Remolona wants further RRR cuts

August 22, 2023 | 12:33 am

THE BANGKO SENTRAL ng Pilipinas (BSP) intends to further reduce the amount of cash that banks must have in reserve, but analysts said it may have to wait until inflation returns to the 2-4% target band first before adjusting the reserve requirement ratio (RRR).

BSP Governor Eli M. Remolona, Jr. has said the Monetary Board still plans to lower the banks’ RRR but is unsure when it will be implemented.

“I don’t think it makes sense to lower the reserve requirement while we’re still in the tightening mode. They are not consistent,” he said at a briefing after the Monetary Board’s policy-setting meeting on Aug. 17. “One is about inflation and the other one is more about the efficiency of the banking system.”

Last week, the Monetary Board extended its hawkish policy pause for a third straight meeting, keeping the key interest rate at 6.25% — the highest in nearly 16 years.

The BSP has raised borrowing costs by 425 basis points (bps) from May 2022 to March 2023 to tame inflation.

Adjusting the reserve requirement affects credit allocation in the banking system, Mr. Remolona said.

The RRR is the portion of reserves that banks must hold onto rather than lending out.

In June, the BSP slashed the ratio for big banks and nonbank financial institutions with quasi-banking functions by 250 bps to 9.5%. It has also reduced the ratio for digital banks by 200 bps to 6% and by 100 bps for thrift banks, and rural and cooperative banks to 2% and 1%, respectively.

The BSP has brought down the RRR for big banks to a single-digit level this year from a high of 20% in 2018.

“Since there have been no signals on local policy rate cuts this year, there could be no immediate cut on banks’ RRR until inflation reaches the inflation target as early as fourth quarter of 2023 and for as long as monetary policy remains restrictive in the fight versus inflation,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said, adding this is consistent with overall monetary policy.

The BSP, he said, will avoid inflicting any inflationary pressures, “since there would be no offsetting end of regulatory relief measures similar to June 30, 2023 during the last RRR cut that effectively created a net neutral monetary policy.”

When a bank is required to hold a lower reserve ratio, it has more funds to lend to borrowers. This increases the bank’s lending capacity, impacting its ability to support economic growth and meet the credit needs of individuals and businesses.

The RRR cuts in June coincided with the expiration of the BSP’s pandemic relief measures, which allowed banks to count their lending to small businesses as part of their compliance with the reserve requirement for deposit liabilities and substitutes.

Mr. Ricafort said that if the BSP further cuts the banks’ RRR once inflation is within the 2-4% target, the move will support monetary easing.

“Any further cut in banks’ RRR would release more funds to the banking system that can increase lending activities and spur greater loan demand and faster economic growth,” he said.

Security Bank Corp. Chief Economist Robert Dan J. Roces likewise said cutting the RRR is one option for the BSP instead of policy rate cuts.

Last week, after leading his first policy meeting as governor, Mr. Remolona said he does not see any policy easing at the next meeting as policy rates still support economic growth.

The Philippine economy expanded by 4.3% in the second quarter, the slowest in two years. For the first half, gross domestic product growth averaged 5.3%, below the government’s 6-7% target. — Keisha B. Ta-asan

Suspension of Manila Bay reclamation projects seen to discourage foreign investors

August 22, 2023 | 12:32 am

THE SUSPENSION of the reclamation projects in Manila Bay may discourage the entry of more investments in the country, according to some business groups.

Philippine Chamber of Commerce and Industry President George T. Barcelon said the government’s recent move to halt reclamation projects in Manila Bay creates “unnecessary uncertainty” for investors.

“In the business world, a contract should be honored. If they (investors) see this, they would be concerned and they might step back. That is a concern. The other concern is if a lot of businesses are legitimate and we do something like that, other countries may also be concerned,” he told BusinessWorld via mobile phone.

President Ferdinand R. Marcos, Jr. earlier this month suspended all reclamation projects in Manila Bay, except for one, as the government reassesses their overall long-term impact on the environment.

The Department of Environment and Natural Resources (DENR) has not given a timeline for the completion of the review of the reclamation projects.

“The issue of inconsistent policy is one but stopping projects is something that will really terrorize possible investors… Now I think they will all disappear because of this,” Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said in an ANC interview on Aug. 19.

Mr. Ortiz-Luis said foreign investors have always been concerned about dealing with the Philippines due to inconsistent policies.

“That is why they choose Vietnam or Thailand. In the case of the reclamation, to advertise that we are halting (reclamation) projects is really damaging,” he added.

Mr. Ortiz-Luis said Manila Bay reclamation projects would have provided more areas for expansion in Manila and Pasay.

“The reclamation can give spaces where the city can expand, bring new technology. The planned expansion will deescalate prices of land in the area. With the additional land that will be reclaimed, the price will stabilize and be more affordable,” he added.

Mr. Ortiz-Luis urged the government to make a final decision on the issue of reclamation projects.

“The government has to decide… We cannot have this track record of rescinding contracts because it will destroy our credibility worldwide… It is unfortunate,” he said.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said investors would be concerned over the lack of policy certainty and the change in rules while projects are already being implemented.

“There should be a dispute mechanism through a special local court with quicker resolution as well as courts in the region, especially for foreign investors for the country’s various infrastructure projects that are long-term in nature and involves large amounts of capital,” he said in a Viber message.

“The faster the resolution is, the better.”

The US embassy previously expressed concern that a Manila Bay reclamation project was being undertaken by a China-owned company. China Communications Construction Co. was blacklisted by Washington in 2020, along with other companies after it allegedly assisted the Chinese military in building and militarizing artificial islands in the South China Sea. — R.M.D.Ochave

Travel will represent a $15.5-trillion global industry by 2033 — WTTC

August 22, 2023 | 12:31 am

Paris-Bloomberg — Travel is set to become a $15.5-trillion industry by 2033, according to World Travel & Tourism Council. — BLOOMBERG

THE CROWDS of travelers filling airports in many parts of the world this summer are a telltale sign of what’s ahead for tourism.

By 2033, travel is set to become a $15.5-trillion industry — accounting for more than 11.6% of the global economy. This represents a 50% increase over its $10-trillion value in 2019, when travel represented 10.4% of the world’s gross domestic product.

The 10-year forecast comes from the World Travel & Tourism Council (WTTC), the leading advocacy group dedicated to quantifying the industry’s economic impact. Although it was released in May as part of a 2023 World Economic Impact report on travel, the data hasn’t circulated beyond a small set of industry executives until now.

The report breaks down the economic contributions of the world’s major tourism markets and reveals the top five most powerful travel and tourism economies as of 2022 in terms of GDP contribution. These remained the same as pre-2019: the US, China, Germany, UK and Japan, with Japan overtaking the UK in the most recent list. France, Mexico, Italy, India and Spain rounded out the top 10.

The report also includes figures on travel and tourism’s contribution to the labor market: As a whole, the industry will employ up to 430 million people by 2033, compared with 334 million in 2019. That accounts for roughly one of every nine jobs globally.

It’s not just that travel represents an enormous slice of the global economy, it’s also growing far faster than the economy at large.

“Economists are saying that the global GDP is going to grow on an annualized basis about 2.6% a year,” says Julia Simpson, president and chief executive officer at the World Travel & Tourism Council, speaking to Bloomberg from her office in New York. “In travel and tourism, we’re expecting [annual growth of] about 5.1%.”

Another projection from the WTTC points to big changes afoot, Ms. Simpson adds: Over the next 10 years, the US travel economy, which is the largest in the world in terms of its annual $2 trillion in total economic output, will lose its crown to China.

In 2033, China’s travel sector is forecast to contribute $4 trillion and will make up 14.1% of the Chinese economy. By contrast, the US industry is projected to reach $3 trillion and will represent 10.1% of the US economy. (These figures represent both the amount spent in-country by international visitors and how much citizens of each country spend on their own travel abroad.)

Pre-pandemic, Chinese travelers represented 14.3% of global outbound travel spending; their delayed return to international travel, thanks to extended border closures that only lifted in January 2023 and ongoing passport and visa processing delays, has hampered the rebound. But the rest of the world has compensated. Latin America, North America and Europe have driven a strong enough recovery, the WTTC’s report shares, that the industry expects to be almost back to 2019 levels by the end of this year.

Once Chinese travelers return in full force, which is expected by 2024, it will kick off another significant wave of growth for global tourism — with the Chinese share of global outbound travel spending predicted to reach 22.3% by 2033.

