The peso rate closed at P55.83 to the US dollar last Friday at the Philippine Dealing System of the Bankers Association of the Philippines. The weighted average rate stands at P55.844.
Full-year inflation seen at 7.6%
The Bangko Sentral ng Pilipinas is less rigid with its inflation forecasting two and half months to December, allowing a range of 7.6 to 7.9 percent for the full-year. BSP Governor Amando M. Tetangco Jr. said they expect inflation to hit this range. For September, inflation was lower than expected at seven percent against BSP’s projection of 6.6-7.1 percent. However, Tetangco said there remain potential risks to inflation such as the movement of oil prices. It is important to guard against possible second round effects, he said. In the meantime inflation rate might be slowing down but the monetary policy will remain "cautious" and watchful of any hint of second-round effects to consumer prices, Tetangco said earlier. Liquidity growth and interest rate differentials are also significant considerations. "Given this (scenarios) monetary policy should remain cautious." The BSP’s primary concern will be to protect its inflation targets through monetary action.
Preliminary data banned
Finance Secretary Margarito B. Teves issued a memorandum order late last week instructing tax agencies not to release preliminary numbers on revenues to avoid confusion and public hype. In the memo dated October 12, Teves said Bureau of Internal Revenue OIC-Commissioner Jose Mario Bunag, Bureau of Customs OIC-Commissioner Alexander Arevalo and Bureau of Treasury chief Omar Cruz would be strictly adhering to DoF schedules on the release of tax data. "No preliminary data will be released to the press," was the instruction from Teves. Besides tax reports, the monthly National Government fiscal deficit data will also be strictly followed, "unless otherwise instructed by the Secretary," the memo said. The BTr will make the official announcement in the present of BIR, BoC and DoF representatives. This is scheduled tomorrow October 18. Last October 3 Teves disclosed to the media preliminary BIR figures provided by Bunag. He emphasized the data are estimates and not the actual figures, which indicated that the BIR has overshot its target for September by
P600 million. However reports followed that the BIR, again based on estimates, are likely to miss targets by a much larger figure than P600 million.
Firms under rehab told to report
Companies whose rehabilitation are still under the jurisdiction of the Securities and Exchange Commission (SEC) maybe required by the corporate regulator to present on a regular basis developments on their rehabilitation. Petitions for corporate rehabilitation has already been transferred to the regular courts but several companies under rehab are still under the jurisdiction of the SEC. These companies include Uniwide Holdings Inc., ASB Holdings, Inc., Victorias Milling Company and the Philippine Airlines. The suggestion to direct these companies to regularly report developments was raised during a Commission en Banc meeting held last week. PAL was a particular concern. PAL is under a ten-year rehabilitation program. Last year, the nation’s flag carrier wanted out of its rehab program to be able to borrow money to expand and turnaround its operations. PAL is already on the track to recovery as it registered a net income of
P1.2 billion for its fiscal year ending March 2005 coming from a net loss P643 million during the same period last year.
Teves shrugs off US suggestion
Finance Secretary Margarito B. Teves is not very keen on a US government proposal to revise the country’s credit policies. In a letter to Jon D. Lindsborg, mission director at the US Agency for International Development, Teves thumbed down the proposal to link credit policies with their own for fear this would affect the DoF budget for next year of almost
R6 billion. Teves told the US official that they should stick to the current credit policy reform program on a stand-alone basis. The proposal was to link the eight-year-old Credit Policy Improvement Program or CPIP to another US-funded study called Economic Modernization through Efficient Reforms and Governance Enhancement or Emerge.
Zara clothing chain opens in RP
MADRID, Oct. 16 (AFP) — Zara, flagship outlet of Spain’s Inditex group, on Friday announced the opening of its first store in the Philippines, a 1,500-square metre (17,000 square feet) affair at Manila’s Power Plant-Rockwell supermall. The company said it planned to open an even bigger second store early next year at the Glorieta Shopping Centre in the capital as part of a major Asian expansion programme by Inditex. The group is challenging China, the world’s largest exporter of clothing, by making most of its goods at home in Spain. Earlier this year the Zara fashion chain moved in on prime sites in the Indonesian capital Jakarta and Inditex, known for its "just-in-time" stock turnaround strategy, also announced new stores for Japan, where it now has 17. The company, having moved additionally into Singapore and Malaysia, plans expansion into China and Thailand.
Cityland to issue P
595-M STCPs
Cityland Development Corp., a real estate concern, said it plans to raise
P595 million through the issuance of short-term commercial papers. Proceeds from the issue will be used to cover the funding requirements of the company, said Cityland in a disclosure to the stock exchange. Cityland said it will seek a renewal of its application to issue short-term commercial papers with the Securities and Exchange Commission for the capital raising plan. This is a standard requirement under SEC rules for companies seeking to issue commercial paper.
The Government Service Insurance System’s (GSIS) own banking center at its main office in Pasay City is now fully operational with the opening early this week of a branch of the Philippine National Bank (PNB) in the center, joining Union Bank of the Philippines (UBP) which also has a full service branch there since May this year. The two banks are the official depositories of the GSIS, and the operations of their branches at the main office will further bring closer GSIS services to its members and pensioners. GSIS President and General Manager Winston Garcia said the full operation of the GSIS banking center, located at the ground floor of the GSIS central office in Pasay City, will ensure that members and pensioners can immediately deposit or negotiate their checks upon their release. PNB currently services GSIS old age and survivorship pensioners while Union Bank is the partner bank of the GSIS in its Ecard program which facilitates online disbursement of loans and claims to GSIS members. Aside from the branches of the two banks, Union Bank likewise maintains two automated teller machines (ATM) at the third floor lobby of the GSIS main office for the convenience of its members, clients and visitors.
PSE: Teach securities in schools
The Philippine Stock Exchange (PSE) is advocating for capital market, securities and investments to be made as a required subject in the business curricula of colleges and universities in the country. PSE President and Chief Executive Officer Francis Lim explained this would improve not only the competency of prospective capital market practitioners but also would increase investment awareness and develop an investment-conscious culture among the Filipinos, and in the process, contribute to the country’s economic development. Lim noted less than 1 percent of the Philippine population actively invests in the stock market. There is strong perception that the stock market is only for the chosen few and that only big investors can gain from investing in the market, he said.
ICTSI forges Aussie joint venture
International Container Terminal Services Inc. (ICTSI), is setting up a corporate vehicle to pursue projects in Australia. In a disclosure to the Manila stock exchange, ICTSI said the establishment of Australian International Container Terminal Ltd. is still in process. "It is a corporate vehicle that will be used to pursue projects in Australia. This corporate vehicle will be activated only when a project is obtained," said ICTSI. The port operator said that, at this time, it has yet to enter into any binding agreement for proposed projects in Australia. ICTSI expects to spend an estimated A$200 million pursuing projects in Australia. But the company said: "This amount has not been allocated at this time." ICTSI said the joint venture’s primary targets will be Sydney’s Port Botany, the Port of Melbourne, and the Port of Fremantle in Western Australia. It said the company is prepared to invest in excess of A$200 million as a "first phase" investment wherever it can secure port land.
The Bangko Sentral ng Pilipinas said the thrift banking sector’s loans to the real estate industry was up 12.5 percent to
P53.9 billion in the first half of the year, from P47.9 billion the same period in 2004. Compared to the previous quarter, the central bank said thrift banks’ exposure to the real estate sector rose 3.8 percent from P51.9 billion. Real estate loans made up 30.5 percent of the industry’s total outstanding loans. The bank proper of thrift banks accounted for 99 percent total real estate loans, while the industry’s trust departments held only 0.1 percent. The BSP said real estate loans is also 99.5 percent of the P54.2 billion total exposure to the real estate industry. The remaining P297 million or 0.5 percent was in the form of debt and equity investments. The majority of real estate loans or 72.8 percent or P39.2 billion was granted for the acquisition of residential property by individual homeowners and borrowers. The balance of 27.2 percent of P14.7 billion was used for the construction and development of real estate properties for commercial purposes. 
