AYALA Land, Inc. (ALI) raised P8 billion from the issuance of fixed rate bonds on Friday, which are expected to fund several mall, office, and hotel projects it has in the pipeline.
The property developer listed the bonds — due 2023 — at the Philippine Dealing and Exchange Corp. yesterday. With this, ALI has fully exhausted its three-year shelf registration program worth P50 billion filed with the Securities and Exchange Commission.
“We have completely exhausted the P50-billion shelf registration six months ahead of schedule, and what we would like to highlight is the fact that this has been very beneficial to Ayala Land, notable of which has been the speed to market,” ALI Chief Finance Officer Augusto Cesar D. Bengzon said during the listing ceremony for the bonds yesterday.
“Through the shelf registration, we have been able to issue tranches successively within an average of two months, which is a full month faster than what we have been able to do,” Mr. Bengzon said.
The bonds carry an interest rate of 7.0239% per annum, and were granted the highest credit rating — PRS Aaa — alongside a stable outlook by local debt watcher Philippine Ratings Services Corp.
Mr. Bengzon reported that after using up its shelf program, ALI has been able to fix up to 90% of its debt portfolio, which could help shield the company from the effects of rising interest rates.
“We have fixed up to 90% of our debt portfolio which should insulate us against the rising interest rates. We have secured up to 95% of our debt in stable term funding, we managed to source 60% of our debt from the capital markets, and we issued a variety of tenors ranging from as short as a year to as long as 20 years and this has allowed us to make our maturity towers quite manageable,” Mr. Bengzon explained.
ALI earlier disclosed that the funds raised from the issuance will be used to partially finance ALI’s pipeline of projects, specifically Seda Hotels Bay Area in Parañaque, Seda Hotels Bonifacio Global City expansion, leasing projects in Arca South, the Taguig Integrated Terminal Exchange, and the Vertis North Corporate Center Tower 3.
The company will also be funding projects outside Metro Manila, namely Ayala Malls Capitol Central in Bacolod, the Bacolod Capitol Corporate Center, and the Cebu Central Bloc mixed-use complex.
ALI’s issuance brought the total outstanding listed securities in the PDEX to P933.06 billion, from 149 securities of 47 companies. A total of P141.18 billion worth of securities have been listed for 2018 alone.
The listed property giant booked P13.5 billion in net income attributable to equity holders of the parent in the first six months of 2018, 18% higher as revenues likewise picked up by a fourth to P80.4 billion.
“We believe the market continues to be supportive of our plans and we will continue to exhibit the performance we have been doing for the rest of the year,” Mr. Bengzon said.
Shares in ALI climbed 1.04% or 40 centavos to close at P39 each at the stock exchange on Friday. — Arra B. Francia
CENTURY Properties Group, Inc. (CPG) has pre-sold 342 vacation homes worth P2 billion in its residential tourism estate in Nasugbu, Batangas, more than nine months after it was unveiled to the market.
In a statement issued Friday, CPG said its leisure, tourism, and hospitality unit Century Properties Leisure and Hospitality, Inc. (CPLHI) has pre-sold 342 vacation homes in Batulao Artscapes. The 142-hectare estate seeks to capture local end-users looking for a weekend retreat, as well as families and retirees in search of secondary homes near Metro Manila.
Dubbed as an “artventure community,” the entire property will feature houses designed by Filipino and international designers such as Ed Calma, Kenneth Cobonpue, Budji Layug, and Royal Pineda, Daphne Guiness, and Studio Libeskind Design.
“We are excited to bring something that combines art, nature and adventure into this beautiful out-of-town property. We are optimistic of the market’s continuous positive response to the project given the expanding middle class and surge of domestic tourism in the Philippines,” CPLHI President Tim Hallett said in a statement.
The first 36 hectares of the project will offer around 2,000 homes. Mr. Hallett earlier said that they will also be launching the second phase of the project consisting of 1,700 homes, which is expected to bring in P13 billion in pre-sales for the company.
Batulao Artscapes will house amenities such as a man-made beach with a clubhouse and a lake with a wedding chapel. The company also expects to lure in tourists in the property through a sports park, a “flavor” park, and an art park with museums designed by Pritzker Prize-winning architects.
