- Business

Nov 252016

MANILA, Philippines – There was little to no improvement in revenue collections during the first three months of the Duterte administration when compared to economic performance because of transition, government data showed.

For the first nine months, national government revenues accounted for 13.2 percent of gross domestic product (GDP), down from 13.9 percent a year ago.

Broken down, taxes cornered 11.8 percent of GDP, just slightly above 11.7 percent last year. The targets for the year are 15.5 and 14.1 percent, respectively.

The figures represent the revenue and tax efforts of the government which reflect the amount of revenues collected as the economy expands.

Theoretically, more revenues should be collected as economy grew faster at seven percent as of the third quarter. But Finance Assistant Secretary Ma. Teresa Habitan said this was not the case.

“We should give chance to the new government to perform,” Habitan said in a phone interview yesterday.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

“This is still because of transition,” she added.

Emilio Neri Jr., lead economist at Bank of the Philippine Islands, agreed. “Three months is too soon to be able to say they are in normal mode already,” Neri said by phone.

By agency, collections by the Bureau of Internal Revenue (BIR) accounted for 9.4 percent of economic output from 9.3 percent a year ago.

The Bureau of Customs, meanwhile, posted a similar 2.3 percent revenue effort for the period, data showed.

Both Habitan and Neri agreed that BIR is a key agency to watch for considering it accounts for more than 80 percent of tax revenues.

“There is really no gauge by how much you should collect, but compared to our neighbors like Thailand, we should be able to collect more,” Habitan said, citing higher value-added tax (VAT) in the country but same VAT revenues to Thailand.

Neri, for his part, said BIR should have collected more during the first three months of President Duterte.

“Oil prices bounced back this year from last year so there should have been better VAT collections on oil as well as other taxes in Customs,” he said.

“But so far, it has not translated to a significant improvement in revenues,” Neri said.

Instead, Neri said the Duterte government “kept true to its word” to spend more with 14.9 percent disbursement ratio and a deficit accounting for 1.7 percent of GDP.

In the same period last year, spending was at 14.08 percent, while deficit was only 0.22 percent. The deficit cap for the year is set at 2.7 percent.

“They really learned to spend faster than to collect (revenues). They really spent quickly,” Neri said.

He however warned that while spending fast is good, revenues should catch up as this may result into budget constraints. “Maybe some time should be given to observe if the shortfalls are really as a result of adjustment,” he said.

Nov 252016
Expanded Bat-Man sole energy project in PPP pipeline

MANILA, Philippines – A Single energy project is expected under the public-private partnership (PPP) program, which is an expanded version of the earlier Batangas-Manila Natural Gas Pipeline project, the PPP Center’s top official said. The Bat-Man project is still being processed under the PPP program, PPP Center executive director Ferdinand Pecson said in an interview on the sidelines of the Global Investment Forum. “For now, coming from the DOE, there is one energy-related project. It’s not about power generation, it’s about transmission of natural gas,” he said. The Department of Energy (DOE) previously said it is looking at other options in getting the project off the ground. But in the recent sit-down between the PPP Center and DOE, Pecson said the DOE is revising the scope of the original P10.528-billion Bat-Man project, which will include not only the pipeline but also the regassification facility for natural gas. “Actually, what the DOE has to decide about…is the scope that they now want to have for this project. Before, it’s just a pipeline, now they said they actually want to go further upstream and include the facility or the plant that would take in the raw material and process this into gas that would then be distributed,” he said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 In the original plan, the Bat-Man is a 121-kilometer transmission pipeline that will transport and supply natural gas from Batangas to Metro Manila. However, forming a fuel mix policy is critical in realizing the Read More …

Nov 252016
SEIPI bats for natural gas vs coal in power generation

MANILA, Philippines – The Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) is batting for a shift toward natural gas as a main source of power to replace coal, citing its competitive edge in terms of cost and environmental impact. “One of the major challenges faced by the electronics industry is the high cost of power, which is the second worst in Asia,” SEIPI president Dan Lachica said. He said the high power costs remain among the biggest problems for the country’s electronics industry, which produces its top export. Given the persisting concerns on high power cost, SEIPI welcomed the recent inauguration of the new natural gas-fired power plants owned by First Gen Corp., which the group said would provide much needed additional generating capacity to the Luzon grid. The group said natural gas is the best alternative to coal which is currently the cheapest source of power. Lopez-led First Gen switched on its 414-megawatt (MW) San Gabriel combined-cycle and 97-MW Avion open cycle natural gas-fired power plants in Santa Rita, Batangas on Nov. 11. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “The additional 511 MW from these natural gas power plants is a welcome development for our Philippine electronics industry,” Lachica said. For this year, electronics exports are seen returning to record levels should it finish on the higher end of industry growth targets. SEIPI is targeting a two to five percent jump in electronics exports this year. Hitting a five percent growth, according to Lachica, Read More …

Nov 252016
How to increase your LQ Part 1

Mrs. Santos is a very wealthy business woman and she had to go to her annual check up. Her doctor is efficient, but has a reputation of being too direct. After an hour or so, the doctor looks at Mrs. Santos and says the following: “Mrs. Santos, overall you are very healthy for a 45 year old. There is, however, only one problem. You are 40 pounds overweight and bordering on obese. I would strongly suggest you diet now to save any complications in later years.” She looks sternly at him and says, “I demand a second opinion.” “OK” he says as his anger begins to show, “you’re rottenly ugly as well!” One thing I can assure you is that this doctor will never win any popularity contest. There are people who are good with their craft, but the problem is they are not well liked and this is not a good thing. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 While their craft is still needed and marketable, they may get away with their rudeness. But once another option offers itself, they will quickly lose their business. LQ today is added to IQ and EQ as I keep on emphasizing in my talks, trainings and seminars. We are quite familiar with IQ as it means Intelligence Quotient. EQ got its popularity a few years back and is known as Emotional Quotient. LQ, however, is still mistaken as “Lover’s Quarrel” as many of the young people would say, but Read More …

Nov 252016
Market sustains uptrend on bargain hunting

The benchmark Philippine Stock Exchange index (PSEi) moved up 16.47 points, closing at 6,889.78. However, despite the gains, the PSEi remained below the 7,000 mark. File photo MANILA, Philippines – Bargain hunting, as well as early month-end window dressing, helped sustain the stock market’s upward trend at the end of the trading week, analysts said yesterday. The benchmark Philippine Stock Exchange index (PSEi) moved up 16.47 points, closing at 6,889.78. However, despite the gains, the PSEi remained below the 7,000 mark. The broader All Shares index was also up 5.9 points to 4,176.54.  All counters were down, except the property segment, which climbed 68.49 points to 3,072.98. The negative counters were led by mining and oil, which was down by 184.86 points or 1.48 percent. Total value turnover reached P4.84 billion. Advancers slightly outnumbered decliners at 94 to 90, while 47 issues were unchanged. Luis Limlingan, managing director at Regina Capital, attributed the rise in share prices to some bargain hunting, portfolio rebalancing and early window dressing. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Meanwhile, the peso finally ended a seven day losing streak gaining 14 centavos yesterday with the expected pick up in cash remittances from overseas Filipinos in time for the Christmas season. The local currency opened weaker and hit an intra-day low of 49.99 to $1 before hitting an intra-day high of 49.80 to $1. The peso briefly touched the 50 to $1 level last Thursday. The peso closed at 49.84 to $1 from Thursday’s Read More …

Nov 242016
ADB hikes Philippine growth forecasts

In a briefing yesterday during the Businessworld and Philippine Airlines Asean Regional Forum, ADB country economist Aekopol Chongvilaivan said the reason for the upward revision is the country’s better-than-expected economic growth in the third quarter of the year. MANILA, Philippines – The Asian Development Bank (ADB) has revised upward anew its economic growth projection for the Philippines to 6.8 percent for 2016 and 6.4 percent for 2017. This is ADB’s third revision after a revised 6.4 percent and 6.2 percent economic growth forecast for 2016 and 2017, respectively. The original forecast was six percent for 2016 and 6.1 percent for 2017. In a briefing yesterday during the Businessworld and Philippine Airlines Asean Regional Forum, ADB country economist Aekopol Chongvilaivan said the reason for the upward revision is the country’s better-than-expected economic growth in the third quarter of the year. “Basically, it’s because of the third quarter (performance). Growth is much higher than expected and export performance is much better than expected and this is supported by a weaker peso,” Chongvilaivan said. Exports rose to $5.211 billion in September from $4.960 billion a year ago, according to the Philippine Statistics Authority (PSA). On the other hand, Chongvilaivan said fourth quarter GDP may go down slightly due to the uncertain global economy. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “We expect to be slightly going down due to the uncertain global economy so we expect fourth quarter to slow down from the third quarter,” Chongvilaivan said. The Philippine economy grew Read More …

Nov 242016
Support our steel industry

In principle I am for free trade. It makes no sense to protect local industries that have failed to be competitive for decades. Foreign competition encourages domestic industries to become more efficient and this benefits local consumers. We have to avoid rent seeking that protects infant industries that never grow up. This is how the entrenched elite behind these non-competitive local industries use government protectionist policies to abuse domestic consumers. But we must stand up against unfair competition from foreign manufacturers. We must not allow them to threaten the viability of local industries that are showing a lot of promise and are already making headway. Dumping is one example of unfair trade. Dumping happens when imports are priced below reasonable manufacturing cost. China, for instance, subsidizes state owned manufacturers so they can afford to sell below production cost like what is happening in the steel industry. President Duterte has said time and again that he wants a strong steel industry to serve as the cornerstone of our industrialization program. But will his words turn into action in the face of unfair competition from China? The local steel industry is now asking President Duterte to stop smuggling and importation of dumped steel products from China. There has been a surge of rebars imported from China, even if there is sufficient local manufacturing capacity. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Our steel industry is essentially steel rebar manufacturing that is slowly expanding to other products. Local industry capacity is Read More …

