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EastWest posts P1.7-B Q1 profit

EAST WEST Banking Corp. (EastWest Bank) booked a net income of P1.7 billion in the first quarter, spurred by consumer lending expansion and digital initiatives.

This translated to a return on equity of 10%, the lender said in a statement. It did not provide a financial statement and comparative figures.

EastWest Bank posted a net income of P1.6 billion in the first quarter of last year, based on an old statement separately sent by the bank.

Net interest income grew by 34% to P8.2 billion, it said.

“This growth is largely attributed to the bank’s strategic emphasis on refined consumer lending strategies, which enhanced its lending processes, accounting for 81% of total loans and contributing to a net interest margin of 8.1%,” EastWest Bank said.

Noninterest income increased by 9% to P1.8 billion, in line with banking transaction growth. Net revenue rose by 28% to P10 billion.

Meanwhile, operating expenses grew by 22% to P5.8 billion due to manpower and business-related expenses to expand the bank’s balance sheet as well as investments in technology, it said.

EastWest Bank shares went up by 2.16% or 20 centavos to close at P9.44 each. — Aaron Michael C. Sy

Crypto startups turbocharge valuations as investment picks up

MICHAEL FÖRTSCH-UNSPLASH

CRYPTO STARTUPS are putting valuations in the fast lane with an aggressive form of fundraising that reflects the digital-asset industry’s recovery as well as a desire among venture funds to put money to work.

This approach involves an open-ended, rolling fundraise that keeps the cash coming in and quickly lifts valuations, a contrast to the traditional venture-capital model of discrete rounds spaced over a number of years. An open-ended funding round rewards earlier investors as they benefit from a rapid uplift in a startup’s value, courtesy of commitments from later backers.

“When a deal is very oversubscribed, it’s becoming more common to see this type of structure,” said Michael Heinrich, co-founder of 0G Labs, a blockchain startup focused on the buzzy topic of decentralized artificial intelligence. “Investors are still willing to pay higher prices because it is seen as a signal of market success, even if in rapid succession.”

Last year, crypto outfits struggled to access capital after a deep bear market in 2022 that sparked an industrywide crisis. But companies and digital-asset prices have rebounded, highlighted by a doubling in Bitcoin’s value over the past 12 months. While a selloff in tokens in April highlighted the crypto sector’s inherent volatility, the overall backdrop is healthier than in the recent past.

0G Labs brought in $35 million in March — a substantial amount for a pre-seed stage — via a rolling fundraise. Mr. Heinrich said the company had been fielding investment offers that collectively exceeded its planned raise by 20 times.

Depending on the investor, 0G’s valuation ranged from less than $40 million to hundreds of millions of dollars, according to investment documents seen by Bloomberg News. People familiar with the matter also confirmed the range, while asking not to be identified as the information is private. Hack VC, OKX Ventures, GSR and Animoca Brands all participated in the round.

The average Series A round in crypto hit $26 million in the first quarter, the highest since the tail-end of the last crypto bull market in early 2022, data from The Block Research shows. Overall venture investment in the sector ticked up to $2.5 billion in January through March.

Mezo, a platform based on the Bitcoin network, recently used the rolling structure to raise capital, people familiar with the matter said, asking not to be identified as the information is private. Backers committed at valuations ranging from less than $50 million up to nine-figures, the people said.

“Capital formation in crypto is always evolving — governance, liquidity, and other important concepts that we’ve figured out in traditional startups are often a little different,” said Matt Luongo, chief executive at Thesis, which helped develop Mezo.

Crypto startups IO Research and Zeus Network also reportedly used rolling, open-ended fundraising. Neither replied to a request for comment.

Such funding structures are uncommon outside of the digital-asset industry, said Amy Wu, partner at Menlo Ventures. The situation reflects a supply-demand imbalance in part because crypto funds have a big pool of unspent cash raised in 2021 and 2022, according to Ray Hindi, head of crypto-investment firm L1 Digital.

“Disciplined investors won’t do it,” Mr. Hindi said.

The notion of fluid valuations would certainly be perplexing to veteran venture capitalists. Some surging web3 valuations are “riding on the recent crypto bull run; it’s hard to see the underlying fundamentals driving the upswing,” said Rajive Keshup, partner at Cathay Innovation.

