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BPI finalizes sale of its minority stake in Gokongwei-backed GoTyme Bank

The Philippine central bank is set to unwind the relief measure allowing banks to use loans to small businesses and large enterprises as alternative compliance with the reserve requirements. — REUTERS

BANK of the Philippine Islands (BPI) has finalized the sale of its shares in GoTyme Bank Corp. that it obtained after its merger with Robinsons Bank Corp. (RBC), it said on Tuesday.

The listed bank’s representatives on April 1 signed the deeds for absolute sale for the shares, BPI said in a disclosure to the local bourse on Tuesday.

BPI sold its stake in GoTyme Bank back to the digital lender’s existing majority and minority shareholders “to address any potential conflict of interest created by the significant overlap in and similarity of product offerings of GoTyme Bank and BPI,” it previously said.

The sale was approved by BPI’s board of directors in a meeting on March 20. Gokongwei-led JG Summit Capital Services Corp. and Tyme Group earlier said their board of directors also approved plans to buy out BPI’s minority stake in the digital lender.

Under the transaction, BPI sold 752,056,290 common shares in GoTyme Bank at P1.20 per share or P902.47 million in cash.

Broken down, 744,099,587 of common shares in GoTyme were sold to Gokongwei-led GoTyme Financial Pte. Ltd., while 7,956,703 common shares went to Giga Investment Holdings Pte. Ltd..

The shares sold by BPI represent 15% of the outstanding capital stock of GoTyme Bank.

GoTyme Bank is a partnership between the Gokongwei and Tyme groups. It is one of the six digital banks licensed by the Bangko Sentral ng Pilipinas to operate in the country.

The online lender began commercial operations in October 2022 and is targeting to grow its customer base to five million by the end of this year from about three million currently. It also expects to turn a profit within the next three years.

CYBER INSURANCE
Meanwhile, BPI said in a separate statement on Tuesday that it is offering personal cyber insurance to its debit card holders for protection against unauthorized transactions and lost cards.

“Ensuring the peace of mind of our valued BPI Debit Cardholders is our utmost priority with the introduction of Personal Cyber Insurance. This innovative offering provides enhanced security and protection for their daily transactions, underscoring our commitment to their financial well-being,” Unsecured Lending and Cards Product & Sales Head Jenelyn Z. Lacerna said.

The BPI MS Personal Cyber Insurance is available for a fee starting at P700 annually.

It covers e-commerce purchase protection, which reimburses customers for items bought online that are accidentally damaged, undelivered or come from fraudulent sellers.

The insurance also protects customers from unauthorized or fraudulent transactions made via lost cards for up to 12 hours prior to the report of the incident.

BPI MS Personal Cyber Insurance also protects customers from unauthorized third-party transfers.

BPI Debit cardholders can select from a range of coverage options, depending on their needs. Clients may also opt for recurring payments to automatically renew their coverage.

“The launch of BPI’s Personal Cyber Insurance signifies the bank’s unwavering commitment to ensuring the financial security and overall well-being of its clients amid the dynamic landscape of digital transactions,” the bank said.

“Building upon the robust security features already embedded within the BPI Debit Card, this innovative insurance offering serves to fortify and enhance the existing safeguards, providing an extra layer of protection against evolving cyberthreats,” it added.

BPI’s attributable net income rose by 61.13% year on year to P54.82 billion in 2023.

Its shares dropped by P1.10 or 0.93% to close at P117 apiece on Tuesday. — A.M.C. Sy

Royalty’s private struggles have public consequences

THE PRINCESS ROYAL — PA IMAGES VIA REUTERS CONNECT

THE PRINCESS ROYAL is getting some well-earned rest this week. The king’s sister, Anne, has been the hardest-working member of the House of Windsor, even before her sovereign sibling and then her nephew’s wife revealed they were dealing with cancer, which effectively put them (and the respective spouses tending to them) out of commission for the multitude of public appearances the royals put in around the UK and the world. Princess Anne is among the two handfuls of “working” royals whose efforts (and the accompanying logistics) are paid for by the king. The aim is what his late mother said was the need “to be seen to be believed” by their subjects.

