Philippine Local and Foreign News – January 2017

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here’s an article from for your reference :

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Nobody ‘stealing’ your jobs, You spend too much on wars, Alibaba founder tells US

Chinese billionaire and Alibaba founder Jack Ma believes that improper distribution of funds and hyper inflated US military spending, not globalization or other countries “stealing” US jobs, is behind the economic decline in America.

The Chinese business magnate earlier in January met with US President-elect Donald Trump, who has bemoaned the loss of American industry and jobs due to the outsourcing of labor to countries like Mexico and China. Ma, however, has a different view of what is behind the US economic decline.

“Over the past thirty years, the Americans had thirteen wars spending 40.2 trillion dollars,” said Ma, speaking at the World Economic Forum in Davos. “What if they spent a part of that money on building up the infrastructure, helping the white-collar and the blue-collar workers? No matter how strategically good it is, you’re supposed to spend money on your own people.”

“And the other money which I’m curious about is that when I was young, all I heard about America was Ford and Boeing and those big manufacturing companies. The last 10-20 years, all I heard about is Silicon Valley and Wall Street,” he continued.

“And what happened? The year 2008: the financial crisis wiped out 19.2 trillion dollars in the USA alone and destroyed 34 million jobs globally. So what if the spent on Wall Street and the Middle East was spent on the Mid-West of the United States, developing the industry there? That could change a lot.”

According to the Stockholm International Peace Research Institute , the United States spent $596 billion, or 3.3 percent of its GDP, on military expenditure in 2015, which is higher than any other country in the world. In Ma’s opinion, this is partly responsible for the loss of jobs in America’s Rust Belt.

“So it’s not that other countries steal jobs from you guys, it is your strategy! You do not distribute the money in a proper way,” he summarized.

Ma also expressed the view that overall globalization was a positive thing as it had brought many benefits to both China and the world. However, it should be improved by making more room for small businesses rather than the current system run by the World Trade Organization (WTO), which was developed to protect corporate interests.

“The WTO was great but it was mainly designed for developed countries and big companies. There’s no opportunity for small business. We want to build up an EWTP – an Electronic World Trade Platform – to support young people, small business.”

here’s an article from correspondent, Karen Lema; Editing by Biju Dwarakanath for your reference :

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Philippines raises $500 mln from New Bond Offering

Jan 19 The Philippines, one of Asia’s most active sovereign bond issuers, raised $500 million from a new 25-year U.S. dollar bond offering, in a sign of investor confidence in the country and the new government under President Rodrigo Duterte.

The bonds, which attracted strong demand amid financial market volatility, were priced at par with a coupon of 3.7 percent, below the initial guidance of 3.95 percent, the Department of Finance said in a statement on Thursday.

It was the tightest-priced long-dated global bond offering ever issued by the Philippines, which also switched $1.5 billion worth of new 25-year global bonds with shorter-dated and more expensive debt.

Global investors across Asia, the United States and Europe took part in the $2 billion bond deal, National Treasurer Roberto Tan said, adding that the new money component of $500 million and switch tender of $1.5 billion were both oversubscribed.

Tan said the successful issue was a “testament to the resilience of the Philippine economy as well as the strong faith that these investors have in the Duterte administration in executing and implementing reforms and strategies.”

The Philippine economy grew at its fastest pace in more than three years in the third quarter, most of Duterte’s first 100 days in office, setting him up to meet the 6-7 percent growth he set for 2016.

Duterte, who was elected in May on a promise to wipe out drugs in the Philippines, has promised to continue the reforms of his predecessor that helped the economy grow more than 6 percent on average, its best six-year record in four decades.

Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered Bank, and UBS acted as joint global coordinators, dealer managers and bookrunners for the transaction.

The Philippines’ last U.S. dollar issue was in February 2016 when it sold $2 billion of 25-year bonds also at 3.7 percent, the lowest ever.

It has relied more on onshore funding in recent years and has a history of issuing sovereign bonds early in a year hoping to get more favourable terms.

here’s an article from Business World correspondent, Keith Richard D. Mariano for your reference :


2016 GDP growth seen hovering around 7%

PHILIPPINE ECONOMIC GROWTH last year is expected to have hovered around the top end of the government’s 6-7% target on the back of robust household consumption, strong investments and continued improvement in state spending, according to separate estimates issued on Friday.

The government is scheduled to report fourth-quarter and full-year 2016 gross domestic product (GDP) growth on Jan. 26. GDP expanded by 7.1% in the third quarter — the fastest in more than three years — bringing the three-quarter average to seven percent that was already at the top end of the official full-year goal. GDP needed to advance by at least 6.9% in the final three months to reach the upper end of the government’s 6-7% annual target

GDP should have expanded by more than 7% last year, according to Moody’s Analytics, as the fourth-quarter reading likely logged another three-year high on the back of sustained strength in domestic demand.

