GSIS investment portfolio grows 5% to P890.59 billion in 2021

March 4, 2022 | 10:07 pm

The investment portfolio held by the Government Service Insurance System (GSIS) grew 5.22% to P890.59 billion in 2021, with the growth propelled by foreign-currency investments in equities and infrastructure, the Department of Finance (DoF) said in a statement, citing a report from the agency.

“The growth came primarily from the GSIS’s well-positioned foreign currency denominated investments, particularly in the equities market and the infrastructure sector,” GSIS President and General Manager Rolando L. Macasaet was quoted as saying. 

Peso-denominated investments fell 4.38% to P633.31 billion in 2021, while foreign currency-denominated assets grew 39.7% to P257.26 billion.

Peso cash assets held by the pension firm for civil servants rose 26% to P74.81 billion in 2021.

Investments in the domestic equity market rose 9.33% to P212.18 billion in 2021.

Peso-denominated investments in infrastructure declined 68% to P4.66 billion. This was due to the completion of some projects and the sale of an asset which yielded a P5.11-billion gain for the GSIS.

Peso-denominated fixed-income investments fell 13.4% to P341.66 billion.

Equity investments in foreign markets rose by more than four times to P69.58 billion in 2021 from P15.62 billion in 2020.

Foreign-currency denominated cash and short-term time deposits held by the GSIS more than tripled, to P22.17 billion in 2021 from P6.6 billion a year earlier.

Infrastructure assets held in foreign currencies rose 50.9% to P26.34 billion.

Foreign currency-denominated fixed-income assets declined 3.6% to P139.17 billion due to maturities and weaker valuations. - Luz Wendy T. Noble

Party-list legislators call for House probe into SSS pensions

March 4, 2022 | 10:03 pm

A resolution was filed in the House of Representatives Thursday seeking an investigation into the red tape allegedly faced by pensioners of the Social Security System (SSS).

The Bayan Muna party-list filed House Resolution 2504, which calls on the House Committee on Government Enterprises and Privatization to look into the SSS Annual Confirmation of Pensioners (ACOP) Program, which requires pensioners, often elderly or ill, to inform the SSS that they are still receiving their pensions.

SSS Circular No. 2021-010 requires certain pensioners to submit documents through mail, e-mail or drop boxes at SSS branches, or request a home visit or video conference with the officials. Failure to comply with the ACOP schedule will result in the suspension of pension payments.

“SSS pensioners have noted the absence of drop boxes at certain SSS branches,” the legislators said in their resolution. “While the SSS has explained that this is because they are accepting limited numbers of walk-in appointments, designated drop boxes are among the possible channels for ACOP compliance for retirement/survivor pensioners who opt to submit physical documents.”

The members of Bayan Muna also said that even the pensioners who are not required to provide ACOP documents often need to physically visit SSS branches due to lack of information and out of fear their pensions will be suspended during the pandemic.

“The reimplementation of the ACOP as it is now has only caused confusion and added to the burdens of pensioners, the elderly especially, instead of helping them in this time of need when the pandemic is still ongoing,” the legislators said. – Jaspearl Emerald G. Tan

Senator Marcos urges gov’t to diversify wheat sourcing, develop non-wheat flours

March 4, 2022 | 10:01 pm

The government needs to diversify the Philippines’ sources of wheat and to explore using other raw materials for flour, to keep rising commodity prices from filtering into inflation, Senator Maria Imelda Josefa Remedios R. Marcos said Friday. 

“Bread and noodles prices will reflect the volatility of wheat prices caused by the war between Russia and Ukraine, the world’s main wheat exporters,” she said in a statement. “Since flour millers import all their wheat requirements, their production costs will swing with higher wheat prices and be passed on to bread producers and on to consumers.”

She said that US may be the Philippines’ main supplier of wheat but the banking and transport sanctions against Russia could reduce the international wheat supply and increase prices. 

“Add to that the high cost of LPG (liquefied petroleum gas) and you can expect the price of pan de sal made in community bakeries to go up. Snack time may have to go,” Ms. Marcos said.

