Peso weakness won’t last long – BSP exec

 Economy
Aug 262013
 
Peso weakness won’t last long – BSP exec

MANILA, Philippines – The peso’s continued weakness against the dollar is not expected to last for long as this has been driven by market reactions to recent developments, a Bangko Sentral ng Pilipinas (BSP) official said. “I’m not sure if that is going to be for the long haul because as I have always indicated… we have a balance of payments and current accounts surpluses that should drive the firmness of the peso moving forward,” BSP Deputy Governor Diwa C. Guinigundo told reporters late last week. The local currency closed at 44.26 to a dollar last Friday, its lowest level since Jan. 31, 2011. Analysts attributed the depreciation to last week’s US Federal Reserve minutes which signified support for tapering stimulus due to an improving US economy. Moreover, the peso tracked other regional currencies, which weakened because of disappointing economic indicators reported by some emerging markets. “What we’re seeing is market reaction… so this is something that is driven more by market sentiment than by fundamental factors,” Guinigundo said. “It’s bound to correct in due time and when that happens… it means that that should go back to fundamentals and the fundamentals means that peso should be firm because of the balance of payments and current accounts position,” he continued. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The country’s balance of payments surplus amounted to $3.677 billion in the seven months to July. The BoP, which shows a country’s transactions with the rest of the world, tallies investments, Read More …

Money parked in SDAs up slightly in August

 Economy
Aug 232013
 
Money parked in SDAs up slightly in August

MANILA, Philippines – Money parked in the central bank’s Special Deposit Accounts (SDAs) hit P1.77 trillion as of Aug. 2, rising week-on-week despite Bangko Sentral ng Pilipinas (BSP) efforts to push away funds from the facility. The amount was slightly higher than the P1.75 trillion recorded as of July 26, BSP data showed. However, this was lower than the P1.79 trillion recorded in end-June and the P1.85 trillion seen in end-May. The central bank introduced SDAs in late 1998 to mop up excess liquidity in the financial system. But the falling interest rates prompted investors to park their funds in the facility instead of putting money in other financial instruments. As a result, the BSP has cut SDA rates by 150 basis points this year to two percent. It has also ordered the removal of 30 percent of individual deposits in the SDA by July 31. A total phase-out of these individual deposits, estimated to account for P1 trillion of the facility, was also ordered by November. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Emilio Neri Jr., lead economist at the Bank of the Philippine Islands, noted concerns hounding the markets may be discouraging investors to pull out their funds from the SDA facility. “There’s the aspect of the somewhat cautious mode of the market given equities are actually seeing a sharp reversal and investors would probably want to park their funds in more conservative instruments,” Neri said. “When the mood of the market shifts to more optimism, Read More …

BSP follows the money: Where do SDA funds go?

 Economy
Aug 022013
 
BSP follows the money: Where do SDA funds go?

MANILA, Philippines – The central bank is monitoring where funds from special deposit accounts (SDA) are being diverted after a “massive” outflow as a result of lower returns and stricter placement rules, an official said. “We have already seen a massive reduction on SDA balances over time,” central bank Assistant Governor Johnny Noe Ravalo told reporters on Friday. “What does that mean? That is where the current review is being taken from a financial standpoint…It is incumbent upon us to monitor all these flows,” he added. Idle money from the SDA— fixed-term deposits by banks and trust departments— began to drop last month after the Bangko Sentral ng Pilipinas (BSP) slashed the interest it offers by 150 basis points to two percent. As a result, investors shifted their money to higher earning investment outlets such as government securities. As of July 12, SDA placements totaled P1.8 trillion, still down from its peak of P1.983 trillion last April 15, but higher than the P1.738 trillion two weeks before. According to Ravalo, trust entities have complied with another BSP rule ordering them to retire 30 percent of investment management accounts (IMA)— funds held for a singular person— by the end of last month. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 A complete phase-out of IMAs by Nov. 30 was also ordered by the BSP. BSP Deputy Governor Diwa Guinigundo, in a text message, said the reduction in SDA placements from April to June has already contributed to money supply (M3) Read More …

House bill seeks to criminalize hoarding PHL coins

 News
Jul 272013
 
House bill seeks to criminalize hoarding PHL coins

If a bill filed in the House of Representatives is passed into law, hoarding Philippine coins may become a crime with the offender facing up to eight years in jail. House Bill 1662, the proposed Anti-Hoarding of Philippine Legal Tender Coins Act of 2013, filed by Iloilo Rep. Jerry Treñas also provides for a fine of at least P300,000. “The unscrupulous practice of hoarding of coins is tantamount to economic sabotage and is creating an artificial shortage of coins,” Treñas said in a news release. In his bill, Treñas said hoarding coins of any denomination may cause an artificial shortage of small denominations of currency. He cited how many establishments have lacked small change. The proposed bill criminalizes the keeping or possession of coins of any denomination exceeding the allowable aggregate value, number of pieces and weight “to be determined by the Bangko Sentral ng Pilipinas (BSP) by any person, corporation, partnership, association or any other form of juridical personality.” The bill seeks to stop the alleged practice by syndicates of hoarding coins, which are smelted and converted into other materials for industrial uses. Treñas added the Bangko Sentral ng Pilipinas will be the proper agency to enforce and implement the proposed act. Exempted from the bill’s coverage are charitable institutions, private banks, banking and financial institutions of the government, and government agencies and instrumentalities that “hold or keep such coins in connection with their official duties.” The bill lets the BSP “review and change, if needed, the aggregate amounts Read More …

Metrobank to exercise call option on P5.5-B Tier 2 notes

 Economy
Jul 172013
 
Metrobank to exercise call option on P5.5-B Tier 2 notes

MANILA, Philippines – Metropolitan Bank & Trust Co. (Metrobank), the main banking arm of the Ty family, will exercise its call option on its P5.5-billion Lower Tier 2 notes. In a disclosure to the Philippine Stock Exchange, Metrobank head of investor relations Juan Placido Mapa III said the bank’s board approved Tuesday the conduct of the call. He said Metrobank would undertake the call option on the notes with a rate of 7.75 percent on Oct. 4. The call option feature is in accordance with the terms and conditions of the notes. Mapa, however, said they would seek the approval of the Bangko Sentral ng Pilipinas (BSP) before carrying out the call option. “The bank is currently in the process of securing BSP approval,” he said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The Metrobank official said the board has also approved the issuance of up to $500 million Basel 3-compliant Tier 2 capital securities to proactively manage its capital base for growth and for refinancing of maturing capital notes. The Basel 3 guidelines issued by the BSP in Jan. 15, 2003 requires that Tier-2 notes have a provision for the instrument to either be written off or converted to common equity upon occurrence of certain trigger events. The BSP circular further stipulates that banks must make the necessary amendments to their articles of incorporation to accommodate such a conversion. Metrobank said it has received  BSP approval to amend its articles of incorporation on the increase in authorized Read More …

BSP orders banks to remain open on local holidays

 Economy
Jul 082013
 
BSP orders banks to remain open on local holidays

MANILA, Philippines – Banks are no longer allowed to shut down operations during local holidays without prior notice to the Bangko Sentral ng Pilipinas (BSP), a new order said. Under Circular 802 signed June 21, the central bank has ordered lenders and their extension offices to notify the central bank two days before their closure in the observance of a local holiday within their area. The order, which will take effect 15 days from yesterday’s release, asked banks and their branches to “submit, either individually or through their head offices” a “prior notice of their intended closure” to the BSP Supervisory Data Center. The circular covered all banks, their branches and “other banking offices.” BSP officials could not be reached for comment on the new circular. Prior to this amendment to the Manual Regulations of Banks, lending institutions were only tasked to have their closure during local holidays approved by the banking association where they belong. Meanwhile, during national holidays declared by presidential proclamations, no prior notice is required for bank closures. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “The required notice (for local holiday closures)…shall be supported by a certification jointly signed by the president of the bank or officer of equivalent position and the head of the branches department,” the central bank explained. The notice and reason of a bank’s closure should be posted on the banks’ establishment to inform depositors and other banking clients.

