Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 4499

Pag-IBIG posts record-high P38.06-B net income in Jan.-Oct. 2022; up 39%

Pag-IBIG Fund netted a record-high income of P38.06 billion from January to October 2022, the agency’s top executives announced on Dec. 12.

“I am happy to report that Pag-IBIG Fund continues its strong performance this year. Our P38.06 billion net income in just the first ten months of the year has already surpassed the P34.73 billion we posted in all of 2021. Our performance shows how excellently we are managing the funds that our members have saved with us. This places us in a strong position to continue providing social services and help more Filipinos gain better lives, in line with the directive of President Ferdinand Marcos, Jr.,” said Secretary Jose Rizalino L. Acuzar of the Department of Human Settlements and Urban Development (DHSUD), who serves as chairperson of the 11-member Pag-IBIG Fund Board of Trustees.

Pag-IBIG Fund Chief Executive Officer Marilene C. Acosta, meanwhile, stated that the agency’s total assets have now reached P810.07 billion, gaining nearly 10% or P65.49 billion from the yearend 2021 level. She added that even with still two months left before the year ends, the agency’s accomplishments as of October already show that it shall have its best-performing year yet.

“We thank our members and stakeholders for their unwavering trust and support, which has allowed us to gain another banner year. From our accredited developers in building and delivering quality housing projects and accounts, to the business community for the timely remittance of their employees’ monthly savings and loan payments, to our members who continue to save more with us and choose our loan programs, and to our borrowers for their prompt payment on their loans. The sum of all these parts is a stronger-than-ever Pag-IBIG. We count on their continued support so that we can maintain our remarkable growth and help even more Filipino workers uplift their lives through savings and by gaining homes of their own,” Acosta said.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

China’s rules for ‘deepfakes’ to take effect from Jan. 10

PIXABAY

SHANGHAI — China’s new rules for content providers that alter facial and voice data will take effect from Jan. 10, its cyberspace regulator said, as it looks to more tightly scrutinize so-called “deepfake” technology and services.

The regulations from the Cyberspace Administration of China (CAC) issued late on Sunday provide for people to be protected from being impersonated without their consent by deepfakes — images that are virtually indistinguishable from the original, and easily used for manipulation or misinformation. 

The CAC said the move was aimed at curbing risks that might arise from activities provided by such platforms that use deep learning or virtual reality to alter any online content, what the regulator calls “deep synthesis service providers,” and to also promote the industry’s healthy development. — Reuters

 

US inflation will be much lower by end of 2023 — Yellen

US one hundred dollar notes are seen in this picture illustration taken in Seoul, Feb. 7, 2011. — REUTERS

US Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in US inflation in 2023, barring an unexpected shock.

“I believe by the end of next year you will see much lower inflation if there’s not … an unanticipated shock,” she told CBS’ 60 Minutes in an interview released Sunday. 

Asked about the likelihood of recession, the former Federal Reserve chair said, “There’s a risk of a recession. But … it certainly isn’t, in my view, something that is necessary to bring inflation down.” 

Ms. Yellen’s comment came days before the Fed is expected to slow the aggressive pace of interest rate increases it has pursued this year. Fed Chair Jerome Powell has telegraphed a smaller, half-of-a-percentage point increase in the policy rate, to a range of 4.25%–4.5%, after four 75-basis point hikes this year. 

Ms. Yellen told CBS that economic growth was slowing substantially, inflation was easing and she remained hopeful that the labor market would remain healthy. 

She said she hoped the spike in inflation seen this year would be short-lived, and said the US government had learned “a lotta lessons” about the need to curtail inflation after high prices seen in the 1970s. 

Shipping costs had come down and long delivery lags had eased, while gasoline prices at the pump were “way down.” 

“I think we’ll see a substantial reduction in inflation in the year ahead,” she said. — Reuters

 

Waning trust: China shadow banks pivot away from property to survive

REUTERS

SHANGHAI/HONG KONG — For more than a decade, Chinese developers’ debt-fueled construction boom enriched the country’s shadow banks, who were eager to capitalize on the needs of an industry desperate for credit and too risky for traditional lenders.

Now, in the wake of a government clampdown on real estate firms’ debt binge, that credit demand has collapsed — and so too has the single biggest revenue stream for shadow banks, also known as trust firms. 

China’s shadow banking industry — worth about $3 trillion, roughly the size of Britain’s economy — is scrambling for new business, including direct investment in companies, family offices, and asset management. 

It is also shrinking, with once-well-paid employees leaving for other jobs after scavenging for new deals. The industry’s plight is a sharp contrast to China’s main street financial firms, which the crisis has not yet seriously affected. 

“Everyone was eating a mouthful of rice, surviving another day,” said Jason Hao, who left his job this year at a Shanghai trust firm after his pay plunged from as much as 4 million yuan ($570,000) a year to about 240,000 yuan ($34,000). 

He is now working at an asset management company. 

Data from industry-tracking website Yanglee.com shows 1,483 real estate-related trust products were sold in 2022 through the end of September, down 69.7% from 4,891 during the same period last year. 

The value of the 2022 deals was 117.2 billion yuan, down 77.9% from 531.3 billion yuan. Real estate products accounted for 8.7% of all trust products in September, compared with about 30% in the same month the last two years. 

The National Audit Office and China’s banking regulator have both been reviewing trust firm accounts and deals this year for risk, said three people with knowledge of the matter. 

