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BAIPHIL Market Watch – 24 April 2017

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BAIPHIL MARKETWATCH

24 Apr

2017

Legend Improvement / Up Deterioration / Down No Movement

FINANCIAL MARKETS AT A GLANCE

PHILIPPINES

Financial Rates Current Previous

USD/PHP 49.7600 49.8300

30-D PDST-R1 2.6846% 1.9237%

91-D PDST-R1 2.7518% 2.8143%

180-D PDST-R1 2.7036% 2.7019%

1-Y PDST-R1 3.0071% 3.0000%

10-Y PDST-R1 5.3018% 5.2304%

30-D PDST-R2 2.6714% 1.9010%

91-D PDST-R2 2.7518% 2.0500%

180-D PDST-R2 2.7036% 2.4155%

1-Y PDST-R2 3.0071% 2.7974%

10-Y PDST-R2 5.3018% 5.2304%

Stock Index Current Previous

PSEi 7,578.16 7,563.45

Market Cap (Php Trillion) 12.806 12.775

Total Value (Php Billion) 32.086 5.941

PSEi Performers Last Price % Change

Top Gainers

DMCI Holdings Inc 12.78 + 4.24

GT Capital Holdings Inc 1,208.00 + 2.81

Jollibee Food Corporation 208.00 + 1.46

Top Losers Alliance Global Inc 14.70 - 0.54

Puregold Price Club 41.75 - 0.60

Bank of the Phil Islands 104.70 - 1.04

ASIA-PACIFIC


NIKKEI 18,620.75 18,430.49

HANG SENG 24,042.02 23,921.39

SHANGHAI 3,173.15 3,168.53

STRAITS 3,139.83 3,133.34

SET 1,570.02 1,571.68

JAKARTA 5,664.48 5,600.83

Currency Exchange Current Previous

USD/JPY 109.0700 108.4100

USD/HKD 7.7748 7.7750

USD/CNY 6.8845 6.8778

USD/SGD 1.3966 1.3959

USD/THB 34.3500 34.3200

USD/IDR 13,305.00 13,290.00

REST OF THE WORLD


FTSEuro First 300 1,484.34 1,485.71

FTSE 100 7,114.55 7,118.54

DAX 12,048.57 12,027.32

CAC 40 5,059.20 5,077.91

DOW JONES 20,547.76 20,578.71

S&P 500 2,348.69 2,355.84

NASDAQ 5,910.52 5,916.78

Various Current Previous

EUR/USD 1.0726 1.0711

GBP/USD 1.2812 1.2799

Gold Spot (USD/oz) 1,285.10 1,281.90

Brent Crude(USD/bbl) 51.96 52.99

3-M US Treasury Yield 0.76% 0.77%

10-Y US Treasury Yield 2.24% 2.24%

30-Y US Treasury Yield 2.90% 2.89%

PHILIPPINES

The local equities market went up by 0.19%, closing at 7,578.16 as it took advantage of the latest gains, in addition to keeping

track of external developments. The local stock barometer firmed up for the second straight day yesterday, tracking regional markets which were mostly upbeat on US corporate and economic data. The mainshare Philippine Stock Exchange index (PSEi) added 14.71 points or 0.19 percent to close at 7,578.16 on Friday. “The Philippine markets tried to replicate the positive performance of the United States as overnight, financials and industrials led the rally with the S&P 500 climbing 17.67 points, or 0.8 percent, to 2,355.84. US stocks finished higher on Thursday as strong economic data and corporate earnings lifted the main benchmarks,” added Luis Gerardo Limlingan, managing director at Regina Capital Development. Value turnover was heavy at P32 billion as this included the P24.7-billion block of Metrobank shares acquired by GT Capital. It also included a P1.32-billion block sale of COL shares to Daiwa. There was also net foreign selling of P237.67 million for the day. The day’s modest gain was led by the holding firm, services and property counters; while the financial, industrial and mining/oil counters slipped. There were 107 advancers that edged out 89 decliners. Meanwhile, 44 stocks were unchanged. The PSEi was led higher by DMCI, which racked up 4.24 percent, while GT Capital rebounded by 2.81 percent. JG Summit, ALI, Jollibee and Globe Telecom all gained over 1 percent. SM Prime, Megaworld, Metro Pacific and Ayala Corp. also contributed to the PSEi’s gains. Outside of the PSEi, MRC Allied surged by 11.76 percent, while Cebu Air went up by 3.7 percent. Meanwhile, SMIC and URC both tumbled by over 1 percent, while BDO and Security Bank also slipped.

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The Philippine peso strengthened against the dollar as net foreign selling helped drive the local currency. The USDPHP fell by 0.14%, closing at the 49.76 level. The Philippine peso shed 5.45 percent of its value against the US dollar in the first quarter of 2017 from a year earlier, data released by the Bangko Sentral ng Pilipinas (BSP) showed Friday. In January to March, the peso traded at P50:$1 on average, weaker by 5.45 percent compared with the P47.28:$1 in the first quarter of 2016. "On a quarter-on-quarter basis, the peso weakened by 1.79 percent from the previous quarter's average of P49.11:$1," BSP Deputy Director for Economic Research Dennis Lapid said in a press briefing at the BSP headquarters in Manila. Lapid noted the peso traded on a weak note primarily due to the US Federal Reserve rate hike in March and expectations for more and faster rate increases this year, as well as persistent political noise in Europe and strong dollar requirements by domestic companies. "Nonetheless, the sustained inflows of foreign exchange from overseas Filipino remittances, foreign direct investments, BPO and tourism receipts as well as ample level of country's gross international reserves and robust economic growth, continued to provide support for the peso," the central bank official said.

In the local fixed income market, prices of government securities fell as investors took caution ahead of the 1st round of French

elections this weekend. On average, yields went up by 24.81 bps led by the short-end of the curve at 49.3 bps. More foreign capital went out of the Philippines in March for the second straight month on the back of profit-taking and higher

interest rates in the United States, the Bangko Sentral ng Pilipinas (BSP) said. The net outflow of so-called “hot money” reached $567.53 million during the first quarter and hit a four-month high in March as more foreign portfolio investment left the country due to the orders to close down or suspend a number of mining operations as well as rising domestic inflation. At the end of the first three months, the $4.07-billion outflows of portfolio investment exceeded the $3.5-billion inflows, Bangko Sentral ng Pilipinas data released late Thursday showed. “This is attributable mainly due to profit-taking and continued uncertainties arising from international and domestic developments such as the anticipated interest rate increase in the United States and the closure order for several mining companies in the country,” the BSP said in a statement. As such, the net outflow posted as of end-March reversed the $395.99 million in net inflow a year ago. To recall, Environment Secretary Regina Paz Lopez in February ordered the closure of 23 mining operations as well as the suspension of five others in 10 provinces. A week later, Lopez also ordered the cancellation of 75 mineral production sharing agreements (MPSAs) entered into by the government with mining companies. The interagency Mining Industry Coordinating Council (MICC) will undertake a three-month review of Lopez’s orders on top of the review of all other mining contracts across the country as mandated under the law. During the month of March alone, the net outflow of foreign portfolio investment reached $459.86 million, the biggest monthly net outflow since the $607.31 million in November last year as well as reversing the net inflow of $482.43 million a year ago. In March, the $1.83-billion outflows were more than the $1.37 billion in inflows. The BSP attributed the inflows last March to “bargain-hunting after the much-anticipated interest rate increase by the US Federal Reserve and the BSP’s decision to maintain the interest rate on the overnight reverse repurchase facility at 3 percent” while the outflows were due to profit-taking and news about higher inflation (3.4 percent in March, from 3.3 percent in February and 1.1 percent a year ago). “About 83.8 percent of investments registered in March were in Philippine Stock Exchange-listed securities (pertaining to mainly holding firms, banks, property companies, food, beverage and tobacco firms, and telecommunication companies). The balance were investments in peso government securities (14.9 percent) and unit investment trust funds (1.3 percent). Net outflows were recorded for PSE-listed securities ($320 million) and peso government securities ($158 million), while net inflows ($18 million) were noted for investments in UITFs,” the BSP said. The top five sources of hot money last March were Belgium, Singapore, Switzerland, the United Kingdom and the US, which accounted for a combined 73.9 percent of the total. The US remained the top destination of outflows or 87.6 percent of the total.

Industrial revenues in the fourth quarter of 2016 grew at its fastest pace in two years, the Philippine Statistics Authority (PSA)

said in a report yesterday. In its latest Quarterly Economic Indices report, the PSA said the gross revenue index, a measure of sales generated by companies across all industries, increased by 9.4% in the final three months of last year, up from 5.9% in the same period of 2015, and the strongest growth since the 10.1% in the third quarter of 2014. The PSA ascribed the latest figure to faster revenue growth in real estate, manufacturing and trade. Cid L. Terosa, economics professor at the University of Asia and the Pacific (UA&P), attributes the growth “to the strong and dynamic business and economic conditions of the country, particularly during the fourth quarter.” “The fourth quarter is a time of rapid business and economic development because of spending associated with the holiday season,” Mr. Terosa said, referring to the traditional spike in consumer spending in the run-up to Christmas. Real estate revenue grew the fastest at 13.4% from 12.7% the previous year, followed by manufacturing, which increased 10.6% from 3.5% over the same period. Trade revenue came in third, growing 9.2% from 6.7% in 2015. “Real estate, manufacturing, and trade are the three sectors with the fastest rate of growth in the economy. This can be seen from numerous construction and real estate developments around the country,” said Mr. Terosa. “The revival of manufacturing industries and the strong support given by government to them has enabled manufacturing to perform strongly. Trade, both wholesale and retail, is always a strong performer because the economy is driven by consumption spending,” he added. Other sectors where revenue accelerated were finance (from 8.5% to 8.9%), and private services (from 2.2% to 6.6%). Transportation and communication bucked the trend, with revenue growth slowing from 9.9% to 8.8%. Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines (UnionBank), blames the slowdown on the “impact of the prevailing industry trend in transportation and communication (particularly in communication) where industry players have reported declines in their revenues and the overall changes happening in this specific industry in terms of demand and usage of services.” While gross revenue across industries rose, employment however eased, with the total employment index slowing from 3.2% to 1.9%. Top contributors to employment growth were transportation and communication, real estate, and finance. Despite the slowdown in employment, compensation accelerated, as the total compensation index grew by 6.5% in the latest quarter from the 6.1% the previous year. Contributing the most to growth were manufacturing, followed by private services and real estate. The transportation and communication industry bucked the trend, with compensation contracting by 4.3%, a reversal of the 2.8% growth the previous year. Mr. Asuncion said this was a “consequence of decline” of the industry’s gross revenue index. Going forward, UA&P’s Mr. Terosa expects revenue among “real estate, manufacturing, trade, and private services to grow faster in the future.” UnionBank’s Mr. Asuncion, on the other hand, said: “Real estate will continue its impact. Manufacturing will continue to grow especially with the intentions of the Duterte government to ramp up public expenditure on infrastructure development.” “All industries directly related to infrastructure development will definitely have a windfall from the multiplier effect of huge amounts of infrastructure development funds,” he added.

The Bangko Sentral ng Pilipinas (BSP) is looking to relax its rules on derivatives and similar instruments to boost the trust

industry, while also prodding better portfolio management across financial firms. BSP Deputy Governor Nestor A. Espenilla, Jr. said the regulator is lining up reforms on rules covering derivatives from unit investment trust funds (UITFs), in a bid to “invigorate” the local trust industry while improving overall risk management. “Current BSP regulations on UITFs only allow investment in derivatives for purposes of hedging. We are studying a possible relaxation of this restriction to allow for a more efficient management of investment portfolios,” Mr. Espenilla said during a speech before the Fund Managers Association of the Philippines late Thursday. UITFs are investment tools that can be tapped by clients, where funds are pooled and administered by fund managers, which may be invested in liquid investments and tradable financial instruments. On the other hand, derivatives are contracts signed by parties to acquire an asset at


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a predetermined future date and price. Firms holding future deals are required to put up a hedge fund, or a margin should one of the parties decide to call off the deal and absorb the losses of the other and prevent a possible funding crunch. Under current rules, trust companies can only tap derivatives to hedge risk exposures. Separately, the BSP is also aiming to introduce fresh guidelines on investment management and better balance risk exposures among financial entities. “We intend to issue regulations aimed at ensuring that BSP-supervised financial institutions exercise prudence on the conduct of investment management activities by setting up minimum expectations on the practices they should establish for managing and controlling the risks,” Mr. Espenilla added. “This will lead to better-managed capital market issuances and greater benefits for all issuers.” The proposed reforms will cover all financial firms, including holders of debt and equity securities, structured products, and hybrid instruments. In February, the BSP also announced that local banks will be subject to tighter margin requirements for derivatives, in keeping with international standards under the Basel 3 framework. The guidelines seek to ensure that collateral is available to “offset losses caused by the default of a derivatives counterparty,” according to the Bank of International Settlements.

