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Peso weakens on fears of delayed trade war resolution

THE peso declined further against the dollar on Friday, following reports of delays in a meeting between US President Donald J. Trump and Chinese President Xi Jinping.
The peso ended the week at P52.65 against the dollar, five centavos weaker after closing at P52.60 on Thursday.
The peso opened the session weaker at P52.64, slipping to as low as P52.75 intraday. The high was P52.62.
Trading volume thinned to $976.4 million from the $1.202 billion in the previous session.
A foreign exchange trader said the peso weakened as investors sought safer currencies such as the dollar amid fears of a possible delay to a US-China trade deal.
The proposed meeting of Mr. Trump and Mr. Xi has been pushed to April at the earliest, Bloomberg reported.
US and China are looking to push the meeting of their leaders to a later date of at least April for a possible trade deal, Bloomberg reported.
On Wednesday, Mr. Trump said he is not rushing to strike a trade deal with China, adding that it should include protection of intellectual property.
Prior to the news, the leaders were supposed to meet in Mar-a-Lago, Florida later this month.
President Donald J. Trump postponed its plan to impose $200 million in tariffs on Chinese goods “indefinitely,” which was originally scheduled on March 1, citing “substantial progress.”
Michael L. Ricafort, Rizal Commercial Banking Corp. economist, said the delay in the meeting between the US and Chinese leaders “partly caused slightly higher dollar against major currencies.”
“Prospects of slower global economic growth and trade that could have an adverse impact on some Asian and emerging markets,” Mr. Ricafort said in a text message.

Robotic surgery breaks ground for prostate cancer treatment

In the Philippines, prostate cancer lags slightly behind lung cancer as the leading cause of death by cancer among men. Prostate cancer seems to afflict males aged 50 and above who are usually averse to seeking medical help and only come forward when the disease progresses. Urologist Dr. Poh Beow Kiong, who specializes in prostate cancer, practising at Gleneagles Hospital and Mount Elizabeth Novena Hospital in Singapore, said that the success rates of prostate cancer treatments are higher when detected early. Dr. Poh was here recently to talk to business leaders about different urological diseases like prostate cancer. Dr. Poh noted that new treatments are now available that offer less post-operative complications and faster recovery than the traditional open surgeries. “Our biggest challenge (for those in cancer treatment) is to find out if a tumor is benign or cancerous without surgery,” said Dr. Poh. “Our understanding of prostate cancer has changed over the past decade.”
dr. pohDr. Poh explained the Da Vinci Robot assisted prostatectomy which is effective in completely removing the entire prostate with the prostate cancer cells while preserving continent and erectile functions. The robot is controlled remotely by a surgeon skilled in the use of this machine. It is done with the robotic arms holding on to the laparoscopic instruments. These instruments are inserted into the body via 5-6 keyhole-size ports (openings) ranging from 0.5 cm to 1.2 cm in diameter. The robotic arms allow for greater precision with its 360-degree range of movements and provides the surgeon with a 3D view of the operating field inside the patient’s body. The robotic prostatectomy reduces the patient’s hospital stay and let him return to his normal erectile and continent functions quickly.

Dr. Poh is one of the few urologists in Singapore trained in advanced minimally invasive surgery and Endorology. He helped refine the technique of laparoscopic retropubic radical prostatectomy and is one of the few urologists in Singapore trained to perform the technically challenging Holmium Laser Enucleation of Prostate (HoLEP).
The advantages of robotic prostate surgery over open surgery are as follows:

  • Less blood loss and reduced need for blood transfusion during surgery
  • Lower risk of wound infection
  • Shorter hospital stay (from 7-10 days to 3-4 days)
  • Fewer days with catheter
  • Faster return of erectile (sexual) function
  • Lower risk of permanent urinary incontinence

The use of these robotic surgical systems requires surgeons to undergo special training. Without adequate training, the risks might outweigh the benefits of robotic-assisted surgery. In treating each patient, Dr. Poh stressed that a holistic approach is crucial. The entire team including the nurses, the assistant surgeon and the anesthetist need to be well trained in the robotic approach as it is a completely different concept from open surgery.
For more information about the prostate cancer and other condition, visit https://www.gleneagles.com.sg/healthplus.
Health Plus is an online health and wellness resource developed by Gleneagles Hospital, Singapore.
To make an enquiry or appointment, contact our Central Patient Assistance Centre at: 24-Hr Helpline: +65 6735 5000; email: cpac@parkwaypantai.com; online appointment: http://www.gleneagles.com.sg.

