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2 www.hello-philippines.com BUSINESS & FINANCE January 2016 – No. 01 • UK & Europe Edition
Gbilolivo’nttoaclloomcbaatteEsl NPi1ñ9o
THE imminent threat brought Philippines Inc. (DMPI) senior worse conditions expected next year.
about by the El Niño phenomenon, set manager Ramon Velez said in a text “We have successfully laid a that its intensity will surpass the last year-to-date headline inflation to 1.4
to peak during the first half of next year message to GMA News Online. destructive El Niño in 1997 to 1998,” percent.
and expected to cause drought in major solid foundation from which we will HSBC Global Research said in a
provinces, is already being addressed, “Our plants and fruits are affected execute our growth plans in the Flashnote in October. “Despite the uptick in November,
the country’s chief economist revealed. by less water,” he added. coming quarters. Barring unforeseen average inflation will likely settle
circumstances, we look forward to This might result in the country below the low-end target for the year.
In a December 17 interview, DMPL registered a net loss of a return to profitability in FY (fiscal overshooting its inflation target by This will largely be influenced by the
Socioeconomic Planning Secretary $12.0 million in the first quarter of its year) 2016, which will generate more 2016 due to a disruption in the supply slump in global petroleum prices, along
Arsenio M. Balisacan said that many fiscal year ending July, pulled down free cash flow to allow us to deleverage chain, HSBC Global said in an earlier with other favorable supply-side factors
provinces are expected to experience by the adverse effects of the El Niño. further,” Joselito D. Campos Jr., DMPL Flashnote. such as the sluggish domestic retail
drought or dry spells when El Niño Most of the company’s businesses are CEO and managing director, said in prices of corn, oil, and rice,” NEDA
peaks—according to the latest data engaged in growing, processing, and the filing. “A significant El Niño would put Deputy Director-General Rolando G.
from PAGASA—around March, April selling canned and fresh pineapples, headline CPI (consumer price index) Tungpalan earlier said.
and May. pineapple concentrate, tropical mixed Likewise, agribusiness firm well over the 2-4 percent inflation
fruit, tomato-based products, and AgriNurture Inc. also noted a drop in target by 2016, ostensibly putting the Tungpalan also urged the
Balisacan added that President other food products. production due to the drought. BSP (Bangko Sentral ng Pilipinas) in a government to urgently implement
Benigno Aquino III approved on difficult position that could force it to the Roadmap for Addressing the
December 11 a P19 billion budget to “The net loss was attributed to Del “El Niño affected yield of our hike rates sooner than expected,” the Impact of El Niño (RAIN), saying that
combat the effects of El Niño. Monte Foods Inc.’s (DMFI) first quarter contract growers,” executive chairman report read. the “government should err on the
being seasonally weakest...The El Niño Antonio L. Tiu said in a separate text high side in determining food import
“We have the money already for this weather pattern also caused reduced message. Data from the National Economic requirements in anticipation of El Niño
identified by our Budget Secretary— pineapple supply in the group’s Development Authority (NEDA) earlier to avoid food price spikes.”
part of this, roughly about P6.6 billion, plantation in the Philippines leading to The company’s banana and this month showed that inflation
is in the current budget. The rest lower exports,” the company told the pineapple production were among hastened to 1.1 percent in November According to Tungpalan, food
would be sourced from savings from stock exchange in a filing. those hit the worst, Tiu noted. due to the increase in consumer prices price rises will be very detrimental to
other programs like projects that were of both food and non-food items. This the poor, who spend over 60 percent
bidded,” Balisacan said. He did not “In response, we are employing “There is no exact figure but is an increase from the 0.4 percent in of their budget on food. n Jon Viktor D.
elaborate. agri solutions like mulching during yield of crops were really low,” he October.
plantation and drip irrigation during said. “However, we are aggressively Cabuenas / BM, GMA News / Published / December 28,
“Gravity of that, we are already growing,” Velez said. expanding contract growing in less The latest figures brought the
programming. We are already taking affected regions to mitigate risk.” 2015 / 10:20 pm
the worst assumption, worst[-case] Mulching is a procedure in which
scenario, [into account],” he said. materials are placed over the soil’s Tiu said AgriNurture has opened
surface to maintain moisture for the up production areas all over Mindanao
Companies already feeling tree or the plant, effectively lessening which are “catching up fast.”
effects. Even before El Niño’s peak, the amount of water needed. Drip
agribusiness firms have already irrigation is an irrigation system in More destruction. The El Niño—a
reported losses in production due to which water is dripped at a slow pace prolonged dry spell—is expected to
the weather phenomenon. to the roots of plants. cause much more damage to crops
than the drought in 1997 to 1998.
“We are affected by El Niño. Our DMPL noted, however, that it looks
yield has gone down,” Del Monte to recover from its losses despite the “All key meteorological agencies
state with relative certainty that El
Niño conditions have been met and
YEARENDER 2015 Peso wanes as dollar glows in Fed rate hike
WHAT is obvious about the peso- “The US central bank raised its growth starts to lose its steam,” it said.
PSEi down on exaggerated sell-offs, dollar exchange rate is that the US benchmark federal funds rate for the MetisEtrade is a financial institution
negative sentiment from China currency remained strong since the first time in more than nine years on
start of the year. Wednesday,” Agence-France Presse that provides online trading services for
PHILIPPINE stocks failed to Capital Securities Inc., said in a text reported. “The rate had been next to zero foreign exchange, precious metals, global
“The US dollar appreciated against since December 2008, and was increased indices, oil and bitcoin.
sustain its momentum on Monday, message. the peso as expected, given the diverging by a quarter point to a range of 0.25-0.50
monetary policy of the US and the rest percent. “Just by looking at the GDP (gross
opening the week on the red due “The low volumes created a lot of the world,” Josef Paolo Reyes, foreign domestic product) growth data, which
exchange trader at Development Bank of Moving forward, Reyes sees the dollar measures the overall health of economies,
to exaggerated sell-offs as well as of relativity. Times like this, trading the Philippines told GMA News Online. sustaining its momentum in 2016. the pace of local growth is seen to be
slowing down as the Philippine economy
negative sentiment from China. is very low,” he added via phone The dollar was mostly influenced “We think that the US dollar will grew an average of 5.6 percent this
by speculations of a Federal Reserve continue to strengthen as the divergence year, from 5.975 percent a year earlier,”
The main PSEi fell 18.81 points interview. interest rate increase, the first in nearly continues next year,” he said. MetisEtrade said.
a decade.
The view was mirrored by MetisEtrade Data from the Philippine Statistics
The market expected the Fed move Inc., focusing on the impact of a slowing Authority (PSA) showed that the economy
to happen as early as September, Philippine economy. grew by 6.0 percent in the third quarter
but the yield-rate increase did not of 2015.
materialize back then – instead, the lift- Economy, remittances. “The US dollar
off happened this December. appreciated against the peso by more than Considering that the last quarter
4.5 percent this year as local economic is usually a remittance season, the
performance of dollar against the peso
or 0.27 percent to 6,983.61. Tiu also pointed out the negative comes as a bit of a surprise.
Meanwhile, the All Shares index sentiment from China which noted
rose 1.50 points or 0.04 percent to a decrease in its industrial output. “Historically, the Philippine peso
3,996.16 strengthens during the holidays on the
“Sell down in China also influx of OFW money,” according to
More than 431.708 million shares contributed to the bearish MetisEtrade.
were traded at a value of P3.081 sentiment,” he said, adding this was
billion. Winners edged out losers, caused by the drop in industrial It also sees the US dollar moving on a
91 to 63, and 45 issues remained profits. strong note against most currencies.
the same.
According to Tiu, the market is In the next six month, the peso could
“Low liquidity causing sell-offs to expected to trade flat to bearish on reach 48.5:$1, company said, citing the
be exaggerated [drove the market Tuesday, the last trading day for the impact of higher interest rates in the
to close lower],” Alexander Adrian year. n Jon Viktor D. Cabuenas / KBK, GMA News US. n Jon Viktor D. Cabuenas / VS, GMA News /
O. Tiu, senior equity analyst at AB
/ Published / December 28, 2015 / 5:12 pm Published / December 24, 2015 / 4:09 pm
