Gov’t rejects all tenders for T-bonds as rates rise

June 27, 2018 | 12:04 am

By Elijah Joseph C. Tubayan, Reporter
THE BUREAU of the Treasury (BTr) rejected all bids for the five-year bonds it offered on Tuesday as the market sought higher rates due to expectations of more policy adjustments from the local central bank.
The government did not accept any tenders for its P10-billion offer of reissued five-year Treasury bonds (T-bond) yesterday, even as bids by banks reached P14.91 billion, almost 1.5 times the amount on the auction block. The T-bonds have a remaining life of four years and eight months.
Had the papers been awarded fully, yields would have climbed to 5.98%, 38.8 basis points higher than the 5.592% logged in the previous auction.
At the secondary market prior to the auction, the debt notes were quoted at 6.1143%.
The five-year bonds were quoted at 5.500% at the close of yesterday’s trading.
“It’s so high, nakaka-choke. We’ve been doing partial awards, but only for this one it’s really not tolerable,” National Treasurer Rosalia V. De Leon told reporters after the auction.
“Even if we did some simulations, we still feel that even if you [do not reach] 6%, we’d only be getting very little out of the offer that we did today,” Ms. De Leon said on Tuesday.
Ms. De Leon said the Treasury still has room to decline some bids given the government’s strong revenue position.
“So we felt that it’s better to reject — after all, we still have a very strong cash buffer coming from the RTB (retail Treasury bonds) and also from the revenue collections,” she said.
The BTr reported on Monday that the government collected P81.5 billion in excess of the programmed revenues in the January-May period, after posting a 19% growth rate to P1.19 trillion in the first five months of the year from P996.5 billion in the same period in 2017.
“The deficit remains very manageable because of the high revenue collections. So that also gives us room to maneuver, not to really accede to the high rates or high yields we are seeing,” Ms. De Leon added.
The January-May fiscal deficit is now at P138.7 billion, 118% wider than the P63.6 billion recorded in the same period last year.
Asked how better revenues would affect the government’s borrowing program in the second half, Ms. De Leon said: “We have to calibrate that because we are also seeing good collections — that means we can afford also to reduce our borrowing program for the rest of the year…taking into consideration of course our rejections. So we have to see how much we can be able to offer during the third and fourth quarter.”
“Of course we have to see if our revenues will also be sustained,” the official added.
Sought for comment, a trader said the market is expecting another rate hike from the Bangko Sentral ng Pilipinas (BSP) — which would be the third for the year after 25-basis point increases done in May and June.
“Investors are eyeing more rate hikes from the central bank, and that the US Fed may also do so. So the BSP may follow,” the trader said in a phone interview yesterday.
Another trader concurred, saying the possibility of further rate hikes are backed up by the weaker peso and the decline seen in local stocks.
“The higher rates were the effect of the recent tariff wars in US and China. The dollar-peso is at the highs, and then stocks are in the bear market. So the tendency is that the interest rates will be higher,” the second trader said in a separate phone interview.
“As the sentiment is towards higher interest rates, the markets would want to push the market higher so the banks tended to go towards the 6% area. But that’s so abrupt,” said the trader.
The national government borrows from local and foreign sources to fund the increased spending and boost economic activity. It plans to borrow a total of P888.23 billion this year to plug its budget deficit that is capped at three percent of the country’s gross domestic product.

Maynilad to spend P70 million for rehabilitation of Dagat-dagatan wastewater treatment plant

June 27, 2018 | 12:03 am

MAYNILAD WATER Services, Inc. is upgrading its sewage and septage treatment plant in Dagat-dagatan, Caloocan City to boost the facility’s efficiency in serving around 16,000 customers in the northern part of Metro Manila.
Ramoncito S. Fernandez, Maynilad’s president and chief executive, said part of the company’s long-term plan is to build the largest sewage treatment plant in its west zone concession area within the Dagat-dagatan plant to produce effluent that meets the stricter quality standards of the Department of Environment and Natural Resources.
“Ultimately, this will help to reduce pollution loading in waterways that empty out to Manila Bay,” he said in a statement.
The company is spending P70 million for the facility’s rehabilitation. The project is expected to be completed in February 2019.
Aside from treating the wastewater generated by customers in Caloocan, Malabon and Navotas, Maynilad’s Dagat-dagatan Sewage and Septage Treatment Plant (DDSSTP) also treats the septage generated by more than four million customers in the northern part of the west concession.
The project involves the refurbishment of laboratory facilities, renovation of the existing power house and hazardous waste storage facility, and rehabilitation of the building and offices at the facility.
“Maynilad’s wastewater infrastructure network currently includes 17 sewage treatment plants, two sewage and septage treatment plants, one septage treatment plant, 42 pumping stations, 21 lift stations, and more than 500 kilometers of sewer lines,” the company said.
DDSSTP is the first facility of its kind in Asia Pacific to attain triple international standard accreditations on Quality Management Systems (ISO 9001:2000) and Environmental Management Systems (ISO 14001:2004) in January 2007, and Occupational Safety and Health Management Systems (OHSAS 18001:2007).
Maynilad serves certain portions of the cities of Manila, Quezon and Makati. It also covers Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon in Metro Manila.
Outside the Philippine capital, it serves the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite province.
Metro Pacific Investments Corp., which has majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