Manzi Xue, special consultant of Huaren Capital: 'The Philippines has demographic dividend and mobile economy potential'

Manzi Xue, one of the best angel investors in China, was once the founder of a well-known listed enterprise and also an investor of more well-known enterprises. He was a well-known Chinese investor on Wall Street more than 10 years ago. His decades of successful business operation and investment experience allowed him to be recognized as a senior in the industry.
As a famous official and scholar, Mr. Xue became a businessman and investor who brought vitality to China’s angel investment and influenced entrepreneurs of an era. In 2018, he chose to join forces with Jeff Wang, founder and CEO of Huaren Capital, to enter the Southeast Asian market. After thorough and detailed market research, he targeted the Philippines.
“Although the current entrepreneurial environment in the Philippines is not ideal, it still has great potential. In the first eight months of 2018, Southeast Asian start-ups received a record $3.16 billion in venture capital funding. The Philippines, however, is a different story. According to public data, only a small amount of money has gone to startups in the Philippines this year. Start-ups in the Philippines have received less than $50M in venture capital funding this year. For the whole of 2018, there were only seven financing cases in the Philippines, down from 10 last year and 21 in 2016,” said Mr. Xue.
The Philippines was one of the first countries in the world to launch a mobile payment service, but has made little progress in making mobile payments mainstream. For now, the Philippines remains highly dependent on cash transactions. To get Filipinos use e-payment services, they need to be given a compelling reason to feel comfortable keeping their money in e-wallets.
“Although cash is still widely used in the Philippines, cash on delivery is very popular in the Philippines, with 80% of online merchants supporting it,” Mr Xue said. That’s mainly because nearly 98% of Filipinos still don’t have credit cards. But in the near future, digital payment will be the only way for the development of e-commerce. This determines that the DPAY project of Huaren Capital is imperative, and will eventually overturn the shackle of traditional industries, so as to realize barrierless consumption, deposit and withdrawal, and financial management.
Mr. Wang said, “The Philippines aims to maintain the annual compound growth rate of 6-7% GDP growth, thanks to the young people of social main body, the demographic dividend, and high frequency low consumption habits, credit card and bank account penetration, and comprehensive factors such as smartphone growth prospects, mobile payment has a bright future in the Philippines, just like in China and India. It is suitable for first-tier cities and CBD to drive users in remote areas.”
Now with mobile payment, people’s income and expenditure become traceable, verifiable and credible, and this credit can be expanded to the whole capital market so that everyone can join in the game. Therefore, mobile payment is the data-based cornerstone of many industries’ credit. It is precisely because of the dividend brought by mobile payment that many industries can also be capitalized, which is conducive to listing. This is the mission of DPAY in the future.
Mr. Xue said, “Success is accidental, failure is inevitable. If you don’t try, don’t say you succeeded, even failed. Success or failure, if it can change the world a little, is also great.”
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Celebrating the best of Davao City

In celebrating the 82nd year of its cityhood, Davao City marks another year of progress and development. From a simple village composed of various organized barangays a few hundred years ago, the city of Davao has become one of the country’s most important cities, a hub of trade and industry, commerce, cultural diversity, and education.

The city came to be known as Nueva Vergara when Don Jose Cruz de Uyanguren, a Spanish native of Vergara, Guipuzcoa, together with other 70 men and women, first colonized the region on June 29, 1848. When the Philippine Revolution came about, two Davaoeño locals named Pedro Layog and Jose M. Lerma represented the town and the region at the Malolos Congress of 1898, affixing Davao’s place in national history as a part of the nascent First Philippine Republic.

Rapid economic development followed the American occupation of the region, as foreign businessmen began tapping into the region’s fertile lands to fuel agricultural development. Coconut and banana product plantations changed Davao City from a small and sparsely-inhabited town into a thriving economic center. The demand for Davao’s agricultural products was so great that it led to the construction of the Port of Davao soon after.

The change was so apparent that on March 16, 1936, then congressman Romualdo Quimpo from Davao filed Bill 609 (passed as Commonwealth Act 51), creating the City of Davao from the town of Davao and the municipal district of Guianga. Davao was inaugurated as a charter city on Oct. 16, 1936 by then President Manuel L. Quezon, and the charter came into effect on March 1, 1937, making Davao City one of the first towns in Mindanao to be converted into a city.

Photo from Wikimedia Commons

Opening the month-long celebration of this founding, Davao City Mayor Sara Duterte-Carpio formally launched the ceremony, “Pasiugdang nga Pagsaulog”, at the Rizal Park last March 2. Davaoeños saw the introduction of the official finalists of the annual Mutya ng Davao event, as well as the launch of two new pageants: Ginoong Davao and Reyna Davaoeña. The top talents of the region, which include groups like Voices of the South Children’s Choir; DSquared Cru; EMNT; Groove Unlimited; and Fusion, also performed singing and dancing numbers to kick off the celebrations.

Various activities are lined up for the month, as the city expects an influx of local and foreign tourists to join the festivities. The anniversary of the city’s charter inauguration tomorrow, March 16, will be highlighted by the annual civil military parade Parada Davaoeño. Meanwhile, schools all over the city are launching the ‘Davaoeño Ako’ storytelling initiative along with the food and entertainment-filled event at Kalingawan sa Sta. Ana at the Sta. Ana Pier.

The best of Davaoeña beauty will be recognized at the Mutya ng Davao coronation at the Rizal Memorial Colleges (RMC) Petro Gazz Arena while the Pasundayag sa Rizal Park was open to the public last March 3, 9 and 10.

Ginoong Davao, the pageant which aims to find the next Mr. Davaoeño, was held last March 3, at Almendras Gym Davao City Recreation Center — marking the first time the event was included in the annual celebration. Reyna Davaoeña, which is searching for Davao City’s first Trans Davaoeña, was also held last March 8 at People’s Park to be followed by the Hudyaka the following day. Davaoeña women were celebrated at the Women Summit last March 6 at Ritz Hotel, and International Women’s Day Parade last March 8 from Freedom Park to People’s Park.

Showcasing the competitive side of Davao City, some of the country’s best triathletes competed for honors in the 2019 Araw ng Davao Supertrikids and Novice Triathlon last March 2 and 3 at Villa Josefina Resort Village in Dumoy, Toril.

Twenty-nine events are also lined up for the month-long Araw ng Davao Sports Festival 2019. The second Alveo Ironman 70.3 Davao is also set on March 24 with Mexican Mauricio Mendez and Czech Radka Kahlefeldt defending their titles as champions against representatives from 38 participating countries including the Philippines.

The 49th Conferment of the prestigious Datu Bago Awards was held on March 8 at the Arcadia Gym, honoring the outstanding, exemplary and selfless individuals who have contributed to the growth and development of Davao City and the preservation of its culture heritage.

Other events include the Araw ng Davao Light Show, a 3D light show held at Davao City Hall; Pahalipay sa mga Distrito in 12 sub-districts; Davao Quiz Competition at the Davao City Library; Pasidungog: and Garbo sa Davao at The Enderun Tent, Azuela Cove. Government employees will have their day on the Araw ng mga Empleyado celebration at Rizal Park.

Davao City will also hold its second International Marathon at People’s Park; Sayaw Pinoy event at SM City Davao; Kanta Dabawenyo; Sister City/Consular Offices Exhibit at SM Lanang Atrium; TDR 80 Ultra Marathon at Magsaysay Park-Eden Nature Park; and Agribiz Expo at Gaisano Mall of Davao atrium. — Bjorn Biel M. Beltran

Discovering Davao City’s gems

Sprawled beautifully on the southern Philippine island of Mindanao, Davao City prides itself for having a wealth of picturesque sceneries, a variety of natural attractions and a host of fun activities that attract both local and foreign tourists.  The city is now considered as one of the country’s top tourist destinations, offering a mix of urban and rural living experience.

Data from Davao City Tourism Operations Office (CTOO) shows a steady increase in the number of tourist arrivals in the city in the last three years, wherein majority of the visitors were domestic tourists and returning overseas Filipinos.

In 2018, the city attracted some 2.39 million tourists, surpassing its record of two million visitors in the previous year. American visitors topped the list of Davao City’s international visitors with 21,324, followed by Japanese, Chinese, Korean and Australians. Other nationals included in the top 10 international arrivals were Indians, Canadians, Singaporeans, British and Emiratis.

The city of Davao comes with a good mixture of both man-made and natural attractions. Tourists can visit and stroll at the city’s museums, try different adventures in parks and resorts, or indulge in the beauty of nature.

Davao Museum of History and Ethnography — Wikimedia Commons

For one who wants to know the rich history of Davao, visiting the Davao Museum is the best way to start. This two-storey building, located in Insular Village Phase 1 in Lanang, showcases the cultural heritage of Davao which rooted from the large variety of tribes that populated the region.

The museum houses photographs of the city’s historic events, large-scale versions of old maps of Mindanao and the country, centuries-old Asian trade jars, antique religious artifacts, burial urns, weaponry, musical instruments, tribal clothing, handicrafts and pottery, among others. It also features life-size dioramas depicting Davao’s diverse culture, including weaving and healing ritual.

Museo Dabawenyo or the “Museum of the People of Davao” is the other museum located in Davao City, specifically and originally situated along Fr. Selga Street going to Pichon Street. The museum is divided into four rooms: the Indigenous People’s Gallery, the Moro People’s Gallery, the Contemporary Gallery, and the Memorabilia Gallery.

The management of Museo Dabawenyo, however, announced that the museum is closed temporarily to give way to the construction of the new City Engineer’s Office (CEO) building. The museum will be relocated inside the People’s Park — one of the most visited tourist attractions in Davao today — with a bigger building. The new structure will have five floors and will be inspired by the iconic durian fruit.

Aside from visiting the said museums and the People’s Park, a four-hectare wide cultural-theme park featuring a mini-forest, man-made falls, a dancing fountain at night, fish ponds, children’s playground and a giant durian dome, tourists can also explore the Davao Crocodile Park.

As the name implies, the park houses hundreds of cultured Philippine crocodiles. The Davao Crocodile Park showcases a ‘state of the art’ crocodile farming system, equipped with modern facilities and equipment. Apart from crocodiles, the park is a home of other animals, including birds, tigers, wild boars, apes, and pythons.

Philippine Eagle Center — ARMAND DOMINGUEZ | philippineeaglefoundation.org

To complete one’s animal sightings experience, tourists can also drive their way to the Philippine Eagle Center (PEC), located at the foothills of Mt. Apo in Malagos, Baguio District, Davao City and situated within the Malagos Watershed. The PEC primarily operates as a conservation breeding facility for the critically endangered Philippine Eagle and other birds of prey. A number of other birds, mammals and reptiles — most of which are endemic to the country and some are considered rare —can be also sighted in the center.

For tourists looking for a secluded place where the gifts of nature abound, Loleng’s Mountain Resort is probably one of the best options. The resort is located at Eden-Bayabas in Toril, and is just a 20-minute ride from the heart of Davao City. It offers superb accommodation, places for recreation, and luscious yet affordable meals, which make it a perfect getaway from the bustling city life.

For those longing for more, they can also visit the Gap Orchard Resort, a sprawling 10-hectare farm orchard, dedicated to durian, rambutan, pomelo and other tropical fruits.

The farm is a popular destination in the city frequented by many tourists to spend leisure time. Tropical trees and fruits, exotic flowers, plants, and colorful flora and fauna are the main things that can be seen in the farm. There are also some landmarks scattered throughout the farm, including the old World War II Japanese carved tunnel, a Santo Niño chapel and Mother of Perpetual Help, as well as mystical statues. — Mark Louis F. Ferrolino

A thriving investment hub

Serving as the center of commerce, trade, tourism, and finance in the Southern
Philippines, the city of Davao positions itself as one of the country’s leading investment hubs.

The city government’s investment primer, published online, presents the city as the best option to invest. “Locating in Davao City means accessing the 25-million market of Southern Mindanao. It also serves as a prime entry to over 500 million people in the ASEAN region and East Asian economies,” the primer wrote.

Several factors make Davao a viable place to invest. As the primer discussed, Davao City provides a favorable business climate “with vast land area for growth and development, abundant supply of raw materials, affordable power and utility rates and highly-skilled and job-ready workforce”.

The city also offers convenient accessibility, where people and goods move efficiently through arterial roads connecting major inter-provincial routes, an international airport with daily domestic flights plus regular flights to Singapore, and ports serving both inbound and outbound passenger traffic and domestic and foreign cargo.

Davao City also has a flourishing economy that “continues to indicate strong performances in trading and investments”. Recent figures shared in Davao City’s investment website indicated that the Davao Region, or Region 11, earned a GRDP (gross regional domestic product) Growth Rate of 9.4%. Value of investments grew by 6.3%, while the number of establishments increased by 6.1%.

Another noteworthy factor is the city’s government initiatives “to ensure easy business start-up and local legislations to support its bustling business environment.” The first local investment promotion unit in the country came from this city in the South, the Davao City Investment Promotion Center, which “provides convenient business start-up services and assistance”.

An area where peace and order are assured makes for a trustworthy investment center. This has been true in Davao with its low crime rate, which made the city one of the “Most Peaceful and Safest Cities in Southeast Asia.” The city also boasts of its Public Safety and Security Command Center, which houses the city’s traffic management, disaster risk reduction management, and safety and security systems.

Thriving investments

The past year was a witness to the competence of Davao City as an investment hub. Aside from the aforementioned economic figures, the Philippine News Agency reported that Region 11 procured investment projects worth P14.8 billion as of January to November of 2018, the majority of which are allocated to the city (14.1 billion).

As of November last year, the Department of Trade and Industry in that region recorded 10,334 new business registrants. It also tallied a thriving infrastructure, with major projects last year consisting of water supply, sewage and water management worth P13,324.67 billion; real estate activities with P665.30 million; human health and social science with P376.5 million; agriculture, forestry and fishing with P325.97 million; administrative and support services with P121.25 million; and accommodation and food service activities with P14.8 million.

Finance Secretary Carlos Dominguez III recognized the large part infrastructure investments play in Davao City. “The forthcoming infrastructure investments will catalyze the region’s growth potential. It will make the city a center for manufacturing and agro-industry,” Mr. Dominguez said in a report of the Philippine Information Agency.

Among the infrastructure projects currently implemented in the city include the Davao International Airport Development Project (to be completed in 2022); the Davao City Coastal Road Project (to be completed in 2021); the Mindanao Logistics Infrastructure Network (to be completed next year); and the Davao Public Transport Modernization Project. Other projects, in line with the administration’s “Build, Build, Build” program, include a major railway project and several road projects that are expected to be implemented in the near future.

As investments keep on rolling in Davao City, the city government has been working at reviewing its Investment Incentive Code and modifying it to offer new incentives. According to a BusinessWorld report last February, the city will release the new Code within the 1st half of this year as the draft undergoes a review for approval by the board of the Investment Promotions Center.

Aside from a streamlining of the 10 priority areas of investments, the new proposal enhances incentives for some of those areas, while others are either split or eliminated.

Davao City currently has 10 preferred investment areas, namely agribusiness; tourism and recreational facilities; property development; light manufacturing and assembly; information and communications technology; generation of new sources of energy; health and wellness, educational, and sports facilities; environmental protection or green projects; transportation and infrastructure; and public-private partnerships.

The current incentives offered to new, expanding, or diversifying enterprises under any of the preferred investment areas are a three-year business tax exemption and two-year real property tax exemption. A five-year tax holiday is also offered to investments in located in preferred districts of Calinan, Baguio, Marilog, and Paquibato. — Adrian Paul B. Conoza

Duterte bares third narco-list

By Arjay L. Balinbin, Reporter
President Rodrigo R. Duterte on Thursday finally made public the third batch of his narco-list, saying the “drug personalities” in the list were validated and charges have been filed against them before the Office of the Ombudsman.
“My decision to unmask these drug personalities was anchored on my trust in the government agencies that have vetted and validated the narco-list,” he said in his remarks during the meeting of the National Peace and Order Council in Davao City on Thursday evening, March 14.
Mr. Duterte released the list ahead of the 2019 midterm elections. “Remember that ‘public office is a public trust’; an official’s right to privacy is not absolute and there is a compelling reason to prioritize the interest of the state and the people,” he also said.
For its part, the Department of the Interior and Local Government (DILG) said in a statement that it filed “administrative charges” on Thursday against “46 incumbent government officials” included in the list “for their alleged involvement in illegal drug trade and activities.”
Mr. Duterte said the Anti-Money Laundering Council (AMLC) and the Presidential Anti-Corruption Commission (PACC) were also conducting their respective investigations. He said the results of such investigations “will aid us in filing airtight cases against them.”
The President read out several names in the list, including dismissed Iloilo City Mayor Jed Patrick E. Mabilog and Daanbantayan Mayor Vicente A. Loot whom he has repeatedly criticized and accused as “narco-politicians” on various occasions.
“I’m not really interested in releasing it before or after the elections because I do not have the slightest intention to hurt anybody or to be a cause of the failure of an election of a certain man who wants to serve the public,” he said.
The DILG said, “The initial list released to the public by the President includes 35 mayors, seven (7) vice-mayors, one (1) provincial board member, and three (3) members of the House of Representatives.”
MEDIA ‘ETHICS’
Last week, at least seven media organizations expressed “grave concern about the likely breach of professional ethics and adverse legal implications of the publication and broadcast of the Duterte Administration’s list of public officials allegedly involved in the illegal-drugs trade.”
A March-7 statement posted on the Philippine Center for Investigative Journalism (PCIJ) website, which was signed by six other media groups such as National Union of Journalists of the Philippines (NUJP), Philippine Press Institute (PPI), Center for Media Freedom and Responsibility (CMFR), Mindanews, Center for Community Journalism and Development (CCJD), and Freedom for Media, Freedom for All Network, said: “Instead of rushing to print or air, we now urge all our colleagues to exercise utter prudence and fastidious judgment in evaluating this ‘story.'”
“Verify, verify, verify. And do so independently. That is the first thing that the news media can and should do, before running a list that tags and links people to hateful crimes, on the mere say-so of the President and his political lieutenants,” the statement also said.

Duterte signs law on simulated birth records

By Arjay L. Balinbin, Reporter
President Rodrigo R. Duterte has signed a law that grants amnesty to those who simulated birth records and allows rectification of such records through a simplified adoption process.
Malacañang released on Thursday a copy of Republic Act No. 11222, or the “Simulated Birth Rectification Act,” which Mr. Duterte signed on Feb. 21.
Simulation of birth records, according to this law, refers to the “tampering of the civil registry to make it appear in the record of birth that a child was born to a person who is not such child’s biological mother, causing the loss of the true identity and status of such child.”
The new law grants amnesty and allows rectification of the simulated birth of a child “where the simulation was made for the best interest of the child, and that such child has been consistently considered and treated by the person or persons who simulated such birth as her, his, or their own daughter or son.”
Also, one of the major objectives of this law is “to exempt from criminal, civil, and administrative liability those who simulated the birth record of a child prior to the effectivity of this Act: Provided, That a petition for adoption with an application for the rectification of the simulated birth record is filed within ten years from the effectivity of this Act.”
Hence, this law provides for and allows a “simpler and less costly administrative adoption proceeding where the child has been living with the person or persons who simulated her or his birth record for at least three years before the effectivity of this Act.”
Senator Risa N. Hontiveros-Baraquel, the principal sponsor of the bill, said in her sponsorship speech: “To remedy the problem of a lengthy and financially restrictive adoption proceedings, this bill likewise proposes a simpler and less costly administrative adoption process without compromising the safety and integrity of the child.”
The Senate Bill 2081 was introduced by Senator Mary Grace Natividad S. Poe-Llamanzares.
In a press release, Ms. Poe was quoted as saying: “It is also in the best interest of the parents and the children to have the records rectified for possible future uses such as medical or DNA purposes or for other legal matters.”

Remittance impact on peso flagged

SLOWING growth of remittances from Filipinos abroad is not likely to cause a significant dent in overall economic expansion, although it will make the peso “more vulnerable to sudden shifts in global risk appetite” through a widening current account deficit, Capital Economics said in a March 14 note.
“Remittances, which are money sent by overseas workers to their families back home, have been slowing over the past 15 years,” the economic research outfit said in its note, titled: “Philippines: is the slowdown in remittances a concern?,” noting that the dollar value of these inflows last year — at $28.943 billion — increased by 3.1% which was “the weakest pace since 2001.”
Capital Economics attributed slowing growth of these inflows to an improving Philippine economy “which has made it easier for people to find employment at home and reduced the need for them to go overseas in search of work” and an economic downturn in the Middle East, which is the source of a third of remittances to the Philippines.
“These factors are likely to continue to weigh on remittances,” Capital Economics said, adding that it expects the dollar value of these inflows to sustain a three-percent pace “over the next few years”, or half the average rate seen in the past decade.
With remittances equivalent to around a tenth of gross domestic product (GDP), weakening of these inflows is “likely to act as a drag on consumption and investment” which, in turn, are key drivers of Philippine economic expansion.
“However with fiscal and monetary policy set to be loosened this year, economic growth should remain fairly strong.”
Philippine GDP has so far grown by 6.45% in 2017 and 2018, the first two years of the administration of President Rodrigo R. Duterte. The government has a 6-7% growth target for this year that was a downgrade from an original 7-8%. In its meeting on Wednesday, the inter-agency Development Budget Coordination Committee also slashed GDP growth target next year to 6.5-7.5% — also from 7-8% previously — and maintained the 7-8% goal for 2021 and 2022, when Mr. Duterte ends his six-year term. Those targets compare to a 6.3% actual annual average in 2010-2016 under former president Benigno S.C. Aquino III.
“We are more worried about the implications of the slowdown for the balance of payments,” Capital Economics said, noting that the component current account “has gone from a surplus to a deficit over the past couple of years and is likely to widen further over the next couple of years”.
Weakening remittances, it noted, has added to a surge of capital goods and raw materials importation for the government’s stepped-up infrastructure drive in growing the current account deficit.
The current account, which measures fund flows from goods and services trading, posted a $6.47-billion deficit in the nine months to September last year. The central bank expects this level to have held until December at $6.4 billion, equivalent to 1.9% of GDP, amid a steadily rising import bill. As of its mid-December estimates, the BSP sees the current account gap growing further to $8.4 billion this year, equivalent to 2.3% of GDP, as it expects even more imports of raw materials and capital goods for the government’s infrastructure drive.
That, in turn, makes the peso “more vulnerable to sudden shifts in global risk appetite” — “a big worry” since the Philippines’ foreign currency-denominated debt is equivalent to around a fourth of GDP.
The peso on Thursday ended at P52.60 to the greenback, just 0.04% weaker than its end-2018 finish of P52.58.
The DBCC saw fit in its Wednesday review to maintain the peso-dollar exchange projection at P52.55 annually until 2022. — KANV

