Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 6665

Yields on gov’t debt flat

YIELDS ON government securities (GS) traded in the secondary market ended flat last week amid worries over the Delta variant of the coronavirus disease 2019 (COVID-19).

GS yields, which move opposite to prices, fell by 1.10 basis points (bps) on average week on week, based on PHP Bloomberg Valuation Service Reference Rates as of July 23 published on the Philippine Dealing System’s website.

“Movements were mixed [last] week with the long end outperforming the rest of the curve,” First Metro Asset Management, Inc. (FAMI) said in a Viber message.

“Market saw better buying following the strong reception of the newly issued 10-year debt paper (FXTN 10-66) and overall risk aversion mode over escalating Delta variant cases across the globe,” it added.

A bond trader said renewed fears of a rise in COVID-19 cases in the country due to the local transmission of the Delta variant also affected yields last week.

“The Department of Health confirmed that there are local transmissions of the said variant already, which prompted a stricter quarantine status in Metro Manila and four more provinces. These developments triggered a risk-off sentiment which bolstered demand for local bonds,” the bond trader said in a Viber message.

Metro Manila, along with Ilocos Norte, Ilocos Sur, Davao de Oro and Davao del Norte, were placed under general community quarantine “with heightened restrictions” starting Friday until the end of the month.

The Health department on Saturday reported 17 new cases of the Delta variant, with 12 of which said to be local cases and one a returning overseas Filipino. The other four cases are still being verified. Three of these newly reported Delta variant cases are said to be active, while 14 have recovered.

The country now has a total of 64 Delta variant cases.

Meanwhile, rhe Bureau of the Treasury (BTr) raised P35 billion as planned from its auction of fresh 10-year bonds on Wednesday and even opened its tap facility to borrow another P5 billion via the tenor as the offering was over two times oversubscribed, with total tenders reaching P72.956 billion.

The 10-year notes fetched a coupon rate of 4%, slightly higher than the 3.927% quoted for the tenor at the secondary market before the auction. The coupon was also 105.2 bps higher than the 2.875% quoted for the BTr’s most recent issuance of fresh 10-year papers, which was on July 9, 2020.

The Treasury is looking to raise P235 billion from the local market this month: P60 billion via weekly offers of Treasury bills (T-bills) and P175 billion from weekly auctions of T-bonds.

The government wants to borrow P3 trillion this year from domestic and external sources to help fund a budget deficit that is seen to hit 9.3% of gross domestic product.

On Friday, bond rates at the secondary market were mixed. At the short end of the curve, the rate of the 91-day T-bills inched down by 0.51 bp to 1.1564%. Meanwhile, yields on the 182- and 364-day papers went up by 0.12 bp (to 1.4143%) and 2.52 bps (1.6374%), respectively.

At the belly, yields on the five- and seven-year T-bonds went down by 0.23 bp (2.9973%) and 1.94 bps (3.4818%). On the other hand, the two-, three-, and four-year debt papers saw their rates climb by 4.56 bps (2.0099%), 3.24 bps (2.3709%), and 1.46 bps (2.6956%), respectively.

On the other hand, the long-dated papers rallied as yields on the 10-, 20-, and 25-year bonds went down by 1.13 bps, 7.45 bps, and 12.69 bps to 3.8984%, 4.8354%, and 4.8041%, respectively.

“[The] local bond space might continue to trade sideways with upward bias as we head into BTr’s borrowing plan announcement for August. On the other hand, the threat of COVID-19 infection resurgence due to the more infectious Delta variant would also influence sentiment in the coming weeks where we might see more significant flows back to safe-haven assets,” FAMI said.

“However, due to rising global commodity prices and possibly more supply on the longer bonds, investors’ appetite would likely remain stronger in the shorter than five-year papers,” it added.

Meanwhile, the bond trader said aside from the borrowing plan for August, the market will also monitor the seven-year T-bond auction on Tuesday. 

“Given the continued spread of COVID-19 and with the market still armed with ample liquidity, local bond yields may move lower,” the bond trader said.

Another bond trader said yields may increase this week amid likely upbeat economic growth reports from the US and the Eurozone that “could encourage optimism on the global markets.”

“Moreover, broad market expectations of more hawkish signals from the US Federal Reserve in its policy meeting might help push yields higher. However, persistent worries over the COVID-19 Delta variant might limit this upward bias,” the second bond trader said in an e-mail. — A.M.P. Yraola

New warning system to sound alarm on ‘tipping points’ for embattled rainforests

REUTERS

KUALA LUMPUR — A new early warning system using satellite data to sound the alarm on growing threats to the world’s tropical forests, including worsening drought and logging, aims to stop them reaching a point of no return, scientists said on Friday.

Backed by the National Geographic Society and Swiss watch manufacturer Rolex, almost 60 international scientists devised the system to track rising dangers to the planet’s rainforests, which are vital for protecting the climate and nature.

The vulnerability of rainforests is much larger than predicted in the past, they found, warning areas that are disturbed or fragmented have almost no resilience to climate warming and drought.

Their work also suggested rainforests are losing their capacity to cycle carbon and water — essential functions to regulate the climate, both globally and locally.

The new tropical forest vulnerability index (TFVI) tracks and analyses the impact of changes in the climate and the use of land — such as clearing it for farming — on local forests, as well as how they are responding to such stress factors.

The early warning system is intended to alert policymakers and conservationists of threats in good time, so they can take action to protect forests.

“It’s an index that tells us ‘if you don’t do anything, that area is going to be devastated,’” said Sassan Saatchi, a scientist with NASA’s Jet Propulsion Laboratory at the California Institute of Technology.

“If the rainforest changes, we might completely change the climate of the earth — it is like the canary in the climate-change coal mine,” he told the Thomson Reuters Foundation.

Conserving and restoring carbon-rich rainforests are vital tools to help the world meet its planet-heating emissions goals.

But in 2020, tropical forest losses around the world were equivalent to the size of the Netherlands, according to monitoring service Global Forest Watch.

The TFVI’s initial findings identified the Amazon Basin as showing large-scale vulnerability to drying conditions and frequent droughts, while rainforests in Southeast Asia are suffering from land-use change and fragmentation as large areas have been cut down to produce palm oil.

The Congo Basin appears to be more resilient because it is adapted to the historical impacts of droughts and is undergoing less conversion for agriculture, the researchers said.

The index uses trends on forest clearance and satellite data on climate and weather going back almost four decades to spot early signals of deforestation.

It aims to identify “tipping points,” when a tropical forest gets so impacted by disturbances it starts shifting from a stable to a vulnerable condition, said Saatchi, lead author of the study published in the journal One Earth.

The TFVI methodology and data will be publicly available and regularly updated, allowing anyone to use it to monitor a specific forest area.

Once problems are identified, efforts could be made to adapt conservation policies and local forest management, such as offering new incentives for communities to tackle illegal logging or planting more drought-tolerant trees.

“A diverse suite of solutions will be required to address rainforest vulnerability given each ecosystem’s unique response to different stressors,” said Nicole Alexiev, vice-president of science and innovation at the National Geographic Society. — Thomson Reuters Foundation

Delta variant dampens PLDT shares

JGSUMMIT.COM.PH

INVESTORS sold PLDT, Inc. last week following fears of the local transmission of the Delta variant of the coronavirus disease 2019 (COVID-19).

A total of 241,540 PLDT shares worth P309.91 million were traded from July 19 to 23, data from the Philippine Stock Exchange (PSE) showed.

Financial markets were closed on Tuesday in observance of Eid’l Adha or the Feast of Sacrifice.

The share price of one of the biggest telecommunications companies in the country closed at P1,265 apiece, down 2.1% from July 16’s closing of P1,292. For the year, the stock has gone down by 7.2%.

“PLDT was downed [last] week after the reported increase in the spread of the much-feared Delta variant with local transmission that created a negative sentiment among investors,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a mobile phone message on Friday.

Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said the increasing Delta variant cases of the coronavirus disease in the country prompted a “knee-jerk selldown” of the index heavyweights, which include PLDT.

“While investors welcomed the news of PLDT and Smart’s satellite project as well as the partnership with the Cavite LGU, there was too much negative market sentiment across the board,” Ms. Agravio said in an e-mail.

In a statement earlier last week, PLDT and its wireless unit Smart Communications, Inc. expect their planned space-based cellular broadband communication project with US-based AST SpaceMobile, Inc. to boost disaster preparedness efforts in far-flung areas in the country.

This project is seen to reach remote areas in the country to foster online learning, e-commerce, and online banking, as well as Filipinos out at sea, via use of low-earth orbit satellites.

“The collaboration of PLDT and Smart with AST on disaster preparedness is a positive for [PLDT] and Smart as it manifested the reliability of the company systems to manage disaster in key areas,” Mr. Pangan said.

Meanwhile, PLDT said on Thursday it partnered with the Cavite government for a fiber network rollout for the province’s digital road map to become a “Smart City.”

The Cavite government and PLDT group will activate the Cavite Managed Broadband Network Service that will enable Internet to the province’s 23 cities and municipalities, 129 public schools, and 42 public spaces.

Mr. Pangan sees the collaboration to give more confidence to the telco’s investors.

“Turning Cavite into a ‘smart city’ will create more confidence among investors on the company and will further increase its subscribers base on usage and trust after focusing its capex to upgrade its fiber system and wireless speed,” Mr. Pangan said.

However, market sentiment has been dampened after the Department of Health detected local transmission of the more transmissible Delta variant of the COVID-19 on Thursday.

The Health department has recorded 64 Delta variant cases in the country.

On Friday, Malacañang also placed the National Capital Region (NCR), Ilocos Norte, Ilocos Sur, Davao de Oro, and Davao del Norte under general community quarantine “with heightened restrictions” to curb the spread of the Delta variant.

“Nonetheless, the upcoming earnings season may give PLDT a bit of a boost in the next coming weeks, assuming the results are upbeat,” Ms. Agravio noted.

PLDT’s attributable net profit dipped by 1.8% to P5.80 billion in the first three months of the year amid lower income from its wireless segment.

Both analysts gave their support and resistance levels for PLDT this week at P1,260 and P1,300, respectively.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Bernadette Therese M. Gadon

Isuzu Bulacan is IPC Service Skills Olympics champion

IMAGE FROM ISUZU PHILIPPINES

ISUZU PHILIPPINES CORP. (IPC) recognized its 16th Isuzu Service Skills Olympics (ISSO) winners in a virtual official awards ceremony last June 11. ISSO “tests the knowledge and skills of service technicians, service advisors, and parts staff coming from Isuzu dealerships nationwide.”

Said IPC Vice-President for After-sales Wataru Miyamoto, “It is very unfortunate that we cannot do our usual ISSO face to face. However, this year, we strive for excellence as we intend to continue to improve the technical skills capabilities of all after-sales staff and personnel.”

He continued in a speech to dealer participants, “This pandemic caused a major disruption to our business. Please allow me to express my sincere appreciation to our dealers for all your continuous support to our ongoing after-sales programs despite these trying times.”

For his part, IPC President Hajime Koso congratulated the group not just for a successful ISSO run but also for the back-to-back achievement of a Triple Star rating in the annual after-sales performance evaluation of Isuzu Motors Limited. “Only five out of 33 countries worldwide received the esteemed rating. Being one of the five to receive the award proved that all the after-sales activities of the Philippines are of high caliber and top of the class in Isuzu network’s standard around the world. This will not be made possible without the efforts and cooperation of our dealers,” he said.

The local contest is comprised of three categories that are joined by different after-sales team members. Each have equivalent weighted points that are used to determine the Dealer Grand Champion. The top five performers among dealerships are (in order): Isuzu Bulacan, Isuzu Pasig, Isuzu Iloilo, Isuzu Makati, and Isuzu Cabanatuan.

Preparations are already under way for the I-1 Grand Prix-Isuzu World Technical Competition to be held, also digitally, from Nov. 24 to 26, which will be participated in by other Isuzu distributors in other parts of the world.

Duterte administration’s legacy through the years

TIME MAY BE running out for President Rodrigo R. Duterte to implement the remaining economic reforms, as some key priority measures have yet to be passed by Congress less than a year before he steps down. Read the full story.

Duterte administration’s legacy through the years

How big is the government’s budget deficit

How big is the government’s budget deficit

How PSEi member stocks performed — July 23, 2021

Here’s a quick glance at how PSEi stocks fared on Friday, July 23, 2021.

Peso may weaken on virus worries, Fed meet

BW FILE PHOTO

THE PESO may depreciate further versus the greenback this week as the market waits for clearer signs from the US Federal Reserve on its policy normalization and amid rising concern on the spread of the more contagious Delta variant of the coronavirus disease 2019 (COVID-19).

The local unit closed at P50.34 per dollar on Friday, losing 20.5 centavos from its P50.135 finish on Thursday, data from the Bankers Association of the Philippines showed.

The peso also weakened by P10.5 centavos from its P50.235-per-dollar close on July 16.

The peso weakened due to preference for the dollar amid rising concerns over the local transmission of the Delta variant, which resulted in the tightening of restriction measures, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Metro Manila and some provinces on Friday were put under general community quarantine “with heightened restrictions” until July 31 to prevent the further spread of the highly infectious Delta variant.

The country’s travel ban on countries with rising cases of the variant has also been expanded to include Malaysia and Thailand.

The Health department on Saturday reported 17 new cases of the Delta variant, with 12 of which said to be local cases and one a returning overseas Filipino. The other four cases are still being verified. Three of these newly reported Delta variant cases are said to be active, while 14 have recovered.

The country now has a total of 64 Delta variant cases.

Heightened corporate demand for the dollar last week also pulled the peso down, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

For this week, Mr. Ricafort said the peso could weaken further as investor sentiment could take a hit from the increase in COVID-19 infections amid the local transmission of the Delta variant.

Mr. Asuncion said the market will also monitor the Federal Open Market Committee’s meeting on July 27-28 for clues on the timing of the tapering the Fed’s pandemic-driven asset purchases.

The Fed in June kept policy rates near zero to support economic recovery but said interest rate hikes may come as soon as 2022 or 2023, earlier than what was previously signaled.

For this week, Mr. Ricafort gave a forecast range of P50.05 to P50.45 per dollar, while Mr. Asuncion expects the peso to move within a stronger band of P50 to P50.40. — L.W.T. Noble

Stocks to move lower as Delta variant cases rise

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

SHARES could trade lower this week, with investors seen remaining cautious as the local transmission of the Delta variant of the coronavirus disease 2019 (COVID-19) dampens market sentiment.

The Philippine Stock Exchange index (PSEi) declined by 55.88 points or 0.85% to close at 6,520.74 on Friday, while the broader all shares index went down by 36.43 points or 0.89% to end at 4,038.51.

Week on week, the bellwether PSEi lost 173.09 points from its 6,693.83 close on July 16.

“The local bourse declined… as the government tightens once again the restrictions in Metro Manila and other provinces due to the Delta variant threat,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a Viber message on Friday.

“We think that many investors now are staying on the sidelines monitoring the COVID-19 cases and the action of the government against the spread of the COVID-19,” she added.

The government on Friday placed Metro Manila and the provinces of Ilocos Norte, Ilocos Sur, Davao de Oro, and Davao del Norte under general community quarantine “with heightened restrictions” until the end of the month to help curb the spread of COVID-19.

The Health department on Saturday reported 17 new cases of the Delta variant, with 12 of which said to be local cases and one a returning overseas Filipino. The other four cases are still being verified. Three of these newly reported Delta variant cases are said to be active, while 14 have recovered.

The country now has a total of 64 Delta variant cases.

The market is expected to trade with a downward bias this week as fears over the spread of the more transmissible Delta variant of COVID-19 are likely to affect investor sentiment.

“If more confirmed local cases with the Delta variant are reported [this] week, then we may see heavy sell-offs in the market,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Saturday.

“[This] is also expected to weigh on the market,” Mr. Tantiangco said. “This is due to the economic losses anticipated from the imposition of relatively tighter measures against the productive capacity of the biggest contributor to our GDP (gross domestic product).”

Mr. Tantiangco expects the benchmark index to trade at around 6,400 to 6,600, noting that “trading may remain lethargic.”

“Investors may continue to watch out for the second quarter corporate results for clues,” he added.

Meanwhile, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said the PSEi could move between 6,450 and 6,700.

“Market will continue its volatility with a downward bias as infection rates increased with the pandemic virus, [coupled] with the government doing ways to contain the spread of the virus through stricter measures,” Mr. Pangan said in a text message on Saturday. — Keren Concepcion G. Valmonte

Cebu BPOs see remote work arrangements in place for up to five years

PIXABAY

A CEBU business process outsourcing (BPO) organization said it expects to continue with work-from-home arrangements for between two and five more years, and called for the accelerated rollout of telecommunications services to the countryside.

Cebu IT-BPM (Information Technology-Business Process Management) Organization President Exuperto P. Cabataña said in an e-mail last week that 60-75% of outsourcing staff could be assigned to work remotely for the foreseeable future.

“Therefore, we are pushing the telcos to accelerate addition of lines and network expansion outside the central business districts and well into the countryside.”

The government, he added, needs to fully digitalize its processes and assist telecommunications firms in speeding up the processing of their permits to set up internet infrastructure. Government agencies last year signed a joint circular that would streamline telco permit processing.

The Philippines has relatively low digital penetration rates. Last year it ranked 66th out of 85 countries in the 2020 Digital Quality of Life Index due to expensive, low-quality internet and poor electronic infrastructure.

The Cebu industry group’s revenue growth, representing about a tenth of the industry, is expected to be in line with national trends.

The Information Technology and Business Process Association of the Philippines last year reduced its projections to a 3.2-5.5% revenue compound annual growth rate, with an estimate of $27.88-$29.09 billion for 2022. Outsourcing revenue rose just 1.4% to $26.7 billion in 2020.

Mr. Cabataña said that there is slightly higher outsourcing growth in Clark and Iloilo, areas that are favored by locators planning expansions in places with more space and less congestion than Cebu.

“However, with the pandemic situation which is expected to last some 2-5 years more, the space advantage of Clark and Iloilo narrows as talent and skills again become more prioritized thereafter,” he said.

A partnership between the government and private sector last year identified 25 cities for outsourcing development, redirecting opportunities to cities like Batangas, Olongapo, and Zamboanga, which were chosen based on parameters identified as priorities for investors, including talent availability, infrastructure, cost, and business environment. — Jenina P. Ibañez

Gov’t return to power generation should not be ruled out, former official says

PSALM.GOV.PH

By Angelica Y. Yang, Reporter

THE DEPARTMENT of Energy’s proposal to embark on new power generation projects must not be dismissed outright due to the difficulty of balancing energy security and affordability, a former official of the National Renewable Energy Board (NREB) said.

“Perhaps the proposal is for government to engage or pursue new power generation projects — if so, I think this should be evaluated closely, resisting perhaps the temptation to immediately dismiss the idea,” Monalisa C. Dimalanta, former NREB chairperson, told BusinessWorld via Viber over the weekend.

“As we continue to define the path towards energy transition that addresses both our energy security requirements and affordability challenges, all hands really need to be on deck,” she added.

Energy Secretary Alfonso G. Cusi has asked the Senate Committee on Energy to consider allowing the government to engage in “limited” power generation — not to compete with the private sector — but to augment the grid’s reserves. The proposal would reverse a decades-long trend of power privatization.

Ms. Dimalanta said that the government remains in the power generation sector despite the Electric Power Industry Reform Act of 2001’s (EPIRA) privatization mandate.

“(The government) continues to hold a significant portfolio of the generation assets through PSALM (Power Sector Assets and Liabilities Management Corp.) that have not yet been privatized and through NPC (National Power Corp.) in the off-grid areas,” she said.

She added that allowing the government to re-enter power generation cannot solely address the country’s energy issues.

“Relying on government alone is not enough, particularly in taking on the huge challenge of energy security. (But the) government plays a big role as it (seeks to promote) proper governance and implementation of laws to create a stable investment climate… and by making sure it does not crowd out the private sector to ensure competition and a level playing field,” Ms. Dimalanta said.

If the government decides to go ahead with its proposed foray into power generation, it will have to revise the law, according to Alberto R. Dalusung III, who is currently the energy transition advisor of non-government organization Institute of Climate and Sustainable Cities.

“It would require amending EPIRA. They would have to amend the law… That means government (is) going back into generation. My understanding as a layman is, that’s not allowed under EPIRA (which states that there should be) no new government investments in generation,” Mr. Dalusung told BusinessWorld in a video call last week.

He said Mr. Cusi’s proposal indicates that the government intends to play a “supporting role” in power generation, and not compete with private firms in doing so.

At a Senate hearing on June 10, Mr. Cusi said government-owned power plants are best used for supplying emergency power when needed. He said that this arrangement could be the “antidote” to the National Grid Corp. of the Philippines’ repeated non-compliance with securing the needed firm-contracted reserves.

The Luzon grid was placed under a series of red and yellow alerts between May 31 and June 2, triggering rotating brownouts due to forced plant outages, thinning reserves and higher temperatures.

Mindanao hydropower project applications up for review soon

PHILSTAR FILE PHOTO

DAVAO CITY — Proposed hydropower projects in Mindanao will be up for assessment soon, in line with efforts to bring fossil fuel and renewable energy power sources into balance, according to an official with the Mindanao Development Authority (MinDA).

“We are anticipating, moving ahead (with) the resurgence or restarting of processes of any of the hydropower applications,” Assistant Secretary Romeo M. Montenegro, MinDA deputy executive director and technical working group head of the Mindanao Power Monitoring Committee, said in a recent virtual briefing.

Among the major pending applications are the 225-megawatt Agus 3 Hydro Power Plant by Maranao Energy Corp.

Mr. Montenegro told BusinessWorld the project’s declaration of commerciality is currently under evaluation by the Department of Energy.

It will be part of the Agus Hydropower Complex in Baloi, Lanao del Norte.

The overall rehabilitation plan for the Agus-Pulangi facility is also underway, with the proposal coming from the government-owned Power Sector Assets and Liabilities Management Corp. — Maya M. Padillo

1...6,6646,6656,666...13,153Page 6,665 of 13,153
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube