BSP – Page 6 – Maniolas

Forex reserves lowest in 10 mos

Economy

Jul 052013

MANILA, Philippines – The country’s foreign exchange reserves dropped to a 10-month low in June after the central bank’s gold holdings plummeted in value, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. The BSP said its gross international reserves (GIR) – buffer funds in times of external shocks – fell to $81.640 billion in June. It marked the third straight month of decline since GIR peaked at $85.273 billion in January. The latest tally was also the lowest level for reserves – one of the drivers tagged by credit rating agencies for their upgrades – since August 2012 when figures were recorded at $80.728 billion. Despite the decrease, BSP Governor Amando Tetangco Jr. said in a statement reserves remain sufficient to cover 11.8 months worth of imports of goods and services. They are also equivalent to 8.3 times the country’s short-term foreign debt based on original maturity, and six times based on residual maturity. The BSP expects GIR to hit $87 billion this year. “The slight decline in reserves was due mainly to revaluation adjustments on the BSP’s gold holdings arising from the decrease in the price of gold in the international market…,” Tetangco said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 According to official figures, gold holdings decreased 11.33 to $7.663 billion in June from a month ago, the lowest level in nearly two years. It was the single biggest drag to reserves last month. “These outflows were partially offset by inflows from foreign exchange operations of Read More …

BSP eases forex rules anew

Economy

Jul 052013

MANILA, Philippines – The country’s foreign exchange rules were liberalized anew on what the Bangko Sentral ng Pilipinas (BSP) said was part of efforts to prepare the Philippines for the financial integration of Southeast Asian economies by 2015. “The objective is to further broaden the scope for regional and international transactions as we become more integrated with financial markets globally,” BSP Governor Amando Tetangco Jr. said in a text message to reporters. BSP Deputy Governor Diwa Guinigundo, in a separate text message, said the new rules were meant to “prepare the Philippines for a more integrated financial markets” of the Association of Southeast Asian Nations (ASEAN) by 2020. Tetangco said the central bank is allowing non-residents to invest in foreign companies listed in the Philippine Stock Exchange. Peso earnings from these investments may now also be converted into dollars. Prior to this, Guinigundo said only Philippine residents could register with custodian banks in order to buy shares of PSE-listed non-resident companies. Registration of portfolio investments – inflows to equities, bonds and peso deposits – through custodian banks are necessary to allow remittance of earnings and convert them into other currencies. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “We are setting the stage for the eventuality that trading links (among the ASEAN nations) are established,” he told reporters. “This is in connection also to the planned cross-listing” on regional bourses planned under the ASEAN financial integration, Guinigundo explained. In addition, the BSP is also allowing the pre-payment of central Read More …

Consumer prices inch up in June

Economy

Jul 042013

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 …

BSP asks banks to prepare for US FATCA implementation

Economy

Jul 032013

BSP asks banks to prepare for US FATCA implementation

MANILA, Philippines – Financial institutions were asked to prepare for the effectivity of a US order next year targeted at running after American tax evaders offshore and seen having an impact on their operations. Local and foreign firms transacting with “US persons” will be hit next year by the Foreign Account Tax Compliance Act (FATCA), which orders the charging of taxes against any non-compliant financial institution engaged with US citizens. The Bangko Sentral ng Pilipinas (BSP), in a memorandum, said its supervised institutions – including commercial and investment banks – must “evaluate” if they are covered by FATCA and if applicable, must “establish a policy” to comply. “They are advised to study the potential effects of FATCA to their businesses and determine the necessary steps to take to avoid the unfavorable consequences of non-compliance with FATCA requirements,” said Memorandum 2013-030 dated July 1. FATCA is part of the US’s Hiring Incentives to Restore Employment Act enacted into law in 2010 as part of stimulus measures to boost US economic activity and employment. According to the US Internal Revenue Service (IRS), firms may register between this month until Oct. 25 through its online portal to become “FATCA-compliant.” In doing so, they are agreeing to provide “certain information” to the IRS concerning US accounts they hold. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 In addition, US citizens who have foreign assets in excess of $50,000 must report their holdings to the IRS. If they chose not to register though, FATCA Read More …

BSP: Temporary market volatility could last for months

Economy

Jun 262013

BSP: Temporary market volatility could last for months

MANILA, Philippines – The temporary volatility in financial markets could last for months, but the Philippines will survive given its strong fundamentals, officials said on Wednesday. “These are interesting times again,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco, Jr. said in a speech before financial officers in Makati City. The central bank chief said the “furor” will soon “subside” once investors have a complete grasp on the United States Federal Reserve’s pronouncements that it may scale down stimulus measures this year. “There is always volatility on the way to recovery. The way to recovery is not a clear path,” Tetangco said. “What is important is that you focus on your goal and don’t be distracted because volatility is inevitable,” he added. The scenario “will be there or a while, possibly for months,” said International Monetary Fund resident representative Shanaka Jayanath Peiris. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Investors have been rattled by concerns that cheap money from the $85-billion monthly bond buying program of the US will end soon, prompting them to re-position their holdings back to world’s largest economy. The Philippine Stock Exchange index, one of the world’s best performers last year, entered a bear territory last Tuesday, closing at 5,789.09 as it erased all its gains for the year. A bear territory is marked by a 20-percent slump from the bourse’s last peak. Meanwhile, the peso touched 44 level versus the dollar last Monday before it bounced back to close at 43.46 last Tuesday. Read More …

Despite hot money outflow, BSP says no to capital controls yet

Economy

Jun 242013

Despite hot money outflow, BSP says no to capital controls yet

MANILA, Philippines – Capital controls are still off the table even if only to prevent money from leaving the Philippines, the Bangko Sentral ng Pilipinas (BSP) said. BSP Governor Amando Tetangco Jr. said the central bank is “not looking at capital controls” to temper the slump in the financial markets driven by worries the US will scale back its stimulus measures soon. Earlier this year, the idea of capital controls has also been floated, that time to manage the reverse: large inflows flocking to emerging markets for better returns. But after the US Federal Reserve said it may taper off its quantitative easing measures “later this year,” investors have begun leaving developing nations on optimism interest rates will soon rise in the world’s largest economy. The actions of investors caused the Philippine Stock Exchange index to lose 3.41 percent on Monday and close at 5,971.05, the lowest since January. The peso, meanwhile, slumped to its weakest level since January last year to end trading at 43.84 versus the greenback. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 On Saturday, BSP Deputy Governor Diwa Guinigundo said the country will “maximize the returns” of its foreign reserves to have enough buffer to cushion outflows. BSP Assistant Governor Ma. Cyd Tuano-Amador, for her part, said the weakening of the peso has limited effect on inflation. “There is a considerable range where the peso can move before any breach of the inflation target can happen,” Amador said last Friday.

Peso drops to 2-year low then bounces; trades between P43-P44

Economy

Jun 212013

Peso drops to 2-year low then bounces; trades between P43-P44

MANILA, Philippines – The peso touched its lowest level in more than two years on Friday before bouncing back to close on a stronger note versus the dollar as investors realized the drop has been a “bit too overdone.” The local unit appreciated by eight centavos to close the week at 43.72 from a 17-month low of 43.80 last Thursday. Dollars traded reached $1.084 billion, down from $1.407 billion the previous day. During the day, the peso traded within a range of 43.63-44.17, the upper end being the weakest since February 2011. “We actually saw the Indian rupee and the Thai baht also appreciate. I guess investors have realized (the drop) was already a bit too overdone,” Emilio Neri Jr., lead economist at the Bank of the Philippine Islands, said in a phone interview. “Investors who are not carried away by emotions and by a rather emotional environment are able to distinguish the countries that are fundamentally supported,” he added. Financial markets around the globe have been rattled since Thursday by pronouncements from US Federal Reserve Ben Bernanke that stimulus measures will be scaled down “later this year.” Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Earlier on Friday, the Bangko Sentral ng Pilipinas (BSP) reiterated that the economy, which expanded by 7.8 percent in the first quarter, remains one of those countries with “positive story” that should keep the peso afloat. As of Friday, the peso, Asia’s second best performer last year, has already weakened by 6.5 percent Read More …

Phl posts $75-M BOP surplus

Economy

Jun 192013

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.

Interest rates seen staying at lowest levels

Economy

Jun 162013

Interest rates seen staying at lowest levels

MANILA, Philippines – Interest rates are expected to remain at their lowest levels this year as the current market sell-off, the worst since 2008, remains manageable thanks to the country’s strong fundamentals. On Thursday, the Bangko Sentral ng Pilipinas (BSP) kept policy rates steady at 3.5 percent and 5.5 percent for overnight borrowing and lending, respectively. It also held the rate it charges on special deposit accounts (SDA) at two percent. Policy rates – which serve as benchmark for banks in charging their loans – have been maintained at their historic low levels since October last year, with the BSP choosing to reduce SDA rates by a total of 150 basis points earlier this year to push out more funds into the system and support economic growth. “It’s neutral for now. It’s both hard to say at this point whether this is the end of the cuts or is just a pause at the end of the year,” BSP Governor Amando Tetangco Jr. told CNBC in a televised interview, adding that “if it is needed, we have scope to further ease.” For analysts, the decision – which one described as a “disappointment” – was a show of strength from the BSP, which has successfully maneuvered the country from the global financial crisis five years ago to help it become Asia’s fastest growing economy now. “There were economic reasons for the BSP to pursue another SDA reduction, but it chose to pause,” said Emilio Neri Jr., lead economist at the Bank Read More …

Consumer confidence hits record high

Economy

Jun 142013

MANILA, Philippines – Consumer confidence has hit record high this quarter as the country’s strong economic growth is expected to translate to more investments, more hiring and higher salaries, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. According to the results of the Consumer Expectations Survey, the overall confidence index (CI) climbed to -5.7 percent for the next quarter from -11.2 percent in the previous three months. The current CI – although still negative – is the highest since the BSP survey began in the first quarter of 2007, central bank assistant governor Ma. Cyd Tuaño-Amador told reporters in a briefing. A negative result in the index indicates the pessimists outnumber the optimists “although the margin between the two declined to its lowest ever,” she said. Rosabel Guerrero, director of the BSP’s department of economic statistics, attributed the result to “better job opportunities, increased investment inflows that would support job creation and salary increases.” “Consumers also cited the country’s strong macroeconomic fundamentals and the investment grade credit rating by Fitch Ratings as factors that contributed to their more bullish outlook,” she told reporters. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The local economy expanded 7.8 percent in the first three months of the year, surpassing market expectations to become Asia’s fastest growing economy. This was achieved against the backdrop of a slow three-percent inflation. Slow inflation and a “stable” foreign exchange rate give consumers more purchasing power to spend for goods and services, in addition to public savings. Read More …

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