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SM blood donation drive nets over 1,000 bags

 The need for blood transfusion did not stop even during the lockdown mandated by the government. Blood supplies were running low in blood banks and requests for blood were in demand for patients’ emergency needs.

While the COVID-19 pandemic put on hold some scheduled blood-letting activities of SM Foundation, the social good arm of the SM Group still managed to collect 1,115 bags of blood as of October 12, 2020, which will benefit 3,345 patients – one bag benefitting three patients when processed.

Usually executed in SMDC Residences and in SM Mall branches, the social responsibility program is executed in close collaboration with the Department of Health-Philippine Blood Center (DOH-PBC) and the Philippine Red Cross.

The social good arm of the SM group untiringly reminds its employees and stakeholders that each blood donation drive stretches beyond blood donation. That by donating blood, they become an extension, not only just for themselves but for others.

Since the inception of the program in 2011, stakeholders especially those in grassroots communities have benefitted from the SM Group’s Virtual Blood Bank.

SM is the first organization to establish a Virtual Blood Bank. What made it more special is that most of the blood are donated by SM Employees.

The establishment of the blood bank was provided for in a memorandum of agreement between SM Foundation and the Philippine Blood Center to lessen dependence on paid blood donations from commercial blood banks. With it, exposure of recipients to diseases transmitted through blood transfusion like HIV-AIDS and hepatitis, among others, is prevented.

Employees from SM Group of Companies participate in scheduled mass blood donations spearheaded by SM Foundation Health and Medical Programs in collaboration with the SM medical services.

Banked blood has helped numerous SM employees and their families. It has also benefitted patients in government hospitals where wards are adopted by SM Foundation and hospitals that host FelicidadSy Wellness Centers.

One blood bank recipient is Marissa Araiz—a patient at the Quirino Memorial Medical Center who needed a blood transfusion for her ovarian operation. With the operation scheduled at 7:00 a.m the following day, her daughter, Reece Ann Araiz spent the night looking for blood donors. She recounted with gratitude that SM Foundation generously responded even in the call for help came in the middle of the night through the Health & Wellness Program of SMFI. By 2:00 a.m. she was able to secure the needed blood for her mother.

SM Foundation, through its Health and Wellness Program, upgrades public health centers in its host communities, complemented by its medical caravans across the country. To date, it has renovated more than 160 health and wellness centers and served more than 1 million patients during its medical missions.

[B-SIDE Podcast] Selling it: Lessons in cross-border e-commerce

Follow us on Spotify BusinessWorld B-Side

Anchanto, a Singapore-based automation and logistics platform, projects that cross-border e-commerce in the Asia-Pacific region will grow to US$ 1.5 trillion by 2023. The Southeast Asian market—which has the highest number of young people with Internet access—is expected to account for 40% of this trajectory.

Vaibhav Dabhade, founder and CEO of Anchanto, tells BusinessWorld reporter Patricia B. Mirasol how local micro, small, and medium enterprises or (MSMEs) can compete against established brands in the online marketplace.

“You are one product out of millions,” Mr. Dabhade said. “Unless and until you optimize your catalog, unless and until you create specific marketing campaigns, your chances of getting visible without effort is almost zero.”

TAKEAWAYS

Cross-border sellers have to adopt local payment methods. 

Cross-border e-commerce has been here for more than 15 years, with Alibaba being the pioneer. Buyers used to pay for their purchases upfront before Lazada pioneered the cash-on-delivery (COD) model. COD has propelled acceptance of cross-border e-commerce in Southeast Asia.

Marketplaces are creating models to minimize the impact of last-mile delivery costs.

Business has been challenged with the heavy cost of last-mile delivery amid the pandemic. According to Mr. Dabhade, limited flights have tripled the cost of shipping from the UK to Malaysia as of October 2020. To minimize the impact of such costs, companies and marketplaces are delivering products via the postal system, which is slower but cheaper. 

MSMEs need structural support.

Mr. Dabhade cited Singapore and South Korea as countries that can be used as models: Singapore provides access to consultants in content, marketing, and pricing while South Korea identifies organizations with global infrastructure that can help MSMEs sell their products overseas.

This level of support is vital because MSMEs get excited about the prospect of e-commerce only to get demotivated after months without sales. “You are one product out of millions,” said Mr. Dabhade. “Unless and until you optimize your catalog, unless and until you create specific marketing campaigns, your chances of getting visible without effort is almost zero.”

Philippine import and export guidelines remain unclear.

“The Philippine market is very similar to India,” Mr. Dabhade said. “Import and export is difficult… cargo is stuck at customs so sellers get despondent.”

The Filipino diaspora is a market just waiting to be tapped. 

Wherever there are Filipinos, there are stores selling Philippine-made products. These products can be optimized, but there is no structure for this as of yet, said Mr. Dabhade.

Study the market you’re planning to serve.

