BAIPHIL Market Watch – 14 February 2018 Page 1 of 10

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BAIPHIL MARKET WATCH ~ Scaling New Heights In Banking Excellence ~

14 Feb 2018

Legend Improvement / Up Deterioration / Down No Movement

FINANCIAL MARKETS AT A GLANCE

PHILIPPINES

Financial Rates Current Previous

USD/PHP 51.9800 51.7700

30-D PDST-R1 3.1732% 3.1746%

91-D PDST-R1 2.5219% 2.7500%

180-D PDST-R1 3.5475% 3.4129%

1-Y PDST-R1 2.9970% 3.6736%

10-Y PDST-R1 6.5586% 6.6914%

30-D PDST-R2 3.1732% 3.1746%

91-D PDST-R2 2.6168% 2.7461%

180-D PDST-R2 2.8872% 3.4218%

1-Y PDST-R2 2.9771% 3.6914%

10-Y PDST-R2 6.5604% 6.6914%

Stock Index Current Previous

PSEi 8,570.14 8,487.91

Total Market Cap (Php Tr) 14.468 4.048

Trade Value (Php B) 7.665 5.863

PSEi Performers Last Price % Change

Top Gainers

NOW Corporation 10.26 29.87%

Vulcan Industrial & Mining 1.30 16.07%

ATN Holdings, Inc. “B” 0.70 14.75%

Top Losers

Grand Plaza Hotel Corp 11.30 -10.88%

National Reinsurance Corp 1.66 -7.78%

Anchor land Holdings, Inc. 18.20 -6.57%

ASIA-PACIFIC

Stock Index Current Previous

NIKKEI 21,244.68 21,382.62

HANG SENG 29,839.53 29,459.63

SHANGHAI 3,185.60 3,153.56

STRAITS 3,415.07 3,383.76

SET 1,800.05 1,788.01

JAKARTA 6,578.18 6,521.61

Currency Exchange Current Previous

USD/JPY 107.7600 108.7800

USD/HKD 7.8215 7.8196

USD/CNY 6.3410 6.3260

USD/SGD 1.3214 1.3261

USD/THB 31.4370 31.6500

USD/IDR 13,645.50 13,640.00

REST OF THE WORLD

Stock Index Current Previous

FTSEuro First 300 1,454.02 1,463.28

FTSE 100 7,168.01 7,177.06

DAX 12,196.50 12,282.77

CAC 40 5,109.24 5,140.06

DOW JONES 24,640.45 24,601.27

S&P 500 2,662.94 2,656.00

NASDAQ 7,013.51 6,981.96 ,

Various Current Previous

EUR/USD 1.2356 1.2270

GBP/USD 1.3888 1.3855

Gold Spot (USD/oz) 1,328.10 1,321.20

Brent Crude (USD/bbl) 62.72 64.17

3-M US Treasury Yield 1.57% 1.54%

10-Y US Treasury Yield 2.84% 2.86%

30-Y US Treasury Yield 3.17% 3.14%

PHILIPPINES

Share prices on the Philippine Stock Exchange rebounded on Tuesday, snapping three consecutive sessions of losses as bargain hunting

overcame the market. The benchmark PSEi increased by 82.23 points or 0.97 percent to 8,570.14 at the closing bell. The broader All Shares climbed 27.31 points or 0.54 percent to 5,053.21. “This is because of bargain hunting as the market has been on the decline in the past few days. So this is an opportunity for players to come in,” Eagle Equities Inc. president Joseph Roxas told GMA News Online. Roxas noted the market tracked the recovery overnight on Wall Street. ChinaBank Securities Corp. research director Garie Ouano said it was purely bargain hunting. “There were significant declines in the market recently. So this is just a lift from bargain hunting since there are no market-moving developments so far,” Ouano said. Wall Street’s three major indexes rose for the second day as investors regained some confidence after US equities had their biggest weekly drop in two years, a Reuters report noted. Foreign funds bought P2.471 billion shares and sold P3.312 billion during the session for a net selling position of P841.649 million. More than 1.817 billion shares valued at P7.664 billion, changed hands. Decliners led advancers, 110 to 96, and 48 issues were unchanged.

BAIPHIL Market Watch – 14 February 2018 Page 2 of 10

The Philippine peso fell to its weakest level in over 12 years on Tuesday, as the market speculated about more US rate hikes this year on expectations of accelerating inflation. The local currency closed at P51.98:$1, weaker by 21 centavos than Monday’s close of P51.77. This is weakest level since the pair closed at P52.165:$1 on July 21, 2006. The market expects faster inflation in the world’s largest economy as a result of the US government’s tax reform program. The market consensus for the January inflation is now at 1.9 percent. “It’s mainly on the inflation because there’s no other market-moving news and significant economic data expected to be released this week,” one foreign exchange trader said. “We could hit as low as P52.10 (on Wednesday) if inflation is ... faster than expected,” the trader said.

The 30-member Philippine Stock Exchange index (PSEi) will remain unchanged, according to the bourse’s latest review covering

full year 2017. The Philippine Stock Exchange (PSE) announced in a statement that while there will be no changes to the main index’ composition, it has increased the minimum free float level requirement to 15% from 12% previously. “This adjustment was made in anticipation of the plan of the Securities and Exchange Commission (SEC) to increase the minimum public ownership (MPO) for publicly-listed companies,” PSE President and Chief Executive Officer Ramon S. Monzon was quoted as saying in a statement. The SEC had released a memorandum circular last November 2017 requiring companies seeking to conduct an initial public offering to have an MPO of at least 20%. The corporate regulator has yet to release guidelines on how publicly listed companies should comply with the new rules, but noted in a draft circular that publicly listed firm will first be directed to reach a public float of at least 15% this year, before further raising it to 20% by 2020. The PSE takes into account a company’s public float, liquidity, and capitalization in order to determine its suitability to be part of the index, which is seen as a gauge for investor sentiment. “To ensure the sustainability and viability of companies that form the index, we shall also take into account the financial condition of companies that are potentially first time entrants to the main index and companies that form part of the sector indices,” Mr. Monzon added. On the other hand, PSE’s six sectoral indices will be revamped. The sub-index for holding firms will lose Lodestar Investment Holdings Corp., Pacifica, Inc., and Ramon S. Ang-led Top Frontier Investment Holdings, Inc. Philippine Realty and Holdings Corp. will be added to the property sector, while Araneta Properties, Inc., Cyber Bay Corp., and MRC Allied, Inc. will be dropped. To be included in the index for services are MacroAsia Corp., PhilWeb Corp. and Waterfront Philippines, Inc. On the other hand, 2GO Group, Inc., Apollo Global Capital, Inc., Island Information and Technology, Inc., Premiere Horizon Alliance Corp., Travellers International Hotel Group, Inc., and SBS Philippines Corp. will no longer be part of the services index. Medco Holdings, Inc. will no longer be part of the financial index. The industrial index will add two firms: Shakey’s Pizza Asia Ventures, Inc. and SFA Semicon Philippines Corp., while removing six firms, namely Crown Asia Chemicals Corp., Energy Development Corp., Holcim Philippines, Inc., Pepsi-Cola Products Philippines, Inc., Pryce Corp., and RFM Corp. Atlas Consolidated Mining and Development Corp. and Century Peak Metals Holdings Corp. entered the mining and oil sector, while Marcventures Holdings, Inc. has been removed from the sub-index. The changes will be implemented on Feb. 19. This is in line with the PSE’s policy that changed the recomposition schedule to February and August, instead of the previous March and September schedules.

