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BankCom posts higher net earnings in 2023

BANKCOM.COM.PH

BANK of Commerce (BankCom) saw its net income rise by 55.67% last year amid higher revenues.

The San Miguel Corp. affiliate recorded a net profit of P2.802 billion in 2023, up from the P1.8 billion posted in the prior year, its financial statement showed. The lender noted this was its highest annual net income since 2008.

In the fourth quarter alone, BankCom’s net earnings more than doubled to P791.07 million from P311.58 million a year prior on higher revenues from its lending business, investment securities and fees from investment banking group deals.

The bank’s full-year performance translated to a return on equity and a return on assets of 9.52% and 1.25%, respectively.

BankCom’s net interest income rose by 24.16% to P8.3 billion from P6.682 billion on the back of higher earnings from loans and investment securities amid elevated yields.

Its net interest margin was at 4.28%, up from 3.73%.

BankCom’s gross revenues grew by 22.9% to P9.98 billion from P8.12 billion in 2022 on the back of higher service charges, fees, and commissions, and trading gains.

“These are on account of investment banking deals in 2023, which delivered substantial fees for the bank; the recovery of its trading and investment securities business, and a rise in gains coming from the foreclosure, and sale of properties and equipment and foreclosed assets,” BankCom said.

Other income stood at P1.68 billion, 17% higher than P1.43 billion a year prior.

Meanwhile, operating expenses increased by 10.41% to P6.24 billion in 2023 from P5.65 billion in 2022.

This brought its cost-to-income ratio to 0.62% last year, down from 0.68% in 2022.

The bank’s total loans and receivables went up by 4.26% to P109.57 billion from P105.09 billion, driven by corporate loans.

Its nonperforming loan (NPL) ratio stood at 1.54%, down from 2.10% a year prior. Meanwhile, NPL cover was at 93.21%, up from 89.05%.

The bank set aside provisions of P78.84 million in 2023, down 52.56% from P166.21 million in the previous year.

On the funding side, total deposits rose by 5.47% to P185.91 billion in 2023, driven by a 7% increase in current and savings account or CASA deposits to P164.24 billion.

The lender’s loan-to-deposit ratio was steady at 70%.

BankCom’s assets increased by 6.51% to P231.67 billion at end-2023.

Total capital rose by 10.06% to P30.85 billion. Its capital adequacy ratio and common equity Tier 1 ratio stood at 19.88% and 19.09%, respectively.

BankCom’s shares went down by 27 centavos or 4.16% to close at P6.22 apiece on Tuesday. — A.M.C. Sy

Globe Telecom, Inc. to hold 2024 Annual Meeting of Stockholders virtually on April 24

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How PSEi member stocks performed — March 19, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, March 19, 2024.


Philippines drops in Global Opportunity Index

The Philippines slipped five places to 91st place out of 130 countries in the 2024 edition of the Global Opportunity Index (GOI) by nonprofit think tank Milken Institute. The index assesses various factors such as economic, financial, institutional, and regulatory aspects to assess the country’s attractiveness to foreign investors. Among its peers in the East and Southeast Asian region, the country ranked third lowest.

 

Philippines drops in Global Opportunity Index

Stocks drop as market awaits Fed policy meeting

BW FILE PHOTO

PHILIPPINE SHARES slipped on Tuesday on last-minute profit taking and as investors were cautious ahead of the US Federal Reserve’s policy meeting.

The Philippine Stock Exchange index (PSEi) dropped by 0.07% or 4.86 points to close at 6,848.43 on Tuesday, while the broader all shares index retreated by 0.12% or 4.41 points to end at 3,566.48.

“This Tuesday, the local market dropped by 4.86 points (-0.07%) to 6,848.43 due to last-minute profit-taking,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“Investors seem to be cautious ahead of the Federal Reserve’s policy meeting given that the US producer price index (PPI) data last Friday was higher-than-expected. This resulted in a sideways movement of the market for Tuesday’s session,” he added.

The Fed is meeting to review 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 and maintain a hawkish tone as data released last week showed that inflation in the world’s largest economy remains sticky.

