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Shares rebound as rout eases valuation concerns

LOCAL SHARES bounced back on Wednesday along with the recovery of international markets, as the index’s steep decline from the 9,000 level brought back valuations to an acceptable level.

The 30-company Philippine Stock Exchange index (PSEi) ended its three-day losing streak yesterday, firming up 1.37% or 117.14 points to 8,667.56. The broader all-shares index also closed 1.15% or 58.17 points higher at 5,086.08.

“The local market took cue from the rebound of US stocks overnight coupled with the overdone decline of the local market over the past six days that brought down the leading relative valuation levels to more reasonable levels,” PCCI Securities Brokers Corp. Research Head Joseph James F. Lago said in an e-mail.

After losing more than a thousand points on Monday, the Dow Jones Industrial Average regained its losses by jumping 2.33% or 567.02 points to close at 24,912.77. The S&P 500 index saw a 1.74% uptick to 2,695.14 as well, with the Nasdaq Composite Index rising 2.13% to 7,115.88.

Meanwhile, Regina Development Corp. Managing Director Luis A. Limlingan said he expects the Bangko Sentral ng Pilipinas (BSP) to increase rates soon as the economy starts to feel the effects of the Tax Reform for Acceleration and Inclusion law, as January headline inflation coming in at 4%. 

“Significant drivers were the surge in prices of alcoholic beverage and tobacco from 6.4% in December to 12.3% in January, food and non-alcoholic beverage from 3.5% to 4.5% in January, and restaurants and miscellaneous goods/services from 3% to 3.7%,” Mr. Limlingan said in a mobile phone message.

“Should the next month see no signs of cooling off, we’re inclined to expect the BSP to begin hiking rates in March, not even ruling out the possibility of one this Thursday,” he added.

Sectoral indices moved to positive territory, led by the industrials counter, which advanced 2.11% or 243.68 points to 11,757.26. Services followed, going up 1.71% or 28.89 points to 1,714.65; financials climbed 1.49% or 32.55 points to 2,212.46; property rose 1.36% or 52.83 points to 3,912.43; mining and oil added 1.25% or 144.40 points to 11,653.78; and holding firms increased 0.75% or 65.51 points to 8,755.12.

PCCI Securities’ Mr. Lago noted that the start of the release of earnings reports also contributed to the market’s rise on Wednesday. 

“The initial stream of full year 2017 earnings reports while mixed were also encouraging. The slowing down of foreign portfolio selling today also was a factor which also helped the peso recover vis-à-vis the dollar,” he said.

The market saw some 1.28 billion issues switch hands, valued at P9.08 billion, lower than Tuesday’s P10.42-billion value turnover.

Advancers trumped decliners, 127 to 82, while 47 issues ended flat. 

Foreigners remained sellers for the ninth day, as net foreign selling stood at P598.98 million, although lower than the P1.44-billion net outflow recorded on Tuesday. — Arra B. Francia

BSP keeps watch as inflation spikes

By Mark T. Amoguis
Researcher
with Melissa Luz T. Lopez
Senior Reporter

THE OVERALL INCREASE in prices of widely used goods and services surged in January by its fastest clip in more than three years, topping market consensus on the back of the impact of higher taxes.

The Bangko Sentral ng Pilipinas (BSP) said that while the actual pace was the ceiling of its estimate range for the month, it would “closely” monitor the situation and was “ready to take timely action” should policy intervention be needed to bring inflation to heel.

Preliminary Philippine Statistics Authority (PSA) data showed inflation picking up to four percent, faster than December’s 3.3% and the 2.7% recorded in January 2017.

Inflation Rates

January’s pace was faster than the 3.5% median in a BusinessWorld poll of 14 economists and hit the top end of BSP’s 3.5-4% range and the Finance department’s (DoF) 3.3% estimate for that month.

It was also the fastest reading since October 2014’s 4.3%.

Core inflation, which excludes volatile food and energy items, was also faster during the period at 3.9% compared to 3% in December and 2.5% in January last year.

BSP expects full-year inflation to average 3.4% this year, higher than the 3.2% finish in 2017 but still within an official 2-4% target range.

“The faster overall price increase of goods can be attributed mainly to the 4.5% increase in the food and non-alcoholic beverages segment,” the National Economic and Development Authority (NEDA) said in a statement.

“The push in inflation is partly due to TRAIN, considering particularly the excise on fuel and additional ‘sin’ taxes,” NEDA quoted its director-general, Socioeconomic Planning Secretary Ernesto M. Pernia, as saying, referring to Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act enacted in December and which took effect last month.

At the same time, Mr. Pernia said effects of tax reform would be “minimal and temporary.”