Despite overall economic uncertainty, people “really, really want to travel and they are prioritizing their spending on travel,” Ms. Simpson says, citing WTTC findings released on Aug. 15 in a separate nonpublic report on global trends.

Even the short-term outlook for travel paints a bullish picture. In data examining more than $63.6 billion in transactions, Virtuoso, a network of more than 20,000 luxury travel advisers, reported on Aug. 16 that its sales in the first half of 2023 resulted in a 69% uptick compared with 2019 levels. And with more people booking trips further out, the company is already seeing a 107% increase in sales for 2024 and early 2025, compared with what was on the books with similar advance notice in 2019 and early 2020.

Virtuoso’s data points to a spike in nature-based travel, including scientific expeditions with researchers to Antarctica and the Galapagos. The WTTC’s Ms. Simpson agrees, saying that while she’s noticed a real return to cities, there’s also increased appetite for lesser-known destinations, such as Bulgaria and Slovenia. “Travelers are getting more adventurous. They want to really try and see different places.”

These shifts plus bureaucratic hurdles have left the giant US industry lagging behind its competitors. But stateside jobs are on the rise. According to an as-yet unpublished WTTC report on America’s travel sector, the country will see 21 million people working in travel and tourism by 2033 — up from 17.5 million in 2019 — representing one in eight jobs across the country. — Bloomberg

Big firms post mixed results; banks lift earnings

August 22, 2023 | 12:07 am

PHILIPPINE conglomerates reported mixed earnings results for the first half of the year amid market headwinds, but those with banking units came out stronger, analysts said.

“Corporate earnings for the top Philippine conglomerates in the first half of 2023 were mixed. Some companies reported strong earnings growth, while others, saw their earnings decline,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

Mr. Arce added that among the top listed firms, SM Investments Corp. and Ayala Corp. reported stronger earnings during the six-month period.

Carlos Angelo O. Temporal, senior equity research analyst for Unicapital Securities, Inc., likewise said noteworthy gains were observed from SM Investments and Ayala Corp., but GT Capital Holdings, Inc. stood out as it doubled its earnings.

“All three conglomerates benefitted from the robust performances of their banking units, which have continued to capitalize on elevated interest rates and sustained loan growth,” Mr. Temporal said in a Viber message.

He added that the companies also have property arms that “saw superb growths as residential revenues gain traction while cancellation rates significantly ease from last year’s lumpy figures.”

For the semester, GT Capital more than doubled its consolidated net income to P16.61 billion from P8.1 billion as its core businesses delivered better results.

GT Capital’s first-half earnings were primarily driven by an impressive increase in auto sales, which surged by about 50% year on year, accompanied by a substantial improvement in margins due to the relative stability of the peso.

Ayala Corp. booked an attributable net income of P18.41 billion for the first half, 13.2% higher than the P16.27 billion in the same period last year.

Mr. Temporal said the results were mainly due to ACEN Corp.’s profits, which were facilitated by the easing of fuel prices and the company’s shift to a net-selling merchant position in the spot market.

SM Investments saw a consolidated net income of P36.5 billion for the first half, reflecting a 32% increase from P27.7 billion, driven by solid consumer sentiment on the back of a positive economic environment.

Meanwhile, Mr. Temporal said these companies might face a couple of developing major headwinds: higher inflation due to rising oil prices and peso volatility.

“Resurgence in inflation from higher oil prices and other factors may lead to lower consumer demand across different sectors and higher input costs for companies,” he said.

He added that the peso’s volatility could result in “elevated interest expenses for entities with substantial dollar-denominated debt, reduced margins for net importers, and increased [capital expenditure] for companies relying on foreign-sourced materials and equipment.”

However, Mr. Arce said that these conglomerates with diversified portfolios that span multiple sectors might be better equipped to weather the challenges. — Adrian H. Halili

New barcode system seen to benefit supermarkets

August 22, 2023 | 12:06 am

SUPERMARKETS are set to benefit from the planned adoption of a new barcoding system by 2025 as this would help make their operations more efficient, according to an industry group.

Philippine Amalgamated Supermarkets Association President Steven T. Cua said the upcoming shift to the quick response (QR) code matrix 2D barcodes from the 1D black and white vertical lines would boost the efficiency of retailers.

“The benefits include efficiency in transactions on the part of retailers,” Mr. Cua told BusinessWorld in a Viber message, citing “pertinent product information on the part of store merchandise buyers like place of origin, date of manufacture/harvest, date of expiration/spoilage, and customers (institutional/commercial users, smaller retailers and end-users).”

However, Mr. Cua said the new price coding system would require a change in the software and hardware used by supermarkets.

He added that it would take longer for smaller retailers to implement the new barcode due to the required capital outlay unless service providers would introduce installment payment programs.

“Supermarkets are totally unprepared for this given an overhaul in this price-capturing system. There is, after all, a need for advanced scanning technology/software requiring totally new hardware,” Mr. Cua said.

“The new price coding system using the QR Code requires a total change of software and hardware to capture the more comprehensive data of manufactured products and fresh produce. The sooner retailers jump into the fray to create volume for software and hardware providers, the cheaper the technology becomes available to retailers,” he added.

Meanwhile, Mr. Cua said the economy would also benefit from the shift to the new barcoding system since it would be implemented globally by 2025.

Mr. Cua said that since the global system will be uniformly implemented worldwide — much like the current barcode system — the country should adopt it “to make trade and merchandising of products hailing from anywhere in this planet easy to understand, monitor and acceptable.”

He added that local food retailers “will have to swallow the bitter pill” and shift or adopt the “new economic order within the next few years or be left behind in serving the demands of evolving consumers.”

The Philippine Retailers Association previously said that the new barcoding system would be trialed in the country by the first quarter of next year ahead of the upcoming global implementation. Both 1D and 2D barcodes will be used in the first two years of implementation to allow a transition period for retailers and manufacturers.

Some of the expected benefits of the new barcode include better traceability with more available information and more consumer-friendly as the QR code also contains other product information that could be accessed by consumers. — Revin Mikhael D. Ochave

LIONSGATE Play stabilizes subscriber base in Southeast Asia

August 22, 2023 | 12:05 am

LIONSGATE Play, the global streaming service of entertainment company Lionsgate, is planning to stabilize its subscriber base in Southeast Asia this 2023 by seeking out mobile and broadband partnerships in the region and continuing to provide adrenaline-fueled action and suspense content.

“We launched in the Philippines last year and we’re very happy having partnered with broadband service provider PLDT. The awareness of our streaming platform among PLDT users is 70% upwards,” said Amit Dhanuka, Lionsgate Play’s Executive Vice President for South Asia and Southeast Asia, at a media event in August.
“Asia is a significant contributor to the app’s growth even though we only entered the market in 2019,” he said, adding that it grew four or five times during its first year in the Philippines.

Lionsgate Play is hoping to be the biggest provider of the content they specialize in, which are “edgy, provocative, thrilling” action films and TV series, according to Mr. Dhanuka. Known titles on the platform include The Hunger Games, the Twilight saga, John Wick, Saw, and Mad Men. It also streams awards shows like the Emmys and the Golden Globes. Its latest offering is an espionage drama called Gray, which premiered exclusively in the Philippines on Aug. 18. New titles are added every Friday.

PLDT HOME PARTNERSHIP
Lionsgate Play Philippines’ country manager Ma. Cecilia Marino said that their exclusive partnership with PLDT Home gives Fiber users full access to the platform. “We can really deliver compelling stories to the Filipino audience by building partnerships with mobile and broadband,” she said. Mr. Dhanuka added that once the subscriber base is stable, they will consider producing more local content for the Philippines.

“We have around 20 million subscribers globally and we expect Southeast Asia to be crucial in growing that number,” said Mr. Dhanuka.

Early in August, Lionsgate Play even rebranded its service in the region, changing to a multicolored iridescent design and upgrading the look and interface of the app. The rebranding is meant to show that the platform’s content has “the variation of a prism,” according to Ms. Marino. Its app rating on the Play Store is currently at 4.0 stars.

For more information, visit https://pldthome.com/lionsgateplay. 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. — Brontë H. Lacsamana

Bucking headwinds: Landlords and tenants navigate an evolving work landscape in PHL

August 22, 2023 | 12:05 am

Office space — STOCK PHOTO | Image by Adolfo Félix from Unsplash

LIKE the Philippine property market in general, Colliers is seeing positive trends for the Metro Manila office market.

Occupiers can benefit by re-thinking their workplace as an investment that can help achieve their company’s vision and goals. In our view, the office can be maximized not only in terms of space utilization but also in terms of its value in talent recruitment and retention, and how it can align both employee and company values.

Metro Manila saw a marginal decline in office vacancy due to improved transaction activity and a slowdown in non-renewals in the first half of 2023.

Uneven recovery in rents is still being experienced across Metro Manila submarkets, with rental recovery noted in Makati central business district (CBD), Fort Bonifacio and Ortigas CBD.

Net absorption for the second quarter has improved, mainly driven by higher transactions volume coupled with the slowdown in vacated spaces.

With these new developments in the market, we project a higher net take-up by year-end. However, vacancy is still expected to remain elevated with more supply coming online in the latter part of 2023.

Colliers believes that landlords and tenants should continue seizing opportunities given the current tenant-leaning market. Occupiers may consider implementing flight-to-value or incorporate flex workspace in their real estate strategies.

With the increased interest in ESG (environmental, social, and corporate governance) and DE&I (diversity, equity, and inclusion), landlords can work with tenants on office renovations and incorporate these elements within building amenities and common areas to help align corporate and employee values.

INVEST IN A WORKPLACE THAT ‘WORKS’
Amid the ongoing transformation of the workplace and the workforce, occupiers should facilitate continuous dialogue with their stakeholders to determine how best they work and what can retain and attract talent to the organization.

Occupiers continue to see the office as critical to employee engagement, especially for new hires. More are using the office as a recruitment tool and training floor, as it now becomes a company’s platform to encourage people to come together.

With the renewed interest in DE&I and ESG, occupiers should consider these in their real estate strategies. Reflecting this in workplace strategy and design helps in differentiating the company and ensures talent retention.

CONSIDER PROVINCIAL STRATEGY TO CLOSE GAP BETWEEN WFH AND RTO
One of the major employee concerns on return to office (RTO) is the cost of moving back to their Metro Manila head offices. Implementing full RTO increases the risk of employee attrition, which can be costly for companies.

To address this, opening sites in provincial areas may be a viable strategy to address the gap between work from home (WFH) and RTO for employees.

SUBSTANTIAL SUPPLY FOR 2^ND HALF 2023
In the second quarter of 2023, Colliers recorded the delivery of 80,400 square meters (852,200 square feet) of new office space, with the completion of Primex Tower in San Juan and Parqal Buildings 1-9 in the Bay Area.

In 2023, Colliers expects the completion of 668,400 sq.m. (7.2 million sq.ft.), higher than our previous estimate of 569,100 sq.m. (6.1 million sq.ft.) as some landlords are on track to meet their buildings’ completion timelines to accommodate upcoming demand.

We project 538,900 sq.m. (5.8 million sq.ft.) of additional supply coming online in the second half of 2023, with Fort Bonifacio, Ortigas CBD and Quezon City likely accounting for nearly two-thirds of the new supply.

Meanwhile, 402,000 sq.m. (4.3 million sq.ft.) in the pipeline were put on hold or shelved by developers as of the first half of 2023, higher than the 166,000 sq.m. (1.8 million sq.ft.) in the first quarter of 2023. In our view, these projects may be redeveloped or reactivated by developers in the future.

From 2023 to 2025, Colliers sees the completion of 492,400 sq.m. (5.3 million sq.ft.) annually. This is only half of the one million sq.m. (10.8 million sq.ft.) completed annually from 2017 to 2019, a period wherein office completion was heavily influenced by the Philippine Offshore Gaming Operators’ (POGO) demand.

TRANSACTIONS DOWN 5%
In the first half of 2023, office deals in the capital region reached 306,000 sq.m. (3.3 million sq.ft.), down 5% year on year. Traditional firms including government agencies, telcos, insurance firms, and flexible workspace operators logged transactions of 125,700 sq.m. (1.4 million sq.ft.).

In the second quarter of 2023, outsourcing and shared services firms dominated transactions with 73,000 sq.m. (785,500 sq.ft.) of closed deals. Colliers has observed that most outsourcing firms are still actively expanding and are employing flight-to-value strategies despite hybrid work arrangements, transferring to new, high-quality towers in Makati CBD, Fort Bonifacio, and Ortigas Center.

Per submarket, the Bay Area, Ortigas CBD and Makati CBD recorded the largest volume of transactions in the first half of 2023, covering 57% of total office deals in Metro Manila.

Among the notable transactions in the first half of 2023 include spaces leased by Telus, 24/7 Intouch and Reed Elsevier in Quezon City; IGT Solutions in Alabang; Chevron and Opentext in Makati CBD; and Transparent BPO and the Department of Transportation (DoTr) in San Juan City.

SUSTAINED PROVINCIAL DEALS
Office transactions in key provinces rose quarter on quarter as deals in the first quarter of 2023 reached 60,400 sq.m. (649,900 sq.ft.), from 29,300 sq.m. (315,300 sq.ft.) a quarter ago.

In the first half of 2023, these deals totaled 89,700 sq.m. (961,900 sq.ft.), a marginal drop from the 90,700 sq.m. (975,900 sq.ft.) recorded a year ago. Cebu accounted for 48% of total provincial deals, mostly from outsourcing firms, followed by Pampanga (26%) and Davao (11%).

Colliers is optimistic that gains in the Metro Manila office sector will be sustained for the remainder of the year. The profile of tenants occupying physical space remains diverse while key office hubs outside Metro Manila continue to record transactions. Optimistic business sentiment and robust macroeconomic growth forecast should support firms’ expansion over the next 12 months.

Kevin Jara is the associate director for office services — tenant representation at Colliers Philippines.

AllHome, AllDay set to resume store expansion

August 22, 2023 | 12:05 am

LISTED companies AllDay Marts, Inc. and AllHome Corp. are set to begin expanding their retail stores starting next year, its top official said.

“By next year, we will resume our expansion. We will start the expansion of AllDay and AllHome,” Manuel B. Villar, Jr., the companies’ chairman, told reporters in a recent briefing.

Mr. Villar said the companies’ expansion efforts would begin with smaller freestanding projects.

“Smaller siya pero pareho pa rin, freestanding pero mas maliit,” he said.

(It’s much smaller but still the same as previous projects, freestanding but smaller.)

He added that the Villar group’s retail businesses were largely affected by lower foot traffic mainly attributed to the pandemic.

“We will come back strongly next year,” he said. “Most of our [retail businesses] are mall-based.”

Both companies said earlier that part of the proceeds from their initial public offering would be used for store expansions, with the rest for debt repayment and capital expenditures.

AllDay conducted its maiden listing on the Philippine Stock Exchange in 2021, while AllHome held its market debut in 2019.

For the second quarter, AllHome reported an 8.1% decline in attributable net income to P229.85 million from P250.02 million, mainly attributed to higher expenses by 3.8% to P2.75 billion.

Its top line for the three-month period inched up by 3% to P3.12 billion from P3.03 billion in the same period last year.

Meanwhile, AllDay’s attributable net income for the second quarter fell by 4.4% to P83.40 million from P87.21 million a year ago.

Its revenues rose 6.8% during the April-to-June period to P2.46 billion from P2.30 billion in the same period last year.

The company’s first-half attributable income surged to P171.97 million, a significant rise from P11.63 million a year earlier.

Last Friday, AllDay shares went up by 0.6% or P0.001 to P0.169 apiece while AllHome shares rose by 1.25% or two centavos to P1.58 apiece last Friday. — Adrian H. Halili

T-bill, bond yields likely to inch higher

August 22, 2023 | 12:04 am

RATES of Treasury bills (T-bills) and bonds on offer this week could rise slightly after the Bangko Sentral ng Pilipinas (BSP) kept borrowing costs unchanged last week but said it is ready to raise rates if needed amid upside risks to inflation.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Tuesday, or P5 billion each in 91-, 182- and 364-day papers.

On Wednesday, it will offer P30 billion in reissued 20-year Treasury bonds (T-bonds) with a remaining life of 15 years and five months.

T-bill and T-bond rates may inch up after the central bank held its key rate at its policy meeting last Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The 15-year auction [this] week will likely fetch a rate between 6.75%-6.9% as investors will likely ask a steep premium given what seems a long pause ahead of us,” a trader added in an e-mail.

The BSP kept its benchmark interest rates steady for a third straight meeting on Thursday, but signaled that it is prepared to resume tightening if needed amid risks to inflation.

The Monetary Board left its overnight reverse repurchase rate unchanged at a near 16-year high of 6.25%, as expected by 13 economists in a BusinessWorld poll. Interest rates on the overnight deposit and lending facilities were maintained at 5.75% and 6.75%, respectively.

The BSP has raised borrowing costs by 425 basis points (bps) from May 2022 to March 2023 to tame inflation.

BSP Governor Eli M. Remolona, Jr. said after the meeting on Thursday that the BSP is “ready to tighten” if necessary, as it keeps a close eye on developments that may impact inflation.

The Monetary Board will hold its next policy meeting on Sept. 21.

Mr. Ricafort added that the yields could also rise after the central bank raised its inflation forecasts to 5.6% from 5.4% for 2023, 3.3% from 2.9% for 2024, and 3.4% from 3.2% for 2025.

Headline inflation eased for the sixth consecutive month to 4.7% in July from 5.4% in June, bringing the seven-month average to 6.8%, well above the BSP’s 2-4% target for the year.

At the secondary market on Friday, the 91- and 182-day T-bills went down by 9.26 bps and 5.55 bps week on week to end at 5.7649% and 5.9996%, respectively, based on the PHP Bloomberg Valuation Service Reference Rates data published on the Philippine Dealing System’s website.

Meanwhile, the 364-day T-bills inched up by 5.28 bps to end at 6.3285%

The 20-year bond inched down by 1.54 bps week on week to end at 6.6839%.

Last week, the BTr raised just P12.185 billion via the T-bills it auctioned off, short of the P15-billion program, even as total bids reached P40.435 billion or more than two times the amount on offer.

Broken down, the Treasury made a full P5-billion award of the 91-day T-bills as tenders for the tenor reached P16.307 billion. The average rate of the three-month paper rose by 10.6 bps to 5.704%, with accepted rates ranging from 5.648% to 5.740%.

Meanwhile, the government raised just P3.83 billion from the 182-day securities out of the planned P5 billion despite bids for the tenor reaching P13.36 billion. The average rate for the six-month T-bill was at 5.945%, inching down by 4.5 bps, with accepted rates at 5.9% to 6%.

The BTr also borrowed just P3.355 billion via the 364-day debt papers out of the P5-billion program, even as demand reached P10.768 billion. The average rate of the one-year T-bill went up by 3.1 bps to 6.325%. Accepted yields were from 6.3% to 6.35%.

Meanwhile, the reissued 20-year bonds to be offered on Wednesday were last auctioned off on Nov. 28, 2019, where the government raised just P12.271 billion out of the P20-billion program. The bonds were awarded at an average rate of 5.341%.

The BTr wants to raise P225 billion from the domestic market this month, or P75 billion via T-bills and P150 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — A.M.C. Sy with Reuters

Zack Tabudlo goes global

August 22, 2023 | 12:04 am

THIS YEAR, Filipino pop artist Zack Tabudlo entered the global stage with the release of his latest song “Fallin’,” a collaboration with South African rapper Nasty C as part of Coke Studio, Coca-Cola’s global music platform. As of Aug. 14, a month after the song dropped, its corresponding music video has reached 4.6 million views.

Mr. Tabudlo performed in a Coke Studio mini concert on Aug. 15 in BGC, where he sang his hit “Nangangamba” and the catchy track “Gusto,” which features rapper Al James.

Coke Studio brings together emerging and established music acts from around the world. “It’s not just about us celebrating seven years in the Philippines. It’s also the second year of the global Coke Studio project and a fitting time to elevate Filipino talent on the global stage,” said Teejae Sonza, Coca-Cola Group’s marketing director for Asia Pacific at Mr. Tabudlo’s mini concert.

The song “Fallin’” combined two rising powerhouses from different parts of the world, making it one of the top regional collaborations on the platform, according to Ms. Sonza. “There was a global song but there were regional duets as well, and it was the second most-viewed of the regional duets,” Ms. Sonza said.

The official Coke Studio anthem for 2023 was “Be Who You Are (Real Magic),” by Grammy-winning American musician Jon Batiste, featuring NewJeans, J.I.D, Camilo, and Cat Burns.

“It’s also heartwarming to read the comments and see South African fans of Nasty C discovering the talent of Zack. We take great pride in enabling these global collisions,” Ms. Sonza said of this year’s concept.

Al James, who was a guest at Mr. Tabudlo’s mini concert and had previously worked with him on the song “Gusto,” was a Coke Studio Philippines alumnus himself, featured in season three back in 2019.

“These major stages and opportunities for exposure and collaboration with other artists makes being part of this platform so exciting. Thank you as well to the Filipinos who support me, Zack, and all the Pinoy musicians who are reaching greater heights,” he told the press at the concert.

Coke Studio Philippines will be planning more events this 2023, such as the biggest Coke Studio concert in the country, fan engagements, and live brand experiences. — Brontë H. Lacsamana

Seda Hotels opens 12^th property in the Philippines

August 22, 2023 | 12:04 am

SEDA HOTELS recently opened its 12^th property in the Philippines.

Seda Manila Bay, located in Entertainment City, Parañaque City, offers 350 rooms ranging from deluxe rooms to suites.

“We are proud to see Seda Hotels flourish and continue to expand its footprint in the Philippines. Seda Manila Bay will carry on the brand’s commitment to providing unparalleled Filipino hospitality combined with service at par with global standards,” Javier Hernandez, president and CEO of AyalaLand Hotels and Resorts, said in a statement.

Hotel amenities include a water playground, a children’s playroom, a game room, and a gym.Guests can relax at the Seda Spa, which has private massage rooms. The hotel is also planning to open a mini-golf area.

Seda Manila Bay General Manager Jeffrey Enriquez said the hotel has a ballroom with a capacity of up to 350, as well as smaller meeting rooms.

“Guests can also expect a diverse and flavorful dining experience at Seda’s signature outlets, Misto restaurant, which serves a medley of international and local dishes, and very soon, Straight Up rooftop bar — perfect for catching the world-famous Manila Bay sunset,” Mr. Enriquez said.

The hotel’s location is perfect for business travelers, as it is only 15 minutes away from the Ninoy Aquino International Airport and a 30-minute drive to the Makati and Bonifacio Global City central business districts.

DITO CME in talks with investors for capital

August 22, 2023 | 12:04 am

DITO CME Holdings, Inc. said it is in talks with interested parties for potential capital-raising agreements to support its telecommunications business, DITO Telecommunity Corp.

“We are talking to a lot of interested parties. In due time we will announce. [These are] both local and international,” DITO CME President Ernesto R. Alberto told reporters in an interview last week.

Mr. Alberto said the telecommunications industry still attracts interest from the investment community.

“The market has been very lackluster in the last three years, with the pandemic and all, but at least it is coming along, things are getting better and there is a lot of interest from the investment community particularly in this unique space of having a digital active country with a young population with only three major enablers,” said Mr. Alberto.

He also said that the company will continue to spend a minimum of $1 billion a year to catch up with incumbent telco players, noting that the industry is capital-intensive.

He said the primary objective of DITO CME is to raise as much investment to fund its critical projects as the country’s so-called “third telco.”

“The benefit of us being a new player is we are devoid of any legacy; it is all brand new 4G. And if we think 4G is going to be replaced by 5G in the clear horizon that’s where we should participate in the play,” he added.

In its quarterly report, DITO CME said that it is expecting the closing of a project finance loan facility from creditors of up to $3.9 billion in the second half of the year.

On Feb. 13, DITO CME entered into a shareholder loan agreement amounting to P5.2 billion which it can draw on to address operating expenses and maturing obligations. By the end of the second quarter, the company said that its total drawdowns totaled P3.5 billion.

DITO CME has committed to spending P257 billion over a five-year period for the commercial rollout of DITO Telecommunity to pass the regulatory audits within the period.

“We satisfied the fourth-year technical audit of achieving 80% coverage so what remains is the fifth and last year of regulatory audit that will herald that we are indeed a full-pledge telco player in the industry,” said Mr. Alberto.

For the fifth technical audit, the company is required to increase its population coverage to 84% while maintaining the minimum speed of 55 megabytes per second for 4G.

“Despite the challenges, the telco is working hard and still very hopeful that they can meet EBITDA (earnings before interest, taxes, depreciation, and amortization) breakeven by end of 2025 and looking to make a profit in 2028,” he said. — Justine Irish D. Tabile

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