Entrepreneurs need to spend time to understand the main commerce restrictions of each country they plan to serve. 

Anchanto had a client whose skincare product description included the line: “Tested on Asian skin.” The product, which was shipped to Canada, got stuck in customs because the language was deemed borderline discriminatory. Knowing what’s acceptable and what’s not per region will prevent your products from getting flagged at the outset, said Mr. Dabhade.

Other tips he offered are: choosing a strong payment gateway; and making the fulfillment terms and conditions clear to minimize fraudulent transactions.

Recorded remotely on October 14. Produced by Nina M. Diaz, Paolo L. Lopez, and Sam L. Marcelo.

Follow us on Spotify BusinessWorld B-Side

Empowering urban communities through farming

SM Foundation’s Kabalikat sa Kabuhayan opens opportunities for urban dwellers amid COVID-19

Even with limited space, urban dwellers can plant and grow their own food. Not only will they get to harvest vegetables and fruits right from their backyards, they can even sell some and get additional income.

When Hiyasmin Baling and her husband Gabriel Balsa learned urban farming through the Kabalikat sa Kabuhayan (KSK) on Sustainable Agriculture of SM Foundation, Inc. (SMFI), they found an opportunity to earn in spite of the disruptive pandemic.

Ms. Baling ran a beauty parlor, which served as the household’s source of income before COVID-19 hit the country. When the lockdown was imposed, however, Ms. Baling and her husband decided to focus on planting to keep their finances afloat. In their home in Antipolo, Rizal, they transformed their rooftop into a full-blown garden of vegetables, fruits, and ornamental plants.

As the couple applied the skills and knowledge learned from the KSK training program they were able to harvest and sell quality produce. In fact, they have earned P10,000 from selling strawberry plants alone.

“SM Foundation’s KSK program really helped our family, especially during the pandemic. The farming technologies that we learned during the training gave us an alternative livelihood especially now that our primary source of income is not operational,” Ms. Baling shared.

KSK farmer graduate Hiyasmin Baling (L) uses her learnings from the program to augment their family income during the pandemic.

This Farmer’s Training program is just one of the facets of KSK, SMFI’s program on sustainable agriculture. Launched in 2006, KSK aims to uplift the lives of Filipinos in grassroot communities through sustainable agriculture by means of technology transfer, product development, and farm-market linkage. Furthermore, the program aims to address food security as well as to promote good agricultural practices in communities.

“Our goal is to transfer modern and science-based agri-technologies skillsets to our farmers. After equipping them with modern agritech skills and knowledge, we link them (small- and medium-scale farmers) to available market,” Cristie Angeles, Assistant Vice-President for Outreach Programs at SMFI, shared in an e-mail interview with BusinessWorld.

“Aside from increasing our farmers’ income because of better produce, we were also able to help in ensuring food availability to families — specially in grassroot areas with limited spaces. By equipping them with knowledge on urban farming, we are able to augment the nutritional needs of families specially in urban communities,” Ms. Angeles added.

“To strengthen community involvement, KSK adopts a ‘Big Brother and Small Brother’ strategy, where farm schools and learning sites act as big brothers to smaller farmers in the community. By using this strategy, volunteerism is also promoted in the community through on-site mentoring sessions of the established farmers to the smaller ‘agripreneurs’,” said Ms. Angeles.

In selecting the beneficiaries of the program, SMFI usually includes beneficiaries of Pantawid Pamilyang Pilipino Program (4Ps) and indigent residents identified by community leaders where each KSK is implemented. To further strengthen the effectivity of the program, SMFI forged a partnership with the Department of Agriculture (DA), Department of Social Welfare and Development (DSWD), and local government units. These government agencies provide additional support to the KSK participants like lending idle lands where they can begin their communal gardening. Produce planted by the participants are then sold within the barangay.

KSK also strengthened its institutional partnerships by collaborating with the Technical Education and Skills Development Authority (TESDA), SM Supermalls, SMDC and SM Markets.

Through these collaborations, TESDA integrated scholarships for Organic Crops NCII and Agricrops NCIII certifications — which were granted to 271 KSK farmer-participants in Sta. Ana, Floridablanca, and Porac in Pampanga; Olongapo City and Botolan in Zambales; and Bamban in Tarlac.

While through the different business groups of SM, SMFI was able to create farm-market linkage through the Good Guys Market and the Green Lane Initiative.

The Good Guys Market is a weekend market set up in SMDC properties to connect small-scale farmers directly with consumers — condo residents. This initiative links around 26,000 small-scale farmers directly with consumers.

The Green Lane initiative, on the other hand, which was piloted at SM City Pampanga offers a wide variety of quality yet affordable indoor plants, landscape plants, and flowers which cater to every plant parents’ preference in the home improvement project. Led by the wives of the KSK farmers, this social enterprise concept is set to be replicated in other SM malls to cater to more “plantitos” and “plantitas” nationwide.

“During the lockdown, produce from the demo farms were shared by the partner schools to their communities. Farmers were also able to sell to SM employees, and they were able to participate in mall activities such as those [catering to] plantitos and plantitas,” Ms. Angeles added.

More recently, SMFI’s KSK program embarked on bringing its training to urban areas through an urban gardening program, benefitting the cities of Pasig, Mandaluyong, Manila, Quezon, Pasay, Muntinlupa, and Taguig.

In Taguig, particularly, KSK’s 12-week long program served 133 participants from Barangay Ususan, all of whom are beneficiaries of the 4Ps. One of them is Jamiliah Bationg, a 42-year-old housewife, who found the training to be a great help to 4Ps beneficiaries like her. As she cultivates vegetables in container pots at her home, she no longer has to buy fresh produce, hence saving money for her family’s other needs.

In addition, Ms. Angeles observed that KSK participants are greatly helped by the training imparted to them by SMFI as the COVID-19 crisis has put their enhanced skills to the test.

“It is nice to know that during the pandemic, participants were able to appreciate the program more,” she said. “[It’s nice to see that] some were even enterprising enough that they were able to make and sell fertilizers and vegetables. Participants also shared their produce with the underprivileged.”

As of 2019, the KSK covered almost 3,360 barangays coming from over 880 cities and municipalities, bringing sustainable agriculture and farming skills to more than 26,700 farmers in both rural and urban communities. — Adrian Paul B. Conoza

Analysts’ expectations on policy rates (Nov. 19)

BENCHMARK policy rates will likely be maintained by the Bangko Sentral ng Pilipinas (BSP) on Thursday, with the financial system seeing excess liquidity and an anticipated pickup in state spending, according to analysts. Read the full story.

Analysts’ expectations on policy rates (Nov. 19)

BSP to pause rate cuts for now — poll

By Luz Wendy T. Noble, Reporter

BENCHMARK policy rates will likely be maintained by the Bangko Sentral ng Pilipinas (BSP) on Thursday, with the financial system seeing excess liquidity and an anticipated pickup in state spending, according to analysts.

Some analysts, however, pointed to the sluggish pace of recovery and benign inflation as signs there is still room for the central bank to further cut rates.

In a BusinessWorld poll held last week, 11 out of 16 analysts said the Monetary Board (MB) will likely continue the “prudent pause” at its sixth policy meeting on Nov. 19.

Analysts’ expectations on policy rates (Nov. 19)

The central bank may consider the difficulty of unwinding “excessive” monetary easing once recovery starts, said Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr.

BSP Governor Benjamin E. Diokno has vowed to carefully assess the timing of the rolling back of aggressive policy measures taken during the coronavirus crisis to avoid serious repercussions to the economy.

So far this year, the BSP slashed rates by 175 basis points (bps), bringing down overnight reverse repurchase, lending, and deposit facilities to record lows of 2.25%, 2.75%, and 1.75%, respectively.

“We think they will maintain policy settings and will wait for lawmakers to pass laws that will more effectively stimulate the economy including approval of a bigger and better targeted 2021 budget such as in health, government guarantees, public construction, etc.,” Mr. Neri said.

The proposed P4.5-trillion national budget for 2021 is pending at the Senate. Legislators have committed to approving the 2021 national budget by Dec. 16, in time for its signing before the year ends.

Data showing signs of a less severe economic contraction will also likely push the BSP to leave rates untouched, said Maybank Investment Bank Chief Economist Suhaimi Bin Ilias.

“The just released third-quarter GDP (gross domestic product) data is showing signs the economy is off the worst in the second quarter 2020 and will gradually improve with progressive unwinding of quarantines,” Mr. Ilias said.

The economy shrank by 11.5% in the July to September period, better than the record 16.9% plunge in the second quarter when lockdowns were at their tightest.

The BSP will also have to consider bank lending growth which remains sluggish, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

“The subdued credit demand would be something of huge consideration as well and cutting rates further may not result in desired gains at this point. Excess liquidity is also one consideration at a time when market investors are looking high and low for more asset earnings,” he said.

Mr. Diokno has said the BSP’s policy measures infused about P1.9 trillion into the financial system, equivalent to about 9.6% of the GDP.

Despite this, bank lending grew by 2.8% in September, the slowest since the 2.4% seen in June 2007, as lenders tightened credit standards to guard against bad loans and consumer confidence remained low due to the pandemic.

Meanwhile, five analysts are pricing in a rate cut on Thursday, citing the slower-than-expected economic recovery, weak fiscal response, and benign inflation outlook will support further easing.

“A much weaker pace of recovery further reinforces our view that more monetary easing will be warranted,” Nomura Holdings, Inc. Chief ASEAN Economist Euben Paracuelles said. He also said that monetary measures may have to make up for the weak fiscal spending.

