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Treasury bills to fetch higher rates at auction

YIELDS on Treasury bills (T-bills) on auction today are seen moving sideways as market players are on a wait-and-see mode amid lack of fresh leads while expecting the Bangko Sentral ng Pilipinas (BSP) to hike interest rates thrice this year.

The Bureau of the Treasury (BTr) plans to raise as much as P20 billion from the short-tenored securities on offer today.

Broken down, the government will auction off P9 billion in three-month debt papers, P6 billion in six-month T-bills, and P5 billion worth of one-year papers.

“We expect yields to probably move sideways or higher by up to 10 basis points across tenors,” a trader said over the phone on Friday.

In the last T-bill auction, the government only borrowed P16.5 billion out of the P20 billion it planned to raise, as the Treasury received offers worth P31.5 billion.

Broken down, the Treasury made a full award of the P9 billion programmed under the 91-day tenor as it received bids worth P18.72 billion. The average rate rose to 2.321% from the 2.233% fetched during the previous auction.

Meanwhile, the government only borrowed P4.615 billion in the 182-day T-bills out of the P6 billion it offered, even as it received P6.965 billion worth of tenders from banks. Following the partial award, yields went up to 2.577% from 2.519% in the previous auction.

The 364-day securities were also partially awarded, with the Treasury accepting just P2.853 billion out of the P5.853 billion put forward by market players.

At the secondary market on Friday, the three-month, six-month and one-year papers were quoted at 2.7105%, 2.8711% and 2.9265%, respectively.

In terms of demand, another trader said the Treasury might see demand 1-1.5 times bigger than the intended offering today, driven by “fears amid lack of fresh leads.”

The trader added that “market players still expect three rate hikes coming from the BSP” after the central bank decided to keep their benchmark rates steady at Thursday’s monetary policy meeting.

BSP Governor Nestor A. Espenilla, Jr. said in a statement read by Managing Director Francisco G. Dakila, Jr. that “the inflation path is expected to moderate and settle within the inflation target range…in 2019.”

Inflation accelerated to 4% in January, the fastest in more than three years, as the government attributed it to the impact of the first tax reform package, which slashed off income taxes while imposed excise tax on certain commodities.

As inflation is expected to overshoot the central bank’s 2-4% target, economists expect the BSP to tighten its rates as early as its March 22 meeting.

“A likely breach in the inflation target alongside intensifying external imbalances suggest that the central bank will need to hike policy rates. We expect tightening to commence in March,” economists Eugenia Fabon Victorino and Sanjay Mathur of ANZ Research said in a note.

Meanwhile, DBS economist Gundy Cahyadi said: “We reckon the BSP is prepping the market for a potential rate hike at its next meeting on 22 March.”

The Treasury plans to auction off P120 billion worth of Treasury bills and another P120 billion worth of Treasury bonds in the January to March period. This is higher than the P200 billion it offered in the last quarter of 2017.

The government borrows from local and foreign sources to fund its budget deficit, which for this year is capped at 3% of the country’s gross domestic product.

The government targets a P888.23-billion gross borrowing plan this year, 22.05% higher than last year.

Of this amount, P176.27 billion will be from external financing while P711.96 billion will be sourced locally.

PANDA BONDS
Meanwhile, the government said its planned maiden issuance of yuan-denominated panda bonds was already approved by People’s Bank of China and National Association of Financial Market Institutional Investors (NAFMII).

“I am pleased to share with you that the issuance of Panda Bond was approved by People’s Bank of China and NAFMII [on] Feb. 9,” the Bank of China was quoted as saying by Finance Secretary Carlos G. Dominguez III in a Viber group message.

“The current plan is to launch in March,” National Treasurer Rosalia V. De Leon said, as shared by Mr. Dominguez.

“Of course, this is subject to good window and competitive pricing.”

In November, the government and the Bank of China have signed the underwriting agreement of the country’s maiden issuance of $200 million worth of yuan-denominated securities.

Ms. De Leon said in the statement that the bond issue will “diversify our funding sources and provide benchmarks for other Philippine issuers in the onshore market.”

Last month, the government sold $2 billion worth of 10-year dollar-denominated global bonds, raising $750 million worth of fresh funds while swapping $1.25 billion worth of old papers, with a rate of 3%. — K.A.N. Vidal

How PSEi member stocks performed — February 9, 2018

Here’s a quick glance at how PSEi stocks fared on Friday, February 9, 2018.

Bitcoin finds a bottom as risk aversion grips marts

WHAT’S SUPPOSED to be the most volatile asset in the universe is proving to be a bastion of stability compared with wild swings and carnage in global equities last week.

Bitcoin clawed its way back from the four-month low of $5,922 it touched on Tuesday, rebounding 53% to $9,069. The S&P 500 Index and the Dow Jones Industrial Average both fell more than 5% last week, wiping out gains for the year.

Emerging markets stocks and currencies also plunged, while shorter maturity US Treasuries climbed as investors fled from risky assets to safe-havens.

Bitcoin’s supporters are quick to extol the cryptocurrency’ virtues as an asset that’s uncorrelated to the broader market — independent from any single country, company or central bank — which can serve as a haven in times of market turmoil.

And while that turmoil can usually be found in Bitcoin prices and headlines, last week US equities are beating the largest cryptocurrency on that field.

Since the drop below $6,000, Bitcoin has been on a steady climb, causing volatility measures on the digital asset to stabilize while the sell-off in the S&P 500 triggered the biggest jump on the Chicago Board Options Exchange Volatility Index ever.

The “do no harm” approach to cryptocurrencies taken by US regulators at a Senate hearing Tuesday sparked the rebound, while negative headlines from regulatory crackdowns in China and South Korea that have weighed on prices subsided.

The 70% slump from Bitcoin’s high of almost $20,000 has prompted finance heavy weights to say the crypto bubble had finally popped. Judging from price action this week at least, maybe those calls were premature. — Bloomberg

SC officials to further tackle charges vs Sereno

THE House of Representatives’ committee on justice is looking to hold three to four more meetings before it concludes its determination of probable cause in the impeachment complaint against Supreme Court (SC) Chief Justice Maria Lourdes P.A. Sereno, its chairman said.

“More or less (three to four meetings)….Basta weekly mayroon kami (hearings) until end of [February] tapos ’yun na (we’ll have weekly hearings until end of February and then, that’s it),” Oriental Mindoro Representative Reynaldo V. Umali, chairman of the justice committee, said in a phone interview.

Mr. Umali said the proceedings are scheduled based on the availability of the resource persons invited. “Kasi ’yung iba pinapatawag namin, hindi available (My problem is… the availability of the resource persons. We summon them but some are not available). So we will have to reset it,” he said.

For the 15th hearing scheduled on Monday, Supreme Court associate justices Teresita J. Leonardo-de Castro and Diosdado M. Peralta are expected to return and discuss the alleged manipulation of the short list in the Judicial and Bar Council (JBC) and other matters.

In her previous testimonies, Ms. De Castro said the chief justice tampered the TRO on the Senior Citizen’s party-list group. Ms. De Castro also alleged that Ms. Sereno acted on her own in creating the Regional Court Administrator’s Office in Region 7 (RCAO-7).

Associate Justice Geraldine Faith A. Econg of the Sandiganbayan’s First Division was also invited to talk about the RCAO-7 where she was appointed chief, as well as the hiring of IT consultant Helen P. Macasaet.

Associate Justice Francis H. Jardeleza, in his earlier testimony, had noted his exclusion from a short list on the seat vacated by retired associate justice Roberto A. Abad.

Other SC officials, including court administrator Jose Midas P. Marquez, spokesperson Theodore O. Te, and bids and awards committee (BAC) chair Enriqueta E. Vidal were also summoned by the justice committee.

Meanwhile, JBC executive director Annaliza Ty-Capacite and selection and nomination office chief Socorro D’Marie T. Inting are going to be questioned about the temporary restraining order (TRO) on the Senior Citizen’s party-list case and RCAO-7.

JBC members Jose C. Mendoza, Toribio E. Ilao, Jr., Maria Milagros N. Fernan-Cayosa, and Jose Mejia are expected to take part in discussions about the JBC and also about Ms. Sereno’s statements of assets, liabilities, and net worth (SALNs).

Moreover, the House panel directed the Bureau of Internal Revenue (BIR) to look into the income tax returns of Ms. Sereno for possible liabilities following the chief justice’s non-filing of 17 SALNs. BIR was given until Feb. 19 to submit its findings to the committee.

The justice committee began its deliberation on the impeachment complaint filed by lawyer Lorenzo G. Gadon in October last year.

Ms. Sereno is accused of culpable violation of the Constitution, corruption, betrayal of public trust, and other high crimes. — M.N. Dela Cruz

Canada’s Trudeau holds firm on PHL chopper deal

CANADIAN PRIME Minister Justin Trudeau is undeterred by Philippine President Rodrigo Duterte’s vow to end military purchases from countries including the US and Canada that impose conditions on how the weaponry is used, standing by his country’s review of a helicopter sale.

“The statements that have been coming out of the Philippines on the potential or possible uses of those helicopters have given us cause to need to follow up on that, and that’s exactly what we’re doing,” Mr. Trudeau said Saturday in Los Angeles, during a visit with the city’s mayor.

Mr. Trudeau responded after Mr. Duterte on Friday said he’s scrapping the acquisition of 16 Canadian Bell helicopters.

“Do not buy anymore from Canada or from the United States because there is always a condition attached,” Mr. Duterte told reporters in Davao City, where he previously served as mayor, on Friday before announcing in a subsequent speech that the deal would be canceled. The Canadian government denied the deal had been scrapped.

Canada ordered a review a day after the agreement was signed amid concern that the aircraft would be used against Filipino rebels. Mr. Duterte didn’t deny that: “We will really use these weapons invariably against the rebels and terrorists,” he said on Friday, according to a transcript provided by his office.

Mr. Trudeau said Saturday that Canada has a responsibility to look into how equipment it sells, whether military or not, is used. His administration has referred further questions to the Canadian Commercial Corporation (CCC), a government agency that handles such sales.

The Canadian agency declined to comment, citing the review. “As we are involved in that process, it would be inappropriate to make any further comment at this time,” the CCC said in an e-mailed statement that didn’t identify a spokesperson.

Since taking office in June 2016, the 72-year-old Mr. Duterte has launched a crackdown on drugs that’s killed thousands, prompting an investigation by the International Criminal Court (ICC) based in the Netherlands for alleged human rights violations. Months into his term, the US halted a planned sale of 26,000 assault rifles to Philippine police on concern over the killings. Mr. Duterte responded by scrapping the weapons deal.

Despite concerns over Mr. Duterte’s handling of the drug war, the US military provided hundreds of weapons to the Philippine Marines in 2017 as part of an American counter-terrorism program in the country. Still, since the canceled 2016 arms sale, Mr. Duterte and other Filipino officials have complained that purchasing weapons from the US is a slow process beset with too many conditions.

“That’s why we are discouraged from getting from them, because of these conditions,” Defense Secretary Delfin Lorenzana told reporters in May.

Mr. Duterte has instead worked to secure weapons deals and stronger relationships with Russia and China. In October, Russia gave the Philippines 5,000 rifles, 5,000 steel helmets and a million rounds of ammunition, a day after the countries signed two arms agreements. China gave the Philippines 3,000 rifles the same month as a friendly gesture.

The brash, tough-talking leader, who enjoys strong support at home, threatened to withdraw from a treaty that helped form the ICC, while daring it to execute him if he’s found guilty of crimes against humanity. Mr. Duterte vowed to eliminate illegal drugs, corruption and bureaucratic red tape when he became president.

“Find me guilty, of course, you can do that. I don’t want imprisonment,” he said at the briefing. “I beg of you to find a country where they execute.”

This isn’t Mr. Duterte’s first spat with Canada. In November, he lashed out at Mr. Trudeau and visiting officials from Europe over their criticism of alleged human rights abuses committed as part of the country’s drug war.

Mr. Trudeau was among a handful of world leaders who criticized the drugs crackdown while in Manila last year to attend meetings of the Association of Southeast Asian Nations. — Bloomberg

Duterte asked to look into plight of OFWs in Qatar, Saudi Arabia

SENATORS Leila M. de Lima and Sherwin T. Gatchalian on Sunday urged the government to also extend its assistance to overseas Filipino workers (OFWs) in Qatar and Saudi Arabia, following the President’s recent pronouncements on a ban on the deployment of Filipino workers to Kuwait.

Ms. De Lima urged the Department of Labor and Employment (DoLE) and the Department of Foreign Affairs (DFA) to implement contingency plans for displaced OFWs in Qatar.

“The government should ensure that OFWs would be assisted in finding decent jobs back home or other overseas destinations, if not help them set up business and livelihood in the country,” she said in a statement.

She also asked the Senate to act on a resolution she filed last June calling for an assessment on the impact of Qatar’s diplomatic crisis on OFWs working in Arab countries. Over 600 Filipino lost their jobs at the time, according to DoLE, following Saudi Arabia and Bahrain’s severing relations with Qatar over its alleged support for Islamic extremist groups.

Mr. Gatchalian called on the government to look into the situation on Saudi Arabia where abuses among Filipino household service workers were also reported, and to consider ordering another OFW deployment ban.

“Every time we have complaints in Valenzuela City, it’s about abuse from employers. And most of them are domestic helpers. I also noticed that almost 100% of complaints came from the Middle East, particularly Saudi Arabia and Kuwait,” the senator said in a radio interview.

He also cited reports that OFWs “by the thousands” were seeking refuge in Philippine embassies in Saudi Arabia but could not be repatriated immediately due to their pending cases or their passports being confiscated by their employers.

“There was one report of OFWs living in the embassy by the thousands. Most of them escaped from their employers because they were abused,” Mr. Gatchalian said, adding that it was time for a review of the deployment policy and the Philippines’ agreements with other countries, particularly on the protection of migrant workers.

“This is an important policy because if we do not have a bilateral agreement and the other country has no laws protecting migrant workers, we should not deploy OFWs there,” he said in a mix of Filipino and English.

He also noted that the government should study its training and livelihood programs for the repatriated workers facing unemployment.

“I believe that, with the right training, right program, we can help them,” said Mr. Gatchalian, who heads the Senate committee on economic affairs.

Mr. Gatchalian said he plans to conduct hearing on this matter, together with Senator Emmanuel Joel J. Villanueva, who chairs the Senate committee on labor, employment and human resources development. “We will combine forces with Senator Joel of the Senate labor committee. We already discussed this because this is an economic and labor problem,” he said. — Camille A. Aguinaldo

Marina next assignment for AFP Chief Guerrero

ARMED FORCES of the Philippines (AFP) Chief-of-Staff Gen. Rey Leonardo “Jagger” Guerrero will retire soon and will be appointed next to head the Maritime Industry Authority (Marina), President Rodrigo R. Duterte said.

“Jagger is retiring…and his position is waiting because I fired the Marina [chief],” Mr. Duterte said during his speech at the Manila Times’ 7th Business Forum in Davao City on Feb. 9.

Mr. Guerrero was due to retire on Dec. 17 last year when he reached the mandatory retirement age of 56, but the President extended his term until April 24 this year.

Mr. Duterte mentioned Mr. Guerrero’s upcoming retirement as he defended his appointing former military officials to key civilian positions, saying “they get the job done.”

“Now, bakit military? Kasi ang military isang utos lang,” he said.

(Now, why the military? Because the military are quick to follow an order.)

The President also said he is quite familiar with most of the military men, because they used to work with him in Mindanao.

He said: “It is not because…the military is my favorite. These guys are not from here. But during their tour of duty [in their] career, they [had] passed by Mindanao.”

“So, I know all of them. And only those also military men that I know. The others, they are all good [and] honest,” Mr. Duterte also said.

‘INFESTED WITH MILITARY MEN’
He likewise mentioned that he had asked retired military chief Eduardo M. Año to assist Environment Secretary Roy A. Cimatu, himself a retired chief of the AFP.

“Now Jagger [the incumbent AFP chief of staff] will assume [the Marina post], so I’m looking for another guy,” he said.

“So, I’m getting them to work for me. Actually, my Cabinet…is now heavily infested with military men,” Mr. Duterte said.

Marina was previously headed by Marcial Quirico C. Amaro III whom Mr. Duterte fired for his “excessive” foreign trips.

In his recent speeches, Mr. Duterte repeatedly accused Mr. Amaro of attending various conventions abroad on climate change.

“Climate change conference in Africa, he’s there. Climate change in Europe in Switzerland, [he’s there]. Climate change in California, [he’s there too]. How many conferences on climate change do we need?” the President said, adding: “So now, nobody gets out of the country. You have to ask my permission.”

Marina is under the Department of Transportation (DoTr) and is responsible for integrating the development, promotion, and regulation of the maritime industry. — Arjay L. Balinbin

House adopts resolution on trust fund for Philippine Rise

THE HOUSE of Representatives adopted last Tuesday, Feb. 6, a resolution which urges the Executive branch to allocate funds for scientific research and feasibility studies at Philippine Rise.

House Resolution (HR) 1636, authored by Ilocos Sur Representative Deogracias Victor B. Savellano, calls for the establishment of a trust fund “with seed amount of not less than” P100 million.

The said trust fund will be used “for additional scientific research, feasibility studies, marine exploration of the region, and acquisition of new equipment to improve the government’s research capabilities and further enhance the development strategies of the country,” the resolution said.

The resolution puts the trust fund under the management of National Coast Watch Council (NCWC).

The resolution noted in part that “scientific surveys and marine explorations showed that the Philippine Rise is rich in marine resources and massive mineral and gas deposits which can help the country energy sufficiency.”

Previously called Benham Rise, it was renamed under Executive Order No. 25 series of 2017 by President Rodrigo R. Duterte to assert sovereignty.

The House adopted the resolution just as Mr. Duterte ordered the cancellation of licenses for scientific research in the area. — MNDLC

Senate chief to seek review of laws on sexual harassment

SENATE PRESIDENT Aquilino L. Pimentel III said he will order a review on the country’s sexual harassment laws to toughen its penalties following increased reports of sexual abuse and intimidation.

“I’m planning to direct the appropriate Senate committees to look into increasing the penalties for acts of sexual harassment and sexual abuse,” he said in a statement Sunday.

“The law should be a strong shield that provides protection to victims of harassment and stiffer penalties to offenders and would-be offenders,” he added.

Mr. Pimentel said Republic Act 9262 or the Anti-Violence Against Women and Children Act of 2004 and R.A. 7877 or the Anti-Sexual Harassment Act of 1995 need to be updated and adjusted to “the demands of the times.”

“For example, under the 1995 Harassment Law, those convicted only face imprisonment (of) not more than six months or a fine of not more than P20,000. We should update these penalties to reflect modern realities,” he said.

The Senate leader cited reports of sexual abuse and intimidation in the show business and sports industries of the United States. He also cited a disclosure by Assumption College president Carmen Valdes about experiencing sexual abuse as a child.

Several Filipino women also shared their personal stories of sexual abuse on Twitter when the hashtag #MeToo trended last December in the wake of sexual abuse allegations against now-disgraced Hollywood mogul Harvey Weinstein.

Data from the Department of Social Welfare and Development (DSWD) showed it has assisted over 200,000 victims of sexual and physical abuse from January to September 2016.

“As a lawyer and legislator, I consider sexual harassment as one of the sickest and most deplorable offenses that can be committed because it goes into the very dignity of the victim,” Mr. Pimentel said. — Camille A. Aguinaldo

‘Dictator’ Duterte again defends Marcos burial at heroes’ cemetery

A FEW days after referring to himself as a “dictator” out of necessity, President Rodrigo R. Duterte has again defended his decision allowing the burial of late autocrat Ferdinand E. Marcos at the Libingan ng mga Bayani, saying it was not about repaying a debt of gratitude to one of the latter’s daughters, Ilocos Norte Governor Maria Imelda Josefa “Imee” R. Marcos.

Mr. Duterte, however, acknowledged, that Ms. Marcos was his “lone supporter” in Luzon during the 2016 presidential campaign.

“I ha(d) no money, no supporters. In Manila, not even a single kagawad (had supported me). Who supported me in Luzon? No (one). Only Imee Marcos,” Mr. Duterte said during his speech at the Manila Times’ 7th Business Forum held in Davao City on Feb. 9.

“Then you will say that I allowed the burial of Marcos because his family had helped me? Look, stupid,” he added.

A couple of months after his election, Mr. Duterte issued a memorandum order allowing Mr. Marcos’s burial at the heroes’ cemetery, a promise that he made to supporters of the late dictator during the presidential campaign.

The President said: “The law says who will be buried there in the Libingan ng mga Bayani. Who are the heroes? The soldiers, the president. You must be the president at one time or a soldier. On both counts, Marcos was a president, you cannot deny that. And ’yung sabi nila na he was a bogus soldier. Well, sabi niya, tama, it’s fake.”

“If your opinion is different from mine, my news is fake, yours is right. That’s what we (will) quarrel about. You are fake. Why? Because you do not jive with what I believe in,” Mr. Duterte said.

Earlier in the week, during his speech before 215 former Maoist rebels at Malacañang on Feb. 7, Mr. Duterte said: “If you say dictator, I will be a dictator. Because if I will not be a dictator, nothing will happen to this country.”

The President also said on Saturday that Mr. Marcos’s loyal supporters, mainly coming from or has roots in his home province Ilocos Norte, deserve to have their “hero” interred at the Libingan ng mga Bayani.

“Itong mga ’to mga (These critics, they’re in) denial. Look. They are ready to deny Marcos his honor. You know, if the Ilocanos would believe that Marcos was really their hero, let them have their hero, too,” Mr. Duterte said. — Arjay L. Balinbin

Women’s group slams ‘macho-fascist’ Duterte

GABRIELA Women’s Party on Sunday, Feb. 11, called President Rodrigo R. Duterte “the most dangerous macho-fascist in the government right now” following his speech last Wednesday, Feb. 7, wherein he narrated an exchange in which he tells government troops to shoot female members of the New People’s Army (NPA) “in the vagina.” Gabriela Representative Emmi A. de Jesus said in a statement. “He has further presented himself as the epitome of misogyny and fascism terribly rolled in one.” Speaking to an audience of former members of the communist NPA in Malacañang, Mr. Duterte said: “They will say ‘Okay, how many people are dead?’ ‘Three.’ ‘What?’ ‘Three.’ ‘Son of a b****, don’t lose.’ ‘Are there any women holding guns?’ ‘Sir, she’s a fighter. An amazona.’ ‘Shoot the….’” The statement earned laughter from the audience. Ms. De Jesus said such a statement from the country’s leader encourages the military “to commit more bloody human rights violations and grave abuses of international humanitarian law, and takes state terrorism against women and the people to a whole new level.” She added, ”They should expect more women to speak up and reject this style of macho-fascist leadership. We cannot just take these vile remarks sitting down.” — Minde Nyl R. dela Cruz

Tropical depression Basyang moves in

A TROPICAL depression, to be named Basyang, was expected to enter the Philippine area Sunday night, the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA) reported yesterday. As of Sunday morning, the weather disturbance was still 1,200 kilometers (km) east of Mindanao with sustained winds of 55 km per hour and moving at a west-northwest direction. “Maritime operations along the eastern seaboards of Visayas and of Mindanao may be disrupted once Tropical Cyclone Warning Signal is raised tonight (Sunday),” PAGASA said in its bulletin. Basyang’s forecast positions are: 550 km east of Hinatuan, Surigao del Sur by Monday morning, in the vicinity of Butuan City by Tuesday, and 185 km southeast of Puerto Princesa City, Palawan by Wednesday morning.