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Banking on electricity: the payoff of power-related loans

Mark T. Amoguis
Senior Researcher

ONE doesn’t tend to think about where the modern conveniences of life come from. Among the things we take for granted is the dependence on electricity in day-to-day living.

The importance of having a reliable and accessible power supply to the economy should be obvious: power outages and disruptions lead to inconvenience, businesses would incur higher costs by way of foregone revenue and reduced productivity; and investors would be hesitant to do business.

This also should not be surprising that banks are interested in lending their deposits to power projects, provided that the terms are satisfactory.

One is example is that in 2014 when Aboitiz-owned Therma Luzon, Inc. wanted to build a third 420-megawatt (MW) unit of its two-unit coal-fired power plants in Pagbilao, Quezon Province, expanding the capacity of its 735-MW facility. This was in response to the government’s call that time on the private sector to build additional capacity to help address the country’s power needs.

With initial estimates ranging from $600 million to $700 million (roughly between P26 billion and P31 billion), this project was to be financed through 70% debt and 30% equity.

To bankroll this expansion, Pagbilao Energy Corp., who will operate the additional unit, entered into an omnibus agreement on May 15, 2014 with a number of banks for a loan worth up to P33.309 billion (around $750 million) with a maturity period of 15 years. Banks involved in the deal include Bank of the Philippine Islands (BPI); BDO Unibank, Inc.; China Banking Corp.; Metropolitan Bank & Trust Co.; Philippine National Bank (PNB); Philippine Savings Bank; and Security Bank Corp.

Construction of the additional unit began in December 2014 and, after almost four years, the $976-million (approximately P51-billion) 420-MW unit 3 of Pagbilao coal-fired facility was unveiled in May 2018.

Similar projects were carried out by Maibarara Geothermal, Inc. Together with PNOC Renewables Corp. and Phinma Energy Corp. (then Trans-Asia Oil and Energy Development Corp.), they borrowed P2.40 billion from Rizal Commercial Banking Corp. (RCBC) and BPI in September 2011 to finance the 20-MW Maibarara geothermal power plant. It went online in February 2014.

The company took a P1.4-billion loan separately from RCBC to finance the 12-MW expansion of the Maibarara geothermal facility in May 2016 with the unit starting commercial operations in April 2018.

“Electricity is crucial for economic productivity and supporting power-related projects that are clean and affordable is vital for continued economic development for the country,” said Cenon C. Audencial, Jr., Executive Vice-President and head of the Philippine National Bank’s (PNB) Institutional Banking Sector.

According to Mr. Audencial, PNB has already “supported” 3,700 MW worth of power-related projects, which is equivalent to 22% of the country’s 21,000-MW installed capacity.

For Juan Carlos L. Syquia, BPI executive vice-president and head of corporate banking, banks “remain interested” in lending to “important capital investments” such as power projects as they are one of the vital infrastructure projects that facilitate economic growth.

“Since such projects involve significant amounts of capital and are subject to a broad mix of factors that determine the success of such projects, banks need to exercise extra due diligence when lending to power projects,” Mr. Syquia said.

“Banks are prepared to lend to a project where risks are manageable,” he added.

For BPI, Mr. Syquia said that they have been a strong supporter of power projects: “We have banking relationships with and significant lending exposure to all major industry players. We have been selective with smaller players with less experience in the sector,” he said.

“Our current power sector exposure is significant; it ranges between 12% to 17% of our total loan portfolio moving based on payments, drawdowns and utilization of working capital lines,” added the BPI official.

BDO Capital & Investment Corp. President Eduardo V. Francisco said that if the project is “well-structured,” then lending to power projects is not necessarily riskier compared to that of other industries.

Mr. Francisco said that BDO has a large exposure to power, but noted that “there are few new power financing in the last twelve months.”

“There is some refinancing of existing loans but very little new loans for projects as we are not seeing new power projects being built,” Mr. Francisco said.

Like any projects, however, there are risks and challenges that come with investing into power projects.

“[T]he power industry is heavily regulated, and developers of new power projects always encounter a number of challenges such as securing necessary government approvals and permits,” PNB’s Mr. Audencial said.

According to a September 2018 PowerPoint presentation of Senator Sherwin T. Gatchalian, who is chairman of the Senate energy committee, applying for a power plant project would require 359 signatures from 74 regulatory agencies and attached bureaus that involve 20 different laws and requiring 43 different contracts, certifications, endorsements, and licenses.

CONSIDERATIONS
Business groups have been calling for the construction of power plants to ensure ample supply of electricity in the long-term. However, the delay in the approval of power supply agreements (PSA), which is a bilateral agreement between a power generation company and a distribution utility for the purchase of power, has been hampering these efforts.

A PSA is typically a critical milestone for power projects as these are signed before construction of a power plant starts to reassure banks that the plant will have ready buyers for its output.

To recall, the Supreme Court (SC) ruled out in May this year that all PSAs submitted by distribution utilities to the Energy Regulatory Commission (ERC) on or after June 30, 2015 must undergo what is called a competitive selection process (CSP).

CSP requires contracts between power generation companies and distribution utilities to be subjected to price challengers in a bid to lower electricity cost.

“Considering the SC ruling on [the CSP], the Bank is focusing on the compliance of power plants with the CSP requirements… Compliance with regulatory requirements ensures that the PSA entered by the power plant and offtaker are valid and subsisting throughout the life of the loan and will be a source of stable revenue stream for servicing debt obligations,” PNB’s Mr. Audencial said.

Mr. Audencial added that PNB refrains from granting loans to “merchant plants,” that is, those without a PSA and power plants with high exposure in the Wholesale Electricity Spot Market due to “volatility of revenues.”

The lenders said that they also take in a number of considerations before deciding on whether to lend to power projects.

“BDO supports good projects with good offtake contracts, experienced and reputable sponsors, and proven track record of the technology being used,” BDO’s Mr. Francisco said.

Another consideration, according to bankers, is ensuring that borrowing companies are able to secure ready buyers for their electricity once it goes operational.

“The big hurdle of power generating companies now is the ability to get offtake contracts,” BDO’s Mr. Francisco said.

“The ability of large customers to choose who to buy power from, the backlog in the ERC, and the government’s review of even previously approved power purchase agreements (PPAs) have also made it challenging for power generating companies,” he added.

BPI’s Mr. Syquia was of the same assessment: “The industry best practice is to require an offtake agreement – a critical success factor — as a condition precedent to drawdown.”

“In cases where we agree to take on market risk, we size the loan based on financial projections that use spot prices as tariff and/or we require other credit enhancements such as a guaranty from the sponsor,” he said.

Other considerations, according to bankers, include the project proponents’ capability to fund the equity portion of the projects as well as their expertise in managing the power plants after completion.

“The reputability (track record) of projects sponsors cannot be under-emphasized,” BPI’s Mr. Syquia said.

As for PNB’s Mr. Audencial, other “deciding factors” include ERC approvals, the National Grid Corp. of the PhilippinesGrid Impact study as well as enhancements such as feed-in-tariff eligibility for renewable energy projects and “take or pay” provisions in PSAs.

WORTH IT?
In Luzon alone, there are 19 private company-initiated power projects expected to start their commercial operations between this year and 2023, according to Energy department data. These facilities are expected to have a combined committed capacity of 4,774.8 MW.