After a seven-day post-Easter respite, however, the royal schedule for the rest of April is once again practically all Anne all the time. Her tireless service is what helped prompt Queen Elizabeth II to name her Princess Royal, a title bestowed on only six previous daughters of British monarchs.* Charles used to have a few more relatives to help do the job but he’s had to cut costs over security. Now, apparent feuds (the Sussexes), scandal (Andrew), and illness have further diminished the numbers. The staffing needs are so dire that British tabloids and other local media are suggesting that Harry and Meghan pitch in. Or Princesses Beatrice and Eugenie, even if they are the daughters of the disgraced Andrew.

Anne will get some assistance from Edward, the youngest of her brothers, and his wife Sophie (the Duke and Duchess of Edinburgh), and the Duke and Duchess of Gloucester (he’s a first cousin of the late queen). But that’s all the available hands for busy days that often involve multiple events in different parts of the country.

Does all this deliver any actual value? I believe it does. The most obvious benefits come from the show-the-flag voyages that radiate soft power, generate transnational goodwill and promote touristic interest in the remains of what was once an empire upon which the sun never set. Some of the royal drop-bys, however, often involve self-interest. Prince Edward, for example, often attends events that have to do with the dramatic arts. He once worked for Andrew Lloyd Weber’s Really Useful Theatre Company before founding his own shop, Ardent Productions.

Anne — who rode for the UK’s Olympic equestrian team — is the royal patron of several equine organizations. She breeds horses, as her mother did, at her low-key (in princely terms) mansion in the Cotswolds, Gatcombe House. Animals are a favorite cause. Her first assignment after the Easter break is likely to be a visit to a group that promotes the training and use of a breed of bird dog called the Clumber Spaniel; the society is celebrating its 40th anniversary and the Princess Royal is its president.

But there are also other kinds of visits. On March 27, just before her break, the Princess Royal was at Power Roll Ltd., a solar energy company in northern England that makes a lightweight “film” that can substitute for heavier photovoltaic solar panels. On the same day, she toured nearby Pragmatic Semiconductor, which is developing a technology for flexible integrated circuitry to substitute for silicon. Beyond visiting with the big-boned spaniels in April, Anne is down to open public park grounds that are part of the gigantic Tideway sewage project in London. She’s scheduled to check on the progress of a British navy ship being built in Scotland and, on the same day, visit a textile museum in Lancashire, more than 200 miles away, Later in the month, she’s expected at the Lord Mayor of London’s Big Curry Lunch charity fundraiser as well as a University of London graduation (she’s chancellor) and events for medical caregivers, cancer research, and transportation for the disabled.

At the Power Roll event, the engineers unveiled a wall plaque as a memorial to her visit. It’s not unusual. There are such inscriptions all over London: There’s one at the Barbican Arts Centre, set up by Elizabeth and her husband Philip to mark their visit (which took place on their silver wedding anniversary); there’s one at Southwark Bridge marking its opening by her grandfather and grandmother, King George V and Queen Mary; there’s one at Smithfield Market — which has been a major meat purveyor in London for eight centuries — to a visit by her mother Elizabeth, to mark its reconstruction after German bombs wrecked it in World War II.

As tedious as some of the visits can seem, they are all part of what ceremonial royalty can contribute to national identity — connecting the dots of history and society. That new navy ship in Scotland is the successor, in name, to a famous submarine lost in the world war. That textile museum? It’s in a town that was key to the industrial revolution that helped the British economy overtake the rest of the world.

Unlike political leaders, who come and go with elections, the Windsors have got genes in this game. They provide an intrinsic link to the country’s history. For all the royals’ faults — or perhaps even because of those gossipy peccadillos — they are the filament that threads the British present to the British past, at least as far back as 1066 when the Battle of Hastings brought William the Conqueror to the throne. The dynastic dioramas may not always be pretty or salubrious, but the family embodies a commonality — decked in elite fashion — that connects spaniel breeders to solar energy engineers to people digging an enormous sewer.

