BAIPHIL MARKET WATCH 19 July 2016

BAIPHIL
MARKET WATCH
19 July
2016
Legend
Improvement / Up
Deterioration / Down
No Movement
FINANCIAL MARKETS AT A GLANCE
PHILIPPINES
ASIA-PACIFIC
REST OF THE
WORLD
Financial Rates
USD/PHP
Current
46.7250
Stock Index
Previous
46.8000
30-D PDST-R1
91-D PDST-R1
180-D PDST-R1
1-Y PDST-R1
10-Y PDST-R1
1.7600%
3.7939%
1.8783%
2.8917%
4.4473%
1.7533%
1.7029%
1.8743%
2.8967%
4.4397%
30-D PDST-R2
91-D PDST-R2
180-D PDST-R2
1-Y PDST-R2
10-Y PDST-R2
1.7583%
3.7939%
1.8783%
2.8917%
4.4450%
1.7537%
1.8058%
1.8743%
2.8933%
4.4400%
Stock Index
NIKKEI
HANG SENG
SHANGHAI
STRAITS
SET
JAKARTA
Current
Closed
21,696.43
3,050.93
2,982.35
Closed
5,125.16
Previous
Stock Index
FTSEuro First 300
FTSE 100
DAX
CAC 40
DOW JONES
S&P 500
NASDAQ
Current
1,341.16
6,695.42
10,063.13
4,357.74
18,533.05
2,166.89
5,055.78
Previous
16,497.85
21,659.25
3,053.68
2,925.35
1,492.00
5,110.18
1,335.71
6,669.24
10,066.90
4,372.51
18,516.55
2,161.74
5,029.59
PSEi
Market Cap (Php Trillion)
Total Value (Php Billion)
PSEi Performers
Current
7,986.25
13.343
8.703
Closing
Previous
8,030.06
13.339
11.133
% Change
Top Gainers
Imperial Resources B
Imperial Resources A
Makati Finance Corp
255.00
21.30
3.69
50.00%
50.00%
10.81%
1.91
3.08
5.23
-6.83%
-6.38%
-5.77%
Top Losers
Discovery World Corp
MJC Investment Corp
Keppel Phil Holdings
Currency Exchange
USD/JPY
USD/HKD
USD/CNY
USD/SGD
USD/THB
USD/IDR
Current
Closed
7.7612
6.6974
1.3474
Closed
13,095.00
Various
EUR/USD
GBP/USD
Gold Spot (USD/oz)
Brent Crude(USD/bbl)
3-M US Treasury Yield
10-Y US Treasury Yield
30-Y US Treasury Yield
Current
1.1072
1.3266
1,328.40
47.03
0.29%
1.59%
2.30%
Previous
104.8300
7.7541
6.6865
1.3475
34.9600
13,090.00
Previous
1.1031
1.3188
1,327.20
47.61
0.30%
1.59%
2.30%
PHILIPPINES
 Philippine shares fell on the back of profit-taking after the index ended at near historical high the day prior (at 8,030.06). There was also
cautious trading ahead of the release of 2Q corporate profits. The PSEi fell by 0.55% (-43.81 points) to 7,986.25. All sub-indices fell led
by the property sector (-1%). There were 99 advancers and 94 decliners. Forty-nine (49) shares were left unchanged. Total value turnover
was Php8.70 billion. The Philippines continue to attract foreign investors, resulting in net foreign buying at Php 497.9 million.
 The peso gained against the dollar following about USD10.7 million flowing in the local equities market. The peso ended 46.725 to a
dollar from 46.8.
 Short-term local fixed income securities fell despite the BTR’s auction of its short-term papersbeing oversubscibed—demand
was overwheling with bid-tender ratio of 2.3x. The 91-day rate fetched 1.447% yield; 182-day yielded 1.442%, and the 364-day fetched
1.63%. Yields were 20bps lower on average than the previous auction (June 06). With the yield curve, the increase was led by the shortend, up 49.9 bps. The long-end also rose (+1.2 bps) while the belly fell (-10.8 bps).
 The Bangko Sentral ng Pilipinas (BSP) is set to tighten supervision of foreign exchange dealers, money changers and remittanc e
agents in the aftermath of the $81-million bank heist in February. BSP Deputy Governor Nestor Espenilla Jr. said authorities are now
BAIPHIL Market Watch – 19 July 2016
Page 1 of 13
looking at possible amendments to Circular 471 issued in 2005 covering the rules and regulations on the registration and oper ations of
foreign exchange dealers, money changers, and remittance agents. “We are tightening the oversight over non-bank financial institutions
such as remittance businesses, money changers, and foreign exchange dealers. And also reflecting the recent experience,” he s aid. The
circular indicates all foreign exchange dealers, money changers, and remittance agents are subject to the provisions of Republic Act 7653
or the New Central Bank Act and RA 9160 as amended by RA 9194 or the Anti Money Laundering Act (AMLA). Espenilla said the BSP is
upgrading the regulation to improve the supervision of foreign exchange dealers, money changers, and remittance agents and make it at
par with banks.“It is under exposure right now so we are taking industry comments. So there will be clearer, well-defined obligations
particularly on money laundering responsibilities. We want to basically make sure that everybody follows the same money laund ering
protocol. Same as banks, same as non banks,” he said. Last month, the BSP revoked the certificate of registration and delisted Philrem
Services Corp., Peso Remittance Express Inc., and Werquick Inc. due to various violations after playing a role in the $81 million cyber theft.
Last April, the BSP said it would go hard on banks violating the rules on transactions with f oreign exchange dealers, money changers, and
remittances companies. The BSP issued Memorandum M-2016 – 004 reminding all banks on sound risk management practices when
dealing with foreign exchange dealers, money changers, and remittance agents.
 Multilateral lender International Monetary Fund (IMF) said the unauthorized transfer of $81 million from the Bangladesh Bank to
entities in the Philippines through Rizal Commercial Banking Corp. (RCBC) has highlighted the need to tighten the country’s antimoney laundering laws. Chikahisa Sumi, head of the IMF mission to the Philippines, said there was also a need to ease the bank
secrecy law in the country to be at par with international standards. Hackers tried to steal $1 billion from the account of the Banglades h
central bank at the Federal Reserve Bank of New York last February. Of the 35 transactions, a total of 30 transactions were f oiled. RCBC
of taipan Alfonso Yuchengco was dragged into the money laundering scandal after it was used as a conduit by hackers. However, a total of
five transactions worth $81 million were consummated through fictitious accounts at the RCBC Jupiter branch in Makati City al legedly
facilitated by dismissed branch manager Maia Santos-Deguito and customer relations manager Angela Torres. Both employees were
dismissed by RCBC while Deguito, who dragged resigned president Lorenzo Tan into the scandal, is now facing several criminal cases
filed by RCBC and the Anti-Money Laundering Council (AMLC) for violating the Anti-Money Laundering Act (AMLA). The AMLC has filed
several cases against several personalities and Philrem Services of the Bautista family before the Department of Justice. Both the Bangko
Sentral ng Pilipinas (BSP) as well as the Senate Blue Ribbon Committee have completed their respective investigations on the money
laundering scandal. The BSP has also revoked the licenses of Philrem Services, Peso Remittance Express Inc., and Werquick Inc. for
various violations in connection with the $81 million bank heist. BSP Governor Amando Tetangco Jr. said both the IMF and the central
bank’s Monetary Board are one in pushing amendments to the anti-money laundering law to include casinos, real estate brokers, and art
dealers. “That is actually a reiteration of what was discussed before – that we support the amendment of the anti-money laundering law, to
include casinos as covered institutions under the AMLA. And also to include tax evasion as a predicate crime,” he said. Tetangco said the
Department of Finance had already forwarded to Congress the proposed amendments to AMLA and the Bank Deposit Secrecy Law for tax
evasion purposes.
 The International Monetary Fund (IMF) said the enhanced monitoring of the real estate sector by the Bangko Sentral ng Pilipina s
(BSP) has helped the Philippines survive external shocks. Chikahisa Sumi, head of the IMF mission to the Philippines, said the
introduction of the residential real estate price index (RREPI) has helped strengthen systemic risk monitoring in the financi al sector. “The
BSP’s micro and macro prudential policies as well as enhanced monitoring of real estate and credit conditions including the introduction of
RREPI have helped maintain financial stability in a challenging global financial environment,” Sumi said. The results of the first RREPI
released last June showed the country’s property sector remained vibrant in the first quarter but there are no signs of an as set bubble in
the real estate industry. The RREPI increased 9.2 percent in the first quarter from 5.1 percent in the fourth quarter of last year. The RREPI
in the National Capital Region (NCR) went up to 9.7 percent from 6.3 percent, while that of areas outside NCR (AONCR) increas ed to 9.4
percent from 5.9 percent. “This represents a vibrant housing industry in the Philippines and the robustness of this conclusion is confirmed
by the trends in consumer prices as well as the recent result of the Consumer Expectation Survey,” BSP Deputy Governor Diwa
Guinigundo earlier said. For the first RREPI, 93 banks consisting of 40 universal and commercial banks as well as 53 thrift banks submitted
their reports to the BSP in the first quarter. Last November, the BSP required all universal and commercial banks as well as thrift banks to
submit quarterly reports on residential real estate loans granted to help detect macro-prudential risks stemming from the real estate market.
The RREPI would help the central bank in addressing concerns of a “bubble” in the country’s booming residential real estate s ector brought
about by the improving purchasing power of Filipinos. The BSP stepped up its watch over the real estate sector as early as 2012 by
ordering banks to disclose more comprehensive reports on their exposures to property industry. In June 2014, the BSP introduced stricter
rules on banks’ real estate exposure to ensure that lenders have enough capital to absorb any potential losses. The pre-emptive
macroprudential policy measure approved by the Monetary Board required stress tests for banks to determine if their capital will be enough
to absorb credit risk that may arise from their exposure to the property sector. Sumi also lauded the concerted efforts of regulatory
authorities to maintain financial stability through the Financial Stability Coordination Council (FSCC), including addressing data and
regulatory gaps related to real estate developers and concentration risks posed by conglomerate structures and rising corporate leverage.
