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Wassmer appointment to diversify Monetary Board

THE MONETARY BOARD will benefit from private sector representation as this would bring diversity to its current composition, analysts said,

This, after President Ferdinand R. Marcos, Jr. last week appointed banker Walter C. Wassmer to the Bangko Sentral ng Pilipinas’ (BSP) policy-making body.

Mr. Wassmer previously served as a consultant and non-executive director of BDO Unibank, Inc. He also held positions at Far East Bank and Trust Co. and Union Bank of the Philippines, Inc.), among others.

BSP Governor Eli M. Remolona, Jr. said in a statement on Friday that Mr. Wassmer “brings with him decades of banking experience which will prove invaluable to the policy-making body and the decisions of the Monetary Board.”

The seven-member Monetary Board is headed by the BSP chief. Aside from Mr. Wassmer, its other members are Finance Secretary Ralph G. Recto, former BSP Governor and Finance Secretary Benjamin E. Diokno, former Finance Undersecretary Romeo L. Bernardo, and former National Treasurer Rosalia V. de Leon.

“As part of the monetary authority, the standard goals of macroeconomy have to be achieved. Such goals include price stability by managing inflation through effective monetary policy and economic growth that is faster than population growth through monetary tools,” John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said.

Mr. Rivera said Mr. Wassmer’s experience as a banker “may be complementary in achieving these macroeconomic goals.”

Security Bank Corp. Chief Economist Robert Dan J. Roces said that the appointment “underscores the importance of maintaining a balanced board composition that combines academic, policy, and industry expertise while prioritizing national economic interests.” 

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that Mr. Wassmer’s private sector experience makes him an “outstanding choice” for the Monetary Board.

“It would be good if President Marcos would again appoint someone from the financial industry for the remaining open seat in the Monetary Board to provide a better blend of backgrounds and viewpoints,” Mr. Colet said. “A more diverse membership can help enhance the quality of decision making.”

On the other hand, Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila University, said an economist might be a better fit for the Monetary Board than another banker.

“Economists can provide the necessary insights and recommendations to navigate through crises, whereas a Board member with banking or political experience but without such expertise may be slow to react or implement ineffective measures,” Mr. Lanzona said in an e-mail.

“Economists are often at the forefront of developing new monetary policy frameworks and tools. Without them, a Board member might lack the capacity to innovate and adapt to new economic challenges or shifts in the global economy,” he added. — Luisa Maria Jacinta C. Jocson

Philippines’ tax effort increased in 2022

The Philippines’ tax effort expanded to 18.4% in 2022, according to the Revenue Statistics in Asia and the Pacific 2024 by the Organization for Economic Cooperation and Development (OECD). Tax effort refers to total tax revenue, including social security contributions, as a share of an economy’s gross domestic product (GDP). The country’s tax effort remained below the Asia and the Pacific average of 19.3%. The bulk of the Philippines’ tax revenue came from taxes on goods and services (43.8%), followed by taxes on income and profits at 33.3%.

Philippines’ Tax Effort Increased in 2022

Michigan bird flu response sparks COVID-style worries

REUTERS

MARTIN, Michigan — Some dairy farmers are resisting Michigan’s nation-leading efforts to stop the spread of bird flu for fear their incomes will suffer from added costs and hurt rural America.

The government’s restrictions, which include tracking who comes and goes from farms, are rekindling unwanted memories of coronavirus disease 2019 (COVID-19) in Martin and other small towns in central Michigan.

The state has two of the four known cases in humans, all dairy workers, since federal authorities confirmed the world’s first case in US cattle in late March. The state has tested more people than any of the 12 states with confirmed cases in cows, according to a Reuters survey of state health departments.

Testing policies vary by state. Public health experts fear the disease has the potential to turn into another pandemic just a few years after COVID-19.

As those worries mount, the acceptance and success or failure of Michigan’s proactive response is being watched by other states looking for a roadmap that goes beyond federal containment recommendations.

More than a dozen interviews with Michigan producers, state health officials, researchers and industry groups, along with preliminary data, so far show limited dairy farmer participation in efforts to stem and study the virus.

In some cases, calls from local health officials go unanswered, money for dairy farm research is left unclaimed, and workers still milk cows without extra protective gear.

Brian DeMann, a dairy farmer from Martin, Michigan, said the outbreak and state’s response recalls COVID-19. The 37-year-old believes Michigan’s rules to contain bird flu would be more widely accepted if they came as recommendations rather than requirements for farmers.

