usd and usd: September 2013

Monday, September 30, 2013

Oil prices slip as US slides into government shutdown

1:55 pm | Tuesday, October 1st, 2013

AP FILE PHOTO

SINGAPORE – Oil prices eased in Asian trade Tuesday as the US government began shutting down for the first time in 17 years following a gridlock in Congress over a new budget.

New York’s main contract, West Texas Intermediate for delivery in November, fell 30 cents to $102.03 in afternoon trade, while Brent North Sea crude for November dipped 60 cents to $107.77.

With the midnight deadline passing in Washington without any agreement, the White House ordered federal agencies to initiate their shutdown procedures, which will see more than 800,000 non-essential federal workers placed on unpaid leave.

The government shutdown will “result in the decrease in demand for oil in the world’s top oil consumer, pressuring prices, as hundreds of thousands of government employees would be forced to stay home without any pay,” Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said in a note.

Crude prices were also under pressure following landmark contact between Iran and the United States, which could possibly lead to an easing of Western sanctions on the crude producer and allow it to export oil more freely.

Iran’s economy has been crippled by a series of UN and US sanctions aimed at bringing an end to its nuclear program, which the West claims is being used to develop nuclear weapons. Iran denies the assertion.

“Going forward, if sanctions are eased, resulting in increasing exports from Iran, oil prices will continue to be pressured,” Teoh said.

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Tags: Asian Trade , Business , economy , oil , US government shutdown

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Before businessmen, Drilon, Belmonte vow to push economic reforms

Senate President Franklin M. Drilon(left) and Speaker Feliciano R. Belmonte Jr.: Economic reforms. FILE PHOTO

MANILA, Philippines—The leaders of both Houses of Congress on Monday gave the business community their firm commitment to pursue critical economic reforms and policy interventions aimed at attracting foreign investments, boosting the country’s competitiveness, creating new jobs and reducing poverty.

Speaking before the Makati Business Club (MBC) membership meeting, Senate President Franklin M. Drilon and Speaker Feliciano R. Belmonte Jr. outlined their respective priority measures, including the Freedom of Information (FOI) bill, which would give the public access to government records.

Both lawmakers also committed to push for amendments to economic provisions of the Constitution.

Inclusive growth

“We will push for policies that will boost investments in agriculture, tourism, manufacturing, construction and services. We will allocate funds to upgrade facilities and improve infrastructure and public services,” Drilon said, adding that the Senate would do its share “to achieve and accelerate sustainable and inclusive growth.”

Belmonte, for his part, said the House of Representatives would focus on making the country a more conducive place for business to further attract foreign investments.

“We will push for reforms that will improve the state of infrastructure in the country…(and address) the high costs and inadequacy of power and water supply,” he added.

FOI bill

Drilon and Belmonte committed to pass during the term of President Aquino the FOI bill, which the Senate President described as “an important measure to drive the governance reform agenda as it adopts an international policy of full disclosure of government spending.”

The two officials also underscored the need to rationalize the granting of fiscal incentives as there are at least 186 laws that grant such overlapping subsidies to investors.

“We will reassess and harmonize these laws to avoid redundant and overlapping incentives and to cap unnecessary revenue loss. We intend to level the playing field by granting incentives to industries that need them,” Drilon said.

“Revenue losses due to redundant incentives can be as high as one percent of the country’s gross domestic product,” added Belmonte.

The Speaker also identified as a priority bill the rationalization of the mining fiscal regime to ensure a more equitable share of revenues for the government.

Open up industries

He added that lawmakers were also keen on revisiting the investment restrictions provided under the foreign investment negative list (FINL) to open up more industries to foreign investors.

In line with this, amendments may be necessary to the Foreign Investments Act, the Condominium Law, the Public Service Act and the Retail Trade Act, Belmonte said.

The two officials also cited the need to amend the Cabotage Law to open up the shipping industry, foster greater competition and lower the cost of transportation for the agriculture sector and other enterprises.

Amendments to the charter of the Bangko Sentral ng Pilipinas (BSP) could also strengthen its regulatory and supervisory powers, they added.

Among those identified as priority bills in the House of Representatives are the establishment of a national transportation policy; the review of the Electric Power Industry Reform Act; the modernization of the customs bureau; the legislation of the National Land Use Policy; and the amendment of the Government Procurement Act.

Strong possibility

MBC executive director Peter Angelo V. Perfecto said the business group was “happy” that the economic reforms considered as priorities by both lawmakers were those attuned to the issues that had been raised by business groups over the last two years.

“MBC is very happy that both of them mentioned the possibility of passing the FOI. This is the first time we got a firm commitment from the Lower House and it looks like there’s a very strong possibility in this Congress that we will have the FOI bill,” Perfecto said.

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Government Shutdown Imminent - Here's My Take

Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for the last day of the month and quarter, Monday the 30th of September.

It's hard to know where to begin, so let's begin at the beginning. I think we should throw all the Republicans and Democrats out of office - they are absolutely not helping America move forward and get back on its feet again.

What is happening now in Washington is a childish squabble between two completely different ideologies without any grown ups in the room.

I believe that both parties have lost sight of the big picture, and that's making America strong economically. That means creating jobs, putting people back to work and to live within our means. If we can't afford it, we can't afford it - end of story.

These simple concepts seem to be beyond the grasp of the two parties and the last thing on either parties mind. It's all about, whats in it for me, and I want to keep my position of power and job come h@ll or high water.

That narrow minded attitude does not reflect well on America,the economy and the stock market in general. There are no winners in this stupid schoolyard game of mines bigger than yours, as both parties in the eyes of the general public are going to lose big.

Leave a comment below and give us your take on Washington and the current stalemate.

On a brighter note, Apple (NASDAQ:AAPL) just became the number one brand in the world according Interbrand's annual Global Brands report. Apple displaced perennial number one Coca-Cola after a 13 year run on top. We say it's about time, congratulations Apple.

On a personal note, I still have not been able to buy an Apple gold iPhone 5S phone. According to the local Apple Store here and Annapolis, there is a line every morning outside the store waiting for the overnight supply of new iPhones to come in. That is how good and how strong the cult of Apple is, everybody wants a new iPhone. No, let me rephrase that everybody wants a gold iPhone 5 S.

Apple could just on those facts alone move higher when it's finished it's consolidation phase. Maybe by that time I will have a gold iPhone 5s in my hand:-)

I'll be looking at Apple today and how I believe it is consolidating to go higher.

