BusinessMirror
three-time rotary club of manila journalism awardee 2006, 2010, 2012
U.N. Media Award 2008
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A broader look at today’s business
n Sunday, October 25, 2015 Vol. 11 No. 17
P25.00 nationwide | 3 sections 16 pages | 7 days a week
PHL will sustain growth–BSP
T
week ahead
ECONOMIC DATA PREVIEW
By Bianca Cuaresma
HE Bangko Sentral expressed optimism that the country will be able to sustain its above-the-longterm average growth in the third quarter of this year, as early indicators show robust economic activity in the months of July to September this year.
China move shows global reliance on low rates to lift economy
Local currency n Previous week: The local currency followed a depreciating trend during the week, starting trade at the base of the 46 territory in the previous week. In particular, the peso hit 46.07 to a dollar on Monday, and then slumped to 46.21 to a dollar on Tuesday. A similar decline in value was seen on Wednesday, when the peso declined further to 46.47 to a dollar; and on Thursday, when the peso fell at 46.64 to a dollar. The peso closed trading at 46.44 to a dollar on Friday. The average trade value for the week was at P46.366, while the total traded volume surged to $4.233 billion. n Week ahead: Markets are likely to take cue on the coming meeting of the United States Federal Open Market Committee toward the end of the week, and speculation surrounding what the Fed might do will likely prevail over the most of the market sentiment during the week.
Domestic liquidity (September) Friday, October 30 n August M3: Cash circulating in the local economy grew faster in August this year—but remained in the single-digit territory rate during the period. Data from the central bank showed that domestic liquidity—broadly measured as M3—grew by 9 percent in August. This is a slightly faster growth from the 8.4-percent growth seen in July 2015. In absolute terms, money supply in the country hit P7.8 trillion in August this year. n September M3: The September domestic liquidity is expected to be broadly in balance with the steady pace seen in the previous months. In its inflation report for the third quarter, which was recently published, the BSP said that its outlook on domestic liquidity “continues to keep pace with the overall requirements of the economy.” Bianca Cuaresma
BusinessMirror media partner
vehicle sales continued to be robust during the first two months of the third quarter. alysa salen
In its recently released quarterly inflation report, the central bank said that economic indicators, particularly on the demand side, reported “positive prints” in the third quarter of the year— pointing to the state of the country’s economic activity during the period. In particular, the BSP said that vehicle sales and energy sales continued to be robust during the first two months of the third quarter, as latest data showed. Sales of new vehicles grew
by 19.8 percent in the first two months of the third quarter of 2015, from the same quarter in the previous year. The BSP noted that the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) attributed the continued growth in car sales to the introduction of new car models, continuous marketing efforts and attractive financing programs of industry players. Meanwhile, Manila Electric Co. (Meralco) total energy sales for See “Growth,” A2
Bank-secrecy law not for criminal purpose
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DO Unibank Inc. said the bank-secrecy law remains relevant, as it encourages more deposits and ensures that legitimate money is kept. “The bank-secrecy law is not for criminal purpose. It [gives] freedom to keep funds the way people want these to be kept. I wish they [government regulators] can understand what [the banks’] clients need, and so it [law] [should be crafted so that it] will attract more deposits,” BDO Chairman Teresita Sy-Coson told the BusinessMirror. When sought for comment about the government’s move to eliminate bank secrecy for tax purpose, she said, “in the international area, that [bank secrecy] has
PESO exchange rates n US 46.5280
SY-COSON: “In the international area, that [bank secrecy] has been there. There’s bank secrecy everywhere.”
been there. There’s bank secrecy everywhere.” “There’s already a compliance structure in it—there’s also the antimoney-laundering [law], know your customer [KYC]; there’s a lot of documents required. I don’t know what’s the other purpose for this,” she said. See “Bank Secrecy,” A2
A high-speed train leaves the Beijing South Station for Shanghai during a test run on June 27, 2011. Beijing wants to move the country away from an overreliance on exports and often-wasteful investment in housing, factories and infrastructure projects, such as roads and high-speed trains. Instead, China is seeking slower but more sustainable growth driven by consumer spending. AP/Alexander F. Yuan
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EIJING—China’s sixth interest-rate cut in a year shows how hard it is to keep the world’s second-biggest economy growing vigorously while attempting one of history’s most audacious economic transformations. The country’s central bank on Friday announced cuts in benchmark interest rates on loans and deposits. The moves by the People’s Bank of China are the latest sign that the world’s major central banks remain committed to unusually low rates to try to spur economic growth. This week the head of the European Central Bank (ECB) made clear that the ECB is weighing further steps to ease borrowing rates. And next week the Federal Reserve is widely expected to hold its key rate near zero, where it has remained for seven years. China’s latest rate cut came four days after the government reported that growth had slowed to a six-year low of 6.9 percent from July through Sep-
tember. The Chinese economic slowdown has unnerved investors around the world, hurt countries that had prospered by supplying China with raw materials and weighed on global growth. China’s deceleration is partly deliberate. Beijing wants to move the country away from an overreliance on exports and often-wasteful investment in housing, factories and infrastructure projects, such as roads and high-speed trains. Instead, China is seeking slower but more sustainable growth driven by consumer spending. Recent economic figures reflect the transition. In September growth in factory output slowed to 5.7 percent, from August’s 6.1 percent. See “China,” A2
n japan 0.3855 n UK 71.6392 n HK 6.0036 n CHINA 7.3187 n singapore 33.3821 n australia 33.5555 n EU 51.7066 n SAUDI arabia 12.4111
Source: BSP (23 October 2015)