MGen unit signs solar deal with Singaporean firm

August 23, 2024 | 12:02 am

MGEN Renewable Energy, Inc. (MGreen), a subsidiary of Meralco PowerGen Corp. (MGen), recently signed an investment deal with Singapore-based Vena Energy to jointly develop and operate a solar power project in Bugallon, Pangasinan.

The solar power project has an estimated capacity of 450 megawatts of alternating current (MWac) and is expected to reach financial close and commence construction by the third quarter of this year, MGreen said in a statement on Thursday.

Commercial operations are targeted by the fourth quarter of 2025. The project will be under 3 Barracuda Energy Corp., a subsidiary of Vena Energy.

“Beyond ink and paper, the signing of this investment agreement for our 450-MWac solar power project in Bugallon, Pangasinan is a testament to our commitment to power the good life of many Filipinos through solar energy,” MGreen President and Chief Executive Officer Dennis B. Jordan said.

Vena Energy Chief Executive Officer Nitin Apte said the company is committed to accelerating the energy transition and advancing renewable solutions that “foster sustainable growth and environmental stewardship.”

“The Bugallon Solar Power Project stands as a testament to our shared responsibility and dedication to engineering a greener future for the Philippines,” Mr. Apte said.

In 2023, MGen and Vena launched the commercial operations of their 68-MWac solar power project in Currimao, Ilocos Norte.

Vena Energy owns, develops, constructs, and operates a renewable energy portfolio of onshore wind and solar, offshore wind, and energy storage projects totaling 45 gigawatts.

MGreen is a subsidiary of power distributor Manila Electric Co. (Meralco). It owns and operates Global Business Power Corp. and MGreen, which are focused on using advanced and highly efficient technologies that provide reliable and cost-competitive power to customers.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

GCash credit arm expects double-digit loan growth

August 23, 2024 | 12:02 am

FUSE LENDING, Inc., the credit arm of e-wallet GCash, expects double-digit growth in loan disbursements this year as it targets to reach underserved individuals and small businesses.

Fuse Lending President and Chief Executive Officer Tony Isidro told BusinessWorld on the sidelines of an event last week that he expects their loans to post “at least a double-digit growth” this year.

“We’re still very bullish on the opportunities, not just for this year, but for the coming years. As I said, the opportunity or the gap is just extremely big and we remain committed, not just as Fuse but as GCash, to provide that access to fair loans where previously there was none,” Mr. Isidro added.

Fuse Lending, through GCash, has disbursed P155 billion in loans so far to 5.4 million borrowers as of end-June, he said. Majority of the borrowers were individuals who availed of personal loans.

Mr. Isidro said the e-wallet’s users use GCash loan products for day-to-day purposes.

“As much as we see unemployment at manageable levels, it’s unfortunately still not enough for a big majority of Filipinos. So, they use our products such as GCredit or GLoan or GGives or even our newly introduced Sakto loans to really augment their income. That’s really been their lifeline,” he said.

GLoan Sakto, a nano-loan offer that enables GCash users to borrow small amounts as much as P100 to P300 instantly payable in 14 days with zero interest, has seen significant growth since its launch last year, he noted.

“We introduced Sakto Loans a few months ago and we’ve been able to scale that up over the past months. And we’re seeing very good repayment rates.”

GCash will also continue to cater to micro, small, and medium enterprises (MSMEs) as the country’s economic growth is seen spurring small businesses’ expansion, Mr. Isidro said.

“With the economy continuing to grow and with more businesses looking for opportunities, we hope to bridge that gap on the MSME side,” he said. “Currently, a significant chunk is still the retail customers. But nonetheless, a significant chunk is from MSMEs. And the goal, not just for this year but 2025 onwards also, is to grow both. The gap is really just so big for both retail and MSMEs.”

GCash is also increasing its engagement with rural communities to help give them access to the e-wallet amid a lack of internet infrastructure in these areas, GCash Chief Strategy Officer Rowena L. Zamora told BusinessWorld last week.

“We are also ramping up on our offline activations and engagements by meeting the customers where they are. We don’t assume that everyone will discover us online through the app because not everyone is on a smartphone and not everyone is tech-savvy in that sense,” Ms. Zamora said.

“We meet them in their communities or local government units, so at least that serves as an entry point for them to be introduced to the app and what it can do for them,” she added.