Unlike the gold iPhone 5S, gold has to be disappointing to the bulls with all this financial chaos in Washington. In fact as I am writing this gold is down for the day. We still believe this market is in the beginning phase of consolidating to move higher later this year or early next year. We will of course be waiting for our Trade Triangles to signal that move

FaceBOOK (NASDAQ:FB) along with Netflix (NASDAQ:NFLX) and Tesla (NASDAQ:TSLA) have all had a nice run-up and we will be analyzing those stocks in today's report.

If you would like to leave a comment or ask a question on any of the stocks mentioned in today's report we would love to hear your take on things.

Have a great day.

Carpe diem

Adam Hewison

President, INO.com

Co-Creator, MarketClub

Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.

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Asian shares down as US faces shutdown over budget row

People walk past the electronic stock indicator of a securities firm in Tokyo, Monday, Sept. 30, 2013. Asian markets slumped on Monday as the US government edged towards a shutdown over a budget battle. AP PHOTO/SHIZUO KAMBAYASHI

HONG KONG—Asian markets slumped on Monday as the US government edged towards a shutdown over a budget battle.

The face-off in Washington also sent the dollar lower, while the euro suffered selling pressure from a crisis in Italy that has left the country’s five-month-old government on the brink of collapse.

Tokyo fell 2.06 percent, or 304.27 points, to 14,455.80, Sydney shed 1.66 percent, or 88.2 points, to end at 5,218.9 and Seoul eased 0.74 percent, or 14.84 points, to 1,996.96. Hong Kong shed 1.50 percent, or 347.18 points, to close at 22,859.86.

But Shanghai rose 0.68 percent, or 14.64 points, to close at 2,174.67 after a survey by banking giant HSBC showed Chinese manufacturing expanded further in September.

Traders have been spooked by the latest row on Capitol Hill, with the US government on the brink of shutting down after the House of Representatives approved a Republican bill seeking to delay President Barack Obama’s healthcare law.

Lawmakers now have until midnight Monday to reach an agreement to keep the government open, but analysts say the chances of a breakthrough are slim.

Obama has threatened to veto any bill that undercuts his sweeping health overhaul, while Democratic Senate Majority Leader Harry Reid says his chamber will reject the bill.

Adding to the crisis is a deadline to raise the country’s borrowing limit, which comes up in mid-October. With Republicans determined not to raise the debt ceiling unless Obama gives way on the health bill, there are fears that Washington will run out of cash and default on its repayments.

“Things are far from the ‘panic stage,’ but they don’t have to be for investors to be spooked by the apparent intractability of the US political deadlock,” said Tachibana Securities market analyst Kenichi Hirano.

The impasse weighed on the dollar Monday, with the unit weakening to 97.87 yen from 98.24 yen in New York Friday.

The euro fell to $1.3500 and 132.16 yen compared with $1.3519 and 132.88 yen.

The single currency suffered selling pressure after Italian Prime Minister Enrico Letta called a vote of confidence in his left-right government, as former premier Silvio Berlusconi pulled his party’s ministers out of the coalition.

President Giorgio Napolitano will have to mediate to find a way out of the latest political impasse, and has said he would dissolve parliament, triggering new elections, only “if there are no other solutions.”

On oil markets New York’s main contract, West Texas Intermediate for delivery in November, fell $1.35 to $101.52 in afternoon trade. Brent North Sea crude for November was down 95 cents to $107.68.

Gold cost $1,340.86 at 0805 GMT compared with $1,324.60 on Friday.

In other markets:

– Mumbai fell 1.76 percent, or 347.50 points, to 19,379.77 points on fears of future interest rate hikes.

Private oil explorer Essar Oil fell 7.61 percent to 50.40 rupees, while steel giant Tata Steel fell 5.65 percent to 271.6 rupees.

– Taipei fell 0.69 percent, or 56.81 points, to 8,173.87.

Taiwan Semiconductor Manufacturing Co. shed 2.43 percent to Tw$100.5 while Hon Hai Precision was 0.52 percent lower at Tw$75.9.

– Jakarta ended down 2.43 percent, or 107.54 points, at 4,316.18.

Cement producer Semen Indonesia fell 5.80 percent to 13,000 rupiah, while tin miner Timah rose 3.21 percent to 1,610 rupiah.

– Singapore closed down 1.32 percent, or 42.31 points, at 3,167.87.

Real estate developer Capitaland fell 2.52 percent to Sg$3.09, while United Overseas Bank was down 2.87 percent at Sg$20.67.

– Kuala Lumpur fell 7.54 points, or 0.42 percent, to close at 1,768.62.

Financial firm CIMB Group Holdings lost 3.2 percent to 7.52 ringgit, while Axiata Group shed 0.2 percent to 6.88. Power company Tenaga Nasional gained 0.3 percent to 9.03 ringgit.

– Wellington eased 0.97 percent, or 46.29 points, to 4,736.39.

Telecom fell 1.9 percent to NZ$2.33 and Warehouse Group was off 2.92 percent at NZ$3.66, while Air New Zealand rose 0.33 percent to NZ$1.52.

– Bangkok lost 2.42 percent or 34.33 points to 1,383.16.

Coal producer Banpu dropped 4.35 percent to 27.50 baht, while Siam Cement fell 5.33 percent to 426 baht.

– Manila slipped 2.95 percent, or 188.01 points, to 6,191.80.

Alliance Global Group fell six percent to 23.50 pesos while SM Investments dropped 4.41 percent to 7.80 pesos.

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BIR targets ‘tiangge’ operators, organizers

10:28 pm | Monday, September 30th, 2013

In a bid to check the tax evasion among operators of privilege stores, more popularly known as “tiangge,” the Bureau of Internal Revenue has issued a regulation detailing their tax obligations.

The BIR said owners of privilege stores that are operating for more than 15 cumulative days a year were considered regular businesses and, as such, should pay the usual tax obligations on enterprises, including income and value-added taxes.

The BIR said these operators should not be treated differently than other businesses in terms of taxation.

On the other hand, the BIR said owners of privilege stores operating for 15 days or less would be considered consignees of the “organizer,” or the person or entity that leases out space that the BIR treats as the consignor. In this case, the tax bureau said the organizer would be the one responsible to pay the income tax. The consignor should also provide the privilege store operators with point-of-sale machines and allow them to use its own sales invoices and receipts.

“The relationship between organizer and privilege store operators that are not registered as regular taxpayer [because its operation is only for 15 days or less] engaged in trade or business shall be consignor-consignee relationship,” the BIR said in Revenue Regulation 16-2013.

