BSP partners with SM Supermalls to drive growth in cashless payments

October 19, 2022 | 12:01 am

THE BANGKO SENTRAL ng Pilipinas (BSP), in collaboration with SM Supermalls, launched the Cashless Malling at SM program on Tuesday to boost digital transactions and further drive financial inclusion in the country.

The Cashless Malling initiative will allow consumers to shop at SM malls and pay through QR Ph, the country’s QR code standard. QR Ph will enable person-to-merchant (P2M) payments to micro, small, and medium enterprises (MSMEs) that are retail partners of SM.

BSP Deputy Governor Bernadette Fatima T. Romulo-Puyat said in her speech at the launch of the program that it is crucial to the development of an inclusive digital payments ecosystem.

“By promoting cashless payments in SM Malls all over the country, this partnership will bring the welfare-enhancing benefits of digital finance innovations to its merchants and shoppers, as well as communities where SM malls are located. We have 80 SM malls all over the country and this will empower them as partners in sustainable local economic development,” she said. “This special collaboration also highlights our firm belief that financial inclusion is a whole-of-nation undertaking, with the private sector playing a very critical role.”

“And in digitalizing transactions —specifically in malls, which we know have become part of Filipino culture and which form part of many Filipinos’ regular payment pattern — account ownership will be made more compelling, the digital financial ecosystem will greatly expand, and the benefits of digital innovation will be brought to more Filipinos,” Mr. Romulo-Puyat added.

The central bank wants to digitize at least 50% of the volume and value of total retail payments by 2023.

As of 2021, digital payments made up 30.3% of the total volume of retail transactions in the country from 20.1% a year earlier. Meanwhile, the value of payments done online represented 44.1% of total transactions last year, higher than the 26.8% share in 2020.

“With SM Malls Online in eight of 10 stores in our malls now accepting cashless payments through digital wallets and QR codes, almost everything is both shippable and shoppable at SM,” SM Supermalls President Steven T. Tan said on Tuesday.

“A cashless world at SM malls also means we support the BSP’s thrust to create an efficient, inclusive, safe and secured digital payment ecosystem in our country,” Mr. Tan said, encouraging SM’s tenant partners to take part in the initiative.

On the sidelines of the launch event, Mr. Tan told reporters that they are targeting to expand cashless transactions in their provincial malls.

“We’re still converting the rest of the tenants to accept digital payments because as we all know, maybe in Metro Manila, a lot of our merchants here are already offering cashless, but how about in the provinces? So, that’s the ultimate goal, to convert everyone, all our merchants, to use cashless,” he said.

He added that SM Supermalls has a dedicated team to encourage and assist merchants in offering digital payment transactions to customers.

“We all know the spread of SM is very wide… We have more than 4 million shoppers who visit our malls daily. So, if we could create that awareness to the public the advantage of using cashless, that would be great.”

Meanwhile, BSP Deputy Governor Mamerto E. Tangonan emphasized the importance of using the country’s standard QR code to streamline different financial accounts from different institutions.

“We are doing our very best to make it more convenient and less cost for consumers. With QR Ph P2M, you only need at least one bank account or mobile money account in order to accept payments from your customers and your customers may not only come from one financial institution, but as we speak, there are over 18 financial institutions,” Mr. Tangonan said.

“But beyond these four walls of this mall, digital payments can really transform people’s lives because previously unbanked people are now encouraged and now become aware of the importance of owning a bank or mobile money or wallet,” he said.

The BSP wants 70% of Filipino adults to have formal financial accounts by 2023. The country’s banked population was at about 56% of all adults in 2021, up from just 29% in 2019, results of the central bank’s 2021 Financial Inclusion Survey showed. — K.B. Ta-asan

How the hunger experienced in the Philippines compares with regional peers

October 19, 2022 | 12:00 am

The Philippines placed 69th out of 121 countries with a score of 14.8 and a “moderate” level of hunger in the 2022 edition of the Global Hunger Index (GHI) jointly published by international humanitarian organization Concern Worldwide and German nongovernmental development and humanitarian aid organization Welthungerhilfe. The GHI measures and tracks hunger at global, regional, and national levels with the scores based on the values of four component indicators, namely: undernourishment, child stunting, child wasting, and child mortality. The Philippines’ score was below the global score of 18.2. However, this was above the East and Southeast Asia average score of 8.2.

How PSEi member stocks performed — October 18, 2022

October 19, 2022 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Tuesday, October 18, 2022.

