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BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

STOCK MARKET, PESO PLUMMET DUE TO JAN 1st IRAN-SAUDI TENSIONS, FEARS OF CHINA SHOWDOWN


JANUARY 4 -Philippine Stock Exchange officials blow horns and ring the bell to mark the first day of trading in 2016. Shown during the bell-ringing ceremony at the PSE Plaza in Makati City are (from left) PSE director Alejandro Yu, president and chief executive Hans Sicat, chairman Jose Pardo, chief operating officer Roel Refran and Capital Markets Integrity Corp. president Cornelio Gison. EY ACASIO The peso and the stock market plunged Monday, weighed down by a flare-up in tensions between Iran and Saudi Arabia and fears about a slowdown in China. The peso dropped to 47.12 against the US dollar in the first trading day of 2016 from 47.06 last week, while the Philippine Stock Exchange Index plummeted 118.66 points, or 1.7 percent, to 6,833.42 on a value turnover of nearly P3 billion. Losers overwhelmed gainers, 120 to 42, with 36 issues unchanged. Chinese stocks also plunged, leading an Asian meltdown as more weak factory data fanned fears about a slowdown in the world’s number two economy. JG Summit Holdings Inc. of retail tycoon and industrialist John Gokongwei tumbled 4.1 percent to P70.30, while Philippine Long Distance Telephone Co., the biggest telecommunications firm, fell 2.9 percent to P2,000. SM Investments Corp. of retail tycoon Henry Sy dropped 2.6 percent to P841.50, while unit SM Prime Holdings Inc. lost 1.6 percent to P21.35. Ayala Land Inc., the second-largest property developer, decreased 1 percent to P34.10, while Megaworld Inc., the biggest lessor of office spaces, retreated 2.8 percent to P4.13. Authorities in China, meanwhile, suspended trading on its stock markets in the early afternoon after shares sank seven percent. The sharp losses revived memories of the summer rout that saw Shanghai crash about 40 percent and trillions of dollars wiped off valuations. The Shanghai market ended 6.9 percent lower while Shenzhen shed 8.2 percent. READ MORE..RELATED HEADLINE NEWS, Saudi Arabia-Iran row spreads to other nations...

ALSO: DBM releases budgets of all gov’t offices


JANUARY 5 -BUDGET SECRETARY ABAD
At least 90 percent of the 2016 appropriations of all departments and agencies of the national government was released yesterday, the first working day of the year, according to the Department of Budget and Management (DBM). “This huge improvement in the release of allotments is made possible with the new policy of treating the General Appropriations Act (GAA) as the release document. Once approved and in effect, all disaggregated items in the budget of all agencies are deemed effectively released,” said Budget Sec. Florencio B. Abad. “Together with the earlier policy adopted which authorized departments and agencies to advance pre-procurement activities that enable them to bid projects short-of-award, this policy will further accelerate the already much improved pace of government spending. It will also ensure that most projects will be implemented before the beginning of the election ban on March 25,” Abad explained. Abad added that the comprehensive release of the budget under the GAA-as-Release Document (GAARD) regime will not only promote faster implementation of programs and projects, it will also sustain the growth momentum from the fourth quarter of 2015 as procurement of infrastructure projects are fast-tracked. “While government underspending is a recurrent problem due to institutional weaknesses in agencies for the most part, the GAARD regime gives these agencies a head-start in their procurement activities and gives them much-needed momentum in terms of higher rates of obligation. READ MORE...

ALSO: PSE named SEA’s Best Stock Exchange for ’15


JANUARY 5 -Philippine Stock Exchange (PSE)
The new office is more than 500 square meters, a huge upgrade from our previous 198 sqm lot, located at the 32nd floor of PSEC still at the heart of Ortigas Business District. The Philippine Stock Exchange Inc. (PSE) was named the Best Stock Exchange in Southeast Asia for 2015 in the Marquee Awards of the 9th Alpha Southeast Asia Deal & Solution Awards. The Marquee Awards cited various accomplishments for conferring the award to the PSE including the Exchange’s corporate governance programs and the shift to the PSEtrade XTS trading engine which was accomplished in 11 months, much shorter than the two years it took during the last adoption of a new trading system. It also mentioned the stellar climb of the PSE index (PSEi) to the 8,000 level in April 2015 as well as the capital raising activity in the Exchange. “We are grateful that our efforts to improve our services and corporate governance initiatives were recognized by Alpha Southeast Asia and the third-party participants surveyed for this award,” said PSE president and CEO Hans Sicat. READ MORE...