The regulation was signed by Internal Revenue Commissioner Kim Henares and has already been approved by the Department of Finance.

The BIR further said in the regulation that privilege store operators who pay rent to the organizers would be required to withhold 5 percent of the gross amount of rent and remit the money to the tax agency.

Similarly, the BIR said that organizers who pay rent to owners of the space being leased out for the operation of privilege stores would also be required to withhold the 5-percent tax and remit this to the tax bureau.

The BIR also said that it was the responsibility of the organizers to help ensure the proper payment of taxes by the privilege store operators.

In particular, organizers are required to provide the BIR, through its revenue district offices, with the lists of privilege store operators they are doing business with.

The organizers must also require privilege store operators to show tax identification numbers, sales receipts and other records of sales and tax payments.

The BIR hopes that with the latest revenue regulation, more privilege store owners would register as taxpayers and shift from becoming part of the informal sector that is not captured by the tax system.

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Short URL: http://business.inquirer.net/?p=145361

Tags: BIR , Business , privilege stores , tax evasion , tiangge

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BSP: Money supply growth fastest in 10 years

Prices seen to remain stable despite surge in liquidity

By Paolo G. Montecillo

Philippine Daily Inquirer

10:26 pm | Monday, September 30th, 2013

The rate of rise of the country’s money supply in August was the fastest seen in a decade due to the growth in loans of major banks and the release of cash from special central bank accounts, data released this week showed.

But the Bangko Sentral ng Pilipinas (BSP) stressed that it considered the high growth in liquidity to be a temporary situation and would not destabilize consumer prices that could threaten economic growth.

“Latest baseline forecasts of the BSP continue to indicate within-target inflation over the policy horizon amid the stronger pace of growth in domestic liquidity in the coming months,” BSP Governor Amando M. Tetangco Jr. said.

Domestic liquidity grew by 30.9 percent in August, accelerating slightly from 30.1 percent in July. It was the fastest rate of rise in ten years.

The BSP attributed the increase to the recent lapse of the deadline for banks to take out nonpooled funds from the central bank’s Special Deposit Accounts (SDA).

Because of the availability of ultra-cheap money and low yields in traditional investment instruments, more and more individual investors decided to turn to the BSP’s SDA facility—originally a tool for mopping up excess liquidity—to make a profit.

But last May, the BSP ordered banks to take out at least 30 percent of the funds of individual investors from SDAs by the end of July. The remaining 70 percent will have to be removed by November.

“As expected, the BSP’s operational adjustment in its SDA facility also contributed to the M3 increase in August,” Tetangco said.

Once the funds are drawn from SDAs, these would most likely be diverted to time deposit accounts in banks, which are counted in measuring M3.

Also contributing to the higher liquidity was the acceleration in loans extended by the country’s universal and commercial banks.

Bank loans in August increased by 14.2 percent, faster than the 12.3 percent increase in July, data from the BSP showed. Including reverse repurchase transactions with the BSP, bank loans increased by 13 percent, faster than the 11.7 percent of the previous month.

The BSP said most of the loans went to productive sectors of the economy—real estate, construction, wholesale and retail trade, and electricity, gas and water services.

“The sustained expansion in bank lending, particularly to productive services, is expected to support the growth momentum of the economy,” the central bank said.

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Short URL: http://business.inquirer.net/?p=145353

Tags: BSP , Business , money supply

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PH backs UN bid to redefine poverty measure

By Michelle V. Remo

Philippine Daily Inquirer

10:24 pm | Monday, September 30th, 2013

THE PHILIPPINES—where over a fourth of the population are poor—is backing a proposal in the United Nations that will redefine how the incidence of poverty is measured.

Arsenio Balisacan, director general of the National Economic and Development Authority, said defining the incidence of “multidimensional poverty” would be a more holistic approach in assessing a population’s well being.

There is no definite process for measuring multidimensional poverty. But under the UN proposal, proponents hope that factors such as access to services and facilities on health, sanitation, education and security, will be taken into account.

“Multidimensional poverty measurement is highly relevant and extremely useful for our efforts to substantially reduce poverty in the Philippines,” Balisacan said in a speech delivered during the 68th general assembly of the United Nations held last week in New York City.

Balisacan said measuring poverty in multidimensional level would be important in seeing the bigger picture.

He said that, in the case of the Philippines, poverty incidence as of the latest count was still high. The figure was almost unchanged from that of previous years, although some improvements could be noted if other factors affecting the well-being of its population were to be taken into account.

In particular, Balisacan claimed that there has been a substantial improvement in access to services and facilities, such as health and education, which helped improve the quality of life in the Philippines.

As of the first semester of 2012, poverty incidence in the Philippines stood at 27.9 percent. According to statisticians, the figure was not statistically different from the 28.6 percent recorded in 2009.

However, over the same period, more poor gained access to public services and facilities, which led to an improvement in the quality of living, Balisacan said.

“Quality of life did improve, as evidenced by the declining trend in acute deprivation. Economic growth resulted in improved access to services and facilities, encouraged asset buildup, and [led to] human capital improvements” among the poor, Balisacan said.

The government’s conditional cash transfer program (CCT), which started in 2009, was one of the factors that had helped reduce multidimensional poverty in the Philippines.

A study by the World Bank released earlier this year showed that 98 percent of children aged 6 to 11 in communities covered by the CCT program are now in school. This is higher than the 93 percent of children not belonging to communities covered by the CCT.

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Short URL: http://business.inquirer.net/?p=145345

Tags: Business , incidence of poverty measure , Philippines , UN

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Gold Chart of The Week

Each Week Lo ngleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

Weekly Gold Report (Sept 30^th through October 4^th)

In the upcoming week, global markets have much to look forward to. In the United States, we will hear from multiple FED Members including Ben Bernanke and will also have to deal with the potential for a government shutdown in Washington. If that were not enough, Friday will bring the Non-Farm Payroll numbers that traders always look forward to. In Europe, the ECB will report their Interest Rate Decisions and we will also hear from the ECB President in a press conference that follows. The same decisions are expected this week in Australia and in Japan.

The most important information over the next two weeks will be the debate in Washington as once again Democrats and Republicans have waited until the last minute to debate major differences on the debt ceiling. The story on whether the government will officially shut down can and likely will change on a daily basis until the final deadline is upon us. We plan to rely on technical analysis as usual until the final decision is made.

