BusinessMirror December 31, 2015

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Monday 2014 Vol. 1031, No.2015 40 Thursday,18, December Vol. 11 No. 84

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PHL opts to join China-led AIIB to boost infrastructure thrust By David Cagahastian & Cai U. Ordinario

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anila’s decision to join the China-led Asian Infrastructure Investment Bank (AIIB) will boost the Philippines’s efforts to build more and better public infrastructure, senior government officials said on Wednesday.

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Communications Secretar y Herminio B. Coloma Jr. confirmed that President Aquino had given his nod to the Department of Finance’s (DOF) recommendation to become one of the founding

members of the AIIB. Philippine Ambassador to China Erlinda F. Basilio will sign the Articles of Agreement (AOA) of the AIIB on behalf of the government in Beijing today, December 31—the

deadline set by China for founding members to join. Signing the treaty will allow the Philippines to tap into the bank’s funds to finance infrastructure projects. “The Philippines stands to gain from signing on as a founding member. We can look forward to deepening our country’s technical expertise in infrastructure as we expand bankable projects,” Finance Secretary Cesar V. Purisima said in a statement. “Further, as the AIIB has no restriction on the procurement of goods and services from any country, we may foresee market expansion for infrastructure-related industries, widening job and business-growth opportunities,” he added. Another lender, the Manilabased Asian Development Bank

PURISIMA: “The Philippines stands to gain from signing on as a founding member. We can look forward to deepening our country’s technical expertise in infrastructure as we expand bankable projects.”

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(ADB), has estimated Philippine infrastructure-funding needs from 2010 through 2020 to be at $127.12 billion, requiring an annual investment of $11.56 billion. Asean, meanwhile, has a financing gap of $1.08 trillion through the decade. The ADB projected that the Philippines stands to gain from closing this gap: accumulated reduction in trade costs is estimated to be at 15.6 percent of trade value, and will result in a gain of about $220 billion in real income. The National Economic and Development Authority (Neda) also expects the Philippines to benefit from its membership to the AIIB, especially if its rules are transparent and its decisions are on a par with international standards for multilateral institutions.

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Palace still reviewing bill creating agency for ICT By Butch Fernandez

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alacañang said it is not rushing to beat information-technology advocates’ year-end timeline for President Aquino to sign into law a Congressapproved bill creating a new agency for the information and communications technology (ICT) sector.

Communications Secretary Herminio B. Coloma Jr. said the approved final version of the Department of Information and Communications Technology (DICT) bill earlier submitted to Mr. Aquino for signing was still undergoing scrutiny by Malacañang officials, whom he did not identify. The Senate passed the DICT bill on third and final reading on June 1,

PESO exchange rates n US 47.1660

while the House of Representatives took a final vote approving the measure on October 12, paving the way for its submission to President Aquino. “Like all other enrolled bills, it undergoes review in the Office of the President,” Coloma said. According to its sponsor, Sen. Ralph G. Recto, who chairs the Senate Committee on Science and

Technology, the proposed law creating the DICT intends to “promote digital literacy and ICT expertise across the country.” For his part, Senate President Franklin M. Drilon said the proposed new department is “part of the key economic-reform legislation being pushed in the Senate to help

BSP MAINTAINS 2-4% INFLATION TARGET FOR THE NEXT 2 YEARS

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By Bianca Cuaresma

he monetary authorities anticipate price pressures remaining benign and, in any case, not likely ranging beyond 4 percent in terms of inflation over the next 18 months and even beyond, according to the Bangko Sentral ng Pilipinas (BSP). The BSP said it has kept the inflation target from this year’s 2 percentto- 4 percent range unchanged until 2018, upon consideration that price pressures were to remain moderate, given the projected continued expansion of the local economy over the same timeline. In a statement issued only recently, the central bank projected inflation between now and 2018 likely ranging from only 2 percent to 4 percent. The three-year forecast inflation path was “consistent with the country’s evolving price dynamics and sustained economicgrowth objectives.” The forecast inflation path for this year alone, ranging from 2 percent to 4 percent, also represents a scaleback from the original range of 3 percent to 5 percent, indicating regulator confidence that price pressures were to remain subdued not just over the next 18 to 24 months but also over the next three years. “The current low-inflation environment could be sustained over the medium term, as underlying structural inflation dynamics are favorable with the improved ability of the domestic economy to accommodate supply shocks,”the BSP said. “In particular, compared to preinflation targeting period, headline inflation has been observed to return faster to the target, while the influence of the foreign-exchange rate has diminished,” it added. In the first 11 months, inflation averaged 1.4 percent, well below the target for the year of 2 percent to 4 percent. While the central bank has given up within-target inflation this year and acknowledged that consumer prices will fall short of projection, the BSP said some acceleration is

expected in December, with headline inflation likely higher than the 1.1 percent reported in November. BSP officials also earlier said the anticipated uptick in December was likely to persist in subsequent months before gradually moderating again the rest of 2016. “The announcement of the target is in line with the BSP’s commitment to greater transparency and accountability in the conduct of monetary policy. Going forward, the BSP will continue to ensure that the monetary-policy stance remains appropriate, consistent with its primary mandate of safeguarding price stability conducive to a balanced and sustainable economic growth,” the central bank said. Earlier, the Department of Finance said record-low inflation averaging 0.4 percent in October may have already bottomed out, with headline inflation in November rising to 1.1 percent due to a modest rise in food prices, the government’s chief economist said on Wednesday. Finance Undersecretary Gil S. Beltran said previously projected inflation edging up 0.8 percent in November consistent with the 2 percent-to- 4 percent range that the Cabinet-level Development Budget Coordinating Council set as goal for the year. He said the November price survey should show double the price increase in October, indicating that inflation has bottomed out after hitting record lows of 0.4 percent in the previous couple of months. The other measures of inflation, however, continue to be at their lowest levels, which is a sign of a continuing rise in competitiveness of Philippine industries. The producer’s price index, or the average changes in prices received by domestic producers for their output, continues to be at a record low of negative 8 percent; while wholesale prices of commodities are at a negative 4.1 percent. The GDP deflator, or the measure of the level of prices of all new and domestically produced final goods and services in an economy, is also at a negative 0.01 percent.

See “ICT,” A2

n japan 0.3920 n UK 70.1783 n HK 6.0857 n CHINA 7.2697 n singapore 33.5176 n australia 34.2652 n EU 51.7411 n SAUDI arabia 12.5766

Source: BSP (29 December 2015)


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