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Taiwan President Tsai wishes China happy new year, gets warm response

TAIPEI — Taiwan President Tsai Ing-wen wished “friends” in China a happy Lunar New Year on Thursday, drawing a surprisingly warm reaction from Chinese state media which is more used to disparaging her as a dangerous separatist.

Taiwan is one of China’s most sensitive issues and a potentially dangerous military flashpoint. China considers the self-ruled island its sacred territory and a wayward province and it has never renounced the use of force to bring it under Chinese control.

China has become increasingly hostile to Taiwan since Ms. Tsai, from the pro-independence Democratic Progressive Party, won election in 2016, believing she wants to push for the island’s formal independence, a red line for China.

In a video message to mark Chinese New Year, which falls on Friday, Ms. Tsai said the festival was an important one for people on both sides of the Taiwan Strait as they share many of the same traditions.

“Through people-to-people exchanges and media broadcasts, this has narrowed the psychological gap between both sides,” Ms. Tsai said.

“I want to use this opportunity to send new year’s greetings to friends on the other side (of the Taiwan Strait) and ethnic Chinese in other parts of the world.”

China’s state-run Global Times, known for its stridently nationalistic stance and which often calls the island’s president “provincial governor Tsai,” said it would normally criticize her, but in this case would reciprocate the goodwill. — Reuters

Peso climbs vs dollar ahead of holiday

THE PESO regained strength against the dollar on Thursday on profit taking after the US currency’s recent rise and ahead of the Chinese New Year holiday.

The local currency ended the trading week at P52 against the greenback yesterday, 12 centavos stronger than its P52.12 close on Wednesday.

The peso traded stronger the whole day, opening the session at P52.08 versus the dollar, which was also its worst showing yesterday. Its intraday high, meanwhile, was seen at P51.955 to the greenback.

Dollars traded declined to $578.5 million Thursday, Feb. 15, from the $939.9 million that changed hands the previous session.

“The peso rebounded as investors started to take profits from the three-day strength of the dollar,” a trader said over the phone on Thursday.

Another trader shared the same sentiment, adding that the peso traded sideways on Thursday as “market players took profits or lightened their positions ahead of the Chinese New Year holiday.”

Meanwhile, a third trader noted that the slightly stronger peso came after the release of US consumer price index (CPI) data.

US consumer prices rose more than expected in January as Americans paid more for gasoline, rental accommodation and health care, raising pressure on new Federal Reserve chief Jerome Powell to prevent a possible overheating of the economy.

The report from the US Labor Department on Wednesday, however, likely overstates the inflation picture given that some of the price gains, especially for apparel and motor vehicle insurance, are seen by economists as unsustainable.

Inflation, which could get a further boost from a tightening labor market and increased government spending, might force the Fed to be more aggressive in raising interest rates this year than currently anticipated. That would slow economic growth.

The US central bank has forecast three rate hikes for this year, with the first increase expected at its next policy meeting in March. Powell took over the reins of the Fed from Janet Yellen earlier this month.

The US Labor Department said its Consumer Price Index increased 0.5% last month as households paid more for gasoline, rental accommodation and health care. The CPI rose 0.2% in December.

The year-on-year increase in the CPI was unchanged at 2.1% in January as the large price gains from last year dropped out of the calculation.

Excluding the volatile food and energy components, the CPI shot up 0.3%. That was the largest increase since January 2017 and followed a 0.2% rise in December. The year-on-year rise in the so-called core CPI was unchanged at 1.8% in January.

“I think the market already priced in, that’s why instead of trading [lower] due to the indicators which will lead to higher inflation, we just traded within the range,” the second trader said.

Other Asian currencies also firmed on Thursday, boosted by heftier global risk appetites as the dollar slipped despite stronger-than-anticipated US inflation and a rise in Treasury yields.

Tracking a rally in Wall Street, Asian stocks brushed aside US inflation data.

The dollar index weakened to a near two-week low, after the rebound in equities, evoking the idea that the greenback might be in a period of persistent weakness.