Despite the challenges and risks that come with lending to power projects, lenders recognize that there are still payoffs to these ventures.

“Although lending margins for such loans have declined significantly from the 1990s (when the power sector began to open up to private sector participation), we believe that our returns are fair,” Mr. Syquia said.

“BPI would like to continue to play a role in nation building and we will continue to pursue financing such projects — a reliable stable power sector is an imperative for continued economic growth. We look forward to an evolving sector where there will be increased focus on sustainable energy. While the technology and regulations will change, the basic tenets for evaluating project finance (i.e., cash-flow-based analysis) will remain the same,” he added.

Mr. Audencial shared this view: “PNB will have a continued presence in funding big ticket/priority power projects to support economic growth and nation building.”

 

[Note: All interviews were conducted via e-mail in August 2019.]

Gov’t partially awards T-bond offer

THE TREASURY made a partial award of the reissued 20-year bonds it offered on Tuesday.

THE GOVERNMENT made a partial award of the reissued Treasury bonds (T-bond) it auctioned off yesterday as rates increased, with investors opting for shorter tenors.

The Bureau of the Treasury awarded just P12.271 billion of the P20 billion programmed for the reissued 20-year papers even as the tenor attracted P28 billion worth of bids.

This, as the bonds fetched an average rate of 5.341%, climbing 32.6 basis points (bps) from the 5.015% quoted when the tenor was last awarded in July. At the Sept. 24 auction, the Treasury rejected bids worth P30.7 billion for this tenor as the market asked for higher rates.

At the secondary market on Tuesday, the 20-year papers were quoted at 5.247%, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

Following the auction, Deputy Treasurer Sharon P. Almanza told reporters that its offer was met with healthy demand from investors, but not much compared to the previous offering.

Ms. Almanza said there is not much appetite for longer tenors as the market prefers shorter-dated securities following the central bank chief’s remarks on the possibility of another rate cut within this year.

“They opt to stay on the short given ’yung (the) uncertainty sa (on) rates. ’Di ba the BSP (Bangko Sentral ng Pilipinas) Governor said there might be another possible cut in December but it will be data-driven, so depending on what the data will show in December. So there’s still a possible cut,” she said.

Despite higher returns sought by the market, Ms. Almanza said the auction committee still decided to make a partial award to accommodate investors in the long tenor and in an attempt to reprice the bonds so its rate will be “not that high.”

A bond trader interviewed yesterday shared the same view, saying investors are choosing to put their money in shorter tenors with the upcoming liquidity from maturities.

“For the auction today, it’s at the higher end of market expectation. Medyo weak ’yung appetite ng market for the long end kasi (The market’s appetite for bonds at the long end of the curve is weak because) there will be liquidity coming from the maturity [of some government securities], which will be invested in the short end. They mostly invested in the short tenor,” the trader said on Tuesday.

BSP Governor Benjamin E. Diokno told reporters on Monday that the Monetary Board’s policy meetings will always be data-dependent.

Asked if another 25-bp cut will be possible towards the end of 2019 as projected by a report of S&P Global Ratings, Mr. Diokno said it is not off the table.

However, he clarified that they will avoid any drastic adjustments in policy rates as they do not want to be misinterpreted by the market as “desperate.”

Currently, benchmark interest rates stand at 3.5% for the overnight deposit facility, four percent for overnight reverse repurchase and 4.5% for overnight lending.

The trader added that investors may be expecting higher rates next year — hence they opted for shorter tenors.

Meanwhile, Ms. Almanza said uncertainties overseas, such as the ongoing trade negotiations by US and China in bid to end the prolonged trade dispute, might have affected investor sentiment on the auction.

The government is set to borrow P220 billion from the local market this quarter, broken down into P100 billion in Treasury bills and P120 billion via T-bonds.

It is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga

Why Jessica Zafra gave up writing for newspapers

THE COVER of Jessica Zafra’s latest book which is a collection of previously published short stories, unpublished work, and an excerpt from the novel she is working on.

FICTION WRITER, columnist, and radio and TV host Jessica Zafra routinely writes 1,000 words a day — a working method inspired by one of her favorite authors, Graham Greene, who wrote in his novel The End of the Affair (1951): “Over 20 years I have probably averaged 500 words a day for five days a week.”

Some of Zafra’s 1,000 words ended up becoming short stories, some of which can be found in her new book, The Collected Stories of Jessica Zafra under the Bughaw imprint of the Ateneo de Manila University Press.

The book cover, by artist Jason Moss, shows the author’s favorite cat, Saffy, peering over an exhibit of works by Leo Abaya as Zafra, dressed in her trademark Doc Martens and a backpack, studies the art.

The book gathers 27 stories, some of which were published in her previous collections Manananggal Terrorizes Manila (1992) and The Stories So Far (2014), some unpublished stories, and an excerpt from an upcoming novel.

“I just put everything in it, except for a couple [of stories] I took out because I do not like them anymore.” she told BusinessWorld during one of a series of book launches on Nov. 2 at the Nexus Center in Makati City.

Ms. Zafra said that the short stories were based on her friends’ experiences, her cats, and conversations with readers she meets at book launches.

“They don’t have to be exact. The plot came from them but all other elements change. I just get the premise from the story and I run with it,” she said.

Zafra, in a talk given during the launch, explained why she gave up writing newspaper columns — she had, at various times, written columns for Today, The Philippine STAR, and BusinessWorld — in favor of concentrating on her fiction writing. When writing a column, “The deadline is the inspiration,” she said deadpan. “The difficulty in writing fiction [and a column] is that when your momentum is going, then you remember that it’s your deadline [for the column piece] five minutes ago, you have to stop and write your column,” Ms. Zafra said. She decided to drop column writing three years ago when she realized that she had not yet written a novel. “Now I think of myself more as a fictionist not a columnist.”

Asked if she had a favorite among her stories, she said: “Not really. I feel that my best work is ahead of me. I haven’t written it yet.”

Ms. Zafra will be giving a book talk and sign books on Nov. 30, 3 to 6 p.m., at Fully Booked in BGC, Taguig City. The Collected Stories of Jessica Zafra is available at Fully Booked, Solidaridad Book Shop, Popular Bookstore, the AdMU Press bookshop, Loyola Bookshop, and on Shopee at P345. — Michelle Anne P. Soliman

Q&A: Pag-IBIG — UCPB eMoney Card

By Edwin C. Aruta, Jr.

IN AUGUST THIS YEAR, the United Coconut Planters Bank (UCPB) partnered with government-run Home Development Mutual Fund or Pag-IBIG Fund to lend its digital platform in disbursing loans and benefits to about 14 million members.

Through the Pag-IBIG – UCPB eMoney card, Pag-IBIG will be able to release the proceeds of short-term loans, provident benefit claims, calamity loans and other amounts due to its members or member-borrowers.

In response to the current administration’s call for public agencies’ faster transactions, offering e-money options for its members is one of Pag-IBIG’s many ways to simplify and hasten the delivery of its services. Currently, cash card service providers partnered with Pag-IBIG includes Land Bank of the Philippines, Development Bank of the Philippines, Union Bank of the Philippines, and Asia United Bank Corp.

In line with these developments, BusinessWorld has sought UCPB Vice President and Marketing Group Head Charina D. Balanquit to shred an in-depth information about the Pag-IBIG – UCPB eMoney card. Below are excerpts of the interview:

HOW DOES THE PAG-IBIG – UCPB E-MONEY CARD WORK? HOW CAN PAG-IBIG FUND MEMBERS AVAIL OF THIS SERVICE?
The Pag-IBIG – UCPB eMoney card is a co-branded, reloadable cash card which can be used by Pag-IBIG Fund member-borrowers to receive the proceeds of their short-term loans from Pag-IBIG Fund.

The member may go to any Pag-IBIG Fund branch (initially available in National Capital Region branches only) [and]:

• fill-out and submit the Pag-IBIG Fund loan application form and required documents;

• choose Pag-IBIG – UCPB eMoney card as the disbursement option;

• receive the card kit from the Pag-IBIG branch personnel; and

• wait for an SMS notification when the funds are credited before activating the card.

WHAT ARE THE ISSUES THAT THE PAG-IBIG – UCPB EMONEY CARD AIMS TO SOLVE? WHAT ARE ITS ADVANTAGES?
The Pag-IBIG – UCPB eMoney card aims to provide Pag-IBIG Fund members an additional alternative in conveniently receiving their loan proceeds, while also providing greater security, convenience and flexibility.

• Ease of card application

Pag-IBIG Fund members simply need to indicate that they are opting for the Pag-IBIG – UCPB eMoney card in their Pag-IBIG Fund Multi-Purpose Loan application form. There’s no need to fill out separate bank forms to avail of the card which makes time more convenient.

• Speed in getting their loan proceeds and benefits

The loan proceeds are credited the next banking day or within 24 hours from application date.

• Affordability

The Pag-IBIG – UCPB eMoney card only costs P50 against other alternatives which cost more than P100.

WHAT IS THE VALUE PROPOSITION OF THE EMONEY CARD AS WELL AS ITS OTHER USE CASES?
Speed, ease and affordability.

This card is as good as cash. Members can use their card not only to withdraw cash from any local automated teller machines (ATMs) but also to directly pay for purchases at merchants with POS (point-of-sale) terminals like groceries, department stores and restaurants.  They can also pay bills, buy load and transfer funds to other banks real-time through UCPB and BancNet ATMs.

The card has a 5-year validity. It has no inactivity penalty and members can even reuse it for additional loans or re-availment with no additional fee as long as the card has not yet expired.

WHY PARTNER WITH PAG-IBIG? WHAT ARE THE BENEFITS OF THIS PARTNERSHIP TO CONSUMERS AND THE GOVERNMENT-RUN FUND?
UCPB is one with Pag-IBIG in its desire to continue providing its members with faster, more secure and convenient ways to receive their benefits and to deliver more responsive government service to Filipinos.

Pag-IBIG Fund has provided its members with a number of cash card options in the past. Meanwhile, UCPB launched the UCPB eMoney Card in 2012 as a reloadable ATM card for various disbursing needs:

• distribute commissions;

• credit professional fees;

• pay contractual employees;

• transfer loan proceeds;

• send remittances; and

• disburse cash advances and allowances.

It was only a matter of time before both institutions would partner and come up with this card.

IN WHAT WAYS WOULD THIS PRODUCT CONTRIBUTE TO THE BANK’S BUSINESS? DOES THIS ALSO OPEN OTHER OPPORTUNITIES FOR THE BANK? IF YES, WHAT ARE THESE?
We are very excited and thankful to serve the banking needs of Pag-IBIG Fund members through the Pag-IBIG-UCPB eMoney card. This partnership will significantly grow the bank’s cardholder base and increase UCPB brand awareness among the millions of Pag-IBIG Fund members.

WHAT ARE THE VITAL PREPARATIONS/ARRANGEMENTS THE BANK HAS MADE TO ENSURE THAT SERVICES ARE SUCCESSFULLY AND PROPERLY RENDERED (IN TERMS OF TECHNOLOGY, BACK-OFFICE, ETC.)? 
This [product] uses the same technology used in ATM card transactions. The bank’s system was simply customized to conform with the technical requirements of Pag-IBIG Fund.

We also conduct AML (anti-money laundering) briefings for Pag-IBIG frontliners in compliance with BangkoSentral ng Pilipinas for the Know Your Client process.

The biggest preparation made was in the production and delivery of the cards to the Pag-IBIG branches.

WERE THERE ANY CHALLENGES THAT UCPB AND PAG-IBIG FACED IN IMPLEMENTING THE CONCEPT?
UCPB continues to work closely with Pag-IBIG Fund to ensure seamless and integrated back-end operations and frontline services for all Pag-IBIG Fund members who will avail of the card for their loan proceeds and benefit claims.

HAS THE PRODUCT BEEN GAINING TRACTION SINCE ITS LAUNCH? WAS IT WELL-RECEIVED AMONG YOUR CLIENTS?
The Pag-IBIG-UCPB eMoney card was initially made available to Pag-IBIG Fund branches in the NCR starting November 18, 2019.  So far, there has been a steady increase in the number of card issuances and disbursement volume being coursed through the cards.

WHAT IS YOUR TARGET FOR 2020; HOW ABOUT THE NEXT 5 YEARS? HOW DO YOU PLAN TO ACHIEVE THESE TARGETS?
We are targeting at least 500,000 cards issued in 2020 and every year thereafter…We plan to increase our market share through marketing communication and continuous enhancement of the product offering.

WHAT ARE OTHER PRODUCTS OR SERVICES WE COULD LOOK FORWARD TO IN THE COMING MONTHS?
For Pag-IBIG Fund, we will also implement our collection service soon so Pag-IBIG Fund members can also remit their mandatory and MP2 savings through our branches and electronic banking channels.

 

CORRECTION:

An earlier version of this article erroneously reported that the Pag-IBIG UCPB eMoney Card was launched in 2012 for the following disbursement needs (distribute commissions; credit professional fees; pay contractual employees; transfer loan proceeds; send remittances; and disburse cash advances and allowances). UCPB has since clarified that the UCPB eMoney Card was launched in 2012 for various disbursing needs. The co-branded, reloadable Pag-IBIG UCPB eMoney Card is available to Pag-IBIG members (initially in Pag-IBIG Fund Metro Manila branches) starting mid-November of this year for the disbursement of Pag-IBIG short term loan proceeds.

Korea’s Zishel Group enters Philippine market

DAVAO CITY — The South Korean Zishel Group is entering the Philippine market, starting in Davao City with the launch on Tuesday of its cosmetic and medical lines.

Zishel Chief Executive Officer Jimmy Jong Woo Kim said aside from product distribution, they are already working on registering a Philippine subsidiary and possibly a manufacturing plant.

“We will also create an online store to attract the customers,” he said during Monday’s Kapehan sa Dabaw media forum.

James Min Kim, Zishel Group owner and chief medical officer, said, “We are looking forward to register our business here and we already had a meeting with the city council of Davao and the Davao City Investment Promotion Center. We are currently studying how much and how we are going to invest in Davao.”

Mr. Kim said they also plan to establish their aesthetic reconstruction and dermatology services in the city.

“We are not only focusing on investing to providing products but also provide an educational institute platform for clients who have the right to know and have the right message,” the company owner said.

Zishel has set up a team in the city to connect with local investors and the business community for possible partnerships.

