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

FASTER REMITTANCE GROWTH SEEN IN 2016 - ASIA SPECIAL REPORT, PH
[BUT PRESSURE ON PESO, BOP POSITION EXPECTED]


FEBRUARY 23 -The growth in remittance flows from Filipinos abroad this year is seen exceeding the government’s 4-percent target, according to Japanese financial giant Nomura.
Nomura said in a Feb. 19 note titled “Asia Special Report-Philippines: Challenging portfolio flows … but resilient remittances” that there were concerns over the impact of lower oil prices on remittances, given that two million overseas Filipinos are based in the Middle East. “However, we believe that these concerns are overblown. Filipino workers in the Middle East who are most prone to layoffs are the semi/low-skilled workers with relatively low per-capita remittances. In addition, the terms-of-trade benefits help to offset the potential impact of lower oil prices on remittances,” Nomura said.“A number of other structural factors mitigate the risks to remittances from workers in the Middle East and the energy sector: we have observed increased geographical diversification of remittances in recent years, an increased proportion of the contribution from more skilled workers in service sectors with strong demand and higher per-capita remittances reflecting a higher proportion of higher income workers,” it added. Nomura said it expects OFW remittances to expand by 5.2 percent this year. Data released by the Bangko Sentral ng Pilipinas last week showed that cash sent home by Filipinos abroad hit a record $2.47 billion last December—the biggest monthly amount to date—to bring the 2015 total to $25.767 billion, also the highest annual figure. READ MORE...

ALSO: Government agencies get funds for pay hike next week


FEBRUARY 24 -Funds for the increase were already allocated under the P3.002-trillion national outlay.
Government agencies will obtain next week funds to implement the first tranche of pay hikes for their personnel, the Department of Budget and Management (DBM) announced on Wednesday.
This means funds totaling P57.91 billion will be subject to agency disposal anytime to effect President Aquino's Executive Order (EO) 201 that granted the first of salary adjustments. "This will ensure that they will get at least the first tranche of the pay increase that we have planned for them," Budget Secretary Florencio Abad said in a statement. "The Human Resource Office of agencies will, of course, need time to implement the procedures for salary adjustment and process the release of funds to employees," he added. The DBM also issued on Wednesday two circulars detailing the guidelines for EO 201 for both national and local governments. Under the circulars, employee salaries will be adjusted retroactively to Jan. 1, 2016 for those who entered service by Dec. 31 last year. READ MORE...ALSO: How do presidential elections affect the stock market? ...

ALSO: Ayala Land takes over Tutuban


TUTUBAN CENTER PHILSTAR FILE
Ayala Land Inc., the second-biggest property developer, said Friday it finalized the acquisition of a majority stake in Prime Orion Properties Inc., the company that owns the Tutuban retail complex in the shopping district of Divisoria in Tondo, Manila.
Ayala Land and POPI said in separate disclosures to the stock exchange they signed a sale agreement, in which Ayala Land subscribed to 2.5 billion common shares of stock of POPI, or equivalent to a 51.06-percent stake in the company. The transaction, priced at P2.25 per share, totaled P5.625 billion. Ayala Land said it initially paid P1.406 billion, or 25 percent of the total subscription price. The company will pay the balance of 75 percent after the fulfillment of certain terms and conditions. To implement Ayala Land’s subscription, POPI will file with the Securities and Exchange an application to increase its authorized capital stock from P2.4 billion to P7.5 billion, divided into 7.5 million common shares of stock, with a par value of P1 apiece. The public float of POPI will drop to 32.16 percent from the current 65.62 percent after the transaction. Ayala Land earlier said the acquisition of POPI was part of the company’s strategy to expand its leasing business. Tutuban Center is a bargain retail complex on a 20-hectare property that will be location of the North South Railway Project Transfer Station, which will interconnect with the LRT 2 West Station. READ MORE...

ALSO: Laguna Lakeshore expressway dike - Biggest PPP auction goes ahead in March


FEBRUARY 23 -Laguna Lakeshore Expressway Dike Project
The Public-Private Partnership Center said Tuesday the bidding for the P122.8-billion Laguna Lakeshore Expressway Dike Project, the largest toll road under the PPP scheme so far, will push through on March 14. “We met with Secretary [Rogelio] Singson and his team last week to iron out the last commercial details. All systems go, according to DPWH for the Laguna Lakeshore project,” PPP Center executive director Cosette Canilao said. The LLED project involves the construction of a 47-kilometer flood control dike and an expressway on top of it from Taguig City to Los Baños, Laguna and the reclamation of over 700 hectares of land for commercial development in Taguig and Muntinlupa. It aims to mitigate flooding in the western coastal communities along Laguna Lake. The proposed alignment runs 500 meters from the shoreline of Laguna Lake. Once completed, the project is expected to cut travel time from Bicutan to Los Baños from 90 minutes to 35 minutes, with an improvement in travel speed from 30 kilometers per hour to 80 kph. Canilao said the bid submission for the project was rescheduled on March 14, from Jan. 7, 2016. This was the third time the agency extended the bid submission deadline. The original schedule was July 6, 2015, which was deferred to Nov. 6, 2015 and then to Jan. 7, 2016. READ MORE...

ALSO: PLDT wireless ties up with LinkedIn


FEBRUARY 27 -The wireless unit of Philippine Long Distance Telephone Co. (PLDT) has tied up with online professional network LinkedIn to make it easier for subscribers to check out and connect to available career and business opportunities from around world. Smart Communications Inc. announced yesterday it partnered with LinkedIn to enable subscribers to build ties with other professionals and to access job opportunities.
More than enabling business connections, LinkedIn also offers its members access to other professional content such as news and insights from industry peers and prominent leaders. Under the collaboration with LinkedIn, all Smart subscribers who are first-time users of the professional network’s mobile app would be given free access to the Job Seeker Premium service for three months beginning March. The Job Seeker Premium account would allow Smart subscribers to use valuable features to make them stand out and improve their chances of getting their dream job. The Job Seeker Premium account increases one’s chances of getting hired by placing the job application appear above those made by non-premium members. The premium service also allows the LinkedIn member to access the full list of people who viewed his or her profile in the last 90 days, making it easier to reach out or follow up. Without the premium account, the LinkedIn member can only see the last five people. READ MORE...


READ FULL MEDIA REPORTS HERE:

Faster remittance growth seen in 2016
[BUT NOMURA EXPECTS PRESSURE ON PESO, BOP POSITION]

MANILA, FEBRUARY 29, 2016 (INQUIRER) By: Ben O. de Vera @BenArnolddeVera  February 23rd, 2016 - The growth in remittance flows from Filipinos abroad this year is seen exceeding the government’s 4-percent target, according to Japanese financial giant Nomura.

Nomura said in a Feb. 19 note titled “Asia Special Report-Philippines: Challenging portfolio flows … but resilient remittances” that there were concerns over the impact of lower oil prices on remittances, given that two million overseas Filipinos are based in the Middle East.

“However, we believe that these concerns are overblown. Filipino workers in the Middle East who are most prone to layoffs are the semi/low-skilled workers with relatively low per-capita remittances. In addition, the terms-of-trade benefits help to offset the potential impact of lower oil prices on remittances,” Nomura said.

“A number of other structural factors mitigate the risks to remittances from workers in the Middle East and the energy sector: we have observed increased geographical diversification of remittances in recent years, an increased proportion of the contribution from more skilled workers in service sectors with strong demand and higher per-capita remittances reflecting a higher proportion of higher income workers,” it added.

Nomura said it expects OFW remittances to expand by 5.2 percent this year.

Data released by the Bangko Sentral ng Pilipinas last week showed that cash sent home by Filipinos abroad hit a record $2.47 billion last December—the biggest monthly amount to date—to bring the 2015 total to $25.767 billion, also the highest annual figure.

READ MORE...

End-2015 cash remittances grew 4.6 percent from $24.628 billion in the previous year, hence exceeding the 4-percent growth target, albeit slower than the 7.2-percent year-on-year growth posted in 2014.

For 2016, the growth in cash remittances is also projected at 4 percent.

At the same time, Nomura noted risks to the country’s balance-of-payments position and the peso due to external developments.

These include increased financial market volatility and continued concerns over China’s economic slowdown, the impact of policy normalization from the Fed and worries over the impact of lower oil prices, Nomura said.

In general, external risks “resulted in material capital outflows from foreign and domestic investors and a flight-to-safety into US dollar bonds,” Nomura noted.

According to Nomura, “Philippine equity markets have similarly experienced outflows, possibly exacerbated by valuation concerns amid global risk-aversion.”

BSP data released last Friday showed that the Philippines started the year with more money leaving the country, posting a BOP deficit of $813 million in January mainly as the government settled maturing foreign exchange obligations that month.

The deficit recorded last month was the widest since January 2014’s $4.48 billion. It was also a reversal of the surpluses of $481 million last December and $136 million a year ago.

The BOP is a summary of all the businesses the country does with the rest of the world.

BOP data are tracked closely to ensure that the supply of dollars in the economy remains ample to allow the government and businesses to transact with the rest of the world.

Last year, the BOP swung to a surplus of $2.6 billion, a turnaround from the $2.9-billion deficit in 2014—the first annual deficit in a decade as well as the biggest on record, largely attributed to the normalization of monetary policy in the US during that time.

The BSP had projected the BOP surplus to reach $2.2 billion this year and result into an increase in the gross international reserves to $82.7 billion, equivalent to nine months of import cover.

“With our forecast of two more interest rate hikes from the Fed in 2016 and our below-consensus forecast for China’s growth, the risk is that subdued risk appetite may continue to pressure the Philippines’ BOP via capital outflows,” Nomura said.

“Domestically, the Philippines appears to be a victim of its own success: strong investment spending has kept capital goods imports elevated while higher tourism imports (Filipinos travelling overseas) have increased, possibly due to higher per-capita incomes. Although strong domestic growth prospects have indeed led to FDI [foreign direct investment] inflows, FDI outflows have picked up amid global risk aversion,” it added.


PHILSTAR

Agencies get funds for pay hike next week By Prinz Magtulis (philstar.com) | Updated February 24, 2016 - 5:59pm 0 0 googleplus0 0


Funds for the increase were already allocated under the P3.002-trillion national outlay.

MANILA, Philippines - Government agencies will obtain next week funds to implement the first tranche of pay hikes for their personnel, the Department of Budget and Management (DBM) announced on Wednesday.

This means funds totaling P57.91 billion will be subject to agency disposal anytime to effect President Aquino's Executive Order (EO) 201 that granted the first of salary adjustments.

"This will ensure that they will get at least the first tranche of the pay increase that we have planned for them," Budget Secretary Florencio Abad said in a statement.

"The Human Resource Office of agencies will, of course, need time to implement the procedures for salary adjustment and process the release of funds to employees," he added.

The DBM also issued on Wednesday two circulars detailing the guidelines for EO 201 for both national and local governments.

Under the circulars, employee salaries will be adjusted retroactively to Jan. 1, 2016 for those who entered service by Dec. 31 last year.

READ MORE...

As a result, Abad said salary differentials will be given to the 1.3 million-strong civilian personnel, including those employed by qualified state corporations, to cover for the first month of the year.

Consultants, contract workers and paid interns are not covered by the salary hike, the agency said.

"The EO effects the adoption of the same proposals in House Bill 6268 and Senate Bill 2671 for the salary increase, the grant of the mid-year bonus equivalent to one month's basic salary and the Productivity Enhancement Incentive of P5,000," the DBM said.

Military and uniformed personnel, meanwhile, were granted provisional and officers' allowances in lieu of an increase in basic pay. Their hazard pay was also hiked to P390 per month from the original P240.

Disagreements on indexing military pension increase caused the delay in the signing of bills supposed to implement the pay adjustments.

The House of Representatives, where tax proposals are supposed to emanate, objected to the Senate's move at the bicameral conference committee. Abad earlier said funds are not available for the pension hike.

The military allowances, in effect, is an "interim measure to supplement the total compensation" of uniformed personnel.

"(This is) until such time that a pension reform measure is passed in Congress that will mitigate the impact of pension indexation," the DBM pointed out.

Funds for the increase were already allocated under the P3.002-trillion national outlay.

For national agencies, money will be sourced from the Miscellaneous Personnel Benefits Fund, while local government units will get theirs from their own budgets.

Government corporations qualified for salary hikes must source their funding from their own corporate operating budgets.

Abad has earlier expressed confidence Congress will still be able to pass the Salary Standardization Law during its last session in May.

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

INQUIRER

ALSO: How do presidential elections affect the stock market? SHARES: 2124 VIEW COMMENTS By: Henry Ong @inquirerdotnet Philippine Daily Inquirer 12:55 AM February 24th, 2016


In this Feb. 21, 2016, file image provided by the Philippine Daily Inquirer, from left: Vice President Jejomar Binay; Sen. Miriam Defensor-Santiago; Mayor Rodrigo Duterte of southern Davao city; Sen. Grace Poe; and former Interior Secretary Mar Roxas; listen to a question at a presidential candidates debate held in southern Cagayan de Oro city, southern Philippines. Poe, a political newcomer, leads opinion polls ahead of the May 9 elections, with Binay, close behind. They are followed by Roxas and Duterte in a tight four-way race – a rarity in the Philippines. Lyn Rillon/Philippine Daily Inquirer via AP

QUESTION: Some people told me that it may not be good time to invest now in stocks because many investors are taking wait-and-see stand on the outcome of the elections this May. I have been planning to buy some blue chips that went down recently but not sure if this is the right move. What should I do?—Shara Shandigan by e-mail

There is a theory that suggests that stock market returns tend to be weakest in the year following the election of a new President. According to this theory, the market tends to perform the worst during the first year because the new President would normally try to fulfill campaign promises that may not be necessarily beneficial to the economy in the short term. For example, approving tax increases or supporting budget cuts.

Once all the disappointments have been discounted, the stock market would then start to improve upwards. This trend will continue to strengthen and develop into a bullish wave in the next three years until another presidential election begins again.

Apparently, this presidential election cycle theory may only be applicable to the US market. In the Philippines, the pattern seems to be the opposite. The newly elected President would typically be greeted with high optimism by the market, which translates to higher share prices.

Based on market statistics from the last four presidential elections since 1992, the stock market tends to perform better during the first half of the presidency with average returns of 15 percent a year as compared to the last three years with returns of only 5.3 percent.

Following this historical pattern, this year being the last year of the incumbent President, the current market could be at the tailend of the cycle. This may be the best time to accumulate stocks, while share prices are still weak, in anticipation of a stronger market after the elections.

READ MORE...

A closer look at how the market behaved in the past during periods of presidential election campaign supports this view. Historical data will show that in 75 percent of the time the market tends to rise albeit gradually during February when the campaign period starts leading to the May election with an average return of 5.9 percent.

This behavior manifested itself two weeks ago when the stock market staged a weeklong rally. The index gained as much as 200 points right away to hit 6,848 level after the election campaign formally begun last Feb. 9.

If the law of averages were to be followed with target return of 5.9 percent, the stock market must be trading at least at 7,028 level come Election Day.

So why would investors buy stocks at a time when there is uncertainty? Does the market care about who will become the President? Looking at market history, it will seem to show that whoever wins the presidency would be irrelevant for as long as election process was held peaceful and credible.

Historically, market tends to extend its uptrend up to proclamation of the new President with average returns of 2.7 percent. This means that if you started buying stocks in February and held on to it until first week of July, your potential returns should be at least 8.6 percent.

Moreover, this year being an election year, the market expects the economy to benefit from the massive election spending that will happen during the campaign season. Just how much does this increase in spending really benefit the economy? A review of the GDP growth years from the last four presidential elections shows an average extra growth of 1.7 percent brought about by additional consumption from election activities. This expectation of higher economic growth helps drive the stock market to end the year on a positive note.

If you started buying today and held on to your stock until year end, you could expect your returns to be as much as 17 percent on the average according to historical returns.

While this year may be historically good for the stock market, next year could be a lot better as the market enters the first part of the presidential election cycle. The stock market has always performed the strongest in the following year after a new President has been proclaimed by experience of all four presidential elections in the past.


RAMOS

Among the four presidential elections that all ended with high return in the following year since assuming office, President Ramos got the highest return of 116 percent. This is followed by President Aquino with 36 percent, President Arroyo with 32 percent and President Estrada with 15 percent. If this pattern holds, then this coming presidential election should be a golden opportunity to build your portfolio by accumulating promising stocks that will outperform the market next year.

Perhaps you can buy index stocks that have fallen by at least 20 percent from its 52-week high to start with. Stocks that are part of the PSE index are safest bet if you are expecting the market to bounce back after the elections. Stocks such as Ayala Land (-23 percent), Robinson Land (-23 percent), Metrobank (-24 percent), PLDT (-31 percent), Globe Telecoms (-33 percent), Megaworld (-41 percent) and ICTSI (-47 percent) can form part of your core holdings.

You may also want to consider buying some stocks that will benefit from the election spending. Media stocks such as ABS-CBN (-20 percent) and GMA7 (-11 percent) and consumer stocks such as Jollibee (-4 percent), Universal Robina (-17 percent) and Puregold (-19 percent) can also offer good trading plays this year.

Market history has shown that presidential candidates do not affect how the stock market should behave. It is the economic impact those presidential elections bring that affect the market direction.

Henry Ong is a Registered Financial Planner of RFP Philippines. Stock data and tools provided by Technistock. To learn more about stock analysis and investment, attend the 9th Accredited Financial Analyst (AFA) program this April 2016. To register, e-mail info@rfp.ph or text <name><e-mail> <AFA> at 0917-9689774.)


MANILA STANDARD

Ayala Land takes over Tutuban posted February 26, 2016 at 11:55 pm by Jenniffer B. Austria


TUTUBAN CENTER -- PHILSTAR FILE

Ayala Land Inc., the second-biggest property developer, said Friday it finalized the acquisition of a majority stake in Prime Orion Properties Inc., the company that owns the Tutuban retail complex in the shopping district of Divisoria in Tondo, Manila.

Ayala Land and POPI said in separate disclosures to the stock exchange they signed a sale agreement, in which Ayala Land subscribed to 2.5 billion common shares of stock of POPI, or equivalent to a 51.06-percent stake in the company.

The transaction, priced at P2.25 per share, totaled P5.625 billion.

Ayala Land said it initially paid P1.406 billion, or 25 percent of the total subscription price. The company will pay the balance of 75 percent after the fulfillment of certain terms and conditions.

To implement Ayala Land’s subscription, POPI will file with the Securities and Exchange an application to increase its authorized capital stock from P2.4 billion to P7.5 billion, divided into 7.5 million common shares of stock, with a par value of P1 apiece.

The public float of POPI will drop to 32.16 percent from the current 65.62 percent after the transaction.

Ayala Land earlier said the acquisition of POPI was part of the company’s strategy to expand its leasing business.

Tutuban Center is a bargain retail complex on a 20-hectare property that will be location of the North South Railway Project Transfer Station, which will interconnect with the LRT 2 West Station.

READ MORE...

Tutuban Center currently has 60,000 square meters of gross leasable space. Ayala Land plans to expand the retail complex by adding another 40,000 square meters of leasable space over the next two to three years.

Ayala Land has been strengthening its recurring income business by developing more shopping malls, office and hotels.

Ayala Land by 2020 aims to secure 50 percent of total revenues from recurring business and the other half from residential sales.

Ayala Land plans to achieve the target by tripling the size of shopping malls to 3.6 million square meters, office space to 1.8 million sq. m. of gross leasable area and hotel and resorts to 6,000 room keys.

Share price of Ayala Land on Friday declined 1.4 percent to P32.05, while POPI fell 7.4 percent to P2.01.


MANILA STANDARD

Biggest PPP auction goes ahead in March posted February 23, 2016 at 11:55 pm by Darwin G. Amojelar


Laguna Lakeshore Expressway Dike Project

The Public-Private Partnership Center said Tuesday the bidding for the P122.8-billion Laguna Lakeshore Expressway Dike Project, the largest toll road under the PPP scheme so far, will push through on March 14.

“We met with Secretary [Rogelio] Singson and his team last week to iron out the last commercial details. All systems go, according to DPWH for the Laguna Lakeshore project,” PPP Center executive director Cosette Canilao said.

The LLED project involves the construction of a 47-kilometer flood control dike and an expressway on top of it from Taguig City to Los Baños, Laguna and the reclamation of over 700 hectares of land for commercial development in Taguig and Muntinlupa.

It aims to mitigate flooding in the western coastal communities along Laguna Lake. The proposed alignment runs 500 meters from the shoreline of Laguna Lake.

Once completed, the project is expected to cut travel time from Bicutan to Los Baños from 90 minutes to 35 minutes, with an improvement in travel speed from 30 kilometers per hour to 80 kph.

Canilao said the bid submission for the project was rescheduled on March 14, from Jan. 7, 2016.

This was the third time the agency extended the bid submission deadline. The original schedule was July 6, 2015, which was deferred to Nov. 6, 2015 and then to Jan. 7, 2016.

READ MORE...

Under the original schedule, pre-qualified bidders had until July 6, 2015 to submit their technical and financial proposals.

The Public Works Department originally planned to award the project on Aug. 21 and sign the concession agreement on Sept. 20, 2015.

Three prospective bidders were shortlisted for the project, including San Miguel Holdings Corp., Alloy Pavi Harshen LLEDP Consortium of Malaysia and Team Trident.

Team Trident is composed of Trident Infrastructure and Development Corp., Ayala Land Inc., Megaworld Corp., Aboitiz Equity Ventures Inc. and SM Prime Holdings Inc.

The Alloy-Pavi Hanshin LLEDP Consortium consists of Malaysia’s Alloy MTD Capital Berhad, Prime Asset Ventures Inc. and Hanshin Engineering Construction.

The LLED concession will last 37 years, including seven years for design and construction and 30 years for operation and maintenance. It will be financed mainly by private capital with no government subsidy, except for right-of-way costs.

Canilao, who tendered her resignation effective March 8, recommended that PPP consultant Andre ‘Raj’ Palacios take her place in the agency.

The government has so far awarded 12 projects under the PPP scheme worth P217.42 billion since 2010. Of the total, only three have been completed so far, including the Muntinlupa-Cavite Expressway, Automated Fare Collection System and PPP for School Infrastructure phase one.

Canilao earlier said the PPP Center was targeting to roll out at least two or three projects before the end of the Aquino administration in June 2016.


PHILSTAR

PLDT ties up with LinkedIn By Louella Desiderio (The Philippine Star) | Updated February 27, 2016 - 12:00am 0 0 googleplus0 0

MANILA, Philippines - The wireless unit of Philippine Long Distance Telephone Co. (PLDT) has tied up with online professional network LinkedIn to make it easier for subscribers to check out and connect to available career and business opportunities from around world.

Smart Communications Inc. announced yesterday it partnered with LinkedIn to enable subscribers to build ties with other professionals and to access job opportunities.

More than enabling business connections, LinkedIn also offers its members access to other professional content such as news and insights from industry peers and prominent leaders.

Under the collaboration with LinkedIn, all Smart subscribers who are first-time users of the professional network’s mobile app would be given free access to the Job Seeker Premium service for three months beginning March.

The Job Seeker Premium account would allow Smart subscribers to use valuable features to make them stand out and improve their chances of getting their dream job.

The Job Seeker Premium account increases one’s chances of getting hired by placing the job application appear above those made by non-premium members.

The premium service also allows the LinkedIn member to access the full list of people who viewed his or her profile in the last 90 days, making it easier to reach out or follow up. Without the premium account, the LinkedIn member can only see the last five people.

READ MORE...

Ariel Fermin, executive vice president and head of consumer business at PLDT and Smart said the team up with LinkedIn would give Filipinos access to tools and a wealth of information that can help them boost their careers and ultimately their lives.”

For his part, Tommaso Del Re, head of international business development at LinkedIn, said the collaboration with Smart would help empower more Filipino professionals to successfully connect to new jobs and business opportunities.

Smart’s partnership with LinkedIn follows others forged earlier to cater to the subscribers’ need for digital services.

The partnerships include the biggest names in entertainment such as iflix, FOX, MCA Music, Sony Music and Warner Bros.

Smart has also linked up with successful global startups such as ride-sharing service app Uber and online accommodation booking platform Airbnb.

As of end-September, the PLDT Group had a total cellular subscriber base of 67 million. Of the total, 24.6 million were under the Smart brand, 27.7 million were using value brand TNT, and 14.7 million had Sun Cellular accounts.


Chief News Editor: Sol Jose Vanzi

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