In a separate statement, the DoF said “[t]he rise in inflation in January may be partly traced to the excessive price adjustment for the ‘sin’ tax, the sugar-sweetened beverages (SSB) tax in the TRAIN law in the case of non-alcoholic beverages, and weather disturbances in the case of vegetables.”

BSP Governor Nestor A. Espenilla, Jr. told reporters that January’s inflation spike remained within expectation, even as it hit the ceiling of both its estimate for that month and a 2-4% full-year target for 2018.

“The higher January 2018 reading was expected by the BSP although it is at the top end of our forecast for the month,” Mr. Espenilla said in a WhatsApp message.

“We think these are temporary drivers of inflation and would eventually stabilize,” he said of TRAIN’s impact on prices of widely used consumer items.

RA 10963 imposed an additional P2.50 per liter excise tax on diesel and P3/liter on kerosene at a time world crude prices have been hitting their highest levels in nearly three years. The new law also either hiked or imposed additional taxes on cars, coal, sugar-sweetened drinks and a host of other items.

The central bank, Mr. Espenilla said, “will be closely monitoring the situation and stand ready to take timely action based on our evaluation of all relevant data.”

The DoF said in an economic bulletin that “Of the four percent inflation, 2.1 percentage points was accounted for by ‘sin’ products and sugar-sweetened beverages”.

The food and non-alcoholic beverages index, which account for nearly 38.98% of the consumer price index (CPI), rose 4.5%, faster than the 3.5% logged in December 2017 and 3.4% in the same period last year.

Meanwhile, alcoholic beverages and tobacco more than doubled year-on-year with the index growing 12.3% last month compared to 5.6% in January 2017 and 6.4% in December 2017. Broken down, inflation for tobacco increased 17.4% from 6.9% a year prior while that of alcoholic beverages went up 4.8% from 3.7%.

For food alone, the index went up 4.5% in January compared to 3.7% a month earlier and 3.6% in January 2017.

Non-food inflation, meanwhile, was 3.1%, faster than two percent a year ago.

Other sub-indices that contributed to inflation were: furnishing, household equipment and routine maintenance of the house (two percent); health (2.6%); transport (3.2%); and restaurant and miscellaneous goods and services (3.7%).

“Although electricity prices last month were noted to be lower, the momentum of the first tranche of the tax reform program is undeniable,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UnionBank).

RATE HIKE TIMING ANYONE’S GUESS
“I will still stick to my expectation that the BSP will not tweak its monetary policy any time soon. I see that the BSP has already included this high January inflation level in its forecasts,” Mr. Asuncion said.

“So far, I think they still have enough elbow room since the impact of the TRAIN law is expected in the first two or three months… I’m also sticking to my forecast of a mid-year and end-year tweaks by the BSP, a total of 50 basis points (bps).”

ANZ Research economists Eugenia Fabon Victorino and Sanjay Mathur said they see the central bank raising benchmark rates by 25 bps at its March 22 meeting.

“In our view, firm domestic demand will keep inflationary pressures strong, as opposed to the central bank’s stance that price drivers are temporary,” the ANZ analysts said, pointing out that full-year inflation will likely breach four percent.

Nomura analysts likewise see inflation settling at 4.3% for 2018, a steep jump from last year’s 3.2%.

This builds up expectations of a more hawkish tone from the BSP at its monetary policy review on Thursday. “The likelihood of a tightening move at Thursday’s meeting has increased significantly,” Jose Mario I. Cuyegkeng, senior economist at ING Bank N.V. Manila, said separately. “We are now looking at advancing the timing of our rate hikes and are reviewing our two-rate hike forecast for 2018.”

For his part, Angelo B. Taningco, Security Bank Corp. economist, said that it would be worthwhile for the central bank to monitor future inflation trends before adjusting its monetary policy stance. “Against this backdrop, I expect the central bank to raise its key interest rates modestly, i.e. by 25 bps, in its second monetary policy meeting scheduled in March,” he said.

For Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines: “The possibility of a rate hike from the BSP this Thursday has increased as a result of January’s strong inflation figures, both headline and core.”

He added that the BSP might take a proactive approach by hiking rates sooner rather than later, considering the natural time lag of monetary policy.

“While a rate hike from the BSP is on the table for this year amid rising inflationary pressures, any decision to hike policy rates on Thursday might be a close call, especially since majority of the BSP’s communications so far are leaning towards steady policy settings,” he said.

“It is also important to note that January’s inflation has been affected by transitory weather disturbances. Hence, it might be overstating the impact of the TRAIN law.”

Rajiv Biswas, chief economist at IHS Markit, shares this view, saying: “With headline CPI inflation hitting the top of the central bank’s inflation target range, the BSP is expected to tighten monetary policy at least twice in 2018” with the first hike implemented this week and the next one in the second quarter.

