Gov’t raises at least P79B from RTBs GOCCs, institutional buyers allotted P20B each
The BTr repeatedly raised the daily offer for the RTBs given the strong demand during the first three days of offer, allowing authorized banks to sell up to P11 billion on Tuesday, P16.15 billion on Wednesday and P17.74 billion on Thursday last week. Underwriters have urged the government to award at least P100 billion for the its 13th issue of RTBs, which are aimed at small investors who could put out a minimum investment of P5,000. Also last week, the Treasury awarded to institutional buyers P10 billion on each tenor to set the price for the RTBs. The five-year RTBs fetched a coupon of 6 percent while the 10-year bonds got 7.375 percent. Interest is paid every quarter, but the amount is subject to a 20-percent withholding tax. Government-owned and -controlled corporations were also allotted a total of P20 billion worth of the latest RTBs. In a related development, National Treasurer Roberto B. Tan said the Treasury cancelled the auction for regular five-year bonds scheduled on March 1 to facilitate the smooth and orderly settlement of the current RTB offering. There were 11 authorized selling agents, including Allied Banking Corp., BDO Capital, BDO Universal Bank, BPI Capital, China Bank, Deutsche Bank, First Metro Investment Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Rizal Commercial Banking Corp. and United Coconut Planters Bank. Also named as issue managers for the 13th installment of RTBs were BPI Capital, Development Bank of the Philippines, Landbank, Metrobank and FMIC.
The tax bureau issued Revenue Regulations (RR) 1-2011 late last month "to clarify who are considered as OCW (overseas contract worker) or OFW for taxation purposes and to define the tax treatment of their income earned within and without the Philippines..." BIR Commissioner Kim S. Henares said, "There is no problem with OFWs . It’s just that we did not have an RR concerning OFWs before so we issued it." "An RR is an interpretation of the provisions of the NIRC (National Internal Revenue Code) ... We just want to inform them," she added. OCWs/OFWs were defined as Filipino citizens "who are physically present in a foreign country as a consequence of their employment thereat." The BIR regulation states that a citizen "working and deriving income from abroad as an overseas contract worker is taxable only on income derived from sources within the Philippines." "Thus an OCW or OFW’s income arising out of his overseas employment is exempt from income tax," it adds. Money earned from "business activities and properties in the Philippines", however, will be subject to income taxes. Based on the NIRC, incomes of "not over P10,000" will be taxed 5%, rising to a maximum of 32% for earnings of "over P500,000." Sales of OFW-owned businesses in the country will also be charged the 12% value-added tax. "[I]f gross annual sales and/or receipts do not exceed ... P1.5 million and he opted not to register as a VAT taxpayer, he shall be liable instead to pay 3% percentage tax" quarterly. Passive earnings will be subject to the 20% final tax on interest income from bank deposits, royalties and prizes, and the 10% final tax on royalties related to books, literary works, and musical compositions as well as on cash and property dividends, among others. If a bank account is held jointly by an OFW and a spouse residing in the Philippines, 50% of the interest income will be subject to a 7.5% withholding tax. RR 1-2011 also quotes the Migrant Workers Act of 1995 which exempts OFWs from payment of travel tax and airport fee. "The remittances of all OCWs or OFWs ... shall [also] be exempt from the paying of documentary stamp tax," the regulation states. -- P. P. Magtulis |
U.S. Stocks Drop as Oil’s Jump Overshadows Manufacturing Growth U.S. stocks tumbled, sending the Standard & Poor’s 500 Index to its first drop in three days, as concern that rising energy costs will hurt the economic recovery overshadowed the fastest manufacturing growth since 2004. Alcoa Inc. and General Electric Co. slumped at least 3.2 percent as crude exceeded $100 a barrel amid escalating unrest in the Middle East and northern Africa. Fifth Third Bancorp dropped 4.5 percent after receiving a subpoena from the Securities and Exchange Commission for information on commercial loans. Carnival Corp. slid 6.1 percent after the chief operating officer of the largest cruise-line operator sold 180,000 shares. The S&P 500 fell 1.6 percent to 1,306.33 at 4 p.m. in New York. The gauge slid 1.7 percent last week as anti-government uprisings in Libya pushed oil prices higher. The Dow Jones Industrial Average dropped 168.32 points, or 1.4 percent, to 12,058.02 today. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, surged 15 percent to 21.01. “Anyone who thinks that a year from now we’re going to look at the Middle East and see nothing but candy and roses, that’s not going to happen,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees $9.5 billion. “Manufacturing, the overall U.S. economy, is doing very well. Still, that geopolitical situation will be an overhang.”
Ten-year note yields earlier reached the highest in four days after Federal Reserve Chairman Ben S. Bernanke acknowledged inflation gains from higher oil prices and a report showed U.S. manufacturing grew at the fastest rate in almost seven years. The central bank bought $1.9 billion of Treasuries maturing from August 2028 to February 2041 as part of its plan to support the recovery. “The effect on growth from sustained higher oil prices are likely to take some steam out of the economy and it’s causing Treasuries to stay bid,” said Christopher Sullivan, who oversees $1.7 billion as chief investment officer at United Nations Federal Credit Union in New York. “No one has any idea the extent of the current Middle East unrest and how it might spread toward other oil producing countries likeIran.” Ten-year yields fell three basis points to 3.4 percent at 5:01 p.m. in New York, according to BGCantor Market Data. The price of the 3.625 percent security maturing in February 2021 rose 9/32, or $2.81 per $1,000 of face value, to 101 29/32. The yield touched 3.49 percent, the most since Feb. 24. Thirty-year bond yields fell two basis points to 4.48 percent, after reaching as high as 4.55 percent. Two-year notes fell four basis points to 0.64 percent, touching the least since Feb. 2. |
Oil Surges to Highest Price in 29 Months on Mideast Unrest, Supply Concern Oil surged to the highest level since September 2008 as Middle East turmoil threatened to spread from Libya to top OPEC producersSaudi Arabia and Iran. Crude jumped 2.7 percent as Libyan rebels braced for renewed clashes with forces loyal to leader Muammar Qaddafi. Saudi Arabia’s benchmark stock index plunged the most since November 2008 on concern regional unrest would extend to the kingdom, and Iranian protesters clashed with security forces in Tehran, Al Arabiya television reported. “All over the region, things are keeping the market very nervous,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Right now in this Middle East situation there’s no real end in sight.” Oil for April delivery rose $2.66 to $99.63 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 30, 2008. Prices jumped 5.2 percent in February and have risen 27 percent in the past year. Oil touched $100.68 a barrel at 4:11 p.m. in electronic trading after the settlement. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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