More economic news that matter

I received my latest copy of IDEA’s NewsBriefs, a regular digest produced by the Institute for Development and Econometric Analysis, Inc. (IDEA) whose Chairman, Dr. Cayetano W. Paderanga Jr., is my former President/CEO. IDEA’s NewsBriefs’ purpose is to highlight the most recent national and international economic events. The following are several economic news pertaining to banking, financial, fiscal and corporate sectors as this news really matter.

According to IDEA, the Senate banking and financial committee has approved of a doubling of the amount of deposits of Filipino savers insured by the Philippine Deposit Insurance Corporation to a maximum of Php500,000.00 per account. Furthermore, Asiatrust Bank reported that it did not receive Rizal Commercial Banking Corporation’s acquisition bid. Hence, no price tag for the acquisition was disclosed between the two parties. Then, the Bangko Sentral ng Pilipinas reported an increase in the number of nonperforming loans (NPL) of local banks for January and October this year. Currently, 4.56% of total loans are NPLs, up from 4.49% of last month.

However, the government is optimistic in making to its tax effort goals for the year, accumulating about 14.56% of the GDP for the past ten months from January. The government aims to reach 14.6% GDP by the end of 2008. Another interesting piece of news is that, a new 20% soft drink excise tax bill was on hearing last week. With such, soft drink companies were not happy with the new bill as the tax would just be passed on to consumers. Then, flour prices were expected to go down next year, as tariff cuts on wheat would be enacted on February 2009. Flour prices are currently around Php870.00-900.00. Moreover, another round of price cuts on oil and cooking gas were executed this week. Price ranges for LPG 11kg-tank were around Php440.40-570.40, diesel was around Php34.47-43.50 per liter, and gasoline was around Php35.57-41.85.

In other sectors, it was reported that mineral output was down in the third quarter due to low nickel prices and increased energy costs of production, which discouraged the growth of the industry. Third quarter figures were around Php 17 billion, a 24% drop from last year’s production. While the gross international reserves (GIR) were slowly dwindling, now at US$35.7 billion, the lowest level since February. Analysts are worried that the GIR are being used to save the weakening peso, but the Central Bank comforted anxiety that they will keep an eye on its levels.

Finally, it was reported that the government is courting foreign textile and garment firms to invest in Clark Field Economic Zone by offering tax incentives and duty-free importation. Local industry exporters are satisfied with the idea, as long as they are assured that no other benefits are offered to their counterparts.

Overall, the government is optimistic with the export outlook of the country next year, forecasting double digit growth on both merchandise exports and services exports such as outsourcing. or credit & collection (C&C) questions, comments and rejoinders you want to share or inquire, you can reach him at 0917-7220521 or at [email protected]