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Oil trades near $65 as inventory gain counters trade optimism

Oil traded near $65 a barrel as investors weighed a surprise gain in American crude inventories against optimism over trade talks between the U.S. and China after the Asian nation signaled it’s open to dialogue.
Futures in New York were little changed after a 3 percent decline on Wednesday. U.S. crude inventories rose by 6.81 million barrels last week, while those at the Cushing storage hub in Oklahoma expanded for the first time since May, the Energy Information Administration reported. China said it welcomes communication with the U.S., and its vice commerce minister will lead a delegation to America in late August.
Oil is trading near the lowest level in 10 weeks amid speculation an escalating trade conflict between the U.S. and China will slow economic growth and sap energy demand. U.S. sanctions on Iran, which are set to snap back in November, remain a concern even though the International Energy Agency said fears of global supply shortages receded after the Organization of Petroleum Exporting Countries and other producers boosted output.
“An increase in crude inventories, despite record refinery crude processing, has had a big impact” on the market, Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. “Instead of escalating the trade war, China says it will put talks on the table. That may stem any damage to economic growth, and limit its impact on oil demand.”
West Texas Intermediate crude for September delivery traded up 0.2 percent at $65.04 a barrel on the New York Mercantile Exchange at 11:02 a.m. in Tokyo. The contract declined $2.03 to $65.01 on Wednesday. Total volume traded was in line with the 100-day average.
Brent for October settlement traded at $71.21 a barrel on the London-based ICE Futures Europe exchange, up 45 cents. Prices dropped $1.70 to $70.76 on Wednesday. The global benchmark crude traded at a $6.62 premium to WTI for the same month. — Bloomberg

DMCI Mining shipments up in first half

DMCI Mining Corp. said nickel shipments went up by 88% in the first half of 2018, but expects no shipments to be made in the second semester due to the shutdown of its Zambales operations as well as the depletion of its stockpile in Palawan.
The Consunji-led miner said in a statement that it shipped 482,762 wet metric tons (WMT) of nickel from January to June, higher than the 257,120 WMT it shipped in the same period a year ago.
The average selling price per metric ton of nickel stood at $39, 10% higher than its price of $35 in the same period a year ago. Average nickel grade also improved by 11% to 1.73%. In the second quarter alone, average nickel grade rose by eight percent to 1.75%.
“We had a really good first semester. Our subsidiaries were able to ship more high-grade nickel ore at a higher selling price,” DMCI Mining President Cesar F. Simbulan, Jr. was quoted as saying in a statement. — Arra B. Francia

Shakey’s targets equal split between company-owned and franchised stores

Shakey’s Pizza Asia Ventures, Inc. (SPAVI) looks to have an equal mix of franchised and company-owned stores, as the company targets to open 18 to 20 new outlets each year for the next three years.
“We see a shift to a more 50-50 franchised to company-owned stores within the next couple of years,” SPAVI President and Chief Executive Officer Vicente L. Gregorio told reporters in a briefing after the company’s annual shareholders’ meeting in Ortigas Center yesterday.
The listed casual dining restaurant currently operates 217 stores nationwide, 60% of which are company-owned while 40% are franchised. Mr. Gregorio said the 50-50 target can be achieved as they expand toward the Visayas and Mindanao (VisMin) areas.
“VisMin continues to become the big potential moving forward. They’re under penetrated. We continuously receive inquiries there, we just opened a franchised store in Ormoc. And there are other second-tier cities that we are studying and evaluating,” Mr. Gregorio said. — Arra B. Francia

Dennis Uy buys 45% of ISM Communications

Davao-based businessman Dennis A. Uy continues his acquisition spree with the purchase of P1.28 billion worth of shares in listed firm ISM Communications Corp.
In a disclosure to the stock exchange on Thursday, Aug. 16, ISM said its executive committee has approved the subscription of Mr. Uy’s Dennison Holdings Corp. to 883.73 million unissued common shares of the company at P1.45 per share.
The subscription is equivalent to 45.13% of the company’s outstanding total stock. — Arra B. Francia

BSP’s first-half profit surges nearly five times

The Bangko Sentral ng Pilipinas (BSP) saw its bottom line surge during the first semester, boosted by sizable gains from currency trading at a time of a weaker peso.
The central bank posted a P29.45 billion net income as of end-June, nearly five times the P6.55 billion it made during the comparable period in 2017. — M.T. Lopez

The best and hottest tech devices in town

Technology is clearly a rapidly evolving field. Every year, more technological inventions are being developed that influence the way people live and work.

