BAIPHIL Market Watch – 07 February 2017

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BAIPHIL MARKET WATCH

07 Feb

2017

Legend Improvement / Up Deterioration / Down No Movement

FINANCIAL MARKETS AT A GLANCE

PHILIPPINES

Financial Rates Current Previous

USD/PHP 49.6900 49.7600

30-D PDST-R1 2.2911% 2.2214%

91-D PDST-R1 2.2982% 2.0188%

180-D PDST-R1 2.6786% 2.5304%

1-Y PDST-R1 2.9250% 2.9054%

10-Y PDST-R1 4.9464% 4.7714%

30-D PDST-R2 2.2982% 2.2357%

91-D PDST-R2 2.0144% 2.0192%

180-D PDST-R2 2.6786% 2.5375%

1-Y PDST-R2 2.3005% 2.6343%

10-Y PDST-R2 4.2508% 4.7714%

Stock Index Current Previous

PSEi 7,294.40 7,226.70

Market Cap (Php Trillion) 12.391 12.327

Total Value (Php Billion) 8.217 5.673

PSEi Performers Closing % Change

Top Gainers

Phil Estate Corp 0.37 41.51%

Phil Realty & Holdings 0.90 36.36%

Arthaland Corp 1.40 21.74%

Top Losers

Phil Trust Company 120.00 -15.49%

PTFC Redevelopment 27.35 -11.63%

Manila Mining Corp A 0.01 -8.33%

ASIA-PACIFIC

Stock Index Current Previous

NIKKEI 18,976.71 18,918.20

HANG SENG 23.272.88 23,129.21

SHANGHAI 3,154.78 3,140.65

STRAITS 3,056.91 3,041.94

SET 1.588.68 1,582.95

JAKARTA 5,386.94 5,360.77

Currency Exchange Current Previous

USD/JPY 112.6399 112.7000

USD/HKD 7.7573 7.7575

USD/CNY 6.8615 6.8650

USD/SGD 1.4091 1.4070

USD/THB 35.0300 35.0100

USD/IDR 13,327.00 13,313.00

REST OF THE WORLD

Stock Index Current Previous

FTSEuro First 300 1,423.41 1,436.45

FTSE 100 7,172.15 7,188.30

DAX 11,509.84 11,651.49

CAC 40 4,778.08 4,825.42

DOW JONES 20,052.42 20,071.46

S&P 500 2,292.56 2,297.42

NASDAQ 5,663.55 5,666.77

Various Current Previous

EUR/USD 1.0738 1.0781

GBP/USD 1.2461 1.2485

Gold Spot (USD/oz) 1,233.90 1,219.70

Brent Crude(USD/bbl) 55.72 56.81

3-M US Treasury Yield 0.50% 0.49%

10-Y US Treasury Yield 2.41% 2.49%

30-Y US Treasury Yield 3.05% 3.11%

PHILIPPINES

The local stock barometer rallied closer to the 7,300 mark on Monday, tracking upbeat sentiment in Wall Street and regional

markets. The main-share Philippine Stock Exchange index gained 67.7 points or 0.94 percent to close at 7,294.40. “Philippine markets got

off to a green start as the (US) Dow (Jones Industrial Index) reclaimed 20,000 and the NASDAQ closed at a fresh record high ( on Friday) after President Trump signed an executive order to scale back the 2010 Dodd-Frank financial-overhaul law,” said Luis Gerardo Limlingan, managing director at Regina Capital Development. A massive piece of financial reform legislation passed by the Obama administ ration in

2010 as a response to the financial crisis of 2008, the Dodd-Frank act spelled out measures meant to curb various risks in the U.S. financial system. “A mixed (US) January jobs report – one that delivered stronger than expected payroll additions but also tepid wage growth also provided a tailwind for stocks,” Limlingan said, adding that this raised the possibility that the US Federal Reserve may not

tighten policy in March. Meanwhile, he noted that the surprise hike in interest rate by China’s central bank had little effect on overall market as the aimed to soak up liquidity will help bring some sense into the recent sharp run-up in highly leveraged sectors. At the local market, all counters ended favorably led by the property counter which rose by 1.88 percent, except for the mining/oil counter which is hounded by a

string of mining closure and suspension orders issued by the Department of Environment and Natural Resources. Value turnover for the day amounted to P8.22 billion. Some 97 advancers edged out 91 decliners while 48 stocks were unchanged. Megaworld led the PSEi higher with its 4.95 percent gain, followed by San Miguel, SM Prime and Universal Robina which all advanced by over 2 percent . Ayala

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Land, Metro Pacific, PLDT and Semirara likewise traded over 1 percent higher while SM Investments, AGI and Ayala Corp. also contributed gains. Outside of the PSEi, notable gainers included Philrealty, which surged by 36.36 percent. The property firm recently

graduated from court-assisted corporate rehabilitation. Arthaland also continued to perform well, rising by 21.74 percent as investors continued to scout for alternative property plays outside of the first-liners. On the other hand, GT Capital slid by 1.93 percent while BDO and Metrobank both declined. It was recently reported that 26 of BDO’s branches in Cebu may be padlocked due to the lack of permit. The

bank is seen at odds with the incumbent mayor of Cebu City but the bank assured that since this was a local issue, this has no bearing on the bank’s overall operation.

The Philippine peso strengthened by 0.18%, closing at 49.69, as dollar continued to weaken despite the strong nonfarm payroll results. In the local fixed income market, prices of government securities ended flat with a downward bias as investors sold off along the

belly of the curve (+19 bps DoD) in anticipation of inflation figures. On average, yields rose by 2.43 bps. Factory output continued to post a double digit growth in December, but at a slightly slower pace than in the preceding month

due to a slowdown in food production, a unit of Moody’s Corp. said in a report. Moody’s Analytics said Philippine industrial production growth eased slightly to 12 percent in December from 14.6 percent in November. “The main drag will come from food manufacturing, reflecting the negative effects that Typhoon Lawin had on crop output. Nevertheless, the overall story for the industrial sector remains

positive,” it said. The research arm said electronics manufacturing would accelerate in the coming months amid stronger global demand. In the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries for November, the Volume of Production Index (VoPI) increased 14.6 percent, a marked improvement from the 4.4 percent growth recorded in November 2015. On the other hand, the Value of

Production Index (VaPI) also grew 10.6 percent – a turnaround from the 2.2-percent decline in the same period in 2015. Socioeconomic Planning Secretary Ernesto Pernia earlier said the manufacturing sector was expected to exhibit even stronger growth in December because of increased consumer demand during the Christmas season. Pernia added the country’s manufacturing sector would continue to

benefit from strong private and public investments. “Low inflation, low unemployment, and strong remittances will also continue to drive domestic demand, and will boost manufacturing in the Philippines,” he said. The food subsector registered a volume of product ion growth rate of 24.6 percent, and a value of production growth rate of 26.7 percent from a 10- percent decline in both volume and value last year.

