Bloomberry reports 73% profit surge in first quarter

May 8, 2018 | 4:10 pm

Bloomberry Resorts Corp reported a 73% increase in attributable profit for the first three months of 2018, boosted by record volumes in both mass gaming and VIP gaming segments.
The owner and operator of Solaire Resorts and Casino in Manila and Jeju Sun Hotel & Casino in Korea booked a net income attributable to equity holders of the parent of P3.7 billion in the first quarter, higher than the P2.14 billion posted in the same period a year earlier, according to a regulatory filing disclosed Tuesday, May 8.

“We are off to a good start. Our fundamentals are solid, our cost optimization initiatives are working, so we should be on track to making this a banner year,” Bloomberry Chairman and Chief Executive Officer Enrique K. Razon, Jr. said in a statement. — Arra B. Francia

Foreign expert says PHL government needs to review CCT’s targeting mechanism

May 8, 2018 | 4:02 pm

THE GOVERNMENT should revisit its conditional cash transfer program to ensure that they are given only to those who need them, an expert said.
“You have to slow down the program because you are still learning,” Nanak Kakwani, an economics professor from the University of New South Wales said during a seminar hosted by the Philippine Institute for Development Studies (PIDS).
She said that this may give the government breathing room to reassess its targeting mechanism.
Mr. Kakwani had a similar stance with a 2015 PIDS study where the CCT, or the Pantawid Pamilyang Pilipino Program, had a 29% leakage rate.
The study noted that about three in every 10 CCT beneficiaries are not poor and do not even deserve to be part of the program.
The government said earlier that the issuance of the National ID system would help plug these leakages. — Elijah Joseph C. Tubayan

IMF sees Philippine inflation to remain above 4% until 2019

May 8, 2018 | 3:40 pm

The International Monetary Fund (IMF) expects Philippine inflation to remain elevated until 2019, and is even expecting price increases to overshoot the central bank’s target this year.
Inflation is seen to hit 4.2% this year using 2012 prices, IMF country representative Yongzheng Yang said via e-mail. If realized, this will log higher than the 2-4% target band set by the Bangko Sentral ng Pilipinas (BSP). — Melissa Luz T. Lopez

S&P maintains bullish outlook for Philippine banks

May 8, 2018 | 3:39 pm

The Philippine banking system is likely to benefit from a brighter outlook for the economy, S&P Global Ratings said, with stronger domestic activity to fuel increased lending for local players.
“Our view on the Philippines banking system is pretty much aligned with our view on the government as well. We are equally optimistic on the Philippines banking system as a whole,” S&P credit analyst Ivan Tan said in a webcast last week.
“We are seeing this positivity feeds through to the conglomerates and the corporate sector, and banks in the Philippines typically lend to the large corporates and medium-sized SMEs as well. Basically the banking sector is a face or representation of the economy there and when the economy does well, the credit profile of the banking system will improve as well.”
On April 26, S&P revised upward its rating outlook for the Philippines to “positive,” hinting at a possible credit upgrade in the coming months. — Melissa Luz T. Lopez

Government raises P10 billion from reissued three-year bonds

May 8, 2018 | 3:18 pm

The government made a full award of reissued three-year Treasury bonds (T-bonds) on Tuesday, May 8.
At Tuesday’s auction, the Bureau of the Treasury (BTr) raised P10 billion from the reissued bonds maturing on Jan. 5, 2021.
Total tenders reached P19.424 billion, nearly double the amount the BTr wanted to raise.
The three-year bonds fetched an average rate of 4.703% with a coupon rate of 4.25%. This was higher than the 4.632% average rate fetched when the papers were last sold.
At the secondary market, before Tuesday’s auction, the 20-year papers were quoted at 5.3893%. — Karl Angelo N. Vidal