“The dollar advanced against other currencies when US CPI inflation was released but pared the gains and weakened later as US equities proved more resilient…,” Qi Gao, foreign exchange strategist at Scotiabank, said on Wednesday. “Continued risk appetite sent Asian currencies higher this morning, I think risk appetite will likely continue as synchronized global growth is expected to boost the [euro] and [Japanese yen], while bolstering EM (emerging market) Asian currencies as long as risk appetite sustains.” — KANV with Reuters

Stocks extend climb ahead of corporate earnings

LOCAL STOCKS reversed intraday losses to book gains on Thursday, as investors anticipate the release of 2017 earnings reports.

The bellwether Philippine Stock Exchange index (PSEi) managed to rise 0.16% or 14.33 points to close at 8,612.44 on Thursday.

The broader all-shares index was flat, adding 0.05% or 2.8 points to close at 5.075.60.

“Philippine markets fell into the same pattern once again today, falling close to 1%, but some buying opportunities pushed the close to slightly positive territory,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message on Thursday.

In a separate market note, Papa Securities Corp. said investors bought shares in Metro Pacific Investments Corp. (MPIC) and Ayala Corp. (AC) near the market’s close, causing their last-minute increase.

Stocks in MPIC and AC picked up 4.46% to P5.85 each and 5.29% to P1,095 apiece, respectively.

Meanwhile, IB Gimenez Securities, Inc. Research Head Joylin F. Telagen said investors considered local stocks to be pricey compared to other markets, prompting the heavy sell-off in previous weeks.

“However, as corporate earnings start to trickle in, we think that there is still room for it to move higher. As strong corporate earnings will tend to lower the PE ratio. I think earnings report will be the main driven factors over the next few weeks not just in PSEi but to global equities as well,” Ms. Telagen said in a text message.

Sectoral counters were split between those that advanced and those that declined. The mining and oil counter led gainers, jumping 1.81% or 208.31 points to 11,706.35. Holding firms gained 1% or 87.88 points to end at 8,797.05, while industrials inched up 0.01% or 1.75 points to 11,398.62.

On the other hand, the services sub-index gave up 0.79% or 13.74 points to 1,705.47. Property lost 0.79% or 31.03 points to 3,885.17, while financials dropped 0.03% or 0.84 point to 2,210.29.

Investors were back in the market, prompting value turnover to rise to P10.7 billion after some 2.13 billion issues switched hands.

This is higher than the P8.92-billion value turnover posted on Wednesday.

Decliners prevailed for the day at 147 against 68 stocks that advanced, while 42 issues were unchanged.

Foreign investors were sellers for the 16th straight day, although net outflows slimmed to P373.42 million against the P719.46 million booked on Wednesday.

The market will be closed today for the Chinese New Year holiday.

Most Southeast Asian stock markets also firmed on Thursday, tracking broader Asia, with Singapore surging after data showed a faster-than-expected growth in exports last month.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.3% by 0400 GMT. — Arra B. Francia with Reuters

BMI Research: Consumer spending still strong despite rising inflation

Consumer spending will remain strong this year despite rising inflation, analysts at BMI Research said, with stable incomes and remittance inflows to offset the impact of prices.

“The consumer outlook in the Philippines remains bright on the back of a strong economic performance and rapidly rising incomes, influenced by a tight labour market and sustained remittance inflows. Although we do expect inflation to tick up over 2018, we do not expect it to have a pronounced effect on consumption,” BMI said in a report. — Melissa Luz T. Lopez

PBB to raise up to P10 billion from LTNCD issuance

Philippine Business Bank (PBB) is set to conduct capital raising activities to capitalize on attractive lending opportunities.

In a disclosure to the Philippine Stock Exchange on Thursday, Feb. 15, the Yao-led PBB said it will convert existing preferred shares to common stocks “to further strengthen its balance sheet.”

The conversion of preferred shares to common stock is still subject to regulatory approvals.

Meanwhile, the lender added that it will also look at raising up to P10 billion by selling long-term negotiable certificates of deposit (LTNCD).

“The additional funding will allow the Bank to capitalize on attractive lending opportunities as the Philippine economy continues to expand,” PBB said in the disclosure.