For intermediate goods, production value of petroleum products has been growing steadily for three consecutive months, follow ing consistent declines since 2015. The petroleum subsector posted 80.3 percent and 68.8 percent growth rates for volume and value of production, respectively. For capital goods, the transport equipment subsector posted 40.4 percent growth in production volume and 39.1

percent growth in production value. This growth was supported by local demand for vehicles such as passenger cars, light trucks, and buses.

January inflation seen higher at 2.6-3.1%. Higher prices of food, oil and the so-called “sin” products likely pushed the inflation rate even higher in January to a range of 2.6-3.1 percent, according to economists polled by the Inquirer last week. Metrobank research analyst Pauline May Ann E. Revillas said her forecast of a 2.6-percent year-on-year increase in the prices of basic goods at the

start of the year was due to “mixed movements of food prices and higher gasoline prices.” DBS Bank Ltd. economist Gundy Cahyadi shares the same forecast, while also expecting that the Bangko Sentral ng Pilipinas will likely keep key interest rates steady at the meeting on Thursday of the Monetary Board. “While we have expected the central bank to adjust rates higher early this year, the comments from

various BSP officials suggest that the central bank has little intention to do it now. Still, inflation is on the rise and GDP [gross domestic product] growth momentum is solid. No reason to keep rates at the current low levels although the central bank seems comfortable with the peso on a slightly weaker tone,” Cahyadi said. Following the government’s announcement of the 6.8-percent GDP growth in 2016, BSP

Governor Amando M. Tetangco Jr. said “the inflation outlook also remains manageable” so “there is no pressing need to deviate from the current monetary policy stance.” Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, projected headline inflation to have had increased 2.8 percent in January, “reflecting higher world oil prices after the November decision by Organization of the Petr oleum

Exporting Countries ministers to reduce oil production, which has pushed up retail pr ices of petrol and diesel.” “Higher excise taxes for alcohol and tobacco will also contribute to higher CPI [consumer price index] inflation, although this will be mitigated by s ome reductions in electricity prices. Despite the recent upturn in headline CPI inflation since last August, the year-on-year increase in inflation is expected to

remain within the BSP’s target range of 2-4 percent for 2017.” “However the upturn in world oil prices, recent rises in CPI inflation and continued strong GDP growth are expected to increase BSP’s concerns about upward risks to inflation, with a policy rate hike expected later in 2017,” Biswas added. Land Bank of the Philippines market economist Guian Angelo S. Dumalagan said consumer prices likely

grew 2.9 percent last month on the back of higher oil prices and a weaker peso. Also, “food prices likely accelerated as well because of the lingering effects of the typhoon which hit the country in December,” Dumalagan added, referring to Typhoon “Nina.”

The Asian Development Bank (ADB) reported a 15 percent increase in co-financing for private sector investments in 2016 as more funding for energy, agribusiness and micro finance projects were approved. The Manila-based multilateral development institution said a total of $8.3 billion in financing for private sector projects was mobilized last year, up from $7.2 billion in 2015. Out of its

own resources ADB approved $2.5 billion in new private sector financing in 2016. The amount is expected to increase by $4 billion by 2020, with major expansions in funding for infrastructure, agribusiness, climate change and renewable energy, and inclusive business. ADB accelerated support for energy projects in 2016 with approved financing making up 60 percent of the total for the year. N otable

projects include the $400 million financing for Tangguh LNG in Indonesia and a $1 billion joint ADB sovereign and non-sovereign financing of the Shah Deniz gas project in Azerbaijan. Eight out of 10 private sector energy projects in 2016 were in clean energy, including the first utility scale solar power project in Cambodia by Sunseap and the Muara Laboh geothermal power project in Indonesia. Climate change

financing in the private sector exceeded $1 billion in 2016. ADB also expanded its engagement in the agribusiness sector, financing three transactions, including innovative support for dairy farmers to improve animal waste management in the People’s Republic of China (PRC) and for the introduction of climate-controlled greenhouses for flowers and vegetable production in Viet Nam, Indonesia, and the PRC.

Lending to financial institutions that support micro, small, and medium enterprises, continued to be a major part of ADB’s pr ivate sector portfolio. In 2016, ADB approved 10 transactions in the finance sector valued at over $590 million. “The private sector has a fundamental role to play to help developing Asia create good jobs, build high quality infrastructure, and alleviate poverty. ADB’s 2016 f inancing —

including a record level of cofinancing — shows the importance of bridging the public and private sectors in the region,” said Diwakar Gupta, ADB vice-president for Private Sector and Co-financing Operations. “We will continue to expand our activities in 2017, providing access to more financial solutions and trade facilitation tools while sharing knowledge and expertise to ensure Asia’s development is

sustainable and inclusive,” he added. ADB last year strengthened its co-financing ties with other development institutions to support funding for private infrastructure. This includes the engagement with the Japan International Cooperation Agency (JICA) for the creation of the Leading Asia’s Private Infrastructure Fund (LEAP) which seeks to boost private sector infrastructure investments across Asia and the

Pacific. EAP, is capitalized by $1.5 billion in equity from JICA and will help mobilize some $6 billion in investments.

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China’s top trade officials as well as a business delegation will be in Manila on Feb. 23-24, to firm up financing commitments for

big-ticket infrastructure projects in the country, the Department of Finance (DOF) said. In a statement, Finance Secretary Carlos G. Dominguez III said he told China’s commerce minister Gao Hucheng during the economic managers’ two-day mission to Beijing last month that the Philippines would submit the formal letters for request for the projects being eyed for Chinese government financing when the latter

visits Manila later this month. The Philippine government had pitched a total of 40 infrastructure projects for either funding or technical support by the Chinese government, including the planned railway that will connect Manila to the Bicol region. Trade Secretar y Ramon M. Lopez and Gao will lead the revival of the Joint Commission on Economic and Trade Cooperation (JCETC) of the Philippines and China.

The JCETC was last convened in 2011. Preparations for the JCETC meeting kicked off last November when the Department of Trade and Industry (DTI) hosted a 14-member delegation from China. The DTI earlier said the JCETC would serve as a quick follow-through from the economic agreements signed in Beijing by President Duterte during his visit last October. The JCETC meeting will tackle specific economic

cooperation in trade and investment promotion, manufacturing, infrastructure, tourism, energy, development of micro, small and medium enterprises (MSMEs), agriculture, as well as the crafting of a development program for economic cooperation, the DTI had said. According to Dominguez, 15 projects ranging from small to large were proposed for loan financing. The 25 other projects were being sought

assistance in the conduct of feasibility studies. Among the specific projects pitched to be funded by the Chinese government were the $3.01-billion south line of the North-South Railway; the $374.03-million New Centennial Water Source-Kaliwa Dam Project in Quezon province; as well as the $53.6-million Chico River Pump Irrigation Project in the provinces of Cagayan and Kalinga. The 653-kilometer

south line of the North-South Railway Project, which will consist of commuter railway operations between Tutuban in Manila and Calamba, Laguna, as well as long haul railway operations between Tutuban and Legazpi City in Albay province, is poised to be the biggest public-private partnership (PPP) project to date. The project is currently being reviewed by the Department of Transportation, according to the

PPP Center website. Dominguez had said the Philippines would seek loan financing for these three priority projects under the Export-Import Bank of China’s $3.4-billion assistance to the Philippines. Dominguez said a Chinese business delegation would accompany Gao during the two-day visit. “Ranking Chinese officials have agreed with the delegation on the urgency of implementing projects that Manila

has proposed to China for possible financing under the Duterte presidency,” he said. Also included in the list for considerat ion by the Chinese government were smaller yet easier to implement projects, such as bridges to be built across Pasig River aimed at easing traffic congestion in Metro Manila, according to the DOF.

The Bureau of Internal Revenue (BIR) wants to breach the P1 trillion mark in revenue collection from the country’s largest

corporate taxpayers this year through the implementation of tax administration reforms. In a statement, the Large Taxpayers

Service (LTS) of the BIR said it is targeting to collect P1.105 trillion from 2,320 large corporate taxpayers, or about 60 percent of the bureau’s total collection goal of P1.829 trillion this year. The amount was 14.75 percent higher than last year’s actual collections of P963 billion. Collection from large taxpayers in 2016 slightly missed the P1 trillion target by 3.7 percent, but was 9.31 percent more than the 2015

collection of P881 billion. According to LTS assistant commissioner of Internal Revenue (ACIR) Teresita Angeles, the 2017 goal is “huge but achievable.” To achieve this target, the LTS has committed to support the BIR’s four key strategies – to improve taxpayer satisfaction, protect revenue and recapture public trust, attain collection targets and adopt an expanded settlement program. The LTS said these areas

focus on streamlining business processes, which include the review of issuances, development of an online system for the processing of clearances and accreditation of brokers and importers, simplification of tax forms, reduction of documentary requirements and the expansion of the Internal Revenue Stamp Integrated System (IRSIS). Other initiatives include the implementation of the Attrition Law,

enforcement of disciplinary action against erring personnel, continuation of the Run After Tax Evaders program, tax mapping and the adoption of an expanded compromise program, among others. The BIR is also campaigning to exempt its employees from the Salary Standardization Law. Angeles said the LTS is eyeing to develop a “trillionaire collectors of the bureau” list when the LTS breaches the P1

trillion mark in collections this year. Review the Sin Tax Reform Law first before tackling the proposal to revert to a two-tier excise tax system for cigarettes. This was

the Senate leadership’s order to its ways and means committee, chaired by Sen. Sonny Angara, even as the Lower House already transmitted the railroaded bill seeking to reverse the shift to a unitary excise tax rate this year. Last month, Senate President Aquilino “Koko” Pimentel III, Majority Leader Sen. Franklin Drilon, Minority Leader Sen. Ralph Recto and Sen. Risa Hontiveros signed Senate

Resolution No. 279 directing the committees on ways and means as well as the health and demography, which Hontiveros chairs, to jointly review and assess the implementation of Republic Act No. 10351, or the Sin Tax Reform Law. The resolution was filed to determine if RA 10351 achieved its dual purpose of not only raising additional revenues for the government but also slashing alcohol and tobacco

consumption. Only after the review can the legislative branch ascertain if there will be any need to amend and further streng then the Sin Tax Reform Law, according to the resolution. The proposed amendment is in House Bill No. 4144, which the Lower House passed before Congress went on Christmas break. Pushed by homegrown Mighty Corp., it proposed that the two-tier system be maintained. Separately,

the Bangkok-based Southeast Asia Tobacco Control Alliance said in statement last week that Mighty consultant and former National Economic and Development Authority director general Romulo Neri “inappropriately cited Seatca’s report to buttress his suppor t for a two-tier cigarette excise system as proposed in HB 4144, claiming in recent media reports that a unitary tax on cigarettes is ant i-poor.”

“Tobacco taxation is globally recognized as one of the most effective measures to reduce tobacco use, protect public health and reduce health inequalities. In this regard, economic and public health experts agree that unitary specific taxes bring the most benefit to the health of individuals and societies. In contrast, ad valorem and multitier tax systems are prone to abuse by tobacco companies and make tobacco

products more affordable to the youth and the poor. While the two-tier tax system under HB 4144 may appear more equitable, in reality it will encourage the young and the poor to smoke lower-priced cigarettes, exposing them to the very real risks of addiction, diseases, disability and early death. In other words, a two-tier system is anti-poor,” said Sophapan Ratanachena, Seatca’s tobacco tax program

manager. “Seatca is shocked that a former national economic development chief would claim that tax systems should be designed to allow the poor to maximize their income spent on cigarettes, as if cigarettes are a necessity similar to food, water, clothing and shelter. By denying the clear link between tobacco and ill health and contradicting the fact that good health is a requisite for social development, Mr.

Neri’s statements fly in the face of the Sustainable Development Goals (SDGs) adopted in 2016 by the United Nations to eradic ate poverty and promote human well-being,” said Ulysses Dorotheo, Seatca’s Framework Convention on Tobacco Control program director.

The Government Service Insurance System (GSIS) profit rose by over a fifth to P57 billion last year as revenues rose on improved market conditions. But the state-run pension fund will not rest on its laurels as it eyes more investments in infrastructure, especially renewable power projects, to sustain its fund life. GSIS officer-in-charge Nora Malubay-Saludares told the Inquirer last week that

the 2016 profit improved from P47 billion in 2015 as the losses from investments in bonds and stocks had been trimmed. Revenues reached P152 billion, higher than 2015’s P140 billion. Saludares said the financial markets were down in 2015 and 2016, such that the average return on investment (ROI) from bonds and stocks averaged only 5 percent. This brought the ROI in the last five years to 7-8

percent, still enough to allow the agency to generate more revenues and sustain the fund life up to 2049. In order to further extend the fund life, the GSIS board was looking into ramping up its infrastructure investment, especially in renewable energy projects, wind farms, cold

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storage as well as transport projects, including railways, Saludares said.

Mining stakeholders are now pressuring the Department of Environment and Natural Resources (DENR) to release the audit results after Secretary Gina Lopez vehemently refused to make public the actual documents on the 23 closed and five suspended large-scale mining firms. Mining companies are wary after reports came out that Lopez made decisions in contrast with the actual

recommendations of the Mines and Geosciences Bureau (MGB), the DENR-attached agency that led the audit. “At the end of the day, I make the decisions. Their only play here is to recommend but the mining audit was done on July and it took them so long. MGB has been really slow, I’m not happy with them at all,” Lopez said. The Philippine Mine Safety and Environment Association (PMSEA) said the full

details of the results of the audit has yet to be furnished even to the concerned companies. “In the spirit of transparency and due process, the PMSEA exhorts the DENR to release the results of the mining audit to clear any doubts and air of suspicions,” PMSEA president Louie Sarmiento said. “A lot of people will be affected and will lose their jobs for decisions that are arbitrarily done. The President wants reduction

in poverty and this is not helping in anyway,” he added. Despite calls for from mining stakeholders to release the results, the Environment chief remained firm on her decision. “What’s important here is the decision I made as Cabinet secretary, not the recommendations. I don’t want to show it to you (to the press) whatever it may be,” Lopez said referring to the MGB recommendations. “Just leave it already, I’ve

made my decision. I’m under no obligation to let you know what’s happening here,” she added. The MGB has refused to comment on the issue since the audit result announcement. The Chamber of Mines of the Philippines (COMP) said there is an urgent need to look into the basis of the arbitrary closure and suspension of mines. “The executive branch has been advocating transparency in its policies and

programs and on this basis, we feel we have the right to know the process involved and the results of the audit,” COMP chairman Artemio Disini said. mid issues of lack of due process, the DENR maintained the audit was meticulously observed and the results were anchored on integrity.

The Light Rail Manila Corp.(LRMC) expects to break ground for the LRT-1 extension by the end of February or early March. “As

committed, we are ready to hold groundbreaking by late February or early March,” LRMC president and CEO Rogelio Singson said during

the inauguration of the newly improved Doroteo Jose station yesterday. LRMC, which is composed of Metro Pacific Investments Corp.’s Metro Pacific Light Rail Corp., Ayala Corp.’s AC Infrastructure Holdings Corp., and Macquarie Infrastructure Holdings (Philippines) PTE Ltd., was awarded the P65-billion public-private partnership (PPP) project to operate, maintain and extend the train system. Under the

contract for the PPP project, the LRT-1 which runs from Roosevelt station in Quezon City to Baclaran station in Pasay City will be extended to Bacoor in Cavite. Covering 11.7 kilometers (km), the extension would involve putting up new stations across Pasay City, Paranaque City, Las Piñas City and Cavite. The new stations are: Aseana, Manila International Airport, Asia World, Ninoy Aquino, Dr. Santos, Las

Pinas, Zapote and Niyog. Construction of the extension would be done in phases and LRMC will start with the first phase which covers six km. While LRMC has yet to secure notice to proceed with construction of the extension from the government, Singson said the consortium has already received a permit to enter the site. With the permit to enter, he said LRMC could already fence the area to prevent informal

settlers from coming in, as well as start engineering work. Prior to the start of construction of extension, LRMC has started undertaking improvements on the train line. In particular, it has completed the first phase of the P500 million station improvement project which involves upgrading the LRT-1 stations.

The Bangko Sentral ng Pilipinas (BSP) has laid down the guidelines on the qualification, disqualification, and watchlisting of

directors and officers of pawnshops as part of efforts to weed out erring individuals from the industry . BSP Deputy Governor

Nestor Espenilla Jr. issued Memorandum 2017-003 laying down the central bank’s operational guidelines on the supervision of pawnshops. The guidelines disqualifies persons who have been convicted by final judgment of a court for offenses involving dishonesty or breach of trust such as estafa, embezzlement, extortion, forgery, malversation, swindling, theft, robbery, falsification, bribery, and anti -graft

corruption. Persons sentenced to a maximum imprisonment term of more than six years as well as those convicted for violation of banking laws and those found culpable for a closure of a financial institution are permanently disqualified from becoming director, trustee, officer, or employee of pawnshops. On the other hand, persons who refuse to fully disclose the extent of their business interest or any material

information to the appropriate supervising and examining department are temporarily disqualified from serving pawnshops. Likewise, directors who have been absent or who have not participated in more than 50 percent of all meetings are also temporarily disqualified as well as those who are delinquent in the payment of their obligation. Espenilla said the board of directors or trustees and management of

every pawnshop should be responsible for determining the existence of the ground for disqualification of the pawnshop’s directors/trustees/officer or employee and for reporting the same to the BSP. While the concerned pawnshop may conduct its own investigation and impose appropriate sanction/s as are allowable, he explained this should be without prejudice to the authority of the

Monetary Board to disqualify a pawnshop director/trustee/officer/employee from being elected or appointed as director/trustee/officer in any financial institution under the supervision of the BSP. He added grounds for disqualification made known to the institution should be reported to the appropriate department of the SES of the BSP within 72 hours from knowledge. To provide the BSP with a central

information file to be used as reference in passing upon and reviewing the qualifications of persons elected or appointed as directors/trustees or officer of an institution under the supervisory and regulatory powers of the BSP, the central bank’s Supervision and Examination Sector would maintain a watchlist of permanently and temporary disqualified directors/trustees/officers.

Listed BDO Unibank Inc., the country’s largest bank, yesterday said the city government of Cebu has refused to accept the

bank’s payments for local taxes and fees amid its long standing feud with Mayor Tomas Osmeña. In a statement, the bank owned

by retail and banking magnate Henry Sy said it has complied with all the requirements of the city government. “We have complied with the requirements but, despite that the city government has refused to accept payments for local taxes and fees, and issue the permits contrary to what they did in the past. We have made the necessary arrangements for the clients to be serviced in alternative locations ,” BDO said.

The listed bank apologized to affected clients of the 26 BDO branches in Cebu City. “We would like to apologize for whatever inconvenience the recent threat of branch closures in Cebu City has created,” it added. Early last month, Osmeña filed a comp laint against BDO – Magallanes branch for alleged tax fraud before the Office of the City Prosecutor. According to Osmeña the gross annual revenue of

P400,000 by the BDO – Magallanes branch was not even enough to pay its bank manager. This means, the mayor said, the establishment is only earning around P30,000 per month. The complaint against the country’s largest bank include “other deceits” and falsification by private individuals” under the Revised Penal Code and violation of the City Tax Ordinance. BDO said the issue has no bearing on the

bank’s operations. “This is a local issue and has no bearing whatsoever on the operation of the Bank as a whole,” BDO said. BDO has one of the largest distribution networks, with more than 1,100 operating branches and over 3,600 ATMs nationwide. It also has 26 overseas remittance and representative offices in Asia, Europe, North America and the Middle East. The bank successfully raised P60 billion from a

recently concluded stock rights offering. Aboitiz-led Union Bank of the Philippines is spending P3 billion for its capital expenditure this year amid the implementation of

its transformation strategy. Edwin Bautista, president and COO of UnionBank, said the amount is triple the average annual amount of P1 billion spent over the past few years. Bulk of the total amount would be used for information technology. “With the help of Tata Consulting,

