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Banks told to tailor relief measures to their capacity

BANGKO SENTRAL NG PILIPINAS GOVERNOR BENJAMIN E. DIOKNO — PHILIPPINE STAR/ GEREMY PINTOLO

LENDERS should tweak their relief measures for clients as some of those extended by the regulator amid the crisis have lapsed, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

“We encourage banks to grant financial relief that considers the payment capacity of their borrowers and their risk-bearing capacity. This approach recognizes that banks are not similarly [affected] and differ in terms of target market, risk profile, and financial conditions,” Mr. Diokno said at the virtual convention of the Chamber of Thrift Banks (CTB) on Tuesday.

The central bank chief noted that the BSP’s recognition of allowances for loan losses on a staggered basis for all types of credit for retail and business borrowers affected by the pandemic, one of these relief measures, ended on March 8.

Mr. Diokno said they believe their supervised financial institutions have been given enough time to assess their loan portfolio.

“The BSP is constrained from extending regulatory relief measures provided as it will affect the viability of banks, which will in turn limit their capacity to continue lending,” he said.

Other relief measures extended by the BSP will lapse by the end of this year including the reduction of the credit risk weight of loans to micro-, small-, and medium-sized enteprises (MSMEs) to 50% and the lower minimum liquidity ratio (MLR) of 16% (from 20%) for thrift banks, Mr. Diokno said.

“As of end-May, the average of MLR of standalone thrift banks stood at 36.4%. So the BSP will continue to monitor compliance with MLR to check if there is a need to adjust or calibrate the requirement,” he said.

The BSP has also allowed banks to count their lending to MSMEs as alternate compliance to reserve requirement. Mr. Diokno said the measure is expected to help thrift banks expand their lending activities and support the recovery of local communities.

Last year, the BSP has also reduced the reserve requirement ratio (RRR) for thrift banks to 3% from 2% to provide a liquidity boost amid the pandemic.

“[A decision to further tweak lender’] RRR will be based on the assessment of domestic liquidity, with the end-view of supporting banks’ credit activity. It will also consider impact on financial stability and trend of inflation,” Mr. Diokno said.

The central bank chief noted that the country’s thrift banking industry has remained stable amid the prolonged crisis.

BSP data showed thrift banks’ cumulative net income rose 15.3% year on year to P6.6 billion in the first half of 2021. The industry’s capital adequacy ratio of the industry stood at 18.8% as of end-June, higher than the regulatory minimum. — L.W.T. Noble

Philippine trade year-on-year performance (Aug. 2021)

THE COUNTRY’S exports and imports of goods continued to post double-digit growth in August amid a recovery in global markets, the Philippine Statistics Authority (PSA) reported on Tuesday. Read the full story.

Philippine trade year-on-year performance (Aug. 2021)

How PSEi member stocks performed — October 12, 2021

Here’s a quick glance at how PSEi stocks fared on Tuesday, October 12, 2021.

Fare hike, cash aid for transport readied amid rising fuel prices

PHILSTAR

GOVERNMENT AGENCIES are considering implementing a fare hike and providing cash assistance to the transport industry to offset the impact of higher oil price.

The Energy department’s Oil Industry Management Bureau (OIMB) Director Rino E. Abad said the department has met with the Land Transportation Franchising and Regulatory Board (LTFRB) to discuss a possible fare hike.

“Hinihintay nalang po natin sa kanila ay ‘yung kanilang eventual decision on how much or if there is a fare hike (We are waiting on the LTFRB’s eventual decision on whether there will be a fare hike and how much it will be),” Mr. Abad said during a Laging Handa briefing Tuesday.

The possible fare hike for public transportation will likely not be higher than P1.26 on the base fare, according to LTFRB estimates provided by Technical Division Head Joel de Jesus Bolano during the briefing.

“Kung walang fare hike or (kung) insufficient ang magiging fare hike, then kailangan suportahan natin with cash assistance (If there is no fare hike or if it is insufficient, then cash assistance is needed),” the OIMB’s Mr. Abad said.

Once finalized, the Department of Energy and LTFRB will bring the proposed fare hike and cash subsidy to the Finance and Budget departments, which will determine whether there are available funds.

“’Pag nagkaroon po iyan ng available fund, idederetso na po natin sa Kongreso para magawan ito ng batas (If funding is available, we will go straight to Congress to put it into a law),” Mr. Abad said during the briefing.

