BAIPHIL Market Watch – 26 February 2016

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BAIPHIL

MARKETWATCH

26 Feb

2016 Legend Improvement / Up Deterioration / Down No Movement

FINANCIAL MARKETS AT A GLANCE

PHILIPPINES

Financial Rates Current Previous

USD/PHP Closed 47.6050

30-D PDST-R1 Closed 2.6429%

91-D PDST-R1 Closed 1.4000%

180-D PDST-R1 Closed 1.5000%

1-Y PDST-R1 Closed 1.6683%

10-Y PDST-R1 Closed 3.8354%

30-D PDST-R2 Closed 2.6333%

91-D PDST-R2 Closed 1.3999%

180-D PDST-R2 Closed 1.4995%

1-Y PDST-R2 Closed 1.6683%

10-Y PDST-R2 Closed 3.8366%

Stock Index Current Previous

PSEi Closed 6,819.34

Market Cap (Php Trillion) Closed 10.833

Total Value (Php Billion) Closed 12.563

PSEi Performers Closing % Change

Top Gainers

-

-

-

Top Losers

-

-

-

ASIA-PACIFIC

Stock Index Current Previous

NIKKEI 16,140.34 15,915.79

HANG SENG 18,888.75 19,177.93

SHANGHAI 2,741.25 2,929.57

STRAITS 2,603.40 2,673.21

SET 1,333.42 1,325.79

JAKARTA 4,658.32 4,654.05

Currency Exchange Current Previous

USD/JPY 113.0700 111.9000

USD/HKD 7.7707 7.7697

USD/CNY 6.5335 6.5272

USD/SGD 1.4016 1.4072

USD/THB 35.6600 35.7500

USD/IDR 13,412.50 13,427.50

REST OF THE WORLD

Stock Index Current Previous

FTSEuro First 300 1,295.42 1,289.04

FTSE 100 6,012.81 5,962.31

DAX 9,331.48 9,416.77

CAC 40 4,248.45 4,238.42

DOW JONES 16,697.29 16,431.78

S&P 500 1,951.70 1,921.27

NASDAQ 4,582.21 4,503.58

Various Current Previous

EUR/USD 1.1019 1.1023

GBP/USD 1.3955 1.4009

Gold Spot (USD/oz) 1,232.40 1,223.60

Brent Crude(USD/bbl) 35.06 32.90

3-M US Treasury Yield 0.32% 0.32%

10-Y US Treasury Yield 1.70% 1.74%

30-Y US Treasury Yield 2.57% 2.60%

PHILIPPINES

~~The PSEi was closed yesterday due to public holiday~~

The Bangko Sentral ng Pilipinas (BSP) is bullish about the country’s economic prospects this year but is ready to step in once external shocks arising from the lift off in the US and the slowdown in China derail the growth momentum. BSP Governor Amando Tetangco Jr. said in the 3rd Business Forum organized by the Manila Times that monetary authorities have the space to act if

and when the negative impact of external and domestic developments starts to kick in. “Let me reiterate that we have the policy space to respond to uncertainties in external and domestic environment. We will therefore make adjustments to the stance of policy as conditions warrant,” Tetangco said. The BSP’s Monetary Board has kept interest rates untouched for 11 s traight policy-setting meetings since

October 2014. The overnight borrowing rate has been pegged at four percent while the overnight lending rates has been at six percent since September 2014. The special deposit account rate is still at 2.5 percent. It would be recalled the BSP raised interest rates by 50 basis points and the reserve ratio requirement for banks to 20 percent from 18 percent as a preemptive move in anticipation of the

normalization of interest rates by the US Federal Reserve. “In 2014, we moved preemptively in anticipation of a Fed liftoff. Markets have been talking about this liftoff since the Fed taper tantrum in May 2013. Because in 2014, the Fed only moved to end quantitat ive easing and not actually raise rates,” he said. Through a series of tightening measures in 2014, Tetangco said the BSP communicated to the

market then that players should begin to take stock of how they were assessing and pricing risks. “In a way the BSP was reminding banks and the general public that interest rates would not remain low forever and there is a need to rethink their business models and investment strategies,” he said. Domestic risks include the prolonged and severe El Niño weather condition as well as infrast ructure gap, while external risks include the volatilities caused by the ongoing normalization of interest rates in the US and the pace of slowdown in

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China. The BSP chief said the Philippines entered 2016 from a position of relative strength despite the slowdown in the gross domestic product (GDP) growth to 5.8 percent last year from 6.1 percent in 2014 due to weak global demand and lack of government spending.

However, he explained the country’s GDP expansion accelerated to 6.3 percent in the fourth quarter from 6.1 percent in the th ird quarter making the Philippines the fourth fastest growing Asian economy after India, China, and Vietnam. He pointed out the Philippines has booked 68 consecutive quarters of positive economic growth on the back of robust services sector as well as the resurgence of the

manufacturing sector. The strong growth was achieved amid a benign inflation environment as inflation eased to 1.4 percent last year from 4.1 percent in 2014 amid stable and low food prices. “In the BSP, we characterized this sweet spot as the positive convergence of strong growth and low inflation,” Tetangco said. He saAid the country has enough foreign exchange buffer to fend off the impact of

external shocks. According to him, the country ended 2015 with gross international reserves (GIR) – the sum of foreign exchange flowing into the Philippines – of $80.7 billion. The reserves serve as buffer to ensure the country would not run out of foreign exchange to pay for imported goods and services, or maturing obligations in case of external shocks. The GIR level can cover 10.3 months’ worth of imports

of goods and payments of services and income. He said the country’s current account (CA) and balance of payments (BOP) position are expected to remain in surplus this year. For his part, IMF resident representative Shanaka Jayanath Peiris stressed the need to address major concerns such as lack and low quality infrastructure, non-tariff barriers, low investments, and restrictions on foreign investors

resulting to low foreign direct investment (FDI) inflows.