Nazi-loot returned

June 27, 2018 | 12:03 am

BERLIN — A Berlin museum Monday said it had formally restituted a 15^th century religious wooden sculpture to the heirs of former owners, a Jewish couple who fled the Nazi regime. The heirs in turn agreed to sell back the medieval artifact, Three Angels with the Christ Child, at an undisclosed price to the Bode Museum, which will keep it in its collection. The agreement meant “righting an injustice,” said the head of Berlin’s public museums, Michael Eissenhauer, who thanked the heirs for the “grand gesture” that will keep the priceless piece on public display. The delicately carved 25 centimeter (10 inch) tall sculpture from around 1430 shows three floating angels in the clouds holding a cloth on which lies the sleeping infant Jesus. It once belonged to the private collection of Ernst Saulmann and his wife Agathe. The couple fled Nazi repression in late 1935, initially for Italy. The Nazis confiscated their wealth, including their land and business, and art collection. The more than 100 artworks were sold off at a Munich auction in 1936. The exiled Saulmanns in 1938 left fascist Italy for France, which the Nazis invaded two years later. The couple were interned in France in Camp Gurs. Ernst Saulmann died a year after the war ended, in 1946. Agathe committed suicide in 1951. In recent years, their descendants hired researchers who managed to locate 11 of the art objects, which had ended up in five German museums and three private collections abroad. “My family was able to reach different agreements with all these institutions and collectors,” said one of the heirs, Felix de Marez Oyens, at a press conference. “However, the Bode Museum is the only institution that conducted independent research and approached us with the results.” — AFP

RCBC to inject more capital into thrift, leasing units

June 27, 2018 | 12:03 am

By Karl Angelo N. Vidal, Reporter
RIZAL COMMERCIAL Banking Corp. (RCBC) will put in more capital in two of its subsidiaries to support its growth.
In a roundtable discussion with media late Monday, RCBC Strategic Initiatives head John Thomas G. Deveras, Jr. said the Yuchengco-led lender will inject additional funds into RCBC Savings Bank (RCBC Savings) as well as RCBC Leasing and Finance Corp. (RCBC Leasing) this year.
Mr. Deveras said RCBC will put in P2 billion in additional capital in RCBC Savings and another P800 million in RCBC Leasing.
“I think we’ll put new capital into [RCBC Savings], because our consumer [segment] is growing around 20% per annum,” he added.
In March, RCBC Savings President Rommel S. Latinazo said the thrift lender booked a record-high profit of P1.35 billion last year, 34% more than it logged in 2016.
Mr. Latinazo attributed the growth to the continued expansion of the bank’s core consumer loan portfolio and cost management.
“We’ll probably also need to put more capital into our leasing subsidiary because that book is also growing by about 20% per year,” Mr. Deveras added.
Meanwhile, RCBC President and Chief Executive Officer Gil A. Buenaventura said the bank is on track to hit its profit target for the year, although noting concerns over market volatility.
“We’re on track. We’re above target for the first five months,” Mr. Buenaventura said. “But with all these volatilities outside, we don’t know how will that affect the industry and RCBC in particular.”
Earlier this year, Mr. Buenaventura said he expects RCBC to grow its net profit by five to ten percent in 2018 from the year-ago level amid an increasingly competitive industry landscape.
On Monday, RCBC started offering 535.71 million common shares for its stock rights offer, from which it wants to raise P15 billion to strengthen its capital ratio and fund its business expansion.
“The two biggest shareholders put in their money [on Monday], so it’s already 75% subscribed,” Mr. Deveras said.
Broken down, Yuchengco Group of Companies subscribed to 52% of the total shares, while Taiwan’s Cathay Life Insurance Co. Ltd. placed 23%.
“During our road shows, there was strong interest from existing shareholders both domestic and foreign. Some have hinted they will oversubscribe,” Mr. Deveras added.
RCBC, the tenth-biggest bank in asset terms as of end-2017, 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 lost 65 centavos or 2.28% to close at P27.85 apiece on Tuesday.

CEZA to limit issuance of licenses for cryptocurrency exchanges

June 27, 2018 | 12:02 am

THE CAGAYAN Economic Zone Authority (CEZA) is looking to initially limit the number of licenses to be issued to cryptocurrency exchanges seeking to operate in the special economic zone.
CEZA Administrator and CEO Raul L. Lambino said the agency will only issue an 25 principal licences for cryptocurrency exchanges. Each exchange will only have sub-licenses of as many as 20 to 30 traders or brokers.
Each of the exchanges will be required to initially invest $1 million (P53 million) within two years.
“There are many operating scammers who put an exchange with very little capital and they are victimizing investors. We do not want the Philippines to be a haven (for scammers) even if these scams are happening abroad. That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in Bitcoin or whatever crypto coin that is a fraud,” Mr. Lambino was quoted as saying in a statement.
Once the licenses are issued, he said CEZA will first observe how the exchanges will operate.
“If they have ICO (initial coin offering) we will have to find if their ICO is asset-backed because this what we are saying that there are many scammers. If they offer in the market their initial (digital) coin, they maybe able to convince 50 unsuspecting investors and promise them the sun and the moon. This is the Ponzi scheme. We are not going to allow it,” the CEZA chief said.
Mr. Lambino said citizens living in the Philippines will not be allowed to invest or trade in ICOs by blocking the IP addresses of these exchanges.
“In our system, no residents of the Philippines will be able to enter because we are going to block their (exchanges’) IP address. We are going to block them. You cannot enter the IP, you cannot invest,” he said.
He also proposed that offshore companies seeking to operate crypto exchanges in the Philippines should also establish back offices in the country, and register with the Securities and Exchange Commission.
At least 21 offshore financial technology firms have so far signed memorandums of understanding with CEZA, which is hoping to become the “Silicon Valley of Asia.” — Janina C. Lim

Book prize drops name

June 27, 2018 | 12:02 am

NEW YORK — The name of best-selling author Laura Ingalls Wilder has been dropped from an American children’s literature award because of racist content in her books based on 19^th century settler childhood in the Midwest. The decision comes with many in the United States reassessing historical and cultural legacies, leading to monuments being taken down and buildings renamed as the country grapples with ongoing racism and discrimination. The Laura Ingalls Wilder Award will now be known as the Children’s Literature Legacy Award, the Association for Library Service to Children announced. The ALSC said the decision was made in consideration of “expressions of stereotypical attitudes” in Wilder’s work that are “inconsistent with ALSC’s core values of inclusiveness, integrity and respect, and responsiveness.” Wilder won the first award in 1954. Other winners are E.B. White, the author of Charlotte’s Web and Theodor Seuss Geisel, author of the Dr. Seuss books. Critics have highlighted anti-native and anti-black sentiments in Wilder’s work for decades, although her books are still published, read and loved by many. The books inspired the hugely popular 1974-1983 television series Little House on the Prairie starring Melissa Gilbert. — AFP

Citi sees growth in use of digital banking platform

June 27, 2018 | 12:02 am

CITIBANK, N.A. Philippine Branch (Citi Philippines) is optimistic about the growth of its digital banking platform in the country amid issues on connectivity and usage.
In a press conference Tuesday, Citi Philippines Consumer Banking Head Manoj Varma said the global lender has been making investments and new product features to satisfy the digital needs of its clients.
“Digital and mobile banking [are] core to our growth strategy, not just in the Philippines but globally. We’ve been making investments and new product features and functionality,” Mr. Varma said.
In a statement, Citi Philippines said its customer banking business has focused on digital transformation, continuously enhancing capabilities to make customer experience over its digital channels seamless.
The lender has launched its updated Citi Mobile App which helps its clients manage outstanding balances, track transaction details and rewards points, as well as pay bills.
“The Citi Mobile App will deliver a simple, fast and personalized experience to our valued card customers,” Citi Philippines Chief Executive Officer Aftab Ahmed was quoted as saying in the statement.
Amid its massive adoption of digital technology, Mr. Varma noted the challenges in the country’s Internet infrastructure.
“Some people would argue that there are some inherent challenges in the infrastructure with the speed of internet, the availability of LTE or the cost of data,” he said. “[It] is still a long way where it needs to be compared with some of the other Asian markets.”
Aside from this, Mr. Varma noted that only 14% of Filipinos use their smartphones to do digital banking, citing a study from McKinsey and Co.
“That is an opportunity because we would like to bring forth new customer experience and functionality where customers can take advantage of,” Mr. Varma added.
Despite the “low” usage of digital banking channels among Filipinos, Citi Philippines said its clients are now shifting to electronic means to do banking as two-thirds of its customers no longer go to branches and more than 60% are already enrolled digitally.
“We have an option of building more branches, which was how people used to transact. [However,] we [opted to] put our money in [going] digital because that’s where the future is. That’s where we think more and more customers will like to go,” Citi Philippines’ consumer banking head said.
Going digital, according to Mr. Varma, must work in tandem with ensuring the security of its clients’ data.
“The cyber thieves are getting more advanced. We obviously try to stay ahead of them,” he said. “We are obsessed about the security of our customers. We make sure that we deploy the latest security that we can [that adheres to] global security standards for our customers to protect their information.”
Mr. Varma explained that the Citi Mobile App is equipped with biometric authentication such as face and fingerprint recognition. Aside from this, the Citi Mobile Token instantly generates a one-time personal identification number that authorizes online banking transactions. — Karl Angelo N. Vidal

Arts & Culture (06/27/18)

June 27, 2018 | 12:01 am

Pinoys in Singapore

A SCENE from Club Ate’s work *Ex Nilalang* which is a finalist at the APB Foundation Signature Art Prize.

THE TRIENNIAL APB Foundation Signature Art Prize spotlights outstanding examples of contemporary art from emerging and established artists produced over the last three years, and for this 4^th edition, has expanded in scope to include Central Asia in addition to the Asia Pacific region. The Prize is worth SG$100,000, with SG$60,000 awarded to the Grand Prize winner and SG$15,000 each for two Jurors’ Choice Award winners. Fifteen finalists were selected by the Jury and two among them is Filipino/Australian artist collective Club Ate comprising Bhenji Ra and Justin Shoulder with their work Ex Nilalang (Balud, Dyesebel, Lola ex Machina) (2015), a video trilogy that reimagines Filipino myth and popular culture as celebratory narratives, drawing upon the artists’ personal experiences as Filipino-Australians in an exploration of cultural and gender identity. The exhibition of artworks by the 15 finalists is on view at the National Museum Singapore, with the announcement of the winner coming up on June 29.

Meet Yoko Tawada

YOKO TAWADA, an award-winning exophonic writer, will talk about her works and share her experiences about writing in both Japanese and German at “Writing in Two Worlds: An Afternoon with Yoko Tawada,” on July 9, 2:30-4:30 p.m., at the De La Salle University, Br. Andrew Gonzales Hall. Register now at bit.ly/WritingInTwoWorlds.

Art at Magnolia

BOYSIE VILLAVIVENCIO’s *In the Still of the Night*, one of the works that will be on view at Robinsons Magnolia.

BOYSIE VILLAVICENCIO will open his one-man show on June 28 at the upper ground floor of the Robinsons Magnolia mall. Titled Celebration under the Sea — Alumni Art Exhibition 2018, it will feature his brightly colored works until July 7. The show is presented by the Ateneo High School Class of 1968, 4-F Elans. Apart from the exhibit, five artists will be recognized on June 28 for their contribution to culture and the arts by the Rotary Club of Makati. They are Tony Perez, Anton Juan, Barge Ramos, Nonon Padilla, and Mr. Villavicencio.

Korean artist

ON June 30, the Ayala Museum’s ArtistSpace presents Harmony, the 10^th solo exhibition of Korean visual artist, Su Bok Kim. It will feature the artist’s lively and abstract impressionist view on nature. She draws out segments of forests in different seasons, painting is a pointillistic style to form one bigger picture.

