Business News:
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Economy crawls to 5.6% growth in Q2
By Ted Torres and Lawrence Agcaoili (The Philippine Star)
Updated August 28, 2015 - 12:00am
MANILA, Philippines - The Philippine economy crawled to a 5.6 percent growth in the second quarter, falling below the government’s target, but remains on track to sustain a high growth trajectory in the next quarters, the country’s chief economic planner said yesterday.
This brought the first semester GDP growth at 5.3 percent, which would need to accelerate in the second half to hit the government’s seven- to eight-percent growth target for 2015.
“Amid ongoing events in the global economy that may affect the country, the quality and the rate of current growth of the Philippine economy give us some assurance that, with greater vigilance and persistence in pursuing economic and governance reforms, we can withstand the volatile markets overseas, Economic Planning Secretary Arsenio Balisacan said.
The second quarter growth in the gross domestic product (GDP) is an improvement from the five percent pace in the first quarter – a three-year low – but slower compared to the 6.4 percent expansion a year earlier.
“Realistically, it would seem that a six-percent full year GDP growth would be better, since we have to grow an average 6.5 percent just to stay within the six percent growth,” Balisacan said in a press briefing yesterday.
“As one of the countries with a respectable growth compared to other emerging Asian economies, the Philippines remains an attractive market and investment destination. Our economic fundamentals are still strong,” he said.
Jeff Ng, economist at Standard Chartered Bank, said the GDP expanded 1.8 percent quarter-on-quarter in the second quarter compared to a flat growth in the first quarter, but would have to grow between 6.7 percent and 7.7 percent in the second half to achieve the revised growth target of six percent to 6.5 percent.
The country now ranks third among the fastest-growing economies in Asia, behind China and Vietnam, Balisacan noted.
He attributed the poor performance of the economy mainly to the El Nino phenomenon, which continued to choke the expansion of the agricultural sector.
The agriculture sector contracted 5.9 percent in the first six months, a reversal of the 3.4 percent expansion in the same period last year.
The Bangko Sentral ng Pilipinas (BSP) said the faster growth in the second quarter from the first quarter gives authorities more space to keep its current monetary policy settings.
BSP Governor Amando Tetangco Jr. said the higher GDP growth in the second quarter was supported by solid domestic aggregate demand, particularly consumption and capital formation offsetting the decline in exports.
“With the second quarter number and given the current operating environment, we can expect economic performance that is still strong, albeit more modest than the government’s full year target. With this outturn, there may be no need for any immediate recalibration of monetary policy settings,” he said.
He added the BSP would continue to monitor external developments after the global stock market rout last Monday, the impending interest rate hike the US Federal Reserve, the debt crisis in Greece, the global economic slowdown, among others.
“We will also remain watchful of global developments to see how these would affect domestic growth and inflation dynamics,” the BSP chief said.
The BSP’s Monetary Board has kept key policy rates unchanged since September last year. The overnight borrowing rate is pegged at four percent while the overnight lending rate is at six percent.
Meanwhile, local and foreign business groups lauded the local economy’s ability to withstand a global economic meltdown but questioned the government’s ability to accelerate growth moving forward.
The country’s business community was generally satisfied with the 5.6 percent GDP growth in the second quarter which was lower than what the government was expecting.
Makati Business Club chairman Ramon del Rosario said the second quarter GDP growth was realized in spite of weak performance in agriculture and exports and was spurred by welcome increases in public spending.
“It is hoped that continued healthy public spending especially in the context of the coming 2016 elections and stronger holiday spending and OFW remittances will give our economy enough of a boost to offset the effects of El Nino and the economic weakness of major countries to still allow us to achieve a full year growth of 6-6.5 percent,” Del Rosario said.
“GDP growth slightly lower than expected but okay in the light of worldwide economic downturns,” Management Association of the Philippines (MAP) president Francisco Del Rosario Jr. added.
MAP’s Del Rosario, however, said the country should expect further roadblocks ahead especially with the coming elections, China’s economic slowdown, and the capital market’s uncertainties.
“Philippines should continue public-private-partnership (PPP) projects, removing foreign investment restrictions, pass Freedom of Information bill and form Department of Information and Communications Technology for IT development. Also justice system should be strengthened and corruption cases finalized. Long term development plan should be completed and institutionalized,” he said.
This was supported by Semiconductor and Electronics Industries in the Philippines Inc. president Dan Lachica, who said the local economy may not get better given global economic conditions such as currency devaluation of China and weaker economies of developed nations.
Lachica said exports, one of the main drivers of the economy, may also soften.
Foreign business groups, meanwhile, believe the future is bleak for the local economy if no immediate actions are taken on infrastructure development and public spending.
“The GDP growth is lower than expected and reflects government’s continuing delay in getting infrastructure projects implemented. Another issue is the low level of foreign direct investment due to the restrictive policies. If growth is to accelerate in the second half, these issues need to be addressed now,” said Henry Schumacher, vice president for external affairs at the European Chamber of Commerce of the Philippines.
For John Forbes, senior adviser at the American Chamber of Commerce of the Philippines, the second quarter Philippine economic growth was not surprising as most economies globally are going down.
“So in that sense, it could have been worse. On the other hand, the government can do more. What has to be done it more government spending. Governments have the power to spend in order to stimulate economy. It’s not that the government in the Philippines has inadequate funds, but there is an unwillingness to have a larger deficit and there is a weakness in the bureaucracy to push more and more projects out,” Forbes said.
“So now, I’m worried about three things. One is weak government spending, second is the El Nino and third is the country getting very bad reputation internationally for port congestion, airport congestion, and traffic congestion which can be fatal to GDP growth,” he added.
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Economy crawls to 5.6% growth in Q2 | Business, News, The Philippine Star | philstar.com
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Index treks back to 7,000-point level
By Iris Gonzales (The Philippine Star)
Updated August 28, 2015 - 12:00am
MANILA, Philippines - The Philippine Stock Exchange index PSEi continued to recover yesterday as investors took their cue from a Wall St. rally and cheered the latest economic growth figures.
“The rebound of the market is a welcome relief amidst the uncertainties in the global markets. The second quarter growth numbers highlight the resilience of the economy despite challenges abroad and we hope that investors continue to look at the Philippines as a viable investment,” PSE chairman Jose T. Pardo said.
The main composite index surged 154.17 points to close at 7,022.09, while the broader All Shares index gained 74.93 points to finish at 4,006.37.
Joseph Roxas, president of Eagle Equities said the rally in Wall St. was a bigger factor that pushed share prices up than the latest economic growth figures.
“That (GDP) takes a backseat to wild gyrations in international markets,” Roxas said.
The Dow Jones Industrial Average surged 619.07 points to settle at16,285.51, while the Shanghai Composite index was up 5.34 percent to 3,083.591.
Meanwhile, the PSE said there were no issues encountered yesterday in the trading terminals. The PSE halted trading on Monday and Tuesday as it observed data transmission issues in the front end terminals used by the brokers.
“The PSE has put in place fixes to the technical issues it encountered and we have seen trading operating normally. Rest assured, the Exchange continues to monitor the situation,” PSE chief operating officer Roel A. Refran said.
Value turnover rose to P14.586 billion. Advancers beat decliners, 139 against 45, while 34 stocks were left unchanged.
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Index treks back to 7,000-point level | Business, News, The Philippine Star | philstar.com
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Inflation seen still below 1% in August
By Lawrence Agcaoili (The Philippine Star)
Updated August 28, 2015 - 12:00am
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) sees inflation falling below one percent in August due to cheaper power rates as well as the steady decline in oil prices.
BSP Governor Amando Tetangco Jr. said inflation is likely to settle between 0.2 and one percent in August after easing to a new record low of 0.8 percent in July.
“August inflation could be within 0.2 to one percent range, as continued downward adjustments in power rates and domestic oil prices could temper inflation in the month,” he said.
He added that base effects could also be at play.
Early this month, the BSP lowered its 2015 inflation forecast to 1.9 percent instead of the 2.1 percent projection made in June on the back of declining food and oil prices.
The central bank, however, retained the 2.5 percent inflation forecast for next year.
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Tetangco said inflation would likely pick up and fall within the two to four percent target of the BSP next year.
“For next year, however, we see inflation moving up to within target. Given the rebound in the second quarter GDP from the first quarter and the lags of monetary policy, there may be no need as yet to adjust policy,” he added.
The BSP chief explained monetary authorities would continue to monitor domestic and external developments such as the prolonged El Niño, the impending interest rate increase by the US Federal Reserve, the global economic slowdown, the stock market crash in China, among others.
“We are on the lookout for developments in oil prices, manifestations of El Niño, and financial market volatility as part of our surveillance to see if there is a need to adjust the stance of policy,” Tetangco said.
ING Bank Manila chief economist Joey Cuyegkeng said monetary authorities are likely to put on hold any interest rate adjustment in the near term.
“Monetary policy settings are likely to remain steady in the very near term while BSP remains focused on possible risks to inflation and financial sector stability,” Cuyegkeng said.
Cuyegkeng said the BSP is likely to report a modest liquidity growth for July amid the robust demand for corporate debt issuances and steady benchmark government yields.
He said upside inflation risks from El Niño continue to preoccupy BSP assessment and the central bank’s inflation outlook over the policy horizon.
“Deflation risk though is lurking as oil prices remain soft and near seven year low. Global commodity prices have also softened with China’s economic slowdown,” Cuyegkeng added.
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Inflation seen still below 1% in August | Business, News, The Philippine Star | philstar.com
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Military and Defense News:
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Army prepares issuance of new, improved rifles
Ruser Mallari
August 27, 2015
The Philippine Army said that it is preparing to issue to its troops the newly procured and improved 5.56mm R4A3 carbine rifles from Remington. The issuance will be done as soon as the required inspections and tests are finished, the Army said in a statement.
“The Army has procured a total of 56,843 carbine rifles as part of its capability upgrade program. Out of this total procurement, 44,186 rifles are now on-hand of which 24,300 are now ready for issuance and 19,866 still has to undergo ballistic test for record purposes,” the Army said.
The ballistic test is being conducted by Philippine National Police Crime Laboratory using Integrated Ballistics Identification System (IBIS).
According to Army, IBIS is a computer-based system which has the capability to capture, store, rapidly compare and retrieve digital images of cartridge casings (shells) and bullets for the purpose of connecting or tracing this to the guns from which these were fired.
“With these new upgraded weapons, the Philippine Army is on the right track of transforming into a modern Army that our country deserves to have,” the Army said. Procurement of the rifles is under the Revised AFP Modernization Act under RA 10349 signed in December 2012 seeking to develop a credible strategic Armed Force and the professionalization of the AFP.
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Army prepares issuance of new, improved rifles | Ang Malaya Net
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USPACOM commander receives thorough briefing from West PHL Sea military commander
Philippine News Agency
August 27, 2015
A “meeting of the minds,” this was what the Armed Forces of the Philippines (AFP) called the visit of US Pacific Command head Admiral Harry Harris to Western Command (WESCOM) headquarters in Puerto Princesa, Palawan Thursday. WESOM’s area-of-responsibility includes islands of Palawan and Kalayaan, including the disputed Spratly Islands group.
“Admiral Harris wanted to be appraised of the situation on the ground and follow on a previous meeting with Vice Admiral Alex Lopez, Commander of WESCOM who he met earlier in Singapore during the Shangri-La Dialogue,” said AFP spokesman Col. Restituto Padilla.
Harris arrived in the Philippines Wednesday and visited ranking Filipino military and political leaders making his trip to WESCOM headquarters Thursday. “Admiral Lopez afforded him a thorough organizational and situational briefing on his command and its area-of-operation,” he added.
In the same vein, the US official’s stopover at Western Command was dubbed by AFP chief-of-staff Gen. Hernando DCA Iriberri as a “sort of area familiarization for the new Commander of the Pacific Command.”
He summed Harris’ visit as a great opportunity to further enhance a long lasting and enduring alliance.
It was also in furtherance of a collective effort at ensuring regional security and stability as well as leveling of expectations.
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USPACOM commander receives thorough briefing from West PHL Sea military commander | Ang Malaya Net
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National Development News:
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Philippine Marines opens training for civilians: Be measured physically and psychologically
Grace Gonzales
August 27, 2015
The Philippine Marines is opening its training for civilians to have a taste of how Marines train. “Be measured physically and psychologically by the challenging obstacle that is both man-made and natural,” said LTCOL Stepehn Cabanlet, Philippine Navy(Marines) in a statement.
The racing with obstacles event, KARERA LAKAS PILIPINAS: The 2nd Commandant’s Cup, to be held on October 25, 2015 will simulate ‘marine life in the operational area’. The rare event will be held at the training ground of the Philippine Marine Corps in Marine Base Gregorio Lim, Ternate Cavite.
Interested civilians can choose between Astig and Bangis categories which are 5km and 10km run with obstacle courses, respectively. Registration fees are 500 pesos and 750 pesos. Races are also open for the military.
“Funds raised in this event shall be used for the MARFIT (Strength and Conditioning Program) as well as Wounded Warrior’s Recovery and Reintegration Program,” LTCOL Cabanlet said.
“A serendipitous and unsung hero of our country is hoping for your support. These soldiers has given immense sacrifice for our country to protect our freedom especially now with what’s happening in Palawan and some areas in Mindanao. We believe that the strength of the nation is the people itself,” he noted.
Registrations can be done
online or onsite at Marine Corps Special Service Office (MCSSO), Marine Barracks Rudiardo Brown, Fort Bonifacio, Taguig City during office hours Mondays to Fridays. More details at
Karera Lakas Pilipinas | Facebook
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Philippine Marines opens training for civilians: Be measured physically and psychologically | Ang Malaya Net
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