BAIPHIL Market Watch – 30 March 2017

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BAIPHIL MARKET WATCH

30 Mar

2017

Legend Improvement / Up Deterioration / Down No Movement

FINANCIAL MARKETS AT A GLANCE

PHILIPPINES

Financial Rates Current Previous

USD/PHP 50.1850 50.1800

30-D PDST-R1 2.0250% 2.0250%

91-D PDST-R1 3.0679% 3.0857%

180-D PDST-R1 2.9250% 2.8750%

1-Y PDST-R1 3.1179% 3.1250%

10-Y PDST-R1 5.3554% 5.3768%

30-D PDST-R2 2.0250% 2.0250%

91-D PDST-R2 3.0679% 3.1214%

180-D PDST-R2 2.3976% 2.9321%

1-Y PDST-R2 2.6966% 2.6745%

10-Y PDST-R2 5.3536% 5.4339%

Stock Index Current Previous

PSEi 7,324.00 7,331.46

Market Cap (Php Trillion) 12.410 12.429

Total Value (Php Billion) 14.286 6.622

PSEi Performers Last Price % Change

Top Gainers

Easycall Communications 5.60 12.00%

Centro Escolar University 10.96 9.60%

Oriental Petroleum& Mineral Corp “B”

0.012 9.09%

Top Losers Apex Mining Co A 1.45 -13.17%

Discovery World Corp 2.32 -10.77%

Oriental Petroleum & Mineral Corp “A”

0.011 -8.33%

ASIA-PACIFIC

Stock Index Current Previous

NIKKEI 19,217.48 19,177.10

HANG SENG 24,392.05 24,317.93

SHANGHAI 3,241.31 3,257.38

STRAITS 3,184.57 3,153.95

SET 1,574.97 1,576.17

JAKARTA 5,592.51 5,538.02

Currency Exchange Current Previous

USD/JPY 111.2400 110.5400

USD/HKD 7.7690 7.7669

USD/CNY 6.8901 6.8844

USD/SGD 1.3951 1.3939

USD/THB 34.4600 34.1000

USD/IDR 13,313.50 13,309.00

REST OF THE WORLD

Stock Index Current Previous

FTSEuro First 300 1,493.75 1,483.54

FTSE 100 7,373.72 7,297.07

DAX 12,203.00 12,058.66

CAC 40 5,069.04 5,013.40

DOW JONES 20,659.32 20,701.50

S&P 500 2,361.13 2,358.57

NASDAQ 5,897.55 5,875.14

Various Current Previous

EUR/USD 1.0758 1.0812

GBP/USD 1.2438 1.2408

Gold Spot (USD/oz) 1,253.40 1,255.30

Brent Crude(USD/bbl) 52.42 51.43

3-M US Treasury Yield 0.76% 0.77%

10-Y US Treasury Yield 2.39% 2.41%

30-Y US Treasury Yield 2.99% 3.01%

PHILIPPINES

Share prices on the Philippine Stock Exchange failed to sustain an uptrend on Wednesday, as foreign investors sold positions while the

market waits for positive catalysts. The benchmark PSEi dropped 7.46 points or 0.10 percent to close at 7,324.00. The broader All

Shares shed 6.91 points or 0.16 percent to 4,404.30. More than 2.372 billion shares, valued at P14.286 billion, changed hands. Decliners led advancers, 107 to 79, and 46 issues remained the same.

The Philippine peso slid 0.01% as large equities net foreign selling of Php 5.97Bn offset the impact of higher yields on the BSP's latest term deposit auction. The local currency closed at P50.185:$1, or 0.5 centavos weaker than 50.180 on Tuesday.

In the local fixed income market, yields were almost unchanged (-0.38%) on average, as dampened bid volumes and higher yields in the latest term deposit auction of the Bangko Sentral ng Pilipinas, were offset by supply risk from the release of BTr's Php180Bn 2Q borrowing program with issuances skewed to the long-end of the curve.

Following the latest Retail Treasury Bonds (RTB) auction of the national government, the Bangko Sentral ng Pilipinas term

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deposit facility (TDF) attracted less bids at higher rates on Wednesday. "The auction results of lower subscriptions and slightly higher rates are as expected, given the availability of fresh supply from the national government in terms of the RTBs," Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said in a text message to reporters. The Bureau of the Treasury (BTr) on Tuesday

said it raised P70 billion from its second RTB issuance under the Duterte administration, or more than double the P30 billion it was originally

selling. Tetangco noted the market prefers short-dated investments, as reflected in the oversubscribed seven-day TDF and the

undersubscribed 28-day tenor. "Banks are still looking towards shorter-dated instruments, and, as expected, will try to squeeze as much yield from alternative investment outlets. These are all part of market dynamics ... which do not yet require any changes in the volumes of the BSP auction facilities," he said. The central bank's seven-day, P30-billion TDF attracted P36.160 billion of bids, with a weighted

average accepted yield of 2.9970 percent and a bid coverage ratio of 1.2053. This compares with P39.186 billion in bids last week, with a weighted average accepted yield of 2.9896 percent and a bid coverage ratio of 1.3062. The 28-day P150-billion offer only saw bids of P120.754 billion, with a weighted average accepted yield of 3.3746 percent and a bid coverage ratio of 0.8050. Last week, the same tenor

saw P140.761 billion of bids, with a weighted average accepted yield of 3.3018 percent and a bid coverage ratio of 0.9384. Tetangco said the central bank will continue to give money supply a closer look. "We'll be monitoring liquidity levels against our forecast liquidity path ... I think it's important to provide some stability in the auction facilities of the BSP," he said. "The ultimate game plan is for banks to lend to the

market for long-term projects that will generate employment and increase wealth ... The TDF is here to help steer interest rates and not to be an investment outlet," he added.

The government will borrow domestically through the sale of treasury bills and bonds a total of P180 billion in the second

quarter, similar to the volume programmed during the first three months. In a March 22 memorandum to government securities

eligible dealers, National Treasurer Rosalia V. De Leon said the Bureau of the Treasury would offer P90 billion each in T -bills and T-bonds between April and June. For treasury bills, a total of P15 billion—P6 billion in 91-day, P5 billion in 182-day and P4 billion in 364-day—will be auctioned off on the following dates: April 10 and 24, May 8 and 22, and June 5 and 19. As for treasury bonds, the Treasury will sell