The National Audit Office and the CBIRC did not respond to requests for comment. 

In an internal meeting in October, an executive at Shanghai Trust, a state-owned firm that once focused on property, said revenue was down by almost half this year compared with the year before, according to two people with direct knowledge of the meeting. 

The firm plans to focus on asset management and family offices to shore up its finances while pivoting away from lending to developers, once its core business, one of the people said. 

Shanghai Trust did not respond to requests for comment. 

The top priority for all trust companies now is “how to transition, what will let you survive,” said another trust firm employee, who like the other current employees interviewed for this article declined to be named because of the sensitivity of the matter. 

CONTAGION RISK 

Trust firms were dubbed “shadow banks” because of how they operated outside many of the rules that govern commercial banks. Banks in China sell wealth management products, the proceeds of which are channeled by trust firms to property developers and other sectors that are unable to tap bank funding directly. 

Because of the risk, shadow banks could charge interest rates of up to 18%, far higher than the typical 2% to 6% seen at banks at the height of the boom. 

Concerns about outsized exposure to property developers have grown this year as the embattled sector in the world’s second-largest economy has slowed rapidly. 

Beijing has stepped up support in recent weeks to undo a liquidity squeeze that has stifled the real estate market, which makes up a quarter of the Chinese economy and has been a key driver of growth. 

OUT OF OPTIONS 

At the trust unit of state-owned China Construction Bank (CCB) and Zhongrong International Trust, previously one of China’s largest shadow bankers, investing like private equity and venture capital funds has become more common, two people with direct knowledge of the companies said. 

CCB Trust wants to invest in leading companies in niche fields; it recently invested in Beijing Tianyishangjia New Material Corp, which manufactures materials used in train brakes, said one person who works at the company. 

Zhongrong International Trust has been working with local governments, including Qingdao provincial authorities, to source early-stage deals in intelligent manufacturing, an executive there said. 

Jiangxi-based Avic Trust has been investing in waste-processing firms, including funding photovoltaic power stations that it then rents out, said a person with direct knowledge. 

CCB Trust, Zhongrong International Trust and Avic Trust did not respond to requests for comment. 

In some cases, trust firms are buying projects from struggling developers and hiring new managers to recoup their losses, according to corporate records and three people in trust firms who are aware of such acquisitions. 

Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust, and Minmetals International Trust have all bought project companies from struggling developers in the last few months, corporate records and company announcements showed. 

Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust and Minmetals International Trust did not respond to requests for comment. 

For Mr. Hao and other former trust employees, the companies’ search for stability feels familiar. 

“My situation now is better than it was when I left the trust, but will never be as good as it was at the height of the boom when I was there,” Mr. Hao said. — Reuters

 

NASA’s Orion capsule returns to Earth, capping Artemis I flight around moon

On Nov. 28, NASA’s Orion spacecraft reached its maximum distance from Earth during the Artemis I mission—268,563 miles away from our home planet, farther than any spacecraft designed to send humans to space and back has gone before. In this image, Orion captures a unique view of Earth and the Moon, seen from a camera mounted on one of the spacecraft’s solar arrays. — NASA

NASA’s Orion capsule barreled through Earth’s atmosphere and splashed down in the Pacific ocean on Sunday after making an uncrewed voyage around the moon, winding up the inaugural mission of the US agency’s new Artemis lunar program 50 years to the day after Apollo’s final moon landing.

The gumdrop-shaped Orion capsule, carrying a simulated crew of three mannequins wired with sensors, plunked down in the ocean at 9:40 a.m. PST (1740 GMT) off Mexico’s Baja California peninsula, demonstrating a high-stakes homecoming before NASA flies its first crew of Artemis astronauts around the moon in the next few years.

“This was a challenging mission, and this is what mission success looks like,” NASA’s Artemis I mission manager Mike Sarafin told reporters after splashdown, adding that his team didn’t immediately notice any issues with Orion’s return from space.

A US military helicopter and a group of fast boats approached the capsule after splashdown for about five hours of inspections before Orion is hoisted aboard a US Naval vessel for a trip to San Diego, California.

The splashdown capped a 25-day mission less than a week after passing about 79 miles (127 km) above the moon in a lunar fly-by, and came about two weeks after reaching its farthest point in space, nearly 270,000 miles (434,500 km) from Earth.

Roughly 30 minutes before splashing down, the capsule committed to a fiery, 20-minute plunge into Earth’s atmosphere when it shedded its service module in space, exposing a heatshield that reached peak temperatures of nearly 5,000 degrees Fahrenheit (2,760 degrees Celsius) during its blazing-fast descent.

Atmospheric friction slowed the capsule from 24,500 miles per hour (39,400 kph) to 325 mph, followed by two sets of parachutes that helped brake its speed to an expected 20 mph at splashdown. The capsule showed a “perfect” descent rate, Navias said.

The capsule blasted off on Nov. 16 from the Kennedy Space Center at Cape Canaveral, Florida, atop NASA’s towering next-generation Space Launch System (SLS), now the world’s most powerful rocket and the biggest NASA has built since the Saturn V of the Apollo era.

The debut SLS-Orion voyage kicked off Apollo’s successor program, Artemis, aimed at returning astronauts to the lunar surface this decade and establishing a sustainable base there as a stepping stone to future human exploration of Mars.

