Sunday, August 31, 2014

Cargo cleared by Customs all set to be shipped out


The Philippine Ports Authority (PPA) is giving importers and brokers with overstaying Customs-cleared cargo at the Manila ports until Sept. 8 to withdraw their containers in line with efforts to decongest the port area.


PPA said in a statement that the cargo left unclaimed would be immediately transferred to the Subic and Batangas ports, or any other location identified by the Cabinet Cluster on Port Congestion.


“All costs associated with the transfer of said containers will be shouldered solely by the cargo owner upon release thereof,” it said.


PPA General Manager Juan C. Sta. Ana said the move was meant to clear the two Manila ports of overstaying Customs-cleared and ready-to-go containers. He claimed that some importers used the ports as virtual warehouses.


“This will serve as notice to all importers and brokers to withdraw their cargo from the ports, otherwise, we will immediately transfer these cargo to any of the said destinations at their own expense,” Sta. Ana said. “We have already identified and reasonably informed the owners of these containers, which vary from big-time to small-time, and we will no longer notify them if they fail to meet the Sept. 8 deadline.”


Based on inventory, there is a significant number of Customs-cleared cargo and containers with gate passes stacked up at the Manila ports.


Customs-cleared containers are shipping crates, of which duties and taxes to the Bureau of Customs (BOC) had already been paid. The owners of the containers only had to settle the cargo-handling fees before release. Customs-cleared cargo with gate pass refers to boxes that are still in storage even though the duties and taxes, as well as the cargo-handling fees, have been settled.


“Please understand that this is not to punish our importers but only to clear as much space as possible in preparation for the influx of cargo due to [arrive], reducing pressure on inflation,” Sta. Ana said.


Already, yard utilization at the two Manila ports has jumped back to 90 percent.


Productivity and efficiency at Manila International Container Terminal remained at 20 moves an hour—a significant improvement from the 10 to 12 moves an hour two months ago. At Manila South Harbor, productivity soared to 15 moves an hour from only 8 moves an hour during the same period.


The PPA, along with the port operators, is also trying to maintain the number of empties at the Manila ports, as it slowly takes in the 20,000 containers held in ports outside the country.


Last week, the government began shipping out some 1,154 TEUs (twenty-foot equivalent units), of the identified 3,000-TEU containers with Customs problems, to the Subic ports. It expects to complete the transfer this weekend.


As of end-June, the number of laden containers piled up at the Manila ports totaled 85,000 TEUs, which is above the yard’s capacity.





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Foreign travels hobble export sector plan

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A private sector representative at the Export Development Council (EDC) has urged the Cabinet’s economic cluster to already tackle the proposed Philippine Export Development Plan 2014-2016, which outlines the strategies that will enable the country’s exports to hit $100 billion by 2016.


Sergio R. Ortiz-Luis Jr., vice chair of EDC and president of the Philippine Exporters Confederation Inc., explained that the PEDP will have to go through to this cluster before a small select group from the EDC can present it before President Aquino.


The target was for the cluster to discuss the PEDP by next week but travels abroad have been hampering the group to meet. The Department of Trade and Industry, in particular, has been very aggressive this year in its trade and investment promotions activities. Add to that the preparations for President Aquino’s travel to Europe this month (September), Ortiz-Luis added.


“Because of the European trip, everybody’s running in circles. There is supposed be a meeting next week but officials have been busy and they are expected to go ahead of the President. We hope that before they leave for Europe they could already look into the PEDP and approve it so the EDC can seek a meeting with President Aquino,” he explained.


The PEDP 2014-2016 is expected to outline the export revenue targets within the three-year period in consideration of the problems affecting the local and international markets. It is targeted to enable local enterprises to maximize their participation in the global value chain within the next three years.


Such a goal is being pushed as the Philippines is part of an integrated regional economy or the Asean Economic Community (AEC), which is being targeted for completion and establishment by end-2015.



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8990 Holdings in P3-B bid to double land bank


Listed low-cost property developer 8990 Holdings Inc. has set aside P3 billion of its capital expenditure (capex) program for the year to fund its expansion thrust as it aims to double its land bank to 500 hectares by the end of the year.


In an interview last Friday, 8990 Holdings president and chief executive Januario Jesus Gregorio B. Atencio III said that three-fourth of the company’s P4-billion 2014 capex for this year would be used to acquire additional lots in Bacolod, Butuan, Davao, Metro Manila and Zamboanga to add to its 338-hectare land bank to date.


Its land bank is expected to reach 500 hectares by yearend or the first quarter of 2015—double the 250 hectares reported last May when the company made a follow-on offering worth P5.6 billion.


“We raised capital to pare down debt and increase our land bank,” Atencio pointed out.


He said the company would expand into the following areas which have “very good potential for mass housing”—Bacolod, Bulacan, Metro Manila and Zamboanga.


“We plan to put up vertical mid-rise developments in Metro Manila as well as horizontal mass housing projects for the rest of the country,” he explained.


Expansion is also underway in the areas where 8990 already has existing residential projects, such as Angeles City, Cavite, Cebu, Davao and Iloilo, Atencio said.


Also, 8990 Holdings is “on track” to undertake this September the first private sector offering of asset-backed securities worth P1 billion, he said.


“Everything is already ready. We’re hopeful that we will secure the approval of the SEC (Securities and Exchange Commission) very soon.”


The executive said the company could achieve the yearend goals of up to P8 billion in revenue as well as P3.2 billion in net income.


“Our first-half figures show that we have had achieved a little above 50 percent of our 2014 targets,” he noted.


The company plans to cede P1 billion of its receivables to investment bank SB Capital for conversion into debt paper.


This year’s projected P8 billion worth of revenue would come from the delivery of about 9,000 new mass housing units, the company earlier revealed.





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PSEi seen moving sideways


The Philippine Stock Exchange index (PSEi) declined last week as investors started to book profits—a trend that would likely continue in the near term, analysts said. The PSEi fell 1.15 percent last week to end at 7,050.80 while the broader all-shares index was also down 1.13 percent.


The Philippines reported Thursday last week that second-quarter growth came in at 6.4 percent, ahead of expectations. However, investors also cited that this was slower than the 7.9-percent growth in the same period last year.


“The PSEi showed a bearish bias in the closing days of the week as investors left unimpressed on the [second-quarter gross domestic product] results,” Alexander Adrian Tiu, equities analyst with AB Capital Securities Inc., said in a research report. “Despite higher-than-expected numbers, fears that the government may not hit its forecast of 6.5-7.5 percent continue to dampen the bullish momentum,” he added. Tiu said there was continued “bearish bias” this week with an expected slowdown that usually followed the conclusion of the earnings season.


On a technical basis, the immediate support at 7,100 failed to hold, opening the index to further downsides at 6,950 next week, Tiu noted. “In the event that the main support level holds, we foresee the market moving sideways at the 6,950-7,200 range. Given this, investors are advised to remain on the sidelines and accumulate on further pullbacks,” Tiu said.


First Grade Finance Inc. managing director Astro del Castillo also said in an interview that investors should remain cautious in the coming days with the PSEi expected to move sideways. He expected the PSEi to hover near the 7,000 level in the near term.


AB Capital also cited caution in foreign markets due to tensions in the Ukraine-Russia conflict.


“This, along with Nato’s accusations that Russia has been sending both weapons and army into Ukraine continue to put pressure on stocks,” Tiu said. Investors would likely take some direction from an inflation report for August.


“Catalysts for next week include the Consumer Price Index (CPI) for the month of August. The CPI, an indicator of general inflation, can influence the central bank’s decision to ease or hike interest rates in the coming months,” Tiu said. Miguel Camus





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Gov’t urged to focus on decongesting Manila port


Government agencies and the private sector were urged to focus on resolving the continued congestion at the Port of Manila, and no longer dwell on the impact of the truck ban.


“The problem is no longer the truck ban. It’s now about speeding up the decongestion (activities) at the port,” said Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport) and honorary chair of the Philippine Chamber of Commerce and Industry (PCCI).


“I think we have passed the issue of the truck ban since the express lanes were opened. The problem now is you can’t move inside the pier, even if officials have said that the capacity utilization at the Manila port has improved from 110 percent to 89 percent. The target is 70 percent,” he added.


Ortiz-Luis explained that the city government of Manila was only right to impose a truck ban because nobody was moving to curb the growing number of trucking companies that do not have their own garage and have made the roads their parking areas.


He pointed out that operations at the port had started to normalize even with the truck ban in place. There are, he added, thousands of truckers plying in and out of Metro Manila, of whom about 40 percent do not even have licenses.


Government data showed that there are about 30,000 trucks plying Metro Manila, 11,150 of which reportedly do business at the ports.


“You don’t need that many trucks,” he added.


The problem now is at the port, where many empty containers are stored, along with the loaded ones that have problems with the Bureau of Customs (BOC).


Ortiz-Luis said the solution was to simply ship those excess containers by barges to other container yards in Subic and Clark, and even to industrial estates and economic zones that have started to open their respective yards.


Although this is already being done, Ortiz-Luis said the movement was too slow.


The Philippine Ports Authority earlier reported that the overflow of 57,000 containers has gone down to only 28,000 containers over the past two and a half months.


Another issue that should be resolved, Ortiz-Luis added, is that most major shipping lines do not have their own container yards in the country. The government, he added, must reinstate such policy as a measure against port congestion.


“All the major shipping lines used to have container yards, but they found it cheaper to just pay the fees for the overstaying containers than to put up a yard,” he added.


The congestion at the port was earlier blamed on Manila’s expanded truck ban policy, which bans eight wheelers and vehicles with a gross weight of above 4,500 kilos from plying the city’s streets between 5 a.m. and 9 p.m.


As a result, local companies have reeled from a double whammy of double-digit losses in revenue and equally crippling surges in import and export related expenses since last February.





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World Bank OKs $508-M fund for PH



Millions of farmers are expected to benefit from a new financing package approved by the World Bank that seeks to fund livelihood and infrastructure projects aimed at the agriculture sector. FILE PHOTO



Millions of farmers are expected to benefit from a new financing package approved by the World Bank that seeks to fund livelihood and infrastructure projects aimed at the agriculture sector.


The multilateral lender announced Friday that more than half a billion dollars in fresh cash would be made available to the Philippines in support of local agriculture.


Called the Philippine Rural Development Project (PRDP), the $508.25-million financial package aims to improve the productivity of small farmers and fisherfolk as well as their access to markets. The project will be implemented by the Department of Agriculture (DA).


More than 70 percent of total financing will be used for funding infrastructure projects of local government units. This will include farm-to-market roads, bridges, tire tracks, communal irrigation, potable water systems, post-harvest facilities, production facilities, fish landings, fish sanctuaries, storage facilities, trading posts, green houses, solar driers and slope stabilization works.


The geotagging tool, developed by the DA and currently being used to monitor agrofishery infrastructure projects, will provide online updates on the progress of PRDP-funded ventures.


The project will directly benefit close to two million farmers and fisherfolk, almost half of whom are women. PRDP will also indirectly benefit an estimated 22 million people, including 10 million women.


“We will work with local government units, the private sector and various stakeholders in coming up with provincial commodity investment plans and, in the process, providing key infrastructure, facilities, technology and information that will help improve production and raise incomes in the rural areas,” Agriculture Secretary Proceso Alcala said.


“The World Bank Group support will help the Department of Agriculture and the country achieve these goals,” he added.


The package includes a $7-million grant from the Global Environment Facility (GEF) for strengthening conservation and protection of selected coastal and marine protected areas.


Priority areas for conservation include Tayabas Bay in Quezon, Green Island Bay in Palawan, Ticao Pass in Sorsogon and Masbate, Guimaras, Danajon Bank in Bohol and Guiuan Coast in Eastern Samar.


The GEF is a collaboration of 183 countries working together with international institutions, civil society organizations and the private sector to address global environmental issues.


Despite rapid urbanization, 51 percent of Filipinos reside in rural areas and support half the labor force. Many of them—particularly farmers and fisherfolk—are poor, constrained by weak infrastructure for transport, particularly roads, port facilities, among others, and lack of post-harvest facilities, according to the World Bank.


“Given that a significant number of poor people are in the rural areas, successful implementation of this project could boost the country’s efforts to achieve growth that creates jobs,” World Bank Philippines Director Motoo Konishi said.





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ALI sets aside P6B to develop Palawan estate


EL NIDO—Property giant Ayala Land Inc. is investing P6 billion to develop within the next five years the first phase of scenic beachfront tourism estate Lio Resort Town in northern Palawan, master-planned as an ecologically sustainable community.


Lio, a 325-hectare development in Barangays Villa Libertad and Pasadena in mainland El Nido town, is envisioned to have a mix of hotels and resorts, commercial developments and residential communities that blend with the natural landscape.


ALI president Bernard Vincent Dy, in a briefing on Friday, said the company— which debuted in El Nido in 2010 by taking over the parent firm of resort operator Ten Knots Development Corp.—would continue to adopt sustainability practices “to ensure that this place remains pristine not only today but for the next generations.”


Ten Knots president Laurent Lamasuta added that the group would build only on one-third of the total land area of Lio, which will have a total of about 1,200 hotel, resort and bed and breakfast (B&B) rooms.


The development is thus envisioned to cater to all market segments, from the backpacker-oriented B&B establishments to branded hotels, including Seda, which will offer a resort line with 150 rooms.


Midscale to luxury hotels, both international and local, will be invited to locate in large hotel parcels ranging from three to 10 hectares.


“The [El Nido] town is kind of exploding,” Lamasuta said, “We can’t grow further between the sea and the mountain and population is growing faster than we can bring utilities to to it.”


Visitors to El Nido have grown by an average of 28 percent a year and are expected to reach about 78,000 this year.


As Ten Knots intends to maintain low-density resorts, the Ayala group’s expansion strategy is to build on new islands, such as the Lio tourism estate, instead of increasing the capacity of existing resorts.


Ten Knots operates 192 rooms in four island resorts— Apulit, Lagen, Miniloc and Pangulasian.


When ALI took over Ten Knots in 2010, the latter was operating only two resorts— Lagen and Miniloc.


Apulit, formerly Club Noah, was separately acquired from another group while Pangulasian was newly built on Ten Knots’ unused landbank.


The four existing resorts offer 192 rooms with an average occupancy rate of 70 percent.


Once completed, Lio’s additional 1,200 rooms can accommodate about 20,000 tourists a year. Over 2,500 jobs are expected to be generated from construction to operations, not including ancillary services and indirect jobs to the local economy.


The initial masterplan for Lio, which has a four-kilometer beach stretch, covers 100 hectares. The group broke ground last March for the first phase of the development consisting of about 25 hectares.


Lio will have its own airport terminal, jetty and lounge as well as road networks envisioned to be pedestrian friendly. It is envisioned to have well-planned infrastructure and utilities including power, potable water, telecommunications, drainage as well as storm water and waste management systems.


The character and design of Lio are guided by the principles of sustainability—land development with the least impact on the environment.





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Contribute to ‘inclusive growth,’ PH firms urged



NESTLƉ plans to increase the number of its coffee buying stations to help farmers sell their beans at a good price. WWW.Nestle.com.ph



Rapid economic growth is meaningless unless it benefits the so-called bottom of the pyramid—the estimated 25 percent of the Philippine population living below the poverty threshold.


Member-firms of the Philippine Business for Social Progress, the country’s oldest private-sector led foundation, subscribe to this belief, which is why an increasing number of them are harnessing the many strengths of their organizations to promote “inclusive growth,” or economic growth that directly helps those who need assistance the most.


“The challenge for business is to revisit their business models and see how the model can change the exclusion situation for more inclusive growth,” PBSP executive director Rafael Lopa says in an interview.


“Business needs to also make some changes,” he adds.


A number of companies are leading the way and providing examples on how to do just that.


Multinational NestlƩ, for example, is increasing the number of its coffee buying stations around the country to provide a ready and sure supple for coffee markets.


This way, farmers are provided greater incentives to plant more coffee.


More output from local coffee farmers likewise will benefit NestlƩ because this will cut down on its importation of coffee beans, which are used to process instant coffee.


NestlƩ currently secures only 30 percent of its total requirements from the Philippines because there is simply not enough volume.


There are also concerns about the quality of the local produce.


The plan hopefully is to bring the share of domestic output up to 70 percent, not just through the setting up of coffee buying stations but also the implementation of education programs to help local coffee farmers improve the quality of their output.


Conglomerate Phinma Inc., on the other hand, is building up its portfolio of socialized housing units in partnership with the Quezon City government and Pag-Ibig.


Through the landmark Bistekville project, informal settlers are provided the opportunity to own their own home at a maximum cost of P3,000 a month.


The local government provides the land, Phinma provides the technical expertise and the up-front construction of the physical structures, while Pag-ibig comes in to provide affordable loans to qualified home buyers.


“The logic is that even if the margin is low, there is still decent profit because it is a volume game. In turn, the informal settlers enjoy better and more permanent living conditions within the city,” says Lopa.


Agriculture is another area that is replete with examples of inclusive growth at work.


Jollibee Foods Corp., for example, has partnered with the Catholic Relief Services and National Livelihood Development Corp. to train farmers in Nueva Ecija to provide some of the white onions that Jollibee needs to make its best-selling hamburgers.


Through this system, farmers directly benefit in Jollibee’s growth, while the company is better assured of a stable supply chain.


Jollibee is seeking to duplicate the system for its other food requirements, including chicken.


“Profit for profit alone will not work anymore,” stresses Lopa. “What we are saying is that maximizing shareholder return is still valid, but you can also do these other things, like protecting your supply chain by involving low-income families.”


Companies in the Philippines are not the only ones involved in the conversation of inclusive growth or addressing the imbalance in income—the growing disparity in the life conditions of the rich and poor.


“Capitalism really has to revisit itself,” says Lopa, who goes on to suggest that such a reinvention can start at home.





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Anemic gov’t spending threatens growth goal


ING notes weak fiscal activity in Q2 GDP report


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The government seems to be stuck in a pattern of weak spending that may threaten the country’s growth prospects this year, Dutch financial giant ING said.


In a note to investors at the weekend, ING economist in Manila Joey Cuyegkeng noted that, since late last year, the government has spent less during the first two months of every quarter, before catching up in the third month.


“Triple dip in government spending and then a rebound at the end of each quarter is the developing pattern,” Cuyegkeng said.


This follows the release of data that showed the government nearly balanced its budget in July following a sharp decline in state spending. The government posted a budget deficit of P1.8 billion in July, down 97 percent year-on-year.


Government revenues were up 15 percent in July, while disbursements went the opposite direction with a decline of 15 percent.


July’s spending drop was a worrying sign given that government spending contributed nothing to economic growth in the April to June period of the year, data from the Philippine Statistics Authority (PSA) showed.


The government spent below program in April and May, but recovered in June with a 44-percent increase in disbursements. ING said the late surge may have been cutting it too close.


“Without the surge in government spending in June 2014, overall GDP growth would be slower likely to be in line with the prevailing consensus of 5.9 to 6.1 percent instead of the upside surprise of 6.4 percent,” Cuyegkeng said.


Major drivers of growth in the second quarter were the manufacturing sector, sustained domestic consumption, and the country’s booming services sector.


Cuyegkeng warned that the government’s weak spending “may weigh on overall 2014 growth” if the pattern of an end-quarter surge does not happen in third and fourth quarters.



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China carrier wants to mount flights to Manila


A subsidiary of China Southern Airlines Co., Asia’s largest commercial carrier in terms of passengers, is seeking to mount regular flights to the Philippines, a regulatory filing last week showed.


Xiamen Airlines, which is 51-percent owned by China Southern, filed a petition with the Philippines’ Civil Aeronautics Board (CAB) for a permit to allow it to operate international scheduled passenger and cargo air transport services.


The board is set to hear the petition on Sept. 25.


There are already three other Chinese carriers operating in Manila’s busy Ninoy Aquino International Airport, and demand here continues to grow, said Jose Angel Honrado, general manager of the Manila International Airport Authority.


“We have China Air, China Southern and China Eastern. Passenger traffic seems to be bright,” Honrado said in a text message.


Established in 1984, Xiamen Airlines claims to be the only Chinese airline featuring a fleet comprised of plans made by US-based Boeing Co.


It operates a fleet of 102 aircraft with a total of 16,650 seats. The average service age of its aircraft is 5.23 years as of February this year, information posted on its website showed.


Xiamen Airlines operates 218 domestic routes, and 26 international and regional routes, and offers more than 3,200 weekly flights.


Xiamen Airline’s flight network covers major cities in China and extends to Hong Kong, Macao, Taiwan and Southeast Asian countries.


Chinese carriers are seen to bring additional competition to local airlines due to their large size. The Chinese carriers may also reduce opportunities given their extensive reach, especially in their home market—now the world’s second-biggest economy behind the United States.


To give an idea of its scale, China Southern alone carried 90 million passengers last year, against the 37 million passengers for all domestic and international flights in the Philippines in 2013.


Other carriers are also eyeing the Philippines as a potential expansion destination.


Earlier this month, Honrado said that they approved the request of Oman Air and Garuda Airlines to operate at the Naia Terminal 1.


The Philippines and South Africa also inked an expanded air service agreement earlier this month with at least one South African carrier keen on operating here, said Carmelo Arcilla, executive director of he Civil Aeronautics Board.





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Property firms cited for housing contributions

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State-controlled Home Guaranty Corp. has cited six property developers for their “invaluable contributions in uplifting the lives of Filipinos through their housing projects.”


Two of the awardees are publicly listed companies: Megaworld Corp. and 8990 Holdings. Two others—DMCI Homes and SM Development Corp.—are part of publicly listed conglomerates.


The two other awardees are “condormitel” developer Phoenix Sun International Corp. and affordable housing developer New San Jose Buildings Inc.


The companies were honored during HGC’s 4th clients appreciation night last week at the Manila Peninsula Hotel. Vice President Jejomar Binay, chair of the Housing and Urban Development Coordinating Council, and HGC president Manuel Sanchez handed out the awards.


Megaworld of tycoon Andrew Tan was given the honor for its “holistic approach in the development of townships that are geared toward sustainability and growth.”


SMDC, the residential arm of the Sy family’s SM Prime Holdings, was recognized for undertaking “condominium developments making available a wide range of options for urban families.”


8990 Holdings was cited for “providing affordable housing opportunities in the Visayas and Mindanao regions,” while DMCI Homes was given the award for “building quality and affordable resort-like medium and high-rise condominium projects.”


Also, HGC cited Phoenix for “constructing affordable and accessible condormitels for students and city workforce and providing excellent property management.” New San Jose, on the other hand, was honored for “providing affordable homes and for preserving Philippine heritage houses and their rich cultural relevance.”


Apart from the property developers, seven institutions were cited by HGC for excellence in housing finance.


The honoree for the universal bank category was Metropolitan Bank and Trust Co., while BPI Family Savings Bank bagged the award for the thrift bank category.


The honoree for the mutual fund category was Cocolife Fixed Income Fund Inc. while Bank of Makati was cited the best rural bank partner.


Tahanan Mutual BLA was recognized to be the best among building and loan association partners while Ayala Land Inc. and subsidiaries was named the best developer in housing finance.



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World Bank grants PH $500-M loan

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MANILA, Philippines – World Bank has granted the Philippines a $508.25-million loan and grant package, which will finance the implementation of rural infrastructure and livelihood projects for farmers and fisherfolk in the country.


The grant package, which will be called Philippine Rural Development Project (PRDP), seeks to improve the productivity of farmers and fisherfolk through funding construction of infrastructure projects such as farm-to-market roads, bridges, tire tracks, communal irrigation systems, potable water systems, and other projects.


“Given that a significant number of poor people are in the rural areas, successful implementation of this project could boost the country’s efforts to achieve growth that creates jobs, in line with the World Bank Group’s twin goals of eradicating extreme poverty and promoting shared prosperity,” said World Bank Country Director Motoo Konishi in a statement.


According to World Bank, the loan will benefit two million farmers and fisherfolk, and will indirectly benefit an estimated 22 million Filipinos.


Apart from the implementation of rural projects, the PRDP will also finance a $7 million grant to conserve and protect selected coastal and marine areas in the country. The World Bank identified priority areas for conservation which include: Tayabas Bay in Quezon; Green Island Bay in Palawan; Ticao Pass in Sorsogon and Masbate; Guimaras; Danajon Bank in Bohol; and Guiuan Coast in Eastern Samar.


The projects under the PRDP will be implemented under the Department of Agriculture.


RELATED STORIES


World Bank hails PH as next Asian miracle


ADB, World Bank offer $1B in loans to PH



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Saturday, August 30, 2014

Tarlac farmers look El NiƱo in the eye



PAGASA senior weather specialist Anthony Lucero (foreground) and farmer Homer Bucad learn from each other during as field work.



On a Wednesday morning in late July, rice fields in Barangay Sto. Domingo of Gerona town along the Tarlac River are wet, thanks to light showers.


The rains have come late this year, unlike the year before when people were praying hard so that the Habagat (southwest monsoon)-borne downpours would stop.


Earlier this year, international climate monitoring agencies have warned of a possible onset of the El NiƱo weather disturbance in the fourth quarter this year until the first quarter of 2015.


The Philippine Atmospheric Geophysical and Astronomical Services Administration (Pagasa) itself talked of stronger typhoons in the runup to a period of drier conditions and decreased rainfall.


As of Aug. 25, the latest word from the Climate Prediction Center of the United States’ National Weather Service is that the chance of El NiƱo occurring in the remaining months of the year was about 65 percent. This was a little better than the 70-percent probability that was being quoted in June.


‘Drought-tolerant’


In light of this development, the Philippine Rice Research Institute (PhilRice) has called on farmers to plant “El NiƱo-ready” rice varieties.


PhilRice came out with a list of “early maturing” and “drought-tolerant” rice varieties, including the “Pagsanjan,” “Tubigan 4,” and “Tubigan 14” for irrigated lowland areas, and the “Pasig,” “Apo” and “Katihan 1” for upland farms.


As for rain-supplied, lowland paddies, PhilRice recommends “Sahod Ulan 1,” “Rio Grande” and “Sacobia.”


According to the agency which is supervised by the Department of Agriculture, the rice breeds are best for areas that are deemed most vulnerable to El NiƱo, which includes Tarlac.


However, in Sto. Domingo, some of the tillers continue to rely on their innate relationship with the environment as they adopt a climate-informed approach to farming.


On that showery morning, about 15 farmers were engaged in a session called agro-ecosystem analysis (Aesa), which involves observation, data recording and analysis on how factors like the environment, nutrients, pests and insects, weather and climate, and farming practices affect the stages of crop development.


They comprise the latest batch of trainees under a program called Climate Resiliency Field School (CRFS), which entails 16 weekly sessions meant to help farmers adapt to changes in climate as well as to make farming sustainable.


Through the Aesa sessions, the farmers are expected to come up with sound farm management recommendations which they themselves can test and validate.


“Farmers are inherently responsive to changes in their agro-ecosystems even if they lack the capacity to explain such changes fully,” says Jean Lugasip, a coordinator with the nongovernment organization Rice Watch and Action Network (R1).


In partnership with the local government of Gerona, R1 first initiated the CRFS in 2011, with the help of other NGOs and Pagasa.


The program’s rationale is that, to leverage their innate knowledge, farmers need to be given access to appropriate technologies as well as timely and localized climate forecast information, Lugasip explained.


Meddling with nature


Meanwhile, the Department of Agriculture has put in place policy initiatives, water management and conservation measures to cushion the effects of El NiƱo.


These measures also involve the promotion of modern farming technologies among rural folk, like the so-called “alternate wetting and drying” style of rice cultivation, giving out shallow-tube wells and ramping up cloud-seeding sorties.


But Pagasa senior weather specialist Anthony R. Lucero, who is a regular resource person in CRFS sessions, disagrees with the practice of cloud seeding.


“That is meddling with nature,” says Lucero, who is officer in charge of Pagasa’s Climate Monitoring and Prediction Section. “For me, personally, what should be done instead is to ensure that food supplies and other resources from areas spared by the drought are made available to harder-hit areas.”



FARMERS in Gerona learn simple weather forecasting and climate monitoring.



The big picture


He agrees that farmers need to be trained in managing climate risk in their own terms, which allows them to adjust farming decisions based on localized weather and climate information. That is not what farmers get when they rely on radio or television which, at best, provide regional data.


“Learning that heavy rains are expected in Central Luzon or even ‘in the area of Tarlac’ is actually not very helpful,” says Rodelio Taberna, Gerona’s Agromet observer.


Taberna used to work as one of the drivers of Municipal Hall. But after training with Pagasa experts through the CRSF, he now mans the town’s very own weather station.


Housed in a bungalow-type structure surrounded by croplands in Barangay Tagumbao, the Gerona Agromet is equipped with an Automatic Weather Station (AWS). As the AWS is linked to national and international weather and climate monitoring agencies, the “big picture” information is reconciled with local observation.


Based on that, the Agromet observer sends out 10-day forecasts and corresponding advice on what impact the weather may have on farms and what activities are recommended.


Taberna posts the forecasts and advisories on a billboard at the municipal agriculture office at the town center.


He also posts the information in Gerona Agromet’s own Facebook page and sends out text messages for people asking for information.


For example, farmers hold off spraying against pests on a day when it is expected to rain. A sunny forecast means it is a good idea to go ahead with drying seeds.


Looming heavy rains or even a typhoon may also prompt farmers to go for a mechanized harvest than risk having their crop wiped out entirely.


“Even the non-farmers regularly check us out on the billboard and on Facebook,” Taberna says. “Also, some farmers here have access to even the simplest feature phones. They don’t have to make the trip to the town center to get weather information.”


At the mercy of weather


As one of the first graduates of CRFS—or “adapters,” as R1 calls them—Junior Aguilar now leads a different lifestyle.


The 42-year-old former overseas worker is now a full-time tenant that tends to a three-hectare farm.


“With the help of what I have learned [through the CRFS], my harvest is no longer fully at the mercy of the weather and climate,” Aguilar said.


With CRFS-guided farming experience over the past three years, Aguilar was able to identify the best seeds to use. Not only did harvest improve, the engineering graduate has leveled up to growing seeds—that is, grains for planting instead of milling.


Aguilar favors a rice variety that locals call “sampaguita,” which is not certified and does not require particular inputs such as commercial fertilizer.


Organic farming


As part of CRFS training, farmers are also given the option of using natural farming methods or non-chemical fertilizer.


Homer Bucad, 46, is also an adapter and has taken to multi-cropping and organic farming. He said he found that these methods make sense, especially with his farm holding of only a hectare.


Bucad used to work in a bakery, but took over his father’s tenancy when the latter became too old to continue working the field.


“I grow four rice varieties—magnolia, sampaguita, jasmin and malagkit (glutinous),” he says. “Although my farm is not certified organic, my buyers know how I grow my rice because most of them are my townmates.”


Bucad realizes that, because his farm has no access to irrigation infrastructure, it’s better to try other crops than to insist on planting rice again during the dry season.


“I grow singkamas and monggo instead,” he said. “Fuel for a shallow-tube well is expensive. Besides, the monggo helps enrich the soil for the next rice crop when the wet season comes again.”


According to Milagros Pacheco, the municipal agriculturist of Gerona, during the last occurrence of El NiƱo, many farmers in Gerona were not able to plant at all. “Now there’s a guide for farmers and they can adjust not only the timing but also which crops to grow.”


She says that, before training with the CRFS, farmers relied on practices that they got used to—such as planting at the same time of the year even if, weather-wise, it was not advisable.


“If El NiƱo does occur this year, farmers may or may not have a hard time depending on how they manage their farms,” Pacheco adds. “But it is certain that they will improve their knowledge and will be better prepared for the next long drought.”





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Friday, August 29, 2014

PH ranked 5th biggest in Asean as of end-2013


GDP growth

Photo from National Statistical Coordination Board



The Philippines emerged as the fifth biggest economy among the 10-member states of the Association of Southeast Nations in 2013, based on the country’s gross domestic product (GDP) at current prices which stood at $269 billion, data from the Asean showed.


In terms of international merchandise trade and foreign direct investment inflow, the Philippines ranked sixth in Asean neighbors, after generating a total trade of $119.1 billion and attracting $3.86 billion worth of investments last year, statistics further disclosed.


According to data from the Asean, Indonesia emerged as the biggest economy in the region, with $863 billion (measured in terms of GDP at current prices), followed by Thailand at $388 billion; Malaysia with $312 billion; and Singapore $297.9 billion.


Singapore, however, topped the rankings in terms of total international merchandise trade last year with $783 billion, and foreign direct investment inflow with $60.6 billion. The country likewise posted the highest GDP per capita (at current prices) among the 10 member states at $55,183, followed by Brunei Darussalam at $39,677.


The Philippines GDP per capita stood at only $2,707, the sixth highest in the region.


As a region, the Asean economy grew by 5.1 percent with international merchandise trade and FDI inflow posting an increase of 1.4 percent and 7.1 percent, respectively.


In terms of nominal GDP, Asean GDP grew to $2.4 trillion in 2013 from $2.3 trillion in 2012, with the per capita GDP reaching $3,837 in 2013 from the $3,761 recorded in 2012.


In 2013, Asean international merchandise trade amounted to $2.5 trillion, with total export receipts of $1.3 trillion and import payments of $1.2 trillion.


Trade among the 10 Asean member states represented 24.2 percent of the region’s total trade during the same period.


The region’s biggest trade partner is China, which cornered 12 percent of exports and 16 percent of imports. Other leading trade partners included the European Union, Japan and the United States.


According to Asean data, electrical machinery and equipment were the top export earner at $277 billion while mineral fuels, mineral oils and product of their distillation were the highest imported commodity products at $274 billion.


Inflow of FDI in Asean rose to $122 billion in 2013 from $114 billion in 2012. Intra-Asean investments grew steadily in recent years although its share to total Asean FDI inflows remained at around 17 percent. During the period 2011-2013, Asean received the highest FDI from European Union and Japan, accounting for almost 40 percent of the total investment inflows.


For 2013 alone, the EU’s FDI represented 22 percent of total inflows to the Asean, followed by Japan, with an 18.7 percent share.





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5 firms vie for P4-B PPP deal



Screengrab from www.sanmiguel.com.ph



Five groups, including San Miguel Corp. and Ayala Land Inc., will vie for the P4-billion public private partnership project near the Food Terminal Inc. compound in southern Metro Manila, a government official said Friday.


Michael Sagcal, Transportation department spokesperson, said the companies that bought bid documents apart from San Miguel and Ayala were Filinvest Land, Megawide Construction Corp., and Datem Construction, a contractor whose projects include The Serendra project in Bonifacio Global City and Discovery Shores Boracay.


The Transportation department said interested groups have until Oct. 6 to submit prequalification documents for the project, formally known as the Integrated Transport System Project-South Terminal.


The prequalification would determine which groups would proceed in the bidding process. The state-run Food Terminal Inc. still owns a 24-hectare special economic zone in Taguig after it sold a 74-hectare portion to Ayala Land two years ago. This deal is the second of its kind to be auctioned off under the Aquino administration’s Public Private Partnership program.


The Transportation department earlier published an invitation to bid for the ITS project-Southwest Terminal, for which the offers may be expected next month. Ayala, San Miguel Corp. and Metro Pacific Investments of Manuel V. Pangilinan were earlier said to be keen on bidding for the Southwest terminal deal.


The ITS system is an intermodal hub where provincial buses may unload passengers who can then transfer to other in-city modes of transport such as rail lines, city buses and UV Express vans, the department said.


In the case of ITS South Terminal, the project will connect passengers from the Laguna/Batangas areas to transport systems, including a planned North-South Commuter Rail, city buses and taxis, it said.


The winner will finance, design, build and operate the terminal for a period of 35 years, the Transportation department said. It will employ a two-stage envelope system for the bidding process, according to the bid invitation.


The terminal will also include a main passenger building, arrival and departure bays, public information systems, ticketing and baggage holding facilities and so-called park-ride facilities. The government is also planning an ITS terminal in the northern part of Metro Manila.


It is currently studying various locations, including the Seedling Bank on Edsa in Quezon City, Transportation Secretary Joseph Abaya said previously.





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Villar unit seeks BOI tax perks for diesel plant projects




S.I. Power Corp., a unit of Villar-led Prime Asset Ventures Inc., has sought tax perks from the Board of Investments for its proposed diesel plants in Siquijor.


Based on a notice, S.I. Power is applying for registration on a pioneer status as a new operator of diesel plants, which can generate a total of 6.464 megawatts.


One facility, which has a capacity of 3.232 MW, will be put up in the municipality of Siquijor, while a second plant of another 3.232 MW will be placed in Lazi.


It was earlier reported the Siquijor diesel stations, which would be the Villar group’s first foray in the power generation business, are expected to replace the power plants managed and operated by the state-run National Power Corp. in the province.


The reported target was to complete the facilities within 11 months after the equipment has been delivered to the proposed site of the diesel stations.


Should the project be approved by the BOI, S.I. Power Corp. will be entitled to a menu of fiscal and non-fiscal incentives, as provided under the 2013 Investment Priorities Plan.


These include an income tax holiday and exemption from taxes and duties on imported spare parts; exemption from wharfage dues and export taxes. Amy R. Remo



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PH money supply growth slowed down in July


Mopping up of excess liquidity yielding the expected results


By |




INQUIRER FILE PHOTO



Money supply growth in the Philippines slowed to a pace not seen in more than a year, as recent moves to mop up excess liquidity continued to take hold.


Despite slowing liquidity growth, bank loans continued to expand at an elevated rate amid strong demand for cash from both businesses and households, the Bangko Sentral ng Pilipinas (BSP) reported.


“The previous (monetary policy) adjustments … are expected to continue to bring domestic liquidity growth in line with the pace of (economic growth),” the regulator said in a statement.


Domestic liquidity or M3, a measure of the amount of money circulating in the economy, rose by 18.3 percent in July from 23.3 percent the month before. It was the lowest growth rate in liquidity since May 2013.


This is closer to the 12 to 15 percent range the BSP considers “normal.”


At its last four meetings, the BSP’s policymaking monetary board moved to tighten liquidity conditions in the country to avoid fueling excess demand that could lead to higher consumer prices.


In April and May, the BSP ordered banks to set aside more of their clients’ deposits as reserves. In June, rates for special deposit accounts (SDA), one of the BSP’s main sterilization tools for mopping up liquidity, were hiked. This was done to encourage banks to keep more funds idle in BSP vaults.


In July, the BSP hiked policy rates for the first time since 2011. The central bank’s benchmark overnight borrowing and lending rates now stand at 3.75 and 5.75 percent.


Meanwhile, the BSP also reported that outstanding loans by universal and commercial banks grew at a faster 21.8 percent from 20.1 percent the previous month.


Inclusive of BSP placements, loans were up 20.4 percent, faster than the 18.7-percent expansion the month before.


“The continued expansion in bank lending suggests that the momentum of domestic economic activity remains strong,” the BSP said.



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Weekly Futures Recap With Mike Seery


We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.


Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.


Crude Oil Futures


Crude oil futures hit a 2 week high today trading up $1.30 a barrel at 95.85 as tensions with Russia continue to prop up prices as I have been recommending a short position but it’s time to move on and look for another market as this trade hit a 10 day high today so if you took my short recommendation it’s time to exit and move on in my opinion. As a trader you must have an exit strategy and my exit strategy is if I’m short I place my stop at the 2 week high so currently sit on the sidelines and wait for a better trend to develop as this trade was disappointing but was pretty neutral but I do believe that over supplies eventually will continue to push prices lower but there is so much chaos going on in the Middle East at this point pushing prices higher so let’s wait for some better chart structure to develop as we might consolidate in the next several weeks so wait for another trend to develop as I like trading the crude oil market because sometimes the risk reward situation is highly in your favor since crude oil is a highly volatile commodity.

TREND: NEUTRAL

CHART STRUCTURE: SOLID


Natural Gas Futures


Natural gas futures in the October contract are trading above their 20 day but still below their 100 day moving average telling you that’s how far prices have come down in recent weeks however I’m now recommending a long futures position at the breakout of 4.04 placing my stop loss below the double bottom and contract low of 3.76 risking around 30 points or $700 per contract if you trading the mini version and if you trading the large contract that risk is around 3,200. If you look at the daily charts it looks like a double bottom was created around 3.78 as we enter the high demand season of autumn and winter and if you remember last year’s winter was historically cold sending natural gas prices to 5.50 as the risk reward is in your favor and that stop loss will be moved up on a daily basis so play this one to the upside as I think there’s a high probability that prices have bottomed out.

TREND: HIGHER

CHART STRUCTURE: EXCELLENT


Silver Futures


Silver futures in the December contract are currently up $.11 at 19.59 an ounce after rallying sharply earlier on news of Russia invading the Ukraine once again sending prices as high as 19.95 but then reality set in sending prices near session lows as I’ve been recommending a short position in silver when prices broke 20.40 and if you took the original recommendation make sure you place your stop above the 10 day high which is today’s high of 19.95 risking around $.35 or $1,800 per contract as the chart structure is currently outstanding. Silver futures are still trading below their 20 and 100 day moving average stating that the trend is lower however the volatility in silver is at historical lows & in my opinion there’s just a lack of interest and the only reason prices go higher is because of geopolitical news not because of demand so continue to place your stop above today’s high as the risk reward is in your favor as many of the commodity markets today were higher. The trend still remains to the downside with the next major support level of 19.40 and if that level is broken look for a possible retest of the contract low of 18.80 which happened in early June.

TREND: LOWER

CHART STRUCTURE: EXCELLENT


Gold Futures


Gold futures in the December contract are currently down $2 this Friday afternoon in New York trading at 1,288 an ounce while still trading above its 20 day moving average but below its 100 day moving average which stands at 1,296 as I’ve been recommending a short position at 1,280 while now placing your stop loss above the 2 week high which stands at 1,322 risking around $25 or $2,500 per contract as prices settled last Friday at 1,280 up about $10 for the trading week. The reason for the rise in gold prices is the fact that Russia is now invading Ukraine and ISIS in Iraq is pushing up gold in the last week as this problem doesn’t seem to be going away however, I’m a short-term trader and the chart structure is outstanding at the current time so I trade with the trend which is still to the downside in my opinion as that stop will also be lowered in the next couple of days. If the gold was truly in a bullish trend prices would be much higher as there is chaos going on in the world and that tells me how weak prices really are as demand is poor as the U.S dollar continues to move higher hitting an 11 month high against the Euro currency which is extremely bearish the precious metals and commodity prices as a whole.

TREND: LOWER

CHART STRUCTURE: EXCELLENT


Soybean Futures


The soybean market is still trading below its 20 & 100 day moving average trading at 10.23 a bushel down about 20 cents for the trading week as this has been one of the best trends to the downside in 2014 as prices have not hit a 2 week high in over 3 months as excellent weather conditions in the Mid- West part of the United States has been remarkable and one for the record books in my opinion as rain and mild temperatures have been constant throughout the summer. Traders are awaiting the next USDA crop report which is in a couple weeks as prices are right at 4 year lows and if you are still short this market I would place my stop above the 10 day high which currently stands at 10.60 risking around $.40 or $2,000 from today’s price levels as the problem with soybeans is a 3.8 billion crop being produced and carryover levels going as high as 430 million bushels which historically is extremely lofty and should keep a lid on prices for the rest of 2014 as a farming magazine stated yesterday that there’s a possibility that soybeans might plant as many as 86.5 million acres and that’s compared 84 million acres this year which could produce a crop of over 4 billion and if that’s true I think soybean prices could head dramatically lower over the next 12 months, however spring planting is still quite a distance away and things can change but this could be a secular bear market for several years to come especially if the weather produces another record crop next year as South America should also produce another record crop this year.

TREND: LOWER

CHART STRUCTURE: EXCELLENT


Cotton Futures


Cotton futures in the December contract settled last Friday at 66 going out today around the same price after hitting a 4 week high earlier in the trading week now trading above its 100 day moving average telling you that the trend has now turned higher and if you are bullish cotton my recommendation would be to buy at today’s price while placing your stop loss below the contract low risking about 400 points or $2,000 per contract, however I am currently sitting on the sidelines in this market as the chart structure has improved dramatically. Last Thursday’s trade prices were sharply lower reversing some of this week’s gains on the fact of heavy rains in the southern part of the United States propelling crop development and it certainly looks like it’s going be a near record crop with extremely high historical carryover levels as this market currently is consolidating in my opinion as prices dropped over 2000 points from early May. Another negative influence on cotton prices is the fact that the U.S dollar hit an 11 month high against the Euro currency this week and that is always negative commodity prices as we will start to enter harvest season in a little over 1 month.

TREND: MIXED

CHART STRUCTURE: EXCELLENT


If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com


Cocoa Futures


Cocoa futures in the December contract are trading above their 20 and 100 day moving average as were starting to head into the demand season after settling last Friday at 3194 trading up about $.80 for the week and traded as high as 3300 on Wednesday hitting a 3 ½ year high. At the current time I’m recommending a bullish position by buying a futures contract and placing your stop below the 10 day low which currently stands at 3184 risking around 100 points or $1,000 per contract as this has been one of the few bullish commodity trends. The problem with cocoa is the fundamentals are strong as we have had poor crops in recent years as cocoa is grown in the Ivory Coast and must be grown within 20 miles of the equator making this a rare commodity and these countries are very unstable and sometimes unrest pushes prices higher and if there is another poor growing season rest assured prices could go much higher in my opinion, but make sure you place a stop at the 10 day low in case the trend does change because trends can change on a dime.

TREND: HIGHER

CHART STRUCTURE: EXCELLENT


Wheat Futures


Wheat futures in the December contract are stuck in an 8 week consolidation trading at the upper of the trading range all due to Ukrainian problems as prices are now trading above their 20 but still below their 100 day moving average as prices settled last Friday at 5.62 currently trading at 5.66 in Chicago and if your bullish the wheat market my recommendation would be to buy at today’s price while placing my stop below the contract low of 5.46 risking around $.24 or $1,200 per contract, however currently I am sitting on the sidelines waiting for a breakout to develop. If you were following my previous blogs I have a theory on consolidations and that theory states the longer the consolidation the more powerful the breakout so keep an eye on this market and if prices break 5.42 my recommendation would be to get short placing my stop above the 10 day high and if prices breakout to the upside I would buy futures contract while placing my stop at the 10 day low as this market will not consolidate forever. The Ukraine is the 4th largest food producer in the world and with tensions between Russia and Ukraine that is propping up wheat prices currently but has nothing to do with the fundamental crops which look very solid at this time as abundant rain covered much of the Great Plains in the last 2 weeks so just keep an eye on this market because trading in a consolidation or choppy market is very difficult to be successful in my opinion.

TREND: MIXED

CHART STRUCTURE: EXCELLENT


Corn Futures


Corn futures in the December contract are currently trading at 3.63 down 6 cents this Friday afternoon in Chicago after settling last Friday at 3.71 as the volatility is very low as we have been trading in a 6 week consolidation between 3.60 – 3.80 and I’m still recommending a short position and if you took that original recommendation several months ago make sure you place your stop on a closing basis at 3.78 which is around $.15 or $750 per contract at today’s price levels. The next major support is at the contract low at 3.58 and I still believe that prices will break 3.50 in the coming weeks as harvest is right around the corner as we are expecting 170 bushels per acre which is phenomenal with another 14 billion bushels being produced. The scary thing about the corn market is a farming magazine stated yesterday that they are expecting over 90 million acres being planted again next year and if that’s the case you could be looking at long-term secular bear market as supplies are just too large currently but that is a long ways away and things can change by next April, however if we don’t reduce planting in all of the agricultural products prices are going to get depressed and farmland prices start to head south as well.

TREND: LOWER

CHART STRUCTURE: EXCELLENT


Sugar Futures


Sugar futures in the October contract are currently trading at 15.51 a pound after settling last Friday at 15.64 as the volatility certainly has come back as prices traded as low as 15.30 then rallied up to the 16.00 level as prices are still trading below their 20 and 100 day moving average as the Brazilian sugar production is estimated to be lower, however world supplies of sugar are historically very high as the bulls and bears are in a tug of war. Sugar prices hit a one year low earlier in the trading week and I’ve been recommending a short position when prices broke 17.45 and if you took that original recommendation make sure you place your stop loss above the 10 day high which currently stands at 16.05 risking around 55 points or $600 per contract as the chart structure has improved dramatically in recent weeks. One thing I can be sure of is that sugar prices will become extremely volatile once the growing season comes about just like last year when prices rallied 300 points on the fact that central Brazil had one of its worst droughts in decades but I’m a short-term trader and the trend is still lower in my opinion so just make sure you place the proper stop loss.

TREND: LOWER

CHART STRUCTURE: EXCELLENT


Coffee Futures


Coffee futures in the December contract settled last Friday at 187.35 while currently trading around 199 up around 1200 points for the week as there are concerns about next year’s crop as dryness is still a problem especially in Central America and the problem with coffee is you cannot have back to back poor growing years because that could send prices up dramatically reducing carry over levels but that is not in the cards currently just perception. Coffee futures are trading above their 20 and 100 day moving average looking to retest the August 1st high of 211 as I’m still sitting on the sidelines in this market waiting for better chart structure and a trend to develop despite the fact that the trend currently seems to be the upside. Many of the commodity markets including the soft markets have been in bearish trends except for cocoa and coffee as they continue to grind higher so keep an eye on this market and wait for a 4 week breakout to the upside before entering making sure that the risk reward equals 2% of your account balance.

TREND: MIXED

CHART STRUCTURE: POOR


U.S Dollar Index Futures


The U.S dollar continues its bullish momentum trading far above its 20 & 100 day moving average as prices have rallied 250 points in the last 2 months as investors are fleeing out of Eastern Europe and the Euro currency putting their money in U.S dollars which is considered a flight to quality and if you took the original recommendation when the breakout occurred above 81.20 make sure you place your stop at the 10 day low which will be on Monday’s trade at 81.64 and that stop loss will be moved up dramatically as this is one of the few bullish commodities around. Prices settled last week at 82.37 going out today around 82.50 basically unchanged for the trading week as the U.S dollar is a very good trading vehicle as it’s not extremely volatile compared to many other commodities so smaller trading accounts can trade this commodity and I still believe higher prices are ahead as these Ukrainian problems are not going to go away as the Federal Reserve is also tapering its bond buying program while the European countries are printing money like crazy so fundamentals are clearly bullish the U.S dollar here in the short term. The chart structure will start to improve on a daily basis next week as prices have basically gone straight up in recent weeks as Europe seems to be going into a recession as deflation is a real problem.

TREND: HIGHER

CHART STRUCTURE: IMPROVING


What Does Risk Management Mean To You?


I generally tell people that the reason people lose money in commodities is not due to the fact that they are bad at predicting where prices are headed, however they are bad when it comes to losing trades and refusing to take a loss which results for heavy monetary losses that are difficult to come back from. For example if a customer has $100,000 account in my opinion on any given trade he or she should risk 2% – 3% of the account value meaning if you are wrong the worst-case scenario is still a $97,000 remaining balance, however what I always see is traders risking ridiculous amounts of money and instead of the 3% stop loss will risk 20% to 30% on any given trade or even higher therefore if you are wrong on two or three trades that $100,000 dollar account could dwindle down to nothing very quickly and I’ve seen it many times throughout my career.


What many traders forget to realize is they might have 4 or 5 commodity positions on and if you have too many contracts on all at the same time and all of those trades go against you which is very possible the losses can add up to be staggering so what I am suggesting to you is if you have $100,000 account risk between $2,000 – $3,000 per trade so if you lose on five straight trades the worst-case scenario is that your down $15,000 and still have an $85,000 balance which is very possible to still come back from and your still in the game.


If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com


SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS


There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.


Michael Seery, President

Seery Futures

http://ift.tt/1fGCqDc

Twitter–@seeryfutures

Phone #: (800) 615-7649

mseery@seeryfutures.com



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Aboitiz eyes P2.7B in sale of treasury shares





Screengrab from www.aboitiz.com



Power and banking conglomerate Aboitiz Equity Ventures Inc. is raising more funds through the sale of up to 50 million treasury shares to bolster its cash reserves.


A stock exchange filing on Friday showed that Aboitiz Equity’s board approved a plan to sell the shares, almost 29 percent of its total treasury shares, at prevailing market value.


Aboitiz Equity shares dipped 1.25 percent to P54.75 apiece as the broader Philippine Stock Exchange index declined 0.7 percent.


At that price, the planned treasury sale may be valued as much as P2.7 billion.


Aboitiz Equity will be left with about 123 million treasury shares, assuming it sells the entire amount, based on the company’s regulatory filing.


It said the board allowed the sale of shares in tranches.


The company, which derives about 75 percent of its earnings from the power business, earlier earmarked P88 billion, to build more generating capacity. It also owns Union Bank of the Philippines, one of the country’s biggest banks, Aboitiz Land Inc. and Pilmico Foods Corp.


Aboitiz Equity has also been expanding to new business lines. Last June, it made the top offer with Ayala Corp. for the P35.4-billion Cavite Laguna Expressway public private partnership deal. The project has yet to be awarded as President Aquino is still mulling over the request of San Miguel Corp., which has already been disqualified from the deal.


Aboitiz Equity said net income in the first half of 2014 declined 20 percent to P9.49 billion. It said power accounted for 74 percent in terms of income contribution, followed by banking (17 percent), food (7 percent) and real estate ( 2 percent).


Without nonrecurring items, the company said core net income during the period would have amounted to P8.7 billion, down 26 percent.


It said revenues during the period rose almost 40 percent to P54.33 billion. Miguel R. Camus and Amy R. Remo



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