In a report released on Friday, the economics research arm of Moody’s Corp. projected a 7.2% increase in the country’s GDP for the final quarter of 2016.

If the forecast turns out accurate, the economy will register its fastest quarterly growth in more than three years or since expanding 7.9% in the second quarter of 2013, according to data from the Philippine Statistics Authority (PSA).

Also, the projection will bring the economy’s annual growth above seven percent and beyond the 5.9% recorded for 2015 and 6.1% in 2014. It will settle only a notch lower than the 7.1% registered in 2013.

“The main driver of output growth will continue to be domestic demand, with private consumption and investment both expanding rapidly,” Moody’s Analytics noted in its Asia-Pacific Economic Preview for Jan. 23-27.

“Goods exports should also post a modest improvement compared with previous quarters because of the uptick in global demand in recent months,” it added.

“This would be the seventh consecutive quarter in which year-on-year GDP growth accelerated.”

Industry accelerated 8.6% in the third quarter from the 7.1% in the preceding three months, following a 15.5% rise in construction and 6.9% in manufacturing. Agriculture further supported the economy by making a 2.9% rebound from five quarters of contraction.

On the expenditure side, household spending remained among the Philippines’ growth drivers, increasing 7.3% on the backdrop of low inflation, low interest rates and better labor market conditions.

The economy, however, drew its strength mainly from capital spending in the third quarter. Construction grew 16.8%, faster than the previous quarter’s 15.4%, as the government and the private sector accelerated their investments.

With the 7.2% growth forecast for the final quarter, the Philippines will exceed the 6.5% annual clip projected by Moody’s Investors Service last October.

The global debt watcher upgraded its growth forecast from 6.2% — before the release of the third-quarter GDP report — on expectations that robust domestic demand and service exports will cushion the Philippines from external headwinds.

Moody’s also expected the “well-defined” development agenda of the Duterte administration to anchor economic and fiscal governance in the Philippines despite uncertainty over policy direction.

It cited the acceleration of infrastructure development and the passage of comprehensive tax reform as credit positive.

The full-year growth projection of Moody’s compares to Fitch Ratings’ 6.1%, Standard and Poor’s Rating Services’ 6.6%, the United Nations’ 6.3%, International Monetary Fund’s 6.4%, as well as the World Bank’s and Asian Development Bank’s 6.8%.

For this year, Moody’s, Fitch and S&P projected a growth of 6.5%, 6% and 6.4%, respectively, for the Philippines. The multilateral lenders likewise expected the economy to sustain an above-6% expansion.

Australia and New Zealand Banking Group Ltd. (ANZ), however, expects GDP growth “likely eased” in the fourth quarter due to a “weakening trend” in industrial production.

“We expect the Philippines’ GDP growth to have eased to 6.1% y/y in Q4, leading to an average of 6.7% for 2016,” ANZ said in the Asia Macro Strategy Weekly it released on Friday.

“Quarterly growth in industrial production has eased in the two months to November, indicating a weakening trend,” it explained, adding, however, that “[s]trong growth in public spending should have provided an offset and kept the growth in total investment robust.”

This year, ANZ said it expects Philippine GDP growth to pick up to 6.9% against the government’s 6.5-7.5% target, before easing to 6.2% against an official 7-8% goal.

Inflation rate will remain generally supportive of growth, keeping within the government’s 2-4% target range from this year onward though picking up to 3.1% and 3.2% in 2017 and 2018 from last year’s actual 1.8%.

Relatively strong economic growth and on-target inflation should give the central bank sufficient room to keep monetary policy steady at least within this semester, but ANZ expects the Monetary Board to raise the policy rate by a quarter of a basis point (bps) to 3.25% when it meets on Sep. 21 and then by another 25 bps on Dec. 14.

Adding pressure to Philippine monetary policy is the expectation by the US Federal Reserve of three more rate increases this year after the one last month — which was the second after nearly a decade of near-zero rates as the world’s biggest economy lately bared signs of relatively steady improvement.

here’s an article from Manila Bulletin’s correspondent, Ben R. Rosario re status on estate taxes :
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Reduced Estate Tax bill advances

The passage of the legislative proposal reducing estate tax rates and granting amnesty to delinquency in payment of the said tax will boost the government’s bid to raise more revenues from inherited fortune.

Authors of the bill that proposes estate tax rate reduction and amnesty for delinquent estate taxpayers aired this optimism as they cited the House Committee on Ways and Means swift action on the twin bill.

Reps. Jesulito Manalo (Ankla Party-list), Eugene de Vera (ABS Party-list) and Miro Quimbo (LP, Marikina City) , authors of the consolidated bill on estate taxes, aired optimism that the measure will win House approval before the legislative break in May.

On Wednesday, the ways and means panel unanimously approved the House bill 3010  which grants amnesty to heirs who have not paid estate taxes from 2016 and prior years.

Manalo and De Vera said the House panel also approved a six percent estate tax, reduced from the current 20 percent.

Under the bill, heirs will pay six percent of the decedent’s net estate within two years prior to the enactment of the bill.

here’s an article from re UnionPay Chip Cards :

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Six Asia-Pacific countries adopt UnionPay Chip Card Standard

UnionPay International Co Ltd, a subsidiary of China UnionPay, signed a chip card standard licensing cooperation agreement with six member institutions of Asian Payment Network (APN) on Wednesday, signaling a new breakthrough in the globalization of China’s financial technology standards.

With the cooperation, the major switch networks in Singapore, Thailand, South Korea, Malaysia, Indonesia and the Philippines will adopt UnionPay chip card standard in card acceptance and card issuance.

The agreement will help to promote the payment industries in these markets to upgrade from magnetic stripe cards to chip cards, and paves way for the roll-out of UnionPay contactless, mobile and wallet payment products in these markets.

Fan Yifei, vice-president of the People’s Bank of China, said: “China’s payment industry is expanding and growing rapidly, and it is playing an increasingly significant role in promoting e-commerce, enhancing financial inclusion, meeting consumers’ diverse demands and fueling economic growth.”

“APN members’ adoption of UnionPay chip card standard means that the bank card services provider’s technology has been recognized by the international market. The cooperation also helps promote the upgrading of digital payment industry in these countries and regions.”

He added that UnionPay and other institutions should maintain good contacts with these markets and offer excellent services to ensure the successful landing of these projects.

Currently, UnionPay acceptance network operates in 160 countries and regions, and 40 of those have issued UnionPay cards. While promoting cross-border businesses, the company is also endeavoring to explore new expansion models and to accelerate the localization of its business outside of Chinese mainland.

Ge Huayong, chairman of China UnionPay, said: “Since 2014, UnionPay has taken active part in the construction of financial infrastructure in many Asian countries. This agreement signing with APN members will help realize the interconnection among payment networks in the Asia Pacific.”

“It will also serve the financial exchanges between these countries and regions, and facilitate residents in the region to make cross-border payments, and promote the expansion of chip card-based innovative payment products such as UnionPay mobile QuickPass in the region.”

here’s an article from Sunstar’s corrrespondent, Marchel S. Espina on the proposed Iloilo Guimaras Negros Cebu Bridge

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$1-B bridge connecting 4 Visayas islands to be completed in Duterte’s term

THE $1-billion bridge connecting the four islands in the Visayas is expected to be completed within the term of President Rodrigo Duterte.

Department of Public Works Secretary Mark Villar said the Iloilo-Guimaras-Negros-Cebu Link Bridge is the “most ambitious bridge program in the history of our nation.”

Villar, along with National Economic and Development Authority Director General Ernesto Pernia, Transportation Secretary Arthur Tugade, and Bases Conversion and the Development Authority President and Chief Executive Officer Vivencio Dizon, held a press conference Thursday, to bare the nine infrastructure projects of the Duterte administration, which will start construction next year.

The administration wants to decongest Manila and disperse the development in the regions.

Villar said the Iloilo-Guimaras-Negros-Cebu Link Bridge project, after its completion, is seen to replace San Juanico Bridge, which links Samar and Leyte, as the longest bridge in the country.

He said the length of the bridges that will connect Iloilo, Guimaras, Negros and Cebu, ranges from two to 10 kilometers.

“Once finished, you will be able to take a road trip to Iloilo and Cebu,” Villar said.

He said that 25 percent of the budget is allocated to the nationwide decongestion program of the administration.

Pernia, for his part, said the infrastructure projects, including the Iloilo-Guimaras-Negros-Cebu Link Bridge, have gone through the “eye of the needle” and are ready to be implemented by the concerned agencies next year.

He said the projects are already in the state of bidding, adding that it will generate more jobs once the construction begins.

Pernia added that the “work regimen of 24 hours a day, seven days a week” will hasten the construction of the infrastructure projects.

He warned though that the works can cause inconvenience to the public. “Before the country can rise up and be world-class, there will be some inconvenience.

If there is construction going on, it can cause inconvenience,” he added. Tugade, meanwhile, said the infrastructure projects can address unemployment and traffic problems in the country.

“Infrastructure means connectivity and mobility, connectivity among local government units and mobility to go to one place to another,” he added.


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Robert G. Sarmiento Properties
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