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Chinese businesses to face new naming restrictions – state media

Chinese enterprises will be banned from using words like “China”, “Chinese” or “State” in their names, the Communist Party-run People’s Daily newspaper said on Tuesday, citing draft proposals from market regulators.
China has become increasingly wary about the use of sensitive language and imagery for commercial or entertainment purposes. It has also taken action to ban the misuse of the national anthem as well as satirical representations of historical and even fictional heroes.
The new draft rules issued by the State Administration for Market Regulation said the use of certain words in company names was “detrimental to the interests of state and society” and needed to be banned.
The new rules would also ban non-state firms from describing themselves as “Central”, “Nationwide”, “State” or “International”.
The new restrictions would allow, for example, a company to name itself “Acme China Jewellery” but not “China Acme” unless it gains the explicit approval of the State Council, China’s cabinet.
Companies will also be banned from using words for foreign countries, regions, companies or organisations, or deploy any name designed to deceive or mislead the public, the People’s Daily said.
The paper did not say whether the name restrictions were linked to intellectual property issues that have been raised in trade disputes between the United States and China. — David Stanway, Reuters

Moody’s expects sovereign green bond issuance to accelerate

By Cathy Rose A. Garcia, Associate Editor
Sovereign green bond issuance is seen to pick up pace, as governments promote sustainable policy agendas and encourage the flow of capital into low-carbon and climate-resilient infrastructure, according to a report by Moody’s Investors Service.
“A diverse deployment of green bond proceeds will attract investors, but sovereigns face challenges in terms of their ability to provide granular impact reporting and effective proceeds management,” Moody’s said in a July 9 report, “Green Bonds – Sovereign.”
“Ultimately, the scaling up of sovereign green finance will require sustained political support.”
Seven sovereigns have so far sold green bonds totaling $25.5 billion, raising funds for climate mitigation programs.
The government of Poland unveiled the first sovereign green bond issue in December 2016, followed by France, Fiji, Nigeria, Belgium and Lithuania. The Indonesian government issued the first sovereign green sukuk earlier this year.
“We expect the pace of sovereign green bond issuance to accelerate over the coming years,” Moody’s said. “Firstly, green bond issuance provides a strong signal of a government’s commitment to its climate and environmental policy agenda and, in particular, how it intends to raise capital to implement its Paris Agreement commitments.”
It noted sovereign green bond issuance also allows governments to channel private sector capital into green and sustainable investments.
“Public financing will be also critical in enhancing an economy’s climate resilience, given that governments (both at a national and sub-national level) are typically the first line of defense in dealing with the aftermath of extreme weather events and/or natural disaster,” Moody’s said. “Other sovereigns, particularly in emerging markets, may also look to green bonds as an attractive means to finance large-scale climate adaptation and resilience investments.”
Moody’s also said the deployment of sovereign green bond proceeds to a diverse array of projects will support investor demand. This is in contrast to the broader green bond market, where funds are mostly used for energy-related projects.
“Sovereigns tend to spend a higher proportion of proceeds on clean transportation, waste management, land use, and climate adaptation projects, compared to the broader market which predominantly funds energy-related projects,” it said. “This trend will support market growth and maturity as it allows green investors to diversify exposure and non-sovereign issuers to consider financing a broader suite of projects.”
However, Moody’s noted that consistent impact reporting is a challenge as sovereigns tend to allocate proceeds to intangible spending.
“The challenge of impact reporting on a more diverse set of project types is reflected in the wide variety of impact metrics cited in sovereign green bond frameworks, limiting the ability to compare or aggregate the environment benefits derived from green bonds,” it said.
Moody’s said sovereign issuers are taking steps to manage the proceeds from green bonds, despite complexities of public finances.
“The intricacies of central government financing, such as intergovernmental fiscal transfers, make it difficult to ensure effective segregation and tracking of green bond proceeds and raise potential double counting issues,” it said. “Nevertheless, sovereign issuers are addressing the challenge of proceeds management in a variety of ways. Some governments have ring-fenced proceeds into dedicated green bond accounts.”
There are no plans for the Philippine government to issue green bonds.
Last month, the International Finance Corporation (IFC) issued $90 million worth of peso-denominated green bonds called the “Mabuhay Bond.”
“IFC will use the proceeds of the bond to finance the Energy Development Corporation’s (EDC) capital expenditure program, which is focused on optimizing the generation output of its geothermal power plants and improving resiliency to climate impacts,” the statement read.
EDC and its subsidiaries own and operate a diversified portfolio of renewable energy projects in the Philippines with a total installed capacity of 1,472 megawatts, including geothermal, hydro, wind, and solar projects as of end-2017.