LTNCDs are similar to regular time deposits which offer higher interest rates, but the difference is that these cannot be pre-terminated. Being “negotiable” means that these can be traded at the secondary market prior to maturity date. — Karl Angelo N. Vidal

MWSS expects three Chinese firms to buy Kaliwa dam project bid documents

Metropolitan Waterworks and Sewerage System (MWSS) expects three Chinese companies to secure procurement documents before the government agency bids out the Kaliwa dam project by March, its administrator said.

MWSS Administrator Reynaldo V. Velasco said funding for the project is already available through an official development assistance (ODA) from China, and had been approved by the President along with the National Economic and Development Authority.

“May funding ‘yan (There’s funding available),” he told reporters, adding that no changes had been made about the commitment from China. He said last year that a P10-billion ODA had been pledged by the foreign country to fund the project.

Under the previous administration, the P18.72-billion dam had two prequalified bidders, which are now out of the picture because of the government’s new procurement mode for the project. It used to be a public-private partnership, with MWSS as implementing agency. — Victor V. Saulon

MWSS expects three Chinese firms to buy Kaliwa dam project bid documents

Metropolitan Waterworks and Sewerage System (MWSS) expects three Chinese companies to secure procurement documents before the government agency bids out the Kaliwa dam project by March, its administrator said.

MWSS Administrator Reynaldo V. Velasco said funding for the project is already available through an official development assistance (ODA) from China, and had been approved by the president along with the National Economic and Development Authority.

“May funding ‘yan (There is funding already),” he told reporters, adding that no changes had been made about the commitment from China. He said last year that a P10-billion ODA had been pledged by the foreign country to fund the project.

Under the previous administration, the P18.72-billion dam had two prequalified bidders, which are now out of the picture because of the government’s new procurement mode for the project. It used to be a public-private partnership, with MWSS as implementing agency. — Victor V. Saulon

BSP cuts reserve requirement by 1%

The Bangko Sentral ng Pilipinas announced on Thursday, Feb. 15, a 1% reduction in reserve requirement for big banks. The move is “operational” as it was done to aid financial market reform.

The central bank said 19% reserve requirement for big banks will take effect starting March 2. It expects about P90 billion funds to be freed up by the cut in bank reserves.

Here’s the full statement released by the BSP today, Feb. 15:

The Monetary Board announced today the reduction in the reserve requirement ratio by  one (1) percentage point as an operational adjustment to support the BSP’s shift toward a more market-based implementation of monetary policy as well as its broad financial market reform agenda. The reduction will apply to the reservable liabilities of all banks and non-bank financial institutions with quasi-banking functions with reserve requirement currently at twenty (20) percent.

In deciding to reduce the reserve requirement ratios, the Monetary Board reaffirms the BSP’s commitment to gradually lessen its reliance on reserve requirements for managing liquidity in the financial system. The Monetary Board believes that the BSP has attained sufficient progress in its shift towards the use of market-based monetary instruments since the adoption of the interest rate corridor (IRC) framework in June 2016. Even as the BSP continues to refine its instruments and operations under the IRC, the Monetary Board observed that the BSP now has ample scope to mitigate the potential liquidity impact of a phased reduction in the reserve requirement via offsetting auction-based monetary operations.

At the same time, the Monetary Board noted that the reduction in reserve requirements will help mobilize liquidity in support of economic activity as well as capital market development over the medium term.

The reduction in the reserve requirement ratios shall take effect on the reserve week beginning on 2 March 2018. — Melissa Luz T. Lopez

Solon calls for revival of mandatory ROTC training for Grades 11 and 12

Bataan Rep. Geraldine B. Roman called for the reinstatement of mandatory Reservist Officers’ Training Corps (ROTC) in grade 11 and 12 students following her induction as lieutenant colonel in the Philippine Army Reserve Force.

“For service of country, we must bring back the mandatory ROTC program for grades 11 and 12. We in Congress are working to make the ROTC experience a significant, beneficial and meaningful training experience. We will ensure that patriotism will be inculcated among the youth through this course,” Ms. Roman said.

ROTC in college students was scrapped in 2002 after irregularities in the system were exposed. In light of her enlistment, she commended the Armed Forces of the Philippines (AFP) for allowing her to be the first transgender military officer.

“My  belief is that all patriotic Filipinos must be allowed to apply for military service, regardless of gender and sexual orientation and identification.  After all, war and disaster do not recognize gender,” she said. — Minde Nyl R. Dela Cruz

The secret ingredient of Chickenjoy? A background in engineering

Everyone has a shared appreciation for the crispy, juicy chicken skin of Chickenjoy—a food stuff that is deeply imbued in Filipino culture—all thanks to Tony Tan Caktiong, founder and chairman of Jollibee Foods Corporation (JFC). That iconic chicken dish has even taken on the world: with Tan Caktiong at the helm, Jollibee and its stable of brands have successfully planted the Philippine flag in 21 countries, with close to 3,800 stores.

Aside from that, he has also allowed a Filipino fast food chain to acquire a stake in an American company (not the other way around) when it purchased 40% of Smashburger in 2015 for nearly $100 million, following it up with another $100 million just last February 13 to bring its ownership in the firm to 85%.

Yet despite the evident prowess in dealing with numbers, Tan Caktiong didn’t study becoming a businessman early on. Jollibee’s biggest boss is actually a chemical engineering graduate of the University of Santo Tomas (UST), and could have gone on developing chemical manufacturing processes. He, instead, put up the ice cream parlor that would soon become a multinational chain.

“Some of you may be wondering whether studying here [at the university] figured heavily on my future,” he said in his speech this morning when he received an honorary doctorate degree from UST. “One may wonder how taking up engineering could have possibly led me [to concoct the secret ingredients of] Regular Yum with Cheese, Chickenjoy and Jolly Spaghetti.”

“I can share to you now that the answer is a resounding yes.”

Engineering, he said, “nurtured [his] natural curiosity and helped develop [his] analytical skills,” something that came in handy “in preparing [him] better for business and [forming his] aspiration to become an entrepreneur.”

“I never stopped being a student,” he added. “My incessant thirst and love for learning continued on more than 40 years since I graduated.”

Art Samantha Gonzales

Tan Caktiong said students opting to embark on a business venture should “dream big” and “never be afraid to fail.”

“[After you’ve] achieved your dreams, you need to dream even bigger,” he said. “Having countless mistakes, I can say firsthand that some of the greatest and most meaningful learnings come from failures.”

Despite his wealth, Tan Caktiong isn’t content with just starting at his bank account.

“I’ve learned that the most successful businesses are those whose reason for being goes far beyond simply making money,” he said. “The businesses that are admired and built to last are those that also believe that everything ordinately begins and ends with people.”

“[Running a successful business] enabled us to improve countess people’s lives,” he said. “[By] creating more employment, one can improve not only [the lives of your] people, but your people’s families as well,” he said.

“Regardless of industry,” he added, “taking care of your people is paramount.”

“We started very small as a family business 40 years ago,” he recounted. But after serving up perhaps millions of carton boxes of crispy chicken goodness, Tan Caktiong now believes that a great way to “make a difference in society” is “through growing a very successful business.”

PDIC to hold bulk sale of residential lots in Cavite

The Philippine Deposit Insurance Corporation (PDIC) will hold for the first time bulk sale of residential lots on February 19, Monday, the state-run deposits insurer said in a press release.

A total of 438 residential lots with a total area of 94,514 square meters in Silang, Cavite will be up for bulk sale on Feb. 19.  Public bidding will be held at the PDIC Training Room, 9th Floor, SSS Building, 6782 Ayala Avenue, cor. V.A. Rufino St., Makati City. PDIC said that a reserve price has been set for these lots and bidders are instructed to submit their best offer.

This is the first time that PDIC will conduct a bulk sale, says PDIC President Roberto B. Tan said in a statement. “Not only will the bulk sale approach reduce administrative cost in liquidation, it will also engage other markets for asset disposal. A number of real estate developers have shown interest in the bulk sale of properties. There are also prospects for partnerships between former owners of the properties and those who will finance the bulk acquisition. This is a welcome development that we hope to tap into to hasten liquidation of similarly situated closed banks assets,” Mr. Tan said.

The lots comprise about 70% of the entire Real and Other Properties Acquired (ROPA) portfolio of the closed Accord Savings Bank, Inc., and are located in Green Farm Royale Subdivision, Barangay Pulong Bunga, Silang, Cavite. Sealed bids shall be accepted by the PDIC ROPA Disposal Committee from direct buyers only between 9:00 A.M. and 1:45 P.M. at the venue. Bids will be opened at 2:00 P.M.

The complete list of properties is posted in the PDIC website. Prospective bidders may also visit the Asset Management and Disposal Group at the 7th Floor, SSS Building, 6782 Ayala Avenue, cor. V.A. Rufino St., Makati City for details on the residential lots. For further information, interested buyers may call the PDIC Public Assistance Department at (02) 841-4630 to 31. Those outside Metro Manila may call the PDIC toll-free hotline at 1-800-1-888- PDIC or 1-800-1-888-7342. Inquiries may also be sent via e-mail at pad@pdic.gov.ph.

Bidders are advised to physically inspect said residential lots, examine and verify the titles and other evidence of ownership, and determine any unpaid taxes, fees, charges and/or expenses before submitting their bids. They are required to bring proper identification document (ID) with photo and to register at least one hour prior to the deadline for submission of bids. Bid documents such as Bid Forms, Conditions of Bid, and required format of the Special Power of Attorney and Secretary’s Certificate may be downloaded free of charge from the PDIC website. PDIC reserves the right to withdraw without prior notice any or all of the properties offered for sale any time before the deadline for submission of bids.

 

Asian stocks take US inflation spike in stride and rally; dollar on defensive

TOKYO — Asian stocks gained on Thursday after Wall Street brushed aside strong US inflation data and surged, in a move that also saw the dollar pinned at two-week lows even as US Treasury yields jumped in anticipation of more rapid US interest rate hikes.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1 percent.

Australian stocks climbed 0.9% and South Korea’s KOSPI added 1.1 percent. Japan’s Nikkei advanced 1.3% following three successive days of losses that took it to a four-month low the previous day.

Wall Street surged on Wednesday, with the Dow up 1 percent and the S&P 500 climbing 1.34%, as investors shrugged off the stronger-than-expected inflation data and snapped up shares of Facebook, Amazon.com and Apple .

US consumer prices rose more than forecast in January as Americans paid more for gasoline, rental accommodation and healthcare, further raising inflation concerns and the prospect of the Federal Reserve hiking interest rates more than initially expected.

That drove US Treasury yields on most maturities higher on Wednesday, with those on benchmark 10-year notes hitting a four-year high.

Other data on Wednesday showed US retail sales fell 0.3% in January to mark the biggest decline in 11 months. This was well below forecasts for an increase of 0.2%, suggesting slower growth could accompany higher inflation.

“The combination of stellar US CPI and weak retail sales data leaves investors in a precarious situation,” wrote strategists at CitiFX.

“Strong price data presents hawkish risks for the Fed’s dots at the March meeting. Three dots have been the baseline and now four seems a greater risk. Meanwhile, retail sales results have caused a downgrade of GDP estimates across the Street.”
Dot plots represent Fed officials’ expectations for interest rate hikes.

The dollar index against a basket of currencies slipped 0.25 percent to 88.892 after losing more than 0.6 percent overnight despite the strong inflation number. The recovery in broader risk sentiment was seen weighing on the dollar, which had gained during the market turmoil earlier in the month.

The US currency has been buffeted by a variety of setbacks this year, including prospects Washington might pursue a weak dollar strategy and the perceived erosion of its yield advantage as other countries part with easier monetary policy. Concerns about the growing US fiscal deficit have also weighed on the greenback.

The dollar stretched overnight losses against the Japanese yen to touch a 15-month low of 106.420, having declined more than 2 percent so far this week and causing the Nikkei to underperform its global peers.

“Japanese stocks could act as drag to their regional counterparts if the stronger yen hampers its performance. In that respect the strong yen could be seen as a factor preventing the stabilisation in global markets,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo. — Reuters

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