The national government’s obligations at the end of the first nine months rose 0.8 per cent from 7.1 trillion pesos a month ago and climbed 11.1 per cent from 6.44 trillion pesos a year ago, the latest Bureau of the Treasury data showed.

Of the total, 64.1 per cent or 4.59 trillion pesos were sourced locally, up 0.3 per cent month-on-month and 9.5 per cent year-on-year.

“The [month-on-month] increase in domestic debt was due to the net issuance of government securities amounting to 14.54 billion pesos and the depreciation of the peso that increased the value of onshore dollar bonds by 310 million pesos ,” the treasury explained.

The treasury noted that the peso weakened against the greenback to 54.102 last month from 53.475 in August.

The Cabinet-level interagency Development Budget Coordination Committee (DBCC) this month projected the peso-dollar exchange rate to average 52.50-53 to $1 this year and 52-55 to $1 starting next year until 2022, a higher range than the previous assumption of 50-53.

The peso slid to 13-year lows on the back of concerns about the widening deficit of the current account, a component of the country’s balance of payments.

At the end of June, the current account deficit ballooned to $3.1 billion (Btxxxxxx 0, euivalent to 1.9 per cent of gross domestic product, from $133 million or only 0.1 per cent of gross domestic product (GDP) a year ago, mainly on the back of an also wider trade-in-goods deficit as imports sustained strong growth while merchandise exports dropped.

Meanwhile, foreign debt also increased by a faster 1.6 per cent month-on-month and jumped 14 per cent year-on-year to 2.57 trillion in September.

“The increment in external debt was due to net availments of foreign loans amounting to 22.52 billion pesos and the 29.68-billion peso impact of local currency depreciation against the US dollar. This was slightly offset by the net depreciation of third-currency denominated debt amounting to 11.13 billion pesos,” the treasury said.

Last week, Finance Secretary Carlos Dominguez III told the Senate finance committee that “with sustainable fiscal policy and prudent debt management, we expect the debt-to-GDP ratio to continue its downward trajectory path in the medium-term from 42.1 per cent in 2017 to 38.6 per cent in 2022.”

The debt-to-GDP ratio measures the share of the government’s outstanding obligations to the growing economy.

The latest Department of Finance data showed that the gross national government debt-to-GDP ratio as of June stood at 42.5 per cent, the same as a year ago but slightly higher than end-2017.

“This will be supported by a financing programme that will continue to favour domestic borrowings, following a 65:35 mix in 2018 and a 75:25 mix from 2019 to 2022. Our proactive liability management agenda has decreased the burden of debt on our budget, creating more fiscal space to fund social commitments,” Dominguez said.

For his part, Budget Secretary Benjamin Diokno told the 2018 Euromoney Philippines Investment Forum last week that the Philippine economy has a “sound” credit profile that “garnered the attention of credit rating agencies.”

Procter & Gamble (P&G) is investing an additional US$30 million (Bt990 million, S$41.5 million) in its digital innovation centre in Singapore, one year after it pumped in an initial US$100 million and co-launched its E-Centre with the Economic Development Board (EDB).

The new investment is part of the multinational consumer goods company’s launch of E-Centre 2.0, which is an expansion of its existing digital innovation programme with the EDB. Part of the funds will go towards its first digital omni-channel retail centre, i-Singapore Digital Omni-channel Centre (i-SIDOC), which enables P&G to work with regional retailers to create actionable knowledge and retail solutions in multi-channel consumer shopping.

The platform will be located with the company’s Singapore Innovation Centre and omni-channel store. The funds will also support new supply chain projects and a new team of data scientists.

Through the E-Centre, P&G supports partners and employees by equipping them with skills to leverage digital technology and solve business problems.

In the week leading up to the opening of E-Centre 2.0, P&G Asia Pacific hosted its inaugural digital technology event, ONward, which included a “digital university” where more than 1,000 employees went through 5,000 hours of training in five days.

The event also offered more than 500 digital tech companies, including start-ups, small and medium-sized enterprises and other companies a chance to apply to develop solutions for nine business challenges pitched to them by P&G. This will help the consumer giant to co-innovate with external specialists. – The Straits Times

More China-Cambodia trade settled in yuan

There is an upward trend in using the Chinese yuan for trade settlements between Cambodia and China, with more banks in the Kingdom facilitating such transactions.

And the reason for this is that Chinese investors are seeking ways to reduce their risk by depending less on the greenback, National Bank of Cambodia’s deputy director general of central banking, Khou Vuthy, said.

Speaking to reporters at the Renminbi (RMB) forum with the theme Asean’s Economy and the Internationalisation of RMB, organised by the Bank of China (Cambodia), he said usage of the yuan for cross-border settlements had been increasing in the last few years.

“Last year, cross-border settlements in yuan represented about 10 per cent of the total trade between Cambodia and China,” he said.

This, he said, proved that the share of payments in yuan is getting larger. An NBC figure showed cross-border settlements in yuan in 2016 represented only 2.5 billion (Bt12.4 billion, $377 million), or approximately seven per cent of the two countries’ total trade.

“I am optimistic that using the yuan for cross-border settlements will keep increasing in the Cambodian banking system. The evolution is parallel with regional and global trends.

“Many countries try to reduce their dependency on the dollar as the only currency for cross-border trade by promoting the use of their own currencies together with the yuan,” Vuthy said.

The NBC, he said, has allowed banks and financial institutions to use the yuan. Two Chinese banks operating in Cambodia – the Bank of China and Industrial and Commercial Bank of China Ltd – are allowed to use the yuan for payments and as a clearing facility. Thirteen other commercial banks also operate using the yuan.

According to NBC deputy governor Sum Sannisith, who made the opening remarks at the forum, bilateral trade between Cambodia and China was worth $6.06 billion last year.

Cambodia imported $5.3 billion from China, while the volume of Cambodian exports to that country reached $758 million. – The Phnom Penh Post

Garuda introduces new business class on Bombardier

National flag carrier Garuda Indonesia has introduced a new flight class product called “Explore Business Class” on its Bombardier CRJ1000 aircraft .

The product is said to offer “prestige value of service” with a more competitive ticket price.

The newly launched product will consist of 12 seats located in the three front-most rows.

“In line with the promising market potential for short-haul flights served by the Bombardier CRJ1000, we expect the ‘Explore Business Class’ to be able to accommodate the market demand for the premium flight service concept,” said Garuda Indonesia commercial director Pikri Ilham Kurniansyah in a statement.

He added that the carrier had begun offering the new service on Thursday and would start operating it on Nov. 1.

Passengers interested in trying the new product can purchase tickets through the airline’s mobile app or website, as well as its ticketing sales offices. – The Jakarta Post

Philippines’ central bank tightens rules on cyberhacks

Banks in the Philippines must now report to authorities any cyberhacking incident or disruption to technology-based financial services they provide clients within two hours of their discovery, the central bank said.

In a statement, the Bangko Sentral ng Pilipinas said these new regulations—significantly tighter than the 10-day reporting window previously allowed for such events—were being put in place “in response to the increasingly persistent, sophisticated and targeted attacks launched against financial institutions.”

“Prompt reporting of these incidents by supervised financial institutions will allow the Bangko Sentral to have an enhanced visibility on the changing information technology risk landscape and to proactively ensure that their impact and resulting risks are minimized and contained to avert potential systemic risks to the financial system,” it said.

Banking industry insiders have noted that local financial institutions have been experiencing more cyberhacking attempts in recent years, from suspected large scale attempts to compromise bank computers to small scale “phishing” activities perpetrated on unsuspecting clients.

Some large local banks have also experienced disruptions in their ATM network services, some lasting as long as four days, causing inconveniences to thousands of clients.

The tighter regulations in response to these issues were approved by the Monetary Board recently to cover “cyber-related incidents and operational disruptions.”

Having quick access to information on these incidents will enable regulators to alert other banks, industry associations and other relevant stakeholders that may be affected by a specific attack. – Philippine Daily Inquirer

E-commerce players to be required to obtain tax numbers

The Indonesian government has long planned to collect taxes from e-commerce companies, but officials have hinted that the Finance Ministry will not issue a specific regulation on the digital business anytime soon.

The head of the Finance Ministry’s state revenue policy center, Rofyanto Kurniawan, said that his office was focusing on helping e-commerce players create reports on their businesses for submission to the government.

“The initial step is to help e-commerce players make reports,” Rofyanto said.

Taxation Director General Robert Pakpahan said the tax office was studying how to enforce tax compliance among digital businesses and that in the near future, his office would issue a regulation requiring e-commerce players to have tax numbers.

“By having an NPWP, they will be required to submit their business data to the taxation Directorate General so that self-assessment can be applied in tax returns,” Robert said.

Taxation Directorate General spokesman Hestu Yoga Saksama said that with the regulation, the target would be individuals and micro, small and medium enterprises that sell goods and services through e-commerce platforms.

Hestu said the platforms were expected to help the tax office encourage e-commerce players to obtain NPWPs. “The point is that e-commerce players can conveniently conduct business while also abiding by tax regulations,” he added.

The official added that the prevailing regulation on final income taxation that required MSMEs to pay 0.5 percent corporate income tax could be use to collect taxes from e-commerce players.- The Jakarta Post

Speaking at a meeting titled “CPTPP: Opportunities and Challenges for Vietnam” last week in HCM City, Pham Quynh Mai, deputy head of the Ministry of Industry and Trade (MoIT)’s Multilateral Trade Policy Department, said with its supporting industries remaining weak and rules of origin being strict in many countries, it is difficult for Vietnamese exporters to fully capitalise on the CPTPP.

However, the clothing and leather and textile sectors, among others, would see the biggest growth under CPTPP, she said.