“We always try to bring in something unique and innovative, mostly in aesthetics. We are also looking forward to be pro-active in the community so we have a wide spectrum of products from premium to medium to low-end products. We have the expertise,” Mr. Kim said. — Maya M. Padillo

BSP digitization initiatives to benefit banks, consumers

THE GOVERNMENT’S initiatives geared towards digitalization of payment transactions will foster opportunities for “coopetition,” according to Rizal Commercial Banking Corp. (RCBC) Executive Vice-President and Chief Innovation and Inclusion Officer Angelito “Lito” M. Villanueva.

Mr. Villanueva said the recent initiatives spearheaded by the Bangko Sentral ng Pilipinas (BSP), such as the EGovPay Facility and QR PH will benefit not only consumers but service providers as well.

“The good thing here is that what we call the “coopetition” — cooperation and competition — amongst players in this industry to really work together towards achieving that particular goal because no single entity or company would be able to address those gaps,” Mr. Villanueva told BusinessWorld in an interview on the sidelines of the launch of the EGovPay facility and QR PH held at the BSP last week.

The EGov Pay Facility, which had its pilot run in August that initially offered online tax payments for the Bureau of Internal Revenue, has on-boarded more government agencies. This includes allowing digital payments for the Department of Trade and Industry, Philippine National Police, and the city governments of General Santos, Manila, Valenzuela, San Pedro, Laguna, Baler, and Quezon City.

Vicente T. de Villa III, managing director at the BSP’s Financial Technology Sub-Sector, said the central bank is eyeing to include more agencies in the facility.

“We would like to have other government agencies to be included. Perhaps, LTO (Land Transportation Office), DFA (Department of Foreign Affairs), and all those other agencies that have frontline licensing and front line payments made by the public,” he told reporters on the sidelines of the Financial Inclusion Forum for the labor sector held at BSP last week.

Meanwhile, QR PH’s maiden launch will have six pilot payment providers including Asia United Bank Corp., China Banking Corp., Land Bank of the Philippines, PayMaya, UnionBank of the Philippines, Inc., and RCBC.

These digital initiatives will not only help consumers but also financial players themselves that will be developing these facilities, Mr. Villanueva said.

“This is not just about the convenience that we do that consumers will experience. But in fact, it also relates to us, to the operators and the players themselves, who will definitely be benefiting from this because of operational efficiency and cost reduction,” Mr. Villanueva said.

The BSP has required payment service providers to adopt the Europay, Mastercard, Visa or EMV QR code as a national standard by June 2020.

Amid these digitalization initiatives, BSP Governor Benjamin E. Diokno said they are targeting a higher share of digital payments in total transactions in the country by 2020.

“The original goal is 20% by 2020, the new goal is 30% by 2020,” he told reporters at the briefing before the launch of the EGov Pay Facility and QR PH.

Mr. Diokno noted that with the introduction of these new digital initiatives, he is positive that the Philippines will be a cash-lite economy by 2023 or when his term ends.

“Not cashless, but cash-lite… Right now we are cash heavy. I think cashless society will be in a matter of 10 years and not within the next five years,” he said.

BAYAD CENTER INTEGRATION TO GO LIVE BY 2020
Meanwhile, aside from being part of the pilot payment providers participating in the QR PH, Mr. Villanueva also shared other digital initiatives that RCBC is embarking on.

“There’s an ongoing integration with [CIS] Bayad Center, [Inc.], so we hope to launch the partnership or meeting the actual line for implementation by the first quarter next year,” Mr. Villanueva said.

RCBC’s partnership with Bayad Center will hook up the bank’s digital basic account, lending and Malayan’s insurance products into the mobile app of Bayad Center. The tie-up will also launch the Bankard-Bayad Center utility credit card which is the first of its kind that can be used for enrolment and automatic payment of customer’s monthly bills.

Mr. Villanueva added that RCBC’s mobile app has some of the “many firsts” features of mobile banking in the country, including a facility for foreign exchange — for buying and selling ten currencies — and an online time deposit placement of up to P10 million or $200,000.

The Yuchengo-led bank booked a 41% surge in its net earnings to P4.5 billion as of end-September, compared to the P3.2 billion seen in the same period in 2018.

The bank’s shares closed at P24.80 apiece on Tuesday, down by 0.20% or five centavos from the previous day’s finish. — Luz Wendy T. Noble

Backstage entry: How a Filipina makes it in NY’s theater scene

By Gerard de la Peña, News5

FILIPINOS have made quite an impression globally as performers, having conquered Broadway and the West End’s stages.

But one has entered the New York theater scene not onstage as a performer, but literally through the back entry — the backstage.

Sheryl Polancos had spent more than a decade working on the production and stage management side of theater in the Philippines. After finishing her AB Communication Arts degree from the University of Sto. Tomas, she worked for the Cultural Center of the Philippines-Tanghalang Pilipino and Atlantis Productions, among other theater groups, where she worked on the stagings of Himala, The Musicale, Piaf, Avenue Q, Shrek The Musical, and Next To Normal, to name a few. Now based in New York, Ms. Polancos is part of the stage management team of the critically acclaimed The Jersey Boys and Soho Repertory Theatre’s production of Samara.

After stints in off-Broadway productions, her goal is to be part of shows with bigger audiences on Broadway.

News5/BusinessWorld was able to talk to Ms. Polancos to discover her journey through the road less travelled.

What brought you to the US?

I’ve always wanted to work in Broadway. I wanted to be in the middle of the melting pot of arts and theater so that solidified my decision to move to New York and pursue my dreams even if I had to start from scratch again.

What is so exciting in New York?

I feel like New York is the leader when it comes to pushing boundaries in art. It is unapologetic that’s why I love it. New York is such a diverse city — the people, the culture, the food, they’re all fascinating. New York opens your eyes to new things and experiences. It is the birthplace of some of the great works in theater and to witness it — or be in it — first hand is very exciting.

Most Pinoys would probably take performing seriously in order to land a job in New York or the West End.

In your case, why enter through the backstage?

My first love really was dancing but I got injured when I was about to start my freshman year in the university. So in the meantime I told myself I will try my hand in theater as an actor and once I’m healed, I’m going back to dancing. But like most people, I caught the theater bug and never left. After graduation, I applied at the Cultural Center of the Philippines as assistant production manager. I liked my job but I didn’t particularly love it. Then I found out I wanted to be a stage manager. Now why backstage, particularly stage management? I’ve always had great respect for stage managers. I feel like they are the magicians and unsung heroes of theater. It gave me a different sense of fulfilment when I’m on the other side to see all the hard work finally come together. The stage manager is the glue that holds the show together. And so I told myself, my aim is to become the best stage manager I can be. For me to get that training and experience, I told myself I want to penetrate New York.

How would you differentiate working for Philippine productions vs. New York productions?

I don’t see a big difference as far as the rehearsal process or running shows is concerned. The difference is managing people. In the Philippines, our productions have short runs while they have long-running shows in New York. In the Philippines, we’re done after a three-week run. Same with off-Broadway productions that run for a couple of months. It’s a whole different beast when you’re maintaining a long-running show. So the difference really is maintaining the show and managing the company for years, and keeping the show’s integrity intact. I’d say that’s the training that I didn’t get from running shows in the Philippines. Now I am still learning all these things.

How would you differentiate the working conditions in Philippine theater compared to those in New York?

In the Philippines, stage managers don’t have a union but here in New York, we have what we call Equity (An American labor union representing live theater performance — Ed.) so we are protected by rules once we step in a rehearsal space or theater. For example, as an assistant stage manager, we’re not allowed to touch a prop or move a set piece because the deck crew does that. And they are also bound by their union rules. So there is no overstepping of jobs.

But I see my experience in the Philippines as an advantage because stage managers here are not necessarily trained on deck tracks. When presented with a complicated production that we have to do a full deck track while doing stage management, I feel like I have an edge over them. Since we don’t have a union in the Philippines, I’ve been trained to be a stage manager and also as a crew person. So when I’m running a show here, my brain and body can multitask and function not only as a stage manager but also as crew. I have to thank Philippine theater for that.

How was it working with the big names in New York theater scene?

Working with Tony Award-winning directors, choreographers, actors, legends, and even lighting designers was pretty intimidating. But then you get to know them and you realize they are just regular people having the same goal as you do, which is to create or maintain a wonderful show. It’s so fascinating to be able to work with them closely and be a witness to their process. Even just hearing these award-winning directors give notes to the actors is already a privilege and an honor.

What are your dream productions in New York?

When I came to New York for a visit, I planned on watching The Curious Incident of the Dog in the Night-Time because I have read the book and really loved it. So when I saw it on Broadway, I told myself I want to be a part of this show some day. They are currently on tour. Also, everyone close to me knows I’m a Harry Potter fan so to be in Harry Potter and the Cursed Child would be a dream come true.

Who do you dream of working with?

To be honest, more than the dream of working with actors or celebrities, I really want to be able to work with stage managers of big Broadway shows and pick their brain and learn from them. I think I geek out more on stage managers, directors, and choreographers than actors.

Gerard de la Peña , a former reporter at BusinessWorld, is now a senior corresponded at TV5 and One News and an achor at Radyo Singko 92.3 NewsFM.

La Alegre and the Waray zarzuela Lunop Han Dughan

By Victor N. Sugbo

Theater Review
Lunop Han Dughan
Written by Samlito Abueva
Directed by Joycie Dorado Alegre
UP Visayas, Tacloban City
Nov. 7 and 9

LUNOP HAN DUGHAN, shown in Tacloban City on Nov. 7 and 9, brought a new whiff of dramatic energy to the traditional Waray zarzuela and community theater after two decades of moribund theater activity in Tacloban. Previous presentations of Waray zarzuelas were mostly nostalgic revivals, notably the plays of Iluminado Lucente whose works still lend well to staging. Held for the 6th Commemoration of the Supertyphoon Yolanda Disaster, Lunop was not the usual zarzuela. While it carried the trappings of the form — music, songs, dances, and dialogue — Lunop underwent a kind of reinvention. Surreal, metonymic and folksy, its new configuration seemed designed to test the waters of social acceptance with its new audience.

A complex narrative consisting of local myth, realistic events, minimal realia, old folk and new pop songs, surrealism, and the return of an old love, Lunop unpacks surprises and a certain realization. The first surprise was that the original music played during the deluge scene and the Magna Mater’s lamentation scene were compositions of National Artist for Music and UP Professor Emeritus Ramon Santos, who also conducted the performance of his original compositions, played by the rondalla musicians of the Leyte Kalipayan Dance Company and Leyte National High School Special Program for the Arts.

The second surprise was the appearance of UP soprano and voice professor Alegria Ferrer as Magna Mater (earth mother) whose theatrical presence and vocal prowess, essaying the sung prophecies and lamentation, electrified the stage.

Despite their exposure to vibrant K-pop, J-pop, variety shows, and cinema, the young audience were no different from their great-grandparents who watched an Iluminado Lucente zarzuela in Plaza Rizal sometime in the late 1940s and ’50s. Like past habitués of Lucente zarzuelas, they participated in Lunop by applauding every time an actor or set of actors sang. In their seats, they would occasionally hum the song along with the actors. They would also burst into waves of muffled giggles and guffaws whenever the star-crossed lovers, Urbano and Maribel, met looking at each other intensely, singing their plaintive sad songs.

The revival of folksongs that may have been forgotten by Tacloban lightened sad and heavy moments in Lunop. It made the older audience nostalgic. It also provided the younger audience a taste of melodic Waray compositions written by the almost forgotten Pablo Rebadulla of Calbayog and A. Jaro of Tacloban, along with the new bouncy tunes written and composed by Samlito Abueva.

Lunop is a directorial oeuvre of Joycie Dorado Alegre. For her, theater performance is not an inert object. She views it as a fluid fabric. For this reason, the sensorial texture of the play undergoes regular assessment, modification, reinvention or revision. Theater directing, in this case, becomes an active orchestration of elements that transmutes from acting to blocking, from singing to dancing, a jagged search for the appropriate theater syntax. As such, acting undergoes frequent modification. Only the text is left untouched. Depending on exigencies, however, it too gets altered. In this regard, the play’s text is never final, and is in transit.

As though these are not enough, Alegre treats her actors like clay whose acting and singing she must keep shaping and reshaping. In this way, each stage presentation becomes a perilous auditory and visual adventure, as changes introduced into each performance of the play could break into a vulgarity. This approach to theater resonates from her past theater work, where she envisioned and still envisions the play’s performance as an unremitting search for the figurative theater morpheme that would bring out what she thinks the audience should feel and believe in the end.

In Lunop, Alegre boldly juxtaposes the hyperbolic time of Dang and Mulay (in the Mount Danglay myth) with the realistic narrative time of Urbano and Maribel. In both stories, Dang and Mulay and Urbano and Maribel meet tragic deaths; Dang and Mulay, in the deadly embrace of a giant crab that strangles them; Urbano and Maribel, in the whirling flood waters of a super typhoon. This juxtaposition implicitly paints Urbano and Maribel as likely incarnations whose ill-fated lives were already written in the stars.

The story of Lunop is a simple narrative about a married couple, Maribel and Turing, who by force of circumstances, are compelled to marry. Turing is a dynamite fisher, a womanizer, and a drinking sot. Maribel marries him because her father owes a large debt to Turing’s father. The union is blessed with three children but it is not a happy marriage. The arrival of Urbano in the coastal village where Turing and Maribel live complicates matter. A mariner on vacation, Urbano gets to talk to Maribel during a fiesta celebration in Turing’s house. In this brief time they have, Urbano and Maribel profess love for each other, but they both know their love can never be fulfilled. Turing catches Urbano and Maribel talking intently and commands Urbano to leave his wife.

The occurrence of a violent storm turns the coastal village of Turing and Maribel in disarray. This is further aggravated by the rising flood waters driving people to higher grounds. Caught in the flood waters, Urbano finds Maribel and her children on an elevated area, but even this is claimed by the flood. Maribel slips into the rising water and Urbano tries to save her, and in their flurry to save each other they are seen by Turing who is also struggling to save himself. Unaware of impending danger, Urbano and Maribel are overrun by an unmanned cargo ship which the violent storm winds and the surging swollen sea drive in the direction of Turing’s coastal community. Now alone, Turing redeems himself from his guilt by assuring his children of his love and care.

How Alegre unravels the simple narrative of Urbano and Maribel and the ill fate of Turing is in itself interesting. With actors who undertook nights and nights of grueling acting, she mounts the play on a layered circular stage. Designed by UP Architect Jose Danilo Silvestre, it became the tight but fragile cosmos where nature defined human fate and where lives rose and fell. With the minimal use of realia, Lunop opened for Alegre the opportunity to play with metonyms. The placement of two seats in a spot on the stage, for instance, turned the space into a metonym for a living room. Interestingly, the predominantly red mats of Basey, Samar in the hands of strange-looking sea harpies (dancers) became a wall in one scene, and frightening sea waves in another scene — dance sequences co-designed with choreographer Eulogio Plameran. The lighting of candles at the penultimate scene stood for the tapos, a ritual marking the end of prayers for the dead. Moreover, the reappearance of Dang and Mulay towards the end of the play animated the emotional low point of the audience in that Urbano and Maribel appeared like resurrected souls in the afterlife. In our cosmos, there are really no finalities. There are just passages. The use of metonymy and myth, the presence of Magna Mater and the gossamer Mount Danglay backdrop created by painter Archie Zabala, provided a surreal feel to the play’s performance.

The realistic plot and dialogue and the surreal atmosphere inherent in the stage presentation comprised a paradox that Alegre had to contend with. She, however, transcended these by putting actors under intensive training so they could enact their roles with a finely tuned devotion to create believable stage selves outside of their own. Notable here was the acting of Pierre Dan Ampo, who literally absorbed his loud-mouthed and menacing Turing persona. Equally noteworthy were the laudable performances of Urbano (Gabriel Asanza) and Maribel (Lina Fe Simoy) as the ill-fated lovers whose meetings were at times humorous, many times poignant and sad. Turing and Maribel’s children Aliya (Elizabeth Zamora), Makoy (Jay Cris Juyad), and Egay (Melanie Ladica); the comic characters of Sayong, (Danica Ybañez), Tiyong (Mark Joseph Daduya), Doming (Ivan Ray Pontoy), and Dulce (Rosary Jasmine Padilla); the Theater Arts students who acted as strange-looking sea harpies — all turned in credible performances. Despite the brevity of their appearances, they contributed to the successful staging of Lunop as written by Samlito Abueva. Once more Alegre proved her worth as theater director cum auteur. The enthusiastic public reception of her work in Lunop was an attestation.

The presentation of Lunop Han Dughan was made possible by the UP Visayas Tacloban College, the UP Office of the Vice-President for Academic Affairs (Enhanced Creative Work and Research Grant) in partnership with Silhag Cultural Association in the Philippines and the National Commission for Culture and the Arts. The An Waray Party List likewise served as sponsor.

Dr. Victor Sugbo is a multi-awarded poet, professorial lecturer of Literature and Communication in UP Visayas Tacloban College.

Strong fundamentals to lift financial markets; gov’t spending to support economic growth

LOCAL financial markets performed well for the most part in the third quarter, buoyed by positive developments at home amid a slew of uncertainties abroad.

That period saw the peso appreciate against the US dollar by 3.37% on a year-on-year basis to average P51.74-per-dollar relative to the P53.54-per-dollar average in the third quarter of 2018. Traders that time attributed the peso’s appreciation largely to expectations of an interest rate cut by the US Federal Reserve.

“In the third quarter of 2019, favorable developments supported the positive performance of financial markets in the country such as the 1) benign inflation environment; 2) dovish outlook from the US Federal Reserve and the BSP; and 3) the easing trade tensions between the US and China,” said Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila, Jr. in an e-mail to BusinessWorld.

These developments, he said, were able to offset the impact of the decelerating domestic GDP (gross domestic product) growth in the second quarter and “external headwinds” brought by the absence of a Brexit deal.

The US Fed cut interest rates for the first time in more than a decade in July and did so again at its subsequent policy meeting in September in what US Fed Chair Jerome Powell and some others have characterized as “insurance” against risks to the economy.

US job growth increased moderately in September and the unemployment rate dropped to near a 50-year low, the US Labor department reported on Oct. 4, allaying concerns the economy is nearing recession.

Meanwhile, at home, the debt paper auctions conducted in the third quarter indicated strong demand. For instance, the Treasury-bill (T-bill) auctions conducted in July to September saw total subscription for the quarter amounting to around P333.04 billion, which is around 3.7 times the P90-billion aggregate offered amount.

Similarly, Treasury-bond (T-bond) auctions during the period had a total subscription amount of P370.5 billion, 2.6 times more than the offered amount of P140 billion.

In the secondary bond market, domestic yields on the benchmark 91-day T-bills and 10-year T-bonds were down by 135.8 bps and 27.1 bps, respectively, in end-September compared to end-June levels. Yields were down across the board, lower by 70.39 bps on average during the reference period, according to the PHP Bloomberg Valuation (BVAL) Service Reference Rates published on the Philippine Dealing System’s website.

“[T]he sustained deceleration of inflation as well as dovish pronouncements of the BSP helped drive the rally of the domestic GS market. RRP (reverse repurchase) cuts as well as reductions to the reserve requirement ratio (RRR) helped push yields lower while additional liquidity freed up by RRR infusions simply found their way to the fixed income market given the lack of any better alternatives,” ING Bank Senior Economist Nicholas Antonio T. Mapa.

For equities, the Philippine Stock Exchange index (PSEi) closed the July–September period at 7779.07, down by 2.8% compared to second quarter’s a mere one percent rise.

DOMESTIC ECONOMY REBOUNDS
Amid uncertainties abroad, positive developments at home had helped lift investor sentiment.

One such development, BSP’s Mr. Dakila pointed out, is the slowing inflation in the domestic economy. In the third quarter, inflation further decelerated to 1.7% from 3% in the second quarter. This brought the year-to-date average inflation to 2.8%, which is still within the government’s target of 2-4%.

In October, inflation eased to 0.9%, its slowest clip since the 0.7% observed in April 2016 amid lower food and electricity prices paired with base effects coming from last year’s nine-year high 6.7% inflation logged in September and October 2018.

“The latest inflation outturn is consistent with the BSP’s overall assessment that inflation has likely bottomed out in October and could start to pick up slightly in the remaining months of 2019 as base effects from 2018 will turn positive,” Mr. Dakila said.

Nevertheless, Mr. Dakila said the project gradual uptrend is “still consistent” with the central bank’s overall assessment of a “benign” outlook of inflation settling within the target range of 2-4% for 2019-2021.

“The country’s continued favorable macroeconomic performance is likely to support investor sentiment in financial markets for the remainder of 2019,” Mr. Dakila said, adding that higher government spending is “expected to provide support” to economic growth as well as contribute to positive investor sentiment.

The low inflation environment, coupled with disappointing economic growth figures in the first-half supported the BSP’s move to dial back last year’s rate hikes in the face of successive multi-year-high inflation rates. So far, the BSP has cut these rates by a cumulative 75 bps, two of them in the third quarter with reductions of 25 bps each on Aug. 8 and Sept. 26.

The next day, the BSP announced a 100-basis point reduction in RRR for universal and commercial banks to 15%, five percent for thrift and rural banks, and three percent for rural banks, respectively, to take effect “on the first day of the first reserve week of November.”

The quarter also saw the government catching up on spending. Budget department data showed the government having spent about 17% more at P1.04 trillion in the third quarter from P886.2 billion a year earlier, which is a marked improvement from the 2.3% contraction in the second quarter and 0.8% in the first quarter.