A report from the Labor department showed the PPI for final demand rose 0.6% in February after advancing 0.3% in January, Reuters reported. Economists had forecast the PPI would climb 0.3%.

In the 12 months through February, the PPI shot up 1.6% after advancing 1.0% in January. The report followed news that consumer prices increased strongly for a second straight month in February.

“Investors await guidance on monetary policy as the Federal Reserve starts its two-day meeting on Tuesday. Concerns arise from recent inflation reports, suggesting the central bank may signal prolonged higher interest rates,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Philippine shares softened ahead more economic data and the release of Nvidia’s inaugural AI (artificial intelligence) conference,” Mr. Limlingan added.

The majority of sectoral indices closed lower on Tuesday. Mining and oil declined by 1.31 points or 108.25 points to 8,111.38; holding firms went down by 1.16% or 76.12 points to 6,441.21; services retreated by 0.24% or 4.49 points to 1,808.91; and industrials inched down by 0.23% or 20.66 points to 8,832.92.

Meanwhile, property climbed by 1.73% or 47.99 points to 2,819.45, and financials rose by 0.21% or 4.36 points to 2,047.85.

“Among the index members, Converge ICT Solutions, Inc. was at the top, climbing 3.16% to P9.14. Bloomberry Resorts Corp. lost the most, dropping 8.7% to P10.50,” Mr. Plopenio said.

Value turnover declined to P5.79 billion on Tuesday with 897.73 million issues switching hands from the P6.3 billion with 2.21 billion shares traded on Monday.

Decliners beat advancers, 114 versus 84, while 48 names closed unchanged.

Net foreign buying stood at P244.88 million versus the P23.73 million in net selling seen on Monday. — Revin Mikhael D. Ochave with Reuters

Peso sinks as Bank of Japan exits negative-rate regime

BW FILE PHOTO

THE PESO sank against the dollar on Tuesday following the Bank of Japan’s (BoJ) move to exit its negative interest rate policy regime.

The local unit closed at P55.92 per dollar on Tuesday, weakening by 34 centavos from its P55.58 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s session weaker at P55.68 against the dollar. Its worst showing was at P55.95, while its intraday best was at P55.67 versus the greenback.

Dollars exchanged went up to $1.31 billion on Tuesday from $1.01 billion on Monday.

“The peso continued to weaken after the first policy rate hike from the Bank of Japan,” a trader said in an e-mail.

The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday, making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus, Reuters reported.

The shift makes Japan the last central bank to exit negative rates and ends an era in which policy makers around the world sought to prop up growth through cheap money and unconventional monetary tools.

In a widely expected decision, the BoJ ditched a policy put in place since 2016 that applied a 0.1% charge on some excess reserves financial institutions parked with the central bank.

The BoJ set the overnight call rate as its new policy rate and decided to guide it in a range of 0-0.1% partly by paying 0.1% interest on deposits at the central bank.

The central bank also abandoned yield curve control, a policy that had been in place since 2016 that capped long-term interest rates around zero.

The peso slumped against the dollar on Tuesday ahead of the Fed’s meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

The US central bank will hold a policy meeting on March 19-20. The Fed raised its target rate by 525 basis points from March 2022 to July 2023 to the 5.25-5.5% range.

For Wednesday, the trader said the peso could drop further amid hawkish Fed bets.

The trader sees the peso moving between P55.80 and P56.05 per dollar on Wednesday, while Mr. Ricafort expects it to trade from P55.90 to P56. — AMCS with Reuters

Blinken says US to defend Philippines vs armed attack in South China Sea

U.S. Secretary of State Antony Blinken shakes hands with Philippines' Secretary of Foreign Affairs Enrique Manalo, at the Sofitel Hotel in Manila, Philippines, March 19, 2024. — REUTERS/EVELYN HOCKSTEIN/POOL

By Kyle Aristophere T. Atienza, Reporter

US SECRETARY of State Antony Blinken on Tuesday said the United States stands by its “ironclad” commitments to defend the Philippines against an armed attack in the South China Sea.

