Banks’ real estate sector exposure declines in Q1

July 16, 2024 | 12:02 am

THE EXPOSURE of Philippine banks and trust entities to the property sector went down year on year to 20.31% at end-March, data from the Bangko Sentral ng Pilipinas (BSP) showed.

This was lower than the 21.08% logged in the same period a year earlier but slightly higher than the 20.17% ratio at end-December 2023.

Investments and loans extended by Philippine banks to the real estate sector rose by 3.4% to P3.099 trillion as of March from P2.998 trillion a year earlier.

Real estate loans increased by 5.7% to P2.72 trillion in the period from P2.573 trillion at end-March 2023.

Broken down, residential real estate loans went up by 7.6% year on year to P1.022 trillion from P950.052 billion, while commercial real estate loans edged up by 4.6% to P1.698 trillion from P1.623 trillion.

BSP data showed past due real estate loans stood at P136.793 billion in the period, up by 2.3% from P133.699 billion a year prior.

Broken down, past due residential real estate loans slipped by 1.8% to P93.798 billion from P95.521 billion. On the other hand, past due commercial real estate loans jumped by 12.6% to P42.995 billion from P38.178 billion.

Gross nonperforming real estate loans went up by 5.3% to P110.787 billion as of March from P105.26 billion a year ago.

This brought the gross nonperforming real estate loan ratio to 4.07% at end-March, easing from 4.09% a year earlier.

Meanwhile, real estate investments in debt and equity securities declined by 10.8% year on year to P379.449 billion from P425.463 billion.

Elevated inflation and borrowing costs affected real estate loans and investments in the period, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Higher inflation and higher interest rates could have been headwinds to the real estate industry, as well as still relatively higher vacancy rates since the pandemic, partly due to hybrid and work-from-home arrangements since the pandemic,” he said.

Headline inflation averaged 3.3% in the first quarter.

The Monetary Board raised rates by a cumulative 450 basis points from May 2022 to October 2023 to help bring down elevated inflation. This brought the policy rate to 6.5%, the highest in over 17 years.

Mr. Ricafort also cited “relatively higher property prices in recent years,” which have led to banks being more prudent in lending to the real estate sector.

Separate data from the central bank showed that the Residential Real Estate Price Index rose by an annual 6.1% in the January-March period.

The BSP monitors lenders’ exposure to the real estate industry as part of its mandate to maintain financial stability.

In 2020, the central bank raised the real estate loan limit of banks to 25% of their total loan portfolio from 20% previously to help free up additional liquidity as a relief measure during the coronavirus pandemic. — Luisa Maria Jacinta C. Jocson

Philippines lags in life-work balance study

July 16, 2024 | 12:02 am

The Philippines placed 59^th out of 60 countries in the 2024 Global Life-Work Balance Index by global human resource platform Remote. The country garnered an index score of 27.46 out 100, the lowest among its peers in the East and Southeast Asian region. The index analyzes countries based on their workplace factors that assess their life-work balance for employees. Remote deﬁnes life-work balance as the rewarding of results compared with time spent at desk, facilitating time off for employees to recharge, and supporting parental life-work balance through fair leave policies.

Even Superman cannot fix the colossal mess that is PhilHealth

July 16, 2024 | 12:02 am

On April 24, the Department of Finance (DoF) instructed the Philippine Health Insurance Corp. (PhilHealth) to remit P89.9 billion to the Treasury within 15 calendar days, citing the 2024 budget law and Department Circular 003-2024. The amount was to come from PhilHealth’s reserve fund, which by 2023 had mounted to P463.7 billion.

The DoF justified the directive saying the idle funds can be used to finance unappropriated programs that would be of immediate benefit to the Filipino people. It was also to discipline PhilHealth for not using the available funds.

