Philippine Bonds Gain after S&P Revises BB+ Outlook; Peso Declines

Philippine government bonds maturing in 2037 rose for a second day on speculation the nation will win an investment-grade rating next year after Standard & Poor's raised the credit outlook to positive. The peso dropped.

S&P, which ranks the Philippines BB+, the highest junk level, cited improved governance and public finances for the revision as official data showed Dec. 19 that tax revenue climbed to a record. President Benigno Aquino signed a law yesterday that will raise excise duty on cigarettes and alcohol, which Finance Secretary Cesar Purisima said will generate an additional 34 billion pesos ($826 million) in 2013.

"We had pretty good news yesterday with S&P's upgrade from neutral to positive," said Jill Singian, a bond portfolio manager at Bank of the Philippine Islands (BPI) in Manila. "It's giving a lot of support to buying interest but players will not make a bold move today. We are going into a long weekend."

The yield on the 6.125 percent notes due October 2037 declined two basis points, or 0.02 percentage point, to 5.64 percent as of 10:09 a.m. in Manila, according to prices from Tradition Financial Services. The rate advanced two basis points this week and has dropped 28 basis points since the securities were issued in October.

Local financial markets will be closed on Monday and Tuesday for the Christmas holidays.

The peso weakened 0.2 percent to 41.145 per dollar in Manila and declined 0.1 percent for the week, according to Tullett Prebon Plc. It appreciated 6.6 percent this year, the second-best performance among Asian currencies after the South Korean won.

Bangko Sentral ng Pilipinas will announce measures next week to manage capital inflows, Deputy Governor Nestor Espenilla told reporters in Manila late yesterday.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, was unchanged at 4.4 percent today and this week. It fell 335 basis points this year. (http://is.gd/Ue9eZd)

Bloomberg

Continue reading

Agency abused OFW Filipino teachers in USA win $4.5 Million Dollars lawsuit

Filipino teachers win $4.5 M in US suit

A US federal jury awarded $4.5 million USD or (₱185,085,004.00) to Filipino teachers who paid large fees to obtain United States jobs through a placement agency.

Jurors on Monday found that Los Angeles-based Universal Placement International Inc. and its owner, Lourdes Navarro, failed to properly disclose the fees for the 350 teachers who were recruited for $40,000-a-year jobs in Louisiana, mostly in East Baton Rouge Parish.

The teachers arrived in the US between 2007 and 2009 under a federal program that grants worker permits to foreigners with special skills. Most went to East Baton Rouge Parish but others went to Caddo, Jefferson and other parishes and to state-run schools in New Orleans.

In 2010, the American Federation of Teachers and the Southern Poverty Law Center sued on behalf of some teachers who complained that before ever leaving the Philippines, they had to borrow money to pay thousands of dollars charged by the company, as much as $16,000 in some cases—five times the average annual household income in the country.

The class-action suit claimed that more unexpected fees and expensive legal entanglements followed once the teachers arrived in the United States. For example, contracts were required in which the teachers agreed to pay a percentage of their monthly income to Universal, along with fees for arranging housing.

Passports and visas were confiscated to ensure the fees would be paid, the lawsuit said.

The suit claimed the threat of huge debt and loss of their visas amounted to forced labor under a federal law against human trafficking passed by Congress in 2000.

After a two-week trial, jurors rejected the human trafficking arguments but found the recruiting agency had negligently misrepresented the fees and violated California laws governing employment agencies and unfair business acts, attorneys for both sides said.

"The jury sent a clear message that exploitative and abusive business practices involving federal guest workers will not be tolerated," Mary Bauer, legal director for the Southern Poverty Law Center, said in a statement.

Don A. Hernandez, a lawyer who represented the company, said there was no intentional wrongdoing by his client regarding disclosure of fees. He called the lawsuit a "witch hunt."

"These teachers voluntarily took on whatever debt they did to pay the fees to come to the United States. They were not forced, the jury found," he said.

Hernandez said he would seek to have the award figure reduced because the Louisiana Workforce Commission earlier awarded return of the same fees. (http://is.gd/Ud5XNI)

Inquirer Global Nation 

Continue reading