Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 12614

Economy expands at 6.6% in fourth quarter, 6.7% in 2017

The Philippine economy posted 6.6% gross domestic product (GDP) growth in the fourth quarter, the Philippine Statistics Authority (PSA) reported this morning.

The October-December outcome was lower than the previous quarter’s upwardly revised 7%, but was the same pace as the growth recorded a year earlier.

This brings growth in 2017 to 6.7%, matching the median estimate in a BusinessWorld poll last week, and was near the low end of the government’s 6.5%-7.5% target band for 2017.

Service sector — which contributed 47% of GDP last quarter — propped up growth after rising by 6.8% from 7.2% in 2016. The industry sector also grew by 7.3%, slower than the 7.9% recorded in the same period last year.

Output in the agriculture sector rose by 2.4%, a turnaround from the 1.3% contraction in the last quarter of 2016.

On the expenditure side, household spending rose grew 6.1% during the period, slightly lower than the 6.2% recorded in the fourth quarter of 2016.

Government spending was also up by 14.3% from 4.5% while capital formation expanded by 8.2% from 14.7%.

Exports of goods and services rose by 18.6%, faster than 2016’s 13.4%, while imports grew by 17.5% from 15.4%.

Gross national income – the sum of the nation’s GDP and net income received from overseas – registered a growth of 6.2% in the last quarter of 2017 from 6% previously. — Christine Joyce S. Castañeda

A game-changing cancer treatment

Parkway Cancer Centre in Singapore’s Dr. Richard Quek talks about cancer immunotherapy

Cancer is one of the greatest causes of health burden all over the world. According to the World Health Organization (WHO), it is the second leading cause of death globally, and is responsible for an estimated 9.6 million deaths in 2018. The health agency noted that the economic impact of cancer is increasing. In 2010, its total annual economic cost reached approximately $1.16 trillion.

For Dr. Richard Quek, a senior consultant specializing in Medical Oncology at Parkway Cancer Centre in Singapore, the cancer survival rate today is continuously improving with the advances in diagnosis and treatment options.

“The survival rate has improved,” Dr. Quek said. “There are many reasons behind that. Number one, medical reasons — you have better treatment now and better facilities in terms of surgery, radiation and medication. Second, we are better at detecting cancers. So when you detect it early, you have a better chance; you can get better treatment.”

One of the remarkable breakthroughs in treating cancer today, according to Dr. Quek, is the use of immunotherapy. It is a type of cancer treatment that helps the immune system fight cancer by boosting the body’s natural defenses — just like it would with a germ or virus.

Immunotherapy may work by stopping or slowing the growth of cancer cells, stopping cancer from spreading to other parts of the body, or helping the immune system work better at destroying cancer cells, among others.

“If I take out a patient’s tumor — and put it on my own body — the cancer will never grow because [my] immune system can get rid of it. Because the tumor is seen as foreign to me, it is not mine… However, that same cancer in that particular patient is not seen as foreign — the cancer is able to evade the immune system of the patient, thrive and grow,” Dr. Quek said.

Dr. Quek, however, noted that the immune system cannot be overly strong, it has to be well-controlled. In cases of an overactive immune system, the body attacks and damages its own tissues that can result in various autoimmune diseases like lupus and rheumatoid arthritis. On the other hand, a weak immune system will leave the body vulnerable to illnesses, including colds, flu, and other infections.

“So to me, immunotherapy is a huge breakthrough in this modern era. Immunotherapy is very promising, and melanoma is leading the way because it’s the first cancer to start with this treatment,” Dr. Quek who has also special interests in the management of melanoma, sarcoma, gastrointestinal stromal tumor (GIST) and lymphoma.

Despite the significant developments in understanding, prevention, and treatment of cancer, Dr. Quek believes that there is still tremendous opportunity to move the field further.

“We have not been able to cure and eradicate all cancers, yet we can prolong and control the disease. I think there are a lot of opportunities for development and improvement on what we have achieved today but it would require a lot of collaboration with all parties involved including clinicians and scientists. Without collaboration, it’s impossible to move the field forwards,” he said.

In terms of modern cancer care, Dr. Quek said that Artificial Intelligence (AI) may play an important assisting role to the doctor in treating patients with cancer but it would be much longer for AI to completely replace humans.

“I think that AI, in time to come, may take on and maybe even replace human doctors. But it would be some decades away before it can replace oncologists,” Dr. Quek said. “AI is impersonal. While cancer is a disease with a deeply emotive human aspect to it in addition to just treatment. The human aspect is the patient and their family.”

For cancer patients, Dr. Quek has a message worth pondering on: “Cancer can be prevented. Cancer can be detected early. And if a person has cancer, it’s not the end of the world because there are good treatments available. A lot of patients have cancer, and a lot of patients are survivors.”

For more information about cancer, please subscribe to http://ph.parkwaycancercentre.com/news-articles/health-news/.

HealthNews is a monthly publication by Parkway Cancer Centre Singapore.

In the Philippines, Parkway Cancer Centre Singapore are represented by CanHOPE Manila. They act as a link with direct access to the Singapore team providing integrated care throughout a patient’s journey.

For information on the centre and their services, please email canhopemla@gmail.com and visit CanHOPE Manila on Facebook.

​Bustling and burgeoning

Western Visayas, the most populous region in Visayas, is a major economic contributor to the country. In 2016, the gross regional domestic product (GRDP) of the region grew by 6.1% from P305 billion to P324 billion, the sixth highest amount nationwide.

Though the pace of growth was slower than in 2015, when GRDP increased by 8.8%, Ro-Ann A. Bacal, Region VI director of National Economic and Development Authority, noted in a press conference the trends in the region that signified that its economy is healthy. Among these were the declines in inflation and underemployment, and increases in employment, exports and tourist arrivals.

The business process outsourcing industry (BPO), Ms. Bacal added, remained one of the region’s major job generators. A total of 47 BPO offices were set up in 2016, and together they employed about 21,500 people. Also that year, the industry posted $22.6 million in revenue, exceeding the 2015 revenue of $22.4 million.

Western Visayas is doing well as a whole. But Iloilo and its namesake capital city are the ones making decidedly significant splash. A quick scan of the corporate and economic news of the past few years suggests that the province and the city are increasingly attractive to both local and international investors.

On the BPO front, some of the country’s top real estate companies are aggressively building offices in Iloilo City. Last year, it was reported that Andrew L. Tan’s Megaworld Corp. was going to spend P5 billion to put up four to five buildings within the next three years in the Iloilo Business Park it has developed. This would increase the total office space inventory of the mixed-use development to 100,000 square meters (sq. m). By the time the report was released, the park had an office space inventory of 45,000 sq. m.

“During the last three years, we have experienced a spike in the demand for office spaces in Iloilo Business Park. Thus, we expedited the construction of our first four towers and we have decided to build more to see the demand,” Jericho P. Go, senior vice-president at Megaworld, was quoted as saying in news reports.

Adding those buildings would also allow the park to accommodate more BPO workers. In 2016, it was catering to about 15,000 office workers from seven BPO companies. “We continue to see a bright prospect in Iloilo’s BPO industry. Several companies, most of them are first-timers in Iloilo, want to come in and expand here,” Mr. Go said.

According to the real estate consultancy firm Colliers International, BPO firms were driving demand for office spaces in the city. “The government thrust to promote the province as a major investment hub in the Visayas, coupled with the planned projects of the country’s major developers, provides a positive outlook for Iloilo. Companies such as iQor, WNS, Nearsol, and Yazaki Philippines EDS Technoserve took up spaces last year and started operations this year,” Colliers said in its second-quarter provincial property report released last year. Apart from Megaworld, the property developers operating in Iloilo include Ayala Land, Inc., SM Prime Holdings, Inc. and Robinsons Land.

In the 2016 Cities and Municipalities Competitive Index, developed by the National Competitive Council of the Philippines, Iloilo City ranked eighth among highly urbanized cities. “Thus, the provincial city has remained in the radar of foreign BPO investors. The number of educational institutions has also made Iloilo a center for learning in the Visayas region and consequently a viable area for companies to locate in,” Colliers said.

The firm noted that rental rates were among the things that attracted investors. Last year’s second-quarter rates ranged between P250 to P550 per sq. m. “This price is quite attractive for BPO tenants, especially for those looking for alternatives to Metro Manila and Metro Cebu,” it added.

Iloilo did not go unnoticed by foreign investors. In May of last year, 14 businessmen from China went on a four-day mission to Iloilo — particularly the capital and other parts of the province — to study investment opportunities in human resource training, tourism and the BPO sectors. “My purpose of coming over is for business tourism and human resources development training,” Danny Chou of Ambrose Financial Services (H.K) Ltd. was quoted in a BusinessWorld report, adding that his company was also looking at opportunities in the BPO industry and the field of English-language training.

Meanwhile, Mike Moon, trade and investment director at the British Embassy, told a reporter of this paper last year that the British Ambassador to the Philippines Daniel Pruce had visited Iloilo to assess the possibility of supporting development projects.

The Department of Trade and Industry announced in September of last year that an American outsourcing company for clinical services was expanding its operations in Iloilo City this year in order to meet growing customer demand. This expansion by SHEARWATER Health would raise the company’s investment in the country to $7 million and the number of staff to about 3,000.

