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ERC hopes to resolve at least 3 pending power supply deals by yearend

THE Energy Regulatory Commission (ERC) is targeting to resolve within the year at least three of the seven power supply agreements (PSAs) applied for by distribution utility Manila Electric Co. (Meralco), one of its officials said on Monday.

“Within the year [for the three], (there’s still time in) 2017,” ERC Commissioner Josefina Patricia A. Magpale-Asirit told reporters when asked about the chance of an approval for any of the PSAs any time soon.

“It’s going through the process,” she said on the sidelines of a power competition seminar hosted by the Energy Policy and Development Program on Monday at Bonifacio Global City in Taguig.

In May 2016, Meralco sought ERC approval to source power from seven generation companies: Redondo Peninsula Energy, Inc.; St. Raphael Power Generation Corp.; Atimonan One Energy, Inc.; Central Luzon Premiere Power Corp.; Mariveles Power Generation Corp.; Panay Energy Development Corp.; and Global Luzon Energy Development Corp.

The PSAs have been criticized by some sectors, including consumer groups, because they were filed just before rules requiring PSAs to go through a competitive selection process came into force.

A unit of Meralco has a stake in three of the generation companies, which are the ones that might be cleared within the year. Three others lack the required environmental compliance certificate (ECC). Panay Energy has secured provisional approval.

Ms. Magpale-Asirit  said the companies with pending ECCs are Central Luzon Premiere, Mariveles Power and Global Luzon Energy.

She said the ERC had received petitions for intervention from several quarters, including National Association of Electricity Consumers for Reforms, which is an intervenor in all the cases.

“Barring other complications we should be able to consider a lot of the issues that have been put forth on the applications or the PSAs that are before us,” she added.

She said Panay Energy had been issued a provisional approval because it specifically sought the interim relief. She said the others had asked for a final determination from the ERC on their PSA applications.

“But it would really help if we had the new leadership or an appointment of a chair and CEO already forthcoming,” she said.

Ms. Magpale-Asirit was referring to a directive from the Office of the President dated Oct. 6, 2017 ordering the dismissal of Jose Vicente B. Salazar as ERC chairman and chief executive after finding him guilty of simple and grave misconduct.

“Even with the four commissioners, we are able to function as a commission in terms of the deliberative process that is required for a decision,” she said. — Victor V. Saulon

The Quintessential lifestyle

Thanks to the economic reforms established by the Aquino administration, the Philippines has metamorphosed from the region’s underperformer to its new economic tiger. From 2010 to 2016, the Philippines pulled-away with an average growth rate of 6.2%, one of the highest in Asia and the nation’s best performance in four decades. The strong economy generated massive wealth for a select group of individuals.

The conglomerates and their owners are the first to benefit from times of robust economic activity. Immediate access to capital and a corporate machinery have put them in the best position to take advantage of the many business opportunities that abound.

The entrepreneurs are the second to benefit. Those who risked personal capital, effort, and time into a business venture have found success on the back of favorable economic conditions. They are our new breed of millionaires and those who drive the market for luxury goods, travel, and prestige properties.

It is said that roughly a million families control the entire economy worth $330 billion. Indeed, in our midst are extremely wealthy people. In fact, 11 Filipinos have made it to Forbes’s exclusive (and elusive) list of dollar-billionaires. Trailing them are hundreds of thousands of entrepreneur-millionaires growing in wealth, year after year.

Unfortunately, it takes time for the benefits of the economy to trickle down to the rest of society. It is not unfair — it is simply how a free market economy works. Government’s pro-poor policies should help this along.

This piece is not about the inequitable distribution of wealth. I’ll save that for another time. Rather, it is about how the wealthy live their lives and spend their money.

QUINTESSENTIAL EXPERIENCES
Those with serious money are different from you and I.