“These waterways are critical to the Philippines, to its security, to its economy, but they’re also critical to the interests of the region, the United States and the world,” he said at a joint press conference in Manila with his Philippine counterpart Enrique Manalo.

Mr. Blinken said the 1951 Mutual Defense Treaty between the two nations extended to armed attacks on the Philippine armed forces, public vessels and aircraft, including those of its coast guard anywhere in the South China Sea.

He said defense ties with the Philippines were “extraordinary” and would only grow further, though Washington’s expanding alliances were not aimed at China. 

Mr. Blinken said China’s actions in the South China Sea had triggered a wider international reaction, and the United States was engaged in intense diplomacy to reaffirm international law.

“We have a shared concern about (China’s) actions that threaten our common vision for a free open Indo-Pacific, including in the South China Sea and in the Philippines exclusive economic zone (EEZ),” he said.

During a meeting with Philippine President Ferdinand R. Marcos, Jr. later in the day, Mr. Blinken said US-Philippine ties are “more than rock solid” and an “absolute priority” of the Biden administration.

“I think Secretary [Manalo] said it so well: Our relationship is [on a] hyperdrive,” he told the Philippine leader, based on a press pool video. “That is so true, we see it across every domain.”

Last year, Mr. Marcos succeeded in pushing Washington to clarify the extent of the security commitment.

Mr. Blinken also said economic ties with the Philippines would expand, offering to support Philippine manufacturing as US companies diversify their supply chains.

Last week, the US Commerce secretary visited the Philippines and said US companies had pledged more than $1 billion in investments in the country.

Philippine Foreign Affairs Secretary Enrique Manalo said the challenge ahead was how to sustain and further elevate relations with the US, which he thanked for its support over recent altercations with China in the South China Sea.

The meeting came as the White House said President Joseph R. Biden would host Japanese Prime Minister Fumio Kishida and Mr. Marcos at a summit in Washington on April 11 to discuss economic ties and issues in the Indo-Pacific region.

Mr. Blinken said that arrangement was “a very important platform” for peace. “(It) is not designed against anyone, but in service of realizing a common vision for the future to the benefit of people in all of our countries.”

Ties between the Philippines and China have soured amid repeated spats over disputed features in the Philippine’s exclusive economic zone, and Manila has accused China’s coast guard of a policy of aggression.

Beijing, which claims sovereignty over almost the entire South China Sea, has maintained Philippine vessels are intruding into its territory.

China’s Foreign ministry spokesperson Lin Jian said the United States had no right to interfere in disputes between Manila and Beijing, and China would take action to defend its territory.

“Military cooperation between the United States and the Philippines should not harm China’s sovereignty and maritime rights and interests in the South China Sea, let alone be used to prop up the Philippines’ illegal position,” she told a news briefing.

The dispute coincides with a key improvement in military ties between the Philippines and United States in the past year, with Manila nearly doubling the number of its bases accessible to US forces, including three new sites facing Taiwan.

Their annual military exercises have widened lately to include joint air and sea patrols over the South China Sea and close to Taiwan, which China has seen as provocations.

Mr. Blinken’s remarks “further increase the Philippines’ confidence that the US will be there to support its claims in the South China Sea,” Gary Ador Dionisio, dean of the De La Salle University – College of Saint Benilde School of Diplomacy and Governance, said in a Facebook Messenger chat.

The Philippines is now one of the most visited countries in Southeast Asia by top American officials, he pointed out.

‘REAL MOTIVE’
The US sees the Philippines as a possible source of inputs, especially in semiconductors, as it boosts its manufacturing base while reducing dependence on China, Randy P. Tuaño, dean of the Ateneo de Manila University School of Government, said via Messenger chat.

“They should explore areas of commercial cooperation that will not only serve the interests of both sides but will provide the Philippines with more options amidst China’s ability to weaponize economics,” Don Mclain Gill, who teaches international relations at De La Salle University, said via Messenger chat.

Mr. Blinken’s return to Manila after almost a year was met with protests near the presidential palace, with groups accusing the US of fanning conflicts in the world.

