US stocks drop on disappointing economic dataAgence France-Presse 9:23 am | Wednesday, October 1st, 2014
NEW YORK–Wall Street stocks Tuesday finished lower following disappointing economic data, including a big drop in US consumer confidence.
On the final day of the third quarter, the Dow Jones Industrial Average closed at 17,042.90, down 28.21 points (0.17 percent).
The broad-based S&P 500 fell 5.51 (0.28 percent) to 1,972.29, while the tech-rich Nasdaq Composite Index shed 12.46 (0.28 percent) to 4,493.39.
Despite Tuesday’s drops, all three indices finished with quarterly gains. The Dow rose 1.29 percent, the S&P 0.62 percent and the Nasdaq 1.93 percent.
After rising for four months, the Conference Board index of US consumer confidence fell to 86.0 from 93.4 in August due to mounting concerns about the jobs market.
Other reports included a disappointing reading on Chinese manufacturing and a drop in eurozone inflation in September to the lowest level since the financial crisis.
EBay jumped 7.5 percent after announcing it would spin off PayPal to help it compete better in the fast-moving online payments industry. Earlier eBay had rejected calls by activist investor Carl Icahn to spin off PayPal.
Oil companies dropped as US crude prices retreated 3.6 percent. Dow members ExxonMobil and Chevron fell by 0.4 percent and 1.0 percent respectively, while ConocoPhillips lost 1.7 percent.
Online real estate listings company Move bolted 37.1 percent higher after Rupert Murdoch’s News Corp. announced it would buy the service for $950 million. Zillow, a rival real estate listing company, fell 2.8 percent. News Corp. dropped 2.2 percent.
Avis Budget fell 7.0 percent after the company’s chief financial officer told an investment conference that fleet costs have risen above expectations, in part due to heavy recalls announced by automakers.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.51 percent from 2.49 percent Monday, while the 30-year increased to 3.21 percent from 3.18 percent. Bond prices and yields move inversely.
Gov’t may need to rent power generatorsBy Ronnel W. Domingo | Philippine Daily Inquirer 5:00 am | Wednesday, October 1st, 2014
Time is running out for the government to make use of the opportunity to shore up power-generating capacity to avert brownouts in summer of 2015 and it seems that the only option now is to rent generators, according to Energy Secretary Carlos Jericho L. Petilla.
In a forum attended by businessmen and consumers Tuesday at the Hotel Rembrandt in Quezon City, Petilla renewed Malacañang’s call for Congress to allow the government to do so as provided in Section 71 of the power reform law.
In attendance in the forum were about 100 representatives of the Philippine Chamber of Commerce and Industry, Federation of Philippine Industries, Employers’ Confederation of the Philippines and 16 consumer organizations that included labor groups.
The Electric Power Industry Reform Act, enacted in 2001, disengages the government from the business of power generation and required the privatization of state-owned power plants and other assets.
However, Section 71 of the law states that when the President determines an imminent power supply shortage, Congress may authorize “the establishment of additional generating capacity under such terms and conditions as it may approve.”
President Aquino has done so earlier this month—citing a projected energy deficit of 300 MW to 1,000 MW in summer 2015—and the matter is pending in the legislature.
“Prospective suppliers had set a ‘deadline’ of Sept. 30, which was originally Aug. 31,” Petilla said.
The energy chief said it would take six months to put up the generating sets and bring them online.
“We are considering, through PSALM (state-run Power Sector Assets and Liabilities Management Corp.), to rent or buy as much as 600 megawatts in generation capacity,” Petilla said.
He explained that the figure would cover at least 400 MW of supply shortfall as well as buffer capacity called “regulating reserve.”
Petilla added that the prospective contractors were experienced suppliers that provided electricity in Japan’s Fukushima prefecture, the area that was plunged into darkness following the earthquake and resulting tsunami that hit the northeastern part of that country in 2011.
He said the contractors also provided power during the Beijing Olympics in 2008 as well as in Angola where there was a supply shortage.
“We have a shortfall and the options that we have are to buy or rent generating sets,” Petilla said. “Either way we need Congress to push for this.”
He said renting generating sets with capacity of 600 MW would cost P6 billion for two years—the minimum contract duration that suppliers offer—while buying the same would cost P10 billion.
Gov’t keeping 2014 growth goals as port congestion easesBy Ben O. de Vera | Philippine Daily Inquirer 4:00 am | Wednesday, October 1st, 2014
The National Economic and Development Authority (Neda) on Tuesday expressed confidence that the growth goal for the year would be achieved in view of the easing of congestion at the ports following the lifting of the truck ban in Manila.
Neda director-general and Economic Planning Secretary Arsenio M. Balisacan told reporters that the government was expecting gross domestic product (GDP) growth to hit this year’s target range of 6.5 to 7.5 percent.
“We have grown far above 7 percent in many quarters in the past, so it’s possible to reach the GDP target this time,” Balisacan said on the sidelines of the Philippine Economic Briefing in Pasay City. The Philippine economy grew by 7.2 percent in 2013.
Balisacan noted that the economy should expand by 6.9 to 7 percent in the second half to achieve the lower end of the 2014 goal. The first half GDP growth slowed to 6 percent from 7.8 percent in the first semester of 2013, mainly as the daytime truck ban implemented in the city of Manila starting February slowed trade.
The truck ban caused delays in the entry of imported raw materials as well as in the delivery of finished products for export.
The Neda chief pointed out that the flat imports figure last July reflected the impact of the truck ban to the economy. At the start of the second half, the value of imported goods was almost unchanged, barely inching up by 0.002 percent to $5.4943 billion from $5.4941 billion last year.
He said the truck ban’s negative effect on the economy peaked in June and July.
The official nonetheless expressed optimism that the economy would bounce back, especially as exports and employment both posted growth in July.
Latest government data showed that merchandise exports jumped 12.4 percent to $5.5 billion last July from $4.9 billion in the same month last year.
As for employment, the government reported that the unemployment rate in July slid to 6.7 percent, 0.6-percentage point lower than the 7.3 percent recorded during the same period last year. Neda claimed that 1.06 million jobs were created between July last year and July this year.
Also, Balisacan said the damage caused the by the last two strong typhoons that battered the country “was not as severe as those caused by previous typhoons.”
“Hopefully, the recent typhoons don’t have much negative impact on the economy,” he said.
With the lifting of the truck ban in mid-September, the government hopes export and import figures “will be much better” in the last two months of the third quarter, the Neda chief said.
Gov’t logs P393B in investment pledgesBy Amy R. Remo | Philippine Daily Inquirer 3:00 am | Wednesday, October 1st, 2014
Total investment pledges approved by the Board of Investments (BOI) and Philippine Economic Zone Authority (Peza) dipped by 1.2 percent to P393.6 billion in the first eight months of 2014 from the P398.3 billion recorded a year ago.
Trade Undersecretary Adrian S. Cristobal Jr. said the decline was due to the lack of big-ticket projects seen in the same period last year. The country was also coming from a higher base, with investment approvals in 2013 growing by 10.4 percent to P742.2 billion from the P672.3 billion in 2012.
But Cristobal pointed to the upside of the investment figures, citing the number of jobs that the potential projects could generate.
Based on documents provided during the Philippine Economic Briefing Tuesday, the approved investment commitments for the January-August 2014 period covered 541 projects, which could generate 107,639 new jobs.
The bulk of these pledges (41 percent, or P162 billion) were intended to fund electricity, gas, steam and air-conditioning supply projects. Some of the major power projects approved included those of St. Raphael Power Generation Corp.; GNPower Kauswagan Ltd. Co.; Panay Energy Development Corp.; Emerging Power Inc.; Prime Meridian Powergen Corp.; and Agusan Power Corp.
Real estate activities comprised the second biggest share (25 percent) with P98 billion, followed by manufacturing projects, which could boost the country’s industrial sector. Other projects are related to construction, accommodation, and food services activities.
Of the investment commitments approved, about P328 billion (83 percent) came from domestic sources, while the remaining P66 billion (17 percent) came from foreign sources.
The top five foreign sources of investments were Japan, with approved investments reaching P13.6 billion; the Cayman Islands (P10 billion); The Netherlands (P9 billion); British Virgin Islands (5.9 billion); and the United States (P5.7 billion). They were followed by Germany, Singapore, the United Kingdom, South Korea and Australia.
This year, the BOI and Peza expect the value of investment approvals to reach a combined P790 billion; P869.3 billion in 2015; and P956.3 billion in 2016.
The BOI alone is looking at investment approvals amounting to P491 billion in 2014; P540 billion in 2015; and P594 billion in 2016. For Peza, investment approvals are targeted to reach P299 billion in 2014; P329 billion in 2015; P362 billion in 2016.
According to government documents, the investment target of BOI was based on 10 percent per year growth rate under the Philippine Development Plan. Peza’s target, meanwhile, was based on the agency’s performance in previous years, after taking into account the factors that influenced the global market.
These included movement of electronics products and devices in the world market; the movement and growth of the global automotive industry; and the concomitant upgrading of electronic and electrical machinery to produce upgraded products.
PAL starts flying to NY again in March 2015By Miguel R. Camus | Philippine Daily Inquirer 2:00 am | Wednesday, October 1st, 2014
Philippine Airlines said it would revive its Manila-New York flights on March 15 next year, the flag carrier’s new management announced on Tuesday.
PAL said in a statement that the route, which made a stopover in Vancouver, Canada, would be Philippine Airlines’s longest, covering a distance of 14,501 kilometers and 16.5 hours of flying time.
The announcement comes after the United States’s Federal Aviation Administration restored the Philippines’ category 1 safety rating last April, allowing Philippine carriers to resume expansion in the US.
PAL operated flights to New York from 1996 to 1997 before financial constraints and the Asian financial crisis forced it to stop servicing the route and review the airline’s expansion plans.
“This auspicious start of regular flights to New York will coincide with PAL’s 74th founding anniversary,” PAL chair and CEO Lucio C. Tan said in the statement.
Tan recently reacquired management control of PAL from conglomerate San Miguel Corp.
The four-times-a-week Manila-Vancouver-New York will operate at Terminal 1 of New York’s JFK International Airport. PAL will have full traffic rights between Vancouver and New York.
The addition of New York will bring to five PAL’s US destinations, following Los Angeles, San Francisco, Honolulu and Guam, according to the airline’s statement.
Flight PR 126 departs Manila every Tuesday, Thursday, Saturday and Sunday at 11:50 p.m. Arrival in Vancouver is 8:50 p.m. on the same day. After a two-hour transit stop, the service continues on to New York at 10:50 p.m., touching down at Terminal 1 of JFK International at 7:00 a.m. the following day.
The return service, PR 127, departs New York at 11:00 a.m. every Monday, Wednesday, Friday and Sunday, arriving in Vancouver at 1:50 p.m. It departs the Canadian city at 3:20 p.m. and lands back in Manila at 8:35 p.m. the following day.
PAL will use the Airbus A340-300, which seats 36 passengers in business class and 218 in economy, for this route.
On board, passengers can expect to be pampered with PAL’s signature “at home” in-flight service, which features business class seats that convert to full-flat beds; in-flight entertainment system such as audio-video on demand in business; and gourmet cuisine designed by top international guest chefs.
The New York service will have the added benefit of boosting PAL’s Canadian operation. From March 15, 2015, the current daily service between Manila and Vancouver will increase to 11 flights weekly with three departure times from Manila—mid-afternoon, early evening and late evening—providing wider schedule choices to passengers.