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EasyCall grows 18% in Q1

EASYCALL.COM.PH

EASYCALL Communications Philippines, Inc. sustained its growth trajectory in the first quarter of 2018, as the company explores opportunities in the telecommunications space.
In a disclosure to the stock exchange on Friday, EasyCall said it generated a consolidated net income of P2.73 million, up 18% compared to the net income of P2.32 million in the same period a year ago.
The higher earnings was mainly the result of the increase in service income and higher equity in net earnings of ePerformax International, Inc. where it has a 3.8% interest.
EasyCall was able to keep its growth momentum, building on its positive performance in 2017 when earnings climbed 33%.
Consolidated service income in the January to March period stood at P15.13 million, 23% higher than the P12.25 million booked in the prior year.
EasyCall was the undisputed leader of the local paging industry until the onset of short message service. In 2001, the Delgado-owned Transnational Diversified Group acquired the company and ventured into the IT-BPO industry and technology services, and eventually data connectivity through Very Small Aperture Terminal (VSAT).
“As it is today, there are still so many unserved and underserved parts of the Philippines that could substantially benefit from data connectivity, and we want to be able to bridge the digital gap in the country,” Zaki Antoni H. Delgado, who was named EasyCall’s president in July 2017, was quoted in the statement as saying.
EasyCall is ready to dive into new opportunities and expand its business in line with the initiatives of the government after being awarded a Certificate of Public Convenience and Necessity (CPCN) by the National Telecommunications Commission in 2016.
“At the same time, we are seeking more opportunities aligned with AmBisyon Natin 2040, especially on the connectivity infrastructure side,” Mr. Delgado said.
Shares in EasyCall added 40 centavos or 2.05% to close at P19.90 each. — Krista Angela M. Montealegre

UnionBank to conduct P10-B SRO in July

UNIONBANK of the Philippines, Inc. is set to conduct its P10-billion stock rights offering (SRO) in July, which will raise additional capital for the lender’s growth.
UnionBank Chief Financial Officer and Treasurer Jose Emmanuel U. Hilado said the lender will conduct its SRO in “July of this year.”
“That was recently approved by the board. The plan is to issue that by July of this year,” Mr. Hilado told reporters following UnionBank’s annual stockholders’ meeting on Friday.
He said Citibank will be the arranger of the rights offer.
Earlier this month, the Aboitiz-led lender said it will be raising P10 billion via SRO.
“The additional capital will increase the common equity Tier 1 and total capital adequacy ratio of the bank,” UnionBank said in a previous disclosure to the local bourse, adding that the proceeds will be used for the continued growth of its assets.
Aside from the SRO, Mr. Hilado said the bank can tap its euro medium-term note (EMTN) program as well as long-term negotiable certificates of deposit (LTNCD) programs to raise more funds.
“The EMTN Program that we set up last year was up to $1 billion,” told Mr. Hilado. “We’ve drawn only $500 million. so we can draw another 500 million anytime”.
A medium-term debt program stands as a flexible facility for companies to issue notes in the foreign currency in global capital markets, allowing them to tap a bigger avenue for their fund-raising activities.
These debt papers are offered on a continuing basis until such a time when the ceiling amount is reached.
Credit rater Moody’s Investors Service earlier assigned UnionBank’s EMTN program an investment-grade rating of “Baa2” with a “stable” outlook.
Aside from the foreign currency note program, Mr. Hilado added the bank can also launch another tranche of LTNCDs, noting that the long-term note program is still subject to market conditions and regulatory approval.
Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”
In February, UnionBank raised P3 billion from LTNCDs with a tenor of 5.5 years. They carry an interest rate of 4.375% to be paid quarterly until Aug. 21, 2023.
The issuance is the first tranche of UnionBank’s P20-billion LTNCD program approved by the central bank.
UnionBank, the ninth largest commercial bank in asset terms in the country as of end-2017, logged a net profit of P2.9 billion last quarter, up 31.8% from the P2.2 posted the same period last year, on the back of sustained growth across its businesses.
UnionBank shares closed flat on Friday at P89 apiece. — Karl Angelo N. Vidal

DA to ask South Korea for lower export tariffs

THE Department of Agriculture (DA) is seeking little to no tariffs for agricultural exports to South Korea through a preferential trade agreement (PTA) expected to be signed next month.
Agriculture Secretary Emmanuel F. Piñol told reporters on Friday on the sidelines of the 12th International Food Expo that the government wants to secure zero tariffs, especially for banana exports currently slapped a 30% levy.
“We’re asking that it could be at least 10%. [But] the 10% is only our second option. We’re actually asking for a zero tariff. That’s the only fallback position,” he added.
Mr. Piñol will be joining President Rodrigo R. Duterte on his visit to South Korea next month to sign two memoranda of understanding (MoU).
The MoUs will cover agricultural cooperation between the two countries and the amendment of a Korean Program in the International Agriculture Center.
The PTA, which will be handled by the Department of Trade and Industry, will cover all items traded between the two countries.
Mr. Piñol said the Philippines is pushing for the PTA “because [Finance] Secretary Carlos G. Dominguez III feels that the setup is unfair.”
“The fruits from Korea, for example, their apples are only slapped a 5% tariff and our bananas have 30%. So this doesn’t look fair… Ecuador’s exports have no tariff with them,” he added.
“Our proposal is to — initially, if it’s fine with them — have it at 10% and once the PTA is signed, then we can renegotiate the rate of the tariffs.”
The DA will also promote the export of the country’s excess egg production during the visit. The Philippine Statistics Authority earlier reported that chicken egg production posted the highest increase in the first quarter. — A.G.A. Mogato

Globe expands LTE coverage to Jolo, Tawi-Tawi, Batanes

GLOBE Telecom, Inc. said it installed 934 new long-term evolution (LTE) sites during the first quarter of the year, as it expands its network to reach the northernmost and southernmost areas of the Philippines.
In a statement, the telecommunications giant said it is maximizing the company’s spectrum assets to keep delivering to the market’s continuing use of mobile data.
“We are expanding our deployment of LTE sites including the far flung areas like Jolo, Tawi-Tawi and Batanes making our total sites now close to 11,300,” Joel R. Agustin, the company’s Vice-President for Governance of the Network Technical Group, was quoted in the statement as saying.
Globe said it used the 700 megahertz (MHz), 1800 MHz and 2600 MHz frequencies for the new deployments. The 700 MHz and 1800 MHz frequencies are in place for LTE sites in Jolo, Tawi-Tawi, and Batanes.
“Even our customers in the most southern part of Mindanao like Jolo and Tawi-Tawi and the most northern part of Luzon like Batanes can now experience our LTE service,” Mr. Agustin was quoted as saying.
Globe and PLDT, Inc. jointly acquired the 700 MHz and 200 MHz frequencies from San Miguel Corp.’s telecommunications assets in 2016. In 2017, Globe was able to set up 10,300 LTE base stations.
The Ayala-led company also said it has fired up close to 200 massive multiple-input multiple-output (MIMO) sites using 2600 MHz. MIMO is a technology that can multiply the capacity of a wireless connection without the need for more antennas, meaning more users with more stable, higher data rates could be accommodated without using as much power.
The company posted a net income attributable to equity holders of P4.7 billion from January to March, up 27% from the P3.8 billion it earned in 2017.
Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

CITEM targets $150 million in IFEX sales

THE CENTER for International Trade Expositions and Missions (CITEM) is targeting a “conservative” $150 million in sales during the 12th International Food Expo (IFEX).
Trade Undersecretary for Trade and Investments Promotions Group Nora K. Terrado said on Friday they are expecting a steady performance as last year’s sales reached $184 million versus the same $150-million goal.
“I’d like to target the same and breach that. That’s the minimum threshold,” she added.
Ms. Terrado said the $150-million target was set as the 450 exhibitors are considered small and medium-sized enterprises.
“If you look at the floor today, you will see that a lot of those are developmental. You will see less of the larger enterprises,” she said. “[That’s] because this is a platform to introduce local products that are ready for exports but many of them are first-timers.”
Ms. Terrado noted that the $150 million does not include sales generated after the three-day event if exhibitors ever close a business to business (B2B) deal with buyers.
“I think the difference will come from…sale from the local market. [My] gut feel tells me from the behavior of the visitors now that there will be a lot more local orders from institutional buyers, so that is not included in the $150 million,” she added.
Starting this year, IFEX will become an annual event to provide more selling opportunities for local companies involved in agribusiness.
During the three-day program, CITEM will also host an event called IFEX Connect which will serve as a matchmaking platform to secure B2B partnerships.
In a statement, CITEM noted a 14% average increase in both foreign and local buyers participating in the last four expos.
From 2009 until last year, most of the foreign buyers came from Australia, Canada, China, Japan, Malaysia, Singapore, South Korea, Taiwan, United Arab Emirates and the US.
IFEX is being held in partnership with the Bureau of Fisheries and Aquatic Resources and the Agribusiness and Marketing Assistance Service of the Department of Agriculture. — AGAM