“Nobody knows if these things that we’re being told to do are going to stop it,” said Mr. DeMann, who echoed an uncertain view shared by other farmers. “Just like 2020, people didn’t like to be told what to do.”

This spring many US dairy owners did not heed federal recommendations to offer more protective equipment to employees, according to farmers and workers.

Mr. DeMann said he did not invest in new protective gear, such as masks, for his workers because it is unclear how the virus is spreading.

About 900 permitted dairy farms dot Michigan’s countryside, with cows in open-air barns and piles of feed covered with protective tarps and old tires used as weights.

Tim Boring, Michigan’s agriculture director, said social stigma and economic concerns around infections have discouraged farmers from testing cows for bird flu in the nation’s sixth biggest milk producer.

“There’s a lot of factors that go into the concerns about farms coming forward with positive operations,” he said. “We know this has been a challenge in Michigan.”

The state last reported an infected dairy herd on July 9, its 26th to test positive. Five other states have also confirmed cases in the past month, and about 140 herds have been infected nationally since March, according to US Department of Agriculture (USDA) data. Michigan is offering farms up to $28,000 to entice those with infected herds to participate in research. More than a dozen farms have so far expressed interest, the state said.

Separately, the federal government is offering financial assistance. Twelve of 21 herds enrolled in financial support from USDA are from Michigan, according to the agency.

To boost testing, the USDA launched a voluntary program in which US farmers can test tanks of milk weekly for bird flu. Six farmers in six states have enrolled one herd each, but a Michigan farmer is not among them yet.

“I really would like to see that in every single herd,” said Zelmar Rodriguez, a Michigan State University dairy veterinarian studying infections.

Michigan’s Agriculture department said it has up to 200 people responding to bird flu cases in poultry and cattle, including coordinating with USDA on outbreak investigations.

Veterinarians in other states said they tracked Michigan’s cases to assess the risks for transmission.

“Michigan is doing a good job with their diagnostics and trying to identify where the disease is,” said Mike Martin, North Carolina’s state veterinarian.

Michigan’s outbreak in cows began after an infected Texas farm shipped cattle to Michigan in March before the virus was detected, according to USDA.

Weeks later, a Michigan poultry farm also reported symptoms and tested positive. Whole genome sequencing suggested the virus spilled over from the dairy farm to the poultry flock.

USDA now thinks the virus has spread indirectly through people and vehicles moving on and off infected farms.

Chickens owned by Michigan’s largest egg producer, Herbruck’s Poultry Ranch, were infected because the virus spread from cattle, said Nancy Barr, executive director of Michigan Allied Poultry Industries, an industry group.

Reuters was first to report the link to Herbruck’s from dairy cow transmission. “It’s a new threat to us,” Ms. Barr said.

Herbruck’s told the state in May it was laying off about 400 workers after bird flu decimated flocks in Ionia County. The company said in a public notice it planned to rehire employees as it rebuilds its flocks, a process that can take six months.

As of late June, Ionia County poultry farmers received $73.2 million in indemnity payments from the US government for bird-flu losses, the most of any county in the country that had to cull infected flocks since February 2022, according to data Reuters obtained from the USDA.

The layoffs struck fear in Ionia, a city of about 13,000 people in central Michigan with a brick-paved Main Street and mural of the Mona Lisa. Business owners said unemployed workers have less money to spend at time when local stores already struggle to compete with Walmart and Meijer.

“I just thought, ‘Oh great, here goes the store,’” said Jennifer Loudenbeck, owner of the Downtown Vintage Resale shop. Alex Hanulcik, who owns a fresh fruit stand, said he knows a Herbruck’s employee who left town to find work in the southern US after being terminated.

“I really feel for the employees,” Mr. Hanulcik said. “They were blindsided.” Herbruck’s declined to comment.

Dairy farmers said they are constantly worrying their cows may be the next to become infected, yet they are unsure exactly how to protect them. Doug Chapin, a dairy farmer in Remus, Michigan, said he held meetings with employees to inform them of the risks of the virus. He is trying to make workers wear protective eye gear, though they objected in the past because glasses must be cleaned if milk sprays on them.

“You’re thinking about it all the time,” he said about the virus.

Michigan has plans to test dairy workers for signs of prior infections with first-in-the-nation blood testing. The state has already monitored thousands of people for bird flu symptoms using a complex contact tracing system that texts them three times daily, said Chad Shaw, health officer for the Ionia County Health Department.

Some farmers remain reluctant to engage with local health authorities, though. The Branch-Hillsdale-St. Joseph Community Health Agency began reaching out to farms generally to offer medical care for seasonal workers because of bird flu cases, said health officer Rebecca Burns. There has been little interest, she said. “These guys aren’t used to us calling them,” Ms. Burns said.

Michigan has detected the third most infected dairy herds of any state, after Idaho and Colorado, and lost 6.5 million chickens in April alone from outbreaks on poultry farms, USDA data show.

The Biden administration in late April began requiring lactating cows to test negative before being shipped over state lines. Michigan went further and in May started requiring farms to keep logs of visitors, disinfect delivery trucks that could carry the virus, and take other safety steps.

The state this month began requiring negative tests for non-lactating cows to be shown at fairs. Colorado reported the nation’s fourth human case on July 3.

The US government awarded $176 million to Moderna to advance development of its bird flu vaccine for humans. Two dozen companies are working on a vaccine for cattle, US Agriculture Secretary Tom Vilsack said, as about 140 herds nationally have tested positive.

“Michigan’s been the forefront on providing information, providing access to information that really is helpful,” Mr. Vilsack told Reuters. — Reuters

PAGCOR says income jumped to P6.56 billion in first half

THE Philippine Amusement and Gaming Corp. (PAGCOR) said its net income doubled in the first half of the year, driven by an increase in gross revenues.

In a statement on Sunday, the state gaming regulator reported that its net income from January to June climbed by 121.48% to P6.56 billion from P2.96 billion a year earlier.

“We were able to remit P31.82 billion to the Treasury in the first six months, compared to P22.62 billion in the same period last year,” PAGCOR chairman and chief executive officer Alejandro H. Tengco said.

PAGCOR said its doubled income growth could be attributed to its gross revenues in the first six months of the year, which increased by 42.92% to P51.76 billion from P36.21 billion in the same period last year.

This puts the state gaming regulator “on track” to surpass the P100-billion annual gross revenue threshold this year, it said.

PAGCOR said that gaming operations accounted for the majority of revenues, totaling P45.39 billion.

Around 45.53% or P20.66 billion came from the online gaming sector, namely, electronic games (e-Games), electronic bingo (e-Bingo), and bingo grantees.

“Given the phenomenal revenue increase in the e-games sector, and with more players and investors signifying their intent to enter the Philippine market, we are confident that the year 2024 will be truly a banner year for PAGCOR,” Mr. Tengco said.

Integrated resorts or licensed casinos accounted for 35.44% or P16.06 billion to PAGCOR’s gaming revenues, it said. PAGCOR-operated casinos under the Casino Filipino brand generated P6.93 billion, contributing 15.27% to gaming revenue.

The Philippine gaming industry’s total gross gaming revenue (GGR) jumped 19.21% to P194.74 billion from P163.36 billion in the first half of 2023.

Licensed casinos were the biggest contributors to GGR in the first semester of the year, generating P99.16 billion.

This was followed by e-Games at P63.01 billion in revenues in the first half of 2024, which doubled (208.42%) from P20.43 billion a year ago.

On the other hand, GGR from PAGCOR-operated casinos declined by 11.6% to P8.89 billion from P10.06 billion in the first half of 2023.

Under PAGCOR’s Charter and other governing laws, 5% of its winnings goes to the Bureau of Internal Revenue as franchise tax, while 50% of the remaining 95% goes to the National Treasury as the government’s mandated income share.

PAGCOR generates revenues from its gaming operations to support the government’s development projects. It also serves as a gaming regulator to help prevent the proliferation of illegal gambling in the country. — Beatriz Marie D. Cruz

The esports industry should be embarrassed right now

SOUTH KOREAN esports organization T1 became the first-ever Esports World Cup (EWC) League of Legends winners after defeating TOP Esports (TES) 3-1 in Riyadh, Saudi Arabia. — ESPORTS WORLD CUP

THE FIRST-EVER Esports World Cup was launched in Saudi Arabia last weekend with a record-breaking $60-million prize pool.

That’s just a few million short of the all-time high $64 million being offered this month at Wimbledon, and a reminder of the growing cultural and commercial footprint of competitive video gaming worldwide.

However, unlike at Wimbledon, the esports event’s prize money is not awarded equally to male and female players. Of its 22 matches, there’s only one — Mobile Legends: Bang Bang or ML:BB — reserved for women. Later this month, the 12 teams in that contest will compete for a $500,000 pot. Meanwhile, the 23 teams in the World Cup’s co-ed ML:BB tournament — all made up of men — are currently competing for a $3 million pot.

