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Peso ends flat on FOMC meeting minutes

THE PESO closed flat against the dollar on Thursday following the release of hawkish minutes of the January meeting of the US Federal Reserve.

The local currency ended today’s  session (Feb. 22) at P52.10 against the greenback, trading flat from its finish on Wednesday.

The peso opened the session at P52.13 versus the dollar, while its best showing stood at P52.03. Yesterday’s intraday low, on the other hand, was at P52.17 against the greenback.

Dollars traded dropped to $668.4 million today from the $965.95 million that changed hands in the previous session.

“The peso closed sideways [yesterday], though intraday rates were generally weaker following hawkish cues due to strong US economic growth outlook from the recently-released Fed policy meeting minutes,” a trader said in an e-mail.

During the Fed’s Jan. 30-31 monetary policy meeting, a number of officials indicated that “they had marked up their forecasts for economic growth in the near term” as the “labor market continued to strengthen and that economic activity expanded at a solid rate.”

Earlier this month, the Bureau of Labor Statistics reported that the US economy created 200,000 new jobs in January, higher than the 180,000 market consensus.

The “substantial underlying economic momentum” supported the market sentiments for the Fed to hike its interest rates this year.

“Participants expected that with further gradual adjustments in the stance of monetary policy, economic activity would expand at a moderate pace and labor market conditions would remain strong,” minutes of the Federal Open Market Committee (FOMC) meeting read.

Meanwhile, another trader said the local currency “only traded within the range.” suspecting that the Bangko Sentral ng Pilipinas continued to intervened on the top side.

The local central bank sometimes intervenes in the foreign currency exchange to temper sharp swings.

The trader added that there was some “heavy selling” around the intraday low, giving the peso some lift to close sideways.

For Friday, Feb. 23, the trader said the peso will likely move between P52 and P52.20 against the dollar, while the first trader gave a wider forecast range of P51.90 to P52.30.

“The peso is expected to move sideways due to lack of fresh leads from the US and upward pressures to the dollar for the week had already subsided,” the first trader noted.

Asian currencies languished against the dollar on Thursday after minutes of the Federal Reserve’s January meeting showed policy makers were more confident of the need to keep raising interest rates.

The dollar, which was hit recently by a barrage of bearish factors such as worries about US budget deficit and pursuance of a weaker dollar policy, rebounded this week thanks to rising US Treasury yields.

The 10-year US Treasury yield hit more than four-year highs on Thursday and was creeping towards the psychological level of 3 percent — which analysts say would drive investors away from risky assets such as emerging Asian currencies.

“We do not rule out the possibility that Fed could revise its dots projection slightly upwards for 2019 and for its terminal rate,” said Saktiandi Supaat, head of foreign exchange research at Maybank in Singapore, in a report, referring to the Fed’s expectations for its rate path.

The South Korean won, Thai baht , Indonesian rupiah and the Malaysian ringgit all shed about half a percent or more on the day, hurt by narrowing gap between the local bond yields and US Treasury yields. — Karl Angelo N. Vidal with Reuters

Shares decline on hawkish Fed meeting minutes

SHARES sank back to negative territory on Thursday, as hawkish tones from the United States Federal Open Market Committee (FOMC) prompted caution across global markets.


The main index shed 1.13% or 98.08 points to 8,515.57 Thursday, Feb. 22, quickly reverting its stance after managing to post gains in the previous session.

The broader all-shares index likewise dropped 0.68% or 34.98 points to 5,087.19.

“Rising bond yields continued to assert pressure on stocks in Wall Street, and the last FOMC minutes from then Chairman Janet Yellen giving strong sell signals to the Philippine market today. With the FOMC minutes indicating a slightly hawkish tone to inflation and growth in the US, markets globally took a precautionary stance,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

Minutes of the FOMC’s meeting last Jan. 30-31 stated that rate hikes will be implemented, alongside the US’ increased economic growth that is also triggering faster inflation.

US markets took this news negatively, with the Dow Jones Industrial Average losing 0.67% or 166.97 points to 24,797.78. The S&P 500 index gave up 0.55% or 14.93 points to 2,701.33, while the Nasdaq Composite index was down 0.22% or 16.08 points to 7,218.23.

Most Asian indices likewise followed suit, trekking lower today as investors turned cautious against the impending rate hikes.

Papa Securities Corp. noted that index heavyweight SM Investments Corp. (SMIC) also pulled down the market after falling 5% intraday and closing 3.55% lower to P950 apiece. Villar-led firms Golden Haven, Inc., which has posted a dizzying ascent in previous days, finally snapped its rally, losing 11.11% to P290 each.

