DoTr eyes new provincial airports

August 4, 2022 | 12:34 am

THE MARCOS administration is looking into developing more provincial airports, the Department of Transportation (DoTr) said on Wednesday.

“We are studying to build new airports in Zamboanga, Dumaguete, Masbate, and Bukidnon,” Transportation Undersecretary for Planning and Project Development Timothy John R. Batan said in Filipino during a televised briefing.

Mr. Batan clarified the airport projects in Zamboanga, Dumaguete, Masbate, and Bukidnon “are in the pipeline and are still in the early stages of project development.”

At present, there are existing airports in Zamboanga City, Dumaguete City, and Masbate City.

There is currently no airport in Bukidnon. Last year, Senator Juan Miguel F. Zubiri said the DoTr is developing a P1.8-billion airport in Barangay Maraymaray in Don Carlos, Bukidnon.

“The objective is to make our airports safer and expand their capacity to accommodate more flights and passengers,” Mr. Batan said.

The new administration will ensure continuity of ongoing airport projects, especially San Miguel Corp.’s P740-billion New Manila International Airport (NMIA) project in Bulacan.

“We will also coordinate with the Cavite province for the Sangley airport,” he said.

The Cavite province is currently soliciting alternate bids to challenge the unsolicited proposal to build the Sangley Point International Airport (SPIA) submitted by the SPIA Development Consortium.

Cavite has been pushing for the development of the Sangley airport as an alternative to Ninoy Aquino International Airport (NAIA), the country’s main gateway, as demand for air transport is expected to increase in the next 30 to 40 years.

STILL INTERESTED
Meanwhile, Metro Pacific Investments Corp. Chairman Manuel V. Pangilinan said at a separate briefing on Wednesday that the company remains interested in the airport project in Cavite.

“It’s a good collateral project for NAIA… In the long run, it can be a replacement for NAIA,” Mr. Pangilinan said.

In his first State of the Nation Address (SONA) last month, President Ferdinand R. Marcos, Jr. said his administration will “create more international airports to help decongest the bottleneck at the Manila airport.”

The Civil Aviation Authority of the Philippines (CAAP), an arm of the DoTr, recently started the procurement process for the expansion of airports in Vigan, Baler, Roxas City, and Virac.

Under the Duterte administration, completed projects included the new passenger terminal at Clark International Airport, the new Bicol International Airport, Mactan-Cebu International Airport, Bohol-Panglao International Airport, Puerto Princesa International Airport, Zamboanga International Airport, Catarman Airport, Calbayog Airport, Siquijor Airport, General Santos Airport, and Ormoc Airport.

“Other notable projects for the country’s aviation and airports include the establishment of the long-delayed communications, navigation, surveillance/air traffic management, as well as the night-rating of 23 commercial airports,” the DoTr said.

Transport Secretary Jaime J. Bautista has said the department aims to “transform the Philippine transport industry and elevate it to global standards.”

There are currently 90 airports in the country, according to the CAAP.

CLARK’S NEW ROUTES
Meanwhile, Clark International Airport, operated by Luzon International Premier Airport Development Corp., said it is expanding its connectivity with new routes, including Boracay.

The airport said low-cost carrier Philippines AirAsia, Inc. is set to resume its Clark-Caticlan flights on Aug. 16.

It also noted that South Korea is now more accessible as flights from Clark have resumed for South Korean airline T’way Air and Royal Air Philippines, a Philippine-registered budget airline. — Arjay L. Balinbin

Economic recovery on track despite slower Q2

August 4, 2022 | 12:33 am

Mural-apolinario-mabini — A cyclist rides past a mural at the foot of Mabini Bridge, formerly called Nagtahan Bridge, in Manila. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

THE PHILIPPINE economy will continue to recover “rapidly” this year, although the pace of expansion likely slowed in the second quarter, economists at First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said.

“The country’s economic recovery should remain on track, despite likely slight easing starting Q2. More robust economic data — higher employment, (National Government) spending and capital goods imports — as well as firm growth in exports and OFW (overseas Filipino workers) remittances should provide the impetus,” the economists said in their July report of The Market Call.

Despite slower growth in the second quarter, FMIC and UA&P economists said Philippine gross domestic product (GDP) will still expand by 6-7% this year. This is slightly lower than the 6.5-7.5% GDP target set by economic managers for 2022.

The Philippine Statistics Authority (PSA) will release second-quarter GDP data on Aug. 9. In the first quarter, GDP expanded by 8.3%.