Given the advantages technology bring, many individuals crave the coolest and latest tech inventions in the market. But because of numerous options from diverse developers and manufacturers, consumers get easily overwhelmed. To overcome this problem, here’s a list of some of the best and hottest gizmos in town.

SMARTPHONES

Samsung Galaxy S9 and S9+

This Samsung’s flagship duo boast a beautiful edge-to-edge screen (5.8” for Galaxy S9 and 6.2” for Galaxy S9+). Both are carefully crafted to comfortably fit in user’s hand, with the fingerprint sensor ergonomically placed at the back for easy access.

The most impressive part of the phones is the revolutionary camera that allows users to create breathtaking photographs and videos. With the Dual Aperture lens, beautiful memories can be perfectly captured anytime and anywhere even in different kinds of light. It also has a super slow-motion feature that slows down time and sees things one may miss in the blink of an eye. In situations when the user is on a bumpy ride or is a little shaky, photos will still come out sharp, with the help of optical image stabilization feature.

Huawei P20 and P20 Pro

The Huawei P20 Series is an exquisite combination of art and technology. The 5.8-inch screen Huawei P20 and 6.1-inch screen Huawei P20 Pro feature ultra-thin bezels and remarkable screen-to-body ratios for better viewing experiences. Both devices feature a striking, fashion-forward aesthetic that comes in all-new, exclusive fashionable colors: twilight, pink gold, black and midnight blue.

The key features of the Huawei P20 Series include: advanced camera system that captures more light, more details and more beauty; innovative photography features, including the Master AI with AI-driven professional photography and a powerful AI stabilization technology; and ultimate performance, featuring the NPU on Kirin 970 and EMUI 8.1 based on Android 8.1 for a premium and smooth user experience.

TABLETS

Apple iPad Pro 10.5

Apple believes that its 10.5-inch iPad Pro has the world’s most advanced display with its ProMotion technology and the new A10X Fusion chip. This, together with other powerful new iPad features on iOS 11, like the all-new Files app, customizable Dock, improved multitasking and deeper integration of Apple Pencil, gives users the ability to be more productive and creative.

Aside from the groundbreaking performance it offers, the iPad Pro 10.5 is a perfect device to shoot, edit and share pro-quality photos and videos. It features the same advanced front- and back-facing cameras on iPhone 7 — 12-megapixel camera with optical image stabilization and a 7-megapixel FaceTime HD camera. It also has a four-speaker audio system that provides a powerful, clear and rich stereo sound in any orientation. Meanwhile, an embedded Apple SIM2 and support for 802.11ac Wi-Fi and LTE Advanced make it easier for users to stay connected when traveling in more than 180 countries and regions.

Apple new iPad 9.7

Apple’s new iPad is more versatile and capable than ever. Its beautiful 9.7-inch Retina display delivers gorgeous detail and vivid colors, and features a higher-resolution touch sensor that enables Apple Pencil support. Apple Pencil, which was first introduced for iPad Pro, delivers a remarkably fluid and natural drawing experience, helping users from sketching ideas, jotting down handwritten notes, to marking up screenshots.

This iPad features the Apple-designed A10 Fusion chip with 64‑bit desktop-class architecture that delivers 40% faster central processing unit and 50% faster graphics performance for seamless multitasking and graphics-intensive apps. Its front- and rear-facing cameras offer exceptional low-light performance and HD video recording for document scanning, movie-making and FaceTime calls. Built for durability and mobility, the new iPad is engineered with an aluminum unibody construction and ultrafast wireless that can deliver two times faster cellular data connections.

DESKTOP COMPUTERS

HP Pavilion Wave

The HP Pavilion Wave is designed to power entertainment and productivity at home or workplace that can fit into small spaces because of its creative, compact design. Its iconic triangular form houses the motherboard on one side, the hard drive on the second side and thermals on the third side. The thermal design uses heat pipes to extract heat from the motherboard and the graphics card that keeps the device running cool.

This unique desktop is 85% smaller than traditional personal computers at 6.81” x 6.62” x 10.29”. It supports up to two 4K displays, and has a peripheral support with three USB 3.0 ports, a Cortana support with two dual microphones, and an optional AMD Radeon R9 M470 discrete graphics. It also boasts high performance: up to 6th Generation Intel Core i7 quad-core desktop processors, ample storage up to 2 terabyte (TB) of hard disk drive (HDD), an optional dual drive with 128 gigabyte (GB) solid-state drive (SSD), and up to 16 GB of double data rate 4 (DDR4) system memory.

