Journal. [1966]

Mar. 28 - The President returns to Manila and in a ceremony held
inMalacafang is linducted as honorary president of the Boy Scouts of
the Philippines. He orders the closing of 8 sawmills in Bulacan and 1
in Dagupan City for violation of forestry rules and regulations upon
recommendation of a joint team of the Bureau of Forestry and the
Agency on Reform and Government Operations (PARCO), headed by
Vice-President Lopez. He directs NAWASA to maintain a 24-hour
a day alert for rainmaking operations.
Subido, in a formal request addressed to Secretary of Finance
Eduardo Romualdez and Bureau of Intennal Revenue Director Misael
Vera, asks that all pending administiative cases against officials and
employees of the Customs and the BIR be forwarded to the CSC for
investigation to expedite proceedings which now take at least a year.
A 1-hour man-made rain, of around.54 inches, beginning about
5:20 p.m., falls over Quezon City and some Bulacan and Rizal areas,
after a "seeding" of clouds with dry ice and brine by a PAF plane.
A 29-rnan group of businessmen and industrialists from Memphis,
Tennessee, arrives in Manila.
Katigbak, on the floor of the Senate, attacks Ramos for saying
she should not be "too trusting" in dealing with communists, and states
he should not be too trusting in dealing with Americans; Ramos says
later he did not make the statement.
Banking and Finance
By G. J. Vojta
Assistant Manager, First National City Bank
(Manila Branch)
O N February 26, Finance Secretary Romualdez was reported as
having announced that the ceiling on the net domestic assets of
the Central Bank will be lifted in April as requested by the Administration. Assurance of approval by the International Monetary
Fund reportedly was received from visiting off cials and Washington
D.C. authorities of the International Monetary Fund. It was disclosed
further that the $40.4 million standby credit extended the Central
Bank by the International Monetary Fund for stabilization purposes
will be reduced to approximately $25 million when the ceiling is removed
officially.
The Central Bank increased its holdings of domestic securities
from P851 million as of January 31 to P865 million as of February 28.
On the other hand, the Central Bank reduced its loans and advances
from P1,170 million as of January 31 to P1,169 million as of February
28.
As of December 31, 1965, money supply totaled P3,066.9 million,
compared with P2,936.3 million as of November 30. Currency in circulation increased to P1,581.8 million as of December 31 from P1,564
million as of November 30.
As of December 31, domestic bank credit outstanding totaled
P7,418.2 million, compared with P7,424.4 million as of November 30 -Also as of December 31, deposit liabilities of commercial banks totaled
P4,002.0 million, compared with P3,845.6 million as of November 30.
As of December 31, required reserves of the commercial banking system
totaled P401.5 million and excess reserves totaled P63.9 million, compared with P387.2 million and a negative P32.8 million as of November
30, respectively.
Tnere are reports that the Government is completing plans to
assist financially distressed industries. Main features of the program
appear to be the transfer of short-term obligations of distressed industries to the Development Bank of the Philippines and their conversion
into long-term loans. The loans subsequently will be converted into
DBP equity holdings which will be used as collateral for bonds to be
issued by the Bank and sold to the public. The tax-free, governmentguaranteed, bearer bonds will have a term of 10 years and an annual
interest rate of 7%, and will be convertible into preferred and common
shares of financed industries.
On February 10, Vice-President Lopez, as concurrent Agriculture
Secretary, reportedly announced the release of an initial P1.2 million
to constitute a partial guarantee fund for agricultural loans mace by
rural and conimercial banks to rice and corn farmers. The fund will be
allocated among participating banks in the form of time deposits.
Interest of loans made against such funds are not to exceed an annual
rate of 8%. Meanwhile, it was reported that President Marcos has.

The "Voice of Free Indonesia" radio reports there is dissatisfaction over the appointment of some of the members of the new cabinet
and over the fact that Nasution was given a job as only a deputy commander.Mar. 29-Col. Felizardo Tanabe, new CIS chief, announces the
lay-off of 300 more secret and special agents and employees.
The Customs bars A.C. Santos brokerage and 8 of its employees
for alleged involvement in the steel-boom smuggling.
The Central Bank further relaxes credit by lifting the special time
deposits required for letters of credit for all importers; the international reserve has risen from P156 million to P189 millions since February 10.
Government rain-makers successfully induce rain for a second
time but the precipitation was not as great as before.
Eugenio Puyat, president, Federation of Chambers of Commerce
and Industry of the Philippines, cautions against "unscrupulous elements fanning anti-American feeling for their own business and selfish
economic advantage".
Foreign Minister Chen Yi states China has former a "profound
military friendship" with Pakistan and is bound to support it against
India and in the "struggle against imperialism and colonialism".
asked the Philippine National Bank to study the feasibility reducing
the annual interest rate on agricultural loans from 9 to 7%.
The Social Security System raised the maximum amount allowable
members for housing loans from P30,000 to P60,000, effective March
1. The change was made to meet increased cost of labor and construction materials.
As of March 15, gross international reserve holdings of the Central
Bank totaled $183.6 million, compared with $181.4 million and $182 5
million as of February 28 and January 15, respectively. As of February
28, net foreign exchange holdings of commercial banks were a negative
$18.1 million, compared with a negative $30.0 million and a negative
$46.1 million as of January 31 and December 31, respectively.
The foreign-exchange market over the past 30 days continued to
be characterized by ample dollar supplies and light demand among
commercial banks. As of March 21, the interbank rate declined further
to P3.8940. Nevertheless, merchant prime spot rates remained unchanged at P3.9100 selling and P3.8850 buying. Rates on forward
transactions not covered by the Central Bank likewise were unchanged
at P3.9500, P3.9750, and P4.0050 for 30, 60, and 90 days, respectively.
However, rates of forward transactions covered by the Central Bank
de.lined to P3.9200, P3.S300, and P3.9400 for 30, 60. and 90 days,
respectively.
Manila Stock Market
By Leonardo L. Recio
L. Recio & Company, Inc.
T HERE was a considerable drop in the trading during the month
of March. Total volume was 537,000,.000 shares, valued at P12,450,000, compared with previous figures of 536,000 shares, valued
at P19,980,000. This month's peso value was distributed as follows:
21%, for industrial, 65% for mining, and 14% for oil shares.
There was a correction in the mining average up to the 16th when
the average stood at 473.78. It steadied for a while until the 21st, shot
up to 551.10 on March 29 and then corrected to 531.17 at the close. The
movement of the average was mainly due to the activity in Atlas Consoliclated whose activity in the Manila Stock Exchange was mainly
influenced by its activity in the American Stock Exchange. This issue
reached a high of US$41-3/4 in the American Stock Exchange on tihe
28th and P160.00 at the Manila Stock Exchange on the 29th and closed
at 143.00 from previous close of 100.00. Among the other copper mine
shares, lepanto closed at.89 from.86, Marinduque at.255 from.24,
and Philex at.37 from.375. Benguet Consolidated was actively traded
during the period also in response to the activity in the American Stock
Exchange, reaching a high of 10.75 and closing -it 8.50 from previous
close of 5.30. Among the major issues, Acoje was down to.1125 from.1275, Consolidated Mines was unchanged at.0875, Philippine Iron

196

TIHE JOURNAL OF THE AMERICAN CHAMBER OF COMMERCE
April, 1966