Olazo abstract fetches P1.9 million at benefit auction

May 8, 2018 | 2:18 pm

Antique furniture, 18th-century maps of Asia and the Philippines, wooden figures of bu’lul (god of harvest), and renowned paintings by Filipino artists were among the auctioned pieces for the benefit of scholars at International School Manila (ISM), in partnership with Gavel & Block, a subsidiary of Salcedo auctions on May 5 at The Peninsula Manila.
Filipino abstract painter Romulo Olazo’s 1986 untitled mixed media on canvas took the highest bid at an estimated final price of P1.9 million from its opening price at P380,000.
Other artworks sold included Ang Kuikok’s 1973 oil on wood painting of Still Life Table with Fruits and Ramon Orlina’s Madonna and Child sculpture which were sold at an estimated price of P1 million.
Benefit is the first auction by Salcedo Auctions to help raise funds for the Vicky SyCip Herrera (VSH) Filipino Scholarship at International School Manila (ISM). — Michelle Anne P. Soliman

Agricultural output grows in first quarter

May 8, 2018 | 1:50 pm

The country’s agricultural output for the first quarter of 2018 grew by 1.47%, boosted by gains in the crops, livestock and poultry subsectors, Philippine Statistics Authority (PSA) data showed.
In a report released on Tuesday, May 8, the Philippines’ agricultural gross value grew by 8.94% to P444 billion in year-on-year comparison with almost all subsectors posting growth to a certain degree, except for fisheries.
Agriculture Secretary Emmanuel F. Piñol in a text message to reporters said the decline in fisheries was “expected” due to the closed fishing season from December 2017 to March.
Despite this, Mr. Piñol said that he is “happy that the PLEA (Production Loan Easy Access and SAAD (Special areas for agricultural development) programs are now contributing to greater productivity.”
The crops subsector, which took up 53.76% of the total agricultural output, grew by 1.79% due to better prices and production in general. The total value went up by 8.24% to P252.2 billion, PSA noted.
Palay output went up by 4.61% while corn output likewise increased by 4.66%, due to the intervention of the Department of Agriculture (DA).
Aside from the PLEA and SAAD, the PSA credited the higher trading price, the “usage of high yielding varieties of seeds from the Rice Program Model Farm of the [DA], adequate irrigation, water supply and sufficient rainfall during the planting
period.”
PSA also noted an early harvest amid favorable weather as well as expansion in Central Luzon and CALABARZON harvest areas with the help of DA’s programs. — Anna Gabriela A. Mogato

Fashion priestesses get holy at New York Met Gala

May 8, 2018 | 1:46 pm

New York — Madonna and Rihanna stunned as fashion high priestesses on the red carpet at New York’s Met Gala on Monday, headlining the most sought after invitation in the celebrity universe.
Madge, the Catholic girl from Michigan and queen of pop whose 1989 hit “Like a Prayer” remains a dance-floor classic 30 years later, presided over the “Sunday Best” theme dressed head to toe in Jean Paul Gaultier.
The 59-year-old mother of six balanced a golden crown studded with crucifixes on her head, shrouded her face in a black fishnet mantilla and donned a very flouncy, very full and very black gown.

Held every year on the first Monday in May, the black-tie extravaganza is the chief source of income for the Metropolitan Museum of Art’s Costume Institute, reportedly raising more than $12 million in 2017.
The gathering of A-list models, musicians and movie stars, dubbed “the Oscars of the East Coast,” saw Amal Clooney, Rihanna and Donatella Versace join Vogue supremo Anna Wintour as this year’s co-chairs.
Tickets are said to cost $30,000 each or $275,000 for a table, but all guests must be invited, ruling out all but the most elite Hollywood actors, music superstars, top models and fashion designers.
If A-listers have shunned the theme in the past, this year’s “Sunday Best,” a nod to the “Heavenly Bodies: Fashion and the Catholic Imagination” exhibition at The Costume Institute, proved popular.
Wing and a prayer
Rihanna, the Barbadian superstar and one of the biggest pop stars on the planet, proved her red carpet pulling power in a jewel-encrusted gown from John Galliano’s Maison Margiela and bejeweled bishop’s hat.
There were celestial crowns like a Virgin Mary icon, lashings of cardinal red, virginal white and New York’s de rigueur clerical black.
Katy Perry dressed as an angel with enormous feathered white wings that towered over her petite frame and trailed the floor, a Versace chain-mail gold mini-dress and thigh-high stilettoed gold boots
Clooney, the international human rights lawyer and this month’s Vogue cover star, wore the pants as she arrived on the arm of her movie star husband George, dressed in blue cigarette trousers with a strapless bustier and voluminous skirt by up-and-coming Briton, Richard Quinn.
Jennifer Lopez and Alex Rodriguez, the celebrity couple of the moment, also stepped out, the “Jenny from the Block” songstress in a beaded and feathered gown with a giant mosaic crucifix on the front.
Sarah Jessica Parker, a doyenne of New York high society and the “Sex and the City” fashionista, walked the red carpet in full-length gold brocade by Dolce and Gabbana and an astonishing head piece.
But for all the glitz, the event has also been dogged by rumors that once inside, it can be intimidating and unfriendly.
Tina Fey once called it a “jerk parade,” complaining to David Letterman that: “If you had a million arms and all the people you would punch in the whole world, they’re all there.” — AFP