Sales of imported cars increase in February but down year to date

SALES of imported automobiles increased by 12% year-on-year in February, although year-to-date sales still dropped, according to data released on Thursday by the Association of Vehicle Importers and Distributors, Inc. (AVID).
Sales by AVID members totaled 7,876 units last month compared to 7,017 units in February 2017.
Still, auto sales dropped eight percent to 14,499 units as of February from 15,712 units in last year’s first two months.
Sales of passenger cars dipped by one percent to 2,843 units last month from 2,881 units a year ago.
Accounting for 62% of February’s total, light commercial vehicle (LCV) sales increased by 22% to 4,905 units from 4,028 units in February last year.
YEAR-TO-DATE
The first two months of the year saw 15% drop in passenger car sales to 5,140 units from 6,065 a year ago, with Hyundai Asia Resources, Inc. (HARI) topping the list with 3,490 units sold, 12.8% less than the year-ago 4,002 units. In a separate statement on Thursday, HARI reported that total sales increased by 38.6% to 3,715 units in February, driving two-month sales up 16.2% to 6,537 vehicles. Suzuki Philippines, Inc. (SPI) followed with 1,204 units sold, slighly less than the year-ago 1,280.
The same comparative two-month periods saw LCV sales dip three percent to 9,146 units from 9,434 units. Ford Group Philippines, Inc. topped in this segment with 3,596 units sold, 19% down from 4,456 units in last year’s first two months. HARI followed with 2,893 units sold, 87% more than last year’s 1,550; while SPI sold 1,680 units, a fourth less than 2,202 last yar.
The annual growth was driven by increased consumer spending and the launch of new products.
“We are encouraged by the good sales performance of AVID for the month which signals stronger consumer confidence as well as preference for top-notch products. While we are still in the early part of the year, we… expect a robust recovery for the automotive industry,” AVID President Ma. Fe Perez-Agudo said in a statement.
AVID is the auto industry association whose members import their products. — JCL

‘Investor optimism’ makes hot money rebound in Feb.

FOREIGN portfolio investments — referred to also as “hot money” for the ease by which these funds enter and leave the economy at the slightest stimulus — turned around in February from a year ago on the back of sustained “investor optimism” even as they were more than halved from January, according to latest data which the Bangko Sentral ng Pilipinas (BSP) released on Thursday.
February bared $339.57 million in net hot money inflows that reflected a rebound from the year-ago $528.53-million net outflow but were still 55% less than January’s $762.82-million net inflows.
Gross inflows increased by 34.9% to $1.41 billion in February from $1.045 billion a year ago but were still 31.6% less than January’s $2.062 billion.
In comparison, gross outflows fell by 32% to $1.071 billion in February from $1.574 billion a year ago, and by 17.6% from January’s $1.299 billion.
About 77.4% of investments registered with the BSP in February went to securities listed on the Philippine Stock Exchange (PSE) — particularly to banks, holding firms, property companies, food, beverage and tobacco companies, and transportation companies — while 22.4% went to peso-denominated government securities and just 0.2% went to other peso-denominated debt instruments.
All these transactions yielded net inflows in February, BSP said, with those involving PSE-listed securities at $175 million, those of peso-denominated government securities at $162 million and those of other peso-denominated debt instruments at $3 million.
February saw the United Kingdom, the United States, Singapore, Luxembourg, and Norway were the top five hot money sources, accounting for 67%.
The central bank attributed that month’s net inflows “to investor optimism arising from developments on trade negotiations between the US and China and the passage of the tariffication law, which is expected to help boost the rice supply in the country and thereby temper inflation.”
President Donald Trump that month postponed “indefinitely” the US plan to impose $200 million in tariffs on Chinese goods, originally scheduled on March 1, citing “substantial progress” in bilateral talks.
Meanwhile, President Rodrigo R. Duterte signed on Feb. 14 the law liberalizing importation of rice by replacing quantitative restrictions on imports of the grain with tariffs: five percent for rice coming from within the Association of Southeast Asian Nations (ASEAN); 40% for imports within the 350,000 metric-ton minimum access volume (MAV), regardless of country; and 180% for above-MAV imports from non-ASEAN countries.
The latest flows brought the tally to a $1.102.39-billion net inflow in the first two months, a turnaround from a $366.37-million net outflow a year ago.
Sought for comment, Rizal Commercial Banking Corp. economist Michael L. Ricafort credited easing inflation and low interest rates for sustained investor interest.
“Lower inflation and interest rates fundamentally increase the incomes and purchasing power of consumers… and also increases the sales, profits and valuation of listed companies as well,” Mr. Ricafort explained in a mobile phone message.
Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said separately that foreign portfolio investments could post smaller net inflows in March “unless external environment gets better for good,” particularly significant gains in resolving the Sino-US trade spat.
This month’s first two days saw net inflows slashed significantly to just $49.13 million from $1.178 million a year ago, as gross inflows fell to $118.56 million from $1.329 billion and total outflows dropped to $69.43 million from $150.37 million. — Karl Angelo N. Vidal

Why the worst may be over for the global economy

LONDON — The world economy may be the rockiest it’s been since the financial crisis, yet there are reasons to expect the current slowdown will prove short-lived.
Bloomberg Economics, Deutsche Bank AG and Morgan Stanley are among those whose economists reckon the slide will bottom out in this quarter or next before an acceleration later in the year.
“Put the Federal Reserve pause, trade truce and China stimulus together and we’re looking for a trough in the first quarter and very moderate pick up ahead,” said Tom Orlik, chief economist at Bloomberg Economics.
CENTRAL BANKS TO THE RESCUE
Led by the Fed, many central banks have either held back on tightening monetary policy or introduced fresh stimulus, soothing investor fears of a slowdown.
Fed Chairman Jerome Powell says he and colleagues will be patient on raising interest rates again, while European Central Bank President Mario Draghi has ruled out doing so this year and unveiled a new batch of cheap loans for banks.
Elsewhere, authorities in Australia, Canada and the United Kingdom are among those to have adopted a wait-and-see approach.
China, at its National People’s Congress this month, signaled a willingness to ease monetary and fiscal policies to support economic expansion.
Having tightened at the end of last year — in part prompting the Fed to rethink the outlook — financial conditions have loosened up.
After touching a two-and-a-half-year low in December, the Bloomberg US Financial Conditions Index — which measures the overall level of financial stress in money, bond and equity markets — has since rebounded.
Reflecting a more positive investor view, there’s also been a rebound in stocks this year. The S&P 500 has gained almost 20% from its December low, while the Shanghai Composite is up about 22%.
An easing in US dollar strength versus 2018 has also given relief to emerging markets, taking some pressure off policy makers to guard against capital flight.
Credit numbers for China and Japan in February were up strongly from a year ago.
IHS Markit’s indicator of global growth rose in February from a 28-month low and, encouragingly, there was an improvement in the gauge of demand.
Its measure of worldwide services also picked up in February for the first time in three months.
Citigroup’s surprise index for the euro area — which has been one of the weak spots of the global economy — has rebounded to its best reading in almost five months.
In China, a measure of new orders in the manufacturing Purchasing Managers Index improved last month, and Germany got good news about an increase in water levels on the River Rhine.
A drop last year disrupted barge traffic, hitting industry and adding to the temporary factors that pushed the economy near a recession.
TRADING PLACES
Investors have been keen to blame political discord, and especially the global trade war, for prompting businesses and consumers to retrench.
One measure of unpredictability in 20 countries entered the year at a record level.
But US President Donald Trump decided against imposing another round of tariffs on China on March 1 and there are signs that he and Chinese President Xi Jinping may soon be able to strike a trade deal.
A model designed by the Institute of International Finance (IIF) to track US trade in real time showed signs of stabilizing from early this year.
“Global trade fears are overblown, as are concerns that global growth may slow significantly,” according to Robin Brooks, the IIF’s chief economist.
Even with February’s disappointing US employment report, the global labor market continues to tighten, providing reason to hope consumers will keep spending.
JPMorgan Chase & Co. estimates unemployment in developed nations is now at a 40-year low of five percent and set to fall further. That has the bank predicting wages will grow 3.2% in the final quarter of this year, the fastest for any point in the decade-long expansion and almost a percentage point faster than the same period of 2017.
The International Monetary Fund is still predicting global growth of 3.7% this year and 3.5% in 2019, a pretty good clip for this stage of the expansion.
Deutsche Bank strategist Alan Ruskin also argues there is reason to be more upbeat than the headlines suggest. China’s economy, for example, is five times its size in 2000, meaning a six percent growth rate now is equivalent to 30 percent back then.
“When making even longer-term comparisons, absolute levels and changes become even more important than the limited perspective provided by percentage changes,” he wrote in a note to clients this week. — Bloomberg

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