“BSP will cut its policy rate by a total of 50 bps in the fourth quarter to 1.75%, delivered via a 25-bp cut in each of the monetary board meetings in November and in December. Beyond that, we expect another 25 bps in rate cuts by the first quarter of 2021,” he added.

Risks to inflation remain tilted to the downside, giving room for another rate cut, analysts said.

“Although higher oil and energy price inflation will push the headline rate higher next year, weak growth and a large output gap will keep underlying price pressure subdued,” Alex Homes, an economist from Capital Economics, said.

The central bank expects average headline inflation this year to settle at 2.5%, well within the 2-4% target.

In October, the consumer price index rose by 2.5%. With the benchmark rate at 2.25%, the negative real interest rate environment is the reason why analysts think the BSP might hold back on further easing.

But this should not be a cause of worry, said University of Asia and the Pacific economist Victor A. Abola, who is pricing in a 25-bp cut on Thursday. He said keeping positive rates is “not important” as a lot of countries are also experiencing this.

“[W]hy ‘enrich the banks’ with higher interest rates when the vast majority of people are suffering and dipping into their savings, if any,” Mr. Abola said.

After Thursday’s meeting, the MB will have another policy meeting on Dec. 17, which will be the last for 2020.

Philippines signs RCEP, world’s biggest trade deal

By Jenina P. Ibañez, Reporter

FIFTEEN Asia-Pacific economies, including the Philippines, signed the world’s largest free trade deal on Sunday, with observers saying the deal could boost Philippine market access while others believe it would worsen the trade balance.

The Regional Comprehensive Economic Partnership (RCEP) is a trade pact that includes China, Australia, New Zealand, Japan, South Korea and all 10 ASEAN member countries. This is the first time that China, Japan and South Korea are all in a single free trade agreement.

The deal was signed in a virtual ceremony as part of the annual ASEAN summit in Hanoi, Vietnam.

“The RCEP will further broaden the Philippines’ economic engagements with its trading partners through improved trade and investment, enhanced transparency, integrated regional supply chains, and strengthened economic cooperation,” Trade Secretary Ramon M. Lopez, who signed a copy of the agreement during the virtual ceremony, said in a statement on Sunday.

“This agreement will also complement ongoing programs and policies to make the country a manufacturing and investment hub in the region.”

The prospective free trade area accounts for around a third of the global population and economy, and builds on existing bilateral and multilateral agreements in the region. It also allows for a common “rules of origin” in the region, which means it simplifies the regulations identifying if products are “made in” a country.

Talks on the China-backed trade pact began in 2012.

Mr. Lopez, calling the deal a “modern” free trade agreement, said that it covers issues surrounding intellectual property, e-commerce, small business, government procurement, and competition.

The RCEP is expected to enhance market access for key Philippine products including garments, automotive parts, and agricultural products like canned food and preserved fruits, Trade Assistant Secretary Allan B. Gepty said in a statement.

“(It is) also a platform for more investments in the country in vital sectors such as manufacturing, research and development, financial services, game development, e-commerce, and the IT-BPO (information technology-business process outsourcing) sector,” Mr. Gepty said.

The deal has also been seen as a way to jump-start trade as Asian economies reel from the effects of US-China trade tensions and the ongoing coronavirus disease 2019 (COVID-19) pandemic.

“The RCEP will definitely help faster recovery of the global economy from COVID-19 and a welcome development in spurring export and imports,” Rizal Commercial Banking Corp. Economist Michael L. Ricafort said in a mobile message.

RISKS AND BENEFITS
But Trade Justice Pilipinas, a campaign for equitable trade, criticized the lack of transparency during the RCEP negotiations.

Trade Justice Pilipinas said that the deal does not give enough flexibility for least-developed ASEAN member states, which could lead to a widening of the gap between the richer and poorer economies. It added that strict enforcement of intellectual property rights could block access to affordable medicines and agricultural seeds.

Citing a report by United Nations Conference on Trade and Development Senior Economist Dr. Rashmi Banga, Trade Justice said that the Philippines would see the cost of imports rise by as much as $908 million while the value of exports to RCEP countries is expected to increase by around $4.4 million.

“RCEP will only deepen inequalities that already exist and were exacerbated further by the pandemic. It will further undermine the livelihoods of farmers, fishers, indigenous peoples and rural women, and threaten jobs for workers,” the group said.

George N. Manzano, University of Asia and the Pacific economist and former tariff commissioner, said that the stakes are now lower as nations shift their policy focus to domestic economic and employment recovery amid the pandemic, noting that there could be less resistance to RCEP.

“I think the policy attention right now is how to stimulate economies, and how to get economies to tide over until the (COVID-19) vaccine,” he said in a phone interview on Sunday.

Mr. Manzano said pandemic-related disruption influenced a rethink of the traditional efficiency and low cost-based global value chain in favor of reliability.