Mission engineers will spend months examining data from the Artemis I mission. A crewed Artemis II flight around the moon and back could come as early as 2024, followed within a few more years by the program’s first lunar landing of astronauts, one of them a woman, with Artemis III.

NASA expects to name its crew of astronauts for the Artemis II mission in early 2023, NASA’s Johnson Space Center director Vanessa Wyche told reporters.

Though Orion encountered some unexpected communication blackouts and an electrical issue during its voyage around the moon, NASA has given high marks to the performance of both SLS and Orion so far, boasting that they exceeded the US space agency’s expectations.

“This has been an extraordinarily successful mission,” NASA administrator Bill Nelson told reporters.

By coincidence, the return to Earth of Artemis I unfolded on the 50th anniversary of the Apollo 17 moon landing of Gene Cernan and Harrison Schmitt on Dec. 11, 1972. They were the last of 12 NASA astronauts to walk on the moon during a total of six Apollo missions starting in 1969.

The Artemis program, named after the twin sister of Apollo, marks a major turning point for NASA, redirecting its human spaceflight program beyond low-Earth orbit after decades focused on space shuttles and the ISS.

NASA considered re-entry the single most critical phase of Orion’s journey, testing whether its newly designed heat shield can withstand atmospheric friction and safely protect astronauts that would be on board.

“It is our priority-one objective,” Mr. Sarafin said at a briefing last week. “There is no arc-jet or aerothermal facility here on Earth capable of replicating hypersonic re-entry with a heat shield of this size.”

NASA officials have stressed the experimental nature of the Artemis I mission, marking the first launch of the Boeing Co-built SLS and the first combined with Orion, which previously flew a brief two-orbit test launched on a smaller Delta IV rocket in 2014. The capsule was built by Lockheed Martin.

Compared with Apollo, born of the Cold War-era US-Soviet space race, Artemis is more science driven and broad-based, enlisting other countries and commercial partners such as Elon Musk’s SpaceX and the space agencies of Europe, Canada, and Japan.

Orion’s European Space Agency-supplied service module, a housing for its propulsion system that was jettisoned before the capsule’s descent into Earth’s atmosphere, “performed beautifully,” ESA’s mission manager Philippe Deloo said in a statement.

“This is a great day not only for America, but it’s a great day for all of our international partners — that’s the difference from 50 years ago,” Mr. Nelson said. — Reuters

Air India nears historic order for up to 500 jets — sources

Air India Boeing 787-8 Dreamliner. — WIKIMEDIA COMMONS

PARIS/NEW DELHI — Air India is close to placing landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious renaissance under the Tata Group conglomerate, industry sources said on Sunday.

The orders include as many as 400 narrow-body jets and 100 or more wide-bodies, including dozens of Airbus A350s and Boeing 787s and 777s, they said, speaking on condition of anonymity as finishing touches are placed on the mammoth deal in coming days.

Such a deal could top $100 billion dollars at list prices, including any options, and rank among the biggest by a single airline in volume terms, overshadowing a combined order for 460 Airbus and Boeing jets from American Airlines over a decade ago.

Even after significant expected discounts, the deal would be worth tens of billions of dollars and cap a volatile year for plane giants whose jets are again in demand after the pandemic, but who face mounting industrial and environmental pressures.

It would also allow Airbus to secure a home for some A350 production slots initially earmarked for Russia’s Aeroflot and now left open because of war-related sanctions against Moscow.

Airbus and Boeing declined to comment. Tata Group-owned Air India did not respond to a request for comment.

China last week delivered its first C919 jetliner but is at least a decade away from competing on such a scale, experts say.

The potential blockbuster order comes days after Tata announced the merger of Air India with Vistara, a joint-venture with Singapore Airlines, to create a bigger full-service carrier and strengthen its presence in domestic and international skies.

That deal gives Tata a fleet of 218 aircraft, cementing Air India as the country’s largest international carrier and second largest in the domestic market after leader IndiGo

Buying debt-ridden Air India has also given Tata access to valuable flying rights and landing slots, especially to destinations in the United States and Europe.

HURDLES TO GROWTH
Air India’s maharajah mascot was once synonymous with lavishly decorated planes and stellar service but its reputation declined in the mid-2000s as financial troubles mounted.

Founded by JRD Tata in 1932, Air India was nationalized in 1953. Tata regained control in January and has since been working to revive its reputation as a world-class airline.

The order reflects a strategy to recapture a solid share of trips between India’s large overseas diaspora and cities such as Delhi and Mumbai, dominated by foreign rivals such as Emirates.

Air India also wants to win a bigger share of regional international traffic and the domestic market, setting up a battle on both fronts with IndiGo.

Delivered over the next decade, the 500 jets would replace and expand fleets in the world’s fastest-growing air travel market, while contributing to Prime Minister Narendra Modi’s goal of expanding the economy to $5 trillion.

But experts warn many hurdles stand in the way of Air India’s ambition to recover a strong global position, including frail domestic infrastructure, pilot shortages and the threat of tough competition with established Gulf and other carriers.

It may also struggle to get the medium-haul Airbus A321neos being ordered for the Air India-Vistara tie-up as quickly as it would like, with the European planemaker sold out until 2028 or beyond.

One industry source said new Boeing 737 MAXs will most likely go to Air India Express, the company’s budget operator which could be renamed.

Insiders say plane and engine makers have been clamoring at Air India’s door for months, with new Chief Executive Campbell Wilson refusing to rush the make-or-break fleet decision.

Reuters reported in July that Air India was taking more time to study Airbus A350s and Boeing wide-body 787 and 777 models, on top of a probable mixed order for smaller single-aisle jets.

Last month, Mr. Wilson confirmed talks to “greatly expand” Air India’s fleet over the next five years and said, “At the risk of gross understatement, the investment will be substantial.” — Reuters

A new chapter begins for 2022’s ‘MAP Management Man of the Year’

Isidro A. Consunji (second from left) receives this year’s MAP Management Man of the Year award in a ceremony last Nov. 28. — www.facebook.com/map.org.ph

When he was first nominated for the Management Association of the Philippines’ (MAP) prestigious award of “MAP Management Man of the Year 2022,” Isidro A. Consunji, chairman, president, and chief executive officer of DMCI Holdings, Inc., thought to ask to be withdrawn from consideration.

“I don’t think I’ve done anything extraordinary to deserve a nomination,” Mr. Consunji said in his acceptance speech during MAP’s awards ceremony last Nov. 28. He instead offered up a list of other names he thought were more deserving, including his father, the late Engr. David M. Consunji, who founded the company he now leads.

MAP confers the “Management Man of the Year” award to individuals in business or government, MAP member or not, who have attained clear and inarguable distinction in management, in addition to making valuable contributions to the country’s development and shaping its national values.

“If my father was here today, I’m sure he would laugh and say ‘Kamote ’yan eh’ (He’s a dimwit). Dad, wherever you are today, I hope this kamote made you and mom proud,” he said.

Mr. Consunji took D. M. Consunji, Inc.’s (DMCI) reins from his father, David “DM” Consunji, a civil engineer who started the construction company before it grew into the conglomerate it is today.

DMCI started small, from constructing chicken houses for the Bureau of Animal Industry, until it has gradually built up a reputation for its punctuality and quality work. Since then, the company moved on to major projects such as the Tacloban Coca-Cola Plant and Bacnotan Cement Plant.

“When DMCI was founded in 1954, my father’s ultimate objective was to build not only an enterprise, but an institution. By that he meant a business that could provide service to the community, stability and protection to his people. Fast-forward 30 years, we’re still nowhere near that,” Mr. Consunji recounted.

He said that as a contractor, they were beholden to the projects of prospective clients and winning bids for those projects. Thus, their growth was limited, and they could not plan the long-term strategies that could bring their vision of the company to reality.

Mr. Consunji had an engineering background, but he admitted to have been more interested in the business management side of running a business. He spent a lot of time with his father on construction sites, and it was through such experiences that he learned how to deal with “difficult employees, angry suppliers, and tough customers,” as well as the importance of productivity, efficiency, and cash flow.

With a newly discovered passion for business, he had grand ideas about how he could grow DMCI, and in 1995, DMCI Holdings was incorporated as a holding company to consolidate all construction business, construction component companies, and related interests of the Consunji family.

The rest was history. In only a few years after incorporation, they expanded their reach to include five major subsidiaries, namely: D.M. Consunji, Inc.; DMCI Project Developers, Inc.; Semirara Mining and Power Corp.; DMCI Power Corp.; and DMCI Mining Corp. DMCI Holdings and its subsidiaries are engaged in construction, real estate, coal and nickel mining, power generation, and water distribution.

The company also has an indirect ownership in Maynilad Water Services, Inc. through a 27% stake in Maynilad Water Holding Co., Inc., which owns 93% of the water concessionaire.

With more than five decades of solid track record in the construction business, DMCI enjoyed the continued patronage of institutional clients such as the Ayala Group; SM Group; Kuok Group; Robinson’s Group; San Miguel Corp.; banking institutions such as the Citibank, N.A., Bank of the Philippine Islands, Equitable and Urban Bank; educational institutions such as the University of the Philippines, and De La Salle University; and multinationals such as the John Laing, Obayashi, Mitsubishi Heavy, Oriken, and Nippon Steel. Also, industrial companies and some government agencies have sought the expertise and services of DMCI and still maintain partnerships with the company to this day.

Mr. Consunji has held the position of the company’s director for 25 years. A graduate of B.S. Civil Engineering at the University of the Philippines like his father, Mr. Consunji then obtained his Master’s degree in Business Economics from the Center for Research and Communication and Masters in Business Management from the Asian Institute of Management, and attended the Advanced Management Program at Instituto de Estudios Superiores de la Empresa (IESE) in Barcelona, Spain.

For the past five years, he has been the president of DMCI-HI, Dacon Corp. and Asia Industries, Inc. He is also the chairman of the board of directors of DMCI Mining Corp., D.M. Consunji, Inc., DMCI Homes, and Beta Electric Corp. He is the vice-chairman of Maynilad Water Services, Inc., and director of Semirara Mining and Power Corp., DMCI/MPIC Water Co., Inc., Crown Equities, Inc., Atlas Consolidated Mining and Development Corp., Carmen Copper Corp., Sem-Calaca Power Corp., Berong Nickel Corp., Toledo Mining Corp. and ENK PLC (London).

He was also the former president of the Philippine Constructors Association and Philippine Chamber of Coal Mines, Inc. At present, he is the chairman of the board of the Philippine Overseas Construction Board and a board member of Construction Industry Authority of the Philippines.

