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Manila Water flags risk of water shortage between 2021 and 2023

Manila Water Co., Inc. has raised the alarm over a possible water shortage starting in 2021 if it fails to get approval for the construction of a new water source from Laguna Lake ahead of the target completion of the Kaliwa dam in Quezon province by 2023.
Geodino V. Carpio, Manila Water chief executive officer, said 2023 is “too late” for the company as supply from Angat barely meets the demand for water within its east zone concession area.
“Today, we’re using all from Angat,” he told reporters in a briefing on Wednesday, Aug. 29, in Quezon City. He was referring to the dam that supplies about 96% of Metro Manila’s water requirement.
The dam delivers about 4,000 million liters per day (MLD), of which 40% or 1,600 is allocated to Manila Water. The rest at 2,400 MLD is supplied to the west zone concessionaire Maynilad Water Services, Inc.
State agency Metro Manila Waterworks and Sewerage System (MWSS) regulates what is allocated to the concessionaires.
“Demand has increased beyond Angat’s capacity to provide,” Mr. Carpio said.
Mr. Carpio said Manila Water’s demand requirement has already exceeded the 1,600 MLD allocation, and has reached 1,650 MLD as of the first quarter. The deficiency at 500 MLD is sourced from La Mesa dam, which is not meant to impound water for distribution.
“We are worried because the rate rebasing is about to be finished,” he said, referring to the new base rate being applied for by the company for the 2018-2022 regulatory period, wherein new water source projects have been proposed. The company expects an “indicative” rate in the coming days.
Mr. Carpio said the company expects to complete this year a 100-MLD water source in Rizal province that should cover the current deficiency and the increase in demand for the next two years until 2020.
“If we stretch it, we may have sufficient water by 2021,” he said.
But between 2021 and 2023, Manila Water will be short, assuming that Kaliwa dam will indeed be finished by 2023, he said. But the Philippines has yet to close a financing deal with China through an official development assistance (ODA).
“For two years, we will be short,” Mr. Carpio said.
He said Manila Water remains hopeful that MWSS would give its approval for the company’s Laguna Lake water supply system project, which is located in the east bay of the lake and provide 250 MLD to complement the ongoing Rizal province water supply improvement project.
The Laguna Lake project can serve 1.446 million consumers while the Rizal project can serve around 788,000. The annual demand growth within Manila Water’s concession is placed at 40 to 50 MLD. — Victor V. Saulon

Premiere Horizon Alliance takes over two limestone mining firms

Premiere Horizon Alliance Corp. (PHA) is taking over two mining companies, marking its entry into limestone exploration.
In a disclosure to the stock exchange on Wednesday, Aug. 29, the listed holding firm said its board of directors have approved the conversion of its advances into infrastructure subsidiary, Redstone Construction and Development Corp. (RCDC).
This will allow RCDC to own up to 100% of Pyramid Hill Mining Industrial Corporation (PHMIC) and Palawan Star Mining Ventures, Inc. (PSMVI), which hold mineral production sharing agreements (MPSAs) covering around 10,384 hectares.
The company last March announced its investment in PHMIC and PSMVI, noting that their MPSAs contain “probable commercial quality limestone deposits located in the mineralized area of Southern Palawan.”
PHA said that RCDC has already acquired 98.88% of PHMIC and 98.55% of PSMVI as of July 11, through conversion of its advances to equity amounting to P220 million and P170 million, respectively.
The Philippine Stock Exchange (PSE) has suspended trading of PHA’s shares on Wednesday morning following the disclosure, until such time that the company discloses more details about the deal. — Arra B. Francia

