Banking and Finance
Media
Part of The American Chamber of Commerce Journal
- Title
- Banking and Finance
- Creator
- Russell, R. E.
- Language
- English
- Source
- The American Chamber of Commerce Journal Volume XXVI (No. 3) March 1950
- Year
- 1950
- Rights
-
- Fulltext
- Feb. 16 — Secretary of Education Prudencio Langcauon reports to the President that his Department proposes the transfer of the sup port of intermediate grade schools to local governments and the levying of a specific school tax to meet the cost. It is also proposed to return to a seven-grade system, from the present six-grades, and to .abolish the double single-session program. S. N. Eisenberg, President of Eisenberg & Co., Inc. with head offices in Tokyo, calls on Vice-President Lopez in the latter’s capacity as Chairman of the Government Enterprises Council, in connection with plans to set up a ramie industry here. Feb. 17 — President Quirino issues Executive Order No. 303 “calling upon every inhabitant of the Philippines and mobilizing all government agencies and instrumentalities for the intensification of the national food production campaign”. Secretary Neri expresses Philippine satisfaction over the decision of the Australian Government permitting Sergeant Lorenzo Gamboa to enter Australia. Gamboa, married to an Australian woman, was last year refused permission to join his family there. Feb. 18 — Vice-President Lopez, in a speech before a meeting of fishery technicians at the Manila Hotel, scores the rampant use of dynamite in fishing here, declaring that this “illicit practice is a wanton destruction and spoliation” of the country’s fishery resources. Feb. 19 — Secretary of Agriculture Mapa announces that emphasis will be laid on increased production of local coffee and fruit in the present food production campaign. Feb. 20 — President Quirino signs the instruments of ratification of the International Wheat Agreement which will guarantee the Philip pines a fixed quota of flour and entitling the country to the world price estimated to be $.50 less per 50-pound bag than the free market price. Feb. 21 — The Cabinet approves a list of priorities in the allocation of dollar exchange prepared by a special committee composed of Secre tary of Commerce and Industry Balmaceda, Secretary of Agriculture and Natural Resources Mapa, Secretary of Public Works and Com munications Sanidad, Under-Secretary of Finance Llamado, Budget Commissioner Joven, and Central Bank Governor Cuademo. It also approves the recommendation of this committee to limit the disburse ment of dollars this year to the actual receipt of dollars from exports, from United States payments and expenditures here and from other inward remittances. The list includes items for food, shelter, clothing, medicines and medical supplies, education, for increasing exports, transportation, and for other industries, including industrial chemicals and machinery and materials for paper manufacture, the canning industry, household articles, soft drinks, etc. President Quirino assures a group of rice producers that the pur chase price of palay paid by the National Rice and Corn Corporation will remain at Pll a cavan. The NARIC desired to suspend further purchases unless the price was lowered to P9. The Cabinet directs the Department of Public Works to notify all architects designing government buildings to make use of locallymade items whenever possible. Feb. 22 — Secretary of Commerce and Industry Balmaceda states that a press interpretation that the issuance of the exchange priorities schedule is an “effort to salvage the rapidly deteriorating Philippine economy” is not justified. “Since the imposition of controls last December, the rapid drain on the country’s dollar resources has been checked, and Central Bank officials say that the immediate darfger of further drain on these reserves is now comparatively remote as a result of the existing controls . . . Central Bank economists estimated that during 1950 the expected total receipt of foreign exchange is about $58S,000,000. As of December 31, 1949, Central Bank dollar reserves amounted to $230,000,000. Not desiring to reduce this level of reserves, the Central Bank felt that in the pre paration of the foreign exchange budget, total disbursements should be limited to the estimated receipts of $585,000,000. This amount is by no means negligible. It represents more than three times the value of our prewar yearly disbursements of foreign exchange. It gives adequate allowance for the financing of government development projects, raw materials imports for existing factories, necessary remit tances for invisibles, as well as merchandise import of controlled and uncontrolled articles...” The Department of Public Works announces that the construc tion of a permanent grandstand on the New Luneta will begin soon. As the whole structure, seating 10,000 people, would cost P800.000, only the central portion, costing P250.000, will be built at this time. Feb. 23 — Announced that the Department of National Defense is considering the feasibility of establishing a small-arms and a small arms ammunition plant. Feb. 24 — Secretary of Agriculture Mapa informs the Cabinet that tests made in the manufacture of bags from saluyut have been very successful, and that such bags as a substitute for jute bags from India could save the country P15,000,000 annually. The Cabinet directs the Department of Foreign Affairs to lodge strong representations with the International Refugee Organization for the removal of the remaining refugees from Guiuan, Samar,—2,348 people of some 6000, most of them White Russians, sent there from China for temporary refuge. The departments of the Interior and of National Defense are also instructed to exercise more vigilance against the illegal entry of aliens which has increased since the intensification of the civil war in China. Feb. 25 — President Quirino reported to have issued a proclama tion setting aside 549,120 square meters of land owned by the People’s Homesite a,nd Housing Corporation along Timog Avenue, Diliman, Quezon City, for the site of the veterans’ hospital to be constructed from United States Government funds. Feb. 28 — President Quirino officially welcomes the foreign Junior Chamber of Commerce delegations which have arrived here to attend the Fifth World Congress of the organization to be held in Manila and Baguio, March 1 to 8. The group is headed by Theo Staar, of Brussels, President of the J. C. International. The President issues Administrative Order No. 109 creating a com mission to assist the President in the reorganization of the different executive departments, bureaus, and other entities of the Government, including the corporations owned or controlled by it; the Commission is composed of Ramon Fernandez, Chairman, and Luis P. Torres, Pio Joven, Jose Paez, Teofilo Sison, H. B. Reyes, Pablo Lorenzo, Aurelio Montinola, and Jose Gil, members. Vice-President Lopez asks approval of a Pl,000,000 overdraft for the National Tobacco Corporation to be used for purchase of native leaf tobacco, agricultural and other machinery, and the construction of curing barns and warehouses. Banking and Finance By R. E. Russell Sub-Manager, National City Bank of New York COMPARATIVE Statements of Conditions of the Central Bank: As of As of As of Aa of Jan. 31,'49 June 30 Dec. 1 Jan.31.‘S0 ASSETS (Tn thousands of pesos) CONTINGENT ACCOUNT Forward Exchange Sold............................................ P6.460 P 6,460 serve.................... P714.969 * P641.617 * P460,689 P442.432 Contribution to International Monetary Fund. 30,000 30,000 30,000 30,000 Account to Secure Coinage............... 113,106 113,306 113,306 113306 Loans and Ad vances.................. 77,047 ‘ 83,374 Domestic Secu rities 9,739 92,197 96,774 Due from Trea surer of Philip pines .................... 7,626 Other Assets......... 19,320 22,681 20,390 25,248 P877.395 P824.969 P793.629 P791.136 LIABILITIES Currency: Notes.. P621.521 P534.425 P555.576 P540749 Coins. . 73,035 74,283 74,384 74,723 Demand Deposits: Pesos.................... 169,351 135,438 117,682 128,571 Dollars................ — 40,649 * — — Securities Stabili zation Fund.... 2,000 2,000 2,000 2,000 Due to Interna tional Monetary Fund.................... 22,499 22,498 22,497 Due to Interna tional Bank for Reconstruction and Develop ment 2,389 2389 Other Liabilities. . 1,488 2,128 2,636 2,942 Capital.................... 10,000 10,000 10,000 10,000 Undivided Profits. — 3,537 6,464 7,161 P877.395 P824.969 P793.629 P791.136 ♦NOTE: The Demand Deposit liabilities in U. S. Dollars are deposits of the Treasurer of the Philippines which temporarily are being kept in foreign currency. These amounts are included on the Asset side aa part of the International Reserve. A comparison of the monthly statements of the Central Bank of the Philippines reveals a further drop in the International Reserve of over P 18,000,000. It had been hoped that the implementation of the Exchange Control regulations would accomplish a reversal, not merely a slowing of the downward trend which was so abrupt during September, October, and November of 1949. The full impact of the more stringent import control regula tions which came into force on December 1 was not reflected in January/February import figures. The back-log of 103 orders in December was not cleared and paid for until January and February. We look for a lessened demand for dollars in March to pay for imports. About the middle of February, the Rehabilitation Finance Corporation obtained an additional P5,000,000 loan from the Central Bank which brings its total borrowings from this source at present up to P25,000,000. These funds are in turn loaned by the R.F.C. for rehabili tation projects which it is hoped will increase the nation’s productivity. Circular No. 21 of the Central Bank pf the Philip pines offered some relief to the gold producers in that it requires them to sell only 25% of their production to the Central Bank at P70 an ounce, leaving them free to sell the remaining 75% in the local market, at prices currently quoted at P108-P116 an ounce. At the end of January little or no gold had been acquired by the Central Bank under the provisions of this Circular, but the February statement should show some increase in the gold holdings. There was a demand for silver coins during the last week of January and the first weeks of February reminis cent of 1945-46, during which period it seemed that the saturation point would never be reached. The Central Bank has advertised that the value of the silver content in these coins is far below their value as money. The Gov ernment is taking steps to prevent hoarding and smuggling with the result that the past two weeks have seen a return to more normal conditions. Stock Market By Roy Ewing