Business News:
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Peso rides out Greece, China crises
By Lawrence Agcaoili (The Philippine Star)
Updated July 15, 2015 - 12:00am
MANILA, Philippines - The Philippine peso has been the second least volatile among Asian currencies so far this year amid the debt crisis in Greece and the stock market collapse in China, according to data from the Bangko Sentral ng Pilipinas (BSP).
The data showed the volatility of the peso or the degree of daily fluctuation stood at 0.77 percent as against Chinese yuan’s 0.37 percent – the most benign among major currencies in Asia.
The most volatile currency in the region is the New Zealand dollar at 4.12 percent followed by the Swiss francs at 3.52 percent; euro, 3.14 percent; Indonesian rupiah, 2.1 percent; British pound, 1.95 percent; and Japanese yen, 1.68 percent.
BSP Governor Amando Tetangco Jr. told reporters on the sidelines of the 2015 Awards Ceremony and Appreciation Lunch for BSP Stakeholders the peso is “moving together basically with other regional currencies.”
“There’s no major change. There is some weakening today, then some recovery tomorrow. That meant that the movements are within range. There is no blow up in terms of the exchange rates in the Philippines as well as the exchange rates in the rest of the region,” Tetangco said.
The BSP’s policy is to let the market determine the value of the peso although it does intervene if needed to avoid too much fluctuation.
“This should, to me, indicate that the funds are not moving out of these countries or economies in a big way. There may be some declines in stock markets, but the funds, I would say, tend to stay within the country,” he said.
The BSP chief pointed out the Philippine stock and foreign exchange markets would remain volatile amid recent developments involving the Greece debt crisis.
Euro zone leaders reached a unanimous decision agreeing to a three-year bailout deal worth between 82- and 86-billion euros for Greece. The agreement, however, would have to be approved by the Greek parliament and the Eurozone countries.
“The agreement in the EU, forestalling Grexit, takes away one layer of market uncertainty. The market will continue, however, to watch out for the details to implement this deal,” Tetangco said.
Likewise, he added markets would also look at other developments including the impending rate hike by the US Fed as well as the stock market collapse in China.
“The markets will also listen for signals from the Fed on timing of lift off and whether the government support in China is sufficient to fully arrest stock market declines,” he said.
He reiterated the country’s strong macroeconomic fundamentals would allow the Philippines to survive external shocks.
“Our economy has fundamental strength. The inflation is seen to remain low. Pockets of potential financial stability pressures also appear to be relatively mild,” Tetangco said.
Likewise, he said monetary authorities have enough tools to address any excessive volatility.
“We have policy space and can quickly put in place measures should such be needed to support growth, manage inflation or contain financial stability pressures,” Tetangco said.
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Peso rides out Greece, China crises | Business, News, The Philippine Star | philstar.com
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Philippine stocks take cue from regional rally
By Iris C. Gonzales (The Philippine Star)
Updated July 15, 2015 - 12:00am
MANILA, Philippines - The stock market followed the positive sentiment from overseas bourses as the Greece bailout plan spurred another global rally for the second straight session.
The benchmark PSEi closed at 7,538.76 points, 42.43 points higher or an increase of 0.57 percent. The All Shares index closed at 4,296.63, higher by 27.85 points or 0.65 percent.
Luis Limlingan, analyst at Regina Capital said the market tracked the overnight sentiment from the overseas markets on the back of the European Union reaching an agreement on the Greece bailout.
“The market is also reacting more positively to the better than expected import data reported by China. Imports slipped 6.1 percent, but came in well above forecasts for a 15-percent decline and following a 17.6 percent plunge in the previous month,” Limlingan said.
“The 7,540 remains a key resistance level and the index needs to close above this level for the next couple of days. We still think the market would like to observe the events surrounding Greece and be on the lookout for China GDP, which comes out tomorrow,” he added.
Jason Escartin of F. Yap Securities said the PSEi surged early in the day to reach a high above 7,560 ahead of the official release of first half earnings.
“It then closed at 7,538 as some players locked-in their gains,” he said.
