Economic news that matters

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Newsbriefs, a weekly digest produced by IDEA, Inc. to highlight the most recent national and international economic events, it says that the Bangko Sentral ng Pilipinas reported that the capital adequacy ratios (CAR) of the Philippines banks remained within a tight range of 16 to 17 percent. The ratios declined compared to the previous quarter because of the increases in the risk weighted assets outpacing the growth in capital banks.

As of end-june 2011, the Universal and Commercial banks’ CARS stood at 16.31 percent and 17.32 percent on solo and consolidated bases, respectively. Banks’ CAR exceed the central bank’s 10 percent requirement and 8 percent requirement in the Basel accord.

Moreover, the same published report revealed that the Department of Budget and Management has allocated about Php99 billion to the agricultural sector this year. About Php24.5 billion will be allocated to improve the irrigation system. About Php5 billion will be spent on improving the farm-to-market roads, and roughly Php6 billion will support the National Rice Program this year.

Furthermore, an industry official of the Philippine Federation of Pre-need Companies said that proposals to hike the capital requirements of the pre-need firm could strengthen the sector; however, there is a need to ask the government to liberalize first the investment instruments to allow companies to get better returns in their trust funds. This is after Prudential Life stopped paying claims to its clients. Many pre-need companies have more than enough capital to cover insurance coverage.

Likewise it was reported that the Mining and Geosciences Bureau (MGB) said that mining revenues in Central Mindanao reached Php20 million last year with South Cotabato emerging as the top earner. South Cotabato’s share in revenues totaled at least Php9 million or about 48 percent of the region’s total revenue. South Cotabato hosts the copper-gold mining Sagittarius Mines, Inc. Touted as the largest undeveloped copper-gold deposit in Asia.

On the other hand, the government plans to raise at least Php90 billion by issuing retail treasury bills. Deputy Treasurer Mendoza said that the government plans to raise at least Php15 billion in the 15– and 20– year RTB’S today. The papers maturing on 2027 and 2032 will be issued starting Feb 21 until Feb 28.

Lastly, the Social Weather Stations (SWS) reported that adult unemployment increased to 24 percent from 20.2 percent in the Dec. 3-7 survey of the firm. This is equivalent to about 9.7 million Filipinos. Of the unemployment rate, 10 percent were retrenched, 9 percent had quit, and 5 percent were first- time job seekers according to the researchers of IDEA.

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