Group show

Vinyl on Vinyl presents FIRST LESSONS/ an after school special featuring works by Anjo Bolarda, Roberto Sanchez, Dennis Bato, Chalk Zaldiva, Teo esguerra, Miguel Paulo Borja, curated by Gary-Ross Pastrana. The exhibit is ongoing until June 30. The gallery is at 2241 Pasillo 18, La Fuerza Compound 1, Chino Roces Ave., Makati City.

BoJ should continue powerful easing, guard vs side effects

June 27, 2018 | 12:01 am

TOKYO — Bank of Japan policy makers said the central bank should “patiently continue” its powerful monetary easing but attention must be paid to the potential side effects of prolonged easy policy, a summary of opinions at the June review showed.
Some board members said the central bank needs to keep monetary easing from severely distorting economic and financial conditions, and to make the current policy sustainable.
With inflation well below the BoJ’s 2% target despite five years of stimulus, one member said the central bank must make efforts to improve communication with the public on its commitment to meet the price stability goal, the summary showed.
“It is appropriate, if necessary, to make efforts to improve communication and enhance the commitment in a broad sense towards achieving the 2% inflation target,” the member said.
The BoJ left monetary policy steady at the June 14-15 rate review but cut its inflation view in a sign it would lag far behind other major central banks in unwinding crisis-mode monetary stimulus.
Subdued inflation forces the central bank to maintain its massive stimulus despite its rising costs, such as the hit to bank profits from rock-bottom interest rates.
One member said the BoJ should consider responses to side effects before they materialize, as banks face an increase in unrealized losses on securities and risks of impairment losses at branches with low profitability, the summary showed.
Another board member called for an additional commitment that fuels inflation expectations.
“While the BoJ board’s mainstream view is to continue powerful easing to keep the momentum towards the price target, opinions appear to have become clearly divided,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.
“Still, opinions that rule out additional easing seem to be gaining ground at the moment. As such, we do not expect tweaks to monetary policy at the July policy review.”
The BoJ buys government bonds and riskier assets including exchange-traded fund (ETF) as part of its massive stimulus, but one member called for examining the possible side effects from such asset purchases from every angle, it showed.
Another member warned against adopting a policy aimed at forcibly pushing up demand quickly, as sluggish prices are unlikely to be caused by simple factors like lack of demand.
The summary showed some members called for deepening of analysis and debate on why it is taking time to hit 2% inflation, at its July policy review when the nine-member board conducts a quarterly review of its growth and price projections.
The BoJ releases a bullet-point summary of the opinions voiced by the board members at its policy meetings roughly a week after they are held.
The views do not identify whose opinions they are. A more thorough minutes of the debate will be issued several weeks later. — Reuters

Asian central banks launch securities lending platform

June 27, 2018 | 12:01 am

A GROUP of Asian central banks have agreed to lend local currency bonds through a regional securities market, with the goal of improving cross-border bonds trade and boosting money supply.
In a statement, members of the Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP) announced the creation of a platform for securities lending.
Selected local currency-denominated papers held under the regional Pan-Asia Bond Index Fund (PAIF) will be open for lending through the regional securities market starting July 10.
The PAIF is a component of the Asian Bond Fund, which invests in government and quasi-government bonds among EMEAP member-economies. The goal is to develop bond markets across the region following the 1997 Asian financial crisis.
The Bangko Sentral ng Pilipinas is part of the EMEAP, alongside the central banks and monetary authorities from Australia, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, Singapore and Thailand.
“The EMEAP believes that PAIF Securities Lending will improve the liquidity of local currency-denominated bonds in the secondary markets, consistent with the EMEAP’s common goal to broaden and deepen bond markets in the region,” the group said in a joint statement issued late Tuesday.
“The EMEAP also believes that PAIF Securities Lending will help to enhance the functioning of regional money markets.”
The securities lending platform allows a financial firm to borrow local currency-denominated bonds from PAIF by posting eligible collateral. In turn, PAIF “retains the right to recall the loaned bond at any time.”
This effectively allows borrowers to secure cash which are expressed in their own currency, which is a new avenue they can turn to when in need of a fresh supply of cash. To add, this also enhances price discovery in the secondary market.
The EMEAP said the Asian bond market has grown by nearly eightfold since 2003 to surpass the $10-trillion mark.
National governments and private companies float debt papers as part of their fund-raising activities. — Melissa Luz T. Lopez

How PSEi member stocks performed — June 26, 2018

June 27, 2018 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Tuesday, June 26, 2018.

Which emerging markets offer the best logistics opportunities?

June 27, 2018 | 12:00 am