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Gender inequality in the Philippines

AN EQUAL CHANCE for Filipino women in the workplace and in society could translate into a 7% increase in the country’s economic growth or $40 billion a year by 2025, said a new study that ranked the Philippines as the region’s leader in gender equality in work. Read the full story.
Gender Inequality

Philippines AirAsia eyes IPO before end of 2018

By Denise A. Valdez
PHILIPPINES AirAsia, Inc. is targeting to conduct its long-awaited initial public offering (IPO) before the end of 2018.
In an interview with reporters in Clark, Pampanga on Thursday, AirAsia Group Chief Executive Officer (CEO) Anthony Francis “Tony” Fernandes said the low-cost Philippine carrier still needs to secure clearance from its board to wipe out its negative equity, as well as resolve issues with the Philippine Stock Exchange.
“We have a board meeting on May 25, and we are in the process of going through the regulatory issues with PSE. We need some clearances from the board to wipe out our native equity. So hopefully we can announce something in the next month or so, as to precise timing,” he said.
AirAsia Philippines initially scheduled to launch its IPO in 2016, postponing it several times.
Mr. Fernandes said the company is now looking to raise more than the $250 million it had initially projected for its IPO.
“We’re doing very well in the Philippines right now… We had a baptism of fire when we came in here. We weren’t warmly welcomed by our competitors. They did everything to eradicate us. And now we’ve crossed over that. That made us tougher, smarter, and we’re now in a good position. Philippines is probably the best kept secret. There’s so much to see, so many places to go. But the connectivity is poor. So what we’re trying to do is build more connectivity,” the AirAsia CEO said.
Mr. Fernandes said the Philippines is the last of its ASEAN units to be listed, including Malaysia, Indonesia and Thailand.
Once all its Southeast Asian operators are listed, Mr. Fernandes said he intends to form one holding company for the AirAsia Group, allowing it to become one economic unit in the ASEAN.
“Now AirAsia Group owns 100% of Malaysia, 40% of Philippines, 49% of Indonesia, 45% of Thailand. Eventually, I hope we can swap those shares into one company. So let’s say the 60% owned by Filipinos would be able to go up to AirAsia Group. So they wouldn’t just have a share of Philippines, they would have a share of the whole airline. That’s the idea,” he said.

SM opens 4th Pampanga mall in provincial push

SM PRIME Holdings, Inc. is expanding its presence in Pampanga with the opening of its fourth mall in the province on Friday (May 18).
In a statement issued on Thursday, the Sy-led firm said SM City Telabastagan will add 55,000 square meters (sq.m.) of gross floor area (GFA) to its portfolio.
The new mall located along McArthur Highway has two floors containing shopping, multi-cultural dining, entertainment zones, and six digital cinemas. It will also feature staple SM tenants such as The SM Store, SM Supermarket, Uniqlo, Surplus Shop, Watsons, SM Appliance Center, Miniso, Ace Hardware, and BDO and China Bank branches.
SM Prime noted that 84% of SM City Telabastagan’s leasable space has already been awarded to tenants.
“The unwavering support of our fellow Pampangueños and the fast-growing economy of the province have led us to open yet a new mall, this time in Telabastagan,” SM Prime President Jeffrey C. Lim was quoted as saying in a statement.
SM City Telabastagan’s opening forms part of the company’s push toward the provinces in a bid to further expand its footprint in the country. By the end of March, SM Prime’s provincial malls now account for 52% of its total revenues, versus a 46% contribution in 2014.
“Alongside our first three malls in the province, SM City Pampanga, SM City Clark, and SM City San Fernando Downtown, we see SM City Telabastagan contributing further to the continuous development of Pampanga, providing both job opportunities and modern lifestyle and entertainment to its residents,” Mr. Lim said.
This brings SM Prime’s total number of malls in the Philippines to 70. It ended 2017 with 67 malls in the Philippines, then opened SM Center Imus in Cavite last February and SM City Urdaneta Central in Pangasinan earlier this month.
The listed company is also set to open SM City Legazpi in Albay and SM Center Ormoc in Leyte within the second half of the year.
SM Prime targets to end the year with a total of 9.7 million sq.m. in terms of GFA, across 73 malls in the Philippines and seven in China. It committed to spend P80 billion in capital expenditures this year to fund this expansion program.
The company’s provincial expansion allowed it to book a 15% profit increase to P7.6 billion in the first quarter of 2018. Revenues likewise gained 14% to P23..4 billion during the period.
Shares in SM Prime went down 3.67% or P1.40 to close at P36.75 each at the Philippine Stock Exchange on Thursday. — Arra B. Francia

Revolution Precrafted to supply villas for Puerto Azul project

REVOLUTION Precrafted Properties Philippines, Inc. has been tapped by Boulevard Holdings, Inc. (BHI) for an integrated resort project in Cavite that is expected to generate P6 billion in sales.
In a statement, Revolution Precrafted said it has signed an agreement with the listed property developer where it will supply at least 800 units in a 12-hectare property inside Puerto Azul Beach Club and the Valleys in Ternate, Cavite.
The units to be built include resort villas sized 23 square meters (sq.m.), 36 sq.m., and 60 sq.m. The project will also feature two-storey condominiums, an exclusive village, a grand beach club, restaurants, and retail spaces.
“This project is part of our efforts to diversify and get involved in the lifestyle and tourism sector… Once completed, the Puerto Azul project will revive tourism activity in the area,” Revolution Precrafted Founder and Chief Executive Officer Jose Roberto R. Antonio said in a statement.
Under the deal, Revolution Precrafted will be in charge of the project’s master plan, land development, and the construction of the residential and leisure units.
Mr. Antonio said the company targets to start land development by the fourth quarter of this year, with the initial residents expected to move in 18 months after that.
The Puerto Azul project will be the first under Revolution Precrafted’s leisure and hospitality segment, Revolution X. Here, investors can own properties with the option of entering into a management agreement with a revenue-sharing scheme.
BHI’s partnership with Revolution Precrafted forms the first phase of its project in Puerto Azul, where it targets to add another 3,000 residential units for the second phase.
Revolution Precrafted has been striking a string of international deals in the past three months, which will expand its footprint to Dubai, Malaysia, and the Caribbean.
In Dubai, it has partnered with Seven Tides for a $3.2-billion project called World Islands. The company will also be supplying affordable housing projects in Okkyin in Myanmar, as well as a luxury resort project in Okinawa worth $300 million.
Locally, the company’s projects include the $1.1-billion Batulao project in Nasugbu, Batangas and the $750-million Revolution Flavorscapes in Mexico, Pampanga. — Arra B. Francia

