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Peso weakens on central bank’s ‘dovish’ remarks

The peso weakened against the dollar on Friday, May 11, following the “dovish” remarks from the Bangko Sentral ng Pilipinas (BSP).
The peso closed the session at P52.19, dipping 39 centavos from the P51.80-per-dollar finish.
The peso traded weaker the whole day, opening the session at P51.95. It fell to as low as P52.21, while its intraday high stood at P51.90.
Dollars traded soared to $1.13 billion from Thursday’s $807.4 million.
“The peso moved significantly higher [on Friday],” a trader said in a phone interview. “With the BSP’s rate hike [on Thursday], the move supposed to be supportive of the peso. But what happened was the opposite.”
The monetary authority Thursday hiked key rates by 25 basis points amid accelerating inflation and robust economic growth.
Another trader attributed the weakness of the peso to the remarks from the central bank about another rate hike.
“The peso weakness was due to the statement from the BSP saying that there won’t be another hike this year,” the trader said over the phone.
BSP Deputy Governor Diwa C. Guinigundo said that the 25 basis point hike will be sufficient enough to temper the rising inflation.
“The reading of the market about the remarks was that the BSP is still dovish,” the trader added in a mix of English and Filipino.
“The peso weakness came maybe from expectations of more BSP rate hikes this year. However, I do not see this happening,” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said in a text message. — Karl Angelo N. Vidal

SSI Group earnings dip in first quarter

Earnings of SSI Group, Inc. fell in the first three months of the year, dragged by the weakening peso despite a single-digit growth in sales for the period.
In a statement issued Friday, SSI said net income by the end of the first quarter stood at P132.9 million, lower by 1.5% year-on-year. — Arra B. Francia

Legislators condemn SC decision to oust Sereno

Legislators on Friday, May 11, condemned the Supreme Court (SC) decision granting the quo warranto petition against now-ousted Chief Justice Ma. Lourdes P.A. Sereno.
“With 8 voting for her ouster, (Chief Justice) Sereno can still file an MR (motion for reconsideration). For the sake of taking out our judiciary from the abyss they plunged themselves in, against all odds, she must fight,” Akbayan Representative Tom S. Villarin told reporters in a text message.
In addition, Caloocan City 2nd District Rep. Edgar R. Erice said SC justices who voted in favor of the petition “can now be impeached for culpable violation of the constitution.” The solon maintained removing an impeachable officer through a quo warranto petition is unconstitutional.
Magdalo Rep. Gary C. Alejano echoed this, saying the decision to remove Ms. Sereno is proof the government “blatantly disregards the Constitution.”
“The granting of the quo warranto petition did not only veer away from the long jurisprudence. It destroyed the faith of the people on the Supreme Court and the Constitution,” Mr. Alejano said in a statement. — Charmaine A. Tadalan

Tobacco, banking units lift LT Group Q1 bottom line

LT Group, Inc. (LTG)’s attributable profit jumped by 61% in the first quarter of 2018, boosted by its tobacco and banking units.
In a statement issued Friday, May 11, LTG said its net income attributable to equity holders of the parent reached P3.63 billion for the first three months of the year, higher than the P2.25 billion it posted in the same period last year.
The tobacco business accounted for 65% of the company’s attributable profit at P2.35 billion. LTG’s 49.6% stake in PMFTC, Inc. yielded it an equity in net earnings of P2.29 billion.
The listed conglomerate attributed the increase to the government’s actions against illicit trade, which casted out smuggled international and locally produced products. LTG said this gave it a level playing field and allowed it to pass on the increase in excise taxes to consumers. — Arra B. Francia

Stocks end week in rally mode

Stocks continued to rise on the trading week’s end following the central bank’s decision to increase interest rates on Friday, May 11.
The local bellwether Philippine Stock Exchange index (PSEi) climbed 181.11 points or 2.39% to close at 7,752.11, the first time it sustained an increase this week.
The broader all shares index also grew 79.24 points or 1.71% at 4,709.15.
“Market continued to recover today after BSP (Bangko Sentral ng Pilipinas) increased its lending rates to mitigate the inflationary effects,” Diversified Securities, Inc. equities trader Aniceto K. Pangan said.
On Thursday, May 10, the Monetary Board raised key lending rates by 25 basis points, the first time it did since 2014. Overnight lending rate is now 3.75%, overnight reverse repurchase rate 3.25% and overnight deposit rate 2.75%.
BSP Governor Nestor A. Espenilla, Jr. said the increase is intended to temper the rising prices caused by inflation.
Mr. Pangan added the lower-than-estimated US inflationary data indicates the Fed will not drastically hike its lending rates, “thus favorable for the emerging markets such as the Philippines.”
Sectoral indices all fell in the green, led by holding firms which posted a 182.84-point increase or 2.41%, closing at 7,745.5. The mining and oil sector followed at 10,194.17, up by 118.79 points or 1.17%
Industrials advanced 108.21 points or 0.97% at 11,188.84, while property added 86.12 points or 2.38% at 3,693.37.
Financials inched up 47.81 points or 2.53% to close at 1,933.66, and services by 26.5 points or 1.74% at 1,545.92.
Five of the session’s top 10 gainers announced net income growth in their first quarter reports–Aboitiz Equity Ventures, Inc., Pacific Online Systems Corporation, Robinsons Land Corporation, Alliance Global Group, Inc. and Bloomberry Resorts Corporation.
Advancers outpaced decliners, 116-80, while 49 were unchanged.
Foreigners were buyers, recording a net of P571.15 million. — Denise A. Valdez

Satisfaction with Duterte administration declines — SWS poll

Net satisfaction in the Duterte Administration dropped 12 points, falling one grade to a “very good” rating with a score of +58 in the first quarter of 2018 from the record-high rating of +70 in December 2017, according to the Social Weather Station (SWS).
The quarterly survey found 69% of adult Filipinos remained satisfied with the general performance of the present administration, 11% are dissatisfied, while 18% are neither.
The 12-point decrease was attributed to the net satisfaction decline in Balance Luzon, Mindanao and Metro Manila, combined with a steady score in Visayas.
The National Administration scored the highest in Mindanao with +72, down 15 points from the +87 in December 2017, but remained “excellent.” Similarly, in Balance Luzon, it recorded a +50 rating, down by 17 points from +67 last quarter, but stayed “very good.”
Rating in Metro Manila fell one grade from “excellent” to “very good” as it lost 13 points from +17 in December 2017 to +58 in March 2018. Whereas, score in Visayas was unchanged at +57, the same “very good” rating it recorded since September 2017.
Moreover, the government maintained a “very good” rating in classes ABC with a score of +56 in March 2018, but was down 6 points from +62 in the last quarter. — Charmaine A. Tadalan

RCBC books higher Q1 profit on strong loan growth

Rizal Commercial Banking Corp. (RCBC) reported higher net profit in the first quarter supported by robust loan growth and reduction in non-performing assets.
The Yuchengco-led lender booked an unaudited consolidated net income of P1.1 billion in the January-March period, 13.1% higher than the P1 billion reported in the same period last year.
“I am pleased to report that the [first quarter 2018] results had a good start to the year,” RCBC President and Chief Executive Officer Gil. A Buenaventura was quoted as saying in a disclosure to the local bourse Friday.
“Robust loan growth of 18% and continued reduction in non-performing assets helped lead to a double-digit increase in our net income.”
The lender saw an 18% growth in its loan portfolio to P370.9 billion from the year-ago level of P314.7 billion, based on its earlier regulatory filing.
RCBC said saw “solid” growth across all segments, with corporate loans climbing 14%, small and medium enterprise loans rising 40%, and consumer loans as well as credit cards receivables expanding 17% and 34%, respectively.
This brought the bank’s net interest income improving by 16% to hit P4.8 billion from the P4.1 billion logged in a comparable year-ago period. — Karl Angelo N. Vidal

First-quarter tax collections hit fresh record high

The government’s tax effort saw a substantial improvement relative to the Philippine economy in the first quarter, with collections hitting a fresh record high, the Department of Finance (DoF) said.
Revenues collected from January to March accounted for 15.82% of gross domestic product (GDP), jumping from the 14.91% share logged during the same period in 2017. The computation includes taxes, import duties, and other fees collected by the government.
“Tax effort also rose by 1.03 percentage point, from 13.44% to 14.47%, the highest first quarter tax effort ever achieved,” the DoF said in a statement on Friday. — Melissa Luz T. Lopez

BSP creates fourth unit as part of reorganization plan

The Bangko Sentral ng Pilipinas (BSP) will introduce a new unit to be headed by a third deputy governor as part of its reorganization plan, it announced on Friday, May 11.
In a statement, the central bank revealed a “phased” reorganization which involved the renaming of three existing sectors and the creation of a new unit. The adjustment is seen “to enhance its capability to fulfill its mandate in an ever-shifting economic landscape,” the BSP said.
The changes took effect on May 2.
The four sectors are as follows:
• the Financial Supervision Sector, formerly known as the Supervision and Examination Sector headed by Deputy Governor Chuchi G. Fonacier;
• the Monetary and Economics Sector, previously the Monetary Stability Sector (MSS) headed by Deputy Governor Diwa C. Guinigundo;
• the Corporate Services Sector, formerly named the Resource Management Sector led by Deputy Governor Maria Almasara Cyd N. Tuaño-Amador;
• and the Currency Management Sector, previously under the MSS with Assistant Governor Dahlia D. Luna sitting as acting head. — Melissa Luz T. Lopez

P29 million lost to fish kill in Obando, Bulacan

The Bureau of Fisheries and Aquatic Resources (BFAR) Region III said that the intense heat last May 6 led to P29-million worth of losses for 40 fish pen operations in Obando, Bulacan.
In a statement on Friday, May 11, BFAR said that the 34 °C temperature and the 0.050 low tide levels affected 130 hectares of milkfish farms, or 250 metic tons of fish the day after, on May 7.
“Light rain showers, prolonged cloudy skies and thermal fluctuations in the water due to changing weather conditions have been found to be the causes of dissolved oxygen depletion which, in turn, caused the fish kill,” Its statement read.
However, BFAR said that there was already a high chance of fish kill prior to this, with the milkfish farms stocking more fish than the recommended 3,000 fish per hectare.
As of the latest price monitored by BFAR on Wedneday, the fish kill will not affect its market prices, as Obando is not the only source of milkfish.
The Department of Agriculture agency said that the low supply of both milkfish and tilapia in Obando will only be temporary, noting that they expect the farms to recover quickly.
Agriculture Secretary Emmanuel F. Pinol on Thursday said that the fishkill in Obando “has a minimal” effect to the fisheries sub-sector in the second quarter. — Anna Gabriela M. Mogato

Sugar production to meet local demand, US quota this year — SRA

The Sugar Regulatory Administration (SRA) said that the country’s sugar production will still be able to cater to both domestic demand and the US Quota for this crop year.
SRA Hermenegildo R. Serafica in a statement on Friday, May 11, said that sugar mill factory managers in Luzon and Visayas had given him updates on their operations and production outlook.
“We have the canes [to mill], but the problem besetting the industry at the moment is the scarcity of cane cutters. The canes have to be harvested and brought to the central for milling,” he added.
“That is why some mills may end much later in the crop year, around June or July, and others to start earlier to take advantage of the remaining canes.”
According to SRA, sugar production already hit 1.93 million metric tons (MT) as of the production week that ended last May 6.
Only 340,694 MT is needed to complete the 2.27 million MT, Mr. Serafica said.
“[I]t is very apparent that in a few weeks, we’ll be able to meet this target,” he added. — Anna Gabriela A. Mogato

Malabon barangay chairman in drug list faces charges

A barangay official included in the recently released ‘narco-list’ by the Philippine Drug Enforcement Agency (PDEA) faces charges for involvement in the illegal drug trade.
The PDEA on Friday submitted before the Office of the Ombudsman separate criminal and administrative charges against Alvin A. Mañalac, Punong Barangay of Barangay Tinajeros, Malabon City for alleged multiple violations of Republic Act 9165 or the Comprehensive Dangerous Drugs Act of 2002.
“The charges stemmed from the discovery of a clandestine laboratory in Barangay Tinajeros, Malabon City on April 13, 2018,” PDEA Director General Aaron N. Aquino was cited as saying in the statement.
“Failure of Mr. Mañalac, as barangay chairman, to identify oushers and users in his barangay prior to the search warrant implementation constitutes an act of being a protector or coddler,” he explained.
According to the statement, “additional charges were also filed against Mañalac for violation of Article 171 (Falsification by Public Officer, Employee, or Notary) of the Revised Penal Code; Gross Negligence and Dereliction of Duty under Section 60 of RA 7160; Gross Neglect of Duty, Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service, the Local Government Code of 1991.”
It added: Mañalac has also violated Dangerous Drugs Board (DDB) Regulation No. 2, Seies of 2004 in declaring Office of Barangay Tinajeros as Drug-Free Workplace in aabsence of a Drug-Free Workplace Committee and for his failure to submit documentary requirements for application of drug-free status.”
“This is to let the public know about the involvement in the illegal drug trade of the barangay leaders seeking for re-election, and will serve as a guide to the voting public on whom they shall entrust their votes,” Mr. Aquino said in the statement.
The PDEA drug list, released by the agency on April 30, contained a total of 207 names, 90 of which were village chiefs while 117 were of councilors. The officials named were from the Cordillera Administrative Region (CAR), Autonomous Region of Muslim Mindanao (ARMM), and Bicol region. – Dane Angelo Enerio

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