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Brexit may add to global economic turmoil but not the only factor

G20





welcome By: Elena Grace Flores
Political change, territorial disputes, excessive production, terrorist attacks and influx of refugees are major world problems affecting the global economy as discussed by the 20 largest economies recently. Brexit really did affect world investments also due to the confusion as to what the UK’s move will be in relation to the EU and its members. However, despite the split, the UK will continue to nurture alliance with European countries. This is why sooner or later the economy worldwide is expected to rise up again. Here are the details of the G20 forum:

BBC Reported: The UK’s vote to leave the European Union heightens risks for the world economy, finance chiefs have said at the end of the G20 summit in China. The outcome of last month’s referendum “adds to the uncertainty” for the global economy, the group of the world’s 20 largest economies said.
It urged the UK to remain “a close partner of the EU”, amid concerns Brexit talks could be acrimonious. Chancellor Philip Hammond said Brexit had come up “a great deal” at the G20. “The reality is there will be a measure of uncertainty continuing right up to the conclusion of our negotiations with the EU,” he told reporters. Following the meeting in the Chinese city of Chengdu, the G20 group said it had the tools to cope with the potential economic and financial consequences from the referendum result. Other factors complicating the world economy include geopolitical conflicts, terrorism and refugee flows, according to the G20. The president of Germany’s central bank, Jens Weidmann, said there were no signs yet that economic development in Europe had been affected by the UK’s referendum on 23 June. The G20 members agreed that despite the Brexit vote the global economy would improve in 2016 and 2017, Mr Weidmann said.

It added: However, new figures on UK companies in the three months to the end of June have raised concerns about the health of the economy before the Brexit vote. Sixty-six UK listed companies issued profit warnings in the second quarter, which was the most for that period since the financial crisis in 2008, according to accountants EY. Alan Hudson, EY’s head of restructuring in the UK and Ireland, said: “It’s been a dizzyingly unpredictable time since the UK voted to leave the European Union. “What we saw in the second quarter – and are still seeing now – is the initial impact of this uncertainty.” Analysts expect economic data on Wednesday to show the UK economy grew by about 0.5% in the second quarter compared with the previous three months. Last week the International Monetary Fund (IMF) downgraded its forecasts for UK economic growth, from 1.9% to 1.7% for 2016, and for the global economy, from 3.2% to 3.1%. On Sunday IMF managing director Christine Lagarde said the G20 had taken place at a time of “political uncertainty from the Brexit vote and continued financial market volatility”. In a statement the G20 finance officials said the global economic recovery was continuing “but remains weaker than desirable”. Separately, G20 policymakers said they recognised that excess steel supply was a global issue. The excess capacity of steel has had a negative impact on trade and workers and requires a collective response, they said.

Reference: http://www.bbc.com/news/business-36877568

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Price roll back in the Philippines is due to Oil oversupply Speculation in the US

oil price roll back





welcome By: Elena Grace Flores
You may be wondering why the gasoline prices in the Philippines are now going down as series of roll backs are currently happening. This is the influence of the international speculation that there will be an over supply as the US increases its production. The recent roll backs are as follow:
Flying V ROLLED BACK
₱0.10/L Rush97, Thunder95, Volt91;
₱0.35/L Biodiesel;
₱0.30/L Kerosene;
eff 12:01AM July 26,2016

Shell ROLLED BACK
₱0.10/L VPN+ Racing97, VPN+95, FuelSave91;
₱0.35/L VPN+ Diesel; FS Diesel;
₱0.30/L Kerosene;
eff 06:00AM July 26,2016

Petron ROLLED BACK
₱0.10/L Blaze100, XCS95, Xtra91;
₱0.35/L Turbo Diesel, Diesel Max;
₱0.30/L Kerosene;
eff 12:01AM July 26, 2016

Caltex ROLLED BACK
₱0.10/L Platinum95, Silver91;
₱0.35/L Diesel;
₱0.30/L Kerosene;
eff 12:01AM July 26, 2016

BBC reported: Oil prices have fallen to a three-month low, hit by rising concerns that a global oversupply of both crude and natural gas will dampen prices. US oil fell 2.4% to $43.11 (£32.72) a barrel, its lowest level since April, meaning it has now fallen by 12% so far this month. Brent crude dropped 2.1% to $44.75, its lowest level since 10 May. Shares in oil and firms also lost ground, with Exxon Mobil shares down 1.8% and Chevron down 2.6%. “Crude oil markets have been under pressure as oil supplies have started growing with the resumption of output from the capacity lost due to wildfires in the Canadian oil sands,” said EY energy analyst Sanjeev Gupta.
Data from market intelligence firm Genscape also suggested US production had increased. Inventory at the Cushing, Oklahoma delivery base rose by 1.1 million barrels in the week to 22 July. “Supply continues to return from disruptions, refined products are severely oversupplied, crude demand is falling well short of product demand, and key product demand is decelerating,” Morgan Stanley said in a note.

On Friday, data showed the amount of US oil and gas extraction points had increased for the fourth week in a row. The slump in prices from as high as $115 per barrel in 2014 led many shale oil producers to cut the number of rigs as producing oil was no longer profitable. But despite a decrease in American crude supplies over the past year, there are still large stocks of gasoline in the country, even as the US hits its summer driving peak.
The value of the dollar which has steadily risen over the past month has also put pressure on crude oil prices.

Reference: http://www.bbc.com/news/business-36887112

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UK is fishing in two lakes: free trade with China eyed as well as stronger relations with India





welcome By: Elena Grace Flores
Brexit orBritain’s exit from the EU has brought surprising actions from the British government. Perhaps, they are just weighing trade opportunities to retain a healthy economy after it slumped a bit after Brexit. Exploring free trade with China can be misinterpreted as showing rebellion to EU after gaining their freedom from it but others put it as their way of learning the hard way. Perhaps they wanted to experience China’s unfair trade practices, mass produced sub standard products and sometimes dangerous product contents. On the other hand, they are also on there way to have some talks with China’s rival, India – another giant in Asia, but it is not known yet what will come out from that. Clearly still in the exploration stage. Read this:

The Inquirer wrote: LONDON, United Kingdom — Britain’s finance minister warned Brexit would cast a “shadow” over the world economy but said he was eyeing a free trade deal with China in interviews with the BBC and Sky News on Sunday. Speaking on the sidelines of the G20 meeting of leading world economies in Chengdu, China, Philip Hammond told Sky that the vote to leave the EU was “not the only shadow the world economy faces”. “There is going to be uncertainty about the outcome hanging over the world economic outlook for perhaps the next couple of years,” Hammond said.

It added: China President Xi Jinping before the referendum had said that he hoped Britain would remain in the 28-nation bloc to promote the “deepening development of China-EU ties.” Senior figures from some of Britain’s biggest financial services companies, including HSBC, Virgin Money, the London Stock Exchange and Standard Life were travelling with Hammond. Prime Minister Theresa May also discussed a trade deal with Australia in a phone call with Prime Minister Malcolm Turnbull earlier this month. Foreign Office junior minister Alok Sharma was also travelling to India on Monday on his first visit since his appointment. “Britain is open for business and thriving on the world stage. We want the strongest possible relationship with India,” Sharma said.

Reference: http://newsinfo.inquirer.net/798802/after-leaving-eu-uk-eyes-free-trade-with-china

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Jojo Binay is not a Fish, Pimentel – He teaches People how to Fish

Jojo Binay





welcome By: Elena Grace Flores
Now that Senator Koko Pimentel is already the confirmed Senate President, he has to stand by his promise to jail former Vice President Jejomar Binay for the alleged corruption committed when he was still mayor of Makati. In fact, Ombudsman Conchita Carpio Morales echoed that by filing cases against him without probable cause and no concrete evidence – just hearsays. Koko was noted saying that Binay would probably be the first big fish who is going to prison for that matter and headlines flashed around tri-media including social media.

Well, this is what most Makati residents are saying in response to that. “Binay is not a big fish, Koko – he teaches people how to fish and you should learn that also as a public servant. His public services in Makati are second to none. Up to this date, you are considered privileged if you get a Makati resident and medical cards – that existed even before the plan of creating a national ID card for Filipinos. Do you know why? It is easy to print cards but even that most of past governments cannot do. The difficult part is coming up with concrete benefits to offer to Filipino Citizen card holders.

Senator Koko Pimentel, now that you have the power to create legislation that would benefit Filipinos, can you at least try to come up with various privileges that a Filipino can have under the Duterte administration? Will a Filipino ID card holder be prioritized in the country’s top paying jobs? Will they get livelihood loans to start businesses? Can their children go to quality schools for free? Most of all, can they get hospitalized without worrying about the cost? Wait until you can accomplish these before even thinking of jailing Binay who had done all of these for the citizens of Makati. For now, learn from him.

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No Stopping Bilateral Talks with China on Free Trade after Britain’s Exit from EU

Britain





welcome By: Elena Grace Flores
There seems to now have more clarity on the Brexit episode on how it came about – with supporters saying that the EU has been regulating the country and dictating what to do and what’s not. Shortly after their exit, they are looking at going back to the negotiating table with China that has been proposing a free trade relations for both countries. This of course is not permitted under the EU. Read this report for the details:

Forbes wrote: This is an interesting turn up for the books, Phillip Hammond, the new Chancellor of the Exchequer, has said that it would be a good idea for Britain to pursue a free trade deal with China. He also seems to be talking about it the right way around – we’d just love to have more Chinese investment for example. But what really interests about this is that China has been asking for a free trade agreement with the European Union for some time now. And given that the people running the EU don’t really believe in free trade at all, rather in a customs union or zollverein, they’ve been putting them off. It’s entirely possible therefore that post-Brexit Britain will have a free trade agreement with China before the EU does. To our benefit, of course.

Chancellor Philip Hammond has begun discussions with China on an ambitious free trade deal which could see greater access for major Chinese banks and businesses to the UK economy. The Chancellor told the BBC it was time to explore “new opportunities” across the world, including with China, one of the UK’s biggest inward investors. That is despite a short term economic shock from leaving the European Union. Of course, I don’t think that it’s despite Brexit, it’s obvious that it’s because of Brexit. Before we decided to leave (and technically, even now) it was illegal for Britain to try to negotiate a trade deal on its own.

It added: Hammond is looking at the right part of this as well: “We already have a strategic partnership with China. “We have hugely increased our trade with China, investment both by British companies into China and by Chinese entities into the UK. “That’s about as far as we can go while we are members of the European Union. “But once we are out of the European Union then I have no doubt on both sides we will want to cement that relationship into a firmer structure in a bilateral way that’s appropriate. And there’s an easy way to negotiate this too: Senior government sources have told me that officials are looking at New Zealand’s free trade agreement with China which took four years to negotiate and came into effect in 2008.

Take that text, cross out “New Zealand” and replace with “United Kingdom” where appropriate and we’re done. We already know that China’s happy with the text after all. The European Union has problems with such a deal:

Reference: http://www.forbes.com/sites/timworstall/2016/07/24/post-brexit-britain-could-have-a-free-trade-agreement-with-china-before-the-european-union-does/#50657ee23aed

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