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Higher interbank ATM fees, release of bank NPLs drive profit-taking in BDO stock

By Marissa Mae M. Ramos, Researcher

THE latest banking system data published last week by the central bank and the subsequent profit taking by market players drove BDO Unibank, Inc.’s stock activity last week.

A total of 18.27 million BDO shares worth P2.01 billion were traded from Jan. 8 to 11, data from the Philippine Stock Exchange showed, making it the fifth most actively traded stock in the local bourse.

BDO’s share price dipped 1.8% on a week-on-week basis to P107 apiece on Friday. Year to date, the bank’s share price has gained by 1.9%.

“[I]nvestors digested the latest data about the tempered NPL (nonperforming loans) formation in December as well as the looming increase in fees for ATM transactions,” Unicapital Securities, Inc. Research Head Justin Lawrence J. Tembrevilla said on Thursday in an e-mail.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco saw last week’s trading activity as “investors choosing to book gains causing BDO to end the week in the negative territory.”

“In the prior trading week, BDO surged 8.24% week on week to P109,” he said in a separate e-mail.

Last week, several banks announced higher ATM transaction fees starting April 7 as they migrate to a new charging method where a cardholder is charged for a transaction based on the fees imposed by ATM owners. This is in contrast to the current issuer-based method wherein a fixed transaction fee is charged to the cardholder regardless of the owner of the ATM terminal where the transaction was made.

ATM withdrawal fees currently range from P10 to P15. With the new system, these charges are expected to range higher from P10 to P18. BDO is set to charge P11 per withdrawal and P2 per balance inquiry done by non-cardholders in its ATMs.

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday gross NPL ratio of banks easing to 3.61% in December from 3.78% as of end-November, but higher than the 2.08% logged in 2019. Still, the latest figure was better than the 4.6% projection by the BSP for end-2020.

NPLs include credit left unpaid at least 30 days beyond the due date, which are considered as risky assets for banks as these have a high risk of default.

The decline in December ended a 10-month streak of increase in bad loans. However, analysts are expecting this to be temporary as the 60-day moratorium introduced by Republic Act No. 11494 (Bayanihan to Recover as One Act) expired in end-2020.

“We believe that its fundamentals remained intact despite the pandemic. We also note that BDO had the cheapest funding cost and the highest net interest margin (NIM) among the ‘Big Three’ as of Sept. 2020,” Mr. Tembrevilla said, referring to the ratio that measures a bank’s efficiency in investing funds by dividing annualized net interest income to average earning assets.

“We forecast full-year 2020 net income to hit P27.8 billion, a 38% decline from 2019, weighed by the accelerated loan loss provisions,” he added.

Philstocks’ Mr. Tantiangco noted that BDO in the nine months to September increased its loan loss provisions by more than five times to P23.8 billion that dragged its net income by 48.2% to P16.62 billion.

“Still, we saw some bright spots in the company’s results. Net interest income in the first nine months of 2020 posted a 13% year on year growth. Net interest margins at that time stood at 4.36%, higher than the same period in the prior year’s 4.12%, and the bank’s 2015-2019 average of 3.54%,” he said.

For the third quarter alone, the listed bank posted a 3.2% year on year increase in its net income attributable to parent to P12.33 billion.

“Moving forward, for 2021, we’re projecting a 17% growth in BDO’s net income attributable to parent. This is hinged upon the expectation that business and consumer confidence… will continue to improve, which in turn, would lead to more bank lending activities,” Mr. Tantiangco added.

He sees the support range from P100 to P103.50 apiece and resistance from P114 to P115 in the coming weeks.

Yields on gov’t debt rise on inflation

YIELDS ON government securities (GS) went up last week as inflation continued to pick up to reach a two-year high in January.

GS yields, which move opposite to prices, rose by a week-on-week average of 6.13 basis points (bps), based on the BVAL Reference Rates published on the Philippine Dealing System’s website as of Feb. 11.

Financial markets were closed on Friday in observance of Chinese New Year.

Yields on benchmark tenors increased on Thursday from their Feb. 5 finish, except for those on the 91- and 182-day Treasury bills (T-bills), which declined by 6.64 bps and 5.55 bps, respectively, to 0.9744% and 1.1489%.

Meanwhile, the rate on the 364-day T-bills edged up by 1.66 bps to 1.4323%.

At the belly of the curve, yields on the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) rose by 8 bps (to 1.8632%), 9.64 bps (2.1702%), 8.97 bps (2.43%), 7.40 bps (2.6386%), and 5.74 bps (2.8842%), respectively.

At the long end, the 10-, 20-, and 25-year papers yielded 3.1139%, 4.0656%, and 4.0736%, rising by 8.76 bps, 10.22 bps, and 19.18 bps, respectively.

“Local yields increased [last] week as the bond market mainly reacted from the stronger-than-expected inflation report for January,” a bond trader said in an e-mail.

“With inflation expected to remain on the high side in the coming months, yields have adjusted higher [last week] to cover for higher-than-expected price upticks,” First Metro Asset Management, Inc. (FAMI) said in a separate e-mail.

The Philippine Statistics Authority reported earlier this month that January inflation rose for the fourth consecutive month to a two-year high of 4.2%, faster than the 3.5% pace recorded last December as well as the 2.9% a year ago, amid surging food and transport prices.

“As BSP views the uptrend in inflation as transitory, policy rates were kept unchanged. The successful implementation of price caps and relaxation in imports to address the supply shocks is crucial to anchor inflation expectations,” FAMI said.

The three- to five-year bonds saw some volatility following the government’s ongoing offer of fresh retail Treasury bonds (RTBs) that were priced at 2.375% last week, it added.

The Bureau of the Treasury on Tuesday raised an initial P221.218 billion from the three-year RTB during the rate-setting auction. The papers due 2024 attracted tenders worth P284.183 billion, above the P30-billion program, and fetched a rate of 2.375%.

These bonds, which target individual and retail investors, are being offered in denominations of P5,000. These notes will be issued on March 9 and will mature on March 9, 2024.

The government plans to borrow nearly P3 trillion this year from foreign and domestic lenders to help plug its budget deficit seen to hit 8.9% of the country’s economic output.

“In the near term, GS yields will likely continue trading range-bound as market participants focus on the RTB 3-11 issuance and digest comments from the BSP’s (Bangko Sentral ng Pilipinas) policy decision meeting [last Thursday],” FAMI said.

The central bank on Thursday kept benchmark interest rates at record lows to support the Philippine economy’s recovery from the coronavirus pandemic.

In its first policy setting for the year, the Monetary Board maintained the overnight reverse repurchase rate at its record low of 2%. The lending and deposit facilities were likewise kept at 2.5% and 1.5%, respectively.

However, the central bank revised the 2021 inflation average forecast upwards to 4%, hitting the upper end of its 2-4% target for the year, from 3.2% previously amid soaring food prices.

The BSP, meanwhile, trimmed its inflation forecast for next year to 2.7% from 2.9% previously.

“The upward revision of BSP’s inflation forecast for 2021 at 4% from 3.2% seemed to support views of elevated short-term inflation which might push local bond yields slightly higher,” the bond trader said. — Jobo E. Hernandez

Tarlac acquires 30 Hyundai modern jeepneys to boost public transportation

HYUNDAI ASIA Resources, Inc. (HARI), through Hyundai Trucks and Buses Cabanatuan, turned over 30 units of the Class-2 HD50S Modern Jeepney to the Tamogepa (Tarlac-Moncada-Gerona-Paniqui) Transport Service Cooperative. This helps to ramp up public transportation modernization initiatives in Tarlac.

The 36-year-old cooperative is considered a major transport organization in Central Luzon. An additional 45 units of the modern jeepney model are set for delivery within the year. Land Transportation Franchising and Regulatory Board (LTFRB) Region III Director Ahmed G. Cuizon, who was present at the turnover, stressed the importance of continuing to modernize the country’s mass transport system to elevate the dignity of the Filipino commuter, uplift the livelihood of numerous PUV drivers and transport cooperatives, and contribute to social progress.

Hyundai Trucks and Buses Cabanatuan President Dennis San Juan expressed the company’s commitment to transport modernization in the region by providing complete after-sales services and other pertinent assistance to maintain the quality and road-worthiness of the Hyundai modern jeepneys.

The jeepney model is powered by a 2.9-liter Euro 4-compliant CRDi diesel engine, which promises better fuel efficiency, reliability, and cleaner emissions. It is designed for enhanced stability and power-to-weight ratio, boasting a 3,415-millimeter wheelbase. The vehicle also features roof-mounted air-conditioning, contactless payment using the Auto Fare Collection System (AFCS), Wi-Fi, GPS tracking, CCTV cameras, a seven-inch monitor, and speed limit warning buzzer. It can accommodate 22 seated passengers as well as up to 10 standing commuters.

