Manufacturing sector’s Volume of Production Index (VoPI) growth rates
MANUFACTURING OUTPUT in the Philippines rose to a three-month high in April amid strong domestic demand. Read the full story.
PSE index drops as investors wait for fresh leads
LOCAL EQUITIES declined on Thursday as investors stayed on the sidelines amid a lack of leads and before the US Federal Reserve’s policy meeting next week.
The benchmark Philippine Stock Exchange index (PSEi) fell by 25.34 points or 0.38% to end at 6,539.36 on Thursday, while the broader all shares index went down by 10.94 points or 0.31% to close at 3,484.71.
“The index closed at 6,539.36, holding above the 6,500 level. Investors are still on the sidelines awaiting the Fed decision next week,” Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a Viber message.
“We think that the index will be dry moving forward until we see some positive news globally,” Mr. See added.
The Fed will meet to review policy on June 13-14.
The US central bank last month raised its benchmark rates by 25 basis points (bps), bringing its target interest rate to the 5%-5.25% range.
It has hiked borrowing costs by 500 bps since March 2022.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message that investors stayed on the sidelines as they await the release of economic data here and in the United States. These include reports on weekly US jobless claims and wholesale inventories, as well as Philippine labor and trade data.
“The local bourse slipped by 25.34 points to 6,539.36 due to lack of catalysts. Investors, both at home and overseas, were still digesting recent economic data while waiting for fresh leads to move the market,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“On the economic data front, the decline in the Philippines’ gross international reserves weighed on sentiment as well. Many investors were on the sidelines,” Ms. Alviar added.
Value turnover fell to P3.86 billion on Thursday with 626.14 million shares changing hands from the P4.14 billion with 801.79 million issues traded on Wednesday.
The country’s gross international reserves slid by 0.5% to $101.3 billion from April. Year on year, the reserves declined by 2.3%, the Bangko Sentral ng Pilipinas reported on Wednesday.
All sectoral indices fell on Thursday. Property dropped by 17.98 points or 0.66% to 2,685.08; mining and oil slid by 55.89 points or 0.55% to 10,068.34; holding firms declined by 24.70 points or 0.37% to 6,520.26; financials went down by 5.41 points or 0.29% to 1,828.35; industrials shed 25.16 points or 0.27% to close at 9,286.84; and services decreased by 2.52 points or 0.16% to 1,538.25.
Decliners outnumbered advancers, 105 versus 69, while 51 names closed unchanged.
Net foreign selling stood at P416.92 million on Thursday versus the P155.14 million in net buying seen on Wednesday. — A.H. Halili
Peso inches lower on renewed Fed hike bets
THE PESO weakened slightly against the dollar on Thursday on expectations of a rate hike from the US Federal Reserve next week after increases from other central banks.
The local currency closed at P56.11 versus the dollar on Thursday, inching down by 1.20 centavos from Wednesday’s P56.098 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Thursday’s session at P56.12 per dollar. Its weakest showing was at P56.21, while its intraday best was at P56.08 against the greenback.
Dollars traded rose to $957 million on Thursday from the $841.55 million seen on Wednesday.
The peso inched down on expectations of further tightening by the Fed next week after the Bank of Canada fired off a surprise hike, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The Bank of Canada on Wednesday hiked its overnight rate to a 22-year high of 4.75%, and markets and analysts immediately forecast yet another increase next month to ratchet down an overheating economy and stubbornly high inflation, Reuters reported.
The central bank had been on hold since January to assess the impact of previous hikes after raising borrowing costs eight times since March 2022 to a 15-year high of 4.50% — the fastest tightening cycle in the bank’s history.
The move suggested that other central banks, including the Fed, may have more work to do to combat inflation.
The Fed will hold its policy meeting on June 13-14.
The US central bank raised borrowing costs by 25 basis points (bps) last month, bringing the Fed funds rate to 5% to 5.25%.
It has hiked borrowing costs by 500 bps since March 2022.
For Friday, Mr. Ricafort sees the peso trading between P56.05 and P56.25 against the dollar. — with Reuters
Nurses awaiting licensing eyed for gov’t hospital work
THE Department of Health (DoH) will consider allowing nursing graduates still awaiting licensing to work in government hospitals, the new Health Secretary said on Thursday.
“We have several nurses that haven’t passed the board examinations and don’t have a licenses. In the government, you cannot work without a license, but I’m willing to take them if they have a diploma,” newly appointed Health Secretary Teodoro J. Herbosa told ABS-CBN News Channel.
Under the proposal, nursing graduates will be given time — possibly five years — to take and pass the licensure examination while employed, Mr. Herbosa said.
“I’ll make them eligible so if you have a diploma from an accredited school, I’ll give you a period of time to pass it. This is same in the US, (which accepts) board-eligible nursing graduates. They give them five years to pass the exam,” he said.
He said that the DoH might even invest in mentoring graduates to pass the board exam.
Mr. Herbosa said he still needs to consult with the Professional Regulation Commission whether the law needs to be revised before unlicensed nursing graduates can be employed.
Government hospitals have a shortage of about 4,000 nurses, Mr. Herbosa noted.
“Board-eligible (nursing graduates find work) as flight attendants in big airlines, I see them in call centers,” he said. “They should be… taking care of sick people, they should be (practicing in) rural areas.”
About 40% to 50% of nurses in private hospitals have quit in the past two years due to dissatisfaction with salaries, the Private Hospitals Association of the Philippines, Inc. has said.
While acknowledging the right of health workers to leave the country to pursue opportunity, Mr. Herbosa said the government should address their concerns to encourage them to stay.
“The right to a better life is embodied in our Constitution. If a nurse wants to go abroad to get a salary that I cannot give, I shouldn’t stop that person because I should look at why I cannot pay the same amount,” he said. “I will (pursue solutions) to make them stay.”
As of December, the monthly salary for nurses in private hospitals averaged P12,000, while those working in the public sector were receiving an average of P35,097, according to Filipino Nurses United. — Kyle Aristophere T. Atienza
Proposal to NEDA will serve as ‘baseline’ for privatizing NAIA; meeting with unsolicited proponents due next week
THE Department of Transportation (DoTr) said the proposal to privatize the Ninoy Aquino International Airport (NAIA) currently with the National Economic and Development Authority (NEDA) will serve as the “baseline” for the levels of investment the government expects to be sunk into the international gateway.
Transport Undersecretary for Aviation and Airports Roberto C.O. Lim said in a briefing on Thursday that the government could issue a bid invitation by September should NEDA approve, adding that an unsolicited proposal for NAIA submitted by a consortium has yet to be evaluated.
“We are just about to start studying the unsolicited proposal, as it is a very comprehensive proposal and it also needs to comply with the requirements stipulated in the Build-Operate-Transfer law,” he said.
“We will be meeting (the consortium behind the unsolicited proposal) next week with some preliminary questions …. Clearly, the unsolicited proposal is not identical to the basic terms and conditions that we have submitted to NEDA, (which sets) a baseline for what we believe are the investments needed for the public-private partnership for NAIA,” he added.
In April, the Manila International Airport Consortium, consisting of six Philippine conglomerates and Global Infrastructure Partners (GIP), submitted an unsolicited proposal valued at P100 billion.
The consortium is composed of Aboitiz Infracapital, Inc., AC Infrastructure Holdings Corp., Asia’s Emerging Dragon Corp., Alliance Global – Infracorp Development, Inc., Filinvest Development Corp., JG Summit Infrastructure Holdings Corp. and GIP, an investment fund.
The DoTr and the Manila International Airport Authority also submitted a solicited proposal to privatize the airport last week which will involve capital investment of P141 billion.
Once NEDA approval is obtained, Mr. Lim said, the government could publish the invitation to bid and participate in the privatization exercise by September.