Middle-aged women are real action heroes says Cannes director

CANNES — Forget The Rock and Bruce Willis. Middle-aged women are the real action heroes, according to the maker of a fast-paced feminist film pleasing crowds at the Cannes film festival.
Benedikt Erlingsson said there is nothing far-fetched about his action hero Halla, a broody choir director staring 50 in the face who becomes an eco-warrior in Woman at War, outrunning special forces units after sabotaging electric power lines.
“If you look at any environmental movement, or any activist group, you will find it is middle-aged women who really change the world,” he to AFP. “They are the committed ones. They get things done.”
The story of Halla’s David-and-Goliath battle with the Icelandic government and its military to save the island’s pristine highlands from aluminium smelting has delighted critics.
“Is there anything rarer than an intelligent feel-good film that knows how to tackle urgent global issues with humor as well as a satisfying sense of justice?” said Variety.
“Look no further,” added critic Jay Weissberg, who called it “gloriously Icelandic and near-perfect.”
And it also won the first prize of the festival, the best script, at the end of Cannes Critics’ Week late Wednesday.
Jury chief Gerard Krawczyk called it a “moving and just film of enormous charm with a great central performance and a sharp sense of the absurd.”
SUPERHUMAN ESCAPADES
Women — including the singer Bjork — have been at the forefront of the real-life struggle to save Iceland’s vast wilderness which has been threatened by dams for hydro-electric schemes.
And historically, Erlingsson argued, the most famous environmentalists in the country that elected the world’s first female president have been women.
In the film, the heroine Halla blows up pylons in between choir practice and takes on the identity of a figure from Icelandic legend, the “Woman of the Mountains,” to stop the government selling out to a Chinese multinational.
In several superhuman escapades, she runs for miles across bogs and mountains, covers herself with a dead sheep and hides inside a glacier to outwit helicopters and heat-seeking drones.
The authorities launch a huge woman-hunt — but Halla is always one step ahead every time.
The role has won actress Halldora Geirharosdottir glowing reviews. “We both did theater together when we were children. Even then she was better than me,” Erlingsson told AFP.
MOST FEMINIST FILM GOES TO A MAN
In a year when the #MeToo movement has seen many movies featuring strong women at Cannes, the film has been called the most feminist of the festival — even though it was made by a man.
Erlingsson said that Iceland had a “strong matriarchy but it is not quite as feminist as many would like to think.”
Even so he is working on a new female-led film about the fight for gender equality through the ages that will range in time from antiquity to 2077.
Women at War is more than a mischievously funny feminist story, Erlingsson insisted.
He described the film as “mainstream fairy tale about the crazy economics of the world we live in. Eighty-five percent of the hydro power in Iceland is being generated for foreign companies who do not even pay taxes,” he claimed.
“And then the aluminium smelters say they are saving the planet by using green energy from hydro,” he told AFP.
The director of the acclaimed Of Horses and Men said he got the idea after NATO chose environmental activists as the “enemy” for its last war games on the island.
Another quirky Icelandic drama, The County, from the lens of Grimur Hakonarson, whose film Rams won the Un Certain Regard prize three years ago at the festival, has also been snapped up by distributors from across the world at Cannes. — AFP

PSE net income declines by 40% in Q1

PSE
THE Philippine Stock Exchange, Inc. reported lower profits for the first quarter of 2018. — PHILIPPINE STAR/KRIZ-JOHN ROSALES

THE Philippine Stock Exchange, Inc. (PSE)’s net income fell by 40% in the January to March period, due to lower listing-related fees and higher expenses after its transfer to Bonifacio Global City (BGC).
In a regulatory filing, the bourse operator said net income dropped to P93.85 million in the first quarter of the year, from P155.53 million it generated in the same period in 2017.
Operating revenues went down 4.2% to P298.44 million, as the PSE managed to temper the slowdown in listing-related fees with higher trading-related and service fees.
Listing-related fees dropped by 36.3% to P26.44 million for the quarter, which came from eight follow-on offerings (FOOs) conducted from January to March. The PSE noted that these issuances had lower aggregate value compared to combination of one initial public offering and six FOOs in the same period last year.
Meanwhile, higher trading volume for the period prompted a 40% increase in trading-related fees. The PSE said daily value turnover averaged at around P8.68 billion this quarter, versus P6.82 billion in the same period last year.
The PSE also incurred 21% higher expenses to P162.48 million primarily because of its transfer to its new office building in BGC, Taguig City. It noted that occupancy costs, which account for around 15% of its total expenses, jumped by 103% due to an increase in dues for its BGC office given the higher rates in the area and bigger office spaces.
Shares in PSE lost 80 centavos or 0.38% to close at P209.20 each on Thursday. — Arra B. Francia

