THE central bank is widely expected to maintain key policy rates at record low levels on Thursday, as it waits for fiscal policy to do its part in quelling the recent spike in inflation. Read the full story.
By Jenina P. Ibañez, Reporter
THE decline in electronics exports last year exceeded industry projections after an anticipated rebound in demand failed to materialize.
Electronics exports fell 8.8% to $39.67 billion in 2020 from the revised $43.29 billion the previous year, data from the Philippine Statistics Authority showed.
Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said the accelerated recovery did not happen as expected after the decline exceeded the industry group’s projection of a 5% drop.
“Demand did not materialize,” he said in a mobile message last Monday.
SEIPI revised its projection to a 5% drop in November, basing the decline on the high cost of operations as firms shouldered employee transportation in response to coronavirus disease 2019 (COVID-19) restrictions.
The initial projection was a much steeper 20% contraction, but SEIPI had said that prospects were improving as demand for industrial, mobility, consumer, and medical electronics increased and the global economy began its recovery.
Shipments of electronic goods make up a bulk of Philippine total goods exports, accounting for 62% of the value of exports last year. SEIPI combines “electronics products” and “other electronics” in its assessments of government data.
Mr. Lachica said that he does not expect last year’s demand shortfall to have a significant effect on the 7% growth target this year.
Some companies, he said at an online meeting last week, expect to grow by as much as double digits this year. In a mobile message, Mr. Lachica indicated that automotive, commercial, communications, and medical electronics demand will drive growth.
“In terms of our export market destinations, the top ones are Hong Kong — as you know Hong Kong is a hub, and from there it goes to North America, China, and Europe. Next to Hong Kong, we have US, China, Japan, Singapore, and Germany,” he said.
Most imports come from China, Taiwan, Japan, Singapore, Korea, and the United States.
Electronics exports jumped by around 4% in 2019 after hardware demand for new technologies like 5G, wearable, Internet of Things, collaborative robots, and virtual reality drove up overall demand.
The pre-pandemic 2020 target was 5% growth.
MAXUS PHILIPPINES is further upping the ante in the war for your crossover cash. Last Friday, it digitally presented the D60 compact crossover — said to be a vehicle boasting “affordable luxury and utility.”
In a speech, AC Motors President for the Automotive Group Toti Zara described the D60, the fifth release of Maxus here since opening shop in June 2019, as a milestone that also underscores what brand means for the Ayala-led group.
“The Maxus brand strengthens the commercial vehicle lineup (of the) business. It fits well in complementing our other brands. We are confident commercial vehicle segments, pickups, vans, and trucks will recover in 2021 despite recent safeguard measures imposed by government. Over the past five years, commercial vehicles grew from 25% of total industry to 34% in 2020,” said the executive.
The company is banking on the D60 compact crossover to help drive its business in 2021, and new Maxus Philippines General Manager Jun Cajayon expressed hope that the model will attract attention via a particularly compelling value proposition. “We’re hitting subcompact pricing (with our compact product),” he said. The D60 is priced at P1.148 million for the 1.5T Pro variant (a five-seater), and P1.258 million for the 1.5T Elite (seven-seater).
Another Maxus model is set to be unveiled in the near future, with three more depending on how the year pans out. Speaking of, the company has set lofty goals for itself in 2021. “We are going for five times our volume (in 2020),” continued Mr. Cajayon. The company registered around 200 units in sales last year, so this year that number is expected to breach the 1,000-unit mark. The G10, T60, and G50 have been the main sales drivers in the past and now, the D60 is expected to take its place “as a critical player in terms of volume.” In fact, it is expected to crack the top three for Maxus.
If you like what you see in the D60, don’t waste time hemming and hawing. With the imposition of the controversial safeguard duty on imported vehicles, those prices will keep only while supplies last. Mr. Cajayon said the company was lucky it had imported around 100 units of the D60 before the additional tariff.
