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New co-working space to connect startups to ‘Fortune 500’ companies

Parallel to the growing number of startup companies in the country, the demand for affordable and flexible work spaces have also increased in the past few years.

Today, entrepreneurs can bring their companies to shared offices while they have yet to grow and scale their businesses.

But for London-based co-working space provider International Workspace Group (IWG), an office space is no longer enough as entrepreneurial interests grow among more people, especially millennials.

IWG, which is also behind co-working space Regus, is bringing to the Philippines its “second and fastest growing” brand “Spaces,” which the company envisions to become a hub that will connect startups with more established businesses and even Fortune 500 companies.

Present in 25 cities worldwide, Spaces is set to open at World Plaza in Bonifacio Global City, Taguig City, on June 4.

The 3,200-square-meter space will have about 447 workstations, including rooms for private meetings. It will also house its own Wild Flour Bakery + Cafe.

In a bid to create a community of both young and experienced entrepreneurs, Spaces will also feature a 500-square-meter “community hall,” where business and networking events will be held regularly.

“Co-working space is a term of yesterday. What we are building is a community,” Spaces country manager Lars Wittig said in a press briefing.

He added, “When we call it co-working, it is sort of describing a work style. We’re not promoting a work style, we’re promoting a lifestyle. We want people to connect.”

According to Wittig, the company envisions the hall as a venue where “all types of industries and people will be able to network with each other.”

“We need to have the right balance of startups, millennials, and baby boomers.,” he said. “We want to have industry A as well as industry Z, and we want to have the startups as well as Fortune 500. That is how we can get synergy and learn from each other.”

Wittig said three companies in Fortune 500 list, which he refused to disclose, have expressed interests to join the space.

Cost and demand

According to him, rental for Spaces is “not more expensive” compared to those of local small players. However, he added that each square meter would at least be 35% more expensive than the Regus brand, which is currently more expensive than typical commercial leases.

According to Wittig, “today is an exciting time” for the company to launch the space given the “exceptional” demand for shared offices in the country.

In fact, he said monthly inquiries for Regus since January this year have increased by 22- to 33-percent than the same period last year. In March alone, he added they received almost 1,300 inquiries.

While the first location has yet to be launched, the company is already considering expansion to two “major cities” in the metro.

SEC warns against online investment scams with paid-to-click schemes

The Securities and Exchange Commission (SEC) has advised the public against investment scams with paid-to-click (PTC) programs, noting that some may be Ponzi schemes that places them at the risk of losing money.
In an advisory posted to its website on Wednesday, May 23, the SEC cautioned against online-based advertising firms that use the PTC method, where people are asked to pay an upfront fee or are offered to buy products. Doing so will then give investors a share of the program’s profits.
Such types of schemes usually promise high returns in a short span of time “by doing bogus clicking jobs, by logging in everyday or by obtaining referrals or buying ad packs,” the commission said.
The SEC said that some of these programs may actually be investment scams, or the so-called Ponzi scheme, where earlier investors are paid with fake profits by recruiting more investors into the network. — Arra B. Francia

Is it worth moving to Maginhawa?

Maginhawa Street: multicolored tricycles ripping down the residential neighborhood. University students moving restlessly with the passage of time. Rows upon rows of eateries across the two‑kilometer main thoroughfare. For food entrepreneurs opting to tap the young, middle‑class market, this street in Quezon City is the place to be. But for small business owners who have set up shop in this formerly quiet community, with the higher foot traffic comes a hurdle: rent.

Rates for commercial establishments have skyrocketed over the years, with current fees going as high as P60,000 per month.

Despite this, 23‑year‑old Alexx Esponga and 21‑year‑old Kloyd Majam, who were students when they put up rooftop café Jess & Pat’s in other up‑and‑coming food hub Lilac, Marikina, decided to transfer operations to Maginhawa. In here, rent for their 110-square-meter space costs over P50,000 per month: a jump of 714.29% from their previous rental fee of P7,000 in Marikina.

“Based on our market research, most of our patrons are from Quezon City. So that’s one factor why we were not afraid to move here,” she said. But with Maginhawa’s stature as a popular food destination, “we realized that we have to be really competitive because we’re in the ‘real world’ already,” she said.