Philippine banks kept their lending criteria largely steady as the year opened, although some lenders said they somewhat grew

stricter in granting loans to businesses as they sought to minimize risky exposures, results of a recent central bank survey bared. Loan officers of the country’s universal and commercial banks said they maintained the criteria in assessing loan applications filed by both consumers and businesses, according to the results of the Senior Loan Officers’ Survey conducted by the Bangko Sentral ng Pilipinas (BSP). This marks the 32nd straight quarter when the borrowing standards were kept “broadly unchanged” for both corporate and individual clients, the BSP said in its report. The central bank uses the quarterly survey to understand the lending decisions made by banks and monitor bank credit. A total of 31 of 35 big banks responded to the poll. Some 93% of lenders said they used the same standards for granting loans to businesses, higher than the 90% that said so during the fourth quarter of 2016. Computed under the diffusion index (DI) approach, more banks actually grew stricter in assessing loans for corporate borrowers versus those who said that they loosened rules. The BSP said this was due to expectations of stricter financial system regulations, a less favorable economic outlook, and a reduced risk appetite. This was reflected in the use of stiffer loan agreements and the increased use of interest rate floors, despite longer loan terms, narrower margins, and steady collateral requirements. An exception was made for micro-firms, which actually enjoyed a net easing in terms of credit criteria, the central bank said. All big banks reported that they used the same standards in deciding on personal loans, reflecting their bullish outlook for consumer activity. “The unchanged credit standards were attributed by respondent banks largely to their sustained tolerance for risk, steady profile of borrowers, and a stable economic outlook,” Ruby Anne E. Lemence, bank officer at the BSP’s Department of Economic Research, said in a press briefing on Friday. Private consumption, which accounts for roughly 70% of the Philippine economy, grew by 6.9% in 2016 to match the overall pace of economic growth, according to data from the Philippine Statistics Authority. In particular, the lenders did not change its criteria in assessing housing and salary-based loans during the January-March period, although some tightening was observed for car loans and credit card-based transactions. Overall, the banks also reported stable loan demand from both businesses and households. Some lenders even said that they expect stronger credit demand across all firms, on the back of higher working capital and financing needs. Individual borrowers are also likely to seek more loans as they seek to avail of “more attractive” financing terms offered by the banks, the report added. About 77.3% of banks also said that they kept borrowing requirements steady for commercial real estate loans during the quarter, but the DI approach showed that some lenders actually grew more stringent as they imposed wider margins. The banks also expect loan demand for both housing and commercial property to keep rising during the second quarter.

The Bangko Sentral ng Pilipinas has shuttered another rural bank in Camarines Sur due to insolvency, the fourth so far this year.

In a statement, state-run Philippine Deposit Insurance Corp. (PDIC) said the Monetary Board on April 20 had prohibited Rural Bank of Ragay (Camarines Sur) Inc. from doing business. PDIC was also ordered to liquidate the bank. As designated receiver, PDIC yesterday took over the rural bank and its affairs, assets, branches and records. Rural Bank of Ragay’s head office was located in Pob lacion Ilaod, Ragay, Camarines Sur. It had one branch in Del Gallego, Camarines Sur. The lender’s general information sheet filed with the Securities and Exchange Commission showed that as of June 30 last year, it was owned by the following: Linda C. Aquino (18.87 percent); Jaime A. Manubay (11.61 percent); Mildred A. Perez (10.45 percent); Kristoffer Lloyd C. Aquino (6.68 percent); former president and chair Emma Louisa C. Aquino (5.80 percent); Maika C. Aquino (5.80 percent); Charina A. Lonogan (5.25 percent); Rolando M. Carandang (4.13 percent); Theresita B. Aquino (3.30 percent); Guillermo E. Abogado (3.18 percent) and Ruben D. Literal (2.35 percent). As of end-2016, the bank had 8,062 deposit accounts with liabilities totaling P178.5 million, of which 96.8 percent or P172.9 million were insured deposits, the PDIC said. Last month, the Monetary Board also ordered the closure of Rural Bank of Goa (Camarines Sur) Inc.

The Philippine Government must find a way to support local farmers to cushion the blow from the influx of cheap rice, the

Bangko Sentral ng Pilipinas (BSP) said as it backed the lifting of rice import restrictions by July. “The Monetary Board noted that the removal of quantitative restrictions on rice importation will have beneficial effects on inflation. Enhancing economic efficiencies in the rice supply chain would translate to rice affordability for consumers, including farmers,” read the highlights of the BSP’s latest policy review which was published yesterday. The officials were referring to the quantitative restrictions (QR) on rice imports, a preferential trade deal secured by the Philippines since 1995 that seeks to guard local farmers from cheaper supply from abroad. The latest extension will lapse by end-June. The Monetary Board kept interest rates unchanged during its March 23 meeting, with inflation seen to remain manageable over the coming year despite a faster climb in prices observed during the past few months. The BSP’s decision came a week after a fresh 25-basis-point increase was announced by the Federal Reserve, a move widely expected by the markets. Inflation has averaged 3.2% during the first three months of 2017, still within the central bank’s 2-4% target band even as price increases have been on an uptrend since November last year. Consumer prices rose by 3.4% in March, the fastest pace in over two years, according to the Philippine Statistics Authority. BSP Deputy Governor Diwa C. Guinigundo said last month that rice, the country’s staple grain, accounts for nearly a 10th of the consumer basket used to track price movements. Once the QR scheme is lifted, individuals and businesses can import rice but will pay a 35% tariff. This is against the current practice where the National Food Authority (NFA) limits the volume of rice imports every year and imposes higher tariffs on amounts that go beyond the minimum volume set by officials, done to prevent the influx of cheap rice and shield local farmers. Rice imports have become a sensitive issue among state officials, resulting to a reported rift between Agriculture Secretary Emmanuel F. Piñol and Cabinet Secretary and NFA Council head Leoncio B. Evasco, Jr. over conflicting policies. The BSP officials said the national government must ensure that it provides some relief to local farmers who could suffer from the influx of cheaper rice from abroad. “[T]he negative impact on the country’s agriculture sector of the possible influx of cheaper rice imports should be compensated by a comprehensive government support package that will boost agricultural productivity and increase the competitiveness of the sector,” the report read. Mr. Guinigundo earlier said that import tariffs collected by government should be “funneled back” to the agriculture sector by way of irrigation and farm-to-market roads that would help boost productivity, among others. The central bank expects inflation to continue rising and peak within the third quarter, with the full-year average likely to settle at 3.4%. Inflation is likely to trend higher for the months ahead, with the BSP citing possible increases in power rates and transportation fares, as well as the “transitory” impact of the tax reform program pending in Congress. Upbeat domestic activity is also expected to be sustained over the near term, allowing the BSP to hold fire on interest rate adjustments as the local economy would not need a fresh stimulus. The Philippine economy


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expanded by an upwardly-revised 6.9% in 2016. Growth is expected to hit the government’s 6.5-7.5% goal this year, with Socioeconomic Planning Secretary Ernesto M. Pernia saying that the economy likely expanded by “around 7%” during the first quarter. “Latest indicators of domestic demand continue to broadly point to firm growth prospects over the policy horizon,” the BSP added, noting strong figures reported for factory output, car sales, and public spending. Business optimism was also steady during the quarter, supporting overall growth prospects. The BSP will hold its next policy meeting on May 11, which will again come a week after the Fed’s two-day review. Economists expect as much as two rate hikes from the BSP this year, which comes at a time of a change in the central bank chief as Governor Amando M. Tetangco, Jr. completes his second and final term by July 2. President Rodrigo R. Duterte has yet to name Mr. Tetangco’s successor.

The Board of Investments (BoI) has released the draft guidelines for implementing the 2017 Investments Priorities Plan (IPP)

which serves as the blueprint for activities entitled to incentives from the government. The BoI said in a statement that it completed the proposed general policies and specific guidelines to implement the 2017 IPP this year anchored on the government’s 10-point socioeconomic agenda as well as on the AmbisyonNatin 2040, which essentially point to two sets of goals that the government plans to take on to achieve inclusive growth. President Rodrigo R. Duterte signed the plan on Feb. 28 under Memorandum Order No. 12 which directed all agencies to issue the necessary regulations to ensure the IPP’s implementation in a “synchronized and integrated manner.” The BoI opened the IPP draft for comment from stakeholders until April 21. Under the draft guidelines the 2017 IPP is a rolling three-year plan to ensure policy continuity and consistency for both domestic and foreign investors. While the IPP would be valid for three years, according to the BoI, it will be reviewed annually. The proposed general policies and specific guidelines for implementing the 2017 IPP list the following as preferred activities: all qualified manufacturing activities including agri-processing; agriculture, fishery, and forestry; strategic services; telecommunications; health care services including drug rehabilitation centers; mass housing; infrastructure and logistics including local government unit public-private partnerships; innovation drivers; inclusive business models; environment or climate change-related projects; and energy. Also deemed priorities are: export activities including production and manufacture of export products; services exports; and activities in support of exporters; and activities based on special laws that grant incentives like industrial tree plantations under the Industrial Forest Plantation (IFP) based on DENR Administrative Order No. 1999-53; exploration, mining, quarrying and processing of minerals under Republic Act (RA) No. 7942 or the Philippine Mining Act of 1995; publication or printing of books/textbooks (RA 8047); refining, storage, marketing, and distribution of petroleum products (RA 8479); RA 9513 or the Renewable Energy Act of 2008 and RA 9593 or the Tourism Act of 2009, among others. The final guidelines will be submitted for consideration and approval by the BoI Board of Governors on April 26. In the IPP 2014-2016 guidelines, the preferred businesses were manufacturing, agribusiness and fishery, services, economic and low-cost housing, hospitals, energy, public infrastructure and logistics, and public-private partnership projects. The draft rules reduce the price ceiling for BoI-registered mass housing units to P2 million from P3 million previously. And -- except for in-city low-cost housing for lease -- only projects located outside Metro Manila may qualify for investment perks. “Based on the theme “Scaling Up and Dispersing Opportunities,” this IPP will serve as a blueprint in guiding Filipino and foreign investors in matching their entrepreneurial and financial capacities with the opportunities identified herewith to steer the country’s economic growth to a broader and sustainable path,” the prefatory statement of the draft read. BoI noted that the 2017 IPP brings forth ‘significant additions and changes,’ following the President’s thrust on zero+10-point Socioeconomic Agenda, the aspirations embodied in AmBisyonNatin 2040, and the Philippine Development Plan (PDP) 2017-2022. “Broadly, these changes include further emphasis on innovation-driven and job-generating businesses; inclusive business for agribusiness and tourism; broadened coverage of manufacturing; information technology (IT) and IT-enabled services for the domestic market and telecommunications services for new market players; environment and climate change-related projects; LGU-initiated PPP projects; drug rehabilitation centers; state-of-the-art engineering, procurement and construction (EPC) services; and the lifting of geographical restrictions for most agriculture and tourist accommodation facilities,” it said. It added that the IPP was also “formulated through a participative, analytical, and multi-sector process,” that is “expected to generate more investments to strengthen manufacturing resurgence and create more jobs as targeted in the PDP 2017-2022.” BoI said manufacturing projects that will qualify for perks covers the manufacture of industrial goods and processing of agricultural and fishery products, including Halal and Kosher food, into (a) semi-finished/intermediate goods for use as inputs in the production of other goods, or (b) finished products or consumer goods for final consumption. It also covers the manufacture of modular housing components and machinery and equipment including parts and components. Cement projects that will qualify for registration must at least start from “clinker production,” it said. Except for modernization projects, BoI said only projects located outside Metro Manila may qualify for registration. “Modernization projects of sugar mills and/or refineries must have a resulting Overall Recovery Rate (ORR) performance of at least 85% and 94%, respectively. Application for registration must be accompanied by a certification from the Sugar Regulatory Authority of the applicant’s ORR performance for the last five (5) years,” it added. All projects for the manufacture of industrial goods and processing of agricultural and fishery products must also utilize up-to-date and market-appropriate technology, and must comply with the Philippine National Standards, as applicable. Meanwhile, in the grant of incentives -- income tax holidays -- BoI said it shall give priority to projects with “substantial” benefits to the economy.

The Department of Energy (DoE) has reminded state agencies attached to it that it has the final say on separate energy-related

plans, including the proposal by the National Transmission Corp. (TransCo) to take over the project to link Mindanao’s transmission grid to that of Visayas. “DoE has control over plans -- energy plans -- ng lahat. So kung ano man ‘yong idea ng GOCCs (So whatever idea government-owned or -controlled corporations may have) we have to align their ideas to the total energy plan (of the department),” Energy Undersecretary Felix William B. Fuentebella told reporters on the sidelines of a seminar on industry issues on Thursday. Mr. Fuentebella made the comment in response to questions about the proposal by TransCo to handle the interconnection project for Mindanao. TransCo earlier said it was drafting a memorandum for the president as well as preparing an executive order calling for the state agency as the developer of the project that will interconnect the Mindanao grid to the that of the Visayas. The move will challenge the role of privately-owned National Grid Corporation of the Philippines (NGCP), which has firmed up its plan to handle the project, even putting a 2020 deadline for its completion at a price tag of at least P52 billion. “It’s being prepared,” said Melvin A. Matibag, TransCo president and chief executive officer. “We will justify why it should be Transco...instead of NGCP that will build.” “When we do that, we have to respect the concession agreement,” he said, adding that once completed, the interconnection asset will be handed over to NGCP for management and maintenance. He said if the government will handle the project, it will be eliminating pass-through costs to consumers. NGCP is allowed to bill consumers of the capital spent on transmission projects as approved by the Energy Regulatory Commission (ERC). Mr. Matibag said he was looking at the Malampaya funds as the source of financing for the project. He said this was the reason why he was preparing an executive order. “The Supreme Court decision is very clear. As long as it is an energy-related project, puwede (it’s allowed),” he said. The Department of Energy (DoE) last month placed the so-called “Malampaya funds” at P235.662 billion, which represents the government’s share in the revenues derived from the offshore gas find west of Palawan. It is also looking at these revenues -- officially called energy resource development fund -- to pay for government debt incurred in building power plants in the 1990s, when the country experienced one its most crippling power supply crises. “This is something related to energy. You connect Visayas and Mindanao then you provide energy security on the entire island,” Mr. Matibag said. “I think there will be enough funds for that,” he said. The need to interconnect the Mindanao grid to that of the Visayas, which is already linked to the Luzon grid, comes as power capacity on


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the southern island expands with the entry of new power plants and the upcoming testing and commissioning of new facilities. Asked about TransCo’s proposal, Sherwin T. Gatchalian, chairman of the Senate energy committee, said his guiding principle is which proponent can offer a cheaper price and which proposal would be most beneficial to consumers. “TransCo is government, so in effect the benefit will quickly redound to the consumers,” he said.