Awarding him with the “MAP Management Man of the Year 2022,” MAP recognized Mr. Consunji’s “personal contributions to shaping national values and inspiring others through his track record of integrity, managerial competence and professional leadership.”

“Some people see life as a series of moments. For me, being an avid reader, I see it as a book with blank chapters. You pen your own story and hope in the end it’s one worth reading and retelling,” Mr. Consunji said in his speech.

“My story is not yet done. I think I have enough gas in the tank to start a second career, and in a few years, I may surprise all of you. With more idle time, I hope to foray into agriculture and create sustainable value in the countryside,” he continued, hinting a possible new venture for his conglomerate.

Closing his speech, Mr. Consunji also addressed the leaders and managers of the next generation to give them advice.

“Play to your team’s strengths. When we were building our business portfolio, we did not have much financial strength. I had to be cautious with our investments. I always asked myself, ‘Do we have the organizational competence to make up for our small balance sheet?’. As leaders and business managers, we need to have a clear understanding of our organization and our people. I believe that self-knowledge and humility lead to better decision-making,” he said.

Mr. Consunji thanked economist Dr. Bernardo “Bernie” M. Villegas for teaching him such lessons.

“He was responsible for instilling a spiritual character in my work. Through him, I realized that making a profit is not the sole objective of business. Instead, business should be a catalyst for shared prosperity, that we should do what we can to bring sunshine into the lives of our fellow Filipinos,” he said.

“I don’t consider myself a religious man, but I do believe your work can be your prayer.” — Bjorn Biel M. Beltran

Metrobank’s Wealth Insights provides expert advice, intelligence for managing and growing wealth

After years of building wealth, perhaps you are thinking about ways to preserve it and grow your money further.

Yet, as we know, there are many considerations before making an investment decision and ensuring that you made the right ones, especially in a volatile market and amid different external factors that may affect your positions.

Of course, you want to find the best opportunities in the market for you to invest in. And to do so, you would need to research and get relevant data, as well as seek insights from experts who are always updated on the global and local markets. These can be valuable to ascertain that you are properly managing and investing your wealth to reach more of your wealth goals.

To make access to such investment-related advice and information more convenient, you can simply go to the Wealth Insights website of Metropolitan Bank & Trust Co. (Metrobank).

On a wealth management proposition, access to financial planning and advice as well as market data and research are two of the four core priorities of more than three-quarters of investors, according to The Future of Asia Wealth Management Series survey.

Through Wealth Insights, Metrobank pioneered another means to make expert advice and other information associated with wealth management more accessible for its clients, particularly high-net-worth individuals (HWNIs).

“Wealth Insights is an online portal created by Metrobank for high-net-worth clients who want to smartly manage and grow their wealth,” said Fernand Antonio Tansingco, Metrobank’s Senior Executive Vice-President and Head of Financial Markets Sector. “It provides timely and relevant information, thoughtful perspectives, and expert advice and actionable investment ideas from Metrobank’s finance and investment experts as well as independent third-party research providers.”

Clients can get a daily dose of market updates and smart investment strategies at Wealth Insights’ The Gist section, which can serve as a guide to making portfolio decisions.

Metrobank also provides top stock and bond recommendations under Portfolio Picks. For ideas and advice for your bond portfolio, you can depend on the research and analysis of Metrobank’s in-house experts and its partner CreditSights, an award-winning credit research provider owned by the Fitch Solutions Group, for a wider coverage of global bond issuers. The stock recommendations are also based on the extensive research and experience of Metrobank experts.

In addition, the online portal gives you access to the most important market-moving news from Reuters, curated by Metrobank, that can affect the wealth of HNWIs in the country.

Wealth Insights also includes essays and articles on various financial and wealth management topics, where you can get opinions and perspectives from experts about issues and ideas that can shape your wealth management strategy.

Under these sections of Wealth Insights are a range of topics that cover news and expert analysis on the foreign exchange, rates and bonds, equities, and the local and global economy.

The website also features investment tips, inspiration, and advice on fine living, a guide to retirement, and webinars featuring Metrobank’s finance and investment experts talking about subjects related to wealth management.

The Wealth Insights website is accessible to anyone but some articles and pages, such as Portfolio Picks, are exclusive to registered high-net-worth clients.

“Because money management is not a one-size-fits-all for all consumers, we have different initiatives to properly guide Filipinos in their financial journey,” Mr. Tansingco said. “We want to enable them to live life to the fullest through financial education, so our customers can make decisions on how they can use their money in smart and meaningful ways.”

With Wealth Insights, Metrobank makes it easy for wealth clients to make their investment decisions through a single platform so they do not have to look elsewhere for information and insights that they need. Clients can now focus on things that matter to them.

Wealth Insights is backed by Metrobank’s proven wealth management expertise. The bank holds 60 years of wisdom and experience in the finance world. Since 1962, Metrobank has always put its clients at the center of the business, employing a strategy that revolves around meeting and foreseeing their needs.

Learn more about wealth management and make the right investment decisions with Metrobank’s Wealth Insights. Visit https://wealthinsights.metrobank.com.ph/.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

BSP may hike rates by 50 bps — poll

BW FILE PHOTO

By Keisha B. Ta-asan, Reporter

THE PHILIPPINE central bank is widely expected to raise benchmark interest rates by 50 basis points (bps) at its meeting on Thursday, as the US Federal Reserve is also likely to tighten policy this week.    