Happiness makes hit songs

PARIS — Hit songs today are “happier,” more danceable and more likely to be sung by women than songs that fail to make it to the charts, a study into 30 years of musical evolution revealed Wednesday.
But also it noted a somber trend: while people clearly prefer happy music, there is less and less of it.
“More and more unhappy songs are being released each year,” a research team from the University of California Irvine reported in the journal Royal Society Open Science.
Overall, they found that “happiness” and “brightness” in music has declined, “while ‘sadness’ increased in the last 30 years or so.”
But hit tunes defy the trend, and tend to be “much” happier than unsuccessful ones — think of Pharrell Williams’ “Happy.”
The findings of the study, which analyzed the “sound” characteristics of popular tracks but not their lyrics, echoed earlier research showing that “positive emotions” in music was dwindling, the team said.
A previous study covering 1980-2007 found that music lyrics have become more self-centred, with increased use of the words “me” and “I,” fewer social words such as “we,” and more anti-social ones such as “hate” and “kill.”
This trend in lyrics are in tune with overall increases in loneliness, social isolation, and mental disorders across society.
The new study, based on a massive data trawl of 500,000 songs released in Britain between 1985 and 2015, found that as “happy” music declined, so did the popularity of songs sung by men.
SIGNS OF THE TIMES
“In the recent years, successful songs are more often sung by females,” said the study.
“This is particularly interesting given a large debate about the role of women in the music industry, especially the issues of gender inequality, stereotypes, and the sexualization of female singers.”
Songs were considered successful if they made it into Top 100 charts, which less than 4% of new releases do every year.
Also rising in popularity are songs described as “relaxed” and “danceable,” possibly linked to a rise in electronic music and a converse decline in rock and heavy metal.
The research showed that classical and jazz songs were “unlikely” to be successful. Dance and pop music were the most popular genres.
The team gave examples of happy songs from 1985, including “Live is Life” by Opus, “Freedom” by Wham!, and Bruce Springsteen’s “Glory Days.”
More recent songs with a low happiness index included Sam Smith’s “Stay with Me” and “Whispers” by Passenger, both from 2014.
Can the research help songwriters?
“In a way it could, if they look at the trends that we found and try to follow them,” study co-author Natalia Komarova told AFP.
“But of course a large component of success is still something that even mathematics cannot quantify.” — AFP

Property companies deliver mixed results in Q1

By Arra B. Francia, Reporter
SOME property developers in the country reported mixed results for the first quarter of 2018, amid sustained demand for residential projects.
ROCKWELL LAND

The Proscenium

Rockwell Land Corp. grew its attributable profit by a fifth in the January to March period to P620 million, higher than the P516 million generated in the same period a year ago. This was supported by an 8.8% uptick in revenues to P3.33 billion.
The sale of condominium units accounted for 83% of the group’s revenues at P3.06 billion. The company attributed the higher sales to the completion of Edades Suites and The Vantage, which started revenue recognition in April and December 2017, respectively.
The Lopez-led firm’s commercial unit, meanwhile, delivered P431 million in revenues for the quarter, 26% higher year on year following the completion of Power Plant Mall expansion and additional leased areas from RBC Sheridan.
Meanwhile, revenues from hotel operations dropped by 36% to P68 million after the company discontinued operations of Aruga at The Grove in September last year.
Rockwell rolled out P3.8 billion in capital expenditures from the January to March period, a large chunk of which was spent for the development of The Proscenium, its luxury condominium project in Makati City.
SHANG PROPERTIES
For Shang Properties, Inc. (SPI), attributable profit increased by 21% to P575 million, as it booked higher sales from condominium units alongside higher revenues from rental, cinema, and hotel operations.
Revenues grew by 37% to P2.77 billion, versus the P2.02 billion posted in the same period a year ago. SPI attributed this to higher sales recognition from its projects The Rise Makati and Horizon Homes.
Hotel services also posted higher revenues for the period at P171.1 million on the back of higher occupancy rates.
SPI’s properties include The Shang Grand Tower Project in Makati, St. Francis Shangri-La Place Project and One Shangri-La Place Project in Mandaluyong, among others. It is also the developer of Shangri-La at the Fort’s hotel and residential components in Taguig, which started operations in March 2016.
During the quarter, SPI announced that it is partnering with Robinsons Land Corp. for the development of a P10-billion condominium tower in Bonifacio Global City in Taguig.
ARTHALAND
Meanwhile, listed boutique developer Arthaland Corp. generated a net loss of P2.2 million in the first quarter, against a P6.4-million profit in the same period last year. This came on the back of a 60% drop in revenues to P106.83 million, due to fewer available units for sale.
Arthaland’s projects include the Arya Residences Towers 1 and 2 in Taguig, the first condominium project in the country to receive LEED certification from the United States Green Building Council. The company will be completing Arthaland Century Pacific Tower, its flagship office project, by the second quarter of this year.
The company also has a 38-storey office project in Cebu called the Cebu Exchange, set to start construction in the second quarter of this year.
ARANETA PROPERTIES
Araneta Properties, Inc. (API) also booked a net loss for the first quarter, dropping to P7.8 million versus a profit of P5.42 million in the same period in 2017. Revenues went down by more than half to P11.16 million.
“This performance is directly attributed to marketing strategies implemented in year 2014, specifically the holding on of some inventory for a much better price. This strategy will create a favorable momentum for the company’s operation activities while awaiting for the right timing on the implementation of sales forecast,” API said.

