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DENR in talks with Israeli company for water project

BW FILE PHOTO

THE Department of Environment and Natural Resources (DENR) said it is in talks with an Israel-based company for a water supply project intended for 65 areas in the Philippines.

“One of the projects that we are looking at, and I am now speaking to an Israeli company, is to solve the water supply problem of 65 island barangays,” Environment Undersecretary Carlos Primo C. David said during a media roundtable on Tuesday.

“These are small barangays, mostly fisherfolk… We’ve identified that their only source of freshwater is rainfall. During the rainy season, they collect it, and they use it for bathing, for drinking water and all other purposes,” he added.

Some of the 65 island barangays identified are located in northern Bohol, Sulu Sea, Pangasinan, and Tawi-Tawi.

“So far, the only technology that I think will work is desalination…, which is getting sea water and converting it into freshwater is very expensive,” Mr. David said.

The estimated cost for the project would be around P6-8 million per barangay. The project would allow consumers to purchase potable water at P10 per 20 liters, which typically cost around P30.

“The challenge is, can we have the same technology, downscale it just for a barangay, and also minimize the cost, so that they can still be affordable?” Mr. David said.

Mr. David has said that an estimated investment of P250 billion is needed to provide water to 40% of the country’s population that do not have access to a formal water supply.

“This is up to the Philippine government to identify where they believe that Israel can have added value to the Philippines, either through government-to-government collaboration or through private sector-to-private sector collaborations,” Israel Ambassador Ilan Fluss said. — Sheldeen Joy Talavera

Gov’t makes full award of T-bonds at higher yields

RJ JOQUICO-UNSPLASH

THE GOVERNMENT made a full award of the reissued Treasury bonds (T-bonds) it offered on Tuesday, even as rates rose amid market expectations of quicker March inflation.

The Bureau of the Treasury (BTr) raised P30 billion as planned via the reissued seven-year bonds it offered on Tuesday as total bids reached P40.247 billion, above the amount on the auction block.

The bonds, which have a remaining life of six years and nine months, were awarded at an average rate of 6.299%, with accepted yields ranging from 6.2% to 6.35%.

The average rate of the reissued bonds went up by 2.9 basis points (bps) from the 6.27% quoted for the papers when they were last offered on March 5 and 17.4 bps above the 6.125% coupon for the issue.

This was also 7.9 bps higher than the 6.22% seen for the same bond series and 6 bps above the 6.239% quoted for the seven-year tenor at the secondary market on Tuesday before the auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

The average rate of the T-bonds rose amid expectations that headline inflation accelerated further last month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The higher awarded T-bond rates today reflected market anticipations of an uptick in domestic headline inflation for March,” a trader likewise said in an e-mail on Tuesday.

Headline inflation likely picked up in March amid higher food, utility, and fuel prices, analysts said.

A BusinessWorld poll of 17 analysts conducted last week yielded a median estimate of 3.8% for March headline inflation.

If realized, this would be faster than the 3.4% print in February, but slower than the 7.6% rate recorded in the same month a year ago.

The consumer price index (CPI) would also be within the Bangko Sentral ng Pilipinas’ (BSP) 3.4%-4.3% estimate for the month.

This would mark the second straight month that inflation picked up on a monthly basis and the fourth straight month that the CPI was within the BSP’s 2-4% annual target.

The government will release March CPI data on Friday.

The BTr is looking to raise P195 billion from the domestic market this month, or P75 billion from Treasury bills and P120 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year. — A.M.C. Sy

Fertility startups in Japan thrive on high demand

OUR TEAM-FREEPIK

A SMALL NUMBER of startups are stepping up to address infertility issues in Japan, where shortages of treatment options plague patients in a country grappling with one of the world’s lowest birth rates.

Yukiko Nakai, one such entrepreneur, spent hours in packed infertility clinics, counting the inefficiencies that exacerbated already long wait times. She soon ran out of her vacation days at work. Her take-home salary fell, while her out-of-pocket medical bills climbed to around ¥10 million ($66,000).

“I was so frustrated, and that feeling was made worse by the uncertainty about whether the treatment would succeed,” said Ms. Nakai, who had always dreamed of a large family. After leaving her managerial role at Yahoo Japan, she founded Arch in 2021, an app developer that helps women’s clinics cut patients’ wait times through digitalization. “The knowledge that you can never regain each moment that passes adds to the stress.”

Demand for infertility treatment is high in Japan, where the number of live births fell for eight straight years to another record low last year. One in 4.4 couples in Japan has undergone tests or treatment for infertility, and the number of babies resulting from assisted reproductive technologies such as in vitro fertilization stood at one in 11.6 in 2021. The country is home to the world’s second-highest number of assisted reproductive technology cycles after China, according to the International Committee for Monitoring Assisted Reproductive Technologies.

Next week marks two years since Japan expanded public health insurance coverage to include a small number of infertility treatments. That stamp of approval is spurring even more demand and causing chronic shortages in hormonal drugs such as Duphaston, Provera and Norluten, according to the Japan Society of Obstetrics and Gynecology.

It’s also propelling bigger sums of money into startups that until recently struggled to grab the attention of venture capital funds.

Tokyo-based Varinos raised ¥600 million in a Series C funding round in 2022, lifting the total amount raised to ¥1.1 billion. Founder Yoshiyuki Sakuraba, who once worked at US gene-sequencing firm Illumina, Inc., previously had little success sparking investor interest in a startup that focuses on the uterine bacterial microbiome for clues for successful births.

Instead, he received financing from his network within the medical community to build a laboratory equipped with genome analyzers, each costing tens of millions of yen, and reagents costing several hundred thousands of yen per test. 

“I didn’t even know how to prepare a pitch deck,” Mr. Sakuraba said, noting that only a tiny number of Japanese startups seek to combine business with genomic research, even though the overall level of research is high. “At first, none of the VCs I approached were interested.”

Backed by 19 studies that link endometrial microbes with IVF outcomes, Varinos now offers tests and in some cases supplements at 350 medical institutions nationwide. The company has overseen more than 30,000 tests, whose out-of-pocket costs come to around ¥50,000 each.

With those funds in hand, Varinos plans to expand overseas, where its rivals include startups like Spain’s Igenomix SL.

Momentum is growing throughout Japan’s femtech arena, which market research firm Yano Research Institute estimates to have grown to ¥74 billion in 2023, almost 30% more than what it was four years earlier.

“Fertility is one of the most urgent issues Japan faces, and we expect this will be addressed by new technologies and policies,” said Tomotaka Goji, chief executive officer of University of Tokyo Edge Capital Partners, an investor in Arch.

The potential payout is high. Some 43% of female infertility patients in Japan are over 40, compared with 29.4% in Italy and 22.2% in the US, according to Japan’s Health, Labour and Welfare Ministry. That leads to lower success rates, but also bigger demand and spending power.

“By seeing a fertility doctor in one’s early 30s, patients can start treatment years earlier,” said Ms. Nakai, the founder of Arch. “It’s important to raise awareness early.”

The expansion of insurance coverage to include infertility treatments may mean a further increase in patients, said Shimon Kazama, a consultant at Mizuho Research & Technologies. The government’s stance raises public awareness and made it socially acceptable to receive such care, and efforts encouraging younger men and women to seek help may accelerate, he said.

Hurdles remain for tech startups focusing on infertility treatments, however. There’s a dearth of go-betweens to coordinate communication between medical professionals and startups, according to Mr. Kazama.

Ms. Nakai spoke to about 100 doctors before she could find a partner who was open to digitalization. In 2022, Arch-affiliated Torch Clinic opened in Tokyo, featuring an app that helps doctors and patients access medical records, leading to shorter consultations and wait times.

Also necessary is more backing from corporations for women who undergo infertility treatment, which can take months, if not years. Over one-third of women the health ministry surveyed in 2017 left or changed their employment status due to difficulties in balancing treatment and work.

“My experience was so painful,” Ms. Nakai said. “There is so much we can do to increase the options for patients.” — Bloomberg News

US artist Richard Serra, known for enormous steel sculptures, 85

AMERICAN artist Richard Serra, whose enormous steel sculptures coated with a fine patina of rust decorated landscapes and dominated oversized galleries in the world’s finest museums, died on Tuesday, March 26, the New York Times reported. He was 85.

The artist died at his home on New York’s Long Island of pneumonia, the Times reported, citing his lawyer, John Silberman.

Born in San Francisco in 1938 to a Spanish father and Russian mother, Mr. Serra grew up visiting marine shipyards where his father worked and also labored in steel mills to support himself in his youth, according to his San Francisco Museum of Modern Art and Guggenheim Museum biographies.

Despite the large scale of his works, artistically he was considered a minimalist, letting the dimensions of his art relative to the viewer, rather than elaborate imagery, make its point.

After studying at the University of California, Berkeley, and Yale University, he moved to New York in 1966 where he began making art from industrial materials such as metal, fiberglass, and rubber.

Though he would later become quite popular, one of his 1981 works was so poorly received that it was removed from public view in Lower Manhattan, ARTnews said.

Tilted Arc, a 120-foot (36-meter) bar of steel, is today “remembered as one of the most reviled works of public art in the city’s history. It was ultimately taken away because people hated it so much,” ARTnews said.

He made a breakthrough in 1969 when he was included in Nine Young Artists: Theodoron Awards at New York’s Solomon R. Guggenheim Museum.

After traveling to Spain to study Mozarabic architecture in the early 1980s, his work gained renown in Europe and with solo exhibitions at major museums in Germany and France.

Mr. Serra’s work was especially appreciated in his father’s native Spain, where the Reina Sofia museum offered a 1992 retrospective of his work and he had an exhibit dedicated exclusively to his work at the Frank Gehry-designed Guggenheim museum in Bilbao.

A 2002 New Yorker magazine profile entitled “Man of Steel” described him as a “stocky, powerful-looking man with a large head, a fringe of close-cropped gray hair, and black eyes whose intense stare reminds you of Picasso’s.”

That same piece told of Serra’s self-realization that he was not a painter, after seeing Diego Velazquez’s 1656 work Las Meninas in the Prado Museum in Madrid.

“It pretty much stopped me,” Mr. Serra said. “Cezanne hadn’t stopped me, de Kooning and Pollack hadn’t stopped me, but Velazquez seemed like a bigger thing to deal with. That sort of nailed the coffin on painting for me.” — Reuters

MacroAsia says income hits P851.14 million

HIGH revenues lifted MacroAsia Corp.’s attributable net income last year to P851.14 million, almost double its earnings in 2022, the listed aviation-support provider said on Tuesday.

“This performance is driven by the strong rebound of the company’s core aviation services units, amply supported by its business units that rapidly grew with non-aviation related revenue sources,” MacroAsia told the stock exchange.

With the improvement logged last year, the company expects to continue this upward trajectory in 2024.

“The momentum of growing MAC’s top line and bottom line continues in 2024 as the Company banks on the inroads it has made to penetrate new markets as part of its initiatives during the difficult pandemic period while coping with the robust return of aviation travel in the key airports where the Company operates,” it said.

The company’s net income attributable to parent equity holders reached P851.14 million last year, significantly higher than P446.08 million in 2022.

Its gross revenue for the period hit P8 billion, 63.9% higher than P4.88 billion in the previous year.

Broken down, in-flight and other catering boosted its overall revenues at P3.98 billion, up by 73.8% from P2.29 billion in 2022; followed by ground handling and aviation revenues at P3.14 billion, rising by 53.2% from P2.05 billion previously.

Water distribution revenues climbed by 19.9% to P617.5 million from P515 million; connectivity and technology services revenues hit P215.6 million; and administrative fees revenues went up by 53.3% to P46.6 million from P30.4 million in 2022.

“The momentum for top line growth was driven by the Group’s strategy to diversify especially during the pandemic period when airports were constrained by passenger mobility and flight restrictions,” it said.

MacroAsia’s gross expense for 2023 was recorded at P7.34 billion, a 54.2% increase than P4.76 billion in 2022.

Lufthansa Technik Philippines, the company’s aircraft maintenance, repair, and overhaul associate, generated a net income share of P562.14 million to the company, which it said was higher by P62 million from its share in 2022.

At the local bourse on Tuesday, shares in the company gained P31 or 7.85% to end at P4.26 apiece. — Ashley Erika O. Jose

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