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Holcim PHL shows flat profit growth for January-March

HOLCIM Philippines, Inc. (HPI) booked flat profit growth in the first quarter of 2019 due to lower sales and higher interest expenses.

In a regulatory filing, the listed cement manufacturer said net income attributable to the parent stood at P703.63 million from January to March, slightly higher than the P699.65 million it posted in the same period a year ago.

This followed a 5.82% decline in net sales to P8.10 billion. The company was affected by the shutdown of its Mabini, Batangas plant last March on the order of the regional Environmental Management Bureau. This reduced its volumes by 102,000 tons for the month.

HPI also noted that it incurred higher interest expenses for the quarter due to its short-term loans, further weighing down its bottom line.

At the same time, the company was able to raise its operating EBITDA, or earnings before interest, taxation, depreciation, and amortization, by 30.7% to P1.7 billion. HPI said this was due to the lower cost of goods sold complemented by a decrease in operating expenses.

“Our focus on raising profitability through tighter cost management, improved operational efficiency and commercial innovation continues to pay off as seen in our business results, and we are determined to build on these further,” HPI President and Chief Executive Officer John Stull said in a statement.

“We will continue to execute with precision to deliver on shareholders’ expectations and become a stronger partner in the country’s progress.”

HPI is currently being acquired by diversified conglomerate San Miguel Corp. for $2.15 billion, as the cement manufacturer’s parent Lafarge Holcim Group is unwinding its investments in Southeast Asia to focus on other markets. The transaction is currently pending regulatory approval. — Arra B. Francia

Filinvest Land income rises 24%

FILINVEST Land, Inc. (FLI) booked a 24% increase in earnings in the January to March period on the back of strong rental and real estate revenues.

In a statement issued Wednesday, the Gotianun-led property developer said net income improved to P1.84 billion in the first quarter of 2019, versus P1.49 billion in the same period last year. Gross revenues also rose 15% to P7.2 billion.

Rental revenue alone jumped 42% to P1.72 billion, thanks to the completion of six office buildings last year which added 118,00 square meters to the company’s gross leasable area (GLA).

FLI has also completed another office building called Axis Two in Northgate Cyberzone in Alabang, covering an additional 39,000 sq.m. This brought its total GLA to 510,000 sq.m. by end-March, about a third of its 1.6-million sq.m. target by 2023.

Meanwhile, real estate sales revenue hit P5.11 billion, 10% higher year on year. The company benefited from its focus on affordable housing brand Futura and middle income brand Aspire.

The company last week broke ground on the 288-hectare New Clark City, a project in partnership with the Bases Conversion and Development Authority. The property will house a 64-hectare innovation and logistics park, as part of FLI’s goal to increase its recurring income portfolio. — Arra B. Francia

GMA to launch DTT device by 2nd half

By Denise A. Valdez, Reporter

GMA NETWORK, Inc. said it will be launching a digital terrestrial television (DTT) device this year, which will allow users to stream its free-to-air shows through mobile phones.

During the company’s annual stockholders’ meeting Wednesday, GMA Chairman and Chief Executive Officer Felipe L. Gozon said the company is investing “over a billion pesos” to complete the second phase of its digitization project, part of which will be the launch of its DTT device “MyGMA Go.”

“Our digital device, which will have features that our competitors do not have, will be finally launched some time in the second half of this year,” he said.

Mr. Gozon told reporters the product will be like a dongle that could be attached to Android phones to enable the device to receive signals to watch GMA shows and other free-to-air channels.

The devices will be sold through GMA’s digital transformation partner PLDT, Inc. and its wireless subsidiary Smart Communications, Inc., with an initial target of selling one million out of the total of four million units nationwide.

“[W]ith the other features, I’m hoping madaling ibenta dahil mas mura eh. Pero sa smartphone lang muna ’yun [I’m hoping it will be easier to sell because it is cheaper. But it’s for smartphones for now],” he said, noting the digital device will cost around P500 each.

The company started transmitting digital TV signal using its permanent frequency UHF Channel 15 yesterday.