The Windsors are an anachronistic institution in the 21st century. While they provide sometimes salacious, sometimes inspiring domestic tableaux in this age of social media, they’re a mere subplot in the broader drama of contemporary British politics. However, their continual presence in small town ribbon-cuttings, dog shows, nerdy tech show-and-tells, and glittery galas helps to give the big mess of the country the sense of a story — and make Britain itself seen and believed.

On Easter Sunday, the king attended church services and did a more vigorous walkabout to greet well-wishers than expected. Still, it’s just part of what The Telegraph called “gentle steps” toward eventually returning to public events. No one expects that soon.

You’ll have to get back to work, Anne.

BLOOMBERG OPINION

 

*Princess Royal derives from Madame Royale, the French monarchy’s customary title for the eldest, unmarried daughter of the king.

Can domestic savings cover the country’s increasing investment needs?

The savings-investment gap (S-I) gap, the difference between gross domestic savings and gross capital formation, reflects a country’s ability to finance its overall investment needs. An S-I deficit happens when a country’s investment expenditures exceed its savings, leading a country to borrow to fund the gap. In 2023, the country’s savings rate — gross domestic savings as a share of gross domestic product (GDP) — reached 9.2% (P2.23 trillion) while the investment rate stood at 23.4% (P5.7 trillion) of GDP, resulting in a P3.47-trillion gap.

 

Can domestic savings cover the country’s increasing investment needs?

How PSEi member stocks performed — April 2, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, April 2, 2024.


Viber, Inflection unveil conversational AI chatbot to PHL users

Logo of Viber's Pi
Messaging platform Viber and AI studio Inflection unveiled on Monday its personal artificial intelligence (AI) chat service to its Filipino users.
The feature “Pi,” which stands for personal intelligence, allows Viber users to ask for advice, up-to-date information, or simply chat with it.
“By welcoming Pi on our platform, we are taking another important step in this journey – to introduce powerful and highly conversational AI assistants to millions of users for the first time in their lives,” Atanas Raykov, Rakuten Viber Vice President of Global Marketing & Growth, said in a press statement.
The AI-powered chatbot is said to function as a companion that helps users organize their thoughts and make plans such as trying to get healthier or acquiring a new skill.
Pi is powered by Inflection’s in-house-built Inflection-2.5 large language model, the company said. The tech startup secured $1.5 billion of funding from Microsoft, Nvidia, Bill Gates, and Google Chief Executive Officer Eric Schmidt.
Citing a survey by LinkedIn, where 70% of Filipinos are keen to learn about AI, Viber said that “the expansion of the AI capabilities on the platform has been an essential component of Viber’s evolution and growth during the past few years and this coincides with increasing interest in AI among Filipinos.”  – Aubrey Rose A. Inosante

PSE index drops on last-minute profit taking

PHILIPPINE STAR/KRIZ JOHN ROSALES

PHILIPPINE STOCKS retreated on Tuesday due to last-minute profit taking after the index hit the 7,000 level intraday for the first time in almost a month, and amid expectations that inflation picked up further in March.

The Philippine Stock Exchange index (PSEi) dropped by 0.27% or 19.38 points to end at 6,960.43 on Tuesday, while the broader all shares index fell by 0.26% or 9.69 points to close at 3,626.71.

“This Tuesday, the local market dropped by 19.38 points (-0.28%) to 6,960.43 due to last-minute profit taking,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

The PSEi opened Tuesday’s session at 7,016.93 and hit an intraday high of 7,070.72. This was the first time the main index rose to the 7,000 level since March 4, when it recorded a high of 7,021.04 during the session.

“Investors seemed to have priced in the likelihood that March inflation has accelerated and possibly even exceeded the government’s target range of 2% to 4%. This comes after the Bangko Sentral ng Pilipinas projected inflation to settle within 3.4% to 4.2%,” Mr. Plopenio said.

The Philippine Statistics Authority will release March inflation data on Friday.

“Adding to the woes was the slowdown of the local manufacturing sector’s expansion for March as seen in the S&P Global Philippines Manufacturing Purchasing Managers’ Index reading of 50.9, slower than February’s 51,” he added.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan added that Wall Street’s performance overnight also affected market sentiment.

US stocks edged lower on Monday, dragged down by investor worries over the timing of interest rate cuts by the US Federal Reserve after stronger-than-expected manufacturing data pushed Treasury yields higher, Reuters reported.

The Dow Jones Industrial Average fell 240.52 points or 0.6% to 39,566.85; the S&P 500 lost 10.58 points or 0.2% to 5,243.77; and the Nasdaq Composite gained 17.37 points or 0.11% to 16,396.83.

At home, sectoral indices were mixed. Financials retreated by 1.07% or 22.09 points to 2,042.83; holding firms went down by 0.85% or 55.91 points to 6,518.54; and property declined by 0.05% or 1.48 points to 2,847.66.

Meanwhile, services rose by 1.47% or 27.30 points to 1,883.33; mining and oil climbed by 0.4% or 32.48 points to 8,157.85; and industrials went up by 0.02% or 1.92 points to 9,053.22.

“Among the index members, Monde Nissin Corp. was at the top, climbing 5.82% to P11.28. San Miguel Corp. lost the most, dropping 3.99% to P103.40,” Mr. Plopenio said.

Value turnover rose to P6.54 billion on Tuesday with 715.07 million issues switching hands from the P5.49 billion with 1.19 billion shares traded on Monday.

Decliners outnumbered advancers, 105 versus 88, while 45 issues closed unchanged.

Net foreign buying climbed to P781.54 million on Tuesday from P464.45 million on Monday. — R.M.D. Ochave with Reuters

Peso weakens as strong US PMI data temper June Fed cut bets

BW FILE PHOTO

THE PESO dropped against the dollar on Tuesday after better-than-expected US manufacturing data pushed back rate cut expectations.

The local unit closed at P56.315 per dollar on Tuesday, weakening by six centavos from its P56.255 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s session weaker at P56.35 against the dollar. Its worst showing was at P56.41, while its intraday best was at P56.30 versus the greenback.

Dollars traded rose to $1.21 billion on Tuesday from $847.15 million on Monday.

“The peso weakened anew as the stronger-than-expected US manufacturing report pushed market views over the first US rate cut further into July,” a trader said in an e-mail.

The US manufacturing purchasing managers’ index (PMI) data also resulted in a generally stronger dollar on Tuesday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The US dollar hit its highest in almost five months on Tuesday as stronger-than-expected economic data caused investors to cut their bets on a June rate cut, boosting the currency, Reuters reported.

The dollar index rose to 105.1 on Tuesday, its highest level since Nov. 14, adding to sharp gains on Monday after US data unexpectedly showed the first expansion in manufacturing since September 2022. It last stood at 105, unchanged from Monday.

US manufacturing grew for the first time in 1-1/2 years in March as production rebounded sharply and new orders increased, but employment at factories remained subdued amid “sizable layoff activity” and prices for inputs pushed higher.

The survey from the Institute for Supply Management (ISM) on Monday suggested the sector, which has been battered by higher interest rates, was on the mend, though risks remain from rising raw material prices.

While the manufacturing rebound is a boost for the economy’s growth prospects, the rise in raw material prices suggested goods inflation could pick up in the months ahead. Goods deflation was the key driver of an inflation slowdown last year.

The ISM said its manufacturing PMI increased to 50.3 last month, the highest and first reading above 50 since September 2022, from 47.8 in February. The rebound ended 16 straight months of contraction in manufacturing, which accounts for 10.4% of the economy. That was the longest such stretch since the August 2000-January 2002 period.

A PMI reading above 50 indicates growth in the manufacturing sector. Economists polled by Reuters had forecast the PMI would rise to 48.4. The ISM and other factory surveys had grossly overstated the weakness in manufacturing, which has been constrained by higher borrowing costs.

Financial markets expect the Federal Reserve to start cutting rates in June after hiking its policy rate by 525 basis points since March 2022 to the current 5.25%-5.5% range.

The Fed will next meet on April 30 to May 1 to review policy.

For Wednesday, the trader said the peso could depreciate further due to a likely strong US job openings report.

The trader sees the peso moving between P56.20 and P56.45 per dollar on Wednesday, while Mr. Ricafort expects it to range from P56.20 to P56.40. — A.M.C. Sy with Reuters

Higher-level approvals ordered for protected-area ECC requests

CAPTAIN’S PEAK RESORT in Sagbayan, Bohol — SCREENGRAB FROM REN THE ADVENTURER

THE Department of Environment and Natural Resources (DENR) said on Tuesday that it suspended the processing of environmental compliance certificates (ECCs) for projects within protected areas, requiring such applications to undergo higher-level approvals.

According to a memorandum signed by Environment Secretary Maria Antonia Yulo-Loyzaga, “All pending and future ECC applications for projects within (protected areas) processed by the regional offices shall be submitted to the Environmental Management Bureau for final review and approval,” the DENR said.

It added that clearance from the Biodiversity Management Bureau would also be needed for projects.

ECCs for projects located in environmentally critical areas will also require the approval of the Secretary or an authorized representative.

The DENR has also ordered an inventory and review of all existing structures within protected areas.

It added that the DENR will evaluate such structures for compliance with environmental regulations and standards.

A “comprehensive review” of all ECCs issued for projects within protected areas will also be conducted by the agency.

Earlier, the DENR said that a resort located within the Chocolate Hills in Bohol had been operating without an ECC. The DENR issued the resort a notice of violation on Jan. 22 and ordered it temporarily closed.

In a 1997 Presidential proclamation, the Chocolate Hills were designated as a National Geological Monument and a Protected Landscape. — Adrian H. Halili

Philippine Feb. motor vehicle output up 20.1%

PHILIPPINE STAR/WALTER BOLLOZOS

THE motor vehicle industry’s output grew 20.1% in February, putting the Philippines among the strongest in the region, though motorcycle production slowed, according to a regional industry association.

The Asean Automotive Federation reported that the Philippines produced 11,608 motor vehicles in February, against a regional average of a 15.6% decline.

Leading the region in production growth was Myanmar, where output more than tripled to 153 units.

The third country posting growth during the month was Malaysia with 2.8% to 65,611 units.

Posting declines were Vietnam (-43.8%), Indonesia (-20%), and Thailand (-19.3%).

In the two months to February, Philippine motor vehicle output grew 20.9% to 22,379 units, the second-strongest growth in the region.

Philippine motor vehicle sales grew in February to 38,072 units, up 23.2%, also the second-strongest growth rate in the region behind Myanmar, which posted sales of 278 units during the month, from 120 a year earlier.

Sales declined in the region by 14.4% led by a 49.5% decline in car sales in Vietnam. Also posting sales declines were Thailand (-26.1%), Indonesia (-18.8%), Singapore (-7.4%), and Malaysia (-1.1%).

In the first two months, Philippine motor vehicle sales were up 19.4% at 72,132 units.

All countries in the region posted declines in motorcycle and scooter output in February. The region’s production fell 11.5% to 322,873 units.

In February, the Philippines posted a 9.5% decline in motorcycle production to 105,307 units.

The biggest decline was seen in Malaysia (-30.3% to 41,796 units).

Motorcycle and scooter production also decreased in Thailand and Indonesia by 6.6% and 3.9%, respectively.

In the first two months, the Philippines produced 208,666 motorcycles and scooters, representing a 13.1% decline from the same period last year. — Justine Irish D. Tabile

NWRB to rule on higher NCR water quota by middle of April

THE National Water Resources Board (NWRB) is considering raising the water allocation for Metro Manila by two cubic meters per second (cms), depending on water levels at Angat Dam.

Susan P. Abano, NWRB chief of policy and programs, said that the board is looking into increasing the water allocation for the Metropolitan Waterworks and Sewerage System (MWSS) from 48 cms to 50 cms if the water level of Angat Dam does not go below 195 meters.

“We may revert (the water allocation) to 50 (cms); we will again add two cms as long as water level in Angat does not go below 195 meters (as of) April 10,” Ms. Abano said in a radio interview on Tuesday.

Angat Dam is the main source of water for National Capital Region (NCR), accounting for about 90% of its potable water supply.

As of Tuesday morning, the water level in Angat Dam was 198.44 meters, down from 198.80 meters a day earlier, according to the government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration).

These levels remain above the dam’s minimum operating level of 180 meters.

The NCR March and early-April allocation had been 50 cms, later reduced to 48 cms between April 16 and 31.

“The MWSS may implement strategies like reducing pressure or closing outlets by 10 p.m. until 4 a.m. to augment water supply until the rainy season,” Ms. Abano said. — Sheldeen Joy Talavera

Import permits suspended for institutional buyers of galunggong, mackerel, bonito

BFAR.DA.GOV.PH

THE Department of Agriculture (DA) said it has stopped issuing import permits to institutional buyers of round scad (galunggong), mackerel, and bonito.

In Memorandum Order No. 14, the DA halted the release of sanitary and phytosanitary import clearances for fish imported for canning, processing, and for other uses by institutional buyers. The order specifically exempts mackerel for canning from the permit freeze.

The memorandum, signed by Agriculture Secretary Francisco P. Tiu Laurel, Jr., cited reports that such imports were being diverted towards public markets.

“The top commodities that are identified as prone to diversion are round scad, bonito, and mackerel,” the DA said.

Fisheries Administrative Order No. 195 (FAO 195) of 1999 authorizes institutional buyers to import frozen, chilled, or fresh fish for canning and processing.

The order was designed to reduce competition for the domestic catch sold in wet markets.

Volumes for imported mackerel are to be based on the VATable sales of the canned product during the prior year, plus an additional 10%.

The DA said fish imported under FAO 195 intended for canning need to follow labeling rules.

In 2022, the DA imposed a similar suspension after finding institutional imports of mackerel and galunggong were being diverted to wet markets. — Adrian H. Halili

Transport, construction yet to recover 2019 levels — WB

REUTERS

THE Philippine transportation, construction and real estate industries have yet to recover pre-pandemic levels of business, according to the World Bank (WB).

“The recovery has been uneven across sectors,” the bank said in its East Asia and Pacific (EAP) Economic Update.

“Output in transportation, accommodation and catering sectors in the Philippines and Thailand, and construction and real estate in Malaysia and the Philippines are still well below pre-pandemic levels,” it said.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said this year could mark a recovery for these industries if their growth trajectory is sustained. 

“We have to continue expanding the IT-BPO (information technology-business process outsourcing), semiconductor and tourism sectors. We have to broaden opportunities for foreign capital investments, such as private-led flagship infrastructure projects,” he said in a Viber chat.

The bank also noted that the information and communications technology, finance, and services sectors in the EAP are relatively strong, while the service sector is bound to recover due to pent up demand.

Manufacturing in the region surged following the coronavirus pandemic, but has recently slowed down.

However, the bank noted that the Philippines and Thailand were the two countries thought to have exceeded pre-pandemic levels in terms of output per capita by the end of 2023.

Among developing countries in the EAP, private investment as a share of GDP (gross domestic product) remains lower than pre-pandemic levels, the WB added. 

“Public investment generally supported economic activity during the pandemic and exceeded the pre-pandemic levels in terms of GDP share in Indonesia, the Philippines, Thailand, and Vietnam,” it added.

The World Bank projects economic growth for EAP at 4.5% this year and 4.3% for 2025. However, this is weaker than the region’s projected 5.1% GDP in 2023.

Meanwhile, the bank maintained its 2024 growth forecast for the Philippines at 5.8%, the strongest in Southeast Asia alongside Cambodia.

For 2025, the bank raised its GDP projection for the Philippines to 5.9%. — Beatriz Marie D. Cruz