Others argue the traditional approach to venture investing isn’t necessarily ideally suited to digital-asset companies.

Priced rounds with a single, large, lead investor, while typical in the wider venture space, are poorly suited to crypto startups that generally prefer “decentralized cap tables” to help with governance, said Ed Roman, managing partner at Hack VC. — Bloomberg News

Metro Pacific Health adds 10th hospital to Metro Manila network

METRO PACIFIC Health Corp. (MPH) has acquired a majority shareholding in UHBI-Parañaque Doctors Hospital, Inc. (PDH), marking the company’s 10th hospital in Metro Manila.

 PDH is a 94-bed Level 2 hospital in Parañaque City that caters to the barangays of Don Bosco, Sun Valley, and Moonwalk, as well as other high-density residential villages in the city, MPH said in a statement on Tuesday.

 The hospital sits on about 6,000 square meters of land. Its facilities include a new seven-storey building that can boost capacity to a total of 150 beds once activated.

 MPH’s transformation plan for PDH includes the full utilization of the new building, improvement of the patient flow and enhancement of patient experience through the rationalization of its ground floor, upgrade of hospital equipment, and improvement of clinic spaces.

“Parañaque City is a key market between Makati and Muntinlupa which MPH has been keen to have a presence in. We are grateful to be part of PDH, a hospital with a rich history and a strong pool of over 200 active doctors,” MPH President Augie Palisoc, Jr. said.

 PDH marks the 24th hospital under MPH’s nationwide portfolio of healthcare facilities. Its other hospitals include Asian Hospital and Medical Center, Cardinal Santos Medical Center, Manila Doctors Hospital, Davao Doctors Hospital, and Riverside Medical Center.

 MPH is the healthcare arm of Pangilinan-led conglomerate Metro Pacific Investments Corp. (MPIC).

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

Rice inflation eases in April

TWO COMMITTEES at the House of Representatives on Tuesday approved the proposed amendments to the Rice Tariffication Law of 2019. Read the full story.

 

Rice inflation eases in April

How PSEi member stocks performed — May 7, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, May 7, 2024.

PSEi declines as April inflation quickens to 3.8%

BW FILE PHOTO

PHILIPPINE SHARES declined on Tuesday as markets were weighed by inflation that quickened for the third straight time in April.

The benchmark Philippine Stock Exchange index (PSEi) shed 0.51% or 33.91 points to close at 6,618.58. The broader all-share index dropped by 0.3% or 10.76 points to 3,505.75.

Investors exercised caution as prices continued to pick up, nearing the upper end of the government’s 2-4% target, Mikhail Philippe Q. Plopenio, research officer at Philstocks Financial, Inc. said in a Viber message.

“Investors also traded cautiously while waiting for the Philippines’ first-quarter gross domestic product data set to be released later this week,” he added.

The local statistics agency said inflation accelerated to 3.8% in April from 3.7% in March on higher food and transport costs.

The local bourse dropped despite stronger US markets, Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

“In the US, equities rose for the third straight day following the weaker-than-expected nonfarm payroll employment data coupled with higher unemployment, fueling assumptions that the US Federal Reserve might need to cut rates soon with the overheating economy,” he said.

On the commodities side, gold prices gained on softer greenback and rate cut hopes, he pointed out.

Spot gold rose by 1.04% to $2,325 per ounce, while US gold futures increased by 1.13% to $2,334 per ounce.

Oil prices also advanced as investors assessed the Gaza cease-fire. Brent contract gained 0.45% to $83.33 per barrel, while West Texas Intermediate contract accelerated by 0.47% to $78.48 per barrel, he added.

Back home, the market’s sectoral indices were mixed. Property retreated by 2.65% or 64.52 points to 2,363.10, while financials shed 0.86% or 18.22 points to 2,077.43. Holding companies lost 0.49% or 30.09 points to 6,060.59.

On the other hand, mining and oil rose by 2.24% or 200.04 points to 9,100.91, while services gained 0.97% or 18.54 points to 1,928.88. The industrial index added 0.91% or 81.91 points to 9,057.04.

