THE PHILIPPINES remained at the bottom half of an index that tracks human development across economies despite an improvement in overall score, according to a United Nations report released on Monday. Read the full story.
ELECTRICITY RATES for consumers in Metro Manila and surrounding areas will increase in December by P0.3044 per kilowatt-hour (/kWh) largely due to an overall increase in the power generation charge as a result of the higher cost at the spot market, Manila Electric Co. (Meralco) said on Monday.
Typical households consuming 200 kWh can expect their power rate to rise to P9.8623/kWh from P9.5579/kWh, or an increase of P61 in their total monthly bill. Those using 300 kWh, 400 kWh and 500 kWh will see an increase this month of P91.32, P121.76 and P152.20, respectively.
“Despite the adjustment, electricity rate this month is still around P0.70 per kWh lower than in April 2019,” Meralco said.
From P5.0317 per kWh last month, the generation charge for December increased to P5.1967 per kWh, or higher by P0.1650 per kWh.
During the period, charges from the Wholesale Electricity Spot Market (WESM) rose by P1.0799/kWh because of tighter supply in the Luzon grid. System operator National Grid Corporation of the Philippines (NGCP) placed the grid on yellow alert twice last month.
Meralco said the average capacity on outage in November increased by 525 megawatts (MW) because of scheduled and forced outages of some power plants. This came at a time when Shell Philippines Exploration BV (SPEx) restricted Malampaya natural gas supply to onshore gas-fired plants from Nov. 10 to 14.
Meralco said the share of WESM to its supply requirement was down to 10%.
At the same time, the cost of power from the independent power producers (IPP) and power supply agreements rose by P0.1106/kWh and P0.0987/kWh, respectively. The increase was because of lower average dispatch and the weakening of the peso against the US dollar.
The 527-MW San Lorenzo plant was on a scheduled outage from Nov. 1 to 9, while the second unit of the 344-MW Masinloc plant was on planned maintenance shutdown for the entire supply month.
The power utility said about 96% of the cost from IPPs are dollar-denominated, while around 61% of PSA costs are dollar-denominated. Their share to Meralco’s supply needs was at 38% and 52%, respectively.
Other costs such as the transmission charge for residential customers also increased by P0.0753/kWh because of higher NGCP ancillary service charges. Taxes and other charges recorded an increase of P0.0641/kWh.
“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 53 months, after these registered reductions in July 2015,” the utility said.
The listed company reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP.
Taxes and other public policy charges like the universal charges and the feed-in tariff allowance are remitted to the government. — VVS
THE BICAMERAL CONFERENCE COMMITTEE reconciling versions of the P4.1-trillion national budget proposed for 2020 deferred anew the approval of the spending plan from Tuesday, leaders of both chambers said separately on Monday.
“It’s moved to Wednesday,” House of Representatives Appropriations Committee Chairman Rep. Isidro T. Ungab of Davao City’s 3rd District said in a mobile phone message when asked to confirm the target date of approval.
“Staff are still finalizing some details.”
Asked for updates, Senator Juan Edgardo M. Angara replied via text that the panel is “still finalizing but almost complete” in its task.
Panel Vice-Chairman Jose Ma. Clemente S. Salceda of Albay’s 2nd District initially said the bicameral panel was set to approve and ratify the bill on Monday. The target was later moved to Tuesday.
Mr. Angara had said on Sunday that the initial postponement was to give senators more time to review amendments proposed by members of the House.
In a briefing with reporters ahead of the announcement, Mr. Salceda said the House and Senate contingents have settled differences and were ready to approve the reconciled spending plan. “Ready na po, nagkasundo na ’yung House at Senate (have come to an agreement); konting detalye na lang (we just have to iron out a few details),” Mr. Salceda told reporters in a briefing, Monday.
He assured that final version of the budget will be submitted to President Rodrigo R. Duterte for signing by the time Congress adjourns for the Dec. 21, 2019-January 19, 2020 break.
“Dec. 21 nasa desk na ng Pangulo (The budget will be on the President’s desk by Dec. 21),” he said.
The bicameral panel started its work on Nov. 29 when both chambers agreed to allow Messrs. Angara and Ungab to hold a one-on-one meeting to discuss their respective proposals.
