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Batangas rural bank ordered shut

A RURAL BANK in Batangas has been ordered shut by the Bangko Sentral ng Pilipinas (BSP), becoming the second lender to be closed down by regulators this month.

The BSP’s Monetary Board on Thursday shut down the operations of the Empire Rural Bank, Inc., a lender based in Lipa City. The Philippine Deposit Insurance Corp. (PDIC) took over the bank the following day as receiver.

Empire Rural Bank runs one branch along C.M. Recto Avenue in Lipa, and is led by its president Benjamin B. Abendan, according to the BSP’s database.

The bank holds P36.4 million in total deposits spread across 564 accounts as of December 2017, the PDIC said. Of the amount, P31.6 million is covered by deposit insurance.

PDIC’s takeover allows the state-run deposit insurer to acquire the lender’s assets in order to pay outstanding liabilities to depositors.

Bank deposits are insured up to P500,000 per depositor, according to the law. Funds used to settle valid deposit insurance claims are drawn from the Deposit Insurance Fund managed by the PDIC.

Any remaining amount which cannot be supported by the insurance fund will be sourced from the sale of the closed bank’s properties.

Depositors with balances of P100,000 or lower can avail of early payment, provided that they have no outstanding obligations with the bank, the PDIC said.

The Empire Rural Bank follows the fate of the Rural Bank of Loreto, Inc. in Dinagat Islands, which was also closed down by the BSP on Feb. 9.

The central bank ordered the closure of six rural banks and one thrift bank last year. In 2016, the regulator closed 22 lenders. — Melissa Luz T. Lopez

PSEi dips below 8,500

By Arra B. Francia, Reporter

LOCAL shares continued to decline on Friday, dragged by index heavyweights unloaded by foreign investors.

The 30-member Philippine Stock Exchange index lost 0.56% or 48.01 points to 8,467.56 on Friday, failing to follow the general upswing seen in global markets. The broader all-shares index likewise declined 0.47% or 23.63 points to 5,063.56.

“Overall, we traded sideways which was what we expected. Several blue-chip issues took significant losses as we see continued net foreign selling,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a report.

Papa Securities Corp. noted that blue chip JG Summit Holdings, Inc. (JGS) dragged the index. Shares in JG Summit dropped 2.75% or P2.05 to P72.50 apiece on Friday, with foreigners selling P167 million worth of stocks in the firm.

This follows Ayala Land, Inc., which was sold down 0.79% to P43.90 each, for an aggregate value of P250 million from foreign investors.

“We also saw selling pressure on the country as the Asia/Pacific region was up when Philippine net foreign selling surpassed the P1-billion mark again at P1.04-billion, the last time we saw this much selling was last Monday, Feb. 12,” Papa Securities Trader Gabriel Perez said in an e-mail.

Net sales on Friday almost tripled Thursday’s net outflows of P389.87 million.

Most Asian indices went back to positive territory on Friday, tracking the general increase in markets in the United States, where the Dow Jones Industrial Average gained 0.66% or 164.70 points to 24,962.48.

Majority of sectoral indices trekked lower on Friday, led by the financials sector that last 1.11% or 24.39 points to 2,177.06. Property declined by 0.95% or 36.77 points to 3,825.42; industrial fell 0.83% or 93.84 points to 11,151.25; services dipped 0.09% or 1.53 points to 1,744.07; while holding firms were down 0.02% or 1.28 points to 8,621.77.

The mining and oil sector was the lone sub-index that managed to post gains, climbing 1.15% or 139.52 points to 12,238.06.

A total of 3.26 billion issues switched hands, valued at P9.24 billion, lower than the previous session’s turnover of P10.46 billion.

Decliners prevailed for the day, 122 against 91 that advanced and 39 that ended flat.

Among the day’s advancers was MRC Allied, Inc., jumping 48.72% to 58 centavos, with a value turnover of P729 million, making it the second most traded issue of the day.

“Some say the interest in MRC is linked to its possible emergence as another telco player. This past August, its majority shareholder, Menlo Capital Corp, acquired 70% of PT&T (Philippine Telegraph & Telephone),” Papa Securities’ Mr. Perez said.

Philippines summons US Ambassador over intelligence report

THE Philippines has summoned United States Ambassador Sung Y. Kim on the latest Worldwide Threat Assessment report of the US intelligence community that listed President Rodrigo R. Duterte as “a threat to democracy in Southeast Asia.”

In a statement on Friday afternoon, Feb. 23, Presidential Spokesperson Herminio Harry L. Roque said: “Executive Secretary Salvador C. Medialdea summoned United States Ambassador to the Philippines Sung Kim yesterday, February 22, where they discussed the latest US Intelligence Community’s Worldwide Threat Assessment report.”

Mr. Medialdea, according to Mr. Roque, “instructed the Department of Foreign Affairs (DFA), through our Philippine embassy in Washington D.C., to coordinate and engage with the US agencies involved in the writing of the assessment.”

“ES Medialdea further directed our embassy officials and staff in the US to provide the latter accurate information on the realities happening on the ground in the Philippines, including the actions taken by the President and his administration to promote socioeconomic development for the country and provide a safe and secure environment for all Filipinos, respecting at all times the rule of law,” the spokesman added.

The Feb. 13 report, bylined by National Intelligence director Daniel R. Coats, places Mr. Duterte alongside Cambodian’s Hun Sen, the Rohingya crisis in Myanmar, and Thailand’s military-backed constitution as “regional threats to democracy.”

The report likewise said that Southeast Asian countries “will struggle to preserve foreign policy autonomy in the face of Chinese economic and diplomatic coercion.” — Arjay L. Balinbin

Snap royalty Kylie Jenner helped erase $1.3 billion in one tweet

Snap Inc.’s flagship platform has lost some luster, at least according to one social-media influencer in the Kardashian-Jenner clan.

Shares of the Snapchat parent company sank 6.1 percent on Thursday, wiping out $1.3 billion in market value, on the heels of a tweet on Wednesday from Kylie Jenner, who said she doesn’t open the app anymore. Whether it’s the demands of her newfound motherhood, or the recent app redesign, the testament drew similar replies from her 24.5 million followers. Wall Street analysts too have begun to notice, citing recent user engagement trends noticed since the platform’s redesign.

Jenner’s tweet was followed late Thursday by one from Maybelline New York, asking its followers if it should stay on the Snapchat platform. The beauty-product brand owned by Paris-based L’Oreal SA said its “Snapchat views have dropped dramatically,” but it still wanted to connect with its followers.

In a single tweet… by BusinessWorld

Citigroup analyst Mark May downgraded the stock to sell from neutral earlier this week after seeing a “significant jump” in negative reviews of the app’s redesign. He expects the reviews could cause user engagement to fall, hurting financial results.

Meanwhile, as the app takes criticism, Chief Executive Evan Spiegel may become one of the highest paid executives in the U.S. After the company’s IPO last March, Spiegel got a $636.6 million stock grant that will be payable through 2020.

“Still love you tho snap,” Jenner hedged in a later tweet. — Bloomberg

China, India compete for bourses as regional rivalry expands

The push for geopolitical influence in Asia is expanding from hard infrastructure to financial assets, with a Chinese bourse outbidding an India rival for Bangladesh’s main stock exchange.

The Shenzhen Stock Exchange offered more money for a 25 percent stake in the Dhaka Stock Exchange, but also sweetened its bid with nearly $40 million worth of technical assistance, according to documents seen by Bloomberg News. It follows a successful 2016 bid from a Chinese consortium that included the Shenzhen and Shanghai stock exchanges that purchased 40 percent of the Pakistan Stock Exchange.

India’s main bourse, the National Stock Exchange, bid a lower amount for the Dhaka bourse and also wanted to negotiate additional services in separate agreements, according to the documents.

The Chinese offer, currently awaiting final approval from the Bangladesh regulator, is part of the broader contest between Beijing and New Delhi in the region’s smaller countries, from Nepal to Myanmar. Beijing had already invested heavily in the region’s hard infrastructure. But as China seeks closer economic ties as part of its Belt and Road Initiative — a vast network of ports, railways, roads and infrastructure — its state-owned bourses have also been investing in foreign exchanges.

“China is implementing a long-term strategy of quiet encirclement of all potential rivals in Asia,” said Husain Haqqani, South and Central Asia director at the Hudson Institute in Washington, and Pakistan’s former ambassador to the U.S. “That strategy includes seeking economic pre-eminence in South Asian countries and the bids for bourses is part of that plan,” he added.

Winning Bid

The Shenzhen bid was roughly $120 million, compared to NSE’s $82 million. But the Chinese deal also offered to help Dhaka with training, technical assistance, technological upgrades and secondments. The Chinese would also help the exchange diversify into bonds, asset-backed securities and derivatives, while offering seminars on regulatory issues.

Separately, Bangladesh Prime Minister Sheikh Hasina told Indian journalists Feb. 20 that their nation shouldn’t worry about Chinese investment in her country. “We want investment and cooperation from whoever offers it,” she said according to the Press Trust of India.

The Dhaka bourse bid was not China’s first. Along with its 40 percent stake in the Pakistan Stock Exchange, the Shenzhen Stock Exchange has also held talks about investing in the Philippine Stock Exchange Inc., Ramon Monzon, the latter’s chief executive officer, said in October.

“The stock exchanges in China are all state-owned,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology. “They represent the growing financial power of China, and this potential acquisition shows the mounting financial influence of China on Belt and Road countries.”

China’s foreign ministry didn’t respond to an emailed request for comment. Shenzhen Stock Exchange did not return phone calls seeking comment.

‘Chinese Influence’

Beijing has already planned investments worth more than $50 billion in the China Pakistan Economic Corridor projects and built a port at Sri Lanka’s Hambantota.

President Xi Jinping visited Bangladesh in 2016 and announced $20 billion in low-cost loans, mostly for infrastructure. India has tried to push back, offering billions in lines of credit and infrastructure assistance to Bangladesh, while funding projects in Myanmar.

“Bangladesh is walking through a geopolitical minefield,” said Ahsan Mansur, executive director of the Dhaka-based Policy Research Institute. “It’s always a balancing act while dealing with China and India.”

Buying up bourses extends China’s influence from physical to financial infrastructure and could eventually lead to China impacting global norms, said Shailesh Kumar, Asia director at Eurasia Group, a political risk consultancy. Over time, “transparency could be affected” on these exchanges, particularly if “standards for listing are diluted,” he said.

“While till now many expected both to seek influence to own hard assets, the Dhaka Stock Exchange situation showcases that China really is interested in broad-based influence and access,” Kumar said. “Beyond roads and ports, China shows it’s interested in dominating all aspects of South Asia by exporting its philosophy and means of doing business.” — Bloomberg

Asian markets finish week on a high

HONG KONG — Asian markets ended the week on a positive note following the lead from Wall Street, with energy firms lifted by a rally in oil prices.

While the volatility that greeted the start of February has subsided for now, traders continue to fret over the prospect that US borrowing costs are likely to rise further as the world’s top economy powers ahead.

“Investors are just nervous about interest rates,” Paul Nolte, a portfolio manager at Kingsview Asset Management in Chicago, told Bloomberg News.

“Everybody is waiting for more economic data to confirm or deny whatever the Fed position is. It’s a big case of the nerves.”

Most equities in Asia sank on Thursday after the Fed released minutes pointing towards a number of rate hikes this year owing to an expected surge in inflation as Donald Trump’s tax cuts kick in and economic growth improves.

However, Friday saw a bounce-back as investors tracked their New York counterparts.

“The minutes were far more balanced than the equity market sell-off suggested,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“The discussions about their inflation target being symmetric indicate that the Feds are less concerned about the updraft from inflationary pressures than current market pricing.”

Energy gains
Tokyo ended 0.7 percent higher, helped by a weaker yen. Hong Kong climbed one percent, Shanghai added 0.6 percent and Sydney put on 0.8 percent. Seoul and Singapore each jumped 1.5 percent, while Wellington, Taipei and Jakarta were also well in the green.

Energy firms across the region were higher, recovering some of Thursday’s losses, after oil prices jumped on the back of data showing US stockpiles fell last week. Forecasts had been for a rise.

The news sent crude sharply higher on Thursday as it eased worries about a pick-up in US production, which was threatening to negate the output cap by OPEC and Russia. Both main oil contracts continued to rise in Asia.

“The market’s been concerned about US production ramping, so as long as you still have these healthy inventory reports, it helps ease some of the fears,” Craig Bethune, a senior portfolio manager at Manulife Asset Management, said.

On forex markets the dollar climbed against the euro, recovering some losses after European Central Bank minutes showed a cautious move towards an exit from crisis-era stimulus.

The broadly positive sentiment also provided a platform for the greenback to rise against the yen, which is usually the go-to currency in times of turmoil.

In early European trade London and Paris each rose 0.1 percent, while Frankfurt put on 0.2 percent.

Key figures

Tokyo – Nikkei 225: UP 0.7 percent at 21,892.78 (close)

Hong Kong – Hang Seng: UP 1.0 percent at 31,267.17 (close)

Shanghai – Composite: UP 0.6 percent at 3,289.02 (close)

London – FTSE 100: UP 0.1 percent at 7,259.26

Euro/dollar: DOWN at $1.2291 from $1.2323 at 2150 GMT

Pound/dollar: DOWN at $1.3940 from $1.3952

Dollar/yen: UP at 107.08 yen from 106.74 yen

Oil – West Texas Intermediate: UP 10 cents at $62.87 per barrel

Oil – Brent North Sea: UP five cents at $66.44 per barrel

New York – DOW: UP 0.7 percent at 24,962.48 (close)

Web vulnerabilities in 2017 surge 212% — study

The number of web application vulnerabilities soared to an alarming rate in 2017, with more than a third these vulnerabilities unsolvable by any software fix, a study by Internet security firm showed.

Local DDoS Mitigation Services provider IPC cited a report by its global partner, Imperva Incapsula, which revealed that vulnerabilities went up by 212% in 2017 with 14,082 recorded, as compared to 6,615 in the previous year. The report also showed that more than half of these vulnerabilities have a public exploit available to hackers, and that more than a third (36%) don’t have an available solution such as a software upgrade workaround or software patch.

Niño Valmonte, IPC’s Director for Marketing & Digital Innovation, said that money is the main motivator in the rapid increase of Web vulnerabilities. “Websites are common targets because they can generate a substantial amount of money for cybercriminals. For instance, an e-commerce website would normally store personal information. In the wrong hands, we already know the kind of risk we can get exposed to. Also, criminals can hold websites up for ransom from company owners.”

Ransomware, the method of putting up a website for ransom is a global phenomenon that is predicted to exceed $11.5 billion annually by 2019, according to IPC. The most common form of payment sought from victims in order to get their websites back is the popular cryptocurrency Bitcoin.

Content of websites in peril
Another alarming statistics that the study revealed is the increasing number of vulnerabilities in Content Management Systems (CMS), a tool used to create and manage content posted on a website. The study revealed that WordPress, one of the most commonly used CMS today, posted a 400% increase in new vulnerabilities since 2016, with 75% coming from third-party vendor plugins.

IPC urged businesses to be wary of this as when successfully infiltrated, cybercriminals can use the CMS to edit, remove, and even post content on a website. The damage may range from altering text to even changing the visual appearance of the entire website, a tactic commonly known as defacement. Criminals can also extract sensitive information stored inside a website through the CMS.

“These findings should serve as a wake-up call for organizations to put up stronger web security protocols. CMS infiltration should not be taken lightly because this is only the tip of the iceberg. CMS attacks also pose risks to personal and confidential data,” Mr. Valmonte said.

To protect one’s website, IPC recommends deploying security measures such as applying a Web Application Firewall (WAF) that can monitor and control incoming web traffic.

LTFRB to study allowing TNVS outside Metro Manila

The Land Transportation and Franchising Regulatory Board (LTFRB) is looking into allowing transport network vehicle services (TNVS) to operate in more regions in the Philippines.

LTFRB Board Member Aileen A. Lizada told reporters on Friday, Feb. 23,  that they have been receiving requests in areas like Mindanao that have resorted to using private cars due to lack of  transport services.

Ms. Lizada added that it would take one to two months to conduct feasibility studies before they can allow more TNVs to operate nationwide. — Anna Gabriela A. Mogato

Stocks continue decline

Shares continued to decline on Friday, pulled down by index heavyweights unloaded by foreign investors.

The 30-member Philippine Stock Exchange index lost 0.56% or 48.01 points to 8,467.56 on Friday, failing to follow the general upswing seen in global markets. The broader all-shares index likewise declined 0.47% or 23.63 points to 5,063.56.

“Overall, we traded sideways which was what we expected. Several blue-chip issues took significant losses as we see continued net foreign selling,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a report.

Papa Securities Corp. noted that blue chip JG Summit Holdings, Inc. (JGS) dragged the index, after dropping 2.75% or P2.05 to P72.50 apiece on Friday, with foreigners selling P167 million worth of stocks in the firm. This follows Ayala Land, Inc., which was sold down 0.79% to P43.90 each, for an aggregate value of P250 million from foreign investors.

“We also saw selling pressure on the country as the Asia/Pacific region was up when Philippine net foreign selling surpassed the P1-billion mark again at P1.04-billion, the last time we saw this much selling was last Monday, Feb. 12,” Papa Securities Trader Gabriel Perez said in an email. — Arra B. Francia

Peso ends week higher as correction continues

The peso strengthened anew against the dollar on Friday, Feb. 23, retreating back to the P51 level, as the local currency continued to correct following its plunge on Monday, Feb. 19.

The local currency ended the week at P51.89 against the greenback yesterday, 21 centavos stronger from its P52.10 close on Wednesday and Thursday.

The peso traded stronger the whole day, opening the session at P52 versus the dollar, while its best showing yesterday was at P51.82. Its intraday low, meanwhile, was seen at P52.05 to the greenback.

Dollars traded slightly declined to $656.3 million yesterday from the $668.4 million that changed hands in the previous session.

Traders interviewed over the phone on Friday said the peso continued its strength as a correction after it plunged to the P52 level on Monday.

“The magnitude of the move is too big, and given the fact that there was a support in the past four trading days. There was a support for the peso,” a trader said.

On Monday, the peso traded as low as P52.45 intraday after the Bangko Sentral ng Pilipinas (BSP) cut banks’ reserve requirement ratio by a percentage point before the long weekend, catching the market players off guard.

The trader said that the move from the BSP will free up to P90 billion into the system, causing the peso’s value to weaken.

“Probably, the BSP is providing liquidity lately. That prompted most of the players to try to square out the long-dollar-peso positions for now. Thus we saw a good correction,” the trader noted.

Meanwhile, another trader said that the domestic trading tracked the stronger local currency in the offshore exchange market.

“The offshore dollar-peso trading went [higher], that’s why we saw the peso strengthening [yesterday],” the trader said, adding that the pair continued to trade within the range. — Karl Angelo N. Vidal

Batangas rural bank ordered shut

A rural bank in Batangas has been ordered shut by the Bangko Sentral ng Pilipinas (BSP), marking the second lender closed down by the regulators this month.

The BSP’s Monetary Board on Thursday shut down the operations of the Empire Rural Bank, Inc., a lender based in Lipa City. The Philippine Deposit Insurance Corp. (PDIC) took over the bank the following day as receiver. — Melissa Luz T. Lopez

Military: We’re getting ready for next Marawi siege

The Armed Forces of the Philippines (AFP) is getting ready for another possible “warfare” in Mindanao, Deputy Commander of Joint Task Force Ranao Colonel Romeo S. Brawner, Jr. said.

“[F]rom our experience from the Marawi siege, we are preparing for another urban warfare. In the eventuality that something similar to Marawi City happens, we should be ready… So from the lessons that we learned, we are now rewriting our doctrines. We are now reorganizing our units, we are re-equipping and retraining. So from the side of the Armed Forces, handa po kami for another Marawi siege whether it happens in Marawi or elsewhere,” Mr. Brawner told reporters during the Bangon Marawi briefing on Friday, Feb.23.

As for the peace and order in Marawi City, Mr. Brawner said: “It is relatively safe and secure.”

However, outside Marawi, especially around Lanao Lake, the AFP has had some encounters since the first month of the year “against believed members of the Maute-ISIS.”

Asked whether the terrorist group is capable of launching another attack, Mr. Brawner said: “Well, sa ngayon hindi pa nila kayang gumawa—ang assessment po namin ano on the ground is that hindi pa nila kayang gumawa ng isang pag-atake katulad ng ginawa nila sa Marawi City (Based on our assessment on the ground, the terrorists are not yet capable of carrying out another attack like what they did in Marawi).”

The implementation of martial law in Mindanao especially in the areas of Lanao del Norte and Lanao del Sur also plays an important role in maintaining peace and order, according to the AFP.

“[V]ery effective ang martial law especially in the areas of Marawi City and Lanao Del Sur, including Lanao Del Norte. For one, wala na tayong nakikitang mga nagdadala ng firearms openly (For one, we do not see people carrying firearms openly). And since the implementation of martial law, halos wala na pong (almost there are no) cases of murder, homicide or other killings within Marawi City and Lanao Del Sur. Of course, I am not including the [incidence of] rido, hindi kasama iyon [clan war, that’s not included]. But iyong mga crimes related to the loss of lives from firearms o illegal firearms ay nawala na ito [were eliminated] because of our control, our gun control that we are implementing and we are able to implement this because of martial law,” Mr. Brawner explained. — Arjay L. Balinbin

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