To them, prestige cars like Audis, Mercedes Benzes, and Range Rovers are not a luxuries, they are simply the norm for transportation. Merchandise from Louis Vuitton, Tod’s, and Gucci are not brands that make a statement. Rather, they are symbols of aspiration which they neither want or need and frankly, can do without. Travel to Hong Kong, Thailand, and the United States is not an adventure but a nonevent, sometimes even a chore. In other words, the symbols we normally associate with the rich are not exactly what make them tick.

For high net worth individuals, true luxury comes in the form of unique experiences. Experiences like having the first view of Annie Leibovitz latest portraits in New York City; going on a private tour inside the Teotihuacan Pyramids with a doctor of archeology; attending a retreat of serene meditation with the Dalai Lama; taking a 1964 Aston Martin DB5 for a spin on the Nuremberg; or being invited to a charity ball hosted by Emmanuel and Brigette Macron. Experiences like these cannot be had with money alone. It requires access to inside information and the connections to make it happen.

For 16 years, a London-based concierge service called, Quintessentially, has been organizing amazing experiences for CEOs, entrepreneurs, celebrities, and VIPs. The organization is composed of 2,000 employees spread across 65 countries, all of whom work with the solitary mission of fulfilling requests of their discriminating members, no matter how mundane or outrageous. They are trained to deal with people with extraordinary needs and who are also very demanding.

Requests can be as banal as finding a dog walker for the afternoon or as seemingly impossible as booking a private jet at the last minute. On one occasion, the concierge service even arranged to close Times Square in New York City just so one of its members could propose to his girlfriend.

Quintessentially works on a membership basis. Those fortunate enough to be a part of the exclusive group are looked after by a professional lifestyle manager. Not only do they exist to take care of the member’s needs, they are also trained to anticipate them. Requests can be made anytime of the day and anywhere in the world. Lifestyle Managers are duty-bound to deliver, if not the principal request, then perhaps a better alternative.

Lifestyle Managers are empowered by Quintessentially’s worldwide network of contacts, partners, and merchants whom they access through cloud technology. With everything taken care of, members gain two of the most precious commodities money cannot buy — time and peace of mind.

The beauty of Quintessentially’s service is that it is not confined to only lifestyle concerns. Sure, they are a master in scoring tickets to sporting or entertainment spectacles, arranging rare travel itineraries, and getting invited to exclusive events — but Quintessentially’s services are also used for the practical side of life.

For instance, numerous members have used the service to arrange private interviews for their children in their chosen universities. They are also used to book urgent appointments with medical specialists, even if there is a waiting list. Insiders agree that Quintessentially is the world’s greatest “fixer.”

The concierge service comes handy especially for those who travel often. It is like having a personal assistant at your beck and call, regardless of where you are in the world. Global personalities like Richard Branson, David Beckham, and Mark Zuckerberg have benefitted from Quintesentially services for years. They are the best kept secret of the scandalously rich.

Quintessentially is now in Manila. Its presence in the country is a testament to the nation’s growing prosperity.

 

Andrew J. Masigan is an economist.

Equities seen ripe for consolidation after 8,500

LOCAL STOCKS may find fresh impetus for a lunge at the 8,500 mark this week following the death of two terrorist leaders that could spell the end of the more-than-four-month siege of Marawi City, before consolidating for some time, according to one analyst yesterday.

Trading was suspended on Monday due to a transport strike that nevertheless failed to paralyze Metro Manila and other major urban centers, as intended, since other major jeepney organizations stayed away.

“There has been a development in the Marawi and that will be a positive in tomorrow’s news,” Summit Securities, Inc. President Harry G. Liu said in a telephone interview on Monday (Read story on S1/9).

“I think the 8,500 is easily breached then,” Mr. Liu added.

“From there, hopefully, there is consolidation in the medium-term so that we can go higher levels strongly.”

Defense Secretary Delfin N. Lorenzana yesterday announced that government forces had finally killed Isnilon Hapilon, self-styled leader of the Islamic State in Southeast Asia, and Omarkhayam Maute, one of two brothers who allied with Mr. Hapilon to take over Marawi City last May 23, according to Reuters. The US had offered a $5-million bounty for information leading to Mr. Hapilon’s arrest, describing the 51-year-old as a leader of the Abu Sayyaf group, which the US considers a “foreign terrorist organization.”