GCash is also working with its telecommunication partners to improve connectivity in underserved areas, Ms. Zamora said.

She added that the company is looking to roll out more innovative products in its bid to help boost financial inclusion in the country.

“We also have certain features in the app that we call zero-rated use cases, such as not needing load in order to use certain features,” Ms. Zamora said. “We ensure that everything that we do from a product, innovation, communication perspective falls under that goal (financial inclusion)… and really ensuring that we are able to measure the impact of those things.” — Aaron Michael C. Sy

China goes ape over culture-boosting Black Myth: Wukong video game

August 23, 2024 | 12:02 am

BEIJING — Chinese state media threw its back behind China’s most successful single-player video game to date, saying its adaptation of the Ming dynasty epic Journey to the West would force Western players to learn more about the country’s culture.

Black Myth: Wukong, based on a mythical monkey king from a Chinese literary classic who can shape-shift into humans, animals, and inanimate objects, was being played on Wednesday by 2.2 million concurrent players on Steam, a major online gaming platform, a day after its release.

“Chinese players in the past have gone through this process of cross-cultural understanding, now it is the turn of overseas players to learn… and understand Chinese traditional culture,” China Central Television wrote in a blog.

Drawing heavily on the story of the beloved magical monkey, Sun Wukong, who acquires supernatural powers by practicing Taoism, Black Myth: Wukong can only be enjoyed if players are familiar with the plot of the 16^th century classic, the national broadcaster said.

The PC/console-based game was launched on Tuesday by Game Science, a Tencent-backed startup, to much fanfare on Chinese social media. Hashtags on the video game accumulated 1.7 billion views on China’s X-like microblog Weibo.

“This release marks a bold foray by Chinese game developers into a market long dominated by Western triple-A titles,” the official Xinhua news agency wrote in an editorial on Wednesday.

“With this breakthrough, the default language of a triple-A game is no longer English, but Chinese,” it added.

Black Myth: Wukong would “attract more global players to pay attention to domestic games,” said analysts at Shanghai-based Topsperity Securities, adding that companies across a wide range of sectors could expect to profit off intellectual property tie-ins.

Ride-hailing firm Didi, Lenovo Group and Luckin Coffee are incorporating elements inspired by Black Myth: Wukong into their promotional campaigns.

Black Myth: Wukong was widely lauded as China’s first AAA game — high development costs, long production cycles, and immense investment, with industry analysts viewing its sudden fame and popularity as marking an inflection point for China’s PC/console gaming sector.

Pre-sales, which began in June, had reached 400 million yuan ($56 million) as of Tuesday when the game was launched, according to Citi.

Feng Ji, founder of Game Science, told Xinhua in an interview that the global attention has surpassed his initial expectations and that his team would develop more of such games.

“We see signs that the government is recognizing the industry’s potential value for exports and culture, notably the interview of Game Science’s founder by state media Xinhua agency ahead of its game launch,” Goldman Sachs wrote in a note.

Goldman added that it expected more Chinese AAA games to enter the global market in the future.

Be that as it may, gaming stocks were unchanged on Wednesday, with concept stocks linked to the game’s development down after having risen considerably over the past month.

Unlike other Chinese games that are played on mobile devices and involve endless in-game micro-transactions, Black Myth: Wukong is a one-time purchase with a price tag of 268 yuan ($37.58) for the standard version and 328 yuan for the premium.

“It is unclear whether Black Myth: Wukong’s business model can bring more profits… the important thing… is that China is finally getting it’s own AAA game that can excite the world,” state-owned tabloid Global Times cited an industry insider as saying.

“Global players will be able to get a deeper understanding of traditional Chinese culture while having fun,” Global Times declared. — Reuters

Requests for foreign study leave

August 23, 2024 | 12:01 am

Mario, a long-time supervisor is applying for a six-month management program fully funded by a foreign entity. If accepted, he plans to take study leave without pay and promises to apply his key learnings when he comes back. Unfortunately, we don’t have a policy on this. What’s the best thing to do? — Blue Sky.

Take advantage of the absence of a policy. That way, you can be reasonably flexible in your decision-making process. But don’t be trigger-happy. Have an open mind as an instant negative reaction could have a serious consequences on Mario’s morale.

All organizations need a dynamic training program. Unfortunately, not many employers can afford to pay for sophisticated programs, especially those that involve foreign training. The nature of jobs changes almost every day in this globally competitive environment.

The trouble is the scarcity of training resources as companies navigate rapidly changing technology, new business demands, cultural and generational workforce shifts, and the changing nature of work.

The above list is not complete. But they hint at the urgency of the need for a management development program for everyone. All employees, regardless of rank and stature, must develop new competencies to respond to the changes. Withhold any training and your people will soon enough risk obsolescence, leading your organization to lose its competitiveness.

Only through the continuous upgrading of the worker skills can an organization maintain its competitive advantage in the industry.

CONDITIONS
Even in the absence of a policy on foreign training, you should approve Mario’s request. If you’re part of the human resources (HR) department, you should be dynamic enough to discover there are many free management programs. Many of them can be accessed online and need not require in-person attendance.

But of course, there’s great appeal in foreign training, as opposed to an online set-up. Thus, I will recommend to management the approval of Mario’s study leave, subject to the following conditions:

One, good work performance. A strong performer gives management confidence that Mario will succeed in such a program.

Two, 10 years of service. Continuous employment is another consideration. It is an important measure of the company’s retention rate. This requirement tells people that they must prove their loyalty to the organization before being allowed to take study leave.

Three, clean record. This means having no violations of the company’s Code of Conduct or other rules and regulations, including minor offenses like absenteeism, tardiness, or non-wearing of company uniform, among others.

Four, the nature of the job. A foreign training program, even if it’s fully funded, should promise improvements in Mario’s work when he returns. He must make the case why such a program is indispensable for his current job.

Five, no sharing of trade secrets. Approval of a study leave does not automatically mean that management will allow the sharing of its vital information or strategy with others in the form of case studies or other means. Prior approval is needed before this can happen.

Six, an agreed employment contract. Such a contract must be signed before Mario leaves for overseas. This contract should require him to apply what he learned from the training program within one or two years. Also consider requiring the payment of a training bond.

Seven, a temporary replacement. Internally appointing a senior person will be necessary to avoid disruption of business operations. This also strengthens the company’s succession and career development plans.

POLICY
Now that you are ready to handle Mario’s situation, prepare to establish a formal policy to handle future cases. Create a new policy that applies prospectively to all workers who may be interested in following in his footsteps. You are establishing a precedent and cannot get away from it.

To avoid any confusion, make this policy part of the company’s career development program and succession plan.

Consult other department managers. This way, it would be easy for you to come out with a dynamic program approved by all managers who may be adversely affected by the absence of people attending foreign training. However, no one can argue against having a training program that requires minimal resources from the organization.

Bring Rey Elbo’s Kaizen Blitz Workshop to teach your management team a unique approach in problem-solving. Contact him on Facebook, LinkedIn, X or e-mail elbonomics@gmail.com or via https://reyelbo.com

Is Elon Musk the bankers’ Moby Dick? Not yet.

August 23, 2024 | 12:01 am

CALL ME Ishmael. The biggest question about an investment banking client like Elon Musk is whether he turns out to be a Moby Dick.

They’re rare beasts, the giant whales of finance. Multi-billionaires with a plethora of entrepreneurial and investment interests that have the potential to be a gushing spout of repeatable fees aren’t easy to find. So when bankers spot one, they obviously keep pursuing it as long as they can — even if they take a few hits along the way.

And there have been some very painful hits, indeed, in Musk’s $44 billion buyout of Twitter — the social network now named X. But that doesn’t mean banks will just let go and look for an alternative catch. The man behind Tesla, Inc., SpaceX, and a string of other companies has brought in big fees before and very likely will do again — not only for capital markets work, or deal advice, but also for private banking and wealth management.

Big banks study the full package of what their whales are worth over years. Since the financial crisis of 2008, the strategy across Wall Street has been to focus on ever-smaller groups of the very biggest clients, and get from them the greatest share of revenue for everything they might do in the corporate and personal worlds. Musk epitomizes this model.

The Twitter takeover was a monster of a deal with an intimidatingly large financing package attached. It has now turned out to be possibly the worst buyout deal for lenders of all time, according to the Wall Street Journal, because of its size and how long banks have been forced to keep it on their books.