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Philippine stocks take cue from regional rally | Business, News, The Philippine Star | philstar.com
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Palawan seeks P25-B investments over 10 years
By Richmond S. Mercurio (The Philippine Star)
Updated July 15, 2015 - 12:00am
MANILA, Philippines - Palawan, voted as the world’s best island in 2014 by readers of a top global travel site, is seeking at least P25 billion worth of investments from the private sector over the next 10 years as it hopes to equal the progress of the likes of Cebu and Davao and at the same time more than triple its current annual tourist arrivals.
“The provincial government of Palawan is launching an aggressive campaign to promote investments in the province. We believe the only way to address poverty is by inviting companies to set up businesses in the province to be able to generate employment and income opportunities for the Palawenos,” Palawan Gov. Jose Chaves Alvarez said in a briefing yesterday.
To become a premier province in the country and a true world-class destination, Alvarez said the local government of Palawan is looking to tap the wealth of local and foreign companies.
“The province of Palawan needs to catch up with Northern Mindanao and Central Visayas. We are left behind by almost 30 years but we intend to catch up in the next 10 years whatever progress we have in Northern Mindanao, which is Cagayan de Oro and Davao, and the bustling city of Cebu,” he said.
“By the time I assumed office in 2013 to June this year, a total of P2.3 billion in private investments have been poured in the province but this is not enough. We need to generate more investments in order to fasttrack our economic development,” Alvarez added.
Alvarez estimated at least P25 billion worth of total private sector investment or about P2 billion a year is needed to beef up infrastructures in the province.
He said they are targeting to more than triple the current one million annual tourist arrivals to about 3.5 million over the next 10 years.
Alvarez said the tourist influx is expected to generate some P100 billion in revenues for local government.
For its part, he said the provincial government is also working to ensure that key infrastructures are in place to accommodate the inflow of private investments in Palawan.
Palawan is spending P2.3 billion to improve the province’s water system, P2.7 billion for road construction and maintenance, and about P1 billion to put up 15 new hospitals.
The provincial government of Palawan is also collaborating with the Department of Tourism, University of Asia and the Pacific, and the United States Agency for International Development to showcase the province to local and foreign investors through an investment forum and a travel and trade expo.
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Palawan seeks P25-B investments over 10 years | Business, News, The Philippine Star | philstar.com
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DBS retains Philippine growth forecast
By Lawrence Agcaoili (The Philippine Star)
Updated July 15, 2015 - 12:00am
MANILA, Philippines - Singapore-based DBS retained its 2015 growth forecast for the Philippines at six percent amid the sharp 17.4-percent decline in merchandise exports last May.
“Overall GDP growth may still come in around six percent this year,” DBS said.
“While a moderation in export growth is widely anticipated this year, the May figure still came as a huge disappointment,” DBS said.
It said export growth could be barely in the positive this year after expanding by an average of 8.7 percent over the last three years.
“High base effects certainly played a part, but the current state of global demand also means it is getting harder to sustain high export growth year after year,” the investment bank said.
The country’s merchandise exports fell the most in three years after contracting by 17.4 percent to $4.9 billion in May from $5.9 billion in the same month last year amid the global economic slowdown.
This translated to a five-percent decline in merchandise exports to $24.77 billion in the first five months of the year from $23.54 billion in the same period last year.
DBS pointed out sustained strength in the overall manufacturing sector would help ease some burden off from services and construction sectors.
“More importantly, note that contribution from net exports to overall GDP growth has been fairly small in recent years Private consumption and investment growth have been pretty much the drivers of the 6.6-percent average growth in 2012-14,” it said.
Last May, DBS slashed the country’s GDP growth forecast to six percent instead of 6.3 percent after the lower-than-expected economic expansion in the first quarter of the year.
The country’s GDP growth slowed down to 5.2 percent in the first quarter of the year from 5.6 percent in the same quarter last year amid weak government spending.
The government expects the economy to grow between seven-and eight-percent this year.
The Singapore-based investment bank sees the country’s inflation falling within the two-to four-percent target set by the Bangko Sentral ng Pilipinas (BSP).
Inflation eased to a 20-year low of 1.2 percent in June from 1.6 percent in May.
