Saturday, 21 August 2010

Govt eyes initial $10b for infrastructure projects

by Elaine R. Alanguilan
Manila Standard

The Aquino administration is looking at initially raising $10 billion in “cheap” funds to finance key infrastructure projects through a partnership with the private sector.

Revenue Commissioner Kim Henares said Friday the amount should be enough to jump-start the government’s infrastructure program.

Finance Secretary Cesar Purisima said the government was now working with various multilateral agencies to create a pool of cheap and longer maturity peso-denominated funds.

He said the type of financing would be made available to infrastructure project proponents to lure the private sector. He said part of the amount would be used to finance expenditures of proponents, like right-of-way costs.

Purisima earlier said the government would release the final list of projects in October.

The projects being lined up in the program are those that will support tourism and the food supply chain of the country and general infrastructure.

“One thing we realized it there’s a lot of money out there that’s available to be invested in infrastructure. In fact, they were saying that US [companies] are sitting on over a trillion dollars in uninvested cash because they are not sure with the future of the US economy and they’re actually looking at Asia to start deploying those funds,” said Purisima.

The government said it would identify two to three projects that it wanted to take off within the year.

Deputy director-general Rolando Tungpalan of the National Economic and Development Authority said the projects that the agency would endorse to the Cabinet were ready to go, or pre-processed, to make them more attractive to investors.

He said the government had identified and resolved bottlenecks that could delay the project from taking off.

“We will be guided by the President’s policy pronouncements. We are working on that timeline [within the month]. We are still working on the list, we just don’t want to give out projects that still have bottlenecks. If there are, we want to unplug them before they are pushed,” said Tungpalan.

Meanwhile, the Finance Department is creating an inter-agency task force that will oversee government-owned and -controlled corporations.

Tuesday, 17 August 2010

OF Remittances Continue to Rise in June: Six-Months Level at US$9.1 Billion

Bangko Sentral
Media Release

Remittances from overseas Filipinos (OFs) coursed through banks in the first half of the year amounted to US$9.1 billion, posting a year-on-year growth of 6.9 percent compared to the same period in 2009, BSP Governor Amando M. Tetangco, Jr. announced today. In June alone, remittance flows peaked at US$1.6 billion, reflecting a year-on-year expansion of 8.3 percent boosted by remittances from both sea-based and land-based workers.

The continued deployment of professional and skilled Filipino overseas workers, given favorable global employment opportunities, underpinned the resilience of remittances. Preliminary data obtained from the Philippine Overseas Employment Administration (POEA) indicated that workers classified as new hires with processed contracts and are awaiting deployment rose by 13.5 percent to 212,700 for the period January-June 2010 from 187,338 in the same period last year. Moreover, for the first seven months of the year, approved job orders aggregated 356,878, of which more than a third consisted of processed job orders for service, professional, technical, and production and related workers.

Work prospects overseas for Filipino seafarers were also reported by the Department of Labor and Employment (DOLE) following plans of the Japanese Shipowners’ Association (JSA) to hire 2,000 seabased workers as officers and crew of high-end Japanese vessels in the next two years.

Meanwhile, the continued expansion in the number of banks’ branches, remittance centers and correspondent banks and tie-ups has resulted in the stronger presence of financial institutions abroad, which in turn, helped capture a bigger share of the global remittance market. As of June 2010, these remittance conduits totaled 4,351 compared to 3,730 last year.

The main country sources of remittances were the U.S., Canada, Saudi Arabia, Japan, the U.K., Singapore, United Arab Emirates, and Italy. The combined flows from these countries represented 81.7 percent of the total remittances reported by the banks.

The psychology of stock-market investing

Written by John Mangun
Outside the Box
Business Mirror

For five out of six trading sessions over the last two weeks, the headlines talked about how the stock market had reached its highest level in three years. Then the market turned south and the headlines changed to “Market down on profit-taking.”

While the media are filled with people of good intentions and noble hearts, honestly, you are wasting your time trying to get any worthwhile analysis from those sources. The stock market seems like a simple affair to those outside of the business, and everyone thinks he is an expert on the market. What’s to know and learn about the stock market? It is just some rich people gambling on stocks. Or maybe the market is where people buy at the low and sell when they have made a lot of money or lost a lot of money.

To simplify the stock market either of those ways, is to describe what Manny Pacquiao does as two under-educated muscle men who can’t get a real job so they make money trying to beat each other up.

The better of the stock-market commentators may have even browsed the Internet to learn a little more. Then you read analysis that mentions fear and greed and things like that.

I will not bore you with what the stock market is really all about, since I have done that many times in the past. But let me take you through the psychology of investing that every investor will experience. Perhaps you have already.

You must understand that any time you make a purchase, there are a variety of factors that go into the decision-making process. Ever bought a car? All cars are basically the same in function. You did not walk into the dealership and say, “Here is my check for P1 million. Where is my car?”

I would imagine it probably takes you 20 minutes to buy a shirt or a pair of shoes. Lots of factors and lots of decisions because there are many emotions involved.

Investing in stocks is not about buying. It is about the holding on to your shares. And the emotions and related decisions.

When you buy the car or the shirt, the decisions are over. It is not like you are going to decide two months later that you do not like your shirt, and are going to take it back to Shoemart and say, “I bought this last month for P500, but I do not like it. Here; buy it back from me for P300.”

Likewise, you will not take the car back to the dealer and say, “Hey, everyone thinks this is a great car. I will sell it to you for 20 percent more than I paid for it.”

But that is what being a stock-market investor is like.

In this week’s issue of my Stock-Market Update, I wrote to subscribers that “Honestly, I do not like the market right now for the short term.” How in the world could I say that? Everyone knows how positive I am on the Philippines, the peso and the PSE?!

There are four emotions that the majority of investors will feel at some point (but not at the beginning) during a stock-market rally. These are optimism, excitement, thrill and euphoria (Look at how smart I am!). When we reach the point of euphoria, we have found the Point of Maximum Financial Risk. From there, prices will fall.

Going down, emotions are anxiety denial (“It’s OK. I am a long-term investor”), fear, desperation, panic, capitulation (“How could I have been so wrong?”), and despondency. Now, a stock-market rally will begin with prices going up at this Point of Maximum Financial Opportunity. This is where we were in November 2008.

Every investor knows exactly what he is feeling at any given time. It is deciding on what action makes sense, and then doing something that is the hard part. At the bottom of a market, how can you be feeling “despondency” and yet buy into the market? Most cannot do that. But note this: It is only the losers who held shares too long that are feeling despondent. The smart investors were out long before and are psychologically ready to get back in at the bottom, and that is why they make money and most people do not.

Losing investors always miss the bottom. But as soon as prices rise, they come back, feeling, in turn, depression as they miss the first wave up (November 2008 to May 2009). Then it is hope as they finally buy in, relief as their issues show some profit, and then back to optimism.

The psychology of investors that I have outlined is the big picture of price movement. However, it also applies on a shorter time scale.

On the list of emotions above, “euphoria” is felt at the time of a market high. That is accurate. Nevertheless, another emotion that is ignored by most people who analyze these things is apathy or complacency. During the course of a stock rally (which is what we have right now), investors reach a point when they do not feel any real concern for falling prices.

The market has gone up 15 of the last 18 months. Price have risen 34 of the past 52 weeks. It is easy to be indifferent and satisfied. And that is why I do not like the market for the short term.

If I am right and prices begin to fall, investors will start worrying a little. Remember that market-rally emotion of hope? Hope only comes out of worry and concern. We need a little more concern, which will then get investors to hope prices will go higher in the future, instead of just expecting that stocks will go up. Then prices will go up. And by the way, the market is not down on profit-taking. It is down on because of a lack of buyers feeling some anxiety.

E-mail comments to PSE stock-market information and technical analysis tools provided by Inc.

Gov’t guards vs rice shortfall

Palace may no longer dispose of Arroyo grains surplus due to low palay output
Manila Bulletin

Malacañang on Tuesday said Agriculture Secretary Proceso Alcala would have to reexamine whether the excess rice stocked in the warehouses of the National Food Authority (NFA) would be kept by the government or be disposed off after a forecast showed that the country may experience a shortage of the staple this year as palay output slid by 10.24 percent for the first semester.

“We'll have to see how much the shortfall will be and how much excess rice we have, if we can still use it. The decision on that, I think, will be made by Secretary Alcala,” Secretary Ricky Carandang of the Presidential Communications Development and Strategic Planning Office said in a briefing.

Earlier reports said the government intends to hand out 50,000 tons of the rice surplus to children through the “food-for-work” program and the supplemental feeding project of the Department of Social Welfare and Development (DSWD) in efforts to free up space in the 480 NFA warehouses.

Carandang, however, said the guidelines on the disposition of the excess rice would be known in the coming days with an order from the Executive Secretary's office.

President Benigno S. Aquino III, in his first State-of-the-Nation Address (SoNA) last July 26, accused the administration of former President and now Pampanga Rep. Glora Macapagal-Arroyo of importing more than what was needed. Some of the stocks were rotting, wasting precious government funds, he had said.

But this same “rice surplus” may serve as buffer for the Aquino government with the low palay output in the first semester.

Following Aquino’s SoNA, concerned government agencies such as the DSWD, Department of Budget and Management, Department of the Interior and Local Government (DILG), and the Department of Agriculture then formulated the guidelines on the disposition of the excess rice.