How PSEi member stocks performed — February 19, 2018
Here’s a quick glance at how PSEi stocks fared on Monday, February 19, 2018.
As rate woes roil Treasuries, bond funds shift to Asia
THE TREASURIES ROUT is making emerging Asian bonds look even more attractive.
Higher yields, buoyant economies, and a slower pace of rate increases in Asia suggest that sovereign debt in the region will outperform Treasuries, said Adam McCabe, head of Asian fixed income at Aberdeen Standard Investments. Indonesian, Chinese and Indian bonds offer value, according to Aberdeen, State Street Global Advisors and Amundi Asset Management.
“The fundamentals are still very strong in Asia from an economic perspective, and the adjustment from a policy perspective is larger in the US than it is in Asia,” McCabe said in an interview in Singapore. “Those policies weren’t adopted in Asia, so the room for bond yields to move should be less.”
As the Federal Reserve moves to dial back its stimulus and the market starts to consider a quicker pace of interest-rate increases, the 10-year Treasury yield has surged to a four-year high with debate raging over how far and fast it will advance. While Asian central banks are also starting to tighten, the expectation is for a more gradual increase, according to State Street.
The yield on Indonesian government notes due in a decade has climbed 10 basis points in February to 6.42%, while that on Indian securities rose 15 basis points to 7.58%. In China, yield on the 10-year bond is down 3 basis points to 3.89%.
In comparison, the 10-year Treasury yield has increased 17 basis points and reached a high of 2.94% last week.
“On the whole for Asia, we’re seeing a bit of a slow normalization of interest rates,” said Ng Kheng Siang, Singapore-based Asia Pacific head of fixed income at State Street, which oversees $2.67 trillion. “We’ve seen that action taking place in Korea, Malaysia and possibly the Philippines may be next. We’re not seeing a major policy change.”
Once the recent volatility eases, local-currency China and Indonesian government bonds may offer buying opportunities, according to Ng. China is attractive due to the prospect of the nation’s inclusion in major bond indexes while economic reforms, domestic consumption and infrastructure spending will support Indonesia’s outlook, he said.
Amundi is similarly keen on Southeast Asia’s biggest economy, which won upgrades from two rating companies last year on the back of improving finances and accelerating growth. Global funds have bought $1.1 billion of rupiah sovereign debt so far this year after pumping in $12.1 billion in 2017.
“We still like markets that have increased credibility in policy making and improved structural inflation dynamics,” said Wan Howe Chung, Amundi’s Singapore-based head of Asian fixed income. “These include Indonesia which very much falls into this bucket. With this sell-off, we’re potentially adding some risk. It’s not cheap but there will be a point that we’ll feel that it’s cheap enough.”
For Amundi and Aberdeen, Indian bonds are a standout thanks to their relatively high yields and Prime Minister Narendra Modi’s policy initiatives. “We see the reform effort as being ongoing and the direction of travel is very clear,” said McCabe. “As these reforms take shape, what you’ll find is that the country risk premium should decline.” — Bloomberg
Presidential aide asserts innocence in frigate deal
By Camille A. Aguinaldo
THE SPECIAL Assistant of President Rodrigo R. Duterte on Monday asserted innocence in the controversial P15.5-billion frigate acquisition project of the Philippine Navy, saying he was being linked to the controversy as an attempt to destroy the Navy’s project and the current administration.
“I am innocent. I was dragged into the issue in order to destroy the administration of President Duterte,” Special Assistant to the President Christopher Lawrence “Bong” T. Go told The Senate committee on national defense during its inquiry into the frigate project.
Mr. Go also said the controversy “is seriously derailing the implementation” of the frigate deal, as he noted the Navy’s urgent need to acquire the warships in order to guard the country’s waters.
“Perhaps, this is really their intention: to block the implementation of this important security program and ensure that this administration will fail,” said Mr. Go, who was accompanied at the hearing by leading members of Mr. Duterte’s Cabinet.
Mr. Go was reported to have intervened in the project when he handed out a white paper to Defense Secretary Delfin N. Lorenzana endorsing a supplier which would provide the Combat Management System (CMS) for the two frigates.
At the hearing, Mr. Go pointed out that no one intervened in the contract between the government and the frigate manufacturer Hyundai Heavy Industries (HHI), noting that the program was “concluded during the Aquino administration.”
“Nothing changed, nothing was changed and nobody intervened in the contract… the contract could be called photo finish because this was done before the Aquino administration ends,” he said in a mix of Filipino and English.
“What we are discussing here only became an issue when Rappler(.com) and the (Philippine Daily) Inquirer came out with fake news and claimed that I interfered in this issue,” Mr. Go also said in a statement read to the senators, adding that, “(t)his is irresponsible reporting, and I would like to sincerely request the Senate to continue with the hearing and the investigation on fake news and to summon Rappler and Inquirer to the next hearing to shed light on what they reported.”
He added that Mr. Duterte had ordered that any requests in his name or those of the President’s relatives be denied.
For his part, former Defense Secretary Voltaire T. Gazmin confirmed that acquisition of the frigates began with the previous administration. But he also noted, “I did not issue any approval for awarding of the projects and other subsequent steps during the transition period…to give the next administration the opportunity to issue or not the necessary approval,” he said.
Senators also quizzed Cabinet officials regarding a Palace meeting with Navy officials in January last year on the CMS selection.
Among the documents that opposition Senator Antonio F. Trillanes IV presented at the hearing was a letter dated Jan. 18, 2017, from the Presidential Management Staff (PMS), which Mr. Go heads, and signed by Undersecretary Lloyd Christopher A. Lao, requesting a meeting with Navy officials on the matter.
Mr. Lao said the meeting was prompted by a complaint by a “group of Koreans” he could no longer identify. He maintained that what they did was standard procedure by the PMS on complaints. “We always make sure complaints are acted upon,” he said.
Commodore Sean Anthony Villa, former project management team leader in the frigate project who also attended the Jan. 18, 2017, meeting, said that meeting only tackled comparisons between the two CMS suppliers.
Mr. Go said of that meeting, “Only Usec. Lao referred. I did not know anything about this.”
Mr. Trillanes questioned the meeting pointing out the coincidence that HHI selected the other CMS supplier, South Korean company Hanwha Systems, over the Dutch Tacticos Systems which the Philippine Navy favored.
“There is too much coincidence on why didn’t they follow the end user(referring to the Philippine Navy),” he told reporters.
Senator Gregorio B. Honasan II, committee chairperson, said he sees “no major evidence that (Mr. Go) intervened with the information that we have. We don’t want to make premature sweeping conclusions,” he told reporters.
He said the committee has yet to decide if it needs to hold another hearing on the matter.
House tackles Sereno’s taxes
By Minde Nyl R. dela Cruz
THE BUREAU of Internal Revenue (BIR) on Monday, Feb. 19, said it found discrepancies in the tax declarations of Chief Justice Maria Lourdes P.A. Sereno.
During the 16th deliberation on the impeachment case against the Chief Justice, BIR Deputy Commissioner Arnel G. Guballa said his team is currently conducting an investigation on the tax declarations but opted to not release the information yet pending the approval of President Rodrigo R. Duterte.
To recall, the House of Representatives’ committee on justice on Feb. 7 directed Mr. Guballa to form a special team to check Ms. Sereno’s tax declarations for possible liabilities in relation to her failure to submit 17 years of statements of assets, liabilities, and net worth (SALNs).
“The BIR now collated the records in our database pertaining to the tax records of the Chief Justice. We have made some observations, findings on the declarations of the Chief Justice, but as of the moment, we are still waiting for the approval of the Office of the President wherein we are barred by Section 270 of the tax code,” Mr. Guballa said.
He added: “As of now, we have made some observations regarding the declaration and there are some discrepancies but we cannot yet…divulge the exact figures because of the prohibition under Section 270.”
Section 270 of the Tax Code of the Philippines penalizes officers of the BIR for unlawful disclosure of sensitive information about taxpayers.
The deputy commissioner added that he is keen to observe due process, noted that he is not intentionally withholding information for the purpose of obstructing the committee proceedings.
The House panel, chaired by Oriental Mindoro Representative Reynaldo V. Umali, then issued a subpoena for the BIR to divulge the information being requested.
Deputy Minority Leader and ABS party-list Representative Eugene Michael B. de Vera, instead, asked Mr. Guballa the details of the internal tax revenues (ITR) which BIR earlier submitted to the committee, particularly with the ones with withholding tax from the Office of the Solicitor General (OSG).
One point of inquiry is the earnings of Ms. Sereno from the OSG for serving as the government’s counsel in the Philippine International Air Terminals Co. (PIATCO) case.
Lawyer Lorenzo G. Gadon, who filed the impeachment complaint against Ms. Sereno, claimed that she did not properly pay her taxes for the P37 million she earned from the PIATCO case. Ms. Sereno, on the other hand, said she only received P30 million in tranches instead.
A lawyer and spokesperson of Ms. Sereno, Jojo Lacanilao, said it is too early to say that there were discrepancies.
He pointed that Ms. Sereno should be able to respond first before her accusers come up with a conclusion.
Mr. Lacanilao added that the issue of Ms. Sereno’s taxes is a “nonstarter” and assured that the Chief Justice paid all her taxes.
DE LIMA CASE
Meanwhile, the House panel slammed Deputy Court Administrator (DCA) Jenny Lind Aldecoa-Delorino and Muntinlupa Regional Trial Court (RTC) Presiding Judges Amelia Fabros-Corpuz (Branch 205) and Patria Manalastas-De Leon (Branch 206) for their incompatible statements.
The House panel, which was tackling Ms. Sereno’s alleged intervention in the issuance of the arrest warrant on Senator Leila B. de Lima, questioned the three court officials if they were ordered by a higher official to delay the warrant.
Presiding Judge Juanita T. Guerrero of Muntinlupa RTC Branch 204, who was not able to attend as she was on leave, was the first one to issue the warrant three days after a case against Ms. De Lima was filed on Feb. 17, 2017.
However, Judge Corpuz did not issue the warrant until four months later in June, explaining there were other pending motions that she had to read through first.
On the other hand, Judge De Leon deferred issuing the warrant until nine months later in November as she had to await the decision of the Supreme Court on the issue of the jurisdiction of the case.
The DCA and the presiding judges reiterated not receiving such orders but Ms. Delorino admitted that she did call Judges Corpuz and De Leon in relation to assistance they may need in hearing the cases.
Asked if it was in her mandate to do so, Ms. Delorino said it was the “standard operating procedure” of her office. However, Court Administrator Jose Midas Marquez said that “it may be a standard operating procedure for DCA Delorino because she has been a judge, she has been an assistant court administrator and now a deputy court administrator so she must have her own discretion or ways on how to address certain situation.”
“Personally I refrain from calling any judges especially…where there are high profile cases raffled to them solely for the purpose that I may be misunderstood. But I do not prevent or disallow my deputy court administrators to do what they think should be done or what they believe should be proper in certain circumstances, more so or especially so when they have different areas that are assigned to them,” Mr. Marquez added.
Ms. Delorino, in turn, responded that it was wrong to use the term “standard operating procedure” but said that she sees to it to attend to the needs of the lower courts should they need additional staff and inform them of the guidelines on how to handle media who cover the trials.
“It is my own way of assisting the trial courts… that is how I assist the judges in the trial courts. If they have special needs, then we try to address them as quickly as possible,” Ms. Delorino said.
