Economic

Economic

PHL GDP grows slower than expectations at 6.4% in Q1

 

The Philippine economy grew slower than expectations, expanding by 6.4 percent in the first quarter, the Philippine Statistics Authority reported on Thursday.

It was the slowest phase of growth for the gross domestic product (GDP), since it registered at 6.3 percent in the fourth quarter of 2015.

Socioeconomic Planning Secretary Ernesto M. Pernia attributed the deceleration mainly to the absence of election-related spending. "Growth last year was high due to election spending, impact of which has already dissipated," he said.

"Changing of the guards of the government really took time to settle," the Cabinet official noted.

Pernia said government spending also came in at a slower pace in the first three months of the year.

Overall the economy was slower that what was desired ... "and, for this, we are somewhat downcast because we were expecting something around the midpoint of the growth range 6.5 to 7.5 percent," Pernia said.


Financial markets react

The first quarter GDP compares with the revised 6.8 percent in the first quarter of 2016, and 6.6 percent in the fourth quarter of the same year.

Frustrated by the GDP results, financial markets reacted with a negative note. The peso weakened and shares prices faltered during the morning trade.

COL Financial Vice President and head of research April Lyn Tan noted the declines were a direct reaction to the GDP results. "The market is reacting negatively with the lower-than-expected number," Tan said.

The peso opened 8 centavos weaker at P49.840:$1 from Wednesday's close of 49.760. "Essentially, the peso's decline was a reversal of its prior gain, which was due to initial expectations of strong GDP growth in the first quarter," Land Bank of the Philippines market economist Guian Angelo Dumalagan told GMA News Online.

Pernia, who last month said the economy likely grew by 7 percent in the first three months of the year, noted on Thursday the Philippines remains one of the strongest performers among the major emerging economies in Asia.

"For the first quarter, we overtook Vietnam and Indonesia which grew by only 5.1 percent and Thailand by only 3.3 percent. We are only second to China’s growth of 6.9 percent while India’s number hasn’t come out yet," Pernia told reporters during the press briefing on the National Accounts.


Growth momentum

Pernia is adopting an optimistic view to things. "Moving forward, the domestic economy is poised to maintain growth momentum," he said.

"Government has also been busy laying down a strong foundation," he added, noting the administration plans to invest heavily in infrastructure.

The government intends to spend P8.2 trillion to finance the country's "golden age of infrastructure" over the next six years, with P860.7 billion allocated to big-ticket projects this year.

"Among the many reforms and programs are infrastructure spending as well as other government programs including capital development program," Pernia said.

"We expect construction activities and public spending to pick up sharply," he added. — with Ted Cordero/ VDS, GMA News


US stocks, dollar tumble as investors rethink 'Trump trade'

NEW YORK - Stocks on major markets and the US dollar sold off while bond yields fell on Wednesday as investors fled risky assets amid uncertainty about US President Donald Trump's ability to deliver on his tax and banking reforms and infrastructure spending.

Reports that Trump asked then-Federal Bureau of Investigation Director James Comey to end a probe into the former national security adviser have raised questions over whether Trump tried to interfere with a federal investigation.

 

US stock market declines accelerated in afternoon trading, and major US indexes ended near session lows. The Dow Jones industrial average fell 372 points, and both the Dow and S&P 500 suffered their worst percentage drops since Sept. 9.

The CBOE Volatility index, the most widely followed barometer of expected near-term stock market volatility, ended above the 15 level in its highest close since April 13. The US dollar index has now erased its post-election gains.

A small but growing number of Trump's fellow Republicans called on Wednesday for an independent probe of possible collusion between his 2016 campaign and Russia.

The news came after a tumultuous week at the White House when Trump unexpectedly fired FBI director Comey and reportedly disclosed classified information to Russia's foreign minister about a planned Islamic State operation.

Optimism over pro-growth economic policies under Trump helped drive a sharp rally in US stocks after the Nov. 8 US election. Even with Wednesday's declines, the S&P 500 stock index is up 10.2 percent since last November's US elections though.

"It's certainly a day when the chickens are coming home to roost," said Donald Selkin, chief market strategist at Newbridge Securities in New York.

"The (equity) bull market is not over by any means, but between the political stuff and the fact that the next earnings season is three months away, there's going to be a lack of motivation."

The Dow Jones Industrial Average was down 372.82 points, or 1.78 percent, to end at 20,606.93, the S&P 500 index lost 43.64 points, or 1.82 percent, to 2,357.03 and the Nasdaq Composite dropped 158.63 points, or 2.57 percent, to 6,011.24.

The Nasdaq had its worst day since June 24. Both the Dow and S&P 500 fell below their 50-day moving averages for the first time since April 21.

While previous threats to Trump's plans have rattled investors, they had failed to cause any significant pull back in stocks. The VIX last week closed at 9.77, its lowest close since December 1993.

Bank stocks, which outperformed in the post-election rally, were the worst hit on Wednesday. The S&P 500 financial sector tumbled 3 percent.

At nearly 18 times forward earnings, the S&P 500 trades at a significant premium to its long-term average valuations of 15 times, according to Thomson Reuters data.

MSCI's gauge of stocks across the globe fell 1.2 percent, while European shares ended down 1.4 percent.

"It's registering with more investors that it's going to be hard to get back on track with the latest allegations," Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Prices of bonds, seen as safe-haven assets, rallied, while yields were on track for their biggest daily percentage drops since July.

Benchmark 10-year notes gained a full point in price to yield 2.22 percent, the lowest since April 21, and down from 2.33 percent late on Tuesday.

The dollar index, which tracks the US currency against six peers and had scaled a 14-year peak of 103.82 on Jan. 3, fell 0.6 percent to its lowest level since Nov. 9, surrendering all of its "Trump bump" gains. The dollar also fell by nearly 2 percent against the yen.

In commodity markets, safe-haven gold hit a two-week high, while oil prices were higher. Spot gold rose for a fifth day and was up 1.8 percent at $1,258.38 an ounce.

Brent crude gained 1.1 percent to settle at $52.21 per barrel, while US light crude rose 0.8 percent to settle at $49.07.

Caroline Valetkevitch, Reuters

BPO office leasing deals decline in first quarter -- Colliers

LEASING DEALS involving business process outsourcing (BPO) companies slowed in the first quarter as new governments in the Philippines and the US put potential tenants in wait-and-see mode, according to property consultancy Colliers International.

 
In a briefing on Thursday, Colliers said BPOs comprised only 21% of total transactions from January to March, down from the 60% share in the same period last year. These deals accounted for a gross leasable area of 81,400 square meters (sqm) in Metro Manila during the first quarter, 35% lower than the take-up a year earlier.

The market was sustained by other traditional users of office space with a 42% share of transactions, followed by offshore gambling at 30% and government agencies at 9%. 

“First off you have political concerns, locally and overseas, and the transition period also from the Trump and Duterte presidencies that has forced some of the tenants to actually take away their position,” Colliers Senior Manager for Research Randwil Dinbo Macaranas said.

While there have been more of protectionism in the US, this has yet to translate to actual policies.

“It’s quite normal for a transitional government where you try to understand first if there will be policy changes. I think even in the US they have been more cautious, but now they’re seeing that they can proceed with business as usual so they’re going back to the table,” Mr. Macaranas said.

Longer processing of PEZA approvals likewise delayed BPO entry into the market, with 40 PEZA applications currently pending with the Office of the President. 

The result is additional pressure on rents, with PEZA-accredited buildings seen to gradually hike their rates following the tightening of the market. The emerging central business district (CBD) in the Manila Bay Area for instance has pushed rates up by 5% since the last quarter, while rates in the Makati CBD and Fort Bonifacio have increased by 1.6% and 3.3%, respectively.

Colliers said PEZA Director Charito B. Plaza is “personally following up on the approvals,” in order to fast-track the transactions.

The following quarters are not expected to sustain the first-quarter trend, as Colliers has already seen BPOs signing new deals.

“Some BPO firms are going back to the table right now, so we have new deals... Potentially there will be a rebound, that’s what we’re seeing,” Mr. Macaranas said.

Given the decline in transactions from BPOs, the consultancy advised developers to offer a balanced mix of product for various tenants to take advantage of the growth of non-BPOs.

“The Metro Manila market is characterized by high demand amid shifting tenancy profiles and increasing rents. Non-BPOs are emerging as a significant growth driver for a sector that has been BPO-reliant for years,” Colliers said.  

“We see moving forward that developers have to adjust to this to implement more flexible terms and more flexible work spaces to cater to different types of work tenants,” Mr. Macaranas added. 

Colliers said the increased demand from offshore gambling comes as no surprise, as the industry took up around 54,000 sqm during the quarter. In a statement earlier this year, Colliers noted that the Philippine Amusement and Gaming Corp. issued 35 gaming licenses in 2016, and is expected to add 25 more this year.

The issuing of licenses indicates potential demand, Colliers said, further adding that offshore gambling could reach 350,000 sqm in office space demand this year.

Other industries, including information technology companies, trading, construction, online shopping, and energy, among others, also have potential to offset any declines by the BPO industry, according to the company. -- Arra B. Francia, Business World

 

Taipan Yuchengco passes away

MANILA, Philippines - Insurance and banking taipan and former ambassador Alfonso Yuchengco passed away Saturday night. He was 94.

Yuchengco, a certified public accountant, was founding chairman of the Yuchengco Group of Companies, including the Ri-
zal Commercial Banking Corp. and Mapua Institute of Technology. He also served as chair of the boards of the Philippine Long Distance Telephone Company, Philippine Fuji Xerox, Benguet Corp., the Bank of America Savings Bank, and Asia’s Emerging Dragon Corporation, among others.

Yuchengco was born on Feb. 6, 1923 in Binondo, Manila to Don Enrique and Maria Hao Tay. A graduate of Far Eastern University, he earned his Master’s degree in Business Administration from the Columbia Business School in 1950, and has since held distinguished professorships in insurance and in finance and economics.

Yuchengco is former Philippine permanent representative to the United Nations. He also served as Philippine ambassador to the People’s Republic of China from 1986 to 1988, and to Japan from 1995 to 1998.

In 2001, Yuchengco was appointed by then-president Gloria Macapagal Arroyo as presidential special envoy to China, Japan and Korea. In 2004, he was tapped by Arroyo as presidential adviser on foreign affairs.

Among his numerous awards and decorations he received were Outstanding Manilan in Diplomacy in 1995; Order of the Sacred Treasure, Gold and Silver Star, by the Emperor of Japan (1993); and Management Man of the Year from the Management Association of the Philippines (1992).

Yuchengco’s wake will start on Tuesday, April 18, at the Santuario de San Antonio Parish at Forbes Park in Makati City, according to a Facebook post by Star columnist Krip Yuson, editor of the magazine Ermita that was published by the taipan’s son Boy in the 1970s.
(The Philippine Star)

Wells Fargo Provides Tax Time Tips and Reminders

Getting Started: A Quick Tax Guide for Everyone
https://www.wellsfargo.com/tax-center/quick-guide
April’s coming, and those same difficult questions start cropping up – How should I do my taxes this year? Should I hire somebody to do them for me? Or try to file them myself? Do I go online, or just mail them in? What forms and information should I have on-hand before I start? The answers are different for every person, but a little basic knowledge can prepare you to make the best decisions, get your taxes filed, and get on with life.
How to file taxes: choosing your filing method
As the April deadline approaches, the first decision to make is, how will you file taxes? Taxes can get done using a number of different methods, each with their own advantages and disadvantages. Here’s a breakdown of the principal methods of filing, as well as the benefits and drawbacks of each.
Tax advisors
Online tax preparation services
Packaged tax software
Fillable forms
Taxes by-mail
A tax preparation checklist: forms & other materials
Once you’ve picked your method of filing, the next step is to gather the information and forms that will be relevant to your taxes. Below is a short-list of the most common materials you’ll need to have on-hand, and where to find them. If you start doing your taxes, and you need something that’s not covered on the list below, consult with a tax advisor or take a look at the IRS Forms and Publications page.
Forms
W2 for all income sources – If you worked for a company, you need a W2 form from your employer. Employers will often send you a W2 automatically. Some employers may give you instructions to retrieve it online instead of mailing it. If you don’t get your W2, contact your company’s human resources department.
SSA-1099 for social security benefits – If you collected social security during the year, you should receive this form automatically. Copies are obtainable at https://secure.ssa.gov/apps6z/i1099/main.html.
1099-G for other government payments – You’ll receive this form from the government if you took in unemployment benefits or an income tax refund.
1099-INT, 1099-DIV, 1099-B and/or 1099-R for all money invested – By late February, you should receive any of these various forms for interest, dividends, retirement plan distributions, etc. from banks, brokers, or fund companies where you had a bank account or money invested during the tax year.
1098 – From your lender if you have a home mortgage.
Common materials
Social Security numbers – You’ll need this for you, your spouse, your children, and any other dependents. Every taxpayer needs this. For a new or replacement social security card, visit http://www.ssa.gov/ssnumber.
Prior year adjusted gross income (AGI) – This number is requested by the IRS as a key identifying piece of information. The AGI can be found on your prior year’s 1040 forms (1040, 1040A or 1040-EZ depending on how you filed). If you don’t have your tax return from last year, you can substitute your electronic filing PIN.
Electronic Filing PIN – If you filed electronically last year, you have one of these. If you don’t remember your PIN, you can use the IRS Pin Retrieval page.
Record of income and deductions – If you have income or deductions that don’t appear in the forms listed above, gather records such as bank deposits and receipts for charitable contributions.
Your bank routing number – If you want to direct deposit a refund, you’ll need this number. If you’re depositing to a checking account, the first 9 numbers from the left at the bottom of your checks is your bank’s routing number. Learn more
Your bank account number – Check your bank or other financial institution’s website to obtain your account number. If you’re a Wells Fargo customer, you can find your account number directly to the right of the routing number on your check.
Filing status
This is the first tax-specific bit of information the IRS will want to know. They use your filing status to determine the amount of your standard deduction and the tax you owe. It also helps determine which deductions and credits you qualify for.
There are five filing statuses to choose from:
Single – Your filing status is single if, on the last day of your tax year, you are unmarried or legally separated from your spouse, and you don’t qualify as a head of household or a widow(er) with dependent child (see below). Federal tax law now recognizes same-sex marriages that were conducted in jurisdictions where such marriages are legal.
Married Filing Jointly – You can choose Married Filing Jointly if you’re married and both you and your spouse agree to file a joint return. Both of you must include all of your income, exemptions, and deductions on your joint return.
Married Filing Separately – If you’re married, you can also choose Married Filing Separately. Since this filing status has the highest tax rate, you and your spouse will generally pay more combined tax by filing separately than by filing jointly. If you live apart from your spouse, and meet certain other criteria, you may be able to lower your taxes by filing as Head of Household, even if you aren’t divorced or legally separated.
Head of Household – To file with this status:
You must be unmarried on the last day of the tax year, or qualify to be treated as unmarried by living apart from your spouse for the last six months of the year;
You must have paid more than half the cost of keeping up a home for the year; and
You must have a qualifying person living with you in the home for more than half the year.
There are exceptions and special cases to this status; we highly recommend consulting a tax advisor before choosing it. If you qualify, your tax rate will be lower than rates for Single or Married Filing Separately.
Qualifying Widow(er) with Dependent Child – Only applicable for two years after your spouse dies. Your tax rate will be the same as if you filed a joint return. To qualify:
You must have been eligible to file a joint return with your spouse the year he/she died;
You can’t have remarried before the end of the year;
You must be able to claim a child as an exemption; and
You must have paid more than half the cost of keeping up the main home for your child the entire year.
Once you’ve chosen your method of tax preparation, gathered all the appropriate forms together, and considered your filing status, consult the While Filing section of our Tax Center. It has detailed information on how to report some key information as you file, such as your income, deductions, investments and homeownership.

PLDT expands network capacity in Mindanao


By Louella Desiderio (The Philippine Star) | Updated December 27, 2016 - 12:00am
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PLDT Inc. is investing in three major information and communications technology (ICT) projects in Mindanao to expand its network capacity and better serve businesses in the area.
MANILA, Philippines - PLDT Inc. is investing in three major information and communications technology (ICT) projects in Mindanao to expand its network capacity and better serve businesses in the area.

All located in Davao, the three ICT projects are PLDT’s fourth cable landing station, seventh state-of-the-art Innovations Laboratory (Innolab); and eighth data center.

The fourth cable landing station in Davao links Mindanao to PLDT’s three international gateways located in Nasugbu, Batangas; Bauang, La Union, and Daet, Camarines Norte, as well as to the telco’s international managed network with points-of-presence in Hong Kong, Singapore, Japan and the US.

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