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Senate committee report on charter change out by October — Pangilinan

The Senate committee on constitutional amendments and revision of codes may release its report on charter change by October, the panel chair Senator Francis N. Pangilinan said on Thursday.
“We’re looking maybe October dahil (because) two weeks ago lang natin nakuha ‘yung (we received just two weeks ago the) ConCom (Consultative Committee) constitutional draft,” he said during the Kapihan sa Senado media forum, adding that the committee is still awaiting the ConCom’s answers to concerns raised in a previous hearing.
The Senate panel has been conducting public hearings since earlier this year to determine whether there was a need to amend the 1987 Constitution and to discuss the best mode of charter change. The ConCom has also submitted its draft federal Constitution to both Chambers of Congress early July.
Mr. Pangilinan said the committee will also consider the House Resolution recently filed by House Speaker Gloria M. Arroyo for a separate voting between two chambers of Congress once convened as a constituent assembly to propose amendments to the 1987 Constitution. — Camille A. Aguinaldo

CIC profit rises 14% in second quarter

Concepcion Industrial Corp. (CIC) posted a 14% growth in its attributable profit during the second quarter of 2018.
In a regulatory filing, the listed maker of air-conditioners and refrigerators reported a net income attributable to the parent of P402 million, versus the P352 million it booked in the same period a year ago. Net sales likewise jumped 14% to P4.62 billion for the quarter.
“We are pleased with the strong results coming out of the second quarter of 2018 as our team focused on delivering results based on cost reductions, precise strategic execution, and clear messaging across the organization in the midst of fluctuating exchange rates and high commodity prices,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion. — Arra B. Francia

Cebu Landmasters unveils P3.6-billion mixed-use project in Mandaue

Cebu Landmasters, Inc. (CLI) has unveiled a P3.6-billion mixed-use project in Cebu, set to house a mall, office spaces, residential units, and a hospitality component.
In a statement issued Thursday, the listed property developer said it will develop the two-tower Astra Centre on a 1.2-hectare lot on A.S. Fortuna Street in Mandaue City. The project seeks to cater to the need for more integrated developments in the area.
“Astra Centre’s strategic location combined with the synergies that will arise from the development’s components ensure a high-energy development,” CLI Chief Executive Officer Jose R. Soberano III said in a statement. — Arra B. Francia

SM Investments earnings up in H1

SM Investments Corp. (SM) reported a nine percent increase in earnings during the first six months of 2018, boosted by the double digit growth of its property and retail units amid flattish results from the banking business.
In a statement issued Thursday, the Sy-led conglomerate said net income climbed to P18.1 billion in the January to June period of this year, higher than the P16.6 billion it posted in the same period a year ago. This came on the back of a 12% uptick in revenues to P204.9 billion, against P183.2 billion in the first half of 2017.
“We are encouraged by the results of the first half, driven by the strong performance of retail and property, particularly the residential business. Our results show the strength of the economy and consumer sentiment but we remain vigilant about inflationary pressures. We are optimistic that consumption will remain resilient,” SM President Frederic DyBuncio said in a statement.– Arra B. Francia

D&L books higher recurring profit in second quarter

D&L Industries, Inc. (DNL) expanded its recurring income by 14% to P784 million in the three months ending June, driven by higher volumes for the high margin specialty product (HMSP) segment of its food business.
The listed manufacturer of customized food ingredients and specialty raw materials said in a statement on Thursday, Aug. 9, that this pushed recurring income 13% higher to P1.53 billion in the first half of 2018. Revenues meanwhile stood at P13.2 billion, four percent higher year-on-year.
The earnings for the first half translate to an earnings per share of 21 centavos.
DNL attributed the profit growth to the 14% increase in volumes from the food unit’s HMSPs, which accounted for 63% of total revenues. The company noted the segment’s growth for the period is twice its historical average increase of seven percent.
“The pick-up in HMSP is encouraging as it represents the side of the business that is recurring and sticky,” the company said. This allowed a two percent year-on-year increase for the food ingredients segment.
Shares in DNL rose 20 centavos or 1.89% to close at P10.76 each at the stock exchange on Thursday. — Arra B. Francia

