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Bond issuances may drop amid rate cut bets

BOND ISSUANCES are seen decreasing next year as investors shift to riskier assets amid expectations that central banks here and abroad will begin reducing benchmark interest rates next year.

“From an issuer, they will not want to issue bonds because rates will go down. So, there will be less bond issuances but there will be more activity in the equities market or the real estate investment trust market,” BDO Capital and Investment Corp. President Eduardo V. Francisco told reporters on the sidelines of an event on Wednesday.

In the Philippines, BDO Capital expects benchmark rates to begin easing in September next year, he added.

Still, global central banks will need to remain hawkish due to lingering risks to inflation, Mr. Francisco noted.

“Central banks have to remain cautious because of Ukraine, Israel, or El Niño. But in general, if they manage things well, especially rice and other commodities, it should be okay. Even oil is low despite issues abroad,” he said.

Investors are already shifting to riskier assets as bond yields at the secondary market have started easing, he added.

“So, that’s already the signal. They’re already starting to price it in. They’re anticipating rates to go down. From a bond and equities perspective, equities will go up because there will be interest again in the stock market. That means IPOs (initial public offerings) that were postponed this year could be issued next year,” Mr. Francisco said.

Meanwhile, other analysts said bond issuances could still pick up in 2024 as expectations of easing interest rates could encourage issuers to take advantage of lower borrowing costs.

“We expect bond and other fixed-income issuances to pick up next year. This will be driven by refinancing of debt maturities in 2024, fundraising for major capital expenditures, and a potentially more favorable interest rate environment,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“Lower borrowing costs tend to increase investments and bond issuances needed to finance new investments,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. 

On Thursday, the Bangko Sentral ng Pilipinas (BSP) kept its policy rate steady at a 16-year high of 6.5% for a second straight meeting, as expected by 15 of 17 analysts in a BusinessWorld poll conducted last week.

The interest rates on the BSP’s overnight deposit and lending facilities were likewise kept at 6% and 7%, respectively.

BSP Governor Eli M. Remolona, Jr. said the Monetary Board kept its stance unchanged as “the balance of risks to the inflation outlook still leans significantly toward the upside,” due to potential pressures from rising transport, electricity and fuel prices, as well as the El Niño weather phenomenon.

“With the sum of recent information, the Monetary Board continues to see the need to keep monetary policy settings sufficiently tight to allow inflation expectations to settle more firmly within the target range… Going forward, the BSP remains ready to adjust monetary policy settings as necessary, in line with its mandate to ensure price stability,” Mr. Remolona said.

The Monetary Board has raised benchmark interest rates by a cumulative 450 basis points (bps) since it began its tightening cycle in May 2022 to help bring down inflation.

Meanwhile, the Federal Reserve left interest rates unchanged on Wednesday and US central bank chief Jerome H. Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected and with a discussion of cuts in borrowing costs coming “into view,” Reuters reported.

“People are not writing down rate hikes” in their latest economic projections, Mr. Powell said at a press conference following the end of the central bank’s final policy meeting of the year.

“That’s us thinking we’ve done enough,” he said, adding that rate increases were “not the base case anymore.”

The Fed has hiked rates by a cumulative 525 bps since March 2022 to the current 5.25%-5.5% range. — A.M.C. Sy with Reuters

Black-ish star Anthony Anderson to host Emmys ceremony

Anthony Anderson and Tracee Ellis Ross in Black-ish. — IMDB

LOS ANGELES — Actor Anthony Anderson is set to host the 75th annual Primetime Emmys on Jan. 15 after the ceremony was delayed due to the 2023 Hollywood strikes.

Mr. Anderson’s lead role as Andre on the ABC comedy Black-ish and his executive producer position on the show garnered 11 Primetime Emmy Award nominations in recent years.

The Emmys were originally slated to air on Fox on Sept. 18, and nominations for the highest honors in television were announced in July, just before actors followed Hollywood writers and went on strike.

“With our industry’s recent challenges behind us, we can get back to what we love — dressing up and honoring ourselves. And there’s no better celebratory moment to bring the creative community together than the milestone 75th Emmy Awards,” Mr. Anderson said in a statement.

