Banking and finance

Media

Part of The American Chamber of Commerce Journal

Title: Banking and finance
Creator: Russell, R. E.
Language: English
Year: 1950
Rights
Abstract: Comparative statements of conditions of the Central Bank.
Fulltext: Acting Secretary of Foreign Affairs Felino Neri conveys condol ences to the families of Professors Conklin and Pittman. Jan. 18 — President Quirino is reported to have indicated “deep concern” when informed of the killing of Col. Valentin Salgado, senior aide to Maj. Gen. Mariano N. Castaneda, head of the Armed Forces of the Philippines, in an attempt on the latter’s life yesterday after noon. The General’s small party, out riding, was ambushed near Camp Murphy, just outside of Manila. The Vice-President, Ambassador Cowen, and a number of public works and American Embassy officials meet at Malacanan to discuss various public works projects of this year and the turnover of the activ ities of United States federal agencies in 1951. Jan. 22—Secretary of Finance Pedrosa leaves for the United States to join President Quirino. Jan. 20 — U. S. Ambassador-at-large Philip C. Jessup, on a factfinding tour of the Far East, arrives in Manila from Hongkong for a four-day stay after which he will proceed to Saigon. Later he will pre side at the conference of American diplomatic officials to be held in Bangkok. [Despite his crowded official schedule, a luncheon was given in his honor by the American Chamber of Commerce on the 23rd to which representatives of the other chambers of commerce and the Rotary Club were invited.] Jan. 21 — According to a report submitted to the President by Secretary of Education Prudencio Langcauon, the enrolment in the public school system is now around 4,500,000, over 1,000,000 more than the previous school year. Jan. 23 — The First Session (100 days) of the Second Congress of the Republic of the Philippines opens.'President Quirino's “State-ofthe-Nation” address, recorded in his hospital room in Baltimore, is broadcast from San Francisco. Jan. 24 — The Vice-President, in a speech before the 34th annual communication of the Grand Lodge of F. & A. M. of the Philip pines, attended by some 500 delegates from different parts of the Phil ippines and from Japan, Guam, and Saipan, issues an appeal for na tional unity “during these times of confusion” and praises the masons for having “stood firm in your principles — liberty, equality, justice, truth, and fraternity”. According to a report submitted by Under-Secretary of Finance Crispin Llamado, government revenues during the 6 months from July 1 to the end of the year declined by 14%, compared with the same period last year, Pill,078,361 as against P130,494,330. Largest decreases were registered in revenue from licenses and business and occupation taxes (drop of P14,238,141), and from excise taxes on imported goods (drop of P7,496,812). The Cabinet rules that a government entity which takes over the assets of a defunct government enterprise must also assume the latter’s liabilities. The decision was taken in connection with the Gov ernment Marine, Railway, and Repair Shops on Engineer Island which was transferred to the National Development Company. Jan. 25 — The President and Acting Secretary of Foreign Affairs Felino Neri send telegrams of congratulation to the President and the Foreign Minister of the Republic of India on the occasion of the inauguration of the Republic. The President in Baltimore receives as a souvenir the first cakes of Camay soap manufactured in the Philippines by the Philippine Manufacturing Company, and on the occasion “renews his assurances to American investors that they will receive fair returns for their parti cipation in production activities in the Philippines.” Secretary of Education Langcauon announces that a 135-page report of the UNESCO Consultative Educational Mission, which con ducted a comprehensive survey of the Philippine educational system, is now in the press and will shortly be released. The Mission was headed by Floyd W. Reeves, Professor of School Administration, University of Chicago. The survey cost Pl20,000 and represents the biggest UNESCO gift to the Philippines so far. Jan. 26 — President Quirino felicitates Premier Nehru in a mes sage from Baltimore. Vice-President Lopez receives the second case of “Camay” soap manufactured in the Philippines. F. N. Berry, general manager of the Philippine Manufacturing Company, tells the Vice-President that the soap represents the first "important American brand of toilet soap to be manufactured entirely in the Philippines”, as well as a capital invest ment of around Pl,500,000. Jan. 27 — Announced that President Quirino has decided against further suspending the enforcement of the pre-war ban on amusement and gaming places in prohibited zones,—not within 1,000 lineal meters from any city hall or municipal building, provincial building, public plaza, public school, church, hospital, athletic stadium, public park, or any institution of learning or of charity, and 200 lineal meters in the case of bars, bowling alleys, and pool halls. Acting Foreign Secretary Neri discloses that the Philippine draft of a proposed bilateral barter trade pact with SCAP has been completed and will be sent to Japan for negotiation. A similar treaty with Thailand is under negotiation at the present time. Secretary of Labor P. Lovina submits to the Cabinet the text of a statement he made recently before the House Committee on Import Control in order to clarify his position in view of charges from some quarters that his statement ran counter to the Administration’s estab lished policy. He states that he holds that import control is “absolutely essential... if we are to salvage our economy”, but that he pointed out the effects of the control on employment, wages, and prices so that the “harsh effects” upon the workers could be minimized as much as pos sible. Jan. 28 — Mayor D’Alessandro of Baltimore presents President Quirino with the “keys of the city”. Dr. Charles Tambu, former Indonesian Consul General in the Philippines, presents his credentials as Charge d’affaires of the Em bassy of the United States of Indonesia here. Ambassador Alexander Maramis, first diplomatic envoy from Indonesia, is expected in Manila shortly. The Department of Foreign Affairs has received from the Israeli Government the nomination of Ernest Simke, a Philippine citizen residing in Manila, as Honorary Consul for Israel in the Philippines. Jan. 31 — The Cabinet concurs in the decision of the Import Con trol Board to waive technicalities in order to solve the congestion at the piers. Secretary of Commerce and Industry notified the Cabinet that the Board had already taken certain steps, including the issuance of release papers for the goods held up at the piers provided that the im porters concerned post bonds to guarantee that the goods fall within their respective authorized quotas, and the cessation of the investiga tion of alleged anomalies by Hilarion Beronilla which was interfering with the release of the goods. The Secretary pointed out that “a large percentage of the goods are perishables rotting at the piers”. Vice-President Lopez, as Chairman of the Government Enterprises Council, issues rules restricting the exclusive use of government vehi cles by officials of government corporations. Under the new order, only the chiefs of the corporations are allowed the exclusive use of motor vehicles and only on official business; no official or employee may be paid any allowance for the use of his own automobile. Banking and Finance By R. E. Russell Sub-Manager, National City Bank of New York Contribution to International /’■COMPARATIVE Statements of Conditions of the Central Bank: As of As of As of As of Jan. 31 June 30 Nov. 30 Dec. 31 ASSETS (In thousands of pesos) International Re serve .................... P714.969 * P641.617 * P469.137 * P460.689 *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 as part of the International Reserve. Monetary Fund. Account to Secure 30,000 30,000 30,000 30,000 Coinage............... Loans and Ad 113,106 113,306 113,306 113,306 vances.................. — — 109,178 77,047 Domestic Secu rities.................... — 9,739 46,784 92,197 Due from Trea surer of Philippines.................... — 7,626 — Other Assets......... 19,320 22,681 20,797 20,35 P877.395 P824.969 P789.202 P793.629 LIABILITIES Currency: Notes. . P621.521 P534.425 P573.614 P555.576 Coins. . 73,035 74,293 73,880 74,384 Demand Deposits: Pesos.................... 169,351 135,438 96,591 117,682 Dollars................ — 40,649 * 286 * — Securities Stabili zation Fund... . 2,000 2,000 2,000 2,000 Due to Interna tional Monetary Fund.................... 22,499 22,499 22,498 Due to Interna tional Bank for Reconstruction and Develop ment 2,392 2,389 Other Liabilities. . 1,488 2,128 1,777 2,636 Capital.................... 10,000 10,000 10,000 10,000 Undivided Profits. — 3,537 6,163 6,464 P877.395 P824.969 P789.202 P793.629 CONTINGENT ACCOUNT Forward Exchange Sold.................................................................. P 6,460 The closing statement for 1949 reveals the reduction in the International Reserve of over P250,000,000 during 66 the year, which brought on the Exchange Control on De cember 9, 1949. However, the drop in this Reserve for December was only P8,045,000 as against P58,500,000 in November. Governor Cuaderno of the Central Bank has pointed out that this actually represents an increase in the reserve from the lowest point reached early in December and he indicated his confidence that this reserve would increase as Exchange Control became more effective. Money in circulation was less than in November but still greater than any other month since April. The total of Loans and Advances (advances to the Government and the Philippine National Bank) and Do mestic Securities (representing advances to the Philippine Treasury secured by Government bonds to supply funds for government projects) has reached the highest point for the year, showing net increase of P 13,000,000. The Exchange Control Board has issued several noti fications and memoranda during the past month which have enabled importers and the banks to prepare applica tions for exchange and reports to the Control authorities more satisfactorily. The banks have been given general licenses to sell foreign exchange for travel and for education purposes provided certain conditions are fulfilled. This should help to relieve the congestion at the Exchange Control leaving it free to act on the doubtful cases. Manila Market.—Modification of the Central Bank’s gold policy caused great strength following the holidays, but other factors have since appeared and have caused the market to give up almost all its gains. At the moment inflationary and deflationary forces appear pretty much in balance, and most investors have retired to the sidelines until they can assess the consequences to mining companies of recent changes in the country’s financial and economic policies. In the Commercial and Industrial Section of the market, Sugar shares have been in excellent demand at advancing prices. Bank shares have also been firm. 1949-50 Range High Low MINING SHARES High Low Close Change Total Salt 94 P 32 12 Oil 3 5 68 07 75 : 0052 30 ; 2 M.S.E. Mining Share Average Acoje Mining Company.... Antamok Goldfields Mining Co............................................ Atok-Big Wedge Mining Co.. Baguio Gold Mining Co........ Balatoc Mining Company.. 93 P 3 55 82 •' F 16 29 17 3 Up 1.42 85,( 016 008 038 025 28 Stock and Commodity Markets By A. C. Hall A. C. Hall Company December 24, 1949, to January 27, 1950 NEW York Stocks.—For the seventh consecutive month, the market moved forward into new high ground, but during the early part of January it ap peared to have encountered a formidable barrier around the 202 mark of the Dow Jones Industrial Average. At this level, at the present time, there appears more stock for sale than, can be absorbed. It seems likely, in fact, that, before the hurdle can be cleared, technical strength will have to be gained by the usual process of a tempo rary move in the opposite direction. Over the period of this review, the range of the Dow Jones daily closing ave rages was as follows: Dec. 23 High Low Jan. 27 Change Industrials.................. 198.88 201.98 196.81 199.08 Up .20 Rails............................. 51.55 55.80 51.23 54.82 Up 3.27 Utilities........................ 41.02 41.87 40.86 41.87 Up .85 Of the various market groups, rails improved, motors and chemicals were mixed, steels and coppers firmer, while oils were heavy. As has occurred in recent months, there was pronounced strength in some individual issues, in particular American Can which has advanced 15 points on talk of a split-up. Industrial activity on the whole is likely to continue at a high rate during the first half of the year, but pros pects for the remainder of 1950 are less clear at this stage. Until more is known about the latter, it is unlikely that the market can make further progress on the upside. Commodities.—Wheat and flour buyers are following a hand-to-mouth policy, but there has been no important increase in offerings: Chicago March Wheat closed at $2.17-1/8, compared to $2.18-1/2 last month. In Corn, the loan is still the most important factor; Chicago March Corn closed at $1.28-7/8, against $1.31-7/8 last month. Good domestic and export demand continues in Cotton, with New York March Cotton closing at 31.30, compared to 30.66 in December. In Sugar, the United States domestic quota is realistic and the Cuban production-peak is at hand, but aggressive world demand is a firming factor; New York March #6 Contract advanced from 5.16 to 5.22 during the month. 70 02 02 043 015 11 04 Benguet Consolidated MinCoco Grove, Inc..................... Consolidated Mines, Inc.... Itogon Mining Company... I.X.L. Mining Company... Lepanto Consolidated MinMindanao Mother Lode Masbate Consolidated Min ing .......................................... Misamis Chromite, Inc........ Paracale Gumaus Cons........ San Mauricio Mining Co... . Surigao Consolidated Mining Co............................................ Suyoc Consolidated Mining Co........................................... United Paracale Mining Co.. 1949-50 Range High Low 200 750 00 185 00 510 220 4 00 034 01 09 07 00 00 00 145 135 00 00 100 00 95 00 70 00 70 00 50 00 25 00 23 00 64 70 41 56 21 08 29 025 10 15 08 18 025 09 COMMERCIAL SHARES 30 00 00 2 75 00 95 82 165 28 00 90 00 75 9 024 55 04 50 0041 Up Up Off Up Up Up Up Off Up Up .65 .002 .002 .015 .02 21,50 10,00 3,930,00 232,00 240,00 60 60 02a 15 08 14b 025 09 Up .03 266, 20; Up .04 Up Up .005 .02 20, ( 130,( Bank of the Philippine Is..................................... P87 China Banking Corp... 189 Central Azucarera de Bais................................ Central Azucarera de la Cariota.......................... Central Azucarera del Pilar............................... Central Azucarera de Sara Ajuy.................... Central Azucarera de Tarlac............................ Filipinas Cia. de SeguManila Broadcasting Co. Manila Wine Merchants, Inc.................................. Metropolitan Insurance Co................................... Pampanga Bus Company High Low Close Change Total 750 220 135 00 135.00 135.00 Up P15. 95 00 70 00 00 2 00 85.00 70.00 .75 2.00 85.00 Up P 2. 23.50b .75 Off 2.10b 27 20 .17 22, t 70 28,00 40 ____________ _____ _ 065 Philippine Oil Develop ment Co........................ Philippine Racing Club. San Miguel Brewery, Inc.................................. Williams Equipment Co. Pfd.................................. Williams Equipment Co. 00 7 25 1 1075 22 .0025 .02 1,007,00 15,20 38 00 29.00 29.00 Off 3.50 27,85 80 00 80.00 50 8.00 80.00 8.50 Off .50 95 8. Over-the-counter business reported during the month included Bacolod Murcia, 5,00 shares at P17; Manila Jockey Club, 1,100 shares at Pl.65; Philippine Education Co. 120 shares at P100; Philippine Iron Mines, 100 shares at P35; San Miguel Brewery 83 preferred, 255 shares at P100; and Victorias Milling Co., 750 shares between P250 and P270 Credit By W. J, Nichols Treasurer, General Electric (P.I.) Inc. A great many importers handle merchandise on an indent basis in which the time of delivery extends over several months. Due to time limitations which the Central Bank of the Philippines has imposed on the opening of letters of credit, such indentors are at present unable to insure that the goods they import will be paid for when they arrive. As a result, some importing firms 67