“The Marawi incident is almost over and we may announce the termination of hostilities in a couple of days,” Reuters quoted Mr. Lorenzana as saying.

The Marawi crisis has been cited by credit raters and other analysts as a cause for concern in terms of the country’s attractiveness to investments, even though solid macroeconomic fundamentals should hold sway in seasoned investors’ minds.

The Philippine Stock Exchange, Inc. (PSEi) has been closing at successive new record highs since September, the last one recorded on Friday last week, when PSEi ended at 8,447.94, up by 23.5% year to date. Drivers have been mixed, as persistent optimism over looming enactment of the first of up to five tax reforms that will help finance an ambitious infrastructure build added to impetus provided by bourses elsewhere.

Sought also for comment, Regina Capital Development Corp. Managing Director Luis A. Limlingan, recalled that “[w]e had two consecutive years when the index fell flat.”

“I guess now we’re just making up for those two weak years.”

Many Asian bourses ended strongly yesterday, including the Nikkei 225, Hong Kong’s Hang Seng Index, South Korea’s KOSPI and the Jakarta Composite index closing 0.47%, 0.76%, 0.26% and 0.43% higher, respectively, although the Shanghai Composite Index slid 0.35%.

Mr. Liu said he sees support level this week at 8,400 and resistance at 8,500-8,550. PSEi is “still on an upward” trend, he said, adding that “fundamentals should just continue to be positive and we will see higher ground.” — JCL

Rule 7.13

Even now, the controversial call that overturned a crucial out in the bottom of the seventh inning of Game One of the National League Championship Series (NLCS) remains a hot topic of discussion in baseball circles. Judging from the reactions in social media and of armchair pundits, the verdict is split. One side has argued that Willson Contreras violated a rule by blocking home plate before receiving the pass. The other has claimed that Charlie Culberson was rightly called out following a heads-up play. “All rules or laws aren’t necessarily good ones,” argued Cubs manager Joe Maddon, who was tossed for contesting the decision following a review prompted by the Dodgers’ protest. “That was a beautifully done major league play that gets interpreted tantamount to the soda tax in Chicago.”

Were tradition the sole determinant, Maddon would be right. The sport’s annals are littered with examples of catchers protecting home plate by blocking the path of the base runner with or without the ball in their hands. Since Rule 7.13 was instituted in 2014, however, examples have dwindled; “unless the catcher is in possession of the ball,” it notes, “the catcher cannot block the pathway of the runner as he is attempting to score. If, in the judgment of the umpire, the catcher without possession of the ball blocks the pathway of the runner, the umpire shall call or signal the runner safe.” And considering how Contreras’ tag of Culberson unfolded, the aforesaid provision applies.

The replay is clear. Contreras stuck his left leg out to prevent the left hand of Culberson, who actually tried to avoid him by sliding to his side, from touching home plate. And, nope, the ball was not yet with him when he did so. Parenthetically, it bears pointing out that had the rule not been in place, he would likely have been the target of a vicious takedown aimed at making him lose possession of the ball. In other words, the edict succeeded in its objective; it prevented him from incurring injury.

Don’t tell that to Maddon, though. As far as he’s concerned, the rule underscores just how soft pro baseball has become. He spoke out against it long before Game One of the NLCS, and will continue to do so, especially after it was applied to his detriment. In fact, he has already talked to Major League Baseball chief baseball officer Joe Torre about it over the phone, and plans to “have [a] sit-down face to face about what I said.” Needless to say, he has Contreras agreeing with him. “I think we need to go to WalMart, get some toys, and then play,” the catcher said.

In any case, Maddon would do well to look beyond crew chief Mike Winters’ decision in assessing the cause of the Cubs’ Game One loss. For this, the blame lies squarely on the shoulders of those who comprise the bullpen; heading into Game Two, they sported an atrocious 6.97 earned run average through the postseason, reflecting location issues that have plagued them from the All-Star break. And these were evident anew yesterday, with John Lackey giving up a three-run, walk-off homer via a middle-of-the-zone fastball. Incidentally, in no instance was Rule 7.13 invoked.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

Home sales in Singapore drop on ‘Hungry Ghost’ month

SINGAPORE — Singapore home sales fell in September as developers marketed fewer projects in a month considered inauspicious by Chinese homebuyers.

Developers sold 657 units last month, down from a revised 1,246 in August, according to Urban Redevelopment Authority data released Monday. That’s the lowest sales since January. A total of 73 new units were offered, down from 794 in August, the data showed.

The seventh month of the lunar calendar year, known as the Hungry Ghost Month, is a time homebuyers avoid property purchases. This year, that period lasted for the latter part of August and most of September.

Despite a slow month, Singapore’s property market is showing signs of a turnaround. Home prices rose for the first time in four years, snapping a record run of declines and confirming recent signs that the property market is rebounding. An index tracking private residential prices gained 0.5% in the three months ended Sept. 30 from the previous quarter, according to preliminary data from the Urban Redevelopment Authority released Oct. 2.

Developers have sold about 9,000 units this year, eclipsing the full-year totals for 2014 to 2016. Still, the bulk of Singapore’s cooling measures rolled out since 2009 remain in place. Before the latest data, a 15-quarter decline in prices was the longest since the residential index was first published in 1975.

Developers launched new units in some older projects last month. Stars of Kovan marketed 25 new units last month while Sims Urban Oasis launched 20 units, the data showed. — Bloomberg

Happy Death Day tops box office

WASHINGTON – Comedy horror slasher Happy Death Day had an excuse to celebrate this weekend as it stormed straight to the top of the North American box office, industry estimates showed Sunday.

With takings of $26.5 million according to Exhibitor Relations, it comfortably knocked last week’s leader, the long-awaited Blade Runner sequel, into second place. The film follows a college student who repeatedly relives the day she was murdered until she discovers who killed her.

Blade Runner: 2049 continued what has been seen as a disappointing run – halving last weekend’s earnings with takings of $15.1 million.

In at third was STX Entertainment’s The Foreigner, starring Jackie Chan as a man who seeks revenge after his daughter is killed in a terrorist attack. The action thriller took a modest $12.8 million.

Horror sensation It slipped into fourth in its sixth week in theaters, with takings dropping by over a third from last weekend to $6 million (total earnings $314.9 million). After spending its first weekend in second place, Fox’s The Mountain Between Us, starring Idris Elba and Kate Winslet, fell to fifth, taking $5.6 million.

Rounding out the top 10 were: American Made ($5.4 million); Kingsman: The Golden Circle ($5.3 million); The Lego Ninjago Movie ($4.3 million); My Little Pony: The Movie ($4 million); and Victoria and Abdul ($3.1 million). – AFP

MacroAsia, PTC Holdings to set up aviation school via joint venture

MACROASIA Corp. and PTC Holdings, Corp. are set to establish an aviation school scheduled to open next year.

The Lucio Tan-owned company and the crew management firm had an initial investment of $3 million for the joint venture to establish First Aviation Academy, Inc., which will be based in Subic International Airport. MacroAsia has a 51% share in the venture, while PTC has 49%.

The joint venture is seen to expand the aviation services of MacroAsia. Mr. Chua previously said the company will be focusing on its aviation-related businesses instead of growing other businesses like its mining unit, MacroAsia Mining Corp.

MacroAsia said they expect to produce more than 300 pilots and achieve about $17 million in cumulative revenue for the first five years of its operations.

MacroAsia President and COO Joseph T. Chua said that they target to provide aviation manpower to foreign airlines, as well as Philippine Airlines (PAL), which is also owned by Mr. Tan.

“We can provide substantial savings to PAL,” MacroAsia President and COO Joseph T. Chua told reporters.

Mr. Chua said that they plan to supply graduates from the school to foreign-owned airlines first, and eventually, to PAL.

PTC CEO Gerardo A. Borromeo said PTC is adapting to current industry needs regarding aviation human resources. “We need a lot of people,” Mr. Borromeo told BusinessWorld during the event. However, aside from the numbers, Mr. Borromeo said that PTC has training geared towards management capabilities of aviation professionals, particularly pilots, who are expected not only to know the technicalities of flying but knowing how to handle various situations that may arise in the aircraft.

Mr. Borromeo added that existing training by PTC for mechanics and flight attendants, “will be combined” with the aviation services of MacroAsia, such as ground handling.

MacroAsia partnered with PTC for the experience of the latter in crew management. PTC Group, the parent company of the PTC Holdings, now has a chain of diversified services, which include chartering, logistics and freight forwarding, and fuel distribution and renewable energy development. The company is known for its crew management and maritime services.

MacroAsia recorded a net income of P372.24 million for the second quarter. — Patrizia Paola C. Marcelo

Clinton accuses WikiLeaks of blunting impact of Trump tape

SYDNEY — Hillary R. Clinton Monday accused WikiLeaks of working with Russia to deflect attention away from an infamous tape of Donald J. Trump bragging about groping women in the run-up to the US presidential election.

The former secretary of state’s devastating election loss to Mr. Trump remains raw and she again lashed out at WikiLeaks founder Julian Assange and his alleged role in damaging her candidacy.

“Assange has become a kind of nihilistic opportunist who does the bidding of a dictator,” she said in an interview with the Australian Broadcasting Corporation, referring to Russian President Vladimir Putin.

“WikiLeaks is unfortunately now practically a fully-owned subsidiary of Russian intelligence.”

The US intelligence community concluded Mr. Putin ordered an influence campaign to discredit Ms. Clinton and had a “clear preference” for Mr. Trump in last year’s poll.

Ms. Clinton used the bombshell Trump tape as an example of how WikiLeaks allegedly tried to deflect attention away from a bad news story, resurrecting the incident in the wake of Hollywood mogul Harvey Weinstein’s fall from grace over his treatment of women.

In the 2005 videotape, which surfaced in October last year, Mr. Trump brags about being able to get away with groping women.

“When you’re a star, they let you do it,” he said. “Grab them by the pussy. You can do anything,” Mr. Trump added.

Mr. Trump said the comments were “locker-room banter.” Several women subsequently accused him of sexual misconduct, which he denounced as lies.

Within hours of the tape emerging, WikiLeaks published more than 2,000 hacked e-mails from the personal account of Ms. Clinton’s campaign chair John Podesta, which she said blunted its impact.

“WikiLeaks, which in the world in which we find ourselves promised hidden information, promised some kind of secret that might be of influence, was a very clever, diabolical response to the Hollywood Access tape,” she said, referring to the Trump recording.

“And I’ve no doubt in my mind that there was some communication if not coordination to drop those the first time in response to the Hollywood Access tape.”

Reacting on Twitter, Mr. Assange attacked Ms. Clinton as “creepy.”

“There’s something wrong with Hillary Clinton. It is not just her constant lying. It is not just that she throws off menacing glares and seethes thwarted entitlement,” the Australian tweeted with a link to the ABC interview.

“Watch closely. Something much darker rides along with it. A cold creepiness rarely seen.”

Ms. Clinton claimed WikiLeaks’ actions were motivated by Mr. Assange’s personal dislike of her.

“I had a lot of history with him because I was secretary of state when WikiLeaks published a lot of very sensitive information from our State Department and our Defense Department,” she said.

“If he’s such a martyr of free speech, why doesn’t WikiLeaks ever publish anything coming out of Russia? You don’t see damaging, negative information coming out about the Kremlin on WikiLeaks,” Ms. Clinton added.

