ISM Communications Corp. is selling treasury shares to finance possible investments.
In a disclosure to the stock exchange on Wednesday, May 2, ISM said its board of directors approved the sale of 560 million treasury shares to wholly-owned subsidiary ISM Equities Corp. at a price of P1.00 per share.
“This transaction is meant to give ISM flexibility to restructure its capital position more easily to address potential investment opportunities,” the listed firm said. — Krista Angela M. Montealegre
Asian stocks drifted and the dollar retreated from a four-month high as investors digested the latest earnings reports and many markets reopened after holidays. US equity futures edged lower after a report the possibility of a subpoena has been raised for President Donald Trump in an ongoing special-counsel investigation.
Ten-year Treasury yields pushed higher, though remained below 3%, while risk-off assets such as the yen and gold advanced. Equities declined across the region, with the exception of Australia. Chinese stocks fell as traders returned after a two-day holiday. Wednesday is the only day this week when all the region’s markets trade.
Investors and traders have once again become preoccupied by the political situation in Washington. Prosecutors working for Robert Mueller have made clear to Trump’s legal team that the special counsel would consider a subpoena compelling the president to testify before a grand jury if he refuses to participate in a voluntary interview. Market focus is also turning to the Federal Reserve meeting. Investors will watch closely for any signals that policy makers will raise interest rates another three times this year.
Elsewhere, oil pared losses after an industry report showed U.S. crude stockpiles rose by more than expected last week. Apple Inc. gained in after-hours trading after the iPhone maker’s results.
These are some key events to watch this week:
The Federal Open Market Committee ends its two-day meeting Wednesday. Payroll gains in the U.S. probably picked up in April, with the unemployment rate forecast to drop to 4 percent, according to surveys of economists. Earnings season continues with HSBC Holdings Plc and Tesla Inc.
And these are the main moves in markets: Stocks
Topix index dipped 0.2 percent as of 1 p.m. in Tokyo. Kospi index fell 0.3 percent. Australia’s S&P/ASX 200 Index rose 0.6 percent. Hang Seng Index was down 0.6 percent. Shanghai Composite Index lost 0.4 percent. Futures on the S&P 500 Index fell 0.1 percent. MSCI Asia Pacific Index fell 0.2 percent. Currencies
The Bloomberg Dollar Spot Index fell 0.1 percent. The Japanese yen rose 0.1 percent to 109.73 per dollar. The euro rose 0.1 percent to $1.2004. The Australian dollar gained 0.2 percent to 75.02 U.S. cents after dropping to the lowest since June. Bonds
The yield on 10-year Treasuries rose one basis point to 2.98 percent. Japan’s 10-year yield fell less than one basis point to 0.039 percent. Australia’s 10-year yield gained three basis points to 2.79 percent. Commodities
West Texas Intermediate crude rose 0.4 percent to $67.52 a barrel. Gold rose 0.5 percent to $1,310.70 an ounce. LME copper gained 1.2 percent to $6,827.00 per metric ton. — Bloomberg
8990 Holdings, Inc. delivered a double-digit growth in income last year on the back of higher revenues and improved margins.
In a disclosure to the stock exchange, the mass housing developer reported that consolidated net income grew 16% year on year to P4.14 billion from the P3.58 billion in 2016. — Krista Angela M. Montealegre
Cooperation and information sharing in the financial system are crucial in enhancing the sector’s resilience from cybersecurity threats, the Bangko Sentral ng Pilipinas (BSP) said.
In an executive forum organized by Maybank Philippines, Inc., BSP Deputy Governor Chuchi G. Fonacier said cooperation within the financial system is integral to shield itself from threats posed in the digital space.
“Beyond merely enforcing compliance, cooperation and collaboration engagements among relevant stakeholders, which include fellow regulators, the banking industry as well as relevant state agencies, lay a critical role in enhancing the financial system’s cyber-resilience,” she said in a keynote speech. — Karl Angelo N. Vidal
By Mah Siew Keong
Malaysia is an open economy which has benefited significantly from inward foreign direct investments (FDI) into the country, resulting in the creation of new jobs, stellar economic growth, as well as driving valuable technology and skills transfer.
