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EEI acquires biotech company

EEI Corp. said on Friday it will buy majority stake in Biotech JP Corp. as part of efforts to diversify its business.
In a disclosure to the stock exchange, the listed construction firm said it will acquire 60% equity stake in the Philippine unit of Niigata-based Biotech Japan Corp.
“This investment is in line with the Corporation’s diversification strategy and contribution to the sustainability goals of the country,” it said, without disclosing the amount of the equity investment.
Biotech JP’s primary business is the production of food products using Japanese patented bacteria biotechnology for the preservation and packaging of rice.
Among the company’s off-the-shelf rice products are protein rice, pre-cooked packed rice, calorie reduced pre-cooked rice, and ready-to-eat rice.
“Biotech also has patented bacteria biotechnology for increasing yields of rice plants while eliminating the use of phosphate based fertilizers which pollute farmlands and bodies of water,” EEI added.
For the first nine months of the year, the Yuchengco-led EEI reported its net income attributable to parent stood at P690.3 million, up 36% from P507.3 million a year ago. This was on the back of 50% rise in consolidated revenues to P15.9 billion, mainly from domestic construction projects.
The Yuchengco group that leads the construction firm also has businesses in real estate (EEI Realty Corp.), energy (PetroEnergy Resources Corp.), manpower services (Gulf Asia Manpower Services, Inc.) and sale of goods (Equipment Engineers, Inc.). — Denise A. Valdez

EasyCall invests in TDG Ventures

EasyCall Communications Philippines, Inc. (ECP) has invested P45.09 million in TDG Ventures, Inc. (TVI), as it looks to benefit from the company’s positive cash flows.
In a disclosure to the stock exchange on Friday, the listed firm said its board of directors has approved its investment in TVI consisting of 200,000 common shares at P225.47 each. The price is based on TVI’s book value as per its 2017 audited financial statement.
With this, ECP will have an 11.76% stake in TVI.
“Acquisition of ECP of 11.76% is synergistic to the business of ECP and allows ECP to benefit from the positive cash flows of TVI,” the company said.
TVI is the majority shareholder of ECP, holding 82.68%. The company also operates as the holding firm for Transnational Diversified Group (TDG)’s information and communications technology services, lifestyle, and travel businesses.
Founded in 1976, TDG also has investments in logistics, ship management, securities trading, real estate development, renewable energy, and other supplemental businesses, according to its website.
Shares in ECP jumped 49.90% or P2.62 to close at P7.87 each at the stock exchange on Friday. — Arra B. Francia

Metrobank reopens two-year bond offering

METROPOLITAN Bank & Trust Co. (Metrobank) is looking to raise an additional P5 billion through another tranche of fixed-rate bonds, following a fresh offering earlier this month.
In a disclosure on Friday, the Ty-led lender said they will be reopening bids for two-year bonds to investors as they are eyeing to maximize the strong demand from their offering which ended early November.
“Metrobank will reopen to the public its existing P10 billion two-year 7.15% fixed rate bonds due 2020 issued on November 9, 2018 and currently listed on PDEx (Philippine Dealing and Exchange Corp.),” the bank told the Philippine Stock Exchange.
Investors may tap the fresh bond float, which will be issued on Dec. 17, from Nov. 28 to Dec. 7.
This follows Metrobank’s issued bonds which were listed on Nov. 9. From an initial P2-billion target, the bank upsized its issue size to P10 billion as ordered reached as much as P19.635 billion.
The bank is the first to avail of new rules released by the Bangko Sentral ng Pilipinas, which allows lenders to tap the capital markets via bond floats without securing prior regulatory approval.
These form part of the lender’s P100-billion fundraising program via bonds and commercial papers.
Standard Chartered Bank acted as the sole arranger, selling agent and market maker for the transaction. Metrobank and First Metro Investment Corp. were also selling agents, while Union Bank of the Philippines was another market maker.
In October, Metrobank also raised P8.68 billion from offering long-term negotiable certificates of deposit. The notes will mature in 5.5 years and carry a 5.375% rate, to be paid quarterly.
Metrobank saw its net income surge to P5.7 billion in the third quarter, 55% higher from a year ago.
Shares in Metrobank closed at P72.10 on Friday, 0.14% higher from the previous day. — Melissa Luz T. Lopez