Clothing and leather products, chemicals, plastic products, and transport equipment and machinery are expected to get an export boost while imports will grow in almost all sectors.

The CPTPP will provide greater market access to Vietnamese firms but also open up the country to foreign products, increasing competition.

Experts said industries such as automobile and agriculture would face intense competition.

Tran Thi Thu Huyen, head of the Ministry of Finance’s International Cooperation Agency, said under the CPTPP average trade-weighted tariffs would drop from 1.7 per cent to 0.2 per cent for Vietnamese exporters.

Non-tariff measures are predicted to reduce by 3.6 percentage points in terms of tariff equivalence, she said.

As market access increases and tariff commitments take effect, sectors such as textiles, footwear, electronics, and equipment would have an opportunity to increase their exports to other member economies, she said.

Trinh Thi Thu Hien of the MoIT’s Export-Import Department said with strict rules of origin, Vietnam would have to develop supporting industries to benefit from the trade deal.

Tran Thi Thanh Thuy of the Multilateral Trade Policy Department said Vietnam planned to improve the investment environment and protect intellectual property rights to attract investors.

Government institutions and administrative systems also needed to be reformed to take advantage of the CPTPP, she said.

Experts said the effort could be expensive in the short term, but in the long run would help Vietnamese companies take full advantage of such trade agreements.

It is also necessary for Vietnam to focus on small and medium-sized enterprises (SMEs) and reform State-owned companies.

SMEs account for a majority of the economy and labour market, and the government should support them if it wants the SMEs to align themselves further with the global supply chains.

Vietnam is expected to fulfil its trade liberalisation commitments and ratify the CPTPP within this year.

At the Vietnam Nam Business Summit held last month, Prime Minister Nguyen Xuan Phuc had said his Government would summit the CPTPP to the National Assembly for approval this month.

New Zealand ratified the CPTPP on Wednesday, taking to four the number of economies that have done so.

New Zealand Minister for Trade and Export Growth David Parker said Japan, Mexico and Singapore had ratified the deal in July and Australia and Canada are expected to join very soon, which means the tariff reductions and increased exports would begin very early in 2019.

The other signatories are Vietnam, Brunei, Chile, Malaysia, and Peru.

The CPTPP would come into effect 60 days after at least six member countries ratify the trade pact.

The trade agreement was signed last March following a period of turbulence caused by the departure of the US.

It is designed as an open free trade agreement, enabling economies to join by accepting its standards and signing agreements with its member economies.

“In the last four years under President Joko Widodo’s leadership, the government has [taken a serious stance] in addressing land and spatial planning issues,” the said.

He said the government had also started to address neglected and idle land, including plots with right-to-build (HGB) certificates and those with other land certificates that the property’s owner had not utilised.

Sofyan said the agrarian reform programme also included redistributing land that had been taken over by large corporations and restoring the property to private ownership.

Through the comprehensive systematic registration programme (PTSL), the government aimed to assure legal certainty over land ownership to reduce land disputes and to facilitate smooth infrastructure development across the country, the minister added.

Apart from intensifying its land distribution, the government had also introduced its popular land certification programme.

The central bank said the cluster showed robust growth in the past two quarters, and is expected to sustain and contribute more to the economy next year.

The cluster contributes to around 30 per cent of the economy currently, based on the latest available figures. It will reap benefits from digitalisation and innovation, said MAS.

Digital payments, for example, have been expanding rapidly in recent years. The value of cheque transactions in Singapore fell by an average of 1.7 per cent a year from 2012 to 2016, while the value of cashless transactions grew by 7.2 per cent a year in the same period, said MAS.

It added: “Further expansions by established payment players as well as more entrants in the burgeoning e-payments space could provide a fillip to growth in Singapore’s financial services and infocomm technology sector.”

Fitch Solutions’ head of Asia country risk Chua Han Teng said the modern services cluster benefits from a greater adoption of digital and smart technologies, and its growth could partly be due to the schemes put forward in the Government’s Smart Nation initiative, the national effort to drive technological adoption in Singapore.

United Overseas Bank senior economist Alvin Liew said that in the context of rising trade tensions, the cluster is also less susceptible to trade shocks compared with other types of services, such as in the wholesale trade, transport and storage industries.

Singapore’s economy is likely to expand at a slower pace for the rest of the year, averaging at the upper half of its 2.5 to 3.5 per cent range, moderating slightly in 2019.

However, the modern services cluster will not be completely spared if there is a global economic slowdown, said Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye.

“For instance, the finance and insurance sector tends to be cyclical, and a confidence shock due to the US-China trade conflict may weigh on securities or forex trading activities,” they said.

Investment in this cluster – for instance, in the IT sector – may also slow as firms hold back on spending amid rising uncertainties.

Bank lending, too, started to slow in August this year, coming off from a faster pace in July.

The central bank said the financial sector could also be weighed down by cyclical headwinds, stating how global financial jitters have caused a rout in emerging market assets this year.