A BusinessWorld poll last week showed 14 out of 15 analysts expect the Monetary Board (MB) to continue hiking borrowing costs at its Dec. 15 meeting.

For 13 analysts, the central bank may deliver a 50-bp rate increase, while one economist sees a 25-bp hike.

Analysts’ expectations on policy rates (Dec. 2022)

On the other hand, one analyst expects the Bangko Sentral ng Pilipinas (BSP) to keep rates unchanged.

“The outcome of the US FOMC (Federal Open Market Committee) meeting overnight, the trajectory of the dollar-peso exchange rate and November’s inflation print will be key considerations for the BSP’s decision,” ANZ Research economist Debalika Sarkar said.

“We believe that the central bank will maintain a comfortable interest rate differential with the US to support the peso and limit the pass-through effect on domestic inflation, which is already running far above the tolerance limit,” she added.

The BSP has hiked policy rates by 300 bps since May to keep rising prices in check, with the key rate now at 5%.

Meanwhile, the US Federal Reserve has raised borrowing costs by 375 bps since March to a range between 3.75% and 4%. It is widely expected to deliver a smaller rate hike of just 50 bps on Dec. 13-14 following four straight 75-bp increases.

“Definitely, the size of the Fed rate hike that will be announced just the day before the BSP Monetary Board meets [will be a key consideration for the BSP]; our base case is that the Fed will pivot, too, to a smaller rate increase,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said.

“The current inflation print suggests that the BSP will opt for a 50-bp hike in its next policy meeting on Dec. 15, following an expected similar-sized hike by the US Federal Reserve, and in a bid to bring inflation back to a target-consistent path for 2023,” Security Bank Corp. Chief Economist Robert Dan J. Roces said.

Mr. Roces said it is important to see if inflation is being driven by “temporary” factors such as holiday-induced demand or weather-related supply disruptions.

“The rise in the prices of goods and services during the period leading up to and including Christmas can have implications for inflation as it causes retailers to raise prices to capitalize on the increased demand for their products,” he said.

Given already high prices of food due to agricultural losses from recent typhoons, inflationary risks are on the upside, he added. 

Headline inflation picked up to 8% in November from 7.7% in October and 3.7% in November 2021. For the 11-month period, inflation averaged 5.6%, still lower than the BSP’s 5.8% full-year forecast but well above its 2-4% target.

“The inflation rate is bound to stay at an accelerated level until the end of the year because of the heightened demand brought about by the onset of the holiday season,” Colegio de San Juan de Letran Graduate School Associate Professor Emmanuel J. Lopez said.

“One thing working favorably for the local economy is the continued appreciation of the local currency against the US dollar. Although this is not brought about by a stronger local economy but by the weak US economy and China’s lockdown, the appreciation of the peso has brought relief to the once-depreciating/ailing local currency,” Mr. Lopez added.

After hitting a new record low of P59 per dollar this year, the peso has rebounded, returning to the P55 level this month.

On Friday, the local unit closed at P55.37 against the dollar, up by eight centavos from its P55.45 close on Wednesday.

BSP MAY STILL HIKE RATES IN 2023
The central bank is also likely to extend its tightening cycle until next year as inflation is still expected to overshoot its 2-4% target, analysts said.

China Banking Corp. Chief Economist Domini S. Velasquez said core inflation will likely peak in the first quarter of 2023.

“This means that aside from the December hike, the BSP will continue its monetary tightening cycle until early next year. Our forecast for 2023 average inflation of 4.6% is higher than the BSP’s,” she said. 

Core inflation, which discounts volatile prices of food and fuel, climbed 6.5% in November from 5.9% in October. In the eleven months to November, core inflation averaged 3.7%.

For next year, the BSP sees inflation averaging 4.3% before easing to 3.1% in 2024. 

Ms. Velasquez added that the benchmark policy rate of the BSP may reach 6% next year, and policy easing, if any, will only happen in the fourth quarter as inflation is seen to return within target by then. 

“Both the BSP and the National Government will need to keep a close eye on the trajectory of core inflation, which could bleed into the first half of 2023 and prove more difficult to tame if left unchecked,” Security Bank’s Mr. Roces said.

“Should prices increase beyond normal market fluctuations and bleed into the core as well, the BSP may need to take further, stronger action to prevent a larger inflationary problem from developing, while the government will need to ramp up subsidies and price caps to complement the monetary side,” he added.

For UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, the BSP will need to ensure inflation expectations remain anchored.

“While we hope for faster disinflation soon and thus, an early termination of the BSP’s rate hiking cycle, the additional challenge of an upbeat domestic demand backdrop will also require a higher terminal policy rate to reprioritize savings among households and thus, mitigate the demand-side contribution to inflation pressures,” he said. 

The BSP is also likely to continue mirroring the Fed’s actions until next year, said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa.

“If the Fed carries out its pivot, the BSP will be able to do its own pivot with a pause in the second quarter of 2023 and rate cuts in the second half next year,” he said. 

However, for Pantheon Macroeconomics’ Mr. Chanco, the 50-bp rate hike in December may be the BSP’s last increase in this tightening cycle.