“So basically there’s a lot of pressure now to rethink having very far-flung global value chain networks. They’d rather have something which is close by,” he added.

RCEP could also create a framework for trade facilitation and digital trade.

“Digital trade will take up a bigger transmission of trade in the future as we’re experiencing now, so the earlier transition in getting comfortable in getting into agreements involving digital trade. It will help us at least, policy-wise,” Mr. Manzano said.

He added that the agreement could help facilitate the trade and distribution of vaccines and personal protective equipment.

“Small countries, those who don’t have much bargaining power in the world, the only way you can do that is by signing into an international cooperation, because it’s difficult for you to bargain with China or the US,” Mr. Manzano said.

Last year, University of the Philippines Professor of Economics and Finance Epictetus E. Patalinghug said domestic high-cost industries that are protected by tariffs and safeguards will not survive against RCEP competition, noting that advantages and risks to Philippine industry will depend on which sectors are finally included in the agreement.

He had said that trade in labor-intensive outsourcing services stands to benefit.

The agreement will be implemented after a ratification process, which could take up to two years.

India had backed out of the RCEP negotiations last year, but ASEAN leaders are still open to the country’s participation.

The United States is not part of the RCEP, as well as the Obama-led trade pact Trans-Pacific Partnership (TPP). US President Donald Trump pulled out of the TPP in 2017.

PHL economic outlook dims

By Beatrice M. Laforga, Reporter

CREDIT RATING agencies and other institutions are likely to further cut their gross domestic product (GDP) outlook for the Philippines this year, after third-quarter data showed a slower-than-expected pace of recovery and the country continues to struggle to contain the coronavirus disease 2019 (COVID-19) pandemic.

“The third-quarter outturn for real GDP growth of -11.5% year on year reinforces the downside risks to our current forecasts. While the quarter-on-quarter rebound is one of the largest that we’ve seen in the region, the continued contraction in year-on-year terms highlights the magnitude of the negative impact of the ECQ earlier in the year,” said Christian de Guzman, senior vice-president of Sovereign Risk Group at Moody’s Investors Service in an e-mail last week.

The economy shrank by 11.5% in the third quarter, easing from the 16.9% slump in the second quarter. Economic output fell 10% in the first nine months of the year, exceeding the government’s projected 4.5-6.6% contraction for the full year.

Mr. De Guzman said recovery prospects will depend on the country’s ability to contain the spread of COVID-19 without resorting to a strict lockdown.

The Health department reported 1,530 new cases of COVID-19, bringing the total to 407,838, as of Sunday.

For Fitch Ratings, the third-quarter GDP result was weaker than expected but is unlikely to affect the Philippines’ recovery prospects for 2021. Fitch expects the Philippine economy to shrink by 8% this year before growing by 9% in 2021.

“The Q3 GDP outturn was weaker than we expected, and together with the downward revision to Q2, we see some modest downside risk to our existing -8% GDP growth projection for 2020. That said, the Q3 outturn does not alter our view of the Philippines’ recovery prospects for 2021 which remain intact despite ongoing risks from the virus, both domestically and globally,” Sagarika Chandra, associate director for Asia-Pacific sovereigns at Fitch Ratings said in an e-mail on Friday.

Ms. Chandra said they will look at the government’s fiscal consolidation plans and its medium-term policy framework post-crisis in deciding on its rating outlook for the country.

The debt watcher in May downgraded its outlook for the Philippines to “stable” from “positive,” and affirmed the country’s “BBB” credit rating.

“We will also assess the extent to which the crisis may affect the Philippines’ otherwise strong medium-term growth potential, which has supported the country’s BBB sovereign rating,” she added.

Meanwhile, the ASEAN+3 Macroeconomic Research Office’s (AMRO) is likely to lower its forecast for the Philippine economy this year.

“In view of recently released Q3 GDP growth, which is lower than our expectation, we are likely to revise our forecast downward in the next round of our economic outlook updates,” Zhiwen Jiao, AMRO country economist for the Philippines, said in an e-mail last week.

AMRO projected the economy will drop by 7.6% this year, considering the rising number of coronavirus cases and two-week lockdown in August. It expects Philippine GDP to grow by 6.6% in 2021.

“We will continue to closely monitor the country’s COVID-19 pandemic situation and lockdown policies, economic conditions both domestically and internationally, as well as stimulus policies for households and businesses,” Mr. Jiao said.

The Organization for Economic Cooperation and Development (OECD) on Friday said it expects the Philippine economy to shrink by 8.4% this year, from the previous 3.2% drop it gave in July.

OECD Development Centre Head of Asia Desk Kensuke Tanaka said policy support from both fiscal and monetary measures will have to continue to boost the Philippines’ recovery prospects amid weak investment, consumption, job market and remittances.

“In particular, the special attention will be needed for financial market stability. Delay of infrastructure investment will also be another downside risk,” he said.

