THE PHILIPPINES slipped one spot to 51st place out of 132 economies on an annual list that measures innovation performance after the country’s information technology (IT) infrastructure scores sank.
The country’s performance in the Global Innovation Index (GII) 2021 had previously been improving drastically. Read the full story.
Here’s a quick glance at how PSEi stocks fared on Tuesday, September 21, 2021.
THE PESO strengthened versus the greenback on Tuesday following gains at the stock market.
The local unit closed at P50.14 per dollar on Tuesday, appreciating by 10 centavos from its P50.24 finish on Monday, based on data from the Bankers Association of the Philippines.
The peso opened Tuesday’s session at P50.17 against the dollar. Its weakest showing was at P50.21, while its intraday best was at P50.08 versus the greenback.
Dollars exchanged dropped to $998.7 million on Tuesday from $1.117 billion on Monday.
The peso strengthened as the Philippine Stock Exchange index (PSEi) climbed yesterday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
The bellwether PSEi gained 23.3 points or 0.34% to end at 6,881.20 on Tuesday, while the broader all shares index shed 1.34 points or 0.03% to close at 4,264.99.
Meanwhile, a trader said the peso appreciated “as the global market stabilized following…market caution about the Chinese lender Evergrande”.
Evergrande is facing liabilities worth more than $300 billion, which is equivalent to 2% of China’s gross domestic product.
The People’s Bank of China summoned executives of the lender in August, warning it needed to reduce its debt risks and prioritize stability.
For today, Mr. Ricafort gave a forecast range of P50.05 to P50.25, while the trader expects the local unit to move within P50.05 to P50.30 per dollar. — LWTN
THE BENCHMARK INDEX inched up on Tuesday on bargain hunting and as more coronavirus disease 2019 (COVID-19) vaccines arrived in the country.
The bellwether Philippine Stock Exchange index (PSEi) improved by 23.3 points or 0.34% to close at 6,881.20 on Tuesday, while the broader all shares index inched down by 1.34 points or 0.03% to 4,264.99.
“The PSEi went up today from two-week lows and still among two-month highs amid the increased arrivals of new COVID-19 vaccines at the record pace in recent days so far,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message on Tuesday.
Vaccine czar Carlito G. Galvez, Jr. said in a televised briefing on Monday that around 22 million doses of COVID-19 vaccines will be arriving in the country by the end of the month and over 100 million COVID-19 jabs are expected to arrive by end-October.
These deliveries included vaccines manufactured by AstraZeneca Plc, Moderna, Inc., Pfizer, Inc. and BioNTech SE, as well as Sinovac Biotech Ltd. and jabs from the World Health Organization’s COVAX facility.
“Also, OCTA reported the negative growth rate in the transmission of COVID-19,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
On Monday, OCTA Research group’s Dr. Guido David said the virus growth rate swung to negative four percent, while the reproduction number in the country decreased to 1.12 from last week’s 1.27.
“Market went on bargain hunting today after it was downed for two trading days as PLDT, [Inc.] disclosed…the release of their license for their digital bank by BSP (Bangko Sentral ng Pilipinas),” Mr. Pangan added.
The BSP granted PayMaya, which is operated by PLDT’s Voyager Innovations, Inc., a digital banking license to operate Maya Bank.
Sectoral indices were split on Tuesday. Property gained 21.70 points or 0.72% to 3,018.64; services rose 11.44 points or 0.62% to finish at 1,851.25; and holding firms climbed 27.28 points or 0.39% to 6,957.04.
Meanwhile, industrials declined by 68.48 points or 0.68% to close at 10,002.08; mining and oil shed 61.67 points or 0.67% to 9,135.87; and financials lost 3.76 points or 0.26% to end at 1,418.45.
Value turnover inched down to P7.08 billion on Tuesday with 860.44 million shares switching hands, lower than the P7.23 billion with 2.29 billion issues traded on Monday.