Morgan Stanley, Inc., Bank of America Corp., Barclays Plc, and Mitsubishi UFJ Financial Group, Inc. underwrote 90% of the $13-billion debt package between them in 2022 when the deal closed. It came at the tail end of a boom in investment banking when interest rates were already starting to rise, and leveraged-loan prices were taking a nosedive.

Normally, banks would sell this kind of debt quickly, but from the second quarter of 2022 onward, leveraged-finance markets were struggling. Nine of the biggest US and European players in the sector reported more than $1.8 billion of mark-to-market writedowns on their unsellable loans in that quarter alone.

Musk’s radical overhaul of Twitter made potential investors doubly wary of the debt attached. By the end of 2022, banks had explored offloading the debt, but the offers they got were just 60 cents in the dollar. They also asked Musk to refinance some of it with personal loans secured against his shares in Tesla, but with no luck.

Morgan Stanley, the biggest lender with a $3.5 billion exposure, never disclosed what writedowns it took on Twitter loans, but for all of 2022, the bank disclosed $876 million of market value losses across corporate loans meant to be sold and another $577 million for 2023. If it had sold the Twitter loans for 60 cents in the dollar, the losses would have been almost that much from this single exposure.

Of course, this is painful for the banks (and the bonuses of those involved), but it’s not disastrous. Those with the most unsellable hung loans were more restricted from underwriting new business, but the leveraged-finance market was in a deep freeze for much of 2023 anyway. Banks stuck with Twitter debt didn’t do much worse in volume terms than those that had steered clear of the deal such as JPMorgan Chase & Co. and Goldman Sachs Group, Inc. In fact, compared with totals in the boom year of 2021, Morgan Stanley’s US leveraged-finance volumes have dipped less than both JPMorgan and Goldman Sachs in each year since.

The Twitter debt is still stuck with those underwriters and undoubtedly remains deeply underwater in terms of market value. The company has been making interest payments of more than $1.2 billion per year, and there would have been advisory and underwriting fees, too. Still, it wouldn’t be a surprise if the debt package wasn’t lossmaking overall at this point for the lenders. Things could always get worse: Advertisers aren’t coming back to X — even under the threat of lawsuits — and users appear to be leaving in fits and starts. My colleague Dave Lee has called it a failing social network.

For the banks, the real question is: Have they made money from their relationship with Musk over the longer term? Even the bankers with the longest and broadest history with him might not be able to answer with a resounding “yes” right now, but they would definitely say he remains a highly valued client. That’s a nod to the future as much as anything else.

Whatever you think of Musk’s politics, his management skill, his tweets, or his Cybertruck, he still has billions of dollars in personal wealth to farm and an almost unbridled influence over the strategies and spending of several major companies. SpaceX in particular is seen by bankers as a huge payday if it eventually comes to the stock market. No one is going to let that go easily.

Banks can hold on too long when big clients with rich potential start to turn into bad financial prospects, but they cut them lose eventually. Musk could some day end up looking more like Herman Melville’s great white whale than most, but the Twitter deal alone isn’t the end of the story.

BLOOMBERG OPINION

IABC Philippines seeks sustainability entries for Triple P Awards

August 23, 2024 | 12:01 am

Organizations are encouraged to showcase their sustainability achievements by participating in the Triple P Awards, the International Association of Business Communicators (IABC) Philippines said on Thursday.

IABC Philippines said that organizations interested in participating in the Triple P Awards can submit their entries until Aug. 30.

“The Triple P Awards represent a powerful opportunity for businesses to demonstrate how they are making a difference. Each entry contributes to a growing narrative of purposeful business, and I encourage all organizations to share their sustainability stories and inspire positive change,” IABC Chair Melody M. Del Rosario said in an e-mailed statement.

The Triple P (planet, people, and progress) Awards honor and celebrate excellence in sustainable business practices, transparency, and impactful communication.

“As the corporate landscape evolves, the importance of ESG strategies has never been more critical. Investors, customers, and employees are increasingly prioritizing sustainability and ethical practices in their decision-making processes,” IABC Philippines said.

“Participating in the IABC Triple P Awards positions companies as leaders in this transformative arena, allowing them to highlight their commitments to sustainability and social responsibility,” it added.

Interested organizations may visit the IABC Philippines website at www.iabcphppp.com, where they will find the submission guidelines and criteria.

IABC Philippines is an organization for professionals in the field of business communication in the country. The group provides its members with opportunities for networking, professional development, and access to valuable resources.

The Triple P Awards is organized by IABC Philippines in collaboration with Deloitte and the Makati Business Club. — Revin Mikhael D. Ochave

Future forward: Advocating clean energy for a sustainable world

August 23, 2024 | 12:01 am

At the 8^th FINEX General Membership Meeting, Francis Giles B. Puno, president and chief operating officer of First Philippine Holdings Corp. (FPH), delivered a keynote address that resonated with FINEX’s 2024 theme of “Transformational Growth through Sustainability, Digitalization, and Diversity.” Invited to speak at this event, Mr. Puno provided invaluable insights on the critical role of sustainable power in driving economic development, a topic of paramount importance as the world grapples with climate change and the need for economic resilience.

A compelling aspect of Mr. Puno’s address was FPH’s 2016 decision to cease all investments in coal-fired power plants. This bold move, made even before the Philippine government’s coal moratorium, was driven by the urgent need to transition from fossil fuels to more sustainable energy sources.

In describing this decision, Giles used the metaphor of “burning the ships,” a reference to Hernán Cortés, who ordered his men to burn their ships upon arriving in the New World, leaving no option but to move forward. For FPH, abandoning coal investments was akin to burning the ships — there would be no turning back to old, unsustainable practices. This shift set a powerful example in the industry, aligning FPH with global sustainability goals.

Mr. Puno emphasized First Gen Corp.’s role as the largest producer of electricity from clean natural gas and renewable energy in the Philippines. With over 8,000 gigawatt-hours (GWh) of electricity generated in 2023, primarily from geothermal energy, First Gen accounts for 30% of the country’s total renewable energy production.

First Gen’s $2-billion investment program reflects its commitment to sustainability, with more than 75% of funds dedicated to geothermal and hydroelectric projects, and the remainder allocated to the liquified natural gas (LNG) terminal in Batangas. This underscores the company’s belief that sustainable energy is the future of power generation.

Despite progress in renewable energy, the energy sector faces significant challenges. The growing demand for power, coupled with the aging infrastructure of existing power plants, presents a substantial challenge. Many of the country’s power plants are outdated and inefficient, leading to higher operational costs and increased greenhouse gas emissions.

The sector’s heavy reliance on imported coal exacerbates the vulnerability of the energy supply chain. Global coal prices are volatile, and geopolitical tensions pose risks to energy security. These challenges are further compounded by challenging conditions for new investments in energy infrastructure.

The call was made for a comprehensive approach to these challenges, balancing the need for reliable power at a reasonable price with the imperative to transition to cleaner energy sources. Modernizing the country’s energy infrastructure is essential to meet growing demand while reducing its environmental impact.

Energy security is not just about ensuring that the lights stay on; it is about securing the country’s economic future. A stable and reliable energy supply is crucial for economic growth and development, and this requires a balanced approach that reduces dependence on fossil fuels while ensuring that power is available when and where it is needed.

The role of baseload plants, facilities that provide a continuous and reliable supply of electricity, is essential to this balance. While renewable energy sources like solar and wind are vital to the country’s energy mix, they are also variable, depending on weather conditions. Baseload plants, particularly those powered by geothermal energy, offer a stable supply that can complement these renewable sources, ensuring that the country’s energy grid remains resilient.

There was also a call for policies that encourage investments in sustainable energy infrastructure, arguing that the government has a crucial role to play in creating an environment that is both conducive to investment and protective of consumer welfare. Incentives for renewable energy projects, streamlined regulatory processes, and support for the development of LNG infrastructure are just a few of the measures that could help attract the necessary investments.

Achieving energy security and sustainability requires collaboration across the entire energy ecosystem — from government policy makers and regulators to private sector companies and financial institutions. All stakeholders were urged to work together to create a future where clean, reliable, and affordable energy is available to all Filipinos.

The commitment of FPH and First Gen to lead the decarbonization of the country’s energy future is contained in their current mission: “to forge collaborative pathways towards a decarbonized and regenerative future.” By working together, the Philippines can build a more resilient and sustainable energy future — one that supports economic growth while protecting the environment for future generations.

In conclusion, financial executives and business leaders were encouraged to seize the opportunities that the transition to sustainable energy presents. Adapting to change and prioritizing long-term sustainability over short-term gains is crucial.

Mr. Puno’s speech was a rallying cry for business leaders to take bold steps toward a sustainable future. In a world where the consequences of inaction are increasingly dire, his call to action is both timely and essential. The path to a sustainable future is clear, and the time to act is now.

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

Augusto D. Bengzon is the CFO, chief compliance officer & Treasurer of Ayala Land, Inc., and the 2024 FINEX president.

Meg Ryan honored for achievement by Sarajevo Film Festival

August 23, 2024 | 12:01 am

SARAJEVO — Hollywood actor, film director and producer Meg Ryan was honored by the Sarajevo Film Festival with the Honorary Heart of Sarajevo for her contribution to the film industry late on Tuesday.

Ryan was one of four film authors who received the award, alongside US and Palestinian film directors Alexander Payne and Elia Suleiman, and US actor and producer John Turturro.

“It’s an award in recognition of outstanding contribution to the world of cinema, to her incredible talents,” festival director Jovan Marjanović said before handing Ryan a silver heart-shaped award.

Ryan symbolically presented a special screening of her 1998 hit romantic comedy You’ve Got Mail at an open-air cinema, the same place where it was first screened at the festival in 1999.

At the masterclass moderated by Oscar-winning Bosnian film director Danis Tanovic, Ryan talked about What Happens Later, her second feature that she directed, wrote, and co-starred with David Duchovny, which was also screened at the festival.

She said that she ventured into acting to pay for her journalism studies, and that she was an “untrained actress.”

“I had a beginner’s mind, which I see now as a very valuable thing, there is certain naivety, innocence that is important when you are an artist,” she said.

The Sarajevo Film Festival, a movie showcase spreading from Vienna to Istanbul, was created by a group of film enthusiasts towards the end of the Bosnian war 30 years ago. It will showcase 240 films in total this year. — Reuters

Philippines ranks 30^th most charitable country in the world

August 23, 2024 | 12:00 am

The Philippines climbed 68 notches to 30^th out of 142 countries in the 2024 edition of the World Giving Index (WGI) by Charities Aid Foundation. The country’s score improved by 13 points year on year to 47 points out of 100, the second-largest improvement after Greece. The Philippines’ score was even better than the global score of 40. The WGI ranks and scores a country by examining three aspects of giving behavior: helping a stranger, donating money, and volunteering time.

How PSEi member stocks performed — August 22, 2024

August 23, 2024 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Thursday, August 22, 2024.

Stocks rebound on hopes of September Fed cut

August 22, 2024 | 9:00 pm

PHILIPPINE STOCKS rebounded to hit a fresh four-month high on Thursday on growing expectations of a rate cut by the US Federal Reserve next month.

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.88% or 61.34 points to end at 6,961.96 on Thursday, while the broader all shares index went up by 0.68% or 25.35 points to close at 3,749.73.

Thursday’s close was the PSEi’s best finish in more than four months or since it ended at 6,979.81 on April 1.

“The local market bounced back this Thursday… Investors took cues from Wall Street’s rally overnight driven by the Federal Reserve’s July meeting minutes, which hinted at possible rate cuts by September,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Most Fed officials signaled that easing monetary policy would be appropriate if economic data meets expectations, raising hopes for lower interest rates soon. All eyes are now on Fed Chair Jerome H. Powell, who is set to speak at the Jackson Hole Economic Symposium on Friday, potentially offering further guidance on the Fed’s next steps,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The Fed appears to be very much on track for an interest rate cut in September after a “vast majority” of officials said such an action was likely, according to the minutes of the US central bank’s July 30-31 meeting, Reuters reported.

The minutes, which were released on Wednesday, even showed some policymakers would have been willing to reduce borrowing costs at last month’s gathering.

The policy-setting Federal Open Market Committee left its benchmark interest rate unchanged in the 5.25%-5.5% range on July 31, but opened the door to a cut at the Sept. 17-18 meeting.

Financial markets have been expecting the September meeting to kick off the Fed’s policy easing, with as much as a full percentage point worth of rate cuts expected by the end of this year.

Majority of sectoral indices closed higher. Financials rose by 2.52% or 52.17 points to 2,122.39; holding firms increased by 0.72% or 42.58 points to 5,883.84; services climbed by 0.71% or 15.92 points to 2,238.06; and industrials went up by 0.32% or 29.97 points to 9,237.94.

On the other hand, property declined by 0.67% or 18.30 points to 2,704.59; and mining and oil dropped by 0.06% or 5.17 points to 8,155.97.

Value turnover rose to P6.99 billion on Thursday with 653.22 million shares changing hands from the P5.14 billion with 863.73 million stocks traded on Wednesday.

Advancers beat decliners, 117 versus 80, while 43 names were unchanged.

Net foreign buying rose to P2.34 billion on Thursday from P565.27 million on Wednesday.

Philippine financial markets will be closed on Friday (Aug. 23) for a special nonworking holiday in observance of Ninoy Aquino Day, which was moved from the original Aug. 21 date. — R.M.D. Ochave with Reuters

Peso rises to new 4-month high as Fed minutes bolster cut bets

August 22, 2024 | 9:00 pm

THE PESO appreciated to another over four-month high against the dollar on Thursday as minutes of the US Federal Reserve’s July policy meeting cemented market expectations of a September rate cut in the world’s largest economy.

The local unit closed at P56.333 per dollar on Thursday, strengthening by 16.7 centavos from its P56.50 finish on Wednesday, Bankers Association of the Philippines data showed.

This was the peso’s best finish in more than four months or since its P56.315-a-dollar close on April 2.

The peso opened Thursday’s session at P56.333 against the dollar, which was also its closing level. It traded stronger than its Wednesday close the entire session as its weakest showing was at just P56.38, while its intraday best was at P56.28 versus the greenback.

Dollars traded inched up to $1.589 billion on Thursday from $1.588 billion on Wednesday.

The peso strengthened on the back of the dovish tone of the minutes of the Federal Open Market Committee’s (FOMC) July meeting, a trader said in a phone interview.

“The market still traded mostly sideways a while ago since they are awaiting the Jackson Hole Symposium,” the trader added.

“The peso followed most major Asian currencies up versus the dollar. There was selling interest for the pair as the dollar weakened after the FOMC minutes showed more support for rate cuts,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message. “Any dovish tilt post-Jackson Hole Symposium should also weigh on the dollar further and strengthen the peso.

Philippine financial markets will be closed on Friday (Aug. 23) for a special nonworking holiday in observance of Ninoy Aquino Day, which was moved from the original Aug. 21 date.

The Federal Reserve appears to be very much on track for an interest rate cut in September after a “vast majority” of officials said such an action was likely, according to the minutes of the US central bank’s July 30-31 meeting, Reuters reported.

The minutes, which were released on Wednesday, even showed some policy makers would have been willing to reduce borrowing costs at last month’s gathering.

The policy-setting Federal Open Market Committee left its benchmark interest rate unchanged in the 5.25%-5.5% range on July 31, but opened the door to a cut at the Sept. 17-18 meeting.

Financial markets have been expecting the September meeting to kick off the Fed’s policy easing, with as much as a full percentage point worth of rate cuts expected by the end of this year.

At the July meeting, most policy makers thought that “if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” the minutes said.

They also noted “many” Fed officials viewed the stance of rates to be restrictive and “a few participants” contended that amid an ongoing cooling in inflationary pressures, no change in rates would mean that monetary policy would increase the drag on economic activity.

While all Fed officials were on board with keeping rates steady in July, the minutes revealed that “several” policy makers said progress in lowering inflation amid a rise in joblessness “had provided a plausible case” for a quarter-percentage-point cut in July, “or that they could have supported such a decision” had it been on the table.

The minutes also showed that a dwindling camp of policy makers feared a premature easing in monetary policy could restart inflation.

With the Fed letting the data determine what happens with rates, central bank watchers are already contemplating the future scope of cuts and whether aggressive action is needed at the onset of the easing cycle.

Fed Chair Jerome H. Powell largely tipped off the likely outlook after the July policy meeting when he said “if we do get the data that we… hope we get, then a reduction in our policy rate could be on the table at the September meeting.”

Markets are likely to get an update of Mr. Powell’s views on Friday when he speaks at the Kansas City Fed’s annual research conference in Jackson Hole, Wyoming. A number of other Fed officials are also likely to weigh in on the outlook while attending the conference. — A.M.C. Sy with Reuters

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