“The outlook for continuing fast economic recovery for H2 still looks reassuring as the economy added nearly half a million jobs in May (esp. trade, construction and manufacturing) and consumer sentiment improved,” the economists said.

They said the jobs market remained strong even after the election campaign season ended. While the jobless rate in May reached 6%, higher than 5.7% in April, they said this was mainly due to the rise in labor participation rate to 64% from 63.4% in April.

Cash remittances rose by 1.8% to $2.43 billion in May, bringing the five-month total 2.5% higher to $12.59 billion.

“We expect infrastructure spending to accelerate in (the second half) as the National Government fiscal space has expanded with better tax revenues,” FMIC and UA&P economists said.

In the five months to May, infrastructure and capital outlays spending reached P334.6 billion, up by 0.7% year on year.

INFLATION YET TO PEAK
At the same time, FMIC and UA&P lowered their inflation forecast to 5-5.2% this year, from 5.5% previously.

The projection comes after inflation hit 6.1% in June due to rising prices of oil, food and other commodities. This was the third consecutive month inflation breached the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target band.

Year-to-date headline inflation reached 4.4% as of end-June, but still below the BSP’s 5% full-year projection.

“Crude oil prices appeared to peak in early June near the $120-per-barrel level as it trended downward thereafter. By mid-July it had fallen below $100 per barrel and may only have monetary upswings as the global economic slowdown cools demand. Thus, we may see the peak of local inflation in the third quarter,” the FMIC and UA&P economists said.

The Philippine Statistics Authority will release July inflation data on Friday.

Weak consumer spending due to high inflation may be offset by the positive income impact of the peso depreciation on OFW remittances, business processing outsourcing revenues, and exports.

“We see the peso depreciation to boost income of some 70 million Filipinos and offset likely softer consumer spending due to the elevated inflation,” the economists said.

The peso depreciated by 2.3% to P53.57 against the dollar in June, which was the biggest drop among its peers in Asia. It further weakened beyond the P56-level against the US dollar in July.

“The policy rate hike by the BSP did little to peso as other global central banks tightened more aggressively. The swift downfall roused the BSP to consider a larger rate hike in the next policy meeting which it did, with a 75-basis-point policy rate hike on July 14^th,” FMIC and UA&P said.

“The peso will likely recover a little due to recent US dollar softening and likely lower crude oil prices for the rest of the year.” — Diego Gabriel C. Robles

Gov’t likely to hit 57% of targets under PDP this year

August 4, 2022 | 12:32 am

THE PHILIPPINE government is likely to achieve over half of its targets under the Philippine Development Plan (PDP) this year.

The Statistical Indicators on Philippine Development (StatDev) 2021 report released on Tuesday showed around 56.9% of the 471 indicators showed either a “high” or “medium” likelihood of achieving these goals this year.

Based on the report released by the Philippine Statistics Authority (PSA), 208 of the 471 indicators have a “high likelihood” of achieving end-of-plan targets in 2022.

Sixty indicators had a “medium likelihood” which indicates a target may or may not be achieved.

On the other hand, 203 indicators showed a “low likelihood” of meeting the government’s targets.

The StatDev monitors the progress of meeting economic and social development goals set under the PDP 2017-2022.

“Specifically, 11 sectors have at least 50% of their indicators exhibiting medium to high likelihood of achieving the target in 2022, while four sectors appear to have at least 50% of their indicators exhibiting low likelihood of achieving their respective targets,” the PSA said.

The PSA said new indicators were added because of the Enhanced PDP Results Matrices (RM) Midterm Update, which reflected the “new normal” amid the coronavirus disease 2019 (COVID-19) pandemic.

Among the industry sectors that showed high likelihood of achieving their targets are shelter and housing, competitiveness, science and technology, and environment.

“The percentage of socialized housing units delivered to socialized housing targets and the percentage of low-cost housing units delivered to low-cost housing targets both exceed their end-of-plan targets of 73% and 100%, respectively,” the PSA said.

The government acted on 100% of competition-related complaints from 2017 to 2021, one percentage point higher than the target, the PSA said.

In the environment sector, the PSA noted the area of forest land under effective management increased to 8.1 million hectares (Mha) in 2021, close to its end-of-plan target of 8.75 Mha. The area of denuded and degraded forestlands and protected areas fell to 7.07 Mha, but still within the 7.04 Mha goal.

