INFLATION IN JUNE likely breached the Philippine central bank’s target for the sixth straight month, though slower due to improving food supply and falling transport prices, analysts said. Read the full story.
Here’s a quick glance at how PSEi stocks fared on Friday, July 2, 2021.
THE PESO is likely to rebound versus the greenback this week on expectations of slower inflation in June.
The local unit closed at P49.20 per dollar on Friday, weakening by nine centavos from its Thursday finish of P49.11, based on data from the Bankers Association of the Philippines. This was the peso’s weakest close in nearly a year or since it ended at P49.25 per dollar on July 27, 2020. It also shed 71.9 centavos from its P48.481-per-dollar finish on June 25.
The peso depreciated on Friday as investors flocked to the greenback on the back of an expected rebound in the US job market in June, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a text message.
Data from the US Labor department released on Friday showed nonfarm payrolls increased by 850,000 jobs in June, higher than the 700,000 estimated additional jobs in a Reuters poll. The increase also surpassed the 583,000 new jobs in May.
The report also showed that women, who were the hardest hit by the pandemic, took nearly half of the 9.3 million job openings last month. Reuters reported.
The peso’s weakness last week was also caused by market concerns on the increasing possibility of an earlier unwinding of easy monetary policy in the US amid improving economic data, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.
Federal Reserve Bank of San Francisco President Mary Daly said the US central bank may be able to start reducing “a little bit” of its extraordinary support for the US economy by the end of this year, Reuters reported.
“The economy is really shaping up nicely,” Ms. Daly told the Associated Press in an interview, a recording of which was provided to Reuters by the San Francisco Fed.
Fed policy makers have been surprised at the strength of the US recovery this year, fueled by $2.8 trillion in federal pandemic aid and a faster-than-expected rollout of vaccines against COVID-19.
That has touched off an internal debate over when and how to start reducing their purchases of Treasuries and mortgage-backed securities, which they had promised to continue doing at a pace of $120 billion a month until the economy makes “substantial further progress” towards the Fed’s employment and inflation goals.
For this week, Mr. Asuncion said the market is waiting for June inflation data, which will be released by the Philippine Statistics Authority (PSA) on Tuesday, July 6.
A BusinessWorld poll of 14 analysts yielded a median estimate of 4.3% for June inflation, matching the midpoint of the 3.9% to 4.7% estimate given by the Bangko Sentral ng Pilipinas (BSP) for the month.
If realized, this will mark the sixth straight month of inflation exceeding the BSP’s 2-4% target for the year and will be faster than June 2020’s 2.5% print. Still, this would be slower than the 4.5% in May.
Analysts said the better supply conditions that likely brought down food prices and easing transport prices will be key factors for slower inflation in June. On the other hand, the sustained increase in global oil prices continues to be an upside risk.
May trade data to be reported on Friday could also affect the peso, RCBC’s Mr. Ricafort said.
The trade deficit stood at $2.73 billion in April, slightly narrower than the $2.75-billion shortfall in March but bigger than the $187.10-billion gap a year earlier, latest PSA data showed.
Exports that month climbed 72.1% to $5.71 billion from a year earlier, while imports surged 140.9% to $8.45 billion.
For this week, Mr. Ricafort gave a forecast range of P48.90 to P49.40 per dollar, while UnionBank’s Mr. Asuncion expects a stronger band of P48.85 to P49.25. — L.W.T. Noble with Reuters
PHILIPPINE shares are expected to trade sideways this week on continued market optimism ahead of the release of June inflation data and as investors monitor the country’s coronavirus disease 2019 (COVID-19) situation.
The Philippine Stock Exchange index (PSEi) rose by 38.25 points or 0.54% to close at 7,002.26 on Friday, while the broader all shares index went up by 19.54 points or 0.45% to finish at 4,294.97.
Week on week, the benchmark index gained 51.75 points from its 6,950.51 close on June 25.
“The market continued higher after more positive economic data was released. Investors gained more confidence on clearer signs of the economy’s recovery despite elevated COVID-19 cases and the extension of current restrictions,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Saturday.
“The PSEi ended the week just a few points above the 7,000 psychological level after a couple of weeks of momentum building,” he added.
Preliminary results of the Philippine Statistics Authority’s (PSA) Labor Force Survey showed a lower unemployment rate of 7.7% in May from 8.7% in April.
Meanwhile, IHS Markit reported that manufacturing activity improved in June. The Philippine Manufacturing Purchasing Managers’ Index (PMI) went up to 50.8 in June from 49.9 in May due to less stringent quarantine restrictions.
Analysts said market optimism following these positive economic data may continue this week.
“Adding to this is the rise in consumer sentiment according to the Bangko Sentral ng Pilipinas’ (BSP) [second quarter] 2021 survey. The economic recovery hopes, however, could be tempered by the decline in business confidence also according to the BSP’s survey,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Saturday.
“Investors are also expected to watch out for the upcoming June inflation data to see if the price pressures weighing on the local economy have eased,” Mr. Tantiangco added. “Finally, investors are expected to remain cautious while waiting for the latest financial reports following the end of the second quarter. We may see sideways movement for the local market with an upward bias [this] week.”
The PSA is scheduled to release June inflation data on July 6.
Mr. Tantiangco expects the index to trade between 6,932.13 to 7,300.
“Risk seen for the market [this] week is the Delta variant of COVID-19. Detection of more cases in our country with the said strain may tilt the market’s bias to the downside,” he said.
Meanwhile, AAA Southeast Equities’ Mr. Mangun placed the PSEi’s support at 6,900 and resistance between 7,200 and 7,260.
“Optimism has outpaced cautiousness as vaccination progress outweighs the concerns of elevated COVID-19 cases,” Mr. Mangun said. — Keren Concepcion G. Valmonte
QUARANTINE and travel protocols for fully-vaccinated individuals have been eased, based on a new resolution approved by the task force handling the country’s coronavirus pandemic response.
In a resolution approved on July 2, the task force shortened the quarantine period for fully vaccinated individuals who are exposed to probable and confirmed coronavirus cases, Presidential Spokesperson Herminio L. Roque, Jr. said in a statement on Sunday.
“Fully vaccinated individuals who are close contacts of probable and confirmed COVID-19 (coronavirus disease 2019) cases may undergo a shortened seven-day quarantine period only if they remain asymptomatic for the duration of the seven-day period,” he said.
Mr. Roque said intrazonal travel for fully vaccinated individuals is subject to the presentation of a coronavirus vaccination card issued by a legitimate establishment, or a certificate of quarantine completion showing the holder’s vaccination status as may be issued by the Bureau of Quarantine.
Travelers within the country are still required to undergo health and exposure screening upon arrival in the local government of destination, he said.
SENIOR CITIZENS
Mr. Roque said intrazonal movement of fully vaccinated senior citizens within areas under a general community quarantine and a modified lockdown “shall continue to be allowed.”
A fully vaccinated individual is someone who has “more than or equal to two weeks after having received the second dose (of) a two-dose vaccine, or more than or equal to 2 weeks after having received a single-dose vaccine,” the Palace official said.
A fully vaccinated individual must be administered with vaccines that are included in the Emergency Use Authorization List or Compassionate Special Permit issued by the Philippine Food and Drug Administration or Emergency Use Listing of the World Health Organization, he said.
Latest available data from the task force, citing records from the Department of Health (DoH), show more than 10 million coronavirus vaccine doses have been administered as of June 27.
Of the total, 7.5 million were first shots.
Fully vaccinated individuals consist of more than 1.1 million health workers, 672,602 seniors, 710,846 seriously ill people, and 12,340 essential workers.
The Philippines aims to inoculate at least 500,000 people daily in the capital region Metro Manila, the neighboring provinces of Rizal, Bulacan, Cavite, and Laguna, and the urban areas of Metro Cebu and Metro Davao to achieve herd immunity by Nov. 27.
COVID-19 CASES
The DoH reported 5,966 coronavirus infections on Sunday, bringing the total to 1,436,369.
The death toll rose to 25,149 after 86 more patients died, while recoveries increased by 6,987 to 1,358, 512, it said in a bulletin.
There were 52,708 active cases, 91.1% of which were mild, 3.8% did not show symptoms, 1.4% were critical, 2.1% were severe and 1.54% were moderate.
The agency said 16 duplicates had been removed from the tally, nine of which were tagged as recoveries.
On the other hand, 130 recoveries were reclassified as active cases, while 27 cases tagged as recoveries were reclassified as deaths.
DoH said all laboratories were operational on July 2, while one laboratory failed to submit data.
Meanwhile, a senator is pushing for the inclusion of private groups in the Inter-Agency Task Force for the Management of Emerging Infectious Diseases.
Senator Francis N. Tolentino, in a statement on Sunday, said at least two groups should be represented in the policy-making body.
The Union of Local Authorities in the Philippines and the Philippine Chamber of Commerce and Industry (PCCI) must be included in the task force “to have a much synchronized approach in dealing with various policies” related to the country’s pandemic response and “to pave the way for a swift economic recovery,” he said. —Kyle Aristophere T. Atienza
By Kyle Aristophere T. Atienza, Reporter
SENATOR Emmanuel “Manny” D. Pacquiao would have a fighting chance at next year’s elections if his corruption allegations against the administration of President Rodrigo R. Duterte are proven true, according to analysts.
Mr. Pacquiao, acting president of the ruling party, has recently criticized the President’s stance on the country’s sea dispute with China and last week said state corruption is rampant.
The professional boxer-senator is believed to be eyeing the presidency in the 2022 polls.
“If his allegations are proven true, these will weaken the chances of the admin bets. No one will vote for candidates endorsed by a corrupt administration,” campaign strategist Gerardo Eusebio said in a Viber message. “But it would also have to have meat and substance.”
Over the weekend, before leaving for a boxing match in the United States, Mr. Pacquiao held an online press conference where he presented piles of documents that supposedly contain proof of his allegations.
The documents will be turned over to the Senate Blue Ribbon Committee for a possible investigation, he said.
“Without details backed by documents or at least sworn statements executed by his witnesses, if any, there may not be sufficient basis for the Senate to conduct a hearing although the Blue Ribbon Committee is allowed to conduct investigation in aid of legislation even without referral,” Senator Panfilo M. Lacson said in a statement.
He said it is Mr. Pacquiao’s responsibility “to show some specifics in support of his allegations, which by its nature are serious, not to mention sensitive.”
The police and the Department of Social Welfare and Development, among the two agencies he named to be involved in anomalous contracts, issued separate statements on Sunday denying the accusations and welcomed any investigation.
“If Pacquiao will have the goods, the opposition will gravitate to him and increase his political capital. If these will hold water, expect a drop in the President’s rating, especially the C sector,” Mr. Eusebio said.
“The masses will definitely pay attention once the issues raised affect their basic needs particularly food and income,” said media research expert Jay Bautista.
He cited “historical examples” in allegations against past Presidents Joseph E. Estrada, Gloria M. Arroyo, and the late Benigno S.C. Aquino, “which all resulted in lower trust ratings.”
DIRECT LINK
If Mr. Pacquiao fails to directly link Mr. Duterte to corruption allegations, the President’s popularity might not be severely affected, said Cleve Kevin Robert V. Arguelles, a political science lecturer at De La Salle University.
“If Pacquiao will succeed in exposing corruption scandals and the administration would not be able to properly respond to his allegations, then it would really hurt the chances of the anointed successor of President Duterte,” he said.
Mr. Arguelles, however, noted that the senator does not appear to be ready to fully cut ties with Mr. Duterte.
“But the curious case here is that, if we look at what Sen. Pacquiao is doing and what he has been saying so far, I think he’s still not ready to really burn the bridge with President Duterte,” he said in a Facebook Messenger call.
“He is still saying that this is supportive of the President, that corruption may have something to do with the administration but he is not directly opposing the President.”
“We still see some hesitations on the part of Sen. Pacquiao whether he would blame the President for the corruption allegations,” Mr. Arguelles said, noting that it is “too early” to consider Mr. Pacquiao as the new face of the opposition.
Jean Encinas-Franco, a political science professor from the University of the Philippines, said administration bets would not be affected much for as long as the allegations are not directly attributed to Mr. Duterte.
“Manny (Pacquiao) is still ambivalent towards the President so the presscon yesterday will not affect the admin nor Duterte,” she said in a Viber message.
Mr. Duterte earlier said he would campaign against Mr. Pacquiao if the senator fails to identify corrupt government officials.
THE PHILIPPINE Coast Guard (PCG) reported on Sunday that it drove off last week seven foreign-flagged fishing vessels from waters around the Marie Louise Bank, a part of the Philippine exclusive economic zone in the South China Sea.
In a statement with accompanying video footages posted on its social media pages, the PCG said its BRP Cabra vessel “successfully dispersed” five Chinese and two Vietnamese ships on June 30.
The Marie Louise Bank is located 147 nautical miles off El Nido, Palawan and is part of the Spratly Islands.
The video clips showed Coast Guard officers on board the BRP Cabra sending radio challenge to the foreign vessels. A radio challenge involves an assertion of the Philippine territory and demand for details of the vessel in question.
The ending video clip also showed a PCG team checking on a Philippine vessel with 34 Filipino fishermen from San Jose, Occidental Mindoro.
“The Filipino fishermen said they were able to conduct normal fishing operations in the past two weeks without any untoward incidents at sea,” the PCG said. — MSJ
TWO WEATHER disturbances — a tropical depression and a low pressure area (LPA) — will bring scattered rains and thunderstorms across most parts of the country until Tuesday, weather agency PAGASA reported Sunday.
Tropical depression Emong, which was a low pressure area until around 8:00 a.m. Sunday, strengthened as it moved northwest towards the extreme northern part of Luzon.
Typhoon wind signal no. 1 was raised over Batanes and the northeastern part of Cagayan, including Babuyan Islands.
As of 11 a.m. Sunday, Emong was located 700 kilometers (kms) northeast of Guiuan, Eastern Samar in central Philippines.
It was packing maximum sustained winds of 45 kms per hour near the center and gustiness of up to 55 kms per hour.
“Emong is likely to remain as a tropical depression throughout the forecast period,” the Philippine Atmospheric, Geophysical and Astronomical Services (PAGASA) said in its first advisory on the storm.
The other LPA, meanwhile, was located 120 kilometers east of Calapan, Oriental Mindoro as of 4 a.m. Monday and “is less likely to develop into a tropical depression within 24 hours,” according to PAGASA.
However, this LPA coupled with the southwest monsoon will bring light to moderate or at times heavy rains over Bulacan, Pampanga, Nueva Ecija, Zambales, Bataan, Metro Manila, Rizal, northern Quezon including Polillo Islands, Laguna, Cavite, Batangas, Palawan including Calamian Islands, Mindoro Provinces, and Antique.
PAGASA warned that “isolated flash floods and rain-induced landslides are possible during heavy or prolonged rainfall” in these areas.
If it strengthens into a tropical depression, it will be named Fabian.
A MILITARY plane crashed and broke up in flames in the southern Philippines on Sunday with 92 people aboard, and the army chief said at least 40 people had been rescued.
The C-130 aircraft of the Philippine Air Force had a mishap on landing on the island of Sulu, the air force said in a statement. “Rescue efforts are ongoing,” it said.
Pictures from the scene showed flames and smoke pouring from wreckage of the aircraft among trees.
Defense Minister Delfin N. Lorenzana told Reuters the plane had been carrying 92 people, including three pilots and five other crew members, according to his initial reports.
Armed forces chief Cirilito E. Sobejana told reporters that at least 40 people had been rescued from the crashed plane and were now being treated. — Reuters
THOUSANDS REMAIN in evacuation centers as Taal Volcano continues to show increased activity.
The Philippine Institute of Volcanology and Seismology (Phivolcs) reported 31 “low frequency volcanic earthquakes and low-level background tremor” during the 24-hour period from Saturday to Sunday morning.
Alert level 3 in a 5-level system remains in effect, which means there is magma extruding from Taal Volcano’s main crater that “could drive explosive eruption,” according to Phivolcs.
The agency also said Taal’s main crater emitted high levels of volcanic sulfur dioxide that rose up to 2,500 meters.
A total of 3,141 people or around 788 families from the “high-risk” towns of Agoncillo, Laurel, San Nicolas, and Lemery in Batangas province were evacuated since Saturday, according to the national disaster management agency.
Police and Philippine Coast Guard teams have been assisting in the evacuation as well as in ensuring the observance of health protocols in the temporary shelters.
The Department of National Defense said on Saturday that the Department of Social Welfare and Development sent 5,000 family food packs to the Batangas Sports Complex Grand Stand, 2,000 to Laurel, and 1,500 to Agoncillo.
