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AGI banking on tourism and leisure sector for growth

ALLIANCE Global Group, Inc. (AGI) said it is leveraging its tourism and leisure segment to drive growth in the medium to long term, supported by its highest capital expenditure (capex) budget since 2016.

“We believe that each of our segments has its own long-term growth story. But we are most excited about the growth opportunities presented by our tourism and leisure segment,” AGI President and Chief Executive Officer Kevin Andrew L. Tan said during the AGI virtual annual stockholders’ meeting on Thursday.

“This is because we still see enormous potential in the country’s hospitality sector, which is recovering from its pre-pandemic performance. The sector is currently recovering, and we see a lot of potential to reach or even surpass pre-pandemic levels,” he added.

AGI has a presence in the tourism and leisure business through its units, Megaworld Corp. and Travellers International Hotel Group, Inc.

The holding company earmarked P75 billion as its capex budget this year, up by 19% from the P63 billion capex spending last year and an eight-year high since the P77 billion worth of capital investments in 2016. 

About P55 billion of the capex will be allocated to Megaworld, which plans to expand its real estate portfolio to 35 townships this year with the launch of new developments, mostly outside Metro Manila. It will also develop hotel projects in Iloilo and Boracay.

Some P10 billion will be used by Travellers International to fund ongoing expansion projects within its Newport World Resorts complex in Pasay City. The company is refurbishing the Newport Mansion, which will feature all-suite rooms, garden villas, and bay suites.

“The AGI Group continues to expand its operations in the hospitality sector with a plan to bring its total hotel room keys to around 12,000 in the next few years, up from its 2023 capacity of around 7,500 keys,” Mr. Tan said.

The company will also allocate part of its capital for the development of the commercial area at Westside City in Parañaque City, including the construction of the Grand Opera House, theaters, and cinemas.

Liquor company Emperador, Inc. will get a P6.5-billion capex budget to support expansion plans for whisky operations under Whyte & Mackay, while Golden Arches Development Corp. will receive P4 billion in capex to fund the continued growth of McDonald’s Philippines’ store network.

“AGI remains steadfast and dedicated to driving growth across all its business segments, mindful of its goal to elevate global consumer preferences through aspirational product offerings,” Mr. Tan said.

For the first quarter, AGI saw a 10% drop in its attributable net income to P4.2 billion due to higher input costs, marketing expenses, interest charges, and unrealized foreign exchange losses. First quarter revenue rose by 1% to P50.6 billion.

AGI shares rose by 0.11%, or one centavo, finishing at P8.97 per share on Thursday. — Revin Mikhael D. Ochave

MSMEs see cost pressures piling on after wage increase

By Chloe Mari A. Hufana

MICRO, SMALL and medium enterprises (MSMEs) in the National Capital Region (NCR) said they have had to rethink their business plans to deal with the additional cost pressures from the new minimum wage that took effect on July 17.

Ian A. Balmes, co-owner of 3A5 Bakery in Quezon City, said management is considering raising prices to keep the bakery going.

“We might be forced to raise the prices of our breads. We’re still considering, though, how much the increase will be,” he told BusinessWorld via phone.

“The wage hike will reduce profit, but at the same time, it’s good because it will increase our workers’ wage. It might not be a win-win for a business, but what’s more important is to survive,” he added.

“The cost of ingredients and equipment maintenance has increased, so an increase in wages would mean spending more money and earning less profit,” he said.

The bakery, which has been operating for 25 years, employs five.

According to the new wage order for Metro Manila, firms must pay their employees a daily wage of P608, up from P573. This rate covers companies employing less than 15 workers.

Workers in manufacturing establishments with regular staff of less than 10 will also receive a minimum wage of P608.

The minimum wage for nonagricultural workers in the region will rise to P645 from P610.

According to the Department of Trade and Industry (DTI), 99.59% of businesses in the Philippines were MSMEs in 2022.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan has said between 40,000 and 140,000 workers will be affected if small businesses end up shutting down or reducing their staffing. He called this the number “negligible.”

The wage order will directly impact 988,243 minimum wage earners in the NCR, the Labor department said on July 1 when the regional wage board released its order.

About 1.7 million full-time wage and salaried workers that earn above minimum wage “may also indirectly benefit as a result of upward adjustments at the enterprise level arising from the correction of wage distortions,” it added.

Ariestelo A. Asilo, owner of Batangas-based coffee business Varacco, which operates a branch in Quezon City, said the wage hike will “dampen margins because it means higher operating costs.”

