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New opportunities for the Guangdong-Hong Kong-Macao Greater Bay Area

PwC has launched an analysis of the “New Opportunities for the Guangdong-Hong Kong-Macao Bay Area”. Hong Kong’s Chief Executive Carrie Lam highlighted in her first Policy Address that the Hong Kong SAR Government will actively participate in taking forward the development of the Bay Area and create favourable conditions for diversifying Hong Kong’s industries, in particular for promoting innovation and technology development. The report answers vital questions - How should the Bay Area develop in the future? What opportunities will it bring for local enterprises and residents? Will it create a globally competitive city cluster, after the world's three leading bay areas - in New York, San Francisco and Tokyo?

GDP of the Bay Area 9+2 cities and Guangdong Province, 2016 (RMB 100 million)

Here are some highlights of the report:

  • Total GDP of Guangdong, Hong Kong and Macao regions was equivalent to 14% of the national economic aggregate, making the region “as rich as a country” in terms of total economic size and population.
  • Apart from the obvious advantages in many areas of the manufacturing industry, the Bay Area has a very prosperous tourism industry characterised by big market size and large numbers of visitors.
  • The Bay Area also leads in insurance, finance, technology, real estate development, automobile and home appliance manufacturing, etc., and some of the industries even outpace their global counterparts.
  • The “三” shaped city cluster is an outstanding feature in the world, for there are no such big three cities so close to each other at home and abroad.
  • Compared with the rest of the country, the 9+2 cities are better developed, have greater demands and are better positioned to be developed into smart cities.

Megaworld deploys buses for hospital workers

Tycoon Andrew Tan-led property giant Megaworld Corp. has deployed its Citylink buses – erstwhile used to transport people across its townships – to provide free daily transport to healthcare personnel to and from various hospitals in Metro Manila during the month-long quarantine of Luzon.

In coordination with the Department of Transportation (DOTr), the buses will bring healthcare workers to and from Pasig City General Hospital and Makati Medical Center, from March 23 to April 12. The daily routes will be operational from 4:30am to 7:00pm.

“In every route, we can transport around 120 healthcare front-liners to two hospitals assigned to us. We are happy to support the government during this time when our healthcare front-liners are in need of free transport,” Arnie Batac, Megaworld head of estate management, said in a press statement on Monday.

High rates for T-bills showed investors keeping cash, prompting rejection of all bids

The Bureau of the Treasury rejected all bids for T-bills it offered on Monday as investors held on to their cash in the middle of a Luzon-wide quarantine against COVID-19 that has caused massive disruption to businesses.

The full rejection came in the wake of “throw away bids” as there was “preference to hold cash” during the quarantine period, National Treasurer Rosalia V. De Leon said. The quarantine had already caused 700 factory closures.

In a statement, the Treasury said average bid rates climbed to 3.841 percent for the benchmark 91-day, 4.766 percent for the 182-day, and 5.35 percent for the 364-day T-bills—all “higher as expected.”

Two weeks ago, three-month debt paper fetched an average rate of 3.024 percent, while the six-month and one-year IOUs were awarded last week at 3.398 percent and 3.557 percent.

Also, tenders across the three tenors, or maturity periods, reached only P14.5 billion—P7.5 billion for the P6-billion 91-day, P4.1 billion for the P6-billion 182-day, and P2.9 billion for the P8-billion 364-day—making the auction undersubscribed of the P20-billion total offering.

With the quarantine lasting for four weeks, De Leon said she “expected this to continue,” referring to the “not serious” bids and tepid demand.

Last week, De Leon said that even as the Bureau of Internal Revenue (BIR) extended until May 15instead of the mandatory April 15 its deadline for taxpayers to file and settle income taxes, the government can still afford to finance its priority programs and projects.

Asian shares, US futures sink as virus crisis deepens

BANGKOK  — U.S. futures dropped 4% and Australia’s share benchmark initially plunged 8.5% as work on more stimulus for the U.S. economy hit snags in the U.S. Senate.
India’s Sensex plummeted 9.4%. Singapore’s benchmark plunged 7.3% after the city announced a sharp increase in confirmed infections and its first two deaths.
Shares initially dropped more than 4% in Hong Kong and fell 5% in South Korea. The Shanghai Composite index lost 1.6%.
However, Japan’s Nikkei 225 index held steady, gaining 1.9% by midday Monday. Investors appeared to be encouraged by the likelihood the International Olympic Committee might postpone, rather than scrap, the Tokyo Games.

Japan’s Prime Minister Shinzo Abe acknowledged that a postponement could be unavoidable as Canada and Australia added to the immense pressure that has been mounting on organizers by saying they wouldn’t send athletes to Tokyo unless the Olympics are postponed for a year.

Capital Economics: PH economy to contract in Q2-Q3

MANILA, Philippines – London-based Capital Economics expects the Philippines’ economy to contract during the third and fourth quarters amid the coronavirus disease 2019 (COVID-19) pandemic.

Capital Economics Asia economist Alex Holmes told the Inquirer last Friday that the London-based economic research firm projected the Philippines’ gross domestic product (GDP) growth to slow to 4.7 percent year-on-year in the first quarter.

Its estimates further showed GDP could contract by 3 percent year-on-year during the second quarter and 1.1 percent in the third quarter.

The Philippine economy was expected to recover by the fourth quarter, but by a mere 0.7-percent growth.

In a report last Thursday, Holmes said the economy would “barely grow at all in 2020 as a whole.”

Amid the enhanced community quarantines aimed at containing the spread of COVID-19 in the country, Holmes had said “consumption, the main driver of the economy, is set to slump.”

“What’s more, the drag on the tourism sector is set to worsen. Travel across the world is grinding to a halt as more and more countries advise their citizens against overseas travel and many close their borders to international visitors. Tourist expenditure in the Philippines generates about 2.5 percent of GDP,” Holmes had said.

Last week, the economic team unveiled a P27.1-billion fiscal support package for COVID-19 response, of which more than half will go to tourism-related projects and programs.

“Meanwhile, the outlook for exports has deteriorated significantly. We are now forecasting a deep global recession, with world GDP set to fall by 1 percent this year, which would be a sharper fall than during the global financial crisis. While the Philippines is less trade-dependent than most in the region, a sharp drop in exports would still weigh heavily on growth. Foreign direct investment (FDI) and remittances are also likely to be hit hard,”  said Holmes.

Capital Economics nonetheless sees growth rebound next year—3.7 percent year-on-year in the first quarter of 2021, 12.5 percent in the second quarter, 9.9 percent in the third quarter, and 7.4 percent in the fourth quarter, Holmes said.