The president, fund manager, corporate affairs officer, and corporate secretary of PhilHealth were all negligent of their responsibilities for not invoking Republic Act 11223. The law states: “No portion of the reserve fund or income thereof (of PhilHealth) shall accrue to the general fund of the National Government or to any of its agencies or instrumentalities, including government-owned or -controlled corporations.”

The secretary of the Department of Health (DoH) was also remiss in allowing the secretary of another department to exercise authority over the use of PhilHealth’s reserve funds. PhilHealth is a government corporation attached to the Department of Health for policy coordination and guidance. It was mandated to administer the National Health Insurance Program.

But I have long doubted the capability of the top officers, past and present, of PhilHealth because it was not organizationally structured to manage such a complex and far-flung operation. I got to know that in 2007 when Dr. Francisco Duque, then president of PhilHealth, commissioned the De La Salle Graduate School of Business to conduct an executive development program for 50 officers of PhilHealth. I was the program director.

PhilHealth has been headed by a lawyer, a Doctor of Medicine, a military general, a detective, and now a Master of Business Administration.

During the 2022 presidential race, Jessica Soho of GMA 7 asked presidential candidates Leni Robredo, Panfilo Lacson, Manny Pacquiao, and Isko Moreno how they would solve the problems hounding PhilHealth if they were elected president. According to estimates at the time, PhilHealth’s actuarial life would only last until 2027.

Vice-President Robredo stressed that someone who is well-versed on health economics and an actuarial scientist should lead the agency. “PhilHealth is in this kind of mess because of the failure of leadership to manage the office.” Sen. Lacson said it should be headed by someone who knows how to handle finances. To him, the training and work experience of former NBI director Dante Gierran, the president of PhilHealth at that time, did not match the requirements of the position.

Sen. Pacquiao disagreed. As there is too much corruption in PhilHealth, the appointment of the former NBI director as president of PhilHealth was right. For Mayor Moreno, a financial guy or group of people who understand finances and how to grow the money of PhilHealth should run PhilHealth.

I say that a health economist or an actuary — as VP Robredo suggested — should not head PhilHealth. Neither should a finance person. They are specialists. The effectiveness of a health economist/actuarial scientist or of a finance person would be diminished considerably if they have to divide their time between their field of expertise and managing the overall operations. They should devote all their working hours to performing the job they are experts on.

RA 11223 enrolled all Filipino citizens in the National Health Insurance Program to be administered by PhilHealth. The Philippine population had grown to 116 million by 2022. Those are 116 million Filipinos spread all over the archipelago — from Batanes in the north to Tawi-Tawi in the South, from Samar in the East to Palawan in the West.

As I have written here before, mandating PhilHealth to administer the National Health Insurance Program was a colossal mistake. Even if you rid PhilHealth of corrupt officers and staff, it would still be incapable to formulate and promulgate policies for the sound administration of the program as it lacks a management team composed of people with formal training and substantial experience in health insurance. These people are an actuary, a fund manager, and claims adjusters (processors).

The health insurance actuary is responsible for assessing future financial risk in healthcare. Using a blend of mathematics, statistics, and financial theory, he estimates financial uncertainty and calculates the cost of health insurance premiums based on reported health data like the Department of Health morbidity rates. He makes financial predictions of expected costs and profits using patient health data, geographical location, occupational risk factors, and age.

The health insurance actuary is typically a master’s in actuarial science. An academic discipline combining courses such as mathematics, statistics, probability, economics, finance, computer science, and business administration are ideal in preparing a person for an actuarial position in a health insurance company.

The World Health Organization (WHO) had advised our legislators to implement universal healthcare (UHC) fully in 2030 when the country’s health delivery system would be capable of servicing UHC. But some of them rushed the enactment of a law instituting universal healthcare — RA 11223 — so that they could present UHC in the elections of 2019 as their gift to the Filipino people. They must have said, “Bahala na si Batman.”

Among the authors of the law were senators JV Ejercito, Sonny Angara, Nancy Binay, and Cynthia Villar, who were all running for re-election. Ironically, Sen Ejercito, the principal author of RA 11223, was not re-elected.