Decliners beat advancers, 116 against 64, while 51 names closed unchanged.
Net foreign selling surged to P216.35 million on Tuesday, over eight times the P30.27 million seen on Monday.
“Immediate resistance remains at the psychological 7,000 mark, [while] immediate support [is] at 6,700-6,800 levels, which prevent further downward correction in the near future,” RCBC’s Mr. Ricafort said. — Keren Concepcion G. Valmonte
THE INSURANCE industry made payouts related to coronavirus disease 2019 (COVID-19) worth P4.35 billion in the first half, exceeding the total for 2020, according to a survey conducted by the Insurance Commission (IC).
Insurance Commissioner Dennis B. Funa said in a statement Tuesday that the payouts by life and nonlife insurers, health maintenance organizations (HMOs) and mutual benefit associations (MBAs) were 12% above the 2020 total of P3.9 billion.
Overall coronavirus payouts as of the end of June are now at P8.25 billion, dating back to the start of the pandemic last year.
Mr. Funa said the rise in COVID-19 related payouts coincided with surges in infection rates during the half.
“The figures provided show that the claims paid increased drastically from February to April and dipped slightly in June,” he said.
“This reflects the reported spike of COVID-19 cases in the Philippines between March and May which prompted the government to impose stricter quarantine measures during those months,” he added.
HMOs accounted for 47% of the overall COVID-19-related payouts, or P2.06 billion, in the first half, up 7.9% from the 2020 total. This brought total releases by HMOs to P3.89 billion as of June.
Life insurers paid out P1.98 billion or 46% of the industry’s total. The first-half payouts exceeded the 2020 total by 36%. The industry has released P3.44 billion since the pandemic began.
Mr. Funa said nonlife insurers released P119 million in COVID-19 related payouts in the first half, equivalent to 74% of the total released in the preceding full year.
MBAs released P191.7 million during the half, equivalent to 54% of the industry’s 2020 tally.
Some P1.67 billion or 38% consisted of death benefits in the first half, followed by P1.47 billion in in-patient benefits, and P876.6 million in out-patient payouts.
“Also worth mentioning is the fact that non-life insurance companies paid P37.60 million in Business Interruption claims due to the effects of business closures and the imposition of quarantine measures as a result of the COVID-19 pandemic,” he said.
The IC surveyed 117 out of 147 life and nonlife insurers, HMOs and MBAs to assess the impact of the COVID-19 pandemic on the industry.
“Despite the challenges and risks posed by the COVID-19 pandemic and the substantial increase in COVID-19-related claims, life and nonlife insurers, HMOs and MBAs remain financially resilient,” Mr. Funa said.
Gross premiums collected by life and non-life insurance firms and MBAs rose 27.82% from a year earlier to P99.89 billion in the first quarter. — Beatrice M. Laforga
THE Social Security System (SSS) has released P2.62 billion in unemployment insurance benefits to 196,000 workers during the pandemic so far, the Department of Finance (DoF) said.
Citing a report from the state pension fund, Finance Secretary Carlos G. Dominguez III said in a statement Tuesday that 90% of the total, or P2.35 billion, was released to 173,791 SSS members between March 2020 and June 2021 via the unemployment insurance benefit (UIB) program.
“Implemented effective March 2019, the UIB program is among the key institutional responses of the SSS to the COVID-19 pandemic for its affected members since March 2020,” Mr. Dominguez was quoted as saying in his letter to Senate President Vicente C. Sotto III.
The DoF sent the letter in response to a query by Senator Grace S. Poe Llamanzares regarding the available jobless insurance benefits.
Mr. Dominguez cited the implementing rules and regulations of Republic Act No. 11199 or the Social Security Act authorizing UIB payouts for the involuntarily laid off when their companies downsize or halt operations.
Laid off employees are also entitled to benefits during economic downturns, natural calamities, human-made disasters and other “just causes for ending the employment relationship.”
Employees who are less than 60 years old with 36 months of contributions to the pension fund are eligible for the UIB program, under which they can receive half of their average monthly salary for a maximum of two months.
Laid off workers can apply for the program every three years.
Jobless numbers fell to 3.073 million in July from 3.76 million in June, as less restrictive lockdown settings allowed businesses to reopen and hire more workers.
As a result, the unemployment rate fell to 6.9% compared with the 7.7% posted in June and the 10% rate from a year earlier.
The coronavirus pandemic and resulting lockdowns triggered massive layoffs as more companies reduced their operations or shut down completely.
The DoF said the SSS allows members to file UIB claims via the My.SSS member portal. The pension fund has started using electronic payment channels to speed up payouts. — Beatrice M. Laforga
THE P5.042-trillion 2022 budget remains largely focused on bringing about a recovery led by infrastructure and social spending after progressing to plenary debate Tuesday with no changes from the version passed at committee level, key legislators said.
“We shall remain focused on ensuring that the programs and projects for infrastructure development and human capital development will (be passed) by this Congress,” ACT-CIS Rep. Eric G. Yap, chairman of the House appropriations committee, said in his sponsorship speech.
According to the committee report on House Bill 10153, or the 2022 General Appropriations Bill, no amendments were made by the appropriations panel.
Plenary deliberations on the proposed 2022 budget will be run until Sept. 30 to discuss spending plans of various government agencies. The timetable includes the period of amendments, according to the schedule sent to reporters.
Mr. Yap told reporters that he will ask President Rodrigo R. Duterte to certify the budget as urgent to ensure its timely approval. Such a certification under House rules eliminates mandatory waiting periods between the various stages of approval.
He said on Aug. 21 that he expects the budget to be approved by the House by the end of the month, which is just before legislators suspend session for the filing of certificates of candidacy for the upcoming national elections.
“We are hopeful to pass the (General Appropriations Bill) before the adjournment and the possibility that the President will certify it as an urgent measure will help expedite its approval on third and final reading,” House Majority Leader and Leyte Rep. Ferdinand Martin G. Romualdez said.
Marikina Rep. Stella Luz A. Quimbo said during the plenary that she will propose amendments to the budget bill to ensure sufficient funding for pandemic-related items such as allowances for healthcare workers and medicine kits for home care patients.
Infrastructure spending is expected to be allocated about P1.18 trillion, with the government counting on public works to drive the recovery.
The 2022 budget, if passed, is 11.5% higher than this year’s P4.506-trillion spending plan. — Russell Louis C. Ku
THE PHILIPPINES must build an additional 20 gigawatts (GW) of renewable energy (RE) facilities within a decade to hit its target of 35% clean energy in the power generation mix, according to listed power firm AC Energy Corp.
In a briefing Tuesday, AC Energy President and Chief Executive Officer Eric T. Francia said the company projects that the Philippines can hit 35% RE at that level of new construction, a major step up from the 2019 level of 7.4 GW.
Mr. Francia said the target is achievable if the government increases its yearly renewable portfolio standards (RPS) increment to 2.52% from the current 1%. The RPS requires distribution utilities and retail electricity providers to source an agreed portion of their power supply from eligible RE facilities.
The new construction will require investment of over $20 billion, excluding those related to battery energy storage, he added.
“Assuming that we really get to that 20 GW of renewable build-out over the next decade (and consider that) 1 MW of renewables averages around 1 million dollars… the rough estimate here is we should be seeing well over $20 billion worth of investment on renewables alone — not including storage — and create over 50,000 jobs in direct employment,” he said.
He also believes that solar technology will likely be the main driver of renewables growth in the Philippines over the period since it is cost competitive compared to coal and gas and can produce power during peak demand.
In 2020, RE sources comprised 29% of the installed capacity mix, down from 34% in 2009, a year after the Renewable Energy Act was signed into law, according to the Department of Energy’s Electric Power Industry Management Bureau.
