20 NOVEMBER 2018

‘TWAS NO DIVE,
THAT LOSS
P15
WOVEN WITH
CREATIVITY
P18
PH BANKS STABLE
BUT SOME RISKS
APPARENT
P10
Jun Vallecera, Editor
Tuesday, 20 November 2018
Daily Tribune
Customs
administration,
only way to go
BUSINESS
Outflows help widen
October BoP deficit
9
CHAMBER LANE
Jess Varela
COMMENTARY
“If we want the
Philippines to become
a flourishing trade and
investment hub in the
region, we must identify
the causes which pull
our businessmen and
entrepreneurs… steps
behind.
The history of customs administration dates back to centuries
ago, when the mode of trade was in barter form. Collection of
tributes from people who want to engage in trading activities
was commonplace. Since then, customs, the agency responsible
for controlling the flow of goods in and out of a country, have
been in place.
For the Philippines, our customs history has been influenced
by the Spanish and American regimes. The creation of the
Commonwealth government and the establishment of the
Republic gave the country an opportunity to tailor-fit the customs
administration to what suits us best.
As an agency in charge of the efficient flow of goods, a
customs bureau is an integral part of doing business and of
nation building. Tariffs collected from duties are used by the
government to better its services to the people, by way of social
services, building new roads and other infrastructure.
However, due to some externalities, inefficiencies in customs
administration become inevitable. But, for how long?
Recent developments
Corruption inside customs bureaus is nothing new. It is no
walk in the park to administer the flow of goods, to calculate
Turn to page 10
MALABON may be best known
for its fish factories and fish
mongers but it also plays host
to a small but growing number
of people in the furniture trade.
ROMAN PROSPERO
The state of its imbalance at the moment betrays the country’s
ongoing effort to import more capital and goods from overseas
sources as part of the multiyear infrastructure buildup program
under President Duterte
By Joshua Lao
The country’s balance of payments (BoP)
still stood as a deficit totaling $458 million
in October, nearly six times better than the
month-ago shortfall reaching $2.70 billion.
But compared against the year-ago figure,
the BoP deficit for the month represents a
deterioration from last year when this stood
at only $368 million, data from the Bangko
Sentral ng Pilipinas (BSP) show.
“The country’s overall balance of payments
position posted a deficit of $458 million in
October 2018, higher than the $368 million
BoP deficit recorded in the same month last
year,” the BSP said.
The BoP is what is left after the country’s
foreign currency expenses are deducted from
its earnings. The state of its imbalance at
the moment betrays the country’s ongoing
effort to import more capital and goods from
overseas sources as part of the multiyear
infrastructure buildup program under
President Duterte.
BSP Deputy Governor Diwa Guinigundo
previously brushed aside notions the
imbalance could prove disastrous for the
economy later on, saying the buildup helps
ensure the country’s local output growth
measured as its gross domestic product
(GDP) is sustainable for the long haul rather
than just for a few years.
“Outflows in October 2018 stemmed
mainly from payments made by the national
government (NG) for its foreign exchange
obligations, NG’s net foreign currency
withdrawals and foreign exchange operations
of the BSP,” the BSP said in a statement.
According to the BSP, the outflows were
partially offset, however, by the net foreign
currency deposits of the NG.
Over the course of a 10-month period, the
country’s BoP registered a wider deficit of
$5.59 billion from $1.73 billion deficit in the
same period year-ago.
Preliminary data from the Philippine
Statistics Authority said the wider deficit
can be attributed in part to the widening
trade gap in merchandise in the first
three quarters of the year.
“This, in turn, was brought about mainly
by the sustained rise in imports of raw
materials and intermediate goods as
well as capital goods to support
domestic economic expansion,”
the BSP said.
The reported BoP
position reflected the final
GIR level of $74.71 billion
as of end-October 2018.
“At this level, the GIR
(gross international
reserves) represents
a more than ample
MB action anchors T-bills
Treasury bill (T-bill) rates on Monday
moved within a tight band previously
anticipated by the Bureau of the Treasury
(BTr) following the decision by the Bangko Sentral
ng Pilipinas (BSP) to up its policy rates yet again
the week before.
Only the threemonth
or 91-day
T-bills posted
the widest
increase by
12.3 basis
points in
imitation of
the 25-basis
point in
the rate
at which
the BSP
borrows
from or
lends to
banks.
As a
result, the
auction
committee awarded in full its offering
of P15 billion for the tenor, noting that the
market is clearly encouraged to come out
in the market with a strong appetite for
government securities now that inflation has
shown signs of finally tapering off.
Treasury officials said while T-bill rates
rose across the board on Monday, the magnitude
of the changes were all within expectations.
For example, the rate for both the 91- and
liquidity buffer and is equivalent to 6.8
months’ worth of imports of goods and
payments of services and primary income. It
is also equivalent to 5.7 times the country’s
short-term external debt based on original
maturity and 3.9 times based on residual
maturity,” the BSP said.
The BoP, which stood as a deficit equal
to 0.4 percent of local output or the gross
domestic product in 2016, widened to 0.9
percent of GDP last year. The imbalance was
preprogramed to equal 1.5 percent of GDP
this year as part of the larger goal to spend
more or less P8 trillion under President
Duterte to boost the country’s infrastructure
network.
That buildup, the various
economic managers
previously said, helps
ensure the country’s
local output growth is
sustainable not just
this year and next but
for the long haul.
GUINIGUNDO
In all, the BTr raised the full intended
amount of P15 billion but attracted P30.3
billion in total tenders.
182-day tenors averaged no higher than 5.295 percent
and 6.280 percent, respectively, from 5.172 percent for
the former and 6.245 percent for the latter. This means
the 91-day benchmark rose by 12.3 basis points while
the six-month tenor rose by another 3.5 basis points.
According to the BTr, both tenors were
oversubscribed, the offering having been set
earlier at P4 billion and P5 billion but whose
appeal was such that a total P4.74 billion were
offered for the former and another P11.928 billion
for the latter.
The 364-day benchmark posted an increase by a
mere 0.9 basis point uptick to 6.530 percent from the
posted 6.521 a week ago as demand accelerated to
P13.61 billion from P11.50 billion at the last auction.
In all, the BTr raised the full intended amount of
P15 billion but attracted P30.3 billion in total tenders.
National Treasurer Rosalia de Leon said they had
a good auction on Monday, particularly for the 182- and
364-day tenors.
“Investors are already locking in despite the
25-basis point hike by the Monetary Board (MB)
(signifying) that inflationary expectations were
anchored,” De Leon said.
“Investors see that we are able to already temper
inflation with all these actions coming from the MB as
well,” she added.
On the anticipated retail Treasury bond sale,
the Treasury chief said they continue to watch the
market as trade tensions between US and China
resurfaced in recent days.
But De Leon said the BTr has enough financial
buffer for upcoming maturities.
“I will say that at this point we are well-funded
already. Even for the global bond issue we have already
prepared for that maturity in January. We are more or
less comfortable right now with the cash build up we’ve
made during the past months in preparation for all our
redemptions,” De Leon said.
Joshua Lao