“The Batangas provincial government has remained self-sufficient in sending help and does not yet need immediate additional aid from the national government,” Office of Civil Defense Calabarzon Regional Director Maria Theresa R. Escolano is quoted in a statement from the Batangas Information Office. — Bianca Angelica D. Añago
THE SUPREME Court (SC) upheld the 2010 ruling of the Commission on Audit (COA) that disallowed the awarding of P1.19 million in cash gifts by the Philippine Health Insurance Corp. (PhilHealth) in Iloilo City to its employees on its 15th anniversary.
In its decision dated Feb. 2 and published on June 30, the court dismissed PhilHealth’s 2014 petition to dismiss the COA decision for lack of merit.
The High Court said that the gift amounting to P10,000 per employee exceeded the P3,000 ceiling under Administrative Order 263 and National Budget Circular 452.
The court also assailed PhilHealth’s claim that it enjoys fiscal autonomy based on its original charter, saying that such autonomy is not absolute and must conform with prevailing rules and regulations issued by the president of the Philippines and/or the Department of Budget and Management.
The SC further ordered the approving officials and payees to refund the disallowed amount. — Bianca Angelica D. Añago
SMC GLOBAL Power Holdings Corp. will no longer be pursuing three planned coal-fired projects with a total capacity of 1,500 megawatts (MW), the Department of Energy (DoE) said in a letter released by non-government organizations.
The July 1 letter was sent to an environmental think tank, the Center for Energy, Ecology and Development (CEED), in which it identified the proposed projects as SMC Global Power’s circulating fluidized bed coal-fired plants in Pagbilao and Sariaya, Quezon with capacity of 600 MW each; and the company’s 300-MW Looc Malabuyoc coal-fired power plant in Cebu. It described these projects as “discontinued.”
CEED had sought information on seven coal plants which were removed from the department’s list of proposed coal plants in October.
The letter was released by the Power for People Coalition (P4P) over the weekend. It was signed by Mario C. Marasigan, the director of the department’s Electric Power Industry Management Bureau.
In October, the DoE announced that it was enforcing a moratorium on greenfield coal plants to facilitate a shift to a more flexible power generation mix.
BusinessWorld asked SMC Global Power to comment but it had not replied at deadline time.
In its reply to CEED, the DoE also gave updates on coal plants which it has delisted in October. These were identified as the 300-MW SMC Malita power plant project phase II expansion in Malita, Davao Oriental; the 600-MW Merbau coal-fired thermal power plant in Pinamukan Ibaba, Batangas City; and the 300-MW Ozamiz coal-fired power plant in Ozamiz City, Misamis Occidental.
“The DoE has delisted these… projects due to non-submission of the required monthly power project updates,” it explained.
Meanwhile, Orion Pacific Prime Energy, Inc.’s 1,200-MW Quezon coal-fired thermal plant project in Tagkawayan, Quezon is still undergoing review, with the authorities considering whether it should be exempted from the coal moratorium.
The DoE also gave an update on Meralco PowerGen Corp.’s 1,336-MW coal-fired power project in Atimonan, Quezon, saying that the company is in talks with lenders to extend the loan facility “due to challenges encountered in securing power supply agreements.”
‘COAL PIPELINE NEARING ITS END’
In a statement over the weekend, P4P said that the discontinuation of the proposed coal projects in Quezon and Cebu marked the “nearing end of the shrinking coal pipeline.”
“We welcome the good news from DoE officially confirming that the plan to construct new coal plants in Sariaya and Pagbilao is discontinued. We hope this will lead to the cancellation of other ongoing dirty energy projects in the province of Quezon, especially in Atimonan,” Monsignor Noel Villareal, one of the leaders who campaigned against coal plants in Quezon, was quoted as saying.
P4P said both Quezon and Cebu have had a long history with coal.
“As more coal projects get out of the way, we need not and should not make our abundant renewable energy potential wait to be tapped any longer,” Gerry C. Arances, P4P convenor, said.
Meanwhile, National Coordinator of the Philippine Movement for Climate Justice Ian Rivera said: “This huge cancellation of coal also signals that Philippine energy is now at a crossroads. This is a challenge to the government to review the Philippine Energy Plan towards an immediate shift to renewable energy and prevention of another supply instability by 2024.” — Angelica Y. Yang