Rain adds urgency to rescue of last five trapped in Thai cave

Rescuers raced to save four young footballers and their coach who remain trapped in a flooded Thai cave Tuesday, as heavy rains threatened an already perilous escape mission that has seen eight of the boys extracted in “good health”.
The members of the “Wild Boars” team, aged between 12 and 16, were guided to safety through the twisting, submerged passages of the Tham Luang cave by a team of international expert divers flanked by Thai Navy SEALs over two days in a meticulously planned operation.
The emergence of the second batch of four on Monday evening was greeted with a simple “Hooyah” by the Thai SEAL team on their Facebook page, an exclamation that lit up Thai social media.
“All eight are in good health, no fever… everyone is in a good mental state,” Jesada Chokedamrongsuk, permanent secretary of the public health ministry, told reporters Tuesday at Chiang Rai hospital in the clearest update on their condition so far.
The boys underwent x-rays and blood tests and two who had signs of pneumonia were given antibiotics and are in a “normal state”, he said, adding they will all remain under observation in hospital for a week.
The ups and downs of the rescue bid has entranced Thailand and also fixated a global audience, drawing comments of support from celebrities as varied as US President Donald Trump, football star Lionel Messi and tech guru Elon Musk.
Thailand’s junta leader welcomed Musk into the cave complex late Monday, with the American later tweeting a standing offer of a mini-submarine escape pod to help the remaining five leave the tunnels.
Fresh rains on Tuesday added urgency to the final stages of the treacherous rescue bid, several kilometres inside a mountain and through flooded, tight corridors.
Infection risk
It was unclear what time the rescue effort would resume on Tuesday, with operations chief Narongsak Osottanakorn telling reporters divers had crafted plans to extract four people at a time.
“If we bring five we have to change the plan,” he told reporters late Monday.
A rescue official, speaking on condition of anonymity, told AFP the timings of Tuesday’s dives were not yet set.
“But I guarantee they will all be safe,” he added, reflecting an increasingly bullish attitude after two successful operations so far.
Thai authorities said the first four rescued Sunday have been kept in quarantine until the risk of infection subsides.
Information on the rescue operation, the health of those rescued — and their identities — has been tightly guarded by Thai authorities.
But the progress of a rescue, which early on had looked like it could be stalled until after the monsoon season, has brought joy to the friends and family of the stricken group.
“I want him to be healthy and come back to study quickly,” Phansa Namyee, classmate of 16-year-old footballer Night said.
“I want to go play with them… take him to some restaurants and spend time together.” — AFP

Saudi women allowed to become notaries for first time

Women in Saudi Arabia have for the first time been allowed to become notaries, with 12 granted permission to start working in the profession, the justice ministry said Monday.
The move comes amid a reform drive in the ultra-conservative kingdom that saw the authorities lift a ban on women drivers in June.
As notaries the women can now issue and cancel powers of attorney, and certify documents to help establish companies or transfer property rights, the ministry said.
The modernization push is being spearheaded by Crown Prince Mohammed bin Salman as he seeks to improve Saudi Arabia’s image and wean the economy off its dependence on oil.
Despite the changes women still lack fundamental rights in Saudi Arabia.
Under a strict guardianship system they still require permission from their closest male relative on basic decisions like enrolling in classes, renewing their passport, or undergoing some medical procedures. — AFP

Starbucks to phase out plastic straws by 2020

Global coffee giant Starbucks announced Monday it is to eliminate all plastic straws from its 28,000 stores by 2020, becoming the latest corporate giant to take steps to combat pollution from disposable plastic.
After months of tests, many of them carried out in Britain, the firm announced the news on Twitter.
The plastic straws will be replaced by recyclable lids that have a small raised opening allowing consumers to sip their drink, a model that has already been road tested on some of the company’s cold beverages in the US and Canada.
Plastic straws have proven difficult to recycle, not because of the material they are made from but because they are too slim for recycling production lines to effectively sort through. The new lids, made of polypropylene, will be big enough for machines to recycle, Starbucks said.
“Starbucks is finally drawing a line in the sand and creating a mold for other large brands to follow,” said Chris Milne, director of packaging sourcing. “We are raising the water line for what’s acceptable and inspiring our peers to follow suit.”
The store will automatically offer cold drinks with the new sipping lid, but for “frappuccinos,” a coffee mixed with ice, the store will offer paper straws or ones made of a compostable plastic based on fermented plant starch. Customers who prefer a straw with their drink can ask for one.
By not automatically offering straws with drinks, Starbucks estimates it will save a billion straws a year.
Numerous advocacy groups, including Ocean Conservancy, welcomed the move. Several European countries and cities in the United States are mulling restrictions on the use of plastic straws, although outright bans are still rare. In the US, Seattle — hometown of Starbucks — is the only major city to have so far banned the use of plastic straws in its eateries.
Pressure from consumers is driving many companies to tackle waste from packaging. McDonald’s is road testing the use of biodegradable straws for its drinks. — AFP

China's factory-gate prices rise in June

China’s factory price inflation rose in June, the government said Tuesday, as a trade war threatens producers in both of the world’s top two economies.
The producer price index (PPI) rose 4.7 percent year-on-year, according to the National Bureau of Statistics (NBS), a notch above the 4.5-percent gain forecast in a Bloomberg News survey.
The consumer price index (CPI), a main gauge of retail inflation, rose 1.9 percent last month on-year, up from 1.8 percent in May and in line with Bloomberg’s forecast.
There are fears that the trade war with the US could stoke inflation, with tariffs making imported goods more expensive in China.
American soybeans are used for cooking oil and animal feed in China, and soybean traders say that in the fourth quarter, when soybean production tails off in Brazil — the only other major exporter — China may have no choice but to import more costly US soybeans.
Beijing late Monday encouraged companies to diversify away from the US.
Companies should “adjust their import structure, increase the import of soybeans, soybean meal and other agricultural products, as well as aquatic products and automobiles from other countries and regions,” the commerce ministry said in a statement.
Analysts worry that if substitutes are not found, the price hikes will translate into higher prices for pork and other food at the dinner table for Chinese families.
Last month, the price of pork rose 1.1 percent after falling this spring, but food prices more generally fell 0.8 percent. — AFP

Hoops-mad Philippines finally catches case of World Cup fever

Shirts are selling briskly, crowds pack sports bars to watch matches and football is front-page news. Whisper it quietly, but basketball-crazy Philippines has finally been afflicted by World Cup fever.
For decades, the nation of more than 100 million was on a very short list of global locations that had failed to fall for the beautiful game.
That is beginning to change as football’s narrow, but passionate, Filipino following grows fuelled by success of the national team whose new coach is former England great Terry Butcher — a World Cup semi-finalist with the Three Lions in 1990.
“Definitely, we do have… World Cup fever,” television sportscaster Bob Guerrero told AFP outside a Manila bar where he was watching France knock Argentina out of the global tournament.
“We’re hoping that it’s going to be a snowball effect and football will really start to grow here in the Philippines,” said Guerrero, who works for top TV network ABS-CBN who are airing World Cup matches live.
Grow it may, but at the moment there are only an estimated 1.5 million football-playing Filipinos compared to figures claiming that some 40 million regularly flock to the basketball courts that populate every barangay (borough) across the archipelago.
It’s a love affair that goes back to the 1900s when basketball was introduced to the archipelago by the Americans. Rather than reject the pastime of their colonial masters, Filipinos made it their own.
Elegance and stray dogs
It became part of the curriculum in schools and since then Philippine squads have played respectably on an international level. Basketball’s governing body FIBA has them ranked 30th out of 159 nations, just behind China.
But, until recently Philippine love and prowess in hoops was missing from their football team, a gap evident even in the nicknames of the respective squads.
The Philippines basketball team are dubbed the “Gilas”, the local word for elegance, while the football team are called the “Azkals” which is a slang term for stray dogs.
“When I arrived, the football community was very small,” said Azkals captain Phil Younghusband, who made his debut in 2009.
“You can probably count in the hundreds the people who were aware of football and playing football.”
The former youth player with English Premier League club Chelsea is one of a wave of photogenic foreign-based players of part-Filipino parentage recruited by the Azkals.
In a few short years they have vaulted the team to qualification for the Asian Cup for the first time, and in May they hit their highest ever FIFA ranking of 111th in the world.
That success comes on the heels of the launching last year of the country’s first pro-league, the Philippines Football League, which added to the momentum.
Experts say the Azkals’ steady rise, which has given fans hope of international success, has been key to the game’s growth spurt of popularity in recent years.
“We’re small (people). Let’s face it we can’t be world champions in basketball,” said Edwin Gastanes, general secretary of the Philippines Football Federation.
“Our physique, our skill, moves and agility are really very good for football. That’s why we have a chance there,” he added.
Global goal
The Azkals have never qualified for the World Cup, but Butcher last month made that his goal for the side after they make their Asian Cup debut in the UAE in January.
“There is a hype now,” said Francis Castilla from sport marketing firm MMC Sportz . “Everybody wants to jump in on the (Azkals’) achievement.
“It’s the bandwagon. The problem will be how to sustain it.”
Other similarly less football-minded nations have seen their love for the game grow via increased television coverage, which marketers say stimulates attendance at stadiums.
It was key in bringing cricket-mad India into the football fold, yet air time is still scarce for the game in the Philippines. Basketball and boxing dominate.
The next steps for Philippine football will be strongly influenced by the nation’s youth — and there are more and more enthralled by the beautiful game.
Kevin Raymond Sales, 15, has been in love with football for years and has been trying to stay up to watch late-night World Cup matches.
He’s hooked on the dramatic personal stories of players who rose from poverty or teams from tiny nations taking out powerhouses 10 times their size.
“It’s something inspirational and it’s inspired me personally to carry on with football, to play the sport with all my heart,” he said.— Cecil Morella and Ayee Macaraig, AFP

Asian markets mostly up as earnings distract from trade woes

Asian markets mostly rose on Tuesday following another strong lead from New York, as optimism about the US economy and the beginning of the earnings season provide a distraction from trade tensions.
After weeks of losses across the world, investors moved back in on Friday as the tit-for-tat tariffs between Beijing and Washington had already been factored in and attention shifted to US jobs and corporate results.
Wall Street’s three main indexes closed with more healthy gains Monday, building on a rally that has been given life by another forecast-busting US jobs report.
“For a change, all is quiet on the … trade war front as the drop in aggressive US tariff posturing and the (jobs data) after effects have propelled US equity markets to their third consecutive day of substantial gains,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“For the time being robust US economic data is offsetting concerns about rising trade tensions.”
However, he added a word of warning that “markets remain deceptively tricky and could be even more so as we enter the US dog days of summer”.
The positive sentiment and US economic optimism has lifted the dollar against the safe haven yen, helping Tokyo’s Nikkei end the morning session one percent higher.
Hong Kong put on 0.7 percent, Shanghai added 0.3 percent and Singapore climbed more than one percent. Seoul gained 0.5 percent, Taipei edged 0.3 percent higher, while Manila and Jakarta were also well up.
Boris hits pound
Rodrigo Catril, senior strategist at National Australia Bank, said: “No new news from the US-Sino trade war has helped investors focus back on fundamentals and with the US earnings season starting later this week, the US has led the gains in equities overnight.”
The reporting season for April-June kicks off in the US this week and there are hopes another outstanding set of reports can put some fizz back into world markets.
Also on the radar this week is the release of Chinese trade data, which will be pored over for an idea about what impact the ongoing row with the US has had so far on the world’s number two economy.
On currency markets the pound is holding up against the dollar after tumbling Monday in reaction to news that Britain’s Foreign Secretary Boris Johnson had resigned citing his displeasure at a cabinet post-Brexit deal.
While the pro-Brexit minister had been seen as a thorn in Prime Minister Theresa May’s side, observers said the news increases the chances she will face a possible leadership challenge, throwing Britain into fresh turmoil and the possibility of another general election.
His decision came hours after May’s point man on Brexit talks with the EU also stepped down over the agreement.
Oil prices rose again on expectations of US sanctions on key producer Iran, clashes in Libya that are choking output there and ongoing political and economic uncertainty in Venezuela.
Key figures around 0300 GMT
Tokyo – Nikkei 225: UP 1.0 percent at 22,278.51 (break)
Hong Kong – Hang Seng: UP 0.7 percent at 28,878.25
Shanghai – Composite: UP 0.3 percent at 2,823.28
Euro/dollar: UP at $1.1750 from $1.1748 at 2030 GMT
Pound/dollar: UP at $1.3250 from $1.3246
Dollar/yen: UP at 111.01 yen from 110.82 yen
Oil – West Texas Intermediate: UP 20 cents at $74.05 per barrel
Oil – Brent Crude: UP 23 cents at $78.30 per barrel
New York – Dow: UP 1.3 percent at 24,776.59 (close)
London – FTSE 100: UP 0.9 percent at 7,687.99 (close)
— AFP

Trade gap widens as exports decline for fifth straight month

Exports declined for the fifth straight month in May while imports grew by double-digits, reported the Philippine Statistics Authority Tuesday morning.
Exports declined by 3.8% to $5.76 billion in May, better than the 4.9% contraction seen in April, but worse than the 2.4% recorded in May 2017.
The latest merchandise export figure brought full-year receipts to $26.91 billion, down 5% from $28.33 billion in the same five months last year.
The country’s balance of trade in goods expanded to a $3.7 billion deficit in May from $2.51 billion in a year ago as imports grew by double-digits. The country’s import bill increased 11.4% to $9.46 billion during the month, slower than the 23.1% seen in April and 20.2% in May 2017.
Year to date, merchandise import grew by 10.9% to $42.68 billion.
The United States is the Philippines’ top export market in May with a 14.6% market share at $840.15 million followed by Hong Kong’s 13.8% ($796.47 million) and China’s 13.2% ($761.4 million) market shares.
Meanwhile, China was the country’s top source of imports with a 20.3% in May ($1.92 billion) followed by South Korea’s 10.3% ($978.61 million) and Japan’s 9.5% ($901.27 million) market shares. — Lourdes O. Pilar

Gov’t plans P1-trillion 2019 borrowing

By Elijah Joseph C. Tubayan
Reporter
THE GOVERNMENT plans to borrow up to P1.189 trillion in 2019 to help finance its spending plan, 33.85% more than the P888.23 billion initially programmed for this year, National Treasurer Rosalia V. De Leon told reporters in a mobile phone message on Monday.
Of next year’s total, P891.7 billion will be sourced locally and P297.2 billion from external creditors. The Development Budget Coordination Committee in its July 2 meeting finalized a 65-35 borrowing ratio in favor of domestic sources for 2018, and a 75-25 ratio for 2019 to 2022.
“For next year… it all depends on how the market external and domestic (conditions) play out,” Ms. De Leon said.
“If we can be able to tap more going into next year then we can go into that 75-25. Otherwise, we’ll have to see if there will also be good opportunities for doing more external financing — new external meaning to say not just our commercial borrowings, but even the ODA (official development assistance), we can increase our program loans.”
Ms. De Leon said the government could still revise its borrowing program “depending on market conditions.”
Traders interviewed on Monday said that the government faces stiffer borrowing costs here and abroad, with the Bangko Sentral ng Pilipinas (BSP) itself raising policy interest rates by a cumulative 50 basis points in its May and June policy reviews after keeping them steady for nearly four years.
And with inflation expected to peak this quarter further past an official 2-4% full-year target — June saw a fresh five-year-high 5.2% overall price surge that spurred the year-to-date pace to 4.3% — some analysts expect a third rate hike at the Aug. 9 meeting of the BSP’s Monetary Board.
AT A DISADVANTAGE
“They’ll (government) have to give in to higher rates because inflation is going up. But we don’t know yet if the latest (inflation) figure is the peak considering rate hikes by BSP will be felt next year. So we don’t know if the (interest) rates will go up,” one trader said in a telephone interview on Monday.
“They (BSP) might hike this coming August because of the pressures on the local currency market.”
Another trader said that the government will be at a disadvantage now that it is forced to accept more bids with higher yields sought.
“[In t]he past auctions they kept on rejecting; so they’re quite behind on their requirements. Actually we’re expecting another rate hike as we need to catch up with the real rates. So we’re expecting the hike this August,” she said in a separate phone interview.
“The high side in the Treasury bills results is already higher by a quarter basis points,” the trader noted.
“Definitely they have to really increase the rates as much as they want to deny it that inflation is supposedly transitory, but the data shows otherwise. So they would really be forced to accept the bonds at a higher cost.”
MORE FROM OFFSHORE MARKETS
Ms. De Leon said that the government has also been considering the euro bond market, apart from the planned yen-denominated “samurai” bond sale by early fourth quarter and will proceed with the planned dollar-denominated global bonds.
“We are also looking at the euro market, pero kasi by that time — August of 2019 — baka mag-taper na rin si (European Central Bank President Mario) Draghi. So we’ll also have to see about the euro market,” the National Treasurer said.
Also planned some time in the future is another sale of renminbi-denominated “panda” bonds and a maiden offer of Islamic sukuk bonds.
“We will start siguro the process for the ‘panda’ (bonds) because it will take some time. We might be again tapping the ‘panda’ (market) but we have to go all over again for the same process,” Ms. De Leon said.
“We are also looking at the sukuk, there would still some regulatory challenges there.”
Ms. De Leon earlier said that there is about $2 billion borrowing space for offshore bond offers left for this year.
The government plans to spend more than P8 trillion on infrastructure up to 2022, when President Rodrigo R. Duterte ends his six-year term, in a bid to fuel economic growth to 7-8% annually up to that year.