The Board of Investments (BoI) has okayed the grant of incentives for the Metro Pacific group’ P48.5-billion Cavite-Laguna

Expressway (CALAX) project, with the planned expressway among preferred initiatives under the government’s Investment Priorities Plan (IPP). In a statement on Friday, the BoI said the CALAX -- a project of MPCALA Holdings, Inc., a unit of Metro Pacific Tollways Corp. (MPTC), the tollways arm of Metro Pacific Investments Corp. (MPIC) -- qualified for incentives by virtue of it being an infrastructure and private-public partnership (PPP) venture. The agency said the project is expected to address the infrastructure needs of business locators and the general commuting public within the area. “CALAX will greatly ease the movement of goods and services in the area, further boosting the economic activities in the Southern Tagalog region and create jobs,” Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo was quoted as saying in the statement. Mr. Rodolfo added that the infrastructure development complements the Department of Trade and Industry’s strategy to further disperse economic activities across the region. ”The provinces of Cavite and Laguna are rapidly growing industrial and commercial hubs in the Southern Tagalog Region,” the BoI said in a statement. MPCALA Holdings received the notice of award for the 35-year contract to build, operate, and maintain the expressway on June 8, 2015. The group earlier said it plans to break ground for the project by this month. The 44.69-kilometer expressway will link the Manila-Cavite Expressway to South Luzon Expressway, traversing the provinces of Cavite and Laguna. CALAX is divided into two segments, the 26.48-km Cavite segment and the 18.15-km Laguna segment, including eight interchanges across its entire length. MPCALA has tapped DM Consunji, Inc. for the construction of the project, which is expected to be operational by July 2020. The IPP lists down priority investment projects qualified to receive incentives from the government in order to encourage local and foreign investors to locate their projects in urban and least developed areas. MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Wind turbines are helping the Philippines diversify its energy sources beyond fossil fuels and generating not only power, but

jobs, revenue and interest among thousands of curious tourists. On the hills of Rizal province east of the capital Manila, 340,000 visitors have hit the viewing deck of Pililla town’s wind farm since it opened to the public last year, photographing and marveling at its 27 white wind turbines that stand 125 meters (410 feet) high on a 4,500-hectare site. Wind power is slowly taking off in the Philippines, which faces a huge challenge to find cheaper, cleaner and more efficient ways to power what is one of the world’s fastest growing economies and a swelling population of over 100 million people. It’s proving a draw for this province and supporting livelihoods too, with 300 people working at the farm and a further 45 making wooden souvenirs of mini turbines the size of hand-held fans. “A lot of people can see the beauty of the Philippines,” said tourist Christian Lagaja. “Here, the air is fresh and people are benefiting from the electricity it generates.” Wind energy is a work in progress and farms like this produce only a fraction of the country’s installed capacity of 20,055 megawatts, which the energy minister recently said needs to double by 2030 to meet demand. Power in the Philippines at present is generated 34% by coal, 34% by oil and gas and 32% from renewable sources, among them wind, biomass, hydropower and solar.

The Philippines aims to add at least 20,000 megawatts (MW) in additional capacity from renewable energy by 2040 to support

economic growth, Energy Secretary Alfonso Cusi said Friday. Cusi made the statement during the launch of the Renewables Readiness Assessment (RRA) by the Department of Energy and International Renewable Energy Agency (IRENA) in Taguig City. “RRA is a collaboration among the DOE, IRENA and other renewable energy stakeholders from both the public and private sectors. It is vital to our vision of attaining 20,000 megawatts of renewable energy capacities by 2040,” Cusi said. Cusi noted the goal is "to provide a comprehensive and detailed analyses of the country’s renewable energy profile in order to recommend measures to deal with the pertinent issues in the industry." IRENA is an intergovernmental organization that supports countries transition into a sustainable energy future. “The DOE is committed to provide a level of playing field among RE developers to assure the country of its indigenous and sustainable energy for the consuming public,” Cusi said.

The Department of Environment and Natural Resources (DENR) has asked Malacañang to clear the execution of its closure

orders on 23 mining projects, DENR Undersecretary Maria Paz G. Luna said yesterday. “[The DENR] filed a motion to execute before the OP (Office of the President) because there is a stay of execution; any appeal includes a stay of execution. So we filed a motion to execute without a stay [order]...” Ms. Luna told reporters. Environment Secretary Regina Paz “Gina” L. Lopez last Wednesday accused Executive Secretary Salvador C. Medialdea of holding on the appeals of the sanctioned miners, in effect preventing President Rodrigo R. Duterte from rendering final judgment. Mr. Medialdea promptly countered that such appeals go to his office and not to Mr. Duterte directly. Administrative Order No. 22, issued on Oct. 11, 2011 and which sets rules for appeals to the Office of the President, provides in part that “[t]he execution of the decision/resolution/order appealed from is stayed upon the filing of the notice of appeal...” “Depending on how the President sees the damage that are going to be caused by a continuation of the operations (of miners) based on the violations baka naman mag-decide siya na ma-grant ang aming (he might grant our) motion to execute,” Ms. Luna said. Ms. Lopez had also accused Mr. Medialdea of blocking the DENR’s Jan. 20 order requiring each sanctioned miner to put up a trust fund amounting to P2 million per hectare of “disturbed land” before getting a permit to transfer ore it already has in its inventory. Hours after Ms. Lopez bared her row with Mr. Medialdea, Mr. Duterte said in a speech on Wednesday night in Pasay City that while he could not grant her wish for a “mine-free” Philippines, he supported her move to be “strict” with miners. “Si Gina naman told me frankly, ‘I want the Philippines to be mine-free’,” Mr. Duterte recalled. “Sabi ko: ‘how can we do that?’ We have to amend the law. There’s a mining law which allows mining,” he added. “And besides we get on the average P70 billion a year ‘yan (in estimated gross value added to the economy) from these mining companies.” But Mr. Duterte proceeded to say “but I agree with Gina” that mining projects he has seen have damaged their host areas. Ramon C. Casiple, executive director of the Institute for Political and Electoral Reform, said Mr. Duterte’s latest remarks -- especially in the wake of Ms Lopez’s revelation just hours earlier of a spat with one of his close associates -- shows he supported her. “Duterte still stands by her, despite enormous pressure from mining interests, it seems,” Mr. Casiple said via text. DENR’s Ms. Luna said her department has so far submitted a motion to execute for just one of the sanctioned mines that had appealed to the Office of the President, but that it expects to submit the 22 others within the month. “We’re hoping, as soon as possible. I’ve already edited a draft of one resolution of a MR (motion for reconsideration) today. If we can do one motion everyday or every two days, then one month for all the MRs,” she said, noting that all 23 mines ordered closed -- out of a total 41 operating metal mines nationwide -- had appealed to Malacañang. There were five other operating mines ordered suspended in early February. Later the same month, DENR had ordered 75 other mines in pre-operation stage to explain why they should not be sanctioned similarly. Emerging yesterday from a meeting of the recruitment team of the technical working group of the Mining Industry Coordinating Council -- which is preparing to conduct a separate review of all mines nationwide at industry request -- Ms. Luna said “[h]opefully by Friday next week the MICC can approve the list (of review team members) already.” “We’re hoping to contract them right after that, if the budget is out,” she added, referring to the P50-million estimated budget for the review. “Everyone


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wants it to happen as soon as possible. So the realistic timetable is they can start their travels to the mines, after they are contracted, around May 2.” MICC estimates the review teams -- which will be composed of five members specializing in social development, economic impact, technical operations, legal compliance and environmental management -- will need three months to complete their tasks. Before Mr. Duterte assumed office at noon of June 30 last year, the mining industry had already been reeling from a moratorium on new permits that has been in place since 2011 and extended indefinitely through Executive Order No. 79 -- which had established the MICC -- signed by former president Benigno S.C. Aquino III on July 6, 2012.

The Bureau of Internal Revenue (BIR) on Friday filed a criminal complaint against actor Richard Gutierrez and his production

company for allegedly evading tax payments valued at P38.57 million. In a complaint with the Department of Justice (DOJ), the BIR said R Gutz Production Corp. and its president, Richard Gutierrez, were charged with two counts of "Willful Attempt to Evade or Defeat the Payment of Income Tax (IT) and Value Added Tax (VAT) covering taxable year 2012, and for Deliberate Failure to file IT Return (ITR) and 2nd, 3rd, and 4th Quarter VAT Returns for taxable year 2012." R Gutz is engaged in the production, processing and marketing of telemovies, telesine, movies, recordings, television shows and other forms of entertainment, including events, sports, talent promotion, movies, television and live shows for local and international consumption. It is registered with the Securities and Exchange Commission (SEC) as a domestic corporation based in San Juan City. In a separate report on GMA News' "24 Oras," the Gutierrez camp was quoted as saying they have yet to receive a copy of the compliant and that they will respond once they have received it. The case stemmed from a "matching process" on the VAT returns declared by Gutierrez in 2012, which showed the actor supposedly had underdeclared sales amounting to P39.9 million in 2012, according to the BIR. The sales declared per tax return were only P311,111, the bureau said. BIR investigators found that R Gutz failed to file its annual income tax return and 2nd to 4th quarterly VAT returns in 2012, the bureau said. Such infractions supposedly violated the Tax Code, Sections 254 and 255, in relation to Sections 253 (d), 256 and 106 in relation to Section 114 of the National Internal Revenue Code of 1997. "As a consequence of their acts and omissions, R GUTZ and its President Richard Gutierrez were assessed an estimated aggregate deficiency tax liability for taxable year 2012 in the total amount of P38.57 million, inclusive of surcharges and interests," the BIR said.

The Securities and Exchange Commission (SEC) has given Eagle Cement Corp. (ECC) and Cebu Landmasters, Inc. the green

light to proceed with their respective initial public offerings (IPO), adding to the list of companies planning to go public this year. In an en banc session on Thursday, the corporate regulator approved ECC’s application for a maiden listing of 500 million common shares with an over-allotment option of 75 million shares priced at P16 apiece. Cebu Landmasters also secured the SEC’s approval to list 505 million common shares with an over-allotment option of 75 million shares priced at P6.56 apiece. Both approvals come at a time of continued robust growth of the property sector and a government commitment to ramp up infrastructure spending in hopes of spurring faster overall economic expansion that will lift more Filipinos out of poverty. ECC’s IPO will involve 11.5% of the company’s total 5,000,000,005 outstanding common shares. An initial timetable puts sale period on May 2-9 and maiden listing on May 16. The company -- controlled by businessman Ramon S. Ang, president and chief operating officer of San Miguel Corp. -- hopes to raise P8 billion from the primary offer and net P7.38 billion after deducting fees, commissions and expenses. The cement manufacturer hired China Bank Capital Corp., PNB Capital and Investment Corp. and SB Capital Investment Corp. as joint issue managers, joint lead underwriters and joint bookrunners. Net proceeds will be used to partially finance the construction of a Cebu cement plant and related facilities. The company has said that it expects to start construction in the fourth quarter of this year and be completed in the first quarter of 2020. The P9.5-12.5 billion project consists of a P7.5- to 8.5-billion integrated manufacturing plant that can produce up to 2 million metric tons (MT) of cement annually, port facilities worth P1-2 billion and cement terminals worth P1-2 billion. Project cost includes acquisition of construction-related materials and services, as well as of properties on which the plant itself will rise. ECC is currently expanding its operations with the construction of the third line of its Bulacan cement plant. The third line will bring the firm’s total production to 7.1 million MT or 180 million bags annually from 5.1 million MT equivalent to 130 million bags currently. Eagle Cement estimates its market share at 30% in Metro Manila, Central Luzon and the Cavite-Laguna-Batangas-Rizal-Quezon region combined. The three regions account for about three-fifths of the Philippine economy. Property developer Cebu Landmasters will be offering 34% of its 1.714 billion outstanding common shares to the public in order to raise P3.8 billion. Up for sale will be 430 million for the primary offer and 75 million for an over-allotment option. The company hired BDO Capital & Investment Corp. as issue manager, along with BPI Capital Corp. as lead underwriter and bookrunner. Cebu Landmasters is the first Cebu-based real estate developer to apply for an IPO. The firm will be using net proceeds from the maiden listing for expansion to five key cities in the Visayas and Mindanao. The funds will cover land acquisition worth P2.2 billion, debt repayment of P400 million and working capital requirements of P60 million, for a total investment of P2.6 billion. The real estate developer is targeting to debut on the main board by mid-May. “These IPOs will provide the investing public with two additional investment vehicles... the number of IPOs can also indicate whether sentiment is bullish or bearish, where more IPOs reflect a bullish sentiment and vice versa,” PNB Securities President Manuel Antonio G. Lisbona said. “If investors see that they are getting a good deal, demand for offer increases,” he added. “The use of proceeds is also critical, that is a good use of proceeds would be to expand business.” AP Securities, Inc. equity trader Frank Gerard J. Barboza said he expects strong reception of ECC’s IPO, noting San Miguel’s work on the Tarlac-Pangasinan-La Union Expressway (TPLEx) extension. “Right now I like (ECC) because of (Ramon S. Ang)’s infra[structure] play on the TPLEx extension. The timing is impeccable.” PNB’s Mr. Lisbona further noted that the timing of maiden share sales plays a significant role in traders’ sentiment. “The market situation at the time of the offer is also very important,” he said. “If the market is bullish, investors will buy (probably even at a premium), but if the market is bearish, it will be hard to sell shares and it’s very rare for a company to issue shares at a discount to what it thinks is a fair value.” Also pending with the SEC are IPO applications from Bermaz Auto Bhd for P1.24 billion, Pure Energy Holdings Corp. for P1.58 billion, Xeleb Technologies, Inc. for P751.8 million and Audiowav Media, Inc. for P2.66 billion. Earlier this month, the SEC announced plans to hike float requirements to at least 15% for companies applying to go public. Wilcon Depot, Inc. was the first company to go public this year, listing on the main board on March 31 after it raised P7.03 billion.

