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Debt service bill surges in February

A horse-drawn Kalesa passes through the Ayuntamiento building in Intramuros, Manila, Nov. 6, 2017. The Bureau of the Treasury’s office is located at the Ayuntamiento building. — REUTERS/DONDI TAWATAO

By Luisa Maria Jacinta C. Jocson, Reporter

THE NATIONAL Government’s debt service bill surged to P375.714 billion in February on the back of significantly higher amortization payments, the Bureau of the Treasury (BTr) reported.

Data from the BTr showed the February debt service bill jumped by 1,135% from P30.423 billion in the same month a year ago.

Month on month, debt payments rose by 685.5% from P47.831 billion in January.

Of the total debt service bill in February, the bulk or 90.9% went to amortization. The rest went to interest payments.

Principal payments for February soared to P341.605 billion from just P2.193 billion a year ago and P861 million in January.

Payments for domestic debt skyrocketed by 90,756% to P303.461 billion in February from P334 million a year ago.

Amortization on foreign obligations rose by 1,951% to P38.144 billion in February from P1.859 billion in the previous year.

Meanwhile, interest payments rose by 20.8% to P34.109 billion in February from P28.23 billion a year ago.

Month on month, interest payments fell by 27.4% from P46.97 billion in January.

Broken down, interest on local debt declined by 14% to P21.924 billion from P25.507 billion a year ago.

Domestic interest payments consisted of P12.723 billion in fixed-rate Treasury bonds, P7.458 billion in retail Treasury bonds, and P1.31 billion in Treasury bills.

Interest on foreign debt surged by 370% to P12.815 billion in February from P2.723 billion a year ago.

In the first two months of the year, the debt service bill reached P423.545 billion, 72% higher than P246.261 billion in the same period last year.

Amortization payments during the period more than doubled (124.6%) to P342.466 billion from P152.48 billion.

Meanwhile, total interest payments dropped by 13.5% to P81.079 billion in the two-month period from P93.781 billion a year ago.

HIGHER RATES
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa in a Viber message said rising interest rates drove up debt payments, on top of elevated debt levels.

At the end of February, outstanding debt hit a record high of P13.75 trillion.

“Higher debt service data was due to a combination of factors: higher interest payments due to aggressive Federal Reserve rate hikes (and) higher inflation that increased overall government expenditures including interest payments on borrowings,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The US Federal Reserve has hiked rates by 475 basis points (bps) since March 2022, bringing the Fed funds rate to 4.75-5%.

The Bangko Sentral ng Pilipinas (BSP) has raised rates by 425 bps since May 2022, bringing the key policy rate to a near 16-year high 6.25%.

Inflation slowed to 8.6% in February from a 14-year high 8.7% in January. However, this was still above the central bank’s 2-4% target and 6% full-year forecast.

“Debt servicing could still be higher from March to April, especially in April due to large Treasury bond maturities that are included in the government’s principal payments and still relatively higher interest rates that lead to more expensive borrowing costs,” Mr. Ricafort said.

This year, the government’s debt service program is at P1.6 trillion, 23.3% higher than the P1.298-trillion program in the previous year.

Debt service payments reached P1.293 trillion in 2022, up by 7.4% year on year.

PHL debt vulnerability seen as ‘moderate’ — ADB

THE PHILIPPINES’ public debt and external debt vulnerabilities are seen as “moderate,” the Asian Development Bank (ADB) said.

In its latest sovereign debt heat map analysis from 2022-2023, the ADB said the Philippines ranks “relatively poorly” due to current account deficits, currency depreciation, and low import coverage of reserves.

The heat map determines thresholds against which the relevant risk indicators can be included in the low, moderate, or high categories.

The ADB gave the Philippines a “moderate” ranking in the heat map, as its public debt took up 59.2% of gross domestic product (GDP) and external debt at 27.1% of GDP from 2022 to 2023.

The National Government’s outstanding debt hit a record high of P13.75 trillion at the end of February.

The ADB cited several risks that contributed to higher debt for many countries.

“Persistent current account deficits are a major risk factor in Bhutan, Maldives, Mongolia, the Federated States of Micronesia, the Lao People’s Democratic Republic, Nauru, Georgia, the Philippines, and Kazakhstan,” the ADB said.

In 2022, the Philippines’ current account deficit widened to $17.8 billion from the $5.9-billion shortfall in the previous year.

