Demand for term deposits soars

July 5, 2018 | 12:02 am

By Melissa Luz T. Lopez, Senior Reporter
DEMAND SOARED for term deposits offered by the central bank this week, accompanied by a surge in yields to hover close to four percent.
Banks wanted to park as much as P125.157 billion under the term deposit facility (TDF) yesterday, well above the P100 billion which the Bangko Sentral ng Pilipinas (BSP) put up for auction. The amount jumped from the P92.636-billion bids received a week ago.
Tenders increased across all tenors to recover from undersubscription seen the previous weeks, although appetite remained stronger for the week-long papers.
The seven-day deposits saw P58.556 billion tenders, besting the P45.831 billion received a week ago and surpassing the P40 billion offered by the central bank.
Rates sought by players stood at a narrow 3.7-3.8% range to average 3.7779%, a modest increase compared to the 3.7523% fetched during the June 27 exercise.
Bids for the 14-day tenor recovered on Wednesday to end three straight weeks of logging below offer. Banks came forward with tenders worth P44.335 billion, recovering from P31.99 billion the past week and settling higher than the P40 billion on the auction block.
However, the average yield climbed to 3.9309%, up 6.2 basis points (bp) from the 3.8689% logged a week ago to hover close to the 4% ceiling rate set by the central bank.
Demand also improved to reach P22.266 billion, improving from last week’s P14.815 billion to surpass the P20 billion which the BSP wanted to raise. Market players also asked for bigger returns to average 3.9442%, rising by 9.7 bp week-on-week as margins ranged from 3.8-4%.
The TDF is the central bank’s primary tool to capture excess money supply in the financial system.
The BSP actively adjusts auction amounts each week in order to bring market and interbank rates within its desired spread, which currently ranges from 3-4% following a 25bp rate hike in last month.
The Monetary Board introduced a back-to-back increase in benchmark rates during their May and June policy meetings in a bid to rein in future inflation, as price increases have been trending higher than their 2-4% target over the past few months.
Appetite for TDF placements have since recovered. Previously, central bank officials said banks were hesitant to keep their funds locked in for longer periods amid uncertainties in the domestic and global financial markets.
The central bank will offer P100 billion in term deposits again next week, with offer volumes per tenor steady from this week.

RCBC launches online FX trading facility

July 5, 2018 | 12:01 am

RIZAL Commercial Banking Corp. rolled out an online foreign exchange trading platform. — *BW FILE PHOTO*

RIZAL COMMERCIAL Banking Corp. (RCBC) has launched an online platform allowing its clients to buy and sell currencies.
In a statement Wednesday, RCBC said it has launched the Online FX Trading Platform, which it said is the first and only online foreign exchange execution platform in the country.
This platform eliminates the need for face-to-face or over-the-phone transactions when exchanging foreign currency.
“This new product, developed by RCBC, allows the bank clients to buy and sell their foreign currency at any given time from the safety of their own homes, or even from abroad,” the bank said.
For clients to use this platform, RCBC clients have to enrol at least two different currency accounts through RCBC’s online banking facility.
Once eligible, clients can buy and sell major currencies between their enrolled accounts such as US dollar, Euro, British pound, Japanese yen and Singaporean dollar, among others.
“The Online FX Trading Platform revolutionizes foreign exchange transactions for the country,” Gil A. Buenaventura, RCBC president and chief executive officer, was quoted as saying in the statement.
“Never before has a Philippine bank been able to provide their clients a platform that allows them to trade foreign currency at their own time and place.”
“In taking out the need for face-to-face transactions, our clients are ensured greater ease in that they can buy and sell their foreign currencies without being restricted by geography,” RCBC Senior Executive Vice-President Chester Y. Luy added.
Last month, RCBC launched its digital money e-Piso in partnership with eCurrency Mint Ltd., promising a more secure and efficient way of paying.
The lender is also set to offer a remittance service using blockchain technology in partnership with two Japanese banks for a cheaper and faster way of sending money.
RCBC, the tenth-biggest bank in asset terms as of end-March, booked a net income of P1.1 billion in the first quarter, 13.1% higher than the P1 billion logged in the same period last year, supported by robust loan growth and reduction in non-performing assets.
Shares in RCBC closed at P28.60 apiece on Wednesday, down 35 centavos or 1.21%. — Karl Angelo N. Vidal

HTC to slash jobs in Taiwan

July 5, 2018 | 12:01 am

Smartphone maker HTC plans to slash 1,500 jobs or around a quarter of its global work force at its manufacturing unit in Taiwan, in a bid to better manage resources as the company continues to battle dwindling sales. — AFP

Holiday Inn Express opens in Manila

July 5, 2018 | 12:01 am

OFFICIALS of Resorts World Manila (RWM) and InterContinental Hotels Group (IHG) unveiled the logo for Holiday Inn Express Manila Newport City (HIEx Manila), the global brand’s first Philippine location.
In photo (left to right): Martin Paz, chief integrated marketing officer for RWM; Kathy Mercado, senior director for international marketing and sales for RWM; Stephen Reilly, chief operating officer for RWM; HT Cheah, general manager for HIEx Manila; Christopher McGonnell, chief hotel operations officer for RWM; and Christian Pirodon, IHG regional general manager for the Philippines.

Restaurant Row (07/05/18)

July 5, 2018 | 12:01 am

Pantry’s promotion

THE PANTRY at Dusit Thani is offering a Back To School Treat: students with up to a maximum of three companions get a 50% discount on the lunch or dinner buffet. To avail of the promotion, they have to present a school ID. The Dusit Thani is located at the Ayala Center in Makati. For details visit www.DUSIT.com.

Anya’s Best of Spain

RAMBLA’s squid ink *paella* is a highlight at Anya Resort Tagaytay’ “*Hola*!” dinner.

THERE’S NO need to fly to Spain to experience its food as Anya Resort Tagaytay celebrates its first anniversary on July 14 with a one-night only “Hola!” dinner prepared by chef Ruben Beltran, Executive Chef at Rambla. With over 20 years of experience, Mr. Beltran is known for the unique twists he puts on Spanish food. After working as a sous chef in Les Pres d’Eugenie Restaurant, a three-star Michelin star restaurant in France, then sous chef at Vincci Estrella del Mar Hotel in Malaga, Spain, earlier this year he made his way to Rambla Rockwell. The menu he prepared for this special celebration will feature his signature infusion style of cooking where he blends spices and flavors. From tasty tapas to seafood and traditional roasts, this Spanish feast is all about making the most of the best local produce found in Tagaytay. Guests will start with a buffet selection of tapas, from jamon iberico al corte, anchovy air-baguette with piparras cream and grilled vegetables, to parmesan croquetas in truffle sauce. Then comes the traditional taste of Spain with a juicy pork jowl and chipotley dressing, paired with the chef’s specialty, paella negra, made with fresh mussels and clams, and flavorful saffron aioli. For dessert, one can choose refreshing sangria-soaked watermelon cubes, or milk and ginger ice cream, or torta de santiago — a light cake made with almonds and lemon zest — with white chocolate matcha. A variety of fine Spanish wines and bottomless sangria will be available. Limited slots for the “Hola!” dinner at Anya Resort and Residences Tagaytay are available for P1,995 net per person on July 14. For details, visit Anya Resort Tagaytay’s Facebook page or the website at www.anyaresorts.com, or call 657-1640 or 0998-577-9999, or e-mail resv.tagaytay@anyaresorts.com.

Football Season Pass

WHAT BETTER way is there to watch the “beautiful game” of football than viewing it live with great company paired with premium drinks and savory bar chow at Marco Polo Ortigas’ Vu’s Sky Bar and Lounge? The Quarter Round begin on July 6, with the Final scheduled on July 15 (Philippine time). Guests enjoying the games at Vu’s Sky Bar and Lounge can enjoy two complimentary bottles of Heineken beer for a door charge of P499. The games air live until 1:30 a.m. Vu’s Sky Bar and Lounge offers a large selection of spirits to pair with a curated line-up of dishes from the Philippines and Spain, and other Mediterranean favorites. For details visit www.marcopolohotels.com.

Sizzle at Silogue

RESORTS WORLD MANILA warms taste buds this rainy season with a trio of sizzling dishes at its Pinoy comfort dining outlet, Silogue. The burger patties in the Salisbury Steak Sizzler are made from premium ground beef cuts and covered in savory gravy. Grilled to perfect doneness, the juicy beef patties are given a lightly crisp layer on a sizzling plate for an added dimension of texture. The Mixed Seafood Sizzler gives diners a solid beach vibe with a fresh assortment of squid, shellfish, and fish which are balanced by the earthy flavors of a rich peanut sauce. Summer barbecues are given an upgrade with the Crispy Ribs Sizzler. Generous servings of tender beef ribs are coated in a sweet barbecue sauce. All Silogue Sizzlers are served on a sizzling hot plate with a cup of yellow rice and a side of buttered vegetables. The three dishes are available until July 31. Silogue is located at the GF Gaming Area of RWM and is open to guests 21 years old and above only. For details visit www.rwmanila.com or call the Tourist/Visitor hot line at 908-8833 for inquiries and reservations.

How PSEi member stocks performed — July 4, 2018

July 5, 2018 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Wednesday, July 4, 2018.

Domestic market capitalization of select stock exchanges in Asia Pacific

July 5, 2018 | 12:00 am

Palace: Peace talks to resume if Reds meet Duterte’s conditions

July 4, 2018 | 9:45 pm

By Arjay L. Balinbin, Reporter
Malacañang on Wednesday, July 4, said President Rodrigo R. Duterte’s administration is still open to negotiations with communist rebels provided that his “conditions are met.”
“The door for peace talks remains open provided that PRRD’s conditions are met,” Presidential Spokesperson Harry L. Roque, Jr. said in a social media post on Wednesday evening.
According to the spokesman, the President wants the peace talks to take place “in the country.”
He added: “[There should be] no collection of revolutionary tax and no hostilities.”
Mr. Duterte also wants the fighters of the New People’s Army (NPA) “to remain encamped,” and that there will be “no [formation of a] coalition government.”
“Meanwhile, localized peace talks may be pursued by local government units (LGUs) provided they do not concede any aspect of governance and pursuant to guidelines to be agreed upon by the Cabinet cluster on security,” Mr. Roque also said.
In a press release, the Communist Party of the Philippines (CPP) said that the “local[ized] peace talks” will not prosper, because “(a)ll units of the NPA and committees of the CPP are united under the central leadership of the Party.”
The CPP added that “the Party and NPA fully support the Negotiating Panel of the National Democratic Front of the Philippines (NDFP) in its representation of all revolutionary forces in negotiations with the Government of the Republic of the Philippines.”
“[The] So-called localized peace talks only seek to obscure the ruthlessness and brutality of the all-out military offensives of the Armed Forces of the Philippines (AFP). Under Oplan Kapayapaan, the AFP is mounting all-out offensives and laying siege on hundreds of barrios, carrying out aerial bombardments and perpetrating extrajudicial killings ala Tokhang, and other grave abuses against the peasants, national minorities and other oppressed peoples,” the CPP also said.

Boracay’s White Beach declared clean; water quality ‘almost there’

July 4, 2018 | 9:36 pm

THE government is on track in its efforts to rehabilitate Boracay island, the Department of Environment and Natural Resources (DENR) said as it declared White Beach clean and the effort to improve water quality on the island “almost there.”
Environment Secretary Roy A. Cimatu said in a statement that daily and weekly monitoring results are showing improvement for Boracay’s main beach area, though the cleanup of the sea frontage in barangay Balabag on the opposite side of the island will take time.
“[White beach] is already clean, you can see the pictures and it’s already clean. It’s only the Balabag where some fine-tuning is happening right now,” he added.
“We are only waiting for the finishing of the roads. In terms of water quality, we are almost there. If we can open the island before the deadline, we will.”
President Rodrigo R. Duterte ordered the resort island to be closed on April 26 to allow for a six-month rehabilitation.
The DENR has ordered water concessionaires to collaborate in dealing with untreated wastewater and increase the capacity of their sewage treatment plants in the island.
National Solid Waste Management Commission Executive Director Eligio T. Ildefonso said that the local government will be implementing a policy of solid waste segregation
“As far as solid waste management is concerned, we are on track,” he added.
“If you go to Boracay you can see that there isn’t much trash. If you do, it will be only because of a few violators but we are strictly implementing the right garbage disposal in Boracay.”
As for plans for a waste-to-energy (WTE) plant, Mr. Ildefonso clarified that a facility will not be built on Boracay itself.
“It will be built in (on Panay). If we segregate properly, then it will be manageable even before we need to put up a waste to energy plant,” he added.
Mr. Ildefonso said that the WTE plant is a “long-term” project with a timeline of about 10 years.
“Based on the projection, the garbage generated will keep on increasing in volume in Boracay and Malay,” he said, referring to the municipality on Panay which has jurisdiction over Boracay.
Boracay Island Water Co., Inc. proposed to Malay to set up a WTE plant through Manila Water Total Solutions. — Anna Gabriela A. Mogato

SC rules LGUs’ IRA funding includes BoC collections

July 4, 2018 | 9:35 pm

PH coins — LOCAL GOVERNMENT UNITS shall have a share in the national internal revenue taxes. — *BW FILE PHOTO*

THE SUPREME COURT (SC) has ruled that the local government unit (LGU) “just share” of the national government’s tax revenue should factor in Customs collections.
The Court, sitting en banc, issued the ruling in favor of a petition filed six years ago by Batangas governor Hermilando I. Mandanas, at the time a member of the House of Representatives for the province’s second district, which claimed that Internal Revenue Allotments (IRA), through which the national government funds LGUs, was short by about P500 billion from 1992 to 2012.
Voting 10-3 on Tuesday, the high court “interpreted the basis for the ‘just share’ of local government units… as being based on all national taxes and not only national internal revenue taxes,” according to a statement released by the SC Public Information on Wednesday.
Section 284 of Republic Act No. 7160, or the Local Government Code of 1991, states: “Local government units shall have a share in the national internal revenue taxes,” which are the taxes collected by the Bureau of Internal Revenue (BIR), according to the National Internal Revenue Code (NIRC) of 1997.
These include income tax, value-added tax, excise tax, and other taxes collected by the BIR.
National taxes were also ruled to include the remaining taxes collected by the government like those brought in by the Bureau of Customs (BoC), the LGUs’ share of which Mr. Mandanas alleged was not being forwarded.
LGUs, based on the Local Government Code, are entitled to 40% of national internal revenue taxes, but Mr. Mandanas claimed it should include taxes not collected by the BIR.
Mr. Mandanas was asked for comment but his office did not respond to calls.
Those who voted in favor of the decision were Acting Chief Justice Antonio T. Carpio, Associate Justices Teresita L. De Castro, Presbitero J. Velasco, Diosdado M. Peralta, Lucas P. Bersamin, Mariano C. Del Castillo, Estella M. Perlas-Bernabe, Noel G. Tijam, Samuel R. Martires, and Alexander G. Gesmundo.
Meanwhile, those who dissented were Associate Justices Mario Victor F. Leonen, Benjamin S. Caguioa, and Andres B. Reyes, Jr. Associate Justice Francis H. Jardeleza did not take part in the voting. — Dane Angelo M. Enerio

Supreme Court rules government allowances, benefits subject to tax

July 4, 2018 | 9:33 pm

THE Supreme Court, sitting en banc, has upheld a Bureau of Internal Revenue (BIR) memorandum which held that allowances, bonuses, and other benefits given to government employees are subject to tax.
The court had partially granted a 2014 petition which claimed these were nontaxable fringe and de minimis benefits.
According to a statement released by the SC’s Public Information Office on Wednesday, the petition challenged the Bureau of Internal Revenue’s (BIR) Revenue Memorandum Order (RMO) No. 23-2014 “which classified as taxable compensation income allowances, bonuses, compensation for services granted to government employees.”
The memorandum, which took effect on July 7, 2014, stated all fringe benefits received by government employees are subject to fringe benefits tax.
In a unanimous vote made on Tuesday, the high court “struck down Section VI of RMO 23-2014 but upheld the validity of Sections III, IV, and VII which subject the claimed non-taxable fringe and de minimis benefits to tax and requires the government, as employer, to withhold the amount corresponding to the tax,” the statement said.
“[A]ll income received by an employee from his/her employer is presumptively taxable and subject to withholding,” the court ruled.
The statement said, “[i]n upholding Sections III and IV, the Court ruled that no additional tax is imposed as the two sections merely mirror the relevant provisions of the National Internal Revenue Code (NIRC) of 1997 on withholding tax on compensation income.”
Section III of the RMO states that government offices, including government-owned or controlled corporations (GOCC) are constituted as withholding agents of the creditable tax required to be withheld from compensation paid to employees while Section IV listed benefits such as the 13^th month pay are not subject to income tax and withholding tax. Section VII lists the penalties for not complying with the RMO.
The statement added: “The Court declared null and void Section IV of RMO 23-2014 only where it names the Governor, City Mayor, Municipal Mayor, Barangay Captain, and Heads of Office in government agencies, government-owned or controlled corporations, and other government offices, as persons required to withhold and remit withholding taxes.”
The high court found that the BIR “overstepped the boundaries of its authority to interpret existing provisions of the NIRC (National Internal Revenue Code) of 1997 in issuing Section VI as the NIRC of 1997 does not require any of these officers to deduct, withhold, and remit the correct amount of withholding taxes.”
According to the SC, the BIR “acted in grave abuse of discretion in issuing Section VI” of the memorandum as “imposing upon these officials an obligation not found in law or in Implementing Rules, the (BIR) did not merely issue an interpretative rule designed to provide guidelines for enforcement of the law but supplanted details — a power vested by law only on the Secretary of Finance.”
The SC statement noted the decision is to be applied prospectively. — Dane Angelo M. Enerio

Frequency auction could deter ‘third player’ bids

July 4, 2018 | 9:31 pm

THE proposed auction of frequency for the new entrant to the telecommunications industry, the so-called “third player,” might reduce the number of bidders and raise costs for consumers, analysts said.
The analysts and an Internet advocacy group said that an auction of frequency with a minimum bid price of P36.58 billion, could be a barrier to improving service, rather than an incentive for those wanting to be the third player.
The government is deciding whether to allot frequency to the third player through an awarding without a fee or through an auction. The Department of Information and Communications Technology (DICT) supports an awarding of frequency, while the Department of Finance (DoF), a member of the oversight committee for third player selection, is pushing for an auction of frequency.
“The selection process based on HCLOS [highest committed level of service] is clearly more consumer-centric than the one based on the auction for frequency. The second model has several variables that could potentially be counterintuitive to the main purpose of the third telco’s entry (i.e., improve and lower the cost of telco services) and simply just invite controversy,” Sean Agapito, market analyst at IDC Philippines, said in an e-mail interview.
“For instance, the auction of frequency would force applicants to pay out huge capital unrelated to the development of telco services or establishment of new ICT [information and communications technology] infrastructure. This expense could be easily passed on to consumers.”
Jervin S. de Celis, equities trader at Timson Securities, Inc. said that interested parties may be discouraged by the auction requirement and will leave the field to cash-rich companies, or those with a foreign partner.
“I think [that the companies may be turned off by the auction price]. The price of P36 billion is too hefty… so it might become a little difficult for the new entrants to raise cash just to acquire the frequency that the DoF plans to auction, unless the entrant is already cash-rich or has a foreign partner to shell out the needed funds to acquire the frequencies.”
Mary Grace Mirandilla-Santos, independent researcher and lead convener of Internet advocacy group Better Broadband Alliance (BBA) said the higher cost to be shouldered by the new player, which can be passed on to consumers, will be contrary to the aim of getting a new competitor to the incumbents, PLDT, Inc. and Globe Telecom, Inc.
“The objectives of the third telco selection process should be clear: (1) ease of entry for a new player and (2) better and more affordable telecom services for the consumer. In line with this, the BBA is in favor of the (terms of reference) that awards a license and assigns spectrum based on the HCLOS plus highest committed investment (HCI),” Ms. Santos said in a mobile message.
“…If the auction results in a high bid price, it is highly likely that the selected third telco would work to recover the cost by passing it on to the consumer. That would defeat the purpose of putting a new player in place who will compete with the duopoly,” she added.
DICT Acting Secretary Eliseo M. Rio, Jr. has expressed opposition to the DoF’s plan, saying that an auction will be anti-competitive because the incumbents did not have to undergo an auction, only a “beauty contest,” thereby placing a big burden on the new player by forcing it to pay out a large amount that has nothing to do with improving infrastructure and services.
DoF Secretary Carlos G. Dominguez III said the new entrant must pay for the frequency to make it “fair” to the public.
Around 300 megahertz (MHz) of frequency is assignable to a third player. The DICT has said this is sufficient to compete with the incumbents.
Two draft terms of reference (ToR) with the differing approaches to the awarding of frequency are set to be discussed in a public hearing on July 6.
Current requirements for the third player include paid-in capital of at least P10 billion; experience in providing, delivering, and operating of telecommunications services for the last five years; a congressional franchise not related to either PLDT or Globe.; and no uncontested liabilities with the NTC as of Jan. 31, 2018.
The government aims to choose the third player within the year.
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.