Wednesday, December 31, 2014

What's Ahead In 2015?


Here we are, the first day of 2015, thinking about what's ahead this year. There's no doubt about it, 2014 was a good year for most stock investors and we hope you got your share of the pie.


The big standouts to me in 2014 were the mega drop in oil prices and the fact that gold prices have lost two years in a row. The last time that happened was in 1997 – so what's ahead in 2015?


I think that 2015 will offer some amazing opportunities for smart, knowledgeable investors. The key to trading this year is to go with the flow and don't fight the market. I don't know of any market expert who, in January of last year, forecast a 40% drop in oil prices. I'm not sure I heard anyone predicting that gold prices were going to have back-to-back losses two years in a row.


What does that tell you?


The investors or gurus who hold fixed beliefs and feel compelled to defend their market opinions are doomed. Investors who hold rigid market opinions in 2015 are not going to fair well and enjoy positive returns. That's just my opinion, and I reserve the right to change it at any time.


Here is another timeless piece of advice for 2015:


Don't over think the market. What I mean by that is, keep it simple. Let's look at the facts: the market can only do three things, it can go up, it can go down and it can go sideways. It doesn't get much simpler than that.


For sure, I don't know what's going to happen in 2015. I have some ideas, but quite frankly they are just ideas. The market will tell you what it wants to do. All you have to do as an investor is listen to the market as it will tell you where it's heading.


The best way I have found to listen to the market is using our very own MarketClub Trade Triangles. Remember, Trade Triangles have no feelings and no skin in the game that they have to defend. Our Trade Triangle technology simply reports on how the market is acting, your job as an investor is to trade on the mathematical probability that the Trade Triangles will put the odds on your side and get it right over time.


So here's my prediction for 2015 and I can guarantee that it will be 100% correct. The markets will move. That's it, it couldn't be simpler and I know I am going to be right.


So here's wishing every MarketClub member and every friend of MarketClub the very best in 2015, every success.


Adam Hewison

President, INO.com

Co-Creator, MarketClub



news

Tuesday, December 30, 2014

Last Day - MarketClub Holiday Membership Rate


Today is it! It's the last day join MarketClub during our MarketClub Special Holiday Promotion. *This offer is available for new MarketClub Members Only*


Now is the time take hold of your own financial future. With the right trading tools, it doesn't have to be intimidating or complicated. Treat yourself and your portfolio to a gift that could make your 2015 incredible.


What is MarketClub and how can it help you?


MarketClub is an online advisory service that was designed to help you grow your portfolio, protect your profits, and provide you the tools you need to make educated trading decisions.


We'd like you to try all of the trading tools MarketClub offers for 30 days for only $8.95. You'll have unlimited access to our entry and exit signals, scanning tools, portfolio alerts and more.


If you decide that MarketClub isn't what you are looking for, simply call us and tell us so. You won't be charged another dime. However, if you decide to stay after the first 30 days, you'll be renewed at a Special Holiday Rate for 90 additional days of access. This reduced rate saves you 40% off of a regular Quarterly MarketClub Membership.


Find out more about the trial period and Special Holiday Rate .


We hope this next year will bring you great health and happiness and we hope MarketClub brings you tremendous prosperity.


Remember, this offer is only available until the the clock strikes at midnight!


Happy New Year,


The MarketClub Team

support@ino.com



news

US stocks follow European equities lower


Wall Street stocks Tuesday finished lower, following European markets downward after political turmoil in Greece revived worries about the eurozone. AP PHOTO/RICHARD DREW

Wall Street stocks Tuesday finished lower, following European markets downward after political turmoil in Greece revived worries about the eurozone. AP PHOTO/RICHARD DREW



New York–Wall Street stocks Tuesday finished lower, following European markets downward after political turmoil in Greece revived worries about the eurozone.


The Dow Jones Industrial Average lost 55.16 points (0.31 percent) to fall below 18,000 at 17,983.07.


The broad-based S&P 500 dropped 10.22 (0.49 percent) to 2,080.35, while the tech-rich Nasdaq Composite Index fell 29.47 (0.61 percent) to 4,777.44.


Equity markets in Britain, France and Germany each fell more than 1.2 percent after Greece’s Prime Minister said a snap election for president planned for Jan. 25 would determine whether the country leaves the eurozone.


US consumer confidence rose in December, while home-price increases were more modest in October, data showed.


Analysts said trade was limited ahead of Thursday’s New Year’s holiday.


“Basically, the volume is light and there is no specific theme that is driving the stock market,” said Hugh Johnson of Hugh Johnson Advisors.


“It’s more or less just trend-less and volatile. I wouldn’t attach much significance to what’s going on today.”


Civeo, which provides workforce accommodations to oil and natural resources companies in Canada and Australia, sank 52.6 percent, citing the weak oil-investment environment. Civeo projected 2015 revenues of $540-$600 million, much below the $817 million forecast by analysts.


Real-estate investment trust American Realty Capital Properties rose 7.4 percent after activist investor Corvex Management disclosed a 7.1 percent stake in the company and said it would press for changes to boost shareholder return.


Bond prices fell. The yield on the 10-year US Treasury fell to 2.19 percent from 2.21 percent Monday, while the 30-year dipped to 2.76 percent from 2.78 percent. Bond prices and yields move inversely.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Is The Ruble Meltdown Over?


Lior Alkalay - INO.com Contributor - Forex


The 16th of December will be remembered by investors across the globe, and Russia specifically, as “Black Tuesday;” a day when investors got a quick and unwelcome reminder of the 1998 crisis during which Russia was bankrupted. On Black Tuesday, the Ruble tumbled by 21.1% in less than a day and hit 78.51; Credit Default Swaps (CDS) for 5 years have priced in a 8.8% chance for a Russian bankruptcy. Black Tuesday was, simply put, an utter meltdown; investors were in a panic, Russians were running to the banks and the risk of a total collapse of the Russian economy hung in the air. Yet two weeks later, as some of the chaos from that Black Tuesday began to dissipate, some stability has emerged and with it the Ruble has regained some lost ground. The two questions which beg to be asked and answered; Is it the calm before the storm or perhaps a step toward stability? As we attempt to answer these questions we will also, hopefully, shed some light on the Ruble’s possible trajectory as a consequence.


What Ignited the Chaos?


Although it is still debatable as to what exactly was the last straw, there are clearly two very big contenders. The first was Rosneft, the Russian oil giant, was effectively bailed out by the Russian State through the tapping of the country’s emergency reserves.


