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 to tighten credit card reporting system

 Economy
Aug 212013
 
BSP to tighten credit card reporting system

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) is set to issue a new report to assess the credit card situation in the country. “We are launching in the next few months a new reporting system called Credit Card Business Activity Report,” BSP Deputy Governor Nestor A. Espenilla Jr. told reporters late last week. “So all banks, all credit card providers will be required to complete this… so we have a better handle of the information,” Espenilla added. Moreover, this new report will allow the central bank to determine the number of credit cards issued and the number of cardholders in the country. “We also want to know the aging of those so we have a smoother appreciation of the credit card situation,” Espenilla said.  Aging is a tool employed by firms to estimate possible losses from uncollected receivables, in this case, from credit cards. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The central bank already tracks credit card debt through the local banks’ report of the loans they have extended. Credit card receivables grew nine percent to P143.684 billion in the first quarter from P131.870 billion in the same period last year. The increase in credit card receivables along with growth in other consumer loans was attributed by the BSP to the favorable macroeconomic conditions enjoyed by the country and the steady inflow of remittances from abroad.

BPI sees BSP tweaking 2015 inflation target

 Economy
Aug 182013
 
BPI sees BSP tweaking 2015 inflation target

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) may tweak its 2015 inflation target of two to four percent in order to keep up with a foreseen volatile interest rate environment, the Bank of the Philippine Islands said. “In keeping with its desire to fulfill its dual mandate of price stability and financial stability, the BSP may consider widening its 2015 inflation target, a move that will be widely accepted by the market,” BPI Economics and Financial Markets Research said in a commentary. “BSP may resort to invoking flexibility and widen its inflation target to avoid a volatile interest rate environment, a scenario which could emerge with its pre-set 2015 inflation target of two to four percent,” it said. The bank explained the 2015 inflation target may be “incompatible” with the central bank’s preferred “middle-of-the-pack” stance for the peso. This “middle-of-the-pack” stance, which means the BSP is keeping the peso from veering away from the movement of other regional currencies, is seen to have a pass-through impact on inflation, the bank noted. “BSP’s more flexible exchange rate policy, embodied in their efforts to keep USD/PHP in the middle of the regional pack will likely lead to an upward adjustment in the BSP’s 2015 inflation target, which will in turn, enable monetary policy authority to keep interest rates stable in the next 18 months,” BPI said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The BSP sees inflation to fall within the three to five percent target this year Read More …

Remittances rise 6.2% to US$11.8B

 Economy
Aug 162013
 
Remittances rise 6.2% to US$11.8B

PERSONAL remittances from overseas Filipinos for January-June 2013 amounted to US$11.8 billion, representing a 6.2 percent increase from the level registered in the same period last year. The Bangko Sentral in Pilipinas (BSP) announced that 75.1 percent of the remittances came from land-based workers with work contracts of one year or longer. These remittances increased by 5.1 percent, despite continuing gloom in some major economies abroad. Remittance flows from sea-based workers and land-based workers with short-term contracts grew by 7.5 percent. For June 2013 alone, personal remittances increased year-on-year by 5.7 percent to reach US$2.1 billion, the highest monthly level recorded during the year. Cash remittances coursed through banks for the first six months of 2013 reached US$10.7 billion, sustaining the 5.6 percent growth in the same period last year. In particular, remittances from both sea-based (US$2.5 billion) and land-based workers ($8.2 billion) expanded by 7.4 percent and 5.1 percent, respectively, the BSP also said. Major sources of cash remittances were the United States, Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada, and Japan. Total flows from these countries represented about three-fourths (74.8 percent) of the total cash remittances coursed through banks. Remittances remained robust partly on the back of continued increase in demand for skilled Filipinos. The Philippine Overseas Employment Administration (POEA) reported the number of workers deployed overseas in 2012 increased by 6.8 percent to 1,802,031, from 1,687,831 in 2011. “The steady stream of remittances also drew continued support from the efficient network of bank 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 …

BSP to study US impact on local economy ahead of policy meeting

 Economy
Jul 182013
 
BSP to study US impact on local economy ahead of policy meeting

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) will consider how the dovish statements from the United States Federal Reserve will impact on local growth and inflation outlooks as it sets policy next week, its top official said on Thursday. “We will consider the impact of the Fed guidance, market sentiment and actual flow of funds on global and domestic growth and inflation dynamics,” BSP Governor Amando Tetangco, Jr. said in a text message to reporters. On Wednesday night, US Fed Chairman Ben Bernanke told American congressmen that the $85-billion bond buying program, initially thought to be coming to an end, is “not on a preset course,” suggesting it could keep policy accommodative. Over the past month, Asian financial markets, including those from the Philippines, suffered huge losses after the world’s superpower indicated it could taper off cheap money from its quantitative easing “later this year” on signs of recovery. With the latest statement, Tetangco said the US Fed is trying to help investors digest its next move and “hopefully markets will be more circumspect this time around” before making any bets.  Thus, investors, he said, are expected “not to place or extend large one way bets” which “often create their own stages for panic by overshooting before and after the fact.” Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Last month, the Philippine Stock Exchange index dropped by as large as 6.5 percent, while the peso weakened toward the 44-peso mark versus the dollar. They have since 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.

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