17/11/2015 World Business Report

Now for the latest financial news with

Manila prepares to host leaders of Asia-Pacific nations, including

Rico Hizon is there to tell us what's at stake.

With an increase in interest rates a live possibility

in the US, we assess today's inflation numbers for any clues

Welcome to World Business Report. I'm Sally Bundock.

In a minute, we'll also have news of a huge merger in the hotel industry.

World leaders, including the US President, are arriving in Manila,

the capital of the Philippines, for the annual APEC summit.

That's the Asia Pacific Economic Cooperation.

Proceedings officially start tomorrow and it's the first time

these leaders have met since they agreed on a major trade deal known

For the Philippines, hosting this event is a huge undertaking.

And from our point of view, there is only one man to send to

this event and that is Rico Hizon, who is from Manila.

Currently, I'm here at the APEC summit in Manila, the second day of

the CEO APEC summit. The focus is on inclusive growth and inclusive

economies. And the Trans-Pacific Partnership, of which 12 members are

from the APEC economies, they will be meeting to discuss what has

already been agreed on since the last meeting in Hawaii. The host

country, the Philippines, is not part of APEC at the moment but the

president says that the Trans-Pacific Partnership must be an

agreement of inclusive growth. And here we have more than 1000

delegates talking about inclusive growth, inclusive economies and

infrastructure development, and they will also be discussing this with

the 21 APEC leaders when they meet tomorrow before the official start

of the summit in the afternoon on Wednesday. Infrastructure, of

course, as I mentioned, is an important factor in this summit.

That is one of the major challenges that the host city faces. Manila.

Replace with huge potential. But it has its setbacks. Even getting to

work each day here can be a chore. I want to experience people's daily

frustrations, so today, I'm going to take a ride with this management

consultant on his journey to work. At this point, I'm wondering, if

Manila really the worst city in which to drive on earth? We are

currently in the middle of an major traffic jam. It is

bumper-to-bumper. This is the reality every day that we face. It

takes 2.5 hours to get one point two another. Public transport is

completely dysfunctional here. It is obsolete, 30 years behind the Times.

And time is money. No one knows that more than, who owns a meat

processing company. These plans churn out more than 5000 hotdogs

every minute. 6 million per day, supplying 80% of the fast food

restaurants in the Philippines. The profits are being squeezed. Expense

transport costs brought about by congestion and very busy roads. That

hampers our efficiency and brings about cost of distribution. Poor

infrastructure costs the Philippines economy an estimated $60 million per

day. The government insists that infrastructure spending has more

than tripled since the president came to power five years ago. The

projects to build rail networks, airports, ports and roads have been

hit by delays, and even the minister in charge admits that it has had an

economic impact. Definitely there is a huge cost in terms of delayed

infrastructure, but what I'm saying is that it took some time to put the

programmes in place. With elections next year, pressure is on the next

government to ease the burden on commuters and businesses working in

the capital stock apart from infrastructure being a key issue

that the Philippines faces, inclusive growth, inclusive

economies and the Trans-Pacific Partnership, what is also being

discussed here is the slowdown of the Chinese economy, what it will do

going forward, and, of course, the potential interest rate hike by the

Federal Reserve as soon as December. Thank you. And while we are on the

subject... America could be on the verge

of a rate rise and economists are looking towards

the inflation figures for clues. Officials from the Federal Reserve

are hoping to see inflation firm up before they push the button

on a rise. Headline US inflation has held

steady below the Fed's 2% target and rates have been near zero

since 2008. Experts are now looking

for a rate rise in December. With me is Marc Ostwald, FX,

Rates and EM strategist at ADM The inflation results are out today

as well as the merits of the last meeting. While headline inflation is

around flat, that is largely due to energy prices. They are down 18.4%

year on year. Airline fares are also a contributing factor, down 6%. We

are at the point where the Federal Reserve is looking through this and

what it is looking at is the so-called core inflation, which is

running at about 2%. And that is hiding a lot of things that are

rising much faster, such as rent, prescription drugs, services... It

is not a disinflationary problem that they have. They say they can

look through this energy price fall and given that the economy is

performing very well, I think that they definitely want to get away

from this excessively accommodative style that they have had for quite

some time. There will be quite little to stop them. May be some

international development but when they talk about that, it would be

more like signs of the Chinese economy stalling, which they were

very worried about earlier in the year, and perhaps admitting that

they were led astray by the gyrations of the Chinese stock

market. Now they are looking through that and saying that it is perhaps

not quite as bad. In terms of the recent events in Paris and the

geopolitical impact, that will not impact Janet Yellen's choices on

Friday? Some analysts were saying yesterday that could be a factor. If

financial markets had react in a very negative way on a consistent

basis between now and December, it could be more of a threat, but as is

typical of these events, there is an initial knee-jerk reaction, but

unless there is a perceived threat to the economy, it is not likely to

have much of an impact on the Federal Reserve's decision. Rates

going up in December? Yes, but after that added very slow pace. -- at a

very slow pace. Thank you. In other news,

US hoteliers Marriott International and Starwood Hotels have agreed

a $12.2 billion deal to create The deal,

where Marriot buys Starwood, will create a giant with more than

5,500 hotels with 1.1 million rooms The tie-up will see them overtake

the UK's Intercontinental Hotels, BHP Billiton and Vale have been

fined a further $260 million for the mining disaster that killed 11

people in Brazil earlier this month. The mining giants had already been

ordered to pay $65 million after a dam burst at their jointly-owned

Samarco mine on November 5. 12 people remain missing following

the incident in southern Brazil The fine will provide aid to

the victims The markets are much healthier

today, the concerns about the attacks in Paris and the

geopolitical impact reading away. We also have a weaker Japanese yen

today as investors withdraw from safe havens. I will see you soon.

There will be a shortage of nearly 200,000 UK care workers