Malaysia’s business friendly policies have been successful in attracting investment in the country over the decades from thriving economic centers such as Singapore, Hong Kong, China, Japan, Arab Saudi, US and UK, among others.
In the past, the rise of Japan in the 1980s resulted in large Japanese investments into Malaysia. Back then, Japanese investments were associated with a ‘flying geese’ pattern, a concept introduced by Japanese scholars describing a leader goose which is Japan, leading the rest of the Asian economies in formation.
Today, this pattern might still hold, but with China potentially taking over the role of the lead goose by investing in Asia as well as the rest of the world. Malaysia benefiting from China’s investments, beneficiary of BRI
In the above context, the rising tide of China’s investments in Malaysia has become a hot topic in the media, sparking much debate among industry commentators and politicians alike. Chinese investmentshave beenunfairly judged as a new phenomenon here when in reality it has been a carefully planned strategy over decades in making.
Malaysia was the first country in ASEAN to establish diplomatic relations with China through the efforts of the second Prime Minister, Tun Abdul Razak Hussein. For over 40 years, both countries have mutually benefited from their strengthened diplomatic relations.
Malaysia-China economic relations further intensified over the last decade, helped by China’s accession into the World Trade Organisation in 2001.
This has been a mutually beneficial relationship. With China being the world’s second-largest economy, it certainly is a very big market for Malaysian companies to tap into.
Likewise, Malaysia too will stand to benefit as China expands its massive Belt and Road Initiative (BRI) in the region.
The country will gain good advantage from the connectivity between the two countries, with the main focus on the reduction of barriers for international relations, and improving the air, land and sea infrastructures.
It is unfortunate that over-politicisation and misinformation have come to define the discourse on Chinese investments in Malaysia.
Chinese approved foreign direct investments (FDI) into Malaysia’s manufacturing sector grew from RM0.6 billion in 2010 to RM3.85 billion in 2017. So, the notion that China is only interested in infrastructure-led investments is unfounded. Besides, China’s involvement in infrastructure projects in Malaysia is hardly new.
Since 1973, Japan International Cooperation Agency (JICA) provided Malaysia loans to many large critical infrastructure projects in the country such as the Kuala Lumpur International Airport, Port Klang Power Station Project and Pahang-Selangor Raw Water Transfer Project. Likewise, the Asian Development Bank provided loans for the Bintulu Deep Water Port of USD53.8 million back in 1979. The World Bank also offered financing in a number of power, water and port-related infrastructure projects throughout Malaysia during the premiership of Dr. Mahathir Mohamad.
But one must remember that in November 2016 alone, Malaysia signed more than 10 Memorandum of Understandings (MoUs) and other agreements with global partners worth over RM144 billion, followed by even more multi-billion Ringgit MoUs in the following year.
In other words, Chinese investments into Malaysia in cumulative terms are only a fraction when compared with investments from other countries. Without counting for present value, investments coming from JICA alone is at least RM33 billion in total. The actual amount may go above and beyond that figure.
This is especially so because Chinese and other FDIs in Malaysia have been mostly greenfield.Greenfield FDI is when a foreign investor sets up new factories and facilities, creating more new jobs rather than just taking over existing Malaysian companies.
For example, FDI in manufacturing projects in 2016 are expected to generate more than 10,000 new jobs. Chinese steelmaker Alliance Steel alone is reported to create 3,500 jobs with 70 percent of them going to Malaysian workers. Fear-mongering detrimental to Malaysia’s growth path
These fear-mongering attitude towards FDI is detrimental to the Malaysian economy. It is also unfair to single out a particular country in reference to FDI in order to gain political mileage. The impact of creating such alarmist views and anti-trade approach will actually hurt local small and medium sized enterprises that are ultimate beneficiaries for trades and potential employment.
For instance, tech giant Huawei employs 2,300 staff in its Malaysia operations, with 75 percent of the jobs going to locals. Huawei also reportedly trains 20,000 engineers annually at its centre in Cyberjaya, whilst also facilitating ICT training for more than 10,000 teachers and students through joint programmes with numerous local universities.
Chinese investments in Malaysia will surely provide ample opportunities for technology and skills transfer and with its rising eminence on the global stage, Chinese investments in Malaysia will only continue to grow in the coming years.