Ms. Marcos also proposed to turn to China as an alternative wheat source. 

“Let’s break bread with China and get a better deal on wheat prices, while maintaining reliable trade with the US and Australia,” she said. “Why do we still import non-wheat flour from Thailand and Vietnam when we can plant and harvest our own raw sources like rice, corn, camote (sweet potato), cassava, potato, and monggo (mung bean) in a similar climate?” 

She also said that non-wheat flour could be a solution both to hunger and the increasing price of flour. 

“Let’s rediscover non-wheat flour as a solution not only to the rising cost of regular flour but also to persistent hunger and malnutrition, with protein-rich peanut and malunggay (moringa) in the mix,” Ms. Marcos said. – Jaspearl Emerald G. Tan

PEZA sees vaccination progress boosting investment this year

March 4, 2022 | 9:56 pm

THE PHILIPPINE Economic Zone Authority (PEZA) expects progress in the vaccination drive to further open up the economy, with the Philippines poised to attract more investment this year.

PEZA Director General Charito B. Plaza said in a statement: “With the countrywide vaccine and booster inoculation, (we are) confident that PEZA can secure more investment pledges and more registered ecozones for 2022 and beyond. PEZA has indeed come a long way but there is still more to be done and more to achieve.”  

She did not provide a specific estimate for investment growth.

PEZA said up to the end of 2021, its economic zones have attracted P4.036 trillion worth of investment since its creation in 1995. The agency was established following the passage of Republic Act No. 7916, or the Special Economic Zone Act.  

It said exports since PEZA’s founding have amounted to $933.835 billion, with jobs created in registered economic zones totaling 1,782,913.

PEZA has announced 2021 export totals of of $63.061 billion, up 14%. Employment at PEZA-registered ecozones was over 1.7 million jobs in 2021 compared to 1.5 million a year earlier.  

Currently, PEZA said there are 4,665 locator companies across 415 SEZs across the country.  

PEZA said new types of special economic zone are becoming available to suit the needs of entrepreneurs, industrialists, and technology companies, as well as those engaged in agriculture and fisheries, defense, and halal products. – Revin Mikhael D. Ochave 

BSP raises P100 billion via 28-day bills

March 4, 2022 | 9:44 pm

The central bank on Friday raised P100 billion as planned via an offering of short-term securities, with rates pushed higher due to geopolitical concerns arising from the Russian invasion of Ukraine.

The 28-day bills of the Bangko Sentral ng Pilipinas (BSP) were oversubscribed, with demand hitting P148.75 billion. 

Tenders were also higher than the P135.4 billion in bids attracted in the Monday auction. The usual Friday auction for the bills was conducted Monday as Feb. 25 was a holiday.

Accepted rates for the one-month papers ranged from 1.75% to 2.1%, narrowing from the 1.7% to 2.2475% range previously. This caused the average rate on the paper to increase by 2.81 basis points to 1.9492%.

The 28-day bills together with the term deposit facility are used by the BSP to mop up excess liquidity in the financial system and to better guide market rates.

Yields on the central bank’s one-month bills increased Friday as market participants remained worried about the impact of the Russian invasion of Ukraine on oil and commodity prices, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The United Nations estimates the number of refugees fleeing Ukraine at 1 million, Reuters reported. Thousands are estimated to have died or been wounded in the biggest attack on a European state since World War II.

As a result, market worries have centered on the supply of oil once sanctions bite against Russia, a major producer. The futures contracts for Brent crude and West Texas Intermediate, the benchmark prices for Europe and the US, respectively, hit multi-year highs of $119.84 and $116.57 per barrel Thursday before easing back towards the end of the trading session.

Since the start of the year Philippine pump prices of gasoline, diesel, and kerosene have jumped by P9.65, P11.65, and P10.30 per liter, respectively.

Mr. Ricafort said signals from the US Federal Reserve regarding their impending interest rate increase also caused yields to rise on BSP bills.

Fed Chairman Jerome H. Powell said he will back a quarter point increase in interest rates at the Federal Open Market Committee’s meeting between March 15 and 16, Reuters reported.

He said the Fed expects the conflict between Russia and Ukraine to cause elevated commodity prices. Ukraine is a major supplier of wheat.

“What we know so far is that commodity prices have moved up significantly, energy prices in particular. That is going to work its way through our US economy,” he said. – Luz Wendy T. Noble

Security Bank net profit declines 7.2% on weaker interest income; provisions fall sharply

March 4, 2022 | 9:43 pm

Security Bank Corp. said net profit declined 7.2% in 2021 to P6.9 billion as net interest income fell and expenses rose, while loan-loss provisions narrowed sharply.

In a disclosure to the bourse Friday, the bank said fourth-quarter net profit was up 171% at P2.1 billion as the economy opened up. 

“Our fourth quarter results benefitted from the easing of mobility restrictions and the resulting uplift of the economy. We are optimistic about economic activity in 2022, despite the Omicron impact in January,” Security Bank President and Chief Executive Officer Sanjiv Vohra said. 

Net interest income declined 10% to P27.5 billion in 2021, with the net interest margin – the difference between what it earns in interest from loans and what it pays out to depositors – dropped 27 basis points to 4.43%.

Non-interest income dropped 53% to P9.4 billion, with the bank adding that 2020 results benefited from “extraordinary securities trading gains.” In 2021, service charges, fees and commissions rose 25.4% to P4.5 billion, while trading gains increased 34% to P3.7 billion.

Operating expenses rose 8% from a year earlier, as the bank upgraded technology and personnel. This brought the cost-to-income ratio to 57.8%.

The bank set aside P1.2 billion in provisions for potential loan losses in the fourth quarter. This brought loan loss provisions to P5.3 billion in 2021, much lower than the P26.4 billion set aside in 2020.

Security Bank’s gross loan portfolio rose 1% year-on-year to P467 billion at the end of 2021. 

Retail loans, which accounted for a quarter of the loan book, declined 9% in 2021. Wholesale loans rose 5%.

At the end of 2021, the gross non-performing loan (NPL) ratio stood at 3.94%, while the NPL reserve cover was 93%.

Total deposits rose 19% year-on-year to P524 billion. Low-cost savings and demand deposits, which accounted for 61% of the total, grew 19%. High-cost deposits rose 18%.

Total assets grew 7% year-on-year to P700 billion, while shareholders’ capital rose 1% to P125 billion.

The bank’s capital adequacy ratio was 19.8%, while common Equity Tier 1 ratio was 19.1%. Both are above minimum regulatory requirements.

In 2021, the return on shareholders’ equity was 5.57%.

Security Bank shares closed at P113 Friday, down 80 centavos or 0.7%. – Luz Wendy T. Noble

BSP prescribes reporting standards for payments system operators

March 4, 2022 | 9:41 pm

The Bangko Sentral ng Pilipinas (BSP) has issued standardized reporting requirements for operators of payment systems (OPS) and also required periodic independent reviews of such reports.

Approved on March 1, Circular 1138 is authorized by the National Payment Systems Act, which allows the BSP to oversee and ensure the efficiency, safety, and reliability of the payments system, the central bank said. It also laid down penalties and sanctions for violations of the reporting standards.

“This recent policy issuance is critical to the BSP’s determination of appropriate oversight interventions, formulation of responsive policies and regulations, as well as continuous development of the national payments system,” BSP Governor Benjamin E. Diokno said in a statement Friday.

The mandatory reports relate to operations, including information needed by regulators for statistical, policy development, and supervisory purposes.

OPS companies are also required to have a reporting system in place in times of emergency or weather disruptions that could affect the processing of transactions.

The periodic independent review clause seeks to ensure reliability and effectiveness of the reporting, condicuted via either an internal auditor or an external party with expertise in information technology, data management, and regulatory compliance.