Lenovo IdeaCentre AIO Y910

The IdeaCentre AIO Y910 captures the power of state-of-the-art personal computer desktops in an all-in-one (AIO) form that fits conveniently in places where bulkier PC can’t. As both a pro-gaming, VR-ready PC and a high-end desktop for efficient productivity, the IdeaCentre AIO Y910 gives users the features they demand from a sleek AIO desktop.

Built entirely within a 27-inch Quad High Definition borderless display, this desktop PC features up to NVIDIA’s latest GeForce GTX 1080 or AMD Radeon RX 460 graphics, up to 6th Gen Intel Core i7 processor, up to 32 GB DDR4 RAM, and up to 2 TB HDD or up to 256 GB SSD.

LAPTOPS

Huawei MateBook X Pro

This 13.9-inch laptop is one of the most powerful and lightweight notebooks in the market. It is the first notebook to feature Huawei FullView Display, with an all-new 10-point touchscreen that has a 3000 x 2000 pixel resolution, 100% sRGB color gamut, and is set at a 3:2 aspect ratio. Its stylish metallic body design is carefully crafted with perfect diamond cutting and sandblasting finishing technologies that create an ultra-slim body.

The premium design of the Huawei MateBook X Pro is matched by its performance, featuring a powerful 8th Generation Intel Core i7 or i5 processor and a discrete NVIDIA GeForce MX150 GPU with 2 GB GDDR5. With its 57.4Wh battery and Huawei’s low power consumption design, this notebook provides up to 12 hours of 1080P video playback, 14 hours of regular work or 15 hours of webpage browsing.

Asus ZenBook Flip S

A timelessly elegant masterpiece, this is how Asus describes the ZenBook Flip S, which combines elegant sophistication with the convenience and versatility of a 360° flippable display. This ultra-light and ultra-thin convertible stylish laptop is made from premium, aerospace-grade aluminum, making it lighter than standard laptop alloy but 50% stronger.

Asus claims that ZenBook Flip S is an unbelievably powerful laptop that features the 8th Generation Intel Core i7 processor, up to 16 GB of 2133MHz LPDDR3 RAM, an ultra-fast up to 1 TB PCIe Gen 3 SSD, and a USB-C port for display output, data transmission and fast charging. It has a special high-capacity 39Wh lithium-polymer battery that provides up to 10.5-hour autonomy, and a fast-charge technology that facilitates charges of up to 60% capacity in just 49 minutes.

DIGITAL CAMERAS

Nikon D850

The Nikon D850 optimizes the combination of high-resolution and high-speed performance that sets the standard for next-generation full-frame cameras. From landscape, commercial sports, fashion and wedding photography to multimedia applications, the D850, combined with the power of NIKKOR’s extensive selection of lenses, greatly expands the possibilities for versatile imaging expression across a wide variety of photographic genres.

This digital SLR camera has an effective pixel count of 45.7 megapixels (MP), and supports the ISO 64-25600 range of standard sensitivities. The camera itself is capable of high-speed continuous shooting at approximately seven frame per second (fps) that can be increased to approximately nine fps with the optional MB-D18 Multi-Power Battery Pack.

Sony A7 III

A7 III is the latest addition to Sony’s impressive full-frame mirrorless camera lineup. It features a brand new 24.2 MP back-illuminated Exmor R CMOS image sensor with increased sensitivity, outstanding resolution and an impressive 15 stops of dynamic range at low sensitivities.

By combining this sensor with a variety of impressive features, including extreme autofocus coverage of 93%, fast shooting at up to 10 fps and diverse 4K video capabilities, the new A7 III is indeed a perfect tool that gives all types of creators — from enthusiast to professional — the ability to capture moments in new and different ways than they ever have before. — MLFF

Five disruptive global retail trends

KPMG, one of the world’s biggest professional services firms, argues that disruption — which is often portrayed as something “that is coming” — is already being felt in the global retail industry.

“In reality, we are already disrupted. The new retail world we have been promised is here.”

In a report published last March, the firm compiled a list of five trends impacting the industry. The first is that customer experience is more important than ever.

“Successful retailing in 2018 comes down to obsessing about customer experience. Essential to achieving this is digital and physical touchpoints working together seamlessly,” KPMG said.