The rediscount window offered by the Bangko Sentral ng Pilipinas (BSP) stood untapped in January amid ample money supply held

by banks, just as yields for foreign currency borrowings continued their ascent. Banks did not avail of rediscount loans from the central bank’s facility last month, coming from the P447 million they borrowed in December. No rediscount loans were also recorded in January 2017, BSP data showed. As a practice, banks may borrow from the BSP’s rediscount window in order to meet short-term funding if their usual supply of cash falls short of client demand. This also allows the central bank to fulfill its duty as lender of last resort. The facility lets banks submit promissory notes from outstanding debts as collateral to acquire fresh money supply. The cash — which may come in the peso, dollar or yen — can then be used to grant more loans or service withdrawals. All rediscount loans are charged a uniform rate after the BSP shut down the special window for thrift, rural and cooperative banks in July last year. The central bank removed preferential rates imposed on small lenders due to low availments, with the monetary authority seeing that these players do not need to rely on the facility in order to remain liquid. Two rates are imposed for short-term peso borrowings secured by banks. Loans maturing in 90 days are charged a 3.5625% rate, while 180-day credit lines carry a 3.625% spread. These are computed based on the BSP’s overnight lending rate at 3.5%, plus term premia. For February, rates for dollar loans rose further to 3.77777% for 90-day loans; 3.84027% for 91- to 180-day loans; and 3.90277% for 181- to 360-day loans. These track movements in global financial markets, following a fresh interest rate hike introduced in the United States back in December. On the other hand, margins for yen-denominated borrowings slipped anew to 1.95933% for one to 90-day loans, 2.02183% for 91- to 180-day loans, and 2.08433% for 181- to 360-day loans. The central bank’s rediscount window for foreign currencies still stood unused in January, as it had been throughout 2017. In particular, the facility for dollar-denominated debts has been untapped since June 2015. Central bank officials have said that there remains abundant liquidity in the financial system, leaving local lenders with enough cash to service day-to-day transactions. Domestic liquidity expanded by 11.9% in December, bringing total funds in the local economy to reach P10.6 trillion, according to latest available central bank data.

Foreign direct investments (FDI) to the Philippines surged anew in November amid strong interest in debt instruments and equities,

taking year-to-date inflows beyond the $8 billion expected by the Bangko Sentral ng Pilipinas (BSP). Net FDIs reached $869 million that month, surging 16.9% from the $744 million recorded in November 2016. November inflows, however, were less than half October’s $2.017 billion, according to latest central bank data. FDIs are a key source of capital for the local economy, creating more jobs for Filipinos as these funds fuel business expansion. The strong investment flows brought the 11-month tally to $8.725 billion, a fifth more than the $7.264 billion recorded in 2016’s counterpart period and past BSP’s $8-billion full-year forecast. “The sustained FDI inflows reflected investor confidence given the Philippine economy’s solid macroeconomic fundamentals and growth prospects,” the BSP said in a statement on Monday. Foreign investors preferred placing their bets primarily in debt instruments of their Philippine affiliates for their operation or expansion. These inflows grew by 13.1% year-on-year to $604 million in November, accounting for roughly 70% of net FDIs that month. November also saw equity other than reinvested earnings jump 38.7% to reach $210 million, as $228 million in gross placements eclipsed just $18 million that headed for the exit. Both gross placements and withdrawals, however, saw year-on-year reductions of 47.6% from $434 million and 93.8% from $283 million, respectively. Companies based in Singapore, Hong Kong, Luxembourg, China and the United States were the biggest sources of capital during the month. A chunk of equity investments went to the sectors of manufacturing; real estate; electricity, gas, steam and air-conditioning supply; construction; as well as wholesale and retail trade activities, the central bank said. November also saw reinvested earnings dip 4.3% to $56 million from $58 million the prior year. Two analysts said the Philippines’ robust growth story whetted investor appetite during the period. “Positive economic growth prospects may have prompted foreign investors to increase their FDI stock in the country as exemplified by the large tally for November,” said Angelo B. Taningco, economist at Security Bank Corp. The Philippine Statistics Authority announced on Nov. 16 that the economy grew by 6.9% in the third quarter, beating market expectations. This was later on revised upward to seven percent, while full-year growth for 2017 clocked in at 6.7%, well within the government’s 6.5-7.5% target. “It is possible that strong FDI inflows were sustained in December on the back of foreign investors’ optimism towards the country’s full-year economic performance,” Mr. Taningco added. Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, pointed out that progress in the government’s economic reform agenda may have also spurred investor sentiment. “[T]here has been a significant increase in the country’s net FDI for November 2017 and for the whole of last year as a result of improved investor optimism amid the Duterte administration’s key initiatives — Build, Build, Build Program and TRAIN law — which are expected to support the country’s growth in the next few years,” Mr. Dumalagan said. November saw the Senate approve of the first of up to five planned tax reform packages that was eventually signed into law last Dec. 19 as

BAIPHIL Market Watch – 14 February 2018 Page 3 of 10

Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN). The law, which took effect last month, reduces personal income tax rates for those earning P2 million or lower in a year, to be offset by higher taxes on select goods and services. TRAIN revenues — which are expected to reach P82.3 billion this year — will help fund priority infrastructure projects of the current administration. The entire four to five packages are supposed to contribute about a fourth of the P8 trillion the government needs for its infrastructure drive until 2022, when President Rodrigo R. Duterte ends his six-year term. Currency fluctuations may have also helped convince investors to pour more funds into the country, with the peso trading at an average of P51.0384 versus the dollar in November last year. Mr. Dumalagan said that the FDI tally might have slipped in December as the peso recovered to the P50 level against the greenback.