“Today, our so-called main ally is actively fanning proxy wars and conflicts in various parts of the world,” Raymond Palatino, secretary-general of Bagong Alyansang Makabayan, said in a Messenger chat.

“The country’s assertion of sovereignty in the West Philippine Sea against China’s aggression should not involve the opportunistic meddling of a former colonizer whose real motive is to preserve and expand its imperialist hegemony in the Asia-Pacific region,” he added.

Joseph P. Purugganan, convenor of Trade Justice Pilipinas, sees the April 11 summit as “further consolidation of the Biden administration’s efforts to strengthen alliances to advance US economic interests and to sidestep China’s.”

He said the US is highly vulnerable to China’s access and control over critical raw materials that are vital to its manufacturing ambitions.

“It has to build these alliances, secure critical mineral agreements and enter into partnerships in order to ensure that supply chains that are vital to its interests are not disrupted and it can maintain advantage in manufacturing goods such as electric vehicles,” he said via Messenger chat.

The White House said Mr. Marcos and Mr. Biden would meet separately to “review the historic momentum in US-Philippine relations and discuss efforts to expand cooperation on economic security, clean energy, people-to-people ties, and human rights and democracy.”

“The increased anxiety of Japan regarding China and the Philippines’ reorientation back to the US against Chinese interests is a ripe opportunity for American foreign policy, and Washington would definitely like to have both on board,” Hansley A. Juliano, a political science lecturer at the Ateneo, said via Messenger chat. — with Reuters

House body OK’s higher tax deductions for firms that hire senior citizens

PHILIPPINE STAR/MIGUEL DE GUZMAN

A HOUSE of Representatives committee on Tuesday agreed to increase to 25% from 15% the tax deductions for companies that hire senior citizens, despite objections from the Bureau of Internal Revenue (BIR).

During a ways and means committee hearing, congressmen said the government should increase the tax on gambling corporations to offset the estimated losses from the proposed tax incentives.

“Why don’t we focus on gambling and gaming corporations as a potential source of extended government revenue?” Party-list Rep. Erwin T. Tulfo told the hearing in mixed English and Filipino.

Aside from the tax deduction, the substitute House bill also seeks to waive the fees on police, National Bureau of Investigation, village and medical clearances for senior citizen jobseekers.

Seniors are also entitled to get birth and marriage certificates and proof of identification free of charge.

The government stands to forego P25.87 billion in yearly revenues because of the higher tax deductions, Donaldo M. Boo, chief tax specialist at the National Tax Research Center, told congressmen.

“The bureau respectfully objects as there is a possibility that our revenue-generating power will be eroded,” BIR lawyer Ron Mikhail Uy told the hearing.

He said the House should retain the 15% tax deduction. “Considering that there is already an existing 15% deduction, may we propose that we retain the original percentage?”

Albay Rep. Jose Maria Clemente S. Salceda said he estimates P3.4 billion in foregone revenue from the tax deductions, much lower than the BIR’s P26-billion estimate.

“The revenue estimates are excessive,” Mr. Salceda, who heads the committee, told BusinessWorld by telephone in Filipino.

The BIR earlier said retailers that plan to honor expanded discounts for senior citizens and persons with disabilities could not claim tax deductions under the law.

Agencies including the Trade department are drafting a joint administrative order increasing the discount entitlement for seniors who buy basic goods.

Under the Expanded Senior Citizens Act of 2010, stores may only claim discounts as tax deductions based on the cost of the goods sold or services rendered.

The law gives seniors a 20% discount and exemption from value-added tax on medicines, hospital fees, medical supplies, fares, hotel, lodging, restaurant meals, theater admissions and funeral services. They also get a 5% discount on water and electricity bills. — Kenneth Christiane L. Basilio

Senate urged to probe resorts within protected areas

THE CHOCOLATE Hills in Bohol. — BOHOL.GOV.PH

A PHILIPPINE senator on Tuesday filed a resolution seeking to investigate land use agreements involving the country’s protected areas amid reports of resorts being built within the Chocolate Hills in Bohol province and Mount Apo Natural Park in central Mindanao.

Senate Resolution 976, by Senator Cynthia A. Villar called on the Senate to look into illegal construction activities within protected environmental areas.

Ms. Villar asked the Senate to probe in aid of legislation the management practices, status of land use agreements and protection mechanisms within these areas.

She also cited the need to probe reports of illegal logging and quarrying in the Upper Marikina River Basin Protected Landscape, which she said could worsen flooding in Rizal and Marikina.

The Chocolate Hills and Mount Apo are United Nations Educational, Scientific and Cultural Organization world heritage sites.

Both are protected areas under the National Integrated Protected Areas Systems Act of 1992.

Last week, the Department of Environment and Natural Resources said it had ordered the closure of the resort within Chocolate Hills in September for operating without an environmental compliance certificate.

A video of the Captain’s Peak Resort, which is in the middle of the hills, went viral on social media last week, drawing flak from environmental groups and advocates.

On Monday, Senator Rafael T. Tulfo told the Senate plenary that mountaineering groups had reported several resorts operating within the Mount Apo National Reserve, citing the need to investigate why these were being allowed.

“It is deemed essential to examine the management practices… the adequacy or absence of protection mechanisms provided to each of the country’s protected areas,” Ms. Villar said in the resolution.

“[This is] to ensure that the original intentions and wise foresight in their establishment are not undermined, thereby securing a sustainable future for the present and future generations.”  John Victor D. Ordoñez

MWSS retains water allocation for Metro Manila

By Sheldeen Joy Talavera, Reporter

THE METROPOLITAN Waterworks and Sewerage System (MWSS) said on Tuesday that it is able to retain its water allocation of 50 cubic meters per second (cms) for Metro Manila from the National Water Resources Board (NWRB).

“Based on the information we received, [the water allocation] was not reduced. We are able to maintain 50 cms allocation for the month of April,” Patrick James Dizon, head of the MWSS Angat/Ipo operations management division, said in a televised briefing. “For now, we are thinking of implementing pressure management measures to manage the water we receive from the Angat Dam,” he added.

This is to reduce the losses in the system and the consumption of the customers. He noted, however, that the water concessionaires would implement pressure reduction during off-peak demand hours.

Angat Dam is the main source of water for Metro Manila, accounting for about 90% of the capital’s potable water.

In view of the recurrent El Niño climate pattern being experienced in the country, managing water in Angat Dam has become crucial for mitigating its impacts on agriculture and ensuring sufficient potable water supply for Metro Manila.

EL NIÑO DAMAGE HITS P1.75B
Agricultural damage spawned by severe droughts due to El Niño has already reached P1.75 billion, the Department of Agriculture (DA) reported on Tuesday.

The DA’s damage report stated rice as being the most affected crop at 64.40% with an amount running up to P1.13 billion. Damage to corn was valued at P317.86 million, while high-value crops absorbed a loss of P305.55 million. Livestock damage hit P59,600.

Estimated output losses from the 32,231 hectares that were impacted by the dry spell include 7,794 metric tons (MT) for high-value crops, 18,966 MT for corn, and 48,332 MT for palay.

“More than dwelling on the cost of damage, we are focusing more on how to assist the close to 30,000 farmers in different regions whose lands have been affected by drought. We assure them of our continued support as we try to mitigate the effects of El Niño on their livelihood and daily lives,” Presidential Communications Office Assistant Secretary Jose Maria M. Villarama II told BusinessWorld via Viber.

In response to these developments, the DA said it has distributed more than P379 million worth of assistance in financial, seeds, and fertilizers to farmers.

The DA-Bureau of Soils and Water Management (BSWM), in collaboration with relevant agencies like the Department of Science and Technology-Philippine Atmospheric Geophysical Astronomical Services Administration (DoST-PAGASA) and Department of National Defense-Philippine Air Force (DND-PAF), is conducting cloud seeding operations to ease water shortage, targeting agricultural areas in Southern Cagayan and Northern Isabela. As a result, light to moderate rainfall is experienced over these areas,” the DA added.

Meanwhile, 750 water augmentation pumps were installed by the National Irrigation Administration in five regions to ensure water source.

Concreting of irrigation canals also improved to 847.82 kilometers, helping more than 40,000 farmers nationwide. While desiltation of irrigation canals was done, improving the water flow of 3,167.95 kilometers of irrigation canals nationwide.

“While we are not discounting the fact that the agricultural damage caused by El Niño continues to rise, we believe that the preventive measures that have been put in place since last year have helped cushion the impact of the phenomenon on our farmlands,” Mr. Villarama added.

As of Tuesday morning, the water level in Angat Dam is at 201.23 meters, lower than the 201.03 meters seen the previous day. This was still above the dam’s minimum operating level of 180 meters.

The water level at the reservoir is going down an average of 17 centimeters since the start of the year.

“For now, we are not seeing if we will reach a minimum operating level of 180 meters based on the weather forecast of PAGASA,” Mr. Dizon said.

He added that there is an expected rainfall over the watersheds as the state weather bureau already issued its La Nińa Watch which showed a 55% chance of developing between April and June. — with a report from Chloe Mari A. Hufana

DTI, Google roll out scholarships

THE DEPARTMENT of Trade and Industry (DTI) will be rolling out Google Career Certificates (GCC) through 1,300 Negosyo Centers nationwide to help upskill owners of micro, small, and medium enterprises (MSMEs).

“Whether you are a micro, small, and medium enterprise, an owner or employee, or any individual who seeks a more significant job opportunity, today’s success requires 21st-century skills,” Trade Secretary Alfredo E. Pascual said in a statement on the department’s partnership with Google Philippines on Tuesday.

Google Philippines had already distributed over 40,000 GCC scholarship programs in the country for jobseekers, MSME employees, and entrepreneurs, among others.

This year, DTI and Google Philippines aim for more through DTI’s virtual campuses in 1,300 DTI Negosyo Centers located in the country’s 16 provincial regions.

“We already built a strong partnership with Google, and we are pleased that through our Negosyo Centers nationwide, we can leverage these online courses to reach more stakeholders across the country,” Mr. Pascual said.

The DTI said the partnership with Google Philippines was announced during the United States Trade and Investment Mission last week.

Through the partnership, DTI will offer the use of its Negosyo Centers to support the learners in completing the course and will nominate qualified recipients and distribute GCCs through Coursera, an open online course provider.

The DTI said it will be prioritizing MSME owners looking to digitalize their businesses and people from marginalized and underrepresented sectors such as women, out-of-school youth, persons with disabilities, and senior citizens, among others.

“We have invested actively in the country’s digital development. This includes digital skills training and digital infrastructure improvements,” said Sapna Chadna, vice president for Google Southeast Asia and South Asia Frontier.

He said that the company’s investment has helped boost the Philippine gross domestic product by $14 billion and created 93,000 jobs.

“These outcomes motivate us to further deepen our collaboration with the Philippines and our efforts as a partner in building a robust digital economy,” he added. — Justine Irish D. Tabile

Tech firm defends voting machines

THE SOUTH Korean technology firm that will supply election equipment for the 2025 national and local elections in the Philippines belied claims that its vote counting machines had been exposed for defects and electoral fraud in previous elections.

Facing Tuesday’s Senate hearing, Miru Systems Company, Ltd. Chief Executive Officer Chung Gin Bok said through interpreter Lee SL Kee Chan that his company’s vote counting machines did not malfunction during the 2018 Iraq elections.

“There were no defects or problems with the machines that were placed there (Iraq), or [with] any accounting or tallying results,” he said, adding that it was “the incumbent [who] was insistent with the manual recount.”

It was a response to Senator Ana Theresia N. Hontiveros-Baraquel, who raised concerns about Miru Systems’ performance as the election software provider in Iraq’s and the Democratic Republic of Congo’s polls.

In last year’s elections in Congo, Mr. Bok said only a few machines malfunctioned and a few logistics issues occurred.

The company won the P18-billion contract to be the Philippines’ electoral systems provider, the biggest deal ever bid out by the Commission on Elections (Comelec). — John Victor D. Ordoñez