“The heavyweight SM Prime Holdings, Inc. led the index losers, adding to the market’s decline for Tuesday’s session,” Mr. Plopenio said. “Nickel Asia Corp. was at the top, climbing 4.49% to P4.19.”

Value turnover rose to P11.52 billion, with 7.9 billion shares traded compared with 491.98 million stocks worth P4.13 billion on Monday.

Decliners beat advancers 98 to 86, while 54 stocks were unchanged. Net foreign selling rose to P890.07 million from P279.75 million. — Revin Mikhael D. Ochave

Peso down on dollar purchases after Israel rejects ceasefire

BW FILE PHOTO

By Aaron Michael C. Sy, Reporter

THE PHILIPPINE peso weakened on Tuesday on safe-haven purchases of the dollar amid escalating tensions between Israel and Hamas.

It lost 0.1 centavo to close at P57.221 against the dollar, according to Bankers Association of the Philippines data posted on its website.

The peso opened at P57.27 against the dollar, strengthened to as much as P57.21 and weakened to as much as P57.29.

Dollars exchanged rose to $1.17 billion from $1.04 billion on Monday.

“The peso slightly weakened from a safe-haven reaction after reports that Israel had rejected a ceasefire deal with Hamas,” a trader said in an e-mail.

Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and pressed ahead with strikes in Rafah, while planning to continue negotiations on a deal, Reuters reported.

The developments in the seven-month-old war came as Israeli forces struck Rafah on Gaza’s southern edge from the air and ground and ordered residents to leave parts of the city, which has been a refuge for more than a million displaced Palestinians.

Hamas said in a statement that its chief, Ismail Haniyeh, informed Qatari and Egyptian mediators that the group had accepted their proposal for a ceasefire.

Israeli Prime Minister Benjamin Netanyahu’s office said later that the truce proposal fell short of Israel’s demands, but Israel would send a delegation to meet with negotiators to try to reach a deal.

Qatar’s Foreign Ministry said its delegation would head to Cairo on Tuesday to resume indirect negotiations between Israel and Hamas.

The peso was also dragged by a slight pickup in inflation, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

Inflation quickened for a third straight month to 3.8% in April from 3.7% in March. It was 6.6% a year ago.

April inflation was within the Bangko Sentral ng Pilipinas’ 3.5-4.3% forecast and below the 4.1% median estimate of 16 analysts in a BusinessWorld poll last week.

The trader expects the peso to recover on Wednesday due to optimism ahead of the report on first-quarter Philippine economic growth

The trader sees the peso moving between P57.05 and P57.30 a dollar, while Mr. Ricafort expects it to range from P57.10 to P57.30.

Flood control integration plan to make better use of excess water

PHILIPPINE STAR/ MICHAEL VARCAS

THE GOVERNMENT will implement an integrated water management program that will link the flood control system to serve the needs of irrigation, water supply, and power, officials said on Tuesday.

They added that remote island communities will get desalination plants to simplify the logistics of water provision.

The water management program hopes to leverage funding sources like the flood control budget of about P300 billion in 2024, Public Works Secretary Manuel M. Bonoan said at a Palace briefing following a meeting with President Ferdinand R. Marcos, Jr.

“We have to integrate our flood control management programs with the other sectors so that the water that we manage in the flood control system does not go to the sea directly,” he said.

“We have to conserve and utilize it for other purposes like for irrigation, water supply and power if necessary.”

In meetings at the Palace earlier in the day, Mr. Marcos cited the need to come up with a water resource masterplan amid pressures from El Niño as well as the anticipated shift to La Niña, which produces above-normal rainfall.

The President said the Public Works and Environment departments should explore foreign funding for water resource management programs.

At the same Palace briefing, Environment Undersecretary Primo David said the government will deploy modular desalination systems — each costing between P5 million and P8 million — to give small island communities access to clean water.

He said the government could finance this program through loans or a bond issue. An estimated 40 million Filipinos have no formal access to water.

The government is also considering foreign partnerships to execute the desalination plan, he added.

“We were looking for suppliers from Israel, the Netherlands, and Singapore,” he said. “I was pleasantly surprised that we have four companies that have the technical capability to implement these kinds of project.”