Oil holds loss near 7-week low as US-China trade war escalates

Oil held losses near a seven-week low as China vowed to retaliate against the U.S. administration’s latest tariffs, raising trade tensions between the world’s two biggest economies.
Futures in New York were little changed after sliding 3.2% Wednesday. China will slap 25% duties on an additional $16 billion worth of imports from the U.S. from Aug. 23, including gasoline, diesel and other petroleum products. Investor concern that the trade spat will limit energy demand growth overshadowed Energy Information Administration data released Wednesday that showed U.S. crude inventories fell the second time in three weeks.
Crude has struggled to gain near $70 this month after retreating from the highs of June as the U.S. and China showed no sign of backing down from the trade fight, raising concerns over global economic growth. Meanwhile, investors are closely watching whether Saudi Arabia and other producers will increase output to replace potential supply losses from Iran as President Donald Trump is set to impose sanctions on the country’s oil exports from November.
“Oil had been largely immune from the escalating trade dispute, however the recent application of tariffs by China on U.S. petroleum products does represent a step change for the energy market,” said Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd. “It’s clearly worrying investors at the moment.”
West Texas Intermediate crude for September delivery traded at $66.99 a barrel on the New York Mercantile Exchange, up 5 cents, at 7:50 a.m. in London. The contract declined $2.23 to $66.94 on Wednesday, the lowest close since June 21. Total volume traded was about 33% below the 100-day average.
Brent for October settlement traded at $72.44 a barrel on the London-based ICE Futures Europe exchange. Prices dropped $2.37 to settle at $72.28 on Wednesday. The global benchmark crude traded at a $6.08 premium to WTI for the same month.
Futures for September delivery lost 1.1% to 517.7 yuan a barrel on the Shanghai International Energy Exchange, after falling 2.6% on Wednesday.
With its latest tariff threat, China on Wednesday matched an earlier move from Washington in another ratchet higher for the trade war between the two nations. The Ministry of Commerce said the U.S. decision to levy tariffs on Chinese goods is “very unreasonable,” and the Asian nation will have to retaliate to protect its rightful interests and the multilateral trading system.
Oil from American fields was among goods the Chinese had designated as subject to eventual tariffs on a list in June. But the commodity was spared from the 11-page series of 333 product classifications that will incur levies released Wednesday. While crude hasn’t been targeted this time, the Asian nation may reimpose duties at a later date if Trump doesn’t back down, according to Li Li, a research director at ICIS-China.
As recently as June, China was the top foreign buyer of U.S. crude, importing a record 15 million barrels that month. A the same time, President Xi Jinping is urging China’s state-owned energy giants to boost domestic oil and gas output. Refiners in China are unlikely to increase purchases of American crude even after the Ministry of Commerce removed oil from its list of U.S. goods slated for tariffs, according to Michal Meidan, an analyst with Energy Aspects Ltd.
In the U.S., nationwide crude stockpiles dropped 1.35 million barrels last week, according to the EIA, while supplies stored in the key hub of Cushing, Oklahoma, slid for a twelfth straight week, declining by 590,000 barrels. Gasoline inventories increased by 2.9 million barrels, the data show. — Bloomberg

BSP raises policy rates anew

The Bangko Sentral ng Pilipinas (BSP) raised rates anew on Thursday, Aug. 9, in a more aggressive move as expected, to arrest faster inflation while economic growth has softened.
The Monetary Board raised policy rates by 50 basis points (bp), marking the third consecutive tightening move this year.
“The Monetary Board noted that latest baseline forecasts have shifted higher over the policy horizon, indicating some risk of inflation exceeding the target in 2019,” BSP Governor Nestor A. Espenilla, Jr. said.
The BSP tightened rates by 25bp each during their May and June meetings, at a time when monthly inflation started to log beyond four percent. Policy makers saw that tighter benchmark yields are needed to arrest second-round effects of tax reform, particularly on wages and other consumer goods.
Prices of widely-used goods surged to 5.7% in July, beating market expectations which brought the seven-month average to 4.5%, well above the 2-4% target range. — Melissa Luz T. Lopez

DoLE amends rules on wage deduction

The labor department issued a new department order regarding rules and regulations on deduction of wages.
The Department of Labor and Employment (DoLE) issued Department Order (DO) 195 or “Rules Amending Section 10 of Rule VIII of the Implementing Rules and regulations of the Labor Code on Wage Reduction” which was signed by Labor Secretary Silvestre H. Bello on July 27.
Section 10(b) will now be amended as follows: “When the deductions are with written authorization of the employees for payment to the employer or a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit directly or indirectly, from the transaction.”
Prior to the amendments, the employer was not included in the written authorization of the employees for payment. — Gillian M. Cortez

PSBank net profit climbs in first half

Philippine Savings Bank (PSBank) reported higher net income in the the first half of the year on the back of strong net interest income and service fees.
In a disclosure to the local bourse on Thursday, Aug. 9, the consumer lending arm of Metropolitan Bank & Trust Co. (Metrobank) saw its net profit climb to P1.35 billion in the January-June period, up 14.7% from P1.18 billion in the same period last year.
PSBank attributed this to its “robust revenues driven by net interest income and service fees.”
The bank’s net interest income grew 8.8% to P5.85 billion from last year’s P5.38 billion.
Total loan portfolio expanded by 10.7% to P151.62 billion from the P137.01 billion tallied year-on-year.
Deposits likewise stood at P200.09 billion, 9% higher from a year-ago period.
PSBank’s earnings translated to a return on equity of 11.83%.
Common equity tier 1 ratio stood at 11%, which capital adequacy ration was at 13.7%, above the minimum central bank requirement levels.
Overall, the bank’s total assets stood at P234.76 billion, up 7.4% from the same period last year.
In the statement, PSBank President Jose Vicente L. Alde said the lender’s first half performance is a realization of its institutional strategy by providing end-to-end customer experience.
“We have likewise tapped on the latest available digital technology to improve on process efficiencies to bring the cost of operations down while maximizing the full potential of our sales distribution channels in generating more business for the bank,” Mr. Alde was quoted as saying in the regulatory filing. — Karl Angelo N. Vidal

PHL GDP eases to 6%, below gov’t target band and estimates

By Carmina Angelica V. Olano, Researcher
The Philippine economy grew 6.0% in the second quarter of 2018, the Philippine Statistics Authority (PSA) reported Thursday morning.
The April-June gross domestic product (GDP) growth figure was lower than the revised 6.6% growth recorded in the same period in 2017 and the 6.8% median estimate in a BusinessWorld poll last week.
This brings growth in the first half to 6.3%, which is also below the government’s 7-8% target band for 2018.
The services led growth among major sectors at 6.6%, faster than the 6.4% recorded in the same period last year. Meanwhile, the industry sector posted a 6.3% growth, slower than the 7.1% in 2017.
Agriculture also grew albeit marginally at 0.2% versus the 6.3% growth posted a year ago.
On the expenditure side, household spending was up 5.6% during the period compared to the 6.0% growth in the second quarter of 2017.
Exports of goods and services grew by 13.0%, slower than 2017’s 21.4%. Meanwhile, imports grew 19.7% from 18.6%.
On the other hand, government spending picked up steam during the quarter, growing by 11.9% from 7.6% in the same period last year. Capital formation, which is a measure of private investment, was likewise up by 20.7% from 7.6%.
Gross national income—the sum of the nation’s GDP and net income received from overseas—recorded a growth of 5.8% in the second quarter of 2018, down from 6.6% previously.

Gov’t raises $1.39B from yen debt sale

THE PHILIPPINES raised a total of ¥154.2 billion, or about $1.39 billion, as it returned to the “samurai” bond market after eight years, the Department of Finance (DoF) said in a statement on Wednesday.
The department said the government raised ¥107.2 billion in three-year papers with a 0.38% coupon, ¥6.2 billion in five-year debt that fetched 0.54% and ¥40.8 billion in 10-year notes that fetched 0.99%.
“Overall, the transaction yielded a weighted average spread of 34.7 bps above benchmark. Compared to our peers, the Republic priced tighter and issued more than Indonesia (¥100 billion) and higher-rated Mexico (¥135 billion),” Finance Secretary Carlos G. Dominguez III told reporters in a mobile phone message.
He said that the dollar equivalent of the transaction size is $1.39 billion, slightly more than the $1 billion initially planned.
National Treasurer Rosalia V. De Leon said in a mobile phone message that the sale involved “all new money.”
“The Republic has a track record of very tight pricing in US Dollar markets and we will be uncompromising in measuring against that benchmark in approaching new markets,” Ms. De Leon said in a DoF statement.
“Pricing on today’s offering is very compelling and we were able to print the maximum deal size we were seeking.”
‘DEEPENING CONFIDENCE’
The same statement quoted Mr. Dominguez as saying: “This successful return to the ‘samurai’ bond market is the latest proof of the deepening investor confidence in the Philippine economy under the Duterte presidency.”
“The government’s disciplined fiscal position, along with game-changing reforms starting with the new legislation — the Tax Reform for Acceleration and Inclusion Law — that has modernized and simplified Philippine taxation, have created enough room for our current policy of aggressive investments not only in public infrastructure but in human capital formation as well,” he added.
“Such priority programs are meant to sustain the country’s momentum as one of Asia’s fastest-growing economies, further improve its global competitiveness and bring lasting social benefits to all Filipinos in keeping with President (Rodrigo R.) Duterte’s vision for high growth and financial inclusion,” said Mr. Dominguez.
The sale of yen-denominated bonds followed the Philippine economic briefing in Tokyo conducted by the government’s economic managers and other cabinet members in June, attended by about 500 investors.
The DoF said that Daiwa Securities Company Ltd., Mitsubishi UFJ Morgan Stanley Securities Co. Ltd., Mizuho Securities Co. Ltd., Nomura Securities Co. Ltd. and SMBC Nikko Securities, Inc. were the joint lead managers and book runners for the bond sale.
The bonds were rated investment grade at “Baa2” by Moody’s Investor Service, “BBB” by S&P Global Ratings, and “BBB+” by Japan Credit Rating Agency, Ltd.
“Today’s offering was well received by a good mix of institutional and regional investors — most of whom are new to Philippine credit. These included [asset managers, life insurers, trust banks and specialist banks, regional accounts including shinkin banks, non-Japanese accounts and corporates],” DoF said in its statement.
The Philippines last went to the “samurai” bond market in 2010, raising ¥100 billion in 10-year notes that fetched a 2.32% coupon.
“Today’s offering marks the return of the Republic to the Samurai market after an eight-year break, and the first time in almost 20 years that it has issued ‘samurai’ bonds on a stand-alone basis,” the DoF said.
“This year has been a trailblazing year for the Republic in the international capital markets. In March we issued our debut ‘panda’ bonds to tremendous investor endorsement. And with today’s ‘samurai’ offering, we continue to expand and diversify our market access,” Ms. De Leon said.
‘INCREASING INTEREST’
Mr. Dominguez meanwhile said that the Philippines’ recent successful exposure in the capital markets in Japan and China “underscores the international business community’s increasing interest in investing in the Philippine growth story.”
The government sold $230 million worth of renminbi-denominated “panda” debt in March with a five percent coupon, reflecting a tight 35 basis point spread above the benchmark rate.
It also raised $2 billion in its dollar global bond sale in January, with half consisting of new money and the other $1 billion in a debt swap for liability management.
The DoF has said that was looking the possibility of another global bond sale some time this semester.
The government plans to borrow P888.23 billion this year.
It has increased the share of foreign borrowings for this year to a 65-35 borrowing mix in favor of local sources, from a 74-26 ratio planned earlier and 80-20 programmed for 2017, in a bid to diversify its financing portfolio. — Elijah Joseph C. Tubayan

PSA revises Q1 economic growth rate downwards

THE ECONOMY grew slower than previously estimated in the first quarter, the government reported ahead of the release of second-quarter gross domestic product (GDP) data today.
The Philippine Statistics Authority (PSA) said its latest estimate shows that first-quarter GDP — which measures the value of final goods and services produced in a country — went up by 6.6%, lower than the 6.8% that was reported last May.
Four subsectors that recorded notable downward adjustments were: “other services” (revised to 6.9% from 8.8%), construction (8.8% from 9.3%), manufacturing (7.6% from 8%), and agriculture and forestry (1.9% from 2.4%).
A BusinessWorld poll of 15 economists and analysts yielded a median estimate of 6.8% for the April-June period. If realized, this figure would take first-semester average growth to 6.8%, a few points shy of reaching the 7-8% government target for full-year 2018. Some economic managers last month aired hopes for second-quarter GDP growth of seven percent. — M. T. Amoguis

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