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ING rolls out all-digital platform

ING BANK N.V.-Manila has ventured into the retail segment in the country by launching an all-digital banking service.
In a statement sent to reporters on Monday, the bank said it has rolled out its all-digital savings bank in the Philippines via mobile phone application.
ING’s digital platform allows customers to open a savings account through their mobile phones. The savings account does not require any minimum amount and maintaining balance.
Clients can also put money into the bank account through mobile check deposit and transfer money for free through PESONet, an automated clearing house initiated by the central bank.
“Globally, ING is known for pioneering ‘branchless banking’ since 1997 and is positioned as a leading digital bank in Europe and Australia. We are very excited that our expertise in digital banking is now also available to Filipino consumers,” said Hans B. Sicat, ING Bank country manager for the Philippines.
He added that the Philippines is the “most digital-savvy country in Southeast Asia” and that more Filipinos are looking for convenient ways to bank, based on the bank’s market research.
“We believe that Filipinos’ receptiveness to digital banking will continue to grow and the roll-out of initiatives under the National Retail Payment System would fuel this growth.”
“As the first all-digital bank in the Philippines, ING is in a sweet spot to champion digitalization in the banking sector and offer customers the most convenient way to bank,” Mr. Sicat added.
Late last month, Malaysian financial giant CIMB Bank formally launched its banking operations in the country through an all-digital and mobile-first retail bank.
ING Bank is a global financial firm offering retail and wholesale banking services in over 40 countries. It has been operating in the Philippines as an wholesale lender since 1990. — KANV

Getz focuses on health care, medtech

GETZ Healthcare Philippines is focusing on growing its health care business in the country this year, after divesting from the fast-moving consumer goods (FMCG) business.
“Health care around the region, in ASEAN, and in the countries we are in, is growing very very well and we believe we can add more value to the market where we are working,” James Sinkins, Getz Healthcare chief executive officer, said during a press briefing in Ortigas, Pasig, on Monday.
Formerly Getz Bros. Philippines, the company is now focusing on medtech marketing and promotion, as well as health care and pharmaceutical sales distribution.
Getz Healthcare Vice-President for Sales and Marketing Pete D. Miranda, Jr. said that the company is investing a total of $180 million this year for its businesses in different countries.
Aside from the Philippines, Getz Healthcare operates in Singapore, Malaysia, Taiwan, Australia and New Zealand, Pakistan, Thailand, Hong Kong and Macau, and Vietnam.
“The total investment is $180 million. We plan to grow threefolds in the next five years,” Mr. Miranda said.
Ian Grist, Getz general manager, said the company is about to open a distribution center in Taguig in March.
“We are in the process of commissioning new distribution center which is health care-centric…This is quite different from FMCG in terms of temperature control and quality assurance,” Mr. Grist said.
“We are not new to the Philippines and we’re not new to health care. We are positioned to really support the development of health care in the Philippines,” Mr. Grist said.
Getz Healthcare provides end-to-end services ranging from sales, marketing, logistics, regulatory, technical support to quality assurance.
“We have a team who carry medical devices. We do promotions and the hospitals and at the same time, we do logistics, warehousing, delivery, end-to-end, starting from regulatory then if the products are approved by the FDA (Food and Drug Administration), we can already market it,” Mr. Miranda said. — Reicelene Joy N. Ignacio

P.A. Properties expands San Fernando project

P.A. ALVAREZ Properties & Development Corp. (P.A. Properties) recently broke ground for Phase 3 of its 33-hectare residential development in San Fernando, Pampanga.
In a statement, the real estate developer said Trillium Park is a 9-hectare residential community within Bridgepointe Place.
There are 158 bungalow-type housing units available. P.A. Properties offers two model houses — Iris on a 60-square meter (sq.m.) lot, and Natalya on a 96 sq.m. lot.
Both houses will have two bedrooms, one toilet and bath, a kitchen, living area and dining areas, as well as a provision for carport.
Bridgepointe Place is a 33-hectare development which already has two communities — Sandsfield, a 14-hectare Asian-inspired community and Midori, a 10-hectare Japanese-themed community.
The development is located in Brgy. Del Rosario, San Fernando, Pampanga. It can be easily accessed through North Luzon Expressway (NLEX) through San Fernando Exit.
Nearby commercial and industrial establishments include Universal Robina Corp. (URC), Pepsi-Cola Distributors, Asia Brewery Inc., Del Monte Philippines, and the Coca-Cola Plant.
Academic institutions near the community are Our Lady of Fatima University Pampanga, New Era University-Pampanga Branch, and St. Scholastica’s Academy.
Bridgepointe Place is P.A. Properties’ first project in Pampanga, and the third one in the Northern Luzon. — Vincent Mariel P. Galang

How strong is the relationship between retail price of rice and headline inflation?

How strong is the relationship between retail price of rice and headline inflation?

How PSEi member stocks performed — February 18, 2019

Here’s a quick glance at how PSEi stocks fared on Monday, February 18, 2019.

 
Philippine Stock Exchange’s most active stocks by value turnover — February 18, 2019.

SEIPI sees 2019 electronics export growth of 3%

THE Semiconductor and Electronics Industries in the Philippines Foundations, Inc. (SEIPI) said it set its 2019 export growth target at 3%, which is higher than its assumption for growth in the global industry of 2% and slightly higher than the industry’s growth in 2018.
In a phone interview on Monday, SEIPI President Danilo C. Lachica said the “3% approved by the Board is higher than the 2% global outlook” for the semiconductor industry.
The group is counting on the technological upgrade cycle in various markets, such as automotive, consumer electronics and office equipment.
“The bulk of the exports is semiconductors so that’s where (we’re)seeing the growth,” Mr. Lachica added.
The group also said 2018 was still a “record-breaker” that outstripped the midyear estimate issued by the Philippine Statistics Authority (PSA).
The country’s electronic exports grew in 2018, although at a much slower pace than the at least 11% annual growth recorded in 2017 and below industry’s full-year target.
Data from the PSA showed that 2018 electronics shipments totaled $37.57 billion, up 2.83%.
“Nonetheless, this is the second straight year for record electronics exports,” SEIPI said in a report on Monday.
Electronics accounted for around 57.2% of 2018 total merchandise exports, which fell 1.8% to $67.488 billion. Economists have attributed the weak exports mainly to weak global demand as a result of trade tensions between the United States and China.
Of the 2018 electronics exports, 73.76% consisted of semiconductor components/devices worth $27.71 billion.
The next biggest segment was electronic data processing with $6.25 billion worth of exports and the “other” electronics segment which accounted for $2.87 billion.
These were followed by office equipment at $817.11 million; telecommunication $591.16 million; consumer electronics $588.96 million;communication radar $560.44 million; automotive electronics $113.07 million; and medical/industrial instrumentation $56.09 million.
Hong Kong was the industry’s biggest market in 2018, accounting for 21.15% of electronics exports. Next were the United States and China at 13.61% and 13.17% respectively. — Janina C. Lim

Senate backs franchise for Leviste solar firm, limited to 13 provinces

THE SENATE committees on public services and energy have recommended the approval of a “non-exclusive” franchise for Solar Para sa Bayan Corp. (SPSBC) subject to the adoption of amendments from the chamber.
In Committee Report No. 659 dated Feb. 7, the committees proposed amendments in House Bill No. 8179 for the SPSBC to be granted a “nonexclusive franchise” to operate distributed energy resources and microgrids using Solar PV Technology or a hybrid of it in “remote and unviable, unserved or underserved” areas covering 13 provinces.
The provinces named under the amendments are Aurora, Batangas, Bohol, Cagayan, Camiguin, Compostela Valley, Davao Oriental, Isabela, Masbate, Misamis Occidental, Occidental Mindoro, Palawan and Tawi-Tawi. The Department of Energy (DoE) is tasked to determine the areas to be served.
The bill defines remote and unviable areas as places where “immediate extension of distribution lines is not economically feasible due to the distance from the nearest facilities.” Unserved areas are places with no electricity access, while underserved areas are places with less than 24 hours’ power daily.
In the original House Bill No. 8179, SPSBC was allowed to provide electric power to customers in areas to be determined by the DoE, which must include unserved and underserved areas.
The SPSBC is an energy distribution company founded by Solar Philippines President Leandro L. Leviste, the son of Senator Loren B. Legarda. Several groups have opposed the granting of the company’s franchise due to possible conflicts with Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA law).
The Coalition for Rural Electrification or CoRE, a group composed of at least six entities in the power sector, is planning to challenge the franchise of SPSBC before the courts.
Under the bill, the company is also obligated to charge reasonable power rates as approved by the Energy Regulatory Commission (ERC). It is also directed to create employment opportunities and on-the-job training in their franchise areas.
The Senate committees also inserted amendments clarifying that the proposed franchise will not revoke existing franchises. They also proposed a provision stating that the franchise will “not affect the duty of DoE to promote private sector participation in the electrification of remove and unviable, unserved, and underserved areas.”
Other qualified third party microgrids may also participate “in any competitiveness selection to operate in any remove and unviable, unserved, and undeserved, as determined by DoE.”
The DoE, in consultation with ERC and other stakeholders, is directed to provide rules and regulations to operationalize the franchise “without compromising grid stability, the rate effect on consumers, and other technical and financial considerations” within the framework of the EPIRA law.
The committee report was signed by the chairpersons of the Senate committee on public services and energy, Senators Grace S. Poe-Llamanzares and Sherwin T. Gatchalian, respectively. It was also signed by 10 members of the committees and the four Senate leaders as ex-officio members.
Senator Paolo Benigno A. Aquino IV noted in the committee report that he would propose amendments “with regard to scope and any provisions that may be violative of the Phil(ippine) Competition Law.” Senate Minority Leader Franklin M. Drilon wrote that he has “serious reservations on constitutional issues” with the franchise. — Camille A. Aguinaldo

Truckers, brokers call for urgent action on container re-export

TRUCKERS and customs brokers called on the government to enforce the rules on re-exporting empty containers as an urgent measure to address congestion in the Port of Manila, with stakeholders claiming that port utilization is already at 100%.
The Alliance of Philippine Customs Brokers and Trucking Associations (APBTA) held a news conference on Monday over the proposed joint administrative order (JAO) by the Department of Finance (DoF), Department of Transportation (DoTr), and the Department of Trade and Industry (DTI), which they said may be helpful in the long term but will not immediately address current port congestion issues.
The JAO, due to be issued later this month, is considered a “long term” solution by regulating charges imposed by international shipping lines, the APBTA said, adding that urgent measures are needed to ensure the free movement of trade goods.
“The JAO addresses long-term issues. For the short term what are the solutions? Actually our ports are now 100% utilized… if we wait for the JAO, it will take time,” said Professional Customs Brokers’ Association of the Phils. Inc. (PCBAPI) President Rey T. Soliman, who also chairs the Port Truckers, Customs Brokers Consumers Cooperative (PTCBCC), at the briefing on Monday.
Mr. Soliman said the government should revisit Bureau of Customs (BoC) Customs Administrative Order (CAO) 01-2015, which allows for empty foreign containers to stay in port without being subjected to taxes or duties if they are re-exported within 90 days. This can serve as an immediate solution to port congestion before the government release the JAO.
“We suggest since the rules call for it, we need to re-export empty containers which are in the ports. This should be a priority to decongest the port… until the situation normalizes. Then implement the JAO,” he said.
In an interview with BusinessWorld on Monday, Inland Haulers and Truckers Association (INHTA) President Teddy Gervacio said that according to the draft JAO which the association has seen, some of the provisions are already laws.
“The BoC still has not implemented them. So the question remains, when will this be signed and when will this be implemented correctly,” Mr. Gervacio said.
Abraham G. Rebao, Vice President for Transport at the Aduana Business Club (ABC), said he does not understand why Customs Chief Rey Leonardo B. Guerrero cannot implement CAO 01-2015.
“It’s only Bureau of Customs Commissioner Rey Guerrero who has the authority to implement that. We are amazed on why it is not being implemented. What is behind it? That is the only way to drastically decongest the port and container depot,” Mr. Rebao said.
Mr. Guerrero was unable to comment at deadline time.
Last month, the DTI said in a statement that under the JAO, shipping lines will not be allowed to impose fees in the Philippines but will bring container depot charges in line with international fees in order to deter the abandonment of empty containers in container yards.
The BoC and the Philippine Ports Authority (PPA) are also scheduled to release a Joint Memorandum Circular (JMC)this month that will seek to bring back the utilization rate of container depots in Manila to 70%. — Gillian M. Cortez

ERC reorganization bill hurdles House on second reading

A BILL reorganizing the Energy Regulatory Commission and granting it some fiscal autonomy made it past second reading at the House of Representatives.
House Bill No. 9053, or the “Energy Regulatory Commission Act,” which was passed via voice vote, calls for the Commission to be “exclusively responsible for the regulation of the electric power and energy industry.”
The measure will also grant the ERC limited fiscal autonomy, which means the regulatory body may retain 30% of its revenue from its collection of fees, licenses, and fines among other charges.
Of this share, 10% will be used to augment ERC’s capital outlay (CO) budget, 45% for the maintenance and other operating expenses (MOOE) budget and the remaining 45% for the personnel service (PS) budget
The bill also calls for the ERC to allocate 15% of its total annual approved budget for the training and upgrading of the skills of its personnel.
The bill is geared towards “promoting competition in the power and energy sector, and provide better protection to consumers,” as stated in the Committee Report.
Among others, the bill proposed to prescribe additional qualifications of the ERC Chairman and its members, and reorganize the Commission by creating additional offices, six line services and four oversight committees.
Further, the bill will prohibit Commissioners and their relatives from holding any interest, either as investor, stockholder, officer or director, in any company engaged in electricity generation, transmission, or distribution to the fourth civil degree of consanguinity. — Charmaine A. Tadalan

Casino license ban stays pending key PAGCOR meeting

MALACAÑANG on Monday said President Rodrigo R. Duterte has not changed his position yet on the moratorium against the licensing of new casinos, pending a meeting with the chief gaming regulator who could seek a relaxation of the ban.
“Until such time as he makes a formal statement on the matter, I think whatever his former position was, subsists,” the President’s Spokesperson Salvador S. Panelo said in a briefing when asked about the planned meeting of Philippine Amusement and Gaming Corp. (PAGCOR) Chairman Andrea D. Domingo with Mr. Duterte.
According to a report by Bloomberg on Jan. 30, Ms. Domingo wanted to meet the President and that she “hoped” that the President could be “persuaded to implement a selective ban” on the issuance of new casino licenses.
Asked for an update, Mr. Panelo said: “What I know is, (Ms. Domingo) wants a meeting. But I have not heard of any such meeting. I have no info.”
Ms. Domingo and PAGCOR President and Chief Operating Officer Alfredo C. Lim were asked to comment but had yet to respond at deadline time.
In a phone message to BusinessWorld, PAGCOR Corporate Communications Assistant Vice- President Carmelita Valdez said: “We are waiting for update from the chairman.”
Also on Monday, Malacañang said it was supportive of the Bureau of Internal Revenue’s (BIR) move to require the registration of Philippine-based Offshore Gaming Operations (POGOs).
“That’s a good measure to determine exactly how many Chinese nationals are here in violation of our laws. I think the BIR has made a good suggestion,” Mr. Panelo said.
Asked if the government is concerned about the number of illegal Chinese workers, he said: “We’re not exactly alarmed, but the BIR wants to determine their numbers because that’s an important issue for the declaration of income, so it can collect the correct amount of corporate tax.”
In its statement Sunday, the Department of Finance quoted BIR Deputy Commissioner Arnel SD. Guballa as saying: “We want to trace these Chinese nationals employed by these gaming operators. They allowed us to join the task force because we are seeking data from (the Bureau of) Immigration and The Department of Labor and Employment on the list of these foreign nationals.” — Arjay L. Balinbin

Price manipulation seen as ‘pitfall’ under new rice regime

THE removal of the National Food Authority’s (NFA) ability to intervene in the rice market may encourage further cartelization in the industry to manipulate prices of the key staple, a former Agriculture Secretary said.
“The pitfall (of rice tariffication) is that it removes the government’s ability to intervene to stabilize prices. Either the price of rice is too low (to be attractive to farmers) or the scenario could also be cartelizing to raise (retail) prices,” former Secretary William D. Dar said in a phone interview on Monday.
Mr. Dar is currently the president of the Inang Lupa Movement, Inc and previously a director-general of the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT).
Mr. Dar, however, said that the public’s best hope with the Rice Tariffication Law’s passage is the minimum P10-billion annual allocation to a Rice Competitiveness Enhancement Fund (RCEF), which will be given for six years and which he described as of great help to farmers.
“It is now a law, so let’s make the best out of it. P10 billion is a welcome development to make Filipino farmers very productive, competitive, and I hope by the end of the six-year period, they can compete with other farmers globally,” Mr. Dar said.
Mr. Dar noted that on the other hand, the fund could come under the control of corrupt government officials.
“We should be very vigilant, and hope that the government will be very transparent in implementing the P10 billion a year competitiveness enhancement fund. The pitfall of that is if it is corrupted,” Mr. Dar said.
The law’s passage is expected to diminish the area devoted to rice production, pushing farmers to climb the value chain to higher-value crops, Mr. Dar said.
“Your area for rice production will be decreased, but the other side is that the farmers can be given the right training (to go into) high-value agriculture. The rice production areas that are not suitable for rice are better converted to fruit and vegetable farms that can grow in two to three months, such as watermelon,” Mr. Dar said.
“These are mostly rented upland areas. Those are not suitable for rice production,” Mr. Dar added.
Asked when the impact of the law might be felt, Mr. Dar said, “There will be an initial reading by the end of this year.”
Late Sunday, Agriculture Secretary Emmanuel F. Piñol said that the rice tariffication law is expected to initially depress prices for palay, or unmilled rice, but the market will adjust.
“Initially, there will be a drop in the buying price of palay but the farmers are expected to adjust by increasing productivity with funds coming from tariffication,” Mr. Piñol said in a social media post.
“Properly used, the RCEF could actually increase the productivity of Filipino rice farmers because farm mechanization alone will increase production efficiency and reduce post-harvest losses estimated at 16% of total production,” Mr. Piñol said.
The P10 billion is to be allocated as follows: P5 billion for farm mechanization, P3 billion for high-yielding seed, P1 billion for farm credit and P1 billion for technical skills training.
“The P3 billion intended for high-yielding seed developed by IRRI and PhilRice is also expected to increase average farm yields by at least two metric tons in (each of the) one million hectares (to be planted to hybrid) in the first year of implementation,” according to Mr. Piñol.
“The P1-billion credit facility will also allow farmers to buy fertilizer and farm inputs thus increasing their productivity while the P1 billion for technical skills training is expected to improve their farming technology,” Mr. Piñol added.
Mr. Piñol said that he has reservations about the removal of the NFA’s importation role but remains optimistic about the future of the agriculture sector.
“I have always been an optimist and I look at the advantages which Philippine agriculture could get from these twin measures (removal of quantitative restrictions and rice tariffication) rather than cry over spilled milk. Of course, I have to admit that I had my reservations on the provisions of the law which takes out the regulatory powers of the NFA but these are now settled with the signing of the bill into law,” Mr. Piñol said.
The Department of Finance (DoF) said on Monday that the rice tariffication will be implemented starting March 3, also noting that the NFA Council approved a motion instructing the NFA to submit a restructuring plan within 30 days instead of the initial proposal of 180 days.
“Our objective in liberalizing rice imports is to bring down the cost of the staple. Our (cost) is 50% higher than the others including Singapore which does not produce rice. Will it take us 180 days to effect a reduction in the cost of living of the people?” Finance Secretary Carlos G. Dominguez III said in a statement. — Reicelene Joy N. Ignacio

Road operator NLEx Corp. applies for toll adjustment

THE TOLL Regulatory Board (TRB) said Monday that NLEx Corp., operator of the North Luzon Expressway (NLEx), applied to adjust toll rates.
In a bulletin published in a newspaper on Monday, the TRB said NLEx Corp. sought in a Jan. 22 petition to implement an add-on rate for all vehicle types using the toll road. According to the petition, the adjusted rates should have been effective starting Feb. 15. The publication of the petition in a newspaper triggers the start of the 90-day period during which the TRB welcomes any filing from NLEx users to review the concessionaire’s request, after which it can move to ruling on NLEx Corp.’s petition.
“Any interested expressway user shall have the right to file, within a period of ninety (90) days from the date of the publication of this Notice, a petition for review with the TRB,” it said.
The authorized toll rates in NLEx are currently P40.6 for Class 1 vehicles, P101.5 for Class 2 and P121.8 for Class 3. The adjusted toll rates would raise these fees to P47.4 for Class 1 vehicles, P118.6 for Class 2 and P142.3 for Class 3.
“NLEx Corp. most respectfully prays that this Honorable Board immediately issue an order ex parte granting NLEx Corp.’s prayer for provisional relief, i.e. an Order implementing the previously approved adjustment to the Authorized Toll Rates… and authorizing NLEx Corp. to collect the same,” according to the petition.
The concessionaire said the add-on toll is meant to help it recoup investments in Segments 9 and 10 of NLEx of P11.9 billion as of November 2014.
In August 2018, NLEx Corp. said it was willing to drop its arbitration case against the Department of Transportation (DoTr) over the long-overdue toll fee adjustments in the expressway.
NLEx was seeking compensation of P3 billion for adjustments originally due in January 2013 and January 2015. It also included some P877 million in what it claimed was the government’s failure to act on toll hike petitions for the Manila-Cavite Expressway (CAVITEx) in 2012, 2014 and 2015.
Its estimate of he claims as of June 2017 was P7.5 billion.
NLEx Corp. is a unit of Metro Pacific Tollways Corp., the tollways arm of Metro Pacific Investments Corp. (MPIC).
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

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