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BPI SRO plan ‘credit positive’

MOODY’S INVESTORS Service said the P50-billion stock rights offering (SRO) to be conducted by the Bank of the Philippine Islands (BPI) is credit positive as this will bolster the lender’s capital buffers.

“Based on our estimates, the rights issuance would add about 380 basis points to the bank’s common equity Tier 1 (CET1) ratio of 11.8% as of December 2017,” Moody’s said in its credit outlook published March 22.

This improvement, the debt watcher said, would bring BPI’s CET1 ratio well above the capital of other Philippine banks, as well as the 10% minimum requirement of the Bangko Sentral ng Pilipinas.

Moody’s said the rights issue will support BPI’s credit growth while strengthening its capital buffers against risks, adding that the capital raising activity will be efficient to support credit growth of about 20% over the next three years ending 2020.

“Thereafter, the bank’s CET1 ratio will decline to 12%-13% as the growth of risk-weighted assets outpaces the growth of retained earnings,” the credit rater said, adding that this may leave the bank in need of new capital because its internal capital generation capacity lags its credit growth.

On March 16, BPI said in a disclosure that it obtained approval of the Philippine Stock Exchange to conduct an SRO that would raise up to P50 billion, which will fund the lender’s business expansion.

The pricing for the issue will be announced today, while the offering will be conducted from April 26 to 25.

Aside from BPI, Metropolitan Bank & Trust Co. and Rizal Commercial Banking Corp. have also announced plans to conduct SROs expected to raise fresh capital worth P60 billion and P15 billion, respectively.

Last year, BPI booked a net income of P22.42 billion, up by 1.7% from the same period in 2016.

Shares in the Ayala-led bank closed at P109.30 apiece on Monday, up two centavos or 0.18%. — Karl Angelo N. Vidal

Celebrating Easter Sunday (03/27/18)

Café Society’s Easter treats

EASTER-THEMED chocolate confections are available at City of Dreams’ Café Society until April 1. These include bunnies in pink and white, brown, and assorted pastel colors; brown bunnies and chicken designs with a chocolate-coated rice crispies base; as well as Mr. and Mrs. Smiley egg varieties in various sizes, to name a few. Freshly baked Easter egg bread, Easter ensaymada, hot cross buns and signature pastries are also available. For details, call 800-8080, e-mail guestservices@cod-manila.com, or visit www.cityofdreamsmanila.com.

Easter Sunday brunch

HOTEL JEN Manila will hold an Easter Sunday Brunch on April 1 at the Latitude Restaurant. The brunch’s highlights include a salad bar, fresh seafood station, international hot dishes; a live pasta cooking station; and roast prime rib of beef or Cebu lechon at the carving station. And since it’s Easter, Latitude has a dedicated station for children serving waffles, mini burgers, fried chicken, along with the ice cream cart, a chocolate fountain, and a donut and churros wall. Guests dining during the Easter Sunday Brunch can also enjoy a clown show, face painting, balloon twisting, egg decorating, and an Easter egg hunt. Tickets are priced at P1,400 net per person, inclusive of Sunday Brunch, access to the pool, Easter activities, complimentary parking and valet services, and unlimited Wi-Fi access. Kids aged four to 11 are entitled to a 50% discount, while kids aged three and below are free when accompanied by at least one paying adult. For inquiries and reservations, call 795-8888 or 0917-806-2017.

Sofitel’s Island Easter

THE Sofitel Philippine Plaza Manila will hold this year’s Summer Island Adventure Easter Egg Hunt on April 1, 9 a.m. to noon, at the Grand Plaza Ballroom. Guests who come in their best luau ensemble have a chance to win special prizes. Tickets are P1,150 net per person. Meanwhile, Spiral’s 21 dining ateliers are offering Easter specific dishes including sweet treats like bunny lollipops and Easter eggs from La Patisserie. Aside from colorful animations and children’s activities, the Easter Bunny is scheduled to make a special appearance. There will also be a live musical performance by Marga Joson. The Easter brunch is set at P4,500 net inclusive of free-flowing champagne while dinner is set at P3,800 net inclusive of a glass of sparkling wine or iced tea. For inquiries and reservations, call 832-6988 or e-mail H6308-FB12@sofitel.com.

