UPS urged to retain jobs
The Philippine government will ask United Parcel Service (UPS) to retain some operations in the country after the US logistics giant announced it was relocating to southern China, President Gloria Arroyo’s spokeswoman said yesterday. UPS on Wednesday announced the planned transfer of its hub to a more centrally located US$180 million facility to be built at Shenzhen airport. The announcement represents an investment blow to the Philippines, which also faces a possible exit by Intel Corp from its second offshore assembly operations center in Asia. Arroyo spokesman Lorelei Fajardo told reporters the airport authorities at Clark airport north of Manila, where UPS had built its US$300 million intra-Asia hub in 2002, were in talks with the US firm’s representatives to explore alternatives to its planned downsizing.
Agency to review ratings
Moody’s Investors Service shares fell sharply on Wednesday as the credit ratings agency said it was reviewing whether computer errors wrongly assigned top-quality ratings to debt in Europe that did not warrant high marks. Moody’s said in a statement after the market closed on Wednesday that it had hired a law firm to conduct an outside review of how it rates the debt in question, which was aimed at institutional investors. Moody’s said it rated about US$4 billion of the debt in Europe known as constant-proportion debt obligations, or CPDOs. The disclosure follows a Financial Times report that Moody’s incorrectly gave triple-A ratings to the CPDOs. The report also cited internal documents that it said indicated some senior officials at Moody’s were aware early last year of the error.
Economy holding up: IMF
The Japanese economy is holding up well in the face of the US economic slowdown, but interest rates still need to be kept low until uncertainty over the outlook clears, the IMF said yesterday. The IMF urged Asia’s largest economy to make efforts to reduce its huge public debts and take measures to address the demands from its aging population. “We see the economy as showing a welcome resilience to the slowdown in the US and global markets so far,” said Daniel Citrin, deputy director of the IMF’s Asia and Pacific Department.
Chinese toy exports slowing
The rapid growth in China’s toy exports slowed dramatically in the first quarter of this year, hurt by higher production costs, a stronger currency and safety concerns, a state news agency said yesterday. Toy exports from January through March grew by 3 percent, down from a 23.6 percent growth rate in the same period last year, Xinhua news agency said. Toy exports for the quarter totaled US$1.5 billion, the agency said, citing China’s customs agency.
UBS sells subprime assets
Swiss bank UBS AG said on Wednesday it sold subprime and other mortgage-based securities with a nominal value of US$22 billion for US$15 billion to a newly created investment fund run by US asset manager BlackRock Inc. The sale is part of an attempt by Switzerland’s largest bank to offload risky positions that contributed to its massive writedown of US$37.4 billion over the past nine months. The securities had a nominal value of about US$22 billion, but have been listed with a book value of US$15 billion since March, UBS said.