The Philippines still falls short of the targeted annual investment of P119 billion to achieve universal access to safe water and sanitation services by 2030, hitting only an average of P6 billion in investment annually in water infrastructure over the last five years, according to the Palace. — Kyle Aristophere T. Atienza

Poe: Water issues stem from inefficient regulation

PHILSTAR

INEFFICIENT regulation lies at the center of the Philippines’ water shortages, which could be addressed with the creation of an agency focused on managing water resources, Senator Mary Grace N. Poe-Llamanzares said on Tuesday.

“The root of our water crisis, however, is actually a crisis in regulation,” Senator told a Senate committee hearing legislation to establish the Department of Water Resources.

“The problem is not that we don’t have resources but that we do not effectively manage our resources.”

With more than 30 government agencies overseeing water-related programs, a centralized agency for water would result in a more streamlined approach to managing the resource, she added.

Senate Bill No. 2412, filed by Senator Ronald M. Dela Rosa in August, proposes to create the Department of Water Resource Management, which will be tasked with drafting a roadmap to address the Philippines’ water, sewage, and sanitation requirements.

The department will also set targets with other government agencies to improve management of the water supply, sewage, water-derived energy, the environment, and food security.

“Through this (measure), we shall create a Department of Water Resources that reflects the obligation to sustainably utilize our resources, the needs of our growing population, and our collective goal to ensure water security for all,” Mr. Dela Rosa said. — John Victor D. Ordoñez

Livestock output seen rising even as El Niño batters feed crops

REUTERS

THE Department of Agriculture (DA) said on Tuesday that it is expecting livestock production to rise this year even with El Niño putting pressure on animal feed production.

Agriculture Undersecretary Deogracias Victor B. Savellano told reporters that the DA is “positive” that production will increase because a number of programs are in place to address any possible challenges, providing growers with biologics, animal feed, and medicine.

Last year, livestock output rose 2.5%, against a 1.9% rise reported in 2022, according to the Philippine Statistics Authority (PSA).

Hog output is expected to grow (3.7%), as is that of goat (1.3%). Lower production is expected for cattle (-2.6%) and carabao -0.9%).

The DA has set a goal of growing livestock production by five times over the next five years, in a bid to minimize imports.

He added that the government will continue to extend aid to livestock growers.

Jonathan V. Sabiniano, program director for the National Livestock Program said El Niño has affected the production of animal feed.

The government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), has said that El Niño is currently weakening, though its effects are projected to be felt until August.

“(There is) changing climate and changing landscape… agricultural areas are now shrinking. We have less space now for livestock raising as well as decreasing soil fertility (for) feed and forage,” Mr. Sabiniano added.

As of April 30, agricultural damage from El Niño was estimated at P5.9 billion by the DA. Damage to corn, a major component of animal feed amounted to P1.76 billion, with total volume losses of 97,937 metric tons (MT).

Yellow corn, which makes up about 50% of animal feed, posted output growth of 2% to 2.08 million MT during the first quarter, according to the PSA. — Adrian H. Halili

‘Always-on,’ weather-independent nuclear plants seen making supply more reliable

PNRI.DOST.GOV.PH

THE Philippine Nuclear Research Institute (PNRI) said nuclear power will help make supply more reliable because plants will be producing electricity nearly constantly and be less influenced by weather.

“Kung dadamihan mo ang share ng nuclear, makakatulong siya (If you increase the share of nuclear, it will help)” in terms of reliability, PNRI Executive Director Carlo A. Arcilla said in a televised interview on Tuesday.

“When you operate a nuclear plant, it’s available 90% of the time and not dependent on the weather,” he said.

According to a proposed roadmap, the Department of Energy aims to introduce nuclear energy, with a target capacity of 1,200 megawatts by 2032.

“They are expensive to construct but a nuclear plant can last up to 80 years,” Mr. Arcilla said.

He said that renewables are “good” but suffer from intermittency with “15-30%” availability.

The Philippines’ main grids experienced red and yellow alerts in recent weeks as the operating margin was insufficient to meet the grid’s contingency requirements.

The National Grid Corp. of the Philippines (NGCP) said the Luzon grid was placed on red alert for five days and yellow alert for 11 days in April.

The grid operator raised red and yellow alerts over the Visayas grid for five and 10 days, respectively. The Mindanao grid was on yellow alert for two days.

In May so far, the NGCP declared yellow alerts on the Luzon grid for three days. — Sheldeen Joy Talavera

OPEC Fund to provide tech assistance for PHL right-of-way acquisition — DoF

REUTERS

THE PHILIPPINES has obtained a technical assistance commitment from the OPEC Fund for International Development (OPEC Fund) to help streamline right-of-way acquisition for major government infrastructure projects, the Department of Finance (DoF) said on Tuesday.

The agreement was sealed during a meeting between Finance Undersecretary Joven Z. Balbosa and OPEC Fund President Abdulhamid Alkhalifa on the sidelines of the World Bank-International Monetary Fund Spring Meetings in Washington, DC on April 18.

“The DoF has secured a commitment from the OPEC Fund for technical assistance to address right-of-way acquisition issues to support the smooth implementation of the administration’s big-ticket infrastructure projects,” the DoF said in a statement.

The OPEC Fund also showed interest in co-financing the Asian Development Bank’s (ADB) Public Financial Management Reform Program Subprogram 1.

The loan will support the Philippine Development Plan 2023-2028, and forms part of the ADB’s country partnership strategy for the Philippines for 2018 to 2023, which is focused on accelerating infrastructure and long-term investment, the DoF said.

“Subprogram 1 is aligned with the goals of the Paris Agreement because it will build a public financial management system conducive to catalyzing climate finance through public-private partnerships and improving climate resilience and readiness among local government units (LGUs),” it added.

The DoF and OPEC Fund also cited the need to execute the Framework Agreement of the Establishment of Private Sector Operations in a timely manner, which would allow the latter to work with the private sector in supporting small- and medium-sized enterprises.

The OPEC Fund provides financial aid from OPEC member countries to non-member countries.

Last year, the OPEC Fund provided the Philippines a $500,000 grant for the pilot phase of the government’s digital food voucher program, “Walang Gutom 2027.” This was conducted alongside the Department of Social Welfare and Development, the World Food Program, and the ADB.

“The OPEC Fund assured the DoF of its flexibility in supporting the Philippines’ needs, especially as it transitions to an upper-middle income country,” the department said.

Meanwhile, the National Economic and Development Authority (NEDA) backed the need to fast-track the approval process of the government’s infrastructure flagship projects (IFPs) to attract more private sector investors to drive job creation and growth. 

“The primary goal of (a recent Executive Order) is to minimize, if not eliminate, delays in the implementation of IFPs,” NEDA Secretary Arsenio M. Balisacan said in a statement.

“We are in a hurry to catch up with our neighbors in the region so the government must enable — not hinder — the timely completion of these projects,” he added.

Executive Order (EO) No. 59 streamlines requirements needed for the NEDA Board-approved list of IFPs, and requires National Government agencies (NGAs) and local government units (LGUs) to review their charters for any redundancies in implementing IFPs.

President Ferdinand R. Marcos, Jr. issued EO 59 last week.

“By streamlining the processing of IFPs, we are making it easier for implementing agencies and more attractive for our partners in the private sector to execute transformative infrastructure projects that would spur job creation for our people and enable us to sustain our economy’s rapid expansion,” Mr. Balisacan said.

NGAs must also set up a digital payment system and automate their respective databases to enable easier data sharing and avoid the duplication of documents.

LGUs should also establish one-stop shops for IFPs for applicants seeking to obtain licenses, permits, and other documents. They must also coordinate with the Department of Information and Communications Technology for the adoption of interoperable and ICT platforms, NEDA said. 

“The EO covers all NGAs, government-owned or -controlled corporations, and other government instrumentalities. It applies to LGUs involved in the issuance of licenses, clearances, permits, certifications, and authorizations that are required for projects included in the NEDA board-approved list of IFPs,” it said.

There are 185 infrastructure flagship projects in the pipeline, valued at P9.4 trillion, NEDA said.

The government’s infrastructure program for this year is pegged at P1.472 trillion, equivalent to 5.6% of gross domestic product, according to the Development Budget Coordination Committee. — Beatriz Marie D. Cruz

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