He cited a “fundamental insufficiency of crude oil supply in the international market” which led oil prices to rise.

“Meron po tayong projection from [S&P Global] Platts na ang kulang po ngayon ay umaabot po ng two to three million barrels of crude oil per day so iyan po ang sitwasyon kaya po ang ating price ay agarang nag-react ay ang reaction po niya ay pataas (The shortage is projected at 2-3 million barrels of crude per day by Platts, which is why prices are rising),” he said.

Domestic oil firms increased gasoline prices by P1.30 per liter (/L) this week. Meanwhile, diesel and kerosene prices were raised P1.50/L and P1.45/L, respectively.

Retail fuel prices have been increasing for seven consecutive weeks.

The Organization of the Petroleum Exporting Countries in a recent meeting with Russia agreed to stick to a plan to gradually increase oil output despite rising demand. — Angelica Y. Yang

Firms offering promos to the vaccinated told to obtain consent on data 

THE National Privacy Commission said companies must obtain the consent of vaccinated persons before gathering personal data specified in their vaccination cards for raffles, promotions, or discounts.  

Privacy Commissioner Raymund E. Liboro said in a statement Tuesday that the vaccinated persons should “explicitly agree” to the collection and processing of their vaccine cards.

Mr. Liboro said consent will be valid if freely given, specific, informed, and an indication of will.

The commission recently issued a bulletin following reports on the collection of copies of COVID-19 vaccination cards by certain companies as a reward to vaccinated individuals. The cards contain information such as the person’s age, birthdate, and health information.

“While we laud these gestures as part of the ongoing initiative to encourage all eligible individuals to be vaccinated against COVID-19, we must also remind all personal information controllers (PICs) of the need to establish a lawful basis in the conduct of their respective personal data processing activities,” Mr. Liboro said.

“Consent must also be evidenced by written, electronic, or recorded means,” he added.

Mr. Liboro said a privacy notice must be provided to inform the vaccinated persons of the processing of their personal data and their rights as data subjects.

He also reminded PICs that the use of the vaccine card should only be for its intended purpose, which is to facilitate the distribution of rewards.

“It shall not be used for further processing, such as profiling, automated decision making, or for other purposes incompatible with the declared and specified purpose,” Mr. Liboro said.  

The commission added that the health information of individuals should be secured, while PICs should implement measures to protect the copies of vaccine cards and should be held responsible for their custody if they are processed.  

It added that the PICs must never post the vaccine cards on public platforms.  

“Copies of the vaccine cards must be retained only for as long as necessary for the fulfillment of the purpose. These must be disposed of in a secure manner — hard copies must be shredded properly while soft copies must be deleted or overwritten in a manner that ensures that the stored copy of the vaccine cards are permanently and irreversibly destroyed and beyond recovery,” the commission said. — Revin Mikhael D. Ochave 

SB Corp. zero-interest loan program to help small companies with 13th month payroll 

THE Small Business Corp. (SB Corp.) will develop a loan program to help micro, small, and medium enterprises (MSMEs) afford the payment of 13th month salaries, its parent department, the Department of Trade and Industry (DTI), said.

Trade Secretary Ramon M. Lopez said in a statement Tuesday that SB Corp. will offer zero-interest loans to companies in need of funding for 13th month pay.

Mr. Lopez said the DTI is also in talks with the Department of Labor and Employment on plans to offer such loans.

“We see no reason to defer the 13th month pay for this year as the government stands ready to support businesses,” Mr. Lopez said.

“The real sustainable solution is the reopening of the economy, which the government has started to implement by allowing more sectors to safely operate at increased capacities,” he added.

Asked for further details, Mr. Lopez told reporters via Viber that SB Corp. is still working out the specifics of the lending facility.

Mr. Lopez said around P200 million was initially set aside for the loan facility, while available loans will range from P50,000 to P200,000, with priority given to micro and small enterprises.

In 2020, SB Corp. supported the COVID-19 Assistance to Restart Enterprises program to assist MSMEs in paying out 13th month salaries. The funding for the program was sourced from an P8-billion allocation under Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II).

Mr. Lopez called for the continued reopening of more business activity even in areas under Alert Levels 3 and 4.

“The idea here is that we allow more business continuity and simply adjust operating capacities at different Alert Levels to safely increase mobility,” Mr. Lopez said.

“This is more possible now due to higher vaccination rates, especially in the National Capital Region (NCR), which now has about a 80% vaccination rate and, thus, can allow safely the vaccinated customers in closed, crowded, and close-contact establishments at high alert levels,” he added. — Revin Mikhael D. Ochave 

Cable trip caused W. Visayas power price hike

THE Philippine Rural Electric Cooperatives Association, Inc. (Philreca) said Tuesday that the tripping of a transmission cable in the Visayas drove up electricity rates in Panay and Negros.

“There has been a series of spikes in electricity rates in the Panay and Negros areas, not just those that are serviced by electric cooperatives (ECs) but even those areas under a private distribution utility,” Philreca said in a statement.

“All areas experienced rate hikes because the root cause of this problem is not from the distribution sector, but because there was an unfortunate incident in the transmission sector — the Cebu-Negros 138 kV (kiloVolt) Line 1 tripped on June 15,” it added.

The National Grid Corp. of the Philippines has blamed damage to the 138-kV submarine cable on dredging works conducted by Department of Public Works and Highways in Negros Oriental.

Philreca said the line damage halted the transmission of power supply from Cebu to nine ECs in Negros and Panay, and caused “imbalances” in the requirements of power providers in Region 6.

During this period, ECs spent more to procure power from the wholesale electricity spot market (WESM) as generators on Luzon went on preventive maintenance, according to the group.

It also noted that ECs incurred high line rental charges due to congestion issues arising from the cable outage.

The increases in generation and transmission charges were reflected in the electric bills of consumers from 10 ECs.

“What contributed to the spikes in electricity rates are all beyond the control of ECs; they are all pass-through charges that ECs are obligated to collect from consumers then remit to appropriate parties,” Philreca said.

The Energy Regulatory Commission (ERC) has ordered the Philippine Electricity Market Corp. (PEMC), the governance body of the WESM, to halt the collection of congestion fees and other related charges from customers until the damaged cable is fixed.

The regulator also directed PEMC to refund the charges which have been billed.

Last month, the PEMC said it is working out the details of the refund with the Independent Electricity Market Operator of the Philippines (IEMOP).

On Tuesday, Philreca asked the House Committee on Energy to compel generation companies and the IEMOP through the PEMC to implement the ERC order. — Angelica Y. Yang

Well-milled rice prices rise in five regional centers

THE AVERAGE retail price of well-milled rice increased in five trading centers around mid-September, the Philippine Statistics Authority (PSA) said.

The PSA said in a report that the Sept. 15-17 period, which it calls the second phase of September, saw higher prices compared with the first phase of September, which ran from Sept. 1 to 5.

In the second phase, the average retail price of well-milled rice rose in Calapan City of 50 centavos to P43.77 per kilogram (/kg). In Butuan City, prices rose 36 centavos to P42.60, in Kidapawan City 23 centavos to P39.99, in the National Capital Region (NCR) 10 centavos to P43.10, and in Iloilo City eight centavos to P38.65.

Prices fell in Legazpi City by P1.86 to P38.56 and in Tacloban City by 33 centavos to P42.60.

The PSA said the average retail price of bone-in pork during the period fell in six trading centers.

NCR prices fell P21.55 to P288.34.kg. In Cebu City they fell by P10.83 to P19, in Cabanatuan City by P10 to P320, in Tacloban City by P9.42 to P237.77, in Iloilo City by P5 to P240, and in Legazpi City by P2.25 to P340.36.

Price rose in San Fernando City by P65 to P295 and in Butuan City by P10.24 to P245.

The average retail price for a kilogram of round scad (galunggong) during the period rose in five trading centers.

In Baguio City prices rose P34 to P204/kg. In San Fernando City they rose by P10 to P190, in Butuan City by P9.35 to P168.26, in Digos City by P5 to P115, and in the NCR by 67 centavos to P232.34.  

Iloilo City prices fell P4.16 to P157.92.

The average retail price of red onion for the period rose in four trading centers: Cabanatuan City by P15 to P135/kg, in Legazpi City by P5.58 to P156.28, in the NCR at P3.70 to P115.48, and in Butuan City by P3.50 to P145.

Prices fell in Cagayan de Oro City by P12.50 to P120, in Tuguegarao City by P5 to P100, and in Tacloban City by 81 centavos to P125.29. — Revin Mikhael D. Ochave

Rice inventory down by 26.9% as of Sept. 1

PHILIPPINE STAR/ MICHAEL VARCAS

THE rice inventory as of Sept. 1 fell 26.9% year on year to 1.33 million metric tons (MT), according to the Philippine Statistics Authority (PSA).

The PSA said in its rice and corn stock report that the rice inventory as of Sept. 1 fell 15.6% from the level reported on Aug. 1.

Rice held by households fell 24.8% year on year to 638,160 MT, while rice in commercial warehouses fell 30.6% to 543,020 MT.

Holdings maintained by the National Food Authority (NFA) fell 21.5% year on year to 151,170 MT.

Month on month, rice stocks held by households, commercial warehouses, and the NFA fell 15%, 16.3%, and 15.5%, respectively.

“Of this month’s total rice stocks, 47.9% came from households, 40.8% were from commercial warehouses/wholesalers/retailers, and 11.3% were from NFA depositories,” the PSA said.

Meanwhile, PSA said the corn inventory fell 29.7% year on year to 560,610 MT.

Month on month, the total was 20.8% lower.

Household corn stocks fell 38.6% year on year to 187,360 MT while inventories of commercial warehouses fell 24.2% to 373,250 MT.

Compared to the previous month, corn inventories in households rose 73.3% while stocks in commercial warehouses dropped 37.7%.

“The total corn inventory during the month was composed of 33.4% from households and 66.6% from commercial warehouses/wholesalers/retailers,” the PSA said. — Revin Mikhael D. Ochave 

Angara expects no snags in approving CoA budget 

PHILIPPINE STAR/ MICHAEL VARCAS

THE SENATE finance committee’s chairman, Senator Juan Edgardo M. Angara, said he expects no opposition to the Commission on Audit’s (CoA) proposed 2022 budget of P14.5 billion.

Mr. Angara said in a committee session, in which he was the only member present: “I am not expecting any opposition at all, and in fact I am expecting a lot of support for your budget.”

The proposed budget is 2.47% higher than this year’s P14.1 billion. The budget department’s own proposal for the CoA spending plan is P14.2 billion following reductions to the operating and capital outlay items.

Michael G. Aguinaldo, the CoA chairman, said the commission has written the committee for additional maintenance and other operating expenses.

“If the budget is flexible enough, maybe additional capital outlay for additional provincial satellite auditing offices (PSAO)” he said at the hearing Tuesday.

As of June, said Mr. Aguinaldo, 54 PSAOs have been completed. “We have an additional 14 undergoing construction, some of which may be finished soon. Some are just starting their groundbreaking.”

By next year, 67 or 68 sites are estimated to be completed, he added.

“As before, we’ll endeavor to enable you, fiscally,” Mr. Angara said. “It’s very deserving… you play an important role in our scheme of governance.”

The budget was subsequently endorsed to the Senate plenary, according to the chamber’s Public Relations and Information Bureau. — Alyssa Nicole O. Tan

Pandemic transformed service sector via digitization, APEC told

PHILSTAR

THE services sector has been transformed during the pandemic because of digitization, and will remain vital to the recovery going forward, Tomas I. Alcantara, APEC Business Advisory Council Philippines (ABAC) chairman, said.

In his welcome remarks on the first day of the virtual public-private dialogue on services Tuesday, Mr. Alcantara said that the services sector accounts for around 60% of the Asia-Pacific Economic Cooperation’s (APEC) gross domestic product and employs more than half of the workforce in most economies.

The two-day dialogue was organized by ABAC and the Asia Pacific Services Coalition.

Mr. Alcantara said services can be used to catalyze economic activity dampened by the pandemic.

“We have seen digitalization of services from telework and financial technology to virtual restaurants and digital marketplaces, which have kept economies and the flow of goods and services running amid COVID-19-induced lockdowns,” Mr. Alcantara said.

“It is important to note that the pandemic has redefined the future of work. As such, economies and businesses must also leverage digital technology and innovation to train, re-skill and up-skill the current and future workforce,” he added. 

Mr. Alcantara said the use of digital technology is also important for the Philippines due to the composition of its workforce.

“This is particularly important for the Philippines, whose resilient economy rests on… the young, talented and world-class workforce, of course including those in the business process management industry and the Filipinos in every part of the world,” Mr. Alcantara said.

Trade Secretary Ramon M. Lopez noted in his welcome remarks the importance of a transparent and predictable regulatory environment to help services firms engage with the international market.

“I strongly believe that… good governance of our services markets is essential to creating new trade opportunities for firms. This is particularly true for our MSMEs who are often burdened by uncertain and costly requirements and procedures,” Mr. Lopez said.

“(Services) is one of our strongest and fastest growing sectors. Data show that the country’s services exports recorded a steady growth from 2009 to 2019, peaking at $41 billion worth of exports in 2019. It also accounted for 58.4% of total employment in the same year,” he added. — Revin Mikhael D. Ochave

Marcos rule poses risk of strongman rule — Fitch

BONGBONG MARCOS FB PAGE

THE ONLY son and namesake of the late dictator Ferdinand E. Marcos would probably continue President Rodrigo R. Duterte’s policies if he becomes President next year, posing risks of another strongman rule, according to Fitch Solutions Country Risk and Industry Research.

Ferdinand “Bongbong” R. Marcos, Jr. who was among the top three presidential candidates in an opinion poll, “appears to favor Duterte’s strongman leadership and has shown support for his father’s rule, posing risks of increased authoritarianism,” Fitch Solutions said in a report.

“Bongbong appears one of the few candidates to agree with Duterte’s policy of engagement with Beijing, potentially offering the most policy continuity out of the announced candidates,” it added.

Last month, Mr. Marcos said Mr. Duterte’s stance on the South China Sea dispute is “the right way to go.” He also parroted the administration’s views on Chinese aggression in Philippine-claimed areas in the South China Sea, saying the country could not afford to go to war with China. Mr. Marcos’s office did not immediately reply to a text message seeking comment.

“There are those who say that we should buy patrol boats and jets just in case we get to fight,” he told an online briefing. “Why would we think we will fight? That war will be over in less than a week. We’re defeated already.”

Aside from the former senator, Vice-President Maria Leonor “Leni” G. Robredo, Senator Emmanuel “Manny” D. Pacquiao, Manila Mayor Francisco “Isko” M. Domagoso and Senator Panfilo M. Lacson are also running for President.

“We expect the next president to take a more distant approach to relations with China and potentially seek international support over its disputes with Beijing in the South China Sea,” Fitch said.

The international research firm said Ms. Robredo, who has opposed the administration’s foreign policy, will “take a tougher stance on the Philippines’ dispute with China.”

It said Mr. Pacquiao had criticized the president’s cordial relations with China and would most likely seek closer ties with the United States. Mr. Lacson was expected to focus on “pro-business reforms.”

In July, Mr. Lacson asked local businessmen at a meeting whether it was “a sound concept to run the government like a private corporation,” noting that the state could adopt the private sector’s fiscal discipline.

He noted that many consider Singapore a big corporation and investments by the people come back to them in the form of social services and other forms of public service.

Last week, Ms. Robredo said any administration should prioritize anti-pandemic efforts to boost the country’s economic recovery.

“We have a false dichotomy of health versus the economy — I don’t believe that,” she told an online news briefing. “Our health and our economy are closely interconnected.” Ms. Robredo said her first economic policy would be stopping the pandemic.

Fitch Solutions said a possible shift to a “liberal” democratic presidency remained low, highlighting the potential for key Duterte policies such as his focus on infrastructure development and the war on drugs to be continued.

It said Mr. Domagoso was expected to continue with the infrastructure plans of Mr. Duterte and tackle crime but in a less aggressive way.

The Manila mayor, who said he admired the late dictator, has pledged to continue the government’s drug war but “under the blanket of existing laws and rights.”

Senator Ronald M. de la Rosa, who is also running for President, would probably focus on crime and mirror Mr. Duterte’s style, Fitch Solutions said. He enforced the state’s anti-illegal drug campaign as Mr. Duterte’s former police chief.

The International Criminal Court has ordered an investigation of Mr. Duterte’s crackdown on illegal drugs that has killed thousands, as it found “reasonable basis” that crimes against humanity might have been committed.

The court will also probe vigilante-style killings in Davao City when Mr. Duterte was still its vice mayor and mayor.

There were 1,424 vigilante-style killings in Davao City from 1998 to Dec. 2015, including 162 when Mr. de la Rosa was its police chief from 2012 to 2013, according to local human rights watchdog Coalition Against Summary Execution. — Kyle Aristophere T. Atienza

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