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Banks’ end-June outstanding foreign currency loans decline by 2.7%

OUTSTANDING LOANS granted by banks’ foreign currency deposit units (FCDU) declined at end-June from the previous quarter, the central bank said, as principal repayments outpaced disbursements.

The Bangko Sentral ng Pilipinas (BSP) in a statement late on Monday said loans granted by the FCDUs of banks dropped by 2.7% to $15.63 billion as of June from $16.07 billion at end-March.

Meanwhile, year on year, outstanding FCDU loans rose by 1.6% from $15.39 billion.

FCDUs are BSP-approved bank units that perform transactions involving foreign currencies, including deposits and loans.

Gross disbursements went up by 3.9% to $19.9 billion in the second quarter from $19.15 billion in the previous quarter.

This was mainly due to the “increase in funding requirements of a foreign bank branch affiliate,” the BSP said.

Meanwhile, loan repayments jumped by 11.5% to $20.33 billion from $18.23 billion. This resulted in an overall net repayment in the second quarter.

The bulk or $11.997 billion of banks’ outstanding FCDU loans was made up of medium- to long-term debt, or those payable in more than a year. This comprised 76.7% of the total, a tad lower than the previous quarter’s 79.1% share.

Meanwhile, short-term debt stood at $3.636 billion, making up the remaining 23.3% share.

By borrower, FCDU loans granted to residents amounted to $9.48 billion or 60.7% of the total loans at end-June. Per sector, the majority of resident loans went to merchandise and service exporters (26.2%); power generation companies (22.4%); and towing, tanker, trucking, forwarding, personal and other industries (17.7%).

Meanwhile, foreign currency loans to nonresidents totaled $6.15 billion as of June.

Local banks accounted for $13.454 billion of total outstanding FCDU loans as of June or 86.1% of the total, with commercial banks disbursing most of these loans, central bank data showed.

On the other hand, banks’ FCDU deposit liabilities declined by 5.9% to $55.16 billion as of end-June from $58.61 billion a quarter prior.

Year on year, foreign currency deposit liabilities climbed by 12.6% from $48.99 billion as of June 2023.

“The bulk of these deposits ($53.85 billion or 97.6%) continued to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves,” the BSP added.

This resulted in an FCDU loans-to-deposit ratio of 28.3% as of June, up from the 27.4% as of March but lower than the 31.4% logged a year prior. — Luisa Maria Jacinta C. Jocson

Waste not, want not

FREEPIK

When I was a child in Tacloban, the leading national magazine, the Philippines Free Press, blasted on its cover a corruption case that was considered a national scandal. It featured a few hundred thousand pesos worth of office supplies that the courts found overpriced; and some people we knew, including the provincial treasurer who belonged to a respected family, lost their jobs. I do not remember if anyone went to jail.

Later, because no one went to jail for corruption over billions of pesos during the Marcos Sr. era, politicians and bureaucrats became bolder and shameless.

Today, corruption cases run to the billions of pesos, and the taxpaying public has become so desensitized by the prevalence of such stories — such as the P10-billion Priority Development Assistance Fund (PDAF) pork barrel scams — that even those who have been accused, convicted and/or detained for some years, such as Juan Ponce Enrile, Jinggoy Estrada, and Bong Revilla, have been elected to the senate. Bong Revilla was acquitted by the Sandiganbayan, but was ordered to return P124 million to the national treasury; meanwhile his chief of staff died in jail. It seems that former Senate President Enrile’s Chief of Staff, who was convicted, has been released from jail before her sentence ends, in consideration of her “suffering” as a senior. The brilliant lawyer Enrile, who defends himself, is keeping a job as President Marcos Junior’s presidential legal counsel while the Supreme Court deliberates on his demand for a “bill of particulars” on his plunder case in relation to the PDAF scams. Although Janet Napoles, the mastermind and main beneficiary of the PDAF scams, is in jail, too much government money can no longer be recovered. And too many politicians and bureaucrats who benefited from such scams are still in office.

Meanwhile, our fishermen and farmers who produce our food continue to remain poor — their children suffering physical stunting and low IQs due to poor nutrition — even as the PDAF scams cheated them of funds meant for inputs, with fake NGOs and ghost LGUs having been used as supposed distributors.

Aside from corruption, there is waste. Let us look at one instance of wasted taxpayer funds, which civic leader and educator-philanthropist Gus Go has blamed for our nation’s undeserved poverty: Government auditors have uncovered a warehouse full of undistributed computers supposedly intended to be given to public school teachers. These have probably turned obsolete, given trends in IT equipment — if they still work at all. That’s so much waste. Yet another handicap for our overworked teachers and poorly educated students.

Another example of possible waste of money: How many deputy speakers are funded from special allocations by our lower house? Deputy speakers are supposed to take over when the Speaker is absent. Last we checked, there were nine deputy speakers. Congress meets for only three days a week. That is 156 days a year! That means each deputy speaker gets to serve for two days per year, assuming the Speaker is absent once every three weeks. That is an expense funded by millions of pesos in taxpayer’s money.

A newer wasteful scandal, a really horrible one, is the Pharmally procurement of medicines and personal safety equipment as a response to the COVID-19 crisis. The Department of Health allowed the Budget department to set aside special funds from which to issue purchase orders. It turns out that the medicines came short of specifications, the quality of the Personal Protective Equipment or PPE was poor, etc., etc. And now we learn that Tony Yang, a brother of former President Rodrigo Duterte’s economic adviser, the Chinese citizen Michael Yang, was allegedly behind the huge bonanza. Making money at the expense of the people’s health during a pandemic is an unforgiveable crime. We cannot let this go. We must identify the culprits and their friends, and they must be penalized for their horrible deeds.

Our economy is growing faster than most countries in the world today. Thanks in large part to the sacrifice of our overseas workers who send dollars home to their families here. They suffer separation from their spouses and children, and too many families are broken from the long separations. They suffer while a few politicians and bureaucrats enjoy their stolen money. This is adding to the injustices that are more and more prevalent.

Today, when we look at surveys on top senatorial bets for next year’s elections, it is saddening to note that the likely winners are not the kind of people who will initiate reforms. Bong Revilla and Jinggoy Estrada are expected to get reelected. And we are not sure that even one of the good guys in the opposition, including Leila de Lima, Kiko Pangilinan, Bam Aquino, and Chel Diokno, will be able to get elected.

We need miracles. We need to pray and work hard and help them overcome the ignorance of the majority of voters. Reporter Nancy Carvajal of the Inquirer was the one who exposed the investigation of the PDAF scams by the National Bureau of Investigation in 2013. Independent journalists can be a big help in monitoring and exposing the misuse of taxpayers’ money. We must also learn to master social and new media to counter misinformation by corrupt officials.

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and Fellow of the Development Academy of the Philippines.

tsabesamis0114@yahoo.com

GCash eyeing overseas listing

By Ashley Erika O. Jose, Reporter

ELECTRONIC WALLET giant GCash is considering listing overseas while it is taking a “wait-and-see” stance on its initial public offering (IPO) locally, a company official said.

“I think with listing overseas, it is a possibility. And again, when the right market conditions are in place,” GCash Chief Marketing Officer Neil Trinidad told reporters on Monday.

The company previously said it was planning an IPO but would wait for a more favorable market.

“GCash’s plan to possibly list overseas… could open the company to a broader pool of investors, particularly those who are more familiar with and eager to invest in emerging market fintech firms,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.

Mr. Arce said a foreign listing such in Hong Kong or the US, could also possibly provide GCash with higher valuations due to its “positioning as a high-growth, high-tech company.”

“This is one of the most eagerly awaited IPOs in the country, but there is no particular reason for GCash to rush it. The market tide has started to turn in their favor so they can afford to wait some more for the best timing,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

Mr. Colet said it is no surprise that GCash is considering listing overseas considering that it would get a higher valuation abroad.

G-Xchange, Inc., which operates GCash, is a wholly owned subsidiary of Globe Fintech Innovations, Inc. (Mynt).

In July, Mynt secured fresh investments from Ayala Corp. and Japan’s Mitsubishi UFJ Financial Group, more than doubling its valuation to $5 billion from $2 billion in the 2021 funding round.

For its planned IPO at the local bourse, Mr. Trinidad said the company is carefully evaluating market conditions.

“We are preparing for the eventual launch. Like any discussion on IPO before, we have always said that we are going to watch for the right market conditions to do it,” Mr. Trinidad said.

“By delaying the IPO, GCash may be attempting to time the market more strategically, waiting for more favorable conditions such as improved investor sentiment, economic stability, or better market valuations,” Globalinks Securities’ Mr. Arce said.

Mr. Arce said that GCash’s decision to go public would be very attractive to investors due to the e-wallet platform’s strong market position, wide user base, and its growth potential in the digital financial space.

GCash services are also available in 16 countries, including the United States, United Kingdom, United Arab Emirates, Italy, Australia, Canada, Germany, and other Asian countries.

Startup makes Philippine classrooms smart using AI

LISA TECH PHILIPPINES FACEBOOK ACCOUNT

A LOCAL technology company is equipping traditional classrooms with artificial intelligence (AI) to help students learn better.

“We give them the chance or the avenue to learn wherever they are, and it levels the playing field,” Elijah John U. Lao, chief executive officer at LISA Tech Philippines, said in an interview.

Mr. Lao, who was an information technology (IT) coordinator at an academy that uses iPads for learning, said having gadgets in school distracts students.  “The students don’t listen in class, they play games and use social media.”

To solve this problem, Mr. Lao started distributing Eschool Pad or ESP, a mobile device management app for schools and parents that merges mobile device, learning management and mobile application management solutions, as well as parent app into a single platform.

ESP is “software that manages and controls devices so students will not be distracted during school hours,” he said.

It allows schools to embrace mobile and cloud solutions to drive e-learning efficiency, according to the app’s website.

Through seamless integration with Apple School Manager, volume-purchased apps can be installed on all devices or a group of devices instantaneously or according to a specific schedule.

When a lockdown spurred by a coronavirus pandemic started in 2020, many schools were unsure how to transition to online classes, Mr. Lao said.

At that time, he became a distributor of Nugens Tech Solutions, a hardware company that helps schools adapt to the “new normal” of hybrid learning.

In 2023, LISA Tech Philippines was launched to provide smart classroom solutions, allowing students to attend online and in-person classes.

In a smart classroom setup, the local tech company offers four types of devices — microphones, 4K AI cameras for the teacher and their students, a smart board and a smart tablet.

Facilitators can receive instant feedback about a student’s understanding of a topic by making the lecture interactive, Mr. Lao said.

Aside from making hybrid learning possible, LISA Tech also aims to address the shortage of teachers in schools.

“Some teachers leave in the middle of the school year. They go abroad or they resign,” Mr. Lao said. With smart classrooms, one teacher can teach simultaneously in different classrooms, reducing manpower costs.

“They can also use that as a training ground to learn from their co-teachers. So, it’s sort of like a training session,” he added.

Last year, 692 public school teachers in Makati underwent “intensive hybrid interactive smart classroom television orientation” in line with the city’s plans to install Internet of Things devices in 400 classrooms.

“The government is into smart campuses and smart classrooms already,” Mr. Lao said. He added that many schools are now interested in adopting new technologies to improve student engagement.

“They’re very keen on transforming because the students also are digital natives,” he said.

In April, Eastern Visayas State University, established in 1907, started its P1.5-billion smart campus project to modernize its facilities. Other local government with similar initiatives are Sarangani and Ilocos Norte. — Almira Louise S. Martinez

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, September 2024

PHILIPPINE MANUFACTURING ACTIVITY continued to expand in September, hitting its highest in two years and outperforming its peers in Southeast Asia, S&P Global said in a report. Read the full story.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, September 2024

Van Goghs attacked again in London hours after Just Stop Oil activists sentenced

NATIONALGALLERY.ORG.UK

LONDON — Three Just Stop Oil activists threw soup at two of Vincent van Gogh’s Sunflowers paintings in London’s National Gallery on Friday, just hours after two other members of the protest group were jailed for doing the same thing in 2022.

The activists threw tomato soup at the Sunflowers owned by the London Gallery — the painting targeted two years ago — and another from the series that is on loan from Philadelphia Museum of Art for a temporary exhibition.

The National Gallery said three people had been arrested and the paintings were unharmed.

The stunt came just a few hours after Phoebe Plummer, 23, and Anna Holland, 22, were sentenced for throwing tins of tomato soup on the London-based artwork in October 2022, before gluing themselves to the wall below the painting.

The soup caused up to £10,000 ($13,385) worth of damage to the frame in 2022, prosecutors said, though the painting — which was behind a protective screen — was unharmed and went back on display later the same day.

Ms. Plummer and Ms. Holland pleaded not guilty but were convicted after a trial at London’s Southwark Crown Court, where Ms. Plummer was sentenced to two years in prison for the criminal damage charge. Ms. Holland was sentenced to 20 months in prison.

Judge Christopher Hehir told Ms. Plummer and Ms. Holland: “You two simply had no right to do what you did to Sunflowers, and your arrogance in thinking otherwise deserves the strongest condemnation.”

Ms. Plummer said she took part in the protests knowing she could be arrested and jailed, saying she was being made a political prisoner, which the judge said was ludicrous and self-indulgent.

“It is offensive to the many people in other parts of the world who are suffering persecution, imprisonment, and sometimes death for their beliefs,” Mr. Hehir said.

Ms. Plummer was also sentenced to an additional three months in prison on Friday, having been separately convicted of the relatively new offence of interfering with the use of key national infrastructure.

Friday’s sentencing comes amid a wider crackdown on protest movements in Britain and across Europe.

Activists from Just Stop Oil have staged a number of eye-catching protests in recent years and five members of the group were jailed in July for at least four years for a conspiracy to block London’s M25 motorway, in the longest sentences ever imposed for a non-violent protest in Britain. — Reuters

National Government outstanding debt

THE NATIONAL GOVERNMENT’S (NG) outstanding debt slipped to P15.55 trillion as of end-August due to a stronger peso and the net repayment of foreign debt, the Bureau of the Treasury (BTr) said. Read the full story.

National Government outstanding debt

EastWest Bank may issue bonds next year

EAST WEST Banking Corp. (EastWest Bank) could issue peso bonds early next year as they expect benchmark interest rates to decline further, its top official said.

“Most likely the first quarter because of the fresh books,” EastWest Bank Chief Executive Officer Jerry G. Ngo told reporters on the sidelines of an event on Monday. “It’s not urgent. It’s really more to match our books so that we can balance the durations. It’s risk management more than anything else, and the prices will probably continue to fall.”

The official earlier said the bank is looking to issue bonds worth up to P10 billion in several tranches and tenors.

Mr. Ngo said they expect further rate cuts from the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.

“Everyone’s very dovish at the moment,” he said, adding that further rate cuts by the BSP would support economic growth.

BSP Governor Eli M. Remolona, Jr. last week said the Monetary Board could slash benchmark interest rates by 50 basis points (bps) more this year by delivering two 25-bp cuts at its next two meetings scheduled for Oct. 16 and Dec. 19.

The central bank began its easing cycle in August, cutting its policy rate for the first time in nearly four years by 25 bps to 6.25% from the over 17-year high of 6.5%.

Meanwhile, Fed Chair Jerome H. Powell indicated on Monday that the US central bank would likely stick with quarter-percentage-point interest rate cuts moving forward and was not “in a hurry” after new data boosted confidence in ongoing economic growth and consumer spending, Reuters reported.

“This is not a committee that feels like it is in a hurry to cut rates quickly,” Mr. Powell told a National Association for Business Economics conference, even though the policy-setting Federal Open Market Committee kicked off its easing cycle with a larger-than-expected half-percentage-point reduction at its Sept. 17-18 meeting.

Mr. Powell said the baseline was currently for two quarter-percentage-point reductions by the end of this year, as indicated in policy makers’ updated economic projections released earlier this month. The Fed’s policy rate is currently set in the 4.75%-5% range.

Mr. Ngo added that EastWest Bank’s asset and profit growth will be driven by an increase in its clients.

“Our balance sheet is growing 15%, mid-teens, overall… Our net income after tax last year grew by around 30%. I think we should be able to do the same this year. The hope is to continue a long-term sustainable growth going forward rather than volatile growth,” he said. “I think steady, solid performance brought about by solid growth from clients is actually very important. The Philippines is a relatively young population; there’s an emerging affluent sector. There’ll be a lot of them as the Philippines becomes an upper middle-income country.”

“Our strategy is really this emerging affluent segment, MSMEs (micro, small and medium enterprises), entrepreneurs, and professionals. And then on the other side is consumer lending. I think that the two sides are growing very well because of the shape of our macroeconomy.”

The bank also expects to get a boost from the reserve ratio reduction that will take effect this month amid its consumer-dominant balance sheet, he said.

“Liquidity-wise, it will benefit us quite a fair bit. It gives us a few months’ worth of bookings, which is good,” Mr. Ngo added.

AUM GROWTH
Meanwhile, the bank expects a 30% compounded annual growth rate in assets under management (AUM) this year, EastWest Bank Senior Executive Vice-President and Financial Markets and Wealth Management Cluster Head Rafael S. Algarra, Jr. said, adding that they hit their P60-billion AUM target for end-2023.

The bank wants to tap the younger generation as more of them join the affluent sector, he said.

“I think there’s risk-on sentiment at the moment… particularly as interest rates are being cut. So, I think there’s going to be a bit more focus on options, particularly on higher-yielding instruments. Then you couple that with what’s going on in the country with the emerging affluent that’s coming up,” Mr. Ngo added.

EastWest Bank is also looking to expand its priority centers to 20 in the next two to three years from the current 12, focusing outside the National Capital Region.

“There’s been an over-concentration on some of the centers like Metro Manila and there is a lot of potential outside. There are a lot of cities or emerging cities coming from all over the country. People are getting richer and more diverse on where they’re getting richer. It’s not like everybody’s just rich in Metro Manila. You can see growth all over the place,” Mr. Ngo said. — A.M.C. Sy with Reuters

Gold’s record run can’t continue forever, right?

FREEPIK

GOLD is what you buy when everything isn’t goldilocks. Inflation, deflation, war, pestilence — gold is a certain anxious state of mind made tangible in a seductive but mostly useless metal. In a weird spin, gold has been enjoying a goldilocks period itself, hitting a new record last week. More than that, it seems almost immune to things that would usually drag it down.

Almost.

Gold’s investment case tends to morph over time but is often framed in relative terms: Gold versus stocks, the dollar, bitcoin, whatever. The one that makes intuitive sense is gold’s relationship with real Treasury yields: When the latter are positive or rising, gold, which yields nothing, should suffer and vice-versa. This relationship broke in 2022.

A multifactor model of gold prices maintained by Longview Economics, a London-based analysis firm, diverged sharply from the market price of gold in 2022 after tracking it closely since 2008. By early 2024, the model indicated a price below $1,000 per ounce whereas gold was then trading at more than $2,000. Similarly, physically backed gold exchange-traded funds began liquidating their stockpiles in earnest in mid-2022, likely taking their cue from the Federal Reserve’s policy tightening. But that barely weighed on prices and then gold actually rallied even as ETF liquidation continued.

Gold was saved by central banks stepping into the breach. Russia’s new invasion of Ukraine in 2022 sparked sanctions by the US and its allies, prompting a wave of gold stockpiling by central banks as a geopolitical hedge and in order to diversify reserves away from the dollar. The amount of gold bought by central banks more than quintupled between the first and third quarter of 2022 and has since remained elevated relative to the prior decade, with China playing a prominent role.

China’s role in the gold rally may not end at the central bank. The country’s economic slowdown, concentrated in an overcapitalized real estate sector, is reflected in household confidence and housing transaction volumes that have been in free fall since 2022. Similarly, Chinese stocks have had a “biblically awful run” since their post-pandemic peak in 2021, as my Bloomberg Opinion colleague John Authers puts it.

Renewed stimulus efforts from Beijing have lifted stocks but may be pushing on a string when it comes to reviving construction activity. Notably, Rory Johnston, who publishes the Commodity Context newsletter, opines that 2024 is likely to mark only the second year in more than three decades where Chinese oil demand actually declines, in part because of weaker construction hitting diesel consumption. As an aside, gold now trades at its highest level relative to oil since early 2021, during the acute phase of the pandemic.

With 70% of Chinese household wealth tied up in real estate, stocks and yields dropping, and cryptocurrencies banned, gold makes for an obvious alternative asset. And there’s evidence that Chinese investors have been buying in the form of an uptick in the local premiums paid for physical gold there for much of the past year or so. The World Gold Council’s “over-the-counter and other” line item for global demand — essentially a plug to reconcile it with supply — has also seen a sustained increase in recent quarters, suggesting unobserved stockpiling of gold has picked up.

The Fed’s pivot to easing and rumblings about a potential US recession being in the offing have added further fuel of late. With geopolitics having allowed gold to skirt the tightening cycle, it looks set to benefit further from its traditional ally, falling real yields.

Yet the US economy looks to be in rude health and expectations for another 200 basis points of Fed easing are baked into market pricing already. Geopolitics remain a wildcard from Kyiv to Beirut, of course, but even these flashpoints are now part of the established backdrop. Central bank buying of gold was still elevated in the first half of the year but had eased somewhat from the frenetic pace of 2022. Meanwhile, Chinese physical gold premiums have flipped to discounts, suggesting the appetite there is sated for now.

The risks on which gold thrives are all still there, to some degree, but gold’s rally appears to have priced them in already and then some. Chris Watling, Longview’s founder and chief executive, observes drily with regards to a gold market that looks overcooked: “Everyone owns it and everyone wants to know what you think of it.” When there’s that much optimism around gold itself, maybe it’s time to worry.

BLOOMBERG OPINION

Aboitiz Land names new CEO

ABOITIZ Land, Inc. has named Rafael Fernandez de Mesa as its new chief executive officer (CEO), effective Jan. 1 next year.

The new appointment marks the return of Aboitiz Land’s leadership to the Aboitiz family, as Mr. Fernandez de Mesa is a fifth-generation family member, the real estate company said in an e-mailed statement on Tuesday.

He will succeed current president and CEO David L. Rafael, who will retire by yearend after leading Aboitiz Land for five years.

Aside from being Aboitiz Land’s CEO, Mr. Fernandez de Mesa will also continue his current responsibilities as the head of economic estates in Aboitiz InfraCapital, Inc., the infrastructure arm of the Aboitiz group.

He holds various directorships within the Aboitiz group, serving on the boards of Aboitiz Land, Aboitiz InfraCapital, and Aboitiz Construction.

Mr. Fernandez de Mesa spent ten of his 15 years with the Aboitiz group at Aboitiz Land, where he served as first vice president of operations from 2016 to 2020. He held leadership roles across various areas, including business development, project management, technical services, construction, property management, and the residential, industrial, and commercial business units.

Before joining the Aboitiz group, Mr. Fernandez de Mesa worked in the banking sector with BBVA and Banco Santander in the United States.

Aboitiz InfraCapital has economic estates in Batangas, Cebu, and Tarlac spanning nearly 2,000 hectares. These host more than 250 global industry leaders and employ over 100,000 Filipinos. The economic estates have also attracted over P155 billion in investments.

Aboitiz Land is the real estate arm of listed conglomerate Aboitiz Equity Ventures, Inc. (AEV).

The conglomerate also has a presence in other segments such as power, banking and financial services, food, construction, and data science and artificial intelligence.

On Tuesday, AEV stocks rose 1.62% or 60 centavos to P37.75 per share. — Revin Mikhael D. Ochave

Funding still a problem for small PHL businesses

FREEPIK

PHILIPPINE micro and small enterprises are having a hard time meeting the requirements from government and private lenders, the Philippine Chamber of Commerce and Industry (PCCI) said on Monday.

PCCI President Enunina V. Mangio said these entrepreneurs often lack the capacity to produce documents showing their capacity to pay.

“Our microenterprises don’t have financial statements,” she told a news briefing. “They don’t have the documents needed by the banks and Small Business Corp. (SB Corp.) to avail themselves of the financial programs.”

Even small corporations encounter the same problem, she pointed out. Once banks see that they have a negative or very low net income, their loan application will get rejected, she added.

Ms. Mangio said that some loan applications are being shut down without them being able to share how they plan to expand their business.

SB Corp. is an attached agency of the Department of Trade and Industry that provides financing to micro, small, and medium enterprises (MSME) in the Philippines.

On its website, it lists government-issued IDs and permits, proof of sales, proof of value of fixed assets, and financial statements filed with the Bureau of Internal Revenue showing positive income in the past years as requirements for first-time borrowers.

This presents a problem since most microenterprises are in the informal sector, PCCI Vice-President for International Affairs Jude Aguilar told the same briefing.

“We all agree that 99.5% of our businesses are MSMEs. Out of the MSMEs, 90.5% are microenterprises, 8.6% are small and 0.4% are medium-sized,” he pointed out. Of all the country’s microenterprises, more than 80% are in the informal sector, he added.

He said there is a push from the Trade department to encourage microenterprises to move to the formal sector.

“Because when they do that, they will have access to financing, and they will be able to apply for benefits for their employees, but of course, that is expensive,” he said.

“And how do you get financing when you are in the informal sector? Maybe they can, but it will have larger interest rates,” he added.

Trade Undersecretary Blesila A. Lantayona said the agency seeks to create more focused training programs to help MSMEs learn how to prepare financial statements.

“Our MSMEs should be trained also, and that is where we can have collaboration on the ground,” she said. “They have to be trained on how to prepare simple financial statements.” — Justine Irish D. Tabile

How PSEi member stocks performed — October 1, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, October 1, 2024.