How PSEi member stocks performed — May 14, 2019
Here’s a quick glance at how PSEi stocks fared on Tuesday, May 14, 2019.
Duterte to visit Japan in late May
PRESIDENT Rodrigo R. Duterte is set to visit Japan from May 29 to 31 on a Prime Minister Shinzo Abe’s invitation, Cabinet officials said Tuesday.
In a briefing at the Palace, the President’s Spokesman Salvador S. Panelo confirmed that Mr. Duterte is set to visit Japan this month. “Sure na pupunta siya roon (the trip is confirmed),” he said.
Asked for more details after the briefing, Mr. Panelo told reporters: “What I know is that the invitation was personally carried here by the representatives of the Prime Minister. According to what I heard also is that when the President accepted that, the representatives of the Prime Minister came here to thank [Mr. Duterte].”
He also said the Palace is “hoping” to sign some deals with the Japanese government.
“I think May 29-31,” Trade Secretary Ramon M. Lopez said in a phone message to BusinessWorld when asked about the exact dates of the President’s visit.
He said there will be a “bilateral” meeting, and “meetings with Japanese corporations to relay their expansion plans.”
Mr. Lopez added that the “business to business (B2B) proposals” are “still being discussed.”
Mr. Panelo said the President’s visit to Tokyo, which will be his third since 2016, is expected to “improve” the trade relationship between the two countries.
According to DTI data, two-way trade volume between the Philippines and Japan was $20.02 billion in 2018, with exports at $9.47 billion and imports at $10.5 billion.
The DTI also noted that last year, Japan was the Philippines’ “second major trading partner (out of 221), third export market (out of 211), and third import supplier (out of 198).”
Mr. Duterte is also scheduled to deliver a keynote speech on May 31 at the 25th International Conference on the Future of Asia in Tokyo organized by the newspaper and media group Nikkei, Inc., according to the Nikkei website.
Nikkei said the Future of Asia is an “international gathering where political, economic and academic leaders from the Asia-Pacific region offer their opinions frankly and freely on regional issues and the role of Asia in the world.”
“Held by Nikkei every year since 1995, it is considered one of the most important global conferences in Asia,” the organizer also said. — Arjay L. Balinbin
NEDA sees rice tariffs exceeding P10 billion quota for RCEF
THE NATIONAL Economic and Development Authority (NEDA) said it is expecting more than the authorized P10 billion total to be collected from rice import tariffs under the Rice Tariffication Law, with the excess to be used to help farmers diversify into other crops.
In a mobile message, NEDA Undersecretary Rosemarie G. Edillon said NEDA is still in the process of finalizing its estimates of total revenue from rice tariffication this year.
The Rice Tariffication Law cam into force on March 5. Its provisions include the allotment of P10 billion for the Rice Competitiveness Enhancement Fund (RCEF) which will be used to assist farmers in the form of mechanization, credit, education and seed.
“We are still finalizing our estimates. But we do expect it to be higher than P10 billion. The law stipulates that the excess of P10 billion will go back to assist farmers diversifying into other crops,” Ms. Edillon said.
“Assistance for diversification is not in the RCEF. Funds for this will come from the excess revenue,” Ms. Edillon added.
Ms. Edillon declined to give initial estimates of revenue from tariffs.
The Department of Agriculture (DA) has been advanced P5 billion from the re-enacted 2018 Budget pending the generation of revenue for the RCEF proper, NEDA Assistant Secretary Mercedita A. Sombilla has said.
Another P5 billion will be given to DA in the third quarter to complete the P10 billion RCEF for the year, according to Ms. Sombilla.
“Mayroon nang napaunang P5 billion (The first P5 billion has been released). About P1 billion out of that has to be given to the farmers. DA is now trying to allocate some parts of it to the various agencies who are supposed to receive the RCEF,” Ms. Sombilla said in a briefing late last month.
“Kinakausap na namin ang DA (We’ve spoken to the DA). As much as possible, (it needs to) find measures to allocate some money to PhilMech, PhilRice, and to the training institutes which should be receiving money from RCEF,” according to Ms. Sombilla, referring to the various agencies in charge of farm mechanization and rice research. — Reicelene Joy N. Ignacio
Palay output falls 4.6% in Q1 to 4.69 million MT
PRODUCTION of palay, or unmilled rice, fell 4.6% year-on-year in the first three months of 2019 to 4.69 million metric tons, the Philippine Statistics Authority (PSA) said.
According to the PSA’s rice production and price report for January to March 2019 released by the Philippine Statistics Authority, on Tuesday, palay output also fell 0.4% from 4.71 million MT in the fourth quarter of 2018.
The production report covers effectively the last quarter before rice imports are liberalized, with domestic farmers under pressure from potential competition from cheap foreign imports and the government still gearing up to fund farm mechanization and switching farmers over to alternative crops.
“From 2011 to 2019, the highest deseasonalized palay output for the first quarter was in 2018 at 4,918 thousand metric tons and the lowest was in 2016 at 4,248 thousand metric tons,” PSA said in the report.
The farmgate price of palay fell 5.3% to P20.07 per kilogram (kg), quarter-on-quarter. It was still slightly higher than the P20.04 per kg recorded in the same period last year. — Vincent Mariel P. Galang
UN agency IFAD to provide $62.9 M loan for poverty-reduction
THE International Fund for Agricultural Development (IFAD) has signed a financing agreement with the Philippines supporting a poverty-reduction and income-raising program covering 20 of the poorest provinces in Mindanao and the Eastern Visayas.
“To boost the rural economy and reduce poverty in rural areas, it is important that agribusiness enterprises drive a process of inclusive rural transformation, creating market opportunities for smallholder farmers as well as jobs for other disadvantaged rural people,” Alessandro Marini, IFAD country director for the Philippines said in a statement.
This agreement was signed by Gilbert F. Houngbo, President of IFAD, and Finnce Secretary Carlos G. Dominguez III by correspondence last week.
The Rural Agro-enterprise Partnerships for Inclusive Development and Growth (RAPID) is worth $95.1 million. Of this, $62.9 million will be provided by IFAD through a loan, as well as a $2.5 million grant.
The Philippines will co-finance $10.8 million, while $12.4 million will be provided by domestic financial institutions, $2.8 million by private sector partners, and $2.1 million by the beneficiaries. The source of the remaining $1.6 million will be determined later on.
The main goal of the project is to increase incomes of farmers and generate employment in some provinces.
“The project aims to do this by creating the conditions for the sustainable development of micro and small enterprises in specific agricultural commodity chains (cocoa, coffee, processed fruit and nuts, and coconut),” IFAD said.
IFAD noted that although the Philippines is a lower middle-income country, more than 20% of Filipinos are below the poverty line, with high incidence in rural areas where agriculture is the main source of income for most people. Rural areas tend to be behind growth and have high rates of underemployment since farmers have no access to capital, knowledge and technology, and often limited market access. Such people also have few alternative sources of income and limited access to financial services.
“The project will support the development of inclusive, sustainable and resilient commodity chains, providing farmers and agribusinesses with a range of services, including access to finance and business and technical advisory services, as well as key economic infrastructure such as farm-to-market roads,” Mr. Marini added.
In late 2018, IFAD committed to invest $63.5 million to support agriculture-based micro and small enterprises in 20 provinces across the Eastern Visayas and Mindanao.
Since 1978, IFAD, an agency of the United Nations, has financed 16 projects in the Philippines, reaching 1.8 million households in rural areas. — Vincent Mariel P. Galang
PAGCOR remits record P16.17 billion dividend to Treasury
THE Philippine Amusement and Gaming Corp. (PAGCOR) remitted a record dividend of P16.17 billion to the National Treasury on Tuesday.
According to PAGCOR, the single payment is close to matching its total of P17.16 billion worth of dividends from 2011 to 2017.
“Since 2011, PAGCOR has been remitting cash dividends to the government but it was in 2018 when we posted the highest amount. Because of this, PAGCOR’s total remitted cash dividends from 2011 to the present has reached P33.33 billion, enabling the agency to consistently make it to the GOCC (Government-Owned and Controlled Corporation) Elite Circle or the Billionaires’ Club,” PAGCOR Chairman and Chief Executive Officer Andrea D. Domingo said in a statement, referring to GOCCs that remit at least P1 billion to the Treasury.
By law, GOCCs must remit at least half of their profits to the national government.
“In 2018, we recorded our highest revenue in history which amounted to P104.12 billion. This feat enabled our agency to significantly increase our contributions to nation-building by 42.52%,” Ms. Domingo said.
PAGCOR remitted P58.95 billion to the national treasury and other beneficiaries in 2018, from P41.36 billion contributions in 2017.
PAGCOR said its gaming operations generated P67.85 billion in revenue, while other income including the sale of the agency’s land in Entertainment City to Bloomberry Resorts Corp. generated P36.27 billion. The land was purhased for P32.71 billion.
PAGCOR said that its “revenue increase is fueled by a gain from the sale of land to Bloomberry Resorts Corp.”
PAGCOR’s net income in the first quarter of 2019 was reported to have increased by 9.51% to P1.55 billion from P1.42 billion in the same period of the previous year. — Reicelene Joy N. Ignacio
MPIC still interested in MRT-3 O&M concession
THE Metro Pacific group said it remains interested in investing in the Metro Rail Transit Line 3 (MRT-3), after the government said earlier this month that it wants the private sector to come in for the operations and maintenance (O&M) of the train line.
Metro Pacific Investments Corp. (MPIC) Chairman Manuel V. Pangilinan told reporters last week the company still wants to be part of the Department of Transportation’s (DoTr) initiatives to improve the train system, noting its unsolicited proposal is “still there with the government.”
“I’m glad (Transportation) Secretary (Arthur P.) Tugade has mandated Sumitomo to start the rehab work for MRT-3. That’s much-needed. It’s a big step for Sec. Tugade,” he said, referring to the Japanese contractor tapped by the DoTr to rehabilitate the railway system.
Asked if the group remains keen to participate in the MRT-3’s eventual O&M, Mr. Pangilinan said, “Yes… We wait for their direction.”
MPIC, together with the Ayala Group and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., submitted in 2017 a P20-billion unsolicited proposal to take over the MRT-3 operations over a 30- to 32-year period.
The group was given original proponent status by the DoTr in 2017, after which the proposal was supposed to be turned over to the National Economic and Development Authority (NEDA) for further evaluation.
But progress was stalled at the DoTr level due to the government’s decision to tap Japanese contractors Sumitomo Corp. and Mitsubishi Heavy Industries, Ltd. (Sumitomo-MHI) for the rehabilitation of the MRT-3. The two parties signed the P16.985-billion, 43-month contract last year.
MPIC President and Chief Executive Officer Jose Ma. K. Lim said in January that the group may have to “reconfigure (its) proposal as an O&M” following the entry of Sumitomo-MHI.
Transportation Undersecretary for Railways Timothy John R. Batan said earlier this month that MPIC’s unsolicited proposal for the MRT-3 is still undergoing review, noting there are “legal issues” that need to be resolved first. He was referring to the ongoing arbitration case in Singapore between the Philippine government and MRT-3 contractor Metro Rail Transit Corp. over delayed equity rental payments.
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez
ICTSI Ecuador unit docks first 10,000-TEU capacity vessel
THE Ecuador subsidiary of International Container Terminal Services, Inc. (ICTSI) handled its first container vessel of 10,000-twenty foot equivalent unit (TEU) capacity at the Port of Guayaquil, ICTSI said
In a statement Tuesday, ICTSI said its Ecuador unit Contecon Guayaquil SA (CGSA) received on May 1 the 10,010-TEU neo-Panamax ship CMA CGM Cochin, to date the largest ship to dock in Ecuador.
“The vessel’s arrival highlights the importance of the recent dredging of the 95-kilometer main access channel leading to the country’s primary seaport. With deeper waters, the Port of Guayaquil is the first in Ecuador to accommodate ships of this size — elevating its status as a world-class port,” it said.
The City of Guayaquil tapped Luxemborg-based Jan De Nul Group last year for the dredging and maintenance of the port’s access channel. A deeper channel allows a port to receive larger container vessels.
“We congratulate and support the City of Guayaquil in its initiative to improve maritime access to the port. The dredging of the access channel paved the way for the arrival of these ships, which is something we look forward to as a huge boost to the local and national economy,” CGSA Chief Executive Officer José Antonio Contreras was quoted in the statement as saying.
ICTSI, through CGSA, was awarded the 20-year concession in 2007 to operate the container and multipurpose terminals at the Guayaquil. The port handles 85% of Ecuador’s imports and exports, and is a common gateway for trading banana, shrimp, fish, cocoa and wood.
The Razon-controlled port operator reported attributable net income gains of 77% in the first quarter to $72.4 million on the back of strong operating income and lower financing charges.
The company is setting capital expenditure at $380 million this year to expand its terminals in Manila, Mexico and Iraq and fund the acquisition of new equipment and maintenance works. — Denise A. Valdez
Japan minister does not expect trade war to trigger economic crisis
TOKYO — Japanese Finance Minister Taro Aso said on Tuesday the Sino-US trade war would not immediately trigger an economic shock on the scale of the “Lehman shock,” though the friction between the world’s two largest economies is unlikely to be resolved easily.
Mr. Aso said the Japanese government will lay the groundwork for a planned sales tax hike to be implemented barring a big economic shock like the collapse of Lehman Brothers about a decade ago.
Speaking to reporters after a cabinet meeting, Mr. Aso also said there’s no need to consider additional stimulus measures at the moment to ease the pain of the tax hike planned for October. — Reuters
China says has agreed with US to continue trade negotiations
BEIJING/WASHINGTON — China and the United States have agreed to keep talking about their trade dispute, the Chinese government said on Tuesday, as US President Donald Trump said he thought recent discussions in Beijing would be successful.
The slightly more optimistic comments came after both sides ramped up their trade war, with China announcing details of new tariffs against US imports on Monday, following the United States’ move last week to target Chinese imports.
The US Trade Representative’s office said it planned to hold a public hearing next month on the possibility of imposing duties of up to 25% on a further $300 billion worth of imports from China. Cellphones and laptops would be included in that list but pharmaceuticals would be excluded, the office said.
The prospect of global economy being derailed by the US and China sliding into a fiercer, more protracted dispute has rattled investors and led to a sharp sell-off on equities markets in the past week.
“My understanding is that China and the United States have agreed to continue pursuing relevant discussions. As for how they are pursued, I think that hinges upon further consultations between the two sides,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing, without giving details.
But China will not be bullied, he added.
“We hope that the US side does not misjudge the situation and not underestimate China’s determination and will to safeguard its interests.”
Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.
Mr. Geng said China had shown sincerity by still sending a high level delegation to the US for talks last week and that China has remained calm in the face of pressure.
He put the blame on Washington for going back on its word in some previous rounds of talks, including last May, when the two reached an agreement in Washington but then the United States backed out a few days later.
“So you absolutely can’t put the hat on China of reversing positions and going back on one’s promises,” Mr. Geng said, adding China has shown goodwill in the talks and has kept its promises.
PROPAGANDA PUSH
The Shanghai Composite Index lost 0.7% and the blue chip CSI 300 was 0.6% lower on Tuesday. But both indexes rebounded from opening down 1%, supported by suspected state-backed purchases.
However, the onshore yuan weakened 0.1% to its lowest level since December 27, 2018, trading at 6.8874 per dollar, after the foreign ministry said it hopes the US does not underestimate its determination to defend its interests.
Chinese state media on Tuesday kept up a barrage of nationalistic commentary.
The ruling Communist Party’s official People’s Daily said in a commentary that the US needed to “give it a rest” with the complaints that it was losing out to China in the trade relationship.
China is not to blame of the huge trade deficit the US runs, and China is a hugely profitable market for US companies, the paper said, in commentary published under the pen name “Zhong Sheng,” meaning “voice of China.”
“US consumers, farmers, businesses and so on have become the victims of the trade frictions provoked by the United States. They are not victims of China’s ‘unfair competition.’”
Mr. Trump, who has embraced protectionism as part of an “America First” agenda, said he would talk to Mr. Xi at a G20 summit in late June.
“Maybe something will happen,” Mr. Trump said in remarks at the White House on Monday. “We’re going to be meeting, as you know, at the G20 in Japan and that’ll be, I think, probably a very fruitful meeting.”
Speaking several hours later at a dinner gathering at the White House, Mr. Trump said it should be clear in “three or four weeks” if a US trade delegation’s trip to Beijing two weeks ago was successful.
“I have a feeling it’s going to be very successful,” he said. — Reuters
The living spirit of our democracy
When I think of Filipinos who suffer from poverty, hunger, and inequality, the more I value my democratic duty to vote and have my will as a Filipino be counted thru the ballot. Free elections are the living spirit of all democracies. Clean and honest elections bestow the people’s trust to legitimately govern and serve the interest of the people.
We exercised this power when we went out to vote. No matter our status in life, every citizen has the same power to choose the leaders and the right to demand the highest levels of performance and integrity.
The vote I contributed last Monday is for the continuing fight for equal civil rights, justice, access to health, education, and jobs for every Filipino. As a taxpayer, I believe these social services and rights should be given to all Filipinos. It is important to remember that this country will only be strong if all children are provided with quality education and opportunities for a productive and prosperous life.
Democracy Watch challenges the newly elected officials of government to turn their advocacies and campaign promises into concrete actions, meaningful projects and developmental policy reforms that will spark positive change in our country. Let them be reminded that their mandate must be to serve the interest of the people and not the interest of their political sponsors.
Moving forward, the public must remain vigilant and attentive to the delivery of public service of the Duterte administration in the last half of his term, and of the newly elected officials especially on their advocacies. The responsibility and participation of civil society goes beyond elections and voting. We must hold our officials accountable for every government resource and every act in the execution of their duties. We must also hold them accountable for the power we have vested in them to yield only positive results that would benefit the country.
There is much room for improvement in our election process. Comelec must also be able to explain, extensively and openly, the delays that occurred during the unofficial tally. The public’s anticipation of the fast posting of election results was disrupted by technical issues. This unfortunate glitch has stirred valid concerns on the capacity of the mandated electoral body of the country.
Though elections were generally peaceful, there were still some incidents of electoral violence. On the other hand, the netizens of social media again played a critical role in promoting transparency as seen through the reports and updates of voters within their districts.
Democracy Watch is hopeful that despite delays in processing and issues experienced during elections, Comelec and its partner institutions would be able to resolve these issues at the soonest possible time.
Now that the 2019 elections are over, eyes will be turning toward 2022, a presidential election that may again shift the direction of the country. The next three years will require those elected to prove their worth as government leaders. But as is the case in any democracy, we as citizens must monitor the actions of government and demand change for the better because citizen participation does not end after voting.
Let us all continue to call for better governance and hold accountable all officials of the Republic.
Claudette Guevara is Deputy Executive Director for Programs of Stratbase ADR Institute and also Secretary-General of Democracy Watch Philippines.