Vietnam unit of Russia’s Rosneft fears Beijing backlash over recent drilling in part of South China Sea

HANOI — Rosneft Vietnam BV, a unit of Russian state oil firm Rosneft, is concerned that its recent drilling in an area of the South China Sea that is claimed by China could upset Beijing, two sources with direct knowledge of the situation told Reuters on Wednesday.
Rosneft said on Tuesday its Vietnamese unit had started drilling at the LD-3P well, part of the Lan Do “Red Orchid” offshore gas field in Block 06.1, 370 kilometers (230 miles) southeast of Vietnam. The block is “within the area outlined by China’s nine-dash line,” according to energy consultancy and research firm Wood Mackenzie.
When asked about the Reuters report of the drilling, China’s foreign ministry spokesman said that no country, organization, company or individual can, without the permission of the Chinese government, carry out oil and gas exploration or exploitation activities in waters under Chinese jurisdiction.
“We urge relevant parties to earnestly respect China’s sovereign and jurisdictional rights and not do anything that could impact bilateral relations or this region’s peace and stability,” the spokesman, Lu Kang, told a regular news briefing on Thursday.
China’s U-shaped “nine-dash line” marks a vast expanses of the South China Sea that it claims, including large swathes of Vietnam’s Exclusive Economic Zone. Maps of the area indicate the block is around 85 kms. (53 miles) inside the contested area.
A series of dashes, the line is not continuous making China’s claims often ambiguous. In recent years, though, China has increasingly patrolled and enforced the area, claiming historic rights to the resources and features within it.
In March, Vietnam halted an oil drilling project in the nearby “Red Emperor” block following pressure from China, sources told Reuters.
That block is licensed to Spanish energy firm Repsol , which has asked Vietnam to pay compensation over the issue.
The Vietnamese foreign ministry did not respond to a request from Reuters for comment.
Russia’s foreign ministry did not respond to a request for comment.
Fearing repercussions and pressure from China, Rosneft Vietnam had wanted to begin drilling with as little attention as possible, despite the statement by its parent company on Tuesday, the sources said.
On Thursday, its parent company said its drilling in the block was within Vietnam’s territorial waters, and in accordance with Vietnamese legislation.
PETROVIETNAM WARNED
Both Rosneft and Russia’s Gazprom have significant development projects in Vietnamese waters that fall within the area claimed by China, said Ian Storey, a region security expert at Singapore’s ISEAS-Yusof Ishak Institute.
“Although Russian diplomats have privately expressed concerns to their US counterparts that China may one day put pressure on Moscow to terminate those projects, so far Beijing has refrained from doing so because of the ever-closer strategic partnership between the two countries,” said Storey.
“It would be a serious blow to the burgeoning Sino-Russian entente if Beijing asked Moscow to end its energy projects in Vietnam.”
China has become Russia’s top destination for exports, largely because Russia is the largest supplier of oil and gas to China, mainly through pipelines.
The drilling in the “Red Orchid” gas field within the block will be undertaken using the “Hakuryu-5” equipment made by Japanese company Japan Drilling Co. Ltd., Rosneft said in that statement.
The Hakuryu-5 arrived in the disputed area on May 6, according to Thomson Reuters Eikon ship tracking data and was still recorded as being inside the block late on Wednesday.
The drilling is significant for Vietnam, which has been struggling to maintain its crude oil and gas output amid already declining production from its key fields and the continuing pressure from China in the disputed waters.
In April, Vietnam’s state oil firm PetroVietnam said that maritime tensions with China will hurt its offshore exploration and production activities this year.
Hanoi and Beijing have long been embroiled in disputes over the maritime boundary, which is a politically sensitive issue in Vietnam.
Police in the central province of Khanh Hoa have launched an investigation into a group of Chinese tourists who were pictured in a local airport wearing T-shirts printed with a map showing the “nine-dash line”, state media reported on Wednesday.
Airport authorities asked the tourists, who arrived at Cam Ranh Airport on Sunday, to take off their T-shirts after going through customs, the Van Hoa (Culture) newspaper reported. — Reuters

