Philippine economy grows 6.7% in 2017

Philippine economic growth in the three months to December 2017 was at an annualized 6.6 percent clip, slower than the previous quarter’s 7.0 percent pace. (AFP)
Updated 23 January 2018
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Philippine economy grows 6.7% in 2017

MANILA: The Philippine economy grew 6.7 percent in 2017, remaining one of Asia’s best performers despite a weaker business process outsourcing industry, the government announced Tuesday.
Government spending ensured the country remained one of Asia’s fastest-growing major economies, behind only China and Vietnam, Economic Planning Secretary Ernesto Pernia told reporters.
However he said last year’s growth was slower than the 6.9 percent gross domestic product (GDP) rise in 2016, when consumer spending was boosted during elections that propelled President Rodrigo Duterte to power.
But the 2017 figure was “a good performance,” Pernia said, with China having reported 6.9 percent 2017 GDP growth last week and Vietnam achieving a 10-year-high expansion of 6.81 percent over the same period.
Philippine economic growth in the three months to December 2017 was at an annualized 6.6 percent clip, slower than the previous quarter’s 7.0 percent pace.
The business processing outsourcing industry, worth $23 billion and employing 1.15 million people, was a “major contributing factor to this decline,” Pernia said.
The sector, which has become a major pillar of the Philippine economy, includes call centers and offices that carry out such functions for overseas companies as accounting, medical and legal transcription, software design, animation and even architecture.
Industry officials said investment fell 31.3 percent year-on-year in the three months to last June, with threats by US President Donald Trump to bring back jobs outsourced abroad cited as a key factor.
There was also concern in the Philippines that automation and artificial intelligence could eventually steal call-center jobs.
The Philippines’ fourth quarter growth was marginally lower than market expectations, said Sanjay Mathur, chief Southeast Asia and India economist for ANZ Research, adding the trade balance in the last two months of 2017 also deteriorated.
“The prospects for growth in the Philippines remain solid,” Mathur said, citing the passage last month of Duterte’s tax reform program designed to raise funds for infrastructure spending.
State spending should reinforce already strong domestic demand, Mathur added.
Pernia said the government remained confident it would hit its growth target range of 7-8 percent this year, powered by Duterte’s vow to raise spending on transport, energy, and water supply infrastructure.


SoftBank mobile unit to go for $21bn IPO

Updated 13 November 2018
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SoftBank mobile unit to go for $21bn IPO

  • The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations
  • SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies, and e-commerce behemoth Alibaba Group Holding

TOKYO: SoftBank Group Corp. has won approval to conduct a 2.4 trillion yen ($21.04 billion) initial public offering (IPO) of its domestic telecoms business, in a deal that will seal the group’s transformation into a top global technology investor.
The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations that CEO Masayoshi Son predicts will drive future tech trends.
SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies, and e-commerce behemoth Alibaba Group Holding.
SoftBank Group aims to raise 2.4 trillion yen through the sale of 1.6 billion SoftBank Corp. shares at an tentative price of 1,500 yen each, a filing with the Ministry of Finance showed on Monday.

 

 The amount could rise by 240.6 billion yen if demand triggers an overallotment, taking the total closer to the $25 billion that Alibaba raised in 2014 in the biggest-ever IPO.
The final IPO price will be determined on Dec. 10, and SoftBank Corp. will list on the Tokyo Stock Exchange on Dec. 19 with an initial market value of 7.18 trillion yen — about 1 trillion yen above that of rival KDDI Corp, which has about 10 million more subscribers.
The parent will retain a stake of around two-thirds, depending on the overallotment.
The mammoth offering comes at a time when investors have begun questioning the outlook for Japan’s telecoms companies.
The IPO was initially expected to appeal to investors seeking stability, but the government has recently called on carriers to lower fees while backing more wireless competition, sending shockwaves through the industry.
Yet SoftBank’s brand is still likely to draw retail investors long accustomed to using SoftBank’s phone and Internet services. Many still see CEO Son as a tech visionary who brought Apple’s iPhone to Japan.
Japanese households are commonly seen as an attractive target in IPOs with their 1,829 trillion yen in financial assets, even if they are traditionally risk-averse with over 50 percent of assets in cash and deposits. More than 80 percent of the shares will be offered to domestic retail investors, a person with knowledge of the matter told Reuters.
“I think a reasonable amount of money will be attracted to this one,” said Tetsutaro Abe, an equity research analyst at Aizawa Securities. “It’s a mobile company, so the cash flow is steady.”

FACTOID

SoftBank to sell 1.6 billion shares at a tentative price of 1,500 yen ($13) each.