The current account deficit is expected to narrow to a $17.1-billion deficit which is equivalent to -4% of GDP, the central bank said.

The ADB also noted volatile exchange rates heighten risks, particularly in Lao People’s Democratic Republic, Timor-Leste, Myanmar, Korea, the Philippines, and Nauru.

The peso slumped to an all-time low of P59 against the US dollar in October last year amid aggressive monetary tightening and elevated inflation.

The ADB’s Asia Sovereign Debt Monitor showed that many countries’ debt remains well above the regional average. Many countries sharply accumulated high levels of debt during the coronavirus disease 2019 (COVID-19) pandemic to scale up emergency and recovery spending to protect their citizens and prop up their economies, the ADB noted.

“Several other countries saw debt ratios grow by more than 20 percentage points (ppt): the Lao People’s Democratic Republic (43 ppt), Fiji (36 ppt), and the Philippines (22 ppt),” it said.

While public debt ratios are stabilizing in the medium term, the ADB said these are still at “significantly high levels by historic standards and not uniformly so across the region.”

“Even where ratios seem to be somewhat in check, growing costs and difficulty of refinancing debt amid quantitative tightening constitutes an increasing drain on vital fiscal resources at a time when economies are reeling from the pandemic and struggling to maintain or rebuild at least some space for further fiscal support, lest long-term development goals will have to suffer,” it added.

As of end-December, the Philippines’ debt-to-GDP ratio stood at 60.9%. This is still above the 60% threshold considered manageable by multilateral lenders for developing economies.

To better stabilize debt levels across the region, the ADB said that countries will need to address risks such as low economic growth, persistent inflation, and rising commodity prices.

Data showed that a lack of fiscal normalization would bring debt ratios to 58% of GDP by 2025, or nearly 7 ppt above the baseline.

The ADB said governments must implement reforms that will rationalize fiscal expenditure, optimize subsidy schemes, and implement a sovereign debt restructuring mechanism.

“While there are few universal prescriptions for a group as diverse as Asia and the Pacific, full transparency about their debt and its management, and increased mobilization of domestic resources to the extent possible, should be a prerogative to all,” it added. — Luisa Maria Jacinta C. Jocson

Manila’s heritage sites in danger amid rapid development

NATIONAL SHRINE of Our Lady of the Abandoned, Sta. Ana, Manila — BERNARDINO M. CABILIN

By Brontë H. Lacsamana, Reporter

STEPHEN JOHN PAMORADA, a 29-year-old native of the San Nicolas district in Manila, the Philippine capital, grew up in an area filled with colonial period architecture.

When he was young, he would type “old Manila” in Google to find beautiful photos of how the city used to be. In contrast, he would see with his own two eyes the same spots in the photos being demolished over time, one by one.

“That was the turning point for me to get involved in heritage conservation,” Mr. Pamorada said via Zoom.

Now as lead convenor of Manileños for Heritage (M4H) and tour guide with Renacimiento Manila, he helps Manileños gain knowledge about the rich heritage of their city and the skills to preserve it.

“This means empowering locals to write letters and petitions to the National Historical Commission of the Philippines (NHCP) or National Commission for Culture and the Arts (NCCA) to save heritage sites,” he said.

Most recently, residents of Village 885, Zone 97 in Manila petitioned to block the construction of a major property developer’s condominium project about 170 meters from Spanish colonial-era Santa Ana Church.

In January, heritage advocacy group Renacimiento Manila also sounded the alarm to protect two sites from demolition — the 1920s Art Nouveau-style Traders Building in Binondo, and the Zamora and Paterno Houses built in the 1800s in Calle Hidalgo, Quiapo.

Under the National Cultural Heritage Act of 2009, a structure that’s more than 50 years old must be protected, and any construction work within it and around its 200-meter buffer zone must be authorized by NHCP.

“Unfortunately, there’s internal politics in LGUs where their cultural office and the engineering and building officials that issue demolition permits fail to coordinate,” said Mr. Pamorada, citing instances where the heritage law is not closely followed.

As middlemen, advocates can write the mayor a letter about this, or call the attention of cultural agencies so they can monitor the situation and ensure less destructive plans for the sites.

Both NHCP and NCCA are at the forefront of safeguarding Philippine heritage, whether these are historical structures, traditional food, art forms like music and dance, or intangible practices.

“We’re mandated to conserve, promote, and popularize the nation’s cultural heritage… because of its primordial role in fostering nationalism and uniting our people,” NCCA chief Victorino M. Manalo told an April 18 briefing for National Heritage Month in May.

In 2021, NCCA published the Philippine Registry of Cultural Property, which showed that the district of Sta. Ana had the most heritage sites at 88, followed by the districts of San Nicolas and Malate with 78 and 55.

The numbers have likely gone down due to rapid urban development, said Mr. Pamorada, who used to lead the data gathering.

Much can still be done for the Traders building in Binondo and Zamora Houses in Quiapo because their facades are intact, but many other structures are not so lucky.

The Capitol Theater made headlines in 2022 after almost completely being demolished, with only ruins of its worn-out facade remaining and seemingly waiting to be torn down for a condominium to take its place.

‘A COUNTRY OF LAWS’
Making a registry is the easy part, with NCCA and the Heritage Conservation Society of the Philippines having done their own audits, architect and urban planner Paulo G. Alcazaren said in an interview.

“The problem is that most landowners and developers just go over the heads of the local government,” he said. “There are many guidelines — we are a country of laws, after all — but nobody follows them.”

One of the themes for National Heritage Month is urban heritage, which “emphasizes the call for heritage conservation especially in the urban setting in the 21st century.”

Last year, local housing prices rose faster, driven by strong demand for duplex housing and condominium units, according to the Philippine central bank.

The property development was evident in the residential real estate price index, which went up by 7.7% year on year in the fourth quarter, quicker than 4.9% in 2021.

“In an imperial Manila setup, where we crowd here and create demand for housing and commercial spaces, the cost-benefit analysis is clear,” said John Paolo R. Rivera, an economist and associate director at the Asian Institute of Management’s (AIM) Dr. Andrew Tan Center for Tourism.

“Developers know it’s less costly and more profitable to demolish and then build, than to sustainably preserve and operate old sites,” he said.

He added that it’s only in places where tourism is the bread and butter, like Intramuros in Manila, Vigan in Ilocos, or Taal in Batangas, where investing in heritage is an easy choice. It’s not the case elsewhere.

Marjorie Jayne O. Zamudio, sales manager for Bridgeway Travel & Tours, said a few inbound tourists express interest in learning about authentic Filipino culture, lifestyle and values in Metro Manila.

“Agencies like ours that do customized tours based on the requirements of our clients find that there’s a niche that seeks out local heritage,” she said via Zoom.

Due to rising demand, the tour operator developed a program called “Back to the Roots,” formed from various clients who were Filipinos by blood but born and raised overseas, mostly in the US.

Heritage is a big priority for people who want to go back and understand their culture, Ms. Zamudio said.

International tourist arrivals in the Philippines hit 2.65 million last year, according to the Department of Tourism (DoT), exceeding the target by a million. The target this year is 4.8 million.

Mr. Manalo of NCCA said heritage sites could only draw big income for the Philippine economy if these are well-preserved and promoted, as with what the beautifully maintained Angkor Wat does for Cambodia.

Mr. Pamorada said districts in Manila like Quiapo, Santa Ana and his neighborhood of San Nicolas all have the potential to become beautiful tourist areas in a city that’s otherwise known for urban decay.

“Our culture may come across as lacking compared with South Korea, which invests in soft power like K-pop and K-dramas, or Thailand, which invests in gastro-diplomacy to popularize their food,” he said.

But there are efforts to change this mindset — cultural mapping by Grupo Kalinangan, heritage walks by Renacimiento Manila and NCCA’s programs to incentivize local governments to keep cultural inventory.

AIM’s Mr. Rivera said the monetary value of heritage sites goes up from the fact that, after hundreds of years, they still exist because efforts and funds were put in to keep them beautiful.

“That will only happen here if we can better acknowledge their potential.”

San Miguel’s beer unit posts 38% profit increase

SAN MIGUEL Corp.’s beer business reported a 38.2% rise in consolidated net income for the first quarter to P6.8 billion due to higher revenues, the company said during the weekend.

San Miguel Brewery, Inc. reported a 29.95% increase in revenues to P38.3 billion for the three months from the P29.7 billion posted in the same period last year.

The company said in a statement that the increase in its top line was due to “the positive sales performance of both its domestic and international operations amid the continued easing of COVID-19 restrictions.”

Its consolidated operating income also rose by 25% to P8.4 billion compared with the previous year.

The company’s domestic beer volumes increased by 26.1% driven by its new brand campaigns, offtake-generating programs, and easing restrictions.

For its international operations, the company reported a 28.5% surge in sales volume due to its export business and Hong Kong operations.

San Miguel Food and Beverage, Inc. operates its beverage business through San Miguel Brewery and Ginebra San Miguel, Inc.

The subsidiaries of San Miguel Brewery include Iconic Beverages, Inc.; Brewery Properties Inc.; San Miguel Brewing International Ltd.; San Miguel Brewery Hong Kong Ltd.; San Miguel (Baoding) Brewery Co., Ltd.; San Miguel Beer (Thailand) Ltd.; San Miguel Marketing (Thailand) Ltd.; and PT. Delta Djakarta Tbk. — Adrian H. Halili

DITO prepares to pilot-test low Earth orbit satellite this year

DITO Telecommunity Corp. is expecting to finalize a deal that will allow it to start this year pilot testing low Earth orbit (LEO), a satellite technology that can offer connectivity for far-flung areas.

The deal is with OneWeb Network Access Associates Ltd., a London-based company backed by the United Kingdom government and India’s Bharti Enterprises Ltd.

“It is not yet finalized. We are expecting it to be finalized as soon as possible. Our talks with them are already in the advanced stage, it is more of checking whether [everything’s] okay and the commercial rates,” DITO Chief Technology Officer Rodolfo D. Santiago said.

The expenses for LEO satellite are expected to be a bit more expensive, he said, adding that the companies have yet to discuss in detail how these will be divided.

“It has not been talked about in detail. It’s costly compared to fiber and microwave. But in terms of other satellite technology, the LEO technology is better because it has lower latency and it has higher capacity,” Mr. Santiago said.

Mr. Santiago said DITO is also in talks with other companies that offer different solutions.

“We are also talking with other satellite companies that have sent their offer,” he said.

“There are other satellite companies that have a different technology like geostationary. We are also looking into that. In fact, I think there will be a discussion on its proof of concept for pilot testing to check if it’s okay,” he added.

A geostationary satellite or an Earth-orbiting satellite is placed at an altitude of approximately 35,800 kilometers (km), while a LEO satellite is normally placed at an altitude of around 1,000 km above Earth.

According to Mr. Santiago, areas like the Autonomous Region in Muslim Mindanao, Basilan, Sulu, and Tawi-Tawi will benefit from the rollout of satellite connectivity.

“But even here in Luzon and Visayas, there are off-grid places like those in the mountainous areas in the north, how will you connect them?,” he said.

OneWeb’s network is composed of 648 satellites along 12 synchronized orbital planes 1,200 km above Earth. — Justine Irish D. Tabile

Ayala healthcare unit seeks further business expansion

AYALA CORP. sees growth potential in its healthcare unit AC Healthcare Holdings, Inc. as it seeks to expand its businesses across the country, an official said on Friday.

“To date, AC Health has served 6.1-million lives our goal is to touch around 24-million Filipinos by 2030. We are now gearing up for further growth,” AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said during the parent firm’s annual stockholders’ meeting.

Its generic pharmaceutical business, Generika Drugstore, plans to open an additional 50 stores this year from 750 locations across the country.

“Our goal is to reach 1,000 stores nationwide by 2025, and ensure that all Filipinos thorough the country have access to affordable and quality generic medicines,” Mr. Borromeo added.

Additionally, I.E. Medica, Inc. and MedEthix, Inc. plan to bring in more generic and biosimilar medicines for cancer, women’s health, and primary care.

“[This] will allow us to expand our local pharma cabinet to bring down treatment costs in the country,” he said.

AC Health’s hospitals and clinic group has been integrated under the Healthway Medical Network. The rebranding will be launched in phases throughout the year. It continues to expand its network toward different regions.

“The rebranding encompasses all of our multi-specialty clinics, the ambulatory and surgical center in the Philippine General Hospital, our four hospitals, and the soon-to-open cancer center,” Mr. Borromeo said.

The company plans to open three new clinics in Cebu, Cagayan de Oro, and Davao, which will bring its total network to 15 outpatient centers and 200 corporate branches.

“As we continue to build our ecosystem, we will leverage the synergies within our network to deliver quality and affordable healthcare for all,” he added.

Meanwhile, Mr. Borromeo said that the company has invested about P10 billion to date. For the year, the company has allocated P7 billion in capital expenditures.

He said that going public is not part of AC Health’s roadmap as it still has sufficient capital from its parent company.

On Friday, Ayala Corp. shares rose by 0.95% or P6 to close at P639 apiece. — Adrian H. Halili

SEC extends amnesty for filing reports until June 30

THE Securities and Exchange Commission (SEC) has extended the deadline for amnesty applications for late and non-filing of annual financial statements, general information sheets, official email addresses, and mobile phone numbers.

In Memorandum Circular No. 6 of 2023, the regulator said on Friday that eligible companies have until June 30 to complete the requirements for amnesty application under Memorandum Circular No. 2.

The commission extended the deadline for amnesty applications due to the number of companies expressing interest in availing of the program and an overlap in submission dates with the Bureau of Internal Revenue.

“The SEC launched the amnesty program for non-compliant corporations, as well as those whose certificates of registration have been suspended or revoked, in the middle of March through SEC Memorandum Circular No. 2, Series of 2023,” it said in a statement.

The regulator has also extended to 90 days from the date of payment to submit companies’ latest financial statements. It previously set the date of submission to 45 days.

“The amnesty program is part of the commission’s efforts to encourage its supervised entities to comply with their reportorial requirements under Republic Act No. 11232 or the Revised Corporation Code of the Philippines,” the SEC added.

Additionally, the SEC seeks to identify active and inactive corporations by enhancing and organizing its digital database.

After the deadline passes updated penalties and fines will be implemented for noncompliance with the requirements on July 1.

The regulators had previously disclosed that it was considering an increase in fines and penalties imposed on corporations for the late and non-filling of reportorial requirements.

The SEC said that it will raise penalties by 20% from the base penalty per offense. These will be imposed on a per report and per year basis with an additional monthly fine until the requirements are submitted.

Corporations may be fined up to 27,000 and P54,000 with an additional monthly fine of P500 up to P1,000 depending on their retained earnings. — Adrian H. Halili

Dibs on the Lexus RZ 450e

The first battery electric vehicle of Lexus, the RZ 450e, will be officially unveiled in the Philippines tomorrow. — PHOTO BY KAP MACEDA AGUILA

TOMORROW is quite the momentous day for Lexus Philippines as it presents to our market the very first pure-electric model of the luxury brand: the Lexus RZ. We don’t want to preempt all the good stuff you’ll get to know at the launch, but we can tell you this much: The sole (for now) 450e variant is engaging to drive and yes, very Lexus. “Velocity” was invited last week to join only a handful of media practitioners given dibs on a couple of fresh-smelling RZs. We got to ride and drive a Sonic-Iridium-colored vehicle.

We think the RZ will be a game-changer — not in the least because Lexus has already established itself in the electrified mobility arena through its hybrids, long before everyone else went that route. Now, it has opened the lid on full electrification. We think Toyota won’t be far behind. — Kap Maceda Aguila

Toyota recalls select Lexus units due to safety issue 

PHILSTAR FILE PHOTO

TOYOTA Motor Philippines Corp. (TMP) has issued a product recall on select Lexus units because of an issue with its vehicle safety system.

The car manufacturer said the customer satisfaction campaign in the Philippine market would cover 115 officially sold vehicles consisting of 40 Lexus NX models with a production period of Nov. 15, 2021 to Dec. 20, 2022 and 75 Lexus NX HEV (hybrid electric vehicle) models with a production period of Nov. 17, 2021 to Dec. 6, 2022.

For the global market, the production period of the affected vehicles is from April 15, 2021 to Feb. 1, 2023. The Lexus brand is a luxury vehicle owned by Toyota.

“In line with its corporate commitment to product safety and quality, Toyota has initiated a customer satisfaction campaign for Lexus Safety System (LSS) 3.0 forward recognition on certain Lexus NX and NX HEV,” TMP said in an advisory dated March 14 uploaded on the Department of Trade and Industry website.

Under the recall campaign, TMP said the dealers will perform reprogramming on the affected vehicles to update the proactive driving assist (PDA) software in the forward recognition camera, which would be at no charge to the owners.

“Due to the programming of the PDA software within the forward recognition camera, when a subject vehicle passes a line of stopped or parked vehicles, there is a possibility of a discrepancy on detected objects between the PDA and LSS + system,” TMP said.

“If this occurs, the camera will be rebooted and LSS+ functions will be inoperative for approximately four seconds, during which time the pre-collision system (PCS) will be inoperative and the PCS warning light will be illuminated. After rebooting, the functions will be restored and operative,” it added. — Revin Mikhael D. Ochave

New bags for old

SAMSONITE’s launch of its first ever Luggage Trade-In campaign in the Philippines, in support of the World Wide Fund for Nature

Samsonite is holding a luggage trade-in campaign

WOULDN’T you like to get a new suitcase at 35% off and help the environment at the same time?

American luggage company Samsonite unveiled its Luggage Trade-in campaign in the Philippines during a press conference in BGC on April 25. One can pop into stores Samsonite suitcases are sold (the list is below) with any old piece of luggage of any brand or size, and get 35% off the Niar and Oc2Lite models.

The Niar has features such as double wheels, integrated carry handles, a dual-tube trolley puller, compression straps, a TSA combination lock, and an expander, and is available in graphite and silver. The Oc2Lite is a bit more exciting with deep red, navy blue, and jade gold colors.

The bags that are traded in will be sent to Envirotech, a Davao-based recycling company, which will process the suitcases to be made into desks which will then be forwarded to selected schools. Furthermore, with every trade-in purchase, Samsonite will donate ₱100 to WWF-Philippines. Michael Corpuz, Country Head for Samsonite Philippines told BusinessWorld, “Our shift is more towards giving back, and what [gives back] more than in education,” he said. He points out that the campaign started in Asia a few years ago, but is only being launched in the Philippines now for the first time.

The luggage industry straddles two fields: fashion and travel, and both are huge contributors to pollution. Mr. Corpuz told BusinessWorld about initiatives Samsonite is taking towards sustainability. He talked about Recyclex, a fabric made from recycled water bottles. This material is used in some suitcase linings and also in backpacks.

“Considering the size of Samsonite, it’s considerable,” he said when asked about the waste generated by discarded luggage. But he says that the sustainability efforts of Samsonite are able to offset that. “What we do now is the same program that we do now, that it doesn’t end up in landfills but rather, put to good use.” He said that the company plans to become carbon-neutral by 2025. “We’re on track with that.”

The Luggage Trade-in offer runs until May 31. Participating stores include Samsonite stores in Greenbelt 5, Glorietta 3, Central Square Mall, Podium, Shangri-La Plaza, Trinoma, SM Mall of Asia, SM Megamall, SM North EDSA, SM Southmall, Robinsons Magnolia, Paseo de Sta Rosa, Outlets at Lipa, and SM Clark; and department stores such as SM Makati, SM Megamall, SM Mall of Asia, SM North EDSA, SM Aura, Rustan’s Makati, Rustan’s Shangri-La, Rustan’s Alabang, Rustan’s Gateway, Rustan’s Cebu, Robinsons Ermita, and Landmark Trinoma. — Joseph L. Garcia

BPI’s seven-year pitch

BPI Retail Lending and Bancassurance Group Head Dennis Fronda — PHOTO BY KAP MACEDA AGUILA

You can pay for that car loan over seven years

By Kap Maceda Aguila

IF YOU DIDN’T know it yet, a car loan is key to realizing mobility for a great majority — up to some 80% — of us. But, to be honest, things can get a little dicey when the monthly payments need to be met. Depending on your financial capability and the regular demand on your budget, servicing a car loan can cause a great deal of anxiety.

That’s exactly what the folks at the Bank of the Philippine Islands (BPI) were thinking when they cooked up the aptly named “Hot Summer Promo” — it is literally scorching out here, and these deals are coming in hot. “Today, we are introducing another innovation in auto loans (through the) MyKotse which extends the loan term beyond the usual 60 months to 72 to 84 months, which will make owning a car even more affordable. We understand that the monthly amortization is a deterrent to many. To address this, we have stretched the loan term to reduce the monthly payments to fit the family budget of more Filipinos,” said BPI Executive Vice-President and Head of Consumer Banking Ginbee Go in a recorded statement last week, played back during the program’s launch event. BPI is also offering extended payment terms on its housing loans (branded MyBahay).

Through MyKotse, BPI now becomes the only bank in the country to offer “extended loan tenors of six years and seven years, depending on the car’s engine displacement,” up over the industry standard of five years.

BPI offers a minimum auto loan amount of P500,000 and a minimum loan term of three years — applicable to brand-new passenger cars (including SUVs and pickups) and big bikes. These must be for personal or private use. To illustrate how lengthening the payment period affects the monthly servicing of the loan, BPI Retail Lending and Bancassurance Group Head Dennis Fronda said during his presentation that a Honda City may typically entail a monthly payment of P18,000 over five years. This sum will be trimmed down to P15,000 per month over seven years. Another benefit is the ability to go upmarket in vehicle class for the same monthly spend.

For housing loan clients under the MyBahay program, the minimum loan amount is P1 million, with a minimum loan term of 10 years. Packaged in its “Hot Summer Promo,” BPI is also raffling off free all-expenses-paid trips to a local or international destination for clients and partner brokers/dealer agents.

According to Mr. Fronda, vehicles (with the exception of several brands) with an engine displacement of above 1.4 liters are eligible for the full 84-month term. He added to “Velocity” that BPI is still in the process of finalizing its list of qualified brands for the six-year term. “Six years is still not bad,” he underscored.

Notably, those looking at getting electrified vehicles will be pleased to note that BPI is putting them (hybrids and battery electrics) in the mix. “Even before all the noise on EVs, we had been including these vehicles and making them available to our customers,” added the executive.

The “Hot Summer Promo,” runs from April 24 to May 31, 2023 for online, branch, and dealer/developer-referred accounts. Qualified individual and corporate clients include those whose applications “are received within the promo period and booked on or before June 30, 2023 for auto loans, and on or before July 31, 2023 for housing loans.”

Through the program, BPI expects “to generate 30% higher business volume for (its) auto and housing (loan portfolio).” Tucked in the programs are all-in offers of low rates, free insurance, and waived bank fees.

“With the continuous recovery of the economy and upbeat consumer confidence in spending, we will continue to explore new opportunities to capture a wider market share. This will be done through remarkable payment solutions and exciting offers such as the ‘Hot Summer Promo’ to our clients,” concluded Mr. Fronda.

BEXCS Logistics sets Hong Kong, Taiwan expansion

BULACAN-BASED BEXCS Logistics Solutions, Inc. is set to expand its footprint in Asian neighbors Hong Kong and Taiwan by partnering with logistics groups in these territories.

“We’ve partnered with numerous companies and organizations from Taiwan and Hong Kong, and we hope that through this fruitful partnership, we will open more financial stream for the company while staying committed to our goals of providing opportunities to many people,” BEXCS Chairperson Marjorey Rubio said in a media briefing on Friday.

Ms. Rubio said that the expansion in Hong Kong and Taiwan was possible due to the company’s local partners.

“We have local partners in each country because I always believe that collaboration is better than competition. We don’t want to waste the resources that the current players have,” she said.

“For us to be able to cater [to] Southeast Asia including Hong Kong and Taiwan, we are partnering with local logistics while integrating our system to them so that we can be at par with the competition in Hong Kong and Taiwan,” she added.

BEXCS said that its expansion received support from logistics companies such as GTS Express, Kanway Global, Fujitrans, DNP Logistics Co. Ltd., and Gothong-Suzue Philippines, Inc.

Meanwhile, the company is planning to strengthen its ties with Taiwan’s XTurn, Xmart, BXBase, 3S Biotech, EAK Engineering Consultants & Technology Co., Ltd., Royal Global Business Center Corp., Cloud8 Taiwan Restaurant, and Taiwan Chamber of Commerce.

By the second or third quarter of the year, the logistics company is aiming to open 278 branches nationwide. Of the planned new branches, 81 will be owned by the company and the rest will be franchised.

“We already have our blueprint. As a matter of fact, all of these branches, in total, will be at about 1,300 plus to cover the entire archipelago,” Ms. Rubio said.

“It is a combination of franchise and company-owned branches. We are looking at opening in the second to third quarter,” she added.

Aside from the new branches, the company will be opening three major hubs in Luzon, Visayas, and Mindanao, while strengthening its partnerships with local players such as Mindatrans, Isend and FAST Logistics.

“We will also have 37 sorting facilities, which will be distributed across the Philippines,” Ms. Rubio added.

In 2022, the company was said to have generated about $168,000 in revenues from logistics alone. It is planning to fund its aggressive expansion through its franchise line, support from its headquarters in Hong Kong — BEXCS International, Ltd. — and partners.

In the past three years, the company has expanded to three lines of business, which are BEXCS Franchise, BEXCS Logistics, and BEXCS Worldwide. — Justine Irish D. Tabile

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