The HD50S Modern Jeepney Class 2, along with the Hyundai H-100 Class 1 Modern Jeepney received the Department of Transportation (DoTr) Certificate of Compliance (CoC) in 2019. Last year, the Hyundai HD50S Class 3 was also granted its CoC, completing Hyundai’s power trio of fully certified modern jeepneys that meet Philippine National Standards (PNS).

Just how much is the Philippines’ national response capacity at risk of being overwhelmed by the coronavirus pandemic?

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Peso to extend gains vs dollar on BSP decision

THE PESO will likely strengthen versus the dollar this week on the expected arrival of the vaccines in the country and following signals from the central bank that it would keep rates low to support the economy.

The local unit inched down to close at P48.045 per dollar on Thursday from its Wednesday finish of P48.038, data from the Bankers Association showed. Financial markets were closed on Friday for the Lunar New Year holiday.

Week on week, the peso climbed by 2.5 centavos from its P48.07-per-dollar close on Feb. 5.

The peso closed barely changed on Thursday due to market expectations that the Bangko Sentral ng Pilipinas (BSP) would maintain interest rates at record lows due to the sustained spike in inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

The central bank on Thursday kept its benchmark interest rates at their current record lows to support the Philippine economy’s recovery from the coronavirus pandemic.

In its first policy setting for the year, the Monetary Board maintained the overnight reverse repurchase rate at a record low of 2%. The lending and deposit facilities were likewise kept at 2.5% and 1.5%, respectively. The decision was announced after markets closed on Thursday.

Headline inflation reached a two-year high at 4.2% in January as prices of meat and vegetables spiked due to supply shortages.

Meanwhile, the BSP raised its average inflation forecast for the year to 4%, the upper end of its 2-4% target for the year, from 3.2% previously.

On the other hand, it lowered its inflation forecast for next year to 2.7% from 2.9% previously.

Another factor that affected the foreign exchange trading last week was the government’s ongoing retail Treasury bond (RTB) sale, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

The Bureau of the Treasury sold an initial P221.218 billion in three-year RTBs during the rate-setting auction on Feb. 9 as total bids reached P284.183 billion.

The bonds fetched a coupon rate of 2.375%, 200 bps lower than the 4.375% rate quoted for the RTBs sold in February 2020. The offering is set to run until March 4, unless closed earlier.

For this week, the peso will likely tread sideways versus the greenback as the market factors in central bank signals that its policy will remain accommodative.

Monetary Board Member Felipe M. Medalla said last Tuesday that raising the policy rate “is not in the picture” and assured the central bank has a lot of space “for very accommodative policy.”

Meanwhile, Mr. Ricafort said investors will continue to monitor developments on the delivery of coronavirus vaccines. About 117,000 doses of Pfizer vaccines are expected to reach the country within this month.

Vaccine czar Carlito G. Galvez, Jr. earlier said at least 5.6 million doses of Pfizer and AstraZeneca would arrive in the country within this quarter.

For this week, Mr. Ricafort gave a forecast range of P47.99 to P48.09 while Mr. Asuncion expects a wider trading band of P47.90 to P48.10 per dollar. — L.W.T. Noble

Shares to move sideways on profit taking, BSP

THE MARKET is expected to trade sideways this week as investors look forward to the start of the government’s coronavirus disease 2019 (COVID-19) vaccination program and following the central bank’s decision to keep interest rates at their current record lows.

The benchmark Philippine Stock Exchange index (PSEi) declined by 91.14 points to close at 6,991.01 on Thursday from its 7,019.18 close on Feb. 5. Financial markets were closed on Friday in observance of Chinese New Year.

The market’s average value turnover went up by 23.97% last week to 12.36 billion.

“The local index closed the week in the red after attempting to head higher through the week. The market’s strength early in the week was likely driven by global investor optimism on renewed recovery and vaccine prospects. However, this strength eventually faded as prices hit resistances, and investors took profits following the gains over the past two weeks,” China Bank Securities Corp. Research Head Rastine Mackie D. Mercado said in an e-mail on Thursday.

“Foreign funds also notably turned weekly net buyers [last] week following several weeks of net foreign selling. It will be important to monitor if this net foreign buying is sustained through the following weeks as this may signal a possible inflection point in foreign fund flows,” Mr. Mercado said.

Meanwhile, Summit Securities president Harry G. Liu said the market’s movement will depend on the economic outlook, which he said would hinge on the government’s COVID-19 inoculation program.

“We’re still trying to develop a reversal on the total market. Basically, I think the important fundamental is [for] the vaccination to be successful in the coming months so that the economy can go back to improvement,” Mr. Liu said by phone on Saturday. “So, I feel for the meantime, the market will still go on in medium- to long-term consolidation,” he added.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in an e-mail that the arrival of the first batch of COVID-19 vaccines this month will be a major catalyst for the market.

“For the coming days or weeks, any further measures to reopen the economy would help support better economic recovery prospects as well as investment valuations,” Mr. Ricafort said.

Meanwhile, the result of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting last week might cause investors to pocket their recent gains. The BSP on Thursday kept benchmark interest rates at record lows to support the Philippine economy’s recovery from the coronavirus pandemic.

RCBC’s Mr. Ricafort placed the PSEi’s immediate resistance at the 7,100 level. Meanwhile, China Bank Securities’ Mr. Mercado sees the index moving between 6,900 and 7,130 this week.

“We expect the PSEi to trade sideways in the coming week as investors shift their focus to the government’s vaccine rollout. Moreover, we may see some reactive moves on Monday following the BSP’s policy meeting,” Mr. Mercado added. — K.G. Valmonte

Local COVID-19 infections nearing 550,000

THE Department of Health (DoH) reported 1,928 coronavirus cases on Sunday, bringing the total to 549,176.

The death toll rose to 11,515 after eight more patients died, while recoveries increased by 10,967 to 511,743, it said in a bulletin.

There were 25,918 active cases, 86% of which were mild, 7.2% did not show symptoms, 3% were critical, 2.9% were severe and 0.91% were moderate.

More than 7.8 million Filipinos have been tested for the coronavirus as of Feb. 12, according to DoH’s tracker website.

The coronavirus has sickened about 109.1 million and killed more than 2.4 million people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization (WHO).

About 81.2 million people have recovered, it said.

It added that active cases stood at 25.4 million, less 1% of which or 98,708 were either serious or critical.

The United States had the most infections at 28.2 million, followed by India with 10.9 million and Brazil with 9.8 million. The US also had the most deaths at 496,063, Brazil had 238,647 and India had 173,771.

The DoH on Friday reported 19 more cases infected with a more contagious coronavirus strain, bringing the total in the Philippines to 44.

Of the 19 cases, three came from the Davao region — a 10 year-old boy, a 54 year-old woman, and a 33 year-old male. They had no known links to each other and had mild symptoms.

Two came from the Calabarzon region — a 20 year-old young woman who was swabbed and had an unknown exposure on Dec. 22. The other was a 76 year-old woman who was exposed to a patient on Jan. 21 and had mild symptoms.

Eight others were returning Filipinos from overseas aged 28 to 53 years and tested at different laboratories. Six of them had been isolated, while two had recovered, DoH said.

The agency said more six cases were still being verified if they were locals or returning migrant Filipinos.

“Case investigation and contact tracing shall also immediately be initiated by the DOH through the Centers for Health Development and regional epidemiology and surveillance units, in close coordination with concerned local government units and health offices, local epidemiology and surveillance units, and law enforcement,” it said.

ENTERTAINMENT
Meanwhile, Philippine cinemas would be allowed to operate with up to half their capacity in areas under a general lockdown, according to the Trade department.

Movie theaters can fill half their seats in these areas and up to 75% of seats in areas under a modified general quarantine, Trade Secretary Ramon M. Lopez told reporters in a mobile message on Sunday.

The government recently allowed cinemas and other leisure establishments such as arcades, cultural centers, theme parks and tourist attractions to resume operations in areas under a general community quarantine (GCQ).

Movie industry revenues shrank to P1.3 billion last year from the usual P13 billion after cinemas shut during the lockdown, Mr. Lopez said.

He added that about 300,000 workers rely on the industry, which include film production, distribution and movie theaters.

Metro Manila mayors have expressed reservations about the decision, saying local government leaders had not been consulted.

Metro Manila Council Chairman and Parañaque City Mayor Edwin D. Olivarez said the council might appeal against the reopening of cinemas, noting that they are enclosed spaces.

People who stay in an enclosed space for at least an hour with people with coronavirus symptoms could be at higher risk of infection, according to the World Health Organization.

The presidential palace earlier said the Philippines was expected to start inoculating Filipinos against the coronavirus this month as it takes delivery of vaccine orders.

The government expects to vaccinate as many as 70 million citizens against the coronavirus by yearend, vaccine czar Carlito A. Galvez, Jr. said this month.

The country will get about 10 million doses of vaccines under a global initiative for equal access this quarter, including 117,000 doses from Pfizer, Inc. that might arrive this month, he said.

The government seeks to inoculate 70 to 80 million Filipino adults to achieve herd immunity, he added. The vaccine doesn’t need to be given to all Filipinos based on herd immunity, when a large portion of the population becomes immune to the disease, making its spread unlikely. — Vann Marlo M. Villegas and Jenina P. Ibañez

International court urged to try Duterte for mass murders

THE FAMILIES of suspected pushers killed in the government’s war on drugs have asked the International Criminal Court (ICC) to admit more evidence about President Rodrigo R. Duterte’s alleged crimes against humanity.

In a 10-page motion dated Jan. 21 but released only at the weekend, seven people and human rights group Rise Up for Life and for Rights cited a United Nations High Commissioner for Human Rights report in June 2020 that “clearly detailed widespread, unrelenting human rights abuses and violations related to the war on drugs.”

At least 8,663 people have been killed based on official figures — 73 of them children — although some estimates put the toll at 27,000, the plaintiffs said in their pleading, a copy of which was e-mailed by their lawyers.

“The killings have continued in the midst of the pandemic crisis,” they said, citing Amnesty International.

Given the failure of local agencies to ensure accountability, “there is a need for independent, impartial, credible investigations into all allegations of serious violations of human rights and international humanitarian law.”

Presidential spokesman Harry L. Roque, Jr. did not immediately reply to two mobile phone messages seeking comments.

The ICC was set up in 2002 to probe and prosecute genocide, crimes against humanity and war crimes when local courts failed to do so. The Philippine Senate in 2011 ratified the court’s founding document.

Local government units (LGUs) have now adopted the tactics used in the war on drugs to control the spread of the COVID-19 virus, the plaintiffs said.

“The police, basing their assessment only through hearsay by neighbors, will conduct house-to-house searches for people who might have been infected with the novel coronavirus and then forcibly relocate them to government-run isolation facilities,” they added.

They also accused Mr. Duterte of impeding justice when he threatened outgoing ICC Prosecutor Fatou Bensouda with arrest if she tried to investigate him in the Philippines.

“You cannot exercise any proceedings here without basis,” he said at that time. “That is illegal and I will arrest you.”

“The ICC prosecutor should immediately initiate an investigation in relation to these offenses against the administration of justice,” the plaintiffs said.

“Respondent Duterte should be held accountable for his blatant attempt to pervert the course of justice by intimidating and retaliating against the officials of the court,” they added.

The group said the threat against ICC and Ms. Bensouda violated the Rome Statute, which prohibits “impeding, intimidating or corruptly influencing an official of the court for the purpose of forcing or persuading the official not to perform, or to perform improperly, his or her duties.”

The Philippines in 2019 withdrew from the ICC after it opened a preliminary probe of the Duterte government for alleged human rights violations in connection with his drug war that has killed thousands.

Mr. Duterte had said the ICC does not have jurisdiction over him, noting that the Rome Statute was never published in the country’s official journal. — Kyle Aristophere T. Atienza

Suspicious reports surged after updated terror law — AMLC

SUSPICIOUS transaction reports related to terrorist financing surged in the past quarter after an updated Philippine law against terror took effect, according to the Anti-Money Laundering Council (AMLC).

The reports submitted by financial institutions to the agency also surged almost 14 times last year to 7,230 from 524 in 2018, it said in a study.

The study supported previous findings that the Philippines is a destination country for illicit flows as the bulk of remittance-related suspicious transaction reports in terms of value were funds going into the country, the AMLC said.

International remittances accounted for 91% of the total remittance-related suspicious transaction reports.

It said it expects financial institutions to file more reports after the government tagged more local threat groups as domestic terrorists in December.

Nearly half of the filed reports related to terrorism and terrorism-financing were remittances — P579.31 million international inward remittances and P29.92 million within and sent elsewhere.

Meanwhile, the value of domestic inward and outward remittances cited in suspicious transaction reports stood at P19.49 million and P8.93 million, respectively.

The AMLC said majority of the reports involved less than P5,000, which showed that terrorism financing used structured small amounts of frequent transactions with no specific patterns.

A fifth of the transactions had values ranging above P100,000 to P500,000, while 17% were P10,000 and more but lower than P100,000. — Luz Wendy T. Noble

Nationwide round-up (02/14/21)

Tax exemption sought for donated COVID-19 vaccines, other supplies

A SENATOR is seeking to exempt donated vaccines and other medical supplies used for the coronavirus response from donor’s tax. Senator Juan Edgardo M. Angara filed Senate Bill No. 2046, which proposes the tax holiday to be in effect starting this year to 2023. “In order to bolster the supply of vaccines, this bill makes it easier to accept donations of critical products, essential goods, equipment or supplies needed to contain and mitigate COVID-19 (coronavirus disease 2019), including the vaccines, by exempting these from donor’s tax for a definite period, subject to certain conditionalities,” Mr. Angara said in his explanatory note. The measure covers raw materials for personal protective equipment (PPE), all drugs, vaccines medical devices for treatment, equipment for waste management and other supplies as well as equipment as determined by the Department of Health (DoH) and the Department of Trade and Industry (DTI). The donated material “shall not be intended for commercial use and shall be for free distribution to or use for the containment or mitigation of COVID-19,” the bill states. The donations will be subject to post audit by the Bureau of Internal Revenue or the Bureau of Customs, rules of deductibility under the National Internal Revenue Code and applicable rules and issuances of the BIR, it read. — Vann Marlo M. Villegas

Expanded list of foreigners allowed entry takes effect Feb. 16

IMPLEMENTATION of the expanded list of foreigners who are allowed to enter the country will start Tuesday, February 16, according to Immigration Commissioner Jaime H. Morente. Under Resolution No. 98 issued by the national task force handling the coronavirus response, foreign nationals with valid working visas, student visas, Special Visa for Employment Generation, and Special Investors Residence Visa are now allowed entry. Holders of Special Resident and Retirees Visa and temporary visitor’s visa are also allowed to enter provided they present an entry exemption document from the Department of Foreign Affairs (DFA). Mr. Morente also clarified that “those whose visas were issued after March 20 (2020) would still need to present an exemption.” An earlier resolution by the task force already opened the country’s border for those traveling with a Filipino or former Filipino spouse, while nationals of visa-free countries under Executive Order 408 are allowed a visa-free entry, or the “balikbayan privilege,” explained BI Port Operations Division Chief Candy N. Tan. Protocols such as pre-booked accommodation in an accredited quarantine hotel or facility remain in effect. — Bianca Angelica D. Añago

Solons give contrasting timetable for charter amendments

DEBATES on the proposed economic amendments in the 1987 Constitution will be pushed to next week, according to one lawmaker, but another said the resolution is set to be heard by Monday, Feb. 15. AKO BICOL Party-list Rep. Alfredo A. Garbin, Jr., chair of the House of Representatives committee on constitutional amendments, said sponsorship and debates will begin next Monday, Feb. 22. “It’s already referred for the plenary sponsorship and plenary debates will start on Feb 22,” he said in a mobile message to BusinessWorld. The resolution will insert the phrase “unless otherwise provided by law” to specific provisions in the constitution concerning economic matters. The measure was approved last February 2. On the other hand, Marikina 2nd District Rep. Stella Luz A. Quimbo said in a statement the measure is due to be heard on the 15th. Ms. Quimbo stressed the need to work on the proposed amendments fast, adding that revising certain provisions in the constitution to allow more foreign equity will help boost the economy while it recovers from the economic impact of the coronavirus pandemic. “We need to act now. We need to introduce flexibility into the economic provisions of our Constitution so that the Legislature has leg room to steer the economy according to the demands of the time,” she said. — Gillian M. Cortez

Voter registration schedule adjusted to Tue-Sat

VOTER registration starting this week will be adjusted to Tuesday to Saturday, from 8 a.m. to 5 p.m., the Commission on Elections (Comelec) announced on Sunday. “All Offices of the Election Officer (OEO) nationwide will be open to receive applications for voter registration from Tuesdays to Saturdays, including holidays, from 8:00 A.M. to 5:00 P.M. The new schedule will be implemented beginning February 15, 2021,” the poll body said in a statement. Comelec offices will be closed Mondays for disinfection. Comelec is targeting four million new voter registrations by end-September. Over a million have so far registered since the start of the registration period last year. A national and local election is scheduled May 2022. — Gillian M. Cortez

Labor groups push for gov’t ratification of ILO convention vs harassment, violence

TWO labor groups on Sunday called on the government to ratify an International Labor Organization (ILO) convention that prevents harassment and violence in the workplace and other related venues as they commemorated the 26th year since the enactment the Philippine’s Republic Act 7877 or the Anti-Sexual Harassment Act. In a statement, the Associated Labor Unions and Building and Wood Workers International said the government’s ratification of ILO Convention 190 will help in promoting and realizing “the right of everyone to a world of work free from violence and harassment.” ILO’s Violence and Harassment Convention, 2019 (No. 190) was first adopted by the organization in 2019. Only six countries have so far ratified the convention. The convention covers protection against inappropriate and violent actions that arise from the workplace; places during work related trips, training, and other similar activities; work-related communication; in employer-provided accommodations; and during commuting to and from work. — Gillian M. Cortez

Regional Updates (02/14/21)

Panglao preparing for diving fiesta in May as travel bubble opened to mainland Bohol

PANGLAO is gearing up for its 2nd Panglao International Dive Fiesta on May 4-9, with health protocols and other procedures being firmed up to ensure the safety of participants, other guests, and the island’s residents. Mayor Leonila P. Montero, who presides over the inter-agency task force (IATF) on coronavirus, said one of the adjustments being undertaken is the transfer of the handling of arriving guests to the Municipal Tourism Office from the Public Employment Office. Meanwhile, tourists in Panglao are now allowed to go out of the island bubble to mainland Bohol subject to guidelines issued by Governor Arthur C. Yap. Under Executive order No. 7, Panglao guests can go to mainland sites “after yielding a negative RT-PCR test result five days upon arrival in Panglao.” Salive RT-PCR test and rapid antigen test are accepted for long-staying tourists. Guests are also required to coordinate with the Panglao municipal government to ensure that inter-island movements are properly recorded. All those going to Bohol, including Panglao, must pre-register through www.tourism.bohol.gov.ph.

CEBU ALSO OPEN
The neighboring province of Cebu also announced last week that it is reopening to tourists “from anywhere in the country.” The province was among the first in the country to allow tourism activities to resume for residents. “So it could be to go visit some relatives here, for business, or more importantly, for tourism,” Governor Gwendolyn F. Garcia said during a meeting with the coronavirus disease 2019 (COVID-19) task force on Feb. 11. The provincial government said visitors staying solely in resorts and hotels will only need to show their pre-booked reservations while those going to tourism sites will have to pre-register through www.discover.cebu.gov.ph. Cebu province’s guidelines do not cover the independent cities of Cebu, Lapu-Lapu, and Mandaue. — MSJ 

Davao City universities tapped as vaccination venues

PRIVATE and state-owned universities in Davao City are opening their campuses as coronavirus disease 2019 (COVID-19) vaccination sites in addition to designated public elementary schools, according to City Health Officer Ashley G. Lopez. During the simulation exercise held Friday, Mr. Lopez said among those that have signed up as venues include the University of Mindanao, Ateneo de Davao University, and the University of the Southeastern Philippines. He added that discussions are ongoing with the University of Immaculate Concepcion. The city government is targeting to have at least one vaccination site in each of the 11 administrative districts. Mr. Lopez also said the simulation held at Mabini Elementary School, which included a going through the inoculation process, went well. “In terms of the flow, it was smooth because they have a good set up from the gym for the orientation and screening, then registration, counseling to vaccination process,” he said in a mix of Filipino and English. The exercise included the transport of COVID-19 vaccines that require up to -80 celsius temperature from the Southern Philippines Medical Center and the Los Amigos Molecular Laboratory. Meanwhile, former city health officer Joy J. Villafuerte, who was recently designated to lead the vaccination program, said there is a need to strengthen the information campaign on the importance of getting vaccinated. “The vaccine is already coming. We set up facilities. The city has put a lot of programs. We need to push it more to ensure that more people will get vaccinated and we do not waste our efforts,” she said in a mix of Filipino and English. The local government is targeting to innoculate around 1.2 million individuals out of the over 1.6 million population. — Maya M. Padillo

Bill filed to strengthen Laguna Lake agency

A senator filed a bill to strengthen the powers of Laguna Lake Development Authority (LLDA) for the rehabilitation of Laguna de Bay. Senator Richard J. Gordon filed Senate Bill No. 2047, which will repeal Republic Act No. 4850 or the Laguna Lake Development Authority Act of 1966. Mr. Gordon said under the existing law, the authority exercises policy and planning, regulatory and development functions but does not have control over all projects affecting the Laguna de Bay area. There are also overlapping and conflicting mandates and programs of several agencies and local governments. Among the current problems faced by the LLDA involve solid waste management, sanitation, congestion of shore lands, and decline in water quality, among others. “This bill seeks to expedite the restoration and rehabilitation of Laguna Lake and improve its water quality so it can be used as a major domestic water source for Metro Manila and nearby provinces,” Mr. Gordon said in the explanatory note. “The proposed measure also aims to strengthen the policy-making and regulatory powers of the LLDA, in order that it can realize the vision of a self-sufficient and highly dynamic integrated water management authority, with competent and professional personnel who take the lead towards the sustainable development of the Laguna de Bay,” he added. The Laguna Lake area covers the provinces of Laguna and Rizal, cities of Pasay, Caloocan, Quezon, Makati, Manila, Mandaluyong, San Juan, Pasig, Marikina, Muntinlupa, Tagaytay, Tanauan, Taguig and Lipa, as well as some towns in Cavite, Quezon, Batangas, and the town of Pateros. — Vann Marlo M. Villegas

PHL FDI ‘growth’ in 2020 reflects different UNCTAD methodology

By Jenina P. Ibañez, Reporter

THE Philippines’ foreign direct investment (FDI) performance in 2020 has become the subject of contention after the United Nations Conference on Trade and Development (UNCTAD) projected that the country “bucked the trend” in Southeast Asia with a gain of 29% to $6.4 billion.

The UNCTAD estimate diverges sharply from the official statistics put out by the Bangko Sentral ng Pilipinas (BSP), which reported FDI to have fallen 10.8% to $5.8 billion as of the first 11 months of 2020.

“The discrepancy is so large that I find it difficult to believe. One is negative; the other is positive,” George N. Manzano, University of Asia and the Pacific economist and former tariff commissioner, said in a phone interview.

An UNCTAD official, Astrit Sulstarova, who heads the UN agency’s FDI and Trends Data section, said in an e-mail that the difference is down to how funds flows are measured, with the central bank basing its FDI assessment on “assets and liabilities” moving in and out of the country, and UNCTAD using a “directional” approach.

This means that a Philippine-resident firm’s lending to its foreign affiliate, for example, would be classified as an asset in favor of the Philippines under one approach and an outward flow from the Philippines in another.

Under the central bank’s accounting, equity and lending of Philippine-resident firms in foreign affiliates would be considered assets for the Philippines. According to a paper from the Organisation for Economic Co-operation and Development, this accounting approach takes the view that “those investments are claims they have on assets in foreign countries.”

On the other hand, UNCTAD’s directional method would classify equity and lending of Philippine-resident firms to their foreign affiliates as outward flows, not assets.

The approaches are different because the BSP has been using a newer version of an international investment manual since 2013, a bank representative said in a mobile message.

UNCTAD uses the older version of the manual, Mr. Manzano said, to consistently assess data across various countries using the same methodology.

Although domestic economists believe both methodologies are sound, they are inclined to believe that FDI to the Philippines fell last year.

A definitive investigation into the divergence of the results from the two organizations, Mr. Manzano said, would require a detailed accounting of all FDI data added and subtracted under each method.

“I tend to believe BSP’s negative more than the positive,” he said. “I don’t have any evidence. Just like a hunch — if I had to make a bet, I’d bet in BSP because how can foreign direct investment increase when everyone’s locked down?”

Asian Institute of Management Economist John Paolo R. Rivera said he prefers information from the BSP, which he believes more credibly reflects the country’s economic situation.

“Intuitively speaking, I would surmise that FDIs in the Philippines declined, consistent with the data from BSP. It is a pandemic and most businesses (both foreign and local) are holding on to cash because we do not know when everything will normalize,” he said in an e-mail.

Countries that were relatively quicker to contain the pandemic, he said, secure more FDI from investors directing money to a foreseeably stable economy.

Ser Percival K. Peña-Reyes, an economist at Ateneo de Manila University, said in an e-mail that he is inclined to follow BSP data, the official source from which international groups like UNCTAD base their own studies.

BSP measures both the influx of new FDI and the reinvestment of existing capital or intercompany lending. The latter, or the decline in FDI created by previous investment in the country, he noted, pulled down the overall FDI total in the Philippines last year.

“The Philippines should also work to ensure that it keeps its existing FDI,” he said.

The decline in investment generated by existing FDI, he added, “might indicate a decline in foreign investors’ confidence in our COVID-19 crisis management, which, of course, would have implications on our growth prospects.”

Although the Philippines did not post the largest contraction in Southeast Asia in the first nine months last year, Mr. Peña-Reyes said, Thailand and Vietnam returned positive growth rates, which he attributed to the economic confidence brought on by their management of the crisis.

“I think our dismal economic performance and our poor handling of the COVID-19 crisis will make it difficult for us to attract FDI. Our main concern should be how to restore confidence in our economy,” he said.

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