Property technology firm Revolution Precrafted will be supplying the homes for the estate.
CPG targets to deliver the first batch of homes in early 2019, with the entire project to be completed by 2021.
The Antonio-led property developer noted that it would take a 1.5 to two-hour drive to Batulao Artscapes from Makati City via four access points: Daang Hari Road towards the Nasugbu-Kaybiang Tunnel, the Star Tollway to Tanauan Exit, the South Luzon Expressway (SLEX), and Cavite Expressway (CAVITEX).
The company also said that the property will be less than an hour away from Tagaytay once the Cavite-Tagaytay-Batangas Expressway is completed by 2022.
CPG booked a net income of P490 million in the first six months of 2018, benefiting from a 40% increase in revenues to P4.7 billion during the period.
Shares in CPG gained 1.15% or 0.5 centavos to close at 44 centavos each at the Philippine Stock Exchange on Friday. — Arra B. Francia
E-COMMERCE site Lazada Philippines on Wednesday opened its first warehouse in Davao City — its third warehouse in the country — which is expected to speed up the delivery of items to online customers in the area.
The company said in a statement on Friday that the new facility along Diversion Road, Barangay Buhangin can send out 25,000 items to customers every day, and has a holding capacity of 250,000 items from brands like Apple, Samsung, Mac, L’Oreal, and Levis.
“Our new warehouse provides our sellers a distribution hub in a high-potential region, allowing Lazada to fulfill more orders from and to Mindanao faster and more efficiently,” Lazada eLogistics (LeL) Philippines chief executive officer Juan Pavez Spencer said in the statement.
The establishment of a new facility will enable their partners send out items to customers in three days, it said.
Lazada said the new warehouse is hoped to spur the growth of e-commerce in Mindanao, as almost 500 businesses from the region are currently with the online shopping platform. It noted that the warehouse in the south is expected to double the number of shipments to and from the region before the year ends.
“This is just the beginning of e-commerce… and Davao is part of this now,” Lazada Philippines chief executive officer Raymond N. Alimurung was quoted in the statement as saying.
Mr. Alimurung said last month that Lazada is looking to improve its logistics facilities to ensure faster delivery of goods. The company’s goal is to achieve next-day delivery of items in the whole country, similar to what its parent company, the Alibaba Group, aims for in China.
Aside from its warehouse in Davao, Lazada also has a 30,000 square meter (sq.m.) facility in Laguna and a 5,000 sq.m. hub in Cebu. — Denise A. Valdez
CHELSEA Logistics Holdings Corp. (CLC) added two new ships to grow the company’s fleet to 88 as part of its expansion program.
On Friday, the listed company inaugurated the M/T Chelsea Providence and M/V Salve Regina at the Manila North Harbour Port, the two vessels that CLC is preparing to operate.
CLC president and chief executive officer Chryss Alfonsus V. Damuy told reporters they invested $30 million to $35 million for the M/T Chelsea Providence and $13 million to $14 million for the M/V Salve Regina.
CLC said the M/T Chelsea Providence is its biggest registered vessel yet, a 183.3-meter long, medium-range oil tanker that has a holding capacity of 54 million liters of petroleum. The company aims to start deploying the ship within the month.
The M/V Salve Regina, meanwhile, is a roll-on, roll-off (RoRo) passenger vessel with a carrying capacity of 500 passengers and 41 vehicles. Mr. Damuy said it started its soft launch last week.
“In our efforts to provide better customer experience, safe and reliable journey, and convenient travel, the Chelsea Group has been investing in younger vessels and presently brand-new ones,” CLC founder and chairman Dennis A. Uy said in a statement.
The M/V Salve Regina passenger vessel will serve the route linking Batangas to Caticlan. Mr. Damuy said it is also eyed to help boost tourism in the country.
“With M/T Chelsea Providence, we hope to support local oil companies in the importation of various petroleum products and in ensuring a reliable supply of fuel for our growing economy,” he added.
