More positive economic news

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, the Bangko Sentral ng Pilipnas (BSP) is looking at policy moves since the crisis had essentially subsided. The BSP has cut key rates by a total of 2 percentage points to free up liquidity since December last year. The overnight borrowing rate currently stands at record low of 4 percent and the overnight lending rate at 6 percent. With the rate of lending activities surpassing the buildup of bad loans, the BSP recorded improvements in the nonperforming loan (NPL) ratios of the thrift, rural and cooperative banks in the second quarter compared to the previous quarter, though compares dismal to last year's ratios.

The NPL ratios of thrift, rural, and cooperative banks eased by 0.24 percent to 7.47 percent, by 0.09 percent to 10.75 percent, and by 0.22 percent to 8.60 percent, respectively, compared from the first quarter. However, the government blew past this year's Php250 billion budget deficit cap by Php16.1 billion in October due to continued revenue weakness arising from the economic slowdown and legislated tax cuts. The government is banking on asset sales, particularly a stake in San Miguel Corp., to limit the deficit.

Moreover, the country's balance of payment in October is at $896 million, the highest surplus since February, driven mainly by foreign borrowings secured by the government. The October figure was more than three-fourths bigger than the $502 million surplus recorded in September. Major oil industry players completed the round of fuel price increases and detailed proposals for discounts in calamity-hit areas, complying with the directive that assistance packages should come with the lifting of the government-ordered oil price freeze. Independent players, which have also followed the round of price hikes, are reported to offer similar discounts.

Furthermore, according to the same published report, remittances from overseas Filipinos workers amounted to $1.4 billion in September, climbing 8.6 percent from a year ago. Remittances, which largely fuel domestic consumption, surged due to continued strong global demand for professional and skilled Filipino workers as well as the country's hiring arrangements with current and nontraditional markets.

Overall it was also reported that, SM Investments Corp. is confident that the local economy will continue to remain robust in the next five years, as it disclosed its plans to invest as much as Php211 billion on its five core businesses until 2014. While, Eton Properties Philippines, Inc. reports a net income of Php67 million in the period January to September from the substantial construction in most of its projects-a significant rebound from the P120 million loss in the same period of last year. Revenues likewise surged by 2,983 percent to Php1.5 billion during the said period, according to IDEA.

Editor's Note: Mr. Ed F. Limtingco, is the Assistant Vice President of CIBI Information, Inc., a business information and receivables management company. For credit & collection questions and inquiries, he can be reached at 0917-7220521 or email him at [email protected]