Mr. Francia said the government’s RE policies such as the revised RPS, RE certificate market, green energy option program and reserve market will support the 35% target, which the DoE previously called “aspirational.”
AC Energy, the listed energy platform of the Ayala group, hopes to be the largest listed renewables group in Southeast Asia, with a target of 5,000 MW in renewables capacity by 2025. The company, which also operates in Vietnam, Indonesia, India, and Australia, currently has attributable capacity of around 2,600 MW. — Angelica Y. Yang
THE Filipino-Chinese business chamber said one of the keys to recovery will be liquidity of sufficient volume to encourage a major boost in consumer spending.
Henry Lim Bon Liong, president of the Federation of Filipino Chinese Chambers of Commerce & Industry, Inc., called on banks and the National Government to help “unleash liquidity” to fuel consumption, which he called “the engine of economic recovery.”
Speaking at the virtual Kamuning Bakery forum Tuesday, he added: “We will vigorously restore confidence and revitalize our economy. It may take time to achieve our pre-pandemic growth targets, but we have to start now by spending.”
Banks can also extend support to small companies, along with larger firms that want to consolidate, he said.
Mr. Lim said that producers, in turn, should help keep basic goods affordable.
“We urge our fellow entrepreneurs to be socially responsible, resourceful, and to think of long-term stability, even if we have to make some sacrifices. Let’s help maintain affordable prices, sufficient inventories of basic goods, especially food and medical supplies.”
Household spending in the second quarter rose 7.2% year on year after declining 15% a year earlier. The unemployment rate was 6.9% in July, the equivalent of 3.073 million out of work.
Following the reimposition of strict lockdown settings last month, retailers called for more rapid vaccination against the coronavirus disease 2019 (COVID-19). They warned that their stores are seeing minimal foot traffic and that their cash reserves are depleted.
Meanwhile, Restaurant Owners of the Philippines President Eric Teng at the same event said the new alert level lockdown system has created some business stability.
“Having an alert system — like a typhoon system — allows us to have some predictability, so we can prepare our staff. We can prepare our restaurant; we can prepare our stocks,” he said.
“Sometimes, it’s the abrupt the decisions that hurt just as much as the quarantine.” — Jenina P. Ibañez
LEGISLATORS filed a resolution in the House seeking to increase the budget of the Department of Trade and Industry (DTI) for aid directed to micro, small, and medium enterprises (MSMEs).
With 2022 department budgets moving to plenary level, Valenzuela Rep. Weslie T. Gatchalian, Navotas Rep. John Reynald M. Tiangco, and Marikina Rep. Stella Luz A. Quimbo filed House Resolution seeking to increase DTI’s budget for next year by at least P1.623 billion to bolster MSME assistance programs.
“There is an immediate need to provide further assistance for the upskilling and reskilling of our MSMEs as we transition to digitization in these new times,” according to the resolution.
It noted estimates from the DTI that around 10% of MSMEs as of June have been forced to shut down permanently due to lack of sales or meager returns on investment.
Trade Secretary Ramon M. Lopez said at a House budget briefing on Sept. 10 that the DTI’s funds for next year for MSMEs are sufficient to support only 500,000 businesses.
He said that the 2022 budget for MSME loans is P1.5 billion while P1 billion has been allotted for livelihood kits. The department can also tap P2 billion to P3 billion in cash remaining from the Bayanihan II economic stimulus package intended for MSMEs.
The DTI’s proposed budget is P23.7 billion next year. This year’s budget is P21.43 billion. — Russell Louis C. Ku
RICE FARMERS said the government needs to provide assistance due to the farmgate price of palay, or unmilled rice, which has fallen below production costs.
Rosendo O. So, Samahang Industriya ng Agrikultura (SINAG) chairman, said the average farmgate price of palay as of Tuesday morning was P14 per kilogram (/kg) in Pangasinan, Batangas, and Isabela; P13/kg in Pampanga, Nueva Ecija, and Laguna; and P10/kg in Mindoro.