Economic growth picks up in Q1 — poll

May 8, 2018 | 12:33 am

By Carmina Angelica V. Olano
ECONOMISTS expect economic growth to pick up pace in the first quarter on the back of higher household and consumer spending that would largely offset the effects of inflation and the wider trade deficit.
A poll of 10 economists yielded a 6.8%median estimate of gross domestic product (GDP) growth for January-March 2018, faster than the revised 6.5% recorded in the first quarter of 2017.
This puts the growth pace near the low-end of the government’s 7-8% target band for 2018.

The Philippine Statistics Authority is scheduled to release the official GDP data on Thursday.
In a note last Friday, Moody’s Analytics gave a 6.8% first quarter estimate, saying that demand-side factors have placed the economy “in somewhat of a sweet spot” as the country continues to enjoy “steady inflows” of remittances; a “firm labor market”; and “robust” investments on account of the government’s aggressive infrastructure spending.
The country’s economic managers were likewise optimistic with Socioeconomic Planning Secretary Ernesto M. Pernia telling reporters last month that first quarter economic growth “would at least touch seven percent or skirt around seven percent,” while the officials at the BangkoSentral ng Pilipinas (BSP) noted that the economy is capable of absorbing future interest rate hikes.
Market expectations reflected the bullish forecast based on the economists polled last week, with most in agreement about consumer and government spending as growth drivers.
“Robust government spending on infrastructure is expected to make a huge impact on Q1 economic growth,”saidRuben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UnionBank). He estimated 6.9% economic growth for the quarter.
“On the supply-side, services and industry are expected to contribute to growth with agriculture also pitching in,” he said.
Rajiv Biswas, APAC chief economist at the IHS Markit concurred: “GDP growth in Q1 2018 is expected to strengthen to 7.0% year-on-year, helped by a strong upturn in government infrastructure spending and robust consumer demand.
Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, estimated 6.9% saying the economic growth pickup in the first quarter “might be a result of stronger increases across all major expenditure components” with consumer spending and private investments rising despite inflationary pressures.
“Consumer spending likely picked up as the reduction in personal income taxes increased households’ disposable income, allowing consumers to spend more despite higher inflation,” Mr. Dumalagan said.
“The robust growth in OFW remittances, whose purchasing power has been amplified by a weaker peso, also helped consumers hurdle the sharper rise in consumer prices. Government spending likewise gained momentum,” he added.
Michael L. Ricafort, economist at the Rizal Commercial Banking Corp. (RCBC), was of the same opinion, adding that on the supply side, manufacturing is expected to pick-up further “amid record-high FDIs in recent years.”
Jefferson A. Arapoc, economist at the University of the Philippines (UP), gave a 6.9% GDP growth estimate: “I believe that the good showing of the manufacturing sector and the rolling out of government infrastructure projects will fuel GDP growth…,” he said.
FDIs in the manufacturing sector grew 244% to $1.15 billion from 2016’s $334.35 million last year, accounting for 35% of the $3.263-billion equity capital placements – which excludes reinvested earnings – in 2017 that in turn contributed to a fresh record-high $10.049 billion.
Meanwhile, the government spent a total of about P782 billion in the first quarter, 27% more than the P615.4 billion spent in the first quarter of 2017 and surpassing the P755.8 billion goal.
Furthermore, Department of Budget and Management data showed infrastructure and capital outlays growing 33.7% to P157.1 billion during the quarter from the P117.5 billion recorded in 2017’s comparable three months, exceeding the government’s P143.4-billion target for the quarter by around 9.6%.
The government is expected to allocate P699.312 billion to infrastructure spending for the entire 2018, or equivalent to 4% of GDP.
The quarter also saw the passage of the first package of the Tax Reform for Acceleration and
Inclusion (TRAIN) act. To recall, package 1 of TRAIN, which was scheduled to take effect in January, reduced income taxes of almost all of the country’s taxpayers, but also levied additional taxes on products that include sugar-sweetened beverages, cigarettes, fuel and cars.
The passage of TRAIN and the “massive” infrastructure program led Fitch Ratings to upgrade the country’s credit rating from BBB- to BBB with a “stable” outlook. The new rating marks the first major upgrade secured under the Duterte administration with the last upgrade being made on September 2015.
Risks on growth
Nevertheless, key risks remain with economists pointing to the country’s increasing inflation and worsening trade balance as threats to their outlook.
Government data showed that inflation during the quarter posted a 3.8% growth, which is near the high-end of the government’s 2-4% target for the year on account of higher prices of food as well as alcoholic beverages and cigarettes due to the TRAIN law.
Meanwhile, latest trade data show total merchandise imports growing 14.7% as of the January-February period, already surpassing the government’s 10% target this year. On the other hand, year-to-date merchandise exports was only up a percent, way-below its nine percent target for the year. This brought trade deficit in the first two months of the year at $6.23 billion, bigger than the $4.24 billion shortfall recorded in 2017’s comparable two months.
“Although I expect robust and higher growth for the Philippines, I expect inflation to be the main risk in my GDP outlook,” UnionBank’s Mr. Asuncion said.
Cid L. Terosa, senior economist at the University of Asia and the Pacific, was of the same view: “[T]he short-term inflationary effect of the TRAIN law and higher prices of utilities dragged growth in the first quarter.”
UP’s Mr. Arapoc, for his part, cited the “huge dip” on consumer confidence in the BSP’s Consumer Expectations Survey for the January-March period that might hamper the economy’s growth moving forward: “[The drop] can be ascribed to the anticipation of higher prices due to the implementation of the TRAIN law,” he said.
The first quarter reading in that survey yielded a 1.7% net confidence score, plunging from 9.5% during the fourth quarter of 2017 and the 8.7% recorded in the fourth quarter of 2017.
For IHS’s Mr. Biswas, a key risk to the positive outlook for the Philippine economy would be if world oil prices would “rise significantly” above the $75 per barrel for Brent crude. “
“[This] could push up inflation pressures and force the BSP to hike policy rates more than currently expected by financial markets,” he said.
Higher oil prices, Mr. Biswas said, would also result in a widening trade deficit “which could increase the drag on GDP growth from net exports” as well as put a downwards pressure on the peso.
RCBC’s Mr. Ricafort agreed: “Going forward, relatively wider trade deficits due to higher imports from a year ago would remain to be a drag on GDP growth… for the rest of 2018.”
He noted, however, that the faster pickup in imports may “reflect increased demand for imported capital equipment, raw materials, petroleum, and consumer goods” amid the country’s improved economic fundamentals.
On the other hand, UnionBank’s Mr.Asuncion said that the widening trade deficit “is not a concern.”
“Increasing imports are composed largely of capital goods and raw materials that feed into further economic activities, which is good altogether for economic growth,” he said.

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CORRECTION: An earlier version of this article erroneously reported 6.6% gross domestic product (GDP) growth forecasts made by Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines and Jefferson A. Arapoc, economist at the University of the Philippines. The figures should be both 6.9% from the 6.6% reported originally.

ESCAP keeps Philippine GDP growth projections

May 8, 2018 | 12:32 am

THE UNITED NATIONS’ (UN) regional development arm maintained its economic growth forecast for the Philippines this year, amid a stable outlook for the Asia-Pacific region.
In its Economic and Social Survey of Asia and the Pacific 2018 report, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) said it expects the Philippine economy to grow 6.8% this year, steady from its December report. It also forecasts the economy to grow by 6.9% in 2019.
This would be faster than the 6.7% gross domestic product (GDP) growth recorded in 2017, but below the government’s 7-8% target for 2018 until 2022. The World Bank and International Monetary Fund see lower 6.7% GDP growth for the Philippines this year, with the former forecasting it to grow the same pace in 2019.
ESCAP’s Philippine economic growth forecast would also be above Southeast Asia’s average of 5.1% and 5.2% for 2018 and 2019, respectively, as well as developing Asia-Pacific’s 5.5% forecast for both years.
“The outlook for economic growth in the Asia-Pacific region in 2018 and 2019 is looking broadly stable. Improved global economic prospects, a broad-based pickup in exports and robust domestic consumption support this positive economic outlook. Developing Asia-Pacific economies are projected to grow by 5.5% in both 2018 and 2019, with a slight moderation in China offset by a recovery in India and steady performance in the rest of the region,” the report read.
Among Southeast Asian countries, Myanmar is seen to grow at the fastest clip — 7.2% this year and 7.4% in 2019, followed by Cambodia — 6.9% this year and 6.8% in 2019.
ESCAP sees China’s economy growing by 6.6% this year and 6.4% in 2019, and India’s economy growing by 7.2% this year and 7.4% in 2019.
However, ESCAP flagged several risks facing the region, such as “growing financial vulnerability and rising private and corporate debt, particularly in China and countries in South-East Asia, falling or low reserves in a few South Asian economies and uncertainty concerning trends in commodity prices.”
“Our policy simulation for 18 countries suggests that a $10 rise in the price of oil per barrel would dampen GDP growth by 0.14 — 0.4 percentage points, widen external current account deficits by 0.5 -1.0 percentage points and build inflationary pressures in oil-importing economies. Oil exporters, however, would see a positive impact,” the report read.
Despite a rebound in trade last year, ESCAP also flagged rising trade protectionism, saying this remains a “threat to global economic stabilization.”
“Uncertainty and more trade protectionism may negatively affect some of the region’s traditional strengths, such as open export-oriented markets,” the report read. — Elijah Joseph C. Tubayan

Philippine factory growth second-best in ASEAN

May 8, 2018 | 12:31 am

THE PHILIPPINES’ manufacturing activity improved last month but tied with Vietnam to take the second rank below Myanmar, according to an IHS Markit survey conducted for Nikkei.
The country logged a 52.7 Purchasing Managers Index (PMI) in April, a “solid increase” from the 51.5 recorded in March, to tie with Vietnam.
It was also above the 51 PMI average of seven select Association of Southeast Asian Nations (ASEAN) member-states, which was the highest level in a year, from 50.1 in the previous month.
Myanmar however had the highest reading that month at a “sharp increase” to 55.5. Both Indonesia and Singapore meanwhile saw a “modest increase” to 51.6 and 51.1 to rank third and fourth, respectively.
This was followed by Thailand’s 49.5 reading, a “marginal” decrease from the previous month, and Malaysia’s “modest decrease” to 48.6.