Rather than parlay into negative sentiments, Malaysia must embrace these opportunities brought by Asia’s leading economy, much like how Japan did previously.Let us acknowledge the fact that Malaysia and her people have come to benefit and grow tremendously from these foreign investments and opportunities to expand our own economy and resulting livelihoods. Mah Siew Keong is the Minister of Plantation Industries and Commodities of Malaysia. Views expressed by the author in this article are his own and do not necessarily reflect the opinion of BusinessWorld and its owners.
San José, United States — Facebook chief Mark Zuckerberg announced Tuesday the world’s largest social network will soon include a new dating feature — while vowing to make privacy protection its top priority in the wake of the Cambridge Analytica scandal.
Zuckerberg unveiled the plans as he addressed Facebook’s annual F8 developers conference in San Jose, California — emphasizing that the focus would be on helping people find long-term partners.
“This is going to be for building real, long-term relationships, not just hookups,” Zuckerberg said in presenting the new feature, noting that one in three marriages in the United States start online — and that some 200 million Facebook users identify as being single.
Under the new feature, users will be able to create a separate “dating” profile not visible to their network of friends, with potential matches recommended based on dating preferences, points in common and mutual acquaintances.
It will be free of charge, in line with Facebook’s core offering. The announcement sent shares in the online dating giant Match.com tumbling, finishing the formal trading day down 22%.
The 33-year-old CEO also said the dating offer was built from the ground up with privacy and safety in mind, as he underscored the firm’s commitment to boosting privacy protections.
Facebook’s closely-watched developer conference comes as the giant faces intense global scrutiny over the mass harvesting of personal data by Cambridge Analytica, a British political consultancy that worked for Donald Trump’s 2016 election campaign.
Facebook has admitted up to 87 million users may have had their data hijacked in the scandal, which saw Zuckerberg grilled at length by the US Congress last month.
“We need to make sure that never happens again,” Zuckerberg told the audience, lightening the talk by sharing that friends made on online streaming video watch party at the social network of his hours testifying before Congress. — AFP
Philippines’ manufacturing activity improved in April as output and new orders picked up the pace on both the local and foreign fronts even as inflation remains elevated, according to an IHS Markit survey conducted for Nikkei.
The Nikkei Philippines Manufacturing Purchasing Managers’ Index rose to 52.7 in April from 51.5 in March to be the highest level for the year.
“The recent upturn of the Philippines manufacturing sector was lifted by strengthening demand conditions at the start of the second quarter. Order book growth accelerated noticeably to a four-month high, which was accompanied by faster output expansion,” Nikkei said in its report.
“As a result, Filipino goods producers raised employment levels and scaled up purchasing activity. Inventories also increased, though supply chains came under pressure. Optimism remained high, as did inflationary pressures,” it added.
It noted that domestic client demand was the fastest since December, while orders from abroad was the highest in 16 months.
Nikkei said that overall inout costs rose over higher prices paid for fuel, industrial metal, sugar and paper, as well as a weaker exchange rate and the new excise taxes also pushed input prices higher.
Republic Act No. 10963 — or the Tax Reform for Acceleration and Inclusion (TRAIN) — took effect on Jan. 1, which reduced personal income, 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 and cosmetic procedures.
“As a consequence, the rate of inflation remained sharp and well above its historical average, though slower than the survey-record pace in March. In response, firms passed on higher costs to their clients by again raising selling prices. The pace of charge inflation was the second-fastest in the survey history,” the report read.
IHS Principal Economist Bernard Aw commented on the report, saying:“The Philippines manufacturing sector started the second quarter on a robust note with growth in both output and new orders strengthening. First quarter manufacturing expansion was affected by the January rollout of the new excise taxes, but April data suggests that demand has since adjusted to these higher levies.”
“However, higher excise taxes continued to be felt through the pricing mechanism. While easing from the survey-record rate in March, input cost inflation remained elevated, not least because of a weak exchange rate, supply shortages and suppliers’ price hikes. In most cases, firms were able to pass on some of the higher costs to their customers, but the pressure on profit margins remains marked,” he added.
