Businessmirror september 06, 2015

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three-time rotary club of manila journalism awardee 2006, 2010, 2012

U.N. Media Award 2008

BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business

n Sunday, September 6, 2015 Vol. 10 No. 332

P25.00 nationwide | 3 sections 16 pages | 7 days a week

IMF says economy still ‘favorable’

A

week ahead

ECONOMIC DATA PREVIEW Peso

n Previous week: The local currency traded lower during the shortened week. On Tuesday the peso hit 46.685 to a dollar followed by the 46.705-to-a-dollar value on Wednesday. The peso then depreciated slightly to 46.768 to a dollar on Thursday, and ended the week at 46.73 to a dollar. The total traded volume was at $1.97 billion, weaker compared to the $3.61 billion in the previous week. The average value of the peso is at 46.722 to a dollar during the week. n Week ahead: The Bank of the Philippine Islands (BPI) told its clients on Friday that the peso will likely trade with a downward bias, as investors continue to factor in the inflation print and as investors continue to react to data coming from the US economy. September 7, Monday

August GIR

n July GIR: The country’s gross domestic product was slightly chipped in July this year, as the gold holdings of the Bangko Sentral declined in value during the period. In particular, the gross internatinal reserves hit $80.43 billion during the month. At this level, it is enough to cover 10.6 months’ worth of imports of goods and payments of services, and equivalent to 6.3 times the Philippines’s short-term debt based on original maturity and 4.5 times based on residual maturity. n August GIR: In a recent interview, central bank Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo maintained that the GIR of the country would remain ample to

By Bianca Cuaresma

MID relatively weaker growth, falling inflation and global volatilities affecting the local financial market, the Philippine economy is still deemed by the International Monetary Fund (IMF) as “favorable” at the time being—consequently lauding economic managers on their successful handling of the economy. In a recent statement from the IMF at the conclusion of the 2015 Article IV Consultation with the Philippines, the multinational monetary authority said that the country is still growing “broadly at potential,” despite the growth falling in the 5-percent territory in the first months of the year.

“The outlook for the Philippine economy remains favorable, despite uneven and generally weaker global growth prospects,” the IMF said. “As the economy is growing broadly at potential, there is no evidence of price or wage pressures See “IMF,” A6

CHEF CURRY IN TOWN Wearing a “Thrilla in Manila” T-shirt, Stephen Curry gestures, as he fields questions from reporters at the Mall of Asia

Arena in Pasay City. The Most Valuable Player guard from last season’s National Basketball Association champion Golden State Warriors is in the Philippines to take part in the Asian tour “The UA Roadshow Featuring Steph Curry.” Curry will also visit Tokyo, Beijing, Chongqing and Shanghai in China. nonie reyes

Mixed signals in U.S. Traffic situation in key PHL employment report cities, provinces worries MAP W T ASHINGTON—Employers added a disappointing 173,000 jobs in August but the blow was softened by the equally unexpected drop of the unemployment rate to 5.1 percent. That is the best reading on unemployment since March 2008, but there were plenty of mixed signals in the report released on Friday by the Bureau of Labor Statistics. Employment numbers for June and July were revised up by a combined 44,000, after additional data came in. Those were already strong months, so it raises the likelihood that August’s first take might not stand. “The job market is rocking and rolling,” said Mark Zandi, chief economist for forecaster Moody’s Analytics. “Ignore the weak job gain in August; it will be revised substantially higher in coming months. The economy is generating over 200,000 jobs per month.” Full-time employment, as measured in the survey of households, was 122 million in August. That is a record, above the previous peak in November 2007 of 121.9 million. The two-tenths of a percentagepoint drop in the unemployment rate is also a good sign. Continued on A6

By Lorenz S. Marasigan

HE government must start solving the traffic situation in key cities and provinces outside Metro Manila before it gets worse. Eduardo H. Yap, chairman of the Management Association of the Philippines’s (MAP) Traffic, Transportation and Infrastructure Committee, urged President Aquino to nip in the bud the relatively lighter congestion on roads outside the capital.

This, Yap said, will cause the government less headaches and fewer problems to manage. Yap said Mr. Aquino should appoint a traffic czar to solve the traffic congestion not just in Metro Manila, but all over the country. To do this, he said, the President must issue an executive order creating a traffic manager, whose office will serve as the “nerve center” of all public and private efforts in managing and solving the traffic-management problems throughout the archipelago, where signs of traffic congestion are also beginning to appear and begging for solutions.

“We are seeing traffic congestion in just about everywhere— even in Cebu, Tarlac, Pangasinan, Baguio, Davao and Zamboanga. Traffic is not just a problem of residents in Metro Manila, but is beginning to affect even those cities in the provinces. Let’s nip this in the bud as early as now,” Yap said. Metro Manila’s neighboring provinces and cities are said to be losing P1 billion per day in productivity costs due to the congestion. The metropolis alone loses P2.4 billion daily due to the same problem. Yap said the government must have a clear road map in Continued on A6

Market continues to be cautious, PSEi seen to trade between 6,850 and 7,150

See “Outlook,” A6

PESO exchange rates n US 46.7660

T

By Genivi Factao

HE Philippine Stock Exchange index (PSEi) is expected to trade between 6,850 and 7,150, with local export figures and further developments in the US being the main catalysts. Bank of the Philippine Islands (BPI) Asset Management analysts said they expect the market to continue to be cautious and the sentiment-driven trading ahead of

the US labor-data releases and the September Federal Open Market Committee meeting. Week-on-week, the PSEi lost 47.03 points, or -0.66 percent, ending the week at 7,051.78. Foreigners were net sellers at P 2.23 billion or $104.15 million. Year-to-date, the net foreign funds are now at -$215 million. Last week the index generally traded within a tight range, as investors positioned ahead of the inflation print and ahead of market-moving

economic-data releases globally. In August the consumer price index stood at 0.6 percent, which is the lowest level in two decades. Market reaction to the inflation figure was subdued, as investors were mostly on the sidelines ahead of the US nonfarm-payrolls report. Regina Capital Development Corp. said the index needs to stay above 6,950, in order to establish a bullish higher low base and have a better chance of breaking 7,110.

Doing so will put prices in a shortterm upswing and, ultimately, retest its breakdown point at 7,272—but meeting these conditions will not reverse the index’s primary trend, as hitting 7,272 will still be a lower high compared to July highs. “We expect a lot of selling pressure near this resistance. On the other hand, failure to hold 6,950 will trigger corrections back to 61.8 percent Fibonacci [6,636] and put signals back in the bearish territory.

A cautious position is still raised on issues trading above long-term averages and ‘sell on rallies’ on below these averages,” Regina Capital Head of Business Development Stock analyst Luis Limlingan said. Meanwhile, BPI analysts expect the peso to trade range-bound with a downward bias, as investors continue to factor in the inflation print and as investors react to US nonfarm-payroll print to be released over the weekend.

n japan 0.3901 n UK 71.3509 n HK 6.0342 n CHINA 7.3480 n singapore 33.0105 n australia 32.8344 n EU 52.0739 n SAUDI arabia 12.4702 Source: BSP (4 September 2015)


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