Moreover, infrastructure spending reached P234.8 billion in the third quarter, 7.7% more than the P218.1 billion recorded in July–September last year. A closer look at the data showed infrastructure and other capital outlays reaching P100.3 billion in September, picking up from August’s P59.3 billion and the P65.2 billion spent in September last year.

OUTLOOK
Economists expect the economy to fare better in the second half, and even more so considering its performance in the third quarter.

“On the domestic front, the speedbumps that caused the slowdown in growth are largely behind us with the government spending accelerating rapidly to chase their spending targets. Meanwhile, successive easing from the BSP may finally help resuscitate lending and capital formation going forward with GDP expected to recover,” said ING Bank’s Mr. Mapa.

“Meanwhile, other developments, such as decelerating inflation will likely reverse in the coming months as base effects wash out, limiting the potential rally for the GS market further,” he added.

For UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, domestic markets will improve due to lower inflation, but noted “downside risks” to this outlook such as the ongoing US-China trade war and the oil price movements.

Security Bank Corp. chief economist Robert Dan J. Roces said that the driving factors in the third quarter such as the US Fed rate movements, developments in the US-China trade negotiations, Brexit, the BSP monetary easing, below-target inflation, and the rebound in GDP growth would continue to sway financial markets in the fourth quarter with “special emphases” on the possible phase one agreement between the US and China that would potentially lead to normalization of trade relations and the government’s timely release of the 2020 budget schedule.

Below are the outlooks for each of the key markets:

EQUITIES MARKET
BSP’s Mr. Dakila: “Encouraging reports on third-quarter domestic corporate earnings and better-than-expected third-quarter Philippine economic growth are likely to positively influence market sentiment. The improved outlook on the Philippine economy and low inflation environment can help buoy the equities market amid continued external headwinds.”

“For one, while import growth is set to recover as infrastructure spending picks up, export growth will likely remain lackluster as global growth continues to slow down. In addition, US-China trade reports, combined with the evolving path for Brexit, can contribute to market fluctuations in the short term.”

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort: “Local equities could continue to gain in the fourth quarter of 2019 as relatively lower inflation and local interest rates (lower borrowing costs), as well as faster GDP growth, could further support faster growth in both sales and net income of Philippine companies, thereby justifying improvements in equity valuations and prices.”

“On external factors, improved global market risk appetite amid the possible partial trade deal between the US and China in November 2019–December 2019 and less uncertainties related to Brexit drove US stock markets to new record highs in November this year, thereby could support sentiment on the global stock markets and local as well.”

UnionBank’s Mr. Asuncion: “As the inflation continues to ease, a recovery in equities market is expected. The market will be advanced by the strong earnings of domestic companies and the strength of foreign corporations.”

ING Bank’s Mr. Mapa: “Equity market could benefit from reallocation as well as stronger growth figures to close out the year.”

Security Bank’s Mr. Roces: “Upward. Easing inflation, rate cut, lingering trade tension, after mostly consolidation in 2019.”

FIXED-INCOME MARKET
BSP’s Mr. Dakila: “Philippine bond market activity is expected to be influenced mainly by National Government issuance of government securities as part of its borrowing program. Meanwhile, corporations are likely to continue to tap the debt securities market to support their funding requirements. Corporate bond issuances from the first three quarters of 2019 stood at P376.3 trillion, 23% higher than total corporate bond issuances in 2018.”

“Bond market activity will also be supported by continuing efforts to further develop the Philippine capital markets. For example, the BSP issued Circular 983 that set a zero-percent reserve requirement ratio on repo transactions to encourage more players and enhance price discovery and liquidity in the market. This complements the decision of the Bureau of Internal Revenue to exempt repo transactions under the program from documentary stamp tax. These initiatives will reduce transaction costs for the repo market and encourage debt issuances by corporations.”

“Recent ratings and outlook upgrades are likewise expected to translate to lower borrowing costs from the international market for both the government and private corporations. In turn, this could translate further to cheaper financing options for the domestic market that could improve the country’s external position.”

RCBC’s Mr. Ricafort: “Philippine BVAL yields could remain steady/relatively low (some local bond yields still among two-year lows) amid relatively benign inflation environment and after the series of policy rate cuts that lowered borrowing costs and cuts on banks’ RRR that infused a total of about P440 billion in additional liquidity into the financial system that could support relatively low local borrowing costs, faster increase loan growth, faster growth in capital formation, and increased economic activities.”

“However, increased global market risk appetite could lead to some upward correction in benchmark bond yields in the US and other developed countries that could indirectly affect local bond yield benchmarks (partly reversing the risk aversion in the earlier part of the third quarter that resulted in new lows in the benchmark bond yields in the US and other developed countries).”

UnionBank’s Mr. Asuncion: “Lower interest rates tend to discourage investors to invest them in fixed-income securities like bonds. Yields might continue to move downward due to the recent RRP cut and the effectivity of RRR cut on December.”

ING Bank’s Mr. Mapa: “Likely correction to close out the year if liquidity conditions tighten and inflation accelerates.”

Security Bank’s Mr. Roces: “Upward. We think that downside to yields will be subdued as it seems that BSP has already carried out all planned easing measures for the years and as US yields continue to rise following risk-on sentiment. Will offer attractive yields against developed market and regional peers.”

FOREIGN EXCHANGE MARKET
BSP’s Mr. Dakila: “The peso’s movements in the near term will continue to reflect fundamental (long term) factors alongside temporary or short term factors that may affect local market sentiment. For its part, the BSP continues to adhere to its policy of allowing market forces to determine the level of the peso, which provides the following benefits: (i) a flexible peso is consistent with the BSP’s inflation targeting framework; and (ii) a flexible peso acts as an automatic stabilizer to restore macroeconomic balance for a small open economy like the Philippines.”

RCBC’s Mr. Ricafort: “Seasonal increase in OFW (overseas Filipino worker) remittances and conversion to pesos in the fourth quarter of 2019 partly due to some tuition payments and for Christmas-related spending could still support further gains in the peso exchange rate versus the US dollar as seen recently, with the peso among the strongest levels in 22 months at 50.00 levels recently.”

“On external factors, improved global market risk appetite amid positive developments on the US-China trade talks for a possible partial trade deal in November 2019-December 2019 could help improve sentiment on Emerging Market financial markets, including the Philippine financial markets.”

UnionBank’s Mr. Asuncion: “The peso will continue to depreciate as the market expects more positive signs from the US. Seasonal and intermittent strengthening periods are anticipated due to the inflows of personal remittances from overseas Filipinos, and service sectors (BPO and Tourism).”

ING Bank’s Mr. Mapa: “[The peso is] seen to enjoy short term strength, but eventually see marginal weakness on profit taking after carry trade thins out.”

Security Bank’s Mr. Roces: “Steady. Easing done by the US Fed may be the last for the year, offset by US-China trade jitters where a phase one agreement may happen late in the year or early next year. Also, slight depreciation expected due to upcoming (pre-announced) rate cuts and inflation rising back to 2-4% range. — Lourdes O. Pilar

Taiwanese firm launches $1M-gold processing facility in Camarines Norte

XIN YE Precious Metal Technology Co. Ltd. on Monday launched its first $1-million gold processing facility in Jose Panganiban, Camarines Norte.

In a statement, the company said it partnered with local mining company Johnson Gold Mining Corp. for he facility, which can process 11.5 metric tons (MT) of concentrate per day. The potential gold yield is around 50 grams per ton, or 550 grams of gold per day.

