Cash remittances up for 7^th straight month in August

October 15, 2021 | 7:34 pm

Remittance_Moneychanger_PHILIPPINES — Cash remittances rose 5.1% to $2.609 billion in August. -- Reuters

By Jenina P. Ibañez, Reporter

Money sent home by overseas Filipino workers (OFWs) increased for the seventh straight month as more host economies with high vaccination rates reopened.

Cash remittances rose 5.1% to $2.609 billion in August from $2.483 billion a year earlier, based on data released by the Bangko Sentral ng Pilipinas (BSP) on Friday.

“The growth in cash remittances was due to the increase in remittances from land-based workers and sea-based workers, which rose by 4.1 percent (to $2.032 billion from $1.952 billion) and 8.6 percent (to US$577 million from US$531 million), respectively,” the BSP said.

Cash remittances however declined 8.55% from $2.853 billion in July, which was the biggest inflow since the $2.89 billion in December 2020.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the month-on-month dip in cash remittances since July may have reflected recent risks arising from the more infectious Delta coronavirus disease 2019 (COVID-19) variant in host countries.

“But overall, it seems that recovery will continue especially for countries where our OFWs are located,” he said.

For the first eight months of 2021, total cash remittances went up 5.7% to $20.38 billion from $19.285 billion recorded in the same period last year.

The central bank said remittances from OFWs in the United States, Malaysia, and South Korea contributed to the boost in the year-to-date tally.

The US is still the biggest remittance source, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, South Korea, Qatar, and Taiwan.

Combined remittances from these countries accounted for 78.8% of total cash remittances.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said further reopening and recovery of many economies as they move closer to herd immunity against the COVID-19 led to the creation of more jobs for Filipinos.

“OFW remittances remain resilient despite the repatriation of more than 700,000 OFWs since the pandemic, given the increased social function of providing assistance to OFW families and dependents in the country adversely affected by the COVID-19 pandemic/lockdowns since last year, as well as the need to send more remittances to make up for higher inflation in recent months,” he said.

Metro Manila was under the strictest form of lockdown for two weeks in August to curb a fresh wave of COVID-19 infections.

UnionBank’s Mr. Asuncion said the bank expected this robust growth in August after it forecasted a 4.9% increase.

“With this latest data, our forecasts now tell us that 2021 OFW remittance inflow will grow by an average of 4.5%,” he said.

Mr. Asuncion said seasonal inflows ahead of the holidays may be higher than expected.

“This expectation fits in to our view that these inflows will underpin a strong (Philippine peso) narrative ready to counter (US dollar) strength due to a more hawkish US Fed and downward pressures from higher global oil prices,” he said.

Meanwhile, personal remittances, which include inflows in kind, jumped 4.8% to $2.889 billion in August from $2.756 billion a year earlier.

Year to date, personal remittances increased by 5.9% to $22.672 billion from $21.414 billion in the same period last year.

Remittance inflows support household spending, which makes up about 70% of the economy.

The BSP expects cash remittances grow 4% this year after declining by 0.8% in 2020.

BIR clarifies COVID-19 drug VAT exemptions

October 15, 2021 | 7:30 pm

2021-01-21_TOCILIZUMAB_CORONAVIRUS — A pharmacist displays a box of tocilizumab, which is used in the treatment of coronavirus disease 2019 (COVID-19), at a pharmacy in France, April 28, 2020. -- REUTERS/Pascal Rossignol/File Photo

The Bureau of Internal Revenue (BIR) clarified that only medicines and medical devices for the treatment of coronavirus disease 2019 (COVID-19) included in an updated government list will be exempt from value-added tax (VAT).

The medical products are only those included in a list submitted by the Food and Drug Administration (FDA) in June, BIR said in a press release on Thursday.

“Only the medicines and medical devices for COVID-19 with the corresponding dosage strength, and dosage form and route of administration included in the consolidated Iist of VAT-exempt Products submitted by the FDA to the BIR shall be considered as exempt from VAT,” the bureau said.

The clarification was done in response to stakeholders who have asked about the VAT exemption of medicines for diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, kidney diseases, drugs and vaccines, and medical devices prescribed and directly used for COVID-19 treatment under the Tax Code, as amended by the TRAIN Law and the CREATE Act.

The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act allows for the VAT exemption of the importation and sale of medicines and medical devices used to treat COVID-19.

The VAT exemptions of said medicines and devices took effect on June 17, the day the FDA published its list.

According to BIR memorandum circular 99-2021 issued last month, any list provided by the FDA prior to the one issued in June are no longer in effect.

“The consolidated list was intended to update the previous lists for ease of reference and for use by all stakeholders concerned,” BIR said.

Unutilized input VAT on now VAT-exempt inventories may be carried over to the succeeding taxable quarters or be charged as part of cost.

The BIR also said that there will be no tax refund “for the supposed erroneously paid VAT on local purchases and importation.”

“A tax refund may be allowed only in cases where there is a change of status from VAT to Non-VAT registration.” — Jenina P. Ibañez

Container-ship traffic jam in Southeast Asia worst since April

October 15, 2021 | 7:28 pm

Container_SHIPPING-ENVIRONMENT-USA — REUTERS

Typhoon Kompasu has resulted in the worst container shipping traffic jam in months, one that now stretches throughout Southeast Asia and may take weeks to unravel.

Although port operations are largely back to normal in Shenzhen and Hong Kong after the tropical storm’s passing, the total container ship count off the two vital hubs had ballooned to 271 as of early Friday, the highest count recorded since Bloomberg News started tracking the data in April.

At least 109 ships were meanwhile reported as anchored and waiting to enter the ports, up from 67 on Thursday.

“The supply chain is very stretched, with no buffer, so any little event will cause another big problem,” James Teo, an analyst at Bloomberg Intelligence, said. “There are too many choke points.”

Teo expects port congestion will likely continue until at least the Lunar New Year holiday, which next falls on Feb. 1.

The storm, which is now bearing down on Vietnam, has also scattered ships out of Haiphong, that country’s third largest container port. Further down the coastline, waiting container ships off Singapore reached their highest since July 21, when Typhoon In-fa battered Shanghai and similarly snarled the region’s supply chain.

PSA Corp., which operates Singapore’s container terminals, said it’s working with shipping line customers to help them catch up on their delayed schedules and meet cargo connections.

“The global supply chain disruption is likely to continue for the foreseeable future and PSA will continue to ensure the adequate deployment of resources,” the terminal operator said in an emailed statement.

The impact of typhoons in Asia has rippled through the global supply chain, similar to the effect of hurricanes in the Gulf of Mexico that have caused logjams in the world’s largest economies. U.S. President Joe Biden announced Wednesday that the Port of Los Angeles will now operate 24 hours a day to help smooth out kinks.

Congestion off America’s largest container port remains elevated, Bloomberg-compiled data show, but has eased to be 2.9% above the median observed by from April to October. — Bloomberg

Lucio Tan injects nearly P13 billion in fresh capital in PAL parent

October 15, 2021 | 7:25 pm

Billionaire Lucio C. Tan, through his private firm Buona Sorte Holdings, Inc. (BSHI), is infusing “fresh and additional capital” worth P12.75 billion into the listed parent company of Philippine Airlines (PAL).

In a disclosure to the exchange on Friday, PAL Holdings, Inc. said the management approved the $255-million (P12.75 billion) private placement by BSHI, the parent of Trustmark Holdings Corp.

“The P12.75 billion private placement represents the full and final payment of BSHI’s subscription to 10.2 billion new common shares of (PAL Holdings) at a subscription price of P1.25 per share in favor of BSHI,” the company said, adding the amount will be received in cash.

This comes after PAL Holdings increased its authorized capital stock to 30 billion from 13.5 billion with a par value of one peso per share. PAL Holdings said the increase would be integral to its goal of “sustainable profitability.

“The purpose of the proposed increase of authorized capital of the issuer is to accommodate the fresh infusion of capital into the company by an affiliate company of the Lucio Tan Group of Companies. The new capital will in turn be invested into the issuer’s subsidiary, Philippine Airlines, pursuant to the court-supervised reorganization of PAL,” the company said in a Sept. 28 disclosure.

PAL Holdings is the listed operator of cash-strapped flagship carrier Philippine Airlines.

One of the country’s richest men with an estimated net worth of $2 billion according to Forbes, Mr. Tan holds a 76.9% stake in PAL Holdings.