Both trims of the SUV are powered by a four-cylinder inline 1.5-liter turbocharged gas engine mated to a seven-speed dual clutch automatic transmission. The system generates 169ps and 250Nm and said to be “configured for performance and fuel efficiency.”
Maxus points out that the D60 is effectively the longest crossover in its class, and is but “70 to 80 millimeters shorts of some full-size SUVs.” It gets a slew of active and passive safety systems: electronic stabilization program, electronic parking brake with auto hold, cruise control, front dual and side air bags, reverse camera, a tire pressure monitoring system, rear park distance control, and additional front park distance control for the Elite variant. Maxus employs double layer welding technology to ensure the “overall strength and quality of its exterior structure.”
The D60 variants have an eight-inch (almost upright tablet-like) infotainment screen and feature rear air-conditioning. The Elite receives keyless entry and a push-start system, leather seats, and folding side mirrors.
For more information, like and follow the Maxus Philippines Facebook page and Instagram account (maxusph).
By Revin Mikhael D. Ochave, Reporter
THE Securities and Exchange Commission (SEC) has approved guidelines that will further promote transparency in the ownership of corporations, which could help prevent money laundering and terrorist financing in the Philippines.
In a memorandum circular, the corporate regulator provided measures such as prohibiting the issuance of bearer shares, and requiring the disclosure of the identity of beneficial owners or persons who own or control corporations.
SEC Chairperson Emilio B. Aquino said illicit activities such as money laundering and terrorist financing usually come from arrangements that let shareholders or members hide their identities, thus increasing the risk of being misused.
“The newly issued guidelines will provide the commission with adequate, accurate, and timely information to combat such unlawful activities, while cementing our commitment to international standards and best practices against money laundering and terrorist financing,” Mr. Aquino said.
Under the memorandum, the SEC mandates that no corporation or entity can issue, sell or offer for sale or distribution bearer shares and bearer share warrants, where the name of owners are not indicated in the physical stock certificate and not recorded in the stock and transfer book of the issuing corporation.
“Bearer shares are equity securities owned by a certain person or entity that holds the physical certificate, which enables the transfer of ownership of shares of stock by mere delivery of such certificate,” the SEC said.
“Bearer share warrant is a document certifying that the bearer is entitled to a certain amount of the fully paid shares of stock of a corporation,” it added.
Further, the new guidelines require corporations, aside from publicly listed companies, to disclose and record the alienation, sale or transfer of shares of stock in their stock and transfer book within 30 days, including the date and the persons involved in the transaction.
According to the SEC, the new guidelines also prohibit the payment of dividends to any person or entity unless the name is indicated in the records of the corporation as the owner of the said shares of stock.
However, it does not include dividend payments made by publicly listed companies to the Philipine Central Depository nominee or any similar entity certified to be the depository and custodian of shares used for trading in the stock exchange.
“The guidelines likewise require newly registered corporations to disclose the identity of the persons on whose behalf they were registered and the nominators/principals of nominee incorporators/first directors/trustees and shareholders within 30 days from receipt of their certificates of registration,” the SEC said.
Meanwhile, the SEC said nominee directors, trustees, and shareholders of existing corporations are required to disclose their nominators and principals within 30 days after the guidelines take effect, or 30 days from the time they assumed the roles in their respective companies.
The commission also mandates all corporations to keep sufficient and accurate data on their beneficial owners at their principal offices.
“Noncompliance shall be sanctioned with a fine of P5,000 to P2 million, plus up to P1,000 for each day of continuing violation but not exceeding P2 million; suspension or revocation of the certificate of incorporation; and other penalties the commission may impose,” the SEC said.
The SEC said the new guidelines meet the recommendations issued in a report by the Financial Action Task Force (FATF) in October 2019.
Some of the FATF’s recommendations include the creation of measures that will avoid the misuse of bearer share warrants, nominee directors, and nominee shareholders for money laundering and terrorist financing, and to ensure that mechanisms work to ensure that data on a company’s beneficial ownership can be found out in a timely manner.