“When FOX asked me to host this historic telecast, I was over the moon that Taylor Swift was unavailable, and now I can’t wait to be part of the biggest night in television,” he added.

Allison Wallach, president of unscripted programming at Fox Entertainment, believes Mr. Anderson is the “natural fit” for the job because of his experience hosting We Are Family, a music game show that Mr. Anderson took over from fellow actor Jamie Foxx.

“Anthony’s known for his humor, heart and spontaneity, so he’s sure to give audiences in the theater and at home a night they’ll never forget,” she said.

Mr. Anderson is also known for roles in the films Kangaroo Jack and Transformers. — Reuters

Marriott Bonvoy’s Four Points by Sheraton opens in Palawan

MARRIOTT BONVOY’S Four Points by Sheraton recently opened a new hotel in Palawan, signaling the brand’s entry into the Philippines.

“The hotel is set to welcome ‘bleisure’ travelers, or travelers who combine business and leisure, as well as families to one of the country’s most gorgeous island destinations that retains its untamed wilderness, giving it a reputation as being ‘the Philippines’ last frontier,’” Marriott Bonvoy said in a statement on Thursday.

Four Points by Sheraton Palawan Puerto Princesa is located along Sabang Beach, about 75 kilometers from Puerto Princesa airport, it said.

The hotel offers 168 guest rooms that feature amenities such as the signature Four Points by Sheraton Four Comfort Bed, modern marble-floored bathrooms, complimentary Wi-Fi, as well as balconies with scenic views of the mountains and beaches.

There are also suite rooms that offer increased flexibility with 47 square meters and a 65-inch flat-screen TV.

“We are delighted to debut the first Four Points by Sheraton in the Philippines with the opening of Four Points by Sheraton Palawan Puerto Princesa,” Marriott International Area Vice-President, Korea, and Philippines Duke Nam said.

“Palawan is a destination that offers unparalleled cultural and natural adventure, allowing our Four Points brand philosophy of ‘Travel. Reinvented’ to shine. The new hotel welcomes guests with everything they need, including modern guest rooms, genuine service and an authentic sense of the locale in one of the Philippines’ must-visit destinations,” he added.

The newly opened hotel also features two restaurants and a pool bar, allowing guests to explore the delightful cuisine of Puerto Princesa.

“Guests can dine outdoors by the sea at Evolution, the hotel’s all-day dining restaurant with an open kitchen and live cooking stations. Italian restaurant Il Fiore also features al fresco seating, where guests can enjoy upscale Italian cuisine and creative cocktails with the fresh ocean breezes of Sabang Beach,” Marriott Bonvoy said.

Meanwhile, the new hotel also has a 1,367-square-meter swimming pool, a 24/7 fitness center, a sauna, an in-house spa, and a playground.

“Sabang Beach is the perfect destination for solo travelers, groups or families looking for adventure off the beaten path, and to wake up every day in the middle of a UNESCO World Heritage site,” Four Points by Sheraton Palawan Puerto Princesa General Manager Dietmar Platz said.

“Our hotel is ideally situated for enjoying all of it together with the outstanding hospitality of Four Points by Sheraton, and we look forward very much to welcoming guests to discover and explore this uniquely beautiful destination,” he added. — Revin Mikhael D. Ochave

Listen, learn, and live the moment

The year 2023 is marked by business and leadership challenges, stemming from the spillover effects of the pandemic and geopolitical shifts. From implementing hybrid work, to managing employee performance, and to ensuring business resiliency, business leaders honed three key leadership principles that stood out in steering their organizations: listen, learn, and live the moment.

These principles not only form the bedrock of successful leadership but also serve as a compass for navigating the complexities of the modern world. Let’s explore these three leadership lessons.

The first is listen. Listening is the cornerstone of effective leadership. The ability to genuinely and attentively listen to others is a skill that transcends the realms of management and extends into the core of human connection. Leaders who prioritize active listening create a culture of openness and collaboration within their teams. This foundational principle is rooted in the acknowledgment that every voice carries value, and by listening, leaders empower their teams to contribute meaningfully.