The two owners who are avid followers of the local indie scene also see their move to Maginhawa as an opportunity to help more Filipino artists. To compensate for the bigger rental, Majam said they plan to increase their sales and stage more local acts.

“In Marikina, we had to pay an additional P5,000 for every event we mounted,” Majam said. “Here, since the rental fee is already fixed, we can stage events as much as we want.”

While the two are bullish on the business, they admit that it will take a long time for them to reap the reward of taking the risk.

“I believe that if you do something for a good purpose or if you are helping others, people will continue to support you,” Esponga said. “The success will just follow.”

The first version of this story was first published on March 20, 2018.

INCIDENTAL INTELLIGENCE
Find Jess & Pat’s at 2/F 63 Maginhawa, Diliman, Quezon City

The skateboard: a vehicle for chicken

From mere slacker uniform, skateboard attire has seeped into the runways of the world’s fashion capitals.

For trans-disciplinary designer Sean Bautista, the skateboard culture is more than just a fashion thing: it is also a vehicle to purvey chicken.

The Comme des Garçons-wearing Ateneo graduate who looks up to David Chang took workshops in design management at Parsons School of Design in New York City before building two original concepts: Tetsuo, an East-Asian casual dining restaurant, and Transit, a retail design concept.

“I’m a fine arts student,” he insists when asked if he ever considered taking a business course. Tetsuo, after all, began as a chicken stall at Ateneo competing for space in the cafeteria. In a week, they met their ROI. After that, they began selling merchandise (imagine, a chicken stall with its own merch), before branching out to events.

“Organically” is how he describes the ideation process. “I and a few friends came together,” he recounted. “I mean we just hung out, we were into skateboarding, music, hiphop… but then we also liked cooking.”

“So from that idea and just trying to be authentic to ourselves, we’ve created a brand that suits or embodies what we thought. Like, embodies our relationship as friends. It starts with the chicken concept because, yeah, we wanted to create something that was palatable to our audience and that everyone would enjoy, but then we tried to elevate the concept and create a bigger personality around it by injecting things that were authentic to us,” he said. “To simplify that idea, we just came from a unique standpoint of dudes just hanging out, cooking together, and being interested in different facets of subculture, and then translating that into a product.”

From its formerly five-square-meter space inside Ateneo, it has expanded into a 50-square-meter restaurant along Katipunan, housing 31 seats. And it is, in fact, things like the playlist, typography, and visuals, among others, that formulate the overall brand.

“I’m able to connect to other people in a way that I wouldn’t have been able to do if I was just thinking about the business,” he says. “If I was only thinking about business goals, I don’t think Tetsuo as a product would translate in the way it does.”

INCIDENTAL INTELLIGENCE
Tetsuo is located at 88 Esteban Abada Street, Loyola Heights, Quezon City.

Fiscal deficit widens in first four months

THE GOVERNMENT saw its fiscal deficit grow nearly four times as much in the January-April period, but is still lower than what the government expected, as state coffers exceeded their targets and expenditures continued to increase at a rapid rate.
Citing data from National Treasurer Rosalia V. De Leon, Finance Secretary Carlos G. Dominguez III said that the government’s fiscal position saw a deficit of P115.9 billion in the first four months of the year, 284% wider than the P30.18 billion posted in the same period in 2017.
However, he said that it is “P51.2 billion less than program.”
Mr. Dominguez said that overall “[year-on-year] revenues grew by 21%.”
“Jan to April revenues higher than program by 7% or by P21.4 billion, he said, noting that the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) exceeded their goals by P19.4 billion and P2 billion, respectively.
The Finance chief said that the BIR collections grew 17.49% to P655.67 billion in the January-April period from last year’s P558.07 billion.
The BoC meanwhile raked in 30.53% more to P176.57 billion from P135.27 billion a year ago.
Meanwhile, “disbursements increased by 31% to P1.04 trillion,” in the first four months of the year from the P798.44 billion recorded in the same months of 2017. — Elijah Joseph C. Tubayan