“Not much more are needed to guarantee that inflation will fall back to within the target range by around third quarter next year, at the latest, thanks to the moderation in global food and oil inflation,” he said.

Infrastructure spending rises 39% in September

BW FILE PHOTO

By Luisa Maria Jacinta C. Jocson, Reporter

INFRASTRUCTURE SPENDING rose by 39.3% in September as the government completed more projects, the Department of Budget and Management (DBM) said.

In its National Government (NG) disbursement report, the DBM said expenditures for infrastructure and other capital outlays increased to P99.1 billion in September from P71.2 billion a year ago.

The September figure was also 34.6% higher than the P73.7 billion spent in August.

“The growth was largely due to the sizable disbursements of the Department of Public Works and Highways for completed and partially completed road infrastructure projects,” the DBM said in a press release.

Releases for the Active Transport Bike Share System and Safe Pathways Program by the Department of Transportation (DoTr) also contributed to higher capital expenditures during the month, it added.

In the nine months to September, infrastructure spending was up 13.4% to P727.7 billion from P641.5 billion a year earlier but 4.11% lower than the P758.9-billion program for the period.

The DBM said that spending in January to September was due to the implementation of road infrastructure projects nationwide and capital outlay projects under the Revised Armed Forces of the Philippines Modernization Program of the Department of National Defense.

It also cited direct payments made to suppliers by development partners for the implementation of foreign-assisted projects of the DoTr, such as the Metro Manila Subway Project Phase 1, Malolos-Clark Railway Project, and Maritime Safety Capability Project.

However, it attributed the lower spending against the program due to the unintended delays brought about by the election ban on public works during the earlier part of the year.

The modification of projects, unsettled right-of-way problems, intermittent weather conditions, delays in the submission of progress billings, and pending deliveries from suppliers and contractors also resulted in lower-than-programmed disbursements.

Infrastructure spending in the third quarter was higher by 16.3% to P249.9 billion from P214.9 billion in the similar period a year ago. It was also 8.84% above the P229.6-billion program.

“Infrastructure and other capital outlays have since picked up in the third quarter, exceeding the program for the period as a result of catch-up spending,” the DBM said.

“Furthermore, measures were already being undertaken to fast-track the implementation of said projects. For instance, the DoH (Department of Health) has been closely coordinating with their concerned operating units and providing them with assistance in resolving documentation requirements or issues. The review of current processes and existing systems is also ongoing with the end goal of improving fund utilization,” it added.

China Banking Corp. Chief Economist Domini S. Velasquez said the catch-up spending seen in September is much needed as the country still lags behind most of its neighbors in terms of infrastructure expenditures.

“Full utilization of the budget of line agencies is needed to ensure that the economy will be able to take full advantage of the budget. Historically, we have observed expenditures catching up in the fourth quarter as government agencies ramp up spending to close the year. Hopefully, the remaining programmed budget will be used on time,” Ms. Velasquez said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said infrastructure spending will likely remain a “bright spot” for the economy next year.

“Infrastructure spending remains a priority of the administration as a major economic driver, accounting for at least 5% of gross domestic product, more than twice the 2% over the past 20-30 years,” he said in a Viber message.

Mr. Ricafort added that increased spending on infrastructure is needed to help attract more foreign investments into the country and also support initiatives to further develop agriculture and manufacturing, including farm-to-market roads and storage facilities.

Contributing to sovereign wealth fund could undermine BSP’s independence, analysts say

BW FILE PHOTO

REQUIRING the Bangko Sentral ng Pilipinas (BSP) to contribute its annual dividends to the Maharlika Wealth Fund (MWF) could undermine its integrity, analysts said.

Calixto V. Chikiamco, president of the Foundation for Economic Freedom (FEF), said mandating the central bank to contribute its dividends to the planned sovereign wealth fund is “a bad idea.”

“Firstly, it amends the Charter of the Bangko Sentral, which mandates that the dividends of the BSP will go to its recapitalization. Such an amendment in the MWF is legally doubtful without an express amendment of the BSP Charter,” Mr. Chikiamco said in a Viber message.

“More importantly, by mandating that the profits of the BSP go to the MWF, it will undermine the mission and integrity of the Bangko Sentral because the BSP will be perceived as a profit-making institution and its income objectives will be perceived as driving monetary and exchange rate policy,” he said. “It will destroy BSP as a credible institution focused on fostering price and financial stability.”

On Friday, Finance Secretary Benjamin E. Diokno said the proposed Maharlika Wealth Fund is being revised to require the BSP to contribute 100% of its annual dividends into the sovereign wealth fund for its first two years.

After the fund’s first two years, the central bank will only need to remit 50% of its declared dividends to it, with the remaining 50% to be deposited to a special account meant to ramp up the P200-billion capitalization of the BSP.

The Maharlika Wealth Fund could again receive 100% of the BSP’s dividends once the central bank is fully capitalized.

Several lawmakers headed by House Speaker Ferdinand Martin G. Romualdez and Deputy Majority Leader Ferdinand Alexander A. Marcos last month filed a bill seeking to create a sovereign wealth fund in the country with an initial capitalization of P250 billion.

Last year, the BSP’s net income stood at P34.81 billion, while its dividends amounted to P17.41 billion.

In 2019, the BSP booked a net income of P46.1 billion, declaring dividends of P23.05 billion. Its net income stood at P31.79 billion in 2020 with its declared dividend at around P15.89 billion. 