Xin Ye, through local unit Philippine Xin Ye Industry Ltd. Inc., is also hoping to get an endorsement from the Environment department for its “eco-friendly, cyanide-free ore stripping technology for small-scale gold mining in the country.”

Xin Ye wants to work with the Mines and Geosciences Bureau (MGB) to promote the use of the technology to operators in 29 Minahang Bayan areas around the country.

“We are committed to the protection of our environment and natural resources by responsible mining,” Xin Ye President Michael Yao said in a statement.

Mr. Yao said its locally patented Green Power-860 (GP-860) solution offers small-scale miners the option to use a safer way of stripping gold without the use of dangerous chemicals. The solution does not contain cyanide and mercury.

“GP-860 gold stripping technology aims to replace traditional extraction process, which usually involves the use of the banned chemical mercury that remains popular and widely used by small-scale miners in the Philippines,” the company said in a statement.

This technology can also shorten ore-to-gold extraction to six to eight hours, from two to eight days through the traditional method.

At the same time, Xin Ye said it is talking to eight mining companies in Baguio and Bicol who are keen on the technology. The company targets to close the deals in 2020. — V.M.P.Galang

PHL catastrophe bonds attract strong demand

THE CATASTROPHE-LINKED bonds (CAT) the government launched on Monday through the World Bank was met with strong interest from investors as it served as a diversifier to the pool of such securities in the market, top officials said.

“The successful float of the Philippines’ first ever ILS (insurance-linked security) or Cat bonds is one more proof of the strong investor support of the international business community for the Philippines amid the sweeping reforms being implemented by the Duterte administration to sustain the growth momentum while climate-proofing the country,” Finance Secretary Carlos G. Dominguez III was quoted in a statement released yesterday.

The Bureau of the Treasury (BTr) said aside from being the Philippines’ first CAT bonds, this issue was also the first CAT bonds to be listed in the Singapore Exchange and in any Asian exchange.

Last October, the government announced its plans to approach international financial markets to provide protection against earthquake and tropical cyclone risks. The BTr said that in partnership with the World Bank, the securities were planned to be coursed through the multilateral lender through the issuance of the ILS.

National Treasurer Rosalia V. de Leon said even though it took the government years to finalize the securities, it is high time for them to guard the fiscal health of the country against natural disasters given the country’s exposure to calamities.

“This instrument was years in the making, and we are grateful to the World Bank and our structuring agents for ensuring a successful deal. With our exposure to natural disasters, we cannot just sit idly by and do nothing,” Ms. De Leon was quoted as saying.

“We would also like to thank the Monetary Authority of Singapore (MAS) for their invaluable support of this endeavor and for the grant that they gave the Philippines to defray some of the expenses of this transaction,” she added.

The CAT bonds have two tranches, with a $75-million allotment for losses from earthquakes and $150 million for losses from tropical cyclones. Both tranches have a settlement date of Nov. 22 and maturity date of Dec. 2, 2022.

The bonds were under the International Bank for Reconstruction and Development’s capital-at-risk notes program designed to transfer risks related to natural disasters to capital markets.

To trigger payouts, an earthquake or a tropical cyclone will need to meet the criteria set under bond terms. — Beatrice M. Laforga

Art & Culture (11/27/19)

CCP launches art book for 50th year

THE Cultural Center of the Philippines launched an exhibition book entitled POSTER/ITY: 50 Years of Art and Culture at the CCP yesterday. The book features the posters that are currently exhibited at the CCP in line with the celebration of its 50th anniversary. The CCP’s timeline is also featured and it shows the significance of the posters and how they portrayed the artistic directions of Filipino aesthetics that evolved from the 1970s towards the search of a new identity in the present. For details regarding the book, check the CCP Intertextual Division Facebook page or contact the Intertextual Division at ccpintertextualdivision@gmail.com, 8551-5959 or 0919-317-5708. For more information on the Posterity exhibit, contact the CCP Visual Arts and Museum Division, Production and Exhibition Department at loc. 1504/1505 and (632) 8832-3702, mobile (0917-603-3809), e-mail (ccp.exhibits@gmail.com).

León Gallery’s Kingly Treasures Auction 2019

LEÓN GALLERY’s yearend The Kingly Treasures Auction 2019 featuring Philippine fine art, antiques, and furniture from the Luis Ma. Araneta y Zaragoza Collection on Nov. 30, 2 p.m., at Eurovilla 1, Legaspi St. corner Rufino St., Legazpi Village, Makati City. An architect, Mr. Araneta (1916–1984) designed the Makati Medical Center, Manila Doctors Hospital, the Immaculate Concepcion Church in Cubao, and the Times Theater in Quiapo. Among the items for sale are Fabian de la Rosa’s Landscape (Mariquina); two pieces by National Artist Fernando Amorsolo, the early work River (1927, 18” x 12”) and a later Under the Mango Tree (1962, 24” x 33”); a rare “late Neoclassical” stained golden narra armchair with original mother of pearl inlays; a pair of batikuling wood archangels with their original polychromy and gilding from turn of the 19th century; and a letter signed by Katipunan Founder and Supremo Andres Bonifacio in 1892 on the organization’s desire to expand its reach to Mindanao. Other historical documents are a Katipunan blood oath, one of only two extant known today; a battle map of the first three days of the Cry of Pugad Lawin; several cedulas personales; and a “dramatic eyewitness portrayal” by Jorge Pineda of the execution of Jose Rizal at the Luneta. The preview of The Kingly Treasures Auction 2019 is ongoing until Nov. 29 at León Gallery. For details visit www.leon-gallery.com, call 8856-2781 or e-mail info@leon-gallery.com.

Gateway Gallery exhibit on Andres Bonifacio

IN CELEBRATION of Bonifacio Day on Nov. 30, 10 a.m. to noon, the Gateway Gallery in Araneta City, Cubao, QC presents Bonifacio Redux¸ a project of the culture and heritage advocacy group Proyekto that aims to revisit the life and heroism of Andres Bonifacio. Professor Xiao Chua of De La Salle University will give a talk on “Andres Bonifacio: Comparing Old and New Biographical Dara and their Sources,” while John Ray Ramos of Ateneo de Manila University will give a talk on “Heroism for Kids: History and Heroes in Children’s Literature.” Registration is P300, inclusive of a certificate and a copy of the book Bayani Biographies: Andres Bonifacio, authored by Xiao Chua and John Ray Ramos, and published by Kahel Press. To register, text or call Proyekto at 0920-222-8889. Pre-registration is required for the certificate of attendance. Gateway Gallery is located at the 5f Gateway Tower, Araneta City, QC.

Tickets to Matilda the Musical are out

TICKETS to the international tour of the award-winning show Matilda the Musical are now available on TicketWorld. Matilda opens at The Theatre at Solaire on March 5, 2020. The stage adaptation of the Roald Dahl classic was originally produced for the stage by the Royal Shakespeare Company. The producers are launching the Tuesday Special: one price across all orchestra seats, and one price across all balcony seats. With book by Dennis Kelly and original songs by Tim Minchin, Matilda The Musical is the story of a little girl who, armed with a vivid imagination and a sharp mind, dares to take a stand and change her own destiny. Winner of over 85 international awards, including 16 for Best Musical, Matilda The Musical is now in its 7th year in London.

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