The House approved House Bill No. 4228, or the General Appropriations Act for Fiscal Year 2020, on Sept. 20; while the Senate passed its version on Nov. 27. The President had certified the bill as an urgent measure, doing away with the three-day interval in the second- and third reading approval.
Senate President Vicente C. Sotto III last week said the budget may be approved by the bicameral conference committee and ratified by both houses on the week of Dec. 9.
The House and the Senate are working to prevent a repeat of the months-long delay in the enactment of the 2019 budget.
To recall, an impasse between the House and the Department of Budget and Management over a stricter spending framework and later with the Senate over post-ratification realignments delayed the budget for almost four months.
President Duterte had signed the 2019 budget, initially worth P3.757-trillion, on April 15; but vetoed some P95.3 billion appropriations.
That delay plus a ban on new public works 45 days ahead of the May 13 midterm elections — which left planned new infrastructure projects unfunded last semester — made overall economic growth slow to 5.8% in the first three quarters from 6.2% a year ago and against a 6-7% government target for 2019.
The Budget department has begun work on the 2021 budget after it issued on Nov. 29 the national budget call, ordering government agencies to draft their budget proposals. — Charmaine A. Tadalan
By Denise A. Valdez
Reporter
PHILIPPINE offshore gaming operators (POGOs) have fueled Philippine office space demand to a record-high 1.7 million square meters (sq.m.) in 2019, according to a report released by real estate service firm Leechiu Property Consultants (LPC) on Monday.
In its year-end briefing in Makati City, LPC said POGOs have accounted for 44% of office space demand this year at 738,000 sq.m., growing 67% from 443,000 sq.m. last year.
It has replaced the information technology-business process management (IT-BPM) sector at the top driver which accounted for 34% of office space demand in 2019 with 573,000 sq.m. from last year’s 652,000 sq.m.
Other businesses took the remaining 22% with 379,000 sq.m. from 491,000 sq.m. in 2018.
LPC President David T. Leechiu said this high demand from POGOs is expected to hold until 2020, given POGOs’ aggressiveness in setting up in the country.
But unlike Makati Mayor Mar-Len Abigail S. Binay who has imposed a moratorium on POGO permits, Mr. Leechiu said POGOs could yield net gains for any local government.
“I don’t look at it as China. I look at it as foreign investment. I come color blind in that sense,” he said, referring to the fact that the bulk of POGO workers come from China.
He noted that the entry of foreign investors such as POGOs fuels the growth of real estate tax collections, business permit applications and revenues for local governments, providing much-needed cash to fund projects.
“Foreign investment is a need. Law enforcement is another need. Tax collection is a different problem, prostitution is another problem… The solution is not shutting down these operations… but to enforce the law,” Mr. Leechiu said, referring to concerns that some POGOs have been found involved in crimes like narcotics distribution and prostitution.
LPC noted that in Metro Manila alone, demand from POGOs has grown 11-fold in the past four years to 608,000 sq.m. office space in 2019 from 57,000 sq.m. in 2016.
The bulk of these operations can be found in the bay area, where POGOs occupied 657,000 sq.m. of office space in 2019. They are also in Makati City (292,000 sq.m.), Alabang (137,000 sq.m.), Cavite (146,000 sq.m.), Quezon City (103,000 sq.m.), Pampanga (140,000 sq.m.), Ortigas (120,000 sq.m.), Laguna (65,000 sq.m.), Cebu (48,000 sq.m.), Taguig City (23,000 sq.m.) and Nueva Ecija (12,000 sq.m.)
Mr. Leechiu said this high demand from POGOs will prevent oversupply, as there are 4.8 million sq.m. of office space projected to open in the next five years, spread across Metro Manila (70%), Cebu (15%), Pampanga (seven percent), the rest of Luzon (four percent), the rest of Visayas (three percent) and Davao (one percent).
But he admitted that the presence of POGOs has “priced out” locals from residences.
Still, he believes “there are more people benefitting from it (POGOs) than being priced out.”
“If you want a country to ourselves only, fine. But how long will it take for us to lift these people out of poverty?” Mr. Leechiu said, referring to job opportunities for drivers and household helpers that opened to serve POGO workers.
“If you want this country to blossom and grow and prosper, we have to open up the country to foreigners as many others have.”