RA 11223 imposed an enormous and horrendous actuarial problem upon PhilHealth. “Even if you put Superman in my place, he might not be able to cope with the task,” Retired General Ricardo Morales, then PhilHealth president, remarked in 2020. It was his way of saying the alleged irregularities in the state insurance firm could not be fixed. But his remark can apply to the general state of PhilHealth.

According to PhilHealth, 38 million of its enrollees are indigents. That makes the actuarial projections more complex because the moral hazard becomes a bigger risk factor. The jobless poor will seek hospitalization even if they are not sick. Hospitalization means three free meals a day and a real bed to sleep in instead of a cart or the sidewalk. The doctor would agree to ordering confinement as it means revenue for him (PhilHealth pays his professional fee). The hospital also gets paid by PhilHealth for virtual services. That has actually happened as the various investigations of PhilHealth irregularities and anomalies have shown.

At a Senate hearing in 2020, PhilHealth acting Senior Vice-President Nerissa Santiago claimed that the insurer’s actuarial life was down to a year due to decreased collections and an expected increase in benefit payouts due to COVID-19. Rep. Stella Luz Quimbo questioned such a projection, noting that PhilHealth would still be able to collect from members if collection efforts were intensified.

Rep. Quimbo asked for an actuarial validation by a third party. I do not think she can find an actuary capable of assessing the actuarial life of PhilHealth. No actuary in the world has any experience calculating the potential healthcare cost of an enrollment of 100 million individuals with a profile similar to that of PhilHealth’s and with a healthcare system like the Philippine healthcare system.

The UHC of other countries like the United Kingdom, Canada, Australia, Japan, and Cuba is provided by hospitals owned by their governments and by healthcare professionals employed by their governments. They have no need for a health insurance company. Therefore, they have no need for actuarial projections and the attendant actuary.

Ms. Santiago is designated as the Acting Vice-President for Actuarial Services and Risk Management Sector of PhilHealth. BusinessWorld asked for her resume sometime in June. We have not received it yet, despite follow-ups. So, we know nothing about her credentials for her role.

As for the fund manager, he is responsible for making the funds (the total premiums paid by the people insured) grow by implementing investment strategies. He can find safe, short-term assets to invest its funds. Common instruments of this type include Treasury bonds, high-grade corporate bonds, and interest-bearing cash-equivalents.

The typical fund manager possesses a minimum of a bachelor’s degree in economics, finance, and business. He may have gone through advanced studies in financial management or hold a master’s degree in economics and had significant experience as a trader in a bank. He may even carry the title Chartered Financial Analyst.

Listed as Senior Vice-President for the Fund Management Sector is Renato Limsiaco, Jr. Prior to his promotion as SVP, he was Regional Vice-President for Eastern Visayas.

He has a Diploma in Development Management from the Development Academy of the Philippines, a doctorate in Management specializing in Human Resources Management from the Leyte Normal University, a master’s degree in Public Administration from the University of Negros Occidental-Recoletos, and a bachelor’s degree in Commerce major in Accounting from Binalbagan Catholic College, Negros Occidental.

Mr. Limsiaco’s work experience and academic background do not match the credentials expected of a true fund manager.

The new president of PhilHealth has better credentials for fund management. Emmanuel R. Ledesma, Jr. had worked for financial institutions. He was managing director and country head of the Royal Bank of Canada, director and vice-president of Morgan Stanley, Hongkong, and associate of PCI Capital.

He earned a master’s degree in Business Management major in Finance, Accounting, and Management Strategy from the prestigious J.L. Kellogg Graduate School of Management, Northwestern University, Chicago, Illinois. But he is more inclined towards administration rather than fund management. That accounts for his allowing the diversion of P89.9 billion of PhilHealth’s money to unappropriated programs.