“Overall, it’s clear that underlying demand has improved, partly supported by stronger export sales. With companies’ optimism remaining high, despite the dip in April, it looks likely that growth may well accelerate further in coming months.” — Elijah Joseph C. Tubayan
PRESIDENT Rodrigo R. Duterte has signed the much-anticipated executive order (EO) on job contractualization, a leading and contentious issue since his 2016 presidential campaign.
Mr. Duterte signed the order Tuesday morning at an event in Cebu City marking Labor Day and organized by the Department of Labor and Employment (DoLE) and other agencies.
Mr. Duterte in his speech said it includes a “prohibition against illegal contracting and subcontracting.”
He cited Section 2 on the “Prohibition Against Contracting or Subcontracting,” as also subtitled by the draft EO sent by the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP).
The draft, as sent by Alan A. Tanjusay, spokesperson of ALU-TUCP, read in part: “Contracting or subcontracting when undertaken to circumvent the worker’s rights to security of tenure, self-organization and collective bargaining and peaceful concerted activities pursuant to the 1987 Philippine Constitution is hereby strictly prohibited.”
Mr. Duterte read the same provision in his speech.
ALU-TUCP had also earlier sent the media the draft EOs that it attributed to DoLE and to business groups.
According to Labor Undersecretary Joel B. Maglunsod, Mr. Duterte had asked these stakeholders to submit their proposed EOs to the Palace.
ALU-TUCP’s draft order, regarding Section 2, also read: “Security of tenure refers to the right of employees not to be dismissed or removed without just or authorized cause and observance of procedural due process consistent with the constitution, labor code of the Philippines as amended, and prevailing jurisprudence. Security of tenure is hereby strengthened by the general norm of direct hiring.”
The draft EO by DoLE, according to ALU-TUCP, also referred to direct hiring. Mr. Duterte, however, did not cite any such provision in his speech.
Sought for comment, spokesperson Renato B. Magtubo of the Nagkaisa coalition which includes ALU-TUCP said, “The EO that was signed is a product of a consultation of DoLE with DTI (Department of Trade and Industry) and ECoP (Employers Confederation of the Philippines). Hence we call it a DoLE-DTI EO.”
Also sought for comment, Labor Undersecretary Jacinto V. Paras said about the EO: “It’s the version of the President which is a balance(d) version consistent with existing law and the (C)onstitution to attain industrial peace.”
Mr. Duterte in his speech also called anew for the passage of the congressional measure on security of tenure and reaffirmed DoLE’s lookout for companies suspected to be engaged in labor-only contracting.
Mr. Magtubo, for his part, replied via text when sought further for comment: “We felt [that] we are taken for a ride. There was no consultation with our 5th draft submitted to the OP (Office of the President) on April 13. The EO that was signed definitely is an EO for the employers, not for the workers. We will not waiver, we will continue to fight to give justice to workers affected by the widespread contractualization of labor.”
But he also said: “We expect the President to sign the fifth draft of the workers’ EO we have submitted to him last April 13 thru the labor secretary that would make direct hiring of workers to principal employers as a norm in employment relations of his administration but on the other hand would open some jobs or functions to labor contracting subject to consultations in the National Tripartite Industrial Peace Council.”
For his part, ECoP chairman Edgardo G. Lacson said in a press statement the order signed by Mr. Duterte is “a well-crafted EO that balances the welfare of labor and allows legal contractual employment which is a globally accepted form of work arrangement.”
“Endo or 5-5-5 is an illegal practice which the tripartite partners(,) government labor, and capital(,) will jointly stop through aggressive enforcement of the law. To a great extent, under the government of President Duterte, we can say Endo is fast dying if it is not dead in the water yet,” Mr. Lacson added.
ECoP president Donald G. Dee for his part said, “We will just make clear our understanding of this EO. Hindi na kami mag-ke-question pa (We won’t have any further questions) because we want to move forward already.”
Also sought for comment via phone interview and text, Philippine Chamber of Commerce and Industry (PCCI) president Ma. Alegria Sibal-Limjoco said ECoP and PCCI “find worrisome the exact definition of security of tenure, among others, and the possible loose or abused rules of engagement in the enforcement of certain prohibitions.”
She also said the EO “is not really what businessmen want.”
“Government, though, must be credited in its serious and sincere effort to craft an EO that meets the expectations of both labor and capital,” Ms. Limjoco said.
“The EO is signed and despite our reservations… employers will live with it and comply,” she added. — Arjay L. Balinbin with Camille A. Aguinaldo and Janina C. Lim
THE Duterte government is looking to issue its first yen-denominated bonds by September or October, the Department of Finance (DoF) said.
“We will still go ahead with the samurai (bonds)… Because the Japanese calendar is different, it should be around September or October, the latter half of the (Japanese) fiscal year ending March,” Finance Secretary Carlos G. Dominguez III told reporters on Thursday.
National Treasurer Rosalia V. De Leon has said that the government is currently assessing the third currency exchange risk amid the strengthening of the dollar against the peso.
“Kasi meron siyang third currency risk, convert peso to dollar, dollar to yen. So we have to be able to manage the third currency risk,” Ms. De Leon said.
Mr. Dominguez said the plan to issue yen-denominated bonds will push through even as the Development Budget Coordination Committee (DBCC) raised its assumptions for the peso-dollar exchange rate to P50-53 this year until 2022 from P49-52 per dollar previously.
“I think our assumptions are based on solid evidence. We are planning on it, so far there is no indication on why we should not,” Mr. Dominguez said.
Aside from the samurai bonds, Deputy Treasurer Erwin D. Sta. Ana said that the Treasury bureau is also reviewing the possibility of another renminbi-denominated “panda bond” offer.
“We are continuing to study the market, and what’s happening there. The success of the last issuance… We got the tightest pricing possible,” Mr. Sta Ana said, although noting the second Panda bond offer would not be done within the year.
The Duterte administration on March 20 raised 1.46 billion renminbi fetching the low-end coupon rate of 5%, with tenders reaching a little over six times the offer size.
The government plans to borrow a total of P888.23 billion this year to plug its budget deficit that is capped at 3% of the country’s gross domestic product, or P523.7 billion.
The DBCC raised the share of foreign borrowings to 35% this year in a bid to diversify its financing base, from 26% earlier expected for this year and 20% in 2017.
The government seeks to spend about P8.4 trillion in infrastructure projects within its term in an effort to boost economic growth to 7-8% in 2022 from 6.7% recorded in 2017 and the 6.3% average logged in 2010-2015. — Elijah Joseph C. Tubayan
THE PHILIPPINES is shifting towards a fully digital era in which new opportunities and challenges emerge in almost all markets.
To examine the forces and realities of disruption and how it affects the nation’s economic growth, BusinessWorld will once again stage its economic forum on May 18 at the Grand Ballroom of Grand Hyatt Manila in Bonifacio Global City, Taguig City.
The BusinessWorld Economic Forum will tackle the theme “Disruptor or Disrupted? Philippines at the Crossroads,” as the country faces rapid changes caused by technological advancements.
The one-day forum will bring together industry leaders and key figures from private and public sectors to share their insights on key topics that are timely and relevant in promoting economic growth and technological advancement without overlooking the general welfare of the society.
Udenna Corporation Founder, Chairman and Chief Executive Officer (CEO) Dennis A. Uy will open the forum with a keynote speech about the biggest buzzword in business and perhaps the most feared phenomena by industry leaders today — disruption.
The first session on “Disruption: What Big Data is Already Predicting — or Warning — About Philippine Competitiveness” aims to discuss the importance of the Internet of Things (IoT) in an era of hyper-connectivity; and how mobile, digital and cloud technologies are reshaping not only consumer lifestyles but also how companies are conducting businesses.
Sharing their knowledge on the topic are Department of Information and Communications Technology Officer-in-Charge Eliseo M. Rio, Jr., McKinsey & Company Managing Partner Kristine Romano, and Professor at Department of Analytics, Information & Operations, Asian Institute of Management Dr. Erika Fille T. Legara.
The second session, “Artificial Intelligence, E-Commerce, Cashless Transactions: What New Consumer Expectations Mean for Businesses,” will discuss the current landscape of the banking and retail sectors, and the role of online platforms in engaging customers.
Bangko Sentral ng Pilipinas Managing Director Pia Bernadette Roman-Tayag, Union Bank of the Philippines President and CEO Edwin R. Bautista, Accenture, Inc. (Philippines) Country Managing Director Lito Tayag, and Adobomall Creator and CEO Walt Steven Young will share their thoughts about the topic during this session.
To discuss how companies can use technology in turning disruption into an opportunity for growth, and how the country can foster a sustainable startup community anchored on innovation, the third session will center on “Finding Opportunities in the Age of Disruption”.
To lead the discussion are Voyager Innovations President and CEO Orlando B. Vea, Mynt (Globe Fintech Innovations, Inc.) CEO Anthony Thomas, Grab Philippines Country Head Brian Cu, and Satoshi Citadel Industries Co-Founder and Chief Community Officer Miguel Cuneta.
The last session, which will focus on “The Next-Generation Boardroom”, aims to discuss the future of the workplace and how disruption would impact leadership and management.
Speakers for this session will be Aboitiz Power Corporation Executive Vice-President and Chief Operating Officer — Corporate Business Group Luis Miguel O. Aboitiz, Mobext Philippines Co-Founder and CEO Arthur Policarpio, and Vista Land & Lifescapes, Inc. Managing Director Camille A. Villar.
The BusinessWorld Economic Forum, organized by BusinessWorld Publishing Corporation, is held annually since 2016. It serves as a live platform for industry leaders and key figures in the society to discuss and solve key issues and challenges that affect the country.
The event is open to BusinessWorld subscribers, readers, and the public. To register, please visit www.www.bworldonline.com/bweconomicforum or call BusinessWorld marketing at 535-9901 local 707.
By Melissa Luz T. Lopez Senior Reporter
ASIAN ECONOMIES enjoy robust growth but need fresh approaches in order to provide better lives for all, the Asian Development Bank (ADB) said ahead of its annual meeting this week, with Manila’s infrastructure push and digitization boom capturing the region’s progress.
The ADB will gather leaders and experts at its headquarters in Mandaluyong for its 51st Annual Meeting on May 3-6, working around the theme “Linking People and Economies for Inclusive Development.”
Central to this year’s discussions is the crafting of the Strategy 2030, which will outline the multilateral lender’s long-term strategy for development for its 48 regional members and 19 other states.
“Asia is growing very fast and we should continue to have stronger policies,” ADB President Takehiko Nakao said in an April 11 interview with BusinessWorld.
ADB sees Developing Asia growing by 6% in 2018, sustaining the momentum seen over the past several years as the fastest-growing region in the world. Against this rosy growth momentum, pockets of poverty remain even in the more developed nations.
“We’ll discuss how we must continue to address the remaining poverty,” Mr. Nakao said. “There are issues like urbanization and aging, climate change, and there are more disasters in Asian countries — we should make our systems more resilient.”
TARGETING 2030
The ADB targets to engage delegates pegged at 3,000 in discussions for its Strategy 2030, which takes off from the current policy framework that factors in new global development agendas and expanding needs for Asia-Pacific amid a fast-changing and more diverse landscape.
Currently, the ADB draws direction from its Strategy 2020 agenda, although Mr. Nakao said that needs have morphed as more economies scale up as middle-income countries.
Embracing new technologies is a main theme of the ADB’s new strategy, taking stock of opportunities for financial inclusion and increased efficiency while also acknowledging risks, such as data privacy in a digitally-driven landscape.
The ADB has also allayed fears that technology and robotics will displace workers, instead pointing out that it will steer employment towards “more cognitive” and “unroutine” jobs.
Intellectual property rights also form part of the picture, Mr. Nakao said, which so happens to be the root of a trade dispute between the United States and China which has led to a showdown in import tariffs.
Among the remaining challenges in Asia are large infrastructure gaps and widening income inequality, given that around 330 million people still live in absolute poverty.
A ‘BETTER’ MANILA
The Philippines plays host to the ADB annual meeting after six years, with no less than Mr. Nakao pointing out the progress made here since then.
“I think it is generally becoming better and there are more middle class enjoying a better life. But one of the problems of the Philippines, of course, is there are many poor people in rural areas,” the ADB chief said, recalling his visit to Manila during the 2012 meetings as a former finance vice-minister.
Mr. Nakao then moved to the Philippine capital in 2013 to take the helm at ADB, which has been based in Manila since 1966.
