Plunder complaint filed vs Alvarez, chief of staff

May 8, 2019 | 8:59 pm

A COMPLAINT has been filed before the office of the Ombudsman-Mindanao against former House speaker Pantaleon D. Alvarez and his chief of staff, Edwin I. Jubahib, for alleged violation of Republic Act 7080 and Republic Act 3019, the law on plunder and the Anti-Graft and Corrupt Practices Act, respectively. The complainant, Jeffrey L. Cabigon, claims to be a former security officer of Mr. Alvarez. In an affidavit executed May 6, Mr. Cabigon alleged that Messrs. Alvarez and Jubahib used government money to buy luxury vehicles and numerous properties within Davao del Norte province. In a press conference on Monday, Mr. Cabigon said his filing of charges “were not politically motivated” and that he is hoping to be placed under the government’s Witness Protection Program. Both Messrs. Alvarez and Jubahib were sought for comment but have yet to reply as of this posting. Mr. Alvarez is running for reelection as representative of Davao del Norte’s 1^st District while Mr. Jubahib is seeking the gubernatorial post of the province. They are up against incumbent Gov. Anthony G. del Rosario, who is running for the congressional seat, while his brother Rodolfo Jr. is a candidate for governor. — Carmelito Q. Francisco

Nation at a Glance — (05/09/19)

May 8, 2019 | 8:58 pm

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Logistics leader W Express launches new e-payment platform ECPay

May 8, 2019 | 11:29 am

W Express, one of the country’s pioneering logistics companies, has launched ECPay, a new service designed to make payments hassle-free for its customers.

ECPay allows W Express to accept and process payments for Home Credit, Cashalo, Dragon Loans, Philippine Airlines, Cebu Pacific, Sky Cable, Cignal TV, BPI Banko, Security Bank Mastercard, Coins.ph, PLDT, Globe, SSS, BIR, NBI, local electric cooperatives and water districts, insurances, and loans, among others. It will also allow customers to top up their prepaid phone credits and their Autosweep or Easytrip RFIDs.

The ECPay service is now available in 82 Metro Manila and Luzon W Express branches. The company aims to offer ECPay in Visayas and Mindanao in June.

“Providing our customers a one-stop shop for bills payments, alongside our courier delivery services, is just one of our efforts in keeping with our philosophy of delivering with care and confidence, and our slogan ‘cargo mo, kargo ko!’” W Express Chairman and President Dawn J. Feliciano said.

Earlier in April, W Express announced its major expansion in 2019, starting with the opening of the first two of 19 new branches in growth areas around the country.

Trade gap widens in March

May 8, 2019 | 11:14 am

The country’s trade deficit in goods widened in March as exports declined while imports registered faster growth, the government reported this morning.

Preliminary data released by the Philippine Statistics Authority showed the March trade deficit at $3.138 billion, higher than the $2.744 billion deficit in February and the $2.340 billion in the same month last year.

Cumulatively, the country’s trade balance posted a $9.801 billion deficit, bigger than the $8.103 billion in 2018’s comparable period.

Merchandise exports declined 2.5% year on year to $5.876 billion from $6.024 billion. The export decline in March marked the fourth straight month of contraction since December 2018.

Meanwhile, import payments rose 7.8% to $9.014 billion during the month. Its growth was faster than February’s 2.6% and March 2018’s 3.2%.

To date, merchandise exports declined by 3.1% to $16.377 billion against the six percent growth goal of the interagency Development Budget Coordination Committee (DBCC) for full-year 2019.

On the other hand, import of goods grew 4.7% to $26.179 billion on a cumulative basis against the DBCC’s nine percent projection for the year.

The United States is the Philippines’ top export market in March with a 15.4% share at $906.33 million followed by Japan’s 15.2% ($892.20 million) and Hong Kong’s 14.1% ($829.02 million).

Meanwhile, China was the country’s top source of imports with a 21.4% share ($1.925 billion) followed by Japan’s 9.8% ($882.87 million) and the United States’ 7.9% ($712.43 million). — Christine Joyce S. Castañeda

Inflation slowest in 16 months in April

May 8, 2019 | 12:33 am

INFLATION eased for the sixth straight month to its slowest pace in 16 months in April, the Philippine Statistics Authority (PSA) reported on Tuesday, giving more room for the central bank to loosen monetary policy.

April’s headline rate of three percent was down from 3.3% in March and 4.5% a year ago, and was the slowest in 16 months or since the 2.9% recorded in December 2017.

April’s reading was lower than the 3.1% estimate median in BusinessWorld’s poll of 10 economists late last week. The latest figure also fell within the Bangko Sentral ng Pilipinas’ (BSP) own 2.7%-3.5% estimate for that month.

Year-to-date, inflation clocked in at 3.6% — falling within the BSP’s 2-4% target range for 2019 and creeping towards the BSP’s three percent forecast average for the entire year.

Core inflation, which strips out commodities prone to volatile price swings, slowed to 3.4% in April from 3.5% in March.

The PSA attributed the downtrend primarily to the slower annual increase in the heavily weighted food and non-alcoholic beverages index at three percent in April from 3.4% in March and 5.9% in April 2018.

The PSA also noted slower annual increments in the following commodity groups: alcoholic beverages and tobacco (9.9% in April from 10.8% in March); clothing and footwear (2.4% from 2.5%); housing, water, electricity, gas, and other fuels (3.2% from 3.4%); furnishing, household equipment and routine maintenance of the house (3.2% from 3.4%); health (3.7% from 3.9%); as well as restaurant and miscellaneous goods and services (3.5% from 3.7%).

“The recent inflation reading validates our efforts towards stabilizing inflation so that the country’s buoyant economic growth, along with key reforms, remains unimpeded,” the National Economic and Development Authority quoted its director-general, Socioeconomic Planning Secretary Ernesto M. Pernia, as saying in a statement.

BSP Governor Benjamin E. Diokno said in a separate statement that April’s inflation rate is consistent with the central bank’s expectation of inflation settling within the 2-4% target range for 2019 and 2020.

At the same time, Mr. Diokno said that the BSP will keep watch of price risks especially as its Monetary Board conducts its third policy review for the year on Thursday.

“[T]he continued increase in global crude oil prices and possibility of a prolonged El Niño episode could be a source of upside pressures over the near term. On the other hand, the weakening global economic environment could present downside risks to inflation,” Mr. Diokno said.

“Against these upside and downside risks, the BSP continues to keep a close watch over price developments in the country and shall consider all relevant data at its next monetary policy meeting… to ensure that the monetary policy stance remains consistent with the BSP’s primary mandate of price stability conducive to a balanced and sustainable growth of the economy.”

The central bank governor earlier said that the BSP will continue to be data-driven in its decision-making amid mounting expectations of monetary policy easing.

The key policy rate is now at a decade-high of 4.75%, reflecting the cumulative 175-basis-point (bp) increase in benchmark yields adopted in five meetings last year as the BSP sought to douse inflation expectations.

The central bank also slashed the reserve requirement ratio in two one-percentage-point moves in March and June 2018 that brought mandatory reserves for universal and commercial banks to 18% of their total deposits.

MONETARY POLICY EXPECTATIONS
For HSBC Global Research economist Noelan Arbis, “the time is ripe” for the central bank to start loosening its monetary policy.

“Slowing inflation means that the BSP should be able to place a greater emphasis on growth,” Mr. Arbis said in an e-mail.

Mr. Arbis expects gross domestic product (GDP) growth to slow to six percent in 2019 from 2018’s 6.2% due to the four-month delay in enacting the 2019 national budget, high bank lending rates, low liquidity and tepid remittances growth. “Growth may slow further in subsequent quarters if the BSP does not engage in immediate and adequate monetary accommodation,” he said.

M3 — considered the broadest measure of money circulating in an economy — grew 4.2% year-on-year to about P11.4 trillion in March, slower than the 7.1% expansion in February and January’s 7.6% increase. The latest recorded pace is the slowest since September 2012.

Meanwhile, outstanding loans increased by 9.9% year on year in March, slower than the 13.7% pace logged the previous month. Inclusive of reserve repurchase agreements, bank lending growth decelerated to 9.3% from 13.9% in February.

ING Bank NV Manila Branch senior economist Nicholas Antonio T. Mapa said that “[w]ith the inflation objective in hand and [economic] growth to take a hit in the [first half of the year], it would be about time for BSP to ease off the brakes from ‘crisis mode’ and finally nudge on the accelerator to zoom to faster growth.”

Sun Life Financial economist Patrick M. Ella “fully expects” the BSP to deliver a 25-bp policy rate cut as well as an RRR cut of 100 bps given that food costs have been declining in previous months.

In an e-mail to reporters, Standard Chartered Bank economist Chidu Narayanan said he foresees a 25-bps cut in policy rate. “The decision is likely to be a close call… The combination of falling inflation and slowing growth is likely to lead BSP to start unwinding part of the 175 bps of rate hikes from 2018. We see a total 100 bps of rate cuts this year, taking the policy cash rate to 3.75% by year-end.”

In a separate e-mail, Security Bank Corp. economist Robert Dan J. Roces said slashing the RRR may come before cutting the key policy rate. “[D]omestic economic conditions have surely improved and thus gives the BSP room for easing,” he explained. “However, liquidity is tightening. Thus, reductions in both the RRR and policy rates may occur, but I think the precedence may be [reserve requirements] first, then interest rates. They might do this slowly, sort of testing the waters first, via RRR cut of 100 bps.”

OUTLOOK
While expectations were mixed on the timing of policy easing, there is little disagreement among analysts on the pace of general price increases moving forward.

“Inflation expectations… appear to be well entrenched… with the specter of overblown inflation proportions a fading memory just a few months from the recent peak,” said ING Bank’s Mr. Mapa.

Security Bank’s Mr. Roces said: “I expect inflation in May to further ease, minus price pressures from further oil price increases which seem to be stabilizing as of late,” while for Sun Life’s Mr. Ella: “[It’s] too early to tell, but I’m pretty confident it’s likely below 3%.” — Lourdes O. Pilar and Reicelene Joy N. Ignacio

Headline inflation rates in the Philippines (April, 2019)

May 8, 2019 | 12:33 am

INFLATION eased for the sixth straight month to its slowest pace in 16 months in April, the Philippine Statistics Authority (PSA) reported on Tuesday, giving more room for the central bank to loosen monetary policy. Read the full story.

Manufacturing falls for 4th month

May 8, 2019 | 12:32 am

FACTORY OUTPUT posted its fourth consecutive month of decline in March, the Philippine Statistics Authority (PSA) reported on Tuesday.

Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed the volume of production index contracting by 9.2% year-on-year in March versus the February’s revised 8.1% decline and the 11% growth logged in March 2018. It was the fourth straight month of decline following the contractions in February (-8.1%), January (-2.5%) and December 2018 (-8.9%).

Year to date, factory output decline averaged 6.6% versus the 12.3% growth in 2018’s comparable three months.

The PSA reported that eight out of 20 major industry groups registered annual declines, namely: furniture and fixtures (-25.5%), food manufacturing (-17.3%), petroleum products (-17.2%), tobacco products (-3.8%), leather products (-1.9%), non-metallic mineral products (-5.7%), basic metals (-4.6%) and electrical machinery (-1%).

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) was at 51.5 in April — the lowest in nine months — easing from February’s 51.9. A PMI reading above 50 signals improvement in business conditions from the preceding month, while a score below that point indicates deterioration.

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 84.4%. Eleven of the 20 sectors registered capacity utilization rates of at least 80%.

The National Economic and Development Authority (NEDA) said in a statement that the government expects manufacturing output to rebound in the months ahead amid an increase in tourism, election-related spending and slowing inflation. “We expect the figures to improve in the coming months as we see increase in demand during summer, given the rise in the number of local and foreign tourists, easing of inflation, and increase in election-related spending. Government spending on infrastructure and other government services is also likely to catch up,” Socioeconomic Planning Secretary Ernesto M. Pernia, NEDA’s director-general, said in a statement. “However, the presence of El Niño could easily feed into a hike in power and water rates, which are essential inputs to the manufacturing sector. Fortunately, forecasts point to El Niño weakening starting May to August this year.”

“The year-on-year decline in manufacturing data may be partly brought about by higher base/denominator effects and external risk factors such as the slower global economic growth amid the lingering US-China trade war and slower economic growth in China, which partly led to slower global trade…” Rizal Commercial Banking Corp. economist Michael L. Ricafort said in an e-mail.

PSA noted that manufactured goods account for more than 80% of the country’s merchandise exports.

“Some manufacturers have been also on the sidelines amid the declining trend in both inflation and interest rates, waiting for both prices and interest rates/borrowing costs to go down further before making new investments and expansion projects,” Mr. Ricafort explained, adding that spending related to mid-term elections on Monday “could help increase business activities in industries that benefit directly and indirectly from higher election-related demand.”

University of Asia and the Pacific economist Peter Lee U said in an e-mail that the 39% volume growth in the printing subsector was “likely due to printing related to upcoming elections.”

TUCP seeks P386 across-the-board Region 7 wage hike

May 8, 2019 | 12:31 am

A WEEK after filing its plea for a P710 across-the-board increase for Metro Manila’s private sector workers, the country’s biggest labor group filed a petition for a P386 increase for private sector employees in Central Visayas.

In its petition before the Region 7 Regional Tripartite Wages and Productivity Board, the Trade Union Congress of the Philippines (TUCP) argued that “the measly P20 increase” in daily minimum wage to P313-386 that took effect on Aug. 3 last year “has long been dissipated by the high costs of basic goods and services…”

The TUCP blamed the first tax reform package that took effect in January 2018 that raised or added levies on goods and services but did not benefit minimum wage earners when it slashed personal income tax rates, since this worker class is exempt from income tax.

Official data show Region 7 with the lowest inflation rate of 1.3% among the Philippines’ 17 regions in April, down from 2.2% in March. — Gillian M. Cortez

Meralco: May bills to slip on lower generation charge

May 8, 2019 | 12:30 am

AFTER RISING for three straight months, electricity rates will go down by P0.2728 per kilowatt-hour (/kWh) in May, resulting in a P55 reduction for the monthly bill of a typical household consuming 200 kWh, Manila Electric Co. (Meralco) announced on Tuesday.

The country’s biggest power distributor said that overall power rates will dip this month to P10.2866/kWh from April’s P10.5594/kWh largely because of a lower generation charge.

For those consuming 300 kWh, 400 kWh and 500 kWh, the reduction translates into cuts of P81.84, P109.12 and P136.40, respectively, in their monthly bills.

“From P5.6322/kWh last month, generation charge for May went down to P5.5508/kWh, a decrease of P0.0814/kWh,” Meralco said.

It attributed the decrease in generation charge mainly to lower charges from independent power producers (IPPs) and power supply agreements (PSAs).

The cost of power from these sources decreased by P0.7544/kWh and P0.5143/kWh, respectively.

Meralco said the decline was due to the strengthening of peso against the US dollar and lower prices for coal and Malampaya natural gas.

“About 98% of IPP charges and 72% of PSA charges are dollar-denominated. The price of natural gas from Malampaya, which accounts for about 64% of Meralco’s supply, decreased this month as a result of quarterly repricing to reflect lower crude oil prices in the world market,” the company said.

IPPs and PSAs accounted for 43% and 45% of Meralco’s supply requirements, respectively.

Charges from the Wholesale Electricity Spot Market (WESM) rose by P3.5355/kWh because of tight supply conditions in Luzon that triggered seven yellow alerts and seven red alerts declared by the National Grid Corporation of the Philippines during the April supply month. WESM provided 12% of Meralco’s supply needs, the utility said in its statement.

The transmission charge for residential customers dropped by P0.0808/kWh due to higher system load factor, while taxes and other charges slipped by P0.1106/kWh.

Meralco said its distribution, supply, and metering charges had remained unchanged for 46 months, after these registered reductions in July 2015. — VVS

ALI nets P7.3B in 1st quarter

May 8, 2019 | 12:08 am

AYALA LAND, Inc. (ALI) saw its net income rise 12% in the first three months, driven by higher residential sales and strong commercial leasing revenues.

The listed property developer said in a statement Tuesday that net income reached P7.3 billion in the first quarter, after total revenues went up by seven percent to P39.7 billion.

“We continue to experience consistent growth in all our business lines. Notable was the strength of our commercial portfolio as the asset build-up over the last few years moved the business forward,” ALI President and Chief Executive Officer Bernard Vincent O. Dy said in a statement.

Property development, which accounts for the bulk of ALI’s revenues, grew its topline by four percent to P26.1 billion against a year ago’s P25.2 billion. First-quarter sales reservations stood at P34.1 billion, eight percent higher year on year.

“Our development business also continues to grow in line with expectations, posting a healthy increase in reservation sales due to the sustained demand from local and overseas Filipinos,” Mr. Dy said.

Meanwhile, the commercial leasing segment realized revenues of P9.2 billion during the quarter, 19% higher than the P7.7 billion seen a year ago. The business covers the operation of ALI’s shopping centers, offices, hotels, and resorts.

From shopping centers alone, revenues climbed 14% to P5.1 billion thanks to the contribution from newly opened malls such as Ayala Malls Feliz, Circuit Makati, Capitol Central, Vertis North, and Cloverleaf. Its malls in Makati, Glorietta and Greenbelt, also reported positive performances.

Office leasing revenues, meanwhile, accelerated 27% to P2.2 billion, as the company opened new offices including Ayala North Exchange Towers 1 and 2, Circuit Corporate Center Towers 1 and 2, and Vertis North Corporate Center Towers 1 and 2.

The recent opening of new hotels and resorts also lifted ALI’s revenues, as the business registered a 25% increase to P1.5 billion. The company ended the quarter with 3,018 rooms, coming from newly opened Seda Hotels in Vertis North, Quezon City, Ayala Center Cebu, and Lio in Palawan.

ALI said it spent P22.3 billion in capital expenditures in the first three months of the year, which was used for the completion of new projects in the pipeline. The company allocated a capex of P130 billion for the full year.

The company also noted that it has started development on its 526-hectare estate called Habini Bay in Misamis Oriental. The project will be anchored by the 104-hectare Laguindingan Technopark managed by its unit Laguna Technopark, Inc.

Mr. Dy earlier said that the company needs to grow its bottomline by 17% starting this year in order to hit its P40-billion profit target in 2020. The company is banking on the continued strength of the economy to support its goal.

Shares in ALI added 0.32% or 15 centavos to close at P46.95 each on Tuesday. — Arra B. Francia

LT Group allocates P19 billion for capex

May 8, 2019 | 12:07 am

By Arra B. Francia, Senior Reporter

LT Group, Inc. (LTG) will be spending about P19 billion in capital expenditures (capex) this year, a big chunk of which will be used to support the planned stock rights offering of its banking unit.

The holding firm of tycoon Lucio C. Tan said about P7-8 billion of the budget will go to Philippine National Bank (PNB), which announced last month plans to raise P12 billion in fresh capital.

“As you know we have about 60% interest in PNB…if we subscribe to our requirement then we will have to add P6-7 billion for that,” LTG Chief Financial Officer Jose Gabriel D. Olivares said in a media briefing after the company’s annual shareholders’ meeting in Manila yesterday.

PNB earlier said that the stock rights offering will enable the bank to sustain its asset growth, and would give it more leeway for future expansion.

About P2 billion will go to Eton Properties Philippines, Inc., which focuses on developing office buildings catered toward business process outsourcing (BPO) firms.

“We continue building BPO buildings and horizontal developments, and we’re planning to develop new facilities,” LTG President and Chief Operating Officer Michael G. Tan said during the briefing.

Mr. Tan added that Eton Properties has just finished turning over its fifth BPO tower in Centris, Quezon City to tenants. It is also working on its joint venture with Ayala Land, Inc. for Parklinks, a 35-hectare mixed use estate covering areas in Pasig and Quezon City.

The LTG chief said the rest of the subsidiaries will get about P1 billion from the capex, which will mostly be used for working capital requirements.

LTG’s other units include tobacco arm PMFTC, Inc., liquor maker Tanduay Distillers, Inc. (TDI), beverage manufacturer Asia Brewery, Inc. (ABI), and Victorias Milling Company, Inc.

This year’s capex is 73% higher than the P11 billion it spent in 2018.

Mr. Tan said the company is aiming to show an improved performance this year compared to 2018, despite higher excise taxes weighing on the demand for tobacco and alcoholic products.

“The government wants to increase further the excise tax for both tobacco products and alcoholic beverages. If passed into law, higher taxes would adversely affect volumes as these would translate to higher selling prices,” Mr. Tan said in a speech during the stockholders’ meeting.

Mr. Tan said that while the company is not against tax increases, “the hikes should be moderate.”

“The tobacco business will remain as the main source of LTG’s earnings. PMFTC, Inc. will continue to be vigilant in the fight against illicit trade and continue to work with government,” he said.

For ABI, the company sees the stabilization of volumes for Cobra energy drinks as there are no further tax increases for sugary drinks. It is also expanding its bottled water facilities to support the segment’s growth, and offset the weakness of other units.

Shares in LTG jumped 2.29% or 38 centavos to close at P17 each at the stock exchange on Tuesday.

Chelsea Logistics, PNOC look to jointly develop LNG logistics hub in Mabini

May 8, 2019 | 12:06 am

CHELSEA Logistics Holdings Corp. said on Tuesday that it was exploring a possible joint development of a fuel and liquefied natural gas (LNG) storage and terminal with Philippine National Oil Co. (PNOC) in the state-run company’s site in Mabini, Batangas.

Chelsea, a listed company chaired by Davao City businessman Dennis A. Uy, told the stock exchange that the development of the facility is for commercial and logistics use.

“This collaboration with PNOC provides opportunities for both Chelsea’s shipping and logistics businesses. Further to the potential inclusion of a fuel and LNG storage and terminal to our logistics arm, we are studying how to serve the future vessel requirements for the transportation of PNX’s (Phoenix Petroleum Philippines, Inc.’s) LNG products,” said Chryss Alfonsus V. Damuy, Chelsea president and chief executive officer.

The announcement is the latest development in the LNG terminal planned by Phoenix Petroleum, another company led by Mr. Uy.

In March, the listed oil company disclosed that it had signed a memorandum of understanding (MoU) with PNOC, along with China’s CNOOC Gas and Power Group Co. Ltd. (CNOOC G&P), to jointly explore business opportunities in the LNG hub project.

The MoU signing, which came after a series of engagement talks among the three parties, will allow the companies to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan Philippine LNG, Inc., the project entity for the LNG project.

In Chelsea’s disclosure, the company said the fuel and LNG terminal project would be part of the development plan for a downstream LNG network among Phoenix Petroleum, CNOOC G&P and PNOC.

Chelsea said it continues to build its logistics portfolio, which currently consists of warehouse and distribution facilities through Worklink Services, Inc. and 2GO Group, Inc., with a potential inclusion of a logistics facility for holding and distribution of fuel and LNG products.

“To date, Chelsea operates 16 tankers, 23 RoPax vessels, 11 cargo vessels and 16 tugboats through Chelsea Shipping, Starlite Ferries, Trans-Asia Shipping Lines, Inc. and Fortis Tugs. In addition, its investee 2GO Group, Inc. operates 8 RoPax vessels, 5 cargo vessels, and 11 fastcrafts,” the company said.

On Tuesday, shares in Chelsea rose by 2.12% to close at P5.77 each. — Victor V. Saulon