Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 7073

BSP to keep rates low ‘for next few quarters’

BENCHMARK interest rates will remain low “for the next few quarters” to support the virus-stricken economy, but unlikely to cross negative territory, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Tuesday.

“Given the old facts that we have, we intend to keep interest rates low until maybe the next few quarters,” Mr. Diokno told the ABS-CBN News Channel.

Last year, cumulative rate cuts from the central bank amounted to 200 basis points (bps), bringing the overnight reverse repurchase, lending and deposit rates to record-lows of 2%, 2.5% and 1.5%, respectively.

Asked whether the BSP could go lower than current rates, Mr. Diokno said: “I don’t want to make a commitment but it will depend on the inflation level, and whether there is still a need for further monetary easing.”

Headline inflation accelerated to 3.5% in December, driven by the faster pace of food and transport price increases.

However, Mr. Diokno is not keen on pushing rates below zero. “We still have room for conventional monetary policies,” he added.

At its Dec. 17 meeting, the Monetary Board left rates untouched, citing the benign inflation environment as well as the rollout of some coronavirus vaccines that lifted prospects for global economic recovery.

Despite the record low interest rates, lending growth remained sluggish at 1.9% in October, the slowest since the same pace was logged in September 2006.

At the same time, Mr. Diokno said further reductions in the reserve requirement ratio (RRR) of banks are still on the table.

“We still have some play on the reserve requirement. I made a commitment to cut the reserve requirement to a single digit by the end of my term in 2023 so we still have some play there,” the BSP chief said.

The Monetary Board is authorized to cut the reserve ratio by up to 400 bps in 2020. However, the BSP only slashed it by 300 bps, through a 200-bp cut for big banks and 100 bps more for thrift and rural lenders.

Reserve requirements for universal and commercial banks stand at 12%, while those for thrift and rural banks are at 3% and 2%, respectively.

“Instead of policy rate cuts, maybe the BSP will go for a reserve requirement cut in the meantime, as it is in line with Mr. Diokno’s goal to lower banks’ ratio to a single digit,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a text message.

The upcoming fourth-quarter gross domestic product data will be a crucial factor for the BSP to gauge whether to go for a reserve ratio cut, said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa.

“We believe [Mr.] Diokno will be willing to utilize this space if and when GDP numbers continue to disappoint although an infusion of liquidity may not do much in terms of stimulating the moribund economy,” he said in an e-mail.

The Philippine Statistics Authority will release fourth-quarter and full-year 2020 GDP figures on Jan. 28. The BSP’s first policy-setting meeting is scheduled for Feb. 11, although previous reserve requirement cuts were done off-cycle.

The country’s economic output shrank by 11.5% in the third quarter, bringing the contraction for the first nine months to 10%. The government expects the economy to shrink by 8.5-9.5% for 2020.

“[Mr.] Diokno will continue to call fiscal authorities to act but he will also likely look to do whatever it takes to get the economy back on track,” Mr. Mapa said. — Luz Wendy T. Noble

Factory output down for 9th straight month in Nov.

By Beatrice M. Laforga, Reporter

THE country’s manufacturing output extended its losing streak for the ninth consecutive month in November, the statistics agency reported on Tuesday.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries (MISSI) showed factory output, as measured by the Volume of Production Index (VoPI), further declined at an annual rate of 10.8% in November, from the revised -9.3% in October and -7.6% in the same month of 2019.

November saw the steepest drop in four months or since the revised -13.6% in July 2020.

VoPI has been on a decline since March, when the government began imposing stringent lockdown measures to curb the spread of the coronavirus disease 2019 (COVID-19).

In the first 11 months of 2020, factory output shrank by 11.5% on average, against the 8.5% average drop in the same period in 2019.

The PSA attributed the sustained slide in November to the double-digit slump in the indices of 16 industry groups, led by petroleum products (-61.9%), tobacco (-58.6%) and printing (-51.5%).

Meanwhile, the Value of Production Index (VaPI), a similar composite indicator in the survey, slipped by 13.8% year on year from the revised -12.3% in October. This marked the ninth straight month VaPI recorded an annual contraction rate and the fastest since July’s revised 16.8% drop.

Year to date, VaPI fell by 15.3% on average, against the 6.9% drop in the comparable 11-month period in 2019.

The average capacity utilization — the extent to which industry resources are used in producing goods — slipped to 70.9% in November, from 71.8% in October. Only six out of the 20 sectors saw their capacity usage rates reach at least 80%, led by machinery except electrical (91.7%), electrical machinery (85.4%), and furniture and fixtures (84.4%).

In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the latest data highlighted how the coronavirus pandemic dampened consumption.

“This may be a good confirmation that consumption demand really took a big hit with COVID-19 still around and that the usual seasonal uptick may have also been clearly affected by the pandemic,” he said.

“If December numbers confirm a change in trend with more easing of restrictions and controls in the economy, it would be easier to confirm if things are actually getting better. However, at this point, it is difficult to determine the trend even with seemingly more vehicles and people moving around in recent months,” he added.

Factory activity in the country, as measured by a survey conducted by the IHS Markit, continued to deteriorate in December as shown in the manufacturing Purchasing Managers’ Index (PMI) falling to 49.2 from 49.9 in November.

Japanese firms in PHL expect profits to improve this year

Most Japanese companies in the country are hoping to recover from the pandemic this year. — PHILIPPINE STAR/MICHAEL VARCAS

MOST Japanese companies in the Philippines expect the economy to recover from the coronavirus disease 2019 (COVID-19) pandemic this year, with 60% anticipating an improvement in operating profits.

A summary of Japan External Trade Organization (JETRO) in Manila’s annual business survey was released on Tuesday, showing two-thirds of the Japanese respondents expecting the economy to recover this year, while about 15% expect a recovery after 2022.

“As for operating profit in 2020, 43% of respondents expect a ‘surplus,’ while 22% expect ‘even’ and 35% expect a ‘deficit.’ Some 60% of respondents think that their operating profit in 2020 will be worse than 2019, but 2021 will be better than 2020,” JETRO said.

The survey was held in August and September 2020, with 133 respondents across industries.

“Some 80% of respondents think their market size after COVID-19 would be the same or slightly smaller than that before COVID-19,” JETRO said.

Almost half of respondents revised their business strategies amid the pandemic, such as the implementation of work-from-home or telework schemes. Some Japanese manufacturers also diversified their production base in many countries to strengthen their global supply chain.

A third of the companies surveyed said they planned to expand their business in the Philippines this year, including sales expansion and the production of high value-added products, compared with 52% that said the same last year.

Most companies or 57% will keep the status quo, 8% will scale down, and 1% will pull out their operations from the country.

Japanese companies said the Philippines’ advantages as an investment destination include favorable tax incentives and reasonable worker compensation. It cited the Philippines as the most cost-competitive in terms of compensation for engineers in the manufacturing sector.

However, many cited out negative factors such as unstable politics and society, insufficient power and telecommunicationsinfrastructure, traffic congestion, slow telecommunications, concerns about safety and security, natural disasters, and “complicated” permit process and tax practices.

More than half of the Japanese manufacturing companies said  they had difficulties in getting raw materials and parts locally. About 43% said Japan was their major part supplier, while 10% got theirs from the Association of Southeast Asian Nations. Although 30% mostly get their parts locally, only 38% of these suppliers are Filipino. 

“Although Japanese manufacturers are trying to raise local procurement, they still need to import many parts and raw materials from abroad. Accumulation level of suppliers in the Philippines is much lower than that in neighboring countries,” JETRO said.

In terms of employment, more than 70% of firms retained their Japanese employee headcount last year, and more than half retained their Filipino staff count. In contrast, 17% cut Japanese staff and 23% decreased local staff.

“The ratio of respondents that consider decreasing their employee doubled in 2020, but majority chose ‘the status quo,’” the report said.

In the following years, 32% of respondents said that they will increase the Filipino staff count. — J.P.Ibañez

Job cuts seen as gov’t slaps car import duties

By Jenina P. Ibañez, Reporter

THE duties slapped on imported vehicles will delay the sector’s recovery and put jobs at risk, car manufacturers said, as they warned of other possible repercussions such as weakened trade relations and competitiveness.

The Trade department on Monday placed provisional safeguard duties on imported cars after its investigation showed that a surge in imports has hurt domestic manufacturing. In effect for 200 days, the duties will be in the form of cash bonds of P70,000 per passenger car unit and P110,000 per light commercial vehicle unit.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) has been pushing back against the measure, saying that it would limit industry recovery from the effects of the pandemic. The industry group’s sales fell 41.6% as of November last year.

CAMPI President Rommel R. Gutierrez expects the duties to further reduce car sales volumes.

“[This] in turn poses risk of employment downsizing, not to mention government revenue loss,” he said in a mobile message on Monday.

Mr. Gutierrez said that the duties would also encourage the revival of the “grey market” or used vehicle sales.

“With much uncertainty, investments in dealer expansion and parts localization may be deferred,” he said.

He added that there could be regional production disruption in the short term, while a regional overall economic slowdown in the longer term is made possible by a chain reaction to other industrial sectors.

International trade relations, he said, could be weakened by potential retaliation from countries exporting to the Philippines.

The investigation on safeguard duties was launched in response to an application from labor group Philippine Metalworkers Alliance (PMA), which flagged a possible link between a surge in automotive imports and a decline in local employment.

Trade Secretary Ramon M. Lopez had said that the safeguard duties are being put in place to protect local manufacturing and prevent car companies from leaving the Philippines, noting that Honda Cars Philippines, Inc. closed its plant in early 2020. Honda now sells to the Philippines through its regional network.

Meanwhile, the Association of Vehicle Importers and Distributors, Inc. (AVID) in an e-mailed statement on Tuesday said that the duties could further dampen recovery for an industry that has been appealing for government support. AVID sales plummeted 42.6% as of October last year.

The group said that it does not believe import duties would attract investments and create more jobs in the Philippines, or improve the country’s manufacturing competitiveness in the region.

“The measure will aggravate the already anemic demand and make it harder for Filipinos to afford personal mobility with the projected price hikes,” the group said. AVID instead called for long-term policies that would improve ease of doing business in the country.

The duties will take effect 15 days after publication in newspapers on Tuesday. The case will be sent to the Tariff Commission, which will conduct its own investigation and public hearings.

Megawide gains support for NAIA rehab

By Arjay L. Balinbin, Reporter

BUSINESS groups from Cebu added their voice to calls to give Megawide Construction Corp. and its foreign partner a chance to rehabilitate the Ninoy Aquino International Airport (NAIA).

In her letter to President Rodrigo R. Duterte on Dec. 28, Cebu Association of Tourguides, Inc. President Mary Grace Melendres said Cebu’s experience with the Mactan-Cebu International Airport developed by Megawide and its Indian partner GMR Infrastructure Ltd. should be replicated at the NAIA.

“The Cebu tourism community is confident that as soon as the vaccines are distributed to our population, which your administration is working hard to acquire, there will be a dramatic surge in travel,” Ms. Melendres said in her letter.

She noted that the redeveloped Cebu airport had helped increase tourist arrivals in Cebu from only 6.5 million passengers per annum to almost 13 million in 2019.

James Peter S. Aznar, head of laboratory at the Prime Care Alpha COVID-19 Testing Laboratory, a third-party partner of the GMR Megawide Cebu Airport Corp. (GMCAC), also wrote Mr. Duterte, saying the anti-dummy case the consortium faces is a “nuisance issue.”

“We continue to believe in the administration’s promise to get the NAIA rehabilitation on its way while protecting the achievements of other Philippine airports,” Mr. Aznar said in his letter dated Dec. 21.

Eduardo L. Solana, Jr., president of Vertical Difficult Access Solutions, Inc., which is also a third-party partner of the GMCAC, reiterated in a separate letter to Mr. Duterte on Dec. 21 that the partnership of Megawide and GMR “has been an asset to Cebu boosting local tourism and the regional economy.”

BusinessWorld received copies of the letters via e-mail on Tuesday.

Megawide posted on its official Facebook page on Monday that it also gained support from Cebu Chamber of Commerce & Industry (CCCI).

The company posted a copy of the Dec. 15 letter of CCCI President Felix Taguiam to Transportation Secretary Arthur P. Tugade that said, “We enjoin you to support our home-grown companies and corporations like Megawide and let them be a source of pride and joy for the country.”

“The NAIA rehabilitation project deserves full support from the government, so Filipinos can ultimately have their long-awaited and much-deserved world-class airport,” Mr. Taguiam said.

In December, Ombudsman Samuel R. Martires ordered the suspension of MCIAA General Manager Steve Y. Dicdican for allegedly violating the Anti-Dummy Law.

Mr. Dicdican was accused of letting foreign officials of GMCAC manage the Cebu airport.

The National Bureau of Investigation had filed a complaint before the Justice department against Mr. Dicdican, other airport executives, and GMCAC officials for violating the same law.

Mr. Dicdican questioned the filing of the complaint, saying the concession deal was awarded years before he joined the airport authority.

The Manila International Airport Authority also revoked in December the original proponent status of the Megawide-GMR tandem for the NAIA rehabilitation project.

Merger and acquisition deals hit P909 billion in 2020

THE Philippine Competition Commission (PCC) reviewed P909 billion in 26 mergers and acquisitions transactions last year, approving 20.

The commission reviewed the most transactions from the electricity and gas sector, followed by transportation and storage, PCC said in a report on Tuesday. The agency also processed transactions from the manufacturing, finance and insurance segment, as well as the real estate sector.

Among the applications, one was withdrawn, two were returned, and three are still being processed.

In comparison, PCC reviewed P758 billion in 44 transactions in 2019.

Required notifications and reviews for business mergers and acquisitions with transaction values below P50 billion has been temporarily suspended since September.

The Bayanihan To Recover As One Act, known as Bayanihan II, exempted parties in these transactions from being required to notify the competition regulation body within two years from the effectivity of the law.

PCC review of these transactions, conducted on its own initiative or motu proprio, is also suspended for a year. The exempted transactions may be reviewed after a year if they are seen as likely to substantially lessen competition.

“With fewer merger notifications expected and motu proprio review effectively suspended, our Mergers and Acquisitions Office refocused its resources on capacity building and market monitoring to gear up for the return of motu proprio review powers in September 2021,” the commission said.

“We also continued to encourage firms to voluntarily notify the Commission of their M&A transactions to avoid the possible unwinding of these transactions, should these be found anti-competitive after motu proprio review.”

PCC also said that there is a higher risk of anti-competitive behavior from firms experiencing smaller margins during the recession. The commission since the start of the lockdown has been warning about potential collusion among firms to exploit the crisis to raise prices.

PCC started 13 investigations after it received 162 queries and complaints in its channel for pandemic-related concerns.

“These particularly concerned water utilities, internet services, retail associations, and poultry,” the commission said. — Jenina P. Ibañez

Shakey’s set to open first branch in Singapore

SHAKEY’S PIZZA Asia Ventures, Inc. (SPAVI) is set to open its first store in Singapore after signing a seven-year franchising agreement with Brenrich Pte. Ltd.

In a disclosure to the stock exchange on Tuesday, SPAVI said the new branch will be located in Lucky Plaza mall along Orchard Road.

The restaurant is projected to open around the end of the second quarter or early third quarter of 2021.

According to the disclosure, the first branch in Singapore will offer Shakey’s entire menu, including its thin crust pizzas, iconic chicken, and mojos.

However, SPAVI said some food items will be modified to meet halal standards in consideration of Singapore’s large Muslim population.

“While the coronavirus disease 2019 (COVID-19) pandemic is presenting challenges to food companies like Shakey’s, it is also serving as an impetus to turn a crisis into an opportunity,” SPAVI President and Chief Executive Officer Vicente L. Gregorio said.

Jose Arnold T. Alvero, SPAVI vice-president for international operations and franchising, said the company’s primary target market for the branch will be Filipinos in the city-state, but adding that he expects it to attract Singaporeans due to its location.

“We have no doubt that Singapore’s discerning guests will be wowed with what Shakey’s brings to the table in terms of building the brand, people, and the store,” Mr. Alvero said.

Moving forward, Mr. Gregorio said the company has established its medium- and long-term priorities to thrive in a post-COVID-19 scenario.

“This includes strengthening our presence in our primary market, the Philippines, but also opportunistically expanding into other key international locations through strong partnerships with experienced and guest-centric operating partners,” Mr. Gregorio said.

During the third quarter of 2020, the company posted a net loss of P171.95 million, a turnaround from the P161.81-million profit it had during the similar period in 2019.

Its revenues fell 48% to P1.06 billion due to limited dine-in services at its stores as a result of the pandemic.

On Tuesday, shares in SPAVI at the stock exchange rose 0.53% or four centavos to end at P7.60 apiece. — Revin Mikhael D. Ochave

Energy dep’t to award hydro, geothermal contracts in April

THE Department of Energy (DoE) targets to award the contacts for geothermal and hydropower projects under the third round of its open competitive selection and bidding process, or OCSP3, by April 14, it said in a detailed timeline released on Tuesday.

“Aside from the timelines, we were able to provide details of the Pre-Determined Areas or Offered Areas and the guidelines and procedures including evaluation criteria,” Mylene C. Capongcol, director of the DoE’s Renewable Energy Management Bureau (REMB) said in an e-mail to BusinessWorld.

The renewable energy (RE) contracts for OCSP3 are expected to be signed by Energy Secretary Alfonso G. Cusi in the second week of April.

The launching and pre-submission of bids started on Tuesday, marking the beginning of the selection and bidding process.

The criteria for evaluation, as presented in the launch and pre-submission conference on Tuesday, said that RE applicants must submit legal documents, a work program, technical and financial qualifications.

Some of these were given a weight percentage. The work program — which consists of a literature review and resource exploration, strategies and methodologies — made up 40% of the evaluation.

The technical qualifications, which include details about the company’s performance, qualifications and technical resources, stood at 20%. Meanwhile, the financial qualifications, which consist of an available working capital, sources of current funds and other sources of future funds, took up 40%. Legal documents are on a pass or fail basis.

The DoE also listed a number of requirements that aspirants from different sectors must submit before moving to the opening of bids on Feb. 15.

Individuals or proprietors are required to furnish the agency with a Philippine Statistics Authority-issued birth certificate, business permit, a Department of Trade and Industry (DTI) registration if possible and a special power of attorney to negotiate and enter in an RE contract with the DoE.

Cooperations, joint ventures, consortiums, and cooperatives must submit by-laws and articles of incorporation, a board resolution authorizing a representative to negotiate and enter into an RE contract with the DoE, an updated general information sheet of the firm and its corporate stockholders, a business permit and organization chart.

Local government units are required to submit a council resolution approving the proposed project and authorizing its representative to negotiate and enter into an RE contract with the DoE.

Jeffrey G. Sayco, science research specialist at the DoE’s Geothermal Energy Management Division, said that applicants must also submit a passport ID or any valid government-issued ID of the authorized representative.

The technical requirements for interested bidders include: a work program, the company’s experience or track record, curriculum vitae of key management and personnel, curriculum vitae of technical consultants, and the list of existing company-owned and leased equipment.

The DoE also listed down the financial requirements that prospective bidders needed to submit. These include the latest annual report and/or audited financial statements (FS) for the last two years from filing date, a bank certificate to substantiate the balance in the FS, and projected cash flow statements for the next two years.

The agency said that those who wish to invest in geothermal and large hydro resources should submit projected cash flow statements for the next five years.

OCSP3 allows for 100% full foreign ownership for large-scale geothermal projects. Earlier, DoE-REMB’s Ms. Capongcol said that three out of five predetermined geothermal areas were open to full foreign ownership. These are Mt. Labo, Daklan, and Puting Lupa geothermal projects, which have a total potential capacity of 74 megawatts.

Last month, Mr. Cusi said that the agency had yet to receive applications from foreign investors interested in geothermal and biomass projects. — Angelica Y. Yang

BTr fully awards reissued bonds as high liquidity boosts demand

THE Treasury bureau fully awarded the reissued 10-year bonds it offered on Tuesday. — WIKIPEDIA.ORG

THE GOVERNMENT made a full award of the reissued Treasury bonds (T-bonds) it offered on Tuesday and even opened its tap facility as the tenor’s yield dropped amid strong liquidity in the market.

The Bureau of the Treasury (BTr) on Tuesday borrowed P30 billion as planned via the reissued 10-year bonds. The auction was more than thrice oversubscribed, with total bids reaching P98.67 billion.

The Treasury also opened its tap facility to raise another P20 billion via the bonds to accommodate the excess demand and take advantage of the low rates seen yesterday.

The reissued 10-year notes, which have a remaining life of four years and eight months, saw its average rate go down by 36.4 basis points (bps) to 2.536% from the 2.9% fetched in the Nov. 17 auction.

National Treasurer Rosalia V. de Leon said the bond auction was met with strong reception from the market, as seen in the oversubscription and the low rates fetched.

“Abundant liquidity coupled with cautious sentiment pulls sentiment to the belly of the curve,” Ms. De Leon told reporters via Viber after the auction on Tuesday.

A bond trader, meanwhile, said the average rate fetched for the reissued bonds was well within the market’s expectation of a 2.5-2.55% range.

“Basically, [investors are] deploying liquidity, [and] the yield pickup is nice. In general, the market is very liquid, awash with cash, so they need it to earn interest,” the trader said via Viber.

Financial markets have been awash with cash since last year as companies hold back on spending and expansion plans and prefer to park their excess funds in safe assets such as government securities amid an uncertain economic environment due to the pandemic.

Liquidity has also gotten a boost from the accommodative stance of the central bank, which last year slashed benchmark interest rates to record lows and also trimmed the reserve requirement ratio of banks.

The BTr plans to borrow P140 billion from the local debt market this month: P80 billion via weekly auctions of Treasury bills and P60 billion from fortnightly T-bond offerings.

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. — Beatrice M. Laforga

SMC says its tollways are ready to go 100% cashless by Jan. 11

SAN MIGUEL CORP. (SMC) on Tuesday said its tollways are ready to go 100% cashless by Jan. 11 after it hit its target to open 156 new radio-frequency identification (RFID) installation stations before the end of December.

In an e-mailed statement, SMC President and Chief Operating Officer Ramon S. Ang said: “Back in November, and again in mid-December, we committed to open over 100 new RFID stations in various locations before the end of the year.”

“Even as we were preoccupied with soft-opening our Skyway 3 and then had a long New Year’s break, I’m happy to report to the public that we also reached our target 156 Autosweep RFID installation stations last Dec. 29,” he added.

With the additional RFID installation stations, SMC is no longer seeing long lines towards the end of Jan. 11, Mr. Ang noted.

The Transportation department earlier set Dec. 1 as the deadline for toll operators to implement cashless payments, but the transition period will end on Jan. 11.

Toll operators will still be required to have lanes for the installation of RFID stickers beyond Jan. 11.

“With the amount of stickers we have already issued over the past few months, particularly from November through December when we started increasing the number of stations, coupled with now 156 total RFID stations that are well spread out through Metro Manila and neighboring cities and provinces, we see no major problems in serving the remaining number of motorists without stickers yet,” Mr. Ang explained.

SMC operates the STAR (Southern Tagalog Arterial Road) Tollway, South Luzon Expressway, Skyway, NAIA Expressway, and Tarlac-Pangasinan-La Union Expressway.

Mr. Ang reiterated SMC will retain its installation activities and “even expand programs to reach villages and barangays.” — Arjay L. Balinbin

BSP receives first application for a digital banking license

THE BANGKO SENTRAL ng Pilipinas (BSP) has received the first application for a digital banking license following the release of a framework for the sector in November.

“The application is a partnership of local and foreign players,” BSP Deputy Governor Chuchi G. Fonacier said in a Viber message.

Aside from the first applicant, Ms. Fonacier said there are four more parties that have expressed interest in applying for a digital bank license.

“Initially, the MB (Monetary Board) has set a limit of five digital banking licenses,” she added.

BSP Governor Benjamin E. Diokno on Tuesday said they will assess applicants on a first come, first serve basis.

“We will closely monitor the number of digital banking licenses issued, considering the overall banking situation and the risks posed by these banks to the industry and the quality of prospective clients,” Mr. Diokno said in an interview with ABS-CBN News Channel on Monday.

The central bank in November approved a regulatory framework for digital banks, which sets it apart from other lender classifications such as universal, commercial, thrift, rural, cooperative, and Islamic banks.

Under BSP Circular No. 1105 issued in December, interested parties seeking to apply for a digital banking license need to put up a minimum capital of P1 billion to establish their presence in the country. The framework also allows currently established brick and mortar lenders to convert to digital banks.

Digital banks will likewise be distinguished for having all-online customer processes and transactions while only maintaining a main office for management, support operation, and as point of contact for regulators.

CIMB Bank Philippines, Inc. and ING Bank N.V. Manila are currently offering online-only retail banking services and have been enticing the market through higher interest rates than what traditional banks offer. East West Banking Corp. unit Komo and the Diskartech App of Rizal Commercial Banking Corp. are also offering similar services.

Mr. Diokno has said they see digital banks helping expand Filipinos’ access to financial services.

He said these lenders can help the central bank reach its goal to bring 70% of the country’s adult population into the financial system and to have at least 50% of payments, both in volume and value, done digitally by 2023. — Luz Wendy T. Noble

Unit of Global Ferronickel projects rise in ore reserves

ORE RESERVES of a Global Ferronickel Holdings, Inc. (FNI) subsidiary have climbed by 37% to 59.45 million wet metric tons (WMT) based on its latest estimates, the parent firm told the local bourse on Tuesday.

The figure represents FNI’s projection of proven and probable ore reserves for its unit Platinum Group Metals Corp. (PGMC), as of Oct. 15, 2020. The increase in reserves were attributed to the exploration activities in PGMC’s Cagdianao (CAGA) Nickel Expansion Project in Dinagat Island, Surigao del Norte.

“The estimate represents a 37% increase from the 43.3 million wet metric tons reported during the same period last year,” FNI said in a regulatory filing.

It added that the CAGA nickel project’s estimated mine life is at 10 years. The firm also detailed its plans to conduct more exploration activities, excavate other minerals and develop a portion of its mining site into a conservation area.

“Continuous exploration is being conducted, especially in CAGA 2, CAGA 3 and CAGA 4, to extend the mine life further and to search for other potential resource commodities such as limestone and chromite. We are also looking at developing CAGA 5 into a biodiversity conservation area,” Dante R. Bravo, the president of FNI, said in a statement.

FNI said that China is the current destination of its ore shipments, and that its higher-grade ores would be exported to Japan “when the need arose.”

In November, the company, through PGMC, inked a nickel supply deal with Chinese firm Baosteel. Under the agreement, FNI would supply 1.3 WMT of nickel ore this year.

In its third-quarter report, FNI’s net income rose by 94.51% to P1.36 billion year on year. The firm previously told the local bourse that its mining operations from July to September climbed by 33% to P4 billion compared with the value in 2019.

FNI is a holding firm with principal business interests in mineral resource exploration, and the mining and exporting of nickel ore.

Shares in FNI on Tuesday inched up 1.01% to close at P2.99 apiece. — Angelica Y. Yang

1...7,0727,0737,074...12,670Page 7,073 of 12,670
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube