Philippines launches new long-term U.S. dollar bonds issue

MANILA - The Philippine government launched an offering of 10.5-year and 25-year U.S. dollar-denominated bonds on Wednesday to raise funds needed to mitigate the economic damage of the coronavirus pandemic.

The long-term benchmark bonds would carry a yield of around 100 basis points above the 10-year U.S. Treasury benchmark, based on the government's initial guidance.

National Treasurer Rosalia De Leon could not say at this stage how much the government aimed to raise from the bond sale, which follows a similar U.S. dollar bond offering in April that raised $2.35 billion. 

The Philippines, one of Asia's most active issuers of sovereign debt, would use the proceeds from the bond sale to support its budget, the Bureau of the Treasury said.

Both chambers of congress have approved a record 4.5 trillion pesos ($93.7 billion) budget for 2021, part of which will be used to purchase COVID-19 vaccines as the government aims to immunize a third of its 108 million population.

Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank and UBS are joint bookrunners, IFR reported. 

Fitch assigned a 'BBB' rating to the country's proposed USD bonds, while Moody's gave the Philippines' global dual-tranche bond offerings a 'Baa2' rating.

-reuters-

PES 2015 meeting: Focusing on structural reforms, inclusive growth

MANILA – The Philippine Economic Society (PES) held its annual meeting on Tuesday, focusing on structural reforms and inclusive growth.

Former Finance Undersecretary Romeo Bernardo said that generally, there is a sense of confidence that the Philippines "is in a good place."

The challenge now is how to create more growth drivers that will create an environment for more inclusive growth.

“Even though there are challenges in the global environment, the Philippines is quite resilient, it has good growth drivers, it has healthy external accounts, and healthy banking institutions. The real question in people’s minds is how do you build on these things moving forward?” he told ANC's "Market Edge."

source: www.abs-cbnnews.com

Steve Forbes sees more billionaires emerging from Philippines

MANILA – Expect more billionaires to come from the Philippines in the coming years.

Steve Forbes, chairman and editor-in-chief of Forbes Media, said that as the Philippine economy continues its growth, the country will produce more Filipino billionaires.

“As the economy prospers, yes. But the key thing is incomes across the board in this country will continue to rise, and that will show the world that this will be a model. You can have a good political system and good economic growth and I think that model is badly needed these days,” Forbes told ANC's Cathy Yang in an exclusive interview at the sidelines of the 15th Forbes Global CEO Conference on Monday.

The prestigious conference is being held in the Philippines for the first time, bringing together some of the world's wealthiest entrepreneurs.

"It’s a very appropriate one...The Philippines is a tiger now in terms of Asian economies. Other economies around the world seem to be slowing down, getting in trouble. Philippines still has a full head of steam and looks like you’re going to continue that in the future, so we want to be where the action is,” said Forbes.

Forbes said the Philippines will continue to experience growth due to reforms, which he also expects to continue despite a change in government next year.

Currently, the richest billionaires in the Philippines have a combined net worth of nearly $50 billion (P2.3 trillion).

In the latest Forbes' 50 richest Filipinos list, 17 entrepreneurs from the Philippines breached the $1 billion-mark. SM's Henry Sy is the country's richest man with a net worth of $14.4 billion.

For its latest global rich list, Forbes listed a record 1,826 billionaires, including 11 well-known tycoons from the Philippines and one young Filipino-American tech entrepreneur.

'SLASH TAXES'

Forbes will be having a one-on-one meeting with President Aquino on Wednesday, and he said he will be saying one thing to the President: slash taxes.

Forbes believes that the country's tax system needs improvement, stressing that government has room to lower corporate and income tax rates without risking losing revenues.

“That’s how you get a vibrant economy. Everyone comes out ahead. When you have a bigger economy, a more vibrant economy, you get more revenues, so the government does well. But key thing is that people do well, the economy does well,” he said, noting that a simplified tax system is one way to get more revenues.

"When you make it easy to collect, and have a low rate where people don’t have to focus on trying to avoid it, good things happen,” he added.

The Philippines has the highest income tax rate in the ASEAN region with the personal income tax at 32 percent.

source: www.abs-cbnnews.com

How furniture industry contributes to PH economy

MANILA – The Philippine economic growth has raised most of its sectors, one of which is the ever-growing furniture industry.

With real estate developments popping up around the country, there has also been an increase in proliferation and promotion of Filipino-made products both locally and globally.

According to the Chamber of Furniture Industries of the Philippines, the sector has given its fair share of economic contributions.

In 2014, the furniture industry was able to create nearly 2 million jobs.

It has also given assistance to communities in the various regions where materials come from, and is considered one of the top exports of the country.

“It’s very important to support local talent because we are known as the Milan of Asia. The creativity of the people is being nourished in the Philippines, and the special skills from the grassroots level up to the higher level—these all contribute to the economy,” said Salvio Valenzuela, executive director of the Chamber of Furniture Industries of the Philippines, on ANC's "On The Money."

The industry, however, has also faced several stumbling blocks that have hindered its growth.

One of the issues that affected the sector is the congestion in Manila ports, which handicapped delivery of products around the country. The port congestion also raised costs of trucking services.

The disruption in electricity also affected local production.

Valenzuela said side from product development, getting to know those in the industry as well as finding avenues to find products is a good way to help furniture businesses.

“We, in partnership with government, are helping all the SMEs in the furniture industry in terms of basic manufacturing, product development, and in marketing, so we will able to continue the production line and offer products globally that are acceptable in international standards,” he said.

source: www.abs-cbnnews.com

PSEi jumps 3.6 pct as investors cheer Q2 GDP data

MANILA, Philippines - Philippine stocks surged on Thursday, as investors cheered the better-than-expected second quarter GDP growth figures.

The main index was up 206 points or 3.59% to close at 5,944.21. News that the Philippine economy grew 7.5% in the second quarter boosted investor sentiment and helped the PSEi post its biggest one-day gain since June.

The PSEi had been the worst performer in Asia in recent days, even falling to a nine-month low.

On Thursday, the biggest gainers included SM Investments, which rose 4.26% to P661.

BDO and Metrobank jumped on an "outperform" recommendation from Macquarie. BDO rose 7.48% to P73.30, while Metrobank was up 4.84% to P80.20.

GT Capital Holdings surged 13% to P780, while LT Group jumped 12.5% to P18. The two conglomerates will be included in the PSEi starting September 16.

Alliance Global also went up 6% on news of the backdoor listing of its liquor subsidiary Emperador.

On the other hand, shares of Meralco and Belle Corp. fell after it was announced the two companies will dropped from the PSEi.

At the foreign exchange market, the peso ended unchanged from Wednesday's close at P44.75 against the US dollar.

Asian stocks rebound from heavy losses
Asian markets saw a mild bounce on Thursday after suffering heavy selling pressure this week, but traders remained on edge ahead of a possible military strike on Syria.

The dollar also benefited as fears eased over the impact of an attack on the Middle Eastern country, which is accused of using chemical weapons on its own people.

India's rupee was slightly off record lows touched Wednesday as investors fretted over the country's stuttering economy as well as the future of the US Federal Reserve's stimulus programme.

Tokyo rose 0.91 percent, or 121.25 points, to 13,459.71, while Sydney added 0.10 percent, or 5.2 points, to close at 5,092.4 and Seoul advanced 1.22 percent, or 23.02 points, to 1,907.54.

Hong Kong climbed 0.84 percent, or 180.13 points to 21,704.78, but Shanghai fell 0.19 percent, or 4.07 points, to 2,097.23.

Buying sentiment was given a boost by a rally on Wall Street, which ended three days of losses, as energy companies benefited from a surge in oil prices.

The Dow rose 0.34 percent, the S&P 500 climbed 0.29 percent and the Nasdaq added 0.41 percent.

US President Barack Obama, who had warned the use of chemical weapons by Syria would cross a "red line", said Washington had definitively concluded that the Assad regime was to blame for last week's attack that killed hundreds of people.

However, he said Wednesday he had not yet decided whether to strike.

His comments, which were more cautious than recent statements, come as political uproar in London cast doubt on whether Britain would join any such action.

Kengo Suzuki, forex strategist at Mizuho Securities, told Dow Jones Newswires: "Excessive risk aversion is unwinding."

Anxiety about Syria initially caused the dollar to weaken earlier this week as investors bought alternative safe-haven currencies including the Swiss franc and yen.

"I think the general feeling is that the United States won't be as heavily involved in Syria as it was when it invaded Iraq back in 2003," he said. - With reports from ANC and Agence France-Presse

source: www.abs-cbnnews.com

Less fun shopping in the Philippines: Country slides in eyes of global retailers

MANILA - The Philippines' global stature as a shopping destination fell sharply this year despite the growing middle-class and hefty consumer demand, according to A.T. Kearney.

In its latest Global Retail Development Index, the consulting firm said the Philippines ranked 29th this year with an overall score of 43.4 points, down from last year's 16th place.

The annual study ranks the top 30 emerging markets on a zero-to-100-point scale - the higher the ranking, the more urgency for retailers to enter the country.

The scores are based on four variables: economic and political risk, market attractiveness, market saturation, and time pressure.

The Philippines scored poorly in terms of market attractiveness, with 28.3 points, and time pressure, 38.8 points. The country however scored slightly better in terms of country risk at 54.6 points, and market saturation, 52.5 points.

While salaries remain low in the Philippines, household incomes are bolstered by overseas remittances that help maintain positive economic growth, A.T. Kearney said.

"The bulk of this income goes to retail spending. The domestic job market is improving as the outsourcing industry grows, thus bringing more dual-income, middle-class families and young professionals with disposable incomes to urban areas," the consulting firm said.

In the first quarter of the year, the Philippine economy grew by 6.4 percent on the back of a 7.1 percent increase in consumer spending, which comprised two-thirds of the country's gross domestic product.

A.T. Kearney said most of retailers and shopping centers in the Philippines are in urban areas, with about half of total retail sales concentrated in Metro Manila.

"As more real estate becomes available in city centers, foreign firms have entered, including Japanese clothing retailer Uniqlo, UK women's apparel seller Topshop, Japanese convenience store chain FamilyMart, and US-based sandwich shop Quiznos," the consulting firm said.

According to A.T. Kearney's latest retail index, the most attractive market was Brazil, followed by Chile, China, Uruguay, India, Georgia, United Arab Emirates, Oman, Mongolia and Peru.

Other Asian countries that figured in the poll were Malaysia at 11th place, and Indonesia at 16th. Thailand and Vietnam were excluded from this year's list.

The report said Asia Pacific continues to have impressive growth potential because of its high economic growth rates, a burgeoning middle class, and rising consumer spending, particularly in China, India, Malaysia and Indonesia.

"Asia has been a target for Japanese and Korean retailers seeking to offset domestic declines," A.T. Kearney said.

"Given the accelerated growth rates of developing countries compared to the anemic growth in European and North American markets, global retailers must have a strategy for expansion into developing markets," Michael Moriarty, A.T. Kearney partner and study co-leader said.

In the past five years, Wal-Mart, Carrefour, Tesco and Metro Group saw their revenues in developing countries grow 2.5 times faster than in their home markets, Moriarty said.

source: interaksyon.com

Philippine economy outstrips expectations, is second-fastest in Asia, after China

The Philippine economy grew by 6.4 percent in the first quarter of the year, making it Asia's second fastest-growing economy after China's.

The Philippines' first-quarter expansion was also the fastest among Asean member-countries, according to Malacanang deputy spokesperson Abigail Valte.

"The better than expected economic growth was due to sustained private sector confidence and accelerated government spending. There were healthy increases in the services sector, complemented by growth in exports and increases in household expenditures," Valte said.

"The first quarter GDP figure validates the optimistic outlook of the President and his economic team," she said.

The Palace spokesperson said the country's first-quarter growth is also the highest in a non-election year since 2006.

"We are confident that the positive trajectory of our GDP will be sustained in the latter quarters of the year, which have traditionally shown more robust and dynamic economic performance," Valte said.

Socioeconomic Planning Secretary Arsenio Balisacan said the Philippines should be on track to meet, if not exceed, the 2012 growth target of five to six percent.

source: interaksyon.com