Peso weakens after BSP reserve requirement cut

THE PESO dropped against the dollar on Friday, recording a new near 12-year low, following the Bangko Sentral ng Pilipinas’ (BSP) reserve requirement cut.
The local currency ended at P52.70 versus the greenback on Friday, 15 centavos weaker than the P52.55-per-dollar finish on Thursday.
Friday’s finish a fresh low for the peso, being its weakest in nearly 12 years or since July 19, 2006’s P52.745.
The peso opened the session slightly weaker at P52.58, while its worst showing stood at P52.705 against the US currency. Its intraday high, meanwhile, was at P52.50.
Dollars traded went down to $719 million from the $899.95 million logged the previous trading.
A foreign exchange trader said the peso weakened following BSP’s announcement of a cut in banks’ reserve requirement ratio.
“We broke past the resistance level again because of the BSP cutting reserve requirements,” the trader said in a phone interview. “That’s bearish for the peso.”
In a statement issued after markets closed on Thursday, the BSP announced that the reserve requirement ratio (RRR) imposed on universal and commercial banks will be trimmed by a percentage point to 18% effective June 1.
This follows a cut of the same magnitude announced on Feb. 15 that took effect last March 2.
“If you cut the reserve requirement, you’re putting in more peso into the system. More supply of peso means a bearish peso,” the trader added.
An estimated P90 billion will be released from idle funds kept by banks with the BSP which they may soon deploy for lending and other uses.
However, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the reserve requirement cut should not have any impact on the peso.
“I’m expecting it has no impact and it should not be a distraction from what is the monetary policy stance [of the BSP],” Mr. Asuncion told BusinessWorld on the sidelines of the Aboitiz-led lender’s annual stockholders’ meeting on Friday.
“I don’t think it will have any material or fundamental impact on the peso,” he added.
Meanwhile, another trader said on Friday: “The peso closed weaker today amid rather optimistic outlook on the US-North Korean summit despite uncertainties over the last 24 hours.”
US President Donald J. Trump called off its meeting with North Korean leader Kim Jong-un scheduled next month in Singapore, citing the “open hostility” of Pyongyang.
“The peso erased its gains in the afternoon trade as the North Korean government expressed its willingness to continue the talks surfaced later today, and closing weaker against the dollar,” the trader added. — Karl Angelo N. Vidal

PSEi ends the week in the red

By Denise A. Valdez
LOCAL stocks slipped on Friday, after an overnight drop in Wall Street and the central bank’s move to reduce banks’ required reserves.
The Philippine Stock Exchange index (PSEi) closed at 7,647.51, dropping 5.02 points or 0.07%. The broader all shares index, meanwhile, gained 7.32 points or 0.16% to close at 4,654.67.
Regina Capital Development Corp. managing director Luis A. Limlingan said the market’s performance was affected by a steep fall in energy-related shares in Wall Street on Thursday.
“The three main equity benchmarks in the US closed off the worst levels of the session after President Donald Trump canceled a planned summit with North Korean leader Kim Jong Un, citing ‘open hostility’ from the country,” he said.
On Thursday, Mr. Trump called off the planned meeting with Mr. Kim scheduled on June 12 because of North Korea’s “anger” and “hostility”.
For Aniceto K. Pangan, equities trader at Diversified Securities, Inc., there were no strong factors to push the market higher.
“Market continued its consolidation today with a downward bias on profit taking due to absence of catalyst,” he said.
The market also reacted to the Bangko Sentral ng Pilipinas’ (BSP) announcement on Thursday that it was cutting the banks’ reserve requirement ratio by one percentage point. The move is expected to add around P100 billion to the financial system, after it takes effect on June 1.
“The market was buoyed by the BSP trimming its reserve requirement to 18% effective June 1. Note that the BSP has a lot of room still to cut the reserve requirement as the average for the region is around 7.5%,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said.
Sectoral indices ended mixed on Friday. The property index lost 17.67 points or 0.46% to close at 3,820.46, followed by financials which slipped 11.54 points or 0.6% to 1,882.51. Services fell by 6.75 points or 0.44% to 1,512.16.
On the other hand, industrials added 79.33 points or 0.73% to close at 10,974.36, while mining and oil advanced 33.82 points or 0.34% to 9,744.15. Holding firms gained 31.84 points or 0.43% to 7,506.16.
Value turnover remained low at P4.8 billion, while net foreign selling increased to P268 million.
Advancers outnumbered decliners, 95-92, with 56 left unchanged.
For Mr. Pangan of Diversified Securities, the market next week “may retest the 7,500 major support level due to renewed uptrend of US 10-year treasury yields.”
Regina Capital’s Mr. Limlingan said traders will be looking at MSCI, Inc.’s completion of its rebalancing, as well as bank lending data and Nikkei Asian Review’s Purchasing Manager Index (PMI).
“Overseas investors will take cues from PMI and growth numbers in the US, unemployment updates in the EU, and manufacturing data from China,” he said.

COA flags DOJ fund transfers worth P621 million

by Dane Angelo Enerio
The Commission on Audit (COA) has flagged as anomalous several undocumented fund transfers, payrolls, and unauthorized bank accounts in its 2017 audit report on the Department of Justice (DoJ.)
“[W]e noted that there were transfer of funds (amounting to P621,646,352.48) where no corresponding payments were made while there were also payments (amounting to P305,390,659.08) with no corresponding transfer of funds,” read the COA report which was released on Thursday, May 24.
It added: “[T]here were transfer of funds which amount did not correspond to the payments made.”
Among its many comments and observations, the COA auditors flagged as anomalous the several Journal Entry Vouchers (JEV) that were not supported by necessary supporting documents.
The four JEVs amounting to P27,680,253.40 were all dated March 1, 2018.
At that time, lawyer Vitaliano N. Aguirre II was still the head of the department before resigning and being replaced by his successor, Justice Secretary Menardo I. Guevarra, on April 5.
The auditors also flagged as anomalous the existence of three unauthorized bank accounts holding a combined amount of P65,685,647.45.
COA in its report recommended the money to be transferred or deposited to the National Treasury.
They noted, “out of the 34 prior years’ audit recommendations, 18 were fully implemented; 13 were partially implemented, while three were not implemented.”
When sought for comment, Mr. Guevarra told BusinessWorld in a text message he “will look into these matters and comment a little later.”

Work stoppage remains in effect at Hanjin Heavy, DoLE says

A work stoppage order remains in effect at Hanjin Heavy Industries and Construction Philippines (HHIC) until it has improved its working conditions.
The Department of Labor and Employment (DoLE) made this announcement after it issued the order regarding a May 12 accident that resulted in the death of two employees at its facility in Subic Bay.
“As of now, all work in that area has stopped,” Bureau of Working Conditions (BWC) Director Ma. Teresita Cucueco said.
She added that Hanjin’s subcontractor, Binictican I-Tech was given a “cease and desist from doing work in Hanjin because of the accident.”
Operations in Hanjin will start again if it conducts remedial measures that will make the work environment safer.
“Once the DoLE has seen the proper safety and health measures are there then they will assess and see if they can lift the stoppage order,” Dir. Cucueco said.
Although HHCI Philippines has incurred safety violations in the past, it will nevertheless be assisted by the DoLE in implementing proper safety standards. Dr. Cucueco emphasized the need for “safety officers” to monitor operations and training in the company. They should also hold job orientations for every worker.
Workers who perform their duties at high elevations should have lifelines and harnesses so “falls won’t be a cause of death,” Ms. Cucueco said, referring to one of the standards that the company should follow.
The labor agency won’t file charges against HHCI but said that the relatives of the fatalities are free to do so.
“It is in their (power) to file the case,” Dir. Cucueco said. DoLE can only monitor “administrative and technical measures” the company should comply with.
The DoLE will be stricter in safety measures especially now that the Occupational Safety and Health Bill has recently passed.
“Work stoppage will have penalties and fines,” Ms. Cucueco said. DoLE hopes that this will discourage companies from operating without any safety and health measures for workers. The fine will be P100,000/day until the company has completed its remedial measures. — Gillian M. Cortez

China urges US, North Korea to ‘show goodwill’ after summit scrapped

Beijing, China — China urged the United States and North Korea on Friday to be patient and “show goodwill” after US President Donald Trump cancelled his planned summit with North Korean leader Kim Jong Un.
China had backed the summit, though analysts suggested that Beijing was likely worried that Trump and Kim could end up striking a deal that would harm its strategic interests in the region.
Foreign ministry spokesman Lu Kang noted that both Trump and North Korea still left the door open to holding talks after the US leader scrapped his meeting with Kim on June 12 in Singapore.
“The recent easing situation on the peninsula is hard won, the political settlement process is faced with a rare historic opportunity,” Lu told a regular press conference.
“We believe as the parties directly engaged on the issue, the summit of North Korea and US can play a crucial role for promoting the denuclearisation of the peninsula,” Lu said.
“Under the current circumstances we hope both North Korea and the US can cherish the recent positive progress, stay patient, show goodwill, move in the same direction and continue to stay committed to promoting the denuclearisation of the peninsula.”
Beijing’s relations with Pyongyang, its traditional ally, had been strained by the nuclear crisis, with China backing a slew of United Nations sanctions following the North’s atomic and missile tests.
But this year President Xi Jinping met twice with Kim within two months as they sought to repair ties. China remains Pyongyang’s main major ally and economic partner.
Trump suggested earlier this week, before cancelling the summit, that the veteran Chinese president may have had an influence on the younger North Korean autocrat, whose position apparently hardened after meeting Xi twice within a short period.
But Lu denied that China had any “ulterior motives”, stressing that Beijing was committed to denuclearisation of the peninsula, peace and resolving the issue through dialogue.
“Our position has never changed,” he said.
Lu also rejected the notion that China could use the North Korea issue as a bargaining chip in its trade negotiations with the United States.
“China’s position on China US trade is always consistent and above board,” he said.
China also welcomed Pyongyang’s announcement that it had completely dismantled its Punggye-ri nuclear test site in the country’s northeast.
“From the TV we can see that the DPRK has taken concrete measures to dismantle the Punggye-ri nuclear test site,” Lu said, using the abbreviated version of the country’s official name.
“We believe it is of important significance to promoting the denuclearisation of the peninsula, we believe it is worth acknowledging and encouraging.” — AFP

Global Ferronickel delays planned P1-billion share sale

Global Ferronickel Holdings, Inc. is delaying its planned P1-billion follow-on share sale to give the Securities and Exchange Commission (SEC) more time to review its regulatory filings.
In a letter to the stock exchange on Friday, May 25, one of the country’s largest nickel miners said the SEC’s Markets and Securities Regulation Department (MSRD) and the Office of the General Accountant (OGA) are still evaluating the updated prospectus and audited financial statement filed last May 9.
Global Ferronickel intended to price the shares on May 18 and launch the offer period on May 28.
“In light of this, we seek your consideration to suspend our present timetable in order to provide the SEC MSRD and OGA with sufficient time to review and clear our updated Prospectus and AFS,” Global Ferronickel said.
“We shall immediately provide the exchange with an updated timetable as soon as we get clearance from the SEC,” it added.
Shares in Global Ferronickel inched up three centavos or 1.27% to end at P2.39 each on Friday. — Krista Angela M. Montealegre

Duterte awards medals to soldiers wounded in action

President Rodrigo R. Duterte on Thursday, May 24, honored at least seven wounded-in-action soldiers in Davao City as he awarded them the medals of the Order of Lapu-Lapu with the Rank of Kampilan in recognition of their “exemplary service.”
“[Mr.] Duterte visited seven wounded-in-action soldiers at the Metro Davao Medical Research Center (MDMRC) on Thursday to boost and uplift their morale. During the hospital visit, President Duterte personally awarded the medals of the Order of Lapu-Lapu with the Rank of Kampilan to the soldiers in honor of their courage, bravery, and sacrifice in the service of the country,” the Presidential News Desk (PND) said in a press statement.
The Order of Lapu-Lapu, Rank of Kampilan, according to the PND, “is conferred by the President to recognize exemplary service by workers of the government and private individuals who are wounded, injured, or suffered great loss of property for their participation in the advocacy of the President.”
The wounded soldiers were “Pfc. Nicasio Badana III, Pvt. Michael Liban, Pfc. Jackson Macaraig, Cpl. Kith Domingo, Pvt. Roy Inovejas, Pfc. Roger Belas, and Pfc. Daniel Fabular.”
Soldiers Inovejas, Belas, and Fabular “were injured by improvised explosive device in Mabini, Compostella Valley last May 21,” the PND said.
Meanwhile, Mssrs. Badana, Liban, and Macaraig “sustained injuries in an encounter in Surigao del Sur on May 18 while Domingo was hurt in a separate encounter on May 19.” — Arjay L. Balinbin

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