“The appropriate frequency of such review shall mainly depend on the systemic importance, risk profile and business complexity of the OPS as well as the extent of recurrence of control weaknesses that cause reporting exception,” the BSP said. 

The BSP said OPS companies should retain their data and reports for at least five years. In cases where a financial institution becomes subject to investigation by the BSP for possible criminal, administrative or civil cases, relevant information will have to be preserved beyond five years until a final verdict has been reached.

Penalties for erroneous, delayed, and unsubmitted primary reports can range from P300 to P3,000 depending on the type of financial institution. Meanwhile, violations committed in connection with secondary reports will draw fines of P60 to P600.

“The penalties will accumulate until such time that the report has been determined compliant with the prescribed reporting standards,” the BSP said.

Possible non-monetary sanctions including a first offense warning to top officials of the OPS company and a reprimand for the Chief Executive Officer (CEO) and the board for a second offense. 

For a third offense, the CEO may be issued a suspension order of between a month and a year depending on the gravity of the violation. The top official and members of the board may also be disqualified from the industry for further offenses and the Monetary Board will have the power to designate a manager to take over the operations. 

According to the BSP, 198 companies have obtained an OPS certificate of registration. – Luz Wendy T. Noble

UCPB rating withdrawn by Moody’s after LANDBANK merger

March 4, 2022 | 9:38 pm

Moody’s Investors Service said it is withdrawing the long-term deposit rating of United Coconut Planters’ Bank (UCPB) due to its merger with Land Bank of the Philippines (LANDBANK).

UCPB exits Moody’s coverage with a rating upgrade to Baa2 to bring it in line with its acquirer, which is a much larger state-owned bank. The stable outlook was also maintained, Moody’s said in a statement Friday.

“Subsequently, Moody’s will withdraw the baseline credit assessment and the deposit ratings assigned to UCPB,” Moody’s said, with LANDBANK emerging as the surviving entity. 

UCPB had total assets of P347.4 billion at the end of 2020, while LANDBANK’s assets were P2.4 trillion. 

“Moody’s estimates the combined entity will be the second-largest bank in the Philippines, with a market share in assets of approximately 15% as of the end of 2020,” it said. – Luz Wendy T. Noble

Peso lower after PHL debt hits record levels, fire at Ukraine nuclear plant

March 4, 2022 | 9:35 pm

The peso weakened against the dollar after the government reported record levels of debt, and as a nuclear plant in Ukraine caught fire while under attack from Russian forces. 

The peso closed at P51.74 to the dollar Friday, against a P51.50 close Thursday, the Bankers Association of the Philippines said.

It also retreated from its P51.34 close on Thursday last week. Financial markets were closed for a holiday on Friday, Feb. 25.

The peso opened Friday at P51.65. The low was P51.75, while the high was P51.60.

Dollar volume rose to $793.22 million Friday from $789.38 million the day before.

Currency traders responded negatively to the fire in the Ukrainian power plant, which came under attack from Russian forces, a trader said in an email.

The Zaporizhzhia power plant is Europe’s largest nuclear facility. 

Earlier in the invasion, Russia captured the site of the defunct Chernobyl power plant north of Kiev, which is currently an exclusion zone due to unsafe levels of radiation. 

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the market also absorbed news that the Philippines’ outstanding debt topped P12 trillion at the end of January.

Preliminary data released by the Bureau of the Treasury indicated that outstanding debt hit P12.03 trillion, up 16.5% from a year earlier and up 2.6% month-on-month.

The Treasury said the debt stock rose after another zero-interest loan from the central bank and an increase in borrowing from domestic creditors.

As of end-2021, the debt to gross domestic product (GDP) ratio hit 60.5%, the highest since 2005. This also surpassed the 60% threshold considered as manageable by multilateral lenders for developing economies. – Luz Wendy T. Noble

Comelec asked to decide on Marcos

March 4, 2022 | 9:34 pm

Martial law victims have asked the Commission on Elections (Comelec) to resolve a a lawsuit that seeks to bar the son and namesake of the late dictator Ferdinand E. Marcos from running for president this year.

Delaying the case could lead to complications, especially with the May 9 elections nearing, they said in a six-page motion.

“The failure to resolve the instant petition would cause complications in that the votes cast for the respondent may be included in the counting and in the canvassing,” they said through lawyer Christian S. Monsod, a former Comelec chief and a constitutional framer.

“Further, if the evidence of guilt is strong, as in this case, his proclamation shall be suspended notwithstanding the fact that he received the winning number of votes in such election,” they added.

The plaintiffs also cited a Comelec order issued on Feb. 23, which says that upon the retirement of a commissioner, other members of the body must resolve pending cases within 45 days.

The election body has reorganized its divisions after its former chairman and two commissioners retired last month.

The plaintiffs earlier asked Comelec to bar ex-Senator Ferdiand “Bongbong” R. Marcos from the presidential race after he was convicted for tax evasion in the 1990s.

The election body’s Second Division rejected a similar petition in January, as it ruled Mr. Marcos did not mislead the public when he said in his certificate of candidacy that he was eligible to run for president. The case is on appeal with the Comelec en banc.

The First Division last month rejected three consolidated lawsuits seeking to disqualify Mr. Marcos from the presidential race, as it ruled that his failure to file his tax returns in the 1980s did not involve wicked, deviant behavior. The case is also on appeal with the en banc.

The cases against Mr. Marcos that are on appeal before the en banc had been raffled off to a writer and would resolved before May 9, acting Comelec chief Socorro B. Inting said earlier.

Meanwhile, Comelec has partnered with a nonpartisan group to educate the Filipino youth and first-time voters before the May 9 elections.

It signed a deal with Democracy Watch Philippines, which will offer virtual seminars and lectures to inform these voters on elections issues, according to a video of the event streamed live on Facebook.

Different universities and non-government groups will participate in providing these lectures.— John Victor D. Ordoñez

COVID cases fewer than 1,000 for 3rd day

March 4, 2022 | 9:32 pm

The Philippines posted 853 infections on Friday — the third straight day the tally fell below 1,000 — bringing the total to 3.67 million. 

The death toll hit 56,770 after 232 more patients died, while recoveries rose by 1,062 to 3.56 million, it said in a bulletin.

It said 4.3% of 25,496 samples from March 2 tested positive for COVID-19, which is within the World Health Organization’s threshold.

Coronavirus tests in February were lower than in January, when the heavily mutated Omicron variant spurred a spike in infections.

Of 50,8230 active cases, 450 did not show symptoms, 45,300 were mild, 2,773 were moderate, 1,411 were severe and 296 were critical.

DoH said 92% of new cases occurred on Feb. 19 to March 4. The top regions with cases in the past two weeks were Metro Manila with 170, Calabarzon with 128 and Central Visayas with 94 infections. It added that 2% of new deaths occurred in March and 7% in February.

Eleven duplicates were removed from the tally, five of which were reclassified as recoveries, while 219 recoveries were relisted as deaths. Two laboratories failed to submit data on March 2. — Kyle Aristophere T. Atienza

Pacquiao promises free housing

March 4, 2022 | 9:29 pm

Pacquiao-MANNY-PACQUIAO-OFFICIAL-FACEBOOK-PAGE — MANNY PACQUIAO OFFICIAL FACEBOOK PAGE

Senator and boxing champion Emmanuel “Manny” D. Pacquiao on Friday said he would give the poor free housing if he becomes president.

“I want each Filipino to have their own house,” he said in a statement in Filipino. “That’s why I asked for your signatures, so you could be given a free house.”

Meanwhile, Willie T. Ong, the running mate of presidential bet Francisco “Isko” M. Domagoso, said candidates participating in debates should undergo a lie detector test..

“Any question from A-Z is fine. If you know it, answer it. If you don’t, say you’ll look into it. No one is perfect,” he said in a statement in Filipino. “What’s important is that a candidate isn’t lying. Are they corrupt? If you want, we can use a lie detector.” — Jaspearl Emerald G. Tan