Home Blog Page 6218

AREIT says on track to reach carbon neutrality by yearend

AREIT, Inc., the real estate investment trust of Ayala Land, Inc., said Friday that it is “on track” to achieve carbon neutrality in its commercial properties this year.

“AREIT is on track to achieve carbon neutrality by yearend and targets net zero emission by end 2022 for its current buildings, contributing to Ayala Land’s carbon neutrality in the same year,” it said in a statement.

Carbon neutrality refers to achieving net zero emissions by balancing carbon emissions and absorption from the atmosphere.

The company celebrated its first anniversary on Friday since it debuted on the Philippine Stock Exchange.

AREIT said it intends “to deliver site resilience, pedestrian mobility and connectivity, resource efficiency and local economic development through its commercial properties.”

The share price of AREIT has increased by 34.8% since listed in 2020, owing to high demand from investors.

“From an IPO (initial public offering) price of P27, it reached a 52-week high of P37,” AREIT noted.

AREIT President and Chief Executive Officer Carol T. Mills said: “We are glad to have demonstrated through AREIT the benefits of investing in REITs and its contribution to fueling real estate development.”

AREIT posted a 31% increase in net income to P1.34 billion in the first six months of 2020.

In a recent statement, AREIT said that excluding the unrealized gains in fair value recognition of its properties, its first-half net income climbed by 55% to P1.01 billion.

AREIT shares closed 1.51% higher at P36.95 apiece on Friday. — Arjay L. Balinbin

BSP watching price pressures

REUTERS

The Philippine central bank would monitor the potential second-round effects of inflation and would deploy policy tools to safeguard price and financial stability, Governor Benjamin E. Diokno said on Friday. 

“We agree with the assessment of the International Monetary Fund (IMF) that inflation could return to its pre-pandemic ranges in most countries in 2022,” he told an online news briefing. “However, caution should be exercised to ensure that temporary price pressures do not become fully entrenched in the domestic price dynamics.” 

“The Bangko Sentral ng Pilipinas (BSP) stands ready to maintain its accommodative monetary policy stance for as long as necessary to support the economy’s recovery amid the adverse impact of the COVID-19 pandemic,” he added. 

The central bank would also ensure that monetary policy settings are “in line with sustainable recovery of the economy, consistent with its price and financial stability mandates.” 

The Philippines should avoid prematurely unwinding fiscal and monetary support for the economy given a fragile recovery amid lockdowns spurred a fresh surge in coronavirus infections, according to the IMF. 

“We need to nurture this recovery,” IMF Philippine representative Yongzheng Yang told an online forum on Friday. “One thing we should avoid is the premature withdrawal of macroeconomic policy support, because recovery is so fragile.” 

The government appears to have balanced economic support with a sustainable debt level, Mr. Yang said.

The multilateral lender projected the country’s general government debt to peak at 62% of economic output by 2024 from 48.1% in 2020, higher than the pre-pandemic ratio of 34.1%. This is considered a moderate level compared with peer countries.

“But within this good balance, there needs to be flexibility in policy support,” he said. 

“We need to be able to move resources quickly to respond to emerging priorities,” Mr. Yang said. The recent infection surge showed the need to support the health sector by boosting hospital resources, tracing, testing, isolation and vaccination, he added. 

The IMF in June cut its 2021 economic growth forecast for the Philippines to 5.4% from the 6.9% it gave in March. Mr. Yang said the virus surge and renewed lockdowns threaten economic expansion that is less optimistic than the government’s 6-7% target for the year. 

“There are risks and the bottom line is they are substantial,” the IMF official said. “The recovery will need to be nurtured and the risk needs to be managed.” 

Still, he said the government has enough fiscal room to mitigate the risks of a protracted coronavirus pandemic. 

The state should also focus on improving the implementation of fiscal measures such as the credit guarantee scheme that is meant to encourage banks to lend more to small and medium-sized enterprises, Mr. Yang said. 

The IMF thinks the BSP should keep its monetary policy stance while taking into account rising consumer prices. But prices seem to have started moderating, and are is projected to go back to the central bank’s target of 2-4% by year-end, Mr. Yang said. 

“The risk of inflation is more or less balanced.” 

Inflation was 4% percent in July, the slowest in seven months and the first time it settled within the central bank’s 2-4% target for the year. 

The BSP also kept benchmark interest rates at record lows to support the economy. 

Fitch Solutions on Friday said it expects the central bank to keep the policy rate unchanged at 2% until late-2022, before increasing it by 50 basis points to 2.5% by the end of next year. 

In a note, the think tank said the BSP would keep its accommodative stance to support economic recovery as pandemic disruptions persist. The chances of further policy rate cuts seem muted since demand for credit remained weak, it added. 

“A spread of the Delta variant to other regions and prolonged nationwide lockdowns could even prompt the BSP to ease monetary conditions further to support growth,” it said. 

“For now, we think any monetary easing would come via the lowering of reserve requirement ratios rather than a cut to the key policy rate,” it added. 

July reserves hit $106.6B

Philippine dollar reserves rose in July after the government’s global bond sale and due to rising gold prices in the international market, the central bank said on Friday. 

Gross international reserves went up by 0.75% to $106.55 billion from a month earlier, data from the Bangko Sentral ng Pilipinas (BSP) showed. The end-July level was 8.1% higher than a year earlier. 

The central bank traced the increase to inflows from net foreign currency deposits by the government, including proceeds from its global bond sale and the rise in the value of gold held by the BSP. 

The state raised $3 billion from its dual-tranche offering of dollar-denominated bonds in June, — $2.25 billion via 25-year securities and $750 million in 10.5-year notes. The global bonds were settled on July 6. 

The state tapped the global bond market for the third time this year to support its P4.5-trillion spending plan for the year amid a coronavirus pandemic. 

Meanwhile, BSP data showed the gold reserves stood at $9.15 billion as of end-July, 3.1% higher than a month earlier 27.4% lower than last year. 

Spot gold went up by 0.2% to $1,756.61 per ounce on Friday, with analysts expecting prices to stay within $1,750-$1,800 in the short term, Reuters reported. 

The Philippine central bank started actively trading in gold to take advantage of rising prices amid a global health crisis. 

Higher reserves were offset by outflows from the government’s payment of foreign currency-denominated loans and by foreign exchange operations of the central bank. 

The reserve level was adequate to provide a liquidity buffer equivalent to 12.1 months’ worth of imports of goods and payments of services and primary income, the central bank said. 

It can also cover the country’s short-term external debt up to 7.7 times based on original maturity, or 5.1 times based on residual maturity. 

The country’s dollar reserves were three times greater than the international threshold covering three to four months’ worth of imports, which could cushion the peso against the dollar’s rise, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. said in a Viber message. 

The higher reserves could boost the peso amid a strong outlook for the dollar, said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. — Beatrice M. Laforga 

BIR collects P1B in back taxes

The Bureau of Internal Revenue (BIR) collected P1.014 billion in back taxes from 274 commercial establishments it temporarily shut down in the first half, according to the Department of Finance (DoF).

The bureau also filed 84 complaints at the Justice department against tax-evading companies with combined unpaid taxes of P3.15 billion for January to June, DoF said in a statement on Friday, citing a report from Internal Revenue Deputy Commissioner Arnel SD. Guballa.

BIR has likewise filed 17 cases at the Court of Tax Appeals (CTA) seeking to collect P1.54 billion.

The bureau shutters businesses that violate tax laws such as failing to register, issue receipts and file value-added tax (VAT) returns. Companies that understate taxable sales by at least 30% also risk being shut down.

The closure order lasts for at least five days and can only be lifted once the taxpayer has complied with its tax liabilities.

BIR collected P608 million in back taxes after shutting down 209 companies last year. It also filed 157 complaints at the Justice department for tax liabilities worth P7.5 billion, and 24 cases at the tax court for P754 million in unpaid taxes.

Among the latest operations of the bureau were in two warehouses in Pampanga province where it found P1.56 billion worth of total excise tax leakages, Mr. Guballa said.

The bureau seized a motor vehicle and 27,132 packs of illegal cigarettes without tax stamps or with fake stamps and the raw materials used to make cigarettes at the Technology Resource Center in Pampanga.

The agency also seized 2.06 million worth of fake stamps and two cigarette-making machines in a facility at the Global Aseana Business Park in San Simon. BIR uses stamps on cigarettes for which excise taxes have been paid.

BIR topped its collection target for the first half by 1.61% after generating P1.034 trillion in taxes, 8.11% higher than a year earlier. It is targeting to collect P2.081 trillion this year. — Beatrice M. Laforga 

Chery Tiggo comes back to win PVL Open Conference title

The Chery Tiggo Crossovers are the PVL Open Conference champions after defeating the Creamline Cool Smashers in five sets in the Game Three rubber match of the finals on Friday. -- PVL Media Bureau

There is a new sheriff in the Premier Volleyball League.

The Chery Tiggo Crossovers came back from two sets down to defeat top seeds Creamline Cool Smashers in five sets in the Game Three rubber match of the finals to win the Open Conference title at the PCV Socio-Civic & Cultural Center in Bacarra, Ilocos Norte, on Friday.

Dindin Santiago-Manabat and Jaja Santiago led the Crossovers to the hard-earned 23-25, 20-25, 25-21, 25-23, 15-8 win where they were seemingly headed to an early exit after going down, 0-2, in the match.

With its season on the line, Chery Tiggo dug deep in the third set, led by veteran Santiago-Manabat, who packed the heat with solid attacks to trim their deficit, 1-2.

In the fourth set, Creamline threatened to pull away early but Chery Tiggo would recover midway before moving on to force a deciding set.

In the decider, the Crossovers used a 4-0 run at the start as a springboard to make their charge.

The Cool Smashers tried to recover after but sisters Dindin and Jaja and the rest of the Crossovers would not allow any Creamline comeback to happen as they went on to become the inaugural champions of the PVL as a professional league.

Ms. Santiago-Manabat top-scored for Chery Tiggo with 32 points — 30 coming from attacks. Ms. Santiago, meanwhile, had 26 points.

“Thanks to God. We really offer this to Him as He guided us and we showed what we are made of,” said Chery Tiggo coach Aaron Velez after their win.

For three-time PVL champion Creamline, which finished the elimination round with the best record of 8-1, it was Tots Carlos who led with 22 points, followed by Alyssa Valdez with 17 and Risa Sato and Jema Galanza with 14 points apiece.

Jaja Santiago of the Chery Tiggo Crossovers was named both finals and tournament MVP. — PVL Media Bureau

Individual awards

Meanwhile, Ms. Santiago won triple individual awards, bagging the tournament most valuable player award and the finals MVP as well as being named one of the best middle blockers in the Open Conference.

Creamline’s Jia Morado was the best setter while Ms. Valdez and Petro Gazz’s Myla Pablo were the best outside hitters.

Ria Meneses of Petro Gazz was the other best middle blocker, with Kat Tolentino (Choco Mucho) and Kath Arado (Petro Gazz) named best opposite spiker and best libero, respectively.

Sports Vision Management Group Inc., the organizer of the PVL, expressed gratitude upon the conclusion of the tournament, done in a “bubble” and followed strict health and safety protocols crafted by the national government and local government unit of Ilocos Norte. It hopes to stage its next tournament in October.

Security Bank net profit drops 47% in Q2 amid tightened credit standards

BW FILE PHOTO

Security Bank Corp. said net profit fell 46.8% from a year earlier to P1.474 billion in the second quarter as it tightened credit standards, leading to lower interest and trading income. 

The bank said in a statement to the bourse Friday that first-half neat earnings came in at P3.12 billion, down 44.9% from a year earlier. 

Security Bank’s net interest income fell 10.72% year-on-year to P6.923 billion in the three months to June. The net interest margin fell to 4.36% at the end of June, compared to the year-earlier 4.71%. 

Income from service charges, fees and commissions rose 72.7% to P1.086 billion, but gains from trading activities declined 89% to P408.28 million. 

The bank booked an operating income for the quarter of P9.56 billion, down from P12.65 billion a year earlier. 

Operating expenses declined to P7.33 billion from P10.35 billion a year earlier. 

In the first half, loans and receivables fell to P425.2 billion from P438.9 billion at the end of 2020 due to the tighter credit standards imposed during the economic slowdown resulting from the pandemic. 

It set aside P2.4 billion in provisions for credit losses in the first half, down 78.2% from a year earlier, when It front-loaded much of its provisioning activity in anticipation of deteriorating conditions for its clients. 

The gross non-performing loan ratio stood at 3.93%, with the bad-loan cover ratio falling to 102.64% from 115.47%. 

Security Bank’s total deposits rose 18.6%  from the start of the year to P522.2 billion in the first half, driven largely by time deposits. 

The capital adequacy ratio stood at 20.39% at the end of June, well above the central bank’s minimum requirement of 10%. 

The bank reported a return on equity of 5.05% at the end of June, down from 9.23% a year earlier. Its return on assets also fell to 0.92% from 1.48% previously. 

Since the start of 2021, the bank grew its asset base by 7.76% to P703.542 billion at the end of June. 

“Our second quarter results reflect continued quarter-on-quarter improvement from the fourth quarter of 2020 despite the challenging pandemic backdrop. Our team is grateful for the recognition of the bank’s unrelenting commitment on delivering BetterBanking to address our clients’ needs,” said Security Bank President and CEO Sanjiv Vohra in a statement Friday. 

Security Bank shares rose P4.50 to P117 on Friday. – Beatrice M. Laforga 

EastWest net profit falls 18% in H1 on weak loan activity

East West Banking Corp

East West Banking Corp. (EastWest Bank) booked lower net earnings in the first half of the year due to decline in both loan revenue and trading gains. 

Net profit fell 18% from a year earlier to P3.8 billion in the six months to June, the bank said in a statement. 

“The lower income was mainly due to lower loan revenue and trading gains,” it said. 

Net interest income declined 14% to P11.5 billion after it made fewer loans and realized weaker yields on both loans and fixed-income securities, the bank said. 

“This was partly cushioned by the decline in funding costs as the BSP maintained its accommodative monetary policy,” EastWest said. 

The return on equity was 13.3% at end of June, against the year-earlier 17.4%. 

The net interest margin was at 7.3%, down from 8.3% a year earlier. “(The bank’s) consumer-heavy loan portfolio allowed the Bank to maintain its industry-leading margins,” it said. 

Trading gains declined 49% year-on-year to P1.6 billion. 

Fee income rose 22% to P2.2 billion as the economy and banking transaction volume started to improve. 

Revenue in the first half declined 19% to P15 billion. 

Provisioning for loan losses fell 74% to P1.4 billion, after it had recognized a significant proportion of its loan losses last year. 

“Based on current economic trends and the expected acceleration of vaccination, we believe the worst is over and economic conditions should start to improve.  Provisions for loan losses this year should be lower from the abnormally high levels last year.  Nonetheless, we continue to monitor and manage our credit risk taking” EastWest Chief Lending Officer Jacqueline S. Fernandez said. 

Loan volume fell 12% to P225.8 billion, dragged down by weak demand and as the bank adopted a “prudent risk-taking” strategy. 

Deposits rose 6% to P317.8 billion, driven by the 21% growth in money held in current accounts and savings accounts (CASA) which offset a 20% decline in time deposits.  The CASA ratio improved to 72% at the end of June from 63% a year earlier. 

The capital adequacy ratio stood at 14.7% at the end of June, higher than the year-earlier 13%, while Tier-1 common equity came in at 13.6%, up from 11.9% previously. Both are well above minimum regulatory requirements. 

“We expect to sustain decent levels of profitability this year. We believe the economy is at the inflection point of recovery.  We expect to come out from this pandemic with higher capital buffers and in a good position to recover lost ground and resume our growth programs,” EastWest President and Chief Executive Officer Antonio C. Moncupa, Jr. said. 

Shares of the bank, controlled by the Gotianun family, closed at P9.33 Friday, down 0.74%. – Beatrice M. Laforga 

BSP raises P100 billion from issue of 28-day bills

BW FILE PHOTO

The central bank made a full award of the P100 billion worth of 28-day bills on offer Friday, with strong demand pushing down rates. 

The Bangko Sentral ng Pilipinas (BSP) said total tenders amounted to P183.25 billion, or 1.83 times the supply of bills. 

Demand rose 10.5% from the previous auction last week. 

The average yield was 1.749%, down from 1.762% a week earlier. 

Banks sought yields of between 1.74% and 1.753%, trending lower from the 1.7475%-1.78% range in the previous auction. 

“The auction results are in line with current market developments as financial system liquidity remains ample,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement. 

The Monetary Board of the BSP kept its key policy rates steady to support the economy’s recovery, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber. 

For the sixth straight meeting on Thursday, the central bank retained its key policy rate unchanged at a record low of 2%, as expected by the 18 analysts polled by Businessworld last week. – Beatrice M. Laforga 

The BSP also maintain the overnight deposit and lending rates at 1.5% and 2.5%, respectively. 

It cited the need to support economic recovery, especially after several parts of the country, including Metro Manila, was placed under the strictest form of lockdown again amid a resurgence in infections. 

“Moving forward, the BSP’s monetary operations will continue to be guided by its latest assessment of liquidity conditions and market developments,” Mr. Dakila said. 

Assets managed by trusts rebound in March

The assets under management (AUM) of 30 trust entities rose 41.3% year-on-year to P4.6 trillion in March, led by unit investment trust funds (UITFs), the Bangko Sentral ng Pilipinas (BSP) reported Friday. 

In briefing, BSP Governor Benjamin E. Diokno said the total was equivalent to one-fourth of the assets of the banking system, indicating high levels of liquidity in the sector. 

Some 43.8% of the assets were invested in debt securities, 23.5% in equities and 23.4% in bank deposits, he said. 

“The notable growth in UITFs is a welcome development,” he said. 

“The BSP recognizes the importance of UITFs as an avenue for small retail investors to participate in the securities markets. Certainly, the online accessibility of UITFs contributed to their growth,” he added. 

At the height of the lockdowns in March 2020, AUM fell following the decline in the stock market and as investor preferences shifted in light of the heightened uncertainty. 

“The stable growth of the trust industry reflects the deep-rooted relationship between clients and trust entities, and the continued confidence of investors in the fund and asset management business,” Mr. Diokno said. 

The BSP continues to improve its regulatory framework for trust entities, with more regulations to be issued under its “Trust Business Model Initiative.” 

In June, the central bank issued two draft circulars aiming to streamline the requirements for financial institutions’ creation of UITFs. 

Mr. Diokno said regulators are also scheduled to release rules that will set comprehensive investment guidelines for trust entities; enhancements to the onboarding and client suitability assessment process; guidelines for measuring the performance of UITFs; guidance to align the management of UITFs with the International Organization of Securities Commissions’ Principles; as well as amendments to Personal Management Trust regulations. – Beatrice M. Laforga 

DBP tapped as conduit for distributing Agriculture dep’t aid

THE Development Bank of the Philippines (DBP) has been appointed a distributor of financial assistance to farmers and fishing communities for funds disbursed by the Department of Agriculture (DA). 

In a statement Friday, DBP President and Chief Executive Officer Emmanuel G. Herbosa said the bank will dispense cash or loan interest subsidies and other forms of assistance to qualified agri-fishery enterprises, agriculture cooperatives, farmers, fisherfolk, and farm workers.  

Under the agreement signed by DA and DBP, the funds will be downloaded directly to DBP accounts or those maintained in other banks, as well as electronic money issuers (EMIs) and other Bangko Sentral ng Pilipinas-supervised financial institutions. The bank will use electronic fund transfer channels such as the Philippine Payment and Settlement System (PhilPASS) and DBP-accredited payout outlets.  

Mr. Herbosa said the DBP will also be working with the Rural Bankers Association of the Philippines and various EMIs to implement the project.  

“The DA will also be introducing an ‘Interventions Monitoring Card’ that will serve as an identification card to access government assistance for farmers enrolled in the farmers’ registry, starting with the second round of the Rice Farmers’ Financial Assistance worth P5,000 each, that will be disbursed in the last quarter of the year,” Mr. Herbosa said. — Revin Mikhael D. Ochave   

Peso drops further on Delta surge fears

The peso weakened further Friday as the growing threat of the Delta variant of the coronavirud continued to weigh on financial markets. 

The peso closed at P50.48 to the dollar , against its Thursday close of P50.39, according to Bankers Association of the Philippines website. 

The peso opened at P50.43, rising to a high of P50.37. The low was P50.49. 

Dollars trading volume eased to $641.17 million from $723.3 million the day prior. 

Weekonweek, the currency shed eight centavos from its P50.40 finish the previous Friday. 

The peso also weakened after the stock market slipped to one-week lows amid growing concerns over the Delta variant, raising the prospect of an extended lockdown, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber. 

Health authorities reported 13,178 new coronavirus infections Friday to bring the total number of active cases to 96,395. There were also 299 deaths reported due to the virus that day, pushing the tally to 29,838. 

The benchmark Philippine Stock Exchange index (PSEi) fell 3.6% or 236.38 points to 6,320.19 Friday, while the broader all shares index declined 2.04% or 82.99 points to 3,976.94. 

The Philippine Chamber of Commerce and Industry (PCCI) in a statement Friday warned that extending the hard lockdown imposed in Metro Manila to five weeks could further hamper economic activity. 

A bond trader said the peso’s weakness was also due to upbeat US initial jobless claims data and strong producer inflation readings. 

The US producer price index increased by a record 7.8% in July, while initial claims for public jobless benefits fell by 12,000 to 375000 for the week ending Aug. 7, according to Reuters. —  Beatrice M. Laforga 

Budget Secretary Avisado resigns for health reasons

Budget Secretary Wendel E. Avisado resigned on Friday, citing health reasons, the President’s Spokesman Herminio L. Roque, Jr. said. 

In a Viber message, Mr. Roque said President Rodrigo R. Duterte accepted Mr. Avisado’s resignation on Friday, adding that Undersecretary Tina Rose Marie L. Canda will serve as officer-in-charge (OIC) of the Department of Budget and Management (DBM). 

Mr. Avisado filed for medical leave between Aug. 2 and 13 after contracting coronavirus disease 2019 (COVID-19). He was hospitalized for eight days and quarantined for more than a month. 

He was appointed Secretary in August 2019. 

“I am sad that our Secretary has to retire because of his health condition. I hope he recovers and will be well,” she said in a Viber message Friday. 

The executive department needs to meet a 30-day deadline under the Constitution to submit the budget to Congress following the State of the Nation Address, which was delivered this year on July 26. 

ACT-CIS Representative Eric G. Yap, who chairs the House committee on appropriations, said the resignation will not affect the 2022 budget’s timetable. 

Ms. Canda has said that Mr. Duterte approved the proposed P5.024-trillion National Expenditure Program (NEP) for 2022 even before Mr. Avisado went on medical leave. 

She said the DBM is finalizing the accompanying documentation required to submit the NEP to Congress, with a target date of Aug. 23. – Beatrice M. Laforga