 The Asian Development Bank (ADB) has kept its economic growth forecast for the Philippines at 6 percent this year but slashed
its inflation forecast to 1.8 percent or below the government’s target range due to the muted effect of El Niño on food prices. A
supplement to the ADB’s Asian Development Outlook 2016 (ADO 2016) report last March released Monday showed that the M anila-based
multilateral lender maintained its 2016 gross domestic product (GDP) growth projection of 6 percent as well as 2017 forecast of 6.1 percent
for the Philippines. The Duterte government this month cut to a “conservative” 6-7 percent range from 6.8-7.8 percent previously its 2016
GDP growth target while the new administration adjusts. The growth target for 2017, meanwhile, was set at 6.5-7.5 percent. In the ADO
2016 supplement titled “Asia’s Growth Prospects Undimmed by Brexit Vote,” the ADB attributed the better-than-expected 6.9-percent
growth posted in the first quarter to election-related spending ahead of the national polls last May. “Pre-election spending helped boost
investment, household consumption, and government expenditure. Strong growth in industry and services also fueled this impressive
economic performance. Robust domestic consumption catalyzed construction and manufacturing. Private construction continued to grow,
while public infrastructure spending strongly rebounded, rising by 39.9 percent in the first quarter,” the ADB noted. But for the rest of the
year, “growth is expected to slow… as the effect of the pre-election spending wanes and global economic uncertainty persists,” the ADB
said. Also, the ADB noted of the slower, 3-percent growth in remittances from Filipinos overseas as of end-April from 8.6 percent a year
ago. The ADB’s 2016 inflation outlook for the Philippines, meanwhile, was slashed to 1.8 percent from 2.3 percent previously, or b elow the
government’s 2-4 percent target. Headline inflation averaged 1.3 percent during the first half, the latest government data showed. “The
adjustment is in line with a lower-than-expected result in the first five months as the impact of El Niño on food prices was less severe than
anticipated. Rice imports augmented domestic supplies, helping to ease price pressures,” the ADB explained. For 2017, the inflation
forecast was slightly lowered to 2.7 percent from 2.8 percent previously “in anticipation of higher gains in oil prices,” the ADB said. As a
whole, “growth in Asia and the Pacific’s developing economies for 2016 and 2017 will remain solid as firm performances from S outh Asia,
BAIPHIL Market Watch – 19 July 2016
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East Asia and Southeast Asia help offset softness from the US economy, and near-term market shocks from the Brexit vote,” the ADB said
in a statement. In the ADO 2016 supplement, the ADB slightly downgraded to 5.6 percent its 2016 growth forecast for developing Asia from
5.7 percent previously. “Although the Brexit vote has affected developing Asia’s currency and stock markets, its impact on the real
economy in the short term is expected to be small. However, in light of the tepid growth prospects in the major industrial ec onomies,
policymakers should remain vigilant and be prepared to respond to external shocks to ensure growth in the region remains robust,” ADB
chief economist Shang-Jin Wei said. In the ADO supplement, the ADB said that “if Brexit-induced uncertainty on global financial markets
and economies turns out to persist and grow, Brexit’s impact on Asia could be greater through the channels of trade, investment, capital
flows, exchange rates, and consumer and business confidence.” “Brexit is a timely reminder of the need for developing Asia to continue its
efforts to strengthen resilience against external shocks through sound macroeconomic management and structural reform,” the ADB
added.
 World Bank paper notes sin tax gains, but says more work necessary on health component . “OPEN and systematic monitoring” will
be critical to the success of the Sin Tax Law, a World Bank working paper reported as it flagged information gaps that need plugging. This
was among the recommendations set forth by the paper “Sin Tax Reform in the Philippines: Transforming Public Finance, Health, and
Governance for More Inclusive Development.” The paper noted that “monitoring awareness of health insurance coverage, changes in
health care utilization, and health spending is important.” Besides an annual review of the monitoring framework and the need to take early
action on data gaps, the paper also listed six other recommendations:
• Ensure the continued success of the tax stamp system coupled by the enhanced oversight of the tobacco industry;
• Ensure the poor and near-poor are informed of their entitlement to free health insurance and provide health insurance cards;
• Strengthen the Philippine Health Insurance Corp.’s actuarial capacity and institutionalize a rolling three-to-five-year Medium-Term
Expenditure Framework in the Department of Health (DoH);
• Design health awareness campaigns to combat smoking and excessive drinking;
• Enhance budget and spending transparency and accountability in tobacco-growing regions financed by “sin tax” earmarks, and;
• Sustain a broad coalition of civil society and continue legislative engagement and support.
The paper -- authored by senior economists Kai Kaiser, Caryn Bredenkamp, and Roberto Iglesias -- said the first three years of
implementation of Republic Act No. 10351 were a “success.”It noted that the price of the cheapest cigarette brand h ad increased by more
than 50% while “sin tax” revenues doubled in terms of share of gross domestic product. In terms of enforcement, 95% of cigarette packs
have been stamped with holographic tax stamps while the Bureau of Internal Revenue (BIR) has taken l egal action on tax evasion in the
sector.Meanwhile, smoking prevalence has fallen to 25%, according to the most recent Social Weather Stations survey commissio ned by
the DoH in 2015. Comparably, the figure was 30% in 2011 and 29% in 2012, before implementation of the law began. The paper also
noted that the DoH’s budget tripled in three years, and the poorest 40% of the population, as well as senior citizens, have s tarted receiving
health insurance. But the paper noted that initial implementation and monitoring challenges are likely to emerge. It pointed out that
outcomes in areas such as smoking prevalence and access to health services are subject to both “an effect lag and a measureme nt lag.”
This meant that “the impact will only be fully captured by the results framework in later years.”On the other hand, it noted that third-party
efforts and data collection innovations are “already helping” where official systems have not been able to monitor promptly.“ In light of the
historical weaknesses of administrative data in the Philippines, ex-ante efforts were needed to put in place additional data collection
mechanisms to ensure that data for an evidence-based dialogue would be available down the line, whether from official or third-party
sources,” the paper read. The government began implementing the law in 2013, and the BIR has consistently exceeded its excise tax
collection targets.
 The amount of debt paid by the government in the first four months dropped 15 percent to P220.6 billion as payments for both
principal amortization and interest declined. The latest Bureau of the Treasury data showed that the government’s end-April debt
payments slid from P260.6 billion a year ago. From January to April, the government paid P117.4 billion in interest, down from P116.3
billion last year. The bulk of the interest paid worth P73.4 billion was for domestic debt, mainly through the sale of Treasury bills and bonds.
The remaining P44 billion in interest payments was for foreign borrowings. During the four-month period, the government also paid P103.2
billion in amortization, down from P144.3 billion in 2015. Amortization payments for foreign debt amounted P60.6 billion, while P42.6 billion
was paid for domestic borrowings. In April alone, the government settled P45.2 billion in debt, of which P30.4 billion went to amortization
payments on top of P14.8 billion in interest paid. For 2016, the government had allocated P419.3 billion or 14 percent of the P3.002-trillion
national budget into debt servicing.
 The country’s banking industry can finance the higher deficit spending planned by the Duterte administration, ANZ Research
said in a recent report, noting the government’s fiscal plans could unlock opportunities for more robust economic growth.
Analysts at ANZ Research expressed no worries about the more aggressive spending plans laid out by President Rodrigo R. Duterte’s
economic managers, saying excess liquidity in the domestic financial system should be more than enough to fund the government ’s higher
deficit ceiling. Budget Secretary Benjamin E. Diokno has said that the Duterte administration will cap annual deficit at 3% of gross domestic
product (GDP) -- a ceiling designed to make room for increased public spending on infrastructure and social services. The ceiling has been
raised to 2.5% for 2016 from the 2% programmed but missed in the six years of the previous administration.“The current administration has
indicated a preference for local borrowing and is likely to maintain the target of 80%-20% debt mix in favor of local debt. The structural
excess liquidity in the local banking industry, at around 7% of GDP, is more than enough to fund the raised deficit target,” Eugenia Fabon
Victorino, ANZ economist for South and Southeast Asia, said in a July 14 report. ANZ expects GDP growth at 6.1% this year, which if
realized would fall within the government’s revised 6-7% target set for 2016. It is also marginally higher than the 6% forecast given by the
International Monetary Fund last week. The Philippine economy grew by 6.9% during the first quarter on the back of election-related
spending that added to the constant anchors of household consumption, private investments and, beginning last year, increasin g state
expenditures. Socioeconomic Planning Secretary Ernesto M. Pernia said growth should have picked up last quarter to possibly hit 7% as
election spending peaked, before tapering off this semester. Economic expansion is expected to ease to 5.8% next year, according to ANZ
estimates that compare to the government’s expectations of an even faster 6.5-7.5% growth.“Although President Duterte promises to
maintain current macro policies that have proven to be sound in the last six years, infrastructure bottlenecks [and] sectoral and regional
inequalities persist. These structural challenges, if left unresolved, could potentially cap GDP growth below potential,” the report added.
Still, Ms. Victorino said Mr. Duterte’s socioeconomic agenda -- which primarily aims to boost infrastructure spending, introduce
comprehensive tax reforms, and relax the Constitutional cap on foreign ownership -- should propel broad-based drivers of economic
growth. “President Duterte’s economic plan to diversify the drivers of growth, if successful, will lead to an even higher potential growth,” the
analyst said.“Yet, until relevant laws are passed in the Congress, all these plans will remain on the drawing board.”Central to these reforms
would be legislative cooperation in passing the planned P3.35-trillion national budget for 2017, which would raise infrastructure spending to
5.2% of GDP, as well as the law amending the 1987 Constitution that will primarily ease the 40% limit on foreign ownership in certain
industries. A comprehensive tax reform package being prepared by the Finance department is also in the works, to be submitted to
BAIPHIL Market Watch – 19 July 2016
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Congress for approval. Finance Secretary Carlos G. Dominguez III said the department expects the tax reform to be passed within the first
year of Mr. Duterte’s term.