The Manhattan luxury-home market screams: I’m overpriced!

LUXURY homes in Manhattan are selling at the biggest discounts on record as owners grow tired of waiting for buyers to match their price.

Homes priced at $4 million or more that went into contract in the first 12 weeks of the year had their asking prices cut by an average of 10%, the most in data going back to 2012, according to Olshan Realty, Inc. Final sale prices, which won’t be known until the deals close, will probably reflect even greater reductions, said Donna Olshan, president of the brokerage that compiled the report.

“Most things at $4 million and above are selling 15% to 20% below the original ask,” Olshan said. “It’s a data point that screams: The market is overpriced!”

Owners who prevail in selling their homes are conceding that Manhattan’s luxury market is brimming with choices, and that even well-heeled buyers are sensitive to price. Shoppers with cash are no longer bidding up properties to record levels, and sellers who recognize the new reality are the likeliest to succeed, Olshan said.

This year, 4,600 newly developed apartments are expected to be listed for sale, with almost half of them priced at $2,400 a square foot or more, according to brokerage Corcoran Sunshine Marketing Group. That’s on top of the 3,323 new units that reached the market last year, as well as older properties listed for resale.

A total of 230 luxury units went into contract this year through March 18, a 17% decline from the same period in 2017, according to Olshan. Before finding takers, those homes spent an average of 466 days on the market, the longest stretch for the beginning of a year in data going back to 2012.

One property in Olshan’s tally is a seven-bedroom townhouse on East 65th Street that was put up for sale in October at $18 million, according to listings website StreetEasy. The seller reduced the price twice since then, eventually asking $14 million for the 10,253-square-foot home. It went into contract on March 14.

This week’s biggest deal was for a 6,360-square-foot apartment at 1 Central Park West, also known as Trump International, Olshan said. The apartment was listed for sale in May 2016 for $40 million and, over time, had its price lowered to $27.5 million before finding a buyer, according to StreetEasy.

More sellers need to follow their lead, Olshan said.

“The biggest problem right now is just straight-up overpricing,” she said. “People are still being delusional about their real estate.” — Bloomberg

How PSEi member stocks performed — March 26, 2018

Here’s a quick glance at how PSEi stocks fared on Monday, March 26, 2018.

Philippines’ overall consumer outlook index

FILIPINO CONSUMERS turned less upbeat as the year opened due to expectations that prices of goods would keep rising, the Bangko Sentral ng Pilipinas (BSP) reported on Monday. Read the full story.
Consumer Outlook

ConCom proposes to expand environmental rights

By Camille A. Aguinaldo

THE Consultative Committee (ConCom) tasked to review the 1987 Constitution plans to expand the coverage of environmental rights in the new draft Charter’s bill of rights, with the inclusion of a strengthened writ of kalikasan.

“By doing so, this will be putting at par this right to a healthy environment with the civil and political rights of the people. Meaning to say, this right to a healthy environment will be equally demandable against the state and its agencies,” ConCom chairman and former chief justice Reynato S. Puno said during a press briefing at the Philippine International Convention Center (PICC) in Pasay City.

The ConCom’s proposed coverage includes:

• Right to clean air and clean water

• Right to a healthy environment and ecology

• Right to the preservation of ecosystems

• Right to be protected from activities that destroy the environment

• Right to sustainable development

• Right to compensation for damage to environment

• Recourse to courts for immediate protection

• Stronger writ of kalikasan in the bill of rights so that it may not be subject to withdrawal or revision by the Congress or the Supreme Court.

Under the present Constitution, environmental rights have been enshrined briefly in Article 2, Section 16 which states that: “The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature.”

With the inclusion of the writ of kalikasan in the draft Constitution, Mr. Puno hoped the legal remedy would be reviewed by the Supreme Court (SC) and by Congress so it would be strengthened.

“By including this in the bill of rights, the right will be demandable against the State,” he said.

The writ of kalikasan is a legal remedy filed at the SC which provides for the protection of the constitutional right to a healthy environment. It was promulgated in 2010 back when Mr. Puno was then chief magistrate.

The SC has issued the writ against government and corporation projects, including the oil pipeline of the Lopez-owned First Philippine Industrial Corp. (FPIC) under a condominium in Makati City in 2010 and the P14-billion reclamation project in Manila Bay in 2012.

Mr. Puno said the expanded environmental rights in the new Constitution would have a self- executing provision under its bill of rights. The provision would be formulated by the ConCom subcommittee on rights, obligations, social justice before it would be voted upon by the en banc in mid-April.

Asked about the exploration of natural resources, Mr. Puno said the matter would be separately discussed by the ConCom’s subcommittee on economic reforms.

DUTERTE CAN’T EXTEND TERM
On political matters of the draft Charter, Mr. Puno said President Rodrigo R. Duterte would no longer be allowed to extend his term once the new Constitution is implemented.

“There is no holdover provision. By that time, we have shifted to (a) federal form of government…The term limits under the 1987 Constitution would still be binding,” he said.

He assured that the transition period for adopting a federal form of government would not go beyond 2022 when Mr. Duterte’s term ends.

The former chief justice added that it would be “almost impossible” to hold the plebiscite for the new Constitution in October, as previously floated by some lawmakers.

“Congress would still have to convene as a constituent assembly and right now the Senate has not convened to join the…House in a constituent assembly. Assuming the Senate agrees, then that will just be the start of their deliberations and I suppose that would take some time,” Mr. Puno said.

IRR released on law providing subsidy for tertiary education

By Minde Nyl R. dela Cruz

THE Commission on Higher Education (CHEd) on Monday formally launched the implementing rules and regulations (IRR) for Republic Act 10931 or the Universal Access to Quality Tertiary Education Act, seven months after its signing into law in August 2017.

The landmark legislation grants free tuition fees for qualified Filipino undergraduates enrolled in state universities and colleges (SUCs), local universities and colleges (LUCs) as well as learners registered under technical-vocational institutions.

Miscellaneous fees, including library fees, computer fees, school ID fees, athletic fees, admission fees, development fees, guidance fees, handbook fees, entrance fees, registration fees, medical/dental fees, and cultural fees are subsidized by the government under the law.

Students who are enrolled in private universities may avail themselves of tertiary education subsidy (TES) and those whose parents are beneficiaries of the conditional cash transfer and included in the Listahanan of the Department of Social Welfare and Development (DSWD) will be given priority.

CHEd Officer-in-Charge (OIC) J. Prospero E. De Vera III said the commission is working with the Government Service Insurance System (GSIS) and Social Security System (SSS) to come up with clearer parameters on “workable” student loans.

Mr. De Vera also said he is in talks with the House of Representatives and the Senate to work on how the miscellaneous fees paid by students during the second semester after the effectivity of the law in August 2017 can be refunded.

Senate President Pro-Tempore Ralph G. Recto, one of the proponents of the legislation, said that as the education is paid for by taxpayers, it is imperative to use the funds, amounting to P40 billion, to provide “quality” education.

“Ang pinakamahalaga dito ay ’yung side ng quality (The most important thing here is on the side of the quality). We should not be using taxpayers’ money for lousy education,” Mr. Recto said.

Mr. De Vera, for his part, also pointed out: “The law explicitly provides that the beneficiaries should be students of good standing, meaning, they passed the admission and retention requirements of the universities. So this is not a license to accept everyone to universities and colleges.”

“If you are kicked out, for example, in your state university or LUC, then you stop receiving government subsidy [because you] did not comply with the retention requirements of the universities,” he added.

Ineligible to benefit from the free higher education law are students who have obtained a bachelor’s degree; failed the admission and retention requirements; failed to complete their degree within a year after the period prescribed in their program; and voluntarily opted out of the provision.

PSA survey: One in four women experienced spousal violence

By Charmaine A. Tadalan

ONE IN FOUR WOMEN who have ever been married has experienced physical, sexual, or emotional violence by their husbands and partners, according to the preliminary findings of the country’s latest demographic survey.

The results of the 2017 National Demographic and Health Survey (NDHS) by the Philippine Statistics Authority (PSA) showed 26.4% of women aged 15-49 have experienced spousal violence. Ever-married women, according to the PSA, are women who are currently married or formerly married women (separated, divorced, or widowed) who are living with their husbands or partners.

In particular, 20.4% of the respondents had suffered from emotional violence; 13.5% from physical violence; and 5.2% from sexual violence by their current or most recent husbands or partners. Spousal violence, according to the PSA, is defined as violence “perpetrated by partners in a marital union.”

“Since spousal or intimate partner violence is the most common form of violence for women aged 15-49, the 2017 NDHS collected detailed information on the different types of violence experienced,” the PSA report read.

In the survey, currently married women were asked about violence inflicted by their current partners while those who are formerly married were asked about violence inflicted by their most recent partners.

By marital status, 53.4% of women who are divorced, separated, or widowed have reported violence from their most recent partners as against the 24.4% of women who are currently married or those living together with their partners. The PSA also noted that the percentage of women who have experienced violence in physical, sexual, and/or emotional form from their partners “declines slightly” with the women’s age.

For instance, women aged 15-24 recorded the highest percentage of spousal violence at 28.9% while those aged 40-49 have a reported figure of 25.7%.

An inverse relationship could also be drawn between wealth and spousal violence with those who have reported such cases to be as high in the lowest (31.6%) and second quintiles (31.8%) to as low as those in the highest quintile (18.3%).

Disaggregated by region, the PSA reported that “[w]omen’s experience with violence by a partner varies widely.”

“[O]nly 7% of ever-married women in the Autonomous Region in Muslim Mindanao (ARMM) report experiencing physical, sexual, or emotional violence by their last partner compared with 52% of ever-married women in Caraga,” the PSA said.

Nevertheless, the PSA noted that “[a]ll forms of violence generally decline with increasing household wealth.”

Other regions reporting high cases of spousal violence were the Zamboanga Peninsula and Bicol Region tied at 43.4%, followed by Eastern Visayas (43.2%), Central Visayas (38%), Ilocos Region (33.1%), and Western Visayas (30.6%).

Asked for comments on the figures, Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, pointed to the low figures in ARMM which “may have to do with the quality of the data and how reliable was the collection.”

Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, was of the same opinion: “I think the percentages [between Caraga and ARMM) are too far from each other, raising questions about the accuracy of the data in general.”

“There may be limitations regarding how the data is collected. If it is based on reported cases alone, then the results of the survey might be skewed downwards in some areas where women are not as vocal.” Furthermore, Mr. Dumalagan noted that the drop in violence among wealthier households is expected. “[M]oney is usually one of the major causes of quarrels between couples. Hence, an increase in wealth would mean less reason for marital disputes,” he said.

The NDHS 2017 was conducted from Aug. 14 to Oct. 27 last year and surveyed 31,000 households and 25,000 women aged 15-49. It is the eleventh of the series of the country’s demographic surveys that were undertaken since 1968.

DICT says use of TransCo fiber sets ‘precedent’ for 3rd player

COMPANIES vying to be the “third player” can consider using National Transmission Corp.’s (TransCo) fiber network to reduce costs in building network infrastructure, the acting head of the Department of Information and Communications Technology (DICT) said.

DICT Acting Secretary Eliseo M. Rio, Jr. said that the signing of a memorandum of understanding (MoU) between the Philippine Telegraph and Telephone Corp. (PT&T) with the state-owned TransCo for the use of its so-called “dark” or unused fiber sets a precedent which interested parties can follow.

“There’s already a precedent. The companies can talk with TransCo, as that can be cheaper rather than building infrastructure,” Mr. Rio said in a phone interview.

PT&T last week announced that it entered into an agreement with the National Transmission Corp. that would allow the telco to use the government’s national fiber optic backbone facility.

Under the MoU, PT&T and TransCo will create a technical working group (TWG) for the preparation for the eventual use of dark fiber in the country’s network of transmission lines. Dark fiber is defined as unused network infrastructure composed of cabling, switches and repeaters.

PT&T said that utilizing the dark fiber in the grid will allow them to have a true national backbone “that can rival” that of incumbents PLDT, Inc. and Globe Telecom, Inc.

Mr. Rio however clarified that the DICT will not be facilitating any talks between third player candidates and TransCo.

“We leave it up to them, whatever commercial agreement they have. It’s outside our functions,” he said.

He added that agreements are possible as so far, privately held National Grid Corp. of the Philippines (NGCP) has not expressed any opposition to the agreement between PT&T and TransCo.

TransCo and NGCP disagree over what TransCo says is the NGCP’s allowing of third parties to use government property without authority. This includes NGCP’s authorization of PLDT, Inc.’s and Globe Telecom, Inc.’s access to the power grid operator facilities.

The DICT is moving towards requiring potential entrants to offer wide coverage and fast Internet connections, rather than its previous preference for candidates with the highest committed financial investment and a net worth of P10 billion. It is set to release another draft of selection criteria.

With a move to more technical requirements, companies, particularly local telcos, which have existing infrastructure may have an advantage.

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

WTO notes limited opening of agri, telecom sectors

THE World Trade Organization (WTO) noted that the Philippine government has liberalized some sectors like professional services, but other areas of the economy have “limited” foreign participation in agriculture, telecommunications and public utilities.

According to a report issued by the WTO secretariat and posted on the organization’s website, some issues remain from the WTO’s 2012 review of Philippine trade policy, but the government has also made progress in opening up the economy according to WTO norms.

The WTO is in the process of conducting a fifth review of Philippine trade policy, and the Secretariat report and the Philippine government’s own report will form the starting points for the review in Geneva on March 26 and 28.

The Secretariat report also noted that the Philippines saw a “strong inflow” of foreign direct investment (FDI) “especially after 2013.” FDI inflows in 2011 were at $1.9 billion, compared with $7.9 billion in 2016.

“This resulted largely from the improvement to the economic fundamentals and business environment, as well as from sound macroeconomic policies,” it said.

But it said further success in attracting FDI remains hampered by the lack of “good infrastructure, FDI restrictions and weak competition environment” especially in transport and housing.

The report noted that the “overall competition environment remains weak in many sectors,” even after the Philippines passed a Competition Act in 2015 and established a competition regulator a year later.

As noted in the 2012 review, the Secretariat noted that the Philippines is “neither a signatory nor an observer of the Plurilateral Agreement on Government Procurement,” one of the measures seen restricting foreign participation in local bidding processes.

The Philippines said in its own report the growth of the economy with the significant improvement in several industries especially manufacturing.

But the WTO deems high production costs a “common challenge” to the manufacturing sector due to “inadequate infrastructure.”

The Philippines cited the administration’s infrastructure investment agenda, known as “Build, Build, Build” (BBB), which was launched in 2016 to accelerate infrastructure development and investment to support economic and social growth.

“The BBB identified high-impact projects to be implemented within and outside the National Capital Region such as railways, urban mass transport, airports and seaports, roads and bridges, among others. The programme is set to roll until 2022 envisioning the increase of productive capacity of the economy, create jobs,” it said.

The government noted improvements in other sectors such as services, business process management and the tourism-related subsectors.

“These are markers of the structural transformation that is taking place in the Philippine economy, which is crucial for sustaining growth and generating quality jobs,” it said.

The WTO reviews the trade policies of developing countries like the Philippines every six years. — Janina C. Lim

Senator questions ERC’s market share caps for power generators

A SENATOR with oversight over the power sector said caps set by the Energy Regulatory Commission (ERC) on market share based on installed capacity provide a distorted picture because the actual output of some generators routinely exceeds these limits.

Sen. Sherwin T. Gatchalian, who chairs the chamber’s committee on energy, said there is a “big discrepancy” between market share as mandated by law and actual output.

“If you look at the actual generation, there’s a big discrepancy,” he told reporters.

He said companies with coal-fired plants, even though they may observe the installed-capacity cap, end up with an outsized share of the output because coal-fired technologies tend to service baseload requirements and are not affected by weather or time of day, unlike other technologies.

Mr. Gatchalian said coal-fired power plants account for about 32-33% of installed capacity, but in reality make up about 47-50% based on output.

He said coal plants’ bigger “actual” share was “logical” because the other power sources such as hydroelectric or solar are susceptible to the effects of the weather.

“Coal plants operate continuously; whether it rains or not, they continue to operate,” he said.

The ERC set the 2018 maximum power generation capacity controlled by a single entity and its related groups at 5,466,779.34 kilowatts (kW) or no more than 25% of the installed capacity of the national power grid, as called for by the law that deregulated the energy sector.

The ERC is mandated under Sec. 45 (a) of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) to set the caps annually to prevent a person, company, related group or independent power producer administrator, singly or in combination, to own, operate, or control more than 30% of the installed generating capacity per grid, and 25% of the national grid.

In line with the EPIRA provision, the ERC issued Resolution No. 26, Series of 2005, which set the guidelines for the determination of installed generation capacity for each grid and the national grid, or the high-voltage backbone system of interconnected transmission lines, substations and related facilities.

The installed generating capacity is the sum of the maximum capacity of the generation facilities that are connected to the transmission system or distribution system that forms part of a particular grid.

He indicated that a fix may come in the form of amendments to the implementing rules and regulations of the law.

“But we want to engage ERC, we will see what their logic is,” he said. — Victor V. Saulon

DoF seeking data exchange with major trading partners

THE DEPARTMENT of Finance (DoF) said it hopes to share information with major trading partners in order to get a better indication of the extent of the smuggling problem.

Finance Secretary Carlos G. Dominguez III said that the Bureau of Customs (BoC) should be able to establish a seamless exchange of data on the volume and value of goods exported to the Philippines, which would provide early warning of any discrepancies with Philippine imports data — a red flag for smuggling activity.

“I asked him to go to four countries: China, Japan, South Korea, and the US. These are our four biggest trading partners,” Mr. Dominguez said in a statement yesterday, referring to Customs Commissioner Isidro S. Lapeña.

“You have to be able to pick up the phone and call them (the heads of other customs agencies) personally,” he added.

Mr. Lapeña visited Beijing on Feb. 8-10 to meet officials from the General Administration of China Customs (GACC) led by Deputy Director General Zou Zhiwu.

The GACC is set to sign a cooperation agreement by April during a visit of these Chinese officials to Manila.

Philippine official imports data from China is not in sync with official Chinese exports data, with a 48% gap noted in the first half of 2017.

Mr. Dominguez said the discrepancy is likely due to the gross misdeclaration of goods, and the possible use of “consignees for hire,” by which imported goods are released to traders not found in Customs records.

Philippine Statistics Authority data show that China was the country’s top trading partner in the first half of 2017, with total trade amounting to $11.355 billion. Exports to China stood at $3.308 billion while imports were valued at $8.048 billion.

Japan accounted for total trade of $10.768 billion, with exports to Japan totalling $5.378 billion and imports $5.391 billion.

The US was the third-largest market with total trade of $8.021 billion, with exports of $4.571 billion and imports of $3.450 billion.

Trade with South Korea was valued at $4.889 billion, with exports worth $1.296 billion and imports at $3.593 billion. — Elijah Joseph C. Tubayan

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