Prior to his appointment as president and chief executive officer of PhilHealth, he was a freelance consultant to power energy players. He was once a member of the board of the National Transmission Corp., president of Power Sector Assets and Liabilities Management.

But even if President Marcos finds a superman to run PhilHealth, that superman still would not be able to fix the mess that is PhilHealth. That is because RA 11223 mandated PhilHealth to administer the National Health Insurance Program — a colossal mistake.

Oscar P. Lagman, Jr. was country manager of the Philippine subsidiary of a multinational health insurance company in the 1980s. As a freelance consultant, he set up the health insurance line of the Philippine subsidiaries of two multinational general insurance companies, one in 1988, the second in 1999. He was a member of the USAID team that organized the Province of Bukidnon’s healthcare system in 1994. USAID sent him to the executive program on Managed Care of the University of Missouri in 1991.

American TV sex therapist Dr. Ruth, 96

July 16, 2024 | 12:01 am

Ruth-Westheimer-in-Ask-Dr.-Ruth-(2019)-thumb — IMDB

DR. RUTH WESTHEIMER, the chirpy, diminutive therapist who became a pop culture figure as she encouraged Americans to have sex safely, frequently, and creatively, has died at the age of 96, the Washington Post reported.

Ms. Westheimer died on Friday at her home in Manhattan, the newspaper reported citing her publicist.

Ms. Westheimer, who fled Nazi Germany as a child, said she first learned about sex when she was 10 years old and took her parents’ “marriage manual” out of a locked cabinet. What she saw on those pages would lead to a career that included international fame, books, instructional videos, lectures, teaching jobs, a radio show, countless television appearances, a syndicated column, and even a “Good Sex” board game.

Known universally as “Dr. Ruth,” the 4-ft-7 inch (140-cm) tall lady with a distinctive German accent and perpetual cheerfulness preached the joys of good sex, great sex, and, especially, safe sex.

The woman who would become one of the world’s best known sex gurus lost her virginity at 17 on a starry night in a hayloft on a kibbutz. “We spent many nights in that barn … but I remember that first time most vividly of all because it shows that when two people are in love, the first experience can be very enjoyable,” she wrote in her 2001 autobiography, All in a Lifetime.

Ms. Westheimer, a great proponent of contraception, chided herself in the book for not being concerned with birth control in those first encounters. She also declined to say who her partner was because she remained friends with the man, as well as his wife.

Mr. Westheimer herself was the product of an unplanned, out-of-wedlock pregnancy. Her mother was working as a housekeeper for the family of Mr. Westheimer’s father in Frankfurt, Germany, when she became pregnant. The young couple eventually married and Karola Ruth Siegel was born on June 4, 1928.

ORPHANED BY HOLOCAUST
Ms. Westheimer was 10 when the Nazis came to her Frankfurt home and took away her father. Six weeks later her mother sent her to an orphanage in Switzerland. In 1941, Ms. Westheimer stopped receiving letters from her parents and she later learned they had been murdered in the Holocaust.

At 16 she emigrated to what was then Palestine and joined Haganah, a Jewish paramilitary organization. “I learned to assemble a rifle in the dark and was trained as a sniper so that I could hit the center of the target time after time,” she wrote in a 2010 New York Times opinion article that called for women to be allowed to serve in combat in the US military.

Ms. Westheimer never tested her sniping skills against an enemy but was injured in a bombing in Jerusalem.

She married an Israeli soldier and they moved to Paris and went to college. They later divorced, and she headed to New York with a boyfriend, married him, had a daughter and continued her education. After another divorce, she wed Manfred Westheimer, an engineer she met in 1961. That marriage produced a son and lasted until Manfred’s death in 1997.

After earning a doctorate in education, Ms. Westheimer went to work for Planned Parenthood and caught the attention of a New York radio station executive when she lectured broadcast officials on contraception.