 The Department of Finance (DOF) is pushing to raise the excise tax slapped on oil products as this has remained low and
unadjusted to inflation since it was put in place almost two decades ago. Separately, a study conducted by Manila-based multilateral
lender Asian Development Bank (ADB) showed that Filipino consumers have not been feeling an expected pass-through of the global oil
price drop in prices of basic goods. Finance Secretary Carlos Dominguez III told reporters that “now is the time” to adjust excise taxes on
petroleum products as fuel costs were low. Dominguez noted that the prevailing oil excise rate has been the same since 1997. “We have to
adjust it, at least to index it to inflation,” the finance chief said. Dominguez said the additional revenues to be generated from a higher oil
excise tax would be huge, but declined to provide a figure. Based on the DOF’s comprehensive tax reform package (CTRP) earlier turned
over to Dominguez by former finance chief Cesar V. Purisima, an excise tax increase on gas, diesel and other oil products wou ld bring an
estimated revenue gain of P132 billion in the first year of implementation. Gains from indexing oil excise outpaced the estimated P82-billion
gain if the value-added tax (VAT) rate would be jacked up to 14 percent from 12 percent at present, as was also proposed by the DOF.
Petroleum products are being taxed at varying rates, ranging from exempt to P4.50 a liter or kilogram, the DOF noted in a report. The
DOF’s proposal is to raise during the first year to P10 a liter the levy on regular gasoline and other products that are presently imposed
positive excise tax rates, such as aviation turbo jet fuel, lubricating greases and oils, leaded and unleaded premium gasolin e, naphtha as
well as petrolatum and waxes. An increase to P6 a liter, meanwhile, has been proposed by the DOF for diesel as well as other products
currently exempt from excise tax, including asphalts, bunker fuel oil, denatured alcohol used for motive power, kerosene, liquefied
petroleum gas (LPG) and processed gas. The DOF proposal also sought an indexation of excise tax rates by 4 percent every year. The
government nonetheless should provide subsidy when crude oil prices hit more than $90 a barrel, the DOF said.
 Trade Secretary Ramon Lopez plans to push for the establishment of a P1-billion regional credit access for micro, small and
medium sized enterprises (MSMEs) to help address one of the biggest hurdles faced by local firms. This was one of the povertyalleviation measures proposed by President Duterte during his campaign earlier this year. “I will have to ask the President about that. That
will benefit the MSMEs and so hopefully, we can get that support from the President and reflect that immediately in the next budget,” Lopez
said in an interview with the Inquirer. According to Lopez, the additional amount would also help fund more shared services facilities (SSF),
a flagship program of the Department of Trade and Industry that provides MSMEs with equipment or infrastructure that can be used by a
number of beneficiaries such as cooperatives, institutions and communities. A portion of the fund can also be used for the Negosyo
Centers for productivity enhancement programs and for further training, seminars and mentoring activities. “This [additional credit] only
means that we will be able to do more. This is exciting for us because in teaching the nation how to fish, we will be able to feed the nation
many lifetimes. This is the mantra that we are following. What we want is to empower our MSMEs,” Lopez explained. During the campaign,
the Duterte camp promised that MSMEs would be able to borrow capital from the government to expand their business. Currently, small
businessmen have nobody to turn to but loan sharks while rich businessmen could get capital from their family, bank or by selling their
properties.
 State agencies, corporations and local government units (LGUs) were granted more time to transfer their bank deposits to
qualified state-run banks, the Department of Finance said. From the original deadline of September, the agency said state offices and
institutions now have until June 30, 2017 to comply. “(This is) in view of numerous requests received by the department and to minimize
operational impact among (agencies), GOCCs and LGUs,” Department Order 002-2016 stated. The order, which was quoted in a
statement yesterday, was signed by Finance Secretary Carlos Dominguez. The transfer of public funds to select government banks is part
of the previous administration’s Treasury Single Account program that aimed to strengthen monitoring of state funds. Under the program,
all public money are supposed to be kept in select government banks which are traceable to the Bureau of the Treasury through an
account located at the central bank. Dominguez said agencies and offices are required to follow the original department order in 2015 that
listed down the qualifications for banks which may secure state money. Aside from being state-run, lenders should also have a universal
bank license and a rating of at least “3” on Camels pertaining to capital adequacy, asset quality, management, earnings, liquidity and
sensitivity risk.
 The Philippines will continue to seek ratification of its participation in the China-led Asian Infrastructure Investment Bank (AIIB)
which has vowed to remain impartial despite current political tensions between the two countries. “There are no changes in plans
to seek the Senate’s ratification of the agreement,” Finance Secretary Carlos Dominguez told The STAR in an e-mail. For its part, AIIB said
its lending rules would not be affected by the recent arbitration ruling in the West Philippine Sea, emanating from a case filed by the
Philippines which China rejected. “AIIB is an apolitical organization established to promote economic growth in Asia through sustainable
investment in infrastructure,” said Song Liyan, the organization’s senior communications officer. “The bank may provide or facilitate
financing to any member,” he said in a separate e-mail. Manila became the last signatory to the AIIB Articles of Agreement last year after
then president Benigno Aquino III ordered a study on possible implications of the membership. The country has until Dec. 31 this year to
ratify the agreement. Aside from the Philippines, only nine of 57 member-countries have not ratified the pact. In his e-mail, Song quoted
Article 31.2 of the AIIB agreement, which stated that the Beijing-based bank and its officers “shall not interfere in the political affairs of any
member.” “Only economic considerations shall be relevant to their decisions. Such considerations shall be weighed impartially in order to
achieve and carry out the purpose and functions of the bank,” the article stated. Sought for comment, Emilio Neri Jr., lead economist at
Bank of the Philippine Islands, said AIIB could help finance plans for higher expenditures and deficit of three percent of economic output. “I
am sure the Duterte administration would want to have an alternative source of funding, especially for infrastructure,” Neri said in a phone
interview. “This is especially true with their plans to increase spending and widen the deficit. AIIB can help finance that,” he added. AIIB
was established presumably to rival the Washington-led World Bank and European-chaired International Monetary Fund in the global
arena. Once the agreement is ratified, the Philippines would need to contribute $196 million, payable in five years, to the institution’s $100 billion capital stock. In terms of voting power, Manila will get 12,821 votes, equivalent to 1.11 percent of AIIB membership.
 The Philippines formally asked the World Trade Organization (WTO) to look into inconsistencies in the customs valuations that
Thailand continued to impose on imported cigarettes. This request came after the two nations failed to resolve their dispute during
bilateral consultations held in Bangkok on June 2. In a filing with the WTO dated July 6, the Philippines said the Thai public prosecutors’
move to file tax evasion raps against officials of Philip Morris (Thailand) Ltd. undermined a decision issued by the multilat eral body back in
2011. According to the public prosecutors, the cigarette firm allegedly under-declared the value of 272 batches of cigarettes imported from
the Philippines. The total cost of the imported goods and duties was estimated to be more than 20 billion baht ($557 million). If found guilty,
Philip Morris Thailand would have to face a fine four times the estimated cost of the imported goods, including taxes. Local trade officials
expressed fear the results of the tax evasion case would affect some two million Filipinos directly and indirectly dependent on the
operations of Philip Morris, which is the Philippines’ biggest manufacturer of cigarettes. Thailand is the main export destin ation of the
BAIPHIL Market Watch – 19 July 2016
Page 4 of 13
product. Citing the WTO ruling, the Philippines said Thailand must impose a fair valuation of tariffs on imported cigarettes. “Thailand has
failed to explain its basis for considering that the purchase prices paid by a Thai duty-free operator for duty-free cigarettes can be used as
the customs values for Philip Morris Thailand’s imported cigarettes,” the Philippines said in its filing before the WTO. The Philippines said
the actions taken by Thailand violated provisions under the WTO Customs Valuation Agreement (CVA), also known as the Agreemen t on
Implementation of Article VII of the General Agreement on Tariffs and Trade (GATT) 1994.
 The Department of Transportation and Philippine Ports Authority (PPA) are reviewing the Davao Sasa Port Modernization project
as the new government intends to pursue the deal. “I think the intention is really to proceed with the development of the port. However,
considering the issues that have surrounded that, my initial discussion in terms of policy with (Transport) Secretary (Arthur) Tugade is to
review that first and let’s see because it has reached a point where it is very convoluted already,” PPA general manager Jay Daniel
Santiago said. The project involves the development of the existing Davao Sasa Port in Davao City into a modern container terminal which
meets international standards. Under the terms released by the previous administration for the project, the government and winning bidder
would have a 30-year cooperation period for the project. The winning private firm will be responsible for funding the construction and other
development works at the port including the new apron, linear quay, expansion of the back-up area, container yards, warehouses, and the
installation of new equipment like ship-to-shore cranes and rubber-tyred gantry. The private partner will likewise be responsible in operating
and maintaining the port. Santiago said the review would look into whether the project could be pursued based on details from the previous
administration such as projected cost and volume or there would be a need to make some adjustments. “But definitely, the intention is to
pursue it. It will be done. It’s just a matter of how big or how small the project will be,” he said. He said the project is considered to be
critical to the development of Davao and the Mindanao region. Based on a study of the International Finance Corp. and the Development
Bank of the Philippines, the modernization of the Sasa Port is expected to address the projected six percent annual increase in container
traffic in the Davao Region in the coming years.
 State-owned Bases Conversion and Development Authority (BCDA) has bolstered its pool of experts for the Clark Green City
development. This was after 100 government executives recently completed a Singapore-sponsored green city development
course. “We recognize the need for urban planners in the country who can actively address the blows of climate change to human
society,” BCDA president Arnel Casanova said. “The wheels to develop the country’s most modern urban core are now in motion and we
have the drivers to steer the wheels in the right direction,” he added. The training course was jointly funded by the city-state’s Temasek
Foundation and Nanyang Technological University of Singapore. It involved courses in urban policy, governance, and green city
development, where Singapore has been globally recognized. Casanova said he hoped the course gave state employees insights on how
to better develop the 9,450-hectare Clark Green City in Pampanga expected to house 1.12 million residents. The project is expected to
house energy-saving facilities to ensure adaptation and resiliency to climate change and its resultant natural disasters. “We are doing (this)
in our desire to build this new city for the Filipino people, a city that can combat climate change, decongest Metro Manila and expand
opportunities for economic empowerment,” Casanova said. He said the training program has allowed the BCDA to build a core group of
local government leaders and competent urban planners. Aside from housing over a million residents, Clark Green City is also seen to be
home to 800,000 workers who would contribute a gross output of P1.57 trillion annually to the economy. This accounts for around four
percent of the country’s economic output.
 The government’s housing financing arm is in talks with regulators to establish the country’s first Islamic housing finance to
cater to the under-served Muslim population. “We are already discussing with SEC (Securities and Exchange Commission) and BSP
(Bangko Sentral ng Pilipinas) because we need to follow some regulations. We really hope we can launch it next year,” said Maria Luisa
Favila, manager at National Home Mortgage Finance Corp. (NHMFC). “We are eyeing about P400 million as initial fund,” she said in a
phone interview Friday. Islamic finance means borrowed money will not be charged inteTest, in compliance with Sharia law. Quoting the
Philippine Statistics Authority, NHMFC said there are a total of 5.8 million Muslim Filipinos nationwide, mostly based in Min danao. Since
banks charge interest on their loans, Favila said most Muslims find it difficult to secure credit for their housing requirements, making them a
viable open market to be explored. Currently, NHMFC is studying which among the Islamic financing options should the government
implement. This includes rent-to-own arrangements, profit sharing, partnerships, and installment payments. “For rent-to-own, the idea is
that there would be rental and acquisition payments. Rental payments would serve as our share which we can classify as our earnings,”
Favila explained. Partnerships and profit sharing, meanwhile, involve equal settlements between the NHMFC and the buyer, while
installment payments “work like deferred credit card payments,” where other charges could be included.
 The Home Development Mutual Fund has saved P136 million in operational expenses after contact centers were outsourced in
December, it said in a statement. HDMF said the Pag-IBIG Fund Contact Center became more accessible to members since the service
officially began in partnership with business process outsourcing firm Teleperformance in December. The contact center serves 16.4 million
members. HDMF, more popularly known as Pag-IBIG, is the first government agency to have struck such a partnership with
Teleperformance.Services may be accessed through the hotline 724-4244, via email at [email protected], or by chat through
a link on its Web site, www.pagibigfund.gov.ph. “With Teleperformance’s expertise in the BPO industry, the partnership between Pag-IBIG
and Teleperfomance is another realization of the Pag-IBIG Fund mantra of bigger, better, faster," President and Chief Executive Officer
Darlene Marie B. Berberabe was quoted in the statement.
 Korea Exchange Bank (KEB) has renamed its branch in the Philippines to KEB Hana Bank to reflect its merger with another
Korean lender last year. Central bank deputy governor Nestor Espenilla Jr. announced the changes through Circular Letter 2016-056.
Espenilla said the bank registered its amended license to transact business in the Philippines bearing its new corporate name with the
Securities and Exchange Commission (SEC) last March 28. The Hana Financial Group acquired KEB from Lone Star in 2012, paving the
way for the integration of its subsidiaries that took around three years to complete. After the merger, KEB Hana Bank became the largest
lender in South Korea in asset terms. This was not the first time the bank changed its name. Upon its founding in 1967, the former KEB
was known originally as Korea Exchange Bank. KEB Hana Bank provides commercial banking, trust banking, foreign exchange, and
merchant banking services to retail and corporate customers in South Korea and internationally. The Seoul-based bank was among the
first foreign lenders that took advantage of Republic Act 10641, enacted in 2014, which liberalized the country’s banking industry further.
The law allowed the entry of more international banks from previously only allowing 10. Under the original law, new lenders w ould only be
accepted upon exit of any of the existing players. Aside from KEB Hana Bank, other Korean lenders already operating in the Philippines
are state-run Woori Bank, Shinhan Bank and Industrial Bank of Korea.
 The Philippine Rating Services Corp. (PhilRatings) maintained its PRS Aaa credit rating for Filinvest Development Corp.’s P8.8
billion in outstanding bonds due 2024. Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s
capacity to meet its financial commitments on the obligation is extremely strong. PRS Aaa is the highest rating assigned by PhilRatings.
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The rating took into consideration FDC’s stable earnings stream from its diversified business portfolio, the company’s main c ontributing
subsidiaries in terms of income and cash flows, proven track record and the positive outlook for the Philippine economy. “PhilRatings’
ratings are based on available information and projections at the time that the rating review was performed. PhilRatings shal l continuously
monitor developments relating to FDC and may change the rating at any time, should circumstances warrant a change,” the local credit
watcher said. FDC was established on April 27, 1973 to engage in real estate development, banking and financial services, su gar
production, resorts and hotel development, as well as power generation. The group, through its subsidiaries has been in business for over
four decades, surviving the country’s economic downturns, financial crises and political turmoil. The Gotianun-owned holding firm
maintained an upward trajectory in its revenues in the past four years. In 2015, consolidated revenues grew 27.8 percent to P 49.3 billion
with real estate and banking operations continuing to be the main drivers of growth, accounting for 42.7 percent and 36.8 percent of total,
respectively. The sugar, hotel and power businesses likewise continued to steadily grow as well. Both Filinvest Land Inc. (FLI) and East
West Banking Corp. maintained their strong competitive position over the years, and are considered as significant players in their
respective industries. FLI intends to maintain its dominant position for middle-income/affordable housing segment projects. In addition, it is
investing in expanding its rental portfolio. EastWest, meanwhile, will continue to focus on the consumer and mid-market corporate
segments, combined with its aggressive competitive strategy, which has allowed it to become an important player in its chosen niche.
“Medium-term prospects for the real estate sector continue to remain strong, with numerous projects in the pipeline for the residential,
office and retail segments. Demand is supported by the existence of a growing BPO industry and rising disposable income,” Phi lRatings
said. “Additionally, economic growth in the next two years is expected to remain robust, hence the positive outlook of international credit
rating agencies for Philippine banks. The industry is expected to continue enjoying strong levels of liquidity, supported by large volumes of
deposits and liquid assets. Given the foregoing developments, banks are considered to be in a good position to expand their loan portfolios
going forward,” it added.
 Property giant Ayala Land Inc. sees strong demand for office space in the Philippines to continue in the coming years on the
back of a booming business process outsourcing (BPO) industry. ALI is targeting to put up 825,000 square meters of gross leasable
office area by the end of the year from the existing 715,000 sqm after pouring in P23.4 billion for project and capital expenditures in the first
quarter of the year. The company plans to continue building more office buildings to address the need for leasable areas. “The higher
occupancy we experienced last year will continue,” said Carol Mills, head of ALI’s office division. She said ALI was well positioned to
address the market’s needs with the development of new office spaces in major business hubs across the country. The company is
transforming over 6,000 hectares of properties nationwide into economic growth centers similar to its established estates in Makati,
Bonifacio Global City (BGC), Ayala Center Cebu and Nuvali. It has recently completed the BGC Corporate Center and Bonifacio Stopover,
the Alabang Town Center BPO facility, and additional office buildings in the UP-Ayala Land Technohub and eBloc 4 at the Cebu IT Park.
Mills said the company has established presence not only in Makati, BGC, Quezon City and Alabang, but also in Baguio, Laguna, Cebu,
Iloilo, Bacolod, Davao and Cagayan de Oro. “Our office spaces are developed according to global standards and are complemented by
preferred amenities and the most reliable facilities management services,” she said. In BGC, ALI’s Bonifacio Stopover Corporate Center is
a highly urbanized destination at the corner of 31st Street and 2nd Avenue and within the e-Square IT Zone. The state-of-the-art building
offers 35,000 square meters of gross leasable area and provides easy access to major thoroughfares such as EDSA, Kalayaan Avenue,
and C5. Neighboring BGC Corporate Center is a PEZA-registered facility offering a gross leasable area of 28,000 square meters. The
modern office tower is bound by two main roads: 11th Avenue and 30th Street and is within close proximity to Ayala Land Premi er’s One
Serendra residential condominium, Ayala Land’s Seda hotel, and is steps away from Bonifacio High Street. Another development is the
UP-Ayala Land Technohub in Quezon City which is the biggest office campus development within the metropolis with over 165,000 square
meters of leasable space surrounded by green open spaces and is the ideal home to flagship locators such as HSBC, Manulife, IBM,
Convergys and United Health Group. In the first quarter of the year, ALI posted a net income of P4.7 billion, 14 percent higher than the
P4.12 billion profit recorded in the same period last year on the back of consolidated revenues of P26.97 billion.
 The Villar Group is eyeing to list another company within the next five years following the successful listing of Golden Have n
Memorial Park, a memorial park and death care services company. “We can do something in one or two years, if the market is good,”
Villar Group chairman Manuel Villar said. There are plans to possibly list Fine Properties Inc., the investment holding company of the
Villars, or All-Home, the Villar family’s one-stop shop for homebuilders and designers. Golden Haven may also do a follow-on offering later
on, after listing only 74 million shares, representing 15 percent of the total issued and outstanding common shares. The company plans to
build seven new memorial parks a year with the aim of having at least 50 parks nationwide. “I’m looking at seven every year,” Villar said.
“Golden Haven is like our Camella residential business. They are of good quality but affordable. And, since Camella is in 100 cities and
municipalities nationwide, I don’t see why Golden Haven can’t be in at least half of these locations.” But Villar said the memorial parks
would not be developed beside Camella residential subdivisions. “There are zoning in these areas that we need to comply with. There are
residential zones and different zones for memorial parks,” Villar said. The company will be opening its first funeral chapel in its Las Piñas
branch with the aim of having chapels in all of their memorial parks as a complementary service. “Right now we are now planning to roll out
chapels nationwide. We did not have chapels when we went public but we are starting to build them now. Normally, we are slow at the start
while perfecting the business model but we should be ramping it up after we have the right model,” Villar said. The company also opened a
crematorium in Cavite.
