Country’s BOP stood at a surplus in April MANILA, Philippines—The flow of dollars and other foreign currencies into the country outstripped the outflows recorded in April, as remittances and portfolio investments remained robust. The Bangko Sentral ng Pilipinas said the surplus in the country’s balance of payments (BOP) would further boost the country’s foreign exchange reserves, which had been hitting record levels in recent months. BOP is the difference between inflows and outflows of foreign currencies. On Thursday, the BSP reported that the BOP in April stood at a surplus of $1.084 billion, up by 7 percent from the $1.013 billion in the same month last year. This brought the surplus in the first four months of the year to $4.577 billion—doubling the $2.289 billion registered in the same period a year ago. Remittances from Filipinos working abroad continue to grow this year as demand by employers offshore remains significant. Foreign portfolio investments, composed mostly of placements in stocks and bonds, also grew due to investors’ confidence in emerging economies in Asia. Earlier, the central bank reported that the country’s gross international reserves (GIR) in April hit a new record high of $67.8 billion. The reserves would be enough to cover 10.4 months’ worth of the country’s usual imports and would be equivalent to 6.1 times the country’s debts maturing within the short term. GIR indicates a country’s ability to purchase imports, pay its debts to foreign creditors, and engage in other commercial transactions with the rest of the world. The central bank considers the country’s current GIR level to be “comfortable,” and will help maintain confidence of creditors and bond investors in the country. In November, international ratings agency Standard & Poor’s lifted the credit rating it assigned to the Philippines from BB- to BB, citing several factors, particularly the rise in the country’s foreign currency reserves. That rating is two notches below investment grade. BSP Governor Amando Tetangco Jr. had said that the Philippines deserved better ratings, given its rising reserves of foreign currencies and the stability of its banking sector.
The IMF managing director, in a May 18 letter released yesterday, said he was quitting to concentrate on fighting charges that he had sexually assaulted a hotel maid in New York. His arrest last Saturday has sparked a debate over who gets to head the Washington-based global lender. The top IMF post is traditionally held by a European in the same way that an American is named president of the World Bank. "Given the urgent need for stable leadership in the IMF, coupled with the shifting global economic landscape, where in Asia increasingly plays a major role as a growth driver of the global economy, there is no time more fitting than now for an Asian leader to take the helm of such a distinguished organization," Finance Secretary Cesar V. Purisima said in a text message yesterday. There have been "great shifts" in the balance of economic powers and this should be reflected in the structure and composition of the new IMF leadership, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guiniguindo said in a separate text message. Messrs. Purisima and Guiniguindo called for a "new brand of leadership" to enhance the IMF’s legitimacy and relevance in a changing world. This could also be the solution for the Fund at a time when it is "in search of new modalities to prevent new crises," Mr. Guiniguindo said. Central bank Governor Amando M. Tetangco, Jr., for his part, said he did not expect the global lender’s operations to be disrupted the Strauss-Kahn case. "The IMF as an institution is bigger than one man, even its managing director. Its institutional framework is sound," he said in a text message. Still, he said it was time to consider changes to the way its executives are chosen. "I believe the way forward is to have a broader base for selection, not just in the representation at the executive director level at the IMF Executive Board, but also -- and even more so -- for the [managing director] position itself. Diversity should be made an important consideration," he said. The Philippines has 9,049 votes in the IMF, equivalent to 0.41% of the total held by the institution’s member countries. |
U.S. Stocks Advance as Decline in Jobless Claims Boosts Optimism U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a second straight day, as a government report showing a bigger-than-forecast drop in jobless claims bolstered optimism about the economic recovery. LinkedIn Corp., the largest professional-networking website, more than doubled in the first day of trading after its initial public offering.Thermo Fisher Scientific Inc. (TMO) jumped 4.2 percent after agreeing to buy Phadia AB for about $3.5 billion to grow in testing for allergies and autoimmune diseases. Intel Corp. (INTC), KLA-Tencor Corp. (KLAC) and Applied Materials Inc. (AMAT) slumped at least 1.1 percent as Goldman Sachs Group Inc. cut their ratings amid increased competition and excess supply. The S&P 500 advanced 0.2 percent to 1,343.60 at 4 p.m. in New York after yesterday posting the biggest gain in three weeks. The Dow Jones Industrial Average gained 45.14 points, or 0.4 percent, to 12,605.32, erasing an earlier 27-point decline. “The rally will accelerate,” said Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees $358.2 billion. “We had an excellent jobless claims number, which tells me that we’re going to see a solid jobs report. The Fed has indicated that it will be vigilant and watching the pace of jobs recovery. I don’t believe we’ll see a QE3. Still, we’ll continue with easy policy.”
Benchmark 10-year note yields erased gains as New York Fed President William Dudley said the central bank is falling short of its goals because of the modest pace of the recovery, with unemployment too high and headline inflation likely to ease. The government’s $11 billion sale of 10-year inflation-indexed debt drew a lower yield than forecast. “The front-end strength is leading the market today as the economic data continue to underwhelm,” said Scott Graham, head of government bond trading at Bank of Montreal’s BMO Capital Markets unit in Chicago. “People are looking at the Fed, and the headwinds to growth continue to argue for them keeping rates lower for a longer period. We are at this level for a reason.” Two-year note yields dropped three basis points, or 0.03 percentage point, to 0.52 percent at 5:06 p.m. in New York, according to Bloomberg Bond Trader prices. The 0.625 percent security due in April 2013 gained 2/32, or 63 cents per $1,000 face amount, to 100 6/32. The yield touched 0.51 percent on May 17, the lowest level since March 15. The yield on the 10-year note fell one basis point to 3.17 percent after touching 3.24 percent, the highest level since May 12. While the yield dropped to the five-month low of 3.09 percent yesterday, it failed to break its 200-day moving average of 3.08 percent. |
Oil Climbs in New York Trading as Investors Bet U.S. Jobs Support Demand Oil rose in New York as investors speculated a decline yesterday was too much and that a bigger- than-forecast drop in jobless claims signals fuel demand may increase in the world’s biggest crude-consuming nation. Crude for July delivery climbed as much as 0.6 percent today, recovering from a 1.6 percent decline yesterday. Jobless claims fell 29,000 to 409,000 in the week ended May 14, according to the Labor Department. A gauge of the outlook for the next three to six months fell for the first time since June and sales of existing U.S. homes unexpectedly declined. “The market is still divided about the economic numbers out of the States,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year. “The data wasn’t that crash-hot either way. Oil has ‘‘been trying to consolidate all week,’’ he said. Crude for July delivery increased as much as 55 cents to $99.48 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.35 at 10:14 a.m. Sydney time. The June contract gained 43 cents to $98.87. Prices are 0.8 percent lower this week and up 45 percent the past year. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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