UCPB income slips in first nine months

By Melissa Luz T. Lopez, Senior Reporter
THE United Coconut Planters Bank (UCPB) saw its net income slip as of the third quarter as it reeled from lower trading gains and higher borrowing costs.
The state-owned bank reported a P2.91 billion profit for the first nine months, 4% lower than the P3.031 billion it made during the comparable period in 2017.
In a statement sent on Friday, UCPB attributed the lower income to rising interest rates that “affected the bank’s net interest margins,” which drove net interest income lower to P8.31 billion from P8.62 billion previously.
This came despite more upbeat lending activities, as the bank’s loan portfolio grew by 11% to reach P178.48 billion as of end-September. The expansion was largely driven by the consumer segment.
Benchmark interest rates have risen by 175 basis points after five straight rate hikes by the central bank, which were done to rein in price expectations as inflation surged beyond the 2-4% target set for 2018.
Non-interest revenues also slipped to P1.82 billion compared to P1.86 billion previously due to weak trading gains, particularly from fixed income securities. On the other hand, the bank posted higher collections from service charges, fees, bancassurance commissions and foreign exchange fluctuations.
UCPB has been cross-selling insurance products from its sister firms United Coconut Planters Life Assurance Corp. and UCPB General Insurance Co. since April last year, which have “significantly increased” compared to a year ago.
UCPB President and Chief Executive Officer Higinio O. Macadaeg, Jr. said he expects the current “challenging environment” to persist until 2019, but identified specific business segments which are expected to help sustain expansion.
“[W]e will focus on businesses where we are particularly strong such as consumer lending, especially the real estate segment, and bancassurance, which stand to grow with the continued expansion of the bank’s consumer loan portfolio.” Mr. Macadaeg was quoted as saying in the statement.
In January, Mr. Macadaeg said they were looking at a 15-20% profit growth this 2018. Last year, the bank saw a P4.08-billion bottom line which grew by 22% from 2016.
He added that the lender will also set aside more funds to cover more potential loan losses, as the bank looks to grant more credit lines.
The government’s 10-year financial support to UCPB for its financial rehabilitation program expires this year, and Finance Secretary Carlos G. Dominguez III has said that the government is not keen on extending the aid.

Peso declines further on Fed hike concerns

THE PESO weakened further on Friday as players covered their short dollar positions anew, while lingering uncertainties over rate hikes in the United States continued to spook investors.
The local unit closed at P52.45 versus the greenback, four centavos weaker than the P52.41 finish on Thursday.
The peso opened stronger at P52.35 and even touched P52.32 as its best showing within the day. However, the currency hit a low of P52.485 against the dollar before settling at the closing rate.
One trader said the local unit may be consolidating, as players are taking advantage of the recent appreciation in the exchange rate by covering their dollar requirements.
The trader noted that volumes traded on Friday may have been affected by the Thanksgiving holiday in the US. Markets were closed for the annual American celebration.
Some $655.24 million exchanged hands during the session, lower than the $914.63 million traded on Thursday.
Another trader also noted that the peso likely reeled from negative sentiment among global players, driven by worries offshore.
“The peso slightly depreciated due to risk-off sentiment amid uncertainties on global geopolitical concerns and lingering indecisiveness to the future monetary policy path of the US Federal Reserve next year,” the second trader said.
Reuters reported that market watchers are looking out for the upcoming meeting of United States and China on the sidelines of the G-20 sessions in Argentina, at a time of an escalating trade war between the two biggest economies which saw an exchange of tariffs on key commodity imports.
The peso has since pared its losses as it is now down by 4.48% year-to-date versus a depreciation of above 8% over the past few months. — Melissa Luz T. Lopez

PHL shares return to 7300 level

By Arra B. Francia, Reporter
SHARES ended the week on a positive note, with foreign investors returning to the local bourse as US markets were closed for the Thanksgiving holiday.
The benchmark Philippine Stock Exchange index found itself back to the 7,300 level on Friday, after advancing 0.99% or 71.80 points to close at 7,340.18. The broader all shares index likewise gained 0.78% or 33.95 points to 4,409.23.
“Investors took advantage of minimal developments from the US to buy up the index constituents and end the week on a rather positive note. This was despite rather slow news from other markets,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.
Financial markets were closed in the United States for the Thanksgiving holiday.
Asian indices ended mixed, weighed down by the trade war between the US and China. Chinese officials said on Friday that mutual respect will be key when US President Donald J. Trump and Chinese President Xi Jinping meet at the G20 Summit in Argentina, adding that they look forward to the meeting “being held smoothly.”
Meanwhile, P2P Trade Online Sales Associate Gabriel Jose F. Perez attributed the stock market’s positive performance to higher net foreign selling figure of P9.48 billion, including the P9-billion block sale in Robinsons Retail Holdings, Inc. (RRHI).
The block sale in RRHI was due to the completion of its P18-billion share swap transaction to acquire 100% of Rustan Supercenters, Inc from Mulgrave Corporation B.V. (MCBV). MCBV is a wholly-owned unit of Dairy Farm International Holdings, Ltd. Group of Companies.
The acquisition is in line with RRHI’s plan to partner with Dairy Farm to establish a food retail business.
Without RRHI’s block sale, net foreign inflows would have stood at P437 million, according to Mr. Perez, still higher than the previous session’s P224.06 million net purchases.
“With the index’s strong close today, it’s effectively broken out of its recent sideways channel,” Mr. Perez said in an email.
All sectoral indices moved to green territory locally, with the property counter logging the most gains at 2.36% or 82.25 points to 3,574.16. Mining and oil surged 1.83% or 150.68 points to 8,372.96, followed by financials which rose 1.75% or 29.91 points to 1,739.19. Industrial climbed 0.62% or 66.88 points to 10,783.64; services went up 0.45% or 6.19 points to 1,398.47; while holding firms added 0.008% or 0.57 points to 7,149.59.
Some 920.71 million issues switched hands valued at P14.77 billion, swelling from the previous session’s P5.4 billion.
Advancers trumped decliners, 108 to 74, while 46 names remained unchanged.

From the Front Page: Local economy back on track to lead region

With inflation finally easing, the Philippines remains on track to maintain its lead as one of the fastest-growing economies in the region, a new report from Moody’s Analytics finds. Provided that overheating risks are contained, the nation’s gross domestic product is projected to grow at a strong 6 to 7 percent in the coming years.
The banking sector is also projected to remain “stable” over the coming year, with an ample capital base and strong loan growth. Despite shifting economic environments over the years, the industry has maintained a “stable” outlook from Moody’s Investors Service since 2015.
The Philippines ranked fourth among 55 nations in terms of financial inclusion, leading Asia and trailing only three other countries in the world. The 2018 Global Microscope of the Economist Intelligence Unit (EIU) cited recent BSP reforms that have allowed non-banks to offer more financial services, opening up more avenues for money transfers and payments.
Meanwhile, the House of Representatives approved a general tax amnesty act designed to expand the country’s tax base by bringing more tax delinquents into the fold. This is expected to add P114.8 billion in revenues to the nation’s coffers. The House Ways and Means Committee also approved a tax reform proposal to raise the excise tax of various alcohol products.
The Philippines returns to the renminbi-denominated Chinese debt market with the signing of a memorandum of understanding on “panda” bond issuance by Finance Secretary Carlos G. Dominguez III and Bank of China (BoC) chairman Chen Siqing. This was among the 29 agreements signed during the first day of China President Xi Jinping’s two-day state visit to Manila on Tuesday.

L’Oréal Philippines relaunches grant for Filipino women in science

This November, L’Oréal Philippines and UNESCO once again opens nominations for its For Women in Science program to PhD holders among the Filipino women researcher and scientist communities. Nominations will be accepted this month up until the end of March 2019. A grant of P400,000 will be given to the National Fellow to be awarded on June 2019.
Established in 1998, FWIS aims to support and recognize women researchers who have dedicated their work in finding solutions to the some of the world’s most pressing challenges, as well as encourage young women to take the first step in changing the world through their exceptional ability in the field of science and technology.
“We want to ensure that research in every field takes full advantage of the intelligence, creativity, and passion of women,” said Carmel Valencia, L’Oréal Philippines’ corporate communications manager. “Our fundamental belief is that the world needs science and science needs women, because women in science have the power to change the world.”
Over the last 20 years, the program:

  • granted fellowships to 3,022 talented young women to pursue research projects
  • honored 102 laureates, including three eventual Nobel Prize winners
  • established 53 national and regional fellowships in 117 countries
  • partnered with over 50 scientific institutions and 400 scientists worldwide

L’Oréal Philippines celebrated the return of the program in the country last June 5 through the awarding of the newest FWIS National Fellow for the Philippines: chemical oceanographer Dr. Charissa Ferrera. Her work focuses on educating and advocating for water quality improvement and more sustainable practices in the waters of Anda and Bolinao. Five months after winning the program, Ferrera continues to work alongside science communicators, social scientists, and local government units to improve the fisherfolks’ environment and their livelihood.
“The program provided me with a truly great opportunity to take my research, apply it in communities where it will be most useful in, and create social impact – something that I have always strived to do as a scientist,” Ferrera said. “It was also a chance to raise awareness and inspire more individuals to pursue careers in science.”
L’Oréal Philippines and UNESCO both believe that continuing the conversation and shedding light on roadblocks for women in this field are essential to truly move the needle towards closing the gender gap in the sciences.
“In 2018, we embarked on this journey with L’Oréal Philippines to provide Filipino women researchers and scientists a platform to overcome the challenges they face in the field,” said Prof. Shahbaz Khan, director and representative of UNESCO Jakarta. “In 2019, we want to continue the journey and include more stakeholders in the conversation to be able to inspire development and purposive action towards enabling women to be leaders in science.”

Fitch Solutions: Duterte’s pivot has risks

MANILA’s warming ties with Beijing will likely yield economic benefits “in the near term,” but risks lurk behind such pivot especially if executed to the exclusion of the Philippines’ traditional economic partners in the West, Fitch Solutions said in a Nov. 21 note e-mailed to journalists on Thursday.
“We at Fitch Solutions expect bilateral ties and economic cooperation between China and the Philippines to deepen further over the coming years,” the note read, citing the government’s P8-trillion “Build, Build, Build” infrastructure development program as well as export of goods and services as China shifts towards a consumption-driven economy as sources of benefits for the Philippines.
President Rodrigo R. Duterte touted his “separation” from Washington in a speech during his visit to Beijing in October 2016 and has railed against the European Union for its criticism of his bloody war on the narcotics trade.
His administration has refused to remind China of the Philippines’ July 2016 legal victory in The Hague, involving an arbitration ruling that invalidated Beijing’s vaguely defined “nine-dash line” used to back up its claim to much of the South China Sea.
Administration critics have said that the Philippines has since been short-changed for its conciliatory approach to China.
Among others, while Mr. Duterte in October 2016 received from China pledges for some $24 billion in investments and $9 billion worth of official development assistance, only a small percentage of these pledges has so far materialized nearly halfway through the president’s six-year term that ends in mid-2022.
Loan agreements which the Duterte government has so far signed with China include $62.09 million for the Chico River Pump Irrigation Project in northern Luzon and $232.5 million for the New Centennial Water Source Kaliwa Dam Project in Rizal which is designed to add to Metro Manila’s water supply.
Chinese President Xi Jinping’s Nov. 20-21 state visit to the Philippines seemed designed to make up for the slow progress in these pledges, as it was highlighted by the signing of 29 bilateral deals — most of which turned out to be in broad strokes.
“… [T]here is little to show for the Philippines’ conciliatory approach as out of 38 Philippine projects earmarked for Chinese involvement two years ago, only four were among the commitments made on Nov. 20,” Fitch noted.
It went further by warning of dangers ahead should the Philippines become overdependent on China.
“… [W]e caution that while Beijing’s economic largesse would be supportive of the Philippines’ economic growth in the near term, the Chinese economy is also struggling to sustain its growth momentum amid rising trade tensions with the US,” Fitch Solutions said further.
“A pivot towards Beijing at the expense of a relationship with the West poses downside risks to growth sustainability in the event that Chinese financing dries up,” it warned.
“In addition, a flare-up of tensions between both sides would damage economic cooperation and could see China pull out of infrastructure investments in the Philippines.”
In a separate Nov. 21 note, Fitch Solutions described the selection on Nov. 20 of a consortium formed by China Telecom, Dennis A. Uy’s Udenna Corp. and Chelsea Logistics Holdings Corp., as well as franchise holder Mindanao Islamic Telephone Company, Inc. (Mislatel) as the Philippines third major telecommunications service provider as “a clear sign of Duterte’s warming posture towards China.”
“The selection of China Telecom, which follows the almost immediate disqualification of the other two bidders, hints at the government’s bias towards Chinese involvement in the telecoms sector and is a clear sign of Duterte’s warming posture towards China,” Fitch Solutions said.
Mr. Duterte in December last year ordered state telecommunication authorities to speed up the entry of China Telecom to challenge incumbents PLDT, Inc. and Globe Telecom, Inc.
The Mislatel consortium won after its only two contenders were disqualified — Philippine Telegraph and Telephone Corp., over lack of proof for technical capability; and Sear Telecommunications, Inc., over the lack of a participation security worth P700 million.
But while “China Telecom would have been, from a technical perspective, the most feasible” choice as third major telecommunications provider “as the state-owned telco has the experience, scale and financial capability needed to disrupt the Philippines telecoms sector that is otherwise lacking in other contenders”, Fitch Solutions said the new industry player faces daunting barriers to entry.
“The lack of existing fiber assets gives the new telco an uphill task in a market that has maneuvered for years to keep new entrants out and has continuously undermined the supervisory power of the telecoms regulator,” the note read, adding that “it will have to offer very competitive pricing to grasp market share.” — E. J. C. Tubayan and D. A. Valdez

Philippines, Japan line up more projects for funding

MORE INFRASTRUCTURE projects funded by Japan advanced further in the pipeline after top economic officials from the Philippines and Japan exchanged notes during their meeting late Wednesday, while also identifying new prospects.
Philippine and Japanese officials held the 6th meeting of the Philippines-Japan High-Level Joint Committee on Infrastructure Development and Economic Cooperation in Manila on Wednesday evening where both sides signed and exchanged notes for a ¥37.905-billion, or $336.24 million, loan for the Pasig-Marikina River Channel Improvement Project Phase IV and another ¥167.199 billion, or $1.413 billion, for the first tranche of the North-South Commuter Railway (NSCR) Extension Project.
The Pasig-Marikina River Channel Improvement Project involves upgrading works along the stretch of the Upper Marikina River — from downstream of the Manggahan Floodway to the Marikina Bridge — as well as construction of the Marikina Control Gate Structure.
The 109-kilometer NSCR Extension Project, meanwhile, will extend the Malolos, Bulacan-Tutuban, Manila railway to Clark International Airport in the north and to Calamba, Laguna in the south. The system will have 58 eight-car trains, seven of which will be airport express trains, and a double-tracked elevated railway that will connect with other lines in Metro Manila.
The exchange of notes is done before the signing of loan agreements.
Manila and Tokyo also signed and exchanged bilateral documents for a Contract of General Consulting Service for the Metro Manila Subway Project Phase I between the Department of Transportation (DoTr) and a consortium of six Japanese firms and OC Global; and the joint venture agreement among the Bases Conversion and Development Authority (BCDA), Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN), and Surbana Jurong for the New Clark City.
Both sides committed to open the first three stations of the Metro Manila Subway by May 2022, inclusion of the Ninoy Aquino International Airport line extension in the detailed engineering design of the project and establishment of the Philippine Railway Institute by 2021.
Finance Secretary Carlos G. Dominguez III said in a briefing after the meeting that technical working groups will meet regularly to “address challenges for the railway projects.”
“The Japanese side requested the Philippine government to expedite measures such as land acquisition and relocation of utilities.”
Both sides also discussed the possibility of more Japanese ODA financing for “road construction and expansion projects in northern Luzon and Metro Manila, flood management and drainage improvements, and various components of the New Clark City project.”
Loan agreements signed by Japan and the Philippines since the committee met in March last year include: P11 billion for the Mega Manila Subway; P18.76 billion for the Metro Rail Transit-Line 3 (MRT-3) Rehabilitation program, P2.10 billion for the New Bohol Airport Construction and Sustainable Environmental Protection Project Phase 2, and the P4 billion for the Arterial Road Bypass Phase 3 project.
“The Philippines is already at the verge of graduating to the level where we will not qualify anymore for ODA for some countries. Our income per capita is rising, so while we are still here, I think it is best for us to take advantage of the long tenors and the relatively low interest rates because after a few years we will no longer be qualified for that. We will be considered a middle-income country, therefore, we will have to pay higher interest rates. So it makes sense for as to have these projects funded now rather than later,” Mr. Dominguez said.
Aside from Japan, the Philippines has attracted financing support from China, South Korea, Australia, New Zealand, Spain, the United States, the European Union and Canada. — Elijah Joseph C. Tubayan

Forum notes lack of awareness of growing cybersecurity threats

THE GROWING USE of digital technology has not been matched by adequate awareness of attendant threats, according to speakers at BusinessWorld’s first Cybersecurity Forum held at the Dusit Thani Manila in Makati City on Thursday.
National Privacy Commission Chairman Raymund E. Liboro opened the forum with latest official data showing reported data breaches in the Philippines have grown more than threefold to 834 in the 10 months to October period from 221 in full-year 2017.
On Monday, Kaspersky Lab separately reported that the Philippines remained among the top 10 targets of online attacks last quarter, with the number of reported malware incidents jumping more than fourfold to 8.1 million from 1.8 million a year ago.
“The potential now of creating harm… security incidents on individuals is not an exclusive domain of nation states and governments (anymore). Dati ganun eh, kasi sila lang ang may [It used to be that way because they were the only ones that have the] capacity to process data. Now, each of us has the potential to do good with… the data that you process, but you also have the capacity now to harm,” Mr. Liboro said.
He noted that while data breaches could be the result of targeted attacks by cybercriminals, they could also result from system glitches or human error.
“Cybersecurity must take a whole new meaning for everyone, especially since personal data is involved,” Mr. Liboro said.
Genalyn B. Macalinao, policy lead of the Cybersecurity Bureau of the Department of Information and Communications Technology, shared Mr. Liboro’s observation. She said that while automation and digitization do bring big benefits to companies, especially in terms of savings from labor costs, people should remember that increased connectivity comes with risks. “While there is convenience in that… there’s also a risk that comes with it, because anything that’s connected is hackable, anything that’s connected poses a risk,” she said.
Ms. Macalinao noted the government is doing its part to improve data security safeguards, starting with issuance of memorandum circulars that put in operation provisions of the National Cybersecurity Plan. This concern is particularly vital in the fields of banking, telecommunications, business process outsourcing, transportation, media, medical, transportation, water and energy utilities.
Her presentation was followed by Dominic “Doc” Ligot, founder and chief technology officer of CirroLytix Research Services, who discussed the ethical aspect that comes with handling big data. Mr. Ligot said even if companies were compliant with the Data Privacy Act, such laws cannot cover all possible forms of misuse of data.
“Data privacy is not the problem, it’s the symptom. The fundamental problem is the misuse of data,” he said.
“Compliance (with the Data Privacy Act) is a reaction… But ethics is more proactive. We have to create ethical companies.” — D. A. Valdez

Global growth headed for fragile soft landing

PARIS — Trade tensions and higher interest rates are slowing the global economy, though for now there are no signs of a sharp downturn, the OECD said on Wednesday, lowering its outlook for next year.
The Organization for Economic Cooperation and Development (OECD) forecast that global growth would slow from 3.7% this year to 3.5% in 2019 and 2020.
It had previously projected 3.7% for 2019.
The global growth slowdown would be worst in non-OECD countries, with many emerging-market economies likely to see capital outflows as the US Federal Reserve gradually raised interest rates.
The OECD cut its outlook for countries at risk such as Brazil, Russia, Turkey and South Africa.
Rising interest rates could also spur financial markets to reconsider and thus reprice the risks to which investors are exposed, triggering a return to volatility, the OECD said.
“We’re returning to the long-term trend. We’re not expecting a hard landing, however, there’s a lot of risks. A soft landing is always difficult,” OECD chief economist Laurence Boone told Reuters in an interview.
“This time it is more challenging than usual because of the trade tensions and because of capital flows from emerging markets to countries normalizing monetary policy.”
A full-blown trade war and the resulting economic uncertainty could knock as much as 0.8% off global gross domestic product by 2021, the OECD calculated.
Though at the source of the current tensions, the US economy was expected to fare better than most other major economies, albeit because of costly fiscal stimulus.
SOFTER GROWTH IN US, CHINA
The OECD left its forecasts for the United States in 2018 and 2019 unchanged, projecting growth in the world’s biggest economy would slow from nearly three percent this year to slightly more than two percent in 2020 as the impact of tax cuts waned and higher tariffs added to business costs.
Trimming its outlook for China, the OECD forecast the country’s growth would slow from 6.6% to a 30-year low of six percent in 2020 as authorities tried to engineer a soft landing in the face of higher US tariffs.
The outlook for the euro area was also slightly darker than in September, with growth seen slipping from nearly two percent this year to 1.6% in 2020 despite loose monetary policy over the period.
The Italian economy was seen slowing more than previously expected despite the expansionary budget of the populist-led government that has created friction with Brussels.
The OECD forecast Italian growth at only one percent this year, lingering at 0.9% in 2019 and 2020, as stalled job creation and higher inflation eroded the boost from the budget stimulus.
In Britain, the OECD forecast growth would pick up from 1.3% this year to 1.4% in 2019, supported by a looser budget and up from an estimate of 1.2% in September.
However, after the fiscal boost peaked in 2019, growth would fall back to 1.1%, the OECD said, urging the government to be prepared to respond if the economy weakened significantly due to Brexit. — Reuters

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