 Lopez-owned Skycable is expanding its services to deliver enriching content and information even outside the home as part o f
efforts to extend the Sky experience to more Filipinos. This is done through the rollout of Skydirect, Sky’s direct-to-home service
nationwide signalled the expansion. The company is also beefing up its broadband services. Through Skydirect, Filipino families can watch
superior content from Sky’s rich channel line up, allowing viewed to enjoy content anytime, anywhere through Sky on Demand, i ts videoon-demand platform. “By expanding our services beyond cable, we make the content experiences of Filipinos richer, flexible and
convenient because we know Filipinos consume content using multiple devices,” said Alan Supnet, marketing head of Sky Cable C orp. He
added extending the premium cable TV service is part of efforts to expand its services to Filipinos. “We also have the most number of
channels that cater to every family member and we don’t want it to be limited only on TV,” Supnet said. At present, Sky airs ABS-CBN HD,
ABS-CBN Sports + Action HD, ANC HD and HBO HD, among many others. The cable service provider aims to bring a wide array of
premium content which can be watched using multiple devices. Sky Cable Corp. is a unit of broadcast network ABS-CBN Corp. The
company recently named Antonio Ventosa as chief operating officer. Ventosa joined ABS-CBN in 2006 as head or marketing and moved to
other business subsidiaries including Studio 23, ABS-CBN Publishing and Creative Programs Inc., among others.
 Mc Donalds’s Philippines will achieve its goal of putting up 500 stores within the year, allowing the company to start working on
its next target of opening 400 more outlets, a top executive said. Golden Arches Development Corp. (GADC), the local franchise
holder of the American fast-food chain, shall have opened its 500th store in the Philippines by yearend, its Deputy Managing Director and
Executive Vice-President Margot B. Torres told reporters on the sidelines of the BusinessWorld Economic Forum in Taguig City on July 12.
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GADC had expected to realize such a target in 2015. The company, however, has reached 494 stores at end-June, Ms. Torres said. Asked
what kept the GADC from hitting the target, Ms. Torres replied in a mix of English and Filipino: “That’s the battle cry every year -- to reach
500 -- but we knew we cannot just open a new store without a good site because we have to ensure that our growth is responsible.”GADC,
however, is confident it will finally complete 500 stores this year. “We are going to hit that maybe before the end of the year,” Ms. Torres
said. Moving forward, GADC looks to open 400 new stores to grow the McDonald’s network in the Philippines to 900 branches. These will
include additional outlets within the National Capital Region, Ms. Torres said. “There’s still room for growth in Metro Manila but there’s a lot
of potential outside. Just our penetration in Visayas and Mindanao offers a big opportunity,” Ms. Torres noted. “But like I said, we’re very
conscious about the growth. We want to be responsible especially for our existing franchisees, we don’t want competition amon g them, so
we’re managing that growth,” Ms. Torres added. More than the growth, GADC is working on improving its same-store sales further. “Our
sales have been strong since the second half of last year, when we launched our Minions toy collectibles and tapped ‘AlDub’ (onscreen
couple Alden Richards and Maine Mendoza) to promote our new chicken fillet,” Ms. Torres said, referring to its new menu item Chicken
Fillet Italiana. The company managed to recover from an industry-wide contraction in the first semester of 2015, when consumers were
seen saving more money to spend on travels and education, among others, Ms. Torres noted. “And then we started to see the industry pick
up in the second half and then we were very aggressive also. Now we are in a time when we are growing against the strong period,” Ms.
Torres added. Aside from finding good sites for expansion and standing out amid increasing consumer options, Ms. Torres cited the
proliferation of malls a challenge for McDonald’s Philippines because this could divert foot traffic from one store to another. “They’re
opening everywhere, people has so many places to go now, community malls are opening as well,” Ms. Torres said. GADC, a subsidiary of
Andrew L. Tan’s Alliance Global Group, Inc., reported its net profit grew by 19% to P191 million in the first quarter of 2016, from P161
million a year ago. Total revenues jumped 9.7% to P5.24 billion for the January to March period, “primarily due to the opening of 29 new
restaurants (11 company-owned, 15 franchised, 3 joint venture), reimaging of 28 existing restaurants, expansion of business extensions,
the introduction of new products, and aggressive advertising and promotional campaigns to support Extra Value Meals, Everyday
McSavers, McSaver Meals, Desserts and Breakfast,” AGI said in a regulatory filing.
 DMCI Homes, the real estate arm of the Consunji group’s DMCI Holdings, Inc., is investing about P3 billion for its four-building
Verdon Parc, a condominium project here that was started about two years ago. At the opening of the project showroom on Saturday,
Florante C. Ofrecio, DMCI Homes senior vice-president for sales, said they are still on schedule to complete Verdon Parc by 2022 as
construction of the second building has been started. The first building with 167 units is about 80% sold and is scheduled to be turned over
to buyers next year.“The reception of the market is good considering that this is our first project here,” said Mr. Ofrecio. Company data
indicate that about 60% of the buyers are end-users, meaning those who are expected to live in the property, while the rest are more of
buyers-for-investment. Mr. Ofrecio also said sales for condominium units is now less dependent on overseas Filipino workers (OFWs)
given the growth of industries like business process outsourcing (BPO) and tourism, which create a market for both buyers and renters.
Property developers in the city previously said about 40% of their buyers were families of OFWs, making them the single biggest market.
Although Filipinos working abroad are still remitting a huge amount of money to the country, the BPO sector is expected to match OFW
remittances with its receipts by 2020, Mr. Ofrecio added.Based on the report of the Bangko Sentral ng Pilipinas last week, OF Ws sent
about $11.99 billion during the first five months of the year, 2.7% higher than the same period last year. Meanwhile, Mr. Ofrecio said about
a hectare of the three-hectare property is allocated as open space and there will four swimming pools within the complex.
 Higher student enrollments helped STI Education Systems Holdings, Inc. post a P1-billion net income for its fiscal year ending
March 31, 2016. In a statement, STI Holdings said its annual net income jumped 47% to P1.07 billion from P731.4 million during the same
period in 2015. The growth was attributed to the “increase in enrollments, as well as the courses students took up in schools owned by STI
Education Services Group (STI ESG) and other franchised schools.” The financial year of STI Holdings ended on March 31, 2016 as the
company follows the Philippines’ academic cycle -- April to March. STI Holdings said its gross revenues rose 16% to P2.58 billion as of
end-March, from the previous year’s P2.22 billion. Tuition and other school fees jumped 17% to P2.27 billion, as student enrollment
increased by 6% and average tuition fees implemented by most schools went up by 5%. Total enrollees reached 84,764 for the sc hool year
(SY) 2015-2016. The bulk or 77,645 were enrolled in the STI network of schools, of which 42,878 students wer e enrolled in companyowned schools, and the rest in franchised schools. In addition, STI ESG’s enrollment mix was more favorable in SY 2015-2016 than in SY
2014-2015, as enrollment leaned more towards STI network’s CHED (Commission on Higher Education) four-year programs than the twoyear programs... The four-year CHED programs charge higher tuition and bring in more revenue per student,” the company said in a
regulatory filing. STI Holdings said only 12% of students enrolled in short-term technical courses, versus the 16% who enrolled in these
courses in the previous school year. STI Holdings President Monico V. Jacob said the company’s strong growth will allow it to fulfill its goal
of providing affordable quality education.“For STI Holdings, education is both an enterprise and a vocation to give more of our countrymen
access to education that will make them, especially the young ones, more competitive not just locally, but also globally,” he was quoted as
saying in the statement. In September 2015, STI Chairman Eusebio H. Tanco said the company is reviving its overseas push, setting aside
between $5 million to $10 million for an STI-branded school in a Southeast Asian country.“We want to put truly a real school not just for
OFWs (overseas Filipino workers) in the area but for the people, for the country. We want to be competitive in those areas, competing with
the local colleges,” Mr. Tanco had said.
 International Container Terminal Services, Inc. (ICTSI) secured a $300-million syndicated loan for the ongoing construction of its
port in Melbourne, Australia. In a disclosure to the Philippine Stock Exchange, the company of Enrique K. Razon announced the signing
of the syndicated loan facility with seven banks on Friday. The loan matures in seven, 10 and 16 years. Citibank N.A., KFW IPEX-Bank and
Standard Chartered Bank serve as the mandated lead arrangers and bookrunners, Bank of China Limited, DBS Bank Ltd., Investec Bank
PLC as mandated lead arrangers and Cathay United Bank as lead arranger.Finnvera, the official export credit agency of Finland,
participated in the transaction by providing a guarantee for a portion of the facility. The facility will cover the ICTSI’s financing needs for the
ongoing construction and development of Victoria International Container Terminal at Webb Dock East in the Port of Melbourne. The
project is 100% owned by ICTSI and marked the Philippine port operator’s first entry into Australia. ICTSI started building the terminal in
late 2014. The project is planned for completion in two stages, with commercial operations expected to begin in the fourth quarter of the
year for the first phase and next year for the second. ICTSI also secured a project finance facility in October 2015, when Contecon
Manzanillo S.A. de C.V. signed a $260-million loan for its port development and operations in the Port of Manzanillo in Mexico.“The VICT
deal has pushed the project finance envelope in Australia on a number of aspects, and this has made the process quite challen ging," ICTSI
Corporate Finance Director Manuel V. Pascua was quoted as saying in the statement.
 Concepcion-led food and beverage company RFM Corp. grew its net profit in the first six months by 8 percent year-on-year to
P508 million, gaining from strong consumer spending during the period. This is in line with RFM’s goal to breach the P1-billion net
profit milestone this year. For the six-month period, RFM booked P5.8 billion in sales revenues, up by 5 percent over the revenues posted
for the same period last year. In a disclosure to the Philippine Stock Exchange on Monday, RFM president and CEO Jose Concepcion III
BAIPHIL Market Watch – 19 July 2016
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reported that sales of Selecta ice cream and Fiesta pasta had posted strong growth for the first semester. Ice cream sales got a boost from
the combined impact of El Nino and the usual hot weather during summer, he said. The company also reported that its Fiesta pasta and
sauce brand, White King cake and flour mixes as well as Selecta Milk had likewise seen good topline growth for the period. Concepcion
noted that “improvements in our supply and distribution system also supported the growth momentum in sales and profits.” RFM expects to
sustain this topline growth momentum for the second half of the year, especially with more product innovations for the consum ers.
 Leading local convenience store operator Philippine Seven Corp. grew its net profit in the first six months by 32.5 percent yearon-year to P472.3 million as election spending boosted retail sales alongside an expansion in its store network. For this year, PSC
plans to raise its capital expenditure budget to P3.5 billion from last year’s P3-billion allotment, to further support its store expansion
strategy amid stiffer competition. The local licensee of 7-Eleven convenience stores ended June with 1,740 stores, rising by 23.8 percent
year-on-year. Of the total network, the biggest number is still in Luzon at 1,474 while 203 stores are in Visayas and 63 in Mindanao.
Franchisees control 57 percent of total stores while 43 percent are corporate-owned. Retail sales of all stores reached P15.5 billion, up by
27.2 percent compared with the level set last year. Same store sales went up by mid-single digit during the period. “The company is set to
attain another milestone this year in terms of store count and profitability,” PSC said. Bulk of the P3.5 billion capital spending for the year is
allocated to new store opening, store renovation and equipment acquisition. “While competition is likely to be more intense, PSC is the
most capable to strengthen its position in the convenience store sector. It aims to capitalize on its first-mover advantage and intends to
benefit from the capacity-building expenditures over the last three years. It believes that the market will continue to grow as it enables the
organization in achieving new heights,” it said. PSC operates the largest convenience store network in the country. It acquired from
Southland Corp. (now Seven Eleven Inc.) of Dallas, Texas the license to operate 7-Eleven stores in the Philippines in December 1982. It
debuted on the Philippine Stock Exchange on 1998.
ASIA-PACIFIC
~~The Financial Markets of Japan and Thailand were closed yesterday, July 18, 2016 for a public holiday~~
 China stocks dipped on Monday, weighed down by property and financial shares after data showed gains in home prices were slowing.
Although June home prices still rose 7.3 percent year-on- year, prices edged up only 0.8 percent for the month, slightly weaker than in
May, according to Reuters calculations based on data issued by the National Bureau of Statistics (NBS). The price report followed data on
Friday which showed growth in investment in China's real estate sector had slowed in first half of 2016, adding to worries that a
construction-led pick-up in the economy may not be sustainable. The CSI300 index fell 0.1 percent to 3,273.46 points by the end of the
morning session, while the Shanghai Composite Index lost 0.1 percent to 3,050.93. Real estate, construction and utilities stocks led
indexes lower, with the Shanghai Composite property sub-index off 0.5 percent. An article in the official People's Daily newspaper on
Monday added to fears that the property market was losing momentum, analysts said. The article cited a report by the government-linked
Chinese Academy of Social Sciences saying that house price growth will slow down from the second half of 2016 to the second q uarter of
2017, and the pace of investment in real estate will ease. With other portions of the economy still under pressure, the real estate recovery
in recent months has provided a key source of support for industry and the labour market, and equities are highly attuned to any signs of
weakening. "The market is extremely sensitive right now," said Li Zheming, analyst at Datong Securities in Dalian. China CSI300 stock
index futures for August fell 0.1 percent, to 3,238.8, 34.66 points below the current value of the underlying index.
 In Hong Kong, the Hang Seng index edged up 0.2 percent to 21,696.43 points, while the Hong Kong China Enterprises Index lost 0.1
percent to 9,039.22. The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 128.90. A
value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.44 billion yuan.
Total volume of A shares traded in Shanghai was 10.34 billion shares, while Shenzhen volume was 12.56 billion shares. Total trading
volume of companies included in the HSI index was 0.6 billion shares.
 Southeast Asian stock markets took a breather on Monday after last week's gains and ahead of the European Central Bank's first
policy meeting since Britons voted to leave the European Union. ECB President Mario Draghi is likely to plead for governments to do
more to boost the euro zone's economy in a meeting on Thursday, its last before an eight-week summer break. The ECB is not expected to
change its monetary stance. Governments in China, Japan and Britain have already started easing their fiscal stance or hinted at plans to
do so. "After six strong days of climb recently, U.S. investors are taking a breather. Likewise, Asian stocks are also locking their gains since
a week ago," said Cheng Hooi Lee, an analyst with Malaysia-based Maybank Investment Bank. "Probably for the afternoon session, Asia
would remain sluggish and trading between 0.5 percent gains and 0.8 percent losses ahead of the ECB's potential stimulus plans."
Property developers and telecom stocks led the losses. "That would explain why others are more flat than usual." Indonesian and
Vietnamese stocks eked out small gains, while Malaysia was slightly lower. Thailand stock markets are closed on Monday and Tuesday for
national holidays.
 Oil prices were little changed in early Asian trade on Monday as traders shrugged off the impact of Friday's attempted coup in Turkey.
A stronger dollar weighed on prices, although upbeat economic data from the United States and China that supported the outlook for global
oil demand lent support. U.S. crude futures fell 12 cents to $45.83 a barrel as 0041 GMT after ending the previous session up 27 cents,
gaining more than 1 percent for the week. Brent crude futures slipped one cent to $47.60 a barrel after closing up 24 cents in the previous
session, having gained nearly 2 percent for the week. "The market is looking past the coup," said Ric Spooner, chief market analyst at
Sydney's CMC Markets. "There is no disruption to shipping. There is nothing in terms of short-term risk (to oil supply)," he said. Istanbul's
Bosphorus Strait, a key chokepoint for oil which handles about 3 percent of global, shipments mainly from Black Sea ports and the Caspian
BAIPHIL Market Watch – 19 July 2016
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region, was reopened on Saturday after being shut for several hours after Friday's attempted military coup. "Despite the prospect of some
risk appetite waning after the attempted coup in Turkey, its potential impact on oil supply should see commodities remain supported," ANZ
said in a market report on Monday. The dollar index nudged higher against a basket of currencies in early trade on Monday. A stronger
greenback makes dollar-priced commodities more expensive for holders of other currencies. But buoyant economic data from the U.S. and
China on Friday, the world's two biggest economies, lent support to oil prices. "There was another set of strong retail sales data (on Friday)
- U.S. GDP numbers have done pretty well in the second quarter," Spooner said. U.S. retail sales rose more than expected in June as
Americans splurged on motor vehicles and other goods, while U.S. industrial production recorded its biggest increase in 11 months in June,
official data on Friday showed. Data on Friday also showed China's economy grew faster than expected in the second quarter, fueled by
government spending.
 Japan's SoftBank Group Corp has agreed to buy ARM Holdings PLC for 23.4 billion pounds ($31 billion), the Financial Times
reported on Monday, citing two people familiar with the negotiations. ARM, which provides technology for the iPhone, is a major
presence in mobile processing, with its processor and graphics technology used by S amsung, Huawei [HWT.UL]and Apple in their inhouse designed microchips. SoftBank could not immediately be reached for comment. ARM Holdings officials were not available outside
market hours. If confirmed, the deal would be one of the largest in European technology to date, and SoftBank's largest ever, bigger than
the $22 billion acquisition of a controlling stake in wireless operator Sprint in 2013, a deal that left the group with hefty debts. An
announcement on Monday would come less than a month after the Japanese group's founder, Masayoshi Son, scrapped his plans to leave
the company. He said he wanted to develop Sprint and complete the transformation of SoftBank into an Internet investment powerhouse. It
also comes just weeks after Britain voted to leave the European Union, battering sterling and bolstering the yen. According to the Financial
Times report, SoftBank will pay 17 pounds in cash for each ARM share, a premium of more than 40 percent to Friday's close at 11.89
pounds.
 Home prices in China's 70 major cities rose 7.3 percent in June from a year earlier, an official survey showed on Monday,
accelerating from a 6.9 percent rise in May. Gains on a monthly basis continued to slow, however, as some cities tightened policies
amid fears of a housing price bubble. The monthly rise slowed slightly to 0.8 percent in June, compared with 0.9 percent in May, according
to a Reuters calculation based on data issued by the National Bureau of Statistics (NBS). On a year-on-year basis, Shenzhen and Xiamen
were the two top performers, with home prices rising 46.7 percent and 33.6 percent, respectively. Beijing prices rose 20.3 percent, slightly
faster than in May, while Shanghai prices rose 27.7 percent, the same as in May. A recovery in China's property market sinc e late last year
and a government infrastructure building spree in recent months have helped shore up growth in the world's second-largest economy,
which has been weighed down by weak demand at home and abroad, cooling investment and excess industrial capacity.
 Chinese $1.2 billion takeover of Norway's Opera fails, but alternative deal set. A $1.24 billion agreed takeover of Norwegian online
browser and advertising company Opera Software by a Chinese consortium of internet firms has failed, Opera said on M onday, after
warning last week the deal had yet to win regulatory approval. As an alternative, the consortium, which includes search and security
business Qihoo 360 Technology Co and Beijing Kunlun Tech Co, a distributor of online and mobile games, will take over certain parts of
Opera's consumer business for $600 million, Opera said in a statement. The Norwegian firm did not specify the reasons on Monday for the
scuttling of the deal other than to say that conditions to close the public offer were not met. The deal had needed the approval of Chinese
and U.S. authorities, but last week Opera warned that regulatory approval had yet to be received, without specifying whether approval from
China, the United States, or both, was lacking. The offer's final deadline and the deadline for approval by the Committee on Foreign
Investment in the United States were both Friday. The Chinese consortium now plans to acquire Opera's browser business, both for mobile
phones and desktop computers, the performance and privacy apps section of the company as well as its technology licensing business and
its stake in Chinese joint venture nHorizon, Opera said. It will not acquire Opera's advertising and marketing business, its TV operations,
nor the apps that are game-related. "Closing of the transaction is expected to take place during the second half of the third quarter of
2016," it said. The revised deal has been approved by Opera's board of directors, Opera said.
 Singapore and Sri Lanka have started talks for a free trade pact, including measures to free up trade in goods and services as
well as investments, the city-state's trade minister said on Monday. Sri Lanka's push to build infrastructure and develop its industries
presented prospects for Singapore firms to partner with companies in the Indian Ocean nation and contribute to its growth, S. Iswaran said
in a statement. "Amidst an uncertain economic environment, Sri Lanka offers good potential for Singapore companies looking to tap
opportunities in new markets," he said. The Indian Ocean island was Singapore's 39th largest trading partner last year, with two-way trade
of S$2.05 billion ($1.52 billion), Singapore's Ministry of Trade and Industry said.
 The Indonesian government on Monday started the implementation of its new tax amnesty program, more than two weeks after
parliament passed the law to boost tax revenues by repatriating funds stashed abroad. "Starting today, the tax office has started
operations to service those who want to participate in the amnesty," Finance Minister Bambang Brodjonegoro told reporters at an event in
Jakarta on Monday. The finance minister said he will hold a news conference later on Monday to announce details of the program. The
government will impose a 2-5 percent tax for assets brought back onshore by March 2017. Those assets must be kept in Indonesia for
three years in funds managed by appointed banks, and can be invested in several ways, including government bonds. Tito Sulistio, head of
Indonesia Stock Exchange, said on Monday 19 banks will be allowed to manage the funds, up from seven banks announced last week.
However, the finance minister said the banks still need to wait for an official appointment letter from the government to formalize the
mandate. Bank Negara Indonesia Tbk (BBNI.JK) might receive up to 75 trillion rupiah ($5.72 billion) of inflows from the program, Panji
Irawan, a director with the bank, told Reuters. Bank Mandiri Chief Executive Kartika Wirjoatmodjo last week told Reuters the potential
inflows into the bank from the program "could be huge". The mandated banks can manage the funds through asset management firms and
brokerage houses listed by the government, Sulistio said. Among them are Schroders Indonesia, Manulife Aset Manajemen, Eastspring
Investments Indonesia and Panin Asset Management. Some $200 billion in Indonesian money is thought to be stashed in Singapore and
wealth managers there worry an Indonesian amnesty might lead to an outflow of assets from the city-state's massive wealth management
industry. The program, however, still faces possible challenges at home. Legal activists last week filed a request for a judicial review on the
amnesty in the Constitutional Court, saying it will hurt Indonesia's anti-graft efforts and protect tax evaders. A preliminary hearing will be set
14 days after the court verifies the documents.
BAIPHIL Market Watch – 19 July 2016
Page 9 of 13
REST
OF THE
WORLD
 European shares rose on Monday, boosted by a surge in ARM after Japan's SoftBank agreed to by the chip designer at a premium of
more than 40 percent to Friday's closing price. ARM rose 45 percent to a record high of to 1,733p after SoftBank agreed to buy the British
chip designer in a 24.3 billion pound ($32.2 billion) deal. The deal will see SoftBank pay 1,700p for every ARM share, and the Japanese
firm said it would double ARM's UK staff and keep its headquarters in Cambridge. Sector peers Dialog Semiconductor, AMS and STMicro
rose 4.6 percent, 3.6 percent and 1.6 percent respectively.
 Wall Street closed slightly higher on Monday to mint new record highs for the S&P 500 and the Dow industrials, fueled by Bank of
America's better-than-expected profit and a major tech sector acquisition. SoftBank's $32-billion deal to buy British chip designer ARM
Holdings (ARMH.O) lifted U.S. chip stocks, and the technology sector led the way higher on the S&P 500. The tech-heavy Nasdaq rose
more than the S&P and the Dow. Bank of America's (BAC.N) earnings report continued the momentum for U.S. banks, kicked off by
JPMorgan (JPM.N) last week. The bank's shares rose 3.3 percent to $14.11, helping the S&P financial index .SPSY gain 0.4 percent. "The
underlying catalyst is a breakout in economic optimism," said Jim Paulsen, chief investment strategist at Wells Capital Management in
Minneapolis. "What’s really important is people are revising up their earnings numbers. You see more cyclical (sectors) taking over
leadership and less of the bond-like stocks." The Dow Jones industrial average .DJI rose 16.5 points, or 0.09 percent, to 18,533.05, for its
seventh consecutive up day. The S&P 500 .SPX gained 5.15 points, or 0.24 percent, to 2,166.89 and the Nasdaq Composite .IXIC added
26.20 points, or 0.52 percent, to 5,055.78. The year-on-year decline in earnings of S&P 500 components is now expected to slow to 4.5
percent in the second quarter, from 5 percent in the first, and more companies are expected to beat analysts' estimates, according to
Thomson Reuters data. Third-quarter earnings are then expected to turn positive, rising 1.5 percent, with fourth-quarter profit up a more
robust 9.1 percent. "There seems to be a growing consensus that this is the trough of earnings for the S&P 500," said Bucky Hellwig,
senior vice president at BB&T Wealth Management in Birmingham, Alabama. "If indeed it is, that can build some momentum on a
fundamental basis going into the third and the fourth quarter.” The S&P 500 and Dow set new records last week for the first time in more
than a year, shaking off global economic uncertainty including Britain's recent vote to leave the European Union. The SoftBank deal sent
ARM's U.S.-listed shares surging 40.5 percent, while the semiconductor index .SOX rose 1.5 percent. The materials sector .SPLRCM
gained 0.7 percent, boosted by a 2.9-percent rise in Monsanto (MON.N) shares. Monsanto is negotiating a confidentiality agreement with
Bayer AG (BAYGn.DE) after Bayer raised its takeover offer to more than $64 billion, Reuters reported. Hasbro (HAS.O) fell 6.6 percent to
$79.82 on concerns of slowing growth in the toy maker's sales targeted at boys, its biggest business. Rival Mattel ( MAT.O) dropped 1
percent. After the market closed, Netflix (NFLX.O) shares tumbled 14.5 percent. The streaming video company's subscription additions in
the second quarter fell short of analysts' expectations. International Business Machines (IBM.N) shares rose 2.5 percent after hours
following results. About 5.6 billion shares changed hands in U.S. exchanges, well below the 7.7 billion daily averag e over the past 20
sessions. NYSE advancing issues outnumbered decliners by a 1.72-to-1 ratio; on Nasdaq, a 1.25-to-1 ratio favored advancers. The S&P
500 posted 22 new 52-week highs and no new lows; the Nasdaq Composite recorded 110 new highs and 23 new lows.
 European Central Bank President Mario Draghi is likely to plead for governments to do more to boost the euro zone's economy i n
the coming week as the fallout of Britain's vote to leave the EU and weaker global growth threaten the bloc's fragile recovery.
Governments in China, Japan and Britain have already started easing their fiscal stance or hinted at plans to do so as sub-par global
growth and inflation show that central banks' ultra-easy monetary policy has run up against its limit. The ECB is not expected to change its
monetary stance on Thursday, its last meeting before an eight-week summer break. But a reiteration of Draghi's long-standing call on
governments to spend more where possible and speed up growth-boosting reforms is once again likely to fall on deaf ears. The only
country with significant fiscal firepower, Germany, is reluctant to give up its budget surplus and has resisted any attempt t o pool more
money at the European level in the absence of greater power-sharing."We fear, therefore, that Mr Draghi’s calls for a loosening of the
purse strings will go unheard, at least for now," economists at BNP Paribas said. "As things stand, then, the burden of responding to the
Brexit shock will remain with the ECB, which is all too aware that it has fewer and fewer tools with which to respond." Calls for greater fiscal
spending have been intensifying, with OECD head José Ángel Gurría and doyen investor George Soros throwing their weight behin d the
argument in recent weeks. The need for more stimulus was particularly visible in the euro zone, where unemployment is high in many
peripheral countries and resentment toward the euro project is growing. The recent slide in many governments' borrowing costs on the
bond market has been seen by some economists as providing more room for public investment. So far, however, there is little to suggest
that Europe's fiscal stance is about to get looser. In fact, European Union finance ministers agreed this week to sanction Spain and
Portugal, two countries battling to emerge from a deep financial and economic crisis, for not doing enough to correct their excessive budget
deficits last year. Thursday's ECB meeting is likely to bring tricky questions for Draghi about the effectiveness and sustainability of the
ECB's monetary policy and the state of Italian banks, struggling under the burden of bad debt. Inflation expectations and German bond
yields have slid since the British referendum on June 23, fuelling speculation that the ECB may have to extend its money-printing program
and will eventually run out of bonds to buy. The ECB is unlikely to take further action before seeing updated inflation forecasts at its Sept. 8
meeting, taking comfort from a stabilization in financial markets after an initial 'Brexit' shock. But economists expect it to announce as early
as the autumn that its 80-billion-euro asset purchase program will continue beyond its current end-date in March 2017. A change to the
technical terms of the bond purchases is also expected, to allay concerns about a scarcity of bonds to buy in some countries such as
Germany. The most palatable solution is likely to be scrapping a rule barring the ECB from buying more than 33 percent of any bond, so
long as it does not have a Collective Action Clause. Where there is a CAC, the ECB sets a limit of 25 percent, to avoid the risk of being a
block to any debt restructuring. Finally, Draghi is likely to try and assuage concerns about Italian banks, which are seen as particularly
vulnerable to any downturn due to their 360 billion euro ($400 billion) pile of soured credit. Shares in Italian banks have repeatedly come
under pressure this year on concerns about those bad loans, which the ECB is anxious to see brought down. The Italian government is in
talks with the EU to provide aid to the troubled lenders, hoping to shield savers from any loss. "(Draghi) is unlikely to be able to calm fears
to the extent he did in January this year," Societe Generale economists wrote in a note.