Listening involves more than hearing words; it requires a deep understanding of the emotions, concerns, and aspirations embedded in the message. By cultivating empathetic listening, leaders gain valuable insights into the needs and motivations of their team members. This not only fosters a sense of belonging but also allows leaders to tailor their approach, making informed decisions that resonate with the collective spirit of the team.

Moreover, effective listening is a two-way street. Leaders who listen to their teams also encourage a culture of reciprocal communication. This dialogue promotes innovation, as diverse perspectives are brought to the forefront, fostering an environment where creativity flourishes. In essence, the art of listening is not just about absorbing information; it is about creating a shared space where ideas can be exchanged, leading to the evolution and enrichment of the collective vision.

The second is learn. In the dynamic landscape of leadership, continuous learning is not a mere option; it is an imperative. The most successful leaders are perpetual students, embracing the ethos of lifelong learning as they navigate the complexities of an ever-evolving world. Learning extends beyond the acquisition of formal education; it is a commitment to growth, adaptability, and self-improvement.

Leaders who prioritize learning inspire their teams to embrace a growth mindset. By fostering a culture that values curiosity and the pursuit of knowledge, leaders cultivate an environment where innovation thrives. Learning from both successes and failures becomes a shared journey, creating resilience within the team to face challenges head-on and turn setbacks into opportunities for improvement.

Furthermore, leaders who embody a learning mindset become adept at anticipating and adapting to change. In a world where transformation is constant, the ability to absorb new information, understand emerging trends, and apply innovative solutions is a hallmark of effective leadership. By staying ahead of the curve, leaders not only position their teams for success but also set an example of agility and foresight.

The commitment to learning extends to interpersonal skills as well. Leaders who invest time in understanding the strengths and weaknesses of their team members can tailor their leadership approach to maximize individual and collective potential. This personalized understanding fosters a sense of trust and mutual respect, laying the groundwork for a cohesive and high-performing team.

The third and last is live the moment. Amidst the strategic planning and forward-thinking that define leadership, the importance of living in the moment should not be overlooked. Leaders who are present and fully engaged in the current reality create a culture of mindfulness within their teams. This mindfulness is not just about being physically present; it is about cultivating a deep awareness of the present moment and appreciating its significance.

Living the moment involves embracing the concept of mindfulness, a practice that encourages individuals to be fully present and engaged in their current experiences. Leaders who prioritize mindfulness bring a sense of calm and clarity to their decision-making processes. In a fast-paced and often chaotic world, this ability to pause, reflect, and make informed choices is a powerful asset.

Moreover, living the moment extends to the cultivation of a positive and inclusive organizational culture. Leaders who celebrate small victories, acknowledge the efforts of their team members, and create a sense of camaraderie contribute to a workplace where individuals feel valued and motivated. This positive atmosphere not only enhances job satisfaction but also fosters a collaborative spirit that propels the team towards shared goals.

In conclusion, the three leadership lessons — listen, learn, and live the moment — form a triad of principles that, when embraced, elevate leaders from mere managers to inspirational visionaries. Listening establishes a foundation of empathy and collaboration, learning propels continuous growth and adaptability, and living the moment fosters mindfulness and a positive organizational culture. As leaders internalize and apply these lessons, they not only transform their own leadership style but also inspire those around them to reach new heights of success. In the dynamic and interconnected world of leadership, these lessons serve as timeless guideposts, illuminating the path towards effective, empathetic, and influential leadership.

The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.

 

Reynaldo C. Lugtu, Jr. is the founder and CEO of Hungry Workhorse Consulting, a digital, culture, and customer experience transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He teaches strategic management and digital transformation in the MBA Program of De La Salle University. The author may be e-mailed at rey.lugtu@hungryworkhorse.com

Hunks and Hounds calendar pairs bodybuilders with rescue pups

LOUIESLEGACY.ORG

NEW YORK — A calendar that pairs legends from the world of bodybuilding with cute pups to raise funds for animal rescue is celebrating its 10th anniversary with the release of its 2024 edition.

The photos in Hunks and Hounds feature muscled men posing with delightful rescue dogs.

Behind the making of the calendar is New York-based celebrity photographer and dog rescue advocate Mike Ruiz, in collaboration with Loui’s Legacy Animal Rescue founder, Emily Gear.