Philippines eyes 10 loan agreements with China during Xi Jinping’s visit

THE GOVERNMENT expects to ink about 10 loan agreements for infrastructure projects with China during Chinese President Xi Jinping’s visit here in November.
“Some have already started, the rest they are reserving it for November when President Xi Jinping comes here. That was the plan,” Budget Secretary Benjamin E. Diokno said in a media briefing on Wednesday, Aug. 29.
When asked how many loans does the government expects to be sealed by then, Mr. Diokno said there are “at least 10” loan agreements “from the two baskets” of projects that will be signed between the Philippines and China.
The first basket of projects include the Chico River Pump Irrigation Project, New Centennial Water Source-Kaliwa Dam Project, the Philippine National Railways’ South Long Haul Project, and the Davao-Samal Bridge Construction Project, as well as other projects funded by grants.
The second basket meanwhile contains the Ambal-Simuay River and Rio Grande de Mindanao River Flood Control Projects, Pasig-Marikina River and Manggahan Floodway Bridges Construction Project, Subic-Clark Railway Project, Safe Philippines Project Phase 1, and the Rehabilitation of the Agus-Pulangi Hydroelectric Power Plants Project.
In 2016, Mr. Duterte has secured a $9-billion official development assistance from China after his foreign policy shifted away from traditional partners such as the US and the European Union, which have been critical of the government’s campaign against illegal drugs. — Elijah Joseph C. Tubayan

Government makes full award of three-year Treasury bonds

The government accepted all bids for the reissued three-year Treasury bonds (T-bond) it offered on Wednesday, Aug. 29, as rates went up due to the expectation on inflation amid excess liquidity in the market.
The Bureau of the Treasury (BTr) borrowed P15 billion as planned at Wednesday’s auction of reissued three-year bonds with a remaining life of two years and five months.
The offer was less than twice oversubscribed as total tenders from investors amounted to P26.287 billion.
The bonds, which carry a coupon rate of 4.25%, fetched an average rate of 5.136%, 43.3 basis points higher from the 4.703% recorded in the previous bond auction in May.
At the secondary market prior to the auction, the debt notes were quoted at 5.0557%.
National Treasurer Rosalia V. De Leon said the Treasury decdied to fully award the bonds as the three-year tenors continue to be a “sweet spot” for investors.
“We see that there’s continued appetite in the market [because it’s] shorter than the front end of the curve so three years. That’s a sweet spot for the investors so we decided to full award,” Ms. De Leon told reporters following the auction, adding that their yields were at par with the secondary market.
She noted that the rates went up as market players provide for additional buffer in case the market moves. — Karl Angelo N. Vidal

BPI raises $600 million through fixed-rate notes

Bank of the Philippine Islands (BPI) raised $600 million through a senior unsecured note drawdown to maximize flexibility in offshore funding and diversify its liquidity sources.
In a disclosure to the local stock exchange on Wednesday, the Ayala-led lender said it raised $600 million from its five-year Senior Unsecured Fixed Rate S Notes which fetched a coupon rate of 4.25%.
The capital raising activity marked the maiden drawdown from its $2-billion medium-term note program established in June and the debut offshore bond offering of the lender.
“The bank will issue the notes as part of its initiatives to maximize flexibility in accessing offshore funding,” BPI said in the statement.
The transaction is expected to settle on Sept. 4 and will be listed on the Singapore Stock Exchange.
The notes are expected to have an issue rating of “Baa2” by credit rater Moody’s Investors Service, a notch above the minimum investment grade. — Karl Angelo N. Vidal

UnionBank sets final terms for stock rights offering

UnionBank of the Philippines has set the final terms for its stock rights offering (SRO), where it is looking to raise about P10 billion to support expansion.
In a disclosure to the local bourse late Tuesday, Aug. 28, the Aboitiz-led UnionBank said it will offer 158.8 million common shares under the SRO priced at P62.97 apiece.
The offering will be conducted from Sept. 10 to 21.
Eligible shareholders are entitled to subscribe to a share for every 6.6644 common shares as of the Sept. 3 record date. Ex-date is on Aug. 29.
The additional capital will boost the lender’s common equity Tier 1 and total capital adequacy ratio of the bank.
“The proceeds from the stock rights offer will be used to allow for continued growth of assets of the bank,” UnionBank previously told the local bourse.
UnionBank, the ninth largest commercial bank in asset terms as of end-March, logged a net income of P4.7 billion in the first hald of the year, 8% higher than the P4.4 billion profit booking in the same period last year. — Karl Angelo N. Vidal