“The whole concept of the MWF is a bad idea at this time and is irreparable. No amount of safeguards can salvage the concept, especially if the funding comes from the BSP,” Mr. Chikiamco said.

“Better that they reconceptualize the idea from the MWF to a development finance institution, revive the National Development Corp. (NDC) for the projects it wants to finance, and look at the privatization of government assets to recapitalize NDC,” he added.

Several business associations, economic policy groups, civil society organizations and labor groups have likewise opposed the proposed measure, citing concerns over lack of transparency, possible corruption and misuse of pension funds.

“The need to create a sovereign wealth fund has been felt across several countries in Southeast Asia with India, Malaysia, and Indonesia taking the lead on this front. However, such funds are usually funded by commodity revenue or excess foreign reserves, none of which the Philippines possesses,” Swarup Gupta, industry manager of the Economist Intelligence Unit, said in an e-mail. 

“In contrast, the Philippines has the highest fiscal deficit among economies in Southeast Asia, which makes the creation of a sovereign wealth fund a risky move at a time of great global economic uncertainty,” he added.

The National Government’s budget deficit ballooned to P99.1 billion in October, 54.08% higher than the P64.3-billion deficit in the same month a year ago.

Meanwhile, for the first 10 months, the fiscal deficit narrowed by 7.61% to P1.11 trillion from the P1.2 trillion during the same period a year ago.

Mr. Gupta said getting MWF funding from the BSP is “a move that could easily undermine the independence of the central bank and the country’s foreign exchange reserves, which could have serious implications if the global economic outlook worsens.”

“The example of Malaysia’s ill-fated 1MDB (1Malaysia Development Berhad) fund has often been quoted by critics of the fund, and with good reason,” he added. “While the Philippines’ fund will be subject to multiple audits, its initial charter allows investments in all possible asset classes without restriction.”

“Also, there are concerns about governance standards and clear objectives need to be laid out in order for it to be successful. The presence of an independent ombudsman, who periodically checks on the working of the fund, could go a long way towards preventing any malfeasance,” Mr. Gupta said.

The wealth fund must also align with international best practices laid down by the International Monetary Fund, he added. 

Domini S. Velasquez, chief economist at China Banking Corp., said a concern is if the budget would go through proper review channels or through a legislative process.

“In automatically diverting dividends to the Maharlika Wealth Fund, we lose this check and balance on government’s spending. As of now, the current proposal of the Maharlika Wealth Fund does not seem to have sufficient safeguards to guarantee promises of the proponents,” Ms. Velasquez said.

“I agree with most critics that timeliness of creating a wealth fund is vital. In a time where we need to bring down debt and close the fiscal deficit, dividends from revenue-generating government institutions are important to support fiscal consolidation of the government,” she added. — Keisha B. Ta-asan

Gov’t debt service bill declines in October

BW FILE PHOTO

THE NATIONAL Government (NG) saw its debt service bill drop in October as lower amortization payments offset the rise in interest payments.

Preliminary data from the Bureau of the Treasury (BTr) showed the government spent P39.817 billion for debt servicing in October, down by 55.3% from P89.066 billion in the same month a year ago.

Month on month, debt payments fell by 80.76% from P206.996 billion in September.

In October, around 83.34% of debt repayments went to interest payments, while the rest went to amortization.

Interest payments inched up 5.23% year on year to P33.185 billion in October from P31.536 billion.

Broken down, interest paid on domestic debt slipped by 6.59% to P22.407 billion from P23.989 billion, while that for foreign debt surged by 42.81% to P10.778 billion from P7.547 billion.

Domestic debt consisted of P17.636 billion in Treasury bonds, P3.575 billion in retail Treasury bonds, and P706 million in Treasury bills.

Meanwhile, overall amortization payments slumped by 88.47% to P6.632 billion in October from P57.53 billion in the same month last year.

The BTr settled P894 million with domestic lenders, while principal payments to foreign creditors amounted to P5.738 billion.

From January to October, debt repayments decreased by 11.63% to P929.663 billion from P1.052 trillion, with amortization taking up 53.41% of the total.

Principal payments in the 10-month period stood at P496.502 billion, dropping by 27.19% from P681.957 billion a year earlier. This consisted of P408.833 billion in domestic debt and P87.669 billion in foreign obligations.

Interest payments went up by 16.79% to P433.161 billion from P370.884 billion in the similar period. These included P328.617 billion worth of payments to domestic creditors and P105.544 billion to foreign creditors.

The government borrows from local and external sources to help fund a budget deficit capped at 7.6% of gross domestic product (GDP) this year, as it spends more than the revenue it generates to support programs that would stimulate economic growth.

The government plans to spend P1.298 trillion on debt payments this year, with P785.21 billion allocated for principal and the remaining P512.59 billion for interest.

The National Government’s gross borrowings declined by 32.7% to P1.85 trillion as of end-October.

In the same period, its outstanding debt hit a record high of P13.64 trillion.

The country’s debt-to-GDP ratio stood at 63.7% at end-September, still above the 60% threshold considered manageable by most multilateral lenders.

The government is aiming to bring down the ratio to 61.8% by the end of the year and to 52.5% by 2028. — Luisa Maria Jacinta C. Jocson

1...4,4984,4994,500...13,217Page 4,499 of 13,217
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube