For 10 days through June 1, the price of petrol will be 4,300 riel ($1.058 at Tuesday’s exchange rate) a litre, up 200 riel from the preceding period, according to an announcement by the Ministry of Commerce on Tuesday.

The ministry recalculates the retail fuel price cap every 10 days, based mostly on the trading price of crude oil in Singapore.

Sitting on his motorbike in Phnom Penh on Tuesday awaiting customers, Chhoeun Borith, a tuk-tuk driver, was surprised to hear of the hike. Unable to realistically increase the fare he changes, the rise in the cost of petrol will eat into his income.

“The price increase is really affecting my income, but I dare not increase the fares I charge customers,” Borith said. Explaining that he always followed the news on Facebook, Borith said the price for petrol in Thailand is cheaper.

“The price [in Thailand] is only Bt25 [$0.78] per litre, I really wonder why the price in Cambodia is so high, even though the government says it is controlled by price caps,” he said.

The Kingdom currently fills all of its oil needs through imports while Thailand is an oil-producing country.

Another disappointed petrol buyer is Nov Navy, who owns a grocery store on Street 242 in the capital. She was looking to expand her business but may postpone her plans if the petrol price continues to climb. “I can’t ride a motorbike as much as I want anymore as petrol has become really expensive. Besides, I need to save more.

“This regulation is valid for both new and old companies,” said the Finance Ministry’s fiscal policy head Suahasil Nazara in Jakarta on Tuesday as reported by kompas.com.

Suahasil explained that foreign insurance companies with ownership above 80 percent were still allowed to continue to operate, but they could not upgrade their business level.

“If the companies want to expand, we limit their ownership to 80 percent,” he said.

Suahasil believed the regulation would not discourage foreign insurance companies from carrying out business expansion because the insurance business in this country still had great potential.

The official said the average insurance premium was about Rp 1.5 million (US$105.82) per capita in Indonesia, relatively low compared to figures in the neighboring countries in Southeast Asia.

While credit rating agency Moody’s described the removal of the consumption tax regime as “credit negative”, several economists expect Malaysia to remain largely on track of its fiscal deficit target, provided the government fulfils its election promises for reforms in national expenditure.

Lower expenditure, coupled with higher crude oil prices and the re-introduction of the sales and services tax (SST), will be key in buttressing the national finances, moving forward.

According to Alliance Bank Malaysia Bhd chief economist Manokaran Mottain, the federal government may see a revenue shortfall of about 5 billion ringgit to 10 billion ringgit this year – even if the loss of revenue from the removal of the GST is substituted by the higher crude oil price and the re-introduction of the SST.

“If the new government can plug the holes in the country’s fiscal management, particularly in the procurement process, then the revenue shortfall can be met eventually.

“One of the areas which may lead to cost savings is the reduction in allocation to the Prime Minister’s Office (PMO), as the Pakatan government has pledged to reduce the function of the PMO and include fewer ministers there.

“A total of 17.4 billion ringgit was allocated to the PMO in Budget 2018, which was considerably high compared to the budget allocated to other departments,” he said.

Pakatan had said previously that cost savings of about 20 billion ringgit or 1.4 per cent of the gross domestic product (GDP) could be achieved, given the reduction in wastage and corruption.

While he described the 20 billion ringgit target as “ambitious”, Manokaran indicated that the government could achieve savings close to the target, if unnecessary expenses can be identified and eliminated.

Since taking office after winning the 14th General Election, the new government has terminated the services of about 17,000 political appointees in the ministries as it tries to slash spending and introduce a leaner administration.

Fiscal consolidation measures are not new in Malaysia, as the previous Barisan Nasional government had sought to trim the country’s fiscal deficit, a measure of how much the national expenditure has exceeded revenue. Among the key measures were the GST and subsidy rationalisation, which were criticised for the rising cost of living for Malaysians.

RCBC has teamed up with eCurrency Mint Ltd, a pioneer in digital fiat currency issuance and circulation, to create this new payment solution.

The e-Piso initiative is piloted under the Bangko Sentral ng Pilipinas’ regulatory sandbox initiative regulatory framework that allows financial technology (fintech) innovators to conduct live experiments in a controlled environment under regulators’ supervision.

The creation of the digital secured stored value supply is seen to start the transformation of the Philippine peso into a digital fiat currency.

RCBC ePiso is Philippine peso that is “securely digitised so it will not be lost, stolen or counterfeited, unlike physical bills and coins which are prone to security risks and fraud,” the bank said. This can be stored in a mobile wallet, a smartphone app which can be downloaded through Google Play, and will soon be available through the Apple Store.

“The digitisation of the peso aims to help Filipinos have easier access to financial services no matter where they are. Acquiring digital cash is very easy as users only need to go to sari-sari stores and accredited partners to convert their hard cash to ePiso digital cash for free,” RCBC said.

Through the mobile wallet, users can buy goods at partner retailers, pay bills, or send money to other ePiso users without the risk of theft or misplacing their money.

“With the mobile wallet, the ePiso is secured with password protection, on top of digital security layers, so the account owner is the only one who has access to his money. With ePiso, consumers can safely carry digital currency with them anywhere they go and have access to it anytime they want,” the bank said.

The e-Piso is also proposed to be a digital payment solution for businesses.

“It can be used for faster exchange of payments for businesses, big and small alike. RCBC ePiso can be also be used to save on disbursement, transportation, collection and sending payment costs. Essentially, the objective of RCBC is to make the business process cheaper so that goods and services can be delivered to every Filipino faster and at less cost,” RCBC said.

The ePiso supply creation was led by top RCBC officials led by president Gil Buenaventura in the presence of BSP officials.

“The creation of the ePiso supply is a testament to RCBC’s commitment to uplift the lives of Filipinos using digital technologies so they can reap the benefits of access to financial services and enjoy a convenient and comfortable lifestyle,” the bank said

Amid radical moves to liberalise the Philippine banking system, regulators are getting ready to pry loose the local foreign exchange market from the control of the country’s largest financial institutions, the Philippine Daily Inquirer learned.

In particular, the Bangko Sentral ng Pilipinas wants control over and accountability for the lucrative pesodollar trade —where almost $1 billion is traded every day between both currencies—to shift away from the Bankers Association of the Philippines (BAP) to a more democratized though stilltobedetermined institution.

“The proposition for the industry is that, right now, the foreign exchange market is basically run by a club called the BAP,” BSP Governor Nestor Espenilla Jr. said. “If something happens, the expectation is that BAP is supposed to run after the erring party.”

“But it’s also difficult to run after them because trading is high frequency and it’s inside [their group],” he added.

At present, the pesodollar foreign exchange market is, by convention and established tradition, run by the BAP, which is the umbrella organisation of the country’s biggest banks. It works closely with the central bank, which can influence market policies, but Espenilla pointed out that the ultimate determinant of the market’s policies was the “club” itself with unclear lines of accountability to authorities, regulators and market players.

As such, the central bank recently circulated a proposal to the BAP and its members that would break up the foreign exchange “cartel” and shift its roles and responsibilities to socalled “multilateral” entities. Instead of the current “bilateral” agreements between bank members of the BAP, the new system would be composed of groups of banks and other market participants bound together by multilateral agreements.

The proposed scheme may also result in the dismantling of the newly created foreign exchange trading platform managed by Bloomberg for the BAP. Instead, the BSP proposal called for “market mechanisms that will satisfy the transparency requirements of market participants, the public and regulators.” – Philippine Daily Inquirer

Rio Tinto to sell $3.5 bn worth of interest in Freeport

Anglo Australian mining giant Rio Tinto confirmed yesterday that it planned to sell its participating interest in Papua’s Grasberg mine in Indonesia , the world’s largest gold and second largest copper mine, for $3.5 billion.

Grasberg mine is currently owned by PT Freeport Indonesia (PTFI), a subsidiary of United Statesbased gold and copper miner FreeportMcMoRan.

London-based Rio Tinto says it is discussing the sale with stateowned mining holding PT Indonesia Asahan Aluminium (Inalum) and FreeportMcMoran, Rio Tinto says in a statement published in the company website.

The government has appointed Inalum to buy PTFI’s shares, in line with a law that requires foreign mining companies to divest 51 per cent of their shares to Indonesian entities. PTFI has long been in talks with the government on the divestment.

The process been taking place since early 2017, with the government initially aiming to conclude negotiations by the end of 2017. However, the government extended the divestment deadline for Freeport until 2019 with the issuance of Energy and Mineral Resources Ministerial Regulation No 25/2018 earlier this month.

However, Rio Tinto said a final decision had not been made. “No agreement has been reached and there is no certainty that a binding agreement will be signed,” the firm says.

FreeportMcMoRan and Rio Tinto established an unincorporated joint venture in 1995, which gave the latter control of 40 percent interest up to 2022 in certain assets and future production above specific levels in one of the blocks at Grasberg. |– The Jakarta Post

Hyflux seeks court protection to reorganise debt pile

Hyflux, a Singaporean firm that won accolades in the 2000s for its entrepreneurial chief executive, has applied to the Singapore High Court to begin reorganising its liabilities and businesses, as it tries to find room amid the prolonged weakness in Singapore’s power market to carry on with business.

Yesterday, the water treatment firm said it and five of its subsidiaries – Hydrochem (S), Hyflux Engineering, Hyflux Membrane Manufacturing (S), Hyflux Innovation Centre and Tuaspring – had entered a court application that automatically qualifies them for protection under a 30-day moratorium against their creditors’ claims.

The firm has appointed WongPartnership as its legal advisers and Ernst & Young Solutions as its financial advisers. – The Straits Times