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a few months ago we completed our architecture design and obtained board approval to spend P3 billion in capital expense in 2017 for its implementation. This is three times what we normally spend for capital expense,” Bautista said. UnionBank reported its net income jumped

67 percent to an all-time high of P10.1 billion last year from P6 billion in 2015 due to robust performance across all its segments. “2016 was a great year for UnionBank. It was great because we successfully transitioned to a new business model, actually two years ahead of schedule,” he added. Bautista said the bank is currently digitizing the old organization, trying to mimic a digital bank, and partnering with

“fintechs.” “As of 2017, I am happy to inform you that we have achieved major milestones in this transformation strategy just to show you how serious we are. We have completed our organizational readiness by several strategic hires,” he said. “2016 is going to be a tough act to follow but we are confident the organization will rise to the challenge. We are starting the year with a new product segment that could

contribute significantly to our bottom line and that is bancassurance,” he added. Stores Specialist Inc. and Japan’s Ryohin Keikaku Co. Ltd. are now crafting the business plan to grow the Muji retail business in

the Philippines. In an interview, SSI Group president Anton Huang said it would be able to expand Muji in the Philippines, carry more merchandise, bring down costs and possibly lower the price with the partnership. “We signed the JV agreement so basically the JV takes effect in April this year and under the JV arrangement our costs will be lower which will allow us to carry more merchandise and lower

pricing,” Huang said. SSI and Ryohin agreed to form a joint venture company to be named Muji Philippines Corp. Under the arrangement , SSI would invest P89.2 million for a 51 percent stake in the joint venture while Ryohin Keikaku would invest P85.75 million f or the remaining 49 percent stake. Furthermore, SSI would provide the joint venture with operational knowledge and apparel and retai l sales

expertise while Ryohin would provide brand management expertise. Huang said the two companies are now working on a joint business plan to determine, among others, the number of Muji branches to be opened in the Philippines. Muji carries clothing apparel, household items, food and a wide variety of unique consumer goods. At present, there are at least seven Muji branches in the country. It was

originally founded in Japan in 1980. Mujirushi Ryohin – Muji in Japanese – translates as “no-brand quality goods.” There are around 700 Muji stores around the world, carrying more than 7,000 items ranging from clothing and household goods to food and even houses. But while SSI entered into a joint venture with Ryohin, Huang said this is not necessarily the company’s new business model, noting that an

opportunity simply came about. San Miguel Corp. (SMC), the country’s diversified conglomerate, has acquired another Australian company in a landmark deal

that further expands its foothold in the Oceania region. SMC, through its international packaging business, San Miguel Yamamura Packaging International Ltd. (SMYPIL), has acquired 100 percent of the shares in Portavin Holdings Pty. Ltd. (Portavin), Australia’s leading wine services supplier. Portavin’s business are in four key regions in Australia – New South Wales, South Australia, Victoria and Western

Australia. Portavin bottles more than 80 million bottles per year for over 800 wineries. It is also in trading and distribution of packaging products. SMC president and chief operating officer Ramon Ang said the acquisition allows the conglomerate to expand its pres ence in Australia and New Zealand. The company’s latest international expansion comes on the heels of SMYPIL’s acquisition of the assets of

Endeavour Glass Packaging Ltd., an Auckland, New Zealand-based company that specializes in glass packaging. The company provides packaging solutions to the wine, beverage and food industries. Other recent business acquisitions in the area include the purchase of the assets of Vinocor in 2015, a market leader in the supply of corks and closures for wine bottles in Australasia and Cospak, one of the largest

packaging firms in the region. SMC completed the acquisitions through San Miguel Yamamura Australasia Ltd., SMYPIL’s Australian subsidiary. “These acquisitions will enable our packaging business to further expand in Australia and New Zealand. Por tavin and Endeavour Glass will complement our current packaging operations, Cospak and Vinocor,” Ang said. Moving forward, Ang said the

conglomerate would remain on the lookout for potential acquisitions in the future within and outside the Philippines. “O ther than the Australasian region, we will continue to look for opportunities of growth for our packaging business in the Philippines and abroad,” Ang said. SMC expects revenue to grow by 1.5 times by 2020 compared to 2015. New businesses are seen retaining their contribution to

revenues at 66 percent. In 2015, SMC registered consolidated sales revenue of P674 billion while EBITDA hit P108.6 billion. The revenue contribution of the power business is seen growing to 14 percent by 2020 from 11 percent in 2015 while the contribution of Infrastructure will double to four percent by 2020 from two percent in 2015.

ASIA-PACIFIC

Japan's Nikkei share average rose on Monday as bank stocks climbed following measures ordered by U.S. President Donald Trump to reduce regulation in the financial sector, although a slightly stronger yen kept gains limited. The Nikkei rose 0.3 percent to 18,976.71. The broader Topix gained 0.4 percent to 1,520.42 and the JPX-Nikkei Index 400 added 0.3 percent to 13,618.16. Traders said that most

investors were expected to stay on the sidelines before Japanese Prime Minister Shinzo Abe meets U.S. President Donald Trump on Feb. 10 and 11, with trade and currencies likely to be on the agenda.

China stocks rose on Monday morning, with sentiment helped by reported progress in restructuring state-owned enterprises (SOE), but the rebound was curbed by the central bank's surprise move to raise short-term interest rates late last week. Despite the tightening there were capital outflows to the Hong Kong share market, putting the index on track to break a four-day losing streak, with gains led by

mainland companies. A firmer Wall Street also supported sentiment. The blue-chip CSI300 index rose 0.4 percent, to 3,377.19 points at the end of the morning session, while the Shanghai Composite Index gained 0.5 percent, to 3,154.78 points. The tech-heavy start-up board outperformed, adding 1.3 percent by midday and hitting a three-week high. The Shanghai SOEs Index gained 1 percent by the lunch break,

fuelled by reports that ownership reforms at more than 100 Chinese central government-run enterprises would be completed by the end of this year. But the central bank's unexpected tightening on Friday kept investors cautious. Pan Shaochang, an analyst at Dongguan Securities, expected liquidity conditions in the stock market to tighten, and foresaw some impact on sectors sensitive to interest rate

changes. Insurance firms, heavily invested in fixed income, rebounded on bargain-hunting despite renewed falls in treasury prices.