“If we get NEDA approval, let’s say in a month or in a month and a half, by September we can publish the invitation and those who want to participate can acquire the kit that will define what (they will) need to do and to submit,” Mr. Lim said.
Mr. Lim said on Wednesday that the privatization of the NAIA could kick off by the first quarter of next year.
“If we are to use an aggressive timeline, I think we can have a result announced, the selection of winning bidder, by the first quarter of next year,” he said.
“Remember, there is a long process of selection; there is a tech assessment and there will be negotiations. This is an estimate we believe is doable,” he added.
Mr. Lim said that the DoTr has yet to talk with any private group for the solicited proposal as it is still waiting for the approval of NEDA.
“For the solicited mode, we have not yet talked to anybody because we are waiting for the NEDA to give its approval so that we can prepare the comprehensive kit that will be available when we publish in the newspaper an invitation for public bid for the concession of NAIA,” he said.
The public-private partnership project will make operations at the airport more efficient, said Mr. Lim.
“It can lead to a faster rate of investment in modernizing the facility so that we can really introduce the innovations and the technology that are needed just for NAIA to level up along with our neighbors’ airports,” he said. — Justine Irish D. Tabile
Tuna industry fears freeze on vessel monitoring could trigger European sanctions
THE tuna industry said the government needs to lift the suspension of an order requiring monitoring devices on commercial vessels, in order to avert a ban on Philippine tuna by the European Union (EU).
In a statement, the Philippines Tuna Handline Partnership (PTHP) said that the suspension order may affect the status of Philippine tuna, after the industry was recently awarded the Marine Stewardship Council (MSC) certification.
“Ours are the first ever fishery in the Philippines to be certified under the MSC standard, an achievement that is in line with President Marcos’ goal of bringing prosperity and self-sufficiency to our nation,” Atenogenes B. Reaso, chairman of the Gulf of Lagonoy Tuna Fishers Federation, Inc., said.
“We are worried that the suspension of vessel monitoring measures to ensure transparency in fisheries will put our tuna exports at risk,” he added.
The EU requires preferred trading partners to comply with a number of international treaties, including one restricting Illegal, Unreported, and Unrestricted Fishing.
The PTHP earned its first MSC certification in October 2021 after a decade of compliance with international best practices.
In March, the Palace suspended the Vessel Monitoring Measures (VVM) for commercial fishing vessels under Fisheries Administrative Order (FAO) No. 266 in a memorandum signed by Executive Secretary Lucas Bersamin.
The memo directed the Department of Agriculture’s Bureau of Fisheries and Aquatic Resources (BFAR) “to hold in abeyance the implementation of FAO No. 266 nationwide, pending the final resolution over its constitutionality by the Supreme Court.”
FAO No. 266 requires that no fishing activity take place without complying with the vessel monitoring measures set by BFAR and local government units.
“This issue is very concerning. Our exports and those of other fish processors will be affected should the Philippines be red or yellow carded once again,”according to Jinky Rabano of the Philippine Association of Tuna Processors, Inc.
Environmental group Oceana reiterated its concern that the Philippines may face another yellow card warning from the EU, the country’s biggest market for fish and seafood products.
“VMM is also a tool specifically required to be established in our country to ensure the sustainable use of our marine resources,” Oceana Acting Vice-President Rose Liza Osorio said.
“This recent move by the government suspending the vessel monitoring rules contravenes not just our own law but even our commitments under various international agreements to ensure transparency and traceability,” she added.
The Philippines was issued a yellow card by the EU in 2014, which was lifted after the passage of Republic Act No. 10654 or the Amended Fisheries Code. — Sheldeen Joy Talavera
PHL to seek $300-million AIIB loan for financial inclusion projects
THE PHILIPPINES is seeking a $300-million loan from the Asian Infrastructure Investment Bank (AIIB) to fund financial inclusion projects, the Beijing-based bank said.
The AIIB said on its website that the loan will help the Philippines leverage its national ID system to expand financial inclusion and expand the digital payments ecosystem.
The program also aims to reduce inequalities in women’s access to finance.
The AIIB said the loan will be co-financed by the Asian Development Bank.
The Philippines is seeking to update the National Strategy for Financial Inclusion 2022-2028 with gender-focused targets, as well as the approval of the Financial Consumer Protection Act and other key legislation.
The financing will also support the Rural Bank Strengthening Program with targeted programs for female entrepreneurs.
AIIB also noted an Insurance Commission circular requiring the collection of sex-separated data to ensure effective inclusion of women in microinsurance.
The loan will also support a Department of Trade and Industry program to compile a database of women-owned and -led micro-, small-, and medium-sized enterprises.
The inclusion programs also support expanded financial services in Muslim Mindanao through the creation of a Shari’ah Supervisory Board. The loan will also fund capacity-development activities for Islamic banking.
The loan supplements a program which began in October 2018 to scale up the use of digital financial services, and another in August 2020 which sought to implement a national identity system and strengthen consumer protection and literacy. — Aaron Michael C. Sy
NFA: Rice given to teachers passes quality checks
THE National Food Authority (NFA) said the rice distributed as an allowance to teachers has passed quality tests, after a legislator alleged that the grain was of poor quality.
In a statement late Wednesday, the NFA’s Central Luzon (Region III) office said laboratory tests found the rice to be “edible, in good condition, and safe for human consumption.”
The regional office added that it has not received complaints about the rice.
On Tuesday, House Deputy Minority Leader and ACT Teachers’ Party-list Rep. France L. Castro said she wants an investigation of reports that rice distributed in Nueva Ecija, Mindoro, Bacolod City, and Zamboanga del Norte was “inedible.”
She said the rice was supposed to be distributed last year. Many teachers have yet to receive their rice allowances despite being asked to sign an acknowledgement receipt, she said.
The NFA Region III office said rice is typically released after being certified as being of good quality and exact weight by a receiving agency.
“The focal person of each agency-beneficiary is requested to witness the actual rice issuance to confirm the quality and exact quantity in bags and in weight based on the provided number of qualified agency-beneficiaries,” it said.
NFA Administrator Roderico R. Bioco said the procedure for releasing rice also involves laboratory analysis to ensure quality and safety.
“We have distributed (over) 300,000 sacks and so far, we received no requests for replacement or verified complaints,” he said.
The agency noted that any smells may be the result of the period of storage for some rice held by the NFA as buffer stock.
In an administrative order signed by President Ferdinand R. Marcos, Jr., in December, all government employees, including public school teachers, are entitled to a one-time rice allowance.
The Department of Budget and Management released P1.18 billion for the program in April.
Members of the Makabayan bloc in Congress called for an investigation into the allegations via House Resolution 1082 filed on Wednesday. — Sheldeen Joy Talavera
Ban on US, Dutch poultry imports lifted
THE Department of Agriculture (DA) has lifted a ban on poultry products from the US state of Minnesota as well as the Netherlands, after birds there were declared free of H5N1 Highly Pathogenic Avian Influenza (HPAI).
In a separate memorandum order, the DA once again allowed the entry of domestic and wild birds and their products including poultry meat, day-old chicks, eggs and semen from both locations.
“Based on the evaluation of the Department of Agriculture (DA), the risk of contamination from importing poultry meat, day-old chicks, egg and semen is negligible,” according to the orders, signed by Senior Undersecretary Domingo F. Panganiban.
The ban on imports from Minnesota was imposed by former Agriculture Secretary William D. Dar on April 7, 2022, which also covered the US states of Missouri, South Dakota, North Dakota, and Iowa, following the confirmation of outbreaks there by the National Veterinary Services Laboratories.
Philippine and American veterinary authorities agreed in 2016 that “a state-wide ban shall only be imposed if there are three or more countries affected with HPAI in one state.”
Meanwhile, the poultry ban on the Netherlands was issued on Nov. 12, 2021 based on a report submitted to the World Organization for Animal Health (WOAH) on Oct. 28, 2021 of an outbreak in Zeewolde, in the Dutch province of Flevoland.
The temporary ban also covered live cattle, meat products, and processed animal proteins derived from cattle. This specific ban was lifted on March 28 after the Netherlands was declared free of mad cow disease.
The DA procedure for lifting bans is based on official self-declaration reports sent to the WOAH and supporting documents submitted by the US Department of Agriculture’s Animal and Plant Health Inspection Service.
“All import transactions of the above commodities shall be in accordance in existing rules and regulations of the DA,” the memo said.
Meat Importers and Traders Association President Emeritus Jesus C. Cham said that “any additional origins that become approved will add to the supply, not only for meat traders but as well for meat processors.”
“We continue to exhort the government to adopt the regionalization principles of the World Organization for Animal Health and approve more origins,” he said in a Viber message. — Sheldeen Joy Talavera
Philippine fast-track decarbonization seen costing $133 billion until 2040
THE PHILIPPINES will need $133 billion until 2040 to implement an accelerated timeline for decarbonization, the World Bank said.
In a presentation, Feng Liu, World Bank senior energy specialist and infrastructure program leader for the Philippines, said the accelerated decarbonization scenario assumes annual reductions in carbon dioxide emissions of at least 80% by 2040 and projects electricity demand growth to be level with the current policy scenario (CPS).
CPS refers to the government’s ambitions for improving energy efficiency while also developing e-mobility and ramping up renewables on the supply side.
“The accelerated decarbonization as we described will require doubling capital investment in the power sector, almost all of the incremental investment going to variable renewable energy, particularly solar and wind,” he said.
The World Bank said that in order for the Philippines to build a foundation in the next five years for its energy transition, it must increase the number of utility-scale solar and wind projects in order to bring variable renewable energy sources to a tipping point.
Mr. Feng said that the Philippines should also pursue a liquefied natural gas (LNG) program to ensure reliable power supply while increasing the system’s flexibility for integrating renewables.
Among the recommendations by the World Bank are: prioritizing planning and investment in transmission capacity and grid flexibility; establishment of a framework to allow the early retirement of coal-fired plants and use of an appropriate carbon pricing to level the playing field between renewables and fossil fuels while generating revenues.
“A cleaner energy future is expected to be more affordable, given the savings in fuel costs and the global trends of declining costs related to deploying and integrating solar and wind power, enhancing the competitiveness of the economy,” the World Bank said in a report.
Energy Secretary Raphael P.M. Lotilla said the government’s clean-energy ambitions highlight the need for modernized transmission infrastructure.
“The government will facilitate the upgrading and modernization of the transmission and distribution lines to support an efficient transition to cleaner energy,” Mr. Lotilla said.
Mr. Lotilla said that to achieve the energy transition, the government must resolve transmission congestion by “adding transmission lines or avoiding subsidies that cause the build-up of excess capacity.”
“I pose the challenge for our development partners therefore to be up to speed in delivering the needed transmission capabilities,” Mr. Lotilla said.
Energy Undersecretary Rowena Cristina L. Guevara said that the Philippines is in a “mad rush” to put up generating capacity to meet increasing demand.
Ms. Guevara said that with the growing population, the Philippines is now relying on renewables to ensure energy security.
“I would say well, solar is going to need an energy storage system such that it can do the work as baseload. But you know, we have several types of renewable energy available,” she said.
Ms. Guevara said hydropower and geothermal plants can take up baseload duties in order to aid the transition away from coal-fired plants. She added that LNG, which is being put forward as a transition fuel, will also play a crucial role.
“Like Ilijan (a gas-fired power plant in Batangas) started running 600 megawatts (MW) today (Thursday). It will reach 1,200 MW by June 9,” she said, noting that decreasing the system’s carbon footprint will require replacing such plants. “But we know for a fact that there are technologies available.”
The Ilijan power plant is deemed vital to the power supply. Its gas contract with operators of the Malampaya field expired in June 2022. The reopening of Ilijan comes after the successful delivery of LNG fuel.
The Department of Energy (DoE) said it is planning to conduct an auction for offshore wind and other renewable projects in 2024.
According to service contract awardees, “Next year would be a good time for them. So, we plan to hold an auction that includes offshore wind by next year,” Ms. Guevara said.
The DoE is set to conduct the second round of green energy auctions by June 19, with 118 qualified companies expected to bid for 11,600 MW in renewable energy capacity.
Last month, the department said it awarded 65 offshore wind contracts with a combined potential capacity of 51.23 gigawatts, which it deemed sufficient to supply future energy demand.
Under the Philippine Offshore Wind Roadmap, the Philippines has an estimated potential capacity of 178 GW from offshore wind resources. This is expected to help achieve the target of increasing the share of renewables to 35% of the energy mix by 2030 and 50% by 2040. — Ashley Erika O. Jose
BPO industry signs skills-upgrade partnership with StackTrek
THE Information Technology and Business Process Association of the Philippines (IBPAP) said it signed a partnership agreement with global training company StackTrek to improve its workforce’s digital and artificial intelligence (AI) skills.
The IBPAP said in a statement on Thursday that the National IT Talent partnership with StackTrek will focus on “embedding training” for industry-relevant skills into the curriculum and internship programs of higher education institutions.
“In what could be an AI-driven economy, proactive collaboration is crucial to empower the Filipino talent, enabling them to flourish in roles that involve higher-value work,” IBPAP President and Chief Executive Officer Jack Madrid said.
IBPAP said the partnership will lead to the establishment of an AI and Programming Academy; the StackLab which will establish AI research and development units and deliver AI software applications to clients; and the AI Executive Education Program.
“The partnership between StackTrek and IBPAP represents a groundbreaking collaboration that will help the Philippine IT-BPM industry seize the tremendous economic opportunity presented by AI,” StackTrek Chief Executive Officer Bill Yuen said.
“We believe that with our combined expertise, resources, and vision, we can empower individuals and organizations to embrace AI, redefine business landscapes, and drive the industry forward,” he added.
For 2023, the IBPAP set a target of 1.7 million full-time employees (FTEs) and $35.9 billion worth of revenue. Last year, IBPAP grew revenue by 10.3% to $32.5 billion with FTEs rising 8.4% to 1.57 million. — Revin Mikhael D. Ochave
ERC orders distributors to explain higher-than-approved power charges
THE Energy Regulatory Commission (ERC) has issued show-cause orders against some distribution utilities (DUs) for charging more than authorized power generated under emergency power supply agreements (EPSAs).
In an advisory posted on Wednesday, the ERC reminded DUs that they can only procure EPSAs after a declaration of force majeure.
ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that the advisory was meant to clarify the procedure for procuring emergency supply.
“We observed from our records that some DUs signing EPSAs are implementing rates that do not comply with the DoE (Department of Energy) circular stating that the EPSA rate cannot be higher than the latest ERC-approved tariff for the same technology in the area. We have issued show-cause orders to some DUs because of this,” Ms. Dimalanta said in a Viber message on Thursday.
Ms. Dimalanta did not identify the DUs other than to say that they include Manila Electric Co. (Meralco).
Meralco signed EPSAs with AboitizPower Corp. to partly cover the 670-megawatt capacity it lost from South Premiere Power Corp.
“To avoid these situations, the advisory is issued so that the DUs will implement the correct rate and file their EPSAs without delay so we can authorize the proper rate for them,” she said.
In its advisory, the ERC also ordered EPSAs to be filed immediately upon signing, adding that such deals are not eligible for subsidies like the Universal Charge for Missionary Electrification for Small Power Utilities Group areas. — Ashley Erika O. Jose