“Surging CPI inflation, strong GDP (gross domestic product) growth and rapid credit expansion are all combining to put the BSP on a more hawkish stance with monetary policy tightening expected soon.”

Del Monte’s Philippine unit to raise up to P16.7B in IPO

By Arra B. Francia
Reporter

DEL MONTE Pacific Limited (DMPL) is taking its Philippine unit public, with plans to raise up to P16.7 billion to repay debts.

In a disclosure to the stock exchange on Tuesday, the listed canned fruit manufacturer said Del Monte Philippines, Inc. (DMPI) will be offering a total of 559.464 million shares to the public, or about 20% of its outstanding shares, for up to P29.88 apiece.

DMPI’s planned sale of a fifth of its shares would be the country’s biggest initial public offering (IPO) in 15 months and Southeast Asia’s largest for a food and beverage firm in nearly six years, Reuters said. The announcement comes as domestic demand for consumer goods remains strong despite the prospect of rising prices due to higher taxes on fuel.

DMPL said net proceeds of the offer will be used to partially prepay or repay debt, as well as for general corporate purposes.

“The prepayment of such loans will allow the DMPL Group to deleverage and strengthen its balance sheet. Such prepayment is allowed under the current loan facility agreements without any fee or penalty,” DMPL said in its disclosure.

The company said it submitted the IPO registration statement last Monday to the Securities and Exchange Commission. It will also have to get the approval of the Philippine Stock Exchange (PSE).

BDO Capital and Investment Corp. has been tapped as issue manager, sole global coordinator and sole book runner.

It would be the Philippines’ largest IPO since Pilipinas Shell Petroleum Corp.’s $380.79-million share sale in October 2016.

For the food and beverage sector, it would be the Philippines’ biggest on record and the largest in Southeast Asia since Felda Global Ventures Holdings Bhd’s $3.27 billion IPO in June 2012, Thomson Reuters data showed.

Sought for comment, Regina Capital Development Corp. Managing Director Luis A. Limlingan said DMPI’s IPO would be a welcome start for 2018.

“The market is starving for its first IPO of the year and Del Monte could be a welcome addition. Depending on the pricing and the growth prospects of the company then it would be attractive enough for both retail and institutional clients since they will be raising possibly more than $300 million,” Mr. Limlingan said in a mobile phone message.

“The company could readily use the proceeds since the agricultural sector has exhibited weak growth compared to the other constituents of GDP (gross domestic product).”

DMPL, which is listed on both the PSE and the Singapore Stock Exchange, said it will seek the approval of its shareholders for the IPO through an extraordinary general meeting. Following the maiden share sale, DMPL will keep around 67% of its shareholdings in DMPI.

DMPI is an indirect subsidiary of DMPL through Del Monte Pacific Resources Limited’s Central American Resources, Inc. It sells canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup.

Around two-thirds of its sales are from Philippine operations, while the remaining one-third is from export markets under the S&W brand.

DMPL recorded a net loss attributable to controlling stakeholders of $2.8 million in the three months ending October, against an attributable profit of $19.97 million in the same period in 2016.

For DMPI alone, sales grew by four percent in peso terms, as the company increased penetration of its products in the market, but was down 2.9% in US dollar terms due to the weakening peso.

DMPL has been crafting ways to turn around the business. Last December, the company raised $100 million from the sale of Series A-2 preferred shares in order to pay its outstanding bridge loan from BDO Unibank, Inc. that is scheduled to mature in February 2019.

Shares in DMPL climbed 6.67% to close P11.20 apiece at the Philippine Stock Exchange on Tuesday, one of the biggest gainers amid losses for much of the bourse. — with inputs from Reuters

Mining compelling despite policy hurdles — BMI

THE PHILIPPINES remains a compelling proposition for foreign miners, even as the current administration — which ends its six-year term in 2022 — continues its predecessor’s tack of tightening the state’s hold on the industry, according to an assessment of BMI Research.

“Environmental regulations, high taxes and resource nationalism will continue to plague the mining industry of the Philippines,” the Fitch Group unit said in a summary of findings — e-mailed to journalists on Tuesday — of its Philippines Mining Report that was published in January.

“However, we maintain that the industry is well-positioned for longer-term growth as foreign miners look to take advantage of the country’s sizeable and relatively untapped deposits and low operating costs.”

The country’s mining sector has been reeling from an unfriendly policy environment since former president Benigno S.C. Aquino III issued Executive Order No. 79 in July 2012 that imposed a moratorium on new mining projects until a new mine revenue sharing scheme is enacted.

