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Money supply growth slows down in April

MONEY SUPPLY continued to grow at the start of the second quarter although slightly slower than the previous month, even as bank lending accelerated, the Bangko Sentral ng Pilipinas (BSP) said in a statement released late Thursday.
M3 — the broadest measure of money within an economy — grew 14.2% to P10.9 trillion in April from P9.54 trillion in the same month last year, and increased 1% month-on-month.
It was a notch slower than the 14.4% expansion logged in March and was a reversal of the 0.1% contraction a year ago.
Of the amount in circulation, domestic claims grew 16.4% year-on-year, faster than the 14.5% increase logged in March due to “sustained bank lending.”
“Growth in bank loans continued to be driven by lending to key production sectors such as wholesale and retail trade, repair of motor vehicles and motorcycles; real estate activities; financial and insurance activities; electricity, gas, steam and air conditioning supply; manufacturing; other community, social and personal activities; transportation and storage; and information and communication,” the BSP said.
Meanwhile, net public sector claims rose 13% in April from 7% in March “as a result of continued borrowings by the national government.”
Net foreign assets (NFA), on the other hand, saw a 4.2% year-on-year expansion in April, slower than the 5.6% logged in the month-ago period.
“Foreign exchange inflows coming mainly from overseas Filipinos’ remittances, business process outsourcing receipts, and foreign portfolio investments drove the growth in the BSP’s NFA position,” the central bank explained.
“The NFA of banks also expanded as banks’ foreign assets increased on account of higher loans and investments in marketable debt securities,” it added.
BANK LENDING
Overall loans from commercial banks grew 19.9% to P7.46 trillion in April from P6.22 trillion logged in the same month last year, and higher than the P7.33 trillion in the previous month.
It accelerated from the 18.5% expansion in March.
According to the BSP, loans for production activities, which took up 88.5% of banks’ loan portfolio, increased to a 19.6% growth rate in April from 18.2% in the previous month.
These were driven primarily by higher loans to wholesale and retail trade, repair of motor vehicles and motorcycles (22.7%), real estate activities (15.7%); financial and insurance activities (27.1%); electricity, gas, steam and air conditioning supply (17.5 %); manufacturing (14.4%); other community, social and personal activities (81.1%); transportation and storage (30.9%); and, information and communication (24.6%).
Lending to the agriculture, forestry and fishing sector, and administrative and support services activities, however, declined by 6.8%, and 43.5%, respectively.
The loan growth for household consumption, meanwhile, moderated to 19% in April from 19.8% in March due to the easing of credit to credit cards, motor vehicle, and other household loans, which offset the faster expansion in salary-based general purpose consumption loans that month.
The central bank said while overall money supply and domestic credit remains “broadly in line” with its outlook for inflation and economic activity, it will still closely monitor the metric to ensure that monetary conditions are “conducive to maintaining price and financial stability.” — Elijah Joseph C. Tubayan

DFA ‘continues to engage in diplomatic actions’ with China

By Minde Nyl R. Dela Cruz, Reporter
DEPARTMENT of Foreign Affairs (DFA) Undersecretary Ernesto C. Abella said the Philippine government is serious as it “continues to engage in diplomatic actions” to address the West Philippine Sea (WPS) dispute with China.
“The Philippines continues to engage in diplomatic actions towards our partner countries and especially in this case, those who are having claims in the WPS, SCS (South China Sea),” Mr. Abella said in an interview in Malacañang on Friday.
“We continue to ensure that our areas of cooperation especially with China are protected: safety of the seas, safety of travel, oil and gas, fisheries, and environmental concerns. We continue to engage in diplomatic actions.”
Mr. Abella said a diplomatic protest against China has been filed but refused to elaborate on “classified details.”
“Safe to assume that anything that is of considerable concern to the safety is covered,” Mr. Abella said.
Mr. Abella noted that the DFA appreciates comments and criticism regarding its action on the South China Sea claim but assured the public “there is a lot of serious engagement going on.”
Eight senators on Wednesday filed a resolution calling on DFA to file a diplomatic protest over the increasing militarization at the South China Sea.
China landed H-6K bomber in Spratly Islands last May 19 as part of its defense training. Prior to that, US media also reported the installation of missiles in three islands claimed by Vietnam and the Philippines.

