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BDO to issue P5 billion in LTNCDs

BDO UNIBANK, Inc. is set to issue P5 billion worth of long-term negotiable certificates of deposit (LTNCD) to diversify its funding sources and fund its expansion plans.

In a statement released on Tuesday, the Sy-led bank said the notes have a term of five-and-a-half years and will be sold for a minimum investment of P100,000 with increments of P50,000 thereafter.

The LTNCDs have an indicative rate of 3.75%. The lender said it will set the final coupon rate at the end of the offer period which runs from Sept. 10 to Sept. 20. The interest will be paid quarterly.

The debt papers are set to be issued on Sept. 27.

The bank said it can change the offer period or increase the issue size based on market demand.

BDO’s latest offer of LTNCDs is “part of the bank’s efforts to diversify the maturity profile of its funding sources and support business expansion plans,” the lender said in the statement.

The transaction’s sole arranger will be ING Bank N.V.’s Manila branch, which will also act as a selling agent along with BDO and BDO Private Bank.

Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”

In April, the Sy-led lender also issued 5.5-year LTNCDs worth P7.32 billion with an interest rate of 5.375%. Strong demand from investors allowed the bank to expand the issue volume from the original P5 billion.

In the same month last year, the bank also raised P8.2 billion via 5.5-year LTNCDs with a rate of 4.375% per annum.

BDO’s net income in second quarter jumped by 43.4% P10.393 billion, bringing its first semester bottom line to P20.140 billion, an 53.6% increase year on year.

It was the largest bank in the country in terms of total assets, deposits and trust funds as of June 30.

Shares in BDO went up 50 centavos or 0.35% to close at P143 apiece on Tuesday. — B.M. Laforga

Arts & Culture (09/11/19)

Mo_Space


BLESS US ANYWAY, an exhibit of works by Geraldine Javier, opens on Sept. 14 at the Mo_Space Gallery, alongside Rocelie V. Delfin’s Isla. Delfin’s exhibit features nostalgic drawings of unnamed islands seen from the distance. Both exhibits run until Oct. 13. The gallery is at the 3rd level of MOs Design, B2 Bonifacio High Street, BGC, Taguig.

PPO opening concert

PIANIST Noriko Ogawa

THE Philippine Philharmonic Orchestra’s 37th Concert Season at Cultural Center of the Philippines’ Main Theater will open on Sept. 13, 8 p.m., with guest soloist Japanese pianist Noriko Ogawa under the baton of Yoshikazu Fukumura. The program for the concert includes Mozart’s Don Giovanni Overture, Prokofiev’s Piano Concerto No. 3, and Antonin Dvorak’s Symphony No. 7. Ticket prices range from P400 to P1,500, with discounts available to students, senior citizens and groups. For inquiries, call the CCP Box Office at 832-3704.

Kulay Diwa

A NUMBER of exhibits are ongoing at the Kulay Diwa Gallery of Philippine Contemporary Art. These include Step-in, a group show featuring the works of Azriel Domingo, Deano Ocampo, Eugene Dominguez, Jerline Sunga, John Lloyd Benz De Leon, and Jonas Miguel Arlegui; and JR Ledesma’s Hidden Grief. There are also two online exhibits ongoing at the Online Viewing Room (www.kulay-diwa.com): The Art of Chris Boyd by Chris Boyd, and The Hermit’s Way of Looking at Life II by Michael Vincent Manalo. All the exhibits are on view until Oct. 7. The gallery is at 25 Lopez Ave., Lopez Village, Sucat, Parañaque City.

Robinsons Galleria

THE BLIND ELEPHANT and the 7 Children by Sheena Ira Tan

ONGOING UNTIL Sept. 15 at the Level 3 Veranda of Robinsons Galleria is Sheena Ira Tan’s one-woman called Pisara featuring her chalkboard art. Her pieces tell of fairy tales, myths, legends, and stories that carry universal archetypes that cut across all cultures. As part of the exhibit, there will be Storytelling Time with the artist and Sisidlan Institute teachers on Sept. 14, 2 p.m. The artworks are up for sale with part of the proceeds to be donated to Sisidlan Institute Inc., a Waldorf community where the artist teaches. Pisara will run until Sept. 15. Meanwhile, works by artist Marco Polo “MarPolo” Cabrera will be on view at the same venue from Oct. 1-15 in the exhibit Taking Chances which will show his acrylic and mixed media works.