As the pandemic battered global travel and tourism industry, Philippine Airlines filed for Chapter 11 bankruptcy in a New York court in September. Under its restructuring plan, the flag carrier sought to slash $2 billion in borrowings and to secure $505 million in equity and debt financing from existing shareholder and banks, as well as $150 million in loans from new investors. — KCGV

Megawide shares slump after DOJ indicts key executives

October 15, 2021 | 7:24 pm

Shares of Megawide Construction Corp. slumped by as much as 10% on Friday, following the indictment of key executives for violations of the Anti-Dummy Law in connection with the Mactan-Cebu International airport (MCIA) contract.

Megawide shares closed at P6.27 apiece on Friday, down 8.20%, after the Justice department on Thursday said it indicted 15 executives of GMR Megawide Cebu Airport Corp. (GMCAC) based on a complaint filed by the National Bureau of Investigation.

GMCAC is a joint venture between Megawide and India’s infrastructure giant GMR Group that won in 2014 the government contract to develop and operate the MCIA.

Megawide on Friday said it has not received any official documents pertaining to the filing of criminal charges against its officers.

“Megawide and its subsidiaries have always been and continue to be firmly adherent to all applicable laws, rules, and regulations, particularly regarding public-private partnership projects, such as the [MCIA],” it said in a disclosure.

The Department of Justice (DoJ) on Thursday said a panel of prosecutors found that eight foreign nationals Andrew Acquaah-Harrison, Ravi Bhatnagar, Ravishankar Saravu, Michael Lenane, Sudarshan Madhav Doddathota, Kumar Gaurav, Magesh Nambiar, and Rajesh Madan were acting as executive officers, managers, and/or employees of GMCAC “in conspiracy” with other Filipino executives.

Also named in the indictment were GMCAC officers and board directors, Edgar B. Saavedra, Manuel Louie B. Ferrer, Oliver Y. Tan and Jez G. Dela Cruz. Mr. Saavedra is the chief executive officer (CEO) and chairman of Megawide, while Mr. Ferrer is the chief corporate affairs and branding officer. Mr. Tan is a Megawide director, while Mr. Dela Cruz is an assistant vice president.

The DoJ said Messrs. Saavedra, Ferrer, Tan and Dela Cruz, along with fellow officers and board members, GMR Group Chairman Srinivas Bommidala, P. Sripathy, Vivek Singhal, “allowed and permitted” the eight foreign nationals to manage and operate the MCIA which should only be reserve for Filipino citizens since MCAC is a “public utility corporation.”

Also indicted was Steve Y. Dicdican, the general manager and CEO of the Mactan Cebu International Airport Authority, for “knowingly assisting, aiding, and abetting the commission of a violation of the Anti-Dummy Law.”

“The law is aimed at prohibiting the use of [a] Filipino for foreign interest, so those prohibited to do business in the Philippines, like foreigners, will not do it through the Filipinos,” Antonio A. Ligon, law and business professor, said in a phone call. — K.C.G.Valmonte

AEV sets early redemption of bonds due 2023

October 15, 2021 | 7:20 pm

Aboitiz Equity Ventures, Inc. (AEV) on Friday said it will exercise the early redemption of its 10-year, fixed-rate retail bonds ahead of the 2023 maturity date.

In a regulatory filing on Friday, AEV said it intends to redeem the securities, which were issued in 2013, on Nov. 21.

“Through the optional redemption, AEV will prepay the optional redemption price of 101% of the face value of the 2013 10-Year bonds, in the amount of P1.8 billion only,” the company said.

AEV said it will use existing cash to repay the bonds.

The company is coordinating with the trustee Metrobank Trust Banking Group, and the registrar and paying agent Philippine Depository and Trust Corp. to notify the bond holders and provide computations on the amount.

Earlier this month, AEV acquired P384 million worth of shares in its banking unit UnionBank of the Philippines.

In September, AEV announced plans to sell 25% of its stake in its power subsidiary Aboitiz Power Corp. to Japan’s JERA Co., Inc. for an estimated $1.463 billion.

Shares of AEV in the local bourse improved 2.32% or P1.1 to close at P48.45 apiece on Friday. — Angelica Y. Yang

GMA Network opens regional station in Zamboanga

October 15, 2021 | 7:18 pm

GMA Network, Inc. launched a regional TV station in Zamboanga City, which will serve audiences in the Zamboanga Peninsula as well as nearby provinces of Basilan, Tawi-Tawi, and Sulu.

In an e-mailed statement on Friday, the network said GMA Zamboanga will be its fourth regional TV station in Mindanao and it will also serve as GMA Regional TV’s Western Mindanao hub. It is also its tenth regional TV station in the Philippines.

Viewers can watch GMA’s local and national programs on GMA Channel 9 Zamboanga and GMA Channel 12 Jolo (Sulu).

“GMA Network, thru GMA Regional TV, remains steadfast in our commitment to deliver local news that matters and stories that inspire through multiple languages and dialects in various communities across the Philippines,” GMA Regional TV and Synergy First Vice President and Head Oliver Victor Amoroso said in a statement.

GMA also has regional TV stations in Northern and Central Luzon (GMA Dagupan and GMA Ilocos), in the Bicol Region (GMA Bicol), in Central and Eastern Visayas (GMA Cebu), in Western Visayas (GMA Iloilo and GMA Bacolod), in Northern Mindanao (GMA Cagayan de Oro), and South Central and Southern Mindanao (GMA Davao and GMA General Santos). — K.C.G. Valmonte

Globe on track to end the year with 1.4M fiber lines

October 15, 2021 | 7:16 pm

Globe Telecom, Inc. said it expects to have 1.4 million fiber lines by yearend, as demand for fiber connection soared during the pandemic.

“We built only 50,000 ports in 2019. We built 600,000 ports in 2020. In 2021, we expect to build about 1.4 million ports and that pivot was largely driven by the change of habit in the home,” Ernest L. Cu, president and chief executive officer of Globe Telecom, said in a webinar on Friday.

As most Filipinos continue to working from home nearly two years into the pandemic, Mr. Cu said the demand for faster internet connection remained high.

“That’s bringing tremendous load on the networks that wireless can no longer deliver. Everybody wants fiber and that’s why we are doing it,” Mr. Cu said.

As of September this year, Globe has already achieved its target of building one million fiber lines.

Mr. Cu said Globe currently has 641 newly built cell towers, 1,759 5G sites across the country, and 8,175 mobile sites that have been upgraded.

Shares of Globe Telecom at the stock exchange on Friday declined by 3.88% or P130, closing at P3,220 apiece. — Keren Concepcion G. Valmonte

PayMaya to offer ‘sachet-sized’ insurance products

October 15, 2021 | 7:13 pm

PayMaya Philippines, Inc. partnered with international firm bolttech group to offer “sachet-sized” insurance products and services tailored for the country’s young and underserved market.

The products are under “PayMaya Protect,” which is powered by the insurance exchange platform of bolttech. It may be accessed through the PayMaya app.

“Our initial offers for health insurance and device protection are very relevant now, especially among our younger customers seeking better ways to protect what matters most to them,” PayMaya Philippines President Shailesh Baidwan said.

The Personal Protect is offered in partnership with underwriter Pioneer Insurance & Surety Corp., covering expenses for dengue, coronavirus disease 2019 (COVID-19), as well as permanent total disability. Health coverage products may be availed in bundles for a minimum coverage of three months.

Meanwhile, PayMaya and bolttech will also offer Mobile Protect which will cover mobile device services for cracked screens, water damage, and such incidents for devices. Consumers may avail of the package monthly.

“We share PayMaya’s vision of empowering more Filipinos with convenient insurance products suited to their lifestyle needs,” bolttech Philippines General Manager Moritz Gastl said.

PayMaya is a unit of Voyager Innovations, Inc., which is the digital arm of 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. — Keren Concepcion G. Valmonte

Toyota cuts November outlook by 15% on parts shortage, COVID

October 15, 2021 | 7:11 pm

Toyota Motor Corp. cut its global car production target for November by around 15% from an earlier plan as a shortage of parts continues to weigh on the world’s No. 1 automaker.

The Japanese company had initially planned to make 1 million cars next month but now expects to do only around 850,000 to 900,000 units, it said in a statement Friday.

“Since we are still experiencing a shortage of some parts and will be unable to make up for previous production shortfalls, we have adjusted our initial production plans for November,” Toyota said. “This adjustment will affect approximately 50,000 units in Japan, and between 50,000 units and 100,000 units overseas.”

Toyota’s full-year production target of 9 million vehicles for the 12 months ending March 31, 2022 will be maintained however “due to the easing of restrictions on COVID-19 in Southeast Asia.” Smaller-than-expected production cuts in September and October also helped, it said.

“The worst period is over,” Kazunari Kumakura, the chief officer at Toyota’s purchasing group, said at a media briefing. “We’re seeing lower risks,” he said, although added as chip supply normalizes, supply and demand will remain tight.

Toyota, long lauded as one of the best in the business due to its just-in-time supply chain, has had a rough trot over the past few weeks. Last month, it said that power shortages in China were impacting output and it couldn’t provide further visibility as the situation is “still in flux.”

Earlier in September, Toyota trimmed its production outlook for this year by about 3% because the spread of coronavirus in Southeast Asia was disrupting access to semiconductors and other key parts. And this week, supplier Nippon Steel Corp. sought an injunction against the automaker to prevent it from manufacturing and selling electric and hybrid vehicles that use a type of steel critical for the performance of motors.

“In response to the continuing shortage of some parts, we will continue our efforts to strengthen our supply chain,” Toyota said on Friday. “We will implement thorough anti-COVID measures both at our own plants and at our suppliers, and since we expect the shortage of semiconductors to continue in the long term, we will consider the use of substitutes where possible.”

The November trim wasn’t that much of a surprise considering the environment, Bloomberg Intelligence analyst Tatsuo Yoshida said.

Toyota “was aiming for a very ambitious recovery, but the output won’t recover as much as originally planned,” he said. “Parts shortages and China’s power shortages still remain as risks.”

Shares in Toyota closed up 0.4% on Friday. They’ve risen 25% this year. — Bloomberg

Malaysia’s IPA-approved investments hit $1.66 billion

October 15, 2021 | 7:08 pm

MALAYSIAN investments registered with investment promotion agencies (IPA) reached $1.66 billion last year, according to the Department of Trade and Industry (DTI).

“From five major investments from Malaysia alone, IPA-approved investments between 2018 and 2020 is already valued at US $ 1.66 billion,” Rose Katrina V. Banzon, commercial attaché of Philippine Trade and Investment Center (PTIC)-Kuala Lumpur, was quoted as saying in an emailed statement on Friday.

PTIC Kuala Lumpur is the DTI’s representative office in Malaysia.

She said the PTIC-Kuala Lumpur, Board of Investments and Philippine Economic Zone Authority, among others, facilitated these investments.

DTI Secretary Ramon M. Lopez said Malaysia as a top trading partner and investment source fr the country, noting “strong” appetite among Malaysian investors despite the pandemic.

“In 2020, Malaysia ranked as the 10th trading partner of the Philippines, with balance of trade in the favor of Malaysia. In terms of investment, Malaysia was the 12th source of IPA-approved investments, registering a growth of 43.90% from previous year,” he said.

The Trade department said a Malaysian investment of $130 million was recently committed, adding that it covers some key sectors. It did not give further details.

Priority sectors of investments from Malaysia include manufacturing, agribuinsess, services, infrastructure projects, property development, construction services and energy. — A.Y. Yang

Exporters ask Customs to simplify process for self-certification scheme

October 15, 2021 | 7:06 pm

THE Philippine Exporters Confederation, Inc. (Philexport) is asking the Bureau of Customs (BoC) to expedite and simplify the application process of the ASEAN-Wide Self-Certification (AWSC) scheme to attract more participants.

The AWSC allows certified exporters belonging to ASEAN member nations to self-certify their products’ origins to avail of preferential tariffs under the ASEAN Trade in Goods Agreement.

Self-certified exporters are not required to secure a certificate of origin from the BoC for every shipment.

In a statement on Friday, Philexport said its Chairman George T. Barcelon described the self-certification process to be “complicated”, noting all traders accredited by the BoC should not have to go through another registration process.

The group quoted BoC Export Coordination Division (ECD) official Vanessa R. Hosana who earlier said registered exporters still need to receive ECD’s accreditation.

Once they get the authorization number, the traders can declare the origin of their products anytime, she said.

Meanwhile, Philexport vice president for advocacy, communications and special concerns Flordeliza C. Leong said the BoC should look at the low number of applications under the self-certification program, saying there are “recurring issues” in the accreditation process.

Philexport said the AWSC, which was implemented last year, lightens administrative burdens, allows the ease of doing business, and gives operational certainty to businesses. — A.Y. Yang