P15 billion in seven-year debt paper on April 18 and May 30. The Treasury will also auction off P15 billion in 10-year IOUs on May 2 and June 13. Also, P15 billion in 20-year government securities will be offered on May 16 and June 27. As domestic interest rates remain relatively low, the Duterte administration wants to finance its programmed wider budget deficit equivalent to 3 percent of the gross domestic

product in the next six years through a borrowing mix of 80-percent local and 20-percent foreign. Gross borrowings for 2017 had been programmed to reach P631.3 billion, higher than 2016’s P453.1 billion. For this year, the government plans to borrow P126.3 b illion from foreign sources, including multilateral lenders, while the bigger P505 billion in borrowings will be sourced locally. De Leon earlier said the

government has placed itself “in the right trajectory in terms of meeting the [2017 borrowing] mix.” The national government’s outstanding debt climbed to a record-high P6.208 trillion in February as the government borrowed

more while the peso weakened that month. Bureau of the Treasury data released Wednesday showed that the end–of-February national government debt further rose 4.5 percent from P5.941 trillion during the same month in 2016 as well as increased 1.5 percent from P6.115 trillion last January. Domestic debt went up 3.5 percent year-on-year and 0.8 percent month-on-month to P3.985 trillion “primarily

due to the net issuance of government securities amounting to P31.68 billion and the effect of peso depreciation on the value of onshore dollar bonds amounting to P250 million,” the Treasury explained in a statement. The Treasury noted that the peso weakened to 50.255:$1 as of the end of February from end-of-January’s 49.757:$1. The peso slid to over 10-year low levels since mid-February. As for foreign

debt, these rose 6.3 percent year-on-year and 2.8 percent month-on-month to P2.223 trillion. “Peso depreciation against the US dollar increased the peso value of external debt by P21.64 billion alongside net availments worth P39.31 billion. These more than offset the impact of third-currency depreciation against the US dollar amounting to P220 million,” the Treasury said. The national government’s

outstanding guaranteed obligations, meanwhile, grew 14.8 percent year-on-year and 0.5 percent month-on-month to P521.8 billion. “The increment on national government guarantees was due to the effect of currency fluctuations and net availment on external guar antees amounting to P3.48 billion and P210 million, respectively. These far outpaced the net repayment on domestic guarantees amounting to

P970 million,” according to the Treasury. President Rodrigo Duterte has rolled out a P1-billion loan assistance for small businessmen, to help spur economic activity in

the country’s poorest regions and wean Filipinos away from loan sharks. Trade Secretary Ramon Lopez told DZMM on Wednesday that an initial P118 million was released, with the full roll out by April. Here are some key facts of the loan program, according to Lopez:

WHO ARE ELIGIBLE?

Small entrepreneurs who need between P5,000 to P10,000 to keep their mini groceries, eateries and wet market stalls running can avail of the loan. Lopez said the loan program will be available in the country’s 30 poorest areas after the initial launch in Occidental Mindoro, Sarangani and

Tacloban City.

HOW MUCH CAN BE BORROWED?

An initial P5,000, which can increase in the future if the existing loan is paid. There is no collateral required, according to Lopez

HOW MUCH INTEREST WILL BE CHARGED?

Twenty-five percent on an annual basis or 2 percent per month. A P1,000 interest on a P5,000 loan can be spread out over one year at P83.33 per month. Lopez said this is much lower than the 20-percent daily interest charged by loan sharks or “5-6” lenders.

WHERE CAN BUSINESSMEN APPLY?

Since the trade department is not authorized to give out loans, the money will be coursed through market vendor associations, cooperatives and microfinance institutions. Without the need to go to a bank, business owners can avail of the loans easily, Lopez said.

The Philippines yesterday got a shot in the arm amid nagging political noise, as Fitch Ratings, Inc. affirmed the country’s credit standing and S&P Global Ratings raised its growth forecast anew. Fitch has affirmed the Philippines’ minimum investment grade credit rating, citing strong gross domestic product (GDP) growth even as it flagged that the economy is held back by relatively low revenue

collections that could stand in the way of the state’s “ambitious” reforms. In a statement late Wednesday, the debt watcher affirmed the country’s long-term issuer default ratings at “BBB-” with a positive outlook, the lowest investment grade status. Ratings for senior unsecured foreign and local currency bonds, as well as short-term ratings were also maintained. “The Philippines’ ratings reflect its

continued strong and consistent growth performance, a robust net external creditor position and government debt levels that are lower than the median of peers in the ‘BBB’ rating category,” the statement read, while flagging that the country’s ratings “remain constrained by relatively weak governance standards, a narrow government revenue base, and levels of per capita income and human development .” The

Philippine economy expanded by 6.8% in 2016 on the back of an investments surge and strong consumption. Fitch expects the economy to expand just as fast this year, before slightly slowing to 6.7% in 2018. “Macroeconomic performance has remained strong des pite the increase in incidents of violence associated with the administration’s campaign against the illegal drug trade while domestic political

stability has been maintained,” referring to President Rodrigo R. Duterte’s deadly war on drugs. “Fitch will continue to moni tor the impact of

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the president’s campaign against drugs on economic performance, financing flexibility and capital flows.” Government spending is expected to continue its rise, with Fitch projecting the fiscal deficit to widen to three percent of GDP, coming from last year’s 2.4%. Inflation is expected to remain manageable with a forecast of 3.3%, within the central bank’s 2-4% target band and against a 3.4% government

forecast. The current account, however, is expected to reverse to a “modest” deficit over the next two years to reflect an import surge amid the government’s infrastructure push, Fitch added. Still, the economy is likely to remain well-cushioned against external shocks with more than enough reserves. At the same time, Fitch analysts flagged the need to increase the government’s tax haul in order to raise its chances

for a rating upgrade and finance its spending plans. National government revenues are seen to be equivalent to 22% of GDP, well below the 30% median among similarly rated economies. Fitch cited the government’s tax reform plan now pending in Congress for its potential to give revenues this much-needed boost, although it flagged “execution risks.” Sustained strong growth, broadening the tax base and

improved governance standards could also inspire a rating upgrade, Fitch said. Yesterday also saw S&P raising its growth forecast for the Philippines anew, noting the economy will remain robust and largely insulated from external shocks on the back of increased government spending and an upbeat business process outsourcing (BPO) sector. The debt watcher sees a 6.6% expansion for gross domestic product

(GDP) this year, higher than the 6.4% estimate penciled in January, according to S&P’s latest credit conditions outlook released on Tuesday. The new forecast comes after 2016 growth clocked 6.8%, as announced by the government on Jan. 26, which beat the credit rater’s 6.6% estimate. By 2018, the Philippine economy is seen to expand by 6.4%, cementing the country’s position as one of the fastest-

growing in Asia and the Pacific next only to India among comparable key economies. Paul Gruenwald, S&P managing director and chief economist for Asia-Pacific, said the economy is seen sure to expand by at least 6.5% this year. If realized, this would match the floor of the government’s 6.5-7.5% growth goal for 2017. “The Philippines has actually been one of the good stories in Asia Pacific over last decade...,”

Mr. Gruenwald said in a webcast yesterday. “That’s really rested on two things: one is business processing operations, which have been quite successful in democratizing growth in the Philippines,” he added, noting that “[a]s a source of stability, it’s not very susceptible to what’s going in the broader global economy.” The BPO industry is estimated to have brought in approximately $25 billion last year and

hired over a million people, remaining a key pillar for the local economy alongside a rising stream of remittances from overs eas Filipino workers. Increased government spending -- expected after President Rodrigo R. Duterte committed faster rollout of state projects than his predecessor, particularly for infrastructure -- also boosts overall growth prospects, the credit analyst added. State spending grew by 14% in