The Philippine and Japanese governments are set to sign this March the loan agreement for the P356.9-billion Metro Manila subway

project, the Department of Finance (DOF) said. In a press briefing, Finance Secretary Carlos Dominguez said Manila and Tokyo agreed to finalize and sign the first tranche of the loan agreement for the Metro Manila Subway System by next month. “The first tranche for the loan for the Metro Manila subway is due for signing in March 2018. Both sides agreed to work toward the partial operability of the subway line by 2022 at the latest,” Dominguez said during a press briefing after the fourth Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation. However, Dominguez did not specify yet how much of the project cost will be shouldered by the Japanese government. He said the amount would still be finalized before the signing of the agreement. President Duterte and Japan Prime Minister Shinzo Abe witnessed the exchange of notes for the Metro Manila Subway Project on the sidelines of the 31st ASEAN Summit and Related Meetings in Manila last November. The first phase of the Metro Manila Subway project will run from Mindanao Avenue in Quezon City through FTI in Taguig City and end at the Ninoy Aquino International Airport in Paranaque City. The subway will help decongest traffic on EDSA and connect major business centers in Metro Manila to the NAIA, the DOF said. Philippine and Japanese officials visited Cebu this week for the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation. The Philippine side was headed by Dominguez and Socioeconomic Planning Secretary Ernesto Pernia, while the Japanese delegation was headed by Hiroto Izumi, special advisor to Abe. After the meeting, the Bases Conversion and Development Authority (BCDA) inked a Memorandum of Cooperation with the Japan Overseas Infrastructure Investment Corp. for Transport and Urban Development (JOIN) and the Surbana Jurong for the implementation of the New Clark City project. The Department of Information and Communications Technology (DICT) and the Japan Ministry of Internal Affairs and Communications also signed a Memorandum of Cooperation for the technical assistance to be extended by Tokyo for the development of the National Broadband Plan. Meanwhile, Dominguez said both sides confirmed the candidate list of projects proposed for Japanese loan and financing. He said one of these projects is the Arterial Road Bypass Project Phase III, which is also expected to be signed soon as all approvals have been secured on the Philippine side. Dominguez said both sides are also looking forward to the signing of the Exchange of Notes for the Tokyo’s grant financing for the Davao City Waste-to-Energy project, as well as the loan financing packages for the Pasig-Marikina Channel Improvement Project and the MRT-3 Rehabilitation and Improvement Project once all internal approvals are completed. The finance chief said the Philippine government, the Japan International Cooperation Agency (JICA) and the Asian Development Bank (ADB) would continue trilateral consultations on the co-financing of the Philippine National Railway (PNR) North 2 (Malolos to Clark) and South Commuter Line. He said the government is targeting for the partial operability of these railways by 2022. “The Japanese side also discussed developments on the areas of our sectoral cooperation, such as regional development, information and communication and technology, energy, agriculture, environment, public safety (such as anti-illegal drug measures, maritime safety, space technology), and disaster prevention,” Dominguez said.

The Department of Public Works and Highways (DPWH) signed on Tuesday an agreement with Ove Arup & Partners Hong Kong Ltd.

on consulting services covering the Philippines’ infrastructure program. The agreement covers three consulting packages, the DPWH said in an emailed statement. “The Philippine government is embarking on an ambitious, but much-needed infrastructure development program,” DPWH Secretary Mark Villar said. Arup will help the DPWH prepare feasibility studies and detailed engineering designs for inter-island bridges, tunnels, and highways worth more than $11 billion. “A world-class firm like Arup will help our government generate large-scale, state-of-the-art infrastructure projects, optimize public investment, and realize our infrastructure vision,” Villar said. The consultancy services will be financed under the Philippines’ Infrastructure Preparation and Innovation Facility (IPIF) assistance grant from the Asian Development Bank (ADB). “DPWH’s selection of Arup, which has decades of experience in mega transport projects, shows that the Philippine government is becoming increasingly savvy in managing large-scale infrastructure projects,” Hiroaki Yamaguchi, director of the Transport and Communications Division for ADB’s Southeast Asia Department, said. “We expect Arup to share its cutting-edge technology, innovation, and know-how with the government. ADB looks forward to continuing to work with both DPWH and Arup to help the government realize its ambitious projects under the ‘Build, Build, Build’ program,” Yamaguchi said. The government plans to spend more than P8 trillion on the country’s golden age of infrastructure during the six-year term of the Duterte administration, largely funded by tax revenue.

The Philippines advanced for the third straight time in a biennial ranking of countries where the public has the most access to

government budget information, results of the study released Tuesday showed. The Philippines ranked 19th out of 115 countries in the Open Budget Survey of the International Budget Partnership, an advocacy group that works with civil society. The Philippines got a score of 67 out of 100, the highest in Southeast Asia and above the global average of 42, according to the survey results that were released in the Philippines by De La Salle University. Budget Sec. Benjamin Diokno said he would work harder to reform the budget system and improve the Philippines' score in the survey. The Philippines scored 41 out of 100 in terms of public participation in crafting the budget, over thrice the global average of 12. The country is also one of only 4 countries that scored above 40, aside from the United Kingdom, New Zealand and Australia. Congress had the weakest score in terms of allowing public participation in the budget process. It got a score of 8, meaning it offered "few" opportunities. The Executive scored a "limited" 42 while the Commission on Audit had an “adequate” 78. Davao City Rep. Karlo Nograles, who chairs the House committee on appropriations, said the survey showed the government had room to improve, with a budget reform bill pending in Congress. Nograles welcomed the study’s recommendation to hold public debates and stressed the need for the execut ive to submit its medium-term strategy not later than March.

Yuchengco-led Rizal Commercial Banking Corp. grew its net profit last year by 11.4 percent to P4.3 billion, boosted by a strong performance in the fourth quarter. For the fourth quarter alone, RCBC’s net profit surged by 146 percent year-on-year to P904 million, driven by a double-digit growth in both net interest income and other operating income. “The bank is on track and ready to take advantage of the opportunities expected from the favorable business environment in 2018,” RCBC president Gil Buenaventura said in a disclosure to the Philippine Stock Exchange on Tuesday. RCBC’s net interest income for the fourth quarter expanded by 27 percent year-on-year while non-interest income for the period also grew by 19 percent. For the full-year, net interest income rose by 15 percent to P18 billion, as higher margins were accompanied by a double-digit growth in loan volume. Net interest margin for the year improved by 19 basis points to 4.24 percent while the loan book expanded by 16 percent to P353 billion. All loan market segments sustained growth last year but the fastest growing were the high-margin businesses. Small and medium enterprise (SME) loans grew by 39 percent while microfinance lending business through Rizal MicroBank also expanded by 39 percent. Credit card lending grew by 29 percent while overall consumer lending rose by 15 percent. Corporate lending expanded by 12 percent. Fee-based business, on the other hand, amounted to P3.4 billion, accounting for 14 percent of gross income, which in turn reached P25.1 billion. Growth in operating expenses was contained at 2.3 percent to P17.8 billion,

BAIPHIL Market Watch – 14 February 2018 Page 4 of 10

mostly spent for the opening of new branches and deployment of new automated teller machines (ATMs). RCBC opened 27 new branches to end the year with 508 in its network while 74 new ATMs were added to bring total to 1,562 machines. “Our delivery channels are geared up with new branches and improved ATM systems supported by strengthened security systems in anticipation of the increased client activity in 2018. Competition, however, will continue to be strong. The RCBC management understands this all too well and is prepared to address this with a strong sense of urgency, as we pursue our business plans, key initiatives and key transactions this year,” Buenaventura said. RCBC ended last year with a balance sheet of P556.3 billion. On the funding side, deposits rose by 10 percent to P35.3 billion while capital funds amounted to P67.1 billion. Capital adequacy ratio (CAR) stood at 15.47 percent of risk assets while core or tier 1 capital stood at 12.46 percent of risk assets. Both are well above the minimum requirements of 10 percent and 6 percent, respectively. On asset quality, bad loans represented 1.25 percent of total loans at yearend.