Consumer prices inch up in June

 Economy
Jul 042013
 
Consumer prices inch up in June

File photo of consumers in the Philippines. MANILA, Philippines – Consumer prices slightly accelerated in June from the previous month but the Bangko Sentral ng Pilipinas (BSP) said inflation continues to remain manageable. Inflation picked up to 2.8 percent in June from 2.6 percent in May, the National Statistics Office (NSO) reported on Friday. “This was due to higher annual increments in the indices for alcoholic beverages and tobacco, health, transport, recreation and culture, and education,” the state agency said in its website. Excluding food and oil prices, core inflation settled at 2.9 percent, slightly losing pace from three percent in May. The BSP welcomed the latest inflation print, which fell within its 2 to 2.9 percent forecast for the month. The result “further supports our assessment of manageable inflation and the current appropriateness of our current policy stance,” BSP Governor Amando Tetangco Jr. said in a text message to reporters. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 As of the first half, inflation settled at 2.9 percent, slightly below the BSP’s three- to five-percent inflation target. The central bank, Tetangco said, will be watchful of external developments, especially on how other monetary authorities abroad will calibrate their policies. “We will monitor the impact of these factors on global and domestic investor sentiment and growth dynamics to see if there is any need to adjust our own policy settings,” Tetangco pointed out. The BSP has kept policy rates at record-lows of 3.5 percent and 5.5 percent since October, Read More …

Phl posts $75-M BOP surplus

 Economy
Jun 192013
 
Phl posts $75-M BOP surplus

MANILA, Philippines – The Philippines still managed to post a balance of payments (BOP) surplus in May despite the start of a huge sell-off in the financial markets. The country’s BOP — which measures all inflows and outflows — posted a surplus of $75 million last month, the lowest for the year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. BSP officials could not be reached for comment. A surplus indicates more than enough resources to meet external trade and debt obligations. It brought the year-to-date tally to $1.884 billion, a wider surplus against the $1.302 billion in the same period last year. Financial markets have slumped after reaching its peak last May 15, owing to investor concerns the US economy would scale down its stimulus measures soon. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 As a result, foreign portfolio investments — which record placements to bond and stock markets — plunged to a net outflow of $640 million in May, the highest on record. Portfolio investments, together with foreign direct investments, feed in the capital account segment of the BOP. While this portion was on the negative, BOP sourced strength from current account flows, which included remittances and exports. BSP data showed remittances hit $6.916 billion as of April, up 5.7 percent. Merchandise exports, meanwhile, went down 7.95 percent to $16.12 billion for the first four months.

LBP to hike loans to rural banks

 Economy
Jun 162013
 
LBP to hike loans to rural banks

MANILA, Philippines – State-owned Land Bank of the Philippines expects to increase its loans coursed through rural banks to provide more people in the countryside greater access to funds. Landbank president and CEO Gilda Pico said “we would be jacking up our loans to rural banks”. Declining to specify as to how much the increase would be, Pico noted that as of April 2013, Landbank’s loan portfolio to rural banks amounted to P7 billion. At the same time, Pico has vowed to look into complaints that some banks, including Landbank, tend to unfairly compete with rural banks in capturing local government units (LGUs) accounts. “We will discuss this with concerned rural banks. Landbank has always been a partner of rural banks in serving the countryside,” she said. “We have been giving the RBs loans through the years. We have to resolve this issue because rural banks are our partners,” Pico added. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 It was learned that some LGUs normally request the government financial institutions (GFIs) and some commercial banks to offer a so-called consolidated loan package which also carries lower interest rates than that of rural banks. Included in the consolidated loan package of GFIs, it was noted, are salary loans to government employees which apparently are also being eyed by the RBs. During an open forum at the 60th Annual Convention of the Rural Bankers Association of the Philippines (RBAP), Bangko Sentral ng Pilipinas (BSP) deputy governor Nestor Espenilla said they Read More …

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