Mr. Assange, who has spent five years inside the Ecuador embassy in London to avoid extradition to Sweden on sexual assault charges, has denied Russia was the source behind the leaked documents. — AFP

Businesses get green light to tap CAFGUs for security

THE BUSINESS sector, particularly banana companies, has been given the go signal by the military to tap the Citizen Armed Force Geographical Units (CAFGU) to help guard their facilities. Lt. Gen. Rey Leonardo B. Guerrero, commander of the Eastern Mindanao Command, said members of the paramilitary unit are ready to enhance the security forces of companies in areas threatened by communist rebels. “CAFGUs will communicate with the stakeholders in the area,” Mr. Guerrero said last week following a proposed agreement between the Department of National Defense and the banana companies, which continue to be the target of extortion and violent attacks by the New People’s Army (NPA). Based on the military’s estimate, the NPA has collected some P1.3 billion from businesses in the Davao Region this year. Mr. Guerrero, who spoke on behalf of Defense Secretary Delfin N. Lorenzana during the banana congress last week, also said the military will intensify its support to the companies by ensuring peace and order in their areas. Other parts of Mindanao where extortion activities are rampant are in Surigao del Sur, South Cotabato, Compostela Valley, Sarangani, and Davao City. — Carmelito Q. Francisco

Dispelling some of the Philippines’ FDI fears

By Euben C. Paracuelles

FOREIGN direct investment (FDI) has received increased attention from locals in recent days after Senator Franklin Drilon from the opposition highlighted a “very alarming” drop in FDI this year as a “serious concern (ABS-CBN News).” He cited that the equity capital component of FDI fell by 90.3% year on year in 1st half of 2017.

We think this represents only part of the FDI picture and thus may be misleading. Overall FDI inflows fell by a much smaller 14% year on year in 1st half of 2017. In addition, year-on-year FDI data are distorted by a large base effect from the foreign purchase of a large stake in a local bank last year, which led to a surge in inflows of about $2 billion in April 2016.

After stripping out this base effect, we estimate total FDI inflows are up about 65% year on year in 1st half of 2017.

Given the chunky nature of FDIs, we prefer to gauge underlying trends by looking at FDI levels on a 12-month rolling sum basis, which are still clearly showing a pickup despite the political transition.

The latest release from the Bangko Sentral ng Pilipinas (BSP) also shows that, for July, equity capital already rose sharply to $131 million from the monthly average of $23 million in 1st half. This is likely to pick up further in the near term due to two large impending acquisitions. One is for a stake in an energy company ($1.3 billion) (Reuters) and the other is a buyout of a tobacco operator ($1 billion) (Rappler).

Moreover, debt instruments have been the bigger driver of FDI over the last few years. Although some investors argue that this category of FDI does not represent actual foreign exchange flows (which may be why Drilon excluded these data), it is defined as “lending by parent companies abroad to their local affiliates to fund existing operations and business expansion,” which is consistent with international standards and alleviates these concerns. (The other component that’s growing on a year-on-year basis is retained earnings. However, on a trend basis, this has also been very stable.)

Importantly, in the longer term, we think equity FDI is set to pick up given rising potential growth and more FDI-friendly reforms.

Following the 2014 liberalization of the banking sector, ten new foreign entrants are already operating in the country and, as we understand it, there are eight more in the pipeline.

Other reforms such as the shortening of the negative investment list and the roll-out of some foreign-funded infrastructure projects are also likely to be implemented.

We are watching political risks, particularly from a further decline in President Duterte’s popularity, as these could have implications on the execution of reforms.

However, our view of a positive growth outlook remains. We believe this bodes well for underlying FDI prospects, even if monthly volatility in the data continues.

 

Euben C. Paracuelles is the ASEAN economist of Nomura.

ASEAN single-window platform TradeNet seen launching by Dec.

THE Department of Finance (DoF) is set to roll out its trade facilitation platform to the Association of Southeast Asian Nations (ASEAN) Single Window (ASW) by December this year, starting with the most-traded commodities.

Finance Undersecretary and Chief Economist Gil S. Beltran said that the program, called TradeNet, will perform the functions of the country’s National Single Window (NSW), allowing traders to use the system to apply for import and export permits for shipments, in a single agency.