The chart above is a daily chart of the December Gold Futures. You will notice a pennant formation has formed using the August 28^th high and the September 18^th low prints. With most of the major Simple Moving Averages (20day, 50day, 100day, and 200day ) converging in a $10 range above the current price, it would appear that Gold may continue to be pressured in the early part of the week. Using these moving averages and the pennant formation should provide traders some very nice opportunities to day-trade ranges until prices either drop below the support trendline or break out and close above $1350.

If you would like to discuss trading in the Futures and Futures Options markets with me, please feel free to call or email me directly. You can reach me directly at (888) 272-6926 or by email at bbooth@longleaftrading.com.

Thank you for your interest,

Brian Booth

Senior Market Strategist

bbooth@longleaftrading.com

888.272.6926

** There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.

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Sunday, September 29, 2013

Australia central bank subsidiary in Saddam link

SYDNEY—The Reserve Bank of Australia (RBA) on Monday admitted staff from a subsidiary visited Iraq at the height of UN sanctions after it was accused of attempting to strike an illegal deal with Saddam Hussein.

A joint investigation by the Australian Broadcasting Corporation and Fairfax Media said secret files showed officials from the central bank’s scandal-hit Note Printing Australia (NPA) went to Iraq to discuss a contract to turn the country’s paper currency into polymer notes.

During the 1998 trip, codenamed Delta Project, they met a middleman—former dictator Hussein’s brother-in-law and bodyguard Arshad Yassin, the reports said.

“Indications from Arshad Yassin’s office are that Saddam Hussein’s office has already allocated $US65 million for the total project,” RBA officials said in one document, the media groups reported.

“He has confirmed that Saddam Hussein has seen the polymer notes samples and is keen to adopt our product.”

Reserve officials working for NPA said the funds could potentially be accessed by funnelling them through a Jordanian bank “with the green light of SH (Saddam Hussein),” it was alleged.

The operation was called off six months later after Australian diplomats uncovered the secret dealings with the brutal regime, according to the ABC.

The RBA admitted officials made the trip, as calls mounted for a full inquiry.

“The visit in 1998 was, in the opinion of the bank, ill-advised,” it said in a statement.

“No banknotes were ultimately supplied to Iraq. On the records available to the bank, the project went into abeyance after concerns were raised by DFAT (Department of Foreign Affairs and Trade) with the then-CEO of NPA.”

David Chaikin, a legal expert at the University of Sydney who reviewed the confidential bank documents, said the negotiations were a violation of international law and alarm bells should have been sounded “to the highest levels of the bank”.

“What was happening is not only in violation of law, but could potentially destroy and undermine the reputation of Note Printing Australia and its owner, the Reserve Bank,” he told the broadcaster.

He added to Fairfax that the files contained a “very strong prima facie” case that officials involved in the trip had breached a UN sanction that banned Australians from promoting the sale or supply of goods to Iraq.

NPA has been plagued by allegations of corruption in recent years, with claims it and another RBA subsidiary Securency paid bribes to win plastic bank note contracts in Asia.

Executives from both companies have been charged over the alleged racket, which involved contracts in Indonesia, Malaysia, Vietnam and Nepal, following an investigation by Fairfax in 2009.

The RBA has previously denied it attempted to hide information related to the Asian contracts, with bank chief Glenn Stevens telling an inquiry last year that he knew nothing about the scandal before it was exposed.

Whistle-blower Brian Hood, a former NPA executive, told the ABC and Fairfax that Stevens’ testimony “wasn’t the truth” and the RBA knew of the allegations in 2007, claims the bank rejected Monday.

“The governor has always answered questions in parliamentary proceedings fully and truthfully,” it said.

Australian Greens Party deputy leader Adam Bandt said the latest revelations were disturbing.

“Most Australians would be shocked to know their central bank was using their money to line up dirty deals with Saddam Hussein,” he said.

“The stench surrounding the Reserve Bank gets worse and a full inquiry is needed to clear the air.”

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Asian stocks quiet on Washington shutdown worries

Associated Press

12:20 pm | Monday, September 30th, 2013

TOKYO—Asian stocks were mostly down in early Monday trading, though only slightly, as jittery investors watched the United States government near a shutdown.

Tokyo players were also awaiting a decision expected Tuesday, by the Japanese government on raising the consumption tax, said Katsuyuki Hasegawa, chief market economist at Mizuho Research Institute in Tokyo.

The benchmark Nikkei for the Tokyo Stock Exchange lost 1.9 percent in the first hour of trading to 14,480.34. South Korea’s Kospi inched down 0.6 percent to 1,999.85, while the Hang Seng index crept up 0.35 percent to 23,207.

Hasegawa said the Nikkei would likely be hurt if Washington shuts down and sets off a plunge on Wall Street.

But he said a tax rise in Japan, which usually is negative for stocks, could prove a plus by signifying Prime Minister Shinzo Abe’s determination to forge ahead with structural reforms.

“And so now the Tokyo markets are quiet and a wait-and-see attitude is prevailing,” said Hasegawa.

U.S. stocks ended with a decline last week, falling Friday for the sixth day out of the last seven as nervous investors fretted about whether the U.S. government could shut down unless Congress agrees to a new spending bill.

The Dow Jones industrial average fell 70.06 points, or 0.5 percent, to close at 15,258.24. The Standard & Poor’s 500 index fell 6.92 points, or 0.4 percent, to 1,691.75. The Nasdaq composite was down 5.83 points, or 0.15 percent, at 3,781.59.

Adding to the indecisiveness are mixed signals about the American economy. A government report last week showed incomes and consumer spending grew only slightly last month, raising questions about a recovery.

In currencies, the dollar was trading at 97.81 yen, down from 98.31 yen late Friday. The euro was little changed at $1.3495 from $1.3543.

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Short URL: http://business.inquirer.net/?p=145293

Tags: Business , Finance , Nikkei , Shinzo Abe , stock exchange , stocks , Tokyo Stock Exchange , Wall Street

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FMIC inks alliance with Japanese firm Tokai Tokyo

By Doris C. Dumlao

Philippine Daily Inquirer

12:11 pm | Monday, September 30th, 2013

MANILA, Philippines—First Metro Investment Corp., the Metrobank group’s investment banking arm, seeks to broaden its regional reach by entering into a strategic alliance with Japanese holding firm Tokai Tokyo Financial Holdings Inc. (TTFH).

The strategic alliance aims to broaden the two companies’ product offerings and services for the benefit of their respective clients, FMIC said in a press statement on Monday, adding that the duo would also seek to develop other possible areas of business cooperation.