A PMI reading above 50 suggests improvement in business conditions compared to the previous month, while a score below that signals deterioration.
The manufacturing PMI is composed of five sub-indices, with new orders weighing 30%, followed by output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).
“Faster rises in new orders and output, and a renewed increase in employment, all boosted the headline index. However, inventories of inputs continued to decline,” the report read.
It said both Vietnam and the Philippines saw “faster improvements in operating conditions.”
However, it noted that Philippine manufacturers faced higher costs, which led them to raise their selling prices “to help protect profit margins, with the country registering the steepest rate of charge inflation.
The economy saw a 4.5% headline inflation rate last month, the fastest pace in over five years, Philippine Statistics Authority data showed, with the four-month average at 4.1%.
Nikkei’s Philippine PMI report for April released last week showed manufacturers paid higher prices for fuel, industrial metal, sugar, and paper due to a weaker peso-dollar exchange rate and the new excise taxes introduced in January.
Republic Act No. 10963 — or the Tax Reform for Acceleration and Inclusion (TRAIN) — reduced personal income taxes and estate and donors tax rates, but removed some value-added tax exemptions; hiked excise tax rates for automobiles, minerals, tobacco and fuel; as well as imposed new excise levies on sugar-sweetened beverages, among others.
IHS Markit Principal Economist Bernard Aw said although faster rises in output and new orders boosted the ASEAN manufacturing sector, “demand needs to grow at a faster rate before stronger growth can take root.”
“First, sales are not increasing fast enough to test the capacity of manufacturers across the region. Backlogs of work continued to fall, which weighed on hiring, suggesting that future job creation may be limited. Second, firms remained cautious about inventory management despite the pick-up in orders. Inventories of both inputs and finished goods continued to be depleted. Third, while business confidence remained positive, optimism was among the lowest in the survey history,” he said.
The Philippine report however noted that factory activity saw faster rises in both output and new orders in the local and foreign front, and that business optimism “remained high.” — E.J.C. Tubayan

Gross reserves slip to $80.1 billion in April

May 8, 2018 | 12:30 am

GROSS international reserves (GIR) slid in April as lower gold valuations and the central bank’s intervention in the foreign exchange market drove the pile to a three-year low.
Dollar reserves dropped to $80.062 billion last month coming from $80.511 billion in March and the $82.015 billion level in April 2017, the Bangko Sentral ng Pilipinas (BSP) said yesterday. The stash is also the lowest level since December 2014’s $79.541 billion.
In a statement, the central bank said there was a decline in reserves as the government settled its foreign debt, coupled with the impact of lower gold prices in the international market.
As a result, the value of the central bank’s gold holdings slid to $8.251 billion from $8.375 billion in March, although better than the $7.933 billion recorded in April last year, data showed.
The BSP’s “tactical intervention” in the foreign exchange market also fed into the reserve stash, with the monetary authority using the funds to temper sharp swings during the daily peso-dollar trading sessions.
The central bank’s foreign currency holdings amounted to $5.372 billion, lower than the $5.542 billion tallied a month ago. This was after the peso returned to the P52 level against the greenback to average P52.0986 that month, coming from March’s P52.0676 level.
Offsetting these adjustments was the steady stream of income from the BSP’s offshore investments, as well as higher net foreign currency deposits held by the government.
Foreign investment gains reached $64.78 billion to account for the bulk of reserves, albeit lower compared to March’s $64.931 billion and the $68.88 billion tallied the previous year.
Meanwhile, reserves maintained under the International Monetary Fund (IMF) were trimmed to $424.7 million in April from $430.1 million a month ago. Special drawing rights, or the amount which the Philippines can tap under the IMF’s reserve currency basket, remained at $1.234 billion.
Although declining, the latest GIR level still meets the $80 billion expected by the BSP by yearend. If realized, this will be lower than the $81.57 billion stash in December 2017.
Despite the decline, the central bank said reserves can comfortably cover up to 5.5 times the country’s short-term external debt and 4.1 times when computed on residual terms.
“At this level, the GIR nonetheless serves as an ample external liquidity buffer and is equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income,” the BSP said. This ratio is well above the three-month international standard.
International reserves are composed of gold, the BSP’s assets expressed in foreign currencies, country quotas with the IMF, and foreign currency deposits held by government and state-run firms. These stand as buffers against external financial shocks and are considered by credit raters as a source of strength for the local economy.
One analyst previously flagged the need to build up the country’s reserves further in anticipation of increased demand for dollars. However, BSP Deputy Governor Diwa C. Guinigundo has said the current level remains “very comfortable,” adding that buying more dollars could exert additional inflation pressures. — Melissa Luz T. Lopez