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DMCI, RLC: First tower of Sonora Garden Residences 56% sold

By Aubrey Rose A. Inosante, Reporter

DMCI HOMES and Robinsons Land Corp. (RLC) Residences said that Cadence, the inaugural tower of their joint-venture development, Sonora Garden Residences, has sold 56% of its units.

Located in Robinsons Las Piñas Complex along Alabang-Zapote Road, the three-tower project began its turnover of units on July 27.

“The sales take-up is doing very well since we physically opened the project for viewing last March. The sales continue to show an upward trend over the past few months,” DMCI Homes told BusinessWorld via an e-mailed statement on Aug. 8, adding that Cadence is already 56% sold.

DMCI also said that both companies still expect P13 billion in revenue from Sonora Garden Residences and P6 billion for the Cadence building.

“Sonora Garden Residences is still priced competitively at P128,000 per square meter (sq.m.) at the moment vs. other developments in the area that can go as high as P190,000 per sq.m.,” DMCI said.

The firm also said that the upcoming opening in the fourth quarter of some infrastructure near the project will further benefit investors by improving the project’s accessibility.

The 1.45-hectare Sonora Garden Residences offers a mix of one-, two-, and three-bedroom units ranging from 28 to 83.5 sq.m., ideal for young professionals and startup families.

“The spacious units are complemented by expansive open spaces, lush gardens, and a variety of resort-inspired amenities, all of which perfectly blend with the relaxed atmosphere of Las Piñas City,” DMCI said.

The amenities include a kiddie pool, leisure pool, lap pool, and snack bar.

Residents can access the Sky Lounge, designed for family gatherings and community events, with a view of the southern metro’s cityscape.

Sonora Garden Residences also offers proximity to Robinsons Place Las Piñas, with access to various retail and dining options, and to Las Piñas, Zapote, and Dr. Arcadio Santos stations of the Light Rail Transit Line 1 Cavite extension project.

“Once completed, travel time between Quezon City and Cavite will be reduced from an hour and a half to just 25 minutes,” it said.

The project is minutes away from Dr. A. Santos Ave. (formerly Sucat Road) and the Manila–Cavite Expressway, providing convenient travel around the metro and to southern tourist destinations like Tagaytay, the firm said.

“With its strategic location, comprehensive amenities, and thoughtfully designed living spaces, Sonora Garden Residences is poised to redefine urban living in Las Piñas City, promising a serene and convenient lifestyle for its residents,” DMCI said.

T-bill rates inch up before BSP decision

BW FILE PHOTO

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday as it saw strong demand and even as rates mostly inched up as the market awaits the Bangko Sentral ng Pilipinas’ (BSP) policy decision this week.

The Bureau of the Treasury (BTr) raised P20 billion as planned from the T-bills it auctioned off on Monday as total bids reached P52.535 billion, or more than twice the amount on offer. This was higher than the P47.298 billion in tenders recorded at the Aug. 5 T-bill auction.

Broken down, the BTr borrowed P6.5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P15.29 billion. The three-month papers were quoted at an average rate of 5.9%, 7.2 basis points (bps) above the 5.828% recorded last week. Accepted rates ranged from 5.878% to 5.929%.

The government likewise made a full P6.5-billion award of the 182-day securities as bids for the tenor reached P17.26 billion. The average rate for the six-month T-bill stood at 6.093%, up by 3.1 bps from the 6.062% fetched last week, with accepted rates at 6.074% to 6.1%.

Lastly, the Treasury raised the planned P7 billion via the 364-day debt papers as demand totaled P19.985 billion. The average rate of the one-year debt inched down by 1.2 bps to 6.062% from the 6.074% quoted for the tenor last week, with the BTr only accepting bids with this yield.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.8429%, 6.1056%, and 6.1977%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

The government made a full award of the T-bills as the offer was met with strong demand, with investors seeking to lock in returns from longer tenors in anticipation of the start of the BSP’s easing cycle, a trader said in a text message.

“Treasury bill average auction yields were again mostly slightly higher after the faster inflation rate in July and the faster-than-expected GDP (gross domestic product) growth rate that could reduce the possibility of a BSP policy rate cut as early as Aug. 15,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message on Monday.

Analysts are divided on the Monetary Board’s rate decision this week as faster inflation in July caused BSP Governor Eli M. Remolona, Jr. to take a less dovish policy stance.

A BusinessWorld poll showed that nine out of 16 analysts surveyed expect the central bank to deliver a 25-bp rate cut at Thursday’s review.

This would bring the target reverse repurchase rate to 6.25% and would be the first reduction in benchmark borrowing costs since November 2020, or during the height of the coronavirus pandemic.

The BSP has kept its policy rate at an over 17-year high of 6.5% since October 2023 following cumulative increases worth 450 bps.

The Monetary Board is now “a little bit less likely” to cut rates at this week’s policy meeting following the elevated July inflation print, Mr. Remolona said last week, adding that they remain open to off-cycle moves.