President Rodrigo R. Duterte’s assumption of power has not lifted pressure on the industry, and while a harsh crackdown in February 2017 by staunch environmentalist-turned-Environment secretary Regina Paz L. Lopez relaxed somewhat when she was booted out of office in May after failing to bag lawmakers’ fiat for her appointment, her ban on open-pit mining — widely used by miners — remains in effect.

The current government is also moving to increase its share in industry revenues by including higher mining levies in a tax reform package that the Finance department will submit to Congress within the year.

Adding to uncertainty is an ongoing review by the multi-agency Mining Industry Coordinating Council of sanctions Ms. Lopez had imposed — for various infractions of environment laws — on 28 of 41 operational metal mines in the country and 75 other projects in pre-production stage.

Despite nagging policy constraints, BMI Research now expects value of the country’s mining output to rise annually — though by progressively smaller increments — until Mr. Duterte ends his six-year term in 2022: by six percent to $3.98 billion this year, five percent to $4.18 billion next year, four percent to $4.34 billion in 2020, three percent to $4.47 billion in 2021 and by two percent to $4.56 billion in 2022.

Latest available data from the Mines and Geosciences Bureau showed that total mining production rose in value by 6.06% to P81.475 billion as of September from the P76.82 billion recorded in 2016’s comparable nine months, but mainly because of better world prices.

The same comparative nine months saw production of most metallic minerals fall in volume terms despite increases in value: gold by three percent to 16,999 kilograms (kg), silver by 11% to 23,951 kg, copper concentrate by 19% to 210,428 dry metric tons (DMT), nickel direct shipping ore by 11% to 19.01 million DMT and chromite by 47% to 13,694 DMT.

As of end-2016, the Philippines was estimated to have reserves consisting of 1.854 billion MT of gold, 1.696 billion MT of silver, 1.761 billion MT of copper, 116.136 million MT of nickel, 116.001 million MT of iron and 47.264 million MT of chromite.

BMI Research said it sees average annual copper production growth easing to 4.6% in the 2018-2027 period from 18.0% over 2008-2017.

Performance of gold production, however, should rebound to 5.7% over 2018-2027 from a 2.6% drop in 2008-2017. “Growth will be boosted by a pipeline of new projects coming online and higher prices of gold in the coming years,” BMI Research said, adding that it projects average world price of the yellow metal to improve to $1,525 per ounce (/oz) by 2021 from $1,300/oz last year.

Nickel ore production growth will slow to an annual average of 2.7% over 2018-2027 from 22% in the preceding 10 years “because of the introduction of more stringent regulations and depleting ore grades”.

“Environmental regulations will remain a top concern for mining firms operating in the Philippines, especially since a ban on open-pit mining was put in place in April 2017,” BMI Research said, citing other challenges as “proposals to increase taxes and resource nationalism”.

Gov’t rejects all bids for T-bonds

THE GOVERNMENT rejected all bids for fresh seven-year Treasury bonds (T-bond) on offer yesterday as banks factored into their bids the faster January inflation print and the expected rate hike by the Bangko Sentral ng Pilipinas (BSP).

The Bureau of the Treasury did not award seven-year papers at its auction yesterday, which was met with demand worth P25.82 billion, slightly bigger than the P20 billion it wanted to borrow.

Had the government proceeded with a full award, the debt papers, which will mature on Feb. 8, 2025, could have fetched an average rate of 5.273% and a coupon rate of 5.5%, higher than the 4.39% average quoted when these papers were last sold.

Still, yesterday’s would have been lower than the 5.9432% yield on the seven-year papers in the secondary market before the auction.

At the close of trading, the seven-year T-bond closed flat.

After the auction, National Treasurer Rosalia V. De Leon told reporters that the government rejected the bids because they were unreasonable.

“We see that the rates are really beyond our estimates of the reasonable rates that we expected for this new seven-year issuance,” Ms. De Leon said.

She said banks likely factored into their bids the faster January inflation figure, as well as the expectations of a rate hike from BSP.

“It’s also a calibration of [the banks’] expectations on the Feb. 8 policy rate setting of the monetary board given the inflation of 4%,” she noted.

Data released yesterday by the Philippine Statistics Authority showed headline inflation last month accelerated to 4%, faster than the 3.3% reading in December and the 2.7% print posted in the comparable year-ago period.

The January print was also faster than the 3.5% consensus from 14 analysts in a BusinessWorld poll conducted late last week.

In a commentary sent to reporters, ING Bank N.V. senior economist Jose Mario I. Cuyegkeng said the faster-than-expected inflation last month makes it more likely that the BSP will tweak its interest rates in its meeting tomorrow.

“The likelihood of a tightening move at Thursday’s meeting has increased significantly,” Mr. Cuyegkeng said.

“We are now looking at advancing the timing of our rate hikes and are reviewing our two-rate hike forecast for 2018.”

Meanwhile, a trader shared the sentiments of Ms. De Leon, adding that market players “can’t help” but make unreasonable bids.

“[M]arket players can’t help it. We know that [the government] would like to issue more given the ‘Build Build Build’ program. And now you have higher inflation [and the] probability of BSP acting to address this concern,” the trader said in a mobile phone message. — Karl Angelo N. Vidal

Globe net profit drops in 2017

GLOBE TELECOM, Inc. reported its net profit fell 5% to P15.08 billion in 2017 despite record revenues, as “increased investments in data network pushed non-operating expenses and depreciation charges higher.”

In a statement, Globe said it recorded a 2% increase in non-operating expenses to P4.27 billion, “largely due to the increase in interest expenses and spectrum amortization related to the San Miguel Corp. (SMC) telco asset acquisition.”

“This, however, was partly offset by the recognition of a one-time gain last September, related to the increase in fair value of the retained equity interest of Globe in Globe Fintech Innovations, Inc. (Mynt),” the company said.

Core net income, which excludes the impact of non-recurring charges and foreign exchange and mark-to-market charges, dropped by an annual 15% to P13.5 billion, with the full impact of the SMC acquisition.

For the fourth quarter, net profit plunged 57% to P2.1 billion, while core profit declined 28% to P2.33 billion.

Consolidated service revenues rose 6% to P127.9 billion in 2017, which the telecommunications giant says is its highest ever for the full year. Revenues for the October to December period went up 2% year on year to P32.8 billion.

“The sustained revenue momentum was driven by the solid growth in data-related products brought about by the increasing popularity of streaming and on demand video content,” Globe said.

Mobile revenues increased 7% to P98.5 billion in 2017, fueled by robust growth in mobile data revenues. Mobile data, which accounted for 44% of the total revenues, saw a 23% rise in revenues to P43.1 billion in 2017. On the other hand, SMS revenues were flat, while mobile voice dipped by 5% year on year.

As of end-December, Globe’s mobile subscriber base stood at 60.7 million, 3% lower than the 62.8 million subscribers reported a year ago. This after the company in 2017 started excluding from its reporting prepaid subscribers who do not reload within 90 days of the second expiry period, versus the previous cut-off of 120 days.

Revenues from its home broadband business went up 7% to P15.6 billion, as its total number of subscribers grew by 15% to 1.3 million. Corporate data business revenues jumped 4% to P10.3 billion.

However, traditional fixed-line voice revenues fell 8% to P3.49 billion in 2017.

“We are confident that our continued investments in our network’s data capacity and coverage, will allow us to continue to provide superior customer experience and improve the over-all connectivity in the country, while building a solid foundation to deliver sustainable long-term growth and shareholder value,” Globe President and CEO Ernest L. Cu was quoted as saying in a statement.

SLOWER REVENUE GROWTH
The Ayala-led telecom is expecting slower revenue growth for this year, in the “low single digits.”

“In 2017, revenues grew by 6% and obviously, 2018, we’re coming off higher base from that 6% growth. While we do expect our corporate and broadband businesses to grow faster, there will be growth in mobile. Growth in 2017 was also not that large due to base. So, the guidance we have for this year is 4%. Last year, our guidance was mid-single digit, that’s 5%,” Globe Chief Financial Officer Rizza Maniego-Eala said during a briefing on Tuesday.

Mr. Cu said during the same briefing the company still sees growth, particularly in mobile data users.

“There’s still potential of growth… given 56% of customers use mobile data even if 70% have smartphones,” he said.

Meanwhile, Globe may keep its $850-million capital expenditure (capex) for the next two years.

“Historically, if you look at the spending trends, you can project. You see business and data growth. Logical for us but we don’t know the number. That is depending on what we see market needs. We do spend as necessary. If you look at the numbers, we went $750 million in ’15, $1 billion in ’16, $850 million in ’17 and projecting over $850 million to $900 million in ’18,” Mr. Cu said.

As of end-2017, Globe said it spent around P42.5 billion in capital expenditures “to support the growing subscriber base and its demand for date.”

Mr. Cu also said they are focusing on tapping the market for prepaid broadband, rather than rolling out an expansive fiber network, which is the strategy of PLDT.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — P.P.C. Marcelo

SMC sets timetable for P30-B bond offer

DIVERSIFIED conglomerate San Miguel Corp. (SMC) has set the listing of its P30-billion fixed rate bond issuance this March. 

In an investors’ briefing in Mandaluyong on Tuesday, China Bank Capital Corp. President Ryan Martin L. Tapia said the issuance will run from March 2 to 8, with listing at the Philippine Dealing and Exchange Corp. on March 15. The offer will have a base size of P20 billion and over-allotment option of up to P10 billion, 

Prior to this, the company will announce the interest rate for the bonds on March 1, with final allocation to be disclosed on the same date.

Included in the offer are five-year series E bonds due 2023, seven-year series F bonds due 2025, and 10-year series G bonds due 2028.

China Bank Capital Corp. is one of seven banks that SMC has engaged to arrange the offer. The others are BDO Capital and Investment Corp., BPI Capital Corp., First Metro Investments Corp., ING Bank, SB Capital Investment Corp., and Standard Chartered Bank.

Local debt watcher Philippine Ratings Services Corp. assigned a Prs AAA rating for the issue — the highest on its credit rating scale — which indicates the issuer has the capacity to meet its financial obligations. The company also gave the issue a stable outlook, meaning the rating is unlikely to change in the next 12 months.

The bond offer is the third tranche of SMC’s shelf registration program registered at the Securities and Exchange Commission worth P60 billion. The company raised P20 billion during the first tranche’s listing last March 1, 2017, and P10 billion from the second tranche last April 7.

The company has been conducting refinancing activities as a hedging mechanism against foreign exchange losses, given expectations on the Philippine peso’s continued depreciation. On Tuesday, the peso was valued at P51.46 against the dollar.

SMC’s attributable profit stood at P20.9 billion in the first nine months of 2017, 19% lower year on year. Revenues, meanwhile, stood at P596.9 billion for the period.

Shares in SMC lost 2.71% or P4 to finish at P143.50 each at the Philippine Stock Exchange on Tuesday. — Arra B. Francia

PDIC repeals rule excluding outstanding dues from closed banks’ insured deposits

THE Philippine Deposit Insurance Corp. (PDIC) has repealed a rule requiring closed banks to deduct outstanding dues of an account holder before computing insured deposits.

In a regulatory bulletin, the state-run firm said they have revoked a seven-year-old rule that requires banks under liquidation to deduct outstanding obligations of a depositor before identifying the amount covered by deposit insurance.

This follows changes introduced in the PDIC Charter which was signed into law as Republic Act 10846 signed on June 11, 2016.

“[T]he obligations of a depositor are no longer netted out from his/her total deposits in the closed bank for purposes of computing insured deposit,” PDIC Bulletin 2018-01 reads, as signed by President Roberto B. Tan on Feb. 2.

Under the PDIC charter, the state insurer steps in as receiver of problem banks and acquires the lender’s assets in order to pay outstanding liabilities to depositors.

The new rule invalidates Regulatory Issuance No. 2011-04, which sets the rules to net out outstanding loans, penalties and charges due from an account holder before finalizing the amount which they will receive as insured deposits.

Bank deposits are insured up to P500,000 per account, according to the law.

The BSP has shut down six rural banks and one thrift bank in 2017, after they were found to be incapable of remaining in business. In 2016, the regulator closed 22 lenders.

Also yesterday, the PDIC said it will auction off at least P157 million worth of properties this February in three separate auctions in Metro Manila and Davao. Among the assets to be sold are residential, commercial and agricultural lots.

Last year, the deposit insurer said it generated a total of P259.16 million from the sale of assets incurred from closed banks as well as corporate properties. Properties worth P201.08 million raised premiums worth P58.08 million.

“The disposal of these assets increases the chances of recovery of uninsured depositors and creditors of their trapped funds. Meanwhile, gains from the sale of corporate assets are added to the Deposit Insurance Fund, PDIC’s main fund source for payment of valid deposit insurance claims.” — Melissa Luz T. Lopez

8990 Holdings posts P10B revenues in 2017

REVENUES of mass housing developer 8990 Holdings, Inc. slipped 7% in 2017, amid delays in securing permits for its projects.

In a statement issued Tuesday, 8990 Holdings said its unaudited revenues reached P10.09 billion in 2017, lower than the P10.87 billion it generated in the same period a year ago. The company, however, said it reached its full-year revenue target of P10 billion.

“2017 unaudited revenue of the company was reported at P10.09 billion as the strong fourth quarter performance was able to reverse the negative growth trajectory seen during the first nine months of the year,” the company said.

8990 Holdings has yet to submit its full-year financial report to regulators.

Delays in securing project permits weighed down the company’s financials last year. In the first three quarters alone, 8990’s net income dropped by 22% to P2.47 billion. Company officials, however, noted that it would be able to recover once construction picks up and buyers see projects being completed.

Contributing to 8990 Holdings’ revenues for the year was the sale of a total of 7,348 homes. Units in Luzon accounted for 54% of this number, while Visayas and Mindanao booked 34% and 12%, respectively.

In terms of sales value, Luzon cornered the largest chunk at 58%, followed by Visayas at 33% and Mindanao at 9%.

The company further noted that medium-rise and high-rise buildings are now contributing more to housing revenues, up 47% from 26%.

This year, the listed property developer has committed to launch five more developments worth P60 billion, as it aims to expand its footprint across the country.

“2018 will be even more exciting for us as we will launch more large-scale projects that will make 8990 poised to capture the Metro Manila affordable housing market,” 8990 Holdings President and Chief Executive Officer Willibaldo J. Uy was quoted as saying in the statement.

With this, the company targets to book at least P12 billion in revenues for 2018.

Shares in 8990 gained six centavos or 0.96% to close at P6.33 each at the stock exchange on Tuesday. — Arra B. Francia

TNT KaTropa forward Williams: being ready

By Michael Angelo S. Murillo
Senior Reporter

VETERAN TNT KATROPA forward Kelly Williams turns 36 years old today. But while he is no longer a spring chicken and has already logged so many minutes in 12 years in playing in the Philippine Basketball Association (PBA), he has shown no signs of slowing down, even saying that he is a “better” player now than ever before.

Key to what has been a productive tenure for him even late in his career, the former PBA most valuable player said is “being ready,” giving his best each time he steps on the floor regardless if he is a starter or not.

“I think that is every player’s mind-set going into a game. You want to do the best you can and give your all. Just take advantage of the time given you because you’ll never know when you will get another opportunity,” Mr. Williams shared to a group of sportswriters following their 90-85 win over the Kia Picanto last week.

“I consider myself a better player now than before. I was an MVP with Sta. Lucia and I have moved here at TNT and adjusted and evolved over the years. I have matured in how approach the game and I’m just grateful,” said Mr. Williams, who spent his early years in the PBA with the now-defunct Sta. Lucia Realtors, which he helped win a title in 2007.

In their game against Kia, Mr. Williams further underscored his “being ready” mantra, stepping up in lieu of the unavailable Mo Tautuaa (bum stomach) to help his team notch the hard-earned win.

Mr. Williams top-scored with 23 points, on 61% shooting (11-of-18), to go along with eight rebounds while providing stability and leadership amid a tough and spirited challenge from the unpredictable Picanto.

“It certainly felt good tonight. Mo was out and we just picked it up,” Mr. Williams said.

He went on to say that the mind-set to step up for him and his team would continue, more so with the possibility of TNT losing some players briefly to Gilas Pilipinas which will see action for the second window of competition for the FIBA World Cup Qualifiers this month.

“It’s like anything else. When one is out you have to fill up those shoes. So it won’t be different,” said Mr. Williams, who expressed hope to stay healthy moving forward so as to continue playing at a high level for TNT.

TNT VS PHOENIX
Meanwhile, Mr. Williams and TNT (4-3) trek back to the court today against the Phoenix Fuel Masters in the curtain-raiser at 4:30 p.m. at the Mall of Asia Arena.

The KaTropa try to build on their win over Kia last time around and win back-to-back to solidify their push for a spot in the top four in the standings.

Apart from Mr. Williams, TNT is also banking on their other players, including All-Star guard Jayson Castro, who had 22 points and nine rebounds in their last game as well as RR Garcia who provided the finishing touches in their last game and finished with 13.

Phoenix (3-4), for its part, is coming off a loss in the hands of the streaking Alaska Aces, 93-75, last week.

Matthew Wright and Jeff Chan led the Fuel Masters with 16 and 14 points, respectively, but they could tow the team to victory against a thorough Alaska attack.

Playing in the main game today at 7 p.m. are the Barangay Ginebra San Miguel Kings (3-4) against Kia (1-6).

On another note, Alaska’s Vic Manuel was named PBA player of the week after averaging steady numbers of 15.5 points, four rebounds, two assists and 1.5 steals and helping his team notch wins over Phoenix and GlobalPort Batang Pier.

In winning the weekly citation, “Muscleman” Manuel beat out teammate Chris Banchero, TNT’s Williams and Castro, Rain or Shine’s Beau Belga, Chris Tiu and Ed Daquioag, San Miguel’s Chris Ross, Chico Lanete and June Mar Fajardo, NLEX’s Cyrus Baguio and Larry Fonacier and Magnolia’s Mark Barroca.

Wizards in peak form vs Pacers

LOS ANGELES — The Washington Wizards are playing like contenders again as they took advantage of an out-of-sync Indiana Pacers team to pull off a 111-102 win as eight players scored in double figures Monday.

All-star guard Bradley Beal scored 21 points and Kelly Oubre had 15 for the Wizards, who earned their season-best fifth consecutive victory.

“I thought everybody chipped in and played well,” Washington coach Scott Brooks said.

The Wizards are on a roll and they are winning big time without all-star guard John Wall.

Since Wall went down with an injured left knee, Washington has won all their games. The latest victory also gave the Wizards their fourth in a row over the Pacers.

“John is such a key and valuable piece to our team,” Beal said. “He draws so much attention at what he brings to both ends of the floor, that’s kind of irreplaceable.

“It’s definitely a huge hit to us having him out, but we’ve been having some success. We’ve figured it out a little bit.”

Besides having eight players in double figures, three Wizards grabbed at least seven rebounds.

Tomas Satoransky and Tim Frazier each finished with six assists for Washington, who outscored Indiana, 30-11, in transition and had a 43-35 rebounding edge.

While the Wizards were flying high, the Pacers weren’t themselves as they had their six-game home winning streak halted.

With all-star guard Victor Oladipo out with an illness and point guard Darren Collison out with a bad left knee, the Pacers never mustered a serious challenge.

Bojan Bogdanovic scored a season-high 29 points for the Pacers as he tried to spur a fourth-quarter rally. Joe Young added 17.

“Vic is our go-to-guy,” said Bogdanovic. “We knew it was going to be tough without both.

“They play heavy minutes. We got two less players in the rotation. I think they didn’t win this game. We lost this game with too many turnovers and too many easy points.”

Elsewhere, Andre Drummond had 17 points and 17 rebounds, and the Detroit Pistons earned their fourth straight win with a 111-91 victory over the Portland Trail Blazers.

Detroit has won three in a row since trading for Blake Griffin last week. Griffin led Detroit in scoring Monday, but he had ample help on offense.

The victory moved the Pistons back to .500 and even with Philadelphia for the final playoff spot in the Eastern Conference.

FOURTH STRAIGHT WIN
Griffin finished with 21 points and nine rebounds. He shot well from beyond the arc too, making a trio of three-pointers. Anthony Tolliver added 15 points for Detroit and Reggie Bullock and Langston Galloway added 13 points each.

“I didn’t really think we moved the ball that much at the start of the game, but then we really got it going,” said coach Stan Van Gundy. “The best part is that you look at how many guys got involved. Once you start moving the ball, it gets contagious.”

Damian Lillard scored 20 points and C.J. McCollum added 14 for the Blazers, who lost again after losing a heartbreaker at the buzzer to the Boston Celtics on Sunday.

“They had one action — dribble handoff out of the corner — and they kept getting down to the centre of our defence,” Portland’s Lillard said. “Once guys get confident and get to making shots, it’s hard to stop.” — AFP

RoS coach Caloy Garcia: ‘The only way we can be happy is by winning’

STRAIGHT to the point, Rain or Shine coach Caloy Garcia answered all questions surrounding trade rumors involving some of his key players and addressed queries on why James Yap is being benched during crucial stretches in some of the games of the Elasto Painters.

“We want to keep everybody happy, but the only way we can be happy is by winning, not because players are not seeing more minutes,” Mr. Garcia told BusinessWorld in an interview.

Fans questioned the rationale behind Mr. Yap not being utilized fully in some of the games of the Elasto Painters. A video was even shown to Garcia during one of the huddles where the soft-spoken mentor telling the two-time Most Valuable Player that he’s going to be replaced by Beau Belga.

“What people don’t know is that James is coming off an injury and I even told him that he still doesn’t have the lift each time he goes to the basket. He admitted that to me,” added Mr. Garcia. “But me and James are in good terms and I have no plans of trading him and he’s not requesting to be traded, either.”

Mr. Garcia, however, didn’t deny the fact that guard Jericho Cruz has been put on the trading block, but as long as negotiations aren’t finalized yet, he should remain committed to play for the Elasto Painters.

“I told the players that we just have to be professional about it,” added Mr. Garcia. “Every time we play, we have to put the effort because the team owners pay their salaries and that’s the only way we can repay them.”

“Jericho really wants to go back to Coach Yeng (Guiao), but I told him we have a job. There’s no security that you can be traded. It’s hard to trade a player without getting the player you wanted in return, so I just told him that the only way you can be traded is if you play good. If you play good, you can get something good in return.”

For Mr. Garcia, the issues are more like a challenge for him as a coach and as a result, the Elasto Painters have won back-to-back games to bolster their chances of moving to the playoffs.

“It’s more of a challenge on my side, to try to get these players motivated. I made a mistake when we played Kia because they were not motivated at that time,” he added. “I hope our consistency would continue.” — Rey Joble

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