RECENT NEWS
Philippines
IMI electric motorcycle deal expected to add momentum to PHL EV manufacturing
Integrated Micro-Electronics (IMI), a subsidiary of Ayala, and California-based Zero Motorcycles signed an agreement covering the production of electric motorcycles, battery, and motor assemblies. The Philippine Department of Trade and Industry said the deal could boost the country's status as an electric vehicle manufacturing hub. The agreement involves IMI producing 18,000 electric motorcycle units per year in Laguna, Philippines, which will provide employment to hundreds of skilled Filipino professionals. The deal is expected to generate $65 million in annual revenue and $250 million worth of investment over the next five years. IMI will subcontract the production operations and electric motorcycle and battery and motor assembly from Zero Motorcycles and mass production is expected to begin by June 2023 in Laguna for export to Europe, Asia, and other markets.
Source: IMI electric motorcycle deal expected to add momentum to PHL EV manufacturing
(May 2, 2023), BusinessWorld Online
IMI electric motorcycle deal expected to add momentum to PHL EV manufacturing
Integrated Micro-Electronics (IMI), a subsidiary of Ayala, and California-based Zero Motorcycles signed an agreement covering the production of electric motorcycles, battery, and motor assemblies. The Philippine Department of Trade and Industry said the deal could boost the country's status as an electric vehicle manufacturing hub. The agreement involves IMI producing 18,000 electric motorcycle units per year in Laguna, Philippines, which will provide employment to hundreds of skilled Filipino professionals. The deal is expected to generate $65 million in annual revenue and $250 million worth of investment over the next five years. IMI will subcontract the production operations and electric motorcycle and battery and motor assembly from Zero Motorcycles and mass production is expected to begin by June 2023 in Laguna for export to Europe, Asia, and other markets.
Source: IMI electric motorcycle deal expected to add momentum to PHL EV manufacturing
(May 2, 2023), BusinessWorld Online
Philippines
Six Philippine conglomerates, US firm propose P100-B NAIA upgrade
The Manila International Airport Consortium, composed of six of the country's biggest conglomerates and US-based Global Infrastructure Partners, submitted an unsolicited proposal to upgrade the Ninoy Aquino International Airport (NAIA) valued at over P100 billion. The proposal includes a significant upfront payment to the government and committed investments in new facilities and technology. The consortium expects the NAIA to serve up to 62.5 million passengers per annum by 2028, more than double its current capacity. Previous proposals by other groups were rejected by the Duterte administration.
Source: Six Philippine conglomerates, US firm propose P100-B NAIA upgrade
(April 28, 2023), BusinessWorld
Six Philippine conglomerates, US firm propose P100-B NAIA upgrade
The Manila International Airport Consortium, composed of six of the country's biggest conglomerates and US-based Global Infrastructure Partners, submitted an unsolicited proposal to upgrade the Ninoy Aquino International Airport (NAIA) valued at over P100 billion. The proposal includes a significant upfront payment to the government and committed investments in new facilities and technology. The consortium expects the NAIA to serve up to 62.5 million passengers per annum by 2028, more than double its current capacity. Previous proposals by other groups were rejected by the Duterte administration.
Source: Six Philippine conglomerates, US firm propose P100-B NAIA upgrade
(April 28, 2023), BusinessWorld
Philippines; Maharlika Investment Fund
US investors keen on Maharlika fund
The proposed Maharlika Investment Fund (MIF) in the Philippines has attracted interest from US business groups and investors, according to Budget Secretary Amenah F. Pangandaman. She mentioned the fund's structure has not yet been finalized, but that the US Business Council was willing to help with the organization of the MIF. Pangandaman suggested that the timing was appropriate because of strong fundamentals, including a supportive political system, presidential backing, legislative co-operation and an open business environment.
Source: US investors keen on Maharlika fund — DBM chief
(April 24, 2023), BusinessWorld
US investors keen on Maharlika fund
The proposed Maharlika Investment Fund (MIF) in the Philippines has attracted interest from US business groups and investors, according to Budget Secretary Amenah F. Pangandaman. She mentioned the fund's structure has not yet been finalized, but that the US Business Council was willing to help with the organization of the MIF. Pangandaman suggested that the timing was appropriate because of strong fundamentals, including a supportive political system, presidential backing, legislative co-operation and an open business environment.