PLDT, Smart to deal with users’ concerns via ‘virtual meeting’

PLDT, Inc. and its wireless arm Smart Communications, Inc. are launching a virtual meeting service for their customers to accommodate their queries or concerns, as the public health crisis continues.

“Beginning on November 16, 2020, Smart subscribers can visit stay.smart” to book a virtual appointment with their preferred retail outlet,” PLDT and Smart said in a joint statement at the weekend.

PLDT customers can visit pldthome.com to schedule a virtual appointment, they added.

The telcos also said their customers will receive an MS Teams meeting link via their e-mails, which they can open on their browsers or through the MS Teams app.

Both PLDT and Smart are also launching a booking service for in-store visits, especially for concerns or services that require a personal appearance.

“This would allow them and an assigned PLDT-Smart store frontliner to meet safely in the store premises, following strict health guidelines set by the government and the company,” the companies said.

PLDT and Smart said further they would make available their online appointment service on their official social media pages.

Alex O. Caeg, senior vice president and head of consumer sales group at PLDT and Smart, said: “With this online booking system, we hope to give them a more convenient experience whenever they need to do business with our stores nationwide. We would also like to encourage them to shift to digital transactions in the safety of their homes, especially during a time when people should practice physical distancing in the pandemic.”

“This is part of… PLDT’s efforts to ramp up its digital services, help in the recovery of the economy, and at the same time, promote the health and safety of employees and customers as we navigate the next normal,” Mr. Caeg added.

PLDT saw its attributable net income for the third quarter surge 95% to P7.41 billion versus the P3.79 billion it generated in the same period last year.

The company attributed its growth for the quarter to the spike in customer demand for digital or online services triggered by the ongoing coronavirus pandemic.

PLDT saw a 10% increase in its total revenues to P46.49 billion. The company’s service revenues grew 9% to P44.37 billion while its non-service revenues increased 18% to P2.12 billion.

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

Filinvest Group posts profit growth as bank, sugar units improve

EARNINGS of listed conglomerate Filinvest Development Corp. inched up 3% to P8.9 billion in the three quarters through September, supported by its robust banking and sugar businesses despite the coronavirus pandemic.

In a statement over the weekend, the Gotianun family-led company said its total revenues and other income fell 9% to P57.1 billion during the nine-month period.

However, the topline decline was offset by its efforts to temper direct costs, which stood at P15.6 billion, or down 36% from the same period last year.

By business segment, its banking operations through East West Banking Corp. generated a net income of P5.8 billion, rising 32% from its contribution a year ago. The company attributed this growth to improved margins in its core lending and deposit-taking businesses and higher gains from trading.

The real estate business, represented by Filinvest Land, Inc. and Filinvest Alabang, Inc., continued suffering from the lockdown to contain the coronavirus outbreak. Its net income contribution dropped 15% to P5.1 billion, as sales and rental revenues both declined during the period.

Revenues from selling lots, condominium and residential units dropped 55% to P7.2 billion, as some of its projects were delayed by the suspension of construction work in mid-March. It also rolled out a grace period for payments to buyers, and generally recorded lower take-up than last year.

Revenues from rent were likewise 4% lower at P5.1 billion, as the company endured mall closures and waived payments for tenants.

FDC Utilities, Inc., the group’s power subsidiary, recorded a net income growth of 3% to P1.8 billion. While its revenues for the nine months fell 17% to P6.4 billion, it said it controlled its operating expenses to decline 29% to P1.52 billion.

While the other segments remained profitable, the group’s hotel business, through Filinvest Hospitality Corp., swung to a P487-million net loss from a P266-million net income last year. Its revenues slid 59% to P981 million due to a dampened tourism industry because of the pandemic.

“We are pleased with the strength and resilience of the Filinvest Group. Our banking and sugar businesses covered the gap caused by the hospitality and real estate businesses, which are the most affected by the pandemic-related government restrictions,” Filinvest President and CEO L. Josephine G. Yap said in the statement.

“[W]e are confident that our balanced portfolio can withstand the current crisis and we are prepared to take advantage of opportunities when the current situation turns around,” she added.

Filinvest’s debt-to-equity stood at 0.94:1 at the end of the nine months, while its net debt-to-equity was at 0.39:1.

Shares in the company closed at P9.48 each on Friday, up 35 centavos or 3.83% from the earlier day. — Denise A. Valdez

Rates of T-bills, bonds to move sideways on inflation outlook

TREASURY BILLS and bonds on offer this week will likely see their rates remain steady or inch higher. — BW FILE PHOTO

RATES of government securities on offer this week may end flat or inch higher as investors expect inflation to remain benign and as US Treasury yields rise further.

The Bureau of the Treasury (BTr) will offer P20 billion in Treasury bills (T-bills) on Monday: P5 billion each in 91-day and 182-day papers and P10 billion in 364-day securities.

On Tuesday, the government will auction off reissued 10-year Treasury bonds (T-bonds) worth P30 billion. The papers have a remaining life of four years and nine months.

A trader said T-bill rates may remain unchanged at Monday’s auction amid strong liquidity among investors.

“The market is still awash with cash. Inflation is also expected to remain within the government’s target despite a faster but still manageable rate in October,” the trader said in a text message.

Another trader said the rates of the T-bills on offer may increase slightly as more consumers are encouraged to spend with the continued gradual reopening of the economy.

The overall year-on-year increase in prices of widely used goods rose to its fastest pace in three months in October, the government reported earlier this month.

Preliminary data from the Philippine Statistics Authority (PSA) showed headline inflation at 2.5% in October, picking up from the 2.3% pace the month before.

The October inflation result marked the fastest pace in three months or since the 2.7% reading in July 2020.

The latest headline figure is higher than the 2.4% median in a BusinessWorld poll conducted late last week and falls within the 1.9-2.7% estimate given by the Bangko Sentral ng Pilipinas (BSP) for October.

Year to date, inflation settled at 2.5%, still within the BSP’s 2-4% target this year, but above its 2.3% forecast for the entire year.

Meanwhile, the second trader said the rates of the 10-year T-bonds may increase to track US Treasuries following the result of the US presidential election.

The US Treasury yield curve steepened on Friday as upbeat earnings and US President-elect Joe Biden’s COVID advisory team helped reassure investors about the threat of new pandemic-related lockdowns to combat record spikes in coronavirus infections, Reuters reported.

Mr. Biden solidified his election victory as Arizona’s 11 electoral college votes were added to his column, but the official transition remains in limbo as President Donald Trump persists with his refusal to concede.

Still, Mr. Biden’s pandemic advisory board provided a glimpse into the next president’s coronavirus plan, and said there was no plan to enact a nationwide shutdown.

US Treasury yields were mixed as investors consolidated positions ahead of the weekend and remained cautious given the surge in coronavirus cases. But the yield curve steepened on Friday, after flattening the previous session.

Benchmark 10-year notes last fell 2/32 in price to yield 0.893%, from 0.886% late on Thursday.

The 30-year bond last rose 5/32 in price to yield 1.6455%, from 1.652% late on Thursday.

The Treasury upsized its award of T-bills last week as yields declined across the board amid strong liquidity in the market.

The BTr borrowed P24 billion via the T-bills on Monday, bigger than its P20-billion program, as the offer was nearly six times oversubscribed, with bids amounting to P112.101 billion.

The government accepted more bids from non-competitive investors for the three-month and six-month tenors to take advantage of the lower yields fetched for these papers.

Broken down, the BTr awarded P7 billion in 91-day papers, higher than the P5-billion program, as tenders reached P33.058 billion. The three-month debt fetched an average rate of 1.024%, down by 3.4 basis points (bps) from the 1.058% seen in the previous auction.

The Treasury likewise awarded P7 billion in 182-day papers, more than the planned P5 billion, as bids amounted to P37.548 billion. The six-month T-bills were quoted at an average rate of 1.453%, 4.6 bps lower than the 1.499% logged in the previous offering.

Meanwhile, the government borrowed P10 billion as planned from the 364-day T-bills, with tenders reaching P41.495 billion. The one-year securities fetched an average rate of 1.745%, inching down by 1.4 bps from the 1.759% quoted in the previous week’s offering.

On the other hand, the government awarded P30 billion as planned in reissued 10-year bonds when they were last offered on Oct. 20 at an average rate of 2.782%, down from the 3.182% in the June 23 auction.

The bonds on offer were originally issued on Sept. 9, 2015 with a coupon of 3.625%.

At the secondary market on Friday, the 91-day, 182-day and 364-day T-bills were quoted at 1.104%, 1.472% and 1.768%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

Meanwhile, the five-year T-bonds — the tenor closest to the remaining life of the 10-year bonds to be offered on Tuesday — were quoted at 2.738% at the secondary market.

The Treasury plans to borrow P140 billion from the domestic market this month: P80 billion in weekly T-bill auctions and P60 billion in fortnightly Treasury bond auctions.

It is also offering another tranche of Premyo bonds to raise at least P3 billion. The offer period is set to run from Nov. 11 to Dec. 18.

Premyo bonds are part of the government’s bid to attract more small investors to invest in government securities. Last year, the BTr raised P4.961 billion from the sale of one-year peso-denominated Premyo bonds, up from its initial offer of P3 billion.

Premyo bonds are government securities that have corresponding raffle numbers for cash and non-cash prizes, aside from earning interest. The minimum investment for the bonds stands at just P500 and can be bought in multiples. One Premyo bond is equivalent to one raffle ticket.