United Coconut Planters Bank (UCPB) grew its net profit last year by 22 percent to a record-high P4.08 billion on higher earnings

from core lending and treasury businesses. UCPB president and chief executive officer Higinio Macadaeg Jr. said the bank was now targeting to “sustain the double-digit core earnings growth this year, anchored on the continued expansion of our consumer and middle market lending operations and a greater push to increase non-interest revenues from our other fee-based services like bancassurance.” “As we celebrate the bank’s 55th anniversary in 2018, we will stay the course and do things even better to achieve our strategic direction,” he said. In a press statement on Monday, UCPB’s record performance in 2017 was attributed to the expansion of its loan portfolio and deposit base. The bank ended last year with a P171.7-billion loan book, up by 10 percent from the previous year’s level, as both consumer and corporate loans recorded double-digit growth. On the funding side, deposits also went up by P13.9 billion or 5.2 percent to P279.5 billion from the previous year. The bank said its interest income had grown by 7 percent to P14.2 billion. Non-interest income also increased by 5.2 percent to P2.7 billion, attributed to hefty trading and securities gains and revenues from a newly launched bancassurance business. Launched in April 2017 in partnership with two leading insurance companies, COCOLIFE and UCPB GEN, UCPB’s bancassurance – or cross-selling of insurance products through its branches – was cited as a new and steady income source for the bank. This new business generated P1.05 billion in premiums in only nine months. UCPB expects to double premium production from the bancassurance business following the Bangko Sentral ng Pilipinas’ approval for an offering of variable life insurance, a hybrid life insurance with an investment component. The bank also recently launched its UCPB Visa Debit/EMV card, contributing to the fee income business. This product earned recognition from VISA for obtaining the highest debit card growth in 2017. UCPB was likewise among the first among its banking peers to complete its migration to the EMV technology in 2017.

A P350-billion unsolicited proposal to upgrade the Ninoy Aquino International Airport (NAIA) and transform it into a “world-class” regional aviation hub has been submitted to the government by a consortium comprising seven of the country’s largest conglomerates. In partnership with Changi Airport Consultants Pte. Ltd., a wholly-owned subsidiary of Changi Airports International Pte. Ltd., the proposal has been submitted to the Department of Transportation on Feb. 12. Aboitiz InfraCapital Inc., the Ayalas’ AC Infrastructure Holdings Corp., Andrew Tan-led Alliance Global Group Inc., Lucio Tan-led Asia’s Emerging Dragon Corp., Gotianun-led Filinvest Development Corp., Gokongwei-led JG Summit Holdings Inc. and Metro Pacific Investments Corp. formed what has been tagged as the NAIA “super-consortium.” Changi has been tapped to provide technical support in the areas of master-planning, operations optimization and commercial development at NAIA. The consortium’s proposal is seen to support the government’s ‘build, build, build’ program with its plan to develop NAIA into a world-class facility and a regional air transport hub by upgrading its airside, landside, and air navigation support. This builds on the gains already achieved by the DOTR in terms of improving the traffic of aircraft movements on its runways. The project is divided into two phases. Phase 1 includes improvements and expansion of terminals in the current NAIA land area, while phase 2 involves the development of an additional runway, taxiways, passenger terminals and associated support infrastructure. “Through this proposal, we envision a new NAIA: a fully-integrated premier gateway that we Filipinos can truly be proud of, backed by the know-how of an experienced technical partner and the strong synergy of seven homegrown teams. The message is clear: we need this, and we can get this done,” said consortium spokesperson Jose Emmanuel Reverente. He added that the proposal includes a people mover that would link all three terminals and connect NAIA to the existing mass transport system in Metro Manila, as well as an option for a third runway. “The proposal involves expanding and interconnecting the existing terminals of NAIA, upgrading airside facilities, and developing commercial facilities to increase airline and airport efficiencies, enhance passenger comfort and experience, and improve public perception of NAIA as the country’s premier international gateway,” Reverente noted. Passenger traffic to NAIA is expected to continue to grow significantly over the coming years and the existing runway configuration may be unable to accommodate the future flows. Construction of the additional runway will ensure the ability of NAIA to serve as Manila’s gateway for years to come, bringing potential capacity up to 100 million passengers per year. The upgrades are seen to elevate NAIA to the level of major regional airports such as Changi in Singapore and Suvarnabhumi in Bangkok and will become a viable transit hub for the ASEAN region. “Given the full support and commitment of each of the seven consortium members and the existing infrastructure already in place, the project implementation can be expedited. Immediate enhancements and capacity upgrades can be expected within a couple of years, followed by further expansion to be completed shortly after,” Reverente added.

Philippine Airlines said Tuesday it was looking at opening new routes in Asia and Australia this year, as it expands its fleet while

strengthening its position as a full-service carrier. Prospective destinations include Brisbane in Australia, Sapporo in Japan and New Delhi and Mumbai in India, PAL president Jaime Bautista said. These routes will use the Airbus A321neo, which can fly non-stop up to 8 hours and are equipped with WiFi connectivity, he said. Philippine Airlines will outfit four new Airbus A350-900s jets arriving in June with its most luxurious Business Class service. These planes will fly to Rome, Frankfurt and Paris, said Bautista. The airline recently secured a 4-star rating from Skytrax, a London-based ratings body. The highest possible score is 5 stars, given only to 10 airlines. Bautista said PAL was aiming for a 5-star rating by 2020. The congestion problem in the capital's main airport, however, remains a challenge. "If there is congestion, there will be delays sometimes cancellations and it will really affect our aspiration to be a five-star carrier," he said.

Flag carrier Philippine Airlines on Tuesday said it expects delivery of 15 new aircraft valued at nearly $2 billion starting this year. In

an interview with reporters in Makati City, PAL president and COO Jaime Bautista said the four Airbus A350s, six Airbus A321s, and five Airbus Q400s will be delivered to the airline. “Abutin ‘yun ng mga $2 billion. Almost $2 billion,” he said. “We are taking delivery of more airplanes despite congestion in Manila, but there are other ways ... We are also increasing our presence in Cebu and Davao, and Clark will be a major hub in the coming months,” he said. The government earlier said plans are afoot to decongest the Ninoy Aquino International Airport (NAIA) by moving several aspects of operations to the Clark International Airport. “We are looking at adding international flights out of Clark and Cebu. We have a plan on how we can continue to expand our operations, maximize operations, maximize utilization of airplanes, and fly to more destinations to more airports,” Bautista said.

