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Shareholders approve Phoenix Petroleum’s planned asset sale

PHOENIX Petroleum Philippines, Inc. said on Monday that its stockholders had greenlit the listed oil firm’s unloading of certain corporate assets for its debt management and funding activities.

During the firm’s annual stockholders’ meeting on April 30, shareholders had given the authority to company management to enter into negotiations with third parties and entities under beneficial terms.

The possible transactions include the “transfer, sale, mortgage and disposal of certain corporate properties, assets or investments.”

The shareholder approval comes more than a month after Phoenix Petroleum said that along with subsidiaries, it was “open to consider any investor [who is] willing to invest and believes in the operations of the company, and can further add value to its business activities.”

Alan Raymond T. Zorrilla, Phoenix Petroleum’s senior vice-president for external affairs, business development and security, previously said that the firm was exploring how it could maximize the value of its non-core assets outside the marketing business.

“We are also looking at potential partnerships that could support and accelerate growth of our various businesses,” he said.

On Friday, Henry Albert R. Fadullon, Phoenix Petroleum president and chief operating officer, said that the firm’s financial performance for April may be “very close to pre-COVID [levels], if not pre-COVID levels, already.”

In the next five years, the company plans to focus on its retail and liquified petroleum gas businesses to drive growth.

Phoenix Petroleum’s net income attributable to the parent firm dropped 93% to P102 million in 2020 as economic activity was hampered by the global health emergency.

On Monday, its shares at the local bourse shed 0.65% or 8 centavos to close at P12.24 apiece. — Angelica Y. Yang 

House approves bill granting tax exemptions to rural banks

PHILSTAR
PHILSTAR

THE HOUSE Committee on Ways and Means has approved a proposed measure granting rural banks tax exemptions for the first five years of their operations

In a hearing on Monday, the House tax panel approved the tax provisions under a substitute bill that consolidated proposed measures that aim to strengthen the country’s rural banking system.

“The committee hereby approves the Substitute Bill to House Bills 4256, 4622, 5143 and 8359,” the committee’s chair, Albay Representative Jose Ma. Clemente S. Salceda, said on Monday.

The bill was initially approved by the House Committee on Banks and Financial Intermediaries and will be up for plenary debates once Congress resumes its session.

Based on the recommendations of the House tax committee, which were also okayed by the House banks panel during the hearing, rural banks created after the measure is enacted will be exempted from all taxes and fees, except corporate income and local taxes, for the first five years of their operations.

A surviving rural bank or consolidated rural banks due to mergers will also be exempted from all taxes, charges and fees, except for corporate income tax and local taxes, during their first five years of business.

The initial substitute bill proposed that rural banks be exempted from all taxes, fees, and charges without providing a period for the perk.

Mr. Salceda said these recommendations were made so the measure “won’t be vetoed.” — GMC

How PSEi member stocks performed — May 3, 2021

Here’s a quick glance at how PSEi stocks fared on Monday, May 3, 2021.

Manufacturing purchasing managers’ index of select ASEAN economies, April (2021)

PHILIPPINE factory activity slumped anew in April, as renewed lockdown restrictions in Metro Manila and nearby provinces hampered manufacturers’ operations and dampened demand, a survey by IHS Markit showed. Read the full story.

Manufacturing purchasing managers’ index of select ASEAN economies, April (2021)

BSP gives lenders more time to submit 2020 financial statements

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) has extended the deadline for the 2020 audited financial statements of banks and other financial institutions by two months to June 30 to give them more time to comply amid the prolonged crisis.

The BSP said in a statement on Monday that it moved the deadline by 60 days from April 30 initially to align with the new submission date set by the Securities and Exchange Commission (SEC). SEC earlier moved the deadline for 2020 annual reports to May 17 from April 15.

It also extended the validity of other relief measures until the end of 2021, including the relaxed notification requirements for changes in banking days and hours, and closures of offices; eased customer identification requirements; and waived the fees for applications on license or authority to provide electronic payments and financial services.