CLC currently has a fleet of 16 tankers, 22 RoRo passenger vessels, 11 cargo vessels, 14 tugboats and one floating dock, operating across its units Chelsea Shipping, Starlite Ferries, Trans-Asia Shipping Lines, Inc. and Fortis Tugs. Meanwhile, the 2GO Group, Inc., has eight RoRo passenger vessels, five cargo vessels and 11 fastcrafts. — Denise A. Valdez
AVAILMENTS under the pension loan program of the Social Security System (SSS) reached over P100 million during the first month of implementation, the state-run firm said on Friday.
In a statement, the SSS said disbursements under the program reached P107.77 million as of Oct. 3, a month since the facility was announced in September.
A total of 4,341 pensioners secured fresh credit funding for their “short-term financial needs,” the state-run firm said.
The pension fund for private sector employees launched the loan program on Sept. 3 to respond to growing demand from senior citizens for cheap loans — particularly for emergency medical expenses — and steer them away from loan sharks and other informal lenders.
Pensioners can avail of a minimum loan equal to twice the amount of his/her basic monthly pension, while the ceiling is set at P32,000.
Qualified to apply for loans are retired SSS members aged 55 to 80 who have no outstanding loan balances or payables to the pension fund. The retiree must also have no advance pension under the SSS Calamity Package and should be receiving regular monthly pension for at least six months.
The SSS said their Diliman branch saw the biggest loan releases amounting to P17.87 million, followed by Cebu (P8.99 million), Bacolod (P7.26 million), Bacoor (P5.88 million), and Zamboanga (P4.99 million).
The loans will be charged a 10% interest rate per annum. The amount can be repaid within three, six, or 12 months to be deducted from their monthly pension payments. Deductions will start two months after the loan has been granted to the SSS member.
The SSS is awaiting approval on its proposal to raise contribution rates in order to preserve its fund life, which has been shortened following the P1,000 across-the-board increase in monthly pensions which took effect January last year.
SSS President and Chief Executive Officer Emmanuel F. Dooc wants to raise the monthly rate for members to 14% from 11% in order to make the pension fund last until 2044 from the current 2032.
Mr. Dooc has also cautioned that the signing into law of the 105-day maternity leave for working mothers would mean that the SSS needs to shell out an additional P4 billion every year just to accommodate the additional benefit. This would be on top of the P5.5-6 billion disbursed for maternity leaves every year. — Melissa Luz T. Lopez
THE Development Bank of the Philippines (DBP) extended a P3-billion loan to a Cebu-based contractor planning to build a commercial center in Mandaue City.
In a statement, the state-run lender said it has approved a P3-billion loan to Cebu Landmasters, Inc. (CLI), which will finance the construction of a mixed-use property called Astra Centre.
Located along A.S. Fortuna Street in Mandaue, Astra Centre will house a mall, office spaces, condominium units and a Radisson Red Hotel.
The credit line is also expected to boost the CLI’s working capital as the local developer takes on more projects, DBP said. The homegrown firm led by the Soberano family is also building the Davao Business Park in Mindanao.
Prior to this, DBP also signed a P1.525-billion financing deal with the provincial government of Cebu for the construction of a 20-storey office building.
Cebu Governor Hilario P. Davide III signed the loan agreement in May, which comes with a 10-year payment period with a fixed interest rate of 2.9%. The new building will serve as a one-stop shop for provincial offices and will come with “green” features like solar panels and an in-house waste and sewerage management facility.
DBP President and Chief Executive Officer Cecilia R. Borromeo said the lender is looking to “stimulate economic activity” in Cebu, which is touted as the most populous and richest province in the country. Cebu City is also the center of business activity in the Visayas.
Branded as the government’s infrastructure bank, DBP said they have also extended over P15 billion loans to construction firms building priority projects under the “Build, Build, Build” program of the Duterte administration.
The lender rolled out the Infrastructure Contractors Support program in July 2017 to provide special credit lines for contractors tapped by the national government to carry out big-ticket projects, particularly for the 75 major developments in the pipeline.
DBP’s loan portfolio grew by 18% to reach P250.59 billion during the first semester. Ms. Borromeo said more than half of the expansion may be attributed to infrastructure financing.
DBP, the eighth-biggest bank in the country, saw its net income grow 4% higher to P2.76 billion as of end-June compared to a year ago. — Melissa Luz T. Lopez
By Melissa Luz T. Lopez, Senior Reporter
THE peso recovered on Friday as market players reacted to a lower-than-expected inflation reading for September, which helped ease negative sentiment towards the local currency.
The local unit ended the week at P54.23 against the dollar, nine centavos stronger than the P54.32 close on Thursday. This is the peso’s strongest showing since Wednesday’s P54.18-per-dollar finish.
The peso opened at P54.30 versus the greenback, marking a mild rebound from the previous day’s rate. It briefly touched P54.33 as its intraday peak but also settled at P54.23 as its best performance until market close.
Sought for comment, two traders attributed the rebound of the peso to positive market response following a 6.7% inflation rate in September.
“The peso strengthened following the release of softer-than-expected September headline inflation reading today,” one trader said via e-mail.
The latest inflation print settled lower than market expectations of a 6.8% inflation for the month, but still climbed to a fresh nine-year high as it maintained an ascent since the year opened.
The rate settled higher than August’s 6.4% pace as well as the three percent tallied in September 2017, and fell within the 6.3-7.1% forecast range given by the Bangko Sentral ng Pilipinas Department of Economic Research.
Prices of food and non-alcoholic drinks saw the fastest increase at 9.7%, followed by an 8% increase in transport costs and a 4.6% pickup in housing and utility rates, the Philippine Statistics Authority reported. In particular, rice prices surged by 10.4% in September, faster than a 7.1% increase the previous month.
All other components of the consumer basket saw prices rise, except for education-related expenses which slid by 3.8% from a year ago.
Inflation averaged five percent for the first nine months, still below the latest central bank forecast of 5.2% but well beyond the 2-4% target for the entire 2018.
Following the reprieve from the inflation figure, the second trader pointed out that markets are now watching out for latest nonfarm payrolls data in the United States due Friday night.
Strong labor figures would strengthen the decision of the Fed to raise interest rates for a third time this year, while a disappointing turnout may halt such plans.
Dollars traded on Friday amounted to $592.5 million, lower than the $893.1 million which exchanged hands the previous trading day.
By Arra B. Francia, Reporter
LOCAL equities fell amid lackluster trading on Friday following the release of September inflation data which revealed a new nine-year high.
The benchmark Philippine Stock Exchange index (PSEi) traded flat for most of the day before finally registering losses of 0.21% or 15.14 points to 7,078.20 by closing bell. The broader all shares index also slipped 0.16% or 6.98 points to 4,363.36.
“The local market traded flat with very low value turnover as inflation turned out to be a non-event for September… Investors are now in a wait-and-see mode as they need another cue to make sure that CPI has started to peak,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.
The Philippine Statistics Authority reported on Friday morning that the consumer price index for September accelerated to 6.7%, faster than August’s 6.4%. The figure is slightly lower than the Bangko Sentral ng Pilipinas’ projection of 6.8%, but falls within its 6.3-7.1% target band.
This marks the fastest increase in consumer prices since February 2009’s 7.2%. The PSA attributed this to the heavily-weighted food and non-alcoholic beverages index which shot up to 9.7% last month.
Turnover further thinned to P4.08 billion after some 1.13 billion issues switched hands, compared to the previous session’s P4.31 billion. Foreign investors also continued to exit the market, with net sales widening to P885.37 million from Thursday’s P423.84 million.
“With an inflation figure that fell below expectations still failing to resuscitate the PSEi and halt the outflow of foreign funds, we should remain vigilant next week if the overall negative sentiment continues,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an email.
Regina Capital’s Mr. Limlingan added there were no catalysts that could have pushed up the market, as 10-year US Treasury yields likewise hovered at around 3.2%.
With bond yields rising, the Dow Jones Industrial Average plunged 0.75% or 200.91 points to 26,627.48. The S&P 500 index dropped 0.82% or 23.9 points to 2,901.61, and the Nasdaq Composite index lost 1.81% or 145.57 points to 7,879.51.
Most Asian indices also ended in negative territory, taking cues from US Treasury yields’ seven-year high. MSCI’s broadest index of Asia Pacific shares ex Japan slid 0.3%, Japan’s Nikkei 225 dropped 0.8%, while the Hang Seng index slowed 0.19%.
Back home, four sectoral indices declined. Holding firms gave up 0.66% or 46.36 points to 6,951.46, followed by industrial which slumped 0.53% or 55.66 points to 10,405.15. Mining and oil dipped 0.41% or 35.27 points to 8,652.67, while financials went down 0.33% or 5.18 points to 1,574.96.
On the other hand, property gained 0.64% or 22.25 points to 3,487.97, while services added 0.21% or 3.14 points to 1,503.83.
Decliners outpaced advancers, 129 to 66, while 40 names ended flat.
To the uninitiated, “cloud computing” may sound like the newest futuristic technology churned out by the geniuses at Silicon Valley. But the reality is that it’s been around for quite some time. And chances are, you’re using it right now. Cloud computing is the answer to the question: What if we got rid of servers and other clunky hardware, and operated their functions through the internet? Entire platforms have been built to facilitate these services, with users able to offload their computational heavy lifting on a pay-as-you-use basis. Sure, it’s a buzzword, much like fellow future-tech-headliners blockchain and IoT (or the Internet-of-Things). But cloud computing isn’t a budding experimental platform anymore. It’s the industry standard. As this new technology was first being introduced to the market, only startups saw the potential of cloud computing as a core component in their operations. Instead of sinking capital in building out their data infrastructure from the get-go, this new service allowed them to manage and store their data at scale. Now, more and more companies, of various sizes, have taken the plunge. Travel apps Airbnb and Expedia, game developer Supercell, streaming titan Netflix — industry leaders and young innovators alike are operating on the cloud. Jollibee’s backend runs on cloud computing. Even the Philippine government’s operations are heavily dependent on this technology. While this might sound like recent developments in the tech space, all these institutions and businesses are powered by a platform that’s over a decade old — Amazon Web Services.
Cloud computing: a growing industry in itself
Amazon Web Services (AWS) is the 12-year-old cloud computing subsidiary of US e-commerce giant Amazon. According to Vincent Quah, their APAC Regional Head for education, research, healthcare and non-profit organizations, cloud computing is a game-changer for both new and traditional organizations looking to streamline operations and boost productivity. At the Genome Institute of Singapore, their services saw a 20 percent productivity boost for the organization, and at only 10 percent of the traditional cost. “You can spend as little as $10 a month. As you build your business, that may go up. Your investment in infra is growing as much as your business is growing,” Quah told SparkUp. “It helps a lot of startups. All these startups are beneficiaries of the cloud computing model. As these people are tech inclined, they simply go at it.” Vincent Quah, APAC Regional Head of Amazon Web Services | Photo courtesy of AWS With so many businesses looking to cloud-power their operations, the demand for workers skilled in managing the adoption of this new tech has skyrocketed as well. As more and more sophisticated technologies hit the market, many have feared that rapid adoption would phase out jobs. And in some sectors, that’s absolutely the case. But Quah pointed out that the IT sector, in particular, is actually experiencing a massive shortage in talent needed to keep the tech development momentum going. Likewise, governments need to support the development of tech and tech adoption by adopting the right policies, he added. A study done by LinkedIn revealed that cloud computing is the most in-demand hard skill for 2018. This year’s edition of the World Economic Forum’s (WEF) “The Future of Jobs Report” listed cloud technology as one the main technological drivers affecting business growth until 2022. And the demand shows in the figures. Based on US data collated by Global Knowledge, companies are willing to pay an average of $121,292 a year for a worker with a cloud-computing IT certification.
Cloud education on the rise
While this is all well and good for a fresh grad with a computer science background, these trends might be alarming for pretty much anyone else. As we hurtle on through the advent of the Fourth Industrial Revolution, tech-driven jobs will only continue to grow in prominence in the coming years. So what’s a tech neophyte to do in this rapidly sophisticating world? Luckily, there are now a variety of options for kickstarting one’s tech-education. In addition to the countless courses available online (truly, there is an online course for everything), there are a growing number of workshops designed to teach people of various age groups at varying levels of proficiency the basics of cloud computing. This year’s 16th Youth Congress for Information Technology (Y4IT) saw over 2,000 secondary and tertiary-level students competing in a gamified hackathon, culminating a series of web application development sessions and boot camps. And AWS, as one of a number of major platforms helping drive this digital revolution, is doing its part to ensure more of today and tomorrow’s workers are equipped to respond to the needs of a cloud-powered future. As part of its workforce reskilling efforts, Singapore partnered with AWS to help lay the foundation for its ‘Smart Nation’ initiatives. Last May, the firm joined the National Trades Union Congress to educate Singaporean workers between the ages of 44 and 74 on the fundamentals of cloud computing and Internet-of-Things. In the Philippines, the firm has already partnered with local universities and colleges to continue its campaign in educating the youth on cloud computing. This year’s Siklab Pilipinas, AWS’s first large scale global event for tertiary students, included 2 days of hands-on training, a day-long, gamified hackathon, and a job fair . “We want students to invest in themselves, invest in developing skills.” said Quah.
Bridging the digital divide
“This industry is young and it’s developing, but it’s developing very, very fast,” Quah said. “We feel that it’s our mission to educate the people about the cloud.” As one of the pioneers pushing the development of cloud computing globally, Quah said AWS has taken on the role of not only evangelist, but scaffolding, continuing to support its growth. “I think all you need is an attitude that requires you to be curious and to want to learn,” Quah said, arguing that no one is predisposed towards being good at computing. Quah, himself, is a microbiologist by training. “You can actually learn new things. So having the right attitude plays a very critical role. Anyone can actually do it… If you put your heart and mind to it, you can do it.” “This is a beginning of a journey” he said. “I don’t think you will see the end of what we’re doing here. This is going to continue.”
By Anna Gabriela A. Mogato
The country’s banking system will keep steady despite concerns over a possibly overheating economy, a new report claimed.
In its Industry Trend Analysis released on Friday, Fitch Solutions Macro Research said it sees “little downside risks to financial stability” in the coming quarters.
This is amid faster inflation rates reported today by the Philippine Statistics Authority, clocking in at 6.7%. This is up from 6.4% in August.
“The capital and liquidity buffers of the banking sector remain adequate and well-above regulatory and industry norms,” Fitch Solutions said.
Likewise, the rising non-performing loans will continue to be manageable due to a supportive operating environment.
Fitch Solutions also noted that it still sees the country’s gross domestic product growth to stay above 6% as credit “continues to be directed towards the productive sectors of the economy.”
By Elijah Joseph C. Tubayan Reporter
THE WORLD BANK has downgraded its 2018 economic growth forecast for the Philippines — making it the third multilateral lender to do so since last week due to heightened external uncertainties and surging inflation locally — but overall prospects should remain “strong” enough for it to maintain the country’s projections for 2019-2020.
In its bi-annual Philippines Economic Update published yesterday, the Washington-based multilateral lender said it expects Philippine gross domestic product (GDP) to grow 6.5% this year, down from a 6.7% April projection and 2017’s actual 6.7%. At the same time, the World Bank kept its 2019 and 2020 forecasts at 6.7% and 6.6%, respectively.
“The Philippines’ medium-term growth outlook remains strong, supported by an expected rise in public investment spending and a robust private demand,” the report read, noting that consumption is supported by a “steady” labor market, continuous remittance inflows and “inflation easing,” following Palace administrative orders to boost food supply and speed up distribution.
World Bank Senior Economist Rong Qian, in a media briefing on Thursday at the bank’s Philippine office in Taguig City, said that the latest projection took into account the slower-than-expected six-percent growth in the second quarter that compared to 6.6% in the same period last year and last January-March, due to weak exports and weak farm performance.
The same report shows the World Bank expects growth to accelerate this semester and into next year despite high inflation, as election-related spending kicks in. “GDP growth is expected to accelerate in the second half of 2018 and in early 2019, boosted by upcoming senatorial and local preelection spending and continued strong public investment growth. This is consistent with the government’s plan to speed up the implementation of its infrastructure program. Investment spending is expected to accelerate import growth, while export growth is expected to remain moderate given the slowdown in global trade,” it said.
The World Bank’s estimates are below the government’s 7-8% annual target until 2022.
The World Bank’ forecasts match the International Monetary Fund’s 6.5% and 6.7% for 2018 and 2019, respectively. The Asian Development Bank has a slightly lower estimate of 6.4% for this year, but has the same 2019 projection of 6.7%.
The Philippines’ 6.5%, 6.7% and 6.6% updated forecasts for 2018, 2019 and 2020 are outdone or matched for the same years only by Vietnam (6.8%, 6.6% and 6.5%, respectively) and the less developed Association of Southeast Asian Nations (ASEAN) members Cambodia, Laos and Myanmar. “Developing ASEAN” — which excludes Singapore and Brunei — is expected to grow by 5.4% this year and 5.3% in the succeeding two years, while “developing” East Asia and the Pacific — which includes China — is projected to expand by 6.3% this year and by six percent in each of the succeeding two years. China itself will grow by 6.5% this year and 6.2% in 2019 and in 2020.
Other international institutions have yet to update their forecasts. The United Nations Economic and Social Commission for Asia and the Pacific as of May expected the Philippines to grow 6.8% and 6.9% this year and in 2019, respectively, while the Organization for Economic Cooperation and Development as of July projected 6.7% for both years.
Ms. Qian also noted that the “inflation is high but private consumption remains robust. That shows how the Philippines is pretty resilient to inflation.”
For Birgit Hansl, World Bank Lead Economist for Brunei, Malaysia, Philippines and Thailand, “high inflation suppresses consumption growth, but what we see in the second half you will have pre-election spending, so that will balance it out.”
Headline inflation averaged 4.8% in the first eight months, well above the 2-4% target band for 2018 after the Augusts’s 6.4% that was the fastest in about nine years.
Ms. Qian cited key downside risks to the outlook as faster policy rates hikes by the Federal Reserve and worsening trade tensions between United and China.
Such developments will trigger bigger capital outflows, in turn widening the country’s current account deficit and putting more pressure on the peso — already among the worst-performing emerging market currencies — to weaken further.
Although Ms. Qian said that the Philippines has enough buffers, the government should “monitor it (current account deficit) closely to prevent it from widening too much and too fast.”
“Philippines’ macro fundamentals are strong given the country’s flexible exchange rate regime, large international reserves, low public debt, low external debt and robust inflow of remittances. In addition, the Philippines is relatively resilient to capital flows as the country has low exposure to portfolio flows from foreign investors,” Ms. Qian said.
“Yet, given the increased global uncertainties, to mitigate downside risks, it would be prudent to monitor the evolution of the current account deficit.”
At the same time, she noted that the current account shortfall “could be considered a good deficit because it finances capital goods imports to help close the country’s long-due infrastructure gap, and that currently FDI (foreign direct investment) is financing the current account deficit.”
By Susan Claire Agbayani
Maybe it is best that people learn about road safety at a young age — perhaps as early as grade school.
Senator Joseph Victor “JV” Ejercito suggested making it part of the grade school subject Good Manners and Right Conduct last Thursday during a press conference on road safety organized by Vera Files in Malate, Manila. As is, there is a bill working its way through congress which aims to integrate road safety education as early as daycare and preschool.
Considering that the most frequent victims of road crashes, according to the Philippine Statistics Authority (PSA), are young adults between 20 and 24 years of age, followed by those between 25 and 29, it is probably a good idea for future drivers to learn about road safety long before they get a chance to get behind the wheel of a car. STATS FROM WHO AND PSA
The Global Status Report on Road Safety states that road traffic injuries are a global health and development problem. In her preface to the report, Dr. Margaret Chan, who was World Health Organization (WHO) Director General until 2017, wrote, “More than 1.2 million people die in the world’s roads every year, and as many as 50 million others are injured.” Interestingly, and sadly, 90% of those deaths happen in low-income and middle-income countries, the Philippines included.
“Globally, almost half of those who die in road traffic crashes are pedestrians, cyclists, and users of motorized two-wheelers,” who are collectively referred to as “vulnerable road users,” says the WHO report.
In nine years, between 2006 and 2015, there was a huge jump in the number of people who died in road crashes in the Philippines — from 6,869 to 10,012 — a 45.76% increase. And the number has been steadily growing through the years. DRIVER EDUCATION
Mr. Ejercito mentioned the need for motorcycle manufacturers to provide driver education, saying that 70% of vehicles that figure in road crashes are motorcycles.