The Aboitiz and Lopez groups, two of the country’s largest conglomerates, have teamed up to scout for big-ticket construction

projects in the Visayas. Aboitiz Construction Inc. and First Balfour, a unit of Lopez-led First Philippine Holdings, recently signed a memorandum of understanding (MOU) to explore potential project collaborations in the Visayas. The two construction firms have agreed to

BAIPHIL Market Watch – 14 February 2018 Page 5 of 10

exclusively work together, combining their expertise and resources to pursue prospects in the Visayan region, and ultimately secure contracts for successful project execution. “This partnership guarantees resilience and competitiveness as both can leverage on respective strengths,” Aboitiz Construction chair Jaime Jose Aboitiz said in a press statement. Combined, Aboitiz Construction and First Balfour bring to the table almost a century of construction experience. “Both have a strong presence in the country and share the same core values of integrity, teamwork and execution excellence,” a statement issued by Aboitiz Construction said. Aboitiz Construction started in 1975 with its head office in the Visayas while First Balfour started in 1969 with its head office in Luzon. Present during the MOU signing were First Balfour president and chief operating officer Anthony Fernandez, Aboitiz Construction chair Jaime Jose Aboitiz and Aboitiz Construction president and chief operating officer Albert Ignacio Jr.

Jollibee Foods Corp said Tuesday it would raise its stake in US restaurant chain Smashburger to 85 percent, in a $100-million

transaction to be paid in cash. Jollibee said its subsidiary, Bee Good! Inc, would buy from Master LLC an additional 45 percent of Smashburger parent SJBF LLC. Master will retain the ownership balance of 15 percent, Jollibee told the stock exchange. "The transaction, valued at USD 100 million is expected to be completed in one to two months, subject to government approvals in the United States and meeting certain closing conditions. JFC will pay Master through BGI in cash," Jollibee said. Jollibee shares were down 2.12 percent to P277, compared to a 0.32-percent advance in the main index.

Robinsons Land Corp. (RLC) has raised P20 billion from the completion of its stock rights offering (SRO) last week. In a disclosure

to the stock exchange Monday, the Gokongwei-led property developer said the SRO, offered from Feb. 2 to 8, was oversubscribed. A total of 1.1 billion shares priced at P18.20 apiece were sold from the issuance, 1.074 billion of which were sold during the first round, while 25.995 million shares were sourced from the oversubscription option. One rights share was offered for every 3.7217 existing common shares held as of Jan. 31. The offer brings RLC’s total issued and outstanding shares to 5.194 billion, with 3.871 billion held by local shareholders and 1.322 billion owned by foreign investors. RLC looks to use the funds raised from the offer to finance land acquisitions that would support the expansion of its commercial, residential, office, and hospitality businesses. The company booked a single-digit increase in attributable profit in the first nine months of 2017 to P4.56 billion, following flat revenues that stood at P16.64 billion.

SBS Philippines Corp. has completed its P520-million acquisition of a warehouse facility owned by the local unit of multinational

beverage giant The Coca-Cola Corp. In a disclosure to the stock exchange on Monday, SBS said its subsidiary Lence Holdings Corp. (LHC) has closed the transaction on Feb. 9. The acquisition involves warehouse facilities and the property lot of The Coca Cola Export Corp. (TCCEC) — Philippine Branch located in Silangan Industrial Park, Mapagong, Calamba City. The 4.7 hectare-property houses ambient and cold storage facilities, and machinery operated by TCCEC. The lot where the facilities stand, meanwhile, is owned by Benesale Land, Inc. (BLI). Prior to the transaction, LHC signed a share purchase agreement with TCCEC for the purchase of 100% equity interests in BLI, or a total of 27,000 shares. SBS intends to use the warehouse facility as a key distribution center for regional market customers south of Metro Manila. The company noted this will also cut logistics costs and sourcing organizations, thereby providing savings for SBS customers. “Further, this capital expenditure would not only help control residual risks in not owning major logistics facilities but it is also a good investment opportunity to broaden the Company’s asset base,” SBS said. Incorporated in 2001 as a chemical trader and distributor, SBS has since diversified into the real estate sector by making investments in various properties through its subsidiaries. In November 2017, the company created LHC as a unit that will specifically handle investments in warehouse facilities. LHC is 65% owned by SBS and 25% by SBS Holdings and Enterprises Corp. (SHEC), while the remaining 10% is owned by the Sytengco family. Aside from warehouse facilities, SBS has been ramping up acquisitions in the property sector through SHEC, which has already acquired a stake in different firms with properties in Mandaluyong City, Quezon City, and Bacolod City.

Chevrolet Philippines was surprised after recently passed tax reforms made some of their luxury vehicles less expensive, its

president said. Chevrolet Philippines president and managing director Alberto Arcilla said the American carmaker was anticipating that prices of vehicles would rise across the board. "However, it turned out that for the high-end cars, the more expensive cars, the TRAIN (Tax Reform for Acceleration and Inclusion) law actually brought down the price," Arcilla told ANC's The Boss. Prior to TRAIN, vehicles costing over P2.1 million used to be taxed P512,000 plus 60 percent of the excess over P2.1 million. But under TRAIN, vehicles costing P1 million to P4 million would just have a 20 percent tax, while vehicles costing over P4 million would just be taxed 50 percent. The suggested retail price of the Chevrolet Suburban 5.3 4x2 last year was P5,238,888. Under TRAIN, the same vehicle now costs P4,852,888 or P386,000 cheaper. Meanwhile, the Suggested Retail Price (SRP) for the Suburban 5.3 4x4 used to be P6,238,888; under TRAIN, it now costs P5,338,888 or P900,000 cheaper. Arcilla also said the tax reforms also made their pick-up trucks cheaper. "We were surprised that the interpretation of the TRAIN actually gave our pick-up trucks a zero excise [tax]. So, it wasn't something that we were expecting," Arcilla said. He said that because of the tax reforms, they expect more people to buy pick-up trucks instead of fuel-efficient compact cars. "Whereas before, smaller cars like Spark had higher volume, we expect pick-ups will be the ones that people will be looking for and will be purchasing," he said. Chevrolet's compact car Spark 1.4 with manual transmission used to cost P648,888, but after TRAIN now costs P694,888. Meanwhile, its pick-up truck, the Colorado 2.8 4x4, which used to cost P1,704,888, will now cost P1,571,888.

