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Philippines set to take rare, top spot for IPOs in Southeast Asia

MANILA/SINGAPORE – A clutch of Philippine firms, including newly launched real estate investment trusts (REITs), could make the country Southeast Asia’s biggest IPO market this year, driven by attractive valuations and a recovering economy.

Investors and bankers say consumer retailers and REITs are lining up record fundraisings that could top $4 billion in 2021, more than the combined tally of the last seven years, according to Refinitiv data.

Across the rest of the region, only a $2 billion Singapore IPO by a subsidiary of Thai Beverage, smaller floats in Indonesia and insurance IPOs in Thailand, are among those lining up for launches this year.

“We see a confluence of abundant liquidity, recovering macro fundamentals and relative valuation attractiveness contributing to the positive investor sentiment towards Southeast Asia IPOs,” said Martin Siah, Southeast Asia head of corporate and investment banking at Bank of America Merrill Lynch.

“The strength in global capital markets has made it very attractive for quality Philippine issuers who have been timing their eventual IPOs.”

A $1.5 billion float by Singapore sovereign fund GIC-backed Monde Nissin, the company behind the iconic local instant noodle brand Lucky Me! and meat alternative Quorn, is set to be the biggest local IPO, sources familiar with the matter said.

Others include two $500 million REITs, from conglomerate-owned SM Prime and Robinsons Land, sources said.
“It is really a question of when, not if. On the size, it depends on what the market can absorb,” Alex Pomento, vice president for investor relations of SM Prime, told Reuters.

A long-pending $1.5 billion IPO from National Grid Corp of the Philippines (NGCP) to comply with regulatory requirements is also expected, though sources said the process could be pushed to next year.

Robinsons Land did not respond to a request for comment. NGCP declined to comment while calls to Monde Nissin were unanswered.

Issuers are keen to take advantage of the abundant market liquidity and tap investors before next year’s presidential elections that could create market volatility.

“Companies are willing to fund expansion. That is what we did not experience last year when a lot of them held back on expansion plans, borrowing and IPOs,” said Michael Gerard Enriquez, CIO of Sun Life of Canada (Philippines).

The economy slumped by a record 9.5% last year, the worst contraction in Southeast Asia for 2020, as Philippines enforced one of the world’s longest and strictest pandemic-induced lockdowns.

The government’s record $93.7 billion national budget is expected to pump-prime the economy, which is targeted to grow by 6.5-7.5% this year, government officials say.

A strong performance of IPOs launched last year is also supporting new issues despite the broader market falling 9% last year.

“I assume these will be well-received. They will be a play on high growth and consumption and economic dividends,” said Eduardo Francisco, president of BDO Capital and Investment Corp, referring to potential IPOs of Monde Nissin and NGCP.

This year, about four property units are set to launch REITs, an emerging asset class, after new rules announced last year allowed lower public floats and tax breaks for REITs, which typically pay higher dividends to investors.

“Given the attractiveness of REITs as an investment and the robust real estate market fundamentals in the Philippines, we are expecting to see more REIT IPOs come to the market,” said BofA’s Siah. — Reuters

House targets to approve emergency vaccine procurement bill by Monday

HOUSE SPEAKER Lord Allan Jay Q. Velasco said the proposed measure that will expedite the procurement of coronavirus disease 2019 (COVID-19) vaccines by local government units will be approved next week, with lawmakers rushing to pass the measure after President Rodrigo R. Duterte certified it as urgent.

“With President Rodrigo Roa Duterte certifying the measure as urgent, the House is expected to approve House Bill 8648 on second and third reading by Monday,” Mr. Velasco said in a statement on Friday.

House Bill 8648 or the proposed Emergency Vaccine Procurement Act of 2021 was filed earlier this month by Mr. Velasco. The bill was sponsored on the floor by Quirino Rep. Junie E. Cua and Albay Second District Rep. Jose Maria Clemente S. Salceda on Wednesday.

On Thursday, Mr. Duterte certified the indemnification fund bills of both houses of Congress as urgent. Section 6 of House Bill 8648 covers the indemnification fund that will cover any adverse reactions of people who will be vaccinated against the virus.

The measure will also allow LGUs to procure vaccines without having to undergo the bidding process under the Government Procurement Reform Act. The LGUs will need to collaborate with the Department of Health and the National Task Force against the COVID-19 in the procurement of vaccines.

The procurement, importation, storage, transport, distribution, and administration of the COVID-19 vaccines by the LGUs will be exempted from customs duties, value-added tax, excise tax, and other fees. — G.M. Cortez

Fewer firms applying for gov’t loan program

FEWER small businesses have been applying for the government’s P10-billion loan program amid low business confidence, the Department of Trade and Industry (DTI) said.