“Looking forward, it might be best to remain cautious given the current volatility. The possibility of sudden downturns in the US market is also still ever-present, more so that US treasury yields are on the rise,” Papa Securities trader Gabriel Perez said in an e-mail on Thursday.

Most sectoral indices also posted a negative turn, with the mining and oil sector posting the largest loss at 1.87% or 231.52 points to 12,098.54. Holding firms followed with a decrease of 1.63% or 143.63 points to 8,623.05. Property moved 1.05% or 41.30 points lower to 3,862.19; financials dipped 0.78% or 17.51 points to 2,201.45; while industrials slipped 0.67% or 76.93 points to 11,245.09.

The services counter was the lone advancer, albeit gaining just 0.16 point to 1,745.60.

A total of 2.96 billion issues switched hands for a total value turnover of P10.46 billion, higher than Wednesday’s P9.53 billion.

Decliners outpaced advancers, 136 to 77, as 49 names closed flat.

Foreign investors were sellers for the third straight day, disposing a net P389.87 million from their portfolios. This is lower than Wednesday’s net sales of P516.38 million. — Arra B. Francia

Stocks decline further after hawkish Fed minutes

Shares sunk back to negative territory on Thursday, as hawkish tones from the United States Federal Open Market Committee (FOMC) prompted caution across global markets.

The main index shed 1.14% or 98.08 points to 8,515.57 yesterday, quickly reverting its stance after managing to post gains in the previous session. The broader all-shares index likewise dropped 0.68% or 34.98 points to 5,087.19.

“Rising bond yields continued to assert pressure on stocks in Wall Street, and the last FOMC minutes from then Chairman Janet Yellen giving strong sell signals to the Philippine market today. With the FOMC minutes indicating a slightly hawkish tone to inflation and growth in the US, markets globally took a precautionary stance,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

Minutes of the FOMC’s meeting last Jan. 30-31 stated that rate hikes will be implemented, alongside the US’ increased economic growth that is also triggering faster inflation.

US markets met this news on a negative note, with the Dow Jones Industrial Average losing 0.67% or 166.97 points to 24,797.78. The S&P 500 index gave up 0.55% or 14.93 points to 2,701.33, while the Nasdaq Composite index was down 0.22% or 16.08 points to 7,218.23.

Most Asian indices followed suit, trekking lower as investors turned cautious against the impending rate hikes.

Japan projects in PHL will be free from red tape — Palace

President Rodrigo Duterte has vowed to ensure that Japan’s projects in the Philippines will be free from red tape, Presidential Spokesperson Herminio Harry L. Roque, Jr. said.

“He [the President] pledged his commitment to ensure that Japan projects will receive attention and free from bureaucratic delays whether government-to-government or business-to-business,” Mr. Roque said in a televised press briefing at Sara Municipal Hall in Iloilo on Thursday, Feb. 22.

Mr. Duterte had met with Philippine and Japanese conglomerates at the Malacañan Palace last Wednesday.

At the meeting, according to Mr. Roque, “the President thanked Japan for their wholehearted support for his government programs, and for the humanitarian assistance they have extended to the Filipino people.”

In a statement from the Presidential Communications Office last Wednesday night, the Palace said Mr. Duterte had likewise met with the “representatives of the Philippine-Japan Economic Cooperation (PHILJEC) to tackle infrastructure programs.”

According to the Palace, “PHILJEC aims to promote, strengthen and expand trade, economic, scientific technological advancements, exchange assistance to business endeavors in both the Philippines and Japan.”

“It was designed to be a forum for private sector dialogue and the exchange of ideas geared towards the enhancement of Philippines-Japan relations.”

Moreover, in their courtesy call to the President, the Philippine conglomerates had “discussed competitivess and macroeconomic fundamentals, infrastructure and innovation matters to the President,” the Palace said.

Present during the meeting were Japanese Ambassador to the Philippines Koji Haneda, Marubeni Corporation Chairman Teruo Asada, Mitsubishi Corporation Chairman Ken Kobayashi, Japan Chamber of Commerce and Industry (JCCI) International Division Manager Masazumi Nishizawa, and Japan Airlines Chairman Masaru Onishi. — Arjay L. Balinbin

Arm teachers with guns to stop shootings — Trump

WASHINGTON — US President Donald J. Trump suggested arming teachers to deter future mass shootings as he held an emotional meeting Wednesday at the White House with survivors of the gun rampage that left 17 people dead at a Florida high school.