Uy named vice-chairman of Ongpin-led Atok-Big Wedge mining firm

ATOK-BIG Wedge, Co. Inc. has elected businessman Dennis A. Uy as its vice-chairman and independent director for the ensuing year.
In a regulatory filing on Friday, the listed mining firm said the election was approved at the firm’s annual stockholder’s meeting on Thursday.
Mr. Uy is the chairman and chief executive officer (CEO) of Udenna Corp., CEO and president of Phoenix Petroleum Philippines Inc., Chelsea Shipping Corp. and Global Synergy Trade and Distribution Corp., among others.
He is also the chairman of the 2GO Group, Inc., Chelsea Logistics Holdings Corp., Oilink Mindanao Distribution, Mindanao Media Dynamics, Phoenix Petroleum Holdings, Inc., F2 Logistics, and Phoenix Philippines Foundation, Inc.
Mr. Uy, who hails from the hometown of President Rodrigo R. Duterte, is also an independent director of Apex Mining Company, Inc.
Atok-Big Wedge’s board also elected Roberto V. Ongpin as its chairman and CEO and Eric O. Recto as president.
Also elected as independent director is former banker Lorenzo O. Tan, who previously served as president and CEO of Rizal Commercial Banking Corp.
Paul Francis Juat, director of Brownfield Holdings Corp., North Kitanglad Agricultural Company, Inc., PBJ Corp., and Pacific Bougainville Holdings Corp., was also elected as independent director.
Shares of Atok-Big Wedge jumped 7.03% or P1.30 to P19.8 apiece.

Social security deal on Filipino, Japanese nationals in force Aug. 1

By Camille A. Aguinaldo
A SOCIAL SECURITY deal between Philippines and Japan will enter into force on Aug. 1 following the two countries’ exchange of diplomatic notes to provide both Filipino and Japanese nationals social security benefits in either country, the Department of Foreign Affairs (DFA) announced on Friday.
Under the agreement, employees sent from Japan to the Philippines and vice-versa would be subjected to compulsory coverage under the social security systems of both countries.
The agreement is also expected to reduce the burden imposed on companies and employees, facilitating the people-to-people and economic exchanges between the two countries.
Employees temporarily dispatched for a period of five years or less to the other country will, in principle, be covered only by the pension system of the country where they are dispatched.
The Senate concurred with the ratification of the social security agreement in February 2017.
More than 250,000 Filipino live or work in Japan, according to the Philippine Embassy in Tokyo. Meanwhile, about 11,000 Japanese nationals reside in the Philippines, according to the Philippine Statistics Authority (PSA).
Aside from Japan, the Philippines has similar agreements with Austria, Belgium, Canada, Denmark, France, Switzerland, and the United Kingdom.

BSP lowers TDF volume for retail bond issuance

THE BANGKO Sentral ng Pilipinas (BSP) reduced the offer volume for the one-week term deposit facility (TDF) auction next week to make way for the government’s retail Treasury bond (RTB) issuance.
The central bank is seeking to get P40 billion on the seven-day tenor for Wednesday’s auction, lower than the P50 billion it offered in the May 30 TDF auction.
The offers for the 14- and 24-day tenors, meanwhile, were kept at P40 billion and P20 billion, respectively, making the total offer at P100 billion.
The seven-day TDF was the only tenor undersubscribed in last week’s auction, attracting only P48.206 billion from depositors. They also fetched an average 3.693% yield, 10.6 basis points higher than the rate a week ago.
“The 7-day undersubscription may be due in part to month-end requirements as well as initial preparations for the 3-year retail treasury bonds that the [national government] will be offering on 30 May — 8 June 2018,” BSP Governor Diwa C. Guinigundo said in a mobile phone message to reporters late Wednesday.
The TDF auction is the BSP’s tool to capture excess liquidity in the financial system.
“This is consistent with previous observation that banks seem to use the funds that they have allocated for the 7-day TDF for their liquidity management. Thus, even as more funds went into the 14 and 28 day TDFs and the BSP slightly reduced the volume…banks demanded higher rates due to alternative RTB issue coming up in days,” Mr. Guinigundo added.
During the price-setting auction on Wednesday, the Bureau of the Treasury (BTr) raised P66 billion in the three-year RTBs, more than double the P30 billion it initially offered. The papers fetched a 4.875% coupon rate, with banks’ bids reaching P92.8 billion, more than thrice the offer size.
The RTBs are offered to the general investing public through local banks until June 8, with a minimum investment of P5,000, and multiples of the same amount thereafter.
The latest debt papers will be issued on June 13, and will mature in 2021. — Elijah Joseph C. Tubayan

