Speculators are pushing food prices and other basic commodities up and blaming the government’s tax reform package, Agriculture Secretary Emmanuel Piñol said on Wednesday during the pre-State of the Nation Address (SONA) forum held at the Philippine International Convention Center in Pasay City.
“The TRAIN (Tax Reform for Acceleration and Inclusion) law has very little impact actually on prices. Prices in the market are rising because of speculation,” Piñol and added the government is addressing the issue.
He said middlemen and unscrupulous traders are using the tax reform law as a scapegoat to raise prices.
But he said prices of basic agricultural products could be addressed in the long term by solving farm productivity and market distribution challenges. He added the basic problem is the lack of capital of poor farmers for their production requirements.
Desperate farmers resort to borrowing from local traders or loan sharks who charge very high interest rates, which prompts them to raise their prices. The several layers of middlemen before a farm product reaches the consumers from the farmers also jack up prices. In many instances, middlemen earn more than the farmers, he said.
Piñol pointed out that market vendors likewise resort to informal sources, such as the “5-6” lenders, for their capital.
To address this problem, he said the DA has initially earmarked a P1-billion loan facility for farmers, with a six-percent interest rate without collateral cover.
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By Daily Tribune — July 13, 2018 12:19 AMAsian markets on Thursday recovered from the previous day’s hammering, oil prices bounced and the dollar extended a rally on the back of expectations the US is better prepared to deal with a trade war with China. While investors remain on edge about a damaging standoff between the world’s two economic superpowers, there are hopes the two sides will avoid an escalation despite Donald Trump threatening tariffs on a further $200 billion of Chinese goods. The optimism helped bargain buying Thursday, with Tokyo ending more than one percent higher and Hong Kong adding 0.6 percent. Shanghai jumped 2.2 percent as the Chinese central bank set the struggling yuan’s US dollar fix at a strong level in a bid to soothe concerns about its recent sell-off, while the official Xinhua news agency in a commentary said the country’s equity market fluctuations were controllable. The remarks suggested leaders were ready to step in if needed, analysts said. Sydney, Singapore, Seoul and Taipei were also deep in positive territory. However, Stephen Innes, head of Asia-Pacific trading at OANDA, warned “we are little more than a headline away from another risk-off episode” and added that markets would likely remain volatile for some time. “The prospects of another round of US tariffs directed at China have resurrected fears that the trade skirmish between Washington and Beijing could escalate with some investors now fearing a full-blown global trade war could be a reality,” he said. “But the most damning signal is that dialogue... is pretty much non-existent and with a diplomatic solution appearing more unlikely as the days go by markets will remain on the defensive.” Japan’s Nikkei has been given an extra nudge by a weaker yen, which helps exporters. Despite the currency’s popularity as a safe haven in times of turmoil, the yen is at a six-month low against the dollar, which is getting support from the robust US economy. Settlement hopes While most other countries are seeing improvement, data shows the US is surging as jobs creation picks up and wages rise. News that producer price inflation hit a more than six-year high in June added to expectations the Federal Reserve will hike interest rates again soon, in turn strengthening the dollar. The strong readings coming out of Washington suggest the US is in a much stronger position to fight a trade war with China, which is battling slowing growth and a crippling debt mountain among other things. But Marito Ueda, senior dealer at FX Prime, said there are also hopes for a China-US deal to avoid a trade war. “Even though concerns remain over US-China trade frictions, the dollar remains stronger (against the yen) as traders believe there will be a political settlement at some point to avoid an all-out trade war,” he told AFP. The US unit was also up against the euro and most other high-yielding currencies. On oil markets both main contracts edged up after being sent into freefall Wednesday -- Brent dived around six percent and WTI shed about five percent -- by worries about the stronger dollar and the impact of a trade war on demand. The selling was fanned by news that major producer Libya had resumed exports from four eastern ports following a disruption caused by clashes in the war-torn country. In Hong Kong, Chinese telecoms equipment maker ZTE cruised 25 percent higher as it moved a step closer to having US sanctions lifted by signing an agreement to put $400 million in escrow to cover any future violations. The move comes after it agreed to pay a $1 billion fine and make the escrow placement in return for the lifting of a seven-year ban on US firms selling to it, which had put in on the edge of collapse.
By Daily Tribune — June 9, 2018 12:00 AMState-owned Development Bank of the Philippines (DBP) boosted its development lending activities in the first quarter of 2018, releasing a total of P223.24-billion in loans to borrowers, up by 16.86% from the P191.03-billion disbursed during the same period last year, a top official said. DBP president and chief executive officer Cecilia C. Borromeo said the bulk of the loan releases went to infrastructure and logistics at P85.93-billion, followed by loans to government-owned-and-controlled corporations and local government units (P63.8-billion), agriculture (P40-billion), social services (P31.7-billion) and the environment (P16-billion). The bank also released P16.4-billion to micro, small, and medium enterprises. “DBP remained true to its mandate as a development catalyst by increasing its loans to strategic sectors of the economy,” Borromeo said. “We continue to enhance access to credit nationwide to finance the much-needed infrastructure of the country,” she said. DBP is the eighth largest bank in the country in terms of assets and has been designated as the country’s infrastructure bank by the national government. It provides loans to strategic sectors such as infrastructure and logistics, small and medium enterprises, social services and community development, and the environment. Borromeo attributed the hefty increase in the bank’s loan portfolio to the establishment of lending groups and centers in critical areas of the country as it streamlined client servicing and loan processing. Earlier this year, DBP created seven lending groups and 22 lending centers nationwide to fast-track the credit application process with its network of 125 branches focused on deposit-generation activities. “Our newly created provincial lending groups are proving to be effective channels for funding development projects in the countryside,” Borromeo said. Borromeo said total deposits increased by 32.5% in the first quarter to P428.5-billion from P232.3-billion in the same period last year, attributed mainly to the opening of new branches in various parts of the country. She said DBP would broaden its branch network this year by opening ten new branches while expanding its ATM network which has increased by 81 machines, bringing the bank’s total number of ATMs to 710 nationwide as of May this year. “We ended the first quarter with 81 more ATMs, which is 40.5% of our target of 200 new ATMs this year,” Borromeo said. “Out of the number, 69 ATMs were installed in provincial sites, in line with our commitment to bring banking services to the underserved areas,” she said. Borromeo said DBP would aggressively target one million depositors in the next five years, focusing mainly on small depositors residing in underserved areas of the country as part of its advocacy of financial inclusion. “We want as many Filipinos to have their own deposit accounts, and we would want them to go to DBP, and to trust us as their bank,” she said. Gross income up Borromeo said that DBP’s gross income grew by 9% from January to March this year to P5.77-billion from P5.29-billion recorded in the first quarter of 2017, while net worth rose to P47.8-billion, registering a 3.49% increase from the P46.19-billion for the same period in 2017. She added that the bank’s net income reached P1.09-billion, down by 15.5% from the P1.29-billion registered during the same period last year, owing largely to higher provisioning for credit losses consistent with the bank’s objective of maintaining portfolio quality and in compliance with new regulations. Borromeo said that DBP remains on track to achieve its financial targets this year and that overall average cost of funds has been on a steady decline while operating expenses have been kept to a minimum.
By Bing Matoto — July 18, 2018 12:34 AM“The common measuring standard for differentiating the valuations would be to look at their price to earnings multiple.” Art is defined by Webster’s Dictionary as a “skill acquired by experience, study or observation.” This definition to my mind aptly describes what it takes to be a smart investor in the stock market contrary to how the uninformed would typically liken the market to as nothing more than a casino. Like an artwork, the appreciation of its beauty would vary from individual to individual. So, as a caveat to my readers: the following commentary is strictly my own approach based on my experiences and biases and is far from an investment advisory on what stocks to pick. And surely, like all investors, I have had my own share of hits and misses. Study We need to study the companies listed in the PSE which number almost 300. These companies are categorized into seven sectors: Financials; Industrial; Holding Firms; Property; Services; Mining and Oil; Small, Medium and Emerging. To simplify life however, I tend to just focus on the PSEi which is a stock market index comprised of about 30 companies. These companies in the PSEi consist of the largest in market capitalization or value and most actively traded names in our country. I find comfort in investing in shares with high liquidity because it assures me that when I need to buy or unload shares, there would be ready sellers and buyers so prices will not gyrate that wildly. We need to realize that what may seem to be a great posted market price could simply be due to the limited availability of the shares thus bumping up unrealistically the market price. Conversely, it could also suggest that when you need to unload, demand could also be limited, putting downward pressure on the price. The level of the public float or the shares held by the non-strategic investors such as the controlling shareholders would be a good indicator of the liquidity of a stock. In fact, the PSE currently requires a minimum of 15 percent free float for a company to be eligible to be included in the PSEi. Furthermore, to be eligible for inclusion in the PSEi, the shares of the company must be among the top 25 percent in trading volume in nine out of 12 months of the year and are in the top 30 percent bracket in market capitalization. Simply put, a key consideration in stock picking is to select shares that have the highest market values, are widely held by the public and are actively and regularly traded in the market. How do you choose which shares to buy? I look primarily at the fundamentals of the company which are essentially the history and prospects of the company’s profitability guided by reputable majority shareholders and proven professional management. My bias is for companies operating in an industry that is stable and whose growth prospects are sound. Personally, I tend to favor banks particularly the top tiered banks that regularly declare cash and/or stock dividends. The simple argument I would put forward especially for those ultra conservative investors is that if you can trust a bank with your deposits and only earn low interest rates, why not be a part owner instead of the bank that makes money on your deposits and hopefully share in the fruits as a shareholder, i.e. regular cash dividends and capital appreciation? With our burgeoning population, companies that are in the consumer and retail business would also be in my list of preferred companies. As the economy expands, so will the buying power of consumers grow, auguring well for these companies catering to the consumption needs of our population. And then there are the housing needs of the people particularly those who are in the low to mid-income levels that grow in proportion to the population growth. The real estate companies catering to this segment that have a solid track record in making good on its promise to complete its real estate development projects on time would take my vote. An added bonus in my checklist would be diversified real estate firms that also have regular rental income from commercial developments. I would also include in my portfolio a small position in utility companies with steady cash dividends such as those in telecommunication and power which are good long term hedge bets that would be assured of survival in good times and in bad. Finally, I would have at least one diversified conglomerate holding company in my list that would provide a broad coverage of the economy. Price earnings multiples (PE Ratio) Listed companies in the different industries would have varying market valuations. The common measuring standard for differentiating the valuations would be to look at their price to earnings multiple or PE ratio which in simple terms is the market valuation of the company’s earnings. Currently the whole stock market is trading approximately at a PE ratio of 18x. That means investors on the average are prepared to pay P18 for every peso earned by the listed companies on the average. This is a convenient and simplistic way to compare one company to another or to the market in general. Investing in a company that has a lower PE ratio could suggest that it is cheaper relative to another company with a higher PE ratio. Note however that we also need to factor in the growth prospects of each company that could account for a higher PE ratio. Unfortunately, projected earnings are usually not readily available since the PSE is fairly strict about disclosing information to the public that can be deemed to be speculative in nature and an earnings forecast would be in that category. The occasional exceptions As an exception to my fundamentalist approach, on a few occasions, and only for a very modest portion of my equity portfolio, I also keep an eye on companies that may have potentially a surge in market valuations in the near term because of different reasons such as being a rumored takeover target or a planned stock rights offering or an IPO in the works. In such scenarios, one would have to be as nimble as Jayson Castro streaming down the court for a fastbreak after a steal! Timing would be essential however. Go in, set your target price levels and get out as soon as you reach it. Don’t be greedy. And if your read was wrong, cut your losses. Until next week folks. One big fight! For any questions or comments, you can reach me at firstname.lastname@example.org