An economic zone may soon materialize in Iloilo, which will undoubtedly boost the province’s reputation as an attractive investment destination. Last year, a feasibility study conducted by the University of Asia and the Pacific showed that building an ecozone in the province was a viable proposition. “The indicators show that it is sustainable to put up an economic zone in the province considering that it has an adequate water supply, has a port that can be expanded, enough power supply, stable peace and order, and availability of manpower,” Gov. Arthur Defensor, Sr. was quoted in a BusinessWorld report.

Tasting the heart of Iloilo

More than being the province geographically located at the center of the country, Iloilo has been aptly dubbed as “the Heart of the Philippines” for many reasons.

Even before the Spanish colonial period, Iloilo has been a center of trade, and its city’s vibrant economic activity remains to be unparallelled even up to this day. As a result, it has been hailed as “one of the fastest rising cities” as well as the “second most competitive city” in the country as some media reports stated.

Apart from trade and commerce, the heart and soul of the province is further reflected with its rich history and traditions that Ilonggos continue to uphold.

As a testament on how Ilonggos champion their traditions, they hold various festivities. Thus, Iloilo has been dubbed as the “Province of Festivals.”

These events are being staged almost each month of the year — highlighting the province’s intangible assets: history, religion, cultural heritage, agricultural traditions, and of course, the local food, which almost always left someone saying namit gid! (very delicious!).

Reflecting this namit flavor for the longest time is la paz batchoy — Iloilo’s iconic dish. This noodle dish, composed of noodles, pork innards, and pork cracklings submerged in a savory broth, has long been capturing the hearts and taste buds of both local and foreign tourists alike.

Another dish that put Iloilo in the culinary map of the Philippines is pancit molo, which is a symphony of warm soup with pork and shrimp wonton dumplings.

Iloilo is also known for its sweet delicacies, notably the biscocho, a baked bread lavishly coated with butter and sugar. Other treats including pinasugbo (sweetened fried banana slices) and barquillos (thinly rolled wafers). This liking to sweets perhaps extend to the innate sweet personality of Ilonggos, which they have been known for.

While these dishes and sweet treats are the flavors that has long defined Iloilo, the province has more gustatory experiences to offer as reflected in various festivals dedicated to celebrate the bounty of their land, and how food unites the Ilonggos.

Just last year, Miagao municipality in Iloilo held its first Talong (eggplant) Festival, which celebrates the town’s thriving eggplant production. On the other hand, every May in the town of Pavia, Iloilo’s Carabao-Carroza Festival, is celebrated. Known as the longest existing festival in the province, the event is a parade of carabaos in colorful carrozas showcasing the town’s abundant local produce.

In July, one of the most anticipated festivals throughout the year continue to draw a crowd — the Lechon Festival. The famed festival gathers the townfolk of Balasan to celebrate food and culture while feasting on generous servings of roasted pig. This annual festival is known to have continuously encouraged oneness in the community.

Most would conclude that a trip to Iloilo is a gustatory delight. The vibrant local food scene added to the rich stories behind heritage sites, thriving economic activity, and the charm of Ilonggos, Iloilo is pulsating with life and continues to be a major vein that pumps life to the heart of Philippines. — Romsanne R. Ortiguero

The beacon of Western Visayas

From being once called the ‘sick man’ of Asia to adopting its new title of ‘rising tiger’, the Philippines has accomplished a lot in the span of half a century, economy-wise to say the least. Successfully achieving economic growth that rivals that of China, the country now faces some new problems. How do you sustain such a powerful momentum? Or more importantly, how do you distribute this newfound wealth equitably throughout the country’s many regions?

One solution put forth by experts and politicians is the decentralization of economic activity. Currently, the National Capital Region, and to some extent Region IV-A, continue to account for a majority of the Philippines’ gross domestic product (GDP). The other 15 regions combined accounted for less than half or 46.5% of the country’s GDP in 2016 according to the Philippine Statistics Authority. Clearly, there is a wealth of untapped potential in establishing new centers of growth elsewhere.

The province of Iloilo in Western Visayas stands ready to face the challenge. As one of the most accessible provinces in the Philippines, Iloilo can serve as a gateway to Visayas through its sea and air ports.

The Iloilo International Airport, the primary gateway to Iloilo, is the hub of regularly scheduled direct domestic flights to and from Manila, Cebu, Davao, General Santos, Puerto Princesa, and Cagayan de Oro. The airport also serves international flights from Iloilo to Hong Kong and Singapore. As the fourth busiest airport in the Philippines and the first airport in both Western Visayas and Panay island to be built to international standards, the Iloilo International Airport plays a huge role in the economic viability of the region, allowing Iloilo to become the trade and commerce hub of the Western Visayas region. Further development could see it become an international gateway to the country.

Meanwhile, the Iloilo seaports include ferry terminals along the Iloilo River in Lapuz district, fastcraft ferries from Bacolod, RORO ferries from Guimaras, and ferries from Palawan. The Iloilo Domestic Port in Fort San Pedro, Iloilo City Proper also serves shipping companies with routes from Manila, Cebu, Cagayan de Oro, and Zamboanga. The Port of Iloilo is even considered the leader of trade and a commercial hub for Western Visayas as it is one of the safest natural seaports in the Philippines.

Due to its strategic location, easy access, and developments in infrastructure, Iloilo’s economy is one of the most competitive in the country. For most of Western Visayas, Iloilo City stands as the center trade, commerce, finance, technology, medical tourism, hospitality, real estate, tourism, education, and industry. The politically independent highly urbanized city is home to various booming industries, such as the business process outsourcing (BPO), banking and finance, and retail industries. Notably, the popular food chain Mang Inasal is headquartered here.

Towards Iloilo’s northern parts, a strong fishing industry flourishes, owing to the bountiful fisheries of the Visayan Sea. Additionally, Iloilo’s agri-industrial central regions produce a wide array of agricultural products such as corn, rice, bananas, sugar, and pineapples among others as well as high-end crops.

Working the region’s many thriving industries are the vibrant and well-educated Ilonggos. In support of the province’s future growth, Iloilo is home to numerous schools and colleges, as well as ten major universities, eight of which are based in Iloilo City. These include the Central Philippine University, University of San Agustin, University of the Philippines Visayas, West Visayas State University, and the Iloilo Science and Technology University.

The abundance of skilled and literate workers have contributed to the rise of Iloilo’s BPO industry, and has spurred the employment rate and economic growth of the region. The rapid development of the industry in Iloilo City prompted the Department of Science and Technology-Information and Communications Technology Office and the Business Processing Association of the Philippines (BPAP) to name it as one of the Philippines’ next wave cities, recognizing its capacity to host information technology-business process outsourcing companies due to the availability of talent and relevant infrastructure.

This is proof of the province’s potential to become a beacon of economic growth. With a little more encouragement, Iloilo can give a lot more. — Bjorn Biel M. Beltran

S&P watching if tax reform will deliver

By Elijah Joseph C. Tubayan
Reporter

TAX REFORM’s ability to deliver additional revenues that will fuel the government’s P8-trillion infrastructure development program until 2022 remains a key factor in assessing Philippine economic prospects, an analyst of S&P Global Ratings said yesterday, even in the face of mid-term elections next year that could make lawmakers wary of legislation that could prove unpopular.

“So we’re looking at how much new revenue will be generated by the TRAIN and whether or not execution and implementation is there,” Andrew Wood, associate director at S&P for sovereign and international public finance ratings, said in a webcast yesterday, referring to Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN), enacted on Dec. 19 last year.

The first of up to five planned tax reform packages, TRAIN cuts personal income tax rates and plugs the expected foregone revenues by either increasing or adding taxes on fuel, cars, coal, tobacco products, mining, sugar-sweetened drinks and some investment products, besides simplifying donor’s and estate taxation, among others.

The Finance department submitted another package to the House of Representatives two weeks ago that seeks to cut corporate income tax rates gradually to 25% from 30% currently in order to put this levy at par with those of Southeast Asian competitors, as well as to remove tax incentives from sectors that do not need them.

The government hopes to submit to Congress the remaining two to three other packages within the year, ahead of the 2019 senatorial and local mid-term elections.

“To keep this expansionary fiscal policy and if infrastructure investments strategy is on track, that’s the kind of most important thing that we’re looking at in the fiscal side into the next year and a half,” Mr. Wood said.

S&P — which like the other two key debt watchers Fitch Ratings and Moody’s Investors Service has rated the Philippines a notch above minimum investment grade — estimated 2017 Philippine gross domestic product (GDP) growth at 6.6% in a report on Nov. 28 last year, against the government’s 6.5-7.5% target and 2016’s actual 6.9%, as well as S&P’s 5.1% estimate for Southeast Asia last year.

Both Moody’s Analytics and the median of a BusinessWorld poll late last week of 12 economists put fourth-quarter 2017 GDP growth — which the Philippine Statistics Authority is scheduled to report today — at 6.7%.

S&P expects Philippine GDP growth this year to slow to 6.5% against the government’s 7-8% goal and a 5.1% projection for Southeast Asia.

“We have definitely taken into consideration the tax reform packages, but particularly the TRAIN first package. A key part of this forecast is whether or not government will be able to raise revenues in line with their much higher spending on infrastructure, health, education, etc,” said Mr. Wood.

“With the passage of TRAIN in December, the government has really gotten through probably the core piece of the tax reforms to begin with.”

The Finance department expects TRAIN to yield about P90 billion in incremental revenues this year and a total of P786.4 billion until 2022. It is also banking on Congress to approve within this quarter TRAIN’s supplemental package that will seek to raise the motor vehicle users charge, provide for a general tax amnesty and relax bank secrecy restrictions, taking the first package’s cumulative additional revenues to P130 billion this year and P969.2 billion until 2022.

The second package, which the House received two weeks ago, will be revenue-neutral — as many of the other packages will be — since the entire tax reform program primarily aims to shift the burden to those that can afford to pay more.

Still, the government expects the entire program to yield about P2 trillion in total additional revenues, or about a fourth of the planned P8-trillion infrastructure expenditures until 2022, when President Rodrigo R. Duterte will end his six-year term.

Asked if he feared for reforms’ fate as next year’s mid-term elections approached, Mr. Wood replied: “I think risks are relatively contained in the Philippines right now, particularly in the political fence.”

“It didn’t come to our radar that the 2019 elections would derail that.”

Saying tax reform implementation would be “getting to the root of the bottleneck that exists in the Philippines”, Mr. Wood said that in the “medium and long run, we also expect that to provide momentum to the Philippines.”

“In the near term, it’s more in the expansionary fiscal policy and how that translates to higher growth, so were looking at that as a positive development right now.”

Expectations of strong Q4 2017 growth mount

THE PHILIPPINES is expected to have clocked gross domestic product (GDP) growth in the fourth quarter of 2017 that put the full-year pace well within target, according to an assessment released yesterday.

“[The year] 2017 ended with a bang!” First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in the December issue of their joint monthly report.

“With infrastructure spending soaring by 45% in November and exports still on the rise, our GDP growth forecast of 6.5-7% for the full-year 2017 appears a no-brainer,” The Market Call Capital Markets Research read.

“Accelerating infrastructure and capital outlays should catalyze faster GDP growth in Q4 and 2018.”

BusinessWorld’s poll late last week of 12 economists yielded a 6.7% estimate median for the fourth quarter that was shared by Moody’s Analytics, while Socioeconomic Planning Secretary Ernesto M. Pernia said in a mid-December yearend news briefing that he expected 2017’s last three months to have seen a pace faster than the 6.7% average of the first three quarters.

Mr. Pernia told reporters yesterday that he was “happy enough” with fourth-quarter and full-year 2017 GDP data scheduled to be released today.

The government has targeted a 6.5-7.5% GDP growth in 2017 and 7-8% annually starting this year, coming from 2016’s actual 6.9%.

FMIC and UA&P said a continued rebound in exports, higher remittances from Filipinos overseas, a low budget deficit and inflation that stayed within the central bank’s 2-4% target range provided “upward growth momentum into the fourth quarter.”

Looking ahead, Mr. Pernia told reporters that “2018… will be a bullish year because there will be a lot of projects breaking ground, so a lot of spending on projects.”

And “[w]ith the higher income for those earning below P250,000” as a result of the first of up to five planned tax reform packages — Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) — that kicked in as the year began, “there will be a lot of welfare enhancement on their part.”

“The net effect is still positive for them,” the socioeconomic planning chief said, “and the heightened prices” from higher sales taxes on several items “will be temporary… it peters out over time.”

For FMIC and UA&P, inflation “may pick up pace in the first few months of 2018 amid tax reform, but should remain within the BSP target, albeit at higher end.”

“Global recovery — especially in the US, EU and China — should provide a needed boost to exports, to fuel the economy’s second engine to drive 2018 GDP growth to 7-7.5%.”

Given this macroeconomic backdrop, FMIC and UA&P expect the central bank “to respond with two rate hikes” this year after keeping monetary policy steady since an increase in policy rates in September 2014, in order “to limit inflationary expectations from exceeding its target as the TRAIN’s indirect taxes come into effect.”

IMF
Monday also saw the International Monetary Fund (IMF) — which in October last year penciled 6.6% GDP growth for the Philippines in 2017 and 6.7% in 2018 — slightly adjusting upward by 0.1 of a point from October to 5.3% its projection for 2018 GDP growth for the five major Southeast Asian states Indonesia, Malaysia, the Philippines, Thailand and Vietnam, while keeping its 2019 forecast at also 5.3%.

It also hiked its world output projections for 2018 and for 2019 by 0.2 of a point to 3.9%.

“As the year 2018 begins, the world economy is gathering speed,” Maurice Obstfeld, IMF economic counsellor and director of Research, said in e-mailed remarks on the World Economic Outlook Update. “But political leaders and policy makers must stay mindful that the present economic momentum reflects a confluence of factors that is unlikely to last for long. The global financial crisis may seem firmly behind us, but without prompt action to address structural growth impediments, enhance inclusiveness of growth, and build policy buffers and resilience, the next downturn will come sooner and be harder to fight.”

Gov’t sees growth for palay, corn this quarter

PRODUCTION of palay, or unmilled rice, in the Philippines — one of the world’s biggest buyers of the grain — is forecast to increase 5.65% this quarter because of improved yields and increased harvest area, the state statistics agency said on Monday.

The Philippine Statistics Authority (PSA) said that production in January-March will probably hit 4.67 million metric tons (MT), based on standing crop, compared with 4.42 million MT harvested in the same period last year.

“Farmers are optimistic to have better yield resulting from sufficient water supply and good weather condition favorable to plant growth,” the report read.

Palay accounted for 25.82% — the biggest chunk among commodities — of the total value of the agriculture sector’s output in the fourth quarter.

A record-high rice harvest last year of 19.28 million tons — up 9.36% from 2016, which had seen a 2.88% drop in output — helped boost growth of the Southeast Asian nation’s agriculture sector, thanks largely to favorable weather.

The country’s state grains procurement agency plans to import 250,000 MT of rice as soon as possible to boost thinning stockpiles, and the prospective deal has already raised export prices in Vietnam, a major supplier.

CORN
The same report also bared expectations that output of corn — which contributed 4.76% to the total value of farm output in the fourth quarter — will increase by 5.05% to 2.49 million MT this quarter from 2.37 million MT in 2016’s first three months.

The PSA attributed its expectation this quarter to bigger harvest areas and better yields.

Corn output dropped by 5.73% by to 1.629 MMT in 2017’s final three months (compared to a 0.15% slip a year ago), although the grain managed to grow by 9.64% to 7.914 million MT for full-year 2017, turning around from 2016’s 3.99% drop.

Unfavorable weather, limited seeds and insufficient soil moisture, however, could weigh on output next quarter, the report read. — with Reuters

Asia loses its luster in EM scorecard

BANGKOK/SINGAPORE/HONG KONG — By some measures, Mexico and Turkey come out as the most attractive emerging markets (EM) for 2018.

In a Bloomberg analysis based on a range of metrics including growth, yields, current-account position and asset valuations, the two countries score highest among 20 developing economies.

Asian economies occupy the five lowest-scoring positions, including the Philippines which placed 17th, just behind Thailand (16th) and ahead of Indonesia (18th), China (19th) and India (20th).

Mexico and Turkey scored higher because their real effective exchange rates are more competitive than the average of the past 10 years, according to the analysis.

India and China’s valuations are relatively expensive in historical terms.

Their economic growth is unlikely to be as fast as it has been in the past decade, according to estimates.

“If you are on the hunt for something to buy now, Turkey and Mexico stand out because they are relatively cheap,” said Takeshi Yokouchi, a senior fund manager in Tokyo at Daiwa SB Investments Ltd., which oversees the equivalent of $50 billion in assets.

“When political risks ease up, that’s when you want to make an entry, given their solid fundamentals and high yield.”

Turkey’s five-year government bond yields about 13%, while Mexico’s yields 7.5%. Both exceed India’s equivalent rate of about 7.3%, which is the highest among Asian nations covered by the analysis. China’s yields 3.9%.

The study covers 20 of the 24 markets making up MSCI Inc.’s Emerging-Market Index.

Greece is excluded owing to its use of the euro, while Egypt, Qatar and Pakistan are excluded because of data limitations.

The result for each is shown as a Z-score, which measures the relationship of the individual value to the 10-year average.

“Asian countries do look relatively expensive as they have been bought amid strong fundamentals in the region,” Mr. Yokouchi said. “They may not have the potential like Turkey or Mexico to rally big, but Asian currencies and assets are also likely to stay steady from here.”

The Turkish lira is the worst-performing currency against the dollar in the past six months, partly due to lingering political tension with the United States.

The Mexican peso ranked second worst amid the ongoing negotiations on the North American Free Trade Agreement.

The MSCI Emerging-Market Index of shares has rallied 79% since bottoming two years ago, outperforming the developed-market gauge’s 47% advance during the period. — Bloomberg

PNB to raise up to P20B from LTNCD issuance

THE Philippine National Bank (PNB) is planning to raise up to P20 billion by selling peso-denominated long-term negotiable certificates of deposit (LTNCD).

In a disclosure to the stock exchange, the Lucio C. Tan-owned bank said its board of directors on Monday approved the issuance of up to P20 billion peso-denominated LTNCDs in one or more tranches. The offering will still require  approval from the Bangko Sentral ng Pilipinas (BSP).

“The proceeds will be used to extend the maturity profile of the Bank’s liabilities as part of overall liability management, support compliance with required BSP liquidity ratios, and raise long-term funds for general corporate purposes,” PNB said.

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.

In October 2017, PNB raised P6.35 billion worth of LTNCDs, the third and final tranche for the bank’s P20-billion long-term note offering since November 2016.

The bank reported a net income of P4.51 billion during the first nine months of 2017, a 20% drop from the P5.67 billion recorded during the same period in 2016. PNB’s earnings in 2016 included one-time gains from the disposal of foreclosed assets, and the sale of its 51% stake in PNB Life Insurance Inc. to Allianz SE, among others.

Shares in PNB fell by 0.9% or 5 centavos to P56.60 each on Monday.

House to go it alone on ‘Cha-cha’

By Minde Nyl R. dela Cruz

THE HOUSE of Representatives is pushing through with constitutional amendments even without the Senate, Speaker Pantaleon D. Alvarez said on Monday, Jan. 22.

Seal of the Philippine House of Representatives

In a press briefing, Mr. Alvarez said the House will no longer wait for the Senate to join them in a constituent assembly as the term itself does not exist in the 1987 Constitution.

“Ano bang ‘assembly?’ Saan ba nakalagay ’yan sa Constitution? (What ‘assembly?’ Where in the Constitution is it indicated?)” Mr. Alvarez said.

Article 17, Section 1 of the Constitution reads: “Any amendment to, or revision of, this Constitution may be proposed by: (1) The Congress, upon a vote of three-fourths of all its Members; or (2) A constitutional convention.”

Section 2 reads, in part: “Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least twelve per centum of the total number of registered voters, of which every legislative district must be represented by at least three per centum of the registered voters therein.”

“Hindi kami mag-aantay. Tuloy-tuloy lang ang public hearing namin (We will not wait. We are just continuously conducting public hearings),” Mr. Alvarez said.

He added: “Hindi, hindi na mangyayari ’yan eh (constituent assembly). Kasi balik pa rin tayo sa letra ng Constitution. Basahin niyo, Article 17, basahin niyo anong nakalagay diyan? At saka proposal lang. Hindi naman ito ordinaryong legislation na sabihin mo bicameral, approved sa ’min (House of Representatives), approved sa Senado, tapos pupunta sa Presidente for his signature. Hindi ganon ang proseso.”

(No, constituent assembly will no longer happen. Because we have to go back to the letter of the Constitution. Read up, Article 17, what was written there? Anyway, that was just for proposal. It’s not an ordinary legislation with bicameral, approved here in the House of Representatives, approved in the Senate, then forwarded to the President for his signature. The process is not like that.)

Asked what mode of constitutional amendment is currently in effect, the Speaker said: “Section 1, number 1. Ang number 2 ay constitutional convention. Ang 3, people’s initiative. May con-ass bang nakalagay dito? … Wala. Votes lang, three-fourths of all its members. (Section 1, number 1. Number 2 is constitutional convention, 3 is people’s initiative. Is there any con-ass indicated here? … Nothing. Just votes, three-fourths of all its members.)”

The Speaker also noted that the Constitution explicitly stated joint voting in approving or revoking the President’s declaration of martial law but the same terms were absent in the provision on amendments and revision.

Article 7, Section 18 of the Constitution stated, in part: “The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it.”

Asked if the explanation of the framers of the Constitution should be considered, Mr. Alvarez said: “’Yun ang problema sa kanila. Hindi nila gagawin ’yung trabaho nila nang maayos and yet magke-claim sila that this is the best Constitution daw in the world (That is the problem with them. They did not do their jobs well and yet they will claim that this is the best Constitution in the world).”

In a Senate hearing last Jan. 17, one of the framers of the 1987 Constitution,former chief justice Hilario G. Davide, Jr., said that while the present Charter may not be perfect, it was “the best in the world.”

“Kasalanan nila ’yan eh. Itanong mo kay Davide ’yan. O kay Christian [S.] Monsod [another member of the 1986 Constitutional Commission]. Bakit hindi nila kinumpleto ’yan? Trabaho nila ’yon eh tapos ngayon tayo sisihin nila? Dapat sila sisihin niyan,” Mr. Alvarez further stated.

(That is their fault. Ask Davide that. Or Christian Monsod. Why didn’t they complete that? That was their job and now they are blaming us? They should be blamed for that.)

Meanwhile, the House Concurrent Resolution (HCR) 9, which seeks the convening of the Congress into a constituent assembly and was adopted by the House of Representatives on Jan. 16, held no bearing, according to Mr. Alvarez.

“Siguro nagkamali ’yon. Anyway, resolution lang naman ’yon na magko-convene, ibig sabihin, mag-uumpisa para mapag-usapan na ’yung pagbabago, ’yung proposal (Maybe that was wrong. Anyway, that was simply a resolution to convene, meaning to start the discussion on the changes, the proposal),” Mr. Alvarez said.

The said resolution has been transmitted to the Senate and placed in its order of business as of Monday.

During Monday’s session, Senate President Aquilino L. Pimentel III referred the resolution to the committee on constitutional amendments and revision of codes, which is chaired by Senator Francis N. Pangilinan.

The Speaker also thumbed down recommendations to amend only the restrictive economic provisions in the Constitution, saying that doing so would only serve the interest of the businessmen.

“Mayroon ngang suggestion, bakit hindi lang economic provisions ’yung baguhin? Again, gusto nila, ’yung sariling interes lang nila ’yung (masunod), interes ng negosyante. Eh paano naman ’yung interes ng taumbayan? Eh bakit hindi nila bigyan ng opportunity ’yung mga local governments to chart their own destinies? Mag-create man lang sila ng opportunity din sa kanilang lugar,” Mr. Alvarez said.

(There is even a suggestion, why not amend just the economic provisions. Again, what they want is that only their own interest will be followed, the interest of the businessmen. What about the interest of the citizenry? Why not give the local governments the opportunity to chart their own destinies? At least create an opportunity for their own place.)

On Sunday, Jan. 21, business leaders Makati Business Club (MBC), Management Association of the Philippines (MAP), and Financial Executives Institute of the Philippines (FINEX) issued a joint statement urging Congress to prioritize amending the restrictive economic provisions of the 1987 Constitution.

Likewise, Southern Leyte Representative Roger G. Mercado, chair of the House committee on constitutional amendments, said it would be “unwise” to focus on economic provisions.

“[T]he suggestion that this attempt at [C]harter change (Cha-cha) be limited to the economic provisions is unwise, partly because, as the business sector knows, governance issues are also at the core of the medium-term and long-term development goals. To neglect governance is to just partly solve decades-old problems,” Mr. Mercado noted. — with Camille A. Aguinaldo

PSEi to reach 9,500 level this year, says brokerage

By Arra B. Francia, Reporter

RCBC Securities, Inc. sees the market ending at the 9,500 level by the end of 2018, fueled by the continued positive outlook on the Philippine economy.

“We expect that the market will sustain its growth. Our end of the year forecast is 9,500… this can be subject to further upgrading moving forward,” RCBC Securities Research Head Raul P. Ruiz said during the brokerage firm’s annual stock market briefing in Makati City on Monday.

RCBC Securities said the projected 6.7% growth in the Philippine economy is the key reason for the rise in the Philippine Stock Exchange index (PSEi). The company noted the Philippines is also seeing the benefits of having better ties with China, citing higher investments and tourist arrivals from the economic giant last year.

Citing figures from the tourism department, the brokerage said that Chinese tourist arrivals accounted for 14% of the total travelers to the Philippines last year. Chinese tourists ranked third in the most arrivals, following South Korea and the United States.

Investments from China have also started to come in, beginning with President Rodrigo R. Duterte’s visit to the country last year where he secured $15 billion in investments. In comparison, investments from China amounted to only $60 million from 2011 to 2016.

The brokerage firm said this bodes well for the Philippines, citing China’s $9.6-billion investments in Cambodia from 2004 to 2013.

However, RCBC Securities said the PSEi is already expensive, moving above its historical average of 14 price to earnings ratio (P/E), trailing instead a ratio of 18 P/E.

“For so long as the prospects of the economy is better, there is justification for the market to rise further…Other (global) markets also rallied, better than the Philippine market,” Mr. Ruiz said. 

With the rise of the main index, corporate earnings are also expected to increase by 12% in 2018. This is higher than RCBC Securities’ forecast of 9% growth last year.

Ayala Land, Inc. is seen to be one of the top advancers this year, pushing the property sector to jump by 17%. Earnings of holding firms are projected to rise 11%, while consumers stocks will most likely record a 12% uptick.

RCBC Securities’ stock picks include: D&L Industries, Inc., noting its recent partnerships with US-based firms, Puregold Price Club Corp., and Robinsons Retail Holdings, Inc. for consumer stocks, ALI and Vista Land & Lifescapes, Inc. for property, Ayala Corp. and GT Capital Holdings, Inc. for holding firms, Megawide Construction Corp. for infrastructure play, Bloomberry Resorts Corp. for gaming, and EastWest Bank for the banking sector.

RCBC Securities did not choose stocks from the telecom industry due to concerns over the entry of a third player. The mining industry is also expected to be hit by higher mining taxes, while the power and energy sector may be affected by declining electricity selling prices, among others. 

Meanwhile, the brokerage firm said rates hikes in the US may affect the local bourse, as this would prompt the Bangko Sentral ng Pilipinas to increase rates as well. 

RCBC Securities is also cautious on the number of capital-raising activities lined up this year, such as the follow-on offering by the Philippine Stock Exchange, Inc., and P110-billion stock rights offerings by Metropolitan Bank and Trust Co. and Bank of the Philippine Islands, as they could “sap market liquidity, stalling the market’s climb.”

1...12,61312,61412,615...13,713Page 12,614 of 13,713
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube