Foreign portfolio investments up 4 times since December

Posted April 20, 2012. Filed under BizNews Brief.

---

Economic and Industry Update

Macroeconomic Indicators

• Inflation for January slowed down to 3.9% from 4.2% in December, well within the government’s 3-5% target for the year.
• OFW remittances increased by 7.2% to $20.117 billion in 2011 from $18.763 billion in 2010 as inflows from sea-based and land-based workers went up by 14% and 5.5%, respectively.
• Foreign direct investments registered net inflows of $782 million, down by 38.5% from the $1.3 billion net inflows realized in the same period in 2010. This resulted mainly from the transfer of ownership of shares of a mining corporation from a non-resident holder to its resident partner.
• Net foreign portfolio investments reached $586 million in January, 4 times the $140 million net inflow in December 2011 and 204% higher than the $193 million recorded in the same period last year. Major sources were the UK, Singapore, the US, Luxembourg and Hong Kong.
• Gross international reserves as of end-January hit $77 billion, a $1.7 billion higher than year-ago’s $75.3 billion mainly coming from foreign exchange inflows from the foreign currency deposits by the National Government, revaluation gains on the BSP’s gold holdings and income from the BSP’s investments abroad.
• Balance of payments posted a surplus of $864 million in January from a deficit of $114 million in December as the flow of foreign capital recovered amid the economic uncertainty in the US and the debt crises in Europe.
• Peso closed at P42.946 in January from December’s 43.928 finish.

Banking Industry Developments

Banks’ lending grew by 19.3% year-on-year in December with the following sectors contributing to the increase:

• Fishing, (61.2%)
• Mining and Quarrying, (60.1%)
• Electricity, Gas & Water, (54.5%)
• Financial Intermediation, (32.8%)

Commercial banks’ NPL ratio as of end-December 2011 went down to 2.35% from previous month’s 2.53% and year ago’s 3.10%. NPA ratio eased to 2.76% from previous month’s 2.91% and year ago’s 3.28%. NPL coverage ratio strengthened to 126.36% from previous month’s 122.20% and last year’s 118.48%. NPA coverage ratio also strengthened to 64.44% from previous month’s 62.86% and last year’s 59.92%.

Thrift banks’ NPL ratio as of end-September 2011 remained fairly flat at 6.31% from the previous quarter’s 6.33%, much lower than year-ago’s 8.58%. NPA ratio was also steady at 7.51% from the previous quarter’s 7.52%, lower than year ago’s 8.92. NPL coverage ratio inched up a bit to 59.99% from previous quarter’s 59.00%, higher than the 51.46% level a year ago. NPA coverage ratio also went up to 38.11% from previous quarter’s 37.74% and last year’s 32.06%.

Other Industry Developments

• Automotive industry suffered a sales slump of 15.65% to 10,762 units in January from 12,758 in December as assemblers continued to be hampered by supply chain disruptions.

Competition

Banco de Oro

• Will be issuing dollar-denominated fixed rate senior notes to be used for general funding and relending purposes.

Bank of the Philippine Islands

• Has launched its Real Thrills One Year Comprehensive Insurance with Acts of Nature Coverage promo as part of the Bank’s promise to “Make It Easy” for its clients, allowing them to save on initial cash out while protecting their cars from destructive national calamities and accidents.

RCBC / RCBC Savings Bank

• Has formalized their partnership with NRG Global Solutions, a highly progressive Australian business process outsourcing company specializing in debt management products.

Security Bank

• Has sealed the share purchase agreement with the owners and management of Premiere Development Bank with the recent signing of formal documents.
• Was recognized by The Asian Banker for posting the highest ROA at 4.6% among 500 banks throughout the Asia Pacific region.

Development Bank of the Philippines

• Has recently signed a Memorandum of Agreement with the local government of Banaue, Ifugao and the UPLB-Land Grant Management Office for new reforestation activities under its DBP Forest Program.

Citibank

• Has launched the 9th Citi Junior Bankers Congress at the Washington Sycip Development Center in Makati City in its aim to provide college students with first-hand knowledge in the banking and finance sector and eventually link participants to mentorships and job placements with FINEX member companies.
• Was given a special “Mapagmahal sa May Kapansanan Award” in the 2011 Apolinario Mabini awards, a program of the Philippine Foundation for the Rehabilitation of the Disabled.
• Was awarded Best Bank in 2011 by Euromoney in Asia, IFR Asia, FinanceAsia and The Asset. This is the first time the Bank has picked up all four in a single year since 2004.

Maybank

• Ranked first among the trading participants in the Philippine Stock Exchange in terms of value turnover for the year 2011.
• Has signed a deal with E-MoneyPlus Inc. in order to provide a gateway of online interbank fund transfer for crediting of accounts of remittance beneficiaries who maintain accounts with Bancnet member banks.

Philippine Veterans Bank

• Has sponsored the publication and printing of the book, Bibliographical Sketches of Pangasinan Heroes of World War II by Dr. Cecilia B. Daranciang & Deborah B. Castillo.

Asia United Bank

• Has acquired the banking business of Asiatrust.

Allied Bank

• Has opened its 287th branch, located at the BC Group Center, Filinvest Ave., Filinvest Corporate City, Muntinlupa City.

China Bank Savings

• Is offering an ATM card that can be secured on the same day of account opening. Minimum maintaining balance is P1,000.

Sterling Bank of Asia

• Has upgraded its membership status with Bancnet, becoming the consortium’s 19th equity member.

ING

• Has won in the recently concluded Quill Awards for the Bank’s special running event that raised P1.8 million funds for the construction of more homes at the ING Village in Calauan, Laguna in partnership with Habitat for Humanity Philippines.