2016, outstripping a four percent increase in revenues that led to a six-year high in the country’s fiscal deficit at 2.4% of GDP. In absolute terms, last year’s P353.422-billion gap was nearly three times 2015’s P121.689 billion (0.9% of GDP) but still fell nine percent short of a P388.9-billion program for 2016. However, preliminary data showed that disbursements increased by a slower seven percent in January,

while revenues rose by a tenth from a year ago. The government is looking to boost spending further this year, having set a deficit ceiling at three percent of GDP. “If we continue to see good business in the BPO sector and reasonable fiscal constraint particularly on the expenditure side, that’s going to very supportive of growth,” Mr. Gruenwald added. The Philippines currently holds a “BBB” rating with a

“stable” outlook from S&P, which is a notch above junk status. Inflation is also seen to remain manageable, with the debt watcher expecting the pace of price increases at 3.1% this year and 3.5% in 2018, still well within the central bank’s 2-4% target range. The looming change in leadership at the Bangko Sentral ng Pilipinas (BSP) is also unlikely to have an impact on the financial system and on overall economic

prospects, Mr. Gruenwald said, given the solid record of the institution and its “talent pool.” BSP Governor Amando M. Tetangco, Jr. will step down on July 2 after a 12-year stint at the central bank’s helm.

The Philippines was cited as among the “winners” in the Asia-Pacific region whose export growth “strongly outperformed” global demand in the last seven years, UK-based Oxford Economics said. In its March 27 report titled “Asia globalization winners and losers trade places,” Oxford Economics identified the Philippines, China, India and South Korea as the countries that posted “robust gains

in productivity and/or moved up the value chain, gaining global market share in the process” from 2010 to 2017. Oxford Economics data showed that from 2010 to 2016, the Philippines enjoyed a compounded yearly export growth rate of 7.8 percent, exceeding India’s 5.4 percent, South Korea’s 5.3 percent, China’s 4.6 percent, Indonesia’s 4.1 percent, Malaysia’s 3.7 percent, Australia’s 3.2 percent,

Singapore, Thailand’s 2 percent and Taiwan’s 1.4 percent. Exports of Japan and Hong Kong declined 2 percent and 8.5 percent, respectively, during the same seven-year period. Oxford Economics said export growth in Indonesia, Malaysia and Australia “broadly tracked” world demand, while those in Singapore, Thailand, Taiwan, Japan and Hong Kong “lagged” global demand. “Our winners—the

Philippines, India, South Korea and China—are economies that since 2009 have enjoyed robust growth in manufacturing exports and seized global market share in the process. Our gold star performers are economies that mostly started from modest levels of development and wages and generated robust gains in productivity and/or moved up the value chain due to structural changes and reforms,” Oxford

Economics said. In the case of the Philippines and Malaysia, Oxford Economics said these economies “have picked up the slack, buoyed by lower costs of production and increasing foreign investments.” Oxford Economics noted that the Philippines was the lone Asean-6 country that saw the share of job-generating foreign direct investment to gross domestic product increase since 2010. Also, it helped that the export performances of the Philippines and India came from a “relatively low base,” Oxford Economics added. Moving forward, “India

and the Philippines should continue to experience strong growth as their relatively immature, or in the case of India, fragmented manufacturing sectors continue to ‘catch up’ with more established rivals,” Oxford Economics said.

Despite a critical outlook on trade and likelihood of higher interest rate and inflation and further depreciation of the peso this year, businessmen still remain optimistic the Philippine economy to either sustain if not surpass 2016’s GDP growth rate of 6.8 percent, a survey by the Makati Business Club (MBC) revealed. In its First Semester Executive Outlook Survey for 2017, majority or 83

percent of the senior business executives of MBC members polled expect a higher or same level of GDP growth for 2017 compared to last year’s 6.8 percent growth rate. Only 17 percent of the respondents project a lower economic growth rate. The MBC survey received responses from 76 out of its 380 (20%) corporate members; majority of these responses were received from senior executives and top

management representatives. The optimism ran high despite expectations of a higher consumer prices and inflation rate. Based on the survey, 85 percent expect higher consumer prices while another high majority of 85 percent anticipate the country’s headline inflation in 2017 to be higher than last year’s average rate of 1.8 percent. Only a small percentage of 12 percent expect inf lation to stay at the same

rate, while 3 percent project it to be lower than 2016. Likewise, 57 percent of Makati-based businessmen foresee a higher 91-day Treasury Bill Rate than last year’s rate of 1.50 percent. Thirty-nine percent still foresee constant interest rates and expect it to stay the same, while 4 percent expect to see it moving lower in 2017. On the peso-dollar rate, a big majority of 80 percent of MBC members expect the peso to

depreciate against the US dollar by an average of 5.16 percent by year-end 2017; the 2016 year-end rate was R49.82/$. Meanwhile, 11 percent expect the peso-dollar rate to stay the same as end-2016, while the remaining 9 percent expect the local currency to appreciate against the dollar by 3 percent. On prospective investments for 2017, the survey showed that 29 percent of respondents remain positive

expecting an increase of approved investments from the 2016 figure, while 24 percent foresee the same level of approved investments this year. On the other hand, 47 percent anticipate approved investments this year to be lower than the R89.4 billion recorded by the Philippine Statistics Authority last year. On trade, the general outlook is slightly critical, as a significant number of MBC members pr oject a decrease

in both imports and exports. Fifty-three percent of respondents expect exports either to increase (29%) or stay on the same level (24%) as last year’s exports figure, while close to half (47%) expect lower exports than last year’s $51.36 billion (from January to November). For imports, 64 percent expect lower imports than last year’s $73.72 billion, while 24 percent expect it to stay the same; the remaining 12%

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stay fairly optimistic and expect imports to be higher than last year. MBC members also mirrored their overall optimism on the Philippine economy to their own corporate outlook with a large majority of the respondents projecting an increase in both gross revenues and net income in the coming year. About 93 percent expect higher (83%) or the same level (10%) of gross revenues this year compared to last

year, and only 7 percent expect their gross revenues to be lower than 2016. Similarly, 74 percent of the respondents also project higher net incomes in 2017, while 14 percent foresee no change, and only 12 percent expect lower net incomes this year. On investments for 2017, the projection remains bright with 74 percent of the respondents said they will make additional investments in the coming year, with an

average of P785 million; the highest projected investments of over P1 billion are under the Diversified / Conglomerate and Services sector. In terms of workforce, 51 percent of the respondents plan on expanding their workforce; majority of these member companies planning to hire more workers belong in the Services sector. Meanwhile, 48 percent expect to hold their workforce size steady, while only 1 percent

foresees the possibility of laying off workers. The 2017 First Semester Executive Outlook Survey was conducted among MBC members from 2 February to 15 March, 2017. A total of 76 corporate members submitted survey responses, representing 20 percent of MBC’s 380 member companies, excluding foreign embassies and trade offices. Of the total respondents, 84% are in top management, while 16% are

in middle management. Majority of these respondents are Filipino (91%), while 9% are foreigners. The Services sector make up the largest representation, with 46%, while Manufacturing and Non-Manufacturing industries make up 11% and 8%, respectively. 14% are from the Conglomerate/Diversified sector, and 3% are in Agriculture. Other sectors make up the remaining 18% of the respondents. In terms of

company size, majority of MBC members (62%) have annual revenues of over P999 million, while 12% record less than P100 million; 5% have P500-P999 million, 8% have P300-P499 million, and another 13% have P100-P299 million.

The heist of $81 million from the Bangladesh central bank's account at the New York Federal Reserve last year was "state-sponsored," an FBI officer in the Philippines, who has been involved in the investigations, said on Wednesday. Lamont Siller, the legal attache at the US embassy, did not elaborate but his comments in a speech in Manila are a strong signal that authorities in the United

States are close to naming who carried out one of the world's biggest cyber heists. Last week, officials in Washington, speaking on condition of anonymity, blamed North Korea. "We all know the Bangladesh Bank heist, this is just one example of a state-sponsored attack that was done on the banking sector," Siller told a cyber security forum. An official briefed on the probe told Reuters in Washington last

week that the FBI believes North Korea was responsible for the heist. The official did not give details. The Wall Street Journal reported US prosecutors were building potential cases that would accuse North Korea of directing the heist, and would charge alleged Chinese middlemen. The FBI has been leading an international investigation into the February 2016 heist , in which hackers breached Bangladesh

Bank's systems and used the SWIFT messaging network to order the transfer of nearly $1 billion from its account at the New York Fed. The US central bank rejected most of the requests but filled some of them, resulting in $81 million being transferred to bank accounts in the Philippines. The money was quickly withdrawn and later disappeared in the huge casino industry in the country. There have been no

arrests in the case. A Chinese casino owner in the Philippines told that Senate inquiry he took millions of dollars from two Chinese high-rollers in February. He said the two men were responsible for transferring the stolen money from Dhaka to Manila. Philippine investigators have filed criminal charges against several individuals and a remittance company for money laundering in connection with the heist at the

country's Department of Justice (DOJ). None of these cases have yet been filed in court, however. Siller said the FBI was wor king closely with the Philippines government "to ensure those responsible for the attack do not go unpunished." "So for us in the FBI, it is never over. We are going to bring these individuals to justice so that we can show others, that you maybe be able to muster such attacks, even state-

sponsored, but you will not get away with it in the end." An American technology and business expert urges Business Process Outsourcing (BPO) companies to prepare for the

disruption that will be brought about by artificial intelligence (AI). The Department of Science and Technology (DOST) recently held a talk about how to prepare for the time when intelligent computers take over call center agents' jobs. But Dr. Ted Ladd, who is on a lecture tour of the Philippines, says the technology for artificial intelligence is already here. "The question is how fast can people commercialize it

and how fast can they put data into artificial intelligence to ensure that they're answering questions well and providing cus tomer service and experience that people expect," Ladd said in an interview on ANC's 'Market Edge.' Ladd said that the technology for a market as large as the BPO industry is developing at a fast pace, and that there are already firms contemplating on how to pair AI with 'big data' to replace

BPOs. While some experts say AI's impact on BPOs will start to be felt in five years, Ladd says BPOs and entrepreneurs should already be preparing for this. He also suggests looking for new opportunities that will be opened up by AI. "We don't have to wait for the industry to show cracks before entrepreneurs prepare new solutions," Ladd said. "Artificial intelligence solutions could even come from Manila," he

added. Ladd says that AI was not just going to create new products or services but will create new business models which entrepreneurs could take advantage of. He suggests using some of the creative talent in the BPO industry to create the algorithms that are necessary for AI. The BPO industry is estimated to employ around 1.3 million people in the Philippines and is forecast to bring in around $28 billion to the country this year.

A law that would grant a fresh 25-year extension to Smart Communications’ congressional franchise, expiring this month, now

awaits approval from President Duterte. The congressional bicameral conference committee, composed of leaders of the Senate and

House of Representatives, recently approved the extension, which was first granted in 1992. Ray Espinosa, chief corporate services officer of Smart’s owner PLDT Inc., earlier said the failure to extend the franchise could prompt the group to go into “general default” on existing loans. Espinosa, however, downplayed any service disruptions as a result of the possible expiration of their franchise. He said PLDT held

other franchises, which would allow the group to continue operations of mobile services that covered about half of the country’s population. The bill was passed by the House of Representatives in January this year, and was subsequently amended by the Senate earlier this month. The amendments were then accepted by the House of Representatives last March 14. The Senate version, as with the House of

Representatives, allowed an exemption to the requirement for Smart to sell at least 30 percent of its shares to the public via an initial public offering within two years. The exemption was allowed because Smart is wholly owned by a publicly traded company, in this case, the PLDT. As lawmakers earlier insisted on a public listing, PLDT officials argued that Smart had effectively complied with the spirit of the law.

They added that an IPO could hurt the value of PLDT. Smart would likewise be compelled to build telco facilities, specificall y in calamity-prone areas, to aid the population in times of disaster. Another amendment was the deletion of the term “co-use” in the franchise. Lawmakers said this would prevent the term from being used in anti-competitive practices.

The Securities and Exchange Commission has approved a plan by nickel mining firm Global Ferronickel Holdings Inc. to raise as

much as P2.02 billion from a follow-on offering of shares. Global Ferronickel, which trades on the Philippine Stock Exchange under the

ticker FNI, was authorized to sell up to 250 million in primary common shares at P8.10 per share. Of the proceeds, Global Ferronickel plans to infuse P490 million into its 99.89-percent owned subsidiary Platinum Group Metals Corp. (PGMC) as partial payment of the company’s loan to PGMC, which in turn will use the amount to settle part of its outstanding loan from the Taiwan Cooperative Bank (TCB).

In 2016, TCB extended a $20-million loan to PGMC to be used as working capital for its operations in CAGA Mines. The loan, which carries an interest rate of 3.75 percent plus LIBOR (London Interbank Offered Rate) per annum, is due this May 2017. In the event that the entire amount is not raised, PGMC will service the loan using internally generated funds. The remaining proceeds of P1.46 bil lion will be

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used by the company for working capital or additional capital for operations. PGMC is the second largest nickel ore producer in the Philippines by volume of nickel shipment. It has one of the largest single mine laterite exporters. It is one of the largest global suppliers of nickel ore, accounting for 11 percent of the country’s nickel ore production in 2015. Recently, Global Ferronickel disclosed that PGMC was

no longer on the list of mining firms whose mines were recommended by the Department of Environment and Natural Resources (DENR) for either “suspension” or “closure,” citing an updated list. Four other companies are for suspension while 22 companies are up for closure, based on the updated list issued by the DENR-Office of the Undersecretary for Legal Affairs.

The Gotianun family-controlled East West Banking Corp. is set to implement a major top management shakeup—including the

appointment of a new president —with its current CEO having been endorsed by President Duterte’s political party for the central

bank governorship. The Inquirer learned that banker Jesus Roberto Reyes, currently the treasurer and chief financial officer of Union Bank of the Philippines, is set to be named president and CEO of East West Bank by May 1. According to industry sources, East West’s current president, Antonio Moncupa, will be promoted to vice chair pending the President’s decision on who will be the new governor of the

Bangko Sentral ng Pilipinas once the current chief, Amando Tetangco Jr., ends his second term on July 3. Moncupa has received the backing of Senate President Aquilino Pimentel III and the PDP-Laban political party in the tight race to be the country’s next banking and monetary policy chief. In a text message, Moncupa declined to comment on Reyes’ reported appointment, saying on ly that “East West

Bank is beefing up its executive team and will most likely make an announcement soon.” Reyes has been serving as CFO of the UnionBank since early 2016. He joined the Aboitiz family-controlled financial institution in 2012, serving as a senior executive vice president and treasurer in 2012. Before that, he worked as treasury and investment banking head of Security Banking Corp. for a decade,

and deputy treasurer of HSBC’s Philippine operations in the mid-1990s. Jose “Toto” Hilado will continue to serve as East West’s chief operating officer under the reorganization plan, sources said. Meanwhile, Moncupa said he had not been named BSP governor yet , contrary to speculation. Other contenders for the BSP’s top post—described by Finance Secretary Carlos Dominguez III as the “single

most important economic decision President Duterte will make”—include current Deputy Governors Nestor Espenilla Jr. and Diwa Guinigundo as well as former Monetary Board member Peter Favila.

Conglomerate Ayala Corp. (AC) is transferring to another unit its subsidiary ownership in Integrated Micro Electronics Inc. (IMI) to consolidate interest in the industrial electronics services provider. Parent AC said wholly owned subsidiary AYC Holdings Ltd. will transfer its 50.6 percent ownership in IMI to AC Industrial Technology Holdings Inc., a separate wholly owned subsidiary of AC. The

transaction will be course through a special block sale of IMI shares, subject to the approval of the Philippine Stock Exchange. "This transaction consolidates Ayala’s existing assets in manufacturing and vehicle distribution and dealership under AC Industrials, creating a platform to execute on Ayala’s vision to assemble a portfolio of businesses that own, develop, enable, manufacture and commercialize

automotive and other industrial technologies across various platforms to capture opportunities in the domestic and global mar kets," the company noted. The transaction was exempted from the mandatory tender offer rules by the Securities and Exchange Commission on March 21, 2017, on grounds that the change in ownership of the IMI shares is by no means a takeover bid by a third party and will not

affect the management and control of IMI. "IMI is the 21st largest electronics manufacturing service provider and the 6th largest automotive electronic manufacturing services provider in the world based on revenues, with technological and management expertise in automotive, telecom and industrial electronics, among others," according to AC. AC Industrials holds Ayala’s interests in automotive distributorship,

which include a 13 percent stake in Honda Cars Philippines Inc., 15 percent in Isuzu Philippines Corp., 100 percent in Honda Cars Makati Inc., 100 percent in Isuzu Automotive Dealers Inc., 100 percent in Automobile Central Enterprise Inc. and 100 percent in Adventure Cycle Philippines Inc. "The transaction will have no impact on Ayala’s consolidated financial statements as this is just a transfer within the group

from one wholly owned subsidiary to another," the company noted. PAL Holdings, Inc. and its subsidiary will undergo an equity restructuring to erase their deficit ahead of a plan to take in a new

strategic investor. In a disclosure to the stock exchange, the listed company owned by tycoon Lucio C. Tan, Sr., said its board of directors cleared an equity restructuring to wipe off its existing deficit and the additional deficit that will be incurred upon the acquisition of Zuma Holdings Management, Inc. and its unit Air Philippines, Inc. PAL Holdings will decrease its authorized capital stock to P18 billion divided

into 30 billion common shares with a par value of 60 centavos per share from P30 billion divided into 30 billion common shares with a par value of P1 per share, without returning any portion of the capital to stockholders. PAL Holdings will use the resulting reduction surplus from the transaction, together with its existing additional paid-in capital and the additional paid-in capital that will be booked upon the

completion of the Zuma acquisition to eliminate its projected deficit as of April 30 on a consolidated basis. Philippine Airlines, Inc. (PAL), a subsidiary of the listed company, will likewise embark on a similar equity restructuring to remove its deficit as of Dec. 31, 2016. After securing the approval of the Securities and Exchange Commission (SEC), PAL Holdings and its subsidiary will modify their respective amended Articles of Incorporation to revert its par value to P1 per share. The amendments will be presented to the shareholders of PAL

Holdings for approval on May 25. PAL announced earlier this month that it is proceeding with its plan to acquire shares from Zuma Holdings after securing the Philippine Competition Commission’s approval. The consolidation of tycoon Lucio C. Tan, Sr.’s airline business was earlier seen to help increase the appeal of PAL to investors. Late last Friday, PAL President and Chief Operating Officer Jaime J.

Bautista said talks with a strategic investor to acquire “less than 40%” of the company is already in the “advanced” stage, with a deal seen within the first half of the year. The strategic investor is expected to help PAL better manage its fleet and reach five-star full service carrier status by 2020. PAL currently has a three-star rating. Shares in PAL Holdings shed 28 centavos or 5.02% to end at P5.30 each on

Wednesday. Jollibee Foods Corp said Wednesday it was on track to maintain its lead in the fastfood industry, following concerns raised by

some analysts over the rising cost of raw materials and its main competition. The country’s largest fastfood operator told the stock exchange that it expected “strong” growth after doubling capital spending this year to P14 billion compared to the previous year. Citing financial data from the second half of 2016, Jollibee said organic sales growth was at its highest in at least a decade. Analysts at

Macquarie and COL Financial had raised concerns about Jollibee’s ability to pass on higher costs to its consumers and new government

regulations on contractualization. Macquarie separately noted the growing threat from rival McDonald’s. “The Jollibee Group of Companies

has faced many challenges in the past. It had emerged stronger from these challenges and its profit recovered quickly,” the company said. BPI Securities research head Haj Narvaez has a "buy" recommendation on Jollibee, saying its projected earnings growth of up t o 18 percent would outpace the 9-percent expectation for the broader market. "I don't see any revisions with regards to earnings," Narvaez told

ANC's "Market Edge with Cathy Yang." Shares of Jollibee were up 1.86 percent to P185.90 on Wednesday. The stock suffered four straight days of losses from late last week. Jollibee said it expected the rate of increase in costs to slow this year compared to the last two years. Two price increases last year in anticipation of higher costs this year “did not adversely affect” sales volume, the c ompany said. The

company said it was taking “proactive steps to adapt to the changing requirements” in labor, “incurring costs” along the proc ess since the third quarter of 2016. The Jollibee brand’s system-wide sales are double the “next largest competitor,” the company said, adding sales are larger than the two biggest foreign competitors combined.

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The country’s leading canned food company Century Pacific Food Inc. (CNPF) grew its consolidated net income last year by 37 percent to P2.66 billion on higher earnings from its branded food business and the consolidation of its coconut subsidiary. Total revenues grew by 21 percent to P28.29 billion last year, CNPF reported to the Philippine Stock Exchange on Wednesday. “We con tinue to

benefit from consumers’ increasing demand for affordable, convenient and healthy products,” CNPF chief finance officer Oscar Pobre said in a press statement. “While fourth quarter was slower than previous periods which benefitted from an election bump, our branded businesses have maintained market leadership in core segments and we have likewise gained traction in emerging product categories,”

Pobre added. CNPF also reported a sustained recovery in demand for original equipment manufacturer (OEM) tuna exports during the latter part of the year, with revenues in that segment ending the year with positive growth. Despite commodity headwinds during the latter part of the year, CNPF saw overall profitability improve with a 39 percent rise in gross profits and a 32 percent increase in operating

income for the full-year 2016. This translated to gross and operating margins of 30 percent and 13 percent, marking a year-on-year expansion of 387 basis points (bps) and 106 bps, respectively. The Company attributed these gains to favorable input costs for most of the year alongside its inventory hedging strategies. Pobre added: “2017 will be a more challenging year for us as we face rising commodity

prices. However, through brand and pricing management, efficiency gains, and cost reduction initiatives, we should be able to strike a balance between growing demand and improving profitability. CNPF has developed several household names that include Century Tuna, Argentina Corned Beef, 555 Sardines, Angel Milk, and Birch Tree Powder Milk.

A unit of cement-maker Cemex Holdings Philippines Inc. signed an agreement with Sinoma Energy Conservation Ltd. of China to

build and operate a 4.5-megawatt (MW) waste-heat-to-energy (WHTE) facility in Naga, Cebu. In a disclosure to the Philippine Stock

Exchange on Wednesday, Cemex announced that the WHTE deal had been signed by its subsidiary APO Cement Corp. The power facility will have the capacity to capture excess heat from the cement plant’s kiln and convert it into usable energy. This technology is expected to generate 25,000 MW hours annually. The WHTE facility is expected to mitigate the negative effects of power service interruptions, help

reduce dependence on high-cost power sources, and reduce the cement plant’s carbon footprint, the company said. “Promoting energy efficiency is one of Cemex’s objectives in advancing resource generation best practices. We are delighted to see the good res ults of our partnership with Sinoma since the successful construction of the first WHTE project in one of our p lants,” said Cemex Philippines president

Pedro Palomino. “We are pleased to be working with Cemex once again and we are positive that the upcoming project will contribute significantly to Cemex’s operations,” said Zhang Qi, Sinoma-EC chair. Apo Cement operates as a building material supplier and cement producer. It has a plant located in Cebu, founded in 1921, which produces Pozzolan and Portland cement under the APO Cement brand.

Cemex said it would continuously seek to improve its performance as an “efficient, agile, and innovative” company by identifying, sharing, and implementing best practices across its global network of plants and facilities. The company said its industry-best processes would allow it to satisfy the needs of its customers while using the optimal amount of resources. Cemex is one of the leading cement producers in

the Philippines based on installed annual capacity. It produces and markets cement and cement products, such as ready-mix concrete and clinker, in the Philippines through direct sales using its extensive marine and land distribution network. The company’s cement manufacturing subsidiaries have been operating in the Philippines for over 17 years with well-established brands, such as “APO,” “Island,”

and “Rizal,” each of which has a multi-decade history in the country. Cemex is an indirect subsidiary of Cemex S.A.B. de C.V., one of the largest cement companies in the world based on annual installed cement production capacity. The shares of CEMEX, S.A.B. de C.V. are listed on the Mexican Stock Exchange and the New York Stock Exchange.

Villar family-led memorial park developer Golden Haven Memorial Park Inc. grew net profit last year by 19 percent to reach

P180.22 million, a record high for the company. Golden Haven’s total revenues also hit a record level of P814.59 million, up by 18 percent from the previous year. “Fueled by a successful initial public offering (IPO) in June 2016, the company delivered its highest numbers in terms of its memorial lot and columbarium vault sales which resulted into record breaking revenues and net income”, Golden

Haven president Jerry Navarrete said in a press statement. “With a significant part of the IPO proceeds going into investments forexpansion projects and the completion of our memorial chapels and crematorium, that we are planning to fully utilize in the coming year, we are confident with the company’s prospect for 2017”, Navarrete added. Golden Haven boosted its assets to P2.88 billion in 2016,

marking a 61 percent growth. A significant part of this growth was the parallel increase in its property and equipment assets, recorded at P 141.97 million alongside its investment properties, recorded at P 267.31 million. These numbers represent the equipment purchased for the Golden Haven Chapels and Crematorium, as well as the new properties acquired by the company, including land in Nueva Vizcaya and

Pampanga. “With the opening of the memorial chapels and crematorium in the first quarter of 2017, coupled with the upcoming launches of new parks in Bambang and San Fernando in the second quarter, we are expecting even better results for 2017 due to the recognition of returns from the investments made with the IPO proceeds”, said Golden Haven chief operating officer Maribeth Tolentino. “Beyond improved sales efforts and strategies, the expansion plans put into action this year gives the company an avenue for a solid pipeline f or the

coming years, along with new opportunities in previously untapped, high potential markets”, she stated. Golden Haven ended 2016 with eight memorial park projects, covering a total area of more than 66 hectares spread across various parts of the Philippines, including Las Piñas, Bulacan, Cebu, Cagayan de Oro, Iloilo, Nueva Vizcaya, Pampanga, and Zamboanga. The company has also entered into

agreements to acquire properties in various new areas in the country. The company debuted on the Philippine Stock Exchange last year under the stock symbol “HVN”, and is the first deathcare solutions company in the local bourse.

ASIA-PACIFIC

Japan's Nikkei share average eked out small gains in choppy trade on Wednesday, but gains were limited as ex-dividend share price adjustments pressured the market and offset positive sentiment from strong U.S. shares overnight. The Nikkei rose 0.1 percent to 19,217.48 after traversing negative and positive territory. The broader Topix shed 0.2 percent to 1,542.07 and the JPX-Nikkei Index 400

declined 0.2 percent to 13,786.12.

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China stocks slid on Wednesday, posting losses for the third day in a row amid concerns over liquidity and tighter polices as

the money market saw a net drain for a fourth consecutive day after the central bank skipped open market operations. The blue-chip

CSI300 index fell 0.1 percent, to 3,465.19 points, while the Shanghai Composite Index lost 0.4 percent to 3,241.31 points. An index tracking stocks related to the initiative advanced 1.2 percent to close at a 15-month high. But concerns about liquidity and tighter policy measures kept the markets in check. On Wednesday, the central bank skipped open market operations for the fourth straight day, saying

liquidity levels remained "appropriate". Its inaction resulted in a fourth consecutive session of net drains ahead of month- and quarter-end, when conditions typically tighten. Property developers continued to struggle as local governments stepped up cooling measures to curb high prices. Moody's Investors Service warned on Wednesday that China's economy would face heightened risks from a potential property

downturn, with authorities' possessing limited scope to offset the impact. Hong Kong stocks pared early gains to end slightly higher on Wednesday, as weakness in property shares offset buying in shipping

firms and index heavyweight Tencent. The Hang Seng index rose 0.2 percent to 24,392.05 points, while the China Enterprises Index gained 0.1 percent to 10,437.51. The market was firm in the morning but sentiment was hurt by a late afternoon drop in mainland stocks. Moody's Investors Service warned on Wednesday that the financial risks facing China from a potential property downturn have grown as

record lending has made banks more risk-prone while the government is less able to combat those risks. Oil prices on Wednesday extended gains from the previous session, lifted by supply disruptions in Libya and expectations that

an OPEC-led output reduction will be extended into the second half of the year. Prices for front-month Brent crude futures, the international benchmark for oil, had risen 14 cents from their last close to $51.47 per barrel by 0127 GMT. In the United States, West Texas Intermediate (WTI) crude futures were up 20 cents at $48.57 a barrel. Both crude benchmarks rose by more than 1 percent the previous

day. Oil production from the western Libyan fields of Sharara and Wafa has been blocked by armed protesters, reducing output by 252,000 barrels per day (bpd), a source at the National Oil Corporation (NOC) told Reuters late on Tuesday. The Organization of the Petroleum Exporting Countries (OPEC), along with some other producers including Russia, have agreed to cut production by almost 1.8 million bpd

during the first half of the year in order to rein in a global fuel supply overhang and prop up prices. But as markets remain bloated halfway into the cuts, there is a broad expectation that the supply cuts will be extended into the second half of the year. Despite the rising consensus of extended cuts, the OPEC-led strategy to re-balance oil markets is not without controversy. As OPEC and especially Saudi

Arabia cut their production, other producers not participating in the cuts have been quick to fill the supply gap and gain market share. In the United States in particular, shale oil drillers have seized the opportunity to ramp up output and exports. As a result, China became the third biggest overseas destination for U.S. crude oil in 2016, according to data from the Energy Information Administration (EIA), up from ninth

position the previous year. "In 2016, U.S. crude oil exports averaged 520,000 bpd, 12 percent above the 2015 level, despite a year-over-year decline in domestic crude oil production," the EIA said. With U.S. oil production rising sharply again this year, traders expect American exports to surge further in 2017.

Retail sales in Japan rose 0.1 percent year-on-year in February of 2017, following a 1.0 percent increase in January and missing

market expectations of a 0.5 percent gain, a preliminary report showed. It was the weakest rise since October 2016, as sales went up

at a slower pace for fabrics apparel & accessories (0.5 percent from 2.6 percent in the prior month) and medicine and toiletry stores (1.5 percent from 2.0 percent). Sales increased more than in a month earlier for: general merchandise (5.1 percent from 2.9 percent), food & beverages (1.5 percent from 1.0 percent), motor vehicles (4.8 percent from 4.3 percent), machinery & equipment (2.2 percent f rom 0.8

percent) and fuel (10.0 percent from 7.0 percent). On a monthly basis, retail sales grew by 0.2 percent, compared to a 0.5 percent rise in the preceding month. Meantime, wholesale sales rose 0.2 percent from the previous year and by 0.1 percent month-on-month. Retail Sales YoY in Japan averaged 4.68 percent from 1971 until 2017, reaching an all time high of 36.52 percent in January of 1979 and a record low

of -14.32 percent in March of 1998. Vietnam's economy expanded an annual 5.10 percent in the first quarter of 2017, slowing sharply from a 6.68 percent growth in

the previous three months, preliminary estimates from the General Statistics Office showed. It was the weakest quarterly growth since the March quarter of 2014, due to adverse weather and declining agricultural output. For 2017, the economy is expected to grow by 6.7 percent. In 2016, the economy advanced 6.21 percent, compared to a 6.68 percent expansion in the same period a year earlier. GDP

Annual Growth Rate in Vietnam averaged 6.46 percent from 2000 until 2017, reaching an all time high of 8.48 percent in the fourth quarter of 2007 and a record low of 3.12 percent in the first quarter of 2009.

Vietnam recorded a USD 1.1 billion trade deficit in March of 2017, compared to a USD 0.63 billion surplus in the same month a

year earlier, as exports rose less than imports. Year-on-year, sales went up 8 percent to USD 16.3 billion, driven by electronics, computers and components (40.4 percent), footwear (14.5 percent) and textiles (13.4 percent). Imports jumped 20 percent to USD 17.4 billion, due to chemical products (26.2 percent) and raw materials for textile and garment and footwear (19.7 percent). Considering the first

quarter 2017, exports grew by 12.8 percent compared to the same period in the prior year and imports rose 22.4 percent. That brought the trade deficit of USD 1.9 billion during the period.

REST OF THE WORLD

European shares rose on Wednesday with little reaction to the well-flagged formal announcement of Britain's intention to leave

the European Union and start an uncertain two-year process of negotiation. The pan-European STOXX 600 index rose 0.4 percent to

378.5 points, its highest closing level in nearly 16 months, consolidating a rally that has been fuelled by brightening economic prospects in the region after years of sluggish growth. Prime Minister Theresa May formally began Brexit proceedings on Wednesday, notifying EU Council President Donald Tusk that Britain is leaving the bloc it joined in 1973. The DAX 30 rose 54 points, or 0.4%, to 12,203 on

BAIPHIL Market Watch – 30 March 2017

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Wednesday. Across other European markets, equities finished mostly in the green as the UK formally began the process of exiting from the European Union. The FTSE 100 increased 30 points, or 0.4%, to 7,374; and the CAC 40 rose 23 points, or 0.5%, to 5,069. Meanwhile, the IBEX 35 fell 21 points, or 0.2%, to 10,368; and the FTSE MIB declined 54 points, or 0.3%, to 20,277.

The benchmark S&P 500 eked out a gain on Wednesday as strength in the energy and consumer sectors offset declines in

financial shares and investors began looking ahead to first-quarter earnings season. The Dow Jones Industrial Average ended

slightly lower, falling for the ninth session out of the past 10, while the Nasdaq rose for a fourth straight day. Investors have been assessing what the Republicans' failure to pass a healthcare bill means for tax reform and the rest of President Donald Trump's agenda, hopes for which have helped drive stocks to record highs. They are looking to first-quarter earnings to support lofty valuations for stocks, with the

S&P 500 trading at nearly 18 times earnings estimates for the next 12 months against its long-term average of 15 times. First-quarter earnings for S&P 500 companies are expected to rise 10.1 percent, according to Thomson Reuters I/B/E/S. The Dow Jones Industrial Average fell 42.18 points, or 0.2 percent, to 20,659.32, the S&P 500 gained 2.56 points, or 0.11 percent, to 2,361.13 and the Nasdaq

Composite added 22.41 points, or 0.38 percent, to 5,897.55. Investors also digested comments from Federal Reserve officials. Chicago Fed President Charles Evans said he favors further interest rate hikes this year, while Boston Fed President Eric Rosengren said the Fed should raise rates three more times in 2017. About 5.8 billion shares changed hands in U.S. exchanges, well below the 6.9

billion daily average over the last 20 sessions and among the lightest volume days in 2017. Advancing issues outnumbered declining ones on the NYSE by a 1.88-to-1 ratio; on Nasdaq, a 1.59-to-1 ratio favored advancers.

Federal Reserve Vice Chairman Stanley Fischer said the Federal Open Market Committee’s median estimate for two more rate hikes this year “seems about right.” “That’s my forecast as well,” Fischer said in an interview with CNBC on Tuesday. U.S. central bankers are gradually removing monetary stimulus as inflation moves back to their 2 percent target. Fed officials forecast they would raise

interest rates two more times this year after hiking earlier this month, according to their predictions released March 15. Fischer said the U.S. central bank is watching fiscal policy negotiations between Congress and the White House without prejudging the outcome. Watching and waiting “is the sensible thing to do,” he said, because proposals will be “different” as they work through the legislative process. He said

the failure of the health-care bill on Friday may have changed his “internal calculus,” but not the overall outlook. Fischer’s term as vice chairman expires in June 2018. When asked if he would stay on at the central bank as a governor, Fischer said, “Well of cours e I have considered it.” “It has only been done once in all the Fed’s history,” he added. “I don’t have to make a decision about that right now.”

Regarding the chance that the path of rates could be more aggressive or more gradual, Fischer said “the risks are more or less balanced.” Speaking to reporters later Tuesday from Morgantown, West Virginia, Fed Governor Jerome Powell said he sees the central bank continuing to raise rates gradually if the economy stays on its current course. “I’m not going to say we’ve achieved maximum

employment, but we’re getting close to it. Inflation is still a little bit short, but not terribly short” of the Fed’s target , he said. “It’s appropriate if we stay on this path for us to gradually raise interest rates.” Fischer said the reasons for the slump in productivity growth that are limiting the economy’s potential growth rate aren’t fully understood. “The rate of investment in the economy is very low at present,” he said. Fischer

also said he was concerned about rising protectionism because greater global integration has worked “very well” for the U.S. and other nations since the end of World War II.

U.S. consumer confidence surged to a more than 16-year high in March amid growing labor market optimism while the goods trade deficit narrowed sharply in February, indicating the economy was regaining momentum after faltering at the start of the year. The economy's strengthening fundamentals were underscored by other data on Tuesday showing further increases in house

prices in January. Robust consumer confidence and rising household wealth from the home price gains suggest a recent slowdown in consumer spending, which has hurt growth, is likely temporary. The Conference Board said its consumer confidence index jumped 9.5 points to 125.6 this month, the highest reading since December 2000. Consumers' assessment of both current business and labor market

conditions improved sharply in March. They also anticipated an increase in their incomes. The survey's so-called labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, was the strongest since 2001. This measure closely correlates to the unemployment rate in the Labor Department's employment report. It is consistent with continued

reduction in slack in the labor market, which is near full employment. The Conference Board said the cutoff date for the survey results was March 16. This was a week before Republicans in the House of Representatives failed to pass health legislation to repeal the Affordable Care Act, a stunning political setback for Trump.

BSP Supervisory Process and CAMELS Rating – 07 April 2017 A Closer Look at the Trust Rating System – 20 & 21 April 2017 Training the Bank Trainers – 21 & 22 April 2017 Process Mapping as an Operational Risk Management Tool – 22 April 2017 BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law and the AML Risk Rating System – 05 May 2017 RA 10173: Data Privacy Act – Aligning Information Security Compliance to ISO 27001:2013 – 06 May 2017 Understanding Bank Regulations for Bank Products – 06 & 13 May 2017 Compliance with Financial Consumer Protection Framework (FCPF) – 12 May 2017 BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law and the AML Risk Rating System – 19 May 2017 How to Spot Fake IDs and Money Mules – 20 May 2017 Bank’s Taxation – Advanced – 20 May 2017 Counterfeit Detection – 29 May 2017 Solving Problems in the Workplace: Creative Problem Solving & Decision Making – 02 & 03 June 2017 BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law and the AML Risk Rating System (Cebu City) – 09 June 2017

For details, please contact BAIPHIL via telephone (853-4457/519-2433) or email training@baiphil.org.

BAIPHIL Market Watch – 30 March 2017

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MARCH 15-31

17 Christopher B. Dela Cruz - Rizal Bank Inc

18 Judy Grace D. Capili - MBTC

18 Jefferson M. Tuazon - Secretariat

19 Elvira E. Ditching-Lorico - BSP

19 Joseph B. Estavillo - CTBC

20 Constantino B. Bombais - World Partners Bank

23 Victor G. Calma - PNB

26 Ma. Dolores B. Yuvienco - Past President

CURRENT RATIO - is a liquidity ratio that measures a company's ability to pay short-term and long-

term obligations. To gauge this ability, the current ratio considers the current total assets of a company (both liquid and illiquid) relative to that company’s current total liabilities. The formula for

calculating a company’s current ratio, then, is:

Current Ratio = Current Assets / Current Liabilities

The current ratio is called “current” because, unlike some other liquidity ratios, it incorporates all current assets and liabilities.

The current ratio is also known as the working capital ratio.

BAIPHIL Market Watch – 30 March 2017

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Don't choke on the price tag! Designer creates the world's most expensive cake for a wealthy Arab

family costing almost £50million which comes complete with over 4,000 real diamonds. Every part of

the six foot long cake was hand sculpted and took over 1,100 hours to make. And it’s totally edible.

REFERENCE COMPILED AND PREPARED BY: RESEARCH AND INFORMATION COMMITTEE FY 2016-2017

BPI Asset Management Business World Philippine Daily Inquirer Philippine Star GMA News ABS-CBN News Bulletin Today PSE

Reuters Bloomberg CNN Wall Street Journal Investopedia Brainy Quotes Goodreads Corsinet- Trivia

Director: Maria Teresita R Dean (ChinaBank Savings) Chair: Sheryll K. San Jose (Equicom Savings Bank) Member: Rachelle A Fajatin (Equicom Savings Bank)

DISCLOSURE: The BAIPHIL Market Watch (BMW) is for informational purposes only. The content of the BMW is sourced from third party websites and may be subject to change without notice. Although the information was compiled from sources

believed to be reliable, no liability for any error or omission is accepted by BAIPHIL or any of its directors, officers or employees, and BAIPHIL is not under any obligation to update or keep current this information