Automobiles sales grew at a markedly slower pace in January — the month higher tax rates took effect — as less passenger cars

were sold compared to a year ago, according to data released by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and by the Truck Manufacturers Association (TMA). The joint CAMPI-TMA report showed automobile sales — covering passenger cars and commercial vehicles — increased by just four percent to 31,645 units from 30,425 in January 2017. January 2018 sales were also a third less than December 2017’s 45,494 units. “We started the year with a modest growth of four percent in January 2018 against the same period last year,” Rommel R. Gutierrez, CAMPI president and Toyota Motor Philippines first vice-president, said in a statement. “While this is considerably low compared to the growth rate of January 2017 (27% up versus January 2016), we still consider January 2018 sales as satisfactory and a good start for the auto industry.” Last month saw Republic Act No. 10963 — or the Tax Reform for Acceleration and Inclusion Act that increased taxes on automobiles, fuel, minerals, various investment products, and a host of other items, besides imposing new levies on sugar-sweetened drinks and others — take effect. Passenger car sales dropped by 10.9% to 9,790 in January — accounting for 30.94% of total sales that month — from 10,984 in the same month last year, and by 31% from December’s 14,182. In contrast, commercial vehicle sales partly made up from the drop in passenger car deliveries, increasing by 12.4% to 21,855 last month — making up 69.06% of the total — from 19,441 units a year ago. Compared to December’s 31,312 units, however, January sales were down 30.2%. Under the commercial vehicle category, sales of: • Asian utility vehicles — which made up 26.59% of commercial vehicle sales in January — slipped by 3.6% to 5,811 units last month from 6,026 in January last year and by 10.2% from December 2017’s 6,472; • light commercial vehicles — which accounted for 69.63% — increased by 23.3% to 15,218 units from 12,340 in January last year, although they were down by 35.1% from December 2017’s 23,434.

BAIPHIL Market Watch – 14 February 2018 Page 6 of 10

Toyota topped other car firms last month, accounting for 41.77% of total sales with 13,217 vehicles sold, though this total was 9.1% less than the year-ago 14,542 and 23.6% less than the 17,307 units it sold in December. Mitsubishi Motors Philippines Corp. ranked second with 6,757 units sold that contributed 21.35% to the total last month, a 36.7% increase from the year-ago 4,942 vehicles but still 1.9% lower than December’s 6,886 vehicles sold. Ford Motor Company Philippines, Inc. was third with an 8.65% share of 2,737, 8.7% more than the 2,519 vehicles sold in January last year but still dropping 40.9% from December 2017’s 4,629. CAMPI and TMA sold 425,673 vehicles last year, 18.4% more than the 359,572 units they sold in 2016. Last year’s increase was slower than the 24.6% expansion clocked for the entire 2016, as well as the 22.9% and 29.5% increases logged in 2015 and 2014, respectively. Automobile deliveries in December alone increased by 33.4% year-on-year to 45,494 units.

ASIA-PACIFIC

Japan’s Nikkei share average gave up early gains and closed at four-month low on Tuesday in choppy trade as investors turned risk averse

again as the yen rose rising against the dollar. The Nikkei ended 0.7 percent lower at 21,244.68 points, its lowest closing level since mid-October. The dollar dropped 0.4 percent to 108.23 yen, moving closer to Friday’s five-month low of 108.05 yen. The broader Topix declined 0.9 percent to 1,716.78.

China stocks rebounded on Tuesday as global equity markets appeared to regain some footing after last week’s heavy sell-off. Sentiment was

also aided by signs of government support and record bank lending in January. At the close, the Shanghai Composite index was up 31.47 points or 1 percent at 3,185.60. The blue-chip CSI300 index was up 1.19 percent, with its financial sector sub-index higher by 1.87 percent, the consumer staples sector up 1.29 percent, the real estate index up 2.77 percent and healthcare sub-index up 0.73 percent. About 15.15 billion shares were traded on the Shanghai exchange, roughly 68.5 percent of the market’s 30-day moving average of 22.12 billion shares a day. The volume in the previous trading session was 15.33 billion.

Hong Kong stocks rose on Tuesday, tracking a global rebound, as some investors sought bargains following last week’s savage sell-off. At

close of trade, the Hang Seng index was up 379.90 points or 1.29 percent at 29,839.53. The Hang Seng China Enterprises index rose 0.88 percent to 12,004.51. The sub-index of the Hang Seng tracking energy shares rose 0.2 percent while the IT sector rose 2.96 percent, the financial sector was 1.38 percent higher and property sector rose 0.54 percent. About 2.79 billion Hang Seng index shares were traded, roughly 85.5 percent of the market’s 30-day moving average of 3.26 billion shares a day. The volume traded in the previous trading session was 2.90 billion.

Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week. U.S. West Texas

Intermediate (WTI) crude futures CLc1 were at $59.44 a barrel at 0103 GMT. That was up 15 cents, or 0.25 percent, from their last settlement. Brent crude futures LCOc1 were at $62.78 per barrel, up 19 cents, or 0.3 percent, from the previous close. Stock markets were roiled last week by some of the sharpest falls on record, shaking confidence across markets. With markets seemingly returning to calmer waters, oil traders said attention was turning to inventory levels to gauge crude supply levels. The private American Petroleum Institute (API) is due to publish crude inventory estimates on Tuesday, while the government U.S. Energy Information Administration (EIA) is set to release its fuel storage and crude production data on Wednesday. On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) said on Monday it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd. The rising consumption is being met by increased output from outside OPEC, the Middle East dominated producer club said. OPEC said the United States and other outside producers would boost supply by 1.4 million bpd this year, up 250,000 bpd from last month and the third consecutive rise from 870,000 bpd in November. OPEC said because of non-OPEC production growth, oil markets would only return to a supply and demand balance “towards the end of this year.” In an effort to tighten markets and prop up prices, OPEC and a group of other producer including Russia have been withholding supplies since 2017. The cuts are scheduled to last through 2018. EIA data shows that world oil markets were in a supply deficit in 2017, due in large part to the OPEC-led supply cuts, but the data shows an expected return of a surplus for large parts of this year.

Japanese Finance Minister Taro Aso said the next central bank governor would need English skills to deal with global financial

issues, an endorsement of media reports incumbent Haruhiko Kuroda will be reappointed for a rare second term. Prime Minister Shinzo Abe said he hasn’t decided yet who to pick as next BOJ governor, but rebuffed calls from an opposition lawmaker to replace Kuroda given the pain the BOJ’s negative interest rate policy was inflicting on commercial banks. “Surveys show banks’ lending attitudes to small- and medium-sized companies remain healthy even after the introduction of negative rates,” Abe told parliament on Tuesday. “I expect the BOJ to continue to take bold steps to achieve price stability in response to movements in prices and the economy,” he said, underscoring dominant market views the transition won’t lead to an early withdrawal of stimulus. Aso told the same parliamentary committee that speaking fluent English was a “very important condition” to head the BOJ, as well as communication skills to explain monetary policy in parliament and the stamina to travel overseas. Formerly head of the Asian Development Bank and top Japanese currency diplomat, Kuroda speaks fluent English and is known to have cultivated deep contacts with global policymakers. Media reports, confirmed by a source, said the government had decided to nominate Kuroda for another five-year term as BOJ head when his current one expires in April. The government is set to present the nomination to parliament later this month, the source said. Many market participants had expected Abe to reappoint Kuroda after the premier frequently publicly praised the governor for creating more jobs and reflating the economy. “Abe’s signals suggest he was requesting Kuroda to serve another term,” said Mari Iwashita, chief market economist at Daiwa Securities. “It’s natural for the government to seek a choice that won’t cause unnecessary turbulence in markets,” she said. Kuroda reiterated on Tuesday the BOJ’s resolve to maintain its massive stimulus programme with inflation still distant from its 2 percent target. The market’s attention is shifting to who will fil l the two deputy BOJ governor posts opening up in March, when the terms of career central banker Hiroshi Nakaso and former academic Kikuo Iwata expire in March. Some media reported that BOJ Executive Director Masayoshi Amamiya, known for masterminding various BOJ policies, will succeed Nakaso. Analysts say the other vacancy will be filled by an advocate of massive monetary and fiscal stimulus measures, such as Abe’s former

BAIPHIL Market Watch – 14 February 2018 Page 7 of 10

aide Etsuro Honda. Kuroda, hand-picked by Abe to pull Japan out of deflation, deployed a huge asset-buying programme in 2013 that helped boost business sentiment but failed to fire up inflation. Subdued inflation forced the BOJ to abandon a policy targeting the pace of money printing in 2016 and shift to yield curve control, which aims to guide short-term interest rates at minus 0.1 percent and long-term rates around zero percent.

The Japanese economy advanced 0.1 percent on quarter in the three months to December of 2017, following a 0.6 percent expansion

in the previous period and slightly below market consensus of a 0.2 percent growth, the preliminary estimate showed. It was the weakest growth rate since a contraction in the fourth quarter 2015. On an annualised basis, the GDP expanded 0.5 percent, compared to a downwardly revised 2.2 percent growth in the third quarter while markets estimated a 0.9 percent expansion. GDP Growth Rate in Japan averaged 0.50 percent from 1980 until 2017, reaching an all time high of 3.20 percent in the second quarter of 1990 and a record low of -4.90 percent in the first quarter of 2009.

The economy of Singapore expanded 3.6 percent year-on-year in the last three months of 2017, below an upwardly revised 5.5

percent rise in the previous quarter which was the highest growth rate in nearly four years. Figures came above market expectations of 3.1 percent, according to final figures. The slowdown from 3Q was mainly explained by slower growth in manufacturing (4.8 percent in Q4 vs 19.1 percent in Q3). Considering full 2017, the GDP advanced 3.6 percent, higher than 2.0 percent in 2016 and the fastest expansion since 2014. The Ministry of Trade and Industry expect GDP growth for 2018 to come in slightly above the middle of the forecast range of 1.5 to 3.5 percent. GDP Annual Growth Rate in Singapore averaged 6.65 percent from 1976 until 2017, reaching an all time high of 19 percent in the second quarter of 2010 and a record low of -8.80 percent in the first quarter of 2009.

REST OF THE WORLD

European markets slid lower on Tuesday. The DAX 30 finished down 86 points, or 0.7%, at 12,197. Also, other major indices across Europe

ended lower, with most sectors moving into the red by the close. The telecoms sector led the decline, after Telenet unexpectedly postponed dividend payments. The FTSE 100 fell 5 points, or 0.1%, to 7,172; the CAC 40 slid 31 points, or 0.6%, to 5,109; the IBEX 35 dropped 120 points, or 1.2%, to 9,651; and the FTSE MIB retreated 302 points, or 1.4%, to 22,034.

Wall Street climbed on Tuesday for a third straight session, buoyed by Amazon.com and Apple, while investors focused on inflation data

on Wednesday that could upset the market’s fragile recovery - or clear the way for additional gains. Investors said data on U.S. consumer prices and retail sales due out on Wednesday will be key to where stocks move in the short term. Inflation and interest-rate fears sparked a stock market rout after U.S. jobs data was released on Feb. 2. Cleveland Fed President Loretta Mester, a voting member in the central bank’s rate-setting committee this year, said the recent stock market sell-off and jump in volatility will not damage the economy’s overall strong prospects. The Dow Jones Industrial Average rose 0.16 percent to end at 24,640.45 points, while the S&P 500 gained 6.94 points to close at 2,662.94. The Nasdaq Composite added 0.45 percent to 7,013.51. Advancing issues outnumbered declining ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers. About 6.4 billion shares changed hands in U.S. exchanges on Friday, below the 8.4 billion daily average over the last 20 sessions.

The Federal Reserve will face growing pressure to accelerate its planned interest-rate increases after a nearly $300-billion spending

package signed into law Friday juices a US economy already souped up on tax cuts. Economists at banks and consulting companies are busy marking up their economic forecasts in response to the legislation, saying it will help lift growth in 2018 to well above the 1.8% rate the Fed reckons is the economy’s long-run potential. “It does shift the risks to the upside” to both growth and inflation, said former Fed official Peter Hooper, who is now chief economist at Deutsche Bank Securities in New York. In their last quarterly projection in December, Fed officials penciled in three rate increases for this year, according to the median forecast in their so-called dot plot. They tacitly reaffirmed that view this week as they played down the economic impact of the recent stock market rout. “So far, I’d say this is small potatoes,” New York Fed President William Dudley said Thursday in a Bloomberg Television and Radio interview. In a note to clients Friday, JPMorgan Chase & Co. chief US economist Michael Feroli raised his forecast for growth this year to 2.6%, from 2.2% previously, and for next year to 1.9% from 1.6%. He also reaffirmed his call that the Fed will raise rates four times this year and next. “We are now more confident that the Fed will need to move more aggressively than either the market or the dots currently anticipate,” said Mr. Feroli, a former Fed researcher. Mr. Hooper said he too is more comfortable with his prediction that the Fed under new Chairman Jerome Powell will boost rates four times in 2018. He reckons that the additional government expenditure will raise growth this year by 0.4 percentage point, potentially lifting Deutsche Bank’s economic growth forecast to 3% in 2018. Mark Zandi, chief economist at Moody’s Analytics Inc., also sees as much as a 0.4 percentage point lift to 2018 growth from the budget package, adding that it comes at a time when the economy is already operating at its limits. “It will fuel inflationary pressures,” Mr. Zandi said in an email. “How much inflation accelerates depends on how aggressively the Fed responds.” Mr. Feroli said the extra growth will drive the unemployment rate even lower. He sees it dropping to 3.2% by the end of next year, from a near 17-year low of 4.1% in January. That would leave joblessness well below the 4.6% level that Fed officials think is sustainable in the long run, according to their December projections. Stephen Stanley, chief economist of Amherst Pierpont Securities LLC, said the Fed could get a little breathing room if the tax cut package lifts the potential growth rate of the economy — as he expects. Mr. Feroli though argued that the central bank may not be able to delay its response to see whether such long-term benefits show through. “The Fed doesn’t have the luxury to wait,” he said.

