BUSINESS CONSULTANTS FORUM

Dear Members,

The Department of Trade and Industry thru your Chamber— the OROCHAMBER, is inviting you to attend a FREE-OF-CHARGE Forum for Business Consultants come July 20.

Below, is the program for your ready reference.

For your participation,

      Tony Uy, President

BUSINESS CONSULTANTS FORUM

20 July 2011 (1-5pm), Wednesday

VIP Hotel, Cagayan de Oro City

PROGRAM

1:00-1:30PM	Registration
1:30-1:50PM	Opening Ceremonies Invocation Opening Remarks Overview of Activity
	Introduction of Participants
1:50-2:30PM	Rationale Why we are undertaking this activity MSMED Plan 2010-2016 MSMEs needs and requirements
2:30-2:50PM	Objectives How do we address those needs? What are the opportunities and responsibilities of Business Consultants and other stakeholders?
2:50-3:10PM	Profiling Form presentation and discussion
3:10-3:40PM	Open Forum
3:40-4:30PM	MSME Testimony/ Experience
4:30-4:45PM	What are the next steps?
4:45-5:00PM	Closing Ceremonies Synthesis Acknowledgement of Participation Closing Remarks

Morning Brief: 06 July 2011

At least P100B to be issued via debt exchange THE GOVERNMENT yesterday launched its first bond swap for the year, expecting to exchange a minimum of P100 billion worth of 10.5- and 20-year bonds for shorter-dated papers.The Bureau of the Treasury has set a minimum coupon rate of 6.375% for the 10.5-year bonds and 8% for the 20-year papers. The minimum issue size was set at P50 billion each. Bonds due on July 22, 2011 to April 28, 2021 may be exchanged for the 10.5-year securities, while notes maturing on March 14, 2022 to January 26, 2031 may be swapped for the 20-year debt papers. A total of P1.911-trillion worth of government securities are eligible to be exchanged for the two tenors, of which P189 billion may be exchanged for the 20-year bonds and P1.732 trillion may be exchanged for both the 10.5- and 20-year tenors. The seven-day offer period of the 10.5-year bonds maturing on January 19, 2022 and 20-year bonds maturing on July 19, 2031 started yesterday and will run until July 15. Final pricing is on July 15 and the settlement date is July 19. “The bond exchange program will be used to finance the long-term infrastructure projects of the government under the public-private partnership, smoothen the country’s debt maturity profile, develop long-tenored benchmark bonds and boost liquidity in the secondary market,” National Treasurer Roberto B. Tan said at an investors’ briefing at the state-run Development Bank of the Philippines. Roberto Juanchito T. Dispo, president of one of the deal managers, First Metro Investment Corp., said the swap will be a “pure exchange exercise, no cash payments will be will be accepted in exchange for the securities.” Mr. Tan said noted that the Office of the President had approved “more than P200 billion worth of borrowing authority limit” for the transaction. High demand for the 2022 and 2031 bonds is expected from the market, Mr. Dispo said, citing a stable outlook on inflation and high liquidity in the financial system. FMIC alone, he claimed, has received at least P50 billion worth of demand. -- Ann Rozainne R. Gregorio  Debt service payments down 1.1% to P385B By: Ronnel W. Domingo Philippine Daily Inquirer The government spent P385 billion in the first five months of 2011 to service its debts, lower by 1.1 percent than the P389.2 billion paid out in the same period last year, according to the Bureau of the Treasury. The decrease was observed given Malacañang’s continuing efforts to ease the level of debt in relation to gross domestic product, which at end-2010 was pegged at 55.4 percent. From January to May, the government settled a total of P267.2 billion in principal, including P188.2 billion in domestic debts and P78.5 billion in foreign loans. Total principal payment in those five months was 5.7 percent higher than the P252.9 billion posted in the year-ago period. The government also paid a total of P117.8 billion in interest, covering P68.9 billion on domestic debts and P48.9 billion on foreign borrowings. Total interest payment for the five months was 13.6 percent lower than the P136.4 billion recorded in the same period of 2010. Latest documents from the Treasury showed that the stock of outstanding debts inched up to P4.71 trillion as of end-March, increasing by about P51 billion from the February level mainly due to new loans. With the population estimated to have reached 94.01 million in 2010, the amount of total outstanding debt would mean that each citizen has a share of P50,533. Based on the Aquino administration’s proposed medium-term debt path, the debt-to-GDP ratio would remain at 55 percent in 2012, but would steadily go down in the succeeding years toward 47 percent in 2016. Such ratio has hovered within the range of 56 to 58 percent in the past three years, much higher than the average for Southeast Asian neighbors of about 33 percent. Malacañang also wanted to lower its fund for debt payments to P367 billion in 2012, or 1.3 percent lower than the planned P372 billion this year to sustain efforts in consolidating its finances mainly by lengthening the average maturity of obligations. Budget Secretary Florencio B. Abad said that compared with the total national budget, debt servicing funds would decrease to 20.2 percent based on Malacañang’s proposed allocations for 2012 from 22.6 percent of the 2011 budget. President Aquino has approved a proposal for a P1.816-trillion budget next year, which is 10.4 percent more than this year’s P1.645 trillion.

U.S. Stocks Fall as Moody’s Cuts Portugal Rating, Offsetting Energy Rise U.S. stocks fell, ending the Standard & Poor’s 500 Index’s five-day winning streak, as a Moody’s Investors Service downgrade of Portuguese debt rekindled concern the economy will slow and offset gains by energy producers.Bank of America Corp. (BAC), the biggest U.S. lender, and General Electric Co. (GE) lost 0.8 percent as shares of financial and industrial companies led losses in the S&P 500. A gauge of banks dropped the most in the S&P 500 within 24 groups, falling 1.2 percent, as Citigroup Inc. said 2012 industry earnings estimates may be too high. Energy companies in the S&P 500 advanced 0.5 percent, the most among 10 groups. The S&P 500 slumped 0.1 percent to 1,337.88 at 4 p.m. in New York. The intraday move in the S&P 500 between its high and low was 0.5 percent, the smallest move since April 29, when the index peaked for the year. The benchmark equity index rose 5.6 percent last week, the biggest rally since July 2009. The Dow Jones Industrial Average fell 12.90 points, or 0.1 percent, to 12,569.87 today. “The market is correcting a little bit after a strong run last week, using the headline about Portugal’s debt rating as a catalyst,” said Tom Mangan, who helps oversee $2.7 billion at James Investment Research Inc. in Xenia, Ohio. “Portugal’s economy has virtually no impact on U.S. markets, but the question is whether this is the continuation of a problem that began in Greece. It raises fear of a contagion effect in the market.” Treasuries Advance as Portugal Cut to Junk; 3-Month Bill Rate Below Zero Treasuries rose, snapping a five-day rout, as Moody’s Investors Service cut Portugal’s long-term government bond ratings to junk, fueling demand for the safety of U.S. government debt. Rates on three-month Treasury bills fell below zero for the first time since 2008 as Moody’s reduced the ratings to Ba2, from Baa1. The outlook is negative. Treasuries gained earlier after a report yesterday showed deteriorating credit prospects for China’s banks andStandard & Poor’s said a debt-rollover plan for Greece may prompt a “selective default” rating. “It’s fear and concern over the spillage or contagion” of Greece’s sovereign-debt crisis, said Sean Murphy, a Treasury trader at Societe Generale SA in New York, one of the 20 primary dealers that trade with the Federal Reserve. “Portugal was on thin ice as well as Greece.” Yields on 10-year notes dropped six basis points, or 0.06 percentage point, to 3.12 percent at 5 p.m. in New York, according to Bloomberg Bond Trader prices. The price of the 3.125 percent securities maturing in May 2021 increased 1/2, or $5 per $1,000 face amount, to 100 1/32. Three-month Treasury bill rates tumbled to negative 0.0051 percent in their first descent below zero since December 2008. “Today people came to the conclusion that this situation in Europe is not going away any time soon,” said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York. “It extended the bill rates on the flight to quality.” U.S. 10-year note yields rose on July 1 to 3.22 percent, the highest level since May. Yields on 30-year bonds fell two basis points today to 4.37 percent. Two-year yields slid five basis points to 0.43 percent, the lowest level since June 28.

Crude Oil Trades Near Three-Week High on Signs of Growth in U.S. and China Oil traded near a three-week high in New York as signs of economic growth in the U.S. and China stoked speculation that fuel demand may increase in the world’s biggest crude-consuming countries.Futures were little changed after advancing 2.1 percent yesterday. Prices rose as separate reports showed orders placed with U.S. factories increased in May, while China’s services industries expanded at the second-fastest pace this year as new orders and employment climbed. An Energy Department report tomorrow may show crude stockpiles fell for a fifth week. “As long as we can see the economy growing, we are going to see more strength in oil,” said Carl Larry, director of energy derivatives and research with Blue Ocean Brokerage LLC in New York. “Oil may rise to $100 this month.” Crude for August delivery was at $97.10 a barrel, up 21 cents, in electronic trading on the New York Mercantile Exchange at 8:46 a.m. Sydney time. The contract yesterday gained $1.95 to $96.89, the highest settlement since June 14. Futures have gained 35 percent in a year. Floor trading was closed July 4 for the U.S. Independence Day holiday and electronic trades were booked with yesterday’s transactions for settlement purposes. Brent oil for August delivery rose $2.22, or 2 percent, to $113.61 a barrel on the ICE Futures Europe exchange yesterday. The European benchmark contract was at a premium of $16.72 to U.S. futures. The spread reached a record $22.29 on June 15.

Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com 

BDO UNIBANK INC. 

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher 
(632) 858-3001