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Heavyweights China Life Insurance Co Ltd and Ping An Insurance Group Co of China Ltd added 2.3 percent and 1 percent respecti vely. There little market reaction to a private survey showing China's services sector continued to expand in January. In Hong Kong, the

benchmark Hang Seng index added 0.6 percent, to 23,272.88 points, and the Hong Kong China Enterprises Index gained 1.3 percent, to 9,812.52 points. Banks and telecommunication firms among the best performers in the Honk Kong market. Sentiment was helped by rising southbound inflows through the Shanghai-Hong Kong Stock Connect, which used over 27 percent of the daily quota in the previous

session, compared with an average of nearly 11 percent in January. Japanese wages, on an annual inflation-adjusted basis, dropped in December for the first time in a year, government data

showed on Monday, a setback for hopes that consumer spending can increase and help lift economic growth. The decline was caused by a rise in the cost of living, which outpaced nominal pay hikes, officials said. Higher prices for items such as fresh vegetables have increased living costs. The labor ministry data showed inflation-adjusted real wages dropped 0.4 percent in December from a year

earlier, following a revised flat reading in November. In nominal terms, wage earners' cash earnings rose 0.1 percent year-on-year in December, following a 0.5 percent gain in November. Special payments - most of which consist of winter bonus - fell 0.1 percent. The data came as labor unionists and business leaders kick off the annual spring wage negotiations. These are expected to produce smal ler wage

gains than last year due to increased uncertainty on the global outlook. Prime Minister Shinzo Abe has called on business leaders to support a sustainable economic recovery by raising employee wages, but it remains a struggle to accelerate pay hikes despite the tight job market and high corporate profits. Nearly two-thirds of Japanese firms are considering no wage hikes this year, a Reuters poll showed last

month. For the whole of 2016, inflation-adjusted real wages rose 0.7 percent, up for the first time in five years, thanks in part to declines in consumer prices, the labor ministry data showed. Regular pay, which accounts for the bulk of total pay and determines base salaries, increased an annual 0.5 percent in December from a year earlier, rising for a sixth straight month. Overtime pay, a barometer of strength in

corporate activity, fell 1.9 percent in the year to December, down for a seventh consecutive month. The ministry defines "workers" as 1) those who are employed for more than one month at a firm that employs more than five people, or 2) those who are employed on a daily basis or have less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted

at a firm that employs more than five people. Japan Tobacco Inc said it was still confident about the prospect of its Ploom Tech tobacco-based electronic cigarettes, the

launch of which has been delayed due to supply problems, and raised its dividend despite forecasting a lower annual profit. The world's No.3 tobacco company said it would begin selling Ploom Tech in some parts of Tokyo from June, but added a rollout in other cities would start only from the first half of 2018 - later than initially expected. While this could be a setback for Japan Tobacco in its race against

bigger rival Philip Morris for a larger share of the Japanese vaping products market, the former was unfazed and said it planned to pay a dividend of 140 yen ($1.24) per share this year, up almost 8 percent, to underline a "very strong feeling on Ploom Tech's growth" prospects. "We thought we needed to convey this to the stock market," Chief Executive Officer Mitsuomi Koizumi said at an earnings

briefing on Monday. Battery-operated Ploom Tech is a device that uses vapor from heated liquid to deliver to the user the taste of tobacco leaves held in a disposable capsule. Japan Tobacco test launched the product early last year in the southern Japanese city of Fukuoka, following which it ran into supply constraints. The company - whose top brands include Winston, Mevius and Camel - has invested heavily

since then to expand its production capacity of Ploom Tech tobacco capsules. The Tokyo rollout was initially planned for early May this year, but "our test marketing in Fukuoka showed a lot stronger popularity than our expectations. We delayed the launch to avoid the supply shortage", Koizumi said. The Ploom Tech supply crunch last year had allowed Philip Morris to cash in with a nationwide rollout of its "heat

not burn" tobacco product called iQOS, making inroads in a country where Japan Tobacco commands a 61 percent share. Philip Morris' share of the Japanese market rose 1.7 percent to 27.1 percent in 2016. For HeatSticks, the tobacco used for iQOS, the share rose to 7 percent in the final week of December. Tobacco companies, facing falling volumes in developed markets due to higher taxes and growing

health concerns, are betting on e-cigarettes, hoping the lower-risk alternative to smoking could help accelerate growth. The trend is also being helped by the emergence of smoke-free places that allow the use of tobacco e-cigarettes. In Japan, Orix Auto Corp has started a fleet of rental and shared cars that are smoke-free but permit the use of iQOS. Partly because of the growing popularity of tobacco e-

cigarettes, Japan Tobacco expects its domestic cigarettes sales volume to decline by 9.6 percent this year. It expects a 4.7 percent decline in net profit to 402 billion yen in 2017, while 16 analysts on an average expect 418 billion yen, Thomson Reuters data shows.

Growth in China's services sector remained robust in January as companies reported a solid increase in orders, though the pace of expansion eased from the previous month, a private business survey showed. The services PMI fell marginally to 53.1 in January on a seasonally adjusted basis, from 53.4 in December, the Markit/Caixin services purchasing managers' index (PMI) showed. But it

remained well above the 50-mark that separates expansion in activity from contraction on a monthly basis. Improving business conditions prompted service companies to hire staff at the fastest pace in 20 months. The strong reading mirrored improvements in manufacturing surveys last week, giving China's policymakers more room to focus on containing the financial risks from a sharp rise in debt . Though

activity in services slowed slightly from December, strong growth looks set to continue, in line with policymakers efforts to rebalance the economy toward services and consumption, which are the biggest drivers of growth in the world's second-largest economy. Expansion in new business for services firms slowed slightly from December but remained robust. And service firms remained strongly positive about the

business outlook for the next 12 months, citing planned company expansions, new product developments and forecasts of strengthening client demand. A sub-index for business expectations matched an 18-month high with a reading of 60.8. However, input prices rose the fastest in nearly four years. And while companies also raised their output prices the most since August 2015, companies said tough

competition held back their ability to raise prices, suggesting a squeeze in profit margins. Caixin's composite PMI covering both the manufacturing and services sectors showed a similar pattern of solid but slightly easing growth, falling to 52.2 in January f rom the previous month's near 4-year high of 53.5. A number of economists have predicted a loss of growth momentum this year as a property boom cools

and the boost from previous stimulus starts to wear off. Chinese firms are also facing the prospect of higher borrowing costs . The central bank has begun to raise key short-term rates in a sign that policymakers will focus on controlling high debt levels and cooling down overheated property and commodities markets. But the rate increases so far have been modest, suggesting authorities remain wary about

tapping the brakes too hard and stunting economic growth. "The economy continued to recover, but the expansion rate has slowed. Meanwhile, inflationary pressures continued to build up as prices increased further," said Zhengsheng Zhong, direc tor of macroeconomic analysis at CEBM Group, in a note with the PMI data. "The economy is unlikely to maintain the pace of expansion seen in the f ourth quarter

of last year given that the manufacturing sector's willingness to restock has declined. China's economic growth may decelerate after the first quarter of this year."

