PHILIPPINE HEADLINE NEWS ONLINE: Since 1997 © Copyright (PHNO) http://newsflash.org



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

ON 1st DAY OF DUTERTE ADMIN: BIR TO HALT TAX PROBES
[RELATED: Aquino sets last economic team meeting]


JUNE 21 -Henares (left) and Incoming BIR Chief Cesar Dulay
All pending tax investigations and audits will be stopped on day one of the new administration, the incoming chief of the Bureau of Internal Revenue (BIR) said yesterday. “We have considered initially, for the first day (of our term), to recall all letters of authority (LOA),” Cesar Dulay told businessmen on the first day of the Sulong Pilipinas workshop here. The workshop is being held until today by the incoming administration to consult with business leaders on the specifics of its economic agenda. The BIR issues a LOA to inform a taxpayer that he or she is being investigated for possible tax violations. But according to Dulay, he received information that probes conducted under LOA are being abused and could last for “two to three years.”  “We should put a cap on that period because it is an opportunity for what we can call negotiation (for corruption),” Dulay said. READ MORE...RELATED,
Aquino sets last economic team meeting...

ALSO: @ Davao eco forum - ‘Overhaul policy to benefit majority of Filipinos’  [DUTERTE TEAM BARES DETAILS OF ECONOMIC AGENDA IN DAVAO FORUM]


JUNE 20 -Incoming NEDA Director General Ernesto Pernia while presenting the macroeconomic agenda of the new administration. PHOTOS BY MAYVELIN CARABALLO
Davao City: President-elect Rodrigo Duterte’s team for the first time bared details of an expanded economic agenda that will overhaul policies to translate high growth figures into better living standards for the majority of Filipinos, while crime-busters work harder to make homes and businesses in the country safer. Incoming Finance Secretary Carlos Dominguez told participants of an Economic Forum held here that the new government will pursue an environment that will be good for business by leveling the playing field, carrying out investor-friendly initiatives, ridding the bureaucracy of graft and inertia, and freeing government agencies from “regulatory capture.” Duterte had said in his previous eight-point economic agenda that reforms would involve sweeping reforms ranging from a sharp boost to public spending on human and physical capital to tougher law enforcement. The incoming President was not present on the first day of the forum but is expected to attend the concluding session today (Tuesday). Dominguez said in the Forum held in consultation with the business sector that industries and companies will also have to do their part by delivering on a new public-private partnership under the new regime. “Over the next six years, we should transform the national economy in ways that will bring not only social peace but also communities that nurture our people,” he said.
“This will require accomplishing the goals outlined in the 10-point program,” he added, referring to the expanded economic agenda. READ MORE... RELATED,.The PHL economy in the eyes of two NEDA chiefs [THE ESGUERRA-PERNIA SHUFFLE]...

ALSO: BRITISH EU EXIT - World financial markets rocked after Brexit vote
[RELATED: British brace for economic repercussions of EU exit decision]


JUNE 24 -A floor trader studies stock prices at the Hong Kong Stock Exchange, Friday, June 24, 2016. Global financial markets dived on Friday as British media forecast Britain to leave the European Union. AP/Kin Cheung
SEOUL, South Korea — World financial markets were rocked Friday by Britain's unprecedented vote to leave the European Union, with stock markets and oil prices crashing and the pound hitting its lowest level in three decades.
The uncharted, unexpected path of a European Union without Britain sparked the sell-offs, with more jitters expected as global markets try to digest the shock result. Governments in Asia vowed to take measures to stabilize the financial markets as panic gripped investors. Tokyo stocks plummeted about 8 percent, their biggest fall since 2008. Other Asian markets were set to finish the day with big losses. READ: Brexit: UK votes to make European Union exit Shocked investors were ready to dump British stocks as soon as the market opens at 0700 GMT, with futures for the benchmark stock index FTSE 100 tanking 8.3 percent, and the pound, which trades 24 hours, already falling at one point to its lowest level since 1985. READ MORE...RELATED, British brace for economic repercussions of EU exit decision...

ALSO: Brand refresh - PLDT, Smart usher in a new digital era
[RELATED: “Digital pivot” Plan Ushers in a New Era (and Logos) for PLDT and Smart]


JUNE 21 -PLDT chairman and CEO Manuel Pangilinan (fourth from right) leads the grand reveal of the new PLDT and Smart logos (below) together with his team (from left) PLDT chief finance officer Anabelle Chua, chief technology and information advisor Joachim Horn, Voyager president Orlando Vea, PLDT EVP and head of consumer business Ariel P. Fermin, chief procurement advisor Ahmar Soorty, PLDT group HR head Butch Jimenez, PLDT EVP and head of enterprise, international, and carrier business Eric Alberto, chief strategy officer Winston Damarillo, and First Pacific’s Christopher Young.  A brand new logo, a brand new day. The PLDT Building along Makati Avenue was lit up last week to showcase the new logos of PLDT Inc. and Smart Communications as the industry who’s who gathered at the nearby Rizal Ballroom of the Makati Shangri-La Hotel. Call it the quintessential facelift of the digital age – lots of hype, fanfare, noise (online and offline) and a primal scream from the crowd as the ‘90s rock band Eraserheads, who last performed together in a concert about seven years ago, dished out song after song in a surprise reunion concert. READ MORE...RELATED,
“Digital pivot” Plan Ushers in a New Era (and Logos) for PLDT and Smart...

ALSO: Romualdez's Spybits - ‘Balimbing’ businessmen


JUNE 21 -BY BABE ROMUALDEZ: For some reason, only the LP failed to comply with the SOCE filing according to the deadline, and one would have thought that such a well-oiled political organization like the Liberal Party would be the first to submit their SOCE —strengthening suspicions that billions of public funds were used to finance the campaign of LP bets. PHOTO OF ROXAS HERE FROM ELLEN TORDESILLAS BLOG Our spies within the business community tell us that the Liberal Party’s difficulty in filing its statement of contributions and expenditures (SOCE) is because businessmen who contributed to the campaign kitty of the national candidates and the Liberal Party (LP) are shying away from confirming their contributions. We’re told that those who had originally promised to sign the forms that would attest to their contribution had backed out because they do not want the administration of president-elect Rodrigo Duterte to put them in their “S” list. 
In fact, several of the businessmen who placed bets on the LP horse are all trooping to Davao City to pledge their support to the incoming president — in yet another demonstration of the typical Filipino style of “balimbing” or turncoatism that usually happens when a shift in political power happens. Our friend inside the LP told us that aside from the non-confirmation from businessmen, the LP’s problem to comply with the SOCE on time is aggravated by the inability of certain LP people to produce supporting documentations to explain the expenses and the source of donations. The issue over the SOCE and the LP’s request for an extension has precipitated the decision of Comelec commissioner Robert Christian Lim to resign as head of the poll body’s campaign finance office because the extension accorded to the LP is not only “unfair to other candidates and parties who complied with the prescribed (filing) period,” but also because it would be a “reversal of the Commissions own resolution on the matter,” Lim said. READ MORE...


READ FULL MEDIA REPORTS HERE:

On 1st day of Duterte administration: BIR to halt tax probes


Henares (left) and Dulay

DAVAO CITY, JUNE 27, 2016 (PHILSTAR) By Prinz Magtulis  Updated June 21, 2016 - 12:00am - All pending tax investigations and audits will be stopped on day one of the new administration, the incoming chief of the Bureau of Internal Revenue (BIR) said yesterday.

“We have considered initially, for the first day (of our term), to recall all letters of authority (LOA),” Cesar Dulay told businessmen on the first day of the Sulong Pilipinas workshop here.

The workshop is being held until today by the incoming administration to consult with business leaders on the specifics of its economic agenda.

The BIR issues a LOA to inform a taxpayer that he or she is being investigated for possible tax violations.

But according to Dulay, he received information that probes conducted under LOA are being abused and could last for “two to three years.”

“We should put a cap on that period because it is an opportunity for what we can call negotiation (for corruption),” Dulay said.

READ MORE...

Dulay also vowed to conduct an “immediate review” of revenue regulations to ensure tax requirements are reduced as part of ease of doing business.

Dulay’s pronouncements comes after a new spat between outgoing Internal Revenue commissioner Kim Henares and industry group Tax Management Association of the Philippines (TMAP) over the issuance of two revenue regulations weeks before Henares steps down.

Revenue Memorandum Order 24-2016 laid out tax probe rules for property buyers and sellers found not to have financial capacity to hold onto their assets. It was issued last June 7.

Meanwhile, Revenue Memorandum Circular 62-2016 clarified how banks and non-banks should treat “passed-on” gross receipts tax to their clients. It was issued June 13.

Sought for comment, Henares said Dulay “could do whatever he wants within his power” once he takes over.

TMAP president Benedict Tugonon supported both plans, saying BIR should not be given excessive discretion against taxpayers.

Specifically, he expressed optimism a review of the issuances would allow the reversal of regulations he deemed are against the National Internal Revenue Code of 1997.

“We hope it will clear inconsistencies with the Tax Code and also take into account the tendencies of over regulation and simplification,” Tugonon said in a phone interview.

On the dismissal of all LOA, the TMAP chief said there was a need to check BIR’s “very powerful” tool against taxpayers.

“The exercise of this LOA should be done with caution because this could be very destructive to taxpayers. We support moves to make the issuance of the LOA as objective as possible,” Tugonon said.

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

RELATED FROM THE MANILA BULLETIN

Aquino sets last economic team meeting by Chino Leyco June 25, 2016 (updated) Share0 Tweet0 Share0 Email0 Share0


ABAD AND AQUINO

For the last time, the Aquino administration’s economic team will meet next week to discuss the government’s macroeconomic assumptions and targets, which will be passed on to President-elect Rodrigo R. Duterte on June 30.

Inter-agency Development Budget Coordination Committee (DBCC), chaired by outgoing Budget Secretary Florencio B. Abad, is scheduled to meet on June 28 to finalize several government goals, including this year’s 6.8 percent to 7.8 percent growth target.

“This is just to close our business before we’re about to end our term. This is for our own internal use,” Abad said. “If there’s anything substantive, we’ll let them [the next administration] decide on it.”

Abad also said that the incoming economic team of President-elect Duterte has the prerogative to come up with its own version of the 2017 proposed national budget. “They can adopt the assumptions and the targets, or they can revise them or they can undergo their own exercise and come up with their own assumptions and targets because they have their own priorities,” Abad said.

The outgoing budget chief admitted that the Duterte administration has different priorities as compared with President Benigno S. Aquino III, particularly on peace and order.

“They may need to revise the budget because they have their own priorities. Clearly, enforcement will be highlighted in that budget — they have several measures along that line, which is not emphasized in our priorities,” Abad said.

Earlier, Abad said the government was looking to propose a national budget of up to P3.5 trillion for 2017, with a particular focus on climate change mitigation alongside increased spending on infrastructure and agriculture.

In 2017, the DBCC is projecting that the country’s economy, as measured by gross domestic product (GDP), will grow by 6.6 percent to 7.6 percent, and seven to eight percent in 2018.

By 2019, the country’s GDP growth is expected to grow between the 6.9 percent and 7.9 percent projections. Last year, the Philippine economy expanded by 5.9 percent.

DBCC is composed of the chiefs of the Department of Budget and Management, the National Economic and Development Authority, the Department of Finance, and the Bangko Sentral ng Pilipinas which sits as the committee’s resource institution.


DIOKNO

Last week, incoming Budget Secretary Benjamin E. Diokno said the current 2016 growth target of 6.8 percent to 7.8 percent was unlikely to be attained, saying a more realistic goal would be around 6.2 percent.

In the first-quarter, the Philippine GDP grew 6.9 percent, outpacing China’s growth for the first-time in nearly three-decades.

Along with weaker GDP projection, Diokno was looking at a wider budget deficit this year to fund new infrastructure and spur growth,

“A deficit-to-GDP ratio of 3 percent is manageable, especially if the higher deficit will be used to fund infrastructure,” Diokno said.


MANILA TIMES

‘Overhaul policy to benefit majority of Filipinos’
[DUTERTE TEAM BARES DETAILS OF ECONOMIC AGENDA IN DAVAO FORUM]
June 20, 2016 10:59 pm by MAYVELIN U. CARABALLO, REPORTER


Incoming NEDA Director General Ernesto Pernia while presenting the macroeconomic agenda of the new administration. PHOTOS BY MAYVELIN CARABALLO

Davao City: President-elect Rodrigo Duterte’s team for the first time bared details of an expanded economic agenda that will overhaul policies to translate high growth figures into better living standards for the majority of Filipinos, while crime-busters work harder to make homes and businesses in the country safer.

Incoming Finance Secretary Carlos Dominguez told participants of an Economic Forum held here that the new government will pursue an environment that will be good for business by leveling the playing field, carrying out investor-friendly initiatives, ridding the bureaucracy of graft and inertia, and freeing government agencies from “regulatory capture.”

Duterte had said in his previous eight-point economic agenda that reforms would involve sweeping reforms ranging from a sharp boost to public spending on human and physical capital to tougher law enforcement.

The incoming President was not present on the first day of the forum but is expected to attend the concluding session today (Tuesday).

Dominguez said in the Forum held in consultation with the business sector that industries and companies will also have to do their part by delivering on a new public-private partnership under the new regime.

“Over the next six years, we should transform the national economy in ways that will bring not only social peace but also communities that nurture our people,” he said.

“This will require accomplishing the goals outlined in the 10-point program,” he added, referring to the expanded economic agenda.

READ MORE..

Dominguez said the incoming Duterte presidency will carry on the sound macroeconomic policies that have allowed the economy to grow under the current administration, but will overhaul the policies and systems that have barred an overwhelming majority of Filipinos from partaking of such benefits.


DOMINGUEZ

The new Finance secretary said the incoming administration will move away from the chronic underspending seen in the past few years, by investing in building infrastructure that is necessary to make the Philippines a 21st century economy: “from modernizing our ports to improving our logistical spine to ensuring reliable and cheap power for all the islands.”
He expressed hope that with the two-day dialogue and workshop, the public and private sectors could jointly start refining the reforms that would be put in place over the next six years.

Dominguez said the tasks of the DOF in the incoming administration rest on the following prepositions: raising the money government requires to operate and invest in social goods such as infrastructure, health facilities and quality educational institutions; ensuring the sustainability of the government’s financial affairs; and playing a key role in making the country’s economic growth more inclusive.

“This can be achieved by: rethinking our investments incentives; reconfiguring our taxation system to build a robust middle class; and, reinventing our trade and tariff policies so that we may take advantage of free trade without sacrificing the development of our industries,” he said.

Dominguez also said the new administration will review the tax system, initially to update the income tax brackets and eventually to lowering corporate and individual tax rates.

The new administration will also push forward the development of rural areas to generate more job opportunities in the countryside, which will involve modernizing agriculture and encouraging agribusinesses to generate higher value added products.

“The new administration will push forward with the challenging task of bureaucratic reform. With these, we hope to improve on the ease of doing business. More important, we want a bureaucracy that is most responsive to the needs of our citizens,” he added.

Rebalancing the economy

Incoming economic Secretary Ernesto Pernia said poverty- and inequality-reducing economic growth entails a major rebalancing of the economy.

Citing an example, Pernia said that between 2006 and 2012, poverty eased by just more than 1 percentage point.

“The number of poor people has been increasing. In the first quarter of 2014, poverty incidence was recorded at 26.2 percent. That is about 26 million poor Filipinos,” he said.

The Duterte administration aims to reduce poverty incidence to between 15 percent and 16 percent in the next six years, which means a reduction by between 1.25-percentage points and 1.5-percentage points every year.

Besides disbursing the infrastructure budget in the right places, where the poor dominate the local population, the new administration will also strengthen the implementation of the Responsible Parenthood and Reproductive Health Law to enable especially poor couples to make informed choices on financial and family planning.

To achieve its poverty-reduction goal, the Philippines should transform its economy into an investment- and exports-driven one from being consumption-led, Pernia said.

The Duterte administration will also have to focus on the development of manufacturing and agricultural sectors to generate more jobs for the poor, he added.

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

RELATED FROM GMA NEWS NETWORK

THE ESGUERRA-PERNIA SHUFFLE: The PHL economy in the eyes of two NEDA chiefs Published June 22, 2016 12:04pm By BERNADETTE REYES, GMA News


Ernesto Pernia (right)  and Emmanuel Esguerra (left) are trading places on June 30. Pernia will bid goodbye to the UP School of Economics as Professor Emeritus to assume the role of NEDA Director General, while Esguerra relinquishes his post as NEDA chief and says hello once again to teaching in the same school.

The economists and academics bare two perspectives on the state of the Philippine economy today.

Outgoing NEDA Director General Esguerra would rather see the economy as a glass half-full. For incoming counterpart Pernia, it looks as if half-empty.

Weak gov't spending

Days after the 2016 presidential elections, NEDA announced the Philippines' impressive GDP growth of 6.9 percent in the first quarter of 2016, faster than China (6.7 percent) and Vietnam (5.5 percent).

For the Philippines, that was the highest quarterly growth since second quarter of 2013.

Despite registering the fastest-growing output in the region, the country could have fared better if not for weak government spending.

Most economic books would prescribe the following equation: less government spending equals less growth.

Pernia criticized the outgoing Aquino administration for being overly cautious in implementing projects, an approach which supposedly weakened government spending and slackened economic growth.

“They were just low in implementing infrastructure projects including PPPs [public- private partnership program]. Possibly they were getting more careful, more cautious on what to approve. So they try to scrutinize, to revisit, and re-review projects that were already in line for bidding,” said Pernia.

Esguerra noted less-than-expected government spending under the Aquino administration, and highlighted the reasons behind the situation.

“There are processes that are being followed in terms of project preparation, in making feasibility studies, in contracting and procurement. If you encounter problem in any of those steps or processes, certainly there will be slowdown in spending,” Esguerra said.

Legal challenges also impede project implementation such as right of way issues among other court orders that effectively impede the rolling out of projects, he added.

READ MORE...

Government spending was also hampered by the lack of human resources to implement projects as in the case of the rehabilitation program in the aftermath of Typhoon Yolanda that stuck Central Philippines in November 2013.

"There was a scarcity of structural engineers that could be mobilized to do that, and hindi simple iyon. ‘Yung pag-rebuild they have to be rebuilt to meet certain specifications of resiliency. So you really needed certain types of skills which were not really present at that time," Esguerra said.

Reducing red tape

Pernia is gung-ho when it comes to government spending under the Duterte administration. “It's just to get things moving faster, and President Duterte is known for fast action and fast decision. Reducing red tape is much needed, because investors are deterred by red tape,” he said.

Esguerra agreed. Too much bureaucratic red tape results in high cost of doing business, but it should not be totally set aside at the expense of more important considerations.

“Of course, everyone wants fast implementation. But I think that the due diligence that is required... certain processes must be observed to ensure transparency and accountability," he said.

Esguerra and Pernia are of the same view that more investment is necessary to keep the economy healthy.

“The government should really be just providing the investment climate, a favorable investment climate. Investor should be motivated, incentivized to boost GDP,” Pernia emphasized.

Esguerra said policy consistency is crucial to sustain the confidence of the business sector and for growth to continue. “Dapat hindi pabago-bago ang rules, hindi pabago-bago ng mga policy, nirerespeto ang mga kontrata that are being entered into between the government and the private sector.”

The sectoral divide

In recent years, the economy was spurred primarily by increased activity in the services sector and, of course, domestic demand.

Government consumption and expenditure grew by 9.9 percent and household consumption by 7 percent. Fixed capital grew by 25.5 percent which means growth was also characterized by more investment.

“This domestic demand, which overall grew by 11 percent, was able to compensate for the weakness of external demand because of weak export,” Esguerra said, noting the export of goods and services slowed down to 6.6 percent while imports rose 15.9 percent.

Construction also grew faster year-on-year at 12 percent in the first quarter versus 4.5 percent. Meanwhile, public construction saw a reversal from a 23 percent contraction last year to 39.9 percent. Likewise, private construction saw an uptick to 7.1 percent from 1.1 percent.

While Esguerra is proud of such accomplishment Pernia believes growth should be stirred towards increase agriculture and manufacturing activities. “If the growth is service sector driven or consumption-driven, it's not going to generate many jobs, sufficiently big number of jobs to absorb the unemployed. There should be more investment, there should be more attention given to agriculture and manufacturing because there are more generative of jobs including jobs for the less skilled and less educated.”

Growth in the services sector is not really bad for the economy, Esguerra noted. “There is nothing wrong with services. In fact, in this day and age you need a very efficient service sector to even make your agriculture sector and manufacturing sector efficient. Because what will create jobs or what will make manufacturing and agriculture more efficient? Connectivity and transportation?

"That’s a service. Credit? That’s a service. All of these ports and airports and other means of transportation, these are all services. If one part of the economy grows, it will have an effect on other parts of the economy, maybe not immediately," he said.

Tax reform

Tax reform will happen during the Duterte administration, Pernia said, with the end goal of benefiting the poor more than those who can afford. “Essentially the outcome of that income tax reform will be to make the tax structure more progressive meaning it will benefit more the poor than the upper income groups.”

Pernia believes it's high time that the tax structure is adjusted to inflation since it was last tweaked in 1997.

“The exemption level will be raised. Inflation has overtaken many of the lower incomes earned by low-income earners. They’ve been pushed to higher brackets so they’ve been paying more taxes on their nominal incomes than what they should be paying,” he said.

Esguerra warns that while this may be a good move, other revenue generating measure should compensate for the loss from the lower take on personal income tax.

“Meron kang mawawala na revenue as a result of providing more exemptions. So where will you get the revenue that will be foregone? If you want, for instance, to increase the allocation for social services and infrastructure, then you need the resources to do that.”

Pernia said sales tax may be raised such as the value added tax, which he believes is the most efficient means of revenue collection.

“That will be the compensation needed to offset the reduction in the revenue because of the lowering of income taxes, but to what extent it will be raised upwards – the sales tax – will depend on some fine tuning, some simulation of what will be the outcome of any tinkering of the tax structure,” he said.

The present tax rates in the Philippines are the highest compared with neighboring economies.

“In terms of purchasing power, it has been severely eroded for almost two decades. In terms of just pure tax rate per se, among Asean countries, I think the average is around 25 percent. Ours is 30 percent for [personal] income tax and 30 percent for the corporate tax,” Pernia said.

Aside from tinkering with tax rates, Esguerra believes tax administration should also be revisited.

“You need to look at it in the context of the general, comprehensive tax reform. Maybe it's not only sales tax that should be looked at. Even the structure of income taxation, even the tax administration for example, reducing the cost of tax compliance should be looked at because you need to balance everything,” Esguerra noted.

Not six years

Both the Philippine Development Plan and Midterm Update highlight the need to make the growth more inclusive and create more jobs.

However, Esguerra said the structural transformation necessary in order to make growth more inclusive could not be done in a short period of time. "It cannot be done even in a six-year, within the term of a presidency.

“If you take a look at the sources of growth in the last five years, where growth is becoming more investment-led on the demand side, where growth is being where industry is taking a bigger share of growth and increasing its share in the GDP, those are indications of structural transformation, and this is happening but it's not a six- year project,” he added.

The people should also take part by being vigilant against corruption, reporting to authorities for investigation to take place. “Reducing corruption is a huge help, because corruption in the form of tax evasion, smuggling – these accounts for close to half a billion, so that’s already a huge boost to revenue,” Pernia noted.

"In the last 40 years, its only now that we are able to match the growth last attained in 1968, which was not sustainable because it was debt-driven. But the kind of growth that we have for the last six years is built on more solid foundation," Esguerra said.

Pernia recognizes the strong macroeconomic fundamentals, achieved by sound fiscal and monetary policies during the Aquino administration, but more has to be done. He believes Duterte’s impatience may just be what we need to keep the economy moving.

Pernia has coined the “virtuous impatience,” which best describes his character and that of the President-elect.

“One of our problems is that we tend to be too patient, that’s why nothing gets done. We need virtuous impatience, meaning that if we demand quick action and services from our officials, delivery of good service at the airport and other services, health, and education services – if we have virtuous impatience – then our officials will be put on their toes and they will deliver faster.”

As Esguerra pass on the Cabinet post to Pernia, he can only hope that the economy will one day catch up with our neighbors – although maybe not too soon.

"[Malaysia]... took them 33 years of sustained growth to be where they are right now, to reduce poverty to an almost negligible level," Esguerra noted.

Not even the best economists could tell when the Philippines will see the day when no one will be sleeping on sidewalks or when every Filipino family is sure to eat three meals a day. But every Filipino hopes that day will come if not in their lifetime, at least in their children's or their children's children. – VDS, GMA News


PHILSTAR

EU EXIT: World financial markets rocked after Brexit vote By Youkyung Lee (Associated Press) | Updated June 24, 2016 - 3:23pm 6 26 googleplus0 0


A floor trader studies stock prices at the Hong Kong Stock Exchange, Friday, June 24, 2016. Global financial markets dived on Friday as British media forecast Britain to leave the European Union. AP/Kin Cheung

SEOUL, South Korea — World financial markets were rocked Friday by Britain's unprecedented vote to leave the European Union, with stock markets and oil prices crashing and the pound hitting its lowest level in three decades.

The uncharted, unexpected path of a European Union without Britain sparked the sell-offs, with more jitters expected as global markets try to digest the shock result.

Governments in Asia vowed to take measures to stabilize the financial markets as panic gripped investors.

Tokyo stocks plummeted about 8 percent, their biggest fall since 2008. Other Asian markets were set to finish the day with big losses.

READ: Brexit: UK votes to make European Union exit

Shocked investors were ready to dump British stocks as soon as the market opens at 0700 GMT, with futures for the benchmark stock index FTSE 100 tanking 8.3 percent, and the pound, which trades 24 hours, already falling at one point to its lowest level since 1985.

READ MORE...

"You can see people are running for cover," said Ken Courtis, chairman of Starfort Investment Holdings in Tokyo. Investors were betting on a victory for the remain side, but "what you're seeing now in markets is an adjustment in the other direction, as everyone tries to get through a tiny door at the same time," he said.

The British currency managed to recover and narrow its fall by mid-afternoon in Asia, after diving as much as 8 percent to the lowest level in 31 years. The pound traded 5.7 percent lower against the dollar at $1.3701. It was down 4 percent against the euro, at 1.2355 euros.

Britain's decision to leave the EU launches what will be years of negotiations over trade, business and political links with the EU, which will shrink to a 27-nation bloc.

NERVOUS MARKETS

Crude oil prices and U.S. futures also took a big hit. The yen surged as much as 4 percent to the U.S. dollar as investors seeking safety snapped up the Japanese currency.

"The currency markets are particularly making nervous fluctuations and we will watch their activity very closely so that the ongoing movement will not continue, and I hope to see firm intervention whenever necessary," Taro Aso, Japan's finance minister, told reporters.

Other policymakers in Asia also expressed concerns and vowed to take measures to restore stability in the markets. South Korea's finance ministry said it will take "every available measure" to stabilize currency and financial markets.

Japan's Nikkei 225 finished the wild day at 14,952.02 down 7.9 percent while South Korea's Kospi sank 3.1 percent to 1,925.24. Hong Kong's Hang Seng index tumbled 4.4 percent to 19,949.83 and Australia's S&P/ASX 200 fell 3.2 percent to 5,113.20. Stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.

U.S. futures took a dive. Dow futures fell about 4 percent and S&P futures nosedived nearly 5 percent.

"Financial markets throughout the night have been chaotic to say the least," said Craig Erlam, senior market analyst at Oanda in London. "All eyes will now be on central banks around the world to see how they respond to these market developments, particularly the Bank of England and the Bank of Japan."

On Thursday, Wall Street finished with rallies as pre-poll forecasts showed that Britain would keep the EU membership. Asian stock markets opened the day higher but the mood turned sour as results started to show that the "leave" vote would win. As the results increasingly pointed to the EU exit, investors dumped stocks and other risky assets.

In other currencies, the dollar fell to 102.75 yen from 104.80 yen while the euro weakened to $1.105 from $1.132.

Benchmark U.S. crude plunged 5.3 percent, or $2.62, to $47.49 per barrel in New York. Brent Crude, the benchmark for international oil price, fell 3.8 percent, or $1.99, to $48.90 per barrel in London. AP business writer Kelvin Chan contributed to this report from Hong Kong.

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

RELATED FROM THE INQUIRER

British brace for economic repercussions of EU exit decision SHARES: 262 VIEW COMMENTS @inquirerdotnet Associated Press 04:04 PM June 25th, 2016


Supporters of the Stronger In campaign react after hearing results in the EU referendum at London’s Royal Festival Hall Friday, June 24, 2016. On Thursday, Britain voted in a national referendum on whether to stay inside the EU. (Rob Stothard/PA via AP)

LONDON— The British were warned for weeks that a vote to leave the European Union would result in economic pain. Now they’ll find out.

U.K. financial leaders are scrambling to reassure households, businesses and investors that they can contain the doom and gloom they had predicted in case of a British exit, or Brexit. The pound plunged to its lowest level in over 30 years on Friday, raising concerns about price inflation, and shares in the U.K.’s biggest banks and real estate builders posted double-digit declines as economists predicted the country would fall into recession.

READ: Pound dives as Brexit vote rattles forex market

Holly Miller, 32, said the vote would affect her economic life profoundly.

“I’m quite shocked by it all,” she said. “I’m just applying for a mortgage so we’re worried about that.”

READ: Britain votes to leave EU

In an early sign of problems, Moody’s Investors Service downgraded the U.K. outlook from “stable” to “negative.” The referendum result, it said, “will herald a prolonged period of uncertainty for the UK, with negative implications for the country’s medium-term growth outlook.”

Only the soothing reassurances of Bank of England Governor Mark Carney managed to ease the market carnage on Friday, as he pledged to stabilize markets if needed. But beyond the short-term market turmoil, the concern is what the vote means for the national economy and its 64 million people.

Before the vote, with campaigning in full swing, the British Treasury had estimated that an exit from the EU would cost the country the equivalent of 4,300 pounds ($5,900) per household. Tax receipts would face a 30 billion pounds shortfall that would have to be filled with tax increases on income and inheritance. House prices, the Treasury had said, could be as much as 18 percent lower by 2018 than if the country hadn’t left the EU.

Campaigners for “leave” dismissed this as scare-mongering. With the vote result confirmed, the “remain” camp sought to shift away from warnings and into damage control: trying to maintain confidence in the business community and among households.

IN LONDON

The City of London Corporation, which represents the financial services industry, a big maker of money and jobs for the country, sought to downplay the impact of the vote on the City, the square mile that is the heart of London’s financial hub.

“The City of London has thrived as a financial and trading center for more than a thousand years and will continue to do so,” Mark Boleat, policy chairman for the Corporation, said in a statement. “There will be no mass exit of banks and financial institutions from the square mile. While there will be uncertainty as Brexit negotiations go on we are still the financial center of the fifth-largest economy in the world.”

Some companies, particularly banks, had said they could move jobs away from London if Britain leaves the EU. That is likely to cost some jobs. How many is yet to be seen.

Economists slashed their forecasts for Britain, with some expecting a recession and next to no growth next year. That’s a sharp reverse for an economy that had been among the best-performing in the developed world in recent years.

The British economy could also find it more costly to raise money. Ratings agency Standard & Poor’s is considering downgrading the country because of the uncertainty related to the vote. A lower rating could mean higher borrowing costs for the government — and in the longer term, less money to spend on schools, hospitals and roads.

“The real question now is how badly the EU will punish the U.K. for this decision,” said Megan Greene, chief economist at Manulife Asset Management.

Others were looking on the bright side.

At First Property Group, a London-based real estate investment firm, Chief Executive Ben Habib, who backed leaving the EU, said the vote means Britain will now be able to drive a better deal with the rest of Europe.

Supporters of the “leave” campaign had accepted that there was a potential economic cost to leaving the EU, but have claimed it is a short-term price to pay in exchange for greater control of policies like immigration and borders.

“We now have the foundations for a very good negotiation with the EU,” he said, while minimizing the market turmoil. “The markets are gyrating, but these are gyrations and will not materially affect our economy.”

Habib said the drop in the pound would help British exporters by making their goods cheaper and more competitive in the global marketplace.

Habib’s colleague and friend George Digby, however, was less upbeat. He had voted to remain and said the best he could do was wait and see if there is significant economic damage, as his “remain” camp had claimed.

“I hope I am proved wrong on that score,” he said.


PHILSTAR

Brand refresh: PLDT, Smart usher in a new digital era By Eden Estopace (The Philippine Star) | Updated June 20, 2016 - 12:00am 0 0 googleplus0 0


PLDT chairman and CEO Manuel Pangilinan (fourth from right) leads the grand reveal of the new PLDT and Smart logos (below) together with his team (from left) PLDT chief finance officer Anabelle Chua, chief technology and information advisor Joachim Horn, Voyager president Orlando Vea, PLDT EVP and head of consumer business Ariel P. Fermin, chief procurement advisor Ahmar Soorty, PLDT group HR head Butch Jimenez, PLDT EVP and head of enterprise, international, and carrier business Eric Alberto, chief strategy officer Winston Damarillo, and First Pacific’s Christopher Young.

MANILA, Philippines – Abrand new logo, a brand new day.

The PLDT Building along Makati Avenue was lit up last week to showcase the new logos of PLDT Inc. and Smart Communications as the industry who’s who gathered at the nearby Rizal Ballroom of the Makati Shangri-La Hotel.

Call it the quintessential facelift of the digital age – lots of hype, fanfare, noise (online and offline) and a primal scream from the crowd as the ‘90s rock band Eraserheads, who last performed together in a concert about seven years ago, dished out song after song in a surprise reunion concert.

READ MORE...


PANGILINAN -A new beginning: The new PLDT and Smart logos signal a business shift to data-driven services.

“It’s not just the logo. The logo is a minor component,” PLDT Smart chairman and CEO Manuel Pangilinan told reporters, who were all straining to hear amid the blast from the stage and shrieking hyped-up crowd.

What changes are expected? “A lot,” he says. “Across the board – networks, service platforms, people, directions, etc. Our network’s got to improve, our services have to improve.”

A white paper published by Forbes in 2014 entitled “Refresh And Extend Your Brand” says it clearly: Companies doing brand refresh must extend the brand to create compelling experiences.

The PLDT Group’s new brand approach, the company explains in its news release, is anchored on a business shift to a new set of compelling data-driven services.


Scale model of the planned campus-style PLDT headquarters with complete facilities, including what looks like shopping areas and an airport, along with apartment complexes and high-rises.

Since news of the sale of the telecommunications business of San Miguel Corporation (SMC) to PLDT and Globe Telecom – a move that the two telcos long clamored and lobbied for quite fiercely – was announced early this month, hopes were raised that this country would finally see some significant changes in the country’s digital infrastructure.

For PLDT’s subscribers and enterprise customers, “compelling” only means one thing: true high-speed broadband at a lower cost.

How the 88-year-old conglomerate will make it happen is the story that it says would unfold in the next three years of a carefully planned “digital pivot.” The cost: A cool P43-billion in capital expenditure for this year alone, and around $100 million more thrown in following the buyout of SMC’s telco business and for the development and full utilization of the 700 Mhz frequency band.

A Brand-New Home

How the world’s biggest tech companies have turned their corporate headquarters into giant university-like campuses is part of the lore and the “wow” of Silicon Valley.

The PLDT Group wants to have its own campus that would place all its subsidiaries side by side with the headquarters – a community (we could only hope or surmise) with possible Valley-type ethos, dynamism, and a mindset focused on innovation and entrepreneurship.

“We haven’t decided on (the place) yet but I think we have an ongoing conversation to move out of Makati to the South,” Pangilinan says, adding that while nothing has been finalized yet including the property and the full cost of the development, he estimates the cost of the buildings alone to be in the order of around P10 billion.


Lead vocalist Ely Buendia of Eraserheads wows the crowd at the Smart-PLDT event.

While the crowd was high on ‘90s Eraserheads hits Huling El Bimbo, Toyang, Pare Ko, and Pop Machine, among others, few probably noticed that a scale model of the proposed PLDT campus was on display near the entrance of the ballroom, though covered for most part of the evening.

In this scale model, the new red and green colors of PLDT and Smart, respectively, are very prominent. It has telco towers (of course), buildings – low- and medium-rises as well as high-rises, shopping areas, gas stations, and what looks like apartment complexes.

“Rather than allow ourselves to be disrupted by new technologies, we are disrupting ourselves,” Pangilinan says.

The ‘Digital Dividend’

It has taken 33 years for PLDT to change its iconic logo and it was a seminal changing of the guards in an era that was defined and continue to be defined by swift and never-ending changes.

What many are actually looking at now, aside from dramatic improvements in internet speed, is how the company will contribute to the so-called digital dividend, now that it has access to additional spectrum. That is, if it could pass the scrutiny of the Philippine Competition Commission (PCC) that its purchase of 50 percent of the telco business of SMC is not anti-consumer.

A World Bank report released last month entitled “World Development Report 2016: Digital Dividends” reveals that the broader development benefits from using digital technologies – the Internet, mobile phones, and all other tools to collect, store, analyze, and share information digitally – have lagged behind.

“Digital adoption will not be enough,” the report says, adding that to get the most out of the digital revolution, countries must “strengthen regulations that ensure competition among businesses, by adapting workers’ skills to the demands of the new economy, and by ensuring that institutions are accountable.”

It is this kind of institutional accountability that is expected of the likes of PLDT – beyond the hype, the fanfare, the new logos, and all the corporate speak on digital lifestyles and pivots.

After all, in its own words, it describes itself as a company with “a passion to innovate.”

THE ERASERHEADS 'EL BIMBO'

 
Eraserheads - Ang Huling El Bimbo EraserheadsVEVO EraserheadsVEVO Subscribe21,489 Add to Share More 4,192,122 views 8,449 215 Uploaded on Oct 25, 2009 Music video by Eraserheads performing Ang Huling El Bimbo. (C) 1995 BMG Records (Pilipinas), Inc. Category Music License Standard YouTube License Music "Ang Huling El Bimbo" by Eraserheads (Google Play • iTunes)

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

RELATED FROM ESCAPEMANILA.COM

“Digital pivot” Plan Ushers in a New Era (and Logos) for PLDT and Smart


Top telecoms embark on a three-year transformation to the digital world with new logos.

Digital service provider PLDT Inc., formerly Philippine Long Distance Company, and its mobile service subsidiary Smart Communications, unveil new logos as part of its brand identity evolution.


MANNY V PANGILINAN

This is a decisive move towards a more data-driven business, reflecting the current demand of its increasingly digital customer base.

The new branding campaign embodies the PLDT-Smart three-year "digital pivot," a key part of which is the transformation of current networks into the ultimate in data infrastructure capabilities, which will eventually provide customers with a wide array of powerful digital services.

PLDT-Smart Chairman and CEO Manuel V. Pangilinan says, "Rather than allow ourselves to be disrupted by new technologies, we are disrupting ourselves. We have embarked on a digital pivot to enable us to serve the increasing needs of our people's digital lifestyle and the country's growing digital economy."

The telecom duo puts its money where its mouth is. The two companies have jointly made a commitment for capital expenditures for this purpose with a PhP43 billion allocation for 2016, and a further PhP100 million more in the pipeline. PLDT is in the midst of acquiring part of the telco assets of San Miguel Corp. which includes the right to use the 700 MHz frequency, more commonly referred to as the digital dividend. This will significantly increase the telcos' ability to provide powerful and widespread wireless communications such as 5G, even in rural areas. San Miguel has had control over this particular spectrum since 2005.

In addition, PLDT and its subsidiaries, including Talas Data Intelligence and Voyager Innovation, are in the midst of developing and providing more efficient and convenient financial and digital technology services to the Group's customers. Mr. Pangilinan reveals, "We shall lead the digital revolution by embracing the smart life within the organization, pursuing digital innovations and enabling our customers to go digital in their own ways. The biggest winners will be our customers who will have a growing range of choices at their fingertips."

New look


Manny V Pangilian at the unveiling of the new PLDT & Smart Logo

PLDT and Smart now have logos that represent the main thrusts of the Group's business, namely value for customers, meaningful innovations, and outstanding people.

The central figure in both logos is appropriately enough a stylized equilateral triangle, which also happens to be the symbol for Greek letter "delta," representing change. Mr. Pangilinan explains, "Taken together, these three pillars create tremendous energy that will enable our customers to achieve their limitless potential. The triangle’s three sides support each other. Thus, an inherent strength flows harmoniously among the sides to sustain the structure."

The previous PLDT logo was iconic, an abstraction of the telephone receiver with four sides, and had enjoyed a 33-year stint. The new logo heralds a welcome change in both look and services. For Smart, the new logo is only the third in its 25-year history.


PLDT LOGO

Recent PLDT innovations

PLDT is fast approaching its ninth decade, but it is still changing lives. At 88 years old, the company has always been at the forefront of communications technology.

It was the first to offer DSL subscribers with the ability to share data with a Smart mobile subscription

It launched a wide array of web-capable devices including the Telpad, an online tablet hub that controls home digital services, the TVolutions Stick which converts television sets for use as personal computers, and FamCam, a mobile-enabled CCTV that streams home security footage wirelessly

Its subsidiary, Smart, pioneered the deployment of LTE-A, which enabled it to offer 4.5G service in Boracay

It offered businesses with a series of digital enterprise services through its SMACS (Social, Mobility, Analytics, Cloud, and Security) platform, including the Philippines' first mobile app using geo-fencing called MarketBuilder


PHILSTAR (COMMENTARY)

‘Balimbing’ businessmen SPYBITS By Babe G. Romualdez (The Philippine Star) | Updated June 21, 2016 - 12:00am 0 0 googleplus0 0


ELLEN TORDESILLAS WONDERED: Mar Roxas concedes. Why doesn’t Roxas just pay fine for SOCE non-filing? Photo by Luis Liwanag. READ HERE: COURTESY OF ELLEN TORDESILLAS BLOG

Our spies within the business community tell us that the Liberal Party’s difficulty in filing its statement of contributions and expenditures (SOCE) is because businessmen who contributed to the campaign kitty of the national candidates and the Liberal Party (LP) are shying away from confirming their contributions.

We’re told that those who had originally promised to sign the forms that would attest to their contribution had backed out because they do not want the administration of president-elect Rodrigo Duterte to put them in their “S” list.

In fact, several of the businessmen who placed bets on the LP horse are all trooping to Davao City to pledge their support to the incoming president — in yet another demonstration of the typical Filipino style of “balimbing” or turncoatism that usually happens when a shift in political power happens.

Our friend inside the LP told us that aside from the non-confirmation from businessmen, the LP’s problem to comply with the SOCE on time is aggravated by the inability of certain LP people to produce supporting documentations to explain the expenses and the source of donations.

The issue over the SOCE and the LP’s request for an extension has precipitated the decision of Comelec commissioner Robert Christian Lim to resign as head of the poll body’s campaign finance office because the extension accorded to the LP is not only “unfair to other candidates and parties who complied with the prescribed (filing) period,” but also because it would be a “reversal of the Commissions own resolution on the matter,” Lim said.

READ MORE...

In October last year, the Comelec issued Resolution No. 9991 which repealed previous Comelec Resolutions No. 9849 and No. 9873, Minute Resolutions 13-0775 and 13-0823 that previously allowed the late submission of the SOCE.

Resolution No. 9991 was issued precisely to prevent a repeat of the late filings that happened in the 2010 and 2013 elections, clearly stating that “The June 8 deadline (of SOCE filing) shall be final and non-extendible. Submission beyond the period shall not be accepted.”

In fact, just a few days before the June 8 deadline, Comelec spokesperson James Jimenez categorically stated that the deadline is a non-extendible period. Under Republic Act 7166, no person elected to any public office shall be able to occupy his position unless he has filed his SOCE to show the itemized contributions and expenses of a candidate relative to the elections. That means all LP winners — from the vice president down to senators and congressmen — cannot be sworn in if the law and Resolution 9991 were to be followed.

Many laud the firm resolution of commissioner Lim to insist on adhering with the provisions of Resolution 9991, that said any submission beyond the June 8 deadline shall not be accepted. By refusing to follow the law that they have set themselves, the Comelec’s — or at least the commissioners who voted for the extension — credibility and integrity has been thoroughly undermined.

This latest development certainly does nothing to assuage the suspicion among many voters that Comelec is deliberately turning a blind eye to the cheating allegations that happened in the recent elections.

For some reason, only the LP failed to comply with the SOCE filing according to the deadline, and one would have thought that such a well-oiled political organization like the Liberal Party would be the first to submit their SOCE —strengthening suspicions that billions of public funds were used to finance the campaign of LP bets.

The only acceptable reason for the LP’s inability to submit on time would be if a fire razed their headquarters or if the campaign treasurer who is supposed to prepare the filings, suddenly died, sources said.

Many are certainly disturbed by the waffling the Comelec displayed when it extended the deadline – a decision that definitely favored the Liberal Party that is now on the brink of losing its grip on power now that President Aquino’s term is about to end, with senators and congressmen also having aligned themselves with the PDP-Laban and vowing to cooperate with incoming Speaker Pantaleon Alvarez and presumptive Senate President Koko Pimentel.

Just recently, an LP stalwart bragged to us at a function that they are confident of getting back into power “sooner than later.”

Days after it became clear that Mayor Duterte would be the runaway winner, Spy Bits received chatter that moves have been planned to “weaken the position” of the president-elect with Leni Robredo to act as the “battering ram.”

This is probably the reason why the mayor has been rather cool to the overtures of the Robredo camp to give her a Cabinet position, with Duterte saying “no” and pointing out that the VP-elect should understand that she is from “the opposite side.”

Diehard supporters of the Davao mayor had also expressed opposition, saying that giving Leni a Cabinet portfolio would make her part and parcel of the Duterte administration.

Duterte “loyalists” also say they could not forget how the “Ro-Ro” tandem characterized the recent elections as a fight between good and evil — with the Roxas-Robredo ticket presumably the “good,” while the rest, including the Duterte-Cayetano team, had been cast in the “evil” mold.

Being a seasoned politician, the president-elect very well knows his ardent “critics” are closely watching and waiting to have him deposed, perhaps remembering the time of Erap Estrada as president with Gloria Arroyo as vice president, observers noted, adding that appointing Robredo to any Cabinet position — especially something as critical as the DSWD or the National Anti-Poverty Commission — is tantamount to giving her “a foot in the (Palace) door.” +++


Chief News Editor: Sol Jose Vanzi

© Copyright, 2016 by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved


PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE