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SUNDAY, NOVEMBER 19, 2017
Business
Ray S. Eñano, Editor / Roderick dela Cruz, Issue Editor business@manilastandard.net
WHY DANISH ADVISOR FORESEES AN OVERHEATING PH ECONOMY
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Danish investment advisor expects the Philippine economy to post one of the fastest growths in the world next year, but warns about the risks of overheating, given the massive stimulus spending that the government plans under the ‘Build, Build, Build’ infrastructure program, the weak peso, the low interest rates and the rising inflation.
“What I am more worried about is that the Philippine economy could overheat, because there might be the tax reform in the first week of January. There is also the strong infrastructure spending next year, The Philippine peso is relatively week, and that means continuous monetary easing,” says Peter Lundgreen, the founder and chief executive of Copenhagenbased Lundgreen’s Capital. Lundgreen’s Capital is regulated by Danish financial authority ‘Finanstilsynet’ and has a license to offer individual investment advice and risk management consulting in the European Union. It also has an office in Fort Bonifacio, which Lundgreen visits three or four times a year, to monitor the situation in Asia, including China. The company operates as a financial advisory company and offers services to corporations, individual wealth management, municipalities and organizations in Europe. Lundgreen has a 30-year experience in the German financial and banking industry and was the former head in the markets division at Danske Bank and head of multinational sales at Dresdner Kleinwort Wasserstein. He speaks three languages: English, Danish and German. “I decided to form my own company in December 2009. Financial market has always been my passion. I have never thought of doing anything else than being in the financial market. May main career is to advise very large European companies about financial risks,” says Lundgreen. Lundgreen says he decided to establish an office in the Philippines to tap its talent in English communication and social media. “The reason is it is natural for me to be in Asia,” says Lundgreen, who also visits Hong Kong and Beijing often. “Now I come here frequently. The Philippine economy is extremely interesting. It is natural to sort of explore and gather opinion about it,” says Lundgreen, who saw the continuous rise of skyscrapers in Fort Bonifacio over the past two and a half years. “In terms of economic growth, the Philippines is number one. It is always interesting to be here,” he says. However, there are warning signs that should be heeded by the central bank, he says. “The financial market fears that the central bank will be too late in hiking rates. Right now, I sort of argue that the central bank [Bangko Sentral ng Pilipinas] is two hikes delayed by 25 basis points, each. They should clearly signal that in case of any sign of overheating, they are ready to hike immediately. I think they should state that very clearly,” Lundgreen, 50, says in an interview in Makati City. The Philippine economy grew 6.9 percent yearon-year in the third quarter, the second fastest in
the region after Vietnam. However, the peso is one of the poorest performing currencies in Asia this year, trading at an 11-year low, amid strong demand for imported capital equipment ahead of the expected infrastructure boom in the coming years. Lundgreen, who is also an international speaker and resource person, says two interest rate hikes may be needed to reverse the trend of the sliding peso. The International Monetary Fund also earlier warned that the “combination of high credit growth, buoyant private investment and fiscal expansion without tax reform could lead to overheating of the economy.” Bangko Sentral Governor Nestor Espenilla Jr., however, said the current GDP growth was in line with the economy’s potential and that overheating could be avoided through high-quality investments. An economy is said to be overheating if the productive capacity is unable to keep up with increasing demand. Lundgreen expects the Philippines to be the world champion in GDP
ADVISOR.
Lundgreen’s Capital chief executive Peter Lundgreen
growth in 2018, and says that its stock market has further room for growth. However, the country might be affected by the rising risks in the bond market. “I have one global concern and it also affects the Philippine market. I see the biggest problem in the bond market. First of all, bond prices are really, really high,” he says. “The very, very biggest fear I have for the financial markets right now is the rising risk of a bond selloff. The risk for it to happen has gone up over the past one or two months. So it is more likely that you will see a big selloff in the bond market that will set interest rates higher. That will shake the stock market as well,” says Lundgreen. “Again, this may not be the primary scenario yet, but the risk has gone up for it to happen.” “Everybody will rush out of the door selling all the bonds. We are now advising people, as a first counter measure, to reduce their duration in the bond portfolio,” he says. Lundgreen claims that inflation rates are higher than what are reported by authorities. “I Turn to B2
FIREWORKS MAKERS ASK QUEZON CITY TO EXPLAIN ORDINANCE LOCAL fireworks manufacturers and dealers asked the Quezon City government to review its new fireworks ordinance to make it in line with existing laws and policies at the national level. Joven Ong of the Philippine Fireworks Association said Quezon City’s Ordinance No. SP 2618 S-2017 banning the use of all firecrackers and pyrotechnics in public spaces does not seem to be aligned with Republic Act No. 7183 and Executive Order 28 and its implementing guidelines issued by the Department of Interior and Local Government. “All local legislation should generally be in step with or hew closely to executive issuances from Malacanang and national laws passed by Congress,” Ong said. “Quezon City ’s ordinance appears to be a knee jerk response to EO 28,” Ong said, noting that it contradicts the order. He said EO 28 allows the use of pyrotechnics and effectively limits the use of firecrackers. EO 28 is trying to clamp down on firecrackers which is the predominant cause of fireworks related injuries. EO 28 though gives everyone a chance to shift from the use of firecrackers (paputok) to the safer pyrotechnics (pailaw). “The QC ordinance would have been in consonance to EO 28 if it allowed pyrotechnics and only banned firecrackers on public spaces without the necessary permit,” said Ong. Section 2 of EO 28 provides that all other types of pyrotechnics except for firecrackers may be used outside community fireworks displays and thus exempted from the rules found in Section 1 of EO 28 specifically tackling firecrackers. The confusion is on the use of the right terminology. “A lot of people still do not know what fireworks, firecrackers, and pyrotechnics really mean and use one or the other indiscriminately. We see a lot of these on news reports by media itself. This sows confusion,” according to the Philippine Fireworks Association. The association said firecrackers does not mean all the fireworks Turn to B2
POLISH TECHNOLOGY FIRM OPENS PH HEADQUARTERS
From left: Lingaro co-founder and co-chief executive Sebastian Stygar, Lingaro Philippines business domain leader Tina Dayon and Lingaro co-founder and co-chief executive Tomasz Rogucki
BUSINESS intelligence and data analytics service provider Lingaro marks its fourth year of operations in the Philippines with the opening of its new office. The launch of the official Philippine headquarters signals Lingaro Philippines’ increased investments and strengthened ef fo r ts in prov iding 2 4/7 business intelligence solutions to the Asian and global markets. Leading the official launch of the new office, Lingaro cofounder and co-chief executive Sebastian Stygar says the firm is now ideally positioned to continue developing its scalable business intelligence and data
integration solution offerings. “For four years now, Lingaro Philippines has been in the business of enabling companies to succeed in the marketplace by turning data into actionable insights that bring tangible results. With our new office, we are even more excited to expand our work and help grow the industry locally and regionally. We may be different offices but Lingaro Poland and Lingaro Philippines are one team,” says Tomasz Rogucki, Lingaro’s cofounder and co-chief executive. With its offices in Warsaw, Poland and in the Philippines, Lingaro is an award-winning technology partner to global
industr y leaders. In 2015, Lingaro took the 72nd spot on Forbes Magazine’s list of Polish companies with fastest value growth. Lingaro is a trusted global technology partner to industryleading Fortune 500 brands. It delivers end-to-end solutions notably in the areas of big data, data warehousing, business intelligence, data analysis, and the Internet of Things. With expertise in application management, application design and development, project management, service level management, platform governance and administration, and application support, Lingaro
Philippines brings data-driven business solutions to the country’s industry leaders in industries such as energy and FMCG. With the launch of the new facility, Lingaro Philippines hopes to serve a more buoyant and dynamic Philippine market. The new Lingaro Philippines office is at the Philamlife Tower along Paseo de Roxas Avenue in Makati City. Lingaro Philippines is a subsidiary of the Lingaro Group from Warsaw, Poland. Established in 2013, Lingaro Philippines offers 24x7 cutting edge end-toend data processing solutions to the Asean market.