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Putting annus horribilis to bed

 

Wrapping up 2020 and dreaming of better days

HERE ARE two immutable things (well, okay, one immutable thing and a near certainty): We’re coming to the end of the annus horribilis that is 2020, and vehicle sales are mercifully picking up and, cross your fingers, are actually gaining momentum.

The end of the year — and that the impression that it somehow is expected to bring welcome changes to a woeful trajectory thus far — is, of course, a man-made construct just like time itself. The truth is, we do not know for certain whether we’re seeing the end of the tunnel or staring into the barrel of a gun.

For sure, with vaccines already making their way to select territories, there’s more substance to the hope we’ve been clinging to. On that blessed day we finally get clarity on a schedule, the sooner we can plan our reunions with family and friends we’ve longed to hug and kiss. Businesses can also begin to scale up targets — to say nothing about those that can finally open, period.

Before that day we’ve been praying for, we’ll still be best served by being hopeful because that shapes our disposition and even how we approach each day. We may not be able to control everything tomorrow brings, but we can sure as heck be more ready for both good and bad by keeping rein on what we can govern: ourselves.

Back in April, I wrote of how people were already writing off 2020: “It’s too untenable a year; too memorable for the wrong reasons. Heck, we barely even made it out of the first quarter alive — crawling on all fours into April after a gauntlet of crises rendered us slack-jawed in disbelief. And just when we thought we had endured and passed the worst of it, the invisible monster that is COVID-19 caught us with a haymaker.” I now look back at those words with the benefit of additional months of hindsight. Actually, things got worse after that column: More people got sick and passed on, more businesses shuttered, more people lost jobs.

Speaking of April, when that month was in the rearview mirror, the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Truck Manufacturers Association (TMA) registered its lowest-ever consolidated monthly sales output: 133 units.

That woeful figure was a blackeye from a flurry of punches from fears of the pandemic and the closing of showrooms necessitated by the enhanced community quarantine.

Last week, I reached out to CAMPI President Atty. Rommel Gutierrez via text, and he was gracious enough to share his unofficial sales projection in November (see graph). I don’t know if you’d agree with me, but anything north of 20,000 units is a win, methinks. The “recalibrated target” of CAMPI/TMA (factoring in the Association of Vehicle Importers and Distributors or AVID as well) is 240,000 units by the end of the year, and Atty. Gutierrez said this number “will most likely be reached, if not a little less.”

Looking back at last year, CAMPI/TMA’s December sales totaled 33,715, while the brands of AVID moved 8,089 units during the same month. For some context, AVID’s total in Q3 2020 is 15,471 — or an average of 5,000 a month.

Executives are projecting 2021 to be a recovery period for industries — certainly (or hopefully) much better than this year, but still bereft of the performance vigor of 2019 or 2018. I use “vigor” loosely here, of course. Remember the deleterious effects of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which effectively jacked up prices of a lot of automobiles?

Atty. Gutierrez commented, “We foresee a range of 30% to 60% growth next year.” Of course, coming from a base of 240,000, that means a peak of 300,000 units in sales. Compare that to 2019’s consolidated (CAMPI, TMA, and AVID) of 416,637.

Who would have thought we’d one day be pining to have that kind of number again? And let’s also shelve for the moment that holy grail of aspirations: to breach the 500,000 mark in sales.

But I digress. There’s always hope — and that should be enough to sustain us, keep the ardor of our humanity going, and allow us to envision things as just outside our grasp for the moment.

PLDT Global, Softbank to power Japanese firms

A UNIT of PLDT, Inc. has partnered with Japan-based SoftBank Corp. to offer internet service to Japanese enterprises.

Under its partnership with Japanese telecommunications service provider SoftBank, PLDT Global Corp. will offer SmartInternet Suite Ether to small, medium, and large enterprise clients in Japan, PLDT said in an e-mailed statement over the weekend.