Entrance is free: It’s Int’l Museum Day

EVERY YEAR since 1977, the International Council of Museums (ICOM) has held International Museum Day on May 18 to highlight the role of museums as institutions that serve society and its development. This year’s celebration of International Museum Day particularly focuses on “Hyperconnected museums — New approaches, new publics.”
A number of museums in Metro Manila are participating in the celebration.
• Entrance to the National Museum of the Philippines buildings has been free for the last couple of years, but in celebration of International Museum Day, it is opening its newest building, the National Museum of Natural History, today. Note that not all the halls will be open as work setting up exhibits is still ongoing. The three-building National Museum complex — it includes the National Museum of Fine Arts and the National Museum of Anthropology — is located at Rizal Park, Manila. They are open from 10 a.m. to 5 p.m.
• The Metropolitan Museum of Manila will offer not just free admission, but also free guided tours of its featured exhibits on May 18. The tours will be held at 11 a.m. and 2:30 p.m. The featured exhibits are Fascination with Filipiniana: The Vargas Museum Collection, In the Wake of War and the Modern: Manila, 1941 to 1961, and UP FRONT: Encountering the Sacred. The museum, which is open from 10 a.m. to 5:30 p.m., is located at the Bangko Sentral ng Pilipinas Complex, Roxas Blvd., Malate, Manila.
• Bahay Tsinoy, which celebrates role of the Chinese in Philippine history through artifacts, prints, and photographs, will be open today for free from 1-5 p.m. It is located at #32 Anda corner Cabildo Sts., Intramuros, Manila.
• Museo Pambata, the children’s museum which offers eclectic educational exhibits ranging from anatomy to Philippine history, will be open for free from 9 a.m. to 5 p.m. today. It is located at Roxas Blvd., corner South Drive, Ermita, Manila.
• The Yuchengco Museum will celebrate International Museum Day today, 10 a.m. to 6 p.m., by offering free admission to all its exhibitions and galleries. The museum features works by Filipino painters, National Artists, and modernists through prints, paintings, and sculptures throughout the museum. The fourth floor galleries have permanent exhibits on the Yuchengco family and National Hero Jose Rizal. The museum is located at the RCBC Plaza, corner Ayala and Sen. Gil J. Puyat Avenues, Makati City.
• Unlike the other museums, the Ayala Museum in Makati City will celebrate International Museum Day on May 20, a Sunday, starting at 11:30 a.m. Currently on view are the interactive exhibit One Minute Sculptures by Erwin Wurm, and the Bayanihan Hopping Spirit House by Alwin Reamillo which was part of the Manila Bienalle earlier this year. Ayala Museum is located at the corner of Makati Ave. and Dela Rosa St., Greenbelt Park, Makati City.
Aside from the National Museum, some other museums are open for free all year round, including the Museo ni Jose Rizal in Fort Santiago, Intramuros, Manila. The museum, which focuses on the National Hero, houses exhibits which cover everything from his childhood, to his notable writing, to his execution, and includes many artifacts from his life. The museum is open daily from 9 a.m. to 6 p.m. Another museum that is always free is the Museo ng Katipunan at the Pinaglabanan Shrine in San Juan City. The museum focuses on the secret society that led the Philippine revolution against Spain and includes documents, art, and artifacts from the Katipuneros.

Half of Manila homes use DTT device — surveys

MORE than half of homes in Metro Manila are watching television via digital terrestrial television (DTT), ABS-CBN Corp. said, citing surveys conducted by Social Weather Stations (SWS) and Pulse Asia Research, Inc.
The Lopez-led multimedia giant said in a statement the Pulse Asia survey results showed that 51% of homes in Metro Manila and 16% of households nationwide own a DTT box. The SWS survey results showed 56% of Metro Manila homes and 17% of households nationwide have a DTT box.
Pulse Asia and SWS conducted the separate surveys in March.
“The results from the polling firms show that more and more consumers are making the big switch from analog to DTT, as ABS-CBN reports it has sold a cumulative total of five million ABS-CBN TVplus boxes as of May 3,” the company said.
ABS-CBN launched its DTT box, which is branded as TVplus, in 2015. Since then, it has expanded its signal coverage in the country to reach residents in Metro Manila, Bulacan, Nueva Ecija, Pangasinan, Rizal, Laguna, Pampanga, Tarlac, Benguet, Cavite, Metro Cebu, Cagayan De Oro, Iloilo, Bacolod, and Davao.
Rival network GMA Network, Inc. is planning to launch its own digital TV device next month. GMA Chairman and CEO Felipe L. Gozon has said its device will be “smaller” and “cheaper” than ABS-CBN’s TVplus. — Patrizia Paola C. Marcelo

BSP tightens capital infusion rules

By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK has set stricter rules for lenders in choosing strategic investors, as the regulator raised standards on pledges for additional capital.
The Bangko Sentral ng Pilipinas (BSP) issued Circular 1002 dated May 10, which tightens standards for banks in declaring capital infusions from third party investors (TPIs).
BSP Deputy Governor Chuchi G. Fonacier said the new guidelines are meant to ensure the commitment of strategic investors in pouring fresh funds into a lender.
“The crucial part here is: at what point will the investment being made by those TPIs would already be considered as capital of the bank?,” Ms. Fonacier said in an interview when asked to explain the revised rules.
The provisions are specifically important for banks who are in need of bigger capital as prescribed by the central bank, especially distressed banks who are facing regulatory sanctions.
“The tendency is that a bank needing capital will just inform the BSP that they have a TPI, then the TPI will say ‘yes, I’m willing to be an investor of that bank.’ The mere signifying of interest is not sufficient,” Ms. Fonacier added.
“There should really be a concrete action on the part of that particular investor. When you say concrete, to show your commitment is to have an escrow account that is intended really to infuse [capital]. It’s ready, not just a promise.”
The circular requires the submission of documents like escrow deposits as well as certificates that indicate that a TPI’s committed investments are available for the said purpose. This should illustrate the investor’s commitment to bring in additional funding, Ms. Fonacier said.
“In this regard, it is understood that mere submission to Bangko Sentral of a TPI’s Letter of Intent to invest in the bank shall not be considered sufficient action to address the bank’s capital deficiency,” the issuance read, as signed by BSP Governor Nestor A. Espenilla, Jr.
The changes come as higher capital and liquidity requirements required of universal and commercial banks are set to be in full swing next year in compliance with the Basel 3 framework.
Currently, big players are now building up their capital base through stock rights offerings, medium-term notes and deposit certificates, among others.

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