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 9.6% of the country’s gross domestic product. — K.K.T. Jose with Reuters

AllHome records flat earnings, plans to open more stores

HOME improvement retailer AllHome Corp. posted an attributable net income of P312 million in the third quarter, flat from a year ago but 6,140% higher than the P5 million in the previous quarter.

In a statement over the weekend, the Villar-led company said the relaxation of quarantine rules helped it recover in July to September, recording an 11% sales growth to P3.47 billion against last year.

On a quarterly basis, the company’s sales likewise jumped more than double from P1.49 billion in the second quarter.

Year-to-date, AllHome’s attributable net income dropped 21% to P588 million, as sales growth slowed to 2% to P8.33 billion.

In its regulatory filing, the company linked much of its nine-month slowdown to the government’s lockdown to contain the coronavirus pandemic. It temporarily closed all 40 stores in Luzon for two months from mid-March to mid-May.

AllHome’s 46-store network as of end-September is up 70% from the 27 stores it had in the same period last year. It also expanded its net selling area by 43% to 308,530 square meters.

However, its net sales only inched up 2% because of the temporary store closures in the second quarter. Sales growth in existing stores dropped to 0.3% from 32% last year.

“We remain bullish with the home improvement industry for the remaining months of the year. The level of sales has greatly improved in the third quarter and in AllHome’s case, our fourth quarter sales historically are our highest, benefiting from the holiday season,” AllHome Chairman Manuel B. Villar, Jr. said in the statement.

“The improvement in our performance is driven primarily by the opening up of the economy, which resulted to more people visiting and buying at our stores across the country,” he added.

In October, AllHome had opened a new store in Las Piñas City, which raised its store count to 47 after the reporting period. The company said it plans to open two more stores as it heads into the last stretch of 2020, which would bring its total store count to 49 by yearend.

“We have seen marked improvements in our sales on a weekly basis, which gave management the confidence to open four new stores for the year. Our ability to quickly adjust our store expansion program is attributable to our collaboration with the Villar Group in terms of captive customer base, store locations, and execution capability,” AllHome President Benjamarie Therese N. Serrano said.

“Now that we see more people in our stores, our safety policies and guidelines are more important than ever, both for employees and customers. AllHome sees to it that basic health protocols are strictly followed,” AllHome Vice-Chairman Camille A. Villar added.

Shares in the company at the stock exchange closed flat on Friday at P7.75 apiece. — Denise A. Valdez

Policy makers to unwind stimulus measures with ‘delicate timing’

POLICY MAKERS in Asia discussed the need to be careful in exiting stimulus measures fired off in recent months amid the coronavirus pandemic. — BW FILE PHOTO

OFFICIALS FROM several Asian economies discussed strategies in unwinding stimulus measures fired off amid the coronavirus disease 2019 (COVID-19) pandemic to ensure the stability of their respective financial systems.

In a recent Regional Consultative Group for Asia (RCGA) meeting of the Basel-based Financial Stability Board (FSB) chaired by Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno, policy makers from 17 jurisdictions in Asia discussed initiatives to ensure financial stability as the pandemic crisis stretches on.

“With the recent prognosis of a global recovery that play out well into 2021 and likely to be at a different pace across jurisdictions, the members weighed the delicate timing of any exit from expansionary policies and other regulatory relief measures,” the central bank said in a statement on Saturday.

Mr. Diokno earlier said the BSP will be careful in unwinding the monetary policy measures it employed in recent months to support the virus-stricken economy to ensure there will be no repercussions.

In the RCGA meeting, Mr. Diokno said authorities have learned from the 1997 Asian Financial Crisis and the Global Financial Crisis in 2007 and have, in recent years, ensured their financial systems have ample liquidity to serve as buffers versus any headwinds.

As the coronavirus pandemic continues to affect economies across the world, Mr. Diokno said assessing financial stability should remain a priority.

“[M]anaging systemic risk is at its most urgent…[as] no one in this meeting doubts that the financial market will be affected, at some point and in some form,” he said at the biannual meeting held online.

Officials have acknowledged that in the Philippines, systemic risks — or the potential for a company-level event to trigger severe instability in an entire industry or economy — is a possibility amid the global recession.

Mr. Diokno has said the Financial Stability Policy Committee has been monitoring several factors such as the country’s debt-to-gross domestic product ratio and the stability of the banking system, among others, to assess the possibility of systemic risks.

“We do not have a ready playbook for addressing the financial market spillovers but we are quite sure that risk aversion abounds and incomes have been lost. That only means that much more work is ahead of us and I encourage all the participants to keep our communication channels open,” he said at the meeting.

Mr. Diokno also said challenges to cross-border payments continue and need to be addressed.

Together with other consultative groups for the Americas, Commonwealth of Independent States, Europe, Middle East and North Africa, and Sub-Saharan Africa region, the RCGA was created by the FSB to further the standard-setting body’s dialogue and implementation of the global financial stability agenda. — LWTN