British banking giant Standard Chartered expects the Philippines to be the fastest growing among Southeast Asia’s emerging

markets this year, with economic growth seen firming up at 6.8 percent from 6.6 percent last year. This is seen to make the Philippines the fastest-growing Asean-6 (a bloc that also includes Indonesia, Singapore, Thailand, Vietnam and Malaysia) market for the second consecutive year, according to an April 20 research note written by economists Chidu Narayanan and Divya Devesh. “Strong domestic demand, increasing infrastructure investment and steady services-sector growth will remain the primary growth drivers, in our view,” the research said. The economists project a gross domestic product (GDP) growth of 7 percent in the first semester and a more moderate 6.5 percent in the second semester as the high base effect from last year kicks in. Household spending and infrastructure investment are seen to provide strong support for the country’s 2017 growth while Stanchart also expects solid growth in the services sector, supported by wholesale and retail trade and by business, financial and other services. Public-sector construction momentum is projected to pick up in the second half, while manufacturing growth is seen steady. The economists also expect higher spending by a young and growing population to keep the services sector and household consumption strong, particularly as more overseas Filipinos return to the Philippines. “In the near term, infrastructure expenditure is likely to provide the biggest boost to growth. Gross fixed capital formation (GFCF) has been the biggest contributor to GDP since fourth quarter 2015. GFCF rose 20.8 percent in 2016, contributing 4.95


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percentage point of the year’s 6.6 percent growth—more than household consumption,” the research said. In a bid to stave off possible repercussions from political news hogging even foreign headlines, economic managers would be

meeting with credit risk watchers to prove the country’s economic growth was bigger news. Economic managers attending this week’s spring meetings of multilateral lenders International Monetary Fund and the World Bank were set to meet with officials of credit rating agencies to assure them that the Philippines was poised to sustain robust economic growth. Socioeconomic Planning Secretary Ernesto M. Pernia told reporters that during their scheduled meetings with the top global debt watchers in Washington, “we wil l, of course, highlight the positive tidings and the good plans moving forward.” The Philippines currently enjoys investment grade credit ratings from the top debt watchers Fitch Ratings, Moody’s Investors Service and Standard & Poor’s. Credit ratings are a measure of a government’s credit-worthiness. As the stability of state finances is also related to a country’s performance, credit scores serve as a proxy grade for the economy. Early this week, economic managers unveiled the administration’s so-called “DuterteNomics” of “Build, Build, Build” that they claimed would usher in a “golden age of infrastructure.” A total of P8.4 trillion would be spent by the Duterte administration in the next six years to build vital infrastructure. The goal is to bring to 7.4 percent the share of infrastructure expenditures to the gross domestic product (GDP) by 2022 from a 5.4 percent this year. The government plans to roll out over P3.6 trillion worth of infrastructure projects from 2018 until 2020 while also jacking up to 75 from 55 previously the number of flagship projects that the administration aims to complete before President Duterte steps down in 2022. Considered a firebrand by many, the President’s management style—including his unrepentant war on drugs—has been a cause for worry for many investors. Pernia, who heads state planning agency National Economic and Development Authority (Neda), earlier said he expected the GDP to have grown by 7 percent during the first quarter. Pernia said he would be joined by Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., Finance Undersecretary and chief economist Gil S. Beltran and Neda Undersecretary Rolando G. Tungpalan at the meetings with the credit rating agencies. Beltran said they wanted the game-changing credit risk watchers to know that “the Philippine economy has been very resilient, growing at over 6 percent during periods of distress in our major trading partners.” Last year, the GDP expanded by 6.9 percent, among the fastest in the region.

AirAsia Philippines on Saturday began servicing its Davao-Cebu-Davao route. The first AirAsia flight to Cebu took off from the Davao

International Airport here around 10:40 with Capt. Gomer Monreal, Philippines AirAsia director of flight operations, as pilot. Monreal was assisted by Capt. Bernardino Perez and flight officer Leonardo Orendain. The Davao-Cebu route has two flights scheduled daily. “From highlands to islands, AirAsia is officially welcoming summer with new and increased connectivity from Davao and Cebu to Boracay and Palawan and onto the northern part of the Philippines via Clark Airport in Pampanga,” Monreal said. AirAsia will also have daily flights from Davao to Boracay; three flights a week from Davao to Palawan; and four flights a week from Davao to Clark using Airbus A320s, which can accommodate up to 180 guests. Mayor Sara Duterte congratulated AirAsia for opening additional direct flights from Davao City to four other cities in the country. Duterte’s speech, which was read by Councilor April Dayap, said the event “is a cause for joyous celebration, because opening these routes to Cebu, Caticlan, Clark and Puerto Princesa affirms that Davao is indeed one of the prime business and tourism destinations in the country.” “We hope that this inaugural flight will open the skies to more possibilities and opportunities for all. We look forward to more flights between Davao and other major destinations in the country and abroad,” Duterte said. Aside from the new four routes from Davao, AirAsia also fly to Manila and Davao three times daily. To celebrate the launch of its new domestic flights, AirAsia has offered promo fares from as low as P788, all-in. Bookings start Saturday until April 30, 2017 and the travel dates are between September 5, 2017 to February 8, 2018.

Globe Telecom, Inc. secured fresh funding to finance capital expenditures this year, majority of which will be allocated for the

expansion of its data network. The Ayala-led telecommunications company told the stock exchange on Friday that it signed a 10-year P8-billion term loan facility with BDO Unibank, Inc. The debt will help Globe fund its $750-million capital expenditure program for the year that will finance data-related expenses, including deployment of LTE mobile, LTE @Home, increased network capacities and coverage, and modernization of fixed line data infrastructure for corporates, and transmission facilities. The proposed capex is lower than the $772 million spent last year, but Globe has pledged to expand its network to maintain its growth trajectory amid an increasingly competitive market environment. Globe is deploying around 1,800 LTE 700 sites and 1,000 LTE 2600 sites this year. It will also add 1,800 LTE 1800 sites “in order to boost LTE capacity and coverage.” The company’s net income slid 4% to P15.88 billion in 2016 from the P16.484 billion recorded in 2015, amid a general slowdown in traditional legacy business and non-operating charges related to its acquisition of San Miguel Corp.’s telecommunications assets. Core net income, which excludes foreign exchange, mark-to-market gains and losses, and non-recurring items, rose to P16.014 billion for 2016, from P15.126 billion in the previous year, as consolidated service revenues reached an all-time high.

Listed port operator International Container Terminal Services, Inc., (ICTSI) is looking to bid for new projects this year to sustain

its growth momentum, as global trade faces headwinds arising from the Trump administration’s protectionist policies. ICTSI President and Chairman Enrique K. Razon, Jr. on Thursday said the firm is considering opportunities in Africa, and is also one of three bidders for a majority stake in Greece’s Thessaloniki Port. “We’re in the midst of a bid right now, [in] Greece, it’s not yet done. We’re already at the second round. [Maybe there will be] three rounds,” Mr. Razon told reporters in a mix of English and Filipino at the sidelines of the ICTSI stockholders meeting. The second round of bidding for the sale of a 67% stake in Greece’s second-largest port will end on Friday. Mr. Razon said it will take around two to three months before the bidding is completed. Thessaloniki Port has a market value of $211 million and had a throughput of 344,277 20-foot equivalent units (TEUs) last year. Aside from ICTSI, Dubai-based P&O Steam Navigation Company (DP World) and German private equity Deutsche Invest Equity Partners are also in the running for the project. “[Next] we have a couple [of projects] that we’re looking at... in Africa,” the ICTSI chief added. Mr. Razon said US President Donald J. Trump’s protectionist policy is the biggest threat to global trade. “Trump is the biggest risk, by far, probably the only risk. Economic growth is always a risk but Trump is the biggest at the moment,” he said. “[In the] Philippines, the [risk is on the] government’s infrastructure projects, if they can execute that in their time frame, then that is very good for the country.” To minimize risks from US protectionism, Mr. Razon said the company will continue to grow by adding more terminals around the world. “Asia will be impacted the most from protectionism in the US, and you have the elections in the EU (European Union), so far its not a pretty picture,” he added. The ports tycoon is confident ICTSI will get “more contracts” as global risks also bring opportunities. ICTSI, which operates 30 terminals in 20 countries, lowered its budget for capital expenditures this year to $240 million from the $420 million it set for 2016. Last year, the company spent only $391.9 million of the programmed capex as most of its expansion projects were completed. “[The lower spending budget is a] reaction to completion of many of our projects, [there’s] nothing much in the pipeline,” Mr. Razon said. In 2016, ICTSI completed the initial stage of its new container terminals in Australia, Democratic Republic of Congo and Iraq, while the development of projects in Honduras and Mexico are ongoing. In a separate interview, ICTSI Senior Vice-President for Asia Pacific Christian R. Gonzalez said its proposed $30-million common-user barge and roll-on, roll-off (RoRo) terminal in Cavite will be formally launched on Friday. The Cavite Gateway Terminal (CGT), which will support government initiatives to decongest Metro Manila roads, has been approved and “basic operation” could start by the first quarter of 2018. The terminal will be located within a six-hectare property in Tanza, Cavite. It was identified as the prime location for the project because of the province’s high economic density -- in addition to the Cavite Export Processing Zone, which houses over 400 actively operating


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companies. ICTSI earlier said Phase 1 of CGT’s development will support a total throughput of 115,000 TEUs every year. The port operator saw its attributable net income soared 207% to $180 million in 2016, driven by strong volume growth and revenues from its port operations.

International Container Terminal Services, Inc. (ICTSI) has started the development of the country’s first container barge terminal

set to be built in Tanza, Cavite. In a regulatory filing on Friday, ICTSI said that it has launched the development of a container roll-on roll-off (RoRo) barge terminal called the Cavite Gateway Terminal, in partnership with the Department of Transportation (DOTr). The project comes as the DOTr promotes its national transport plan which seeks to use nautical highways of the movement of goods. The project is set to be built in a six-hectare property that will facilitate the seaborne transport of containers between ICTSI’s Manila International Container Terminal and Cavite. The listed transport firm is investing $30 million for phase 1 of the project which will feature an annual capacity of 115,000 20-foot equivalent units (TEUs). This translates to 140,000 fewer truck trips on city roads each year, the company said. CGT will be integrated with other major Luzon port facilities for more cost-effective and time-bound access to the Cavite market. In a separate disclosure, Harbor Star Shipping Services, Inc. said that it will be one of the clients of ICTSI’s terminal, confirm ing that it plans to deploy 150 TEU barges for CGT. The company further said that it also intends to offer chassis roll-on roll-off shuttle services at the terminal. Incorporated in 1987, ICTSI holds the concession to be the exclusive operator of the Manila International Container Terminal up to May 18, 2038. ICTSI booked $1.128 billion in revenues from port operations in 2016, a 7% rise from 2015’s $1.051 billion. The firm said the increase was mainly due to the improvement in trade activities in its Philippine ports and the expansion of overseas operations. The firm handled a consolidated volume of 8.689 million TEUs in 2016, 12% higher than the 7.775 TEUS in 2015.

PHINMA Energy Corp. remains optimistic on the prospects of its retail electricity supply business, despite a Supreme Court (SC)

order that put on hold regulations that were supposed to force big power users to switch from being captive customers of distribution utilities. “Despite the activities that happened before the switching deadline, we were able to switch 100-megawatts (MW) worth of customers by ... the February deadline,” said Danielle R. del Rosario, Phinma Energy assistant vice-president and head of sales and marketing, in a recent interview. Ms. Del Rosario was referring to the Feb. 26 deadline set by the Energy Regulatory Commission (ERC) that required consumers with an average monthly usage of at least 1 MW to source power from a licensed retail electricity supplier (RES). The SC has since issued a temporary restraining order (TRO) that stopped the lowering of the threshold to cover those with an average peak demand of 750 kilowatts to 999 kilowatts (kW). The mandatory switch would have taken effect on June 26. The lowering of the threshold to cover consumers with an average monthly peak demand of 500 kW is supposed be implemented on June 26, 2018, but subject to the review of the performance of the retail market by the ERC. “Despite the efforts to delay the retail competition expansion, we were still able to switch a hundred (MW), and we’re still talking to the same customers who committed to us by year end,” Ms. Del Rosario said. Earlier this year, she said Phinma Energy had been able to corner 171 MW worth of new contracts. She said the company was looking at doubling that figure. The TRO, however, left customers confused as to whether switching to a RES from a distribution utility can be voluntary. “Some of them just switched at a later date, some of are still under negotiations,” Ms. Del Rosario said. “So we remain confident that this is a segment of the business that we can continue to expand. It’s very competitive though so it’s becoming increasingly difficult given the prices,” she added. In its annual report, Phinma Energy said it “is invigorated with resolve to capture a significant share of the retail electricity market through customizable power solutions, serving a greater number of energy end-users with a customer-centric approach.” Ms. Del Rosario said based on the ERC’s statistical report as of end-January 2017, it has become a strong player in the retail electricity supply business. “Phinma Energy is the second-largest single RES. If you don’t consolidate the others, Phinma Energy is already the second-largest at 12% of the those who have switched already,” she said. Sought to clarify the confusion on whether switching can be voluntary, Phillip C. Adviento, Philippine Electricity Market Corp. (PEMC) training and communications manager, said in a text message: “The switching of 750 kW to 999 kW CCs (contestable customers) is put on hold in view of the TRO issued by the SC.” “The TRO enjoined the implementation of DoE Circular 2015-06-0010 and ERC Resolution No. 10, series of 2016 that provided for the reduction of contestability threshold to 750 kW,” he added. “The voluntary switching of 1 MW is in effect based on ERC Resolution No. 11, series of 2013, which was not covered by the TRO,” Mr. Adviento said. He earlier said that PEMC had been directed by the ERC to be come up with the central registration and settlement system required by the rules governing retail competition and open access.