That led to a weekly 15-minute midnight radio program in 1980 called Sexually Speaking. It was an advice show that took questions from listeners about orgasms, condoms, and sexual dysfunction — very sensitive subject matter for the time — and quickly won Westheimer a following. She said it was a combination of her experience, training, and her quirky voice and accent that gave her credibility with listeners. They also liked the way she would cheerily wish them “good sex!”

Ms. Westheimer became a popular guest on TV talk shows, which ultimately led to her own show.

“I’m like a Jewish mother,” she was quoted as saying in People magazine. “A Jewish mother who talks explicitly.”

Ms. Westheimer believed in people doing whatever they were comfortable with in bed — or elsewhere — and that sex was better when accompanied by intimacy and communication.

If it was between consenting adults and done with proper consideration of contraception, it was OK with Dr. Ruth.

But personally, she was no libertine.

“I am very old fashioned … and a square,” Ms. Westheimer said in a National Geographic interview in 2003. “I believe in love. I believe in relationships. I believe in people staying together for a lifetime or as long as possible.”

In addition to her autobiography, Ms. Westheimer wrote nearly 40 books, including Sex for Dummies, Dr. Ruth’s Sex After 50, Heavenly Sex: Sexuality in the Jewish Tradition, Dr. Ruth’s Encyclopedia of Sex, and Dr. Ruth’s Top Ten Secrets for Great Sex. — Reuters

NEA says Q2 loans to electric cooperatives hit P873.31 million

July 16, 2024 | 12:01 am

THE National Electrification Administration (NEA) said it has disbursed loans totaling P873.31 million to 21 electric cooperatives as of the second quarter (Q2).

NEA, a government-owned corporation under the Energy department, has allocated P447.98 million to fund capital expenditure projects for 15 electric cooperatives.

Seven electric cooperatives received P412 million in working capital, it said in a statement on July 12.

These borrowers are Marinduque Electric Cooperative, Inc., Camarines Sur II Electric Cooperative, Inc., Camarines Sur III Electric Cooperative, Inc., Capiz Electric Cooperative, Inc., Camotes Electric Cooperative, Inc., Negros Oriental I Electric Cooperative, Inc., and Northern Davao Electric Cooperative, Inc.

Bohol I Electric Cooperative, Inc. borrowed a P13.33-million calamity loan for the rehabilitation of the Janopol Mini-Hydro Power Plant, which was previously damaged by Super Typhoon Odette in 2021.

“The NEA has been offering financial assistance to [cooperatives] through its Enhanced Lending Program,” it said.

The program consists of regular, calamity, and concessional loans, standby and short-term credit loans, single-digit system loss loans, renewable energy loans, and modular generator set loans.

Earlier this month, NEA launched its national command center to help monitor and manage the operations of the 121 electric cooperatives nationwide.

Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, tasks NEA with overseeing missionary electrification and providing financial, institutional, and technical assistance to electric cooperatives. — Sheldeen Joy Talavera

Construction e-commerce platform BuildHub PH expects growth in Visayas

July 16, 2024 | 12:01 am

construction tools — SAM CLARKE/UNSPLASH

BUILDHUB PH, an online marketplace focused on construction, expects that 70% of its growth will come from the Visayas market, its top officials said.

The platform, operated by technology company Buildmart PH Technologies, Inc., offers the first online marketplace for construction materials, hardware supplies, and home improvement needs.

The company is also strategizing to expand its presence into Mindanao, said Andre Bernardo, co-chief executive officer of BuildHub PH.

“We are confident in replicating our success in other regions, including Mindanao,” he said in an e-mailed statement on July 11.

BuildHub PH also targets offering financial and logistical solutions in both the Visayas and Mindanao regions.

“Our goal is to provide innovative solutions that enhance operational efficiency and promote sustainable development,” Mr. Bernardo said.

The company said that expanding into the Visayan and Mindanao regions is projected to double its user base, in line with its growth strategy to achieve profitability by 2025.

The platform also provides financial backing to pre-approved builders and hardware stores at interest rates ranging from 1% to 3% for terms spanning 30 to 60 days.

According to the company, it aims to foster financial stability and offer growth opportunities to small- and medium-sized entrepreneurs in the construction sector.

“The Visayas region, with its established supplier loyalties, has traditionally proven difficult for market penetration and sales growth. This is why we have introduced BuildHub.ph and BuildCredit to revolutionize the construction industry,” said Marika Laciste, chief business officer of BuildHub PH.

“These services boost operational efficiency and promote sustainable development for hardware stores and suppliers in key Visayan cities,” she added. — A.R.A. Inosante

Wassmer steps down as BDO director after Monetary Board appointment

July 16, 2024 | 12:01 am

NEW Monetary Board (MB) member Walter C. Wassmer has resigned from BDO Unibank, Inc.’s board of directors following his appointment to the central bank’s policy-making body.

“Please be informed that Mr. Walter C. Wassmer, nonexecutive director of BDO Unibank, Inc., has tendered his resignation from the bank’s Board of Directors effective July 16, 2024, due to his appointment as member of the Bangko Sentral ng Pilipinas Monetary Board,” BDO said in a disclosure to the local bourse on Monday.

Mr. Wassmer was appointed as an MB member by President Ferdinand R. Marcos, Jr. on July 12, following the resignation of two members who were involved in a scandal involving “ghost employees.”

MB members Anita Linda R. Aquino and V. Bruce J. Tolentino both resigned on June 30, a Bloomberg report said. Mr. Wassmer will serve the unexpired term of Mr. Tolentino, or until July 2026.

Mr. Wassmer was elected to BDO’s board on April 22, 2022, based on his profile on the bank’s website. — AMCS

Overseas Filipinos’ Cash Remittances

July 16, 2024 | 12:01 am

MONEY SENT HOME by overseas Filipino workers (OFWs) rose by 3.6% in May, its fastest pace in five months, data from the Bangko Sentral ng Pilipinas (BSP) showed. Read the full story.

Philippine revenue performance and the US economy

July 16, 2024 | 12:01 am

Philippine government revenues continue to improve even with no new taxes. The high economic growth just helps expand the revenue base. More business activities equal more revenues.

REVENUE PERFORMANCE 2019-2024
There is one revenue source that is lagging — excise tax. Looking at the period of January-May of each year, the highest excise tax collected was in 2019 with P144 billion, then this declined during the COVID-19 lockdown, then recovered to P125 billion in 2022, then declined again to only P113 billion in 2024 (see Table 1).

Among the “public bad” products slapped with an excise tax, only tobacco experiences a consistent decline in revenues. As the tax rate increases, the tax revenue decreases. For instance, a tax of P50/pack in 2021 yielded P176 billion; P55/pack in 2022 yielded P160 billion; P60/pack in 2023 yielded P135 billion. I made my own projection and believe that this year a tax of P63/pack would yield around P111 billion (see Table 2).

The idea that a “higher tobacco tax rate to reduce smoking while getting higher revenues” is not happening. A reduction in smoking is true only for legal tobacco, but when one looks at smuggled and illegal tobacco, there is more smoking happening as their retail prices are low — about P45-P50/pack vs legal tobacco which sells for at least P110/pack as the tax alone is already P63.

Congress should do something about this to arrest the further deterioration in excise tax collections. Every P1 billion in unrealized tobacco tax means P1 billion that goes to smugglers, criminal syndicates, and their corrupt protectors in government.

At the Economic Journalists Association of the Philippines (EJAP) event on July 8, Secretary Ralph G. Recto of the Department of Finance (DoF) said in his keynote message that “While no new tax proposals are on the table, refined revenue reforms await congressional approval that will add an average of P42 billion annually in additional revenues. We are strategically maximizing our non-tax revenues to increase collections and ensure sustainable funding — P100 billion dividends from GOCCs (government-owned and -controlled corporations), P42 billion from privatization of government assets. Along with preventing wasteful expenditures, these strategies will help keep the deficit in check and reduce sustainably.”