Thrift bank sector assets grow in Q1 with credit expansion

Gregorio B. Anonas III, Chamber of Thrift Banks President. — CTB.COM.PH

THE THRIFT banking industry posted growth in the first quarter on the back of credit expansion among lenders.
Chamber of Thrift Banks President Gregorio B. Anonas III, speaking during the group’s general membership meeting, said the industry “continued to be vibrant.”
Mr. Anonas reported that total assets of the industry stood at P1.168 trillion as of end-March, 5.8% higher than the P1.103 trillion logged in the same period last year.
He attributed the higher assets to the credit growth among lenders as well the banks’ ability to serve its communities.
Total capital reached P150 billion, up 7.5% from year-ago’s P140 billion.
Core lending rose by 9.3% to P864.4 billion, higher than last year’s P790 billion with “sustained lending activity in the niche market” thrift banks serve.
“Thrift banks occupy a very special relationship with the communities it serves and has its customers’ trust and loyalty,” Mr. Anonas explained in a text message following the meeting.
Deposit liabilities, meanwhile, also grew by 4% to P935 billion from P900 billion year-on-year.
Mr. Anonas urged the savings lenders to provide and access data from the state-run Credit Information Corp. (CIC).
“[Although] all [of our] members have enrolled, we encourage the members to continue to send data as required by law,” he said.
He added that through CIC, the lenders will have a repository of the credit dealings of its borrowers.
“This will enable the banks to be more informed of the borrowers’ credit behavior and get a full (picture) of their total loan exposure, thereby evaluate more precisely their ability to service their loans,” Mr. Anonas said.
Last month, S&P Global Ratings upgraded the risk assessment on the Philippine banking industry, supported by the sector’s “improved credit fundamentals.”
It cited the CIC, which is mandated to collect credit-related data from financial institutions and other potential sources of credit information.
“Better data availability of credit history is positive for this segment where credit quality has historically been constrained by lack of information,” S&P said, adding that clarity on creditworthiness should foster risk-based pricing.
With the centralized credit information database, Mr. Anonas said this will address the rising nonperforming loans (NPL) among thrift lenders.
According to the latest central bank data, NPLs held by thrift banks reached P44.633 billion in March, 11.4% higher than the P40.069 billion in the same period last year.
The rise in bad loans outpaced the growth in total lending, which picked up by 9.3% to hit P865.484 billion.
NPLs refer to unsettled debts for at least 30 days past due date. These are considered as risky assets due to a high risk of default, which would spell losses for the bank.
“Definitely, it will address the pickup in NPLs. However, the growth of loans in comparison with the NPLs is worth looking at,” Mr. Anonas said. — Karl Angelo N. Vidal

Palace issues EO on 911 emergency hotline

By Camille A. Aguinaldo
Malacañang on Friday, June 1, issued Executive Order No. 56 declaring the number 911 as the nationwide emergency hotline number and replacing the current Patrol 117 hotline network.
The executive order, dated May 25, placed the Emergency 911 National Hotline Public Safety Answering Center under the direction and control of the Department of the Interior and Local Government (DILG).
It also urged local government units (LGU) to establish and run local 911 call centers using their own funds.
The Patrol 117 Commission was also replaced by the Emergency 911 Commission which will serve as the policy-making body and the overseer of the program with the DILG Secretary as the chairperson and Department of Information and Communications Technology (DICT) Secretary as vice-chairperson.
Calls to the emergency 911 hotline shall be free of charge, the executive order also ordered.
“There is a need to change the PATROL ‘117’ Hotline Network to Emergency 911 Hotline Number to conform with international standards on emergency numbers for public telecommunication networks,” the document stated.
The executive order designated primary service responders composed of the Bureau of Fire Protection (BFP) in cases of fire suppression operations, hazardous materials protection or emergency medical assistance, and the Philippine National Police (PNP) in cases of public safety and crime prevention.
Major support service responders are tasked to provide necessary assistance to the 911 program consistent with their respective mandate. These include:
• Department of Public Works and Highways (DPWH)
• Department of Health (DoH)
• Department of Transportation (DoTr)
• Armed Forces of the Philippines (AFP)
• National Bureau of Investigation (NBI)
• Bureau of Immigration (BI)
• Philippine Coast Guard (PCG)
• Philippine Drug Enforcement Agency (PDEA)
• Metropolitan Manila Development Authority (MMDA)
• local government units
• accredited non-government organizations (NGOs), hospital and medical institutions and facilities, public safety volunteers, and other organizations recommended by the Emergency 911 Commission.
Government agencies are also directed to provide the necessary assistance to the program. The public, meanwhile, is encouraged to participate in and advocate crime prevention, public order, and public safety.
The executive order also penalizes fraudulent or prank reports to be provided in the implementing rules and regulations.

Basic Energy board approves preferred shares creation to raise funds

THE BOARD of directors of Basic Energy Corp. has approved the creation of preferred shares out of its authorized capital stock to allow the company to raise funds to support its projects in the years leading to 2028.
Basic Energy told the stock exchange on Friday that the move, which requires amending its articles of incorporation, was approved by the board last May 31.
The company said its target projects within the 10-year period spanning 2018-2028 “are expected to generate steady streams of revenues” and the proposed amendment “shall provide an option to raise funds for these projects, the undertaking of which shall be more feasible.”
“With more projects, operations is expected to [be] more robust and vibrant,” the listed energy and exploration said.
The amendment of the company’s incorporation papers calls for dividing its authorized capital stocks to seven billion common shares and three billion preferred shares.
The proposal will not entail an increase in its capitalization, which will remain at P2.5 billion.
Basic Energy said it has identified target projects that will require it to raise funds.
Several funding options had been cited such as, but not limited to, borrowings, corporate notes or bonds, additional issuance of common shares and issuance of preferred shares.
The company said the last option requires amending its incorporation papers as the present authorized capital stock under the existing provision consists only of common shares.
Aside from the creation of preferred shares, the proposed amendment will include the authority of the board of directors to determine the features, terms and conditions of each series of preferred shares. There will be no preemptive rights on the issuance of common and preferred shares, bonds and other instruments.
The proposal is subject to the approval of the stockholders during the company’s annual stockholders meeting on June 27.
Basic Energy previously announced it is pursuing renewable energy projects in the Philippines and in Thailand with Thai firm Vintage Engineering Public Co., Ltd. It also disclosed the possible acquisition of at least a 10% stake in a 25-megawatt (MW) biomass power plant in Japan.
The company has land bank in parts of the Philippines, including a 178,634 square-meter (sq.m.) property in San Fabian, and 415,895 sq.m. in Bolinao, both in Pangasinan. It is considering solar projects in these properties.
On Friday, shares in the company were trading higher by 0.45% to P0.225 each. — Victor V. Saulon

Senator calls for relief measures in line with TRAIN law

By Camille A. Aguinaldo
SENATOR Grace S. Poe-Llamanzares on Friday urged the government to implement the fuel vouchers, the additional 10% fare discount and other subsidies provided by the tax reform law amid the rising prices of goods and services.
“First, the fuel vouchers should be distributed now. Second, let us fast-track the distribution of money in the unconditional cash transfer because a small percentage of Filipinos has received this. Regardless, this is already a big deal,” she said in a statement issued after the Senate hearing on the effects of tax reform law on public services and utilities.
Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law provides social mitigation measures for Filipinos, such as fuel vouchers for jeepney franchise holders, rice discounts and 10% transportation fare discounts for minimum-wage earners, and free skills training from the Technical Education and Skills Development Authority (TESDA).
Unconditional cash transfers of P200 monthly would also be given to the 10 million poorest Filipino families.
At the hearing, transport and consumer groups revealed that the Department of Transportation (DoTr) has not discussed with them the possible subsidies they may receive under the TRAIN law.
For his part, Albay Rep. Joey Salceda pointed out that about P28 billion was appropriated this year for measures to mitigate the impacts of the tax reform law.
A representative of the DoTr said the agency has a self-imposed deadline until end of June to publish the rules of the Pantawid Pasada Program. Around P977 million has been allocated for the program this year to benefit around 179,000 jeepney franchise holders.
The Department of Social Welfare and Development (DSWD) admitted at the Senate economic affairs committee hearing that the government was able to distribute unconditional cash transfers to only four million families at this time. The agency added that it is targeting to fully implement the program only by the end of September.
Ms. Llamanzares said safety nets should be enforced immediately amid the “relentless price increases” not only brought about by TRAIN but also by the world market.
“It’s in the hands now of the government to make sure that those subsidies are distributed on time to our countrymen so that the poorest who are affected by this will be given a reprieve,” she said.
The senator previously called for the immediate suspension of fuel excise taxes under TRAIN law due to mounting complaints that the law aggravated prices spikes. Senators Paolo Benigno A. Aquino IV and Joseph Victor G. Ejercito have also made similar calls.

Peso slightly slips on rosy US economic data

THE PESO slipped against the dollar once more on Friday due to upbeat US economic data amid looming trade tensions abroad.
The local unit ended the trading session at P52.55 against the dollar, slightly lower from its P52.52-per-greenback finish on Thursday.
As session opened, the peso immediately slipped to P52.56 versus the US currency. It dived to a low of P52.635, while its best showing stood at its P52.55 close.
Dollars traded thinned to $587.5 million from Thursday’s $886.88 million.
A trader said the peso weakened due to the “firm” US personal consumption expenditure data released Thursday night.
“The peso generally weakened today (Friday) following the release of Personal Consumption Expenditure (PCE) inflation data, which… kept firm last night, giving strength to the dollar,” the trader said in an e-mail.
In a Reuters report, the PCE price index, excluding volatile food and energy components, rose 0.2% for the third straight month in April, leaving the year-on-year “core” PCE price index at 1.8%.
The trader said the PCE is the “US Federal Reserve’s preferred inflation target.”
The data came alongside the growth in consumer spending, which jumped 0.6% last month, its biggest leap in five months.
Meanwhile, another trader said the trade issue in North America gave “a bit of movement” for the dollar.
“Yes, I think there’s a bit of movement for the dollar. But for the dollar-peso, not much reaction,” the trader said in a phone interview Friday.
The US said it will proceed with their planned tariff imposition on steel and aluminum by removing the two-month exemption of Canada, Mexico and the European Union, setting the stage for a possible trade war, Reuters reported.
The imposition of a 25% tariff on steel imports as well as the 10% duty on aluminum imports took effect Friday midnight, the Commerce Department said in a telephone briefing.
“As geopolitical uncertainties relating to the effectivity of US tariffs on imports from Canada, Mexico and the European Union might escalate over the weekend, there was profit-taking trend in the market in the intraday trade,” the second trader noted. — Karl Angelo N. Vidal

PLDT contractuals directed to claim regularization

CONTRACTUAL employees of the Philippine Long Distance Telephone Company (PLDT) were directed on Friday morning, June 1, to “claim their regularization” at the company’s human-resources division in Mandaluyong City, the company said in an advisory on Thursday.
The advisory said the regularization is by virtue of a May 30 Writ of Execution issued by the Department of Labor and Employment-National Capital Region (DoLE-NCR).
“Based on the decision of Labor Secretary Silvestre (H.) Bello (III) ordering the regularization of thousands of Contractual Workers in PLDT(,) the Regional Director of DoLE-NCR has issued a writ of execution to this order and has released it May 30, 2018. Thus, subject workers will report for work in PlDT on June 1, 2018,” said the advisory, which also covers “recipients of the DoLE order…and members of the Manggagawa sa Komunikasyon ng Pilipinas (MKP), the PLDT Rank and File Employees Union.”
MKP, according to the advisory, “initiated the legal proceeding aiming the regularization of all contractual employees in PLDT.”
Last Monday, DoLE flagged 20 firms, including PLDT, in a list of “companies engaged and suspected to be engaged in labor-only contracting.”
Sought for comment, PLDT spokesperson Ramon R. Isberto said via email: “Having received the writ of execution from DOLE, we are putting in place a procedure for properly processing the individuals listed in the department order.”
“We are asking the individuals concerned to fill out a personal information sheet. This can be done on paper or through an online form in a website,” he added.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains interest in BusinessWorld through the Philippine Star Group. — Gillian M. Cortez

Bargain hunt lifts PSEi back past 7,600 mark

PHILIPPINE EQUITIES on Friday climbed overall for the second straight day past the 7,600 mark last seen Tuesday, with bargain-hunting providing some lift as June began.
The Philippine Stock Exchange index (PSEi) gained 133.09 points or 1.77% to finish 7,630.26, while the all-shares index added 50.43 points or 1.09% to 4,638.72. The benchmark index, however, still slipped for a third straight week by 0.23%.
Reuters reported that Wall Street retreated — with the Dow Jones Industrial Average, S&P 500 Index and the Nasdaq Composite Index dropping 1.02% to 24,415.84, 0.69% to 2,705.27 and 0.27% to 7,442.117, respectively — as Canada and Mexico retaliated on Thursday after the US imposed tariffs on steel and aluminum imports while the European Union prepared its own reprisals, reviving fears of a brewing global trade war.
Asia was a mixed bag, with Japan’s Nikkei Index, the Shanghai SE Composite Index and the blue-chip Shanghai-Shenzhen CSI 300 slipping by 0.14% to 22,171.35, 0.65% to 3,075.463 and by 0.84% to 3,770.59, respectively, while Hong Kong’s Hang Seng Index and the MSCI AC Asia Pacific edged up by 0.08% to 30,492.91 and by 0.91% to 172.17, respectively.
“Investors turned to the Philippines for bargain-hunting after a month that saw the index slide more than four percent for the month,” Luis A. Limlingan, head of sales at Regina Capital Development Corp, said in a mobile phone message.
“While other regions seemed more risky due to volatility, the Philippines was viewed as a safe haven.
“The Philippine market started the month of June on a positive note due to likely bargain hunting,” RCBC Securities, Inc. said in a Stock Market Weekend Recap prepared by John Paolo Ayson.
He noted that the benchmark index fell by 2.33% on Wednesday, “breaking two support levels, including the critical 7,500”, but that “bargain hunters came in during the last two trading sessions, lifting the PSEi above 7,600 by Friday, almost back to where it came from”.
Four of the six sectoral indices gained: holding firms by 234.07 points or 3.19% to close 7,563.6, financials by 23.1 points or 1.23% to 1,889.76, industrials by 96.26 points or 0.89% to 10,854.17 and property by 22.88 points or 0.6% to 3,778.18.
The remaining two subindices sank: mining and oil by 80.13 points or 0.8% to 9,941.47 and services by 9.55 points or 0.64% to 1,471.76.
Friday saw 101 stocks advancing and 89 others declining, while 46 steadied.
Friday’s list of 20 most active stocks saw 16 issues gaining against three that lost, besides PLDT, Inc. whose price steadied at P1,295 apiece.
Leading stocks that gained were led by the likes of Aboitiz Equity Ventures, Inc.; SM Investments Corp.; Bank of the Philippine Islands; Manila Electric Co.; Jollibee Foods Corp. and Ayala Corp. whose prices increased by 9.00% to P63 apiece, 4.44% to P906.50, 4.21% to P99, 3.72% to P334.80, 3.58% to P283.80 and 2.13% to P960 each, respectively.
Ending Friday down on the same list were Bloomberry Resorts Corp.; International Container Terminal Services, Inc. and Security Bank Corp. whose prices shed 4.07% to P10.36 apiece, 1.36% to P83.35 and by 0.51% to P194 each, respectively.
Trading volume thinned to 625.151 million shares worth P5.558 billion from Thursday’s 820.139 million shares worth P17.235 billion, while net foreign selling grew by 56% to P303.848 million on Friday from Thursday’s P194.427 million. — with a quote from PPCM

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