According to SINAG, the cost of production for palay during this cropping season is P15/kg.
“Siguradong babagsak pa ang presyo ng palay dahil magsisimula pa lamang ang bulto ng anihan in 1-2 weeks (prices are sure to fall further when much of the harvest comes in in 1-2 weeks),” Mr. So said in a statement.
Mr. So added that rice millers and traders are only willing to buy palay at P12 to P13/kg due to the “deluge of imported rice.”
“Even the millers are not motivated to buy palay. They are already at a loss because of the surge in rice imports,” Mr. So said.
Mr. So urged the Department of Agriculture (DA) to purchase the palay harvest at P16/kg for fresh palay and P19/kg for dry.
“Where are Agriculture Secretary William D. Dar and the economic managers? They claim that the tariff cuts will improve our domestic production and provide needed support to our farmers and producers,” Mr. So said.
President Rodrigo R. Duterte signed Executive Order No. 135 on May 15 which lowered the most-favored nation tariff rates on rice imports to “diversify the country’s market sources.”
Under the order, the tariff on rice imports was reduced to 35% from 40% for volumes within the quota. Shipments exceeding the quota are to be charged 50%.
In a virtual briefing Tuesday, Agriculture Undersecretary Ariel T. Cayanan said the national average farmgate price of fresh palay and dry palay as of the second week of September were at P14.89/kg and P18.10/kg, respectively. He was citing data from the Philippine Rice Information System.
Mr. Cayanan confirmed that there are some areas with a farmgate price of P10/kg, but added that in those cases the palay harvest was either damaged or exceeded the prescribed moisture content.
The DA is urging local government units (LGUs) in the top rice-producing provinces to purchase palay straight from the farmers to increase farmgate prices during the cropping season.
LGUs will help supplement purchases made by the National Food Authority, which has a palay procurement fund of “P7 billion yearly, enough to buy 300,000 metric tons (MT) at a maximum price of P19/kg,” Agriculture Secretary William D. Dar said in a separate statement.
DA Region II Director Narciso A. Edillo said the farmgate price of fresh palay ranges from P13 to P15/kg in his jurisdiction, while dry palay sells for P17 to P19/kg.
For 2021, the DA is targeting production of more than 20 million MT of rice, against 19.4 million MT in 2020. — Revin Mikhael D. Ochave
THE GOVERNMENT will evaluate the health of Chinese contractors participating in the infrastructure program in the wake of the debt crisis engulfing property developer China Evergrande Group, Finance Secretary Carlos G. Dominguez III said.
“We are currently checking if any of the Chinese contractors involved in our ‘Build, Build, Build’ program will be negatively affected by the reported problems of Evergrande,” Mr. Dominguez told reporters Tuesday.
Evergrande is currently dealing with a debt load of $305 billion in debt and needs to make a payment of $83.5 million in interest for its March 2022 bond by Thursday. It also needs to make a $47.5 million payment by Sept. 29 on its March 2024 notes, according to Reuters.
Default fears are threatening to spread to the broader Chinese economy as well as international markets.
In a note Tuesday, research house Oxford Economics said it is not expecting the Chinese government to arrange a bail out for the company, though it will likely pursue a “managed restructuring of the firm’s debt to prevent disorderly debt recovery efforts, reduce systemic risk, and contain economic disruption.”
“If a restructuring plan along these lines works, we expect the implications for the overall economic and policy outlook to remain contained. However, financial conditions for the broader property sector will remain tense for some time, with some spill-over into wider financial sector stress,” it said.
Oxford Economics said a bigger financial and economic fall arising from the restructuring measures may, however, force China to ease on its stringent policies in the property sector and even for the broader macroeconomic policy to prevent the economy from experiencing a severe downturn. — Beatrice M. Laforga