Mr. Gozon noted they decided not to launch a similar product to rival ABS-CBN Corp.’s TVplus box, as they wanted something mobile and allows interaction.

For 2019, the GMA chairman said the company is targeting to grow its revenues by 12%.

“I am confident that this year will bring better financial results because of election-related revenues as well as those from our recurring advertising sales. We target to increase our 2019 revenues by 12%,” Mr. Gozon said.

In a regulatory filing, GMA said its attributable net income surged 70.7% to P716.08 million for the January to March period, driven by an increase in revenues from advertising placements.

Consolidated revenues grew 14% to P3.8 billion from P3.34 billion in the same period last year, coming mostly from political advertisements that contributed more than P300 million from January to March.

Excluding the impact of election-related advertisements, GMA said its consolidated sales from recurring revenues still grew 4% during the period.

While advertising revenues increased 16% to P3.5 billion, revenues from subscriptions and others declined 8% to P302.2 million in the three-month period.

Expenses were flat in the first quarter at P2.81 billion from P2.77 billion the previous year.

“Cost-wise, the Company continued to display a conscious effort to manage spending…. Production and other direct costs which made up more than half of total (operating expenses) even contracted by P79 million or 5%, thus cushioning the escalation in general and administrative expenses which grew by P117 million or 10%,” GMA said in a regulatory filing.

Strong sales drive CLI earnings higher

CEBU Landmasters, Inc. (CLI) reported a 23% increase in its net income attributable to parent during the first three months of 2019, on sustained sales of its projects in Cebu.

The listed property developer said attributable net income stood at P599 million in the first quarter, higher than the P486 million recorded a year ago.

Revenues rose by 48% to P1.87 billion during the period from P1.264 billion last year.

“Our positive financial results are motivated by our vision to be the leading and preferred developer in Visayas and Mindanao,” Jose R. Soberano III, chief executive officer of CLI was quoted saying in a statement.

“We have sustained our growth momentum as we continue to be highly effective in the construction and delivery of our projects. It is our commitment to deliver on-time, high quality products to our customers,” he said.

Reservation sales also recorded growth during the period by 29% to P3.877 billion, as it launched new projects, namely One Paragon Place and Citadines Paragon in Davao and Casa Mira Towers in Cagayan de Oro.

Sales were driven by the Garden series, the company’s mid-market brand, accounting for 36% of the total. Meanwhile, economic housing brand Casa Mira accounted for 31% of the total revenues, and the high-end brand Premier Series for 29%.

Based on location, Cebu projects accounted for 58% of the total revenues, while new expansion areas like Bacolod, Dumaguete, Cagayan de Oro, and Davao have started to show notable contributions to revenue by 15%, 12%, 8%, and 6%, respectively.

This year, the company is targeting to reach P12.5 billion in reservation sales, from P9.8 billion in 2018.

“We are on-track to achieve the guidance we provided for the year 2019. We reaffirm our target to grow our consolidated revenue to P8.4 billion, consolidated net income to P2.6 billion and parent net income attributable to P2 billion,” Mr. Soberano said.

As of the first quarter of 2019, Cebu Landmasters has 58 projects, with 27 of which are completed, and 31 still being completed. Within the year, the company is also targeting to launch 26 more projects.

Shares in Cebu Landmasters went up by 4.26% or 0.2 centavos to close at P4.90 each at the stock exchange on Wednesday. — Vincent Mariel P. Galang

Anthology of top food essays launched

WRITING about food is an experience both universal and personal: while everyone around you may eat the same thing, everyone has a different response to it and recall of it. That’s why, most of the time, no two articles about food are ever exactly the same.

That does not stop people from writing about food, and some of this writing has been awarded for its merit.

The Doreen Gamboa Fernandez (DGF) Food Writing Awards were named after esteemed teacher and writer Doreen Gamboa Fernandez, who expanded her reach beyond the classroom and did extensive research on Filipino culture and its expression through food, leaving behind a legacy of food writing respected today as institutions in themselves.