Foreigners poured funds into South Korea's stock and bond markets in January, official data showed on Monday, signaling a halt for now to the sell-off seen before and after the U.S. Federal Reserve raised interest rates in December. Offshore investors boosted their bond holdings by a net 1.7 trillion won ($1.5 billion) worth in January while they snapped up a net 1.8 trillion won worth of shares, the

Financial Supervisory Service (FSS) said in a statement. It was the first month of bond inflows since July last year and compared with outflows of 0.5 trillion won worth in December. Investors in Asia, Europe and the Americas all raised their bond holdings in January, the

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FSS said, with those in Asia buying the most. The statement said it was the biggest bond inflow since May 2015, thanks to stabilizing foreign exchange rates and a smaller amount of bonds maturing in January compared with previous months. Meanwhile, foreigners bought

South Korean shares for a second straight month, led by investors in the United States and Asia. Those in Europe and the Middle East s old South Korean stocks in January, the FSS said. The data was in line with a high-ranking finance ministry official's comments to Reuters last week that foreign flows seemed to be returning to South Korea after financial markets were jolted by the Fed's rate increase and especially

Donald Trump's stunning victory in November in the U.S. presidential election. As of end-January, foreigners held 32.0 percent of all South Korean shares and 5.7 percent of bonds.

REST OF THE WORLD

U.S. stocks slipped on Monday, led by the energy sector as oil prices dropped, while investors awaited the next run of major earnings

reports and sought further clarity on President Donald Trump's economic policies. The benchmark S&P 500 receded after climbing close to

a record high on Friday. U.S. equities have rallied since Trump's November election, spurred by hopes for fiscal stimulus, lower taxes and fewer regulations under the Republican-led federal government. "The market is starting to come down from its euphoric high and realize that maybe not everything is going to be solved in the first 100 days," said Jake Dollarhide, chief executive of Longbow Asset Management

in Tulsa. "There’s a lot of uncertainty." The Dow Jones Industrial Average .DJI fell 19.04 points, or 0.09 percent, to 20,052.42, the S&P 500 .SPX lost 4.86 points, or 0.21 percent, to 2,292.56 and the Nasdaq Composite .IXIC dropped 3.21 points, or 0.06 percent, to 5,663.55. Goldman Sachs economists said a fiscal boost to the United States is more likely in 2018 than this year because "the balance of risks is

somewhat less positive" one month into 2017 and Trump's growth-boosting agenda could be offset by negative effects of trade and immigration restrictions. "There are concerns regarding the backlash against any protectionist policies that come out of Washington and other countries and investors are seeking clarity," said Adam Sarhan, chief executive officer at 50 Park Investments. Nine of 11 major S&P

sectors ended lower. Energy shares .SPNY fell 0.9 percent as oil prices declined. In earnings news, Hasbro (HAS.O) shares jumped 14.1 percent after the No. 2 U.S. toymaker reported record holiday-quarter revenue. Tyson Foods (TSN.N) fell 3.5 percent. The company disclosed it had received a subpoena from U.S. authorities that it said likely stemmed from allegations the company conspired to fix chicken

prices. Several major companies will report results later in the week, including Gilead Sciences (GILD.O), Walt Disney (DIS.N) and Coca-Cola (KO.N). More than half of S&P 500 companies have reported fourth-quarter results, and about two-thirds of them beat Wall Street expectations, according to Thomson Reuters I/B/E/S. About 6 billion shares changed hands in U.S. exchanges, below the 6.7 billion daily

average over the last 20 sessions. Declining issues outnumbered advancing ones on the NYSE by a 1.63-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored decliners. The S&P 500 posted 15 new 52-week highs and 1 new low; the Nasdaq Composite recorded 108 new highs and 24 new lows.

The European Central Bank rejected U.S. accusations of currency manipulation on Monday and warned that deregulating the

banking industry, now being openly discussed in Washington, could sow the seeds of the next financial crisis. Arguing that lax

regulation had been a key cause of the global financial crisis a decade ago, ECB President Mario Draghi said the idea of easing bank rules was not just worrying but potentially dangerous, threatening the relative stability that has supported the slow but steady recovery. Draghi's words are among the strongest reactions yet from Europe since U.S. President Donald Trump ordered a review of banking rules with the

implicit aim of loosening them. That raises the prospect of the United States pulling out of some international cooperation efforts. "The last thing we need at this point in time is the relaxation of regulation," Draghi told the European Parliament's committee on economic affairs in Brussels. "The idea of repeating the conditions that were in place before the crisis is something that is very worrisome." The ECB

supervises the euro zone's biggest lenders. The speaker of Britain's lower house of parliament said on Monday he would not support any plans for U.S. President Donald

Trump to address parliament during a state visit planned for later this year, citing Trump's temporary immigration ban as a factor. More than 1.8 million people in Britain have signed a petition calling for Trump's planned visit to be canceled or downgraded to avoid embarrassing Queen Elizabeth, part of a grassroots backlash against his immigration policies. Prime Minister Theresa May has defended

the decision to offer a state visit, but more than 150 lawmakers have signed a symbolic motion calling for Trump not to be given the honor of speaking in parliament. Asked by an opposition Labour lawmaker about the possibility of a parliamentary address, House of Commons speaker John Bercow said he shared the concerns. "As far as this place (parliament) is concerned, I feel very strongly that our opposition

to racism and to sexism and our support for equality before the law and an independent judiciary are hugely important considerations," Bercow said, earning a round of applause from lawmakers. Trump's executive order barring entry to the United States for refugees and people from seven Muslim-majority countries has prompted worldwide protests, including by thousands of demonstrators in London. The

temporary immigration ban faced a legal hurdle on Monday that could determine whether he can push through the most controversial and far reaching policy of his first two weeks in office. As one of the key figures whose approval would be needed for a parliamentary address, Bercow said he would oppose any possible move to invite Trump to speak in either of the two locations which host foreign leaders during

state visits. In 2011, Trump's predecessor Barack Obama became the first U.S. president to address both houses of parliament in Westminster Hall, the oldest building in the parliamentary palace, which has also hosted South Africa's Nelson Mandela and France's Charles de Gaulle. "Before the imposition of the migrant ban, I would myself have been strongly opposed to an address by President

Trump in Westminster Hall. After the imposition of the migrant ban by President Trump, I am even more strongly opposed to an address by President Trump in Westminster Hall," Bercow said. "An address by a foreign leader to both houses of parliament is not an automatic right; it is an earned honor."

Pro-Europe MPs' efforts to temper Theresa May's Brexit plan gained traction when a member of her own party broke ranks to

criticize her strategy before parliamentary votes that will test her government's slim majority. A three-day debate on a law giving

May the right to trigger Britain's exit from the European Union begins on Monday, and will be followed by a series of votes on whether to

BAIPHIL Market Watch – 07 February 2017

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attach extra conditions to her plan to start talks by March 31. MPs voted overwhelmingly in favor of the principle of the new law last week, signaling May is unlikely to be blocked outright from triggering Brexit. But, she will need the support of her whole party to approve the

strategy without change. Sunday brought the first signs of internal Conservative Party dissent which, if they spread, could see the law amended, damaging May's authority domestically and potentially giving EU negotiators a powerful lever in the exit talks. "We could be faced with the prospect of leaving the EU by 'falling off a cliff' – as some have described leaving with no deal – with potentially disastrous

economic consequences," MP Neil Carmichael said. May has said parliament will be given a choice between accepting the deal she has reached with the EU, or rejecting it and leaving the bloc without any agreement on issues such as trade and immigration. But, MPs want to be given more influence. "Parliament must have a final say when we get to the end-game," Carmichael wrote in the Mail on Sunday,

arguing that MPs should be able to send May back to the negotiating table. Carmichael is the most outspoken of a handful of c ritics within May's party who could join forces with opposition MPs from the Labour Party and the Scottish National Party to defeat the government. May has a 16-seat working majority, but the actual number of rebels needed to inflict defeat could be higher depending on how smaller

parties and pro-Brexit Labour MPs vote. One source said upwards of 20 Conservative votes might be needed to defeat her. Pro-Brexit MPs were keen to head off the threat of a revolt. "Any vote to amend this simple bill is a vote against the implementation of the referendum result," said Conservative Euroskeptic MP Steve Baker. Baker said there were as many 27 rebels in waiting. A source familiar with the

cross-party talks said that number was higher than their own estimates. So far only Carmichael and one other MP, Anna Soubry, have publicly suggested they might vote against the government.

JPMorgan Chase & Co said on Monday it had received approval and license to underwrite corporate bonds in China's interbank bond market, making it the first U.S.-headquartered bank to do so. The license enables JPMorgan to underwrite debt financing instruments issued by non-financial entities, including commercial papers, medium-term notes and other instruments approved by

regulators, it said. The license was granted by the National Association of Financial Market Institutional Investors (NAFMII) , which oversees the Chinese interbank bond market, said a statement issued by JPMorgan. China is the third largest bond market in the world with 43.7 trillion yuan ($6.37 trillion) outstanding at the end of 2016 with the interbank bond market accounting for over 90 percent, according to

China Central Depository & Clearing Co. In September last year, JPMorgan was granted a business license to operate a fully owned fund management business in China, allowing it to set up an office in Shanghai free-trade zone.

Loan officers at U.S. banks reported largely unchanged lending standards and slightly looser terms for business loans in the last three months of 2016, the Federal Reserve reported on Monday in a quarterly survey. About a third of the 69 institutions surveyed, however, said they had "tightened somewhat" the standards for commercial real estate construction and land development loans, and

close to a fifth had tightened standards on loans secured by multifamily properties. The survey results indicate the effect of the Fed's recent interest rate increase may be falling differently across the economy. About as many loan officers - around 14 percent - reported stronger demand for loans as reported weaker demand. For commercial real estate construction and multifamily loans, large banks in particular

noted ebbing demand, with about a fifth of the 41 large banks in the survey saying that demand weakened at the end of the year.

RA. 10173: Data Privacy Act – Aligning Information Security Compliance to ISO 27001:2013 – 11 February 2017 BSP Cir. No. 706, AMLA Law, RA 10365 and the AML Risk Rating System – 17 February 2017 Solving Problems in the Workplace: Creative Problem Solving & Decision Making – 23 & 24 February 2017 Excel Training for Bankers – 23 & 24 February 2017 Accounting for Non-Accountants with Analysis of Financial Statements – 03 & 04 March 2017 ISO 22316: Organizational Resilience - Moving from Continuity to Resiliency – 8 March 2017 Seven Basic Quality Tools – 8 March 2017 EQ and Leadership for Bankers – 17 March 2017 Compliance with Operational Risk Management Guidelines – 17 March 2017 Related Party Transactions – 17 March 2017 Signature Verification & Forgery Detection – 18 March 2017 Personal Equity and Retirement Account (PERA) – 24 March 2017 Fraud Risk Management – 25 March 2017 Establishing Internal Controls per BSP Cir. No. 871 – SEMINAR TWO – 25 March 2017 BSP Supervisory Process and CAMELS Rating – 7 April 2017 IT Security and Auditing – 8 April 2017 Training the Bank Trainers – 21 & 22 April 2017 Process Mapping as an Operational Risk Management Tools – 22 April 2017 How to Spot Fake IDs and Money Mules – 29 April 2017 Understanding Bank Regulations for Bank Products – 6 & 13 May 2017 Bank’s Taxation – Advanced – 20 May 2017 Counterfeit Detection – 29 May 2017

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

BAIPHIL Market Watch – 07 February 2017

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FEBRUARY 1-15

02 Marilou C. Bartolome - MBTC

06 Pinky S. Derequito - UCPB

07 Wilfredo S. Talastas - Associate Life Member

09 Marivic M. Austria - CARD Bank Inc

11 Mamerto R. Natividad - JP Morgan Chase

13 John Allistair Nicholls - HSBC

14 Gilbert L. Nunag - PS Bank

15 Analiza D. De Lumban - Rizal Bank Inc

DEMONITOZATION - Demonetization is the act of stripping a currency unit of its status as legal

tender. Demonetization is necessary whenever there is a change of national currency. The old unit of

currency must be retired and replaced with a new currency unit.

WORLD’S OLDEST SHOPPING MALL The Grand Bazaar in Istanbul, Turkey is a

place with a rich and extensive past. Widely considered to be history's oldest shopping mall, it occupies 61 covered streets and contains over 3,000

independent vendors that sell everything from carpet to jewelry to spices to souvenirs. Its beginnings date back to the

mid 15th century, when Sultan Mehmet II commissioned it shortly after the Ottoman conquest of Istanbul in 1453. Today, the

Grand Bazaar remains incredibly popular–in 2014, it was the most visited tourist attraction in the world and boasted over

91 million annual shoppers.

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REFERENCE COMPILED AND PREPARED BY: RESEARCH AND INFORMATION COMMITTEE FY 2016-2017

BPI Asset Management Business World Philippine Daily Inquirer Philippine Star GMA News ABS-CBN News Bulletin Today PSE

Reuters Bloomberg CNN Wall Street Journal Investopedia Brainy Quotes Goodreads Corsinet- Trivia

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