Mr. Trump also promised “very strong” background checks on gun owners during the poignant “listening session,” in which he heard first-hand accounts from bereaved parents and friends, and schoolchildren who narrowly escaped with their own lives.

“A gun-free zone, to a maniac — because they are all cowards — a gun-free zone is ‘Let’s go in and let’s attack,” Mr. Trump said.

“If you had a teacher who was adept at firearms, they could very well end the attack very quickly,” Mr. Trump said, suggesting that 20% of a school’s teachers could be trained to carry concealed weapons.

“This would only be obviously for people who are very adept at handling a gun,” Mr. Trump added.

The televised White House meeting came as students staged street protests across the country to demand stricter gun laws following the murder of 14 teens and three teachers at Marjory Stoneman Douglas High School in Parkland, Florida.

Holding signs reading “Never Again” and “Be The Adults, Do Something,” teenaged survivors of last Wednesday’s shooting rallied outside the Florida state Capitol in Tallahassee.

“No longer can I walk the halls I walked millions of times before without fear and sadness,” Stoneman Douglas student Florence Yared told a crowd that included thousands of supporters.

‘MY DAUGHTER HAS NO VOICE’
“No longer can I walk the halls without imagining bloodstains and dead bodies,” the 17-year-old junior said. “All because of the damage that a single AR-15 rifle caused.”

The White House meeting was attended by Stoneman Douglas students, their parents and also the parents of victims of the Columbine, Sandy Hook and other shootings.

Andrew Pollack, whose 18-year-old daughter Meadow was among the Stoneman Douglas victims, told Mr. Trump it was far too easy for people such as the 19-year-old shooter gunman Nikolas Cruz to acquire weapons.

“I’m here because my daughter has no voice. She was murdered last week and she was taken from us, shot nine times,” he said. “We as a country failed our children. This shouldn’t happen.

“We protect airports. We protect concerts, stadiums, embassies,” Mr. Pollack said, his voice seething with rage. “I can’t get on a plane with a bottle of water, but we leave some animal to walk into a school.”

Justin Gruber, a 15-year-old Stoneman Douglas student, said “there needs to be significant change in this country because this has to never happen again.

“People should be able to feel that when they go to school they can be safe,” Mr. Gruber said.

Samuel Zeif, who lost a close friend at Stoneman Douglas last Wednesday, said it was important to “be strong for the fallen who don’t have a voice to speak anymore.”

“Let’s never let this happen again. Please,” he told the president, later adding: “I don’t understand why I can still go in a store and buy a weapon of war.”

Urgent calls for action following the 2012 Sandy Hook massacre, which left 20 children and six teachers dead, had failed to break the national deadlock on gun control.

But students have vowed to make the Parkland tragedy a turning point, with youths inspired on social media by the activism of their peers staging walkouts from high schools in Florida and elsewhere on Wednesday.

‘NRA HAS GOT TO GO’
Hundreds of students descended on city hall in Minneapolis, Minnesota, and marched in other cities, including Chicago, the Midwestern metropolis racked by gun violence.

In Washington, hundreds more gathered outside the White House chanting slogans against the National Rifle Association (NRA), the powerful gun lobby, and demanding action from Trump.

“Hey hey, ho ho, the NRA has got to go,” they chanted.

Students are planning a march on Washington on March 24, with sister rallies planned across the country.

Mr. Trump — who received strong backing from the NRA during his White House run — has shown a new-found willingness to take at least some steps on gun control following the Parkland shooting.

The president threw his support Tuesday behind moves to ban “bump stocks” — an accessory that allows a semi-automatic rifle to be fired nearly as fast as an automatic weapon.

But his suggestion of arming teachers drew immediate scorn from the founder of the advocacy group, Moms Demand Action for Gun Sense in America.

“I’m honestly gobsmacked that the President just used a forum with gun violence survivors to pimp the @NRA’s priority legislation and to suggest arming teachers,” tweeted Shannon Watts.

The idea of countering school shootings with additional weapons is already being put in place in Broward County, where Stoneman Douglas is located.

Sheriff Scott Israel announced Tuesday that “deputies who are qualified and trained will be carrying rifles on school grounds from this point forward.”

The US Congress has long been deadlocked on the gun debate, accomplishing nothing despite a spate of mass shootings and polls showing that Americans support stricter gun laws by a two-to-one margin. — AFP

Oil from Iran tanker reaches Japan shore

TOKYO — Oil that reached islands in southern Japan earlier this month is highly likely to have come from the sunken Iranian tanker Sanchi, the Japan Coast Guard said on Thursday.

Samples of oily matter that washed up on Feb. 8 on the shores of the Okinoerabu and Yoron islands in the Amami chain were found to be linked to the Sanchi’s sinking, the Coast Guard said.

The Sanchi sank on Jan. 14 after colliding with a freighter on Jan. 6 in the world’s worst oil tanker disaster in decades.

“Oily matter that arrived at the shores of the two islands is extremely likely to be linked to the Sanchi tanker incident, considering the similarity of the oil and the fact that there has not been any marine disaster involving oil spill in the nearby sea area,” a Coast Guard official told Reuters by phone on Thursday.

Black clumps of oily matter first washed up on the shores of Takarajima island on Jan. 28 and other matter has since arrived at 21 other islands in southwestern Japan that are part of a chain of islands that includes Amami-Oshima and Okinawa, areas famous for pristine beaches and reef systems.

The Sanchi, which the Coast Guard said was carrying 111,000 tons, or about 810,000 barrels, of condensate — an ultra-light, highly flammable crude oil — sank after several explosions weakened the hull following the collision.

Most of the fuel evaporated after the ship caught fire.

The bodies of two sailors were recovered from the ship while a third body was pulled from the sea near the vessel. The remaining 29 crew of the ship are presumed dead.

On Jan. 17, the Chinese government said the sunken tanker had created two oil slicks.

Japan’s environment ministry said in January it saw little chance that the spill would reach Japanese shores.

Seawater samples taken from Jan. 29 to Feb. 2 at 14 different locations offshore southern Japan detected no oil pollution from the sunken tanker, the Coast Guard said in a statement on Wednesday.

An oil slick continues to be seen near where the Sanchi sank. The slick is located about 315 km (197 miles) west of Amami-Oshima island and is about 700 meters long and 20 meters wide, though oil has been evaporating from the fringes, the Coast Guard said in a statement on Thursday.

Japanese and Chinese patrol boats have been searching for the missing crew in the area and sailing over the slick to try to dissipate the oil, it added. — Reuters

North Korea’s closing Olympics delegation includes man blamed for deadly ship sinking

SEOUL — North Korea will send another high-level delegation to South Korea for the PyeongChang Winter Olympics closing ceremony, officials said on Thursday, including the man blamed for the 2010 sinking of a South Korean navy ship that killed 46 sailors.

The latest visit by officials from the normally reclusive North will coincide with a US delegation led by President Donald J. Trump’s daughter, Ivanka.

The North Korean delegation will be led by Kim Yong Chol, vice-chairman of the Party Central Committee, and will stay for three days from Sunday, South Korea’s Ministry of Unification said in a statement.

Kim Yong Chol is in charge of inter-Korean affairs in the North. He was also chief of the North’s Reconnaissance General Bureau, a top military intelligence body, which Seoul blamed for the deadly sinking of the Cheonan, a South Korean navy corvette, in 2010.

The United States and South Korea blacklisted Kim Yong Chol for supporting the North’s nuclear and missile programs in 2010 and 2016 respectively. However, South Korea decided to accept the North’s Olympics delegations for the good of the Games, a presidential official in Seoul said on condition of anonymity.

The official said South Korea had informed the US of the pending visit and they were in talks about Kim Yong Chol’s entry into the South.

Ri Son Gwon will travel with Kim Yong Chol for the Games closing ceremony. Mr. Ri, also involved in inter-Korean affairs, accompanied North Korean leader Kim Jong Un’s sister on her visit for the Games opening ceremony this month.

The eight-member delegation, including six staffers, will travel by road and will meet South Korean President Moon Jae-in during their visit, the Blue House official said, without specifying when.

Ivanka Trump will dine with Mr. Moon at the Blue House on Friday night and she has no plans to meet North Korean officials, a senior US administration official said.

“There is no official opportunity for them to meet,” the official said.

US Vice-President Mike Pence attended the Games opening ceremony and had been scheduled to meet Kim Jong Un’s sister, Kim Yo Jong, before the North Koreans canceled at the last minute, US officials said. — Reuters

Peso ends flat at P52.10:$1

The peso traded flat against the dollar on Thursday, Feb. 22, following the hawkish minutes of the January meeting of the US Federal Reserve (Fed).

The local currency ended yesterday’s session at P52.10 against the greenback, trading flat from its finish on Wednesday.

The peso opened the session at P52.13 versus the dollar, while its best showing stood at P52.03. Yesterday’s intraday low, on the other hand, was at P52.17 against the greenback.

Dollars traded slipped to $668.4 million yesterday from the $965.95 million that changed hands in the previous session.

“The peso closed sideways [yesterday], though intraday rates were generally weaker following hawkish cues due to strong US economic growth outlook from the recently-released Fed policy meeting minutes,” a trader told BusinessWorld in an e-mail on Thursday. — Karl Angelo N. Vidal

Davao’s cacao beans to reach Japanese market — DTI

The Department of Trade and Industry (DTI) eyes better growth in the local cacao sector as Japanese department store giant Isetan Mitsukoshi Group will be sourcing its cacao beans from Davao for its new chocolate brand.

In a statement released on Thursday, Feb. 22, Isetan will be importing from Plantacion de Sikwate Cacao Producers Association in Davao for its Nayuta Chocolatasia. According to DTI, 80% of the country’s total cacao production is found in the Davao region.

Undersecretary fro Trade and Investment Promotions Group Nora K. Terrado said the department is seeing a lot of budding cacao manufacturers and producers amid the government’s continuing implementation of agro-business industry roadmaps.

“The presence of Philippine cacao beans in the mainstream Japanese market is a clear manifestation that our produce are truly world-class,” she added.

“With sufficient support and aggressive marketing strategies being implemented by various private and public sector partners, we hope more and more Philippine goods will join the global market.” — Anna Gabriela A. Mogato

Amnesty International flags Philippines’ human rights situation in report

The state of human rights in the Philippines was marked by “increased lawlessness and violence” due mainly to the government’s war on drugs, according to this year’s annual report by London-based human rights group Amnesty International (AI).

In its report on “The State of the World’s Human Rights” released Thursday, the Nobel laureate also noted Philippine President Rodrigo R. Duterte’s “contempt” for human rights and his government’s antidrug campaign, which was ‘characterized by mass killings, mostly of people from poor and marginalized groups, including children.” AI further reported: “The deliberate, unlawful and widespread killings of thousands of alleged drug offenders appeared to be systematic, planned, organized and encouraged by the authorities, and may have constituted crimes against humanity.” — Camille A. Aguinaldo

Landbank net income up by 4% in 2017

Land Bank of the Philippines (Landbank) saw its net income grow in 2017 on the back of its robust core revenues.

In a statement sent to reporters on Thursday, Feb. 22, state-owned Landbank said it posted a net income of P14.05 billion, 4% higher than the P13.58 billion recorded in 2016.

Landbank’s net income growth was mainly supported by the double-digit growth from its core revenues.

Its income on loans expanded to P26.8 billion by 12% last year from P23.9 billion in 2016. This brought the lender’s loan portfolio to grow 30% to 674.3 billion.

Landbank’s deposit base grew to P1.42 trillion by 15% from P1.23 billion recorded in 2016 as it added new branches and automated teller machines and expanded the enrollment of its internet and mobile banking subscribers.

Meanwhile, its income from investments also expanded to P21.17 billion by 28% in 2017 from P16.49 billion recorded in a comparable year-ago period. Landbank’s investments portfolio rose to P580.65 billion by 25%.

Return on equity was at 14.8% in 2017, while the lender’s total capital expanded to P104.59 billion by 23%.

“With our solid performance in 2017 further reinforcing the [b]ank’s foundation, we are confident with sustaining growth in 2018,” Landbank President and Chief Executive Officer Alex V. Buenaventura was quoted as saying in the statement.

“Our core objective is to continuously grow the net income in order to expand support to our priority sectors, especially the farmers and
fishers, cooperatives, [and micro-, small and medium enterprises].” — Karl Angelo N. Vidal

Uber pays P41 million in tax deficiencies to avoid closure

The Bureau of Internal Revenue (BIR) said Uber Systems, Inc. paid P41.15 million in value-added tax (VAT) deficiencies to avoid being suspended or closed.

In a statement sent to reporters on Thursday, BIR said Uber paid P41.15 million in VAT deficiencies covering the period of July to December 2016, avoiding the ride-hailing service’s imminent closure under the Oplan Kandado Program of the BIR.

Although Uber filed its VAT returns on time, BIR said, it declared its domestic sales amounting to P413.85 million as zero-rated.

The declaration is against the cross border doctrine, which means that all goods and services consumed or rendered within the Philippine territory are subject to 12% VAT.

“The act of Uber of declaring its sale of services as zero-rated and not paying the VAT due thereon is a clear violation of the Tax Code which is one of the grounds for its suspension or temporary closure,” the taxing authority said in the statement.

According to the section 115 of the Tax Code, the BIR is authorized to suspend or shut down the business operations of a taxpayer for a period of not less than five days for failing to file correct VAT returns among others. — Karl Angelo N. Vidal