To devise new retail models, retailers try to make sense of their share of consumer spending, and how their customers search, shop and buy. They are reinventing how they do their business — whether by having a showroom or a strong presence in e-commerce.

Physical stores, contrary to popular perception, are far from oblivion. “Put simply, stores that are doing well offer a customer experience that meets or exceeds customer expectations,” KPMG said. “In summary, customers will shop where they enjoy their experience, this could be on a single channel or a combination of channels.”

The next trend the firm identified is the growing clout of artificial intelligence or AI. This year, adoption of AI will continue to rise, and chatbots are taking the lead, the firm said.

These bots, used for handling customer service queries and recommending intelligent  purchases, will only become even more common due to the increasing ease of their deployment, instant availability and improved quality.

A significant amount of data, the firm said, is now in the hands of retailers that they can harness to power AI and deliver experiences that are personalized, customized and localized to customers.

“Retailers using AI to its fullest potential will be able to influence purchases in the moment and anticipate future purchases, guiding shoppers toward the right products in a regular and highly personalized manner,” KPMG said.

A trend that will continue, according to the firm, is the rise of the conscious customer. “Customers are demanding transparency as they take an increased interest in the ethical practices of the brands they buy from. Furthermore, customers today who are more tech-savvy, have a much keener eye for authenticity versus marketing speak.”

Customers today can tell what is authentic from what is intended to solely drive sales. And the judgements they make about what to buy and where to shop are informed by values, in the belief that their purchase habits impact the world.

KPMG said that winning over customers today requires standing up for something and reflecting that message consistently throughout the entire business from senior leadership to front-line staff.

The fourth trend, according to the firm, has to do with evolution of the new retail world. “As more retailers adapt to the changing expectations of customers, we are finally seeing the new retail world evolve. This is the consequence of significant behavioral shifts over the last few years,” the firm said.

Customers now have the power — they’re in the driver’s seat, and new technologies have put them there. Apps — from Snapchat to WhatsApp — indicate that the world is moving toward a reality in which everything happens in real time.

“The natural outcome is that people want that instant gratification. This has had a deep impact on customer expectation,” KPMG said.

The fifth and final trend involves “a tale of two hemispheres.” The firm noted that traditionally, companies in China borrow products and business models from the West and adapt them to their local markets. Now, the Eastern landscape is being shaped not by ideas and inventions derived from the West but by homegrown platform businesses.

“China has developed a unique innovation ecosystem that has resulted in a revolutionary approach on a mass scale,” KPMG said. “It is different from that in the West, and it is impacting both emerging and developed economies.”

The firm added: “China’s innovative tech companies are dominating the local market and it may just be a matter of time before they themselves move West.”

Executive, House break budget deadlock

TALKS in Malacañan Palace last Tuesday between President Rodrigo R. Duterte and Speaker Gloria M. Arroyo broke the deadlock over the Executive’s proposed national budget for next year, with a leader in the House of Representatives saying the chamber will likely resume deliberations and should be able to meet the deadline for the spending plan’s approval.
House leaders had questioned the reduction of the national budget to P3.757 trillion in 2019 — a mid-term election year — from 2018’s P3.767 trillion, fearing this would leave many local development projects unfunded. The Budget department had attributed the reduction to a shift to a “cash-based” system, which includes only projects that can be auctioned off and awarded within 2019, from one that is “obligation-based” which provides a two-year horizon for auctions and awards. The shift — which takes into consideration implementing departments and agencies’ disbursement limits — is a key step the Duterte administration has taken to end years of state underspending that has capped economic growth.
“We understand that a cash budgeting system from an economic manager standpoint; this is a step forward. But speedy implementation in one year’s time, we have to balance it,” House Majority Leader Rolando G. Andaya, Jr. said in a press briefing on Wednesday.
“We’d make adjustments inside. We can do that. There are also suggestions that there’ll be some supplemental budget.”
House Appropriations committee Chairman Karlo Alexei B. Nograles said in an interview over ABS-CBN News Channel that he did not oppose the cash-based system per se but wanted to give local governments time to adjust to a smaller budget, adding that implementation of the new framework should be moved to 2020 — the year after mid-term elections.
“I think I can suggest to the Chairman (Nograles) that we now continue the budget hearing. Clear naman ‘yung instructions ng Presidente (The President’s instructions were clear). So, over the (Aug. 16-27) break we will resume,” Mr. Andaya said.
Asked whether the chamber can approve the budget by its original target date on Nov. 30, Mr. Andaya replied: “Oo, oo, walang problema (Yes, yes, that’s not a problem).”
According to the Camarines Sur solon, a supplemental budget may have to be legislated to fund the implementation of the Bangsamoro Organic Law (BOL) and the bigger internal revenue allotment for local governments ordered by the Supreme Court. “The DBM (Department of Budget and Management) admitted that the budget for the implementation of the BOL is not yet in the present budget… [and neither is the] ‘yung decision ng Supreme Court regarding… internal revenue allotment,” Mr. Andaya said.
At the same time, he clarified that the chamber “cannot have a supplemental budget na walang kaakibat na pondong pagkukunan (without a corresponding funding source),” adding that such a bill will have to be filed in conjunction with one of the succeeding tax reform packages.
‘HYBRID’ BUDGET PROVISIONS
Also among the agreements reached at Wednesday’s top-level meeting was “a compromise to extend to one year and six months” allocations for select development imperatives.
Explaining such a “hybrid” scheme that straddles the cash- and obligation-based systems, Mr. Andaya cited the calamity fund as an example. “For example, the calamity fund, [can’t be spent] by the end of the year [when] wala pa naman bagyong dumadating (there is no typhoon yet). So you have to wait. That’s a hybrid,” he said.
In a briefing in Malacañang on Wednesday, Presidential Spokesperson Herminio L. Roque, Jr. said Mr. Duterte was to meet with Budget Secretary Benjamin E. Diokno and Finance Sec. Carlos G. Dominguez III to see where they could compromise with the House.
‘FOR AN ELECTION YEAR’
Earlier Wednesday, Mr. Diokno told reporters that lawmakers he met with on Tuesday morning had pushed for a bigger 2019 national budget.
The Senate decided in a caucus late that afternoon, however, to back the Executive’s cash-based scheme and to continue holding parallel public budget hearings, even as the chamber would have to wait for the 2019 spending plan to secure House approval — as required by law — before giving its green light.
“Their desire really is to have the budget increased. They said for an election year, masyadong tight ang budget,” Mr. Diokno recalled.
“Maybe [for an] election year they want more projects. That’s natural: if you’re a congressman you want to impress… your constituents, you really need more projects.”
Sought for comment, Ramon C. Casiple, executive director of the Institute for Political and Electoral Reform, said in a mobile message: “It’s a question of access to funds in an election year. Cash-based budgeting favors government spending but disfavors electoral spending.” — Charmaine A. Tadalan and Elijah Joseph C. Tubayan

Overseas Filipinos’ cash remittances (June 2018)

CASH remittances slipped to a two-month low in June due to smaller flows from the Middle East, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday. Read the full story.
Overseas Filipinos’ cash remittances (June 2018)