Ownership caps intact in some sectors

THE proposed new constitution will keep restrictions on foreign ownership of companies, land and public utilities, but ease limits in media and advertising, according to a draft of the charter released on Monday.
The draft constitution also removes a single-term limit for the country’s chief executive, but President Rodrigo R. Duterte said on Friday he would not seek a second term under a new charter.
A 22-member panel that is reviewing the 1987 constitution submitted its draft to Mr. Duterte on Monday. Congress will begin debating the proposed constitution this month, aiming to put it to the public in a referendum next year.
According to the draft seen by Reuters, there is no change to the 40% cap on foreign ownership of corporations, public utilities and land. It does allow 30% foreign ownership of media and advertising businesses.
Investors have been frustrated at being shut out of some sectors in a market of more than 100 million Filipinos, either squeezed by local monopolies or regulations that limit foreign investments.
Presidential Spokesperson Herminio Harry L. Roque said the draft charter was a significant step in the move to a federal system of government that aimed to boost the economy and grant provinces more autonomy.
“We’re hoping that Congress will give it much weight,” Mr. Roque told reporters.
Under the proposed charter, all elected officials, including the president and vice-president, will serve a four-year term with possible reelection for a second term. The president and vice-president are currently elected for six years and barred from running for a second term.
Mr. Duterte and Vice-President Maria Leonor “Leni” G. Robredo will keep their position in the transition period until elections are called under the new constitution in May 2022.
Shifting to a federal system has been Mr. Duterte’s priority since coming to office two years ago, saying he will step down immediately and urge new elections under the new constitution. — Reuters

ANZ sees marginal export recovery in May, not enough to bridge trade gap

OUTBOUND SALES of Philippine goods likely recovered in May but were not enough to stop the trade gap from growing further, analysts at ANZ Research said.
In its weekly report, the global bank said merchandise exports may have grown by 0.4% in May.
The Philippine Statistics Authority is scheduled to report official trade data today.
“Export growth could have turned marginally positive in May after falling for four straight months in April. Imports on the other hand are expected to have been solid, driven by higher oil prices and the government’s infrastructure programme that is boosting capital goods imports,” ANZ said.
ANZ sees imports surging by 13.9% in May from a year ago.
Factory output is also seen upbeat, with the Nikkei Purchasing Managers’ Index separately showing continued expansion fueled by stronger domestic demand, which the bank said would offset the impact of “tepid” global demand.
“As a result, the trade deficit is expected to have increased to $3.7 billion in May from $3.6 billion in April,” ANZ added.
Merchandise exports fell by 8.46% annually to $5.115 billion in April, compared to the year-ago 22.2% increase, resulting in a 6.2% year-to-date drop to $20.955 billion in value of such shipments. That, in turn, pulled the four-month trade balance to a $12.2-billion deficit, 59.3% bigger than the $7.656-billion gap posted during the comparable year-ago period.
The government expects a wider trade gap this year as it sees imports growing by a tenth to outpace a nine percent expansion in outbound shipments of goods, according to latest projections of the Development Budget Coordination Committee.
In its third-quarter economic report, ANZ also noted that the external trade gap will likely widen further, further pressuring the current account deficit to grow and, ultimately, the peso to weaken more.
“With growth expected to remain high at 6.8% in 2018, macro imbalances are likely to intensify in the Philippines,” ANZ said.
“The current account will likely draw some support from steady remittances inflows and receipts from business outsourcing and tourism sectors. However, this is unlikely to offset the deterioration in the trade deficit.”
The BSP foresees the current account — which measures fund flows in goods and services trading — to balloon to a $3.1-billion deficit this 2018 from last year’s $2.518-billion gap. The current account settled at $208-million deficit in the first quarter, smaller than the $860-million gap in 2017’s same three months.
Economists have blamed the persistent current account deficit for the peso’s prolonged weakness at around P53 per dollar currently.
The central bank has said a “modest” deficit is typical for a rapidly growing economy, with increased imports of capital equipment projected to support economic growth. — Melissa Luz T. Lopez

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