Headline inflation picked up to a nine-month high of 4.4% in July from 3.7% in June, the Philippine Statistics Authority (PSA) reported last week. This was slower than the 4.7% print in the same month a year ago and was within the BSP’s 4%-4.8% forecast for the month.

However, this was the fastest print in nine months or since the 4.9% clip in October 2023. It also marked the first time since November that inflation exceeded the central bank’s 2-4% annual target.

Meanwhile, Philippine GDP expanded by an annual 6.3% in the second quarter, the PSA reported separately last week. It was stronger than the revised 5.8% growth in the first quarter and 4.3% in the second quarter of 2023.

For the first semester, economic growth averaged 6%, hitting the low end of the government’s 6%-7% target.

On Tuesday, the BTr will offer P30 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of six years and 11 months.

It wants to raise P220 billion from the domestic market this month, or P80 billion through T-bills and P140 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year. — A.M.C. Sy

Docufiction on Ati community wins top prize at Cinemalaya

CAST and crew of Tumandok with the Cinemalaya Organizing Committee. — SCREENGRAB FROM CINEMALAYA FACEBOOK PAGE

TUMANDOK, a film that follows a 16-year-old chieftain’s daughter as she and her people fight for their ancestral land in Panay, was the top winner at the 20th edition of the Cinemalaya Independent Film Festival, bagging five awards including Best Film and Best Screenplay at the awards night on Aug. 11 at Ayala Malls Manila Bay.

The film, directed by Richard Jeroui Salvadico and Arlie Sweet Sumagaysay, also won the Network for the Promotion of Asian Cinema (NETPAC) Award for Full-length Feature, Best Supporting Actor for Felipe Ganancial, and Best Original Music Score for Paulo Almaden and the Ati People of Kabarangkalan and Nagpana.

“[Tumandok is awarded the Best Film] for its focus on a marginalized sector of Philippine society; for its nearly epic sweep of the life and landscape of a people disempowered by the wealthy and the powerful and victimized by government neglect and corruption; for its highly convincing characters and effective ensemble acting by a cast of non-professional actors; and for its highly effective filmmaking in defense of the rights of indigenous people to their ancestral domain,” the citation read.

“Although this is our first full-length film, we take ourselves out of it because this film is the symbol of bravery and strength of the Ati community who co-authored, co-directed, and made this with us,” Ms. Sumagaysay said in her acceptance speech.

Named for the Ati word for “native” or “inhabitant,” the film is based on real accounts by the Atis in Barotac Viejo, Iloilo.

The next big winner of the night was Kono Basho, which bagged four awards including Best Director for Jaime Pacena II, Best Cinematography for Dan Villegas, and Best Production Design for Eero Yves Francisco.

The family drama follows Ella, played by Gabby Padilla, who reunites with her estranged half-sister in Japan at her father’s funeral, allowing them to heal from their respective traumas.

Ms. Padilla’s portrayal in Kono Basho earned her the Best Actress award “for her sensitive and very moving portrayal of a young woman navigating the cultural complexities of a foreign funeral while coming to terms with personal loss and family grief.”

Ms. Padilla shared her Best Actress award — a first in Cinemalaya history — with Marian Rivera, who was recognized “for her spirited portrayal of a public school teacher risking life and limb to protect the sanctity of the ballot” in the film Balota.

Meanwhile, child actor Enzo Osorio was named Best Actor, for “his sensitive and very convincing portrayal of a boy who refuses to be silent and to be silenced about his abuse” in the film The Hearing, according to the citation.

In the short feature film category, Cross My Heart and Hope to Die took home the Best Short Film prize, its director Sam Manacsa also earning the Best Director award.

The short follows an unpaid office worker who finds comfort in a love interest through his constant phone calls.

“[Cross My Heart and Hope to Die won Best Short Film] for its heartbreaking portrait of overworked and underpaid women workers, and its subtle but mordant critique of their abuse and exploitation,” the citation read.

This year’s Cinemalaya was held at Ayala Malls Manila Bay in Parañaque because of the extensive ongoing renovation of its regular venue, the Cultural Center of the Philippines’ main building. The festival showcased 20 films in competition this year, with 10 full-length features and 10 short feature films. — Brontë H. Lacsamana

 

And the winner is…

FULL-LENGTH FEATURE FILMS
• Best Film: Tumandok by Richard Jeroui Salvadico and Arlie Sweet Sumagaysay

• Best Direction: Jaime Pacena II for Kono Basho

• Best Actress: Gabby Padilla for Kono Basho; Marian Rivera for Balota

• Best Actor: Enzo Osorio for The Hearing

• Best Supporting Actress: Sue Prado for Kantil

• Best Supporting Actor: Felipe Ganancial for Tumandok

• Best Screenplay: Arden Rod Condez and Arlie Sweet Sumagaysay for Tumandok

• Best Cinematography: Dan Villegas for Kono Basho

• Best Production Design: Eero Yves Francisco for Kono Basho

• Best Editing: Dominic Bekaert for An Errand

• Best Original Music Score: Paulo Almaden, The Ati People of Kabarangkalan and Nagpana for Tumandok