“We are already feeling the effects because some of our ingredients have increased in price, which means an increase in our food costs. We are seeing an inverse relationship between the societal and economic benefits for our workforce and our business,” he told BusinessWorld via Viber.

“We are making a significant adjustment by increasing our product offerings, managing work productivity, and increasing our workload to offset additional costs,” he added.

Mr. Asilo employs five workers in his NCR branch.

Joanna Marie F. Gutierrez, founder and owner of Istorya, a 10-year-old shop carrying handmade gifts in the NCR, told BusinessWorld by phone that costs continue to pile up. She added that she is currently paying above minimum wage.

“I understand that the government wants to help the employees, but also, I hope that they think of helping the business owners, too… It’s not because we don’t want to (pay more), but there are also a lot of other things we have to pay for, like electricity, inventory, and taxes,” she said.

She added that post-COVID-19 sales pandemic have yet to return to 2019 levels, saying that inflation has put the business under pressure.

Inflation in June eased to 3.7% due to an easing in electricity and transport costs.

Economists have warned that the wage hike might be inflationary as businesses raise prices after the wage order.

Ms. Gutierrez said she also provides her workers with housing and food allowances, while Mr. Asilo provides food, transportation and study allowances.

Kurt Myer U. Lim owns the toy shop Collectors Quest PH, with a physical store in Greenhills. Like Ms. Gutierrez, he pays his sole worker above minimum wage, with allowances.

He said via Viber that he plans to offset the wage hike by increasing product offerings describing raising prices as contrary to his shop’s reputation for charging low prices.

Ms. Gutierrez said she was alarmed over the proposed legislated wage hike, saying consumers would have to take the hit if Congress passes such a measure.

“We will have to look for ways (to keep up with this wage increase) like cost-cutting measures. Maybe automation, and digitalization to make operations more efficient. As much as possible, the last thing I want is to let go of people,” she said.

“Making sure that the employee is being efficient in her or his work. So, you get the most out of what you pay for them,” she added.

Rowena B. Tua, owner of the leathercraft store YHF Manila told BusinessWorld via Viber message that she is worried a legislated wage hike would further dampen business.

“We tried to absorb the increased price of materials, so product prices remain the same. We are trying as long as we can,” Ms. Tua said via Viber message.

“If the government imposes the (legislated) increase, then we have no choice but slash the number of employees and maximize the work of the remaining people,” she said, saying that before the pandemic she had 20 workers, who have now been reduced to ten, of which two are on minimum wage.

Bills calling for wage hikes of between P100 and P750 per day are pending in both chambers of Congress.

In February, the Senate passed on third and final reading a P100 across-the-board increase for private-sector workers.

The House of Representatives has yet to pass a counterpart bill.

The last legislated wage hike was in 1989 when the daily minimum wage rose to P25 to P89.

Alec Baldwin says he may sue prosecutor, sheriff over Rust trial

ACTOR Alec Baldwin in a scene from Rust. — IMDB

ALEC BALDWIN has informed a New Mexico state prosecutor and sheriff he may sue them after it emerged they withheld evidence from his defense team during their botched attempt to prosecute him over a fatal shooting on the movie set for Rust.

A New Mexico judge dismissed involuntary manslaughter charges against Mr. Baldwin on the third day of trial on Friday, agreeing with his lawyers that prosecutor Kari Morrissey and the sheriff’s office concealed evidence about the source of the live round that killed Rust cinematographer Halyna Hutchins in 2021.

Mr. Baldwin’s lawyers sent letters to Ms. Morrissey and Santa Fe County Sheriff Adan Mendoza dated Monday asking them to preserve documents for future litigation, according to copies of the letters seen by Reuters.

The Santa Fe County Sheriff’s Office confirmed it received the letter from Mr. Baldwin’s legal team but declined further comment on Wednesday. Ms. Morrissey did not immediately respond to a request for comment.

Ms. Hutchins died when Mr. Baldwin pointed a gun at her as they set up a camera shot on a movie set near Santa Fe. The gun fired a live round inadvertently loaded by the movie’s chief weapons handler Hannah Gutierrez. Ms. Gutierrez was convicted of involuntary manslaughter in March.

Ms. Gutierrez, serving an 18-month prison sentence, on Tuesday filed a motion for dismissal of charges due to the failure of prosecutors to disclose evidence on the live rounds, testing of Mr. Baldwin’s gun by firearms expert Lucien Haag, and an interview with the movie’s props supplier Seth Kenney.