At the same time, the IT-BPM industry is expected to continue taking a hit from a moratorium on Metro Manila economic zones under the Philippine Economic Zone Authority (PEZA) imposed by Malacañang last June.
LPC projects the country will no longer have a supply of vacant office space for IT-BPM by 2022, thus failing to absorb the demand for 600,000 sq.m. of office space every year.
“Lack of PEZA supply is likely to make the Philippines a less attractive hub for IT-BPM firms on expansion mode. We need more PEZA-accredited buildings in the pipeline if we want the country to continue being an ideal location for these companies,” Mr. Leechiu said in a statement.
The implementation of Administrative Order No. 18 starting June, or the ban on the processing of applications for ecozones in Metro Manila, has already been flagged by industry stakeholders as threat to the growth of IT-BPM in the country, resulting not only in a lack of office space but also in 50,000 prospective jobs gone.
ROBINSONS Land Corp. (RLC) and DoubleDragon Properties Corp. (DDPC) are partnering to develop a prime commercial lot adjacent to the former’s Bridgetowne township in Quezon City.
In separate disclosures to the stock exchange, RLC and DoubleDragon said they signed an agreement for the joint development of the 10,032-square meter (sq.m.) commercial lot along E. Rodriguez Avenue in Libis. The two companies will share the buildable gross floor area on a 50-50 basis.
RLC told the stock exchange it is investing P644 million for the property acquisition.
DoubleDragon did not give financial details, but said the joint venture company will build Robinsons DoubleDragon Square, which will have retail and office components.
“The rationale for the joint venture is to build office buildings for lease to corporations, BPOs (business process outsourcing), and retail outlets. The joint venture is expected to be beneficial to both RLC and DDPC and shall strengthen the leasable portfolio of both companies,” RLC said.
The Gokongwei-led property company said the new project will be part of Bridgetowne, which will have residential condominiums, office buildings, shopping malls, and a 5-star hotel, as well as a transport terminal and park.
“We are glad to have this joint venture with Robinsons Land as we see the great potential of Bridgetowne to become one of the most relevant business parks in Metro Manila. We believe this partnership between DoubleDragon and Robinsons Land will bring about long-term fruitful gains to both companies,” DoubleDragon Chairman Edgar “Injap” Sia II said in a statement.
A hotel will also rise on the site, but this will be developed solely by DoubleDragon’s Hotel of Asia, Inc. The Hotel 101 — Libis is set to be the company’s eighth hotel in the country, after branches in Manila, Fort Bonifacio, Davao, Boracay, Bohol, Palawan and Cebu.
The joint venture between RLC and DoubleDragon will still require approval from the Philippine Competition Commission (PCC).
Bridgetowne is the RLC’s first township project, which covers a total of 30.61 hectares. The company will develop the property within the next 10 to 15 years.
By Cathy Rose A. Garcia, Associate Editor
PHIRST Park Homes, Inc. (PPHI) continues to expand its portfolio in the Calabarzon area with the launch of its new residential project in Calamba, Laguna.
PPHI President and Chief Executive Officer Ricky M. Celis said the company expects to generate P1.5 billion in sales from the initial 900 units offered at PHirst Park Homes Calamba.
The gated residential community, launched on Nov. 23, initially covers nine hectares but can be expanded depending on the demand.
“Calamba is a very competitive [city]. The single biggest reason is most of the developments are here, in terms of large estates. You have all the large players in the area, two industrial estates… It is also accessible, with SLEX (South Luzon Expressway), [and] CALAX (Cavite-Laguna Expressway),” Mr. Celis said told reporters on the sidelines of the new project’s launch event.
PHirst Park Homes Calamba is around an hour and a half from Metro Manila via the Mayapa or Batino exits of the SLEX.
This is the company’s fourth residential project in Calabarzon after Tanza, Cavite; Lipa, Batangas; and San Pablo, Laguna. Overall, PPHI has five residential projects, including one in Pandi, Bulacan.
Like previous projects, PHirst units start at 40 square meters (sq.m.) to 80 sq.m. for a combined unit. A single-attached unit covers 54 sq.m. All units can be expanded on the second floor.
“(Unit prices are) close to P1.5 million. We’re sticking to the average price of under P2 million, so we can secure income tax holiday (ITH) from the BoI (Board of Investments),” Mr. Celis said.