Earnings of Rockwell Land Corp. grew 11% in 2016, as robust sales of condominium units offset a dip in revenues from its

commercial development segment. In a regulatory filing, the Lopez-led property developer said it booked P1.82 billion in net income last year, from 2015’s P1.64 billion. Total revenues jumped by 42% to P12.71 billion last year from P8.92 billion the year prior. Residential sales soared 69% to P10.8 billion last year, largely due to the substantial completion of the Proscenium projects at Rockwell Center, Makati; and 32 Sanson in Cebu. This segment, which involves the development, sales and property management of residential units under the Rockwell and Primaries brand, accounted for 87% of total revenues. Rockwell Land said reservation sales, driven by Proscenium, The Vantage and newly launched Edades Suites, went up 45% to P11.8 billion. On the other hand, commercial developments, which contributed 10% of total revenues, saw a 38% decline to P1.3 billion in 2016. Rockwell Land noted a 15% increase in leasing income failed to offset the decline in the sale of office units. Hotel operations, which account for 3% of total revenues, reported a 33% increase in revenues to P346.7 million. Rockwell Land operates the Aruga serviced apartments at the Edades Tower in Makati City, and Aruga at The Grove in Pasig City. Cost of real estate surged 73% to P7.8 billion in 2016, as Proscenium and 32 Sanson were substantially completed. Rockwell Land spent P12.6 billion for project and capital expenditures in 2016, mainly for development and land acquisition costs. Incorporated in 1975 initially as the First Philippine Realty and Development Corp., Rockwell Land has business interests in property development for the high-end and upper mid-markets in Metro Manila and Cebu. Lopez Holdings Corp. holds investments in Rockwell through First Philippine Holdings Corp.

Smart Communications, Inc. on Friday said it posted “steady improvement” in its average download speeds through its Long

Term Evolution (LTE) service, citing a recent study from J.P. Morgan. In a statement, the wireless subsidiary of PLDT, Inc. quoted an April 2017 report by J.P. Morgan as saying it “leads overall LTE download speeds at regional levels.” Smart said report was based on the actual mobile experience of OpenSignal app users. The app allows users to run their own speed tests. A copy of the J.P. Morgan report was not provided. According to the study, Smart delivered an average LTE download speed of 10.91 megabits per second (Mbps) from December 2016 to February 2017. It also averaged 11.76 Mbps in Metro Manila, 8.56 Mbps in South Luzon, and 10.42 Mbps in the Visayas in the same period. The wireless giant said it also led in terms of average 3G download speeds at the country level (2.22 Mbps) and in Metro Manila (3.25 Mbps). These 3G figures are also Smart’s highest in the last eight testing periods of OpenSignal. In its three-year network rollout plan that parent company PLDT submitted to the National Telecommunications Commission in July last year, Smart said it will make LTE progressively available to 95% of the country’s cities and municipalities by the end of 2018. “We have made intensive capital outlay to accelerate the deployment of LTE sites because LTE significantly boosts the speed, quality, and reliability of our mobile data service,” PLDT Chief Technology and Information Advisor Joachim Horn was quoted in a statement as saying. Smart said it is re-equipping its cell sites to use low-frequency bands such as 700 megahertz (MHz) and 850 MHz to provide better indoor coverage. It is also deploying high-frequency bands like 1800 MHz and 2100 MHz to increase the cell sites’ capacity to handle mobile data traffic. “Our


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network dominance and reliability will enable us to deliver a superior digital experience to Filipinos, whose appetite for relevant digital content is constantly growing,” PLDT Executive Vice-President and Chief Revenue Officer Eric R. Alberto added. Smart is also starting to lay the foundation for further service improvements, such as LTE-Advanced which can provide even faster speeds and greater capacity to subscribers and while boosting its LTE services, it continued to fortify its 3G network to better serve the majority of its smartphone-owning subscribers, who are using 3G handsets. PLDT and Smart Chairman and CEO Manuel V. Pangilinan said recent efforts are meant “to transform the PLDT and Smart network into the country’s most future-ready data infrastructure delivering a wide range of gigabit digital solutions.” Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

Sy-led BDO Unibank, Inc. (BDO) saw its net income reach P5.8 billion in the first quarter of the year, mainly driven by an increase

in its net interest income on the back of a double-digit expansion in its loans during the period. The country’s largest bank said it recorded a 6% growth to P5.8 billion in its bottom line in the first three months of 2017 compared to the P5.5 billion booked in the same period in 2016. Its net interest income grew 19% to P18.4 billion in the quarter from P15.5 billion in the same period in 2016. The bank’s customer loans likewise rose to P1.5 trillion or 21% higher year on year, while total deposits expanded by 13% to P1.9 trillion from the P1.7 trillion recorded in the same period last year after its low-cost current account and savings account deposits grew 17%. “We expect sustained expansion in loans and deposits,” BDO President and Chief Executive Officer Nestor V. Tan told reporters in a media briefing on Thursday, referring to the bank’s outlook for 2017. BDO’s provisions amounted to P1.4 billion during the quarter even as its asset quality remained “healthy” with its non-performing loans (NPL) ratio staying at 1.3% and NPL cover at 138%. Meanwhile, its fee-based service income from payments and settlements, credit card acquiring fees and wealth management services also expanded to P6.8 billion, up 42% year on year. “We see a steady rise in fee income [this year] as our businesses start to consolidate in areas outside the National Capital Region,” Mr. Tan said. The Sy-led bank’s P60-billion stock rights offer brought its capital base to P282 billion that boosted its capital adequacy ratio to 15.6% in the first quarter and its common equity Tier 1 ratio to 14%. “We will continue to expand our branch network because we believe that the economy outside of the NCR will drive our growth in the future,” Mr. Tan said. “And we will continue to diversify as we said we’re expanding in microfinance to One Network Bank (ONB), to the underserved and we’re expanding our life insurance business,” he added.In August 2014, the listed lender bought 96% of the biggest Mindanao-based rural lender ONB. For this year, Mr. Tan said the bank has trimmed their earnings guidance to P28 billion from the P28.8 billion previously “because of the accelerated investments in our initiatives.” Meanwhile, asked if they would want to become a qualified Association of Southeast Asian Nation (ASEAN) bank (QAB) for the ASEAN Banking Integration Framework (ABIF), Mr. Tan said, “Definitely, because we would like to have a bank that meet ASEAN standards.” The ABIF was first endorsed in December 2014 and sought to allow duly-identified QABs to “operate freely” across member-economies in the region. To be named as a QAB, lenders must secure the endorsement of regulators in its home country and be accepted by offshore authorities where it wants to set up operations.

Ayala-led Bank of the Philippine Islands (BPI) booked a double-digit growth in its bottom line in the first three months of the year

on the back of an expansion in its net interest income during the period. In a disclosure to the local bourse on Thursday, the bank reported that its net income reached P6.25 billion in the first quarter, 25.6% higher from the P4.98 billion recorded in the same period in 2016. “The main drivers of strong net income for the first quarter are mainly the strong performance in net interest income which grew by almost 15% year on year and this is driven by a strong growth in our average balances for loans driven by strong growth in our corporate loan book this year compared to last year,” BPI Senior Vice-President and Chief Financial Officer Maria Theresa M. Javier told reporters in a media briefing on Thursday after the bank’s annual stockholders’ meeting. The bank’s net interest income in the January to March period climbed 15% to P11.49 billion from P10 billion the year prior on the back of an increase in asset yields and loan volumes. BPI’s total loans stood at P1.03 trillion during the period, up 19.9% compared to the P861.22 billion recorded in the previous year. Meanwhile, its gross 90-day non-performing loans (NPLs) slid to 1.5% from 1.7% while reserve cover jumped to 123.7% from 114.2% last year. The bank’s total deposits also rose to P1.44 trillion in the first quarter, 10.7% higher than the P1.30 trillion booked in the same period in 2016. “Another main driver of net income is the strong non-interest income growth for the first quarter driven mainly by trading gains from sales, securities, as well as asset sales,” Ms. Javier said. The bank’s non-interest income came in at P6.46 billion during the period, soaring by 22.6% from the P5.27 billion recorded last year. Its total revenues also climbed to P17.96 billion at end-March, higher by 17.6% from P15.27 billion in the first quarter of 2016. BPI’s total assets likewise grew to P1.73 trillion in the first quarter, 12.4% higher from 2016’s P1.54 trillion, the bank reported. The bank’s operating expenses, however, rose by 11.2% to P8.73 billion in the first three months of 2017 on the back of the additional manpower, spending on operational infrastructure and regulatory costs, compared to the P7.85 billion booked in 2016. “The bank continues to invest in processes and information systems that enhance customer experience and security. With asset quality strong, provisions were at P1.2 billion, an increase of only 2.4%,” the lender said in its statement. Its cost-to-income ratio declined to 48.6% during the period compared to the 51.4% in the same period in 2016. “Our first quarter results are actually quite strong...and what this shows is the momentum that we began to see last year is carried over to this year,” BPI President and Chief Executive Officer Cezar P. Consing told reporters yesterday. Meanwhile, the bank announced during its stockholders meeting on Thursday that it is looking to put up 90 more BPI Globe BanKO, Inc. (BanKO) branches within the year, bringing its total branch network to 100 by October. The new offices will be established around BanKO’s 10 current branches. “We are in the process of building out to a total of 100 branches by October this year for BanKO, and the branches that we’re building out will be a combination of the regular branches and the microfinance banking offices. These are being built...initially around the 10 branches that we have today simply for logistics and coordination reasons,” BPI Family Savings Bank, Inc. President Natividad N. Alejo said during the media briefing. BPI gained full control of BanKO -- which was established in 2009 as a partnership between BPI, Globe Telecom, Inc. and Ayala Corp. -- after the listed lender bought the shares held by Globe and Ayala in the joint venture. “So while the 100 branches will be generally around the 10 branch locations we have today, beyond that, we think there’s more opportunity to build more BanKO offices in other parts of the country particularly in the provincial areas,” she added. BPI also announced yesterday that it will be releasing their Europay, Mastercard and Visa (EMV)-chipped cards by mid-year. The Ayala-led bank’ earnings hit P22.05 billion in 2016 on the back of trading gains and higher interest income.

Filinvest Land, Inc. (FLI) has allotted P20 billion to fund residential and office development projects in 2017, in an effort to hike

the firm’s recurring income. “This will be mixed projects, office and residential. Because we’ve been building up our recurring income, we have a lot of office projects,” FLI President and Chief Executive Officer Josephine Gotianun-Yap told reporters after the company’s annual stockholders” meeting in Ortigas on Friday. The Gotianun-led real estate developer targets to launch 16 residential projects spread out across the country in 2017. Ms. Gotianun-Yap added that they have around 10 buildings currently under construction. “They are spread across Metro Manila, in Quezon City, Alabang, and Makati. We’re also strong in the Visayas area, Iloilo, Dumaguete, Cebu -- of course -- , and then in Davao. We also have a couple of projects in the Mindanao area, in Koronadal and General Santos,” Ms. Gotianun-Yap said. The company initially announced that it will be ramping up efforts to triple its recurring income portfolio in five years. In 2015, FLI completed three new buildings which started to generate revenues the following year. Meanwhile, 2016 saw the completion of two projects in the Bay area -- Filinvest Cyberzone Bay City 1 and 2 -- bringing the company’s portfolio to 312,000 square meters (sqm). This year, FLI is set to complete three new buildings: Vector 3 and Filinvest Axis 1 in Alabang, and Cyberzone Cebu Tower 2 in Cebu City, which


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translates to 103,000 sqm. The new building projects will bring the company’s total office gross leasable area (GLA) to 414,000 sqm by the end of 2017. “Now in Northern Luzon, we’re doing the Clark Mimosa project which will be office [space]… we’re now in the process of [the] planning stage for the mall there,” Ms. Gotianun-Yap said. The mall in Clark Mimosa will occupy a total area of 50,000 sqm but is expandable, Ms. Gotianun-Yap added. The 200-hectare Clark Mimosa estate has been leased to FLI and parent company Filinvest Development Corp. by the Clark Development Corp. It will develop, manage, and operate the property. Ms. Gotianun-Yap said four malls are targeted for completion by this year, namely Main Square in Bacoor, Cavite; Fora Mall in Tagaytay; II Corso in Cebu; and the expansion of Festival Mall in Alabang. The four malls will add around 100,000 to 150,000 sqm of GLA to FLI’s portfolio, for a total of 285,000 sqm by the end of 2017. Asked about the outlook for 2017, Ms. Gotianun-Yap noted that the company’s market is quite diverse. “We’re also all over the country. I think we move to where we feel the market is good,” she added. FLI booked a net income of P5.35 billion in 2016, on the back of solid growth in rental revenues which rose by 15% to P3.38 billion in the year prior. Consolidated revenues further climbed 7% to P19.5 billion from 2015’s P18.3 billion.

The Gotianun family’s EastWest Banking Corp. is ready to weather any top management transition—with its CEO, Antonio

Moncupa Jr., among those in the shortlist for the position of the Bangko Sentral ng Pilipinas governor—while preparing for its own shift into digital banking. Moncupa spoke with reporters at the sidelines of EastWest Bank’s annual meeting Friday, sharing plans to soon launch a mobile app for clients, while addressing speculation about heading the BSP after current governor, Amando Tetangco Jr., ends his second term on July 3, 2017. “In EastWest, there are enough executives and it is a bank that was built on processes. It’s not dependent on a single person,” said Moncupa, who has held the position of CEO since 2007. Moncupa early this year won the endorsement of President Duterte’s PDP-Laban political party. Tetangco’s successor, however, has yet to be formally named. East West announced last month that Roberto Reyes would be president and deputy-CEO, while Moncupa would assume the role of vice chair on May 1, 2017. Moncupa told reporters Friday the bank was evaluating its digital strategy. It had sought the BSP’s approval to launch a mobile app that would allow clients to conduct certain banking transactions over their phones and on the go. “We need to have a good mobile banking platform,” Moncupa said, noting the app was being tested “internally” by the company. “Mobile is the future.” Technology solutions come to the fore as Moncupa believes EastWest Bank has almost enough physical branches to serve the country. EastWest Bank ended 2016 with 445 branches, including those of its rural bank subsidiary, its annual report showed. Improving client convenience and access via technology were important for a bank that has built a strong business catering to the consumer market, a strategy it would keep in the meantime, Moncupa said. “We believe that strategy will hold and withstand any situation for the bank,” he said, while noting EastWest Bank would be ready to take advantage of trading opportunities as these emerge.

The Philippine Airlines (PAL) said that it is verifying the alleged labor violations that the Department of Labor and Employment

(DOLE) said some of its service providers have committed and vowed to comply with labor standards and practices. In a statement on Thursday, the airline company said that DOLE has sent PAL the results of its initial Special Assessment Visit of Establishments (SAVE) covering four stations – Bacolod, Dumaguete, Davao and Zamboanga, citing violations of labor standards which are contracting out workers, underpayment of wages, overtime pay and underpayment of service incentive leaves. “Philippine Airlines would like to clarify that these “noted” infractions/violations were in reference to alleged acts committed by service providers of PAL and PAL Express stations,” PAL said. “PAL Group Management (PAL and PALEX) shall exhaust all means to ensure compliance to general labor standards, labor laws and industry standards and practices,” it added. Labor Secretary Silvestre Bello on Wednesday said initial findings showed that PAL and PAL Express violated several labor laws. “PAL and PAL Express, including their contractors and sub-contractors – we also noted violations of general labor standards and occupational safety and health standards,” Bello said. PAL said that its management is currently carrying out a verification process on the allegations and has instructed all relevant domestic station operations heads to validate DOLE’s findings. “If and when these infractions are validated, PAL will require said service-providers to comply within a specified period as provided by DOLE rules and require submission of respective proof of compliance,” PAL said. “As we strive to sustain safety and service as the cornerstone of PAL operations, we welcome the conduct of such SAVE assessments from the Labor Department as these ensure a check and balance mechanism, which will ultimately redound to the benefit of PAL and its passengers,” it added. According to Labor Undersecretary Joel Maglunsod, who heads the labor compliance inspection, the assessment of PAL could be completed around May 1.

Ayala Corp., the country’s oldest conglomerate, plans to take on big-ticket infrastructure projects and venture into the logistics

business, while navigating a rapidly evolving global business landscape. In a briefing after its annual stockholders’ meeting in Makati City on Friday, AC Infrastructure Holdings Corp. President and Chief Executive Officer Jose Rene D. Almendras said the conglomerate intends to offer two more unsolicited infrastructure proposals to the government, one of which is a “sizeable” transport-related project in Mindanao. “This government’s openness to unsolicited proposals would produce some interesting potential opportunities. It’s really where the private (sector) sees an opportunity and the government decides if this dovetails with the development needs of the country,” Ayala Chairman Jaime Augusto Zobel de Ayala said. Ayala has received official acknowledgement from the Department of Public Works and Highways (DPWH) on Thursday for its unsolicited proposal with SM Investments Corp. to build a P25-billion elevated tollway dubbed as the C3 Expressway, Mr. Almendras said. Ayala and SM may accommodate more than two companies to join the consortium that will build the project connecting the SM Mall of Asia in Pasay City to Sta. Ana, Manila, he said. The conglomerate is likewise “very interested” in the logistics business following the group’s acquisition of a combined 49% interest in Zalora Philippines, the country’s largest online fashion platform. “What’s exciting about the Zalora investment which, on the surface, is an e-commerce platform, but underlying it is an engine that has been built from scratch to take goods from one point in the country to another and that is the beginning of a logistics and production chain,” Mr. Zobel said. “Today, it serves Zalora only, but obviously there are potential businesses we can get into (because of that). We’re not sure where it leads to but it’s an interesting idea to look at,” Ayala Chief Finance Officer Jose Teodoro K. Limcaoco said, noting that the venture is expected to be profitable by 2019. Ayala’s investment in Zalora and Mynt, an online and mobile payment service provider, will allow the group to ride on the e-commerce wave, which is expected to take off given the young population and high usage of internet and mobile phones in the country. In the past five years, the Ayala group expanded its core businesses in real estate, banking, telecommunications and water distribution, while embarking in new business initiatives in power, infrastructure, industrial technologies, healthcare and education. These emerging businesses are expected to strengthen its competitive advantage, maintain its relevance to its markets and establish a foundation for long-term growth and value, as the holding firm aims to rake in a net profit of P50 billion by 2020. “If you look at the amount of (capital expenditures) that we’re looking at this year, it’s an indication of how bullish we feel about the economy. It is across the group,” said Ayala President Fernando Zobel de Ayala, referring to its P185-billion spending program for the year to expand its business units. “The results have been good, we’re bullish about the economy and we’re expanding at a quick rate.” The conglomerate’s optimism comes at a time when the global economic and political landscape is shifting, driven by trade protectionism. While some nations may embrace a protectionist policy, natural business and and market forces will keep encouraging globalization. “That’s just the way things are,” Mr. J. Zobel said. So far, the global wave of protectionism has yet to make a significant dent on the Philippines, he said, with the strong domestic consumer demand shielding the economy from its impact. The Ayala group believes the government’s independent foreign policy that paved the way for improved ties with China bodes well for the country. President Rodrigo R. Duterte is set


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to attend the One Belt, One Road Summit -- aimed reviving an ancient silk road trading route that would connect Asian markets with economic circles in Europe -- in China next month. “If we become part of that infrastructure investment network that China is building, continue the globalization trend that has taken place and the Philippines becomes a part of it, then I think it augurs well for our country,” Mr. J. Zobel said. The Ayala group welcomed competition from foreign companies setting up shop to ride on the Philippines’ stellar economic growth run, noting that the country trails its neighbors in terms of job-generating foreign direct investment. “I never look at this as a zero-sum game. I think that any investment that comes to the Philippines is good for all of us. Any tide that rises will bring al l the boats with it,” Mr. J. Zobel said.

ASIA-PACIFIC

Japanese stocks rose to 1-1/2 week highs on Friday as global investors bet that U.S. tax reforms are gaining traction, but Fujifilm

Holdings tumbled after delaying the release of its earnings because of an accounting probe. The Nikkei 225 share average gained 1.0 percent to 18,620.75, its highest closing level since April 11. For the week, it gained 1.6 percent, posting its first weekly gain in six weeks. Traders said sentiment was lifted by overnight comments from U.S. Treasury Secretary Steven Mnuchin, who said the Trump administration will "very soon" unveil a tax reform plan and expects it will be approved by Congress this year whether a healthcare overhaul happens or not. The dollar held steady versus the yen at 109.32 yen after rising 0.4 percent on Thursday, lifting automakers and other exporters. However, Fujifilm Holdings Corp tumbled 4 percent after it postponed its earnings report over an investigation into accounting practices at an overseas unit. The broader Topix gained 1.1 percent to 1,488.58 and the JPX-Nikkei Index 400 advanced 1.1 percent to 13,321.58.

Shanghai stocks post their worst week in 2017 as tighter regulatory scrutiny and concerns over the broader economic outlook

dampened investors' risk appetite. The blue-chip CSI300 index rose 0.2 percent to 3,466.79, while the Shanghai Composite Index was flat at 3,173.15 points. For the week, the CSI300 was down 0.5 percent, while the SSEC lost 2.2 percent. Anxiety over tighter liquidity has deepened as Beijing intensifies its battle against speculative trading and riskier financial practices. Top securities regulator Liu Shiyu last weekend urged stock exchanges to "brandish their sword" and punish market misbehaviours "with no mercy". The banking regulator has issued slew of policy directives in recent weeks aimed at lenders' shadow banking business and risk management. The insurance regulator has also called on insurance companies to strengthen supervision of operations and investment activities and correct market disorder. Sentiment has also been hit by growing worries over China's economic outlook. A Reuters poll predicted economic growth slowing to 6.5 percent for the full year and weakening further to 6.2 percent in 2018, as the government seeks to cool the property sector and contain risks from a dangerous build-up of debt. For the week, investors retreated from small-caps to seek cover in defensive sectors, in particular consumer and healthcare, while real estate and bank stocks lost ground amid curbs on property investments and tighter regulation targeting shadow banking activity. In particular, stocks expected to benefit from the development of the country's new Xiongan Economic Zone dragged the most, as regulators' warnings about speculative activity checked investor enthusiasm. Building materials maker BBMG was down 23 percent from its recent peak, while developer China Fortune Land lost 21 percent from its record high. Some steelmakers gained despite the launch of a U.S. trade probe against China and other exporters of cheap metal, with traders noting that Washington's move had been long expected.

Hong Kong stocks edged lower in thin trading on Friday, as investors took to the sidelines ahead of the first round of a tight

French presidential election on Sunday. Both the benchmark Hang Seng index and the China Enterprises Index lost 0.1 percent at the close, to 24,042.02 and 10,050.02, respectively. Investors were reluctant to place fresh positions as they waited on the outcome of the first round of the French presidential election on Sunday. The overnight shooting in Paris claimed by Islamic State had also dampened the mood. Also in focus was U.S. President Donald Trump's decision on Thursday to launch a trade probe against global steel exporting countries including China, the world's largest, raising the possibility of new tariffs and sending shares of some U.S. steel makers up over 8 percent. But Chinese markets shrugged off the plan partly as Washington's move had been long anticipated. "U.S. accounts for a small proportion in China's steel exports," said Yang Kunhe, steel analyst at Northeast Securities. "But if Trump's probe translates into action, it would increase the chance of trade frictions, and hurt market sentiment." Sector performance was mixed in Hong Kong, with property developers leading the declines.

Japanese investment house Daiwa has paid P1.32 billion for a 14.9 percent stake in the country’s leading online stock brokerage

COL Financial Group Inc. The deal – which involves the sale of 70.924 million shares priced at P18.63 per share to Daiwa Securities Group – was executed at the local stock exchange on Friday. This marked a premium of 15 percent from the closing price of P16.20 per share on Thursday, the day that the transaction was announced. Italso brought the valuation of 18-year-old COL Financial, which is controlled by businessman Edward Lee, to P8.87 billion, richer than its current market capitalization of P7.7 billion. COL Financial is the Philippines’ largest online stockbroker, providing access to stock and mutual fund investments, expert guidance, and advisory services to over 200,000 clients. It is the leading stockbroker in the country in terms of number of trades executed. It also ranks sixth out of 132 trading participants in terms of value turnover as of end-2016. The local brokerage house also operates the first and only online fund supermarket in the country, called COL Fund Source, which allows clients to invest in various mutual funds using their online accounts. COL Financial also owns 100 percent of COL Securities Limited Ltd., formerly CitisecOnline.com Hong Kong Ltd., a wholly-owned foreign subsidiary domiciled and incorporated in Hong Kong, primarily to act as stockbroker and to invest in securities. Daiwa is one of the leading and comprehensive financial service firms in Asia, offering a complete spectrum of financial products, with core business segments in retail, wholesale and asset management. The Japanese firm’s investment in COL Financial is seen to give Daiwa “the opportunity to participate in the Philippines’ fast-growing retail segment and young wealth builders, which are among the major beneficiaries of the country’s strong economic prospects,” a statement from COL said.

