4th investment grade for Phl soon

Posted on Saturday Jul 27th at 12:00am

By Zinnia B. Dela Peña

MANILA, Philippines - Finance Secretary Cesar Purisima sees the Philippines receiving its fourth investment grade rating soon as President Aquino’s drive to transform the country into one of the region’s fastest-growing economies continues to gain strength.

Purisima issued this statement following Moody’s announcement it was reviewing Philippine government bond and currency ratings for a possible upgrade on the back of the country’s strong economic gains, political stability and improving government finances.

The economy grew 7.8 percent in the first quarter of the year, making it the fastest-growing economy among Asian countries. 

The impressive growth was attributed to the strong performance of manufacturing and construction sectors as well as the increase in government and consumer spending.

Fitch Ratings gave the Philippines its first investment grade rating in March followed by Standard & Poor’s and the Japan Credit Rating Agency in May.

Continued investment flows into the Philippines likewise contributed to the upgrade of the country’s ratings.

“The status for upgrade should be seen as recognition of the positive changes in the economy brought on by the Aquino administration’s commitment to good governance,” Purisima said.

“By Moody’s own implied bond ratings, the Philippines has long been one of the most underrated countries in the world, with strength far exceeding our current credit rating. I am confident that as Moody’s continues to evaluate the Philippines they will see that the foundations for sustained, resilient growth have been laid, with a bright future for us on the horizon,” Purisima added.

For his part, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said the government is eyeing an investment-grade status “sooner than earlier expected.”

“With the statement of Moody’s, we are hoping to receive investment grade rating sooner than we earlier expected. The team will be here next week...,” BSP Governor Amando Tetangco Jr. said.

The review, Moody’s said in its statement, is expected to last for three months, after which a decision either to raise or maintain the country’s rating- a notch below investment grade - will be announced.

 “Soon after the visit, a committee meeting is expected. Hopefully, they would be convinced even more that the positive over-all performance and the reforms are sustainable,” Tetangco said out.

“The governance changes so far could cement economic growth on a higher trajectory,” he added.

The Aquino administration believes investment grade ratings would lower debt interest payments, open more credit avenues, and give the country more foreign investments. - With Prinz Magtulis

© Copyright {2012} Philstar.com

Philippines ships first 'atsuete' shipment to Vietnam

MANILA, Philippines - The Vietnamese can now color their food the Filipino way as Manla sent the first 20 metric tons ofatsuete or annatto seeds to their country.

"The country’s farmers scored another breakthrough," the Department of Agriculture said in a statement Wednesday after a 20-foot container van was loaded with 400 sacks of atsuete seeds, a food colorant and additive, worth P1.3 million.

Assistant Agriculture Secretary Dante Delima said that most of the atsuete products came from Arakan, North Cotabato and from Davao City, where they were bought from local farmers at P45 to P50 per kilo.

Vegetable Importers, Exporters and Vendors Association of the Philippines president Leah Cruz said, that the Philippines still imports raw and poweratsuete at 10,000 metric tons yearly, but the Vietnamese offered a worthy deal.

"They took the opportunity to export because the Vietnamese buyers offered a good price, and preferred the Philippine atsuete, which is of better quality than those from Africa, where they regularly import," Cruz said.

Cruz's company together with non-profit groups Lingkod Saka, Inc. and Sikat Saka are currently negotiating on a next batch of seeds at 40 metric tons to send to Vietnam, which is not the only country that has a demand for the red orange colorants.

"Importers from Hawaii and the US mainland are also interested to buy Philippine atsuete," Cruz added.

Atsuete is frequently used to make local dishes such as kare-kare and paella look more appetizing.

IMF exec: Philippines economic growth momentum high

Posted on Wednesday Jul 10th at 4:58pm

By Prinz Magtulis

MANILA, Philippines - The Philippines could buck the trend of slowing growth in Southeast Asia, with robust domestic demand and credit growth fuelling faster economic expansion this year and the next, the International Monetary Fund (IMF) said.

Growth could hit seven percent this year before slowing down to six percent in 2014, IMF resident representative Shanaka Jayanath Peiris told reporters in a briefing on Wednesday.

The latest forecasts were faster than the six percent and 5.5 percent for both years seen since last November and took into consideration the “very strong” 7.8 percent first-quarter uptick that beat market expectations.

The Aquino administration has targeted growth at six- to seven-percent this year and 6.5-percent to 7.5-percent in 2014.

“The economic growth momentum here is higher. The region has been softer than expected. Most countries’ [forecasts] were reduced but the Philippines is an outlier,” Peiris said.

On Tuesday, the Washington-based multilateral lender released its World Economic Outlook Update that showed slowing emerging markets growth pulling down global growth this year and the next.

Emerging economies could grow five percent this year and 5.4 percent next year, slower than the 5.3 percent and 5.7 percent projected last April.

Under this, the so-called Asean-5— Indonesia, Malaysia, the Philippines, Singapore and Thailand— could expand 5.6 percent in 2013 and 5.7 percent in 2014, down from 5.9 percent seen for both years originally.

While the IMF tagged a slowing credit growth and weak trade for the region, Peiris said the local economy could get some support from its “robust consumption” on the back of “resilient” remittance inflows.

Remittances from overseas Filipinos could grow five percent this year, he said, meeting the central bank’s forecast. This, in turn, could drive the current account and over-all balance of payments (BOP) to surplus.

As of April, the Bangko Sentral ng Pilipinas (BSP) said remittances grew 5.7 percent, while the BOP— a summary of all inflows and outflows— hit $1.884 billion surplus as of April, indicating huge dollar inflows.

Purchasing power could also get a lift from slow inflation, projected to hit the “low-end of the band of the central bank target” at three- to four-percent. Inflation settled at 2.9 percent in the first half.

For 2013, Peiris said the first half economic growth would likely be “stronger” than the second half as the government frontloaded most of its spending to take advantage of good weather.

“For next year, from our point of view, there’s this base effect this year,” which could slow the expansion to the “trend growth” of six percent, Peiris explained.

To be able to go beyond the trend, the IMF official said it would be important to attract more foreign direct investments (FDI), increase infrastructure spending and improve the business climate.

A “second wave” of “structural reforms” should also be pursued, Peiris said, pointing to the rationalization of fiscal incentives and mining taxation.

“You want all these…to improve so that you create more jobs for a younger population,” he said.

Inflation slightly up in June 2013

Inflation slightly up in June

Posted on Saturday Jul 6th at 12:00am

By Prinz P. Magtulis

MANILA, Philippines - Inflation slightly accelerated in June after holding steady for the previous two months, but the central bank believed consumer prices have remained largely manageable for the first half of the year.

Prices of basic goods and services rose 2.8 percent in June, picking up from 2.6 percent in May and April, which was a 13-month low, the National Statistics Office (NSO) reported yesterday

“This was due to higher annual increments in the indices for alcoholic beverages and tobacco, health, transport, recreation and culture, and education,” the government statistics office said.

Excluding food and oil prices, core inflation settled at 2.9 percent, slightly losing pace from three percent during similar periods.

The Bangko Sentral ng Pilipinas (BSP) welcomed the latest inflation report, which fell within its two to 2.9-percent forecast for the month.

The month’s result “supports our assessment of manageable inflation and the appropriateness of our current policy stance,” BSP Governor Amando Tetangco Jr. said in a text message to reporters.

For the first half of the year, consumer prices rose by an average of 2.9 percent, which is below the central bank’s three to five-percent target range for the year. Last year, inflation averaged 3.2 percent.

According to the NSO, the opening of classes in June that saw “tuition fee hikes” contributed to upward pressure in inflation last month. There were a total of 1,237 public and private schools that raised fees this school year, according to government data.

The education index posted inflation of 4.5 percent, up from 4.4 percent in May, NSO data showed.

In addition, inflation in the alcoholic beverages and tobacco and health indices inched up to 31.2 percent and 2.8 percent, respectively.

The recreation and culture segment jumped to 2.7 percent from 1.7 percent, while the gauge for transport reversed to 0.7 percent inflation from 0.5 percent deflation.

Meanwhile, slower price increments were recorded in clothing and footwear (3.3 percent from 3.5 percent), furnishing, household equipment and maintenance (3.3 percent from 3.7 percent) and restaurant and miscellaneous goods (2.1 percent from 2.3 percent).

The pace of price increase was kept on heavily-weighted food and non-alcoholic beverages (2.4 percent), housing, water, electricity and gas (1.5 percent), and communication (0.1 percent) indices.

The central bank, Tetangco said, will monitor developments abroad, especially on how other monetary authorities will set their policies, which could affect capital inflows and hence, local inflation.

“We will monitor the impact of these factors on global and domestic investor sentiment and growth dynamics to see if there is any need to adjust our own policy settings,” he explained.