BAIPHIL Market Watch – 19 July 2016
Page 10 of 13
 The Bank of England rate-setter who voted last week to cut borrowing costs said he had seen early signs that Britain will need
more than just lower interest rates to counter the impact of the Brexit vote on the economy. Gertjan Vlieghe wrote in an article
published in the Financial Times that he saw an immediate need to cut rates and that this should be supplemented with a package of extra
measures next month. Vlieghe was the only member of the BoE's nine-strong Monetary Policy Committee (MPC) who voted in favor of a
rate cut at the central bank's July meeting. However, the MPC signaled that it would consider measures to boost the economy at its
August meeting which is due to conclude with a statement on Aug. 4. Many economists expect the BoE to revive its bond-buying program
as well as cut the Bank Rate below its already record low level of 0.5 percent. "The precise implications (of the referendum result) for the
economy are uncertain, although the general direction of travel is likely to be lower growth and higher inflation for a period, as a result of
weaker demand, weaker supply and a lower exchange rate," Vlieghe wrote. "Early indications from business and consumer surveys, as
well as the findings of the BoE's own agents, support that assessment." He said the BoE should "look through" the short-term increase in
inflation caused by the weaker pound. "In financial markets, inflation expectations beyond the next few years have actually fallen further
since the referendum, from already low levels," Vlieghe wrote. "I favored an immediate interest rate cut, to be supplemented by a package
of additional measures in August. What precisely that package should look like will have to be discussed over the course of t he next three
weeks."
 Greece's international lenders have approved the further easing of capital controls imposed by Athens last summer, a Bank of
Greece official said on Monday, requesting anonymity. Greece adopted capital controls to stem a flight of deposits when it almost
toppled out of the euro zone during protracted talks with its EU/IMF lenders for a new bailout deal. The controls have gradually been eased
and central bank chief Yannis Stournaras said in July they would be loosened further as confidence in the country's banking s ystem
returns. The proposed changes include no restrictions on withdrawals for new deposits and allowing withdrawals for loan repayments.
Stournaras has sent the final proposals to the European Central Bank which is expected to formally accept them, the official said.
 Rate-starved U.S. banks happily gobble mortgage business. Just as mortgage bankers were preparing for the end of a historic
boom driven by low interest rates, borrowers have begun knocking at their doors again. In earnings reports last week, JPMorgan
Chase & Co (JPM.N), Wells Fargo & Co (WFC.N) and Citigroup Inc (C.N) said they originated $94 billion worth of new mortgages during
the second quarter in their core mortgage operations, an increase of $23 billion, or 31 percent, over the first quarter. The reason for the
sudden burst of business? Mortgage rates have dropped to lows not seen since 2013 after the U.S. Federal Reserve dashed expectations
for near-term rate hikes. That has led existing borrowers to try and lock in better rates. New borrowers, meanwhile, have been enticed by
low borrowing costs and low down-payment offers. With mortgage rates near historic lows, and volumes still strong in the early days of the
third quarter, banks predict the trend will continue, providing a bright spot in a low-rate environment hammering their wider results.
JPMorgan has added more than 1,000 employees this year to handle the swell in mortgage business, said Mike Weinbach, its chief
executive of mortgage banking. He believes U.S. lenders will make about $1.8 trillion of mortgage loans this year, 40 percent more than he
had expected at the start of the year. "We thought the refinance market was going to shrink sharply," Weinbach said in an interview. "We've
seen a market that has been much bigger than expected." All this may be cold comfort to big U.S. lenders that desperately need rates to
rise for broader profits to improve. Though low rates bring in new mortgage business and deliver fees from refinancing, banks are hard
pressed to generate substantial income when rates fall too low. Adding to the pressure on margins, US banks’ cost of funding has also
risen. The difference between what banks pay for U.S. dollars and the Federal Reserve's expected policy interest rates on Fri day hit its
widest since August 2012. At some point, there is little room left between what it costs banks to obtain funds and what they can earn from
lending and investing. Rates on short- and long-term debt – known as the yield curve – have come closer together, leaving banks with
razor thin margins almost regardless of the type of funding or loans they pursue. "The headwinds from a flatter yield curve and a lower-forlonger rate environment creates challenges for all financial institutions," said John Shrewsberry, chief financial officer of Wells Fargo, which
is the No. 1 U.S. mortgage lender. Wells, JPMorgan and Citigroup each talked about low rates as the main hurdle to producing better
results. Their second-quarter profits fell 3.5 percent, 1 percent and 14 percent from a year earlier, respectively. The U.S. Federal Reserve
set its interest rate target to nearly zero as the markets and economy were spiraling into crisis in 2008. The Fed kept rates there until
December, it raised its target by 0.25 percentage points, causing optimism on Wall Street that rates would continue to rise gradually
through 2016. Those hopes have since dimmed. Concerns about market volatility and apparent weakness in the U.S. economy earlier this
year, combined with Britain's vote in June to exit the European Union have made it much less likely the Fed will raise rates further in the
near-term. "While the rate situation is challenging, there are a few silver linings in the clouds," one of them being mortgages, said KBW
analyst Fred Cannon.
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Supervisory Expectations on the ICAAP – 22 July 2016
BSP Cir. No. 889 and the Sales and Marketing Guidelines for Supervised Financial Institutions – 22 July 2016
Signature Analysis & Forgery Detection – 23 July 2016
Enterprise Risk Management – 23 July 2016
Excel Training for Bankers – 29 & 30 July 2016
BSP Cir. No. 706, AMLA Law, RA 10365 and the AML Risk Rating System – 05 August 2016
Developmental Course on Treasury Products - Basics of Financial Math – 06 August 2016
Developmental Course on Treasury Products - Basics of Fixed Income Securities – 13 August 2016
Embedding Risk Management in New Product Development & Management – 13 August 2016
EQ and Leadership for Bankers – 19 August 2016
Process Mapping as an Operational Risk Management Tools – 20 August 2016
Compliance with Operational Risk Management Guidelines – 26 August 2016
Related Party Transactions – 26 August 2016
Counterfeit Detection – 03 September 2016
Fraud Risk Management – 17 September 2016
Developmental Course on Treasury Products - Bond Duration – 17 September 2016
Developmental Course on Treasury Products - Spot, Forwards and FX Swaps – 24 September 2016
Developmental Course on Treasury Products - Interest Rate Swaps – 01 October 2016
Developmental Course on Treasury Products - Currency Swaps/Forward Rate Agreement – 08 October 2016
Developmental Course on Treasury Products - Bootstrapping – 15 October 2016
Developmental Course on Treasury Products - Financial Options – 24 October 2016
For details, please contact BAIPHIL via telephone (853-4457/519-2433) or email [email protected].
BAIPHIL Market Watch – 19 July 2016
Page 11 of 13
BAIPHIL BOARD OF DIRECTORS FY 2016-2017
With BSP Governor Amando M. Tetangco Jr
COMMITTEE CHAIRPERSONS FY 2016-2017
WELCOME YOUR BOARD OF DIRECTORS!!!
FY 2016-2017
LIZA L. ORTIZ
President
EVP, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
IRENE DL. ARROYO
First Vice President
VP, Philippine Deposit Insurance Corporation
EVANGELINE L. SALAZAR-NEVADO
Second Vice President
Executive Director, PDS Group
MARIA TERESITA R. DEAN
Secretary
SVP, China Bank Savings, Inc
MA. RODORA E. BAÑARES
Treasurer
President, Bank of Makati
MYRNA E. AMAHAN
Director
VP, Union Bank of the Philippines
BLESILDA P. ANDRES
Director
AVP, Bank of the Philippine Islands
RACQUEL B. MAÑAGO
Director
VP, Philippine Veterans Bank
HERMINIO J. MATUTE
Director
EVP, Northpoint Development Bank
ROMEL D. MENIADO
Director
FVP & Chief Compliance Officer, Robinsons Bank Corp.
ARNEL A. VALLES
Director
FVP, United Coconut Planters Bank
JULY 16-31
16
18
19
19
19
19
19
21
23
23
24
25
25
26
27
30
Aida R. Apostol - Assoc Life Member
Fernando S. Delos Reyes - Deutsche Bank
Ma. Rodora E. Bañares - Bank of Makati
Iñigo L. Regalado III- BSP
Florante M. Garcia - HSCB
Articer O. Quebal - Past President
Florentino M. Madonza - RCBC
Rowena A. Marcelang-SCB
Elizabeth C. Say - China Bank
Celia de Mesa Sotto - Assoc Life Member
Ma. Christina B. Goco - SCB
Noel A. Flores - CTBC Bank
Reynante S. Banico - Assoc Life Member
Jose Enrico T. Sandoval- Bank of Makati
Lilia M. Diokno - UCPB
Cenon M. Ladringan - Producers Bank
CONVERTIBLE BOND - A convertible bond is a bond that can be converted into a predetermined
amount of the company's equity at certain times during its life, usually at the discretion of the
bondholder.
BAIPHIL Market Watch – 19 July 2016
Page 12 of 13
WHY DO WE SAY “GOODBYE” OR “SO LONG” WHEN LEAVING SOMEONE
The word goodbye is a derivative of the early English greeting “God be with you,” or as it was said
then, “God be with ye.” Over the years its abbreviated written form and pronunciation became
“goodbye.”
As for “so long,” it came to Britain with soldiers who had spent time in Arabic-speaking countries,
where the perfect expression of goodwill is “salaam.” The unfamiliar word to the English men
sounded like, and then became, “so long.”
REFERENCE
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BPI Asset Management
Business World
Philippine Daily Inquirer
Philippine Star
GMA News
ABS-CBN News
Bulletin Today
PSE
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Reuters
Bloomberg
CNN
Wall Street Journal
Investopedia
Brainy Quotes
Goodreads
Corsinet- Trivia
COMPILED AND PREPARED BY: RESEARCH AND INFORMATION COMMITTEE FY 2016-2017
Director:
Chair:
Member:
Maria Teresita R Dean (ChinaBank Savings)
Sheryll K. San Jose (Equicom Savings Bank)
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
BAIPHIL Market Watch – 19 July 2016
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