On preventing or reducing wasteful public spending, Budget Secretary Amenah F. Pangandaman engaged with the Philippine League of Local Budget Officers (Phillbo) and Public Financial Management (PFM) practitioners last week and encouraged the LGUs to practice sound and efficient management of resources, especially their shares in the National Tax Allotment, and promote timely and effective implementation of local programs and projects.

Keep on this track, Mr. Recto and Ms. Pangandaman. Reducing the public debt stock via revenue improvement while reducing wasteful spending will redound to the public in the form of lower interest payment and no new taxes.

US ECONOMY UNDER TRUMP AND BIDEN
Last Saturday, an assassination attempt was made on former US President Donald Trump. With only four months to the Presidential elections in November, the economy under current US President Joe Biden remains at the top of agenda of most US voters. With limited space I will discuss and compare only inflation management of the two administrations.

From 2017-2020 under Trump, the US inflation rate ranged from only 1.2% to 2.4%. Under Biden, it went up to 8% in 2022. Among the industrial North America and European nations, the US under Biden was the inflation-instigator in 2021 with 4.7%, followed by Canada and Germany.

In East Asia, the Philippines had the highest inflation rate in 2021 and 2023 while Singapore and Thailand led in high inflation in 2022 (see Table 3).

Biden and the Democrats called the high inflation of 2022 “Putinflation,” or inflation instigated by Russia’s invasion of Ukraine. But this is not true. In January 2021, the last month of Trump’s administration, US inflation was only 1.4%. In January 2022, after 12 months of Biden and one month before the Russian invasion, US inflation was already at 7.5%.

In the four years of Trump, there was no new war, nothing from 2017-2020, while he also attempted to pull US troops out from Syria, Iraq, and Afghanistan. The US and the world should go back to that situation. No war or fewer wars, more trade and commerce, more peace and diplomacy in the world.

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

PSEi member stocks performed — July 15, 2024

July 16, 2024 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, July 15, 2024.

Customs confident of exceeding official 2024 target by P30 billion

July 15, 2024 | 9:04 pm

THE Bureau of Customs (BoC) said it expects to collect up to P30 billion more than its P939.69-billion official target for the year as it strives to beat its internal “stretch” target.

“We’re very much confident that we will hit the target. In fact, what we’re trying to hit now is the internal target of the Commissioner,” Customs Assistant Commissioner Vincent Philip C. Maronilla told reporters on the sidelines of an event on Monday.

For full-year collections, Mr. Maronilla said the internal target is now “a little less than P1 trillion. If we can reach a trillion, then (that would be) so much better.”

Last week, the BoC reported that its collections in the first six months totaled P456.04 billion, surpassing its P442.62-billion target for the period by 3.03%.

The six-month total represents 48.53% of the Bureau’s full-year official target.

However, the “ghost month” — which discourages superstitious Buddhists and Taoists from embarking on important new ventures — tends to produce weak collections, Mr. Maronilla said.

“Our problem, I think, would start about next month because of the ghost month,” he said.

“But for the past years, we’ve been able to overcome that. So, we’re still confident that we will overcome any challenges that will be faced by the bureau for the month,” Mr. Maronilla said.

Mr. Maronilla also shrugged off risks of the weaker peso on the Bureau’s collections, calling currency factors a “give-and-take situation.”

While a stronger dollar increases the value of exports, businesses may be reluctant to import due to higher costs, he said.

The peso closed at P58.48 to the dollar on Monday, weakening by 10 centavos from its finish on Friday, according to the Bankers Association of the Philippines.

“I don’t think that the increase in the value of the dollar right now and its adverse effect on let’s say, import activities, would affect any projections that we have in reaching our collection target,” he added.

However, the BoC said it still prefers a stronger peso as it “means that we have a stronger economy.”

Separately, goods that violate intellectual property rights remain most-seized items by the BoC, it said.

“That’s a commitment that we have — to maintain our good standing in intellectual property law enforcement. So, these remain the top apprehended imported items,” Mr. Maronilla said.

The BoC is also focused on seizing smuggled agricultural, tobacco, and other excisable products.

In the first half, the BoC has seized around P20 billion worth of smuggled goods, roughly 16.15% lower compared to a year earlier. — Beatriz Marie D. Cruz

Local preference urged in gov’t procurement

July 15, 2024 | 9:03 pm

By Justine Irish D. Tabile, Reporter

THE Department of Trade and Industry (DTI) said domestic producers must be given preference in government procurement to support their development.

“We need to source products that are available locally, as long as they meet the price, quality, and standards,” Trade Undersecretary Rafaelita M. Aldaba said on Monday on the sidelines of the Tatak Pinoy Act Forum.

“The biggest opportunity for our producers is if the market for their products is the government,” she added.

She said that a lot of products can be locally sourced, with preferential procurement within the scope of the Tatak Pinoy Act.

“Right now, they are using this program called domestic bidder preference… we know that it is still hard to compete with imported products because they have lower prices due to their scale,” she added.

She said that if the government sources locally, the government spending will stimulate more economic activity.

“It will have a lot of spillover effects, and at the same time, the government will also be able to help our industries,” she added.

Aside from the Tatak Pinoy Act, Ms. Aldaba said that the DTI is also awaiting the amendment of the Government Procurement Reform Act, which will make it easier for small and medium enterprises to participate in government bids.

The amendments “will remove the difficult regulations that (deter) local companies, especially small ones,” she added.

In terms of priority products, Ms. Aldaba said that the target is to come up with a draft of the Tatak Pinoy Strategy by December.

“This will be a multi-year strategy … we will identify the products that we will target in terms of contribution to gross domestic product and employment as well as the sectors that we will prioritize,” she said.

According to Trade Secretary Alfredo E. Pascual, one of the top priorities of the Tatak Pinoy Act is the semiconductor and electronics industry.

In particular, he said that the goal is to elevate the industry’s position in the global value chain by refocusing on higher-value activities such as integrated circuit design, research and development (R&D), and electronics manufacturing services.

“To achieve this goal, we must invest in R&D infrastructure, forge partnerships with major foundries globally, cultivate PhD-level competencies, and optimize power and logistics infrastructure,” Mr. Pascual said.

“Hence, one of our major initiatives under Tatak Pinoy is to conduct a feasibility study on establishing a lab-scale wafer fabrication facility in the Philippines,” he added.

He said that the facility will support R&D, prototyping, intellectual property development, and experimentation with new materials and manufacturing processes.

Semiconductor and Electronics Industries in the Philippines Foundation, Inc. President Danilo C. Lachica said that there is a long-term need for a wafer fab but noted its low-priority status under the US Chips Act.

“You can’t really blame them since the low-hanging fruit is expanding the assembly, testing, and packaging, and it’s good for us. It’s also good when they say they’ll triple output,” he said.

“It’s also a natural consequence of building up the wafer fab capacity in the US, because if you produce the wafers, you’re going to have to send those wafers elsewhere to do the assembly test and packaging; hence, the Philippines will benefit directly from that,” he added.

However, he said that the Philippines will eventually need to consider having its own wafer fab capacity.

“I think that there’s a real China threat to Taiwan, and Taiwan is the biggest source of our semiconductor wafers, which are used for our electronics industry,” he said.

“When that impacts the supply of wafers, it’s going to be a major detriment to our industry,” he added.

He added that a wafer fab will increase the complexity of the electronic products that the country exports.

“We import about $20 billion to $30 billion worth of parts; if we can localize most of that, possibly with the help of Tatak Pinoy, that’s going to be a big boost to the economy,” he said.

1...1,4871,4881,489...12,767 Page 1,488 of 12,767