Shares climb as market awaits firms’ Q3 results

October 18, 2022 | 9:00 pm

PHILIPPINE STOCKS continued to post gains on Tuesday on bargain hunting ahead of third- quarter earnings season and with rate hike concerns already priced in.

The benchmark Philippine Stock Exchange index (PSEi) went up by 158.31 points or 2.65% to close at 6,128.64 on Tuesday, while the broader all shares gained 54.88 points or 1.71% to finish at 3,253.51.

“Philippine stocks rallied today as bargain hunters accumulated stocks ahead of the third- quarter reporting season. Monetary policy concerns are priced in already and now attention will shift to how the listed firms have performed and their outlook in the midst of a difficult business environment,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

“Despite all the noise regarding rates and talks of recession, it still boils down to how resilient corporate earnings are,” Mr. Vistan said.

Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said the PSEi closed higher following Wall Street’s rally overnight, which was driven by strong earnings from major US banks.

“The local market extends its five-day rally, supported by foreign buyers, as the US earnings season begins to ramp up. Big banks in the United States outperform earnings expectations due to higher-than-anticipated gains in interest income as a result of the US Federal Reserve raising interest rates,” Mr. Lood said in a Viber message.

Wall Street jumped on Monday amid solid bank earnings. The Dow Jones Industrial Average rose 550.99 points or 1.86% to 30,185.82; the S&P 500 gained 94.88 points or 2.65% to 3,677.95; and the Nasdaq Composite added 354.41 points or 3.43% to 10,675.80.

Mr. Lood said investors are also optimistic that higher interest rates likewise boosted the third quarter earnings of local lenders, which would be positive for the index.

All sectoral indices closed higher on Tuesday. Property jumped 109.07 points or 4.2% to 2,706.27; financials rose by 41.70 points or 2.77% to 1,544.01; holding firms went up by 128.28 or 2.22% to 5,891.82; services climbed by 34.05 points or 2.22% to 1,563.53; mining and oil added 101.88 points or 0.95% to close at 10,753.08; and industrials gained 61.14 points or 0.7% to end at 8,754.59.

Value turnover declined to P4.82 billion on Tuesday with 351.70 million shares changing hands from the P6.64 billion with 542.89 million issues traded on Monday.

Advancers outnumbered decliners, 109 versus 73, while 52 names closed unchanged on Tuesday.

Net foreign buying stood at P752.76 million on Tuesday, a reversal of the P36.51 million in net selling seen on Monday.

AB Capital Securities’ Mr. Vistan placed the PSEi’s support at 5,700 and resistance at 6,150. — A.E.O. Jose

New vaccines seen necessary against new strains of Omicron

October 18, 2022 | 8:19 pm

THE Philippines may need to bring in new vaccines to deal with emerging subvariants of the coronavirus disease 2019 (COVID-19) omicron strain without having to impose mobility restrictions, a government adviser said.

Jose Maria A. Concepcion III, Go Negosyo founder and member of the Marcos government’s Private Sector Advisory Council, said in a statement on Tuesday that the new types of vaccines, known as bivalent vaccines, offer better protection against the Omicron XBB and XBC subvariant recently detected in the Philippines.

According to Mr. Concepcion, the Philippines needs “up-to-date protection” to safeguard the recovery, which is being pressured by surging commodity prices, interest rates, and the weakening peso in the runup to the yearend, which many businesses depend on for their earnings.

The Health department reported on Tuesday that the 81 cases of subvariant XBB and 193 cases of XBC variant have been detected in the Philippines.

“This fourth quarter is so important because it is when business momentum increases and many jobs are created, especially in food and retail. It’s also when businesses can have enough cash flow and cross over to 2023,” Mr. Concepcion said.

“There is no need to restrict movement; people only need to be careful. Businesses already know their own health protocols, and by now they have that experience,” he added.

Mr. Concepcion said bivalent vaccines may help do away with the need for restricting mobility, which were damaging to the economy in the pandemic’s early days.

“The number of cases may go up, but as long as the hospitals are not at full capacity, the economy can remain open,” Mr. Concepcion said.

Mr. Concepcion said that he sent a letter to the Health department on Oct. 12 pledging private sector aid in bringing in and distributing bivalent vaccines, adding that his recommendation is to limit the choice of supplier to Pfizer and Moderna.

“Of utmost importance besides pre-registration is the least disruption in the personal cost and work schedule of those to be vaccinated who are battling more pressing concerns. We can re-activate arrangements and partnerships that have worked well in our previous implementation,” Mr. Concepcion said. — Revin Mikhael D. Ochave

Grab-Move It deal falls below threshold for regulatory review

October 18, 2022 | 8:17 pm

THE Philippine Competition Commission (PCC) said on Tuesday that Grab Philippines’ acquisition of motorcycle taxi firm Move It does not require its approval.

“Based on an initial assessment by the PCC, Grab Philippines’ acquisition of Move It likely did not breach the thresholds for compulsory notification,” PCC Officer-in-Charge Chairman Johannes Benjamin R. Bernabe said in a statement.

“Hence, the parties need not wait for approval from the PCC to consummate the transaction,” he added.

The commission noted that the transaction was entered into by Grab and Move It when the P50-billion notification thresholds under Republic Act No. 11494 or the Bayanihan to Heal as One Act was in effect.

“Likewise, the publicly announced size of transaction seems to not have breached the thresholds under the Bayanihan Law,” according to Mr. Bernabe.

But he added that the PCC may still launch a motu proprio review of the transaction if it suspects it will result in a “substantial lessening of competition in the relevant markets.”

Grab Philippines announced its acquisition of Move It in August, paving the way for its entry into motorcycle taxi operations.

“Transactions in digital markets are often characterized by small tangible assets that fail to meet the triggers for mandatory review. Their importance and utility to consumers, however, rank high in the priorities of the commission to merit steadfast monitoring,” the PCC said.

“To note, this new acquisition by Grab Philippines will not affect the company’s existing legal commitments to the PCC relating to its takeover of (the Philippine operations of) Uber,” it added.

The commission added that it supports efforts to amend the Land Transportation and Traffic Code to allow two-wheeled vehicles as a mode of public transportation.

“Notwithstanding any comprehensive competition review, the commission considers the availability of motorcycle taxis and future expansion for the entry of more players as an indicator of an emerging market offering additional public transport options for commuters,” the PCC said. — Arjay L. Balinbin

Electricity spot market prices rose in early Oct.

October 18, 2022 | 8:16 pm

THE Independent Electricity Market Operator of the Philippines (IEMOP) said the average electricity spot market price in early October rose to P9.31 per kilowatt-hour (kWh) from P9.12 per kWh in September and P7.26 per kWh in August.

IEMOP considers the September average to be the high for the year, with October results still partial and subject to validation.

IEMOP said that in September, demand on the Wholesale Electricity Spot Market (WESM) rose 1.47% to 10,639 megawatts (MW), while the average supply fell 4.73% or 675 MW to 13,599 MW due to generator outages.

The spot market is where the power industry buys power when its long-term supply agreements are insufficient. They need to pay spot prices, which are at a premium to power contracted earlier for forward delivery.

IEMOP said power generated by diesel plants totaled 220-gigawatt hours (GWh) or 2.9% of the generation mix in September, up from 93 GWh or 1.2% in August.

Coal power plants accounted for 4,434 GWh or 57.6%, natural gas 1,407 GWh or 18.3%, geothermal 772 GWh or 10%, hydro 582 GWh or 7.6%, variable renewable energy resources 172 GWh or 2.8%, biomass 67 GWh or 0.9%, and battery energy storage systems 2 GWh or 0.03%. — Ashley Erika O. Jose

Supermarkets may stop selling sugar if gov’t sets P70/kg price

October 18, 2022 | 8:16 pm

A PLAN announced by the Department of Agriculture (DA) and the Sugar Regulatory Administration (SRA) to set the price of white sugar at P70 per kilogram (/kg) might lead to the withdrawal of some varieties of the commodity from supermarket shelves, an industry association said on Tuesday.

Steven T. Cua, Philippine Amalgamated Supermarkets Association president, said during an interview on BusinessWorld Live caried by One News Channel that association members might stop selling washed and brown sugar because white refined sugar sold according to the government’s pricing.

“They probably won’t be selling washed and brown sugar since white sugar will be at P70/kg, which will be cheaper than brown or washed sugar…. This is what you call intervention within the economy,” Mr. Cua said.

The DA announced on Monday that it will sell sugar to consumers at P70/kg at SRA offices in Quezon City and Bacolod City.

It added that Kadiwa rolling stores will also retail sugar to consumers at P70/kg.

Mr. Cua said retailer price of white refined sugar at over P100/kg.

“There will still be stock floating around at a P100+/kg, and then there will be items sold by different brands at P70/kg,” Mr. Cua said.