DBS said the BSP’s Monetary Board would likely keep key policy rates steady over the near term.
“No monetary policy response is likely in the near-term. It is interesting to see, however, if the central bank will spend more time discussing the relative strength of the peso,” the bank said.
The overnight borrowing rate is currently pegged at four percent while the overnight lending rate is at six percent.
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DBS retains Philippine growth forecast | Business, News, The Philippine Star | philstar.com
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National Development News:
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Phase 2 of Mactan airport project starts in December
By Iris C. Gonzales (The Philippine Star)
Updated July 15, 2015 - 12:00am
MANILA, Philippines - The GMR-Megawide consortium building the new passenger terminal at the Mactan-Cebu International Airport expects to start construction of the second phase of the project in December this year, its top official said.
The consortium started the first phase last June 30 after six months of delay, said GMR Megawide Cebu Airport Corp. (GMCAC) president Louie Ferrer.
He said the government has agreed to hand over the second and final parcel in December, after which the consortium would be able to commence construction of the second phase of the project.
Despite the delay, the consortium would still try to complete the project as fast as it can without comprising quality, he said.
“Instead of a one-year delay, it’s a six-month delay but we will still try to finish it as soon as we can,” Ferrer said.
Asked if it was possible to complete the project before the 2018 target date, Ferrer said it was unlikely given the delay in the government’s delivery of the project.
The target is to open the terminal by February 2018 but this was moved to May 2018. Construction was delayed due to the unavailability of the project site, which, in turn, was due to the delay in the relocation of Philippine Air Force (PAF) structures located inside the proposed site of the new terminal.
The consortium was supposed to start construction last Jan. 30, but this was moved to June 30.
At least 17 Air Force structures are inside a 44.9-hectare area that spans the total area of the Mactan airport expansion project, GMCAC chief executive advisor Andrew Acquaah-Harrison earlier said.
One PAF building, for instance, sits in the middle of the Terminal 2 area. This structure serves as base terminal for military flights that land in Cebu.
One of the big-ticket infrastructure projects of the Aquino administration, the new Mactan-Cebu International Airport terminal has an estimated project cost of P17.52 billion.
It aims to address the congestion at the airport, which registered 6.9 million passengers in 2013, or beyond its design capacity of 4.5 million.
The new passenger terminal aims to increase the capacity of the airport to eight million passengers per year from its existing annual capacity of 4.5 million.
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Phase 2 of Mactan airport project starts in December | Business, News, The Philippine Star | philstar.com
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SCS/West PH Sea News:
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UN tribunal gives China another chance to respond
By: Matikas Santos
INQUIRER.net
07:04 PM July 14th, 2015
The United Nations (UN) tribunal in The Hague, Netherlands, has given China another chance to respond to the arbitration case filed by the Philippines over the West Philippine Sea dispute despite Beijing’s repeated refusal to participate.
“The Arbitral Tribunal has decided to provide China with the opportunity to comment in writing, by Monday 17 August 2015, on anything said during this Hearing on Jurisdiction and Admissibility,” it said in a statement posted online on Tuesday.
China has been given several opportunities in the past to submit comments to support their side but they have stood firm on their position to not participate in the proceedings.
The Philippine deliberation, led by Foreign Affairs Secretary Albert del Rosario, presented its arguments when the tribunal commenced hearing the case on July 7 and concluded on July 13.
“The Arbitral Tribunal now enters its deliberations and is conscious of its duty under the Rules of Procedure to conduct proceedings to avoid unnecessary delay and expense and to provide a fair and efficient process,” the statement said.
The tribunal is expected to render a decision on whether the court has jurisdiction of the case before the end of the year.
Despite China’s firm refusal to participate in the proceedings, the tribunal says it has exerted all efforts to ensure China is updated and informed of the status of the case.
“The Arbitral Tribunal has kept China updated on all developments in the arbitration and … remains open to China to participate in these proceedings at any stage. Transcripts of the hearing have been made available to China, and China has been invited to comment on anything stated at the hearing,” it said.
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UN tribunal gives China another chance to respond | Inquirer Global Nation
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