© Copyright, 2015 (PHNO)
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BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

OIL PRICES SINK BELOW $32 FOR FIRST TIME IN 12 YEARS


January 12 -A Saudi employee fills the tank of his car with petrol at a station on in the Red Sea city of Jeddah. AFP PHOTO / AMER HILABI / AFP / AMER HILABI World oil prices fell below $32 a barrel on Monday for the first time in 12 years amid signs that Iran could be free to increase exports within weeks. In New York trade, US benchmark West Texas Intermediate for February delivery slumped $1.75 to $31.41 per barrel, a level last witnessed on December 23, 2003. European benchmark Brent North Sea crude for February delivery dropped $1.61 to $31.55 a barrel, a low last seen in April 2004. Prices had already plunged by 10 percent last week as concerns about China, the world’s biggest energy consumer, eclipsed a strong US jobs report. “At the moment not many people are expecting to see a significant rebound in oil, so prices are continuing to gush lower to multi-year lows as sentiment goes from bad to worse,” Gain Capital analyst Fawad Razaqzada told AFP. Analysts still had to weigh looming geopolitical risks — including the Saudi Arabia-Iran spat — against the prospects of new supply coming onto the market from Iran as sanctions are lifted. The European Union foreign affairs chief, Federica Mogherini, said Monday she expected the Iran nuclear deal to be implemented “rather soon” with Tehran on track to meet its pledge to put a bomb beyond its reach. “My expectations are that this day could come rather soon,” Mogherini said in Prague. “The implementation of the agreements is proceeding well, it’s encouraging,” she added. Implementation of the deal would lead to a lifting of economic sanctions on Tehran and possibly bring another one million barrels of oil per day onto the already flooded global market within months. FULL REPORT

ALSO: China-led Asian infrastructure bank opens for business


JANUARY 17 -Chinese President Xi Jinping applauds after unveiling a sculpture during the opening ceremony of the Asian Infrastructure Investment Bank (AIIB) in Beijing Saturday, Jan. 16, 2016. (AP Photo/Mark Schiefelbein, Pool)
BEIJING — China-led Asian Infrastructure Investment Bank officially opened for business on yesterday in Beijing after a formal ceremony led by Chinese President Xi Jinping.
Representatives from 57 member countries attended the opening ceremony, where China announced it would pledge $50 million to a special fund to prepare less developed countries for infrastructure projects. The United States and Japan are not members of AIIB, saying it is a rival to already existing multilateral banks such as the World Bank, but Beijing says the AIIB supplements existing institutions and will boost investments for infrastructure projects in Asia. The bank, intended to finance railways, cargo ports and other trade links, is a key part of Beijing's "One Belt One Road" outreach to extend China's economic influence in the region. Beijing has pledged to put up most of the bank's initial $50 billion in capital and says that total will rise to $100 billion. Chinese official Jin Liqun has been named the bank's first president. THE FULL REPORT, RELATED..Philippines Makes Last-Minute Decision to Join China-Led Asian Infrastructure Investment Bank...

ALSO By GERARDO SICAT: Shortcomings and gaps - Philippine economy and Aquino presidency, 2010-2016


January 13 -By Gerardo P. Sicat
After presenting the macroeconomic aspects of the economy during the Aquino years, I will now focus on the shortcomings and gaps. This leads us to a closer look at the quality and depth of the development process, to the exposition of problems lurking ahead. Not ‘inclusive’ enough. In the usual analysis of the main problems of the Philippine economy, the following are often cited as the most pressing: lack of employment opportunities, the low levels of income and productivity, and the reduction of poverty. As people participate and benefit from economic growth, the more they advance out of poverty. This is essentially what “inclusive” growth means. Though the Aquino administration has made inclusive growth a major goal, the fact remains it is an elusive goal because some existing policy problems remain unresolved. A most common criticism often cited is the lag the country suffers in attracting foreign direct investments. Large flows of foreign private capital that have caused rapid prosperity elsewhere have eluded the country. The reason behind this is an inherent restraint that is imbedded in foreign investment policy. Restrictive provisions in foreign investment attraction. In fact, President Aquino has been the stumbling block toward amending the restrictive economic provisions of the Constitution. Despite the efforts in the Congress and Senate to deal with this policy problem, he has thrown cold water on such a move. Moreover, his administration has widened the negative list that excludes foreign direct investment participation in the economy. Recent developments (such as rising wage costs in China) tend to help change the flow of foreign direct investments into the country. The factors that determine these flows emanate from outside conditions, not active policies pursued at home. In addition, the government needs to respond positively to issues often raised by various private chambers of commerce to handle outstanding investment concerns. A proper response requires consistency in the treatment of contracts and more speed in implementation of investment decisions. Slow implementation of investment projects. The highly touted public-private partnership (PPP) projects had taken too long to come off the pipeline, with much delay on the finalization of contracts and their implementation. Despite high fanfare, few infrastructure construction under the PPP have been realized. The result is that none of the major PPP projects are likely to be completed by the end of the Aquino administration. It is also noted that the contracting parties for most of the PPPs are confined to a very few of big, local companies. There is minimal participation of foreign direct investment in many PPPs. In general, there is desirability in bringing in foreign capital participation, in part to attract more risk capital being put in this area and to access foreign financing of these investments. The long delays in approval of PPP investment projects pipeline demonstrates the government’s lack of focus and sense of emergency in the building public infrastructure. The Philippine economy requires an investment-driven growth. But what the Aquino government has achieved is a consumption-led growth. READ MORE...

ALSO: SHAKEY CHINA ECO - PH STOCKS SLIGHTLY UP; GLOBAL MARKETS REMAIN CAUTIOUS


JANUARY 15 -Global markets remained cautious slumped in four-year lows yesterday with investors largely unconvinced on how well China will manage its economic slowdown.
“Investors are still concerned about the extent of China’s slowdown and while we may be in the middle of a consolidation phase, we have yet to see any data indicating a turnaround which is feeding the overall uncertainty,” said Ben Pedley, head of investment strategy for Asia at HSBC Private Bank in HongKong. Most Southeast Asian stock markets recovered yesterday with the Philippines up more than half a percent, giving up earlier gains of 1.4 percent from Monday’s 4.4 percent drop. HSBC upgraded the Philippines to “overweight,” partly reflecting a decline in market valuations and robust domestic demand in an election year. The Jakarta composite index advanced 1.2 percent, rebounding from a near four-week closing low on the day before. Gains in Malaysia and Vietnam were relatively small, while Singapore and Thailand retreated from early highs. Investors in most parts were more reluctant to chase share prices, according to brokers. Asian shares as measured by MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2 percent, while China stocks rose as financial stocks bounced and the offshore yuan strengthened on suspected state bank intervention. Thai PTT Exploration and Production and Singapore’s Keppel Corp. were among top large cap losers as weak crude oil prices dented sentiment. “Market gains should be limited by continued concerns about a shaky Chinese economy and weak oil prices. There is no real new local catalyst to bolster the SET at the moment,” said broker Asia Wealth Securities in Bangkok. The Philippine Stock Exchange index (PSEi) was up 42.29 points to 6,330.55, a 0.67 percent hike. The broader all shares index was up 17.49 points to 3,645.46, a 0.48 percent hike. Gainers edged losers 102 to 95 with 139 stocks unchanged. Trading turnover reached P4.59 billion. Brokerage firm SB Equities, Inc. noted the market’s recovery happened against the backdrop of continued weak signals from regional markets as selling pressure persists. Bargain hunting ruled the market, it said, “as many issues have already signaled entry to oversold levels.”  READ MORE...

ALSO: PAL firms up $1-B deal for 6 long-haul aircraft


JANUARY 15 -Airbus 350
Philippine Airlines (PAL) expects to sign the $1 billion purchase agreement next month for six long-haul aircraft.
PAL president and chief operating officer Jaime Bautista told reporters in a chance interview the flag carrier has already made a decision on the new long-haul aircraft to be acquired and would likely sign the deal by February. “We’ll make the announcement when we sign the purchase agreement,” he said noting the deal would cover aircraft, aircraft parts and support equipment. The airline is planning to acquire six aircraft for its long-haul flights. The new long-haul aircraft would replace the Airbus 340s which are costlier to maintain and consume more fuel. PAL is choosing between Airbus 350 and Boeing 787 to serve its long-haul routes. Since October last year, PAL’s flights from Manila to New York have been using the Boeing 777-300 aircraft.Bautista said passengers of the Manila-New York flights have given positive feedback on the shift to the Boeing 777-300 aircraft from the Airbus 340 planes. Earlier, Bautista said PAL is also set to spend around $500 to $700 million for the delivery of seven other aircraft this year. In particular, the amount will be spent for five A321 aircraft and two Boeing 777-300 ER this year. The PAL Group, including low cost carrier unit PAL Express, has a fleet of more than 76 aircraft. THIS IS THE FULL REPORT. RELATED, PAL to fly to Kuwait...

ALSO: By Roberto Romulo - Aquino legacy


JANUARY 15 -By Roberto R. Romulo
I have always been consistent in wanting and rooting for the President to succeed. His administration has achieved notable successes in key areas, but has also been marked by abject failure in certain meaningful areas. Nearing the end of his term, I have not quite decided whether his administration is a glass that is half-full or is half-empty. So rather than presenting a comprehensive ledger of credits and debits of his administration’s performance, I will highlight what I think is the administration’s greatest success, from the narrow perspective of my advocacy for better public health as key to our economic development. And also of its greatest failure, the Department of Transportation and Communication. At the end of the day, between these two opposite ends of the pole, what would be the more enduring perception of the Aquino presidency? Reproductive Health and Sin Taxes Although the jury is still out, I believe President Aquino’s successful support of the legislations on Reproductive Health (RH) and on the so-called Sin Taxes are historic milestones that has placed us on a path towards addressing two impediments to our economic development – unsustainable population growth and a healthy generation of drivers of our society. In both these landmark initiatives, the President had to take on powerful traditional stakeholders – the Church and the tobacco industry – something which his predecessors were reluctant to do. The RH law addresses the issue of the lack of access to RH services – of which is less about giving contraceptives and more about responsible parenting – that have been cited as reasons why those who are least able to support their children proprotionately bear more and the slow decline of maternal mortality rate. The Sin Tax reform bill increased taxes on all tobacco and alcohol projects, providing a new injection of funding that enabled the administration to enroll more people in universal health care (82% from 74% of the population and with enhanced benefits), scale-up NCD prevention services in primary care, recruit healthcare workers and build additional health facilities in poor and remote areas. The basic health reforms and funding sources have been established. What is needed is to refine the strategies to improve health outcomes of the poor like increasing the poor’s utilization of PhilHealth services, as well as reducing out of pocket costs. DOTC: Department of Transport Chaos But the public will also remember the DOTC managed by my poster boy for incompetence. Secretary Jose Emilio Aguinaldo Abaya, who seemingly is bent on proving my assessment (shared by many except by himself and his boss) without leaving any doubt by committing yet more gaffes. This department more than any other branch of the executive department affects the daily life of the public. READ MORE...


READ FULL MEDIA REPORTS HERE:

Oil prices sink below $32 for first time in 12 years


A Saudi employee fills the tank of his car with petrol at a station on in the Red Sea city of Jeddah. AFP PHOTO / AMER HILABI / AFP / AMER HILABI

NEW YORK, USA, JANUARY 18, 2016 (MANILA BULLETIN) by AFP January 12, 2016 – World oil prices fell below $32 a barrel on Monday for the first time in 12 years amid signs that Iran could be free to increase exports within weeks.

In New York trade, US benchmark West Texas Intermediate for February delivery slumped $1.75 to $31.41 per barrel, a level last witnessed on December 23, 2003.

European benchmark Brent North Sea crude for February delivery dropped $1.61 to $31.55 a barrel, a low last seen in April 2004.

Prices had already plunged by 10 percent last week as concerns about China, the world’s biggest energy consumer, eclipsed a strong US jobs report.

“At the moment not many people are expecting to see a significant rebound in oil, so prices are continuing to gush lower to multi-year lows as sentiment goes from bad to worse,” Gain Capital analyst Fawad Razaqzada told AFP.

Analysts still had to weigh looming geopolitical risks — including the Saudi Arabia-Iran spat — against the prospects of new supply coming onto the market from Iran as sanctions are lifted.

The European Union foreign affairs chief, Federica Mogherini, said Monday she expected the Iran nuclear deal to be implemented “rather soon” with Tehran on track to meet its pledge to put a bomb beyond its reach.

“My expectations are that this day could come rather soon,” Mogherini said in Prague.

“The implementation of the agreements is proceeding well, it’s encouraging,” she added.

Implementation of the deal would lead to a lifting of economic sanctions on Tehran and possibly bring another one million barrels of oil per day onto the already flooded global market within months.


PHILSTAR

China-led Asian infrastructure bank opens for business (Associated Press) | Updated January 17, 2016 - 2:29am 0 0 googleplus0 0


Chinese President Xi Jinping applauds after unveiling a sculpture during the opening ceremony of the Asian Infrastructure Investment Bank (AIIB) in Beijing Saturday, Jan. 16, 2016. (AP Photo/Mark Schiefelbein, Pool)

BEIJING — China-led Asian Infrastructure Investment Bank officially opened for business on yesterday in Beijing after a formal ceremony led by Chinese President Xi Jinping.

Representatives from 57 member countries attended the opening ceremony, where China announced it would pledge $50 million to a special fund to prepare less developed countries for infrastructure projects.

The United States and Japan are not members of AIIB, saying it is a rival to already existing multilateral banks such as the World Bank, but Beijing says the AIIB supplements existing institutions and will boost investments for infrastructure projects in Asia.

The bank, intended to finance railways, cargo ports and other trade links, is a key part of Beijing's "One Belt One Road" outreach to extend China's economic influence in the region.

Beijing has pledged to put up most of the bank's initial $50 billion in capital and says that total will rise to $100 billion.

Chinese official Jin Liqun has been named the bank's first president.

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

BLOOMBERG.COM

Philippines Makes Last-Minute Decision to Join China-Led Asian Infrastructure Investment Bank Sharon Chen  December 30, 2015 — 12:12 AM EST Share on FacebookShare on Twitter
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Philippines's Ambassador to China signed the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) on December 31, 2015 in Beijing. Philippines is the 57th signatory of the Articles.

After months of holding out, the Philippines on Wednesday said it would join the China-led Asian Infrastructure Investment Bank before a year-end deadline for founding members.

China's World Bank

The Southeast Asian nation will sign the AIIB’s articles of agreement before Dec. 31, the government said in a statement.

The Philippines said its indicative paid-in capital would be $196 million, payable over five years.

As recently as a few weeks ago, policy makers were undecided about joining the $100 billion development bank initiated by China, the Manila Bulletin said, citing comments by Finance Secretary Cesar Purisima. The Philippines is among several countries involved in territorial disputes with China in the South China Sea, just as the region grows increasingly reliant on Asia’s biggest economy for trade.


PURISIMA

“The Philippines stands to gain from signing on as a founding member," Purisima said in the statement Wednesday.

"We can look forward to deepening our country’s technical expertise in infrastructure as we expand bankable projects."

Sea Dispute

China claims more than 80 percent of the water body based on a 1940s map that has no precise coordinates, and its recent reclamation work in the area has increased diplomatic tensions in the region.

China’s $40 billion Silk Road initiative, which will link China to Europe through central and western Asia, focuses on neighbors such as Indonesia, a non-claimant state.

The Philippines’ decision to join the development bank may also help expand the market for infrastructure-related industries, boosting job and business growth, Purisima said in the statement.

President Benigno Aquino, who will leave office after an election next year, had the final say on joining, Purisima said in the Manila Bulletin article.

The AIIB will hold its opening ceremony in Beijing Jan. 16-18. Members have until December 2016 to complete domestic approval processes and pay the initial tranche of their paid-in capital, according to the Philippines.

The Philippines will join countries such as Australia, Germany, Singapore, South Korea and the U.K., in signing the AIIB’s founding articles.

In all, 57 nations are prospective founding members. The U.S. and Japan are notably absent.


PHILSTAR

Shortcomings and gaps: Philippine economy and Aquino presidency, 2010-2016 CROSSROADS (TOWARD PHILIPPINE ECONOMIC AND SOCIAL PROGRESS) By Gerardo P. Sicat (The Philippine Star) | Updated January 13, 2016 - 12:00am 0 0 googleplus0 0


By Gerardo P. Sicat

After presenting the macroeconomic aspects of the economy during the Aquino years, I will now focus on the shortcomings and gaps.

This leads us to a closer look at the quality and depth of the development process, to the exposition of problems lurking ahead.

Not ‘inclusive’ enough. In the usual analysis of the main problems of the Philippine economy, the following are often cited as the most pressing: lack of employment opportunities, the low levels of income and productivity, and the reduction of poverty.

As people participate and benefit from economic growth, the more they advance out of poverty. This is essentially what “inclusive” growth means.

Though the Aquino administration has made inclusive growth a major goal, the fact remains it is an elusive goal because some existing policy problems remain unresolved.

A most common criticism often cited is the lag the country suffers in attracting foreign direct investments. Large flows of foreign private capital that have caused rapid prosperity elsewhere have eluded the country.

The reason behind this is an inherent restraint that is imbedded in foreign investment policy.

Restrictive provisions in foreign investment attraction. In fact, President Aquino has been the stumbling block toward amending the restrictive economic provisions of the Constitution.

Despite the efforts in the Congress and Senate to deal with this policy problem, he has thrown cold water on such a move. Moreover, his administration has widened the negative list that excludes foreign direct investment participation in the economy.

Recent developments (such as rising wage costs in China) tend to help change the flow of foreign direct investments into the country. The factors that determine these flows emanate from outside conditions, not active policies pursued at home.

In addition, the government needs to respond positively to issues often raised by various private chambers of commerce to handle outstanding investment concerns. A proper response requires consistency in the treatment of contracts and more speed in implementation of investment decisions.

Slow implementation of investment projects. The highly touted public-private partnership (PPP) projects had taken too long to come off the pipeline, with much delay on the finalization of contracts and their implementation.


Like many ideas that come from the government, the Public-Private Partnership (PPP) Program was viewed only from the government’s perspective and that may be a reason it has not come anywhere near expectations. The government may tout all of the successes of the PPP, but building even thousands of school classrooms and buildings is nothing compared to the scale of, say, the Laguna Lakeshore Expressway Dike. Rehabilitating or even building new airports does not require either the funding or the planning and logistics of building the North-South Railway Project at a cost of P170 billion. FROM THE BUSINESS MIRROR SEPTEMBER 2015 (ALL PHOTOs ON THE PAGE APPENDED BY PHNO)

Despite high fanfare, few infrastructure construction under the PPP have been realized. The result is that none of the major PPP projects are likely to be completed by the end of the Aquino administration.

It is also noted that the contracting parties for most of the PPPs are confined to a very few of big, local companies. There is minimal participation of foreign direct investment in many PPPs.

In general, there is desirability in bringing in foreign capital participation, in part to attract more risk capital being put in this area and to access foreign financing of these investments.

The long delays in approval of PPP investment projects pipeline demonstrates the government’s lack of focus and sense of emergency in the building public infrastructure.

The Philippine economy requires an investment-driven growth. But what the Aquino government has achieved is a consumption-led growth.

READ MORE...

Need: an investment-led economic growth. A consumption-driven process is most helpful in restoring output demand when there is a large excess capacity in the economy. That is a characteristic of advanced economies.

In the Philippines, the stark need for development demands an increase in public infrastructure investments as a complement to other investment needs within the broader productive economy.

In order to raise the capacity to produce food and to broaden the economy’s industrial reach, a wide range of investment undertakings in both the public sector and the private economy is required.

The continuing bounty of OFW remittances and the presence of strong industries that continue to earn export revenues for the country (bounties inherited from past administrations) have only encouraged the Aquino administration to adopt a cavalier approach toward implementing a rapid investment growth.

The result – consumption-led growth – has contributed to a laid-back attitude, explaining the lack of strong initiatives in deepening reforms to attract investments.

Poverty reduction record needs to accelerate. The government has reasonably tackled poverty reduction, but it could have done much more.

The Aquino administration expanded the conditional cash transfer program (CCT) significantly – both in volume and monetary allocation. More of the country’s very poor have received cash transfers as a condition for keeping their children in school.

Where the government has failed is in absorbing unemployed and underemployed labor in an expanding formal economic sector of the economy. This yet represents another image of the failure to undertake and speed up large investments – both public and private – to perk up employment creation.


PNoy, CORONA

Anti-corruption drive needs absolute sincerity. The Aquino administration has gotten praise in its anti-corruption program by putting in jail or neutralizing a big haul of high officials accused of plunder and corruption: a former president, three senators, and the impeachment of a chief justice.

Such measures have raised the government’s international profile and its perceived accomplishments even though no convictions have yet been realized.


ENRILE, ESTRADA, REVILLA

While this might have scored well internationally, in the home front, the program has been highly criticized as being directed mainly against political enemies. It has been seen as a ruthlessly partial and one-sided partisan campaign.

Tolerating misgovernance is a high negative. There are many examples of misgovernance and failed leaderships that reduce economic performance. The case of the Department of Transportation and Communications has sunk the government very badly in the public perception of the Aquino administration.

This department and its leadership have provided a classic case of misgovernance and incompetence. Its transgressions against the public welfare have been amply demonstrated: missing or long delayed delivery of car plate numbers even as higher fees were imposed; mishandled computerization of the bureau contract; run-down maintenance of the urban rail public transport system; mishandling of the country’s administration of the country’s main international airport of entry, the NAIA.

It is amazing that in almost six years, the government, through the intransigence of this department has not made any decision on the construction or relocation of the country’s main international port of entry!


MALAYA

PH STOCKS SLIGHTLY UP: GLOBAL MARKETS REMAIN CAUTIOUS January 13, 2016

Global markets remained cautious slumped in four-year lows yesterday with investors largely unconvinced on how well China will manage its economic slowdown.

“Investors are still concerned about the extent of China’s slowdown and while we may be in the middle of a consolidation phase, we have yet to see any data indicating a turnaround which is feeding the overall uncertainty,” said Ben Pedley, head of investment strategy for Asia at HSBC Private Bank in HongKong.

Most Southeast Asian stock markets recovered yesterday with the Philippines up more than half a percent, giving up earlier gains of 1.4 percent from Monday’s 4.4 percent drop. HSBC upgraded the Philippines to “overweight,” partly reflecting a decline in market valuations and robust domestic demand in an election year.

The Jakarta composite index advanced 1.2 percent, rebounding from a near four-week closing low on the day before.

Gains in Malaysia and Vietnam were relatively small, while Singapore and Thailand retreated from early highs. Investors in most parts were more reluctant to chase share prices, according to brokers.

Asian shares as measured by MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2 percent, while China stocks rose as financial stocks bounced and the offshore yuan strengthened on suspected state bank intervention.

Thai PTT Exploration and Production and Singapore’s Keppel Corp. were among top large cap losers as weak crude oil prices dented sentiment.

“Market gains should be limited by continued concerns about a shaky Chinese economy and weak oil prices. There is no real new local catalyst to bolster the SET at the moment,” said broker Asia Wealth Securities in Bangkok.

The Philippine Stock Exchange index (PSEi) was up 42.29 points to 6,330.55, a 0.67 percent hike. The broader all shares index was up 17.49 points to 3,645.46, a 0.48 percent hike.

Gainers edged losers 102 to 95 with 139 stocks unchanged. Trading turnover reached P4.59 billion.

Brokerage firm SB Equities, Inc. noted the market’s recovery happened against the backdrop of continued weak signals from regional markets as selling pressure persists.

Bargain hunting ruled the market, it said, “as many issues have already signaled entry to oversold levels.”

READ MORE...

Jun Calaycay, Accord Capital Equities Corp. trader, said while the uptick is a welcome respite, market fears “remain substantiated” with the wiping-out of more than half of the market’s original 100-point gain from early trade.

“There are warning signs all around, both fundamentally and technically. Caution still is the name of our game,” he said.

Most actively traded Ayala Land, Inc. was steady at P30. SM Prime Holdings, Inc. was up P0.62 to P19.82. Ayala Corp. was down P5 to P660. Metropolitan Bank and Trust Co. was up P0.95 to P69.96.

Megaworld Corp. was up P0.06 to P3.58. Bank of the Philippine Islands was up P1.85 to P83.10. SM Investments Corp. was up P5.50 to P775. International Container Terminal Services, Inc. was up P0.80 to P58.80. Globe Telecom, Inc. was down P5 to P1,681.

Crude oil prices approached a 20 percent drop in less than two weeks.


Chinese volatility is expected to spread throughout the world and restrict global economic growth in 2016. FROM USANEWS.COM JANUARY 11, 2016

With investors still licking their wounds from last year’s plunge in global commodity prices and a sharp selloff in Chinese markets, 2016 has brought about more pain for investment portfolios in the form of a deepening slowdown in the global economy and volatile Chinese markets. Japan’s Nikkei fell 1.3 percent after a market holiday on Monday, hitting a three-month low and down over 8 percent so far this year while Chinese stocks swung around in volatile opening trades.

According to MSCI global indexes, BRIC and other emerging market indexes have bled the most so far this year with losses of 7.2 and 6.8 percent each. MSCI’s broadest gauge of world stocks fell to its lowest level since September 2013.

On Wall Street, the S&P 500 managed to stabilize on Monday after three straight days of one-percent-plus declines, ending the day up 0.1 percent.

Indeed, money market futures are starting to price out the chance of multiple Fed rate hikes this year, with only a roughly 50 percent chance of a second hike priced in. At the start of the year, futures were fully pricing in two rate hikes.

The market is far from convinced that the Fed is going to raise rates in March, after implementing its first rate hike in almost a decade only last month.

Commodity prices remained under severe pressure, with oil prices hitting new 12-year lows on concerns about slow demand and oversupply – including US shale oil production and a likely supply increase from Iran with sanctions lifted.

US crude futures fell to a 12-year low of $30.88 per barrel CLc1 on Monday, and last stood at $31.19, down almost 16 percent so far this year.

Brent futures fell to $31.17 per barrel, also a 12-year low. (with Reuters)


PHILSTAR

PAL firms up $1-B deal for 6 long-haul aircraft By Louella Desiderio (The Philippine Star) | Updated January 15, 2016 - 12:00am 0 89 googleplus0 0


Airbus 350

MANILA, Philippines - Philippine Airlines (PAL) expects to sign the $1 billion purchase agreement next month for six long-haul aircraft.

PAL president and chief operating officer Jaime Bautista told reporters in a chance interview the flag carrier has already made a decision on the new long-haul aircraft to be acquired and would likely sign the deal by February.

“We’ll make the announcement when we sign the purchase agreement,” he said noting the deal would cover aircraft, aircraft parts and support equipment.

The airline is planning to acquire six aircraft for its long-haul flights.

The new long-haul aircraft would replace the Airbus 340s which are costlier to maintain and consume more fuel.

PAL is choosing between Airbus 350 and Boeing 787 to serve its long-haul routes.

Since October last year, PAL’s flights from Manila to New York have been using the Boeing 777-300 aircraft.

Bautista said passengers of the Manila-New York flights have given positive feedback on the shift to the Boeing 777-300 aircraft from the Airbus 340 planes.

Earlier, Bautista said PAL is also set to spend around $500 to $700 million for the delivery of seven other aircraft this year.

In particular, the amount will be spent for five A321 aircraft and two Boeing 777-300 ER this year.

The PAL Group, including low cost carrier unit PAL Express, has a fleet of more than 76 aircraft.

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

RELATED FROM PHILSTAR

PAL to fly to Kuwait By Louella Desiderio (The Philippine Star) | Updated January 17, 2016 - 12:00am 0 0 googleplus0 0

PAL said in a statement it would start operating flights to Kuwait beginning today while services to Jeddah in Saudi Arabia will be offered beginning Tuesday. Philstar.com/File MANILA, Philippines – Flag carrier Philippine Airlines (PAL) is set to commence flights to Kuwait and Jeddah this month.

PAL said in a statement it would start operating flights to Kuwait beginning today while services to Jeddah in Saudi Arabia will be offered beginning Tuesday.

“Opening up new routes to and from the Middle East such as Kuwait and Jeddah enables us to serve the flight needs of our ‘kababayans’ who work overseas. Our flights aim to provide our Filipino compatriots as well as leisure and business travelers the distinct Philippine Airlines brand of service,” PAL president and chief operating officer Jaime J. Bautista said.

PAL sees high passenger load factor in the two new destinations with more than 190,000 Filipino workers in Kuwait and an estimated 300,000 in Jeddah.

“Jeddah serves as a gateway for pilgrimages to the Islamic holy cities of Mecca and Medina. Pilgrims may now choose PAL for their travels in observance of the Umrah and Hajj,” Bautista said.

The new Middle East routes will be utilizing the A330-300 carriers.

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

PAL’s flight to Kuwait, PR 668 will depart Manila at 10 p.m. every Monday, Wednesday, Friday and Sunday and arrive in Kuwait the following day at 6:55 a.m. local time.

The return flight, PR 669 meanwhile, will leave Kuwait at 2:55 p.m. local time every Monday, Tuesday, Thursday, Saturday and land in Manila at 8:15 a.m. the following day.

As for the service to Jeddah, PR 658 will depart Manila at 10:30 p.m. every Tuesday and Saturday and arrive in Jeddah the following day at 8:45 a.m local time, PAL said.

PR 659 meanwhile, will leave Jeddah at 2:15 p.m. local time every Wednesday and Sunday and be in Manila the following day at 8:20 a.m.

With the launch of the new flight services, PAL will now have seven Middle East destinations.

The airline’s existing destinations in the Middle East are Abu Dhabi and Dubai in United Arab Emirates, Doha in Qatar as well as Dammam and Riyadh in Saudi Arabia.


PHILSTAR COLUMN

Aquino legacy FILIPINO WORLDVIEW By Roberto R. Romulo (The Philippine Star) | Updated January 15, 2016 - 12:00am 1 50 googleplus0 4


By Roberto R. Romulo

I have always been consistent in wanting and rooting for the President to succeed. His administration has achieved notable successes in key areas, but has also been marked by abject failure in certain meaningful areas. Nearing the end of his term, I have not quite decided whether his administration is a glass that is half-full or is half-empty.

So rather than presenting a comprehensive ledger of credits and debits of his administration’s performance, I will highlight what I think is the administration’s greatest success, from the narrow perspective of my advocacy for better public health as key to our economic development.

And also of its greatest failure, the Department of Transportation and Communication. At the end of the day, between these two opposite ends of the pole, what would be the more enduring perception of the Aquino presidency?

Reproductive Health and Sin Taxes

Although the jury is still out, I believe President Aquino’s successful support of the legislations on Reproductive Health (RH) and on the so-called Sin Taxes are historic milestones that has placed us on a path towards addressing two impediments to our economic development – unsustainable population growth and a healthy generation of drivers of our society. In both these landmark initiatives, the President had to take on powerful traditional stakeholders – the Church and the tobacco industry – something which his predecessors were reluctant to do.

The RH law addresses the issue of the lack of access to RH services – of which is less about giving contraceptives and more about responsible parenting – that have been cited as reasons why those who are least able to support their children proportionately bear more and the slow decline of maternal mortality rate.

The Sin Tax reform bill increased taxes on all tobacco and alcohol projects, providing a new injection of funding that enabled the administration to enroll more people in universal health care (82% from 74% of the population and with enhanced benefits), scale-up NCD prevention services in primary care, recruit healthcare workers and build additional health facilities in poor and remote areas.

The basic health reforms and funding sources have been established. What is needed is to refine the strategies to improve health outcomes of the poor like increasing the poor’s utilization of PhilHealth services, as well as reducing out of pocket costs.

DOTC: Department of Transport Chaos


ABAYA

But the public will also remember the DOTC managed by my poster boy for incompetence.

Secretary Jose Emilio Aguinaldo Abaya, who seemingly is bent on proving my assessment (shared by many except by himself and his boss) without leaving any doubt by committing yet more gaffes. This department more than any other branch of the executive department affects the daily life of the public.

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When going to work daily, which is already slow and tedious because of the horrendous traffic becomes a dangerous undertaking, someone has to take responsibility. If its not too many cars (duh!), it’s the fault of the previous management (which instead of correcting he has piled on with more mismanagement) and now, its sabotage!

What is galling is that while his boss says to the Filipino people “kayo ang boss ko”, his subaltern pouts ”I am not here to please everybody” as if to say “hindi kayong mga Pinoy ang boss ko, si Pnoy lang ang boss ko.”

And so while his boss has done a lot in upgrading public health, he does his best to undermine it by risking the life and limbs of commuters with shoddy MRT/LRT services.

And now, the COA cited the DOTC for being derelict in not constructing the public toilet facilties despite the fact that a large budget had already been allocated for this project.

Oh and by the way, the new 2016 models are out, but many hapless folks are still waiting for their registration and license plates of their 2014 model vehicles. I could not resist mentioning this because I was one of those hapless folks.

Department of Information and Communications Technology


Published June 2, 2015 4:08pm The Senate passed on third and final reading a measure creating a separate government agency solely focused on growing the information and communications technology (ICT) sector by promoting digital literacy and ICT expertise in the country. Once signed by President Benigno Aquino III into law, Sen. Recto said the DICT will be the primary agency "in charge of developing, planning, and promoting the government's ICT agenda. Senate President Pro-Tempore Ralph Recto is the sponsor of the bill creating the Department of Information and Communications Technology Act (DICT) -  FROM GMA NEWS TV

Here’s a piece of unfinished business that may yet help define the Aquino presidency. It’s actually the “C” in the DOTC but you wouldn’t know it because of neglect.

The Bill creating a DICT has passed both houses of Congress and has been submitted to Malacanang for the President to sign into law, thanks to the initiative of Senate President Frank Drilon. I hope the President will appreciate the urgency of creating a separate department for ICT for implementation before the end of his term.

He has to appreciate that contrary to some people’s view, the need for a DICT should not mainly be for the development of the ICT/BPM industry, but rather its comprehensive adoption to enable broader access and interaction and spur efficiencies. And one of its more compelling justifications is the need for e-governance – the integration of government ICT systems for greater transparency and more efficient delivery of services to the public.

With Daang Matuwid as the legacy he wants to leave behind, a DICT becomes an imperative to realize this goal. This legacy can only become a reality if there is a single agency of government focused on ICT as a strategy for governance.

When I was co -chair of the IT and E-Commerce Council, our objective was to integrate the systems of multiple government agencies to be more responsive to the public needs. At that time, an OFW needed to interact with at least seven agencies and acquire more than 30 signatures to complete the process of overseas employment.

We made great efforts to simplify the process, but the inability of the ICT systems of one agency to interact with the other hampered its implementation.

For a business to operate in the country, one needs to deal with at least five national agencies, not even including the various permits required by local government.

This is why we are consistently ranked low globally in ease of doing business.

One of the benefits of e-commerce is disintermediation, which allows the public to deal directly with government, without having to deal with middlemen who are the source of corruption, particularly in our revenue collection agencies.

With the public now able to do most transactions online like booking a flight and a hotel room or paying bills, when will government ever be able to allow its citizens to have this same convenience dealing with government?

This is the core of why a DICT is needed.

Only an independent agency can develop and implement an ICT architecture, which all government agencies will adopt so that each of their systems can interact with each other.

Without a DICT, this can never happen. I only hope our President will realize how important a DICT will be in preserving his legacy of daang matuwid.

Final thoughts

As a manager of the economy, the Aquino administration has pushed all the right buttons, addressing major hindrances to our economic growth and promoting inclusiveness.

The RH and Sin Tax law are certainly pro-poor and pro-women.

Laws on competition, cabotage for shipping, near-open air for flights, micro, small and medium enterprises (MSMEs) reflect efforts at leveling the playing field, lowering costs and providing equal opportunities.

It should be noted that the Gini coefficient (the most commonly used measure of inequality) under the Aquino administration has markedly worsened compared to the improvement under GMA from Estrada’s term.

On the macroeconomic side, it has managed to increase government revenue while at the same time lowering debts, maintaining reasonable interest rates and keeping inflation in check.

Daang matuwid has certainly improved foreign investors perception of the Philippines as a place to do good business. But the impact of these actions take time and are not so immediately obvious.

What is more obvious are the daily hassles ordinary Filipinos have to put up with everyday – horrendous traffic, inadequate transportation infrastructure, fear for their safety, bribery and corruption, airport facilities notorious for being the worst in the world, and indifferent public service.

Then they read about the cavalier response to the Mamasapano massacre, Typhoon Yolanda, NAIA laglag-bala scheme – and it completes the picture of a government lacking in empathy and is indifferent to their interest and aspirations. To be sure these are problems that have been there before.

But the people are always looking for a savior in any incoming administration. What makes this administration stand out is that when they don’t deliver, nobody takes responsibility, thus reinforcing this perception of indifference.

Dogged loyalty to friends has also been a hallmark of the President. Its an admirable trait, but unfortunately it may ultimately contribute to what amounts to less than a sterling legacy for the President.

Its little wonder then that unfortunately, Ituloy ang daang matuwid is not resonating well with voters as much as bombastic statements about exterminating criminals and stomping on corruptors.

Why even someone, in which corruption is an issue, is still doing well shows how empathy is so important in the voter’s mindset.

PNoy's speech on YouTube:

 
Published on Jul 22, 2015 Saksi is GMA Network's late-night newscast hosted by Arnold Clavio and Pia Arcangel. It airs Mondays to Fridays at 11:30 PM (PHL Time) on GMA-7. For more videos from Saksi, visit http://www.gmanetwork.com/saksi

https://youtu.be/PIRB61FIZ8Q
PNoy, nangakong magpapasagasa sa tren! Also Abaya said.......next video: CAVITE LRT ANG KATOTOHANAN...KASINUNGALINGAN NI JONVIC REMULLA https://youtu.be/lZHx2wiJ6TM


Chief News Editor: Sol Jose Vanzi

 


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