Erlinda Johnson resigned as Ms. Morrissey’s assistant prosecuting the case on Friday, shortly before judge Mary Marlowe Sommer dismissed charges against Mr. Baldwin.

Ms. Johnson told Reuters that in the months since she was appointed in April, she provided the defense with unredacted documents after they got in touch with her seeking information when Mr. Morrissey did not provide documents they requested.

“As prosecutors we have obligations to disclose all the evidence,” she said, adding that she believed it was right to dismiss the case. “We not only owe a duty to the people, but to the defendants accused of crimes as well.”

Ms. Johnson said she did not give Mr. Baldwin’s legal team details of the live rounds and only learned of that evidence when the defense did during testimony in court. — Reuters

President Marcos Jr. must start prosecuting treason now

FREEPIK

Outrageous is what it is.

As reported by another publication: “President Marcos Jr. led the mid-year AFP command conference at Camp Aguinaldo on July 4 with Department of National Defense (DND) Secretary Gilberto Teodoro, Jr.,” along with “service unit commanders, ground commanders, and other high-ranking officials.” Reportedly, “following a heated discussion,” an “unnamed AFP general… stood up, rendered a salute, and said: ‘Permission to leave, sir.’ Other generals in the room allegedly followed suit.”

However, there was one thing wrong with the account — it was an absolute lie and complete rubbish.

AFP spokesperson Col. Francel Padilla vociferously debunked the “fake news”: “I was there personally. There is nothing of that sort that happened.” In fact, “it was a very professional exchange of ideas and discussions and there [were] also a lot of updates that [were] given. It all ended on a positive note.” (“Another fake news! No walkout of AFP generals during command conference — official,” Manila Bulletin, July 16, 2024). Her statement was later corroborated by others present at the conference.

Clearly the foregoing acts are seditious.

Even more so when such fake news was followed by open calls for President Marcos Jr. to step down and for the military to disobey or otherwise withdraw support from the Commander-in-Chief.

We must stop the normalization of treason.

The Revised Penal Code (Arts. 134-142) penalizes with up to six years imprisonment any person that incites others to sedition or leads or tends to stir up the people against the lawful authorities.

Batasan Pambansa 39 or the “Act Regulating the Activities and Requiring the Registration of Foreign Agents in the Philippines” penalizes those propagandizing in favor of a foreign hostile country to the detriment or damage of Philippine national security.

Finally, there is Commonwealth Act No. 616, “An Act to Punish Espionage and Other Offenses Against the National Security.” This covers instances of a person sharing confidential information that could negatively affect the security of the country, either by sharing it with foreign countries or unduly sharing it with the public in a manner undermining the government’s declared national security policy.

However, it is the provisions of Section 3 thereof that are now most relevant: Imprisonment of up to 10 years can be imposed upon any person who, with intent to interfere with, impair, or influence the loyalty, morale, or discipline of the military, naval, or air forces of the Philippines: (a) advises, counsels, or urges, or in any manner cause insubordination, disloyalty, mutiny, or refusal of duty by any member of the military, naval, or air forces of the Philippines; or (b) distributes any written or printed matter which advises, counsels, or urges insubordination, disloyalty, mutiny, or refusal of duty by any member of the military, naval, or air forces of the Philippines.

Moved by the utter gravity of the situation, constitutionalist and Dean of the San Beda Graduate School of Law Fr. Ranhilio Aquino posted this on his Facebook page on July 17):

“Elements, agents, servants of the PROC [People’s Republic of China] who have wormed their way into Philippine society should be sniffed out, exposed and either proceeded against judicially, perhaps even administratively, or summarily deported.

“Those who insist that there is no such thing as a Philippine claim in the West Philippine Sea are maintaining a position adverse to the interests of the Republic. There is something more than free speech involved here: the paramount interests of the Republic of the Philippines and the threat of a society subverted by lackeys of a foreign power.

“Under German law as well as the laws of many other countries, it is a crime to deny that the Holocaust ever occurred. There are some propositions that CANNOT be maintained. There is a limit to the capacity for free speech — when free speech is such that it makes the future survival of the Republic perilous, then such speech cannot be countenanced.

“Government must also purge itself of those elements that not-too-subtly use their positions to support the PROC incursions into what international law holds to be ours.”

We completely agree. We urge the Marcos Administration, in the interests of national security, to investigate and prosecute anyone and everybody practically committing treason (in the general sense of the word) in our midst. It must assert its authority in securing the Constitutional goal of securing “the sovereignty of the State and the integrity of the national territory.”

We also urge Congress to criminalize treason even in relative “peacetime.”

We must not allow the perversion of our civil liberties to be used against us by those seeking to undermine not only our constitutional system but our Republic itself.

The views expressed here are his own and not necessarily those of the institutions to which he belongs.

 

Jemy Gatdula is the dean of the Institute of Law of the University of Asia and the Pacific and is a Philippine Judicial Academy lecturer for constitutional philosophy and jurisprudence. He read international law at the University of Cambridge.

https://www.facebook.com/jigatdula/

Twitter  @jemygatdula

What’s at the turn of the corner?

Tulay Sa Pag-unlad, Inc. (TSPI), a Christian microfinance NGO, held a planning session cum retreat at EDSA Shangri-La on June 28-30. Attendees were the board members and their spouses led by Chairman Lamberto Meer, Chairman Emeritus David Bussau, Vice Chair Abraham Pascual, Treasurer Ric Lazatin, Corporate Secretary Cornelio Gizon, Directors Luz Planas, Anna Sobrepeña, Lito Fider, Toto Ma lvar, Carlos Cervantes, Jun Cruz, Ricky Dagelet, and me. Management present were Executive Director Alice Cordero, Sherry Lou Salazar, Lorna Asuncion, Rexchell Querido, Robert Sia, and Leah Garcia

The primary goal of the meetup was to clarify the vision and the “reason for being” of TSPI, what new directions to take, as well as discernment by the board and management about how they can contribute more to the mission. Facilitators were Fr. Edwin Mercado, former chairman of Evangelion Foundation, and Fr. Rico Ayo, Dean of the San Carlos Seminary. It was ably moderated by Director Jun with his wit and humor.

The “Open Space” methodology was used in the sessions, a technique of running meetings where the participants create and manage the agenda themselves. This is ideal so participants can own the issues and come up with solutions. Participants were divided into small groups and worked on the tasks of “Seven Milestones and Significant Moments” of their lives. Personal conversation, small group sharing, and plenary discernment narrative followed. In the personal conversation session, everyone wrote seven of their own milestone or significant events, joyful or sad, in the past five years. What followed was a period of silence to allow participants to listen to their inner voice and pray and reflect on these events. Why did they make you sad of happy then? What do they make you feel now? What did you learn from those experiences and about yourself?   Was God revealing anything to you? Then, in the small group sessions, experiences and self-revelations were shared. Learnings were discussed and summarized. The exercise was culminated by the plenary discernment narrative, which was presented to the whole group.

Participants’ milestone events, when summarized, had many similarities: loss of loved ones, ends to careers, the disruptive impact of COVID-19, business ups and downs, as well as the joys of graduation, recognitions received, wedding celebrations and grandchildren.   The significance of these events translated to deeper appreciation of the importance of family and extended families. Also, despite the trials and even because of them, it was clear: God is good, and He is in control.

From there came discernment and a deeper understanding of the issues of the world. To shift from the personal to the corporate picture, some major world issues were provided as a guide: poverty, social justice, the family, stewardship of environment, climate change, and protection of the underprivileged, among others. The group had quiet time again for reflection and prayers about these issues. The same open space methodology was used until we came up with our own solutions as small groups and then as a whole group. To be relevant and true to the mission and vision of the organization, there is a need to transform, reengineer, reinvent, be resilient and understand the latest developments in the world. One must distinguish between matters of high importance and those that are less relevant. There is a need to direct the limited resources of the organization to actions. TSPI, as a Christian organization, will remain holistic in the delivery of its programs and services, focused on building better communities with more relevant programs of strengthening family core values. The organization must “change or die” with a new business model that is adaptable and relevant to the changing environment. 

At the concluding board meeting on the third day of the planning session, David Bussau asked a loaded question: Can the board see what is at the turn of the corner? Of course, we don’t know. We will only know if we are guided by someone who is already there or by someone up above who can see what is at the turn of the corner. However, turning the corner can also mean “to correct your past actions or get past the most difficult period and begin to improve,” making it a hopeful phrase.

It was a wonderful weekend as these sessions always strengthen the bonding among the board members and with management, David left us with food for thought, and many of us want to do more to serve others.

The views and opinions expressed above are those of the author and do not necessarily represent the views of FINEX.

 

Flor G. Tarriela was former PNB chairman and now serves as board advisor. A former undersecretary of Finance, she is lead independent director of Nickel Asia Corp., director of LTG Inc., FINEX and Philippine Bible Society. She founded Flor’s Garden, an events destination in Antipolo.

Napocor switches on diesel gensets in Tawi-Tawi

PHILSTAR FILE PHOTO

STATE-LED National Power Corp. (Napocor) has energized modular diesel generator sets (gensets) with a combined capacity of 150 kilowatts on an island in Tawi-Tawi.

The diesel generator sets were energized on the island of Taganak, Turtle Islands, along with the switch on of a distribution line system of the Cagayan de Sulu Electric Cooperative, Inc., Napocor said in a statement on Wednesday.

The distribution line project was facilitated by the Ministry of Environment, Natural Resources and Energy – Bangsamoro Autonomous Region in Muslim Mindanao.

“This initiative is anticipated to provide service to 1,000 households, significantly enhancing the island’s energy accessibility,” the company said.

Napocor is mandated to provide electricity to all far-flung areas not connected to the main grid through the Small Power Utilities Group (SPUG). To date, it operates 272 SPUG power plants in 222 areas.

Napocor President Martin Y. Roxas has said that they are targeting to complete the bidding process for the Accelerated Hybridization Program (AHP) soon to allow private companies to put up renewables in off-grid areas.

The AHP is aimed at allowing the private sector to build renewable energy generation plants or facilities to supplement, augment, or replace the existing capacities in the operations of Napocor’s SPUG diesel power plants.

Under the program, Napocor plans to bid out four clusters of off-grid areas, such as Tawi-Tawi, Batanes, Bicol, and El Nido in Palawan. — Sheldeen Joy Talavera

Micromanagement is not bad if…

My boss is always looking over my shoulder to check what I’m doing almost every hour of the day. I’m not thrilled about that management style, and I want to quit as soon as I get the chance. What do you think? — Terrible Spot.

That’s your side of the story. There may be more to it. So, let’s explore your situation. Generally, micromanagement is not exactly bad. It could be that your boss wants you to improve your performance, which is a common reason for micromanaging.

Imagine your boss simply walking away after assigning you a difficult job, where you are likely to make mistakes. Such mistakes can make him eager to categorize you as a non-performing asset, laying the groundwork for your dismissal.

When I was a junior manager more than 40 years ago, I was also micromanaged, but for the right reasons. I felt that my boss was confident in my capacity to perform, with a bit of close supervision. He was busy and did not have time to coach me every hour of the day, but gave me reasonable leeway to make mistakes.

He challenged me to become what I am today, without resorting to compulsion.

He knew I was career-oriented and allowed me to fly high; when I committed occasional mistakes, it strengthened my resolve to do better the next time. I learned a lot from him. I loved his style, and even today, I make sure to pay my respects to him on social media and in-person meetings.

He micromanaged me, but always for the right reasons. That said, let me share with you other reasons why micromanagement is not exactly bad.

EXCEPTIONS
There are certain exceptions that would justify micromanagement. When I say micromanagement is good, I do not mean it as an absolute rule. When you look back at your current situation, I’m sure you will encounter many reasons why managers do it. That is, if you have an objective mind.

If we are going to analyze micromanagement objectively, we need to be thoughtful about the situations where it is relevant and beneficial. Let us count the ways:

One, when it’s done as part of a performance improvement plan (PIP). Thank your boss for giving you another chance rather than automatically giving you a pink slip. It’s temporary. A PIP is good only for four to six months, to allow you to recover from past mistakes and show your true worth. Obviously, anyone in this situation needs regular and constant coaching.

Two, when it’s part of an organized coaching program. With or without a PIP, a kind manager interested in helping you succeed in your career, would be more than happy to give you advice so you can do your job not just properly, but with flying colors. Such a program could be formal or informal, depending on the style of your boss and human resources (HR) policy.

Three, when the boss wants you to follow their standards. You may be comfortable with your own work standards, but how about your boss and your colleagues, who may see it as not being in sync with their own? The exception is when your boss is not very particular about the process but is only interested in the result.

Four, when the boss uses diplomatic, kind, and courteous words. The best manager in the world is the one who is mature and professional in dealing with people from all walks of life. They are the ones who don’t like to gossip or talk against people behind their back. They use only positive words and compliment people for doing well.

