BusinessMirror September 27, 2018

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Thursday, September 27, 2018 Vol. 13 No. 348

ADB cuts PHL growth forecast, cites agri woes

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By Cai U. Ordinario & Bernadette D. Nicolas

@cuo_bm @BNicolasBM

HE government must now review its agriculture policy as the lackluster performance of the farm sector is hurting the country’s growth prospects, the Asian Development Bank (ADB) said on Wednesday, as it cut its GDP growth forecast for the Philippines in 2018 and 2019.

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@ReaCuBM

HILIPPINE gover nment officials are upbeat about fresh investments coming from the United Kingdom (UK), to support the country’s infrastructure buildup program or the “Build, Build, Build” (BBB), according to the Department of Finance (DOF). During the Philippine Economic Briefing (PEB) in London, Finance Secretary Carlos G. Dominguez III expressed confidence that the economic partnership with the UK—among the Philippines’s 10 leading sources of foreign direct investments (FDI)—would grow in the years ahead, given that the British economy has been a reliable partner even when the Philippines was going through difficult challenges in the past. “We are confident this partnership will grow even more as our economy emerges to take its place among the dynamic economies in a dynamic region,” Dominguez said in his keynote speech on Tuesday at the PEB held at the Four Seasons Hotel. Dominguez expressed optimism that more investments from the UK would enter the Philippines in the coming years, “especially in the sunrise sectors of our economy.” “ T hese a re e xc it i ng t i mes for our economic development. We invite you to participate in building a strong and resilient

With rice tariffication, what happens to food security?

6.4%, 6.7% The revised GDP growth forecast of the ADB for the Philippine economy in 2018 and 2019

Rene E. Ofreneo

LABOREM EXERCENS

In a news briefing, ADB Philippine Country Director Kelly Bird said the sluggish performance of the country’s agriculture sector was a major factor behind the regional lender’s decision to revise downward its growth forecast for the Philippines this year and for 2019.

E’RE a blessed nation because we can grow our own food and, therefore, we’re secure. A nation that can feed its people is a nation more secure.”— Pre-sident George W. Bush, on the occasion of the signing of the US Farms Bill (2002), which is renewed every five years and which allocates massive subsidy to American agriculture.

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Auto sector Aug sales dip 14.1%

$5.8B

By Elijah Felice E. Rosales

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The net foreign direct investments in the first half of 2018, or a 42.4-percent increase, as noted by DOF chief Dominguez at the PEB in London

economy,” he added. Among those present at the event were British Ambassador to the Philippines Daniel Pruce, Philippine Ambassador to the UK Antonio Lagdameo, and top executives of Standard Chartered, UBS, Bank of China, J.P. Morgan, Citibank, Credit Suisse and Goldman Sachs. Members of the UKAsean Business Council and of the Philippine business sector were also in attendance. The PEB aims to brief British investors on the vast business opportunities in the Philippines’s infrastructure, energy and tourism sectors, and to explore ways to expand economic cooperation between Manila and London. The finance chief explained that improvements in the ease of doing business (EODB), along with other initiatives like the Comprehensive Tax Reform Program (CTRP) and the BBB, have deepened investor confidence in the Philippines under the watch of President

PESO EXCHANGE RATES n US 54.3220

See “DOF,” A2

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DOF upbeat on new infra-tied investments flowing in from UK By Rea Cu

2016 EJAP JOURNALISM AWARDS

BUSINESS OF WAR A Gripen Saab fighter plane is on display at the 2018 3rd Asian Defense, Security and Crisis Management Exhibition and Conference at the World Trade Center. ADAS 2018 is expected to attract over 200 leading domestic and international exhibitors representing the full spectrum of defense, homeland security and disaster relief industries. See story on A8, “Lockheed Martin’s PHL pitch: 4th-generation F-16, Black Hawks.” NONIE REYES

PHL banks to keep steady credit profile–Fitch By Bianca Cuaresma @BcuaresmaBM

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HE Philippine banking system is expected to maintain a steady credit profile, despite the rapidly rising interest rates in the country, as the Bangko Sentral ng Pilipinas (BSP) tries to bring down inflation rates, an international credit watcher said. In its assessment made public on Wednesday afternoon, Fitch Ratings said Philippine banks will likely keep their generally stable credit fundamentals, amid rising domestic interest rates and choppier market conditions. “Higher lending yields should bode well for interest incomes, and we

Higher debt repayments may hurt asset quality, especially for borrowers on adjustable rate loans. However, we expect such effects to be limited in the near term. Higher rates are still manageable on the whole, and economic growth drivers remain broadly sound.”—Fitch

expect any softening in loan growth and credit quality to be modest as economic fundamentals remain supportive,” Fitch Ratings said. The credit watcher—which rates the Philippines at “BBB”with a stable outlook—said the major local banks’ net interest margins (NIM) mostly improved in the first half of 2018 as market interest rates rose. “...We expect this trend to continue. The Central Bank has raised its key policy rate by 100 basis points since May 2018 in response to above-trend inflation, and further hikes are possible. This should continue to drive asset yields and NIM expansion for the rest of the year,” Fitch Ratings said. Continued on A2

@alyasjah

HE automotive industry has posted a 14.1-percent sales decline in August—another setback for a sector that was directly hit by the first tax-reform package—but managed to show little signs of recovery, as its monthon-month performance improved. In a joint report by the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and the Truck Manufacturers Association (TMA), August car sales fell 14.1 percent to 30,313 units, from 35,309 units during the same month last year. However, this was an 8.1-percent improvement from the industry’s total sales in July at 28,038 units. Passenger car sales slowed 22.9 percent to 8,678 units, from 11,258 units last year. On the other hand, sales of commercial vehicles contracted 10 percent to 21,635 units, from 24,051 units last year. Campi and TMA also sold 2,981 Asian utility vehicles (AUVs), down 56.6 percent from 6,864 units. Positive strides were made in the light commercial vehicle and trucks and buses category 4 segments, as the two registered 12 percent and 12.9 percent sales growth, respectively. However, sales of light trucks nosedived 34.2 percent to 685 units, from 1,041 units last year. Campi and TMA also sold 159

n JAPAN 0.4809 n UK 71.6236 n HK 6.9552 n CHINA 7.9175 n SINGAPORE 39.7730 n AUSTRALIA 39.3835 n EU 63.9533 n SAUDI ARABIA 14.4855

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Source: BSP (26 September 2018 )


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