Peso inches lower as market eyes US policy
THE PESO slipped further against the dollar on Tuesday as investors stayed on the sidelines ahead of the inauguration of the incoming president of the United States on Wednesday.
The local currency shed 0.3 centavo to close at P48.078 versus the dollar on Tuesday from its P48.075 finish on Monday, data from the Bankers Association of the Philippines showed.
The peso started the session stronger at P48.06 per dollar. It weakened to as lows as P48.082 while its intraday best was at P48.055 against the greenback.
Dollars traded increased to $650.6 million yesterday from $418.7 million on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the sideways movement of the peso versus the dollar to the inauguration of US President-elect Joseph R. Biden, Jr. and Vice-President-elect Kamala G. Harris on Wednesday.
“The peso exchange rate is little changed as the markets are anticipating Biden’s inauguration on Jan. 20, Janet Yellen confirmation and signals on the policy on US dollar, US stimulus,” Mr. Ricafort said in a Viber message.
A trader shared the same view, adding “the local currency might remain contingent on political developments surrounding the US presidential inauguration.”
The dollar dropped on Tuesday as investors prepared for US Treasury Secretary nominee Janet Yellen to talk up the need for major fiscal stimulus and commit to a market-determined exchange rate when she testifies later in the day, Reuters reported.
Mr. Ricafort added that markets are also waiting for the latest local trade deficit data. The Philippine Statistics Authority will report the December and full-year 2020 trade data on Thursday.
He expects the peso to trade within a tight range of P48.05 to P48.10 against the greenback on Wednesday, while the trader sees it settling between P48 and P48.20. — B.M. Laforga with Reuters
Local shares close lower on lack of fresh leads
STOCKS closed lower for the third straight day on Tuesday amid a lack of positive catalysts for the market and continued uncertainty over the country’s economic outlook.
The bellwether Philippine Stock Exchange index (PSEi) fell 4.99 points or 0.07% to close at 7,198.45 yesterday, while the broader all shares index dropped 1.56 points or 0.04% to end at 4,319.74.
AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail that the market closed lower on last-minute buying.
“Gains in BDO Unibank, Inc. offset losses of industrial giant Universal Robina Corp. (URC) and blue chip telecommunication giants Globe Telecom, Inc. and PLDT, Inc.,” Mr. Mangun said.
Shares in BDO picked up 1.37% or P1.50 to close at P111 apiece on Tuesday. Meanwhile, Globe shares retreated 1.90% or P40 to finish at P2,060 each; PLDT shares declined 2.74% or P40 to close at P1,420 apiece; and URC fell 3.03% or P4.80 to end at P153.80 per share.
“Investors are still uncertain and are not willing to justify higher valuations for blue chips. Most are on the sidelines, waiting for more signs of economic recovery,” Mr. Mangun said.
Philstocks Financial, Inc. Research Associate Claire T. Alviar said the local bourse ended in red territory amid the lack of catalysts.
“The overvaluation of the PSEi in terms of the price-to-earnings ratio is pushing traders to trade stocks outside the index where positive sentiment is present,” Ms. Alviar said in a mobile phone message.
“Investors could only return to the index stocks once there’s a fresh catalyst already in the market that may break the current resistance of 7,300,” she added.
Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said in a mobile phone message that the local market retreated as investors are monitoring other countries that will impose stricter quarantine measures due to the ongoing spread of the new coronavirus disease 2019 strain.
Majority of sectoral indices at the PSE ended lower on Tuesday. Industrials fell 165.17 points or 1.74% to 9,335.58; services declined 16.30 points or 1.05% to 1,539.68; property shrank 14.99 points or 0.41% to 3,646.49; and mining and oil retreated 28.20 points or 0.29% to 9,613.93
Meanwhile, holding firms improved 65.58 points or 0.89% to 7,415.19 and financials gained 0.86 point or 0.06% to 1,476.83.
Decliners narrowly beat advancers, 115 against 114, while 44 names ended unchanged.
Value turnover reached P16.03 billion with 144.4 billion issues switching hands yesterday, higher than the P10.38 billion with 169.05 billion issues logged on Monday.
Net foreign selling on Tuesday reached P1.21 billion, higher than the net outflows worth P509.91 million seen in the previous trading session.
“As the PSEi trades sideways, nearest support is at 7,000 while immediate resistance may be pegged at 7,300,” Timson Securities’ Mr. Pangan said. — Revin Mikhael D. Ochave
Manila to wait for FDA consent before using free China shots
By Kyle Aristophere T. Atienza
and Vann Marlo M. Villegas, Reporter
THE PHILIPPINES will wait for an emergency use authorization (EUA) from its Food and Drug Administration (FDA) before accepting and using 500,000 doses of coronavirus vaccines donated by China, according to the Health department.
“All vaccines whether donated or procured should have an emergency use approval,” Health Undersecretary Maria Rosario S. Vergeire said in a Viber message on Tuesday.
This was after officials from the Executive branch issued contradictory statements on the matter.
FDA Director General Rolando Enrique D. Domingo on Tuesday said the government could accept and use the Chinese vaccines even without an emergency use authorization from the agency. This is as long as Chinese regulators have approved the vaccines, he added.
“The Department of Health (DoH) is allowed to accept medications that are not yet registered in the country,” he told an online news briefing. Philippine Health authorities should use the Chinese vaccines under DoH’s strict supervision, he added.
“They have to be very careful and they have to study it very closely whether to accept and use the vaccines because it will become their responsibility,” he said.
He was contradicted hours later by presidential spokesman Harry L. Roque, who said the donated Chinese vaccines must first be approved by the FDA before these could be injected on people.
“That definitely requires an emergency use authorization,” he told a televised news briefing on Tuesday, citing the sheer number of doses. “The law is clear.”
Mr. Domingo later corrected himself. “If DOH accepts the donation, it will have to apply for authorization from the FDA to use the donated vaccines,” he said in a mobile phone message.
China has pledged to donate 500,000 doses of its COVID-19 vaccine to the Philippines, State Councilor and Foreign Minister Wang Yi told President Rodrigo R. Duterte during a meeting at the presidential palace at the weekend.
China’s Sinovac Biotech Ltd. is one of several drug makers who had applied for emergency use authorization from the Philippines for its coronavirus vaccine. The FDA is also evaluating its application for local clinical trials.
The Philippines approved the emergency use of Pfizer, Inc. and BioNTech’s coronavirus vaccine, the first in the country last week. The vaccine has a 95% efficacy rate.
Meanwhile, Mr. Domingo said Beijing’s vaccine donation would not pressure the FDA into approving applications for emergency use from any Chinese drug makers.
Opposition Senator Francis N. Pangilinan on Sunday said China’s gesture should not pressure the FDA and Health Technology Assessment Council (HTAC) to approve the use of Sinovac’s vaccine.
Science, data and the results of clinical trials should be the sole basis and not “political goodwill,” he tweeted.
The DoH reported 1,357 coronavirus infections on Tuesday, bringing the total to 504,084. The death toll rose by 69 to 9,978, while recoveries increased by 324 to 466,249, it said in a bulletin.
There were 27,857 active cases, 86.1% of which were mild, 6.1% did not show symptoms, 4.7% were critical, 2.7% were severe and 0.42% were moderate.
Davao City reported the highest number of new cases at 130, followed by Rizal at 71, Quezon City at 66, Pampanga at 54 and Benguet at 52.
DoH said seven duplicates had been removed from the tally, while 56 recovered cases were reclassified as deaths. Four laboratories failed to submit their data on Jan. 18.
About 6.9 million Filipinos have been tested for the coronavirus as of Jan. 17, according to DoH’s tracker website.
The coronavirus has sickened about 96.1 million and killed about 2.1 million people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization (WHO).
About 68.7 million people have recovered, it said.
Vaccine contracts bar gov’t from disclosing prices, says Duterte
THE GOVERNMENT is barred from disclosing the prices of coronavirus vaccines it ordered from suppliers under the terms of the contracts, President Rodrigo R. Duterte said on Monday night.
“Every negotiation, that’s a different agreement,” the President said in a televised speech. “It does not involve money but one thing is certain: You cannot divulge the contract price,” he said in mixed English and Filipino, citing nondisclosure terms.
Mr. Duterte said keeping silent about the prices in a supply agreement is an “industry practice,” adding that disclosing the vaccine prices before deals are finalized could affect the government’s reputation.
Nondisclosure terms include “protecting medical trade secrets, special prices given to a particular country, the timeline of the vaccine,” vaccine czar Carlito A. Galvez, Jr. told an online news briefing on Tuesday. He added that the government might lose about 148 million doses of coronavirus disease 2019 (COVID-19) vaccines if it breaks the terms of the deal.
“Other countries also signed this agreement,” he said. “We assure you that we will not enter into a contract where we will lose.”
Mr. Galvez said there won’t be corruption in the government’s vaccination program, citing strict standards set by the Asian Development Bank (ADB) and World Bank.
Presidential spokesman Harry L. Roque, Jr. said the government has an “executive privilege” not to disclose pricing information pending negotiations.
Vaccine deals between governments are similar to diplomatic negotiations, he pointed out. “Although a term sheet agreement is also a binding obligation, that is not yet a final agreement. The final agreement is the supply agreement,” he said.
Mr. Galvez said the supply agreement might be finalized before the month ends. The government will buy P82 billion worth of coronavirus vaccines, he added. — Kyle Aristophere T. Atienza
Gov’t in talks with logistic companies for vaccine storage
THE GOVERNMENT is in talks with dozens of logistic companies in time for the arrival of coronavirus vaccines in mid-February, an official said on Tuesday.
The state is in “advanced negotiations” with 28 cold chain providers, Vivencio B. Dizon, the country’s COVID-19 testing czar, told an online news briefing on Tuesday. It’s also in talks with five other companies.
Among the companies he cited were Orca, Royal Cargo and Zuellig Pharma. Novatus Technologies, Inc., PAL Holdings, Inc., 2GO Group, Inc. and IP Biotech, Inc. had also been tapped for the distribution and storage of COVID-19 vaccines.
Mr. Dizon said the government would also tap the Cold Chain Association of the Philippines (CCAP) for the delivery of COVID-19 vaccines to the countryside.
The government expects to receive the first vaccine made by Chinese pharmaceutical company Sinovac Biotech Ltd. on Feb. 20.
Before the vaccine could reach any areas in the Philippines, the government must ensure that it has the facilities and manpower for the distribution.
Health Undersecretary Maria Rosario S. Vergeire last month said the government already had freezers for vaccines that could be stored at refrigerator temperatures of 2 to 8 degrees Celsius.
Some private partners can convert their existing freezers to accommodate vaccines that require minus 20 Celsius, she said.
Two private suppliers have also committed to set up freezers for vaccines that require temperatures of negative 70 to negative 80 degrees Celsius, she added. — Kyle Aristophere T. Atienza
Relaxed age rules for malls sought
THE TRADE department might propose to ease the age restriction for mall goers to boost consumer spending amid a coronavirus pandemic, the agency said on Tuesday.
Trade Secretary Ramon M. Lopez told Radyo 5 he might submit the proposal at the next meeting of an inter-agency task force (IATF) made up of Cabinet officials.
The Trade chief had been suggesting that Filipinos as young as 10 years be allowed to leave their homes in areas under a general quarantine.
Only people between 15 and 65 years are allowed to go out of their homes in these areas, although local governments can set higher age limits for minors.
He said in an interview with Radyo 5 on Tuesday that relaxing restrictions could improve consumer spending.
“If COVID-19 cases are managed, we should consider continuously reopening the economy slowly,” Mr. Lopez said.
The matter would be discussed while taking into account coronavirus statistics, as well as a potential surge in infections brought by a new virus strain, he said. Talks on loosening restrictions have been delayed because of worries surrounding the new strain, he added.
Scientists are investigating hints that the new virus strain spreading in the United Kingdom (UK) was more likely to infect children.
The Health department last week said a Filipino who arrived from the United Arab Emirates (UAE) had tested positive for the new coronavirus disease 2019 (COVID-19) strain. — Jenina P. Ibañez
Nationwide round-up (01/19/21)
UP President seeks dialogue with defense chief over accord cancellation
THE head of the country’s biggest state-run university has asked the defense chief for a dialogue over the unilateral cancellation of an agreement that keeps the police and military out of its campuses nationwide. University of the Philippines (UP) President Danilo L. Concepcion told Defense Secretary Delfin N. Lorenzana in a letter that the university regrets the unilateral revocation of the agreement signed in 1989 without prior consultation. “Instead of instilling confidence in our police and military, your decision can only sow more confusion and mistrust, given that you have not specified what it is that you exactly aim to do or put in place in lieu of the protections and courtesies afforded by the agreement,” Mr. Concepcion said. “May I urge you, therefore, to reconsider and revoke your abrogation, and request further that we meet to discuss your concerns in the shared spirit of peace, justice, and the pursuit of excellence,” he added. In a letter dated Jan. 15 posted by the official student paper Philippine Collegian, Mr. Lorenzana informed the UP President of the accord abrogation, citing an “ongoing clandestine recruitment inside UP campuses” for membership to the Communist Party of the Philippines (CPP) and its armed wing, New People’s Army (NPA). The defense secretary also alleged that a number of UP students have been identified as members of the communist group. Mr. Concepcion said the university does not fear the fair and speedy enforcement of the law and condone “sedition, armed insurrection, or the use of violence for political ends.” President Rodrigo R. Duterte in November last year threatened to defund UP, the oldest public higher education system in the country.
ACADEMIC FREEDOM
Mr. Lorenzana’s move drew widespread criticism and lawmakers backed the UP president’s position on the need for a reassessment of the contract’s repeal. “If there are issues of violations of the law, a search warrant is a remedy available to the authorities not only in other places but also in UP,” Senator Franklin M. Drilon, a UP alumnus, said in a statement on Tuesday. Muntinlupa Rep. Rufino B. Biazon, vice chairperson of the House national defense committee, for his part, asked the Department of National Defense to reconsider its decision as it counters the objective of the agreement of protecting the youth. “Without actually occupying the campuses, the termination will give a sense of academic freedom being under siege,” Mr. Biazon said in a separate statement. Vice President Maria Leonor G. Robredo, also a UP alumnus, said the pact’s termination is a “symbolic” gesture designed to sow fear and discourage dissent. “If this was simply about law enforcement, all the Accord asks is that military authorities give notice to University officials before any operations in UP. This is neither a difficult nor onerous rule, and five Presidents since 1989 have managed to protect both the UP community and the Republic without breaking it,” Ms. Robredo said in a statement. — Vann Marlo M. Villegas, Charmaine A. Tadalan, and Kyle Aristophere T. Atienza
Lawyers say gov’t legally bound to be transparent in vaccine procurement
THE Integrated Bar of the Philippines (IBP) on Tuesday said the government is legally bound to be transparent with its vaccination plans despite special powers under the state of emergency due to the coronavirus pandemic. IBP President Domingo Egon Q. Cayosa said transparency is important in establishing facts, dispelling doubts and suspicions, as well as in “enhancing trust in our country’s governance.” “There is compelling legal basis for transparency, even under the COVID-19 emergency,” Mr. Cayosa said in a statement. The head of the lawyers’ group cited that the “twin provisions of the Constitution, Article II, Section 28 and Article III, Section 7, adopt a policy of full public disclosure of all transactions involving ‘public interest’ and recognizes the public’s right to information.” He also cited a Supreme Court ruling stating that “these provisions of the Constitution seek to promote transparency in policy-making and in the operations of the government, as well as provide the people sufficient information to exercise effectively other constitutional rights.” Mr. Cayosa also noted that President Rodrigo R. Duterte’s Executive Order No. 2 on Freedom of Information states that there should be “a legal presumption in favor of access to information, public records and official records.” Both chambers of Congress have held a series of hearings questioning the administration’s vaccination program, including choice of manufacturer and prices. — Vann Marlo M. Villegas
Regional Updates (01/19/21)
Cebu governor tells mayors not to push ‘panic button’ as she assures vaccine procurement will be aligned with national program
CEBU Governor Gwendolyn F. Garcia met with the provincial board and mayors on January 15 to assure them that the province will not be left behind in the coronavirus vaccine distribution program. Cebu, ranked as the richest province in the country as of 2019, is among the local governments that has not signed a vaccine purchase contract with any company. Ms. Garcia told the mayors to avoid pushing the “panic button” as they get “badgered” by constituents and the media over vaccine allocation from their local budgets. “I know you’re being badgered… And the temptation to give in to that bandwagon in order to look good is great,” but, she added, “Let us trust the national government here. All previous immunization program is rolled out by the national government — measles, polio — there are certain safety protocols to be put in place, and the strategies as well. Department of Health-Central Visayas Regional Director Jaime S. Bernadas also explained that local governments “cannot procure and roll out Covid-19 vaccines on their own.” He said the required tripartite agreement with the national government and pharmaceutical firms is intended to align the efforts of local governments with the national government’s program. — MSJ
NEDA to complete draft negative list by second half
THE National Economic and Development Authority (NEDA) hopes to complete the draft list of industries restricted to foreign investment by the second half, after its regular release date was pushed back by the pandemic.
The proposed 12th Regular Foreign Investment Negative List (FINL) will be presented to President Rodrigo R. Duterte later in the year, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua told BusinessWorld last week.
Asked if the upcoming list will offer a less restrictive environment for foreign investors, Mr. Chua said via Viber: “That is in the process of review.”
“There are limits to the FINL since some require legislation, so we need to also pass the PSA (Public Service Act), RTL (Retail Trade Liberalization Act), and FIA (Foreign Investment Act) amendments,” he added, noting that the treatment of these industries will be a priority in the new list.
The three bills have been approved on third and final reading at the House of Representatives.
Their counterpart measures in the Senate, however, are still at various levels of approval, with the bills amending the PSA and FIA still in committee. The retail bill amendments are awaiting approval on second reading.
The government is required to publish a negative list every two years to guide foreign investors on which industries have been opened up to them.
Executive Order No. 65, signed on Oct. 29, 2018, outlines the restrictions contained in the 11th FINL. The current edition of the FINL allowed 100% foreign participation in internet businesses; teaching at higher education levels, provided the subject being taught is not a professional subject; training centers engaged in short-term high-level skills development that do not form part of the formal education system; insurance adjustment companies, lending firms, financing companies and investment houses; and wellness centers.
Last year NEDA was focused on updating the Philippine Development Plan 2017-2022 to take into account the impact of the economic downturn, NEDA Undersecretary Rosemarie G. Edillon has said.
Foreign investors are hoping the administration will liberalize more sectors in the upcoming list to raise business sentiment and improve the prospects for recovery.
“GPCCI is convinced that shortening the RFINL will greatly contribute to the Philippine economic recovery and increase the economy’s competitiveness,” according to German-Philippine Chamber of Commerce and Industry (GPCCI) President Stefan Schmitz, in an e-mail Friday.
GPCCI said it is also hoping for the passage of the bills amending the PSA, Retail Trade Liberalization law and FIA to open the economy to more foreign investment.
“Many German companies will expand their current investments or would consider a first-time investment if the investment regime in the Philippines is liberalized. Shortening the FINL would be an important step to attracting more foreign investment,” GPCCI Executive Director Martin Henkelmann said, also by e-mail. — Beatrice M. Laforga
GSIS extends loan transfer program for government employees to end of 2021
THE Government Service Insurance System (GSIS) said it will extend to the end of the year a program allowing members to transfer their outstanding loans to the pension fund at easier payment terms.
The loan transfer program has covered over P110 billion worth of loans since its launch in 2018.
In a statement Tuesday, GSIS President and General Manager Rolando L. Macasaet said thee GSIS Financial Assistance Loan (GFAL) program will now run until Dec. 29, 2021 to allow members with loans at other institutions to consolidate and transfer their debt to the GSIS, to avail of longer payment terms and low interest rates.
Last year, the pension fund released P37 billion to 89,947 members to pay down their loans with other institutions and effect the transfer. The program was halted for six months by lockdown and resumed towards the end of August.
Prior to the extension, the application window for the program was to close on Dec. 31, 2020.
“They will also enjoy higher take-home pay and their retirement benefits will be protected from loan deductions while helping GSIS improve its loan collection efficiency,” it said.
GFAL beneficiaries are charged 6% interest with six years to pay.
The program also has a Top-Up loan feature, providing participants the opportunity to take on up to P500,000 worth of debt for personal use.
“If a member’s GFAL loan, for instance is P300,000, he or she may borrow the remaining P200,000 under the Top-Up Loan,” it said.
Permanent government employees with an at least three years of paid premiums to the GSIS or those that have been appointed, elected, or considered non-permanent government employees with at least 15 years of paid premiums, can apply for the program if they have outstanding loans from other lending companies and have no due loans with the GSIS.
“In addition, they should not be on leave without pay; have no pending administrative or criminal case except if the case is due to loan nonpayment due to the prioritization of GSIS payments; and have a net take-home pay that is not lower than the P5,000 requirement under the General Appropriations Act,” it added. — Beatrice M. Laforga
Lanao transmission line tripped by downed tower, thieves blamed for blackouts in parts of Mindanao
THE power outage across northern and western Mindanao was due to the failure of a transmission line in Lanao del Norte, which the National Grid Corp. of the Philippines (NGCP) blamed Tuesday on thieves who targeted a section of a transmission line in the area, tripping the Agus 5-Aurora 138-kilovolt line.
In a statement, the NGCP said that the blackout affected customers of Zamboanga del Sur I Electric Cooperative; Zamboanga del Sur II Electric Cooperative; Misamis Occidental I Electric Cooperative; Misamis Occidental II Electric Cooperative; Zamboanga del Norte Electric Cooperative; Zamboanga City Electric Cooperative; and Lanao del Norte Electric Cooperative.
Late Monday, the NGCP said in a statement that a tower on the Balo-i-Aurora segment of the line in Lanao del Norte had fallen due to the “intentional pilferage of transmission line parts.”
This caused power to go out Monday morning across the Zamboanga peninsula, Misamis Occidental and parts of Lanao del Norte.
“With the tripping of the Agus 5-Aurora line, both lines serving the Northwestern Mindanao area are out,” the NGCP said Tuesday.
“NGCP is working to restore the line as it continues investigating the cause of the outage. Coordination is being done with local authorities and several leads are already being looked into. Updates will be provided once available,” NGCP added.
The system operator also appealed to the public, local and national governments, and local community leaders to help in identifying the “perpetrators.” — Angelica Y. Yang