The multilateral lender remains sanguine about the Philippines as they expect the economy to grow by 6.8% this year and 6.9% in 2019, coming from a 6.7% pace in 2017. This compares to the 7-8% annual growth goal of the Duterte administration, with poverty incidence seen dropping to 14% by 2022.
Investor appetite towards the Philippines is also “becoming better,” Mr. Nakao said, drawing optimism from a solid reform agenda of the government given a local infrastructure push, tax reform, and efforts to deepen the local capital market. Worsening traffic congestion, however, is a pressing problem.
“[T]here is no reason that we cannot be optimistic, positive about the future of the country… But once again, the investment in infrastructure, the investment in education, efforts to raise the living of poorer people is not just for fairness but will also raise the growth potential of the country if people enjoy better lives, they spend more, they educate their kids better — that is the basis of continued growth,” Mr. Nakao added.
The ADB has provided $1.08 billion in loans to the Philippines in 2017. Across Asia-Pacific, the ADB has extended over $250 billion in grants and loans over the last 50 years.
PRESIDENT Donald Trump says his trade actions may cause “a little pain” in the short term, and a new study shows US agricultural workers could be hurt the most.
The tariffs on $50 billion in Chinese imports that Trump has proposed, plus promised retaliatory duties by China, would reduce US gross domestic product by $2.9 billion and cost almost 134,000 US jobs, according to a study commissioned by the Consumer Technology Association and the National Retail Federation, which oppose the tariffs. That includes more than 67,000 jobs in agriculture.
States that Trump won in 2016 would lose about 77,500 positions, the study found.
As Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and other administration officials head to China this week for trade talks, the study shows the estimated impact on the American economy if the tariffs are imposed and a trade war ensues, the groups said.
“We must resolve this dispute without resorting to job-killing tariffs and retaliation,” National Retail Federation President and Chief Executive Officer Matthew Shay said in a statement.
The Trump administration has targeted more than 1,300 Chinese products, from televisions and backhoes to ingredients for insulin, for tariffs of 25% in response to complaints about China’s theft of intellectual property. THREATS
That prompted China to promise retaliatory duties on soybeans, aircraft and other products. Trump then ordered consideration of an additional $100 billion in tariffs that the administration hasn’t yet identified.
The study, completed by the Washington-based consulting firm Trade Partnership Worldwide LLC, estimated the effect on employment under different scenarios. The most probable scenario has the US imposing $50-billion tariffs with promised Chinese retaliation, according to the study.
Under that scenario, some sectors, including machinery and electronics manufacturing, would add jobs as reduced imports bolster US production, the study found. But for every job gained, more than four would be lost during the first years after tariffs were imposed as higher prices reduce consumer spending and farmers in particular are hammered by Chinese duties, the study said.
“Rising costs on farmers, manufacturers and service providers isn’t the answer,” Gary Shapiro, chief executive and president of the Consumer Technology Association, said in a statement. “It shows protectionism will weaken America.”
Ross and other administration officials have downplayed the effect of the tariffs on the US economy. Trump has acknowledged that American markets and farmers could face “a little pain” but that the country would be better off in the long term.
“Short term, you may have to take some problems,” Trump said during an April 28 rally in Michigan’s Washington Township. “Long term, you’re going to be so happy.”
That White House has to prove that assumption, said David French, senior vice-president of government relations at the National Retail Federation.
“Our view is that tariffs and trade wars are a measurable loser for the US economy,” French said.
The Retail Federation, Consumer Technology Association and other trade groups have been working together and separately to lobby the administration to strike a deal with China that avoids tariffs, and otherwise to exclude specific products from the list. Companies are making requests to have products removed or added, with a public hearing set for May 15 in Washington.
“The best thing we can all do is just try every avenue and eventually, something hopefully will stick,” said Sage Chandler, vice-president for international trade at the Consumer Technology Association.
While it’s a good sign the US is talking with China and it’s appropriate to address concerns about China’s trade practices, the administration’s proposed approach is not the answer, French said.
“It’s the methods, it’s the tactics, it’s the uncertainty, it’s the impact on our supply chains that we’re trying to communicate, and I’m just not convinced they’re listening at this point,” he said. — Bloomberg