However, the BSP asked banks to post a notice of closure or change of banking hours on their websites, social media accounts, and areas near the affected branch.

The central bank also waived the pre-approval requirement for banks applying for a deadline extension for opening their branches and branch-lite units that have been previously approved for opening. It, however, said banks can only defer the opening of their branches for up to three years from the date of approval by the regulator.

The relief measures were outlined in Memorandum No. M-2021-029 of the BSP, which also required BSFIs to submit a report on the offices and branches that have been temporarily closed and to update on the status of the possible re-opening of the establishments.

“The package of relief measures was adopted in recognition of the evolving nature of the COVID-19 situation and the need to support BSFI (BSP-supervised financial institutions) operations to ensure uninterrupted access of clients, especially retail customers, to financial products and services,” BSP Governor Diokno Benjamin E. Diokno said.

“The BSP’s measures will complement National Government efforts to distribute financial aid and social amelioration funds to intended beneficiaries,” he added. — BML

Peso climbs on PMI data

BW FILE PHOTO

THE PESO appreciated against the greenback on Monday after data showed factory activity deteriorated in April because of the renewed lockdown.

The local unit closed at P48.05 per dollar on Monday, up by five centavos from its P48.10-a-dollar finish on Friday, based on the data from the Bankers Association of the Philippines.

The peso opened the session at P48.10 per dollar and dropped to as low as P48.135. It peaked at P48.022 against the greenback.

Dollars traded fell to $885.2 million yesterday from $1.185 billion on Friday.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort attributed the stronger peso to the contraction in the contry’s manufacturing PMI in April.

Mr. Ricafort said the data signalled slower recovery prospects for the economy especially for imports, which could dampen demand for US dollars. He added that the reimposed lockdown could further slow the recovery of imports.

Factory activity in the country declined again in April, snapping a three-month winning streak, after the extended lockdown in Metro Manila and nearby provinces hampered production and weakened demand anew, a survey by IHS Markit showed.

The Philippine Manufacturing Purchasing Managers’ Index (PMI) went down to 49 in April from 52.2 in March “to signal a marginal contraction in operating conditions across the Filipino manufacturing sector.”

Last month’s PMI went below the 50-neutral mark that separates deterioration from expansion, marking the first slump after three consecutive months of growth or since December’s 49.2.

“The peso appreciated anew as the dollar’s appeal weakened with US bond yields remaining relatively subdued,” a trader said via email.

The trader added that the local currency may depreciate against the greenback again ahead of the inflation report for April, which will be released on Wednesday, May 5.

For Tuesday, Mr. Ricafort said they expect the peso to range from P48 to P48.12 per dollar, while the trader gave a wider P48-P48.20 forecast range. — B.M. Laforga

Stocks drop as virus continues to cloud outlook

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

PHILIPPINE shares declined on Monday as investors remained cautious over the country’s economic outlook as the coronavirus pandemic continues to affect recovery prospects.

The Philippine Stock Exchange index (PSEi) declined by 1.59 points or 0.02% to close at 6,369.28 on Monday, while the all shares index inched down by 0.03 point to end at 3.923.

“The inability to sustain gains reflects investors’ low confidence towards the market, as they remain worrisome over our pandemic situation and economic outlook,” Meanwhile, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Trading became even more anemic… [this] shows that many investors are staying away from the local market due to the lingering uncertainties,” Mr. Tantiangco added.

Value turnover dropped to P4.39 billion on Monday with P3.03 billion shares switching hands, from the P8.62 billion with 6.77 billion issues seen on Friday.

“The uncertainty on the pace of the economy’s recovery is keeping the sentiment subdued,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail.

“The country’s manufacturing output contracted for the month of April, ending a [three]-month streak of growth, according to the monthly survey conducted by IHS Markit,” he noted. “It had almost no effect on the market as it was expected and already factored in, due to the tightening of quarantine restrictions last month.”

Factory activity in the country declined again last month, snapping a three-month climb, as the extended lockdown in Metro Manila and nearby provinces affected production and demand, a survey by IHS Markit showed.

The Philippine Manufacturing Purchasing Managers’ Index (PMI) went down to 49 in April from 52.2 in March “to signal a marginal contraction in operating conditions across the Filipino manufacturing sector.”

Last month’s PMI went below the 50-neutral mark that separates deterioration from expansion, marking the first slump after three consecutive months of growth or since December’s 49.2.

Sectoral indices were split on Monday. Industrials fell by 46.51 points or 0.53% to end at 8,632.84; services went down by 1.83 points or 0.12% to 1,441.28; and property lost 3.29 points or 0.1% to finish at 3,074.65.

Meanwhile, mining and oil gained 31.30 points or 0.32% to close at 9,675.59; holding firms improved by 21.11 points or 0.32% to end at 6,462.42; and financials went up by 3.53 points or 0.25% to 1,397.76.

Decliners outnumbered advancers, 111 against 83, while 56 names closed unchanged.

Net foreign selling increased to P429.45 billion on Monday from the P307.2 million in net outflows seen the previous trading day.

“Investors will remain in limbo until we see clearer signs of a resumption in the economy’s recovery,” AAA Southeast Equities’ Mr. Mangun said. — K.C.G. Valmonte

Plan to tap GOCCs for stimulus clears House panel

PHILSTAR

THE HOUSE Committee on Ways and Means has approved a proposal to tap government companies’ dividends more extensively to fund the third stimulus package.

The sourcing of funds from government-owned and -controlled corporations (GOCCs) was approved by the panel in passing the revenue generation provisions of the unnumbered substitute bill that, if approved, will enter the books as the Bayanihan to Arise as One Act, known informally as Bayanihan III, according to a statement issued by the committee’s chairman, Albay Rep. Jose Ma. Clemente S. Salceda.

The bill hurdled the House Committee on Economic Affairs and Social Services last week and will be referred to the House Committee on Appropriations.

The Ways and Means committee approved a provision authorizing the Secretary of Finance to submit a list of GOCCs to the Joint Executive-Legislative Bayanihan Council, which will then endorse the list to the President. The GOCCs on the list will be required to increase their dividend payouts beyond the 50% required by law.

The President will also have the authority to withdraw capital from GOCCs.

Mr. Salceda has called for a temporary increase in the GOCC dividend payout to 75%, which will require amendments to Republic Act 7656.

Another revenue provision approved by the committee would authorize the Bangko Sentral ng Pilipinas to make direct advances to the government in financing measures authorized by law that will address the coronavirus disease 2019 (COVID-19) containment effort.

In a separate statement on Monday, Mr. Salceda said the committee hopes to “keep the fiscal deficit in check” by identifying other sources of funds for the third Bayanihan stimulus package.

Other sources being looked at are taxes on online cockfighting and Philippine Offshore Gaming Operations, he said.

The third stimulus package, which follows the Bayanihan to Heal as One and Bayanihan to Recover as One laws, known as Bayanihan I and II respectively, is being touted as an aid package for households and industries severely affected by the economic downturn caused by the pandemic. — Gillian M. Cortez

ATI applies to raise cargo handling rates at Port of Batangas 

ASIAN TERMINALS, INC.

LISTED PORT OPERATOR Asian Terminals, Inc. (ATI) and its unit ATI Batangas, Inc. (ATIBI) have filed applications with the Philippine Ports Authority (PPA) to increase cargo handling tariffs at the Phase I and Phase II terminals of the Port of Batangas.

“The PPA will conduct a virtual public hearing on the petitions of ATI and ATIBI for upward adjustment of the cargo handling tariffs at Phase I and Phase II, Port of Batangas, respectively via Microsoft Teams” on May 7, the PPA said in a notice dated April 20.