The DCA also told the committee that she “gave instructions” to the three presiding judges “not to inhibit unless there are really reasons to disqualify themselves.”
Quezon City Representative Vicent P. Crisologo noted that asking the judges to not inhibit from the case amounts to intervening in the case.
Ms. Delorino recanted her previous statement and said that she only “want(ed) to make sure that they will not inhibit because if they will inhibit, then we would have to find other judges to handle the cases.”
SAGIP party-list Representative Rodante D. Marcoleta also repeatedly asked Ms. Delorino about her claims that she always called RTC judges to check if they need assistance but Mr. Marcoleta noted that Ms. Delorino could not provide the names of other judges whom she called apart from Judges Corpuz and De Leon to establish that this is a recurring practice.
Deputy Speaker Gwendolyn F. Garcia said: “Facts vs conflicting testimonies: Facts, a high court official, Supreme Court official, did call — admitted. There were only two judges who were called who subsequently issued the warrants of arrest four months and nine months later. The one judge who was not called issued the warrant of arrest three days after the filing, the cases being filed on the same day. So that, for me, should speak more than the conflicting testimonies.”
Supreme Court Associate Justices Estela M. Perlas-Bernabe and Marvic Mario Victor F. Leonen, who were invited to talk about the controversial hiring of IT consultant Helen P. Macasaet, were not able to attend the Monday hearing.
Reading from the joint letter that the two justices sent the committee, Mr. Umali cited that “they could not attend and because they have no personal knowledge about the hiring of Helen Macasaet. They only became vice chairs of the committee on computerization and library in July 2014, way after Ms. Macasaet was already hired.”
Mr. Umali mentioned that the committee will have one more hearing before concluding the impeachment proceedings which began October last year.
Complainant Mr. Gadon accused Ms. Sereno of committing culpable violation of the constitution, corruption, betrayal of public trust, and other high crimes.
The committee on justice scheduled its next hearing for Feb. 27.
Senate OK’s lifetime cell numbers bill
WITH 20 affirmative votes, the Senate on Monday approved on third and final reading a bill which would allow consumers to keep their mobile numbers for life, even if they change service providers or subscription plans.
Senate Bill No. 1636, or the “The Lifetime Cellphone Number Act” if passed, would require telecommunications entities to provide consumers with a “mobile number portability (MNP)” that enables an existing mobile number to be retained even if the consumer transfers to another network or changes from postpaid to prepaid or vice-versa.
“The bill would give consumers the freedom to choose the provider that would give the best value for their money without having to lose or change their mobile numbers,” said Senator Sherwin T. Gatchalian, sponsor and author of the bill, deemed a priority measure.
The proposed measure would also penalize telecommunications networks with fines of up to P1 million or with total revocation of operating franchises if they failed to deliver the benefits of mobile number portability to a mobile subscriber within “24 hours from the time such subscriber completed his or her porting application.”
The entities are also required to provide consumers with information on how to avail themselves of the MNP, such as application requirements and the porting process.
The bill would also remove the added fee imposed by mobile networks for calls and messages across different networks.
Mr. Gatchalian said cellphone numbers should become an extension of the consumer’s digital identity, “so that consumer loyalty will not be determined by the fear of losing their numbers but through the dynamism of competition among players.”
The proposed measure also noted that the nationwide MNP system would promote competition among telecommunications entities and urge them to provide consumers with better quality services.
“It will also foster technological innovation that will lead to an even greater demand for telecommunications products and services, and lead to a virtuous cycle of economic growth,” the bill stated. — Camille A. Aguinaldo
NFA denies collusion with rice cartel
THE NATIONAL Food Authority (NFA) on Monday denied the accusations of some solons that the agency colluded with a rice cartel, causing a shortage in NFA’s buffer stock.
NFA Administrator Jason Laureano Y. Aquino said in a statement that they are open to any audit or inquiry to clear NFA of any allegations.
Earlier this month, Senators Mary Grace Natividad S. Poe-Llamanzares and Cynthia A. Villar in separate occasions called for a probe on alleged rice cartels manipulating the price and supply of rice in the market.
“It is highly lamentable that some individuals or groups would rather find fault elsewhere, rather than help in finding solutions to the problem of low government food security stocks so we could immediately bring back to the markets affordable NFA rice for the masses,” Mr. Aquino said.
“The depletion of NFA stocks was not sudden, hence I find it rather malicious and irresponsible to accuse or insinuate any collusion between NFA personnel and private traders to manipulate the rice market and make a killing from the resulting increase in commercial rice prices.”
The NFA head said they had already requested to import rice as early as October last year to replenish their buffer stock.
Earlier this month, Mr. Aquino in a press conference said they had asked the NFA council to allow them to import last November.
While the council had approved the importation of 250,000 metric tons (MT) of rice last week, the shipment would not arrive until June or July, which would mean that the price of NFA rice is set to increase for a few months.
“If negotiations were done between November and December 2017, the agency would have saved a lot since the average world market price for rice at the time was only $368 per metric ton while in February the average price was already $420 per metric ton,” Mr. Aquino said.
“We would not have withdrawn the low-priced NFA rice from the markets as there would be an assurance of replenishment in due time.” — Anna Gabriela A. Mogato
SSS offers calamity loan assistance to Mayon-affected members
THE SOCIAL Security System (SSS) is offering a calamity loan assistance to its members and pensioners who are affected by the eruption of Mayon Volcano.
In a statement, state pension fund SSS said its active members and pensioners residing in areas affected by the Mayon Volcano eruption can get financial aid under its calamity loan assistance program (CLAP) until May 15.
SSS President and Chief Executive Officer Emmanuel F. Dooc said the member-applicants who will avail of the assistance can get a maximum of P16,000, payable in two years.
“To further help them recover from this unfortunate situation, monthly amortization will only start after three months from the time that they received the loan,” Mr. Dooc added.
The calamity loan assistance program is separate from the regular salary loan. The loanable amount is payable in equal monthly installments with an annual interest rate of 10% and monthly penalty of 1% for late payments.
SSS said the 1% service charge is being waived “as a special consideration.”
The pension fund has set aside more than P193 million for the loan program. It has estimated 19,354 potential borrowers with an average monthly salary credit of P10,000.
“Qualified applicants under CLAP are those with home address or property in NDRRMC-declared calamity areas and have a minimum of 36 monthly contributions, six of which should be paid within the 12-month period preceding the date of application,” SSS said in the statement.
NDRRMC is the National Disaster Risk Reduction and Management Council.
OFWS
Overseas Filipino workers can also avail of the calamity assistance, Mr. Dooc said, given that their residence is within the declared calamity area.
“They only need to issue an authorization letter for their representatives to submit their application on their behalf,” Mr. Dooc said.
However, member-applicants with previous CLAP availments, outstanding balance under the loan restructuring program or final benefit claims such as for total permanent disability and retirement are not qualified.
According to the latest NDRRMC update, a total of P166.07 million worth of damages to agriculture was incurred in Albay, with 10,443 farmers affected.
Last month, Albay was placed under a state of calamity.
Aside from CLAP, members can also avail of a three-month advance pension as well as direct house and improvement loan program.
SSS members who are affected by the eruption can apply for the advanced release of three months’ worth of pension until May 15.
Under the direct house repair and improvement loan, members can borrow a maximum P1 million. It will have an interest of 6% per annum fixed for 15 years. Members have until Feb. 15, 2019 to apply. — Karl Angelo N. Vidal
Sanofi stands firm on refusal to refund used dengue vaccine
FRENCH PHARMACEUTICAL firm Sanofi Pasteur, manufacturer of the controversial Dengvaxia vaccine, again declined on Monday the request of the Department of Health (DoH) to refund the amount for the used anti-dengue serum.
“We stand firmly behind our product. Refunding the used doses of Dengvaxia would imply that the vaccine is ineffective, which is not the case. And at this time, there is also no known circumstance requiring indemnification,” Sanofi Pasteur said in a statement.
The drug manufacturer previously refused the same request of the DoH during a House hearing on Feb. 5, but refunded last month P1.6 billion for the unused doses of the vaccine.
PhilStar.com reported that the DoH has tapped the help of the Office of the Solicitor General for building a civil case against the French company.
Meanwhile, the camp of lawyer Manuelito R. Luna and two non-government organizations — Volunteers Against Crime and Corruption and Vanguard of the Philippine Constitution, Inc. — yesterday filed before the Department of Justice a request for a subpoenae duces tecum (SDT) for documents relative to the procurement of the Dengvaxia vaccine.
The same groups last week charged former President Benigno S.C. Aquino III, some of his Cabinet members, and officials of the DoH with graft, technical malversation, and criminal negligence. — Minde Nyl R. Dela Cruz
Transport group leader to face new charges over strikes
THE GOVERNMENT will file a new case against transport group leader George San Mateo for organizing and holding transport strikes last year. “A criminal case will be filed against George San Mateo this week for violation of Section 20 of Commonwealth Act 146,” Land Transportation Franchising and Regulatory Board (LTFRB) Board Member Aileen A. Lizada told reporters in a message. She was referring to the Public Service Act. She said the charges would be for strikes held in June and October 2017 against the Public Utility Vehicle (PUV) Modernization Program. Mr. San Mateo, president of PISTON, again led a strike yesterday against the government’s removal of dilapidated jeepneys from the streets as part of the program. He was arrested in December for leading a transport strike in February last year. Meanwhile, the Department of Transportation (DoTr) said that a number of transport groups have pledged to deliver 3,000 modern jeepneys within the next three months. The agency signed an agreement with transport groups on Feb. 15. DoTr said a private supplier has committed to deliver 20,000 new PUVs per year, while another pledged to help operators in the processing of financing requirements and rollout of modern PUVs. — Patrizia Paola C. Marcelo
More than 67,500 people still displaced by Mayon Volcano unrest
A TOTAL of 67,588 people, belonging to 17,733 families, have yet to go home more than a month since Mayon Volcano started showing increased restiveness on Jan. 14. The Department of Social Welfare and Development (DSWD), in a report released yesterday, said majority of the displaced residents, or 62,097, are still in 57 evacuation centers while the rest are staying with relatives. The extended eight-kilometer radius danger zone around the mountain volcano remains in effect and the Philippine Institute of Volcanology and Seismology (Phivolcs) maintains an alert level 4 in the area. In its Feb. 19 bulletin, Phivolcs said: “Mayon’s activity in the past 24 hours was characterized by sporadic and weak lava fountaining, lava flow and degassing from the summit crater,” with six discrete lava fountaining episodes that lasted 10 to 23 minutes. The agency said lava flow is “sustained at 3.3 kilometers, 4.5 kilometers and 900 meters on the Miisi, Bonga and Basud Gullies, respectively, from the summit crater.”
DENR starts serving notices to 842 ‘illegal’ structure owners in Boracay
THE DEPARTMENT of Environment and Natural Resources-Region 6 office (DENR-6) yesterday started serving show cause orders to owners of 842 alleged illegal structures in Boracay Island. Jim O. Sampulna, DENR-6 regional executive director, said the order involves appearance in court. The structures include those that have encroached into areas that are considered forest lands and no-build zones. Mr. Sampulna said they will also be checking establishments and structures that have crossed the 30-meter limit from the shoreline. The DENR official said they will also be suggesting that policies be put in place to lessen the island’s population, such as requiring resort and hotel workers to live on the nearby mainland of Panay. Boracay is a 10.32-square kilometer island that, as of 2015, had about 350 lodging facilities, 33,000 residents, and an estimated two million tourists annually. — The Freeman