Then there was the morning of December 16th after the Russian central bank surreptitiously, abruptly and unexpectedly hiked the benchmark rate from 10.5% to 17% in the overnight hours. Shortly after the rate hike, investors began a big Russian exodus; as a result, all bets were off and the Ruble quickly lost altitude. Why have these two events resulted in hysteria? It’s not perhaps what they are prima facie, but rather what they mean. Consider that Russia’s corporates have foreign debt liabilities of $600 billion and Russia’s emergency fund only amounts to $418.88 billion (including its Gold reserves) and of that emergency account a portion of those funds are earmarked for pension payments. Thus the idea of the State taking on Russia’s corporate debt at this particular time seems like a highly risky move which will undermine the finances of the Russian government, especially in light of the fact that Russia’s corporate debt is more than the government’s emergency funds. Furthermore, if you take into account the collapse in Oil prices then it’s hard to imagine what other investment could pump up those reserves. As to the other event, the rate hike to 17% was perceived as one step ahead of capital controls and that is what compelled investors and Russian oligarchs to move their holdings abroad in a massive capital flight.


Capital Controls De Facto


So what has happened since that day? The Ruble has stabilized for now at 55.43 and that is thanks to two major policy “acts,” though neither of which are in line with free market norms. Firstly, the Russian government has literally forced all Russian exporters (namely, its oil and gas giants) to convert all their Dollar income and holdings into the Ruble, thus encouraging Ruble demand. The second “act” (which sounds more like a threat than anything else), is for the Russian central bank to place representatives on the trading floors of the big banks to monitor and determine who exactly are the big sellers of the Ruble during trade (at least as was reported by the press). This might be, according to the Financial Times, a “gentle” threat to Ruble sellers that it is no longer legitimate to sell Rubles in the billions. Although those two unconventional acts are not official and the Russian government continues to deny that it will impose capital controls, let there be no doubt, both of these acts amount to de facto capital controls.




Image courtesy of DBReserach.com .


Is the Worst Over?


Indeed, the Ruble has stabilized in the aftermath of those two measures and after the Russian central bank publicly announced it would help Russia’s corporates to service their debts. The other two measures or capital controls de facto ensure that the selling pressure on the Ruble from within Russia will be limited. With capital controls de facto in place in Russia and with short term debt covered it seems that, for the very short term, the worst for the Ruble is over. However, with risks still high the Ruble, rather than being bullish, moves to a range bound of between 50 and 61. Can this range last? In the near term, it will largely depend on Oil prices; another plunge and this time the storm may not end so quickly. And as for the long term? With still roughly $120 billion in corporate debt needing to be covered next year it is reasonable to believe that a wave of defaults could be ignited over the next few years and that this eventuality will constantly loom over the Ruble. Moreover, the temporary halt in Oil’s collapse may soon resume. And, finally, if we were to follow one big index that embodies all that is wrong with Russia it could be Russia’s 5 year Credit Default Swaps. As seen in the chart below, it is above the 5% threshold which is more or less Russia’s “normal” level (under sanctions), it is only when CDS’ return to 5% that one can fully claim that the Russian crisis is constrained alongside the Ruble. Until then, hold tight; this might be the calm before the storm.



Look for my post next week.


Best,

Lior Alkalay

INO.com Contributor - Forex


Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.



news

‘Blip’ causes gasoline, kerosene prices to rise


 AP FILE PHOTO

AP FILE PHOTO



MANILA, Philippines–Local fuel companies raised prices on the last week of the year in what industry observers described as just a “blip” since they generally believe oil prices will continue to slide well into 2015.


Petron raised its gasoline price by 30 centavos per liter and kerosene by 10 centavos a liter at 6 a.m. Tuesday. There was no change in diesel prices. Shell, Chevron and Seaoil raised their gasoline and kerosene prices at the same level earlier at 12:01 a.m.


The price movements brought the total year-to-date net decrease in fuel products to P11.54 per liter for gasoline and P13.48 per liter for diesel.


Analysts said that despite the slight hike, prices would likely remain below $70 a barrel or drop even lower, unlike at the beginning of 2014 when prices were at the $100-barrel level.


They said it would take many producers curbing output or leaving the market before the supply dives low enough against demand to push prices up.


Investors might also suspend new oil well drillings, but as long as they have cash flow, they will keep pumping wells they developed over many years, even if prices are down.


On the plus side, the overall drop in prices has virtually stopped oil smuggling and eased the overall cost of doing business due to cheaper transport costs, among other things.


Energy Secretary Jericho L. Petilla said in an interview that reports of smuggling were down lately. He hoped investors would thus focus on new energy projects which could be in production by the time commodity prices went up again.


Independent Philippines Petroleum Companies Association and Eastern Petroleum Corp. president Fernando Martinez said that now was the time for oil firms to think about stockpiling inventory and investing in facilities that could help them be on the upswing when oil prices finally climb steadily.


Energy Undersecretary Zenaida Monsada said, “While we are happy for consumers because they can spend more with the low oil prices, we also hope oil firms will think long term and invest in facilities while the cost of doing business is low.”



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Get your money back from airline, passengers told


MANILA, Philippines–Demand compensation directly from the airline, and not from the Civil Aeronautics Board (CAB), a CAB official has advised passengers inconvenienced by the delays and flight cancellations at the Ninoy Aquino International Airport (Naia) Terminal 3 during the holiday rush.


“It would be easier and faster to demand compensation directly from the airline,” according to Wyrlou Samodio, chief of the CAB legal department, who described the agency as a quasijudicial body that penalizes violators in the air transport sector, but has no power to award compensation.


He added, however, that one of the responsibilities of the CAB was to make sure that all aggrieved passengers were duly compensated.


According to CAB Economic Regulation No. 7, passengers denied boarding on domestic flights must be given 10 percent of the value of the unused sector plus P 3,000. For international flights, they should be given 100 percent of the value of the unused sector plus P5,000, or its equivalent in other currencies.


The government body is leading a probe of Cebu Pacific Air (CEB) over the holiday chaos at Naia 3 on Dec. 24 when its undermanned counters led to an overflow of passengers, some of whom missed their flights.


Aside from the CAB, the Manila International Airport Authority and the Civil Aviation Authority of the Philippines are looking into CEB’s liability in the airport fiasco.


Samodio said the CAB had already requested CEB to provide them with the documents on the passengers it had already compensated. He added that 40 passengers had lodged official complaints against CEB over their airport ordeal.


Unmanned counters, air traffic congestion and an overcrowded terminal were among the reasons cited by CEB for the chaotic situation at the airport on Dec. 24, 25, and 26.


In Congress, Bayan Muna Representatives Neri Colmenares and Carlos Zarate said they would file a resolution next year asking the country’s aviation watchdog to explain why it had failed to protect air travelers from excessive fares and the atrocious service of airlines.


In their resolution, the party-list representatives said the problems faced by passengers in the Cebu Pacific fiasco–delayed or canceled flights, expensive rebooking fees, and deceptive marketing practices–had become a “common occurrence” at the airports.


The lawmakers said the CAB had to explain why it could not keep the industry players in check when they had been reduced to only two main participants–Cebu Pacific and Philippine Airlines.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Property sector remains bullish, says UBS


The Philippine property market is on a roll, with land values already exceeding peak levels prior to the 1997 Asian financial crisis for the first time, but have yet to reach worrisome levels, an economist from investment bank UBS said.


In his Dec. 18 research note “Philippines By the Numbers (2014),” UBS economist Edward Teather said that in the local asset market, the property sector had picked up and had yet to show signs of stopping.


“Real price gains in Manila property prices have been less buoyant than those on the equity market and real Manila property prices do not look stretched,” Teather said.


He also noted that the local equity market had held up well relative to peers even as the global markets deteriorated in late 2014. The Philippine Stock Exchange index rose by 22.8 percent to close at 7,230.57 this year.


Teather said stock markets and other asset prices were among the best forward-looking indicators for economic growth and profits. He noted that a sustained rise in stock markets could also have significant effects on consumption and investment, given its wealth effects on consumers and the lowering of the cost of capital for listed firms.


Property prices can have a similar effect, with residential property valuations particularly relevant for household balance sheets, he added.


“Philippine financial markets appear to have tempered their expectations of strong growth in the coming quarters as equity markets have stabilized,” Teather said.


Based on an earlier report by property consulting firm Colliers Philippines, land values in the Philippines had already exceeded their peak for the first time since the 1997 Asian financial crisis. This was after the Government Service Insurance System (GSIS) sold two lots in Fort Bonifacio, measuring 1,600 square meters each, to privately held firms Focus Palantier Inc. and Goldenwill Inc.


Focus Palantier won the bidding for the first lot for P500,000 per square meter while the latter bagged the second lot for P458,000/sqm.


Also considering Ayala Land Inc.’s purchase of the abandoned Jaka tower in Makati’s central business district (CBD), Colliers estimated that average prices in Makati and Fort Bonifacio CBDs had appreciated by 18.7 percent and 38.2 percent, respectively, in the third quarter of 2014 compared to the levels in the second quarter.


The property boom in the country in recent years has been supported by a regime of record-low interest rates, rising household income and a stable banking system alongside improved consumer confidence.


Teather said as a sector of the local economy, construction was small. However, he said construction spending by all sectors of the economy meant that construction was an important part of investment expenditure.


“Base effects are likely exaggerating the recent pickup in construction but given that we expect the flow of easy money to continue relatively unabated into early 2015, before US yields start pushing up market rates, there is scope for near term strength to persist,” Teather said.


For overall investment growth, the UBS economist expects the easy credit environment to be supportive this 2015 but less so than in 2012-2013, citing headwinds from the peaking credit cycle.


“The investment to GDP (gross domestic product) ratio has trended higher and we expect that this should continue, reversing the decline of the last decade. The risk is that investment growth has been construction-centric and may prove vulnerable to higher interest rates and when these rise from extraordinarily low levels,” Teather said.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Philippine stock market expects 7th straight year of growth


It has been a year of volatility and of a great deal of local and external challenges for the country to remain on a macroeconomic sweet spot but in the end, the bulls still prevailed over the bears.


For the sixth straight year, the local stock barometer ended on a higher note, rising by more than 22 percent. After slipping into bear territory in 2013 following the US Federal Reserve’s announcement of the tapering of its monetary stimulus, the Philippine Stock Exchange index (PSEi) bounced back into the realm of the bulls this year.


For 2015, the PSEi will likely continue its ascent to the range of 7,500 to 8,000, according to Jonathan Ravelas, chief strategist at the country’s largest lender, Banco de Oro Unibank.


Ravelas’ forecast is based on a price-to-earnings (P/E) ratio of between 18x and 20x as corporate earnings growth accelerate to at least 15 percent.


By the end of 2015, he sees the PSEi closing at 7,800, suggesting an upside of more than 500 points or at least 7 percent over this year’s level.


“While higher interest rates do not bode well for the equities market as these would translate to higher financing costs and lower profits, BDO believes the [rate hikes] may have already been factored in by the market. The country’s strong fundamentals and healthy corporate earnings will continue to support the local bourse and will catch up with its high valuations,” Ravelas said.


A P/E ratio of 18x and 20x means investors are willing to buy shares at 18 to 20 times likely earnings for 2015.


“Moving forward, the Philippine economy is seen to post a sustainable and stable growth rate of 6 to 7 percent supported by investments in infrastructure, human capital and the continued pursuit of good governance,” Ravelas said.


“While geopolitical risks, elevated inflationary pressures and higher interest rates threaten the country’s growth story, the Philippines’ sound fundamentals should allow the country to weather these adversities,” he added.


Local stock brokerage AB Capital Securities Corp. also remains bullish for 2015 even as it is expecting further volatility given the uncertainty in the global environment. AB Capital’s index target for 2015 is 7,700 based on an assumed P/E ratio of 18.9x and price to book ratio of 2.76x, which it noted was near the three-year average.


After the unwinding of the US Fed’s monetary stimulus via aggressive bond-buying activities, global markets are now guessing how soon the US central bank will raise interest rates. Recently, global markets have turned jittery over the collapse in global oil prices.


“For the Philippines, falling oil prices is economically beneficial as our country is a net energy importer with minimal production of oil, natural gas and coal,” AB Capital said.


It noted that in 2013, the country imported 270,000 barrels per day of crude oil (about 90 percent of the total consumption), with 35 percent of the imports coming from Saudi Arabia and Russia. Nevertheless, it said oil prices would likely recover in the second half of 2015.


On external developments, AB Capital expects the US Fed to hike interest rates later than expected, most likely in the fourth quarter of 2015. It also sees a potential contraction in the Russian economy affecting the eurozone trading partners, which in turn may put equities at risk with the possible shift from emerging to developed markets.


While the US is done with its monetary stimulus, Japan is seen to continue boosting liquidity through its own stimulus program, AB Capital said.


In the meantime, AB Capital also warned of heightened domestic regulatory risks in 2015.


Key drivers


For First Metro Investment Corp., PSEi earnings can grow by 11 to 12 percent this 2015 alongside stronger economic growth. Key drivers seen for the new year are government spending and pre-election spending.


But FMIC said a P/E ratio of above 20x would be “unsustainable” unless robust flows tolerate such higher P/Es longer than so far assumed.


“Foreign flows will continue to be driven by developed markets’ central banks and how their policy actions will play in the bond and currency markets,” FMIC said in the December issue of “The Market Call,” a joint publication with the University of Asia & the Pacific.


FMIC noted that the key risks for 2015 would be a power crisis, political noises, US interest rate hike, fund outflows, slower growth in emerging market economies and natural disasters.


Favored sectors


For 2015, FMIC favors the consumer, gaming, power generation sectors and conglomerates with infrastructure exposure.


In the case of consumer stocks, FMIC sees the low-inflation environment and lower oil prices boosting disposable income. “Retailers should be the biggest beneficiary—especially when the port congestion is fully resolved. Early election-related spending which starts in the second half 2015 should provide an additional boost,” FMIC said.


For gaming, the recent opening of integrated resort City of Dreams Manila will likely excite the market, FMIC said. Major concerns, however, include gaining a critical mass to support this market, how fast the mass market will grow given the tighter competition and how resilient the VIP (very important person) or high-roller market will be once Macau’s new casinos open by mid-2015, FMIC said.


On power generation, high energy demand (due pre-election activities and the roll out of infra projects) and higher energy prices given tighter supply conditions (El Niño to limit hydro power generation, 30-day maintenance shutdown of Malampaya).


FMIC also favors conglomerates with infrastructure exposure, anticipating that public infrastructure spending would bounce back from the dismal performance this year. “Also, with the President’s term nearing its end, we should expect its key PPP (public-private partnership) program to be rolled out faster,” it said.


AB Capital, for its part, is bullish on the consumer and power generation sectors. For the consumer sector, the brokerage said that with inflation expected to remain subdued and interest hike delayed, consumer spending on non-oil related items would pick up. At the same time, it noted that the economic integration of Association of Southeast Asian Nations (Asean) starting 2015 would allow free movement of goods and services in the region.


“We see most consumer stocks as fairly priced given current price levels. Despite this, we remain bullish on the sector and advise investors to accumulate positions during price dips,” it said.


AB Capital is bullish on the power sector given the expected tightness in power supply particularly during the second quarter of 2015.


AB Capital has a neutral outlook on banking, property and gaming stocks.


For BDO, Ravelas said favored sectors would be the following:


banking, on the back of sustained loan growth and margin improvements


power, which is seen to benefit from the expected power shortage


construction, which is seen to benefit from the government’s infrastructure spending and the continued growth of the real estate sector food and beverage, demand for which will be boosted by high overseas Filipino worker remittances and the robust business process outsourcing industry


Strong first semester


Possible support for the PSEi next year would be at the 6,250-6,500 levels, equivalent to a P/E ratio of 15x to 16x, Ravelas said.


“The first half of the year is seen to be a period of strength with the index likely to test the 8,000 levels buoyed by stronger first quarter 2015 GDP growth and inflation further slowing to 3.1 percent in January,” Ravelas said.


For the first quarter of 2015, BDO is looking at a 7.5 to 8 percent growth rate.


“2015 will also be a good foreign exchange play, as the expected depreciation in peso would benefit dollar-revenue generating companies such as those in the mining, electronics and oil sectors,” he said.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

With voice of reason, BSP hopes to avert property crash


(Conclusion)


As the entity designated by law to safeguard the health of the local financial system, it is completely understandable—and expected—that the Bangko Sentral ng Pilipinas will be worried about any crisis that may stem from a reversal of fortunes in the red hot Philippine property market.


Two decades ago, the BSP was at the forefront of helping defend the economy from the effects of the East Asian financial crisis that swept across the region and hit the property market particularly hard.


Indeed, no less than BSP Governor Amando M. Tetangco Jr. warned —as early as two years ago—that many of the market upheavals he had experienced in his long central bank career started with the popping of a property bubble.


Because of this, the BSP took the initiative of heading off what could be the beginnings of a speculation-induced reversal in the real estate market.


The BSP said it would soon mandate local banks to cap real estate loans at 60 percent of their collateral values, down from the average of 80 percent at present.


At present, banks have the flexibility to lend as much as 90 percent of a collateral’s value, depending on the asset class. The new policy, however, will cap loanable values across the board at 60 percent.


The move is part of a broad measure of reforms that the BSP will roll out over the near term to buttress the Philippine banking system from the effects of any looming market volatility.


The tighter credit policy will also translate to higher interest rates as banks demand higher returns to compensate for their higher risk exposure to real estate loans.


Together with the more stringent collateral requirement, Tetangco recently announced that universal banks with over 100 branches must boost capital to at least P20 billion from the present floor of only P5 billion.


In the meantime, commercial banks with more than 100 branches must increase their capital levels to at least P15 billion, which marks a sharp rise from the present mandated level of only P2.4 billion. Similarly, smaller thrift, rural and cooperative banks must also boost capital levels.


A senior BSP official, speaking on condition of anonymity, said this policy shift was being implemented by regulators who were worried about banks’ traditional collateral-based lending mind-set.


“That’s how crises happen,” the official explained. “Banks lend based on the value of their real estate collateral which everybody thinks is worth a certain amount today, but is suddenly worthless the following day.”


Ultimately, the goal of regulators is to cool the booming real estate market and guide it to a soft landing, rather than allow runaway market forces to bring it to a crash.


Nonetheless, some pain in the property sector is inevitable, given present trends.


“Land is getting very expensive especially with some of the recent purchases,” said Colliers International consultant Chris Wells, referring to the recent sale of Government Service Insurance System lots in Bonifacio Global City, Taguig at a record P500,000 per square meter. “At these record prices, there may be a little bit more risk than normal.”


But Wells feels that any threat to the Philippine property market will target specific sectors instead of the entire industry.


“I’m bullish on the commercial and industrial segments, the reason being there’s so much more growth opportunity in the BPO sector, and commercial space is not being built as quickly as residential space,” he said. “I’m more bearish on the residential sector. The very high end is OK because there’s not as many projects available.”


Asked which segment he is worried about, the Colliers official replied: “The projects in the P10-15 million peso range, not the ultra luxury, upscale market.”


“This is a supply and demand issue,” he explained. “There aren’t as many end users in the market and it’s much more of investors who are going in [as buyers]. So you’re having not as many people renting them at the end of the day. It is quite popular for many to purchase it and not rent it out, and just see it as a capital asset.”


“I do think that, in the Philippines, there will be some kind of market correction,” Wells warned. “It’s just a question of how much.”



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Market on holiday break


popular .



Senator Grace Poe-Llamanzares #InquirerSeven


#InquirerSeven Most Talked-about Newsmakers of 2014




Obama vacation


Obama golf game upsets Hawaii wedding plans




FILE PHOTO


Air travelers at Naia advised to rebook or cancel flights during Pope Francis’ visit






Writing '-30-'




Zamboanga quake


Magnitude 6.1 quake rocks Sulu Sea off Zamboanga City, aftershocks expected




In this Oct. 9, 2002 file photo, adult actors Dasha and Eric Masterson prepare for a scene for the Vivid Video adult film "The Alley," in Chatsworth, a part of the San Fernando Valley within Los Angeles. In Los Angeles County, for years the Porn Capital of the Country, records reveal only 20 permits to make adult films have been acquired in 2014 so far. (AP Photo/Mark J. Terrill, File)


Alert issued after likely HIV porn set infection




2015


Will you be lucky in the Year of the Sheep?






Donaire camp eyes Macau as comeback venue



videos





2 Bocaue fireworks stores shut down for violations






40th MMFF Awards Night






2014 MMFF New Wave






PM leads remembrance ceremony marking 10th anniversary of tsunami






Thousands protest in Mexico City over missing students






The local stock market is on holiday break Wednesday in celebration of the New Year.


On Monday, the last trading day of 2014, the Philippine Stock Exchange closed 22.76 percent higher for the year at 7,230.57 points.


This marks the sixth year of ascent for the local stock barometer.


PSE officials closed the year with the traditional last trading day festivities on the trading floor on Monday.


Trading at the stock market will resume on Monday, Jan. 5, 2015.






  • Tags:


  • Business


  • holiday break


  • Stock Market




Related Stories:



  • Australia investigates ‘paedophile’ father in Thai baby scandal

  • Bangladesh ferry owner faces charges in sinking

  • Bangladesh ferry owner faces charges in sinking

  • Bangladesh ferry owner faces charges in sinking

  • Bangladesh ferry owner faces charges in sinking

  • Bangladesh ferry owner faces charges in sinking

  • Bangladesh ferry owner faces charges in sinking

  • Bangladesh ferry owner faces charges in sinking


Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94





seo tools

Biz Buzz: Revenge


So there’s this gaudy society seeker who insists to his A-List targets that he now disdains fast-food restaurants. So much so that he even famously ordered his colleagues once never to be seen in such “cheap” places lest his reputation with the in-crowd be sullied.


He then proceeded to shame one of his top generals for wearing low-end shoes to a fancy dinner and repeatedly called him a serial cheapskate (we weren’t sure if he was kidding or not, but it certainly made people around them squirm with discomfort).


Recently, this very same general leased out his perfectly located property right across Mr. Gaudy’s office to an establishment that paid handsomely.


What kind of establishment? None other than a fast-food joint. It would seem that “revenge served cold” is on the menu for this particular fast-food chain branch. Daxim L. Lucas


‘Carmageddon 2’


Holiday travel can be a major hassle when one considers the volume of travelers wanting to, first, head to the provinces and then return to the metropolis at the end of the long break.


And it doesn’t matter if you’re traveling by sea, air or land nowadays. The story is the same: holiday congestion is here to stay.


So in the case of the Metro Pacific-run North Luzon Expressway and the Subic-Clark-Tarlac Expressway, its managers have decided to put out an early advisory to prevent a repeat of last week’s traffic armageddon that saw motorists stuck in traffic for more than 12 hours in some cases.


“Motorists (traveling on) the NLEx and SCTEx are advised to carefully plan their trips from and back to Manila during the long holidays to avoid the inconvenience of heavy traffic volume along the expressways,” management said.


Volume is expected to peak at NLEx northbound on Wednesday, Dec. 31 and southbound on Saturday, Jan. 3, and on Sunday, Jan. 4.


Tollways Management Corp. (TMC), operator of both the NLEx and the SCTEx, said traffic updates would be posted on the NLigtas app, @NlexTraffic, and at www.tollways.ph.


NLEx Bocaue southbound volume is forecasted to exceed 52,000 vehicles per day from Dec. 31 to Jan 4. This is also 30 percent higher than last year’s volume and as much as 50 percent more than the normal average daily volume of vehicles.


TMC is advising motorists to pack an extra dose of patience, especially if they are traveling from the North to Metro Manila.


Travel safe, and… good luck! Daxim L. Lucas


‘Sobrepeña special’


People have many reasons to not like Robert Sobrepeña, but the fruitcake that he and his family give out during the Christmas holidays is definitely not one of them.


Called “Fruited Bliss Cake,” it is not one that the recipient will recycle and give out to another hapless person, but one that is coveted and savored and definitely kept for consumption.


Prepared and baked the traditional way, the Sobrepeñas’ “Fruited Bliss Cake” is vacuum packed to retain the full flavor courtesy of the generous use of rum, nuts and glazed fruits. Handled carefully, the fruitcake can last up to a year.


Bob and his wife Lisa have been producing the “very special” fruitcake from their home kitchen for the last 32 years and they are proud to say that the fruit cake “with everything” is “not just any other fruit cake” as their friends and family gleefully attest to.


To make the most of the experience, the couple suggests that the fruitcake be served with thin slices of edam cheese and paired with a glass of wine or a cup of coffee. Tina Arceo-Dumlao


DFA reassurance


The Department of Foreign Affairs on Tuesday reassured the public that the issuance of passports for Filipino travelers will continue despite the reported expiration of a contract between the department and a firm for the printing of so-called data pages on the Philippine travel document.


In fact, the DFA wrote Tuesday that “there is no existing deal between the department and a private entity” that would expire by the end of the year (that being tomorrow).


“Technical support is in place for the ePassport system and it will continue during the lifetime of the said system,” the department said, even as it reassured the public that “the technology being used is not 1990s-era programming.”


“A special software is being used for the ePassport system which is current and secure,” it added.


In his letter, Foreign Affairs Undersecretary Rafael Seguis also pointed out that manual intervention on the data page was not possible.


“The software being used was designed to secure personal data from the point of capture to the personalization site,” he said. “The DFA assures (the public) that there will be no service disruption in the issuance of passports after Dec. 31, 2014.” Daxim L. Lucas


E-mail us at bizbuzz@inquirer.com.ph. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Office space rental rates up amid robust demand


Rental rates for prime office space within Metro Manila’s key commercial districts increased in the third quarter amid robust demand mainly from business process outsourcing or BPO firms, according to global property consultancy firm Cushman & Wakefield.


“Manila’s average asking rents continued to rise in the third quarter of 2014, increasing by 1.6 percent to P781 per square meter per month. Makati CBD (central business district) and BGC (Bonifacio Global City) retained the highest average asking rents across all districts as office interest remained high in the aforementioned districts,” Cushman & Wakefield noted in its Marketbeat Office Snapshot for Manila for the third quarter of 2014.


The average direct asking rental rates during the second quarter stood at a lower P769 per square meter a month.


In particular, higher rates were posted at the Ortigas CBD (P640 per square meter per month from P600 in the second quarter) and Quezon City (P720 per square meter per month from P700 previously) in the third quarter.


At the Makati City CBD and its fringe areas, the average rental rates for prime and grade A office space amounted to P1,049 per square meter per month in the third quarter, unchanged from the previous quarter.


Over at BGC and McKinley Hill in Taguig City, rates remained at P895 per square meter per month, while the monthly average rent worth P600 per square meter down south at Filinvest City and Madrigal Business Park was also unchanged quarter-on-quarter.


Despite higher average rates, leasing activity across Metro Manila’s business hubs was stable during the July to September period, Cushman & Wakefield said.


“Two new office developments in the third quarter of 2014, namely, Rockwell Business Center Tower 3 in the periphery of Ortigas CBD and the office component of SM Aura in BGC, added 28,400 and 40,424 square meters, respectively, to the total Manila prime and grade A office stock. Despite the new completions, the overall average vacancy rate in the quarter was observed at 3.4 percent as stable leasing activity supported positive take-up of existing and new office buildings,” Cushman & Wakefield noted.


In the third quarter, the overall vacancy rate was at 1.1 percent in Alabang, 1.4 percent in Makati, 3.6 percent in Quezon City, 5.3 percent in Ortigas, and the highest was 5.7 percent in BGC.


As for the overall direct net absorption, about 77,301 square meters were recorded in the third quarter, of which the bulk were in Ortigas (64,250 square meters) and Makati (10,533 square meters).


“The leasing market remains largely driven by the entry and expansion of the offshoring and outsourcing (O&O) firms,” Cushman & Wakefield explained.


For instance, Cushman & Wakefield cited that US financial services firm Depository Trust & Clearing Corp. took up about 3,200 square meters at an existing Makati facility, while Maersk Global Service Centers Ltd. recently signed to lease about 8,900 square meters at a new building near the Ortigas CBD.


As the year 2014 comes to a close, Cushman & Wakefield sees supply pressure muting rental growth.


“The Manila prime and grade A office stock is projected to grow by 13.6 percent year-on-year by the end of 2014. This figure is expected to continue to rise in the next three years as developers pursue and complete new office projects. The large volume of future prime and grade A office stock should push vacancies across districts upwards and mute rental growth, overall,” it said.


“Despite the significant supply expansion, we should still see office absorption to remain stable in the near and medium term on the back of projected continued growth of the O&O sector. This is reinforced by the healthy pre-commitment levels of upcoming office buildings which should buoy rental rates moving forward,” Cushman & Wakefield added.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Understanding the Basics of Technical Analysis


Whether you are trading stocks or currency, technical analysis is an advanced tool used to try and predict changes in your market and trade accordingly.


At the base of technical analysis is price history. You are studying the price of a currency, it’s up and downs, and looking for an obvious indicator that will tell you when another up or down is coming up. Think of it like trying to learn to read tea leaves to see the future – except there is real science behind it.


Using Charts For Technical Analysis


The most basic tool for technical analysis is your chart or graph. Whether you are looking at a line graph or candlesticks, the Forex trading chart is giving you a wealth of information. First, you can check the support and resistance. These are the points where it seems that the currency pair won’t cross. Is there a certain range in which the currency is moving? When you see a price making sudden movements in that range you can use the support and resistance to predict when it is going to change its direction again.


Trend lines can be used when there is a definitive pattern that you can follow. You can chart the trend line if it is moving in one direction to predict where the price is going to go using indicators.


For example, let’s say you are studying a candlestick chart -which you should as they give you more indicators in one convenient place. This type of chart can help you to find trends that indicate a major reversal is about to take place. One indicator you can look for is what traders refer to as “three white soldiers” which indicate a bullish reversal is pending.


The soldiers are three long white candlesticks in a row. The large body shows signs of struggle as the price jumps during the period of time, indicating that a change in feeling about the vitality of the currency is beginning to occur. Historically, traders believe that change is going to happen right after the 3rd white soldier appears. When you take the time to learn about candlesticks, make sure that you study the shapes of the candles and what they mean in order to best take advantage of their indicative ability.


Other Common Tools Used By Forex Traders


• Stochastic Oscillator: Using a scale of 0 to 100%, you can see if the currency has been overbought or oversold. Traders note that during a strong uptrend the closing price is going to be concentrated in the higher part of the range. Conversely, closing prices will be close to the extreme low in a strong down trend. By charting these two lines produced, you will wait for them to converge as this is a strong signal to trade.


• Relative Strength Index (RSI): The RSI also looks at overbuying and under-buying of currencies expressed in a range of 0 to 100. An RSI of 70 or above shows that the currency is saturated and the price is higher than expected. Oversold currency will show and RSI of 30 or lower.


These are two of the easiest technical analysis tools to learn, as their impact on the market should be obvious. When combined with chart reading, you can get a strong indication of when a pivot is about to take place by looking at the volume of investors interested in that pair.


Understand the Past to Predict the Future


Traders depend on their currency pair to act in the same way time and time again. To do this successfully you have to learn what key indicators were in place right before a major change, and then wait and watch for them to happen again.


All of the technical analysis tools and systems you will find have a basis in studying the historical trend. You can do this yourself by taking the time to look at charts, find the major change points, and then work backwards to see what, if any, indicators where in place. This will take some time as you need to go back and look over a series of currency pair changes in the market, but it will be time well spent once you pick up on the historical signs.


Self Fulfilling Prophecy?


It is also important to remember that technical analysis is subjective. In essence, you are relying on hundreds of traders to come to the same conclusions as you in their technical analysis. For example, with the “three white soldiers”, is it possible that the common knowledge of this indicator is actually causing the turnaround to happen. What if Forex traders where to call a truce on technical analysis for one week? Would the market still move the same, or is our analysis of it causing it to behave the way we expect it to?


Of course that is not going to happen, but you should have in the back of your mind that when charting trends, you are also charting and studying the habits of other traders and trying to predict what they are going to do when presented with the same data as you. This is a part of sentiment analysis, which relates very closely with the way technical analysis works.


Keep it Basic


For traders new to the Forex market, it is recommended that you start with the basics of chart reading and then choose one or two other technical analysis tools that you find helpful, such as one of those mentioned above. If you clutter your mind too much, you will end up over-analyzing and never getting anywhere.


Technical analysis is just one of the tools you are going to learn in the first year of Forex trading, but it is one of the easiest. Once you learn how to read and chart your graphs and pay attention to history, charting your currencies and making trading plans will start to come naturally.


Casey Stubbs is the founder of WinnersEdgeTrading.com which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.



news

Oil companies raise fuel prices slightly


MANILA—The oil companies raised fuel prices Tuesday in what observers described as a “blip” because industry fundamentals still point to a downward trend in prices well into 2015.


Petron raised the price of its gasoline products by P0.30 per liter and kerosene by P0.10 per liter, from 6 a.m. December 30. There was no change in diesel prices. Shell, Chevron, and Seaoil raised gasoline and kerosene prices at similar rates six hours earlier 12:01 a.m.


These price movements, which were attributed to a “correction” in prices in the international market, brought the total year-to-date net decrease in the prices of major fuel products to P11.54 per liter for gasoline and P13.48 per liter for diesel.


Analysts said despite this week’s price hike, prices would likely stay below $70 a barrel or even drop lower compared to the $100-a-barrel level at the start of 2014. They said it would take a lot of producers to curb output or leave the market before supply goes low enough against demand to push prices up. That tends to take a long time with crude oil, metals, and other commodities produced from capital-intensive, long-term projects.


Investors might suspend new oil well drillings, but as long as they have cash flow, they will keep pumping on wells they developed over many years — even if prices are down, according to the analysts.


On the plus side, the overall drop in prices has virtually stopped oil smuggling and has eased the overall cost of doing business due to cheaper transport costs, among others.


Energy Secretary Carlos Jericho L. Petilla said in an interview that reports of smuggling have been largely unheard of lately. He hoped investors would focus on new energy projects which may come into production by the time commodity prices go up again.


The Department of Energy’s Undersecretary Zenaida Monsada said, “While we are happy for consumers because they can spend more with low oil prices, we also hope oil firms will think long-term and invest in facilities while the cost of doing business is low.”



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Monday, December 29, 2014

Old peso bills going out of circulation


MANILA, Philippines–As the new year kicks in, the central bank will start phasing out all peso bills bearing old designs, regulators announced this week.


Starting January 2015, the Bangko Sentral ng Pilipinas (BSP) will begin the yearlong “demonitization” process for all old peso bills with denominations of 5, 10, 20, 50, 100, 200, 500 and 1,000.


These include bills still accepted as legal tender but have been out of production for years such as the green Emilio Aguinaldo five-peso bill and the brown 10-peso bill that has Andres Bonifacio and Apolinario Mabini on it. Both bills were replaced with coins.


Old peso bills, which are still called New Design Series (NDS) notes, will be replaced with New Generation Currency (NGC) banknotes that were released to the public in 2010.


NDS notes were introduced in 1985. Minor changes were made to the designs, but NDS notes have maintained the same look they had three decades after they were released.


By the end of 2015, NDS notes will cease to be legal tender, the BSP said. The public, however, may still have these old notes replaced with NGC notes until the end of 2016.


The move to replace all old peso bills with NGC currencies is part of the BSP’s efforts to ensure the integrity of physical money. NGC notes are manufactured with additional security features that make them less susceptible to counterfeiting. The new bills are also more durable. Lower denominations even have antibacterial properties that make them more resistant to wear and tear.


Local peso bills are still manufactured using paper and other natural fibers, despite the shift of other jurisdictions to plastic notes.


Plastic notes, the BSP said, are much more expensive to produce and fade easier. Plastic money also does not hold up well to being folded several times, making it unsuitable for countries like the Philippines where paper money is often crumpled and placed in pockets.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

PH posted P6.8B in budget surplus in November


The government posted a surplus in November as the decline in spending outpaced the slight drop in revenue collection during the month, the Department of Finance yesterday said.


According to the DOF, a surplus of P6.8 billion was registered in November, 582 percent higher than the P1 billion posted in the same month last year.


Even as revenue collection slipped by 4 percent to P158.2 billion in November from P165 billion last year, expenditures slid by a bigger 8 percent to P151.4 billion from P164 billion a year ago.


November’s surplus exceeded the P6.008 billion programmed for the month.


In January to November period, revenues maintained double-digit growth, posting an 11-percent rise in collections to P1.736 trillion from P1.566 trillion a year ago.


Government expenditures, meanwhile, registered a mere 5 percent increase in the first 11 months to P1.762 trillion from P1.677 trillion last year.


The end-November deficit stood at P26.8 billion, 76-percent lower than the P111.5 billion registered between January and November 2013.


Finance Secretary Cesar Purisima. INQUIRER FILE PHOTO

Finance Secretary Cesar Purisima. INQUIRER FILE PHOTO



The deficit as of end-November was way below the program of P238.294 billion for the 11-month period, reflecting anemic government spending on infrastructure and public services despite robust revenue collection.


For Finance Secretary Cesar V. Purisima, the lower deficit was nonetheless a good thing.


“With the recent Moody’s credit ratings upgrade, as well as improved scores in the Millennium Challenge Corp. scorecard leading to our eligibility for a second compact, one thing is clear: the Philippines is in a virtuous cycle. Prudent fiscal management by the national government keeps us in this sweet spot, reaping rewards and raring to reach for more,” Purisima said in a statement.


In November alone, collections by the Bureau of Internal Revenue went down 4 percent year-on-year to P121.9 billion, but the end-November take was higher by 9 percent year-on-year at P1.22 trillion.


Collections by the Bureau of Customs last November declined by a faster 13 percent year-on-year to P24.7 billion, but the agency kept the double-digit growth during the 11-month period with a haul of P324.6 billion, up 16 percent year-on-year.


The Bureau of the Treasury’s revenues in November decreased by a tenth year-on-year to P3.4 billion, but end-November revenues grew by a fifth year-on-year to P90.5 billion.


“The quick-paced growth of year-to-date revenue leaves even more room for strategic government expenditures. With increased fiscal space to invest in health, education, infrastructure, and other social services, we are able to reap even more rewards for the Filipino people. Such is the virtuous cycle put into motion by this administration’s conviction that good governance spurs good economics,” Purisima said.


As for expenditures, interest payments last November were flat at P18.1 billion, while interests paid from January to November were 1-percent lower at P292.3 billion.


The DOF said end-November interest payments were below program, hence generating savings worth P27.6 billion for the government.


The share of interest payments to expenditures was likewise on a downward trend to 16.6 percent as of end-November, compared with 17.7 percent during the first 11 months of 2013. The DOF attributed the decline to “prudent liability management measures.”


“The continued decline in interest payments, apart from the substantial hauls pulled in by the revenue agencies, significantly expands our fiscal space and enables us to fuel more growth. Credit rating upgrades that respond to the government’s commitment to good governance and sound economic management, for example, lower our borrowing rates and free up more funds for more productive investments,” Purisima said.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

Stocks up, peso weaker on last trading day


The local stock barometer climbed for the sixth straight year in 2014, rising by 22.7 percent to end the year as one of Asia’s best-performing emerging markets.


The Philippine Stock Exchange index racked up 44.25 points or 0.62 percent to close at 7,230.57 Monday, the last trading day of the year, riding on yearend buying and an optimism on the US economy.


The peso, however, traded weaker on the last trading day of the year, as the dollar continued to rally.


At the end of Monday’s trading, the peso closed at 44.72 to $1, weaker by four centavos than the previous session’s close of 44.68 to $1. For all of 2014, it was lower by 32.5 centavos.


Volume was thin at $403.5 million from $399.80 million in the previous session.


Manny Cruz, chief strategist at local stockbrokerage Asiasec Equities Inc., said trading was buoyed by traditional yearend window-dressing apart from the kick from the closely tracked US Dow Jones Industrial Index.


“Not much fireworks today (Monday) given the long holiday. However, the market in general ended with a bang as we closed much higher compared to last year. Today’s performance also gave us a good snapshot for the coming year,” said Astro del Castillo, managing director at fund management firm First Grade Finance.


Across the region, most markets traded higher as data indicated that the US economy had expanded by 5 percent year-on-year in the third quarter, the fastest pace seen since 2003.


Among regional markets, Asiasec’s Cruz said the Philippines was the second best performing equity market in the region.


But the first half of 2015 will likely be “quite challenging” as markets await clues on the start of interest rate hikes by the US Federal Reserve, Cruz said.


“There may be outflows from foreign institutions due to the potential increase in US rates,” Cruz said.


“We’re also expecting the US dollar to be dominant,” Cruz said, noting that the local currency may depreciate past the 45:$1 level by next year. “That will compel institutional funds to sell local equities and convert to US dollars or invest in US bonds because they are anticipating the US dollar to appreciate.”


But Cruz said the market might be able to regain footing by the second half of 2015 as investors factor in improved corporate earnings. Doris C. Dumlao, Paolo G. Montecillo



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

DOTC shelves plan to build 3rd runway


The Department of Transportation and Communications (DOTC) is studying another plan to build a new terminal at the busy Ninoy Aquino International Airport complex.


Transportation Secretary Joseph Abaya said this was the new direction after the department decided to drop a plan to build a third runway at Naia, citing various obstacles like its effect on existing infrastructure like a nearby highway and residential communities.


Abaya said air traffic congestion would be addressed with a “runway optimization project” while a new terminal would help ease passenger congestion.


“We’re waiting for the decision of the procurement. It will take them a year to study and recommend and execute the plan. By the end of 2015, we’ll know,” Abaya told reporters.


The Civil Aviation Authority of the Philippines had estimated that commercial carriers operating at Naia lost about P7 billion due to added fuel and maintenance costs as a result of air traffic congestion.


A third runway was supposed to allow more aircraft movements, or takeoff and landing events, which are currently capped at 40 movements per hour.


But further studies showed a third runway would affect existing radar facilities, the C-5 Highway as well as require the expropriation of nearby land occupied by private subdivisions and informal settlers.


“The consultant said the main thing to do is preserve your main runway, maximize your main runway, try to eliminate all forms of obstructions or delays on it, keep planes off it most of the time,” Abaya said. The DOTC earlier tapped Dutch consultant Rudd Ummels for the runway optimization project.


In place of a third runway, the DOTC plans to build a new passenger terminal to accommodate increasing numbers of travellers expected in the coming years.


Naia, through its four passenger terminals, handles over 32 million passengers a year, as against its capacity of 30 million passengers, the department noted earlier.


Abaya said the new terminal “will require less land so we don’t eat into private subdivisions.”



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

PSALM sets auction of key contracts


The Power Sector Assets and Liabilities Management (PSALM) Corp. is set to auction the government’s supply contracts for the output of the Unified Leyte Geothermal Power Plants (ULGPP) and the 210-megawatt (MW) Mindanao coal-fired plant.


“UL Bulk and Mindanao Coal are slated for next year’s privatization plan,” PSALM president and CEO Emmanuel Ledesma Jr. said in a text message. Up for auction are the IPPA or independent power producer administrator contracts.


Ledesma said the bidding for the ULGPP’s bulk output was slated for the first quarter of 2015 and the auction for the Mindanao coal plant output was slated for the second quarter.


The Energy Development Corp.’s (EDC) subsidiary, Unified Leyte Geothermal Energy Inc. (ULGEI), had won the right to manage and sell so-called bulk output of ULGPP as well as the contract for the smaller “strips” of energy.


ULGEI accepted the deal for the “strips” but declined the contract to manage and trade ULGPP’s bulk energy output.


ULGPP consists of the 125-megawatt Upper Mahiao, 232.5-MW Malitbog, 180-MW Mahanagdong and 51-MW Optimization plants.


Situated in Kananga, the Tongonan geothermal power plant consists of three 37.5-MW units that went into commercial operations in 1983.


EDC’s Leyte Geothermal Production Field supplies the steam used by Unified Leyte and Tongonan I for power generation.


EDC said the steamfield lines remained operable “despite manifest damage” sustained.


The Mindanao coal-fired plant comprises two units, each with a generating capacity of 105 MW, and is operated by private firm STEAG State Power Inc. (SPI).


The power plant, located at the Phividec Industrial Estate in Villanueva, Misamis Oriental, is a major facility and accounts for about 20 percent of Mindanao’s total power supply.


SPI’s power plant is currently Mindanao’s biggest in terms of unit capacity. Since the start of its commercial operations in November 2006, it has delivered more than 10 billion kWh of electricity to the Mindanao grid, representing about a fifth of the island’s total electricity supply.


Among the energy firms and conglomerates that have expressed interest in the IPPA contract is the Aboitiz Group.



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools

No stopping the property boom for PH mart’s bulls


Second of a series


Not everyone is worried about the Philippine property boom.


In fact, at least one major property consulting firm believes that the bullish sentiment that has boosted the local real estate market for the last decade will continue over the near term amid strong demand from the business process outsourcing sector and expatriate Filipino buyers.


According to officials of Jones Lang LaSalle Philippines, the local market is not on the verge of overheating and forming a 1997-style property bubble.


“Debt levels across the entire spectrum of buyers are very low,” JLL country head David Leechiu said in an interview, adding that this situation provided property buyers, developers and banks with enough cushion in the event of a sudden market downturn.


“All this growth in the last 10 years happened with very little leverage,” he pointed out. “That gives everyone a comfortable buffer.”


Calming fears of an oversupply in the property market, JLL officials said the projected expansion of the outsourcing and offshoring sectors —BPO firms which use the country’s large talent pool to staff contact centers and back office operations for multinationals—would continue to support demand for new office space.


In fact, the consulting firm noted that a total of 500,000 square meters had so far been committed as of the end of November 2014, mostly for the BPO sector—a record for the country.


The strong appetite for office space has resulted in average vacancy rates in major central business districts dropping to just 4 percent, and only for small and irregular office space cuts.


A fresh supply of newly built office space will bring the market’s total supply to over 700,000 sqm., but even this will easily be gobbled up by the BPO sector, JLL predicted.


In the meantime, even the residential property sector—long expected to be the nexus of a feared property bubble—will continue to see strong demand from buyers, officials of the property consulting firm said.


“A healthy flow of remittances from overseas Filipinos will buoy investment demand,” said JLL’s head of research and consulting Claro Cordero.


In 2014, 204,300 residential condo units were present in the Metro Manila market with 41,800 units completed this year alone.


Another 58,800 units will be completed next year, and 145,400 condo units will be added to the supply from now until 2020.


“If you look at the numbers, it looks like a lot, but the demand is definitely there to support it,” said JLL chief operating officer Lindsay Orr.


This was echoed by Leechiu who noted that, while the residential condo market would be deluged by a sudden supply surge over the near term, the pipeline of new condo developments was expected to tighten two years after.


This means that those buying residential condos even at today’s peak prices will likely benefit in terms of capital appreciation or rising rental yields.


While being broadly bullish about the property market, JLL officials do concede that the unbroken upward trek in property prices had raised questions in the minds of people, especially those who had experienced the painful popping of a real estate bubble before.


To these fears, the property consultants pointed to the moves by banking regulators to cool the property market by imposing lending curbs on banks.


Leechiu said the proposed policy of the Bangko Sentral ng Pilipinas to cap banks’ loan-to-value ratio for real estate lending at 60 percent from the present level of 80 percent would result in short-term pain, but would be good for the market.


“It will be a drag on the market, but it is a prudent move,” he said.


(To be concluded)



Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.


Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:


c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94




seo tools