The contest, which selects a handful of excellent essays based on a common theme, have been awarded since 2002, the year of Ms. Fernadez’s death. This year, the theme was “Fowl,” and three winners were announced on May 9 in Pasig City. Elmer Nochesda won this year with an essay called “A Taxonmy Of Lutong Itik (cooked duck).” Christian Renz M. Torres bagged second place for “Curiosity Cured The Duck,” while “Feeling Nostalgic with Mama Pe’s Inubadang Manok Bisaya (Visayan chicken stew)” by J. Roy Paniza ranked third place.

The May 9 awards also served to launch the book Sangkap: Basic Philippine Ingredients, the second anthology from the DGF Awards, covering years 2013-2017. The book includes essays by winners from years past on the topics “Rice,” “Coconut,” “Herbs,” “Vinegar,” and “Bagoong (fermented fish paste),” with a few recipes and essays from other esteemed writers, giving a taste of the literary.

Michaela “Micky” Fenix, President of the Food Writers Association of the Philippines which compiled the winning entries of the book and now holds stewardship of the awards, says that she wasn’t that close to the late Ms. Fernandez. “I was just starting then,” she said when asked to recall her experiences with Ms. Fernandez. But she did learn a lot from her, saying, “You just have to read her, then you know.”

The awards then, are a way to protect the legacy of Ms. Fernandez, rooted in both creativity and discipline. Asked if there are any traits needed in a writer to be of Ms. Fernadez’s caliber, Ms. Fenix said, “Curiosity.”

“Curiosity is vital. You can’t simply know everything about everything. Especially with food. If you belong only to Manila, would you know about Ilonggo food?”

To give an award to in a field is to give it prestige and respect. In this case, food writing becomes almost as noble as the prospect of farming for food, or preparing it. “You have to talk to the cook, why they cook it that particular way… and then the ingredients that you use.

“Eating is just part of the experience. People think that if you can describe the taste, it’s enough. It’s not enough,” said Ms. Fenix.

Copies of Sangkap can be purchased directly from the Food Writers Association of the Philippines. Call Hannah at Studio 5 via 895-4040. The book costs P400. Delivery is free for addresses near or around Makati, but delivery charges apply to other locations. — Joseph L. Garcia

Lopez Holdings more than doubles Q1 earnings

LOPEZ Holdings Corp. reported a first-quarter net income of P2.291 billion, or more than double its profit attributable to equity holders of the parent firm a year ago of P1.104 billion, with its energy group contributing to its performance during the period.

In a disclosure to the stock exchange, it attributed the quarterly growth primarily to the better financial results of its energy business under associate First Philippine Holdings Corp. (FPH), lower foreign exchange losses, as well as the better earnings of ABS-CBN Corp.

The listed holding firm, which houses the Lopez family investments in major development sectors, reported an unaudited consolidated revenues of P32.77 billion, up 18.9% from P27.565 billion a year ago.

FPH recorded an 87% rise in net income attributable to equity holders of the parent while ABS-CBN posted a 120% rise in net income.

Foreign exchange losses on the FPH group’s consolidated foreign currency-denominated debt dropped to P5 million for the January to March period, from P881 million a year ago. ABS-CBN registered a 22% increase in advertising revenues.

Lopez Holdings owns 49% of FPH and has a 56% economic interest in ABS-CBN as of March 31, 2019.

FPH is the parent company of clean and renewable energy firm First Gen Corp., which in turn controls geothermal energy pioneer Energy Development Corp.

On Wednesday, shares in Lopez Holdings rose 0.23% to close at P4.34 each. — Victor V. Saulon

Craft brewing’s hot new style? Beer made with spicy chili pepper

WHILE craft beer heads might measure a brew in IBUs (International Bitterness Units, which are used to approximately quantify the hop bitterness of beer) what about a beer’s SHUs (Scoville Heat Units, a measurement of the heat of chili peppers)? Beers with heat are hot at the moment as craft brewers experiment with exciting new flavor combinations. Whether they’re made via the addition of hot pepper juice, oils, or whole peppers, ales and lagers brewed with chili peppers are common enough for “Chile Beer” to be a recognized style on BeerAdvocate.com. Ranging in heat on the palate from subtle to fiery, here are seven eclectic examples of Scoville-scoring, great brews.

BALLAST POINT’S HABANERO SCULPIN
San Diego’s Ballast Point is the 17th-largest brewery in the US, based on sales, and its flagship IPA Sculpin is an American craft staple. Named after the scorpion-like sculpin fish, the base beer packs a hop bite that’s no joke. Ballast Point spices up the standard IPA recipe with habaneros, which lends bright citrus notes to start and then a hot finish for which there’s only one remedy: another big gulp.

BARRELED SOULS’S TEOTIHUACAN
Barreled Souls out of Saco, Maine, is one of the country’s most adept brewing teams when it comes to unorthodox adjuncts. Teotihuacan is one of its best stout recipes, made with raw cocoa nibs and oven-roasted habaneros. It clocks in at 12.9% alcohol by volume (ABV). A version that’s aged for more than 11 months in a tequila barrel is particularly excellent, with big chocolate notes, roasty flavors in the periphery, and a finish that’s both floral and hot.

BOGEDAL’S NO. 600
Bogedal is one of the most uniquely rustic breweries in the world. Located on a bucolic Danish farm built circa 1849, the husband-and-wife team operates Scandinavia’s only all-gravity brewery. (Old-fashioned, hand-powered hoists and pulleys are used to transfer beer from vat to vessel, eschewing convenient modern electric pumps that have a tendency to break more delicate organic compounds.) Their No. 600 Anniversary Imperial Stout has it all: cocoa beans from wild trees, licorice, oat flakes, muscovado sugar, and chilis. Decadently chocolatey, it’s lightly bitter and comfortably spicy.

SANTE ADAIRIUS’S JOSE PIMIENTO
On the lighter side of the spectrum, California’s Sante Adairius Rustic Ales takes a stab at crafting spicy beer with its Jose Pimiento — a barrel-aged blonde ale with dried chilis. Pouring a shiny golden hue with a small white head, it offers aromas of lemon, pineapple, and cellar funk. The flavor showcases the chilis, synthesizing into a drink that’s both sour and spicy, with a dry finish.

UPRIGHT’S FATALI FOUR
Any barrel-aged beer from Portland, Oregon’s Upright is guaranteed to be an absolutely stellar drink. For Fatali Four, Upright takes its wheat saison, douses it with Brettanomyces yeast, and throws it into a combination of gin and wine casks. As if this weren’t enough, homegrown fatali chili peppers are added during the final weeks of aging. This results in a terrifically botanical gin bouquet — a dry and lightly acidic palate with an oily spice-forward finish.

VOODOO’S HOTTING UP
Now, this is a beer with some history. Pennsylvania’s Voodoo generally receives universal acclaim for its barrel-aged brews, but this particular offering was admittedly rather divisive — a love for hot sauce being a prerequisite for fandom. The barrels that housed it began life as simple containers for Heaven Hill bourbon. They then stored maple syrup, then Louisiana hot sauce, and finally Hotting Up, an 11.1% ABV imperial stout. After maturing for 18 months in these fourth-use oak barrels, the finished beer is wild: big spicy notes rounded with flavors of chocolate, maple, soy, and vinegar.

WESTBROOK’S MEXICAN CAKE
What began as a beer brewed to celebrate Westbrook of South Carolina’s first year as a brewery is now one of its fan-favorite annual releases. Dubbed Mexican Cake, it’s a big and chewy stout aged on cocoa nibs, vanilla beans, cinnamon sticks, and fresh habanero peppers. Earthy, peppery, pillowy, spicy, sweet: It’s pudding in a glass. For those willing to put in further effort, seek out the barrel-aged variants, which amp up the flavors. — Spike Carter, Bloomberg

foodpanda targeting further expansion in the Philippines

FOOD DELIVERY company Foodpanda Group (stylized as foodpanda) is gearing up for expansion in the Philippines as it celebrates its fifth anniversary in the country.

“We grew drastically over the last five years. It’s primarily, also accounted to how we played around our service, the price points… Over the years, we’ve grown from just a few restaurants, now we have over 2,500 brands on board, reaching multiple cities the biggest is Metro Manila, and we’re growing rapidly in Davao, Cebu, and we’ve expanded to a couple of cities in North and South Luzon, Angeles, Pampanga; Bacoor, Cavite; and San Pedro, Laguna,” Cheena M. Abellon, head of marketing of foodpanda Philippines, told BusinessWorld in an interview.

Launched in the Philippines in 2014, foodpanda is owned by Berlin-based company Delivery Hero SE and is operating in about 50 countries.

Ms. Abellon noted that in the following months, the company will further widen its reach, and is targeting to be in 19 cities in Luzon, the Visayas, and Mindanao — especially in emerging cities — by the end of the year.

The company is already serving Manila, Makati, Taguig, Pasig, Mandaluyong, Quezon City, Marikina, Muntinlupa, San Juan, Pasay, as well as emerging areas such as Cebu City, Lapu-Lapu City, and Davao City.

“The convenience that we offer is something applicable for business districts. I would say majority talaga of everything is coming from Metro Manila, but we cannot disregard the fact na (that) Cebu and Davao are rapidly growing, and with our expansion, we saw a significant growth and the significant potentials in the new cities where we are launching,” she noted.

She added that the company will also be maintaining its purpose of delivering food to people by further improving the features in the platform. From being just a simple food delivery platform, it now has various features that can cater to all kinds of customers.

“We put ourselves at a competitive standpoint wherein kami pa rin ‘yung (we are still the) industry leaders, and with that kind of price point, we’ve managed to acquire new customers, reach out to more people because it became more affordable and not kind of like an elite application,” she said.

During its early days in the country, foodpanda implemented a minimum order value and imposed 10% for delivery fee plus service fees. This were later on replaced by a fixed amount of P59 for delivery in 2016, which is now at P35.

Moreover, in 2018, the company launched its pre-order feature. Early this year, it introduced a pick-up feature for customers who want to skip long lines and just pick up their orders when they pass by restaurants.

“We offer the same solution, but differentiating it is primarily focused on one vertical. I think that is one of our key strengths and leverage against competitors kasi (because) we’re not dividing our attention… We’re focused on getting food to someone,” Ms. Abellon said.

BOOSTING BUSINESSES’ GROWTH
Ms. Abellon said the platform may also serve as an advertising venue for some restaurants, as it introduces them to more potential customers.

“It’s an enabling factor din for restaurants, so on their perspective, on the business level perspective, we are an opportunity for them…like an advertising arm for them in order to tap markets that they cannot reach by being just their branch,” Ms. Abellon said.

In addition to this, restaurants are also able to skip costs for food delivery, like buying motorcycles and salary and benefits for delivery crew.

“They are able to add sales on a branch level through the delivery service that we are doing without having to do an expansion in order to accommodate more seats, and they didn’t have to spend on operational costs buying a bike or paying a rider. They get to skip that part,” the official said. — Vincent Mariel P. Galang

Political ads boost ABS-CBN Q1 bottom line

EARNINGS of ABS-CBN Corp. soared 89% in the first quarter, as revenues got a boost from political ad placements.

The Lopez-led firm posted an attributable net income of P856.35 million in the three-month period ending March, versus P452.54 million in the same period last year.

Consolidated revenues grew 15% to P10.4 billion. Advertising revenues contributing 52% of the total at P5.4 billion, which was 24.4% higher from the same period last year.

In a regulatory filing, ABS-CBN said the growth is brought by both election-related advertisements and regular advertising. “Excluding political placements, regular advertising increased by P633 million or 14.6% higher year-on-year,” it said.

Making up 48% of the company’s total revenues are consumer sales, which grew 6.2% to P4.95 billion, mostly from box-office sales and ABS-CBN TVPlus sales.

The company’s total costs and expenses also went up by 7.6% to P9.44 billion. General and administrative expenses grew by 12.6% to P2.84 billion, which went to content building, information security measures and digital initiatives.

Production costs also expanded 5.7% to P3.26 billion, which was spent on facilities-related expenses and employee-related costs.

The cost of sales and services rose 5.3% to P3.33 billion, due to “the growth of SkyCable’s broadband business which drove bandwidth costs up by P34 million or 2% higher year-on-year.”

ABS-CBN said its capital expenditures and program rights acquisitions totaled P811 million by end-March. — Denise A. Valdez

Writing about wine: Personal yet universal

WHEN one writes about wine, one has to be very careful. Words from one’s pen will come to represent a bottle that took years of work, decades of legacy, and the earth’s own providence to produce. With these factors in place, each wine: from grands-crus from Bordeaux to wine that isn’t exactly up to par from who-knows-where, deserves more than a modicum of respect.

That’s why early this month, The Write Mind, a writing workshop series by hospitality consultancy Courage Asia, organized a wine-tasting-cum-writing workshop at Discovery Primea’s Flame. Guests at the workshop consisted mostly of professionals from related fields in writing, but more interestingly, included wine enthusiasts and wine distributors who wanted to improve their writing skills, and perhaps allow them to reach a new level of intimacy with their product.

The talks were headed by writers CJ Juntereal and Marilen Fontanilla. Ms. Juntereal has a weekly column in the Manila Bulletin called “Eat Girl” and is the current president of the International Wine & Food Society Manila Ladies Branch. Ms. Fontanilla, meanwhile, was the former editor-in-chief of F&B World, and continues to write for various platforms.

The pair guided the group through the basics of wine tasting, teaching guests how to identify by sight, smell, and taste. Ms. Juntereal, who was raised in an environment that praised wine, led guests through basic wine vocabulary, like knowing the difference between tannic and dry: a taste influenced by tannins might literally leave the mouth dry, but a wine described as dry doesn’t concern itself with the tannic content, but with its acidity. Got it?

While the pair talked about identifying notes based on color, taste, and scent, they were quick to point out that tasting wine is a personal business, and a more effective way of putting words to paper is to go into your own bank of memories and place the sensorial cues with references to things that are familiar to you. It’s still a balance, however: Ms. Juntereal advises refining your palate and training your tongue through constant tasting of food and wine, while enriching your mind with reading and writing.

“You need wine knowledge if you want to be a wine writer. You don’t have to be an expert. But take a few classes.”

Ana Marie “Alu” Aran, meanwhile, Director at Courage Asia and one of the brains behind The Write Mind, said that the workshops began as a response to demands from editors. “They keep getting the same people, so they wanted to have new writers to give fresh [takes] on what they have.”

She said, “We wanted to make sure that we develop a writing community. Our vision is to launch writers in their fields of interest.” — JLG

Apple rolls out revamped television app ahead of streaming service launch

APPLE INC. on Monday rolled out a new television-watching app for its devices and some Internet-connected TVs, an effort to gain more revenue from reselling other companies’ programming and, later this year, its own original shows.

The redesigned Apple TV app aims to solve some of the headaches that have emerged in the streaming media era. A show’s past seasons, for example, might be available on Hulu, Netflix Inc. or iTunes, while current episodes require cable or purchase, leaving customers juggling multiple remotes.

Available in more than 100 markets, Apple’s new app pulls many of those services together to show viewers where they can watch live or on-demand movies, TV shows, news and sports via a single search, or through personalized recommendations.

Apple is following cable provider Comcast Corp. and others that have taken steps to simplify modern TV watching.

More important to Apple’s bottom line, the app also will allow users to sign up and pay for channels they do not already subscribe to without creating new passwords or downloading additional apps. Early partner channels include HBO, Starz, Showtime and Tastemade, with more expected to join in the future, Apple said.

Apple officials would not comment on the economics of the channels, but people familiar with the matter said Apple will take a cut of the subscription fees when customers use the Apple TV app to sign up for a channel.

Apple’s sales from its services business, which also includes sales from iCloud, the App Store and other businesses, reached $11.45 billion in its most recent fiscal quarter, compared with analyst estimates of $11.32 billion, according to FactSet data.

Initially, the app will be available on Apple devices plus 2019 Samsung Electronics Co. Ltd. smart TVs and some 2018 models. Later this year, customers with certain Vizio, LG and Sony TVs will be able to use the TV app using AirPlay 2.

Apple’s television app will also aim to let users search for a show across multiple services in one shot, including by using Siri, the company’s voice assistant. The app will make recommendations based on a mix of curation by human editors and a viewer’s watching habits.

There will be some limitations, however. Netflix has said it will not be included in Apple’s channels, which means programming on Netflix will appear in search results but viewers will need to exit the Apple TV app. And so far only three pay TV providers are supported in the Apple TV app — Charter Communications Inc.’s Spectrum, AT&T Inc’s DirecTV Now and Sony’s Playstation Vue.

The app also will serve as the home this fall for the Apple TV+ subscription service, which will include original shows from Steven Spielberg, Oprah Winfrey and others. — Reuters

Seven-year bonds fully awarded on strong demand after rate cut

THE GOVERNMENT fully awarded the reissued seven-year Treasury bonds (T-bond) it offered yesterday amid overwhelming demand as the market continued to react to the rate cut implemented by the central bank last week.

The Bureau of the Treasury (BTr) raised P20 billion as planned from its T-bond offer yesterday after receiving bids totalling P51.278 billion, more than twice the amount the government wanted to borrow.

The seven-year papers, which carry a coupon rate of 6.25%, fetched an average rate of 5.743%, 19.1 basis points (bp) lower than the 5.934% fetched when the debt papers were last offered on March 26. The bonds have a remaining life of six years and nine months.

Market players asked for returns ranging from 5.724% to 5.75% yesterday.

At the secondary market, the seven-year papers were quoted at 5.742% yesterday, based on the PHP Bloomberg Valuation Service Reference Rates.

Deputy Treasurer Erwin D. Sta. Ana said the government saw a “good turnout” at yesterday’s auction as it saw huge demand from investors, prompting them to price the reissued bonds lower than the rate quoted the previous offer.

“Obviously, this is still an offshoot of the rate cut last week and…the easing inflation picture as projected by the central bank. We are still riding on that data point,” Mr. Sta. Ana told reporters on Wednesday.

The Bangko Sentral ng Pilipinas (BSP) last week trimmed benchmark interest rates by 25 bps to a 4-5% range, citing a “manageable” inflation outlook on the back of a decline in food prices amid improved supply conditions.

Headline inflation continued to ease for the sixth straight month in April to 3%, slower than the 3.3% recorded in March and beating market consensus.

At its last week’s policy review, the BSP also adjusted its inflation forecast to 2.9% this year and 3.1% in 2020 from the previous 3% for both years.

Kevin S. Palma, Robinsons Bank Corp. trader, said the results were within market expectations and just in line with secondary market rates prior to the auction.

“Lower average rate versus its last seven-year auction reflects recent bond-friendly developments such as easing inflation, the credit (rating) upgrade and BSP’s policy rate cut,” Mr. Palma said in a phone message.

He added that the “stellar” turnout was boosted by continued anticipation of a cut in big banks’ reserve requirement ratio (RRR) as soon as the Monetary Board’s (MB) May 16 meeting.

The central bank made no reduction in banks’ reserve ratio during its policy meeting last week, although the BSP Governor Benjamin E. Diokno said it will be “on the agenda” of the MB’s meeting this week.

Currently, universal and commercial banks are required to keep at least 18% of their total deposits with the BSP. Trimming the RRR is expected to unleash about P90 billion into the financial system, which can used for loans or investments.

Mr. Diokno previously described big banks’ RRR, which was already reduced by a total of two percentage points last year, as “really high.” He also cited “room for…one percentage point (cut) every quarter for the next four quarters.”

The government plans to borrow P315 billion from the domestic market this quarter, broken down into P195 billion in Treasury bills and P120 billion through T-bonds. — Karl Angelo N. Vidal

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