Pay gaps like that aren’t unique to the Esports World Cup. Of the $181 million in prize money distributed at competitions in 2023, just $2.4 million was won at women’s tournaments.

That’s an embarrassing state of affairs for any industry in 2024. Professional esports needs to address the underlying causes or risk marginalizing itself.

Fans of other sports are often surprised to learn how culturally and commercially influential esports already are. According to Newzoo, a video game research and data company, there were at least 3.3 billion video game players worldwide in 2023, of whom 45% were women, and the games market generated $184 billion.

Those are impressive numbers for a sport strongly associated with young men. As anyone who has ever logged into an online, multi-user game can attest, the gaming environment can be hostile and unwelcoming, especially to women. A 2022 Bryter survey of 1,500 female gamers in the UK, US and China found that 72% of those surveyed experienced toxicity online; 40% reported verbal abuse online; 35% claimed to have been sent inappropriate content online; and 28% reported having been the target of sexual harassment.

The hostile gaming environment isn’t just the work of misogynistic gamers, either. Developers and the tournaments that license their games also deserve blame. For example, the game industry has a long-standing reputation for highly sexualized depictions of female game characters. Actual women notice: 69% of gamers surveyed by Bryter agreed that female characters in games are often over-sexualized.

The impact of the hostile gaming environment is trackable. According to Bryter’s results, almost half of the women who play multi-player games don’t reveal their gender, and one in three avoid speaking up during gameplay for fear of negative reactions from male players.

Indeed, it’s not uncommon for female players to be asked to leave games after male players realize they’re playing with or against women. Perhaps unsurprisingly, women are likelier to game solo and offline than men.

By avoiding gameplay with men or being excluded from it, women gamers lose valuable developmental opportunities that could train them up to compete for the biggest prize pools. Judging by the lineups for the Esports  World Cup and other top-end tournaments, most professional esports teams are all-male.  Not much indicates that they aren’t happy to stay that way. As a result, even women who have developed pro-level skills lack opportunities to compete at the top of esports.

The pay gap is an inevitable result. Esports Earnings, an independent aggregator, maintains a list of the top 1,000 esports athletes by career earnings. The top earning woman, Sasha “Scarlett” Hostyn of Canada, now appears at #526. In 2021, she was also the top-ranked woman — at #367. Ironically, Hostyn and other women lost ground precisely as female athletes in other sports, from basketball to volleyball, were emerging as commercial and cultural forces. That’s a disparity that should embarrass the esports industry.

It certainly knows it has a problem. That’s why well-meaning attempts, such as all-female teams, leagues, and competitions have been developed, but these solutions have failed to make much of a dent, mainly because, by segregating women they inadvertently (or perhaps, purposefully) contribute to the false perception that female gamers are inherently less skillful. That perception, in turn, enables tournaments — like the World Cup — to marginalize women, and pay them less.

If the esports industry is serious about fixing this imbalance, it should start with equal pay at tournaments that feature male and female gamers. Just as important are initiatives that create equal opportunities for female gamers to join and compete against top male gamers. For example, earlier this year, Indonesia’s ML:BB developmental league announced that it would feature men’s and women’s teams that compete against each other. It’s a major step that will enable female gamers to improve their skills and —  hopefully — work their way up to top-level, top-paying competitions that currently exclude them. It’s an experiment worth emulating.

Meanwhile, future editions of the Esports World Cup could accelerate this process by requiring all-male teams to include one or two female members. It’s a market-based incentive that will encourage top teams to seek out and cultivate female gamers and open up the sport to new audiences.

Over the last two years, women’s sports and athletes have made tremendous commercial and cultural advances. Esports doesn’t have to be a laggard. But if it continues down the current path, it’s game over. 

BLOOMBERG OPINION

Goodyear Eagle F1 Asymmetric 6 tire shines in 12-hour endurance race

Team AutoPerformance Kick-Start Racing members pose during the Kalayaan Cup at the Clark International Speedway. — PHOTO BY MATT ROMUALDEZ

TEAM AUTOPERFORMANCE Kick-Start Racing helped to prove the quality and performance of the Goodyear Eagle F1 Asymmetric 6 as its purpose-built BMW M3 race car shod with the aforementioned tires crossed the finish line of the recently concluded Kalayaan Cup endurance race. The 12-hour competition is said to be the country’s longest and most grueling event — pushing both cars and drivers to their limits.

“Endurance racing is incredibly tough on tires. For us to be able to compete with the best, we need tires that have great grip. But just as important, these should be able to withstand the extended abuse that comes with 12 hours of hard racing,” explained AutoPerformance Kick-Start Racing Driver and Team Principal Francis Aguila. “We are proud to be the first in the country to test the new Goodyear Asymmetric 6, and it has exceeded our expectations in terms of performance and durability.”

Added Goodyear Philippines, Inc. General Manager Peter Gonzales, “I’m proud of our tire’s performance… The Eagle F1 Asymmetric 6 tire demonstrated its durability and consistency throughout the race, allowing our drivers to complete the full distance without any major issues. We learned a lot about our tire’s strengths and weaknesses and we’re looking forward to the next opportunity to the next race. I want to thank the entire team of AutoPerformance Kick-Start Racing for their hard work and dedication.”

Adidas set to benefit as Nike struggles

HENRY CO-UNSPLASH

THE SUCCESS of Adidas’ low-rise multi-colored Samba and Gazelle sneakers, along with weaker sales at rival Nike, should help the German sportswear brand deliver strong second-quarter sales and its biggest profit margin in three years.

Nike forecasts a surprise drop in annual sales at the end of June, adding to investor worries about the sportswear giant falling behind established peers and newer rivals alike.

Nike shares fell as much as 20% on the news, but shares in Adidas — which usually track the US company’s moves — barely reacted, suggesting investors see Nike’s weakness as an opportunity for Adidas.

“Nike, in terms of product and message, is very much off its game and Adidas is having a bit of a moment,” said Simon Irwin, retail and sporting goods analyst at Tanyard Advisory.

Nike is less innovative than in the past and competition has increased, providing retailers with a wider range of brands to choose from, said Cedric Rossi, next-gen consumer analyst at Bryan Garnier.

“There is really a huge contrast between what’s going on at Nike and the rest of the industry,” he added.

Nike said in late June it would roll out new $100-and-under sneakers around the world as it aims to get sales back on track.

Meanwhile, Adidas has been fueling a trend for its three-striped shoes like the Samba and Gazelle, bringing out new colors and limited editions to keep shoppers interested.

Online searches for “Adidas Samba” have surged worldwide in the past twelve months, surpassing searches for “Nike Air Force 1” last December and hitting a peak at the beginning of April, Google Trends data shows.

Analysts expect Adidas to report a profit margin of 51.4% for the second quarter, according to LSEG data. That would be its highest in three years. Quarterly revenue is tipped to rise 4.5% from a year earlier to 5.6 billion euros ($6.1 billion)*.

“The market is clearly expecting upgrades,” Mr. Irwin said. But he warned against assuming the “golden days of very high margins” are coming back anytime soon, given weaker demand in China and higher competition.

Adidas still has to be on its toes as smaller brands are gaining ground, especially in running and outerwear.

Emerging sportswear brands such as Hoka, Lululemon, New Balance and On Running had a global market share of 35% in 2023, up from 20% over the 2013-2020 period, according to research by RBC published last month.

“Fragmentation (in the industry) was always going to happen and Nike has fed into that,” by walking away from some of its wholesale partners to focus on direct-to-consumer sales, thus “opening the gates” for smaller brands, Mr. Irwin said.

This strategy stands in contrast with Adidas’ efforts to strengthen relationships with wholesalers under Chief Executive Officer Bjorn Gulden.

Some Wall Street analysts have raised the possibility of a management shake-up at Nike ahead of its investor day this fall.

The Euros soccer championship is also likely to boost demand for sportswear in Europe, analysts and investors say.

“What Gulden brought back is the focus on sport,” said Simon Jaeger, investment manager at Flossbach von Storch, which holds Adidas shares. — Reuters

*($1 = 0.9241 euros)

Auto Sales (June 2024)

Auto Sales (June 2024)

Yields on government debt decline as CPI data reinforce Fed cut hopes

YIELDS on government securities (GS) fell almost across all tenors last week following the release of soft June US consumer inflation data, which reinforced expectations for a September rate cut by the US Federal Reserve.

GS yields, which move opposite to prices, went down by an average of 17.36 basis points (bps) week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of July 12 published on the Philippine Dealing System’s website.

Yields declined almost across the board last week, save for the 182-day Treasury bill (T-bill), which rose by 1.7 bps to fetch 5.9839%.

Meanwhile, the rates of the 91- and 364-day T-bills went down by 3.07 bps and 3.68 bps week on week to 5.6845% and 6.0480%, respectively.

At the belly, yields on the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) dropped by 13.41 bps (to 6.0712%), 13.45 bps (6.1089%), 14.47 bps (6.1441%), 16.80 bps (6.1745%) and 21.63 bps (6.2201%), respectively.

At the long end of the curve, the rates of the 10-, 20- and 25-year T-bonds fell by 26.13 bps (to 6.2503%), 40.66 bps (6.3652%) and 39.38 bps (6.3619%), respectively.

Total GS volume traded reached P41.72 billion on Friday, higher than the P32.15 billion seen on July 5.

“Domestic bond yields broadly moved lower [last] week after amid dovish remarks by US Federal Reserve Chair Jerome H. Powell during his US Congressional testimony and was supported by the softer US consumer inflation report,” a bond trader said in an e-mail.

These solidified market expectations of a policy rate cut from the Fed as early as September, the trader added.

“The week started out strong as buying momentum continued to be seen, especially in the first two trading sessions for the week. The rally was spurred when US yields fell, an indication of a softening labor environment as shown by the latest non-farm payrolls results,” Alessandra P. Araullo, chief investment officer at ATRAM Trust Corp., said in a Viber message.

Mr. Powell, over his two days of commentary before the Senate and House committees that oversee the central bank, indicated the Fed was edging closer to a rate cut decision, while also insisting that he was not yet ready to declare that inflation had been beaten, Reuters reported.

Mr. Powell and other Fed officials have said they will not cut interest rates until they have gained even greater confidence that inflation is headed back to the central bank’s 2% target after a breakout surge during the pandemic.

The Fed next meets on July 30-31.

US consumer prices fell for the first time in four years in June amid cheaper gasoline and moderating rents, firmly putting disinflation back on track and drawing the Fed another step closer to cutting interest rates in September.

The second straight month of benign consumer price readings reported by the Labor Department on Thursday should help to bolster confidence among officials at the US central bank that inflation is cooling after surging in the first quarter.

The report also showed a measure of underlying inflation posting the smallest increase since August 2021 on a monthly basis. Financial markets saw a very high probability of the Fed starting its easing cycle in September.

The consumer price index (CPI) dipped 0.1% last month, the first drop since May 2020, after being unchanged in May, the Labor department’s Bureau of Labor Statistics said.

In the 12 months through June, the CPI climbed 3%, the smallest gain since June 2023. That followed a 3.3% advance in May. Economists polled by Reuters had forecast the CPI ticking up 0.1% and gaining 3.1% year-on-year.

Financial markets saw a roughly 85% chance of a rate cut at the Fed’s September meeting, compared with about a 70% chance seen before the report. Two rate cuts are anticipated this year.

The central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.5% range since last July. It has hiked its policy rate by 525 bps since 2022.

Optimism also grew after Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. reiterated the possibility of an August rate cut, adding that the central bank cannot wait long before starting its easing cycle as this could dampen economic growth, Ms. Araullo added.

“Because of these comments, better buying interest was observed, especially in the belly portion of the curve,” she added.

Mr. Remolona last week said the central bank is trying to “strike a balance” between supply and demand to ensure stable prices.

He said the Monetary Board remains “on track towards reducing rates” despite risks to the inflation outlook. He earlier said that the central bank could cut by 25 bps in the third quarter and by another 25 bps in the fourth quarter.

The BSP last month kept its policy rate at a 17-year high of 6.5% for a sixth straight meeting. It raised rates by a cumulative 450 bps from May 2022 to October 2023 to tame inflation.

The last time the BSP cut borrowing costs was in November 2020 when it slashed its key rate by 25 bps to a record low of 2% to support economic recovery amid the coronavirus pandemic.

For this week, Ms. Araullo expects the 10-year T-bond auction to be the main market mover. The Bureau of the Treasury will auction off P30 billion in reissued 10-year bonds with a remaining life of nine years and six months on Tuesday.

“If demand remains strong for the bond, we may see follow-through buying in the market as investors may still be keen on locking rates at current levels given the BSP’s hawkish rhetoric,” she said.

“Yields are likely to continue its downtrend, potentially taking dovish cues from the European Central Bank (ECB) policy decision and weaker Chinese economic growth in the second quarter, both of which could support views of monetary policy easing by various central banks this year,” the bond trader added.

Latest China gross domestic product will be released on July 15 (Monday), while the ECB will hold a policy meeting on July 18 (Thursday). — Lourdes O. Pilar with Reuters

Contamination of cooking oil raises fresh food-safety worries in China

REUTERS

BEIJING — China’s food safety commission will investigate the alleged use of fuel tanker trucks to transport cooking oil, state media reported, amid fears of possible food contamination.

The Beijing News last week reported that state stockpiler Sinograin’s fuel tankers were found transporting food products like cooking oil, soybean oil and syrup, without cleaning the tankers in between.

The food safety commission will hold a special meeting with state planning agency the National Development and Reform Commission, the State Administration of Grain and Reserves, and other ministries to discuss and investigate the allegations, state broadcaster CCTV reported.

“Illegal enterprises and relevant responsible persons will be severely punished in accordance with the law and will not be tolerated,” CCTV said.

Chinese food products have come under scrutiny domestically and globally after a series of scandals, especially the lethal milk scandal in 2008 where infant formula was found containing the industrial chemical melamine.

Beijing has sought to step up food safety controls and assure importers that its products are safe, while some Chinese consumers have turned to foreign brands that are deemed more reputable.

Beijing News last week said the cooking oil issue was an “open secret” in the transport industry, and CCTV called it “tantamount to poisoning,” even after Sinograin released a statement saying it had ordered an investigation into whether transportation carriers leaving and entering its warehouses were compliant with food safety regulations. — Reuters

Robinsons Land shares fall despite developments

ROBINSONS Land Corp. (RLC) saw a decline in its share price last week despite announcements to launch two residential projects in the second half of the year and allocate shares towards other initiatives.

Data from the Philippine Stock Exchange showed the Gokongwei-led property developer ranking 12th in value turnover, with P846.52 million worth of 59.42 million shares exchanging hands from July 8 to 12.

The property developer shares closed at P14.26 apiece on Friday, dipping by 0.7% from their P14.36 close a week earlier.

Year to date, the stock has also declined by 10.5%.

Jemimah Ryla R. Alfonso, an equity analyst at Regina Capital Development Corp., said that the price movement of RLC mirrors that of other property stocks during the past few days. 

“At this point, RLC is still trying to find its strong support level due to the steep decline last week,” Ms. Alfonso said in an e-mail.

She also said that the stock is currently moving sideways, and the oscillators indicate that the momentum remains sluggish.

Additionally, the [down]trend is consistent across the property sector this week, due to a lack of catalyst and as investors remain cautious towards the property sector, Ms. Alfonso said.

Last week, a company official at RLC said that the property developer is likely to launch two residential projects next semester.

The company is considering launching two to three towers in Cainta, Rizal, where it has already introduced four.

In a forum attended by reporters, RLC’s Senior Vice-President and RLC Residences General Manager John Richard B. Sotelo said that these developments are driven by the strong demand for properties in the area.

The company also said that it is optimistic about the prospects of the residential market following its sales performance in the past few months.

Additionally, RLC disbursed over P2 billion out of the P8.49 billion in proceeds from the block placement of RL Commercial REIT, Inc. shares.

RLC said that these procedures were carried out to comply with the local stock market’s requirement to submit an external auditor’s certification on the information being presented by the company relating to the use of proceeds.

For Ms. Alfonso, the disbursement of Robinson’s Land aligns with their expansion strategy.

“It appears property developers are stepping up their game, adding more projects as concerns over inventory begin to ease,” she said.

The stock is currently undervalued, but Ms. Alfonso advised that it may be a good idea for investors to add RLC to their portfolios.

“The mall segment is currently the bright spot in the property sector, buoyed by robust and resilient consumer spending,” she said.

Additionally, RLC is “well-positioned to ride this wave of growth, and with the residential and office segments showing lukewarm results, many investors are now considering the potential of the mall and hotel sectors.”

In the first three months of 2024, RLC’s attributable net income reached P4.07 billion from P2.66 billion in the same period in 2023, up by 52.8%.

Meanwhile, consolidated revenues reached P11.03 billion from P9.28 billion in the first quarter of 2023, an increase of 18.8%.

“RLC is currently trading within its support area, ranging between P14.20 and P14.24, and the stock needs to break through the resistance at P14.80 to fully shift the downward momentum,” Ms. Alfonso said. — Abigail Marie P. Yraola

Developing new antibiotics

VOLODYMYR HRYSHCHENKO-UNSPLASH

Antibiotics are the foundation of modern medicine. These essential medicines fight bacterial infections by killing the bacteria or by making it hard for the bacteria to grow and multiply. From simple surgeries and dental procedures to cancer treatment, antibiotics support health systems’ ability to deliver safe care to patients.

By one estimate, antibiotics have extended average human life expectancy by more than 20 years since their discovery almost a century ago. But they are becoming less and less effective as a result of bacteria developing resistance, making people more vulnerable to infections.

According to the World Health Organization (WHO), the rise in rates of antibiotic-resistant infections due to misuse and overuse of antibiotics has become one of the top 10 biggest health issues facing the world. It is estimated that bacterial antimicrobial resistance (AMR) was directly responsible for 1.27 million global deaths in 2019 and contributed to 4.95 million deaths. This is a problem that will get progressively worse unless policy reforms are implemented.

As the country observes National Infection Prevention and Control Week, the research-based pharmaceutical industry reiterates our call to accelerate the creation of a vibrant and sustainable innovation ecosystem to support R&D for new antibiotics and other antimicrobials addressing pathogens prioritized by leading public health bodies.

Developing antibiotics is a long, complex, and risky process, and many in development fail along the way. It takes 10 to 15 years for an antibiotic candidate to progress from the preclinical to the clinical stages. For antibiotics in existing classes, on average, only one of every 15 drugs in preclinical development will reach patients. For new classes of antibiotics, only one in 30 candidates will reach patients.

When they do successfully make it through the rigorous R&D and approval processes, new antibiotics are used sparingly to preserve effectiveness and are often placed on shelves to be used only when more common classes of antibiotics do not work.

Because bacteria continually develop resistance to our existing antibiotics, we will always need a robust pipeline of new ones — so it is critical to have sustained investment to keep pace with growing resistance.

In 2020, more than 20 leading pharmaceutical companies stepped up and created the AMR Action Fund to invest nearly $1 billion in antibiotic R&D and support the pipeline for the next few years. The AMR Action Fund is now the world’s largest public-private partnership supporting the development of new antibiotics. The concept for an investment fund to support companies developing potentially lifesaving antimicrobial therapeutics originated in conversations among the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), the WHO, the European Investment Bank, and the Wellcome Trust, a London-based charitable foundation focused on health research.

The AMR Action Fund invests in companies that are developing urgently needed therapeutics for priority pathogens and advocate for market reforms to change how society values these lifesaving drugs. It aims to help launch two to four new antimicrobials within the next decade and create a sustainable ecosystem of investment and innovation to take on one of the biggest global health challenges of our generation.

To ensure that novel antibiotics are used appropriately and are accessible to the patients who need them, the AMR Action Fund and the companies it invests in are guided by four key principles.

First, the new antibiotics to be developed should address unmet medical needs prioritized by the WHO, the Centers for Disease Control and Prevention (CDC), and other leading health authorities. The overall guiding principles for any decisions and actions by the AMR Action Fund and its portfolio companies should be to advance medical science, contribute to slowing the emergence of resistance, and support appropriate patient access.

Second, the AMR Action Fund will work to ensure portfolio companies design and undertake clinical trials in a way that supports appropriate use and broad access. For example, companies are expected to pursue indications that reflect the highest unmet needs, generate data that informs appropriate use in vulnerable populations, and develop formulations that facilitate access.

Third, ensuring affordable access to new and existing antibiotics, particularly in low- and middle-income countries (LMICs), will require new partnerships with governments, donors, international organizations, industry, and civil society. The AMR Action Fund will advocate for creating new mechanisms and strengthening existing partnerships to facilitate increased appropriate access to novel antibiotics in low- and middle-income countries.

Portfolio companies will identify countries where commercialization is regarded as unfeasible within a reasonable time horizon and therefore these new mechanisms and additional support will be needed to enable access and appropriate use of novel antibiotics. In addition, governments need to strengthen healthcare systems to support access and appropriate use, and create market conditions that enable a sustainable return on investment, recognizing the value of novel antibiotics addressing high unmet needs.

Fourth, the AMR Action Fund will work with portfolio companies to build access and appropriate use into antibiotic development strategies, and support companies to develop and make public Access and Appropriate Use Plans when assets are in Phase III clinical trials. These plans will include the strategies to be adopted by portfolio companies to promote access and appropriate use.

Developing antibiotics to combat infectious diseases is one of the crucial tasks of the biopharmaceutical industry. Investments and a policy environment conducive to innovation will be important to reinforce our pipeline of antibiotics that could be resilient in the face of antimicrobial resistance.

 

Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines (PHAP).  PHAP represents the biopharmaceutical medicines and vaccines industry in the country. Its members are in the forefront of research and development efforts for COVID-19 and other diseases that affect Filipinos.