Central bank sees modest wage hikes

THE BANGKO SENTRAL ng Pilipinas (BSP) expects a modest increase in daily minimum wages this year despite fresh petitions for such pay hikes.
BSP Deputy Governor Diwa C. Guinigundo has said that monetary authorities’ latest estimates factor in an P18-20 increase in daily minimum wages to be approved by regional wage boards, following new petitions submitted by labor groups.
“In terms of demand for higher wages, there were only four out of 17 (regions) that have filed petitions for higher wages [so far],” Mr. Guinigundo told reporters recently.
“Normally, in our baseline, we have already incorporated a historical increase in wages… So we factored in between P18 to P20, so in case there are additional adjustments in minimum wage, maliit na lang ‘yun.”
Mr. Guinigundo said this is broadly in line with the amounts approved by the Labor department in previous years.
Labor groups may file requests for pay hikes with their respective Regional Tripartite Wage and Productivity Boards one year after a previously approved salary increase has taken effect.
Pending petitions include proposed wage hikes in Western Visayas (P130-150), Central Visayas (P120-155.80) and Davao (P104).
Petitions for higher salaries came as labor groups have cited the impact of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law, beginning January this year which has eroded the purchasing power of workers given higher prices of basic goods and services.
TRAIN, coupled with the impact of rising global oil prices, have been cited as the reason behind faster inflation that averaged 4.1% from January to April. The pace is expected to quicken further and average 4.6% for the entire year, which is well beyond the central bank’s 2-4% target for 2018.
Proposals for transport fare hikes have also been sent to the Land Transportation Franchising and Regulatory Board, Mr. Guinigundo noted.
Central bank officials have said that they are watching out for such second-round effects of the tax reform law on overall inflation.
The BSP raised key interest rates by 25 basis points last week in the face of inflation that has spread to more widely used goods and services. The move was also designed to manage inflation expectations among market watchers.
Mr. Guinigundo said measures like the cash transfers, as well as the expected approval of rice tariffs to replace import quotas, are seen to temper the impact of quickening inflation.
The daily minimum wage in Metro Manila increased by P21 in October last year, compared to petitions for P184 and P259 to be added to the daily floor pay. — Melissa Luz T. Lopez

Tax perks reform may still change — DoF exec

THE DEPARTMENT of Finance (DoF) said it is open to changes in its corporate tax reform proposal, but maintained that the overall objective of streamlining incentives should not be compromised.
“We have to, for sure, rationalize the incentives. Details are something we can discuss if there’s a better suggestion. How long, what rate, what industry. That is really the meat of the reform,” Finance Undersecretary Karl Kendrick T. Chua told reporters after the first public hearing on the second of up to five tax reform packages on Tuesday at the House of Representatives.
“All these numbers, we can discuss if there’s a better proposal. But the principles, we will fight (for): performance-based, targeted, time-bound and transparent,” he added, saying: “We’re open to suggestions if they have a better proposal. If it’s backed by study, then we will accept.
“There are many studies. Of course, some want longer, some want the sector to continue to be incentivized. Again, for their sector, I’m sure they’re correct. But as a DoF official, I have to balance all the interest that will come out in the final bill.”
PROPOSAL
The Department of Finance (DoF) proposes to cut the corporate income tax (CIT) rate gradually by a percentage point annually to 25% from 30% currently — the highest in Southeast Asia — conditional on collecting an additional P26 billion from removing redundant tax incentives.
Mr. Chua said that the trigger provision would ensure that the reform would be revenue-neutral an any given time.
DoF’s proposal will repeal 123 special laws on investment incentives granted by 14 investment promotion agencies, and consolidate those consistent with the government’s medium-term Strategic Investment Priority Plan into one omnibus incentive code to be administered by a Fiscal Incentives Review Board; disallow the use of value-added tax as an investment incentive; and expand the coverage of the Tax Incentives Management and Transparency Act.
The DoF’s proposal compares to House Bill No. 7458 that seeks an annual unconditional cut in the CIT to 20%.
Last month, S&P Global Ratings revised its Philippine credit rating outlook to “positive” from “stable,” citing the first tax reform package, Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law, that took effect on Jan. 1. That law cut personal income tax rates and covered the projected foregone revenues by raising tax rates or introducing new consumption levies on a range of products, besides removing the value added tax exemption of several sectors.
Finance Secretary Carlos G. Dominguez III said in his opening statement that the DoF seeks to put in place a “pro-business, pro-investment and pro-incentives” reform package, but noted that every incentive given out “must benefit society in the form of better jobs, faster innovation and countryside development.”
“Some of the incentives granted, however, were entirely unnecessary given the inherent attractiveness of our market size, our natural and human advantages and our freshly gained competitiveness,” Mr. Dominguez noted.
House Ways and Means committee Chairman Dakila Carlo E. Cua (Quirino) said private-sector parties he has been consulting have cited the incentive streamlining push as “big concern.”
“[T]hey accuse us of changing the rules in the middle of the game,” Mr. Cua recalled.
Mr. Dominguez responded by saying the second tax reform package is “proposing the change in the laws to meet the needs of the time to make the system more fair,” noting that 99% of small and medium enterprises pay the regular CIT rate while larger firms enjoy a lower preferential rate.
“It is the right of a sovereign nation to change the game,” he said.
“When we granted incentives, we changed the game and nobody complained.”
Mr. Cua also cited uncertainty since the condition attached to the CIT cut would make it difficult for firms to plan effectively.
The Finance chief replied that the DoF is “cognizant of the concerns.”
The committee’s next public hearing will focus on private-sector concerns with the second tax reform package. — Elijah Joseph C. Tubayan

Consortium cuts period, cost for proposed NAIA rehab

THE CONSORTIUM formed by some of the country’s conglomerates has submitted a revised proposal to rehabilitate the Ninoy Aquino International Airport (NAIA), cutting the project duration from 35 years to 15 years.
Transportation Undersecretary for Aviation Manuel Antonio L. Tamayo told reporters in Bonifacio Global City, Taguig City on Monday that his department told the consortium, which submitted a P350-billion unsolicited proposal in February for NAIA’s modernization, to trim the duration of the airport’s rehabilitation to 12-15 years and adjust the cost accordingly.
“The original proposal involved an additional runway,” Mr. Tamayo recalled.
“It’s P106 or P105 billion na lang [only now]. Before, maglalagay ng additional runway kaya [they were supposed to build an additional runway; that’s why] it was super expensive. And they needed 35 years just to recover. Since it was shortened, it (additional runway) is just now an option just in case, in the future.”
He added, the revised proposal will be submitted to the National Economic and Development Authority for final approval.
The NAIA consortium is composed of seven of the country’s biggest firms, namely: Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc. and Metro Pacific Investments Corp.
Changi Airports International Private Ltd. from Singapore will serve as the consortium’s technical partner.
Its competition is the tandem of Megawide Construction Corp. and Indian company GMR Infrastructure Ltd. that submitted a $3-billion, 18-year unsolicited proposal last March , cheaper and shorter than the NAIA consortium’s first proposal. US-based The MITRE Corp. is its technical partner.
GMR-Megawide has opposed the consortium’s plan to change its original proposal, saying in a press statement late in March: “If it is the intent of the NAIA consortium to tweak their proposal, it should be properly revised and re-submitted to the government.”
“It also follows that this re-submitted proposal should be evaluated after the GMR-Megawide proposal,” the tandem had said at that time.
In the proposal, GMR-Megawide team plans to add airport capacity to handle 72 million passengers annually.
NAIA handled 42 million passengers last year, way beyond its 30.5 million designed capacity.
GMR-Megawide said it will increase airfield capacity to 950-1,000 aircraft movements per day from 730 currently, and terminal area to more than 700,000 square meters.
Aside from adding a third runway, the original proposal of the NAIA consortium sought to expand terminals and add new taxiways. It said it aimed to increase the capacity of NAIA to 47 million passengers in two years and 65 million in four years.
The two rivals are now awaiting original proponent status to undertake this project. Once it is granted, the winning proposal will be subjected to a Swiss challenge, whereby other firms may seek to match it. But as original proponent, the group will have the advantage of presenting a counterproposal. — Denise A. Valdez