BAIPHIL Market Watch – 14 February 2018 Page 8 of 10

Enhanced Corporate Governance Guidelines (BSP Cir. 969, 970, 971, 972) (Board of Directors) – 23 Feb 2018

Counterfeit Detection – 23 February 2018

Project Management Fundamentals – 23 February 2018

Asset Liability Management – 24 February 2018

Fraud Risk Management – 24 February 2018

Financial Options – 24 February 2018

BSP Cir. No. 989: Guidelines on the Conduct of Stress Testing Exercises (Session I) – 02 March 2018 (8:30am

to 12:00nn)

BSP Cir. No. 989: Guidelines on the Conduct of Stress Testing Exercises (Session II) – 02 March 2018 (1:00pm

to 5:00pm)

Advanced Project Management (Pre-requisite PM Fundamentals) – 03 March 2018

Signature Verification & Forgery Detection – 3 March 2018 (CEBU CITY)

Process Improvement Specialists Program – 10 & 17 March 2018

Beyond Compliance: Managing Technology and Cyber Security Risk (Highlighting BSP Cir. No. 982: Enhanced

Guidelines on Information Security Management) – 14 March 2018

Enhanced Corporate Governance Guidelines (BSP Cir. Nos. 969, 970, 971, 972) – 16 March 2018

Robotic Process Automation in Banking – An Introduction – 16 March 2018

BSP Cir. 706 as Amended by BSP Cir. No. 950, AMLA Law, and the AML Risk Rating System – 23 March 2018

"Implementing Sound Internal Controls and Validation Process for the ICAAP of Banks" (Guiding Principles of

BSP Circular 639 and 871) - Day 1 – 24 March 2018

Compliance with Operational Risk Management Guidelines – 06 April 2018

Related Party Transactions – 06 April 2018

Estate Planning – 07 April 2018

Defining Process Performance Indicators – 14 April 2018

"Implementing Sound Internal Controls and Validation Process for the ICAAP of Banks" (Guiding Principles of

BSP Circular 639 and 871) - Day 2 – 14 April 2018

Updated Guidelines on Sound Credit Risk Management (Includes Cir 908: Agricultural Value Chain Financing

Framework and BSP Cir 941: Amendments to the Regulations on Past Due and NPLs – 20 & 21 April 2018

Macros Training for Bankers – 20 & 21 April 2018

"Implementing Sound Internal Controls and Validation Process for the ICAAP of Banks" (Guiding Principles of

BSP Circular 639 and 871) - Day 3 – 21 April 2018

A Regulatory Perspective on Trust Activities and Administration (2 Days) – 20 & 27 April 2018

BSP Cir. No. 706 as Amended by BSP Cir. No. 950, AMLA Law, and the AML Risk Rating System (Board of

Directors) – 27 April 2018

Overview of Outsourcing Framework (Knowing the Essentials When Outsourcing) – 04 May 2018

Basic Course on Corporate Governance for Savings and Loan Associations, Rural Banks and Cooperatives –

04 & 05 May 2018

Identity Theft: How To Effectively Combat It – 05 May 2018

Updated Guidelines on Sound Credit Risk Management (Includes Cir. 908: Agricultural Value Chain Financing

Framework and Cir. 941: Amendments to the Regulations on Past Due and NPLs) – 11 & 12 May 2018

Trust Products – 11 & 18 May 2018

Counterfeit Detection – 12 May 2018 (CEBU CITY)

Process Mapping as an Operational Risk Management Tool – 12 & 19 May 2018

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

BAIPHIL Market Watch – 14 February 2018 Page 9 of 10

FEBRUARY 1 - 15

2 Marilou C. Bartolome – Metropolitan Bank & Trust Co

6 Pinky S. Derequito – United Coconut Planters Bank

7 Wilfredo S. Talastas – Associate Life Member

9 Marivic M. Austria – CARD Bank, Inc.

11 Mamerto R. Natividad – J.P. Morgan Chase Bank

14 Gilbert L. Nunag – Philippine Savings Bank

15 Analiza D. De Lumban – Rizal Bank, Inc.

UNICORN - A unicorn is a startup company with a value of over $1 billion. The term "unicorn" was first

popularized by the venture capitalist Aileen Lee, founder of CowboyVC, a seed stage venture capital

fund based in Palo Alto, Calif. In her article, "Welcome to the Unicorn Club: Learning from Billion-Dollar Startups," she looked at software startups founded in the 2000s and estimated that only 0.07% of them ever reach $1 billion valuation. Those that do reach the $1 billion mark are so rare that finding one is as difficult as finding a mythical unicorn. Lee also argued that the first unicorns were founded in the 1990s, Alphabet Inc. (then Google) (GOOG) being the clear "super-unicorn" (valuation of more than $100 billion) of the group. Many unicorns were born in the 2000s, though Facebook Inc. (FB) is the decade's only super-unicorn.

DEFRAGMENT - Defragmenting your hard disk is a great way to boost the performance of your computer. Though the term "defragment" sounds a little abrasive, it is actually a simple and helpful process. After all, a defragmented hard disk is a happy hard disk.

Adding and deleting files from your hard disk is a common task. Unfortunately, this process is not always done very efficiently. For example, when you delete a bunch of little files and add a new large file, the file may get broken up into multiple sections on the hard disk. The computer will still read the newly added file as a single valid file, but the drive will have to scan multiple parts of the disk to read it. Because hard disk seek time is one of the most significant bottlenecks in a computer's performance, this can drag down your computer's speed quite a bit. If you have a ton of "fragmented" files on your hard disk, you might hear extra grinding, sputtering, and other weird noises coming from your computer.

Your computer does not like having fragmented files any more than you do. This is why defragmenting your hard disk is such a good idea. When you start to hear extra grinding sounds, or your computer doesn't open files as quickly as it did before, it's time to defragment. With Windows, you can use the pre-installed Intel defragment program to defragment your hard disk. You can also use a commercial software program like Norton Utilities to defragment your hard disk more efficiently and with more options. For Mac users, a disk utility such as DiskWarrior or Tech Tool Pro is the only way to do it. If you use your computer daily, defragmenting your hard drive once a month should keep the fragment-fiends away.

BAIPHIL Market Watch – 14 February 2018 Page 10 of 10

REFERENCE COMPILED AND PREPARED BY: RESEARCH AND INFORMATION COMMITTEE FY 2017-2018

BPI Asset Management Business World Philippine Daily Inquirer Philippine Star GMA News ABS-CBN News Philippine Stock Exchange Philippine Dealing System Reuters Financial Times

Business Mirror Bloomberg CNN / CNBC SCMP / Japan Times Wall Street Journal Investopedia Goodreads TechTerms IT Information Exchange Life Hacks

Director: Maria Teresita R Dean (China Bank Savings) Chair: Carlota A. Bacani (ANZ Bank) Members: Sheryll K. San Jose (Equicom Savings Bank) 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

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