Source: US investors keen on Maharlika fund — DBM chief
(April 24, 2023), BusinessWorld
The financial system
The collapse of First Republic Bank
First Republic Bank has become the latest victim of the US Banking Crisis. The bank's failure is alarming since it was highly successful and not engaged in risky activities. Similar to Silicon Valley Bank, First Republic’s business model did not adapt well to rising interest rates. While SVB’s problem involved Treasuries, First Republic’s problem is mostly with its loan portfolios. Since First Republic provided cheap mortgages to its wealthy clients, it suffered large losses when interest rates climbed. Because of this, First Republic suffered a run on its deposits, resulting in customers withdrawing $100bn in the first quarter. Thus, regulators orchestrated a deal for JPMorgan Chase to acquire First Republic's assets and deposits. Overall, there is a call for the government to stricten restrictions and oversight for banks to avoid more bank failures in the future.
Source: The collapse of First Republic Bank
(May 2, 2023), The Financial Times
The collapse of First Republic Bank
First Republic Bank has become the latest victim of the US Banking Crisis. The bank's failure is alarming since it was highly successful and not engaged in risky activities. Similar to Silicon Valley Bank, First Republic’s business model did not adapt well to rising interest rates. While SVB’s problem involved Treasuries, First Republic’s problem is mostly with its loan portfolios. Since First Republic provided cheap mortgages to its wealthy clients, it suffered large losses when interest rates climbed. Because of this, First Republic suffered a run on its deposits, resulting in customers withdrawing $100bn in the first quarter. Thus, regulators orchestrated a deal for JPMorgan Chase to acquire First Republic's assets and deposits. Overall, there is a call for the government to stricten restrictions and oversight for banks to avoid more bank failures in the future.
Source: The collapse of First Republic Bank
(May 2, 2023), The Financial Times
US banking crisis
US banking crisis pushes gold close to all-time high
Gold prices are nearing all-time highs as resurgent Chinese demand for jewelry, bars, and coins and fears over the health of US regional banks have added fuel to the six-month rally in the precious metal. The buying spree from central banks continued in the first quarter of 2023, picking up a record 228 tonnes of gold despite easing off rampant levels seen in the second half of last year. However, high gold prices have caused some destruction in demand and prompted selling activity in India, where jewelry sales dropped 17% year on year in the first three months of 2023. Gold-backed exchange-traded funds also suffered outflows last year.
Source: US banking crisis pushes gold close to all-time high
(May 5, 2023), The Financial Times
US banking crisis pushes gold close to all-time high
Gold prices are nearing all-time highs as resurgent Chinese demand for jewelry, bars, and coins and fears over the health of US regional banks have added fuel to the six-month rally in the precious metal. The buying spree from central banks continued in the first quarter of 2023, picking up a record 228 tonnes of gold despite easing off rampant levels seen in the second half of last year. However, high gold prices have caused some destruction in demand and prompted selling activity in India, where jewelry sales dropped 17% year on year in the first three months of 2023. Gold-backed exchange-traded funds also suffered outflows last year.
Source: US banking crisis pushes gold close to all-time high
(May 5, 2023), The Financial Times
US economy
US Economy Grew at 1.1% Rate in First Quarter
The US economy grew at a slower pace of 1.1% in Q1 2023, down from 2.6% in the previous quarter, due to weakness in housing and business investment caused by the Federal Reserve's efforts to control inflation through rising interest rates. However, consumers' spending on goods and services, buoyed by a strong job market and rising wages, helped keep the economy from falling into recession. Despite the controlled slowdown, economists warn of possible pullbacks in spending due to weaker confidence and rising debts. The Fed raised interest rates to 5% to combat inflation. He disagreed among staff economists that raising interest rates may lead to a recession, citing America’s strong job market and low unemployment rate.
Source: U.S. Economy Grew at 1.1% Rate in First Quarter
(April 27, 2023), The New York Times
US Economy Grew at 1.1% Rate in First Quarter
The US economy grew at a slower pace of 1.1% in Q1 2023, down from 2.6% in the previous quarter, due to weakness in housing and business investment caused by the Federal Reserve's efforts to control inflation through rising interest rates. However, consumers' spending on goods and services, buoyed by a strong job market and rising wages, helped keep the economy from falling into recession. Despite the controlled slowdown, economists warn of possible pullbacks in spending due to weaker confidence and rising debts. The Fed raised interest rates to 5% to combat inflation. He disagreed among staff economists that raising interest rates may lead to a recession, citing America’s strong job market and low unemployment rate.
Source: U.S. Economy Grew at 1.1% Rate in First Quarter
(April 27, 2023), The New York Times
US economy
Car Dealer Markups Helped Drive US Inflation, Study Finds
Current inflationary pressures in the US may have been partially fueled by markups on new cars, according to a study published in the U.S. Bureau of Labor Statistics journal. In particular, raised markups on cars may have contributed between 0.3 to 0.7 percentage points of the near 16 percent increase in the consumer-price index between late 2019 and late 2022. A further study by the Federal Reserve Bank of Kansas City posited that markups across industries accounted for more than half of the United States’ inflation back in 2021, because of firms increasing prices in anticipation of costs increasing at a later time.
Source: Car Dealer Markups Helped Drive Inflation, Study Finds - WSJ
(April 23, 2023), The New York Times
Car Dealer Markups Helped Drive US Inflation, Study Finds
Current inflationary pressures in the US may have been partially fueled by markups on new cars, according to a study published in the U.S. Bureau of Labor Statistics journal. In particular, raised markups on cars may have contributed between 0.3 to 0.7 percentage points of the near 16 percent increase in the consumer-price index between late 2019 and late 2022. A further study by the Federal Reserve Bank of Kansas City posited that markups across industries accounted for more than half of the United States’ inflation back in 2021, because of firms increasing prices in anticipation of costs increasing at a later time.
Source: Car Dealer Markups Helped Drive Inflation, Study Finds - WSJ
(April 23, 2023), The New York Times
Inflation
Companies’ cost inflation is slowing but shoppers may wait for lower prices
Companies like Nestle, Procter & Gamble, Reckitt Benckiser and Danone continued to raise prices sharply in the first quarter even though input costs are easing. Top consumer goods companies are paying less for raw materials and energy, but it may take time before shoppers see significantly lower price tags for household goods. Cost inflation rose during the COVID-19 pandemic, but cost of goods inflation is expected to be lower this year. While companies have raised prices in recent quarters, it is unclear when they may start passing on some of their lower costs to customers. The European Central Bank is concerned that if food inflation keeps accelerating, it will have an outsized impact on consumers’ inflation perception, potentially changing spending behavior, pressuring wage demands and impacting interest rates.
Source: Companies’ cost inflation is slowing but shoppers may wait for lower prices
(April 27, 2023), BusinessWorld
Companies’ cost inflation is slowing but shoppers may wait for lower prices
Companies like Nestle, Procter & Gamble, Reckitt Benckiser and Danone continued to raise prices sharply in the first quarter even though input costs are easing. Top consumer goods companies are paying less for raw materials and energy, but it may take time before shoppers see significantly lower price tags for household goods. Cost inflation rose during the COVID-19 pandemic, but cost of goods inflation is expected to be lower this year. While companies have raised prices in recent quarters, it is unclear when they may start passing on some of their lower costs to customers. The European Central Bank is concerned that if food inflation keeps accelerating, it will have an outsized impact on consumers’ inflation perception, potentially changing spending behavior, pressuring wage demands and impacting interest rates.
Source: Companies’ cost inflation is slowing but shoppers may wait for lower prices
(April 27, 2023), BusinessWorld
China debt relief
Pressure Mounts on China to Offer Debt Relief to Poor Countries Facing Default
China has indicated that it is prepared to make concessions that could unlock a global effort to restructure hundreds of billions of dollars of debt owed by poor countries. China has lent more than $500 billion to developing countries through its lending program, making it one of the world's largest creditors. Many of those countries, including several in Africa, have struggled economically in the wake of the pandemic and face the possibility of defaulting on their debt payments. China has been reluctant to take losses on debt and has pushed for other lenders to incur losses.
Source: Pressure Mounts on China to Offer Debt Relief to Poor Countries Facing Default
(April 14, 2023), The New York Times
Contributors:
Natasha Amber Cabiltes
Edgar Desher Empeño
Jose Lorenzo Mercado
Brendan Emmanuel Miranda
Jacobe Joaquin Sevilla
Pressure Mounts on China to Offer Debt Relief to Poor Countries Facing Default
China has indicated that it is prepared to make concessions that could unlock a global effort to restructure hundreds of billions of dollars of debt owed by poor countries. China has lent more than $500 billion to developing countries through its lending program, making it one of the world's largest creditors. Many of those countries, including several in Africa, have struggled economically in the wake of the pandemic and face the possibility of defaulting on their debt payments. China has been reluctant to take losses on debt and has pushed for other lenders to incur losses.
Source: Pressure Mounts on China to Offer Debt Relief to Poor Countries Facing Default
(April 14, 2023), The New York Times
Contributors:
Natasha Amber Cabiltes
Edgar Desher Empeño
Jose Lorenzo Mercado
Brendan Emmanuel Miranda
Jacobe Joaquin Sevilla