“When we get the ITH from the government, we give it back to the buyer in the form of lower price points. The government is enticing everybody to build and develop within these price points,” he added.
Mr. Celis noted around 80% of the units offered are two-bedroom town homes, as the company sees more demand for those units.
Amenities at PHirst Park Homes Calamba include bike lanes, jogging paths, fitness station, basketball court and a clubhouse with a swimming pool, kiddie pool, shower room, and parking area.
BATANGAS
Meanwhile, PPHI is hoping to launch another project before the end of the year.
Mr. Celis said the company is securing the necessary permits and licenses to be able to launch PHirst Park Homes Batulao in Nasugbu, Batangas. The initial 13-hectare project will offer 1,000 units.
“We’re thinking possibly the price points will be higher and some tweaks in terms of the model units, we will probably be introducing new models there… We think the market that we can capture there will slightly be more affluent,” he said.
However, Mr. Celis assured that the prices will be kept under P2 million.
The Batulao project is adjacent to Century Properties Group, Inc.’s (CPG) residential tourism estate Batulao Artscapes.
PPHI is a joint venture between CPG and Japan’s Mitsubishi Corp. The company is targeting to have 15 masterplanned communities with 33,000 homes by 2023.
METRO PACIFIC Investments Corp. (MPIC) has completed the deal for the P35.3-billion investment by United States-based Kohlberg Kravis Roberts & Co. (KKR) and Singapore fund GIC Private Ltd. in its hospital unit.
In a disclosure to the stock exchange Monday, the listed conglomerate said the foreign investors have successfully closed the financial deal to acquire shares in Metro Pacific Hospital Holdings, Inc. (MPHHI) and mandatorily exchangeable bonds in MPIC.
KKR made the investment through its $9.3-billion Asian Fund III, which is targeted for investments in private equity transactions in Asia Pacific.
The development follows MPIC’s announcement in October that it was selling P5.2 billion worth of 41.37 million new common shares in MPHHI and P30.1 billion mandatorily exchangeable bonds in MPIC.
At the time, MPIC said once the transaction is completed, its stake in MPHHI would be reduced to 20% or 132.59 million common shares on a fully-diluted basis.
The entry of foreign investors resulted in the postponement of MPHHI’s planned P83.3-billion IPO (initial public offering) this year, which would have raised P5.95 billion in net proceeds from the primary offer and P75.1 billion in net proceeds from the secondary offer.
The cash generated from investments by KRR and GIC will be used to fund MPHHI’s expansion as it seeks to grow its hospital portfolio, subsidiaries, associates and joint ventures.
“Today marks the start of a new and exciting chapter for Metro Pacific Hospitals,” MPIC and MPHHI Chairman Manuel V. Pangilinan was quoted as saying in Monday’s statement.
“We welcome KKR and GIC as investors who not only have established track records of helping health care companies to meet their growth ambitions, but also have full confidence in Metro Pacific Hospitals’ potential to provide even more critical health care services to patients across the Philippines.”
MPHHI prides itself as the operator of the country’s largest private hospitals and health care network in bed capacity and revenues. Among the 14 hospitals in its portfolio are Manila Doctors Hospital, Asian Hospital and Medical Center, Makati Medical Center, Cardinal Santos Medical Center and Davao Doctors Hospital.
MPHHI also operates a number of cancer care centers, clinics, laboratories and medical schools across the country.
“The Philippine health care industry is poised for tremendous growth… With this new investment… we will be in an even stronger position to meet patients’ needs and capture new opportunities through organic expansion, acquisitions and investments, and the adoption of new technologies,” MPHHI President and Chief Executive Officer Augusto P. Palisoc, Jr. said.
MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group.
Shares in MPIC at the stock exchange slipped 0.12 points or 3.28% to P3.54 each on Monday. — Denise A. Valdez
A FILM about the unsung heroes of the film industry is what the Metro Manila Film Festival entry Write About Love is about, according to a production executive. The film explores the often personal journey a writer takes to create a screenplay.
“Since this year we’re celebrating the 100 years of Philippine cinema, the film is a tribute to the writers of the industry,” Vicente “Ting” Nebrida, President of TBA Studios, told BusinessWorld during the film’s premiere on Dec. 2 at Abe Restaurant in SM Megamall, Mandaluyong City.
Billed as a romantic-comedy, Write About Love tells the story of two writers — played by Miles Ocampo and Rocco Nacino — who are brought together to rework the script of Just Us, a film about a couple who struggle maintaining their relationship because of personal issues and career choices.
The film is directed by Crisanto B. Aquino who co-wrote the script with Janyx Regalo.
Ms. Ocampo plays a newbie writer who wrote the first draft of Just Us. A hopeless romantic, she writes about two people who try to make their relationship work but studio executives find that her work closely resembles another more popular writer’s work so she needs to rewrite the script with the help of a seasoned (and cynical) writer whose most recent work was a box office hit.
Write About Love is said to bring an intimate look into how scripts are made — the hours spent toiling over words with a deadline looming — and how writers deal with their personal issues while writing their scripts.
And as the writers struggle over the script, the audience also sees the end result — the film Just Us.
“By employing an imaginative movie-within-a-movie storytelling treatment in Write About Love, [Mr.] Aquino has provided a fresh take on how art imitates life or vice versa,” the movie’s press release said, as the writers themselves are living through the same traumas and issues their characters are facing.
The film also stars Yeng Constantino and Joem Bascon as the lead characters of the script in development.
Write About Love opens in cinemas nationwide on Dec. 25. — Zsarlene B. Chua
SINGAPORE is the top market for real estate investment prospects for 2020, according to a report by PricewaterhouseCoopers (PwC) and Urban Land Institute (ULI).
In the report Emerging Trends in Real Estate Asia Pacific, Singapore along with Tokyo, Sydney and Melbourne were named as the top markets as they are “large, liquid, and defensive.”
Ho Chi Minh City was named the top emerging market.
“Vietnam offers strong economic growth, a positive demographic profile, and perhaps most important, is seen as the biggest beneficiary of the slow migration of manufacturing capacity away from China,” the report said.
Manila ranked 17th in investment prospects, up by two points from last year’s ranking; and 11th in development. However, the report flagged current restrictions on foreign majority ownership of domestic real estate assets.
The report also noted that “office-sector vacancies remain low, rents are rising, and capital values continue to grind upwards.”
While Philippine offshore gaming operators continue to drive growth in Manila’s office sector, the report noted the business process outsourcing sector is still the largest office sector tenant with a slow but steady growth.
“Sentiment towards development plays was significantly stronger this year than that for investment,“ it noted, as the government pursues its infrastructure projects under the Build, Build, Build program.
Delfin C. Wenceslao, Jr., national chair of ULI Philippines, said a key takeaway from this year’s survey is that investors are looking at cities that are “liveable.”
“More or less, I think that’s the general theme we are seeing all around. The top countries [in the survey] are investing in things like how holistic a city is, how livable it is, and investing in public infrastructure [and] public space,” Mr. Wenceslao told BusinessWorld after the official launch of the Emerging Trends report on Nov. 27.
Mr. Wenceslao, who is the president and chairman of D.M. Wenceslao and Associates, Inc., noted the Philippines has been making improvements to its infrastructure, although the effects are not immediately felt.
“Investing in long-term infrastructure is a key to make sure that all of our developments are connected, and it’s not going to happen overnight. It’s a slow, steady progress…We won’t see [the effects] one or two years from now; we’ll see it in five to 10 years,” he said.
The Emerging Trends report, which provides forecast on real estate sectors, markets and trends, is based on personal interviews and surveys of 463 leaders in the industry.
A key finding showed investors are now more cautious due to concerns over the trade war between China and the United States.
“That’s the one thing that has hit sentiment the most… It affects basically every country or market in the Asia Pacific in one way or another, usually in the negative sense,” Colin Galloway, ULI’s vice-president of content for Asia Pacific, said in a presentation of the Emerging Trends report which was held at the Grand Hyatt Hotel in Bonifacio Global City, Taguig.
Geopolitical issues such as the protests in Hong Kong and the spat between Japan and South Korea have also dampened investor sentiment.
The report also showed investors are making sustainability a priority, with landlords agreeing “that incorporating sustainable features into their buildings will allow them both to cut running costs and increase rents as tenants become more willing to pay for space that acts as a magnet for talented staff.”
The report also noted business models in the flexible workspace industry, which is found to be the “fastest-growing” component of the office sector, are increasingly being called into question.
However, the industrial and logistics sector is still a bright spot.
“While the Asia Pacific region is still undersupplied with modern logistics space, more investors are now seeking excess returns in subsectors of that market, such as cold storage or last-mile warehouses,” the report added. — Adrian Paul B. Conoza
THE MICROINSURANCE industry grew in the first nine months of the year on the back of higher premium production and expanded client base, the Insurance Commission (IC) data showed.
The IC reported on Monday that the microinsurance industry’s overall premium production climbed 11.99% to P6.58 billion in the January-September period from the P5.87 billion it posted a year ago.
Broken down, the mutual benefit associations (MBA) sector posted a 15.06% growth in premium production to P3.91 billion in the nine months to September compared to the P3.39 billion in premiums earned in the same period in 2018.
The life insurance sector also grew its total premiums by 4.16% to P1.95 billion as of end-September from the P1.88 billion in the same comparable period last year.
Likewise, the nonlife sector’s number of premiums produced increased 19.08% to P719.97 million from the P604.63 million a year ago.
In terms of coverage, preliminary data based on the quarterly reports submitted to the IC showed that the industry has 40 million individuals covered by microinsurance as of end-September.
Of this total, the MBA contributed the bulk or 62% as it covered 25 million members in the nine months to September.
This was followed by the eight million clients covered by the life insurance sector, which was lower than the 11 million it had in the same period last year.
The nonlife sector contributed 17.5% of the total as it expanded its number of clients covered to seven million from four million in 2018, up 74% year on year.
In the MBA sector, CARD MBA, Inc. contributed the lion’s share at 80% of the total clients insured and 82% in premium production.
Fot the life insurance sector, CLIMBS Life and General Insurance Cooperative and Pioneer Life, Inc. were among the firms to record the most number of clients insured and premiums produced.
Meanwhile, Pioneer Insurance and Surety Corp. had the highest number of individuals covered while the CARD Pioneer Microinsurance, Inc., ranked first in terms of premium production in the nonlife insurance sector. — B.M. Laforga
WASHINGTON — Friday’s booming US jobs report should give the Federal Reserve all it needs to stick to its plan not to cut interest rates further in the near future, so when US central bankers meet this week, most of the focus will be on their outlook for next year and beyond.
But here’s the rub: They often get it wrong. The coming year — with the added complications of an ongoing trade war and the US presidential election — looks to be no exception.
Alongside their interest-rate decision, Fed policy makers offer up economic and rate projections at every other meeting, and the next iteration of their so-called “dot plot” is due at the end of the two-day policy meeting on Wednesday.
The Fed has made clear that it plans to stand pat on rates barring a “material” change in the US economic outlook. Policy makers will assess how the three interest rate cuts they’ve implemented this year, most recently at the last meeting in October, filter through the economy over the coming months.
Those cuts were characterized as a preemptive mini-boost to the world’s largest economy to mitigate the effects of slowing global growth and a 17-month-long US-China trade war. The Fed hoped to offset fears that a recession in manufacturing and a drop in business investment could spread malaise to the wider economy.
So far the interest rate cuts seem to be working. The Labor department on Friday reported US job growth increased by the most in 10 months in November and recent data on housing and orders for big-ticket goods have offered a fairly upbeat assessment of the economy.
Fed policy makers are expected to hew close to their aim of a significant pause in marking out where the level of interest rates will be by the end of next year as they strive to keep the longest US economic expansion on record going.
The Fed, however, has a spotty history with its year-ahead interest rate projections, having hit its median forecast only three times since they were introduced in 2011.
This year is shaping up to be their largest miss ever. Last December, the Fed projected two interest rate hikes for 2019, seeing an economy only in danger of overheating.
At the Fed’s September meeting, when projections were last published, eight of the 17 policy makers already forecast interest rates to be at the level they are now through 2020.
“At the moment I think they still feel comfortable saying this is just what we promised,” said Torsten Slok, chief economist at Deutsche Bank Securities.
Traders are betting that the Fed will cut rates once in 2020, according to an analysis of Fed funds futures contracts compiled by the CME Group.
BEST LAID PLANS, TRADE WAR BLUES
Fed policy makers’ forecasts for future US economic growth this time around will be in sharp focus. In September, policy makers’ projections for 2020 growth ranged from 1.8% to 2.1%, consistent with what the Fed sees as the economy’s potential growth rate. But if growth ebbs below trend pace next year, that could cause policy makers to ease again.