Meanwhile, sectors that showed “average” performance were the macroeconomy, industry and services, overseas Filipino workers (OFWs), culture and values, governance, agriculture, forestry, fisheries, and human capital development.

For macroeconomy, the PSA noted end-of-plan targets for local government unit (LGU) income and volume of Instapay transfers were reached.

“However, the increase of $1.8 billion of exports of services in 2021 was not sufficient to attain its end-of-plan target. Likewise, the 31% utilization of the Special Education Fund (SEF) in 2021 could be tough to reach its end-of-plan target of 100%,” it said.

In industry and services, the number of Filipino trademarks reached 18,453 in 2021, exceeding its goal of 11,120.

Meanwhile, the government is unlikely to meet targets for social protection, infrastructure, demographic dividend, and justice.

“For social safety nets in 2021, the number of deaths or missing persons due to natural and human-induced disasters were way off from its end-of-plan target of zero,” the PSA said, adding the number of children benefiting from a supplementary feeding program fell in 2021.

Travel restrictions and lockdowns also affected the government’s goal to increase the number of air passengers.

“The decline in air passenger movement, both international and domestic flights, in 2021 intensified the low likelihood of attaining the end-of-plan targets except for (Ninoy Aquino International Airport), which posted a high likelihood despite the decline,” the PSA said.

CORE INDICATORS
Among the nine core indicators monitored by StatDev, only four showed a high likelihood of achieving the targets under the PDP.

The Philippines improved its ranking in the Global Innovation Index (GII) to 51^st out of 132 economies, putting it on track to reach the top one-third of the index.

Despite the lockdowns, the unemployment rate stood at 7.8% in 2021, well within the 7-9% PDP target. The youth unemployment rate stood at 15.7%, which exceeded the target of 20.5-22.5%. The jobless rate for areas outside of the National Capital Region hit 16.7%, still within the 15.5-17.5% goal.

At the same time, five indicators showed a low likelihood of achieving the PDP’s target by the end of 2022.

The Philippines’ gross domestic product (GDP) expanded by 5.7% in 2021, missing the 6.5-7.5% annual growth target due to the impact of the pandemic.

Gross national income (GNI) per capita grew by 0.4% last year, well below the 5-6% growth target.

The poverty incidence rate stood at 23.7%, failing to achieve the 15.5-17.5% goal. Subsistence incidence stood at 9.9%, missing the 5-7% target.

Food inflation was kept at a stable 5.5% in 2021, but above the 2-4% target.

The PSA noted the 2021 poverty and subsistence incidences are estimates for the first semester. — AOAT

DoF chief to miners: Follow sustainable practices

August 4, 2022 | 12:31 am

MINING COMPANIES can potentially be a key driver of the Philippines’ long-term growth, but Department of Finance (DoF) Secretary Benjamin E. Diokno made it clear that they should follow responsible and sustainable practices.

“The mining industry holds the greatest potential to be a key driver in our recovery and long-term growth, especially now that world metal prices are high… We recognize that apart from boosting local development, mining is a strong magnet for investments that can propel our economy into a higher growth trajectory,” Mr. Diokno said during the listing of Philex Mining Corp.’s (Philex) common shares at the Philippine Stock Exchange (PSE) on Wednesday.

The Marcos administration is committed to creating an enabling environment that will allow the mining industry to flourish, he added.

“In turn, we expect the mining industry to strictly adhere to responsible and sustainable practices. This is a non-negotiable condition so we can guarantee the sustainability of the industry and the strong economic growth of its host communities,” Mr. Diokno said.

The Finance chief said Philex, one of the biggest copper and gold producers in Southeast Asia, has been an industry leader in principled mining.

“I challenge Philex to continue setting an example for the country’s mining industry in striking a delicate balance between protecting the environment, uplifting local communities, and supporting our socioeconomic agenda,” Mr. Diokno said.

Philex on Wednesday held a listing ceremony for its stock rights offering (SRO). Around P2.65 billion raised from the SRO will be used for its Silangan project located in Surigao del Norte.

The Department of Finance in a statement estimated the Silangan project will generate around P8.5 billion in excise taxes alone for its entire mine life.

In 2021, the mining and quarrying industry posted output growth of 5%, from 2.6% in 2020, according to the Philippine Statistics Authority.

The Duterte administration began a crackdown on the mining industry in 2016 as part of its effort to reduce the damage to natural resources.

However, the government lifted the four-year ban on open-pit mining in December 2021. In April this year, President Rodrigo R. Duterte had also lifted the nine-year moratorium on granting mining permits. — Diego Gabriel C. Robles

US SEC charges Forsage operators after PHL exposé

August 4, 2022 | 12:10 am

FOUNDERS and promoters of Forsage, a decentralized application for Ethereum cryptocurrency, were charged by the US Securities and Exchange Commission (SEC) assisted by the Philippine SEC for operating a fraudulent pyramid scheme.

In a media release on Wednesday, the Philippine SEC said four founders, three US-based promoters of the investment scam on websites and social media platforms, and members of Forsage’s promotional group, Crypto-Crusaders, were charged by the US SEC.

The local regulator cited a statement issued by its US counterpart on Aug. 1 that 11 individuals were charged for their roles in creating and promoting Forsage.

Forsage allegedly raised more than $300 million from millions of retail investors worldwide, including in the Philippines.

Vladimir Okhotnikov, Jane Doe or Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov were said to have launched Forsage.io in January 2020.

Forsage allowed millions of retail investors to enter into transactions via smart contracts that operated on the Ethereum, Tron, and Binance blockchains, the media release said.

However, the decentralized application has operated as a pyramid scheme wherein investors earned profits by recruiting others while using assets from new investors to pay earlier investors like a typical Ponzi structure.

The Philippine SEC provided assistance to the US SEC by sharing information gathered while investigating Forsage.

On Sept. 27, 2020, the Philippine SEC issued a cease-and-desist order against Forsage for illegal solicitation through a crowdfunding platform based on the Ethereum blockchain technology.

The local regulator said the Montana Commissioner of Securities and Insurance also ordered Forsage to cease and desist from operating in March 2021.

“The SEC Philippines is always ready to collaborate with its counterparts in other jurisdictions, as well as other regulators, to stamp out investment scams in other parts of the world. We remain committed to promoting the rights and welfare of investors, as we work toward the common goal of protecting the investing public,” Philippine SEC Chairperson Emilio B. Aquino said. — Justine Irish D. Tabile

SM Investments posts 27% profit increase to P25.5B

August 4, 2022 | 12:09 am

SM INVESTMENTS Corp. records a 26.8% increase in consolidated net income in the first half to P25.5 billion, which it attributed to strong consumer spending on eased mobility restrictions.

“Our financial performance was led by strong consumer spending across all categories and formats of our retail business and the return of crowds in malls,” SM Investments President and Chief Executive Officer Frederic C. DyBuncio said in a press release on Wednesday.

“Despite rising inflation, we are encouraged to see shoppers’ robust spending in the first half,” he added.

The company’s consolidated revenues also rose in the first half to P238.5 billion, a 23% increase from last year’s level.

Its banking business accounted for 48% of the net earnings, followed by the property segment at 26%, retail at 20%, and portfolio investments at 6%.

BDO Unibank, Inc. delivered P23.9 billion in net income in the first half, up by 12% from its previous year’s record.

Meanwhile, China Banking Corp. posted P10.1 billion in net income or a 39% increase from last year.

Property unit SM Prime Holdings, Inc. reported a 21% increase in consolidated net income to P14.1 billion.

SM Prime’s residential business, led by SM Development Corp., recorded P18.2 billion in revenues, 25% lower than the figure in the same period last year.

“The decrease in revenues was partly due to canceled sales as an effect of the expiration of the Bayanihan Act, which gave a reprieve to unit buyers during the height of the pandemic, affecting the entire industry,” the company said.

Meanwhile, SM Retail reported revenues of P163.7 billion, higher by 18% than the same period last year.

“This consumer-driven momentum brings more optimism moving forward as we keep innovating on our retail offerings to ensure an excellent shopping experience for the Filipino consumer,” Mr. DyBuncio said.

Retail net income was higher by 91% to P7 billion from the previous period.

In the first six months of the year, SM Retail and its affiliates added 147 stores, bringing its total store count to 3,336 — 69 SM Stores, 1,543 Specialty Retail, 62 SM Supermarket, 52 SM Hypermarket, 214 Savemore, 1,320 Alfamart, and 75 WalterMart stores.

“Consumers are back to safe shopping in SM stores which drove up retail growth. Further supporting this growth are SM Retail’s efficient operations and strategic expansion,” the company said.