• Best Sound: Jedd Dumaguina and Mario Consunji for An Errand

• NETPAC Jury Prize: Tumandok by Richard Jeroui Salvadico and Arlie Sweet Sumagaysay

• Special Jury Prize: Alipato at Muog by JL Burgos

• Audience Choice Award: Gulay Lang, Manong by BC Amparado

SHORT FILMS
• Best Short Film: Cross My Heart and Hope to Die by Sam Manacsa

• Best Direction: Sam Manacsa for Cross My Heart and Hope to Die

• Best Screenplay: Sonny Calvento for Primetime Mother

• NETPAC Jury Prize: Abogbaybay by P.R. Monencillo

• Special Jury Prize: Pamalandong sa Danow by Breech Asher Harani

• Audience Choice Award: Primetime Mother by Sonny Calvento

SMC’s first-half income jumps to P33.5B on strong segment performance

ANG-LED conglomerate San Miguel Corp. (SMC) grew its first-half net income by 66% to P33.5 billion, carried by higher profits across its business segments.

First-half consolidated revenue rose by 15% to P789 billion, led by business units Petron Corp., San Miguel Global Power Holdings Corp. (SMGP), San Miguel Infrastructure, San Miguel Food and Beverage, Inc. (SMFB), and Ginebra San Miguel, Inc. (GSMI), SMC said in an e-mailed statement on Monday.

Operating income increased by 22% to P85.1 billion on higher margins in the power business and lower raw material costs in the food business.

“Our strong first-semester performance shows the resilience of our businesses even in a challenging market. We expect this positive momentum to continue throughout the year and deliver sustained value to all our stakeholders,” SMC Chairman and Chief Executive Officer Ramon S. Ang said.

On the food and beverage business, SMFB grew its first-half net income by 6% to P20 billion. Consolidated sales increased by 4% to P192.9 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 5% to P33.9 billion.

San Miguel Brewery, Inc. saw a 1% increase in consolidated revenue to P75.1 billion on higher sales volume, while GSMI recorded an 18% increase in sales to P30 billion.

San Miguel Foods had a 3% sales increase to P87.8 billion, led by the double-digit revenue growth in prepared and packaged foods along with “resilient” poultry sales.

On the power segment, SMGP grew its first-half operating income by 56% to almost P23 billion, while EBITDA rose by 45% to P30.1 billion on improved margins from contracted volumes and contribution of higher-margin ancillary service from battery energy storage systems.

First-half revenue rose by 17% to P98.9 billion despite a lower average realization price caused by an overall decline in fuel prices.

On the fuel and oil segment, Petron recorded a 2% drop in first-half net income to P6 billion, while operating income rose by 8% to P17.3 billion.

Consolidated revenue increased by 21% to P444.5 billion from P367 billion last year as the company continued to register strong volumes in the Philippines and Malaysia, reaching 69.1 million barrels in the first six months, up 20% from the 57.6 million barrels sold last year.

On the infrastructure business, San Miguel Infrastructure saw a 9% increase in revenue growth to P18.1 billion, led by the 4% growth in combined tollways daily average volumes, which ended at 1.034 million vehicles. Operating income rose by 8% to P9.7 billion, while EBITDA increased by 9% to P14.7 billion.

On the cement business, Eagle Cement Corp., Northern Cement Corp., and Southern Concrete Industries, Inc. saw a 6% decline in first-half consolidated revenue to P19 billion. 

Operating income rose by 31% to about P4 billion on the back of cost reductions and operating efficiencies, while EBITDA increased by 18% to P5.4 billion.

“Lower average selling price in response to the influx of imported traded cement weighed on its topline. However, the decline has been mitigated in part by stronger second-quarter sales volume,” SMC said.

On Monday, SMC shares dropped by 1.40% or P1.40 to P98.50 per share. — Revin Mikhael D. Ochave

On estimates of future claims and the PhilHealth reserve fund: Why giving away P89.9B is not a good idea

BW FILE PHOTO

A part from the issue of whether the Secretary of Finance has the discretion to transfer PhilHealth funds to the General Fund is the question on the impact of the reduction of PhilHealth funds by P89.9 billion on the operations of PhilHealth. The P89.9 billion is part of PhilHealth’s P463.7 billion reserve fund as of the end of 2023.

PhilHealth’s P89.9 billion has been invariably referred to as a government subsidy, excess funds, unspent funds, and a reserve fund. If it is a subsidy, it is not a direct subsidy of the government for PhilHealth, but a subsidy for more than 38 million Filipinos — indigents, senior citizens, people with disabilities, and others. The subsidy represents the aggregate premium payment for the mass enrollment of the informal sector of the population in PhilHealth.
Withdrawing the P89.9 billion from PhilHealth is tantamount to cancelling the premium payment of the informal sector, consequently cancelling their enrollment in PhilHealth. That would be in violation of RA 11223, An Act Instituting Universal Health Care for All Filipinos. The law enrolled every Filipino citizen in PhilHealth.    

It matters to PhilHealth, being an insurance company, if the P89.9 billion is an excess fund, unspent funds, or a reserve fund.  In the context of insurance, a reserve fund is the amount of money set aside by an insurance company to assure the payment of future claims.

The P89.9 billion may be unspent or idle money at a certain point in time, but if the amount is part of PhilHealth’s reserve fund, it will not remain unspent or idle for long. A substantial part of it, or even the entire amount may be spent within the year.

In 2022, the total premium received by PhilHealth was P216.8 billion. The claims paid totaled P129.6 billion or 59.8% of premium received. In 2023, premiums received totaled P224.9 billion and claims paid amounted to P122.4 billion or 54.4% of premium received. The decrease in the ratio of claims paid to premiums received was due to the decrease of COVID-19 related cases in 2023. Payment for COVID-related cases was P35.3 billion in 2022 and P16.6 billion in 2023. We can safely assume it will be significantly lower than P16.6 billion in 2024.

PhilHealth’s income statement for the period ending June 30, 2022 showed operating expenses of P3.3 billion. Extrapolating that to one full year, PhilHealth’s operating expenses for one year should average P6.6 billion. Operating expenses in 2023 should not be markedly different from that amount.

As the law mandates that every Filipino citizen be enrolled in PhilHealth, it has no need for agents and brokers to sell PhilHealth policies. Thus, it does not pay commissions to anybody as private insurance companies do. Also, PhilHealth is by law tax exempt. So, what is left after deducting claims payment and operating expenses from premiums received is the net income.

Based on the data provided by PhilHealth, it would seem PhilHealth’s reserve fund of P463.7 billion is more than enough to cover future claims. However, what is not shown in PhilHealth financial statements is Incurred But Not Reported, commonly known in the insurance business as IBNR.

A PhilHealth enrollee may be hospitalized but instead of availing himself of his PhilHealth benefits, he pays the hospital bill and the doctor’s professional fee to facilitate his discharge and files a claim with PhilHealth at a later date for reimbursement of his medical expenses. That is IBNR. Or he could choose to avail himself of his PhilHealth benefits by asking the hospital to apply his PhilHealth benefits to his bill. In which case it is the hospital that incurs expense for which it will ask PhilHealth at a later date for compensation. That, too, is IBNR.

Since PhilHealth knows neither how many of these expenses have been incurred, nor the amount of each expense, IBNR is necessarily an estimate.

There is also IBNER — Incurred But Not Enough Reported. It refers to development on reported claims. For example, when a claim is first reported, a P10,000 payment might be made, and a P2,000 case reserve might be established, for a total initial reported amount of P12,000. However, subsequent expenses related to the original claim may be incurred, resulting in a total claim of P20,000. The estimated amount of this future development on reported claims is known as IBNER.

Various methods are used to estimate IBNR and IBNER. The chain-ladder method is the most common method used. The primary underlying assumption of the chain-ladder method is that historical claims development patterns are indicative of future claims. However, factors other than historical claims patterns should be considered when estimating future claims.

The impact of COVID-19 must have wreaked havoc on PhilHealth’s 2020 estimates of future claims and reserve fund as historical data prior to 2020 did not include COVID-19 related claims. COVID-19 related claims comprised 27% of total claims in 2022 and 17% in 2023. Estimates of future claims based on historical data are generally increased by about 10% by actuaries to cover contingencies.    

That is why whoever in PhilHealth estimates future claims and the corresponding reserve to fully cover all those claims should be familiar with the developments and patterns in the areas of morbidity broken down into age bracket, geographical location, occupation, and socio-economic class. He should also know the capacity of the country’s healthcare delivery system and advancement in medical science as they also determine the cost of healthcare and its inflation rate.

Using a blend of mathematics, statistics, and financial theory, he estimates the financial risk and the size of the reserve fund. That means whoever does the calculations should have received formal training in mathematics, statistics, probability, economics, finance, and computer science. We asked PhilHealth if whoever does the calculations and projections has such an academic background. We did not get an answer.

So, we do not know if future claims and the reserve set aside to cover those projected claims were calculated competently.  Therefore, we cannot say that the reduction of PhilHealth’s reserve fund by P89.9 billion has not compromised the integrity of the reserve fund.

 

Oscar P. Lagman, Jr. was formerly the chief operating officer of a health insurance company and consultant to others.

Metro Manila office rental prices decline despite improved vacancy rate

PHILIPPINES.CBRE.COM

VACANCY RATE in Metro Manila’s office market improved in the second quarter of 2024, yet rental prices for office spaces have continued to decline since 2023, according to real estate services and investment firm CBRE Philippines.

“This may look good on the upper hand, but zooming into the prices of each sub-district, we have been noting a trend of declines or reductions in rates as well,” CBRE Philippines Research Head Samantha Laureola said during a briefing last week. 

Metro Manila’s fair market rents (FMR), which represent the typical rental prices for office spaces, have decreased by 2% to 19% across various sub-districts from the first quarter of 2023 to the present. 

The Bay Area’s FMR fell 19% from the first quarter of 2023, followed by a 13% decrease in Makati A&B premium office buildings. Alabang also went down 10%, North Bonifacio declined 3%, and Makati Prime went down 2%.

Meanwhile, Quezon City rose 9% and McKinley inched up by 6%. Ortigas also increased by 2%, and Bonifacio Global City (BGC) rose by 0.4%.

“So lower rates, potentially more attractive lease structures for clients, higher demand, and lower vacancy overall,” she added.

The vacancy rate went down to 17.8% in the second quarter of 2024 from 19.7% in the same period last year.

CBRE also revised its initial forecasted vacancy rate from 18.8% to 22.6% by the end of the year due to the Philippine Offshore Gaming Operators (POGO) ban. 

Makati Prime had the highest FMR in the second quarter of this year at P1,289.01, followed by BGC at P1,170.88, while North Bonifacio and the Bay Area logged P1,076.88 and P702.64, respectively. 

Makati A&B recorded an FMR of P789.40, McKinley at P834.06, Ortigas at P764.39, Alabang at P671.40, and Quezon City at P735.35.

“Lower FMR for most of the major Metro Manila markets as developers continue to provide aggressive rates to spur transactions,” the firm said.

On a quarter-on-quarter basis, CBRE Philippines Director of Advisory and Transactions Services Garri Amiel Guarnes said the Bay Area had the highest reduction of 7.3% in FMR in the second quarter of 2024.

“That’s a lot to do with the transactions, government take-ups within the Bay Area, and the high number of square meters being taken by the government offices,” he said.

The office market logged 257,200 square meters (sq.m.) of office leases for the second quarter, driven by government take-ups that accounted for a 26% share. 

Some of the biggest government leases during the first half went to Filinvest, including the National Bureau of Investigation in Cyberzone Bay City Towers and the Department of Trade and Industry in Filinvest Buendia. 

Despite CBRE’s expectation that the vacancy rate by year-end will hit 43% due to the POGO ban, the Bay Area was the top district for the second quarter of 2024 with 83,400 sq.m. of leases in the country.

SERVICED OFFICE VACANCY RATE HIT 20.6%
Meanwhile, the vacancy rate of Metro Manila’s flexible market — comprising coworking spaces, serviced offices, and short-term leases — surged 20.6% to 7,000 vacant seats in the second quarter due to the opening of new sites across the area, CBRE Philippines said.

This figure was 6.75% lower than the 14% vacancy rate in the same period last year, and lower than the 17% recorded last quarter.

CBRE Senior Research Analyst Angela Joyce Sumalinog said the increase in vacancy was driven by the opening of new sites in Metro Manila, where Fort Bonifacio recorded the lowest vacancy rate at 11%.

North Bonifacio’s vacancy rate fell to 10% in the second quarter, while BGC also decreased to 10%. McKinley’s vacancy rate rose to 18%.

The vacancy rate in Makati increased to 19%, Ortigas doubled to 24%, and Quezon City reached 22%. Meanwhile, the Bay Area and Alabang saw increases to 25% and 52%, respectively.

“Another factor that we’re seeing that can affect the flex market would be comparing serviced offices versus vacated spaces with quality fit-outs. The former would often have a premium on rates of 50% to 80% over three to five years,” Ms. Sumalinog said.

CBRE reported that Metro Manila rates range from P5,000 to P36,000 per seat per month. — Aubrey Rose A. Inosante

RCBC posts lower net profit in 2nd quarter

PHILSTAR FILE PHOTO

RIZAL COMMERCIAL Banking Corp.’s (RCBC) net income declined by 12.97% year on year in the second quarter due to increased tax expenses, it reported on Monday.

The bank’s attributable net profit stood at P2.25 billion last quarter, down from P2.58 billion in the same period last year, its financial statement disclosed to the stock exchange showed.

This brought RCBC’s net income for the first semester to P4.45 billion, 28.47% lower than the P6.22 billion booked last year.

This translated to a return on average assets of 0.7% at end-June, down from 1.1% at end-2023, and a return on average equity of 5.7% versus 9.5% as of December 2023.

Net interest income in the second quarter increased by 26.04% year on year to P10.19 billion from P8.08 billion, driven by higher interest earnings from both loans and investment securities, which more than offset the increase in interest expenses.

Net interest margin was at 3.7%, up from 3.4% at end-2023.

Other operating income likewise grew by 8.66% to P2.59 billion in the second quarter from P2.38 billion a year prior, mainly on the back of higher earnings from fees and commissions and gains on sold assets.

Meanwhile, operating expenses rose by 6.85% to P7.61 billion from P7.13 billion.

This resulted in a cost-to-income ratio of 61.5%.

RCBC’s profit before tax stood at P3.23 billion in the second quarter, higher than P1.38 billion a year prior.

However, the bank recorded a tax expense of P979 million this year, a reversal of the deferred tax expense worth P1.2 billion booked in the same quarter last year.

Its loans and receivables rose by 2.66% to P667.22 billion at end-June from P649.93 billion at end-2023.

RCBC said its consumer loan portfolio grew by 38% in the first semester, driven by the 53% expansion of its credit card loans, with billings rising by 42%. Auto and home loans likewise increased by 28%.

Personal and salary loans also tripled year on year, it added.

Consumer loans made up 36% of the bank’s loan portfolio as of June, while the remainder went to its corporate and small and medium enterprise clients.

Despite an increase in consumer loans, RCBC’s gross nonperforming loan ratio improved by 14 basis points to 3.77% as of June.

On the funding side, total deposits grew by 0.34% to P959.92 billion at end-June from P957.71 billion in 2023.

This resulted in a loan-to-deposit ratio of 68.2%.

RCBC’s total resources grew by 1.82% to P1.26 trillion at end-June from P1.24 trillion at end-2023.

Total equity stood at P152.1 billion.

Its common equity Tier 1 ratio was at 13.8%, while its risk-based capital adequacy ratio stood at 16.4%.

RCBC President and Chief Executive Officer Eugene S. Acevado said the bank will continue to make innovative use of data and digital technology.

“By combining on-the-ground encounters with data insights, we create a digital customer experience that fuels the remarkable growth we are witnessing,” Mr. Acevedo said.

As of June 30, RCBC had 458 branches, 1,486 automated teller machines, and 6,836 ATMGo terminals nationwide.

Its shares declined by 15 centavos or 0.67% to end at P22.10 apiece on Monday. — AMCS

7th ASEAN film festival offers a glimpse of Southeast Asian folklore

FOLLOWING its first on-site edition last year since the pandemic, the National Commission for Culture and the Arts’ (NCCA) Tingin Film Festival returns for a 7th year.

Presenting a selection of films from countries in the Association of Southeast Asian Nations (ASEAN), it takes place on Aug. 17 and 18 at the Red Carpet Cinema of Shangri-La Plaza Mall in Mandaluyong City. The theme is “Enchantments of a Fragile World,” on the topic of Southeast Asian folklore.

“It’s a theme that challenges us to ask what folklore means to us in and how it can help us understand the people of this region in this day and age, as separate peoples and as a people with historical links,” said Patrick Campos, festival programmer, at a press conference on Aug. 8.

The Tingin Film Festival will have “a mix of established and emergent filmmakers from centers as well as peripheries of our respective cultures,” he added.

It will open with The Long Walk, by Laos’ first female filmmaker Mattie Do. It follows an old hermit who discovers that the ghost of a road accident victim can transport him back in time to the moment of his mother’s painful death.

“Filmmakers have time and again drawn from the rich wellspring of folklore, to revisit old paradigms, to use it as a foil to new but harmful lifeways, or to serve as anchor for a society battered by scientism,” said Maya Quirino, festival director, on the relevance of folklore in films today.

In Dreaming and Dying by Singaporean director Nelson Yeo, three middle-aged friends reunite for the first time in years and find something emerging from their reunion. “Their vacation takes a surprising turn when the undercurrent of their past lives threatens to resurface,” the summary of the film reads. The movie won the Pardo d’oro for Best Feature Film (Cineasti del Presente Competition) at the Locarno Film Festival.

From Myanmar comes Once Upon a Time There Was a Mom by Lin Htet Aung. The film follows a man who transforms back into his teenage self, the same age as his son, after his wife dies. The film took the Best Screenplay award at the Singapore International Film Festival.

Memoryland by Vietnamese filmmaker Kim Quy Bui revolves around three people who grieve after losing loved ones and deal with it through the rituals that accompany the end of life.

Malaysian film Snow in Midsummer by Chong Keat Aun is about an opera troupe amid the country’s deadly racial riots in 1969, and the woman who confronts those events 50 years later.

Short films that round out the selections are Boren Chhith’s Golden Dragon from Cambodia, Uruphong Raksasad’s Worship from Thailand, Natasha Tontey’s Of Other Tomorrows Never Known from Indonesia, and Hazrul Aizan’s Part of Me from Brunei.

The festival will close with the Philippine theatrical premiere of In My Mother’s Skin, by director Kenneth Dagatan. Set in the Philippines during World War II, the movie follows a young girl who finds that her duty to protect her dying mother is complicated by her misplaced trust in a beguiling, flesh-eating fairy. There will be a discussion after the screening with the cast and crew of the film, which first premiered at the Sundance Film Festival in the USA.

“NCCA’s Culture and Diplomacy Program remains committed to familiarizing Filipino moviegoers with the multifaceted and rich cultures and cinemas of Southeast Asia. Tingin is part of our mission to develop the cultural palate of film students and young moviegoers by exposing them to excellent films from the region,” said Mariel Nini, head of the Sentro Rizal International Cultural Affairs Office of the NCCA.

Aside from the film screenings, the festival will also hold a contest for the Best Theme Attire — the theme being folklore — on opening night, where the winner will walk away with a cash prize. The contest mechanics are on Tingin’s social media pages.

The Tingin ASEAN Film Festival will run from Aug. 17 to 18 at the Shangri-La Plaza Mall Red Carpet Cinema. Admission is free. For the complete screening schedule follow Tingin ASEAN Film Festival on Facebook. — Brontë H. Lacsamana

SEC approves P5-B Vista Land preferred share offer

THE Securities and Exchange Commission (SEC) has approved the P5-billion preferred share offering of Villar-led property developer Vista Land & Lifescapes, Inc.

The offer, approved by the SEC on Aug. 8, consists of up to 30 million Series 2 preferred shares and an oversubscription option of up to 20 million, the SEC said in an e-mailed statement on Monday.

The preferred shares, which are perpetual, cumulative, nonparticipating, nonvoting, redeemable, and non-convertible, will be priced at P100 per share.

Vista Land is expecting to generate P4.94 billion worth of net proceeds from the issuance if the oversubscription option is fully exercised.

The company said it will use the proceeds to refinance existing debt and for general corporate purposes.

Based on the company’s latest timetable, the offer period for the preferred shares will be from Aug. 20 to Sept. 4, with listing at the main board of the Philippine Stock Exchange set on Sept. 13.

Vista Land hired BDO Capital & Investment Corp., Chinabank Capital Corp., and SB Capital Investment Corp. as joint issue managers, joint lead underwriters, and joint book runners for the offer.

On Monday, Vista Land shares dropped by 1.38% or two centavos to P1.43 apiece. — Revin Mikhael D. Ochave

Fast growth towards better credit ratings

If there is an “economic Olympics” among the world’s top 50 largest economies this month, the Philippines should get two medals — a gold medal for its unemployment rate in June 2024, and a silver medal in GDP growth in second quarter (Q2) 2024.

In my column last week (“All-time low unemployment, revenue enhancement against illicit trade,” Aug. 8), I noted that the Philippines not only had among the lowest unemployment rates around — 3.1% vs Spain’s 11.3%, Sweden’s 9.4%, India’s 9.2%, and Italy’s 7% — but it also had the biggest drop in unemployment, from 6% in June 2022 to only 3.1% in June 2024. That is equivalent to a gold medal achievement.

Last week the Philippine Statistics Authority (PSA) also released the Q2 2024 GDP performance. It was 6.3%, much higher than most projections by the multilaterals and private economic analysts. It was a silver medal achievement next to Vietnam, which grew 6.9%. In contrast, many European countries have had zero growth and some even contracted like Germany and Ireland (see Table 1).

Other big European and North American countries have not reported their Q2 2024 GDP results yet, but their recent growth numbers — Q2 2023 and Q1 2024 — were already mediocre: the UK 0.2% and 0.2%, Poland -0.6% and 2%, Netherlands -0.1% and -0.7%, Switzerland 0.4% and 0.6%,  the US 2.4% and 2.9%, Canada 1.3% and 0.5%, and Japan 2.3% and -0.2%.

The Philippines’ high growth in the last quarter was mainly due to base effect, with investments or capital formation growing by 11.5% (it had low growth last year), and government consumption growing at 10.7% (it contracted last year). Household consumption, which constitutes about 75% of GDP, has been stung by high inflation and grew only 4.6%.

By industrial origin, the main sources of growth were Industry, led by the Construction subsector, and Services led by the Finance and Insurance subsectors with 8.2% growth (see Table 2).

I must congratulate the economic team.

I quote three cabinet members here from a press release:

Finance Secretary Ralph G. Recto brightly noted that “We are happy with the back-to-back good news on employment and GDP growth. Our impressive growth performance clearly demonstrates that infrastructure is our way forward. We need to build more, build better, and build faster so that Filipinos can reap the benefits of these high-impact projects at the soonest possible time.”

The day before, he had announced a positive achievement: “the Marcos, Jr. administration’s ultimate goal of reducing the poverty rate to a single-digit or 9% by 2028, as the Philippines posted its highest-ever employment and historic low unemployment rates in June 2024.”

Economic Planning Secretary Arsenio M. Balisacan looked optimistic: “Amid evolving risks and challenges, the Philippines’ economic outlook remains promising in the near and medium term… we move closer to our vision of a strongly rooted, comfortable, and secure life for every Filipino.”

Budget Secretary Amenah F. Pangandaman was equally focused and optimistic: “It feels like we won another gold medal for the Philippines… we are focused on job-creating growth and poverty-reducing growth, and we are inspired to work even harder towards our inclusive economic transformation and sustainable growth.”

These twin outstanding economic performance results should help the Philippines earn higher credit ratings on the quest for an “A.” I checked the evolution of the country’s ratings from three big ratings agencies over the past decade, and ours is consistently moving up (see Table 3).

S&P’s “BBB” means the recipient is Investment Grade with adequate capacity to meet financial commitments, but more subject to adverse economic conditions. Next is “A,” Investment Grade with strong capacity to meet financial commitments, but somewhat susceptible to economic conditions and changes in circumstances.

Moody’s “Baa” is medium-grade and subject to moderate credit risks. Next comes “A” which is upper-medium-grade and subject to low credit risk.

Fitch’s “BBB” is good credit quality, default risk is low. The next step is “A” meaning high credit quality, default risk is low, strong capacity to pay financial commitments.

An Inquirer story last Thursday bannered the possibility of an “A” rating for the country as early as 2025, quoting Ms. Pangandaman.

Yes, I believe this is possible and the secretary is realistic in making this projection. The Philippines deserves higher credibility to meet its financial obligations and should get lower interest rates, and a lower interest payment burden so that more resources can be devoted to productivity enhancing infrastructure programs.

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

vOffice PHL opens largest branch in Mandaluyong

VOFFICE.COM.PH

MALAYSIAN virtual office provider vOffice has opened its largest branch in the Philippines, located at Sun Plaza in Mandaluyong, while targeting to grow at least 200 new businesses every month.

“We provide them with entire supporting business services to help them grow their business not just in the Philippines… we are targeting to grow at least 200 new businesses every month right now,” Albert Goh, vOffice Chief Executive Officer and founder, told BusinessWorld on July 30.

vOffice offers virtual offices, serviced offices, and company incorporation services in the country for both locals and foreigners.

He said vOffice has serviced around 48,000 businesses in its 77 locations across Southeast Asia. It has eight branches in the Philippines, including some in Bonifacio Global City, Makati, Quezon City, Laguna, and Malate.

Its latest branch at Sun Plaza Building spans 800 square meters and provides 12 serviced offices, which range from 4.25 square meters to 21 square meters.

Meanwhile, the premium offices offer Wi-Fi, 24/7 access, a dedicated landline, 15 to 30 hours of meeting room use per month, free co-working, and are pet-friendly.

The 21-square-meter and 11-square-meter premium serviced offices cost P30,000 and P52,000, respectively.

Among the amenities are an entrance area, outdoor co-working area, podcast and production room, serviced office, conference room, and co-working space.

“This location, in particular, involves close collaboration with the local government unit and government offices through our partner from Sun Plaza,” Mr. Goh said. This includes assistance with inquiries such as taxes and setting up companies.

The company offers to streamline the process of setting up a company within three weeks, which he claimed is the “fastest” in the country.

“It’s really hard to register. A lot of the problems that we face as Filipino entrepreneurs are the lack of information found on the internet and the misinformation circulating,” vOffice Philippines, Inc. General Manager Aldrin Enrile told reporters.

Mr. Enrile also said the Securities and Exchange Commission allows entrepreneurs to use their house address, as it doesn’t check. Still, their application would be rejected when they proceed to the Bureau of Internal Revenue.

Regarding expansion efforts, vOffice has allocated $1 million to open five more locations in the next eight months.

“The first phase will be all in Luzon, and will still be within Metro Manila,” Mr. Goh said, without disclosing the specific locations.

He added that a branch will open in Business Bay, Dubai, in September.

“This is our first time partnering with a Malaysian company overseas. It looks like a very promising horizon for us in the near future,” said John Isaac V. Angping, son of the late Jerry C. Angping, owner of Sun Plaza Development Corp. — Aubrey Rose A. Inosante

Sun Life partners with Go Negosyo to boost MSMEs

SUN LIFE of Canada (Philippines), Inc. has partnered with Go Negosyo to create financial solutions for micro, small, and medium enterprises (MSMEs), it said on Monday.

“This collaboration focuses on guiding MSMEs towards a brighter future, creating an ecosystem that nurtures entrepreneurship, fosters financial inclusion, and builds a stronger Filipino business landscape. Sun Life and Go Negosyo will work together to develop financial solutions tailored to the unique needs of MSMEs and provide them with access to capital, insurance protection, and financial planning expertise,” Sun Life Philippines said in a statement.

The life insurer will also participate in Go Negosyo’s 3M or Mentorship, Money, and Markets on Wheels initiative, which is a mobile entrepreneurship caravan that brings business support services directly to MSMEs nationwide. Its financial advisors will be present at these events for consultations with entrepreneurs.

Sun Life Philippines and Go Negosyo recently signed a memorandum of agreement to formalize the tie-up.

“Securing the future of our negosyantes (entrepreneurs) is an important focus for us at Sun Life because we believe that they are the backbone of our economy,” Sun Life Philippines Chief Client Experience and Marketing Officer Carla Gonzalez-Chong said. “This is why our partnership with Go Negosyo is a natural fit. We share a common vision of a nation where entrepreneurship thrives, and where every Filipino is given the opportunity to reach their full potential.”

“Go Negosyo is grateful to Sun Life Philippines for doing its part in helping our MSMEs,” Go Negosyo Founder Joey A. Concepcion III said. “Access to capital, as well as financial literacy, is an important pillar of successful entrepreneurship, and with this collaboration, we will be able to better address a learning gap that is especially common among aspiring entrepreneurs.”

Sun Life Philippines’ premium income stood at P55.79 billion last year, while its net income was at P8.8 billion, data from the Insurance Commission showed. It was the top-performing life insurer in the country in terms of both premium income and net profit in 2023. — AMCS

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