ALSO: More automakers seen switching to e-vehicles


JANUARY 10 -Electric Vehicle Association of the Philippines (EVAP)
The Electric Vehicle Association of the Philippines (EVAP) said the move towards the use of environment-friendly vehicles is running at full speed globally as more electric vehicles are set be introduced this year.
“Finally, the big names in the auto industry are joining the electric vehicle bandwagon. Mainstream auto manufacturers are now betting big on electric vehicles as climate change mitigation is becoming a priority agenda among developed nations after the Paris Summit where several major countries agreed on a reduction in global temperature by two degrees,” EVAP said. According to EVAP, several major automotive companies are finally launching their electric cars to the public for sale and not just for lease as in the past. These include the Tesla Model S, BMW X5 eDrive, BMW Series 3 Plug In, VW Passat GTE Plug in, Audi A3 E-tron, Audi Q7 Plug In, Chevy Volt 2.0, Volvo XC90 T8, Volvo S60 Plug In, Mercedes Benz GLE, E and C class Plug in, Mitsubishi Outlander Plug In, BYD Tang and Rimac Concept One. “It is understandable that big manufacturers will be quite slow on the uptake since they have already invested heavily in the old internal combustion engines technology which has not drastically changed during the last 100 years. It is now common knowledge that electric vehicles are more economical to operate since electricity worldwide is cheaper than petroleum products and EVs are virtually almost maintenance free,” the EVAP said. THE FULL REPORT

ALSO: By Gerardo Sicat - The Philippine economy and Benigno Aquino III’s presidency, 2010-2016
[Problems and challenges. Though the overall picture looks bright and promising, still, there are many problems and challenges that await attention. A full assessment of sector issues awaits discussion next week.]


JANUARY 6 -By Gerardo P. Sicat
We are now in the last six months of the presidency of Benigno Aquino III. Final evaluation of his administration’s impact on the nation is premature. However, it is now possible to assess where the present administration has taken the economy and, in consequence, the nation. Judging the economy. There are many ways by which we may judge the economy’s performance. One way of assessing the economy is to focus on macro-trends and performance: what has happened to overall growth, fiscal and monetary policy, trade payments and saving and investment. I intend to do this today. A second way to focus on the economy is to point out deficiencies and gaps in performance. Shortcomings could highlight weaknesses that need correction. This type of assessment will be made next week. Growth. The gross domestic product (GDP) grew by an average of 6.5 percent up to 2015. Because of the election year spending in 2016, the growth rate of 6.5 percent could even be exceeded. However, world economic conditions continue to be uncertain and volatile, and less optimism is warranted. With the population growth rate of around two percent per year during this period, per capita output has grown by 4.5 percent. This is a substantial record of per capita growth for a sustained period in Philippine economic history. Such record of growth in current years has been outstanding in the context of East and Southeast Asia. The Philippine performance marks a bright spot in a fairly depressed economic world in this decade. Drivers of growth. The main drivers of growth have provided a flow of incomes to stimulate consumption expenditures. These growth drivers are led by OFW remittances and earnings from the expanding BPO (business process outsourcing) industries. OFW remittances have grown from $20 billion in 2010 to almost $30 billion by 2015. BPO earnings have surged and are moving close to the same magnitudes of OFW remittances. Both have strengthened the balance of payments that served to sustain the growth of domestic consumption demand. The success of BPO service exports has made the country into a leading provider of this service to the international economy. BPO enterprises are high users of labor. They employ many young, skilled university graduates. Rapid expansion of the BPO sector has fuelled the rise of domestic demand for goods and services of wage earners residing in the country in contrast with Filipino workers living abroad. These two growth drivers stimulate the economy further through the multiplier process, which simply means the initial expenditures based on incomes derived from them further induce other economic activities to flourish. Thus, they have caused a rising demand for consumption expenditure. They also stimulated a sustained boom in commercial and housing construction. Evidence of this is the continuous changing face of greater Manila and other major urban centers in the country where BPO centers are getting established. These drivers of economic growth are not new. They happened during earlier political administrations. The income base from OFWs had been a growing source of income support for decades now. The BPO industries got started during the presidency of Gloria Macapagal Arroyo. Aquino’s government continued and further strengthened that trend. Macro fundamentals. The key macroeconomic relationships worked well together. Fiscal, monetary, and trade payments cooperated to produce a stable economic environment. Despite the relatively hostile external environment during this period, the drivers of Philippine growth led to a strong balance of payments position, yielding current payments surpluses that raised national saving. The monetary authorities harnessed the current payments surpluses (close to five percent of GDP) by holding inflation to a level within the target range of three to five percent per annum. Moreover, they were able to keep interest rate levels sufficiently low to encourage investments. The central bank strictly kept the banking system at a high level of capital adequacy in conformity with sound banking standards. Hence, the banking system has been kept in a healthy position capable of withstanding any potential financial pressures. Frugal government spending has kept the fiscal deficit to a small level. Though there is a fiscal deficit, the government’s fiscal position has been in “primary surplus” meaning tax revenues were kept ahead of total expenditures net of interest payments for debt. A primary surplus is a good sign. It signals the capacity of the fiscal system to liquidate its debt. Sovereign credit worthiness improved. READ MORE...


READ FULL MEDIA REPORTS HERE:

Stock market, peso plummet


Philippine Stock Exchange officials blow horns and ring the bell to mark the first day of trading in 2016. Shown during the bell-ringing ceremony at the PSE Plaza in Makati City are (from left) PSE director Alejandro Yu, president and chief executive Hans Sicat, chairman Jose Pardo, chief operating officer Roel Refran and Capital Markets Integrity Corp. president Cornelio Gison. EY ACASIO

MANILA, JANUARY 11, 2016 (PHILSTAR) posted January 04, 2016 by The Standard Business - The peso and the stock market plunged Monday, weighed down by a flare-up in tensions between Iran and Saudi Arabia and fears about a slowdown in China.

The peso dropped to 47.12 against the US dollar in the first trading day of 2016 from 47.06 last week, while the Philippine Stock Exchange Index plummeted 118.66 points, or 1.7 percent, to 6,833.42 on a value turnover of nearly P3 billion.

Losers overwhelmed gainers, 120 to 42, with 36 issues unchanged.

Chinese stocks also plunged, leading an Asian meltdown as more weak factory data fanned fears about a slowdown in the world’s number two economy.

JG Summit Holdings Inc. of retail tycoon and industrialist John Gokongwei tumbled 4.1 percent to P70.30, while Philippine Long Distance Telephone Co., the biggest telecommunications firm, fell 2.9 percent to P2,000.

Philippine Stock Exchange officials blow horns and ring the bell to mark the first day of trading in 2016. Shown during the bell-ringing ceremony at the PSE Plaza in Makati City are (from left) PSE director Alejandro Yu, president and chief executive Hans Sicat, chairman Jose Pardo, chief operating officer Roel Refran and Capital Markets Integrity Corp. president Cornelio Gison. EY ACASIO SM Investments Corp. of retail tycoon Henry Sy dropped 2.6 percent to P841.50, while unit SM Prime Holdings Inc. lost 1.6 percent to P21.35.

Ayala Land Inc., the second-largest property developer, decreased 1 percent to P34.10, while Megaworld Inc., the biggest lessor of office spaces, retreated 2.8 percent to P4.13.

Authorities in China, meanwhile, suspended trading on its stock markets in the early afternoon after shares sank seven percent.

The sharp losses revived memories of the summer rout that saw Shanghai crash about 40 percent and trillions of dollars wiped off valuations.

The Shanghai market ended 6.9 percent lower while Shenzhen shed 8.2 percent.

READ MORE...

Markets across Asia were stung by the losses, as well as news that Saudi Arabia had severed diplomatic ties with its old foe Iran Sunday after protesters ransacked its embassy in Tehran following the execution of a Shiite cleric.

Riyadh gave Iranian diplomats two days to leave the kingdom, while the supreme leader in Tehran said Saudi Arabia would face “quick consequences” for the execution.

The developments are the latest to inflame the region and join a list of negative news that hurt world markets over the past year, including China’s economic malaise, plunging oil prices and anaemic global growth.

“It’s going to be a testy start to the week,” said Angus Nicholson, a Melbourne-based market strategist at IG Ltd.

“The execution raises uncertainty about the oil price, with concerns and tensions in the Middle East, and that will be a real driving force.”

Investors fled to safe investments such as the US dollar and yen, sending stocks and emerging-market currencies falling. With AFP

--------------------------------------

RELATED FROM CNN WORLD NEWS

Saudi Arabia-Iran row spreads to other nations Catherine Shoichet-Profile-ImageMariano Castillo-Profile-Image By Catherine E. Shoichet and Mariano Castillo, CNN Updated 1:21 PM ET, Mon January 4, 2016 | Video Source: CNN

(CNN)The fallout of Saudi Arabia's execution of a Shiite cleric is spreading beyond a spat between the Saudis and Iranians, as other Middle East nations choose sides and world powers Russia and China weigh in.

Relations between Saudi Arabia and Iran -- two Middle Eastern powerhouses -- have deteriorated following Riyadh's execution of Shiite cleric Nimr al-Nimr Saturday.

Hours after the death sentence was carried out, protesters in Shiite-majority Iran attacked the Saudi Embassy in Tehran. The Saudis cut diplomatic relations with Iran over the attack on its embassy.

On Monday, the Saudi government announced that all flights to and from Iran are suspended, according to the Saudi Pres Agency. The suspension is effective immediately, and the country's civil aviation authorities will take steps to accommodate those with existing bookings to and from Iran, the press agency reported.

On Monday, Bahrain also announced it is severing diplomatic ties with Iran, citing Tehran's "blatant and dangerous interference" in Bahrain and other Arab countries.

The United Arab Emirates, meanwhile, announced it was "downgrading" its diplomatic relations with Iran. The UAE recalled its ambassador in Tehran and said it would also reduce the number of diplomats stationed in Iran, according to state news agency WAM.

The UAE "has taken this exceptional step in light of Iran's ongoing interference in internal (Gulf Cooperation Council) and Arab affairs that has recently reached unprecedented levels," a government statement said.

The diplomatic row spread to Africa, where Sudan -- a majority Sunni Muslim country -- expelled the Iranian ambassador and the entire Iranian diplomatic mission in the country. Sudan also recalled its ambassador from Iran.


Saudi, Bahrain, Sudan sever ties with Iran after execution Execution could deepen Mideast crisis. Why Saudi-Iran relations collapsed? Sunni vs. Shia explained

The Saudi government announced the Sudanese move, saying Sudan acted because of "the Iranian interference in the region through a sectarian approach."

Russia and China, two of the biggest geopolitical players in the hemisphere, released statements calling for restraint between Iran and Saudi Arabia.

"Moscow is concerned about escalation of the situation in the Middle East with participation of the key regional players," the Russian foreign ministry said Monday. Russia calls on the Saudis and Iranians to "show restraint and to avoid any steps that might escalate the situation and raise tensions including an inter-religious ones."

China's foreign ministry said it is paying close attention to the events and hopes "all parties can remain calm and restrained, use dialogue and negotiations to properly resolve differences, and work together to safeguard the region's peace and stability."

Signs of things to come? Referring to the attack on the Saudi Embassy in Tehran, Iranian foreign ministry spokesman Jaberi Ansari told the media Monday that Iran is committed to protecting diplomatic missions and reiterated that there were no Saudi diplomats harmed -- or even present -- during the attack.

"When it comes to protecting and also safeguarding and observing international commitments regarding protection of diplomatic missions, Iran naturally has taken proper action and will continue to do so," Ansari said.

He added that Iran had acted to hold accountable the perpetrators of the attack on the Saudi mission, but accused Riyadh of using the incident to inflame sectarian tensions between the two.

Saudi execution of Shia cleric threatens to deepen regional sectarian crisis

"The Saudi government is looking ... for some excuses to pursue its own unwise policies to further tension in the region," he said.

Saudi Arabia and Iran have long been at odds, but the comments come after Saudi Arabia kicked out Iran's diplomats, saying the attack was the last straw.

It's not uncommon for countries to boot officials when they're at odds, but analysts say Saudi Arabia's decision to sever diplomatic ties with Iran on the heels of al-Nimr's execution could be an ominous sign that something much more serious is in the offing.

"The diplomatic rupture between Saudi Arabia and Iran could easily spiral out of control," said Fawaz Gerges, chair of contemporary Middle Eastern studies at the London School of Economics.

Read more: Oil rebounds after Saudi Arabia cuts ties with Iran

Here are some key questions looming in light of the latest developments:

Could the diplomatic war of words boil over? It had -- even before Saudi Arabia announced its decision to cut ties with Iran, Gerges said.

"Their conflict is playing out on Arab streets big time," he said.

Already the two nations were on opposite sides of conflicts in Syria, Iraq, Yemen, Bahrain and Lebanon. Now, he said, the question is how much worse things might get.

"The situation is extremely volatile between the two most powerful states in the Gulf, Sunni-dominated Saudi Arabia and Shiite-dominated Iran. You have a war of words. You have war by proxies ... This really could get very ugly and dangerous in the next few weeks and next few months," Gerges said.

It's possible a more direct military conflict between Saudi Arabia and Iran could erupt, said retired Lt. Gen. Mark Hertling, a CNN military analyst.

"That's the key issue," he said. "This is spiraling very quickly."

Why are there tensions between Iran and Saudi Arabia? It's nothing new that the two countries aren't seeing eye to eye.

"Iran and Saudi Arabia are neither natural allies nor natural enemies, but natural rivals who have long competed as major oil producers and self-proclaimed defenders of Shia and Sunni Islam, respectively," University of South Florida Professor Mohsen M. Milani wrote in an analysis for CNN in 2011.

Both Saudi Arabia and Iran are painting themselves as victims as tensions between them escalate, Gerges said.

"What you have is not only a clash of narratives, you have basically a huge divide, a war by proxy, a cold war taking place between Saudi Arabia and Iran," he said. "It's a war about geopolitics. It's about power. It's about influence."

So why are things getting worse now? The latest flashpoint emerged after Saudi Arabia executed dissident Shiite cleric Nimr al-Nimr and dozens of others over the weekend.

Saudi Arabia executions spark protests in Iran


Following the execution of a prominent Shiite cleric in Saudi Arabia, Saudi and Iranian officials continue to trade barbs as relations between the two Middle Eastern powerhouses deteriorate. New York Times reports.

Saudi Arabia executions spark protests in Iran 02:23 It wasn't long before protesters attacked the Saudi embassy in Tehran, hurling Molotov cocktails and cheering as the building caught fire. Iran's Supreme Leader Ayatollah Ali Khamenei called for divine revenge against Saudi Arabia.

"It was almost inevitable that this (the severing of diplomatic relations) would follow, especially since the response from Iran, completely expectedly, was full of rage, and Iran's supreme leader essentially summoned the wrath of God against Saudi Arabia," said Bobby Ghosh, a CNN global affairs analyst and managing editor of Quartz.

But analysts say looking within Iran and Saudi Arabia gives a greater understanding of why both countries have an interest in fueling the rivalry.

"There are domestic reasons for both of these countries right now to refuse to pull punches against each other," said Ian Bremmer, president of the Eurasia Group consulting firm.

Saudi Arabia, he said, is dealing with plummeting oil prices and an internal succession battle over who will next take the throne.

Saudi Arabia drops generation in succession

Saudi Arabia drops generation in succession 02:44 Iran, he said, needs a way to block reformists and Western advances in light of the recent nuclear deal. For both sides, he said, nationalist behavior can score points at home.

"That," Bremmer said, "makes this an incredibly dangerous conflict."

What can we expect to see in the coming days? Don't expect the heated rhetoric to die down any time soon, analysts said.

"This is Saudi Arabia saying, 'The gloves are off,'" Ghosh said.

Gerges said that could ripple across the region.

"We were hoping that a diplomatic solution could be found to the Syrian crisis in the next few months. Forget about it," he said.

"We were hoping for a diplomatic solution in Yemen. Forget about it. ... Here, you have the two most powerful Islamic states in the heart of the Middle East now basically waging a direct confrontation, as opposed to an indirect war by proxy, so ... we should be really alarmed at the escalation of the confrontation."

CORRECTION: A previous version of this story incorrectly identified the country that executed Shiite cleric Nimr al-Nimr. Saudi Arabia executed him. CNN's Merieme Arif, Kevin Wang, Mohammed Tawfeeq, Alla Eshchenko, Jonathan Mann, Jim Sciutto and Yousuf Basil contributed to this report.


TRIBUNE

DBM releases budgets of all gov’t offices Written by Tribune Wires Tuesday, 05 January 2016 00:00


BUDGET SECRETARY ABAD

At least 90 percent of the 2016 appropriations of all departments and agencies of the national government was released yesterday, the first working day of the year, according to the Department of Budget and Management (DBM).

“This huge improvement in the release of allotments is made possible with the new policy of treating the General Appropriations Act (GAA) as the release document. Once approved and in effect, all disaggregated items in the budget of all agencies are deemed effectively released,” said Budget Sec. Florencio B. Abad.

“Together with the earlier policy adopted which authorized departments and agencies to advance pre-procurement activities that enable them to bid projects short-of-award, this policy will further accelerate the already much improved pace of government spending.

It will also ensure that most projects will be implemented before the beginning of the election ban on March 25,” Abad explained.

Abad added that the comprehensive release of the budget under the GAA-as-Release Document (GAARD) regime will not only promote faster implementation of programs and projects, it will also sustain the growth momentum from the fourth quarter of 2015 as procurement of infrastructure projects are fast-tracked.

“While government underspending is a recurrent problem due to institutional weaknesses in agencies for the most part, the GAARD regime gives these agencies a head-start in their procurement activities and gives them much-needed momentum in terms of higher rates of obligation.

READ MORE...

This results in faster delivery of public goods and services, which will be to the benefit of our people,” Abad said.

The budget chief said that infrastructure projects are expected to be accelerated with the Department of Public Works and Highways (DPWH) targeting an obligation rate of 50 percent within the first quarter of the year.

“We can expect 50 percent of infrastructure projects under the DPWH to be issued notices of award by the first quarter of 2016. This amounts to almost P187.86 billion, and is higher than their actual obligation rate of 39 percent, or P111.14 billion, within the same period last year,” Abad said.

The government is poised to complete key infrastructure projects this year, including 98 percent of 364,693 lineal meters of bridges and 85 percent of 32,526.50 kilometers of roads.

The government has significantly increased total infrastructure spending in the last five years, from P175.4 billion in 2011 (or 1.8 percent of the GDP) to P766.5 billion this year to achieve the international benchmark of five percent of the GDP.

Abad said this increase in spending is complemented by encouraging public-private partnerships, improving governance to curb corruption, climate-proofing facilities, and improving procurement.

Abad also said he is optimistic that the growth momentum will continue from the fourth quarter of 2015, which he predicts will be a better one than the three previous quarters.

“December 2015 spending will continue the momentum that the previous five months demonstrated. In addition, the spending boost for last-minute Christmas sales will further ramp up growth in the last month of the year,” he said.

Abad noted the drivers in the first semester of 2016 will be the following: issuances of notices of award and notices to proceed for projects that benefited from pre-procurement activities in the second semester of 2015; the great sense of urgency to implement projects before the March 25 election ban; additional consumption push due to the Jan. 1 effectivity of the Salary Standardization Law of 2015; spending in the run up to, during, and after the May local and national elections; and further spending boost from the preparation for the opening of classes in June.

The latter will be highlighted by the first-year implementation of the K-to-12 program (with thousands more teachers and non-teaching personnel being hired), and the educational contracting program Government Assistance to Students and Teachers in Private Education (GASTPE) being expanded to more than a million students.


TRIBUNE

PSE named SEA’s Best Stock Exchange for ’15 Written by Tribune Wires Tuesday, 05 January 2016 00:00


Philippine Stock Exchange (PSE)
The new office is more than 500 square meters, a huge upgrade from our previous 198 sqm lot, located at the 32nd floor of PSEC still at the heart of Ortigas Business District.

The Philippine Stock Exchange Inc. (PSE) was named the Best Stock Exchange in Southeast Asia for 2015 in the Marquee Awards of the 9th Alpha Southeast Asia Deal & Solution Awards.

The Marquee Awards cited various accomplishments for conferring the award to the PSE including the Exchange’s corporate governance programs and the shift to the PSEtrade XTS trading engine which was accomplished in 11 months, much shorter than the two years it took during the last adoption of a new trading system.

It also mentioned the stellar climb of the PSE index (PSEi) to the 8,000 level in April 2015 as well as the capital raising activity in the Exchange.

“We are grateful that our efforts to improve our services and corporate governance initiatives were recognized by Alpha Southeast Asia and the third-party participants surveyed for this award,” said PSE president and CEO Hans Sicat.

READ MORE...

The PSE was selected as winner of the Marquee Awards through a survey of issuers and investors in the Southeast Asian region.


Philippine Stock Exchange (PSE) president and CEO Hans B. Sicat (middle) was awarded as one of the country’s industry leaders who used excellent communication as a business strategy in the CEO (Communication Excellence in Organizations) Excel Awards 2014 conferred by the International Association of Business Communicators (IABC) Philippines on Monday (September 8, 2014). PHOTO NEWS FROM BALITA ONLINE PUBLISHED September 9, 2014 5:03 am

The award-giving body cited that, “PSE spent a large part of the year continuously pushing the boundaries and is now striving to encourage world-class standards of disclosure and corporate governance among its listed companies in the Philippines.”

Meantime, according to a fund manager who is part of the panel of the in-house Marquee Awards at Alpha Southeast Asia, “The performance of the equity market irrefutably underscores how the Philippines’ equity market has been partially insulated from global volatility as it is dominated not only by local investors and a large domestic pension fund system but also foreign investors who now strongly believe in the investment fundamentals of the Philippines.

One of many reasons why foreign investors have remained comfortable investing in the Philippines is due to its pro-disclosure stance from the ground up.”

The Marquee Awards also noted that, “Investors acknowledge the upside for PSE remains high as it has the strongest potential for growth in 2016 given the solid economic fundamentals of the country as the global economic outlook improves and investors return to what is increasingly known as the safest haven in Asia with improving investment prospects for foreign and institutional investors.”


PHILSTAR

More automakers seen switching to e-vehicles By Richmond S. Mercurio (The Philippine Star) | Updated January 10, 2016 - 12:00am 1 3 googleplus1 0


Electric Vehicle Association of the Philippines (EVAP)

MANILA, Philippines – The Electric Vehicle Association of the Philippines (EVAP) said the move towards the use of environment-friendly vehicles is running at full speed globally as more electric vehicles are set be introduced this year.

“Finally, the big names in the auto industry are joining the electric vehicle bandwagon. Mainstream auto manufacturers are now betting big on electric vehicles as climate change mitigation is becoming a priority agenda among developed nations after the Paris Summit where several major countries agreed on a reduction in global temperature by two degrees,” EVAP said.

According to EVAP, several major automotive companies are finally launching their electric cars to the public for sale and not just for lease as in the past.

These include the Tesla Model S, BMW X5 eDrive, BMW Series 3 Plug In, VW Passat GTE Plug in, Audi A3 E-tron, Audi Q7 Plug In, Chevy Volt 2.0, Volvo XC90 T8, Volvo S60 Plug In, Mercedes Benz GLE, E and C class Plug in, Mitsubishi Outlander Plug In, BYD Tang and Rimac Concept One.

“It is understandable that big manufacturers will be quite slow on the uptake since they have already invested heavily in the old internal combustion engines technology which has not drastically changed during the last 100 years. It is now common knowledge that electric vehicles are more economical to operate since electricity worldwide is cheaper than petroleum products and EVs are virtually almost maintenance free,” the EVAP said.


PHILSTAR OPINION

The Philippine economy and Benigno Aquino III’s presidency, 2010-2016 CROSSROADS (TOWARD PHILIPPINE ECONOMIC AND SOCIAL PROGRESS) By Gerardo P. Sicat (The Philippine Star) | Updated January 6, 2016 - 12:00am 0 0 googleplus0 0


By Gerardo P. Sicat

We are now in the last six months of the presidency of Benigno Aquino III. Final evaluation of his administration’s impact on the nation is premature.

However, it is now possible to assess where the present administration has taken the economy and, in consequence, the nation.

Judging the economy. There are many ways by which we may judge the economy’s performance.

One way of assessing the economy is to focus on macro-trends and performance: what has happened to overall growth, fiscal and monetary policy, trade payments and saving and investment. I intend to do this today.

A second way to focus on the economy is to point out deficiencies and gaps in performance. Shortcomings could highlight weaknesses that need correction. This type of assessment will be made next week.

Growth. The gross domestic product (GDP) grew by an average of 6.5 percent up to 2015. Because of the election year spending in 2016, the growth rate of 6.5 percent could even be exceeded. However, world economic conditions continue to be uncertain and volatile, and less optimism is warranted.

With the population growth rate of around two percent per year during this period, per capita output has grown by 4.5 percent. This is a substantial record of per capita growth for a sustained period in Philippine economic history.

Such record of growth in current years has been outstanding in the context of East and Southeast Asia. The Philippine performance marks a bright spot in a fairly depressed economic world in this decade.

Drivers of growth. The main drivers of growth have provided a flow of incomes to stimulate consumption expenditures. These growth drivers are led by OFW remittances and earnings from the expanding BPO (business process outsourcing) industries.

OFW remittances have grown from $20 billion in 2010 to almost $30 billion by 2015.

BPO earnings have surged and are moving close to the same magnitudes of OFW remittances. Both have strengthened the balance of payments that served to sustain the growth of domestic consumption demand.

The success of BPO service exports has made the country into a leading provider of this service to the international economy. BPO enterprises are high users of labor. They employ many young, skilled university graduates.

Rapid expansion of the BPO sector has fuelled the rise of domestic demand for goods and services of wage earners residing in the country in contrast with Filipino workers living abroad.

These two growth drivers stimulate the economy further through the multiplier process, which simply means the initial expenditures based on incomes derived from them further induce other economic activities to flourish.

Thus, they have caused a rising demand for consumption expenditure. They also stimulated a sustained boom in commercial and housing construction. Evidence of this is the continuous changing face of greater Manila and other major urban centers in the country where BPO centers are getting established.

These drivers of economic growth are not new. They happened during earlier political administrations. The income base from OFWs had been a growing source of income support for decades now. The BPO industries got started during the presidency of Gloria Macapagal Arroyo.

Aquino’s government continued and further strengthened that trend.

Macro fundamentals. The key macroeconomic relationships worked well together. Fiscal, monetary, and trade payments cooperated to produce a stable economic environment.

Despite the relatively hostile external environment during this period, the drivers of Philippine growth led to a strong balance of payments position, yielding current payments surpluses that raised national saving.

The monetary authorities harnessed the current payments surpluses (close to five percent of GDP) by holding inflation to a level within the target range of three to five percent per annum. Moreover, they were able to keep interest rate levels sufficiently low to encourage investments.

The central bank strictly kept the banking system at a high level of capital adequacy in conformity with sound banking standards. Hence, the banking system has been kept in a healthy position capable of withstanding any potential financial pressures.

Frugal government spending has kept the fiscal deficit to a small level. Though there is a fiscal deficit, the government’s fiscal position has been in “primary surplus” meaning tax revenues were kept ahead of total expenditures net of interest payments for debt. A primary surplus is a good sign. It signals the capacity of the fiscal system to liquidate its debt. Sovereign credit worthiness improved.

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In harmony with the robust balance of payments position, the strong fiscal position enabled the reduction of the debt burden on the economy. Some debt has been prepaid. Overall, the external debt burden on interest has been kept within safe limits.

(This benefit might reverse a little in the future, because of the expected rise of world interest rates in 2016 and in the future. The US central bank, by announcing the return toward adjusting the interest rates for reasons of monetary policy, has practically announced the future rise of world interest rates, even if only mildly.)

The tax effort has risen to 15 percent of GDP, thanks to tax reform measures and the improvement of tax administration.

The rise in the tax effort has correspondingly benefited sectors that have suffered from the tight fiscal budget in the past. Because of the low deficit level, there is more fiscal space for maneuver in terms of reallocations to critical sectors of the economy.

One of the major components of improvements has been on public education. The budget for education has risen from P175 billion in 2010 to P364 billion in 2014. This is a substantial rise in the educational budget. Even accounting for inflation, the real rise in the budget is significant

By the same token, the budget for the health sector has improved. In general, an improvement of public budget reallocation has favored the expansion of economic services and the social sectors.

Moreover, the share of public infrastructure investment to GDP has risen from a low level of two percent toward four percent. This low level of public infrastructure spending is one aspect that needs improvement, even though the record has improved recently.

Problems and challenges. Though the overall picture looks bright and promising, still, there are many problems and challenges that await attention.

A full assessment of sector issues awaits discussion next week.

My email is: gpsicat@gmail.com . Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/


Chief News Editor: Sol Jose Vanzi

 


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