NFA moves to import more rice

THE STATE GRAINS AGENCY needs to import rice again this year to continue rebuilding its depleted buffer stock, a spokesman said on Tuesday, as it sought offers in an open tender for an additional 250,000 tons.
There is no final volume and timing yet for additional rice purchases by the National Food Authority (NFA), which needs approval by its council, said the spokesman, Rex C. Estoperez.
“We need to import more this year for the lean months,” he told reporters, referring to the July to September period when the domestic harvest is very low or almost none. “It needs planning and the budget.”
The NFA this month accepted supply offers from Vietnam and Thailand for a total volume of 250,000 tons in government-to-government deals, before Tuesday’s second tender.
The Philippines, a frequent rice buyer, may import as much as 1.4 million tons of the staple this year — among the largest rice purchases expected — based on a projection by the United States Department of Agriculture.
President Rodrigo R. Duterte wants the NFA to build up its rice buffer stock to the equivalent of 60 days of national consumption, or as much as 1.92 million tons, from less than two days of consumption in March.
The NFA sought supply of 25% broken rice variety at Tuesday’s open tender, with 13 suppliers and traders, mostly from Thailand and Vietnam, making valid offers, the NFA said.
Bids ranged from $461.75 to $465.04 per ton, below the agency’s budget of $498.25 per ton.
Delivery of the additional 250,000 tons should be completed before September, while shipments of the first 250,000 tons are expected to arrive from next week and should help ease upward pressure on domestic prices, Mr. Estoperez said.
The dwindling supply of cheap NFA rice, partly caused by delays in import approvals, spurred spikes in domestic prices. That fed into inflation, which accelerated at its fastest pace in at least five years in April. — Reuters

San Miguel to raise P10B from debt paper sale

SAN MIGUEL Corp. reported a net income attributable to equity holders of the parent of P7.33 billion in the first quarter of 2018. — BW FILE PHOTO

SAN MIGUEL Corp. (SMC) is raising P10 billion from the sale of debt papers to institutional investors.
The diversified conglomerate said in a disclosure to the stock exchange on Tuesday it is issuing P10 billion in corporate notes with a fixed interest rate equivalent to 5.25% per annum.
The debt, which was offered solely to qualified buyers, will be listed at the Philippine Dealing & Exchange Corp. on May 25.
BDO Capital & Investment Corp. and BPI Capital Corp. were tapped as joint lead underwriters and joint bookrunners.
SMC has the authority to issue peso-denominated fixed-rate corporate notes worth up to P20 billion after securing the green light from its board of directors on May 9.
Proceeds will be used either for refinancing the existing loan obligations and/or re-denomination of dollar-denominated obligations, or investments in its subsidiaries in existing businesses.
San Miguel has been refinancing its dollar-denominated debt to temper foreign exchange losses. In April, the conglomerate raised P20 billion from the sale of notes due 2023, 2025 and 2028.
San Miguel Head of Treasury Eduardo Sergio G. Edeza said in April the diversified conglomerate has reduced the share of foreign obligations to “less than 30%” of total debt from “a little over 40%” five years ago and intends to bring them down further to “as much as can be done.”
SMC recorded a net income attributable to equity holders of the parent of P7.335 billion in the first quarter of 2018, 18% higher than the P6.239 billion registered in the prior year, according to a regulatory filing.
Consolidated recurring net income of P19.4 billion for the first three months of the year, up by 31% from the same period a year ago, driven by the performance of its liquor, beer, food, packaging, and fuel businesses.
Shares in SMC added P1 or 0.69% to close at P145 apiece on Tuesday. — Krista Angela M. Montealegre

LRT-1 operator seeks gov’t approval to raise fares

LIGHT RAIL Manila Corp. reported the daily ridership at Light Rail Transit Line 1 averaged 459,400 passengers during the first quarter. — BW FILE PHOTO

THE Light Rail Manila Corp. (LRMC) is seeking to raise fares at the Light Trail Transit Line 1 (LRT-1) by P5 to P7 in August.
In a press conference on Tuesday, LRMC Chief Executive Officer Juan F. Alfonso said the company submitted a letter to the government in March asking to adjust fares by an average of P5, and a P7 hike for the end-to-end trip from Baclaran to Roosevelt.
“What we’re doing right now is we’re coordinating with LRTA (Light Rail Transit Authority) to go through the process. The process involves publishing, and then public consultation, and then approval if we’re allowed to increase the fares,” he said.
If approved by the Department of Transportation, LRMC targets to implement the fare adjustment on Aug. 1.
At present, LRT-1 fares are P15, P20 and P30, depending on distance traveled. LRT-1 fares were last adjusted in January 2015, when it was still under the government.
LRMC, a consortium of AC Infrastructure Holdings Corp., Metro Pacific Infrastructure Corp. (MPIC), and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., has been in charge of operations and maintenance of LRT-1 since September 2015.
LRMC said the fare increase is urgently needed to “catch up” with inflation, as well as to recoup the investments it has made to improve LRT-1 operations. The company said it has spent P7.5 billion to upgrade the existing system, repair of structural defects, and its on-going Cavite extension project.
Under the concession deal with the government, Mr. Alfonso said the company is allowed to adjust fares every two years.
“It’s a partnership. We made improvements, we made investments. We also gave the government support in terms of getting the tariff that was in the concession agreement… We’re trusting that the contract will be followed. All of our improvements have costs. I feel that people are willing to pay for good service,” Mr. Alfonso said in Filipino.
In 2016, LRMC also applied for a fare hike but it was rejected by the government. “It was P2.50 (increase) on average for the past two years. (The new fare adjustment) is a catch-up for the past two years,” Mr. Alfonso said.
He said the fare adjustment will allow them to continue delivering “good service” and help in increasing LRT-1 daily ridership to 700,000 to 800,000 by 2021.
For the first quarter of 2018, LRMC reported a 3% daily ridership increase to 459,400 passengers. The number of trips in a day also went up to 554 in March, from the 505 weekday average trips in March 2017.
MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group. — Denise A. Valdez

Gov’t raises P4 billion via bonds

THE GOVERNMENT partially awarded the 10-year Treasury bonds (T-bonds) it offered on Tuesday, with yields continuing to rise, as the market still prefer short-dated papers due to the expectations of another rate hike here and abroad.
The Bureau of the Treasury (BTr) only borrowed P4.08 billion of its P10-billion program at yesterday’s auction of reissued 10-year papers with a remaining life of nine years and 10 months.
The Treasury opted to reject some tenders even as the offer was oversubscribed, with bids reaching P13.354 billion.
The average rate stood at 6.35%, 13.7 basis points higher than the 6.213% logged on April 17 when the bonds were previously issued. The bonds carry a 6.25% coupon.
Yesterday’s average, however, was lower than the 6.9625% quoted for the bonds at the secondary market before the auction.
At the close of trading, the 10-year papers rallied to fetch a 6.32% yield.
After the auction, National Treasurer Rosalia V. De Leon said the Treasury opted to partially award the bonds as market appetite was concentrated on the shorter-dated securities.
“The preference continues to be [on the short-dated tenors],” Ms. De Leon said, adding that the “sweet spot” for the investors continues to be the three- and five-year bonds.
“They’re still worried about further rate hikes by the Fed (US Federal Reserve), and eventually also the next action of the [local] central bank,” she said.
Reuters reported that Philadelphia Fed President Patrick Harker said on Monday the monetary authority should hike interest rates two or three more times this year, and could tweak as soon as next month, amid rising inflation.
Meanwhile, the policy-setting Monetary Board of the Bangko Sentral ng Pilipinas (BSP) hiked key rates by 25 basis points during their third meeting of the year amid accelerating inflation and robust economic growth.
However, BSP Deputy Governor Diwa C. Guinigundo earlier said the 25-basis-point hike is sufficient to curb rising inflation.
“Some analysts are even predicting another hike if ever by the BSP this June. They continue to have some cautiousness in terms of being able to make sure [that] they would still be within the bond curve,” Ms. De Leon added, noting that the rising oil prices and US Treasury yields were also factored in by banks.
OPTIONS
Meanwhile, Ms. De Leon said that the Treasury is considering financing options other than the regular weekly offerings following the partial awards and rejections during the previous auctions.
“We [might] have a bigger offering like a retail Treasury bond (RTB). We also have the option to do an external financing instead of domestic,” she said. “We’ll have to match it with the requirements on the spending side. But the good thing for us is the revenue collection is also improving significantly. That’s also compensating for the lower awards.”
Sought for comment, a bond trader said the result of yesterday’s auction shows the market is waiting for the announcement of an RTB.
“This auction only shows us that market is still waiting for the RTB announcement so there will be less demand for bonds with tenor of more than five years,” the trader said in a text message.
The Treasury raised P255.4 billion from its last RTB issuance in November.
The bond trader added: “Looks like more than half of the market players wanted BTr to give higher rates, but it settled at a high of 6.375%.”
The national government borrows from local and foreign sources to fund increased spending plans and boost economic activity.
The government plans to borrow a total of P888.23 billion this year to plug its budget deficit capped at three percent of the country’s gross domestic product. — Karl Angelo N. Vidal

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