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ADB provides $20-M revolving facility to Lhoopa for PHL housing project

LHOOPA

THE Asian Development Bank (ADB) and real estate investment firm Lhoopa, Inc. have signed an agreement of up to $20 million to finance housing in the Philippines, a portion of which will meet green-building standards.

In a statement on Monday, ADB Director General for Private Sector Operations Suzanne Gaboury said this would represent the bank’s first foray into private-sector housing in the Philippines.

The $20-million loan will help Lhoopa acquire, renovate, construct, and sell property estimated to cost an average of $15,000 (P850,000).

“This is ADB’s first private-sector housing project in the Philippines, and Lhoopa is a fitting partner as it caters to people who are often unable to adapt to the impacts of climate change. The project not only provides livable spaces for these communities, but also enhances their climate resilience,” Ms. Gaboury said in a statement.

At least 25% of the houses sold will hold an EDGE (Excellence in Design for Greater Efficiencies) certification, a green building standard developed by the International Finance Corp.

“This will also be ADB’s first infrastructure project to use a revolving credit facility, allowing Lhoopa to repay the loan and withdraw it again as needed, without having to reapply for financing. This innovative facility is well suited for small-scale companies that are experiencing rapid growth,” Ms. Gaboury added. 

Lhoopa seeks to build up to 4,000 houses yearly by 2025 and 8,000 by 2028.

“With the ADB facility, we will be able to provide thousands more of affordable homes to Filipino families,” Lhoopa Founder Marc-Olivier Caillot said. “Having such an esteemed institution by our side puts us on a global stage and will allow us to apply our technological solutions on a larger scale, thereby impacting more lives in the process.”

Lhoopa uses a proprietary digital platform that helps identify areas with potential demand. The platform also hopes to engage over 100 local small-scale contractors for renovation and construction and around 4,000 real estate agents to find potential buyers. — Beatriz Marie D. Cruz

OIC appointed to head National Food Authority

REUTERS

THE National Food Authority (NFA) Council has appointed a Department of Agriculture (DA) director as the agency’s officer in charge (OIC).

In a Facebook post, the NFA said that Larry del Rosario Lacson was granted the rank of deputy administrator on March 11 through Special Order No. 371 signed by DA Secretary Francisco P. Tiu Laurel, Jr.

Mr. Lacson is a DA director IV and is a former director of the Bureau of Plant and Industry and a senior vice-president of the Texicon Group of Companies.

“A graduate of BS Agriculture with masters and doctorate degrees in agronomy and crop science, Mr. Lacson is a sanitary and phytosanitary expert and a United Nations Food and Agriculture Organization-trained Phytosanitary Capacity Evaluation facilitator,” the NFA said. 

Dozens of NFA staff were suspended by the Office of the Ombudsman due to irregularities in the  disposition of rice held as reserves by the NFA.

The Ombudsman has so far lifted the suspension of at least 24 NFA employees out of the 141 suspended.

In a separate statement, Mr. Laurel said: “the NFA Council unanimously appointed Director Larry Lacson as OIC-administrator to make sure the  agency runs smoothly, especially during this harvest season.”

“The NFA is an integral part of our effort to ensure food security,” he added. — Justine Irish D. Tabile

Infra council measure wins approval from Senate panel

PHILIPPINE STAR/ RUSSELL PALMA

A SENATE BILL seeking to create a council that will put together a long-term infrastructure masterplan has been approved by the committees on economic affairs, public works, and finance.

In the committee report dated March 13 for Senate Bill No. 2605, or the proposed Masterplan for Infrastructure National Development Act, the Comprehensive Infrastructure Development Masterplan was to contain plans for digitalization, energy, agriculture-fisheries modernization, water resources, transportation and logistics with a 30-year time horizon.

“The state recognizes the vital role of an efficient and integrated infrastructure system in promoting job creation to drive inclusive economic growth and sustainable development,” according to a copy of the bill, which was sponsored by Senator Joseph Victor G. Ejercito.

The Masterplan for Infrastructure for National Development Council will be established to draft and execute the plan.

It is also tasked with maximizing public and private investment to boost economic activity.

The President will chair the council while the National Economic and Development Authority Secretary will serve as vice-chair.

Industry representatives from the energy, water, information and technology, agriculture-fisheries, transportation and logistics industries will also sit on the council.

The masterplan will be updated every 10 years or earlier to anticipate emerging technologies, emergencies, and other social trends.

“The state hereby adopts a policy to develop reforms in infrastructure planning to achieve higher economic growth trajectory and improve the quality of life of the Filipinos,” according to the measure. — John Victor D. Ordoñez

ERC pitches expanded regulatory powers to House committee

PROPOSED amendments to a law that privatized the power generation and distribution industries should also include an expansion of the industry regulator’s oversight functions, the Energy Regulatory Commission (ERC) told a House committee on Monday.

“The ERC needs changes to its structure and the authority given to it by Congress almost 25 years ago,” ERC Chairperson Monalisa C. Dimalanta told the committee, which is reviewing proposed amendments to EPIRA (the Electric Power Industry Reform Act).

The House Energy Committee was told that expanded ERC powers will help “protect consumers from the adverse effects of the changes to the industry today.”

“(This would) enable the agency to act more effectively…  in promoting greater competition as the way of achieving energy affordability,” Ms. Dimalanta said.

Ms. Dimalanta proposed that the ERC be given the direct authority to fine and penalize private energy corporations failing to adhere to the mandate of “lowering (power) rates.” The ERC should also be allowed to issue permits to power generation and distribution companies. 

Her proposal also included giving the ERC the ability to “undertake periodic restructuring and reorganization” to stay flexible, allowing it “to adjust accordingly when the need arises.”

The ERC also seeks to retain some portion of its income for agency improvements. “Limited fiscal autonomy (should be considered) to allow the commission to retain a portion of its income for activities such as capital outlay, training, and innovation initiatives,” Ms. Dimalanta added.

In response, a power consumer group welcomed the proposed amendments, saying that expanding ERC’s functions would empower consumers.

“The current limitations faced by regulatory bodies, such as the Energy Regulatory Commission make them inefficient,” Nic Satur, Jr., chief advocate officer of Partners for Affordable and Reliable Energy, told BusinessWorld in Facebook Messenger. “The ERC’s lack of sufficient quasi-judicial authority to effectively safeguard consumer interests (is undermined) because they are overpowered by courts.”

Mr. Satur said that courts often overturn the ERC’s rulings denying price increases by power companies.

“This leaves consumers powerless and at a loss,” he said. “Strengthening the ERC in these ways would ensure that it has the necessary tools to act decisively and protect consumers from unjust practices in the energy sector,” he added.

“Such authority would not only allow the ERC to make binding decisions in disputes between utilities and consumers but also enforce compliance with these decisions to prevent expensive electricity prices for consumers,” Mr. Satur said. — Kenneth Christiane L. Basilio

LANDBANK, Customs bureau in payments system partnership

PHILSTAR

LAND BANK of the Philippines (LANDBANK) has entered into a partnership with the Bureau of Customs (BoC) to simplify the bureau’s payments system.

Under the partnership, the BoC will use LANDBANK’s Link.BizPortal to facilitate online payments for both government and private entities, the bank said in a statement on Monday.

“We at LANDBANK hope that our digital solutions and our Link.Biz platform will be able to accelerate collections. So we are doing our part as well for the efficient collection of government dues, and we are very much looking forward to this partnership,” LANDBANK President and Chief Executive Officer Lynette V. Ortiz said.

The partnership will allow clients to pay their dues to the BoC online instead of having to visit LANDBANK branches.

The bank added that the partnership will enhance the operational efficiency of the BoC, reduce red tape, and improve overall service delivery. 

“Through LANDBANK’s Link.BizPortal, we are not only facilitating smoother transactions, but also fostering greater transparency and accountability. As we embark on this new chapter, let us continue to strive for greater efficiency in our operations,” Customs Commissioner Bienvenido Y. Rubio said.

Ms. Ortiz and Mr. Rubio signed the Memorandum of Agreement for the partnership on March 4.

The LANDBANK Link.BizPortal will add to the BoC’s existing payment systems, PAS6 and E2M, promising a more user-friendly online payment experience. 

LANDBANK added that the partnership supports the Adoption of Digital Payments for Government Disbursement and Collections, in line with Executive Order No. 170, and Republic Act No. 11032, or the Ease of Doing Business and Efficient Delivery of Government Services Act. — Aaron Michael C. Sy

MWSS applies to keep April water allocation unchanged at 50 cms

PHILIPPINE STAR/KRIZ JOHN ROSALES

THE Metropolitan Waterworks and Sewerage System (MWSS) is seeking to keep its April water allocation unchanged at 50 cubic meters per second (cms).

“We just reiterated it in our letter last Friday to maintain the 50 cms for April as the March has been maintained,” Patrick James Dizon, head of the MWSS Angat/Ipo operations management division, told reporters on Monday, referring to a request it sent to the National Water Resources Board.

“We laid out the impact in case (of) a reduction in our allocation,” he said.

He estimated that any reduction could result in water interruptions of less than 12 hours during the nighttime hours between 10 p.m. to 4 or 6 a.m.

Angat Dam is the primary water source for Metro Manila, providing approximately 90% of the capital’s potable water.

As of Monday morning, the water level in Angat Dam was 201.48 meters, down from the 201.70 reading the previous day.

These readings were below the normal high-water level of 212 meters.

Mr. Dizon said that the water level in the reservoir recedes 17-19 centimeters per day.

However, he projected stable water levels for the reservoir, citing forecasts by the government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration).

“I’m still confident on the refilling of our reservoir based on the forecast of PAGASA of rainfall coming May and June because they said that rainfall over our watersheds will go back to normal,” he said. — Sheldeen Joy Talavera

Siemens healthcare unit to explore training, innovation, digital systems ventures in PHL

SIEMENS-HEALTHINEERS.COM

A SIEMENS AG unit, Siemens Healthcare, Inc., has submitted letters of intent (LoIs) to the Department of Trade and Industry (DTI) outlining plans to develop a training center, an innovation hub, and to enter partnerships in digital healthcare.

In a statement, Siemens Healthcare said the plans were submitted to the DTI during the German-Philippine Business Forum in Berlin, which was attended by Philippine cabinet members and business leaders from both countries.

“Each of the three LoIs reinforces the commitment Siemens Healthcare has in becoming a valued partner to contribute to further developing and revolutionizing the Philippine healthcare sector,” the company said.

The first LoI aims to designate a partner hospital into a radiology training center.

“A comprehensive program will be developed to further improve healthcare quality, such as a curriculum on the various aspects of mammography screening, including anatomy, pathology, imaging techniques and interpretation, safety, and patient care,” Siemens Healthcare said.

Meanwhile, the second LoI focuses on the development of an innovation hub serving students, researchers, and working professionals, with the aim of creating “disruptive” initiatives that will improve healthcare.

The third LoI aims to explore digital partnerships in healthcare with the Department of Health to enhance the healthcare infrastructure through initiatives like eHealth, digital health, and AI (artificial intelligence) capacity-building and training. — Justine Irish D. Tabile

‘Nearshoring,’ policy action may be needed if Red Sea crisis worsens

REUTERS

A WORSENING Red Sea crisis could require the government to overhaul its import supply chain with “nearshoring” initiatives, while forcing it to respond to price increases with policy tools, Oxford Economics said.

“In the case the conflict in the Red Sea exacerbates rapidly and impacts transportation costs on a much more wide basis, the Philippines could see import prices rise, feeding through to domestic prices,” Economist Makoto Tsuchiya of Oxford Economics Japan said in an e-mail.

“In the short term, government will have to shore up efforts through monetary and fiscal policy to contain the damage from higher prices on firms and households, but high public debt and limited fiscal space could be an issue here,” he said.

Yemen’s Houthi rebels have attacked cargo ships and tankers, affecting shipping traffic through the Red Sea. The northern part of the Red Sea leads up to the Suez Canal and accounts for around 12% of global trade or 30% of global container traffic.

“In general, we think the impact of what’s happening in the Red Sea has disproportionate impacts on Europe compared to Asia, given about three times more containers are brought from Asia into Europe than the other way around,” Mr. Tsuchiya said.

Meanwhile, Pantheon Chief Emerging Asia Economist Miguel Chanco said the rate cut in the Philippines could be an outcome of the Red Sea conflict.

“For now, we’re only seeing the crisis as a risk to our forecasts, which see average inflation in the Philippines softening to 3.2% from 6.0% last year, allowing the BSP (Bangko Sentral ng Pilipinas), in our view, to eventually cut rates by 100 basis points in total this year,” Mr. Chanco said in an e-mail.

The central bank last month kept its key rate at 6.5% — the highest in nearly 17 years — for a third straight meeting. The BSP has raised policy rates by 450 basis points (bps) between May 2022 and October 2023 to tame inflation.

Headline inflation accelerated to 3.4% in February from 2.8% in January, mainly due to increasing food, transport, and oil costs.

Mr. Chanco said the Red Sea disruptions would have minimal impact on the Philippines’ economic growth, which relies more on domestic demand than external trade.

Last year, The Development Budget Coordination Committee (DBCC) narrowed its gross domestic product growth target range to 6.5-7.5% from 6.5-8% previously.

The economy grew 5.6% in 2023, falling short of the DBCC’s 6-7% goal for the year and slower than the 7.6% expansion in 2022. — Beatriz Marie D. Cruz

EU, PHL announce plans to start FTA negotiations

REUTERS

THE European Commission (EC) and the Philippines, represented by the Department of Trade and Industry (DTI), said on Monday that both sides have agreed to start formal negotiations for a free trade agreement (FTA) aimed at increasing bilateral trade by 6 billion euros.

At a briefing in Brussels, EC Executive Vice-President Valdis Dombrovskis said that the conditions are suitable for the parties to take trade relations to the next level.

“The European Union (EU) is the Philippines’ fourth (largest) trading partner, and the FTA is projected to increase trade by up to 6 billion euros,” Mr. Dombrovskis said.

He said that trade in goods between the EU and the Philippines totaled 18.4 billion euros in 2022.

Trade Secretary Alfredo E. Pascual said that the formal start of the negotiations, for which he gave no date, follows a comprehensive stock-taking exercise that Philippine and EU officials undertook from September to December 2023.

“This process helped identify mutual ambitions and resolve issues lingering from the last negotiation round in 2017, setting a constructive tone for our discussions going forward,” Mr. Pascual said.

He said that the Philippines is emerging as a prime destination for foreign investment especially in areas related to climate change and ESG initiatives.

“As the center of economic growth shifts to the vibrant Southeast Asian region, the Philippines stands as a crucial ally of the EU and we’re ready to engage in meaningful economic reforms to make this happen,” he added.

He said that the FTA is anticipated to significantly expand market access in goods, services, and investments, enhance commercial interactions, create valuable opportunities, and establish reciprocal rules. — Justine Irish D. Tabile

SEC issues guidelines for eAMEND Portal

You may have watched Dune: Part Two by now. The movie is set in the year 10191. Despite being set on the future, one thing that most viewers will notice is the lack of modern technology. There are no phones or computers, nor robots or AI. Based on the book series, there was a war that left society relying on thinking machines for most aspects of life, while the other believed that doing so was harmful to humanity. Relatively, the latter ideology prevails. I, personally, understand and agree that modernization and advancement in technology, when utilized correctly, greatly benefits our daily activities.

The Securities and Exchange Commission (SEC) recently issued SEC Memorandum Circular (MC) No. 3-2024, which discussed the guidelines for the use of the Electronic Application for Modification of Entity Data (eAMEND) Portal. Previously, when applying for amendments to the Articles of Incorporation (AoI) and/or By-Laws (BL), one had to manually accomplish the amendment forms and submit them together with the hard copies of the amended AoI and/or BL and other requirements. Applicants had to physically wait for their queue number to be called from a long line of applicants in the SEC office. The documents were physically reviewed by an examiner and the applicant had to wait for at least a week before receiving the approved amended AoI and/or BL. Under the SEC MC 3-2024, in pursuit of sustainable practices, streamlined and automated processes, the SEC allowed amendment applications through the eAMEND portal which eases the amendment application process.

COVERAGE AND APPLICABILITY
Currently, the circular is only applicable to registered and active partnerships and corporations. One of the major changes presented by MC 3-2024 is the issuance of a digital certificate.

A. Applications subject to issuance of the digital certificate

The circular presents the following applications for the amendment of the AoI and/or BL where a digital certificate is issued:

I. Articles of Incorporation:

a. Change in principal office address;

b. Increase or decrease in the number of board directors or trustees;

c. Fiscal year for One Person Corporations (OPC); or

d. Deletion and/or addition of new provisions in the existing AoI except those provisions on purposes, capitalization, and reclassification of share.

II. By-Laws

a. Date of annual meeting of the stockholders or members; or

b. Amendment of fiscal year.

B. Applications subject to regular processing through the eAMEND Portal

On the other hand, the following applications for amendment are subject to regular processing through the eAMEND portal:

a. Amendment of partnership;

b. Dissolution of partnership;

c. Amendment of AOI and BL other than those indicated above;

d. Application for conversion of OPC to an ordinary corporation and vice versa; or

e. Application for increase of capital stock for OPC via cash.

It should be noted that those not mentioned above do not cover the application via the eAMEND Portal. Hence, any other applications not covered above must be filed via the official electronic mail of the SEC.

DOCUMENTARY REQUIREMENTS
A. Applications subject to issuance of the digital certificate

The eAMEND Portal also streamlined the required documents for amendment of the AoI or BL. The applicant is to submit a system-generated/downloaded cover sheet, and system-generated/downloaded, signed, and notarized or apostilled/authenticated Amendment Form. In addition to these two documents, applicants will also have to upload their compliance with the Monitoring Clearance requirement and the certification and/or favorable endorsement of appropriate government agencies for covered entities, if applicable.

B. Applications subject to regular processing through the eAMEND Portal

The required documents can be checked on the Commission’s latest citizen’s charter.

APPROVAL AND ISSUANCE OF CERTIFICATE
A. Digital certification

The Digital Certificate of Filing of Amendment will automatically be issued via the eAMEND Portal upon payment of the amendment fees. Subject to post-evaluation / post-audit, the original Certificate of Filing of Amendment will be released upon submission of the hard copies of the application documents.

B. Original certification

For those applications that are covered by regular processing, the original certificate of amendment will be issued upon submission of the hard copies of the application documents and payment of the required fees. No digital certification is to be issued through the eAMEND Portal.

PURGING AND CANCELLATION OF APPLICATION
The circular also authorizes the SEC to purge applications on the following grounds:

a. Failure to complete the application and to upload the requirements within 60 calendar days from the creation of the eAMEND Portal account;

b. Failure to comply with SEC’s compliance order within 30 calendar days from receipt of the e-mail compliance notifications;

c. Failure to pay the required fees within 45 calendar days from the Payment Assessment Form date.

In addition, the SEC may motu propio cancel the application for non-submission of the three original sets of the application documents that have been approved via the portal within the 30 calendar days indicated in the digital certificate. This also covers any non-compliance of any lawful order of the SEC in case of incomplete documents or if there are inconsistencies between the uploaded documents with the submitted hard copies.

The circular further provides that the amendment forms which will form part of the AoI and/or BL and any changes thereof will be considered official and legally valid when presented to other government agencies. The circular took effect on Feb. 23.

Although there is no timeline for the SEC to process and issue the digital or original certificates, we expect that by adopting this eAMEND portal, the processing time can be significantly shortened.  Looking forward, we may hope that additional transactions will be included in the eAMEND Portal. 

The eAMEND Portal is a great technological modernization of our transactions with the SEC, which is a welcome development to all stakeholders. This is a big step in easing the system for submitting amendment documents as well as the SEC’s processing time.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Alexander M. Querido, Jr. is a manager from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Shares rise on remittance data, bargain hunting

PHILIPPINE STOCKS rebounded on Monday on higher cash remittances from overseas Filipino workers (OFWs) and as investors picked up bargains.

The benchmark Philippine Stock Exchange index (PSEi) climbed by 0.45% or 30.97 points to close at 6,853.29 on Monday, while the broader all shares index rose by 0.29% or 10.43 points to end at 3,570.89.

“After the steep decline last Friday, the local bourse went up by 30.97 points (0.45%) to 6,853.29 as investors sought bargains. The growth of overseas Filipinos’ cash remittances by 2.7% year on year in January, provided optimism as well,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

Data from the Bangko Sentral ng Pilipinas (BSP) showed cash remittances of OFWs coursed through banks increased by 2.7% to $2.836 billion in January from $2.762 billion in the same month last year.   

Month on month, the growth in cash remittances slowed to 2.7% from 3.8% in December. It was also the slowest pace of remittance growth since 2.6% posted in September.

The BSP expects OFW cash remittances to grow by 3% this year and next.

“Meanwhile, investors remained cautious ahead of the Federal Reserve meeting this week,” Ms. Alviar added.

The Fed will meet to discuss policy on March 19-20. Markets widely expect the US central bank to keep its target rate unchanged at 5.25-5.5% for a fifth straight meeting.

“Philippine investors brushed off the latest FTSE rebalancing last week as attention will focus on more US economic data. These include building permits, expected to come in at 1.5 million on Tuesday, and the interest rate announcement on Wednesday, with an anticipated rate of 5.5%,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The US Federal Reserve is likely to maintain the current interest rates, but there’s speculation about potential rate cuts starting in the second quarter of the year,” he added.

Back home, majority of sectoral indices closed higher, led by financials, which went up by 2.95% or 58.62 points to 2,043.49. Property increased by 0.63% or 17.51 points to 2,771.46; mining and oil went up by 0.27% or 22.45 points to 8,219.63; and industrials climbed by 0.12% or 11.39 points to 8,853.58.

Meanwhile, services declined by 1.05% or 19.33 points to 1,813.40 and holding firms fell by 0.4% or 26.21 points to 6,517.33.

“Among the index members, Metropolitan Bank & Trust Company gained the most by 6.83%, while LT Group, Inc. plunged the most by 6.31%,” Ms. Alviar said.

Value turnover fell to P6.3 billion on Monday with 2.21 billion issues switching hands from the P20.08 billion with 1.59 billion shares seen on Friday.

Advancers beat decliners, 101 against 97, while 39 names closed unchanged. Net foreign selling declined to P23.73 million on Monday from P4.3 billion on Friday. — R.M.D. Ochave

Peso weakens against the dollar as market awaits Fed policy meeting

THE PESO depreciated against the dollar on Monday amid hawkish expectations ahead of the US Federal Reserve’s policy meeting this week.

The local unit closed at P55.58 per dollar on Monday, weakening by five centavos from its P55.53 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened Monday’s session weaker at P55.65 against the dollar. It dropped to as low as P55.70, while its intraday best was at P55.515 versus the greenback.

Dollars exchanged declined to $1.01 billion on Monday from $1.2 billion on Friday.

“The peso depreciated due to hawkish expectations prior to the US Federal Reserve policy meeting this week,” a trader said in an e-mail.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the Fed may adopt a hawkish tone following faster-than-expected US consumer and producer inflation last month.

The US central bank will meet to discuss policy on March 19-20.

The Fed held its target rate steady at the 5.25-5.5% range for a fourth straight time during its meeting in January. It raised borrowing costs by 525 basis points from March 2022 to July 2023.

The peso was also dragged down by a generally stronger dollar on Monday and higher global crude prices recently, Mr. Ricafort added.

For Tuesday, the trader said the peso could rebound against the dollar amid expectations of a rate hike by the Bank of Japan.

The trader sees the peso moving between P55.45 and P55.70 per dollar on Tuesday, while Mr. Ricafort expects it to range from P55.50 to P55.70. — A.M.C. Sy

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