“Every county, every city — almost everywhere in this country — has an animal shelter full of animals. And, if you don’t realize that, then you don’t know that they’re waiting there for homes and some of them suffer because of it,” said Gear.

Shelter Animals Count estimates that the US shelter population has grown during 2023, and that there are nearly 245,000 additional pets waiting in the shelter system this holiday season compared to last year.

For Ruiz, producing the calendar is probably the most gratifying part of his year. All sales from it go to Louie’s Legacy, the organization says.

“We’ve been able to save thousands of dogs literally from producing this calendar,” he said.

Debby DeLuca, of Staten Island, is a proud foster-turned-adopter of this year’s Mr. November — a Boston Terrier named Vito. “Vito is a superstar… He worked out for the calendar,” said a smiling Ms. DeLuca. — Reuters

Building blocks for a new tomorrow

The new two-floor school building of Laguna Resettlement Community School (LRCS) features four fully equipped rooms with PWD-friendly facilities.

SM Foundation and SM Prime build new school building in Laguna

Overcrowded classrooms, insufficient learning time, inadequately designed learning spaces, and teacher dissatisfaction pose challenges to the Philippine education system.

With inadequate time for instruction, students are unable to grasp concepts thoroughly, leading to a compromised educational experience. Non-conducive learning environments contribute to an atmosphere that hampers intellectual growth. These challenges not only impact students’ academic performance but also the job satisfaction of teachers, who navigate these obstacles daily.

SM Prime and SM Foundation turn over the new school building in LRCS, helping the students receive adequate learning time necessary for a more comprehensive education.

Believing in the power of education, the SM group, through the collaboration of SM Prime and SM Foundation, continuously builds school buildings to help address the challenges faced by the education system in the Philippines. A testament to this is the school building they recently built at the Laguna Resettlement Community School (LRCS).

BEYOND THE STRUCTURE

LRCS has a sheer number of over 2,600 students packed into 52 classrooms, which Principal Rosalie Mabale says affects the performance of the learners and the job satisfaction of teachers.

The SM group strategically placed handwashing facility in LRCS to provide access to clean water while instilling healthy habits to raise a healthy community.

The school day for some pupils in grades 1 and 2 extends until 6 p.m., an unusually late hour for elementary school. This extended schedule leads to long working hours for teachers, leaving them with limited time to provide additional support to students who need it most.

“The intervention classes are very important as we intervene with the problems that may come along the way of learning. Ginagawa natin ito para hindi pa man dumarating ang problema, nabibigyan na natin ng solusyon,” Principal Rosalie shared, adding that lack of facilities hamper them from providing the quality of education they hope to give.

“Let’s say you have learners who are non-readers or non- numerates at natutukan sila dahil mayroon kang maayos na silid- aralan. Through this, masasabi mong you were able to make a difference in the lives of the learners kapag natuto silang magbasa at magsulat. Mabo-boost natin ang kanilang academic performance at maiiwasan natin ang bullying, na siyang makakatulong sa kanilang mental health,” she added.

The new school building fosters an environment conducive to effective learning.

By providing spacious and well-equipped facilities, students now have room for growth, fostering an environment conducive to effective learning. The expansion of school infrastructures has allowed LRCS to end class shifts in second grade, ensuring that students receive the adequate learning time necessary for a more comprehensive education.

“Napakalaking factor na makakauwi na ang mga bata ng mas maaga at makakapahinga ang mga teachers sa tamang oras. Malaking factor ito sa mental health, quality of education, academic performance, and overall wellness of the children and teachers,” she smiled.

For LRCS, their new school building goes beyond the physical structure — it’s a symbol of something that is built to last.

“This building is not just about the school structure or the conducive learning environment. Ang pinakamalaking epekto nito ay nasa pagkatao ng mga bata. Through this building, they will be reminded that they are the next generation and the future leaders of the country, and they, too, can help the community they belong to,” she shared.

Joining the turnover ceremony are representatives from Laguna LGU; DepEd and SM group, including SM Center San Pedro Asst. Mall Manager Christian Liston; SM Foundation Executive Director for Education Programs Carmen Linda Atayde; San Pedro, Laguna Mayor Art Mercado and Vice-Mayor Ina Olivarez; and Laguna Resettlement Community School Principal Rosalie Mabale.