ISOC, Malaysia’s edotco form JV to build cell towers

THE tandem of Malaysia-based edotco Group Sdn Bhd and Filipino firm ISOC Infrastructure, Inc. has formed a joint venture (JV) to solidify its partnership as a telecommunications tower provider in the Philippines.

The two companies announced yesterday the incorporation of ISOC edotco Towers, Inc., a 50-50 joint venture with an initial investment of $10 million.

“It’s an equal partnership between ISOC and edotco. The initial equity we’re putting in is $10 million combined,” ISOC Chairman Michael C. Cosiquien said at a briefing in Makati City.

“The plan is…to invest up to $100 million over the next few years. So roughly that should be the first 1,000 or so towers. That’s the first phase,” edotco Chief Executive Officer Suresh Sidhu added.

The joint venture aims to put up 400 to 500 shareable towers within its first year of operations. So far, it has been tapped by both Globe Telecom, Inc. and Smart Communications, Inc. to build common towers in pre-determined locations.

Mr. Cosiquien said the company is also talking to new major telco player Dito Telecommunity Corp. for requests to build out towers.

ISOC edotco Towers is gunning to become a key player in the Philippines’ emerging telco tower industry. Department of Information and Communications Technology (DICT) Undersecretary Eliseo M. Rio, Jr. noted this is the first time common towers are being done in the Philippines.

“For us, this is a memorable event, and we encourage it,” he said.

The DICT has been pushing for telcos to share infrastructure since 2017, saying every tower in the country serves more than 7,000 subscribers, as opposed to the ideal of having 1,000 subscribers per tower, and the usual 2,000 subscribers per tower in countries with faster internet.

“With this collaboration, we are confident that we will be able to play a part in transforming the Philippines’ telecoms sector, and help lay the right foundation for the country’s digital rebirth,” Mr. Sidhu said.

Aside from the two companies, 21 other tower providers are seeking to enter the country. The government is hoping 50,000 shareable towers will be built within the next seven to 10 years to keep up with the tower density in neighboring countries. A common tower policy is also in the works to guide new players. — Denise A. Valdez

How PSEi member stocks performed — September 10, 2019

Here’s a quick glance at how PSEi stocks fared on Tuesday, September 10, 2019.

 

Speaker backs more funding for rice procurement

SPEAKER Alan Peter S. Cayetano said he will support at least P9 billion in additional funding for the procurement of palay, or unmilled rice, to support the market and prop up farmer incomes, as plenary discussion of the 2020 budget got underway in the House.

He also backed additional allocations for upgradng military and police camps.

In a chance interview with reporters before the plenary, Mr. Cayetano said that he can “almost guarantee” these two budget augmentations.

Mr. Cayetano said that during a caucus, legislators said they are considering palay procurement funds of at least P9 billion, up from P7 billion previously.

“Definitely not lower than P9 billion. But we are looking for much more,” he said. “Yung initial dito sa hearing, kulang na kulang yung P7 billion (During the initial discussions at the hearing we found that P7 is inadequate). Plus, I think the Department of Finance already collected more than P9 billion (in rice import tariffs). So lahat ng nakolekta sa tariffication, dapat naman sa farmers talaga mapupunta. Ayun yung intention. (All the collections generated by tariffication need to go to the farmers — that is the inention).“

In the 2020 National Expenditure Program of P4.1 trillion, the Department of Agriculture (DA) received a budget of P56.8 billion.

The DA is pressing for more palay procurement by government entities, including local governments, to support the collapsing market for palay, the form in which farmers sell rice to traders. The market for palay softened because of competition from greater quantities of imported rice brought in under the Rice Tariffication Law.

The law, enacted as a response to the inflation crisis of 2018, also created the Rice Competitiveness Enhancement Fund (RCEF), which is financed by tariffs collected on imports. RCEF is intended to upgrade rice farmers’ access to seed, inputs, credit, machinery, and rice-planting know-how.

Mr. Cayetano added that P500 million each might be given to the Philippine National Police and the Armed Forces of the Philippines to upgrade their camps.

“Another, yung focus ng ating pangulo is on security and makikita niyo na lagi naghahagilap ng pondo yung PNP at AFP (the President’s focus us on security and the PNP and AFP are always seeking extra funding). Paano ayusin yung mga kampo… (how will they upgrade their bases)… We want to have a camp development program,” Mr. Cayetano said.

He added, “So of course, AFP and PNP needs much more than that, from building (walls), CCTV, and barracks… I think it’s about time to have a five or ten year program na maayos yung mga (to upgrade) military and police camps all over the country.”

According to the 2020 NEP, the Philippine National Police has a P184.9-billion budget, and the Department of National Defense P189 billion. — Vince Angelo C. Ferreras

Rice inventory up over 40% year-on-year ahead of harvest

THE national rice inventory was estimated at 2.133 million metric tons (MMT) as of Aug. 1, up 40.3% from a year earlier, but down 18.7% month-on-month, the Philippine Statistics Authority (PSA) said.

The estimate was contained in the PSA’s Rice and Corn Stocks Inventory report. The rice inventory is considered sufficient for about 67 days’ consumption based on an average daily rate of 32,000 MT.

Some 37.1% of the rice inventory was held by households, 41.2% by commercial warehouses, and 21.6% by the National Food Authority (NFA). The PSA gave no breakdown of domestically grown against imported rice.

Holdings of all categories increased compared to a year earlier. Household inventory increased 6.2%, rice held by commercial warehouses was up 30.7% year-on-year, and NFA stocks rose 355.8% from a year earlier.

On a month-on-month basis, stocks held by the three sectors fell. Household inventory declined 21.4%, rice held in commercial warehouses fell 20%, and NFA inventory was down 10.8%.

This month’s rice harvest runs until October, though unsold inventory bought at high prices has been lingering in traders’ warehouses, limiting their ability to purchase from domestic farmers and softening the market for palay, or unmilled rice, the form in which farmers sell their crop.

The Department of Agriculture (DA) is pushing local government units to embark on rice purchasing at “fair” prices. It is also encouraging them to mill and store rice, for later sale to other local governments. The measures are intended to support palay prices, which have dropped to as low as P7 in some areas, according to reports.

The inventory of corn, a key animal feed, was 724,080 MT, down 40.7% year-on-year and down 12% from a month earlier.

Corn held in commercial warehouses accounted for 87.1% of the total, while households held 12.9% and the NFA zero.

Year-on-year, households raised their holdings 32.9%, while commercial warehouse inventory fell 45.2%.

Month-on-month, household inventory rose 52.5%, while holdings of commercial warehouses fell 17.2%. — Vincent Mariel P. Galang

Duterte signs law expanding Bataan freeport territory

PRESIDENT Rodrigo R. Duterte has signed a measure expanding the territory of the Freeport Area of Bataan (FAB) to create more investment opportunities for the province.

Mr. Duterte signed the bill that became Republic Act (RA) No. 11453 on Aug. 30. It amends RA 9728 or the Freeport of Bataan Act of 2009 to clarify and expand the freeport’s territory.

The new law extends the Bataan freeport’s territory to include the rest of Mariveles outside the former Bataan Economic Zone and its municipal waters, as well as the alienable and disposable public lands and municipal waters of the expansion areas.

In his statement in May, Senator Sherwin T. Gatchalian, author of Senate Bill No. 2133, noted that FAB is “spread over an area of 1,600 hectares, although much of this is not ripe for development due to its mountainous nature.”

“Of the 456 hectares that are considered developed, 355 are occupied, leaving only 101 hectares for further development,” he added.

With the inclusion of the rest of Mariveles in the FAB territory, more opportunities for investment will be created, the Senator said.

The law also raised the capital stock contributed by the government to the AFAB to P2.5 billion, from the present P2 billion, with an option to increase capitalization upon the discretion of the AFAB.

Mr. Gatchalian noted the Bataan freeport may be a potential investment destination that will help improve the poverty rate in the area. He said the freeport has created 39,226 jobs as of December 2018.

The second quarter saw AFAB accounting for P15.1 million (0.03%) in foreign direct investment (FDI) commitments, according to preliminary data from the Philippine Statistics Authority (PSA). Data from AFAB were not available for the year-earlier period.

The second-quarter pledges brought foreign commitments in the first half to P95.56 billion, up 111.6% from a year earlier.

Combined investment pledges by Filipino and foreign nationals totaled P107 billion in the second quarter, down 6.7% from a year earlier.

Domestic investors accounted for 53.7% of the total investment pledges during the quarter.

Should they materialize, foreign and local investments pledged in the second quarter are expected to generate 30,135 jobs across industries. — Arjay L. Balinbin

Malaysia, Singapore studying ‘success’ of PHL sugar tax on beverages — Finance dep’t

MALAYSIA and Singapore consider the Philippine excise tax on sugar-sweetened beverages (SSBs) a “successful fiscal policy intervention,” the Department of Finance (DoF) said.

In a statement Tuesday, Finance Undersecretary Gil S. Beltran said officials from Malaysia and Singapore have shown interest in studying how the country implemented the excise tax on SSBs under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

“During the meeting, the ASEAN Member-States recognized the passage of sweetened beverage tax as a successful fiscal policy intervention to achieve a healthier society in the ASEAN region,” Mr. Beltran was quoted as saying in the statement.

Based on 2018 sales data from Euromonitor, Mr. Beltran said imposing the excise tax has lowered the consumption of sweetened beverages by an average of 6.5%, while that of powdered concentrates declined 25%.

Implemented in January last year, the law imposed an excise tax of P6 per liter on drinks with caloric or non-caloric sweeteners and P12 per liter for those containing high-fructose corn syrup.

The ASEAN Interpillar Consultation Meeting for the Reformulation and Production of Healthy Food and Beverages was held in Indonesia in July, with delegates discussing the health challenges faced by ASEAN countries.

“In addressing this, the ASEAN Member-States have prioritized the reformulation and production of healthier food and beverage options as one of the key strategies to be implemented,” Mr. Beltran said. — Beatrice M. Laforga

Philippines, Singapore, sign data agreement

THE PHILIPPINES and Singapore have agreed to share best practices in data protection and to combine efforts in data protection and cross-border data flow.

In a statement yesterday, the National Privacy Commission (NPC) said the privacy agencies of the two countries signed a memorandum of understanding (MoU) Monday.

“With the signing of the (MoU), the Philippines and Singapore envision exchanges of information and best practices to foster innovation,” Privacy Commissioner Raymund E. Liboro said in the statement.

“We will also work on mutual assistance in data privacy enforcement. This is a reaffirmation of both the Philippines’ and Singapore’s recognition of the importance of data governance and cross-border data flows to global trade in a digital economy,” he added.

The signing of the MoU took place during the state visit of Singapore President Halimah Yacob during her call at Malacañang Palace.

The NPC noted the MoU is the first between two ASEAN member states involving data protection.

“Singapore is pleased to continue fostering closer collaboration with partners such as the Philippines to drive a robust data protection regime…,” Commissioner Tan Kiat How of Singapore’s Personal Data Protection Commission was quoted in the statement as saying.

He noted ensuring data protection is crucial in facilitating a digital economy as it will ensure data protection in cross-border transactions.

“Our work will include developing mechanisms to facilitate cross-border data flow, such as the APEC Cross-Border Privacy Rules and ASEAN Cross-Border Data Flows Mechanism, and best practices to enable data innovation, through the use of data sharing sandboxes,” Mr. Tan added. — Denise A. Valdez

Law creating Davao airport authority signed

PRESIDENT Rodrigo R. Duterte signed into law a measure creating the Davao International Airport Authority (DIAA) that will manage airports in the Davao Region, including the city’s Francisco Bangoy International Airport.

Mr. Duterte signed the bill that became Republic Act No. 11457 on Aug. 30. It is known as “An act creating the Davao International Airport Authority, transferring existing assets of Francisco Bangoy International Airport to the Authority, vesting the Authority with power to administer and operate the Francisco Bangoy International Airport and appropriating funds therefor.”

The new airport authority will manage Davao City’s airport and other airports to be established in Davao del Sur, Davao del Norte, Davao Oriental, Davao Occidental and Compostela Valley.

The DIAA’s mandate is to promote and develop air traffic in the Davao Region “as a means of making the region a center of international trade and tourism.”

The DIAA is controlled by the Department of Transportation (DoTr).

The law exempts the DIAA from realty taxes. It has the authority to raise funds, either from domestic or international sources, by way of loans, credit or securities and other financing instruments, subject to the prior approval of the President.

The law consolidates Senate Bill No. 2168 and House Bill No. 8691. It was passed by the Senate and House of Representatives on June 4 this year. — Arjay L. Balinbin

PHL cited as gender-equality leader in government hiring — ADB, OECD

THE Philippines is a regional leader in terms of gender equality in job hiring, specifically in the public sector, the Asian Development Bank (ADB) and the Organization for Economic Co-operation and Development (OECD).

Speaking to reporters at the launch of the Government at a Glance Southeast Asia 2019 report issued by the ADB and OECD, Chiara Bronchi, an ADB Chief Thematic Officer from the bank’s Thematic Advisory Service Cluster, said the study found that 53.7% of public sector jobs in the Philippines were occupied by women in 2016, up from 50.7% in 2009.

The Philippines outperformed the the Southeast Asian average of 47% in 2016, while also employing larger proportions of women than Japan or South Korea, where less than 50% of public sector employees were women,

“That makes actually Philippines a leader… in terms of hiring [with] a gender balance if you are in the public sector,” Ms. Bronchi said.

Edwin Lau, Head of the Reform of the Public Sector division at the OECD’s, Public Governance Directorate, said the findings reflect “meritocratic” hiring in government service.

“You also see that the types of recruitment systems that are used are very meritocratic, so they’re really built to ensure top-quality people are rising in the public service,” Mr. Lau said.

He said the Philippines is “far above” the Southeast Asian average in terms of performance management systems.

“It’s [Philippines] even using more performance management systems than OECD countries… (In) public employment… the systems are fairly well developed,” he added.

The study also found that women are underrepresented in parliamentary bodies, with only 20% of these seats across the region held by women in 2018, just 1.7 percentage point higher from a decade earlier.

The report is the first of its kind that looked into the latest available data on public administration in Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam. — Luz Wendy T. Noble

Peso weakens on US data bets

THE PESO declined on Tuesday on bets of positive US data and following a weak local trade report. — BW FILE PHOTO

THE PESO closed on a weaker note on Tuesday on the back of expectations of upbeat US producer inflation data.

The local unit depreciated to P51.98 against the greenback on Tuesday, shedding 11 centavos from its P51.865-per-dollar close on Monday.

The peso opened at P51.90 versus the dollar. Its weakest point was logged at P52.04, while its intraday best was at P51.84 against the greenback.

Dollars traded climbed to $1.495 billion on Tuesday against the $1.073 billion recorded on Monday.

“The peso weakened on market positioning ahead of likely upbeat US producer inflation reports [on Wednesday],” one trader said.

Meanwhile, Rizal Commercial Banking Corp. economist Michael L. Ricafort attributed the local currency’s decline to the wider Philippine trade deficit data in July.

“US dollar is also higher versus major global/Asian currencies after US Treasury bond yields went up recently to new two-week highs, thereby increasing US interest rate returns that increase the attractiveness/allure of the US currency,” Mr. Asuncion added.

US Treasury yields rose to three-week highs on Monday, in line with gains in the European bond market, as risk appetite improved amid easing US-China trade tensions and expectations of less-aggressive action from the European Central Bank (ECB) this week.

Yields on US debt, from two-year notes to 30-year bonds, all hit peaks after rising in two of the last three sessions, as investors grew less nervous about the US-China trade war.

Washington and Beijing have agreed to go back to the negotiating table.

Meanwhile, merchandise exports climbed 3.5% to $6.174 billion in July, faster than the 3.3% expansion in June and 2.3% growth in July 2018, preliminary data from the Philippine Statistics Authority showed.

On the other hand, the merchandise import bill declined by 4.2% to $9.567 billion in July from $9.983 billion in the same month in 2018.

These results brought the country’s trade deficit to $3.393 billion in July, which is 15.5% less than the $4.016 billion shortfall in July 2018.

For today, the trader said the peso may continue to depreciate.

“The local currency might continue to weaken further amid expectations of similar upbeat US consumer inflation report later this week. Exchange rates might move within the P51.90 and P52.10 range,” the trader said.

The trader expects the peso to move within P51.90-P52.10 against the dollar, while Mr. Ricafort said the local unit could trade at around P51.80-52.10.

Most other emerging Asian currencies held tight ranges ahead of the European Central Bank meeting later this week.

A sharp decline in Chinese factory gate prices also subdued appetite for riskier assets as investors remained nervous about the prospects of a global economic slowdown.

Factory-gate prices shrank at the sharpest pace in three years in August, data showed on Tuesday, falling deeper into deflationary territory and reinforcing the urgency for Beijing to step up economic stimulus as the trade war with the United States intensifies.

Currency market focus now turns to the ECB meeting, which is widely expected to introduce a package of stimulus measures and monetary easing on Thursday to boost an ailing regional economy.

The US Federal Reserve is also expected to cut interest rates next week.

Among regional currencies, the Malaysian ringgit, which resumed trading after a holiday, advanced 0.2% against the greenback and was the top gainer in the region.

The South Korean won erased earlier gains to trade 0.1% higher, while China’s yuan was marginally higher.

The Taiwan dollar edged higher, after data on Monday showed the trade-reliant economy’s exports rose unexpectedly in August on strong demand for smartphones. — L.W.T. Noble with Reuters

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