IT’S BEEN a long while since I last frolicked around Tagaytay. Last year’s volcanic unrest, and the subsequent imposition of the enhanced community quarantine (ECQ) have left me with little opportunity to revisit this weekend favorite. So, I was happy to finally have the chance for a quick rendezvous to the lovely Escala Hotel there; and even happier that the vehicles I had to drive back and forth were the handsome 2021 BMW X5 and X7 SUV siblings.
X5
I set out from BMW’s Libis dealership driving the X5 luxury midsize SUV, which I’ve always found to be a model with a good blend of luxury and practicality. From the get-go, it is self-evident that the car is made with good workmanship, and with quality materials — one of the main reasons why I would ever consider paying extra to acquire a premium vehicle in the first place. The car has a classy, leather-wrapped dashboard, boasts Vernasca leather design-perforated upholstery, and is equipped with a plethora of technology. It now supports wireless Apple Carplay and offers power-adjustable front seats with memory (for the driver), among others.
Moreover, the X5 has a nice, strong engine. Its 3.0-liter BMW TwinPower turbodiesel powerhouse, mated to an eight-speed automatic tranny, will not disappoint — offering an athletic 265 horses, combined with an impressive 620Nm of maximum torque at 2,000-2,500rpm. While you might think that this diesel powerplant could compromise vehicle NVH (noise, vibration, and harshness), you’ll be delighted to know that BMW really did its homework when it built this car. It has very good insulation; you’ll forget you’re driving a diesel, and hardly hear any outside noise, for that matter. This afforded me a relaxed and pleasurable drive through C5 and into the SLEX, en route to Tagaytay.
Oh, and remember that one particular lane along C5 with those horrible patches of bad pavement (because they’ve been constantly pounded by heavy trucks)? I occasionally found myself driving over them in morning traffic, but the X5’s suspension soaked them up easily. I also took the liberty of experimenting with the X5’s different drive modes, depending on the situation: Eco Pro, for that morning traffic crawl; and Comfort Mode, for the rest of the faster-moving stretches of C5. Needless to say, Sport Mode was my favorite — the SUV’s anticipation to go faster was especially fun on the highway. It also allowed me to overtake vehicles easily and with greater confidence. Furthermore, I noticed the X5 did not lose its poise even when going through fast corners.
It took us about two hours to arrive at Escala Hotel, where we had a satisfying lunch (that came in big portions) amid cool weather and a dearly-missed view of Tagaytay Lake. After our pleasant meal, the X7 was waiting.
X7
Now, I knew the X7 would be good. But frankly, I didn’t expect it to be this good. For starters, I am not someone who gravitates towards large, full-size vehicles, and the X7 is the largest luxury SUV that BMW has. But the X7 is just exceptionally comfortable and luxurious — it actually got me thinking why the phrase “woman cave” was never coined to describe large wonderful vehicles. That is, until I realized that the combination of words didn’t exactly sound appropriate. Nevertheless, you get what I’m trying to say here — it felt like the X7 had everything I would ever need to be happy while on the road.
As a driver, I was delighted with the X7’s quick bursts of acceleration and ultra-smooth power. The car sailed like a boat, and that must have been its adaptive two-axle air suspension at work. There was nothing to complain about NVH; the cabin was quiet as a reading room, but only more comfortable to be in. Opulent appointments constantly reminded me that I was aboard a luxury vehicle. Attractive Merino upholstery and fine wood trim accents give the cabin sophisticated flair; while the panoramic sunroof and other bells and whistles — such as the crystal shifting knob, that exudes that extra bling — all come together to pamper the driver and its occupants. I wouldn’t mind getting stuck in traffic for long hours in this car, I remember telling myself. And if some vehicles, in the words of a friend, were meant to “Manila-proof” you from the inconveniences of the city, well, this sure is one of them.
The BMW X7 is packed with technology (including a rearview camera with surround view and the like), a suite of safety systems, a BMW Live Cockpit Professional, and BMW laser lights. It shares the same twin power turbo inline six-cylinder diesel engine as with the X5 but, for some reason, just feels ever so much smoother to drive.
Sure, there was more traffic on our way back to Manila. But with the X7’s Harman Kardon surround sound system, I savored every minute driving it back, while tuning in to ’80s music and enjoying the entire drive experience. It really does make a huge difference, after all. A luxuriously pleasurable car can help keep your spirits high, as you navigate through your daily drive in our otherwise high-stress environment of the city.
By Angelica Y. Yang
BUSKOWITZ Energy is looking at raising around P1 billion for solar rooftop projects this year, about 40% of which would be funded by a local company, the renewable energy developer’s top executive said.
“Our initial idea is to raise a billion [pesos], maybe a little less, given that it’s already February. [Our] target is to invest about 800 to 1 billion [pesos] this year,” the firm’s Chief Executive Officer James Buskowitz told BusinessWorld in a video call Thursday.
The projected capital raising is more than twice the previously recorded amount in 2019. “In 2019, we raised about 300 [to] 400 million [pesos]… every two years, we’ve almost doubled our capital raises,” he said.
Mr. Buskowitz said that the firm did not raise capital in 2020, as the company was spending funds raised from previous years for services, including outright purchase and residential projects.
He explained that the firm planned to raise 40% of the target fund-raising from a local firm, adding that Buskowitz Energy would disclose more information about the infusion in the coming weeks.
According to Mr. Buskowitz, 60% of the firm’s planned capital will come from foreign banks and wealth funds.
“We’re currently discussing with foreign international banks and sovereign wealth funds, the debt component of the projects. So far, we have ongoing discussions with them and it’s between two other international financiers that are going to be providing the debt. We’re looking at around 500 to 600 million [pesos] in debt capital for projects as an initial start,” he said.
This year’s planned capital-raising would mainly go to rooftop solar projects, Mr. Buskowitz said.
Last year, Buskowitz Energy was able to install a total capacity of 5 megawatts of solar in the residential and commercial segments.
In November, the firm held a three-day “Black Friday Sale” that gave a 40% discount for its signature Solar Home Systems per package, with rates starting at around P119,000.
On Thursday, Mr. Buskowitz said that the sale accounted for 30% to 40% of the firm’s sales in the residential segment last year.
“The Black Friday Sale was very effective… That was very, very successful and it was also a very good discount. It’s something that we would like to be offering a lot more,” he said.
Buskowitz Energy is a sustainable solutions company that aims to grow local capabilities in the country’s solar photovoltaic industry.
RATES of Treasury bills (T-bills) on offer this week will likely move sideways ahead of the government’s sale of three-year retail Treasury bonds (RTBs).
The Bureau of the Treasury (BTr) is looking to raise P20 billion from the T-bills on offer on Monday, broken down into P5 billion each via the 91- and 182-day debt papers and P10 billion from the 364-day instruments.
Rates of the short-term debt will likely inch down by 5 to 10 basis points (bps) amid abundant liquidity in the market, a bond trader said by phone on Friday.
Meanwhile, another trader said the auction would still attract lower yields despite the upcoming RTB sale this week as there is strong demand for the shorter-tenored T-bills.
“Yields for T-bills will move sideways to down by around 5 bps since end-users are still looking to purchase T-bills. For now, traders may limit trading short-term bonds until the rate setting of the RTB,” the trader said via Viber over the weekend.
The BTr last week hiked the volume of T-bills it awarded to P24 billion from the P20-billion program as total bids reached P103.65 billion and rates declined across the board.
Broken down, the BTr borrowed P7 billion via the 91-day debt, more than the P5-billion plan, from P19.56 billion in bids. The three-month papers fetched a lower average rate of 0.917% against the 0.969% quoted in the Jan. 25 auction.
The government also raised P7 billion via the 182-day T-bills, above the P5-billion program, as tenders amounted to P33.456 billion. The average rate of the six-month debt declined by 11.3 bps to 1.21% from the previous week’s rate of 1.323%.
The Treasury, meanwhile, made a full P10-billion award of the 364-day securities it offered at an average rate of 1.492%, down 5 bps from 1.542% previously.
Meanwhile, the BTr will hold the rate-setting auction for the three-year RTBs on Tuesday as it looks to raise at least P30 billion from the retail papers. It will offer the bonds in denominations of P5,000 from Feb. 9 to March 4, unless ended earlier.
The second trader expects the rate of the three-year bonds to range from 2% to 2.375%.
“The issuance comes at a time when inflation for the previous month was higher than the expected consensus and above the target range of the BSP (Bangko Sentral ng Pilipinas),” the trader said.
The government offers RTBs to encourage small retail investors to invest, with higher returns than prevailing market rates. These are also considered low-risk investments because they are backed by the state.
At the secondary market on Friday, the 91-, 182, and 364-day T-bills were quoted at 1.041%, 1.204%, and 1.416%, respectively, while the three-year tenor fetched 2.074%, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.
The second trader said yields on government securities on offer this week will also be affected by rising interest rates in the United States as markets await the $1.9-trillion stimulus package of US President Joseph R. Biden, Jr.
“This may be offset by slower local loan growth since banks remain wary of credit risks and some banks may be looking to place excess liquidity in safer assets,” the trader added.
Bank lending contracted for the first time in more than 14 years in December as lenders tightened credit standards while demand for loans remained weak.
Latest central bank data showed outstanding loans by big banks went down by 0.7% to P9.178 trillion that month from P9.242 trillion a year ago, turning around from the 0.5% uptick in November. It was the first decline since September 2006’s 1.9% contraction.
The BTr plans to borrow P140 billion from the local debt market this month: P80 billion via weekly auctions of T-bills and P30 billion from a Treasury bond offer.
The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — B.M. Laforga
TIME passes. The 525,600 minutes of 2020 are now in the past, and the passing of the 525,600 minutes of 2021 are being marked on our watches. For some, the passing of time is marked on luxury watches like those that LVMH showed in a virtual press conference in the last days of January.
HUBLOT’S MAGIC GOLD
Standing outside the Hublot offices in Switzerland, Ricardo Guadalupe, CEO of Hublot, bade us to “step inside.” Press from around the world, sitting at their desks, followed Mr. Guadalupe as he stepped into different rooms in their manufacture. He started out in the room where they make the “magic” gold they developed that is scratch-resistant thanks to combining 24k gold and ceramics.
Here he showed the Big Bang MP-11, with seven barrels that serve as a 14-day power reserve. This power is displayed with a clear case. Next came the Unico Integral, with a case and bracelet made of ceramic. The new lines come in gray metallic finish, navy blue, and white.
Mr. Guadalupe took his virtual guests to the room where they add jewels in watches, showing the Big Bang One Click, named after the ease with which its straps are replaced. Next, appearing over at a sculpture by Richard Orlinski, he showed the Classic Fusion line, made in collaboration with Mr. Orlinski, boasting a sculpted dial. While the first collection had come out in 2017, these have their dials and bracelets in black and blue ceramic — and are limited to 200 pieces.
Finally, Mr. Guadalupe showed us their new development, a new color of sapphire: orange. The orange sapphires are made in the shape of watch components, which will be made into the Big Bang Tourbillon Automatic. “Innovation, specifically in materials, is very important for me,” he said.
TOURING ZENITH
Zenith was the watch of choice for India’s national icon Mahatma Gandhi.
Julien Tornare, CEO of Zenith, also took us on a tour of their offices, showing the Chronomaster Sport, capable of displaying 1/10th of a second, using the El Primero chronograph. The El Primero A386 serves as an older sibling for this Chronomaster Sport, but the Chronomaster also takes inspiration from other Zenith lines, such as the El Primero Rainbow and the de Luca. It measures about 41mm, crafted in steel and is set with a black ceramic bezel.
Mr. Tornare also introduced their new ambassador, 2020 NFL MVP Aaron Rodgers, during the tour.
BULGARI’S BEAUTY
The creation of beauty doesn’t stop for Bulgari, not even during a pandemic.
Antoine Pin, Bulgari General Manager for Bulgari Horlogerie, showed an even grander Bulgari Serpenti (the ovoid head and coiling bracelet should make you think about serpents). The new Serpenti Spiga has a new pattern on the bracelet, suggesting scales — except these are studded with diamonds.
They’ve also added to the Divas’ Dream collection with the Peacock Dischi and the Tourbillon Lumiere. The bezels are studded with diamonds and precious stones, but the dial is even grander: they’re made of a marquetry of peacock feathers, shown during the press conference as being assembled by hand.
Meanwhile, CEO Jean-Christophe Babin showed what else has been keeping the company busy over the pandemic: the Bulgari Virus Free Fund. The fund has donated 800,000 bottles of sanitizer (made using the resources at their perfumery) to the governments of Italy, the UK, and Switzerland. Through their funding, they have also helped Oxford University develop the Oxford-AstraZenecea vaccine; and they continue to fund research at Rockefeller University.
Discussing how the business fared during the pandemic, Mr. Babin said, “We have managed not only to do good but to do much better than the market,” noting that they closed 2020 on a note of growth in watches. “2021 will for sure be better than 2020,” he said. — Joseph L. Garcia
THE FORD RANGER became the best-selling 4×4 pickup truck in 2020, cornering 41% of the market. Ford Philippines reported full-year sales of 5,093 units for the Ranger 4×4 pickup — accounting for 52% of the total 9,767 Rangers sold.
In a release, the company said this model helped drive Ford’s overall market share to 24% in the pickup segment, securing the Ranger’s position as one of the two best-selling pickups in the market last year. Ford currently offers a 4×4 variant for the Ranger XLS, FX4 and Wildtrak, including the Ranger Raptor, in its pickup portfolio.
Ford Philippines expanded its truck portfolio last year with the launch of the new Ranger FX4 and a 4×4 variant. It also mounted a successful comeback in the small SUV segment with the launch of the all-new Ford Territory — whose full-year sales reached 1,925 vehicles, good for 33% share in the small SUV segment within five months of launch.
Further expanding its footprint in the SUV and pickup segments in the country, Ford also launched the Everest Trend, Everest Sport, and F-150 full-size pickup last year to cater to a diverse range of Filipino customers.
Ford Philippines reported that its fourth-quarter sales surged 36% from the previous quarter to 5,411 vehicles, on the way to a total of 14,775 units.
“We thank our customers for their trust to the Ford brand amid a challenging year brought about by the pandemic. The continued demand for Ford vehicles in the country further drives us to bring segment-leading vehicles that are relevant to the needs of the Filipino driving public, now and in the future,” said Ford Philippines Managing Director PK Umashankar.
By Arjay L. Balinbin, Senior Reporter
THE Philippine Ports Authority (PPA) said it had released about 97% of the allocated budget for the financial assistance for the shipping companies or operators that had been critically impacted by the coronavirus pandemic.
The amount of funds used as of Jan. 26 was P7,458,965.75, according to PPA data that the agency provided to BusinessWorld on Jan. 29.
The amount was released to 4,068 beneficiaries, the PPA said.
Based on the PPA Memorandum Circular No. 42-2020, the agency was given P250 million under the Bayanihan Act II or Republic Act No. 11494 for the implementation of the assistance for the maritime sector.
Qualified beneficiaries can avail of the financial assistance until June 30 this year, according to the latest memorandum circular issued by PPA General Manager Jay Daniel R. Santiago on Jan. 28.
Eligibility requirements for shipping companies or operators include a valid certificate of public convenience, provisional authority, or special permit from the Maritime Industry Authority, and a valid accreditation certificate issued by the PPA.
Shipping companies or operators who have pending applications for accreditation are also eligible to avail of the financial assistance “unless otherwise said applications have been denied by the PPA.”
The Philippine Liner Shipping Association President Mark Matthew F. Parco previously said the domestic shipping industry, like other industries, was “taken by surprise by the speed and breadth” of the impact of the coronavirus pandemic.
HOGS RAISERS from the Visayas, Mindanao, and parts of Luzon have launched deliveries of live animals to Metro Manila, in order to help head off an inflation crisis in the capital region following a spike in food prices, the Department of Agriculture (DA) said.
In a recent visit to Region 12 or SOCCSKSARGEN, Agriculture Secretary William D. Dar announced the departure of two truckloads of hogs, with 260 animals on board, to Metro Manila.
“The hogs, courtesy of the Koronadal Valley Livestock Growers, are expected to arrive at Manila ports early next week,” Mr. Dar said.
Mr. Dar confirmed that growers in the Visayas, particularly Iloilo, recently shipped 600 live hogs to plug shortages on Luzon, where the herd has been greatly reduced by African Swine Fever and the associated culls to contain the outbreaks.
“With these initiatives, we are helping the hog raisers and those involved in the supply chain to earn, while providing consumers access to affordable meat and meat products,” Mr. Dar said.
Mr. Dar said a possible source from within Luzon is San Jose, Batangas, whose growers are being sounded out about supplying the Metro Manila market.
According to the DA, there are around 41,953 animals available from San Jose.
The DA has received commitments from the South Cotabato Swine Producers’ Association for the transport and delivery of live hogs and carcasses to Luzon, with an initial agreement of 10,000 hogs per week.
Executive Order (EO) No. 124 set a price ceiling on pork and chicken products sold in Metro Manila, and will take effect on Feb. 8, Monday.
The EO set the retail price of pork shoulder, known as kasim, at P270 per kilogram, and pork belly or liempo at P300. The ceiling for dressed chicken was set at P160. — Revin Mikhael D. Ochave
THE CENTRAL BANK is allowing financial institutions to set their own minimum balance for investment management accounts provided this is not lower than P100,000, making these products available to more people.
Circular No. 1109 signed by Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on Feb. 4 revised the P1-million minimum balance for investment management accounts based on standards under the Manual of Regulations for Banks and for Non-Bank Financial Institutions.
“BSP-supervised financial institutions should consider the adequacy of their risk management processes and operational capabilities in setting the minimum amount for their investment management accounts,” it said.
The circular now allows for a lower investment amount provided the carrying balance and contribution will not fall below the minimum investment required, except in cases where the reduction is due to investment losses and/or fund management fees.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the easing of rules on investment management accounts will help push financial inclusion.
“More people would have greater access to more sophisticated and professionally managed investment funds with prospects of higher returns commensurate with higher risks involved,” Mr. Ricafort said in a text message.
Companies will also benefit from the revised rules, Mr. Ricafort said.
“This initiative is also part of further development of the country’s capital markets, allowing more of the investing public to tap funds that invest in various securities that are alternative sources of financing for many businesses,” he added.
The BSP circular also allows the commingling of funds from different investment management activities as long as P100,000 is allocated for each activity.
Funds are allowed to be channeled into investments in local and international government securities, exchange traded equities, and commercial papers registered with the Securities and Exchange Commission. Securities issued by local banks, except those through trust units, are also allowed.
“The risks associated with commingling of funds, such as market liquidity risk, shall be fully disclosed to the clients,” it said.
The investment manager is expected to be in charge of determining how many activities can be commingled based on its operational capability.
Withdrawals from the account are allowed as long as the minimum balance of at least P100,000 is maintained and an order has been given to the investment manager. — L.W.T. Noble
