Thailand PTT might expand their business in the Philippines

PTT Philippines Corporation, a unit of Thai oil giant PTT Public Co. Ltd., is being pushed for to further expansion its presence in the Philippines, the country’s top energy official said.

Energy Secretary Jose Rene Almendras said they are trying to convince PTT, along with other investors, to continue to help in promoting competition in the Philippine oil industry.

“We are trying to encourage competition. It would help if they (PTT) would decide to get bigger here,” he said.

This year, PTT plans to increase its nationwide network by 10 to 15 retail stations. One retail station would need about P20 million in investments.

As of end-2010, PTT Philippines operates about 43 retail stations, up from 34 in 2009.

In Thailand, the government-owned PTT runs some 1,200 stations and five of six refineries.

Almendras also confirmed that PTT is still interested to participate in the proposed liquefied natural gas (LNG) program of the Philippine government.

The company earlier expressed interest in putting up a 1,200-megawatt LNG facility in Limay, Bataan.

Aside from its pump business in the country, PTT supplies petrochemical products to local manufacturers.

Based on PTT statistics, the Philippines is one of the top five countries for PTT’s export of plastic products in Thailand.

 

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'Hot money' inflows to the Philippines tops $2 billion in early May

The inflow of foreign portfolio investments to the Philippines or “hot money” breached the $2-billion level as of the first week of May as foreign capital continued to flow to emerging markets including the Philippines due to economic uncertainties in advanced countries.

Latest data released by the Bangko Sentral ng Pilipinas (BSP) showed the net inflow of hot money reached $2.085 billion as of May 6 or 187 percent higher than the $725.55 million booked in the same period last year.

Hot money or speculative money that were invested mostly in shares listed at the Philippine Stock Exchange (PSE) as peso-denominated government securities surged 124 percent to $6.85 billion from $3.05 billion.

Major sources of foreign portfolio investments in the first four months included Singapore, US, United Kingdom, Luxemburg, and Hong Kong.

Foreign portfolio investments are also called hot money because they could be taken out of the country as quickly as they come in.

On the other hand, outflows consisting of withdrawals from interim peso deposits more than doubled to $4.76 billion from $2.33 billion.

Earlier, BSP Governor Amando M. Tetangco Jr. said foreign portfolio investments continued to flood emerging economies including the Philippines due to uncertainties in the economic recovery of economic superpowers such as the US, Europe, and Japan.

“Strong macroeconomic fundamentals buoyed the keen interest in portfolio investments to the country in 2011, in contrast to a year ago when uncertainties loomed in April, a month before the May 2010 Philippine elections, leading investors to remain in the sidelines,” Tetangco explained.

The inflow of foreign portfolio investments hit a new record level of $4.61 billion last year or nearly 12 times the $388.02 million in 2009 as funds continued to flood emerging markets including the Philippines due to the fragile growth in advanced economies led by the US and Europe.

Despite the strong inflows, monetary authorities said there is no need to constrict the strong inflows of foreign capital as the domestic economy could still absorb the inflows without stoking up inflation.

BSP Deputy Governor Diwa Guinigundo earlier told reporters that monetary authorities believe that the strong foreign exchange inflows into the country remains under control.

“We are always open to the conventional monetary tools after all they (inflows) have not reached that proportion where capital controls are made necessary,” Guinigundo stressed.

Guinigundo said the weaker than expected economic growth in advanced economies led by the US would serve as an impetus to further capital flows to emerging markets including the Philippines.

Strong capital inflows, he warned, could stoke up inflation through excessive liquidity in the financial system.

“That would warrant additional vigilance on the part of the BSP to make sure that they (capital inflows) do no exacerbate the levels of liquidity and fuel inflation in the future,” he explained.

However, he pointed out that conventional monetary tools are enough to address the current level of capital inflows into the country.

 

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The Philippines with 9,049 votes in the IMF wants Asian IMF chief

IT’S HIGH TIME that an Asian takes the helm at the International Monetary Fund (IMF), Philippine economic managers yesterday said in the wake of Dominique Strauss-Khan’s resignation.

The IMF managing director, in a May 18 letter released yesterday, said he was quitting to concentrate on fighting charges that he had sexually assaulted a hotel maid in New York.

His arrest last Saturday has sparked a debate over who gets to head the Washington-based global lender. The top IMF post is traditionally held by a European in the same way that an American is named president of the World Bank.

"Given the urgent need for stable leadership in the IMF, coupled with the shifting global economic landscape, where in Asia increasingly plays a major role as a growth driver of the global economy, there is no time more fitting than now for an Asian leader to take the helm of such a distinguished organization," Finance Secretary Cesar V. Purisima said in a text message yesterday.

There have been "great shifts" in the balance of economic powers and this should be reflected in the structure and composition of the new IMF leadership, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guiniguindo said in a separate text message.

Messrs. Purisima and Guiniguindo called for a "new brand of leadership" to enhance the IMF’s legitimacy and relevance in a changing world. This could also be the solution for the Fund at a time when it is "in search of new modalities to prevent new crises," Mr. Guiniguindo said.

Central bank Governor Amando M. Tetangco, Jr., for his part, said he did not expect the global lender’s operations to be disrupted the Strauss-Kahn case.

"The IMF as an institution is bigger than one man, even its managing director. Its institutional framework is sound," he said in a text message.

Still, he said it was time to consider changes to the way its executives are chosen.

"I believe the way forward is to have a broader base for selection, not just in the representation at the executive director level at the IMF Executive Board, but also -- and even more so -- for the [managing director] position itself. Diversity should be made an important consideration," he said.

The Philippines has 9,049 votes in the IMF, equivalent to 0.41% of the total held by the institution’s member countries.

 

 

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