Chief among the risks to the forecast the Fed has set is the uncertainty caused by President Donald Trump’s chaotic trade policy, given its role in forcing the Fed’s hand this year.
After the Fed’s last meeting, Chair Jerome Powell pointed to a mooted initial US-China trade deal by yearend as welcome evidence that economic uncertainty was diminishing for businesses that have repeatedly said the tit-for-tat tariffs were causing them to suspend investments and scrap projects.
Since then, US-China trade talks have stalled and Mr. Trump unexpectedly slapped tariffs on steel and aluminum imports from Brazil and Argentina and has also threatened duties of up to 100% on French goods. On Tuesday, Mr. Trump suggested US-China trade negotiations may not be resolved before the 2020 election, further clouding an already uncertain outlook.
“It’s a tough situation for them because trade policy is still in flux and they’re an election year sounding board for both political parties,” said Satyam Panday, a senior economist at S&P Global.
What seems to be certain though is that the Fed is just as likely to change the level of interest rates in an election year as any other, according to past precedent.
Mr. Trump has repeatedly harangued the Fed this year for not lowering interest rates as much as he wants in order to bolster his economic policies, giving the impression he is pressuring an institution that prides itself on focusing only on the economic data at hand.
Mr. Powell reiterated to Mr. Trump at a meeting last month that the central bank will set monetary policy “based solely on careful, objective and non-political analysis,” the Fed said in a statement at the time.
The central bank has altered monetary policy during 11 of the past 12 election years, with 2016 the exception. Economists have noted that was due to global headwinds, not the presidential election that year. — Reuters
CEBU LANDMASTERS, Inc. (CLI) is boosting its landbank in key cities in Visayas and Mindanao, as it prepares to ramp up expansion in the next few years.
In a statement, the housing developer said it increased its landbank in the region to 1,245,485 square meters (sq.m.), 36% higher year-on-year.
CLI said the company is looking to invest P50 billion in a range of projects in these properties Cebu, Davao, Bacolod, Iloilo, Ormoc, Dumaguete and Bohol.
“Our landbanking activities are driven by the opportunities presented by each local market. We only purchase a property if we are certain we have an appropriate project for the site to meet a community’s needs and if we can develop that project in the next two to three years,” CLI Chairman and CEO Jose R. Soberano III was quoted as saying.
The company said it used internally generated funds and bank financing for the acquisitions.
The bulk of the land acquisitions in 2019 are owned by CLI, while 21% are joint ventures.
Mr. Soberano noted that joint ventures “allow CLI to access high-value sites without requiring from the firm intensive capital outlay. We also benefit from our partners’ expertise and established presence in the new markets.”
CLI partnered with Iloilo businessman Alfonso Tan, chairman of International Builders Corporation (IBC), for a high-rise multi-tower condominium project in Iloilo City’s downtown area.
The developer also teamed up with Aboitizland, Inc. for a mid-market multi-tower condominium project in Mandaue City.
CLI and Borromeo Brothers are again launching a joint venture for a two-tower condominium in Cebu City. The two companies have previously developed Latitude Corporate Center.
The company is rolling out several projects in Cebu, such as redevelopment of the Abaca Resort Mactan and a resort property with a hotel and condominiums in Mactan.
CLI also acquired an adjacent lot of over 48,000 sq.m. to be used for the expansion of Casa Mira South in Cebu. Also in Cebu, CLI is developing a mixed-use community with hotel, office and retail spaces in a lot in Cebu Business Park.
In Davao, the company acquired a 28-hectare property for its first horizontal development in the area. Through a joint venture company with YHES, CLI purchased the adjacent lots for the expansion of The Paragon Davao.
In Bacolod City, CLI bought an 11,000 sq.m. lot which will be the site of condominiums to be completed in 2021.
The company purchased a 91,065 sq.m. property in Ormoc and a 71,181 lot in Dumaguete, which will be both used for Casa Mira projects. It also secured a 36,000 sq.m. lot in Bohol.
“Our projected pipeline of projects targeted towards the VisMin buyer means sustained growth for CLI and added value to our shareholders,” Mr. Soberano said.
