Maniolas

Foreign portfolio investments or “hot money” turned around to a $2-billion net inflow in the first eight months of the year amid the country’s strong macroeconomic fundamentals, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.  MANILA, Philippines – Foreign portfolio investments or “hot money” turned around to a $2-billion net inflow in the first eight months of the year amid the country’s strong macroeconomic fundamentals, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. This was a complete reversal of the $211.8-million net outflow in the same period last year. The central bank traced the inflows to the P37-billion infusion made by Japan’s largest financial institution, the Bank of Tokyo Mitsubishi UFJ Ltd (BTMU), in exchange for a 20 percent stake in Security Bank Corp., as well as the P25.13 billion initial public offering of cement maker Cemex Holdings Philippines Inc. The BSP also cited large net inflows in shares of two holding companies as well as the renewed interest in peso government securities. Data showed inflows fell 15.77 percent to $12.6 billion from January to August this year against the $14.96 billion booked in the same period last year while outflows dropped 29.9 percent to $10.63 billion from $15.17 billion. Hot money are referred to as speculative funds controlled by investors who actively seek short-term returns and high interest rate investment opportunities. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 For the month of August alone, the country booked a net inflow of $427.07 million, reversing the net outflow Read More …

MANILA, Philippines – A proposal to harmonize all capital income taxes to 10 percent is expected to encourage more depositors and investors to park their money in banks. “We propose to harmonize all capital income taxes regardless of currency, maturity and type toward 10 percent,” Finance Secretary Carlos Dominguez said. “This way, the poor pay less on the interest income and the rich pay more,” he told House ways and means committee last Tuesday. Capital income taxes pertain to final levies charged on bank deposit earnings as well as interest income from investments in bonds. Under the present law, peso deposits are charged differently depending on their maturities, with those parked for less than three years being slapped with a 20-percent rate. Money staying put for three to less than four years is taxed 12 percent, four to less than five years with five percent, while those for longer periods are tax-free. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Foreign currency deposits, meanwhile, have a fixed 7.5-percent rate, while interest from investing in bonds are levied 20 percent. Dominguez said retail depositors with small amount of money do not even feel the benefits of saving in the bank. “Small depositors are burdened with high tax rates because they save less and cannot keep their money in banks for a long time, while rich depositors, who park their money in banks because they do not have an immediate need for it, are not taxed,” he said. “Is that fair?” Read More …

Manufacturing is still the largest recipient of foreign investment commitments, with pledges valued at P14.2 billion in the second quarter of the year or comprising 35 percent of total. File photo MANILA, Philippines – Total foreign investments approved by the country’s seven investment promotion agencies grew 11.5 percent in the second quarter of 2016, the Philippine Statistics Authority (PSA) reported yesterday. Investment pledges during the period reached P40.4 billion, up from P36.2 billion in the same period last year. In the first six months of the year, approved foreign investments reached P66.6 billion, up 14.8 percent from the previous year’s record. These include investment commitments cleared by the Board of Investments, Clark Development Corp., Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, Authority of the Freeport Area of Bataan, BOI-Autonomous Region of Muslim Mindanao and Cagayan Economic Zone Authority. By country of origin, the top three prospective investors in the second quarter of 2016 were Singapore, Japan and South Korea. Pledges from Singapore amounted to P10.2 billion. Japan and Korea committed investments worth P7.1 billion and P5.1 billion, respectively. Manufacturing is still the largest recipient of foreign investment commitments, with pledges valued at P14.2 billion in the second quarter of the year or comprising 35 percent of total. Construction also received a sizeable amount of pledges at P8.2 billion representing 20.4 percent of total; while administrative and support service activities received commitments of P6.2 billion, making up a 15.4-percent share. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 In Read More …

MANILA, Philippines – Banks said the implementation of another set of foreign exchange liberalization measures starting today would make the country’s financial system more safe and at the same time reduce the number of black market currency trades. HSBC president and CEO Jose Arnulfo “Wick” Veloso said in a press conference the ninth wave of foreign exchange liberalization measures approved by the Bangko Sentral ng Pilipinas (BSP) “is a very positive move and a step in the right direction.” Veloso also chairs the open market committee of the Bankers Association of the Philippines (BAP). “The benefit to the public is just significant. It allows them to be able to deal with financial institutions instead of any entity that just sells foreign exchange. They are now able to purchase foreign exchange in entities that are regulated extensively by the BSP,” he said. BSP Governor Amando Tetangco Jr. yesterday issued Circular 95 laying down the amendments to the manual of regulations on foreign exchange transactions. The BSP has further relaxed foreign exchange rules by allowing Philippine residents – both natural-born Filipinos and foreigners residing in the country – to purchase up to $500,000 in foreign exchange “without supporting documentation.” Business ( Article MRec ), pagematch: 1, sectionmatch: 1 For companies, the limit was raised to $1 million. The previous cap for both individuals and corporates was placed at $120,000. “The country becomes a safer place to be able to transact because it allows you to be able to deal with financial institutions. Read More …

Finance Secretary Carlos Dominguez said there is no risk of capital flight once the government pushes through with its plan to slap a higher tax rate of 35 percent on high-income earners or the so-called ‘ultra rich.’  MANILA, Philippines – Finance Secretary Carlos Dominguez said there is no risk of capital flight once the government pushes through with its plan to slap a higher tax rate of 35 percent on high-income earners or the so-called ‘ultra rich.’ “It’s not really a big concern,” Dominguez told reporters. Newly-appointed Finance Undersecretary Antonette Tionko agreed, adding that the additional three percentage points is “not that much” of an increase from the current highest individual tax rate of 32 percent. The plan, which will be included in the tax reform package to be submitted to Congress, will see only “less than 1,000 people” getting affected, according to Bureau of Internal Revenue data cited by Tionko. This will easily cover the bureau’s top 500 individual income taxpayers, which included businessmen and celebrities led by Jacinto Ng of Rebisco Corp. and now Senator Manny Pacquiao. In that year, the two paid P280.11 million and P210.31 million in income taxes at a rate of 32 percent. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Local businessmen were also in the list, including San Miguel Corp. president Ramon Ang, Ayala Corp.’s Jaime Augusto Zobel de Ayala, and Metro Pacific Corp. chief Manuel Pangilinan. “I really don’t think they would mind paying a higher tax rate since they Read More …