money matters

Peso seen to remain firm vs. USD amid correction

May 28, 2019

MANILA – The Philippine peso is projected to trade between 52.00 to 52.10 against the US dollar this week after its recent correction following a two-week rally, Michael Ricafort, Rizal Commercial Banking Corporation (RCBC) Economics and Industry Research Division head, said.      The peso depreciated by PHP0.47 or 0.9 percent week-on-week against the greenback last week and closed at a two-week low of 52.16.      He explained that amid the peso’s slight weakness, several factors are seen to continue lifting it up, including the report of the government’s record-high budget surplus last April amounting to PHP86.9 billion.      He said this particular factor is positive for the country’s credit rating, which received a notch upgrade to BBB+ with Stable outlook from S&P Global Ratings last April 30, after the credit rater noted the country’s "healthy external payments position, contained fiscal deficits and stable public indebtedness”.      Another plus factor for the peso is the drop to two-month low of crude oil prices in the international market because of concerns on the US-China trade issues, which, in turn, also resulted in lower US government bond yields.      The recent cut in the Bangko Sentral ng Pilipinas‘ (BSP) key policy rates and on domestic banks’ reserve requirement rate (RRR), the seasonal increase of remittance inflows from Overseas Filipino Workers (OFWs) in line with the school enrollment period, and the tail-end of vacation spending will further boost the local currency’s strength, Ricafort said.      Recent issuances by the Philippine government of foreign currency-denominated bonds in Europe and in China are also positive for the peso, he said, adding that in recent years the local unit started appreciating against the US dollar since 2016. (PNA)

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Higher alcohol, tobacco taxes to fund Universal Health Care: Duque

May 28, 2019

MANILA -- Department of Health (DOH) Secretary Francisco Duque III on Friday stressed the importance of passing the pending sin tax bills in the Senate to ensure sufficient funding for the Universal Health Care (UHC) program and improve health condition in the country.      In a press brifieng at the Department of Finance, Duque said the DOH envisions the Philippines as one of the healthiest countries in South East Asia by 2040.      “This can only be done if we keep Filipinos healthy and we provide affordable health care to those who get sick, and these are the two main reasons why we need to increase tobacco and alcohol taxes once more,” he added.      More than being a means to raise funds, Duque said increased alcohol and tobacco taxes are a health measure which would keep Filipinos especially the youth away from smoking and drinking alcohol.      “It is harder for the youth to buy these harmful products for the youth when the prices of alcohol and cigarettes are higher. We can only reduce consumption by making these ‘sin’ products less affordable to consumers,” he said.      Citing that a million smokers quit in 2015 following the passage in 2012 of Republic Act 10351, the Sin Tax Reform Law, Duque said the alcohol and tobacco taxes must be raised once more to stop putting the lives of 250,000 Filipinos at risk every year.      “The revenues gathered from sin taxes provide the much-needed financing to realize our health reforms. More people, especially the poor, are now covered by the national health insurance program and it enabled us to scale up our non-communicable disease (NCD) prevention program and to assist our tobacco farmers,” he said.      The DOH and Philheath need a total of PHP257 billion to improve the health insurance coverage of all Filipinos and expand the benefit packages they provide.      “We need to secure sufficient and sustained resources to ensure that the health system will be set up and transformed as envisioned in the next 10 years,” said Duque, adding that President Rodrigo Duterte and the Cabinet members have approved the DOH’s proposal on increased alcohol and tobacco taxes.      Duque also urged civil society organizations, medical communities, and health advocates to continue supporting the DOH in its campaign against alcohol and tobacco.      “Three out of four Filipinos agree that tobacco taxes must be raised based on the recent Pulse Asia Survey. There is clearly a demand from the people to get this done,” he said.      There are still nine days remaining in the 17th Congress for the pending bills on increased alcohol and tobacco taxes to be passed.      According to the World Health Organization (WHO), the bills could reduce prevalence of tobacco use nationwide while providing additional revenue to fund the government’s UHC program.      The WHO said a tax of PHP90 per pack of cigarettes is projected to achieve the most substantial decline in the rate of people using tobacco.      “This translates to 14.5 percent by the end of the current administration’s term, from the 23.8 percent in 2015. A PHP60 increase, meanwhile, is expected to decrease the prevalence of tobacco use to 17.0 percent,” WHO said. (PNA)

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Online hiring in PH continues to experience positive uptrend

April 30, 2019

ONLINE hiring in the Philippines witnessed a positive year-on-year growth of 13% between March 2018 and 2019, according to data from the latest Monster Employment Index (MEI). The Healthcare industry recorded the highest demand growth with a 25% year-on-year rise in March. This was closely followed by the Consumer Goods / FMCG and Hospitality industry, both of which recorded a 24% year-on-year growth. Other industries monitored by the index recorded significant positive growth, as well, with the exception of the Education sector, which witnessed an 11% decline between March 2018 and March 2019. The Monster Employment Index (MEI) is a gauge of online job posting activity compiled monthly by Monster.com. It records the industries and occupations that show the highest and lowest growth in recruitment activity locally. When looking at specific job roles, all of the 10 occupations monitored by the Index recorded positive growth in March. Purchase/Logistics/Supply Chain professionals witnessed the highest spike in demand with a remarkable 23% year-on-year growth for the month of March, followed by Finance & Accounts talent with a 20% year-on-year growth in demand. Other occupations that experienced an impressive rise were Healthcare and HR & Admin, which saw 19% and 18% growth, respectively, between March 2018 and 2019. “Online hiring sentiment in the Philippines has been consistently rising, and much of this growth can be attributed to the government’s infrastructural reforms, together with the push for greater foreign investment,” said Abhijeet Mukherjee, CEO of Monster.com – APAC and Middle East. “Finance Secretary Dominguez recently dubbed the Philippines as the region’s next economic powerhouse, and urged American businesses to invest in the local economy. This would be a huge step forward in bringing lasting positive changes to the economy, and would be  bound to inject further growth in the local job market,” he added. The Monster Employment Index is a monthly gauge of online job posting activity, based on a real-time review of millions of employer job opportunities culled from a large representative selection of career websites and online job listings across the Philippines. The Index does not reflect the trend of any one advertiser or source, but is an aggregate measure of the change in job listings across the industry.

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Labor official fights back says govt indicators dispel IBON claim on infra project

April 30, 2019

AN official of the Department of Labor and Employment (DOLE) said excess demand for workers and improvement of wages mean that the “Build, Build, Build” (BBB) flagship program of the government is effective. Labor Undersecretary Ciriaco Lagunzad made this comment after Ibon Foundation took a swipe at the government’s infrastructure program, calling it an ineffective platform for job creation. Lagunzad said the employment surplus of workers and an increase in their salaries in the construction sector are indicators that President Rodrigo Duterte’s program is successful. “Objective indicator is if the workers’ salary increased in sub sector, construction. Remember that is economics, if there is an excess demand for workers for BBB, I’m talking of carpenters, plumbers, electricians, masons, etc,” he said in an interview on Monday. “If there is excess demand and that the wages tend to go up, that means it is effective in that sense.” Lagunzad noted that the surplus in the demand for workers has been reported by other sectors, including the manufacturing sector. “What are the other indicators? Manufacturing companies are already looking for workers in other regions because they cannot get workers here. They have to go to as far as Bicol as the labor here are hired in BBB and some go abroad. So, objectively you’re already looking, you’re seeing already the effects of an excess demand for workers in that sub sector,” he said. “Obviously, the billions and billions that go into construction will necessarily produce demand for more workers, more investments, more demand for labor so that is as far as labor market is concerned,” the DOLE official added. On the criticism that construction jobs under the project is seasonal, Lagunzad explained that those who benefited from projects, which have been completed, are not left alone since it is a continuous cycle. “Hindi naman ganun yun eh, it’s a continuous cycle. Halimbawa, ang mga backward linkages. ‘Yung negosyo ng hardware, pako, bakal, cement hindi ba lumalago ‘yun dahil nga may nagko-construct? So, dito sa backward link ang daming demand n’yan so nagke-create ng trabaho (It’s not like that. It’s a continuous cycle. For instance, backward linkages. The hardware industry, nails, metals, cement -- aren’t they growing because there’s construction? In this backward link, there’s a huge demand which helps create jobs),” he said. Backward linkage is an industry or business that supports another industry or business. “Kapag natapos na mga projects (infrastructure projects such trains, highways etc.) may maintenance ‘yan e. So in other words, these are cycles and that is the economic, the workings of the economy. Hindi ‘yung one time titingnan mo dito hindi ganun ang pag-analyze (When projects are finished, there’ maintenance. So in other words these are cycles and that is the economic, the workings of the economy. You don’t just look at it in a one-time perspective, that’s not how you analyze),” Lagunzad added. With this, he noted that there’s a side effect in the excess demand for workers, where people will find it hard to find carpenters or plumbers or they charge too much to help fix their houses. “Ang danger nga dyan, ‘yung household, mahal na ‘yung karpintero, wala ka ng makuha, mahal ang tubero. That’s the side effect (The danger here is carpenters’ rate become expensive, you can’t find one, plumbers’ rates are also expensive), the DOLE official added. Ibon Foundation earlier said the BBB program of the government is not an effective job-creating program, saying the annual job-creation rate under the Duterte administration is the lowest over the last six administrations. (PNA)

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BDO posts P32.7 Bn income in 2018; 1Q19 Core Earnings up 21%

April 23, 2019

BDO Unibank, Inc. (BDO) reported at its stockholders meeting today its full year 2018 results, with net income hitting P32.7 billion, representing a 17 per cent growth, and beating the P31.0 billion full-year guidance. The bank likewise capped another milestone as the first Philippine bank to surpass the P3 trillion mark in total assets.      The bank attributed its solid performance to strong recurring earnings from its core businesses, with sustained loan and deposit expansion on the bank’s continued branch build out in key growth areas and new markets, particularly the underserved sectors. 1Q19 Results      The bank sustained its growth momentum through the first quarter of this year, with net income advancing to P9.8 billion. This achievement was due to the continued expansion of its core banking operations, recovery of trading gains to normal levels, and strong results from bank fees and life insurance premiums.      Net interest income was a major earnings driver, rising to P27.7 billion on the continued growth in customer loans and CASA expansion, resulting in higher net interest margins. Meanwhile, non-interest income went up to P14.9 billion, led by banking fees and insurance premiums. Trading and FX gains normalized to P2.2 billion from just P24 million a year-ago, given adverse market conditions during 1Q 2018 when the market declined by 7 per cent. Excluding the increase in trading gains, core net income would have risen by 21 per cent.        Operating expenses rose by 22 per cent to P28.3 billion. Exclusive of policy reserves and volume-related expenses, Opex growth would have been 13 per cent due primarily to continuing business and branch expansion as well as investments in IT upgrades implemented early this year. Meanwhile, the Bank set aside P1.3 billion in provisions, with gross non-performing loan (NPL) ratio steady at 1.2 per cent, and NPL cover higher at 163 per cent from 156 per cent in the 1Q 2018. Return on Common Equity (ROCE) however, stood at 11.8%, still below regional peers.      The Bank’s capital base increased to P338.4 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) at 14.0 per cent and 12.4 per cent, respectively.      BDO set its earnings guidance at P38.5 billion for the full-year 2019, as the Bank leverages on its strong business franchise and extensive distribution network while executing its strategy to expand across high-growth areas and underserved segments.

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Personal Remittances Reach US$5.3 Billion for the First Two Months of 2019

April 15, 2019

Personal remittances from overseas Filipinos (OFs) amounted to US$2.56 billion in February 2019, higher by 1.2 percent from US$2.53 billion in February 2018. This brought the cumulative remittances for the first two months of the year to US$5.30 billion, representing a 2.3 percent year-on-year growth, BSP Governor Benjamin E. Diokno announced today.1Personal remittances from sea-based and land-based workers with work contracts of less than one year rose by 8.5 percent to US$0.57 billion in February 2019 from US$0.53 billion in February 2018. This compensated for the 0.43 percent decline in the personal remittances from land-based workers with work contracts of one year or more, to US$1.93 billion from US$1.94 billion. Meanwhile, cash remittances from OFs coursed through banks posted a 1.5 percent growth to US$2.30 billion in February 2019 from US$2.27 billion last year. For the first tw o months of 2019, cash remittances amounted to US$4.78 billion, an increase of 3.0 percent compared to the US$4.65 billion level in the same period last year. This growth was supported by the increase in remittances from both land-based (US$3.73 billion) and sea-based (US$1.06 billion) workers, which rose by 1.0 percent and 10.5 percent, respectively. By country source, the United States registered the highest share of overall remittances for the period at 35.5 percent. It was followed by Saudi Arabia, Singapore, United Kingdom, United Arab Emirates, Japan, Canada, Qatar, Hong Kong, and Germany.2 The combined remittances from these countries accounted for 77.3 percent of total cash remittances for January to February 2019.

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