Five, when the boss’ objective is to correct a bad process. They could be asking a lot of questions to test the logic of your actions. Rather than judging you when you make a mistake, a good boss could ask open-ended questions like: How would that fit into our corporate vision and department goals? What were your team’s objections, if any?

STANDING UP
Micromanagement could be considered an unfair description of what your boss is doing. If you happen to experience it again, relax, say nothing, and analyze what’s happening. You may not know it, but your boss has the best intentions at heart. No matter how obnoxious your boss may come across as, grin and bear it.

Sitting back might just allow you to discover nice things about your boss. Let that be your objective. It may be difficult, but if you change your attitude, you might find out he was thinking of your development. On the other hand, be alert if you’re the only one being chastised among other similarly situated workers.

 

Bring Rey Elbo’s “Kaizen Blitz” program to your teams under a result-based training scheme. There’s no need to pay, if we fail to discover invisible wastes in your operations. Contact him on Facebook, LinkedIn, X or e-mail elbonomics@gmail.com or via https://reyelbo.com

Actor Johnny Depp turns to tarot to inspire art collection

LONDON, July 18 (Reuters) — Actor Johnny Depp has turned to tarot iconography to inspire an art collection that includes a tribute to his former partner, French actress and singer Vanessa Paradis, and goes on sale on Thursday.

Tarot comprises four pieces: The Lovers, The Empress, The Emperor, and Strength, each nodding to the card imagery.

“I’ve always been tremendously curious about the tarot,” Mr. Depp said in a video. “There’s a great art to the cards themselves, dating back to forever ago and the unseen art of reading the cards.”

The Lovers depicts a well-dressed couple, with the male holding a red rose, while The Empress, featuring a female figure wearing a weathered crown, pays tribute to Ms. Paradis with whom Mr. Depp was together for 14 years before their 2012 split. They have two children, and Mr. Depp said they had remained “very close.”

Strength depicts a gazing elephant and is inscribed with the words: “Why do you want to fight with something that doesn’t want to fight with you?.” It was inspired by a painting Mr. Depp made when Ms. Paradis was pregnant.

Eyeless but with made-up red lips, The Emperor recalls a 17th-century French monarch and was inspired by a work Mr. Depp made while filming Jeanne du Barry, in which he played King Louis XV, in Versailles.

The movie, which premiered at the 2023 Cannes Film Festival, marked Mr. Depp’s first major role since his 2022 high-profile defamation trial against his ex-wife, actress Amber Heard.

Mr. Depp’s Tarot series, limited to 195 editions and priced at $4,500 for an individual framed piece, follows previous collections by the actor. It will be sold by British art retailer Castle Fine Art. — Reuters

How does the Philippines compare with its neighbors in mining attractiveness?

The Philippines placed 72nd out of 86 jurisdictions in the Investment Attractiveness Index released in the 2023 edition of Annual Survey of Mining and Companies by Canadian policy think tank Fraser Institute. The survey assesses how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment. The country garnered an index score of 36.89 out 100. In terms of mineral potential and policy perception rankings, the Philippines placed 41st and 79th, respectively.

How does the Philippines compare with its neighbors in mining attractiveness?

How PSEi member stocks performed — July 18, 2024

Here’s a quick glance at how PSEi stocks fared on Thursday, July 18, 2024.

PSEi rallies to 6,700 level as peso strengthens

BW FILE PHOTO

THE MAIN INDEX rallied on Thursday to end at the 6,700 level for the first time since April amid a strengthening peso and positive economic prospects for the Philippines.

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.25% or 17.30 points to finish at 6,705.01 on Thursday, while the broader all shares index climbed by 0.22% or 8.24 points to end at 3,602.86.

This was the PSEi’s best close since April 29’s 6,769.64 and was the first time it ended at the 6,700 level since the 6,700.49 finish recorded on April 30.

“The local market extended its climb as investors cheered the continuous improvement of the peso against the dollar… The bourse closed above the 6,700 resistance level after testing it in the past few days,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

After hitting 17-month lows last month amid bets on the timing of monetary easing here and in the United States, the peso has since rebounded against the dollar.

On Thursday, the local unit rose for a third straight day, closing at P58.25 versus the greenback, Bankers Association of the Philippines data showed. This was 4.5 centavos stronger than its P58.295 finish on Wednesday and marked the peso’s best close since May 28’s P57.97.

“Also, the Asian Development Bank’s (ADB) projection of the Philippines’ leading the ASEAN (Association of Southeast Asian Nations) region together with Vietnam in terms of economic growth for 2024 and 2025 cheered up investors,” Mr. Plopenio said.

The ADB on Thursday said it expects Philippine gross domestic product (GDP) to grow by 6% this year, at the low end of the government’s 6-7% target. For 2025, the ADB sees Philippine GDP expanding by 6.2%, below the government’s 6.5-7.5% goal.

“Philippine shares continued to rally as regional stocks moved out of the tech-driven firms. Analysts worry that this shift may not protect stocks from potential economic slowdown challenges,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan added in a Viber message.

Sectoral indices were mixed. Financials climbed by 2.55% or 50.90 points to 2,045.25; industrials went up by 0.56% or 51.53 points to 9,222.91; and services rose by 0.26% or 5.30 points to 2,030.09.

Meanwhile, mining and oil fell by 1.79% or 160.97 points to 8,803.27; holding firms went down by 1.13% or 66.39 points to 5,765.43; and property declined by 0.64% or 17.27 points to 2,670.53.

Value turnover rose to P4.61 billion on Thursday with 1.08 billion shares changing hands from the P4.22 billion with 694.38 million stocks traded on Wednesday.

Decliners beat advancers, 89 versus 80, while 59 issues were unchanged.

Net foreign buying dropped to P385.96 million on Thursday from P715.58 million on Wednesday. — RMDO

Peso climbs further as Fed officials boost hopes of September rate cut

PHILSTAR FILE PHOTO

THE PESO extended its rise against the dollar on Thursday as comments from US Federal Reserve officials supported bets of a September rate cut in the world’s largest economy.

The local unit closed at P58.25 per dollar on Thursday, strengthening by 4.5 centavos from its P58.295 finish on Wednesday, Bankers Association of the Philippines data showed.

This was the peso’s best close in more than a month or since its P57.97-a-dollar finish on May 28.

The peso opened Thursday’s session stronger at P58.25 against the dollar. It climbed to as high as P58.17 during the session, while its worst showing was at P58.333 versus the greenback.

Dollars exchanged went down to $1.17 billion on Thursday from $1.24 billion on Wednesday.

The peso was supported by stronger bets of a dovish Fed, a trader said in a phone interview.

“However, trading was cautious ahead of the ECB’s (European Central Bank) decision overnight,” the trader added.

The local unit climbed as Fed officials signalled a rate cut in the coming months, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

Top Federal Reserve officials said on Wednesday the US central bank is “closer” to cutting interest rates given inflation’s improved trajectory and a labor market in better balance, remarks that set the stage for a first reduction in borrowing costs in September, Reuters reported.

Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy, with Mr. Waller highlighting it in a speech at the Kansas City Fed and Mr. Williams voicing it in a Wall Street Journal interview.

Separately, Richmond Fed President Thomas Barkin said he is “very encouraged” that declines in inflation had begun to broaden. “I’d like to see that continue,” he told a business group in Maryland.

The remarks are the latest in a rush this week of commentary from top US central bank officials — including Fed Chair Jerome H. Powell — to note their increased confidence that the disinflationary trend that began last year is continuing, despite a short-lived bump in inflation earlier this year.

Price pressures appear to be easing across the board, the Fed officials said, with goods prices falling, housing cost increases slowing, and more moderate wage growth feeding into a long-awaited easing of price increases in the services sector.

Mr. Williams and Mr. Waller appeared to rule out a rate cut at the Fed’s July 30-31 policy meeting, a view reflected in financial markets that are now pricing the probability of a move at that meeting at less than 5%.

All three policy makers who spoke on Wednesday were “pointing to September” for a start to the policy easing, Karim Basta, chief economist at III Capital Management, wrote.

More Fed policy makers have suggested they are getting increasingly comfortable that the pace of price increases is more firmly on track back down to 2%, after higher-than-expected readings earlier in the year.

Mr. Powell on Monday also said that inflation readings over the second quarter of this year “add somewhat to confidence” on its downward path, suggesting a start of an easing cycle may not be far off.

For Friday, Mr. Ricafort sees the peso ranging from P58.15 to P58.35 per dollar. Meanwhile, the trader said the local unit may inch closer to the P57 level ahead of the release of latest US labor data. — AMCS with Reuters

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