DTI Secretary Ramon M. Lopez said small businesses fear inability to pay back loans as customer demand is still down.

Loans released by the DTI’s Small Business Corp. (SB Corp.) COVID-19 Assistance to Restart Enterprises (CARES) program has reached over P2 billion for more than 20,000 applicants, he said at a briefing on Friday.

The department was allocated P10 billion for lending to micro, small, and medium-sized enterprises under the Bayanihan to Recover As One Act or Republic Act No. 11494. Prior to the implementation of Bayanihan II, the agency also had around P1 billion in initial funds.

Industry group Tourism Congress of the Philippines (TCP) last month said there should be more efforts to help businesses avail of government assistance, including business loans and cash-for-work programs for tourism workers.

Tourism businesses have been hesitant to apply for said loans, TCP President Jose C. Clemente III said.

The DTI, Mr. Lopez said, is promoting the program to encourage more businesses to avail of loans, adding that there is no backlog of loan applications.

Loan request evaluations take seven business days through the online and phone verification process, the department said last week. — Jenina P. Ibañez

DoLE eyes additional budget for proposed wage subsidy program

THE DEPARTMENT of Labor and Employment (DoLE) said it will need over P180 billion at most to implement its proposed wage subsidy program.

Labor Assistant Secretary Dominique R. Tutay said in a virtual briefing on Friday that the department has submitted its request to the Department of Budget and Management for review, noting the proposals indicated estimated budgets if the DoLE will subsidize 25%, 50%, and 75% of workers’ wages.

“If we will shoulder 25% of the average wage, P62 billion ang pinakababa na request. Ang pinakamataas nasa P188 billion, that would cover 75% of the average monthly wage rate,” Ms. Tutay said.

She added that the budget proposal was based on the average wages of workers from different industries. She said the subsidy will be around P7,000 to P11,000. The wage subsidy program will run for three months.

She said the Labor department does not have any budget in its national spending plan for 2021 that could be allocated four the program.

Meanwhile, Ms. Tutay said the DoLE has assisted 3.9 million workers through its financial assistance programs since the onset of the lockdown last year which affected millions of employees both here and abroad.

Around 1.7 million formal sector workers were given assistance through the COVID-19 Adjustment Measures Program, while 461,757 overseas Filipino workers were paid financial aid through the Abot Kamay ang Pagtutulong Program.

Over 1.7 million displaced informal sector workers were given emergency employment and assistance through the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers program. — G.M. Cortez

DoE issues guidelines for certification of energy efficiency professionals

THE DEPARTMENT of Energy (DoE) on Friday has listed down the guidelines for the assessment, registration and certification of energy conservation officers who cover establishments that consume more than 500,000 per kilowatt-hour (kWh) per year.

These come around eight months after the department held a virtual public consultation on the draft guidelines for the certification of energy efficiency professionals.

In a department circular published on Friday, the DoE formalized qualifications for certified energy conservation officers (CECO), certified energy managers (CEM), and energy auditors (EA).

“We envision that these formal certifications would not only professionalize high-level energy management learnings but would also generate greater employment opportunities for energy efficiency practitioners across all sectors,” DoE Secretary Alfonso G. Cusi was quoted as saying in a statement.

The circular stated that CECOs would cover Type 1 designated establishments (DEs) or those that consume between 500,000 kWh to 4 million kWh per year. The CECO must have at least two years of experience in the maintenance of energy-consuming machines and facilities for DEs under the Type 1 designation.

CEMs are required to supervise and manage Type 2 DEs or those with a yearly power consumption of more than 4 million kWh. A CEM must have at least three years of experience in the maintenance of energy-consuming machines and facilities for Type 2 DEs.

Meanwhile, the EA must have at least one year of experience on handling energy audits.

The DoE and the Technical Education and Skills Development Authority (TESDA) would be in charge of developing the training module for the CECO and EA certification.

The department said it will consult with stakeholders, including those from the engineering sector and training institutions, to create the system for CEM certification.

In its circular, the DoE said it will coordinate with the Commission on Higher Education (CHED) on the integration of energy management topics in existing engineering courses.

“The DoE will provide the schedule for the approved certification process upon the finalization of the training regulations and course subjects,” the department said in a statement.

The circular on CECO, CEM and EA certification will take effect 15 days after its publication in two newspapers of general circulation. — Angelica Y. Yang

BCDA opens bidding for first phase of national fiber backbone

THE BASES Conversion and Development Authority (BCDA) has issued an invitation to bid for the design and construction of the first phase of the national fiber backbone.

The P1.25-billion contract under the Department of Information and Communications Technology (DICT) requires works to be done in 200 calendar days, BCDA said in its invitation published on Wednesday.

The DICT’s national broadband program has six components: the national fiber optic cable backbone, cable landing stations, accelerated tower build, accelerated fiber build, satellite overlay, and broadband delivery management service.

Prospective bidders must have done similar projects with a contract of at least half of the approved budget.
Interested bidders must pay a non-refundable P75,000 fee.

BCDA will hold a pre-bid conference on Feb. 26 at its Taguig office, after which bids must be submitted by March 15.

“Bidding is restricted to Filipino citizens/sole proprietorships; and partnerships, corporations, organizations, consortia or joint ventures with at least 60% interest or outstanding capital stock belonging to citizens of the Philippines,” BCDA said. — J.P. Ibañez

Cases of new COVID-19 mutations unlikely to delay relaxing of quarantine rules

THE designation of the two new coronavirus mutations found in Central Visayas as a new Philippine variant “remains to be seen,” according to the top official of the Philippine Genome Center (PGC).

“(We will probably) know in the next few weeks,” PGC Executive Director Cynthia P. Saloma said in a press conference on Friday.

Health Secretary Francisco T. Duque III said this new development is unlikely to affect the planned transition of the country, including the capital Metro Manila, towards more relaxed quarantine rules that will open more economic activities.

Nonetheless, Mr. Duque cautioned that “we have to be careful in the transition,” and appealed to the public to continue following the minimum health requirements such as wearing of face mask and distancing.

The two new SARS-CoV-2 mutations of potential clinical significance were detected in samples sequenced last week from Central Visayas, the Department of Health (DoH) and the PGC confirmed on Thursday.

The new mutations, labelled E484K and N501Y, “exhibited only mild symptoms,” but it is too early to tell whether or not these mutations “will have significant public health implications,” the agencies said in a statement.

The Health department also explained that it is natural for viruses to undergo mutations “as they reproduce, both within the human body and when they are transmitted from one person to another,” but that “not all mutations and variants necessarily cause negative effects.”

Department of Health-Central Visayas Regional Director Jaime S. Bernadas said they immediately met with the mayors of the region upon receiving the news, and requested for a two-week period to strengthen protocols “before easing community quarantine restrictions.”

The DoH reported 1,901 new coronavirus disease 2019 (COVID-19) cases on Friday, bringing the total to 557,058.

The death toll rose by 157 to 11,829, while recoveries increased by 537 to a total of 512,789, it said in a bulletin.

The total number of active cases is now 32,440 or 5.8% of the total cases.

Meanwhile, six duplicates were removed from the total case count, and three of these were reclassified as recoveries and one as death.

Another 120 cases previously marked as recoveries were reclassified as deaths after final validation.

Four laboratories were not able to submit their data to the COVID-19 system. — Bianca Angelica D. Añago

Janssen starts clinical trials in PHL

JANSSEN Pharmaceutical Companies of Johnson & Johnson has started local clinical trials for its coronavirus disease 2019 (COVID-19) vaccines, Department of Science and Technology (DOST) Undersecretary Rowena Cristina L. Guevara announced in a press briefing on Friday.

The trial proper “started with patient screening, recruitment, and vaccination,” Ms. Guevara said.

Janssen Pharmaceuticals has previously identified trial sites in the capital Metro Manila, in the Calabarzon Region, and Western Visayas.

She said other details such as the number of participants can only be disclosed by the company.

The Food and Drug Administration (FDA) approved in 2020 the request of Janssen Pharmaceuticals, a Belgium-based firm owned by Johnson & Johnson, to hold local clinical trials in the Philippines.

Other vaccine manufacturers that have applied for clinical trials in the country include China’s Sinovac Biotech Ltd., Russia’s Gamaleya Research Institute of Epidemiology and Microbiology, and Chinese drug company Clover Biopharmaceuticals. — Bianca Angelica D. Añago

PHL on high alert as typhoon Auring seen to make landfall Sunday

EMERGENCY teams in areas along tropical storm Auring’s path have been placed on high alert for possible preemptive evacuation and rescue operations as heavy rains and wind are likely to cause flooding and landslides over the weekend, the Office of Civil Defense said on Friday.

In the small coastal town of Bayabas in Surigao del Sur, an initial 18 families have already been evacuated, according to the local disaster management office.

The Philippine Coast Guard said its units in southern Luzon, the Visayas, and the northern and eastern parts of Mindanao “have been placed on heightened alert to ensure completeness and preparedness of deployable response groups and quick response teams.”

Weather bureau PAGASA, in its Friday morning advisory, said rough to high seas will be experienced in the next 24 hours over the seaboards of eastern Mindanao, central and northern Luzon, and the Visayas. “Sea travel is risky for all types of sea vessels over these waters,” PAGASA said.

Storm Auring, the first typhoon to enter the Philippines this year, was still expected to make landfall in the eastern coast of Caraga Region in Mindanao on Sunday despite weakening into a tropical storm from a severe tropical storm category as of Friday afternoon.

As of Friday 5 p.m., tropical cyclone wind signal #1 was raised over the following areas: Southern Leyte; southeastern portion of Eastern Samar (Guiuan including Homonhon Island); the Caraga provinces of Dinagat Island Surigao del Norte, Surigao del Sur, Agusan del Norte, and Agusan del Sur; most parts of Davao Region; and parts of Northern Mindanao.

The storm’s center as of 4 p.m. was 405 kilometers east-southeast of Hinatuan, Surigao del Sur.

It was moving westward at 15 kilometer per hour (km/h) with maximum sustained winds of 85 km/h near the center and gustiness of up to 105 km/h.

Affected areas on Saturday are: Caraga, Camiguin, Misamis Oriental, Bukidnon, Davao Oriental, Davao de Oro, and Davao del Norte, Eastern and Central Visayas, the rest of Northern Mindanao, Lanao del Sur, Cotabato, and Davao City.

By Sunday, Auring is expected to bring moderate to heavy with at times intense rains over Catanduanes, Albay, Sorsogon, Masbate, Visayas, Caraga, Camiguin, Misamis Oriental, and Bukidnon.

Metro Manila mayors want cinemas to reopen at 20-30% capacity

MAYORS in the capital Metro Manila will recommend a limit of 20% to 30% of seating capacity when cinemas are allowed to reopen by March.

remain wary in opening cinemas as cases of the COVID-19 consistently rise amid the gradual reopening of the economy, adding they are eyeing a 20% to 30% capacity if cinemas will reopen by next month.

In a briefing on Friday, Metro Manila Development Authority General Manager Jose Arturo S. Garcia, Jr. the capital region’s 17 mayors remain hesitant in reopening movie houses even as they voted for an easing of restrictions starting next month.

In areas under the more relaxed modified general community quarantine (MGCQ) classification, cinemas are allowed to operate at 50% capacity based on the national guidelines.

Mr. Garcia said the leaders of Metro Manila, currently under the stricter GCQ level, plan to come up with modified guidelines when it shifts to MGCQ.

“We will just come up with guidelines. Instead of 50% capacity, it would be 20% to 30%,” he said in a mix of English and Filipino.

The country’s economic managers have recommended to place the entire country under the least restrictive MGCQ by March to spur business activities.

Trade Secretary Ramon M. Lopez, in the same briefing, said the opening of cinemas in MGCQ areas did not contribute to spikes of coronavirus cases. He added that only around 27% of cinemas in these areas resumed operations.

“There are around 500 plus cinemas in MGCQ areas. In the end, they have the option not to open the 500 plus. Only 148 opened among cinemas in MGCQ,” he said in a mix of Filipino and English. — Gillian M. Cortez

Pension agencies ordered to stop personal appearance requirement

THE national task force handling the coronavirus response has directed pension agencies to come up with new procedures that will no longer require pensioners to make an annual physical appearance to continue receiving their benefits.

In its Resolution No. 100 dated February 18, the Inter-Agency Task Force for the Management of Emerging Infectious Diseases said, “pension issuing agencies and their servicing banks, quasi-banks, and other financial institutions are mandated to adopt alternative modes of validation for senior citizen pensioners in lieu of personal appearances or submission of documents that require personal appearances before a notary public.”

The agencies are also tasked to hold public consultations before adopting the new measures.

“At present, senior citizens make personal appearances or submit documents that require personal appearances before a notary public in order to have continuous access to their pensions,” said Palace Spokesperson Harry L. Roque in a statement on Friday.

Those who are at least 60 years old are considered senior citizens in the Philippines and is generally the starting pension age.

Under the coronavirus disease 2019 (COVID-19) restrictions issued by the government, those 65 years old and above are prohibited from leaving their homes unless for emergency or humanitarian reasons. — Gillian M. Cortez

Resumption of concerts, other live events still under review

THE easing of rules on live events such as concerts is under consideration, according to Trade Secretary Ramon M. Lopez.

“We do not immediately allow events especially that will threaten physical distancing like live events with singing where health experts say this imposes risk due to the droplets. Unless there is a device or mechanism in the future if it’s in an enclosed space, it could be considered,” Mr. Lopez, speaking in Filipino, said in a briefing on Friday.

The government has already relaxed restrictions on mass gatherings in areas under the least quarantine level.

Among the activities allowed, with certain guidelines on the venue’s capacity, are religious ceremonies and social gatherings.

Meetings, Incentives, Conferences, and Exhibitions (MICE) are also allowed at accredited establishments of the Department of Tourism. — Gillian M. Cortez

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