Five things you need to know about securing your data

Filipinos today are among the most wired populations in the world. In fact, UK-based consultancy firm, We Are Social, recently ranked the Philippines first in terms of social media usage, three years running.
According to their study, the 67 million Filipinos online today spent an average of almost four hours a day on social media alone. That data uploaded and gathered per person numbers in the gigabytes (just think about how many selfies you bless your feed with every day).
Placed in the context of one of the world’s fastest growing economies, thanks to industries like business process outsourcing (BPO), that level of data output makes the Philippines a pretty attractive target for cyberattacks.
Last week, Harriet Green, chairman and CEO of IBM Asia Pacific, shared her insights on the responsibilities of individuals, enterprises, and the government in safeguarding that data security.
Here are five things you need to know about securing your data:

Every individual, young or old, should have their own personal data strategy.

There’s little an individual user can do to stop a cyberattack. But understanding the importance of online hygiene is essential for today’s digital natives.
Data — at scale — has massive value. It’s the reason platforms like Facebook are free to use. Every like, view, and comment you make adds up to a composite profile that platforms can then sell to digital marketers.
“The early beneficiaries of digitization were very few, very large e-commerce and collaboration companies,” Ms. Green said. “All of those business models are on the basis that you give your data for free for them to then use to create a set of economics and sell to whoever.”
As the saying goes: If you don’t seem to be paying for the product, you’re the product.
So how can individuals respond? By assessing their online activities, and adopting a personal data strategy.
“Which [data] needs to be shared with the world at large, with your closest friends?” Ms. Green asked. “What is your view on privacy? Is it relevant that you need everyone to know exactly where you are at any given time? There is a personal responsibility there.”
“It’s your data. You have a right to decide how that data is used.”

Enterprises should be held accountable in keeping their clients’ data secure.

“Eighty-percent of the world’s data is not searchable,” Ms. Green said. “80% belongs to enterprises. It is every roaming algorithm that your local telecom company uses, it’s your data that your bank has kept on you for the transactions that you do.”
According to Ms. Green, it’s the responsibility of enterprises to ensure they’re respecting and safeguarding the data of their users. In turn, individuals need to scrutinize the enterprises they entrust with their data.
“As you trench through the terms and conditions, what does that mean to you and the people you work for?” she asked. “If your nine-year-old daughter [shares data with that company], how do you feel about the protection that exists within that company?”
A checklist of questions one should ask of any company should include: what their stated data policy is; who their chief privacy or chief security officer is; and what the company plans to do in the event of a data breach.
For big businesses and SMEs handling user data, this should be a primary concern.
Stephen Braim, IBM’s vice president for government and regulatory affairs, noted that the stock market doesn’t take too kindly to data breaches.
“When companies had breaches, they tend to suffer the single biggest losses in the stock market,” he said. “You don’t need many of those losses for companies to realize that this is not behaviour that we tolerate as shareholders and as consumers.”

Governments need to enforce data privacy and security through legislation.

On top of the responsibilities of individuals and enterprises, the government should also commit to taking action against those who compromise the security and privacy of its citizens’ data.
Mr. Braim commended the Philippine government for its data initiatives, citing Republic Act 10173, or the Data Privacy Act of 2012, as one of the key pieces of legislation that puts the country ahead in terms of cybersecurity.
“The other thing that is very pleasing [is that you have] a government privacy advisory commission,” he said. “That we don’t see a lot of. Once privacy laws come into place in countries, you often don’t see governments then saying ‘let’s have an ongoing industry discussion’. But it happens here.”
When it comes to data: enterprises need to be respectful, individuals need to be vigilant, and governments need to make sure everyone is playing by the rules.
“No one wants to live in a state where the government controls everything. So it has to be a combination of all those elements,” Ms. Green said.

Developing technologies can help — and hinder — data initiatives.