In a copy of their sworn filing published on the PPA website, ATI and its Batangas unit, which hold the contract to operate, manage, maintain, and develop the Phase I of the Port of Batangas, said they are allowed to request rate adjustments every three years.

Citing a PPA board resolution, ATI and ATIBI said the rate of adjustment will be computed using a multiplier of 1.1523 on the current tariff.

The same formula will be used for Phase II’s rate adjustment.

The last increase at Phase I was in May 2017.

ATI, which holds a contract to operate, manage, maintain, develop, and promote the Container Terminal A-1 Phase II of the Port of Batangas, said its last increase was in November 2017.

The PPA issued Memorandum Circular No. 03-2017 on April 25, 2017, allowing an increase of 11% in the cargo handling rate in addition to the 10% provisional increase granted in 2013 at Phase I of the Port of Batangas.

For Phase II, the PPA issued Memorandum Circular No. 08-2017 on Oct. 26, 2017, allowing a cargo handling rate increase of 9% for foreign containerized cargoes.

ATI’s attributable net profit in 2020 fell 20.4% to P2.95 billion. Revenue from operations declined 17.8% to P10.96 billion.

ATI has said it is spending around P6 billion this year, mainly to acquire new cargo handling equipment and on some logistics infrastructure projects in Luzon. — Arjay L. Balinbin

Palace asks DICT to cancel free WiFi deal with SpeedCast

THE PALACE on Monday asked the Department of Information and Communications Technology (DICT) to cancel its contract with a Hong Kong-based satellite company tapped to implement the P1.3-billion free WiFi project, alleging the slow progress made in the rollout.

In 2017, President Rodrigo R. Duterte signed Republic Act No. 10929, which authorized the DICT to partner with the United Nations Development Programme (UNDP) to provide free internet access to the public.

In a televised public briefing, the President’s spokesman Herminio L. Roque, Jr. said the government was unhappy with the poor performance of SpeedCast International Ltd., noting that only about 10,000 of the 120,000 targeted free wireless internet sites have been completed.

“Tapatan lang po, mula noon hanggang ngayon eh talagang medyo nakakabahala po ang bagal nang pag-implement nitong libreng WiFi (To be honest, the slowness of the implementation from the time the project was approved has been concerning),” Mr. Roque said.

“Siyempre po, hindi tayo happy. Ang pangako natin, libreng WiFi sa lahat. Dapat magkaroon pa rin ‘yan ng katuparan sa administrasyon ni President Duterte, and we have one year to go (We are not happy because the government promised free WiFi, which it was counting on by the time President Duterte’s term ends,” he added.

In a letter to Information and Communications Technology Secretary Gregorio B. Honasan II last week, Customs Commissioner Rey Leonardo B. Guerrero said Speedcast had undervalued six of its shipments “with the assistance of the local customs broker it contracted.”

Mr. Guerrero asked the DICT to direct the UNDP to take significant action against “any foreign entity” involved in the project “which is found to have violated Philippine laws.”

“Iyan po ay iimbestigahan na ng DICT (That will be investigated by the DICT),” Mr. Roque said, referring to corruption allegations against the company. He added that officials found to have been involved will face corresponding penalties.

“Ang posisyon po talaga ng Presidente at DICT ay itigil na ang involvement nitong current contractor na foreign… at ibalik na ang pera na naibayad na sa kanila dahil pupuwede na pong ipagpatuloy ‘yan ng DICT (The President’s position is to halt the involvement of the foreign contractor and to seek the return of the money, because the DICT can take on the project from here).”

Mr. Roque noted that the DICT was able to establish WiFi in five times more sites than the contractor did from 2015 to 2019.

Citing its “recent performance,” Mr. Roque said the government is confident that the DICT will be able to establish more sites or reach its target before the President’s term expires in 2022. — Kyle Aristophere T. Atienza

HMO industry 2020 profits surge as patients defer procedures

PHILSTAR

THE health maintenance organization (HMO) industry’s profits surged 465% to P7.12 billion in 2020, with patient deferment of medical procedures outweighing the added expense of treating coronavirus victims, the Insurance Commission said.

Insurance Commissioner Dennis B. Funa said Monday that based on the industry’s unaudited financial statements, expenses of 25 out of 29 HMOs that have submitted their accounts dropped 10.2%, while revenue rose 1.4% to P52.29 billion.

“It should be pointed out, though, that the HMOs have shouldered a significant amount of the COVID-19 private medical expenses,” Mr. Funa said.

“The figures we are seeing now reflect the temporary changes in the behavior of the general public. It appears that people are deferring or postponing, if they can, medical procedures. But definitely this is just temporary. When the opportunity affords, people will have their medical check-ups and procedures,” he added.

He said seven HMOs experienced declining profits of between 23% and 730%. He did not identify the companies.

The industry’s assets grew 37.53% to P59.25 billion in 2020, while liabilities grew 28% to P45.53 billion.

“It will be noted that 33.13% of the total liabilities were unearned membership fees, which refer to fees paid in advance to the HMO industry for services not yet provided,” the regulator said.

Equity in HMOs totaled P13.72 billion in 2020, up 82.7%, following a 59% rise in retained earnings.

Mr. Funa said the financial results reflect growing awareness of HMO products and their value.

“Perhaps now during this COVID-19 pandemic, more than ever, the importance of HMO products has been highlighted… The increase in the HMO industry’s total revenue is mainly driven by its continuously growing total membership, or enrollees’ fees, which comprise 97.12% of the industry’s total revenue,” he added.

The HMO segment outperformed the insurance industry overall, with life insurers, non-life insurance companies and mutual benefit associations reporting a combined net profit of P41.24 billion in 2020, down 8.6%. — Beatrice M. Laforga

Investigation underway after corruption allegations against WiFi contractor

PHILIPPINE STAR/ MICHAEL VARCAS

THE Department of Information and Communications Technology (DICT) said Monday that it is set to investigate corruption allegations against SpeedCast International Ltd, a Hong Kong-based firm tapped to implement the government’s free internet connectivity project.

The announcement, in a statement issued late Monday, comes after the President’s spokesman Herminio L. Roque, Jr. asked the DICT to terminate its contract with SpeedCast for the P1.3-billion free WiFi project due to the slow rollout, and amid reports that the company had undervalued six shipments in its Customs declarations.

“We constituted an Investigating Task Force, and it is set to investigate the Bureau of Customs (BoC) findings on the UNDP contractor’s alleged violation of customs and other Philippine laws,” it said in a statement, referring to the United Nations Development Programme, the proponent of a global inclusive connectivity initiative.

“We will review the BoC report and the evidence presented, and call the necessary parties to our investigation.”

In a televised briefing, Mr.  Roque said it was unacceptable that only 10,000 out of the 120,000 target sites have been provided free wireless internet access nearly four years after President Rodrigo R. Duterte signed Republic Act No. 10929, which authorized the government to offer the public free internet access.

The law led to a DICT to partnership with the UNDP in 2018 to install free internet in selected public areas. 

“Based on existing records, the UNDP Pipol Konek Project was entered into in September 2018 during the early stages of the Department when the DICT still did not have the capacity to procure and implement the project on its own,” the DICT said. “As a result, UNDP entered into the picture to help implement the project and the DICT took no part in the bidding and selection process of UNDP’s suppliers, including SpeedCast.”

The DICT said itasked the UNDP to return the funds “so that DICT can fast track and continue” the project.  

The DICT said it is now capable of implementing the project without involving its current partners, noting that it was able to activate more than 4,000 sites on its own. 

“Under our leadership, we are more than capable of finishing the project,” it said. — Kyle Aristophere T. Atienza

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