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Central bank pushes for faster digitalization of financial services

THE BANGKO SENTRAL ng Pilipinas (BSP) will continue pushing reforms and policies to spur the digital transformation of the country, especially in financial services, to push inclusion, its chief said on Friday.

Among the measures cited by BSP Governor Benjamin E. Diokno were one recommended by the Financial Inclusion Steering Committee (FISC), such as the Open Access to Data Transmission bill and an order to liberalize access to satellite technology for broadband services. The BSP is a member of the FISC.

Mr. Diokno said these initiatives aim to close the country’s internet infrastructure gaps to expand broadband connectivity and eventually ramp up financial inclusion.

“Through digitalization, we help create opportunities for people to improve their lives and participate in the economic and financial system. Through digital payments, we also promote financial inclusion. Digital payments help consumers engage in easier and safer economic activities,” Mr. Diokno said in his speech during the “Ulat ng BSP sa Bayan” forum on Friday.

“On a wider scale, it also helps reduce poverty and hunger, promote good health and well-being, ensure quality education, decent work, and gender equality, develop sustainable communities, and a lot more,” he added.

The central bank wants 50% of financial transactions in terms of volume and value to be done digitally by 2023, with at least 70% of Filipino adults having accounts with financial institutions.

Mr. Diokno said electronic money transactions done via PESONet and Instapay surged last year amid the ongoing public health crisis.

PESONet is an electronic fund transfer service under the National Retail Payment System of the central bank that facilitates batch fund transfers for amounts beyond P50,000. The service allows fund transfers to be credited to the receiver by the end of the banking date.

The volume of PESONet transfers skyrocketed by 376% year on year to 15.3 million in 2020 while the value nearly tripled to P951 billion.

Meanwhile, the volume of InstaPay transactions likewise surged by 459% to 86.7 million while the value stood at P463 billion, up 340% year on year.

“The COVID-19 (coronavirus disease 2019) pandemic has indeed unexpectedly catalyzed the rapid acceleration of digital transformation. The BSP took this opportunity to advance initiatives to push digitalization in the financial industry further,” Mr. Diokno said. — B.M. Laforga

NPC recommends prosecution of Fynamics Lending

THE National Privacy Commission (NPC) has recommended the prosecution of Pondo Peso online lending app operator Fynamics Lending Inc. for using the personal information of its users without permission.

Fynamics is one of several online lending apps that have been the subject of customer complaints for processing users’ mobile contact lists without consent.

The company would call the users’ contacts and use personal information to damage the customers’ reputation or threaten them into settling their loans.

“Methods used in personal data processing information were unduly intrusive, including posting on social media of personal and sensitive personal information of data subjects or even subjecting their contacts to threats and harassment,” NPC said in a statement.

The commission received 113 complaints about the company between mid-2018 to mid-2019.

NPC Chief of Complaints and Investigation Michael R. Santos said the company committed the unauthorized processing of personal information and sensitive personal information, a violation under section 25 of the Data Privacy Act or Republic Act No. 10173.

“The commission finds that respondent Fynamics committed unauthorized processing for its retention of contact lists beyond its declared purpose and unauthorized processing its use of the borrowers’ contacts for debt collection,” he said in a press conference on Friday.

The commission has sent its decision to the Department of Justice, recommending prosecution after finding that the firm’s board of directors have violated the Data Privacy Act for which they could be imprisoned and fined.

Complaints about online lending apps increased in recent years, Mr. Santos said, peaking at 455 in September 2019 before declining during the lockdown. Complaints about online lending made up 89% of reports filed with the NPC in 2019, from 15% a year earlier.

The NPC is continuing to investigate other online lending applications. — Jenina P. Ibañez

Peso rebounds as oil prices ease

THE PESO rose slightly against the greenback on Friday as the climb in global oil prices eased and on expectations that quarantine restrictions in the country would be relaxed soon.

The local currency closed a tad stronger at P48.451 versus the greenback on Friday from its P48.50-per-dollar finish on Thursday.

The peso opened the trading session at P48.43 per dollar. It dropped to as low as P48.47, while its intraday best was at P48.39 against the greenback.

Dollars traded went down to $726.62 million on Friday from the $1.385 billion logged the day prior.

Week on week, however, the local currency weakened by 40.6 centavos from the P48.045 close on Feb. 11.

The peso inched up after a healthy downward correction in global oil prices, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said via Viber.

“[The peso slightly rose] after the Biden Administration signalled willingness to talk with Iran that could lead to new easing of sanctions on Iran oil exports, as well as some resumption of Texas/US oil production disrupted by unusually cold winter,” Mr. Ricafort said.

Global oil prices surged to one-year highs this week when extreme cold weather hit Texas, the largest energy-producing state in the US, Reuters reported.

The increase, however, eased by 0.6% on Thursday to settle at $63.93 per barrel for the Brent crude after peaking at $65 a barrel during the day’s session.

Back home, the possible easing of restrictions to a modified general community quarantine in Metro Manila sparked optimism and supported the peso’s rebound.

“The peso recovered following the unexpected rise in US weekly initial jobless claims and profit-taking by market participants,” a trader added.

The weekly report from the US Labor department released on Thursday showed jobless benefit claims rose by 13,000 to a seasonally adjusted 861,000 last week. This was higher than the 765,000 claims estimated by the economists polled by Reuters. — BML with Reuters

2 SMC units submit lowest bids for 1,800-MW Meralco supply deal

Two companies under the San Miguel group submitted the lowest bids during the competitive selection process (CSP) held by Manila Electric Co. (Meralco) for the supply of 1,800 megawatts (MW) of power in the next two decades starting 2024.

This comes as a network of civil society organizations, Power for People Coalition, has asked the Supreme Court to file a temporary restraining order against the distribution utility’s CSP.

In a press release Friday, Meralco said that the two “best” bids came from Excellent Energy Resources, Inc. (EERI) and Masinloc Power Partners Co. Ltd (MPPCL) which both offered a low levelized cost of electricity (LCOE). The two firms are subsidiaries of SMC Global Power Holdings Corp.

“EERI had a levelized cost of electricity (LCOE) of P4.1462 per kilowatt-hour (kWh) and Masinloc Power Partners Co. Ltd (MPPCL) offered P4.2605 per kWh. Both are significantly below the LCOE reserve price of P5.2559 per kWh,” Meralco said, citing the decision of its Third-Party Bids and Awards Committee (TPBAC).

EERI proposed to supply Meralco with 1,200 MW from the former’s natural gas-fired power plant, while MPPCL said that it would be able to provide the distribution utility with 600 MW from its coal-fired power plant.

The offers of three other firms were identified as the “possible next best bids” by the TPBAC. These include the Mariveles Power Generation Corporation (MPGC), Atimonan One Energy Inc. (A1E), and GNPower Dinginin Ltd. Co. (GNPD), which had LCOEs of P4.3321 per kWh, P4.6338 per kWh, and P5.2500 per kWh, respectively.

St. Raphael Power Generation Corporation, which also submitted an offer, failed to meet the LCOE threshold as it offered a price of P5.4426 per kWh.

The LCOE would be used to compare power supply offers from various firms over a period of 20 years, Meralco Vice President and Head of Utility Economics Department Lawrence S. Fernandez said.

“Generation charges typically vary over time as a result of such factors as movements in fuel prices, exchange rates, inflation rates, etc. Thus, prices from a Power Supply Agreement will change over the term of a 20-year contract,” Mr. Fernandez told BusinessWorld in a text message on Friday.

“To more easily compare supply offers over a 20-year term, the offer price over the 20 years from each bidder is converted to an equivalent single or ‘levelized’ price of that bidder,” he added.

In a statement, TPBAC Chairman Ferdinand A. Domingo said that the committee managed the CSP according to all the rules set by the Department of Energy (DoE).

“The aforesaid bidders with the best bids will now undergo post-qualification within seven days from (today). Thereafter, the TPBAC shall issue respective notices of award in favor of those who satisfactorily passed post-qualification,” the TPBAC said.

The committee said the 2 bidders with the best bids were chosen after they passed a pre-qualification evaluation process.

Earlier, Meralco’s Mr. Fernandez said the deadline of bid submissions was on Jan. 27.

In a mobile message last month, he confirmed that there were 9 firms who submitted their documents on time.

“These represented an aggregate offered capacity of 5,850 MW. This total is more than three times the requirement of 1,800 MW,” Mr. Fernandez told BusinessWorld on Jan. 28.

PETITION FOR TRO

On Friday, the People for Power (P4P) Coalition, a network of civil society groups, filed a petition before the Supreme Court to issue a temporary restraining order against Meralco’s 1,800-MW CSP.

In a copy of the petition obtained by BusinessWorld, the P4P Coalition said that “the terms of reference for Meralco’s 1,800 MW tender are glaringly unfavorable for Meralco’s power consumers because did not comply with the DoE’s CSP Rules issued in 2018 and that they would not result in the least cost of electricity.”

“In 2019, Meralco released two tenders using, what it calls as, ‘prudent energy sourcing practices’ and ‘pro-consumer’ terms of reference, (such as) straight energy price with no automatic fuel pass-through and 100% guaranteed supply from all nominated power plants,” the P4P Coalition said in its petition.

“In 2020, Meralco released another tender for a 1,800 MW contract capacity, however, this time, reverting to old terms of reference that allow for electricity rates to fluctuate to as high as 32.4475 PhP/kWh (per kilowatt-hour), fuel costs to automatically pass-through to its electricity consumers, and power plant outages with costs reimbursable to electricity consumers,” it added.

Meanwhile, TPBAC chairman Mr. Domingo was quoted in Meralco’s press release as saying that the ongoing 1,800-MW CSP is seen to “provide an adequate and reliable supply of electricity at competitive rates to Meralco’s customers in the coming years.”

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

MRT-7 to open by end-2022

San Miguel Corporation (SMC) on Friday said the Metro Rail Transit Line 7 (MRT-7) project is now 54% complete, on track for its opening by the end of 2022.

“We have already completed a significant amount of civil works, including the installation of bored piles, girders, foundational works on stations, and we have been installing rails or tracks. At the same time, E&M works have also advanced significantly,” SMC President Ramon S. Ang said in a statement on Friday.

Around 6.2 kilometers (km) of the 13.5-km elevated section is complete, while 4.8 km out of 6.9 km of the at-grade section and 1.5 km of the 1.9 km tunnel section are done. Civil works and electrical/mechanical works are both more than halfway done.

Mr. Ang said that construction of the project connecting Quezon City to San Jose del Monte, Bulacan continued despite limitations during the lockdown declared to contain the coronavirus pandemic.

“Now that we’ve crossed the halfway mark, we’re expecting to reach a lot of major milestones for this project this year. This includes the construction of the stations, testing of various equipment in different countries, and the actual arrival of these equipment, including the first batch of trains,” he said.

The initial six trains or 18 cars will be tested in South Korea in April.

SMC bought the trains from South Korea Hyundai Rotem, with the national rail manufacturer, Korea Railroad Corporation (KORAIL), as its adviser.

If the trains pass the tests, the first batch of trains will arrive within the year. SMC will acquire a total of 36 trains or 108 cars for the MRT-7.

The MRT-7 depot will be capable of holding up to 150 trains for future capacity expansion, if needed, the company said.

Mr. Ang said manufacturing of other important equipment, sourced from various countries, have also been completed.

“Given our progress today, and all the major milestones we’re expecting this year and the next, I think we’re confident we can achieve full, complete operations by December next year, with our first test run scheduled for June next year. By then, I believe we would be recovering already from the impacts of COVID-19. Our economy will be on the way up, and people will be resuming their lives in the next normal. MRT-7 will be ready for them, to help make commutes faster, to boost our economy, and bring growth to more areas,” Mr. Ang said. — Jenina Ibañez

CLI to develop P4-B skyscraper in Cebu City

Cebu Landmasters, Inc. (CLI) on Friday said it is developing the P4-billion Masters Tower Cebu, which will feature office and retail spaces and the city’s first five-star luxury hotel.

In an online launch on Friday, CLI highlighted the skyscraper’s sustainable design and how Cebu’s local artistry inspired its architecture.

“This is an icon because of its thoughtfulness. It will connect to Cebuanos, not just today but in future generations,” CLI Executive Vice President and Chief Operating Officer Jose Franco B. Soberano said at the event.

Masters Tower Cebu will occupy a 2,840-square meter lot at the Cebu Business Park, Cebu City. It will top off at 192 meters above sea level, making it one of the top three tallest structures in the city.

Sofitel Cebu City will make up two-thirds of the project, occupying 14th to 32nd floors with 195 guest rooms, meeting rooms, a ballroom, roof deck, lounge and pool.

The hotel’s sky lobby will be housed at the 16th floor, and will feature an internal atrium to reflect natural lighting. Sofitel Cebu’s roof deck will enjoy a 360-degree view of the city.

The building will also feature sky gardens on every floor of the building, and project managers are planning to use these gardens for a farm-to-table restaurant.

Office spaces will occupy the 8th to 12th floors of the building.

Groundbreaking for the project is scheduled within the second quarter of this year. Masters Tower Cebu is expected to be completed in 2025.

CLI is hoping the tower will receive Leadership in Energy & Environmental Design (LEED) Gold Certification.

“We did a lot of extensive research into the furniture making and the craftsmanship that’s inherent to the Cebuano community,” SOM Project Manager Shilpa Patel said at the online conference.

“It became really important to look at all these different aspects of the history of where Cebu comes from and the history of the Cebuano people,” she added.

US-based architectural and engineering group Skidmore, Owings and Merril (SOM) is working with Makati design firm GF Partners and Architects on the project.

Mr. Soberano said the firm looks forward to the return of tourism in Cebu.

“[Masters Tower Cebu’s] importance to Cebu is to serve not just as an iconic landmark but through its contribution to the welfare of the economy. It will add fuel to the very active tourism industry that we have, and it will be there in the heart of Cebu City,” CLI Chief Executive Officer Jose R. Soberano III said at the virtual launch. — Keren Concepcion G. Valmonte

Subic Freeport Expressway opens

The P1.6-billion Subic Freeport Expressway (SFEx) expansion officially opened on Friday, NLEX Corp. said.

Construction of the 8.2-kilometer expansion project continued despite the pandemic to connect business activities in the Clark and Subic economic zones, the company said in a statement on Friday.

The project increases expressway capacity to a double carriageway with lanes in each direction from the single two-way carriageway. Construction included two new bridges and a tunnel.

“We continued the construction of the new expressway despite the challenges posed by the pandemic and the stringent health protocols. The construction project also provided jobs and supported the livelihood of our people. It was also our way of helping our countrymen manage the economic impact of the health crisis. MPTC and NLEX continue to stand with the government in its commitment to improve the lives of Filipinos through infrastructure projects such as this,” NLEX Corporation President and GM J. Luigi L. Bautista said in a statement.

NLEX said that the expansion would boost investments and tourism in the Subic Bay Freeport Zone, a major port in central and north Luzon.

“This fresh Metro Pacific Tollways infrastructure investment will improve mobility, accelerate the country’s economic recovery and more importantly, support the logistics and supply chain we urgently need. Around 10,000 motorists daily will benefit from this new road,” Public Works and Highways Secretary Mark A. Villar said.

The company partially opened the new expressway to serve travelers during the December holidays.

NLEX Corp. is a unit of Metro Pacific Tollways Corp. Its parent Metro Pacific Investments Corp. is one of three key Philippine units of Hong Kong’s First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Jenina P. Ibañez

Antonio eyes settlement with Revolution Precrafted’s suppliers, contractors

Revolution Precrafted Properties Inc. is discussing potential settlements with suppliers and contractors that filed complaints against the start-up company with the National Bureau of Investigation (NBI).

According to ABS-CBN News, nine contractors and suppliers filed the complaints about allegedly questionable contracts for Revolution Precrafted’s real estate projects, in which they paid 10% of the contract value to become the preferred suppliers.

The complainants claimed they were duped out of P150 million after finding that Revolution Precrafted failed to secure government permits for the projects and did not return their payments.

Revolution Precrafted in a statement Friday said that it is complying with the authorities.

The prefabricated home construction company said that it was unable to collect receivables from landowner-developers during the pandemic and was then unable to pay contractors and suppliers.

“Nonetheless, the company sincerely assures its stakeholders that it will honor all legitimate contractual obligations with its partners and suppliers, and only ask for some time consideration to resolve its issues. In parallel, we will also work in earnest to collect what is due the company,” Revolution Precrafted Chief Executive Officer Jose Roberto “Robbie” R. Antonio said in a statement.

Mr. Antonio, who is the son of Century Properties Group Chairman Jose E.B. Antonio, started Revolution Precrafted in 2015.

Since then, the company has announced numerous partnerships with international companies such as a $52-million project in Spain, a $1.2-billion project in Myanmar, and a $3.2-billion project in Dubai.

It also partnered with property companies in the Caribbean nations of Trinidad, Guyana, Jamaica, and the Bahamas, as well as in Japan, Puerto rico, Ecuador, Brazil, and Cyprus.

Locally, Revolution Precrafted was tapped to develop prefabricated structures for the $1.1-billion Batulao Artscapes in Nasugbu, Batangas, the $750-million Revolution Flavorscapes in Mexico, Pampanga, and the $125-million Puerto Azul project in Cavite. — Jenina P. Ibañez

Singapore start-up enters Philippines market

The Ayala Corp. fund for startups will inject $2 million into internet distribution technology from a Singapore-based company, venture capital firm Kickstart Ventures Inc. announced on Friday.

Kickstart manages the $180-million fund under the Ayala Corporation Technology Innovation Venture (ACTIVE) from Ayala Corp., its subsidiaries, Bank of the Philippine Islands, and Kickstart parent Globe Telecom.

The first publicly announced investment under this program will go to Trancelestial Technologies, which plans to use its Centauri device to create a wireless internet distribution network in the country.

“Transcelestial aims to work with Philippine telcos among others to provide a solution to the daunting industry challenge of putting up cell sites,” Kickstart said in a press release.

The device uses laser communications technology for wireless distribution between buildings, cell towers, and other infrastructure.

“It unlocks fiber-equivalent high bandwidth between 4G/5G cell towers and the telecom core network which connects back to their data centers,” Kickstart said, adding that it would reduce costs usually incurred by laying down fiber cables.

“As more Filipinos become reliant on internet access for their livelihood and social connections, we’re hopeful that Transcelestial will help increase Internet penetration and provide telcos and ISPs (internet service providers) with an affordable option for 5G deployment,” Kickstart President Minette Navarrete said.

The ACTIVE fund will invest between $2-10 million into startup companies in their early to mid-growth stages. — Jenina P. Ibañez

Stocks climb on possible easing of quarantine measures

LOCAL SHARES ended the week higher amid a recommendation to place Metro Manila under eased restriction measures as the government finalizes its vaccination program.

The benchmark Philippine Stock Exchange (PSEi) gained 76.77 points or 1.12% to finish at 6,926.41 on Friday. The all shares index also rose 28.51 points or 0.68% to close at 4,199.

“The market rebounded today, perhaps aided by the possible call to go to MGCQ (modified general community quarantine). Also the market found some support near the 6,800 zone after correcting for almost five days,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message on Friday.

“Market continued to be resilient on account of the expected economic reopening and vaccination,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a separate Viber message.

“Continuing market theme is the hunt for yield and recovery play which both reinforce equities as the favorite asset class more than bonds whose duration risk is heightened by rising inflation and the BSP’s (Bangko Sentral ng Pilipinas) reduced presence in the secondary debt markets,” Ms. Ulang added.

President Rodrigo R. Duterte is expected to make a decision on the MGCQ recommendation next week. More businesses will be allowed to operate under this type of lockdown and transportation services will also increase.

All sectoral indices at the PSE ended in the green on Friday. Holding firms increased by 168.18 points or 2.39% to 7,187.4; mining and oil grew by 182.4 points or 1.98% to 9,396.67; financials improved by 9.62 points or 0.65% to 1,471.50; services climbed 2.4 points or 0.16% to 1,479.37; industrials gained 9.31 points or 0.1% to 8,963.93; and property inched up by 1.71 points or 0.05% to finish at 3,445.68.

Value turnover went up to P9.56 billion on Friday with 16.37 billion shares switching hands, from the P8.9 billion with 16.62 billion shares traded the previous day.

Decliners beat advances, 116 against 98, while 41 names closed unchanged.

Net foreign selling went down to P579.54 million on Friday from the P1.25 billion recorded on Thursday.

“Investors returned to the Philippines for bargain hunting after successive sell-offs after recent economic data showed only a slightly better labor market amid increasing bond yields. Investors are now worried over potential inflation spikes driven by elevated commodity and energy prices,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said via Viber.

“We hope nothing untoward would come to offset this rebound, like a correction from the US. The PSEi still remains in a consolidation and has its range pegged between 6,800-6,600 low and around 7,200 to 7,500 high band,” COL Financial Group, Inc. Chief Technical Analyst Barredo said. — K.C.G. Valmonte

WhatsApp to move ahead with privacy update despite backlash

Facebook Inc’s WhatsApp said on Thursday it will go ahead with its controversial privacy policy update but will allow users to read it at “their own pace” and will also display a banner providing additional information.

In January, the messaging platform informed users it was preparing a new privacy policy, under which it could share limited user data with Facebook and its group firms.

It sparked a global outcry and sent users to rival apps Telegram and Signal, among others, prompting WhatsApp to delay the new policy launch to May and to clarify the update was focused on allowing users to message with businesses and would not affect personal conversations.

In India, the messaging app’s biggest user base, Facebook executives fielded questions from a parliamentary panel on the need for the changes, days after the country’s technology ministry asked the messaging platform to withdraw them.

In its latest blog, WhatsApp said it will start reminding users to review and accept updates to keep using the messaging platform.

“We’ve also included more information to try and address concerns we’re hearing,” it added.

WhatsApp‘s announcement comes as parent Facebook moved to block all news content in Australia on Thursday, facing backlash from publishers and politicians, prompting a senior British lawmaker to label the move as an attempt to bully a democracy. – Reuters

Rich nations have a billion more COVID-19 shots than needed – report

LONDON – Rich countries are on course to have over a billion more doses of COVID-19 vaccines than they need, leaving poorer nations scrambling for leftover supplies as the world seeks to curb the coronavirus pandemic, a report by anti-poverty campaigners found on Friday.

In an analysis of current supply deals for COVID-19 vaccines, the ONE Campaign said wealthy countries, such as the United States and Britain, should share the excess doses to “supercharge” a fully global response to the pandemic.

The advocacy group, which campaigns against poverty and preventable diseases, said a failure to do so would deny billions of people essential protection from the COVID-19-causing virus and likely prolong the pandemic.

The report looked specifically at contracts with the five leading COVID-19 vaccine makers – Pfizer-BioNTech, Moderna, Oxford-AstraZeneca, Johnson & Johnson, and Novavax.

It found that to date, the United States, the European Union, Britain, Australia, Canada and Japan have already secured more than 3 billion doses – over a billion more than the 2.06 billion needed to give their entire populations two doses.

“This huge excess is the embodiment of vaccine nationalism,” said Jenny Ottenhoff, ONE Campaign’s senior director for policy.

“Rich countries understandably hedged their bets on vaccines early in the pandemic but with these bets paying off in spades, a massive course correction is needed if we are going to protect billions of people around the world,” she added.

The analysis found that, along with other COVID vaccine supplies procured by the global COVAX vaccine-sharing plan and in bilateral deals, the excess rich-country doses would go a long way to protecting vulnerable people in poorer countries.

This would significantly reduce the risk of deaths from COVID-19, it said, as well as limiting the chances of new virus variants emerging and accelerating an end to the pandemic.

The World Health Organization on Thursday urged nations with vaccines not to share them unilaterally, but to donate them to the global COVAX scheme to ensure fairness. – Reuters

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