The Philippines can be expected to fare well against external headwinds, monetary officials said, but more must be done to

attract investments in order to sustain fast growth. Though hounded by the same challenges seen in 2015 -- which saw capital flows rebalance due to China’s slowdown and with the United States hiking interest rates -- Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said the country is expected to remain resilient after having entered the new year from a “position of relative

strength.” “The Philippines is seen to sustain resilience in 2016,” said Mr. Tetangco in a speech at the Manila Times Business Forum in Manila. “In the face of all these uncertainties, the country stood strong in 2015. Now, 2016 was off to a bumpy start . While we foresee the same risk factors in 2016 as those in 2015, it would be more difficult to predict how these factors will play out 2016. Polic y makers are

being more sensitive to spillovers and spillbacks to their economies and market sentiment continues to be shifting.” Uneven global growth prospects, divergent monetary policy actions among economies and uncertainty in oil price movements have likewise stoked market volatility, Mr. Tetangco said. However, the country’s sound macroeconomic fundamentals and supportive monetary policy serve as buffers

against market shocks, the BSP official said. “In the case of the elections, as far as policy is concerned, it is business as usual because most reforms in place now have been institutionalized via laws or regulations,” Mr. Tetangco also said when asked if the central bank sees the upcoming May 9 national polls as posing risks to the economy. Shanaka Jayanath Peiris, country representative of the

International Monetary Fund (IMF), said he expects the Philipp ines to weather external shocks. “We think policy continuity is important... As long as we have a continuity of prudent macroeconomic policies, the country should be able to benefit from its demographic dividend and continue to grow fast,” the IMF official told reporters on the sidelines of the forum. In his speech, Mr. Peiris said the local economy

would draw its resilience to China’s slump from its relatively “lower exposure” via the trade channel: “At the moment, we see the spillovers as manageable.” “We think the Philippines is one with the most comfortable reserve positions in the world. It will be one of the least affected from global financial volatility,” the IMF official added, pointing to steady remittances, strong household consumpt ion, and robust

business process outsourcing growth as “cushions” to headwinds ahead. The IMF expects the local economy to grow faster at 6% this year, picking up from the 5.8% expansion seen in 2015. Mr. Peiris, however, pointed to relatively low investments as a key challenge to growth, citing “anemic” inflows of foreign direct investments. “To raise that public investment ratio, we need to also raise revenues. We

can’t improve our infrastructure only through PPP (public-private partnership) and private investment -- we also need government revenue... It’s not very popular but we need tax reform,” Mr. Peiris said, while also noting the need to open up the economy to foreign capital. The current government has resisted calls for additional tax measures from day one, preferring instead to improve administration

in order to build up its coffers. BSP’s Mr. Tetangco said the private sector can further stimulate growth by being “more active” players in project financing. Persistent infrastructure gaps and the impact of El Niño-induced drought on an already-stunted farm sector remain the biggest domestic risks to the economy, Mr. Tetangco added. For his part, World Bank lead economist Rogier van den Brink also cited the

need to tweak current tax policies and level the playing field. His recommendations include rationalizing tax incentives given to firms, reducing the number of value-added tax exemptions, centralizing real property valuations and raising oil excise taxes in the near-term, eventually moving towards trimming corporate and personal income tax rates to develop a more “equitable” system.

Foreign investment commitments approved by the country’s seven investment promotion agencies went up by 31.2 percent in

2015 to P245.2 billion, the Philippine Statistics Authority (PSA) said. This compares to total approved foreign investment pledges of

P187 billion in 2014, the PSA said in a report. In the fourth quarter of 2015, total approved foreign investments rose 45.6 percent year-on-year to P138.6 billion from P95.2 billion in the same period in 2014. These represent total foreign investments approved by the Board of Investments, Clark Development Corp., Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, Authority of the Freeport

Area of Bataan, BOI-Autonomous Region of Muslim Mindanao and Cagayan Economic Zone Authority. Most of the foreign investment pledges approved in the fourth quarter came from Japan, the Netherlands and United States. Japan’s investment pledges reached P39.4 billion, a share of 28.5 percent to total. The Netherlands committed P37 billion, a share of 26.7 percent, while the US pledged P16.5

billion, a share of 11.9 percent. The manufacturing sector received the largest share of investment commitments in the last quarter of 2015 with approved investments of P95.8 billion, making up 69.1 percent of total. The electricity, gas, steam and air-conditioning sectors received investment pledges valued at P18.1 billion. Administrative and support service activities received commitments worth P14.3

billion. In terms of location, the bulk of the approved investments would finance projects in the Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) region amounting to P52 billion, as well as projects in the Cordillera Administrative Region (Abra, Apayao, Benguet, Ifugao, Kalinga, and Mountain Province) and National Capital Region valued at P26.3 billion and P21.4 billion, respectively. The

investment commitments of foreign and Filipino nationals rose 43.7 percent in the last quarter of 2015 to P332.3 billion compared to P231.2 billion in the same period the previous year. Out of the total, Filipino enterprise owners have a share of 58.3 percent, valued at P193.7 billion. The bulk would be invested in the electricity, gas, steam and airconditioning sectors.

The ongoing El Niño phenomenon and a new round of excise tax increases could push inflation higher this month, the chief

economist of the Department of Finance (DOF) said. “Consumer prices may rise, on average, by 1.4 percent for the month of

February, slightly higher than that posted last month...,” Finance Undersecretary Gil Beltran said in an economic bulletin. Inflation, as measured by the consumer price index, hit 1.3 percent in January. The government has set a two to three-percent goal for the year. Last year, inflation averaged 1.4 percent, below the Bangko Sentral ng Pilipinas’ target. For this month, Beltran said higher food prices should

be expected due to lingering hot weather and impact of a recent typhoon that has put a dent on agriculture production last year. The DOF official said prices of food and non-alcoholic beverages are expected to rise 2.4 percent from 1.7 percent in January. “Food production is the lingering impact of El Niño (affecting sugar and coconut) and Typhoon Lando (affecting rice and vegetables) in Luzon,” Beltran said

when sought for details. According to government data, Lando was the strongest storm to hit the Philippines last year, result ing in P9.91

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billion worth of damages to infrastructure and agriculture. Lando hit the Northern section of the country, which produces the bulk of food delivered to Metro Manila and other regions. Aside from food prices, alcohol and tobacco rates could also go up as a result of a new

round of “sin” tax increases under RA 10351 enacted in 2011. The law, among others, increased excise levies on alcohol and cigarettes per year until 2016 before rising by four percent each year from 2017. “Alcohol comes from sugar. Tobacco usually rises when the new tax rate takes effect, but this is tempered by excessive releases in December to take advantage of lower tax rate,” Beltran said. Still, the

sub-index in alcohol and tobacco is seen to post average inflation of 5.4 percent this month, up from 4.7 percent in January. Despite the possible uptick in February, Beltran said inflation would remain manageable this year, allowing the BSP to keep policy rates steady at four and six percent. The central bank influences prices by managing credit demand. Lower policy rates mean banks can lend at cheaper rates

to consumers and investors alike to boost growth. “Benign inflation enable (the) BSP to maintain its monetary stance and sustain rapid economic growth,” Beltran said.

The Philippines has ratified the World Trade Organization’s Trade Facilitation Agreement (TFA), an accord seen to significantly benefit local industries given the expected reduction in trading costs globally. “The President has already approved our TFA. We’re just finalizing the paperwork for the Instrument (of Acceptance),” Trade Secretary Adrian S. Cristobal Jr. said. The submission of the

Instrument of Acceptance means that WTO member has completed its domestic process, accepts the agreement, and is prepared to start implementing the TFA. This also means all related Philippine agencies have submitted their certificates of concurrence to the Department of Foreign Affairs. Cristobal said the government would soon be ready to submit all necessary TFA documents to Geneva. As of Feb. 12

this year, 69 WTO members have already ratified the TFA. Once the TFA is ratified by at least two thirds of the WTO members, Philippine products, particularly agricultural goods, are expected to have better chances of competing globally as the agreement calls f or the removal of subsidies that give some countries unfair competitive advantage. Cristobal said there were countries that provided subsidies

for their export products. This becomes a disadvantage to developing countries that also export the same products to the same markets but whose governments could not afford to give the same kind of support. The WTO TFA, a key component of the Doha Development Agenda, aims to speed up the movement, release and clearance of goods across borders. The agreement includes provisions for

advance rulings and pre-arrival processing, the use of electronic payment and promotion of the use of a single window, provisions for customs cooperation and coordination, and reduced documents and formalities with common customs standards. Negotiations on the agreement started in 2004 and will enter into force once two-thirds of the WTO members have completed their domestic ratification

process. The TFA was said to have the potential to increase global merchandise exports by up to $1 trillion a year. Developing countri es are expected to benefit significantly from the TFA and capture more than half of the gains. Once fully implemented, trade facilitation measures are expected to have the greatest impact in terms of improvements in the area of formalities (simplification of trade documents;

streamlining of border procedures, and automation of the border process), which may translate to cost savings of 2.8 percent to 4.2 percent.

The International Finance Corp. (IFC) could hike its investments in the Philippines up to $1 billion yearly as it becomes more involved in infrastructure projects. IFC principal investment officer for PPP Asia Jesse Ang said they have been investing between $500 million to $700 million in various investment opportunities in the Philippines, most of which go to the power sector. “We can go up to

$1 billion if it involves infrastructure projects under public-private partnership (PPP) projects,” Ang said during the IFC forum on PPP in the Philippines. Ang said they remain interested in financial institutions as it has already invested million of dollars in the past five years. “We are now looking at major thrift banks which have greater exposures to the small and medium enterprises (SME) sector,” he added. In a

separate press briefing, IFC director for East Asia Pacific Vivek Pathak expressed dissatisfaction over the extent of their investments in Philippine projects. “We are far below in Philippine investing,” Pathak said. The IFC director urged the next government to institutionalize the PPP Center and set policies that would encourage more investments in the Philippines. “New government should build on the gains

already achieved, although it is still faced with many challenges,” he told reporters. Pathak described the Philippines as a model on how to use PPPs to leverage the extensive expertise and resources of the private sector to meet the country’s growing infrastructure needs. “Philippines has been a leader in PPPs in Asia due to its high level of private sector participation and very effective tapping of

private funding for infrastructure,” he pointed out. The IFC director said institutionalizing the country’s PPP Center as a permanent institution, along with ensuring fairness and transparency in PPP projects - from planning, procurement, and award to implementation - would provide significant long-term benefits for the government, private sector partners, and the public. “Fairness and transparency

attracts more private sector firms to participate in PPP projects”, said Pathak. “More participation leads to competition and helps achieve better bids and more equitable terms for the government and the public.” IFC acted as transaction adviser on two PPP projects awarded under the Aquino administration. The NAIA Expressway (Phase II) project for the Department of Public Works and Highways is nearing

completion, while the concessionaire of the LRT 1 Cavite Extension and Operations and Maintenance (O&M) project signed a P24 billion ($505-million) loan agreement early this month. PPP projects require a significant amount of long-term funding and the domestic banks and investors alone won’t be able to solely finance all the projects in a sustainable way. “Multilateral institutions such as IFC can play a

key role in bridging the gap, sharing the risk with domestic financiers, and mobilizing funding from international financers,” Pathak said.

Dutch financial giant ING Bank expects the economy to grow above six percent in the first half due to election-related spending and the projected modest impact of El Niño weather disturbance. Joey Cuyegkeng, senior economist at ING Bank Manila, said GDP

growth is expected to grow 6.5 percent in the first quarter and 6.4 percent for the first half as the impact of El Niño is reported to be more modest than the 1997-1998 episode. “The growth target for now seems to remain a tall order although we expect the first half 2016 growth to average at 6.4 percent. The more modest impact could lead to some upside surprise to growth in the first half,” Cuyegkeng said.

The Cabinet-level Development Budget Coordination Committee (DBCC) slashed the country’s GDP growth target to 6.8 to 7.8 percent instead of seven to eight percent this year. This after the country’s GDP expansion slowed down to 5.8 percent last year from 6.1 percent in 2014 due to anemic global demand and weak government spending. The economy is expected to slow down to a range of 6.6 to 7.6

percent in 2017 before recovering to a range of seven to eight percent in 2018. The expansion is seen slowing again to a range of 6.9 to 7.9 percent in 2019. For this year, the DBCC slashed its exports growth target to five percent instead of six percent, while that of imports were reduced to 10 percent from 12 percent. The DBCC also revised its foreign exchange assumption to 44 to 48 to the doll ar instead of

the previous range of 43 to 46 per $1. Cuyegkeng said the Philippines has only carved out $500 million of the total issue size of $2 billion of new Republic of the Philippine bonds since the government still has adequate cash to finance an accelerated spending performance in the first half. “The accelerated first half spending performance would offset the weakness in agriculture due to the effects of El Niño while

election spending would likely bolster first quarter GDP growth to around 6.5 percent from a relatively weak first quarter 2015 growth of 5.2 percent,” he added. ING Bank sees inflation trending higher toward the lower end of the two to four percent target set by the Bangko Sentral ng Pilipinas (BSP) this year. Inflation eased to 1.4 percent last year from 4.1 percent in 2014 due to stable and low food prices.

“We expect inflation to remain below three percent by year end,” he said. Cuyegkeng said monetary authorities are likely to r aise interest rates by 25 basis points (bps) in the second half of the year. “We expect a modest 25 bps BSP rate hike in the second half as a way to stabilize market’s inflation expectations as inflation moves above three percent in 2017,” he added.

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The Aquino administration is done borrowing abroad for budgetary purposes this year after last week’s $2-billion global bond issue, the country’s finance chief said. “We’re always on the lookout for liability management opportunities, but in terms of new money, that’s our program for the year,” Finance Secretary Cesar Purisima told Bloomberg. The government raised $2 billion from global bonds

last week, including $500 million in cash which went directly to government coffers to help finance programs and projects. The remaining $1.5 billion would be used to retire old expensive debts. As far as the budget is concerned, Purisima said foreign borrowings only account for “about 15 percent” of planned financing this year, and that had already been covered. “That’s part of our program to reduce the mix of

our borrowings... It also reduces the vulnerability of the country to external shocks,” Purisima said. Under its borrowing program, the government has earmarked P104.575 billion for gross foreign borrowings to pay for existing liabilities. The amount is equivalent to around $2 billion using the foreign exchange assumption of P43-P46 to a dollar. Budget Secretary Florencio Abad said the next administration

would still have the power to raise foreign funding should it decide to. “But why incur obligations if it’s not requi red by the budget?” Abad said in a text message yesterday. “The only scenario I can foresee (necessitating additional foreign borrowings) is if the new administration does not collect projected revenues and it wants to spend according to program,” he said. Nicholas Antonio Mapa, economist and research officer at Bank of the Philippine Islands, shares the similar view as Abad. “They can still have bond swaps,

meaning they will borrow new cheaper debts to exchange for older debts so not necessarily done for the year (for foreign borrowings),” Mapa said over the phone. “However, I think any budgetary requirements of the next administration can be sourced locally. We have a lot of liquidity domestically,” he added. Purisima said it is important for the new government to follow through President Aquino’s tack on

budget discipline that helped foster strong economic performance. “They will have to continue along the path of President Aquino’s program: fiscal health and macroeconomic stability and most importantly, increased investments in infrastructure,” he said. “Make sure that we continue to improve our connections to the global supply chains as well as tourism sector,” he added.

State-run National Electrification Administration (NEA) has switched on another set of solar panels at its head office to generate

savings and promote the use of clean energy technologies to electric cooperatives (ECs.) The agency has installed a 22-kilowatt

peak (kwp) solar photovoltaic (PV) facility on its rooftop to cover part of its power requirements. NEA administrator Edita S. Bueno said the newly-installed solar PV system is envisioned to be a showcase initiative for ECs wishing to do green venture projects in the near future. “We are expecting roughly P300,000 annual savings from this project, and we hope the ECs would soon pick up momentum to

adopt clean energy technologies and contribute to our efforts to mitigate the effects of climate change,” she said. The 22-kwp solar panel installation of the NEA is in addition to its 5-kwp solar facility which was inaugurated last Dec. 2. For this project, NEA partnered with Adon Renewables Philippines Inc. which has agreed to a 15-year cooperation period, after which the units will be owned by the NEA under a

build-operate-transfer scheme.

Two of the country’s biggest e-commerce platforms are unfazed by the upcoming release of the Bureau of Internal Revenue’s

(BIR) tax rules for online firms, emphasizing they are fully compliant with tax duties. In separate statements, officials of Lazada Philippines and Zalora Philippines said they are anticipating the release of the government’s regulations covering the “digital economy.” On Feb. 18, BIR Commissioner Kim S. Jacinto-Henares told reporters that the agency will be coming out with an order that will spell out

the tax liabilities of online-based businesses, which will cover “whoever uses the digital platform to sell, to provide service, and receive payments.” She explained that the companies are expected to remit “all taxes” applicable to their transactions, as captured by existing provisions under the country’s Tax Code. The sellers are expected to pay a 12% value-added tax (VAT) for the transactions, personal

income taxes, and percentage taxes for any sales made, the same duties levied on offline entrepreneurs under the National Internal Revenue Code of 1997, according to Ms. Jacinto-Henares. Under the law, persons selling items and services who make less than P1.92 million a year must remit to the government 3% of what they earn monthly. Those who make more than P1.92 million, meanwhile, must

subject their sales to VAT. Two of the biggest online selling platforms, however, said they look forward to the issuance of the BIR’s rules to streamline and level the playing field among players in the digital economy. “We welcome the news that the BIR will be helping to bring more professionalism to the e-commerce and digital industries in the country with the issuance of new guidelines,” Paulo L. Campos III,

co-founder and chief executive officer of Zalora Philippines, said in an e-mail interview. “Zalora has always been fully compliant with all its tax obligations and we will continue to be a positive example to all those in the industry by strictly complying with any new issuances that the BIR will be promulgating in the coming weeks.” Many individual sellers also conduct business through social media platforms like

Facebook and Instagram, with payments made via fund transfers and bank deposits. For its part, officials from the local arm of Lazada said they are currently compliant with the duties sought. “As a locally-registered business, our business transactions are subjected to taxes, and we are fully compliant with the relevant local tax laws,” Lazada Philippines said separately when sought for comments on the

matter. “At this time, we have yet to receive any details of the tax order from the Bureau of Internal Revenue. We are monitoring the upcoming issuance from the BIR and will comply accordingly.” Lazada serves as a platform for online shopping for gadgets, home appliances, furniture, and apparel while Zalora focuses on fashion items. BusinessWorld tapped other online marketplaces for comment

but did not receive responses as of press time. In October last year, the BIR came out with Revenue Memorandum Circular 70-2015 which defined the set of taxes due from mobile app-based ride platforms like Uber and Grab. The regulation reminds the liabilities of operators and car owners of a 3% common carriers tax, while drivers are to pay income tax. Ms. Jacinto-Henares said that these

regulations will simply serve as a “reminder” for online shops of their tax duties as under the law. The Finance department has set a P2.025-trillion collection target for the agency for 2016, a goal deemed “unrealistic” by Ms. Jacinto-Henares.

The leasing and financing arm of the Sy-led BDO Leasing and Finance Inc. continued to post a double digit growth in earnings on the back of heightened marketing efforts and extensive market reach. The unit of BDO Unibank Inc. – the country’s largest bank in terms of assets – registered a 10 percent increase in net income to P556 million last year from P504 million in 2014. The company

reported a 15 percent jump in gross revenues to P2.6 billion last year from P2.27 billion in 2014. BDO Leasing and Finance cited the 16 percent increase in net lease and loan portfolio to P27 billion after it strengthened its marketing efforts and leveraged on its parent company’s extensive market reach. The Sy-led company vowed to intensify its provincial thrust and tap opportunities in growth areas. It

formed a joint venture company with MMPC, Sojitz Corp. (SJC), and JACCS Co. Ltd. (JACCS) to provide financing services to individual and corporate buyers of Mitsubishi vehicles. The Sy-led bank is seen harnessing the complementary strengths of the joint venture partners to take advantage of the sustained growth in vehicle sales on the back of increasing consumer affluence and a growing

population.

The Metrobank group’s thrift bank arm Philippine Savings Bank chalked up a net profit of P2.35 billion in 2015, flat compared to

the previous year. This translated to a return-on-average equity of 12.7 percent, supported by the growth of core businesses, PSBank disclosed to the Philippine Stock Exchange on Wednesday. Last year’s net profit was stable compared to the P2.32 billion bottomline in the previous year. PSBank president Vicente Cuna Jr. said: “2015 proved to be a challenging year for the bank, but we continued to gain

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momentum in our core businesses as our net interest margins and fees from our consumer loans demonstrated double-digit growth.” “Our strategy is aimed at expanding our customer base by providing clients the best customer experience at every encounter, at every channel.

This strategy has brought us to where we are today and I am confident that the same strategy will solidify our growth in the com ing years,” he added. The bank’s total loan portfolio rose by around 17 percent to end the year at P116 billion, propelled by the growth of its auto and mortgage lending businesses, which posted a combined annual increase of 24 percent. On the funding side, deposits expanded by 15

percent to P134 billion, with low-cost funds climbing by 23 percent. The bank said its deposit-taking initiatives focused on new customer acquisition and active cross-selling, citing its commitment to provide customers with products that cater to their banking needs. On asset quality, the bank’s non-performing loans were kept at 1.2 percent of total loan portfolio as of end-2015. PSBank’s capital adequacy ratio, a

measure of a bank’s financial strength and resilience to risk assets, stood at 18 percent or well-above the Bangko Sentral ng Pilipinas’ 10 percent minimum requirement. Its core or tier 1 capital adequacy ratio was at 12.4 percent of risk assets.

Homegrown Jollibee Foods Corp., now the largest food service enterprise in Asia, is taking full control of a food manufacturing facility in mainland China that services Yonghe King, its flagship business in that market. In a disclosure to the Philippine Stock Exchange on Wednesday, Jollibee reported that a wholly owned subsidiary had agreed to buy 30 percent of Happy Bee Foods

Processing Pte. Ltd. for around $10.4 million, thus raising its interest to 100 percent. The seller, Hua Xia Harvest Holdings Pte. Ltd., will be paid in the form of assets related to the production of food products intended for institutions outside of Jollibee brands in China. JFC will not have any net cash outlay for the acquisition of the 30 percent share, the disclosure said. “The objectives of the acquisition of the

30 percent ownership of Happy Bee, essentially an equity share and asset swap, are for JFC to concentrate on supporting the growth of its Yonghe King business and on further improving its food quality and increasing assurance on food safety,” the company said. The group’s unit Jollibee Worldwide Pte. Ltd. will own 100 percent of Happy Bee, which in turn owns 100 percent of Happy Bee Foods

Processing (Anhui) Co. Ltd. which operates a manufacturing facility in Anhui, China that currently services the requirements of the Yonghe King business as well as produces and sells food products for business institutions other than Jollibee’s brands. The transfer of shares and assets will still be subject to appropriate governmental and regulatory approvals which are expected to be completed within

2016. Yonghe King, is one of the most well-known non-Western restaurant in mainland, based on earlier brand power surveys. This is Jollibee’s largest business in China, comprising of 321 stores and contributing 10 percent of system-wide sales worldwide. “Yonghe King plans to accelerate its store network growth in 2016 and in the years ahead,” the company said.

Pangilinan-led Philex Mining Corp. managed to post a 10 percent increase in its net income last year to P776 million despite low

metal prices in the world market. The company attributed the growth in earnings to the strict implementation of cost reduction programs

and tight expense management which resulted to a 13 percent decrease in cost and expenses to P7.3 billion. Philex president and chief executive officer Eulalio Austin Jr. said while the recent improvement in gold prices is a welcome development, the overall g lobal economic environment remains volatile and would continue to put pressure on metal prices and the company’s revenue generation. “We

shall continue to explore ways to contain our costs and expenses without sacrificing output and efficiency. Innovation on how we do things will always be our topmost priority,” he said. Revenues of the company’s metal business went down 13 percent to P8.4 billion while revenues from gold dipped 3.4 percent to P5.7 billion. Copper revenues reached P3.5 billion, 24 percent lower than the P4.6 billion

recorded in 2014 while revenues from silver amounted to P69.7 million from P78.1 million. The Padcal mine milled 9.2 million tons of ore, translating to 107,887 ounces of gold produced as recovery improved to 83.2 percent amid steady ore grades at 0.44 grams/ton. Meanwhile, copper output reached 34.1 million pounds as the higher recovery rate of 82.1 percent failed to offset the impact of lower ore

grades at 0.21 percent. “We continue to improve on our metal recovery rates as we implement a more strategic approach in sourcing ore from newly developed points, coupled with operational enhancements, judicious maintenance and equipment upgrades,” Austin said. Furthermore, the energy and hydrocarbon business saw lower output from Galoc Phase II project. The continued weakness in average

crude oil prices resulted to a 45 percent drop in revenues to P172.3 million. The company also retired $25.8 million of its outstanding debt last year, which brought total debt to $70.5 million as of the end of 2015. An additional $3 million was paid out this month, further bringing down total debt to $67.5 million.

ASIA-PACIFIC

Japanese stocks rose in choppy trade on Thursday after the yen resumed its weakening trend against the U.S. dollar, lifting exporters'

share prices and broader market sentiment. The Nikkei share average gained 1.4 percent to 16,140.34. Japan's benchmark index rose on

an overnight bounce in oil prices during its morning session, then added to those gains in the afternoon as the yen moved away from its recent highs. Sharp Corp shares ended 14.4 percent lower after the struggling electronics firm agreed to a takeover by Taiwan's Foxconn. The takeover news first sent its share prices up 5.8 percent before details emerged indicating the possibility of a larger-than-expected

dilution of its stock. The deal represents the largest acquisition of a Japanese tech firm by a foreign company and one that will bolster Foxconn's position as Apple Inc's largest supplier. The broader Topix rose 1.8 percent to end the day at 1,307.54 with each of its 33 subindexes in positive territory. The JPX-Nikkei Index 400 climbed 1.9 percent to 11,841.88.

China stocks tumbled more than 6 percent on Thursday, their biggest one-day loss in a month, as investors booked profits after the

market's recent rebound and awaited policy cues from global leaders gathering in Shanghai for a G20 meeting. Traders and analysts cited

a confluence of reasons for the slide in addition to profit-taking. These include fears of tighter liquidity in the financial system, worries about the cooling economy and anxiety over looming liberalization of initial public offerings (IPOs), which some investors fear could result in a cash crunch. The benchmark Shanghai Composite Index .SSEC dropped 6.4 percent to 2,741.25, its biggest one-day loss since Jan

26. The blue-chip CSI300 index .CSI300 slumped 6.1 percent to 2,918.75 points. The bearish sentiment spilt over into Hong Kong, where

the benchmark Hang Seng index .HSI dropped 1.6 percent and the Hong Kong China Enterprises Index .HSCE was off 2.4 percent. China's

stock markets have lost nearly half of their value since early June last year and have struggled to recover despite a massive and

unprecedented rescue effort by the government and regulators. The plunge, along with China's surprise devaluation of the yuan currency

BAIPHIL Market Watch – 26 February 2016

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in August, roiled global financial markets and added to fears of a hard landing for the world's second-largest economy. But more recently, mainland stocks have rebounded roughly 10 percent from 14-month lows hit in late January, fueled by a global market recovery, central

bank efforts to stabilize the yuan and hopes that Beijing will unveil more stimulus. The rebound follows a typically bullish pattern ahead of an annual meeting of China's top legislature, which starts on March 5, but traders say the thematic rebound could come to an end. "Market confidence is still fragile and economic prospects remain gloomy, so investors could be taking profit earlier than in previous

years," said Wu Kan, head of equities trading at Shanghai-based investment firm Shanshan Finance.

Most Southeast Asian stock markets fell on Thursday as a plunge in Chinese stocks and weak global oil market spurred late selling,

but the Thai benchmark eked out modest gains, helped by selective buying in dividend-yielding stocks. The key SET index inched up 0.11 percent. It fell in early trading after data showed the country's exports contracted more than expected in January in the face of sluggish global demand and China's slowdown. Among winners, Bangkok Bank posted its eighth straight session of gains with a 1.5 percent jump,

partly reflecting an attractive dividend yield. The Jakarta composite index ended flat after the central bank said it had room to cu t its benchmark policy rate further. Stocks in Singapore, Malaysia and Vietnam all finished the day lower in line with Asia, with a fall in global oil prices keeping investors in the region edgy. Fund flows in the region were mixed amid expectations of a possible delay in interest rate

hikes in the United States due to weak U.S. economic data. Malaysia and Thailand saw net foreign buying worth 120 million ringgit ($28.46 million) and 115 million baht ($3.22 million), respectively, while and 115 million baht ($3.22 million), respectively, while Indonesia witnessed a net foreign selling of 23.8 billion rupiah ($1.78 million), stock exchange and Thomson Reuters data showed.

Japan will likely refrain from loading oil at Iranian ports in March because of the impending expiry at the end of next month of

special shipping insurance cover provided by the government, industry and government officials said. The potential restriction

from one of Tehran's biggest oil customers highlights Iran's difficulties in boosting exports after U.S. sanctions were lifted in January. The problem stems from confusion about whether U.S. companies can offer insurance coverage for tankers with Iranian crude. The U.S. removed the sanctions after confirming a deal on Iran's disputed nuclear programme, including prohibitions on non-American companies

selling insurance to and trading with Iranian entities. But the Treasury Department left in place other sanctions limiting the amount of reinsurance U.S. companies can provide for Iranian ships, a crucial element in providing tanker cover. The insurance ban was the most effective way of limiting Iranian oil exports, which were more than 3 million barrels per day (bpd) in 2011, but fell to a little more than 1

million bpd after the sanctions were imposed in 2012. Japan has kept the oil trade with Iran going through a special government insurance programme that gives about $8 billion in coverage and the government plans to renew it with a parliamentary vote, a government source said. But, given the lack of a timetable on the vote, shippers are erring on the side of caution and will likely hold back fr om any loadings

next month, the government source and industry sources, who requested anonymity, said. International insurers are trying to put together limited coverage to complement the lack of U.S. cover, but it is uncertain whether the Washington will approve the plans, of ficials at Japan's main insurer, the Japan P&I Club, said. European nations have resumed loading Iranian oil despite the international P&I club only

providing coverage for about 85 percent of the roughly $8 billion per ship normal liability coverage, but Japanese shippers are still holding back, said the officials. Japan is set to load 202,000 barrels per day (bpd) of Iranian crude in February, down 8 percent from a nine-month high in January, said an industry source familiar with the matter. Japan's Iranian crude imports last year halved from 2011 levels to about

156,000 bpd amid the sanctions.

China's desire to upgrade its slowing economy through foreign acquisitions could put it on a collision course with Japanese

companies, which are also aggressively shopping abroad to escape stagnation at home. ChemChina's $43 billion purchase of Switzerland's GMO-seed maker Syngenta, set to revolutionize food technology in China, has pushed China's outbound dealmaking spree to $65 billion this year, a record for so early in the year. Japanese firms have so far in 2016 announced $3.5 billion of transactions,

including Asahi Group Holdings' bid for the Peroni and Grolsch beer brands. With Japanese companies collectively hoarding an estimated $3 trillion in cash, according to Sanford C. Bernstein estimates, outbound M&A is expected to accelerate. Buyers from the two nations have already clashed over an Italian train company last year, and sources say they could soon be among the pack chasing a Thai bank.

Chinese buyers are normally state-linked, and their aims often involve Beijing's industrial policy objectives, so profitability is not always the top priority, while Japanese buying is led by private companies looking to expand abroad to offset deflation, flat growth and a shrinking population at home. The Japanese buyers usually go for assets in their own sector, and relative to the Chinese are more constrained by

shareholders in what they are prepared to pay. While China was focusing on seizing energy and food resources, the two rarely clashed. But as China targets more advanced technology and brands to shift the economy away from low-end manufacturing, the companies from the world's second and third-largest economies are more likely to clash, especially in high-value manufacturing segments such as high-

speed railways. "As the pace of economic growth slows, more Chinese companies are set to look outside. That could lead to Chinese and Japanese companies competing for similar assets," said Keith Pogson, EY senior partner for Financial Services, Asia-Pacific.

China is "changing the operational landscape" in the South China Sea by deploying missiles and radar as part of an effort to militarily dominate East Asia, a senior U.S. military official said. China is "clearly militarizing the South China (Sea)," said Admiral Harry Harris, head of the U.S. Pacific Command, adding: "You'd have to believe in a flat Earth to think otherwise." Harris said he believed

China's deployment of surface-to-air missiles on Woody Island in the South China Sea's Paracel chain, new radars on Cuarteron Reef in the Spratlys and its building of airstrips were "actions that are changing in my opinion the operational landscape in the South China Sea." Soon after he spoke, U.S. government sources confirmed that China recently deployed fighter jets to Woody Island. It was not the first

time Beijing sent jets there but it raised new questions about its intentions. U.S. Navy Captain Darryn James, spokesman for U.S. Pacific Command, said China's repeated deployment of advanced fighter aircraft to Woody Island continued a disturbing trend. "These destabilizing actions are inconsistent with the commitment by China and all claimants to exercise restraint from actions that could escalate

disputes," he said. "That's why we've called for all claimants to stop land reclamation, stop construction and stop militarization in the South China Sea.” But U.S. and Chinese foreign ministers signaled that despite disagreements over the South China Sea, they were near agreement on a U.N. resolution against North Korea for its recent nuclear and missile tests and stressed their cooperation on economic

and other issues.

Singapore’s economy grew more than initially estimated last quarter as a gain in services outweighed weaker manufacturing

and exports. Gross domestic product rose an annualized 6.2 percent in the three months through December from the previous quarter, when it expanded a revised 2.3 percent, the trade ministry said in a statement Wednesday. That compares with a January estimate of a 5.7 percent gain and the median forecast of 4.5 percent in a Bloomberg News survey of 11 economists. Services have been a support for

Singapore’s economy as slowing growth in China, one of its largest export destinations, has hurt demand for its goods. The city-state, among Asia’s most vulnerable to swings in global demand, saw non-oil domestic exports slide the most in almost three years in January as shipments to China slumped. “Services will be a key growth pillar for 2016, given Singapore’s vulnerability to the global trade

recession ,” Weiwen Ng, an economist at Australia & New Zealand Banking Group Ltd. in Singapore, said before the report. "But with

BAIPHIL Market Watch – 26 February 2016

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manufacturing in the doldrums, it’s hard to see services continue to outperform. Low growth of around 1 percent to 2 percent will be the new normal for Singapore in the years ahead.” The Singapore dollar erased declines after the data, trading l ittle changed at S$1.4072

against the U.S. currency as of 8:23 a.m. local time and reversing a drop of as much as 0.1 percent earlier.

Malaysian farmers of the famously pungent durian fruit are calling for tighter regulations on mining they say is destroying

arable land and tainting the water they need to churn out their yellow, spiky-shelled crop. Farmers in major growing state Pahang plan to spend nearly two weeks marching over 250 kilometers to parliament in Kuala Lumpur to protest the impact of bauxite mining on output of the food, sometimes described as Southeast Asia's 'King of Fruits'. Parts of Pahang have been transformed over the last few

years by a mining boom to feed China's appetite for bauxite, a key ingredient of aluminium. There has been a public outcry over environmental damage, however, with mining blamed for polluting land and turning waters red near the state capital Kuantan. That has piled pressure on the government, prompting it to impose a three-month ban on bauxite mining in early January, but durian growers such

as Che Long Che Ali fear what will happen when the moratorium is lifted on April 15. "We will march to submit a memorandum to parliament ... I'm doing this for myself and all future generations to fight for our environment," he said, adding that farmers wanted tougher regulations on bauxite mining or even a permanent ban. "My durian trees didn't fruit last year. Our rivers and the air we breathe are

polluted. People have fallen sick," Che Long said, with the march expected to begin around the middle of next month. Bauxite miners contacted by Reuters declined to comment on the issue. After Thailand, Malaysia is the world's No.2 producer of durian, banned in many hotels and airports due to the sulphurous smell of its sticky flesh - although many consider that scent part of the eating pleasure. China is

its key market for frozen durian and related products. Malaysia's durian industry is not huge - government figures show 2014 frozen shipments to China were worth just over $1.2 million - but the crop is a source of national pride. Koh Yen Boon, a durian seller in Kuantan, said his sales volume dropped by about 30 percent last year due to lower output, driven by environmental damage and as more land was

given over to mining. "There was less produce to sell ... The remaining trees were covered in red and brown dust," he said. Farmers blame ore dust for disrupting pollination, while environmentalists note that the habitat of birds, bees and bats - natural pollinators of the durian flower - are destroyed when land is cleared for mining. The Malaysian Nature Society also said that land used for mining would

likely become infertile due to heavy-metal contamination, meaning rehabilitation for agriculture would be long and expensive. Bauxite mining in Kuantan boomed over the last two years as China shifted its sourcing of the material to Malaysia after former top supp lier Indonesia banned exports. Despite calls from residents and environmentalists to bring mining in Kuantan to a complete halt, mining

industry officials expect activity to resume after the three-month ban. "We expect to recommence mining, and we hope for adequate regulations to be in place to suppress any further impediment to the environment, especially from illegal mining," said K eith Vaz, Malaysian Mining Club president.

South Korea's anti-trust regulator fined Japan's Denso and Mitsubishi Electric a combined 1.14 billion won ($924,229.40) on

charges of colluding to fix the prices of engine starter motors supplied to General Motors. This is the seventh price-fixing case

involving global auto component makers probed by South Korea and comes amid a worldwide crackdown on car part cartels. In 2008, Denso and Mitsubishi Electric colluded on bid prices for the engine starter motors used in GM's Spark, Cruze and Orlando vehicles made in South Korea, the Fair Trade Commission said in a statement. Denso was fined 510 million won and Mitsubishi Electric 630 mi llion won.

Denso said it won't have to pay the fine because it has applied for a leniency program which enables a company to escape sanctions if on its own it reports the illegal conduct. An official at Mitsubishi Electric was not immediately available for comment. ($1 = 1 ,233.4600 won)

REST OF THE WORLD

European shares rebounded on Thursday from losses earlier in the week, as solid corporate results including from British bank Lloyds

lifted stock markets. The pan-European FTSEurofirst 300 index, which had fallen around 4 percent in the previous two sessions, rose 2 percent by 1522 GMT. The FTSEurofirst remains down by around 10 percent since the start of 2016, dragged by concerns about a slowing global economy and the health of Europe's banking sector. Markets were looking ahead to this weekend's G20 meeting of world

financial leaders in Shanghai but some investors were sceptical it could provide a big boost to sentiment. "We're getting closer to the G20 meeting but the market doesn't look to be expecting much out of it," said Alessandro Balsotti, Senior Portfolio Manager at JCI Capital in London. Lloyds surged 12 percent after announcing a special dividend payment and higher profits, while shares in the rig company

Seadrill advanced 6.7 percent as investors welcomed a refinancing plan. AXA also progressed 1.5 percent after posting higher profits, and gains in top banking and insurance stocks added the most points to European stock markets. Phone group Deutsche Telekom r ose more than 3 percent after better than expected fourth-quarter results in its domestic German market, helped by expansion of its super-fast

broadband network. German builder Hochtief rose 10 percent after its full-year operational net profit rose more than expected, as its European division for the first time in many years achieved a clear break-even result. "Today it was one of the busiest days for corporate earnings in Europe and the market has been strongly rewarding companies that have beaten consensus," said Stephane Ekolo, Chief

European Strategist at Market Securities. Zodiac Aerospace slumped 23 percent after announcing a profit warning.

Wall Street posted solid gains on Thursday as higher oil prices reduced fears that banks could be hit by debt defaults and investors saw opportunities after weeks of volatility. The second uptick in two days for stocks was helped by a 3-percent jump in oil, which has been a

major influence on markets this year as investors view weak energy demand as a sign of sluggish global growth. The S&P 500 .SPX has

recovered 6 percent in the past nine sessions but remains down almost 5 percent in 2016 as oil hovers near decade lows. For the first

time this year, the S&P 500 exceeded its 50-day moving average, a move that some investors believe is a sign of improving sentiment. "I have a lot of people calling me and saying 'Hey, I've got $50,000 in the bank earning zero percent. Is it time to put it to work?'," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa. "People are saying 'Let's take a nibble right here.'" All of the 10

major S&P sectors were higher, led by the financial sector .SPSY, up 1.38 percent. The financial sector has fallen 12 percent this year, easily the worst performer on the S&P, as fears loom about a wave of defaults from energy companies. Also helping sentiment, orders for U.S. durable goods rose more than expected in January as demand picked up across the board, offering a ray of hope for the

BAIPHIL Market Watch – 26 February 2016

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downtrodden manufacturing sector. The Dow Jones industrial average .DJI jumped 1.29 percent to end at 16,697.29 points and the S&P

500 .SPX rallied 1.13 percent to 1,951.7, its highest close since early January. The Nasdaq Composite .IXIC added 0.87 percent to

4,582.21. Shares of Salesforce.com Inc (CRM.N) surged 11.03 percent. The online customer management software maker reported

higher-than-expected revenue and raised its full-year forecast. The stock gave the biggest boost to the S&P 500.

London Stock Exchange Group Plc said it was in merger talks with Deutsche Boerse AG, a deal that would create the dominant European exchange operator. Just three days after British Prime Minister David Cameron set a date for a referendum on leaving the European Union, the London and Frankfurt-based market operators confirmed the discussions to create a business worth more than 20

billion pounds ($28 billion). Shares in both companies soared. A combination of LSE and Deutsche Boerse reflects the inexorable consolidation that has created a handful of titans overseeing much of the plumbing for global trading. The Anglo-German tie-up would have leading positions in equities , derivatives, indexes and clearing, leaving it in competition with just a handful of market operators in the

U.S. and Asia. “It’s very, very important in the context of the connectivity between the Americas, China as we’ve heard, and Europe, and of course London” that one of these global companies is based in the U.K., LSE Chief Executive O fficer Xavier Rolet said in a Bloomberg Television interview in March. Should regulators approve the all-share merger, LSE Group equity holders would own 45.6 percent of the

enlarged group, while Deutsche Boerse stockholders would get 54.4 percent.

Germany’s 19.4 billion-euro ($21.4 billion) budget surplus last year was the highest since reunification in 1990 in absolute terms, according to data from the Federal Statistics Office. Finance Minister Wolfgang Schaeuble’s debt-cutting defends an election pledge

from Chancellor Angela Merkel to balance the budget and provides a timely cushion as spending to cope with the influx of refugees increases. The arrivals will increase public spending in Europe’s largest economy by 25 billion euros to 55 billion euros a year, according to December calculations by the Kiel Institute for the World Economy.

It is still unclear whether the recent downturn in global financial markets will have any substantial impact on the U.S. economy, Federal Reserve Vice Chairman Stanley Fischer said, suggesting the episode may still pass without much effect on the Fed's plans. "If the recent financial market developments lead to a sustained tightening of financial conditions, they could signal a slowing in the global

economy that could affect growth and inflation in the United States," Fischer said at an energy industry gathering in Houston. "But we have seen similar periods of volatility in recent years ... that have left little visible imprint on the economy, and it is still early to judge the ramifications."

JPMorgan Chase & Co.’s investment bank said revenue from sales and trading has tumbled about 20 percent this year,

providing an early gauge of the pain inflicted on Wall Street’s biggest firms by the global market rout battering investors. The

drop from a year earlier also was exacerbated by the Swiss franc’s surge in January 2015, which boosted revenue at the time, the division’s chief, Daniel Pinto, said Tuesday at the bank’s annual investor conference in New York. This quarter, lower earnings from debt and equity capital markets underwriting may contribute to a 25 percent decline in the division’s fee revenue, he said. In a f iling, the bank

said its securities services unit for institutional investors will probably see revenue slip about 6 percent to $875 million. “There is no doubt that it so far has been a very tough quarter,” Pinto said. Still, revenue from advising on mergers and acquisitions “is holding well,” he said. The first quarter is typically the strongest for Wall Street investment banks, as clients shift holdings. This time, the rout is prompting

investors to pull back from markets and firms such as Jefferies Group to signal weaker earnings from the business of helping companies issue and sell securities. Shareholder concerns that cheap oil and slowing growth in China will erode bank profits have contributed to a 13 percent slide in the 89-company Standard & Poor’s 500 Financials Index this year. JPMorgan’s stock fell 4.2 percent to $56.12 in New

York, the second-worst performance in the Dow Jones Industrial Average. Shares of the bank slid after it projected potential losses on loans if oil continues to slump.

Accounting for Non-Accountants and Financial Analysis – 26 & 27 February 2016 Enterprise Risk Management

- 27 February 2016 Compliance with Operational Risk Management Guidelines - 04 March 2016

BSP Cir. No. 706, AMLA Law, RA 10365 and the AML Risk Rating System - 04 March 2016

Credit Risk Modelling: Current Practices and Applications - 10 March 2016

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

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Objective: To organize and offer sessions on:

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FEBRUARY15-29

15 Analiza D De Lumban – Rizal Bank Inc.

17 Lorna Leah G. Bongcayao – ANZ Bank

19 Marlyn M. Marudo –Rizal Bank

21 Irene DL Arroyo – PDIC

22 Aristeo A. Dequito – CARD SME Bank

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23 Domingo B. Gavino, Jr.- ING Bank

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29 Yolanda D. Velasco- Land Bank of the Phil

CORE INFLATION - Core inflation is a measure of inflation that excludes certain items that face volatile price movements. Core inflation eliminates products that can have temporary price shocks

because these shocks can diverge from the overall trend of inflation and give a false measure of inflation.

“Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.”

- Buddha

BAIPHIL Market Watch – 26 February 2016

Page 10 of 10

MOST EXPENSIVE CHAIR

Dragon Armchair - $29M

Designed and crafted by Irish designer Eileen Gray, the ‘Dragon’ Armchair is by far one of the most exquisite pieces of luxury vintage furniture. Two years ago, in the month of February, this armchair came into the spotlight when it was auctioned off by Christie’s in Pairs, fetching an astounding $29

million. This extraordinary sale made the Dragon Armchair the most expensive chair ever sold at auction. The armchair was crafted between the years 1917 to 1919 and was first acquired by Suzanne Talbot, one of the most dedicated patrons of the artist. The Dragon Armchair is adorned

with the sculptures of dragons on its arms and the chair measures 24 inches in height.

Jake is very odd.

He likes balloons, but does not like parties!

He likes books, but does not like reading!

He likes weeds, but does not like flowers!

He likes swimming, but does not like water!

Does he like towns or villages?

BPI Asset Management Business World Philippine Daily Inquirer Philippine Star

GMA News ABS-CBN News Bulletin Today Reuters

Bloomberg CNN Wall Street Journal Strait Times

Investopedia Brainy Quotes Goodreads Corsinet – Trivia

Trivia Of The Day Filipi-Know Phrases.Org.UK Fun, Trivia & Humor

Compiled And Prepared By: Research Committee FY 2015-2016

Director: Maria Teresita R Dean (ChinaBank Savings) Chair: Sheryll K. San Jose (Equicom Savings Bank) Members: 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