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 27, 2015 Vol. 10 No. 353
P25.00 nationwide | 3 sections 16 pages | 7 days a week
Lawmaker favors court settlement of San Miguel-PSALM dispute
week ahead
ECONOMIC DATA PREVIEW Foreign exchange
n Previous week: The peso has been moving steadily across the 46 territory in the previous week amid a depreciation trend. The peso traded at 46.47 to a dollar at the start of the week, then depreciated to 46.59 to a dollar on Thursday. The peso suffered its biggest decline for the week on Wednesday, when it hit 46.83 to a dollar. The peso ended the trading week at 46.86 to a dollar. Total trading volume reached $2.58 billiion. n Week ahead: The Bank of the Philippine Islands (BPI) told its clients that the peso would likely continue to depreciate in the week ahead due largely to the expected strength of the dollar. “In light of the expected US-dollar rally, we expect the Philippine peso to trade downward, barring any strong positive local mover that would cap the continuing dollar outflow from foreign selling,” BPI said. It remains to be seen whether Fitch Ratings’s “positive” outlook for the Philippines would have an impact on peso-dollar trading.
August money supply
September 30, Wednesday n July money supply: The Bangko Sentral ng Pilipinas (BSP) reported that the July domestic liquidity—broadly measured as M3 by the central bank—grew at 8.5 percent in July this year relative to the level seen in the same period last year. The total absolute value of cash in the economy is at P7.7 trillion as of July. M3 growth in July was slightly lower than the revised 9.3-percent expansion recorded in June. n August money supply: Economists expect no surprises in M3 growth in August. First Metro Investment Corp. and University of Asia and the Pacific Capital Markets Research said domestic liquidity growth will likely be at single digit. The BSP has also said earlier that domestic liquidity conditions continue to be supportive of growth and that they will monitor any developments that may arise from this. See related story. Bianca Cuaresma
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By Lenie Lectura
he chairman of the Senate Committee on Energy is confident that the ongoing dispute between the Power Sector Assets and Liabilities Management Corp. (PSALM) and San Miguel Corp.’s (SMC) power arm would soon be resolved, and that the disagreement over an interpretation of power contracts would be best addressed by the court. “It’s a valid dispute. It has got to do with the way the contract was drawn up. This is just a contractual dispute. It’s not a violation of a contract. Pagkakaintindi ko ay ganito, while ikaw naman ganito ang pagkakaintindi mo. So, let the courts decide,” said Sergio R. Osmeña III in an interview after he presided a Senate budget hearing. In all kinds of businesses,
Osmeña said, it is normal for business partners to have disagreements over a contract. “You know, we can never cover everything in a contract, even in a law,” he said, adding that even laws and policies are amended, repealed and improved through issuance of implementing guidelines. During last Thursday’s Senate Continued on A6
M3 growth to remain tame in the near term By Bianca Cuaresma
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he pace of the country’s money-supply growth will likely remain tame in the near term, despite expectations that consumer demand will pick up toward the latter part of the year. In a research note in The Market Call, First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) Capital Markets Research said the country’s domestic liquidity— broadly measured as M3—will
likely expand by single digit. “Money growth will remain single digit, as the Bangko Sentral ng Pilipinas [BSP] continues to sell excess dollars as they come in, as part of its effort to stem further large depreciations of the peso,” FMIC and UA&P said. A growing cash supply is beneficial for an expanding economy, as it gives fuel to productive economic sectors to boost growth. However, an excessively slow cash-supply growth in the economy may be bad for a nation, especially if it does not provide enough financing to keep productive activities going. The peso, meanwhile, has See “M3,” A6
VW Scandal Spreads Trouble From IPOs to Credit Markets A Greenpeace activist holds a protest poster in front of a Volkswagen factory in Wolfsburg, Germany, on Friday. AP/Michael Sohn
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week after it admitted to cheating on US emissions tests for years, Volkswagen AG’s pain is beginning to spread throughout Europe’s credit markets. The Bank of France stopped trading two securities backed by Volkswagen auto loans on Friday, while executives of parts supplier Schaeffler AG find themselves fielding questions about their biggest customer as they drum up support for an initial public offering (IPO), according to people familiar with the matters. Since Volkswagen admitted on September 18 that it had cheated on US air pollution tests since 2009, the CEO resigned, the company became the target of a joint investigation by 27 US states and the stock price tumbled 28 percent. Matthias Mueller, the former Porsche chief who was ap-
pointed Volkswagen’s CEO on Friday, said his most urgent task is to win back trust for the company. “Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry,” he said in a statement. The two Volkswagen-related securities weren’t on an updated list the Bank of France distributed on Friday after being included in the original version sent to investors earlier this week, said the people, who asked not to be identified because they aren’t authorized to discuss the matter publicly. The Paris-based bank is buying asset-backed securities under a European Central Bank purchase program designed to help boost lending in the euro area. A Bank of France official declined to comment on the purchase-offer list.
Volkswagen Financial Services has €22.8 billion ($25 billion) of outstanding asset-backed debt, according to a September presentation on its web site. Marc Siedler, a spokesman for the finance unit, declined to comment in an e-mailed statement. Herzogenaurach, Germany-based Schaeffler announced IPO plans on Monday, three days after the scandal broke. Concerns about the impact of the scandal, as well as Chinese and global market volatility, could affect investor views on the IPO valuation, according to the two people. A representative for Schaeffler declined to comment. The company is planning to set a price range for the offering as soon as Monday as it crisscrosses Europe to market the shares to investors from London to Zurich, the people said. Bloomberg News
Nick Joaquin Literary Awards: Matter of the soul By Joel Pablo Salud Special to the BusinessMirror
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CIRCA 1990: National Artist for Literature Nick Joaquin (left) spends a light moment with Ambassador Antonio L. Cabangon Chua during the early years of the Philippines Graphic. Joaquin was the magazine’s first editor in chief.
PESO exchange rates n US 46.7380
t all began during the heyday of the printed word. The turn of the 20th century saw American Thomasites coming in droves to Philippine shores to build a system of education largely founded on the English language. The effort blossomed in less than two decades, creating a gen-
eration of readers which was by and large at home with English. The Roces Group of Publications, which founded in 1923 the Tagalog magazine Liwayway (around the same year Time magazine was first published), took steps to cater to this burgeoning readership base by giving birth to a one-of-a-kind English magazine, The Graphic, in 1927. Small as its readership was at the beginning, it boldly introduced a
format that was popular at the time with many foreign publications: half dedicated to news analysis for the week, the rest for literature.
First editors
In order to accomplish the goal of featuring pieces penned with extraordinary flair, the owners chose its first editors from a young and impassioned group of Filipino literary authors who were by this time
making a name for themselves. Novelist Agustin C. Fabian, best known for his novel Timawa, took the helm and kick-started what was to be a tradition in local weekly magazines: the publication of literature. With the help of short-story writer Rosario Ladia Jose, the editors picked from weekly manuscripts mailed to their newsroom. Continued on A6
n japan 0.3887 n UK 71.2568 n HK 6.0310 n CHINA 7.3212 n singapore 32.7802 n australia 32.7871 n EU 52.2624 n SAUDI arabia 12.4628 Source: BSP (24 September 2015)