A few months ago, he filed Senate Bill No. 1822, or the Motorcycle Safety Training Act of 2018, which requires riders to undergo mandatory safety riding training, noting that motorcycle riders have been the primary victims in road crashes in Metro Manila since 2010. The Honda Safety Driving Center includes a training circuit “that simulates traffic network and actual road conditions.”
“As part of the corporate social responsibility (of motorcycle manufacturers) — before the unit is turned over to the buyer he should undergo some sort of education. Definitely, education would play a crucial role in reducing accidents. It’s very important,” Cesar Sarmiento, the congressman of the lone district of Catanduanes, told BusinessWorld after a meeting on road safety of the Committee on Transportation — which he chairs — in Congress last month.
In the Philippines, Honda has a 2.4-hectare facility along SLEX called the Honda Safety Driving Center (HSDC) that includes a training circuit “that simulates traffic network and actual road conditions.”
“We incorporated road safety education as part of the basic operations of our dealership, in our business of selling motorcycles. Many of our dealers are involved in our road safety campaigns,” said Jun Lomibao, Division Chief of Honda’s safety driving promotions, during an interview at HSDC. NOT A ‘SILVER BULLET’
“Driver education is important, but it’s not a silver bullet,” said Dr. John Juliard Go, Program Officer of World Health Organization (WHO) Philippines, after the road safety forum. “By itself, it will not work.”
Mr. Sarmiento agrees, saying, “Many factors would lead to the reduction of road accidents. No. 1 is education, plus discipline, and strict enforcement.” He added that these factors should complement one another as knowledge of the necessary information would be rendered useless if enforcement governing road safety laws is lax.
“Road safety education should be comprehensive in its scope; and has to have elements of interventions with other factors,” said Dr. Go.
“Driver education can only work if you implement (it) together with other interventions that target road users: make them more aware and comply with our road traffic regulations on seat belts, helmet, speeding, speed limiters and drink driving, right?”
WHO-Philippines’ Technical Officer on Road Safety and Communicable Diseases Dr. Ronald Quintana agrees. In an interview at the House of Representatives after the congressional hearing on transportation, he said, “Providing education for motorcycle drivers is important — particularly on road safety — but it doesn’t necessarily lead to behavior change. Knowledge gained should be practiced.” The newly introduced National Road Safety Awareness Act aims to integrate road safety education in the school curricula in all levels including barangay day care, preschool, non-formal, technical, vocational, indigenous learning, and out-of-school youth courses.
Among the other crucial factors Dr. Quintana mentioned are:
• Engineering/road infrastructure (“better roads and roadways”) as one of the means of prevention of road crashes;
• strict implementation and enforcement of road safety laws;
• interventions related to speed, which is one of the behavioral risk factors;
• safer vehicles, which should have standards and regulations; and,
• interventions to protect road users: the pedestrians, drivers, and passengers.
Many road safety laws have been passed in the last few years, including the Motorcycle Helmet Law (RA 10054), the Anti-Drunk and Drugged Driving Act (RA 10586), the Road Speed Limiter law (RA 10916), and the Extension of Validity of Driver’s License (RA 10930). Also, the Seat belt Law (RA 8750), the Anti-Distracted Driving Law (RA 10913), and Children’s Safety on Motorcycles Act (RA 10666).
Road safety advocates in the Senate are now pushing for Child Safety in Motor Vehicles Act of 2017 (SB 1447), the Anti-Overloading Act (SB 1446), as well as the Creation of a National Transportation Safety Board (SB 1375), among others.
And coming back to the children, over at the House of Representatives, Mr. Sarmiento introduced House Bill No. 7915 or the National Road Safety Awareness Act, which promotes “national road safety awareness through road safety education, road safety events and activities and multi-stakeholder consultation and collaboration…”
Section 3 of the bill enjoins the Department of Education, the Commission on Higher Education, the Technical Education and Skill Development Authority — in coordination with the Department of Transportation, the Land Transportation Office and other concerned agencies — to “integrate road safety education in the school curricula at all levels, whether public or private, including the barangay day care, preschool, non-formal, technical, vocational, indigenous learning and out-of-school youth courses and programs.”
This story was produced under the Bloomberg Initiative Global Road Safety Media Fellowship implemented by the World Health Organization, Department of Transportation and Vera Files.
