PPP projects sure of perks ... to make up half of investment priorities list this year INFRASTRUCTURE projects under the administration’s public-private partnership (PPP) program are expected to make up roughly half of the ventures qualified for incentives this year, as many other business activities will no longer be granted tax perks, Board of Investments (BoI) Managing Head Cristino L. Panlilio said. The BoI is thus unlikely to match the P301-billion value of investments qualified for tax perks in 2010 -- the final official tally -- under current plans to stop granting tax breaks to several projects, including pricier types of mass housing, Mr. Panlilio said. "PPP projects will account for maybe half," Mr. Panlilio said in an interview on Friday after a public consultation on the draft 2011 Investment Priorities Plan (IPP). The draft offers incentives like income tax holidays and duty-free importation of equipment to firms undertaking "solicited projects under the PPP program of the government" -- referring to the list unveiled by the administration in November last year that included toll roads, rail systems, and even hospitals and irrigation networks. Energy projects, which have been retained in the draft, are also likely to make up a bulk of the qualified investments this year, Mr. Panlilio said. Less than last year But due to proposed delisting of several other project types, the BoI is not expected to match the 2010 tally which hit P301 billion, he said, citing the latest revised total for last year. The 2010 total was 93.7% more than the year-ago figure. "It will be lower because a lot have been taken out [of this year’s list of qualified projects]," Mr. Panlilio said. Mass housing projects that sell units costing more than P2 million each may no longer be eligible, since the BoI is considering lowering the price ceiling from P3 million, officials had said at the Friday consultation. The manufacture of cement, steel, fertilizer and small boats has also been removed from the draft list, along with "green" services such as building retrofitting consultancies that seek to reduce energy consumption. The relocation of oil depots has also been dropped, prodding a Petron Corp. representative to speak up at the consultation. The firm’s representative pressed the BoI to retain this item on the list, arguing that the oil refiner had been delayed from relocating last year due to the difficulty of finding a suitable alternative site. This comes amid pressure on oil refiners to move out of the Pandacan depot in Manila due to persistent fears over safety and environmental concerns. BoI officials took note of the comments and said position papers will be accepted until Jan. 13. The state agency hopes to finalize the IPP by February, Mr. Panlilio said. For now, projects retained on the proposed list for this year are those involving: agribusiness, creative industries and information technology services, shipbuilding, mass housing, energy, infrastructure (particularly those covering transport, water systems, logistics, waste management, and pipeline projects for oil and gas), research and development, green projects, tourism, solicited public-private partnership projects, motor vehicle and parts manufacturing, as well as "strategic" projects that "exhibit very high social economic returns." |
Stocks brace for earnings test NEW YORK (CNNMoney) -- Stocks kicked off 2011 with gains last week despite lackluster economic news, but the week ahead could be more challenging as the quarterly earnings season gets underway. Dow components Alcoa (AA, Fortune 500), Intel (INTC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) all report quarterly financial results next week. Apollo Group (APOL) and homebuilder Lennar (LEN), which are both among the S&P 500 companies, will also open their books. The final quarter of 2009 was the first period in which companies began reporting profits, following nine straight quarters of losses. In that quarter, profits jumped 205% while revenues rose 8%. The rebound in earnings growth came as firms made deep cuts in their expenses and pinched profit margins. This year, investors are looking for improving revenue growth. "We've started to see top line revenue growth in addition to earnings growth during the past couple quarters, and investors want to make sure that remains consistent," said Ron Kiddoo, chief investment officer at Cozad Asset Management. "If there's any decay in that trend, that will be troubling for the market." Kiddoo added that investors will also keep a close eye on earnings forecasts. "In recent quarter, companies have been reluctant to provide any guidance on their earnings, but it's important for companies to bring those back to the table," he said. "A company can come in and knock our socks off with earnings, but if it doesn't pair that with a positive outlook, the earnings are a waste." On the docket Monday: After the closing bell, Alcoa (AA, Fortune 500) will report its fourth-quarter results. The Dow issue is expected to have earned 19 cents per share, up from 1 cent a year ago, on revenue of $5.7 billion, according to analysts polled by Thomson Reuters. Apollo Group (APOL), owner of the University of Phoenix, is also expected to report earnings after the bell. There are no market-moving economic reports expected on Monday. Tuesday: The Commerce Department releases the wholesale inventories report in the morning. Inventories are expected to have risen 1.3% in November after jumping 1.9% in October. Lennar (LEN), one of the nation's largest homebuilders, posts quarterly earnings before the opening bell. Wednesday: Reports on import and export prices, and weekly crude oil inventories are due in the morning. The December Treasury budget is on tap for the afternoon, as well as the Federal Reserve's Beige Book report on economic conditions across the central bank's 12 districts. Thursday: The Department of Labor releases the weekly jobless claims report in the morning. The number of Americans filing new claims for unemployment is expected to have climbed to 420,000 last week from 409,000 the previous week. Continuing claims -- a measure of Americans who have been receiving benefits for a week or more -- is expected to have fallen to 4.07 million from 4.10 million in the previous week. The trade balance, also due in the morning from the Commerce Department, is expected to have widened to $40.6 billion in November from $38.7 billion in October. In the afternoon, Federal Reserve Chairman Ben Bernanke will speak at the Federal Deposit Insurance Corporation's forum on small business lending. After the closing bell, Intel (INTC, Fortune 500) is expected to report a quarterly profit of 53 cents per share versus 40 cents a year ago. The chipmaker is also expected to report a 8% rise in quarterly revenue. Friday: Before the start of trading, JPMorgan Chase (JPM, Fortune 500) is expected to report a profit of 98 cents per share versus 74 cents a year ago. Revenues at the bank, however, are expected to slip 3%. The Commerce Department releases the Consumer Price Index, a measure of consumer inflation, in the morning. CPI is expected to have increased 0.4% in December after rising 0.1% the previous month. Core CPI is expected to have inched up 0.1%, after rising the same amount in November. The Commerce Department also reports on retail sales before trading starts. Sales are expected to have gained 0.7% in December after having increased the 0.8% in November. Sales excluding volatile autos are expected to have ticked up 0.6% after a 1.2% rise the previous month. The University of Michigan's consumer sentiment index for January is expected to have risen to 75.0 in early January from 74.5 in late December. November business inventories, due after the start of trading, are expected to edged up 0.7% after rising the same amount the previous month. |
Oil Declines as U.S. Adds Fewer Jobs Than Forecast, Pushing Stocks Lower Crude oil fell to the lowest level in three weeks as a U.S. payroll report showed employers added fewer jobs last month than expected, pushing down stocks and other commodities. Oil dropped 0.4 percent as stocks declined for a second day after the Labor Department said payrolls increased 103,000, compared with the median forecast of 150,000 in a Bloomberg News survey of analysts. Futures rose as much as 1.2 percent earlier as Canadian Natural Resources Ltd. shut its Horizon oil-sands project, curtailing U.S. supplies. “Crude is following the weakness in stocks and the strength in the dollar,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “The market seems to be trying to probe further downside.” Oil for February delivery fell 35 cents to $88.03 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 17. It rose as high as $89.48 earlier. The futures declined 3.7 percent this week. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
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Rhys Cruz
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