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Just post it

It’s no longer considered odd when posting photos of trips in exotic places — please note the Antarctic penguins at the background. Still, this bit of experience sharing (wish you were here) had been a travel tradition, though aimed at a much smaller group. One lamented though hardly noticed casualty of the travel culture of sharing is the decline of the postcard. This analog approach of buying a photo and then putting a short message on the back seems almost quaint now with the digital revolution.

Foreign trips, when over 10% of the population now live and work abroad with their families visiting them at least yearly, have become almost too ordinary to still merit a special correspondence.

Now, a phone is able to take selfies with the subject posing in front of some landmark to document a trip. These digital images are quickly uploaded in social media as a blast and sent to multiple recipients simultaneously. If wi-fi is available and free, the digital postcard with its hurried greeting is sent out with one push of a button.

And yet this e-greeting is too easily and conveniently sent to a large number of “friends” without even the cost of a stamp. Can the emotion of “I-can’t-believe-I’m-here” awe so earnestly expressed in a posting shared with those only marginally connected to the sender be as warmly received? Can the photos of the Eiffel Tower in the background with the “you should see how tall it is” sentiment come across as a case of simple bragging?

The old postcards are able to present artful photographs of Angkor Wat at sunset, Chartres Cathedral at dawn, or the Alaskan icebergs against a blue sky without the distraction of the sender’s image. Such artful renditions are trumped by even amateurish selfie shots of the subjects in front of the hazy attraction — is that the Notre Dame behind you?

Postcards have their limitations apart from the bother of finding and sending them. The space in the back of the scenic photo of Bratislava’s rehabilitated square after stamps and address cannot accommodate the recipe for Croque Monsieur that was served at a nearby cafe. It just allows a quick hello and a throwaway line — it’s great to listen to Bach from a string quartet inside this baroque church. The message can be summarized in two words (I’m here) and for the verbose, four words. (I’m here. You’re not.) Still, this throwback allows another hobby to thrive. This postcard greeting is sure to be the philatelist’s delight.

A postcard requires no response. No one writes back to a card sender in his temporary location with a gushing letter of appreciation saying how moved she was by the description of the famous bazaar in Istanbul. The postcard is hurriedly written with the understanding that the writer will be leaving right after mailing his greeting. This obfuscation of the source identified only as a nickname “Dan” also serves as protection from local authorities who may find offense at nasty comments on their city’s lack of latrines or the chaotic traffic.

What the digital culture offers, which the analogue postcard cannot possibly replicate, is conversation. When the tweet or posting announces a travel event (we are here in a bar just at the foot of the Parthenon, sipping white wine) the followers can react instantly if they care to — Whoa, Dude: that crimson pajama top you’re donning really goes well with the white wine.

But as in all memories (too many of them), old ones are eventually deleted or sent to the cloud. While the sentimental person can go through shoeboxes of old photos actually printed on paper or browse through postcards in the attic, the digital browser is likely to have switched to a newer gadget leaving the old baggage behind.

The ephemeral nature of digital records does not help future historians who troll through letters and postcards of the past, establishing both the emotion of the subject and his relationship to the recipient of a correspondence. Digital exchanges no matter how colorful get dumped into a black hole — you always f***-up my Christmas.

Still, digital transience allows traumas of painful partings (thanks for the memories) to be conveniently deleted, making it easier to move on.

Old-fashioned postcards are likely to linger like the wine stain on the tablecloth of the past, which too eventually fades. Even photos of happier times may fail to jog the memory — what was her name again?

 

A. R. Samson is chair and CEO of Touch DDB.

ar.samson@yahoo.com

Gov’t debt service bill rises 24.55% in Nov.

THE national government’s debt service bill for November rose 24.55% in November, led by domestic amortization payments, the Bureau of the Treasury (BTr) said.

In November, the national government paid P35.64 billion, up from P28.62 billion a year earlier.

Debt service rose 4.96% from P33.96 billion in October.

In the 11 months to November, the debt service bill was P652.5 billion, down 14.71% year on year.

The total is equivalent to 92.68% of the programmed P704.02 billion debt service budget for 2017.

Interest payments made in November totaled P20.58 billion, up 5.25% from a year earlier. 

Domestic payments accounted for P18.28 billion, mostly for maturing Treasury Bonds.

Domestic principal payments amounted to P8.22 billion while P6.84 billion went to paying down foreign principal owed.

The BTr also reported over the weekend that outstanding national government debt was P6.437 trillion at the end of November, down 1% from the end of October.

However, debt was up 5.4% from the first 11 months of 2016.

“The reduction in domestic debt was due to net redemption of government securities amounting to P7.18 billion and diminution of the peso value of onshore dollar bonds amounting to P0.67 billion,” the BTr said.

Domestic debt accounted for P4.208 trillion, down 0.2% month on month, while foreign obligations stood at P2.229 trillion, down 2.5%.

Domestic outstanding debt rose 6.8% year on year, while external debt rose 2.9%.

Dollar notes made up much of the external debt portfolio at P1.199 trillion, followed by P129.68 billion worth of global peso bonds, and P44.74 billion in yen bonds. — Elijah Joseph C. Tubayan

Construction of R-10 harbor link to start this year

CONSTRUCTION of the Radial Road (R-10) section of the North Luzon Expressway Harbor Link Segment 10 is set to begin early this year.

”That will start early 2018,” Manila North Tollways Corp. (MNTC) president and CEO Rodrigo E. Franco said in a text message.

The R-10 is a 2.6-kilometer road that serves as the continuation of the 5.7-kilometer Harbor Link Segment 10, an elevated expressway passing through McArthur Highway in Valenzuela City, Governor Pascual Avenue in Malabon City, and C-3 Road/5th Avenue in Caloocan City.

MNTC is the concessionaire for the project, which seeks to provide direct access between the port area and provinces in northern and central Luzon.

Mr. Franco said the government has yet to give the company the final clearance to begin construction works on the R-10 portion.

In November 2017, Mr. Franco said they are waiting for the government’s final approval to start construction on the section. The Toll Regulatory Board has given clearance to proceed, but the company is still negotiating some aspects such as investment recovery.

MALAYSIA PROJECT?
Mr. Franco, who is also president and CEO of Metro Pacific Tollways Corp. (MPTC), said the company is still looking for opportunities to expand in Malaysia.

“No agreement yet in Malaysia. We are still scouting for opportunities,” Mr. Franco said.

MPIC Chairman Manuel V. Pangilinan earlier said the company is expecting to close a deal with a Malaysian firm.

In 2016, MPTC was in talks with a Malaysian company for a 50-kilometer toll way project but the talks fell through.

The Metro Pacific Investments Corp. (MPIC) unit is continuing its expansion into Southeast Asia. In November, MPTC raised its stake in Indonesian infrastructure holding company PT Nusantara Infrastructure Tbk.

MPIC currently has stakes in a toll road operator in Bangkok, Thailand and a firm with road and bridges projects in Ho Chi Minh, Vietnam.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the investment management and holding company of Indonesia’s Salim family. MPIC’s other units are Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo

Victim of expectations

For the Raiders, Jack Del Rio was good in 2016. In fact, he was very good, improving by five games to sport a 12-and-four slate and make the playoffs for the first time in 14 seasons. It’s why owner Mark Davis didn’t think twice about giving him a contract extension running through 2020. The future was bright, and he looked to be a big part of it; Derek Carr had become a star at center, and the approved relocation to Las Vegas from Oakland underscored the franchise’s potential to build a fan base with success as the foundation.

Unfortunately for the Raiders, Jack Del Rio wasn’t very good last year. In fact, he was very bad, losing 10 games to come out with an even worse record than in his first year as head coach. It wasn’t all his fault; he had incredible bad luck, with Carr getting injured and then failing to keep his upward trajectory under new offensive coordinator Todd Downing and highly touted draft picks Gareon Conley and Obi Melifonwu suiting up infrequently due to a variety of issues. He also saw defensive coordinator Ken Norton, Jr. lasting just over half the season. Which, in a nutshell, was why he found himself without a job by the turn of the year. As he noted in the aftermath of his firing, “it’s a results business.”

In retrospect, Del Rio wound up being a victim of expectations he himself fueled. That said, he also made mistakes, and none bigger than his decision to hire Downing vice Bill Musgrave, who guided Carr to the sixth-best offense in the National Football League (NFL). In the process, the Raiders’ preseason prognosis of reaching the Super Bowl turned into after-season reality of missing the playoffs altogether.

In any case, the Raiders have grand plans moving forward. Davis has his eyes set on getting ESPN analyst Jon Gruden to occupy the hot seat, with reports speculating that he would be going so far as to offer his former head coach an ownership stake. Still, there’s no sure thing in the NFL; while it’s a step in the right direction, only time will tell whether any moves from here on will pan out. Just ask Del Rio, who was beloved by his players and who seemed to be on track to win with consistency.

 

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

NY removes nuke fallout shelter signs

NEW YORK — New York City has quietly begun removing some of the corroding yellow nuclear fallout shelter signs that were appended to thousands of buildings in the 1960s, saying many are misleading Cold War relics that no longer denote functional shelters.

The small metal signs are a remnant of the anxieties over the nuclear arms race between the United States and the former Soviet Union, which prompted US President John F. Kennedy to create the shelter program in 1961 in cities across the nation.

The signs, with their simple design of three joined triangles inside a circle, became an emblem of the era.

While some New Yorkers may barely notice them today, to others they can be an uneasy reminder that the threat may have altered and diminished, but it has not vanished.

Although the Cold War era has long ended, North Korea continues working to develop nuclear-tipped missiles capable of hitting the United States amid bellicose rhetoric from Washington and Pyongyang.

A nuclear explosion is now seen as even less likely than during the Cold War. But should catastrophe ever strike, the signs, which still linger in their thousands, would be best ignored, city officials and disaster preparedness experts say.

In the aftermath of a nearby nuclear explosion, any survivors counting on the signs to lead them to safety from radioactive fallout after needlessly dashing outside would likely find themselves rattling locked doors or perhaps breaking into what is now a building’s laundry room or bike-storage area. Maintenance of the shelter system, which once entailed federal funding to stock shelters with food and water, ended decades ago.

The removal of some of the signs from public school buildings, which has not previously been reported, is intended to partly reduce this potential confusion, according to the city’s Department of Education.

Michael Aciman, a department spokesman, confirmed that any designated fallout shelters created in the city’s schools are no longer active and said that the department was aiming to finish unscrewing the signs from school walls by roughly Jan. 1.

Although some of the tens of thousands of fallout shelter signs placed around the city by the federal government’s Office of Civil Defense have vanished as old buildings have been renovated or demolished, city officials say this is the first coordinated effort to remove them. The Office of Civil Defense was eventually abolished in the 1970s, subsumed into the Federal Emergency Management Agency (FEMA).

“FEMA does not have a position regarding the signs,” Jenny Burke, a FEMA spokeswoman, wrote in an e-mail on Tuesday last week.

Although the agency does not maintain lists of the old shelter locations, she added, “as a part of an ongoing planning effort, the agency is conducting research to retrieve Office of Civilian Defense records.”

The city’s removal appeared somewhat haphazard: on one Brooklyn street, a sign on a school photographed by Reuters last month was subsequently removed, while a second school a few blocks away still had its sign attached, albeit with a screw missing.

As a history buff, Jeff Schlegelmilch is fond enough of the signs that he stuck a replica on his office door at Columbia University’s National Center for Disaster Preparedness, where he is deputy director.

“I love seeing the signs, but, as a disaster planner, they have to come down,” he said. “At best, they are ignored; at worst, they’re misleading and are going to cost people’s lives.”

The consensus now, from the federal government downward, was that designated shelters were an outmoded concept, and updated contingency plans have been widely adopted since al Qaeda’s attack on the United States on Sept. 11, 2001, Mr. Schlegelmilch said.

Were a nuclear explosion ever to happen, those far enough from the blast center to survive would do well to head to the lower interiors of any standard residential or commercial building, ideally a windowless basement, to shelter from radioactive particles outside, which can burn skin and cause serious illness and death.

Cars, on the other hand, “are terrible,” Mr. Schlegelmilch said: the particles sail right through a vehicle’s thin exterior.

NYC Emergency Management, the agency that runs the city’s disaster preparations, was not involved in the decision but staff there welcomed the signs’ removal. Nancy Silvestri, the agency’s press secretary, said even once the signs are gone from schools, many would remain on apartment buildings and other structures. City officials are uncertain who has jurisdiction over those, she said.

Eliot Calhoun, the agency’s Chemical, Biological, Radiological, Nuclear, and Explosives Planner, sees the signs as unhelpfully muddying the waters.

He has spent years endlessly finessing a message, designed to flash as an alert on cellphones, that he hopes he will never have to send.

In the nerve center of the agency’s Brooklyn headquarters, he called up onto a screen its current form: “Nuclear explosion reported. Shelter in basement/center of building, close windows/doors.”

“Every single time I look at it I change it a little bit,” he said.

“When you only have 90 characters and you’re trying to save lives you can really think too much about it.” — Reuters

Asset-backed bonds getting too rich for investors’ tastes

WHEN BOND SPREADS are tight across the entire risk-asset spectrum, investors typically crowd into to structured-finance bonds such as consumer asset-backed securities (ABS) to eke out more yield or earn carry. That may not be the case anymore.

ABS in the US have had a banner 2017, and the good times are expected to roll through next year. But with the expectation that spreads across ABS sectors will continue narrowing to record-tight post-crisis levels in 2018, investors are beginning to wonder whether these bonds still makes sense, especially in light of credit risk in some asset classes.

“This spread tightening in ABS could last for another six to 12 months,” said Jason Merrill, a structured finance analyst at Penn Mutual Asset Management, a fixed income manager and adviser with more than $24 billion of assets under management. “Many banks and issuers are of the mind-set that they want to keep dancing while the music is playing.”

As a result, it’s getting harder for investors to find value. For example, the AAA-rated slice of a subprime-auto bond from GM Financial priced at 18 basis points over Libor last month, down from 38 basis points for a similar bond a year earlier.

A smaller issuer in the same sector, Flagship Credit, priced at 35 basis points over a fixed-rate benchmark in November, compared to 68 basis points for a similar deal in January.

“Spreads will get tighter for awhile,” said Ken Purnell, head of ABS portfolio management at Invesco. “The macro view is very positive and is supportive of spreads remaining low.”

ABS spreads will hit new post financial-crisis tights in 2018, after rallying this year to the tightest levels of the past decade, say JPMorgan research analysts.

WORTH THE RISK?
Investors have historically been drawn to ABS in search for incremental yield when global rates are low. They like the sector’s short-duration bonds, generally high ratings, and the fact that a large portion of the market is floating-rate and amortizing, providing opportunity to reinvest at higher rates.

But as consumer ABS bonds get richer, investors have had to work harder to find attractive relative value, especially considering growing risks in sectors such as subprime auto.

“We’re not necessarily forecasting a recession or a slowdown, but are concerned that we’re not being adequately compensated for risk-taking in certain areas,” said John Carey, head of structured securities investments at BNP Paribas Asset Management, who invests in spread sectors to earn extra carry. “It’s a time to be nimble and tactical.”

