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A broader look at today’s business
n Sunday, February 7, 2016 Vol. 11 No. 122
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Sobrepeña tells Abaya: Face reality, address MRT 3 mess Earthquake jolts Taiwan; T 7 dead, hundreds injured By Lorenz S. Marasigan
RANSPORTATION Secretary Joseph Emilio A. Abaya should face the reality that the government really neglected the Metro Rail Transit (MRT) Line 3, and “should stop creating smokescreens and address the issue up-front.”
week ahead
ECONOMIC DATA PREVIEW Local currency
n Previous week: Bank of the Philippine Islands (BPI) research officer Nicholas Antonio Mapa said in the middle of the week that the peso continued to move higher as a “risk-off” sentiment dominates the market. The local currency ended the week at 47.66 to a dollar, with a total traded volume on Friday at $561.5 million. n Week ahead: Mapa said the peso will remain broadly within range, as it is to track Asian currency movements in the week ahead. “Peso should take its cue from regional developments, with the currency pair possibly pressured higher ahead of US data. Oil will also be a driver for regional currencies and the peso, as well,” Mapa said.
Monetary-policy meeting
February 11 n Previous meeting: As widely expected by local markets, the Bangko Sentral kept all its policy rates unchanged, despite the dawn of the normalization of interest rates in the United States—as the Monetary Board (MB) opts to adopt a wait-and-see stance on evolving matters on the global economy. In its meeting last December 17, the MB decided to keep the key policy rates at 4 percent for the overnight borrowing, or reverse repurchase facility (RRP), and 6 percent for the overnight lending, or repurchase facility (RP). The interest rates on
See “Outlook,” A2
Robert John L. Sobrepeña, who chairs MRT Holdings Inc., told Abaya to stop casting doubts on the Senate report on the state of the railway system that runs along Metro Manila’s main thoroughfare, Epifanio de los Santos Avenue. Instead, Abaya should address the issues raised by the report with utmost urgency and transparency, and stop wasting time on railroading the private owners and a presidential aspirant, Sobrepeña said. “I urge our dear secretary to address the issues raised by the Senate report and stop creating smokescreens. He is creating
Sobrepeña: “He is creating nonissues, and is just trying to do the usual deflectthe-issue-anddiffuse-the-issue method that he always does.”
nonissues, and is just trying to do the usual deflect-the-issueand-diffuse-the-issue method that he always does,” Sobrepeña told the BusinessMirror in a telephone interview. Continued on A2
DBS: Central bank to pull trigger in second half of ’16 By Bianca Cuaresma
D
ESPITE its cautious stance, the Bangko Sentral is still likely to fire one policy move for the year. Singapore-based bank DBS Bank economist Gundy Cahyadi said the central bank will likely tighten once this year only by about 25 basis points in the second half of the year. For now, however, the central bank will likely remain prudent and adopt a wait-and-see stance amid the volatile global economy. “Bangko Sentral maintains its cautious approach for now, amid concerns over the global economy. With domestic demand staying robust and continuing to support the overall GDP growth
PESO exchange rates n US 47.7530
CAHYADI: “With domestic demand staying robust and continuing to support the overall GDP growth outlook, there is no reason the BSP should turn dovish.”
outlook, there is no reason the BSP should turn dovish,” Cahyadi said. The central bank is set to hold its first policy meeting of the year on Thursday. Central bank Gov. Amando M. Tetangco Jr., in his statement following the announcement of the country’s January inflation, hinted at looking more into the state of the global economy in crafting the next policy move. See “DBS,” A2
Rescue workers search a collapsed building from an early-morning earthquake in Tainan, Taiwan, on Saturday. A powerful, shallow earthquake struck southern Taiwan before dawn on Saturday. AP/Wally Santana
T
AINAN, Taiwan—Rescuers raced to find survivors after a powerful, shallow earthquake struck southern Taiwan before dawn on Saturday, collapsing a high-rise residential complex and killing at least seven people, sending scores to hospital and leaving about a couple dozen missing. Rescuers pulled 247 survivors from the rubble in the
worst-hit Tainan city. More than 1,200 firefighters scrambled with ladders, cranes and other equipment to the ruins of a 17-floor residential building that folded like an accordion in a pile of rubble and twisted metal. The local media said the building included a care center for newborns and mothers, and a newborn was among the dead in the disaster, which came two
days ahead of the Lunar New Year celebrations that are the most important family holiday on the Chinese calendar. Most people were caught asleep when the 6.4-magnitude temblor struck at about 4 a.m. local time (2000 GMT, Friday). It hit some 35 kilometers southeast of Yujing, and struck about 10 km underground, according to the Continued on A2
Moody’s Analytics: PHL manufacturing down in December ‘15
T
HE country’s manufacturing sector likely slumped at the end of 2015, as the drag in the Philippines’s agricultural sector weighed in on the production of food items during the period. In its weekly assessment of economic indicators in the Asia-Pacific region, Moody’s Analytics—the research arm of Moody’s Inc.—said the country’s industrial production likely grew by 1.5 percent in December 2015. This is a decrease from the 7.5-percent growth of the sector in November last year. “Food manufacturing will continue to be a drag on output due to dry conditions affecting crop output,” Moody’s said. The slowing global economy—par-
ticularly in advanced economies—is also likely to pull the manufacturing sector’s growth downward during the period. “Export-oriented manufacturing is expected to be dented by the slowing Chinese economy. This will be offset somehow by a rise in demand from the US as its recovery continues,” Moody’s Analytics said. The Philippine Statistics Authority’s (PSA) monthly integrated survey of selected industries for November 2015 showed that the volume of production index grew by 7.5 percent in November 2015, due largely to the robust growth in the tobacco sector. In particular, seven of 11 major industries mainly drove volume of
production index growth. These were tobacco products, which grew by 52.7 percent; machinery except electrical, 29.6 percent; basic metals, 25.1 percent; leather products, 23.7 percent; electrical machinery, 20.1 percent; petroleum products, 12.5 percent; and footwear and wearing apparel, 12 percent. Food production, meanwhile, still registered a decrease in the month. The recovery of the manufacturing sector last November was lauded by economic managers, saying that it shows the resiliency of the domestic economy despite continued weak global demand. The manufacturing-sector growth at the end of the year will be released by the PSA on Tuesday. Bianca Cuaresma
n japan 0.4092 n UK 69.6716 n HK 6.1331 n CHINA 7.2743 n singapore 34.2119 n australia 34.4862 n EU 53.5359 n SAUDI arabia 12.7375
Source: BSP (5 February 2016 )