Nov 242016
Shakey’s IPO a go, says PSE

Po Sr. MANILA, Philippines – It’s all systems go for the stock market debut of pizza chain Shakey’s Philippines after the Philippine Stock Exchange (PSE) approved this week the company’s planned initial public offering (IPO), the final requirement for the listing scheduled on Dec. 15. “We already approved it,” PSE president Hans Sicat said yesterday. Earlier, Shakey’s Pizza Asia Ventures Inc (SPAVI), the leading full-service restaurant in the country owned by the Po family, also secured the approval of the Securities and Exchange Commission (SEC), the corporate regulator. SPAVI seeks to raise up to P5.5 billion from the IPO to be used for debt repayment, capital requirements and strategic acquisitions. According to the prospectus filed with the SEC, the company will sell up to 352 million primary and secondary shares, including an over allotment of 46 million shares to cater for extra demand. SPAVI has set a maximum price of P15.58 each with the final price setting date scheduled on Nov. 28. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The offer period will run from Dec. 2 to 8, according to underwriter BDO Capital & Investment Corp. Filipino-Chinese businessman Ricardo Po Sr., the family patriarch, has said the company is proceeding with the listing on Dec. 15 despite the perceived market volatility. “We will proceed with the listing as scheduled. The investors are all interested,” Po told The STAR. SPAVI is majority owned by the Po Family’s Century Pacific Group Inc (CPGI), parent company of Philippine listed Century Read More …

Nov 242016
Peso breaks 50:$1 barrier

The local currency shed 12 centavos to close at 49.98 from Wednesday’s 49.86 to $1. This was the weakest level since the peso closed at 49.99 to $1 on Nov. 20, 2008 or during the height of the global financial crisis. MANILA, Philippines – The peso briefly breached the 50 to $1 level yesterday, echoing the weakening of the regional currencies amid the release of minutes from a US Fed meeting indicating the agency is poised to raise interest rates next month. The peso opened weak at 49.86 before hitting an intra-day low of 50 to $1. The local currency shed 12 centavos to close at 49.98 from Wednesday’s 49.86 to $1. This was the weakest level since the peso closed at 49.99 to $1 on Nov. 20, 2008 or during the height of the global financial crisis. Trading volume increased 21.4 percent to $437.6 million from Wednesday’s $360.5 million due to strong demand. Finance Secretary Carlos Dominguez said the peso’s downtrend trajectory is an expected reaction of the local currency to the anticipated early rate increase by the US Fed, with other Asian currencies also moving in the same direction. “We are watching the currency movements very closely. We seem to be moving in the same direction as the other currencies. We just want to avoid abrupt changes in the exchange rates,” Dominguez said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 But he added the country’s rock solid macroeconomic fundamentals would enable the domestic economy to survive Read More …

Nov 242016
Bargain hunters boost share prices

Bargain hunters continued to lift the stock market yesterday, sustaining Wednesday’s gains and reversing the downward trend last Monday and Tuesday. AP Photo/Bullit Marquez MANILA, Philippines – Bargain hunters continued to lift the stock market yesterday, sustaining Wednesday’s gains and reversing the downward trend last Monday and Tuesday. The benchmark Philippine Stock Exchange index (PSEi) grew 36.67 percent to 0.54 percent to finish at 6,873.31, while the broader All Shares index gained 21.54 points or 0.52 percent to finish at 4,170.64. Most indices ended in positive territory led by mining and oil counter which gained 271.06 points or 2.23 percent. Total value turnover reached P6.17 billion. Advancing stocks outnumbered decliners, 113 to 65 while 47 stocks were left unchanged. Analysts said bargain hunting perked up yesterday’s trading session. Among the top gainers during yesterday’s session are Oriental Peninsula Resources (up 17.80 percent to P1.39), Dizon Copper Silver Mines Inc. (up 13.18 percent to close at P12.88), Bogo Medellin Milling  (up 11.11 percent to finish at P100) and Arthaland Corp. (up 10 percent to close at P0.33 percent). Business ( Article MRec ), pagematch: 1, sectionmatch: 1 However, despite the gains, the PSEi remained below the 7,000 mark. In an interview yesterday, Philippine Stock Exchange (PSE) president Hans Sicat said the market remains affected by global volatility. “It’s due to external factors,” Sicat said. Despite the volatility, he expressed optimism that fund raising activity through the local stock market remains a viable option for many companies.