On the stock market on Wednesday, SM Investment shares went up by P26 or 3.38% to P795 apiece. — Justine Irish D. Tabile

San Miguel food, beverage unit posts 8% income rise

August 4, 2022 | 12:08 am

SAN MIGUEL Food and Beverage, Inc. (SMFB) recorded an 8% increase in first-half consolidated net income to P18.8 billion as revenues increased, driven by volume gains and pricing adjustments across its product lines.

“Our financial position and long-term fundamentals remain strong, notwithstanding current macroeconomic headwinds. We remain committed to delivering operational excellence and value to all our stakeholders, as well as good quality products for the everyday needs of all our consumers,” SMFB President and Chief Executive Officer Ramon S. Ang said in a press release on Wednesday.

SMFB, a unit of conglomerate San Miguel Corp., reported a 17% increase in consolidated revenues to P172.1 billion.

Its beer business registered consolidated revenues of P65 billion for the first six months, 20% higher than the level a year ago.

“As restrictions eased following the COVID-19 (coronavirus disease 2019) Omicron surge in January with more on-premise outlets reopening, the beer business implemented various campaigns in key channels. As a result, its domestic operations reported a marked volume improvement of 20% quarter on quarter,” the company said.

Revenues from its spirits and food businesses jumped by 14% to P23.1 billion and 16% to P84 billion, respectively.

“The food business has been actively working to drive its costs down by improving efficiencies, enhancing productivity, and maximizing utilization of its expansion facilities,” the company said.

“While the global macroeconomic outlook remains uncertain and the remainder of the year may continue to be challenging, SMFB will continue to implement various strategies and efficiencies to mitigate cost pressures and help protect profits,” it added.

SMFB shares climbed by 60 centavos or 1.4% to P43.60 apiece on Wednesday. — Justine Irish D. Tabile

MPIC expects 2022 results to ‘at least approach’ 2019 level

August 4, 2022 | 12:07 am

PANGILINAN-LED Metro Pacific Investments Corp. (MPIC) announced on Wednesday an attributable net income of P9.5 billion for the first half of 2022, down 9% from the same period last year when it booked gains from asset sales.

“We expect that this year will be better than last year,” MPIC Chairman Manuel V. Pangilinan said during a virtual briefing.

“We (also) hope that 2022 numbers will at least approach what we accomplished in 2019, or before the pandemic,” he added.

The holding company, which also controls power, toll roads, hospital and rail businesses, posted a core net income of P15.6 billion in 2019, up 4% from 2018.

The company’s core net income for the first half of 2022 was P7.5 billion, up 24% from P6 billion in the previous year, it said in a press statement on Wednesday.

MPIC has yet to release its complete financial report for the second quarter.

“Improved financial and operating results of the constituent companies delivered a 15% increase in contribution from operations, mainly driven by a strong recovery in toll road traffic and growth in power consumption as more industries ramped up operating capacity,” the company said.

The company said its power business brought in P5.9 billion, or 60% of the net operating income. Toll roads contributed P2.5 billion, or 26%, and water brought in P1.4 billion, or 15%.

Meanwhile, the other businesses, mostly real estate, hospitals, fuel storage, and light rail, incurred a net loss of P35 million.

“Average interest rates on borrowings have been significantly reduced and resulted in a 12% decline in net interest costs in the first half of 2022,” MPIC said.

“This was made possible by the company’s strategic rerating and refinancing of expensive debt facilities ahead of the current rising interest rate environment,” it added.

Mr. Pangilinan said the company remains steadfast in its pursuit of other potential growth areas, particularly in agriculture, tourism, and logistics.

“But we are still mindful of the crucial role that MPIC plays in Philippine infrastructure and enabling the progress that our government envisions. I am hopeful that the positive tone toward infrastructure investment set by the new administration will lead to accelerating development for our country,” he added.

Last year, MPIC recognized gains from the sale of power generation company Global Business Power Corp. and Thai toll road operator Don Muang Tollway Public Co. Ltd.

On Wednesday, MPIC shares closed 2.93% lower at P3.64 apiece.

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

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

PAL reports ‘first positive’ half-year results since 2016

August 4, 2022 | 12:06 am

PHILIPPINE Airlines, Inc. (PAL) announced on Wednesday a net comprehensive income of $71 million (P4.2 billion) for the first six months of 2022, the first positive first-half financial performance for the flag carrier since 2016.

In a phone message to BusinessWorld, PAL Spokesperson Cielo C. Villaluna said the airline reverted to profitability in the first half from a total comprehensive loss of $344.3 million in the same period in 2021.

The airline also reported an operating income of $125 million (P6.6 billion) for the January-to-June period, making a profit after posting an operating loss $191.5 million in the same period in 2021.

“PAL generated $1.1 billion (P58.1 billion) in revenues, representing a 258% growth in passenger revenues and a 31% growth in cargo revenues for January to June 2022, as compared to the same period in 2021,” the airline said in an e-mailed statement.

“Operating expenses amounted to $986 billion (P51.5 billion) for the period, which includes $380 million (P19.9 billion) in fuel expenses, reflecting the impact of significantly higher fuel prices afflicting the aviation industry worldwide,” it added.

PAL President and Chief Operating Officer Stanley K. Ng said the airline views the positive operating results for the first half of 2022 “as a demonstration of the loyal support of our PAL customers, for which we are deeply grateful, and a validation of the efforts of our shareholders, management and personnel to rebuild our international and domestic network amidst the strengthening recovery of air travel.”

“We acknowledge tough challenges ahead, as various regions grapple with rising inflation, higher energy costs and economic uncertainties,” he added. “So we will continue to be fiscally prudent as we mobilize our talents and resources to grow responsibly, in a way that helps boost tourism, supports overseas Filipinos and offers the best value to travelers and cargo shippers.” — Arjay L. Balinbin

Yields on BSP’s term deposits rise on rate hike bets, inflation

August 4, 2022 | 12:05 am

TERM DEPOSIT yields went up on Wednesday on expectations of another rate hike this month and ahead of the release of July inflation data. — BW FILE PHOTO

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits climbed further on Wednesday ahead of the release of July inflation data and following rate hike signals from the central bank chief.

Demand for the term deposit facility (TDF) of the central bank amounted to P390.94 billion on Wednesday, above the P330-billion offering as well as the P247.361 billion in tenders recorded last week.

Broken down, bids for the seven-day term deposits amounted to P218.96 billion, higher than the P170 billion auctioned off by the BSP. It also surpassed the P149.475 billion in tenders seen a week earlier.

Accepted rates ranged from 3.25% to 3.65%, narrower than the 3.125% to 3.75% margin seen in the prior auction. With this, the average rate of the one-week paper rose by 12.5 basis points (bps) to 3.5089% from 3.3839% previously.

Meanwhile, the 14-day papers attracted P171.98 billion in bids against the P160-billion offering. Demand for the two-week tenor also went up from the P97.886 billion in tenders seen on July 27.

Banks asked for yields from 3.4% to 3.725%, also slimmer than the 3.25% to 3.75% band recorded a week earlier. This caused the average rate of the two-week term deposit to increase by 8.23 bps to 3.5723% from 3.49%.

The BSP has not auctioned off 28-day term deposits for more than a year to give way to its weekly offerings of securities with the same tenor.

The TDF and the 28-day bills are used by the BSP to gather excess liquidity in the financial system and to better guide market rates.

Term deposit yields went up ahead of the release of July inflation data on Aug. 5, Friday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The rise was also due to signals from the BSP chief on more rate hikes at their meeting this month amid expectations of continued tightening by the US Federal Reserve, Mr. Ricafort added.

BSP Governor Felipe M. Medalla on Tuesday said the central bank still has room to hike borrowing costs without sacrificing the economy’s recovery as real interest rates remain negative.

He said their planned hike of 25 bps or 50 bps at their Aug. 18 meeting is still supportive of growth. Mr. Medalla added that it is too early to tell if the August increase will be the last for now amid lingering uncertainties at home and abroad.

The Monetary Board last month raised the benchmark interest rates by 75 bps in an off-cycle move, as it sought to contain inflationary pressures exacerbated by the peso’s weakening versus the dollar amid the Fed’s aggressive stance. It has raised rates by 125 bps so far since May.

Headline inflation hit a near four-year high of 6.1% in June, bringing the first-half average to 4.4%, above the central bank’s 2-4% target and 5% forecast for the year.

The BSP expects the July reading to be in the 5.6-6.4% range. July inflation data will be released on Friday.

Meanwhile, the Fed last week raised its key rates by 75 bps for the second straight meeting, as expected, to temper rising inflation. To date, the Fed has raised its policy rates by a total of 225 bps. — K.B. Ta-asan

Semirara Mining’s earnings climb to nearly P11 billion

August 4, 2022 | 12:05 am

SEMIRARA Mining and Power Corp. (SMPC) reported a second-quarter net income of P10.8 billion, nearly triple the P4 billion a year ago, driven by higher coal and electricity prices.

“As expected, we had a weaker performance quarter over quarter because of the China lockdowns but compared to last year, we did very well,” SMPC President and Chief Operating Officer Maria Cristina C. Gotianun said in a disclosure on Wednesday.

“We maintain our view that the second semester will be anemic because of market volatility and unfavorable weather conditions,” she added.

Of the total, contributions from the coal segment grew by 195% to P9 billion, followed by Sem-Calaca Power Corp. (SCPC), which was up 81% to P1 billion; and Southwest Luzon Power Generation Corp. (SLPGC), which increased by 107% to P742 million.

In the second quarter, total shipments from coal operations dropped by 24% to 3.7 million metric tons (MMT) to 4.9 MMT as China imposed coronavirus disease 2019 (COVID-19) lockdowns and shifted to Russian coal.

Export sales by 44% to 1.8 MMT from 3.2 MMT while domestic sales grew by 12% to 1.9 MMT from 1.7 MMT.

“Buffering the impact of lower shipments was the 126% increase in average selling prices from P2,393 to P5,399, the highest for any given quarter,” SMPC said.

“Heavy rainfall and higher stripping activities curbed coal production, dropping 21% to 3.4 MMT from 4.3 MMT. This, together with lower sales volume, raised high-grade coal inventory by 50% to 1.5 MMT from 1.0 MMT,” it added.

Meanwhile, the overall gross generation from its power operations was “mostly flat” at 984 gigawatt-hours (GWh) due to the forced outage of SCPC’s second unit because of a defective generator stator.

Total electricity sales contracted by 9% to 900 GWh from 987 GWh. Of the total, 56% was sold to the spot market while the remainder was sold through bilateral contracts.

“High uncontracted capacity allowed SMPC to boost spot electricity sales by 188% to 507 GWh from 176 GWh. Average spot selling prices remained elevated at P6.91 versus P6.87 last year,” the firm added.

Total spot purchases also went down by 60% to P245 million from P617 million on higher plant availability.

At the stock exchange on Wednesday, SMPC shares rose by 0.74% or 30 centavos to close at P40.85 apiece. — Luisa Maria Jacinta C. Jocson

LANDBANK’s net profit surges by 93.5% in the first semester

August 4, 2022 | 12:04 am

LAND BANK of the Philippines (LANDBANK) recorded a net income of P20.3 billion in the first half, a 93.5% increase from the P10.3 billion it earned in the same period last year.

“LANDBANK’s substantial expansion in net income is attributed to its prudent management of the cost of funds as well as sustained interest income from loans and investments,” the state-owned bank said in a press release on Wednesday.

“LANDBANK’s robust financial performance will continue to drive its intensified assistance to key industries, especially the agriculture sector, in support of the country’s continuing recovery. We will also build on this growth momentum to further our efforts to rebuild local communities, advance financial inclusion, and support the National Government’s development agenda,” LANDBANK President and Chief Executive Officer Cecilia C. Borromeo was quoted as saying.

LANDBANK did not provide figures on its second-quarter performance. In the first quarter, it posted a net income of P13.2 billion, 141% higher than the P5.48 billion a year prior, on the back of a one-time gain from its merger with United Coconut Planters Bank, which took effect in March.

The bank’s first-semester performance translated to a return on equity of 15.43% and return on assets of 1.19%.

Its net interest margin was at 2.92%.

LANDBANK’s assets grew by 11.8% to P2.8 trillion as of June.

Deposits with the bank went up by 10.1% year on year to P2.5 trillion.

Broken down, the government sector accounted for bulk of LANDBANK deposits, cornering a 62% share worth P1.5 trillion total deposits.

Meanwhile, 38% or P930 billion of total deposits were from the private sector.

The bank’s capital inched up by 1.9% year on year to P206.5 billion, which it attributed to the increase in its net income.

LANDBANK is mandated to provide financial assistance and support services to its priority sectors: farmers and fisherfolk, agrarian reform beneficiaries, as well as agri and aqua businesses and agri-aqua related projects of local government units and government-owned and -controlled corporations.

In 2021, the state-run bank’s net profit grew 27% to P21.75 billion from P17.14 billion a year earlier and higher than its P19.68-billion income target. — D.G.C. Robles