Japanese electronics conglomerate Panasonic Corp (6752.T) has raised its offer to buy out subsidiary PanaHome Corp (1924.T),


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in an effort to satisfy the housebuilder's shareholders, who were unhappy with the original bid. In a statement on Friday, Panasonic said it had decided to make an all-cash offer to buy the rest of PanaHome in a deal worth 92.4 billion yen ($846.9 million). Panasonic, which already owns 54.18 percent of the subsidiary, said its offer was 1,200 yen per share, representing a 16.4 percent premium on Friday's closing price. Panasonic had originally planned to buy out PanaHome through an all-stock deal, which valued the latter at 1,009 yen per share, based on Panasonic's closing price of Dec. 20, the day the offer was announced. Some PanaHome shareholders claimed that offer undervalued the company and did not reflect its large cash holdings. In making the new offer, Panasonic said it had showed the "utmost consideration" to other PanaHome shareholders by including a premium in its offer and believed that it would lead to the bid being endorsed. On trade negotiations with the United States, Aso reiterated his view that it would be in both the interests of Japan and the United States for Washington to re-join TPP talks instead of pursuing a bilateral free trade agreement. While it was still desirable for the United States to join the TPP, Japan was open to negotiating a TPP deal with 11 nations excluding the United States, Aso said. "Some countries are keen to do this and will come up with various ideas. There's no reason to turn this down. Various options are available and (negotiating without the United States) is one of the options," he said. The Trump administration has signaled its intention to push for a two-way trade deal, while Japan wants to avoid a bilateral free trade agreement for fear of facing direct U.S. pressure to open up highly protected markets like agriculture and beef.

China's economy may grow faster than the International Monetary Fund (IMF) had expected for all of 2017 after a first-quarter

performance that beat forecasts, the fund said, as it urged Beijing to address entrenched financial risks in the country. Data this month showed China's economy grew at a faster-than-expected rate of 6.9 percent in the first three months of this year after record credit growth, a gravity-defying property boom and higher government infrastructure spending juiced activity. The better-than-anticipated data prompted the IMF this week to raise its 2017 and 2018 growth forecasts for the Chinese economy, and Changyong Rhee, director of the Asia and Pacific Department at the fund, said on Friday there was a chance it may lift its 2017 estimate again. The IMF, which holds its spring meeting this week for central bankers and finance ministers, lifted its 2017 growth projection for the Chinese economy, the world's second largest, to 6.6 percent from 6.5 percent on Tuesday. "There is upside risk to our current projection," Rhee told reporters at a briefing. But at the same time, the fund said it expects certain parts of China's economy, including its real estate market and its shadow banking sector, to cool in the second half of this year. The fund said it has always advised China that the country's financial trends are "dangerous and unsustainable." These include an "excessive" role of the state, large resource miscalculation in many areas, state-owned companies that lack budget constraints and financial discipline, said Markus Rodlauer, deputy director of the Asia and Pacific Department at the IMF. "When this would unravel in some way or another, nobody can predict," said Markus Rodlauer, deputy director of the IMF's Asia and Pacific Department, adding the fund was hopeful that China could untangle its problems. China's debt-to-GDP ratio rose to 277 percent at the end of 2016 from 254 percent the previous year, with an increasing share of new credit being used to pay debt servicing costs, according to an estimate from UBS.

High leverage is the biggest risk facing China's economy as debt has piled up despite government efforts to deleverage,

exposing the world's second-largest economy to systematic financial risks, a former finance minister was quoted as saying on Friday. Household debt has crept up to about 50 percent with a shift in consumption habits and record mortgage lending last year, Lou Jiwei, former finance minister and chairman of China's National Council for Social Security Fund, said during a forum in Beijing, according to state television CCTV. Lou also stressed there was a silver lining to some recent default cases involving local governments that failed to pay off their debt, as they sent a strong message that the central government would not bail them out. "It's a good thing, educating the market that whether you are a state-owned or private company, you will have to take responsibility if you default on your debt, nobody will save you," he said. Data from the Bank for International Settlements showed China's household debt as a proportion of gross domestic product (GDP) had more than doubled to 43.2 percent in October in less than 10 years. While developed nations have higher rates of household debt, Chinese families are much more leveraged because income is lower and so proportionately the costs of social welfare, from pensions to healthcare, are much higher. China's total private and public debt has exceeded 250 percent of GDP, up from 150 percent before the global financial crisis, according to the Organisation for Economic Co-operation and Development (OECD). Lou said the Chinese economy had not hit the "Lewis Turning Point," a tipping point where there is no surplus of rural labor and urban wages rise dramatically, but he remained cautious about China's economic outlook, saying it may stick to an "L-shaped" pattern of "horizontal" growth.

China extended 1.7 trillion yuan ($247 billion) in property loans in the first quarter of 2017, central bank data showed on Friday,

reflecting robust demand in the sector. Property loans, comprised mainly of individual mortgages and loans for real estate development, accounted for 40.4 percent of all new loans made in the quarter, data from the People's Bank of China (PBOC) showed. In the first quarter of 2016, lending was 1.5 trillion yuan ($218 billion) and sales growth accelerated to a near three-year high boosted by a range of official stimulus measures. Lending in the first quarter of 2017 showed a significant rebound from the previous quarter's 1.21 trillion yuan ($176 billion), a Reuters' calculation based on central bank data showed, when demand was oppressed by a slew of property curbs introduced in October until sales picked up again this year. Outstanding property loans rose 26.1 percent from a year earlier to 28.39 trillion yuan at the end of the first quarter, it said. Outstanding individual mortgages rose 35.7 percent from a year earlier by the end of the first quarter to 19.05 trillion yuan, the PBOC said in a report posted on its website. Marking a departure from previous quarters, the PBOC did not disclose the net increase in individual mortgages in the first quarter. The PBOC could not be immediately reached for comment.

Energy giant Chevron on Friday lost its appeal in a major battle against a Aud$269-million ($203 million) tax bill in a case that

could have global implications for multinationals looking to cut their obligations. The Federal Court ruled in favor of a 2015 decision by the same court that the US giant had minimized its payments through a loan scheme and ordered it to foot costs, estimated by local media at more than Aud$10 million. The ruling is a significant victory for the Australian Taxation Office (ATO), which is investigating other global firms for alleged avoidance. It also followed an announcement by Canberra this month that seven multinationals were facing a total of Aud$2.9 billion in bills after assessing their tax arrangements. Chevron said in a statement that it was disappointed with the outcome. “We will review the decision to determine the next steps, which may include an appeal to the high court of Australia,” a spokesperson said. A response from the ATO was not immediately available. The ruling was closely watched as governments cracked down on multinationals that build complex structures to reduce taxation. Chevron added in its statement that the trial court had recognized that the financing was a “legitimate business arrangement” and that the parties differed only over what interest rates should have been applied to the loans. KPMG tax partner Grant Wardell-Johnson said the decision was a “substantial win” for the ATO. The court heard that Chevron subsidiary ChevronTexaco Funding Corporation, which was incorporated in the US state of Delaware, had loaned its Australian arm $2.5 billion in 2003 at a favorable interest rate. But tax officials said the rate of repayment—which could be set against tax—was much higher than if it had borrowed from another company.


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REST OF THE WORLD

French blue-chip stocks underperformed other European benchmark indexes on Friday as investors retreated from risky bets

ahead of the too-close-to-call first round of France's presidential election. The CAC 40 fell 1 percent, while the pan-European STOXX 600 index was down 0.1 percent. "So far markets have been pretty sanguine in the face of the (French) presidential election, which was flagged as one of the potential banana skins for markets in this year," Hargreaves Lansdown senior analyst, Laith Khalaf, said. "There may be a bit of political weariness among investors, but also they may just be thinking that, actually, they’re not going to place market bets based on political events, and that would be an entirely sensible strategy," he said. Among French standout movers, Danone was the biggest faller on the CAC 40, down 2.2 percent after reporting first-quarter sales figures. French banks Societe Generale and BNP Paribas extended the previous session's gains, both rising about 1 percent. Earnings and deal-making drove stock price moves elsewhere, including a jump of 7 percent for Software AG, making the shares the STOXX 600's top gainer, after reporting first-quarter results. Software's quarterly core profit declined less than expected. Tech sector peer ASM International rose 3.2 percent after Natixis raised its target price. Europe's earnings season kicks off in earnest next week with Credit Suisse, UBS and SAP among those reporting results. European first quarter earnings are expected to increase 7.2 percent from the first quarter of 2016, according to Thomson Reuters I/B/E/S data. Excluding the energy sector, this would be a rise of 2.9 percent. Engineering firm WS Atkins gained 5.1 percent after Canada's SNC-Lavalin Group said it would buy the firm for C$3.6 billion, firming up this month's indicative offer. Among other standouts, Orkla was the biggest faller on the STOXX 600 after going ex-dividend, while a downgrade from Panmure weighed on SSP Group's shares. Basic resources stocks were the biggest sectoral gainers, up 1.4 percent as steel miners rallied, with ArcelorMittal and Outokumpu up 2.6 percent and 1.7 percent respectively. Iron ore miner Rio Tinto also rose, as an advance for Chinese steel companies outweighed the impact of a U.S. trade investigation into China. Oil stocks were also a drag, falling 0.5 percent as crude prices retreated.

U.S. stocks dipped on Friday as investors were cautious ahead of the first round of the closely contested French presidential

election, but the S&P 500 managed to notch its first weekly gain in three. The first round of France's presidential election may be too close to call when polls close on Sunday because initial projections will not be available as early as in the past, pollsters and their watchdog said. Most polls see centrist Emmanuel Macron and far-right leader Marine Le Pen qualifying on Sunday for a May 7 runoff, but conservative Francois Fillon and leftist Jean-Luc Melenchon are not far behind and within the margin of error. "Nobody is taking anything for granted after the big swing and miss in Britain and the big swing and a miss here," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "I don’t think anyone wants to stick their neck out for this one." U.S. President Donald Trump said he would have a major tax reform announcement on Wednesday. The Dow Jones Industrial Average .DJI fell 30.95 points, or 0.15 percent, to 20,547.76, the S&P 500 .SPX lost 7.15 points, or 0.30 percent, to 2,348.69 and the Nasdaq Composite .IXIC dropped 6.26 points, or 0.11 percent, to 5,910.52. For the week, the Dow rose 0.5 percent, the S&P gained 0.8 percent and the Nasdaq advanced 1.8 percent in what was the first weekly gain for the top indexes over the last three weeks. A steady stream of strong earnings through the week helped to buoy market sentiment. Of the 95 companies in the S&P 500 that have reported earnings through Friday morning, about 75 percent have topped expectations, according to Thomson Reuters data, above the 71-percent average for the past four quarters. Overall, profits of S&P 500 companies are estimated to have risen 11.2 percent in the quarter, the most since 2011. Shares of General Electric (GE.N) fell 2.4 percent to $29.55 after the company reported negative cash flow from its industrial operations in the first quarter. The stock was the biggest drag on the S&P 500. Schlumberger (SLB.N) lost 2.2 percent to $74.84. The oilfield services provider warned that margins would remain under pressure as it spends more to bring back idled equipment. Mattel (MAT.O) tumbled after the toymaker reported a bigger-than-expected quarterly loss. The stock closed near its session low, down 13.6 percent at $21.79. Federal Reserve Vice Chair Stanley Fischer told CNBC that the central bank remains on track for two more interest rate increases this year despite some soft economic data recently. Declining issues outnumbered advancing ones on the NYSE by a 1.19-to-1 ratio; on Nasdaq, a 1.40-to-1 ratio favored decliners. The S&P 500 posted 28 new 52-week highs and 1 new low; the Nasdaq Composite recorded 92 new highs and 39 new lows. About 6.40 billion shares changed hands in U.S. exchanges, slightly above the 6.31 billion daily average over the last 20 sessions.

France voted on Sunday in the first round of a bitterly fought presidential election that could define the future of the European

Union, and is sure to be seen as a gauge of the anti-establishment anger that has brought upsets in Western politics. Over 50,000 police and 7,000 soldiers backed by rapid response units patrolled streets three days after a suspected Islamist gunman shot dead a policeman and wounded two others in the heart of the capital, Paris. Voters will decide whether to back a pro-EU centrist newcomer, a scandal-ridden veteran conservative who wants to slash public expenditure, a far-left eurosceptic admirer of Fidel Castro, or a far-right nationalist who, as France's first woman president, would shut borders and ditch the euro. The outcome will show whether the populist tide that saw Britain vote to leave the EU and Donald Trump elected president of the United States is still rising, or starting to ebb. But it also provides a choice between radically different recipes for reviving a listless economy that lags its neighbors, and where almost a quarter of under-25s have no job. A high level of indecision added to the nervousness. Hanan Fanidi, a 33-year-old financial project manager, was still unsure as she arrived at a polling station in Paris's 18th arrondissement. "I don't believe in anyone, actually. I haven't arrived at any candidate in particular who could advance things," she said. "I'm very, very pessimistic." Despite fears that broad disillusionment with politics could keep voters away, the early turnout, in fair weather nationwide, was marginally up on the last election, in 2012. Emmanuel Macron, 39, a centrist ex-banker who set up his party just a year ago, is the opinion polls' favorite to win the first round and then beat far-right National Front leader Marine Le Pen in the two-person runoff on May 7.

Britain's Theresa May appeared on course to win a crushing election victory in June after opinion polls put support for her ruling

Conservative party at around 50 percent, double that of the opposition Labour party. May's decision to call a June 8 election stunned her political rivals this week and a string of polls released late on Saturday suggested the gamble had paid off, with one from ComRes showing the party of Margaret Thatcher enjoying levels of support not seen since 1991. May, appointed prime minister in the turmoil that followed Britain's vote to leave the European Union last June, said she needed the election to secure her own mandate and strengthen her hand for the Brexit negotiations ahead. She is also looking to capitalize on the disarray swirling around the Labour party, which has been riven with internal division over its leader Jeremy Corbyn. Voters also appear to be switching from the anti-EU UKIP party,


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which helped campaign for Brexit, to May's Conservatives, which will likely deliver it. "The announcement of a snap election has clearly focused the minds of the electorate," said James Crouch at pollster Opinium. In two other polls, May's Conservatives also gained ground in Scotland at the expense of the Scottish National Party, potentially weakening the nationalists' demand for another independence referendum. May has already warned her party not to take victory for granted, a message that was echoed by pollsters on Saturday. "While no political party could ever object to breaching the 50 percent barrier for the first time this century, this spectacular headline result masks a real danger for the Tories," said ComRes Chairman Andrew Hawkins. "The fact that six in ten voters believe Labour cannot win under Corbyn’s leadership bring with it the threat of complacency among Tory (Conservative) voters who may be tempted to sit at home on June 8th and let others deliver the result they expect." According to polls by Opinium, ComRes and YouGov, May's Conservatives held a lead of between 19 and 25 percentage points, with the party's support ranging from 45 percent to 50 percent. Having repeatedly denied that she would call an election, May is now also poised to announce a raft of policy proposals more commonly associated with the left-leaning Labour party, according to the Sunday Times. The newspaper said the Conservatives would pledge to protect workers' rights and cap more household energy prices in a bid to help those hit by rising inflation and muted wage growth. If the polls are correct, the Conservatives could secure a once-in-a-generation victory that will realign the British political landscape. According to the polls, Labour has lost its reputation as the party that would best protect the National Health Service - once its strongest claim. The improved Conservative fortunes across the country have also spread to Scotland, where First Minister Nicola Sturgeon's Scottish National Party, or SNP, has stepped up calls for a second independence referendum. According to an analysis for the Times, the Conservatives are on course to win 12 seats in Scotland while Labour will be wiped out from its former political stronghold. Currently, the Conservatives hold only one of Scotland's 59 seats in the British parliament. The SNP holds 54.

Greece far exceeded its international lenders' budget demands last year, official data showed on Friday, posting its first overall

budget surplus in 21 years even when debt repayments are included. The primary surplus -- the leftover before debt repayments that is the focus of International Monetary Fund-European Union creditors -- was more than eight times what they had targeted. Data released by Greek statistics service ELSTAT -- to be confirmed on Monday by the EU -- showed the primary budget surplus at 3.9 percent of gross domestic product last year versus a downwardly revised 2.3 percent deficit in 2015. This was calculated under European System of Accounts guidelines, which differ from the methodology used by Greece's in bailout deliberations. Under EU-IMF standards, the surplus was even larger. Government spokesman Dimitris Tzanakopoulos said the primary budget surplus under bailout terms reached 4.19 percent of gross domestic product last year versus the 0.5 percent of GDP target. "It is more than eight times above target," Tzanakopoulos said in a statement. "Therefore, the targets set under the bailout program for 2017 and 2018 will certainly be attained." Debt-strapped Greece and its creditors have been at odds for months over the country's fiscal performance, delaying the conclusion of a key bailout review which could unlock needed bailout funds. The IMF, which has reservations on whether Greece can meet high primary surplus targets, has yet to decide if it will fund Greece's current bailout, which expires in 2018. The 2016 outperformance could lead the fund to revise some of its projections. The IMF's participation is seen as a condition for Germany to unlock new funds to Greece. Athens hopes to discuss the fund's participation and its projections at the sidelines of the IMF's spring meetings in Washington. EU and IMF mission chiefs are expected to return to Athens on Tuesday to discuss the bailout review. After meeting Greek Finance Minister Euclid Tsakalotos in Washington, IMF chief Christine Lagarde said: "We had constructive discussions in preparation for the return of the mission to discuss the two legs of the Greece program: policies and debt relief." ELSTAT said the overall surplus including debt repayments reached 0.7 percent of GDP compared with a 5.9 percent deficit in 2015. Analysts attributed the outperformance to the implementation of bailout measures and increased efforts to improve the state's revenue collection capacity. "It's an impressive outperformance versus the bailout program target for the primary surplus," said Athens-based Eurobank's chief economist Platon Monokroussos. "The data suggests that the 2017 fiscal target under the bailout program is fully attainable under the current baseline macroeconomic scenario," he said. Athens faces a primary surplus target of 1.75 percent of GDP this year.

President Donald Trump on Thursday launched a trade probe against China and other exporters of cheap steel into the US

market, raising the possibility of new tariffs and sending shares of some US steel makers up over 8 percent. Citing concerns about national security, Trump made the announcement at a White House ceremony with US steel executives from Nucor Corp, United States Steel Corp and TimkenSteel Corp alongside Commerce Secretary Wilbur Ross, a billionaire businessman who made part of his fortune investing in the steel business. "Steel is critical to both our economy and our military," said Trump, a Republican. "This is not an area where we can afford to become dependent on foreign countries." Trump won many votes in industrial states like Michigan and Pennsylvania with a pledge to boost manufacturing and crack down on Chinese trade practices. China is the largest national producer and makes far more steel than it consumes, selling the excess output overseas, often undercutting domestic producers. The unusual step of launching an investigation comes as Trump is pressuring China to do more to rein in an increasingly belligerent North Korea. When Chinese President Xi Jinping visited Trump in Florida earlier this month, Trump raised the possibility of using trade as a lever to coax China to do more. “Everything they export is dumping,” said Derek Scissors, Asia economist at the American Enterprise Institute, a Washington think tank. Ross cast the decision to initiate the probe as a response to Chinese exports of steel into the United States reaching the point where they now account for 26 percent of the US market. Chinese exports have risen "despite repeated Chinese claims that they were going to reduce their steel capacity," said Ross, whom The Economist, a business magazine that champions free trade, in 2004 labeled "Mr. Protectionism" for his history of owning businesses protected from foreign competition. Ross said that if the Commerce inquiry finds the US steel industry is suffering from too much steel imports, he will recommend retaliatory steps that could include tariffs. Diverging from the Obama administration's approach to the issue, which relied largely on filing complaints to the World Trade Organization (WTO), Trump ordered a probe under Section 232 of the Trade Expansion Act of 1962, which lets the president impose restrictions on imports for reasons of national security. In October 2001, a Commerce Department investigation found "no probative evidence" that imports of iron ore and semi-finished steel threaten to impair US national security. Steel shares had rallied after Trump won the November election amid promises for increased infrastructure spending. On Thursday shares of Steel Dynamics Inc, AK Steel Holding Corp, Cliffs Natural Resources Inc, Allegheny Technologies Inc and other steel makers closed between 4 percent and 8.5 percent higher. The United States has nearly 100 plants that make millions of tons of steel annually. The US government has attempted to shield them from cheap foreign steel chiefly through the WTO, but the Trump administration said this has had little impact. "The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American steel industry," the administration said in a statement. Nucor Chairman John Ferriola said in a statement that the steelmaker welcomed the president's move. "We look forward to continuing to work with the president and Secretary Ross to ensure our trade laws are enforced so that US manufacturers can compete on a level-playing field," he said. Experts were skeptical about the administration's argument that cheap Chinese steel threatened US national security. The Defense Department's annual steel requirements comprise less than 0.3 percent of the industry’s output by weight. “There is no doubt that steel plays a role in our national security and the manufacturing of US weapons systems,” said Jeff Bialos, a partner at law firm Eversheds Sutherland, who has worked on steel trade cases in the past. "But the Department of Defense only consumes a small portion of domestic steel output, and this has decreased over the past decade as composites technology has advanced,” Bialos said. Some of the military’s largest consumers of steel are US Navy shipbuilders Huntington Ingalls Industries Inc and Lockheed Martin Corp. Scissors said the United States has other ways to take on China over steel trade issues, other than invoking national security. “Talking about it as a national


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security issue - I don’t think it’s necessary and I don’t think it’s justified,” he said. Global steel demand will grow more than previously forecast in 2017 due to a recovery in developed economies and accelerating

growth in emerging and developing markets, especially Russia, Brazil and India, an industry body said on Friday. Demand is on course to expand 1.3 percent in 2017 to 1.535 billion tonnes and a further 0.9 percent in 2018 to 1.549 billion tonnes, World Steel Association (Worldsteel) said. Worldsteel, representing more than 160 steel producers accounting for 85 percent of global production, had forecast in October that demand would rise 0.5 percent this year. The steel industry, worth about $900 billion a year, is seen as a gauge of the world's economic health. "We expect that Russia and Brazil will finally move out of their recessions. After the demonetisation shock, the Indian economy is expected to resume growth," Worldsteel said. "However, China, which accounts for 45 percent of global steel demand, is expected to return to a more subdued growth rate after its recent short uplift," it said in a statement. Worldsteel expects China's demand for steel to be flat this year at 681 million tonnes and fall 2 percent next year to 667.4 million tonnes as the effects of last year's infrastructure-led government stimulus fade. By contrast, the group expects steel demand in emerging and developing economies excluding China to grow 4 percent this year to 452.7 million tonnes, and a further 4.9 percent next year to 474.9 million tonnes. Worldsteel raised its estimate for last year's demand growth to 1 percent from 0.2 percent, primarily because Beijing's infrastructure-led stimulus resulted in a sharper-than-expected increase in China's steel use. Steel prices have climbed on the back of rising demand and capacity cuts in China, coupled with a spate of anti-dumping measures that knocked Chinese steel exports from record levels of 2015. According industry consultants MEPS, prices have risen some 45 percent since December 2015, when they had hit 12-year lows.

BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law and the AML Risk Rating System – 05 May

2017

RA 10173: Data Privacy Act – Aligning Information Security Compliance to ISO 27001:2013 – 06 May 2017

Understanding Bank Regulations for Bank Products – 06 & 13 May 2017

Compliance with Financial Consumer Protection Framework (FCPF) – 12 May 2017

Training the Bank Trainers – 12 & 13 May 2017

BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law and the AML Risk Rating System – 19 May 2017

How to Spot Fake IDs and Money Mules – 20 May 2017

Bank’s Taxation – Advanced – 20 May 2017

IT Security & Auditing – 20 May 2017

Counterfeit Detection – 27 May 2017

Solving Problems in the Workplace: Creative Problem Solving & Decision Making – 02 & 03 June 2017

Macros Training for Bankers – 08 & 09 June 2017

BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law and the AML Risk Rating System (Cebu City)– 09 June 2017

Signature Verification and Forgery Detection – 10 June 2017

For details, please contact BAIPHIL via telephone (853-4457/519-2433) or email [email protected].


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APRIL 16-30

16 Mary Grace Linell S. Alvero – GSIS Bank

16 Cecilia C. Borromeo – LandBank

19 Mabel C. KoGaw – PCHC

19 Ma. Luisa A. Dadia- Wells Fargo

19 Who B. Olandez – Equicom Savings Bank

20 Cesar G. Ilagan - UBP

22 Lagrimas R. Nuqui – BSP

22 Jaime Aristotle B. Alip – CARD Inc

23 Ma. Corazon A. Mallillin – BDO

24 Blesilda P. Andres - BPI

RETURN-ON-MARKET-VALUE-OF-EQUITY (ROME) - ROME is a comparative measure typically used

by analysts to identify companies that generate positive returns on book value and trade at otherwise

low valuations. The market value of equity is generally accepted to be synonymous with a company's

market capitalization, and the return on market value of equity is effectively the profit yield on a

company's stock price. Return on market value of equity measures the profit yield on a company's

market capitalization, which is a function of its share price and the number of its shares outstanding.

Some hedge funds employ a return on market value of equity strategy to identify undervalued shares

to purchase. This strategy tries to evaluate a firm's intrinsic value and compare that value to the

current observed market price of its shares. In general, a return on market value of equity based

strategy is considered to be a tool used by value investors, but it also allows for the fact that future

growth is an important component of assessing a stock's intrinsic value.

IT’S MORE FUN IN THE PHILIPPINES – SUMMER SERIES GREAT SANTA CRUZ ISLAND, ZAMBOANGA

On Great Santa Cruz Island, pulverized red coral washed up from the sea floor mixes with white sand to produce a pink-hued beach. It's a different version of perfection: the powdery beach competes with the blue and green shades of the sea. Some parts of the beach are lovely in their undeveloped state. There are signs of civilization -- souvenirs, nipa huts and restrooms. Beach visits are limited to day trips, so you have to squeeze everything into a few hours: swim, sunbathe, snorkel, dive, even fish for your lunch. Just don't mistake

serenity for safety -- there's a deep drop in the sea just meters from shore. The island is just a boat ride away from the city proper, but getting there requires extra precautions, due to local threats. Only those with a tourist permit from the Department of Tourism in Zamboanga City can visit. The permit fee includes armed security escorts. Why the need for security? According to the Department of Tourism's regional office, it's a preventative measure: "On the security situation in Zamboanga City, there are no militant or terroristic activities recently. Although there were reported shooting incidents, these were intended to specific victims due to personal grudges. The city is very vibrant and relatively peaceful."


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REFERENCE COMPILED AND PREPARED BY: RESEARCH AND INFORMATION COMMITTEE FY 2016-2017

BPI Asset Management Business World Philippine Daily Inquirer Philippine Star GMA News ABS-CBN News Bulletin Today PSE

Reuters Bloomberg CNN Wall Street Journal Investopedia Brainy Quotes Goodreads Corsinet- Trivia

Director: Maria Teresita R Dean (ChinaBank Savings) Chair: Sheryll K. San Jose (Equicom Savings Bank) Member: Rachelle A Fajatin (Equicom Savings Bank)

DISCLOSURE: The BAIPHIL Market Watch (BMW) is for informational purposes only. The content of the BMW is sourced from third party websites and may be subject to change without notice. Although the information was compiled from sources believed to be reliable, no liability for any error or omission is accepted by BAIPHIL or any of its directors, officers or employees, and BAIPHIL is not under any obligation to update or keep current this information

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