SmartInternet Suite Ether, PLDT Global said, helps businesses address their needs “for a higher-grade internet environment that suits diverse work styles and evolving business areas.”

PLDT Global President and Chief Executive Officer Katrina Luna-Abelarde said the partnership is part of a broader PLDT Group initiative to “improve customer experiences in and outside of the Philippines.”

Norioki Sekiguchi, vice president of Global Business Division at SoftBank, said: “This is just the first step of our collaboration, and we look forward to creating new opportunities together.”

HIGHER CAPEX NEXT YEAR
Meanwhile, PLDT announced on Saturday it was ready to invest between P88 billion and P92 billion next year to meet the requirements of its mobile and fixed-line customers.

The company expects its capital expenditures to hit at least P70 billion this year.

PLDT noted it has spent about P260 billion in the last five years to improve its services nationwide.

“We want to benchmark ourselves, not just with local competition, but with our neighboring countries like Thailand and Vietnam, as we would want our network performance to ultimately be at par with global companies,” PLDT Chief Revenue Officer and Smart Communications President and Chief Executive Officer Alfredo S. Panlilio said in a statement.

To raise capital, PLDT recently sold its 37-storey Smart Tower in Makati City for $128 million to real estate development company DMC Urban Property Developers, Inc.

PLDT’s attributable net income in the third quarter rose 95% year-on-year to P7.41 billion, amid the rise in demand for digital or online services due to the pandemic.

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

MG RX5 available with zero down payment, 3-month payment holiday

THE COVENANT Car Company, Inc. (TCCCI), exclusive importer and distributor of MG automobiles and parts in the Philippines, serves up a special promo on the MG RX5 until the end of 2020. The SUV is available for purchase with zero down payment, plus a three-month payment holiday (or a P45,000 cash discount).

Motivated by an efficient 1.5-liter turbocharged gasoline engine delivering a maximum output of 162hp and 250Nm, the MG RX5 is positioned as embodying “class, power, and functionality.” The power plant is mated to a seven-speed double clutch automatic transmission for “smooth and seamless power delivery.” An enhanced MacPherson and rear multi-link suspension system promises a comfortable ride on various terrain.

The SUV boasts a modern, spacious cabin with ample legroom and headroom — featuring dashboard and door inserts finished in high-grade materials. The RX5’s infotainment system is predicated on an eight-inch touchscreen featuring Apple CarPlay. Other features include keyless entry, push start/stop, cruise control, and electronic parking brake with auto-hold function for a stress-free, easy drive.

Tax court grants partial VAT refund to PGPCI

THE COURT OF Tax Appeals (CTA) partially granted the tax refund claim of Philippine Geothermal Production Company, Inc. (PGPCI) of excess and unutilized input value-added tax (VAT) traced to zero-rated sales for 2014.

In a 35-page ruling dated Nov. 18, the court’s second division ordered the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate to the company in the amount of P4.2 million out of its P31.7-million initial claim.

The court said the company reported total sales of P4.9 billion but only the amount of P3.7 billion qualifies as valid zero-rated sales as some were supported by official receipts but with unreadable details.

The court said it was unable to recognize if they were actually declared in VAT returns because of absence of supporting documents on the reversal and accrual of the said zero-rated sales.

Out of the P31.7-million tax refund claim, only the amount of P29.8 million represents valid VAT but “the same is not entirely attributable to zero-rated sales since petitioner also had VATable sales.”

“Due to the BIR’s previous partial approval of petitioner’s claim up to the amount of P21,223,062.08, the excess input VAT attributable to valid zero-rated sales of P25,466,789.58 should be further reduced,” the court said.

“Hence, petitioner is entitled to a lesser input VAT claim of P4,243,727.50 after taking into consideration the partial grant of its claim,” it added.

The court also said the company did not have output liabilities in the first and fourth quarters, and the output liability for the second and third quarters did not exceed the input tax incurred or paid.

The company was claiming for a refund, anchoring on the law that states that renewable energy developers are entitled to zero-rating treatment of its sale of fuel or power generated from renewable resources of energy and its purchases of local supply of goods, properties and services related to development of its power facilities.

PGPCI for the first quarter of 2014 filed an administrative claim refund of P5.3 million for that period and then elevated it to the court after the BIR failed to act on its claim within the prescribed period.

For the second quarter, it claimed a refund of P5.1 million and was granted the amount of P559,550.49. It was then raised to the court.

It was granted P16.58 million out of its P16.91-million claim for the third quarter and appealed to the court the disallowed amount.

For the fourth quarter of 2014, it claimed a refund for the amount of P4.4 million and was granted P3.85 million. It also raised the partial grant to the court.

The BIR, on the other hand, claimed that PGPCI failed to present certain documents before the BIR for its administrative claim and the computations of its claimed amount of unutilized input VAT is erroneous.

The court cited a Supreme Court ruling saying a taxpayer “cannot cure its failure” to submit a document requested by the BIR at the administrative claim by filing it before the court but said that the BIR did not specify what documents were withheld from it. — Vann Marlo M. Villegas

South American banana growers make inroads into PHL export markets

DAVAO CITY — The collapse in global banana prices has opened the door for South American producers to sell more of their product in major markets traditionally supplied by Philippine growers and exporters.

Stephen A. Antig, executive director of the Pilipino Banana Growers and Exporters Association, Inc., said countries like China, Japan, and South Korea are now a battleground for South American growers, who are facing oversupply in their home markets.

“COVID-19 encouraged consumers to eat healthy fruits and banana normally tops the list of popular fruits. Incidentally, there is an oversupply in South America and the price per box went down. So they were able to send their bananas to our markets at lower prices,” Mr. Antig said in an email interview. 

Mr. Antig also said that volume exported by association members fell 12.4% year-on-year in September.

“The drop in total production is largely due to Panama disease as there is no concrete program implemented for its control and eradication,” he said.

Citing data from the Philippine Statistics Authority, he said fresh banana exports fell 14.04% by value in the nine months to September.

He noted that a formerly reliable market like China, the biggest buyer of Philippine bananas, is also starting to balance out its purchases by tapping producers in Cambodia, Laos, Vietnam and Myanmar as part of a broader geopolitical strategy.

He said China has also been imposing extra measures to prevent the entry of COVID-19 through food imports, including a disinfection process before shipments are released to their buyers.

“Due to exposure to heat this can affect the quality of the fruit before it reaches the supermarkets,” Mr. Antig said.

He said producers have also been affected by community quarantine protocols implemented by local government units, which have disrupted the movement of delivery vehicles and personnel from farms seeking to access the ports in Davao City and Panabo City. — Maya M. Padillo

Ford Ranger Raptor takes big bite out of pickup market with 10,000 units sold

THE TOP variant of the Ford’s Ranger pickup lineup here has reached a sales milestone of 10,000 units just two years since its launch.

“This huge success for the Ranger Raptor is a testament to its consistent and growing popularity in the Philippines,” said Ford Philippines Managing Director PK Umashankar. “We thank our over 10,000 customers for choosing the Ranger Raptor and for being part of the growing community of performance pickup enthusiasts in the country.”

The Ranger Raptor accounted for over 40% of total Ranger sales in the Philippines in 2019. Regionally, the Philippines has become the leading contributor to total Ranger Raptor sales across ASEAN markets with a 64% share and across Ford’s International Markets Group with a 37% market share over the past two years.

In gratitude for the warm reception to the model, Ford Philippines is launching its first-ever Ranger Raptor Raffle promo just in time for the holiday season. Customers who purchase any Ford vehicle until Dec. 31, 2020 from Ford dealerships nationwide earn a raffle entry that will give them a chance to win a brand-new Ranger Raptor. Meanwhile, those purchasing through an EastWest Bank auto loan transaction earn two raffle entries. Up for grabs as grand raffle prizes are five Ranger Raptor units, which the winners can enjoy tax-free.

“The Ranger Raptor Raffle promo is our way of celebrating our 10,000 Raptor owner milestone as we want more Filipino customers to own and drive the Ranger Raptor and enjoy its segment-leading features and capabilities,” added Mr. Umashankar.

Aside from the raffle, customers can also enjoy bigger cash discounts and all-in low down payment offers for Ford SUVs, pickups, and even the Transit van under the company’s “Seize the Deal” promo until the end of the year.

Customers can get bigger cash discounts of up to P190,000 for a Ford EcoSport or up to P125,000 for a Ford Ranger. A cash discount of up to P100,000 is available for a Ford Everest. All-in low down payment offers for as low as P38,000 are also available.

Ranger Raptor buyers will be entitled to the Ranger Raptor Premium Care Package, inclusive of a free five-year scheduled service plan, five-year warranty (up from three years), and five years roadside assistance.

Customers can also still avail of an offer of zero interest for 60 months at 20% down payment for a Ford Explorer or Ford Expedition, and up to P301,000 cash discount for the Ford Transit together with a free five-year scheduled service plan. The Ford Territory Trend also comes with a free five-year scheduled service plan.

For more information, visit the Ford Philippines website at www.ford.com.ph/shopping/latestoffer/christmaspromo/ or any Ford dealership.

Treasury bills, bond rates may move sideways

RATES OF government securities on offer this week will likely move sideways for the short-term papers and end lower for the longer tenors ahead of the Monetary Board’s last policy meeting for the year.

The Bureau of the Treasury (BTr) is set to offer P20 billion in Treasury bills (T-bills) on Monday: P5 billion each via the 91- and 182-day debt papers and P10 billion in one-year instruments.

On Tuesday, the BTr will borrow P30 billion via the reissued 10-year notes with a remaining life of six years and four months. The debt papers carry a coupon of 4.75%.

This week’s offerings will be the government’s last two auctions for the year.

The Treasury is also set to issue on Wednesday fresh one-year Premyo bonds as the offer period closed last week. National Treasurer Rosalia V. de Leon said in a Viber message that they will announce on Friday, Dec. 18, the amount raised from the Premyo bonds.

Yields on the T-bills on offer today will likely inch up from the rates seen in last week’s auction, while the 10-year debt papers could be quoted at a lower rate, Noel S. Reyes, first vice-president and chief investment officer of the Asset Management Group at Security Bank Corp., said in an e-mail on Friday.

“The bias would be slightly flat to slightly higher on the T-bill auction given that the curve is very steep, with the long-end wallowing at the highs pre-Monetary Board meeting and a reversal [with] short-term bond yields climbing higher while long-term bond yields coming lower may be likely before the Christmas spirit takes its toll on trading activity,” Mr. Reyes said.

The Bangko Sentral ng Pilipinas’ (BSP) policy-setting Monetary Board will hold its last review for the year on Thursday, Dec. 17.

The central bank is likely to retain key policy rates at its current record low levels, taking into account faster inflation and to allow previous measures to be absorbed by the financial system, analysts said.

A BusinessWorld poll held last week found 15 analysts of the view that the Monetary Board will keep rates steady at its seventh and final policy meeting for the year.

However, with recovery prospects looking grim, many analysts believe the BSP will resume its easing cycle as early as the first quarter of 2021 to provide support to the economy.

The BSP last month slashed benchmark rates by 25 basis points (bps) to fresh record lows, bringing its cumulative cuts for the year to 200 bps.

Government bond yields “will still likely remain floored,” said Nicholas Antonio T. Mapa, ING Bank N.V. Manila senior economist, as the financial system remains awash with cash and with investors still opting to park their excess funds in the safer assets as the economic outlook remains uncertain.

“BTr appears to be winding down its borrowings and this moves in line by recent comments suggesting authorities will be cutting back on spending to limit the hit on fiscal debt metrics. Given the dearth of options and general uncertainty given the prognosis for a couple more quarters of recession, the local GS market remains the only game in town,” Mr. Mapa said via e-mail on Friday.

At the secondary market on Friday, the three-month, six-month and one-year T-bills were quoted at 1.118%, 1.44% and 1.737%, respectively, while the 10-year bonds fetched a rate of 3.008%, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

The Treasury last week made a full P20-billion award of the T-bills it offered from bids worth P74.79 billion.

Broken down, it borrowed the programmed P5 billion via the 91-day debt papers from P17.11 billion in tenders. The average rate of the three-month debt inched up by 0.9 bp to 1.015% from the 1.006% seen at the Dec. 1 auction.

The government also raised P5 billion as planned from the 182-day T-bills out of tenders worth P15.583 billion. The six-month securities fetched an average rate of 1.399%, up 1.3 bps from 1.386% previously.

For the 363-day securities, the Treasury made a full award of its P10-billion offering as demand hit P42.097 billion. The one-year T-bills fetched an average rate of 1.695%, inching up by 0.2 bp from the 1.693% seen in the previous offering.

Meanwhile, the 10-year T-bonds on offer on Tuesday were last reissued on Nov. 9, 2017 at an average rate of 4.915%.

The Treasury’s most recent offering of the tenor was  on Nov. 18, when the BTr made a full P30-billion award out of tenders worth P65.997 billion. The debt papers, which have a remaining life of four years and eight months, fetched an average rate of 2.9%, up 11.9 bps from the 2.782% seen at the Oct. 20 auction.

The Treasury plans to borrow P120 billion from domestic lenders in December: P60 billion in weekly T-bill auctions and P60 billion in fortnightly Treasury bond offerings.

The government wants to raise around P3 trillion this year from local and foreign lenders to help fund its budget deficit, which is expected to hit 7.6% of the country’s gross domestic product. — B.M. Laforga

URC named top exporter for food and beverage sector

FOOD MANUFACTURER Universal Robina Corp. (URC) was recognized by the Department of Trade and Industry (DTI) as the country’s top exporter for the processed food and beverage sector.

In a statement, the Gokongwei-led company said it was selected by DTI as the leading exporter for the said sector during the National Export Congress held on Dec. 3.

URC said the recognition as top exporter was based on 2019 data from the Philippine Statistics Authority (PSA) that showed the value of its export transactions.

“The company’s export transactions reached approximately $30 million that year,” URC said.

Brian M. Go, URC Vice President for Global Exports and Frontier Markets, said exporters are still pushing forward despite the effects of the coronavirus disease 2019 (COVID-19) pandemic to local and global trade.

“This recognition for our hard work and dedication to our customers is especially meaningful, given the challenges businesses, and our nation as a whole, are facing because of the COVID-19 pandemic,” Mr. Go was quoted as saying.

Through its Exports Group, URC ships its products, such as Jack n’ Jill snacks, Great Taste instant coffee, and C2 ready to drink tea, to 38 countries around the world.

In 2019, the company created a Global Exports business unit in charge of the worldwide distribution of both URC Philippines and URC International-sourced products.

The said business unit combined URC’s regional sales team and consolidated other export departments into one global export team.

According to URC, its Global Export business unit ships to areas in North America, Europe, the Middle East, Africa and Indian Ocean islands, North Asia, and Oceania and the Pacific Islands. Its Philippine office also distributes its products to affiliate URC companies in Singapore, Hong Kong, and Malaysia.

URC posted a 6% increase in its attributable net income to P1.97 billion in the third quarter due to lower debt and higher operating income. — Revin Mikhael D. Ochave

The stability of time

TIME has become a stabilizing force for Grand Seiko during this uncertain period. The company marks its 60th anniversary this year, celebrating the launch of its first Grand Seiko, a novelty back in December 1960 for its comparable quality to Swiss chronometers.

This of course was followed by a flurry of activity, though Director and Senior Vice-President Yoshikatsu Kawada of Seiko Watch Corp. said in a webinar last week that many of their plans had to be shelved due to the pandemic. Furthermore, they also faced production delays earlier this year due to the lockdowns — but at least it celebrated the opening of a new studio, which opened in June of this year. The new studio is dedicated to the Grand Seiko, and is located by the slopes of Mt. Iwate.

The 60th anniversary also brings a line of limited edition timepieces, with a caseback displaying a limited edition label and a serial number, as well as redesigned elements inspired by the new Mt. Iwate studio.

The SLGH003 contains the 9SA5 H-beat Caliber, with a similarity to the 44GS, but a bigger hour hand and more prominent indices. One can see the movement through a clear sapphire glass caseback. The SLGA001 contains the Caliber 9RA5, and is classified as a slimmer professional diver’s watch, with helium and water resistance up to 600 meters. The SBGJ241, with Caliber 9586, also resembles the 44GS, with an automatic movement and a green dial. The SBGR321 has a power reserve of 72 hours, a blue dial, and incorporates MEMS technology, as well as having a crystal caseback. The SBGH281 has a seconds hand in vivid red, and a 55-hour power reserve. The SBGP007, containing the Caliber 9F85, has a time difference adjustment function that allows the hour hand to be adjusted without stopping the seconds hand and thus preserving its high precision when the wearer changes time zones. SBGP015 has a ceramic bezel almost impervious to scratches, and SBGW264 features an 18K rose gold case, a green dial, and a three-day power reserve.

To mark the company’s diamond anniversary, the STGK015 comes studded with diamonds, the jewels serving as hour markers on a mother-of-pearl dial.

The movements are symbolic: “Both calibers mark the passage of time, second by second,” said Mr. Kawada, noting that the 9R caliber series, with its smooth movement, marks the seamless flow of time.

The webinar also announced the launch of the Grand Seiko online stores gs.seikoboutique.com.ph/, as well as the opening of a new boutique in Ayala Malls Manila Bay. Karl Dy, President and COO of Timeplus Corp., which distributes the watches in the Philippines said, “Hopefully, through these retail and online initiatives, we would really want to widen our reach to our Grand Seiko clientele.”

He also noted how the company fared in the Philippines during the height of the lockdowns — surprisingly well.

“In terms of our retail sales, for our Seiko boutiques combined, we’re surprisingly a little bit better than last year; if we combine all our brands. Just for retail.”

Mr. Kawada reflected on the nature of time, as exemplified by the 60 years the brand has been standing. “Sixty is a significant number in horology. It takes 60 seconds to fill a minute, and 60 minutes to complete an hour. Moreso, 60 is important in Japanese culture as it signifies a moment of new energy and re-birth,” he said in a speech.  — Joseph L. Garcia

Senate bill seeks to expand PCIC capital base

A MEASURE expanding the capitalization of the Philippine Crop Insurance Corp. (PCIC) to facilitate the expansion of its pool of beneficiaries and product line has been filed in the Senate.

Senate Bill No. 1915, the proposed Philippine Crop Insurance Corp. Act will increase the authorized capital stock of PCIC to P10 billion from the current P2 billion.

“A strengthened PCIC will be able to further protect the interests of farmers and fisherfolk by providing them insurance protection against losses, thus, helping stabilize the income of agricultural producers and promoting the flow of credit to the countryside,” Senator Maria Lourdes Nancy S. Binay said in the explanatory note of the bill.

The capital increase will involve the issue of 75 million common shares at P100 per share, which the government will fully subscribe for. PCIC will also issue 25 million preferred shares.

If passed, the measure will repeal Presidential Decree No. 1467, which created the PCIC as an agency of the Department of Agriculture.

The bill proposed to include fisherfolk as among those benefiting from insurance cover.

It will also expand coverage to high-value commercial crops, livestock, aquaculture and fishery, agroforestry, and forest plantations.

Currently, the insurance system only applies to rice and corn.

The bill seeks to also cover non-crop agricultural assets such as machinery, equipment, and transport facilities. Life and accident insurance will also be provided to farmers and fisherfolk.

PCIC will also cover state-owned property and facilities for agri-fishery-forestry projects.

The measure proposes to retain the president of the Land Bank of the Philippines as president of the PCIC, with the Secretary of Agriculture holding a board seat, as will a representative from the private insurance industry and three from the farming sector. — Charmaine A. Tadalan

Ortigas Christmas tree lit up by Nissan Leaf

A FULLY electric Nissan Leaf was used to light up the giant Christmas tree of the Ortigas Center recently as the business district formally welcomed the yuletide season.

The activity showcased the powerful V2X technology of the world’s first mass-produced electric vehicle. Present at the Christmas tree-lighting activity were Pasig City Rep. Roman Romulo, Barangay San Antonio Captain Raymond Lising, and representatives of the Ortigas Center Association, Inc., led by General Manager Adelo Jandayan.

Vehicle-to-everything (V2X) technology enables bi-directional charging to use energy from the Leaf battery to power home and office, or simply give back energy to the power grid.

“Nissan and Pasig City share a common vision of a smarter, safer, and more sustainable future, and the adoption of electric vehicles in the country is an important part of this future. We hope that the Nissan Leaf, lighting this Christmas tree in one of the country’s foremost business centers, offers a shining symbol of hope and a bright future for Filipinos,” said Nissan Philippines President and Managing Director Atsushi Najima.

Nissan will also be displaying the Nissan Leaf to showcase the powerful V2X technology by lighting Christmas trees in Glorietta on Dec. 11 to 13, and Alabang Town Center on Dec. 18 to 20.

Interest income boosts central bank earnings

THE CENTRAL BANK’S net profit rose in the third quarter supported by improving gains from domestic securities and foreign exchange trading.

Net earnings of the Bangko Sentral ng Pilipinas (BSP) reached P9.1 billion in the three months ended September, inching up by 3.8% from the P8.7 billion booked in the same period in 2019.

“The quarter-on-quarter increase in quarterly net income was primarily the result of higher interest income from domestic securities and miscellaneous income,” the central bank said.

However, the BSP’s net income was still down by 40% to P22.81 billion year to date from the P38.649 billion in the first nine months last year.

The central bank’s profit was down by 77.3% year on year to P3.8 billion in the second quarter from P16.75 billion, dragged by lower interest income on reserved and miscellaneous income.

In the third quarter, revenues rose by 14.17% to P34.25 billion from P30 billion. In total, interest income slipped 6.9% to P23.332 billion from P25.07 billion.

Interest income from domestic securities surged 198.7% to P8.103 billion from P2.712 billion. Miscellaneous income, which includes trading gains, also climbed 124% P10.883 billion from P4.848 billion.

On the other hand, interest income on international reserves declined by a third to P13.358 billion from P19.925 billion a year ago.

Meanwhile, the central bank’s expenses in the third quarter slipped 8.78% to P19.02 billion from P20.851 billion last year.

As of end-September, the BSP’s assets stood at P6.608 trillion, rising by 4.97% from the P6.295 trillion recorded as of June and by 30% from the P5.09 trillion seen at end-September 2019.

“The BSP’s financial condition remains strong with total assets being dominated by international reserves amounting to $4.82 billion as of end-September,” the central bank said.

Meanwhile, liabilities reached P6.45 trillion, higher by 5.3% from the P6.13 trillion as of end-June and by 30% against the P4.959 trillion seen a year ago. Most of the liabilities were deposits and currency issues. — LWTN

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