FMIC president Roberto Juanchito Dispo said, “This strategic partnership is a significant step in pursuing our goal to expand our business coverage in the Asian region. This will definitely open up a more diverse client base for First Metro, both here and abroad.”

TTFH is among the 10 publicly listed securities companies in the Tokyo Stock Exchange. It is engaged in the purchase and sale of securities, the brokerage of securities, the underwriting, sale, public offering and private offering of securities, as well as other financial product transaction businesses and financial product-related businesses. The company also provides financing and fund management services for clients in overseas markets, including Asian and European financial markets.

FMIC said the memorandum of understanding, which was recently signed in Japan, would “address collaborative and mutual endeavors such as provision of products and services, information sharing on economic environment and the corporate sector, exchange programs for on-the-job trainees, establishment of investment trust products, and promotion of corporate finance businesses including financial advisory and others.”

In a separate disclosure made by TTFH in Japan, the Japanese firm said it would “aim to meet the growing needs of its valued clients through business cooperation with one of the largest financial institutions in the Philippines, as it recognizes great economic potential in the future of the ASEAN region where robust growth is expected.”

“As a first step, TTFH will strengthen its provision of brokerage services of Philippine equities and relevant investment information for the purpose of helping its clients’ investment activities,” the disclosure said.

TTFH is the first group engaged in securities brokerage operation in Japan to form an alliance with the Metrobank Group.

Late last year, First Metro also teamed up with DBSVickers Securities (Singapore) Pte. Ltd. for a research collaboration as part of First Metro’s thrust to establish a footprint in the region in the areas of investment banking, securities brokerage and asset management.

Incorporated in 1963, FMIC is a leading investment bank in the country with 50 years of service in the development of the Philippine capital markets. In 2012, it was recognized by Finance Asia as the Best Equity House in the Philippines.

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Short URL: http://business.inquirer.net/?p=145289

Tags: alliance , Banking , Business , FMIC , tokai tokyo financial holdings inc.

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Era ends, new chapter awaits Washington Post

AP FILE PHOTO

WASHINGTON—With Jeff Bezos set to take over The Washington Post, the big question is: Can he arrest its decline and deliver an economic model for the rest of the industry?

The 49-year-old founder of Amazon could give the storied newspaper a chance to make the transition to the digital age, but it remains unclear whether he has a winning formula for ailing metropolitan daily newspapers.

Bezos, who agreed in August to buy the Post for $250 million and take it private, is expected to close the deal sometime in early October, though no official date has been disclosed.

He has said little about his plans for the 136-year-old daily, which has long been seen as among the most influential in the United States, famous for its trailblazing coverage of the Watergate break-in and subsequent cover-up that led to the resignation of president Richard Nixon in 1974.

Bezos said in August that he had “no map” for the Post but in a recent interview with CNN he called the newspaper “an important institution,” and remarked that he was “optimistic about its future.”

“It’s a personal investment. I’m hopeful that I can help from a distance in part by providing runway for them to do a series of experiments, in part through bringing some of the philosophy that we have used at Amazon to the Post,” he said.

‘Long and patient view’

Some say Bezos, a pioneer in online retailing, could revitalize a traditional business where recent years have seen jobs being slashed amid sinking revenues as news and advertising moves to the Internet.

“He is willing to take a long and patient view… to let things roll without worrying about profitability,” said Alan Mutter, a Silicon valley-based media consultant and former Chicago newspaper editor.

“He’s obviously a very talented businessman and has to be counted as one of the true digital natives,” who could offer new ideas.

“He can look at the problems dispassionately. He didn’t go to journalism school. He did not sell ads. Most of the people in the business have been in the newspaper business, they might not be out-of-the box thinkers.”

But Peter Copeland, a former editor and executive for the EW Scripps newspaper group and now a media consultant, cautioned against dramatic change, noting that the Post’s print circulation still generates significant revenues, though less than previously.

“I don’t think it would be wise to blow up The Washington Post,” he told AFP.

“It has a great brand. And this is a place where people really care about news.”

Copeland said the Post is among the few US dailies that can draw a wide online audience outside its home market, and this gives it some flexibility.

But Bezos may also help bring some hard-nosed business skills to the newspaper, long owned by the Graham family.

“Because the Post was run by a family, a caring family, it has been often run like a family,” Copeland said.

“It’s still a giant organization and it needs to be resized for the amount of revenue they have now.”

Daily circulation is estimated at 447,700, down from over 800,000 two decades ago. In the most recent quarter, the newspaper lost $49 million, mostly from pension obligations. These were effectively subsidized by the other Washington Post Co. units, mainly in television and education.

‘In for the right reasons’

Dan Kennedy, a professor of journalism at Northeastern University who is writing a book on changes in the newspaper industry, said he is encouraged that Bezos is taking the risk.

“He seems to be in for the right reasons,” Kennedy said.

“He sees it as a civic trust, and wants to run it as a good newspaper, and maybe even expand it,” noting that that Bezos “is really our leading digital visionary when it comes to the consumer economy.”

“I’m totally optimistic that he has put himself in a position to do something about this terrible calamity that has affected paid journalism,” Kennedy added, noting the lasting lore of Watergate in American journalism.

“So many people in my generation went into journalism because of ‘All the President’s Men,’” he said, referring to the book and film about the Post’s role in the Watergate scandal.

“Everybody wanted to be Woodward and Bernstein. People thought (actor) Jason Robards was the Post’s editor.”

Beyond content and revenue, Bezos will have one issue he has not faced at Amazon: labor unions. His purchase of the Post is expected to close with the Newspaper Guild renegotiating a contract that expired in July.

Bezos has pledged to keep salaries steady for one year. Guild unit co-chair Fredrick Kunkle has said members are taking a wait-and-see attitude.

“There are a lot of stories about Bezos being hostile to unions,” Kunkle said, but noting he felt “hopeful” about the change in ownership.—Rob Lever

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Cheaper brands keep smokers puffing, data show

By Michelle V. Remo

Philippine Daily Inquirer

3:57 am | Monday, September 30th, 2013

A pack of cheap Mighty cigarettes PHOTO FROM MIGHTYCORP.COM.PH

MANILA, Philippines—Cigarette consumption in the country fell—but only marginally—in the second quarter from a year ago, with an increase in the production of cheap P1 per stick brands helping demand stay afloat despite a hike in sin taxes.

Industry data showed average cigarette consumption at 14.13 sticks a day in the second quarter compared to 14.84 sticks in the same period last year.

Daily consumption was an average 13.53 sticks in the first quarter of the year, but rose back to over 14 percent between April and June as some cigarette firms increased production of the cheaper brands.

Data showed the market share of brands costing P1 per stick rising from 5 percent last year to 30 percent in June this year.

Industry players said the market share of the cheap brands could rise further as the tax on cigarettes increases annually.

Brands selling for P1 a stick include those produced by Mighty Corp. and Philip Morris Fortune Tobacco Corp.

The sin tax reform law, which took effect in January, mandates an annual increase in the excise taxes on cigarette and alcohol products. The rates of increase are specified for this year up to 2017. Afterwards, cigarette tax rates shall rise 4 percent annually to cover inflation.

The new cigarette tax rates effective this year are: P12 per pack for brands with a net retail price of P11.50 and below, and P25 per pack for brands with a net retail price of more than P11.50 per pack.

The objectives of the law are to boost government revenues and to discourage smoking.

Some cigarette firms, however, are trying to prevent a substantial drop in demand by producing cheaper brands.

For 2013, the government projects a collection of P51.6 billion in excise taxes on cigarettes. This is on top of the P6.2 billion in value-added taxes and P6.7 billion in corporate income taxes that it aims to collect from cigarette firms this year.

The excise tax collection target for this year includes P33.9 billion in incremental revenues estimated to come from the tax rate hike.

The incremental revenues targeted for the succeeding years are P42.86 billion for next year, P50.63 billion in 2015, P56.86 billion in 2016, and P64.18 billion in 2017.

Some industry players have expressed concern the higher tax rates could result in a rise in smuggling of cheap foreign-made cigarettes into the country. They said the government would not achieve its revenue goals if smuggling became a problem.

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Agribusiness seen posting strong growth in next 5 yrs

Strong potential in palm oil, sugar and livestock

By Ronnel W. Domingo

Philippine Daily Inquirer

7:16 pm | Sunday, September 29th, 2013

Philippine agribusiness enjoys a positive outlook over the next five years considering the strong potential seen in palm oil, sugar and livestock, according to Business Monitor International (BMI).

In a new report on the domestic agribusiness sector, the London-based research said the ongoing peace efforts between the government and the Moro Islamic Liberation Front could help revive agricultural investment especially in Mindanao

“It [the peace deal] could help Malaysian and Indonesian palm oil producers implement their long-held plans to develop palm oil plantations on the island,” BMI said. “However, we remain cautious regarding business environment and security issues in Mindanao.”

BMI’s reservation is based on the fact that peace with the MILF is still on the table and that infrastructure—particularly transportation system—is still lacking in Mindanao.

Also, the firm believes that the prospective palm oil projects face high operational risks.

“In spite of the 2003 ceasefire between the government and the MILF, terrorist attacks on foreign businesses are still frequent, mainly because other militant groups are still active and pose a risk for companies in the area,” BMI said.

The report was issued in late August, a few weeks before fighting in Zamboanga erupted, involving the Moro National Liberation Front—the government’s peace partner in the region during the administration of Fidel V. Ramos.

Regarding sugar and livestock, BMI holds a positive outlook on the former and anticipates continued healthy growth rates.

BMI forecasts that growth in sugar output would build up to 29.2 percent by the 2016-2017 crop year. Harvest is pencilled in at 2.9 million tons mainly due to improvements in yields.

Over the same horizon, growth in pork output is expected to reach 13.4 percent to settle at 1.5 million tons.

An expansion of commercial farming as well as rising domestic consumption are expected to drive this growth.

“The Philippines’ vast consumer market, along with strong government support, will foster domestic and foreign investment and favor output expansion,” BMI said. “However, backyard farming and infrastructure problems, especially transport costs, will continue to hamper the sector’s growth.”

This is particularly seen in the short term as BMI observed that meat retail prices have remained “elevated” in recent months due to higher production costs and lower output from backyard farms.

“High feed prices as a result of elevated international grain prices have turned many local backyard farmers, who can account to up to 80 percent to 89 percent of pork domestic output in certain regions, away from production,” the company said.

“We believe meat prices will stay elevated in the coming months, driven by historically high grain prices and tighter supply,” it added.

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BSP to mandate higher capital levels for banks

By Paolo G. Montecillo

Philippine Daily Inquirer

7:13 pm | Sunday, September 29th, 2013

Local banks will be required to maintain capitalization requirements well above even the strictest international standards under the new Basel III regulations, which regulators want partly implemented by next year.

The Bangko Sentral ng Pilipinas (BSP) last week bared details of its version of the latest international banking agreement, which was developed in response to the global financial crisis of 2008.

“We want to preserve the principles of the Basel Accord, even though our numbers might be higher,” BSP Assistant Governor Johnny Noe Ravalo said at a recent press conference.

The first and most crucial element of the Basel III accord, which the BSP plans to implement by January, will be rules on capital.

At the moment, local banks are already required to maintain a capital adequacy ratio (CAR) of 10 percent, higher than the international standard of 8 percent under previous Basel II rules. A bank’s CAR represents its buffer for losses in case its risky assets have to be written off. This is a measure of a bank’s ability to absorb unexpected losses that may be a result of macroeconomic issues or a sudden rise in loan defaults.

BSP Governor Amando M. Tetangco Jr. in a recent speech to banking industry players, said the Philippines may be implementing Basel III rules ahead of the international schedule of 2019, but the country is already behind regional peers like Australia and New Zealand, which implemented them at the start of 2013.

Under the new rules, the BSP said it the minimum 10-percent CAR requirement would be retained, but the share of common equity in the CAR would be increased.

The BSP said it would require banks to increase tier 1 capital to at least 6 percent of their total CAR, up from the 5-percent minimum under Basel II rules. Tier 1 capital is made up mainly of actual shareholders’ equity in banks, manifested through common shares. On top of the required 6 percent, local banks would also be required to set aside a 2.5 percent “capital conservation buffer,” a new component that was absent from existing rule.

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Robinsons Retail to proceed with public stock offering

Gokongwei unit seen cutting size of IPO

By Doris C. Dumlao

Philippine Daily Inquirer

6:47 pm | Sunday, September 29th, 2013

The Gokongwei group’s retail unit Robinsons Retail Holdings Inc. plans to proceed with its initial public offering soon but aim for a lower size of $500 million to factor in recent market volatility.

Capital market publication International Finance Review, a unit of Thomson Reuters, reported on Friday that Robinsons Retail was bound to start “pre-marketing” for an IPO worth $500 million in the second week of October.

Another source confirmed the retailer’s plan to brave the equities market, saying that the Gokongweis have started “doing the rounds” to introduce Robinsons Retail to institutional investors.

This shows a growing trend of corporations rekindling their capital-raising plans but aiming for a smaller offering size to take advantage of the window of opportunity provided by the US Federal Reserve’s deferral of monetary stimulus tapering. Earlier, it was reported that Travellers International Hotel Group has likewise revived its IPO plan but is looking at a smaller size of $450 million to $480 million.

Both Robinsons Retail and Travellers were aiming for an IPO size of as much as P42 billion ($970 million) previously, which would have made history as the biggest stock debut in the local equities market.

Robinsons Retail, the country’s second-biggest multiformat retailer, earlier obtained approval from the Securities and Exchange Commission to issue as much as 484.75 million new primary shares at a maximum price of P86.64 each. The offer consists of up to 461.9 million in base offer and 22.85 million for the overallotment option, based on SEC documents.

This stock debut will bring to public hands as much as 35 percent of the Gokongweis’ retail group, which has 33 years of retailing experience. Since opening the first Robinsons Department store in Manila in 1980, it has expanded into five other business segments, entering into the supermarket business in 1985, the Do It Yourself hardware/home improvement business in 1994, the convenience store and specialty store business in 2000 and the drugstore business in 2012.

Robinsons Retail is led by its president and chief operating officer Robina Gokongwei-Pe and chair John Gokongwei. As of end-June, it had a portfolio of 940 stores nationwide, with 428 stores in Metro Manila, 423 in other parts of Luzon, 55 in Visayas and 34 in Mindanao for a total net selling space of 545,256 square meters.

Deutsche Bank, JP Morgan and UBS are the joint global coordinators, bookrunners and international lead managers for this offering while Maybank ATR Kim Eng Capital Partners is the sole domestic lead underwriter.

Robinsons Retail intends to use bulk of the net proceeds (86 percent) to partially fund capital expenditures in connection with the establishment of new stores and the balance will be used to fund renovation of existing stores and repayment of all outstanding bank loans.

The company had total assets of P23.65 billion in 2012. Net income attributable to equity holders of the parent company in 2012 amounted to P1.2 billion, about 2.5 times higher the level in 2011. This was on the back of P57.39 billion in net sales which went up by 19 percent year-on-year.

Earnings per share in 2012 stood at P2.89 or more than double the level of P1.16 in the previous year.

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SPC keeps Naga power plant deal

By Riza T. Olchondra

Philippine Daily Inquirer

6:46 pm | Sunday, September 29th, 2013

SPC Power Corp. is staying at the helm of the 153.1-megawatt Naga power plant complex in Cebu, being the lone bidder for a new operations and maintenance service contract, according to state-owned Power Sector Assets and Liabilities Management (PSALM) Corp.

“SPC is the winning bidder for Naga,” PSALM president and CEO Emmanuel R. Ledesma Jr. said via text message. “We sent invitations for emergency procurement to a number of companies but only SPC responded.”

The timing seems just enough to keep the power plant complex going since SPC, the current operator, had just wound down its service contract extension. PSALM had extended the operations and maintenance service contract of SPC for six months from March 26 to Sept. 25, 2013.

Earlier, SPC (formerly Salcon Power Corp.) and two other companies—Therma Power Visayas Inc. and RD Corp.—expressed interest in bidding for the Naga facility. PSALM had said representatives of these firms attended the pre-bid conference conducted Sept. 12 at the PSALM Office in Makati City. The state-owned firm said the three interested parties had completed the initial requirements of the bid.

PSALM had called off the original bidding last July 24, citing lack of qualified bidders. At the time, Ledesma had said only one of three prospective bidders that submitted “documentary deliverables” was prequalified.

Industry sources said Consunji-led DMCI Holdings Inc., the Aboitiz Group, construction firm D.M. Wenceslao and SPC Power Corp. (via an operations and maintenance agreement with PSALM) had expressed interest in the facility, having joined the pre-bid conference.

The Naga Power Plant located in Colon, Naga City, Cebu province, consists of two thermal power plants and one diesel-fired power plant that use a combination of coal, bunker C oil and diesel as fuel.

These facilities are the 52.5-MW coal-fed Cebu Thermal Power Plant 1; the 56.8-MW Cebu Thermal Power Plant 2; and the 43.8-MW Cebu Diesel Power Plant 1 (consisting of six 7.3-MW diesel-fed power units).

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Tags: Business , Energy , News , power industry , SPC Power Corp.

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SPPI, sister firm plan to hold IPOs

By Amy R. Remo

Philippine Daily Inquirer

6:45 pm | Sunday, September 29th, 2013

Science Park of the Philippines Inc. and sister firm Pueblo de Oro Development Corp. are considering holding their initial public offerings within the next two years, according to a top company official.

Rommel M. Leuterio, president and COO of SPPI, said that while both firms were highly qualified to list on the Philippine Stock Exchange now, they opted to wait for a more opportune time to enable investors to see the company’s sustained growth.

The plan is to conduct the SPPI offering first, to be followed closely by that of Pueblo de Oro.

He said these companies could not be charged of “chain listing” since SPPI was not deriving 50 percent of its income from the property firm given the strong performance of its industrial estate business.

SPPI, through Regatta Properties Inc., holds a 54-percent stake in Pueblo de Oro. The remaining 46 percent is held by Bacon Property Ventures Inc.

Leuterio did not disclose the amount the said companies’ were planning to raise but noted that for an IPO to be meaningful, it had to generate at least P1 billion.

For this year, SPPI expects its net income to hit P900 million, from the P600 million it registered in 2012, on the back of increased demand for industrial estate spaces from foreign locators.

“Our primary market are investors from abroad who are looking for at least 15 hectares to 25 hectares. A lot of Japanese firms, for example, are looking here. A lot of big players have already expressed interest to locate in our latest industrial estate, the Light Industry and Science Park IV, but we can’t say yet who they are,” he said.

SPPI is investing P4 billion to develop the 260-hectare LISP IV, which may be completed in three years.

SPPI is the leading industrial estate developer in the Philippines with 800 hectares that are developed, under development, and/or being managed, spread out in six strategic locations in Luzon and Visayas. Two are in Batangas, another two in Laguna, one in Bataan and one in Cebu.