“Even if a supermarket buys from suppliers (at a price that allows them) to sell at P70/kg, they will still have stock which (need to sell for) P100+/kg… It will be confusing for a bit,” he added.

The DA has said that it is considering a suggested retail price (SRP) for sugar that is “acceptable” to consumers and the industry.

“P70/kg looks realistic (as an SRP), but again, is it sustainable? The government should be able to sustain it so that it doesn’t go up and down just like fuel prices,” Mr. Cua said. — Revin Mikhael D. Ochave

Tax ‘leakage’ from POGOs estimated at P1.9B as of August

October 18, 2022 | 8:15 pm

online-gambling-casino — STOCK PHOTO | Image by Aidan Howe from Unsplash

THE tax “leakage” due to incorrect payments by Philippine Offshore Gaming Operators (POGOs) was estimated at P1.9 billion in the eight months to August, a senior legislator said.

Senator Sherwin T. Gatchalian said in a statement on Tuesday that the estimate suggests that “we are not realizing the full benefits of allowing POGO operations in the country.”

The Philippines needs to “consider developing other industries that are sustainable, high-yielding, and long-term,” he added, proposing a renewed focus on the business process outsourcing industry.

Mr. Gatchalian, citing internal research conducted by his staff, said there are discrepancies in the gross gaming revenue declared by POGOs to the Bureau of Internal Revenue (BIR) and Philippine Amusement and Gaming Corp. (PAGCOR).

Indicative gross gaming revenue from January to August, based on the 5% gaming tax payments made to the BIR by POGO operators, totaled P28.36 billion, Mr. Gatchalian said.

However, the 2% regulatory fee payments to PAGCOR suggest indicative gross gaming revenue for the same period at P66.67 billion, he added, noting as well that PAGCOR’s accounts receivable from POGOs over the same period amounted to P2.3 billion.

“It’s regrettable that even legitimate POGOS are remiss in the payment of correct taxes,” he said. “This is exactly the reason a tax regime for POGOs was put in place… to reduce uncollected taxes due the government.”

Republic Act 11590 or the Act Taxing POGOs, revenue generated by the gaming tax on offshore gaming licensees must be allocated to implement the Universal Health Care Act (60%), the Health Facilities Enhancement Program (20%), and to attain Sustainable Development Goals (20%).

“Before, we projected that revenue from POGO of around P30-40 billion. Now, the reality is P3-5 billion, so if there are leakages, all the more, the figures are disappointing,” Senate Minority Leader Aquilino Martin D. Pimentel III said at a briefing on Tuesday, according to a transcript issued by his office.

The BIR said this month that taxes generated by the POGO industry amounted to P4.4 billion in the eight months to August, ahead of the P3.91 billion full-year total in 2021 but much less than the bullish pre-pandemic projections for the industry.

The Department of Finance had expected a law regulating POGOs to raise P32.1 billion in 2021, on the assumption that operations will return to pre-pandemic levels.

Looking at the weaker-than-expected revenue and rising crime associated with the industry, Mr. Pimentel said there are “overwhelming reasons to (review) our policy on POGO.”

The senate minority leader said a group of senators is pushing to shut the industry down and expressed the hope that the executive branch will expedite the resulting legislation. — Alyssa Nicole O. Tan

Philippines unlocks film financing deals with France under UN pact

October 18, 2022 | 8:14 pm

THE Philippines has approved funding allowing it to participate in a United Nations (UN)cultural convention, unlocking future film financing deals with France, the Film Development Council of the Philippines (FDCP) said.

“This morning, the (Department of Budget and Management) approved the budget for (participation in the 2005 United Nations Educational, Scientific and Cultural Organization convention), so it means we’re on our way there to finally having a formalized co-production venture with France,” FDCP Technical Consultant Jose Javier Reyes said at a briefing organized by the French Embassy.

The Convention on the Protection and Promotion of the Diversity of Cultural Expressions makes productions here eligible for foreign funding by assuring funders that the Philippines subscribes to a common set of principles in supporting cultural projects.

“If it is ratified, we can access film financing from other countries, especially France,” FDCP International Relations Officer Marian Torre told BusinessWorld in a text message.

A co-production treaty between the Philippines and France can only be sealed once the UNESCO Treaty is ratified, as required by the French government.

“Right now, we are still in that process of trying to finalize the UNESCO treaty, which has to go through the usual (approval) process,” Mr. Reyes said.

“Since there’s a new administration, we’re back to square one, but in the meantime, we already have (preliminary agreements) with various French organizations,” he added.

Talks to sign on to the treaty have been ongoing since 2019. Following the 2022 Third Quarter Meeting and Planning Workshop, the accession package had been forwarded to the Secretary of Foreign Affairs for signing.

However, with the government transition, signatures must also be obtained from the new set of officials from 17 agencies, including the DBM, whose particular concern is ensuring that funding for participating in the convention is available from the national budget.

“This is not yet included in the NEP (National Expenditure Program) since it’s still undergoing the ratification process,” Budget Undersecretary Goddes Hope O. Libiran told BusinessWorld in a Viber message

Should ratification take place after the 2023 budget deliberations, Ms. Libiran said that the “funds will come from Contingent Fund, then in subsequent years included in the (Department of Foreign Affairs) budget.”

“The relationship of the Film Development Council and the French Embassy has been well-nurtured and has resulted in really profitable and great learning experiences for both sides,” Mr. Reyes said. “Many ventures, of which, both the Filipinos and the French provide grants and co-production incentives in order to foster a greater relationship.”

“Film is indeed the new language of the world. It is the medium that defines differences in language and culture and binds us together and the world as one,” he added.

Separately, the Hague Conference on Private International Law (HCCH) is expected to enhance cross-border interaction between individuals and businesses.

During the opening ceremony of the HCCH Asia Pacific Week Manila 2022 at the Makati Diamond Residence, HCCH Secretary General Christophe Bernasconi said international solutions “enhance legal cooperation and integration simultaneously with close neighbors and with countries further afield, whether within regional organizations or with third states.”

“Being able to rely on a uniform international legal framework is of particular importance in an area as vast and as diverse as Asia and the Pacific,” he added.

Asia-Pacific Week Manila 2022, which runs between Oct. 18 and 20, had as a speaker Foreign Affairs Secretary Enrique A. Manalo, who highlighted “the remarkable role of the HCCH in shaping private international law and in fostering international initiatives in the areas of family and child protection law, transnational litigation and cooperation and international commercial, digital and financial law.”

“In these times of uncertainty and a changing global landscape, cross-border cooperation among HCCH States Parties in the Asia-Pacific region will provide an opportunity to expand areas of common interest and possible solutions to common issues,” he added.

The Philippines is a party to five HCCH instruments, the most recent being the Child Support Convention which entered into force for the Philippines on Oct. 1. To date, the Philippines is the only country in Asia to have ratified the convention. — Alyssa Nicole O. Tan

House panel pushing measures to reduce cost of remittances

October 18, 2022 | 8:14 pm

remittance-money-changer — CUSTOMERS receive money from their families working abroad at a remittance center in Makati City in this file photo. — REUTERS

LEGISLATION to bring down the cost of remittances sent by overseas Filipino workers (OFWs) will be the House Committee on Overseas Workers Affairs’ priority, the panel’s chairman said on Tuesday.

Committee members aim to draft measures “that will support the efforts of the government in lowering the remittance charges (on) OFW funds,” KABAYAN Party-list Representative Ron P. Salo said in a statement.

Last week, the committee considered various bills calling for OFW protections and reduced remittance costs.

The Bangko Sentral ng Pilipinas estimates remittances at $2.72 billion in August, against $2.60 billion a year earlier.

The total for 2021 sent through banks was $31.418 billion, he said, which is “expected to further increase this year.” — Matthew Carl L. Montecillo

High fuel prices seen dampening fisheries output in fourth quarter

October 18, 2022 | 8:14 pm

FISHERIES production in the fourth quarter is expected to suffer due to high fuel prices, which prevented many fisherfolk from heading out to sea, an association of small fishermen said.

The Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (PAMALAKAYA) said in a statement on Tuesday that its members are also taking on other jobs because of their inability to operate their boats.

It cited “ever-rising production costs, in which 80% goes to fuel expenses alone.”

Oil companies implemented price hikes on Tuesday, with the price of gasoline raised by P0.80 per liter, diesel P2.70, and kerosene P2.90.

The group asked the government to address inflation via price controls, a freeze on the excise tax on fuel products, and fuel subsidies to the marginalized.

“As the Agriculture Secretary, President Ferdinand R. Marcos, Jr. has a lot of responsibility (for) the continued decline of agricultural and fishery production due to neglect (in addressing) the rising price of fuel and other commodities,” PAMALAKAYA spokesman Ronnel S. Arambulo said.

The Philippine Statistics Authority estimates that fisheries output dropped 3.4% to 4.25 million metric tons in 2021. — Revin Mikhael D. Ochave