga.
The performances of Nicole Kidman in Destroyer, Steve Carell and Timothee Chalamet in Beautiful Boy, and Robert Redford’s swan song in The Old Man and the Gun have also been much talked about.
Toronto jury prizes also went to Free Solo for best documentary, Vasan Bala’s The Man Who Feels No Pain in the festival’s Midnight Madness category, Ash Mayfair’s The Third Wife for best new Asian film, Carmel Winters’ Float like a Butterfly, Guy Nattiv’s Skin, and The Fireflies are Gone (La disparition des lucioles). — AFP

Metrobank offers LTNCDs

Metrobank
METROPOLITAN Bank & Trust Co. is offering P5 billion worth of LTNCDs.

METROPOLITAN BANK & Trust Co. (Metrobank) started offering long-term negotiable certificates of time deposit (LTNCD) on Monday to diversify its funding sources.
In a notice published today, the bank said it is offering P5 billion worth of LTNCDs, with the option to upsize.
The notes being offered will mature in 5.5 years and will be sold in denominations of P50,000 and in increments of P10,000 thereafter.
The LTNCDs will carry a rate of 5.375% per annum to be paid quarterly.
The issuance constitutes the first tranche of its P25-billion LTNCD program approved by the central bank last July 19.
Metrobank said the sale is set to run until Sept. 28, with the issue date on Oct. 4. Both the offer period and issue date can be adjusted by the bank as it sees fit.
Standard Chartered Bank will serve as the sole lead arranger of the offer, which will be joined by Metrobank as bookrunners. The banks will also serve as selling agents alongside First Metro Investment Corp.
Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”
In April, Metrobank Head of Invesor Relations Juan Placido T. Mapa III said the bank’s LTNCD program is part of its plan to diversify its funding sources.
“The proposed LTNCD program is part of our overall objective of diversifying funding sources and raising long term deposits,” Mr. Mapa told BusinessWorld in April, adding the bank has been issuing long-term notes regularly in the past few years.
To date, Metrobank has raised P26.65 billion through issuances of LTNCDs, with the latest offer in July last year, where it raised P3.75 billion.
A number of banks have been tapping the capital markets in recent months to raise more funds ahead of tighter risk management measures that will take effect on Jan 1, 2019 under the international Basel 3 standards.
Last week, Rizal Commercial Banking Corp. started to offer LTNCDs which will run until Sept. 21. The notes will also mature in five years and six months.
Other lenders such as Philippine Savings Bank, Robinsons Bank Corp. and China Banking Corp. have recently issued LTNCDs to support its funding needs.
Metrobank posted a P5.2-billion profit in the second quarter, up 31% from the P3.9 billion tallied a year ago on the back of its robust core business.
Metrobank shares closed at P68.90 apiece on Monday, climbing 30 centavos or 0.44%. — K.A.N. Vidal

How PSEi member stocks performed — September 17, 2018

Here’s a quick glance at how PSEi stocks fared on Monday, September 17, 2018.

 
Philippine Stock Exchange’s most active stocks by value turnover — September 17, 2018

Philippines snaps slide, beats Qatar, 92-81

By Michael Angelo S. Murillo
Senior Reporter
THE Philippines halted a two-game losing skid at the FIBA World Cup Asian Qualifiers after hacking out a 92-81 victory over Qatar in their Group F encounter played behind closed doors on Monday at the Smart Araneta Coliseum.
Using a better showing in the second half, the Philippines successfully overcame a rough start to book the victory and go back on the winning track.
Prior to the victory, the Philippines suffered back-to-back losses to Australia on July 2 and Iran on Sept. 13.
The Philippines-Qatar contest started tight, with the two teams fighting to an 8-7 count and the home team on top with 7:14 to go.
Qatar, however, would make a 12-0 run, on the strength of three consecutive triples, in the next three minutes to build a 19-8 advantage.
Marcio Lassiter tried to jump-start the Philippines’ offense after but Qatar would stave off any charge back to hold a 26-15 lead after the first canto.
The visitors continued to hold sway to start the second period, extending their lead to 17 points, 43-26, with a little over four minutes left.
The Philippines scrambled to regain lost ground and had some success as it cut its deficit to just nine points, 45-36, at the 1:42 mark.
Qatar though would regain its footing and reestablish control, 52-39, by the halftime break.
Coming out with more energy and aggressiveness on both ends to begin the third period, the Philippines managed to gain headway in its fight back.
Led by Scottie Thompson, Matthew Wright and Beau Belga, the Filipinos came within two points, 54-52, with 5:26 left.
They eventually seized the lead, 59-58, at the 3:19 mark off a Japeth Aguilar basket.
The Philippines built on it the rest of the way to regain control after 30 minutes of play, 67-64.
The hosts kept giving it to the Qataris at the start of the payoff quarter, stretching their lead to seven points, 71-64, after a minute and a half.
Mohd Yousuf Mohammed kept Qatar in the game with his play inside the paint.
The count stood at 80-69 for the Philippines with 4:22 left on the clock before the hosts sped further, 86-70, by the 3:04 mark.
Team Pilipinas would use the clock after before holding on for the win.
Mr. Aguilar and Alex Cabagnot led the Philippines with 16 points apiece with Stanley Pringle adding 13 and Beau Belga 11 points, respectively.
Mr. Mohammed paced Qatar with 26 points with Tanguy Alban H Ngombo and Nasser Khalifa Al-Rayes adding 17 each.
“First half was just bad from a shooting perpective. These are the best shooters in the land and yet they were missing. But I just told them at halftime just shoot and don’t mind the percentage and stick to the game plan,” said Philippines coach Yeng Guiao in the postgame press conference.
“The guys really wanted to win and it showed with how they defended in the second half,” added the coach whose wards played the game behind closed doors as part of the sanctions meted by world basketball governing body FIBA on the Philippines for its role in a brawl with Australia in their July game.
With the win, the Philippines created further separation with its closest pursuer in Group F, Japan, which improved to 4-4 after cutting down Iran in an earlier match on Monday, 70-56.
As of this writing, Australia leads the merged Group F with a 7-1 record, followed by Iran (6-2), the Philippines (5-3), Japan, Kazakhstan (3-5) and Qatar (2-6).
The top three teams at the end of the second round advance to the 2019 FIBA Basketball World Cup.
The fifth window of the Asian Qualifiers will be played in November and December.

DENR revokes all small-scale miners’ permits in Cordillera

ENVIRONMENT and Natural Resources Secretary Roy A. Cimatu on Monday cancelled the permits of all small-scale mining operations in the Cordillera Administrative Region (CAR) following a landslide in typhoon-stricken Itogon, Benguet, over the weekend that killed dozens.
“In view of this current situation in the Cordillera, to prevent further danger to the lives of our small-scale miners, I officially order cease and desist of all… small-scale mining operations in the whole of Cordillera Administrative Region,” Mr. Cimatu said in a briefing with Presidential Spokesperson Harry L. Roque, Jr. and other officials.
Mr. Roque reported that as of 6:00 a.m. of Monday, 54 people were confirmed dead in CAR, broken down as follows: 9 in Baguio City; 1 in Kalinga; 6 in Mountain Province; and in the following Benguet towns, 1 in Tuba, 3 in La Trinidad and 34 in Itogon. Meanwhile, 49 individuals have been reported missing: 5 in Baguio City; 1 in Kabayan, Benguet; 42 in Itogon; and 1 in Tuba.
Mr. Cimatu said he was there “to look into the incident that happened in a small-scale mining community in Itogon wherein there were several casualties.”
“And I was told that we will not stop until we will recover (the bodies), whether they are still alive in the mining area,” he added.
He also said the Department of Environment and Natural Resources (DENR) “will be sending men from the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) to effect the stoppage of all the mining activities, especially in Itogon.”
Itogon Mayor Victorio T. Palangdan described the affected area as “an abandoned mining area, but the Benguet Corp. still maintains ownership over the surface of the land.”
He added that there were small-scale miners operating in the area even before the typhoon came. “I wrote a letter to our MGB (Mines and Geosciences Bureau) people in the Cordillera to stop this mining operation. I issued a stoppage order, but the small-scale miners claimed that they were allowed to mine (an old tunnel originally dug by) Benguet Corp. I also wrote MGB to put a stop to it,” Mr. Palangdan said.
MGB-CAR Regional Director Fay W. Apil added: “For the information of everybody, there are 10 associations which were given temporary small scale mining contracts. Because when EO (executive order) 79 was issued, it says there that: those who are in possession of small scale mining permits will be given temporary small scale mining contracts until their areas are declared as Minahang Bayan. Of the more or less 10,000 small scale miners in Itogon, may 500 only are members of the 10 associations.”
In response, Mr. Cimatu said: “Okay, by virtue of what happened, I’m revoking those permits, effective today.”
President Benigno S.C. Aquino III imposed a moratorium on the grant of new mining permits by issuing EO 79 in 2012. The Minahang Bayan is a program provided for in the People’s Small-Scale Mining Act of 1991 (Republic Act No. 7076), which identifies sites “suitable for small-scale mining, subject to review by the Secretary [of the DENR], immediately giving priority to areas already occupied and actively mined by small-scale miners.”
Also during the briefing, Mr. Palangdan said: “I am appealing to the Secretary that my letter to him, the National (Task Force) Mining Challenge, that we should have first a technical conference to determine the areas that are dangerous and that should be stopped; and not to stop all the mining operations of small- scale [companies].”
Mr. Cimatu replied, “I understand the predicament of these people… Their livelihood. But… we cannot ignore (the deaths). Mining has been taking place for a long time but only now have we seen this many casualties.” — Arjay L. Balinbin

PCC outlines notification requirements for JV deals

THE Philippine Competition Commission (PCC) has approved final guidelines for notification requirements covering future joint ventures (JVs).
According to the guidelines posted on its website, parties forming joint ventures are required to notify the PCC when the revenue or assets of one of the parties to the JV exceeds P5 billion.
Alternatively, mandatory notification is also required if the value of the assets to be combined in the JV exceeds P2 billion.
JV partners are required to notify the PCC 30 days after they agree to transfer assets.
In a mobile message on Monday, PCC Chairman Arsenio M. Balisacan said the guidelines provide “ample” and up-to-date guidance in assessing their transactions.
“It demonstrates how PCC is attuned to the realities of how corporations are run — in particular, when control of a company is shared between two or more shareholders,” he added, noting the terms will take effect immediately.
“While recognizing that joint ventures can result in business efficiencies, the Commission is mindful that such agreements may pose competition concerns when they may result in a substantial lessening of competition in the relevant market,” the guidelines read.
The guidelines define a JV as “a business arrangement whereby an entity or group of entities contribute capital, services, assets, or a combination of any or all of the foregoing, to undertake an investment activity or a specific project, where each entity shall have the right to direct and govern the polices in connection therewith, with the intention to share both profits and risks and losses subject to Agreement by the entities.”
To help the PCC determine the effects of a JV in a market, each party involved should submit to the PCC, prior to the completion of the deal, information on the deal’s business objectives or purposes, terms, degree of participation and management roles of each JV partner, and respective rights and powers in the management of the JV.
Parties subject to the notification requirements should also provide details of their proposed combination or contribution of assets; the division of profits, risks, and losses; a dispute mechanism to avoid deadlocks or litigation; termination or liquidation and/or relevant buy-out provisions; terms of confidentiality; and indemnification mechanisms.
The PCC added that a JV can be subject to merger review.
The PCC’s standard for determining whether a deal constitutes a JV is a finding of joint control , defined as the ability of the partners to substantially influence or direct the actions or decisions of the joint venture, whether by contract, agency or otherwise.
“Forms of joint control may be seen in the equality of voting rights or appointment to decision-making bodies, veto rights, joint exercise of voting rights, or in similar or analogous cases,” it said. — Janina C. Lim

The PSE wants more small investors to join IPOs

Local small investors — or LSIs — can now look forward to greater participation in companies’ initial public offerings (IPO), following new regulations changes meant to attract more investors to the Philippine markets.

An IPO is a company’s debut into the public market — wherein new or existing shares are sold to the public for the first time.
According to the Philippine Stock Exchange (PSE) memorandum issued last Thursday, the Securities and Exchange Commission has just approved amendments to their regulations, prioritizing the involvement of LSIs in these initial public offerings.

New rules

Under these revisions, LSIs can now invest a maximum of P100,000 in a company’s IPO, four times higher than the previous cap of P25,000. In addition, companies are now required to allot 10 percent of their entire IPO to local small investors.
For IPOs exceeding P5 billion, the PSE may opt to increase LSIs’ subscription cap “on a case to case basis… to help facilitate greater participation and subscription to the LSI allocation.”
The new rules also require issuers to employ share “clawback” or “clawforward” mechanisms in the event of over- or under-subscription within the 10 percent allocated for LSIs. Simply put, these would be provisions that allow issuers to take back or give out shares as needed, in order to maintain balance.

The PSE first raised the possibility of increasing subscriptions for LSIs back in 2016 after noticing that IPOs were growing larger and the investing public was expressing more interest in putting their money in these newly listed companies.

Philstocks Financial, Inc. Research Head Justino R. Calaycay, Jr. expects the rules to positively impact future IPOs. “That will give more room for individuals to participate in IPOs.”
 
“However, given the current times, IPOs in general don’t seem attractive,” he said. While recent economic gains have seen Filipinos gain more and more capacity to invest, current market volatility may prove to be a hindrance.

Omen, or opportunity?

The PSE index has lately been trading within a 7,500-7,800 range, a far cry from its peak of 9,058 last January. While performance metrics were up last Thursday, those numbers were still 17% lower than the record high posted at the start of 2018.

“If we look at the precarious level of the market right now as well as the internal and external factors that influence the recent move of the index, I think market participants will stay cautious until they see signs of recovery in the market,” said Jervin de Celis, a trader with Timson Securities, Inc.

But flagging market performance may also present opportunities for retail investors.
“In reality, from an investors’ point of view, the recent slump of the market can be seen as a buying opportunity, a good entry point to position into stocks that have reduced its valuation,” said Rens V. Cruz II, an analyst with Regina Capital Development Corp.
“If you’re an investor, you’re looking at prospects long-term, and you enter at dips, such as the recent weakness of the market,” he said.


Edited by Santiago J. Arnaiz
With reporting by Arra B. Francia and Anna Gabriela A. Mogato. Read Arra’s original piece on the new changes in IPO rules here.

Typhoon to raise inflation expectations, draw monetary policy response

THE AGRICULTURE sector’s lackluster performance in the second quarter will continue this quarter and may further weigh on overall economic growth, with the destruction from typhoon Ompong (international name: Mangkhut) exacerbating inflation, analysts said.
Economists said the damage to agriculture will stoke inflation expectations, possibly leading to a more aggressive policy stance by the central bank, notwithstanding moves by the national government to address supply-side concerns.
“Because of the typhoon, agriculture will continue to contribute a measly amount to growth. Inflation can be moderated if the government carries out its plan of aggressively importing rice and other basic food commodities,” University of Asia and the Pacific Professor Bernardo M. Villegas said in an e-mail.
“Growth of GDP (gross domestic product) could be below 6%,” he added.
Reuters reported on Monday that typhoon Ompong destroyed 250,730 tonnes of paddy rice and 1,204 tons of corn over the weekend.
Nicholas Antonio T. Mapa, a senior economist with ING, said in a separate e-mail: “Agriculture generates roughly 9% of total economic growth. With the severe weather we’ve seen in August and September, we may see a similar struggle from the sector in 3Q.”
The economy grew 6% in the second quarter against 6.6% a year earlier, making for a 6.3% GDP growth average in the first half, which was also slower than the 6.6% average recorded a year earlier.
Agriculture, hunting, forestry, and fishing grew 0.2% in the second quarter from 6.3% a year earlier — accounting for 0.01 percentage points of GDP.
“The typhoon damage will likely exert additional price pressures on the food basket in the near term. The corn damage may have a longer lasting impact on feeds and eventually meat prices,” said Mr. Mapa.
Both economists said that the BSP will hike interest rates in its Sept. 27 policy meeting, which if realized, would add to the 100 basis-point increase made from May to August — and possibly weigh down consumption spending.
“The 50 bps rate hike by the BSP next week will be carried out in an attempt to anchor inflation expectations and we will have to see whether this forceful action will be enough to quell brewing inflation expectations,” said Mr. Mapa, noting that the economy “may have to contend with increased borrowing costs that could enervate the consumption and investment momentum alike.”
“The central bank will continue hiking benchmark rates, driving interest rates to higher levels. This will lead to further slowdown of car sales and housing units,” said Mr. Villegas.
Inflation in August accelerated to 6.4% from 5.7% a month earlier and 2.6% a year earlier. The eight-month inflation average was 4.8%, above the central bank’s 2-4% target range.
“If at all, rate hikes would need to feed into the economy, slow overall GDP before inflation is pulled lower, but at the cost of economic growth,” said Mr. Mapa.
However he said that monetary policy action may only do little to slow down inflation.
President Rodrigo R. Duterte is expected to sign within this month measures to address food supply shortage.
These include the immediate release of 4.6 million sacks of rice from National Food Authority (NFA) warehouses, authorizing the NFA Council to import of five million sacks of rice that will arrive next month and other five million early next year; streamlining the licensing procedures for NFA rice imports; facilitating the distribution of imported fish to wet markets; the formation of teams consisting of law enforcers and farmer groups to monitor the transport of rice from ports to NFA warehouses to retail outlets; the establishment of cold storage facilities for chicken; outlets to minimize farmgate and retail price differentials; and the priority release of essential food items in Customs ports.
The economists said manufacturing and the government’s infrastructure program will be major growth drivers this quarter, cushioning the slowdown in agriculture.
“Fortunately, manufacturing is still growing faster than services. Build, Build, Build, is gaining traction. The seasonal increase in consumption expenditures in the last quarter will keep the GDP growth for the whole year above 6%, still one of the highest in the East Asian region,” said UA&P’s Mr. Villegas.
Mr. Mapa added: “Going forward, investment in infrastructure will help in addressing these susceptibilities and safeguard the country’s agricultural output.”
Mr. Villegas said that the expected large inflows of overseas Filipino worker (OFW) remittances during the holiday season, complemented by the peso’s depreciation to 12-year lows, will boost consumption spending — which accounted for 56% of second quarter GDP.
“The peso-dollar rate will settle below P54 to $1 as massive remittances are expected in the last quarter since OFWs will be more generous with their remittances as they know that their relatives are facing higher prices for their daily expenditures,” said Mr. Villegas. — Elijah Joseph C. Tubayan