Today, technologies like blockchain and AI are hailed for their potential to build data systems that are impervious to both hacking and (to a degree) human error.
Imagine an insurance company utilizing the immutable blockchain to encode compliance reports, and AI to study those data sets for instantaneous analytics.
But with all the promises of these developing technologies, should come a healthy dose of skepticism. According to Glen Thomas, vice president for Brand & Communications at IBM, adopters need to be prudent about how they employ these technologies.
“Artificial intelligence needs to be trained,” he said. “All of the data that goes into those systems — the AI system can’t tell whether that data is reliable, biased, or accurate.”
“Bad data will create biased AI systems,” he said. “So the recommendations that come out of them that people rely on may be unfounded, flawed. This goes back to corporate ethics. How we treat data is so important.”
Ms. Green added, “Imagine a world where those unconscious biases, where the algorithms reflect the bias of gender or race, color or ethnicity.”
“Regardless of your age, sex, color, creed, sexuality, physical ability, the data algorithm should not be making a decision alone for you based on the shape of your face, or the orientation of your eyes or whatever,” she said.

Filipinos should realize the value of their private data — because they produce a lot of it.

“Data is the new oil. It is the ultimate most powerful commodity,” Ms. Green said.
As technology continues to become a greater part of daily life, Ms. Green emphasized the importance of being vigilant with one’s data.
In a recent report by cybersecurity company Kaspersky Lab, the Philippines placed ninth in the world in terms of volume of online attacks during the second quarter in 2018, leaping up from 44th a year earlier.
Kaspersky Lab found that the Philippines registered 10.6 million malware infections during the three months to June, more than triple the number of threats from a year earlier.
IBM’s own data found that companies in the Philippines receive anywhere from 50 to 100 cyberattacks a day.
“This isn’t just about banks and airlines and telecommunications,” Ms. Green said. “Here in the Philippines, your number one industry is services, your number two industry is BPO, all of it is driven around data.”
Far from suggesting people go off the grid, Ms. Green simply asks individuals to consider data security as they would consider resources like time or money.
“All of us need to think about data principles and data security in the same way we would think about convenience,” Ms. Green said. “We are suggesting that everyone, enterprises, governments and individuals make decisions, ask those questions.”
 

Search Engine Optimization: The Philippines’ hidden BPO gem

When the term business process outsourcing (BPO) is mentioned locally, call centers come to mind and rightfully so. The industry has been booming for the past 15 years and currently employs some 1.3 million Filipinos. This makes the BPO scene a primary mover of the Philippine economyand is expected to expand  even more for the next several years.
What most Filipinos aren’t aware of is the fact that BPO is an umbrella term that encompasses many different disciplines. Back office functions such as accounting, software development, website design, order entry and virtually any other office function can now be outsourced as long as an internet connection, a computer and the correct process are accessible to a service provider.
Among all these BPO subsets, one is emerging as an increasingly viable and important one in the Philippines. The craft is called search engine optimization (SEO) and it’s an industry that’s changing the lives of tens of thousands of Filipinos with hardly anyone noticing it.
What is SEO?
Strictly defined, search engine optimization is the process of applying known and proven best practices to improve the visibility of a website in the search results of web portals such as Google. The goal of SEO is to help a website’s listings climb as close to the top of search results as possible so they can gain the best chance of being clicked on by potential customers.
SEO is central to any digital marketing campaign as any business will benefit from having Google refer them to the people searching for products and services that they offer. For instance, if a potential customer is looking for a website where they can buy leather shoes from but doesn’t know where to do it, he’ll likely go to Google to see what he can find. As one may guess, the top result on Google for “leather shoes” is the most likely to be clicked on, allowing it to sell to the potential customer before its competitors get a chance.
While other promotional channels on the web such as social media or affiliates can drive traffic to a website, none of them can send the kind of targeted visitors that only Google can. Traffic from Google tends to be more engaged and easier to convert into paying customers. Therefore, it’s no wonder why companies in developed markets such as the USA, Canada and the UK are constantly embroiled in silent wars for search engine dominance. Being ahead of the pack on search results can literally make or break a business.
Why is SEO Outsourced to the Philippines?
The reasons why foreign companies outsource SEO to the Philippines is similar to the rationale behind the offshoring of other BPO work. Lower labor costs, a high level of English proficiency and the richness of its labor market made the Philippines ideal for foreign companies to source work from. According to one of the Philippines’ leading SEO experts, the laws of supply and demand also favor the Philippines.
“As having a digital presence becomes a must for businesses of all sizes, the demand for SEO grows proportionally,” says Glen Dimaandal, CEO of GDI Online Marketing. “However, SEO is still a very niche industry and finding a reliable service provider even in the US can be hard and expensive.”
“It’s why many businesses turn to Philippine SEO agencies for help,” he continues. “Filipinos have shown that they can learn the craft rather quickly and deliver world-class results.”
Dimaandal says that typical SEO retainer rates in the US start at $3,000 per month, often providing only  very basic work. With Philippine SEO service providers, comprehensive SEO service packages typically go for $1,500 per month maximum.
“At the end of the day, it’s all about value for money,” Dimaandal adds. “Why would anyone want to pay twice or thrice the price for basic services when you can get premium work done for a lot less?”
Local SEO Demand
According to the SEO expert, it’s not just foreign companies who are looking for SEO services. Dimaandal says that local businesses have started to recognize the value of SEO and are demanding the service themselves.
“Our clientele used to be 80% US,UK and Australian businesses,” he says. “These days, those account for maybe 50% of our revenue. Filipino companies are now 30% of our market while the rest are companies from Hong Kong, Singapore and Japan.”
Dimaandal credits the rise in the use of smartphones for the increased local demand. Phones have lowered the entry barrier for internet usage among Filipinos and helped even lower-income individuals participate in the online economy.
“Now, even people in their 60s and beyond order from the likes of Lazada, Zalora, and Poundit,” adds Dimaandal. “Even if you own a locally targeted shop like a restaurant or a salon, people now prefer using Google to find businesses like yours.”
“Of course, that goes for your competitors as well. You’ll need to do some SEO to make sure potential customers find you first.,” he continues.
What Type of Companies do SEO?
Hiring a good SEO service provider can be a tricky process. Due to the fact that it’s a relatively new and very niche practice, organizations and individuals can claim expertise and offer it in an effort for a quick cash grab. Advertising agencies, PR firms, web design service providers are often seen offering SEO, but do they really get the job done?
Dimaandal says that it’s possible they can, but adds that it’s unlikely.
“SEO is a very distinct practice that requires highly specialized knowledge,” he says. “While there are indeed some overlaps between PR, advertising, web development and SEO, an agency that specializes in just optimizing for search visibility is still your best bet.”
Dimaandal confides that some of his clients are companies that tried to optimize their websites for search without much success after they sought the help of traditional PR firms and ad agencies. He says that
“There’s a reason why some of our clients are the biggest ad and PR agencies in the US, Singapore and Hong Kong,” Dimaandal adds. “They know marketing, but not the fine details of SEO, so they source that from us. If you’re the client, why would you want to pay extra to an ad agency when you can go straight to an SEO agency like GDI and cut the middleman?”
How Does One Enter the Industry?
Aside from the high demand and the opportunities in it, the most exciting part of the SEO industry may be the fact that anyone can get into it regardless of background and academic attainment. Like call centers, the SEO industry is liberal and people who can perform the work can often find employment.
“There are plenty of online training materials out there to help take you from an absolute newbie to an intermediate-level SEO specialist,” says the GDI CEO. “ I’ve had colleagues who came from all sorts of backgrounds such as computer science, journalism, nursing or even fine arts.”
“The important thing is the willingness to learn and a way for you to apply what you watch and read,” he adds. “Of course coding and writing skills will give you an added advantage.”
According to Dimaandal, an entry-level SEO specialist will make around 15,000-18,000 pesos per month. As the years of experience and skill set grows, so does the pay.
“Mid-level SEOs will make between 40,000-60,000 pesos a month,” he notes. “Very experienced and managerial-level SEOs make 80,000 to 200,000 per month locally. Abroad, rockstar-level SEOs can make as much as $15,000 per month.”
While the exact number of SEO practitioners in the country is unknown, Dimaandal estimates that there must be around 15,000 Filipinos in the industry. This is about 10% of the global total, which is a significant share of the market.
Like call centers, the SEO outsourcing scene is expected to grow even more in the next several years. Unlike call centers, though, search engine optimization and other digital marketing subsets don’t face the threat of AI.

Maiden report flags key financial risks

By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK plans to roll out three new measures in a bid to better manage debt-related risks, at a time rising interest rates and exchange rate movements have been bumping up repayment costs.
The 2017 Financial Stability Report published by the inter-agency Financial Stability Coordination Council (FSCC) said the biggest concern faced by the economy is its rising debt burden, amplified by volatile global financial markets.
“What is clear is that interest rates are rising and emerging market currencies have been depreciating versus the United States dollar,” read the report that was published by the FSCC on Tuesday.
“These must mean that debt servicing is now at a higher cost than in the past, separate from the issue of having more outstanding debt,” it explained.
“This is our central financial stability issue.”
The report of the FSCC — which is composed of the Bangko Sentral ng Pilipinas (BSP), Department of Finance, Insurance Commission, Securities and Exchange Commission and the Philippine Deposit Insurance Corp. — takes stock of financial market risks that could weigh on the country’s growth momentum and overall health of the financial system.
BSP Governor Nestor A. Espenilla, Jr. said rising global interest rates and a weaker peso have repriced debts to be repaid “at higher rates.”
In response, the central bank said it has been crafting new measures to mitigate risks, including to contain debt exposure.
BSP Assistant Governor Johnny Noe E. Ravalo said monetary authorities have been working on the introduction of a debt-to-earnings borrowers test, borrowers’ interconnectedness index and the countercyclical capital buffer (CCyB) as new preventive tools.
The first is a stress test that checks banks’ credit exposure to enterprise and household clients and their ability to pay.
The CCyB will require big banks in the Philippines to accumulate extra capital for use in times of financial stress so that they can keep on lending money.
The central bank has been soliciting industry comments on these planned measures, although Mr. Ravalo said monetary authorities will “try to move forward as quickly as possible” to put them in place.
Pending implementation of these new measures, central bank officials said current debt levels do not appear to be worrisome for now.
“One of the first observations we made is as we entered 2018, the level of cross-border debt actually declined. This means that non-financial corporations as well as banks are actually managing their own debt relative to market pricing,” Mr. Ravalo said in a press briefing.
“On the question of can we sustain the repricing risk, we do not have any indication that will say otherwise.”
The FSCC regards current levels of credit demand of both corporate and retail borrowers as a “clear positive vote” for the country’s economy.

Is the age of double-digit asset growth rates for banks over?

THE COUNTRY’s biggest banks were more profitable in the second quarter even as growth in assets slowed and their capacity to absorb risky assets dipped. Read the full story.
Is the age of double-digit asset growth rates for banks over?

Banks show bigger returns in Q2 despite slower asset growth

By Jochebed B. Gonzales, Senior Researcher
THE COUNTRY’s biggest banks were more profitable in the second quarter even as growth in assets slowed and their capacity to absorb risky assets dipped.
The second quarter edition of BusinessWorld’s Quarterly Banking Report showed the combined assets of the 43 universal and commercial banks (UK/Bs) operating in the country rose 9.85% to P15.39 trillion from P14.01 trillion recorded in the same three months last year.
The asset growth pace seen in the April-June period was slower than the 10.97% logged in the preceding quarter and 13.93% in April-June 2017. This also snapped a two-year streak of double-digit growth in assets.
Money lent by banks in the form of loans and receivables totaled P8.41 trillion by the end of the first half, 18.18% more than the P7.12 trillion in the same period last year.
In terms of profitability, the median return on equity (RoE) of U/KBs improved to 6.38% last quarter from 5.09% in the first quarter and 4.70% in 2017’s second quarter. RoE, which is the ratio of net profit to average capital, measures the amount that shareholders make on every peso invested in a company.
In terms of assets, BDO Unibank, Inc. (BDO) remains at the top, followed by Metropolitan Bank & Trust Co. (Metrobank) and the Bank of the Philippine Islands (BPI). They are also the banks that issued the most loans during the quarter, also in that order.
Is the age of double-digit asset growth rates for banks over?
Among banks with assets of at least P100 billion, Robinsons Bank Corp. topped in terms of growth, increasing 24.79% year-on-year. It was followed by China Banking Corp.’s 17.06% and the Development Bank of the Philippines’ 15.73% increases.
The same three months saw Robinsons Bank as the most aggressive lender, with a year-on-year growth of 42.05%, followed by those of Land Bank of the Philippines (35.67%) and Asia United Bank Corp. (26.22%)
Meanwhile, Metrobank displaced BPI at second place in terms of deposits,with the former having P1.56 trillion and the latter, P1.54 trillion. Both, however, trailed behind BDO’s P2.32-billion deposit base.
ASSET QUALITY
Meanwhile, the banks’ ability to absorb losses from risk-weighted assets eroded as their median capital adequacy ratio (CAR) — a measure of a bank’s solvency — dipped to 17.29% from the 18.19% seen in the preceding three months. Nevertheless, the ratio remains well above the regulatory minimum of 10% set by the Bangko Sentral ng Pilipinas as well as the international standard of eight percent.
The nonperforming loan (NPL) ratio of the biggest banks improved to 1.5% in the second quarter compared to the first quarter’s 1.57%.
Their nonperforming assets (NPA) ratio — the combination of nonperforming loans, foreclosed properties and total assets — edged up to 0.66% from 0.61% three months prior.
As percent of total assets, foreclosed real and other properties fell to 0.34% from 0.35%.
Banks’ coverage ratio — which is the ratio of the total loan loss reserves to gross NPL — was 143.6% during the quarter. This was lower than 152.84% recorded in the preceding three months, but still more than enough to cover the entire value of bad loans held by big banks, with loan loss reserves totaling some P158.827 billion.
BusinessWorld Research has been tracking the financial performance of the country’s U/KBs on a quarterly basis since the late 1980s using banks’ published statements of condition.

Gov’t lines up priority infrastructure for 2019

By Elijah Joseph C. Tubayan, Reporter
THE CURRENT ADMINISTRATION has lined up the start of P36.23 billion worth of large-scale flood control, road and railway projects next year, which marks the midterm of President Rodrigo R. Duterte.
Budget Secretary Benjamin E. Diokno presented the flagship infrastructure projects for 2019 during the Economic Journalists Association of the Philippines Economic Forum at the Ayuntamiento de Manila on Tuesday.
For road and bridge projects under the Department of Public Works and Highways (DPWH), the list consists of the P3.57-billion Improving Growth Corridors in Mindanao Road Sector Project, P2.34-billion Road Upgrading and Preservation Project and the P1.85-billion first phase of the Central Luzon Link Expressway Project.
Also to be implemented by DPWH are the P2.2-billion first phase of the Metro Manila Flood Management Project and the P1.68-billion Flood Risk Management Project covering areas adjacent to the Cagayan, Tagoloan and Imus Rivers.
Next year also marks the start of five railway projects under the Department of Transportation, namely: the P14.04-billion, 37.9-kilometer Philippine National Railway (PNR) North 1 linking Tutuban in Metro Manila and Malolos, Bulacan; the P2.91-billion 102-kilometer first phase of the Mindanao Railway Project that will run through Digos, Davao and Tagum cities in Mindanao; the P1.52-billion first phase of the Metro Manila Subway Project that will include the first three stations along Mindanao Avenue, Tandang Sora and North Avenue, in Quezon City; and the P1.42-billion PNR South Commuter Solis-Los Baños Project.
The government will also provide a P4.7-billion subsidy for the Metro Rail Transit Line 3.
MAKING UP FOR PAST NEGLECT
“Without doubt our ‘Build, Build, Build’ program will not be a walk in the park… a major challenge for us is to make up for past neglect on infrastructure,” the Budget chief said, adding that most of the projects will be done through a “hybrid” framework involving initial funding by state budget or official development assistance for the construction phase and public-private partnership for operation and maintenance.
“The hybrid PPP is quicker to mount and less expensive than the traditional PPP. The harsh reality is that the traditional PPP takes 29 months from project identification until the shovel hits the ground. By contrast, the Clark Airport Expansion Project — the biggest example of hybrid PPP so far — is going full blast,” Mr. Diokno said.
“With hybrid PPP we expect the cost of financing lower, within the neighborhood of 2-3%… This implies that the user charge for the facility would be more affordable.”
Public Works and Highways Sec. Mark A. Villar said in the same forum that the government has “never spent so much in the history of the department with a 40% higher disbursement rate.”

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