Ray S. Eñano, Editor business@thestandard.com.ph extrastory2000@gmail.com
B4
MONDAY, MARCH 20, 2017
Business
Balance of payments may top $1b this year By Julito G. Rada
B
ANGKO Sentral ng Pilipinas will review the target of a $1-billion surplus in the balance of payments this year to see if an upward revision is necessary due to the better outlook for global economic growth.
“We will recast that forecast, [taking into account] the world economic outlook showing that the world economy will grow by 3.4 percent from the earlier projection of 3.1 percent in 2017,” Guinigundo said in a quarterly briefing for the balance of payments over the weekend. Bankgo Sentral drew up the $1-billion surplus target for the balance of payments this year after the second review of economic data conducted in November last year. Guinigundo said the country’s BoP position was facing a better outlook in 2017 despite the expected three interest rate hikes by
the US Federal Reserve, an indication that the world’s largest economy was on its way to firm recovery. “... People will always expect that interest rates in the US will generate some outflows of capitals across borders but that did not happen. In fact, the peso appreciated Thursday [after the Fed hike],” Guinigundo said. “The uncertainty has been reduced by those pronouncements by the US Fed led by chair Janet Yellen. Anyway, we will continue to monitor and see what else in store in the US,” Guinigundo. Guinigundo said the Fed’s move cleared the air of any uncertainty in the world’s largest economy. He said in deciding to increase interest rates—the third time since the global financial crisis in 2008—the direction had been established in the normalization of monetary policy in the US. “... There will be interest rates hikes but the question of course is when and two, how many more. That decision of the Fed also reflected bullish outlook. The economy I think is strong enough to accommodate interest rates adjustments,” Guinigundo said. The balance of payments summarizes the
country’s economic transactions with the rest of the world, with a deficit indicating foreign exchange payments outstripping receipts and a surplus the reverse. Persistent surpluses help build up the country’s gross international reserves, an ample supply of which helps prop up the peso vis-à-vis the US dollar and keep domestic inflation at bay. Th balance of payments in 2016 incurred a deficit of $420 million, a sharp reversal from the $2.616-billion surplus in 2015. The end-December figure also missed the $500-million BoP surplus target for the year set by Bangko Sentral. Bangko Sentral in December revised downward the balance of payments surplus target in 2016 to $500 million from the previous assumption of $2 billion due primarily to lower global growth outlook and uncertainty in the US Federal Reserve policy tightening. Other factors considered by Bangko Sentral for the lower BoP projection were the possible impact of US President Donald Trump’s policies on the global trade, reduced concerns on China’s near-term prospects, gradual recovery in oil prices and favorable domestic growth prospects.
IN BRIEF PH foreign debt declines to $74.8b THE country’s external debt as of end-December 2016 declined $2.7 billion to $74.8 billion from $77.5 billion a year ago due mainly to the net principal repayments by both the public and private sectors, Bangko Sentral ng Pilipinas said over the weekend. Data showed net principal repayments of public and private sectors stood at $3.4 billion. Other factors that caused the decline in debt stock were audit adjustments due to late reporting (negative $168 million), and downward foreign exchange revaluation adjustments ($36 million). Bangko Sentral Governor Amando Tetangco Jr. said in a statement the external debt ratios “remain at comfortable levels in 2016.” External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics. Julito G. Rada
PNOC eyes national oil reserve program STATE-owned Philippine National Oil Co. is mulling over a national oil reserve program involving all oil companies to secure the country’s requirements during disasters, atrocities or fuel shortages. PNOC president Ruben Lista told reporters the company was looking at the issuance of a law that would require oil companies to allocate a certain percentage of their oil stocks as “national reserves.” Lista said PNOC was proposing a similar set-up implemented by the Dutch government. “We are studying the model of Rotterdam... In their model, the government is not involved in stockpiling but they require all of their oil players... If this is their depot, there is a percentage in the depot reserved for national emergency,” Lista said. Alena
Mae S. Flores
PEPSI-7-ELEVEN PARTNERSHIP. Pepsi-Cola Products Philippines Inc. president Furqan Ahmed Syed
(center) shakes hands with Philippine Seven Corp. president and chief executive officer Jose Victor Paterno after a signing partnership agreement on the production and sale of Pepsi-flavored Slurpee. Joining them are (from left) Cary Crook, vice president and general manager of 7-Eleven international customer management team, PepsiCo; Maricelle Narciso, country manager, PepsiCo Philippines; and Richard Lee, vice president for supply chain and operations, Philippine Seven.
