US President Donald Trump said Thursday that Russia and Saudi Arabia are “close” to agreeing on production cuts to prop up oil prices.
“I would say they are getting close to a deal. We will soon find out,” Trump told a press briefing at the White House immediately after a conference call with both Russian President Vladimir Putin and Saudi leader Crown Prince Mohammed bin Salman.
“They’re getting close to a deal. That’s OPEC and many countries outside of OPEC,” he said in further comments.
They will “probably announce something either today or tomorrow,” he said.
Trump said he would be having further discussions on the oil market crisis later Thursday.
Prices have plummeted after being hit simultaneously by a Russian-Saudi price war, in which both countries ramped up production, and the global economic paralysis triggered by the coronavirus pandemic.
“There’s not enough room to even store it,” Trump said of the surplus oil around the world.
The situation was “catastrophic,” Trump said, but added the market was “hitting bottom.”
Luring HK fintech firms to Phl
The coronavirus pandemic made financial technology, or fintech in cyberspace parlance, a way of life.
But strict regulations and the jittery market made fintech investments erratic.
In Hong Kong, China’s polarizing national security law forced technology firms to reconsider their presence in Hong Kong while some moved data and people out.
Companies that handle data deemed to endanger national security are punishable under the law which took effect in July.
Reports have it that Alibaba-backed Ant Group, China’s second-largest brokerage Haitong Securities, Huawei’s cloud division and Tencent-backed digital bank WeBank have approached Singapore industry groups.
But what if the Philippines make fintech regulations more attractive by addressing investors’ concerns?
House Bill (HB) 7760, or the Financial Technology Industry Development Act, will mandate the creation of a Financial Technology Office (FTO) within the Bangko Sentral ng Pilipinas (BSP) to draw up a financial technology industry roadmap.
HB 7760 also seeks to extend the eligibility for a Special Investors Resident Visa of investors and management staff, regardless of investment size, provided they are recommended by the BSP governor.
“We are in the game for fintech investments. We have 74 million smartphone users who spend about 10 hours a day on the internet. That is one of the biggest consumer markets for digital products in the world. For market-seeking firms, we are probably one of the most attractive,” Albay (2nd District) Representative and bill author Joey Salceda said.
Fintech firms use technology and innovation to compete with or complement traditional financial methods in the delivery of financial services. Among these are virtual banks, online lending facilities and crypto currencies.
“Fintech is the future of money. The Philippines can be a leader in this area. If we are going to dream the future up, let’s dream big,” he added. “The digital economy, while emerging, seemed to be still distant before the COVID-19 struck. Now, the digital economy is upon us.”
HB 7760 also includes the financial technology industry in the Investment Priorities Plan for 10 years, qualifying it for tax incentives on offer by the Board of Investments.
The bill recommends an annual review of policies and infrastructure for data security and management, to ensure that the country’s infrastructure and policies are compatible with basic standards for the development of a sophisticated financial technology sector.
The proposed FTO will recommend regulatory sandboxing, the practice of allowing fintech firms to pilot their innovations within a small but largely deregulated market. This will allow firms to fix glitches in their system with little risk, before they launch their services in the larger market.
US restricts technology sales to Chinese semiconductor giant
Washington has ordered US companies to seek permission before selling their technologies to Chinese semiconductor giant SMIC, its latest salvo in the battle for technological dominance over Beijing, the Wall Street Journal reported Saturday.
The Department of Commerce “has told US computer-chip companies that they must obtain licenses before exporting certain technology to China’s largest manufacturer of semiconductors,” according to the business daily.
The new rules were announced in a letter to the industry Friday, which says that “exports to Semiconductor Manufacturing International Corp. or its subsidiaries risk being used for Chinese military activities,” the report continued.
The newspaper said the administration of US President Donald Trump has “grown more concerned about Beijing’s practice of leaning on private companies to advance its military aims.”
The Commerce Department would not comment on the matter specifically, but a spokesperson with its Bureau of Industry and Security said they are “constantly monitoring and assessing any potential threats to US national security and foreign policy interests” and “will take appropriate action as warranted.”
The report comes as the White House says it will not back down from a plan to ban new US downloads of TikTok, the popular Chinese-owned video-sharing app, over what it says are national security concerns, setting up a court showdown ahead of a Sunday deadline.