Cash remittances up in 1st half despite June fall amid smaller Mideast flows

OWWA / ofw
AFP

By Melissa Luz T. Lopez, Senior Reporter
CASH remittances slipped to a two-month low in June due to smaller flows from the Middle East, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.
Money sent home by overseas Filipino workers (OFWs) totalled $2.357 billion that month, down from May’s $2.469-billion inflows and 4.5% lower than the $2.467 billion received in June 2017.
This is the smallest amount of remittances seen since April’s $2.347 billion and settled lower than market expectations, according to central bank data.
ING Bank had expected remittances to rise by 5.3% in June, versus a consensus forecast of 5.4%.
The BSP said cash remittances declined on the back of smaller amounts sent by Filipinos working in the United Arab Emirates (UAE), Saudi Arabia and Kuwait.
Overseas Filipinos’ cash remittances (June 2018)
“The overseas Filipino workers repatriation program of the government may have partly affected the remittance flows for the month,” the central bank said in a statement, noting that a total of 4,149 OFWs have been brought home from the three countries during the first two months of 2018.
In February, President Rodrigo R. Duterte asked Filipinos in Kuwait to return home amid reports of abuse, and ordered a deployment ban soon after. The ban was lifted in May following an agreement signed by the two nations.
June’s inflows brought last semester’s total to $14.179 billion, 2.7% more than the $13.813 billion logged in last year’s comparable six months. That compares to the central bank’s forecast of a four percent growth in remittances for the entire 2018.
Cash transfers from OFWs deepens pockets of their families back home, which in turn helps fuel overall economic growth. Household spending in proportion to national output steadied at about 56% last semester from a year ago, though growth of this segment slowed to 5.7% compared to the year-ago 5.9%, according to latest available data which the Philippine Statistics Authority released on Thursday last week.
Overall economic growth slowed to six percent last quarter, compared to a downward-revised 6.6% climb in the first three months.
Remittances also act as a counterweight to growing import payments that have been driving the country’s current account balance deeper into deficit, in turn making the peso weaker against the dollar.
The BSP expects remittances to touch a new all-time high and grow by another four percent this year, coming from the all-time high of $28.06 billion in 2017.
Preliminary data from the Philippine Overseas Employment Administration showed that OFW deployment has eased, with land-based workers dropping by 3.28% and those working at sea falling by 14.6%.
By country, the United States remained the biggest source of remittances last semester. It was followed by Saudi Arabia, Singapore, the United Kingdom, UAE, Japan, Qatar, Germany, Hong Kong and Canada, according to the BSP, noting that these countries accounted for more than 79% of total cash remittances in 2018’s first six months.
Sought for comment, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said “[t]he lower-than-expected 4.5% remittance [drop] may be temporary because we have seen this as well last year. We expect it to recover in the coming months.”
In 2017, remittances posted annualized declines in April (5.9%) and September (8.3%) but grew in the other 10 months.
Mr. Asuncion said he had expected a 5.4% growth in remittance inflows to around $2.6 billion for June.
Still, he said the softer increase in remittances had “minimal” impact on household spending, which eased to 5.6% during the second quarter from the 5.7% pace logged in January-March at a time of rising commodity prices. Such consumption had grown by faster 5.9% and six percent in last year’s first and second quarters, respectively.

Central bank sticks to outlook of slower inflation by Q4

INFLATION should peak in the next two months before slowing closer to target, the country’s central bank chief said, noting that tax-related price pressures have been “tapering off.”
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said the biggest price spikes will be seen in August or September, before settling within the 2-4% target band by next year.
“Latest baseline forecasts have shifted higher over the policy horizon, suggesting that inflation will remain elevated in 2018 with the peak occurring sometime in the third quarter, and will revert to the inflation target of 2-4% in 2019,” Mr. Espenilla said in a speech before the Rotary Club of Makati on Tuesday.
Inflation has averaged 4.5% as of end-July as it touched a multiyear high of 5.7% last month.
In response, the central bank fired off its strongest response in a decade as it raised benchmark rates by 50 basis points (bp) in its meeting on Thursday last week, following hikes of 25 bp each in May and June.
Monetary authorities have long conceded to missing their inflation target this year, citing persistent “supply-side” pressures that are beyond the BSP’s purview. Much of the blame has been pinned on rising global oil prices, thinning buffer stocks of cheap rice, as well as the impact of the first of up to five planned tax reforms which imposed additional levies on fuel, cigarettes, alcohol and sugary drinks starting Jan. 1.
“In a supply shock episode, central banks would typically not react, as these historically tend to be transitory or short-lived in nature, but remain vigilant and undertake action against incipient signs of second-round effects,” Mr. Espenilla said.
However, Mr. Espenilla said the central bank has been seeing signs that the price spikes are becoming less fueled by tax reform-related adjustments.
“We also see the tapering off of month-on-month changes of CPI items related to excise tax adjustment in the first five months. The month-on-month changes for electricity, tobacco and sweetened beverages are also slowly tapering off as we pass seven months of 2018,” the BSP chief said.
“This supports our view that the impact of excise tax adjustments are transitory.”
The central bank sees headlline inflation averaging 4.9% this year.
Mr. Espenilla explained that the BSP continues to see risks to inflation in the face of impending wage increases, pending petitions for higher transport fares and utility rates, a faster-than-expected rate tightening in advanced economies, and a further increase in rice prices.
He added that the three rate hikes announced so far this year — cumulatively 100bps — signal the BSP’s “strong commitment to ensuring macroeconomic stability,” noting that these steps “will help reduce further risks to inflation” without stunting overall growth.
Robust domestic activity shows that the economy can absorb rising interest rates, even as growth eased to 6.3% last semester against a 7-8% full-year goal, from 6.6% in 2017’s first six months.
Mr. Espenilla noted that “non-monetary intervention” like shifting to a regular tariff scheme for rice from the current import quota system — expected to slash retail prices of the staple by P7 per kilogram — should help tame inflation. The House of Representatives approved this measure earlier this week.
Jose Mario I. Cuyegkeng, senior economist at ING Bank N.V. Manila, said he expects inflation to peak at around six percent in August or September, but will likely stay above five percent for the rest of 2018.
Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said he expects third-quarter inflation to average 5.9% before easing to 5.8% from October-December.
Finance Secretary Carlos G. Dominguez III, who sits in the policy-setting Monetary Board, said the central bank “has a very good capacity to analyze economic trends.” He said in a media forum yesterday that the BSP will take “appropriate action” to respond to emerging trends in the local and global scene.
Bank analysts have noted that the central bank remained hawkish in its Aug. 9 policy statement, which they said left the door open for further rate hikes. — Melissa Luz T. Lopez

GT Capital eyes mid-single digit growth

By Arra B. Francia, Reporter
GT Capital Holdings, Inc. looks to grow its earnings in the mid-single digits for full year 2018, amid recording flat profit for the first semester after the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law dented auto sales.
In a regulatory filing, the holding firm of tycoon George S.K. Ty reported that net income attributable to equity holders of the parent dropped by 18% in the second quarter to P3.4 billion, versus the P4.1 billion it booked in the same period a year ago. Revenues for the quarter also slumped six percent to P55.7 billion.
This brought GT Capital’s attributable profit one percent lower to P7.1 billion in the first half of 2018, after revenues slipped by six percent to P101.2 billion, reflecting the slowdown in the number of units sold under Toyota Motor Philippines (TMP).
“This is attributed to the front-loading of orders late last year in anticipation of the TRAIN Law and the run-out of the previous generation Vios during the second quarter… On the other hand, our affiliates Metrobank, AXA Philippines, Metro Pacific, and TFS delivered strong results, mitigating the soft numbers from the auto sector,” GT Capital President Carmelo Maria Luza Bautista said in a statement.
The implementation of TRAIN last January directed higher excise taxes on vehicles, with those costing P600,000 and below slapped with a 4% tax, instead of the previous 2%. Taxes for cars priced between P600,000 to P1 million are now at 10%, from the previous scheme of P12,000 plus 20% of the amount in excess of P600,000.
With this, sales of Toyota vehicles dropped by 14% to 73,136 in the first half. The company said this is close to the industry’s 12% year-on-year decline to 191,495 units sold for the period, citing data from the Chamber of Automotive Manufacturers of the Philippines, Inc.
TMP’s consolidated net income stood at P4.6 billion for the first half, after revenues of P76.4 billion. Despite slower sales, the company maintained its leading market position with a share of 38%.
“We are expecting that market demand may normalize by the fourth quarter and resume its growth momentum by 2019 due to TMP’s new model launches and sufficient inventory,” Mr. Bautista said.
Meanwhile, Metropolitan Bank & Trust Company recorded a 16% increase in net income to P11 billion for the first half. The company benefited from the growth of its core business, alongside an 18% jump in its loan portfolio to P1.3 trillion.
GT Capital’s property units Federal Land, Inc. and Property Company of Friends, Inc. booked P9.7 billion in combined revenues for the first half, with a consolidated net income of P1.1 billion.
Metro Pacific Investments Corp.’s consolidated core profit went up by 10% to P8.6 billion from January to June. The infrastructure conglomerate’s performance was driven by higher investments in the power sector, continued traffic growth in its operating toll rods, and volume growth from Maynilad Water Services, Inc.
Its insurance business, Philippine AXA Life Insurance Corp., delivered a 35% profit increase to P1.3 billion.
OUTLOOK
Asked for the company’s outlook for the rest of the year, Mr. Bautista said he is looking forward to a recovery.
“Still positive growth (for 2018), but siguro single-digit. Mid single-digit. We’re expecting the bank to continue its strong performance, the insurance to (have) strong performance. We hope for some turnaround in the property side. For Toyota, depending on how fast the volume picks up,” Mr. Bautista told reporters on the sidelines of a media and analysts’ briefing in Bonifacio Global City on Wednesday.
The GT Capital executive noted that higher spending related to the upcoming elections may start as early as the fourth quarter of this year, which could boost sales for TMP.
“Election spending mag-uumpisa na yan by November and December. There’s always been a high statistical correlation between unit sales of cars and election years. There’s just more money going around, for logistics, relations… and usually the atmosphere is positive,” Mr. Bautista said.
Shares in GT Capital dropped by 4.66% or P44.50 to close at P910 each at the stock exchange on Wednesday.

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