He said that the program will initially be applicable to imports, or exports of rice,  sugar, used motor vehicles, chemicals (toluene), frozen meat, medicine (for humans, animals or fish) and cured tobacco.

“The initial deployment will allow traders to use the system for the first seven commodities that represent 50% of the total trade volume of the Philippines,” Mr. Beltran was quoted as saying in a statement from the DoF yesterday.

The NSW, which  will eventually be interconnected by December to the ASEAN Single Window, is a regional initiative that aims to speed up cargo clearances and promote economic integration by enabling the electronic exchange of border documents among the organization’s 10 member-states.

According to Mr. Beltran, there are at least 16 agencies involved in the processing of permits for the trade of the said commodities.

These include the  Bureau of Animal Industry (BAI), National Tobacco Administration (NTA), Fair Trade and Enforcement Bureau (FTEB), National Food Authority (NFA), Bureau of Plant Industry (BPI), Food and Drugs Administration (FDA), National Meat Inspection Service (NMIS), Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC).

Other goods will be “progressively placed,” in TradeNet in coordination with other government agencies.

The program aims to shorten the processing time of import/export clearances, reduce the number of transactions and required documents to be submitted, and remove red tape that has plagued businesses and citizens dealing with the government.

On top of facilitating trade, the program will “heighten transparency in customs procedures and improve revenue collection.”

“The steering committee handles the NSW and aims at facilitating trade transactions. We want, as much as possible, to reduce processing time, cut transaction costs and enhance competitiveness. The NSW is one of the most important reforms in government,” said Mr. Beltran, who also chairs the NSW panel.

“We are all performing important functions that will impact our [country’s] capability to generate investments. This is the reason why NSW was created,” he added.

In 2015, the country committed to join the ASW by the second quarter of 2016; but the BoC canceled the initial bidding process that year, claiming there were other data systems that are more cost-effective.

Of the 10 ASEAN member states, only Indonesia, Malaysia, Singapore, and Thailand have successfully integrated into the ASW. — Elijah Joseph C. Tubayan

Fed sees more rate hikes

BOSTON — The Federal Reserve will probably need to raise interest rates in December and then three of four times “over the course of next year,” assuming the US unemployment rate continues to fall and inflation rises, Boston Fed President Eric Rosengren said.

If inflation reaches the Fed’s goal while the unemployment rate, now at a 16-year low of 4.2%, is below 4% that may be a signal that the economy could be overheating, Rosengren suggested in an interview.

To stabilize inflation at 2%, Rosengren said, “you might have to overshoot” by pushing rates higher than the level expected in a healthy economy. In September, Fed officials estimated that so-called neutral rate to be 2.8%.

The comments mark Rosengren, who does not vote on policy this year, as slightly more hawkish than most of his colleagues.

The Fed left rates unchanged last month, but signaled it would likely raise them again in December, and three more times next year.

Still, Rosengren’s view lags the faster rate-hike path signaled by many monetary policy rules, including one authored and championed by Stanford University professor John Taylor.

Rosengren spoke at an interview on Saturday at the close of a two-day conference on monetary policy rules, during which Taylor gave a formal presentation.

Taylor, among several candidates being considered by President Donald Trump to run the US central bank after Fed Chair Janet Yellen’s term ends in February, has long argued that the Fed has kept rates too low for too long because of the risk of unwanted inflationary pressures.

Taylor also embraces legislation, now under consideration by the US Congress, that would require the Fed to follow a monetary policy rule like his when setting policy. That is a requirement resisted by many Fed officials, including Yellen and Rosengren, who said at the conference that legislating a monetary policy rule would be “counterproductive.”

Still, asked how he would feel if the next Fed chair wanted to enshrine a rule that suggests a faster pace of rate hikes into law, Rosengren sounded unbothered.

“My hope would be that they were flexible and pragmatic enough that if the rule wasn’t working particularly well that they would make adjustments,” he said. — Reuters

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