Del Monte issuing $250-m shares By Jenniffer B. Austria FRUIT grower and canner Del Monte Pacific Ltd. is pushing through with its plan to raise $250 million from the issuance of dollar-denominated preferred shares. Del Monte said in a filing with the Philippine Stock Exchange it would issue 15 million preferred shares with an oversubscription of up to 10 million common shares at an offering price of $10 apiece. The company set the offering period from March 22 to March 28 and the listing date on April 7. Del Monte plans to use the proceeds from the offering to primarily pay the outstanding bridge loan facility extended by BDO Unibank Inc.
The shares will come from the 36 million dollar-denominated preferred shares earlier approved for sale by the Securities and Exchange Commission and the Philippine Stock Exchange. The balance of 11 million shares will be placed under shelf registration to be issued within the next three years. The issuance of dollar-denominated preferred shares is in line with the company’s thrust to convert a substantial amount of short- to medium-term loan into longer maturities to significantly improve Del Monte’s current liquidity ratio. The dollar-denominated preferred shares set to be listed with the PSE will be the first to be listed with the local bourse. BDO Capital & Investments
Corp is the sole issue manager. Joint underwriters include ChinaBank Capital Corp., PNB Capital and RCBC Capital Corp. The PSE last year issued the rules on the issuance of dollardenominated securities as part of a plan to expand its product offerings. Del Monte booked a net profit of $8.5 million in the quarter ending January 2017, a turnaround from a net loss of $4.8 million year-on-year, as higher sales out of Asia offset lower revenue from the US business. Del Monte booked a net income of $19.9 million in the nine-month period ending January, lower than $32.3 million on year due to nonrecurring items.
With President Rodrigo Roa Duterte (8th from left), Exec. Sec. Salvador “Bing Bong” Medialdea (7th from left), Cordova Mayor Mary Therese Sitoy-Cho (3rd from left), Cebu City Mayor Thomas Osmeña (3rd from right), CCLEC legal consultant Atty. Aris Batuhan (4th from left),Presidential adviser on Legislative Affairs Sec. Adelino Sitoy (5th from left),Sec. Michael Dino (6th from left) Gov. Hilario Davide III (2nd from right), MVP (9th from left), MPIC President and CEO Joey Lim (10th from left) MPTC President Rod Franco (behind Mayor Maty Sitoy-Cho),and other MVP Group Officers
A BRIDGE FOR TOMORROW MENTION bridges and the Flora Purim hit song from the 70s comes to mind. Or the actors Lloyd, Jeff, and Beau. Or the Oscar-winning “Bridge on the River Kwai” from 1957 and “A Bridge Too Far” from 1977. But this bridge I am talking about has nothing to do with stars, though it will bring its host metropolis and province into greater heights, and nothing to do with the past, because it was started in the here-and-now. For many years, the rapid growth and development of Cebu City as a metropolis also ushered in another impact of high urbanization: traffic congestion. This is true most especially when we speak of the roadways between the Cebu mainland and Mactan island where the international airport is located. I remember in my frequent visits to Cebu and Bohol then that the first big bridge across the Mactan Channel was the Mactan-Mandaue Bridge, or what we locals often called the Osmeña Bridge, a truss bridge constructed and opened back in 1972. It connected both islands through Mandaue and Lapu-lapu City, and it was properly adequate for the vehicular density of the time. Then as commerce and development expanded in the province, so too did the need for a new big bridge, to decongest traffic on the Mactan-Mandaue Bridge. Thus, the Marcelo Fernan Bridge was opened in 1999, a magnificently beautiful cable-stayed bridge inaugurated by no less than my former boss, then President Joseph Ejercito Estrada. I was there when that bridge was opened to the public, and I recall waxing nostalgia about it as I remembered the days when we would cross the Mactan Channel by ferry. The Fernan Bridge was one of the longest and widest bridges in the country and, to this day, I still marvel at its architectural beauty. Of course, Cebu and the region still grew by leaps and bounds, so much so that the two big bridges across the channel were never enough. A new and bigger bridge was needed. Recently, President Rodrigo Roa Duterte led groundbreaking rites for the 8.25-kilometer Cebu-Cordova Link Expressway (“CCLEx”), the third bridge that would connect the Cebu mainland from the Cebu South Coastal Road to Cordova town on the southernmost tip of Mactan Island. More than just a bridge, the project is said to be the largest single investment by a private company in the country today. The CCLEx is a project of the Metro Pacific Tollways Development Corporation (MPTDC), a unit under Metro Pacific Investments Corporation (MPIC). The
bridge and its connecting roadways and ramps are expected to be completed by 2020 by MPTDC subsidiary, the Cebu-Cordova Link Expressway Corporation (CCLEC), which will likewise operate it. The fast-tracking of the bridge project is in line with President Duterte’s directive to speed up implementation of high-impact infrastructure projects. The President likewise mentioned of a plan to create a network of bridges inter-connecting islands of the Visayas and Mindanao. In his remarks made during the groundbreaking rites, Metro Pacific Chair Manuel V. Pangilinan expressed interest in undertaking other bridge projects in line with the President’s plan, like a bridge to connect Cebu mainland to the Bohol island province. That brought a smile to the faces of Cebu Governor Jun Davide and Bohol Governor Edgar Chatto. MPTDC President Rodrigo Franco likewise intimated that they were seriously considering a Light Rail Transit (LRT) project for Cebu. The CCLEx is another sterling example of how the local government and the private sector act expeditiously to meet an urgent need. Credit for this project should also go to the mayors and sanggunian members of both Cebu City and Cordova town: the current administration led by Cebu City Mayor Tommy Osmeña and Cordova Mayor Techie Sitoy Cho; and the previous administration led by then-Cebu City Mayor Michael Rama and then-Cordova Mayor Adelino “Adi” Sitoy (now Presidential Adviser on Legislative Affairs and Head of Presidential Legislative Liaison Office or PLLO). All these infrastructure projects under the Private-Public Partnership (PPP) framework could only augur good tidings for the people of Cebu and its neighboring provinces. With the combined strength of the DPWH and DOTr under the able leadership of Secretaries Mark Villar and Art Tugade, respectively, one could only foresee positive results happening in this regard. To quote the immortal hope in Flora Purim’s song: “There’s a bridge to tomorrow, there’s a bridge to the past; there’s a bridge made of sorrow, that I pray will not last. There’s a bridge made of colors, in the sky high above; And I think that there must be, bridges made out of love…” Padayon!
Only 15,000 cell sites serve 140m phones in PH IN the world’s social media capital, there are only 15,000 cell sites covering 140 million phone numbers. And so it is no wonder that mobile connectivity in the Philippines is among the slowest in the world, with efforts to improve telecommunications infrastructure hampered by misplaced fears on the purported damaging effects of cell sites on health. National Telecommunications Commission Commissioner Gamaliel Cordoba has identified community resistance to the installation of cell sites as among
major hurdles to efforts to improve mobile phone and internet service in the country. The Philippines currently has among the slowest internet speeds in Asia Pacific at an average 4.2 Mbps, just above India. The International Telecommunication Union, the telecommunications body of the United Nations, meanwhile, ranked the Philippines a lowly 105th in the world in terms of information and communications technology in 2015. “Right now, under the existing law, homeowners associations should give their consent before
a cell site or a telecommunications infrastructure is put up inside their village or subdivision,” Cordoba said, addressing the just-concluded Philippine Telecoms Summit 2017. “But these homeowner associations do not give permits, that’s why there are no cell sites or telecoms infra in their backyard,” he said. Cordoba said those most vocal against cells sites were curiously the loudest to complain about poor connectivity. “The problem, too, is that the people who live in these villages
are the first ones to complain if they don’t have good connectivity,” he said. Telecommunications companies face such problems as homeowners associations do not allow the construction of cell sites due to the commonplace fear that they emit harmful radio frequency. For instance, in the posh Ayala, Alabang, only a single cell site serves the community of 700 hectares. In upscale Makati villages Forbes Park and Dasmariñas Village, there are no dedicated cell sites for the two neighborhoods about 300 hectares in size.
President Duterte and Manuel V. Pangilinan during the lowering of time capsule
Burying of time capsule with President Rodrigo Duterte
With Secretary Medialdea, MVP, MPIC Director Alfred Ty