For years China and the United States have been scrapping for tech dominance.
SMIC is key to Beijing’s ambition to someday achieve semiconductor self-reliance. Analysts say China’s dependence on foreign — including US-made — chips hinders that national goal.
The issue was brought into stark relief earlier this year by the US campaign to hobble Chinese telecom giant Huawei, which Washington fears could allow China’s security state to tap into global telecoms networks.
The US Commerce Department in May announced plans to cut off Huawei’s access to global semiconductor supplies, which the company said would threaten its “survival.”
Online filing for PLP
Through the SSS’ continuous digitalization efforts, the PLP was made available online since last 15 September 2020.
State pension fund Social Security System (SSS) added a new facility on its website to allow retiree-pensioners to file their Pension Loan Program (PLP) applications online.
SSS President and CEO Aurora Ignacio said the option, found under the E-Services tab of the My.SSS member portal at www.sss.gov.ph, aims to provide members with a safer, faster and more convenient means of obtaining loans.
“Through the SSS’ continuous digitalization efforts, the PLP was made available online since last 15 September 2020. Qualified retiree-pensioners can easily apply for the program without visiting our branches, which is either difficult or restricted, particularly for senior citizens, because of the COVID-19 situation,” Ignacio added.
PESONet deal next
The SSS is now aiming for the addition of Philippine Electronic Fund Transfer System and Operations Network (PESONet) participating banks among the PLP disbursement channels.
To file a PLP application online, a retiree-pensioner must log in to My.SSS, proceed to the E-Services tab, click “Apply for Pension Loan,” choose the preferred loan amount and term, agree to the terms and conditions of the program and print or download the PDF copy of the Disclosure Statement.
The retiree-pensioner will receive an email confirmation of pension loan application.
Pension loan proceeds are credited to the retiree-pensioners disbursement account within five working days.
Financial aid for seniors
However, retiree-pensioners under the Portability Law, who are under the care of a guardian, or receiving monthly pensions through checks are not qualified to avail of the PLP.
Pension loans of three and six times the pensioner’s BMP plus the P1,000 additional benefit have a payment term of six and 12 months, respectively. On the other hand, both pension loans of nine and 12 times the BMP plus the P1,000 additional benefit have a payment term of 24 months.
The first monthly amortization for the PLP will be due on the second month after the loan was granted.
Intelligent gov’t at hand
It makes it easier for the citizen to deal with you, it makes it easier for you to deal with them.
A full digital shift in government operations is targeted as soon as possible which is an objective of Senate Bill (SB) 1738 or the E-Governance Act that Department of Finance Secretary Carlos Dominguez III hailed as a game changer.
Switching to electronic governance (e-governance) will cut red tape, upgrade the delivery of services to the people and curb corruption in the government, according to Dominguez.
The bill, filed by Senator Christopher Lawrence “Bong” Go, aims to institutionalize the transition to e-governance in response to President Rodrigo Duterte’s call during his 5th State of the Nation Address (SoNA) for the government to make all possible services available to the people from the comfort of their homes or workplaces.
Gov’t service speeds up
“It makes it easier for the citizen to deal with you, it makes it easier for you to deal with them. So this is an important move,” Dominguez said of Go’s bill.
According to the explanatory note of Go’s measure, the government will be mandated “to establish an integrated, interconnected and interoperable information and resource-sharing and communications network spanning the entirety of the national and local government; an internal records management information system; an information database and digital portals for the delivery of public services.”
A counterpart measure, House Bill (HB) 1248, has been filed to “further improve the ease of doing business — and thus sharpen the country’s global competitiveness as an investment haven — while encouraging people to keep practicing physical distancing in the post-pandemic scenario by letting them transact official business without actually having to go to the various government agencies themselves.”
In his SoNA last 27 July, the President said e-governance “will enable our bureaucracy to better transition into the ‘new normal’ and cut or minimize red tape.”
BoC as model
Dominguez said the Bureau of Customs (BoC), which is now in the process of digitalizing its operations, is one good example of how e-governance can improve government services and spot potential irregularities in its operations.
Government will be mandated to establish an integrated, interconnected and interoperable information and resource-sharing and communications network.
He informed the President during the televised briefing that the bureau, under the leadership of Commissioner Rey Leonardo Guerrero, has put in place a “sophisticated system” that allows the monitoring from the BoC central office of all shipments entering the country’s main ports.
“(The BoC) is quite advanced in digitalization. It’s not yet perfect, but he (Guerrero) is moving towards that,” Dominguez said.
BSP stabilizers to aid recovery
Security Bank’s Trust Asset Management Group sees strong potential for the economy to bounce back from the negative effects of COVID-19 after the Philippines posted a 16.5 percent gross domestic product (GDP) contraction in the second quarter, the worst figure in Philippine history since the Asian Financial crisis in 1997.
“During the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis, inflation played a large part into the crash that ultimately bled into consumption. However, for COVID-19, it was the decline in consumption and business closures, because of lockdowns that bled into the financial system which in return led us to negative GDP growth territory,” Noel Reyes, chief investment officer of Security Bank’s Trust and Asset Management Group, said.
Despite this, the Trust Group’s fund managers remain very optimistic that the country’s GDP will still settle at 3.5 percent year-on-year growth by 2021 due to base effects and the GDP returning to pre-COVID figures at six percent by 2023.
“The good liquidity brought by the forceful response of the Bangko Sentral ng Pilipinas and low interest rates put the country in a good position for consumption rebound,” Reyes said.
Cloud of uncertainty
Since the lockdown was imposed in mid-March, the economy has been hit with high investor uncertainty causing a significant drop in the Philippine Stock Exchange Index during the early parts of the quarantine. Despite this, the Peso has become Asia’s best performer with at least four percent growth against the US dollar.
In a webinar held recently for its Wealth Management and Trust clients, the group shared a 7.7 percent year-end GDP forecast for the economy. This can be attributed to the fact that most Filipinos will continue to stay at home, only spend on essentials and still refrain from purchasing non-essential items.
Echoing the group’s economic view, Security Bank’s President and CEO Sanjiv Vohra said that consumer confidence can be seen returning once a vaccine or cure that could end the pandemic is found.
“It’s a delicate balancing act for sure, and the key will be to strengthen our public health so that we make sure that our workforce and thereby our economy will remain productive, and business and consumer confidence returns. Locally, we have low-interest rates and good liquidity. We also have a forceful BSP response, resilient currency, and a strong potential for economic and consumption rebound,” Vohra said.
B2 shields supply chain
RA 11494 stated that the Department of Trade and Industry may suspend requirements for export enterprises that produce critical goods and require them to provide local supply.
Newly-enacted Bayanihan to Recover as One Act, or Bayanihan 2 (B2), mandated the government to adopt measures that will facilitate and improve supply chain movement and minimize disruptions to ease the flow of essential goods, particularly food and medicine.
Aside from improving the national end-to-end supply chain, Republic Act (RA) 11494, calls for measures that will reduce logistics costs “to the maximum extent possible,” especially for basic commodities, according to the Pilippine Exporters Confederation Inc.
Relatedly, RA 11494 stated that the Department of Trade and Industry (DTI) may suspend requirements for export enterprises that produce critical goods and require them to provide local supply.
These were among the response and recovery interventions under RA 11494, as the new law, which will be in effect until 19 December 2020, seeks to fast-track recovery from the coronavirus disease (COVID-19) pandemic fallout.
Bayanihan 2 effectively extends the validity of the government’s COVID-19 programs and interventions under Bayanihan 1, the validity of which lapsed last June.
To carry out interventions, the new law provides for a P165.5 billion subsidy consisting of P140 billion in regular appropriations and P25.5 billion in standby funding.
RA 11494 also liberalizes incentives for the manufacture or importation of critical equipment and supplies, as well as essential goods and healthcare equipment and supplies, needed to carry out policies under the new law.
Exemption from import duties, taxes and other fees for the manufacture or importation of critical equipment and essential goods will be determined by the Bureau of Customs and Bureau of Internal Revenue. Importation of health and medical equipment and supplies were also exempt from duties, taxes, and fees under RA 11469.
Priority is stable prices
RA 11494, however, provides for the sale, distribution and trade of critical equipment and essential goods or supplies to prevent the shortage of supply and ensure prices are stable.
Essential goods include commodities referred to in section 4 (u) (l) of RA 11494 such as equipment for waste management that are approved by the Department of Environment and Natural Resources, Department of Health or other concerned regulatory agencies and inputs, raw materials, and equipment necessary for the manufacture or production of essential goods related to the containment or mitigation of COVID-19.
To qualify for the exemption from import duties, taxes and other fees, as well as to ensure the supply of personal protective equipment at competitive prices, DTI should certify that the equipment and supplies being imported are not locally available or of insufficient quality and preference.
Preference is given to product, materials, and supplies produced, made or manufactured in the Philippines.
Exemption from import duties and taxes, including donor’s tax, will also be granted for personal computers, laptops, tablets, or similar equipment for use in schools, donated for distribution to public schools regardless of level, including state universities and colleges and vocational institutions under the Technical Education and Skills Development Authority.
Keeping in touch eases COVID woes
We vow to continue to ensure the success of both bipartism and tripartism through the promotion of a harmonious social dialogue with partners.
The Employers Confederation of the Philippines (ECOP) espoused dialogues and multi-party consultations in confronting labor and other policy issues amid challenges posed by the pandemic.
According to ECOP president Sergio Ortiz Luis Jr., the group will remain steadfast in its commitment to represent and enhance Filipino employers’ interest in all levels of policy development and decision-making processes.
“We vow to continue to ensure the success of both bipartism and tripartism through the promotion of a harmonious social dialogue with partners to shape an enabling policy and business environment for all,” Ortiz-Luis said.
The employers group vowed to “persevere in fostering a culture of compliance, capacitating employers with the right tools and skills to cope with emerging trends and encouraging good corporate citizenship and other voluntary practices.”
ECOP noted the current year has been extraordinarily challenging to both businesses and workers across the globe, with the uncertainty occasioned by the challenges unabated.
“With a seemingly pessimistic future, we all continue to find ways to survive and thrive in the middle of this pandemic. COVID-19 did not only become a global health crisis but has also brought about an array of social and economic issues for the country and the world,” Ortiz-Luis added.
He emphasized life and work have changed dramatically from what people are used to.
Loans buoy BoP in Aug.
The current BoP surplus was supported mainly by foreign borrowings by the National Government along with lower net deficit in merchandise trade.
The balance of payments (BoP) posted a surplus for August, latest data from the Bagko Sentral ng Pilipinas (BSP) showed.
BSP noted that the $657 million BoP surplus brought an aggregative surplus position of $4.77 billion.
However, the cumulative surplus proved to be lower than the $5.53 billion surplus in the same period last year.
“The current BoP surplus was supported mainly by foreign borrowings by the National Government along with lower net deficit in merchandise trade,” the BSP said.
Borrowings offset outflows
“These outcomes fully offset the impact of higher net outflows of foreign portfolio investments, and lower net inflows from foreign direct investments, trade in services and personal remittances,” it added.
Further, the central bank stressed that the latest BoP figure reflects another record high gross international reserves (GIR) of $98.95 billion.
High liquidity buffer
“At $98.95 billion, the GIR represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks,” it said.
“This is equivalent to 9.8 months’ worth of imports of goods and payments of services and primary income. Moreover, it is also about 9 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity,” it concluded.
Ultra-exclusive Tower Club in Makati closing shop
To the reported dismay of its members, the prestigious Tower Club atop the Philamlife IT Tower at Salcedo Village in Makati City is closing shop after 19 years of hosting power lunches and dinners.
In a stockholders’ meeting over the weekend, management led by the Philam Group sought and received the approval of its plan to shutter the exclusive club due to losses in the past years aggravated by the coronavirus pandemic.
The club’s impending closure raised howls of protest among its members composed of the country’s elite and business captains, sources said.
Tower Club, Inc. will end its corporate life within 16 months, based on reports from the stockholders’ meeting where management revealed the club “has been consistently accumulating net losses.”
“Measures implemented to address its financial problems have failed to keep the Club operationally and financially viable,” management added.
Restrictions on social gatherings had taken its toll on the core service of the club which is to provide a venue for fine dining meetings and to host a gym.
The company will be dissolved by 31 January 2022, by which time it would have completed the retrenchment of its employees, liquidating its assets and paying off its debts.
The club was founded by the late SGV founder Washington Sycip and former central bank governor and Philam owner Joey Cuisia.