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PHL, Cambodia central banks seek to enhance cooperation

THE BANGKO SENTRAL ng Pilipinas (BSP) and National Bank of Cambodia (NBC) have partnered to boost both countries’ cooperation on central banking and payment connectivity, among other areas.

Both regulators signed a memorandum of understanding (MoU) on Monday to “foster closer cooperation between the two central banks,” the BSP said in a statement on Tuesday.

“The MoU signifies the willingness and commitment of both the BSP and NBC to provide a clear framework for the facilitation of bilateral ties and the enhancement of cooperation between the two central banks which have had a history of collaboration in both bilateral and regional fronts,” it added.

The BSP and NBC also held a high-level bilateral meeting to discuss latest macroeconomic and financial developments.

The central banks are eyeing further cooperation on the areas of payment system developments, artificial intelligence, cybersecurity, and sustainable finance. The agreement is also seen to “encourage more collaboration particularly in the areas of central banking, payment connectivity and innovation, digital financial innovation, banking supervision, human resource development, and other areas of mutual interest,” the BSP added.

The Philippine central bank has been ramping up its initiatives to enhance cross-border payments with other countries.

The BSP last month said the blueprint for instant cross-border payments under Project Nexus has been completed, which would pave the way for its live implementation

In March 2023, the BSP and four other central banks in the region announced they will connect their domestic instant payment systems through the Bank for International Settlements’ (BIS) Project Nexus.

The project has the capacity to connect 1.7 billion people globally, the BIS earlier said. — L.M.J.C. Jocson

Albertsons sued for allegedly copying startup’s software

ALBERTSONS COS. was sued by an e-commerce software maker that claims the grocery chain conducted trials with its product for three years only to steal its trade secrets to build its own system.

The Seattle startup Replenium, Inc. said in the lawsuit that it entered into an agreement with Albertsons in 2020 to deploy software that lets online shoppers subscribe to have their frequently purchased items automatically replenished. Albertsons pledged to begin trials using the software in a limited number of locations and then roll out the service at more than 2,000 stores in more than 30 states, according to the lawsuit, filed on Monday in federal court in Seattle.

Replenium claims it negotiated in good faith with Albertsons, sharing details of its software so it could be integrated into the grocery chain’s systems and deployed nationally, with payments to Replenium based on revenue. But Albertsons abruptly ended the relationship in November, the startup alleges.

“Albertsons’ calculated maneuver cost Replenium millions of dollars that it invested in implementation and operation, tens of millions of dollars in anticipated revenue … and a massive loss in Replenium’s enterprise value,” the software company claims, saying the chain “acted in bad faith by repeatedly squeezing and ultimately discarding Replenium.”

Replenium accuses Albertsons of misappropriating trade secrets, breach of contract and unjust enrichment, and is seeking an unspecified monetary award to be determined at trial.

Through a spokesperson, Albertsons declined to comment on the suit.

Founded in 2015, Replenium has raised $18 million and has 22 employees, according to Pitchbook. Chief Executive Officer Tom Furphy previously worked for Amazon.com, Inc., as did Replenium Chief Technical Officer Umair Bashir.

Albertsons is the second-biggest grocery chain in the US. It is in a merger deal with Kroger Co. currently being scrutinized by regulators.

The case is Replenium, Inc. v. Albertsons Companies, Inc., 24-cv-01281, US District Court, Western District of Washington (Seattle). — Bloomberg News

How PSEi member stocks performed — August 20, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, August 20, 2024.

Real GDP per person employed in the Philippines (as of Q2 2024)

The country’s labor productivity — as measured by gross domestic product (GDP) per person employed — picked up by 4.6% year on year to P112,542 in the second quarter of the year. This was a reversal from the 0.6% decline in the April-to-June period last year but slower than the 6.3% growth in the first quarter of 2024.

Real GDP per person employed in the Philippines (as of Q2 2024)

PSE index climbs to 6,900 level on rate cut hopes

BW FILE PHOTO

THE BELLWETHER INDEX climbed for a third straight day on Tuesday to end above the 6,900 mark on expectations of continued monetary policy easing by the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) rose by 0.79% or 54.89 points to finish at 6,944.76 on Tuesday, while the broader all shares index climbed by 0.61% or 22.64 points to end at 3,729.09.

This was the PSEi’s highest close in over four months or since it ended at 6,960.43 on April 2.

The index also breached the 7,000 level intraday, logging a high of 7,005.27 during the session.

“The local market climbed further this Tuesday… Expectations that the BSP will continue with its monetary policy easing moving forward, and positive cues from Wall Street continued to lift sentiment,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Philippine shares broke into the 6,900 level and now is just a stone’s throw away from the 7,000 level, with investors continuing to buy into strong earnings and the recent 25-basis-point (bp) cut…,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP on Thursday cut benchmark interest rates for the first time in almost four years amid an improving inflation and economic outlook, with its governor signaling at least one more reduction before the end of the year.

The Monetary Board reduced its policy rate by 25 bps to 6.25%, as expected by nine out of 16 analysts surveyed in a BusinessWorld poll.

BSP Governor Eli M. Remolona, Jr. said at a briefing that they could cut rates by another 25 bps within the year. The Monetary Board’s remaining policy-setting meetings this year are scheduled for Oct. 17 and Dec. 19.

Analysts expect the BSP’s easing cycle to continue until next year amid stabilizing inflation, with at least 100 bps in cuts seen in 2025.

“Investors also cheered the balance of payment (BoP) surplus posted by the Philippines in July and the strengthening of the local currency,” Mr. Tantiangco added.

The country’s BoP position swung to a $62-million surplus in July from a $53-million deficit in the same period last year, BSP data showed.

Meanwhile, the peso closed at an over four-month high of P56.55 per dollar on Tuesday, up by nine centavos from Monday’s finish.

Sectoral indices were split. Financials rose by 2.54% or 51.84 points to 2,091.92; services increased by 2.13% or 46.57 points to 2,227.19; and holding firms went up by 0.22% or 13.12 points to 5,853.17. Meanwhile, industrials fell by 0.83% or 77.13 points to 9,194.85; property dropped by 0.83% or 23.39 points to 2,765.09; and mining and oil went down by 0.25% or 21.41 points to 8,236.19.

Value turnover rose to P8.09 billion on Tuesday with 673.38 million issues changing hands from the P7.64 billion with 625.66 million shares traded on Monday.

Decliners outnumbered advancers, 120 versus 89, while 51 names closed unchanged.

Net foreign buying surged to P2.06 billion on Tuesday from P1.41 billion on Monday. — RMDO

DBM sees no diversion from unfunded 2025 budget items

BW FILE PHOTO

THE budget will govern where funding raised for unprogrammed appropriations will be used, with no wiggle room to steer the funds towards other purposes, the Department of Budget and Management (DBM) said.

“We stick to the very nature of unprogrammed appropriations — (they are a) standby fund,” Budget Secretary Amenah F. Pangandaman said on the sidelines of a hearing.

“The bulk of the unprogrammed appropriations is for foreign-assisted (projects) subject to approval of the NEDA (National Economic and Development Authority) Board.”

Next year’s P6.352-trillion national budget contains as-yet unfunded items of P158.67 billion, 78.31% lower than this year’s P731 billion. The government has not yet sourced the funds for these items and can resort to loans, new taxes, or stronger-than-expected revenue collections.

The standby funds include P78.36 billion for the Strengthening Assistance for Government Infrastructure and Social Programs, P26.27 billion in budgetary support to government-owned and -controlled corporations, and P25.46 billion for support to foreign-assisted projects.

Next year’s unprogrammed appropriations also include half of the total allocation for the Revised Armed Forces of the Philippines Modernization Program at P25 billion.

“I think there’s no agreement yet about their other equipment and projects” of the AFP, Ms. Pangandaman said.

Also to be funded on an as-available basis are the Marawi Siege Victims Compensation Program (P2 billion), the Risk Management Program (P1 billion), Fiscal Support Arrears for the Comprehensive Automotive Resurgence Strategy Program (P364.1 million), and the service development fee refund for the right to develop the Nampeidai property in Tokyo (P210.58 million).

The unprogrammed appropriations have been reduced after the bulk of government projects were classified as backed by programmed funds, Ms. Pangandaman has said.

The status of monthly releases charged against unprogrammed appropriations will be posted on the DBM’s website, according to the 2025 National Expenditure Plan.

Zy-za Nadine M. Suzara, public budget analyst at the Institute for Leadership, Empowerment, and Democracy, said legislators must ensure that unprogrammed appropriations for next year do not breach the budget ceiling. 

“Congress is allowed to move things around in the proposed version of the budget for as long as they do not violate the constitutional prohibition on increasing the total budget ceiling. The increase in the unprogrammed appropriations for the past three fiscal years since the 2022 GAA (General Appropriations Act) was passed had the effect of increasing the total budget ceiling,” she said via Viber.

In January, minority legislators questioned before the Supreme Court the constitutionality of the P450 billion in unprogrammed appropriations inserted by the bicameral conference committee shortly before the passage of this year’s P5.768-trillion budget.

Meanwhile, Ms. Pangandaman said the P89.9 billion in requested fund transfers from the Philippine Health Insurance Corp. (PhilHealth), will be used for social services and infrastructure, and not necessarily for health-related projects. — Beatriz Marie D. Cruz

Zero-tariff EV imports bill hurdles committee

REUTERS

A HOUSE of Representatives committee approved on Tuesday a bill proposing to exempt imported electric vehicles (EVs) from tariffs, in order to promote wider adoption.

The measure which passed the House ways and means committee would grant tariff-free treatment on EV and charging-station equipment imports until 2028.

Imported completely built units of EVs “shall be subject to a tariff rate of zero percent for a period of five years,” according to the text of the unnumbered substitute bill.

President Ferdinand R. Marcos, Jr. last year signed Executive Order (EO) No. 12, which temporarily removed tariffs on electric vehicles and their components for five years.

The tariff-free treatment was expanded in May by the National Economic and Development Authority Board, which conferred the tariff exemption to electric motorcycles, tricycles, and hybrid electric vehicles.

“(Electric vehicles) will have zero tariff until 2028, in line with EO No. 12. We are just making it perfect by making it into law,” Albay Rep. Jose Ma. Clemente S. Salceda told BusinessWorld.

It also clarifies the definition of an EV, he added, noting the absence of a government specification. “(The measure) defines what an electric vehicle is… right now we don’t know if an electric vehicle is two-wheeled, three-wheeled, or four-wheeled.”

According to the bill, any vehicle with at least one electric motor is classified as an electric vehicle.

The Metropolitan Manila Development Authority (MMDA) in February banned light electric vehicles, such as electric bikes and tricycles, from plying national roads in Metro Manila, citing safety concerns. 

“What we’re trying to say is that many electric vehicles are currently being charged as if they were ordinary cars, when they are not even allowed to use the same routes as regular cars,” Mr. Salceda said.

“How can we promote electric vehicles if they are not allowed to use regular routes?” he added.

Electric vehicles are currently not allowed to traverse Epifanio de los Santos Avenue (EDSA), South Luzon Expressway (SLEX), and Katipunan Avenue, among other major Metro Manila thoroughfares, according to MMDA. — Kenneth Christiane L. Basilio

PCCI ‘wish list’ for DepEd includes amending Enhanced Education Act

PHILIPPINE STAR/ MIGUEL DE GUZMAN

THE Philippine Chamber of Commerce and Industry (PCCI) urged the Department of Education (DepEd) to work on better aligning the curriculum with industry demand to raise the competitiveness of the workforce.

It also recommended amendments to Republic Act (RA) No. 10533, or the Enhanced Education Act, with the aim of harmonizing the higher education curriculum to be more attuned to workplace needs.

RA 10533 expanded the basic education program by two years to include at least one year of kindergarten, six years of elementary education, and six years of secondary education.

The group also recommended the enhancement of Science, Technology, Engineering, and Mathematics programs, strengthening partnerships between schools and businesses to foster on-the-job training, and to promote micro-credentialing.

PCCI Human Resource Development Foundation, Inc. President Alberto Fenix, Jr. said the organization is proposing more work immersion components and to include basic higher education subjects in senior high school (SHS).

“Part of our recommendation to the new Secretary (former Senator Juan Edgardo M. Angara) is to have more work immersion not only in the technical-vocational-livelihood track, but even in the academic track, especially those in business,” Mr. Fenix told BusinessWorld by phone.

“A lot of the academic subjects in the first two years (of tertiary education) should be tackled in SHS, like Mathematics, Literature, and English,” he added.

He noted the shortage of teachers in SHS qualified to offer such university-level classes.

“On the other end, we were hoping that the degree courses would now take three years rather than four or five,” he added.

The PCCI also urged the government to invest in teacher training, digital learning platforms, and infrastructure, especially in underserved and rural areas.

“These measures are essential to creating a pipeline of talent that will meet the evolving needs of industries and drive long-term economic growth,” it added. — Justine Irish D. Tabile

BIMP-EAGA deemed critical for kick-starting halal export trade

FREEPIK

CROSS-BORDER investment within the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) will be key to the future success of the Philippine halal industry, the head of an industry association said.

At a conference on Tuesday, PCCI President Enunina V. Mangio said collaboration within BIMP-EAGA will help the Philippine halal industry prove its global competitiveness.

“We believe that halal is a key area where our cultural and economic commonalities offer unique opportunities for partnership and innovation,” Ms. Mangio said.

“Investment flows across our borders will drive the development of infrastructure, enhance technological capabilities, and create new industries that can thrive within our integrated regional economy,” she added.

She said other areas ripe for collaboration are agriculture, manufacturing, services, and tourism.

During a panel discussion, Brunei Darussalam Ambassador Megawati Manan said that her country has a skilled workforce and imports raw materials in volume.

“Brunei’s niche is our highly educated human resources … We can always see that there are opportunities there in terms of exporting our talent within the BIMP-EAGA region,” she said.

“In terms of halal, we are importing a lot of raw materials, especially (farm products), and we have our eyes on the Philippines right now,” she added.

She said that Brunei could also help bring Philippine halal products to the Middle East.

“We are looking at a third-party manufacturer that will bring agricultural produce into Brunei to be manufactured … which will be packaged with the Brunei halal brand to help the products go up to the Middle East,” she said.

Malaysian Ambassador Dato Abdul Malik Melvin Castelino said that the key focus for the BIMP-EAGA should be the regions’ natural resources.

“The Philippines is one of the key players in the BIMP-EAGA region. It has a lot of resources, including copper, gold, nickel, and, of course, many agricultural products like bananas, pineapples, and coconut,” he said.

“These resources complement the industrial and manufacturing needs of the region, with countries importing and exporting raw materials and semi-processed goods,” he added.

He also added that other significant areas of cooperation include the cross-border trade in fisheries, textiles, automotive, electronics, and semiconductors.

Indonesian Ambassador Agus Widjojo said that since the BIMP-EAGA countries have much in common in terms of natural resources.

“That poses a challenge when we have to look for opportunities, but we also have differences, which is why we belong to different countries,” he said.

“We have different political systems, characteristics of society, and characteristics of the state. So, I think it is within those realms that we have to find opportunities,” he added.

He said that the focus should be on small and medium enterprises (SMEs) to generate employment.

“This is very important to build the economic structure of each country, increase participation in productive sectors of the economy, and fill domestic demand,” he said.

“However, to strengthen those SMEs, we need to be equipped with good infrastructure, including modes of transportation and logistics services,” he added.

On Tuesday, business chambers from Brunei Darussalam, Indonesia and Malaysia joined the PCCI in signing a memorandum of cooperation to expand the flow of goods and services and generate more investment within BIMP-EAGA. — Justine Irish D. Tabile

Pangasinan solar project ruled eligible for green lane — BoI

TRINA SOLAR FB PAGE

THE Board of Investments (BoI) said it granted green-lane certification to Spotlight Power, Inc.’s (SPI) P1.9-billion solar power plant in Pangasinan.

In a statement on Tuesday, BoI said that it issued a green lane certificate to the 49.9-megawatt Mabini Solar Power Plant, which is expected to commence operations by the second quarter of 2026.

The project will occupy 41.25 hectares in Mabini, Pangasinan, and is projected to generate 150 jobs from pre-development until operations begin.

SPI, a renewable energy (RE) development company backed by Trina Solar Investment Pte. Ltd., said the green-lane route, which expedites the approval stages of power development, enhances “transparency and accountability” in all government agencies that issue permits and licenses for power projects.

“This government initiative truly delivers on the promise of easing the process of doing business, especially regarding highly complex requirements that are time-sensitive,” it added.

Green lanes were created through Executive Order No. 18 and are intended to ease the path for projects deemed strategic from proposal stages to operational status.

The BoI tallies 102 projects involving investments of P3 trillion which have been certified to go the green-lane route, following the endorsement of its One-Stop Action Center for Strategic Investments.

The majority of the projects endorsed for green-lane treatment are RE projects.

The government took in increased RE investments after full foreign ownership in the industry was allowed. Foreign ownership was previously limited to 40%.

“As an RE developer, (the green lane) enhances our efficiency and increases our capability to deliver projects in a timely and effective manner,” the company said.

“Because of this, our investors are more confident than ever that we can deliver more projects this year and in the years to come,” it added. — Justine Irish D. Tabile

Pineapple exports up 2.7% in 2023 on solid demand from China

PHILSTAR FILE PHOTO

PINEAPPLE exports rose 2.7% to 600,000 metric tons (MT) in 2023 due to strong demand, particularly from China, according to the Food and Agriculture Organization (FAO).

In its Major Tropical Fruits Review, the FAO said that a 3% increase in shipments to China boosted pineapple exports last year. China took up about 43% of all pineapple exports in 2023.

It cited strong demand for “premium quality pineapples.”

The FAO said that the Philippines’ MD2 variety has been well-received by the market due to its long shelf life, price-to-quality ratio, and year-round production cycle.

MD2 is the most commonly planted pineapple variety in the Philippines.

It added that the average export unit value of Philippine pineapple rose 3.8% to $593 per MT.

Other export markets, like Japan and South Korea, also expanded between 6-8% in 2023. Japan accounted for about 30% of Philippine pineapple exports, while South Korea took up 14%.

The Philippines remained the second-largest exporter of pineapple after Costa Rica.

Shipments from Costa Rice rose 5% to 2.1 million MT in 2023, following a 5% drop the year prior.

“Weather conditions in key Costa Rican growing areas were favorable for the cultivation of pineapple throughout 2023, resulting in higher yields and thus higher supplies for export,” the FAO said.

The US and the European Union remained the exclusive destination for Costa Rican pineapple.

Global exports rose 3.9% to 3.2 million MT, driven by the increase in Costa Rican supply. Costa Rica accounted for 65% of the export trade in 2023. — Adrian H. Halili

Modernized fish hatcheries seen boosting aquaculture prospects

BRUCE WARRINGTON-UNSPLASH

THE National Fisheries Research and Development Institute (NFRDI) said on Tuesday that modernized fish hatcheries will help raise the output and competitiveness of aquaculture.

“The modernization of hatcheries will elevate and transform the aquaculture industry into a more economically profitable, cost-efficient, and cost-effective operations,” NFRDI Executive Director Lilian C. Garcia said during a memorandum of agreement signing for its temperature-controlled hatchery project.

The NFRDI’s partners in the bangus (milkfish) hatchery project are the Bureau of Fisheries and Aquatic Resources (BFAR) and the Department of Science and Technology’s Metals Industry Research and Development Center.

She added that the project will jumpstart the mechanization and automation of hatcheries in the Philippines.

On the sidelines, Ms. Garcia said that the project’s objective is to increase the supply of bangus fry for growers.

“The current problem is that the production of fry has been affected by the seasons… through this project there will be a stabilization (of supply),” she added. 

She said cooler parts of the year tend to reduce milkfish fry production.

The core of the project is a cost-effective and reliable heating system to keep water temperatures within optimal ranges in bangus hatchery tanks.

The NFRDI had selected the BFAR’s National Fisheries Development Center in Dagupan City as the site for the temperature-controlled hatchery.

“We chose Dagupan because… it is one of the big producers of bangus. The facilities there will be used to test the technology,” Ms. Garcia said.

She added that the modernized equipment will be offered to investors, private hatchery operators, and government hatcheries.

In the second quarter, bangus production declined 4.6% year on year to 78,125 metric tons, according to the Philippine Statistics Authority. — Adrian H. Halili

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