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PH still in the middle of a stock upswing

The Philippines is still in the middle of a stock market upswing backed by an “economic supercycle” that could support the local stock barometer’s rise to 8,000-9,000 by 2014, the chief of BPI Securities Corp. said.

In an investors’ briefing on Saturday, BPI Securities chief executive Michaelangelo Oyson said the Philippines was in a “golden era” marked by strong foreign exchange levels, a healthy government fiscal position, a robust banking system and a resilient consumer sector.

“We’ve never seen this happen in our lifetime: GDP (gross domestic product) growth of at least 7 percent in the next few years is a possibility, not just a hope,” Oyson said.

Unlike other peers in the region that are having trouble with their external balance sheet like Indonesia, Oyson said the country was getting a big boost from the business process outsourcing (BPO) and overseas Filipino sectors, which respectively bring in inflows to the tune of $20 million and $60 million daily.

“The stock market basically prices in the economic cycles six to nine months before. In the case of the market, investors in the Philippines are wondering whether 6.5-6.8 percent (GDP growth) is something that can be exceeded because if not, there won’t be an upside on the price,” Oyson said.

“But if the Philippine economy grows by over 7 percent, the stock market is going to fly because more and more foreign investors are going to invest in the Philippine stock market,” he said.

For those who are wondering whether the party is over, Oyson said local equities were still “in mid-cycle. We’re not in late cycle.” By yearend, his fearless forecast is that the PSEi will be back to the 7,000 levels before climbing new heights next year.

Mid-cycle or the “inflationary stage” is marked by strong growth in GDP, corporate earnings and credit although policymakers are watchful of inflation threats, Oyson said. This is seen as distinct from a “late cycle” when growth in all these indicators is decelerating or a “recession stage” when all these indicators are on a decline.

“Every stock market crisis is always preceded by tightening liquidity in the market,” Oyson said, adding this was not yet the case in the country. As such, he said the outlook was still bullish on local equities except in the near-term period when pronouncements from policymakers in the United States, China and even India would have ripple effects on the global economy.

“Foreign funds will continue to decide the near-term outlook for the stock market and we can’t hide from that,” he said.

For instance, Oyson said the risk of the US Federal Reserve switching off the liquidity faucet in the next few weeks and months had yet to be fully priced in. “I keep on telling investors that (US Fed Chair Ben) Bernanke will determine whether it’s going to be a merry Christmas for us.”

“In 1994 when the Fed switched off the liquidity faucet, the market fell by 24 percent. Using today’s numbers, that’s 5,800. We reached that level a couple of weeks ago then moved back to 6,300-6,400. If Bernanke speaks in the next few weeks, there’s risk of the market going back to that level again,” Oyson said, adding, however, that any retreat would open up an opportunity to load up on Philippine equities.

On the other hand, he said Chinese Premier Li would determine whether the mining firms of the world would make money or if the commodity cycle would improve.

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UK firms plan to expand in PH

By Riza T. Olchondra

Philippine Daily Inquirer

6:43 pm | Sunday, September 29th, 2013

Big names in the Philippine mining and energy sectors are in discussions with British firms offering a range of products and services from consultancy to power plant safety equipment as well as renewable energy technology.

Representatives of CiDRA Corporate Services, Lloyd’s Register and TSORS Ltd. said they have had firm talks with the likes of Pangilinan-led Philex Mining Corp., Ramos-led Atlas Consolidated Corp., First Gen Corp. and Energy Development Corp. (EDC), AG&P and oil giant Shell.

“We’re expanding into Southeast Asia. We see the Philippines as a big part of that expansion plan,” CiDRA managing director for Pacific Rim Michael M. Murphy said at a briefing on the sidelines of PowerTrends, an energy expo in Pasay City.

About 65 percent of the world’s copper is processed through CiDRA products and services, which enable mining companies to improve efficiency at mineral ore processing plants as well as tailings dams. There are similar applications for the energy sector such as improving fuel pipeline flows and safety, Murphy said.

Lloyd’s Register Asia general manager Lalit Kumar said his company was leveraging on its expertise in third-party inspection for the maritime industry in order to ease logistical work for clients in the energy business. AG&P, First Gen and Shell are among those that Lloyd’s Register were in contact with, Kumar said.

TSORS, meanwhile, wants to sell its patented equipment for converting wheat straw into charcoal and energy (via biomass installation). There are existing technologies using rice straw, husks, and wood chips but TSORS representative William Howe said several local firms have expressed interest in distributing the UK company’s technology locally.

Others in the UK delegation were Arup, Gilbert Gilkes and Gordon (returning to the Philippines since its last sale in the 1980s) and Lucy Switchgear.

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Davao del Sur bank goes under receivership; laborers, store owners left hanging

By Orlando B. Dinoy

Inquirer Mindanao

4:27 pm | Sunday, September 29th, 2013

DIGOS CITY, Davao del Sur, Philippines – Hundreds of depositors here have been trooping to the Rural Bank of Hagonoy Inc. in Barangay (village) Guihing in Hagonoy, Davao del Sur for two weeks now in the hopes of withdrawing their hard-earned money but went home without getting a centavo.

Loloy Diabordo, Hagonoy town information officer, said most of those wanting to withdraw money were small time depositors – mainly laborers or sari-sari store owners.

“What greeted them was a large-sized notice that the bank is now under receivership by the Philippine Deposit Insurance Corp. and that they could not just withdraw their money until due diligence had been conducted,” Diabordo said.

Diabordo said among the bank’s larger depositors was the Parents-Teachers Association of the Hagonoy National High School. He chairs the association but he would not say how much money from the group was deposited with the RBHI.

RBHI, chaired by businessman Felix Maceda, was founded in February 1974 and was among the pioneering banks in Davao del Sur.

But two weeks ago, the bank was found insolvent and taken over by the PDIC.

“It has gone bankrupt but we were not aware. It continued operation up to the last minute,” Diabordo added.

The closure of the RBHI, the total deposits of which was still being determined, nearly triggered massive withdrawals at the Rural Bank of Digos Inc. (RBDI) on the depositors’ belief the two banks had the same owner.

But Giovanni Gino Gabriente, vice president of RBDI here, said their clients had nothing to worry because the said bank is not an affiliate.

Gabriente also said RBDI’s financial status has remained sound and has been consistently cited as a well-managed bank by the Land Bank of the Philippines.

“Recently, RBDI received yet another recognition from LBP for being financially stable,” he said.

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