CYAN MAGENTA YELLOW BLACK FRIDAY: NOVEMBER 20, 2015
RAY S. EÑANO EDITOR
RODERICK T. DELA CRUZ ASSISTANT EDITOR
business@thestandard.com.ph extrastory2000@gmail.com
BUSINESS Agri partnership.
Telstra seen not a threat to PH telcos
Agriculture Secretary Proceso Alcala (right) and Grow Asia director for country partnerships Jenny Costelloe discuss future collaborations of the Agriculture Department and Grow Asia during the Philippines Partnership for Sustainable Agriculture General Meeting in Quezon City. Agricultural stakeholders during the event were divided into groups to discuss challenges and propose solutions within the different industries of the agriculture sector, including corn, coconut, coffee, cassava and fisheries.
By Darwin G. Amojelar
BSP ready to adjust vs Fed rate increase
By Julito G. Rada
BANGKO Sentral ng Pilipinas said Thursday the possibility of an interest rate hike by the US Federal Reserve in December will generate more financial market volatility and may force policy makers to review economic targets. Bangko Sentral Deputy Governor Diwa Guinigundo said monetary authorities were monitoring developments overseas because of their impact on the domestic financial markets. He said the imminent interest rate hike by the US Fed would be a major factor to consider in the review of the country’s economic targets this year.
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“We have to consider the forthcoming US Fed lift-off which could generate some financial market volatility. Vigilance is critical,” Guinigundo said in a text message. The US Fed, in its meeting in September, kept interest rates unchanged but hinted of a possible rate hike before the end of the year. Guinigundo said earlier the
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Fed’s September statement would create further uncertainties in the global financial markets that could affect local financial markets. The Philippine peso depreciated by 5 percent since the start of the year while stocks dropped 5.6 percent in the same period, because of the market volatility. Guinigundo said Bangko Sentral was “still reviewing our external payments position.” The Bangko Sentral reviews its economic projections twice a year—in May and October. It targets $81.6 billion in gross international reserves, a surplus of $2 billion for balance of payments, $6-billion net inflow of foreign direct investments, $1.4-billion net inflow of foreign portfolio investments and a 5-percent growth in
remittances this year. Meanwhile, Bangko Sentral Governor Amando Tetangco Jr. said the bank was studying the possibility of increasing its holdings of Chinese currency in foreign exchange reserves amid the growing use of yuan in the global financial transactions. “That is clearly an option for the BSP in its efforts to diversify the foreign currency composition of its reserves and to enhance its yields on foreign exchange assets,” Tetangco said at the sidelines of the Asia Pacific Economic Cooperation Summit in Manila. “We will of course have to understand how the domestic market works in China so that we’d be in a better position to make decision,” Tetangco said.
THE entry of Telstra Corp. through a joint venture with San Miguel Corp. is unlikely to shake up the telecom landscape in the Philippines, which is dominated by Philippine Long Distance Telephone Co. and Globe Telecom Inc., according to debt watcher Fitch Ratings. The credit rating agency said the potential entry of Telstra in the country would have “limited” impact on competition in the telecom market over the next two years. Fitch cited infrastructure sharing as one of the challenges that Telstra and San Miguel would be facing, because sharing of networks was not mandatory in the Philippines. This means Telstra and San Miguel would spend billions of pesos to roll out their own mobile and broadband networks, it said. The planned joint venture between San Miguel and Telstra would see the local conglomerate holding a majority stake, in compliance with the 1987 Constitution, which limits the foreign ownership of utilities to a maximum of 40 percent. Telstra plans to invest less than $1 billion in the Philippines to roll out the telecom network. “Initial rollout by the new entrant is likely to focus on mobile broadband services in the first two years, with a likely expansion into mobile telephony once the network build-out is completed,” Fitch said. It said the joint venture would experience large cash burn, given the significant capital outlay and price competition to build a subscriber base.