Swan, Culbertson & * Fritz, Inc. January 28 to February 28 FOR the past month prices on the Manila Stock Ex change have moved in a narrow range with volume of business done down substantially from the pre ceding months. The high as measured by the mining share average was on February 11 at 85.96 and the low on February 8 at 81.73. The biggest daily volume was also on the 11th, a favorable indication. With the exception of Surigao Consolidated, the shares of gold mines declined moderately, ignoring the fact that on the free market here gold sold during the period from P110 to P116 per fine ounce. Surigao responded to favor able news frorp the property, as did Lepanto, a copper pro ducer as well as gold. The chrome producers were stronger on news of improved demand and a better price for chrome in the United States. In the commercial and industrial section the sugar shares remained in demand, reflecting both satisfactory world news on the commodity and the favorable position of “dollar earners” here. In an attempt to clear up some of the confusion which exists in regard to the buying and selling of Philippine securities by non-residents, we list the following regulations contained in Notification to Security Dealer No. 1 which was issued by the Central Bank on January 18, 1950. 1. Authorized security dealers (all active members of the Manila Stock Exchange and all Manila Banks) may license the purchase of Philippine Securities by non-residents provided: a. immediate payment is received in U.S. dollars which must be sold to authorized agent of the Central Bank, b. payment in pesos is received from funds already in the non resident’s account with his bank or brokerage firm. The same license that is issued to cover the above may be used to mail the certificate to the non-resident if done within 30 days of date of purchase. 2. Authorized security dealers may license the sale of Philippine securities for a non-resident provided: a. the securities have been registered with the Exchange Control Office, b. the proceeds remain in the seller’s account with the broker or are paid to his peso bank account in the Philippines. All deliveries or receipts of securities or funds other than the above require a special license from the Central Bank. Credit By W. J. Nichols Treasurer, General Electric (P.I.) Inc. AS restrictions on exchange transactions extend into the third month, more changes in the credit situation are developing. In addition to continued tightening of credit-granting in general, delays in the issuance of licenses to buy exchange are resulting in higher investments in accounts receivable. This is particularly true in cases where indentors formerly selling for dollars have to wait until their cus tomers obtain the necessary exchange. In many instances 30-day accounts are for this reason not being liquidated within the current period and become delinquent through no fault of the customer. It is no longer a simple matter to determine the prob able turnover of receivables, nor to analyze their status. In addition to the usual factors, credit managers must now also consider a customer’s ability to obtain exchange within a reasonable length of time. Sales on the installment basis continue to decline. In view of the probability that import and exchange controls will be widened in scope in the future, it is not likely that for some time to come there will be any substantial change in credit facilities. Electric Power Production (Manila Electric Company System) J. F. Cotton Treasurer, Manila Electric Company 1941 Average—15,316,000 KWH KILOWATT 1950 January.......................................................... 37,661,000 * February........................................................ 33,810,000 ** March............................................................. April................................................................ May................................................................. June................................................................. July.................................................... ......... August............................................................ September..................................................... October........................................................... November...................................................... December...................................................... hours 1949 33,745,000 31,110,000 34,776,000 33,048,000 34,453,000 34,486,000 35,726,000 35,394,000 35,763,000 37,461,000 35,856,000 38,673,000 420,411,000 Total....................................... ** Partially estimated Output in February was 2,700,000 Kwh or 8.7C' C over the same month last year. The principal reason for de creased output in February was the shortness of the month, but there was also a slight decrease in the average daily output. Real Estate By C. M. Hoskins (Of C. M. Hoskins fif» Co., Inc., Realtors') REAL estate sales in Manila and suburbs continued at a high level during February, 1950, totalling P6.705,415, as compared with P8,041,306 for January, and slightly above the past 6-month average. Sales in Manila for February amounted to P3,002,289, and for the suburbs, P3,703,126. The suburbs taken into account are Quezon City, Rizal City, and the municipalities of Caloocan, Malabon, Navotas, San Juan, Mandaluyong, Makati, and Parafiaque. The monthly figures are as follows: 104