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A broader look at today’s business n
Sunday, October 16, 2016 Vol. 12 No. 4
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‘Govt should be more enabler than regulator in telco industry’ By Lorenz S. Marasigan @lorenzmarasigan
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ECAUSE the development of the information and communications technology sector in the countryside will result in higher employment rates and increased economic activities, the government must put primary focus on investing in the sector.
CU: “There is no substitute for government support if we are to achieve social inclusion of all communities as we aspire for further economic growth.”
Dollar advances even as retail sales strengthen case for rate hike
Globe Telecom Inc. President Ernest L. Cu said the government and the private sector must collaborate to develop key telecommunications infrastructure to hasten See “Telco,” A2
Federal Reserve Chairman Janet L. Yellen smiles, as she is introduced at an address at the Federal Reserve Bank of Boston on October 14 in Boston. “Increased business sales would almost certainly raise the productive capacity of the economy by encouraging additional capital spending,” Yellen said in her speech. AP/Charles Krupa
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HE dollar advanced to near a seven-month high, after a report showing retail sales rose by the most in three months bolstered the Federal Reserve’s (the Fed) case to raise interest rates by year-end. The greenback gained against most Group-of-10 peers, even after Fed Chairman Janet L. Yellen said there are “plausible ways” running the economy hot for a while could fix some of the damage caused to growth trends by the Great Recession. Boston Fed Bank President Eric Rosengren said earlier the cen-
tral bank might have to raise rates faster than the market forecasts. Futures show the likelihood of a hike by year-end climbed to 69 percent, from 60 percent a month ago. “It’s a gentle dollar-bull trend here,” said Chris Turner, London-based head of currency strategy at ING Groep NV. There may be “another 1 percent or 2 percent of dollar strength if the Fed does deliver a hike.” The US currency has rallied for three straight weeks versus the yen in the longest stretch of gains since May. The See “Dollar,” A2
Peso will not hit 50:$1 this year By Bianca Cuaresma
FLOWER POWER An enterprising flower vendor in Baguio City sells bouquets of colorful natural and dyed roses in her stall at the city public market. Prices remain at P150 a dozen per bouquet, but
are expected to jack up next week in anticipation of All Saints’ Day.
MAU VICTA
Legazpi, 2 Albay towns get ₧915-M calamity funds By Manly M. Ugalde Correspondent
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EGAZPI CITY—At least two towns in Albay and this city received almost a billion pesos in calamity funds, as a result of a typhoon last year that was barely felt in the region. In a letter dated August 15 to Defense Secretary Delfin N. Lorenzana, chairman of the National Disaster Risk Reduction and Management Council (NDRRMC), Executive Secretary Salvador C. Medialdea informed the provincial government of Albay that its request for calamity funds, totaling P915.11 million, for the province of Albay, had been approved and released to the Department of Public Works and Highways (DPWH) Region 5 Office in Legazpi for the implementation of 10 flood-control projects in Legazpi City and neighboring towns of Camalig and Da-
raga as a result of Typhoon Nona (international code name Melor) in December 2015. The release of the P915 million for Albay was reportedly worked out before the election ban for the May 2016 election, a knowledgeable source told the BusinessMirror. The calamity-fund release came after Nona, packing center winds of 150 kph, was supposed to hit Legazpi on December 13, 2015. The typhoon, however, broke before its landfall in Beri, Northern Samar, and hit Legazpi, with sustained winds of only 56 kph under Signal Nos. 2 and 3. Sorsogon, Camarines Sur and Camarines Norte also were placed under Signal Nos. 2 and 3. Minimal damage was incurred in the area. DPWH officials, however, were mum as to who was behind the release of the whopping P915-million calamity funds. DPWH 5 Regional Director Reynaldo G. Tagudando could not
PESO exchange rates n US 48.4730
be reached for comment, but his legal officer Oliver Rodulfo confirmed the P915-million release for Albay, saying the funds could be from the efforts of former Albay Gov. and now Rep. Joey S. Salceda of the Second District. Texted for comment, Salceda’s chief of staff Carolina Sabio denied the P915-million calamity funds for Albay resulted from the efforts of Salceda. She said the request merely passed the Regional Development Council (RDC) early in January, when Salceda was still the RDC chairman. It was learned later the P915million calamity funds were worked out by then-Second District representative and now Gov. Al Francis Bichara and the city of Legazpi. In his letter follow-up in April to then-Defense Secretary and NDRRMC Chairman Voltaire T. Gazmin, Bichara sought to facilitate the approval of his calamity-
fund request for P432 million for the towns of Camalig and Daraga for five flood-control projects as a result of the damage rendered by Nona. The Legazpi City government, under Mayor Noel Rosal, also sought for a fund release of P438 million for five damaged flood-control projects in the city. Bichara and Rosal could not be reached for comment. Documents showed the five Legazpi flood-control projects included the construction, rehabilitation of Arimbay River flood control, Legazpi, P96.37 million; construction, rehabilitation of Yawa reverse flood-control system, Barangay Mabinit Legazpi, P96,.4 million; construction, rehabilitation of Padang River flood control, Legazpi, P97.356 million; construction, rehabilitation of Pawa Burabod flood control, Legazpi, P94.91 million; and construction, rehabilitation of Yawa River flood control, Legazpi section, P93.93 million.
@BcuaresmaBM
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ESPITE several bouts of weaknesses affecting the local currency, the peso is not seen to drop to the 50:$1 territory this year, a local economist said. Bank of the Philippine Islands associate economist Nicholas Antonio T. Mapa forecasts the peso to hit his year-end projection of 49.02 to a dollar. “There are several factors behind the peso’s recent performance, both local and global. Global developments center around major central-bank meetings mostly and US data reports. The Bank of England, the European Central Bank and the Bank of Japan are all still mired in their fight against deflation and, thus, most seen to be in easing mode,” Mapa told the BusinessMirror. “The US is in the nascent stages of its rate-hike cycle and, thus, any comments or data that could point to an improving economy, would increase the chances for a rate hike, which, in turn, causes the dollar to strengthen,” he said. The economist said, domestically, our local unit is affected by any shifts in foreign sentiment in the local stock-exchange, as a weakening of the stock exchange
index due to foreign selling drags on the peso. “Last, it’s still difficult to say whether controversial remarks do affect the exchange rate, but I guess such remarks can still affect sentiment and psyche of some individuals, which can reflect in the foreign-exchange rate,” he added. In recent weeks, the local currency has been seen to trade to fresh seven-year lows, as the local currency continues to lose value over the US dollar. On Friday the peso ended the trading week at 48.44 to a dollar, slumping from the previous day’s 48.34 to a dollar. The total traded volume is at $573.1 million. In terms of its effect on the real economy, Mapa said that, while remittances in dollar terms are expected to slow further this year, its purchasing will still not be affected due to the cushion a weaker currency provides. “This may not be as much of a problem for as long as the growth of remittances in peso terms [which is Filipinos purchasing power] remains solid enough to drive our consumption economy,” Mapa said. “The weaker currency will feed into inflationary pressure and help elevate the path back into target.” In a recent commentary on the movement of the local currency, Bangko Sentral ng Pilipinas Gov. See “Peso,” A2
n japan 0.4675 n UK 59.4231 n HK 6.2496 n CHINA 7.2073 n singapore 35.0999 n australia 36.6844 n EU 53.5966 n SAUDI arabia 12.9237
Source: BSP (14 October 2016 )