MACRO HICCUP
As global central banks pull back from years of easy monetary policy and begin unwinding balance sheets, the question is, when will the music stop?

Investors are keeping an eye on rising delinquencies in subprime auto, marketplace lending and unsecured consumer loans. They don’t deny that there is weakness in these asset classes, but most buyers have faith in ABS structures and their built-in credit enhancements.

“I’m not worried about consumer balance sheets, as there has been a significant amount of household deleveraging since the crisis. Households have never been in a better position,” said Tracy Chen, the head of structured credit at Brandywine Global Investment Management, which oversees $74 billion. “The economy recovery and job growth look good as well. What I’m most worried about is a macro hiccup.”

Chen’s main concerns are geopolitical risk, the stability of the US administration, North Korea, normalization of the Fed balance sheet, potential Chinese economic slowdown and inflation.

“If inflation picks up, it may accelerate the pace of the Fed’s interest-rate tightening, which could make the next recession happen sooner than expected,” she said.

In fact, timing of the global wind-down of accommodative monetary policy and the unwinding of central-bank balance sheets may be among the top concerns of ABS investors as they head into 2018.

“G4 central bank balance sheets have continued to expand. But we think the ECB (European Central Bank) will stop buying bonds later on in 2018,” said BNP’s Carey. — Bloomberg

Welcoming 2018 with TRAIN

THE TRAIN stayed on track and reached its destination in time to take effect yesterday, Jan. 1, as targeted. 

Republic Act (RA) 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) was signed by the President on Dec. 19, 2017, while vetoing certain provisions.  As provided in the RA, the new law takes effect on Jan. 1, following its complete publication in the Official Gazette. It was published on Dec. 27.

Hence, on the next payday this January, many employees will take home their salaries in full, without tax deduction. Pursuant to the revised withholding tax table issued by the Bureau of Internal Revenue (BIR) through Revenue Memorandum Circular (RMC) No. 105-2017, there is no withholding for those receiving P685 daily wage; P4,808 weekly wage; P10,417 semi-monthly wages; or P20,833 monthly wage. We must credit the BIR for preparing the Table well in advance even while the legislation has not yet been approved. You can access the withholding tax table through this link.

The Department of Energy (DoE) has likewise issued clarifications that, although the higher petroleum excise taxes take effect on Jan. 1, the higher taxes do not apply to old stocks which have been imported or released from the refineries earlier and excise taxes for which has already been paid at the old rates.

Several provisions of the TRAIN will require further interpretation which should be addressed in the implementing regulations to be issued by the BIR.

Among others, the veto message of the President opted to prioritize fairness and declared that employees of RHOs, ROHQs, OBUs and petroleum service contractors should follow the regular rates applicable to other individuals. However, the remaining provisions after the veto still suggest that employees of existing RHQs, ROHQs, OBUs and petroleum service contractors can continue to enjoy the 15% preferential income tax rate.

The new provisions for VAT zero-rating of services to the Philippine Economic Zone Authority (PEZA) and TIEZA entities were likewise vetoed. However, I note that, even prior to TRAIN and without these new provisions, there is a legal basis for the zero-rating of the services under the PEZA law (RA 7916), which was not repealed.

We will eagerly wait on how the BIR will interpret the Presidential veto on these provisions.

I am sharing the highlights of the TRAIN as prepared by our firm, P&A Grant Thornton. This summary is based on our interpretation of the provisions of the law. Please note that some of these may change, particularly on the gray areas discussed above, depending on the implementing regulations that will be issued by the BIR.

Lina P. Figueroa is a principal with the Tax Advisory and Compliance division of P&A Grant Thornton.

Nation at a Glance — (01/02/18)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Analysts’ December inflation rate estimates

THE GENERAL INCREASE in prices of widely used goods and services likely steadied in December from the preceding month’s pace, according to analysts asked in a poll last week, keeping the full-year pace within target for the first time in three years. Read the full story.

The best moments in the startup scene in 2017

With 2017 drawing to a close, let’s take a look back at some of the events that made the year bright and exciting for Filipino tech startups.

Here are some of the best moments in the startup scene this year:

Freepik

Filipino startups began to embark on trends following the success of new enterprises abroad.

Just barely two weeks before yearend, fintech startup Qwikwire launched its initial coin offering. From it, the company aims to raise $9 million for a new project called AQwire.

Qwikwire will sell its cryptocurrency called “Qye” in exchange of Etherium from February 2016 until the end of April next year.

AQwire, a decentralized platform where real-estate companies can sell properties to buyers inside and outside of the country, will be launched September next year.

Freepik

Last May 24, startup incubator Launchgarage teamed up with the Philippine Chamber of Commerce (PCCI), one of the oldest business chambers in the country, to conduct the “Supercollider Pitching Session.”

Ten tech startups from Launchgarage were given the opportunity to pitch their businesses to representatives from different illustrious business organizations, including the PCCI, the Philippines‑USA Economic and Business Council, and the Anvil Business Club.

The participating companies were Mober, Tralulu, GoodMealHunting, AltitudeX, Veer Technologies, Taxumo, Bloom Solutions, Magpie, Acudeen, and AirMighty.

Freepik

Numerous pitching competitions have been held this 2017 and one of the most notable ones is “Startups to the Resque” organized by DTI in collaboration with QBO Philippines.

The contest did not just allow the competing startups to showcase their products and business models, but challenged them to use their business venture in addressing environmental disasters, outbreaks or pandemics, and conflicts and violence.

Held during Slingshot ASEAN 2017, 20 startups (16 were from the Philippines) from across South East Asia vied for the title. Manila-based e-Learning company FrontLearners, Inc. won the grand prize worth $10,000 while ChatbotPH trailed and received $4,000. Singapore-based BillionBricks grabbed the third spot and went home with $2,000.

Freepik

Aside from monetary support, local startups have also been given an access to mentorship given by support-giving bodies. And this year, the Asian Institute of Management and Philippine Development Foundation led by Dado Banatao added another one to the list of organizations nurturing potential Filipino tech enterprises.

The two names collaborated to launch the AIM‑Dado Banatao Incubator which aims to support tech‑enabled startups in the country.

It’s a killer combo: one of the top business schools in Asia and a Silicon Valley alumnus.

Freepik

Accounting firm PwC Philippines or Isla Lipana & Co., in partnership with QBO Philippines, released a 50‑page report profiling the country’s startup ecosystem.

According to the report, which tapped 106 startup founders, there are currently over 300 startups in the country and 200 of which are still operating.

It revealed that most local startups eye expansion in the country and in some Southeast Asian countries. The report also showed that monetary support and tax exemption are among the top demand by new enterprises.

Freepik

The country also gave birth to its first unicorn this 2017.

Prefabricated property developer Revolution Precrafted was recognized as the first local startup to reach more than $1 billion valuation in the Philippines.

The two‑year‑old real estate company’s Series B round led by Singapore‑based venture capital firm K2 VC, whose previous investees include Uber, Spotify, led to the startup’s milestone.

2. Innovative startup bill

Last August 1, a bill aimed at developing the country’s startup ecosystem has been filed in the Senate.

Initiated by Sen. Bam Aquino, Senate Bill No. 1532 or the Innovative Startup Act seeks to reduce the barriers to the success of innovative enterprises by providing development program, tax breaks, and financial and technical assistance.

The bill also calls for a venture fund amounting to ₱10 billion.

Freepik

The Department of Trade and Industry (DTI) on October 20 mounted Slingshot ASEAN at the Philippine International Convention Center in Pasay City.

The conference drew more than 1,300 delegates and around 20 foreign angel investors. A startup alley, showcasing more than 80 startups from all over the region, was also put up.

In a press conference during the event, DTI Sec. Ramon Lopez shared the department’s plan to consider providing incentives such as tax exemption and venture funds to tech‑based startups in the country.

All in all, 2017 was huge start of a prosperous journey for innovative enterprises.

With numerous initiatives to support budding entrepreneurs in the country, it won’t impossible for local startups flourish in the global market in the coming years.

Financial marts end 2017 on a high

By Arra B. Francia, Reporter and Karl Angelo N. Vidal

THE country’s financial markets ended 2017 with a bang, with the Philippine Stock Exchange index (PSEi) soaring to a fresh high on the last trading day, and the peso rallying to its best level against the US dollar in six months.

EQUITIES
The PSEi, a barometer of investor confidence, climbed 0.27% or 23.33 points to close at 8,558.42 on Friday, its 14th record high finish for 2017.

The benchmark index also closed 25.11% up from its finish of 6,840.64 last year, the first time in three years it ended in positive territory.

Friday also saw the PSEi hit another all-time high in intraday trading at 8,640.04. The previous record was at 8,605.15 on Nov. 3.

“It’s a reflection of the confidence that investors continue to put in the Philippines, especially 2016, we have a new president. 2017, this is off an election year. It’s a very good performance for the market and for the entire Philippines in general,” PSE Chief Operating Officer Roel A. Refran said in an interview after Friday’s closing bell.

For analysts, the stock market’s strong performance comes as no shock, since investors have remained bullish on the Philippines given its solid economic fundamentals.

“The main catalysts that propelled our market to new highs were the government’s tax reform program as well as the bullish infrastructure projects of the current administration and favorable corporate earnings,” Timson Securities, Inc. equities trader Jervin S. de Celis said in a mobile phone message.

First Grade Finance, Inc. President and Managing Director Astro C. Del Castillo noted the same, saying some investors are already positioning themselves.

“It’s not a surprise. Toward the end of the year it was really expected. Some investors already positioned themselves, given the changing fundamentals. This will a combination of the infrastructure projects, tax reform, and the remittances of BPOs (business process outsourcing firms), continued excellent performance of OFW (overseas Filipino workers) remittances,” Mr. Del Castillo said in a phone interview.

Investors were back in the market amid sluggish trading in the last few days, with a value turnover of P7.26 billion from 3.34 billion issues changing hands. This is higher than the P6.4-billion value turnover on Thursday.

On a yearly basis, Mr. De Celis said foreign buying activity amounted to P56 billion, significantly higher than the P2.1 billion recorded in 2016.

“I guess that’s an indication that foreign investors are seeing a brighter outlook for our market as economic activity remains robust,” Mr. De Celis said.

Mr. Refran said this provides a good jumping board for 2018, with some analysts already predicting it would breach the 9,000 mark by the end of next year.

“We can only improve from here because next year will be a milestone year. Not only will we be moving to a new office in BGC (Bonifacio Global City), but really it’s building on the foundation that we have established, more products hopefully easier for investors to tap the capital market,” Mr. Refran said.

PESO
At the Philippine Dealing System, the peso closed at P49.93 against the greenback on Friday, gaining five centavos from its P49.98 finish on Thursday. This was the local unit’s best level since it closed at P49.91-to-the-dollar last June 19.

However, the peso closed weaker than its end-2016 finish of P49.72 against the greenback.

The local currency opened Friday’s session at P49.90 against the dollar. Its intraday low was at P50.01, while its best showing stood at P49.89.

Dollars traded soared to $742.2 million from the $625.3 million that changed hands during the previous session.

“The peso appreciated today as traders continued to sell off their positions towards the year-end,” a trader said in an e-mail on Friday.

Another trader noted market players are now winding down their positions given the weakness of the peso this year.

On Wednesday, Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla, Jr. attributed the peso’s recent strength to the continuous flow of remittances, as well as the softness of the greenback brought by uncertainties on the newly-passed tax overhaul in the US.

The local currency performed weaker in 2017. From Jan. 3 to Dec. 29 this year, the peso traded at an average of P50.40, higher by P2.92 compared with the P47.48 average booked in the same period last year.

The peso hit an 11-year low of P51.76 on Oct. 27, while its best showing for the year was at P49.40 on June 5.

Although analysts are calling the peso the “worst performing currency” this year, for Ruben Carlo O. Asuncion, Union Bank of the Philippines’ chief economist, the weakness of the peso had a positive impact on the domestic economy.

“If we are talking about the impact of the peso’s performance on the general macroeconomy, then, it is a different talk altogether. We have better export earnings because of the peso. We have remittances continuously growing because of the weak peso,” Mr. Asuncion said in a text message.

“We have a better fiscal position because of its so-called ‘worst performance’.”

For next week, the peso will likely stay on the weaker end as analysts are weighing on the effects of a wider current account deficit, although some are saying that this will be tempered by the long-term effects of the local tax reform measure.

The local financial markets will reopen on Jan. 3, 2018.

BSP sees December inflation at 2.9-3.6%

By Melissa Luz T. Lopez, Senior Reporter

INFLATION likely steadied in December from a month ago despite higher fuel and rice prices, the Bangko Sentral ng Pilipinas (BSP) said on Friday, enough to keep the full-year pace well within expectations.

Price increases for basic goods and services may have logged between 2.9-3.6% this month, based on estimates made by the BSP’s Department of Economic Research. This matches the forecast range given for November when inflation actually settled at 3.3%, marking a decline after four straight months of rising rates.

This also compares to a 2.6% reading in December 2016. Despite the uptick, the inflation forecast still settles comfortably within the 2-4% target band set by the monetary authority.

The Philippine Statistics Authority will release December and full-year inflation figures on Jan. 5, 2018.

“Higher domestic petroleum and rice prices could contribute to upward price pressures, which could be partly offset by the decline in Meralco’s electricity rates and stronger peso,” the central bank said.

Retail pump prices have posted net increases from a year ago even as fuel companies implemented a rollback on Dec. 12. Year-to-date, diesel prices are up by P5.65 per liter while gasoline posted a net increase of P6.09/liter. Kerosene prices are likewise higher by P3.87/liter.

Global crude prices are on the rise in recent months after oil-producing nations agreed to extend supply cuts until 2018.

Meanwhile, power distributor Manila Electric Co. reduced electricity rates by P0.3785 per kilowatt-hour after five straight months of increases, on the back of lower generation charge and a stronger peso.

The peso recovered against the dollar this December to trade at six-month highs, and even closed at the P49 level versus the greenback on Friday — the last trading day for the year. BSP Governor Nestor A. Espenilla, Jr. attributed the recovery of the local currency to strong remittance and equity inflows, coupled with “attractive” domestic fundamentals which have been reinforced by the signing into law of the tax reform package.

Abroad, the “soft” dollar due to investor uncertainty over a parallel tax legislation in the US has also helped boost the local currency, the central bank chief said.

The milder exchange rate helped reduce import prices, which feed into the cost of widely-used goods.

These developments would allow inflation to match the BSP’s 3.2% estimate for the entire year, which would also pick up from the 1.8% average logged in 2016.

The inter-agency Development Budget Coordination Committee (DBCC) kept the annual inflation target at 2-4% for 2018 to 2020, with the central bank seeing that price movements will remain “manageable” despite the expected impact of higher fuel costs and additional excise taxes which will kick in by Jan. 1, 2018.

“Expectations of healthy economic growth alongside the tax reform program would create demand-side impetus to inflation. Nonetheless, the favorable effect of sustained investment spending by the national government on the economy’s productive capacity would help temper inflation pressures,” the central bank said on Thursday.

The DBCC conducted its second review for the year on Dec. 22, where economic managers decided to keep the annual economic growth target at 7-8% from 2018 to 2022.

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