“Through their programs, they are making a difference in the lives of every Filipino learner, especially here in LRCS. Having this building helps nurture better individuals as they see that they belong to a community that genuinely cares for them. Initiatives like this help them learn about civic responsibility. When learners achieve their goals in the future, they will remember the value of giving back to the community,” she added.

 

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New bank rules are bad for the West, worse for the rest

REDD F-UNSPLASH

WALL STREET’s most powerful bankers told the Senate Banking Committee last week that proposed new rules known as the “Basel III endgame” would hurt average Americans. JPMorgan Chase & Co. CEO Jamie Dimon warned that by demanding banks expand their capital cushions, the regulations would raise the costs of “your local affordable housing, or the Montana pension plan.”

While that may very well be true, at least those Montana pensioners have people in the Senate supposedly looking out for their interests. The bigger problem with the way countries are implementing Basel III regulations is that nobody’s looking out for the interests of borrowers outside their own borders. That hurts everyone — borrowers, lenders, and even the planet.

Back before the financial crisis, developed-world banks played a central role in financing the growth of emerging economies. In 2006, for example, Indian companies and households borrowed almost as much from foreign banks as they did from domestic institutions.

Crucially, foreign banks often contributed more than domestic institutions to financing long-term, growth-enhancing infrastructure projects. Sometimes as much as a third of external borrowing in India supported the infrastructure sector.

In recent years, as various Basel III rules have been introduced around the world, that lending has begun to dry up. When banks were told that they needed to fund long-term, illiquid lending with more secure, higher-cost assets, they cut down sharply on the longer-duration loans essential for infrastructure projects. Few stayed interested in loan tenors of 15 years, and even tenors of five to seven years received far fewer takers.

The rich world may not have noticed because, of course, public spending on domestic infrastructure in Europe and the US has vastly increased in recent years. But emerging markets certainly have. Cross-border syndicated loans to developing countries — often used as a way to get foreign bankers into projects in emerging economies — fell as a proportion of the total from almost 90% in the 2000s to just over half by 2014.

New ways of weighting the risk attached to various assets — such as those the Basel III endgame proposes to implement for US banks — threaten to penalize the poorest countries the most. One study by the G20’s Global Infrastructure Hub found that if banks used actual historical data instead of the new mechanisms, it might make a 37% difference in how they evaluated their possible losses from loans to infrastructure in developing countries, but only 11% in loans to high-income ones.

Shouldn’t we in the emerging world be tapping the bond market instead of banks to fund infrastructure? Such advice is perfectly reasonable — and, given realities on the ground, absolutely useless. The regulatory and financial capacity that would be required is beyond most developing countries. Meanwhile, everyone has banks and banking regulators.

In any case, fast-growing emerging markets have governments that need to borrow more and thereby take up all the oxygen that would otherwise have kept a non-government bond market alive. That’s why bank loans have remained the primary financing instrument for infrastructure in emerging economies, even if fewer foreign banks are in the mix.

Why should it matter if the developing world has to rely on its own scarce resources to build the trillions of dollars of infrastructure it needs? Is there any reason the Senate Banking Committee, say, should care?

Well, yes. In the 2000s, banks could lend to infrastructure abroad at margins of 50 basis points; that rose by 2016 to 250 to 300 basis points. When you add this much friction, bankers stop looking for the best projects, only the safest ones — and lazy banking means that savers earn less.

US senators — and regulators in Brussels, as well — should ask themselves how many remunerative projects their financial sectors will lose out on in the post-Basel III era, and what that means for the savings of their aging citizens. Are regulators punishing banks for the financial crisis, or are they punishing pensioners?

If both borrowers in the developing world and savers in the West are hurt by the mindless application of Basel III principles, so is the fight against climate change. Green infrastructure — such as solar energy — has particularly high initial costs. Without more long-term lending across borders, countries in the Global South are not going to be able to afford the infrastructure they need to mitigate carbon emissions and adapt to climate change.

Policymakers should consider how endless restrictions aimed at preventing a future financial crisis are worsening a climate crisis that threatens devastating impacts now. Their zeal for a safer banking sector may be fueling risks that are far harder to contain.

BLOOMBERG OPINION

Managing without regular employees

We’re a three-year-old family business. Outside of family members, our 65 workers are all temps, casual employees, part-timers and project workers. We rely much on manpower agencies and third-party service providers to handle our operations. Is it possible for us to continue with this arrangement without necessarily hiring full-time, regular workers? What are the adverse implications, if we keep operating with non-regular workers? — Cheap Skate.

Sooner or later, you’ll be in legal trouble with labor authorities, who may receive complaints from “employees” working under your roof. This is possible when your management team ignores the so-called “four-fold test” of establishing the existence of an employer-employee relationship.

The four criteria of the test are as follows: One, selection and engagement of employees. Two, payment of their wages and benefits. Three, the power of dismissal. And four, the power to control the employee’s conduct.

Even if you have a decent number of regular workers but they’re outnumbered by atypical workers like those provided by manpower agencies and cooperatives, it could raise possible issues in the near future. That’s why you should exercise extreme caution in maintaining a workforce composed of non-regular employees.

If I were to have my way, I’d aim for a ratio of 80-20 (regular workforce vs. temps), which will likely be sufficient to persuade labor authorities, tripartite bodies or industry labor-management councils that you’re not abusing the temp system.

WASTAGE INDEX
Any organization fully relying on temps does not understand employee motivation. Who would want to continue working for a manpower agency or a cooperative for only the most basic wages and benefits and limited career opportunities?

You must consider the experience accumulated by temps that is wasted if and when they decide to move to some other employer who can give them much better compensation and career opportunities. This will be made clear when you compute the company’s wastage index, a measure of how well you maintain temps and other contractual workers.

Let’s say you have 500 temps at the start of the year. By Dec. 31, 60 temps have resigned voluntarily and have been honorably discharged, for various reasons. This translates to a 12% turnover rate, sometimes called the wastage index — representing the loss of experienced and talented people.

Why do we consider it wastage? Take the issue of training.  How can your work teams function effectively if the temps continually come and go? Imagine the hassle. This may not be a big issue in the case of simple manual operations in organizations like fast food restaurants and department stores.

But then, how about other businesses like high-technology manufacturing or service jobs requiring special skills for customer relations?

Imagine the investment in training that you had to make. This problem is magnified with the continued inflow of new temps requiring fresh training, even if you classify this as an employment cost and not an investment. Double check whether the cost does not in any way wipe out the advantages of hiring temps.

Another reason to be dubious about an all-temp company is that customer service is no simple task that can be left to workers whose continued presence is dependent on your contract with the service provider. Another issue is their motivation to perform their duties when their minds are focused on finding better employment.

Therefore, your best approach is to periodically assess your options when relying on temps.

LABOR SUPPLY
Unemployment in this country is high even in normal economic situations. That means an abundance of people looking for jobs. Many are eager to be employed full time but only a handful are chosen because the majority lack the skills required for the tasks at hand.

Looking for the best person for the job is a difficult challenge for many organizations. This can be easily demonstrated by thousands of job ads posted on social and print media every day.

Even if you’re focused on maintaining only temps for your organization, there will come a time that you’ll need the right number of people who would want to be hired directly  rather than by manpower agencies, cooperatives or other third-party service providers. If that happens, what would you do?

 

Bring Rey Elbo’s leadership program on “Superior Subordinate Supervision” to your management team. Or chat your workplace issues via Facebook, LinkedIn, X (Twitter) or e-mail elbonomics@gmail.com or via https://reyelbo.com

How PSEi member stocks performed — December 14, 2023

Here’s a quick glance at how PSEi stocks fared on Thursday, December 14, 2023.

Philippines ranks near bottom of Corporate Governance Index

THE Philippines has kept the 11th spot but at a lower overall score in a ranking of 12 Asia-Pacific countries on their performance in corporate governance (CG) and environmental, social, and corporate governance (ESG). Read the full story.

 

Philippines ranks near bottom of Corporate Governance Index

PHL stocks rebound as Fed hints at policy easing

REUTERS

PHILIPPINE SHARES rebounded on Thursday on improved investor sentiment as the US Federal Reserve kept rates steady at its final meeting this year, with its chief saying they are done hiking borrowing costs.

The Philippine Stock Exchange index rose by 154.74 points or 2.47% to end at 6,410.48 on Thursday, while the broader all shares index climbed by 55.82 points or 1.67% to close at 3,394.96. 

“This Thursday, the local market rose by 154.74 points to 6,410.48 as investors cheered the Federal Reserve’s dovish outlook after it held policy rates unchanged in its recent meeting. The Federal Reserve stated that they anticipate three possible rate cuts for 2024, to be done in 25-basis-point (bp) increments,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“This gave hope that the Fed may ease their policy soon after more than a year-long combat against inflation. As a result, the bourse was in the green territory for the whole session and even breached the 6,400 resistance level,” he added. 

The Federal Reserve left interest rates unchanged on Wednesday and US central bank chief Jerome H. Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected and with a discussion of cuts in borrowing costs coming “into view,” Reuters reported.

“People are not writing down rate hikes” in their latest economic projections, Mr. Powell said in a press conference following the end of the central bank’s final policy meeting of the year.

“That’s us thinking we’ve done enough,” he said, adding that rate increases were “not the base case anymore.”

“Locally, investors bought into the assumption that the Bangko Sentral ng Pilipinas (BSP) would follow in a similar fashion, maintaining its own policy rate, but reducing this next year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP on Thursday kept its policy rate steady at a 16-year high of 6.5% for a second straight meeting, as expected by 15 of 17 analysts in a BusinessWorld poll conducted last week, but said there is a need to remain hawkish amid lingering upside risks to inflation.

Most sectoral indices ended higher on Thursday. Holding firms increased by 228.11 points or 3.82% to 6,185.79; property rose by 96.92 points or 3.51% to 2,851.14; financials went up by 27.77 points or 1.64% to 1,719.58; industrials gained 144.33 points or 1.64% to end at 8,926.87; and mining and oil climbed by 61.44 points or 0.64% to 9,573.89. 

Meanwhile, services slipped by 6.28 points or 0.4% to 1,546.28.

Value turnover went up to P6.78 billion on Thursday with 385.71 million issues changing hands from the P3.55 billion with 245.11 million shares seen the previous day.

Advancers overwhelmed decliners, 120 against 59, while 44 names ended unchanged.

Net foreign selling climbed to P367.52 million on Thursday from P280.55 million on Wednesday. — with Reuters

Peso recovers as Fed, BSP keep key rates unchanged

THE PESO recovered against the dollar on Thursday as both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) kept rates unchanged at their policy meetings.

The local unit closed at P55.795 per dollar on Thursday, strengthening by 26 centavos from P56.055 on Wednesday, based on Bankers Association of the Philippines data.

The peso opened Thursday’s session at P55.75 against the dollar. Its intraday best was at P55.62, while its worst showing was at P55.80 versus the greenback.

Dollars exchanged went down to $1.48 billion on Thursday from $1.6 billion on Wednesday.

“Today, the pair tapered off as volatility overnight saw the dollar weaken after the US Fed held rates steady while signaling that their next move will be rate cuts,” Security Bank Corp. Chief Economist Robert Dan J. Roces likewise said in a Viber message on Thursday.

The US central bank kept the fed funds rate steady at the 5.25%-5.5% range for a third straight time during its Dec. 12-13 meeting, with Fed Chair Jerome H. Powell saying they are likely done hiking borrowing costs.

The Fed raised rates by a total of 525 basis points (bps) from March 2022 to July 2023.

The peso was supported by the BSP’s hawkish rhetoric after its meeting on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The BSP on Thursday kept its policy rate steady at a 16-year high of 6.5% for a second straight meeting, as expected by 15 of 17 analysts in a BusinessWorld poll last week, but said they remain cautious amid lingering upside risks to inflation.

The Monetary Board has raised benchmark interest rates by 450 bps since it began its tightening cycle in May 2022.

For Friday, Mr. Roces said the peso could continue to get a lift from the BSP’s hawkish stance. He expects the peso to move between P55.50 and P55.80, while Mr. Ricafort sees it ranging from P55.70 to P55.90. — A.M.C. Sy

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