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BSP adopts new bank rating system

THE Bangko Sentral ng Pilipinas (BSP) started implementing this month a new compliance rating system for banks called the Supervisory Assessment Framework (SAFr), which it hopes will ensure stability in a post-pandemic environment.

BSP Governor Benjamin E. Diokno said SAFr replaced the CAMELS (Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and Sensitivity) framework, effective Jan. 1.

The SAFr is a single integrated risk-based assessment framework, which covers all BSP-supervised financial institutions (BSFI). It links the systemic importance and risk profile of a BSFI to the formulation of supervisory plans for each institution.

The implementation of SAFr was originally scheduled for July 2020, but was delayed to give banks more time to prepare amid the pandemic.

“Prior to the adoption of the SAFr, only universal and commercial banks undergo assessments for Domestic Systemically Important Banks. Under SAFr, impact assessment considers all BSP-supervised institutions,” Mr. Diokno said in a briefing on Thursday.

SAFr assessments will be conducted at least every semester for universal and commercial banks, and annually for thrift and rural banks. The supervisory rating was assigned annually in CAMELS, regardless of the lender’s classification.

The BSFI will be assessed in terms of its impact on the financial system in case of a failure; its risk profile as identified by significant activities; and its supervisory intensity or the attention required and appropriate for the lender considering its impact and risk profile.

Under the new system, assessments may also be done anytime, in case of significant developments that change a lender’s risk profile.

Mr. Diokno said the SAFr will be instrumental in ensuring and enhancing stability in the banking industry under the “New Economy.”

“We say this because the use of off-site tools and thematic reviews, as well as the emphasis on continuous surveillance, would support more robust and dynamic assessments,” the BSP chief said.

“More frequent engagements with the supervisor can be expected for larger, riskier, and more complex BSP-supervised institutions,” he added.

In terms of rating scale, SAFr will only have a four-point system that clearly delineates between satisfactory and unsatisfactory ratings. This is unlike CAMELS which employed a five-point scale that had a tendency to lean on a “middle-of-the-road assessment,” he added.

“The adoption of the SAFr is among the reforms introduced by the BSP in response to the changes in the operating landscape brought about by financial innovation, deregulation, competition, and advancements in information technology,” Mr. Diokno said.

The BSP maintains that the local banking industry remains on solid footing and well-capitalized, despite the impact of the pandemic.

In a separate briefing on Thursday, Mr. Diokno said that the capital adequacy ratio of universal and commercial banks stood at 16.3% on a solo basis and at 16.7% on a consolidated basis as of end-June 2020. Both are well above the 10% requirement by the BSP as well as the 8% set by Basel III regulations. — Luz Wendy T. Noble

Local airlines feel the pressure as new COVID variant dents demand

By Arjay L. Balinbin, Senior Reporter

THE new strain of the coronavirus disease 2019 (COVID-19) will likely place renewed pressure on the finances of airlines, as countries reimpose lockdowns and travel bans, analysts said.

“The new strain is still apparently being studied by the authorities. However, drastic measures have already been taken. Countries are closing their doors again. The Philippines has banned flights to and from 21 countries, most of which are the densest air sectors of the airlines. It will definitely aggravate the already dire situation of the airlines,” Avelino D.L. Zapanta, a Philippine aviation industry expert, said in an e-mail interview on Monday.

The Health department has maintained that the new COVID-19 strain has not yet been detected in the Philippines. This even as Hong Kong authorities reported that a 30-year-old female resident who arrived from the Philippines on Dec. 22 tested positive for the new coronavirus strain.

The Philippines has so far banned the entry of residents from 21 countries, including the United Kingdom, United States, Japan, Germany and Canada, where the more infectious variant of COVID-19 has been detected. The travel ban will be expanded to residents from six more countries — Portugal, India, Finland, Norway, Jordan, and Brazil — starting Friday (Jan. 8) until Jan. 15.

Demand for air travel is expected to continue to slump, without the wide availability of a COVID-19 vaccine.

Mr. Zapanta said PAL and Cebu Pacific will incur more losses “because of their huge exposure in their leased aircraft.”

“They will continue to suffer in huge payables for which they have no corresponding means for traffic and revenue generation. Both, I believe, are in their fourth year of continuing huge losses. I don’t know how long they would last,” he said.

“We still have to see how the vaccines would alleviate the situation. In our case in the Philippines, it is said the vaccine might be acquired by the second quarter yet, at the earliest. You can count the whole year out with this development,” Mr. Zapanta said.

Japhet Louis O. Tantiangco, a senior research analyst at Philstocks Financial, Inc., said the airline industry will continue to see a dismal year.

“The airline industry is still operating below full capacity, so operations this year could remain dismal. Financial results this year could remain dismal,” he said in a phone interview on Wednesday.

Amid the crisis, he said listed airlines will have to keep their balance sheets stable and meet their debt obligations.

“The global economy is still trying to recover. With that, there is not much disposable income in the pockets of consumers — and because of that, we may not see much traveling even if the COVID-19 is already solved. I mean the damage has already been done to the global economy. With that, we may not be seeing much traveling for leisure purposes, and, of course, this is going to weigh on our airline companies,” Mr. Tantiangco said.

This year will be a roller-coaster ride for airlines, according to Astro C. del Castillo, managing director at First Grade Finance, Inc.

“However, the saving grace would be the cargo segment. It could pick up this year considering that most countries will be trying to manage the situation. Cargoes could pick up rather than passengers, but again, nevertheless, the expenses from COVID materials or paraphernalia that they need could continue to impact their profit margins,” he said in a phone interview on Wednesday.

Mr. Del Castillo said the airline industry could see consolidation in the long run, especially among international carriers.

“There is no right vaccine for the airline industry for this year,” Mr. Del Castillo noted, but they can stay afloat through refinancing and if they secure government help.

On whether banks would still be willing to provide loans to airline companies, he said: “Banks will consider them as high-risk business entities. But considering that they have already invested so much in terms of providing loans, they could think of a business model. It’s basically in the ball of the airline industry on what business models they can offer to the financing institutions, not to mention the government per se.”

“If they have a good game plan, of course, it will be supported by the government and the financial institutions. It’s difficult, kaya nga sabi natin bayanihan eh. Kapag nagsara ’yan, worst scenario, kapag nagsara ang airline industry, what will happen to us? At the end of the day, the government should still support them because who will fly the medical personnel from Luzon to Mindanao? Who will fly the goods? So it will really hurt the economy. I think the best choice really is to help the airline industry,” Mr. Del Castillo explained.

In November,  Finance Secretary Carlos G. Dominguez III said flag carrier PAL had informed his department about the company’s plans to seek court protection from its creditors.

PAL Holdings, Inc., the listed operator of the flag carrier, reported its net loss hit P28.85 billion in the first nine months of 2020, or more than three times the P8.49-billion loss recorded in the same period in 2019.

Meanwhile, Cebu Air, Inc., the listed operator of budget carrier Cebu Pacific, swung to a net loss of P14.69 billion during the January to September period, from the P6.77-billion profit it generated in the same period in 2019.

On Thursday, PAL Holdings shares closed 2.15% higher at P6.64 apiece while shares in Cebu Air closed 6.64% up at P49 apiece.

PHL retail sales unlikely to return to pre-pandemic levels this year

By Jenina P. Ibañez, Reporter

RETAILERS still expect sales to remain lower than pre-pandemic levels this year, as consumers continue to stay home and scale back on their spending amid the pandemic.

“Retail will still be soft this year 2021,” Philippine Retailers Association (PRA) Vice-Chairman Roberto S. Claudio, Sr. said in an e-mailed response to questions on Thursday.

“We are expecting 20-30% lower than 2019 pre-pandemic level. This is, however, a slight improvement of approximately 10% from 2020 levels,” he added.

Retail was one of the hardest-hit sectors last year, as the strict lockdown forced the closure of non-essential businesses for a few weeks. Malls also experienced a significant decline in foot traffic, as many consumers stayed home and shifted to online shopping.

To spur recovery, Mr. Claudio said the retail sector is filing a formal request with the government to include its frontline workers among those with vaccination priority against the coronavirus disease 2019 (COVID-19).

“This way, more retail businesses could be opened, to further open up the economy safely,” he said.

The Philippines is in talks with seven vaccine manufacturers for 148 million COVID-19 vaccine doses that can inoculate 50-70 million Filipinos this year.

National Task Force Against COVID-19 chief implementer Carlito G. Galvez said that the government vaccine program will prioritize healthcare workers, uniformed personnel, teachers and school workers, government employees, overseas Filipino workers, and other essential workers. The government will also prioritize indigent senior citizens, poor communities, students, and people with comorbidities.

PRA in November said that sales have improved since the easing of lockdown restrictions in mid-August, but operations of many retailers are still limited due to sparse foot traffic and dwindling cash flow.

The industry group also found that consumer demand remained low due to public health anxiety and limits on public transportation.

Mr. Claudio had said that food, medicine, and fitness equipment sales were strong, but some stores selling non-essential products like clothing were still performing poorly.

Foreign clothing brands such as Dorothy Perkins and Warehouse offered deep discounts before closing branches in some Metro Manila malls.

Consumer behavior will change, according to Nielsen Retail Intelligence, as they shop more online and buy “self-care” and smaller-sized goods.

Third-quarter consumption declined by 9.3%, against the 15.3% drop in the second quarter, according to the Philippine Statistics Authority.

SE Asia’s 2020 steel consumption down 6.2%-8.7%

STEEL CONSUMPTION in Southeast Asia’s six biggest economies is estimated to have declined as much as 8.7% last year due to pandemic-driven lockdowns, and prospects for a quick rebound remain clouded, an industry group said on Thursday.

As the economies of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam were hit hard by the global health crisis, the region’s steel consumption likely slumped to between 73.3 million tons and 75.3 million tons, according to the South East Asia Iron and Steel Institute (SEAISI).

The estimates are 6.2%-8.7% lower than the 2019 volume, it said in a report.

Construction activity, traditionally the main driver of steel demand in the region, was disrupted in Indonesia, Malaysia and the Philippines. In contrast, Vietnam was able to expand in the sector, having been able to quickly curb the coronavirus spread, the group said.

Thailand has also taken immediate action by boldly driving the demand for construction in the second and third quarters, it said.

The automotive industry was also a “major victim” among the region’s steel consumers, with the largest producing countries Thailand, Indonesia and Malaysia severely hit, while the manufacturing sector also took heavy blows, it said.

But not all is bad during the economic downturn, as the region’s steel producers opted to boost exports to countries that had controlled the pandemic and restarted their economies much earlier, notably China, while domestic demand remains sluggish.

Southeast Asia’s steel exports jumped 27% to 9.3 million tons in the first half of 2020 from a year earlier, according to SEAISI.

With COVID-19 restrictions still in place, the group said activity in the region’s construction sector and infrastructure expansion remains limited.

“With collapsing domestic demand for steel, steel industries are facing the urgent need for new market opportunities outside the region to withstand the economic downturn,” the group said. — Reuters

SEC approves Investree as country’s first crowdfunding portal

By Revin Mikhael D. Ochave, Reporter

THE Securities and Exchange Commission (SEC) gave the go-signal for Investree Philippines, Inc. to start operating a crowdfunding platform that plans to link small, medium and emerging enterprises with banks and other lending institutions.

In a statement on Thursday, the SEC said Investree’s application to function as a funding portal and serve as a crowdfunding intermediary had been approved during the commission’s meeting on Dec. 22.

“The registration of Investree as crowdfunding intermediary and funding portal shall be valid for one year, subject to a review by the commission of the actual operation of the crowdfunding portal during the first 11 months for possible extension,” the SEC said.

Investree is the first crowdfunding intermediary and funding portal that registered with the SEC since the guidelines on crowdfunding took effect in July 2019. The company is a joint venture between Filinvest Development Corp. and Investree Singapore Pte. Ltd.

According to the SEC, crowdfunding is a fundraising act that is usually conducted via an online platform for startups and small and medium enterprises.

Three parties are involved, namely: the entrepreneur or project initiator, supporters or those who will fund the project, and the platform that consolidates the entrepreneur and supporters to realize the business project.

SEC said crowdfunding may be lending-based, where money from supporters will be lent to the entrepreneur and receive a legally binding document to repay the loan at a certain time and interest rate.

Similarly, crowdfunding can be equity-based, where supporters invest in shares sold by the entrepreneur and gain a share of the profits.

“Crowdfunding may also be donation-based, where supporters pool their resources to support a charitable cause; or reward-based, where supporters give money in exchange for a ‘reward,’ usually a product produced by the project initiator,” the SEC said.

Among the types of crowdfunding, SEC said Investree will operate a lending-based platform. Its lenders will be banks or qualified buyers, while the borrowers will be limited to small, medium, and emerging enterprises.

“Lending-based and equity-based crowdfunding activities involve the offer of securities in the form of debentures or shares. As such, they are subject to securities regulation in many jurisdictions,” the SEC said.

Under Republic Act No. 8799 or the Securities Regulation Code, securities are not allowed to be sold or offered for sale or distribution without the necessary registration statement approved by the SEC.

However, the SEC said crowdfunding rules provide an exemption from the registration of crowdfunding securities as long as the issuer, intermediary, and investors comply with certain rules.

“Under the rules provided through SEC Memorandum Circular No. 14, Series of 2019, a crowdfunding intermediary may be a registered broker, investment house or funding portal, which mediates the offer and sale of crowdfunding securities through an online, electronic platform,” the SEC said.

Meralco’s MGen takes majority stake in Bulacan solar company for nearly P159 million

MERALCO PowerGen Corp. (MGen) has gained control over a solar energy company in Bulacan by acquiring its co-owner’s shares for P158.95 million, its parent firm Manila Electric Co. (Meralco) told the local bourse on Thursday.

In a regulatory filing, power distributor Meralco said MGen unit MGen Renewable Energy, Inc (MGreen) increased its equity in PowerSource First Bulacan Solar, Inc. (PFBSI) by 20% with the purchase of 315,839 shares from Sunseap Philippines Solar Holdings Pte. Ltd.

The acquisition raised MGreen’s ownership in the Bulacan firm to 60%.

“Nature and amount of consideration given or received (is at) P158,950,300,” Meralco said, referring to the amount its unit paid for the additional shares.

Previously, MGreen owned 40% of the solar company, Sunseap held 24%, with Powersource Energy Holdings Corp. owning 36%.

Meralco said the acquisition is in line with MGen’s goal to “diversify and increase investment in the renewable energy sector.”

“The acquisition increases the attributable and net sellable capacity of MGreen, which is in line with [MGen’s] goal of building a portfolio of 1,000 MW (megawatts) renewable energy projects in the next 5 to 7 years,” it said.

PFBSI is constructing a 50-MW utility-scale solar facility, which is expected to begin commercial operations in the first quarter this year.

The deal comes after Meralco announced last month that its unit MGen would fully own Global Business Power Corp. (GBP) after signing a deal with the latter’s two main stakeholders to transfer their shares for around P34.47 billion.

On Dec. 28, the local bourse suspended the trading of Meralco’s securities as the distribution utility had yet to submit the requirements for its substantial acquisition of GBP.

Open-end investment company First Metro Philippine Equity Exchange Traded Fund, Inc. (FMETF) previously said that the lifting of the suspension would be announced at a later date.

On Thursday, shares in Meralco on Thursday inched down by 0.67% to close at P297 apiece.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., which has interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang

DBP lends Hijo Superfoods P645 million to ramp up sugar, banana flour production

STATE-RUN Development Bank of the Philippines (DBP) extended a P645-million loan to Hijo Superfoods, Inc. (HSI) to boost the local manufacturer’s coconut sugar and banana flour production for export.

In a statement on Wednesday, DBP President and CEO Emmanuel G. Herbosa said the loan will fund the company’s “Project Honeycomb” that will beef up the production of these export products to nine metric tons (MT) each day from 12 MT per month, previously.

The project aims to use advanced technology and machineries to ramp up production, the lender said.

“DBP has always been supportive of the initiatives of our local industries that benefit not just the local community, but promote the country as well through their world-class products,” Mr. Herbosa was quoted as saying.

The company plans to ship these products to export markets, which could generate them over $10 million in gross income, said DBP Senior Vice-President for Southern and Western Mindanao Lending Group Ana Marie E. Veloso in the same statement.

Producing banana flour is a start-up initiative for the company that uses bananas sourced from HSI’s own farms and other firms.

Ms. Veloso said the project will help the livelihood of local coconut farmers to be more sustainable against the highly volatile prices of copra in the external market.

“On another note, the products of Hijo are also considered as healthier alternatives to regular processed sugar thereby contributing immensely to the nation’s efforts to combat and control non-communicable diseases such as diabetes,” she added.

The state-run lender saw its loan portfolio rose by 14% year on year to P374.85 billion in the nine months to September last year.

However, its net income went down by 26.69% to P3.24 billion after setting aside higher provisioning for expected credit losses amid the pandemic-induced recession.

DBP was the ninth-largest bank in the country with total assets of P761.5 billion in 2019.

Its focus is extending credit financing for infrastructure and logistics; micro, small and medium enterprises; social services and community development; and as well as the environment. — Beatrice M. Laforga

Solutions for pandemic challenges sought in Final Pitch

FILIPINO business reality show, The Final Pitch, enters its sixth season with calls for non-profit organizations, startups, and innovators that have new solutions to address pandemic-related challenges to submit their pitches to join the show.

Called the “Heroes Edition,” the pitches will be screened by Li Hao Zhuang, the President and CEO of FWD Insurance, and Vince Yamat, the Managing Partner of 917Ventures as investors looking for multisectoral business solutions and high impact advocacies will decide to donate, invest, or give grants to successful entrants.

Pitches for donations and grants must come from reputable organizations that have a specific ask for beneficiary communities such as medical frontliners, farmers, indigent communities, and displaced workers.

Pitches for investments meanwhile, should come from entrepreneurs, inventors, and startups that provide solutions and technologies to the country’s transition to the new normal. Sample target sectors include retail, transport, and tourism. Likewise, ideas for employment of both locals and displaced OFWs, and business solutions for MSMEs (micro-small-medium-sized enterprises) are also welcome.

Online entries and one-minute pitch videos can be submitted via TheFinalPitch.ph/application. Interested investors and corporate partners may also reach the show through submit@TheFinalPitch.ph or 0917-813-6674. For more information, visit www.thefinalpitch.ph and follow its social media accounts. — ZBC

Axelum allots P350 million for 2021 capex

LISTED Axelum Resources Corp. has allocated around P350 million for its capital expenditures (capex) in 2021 to support its growth amid the coronavirus disease 2019 (COVID-19) pandemic.

In a regulatory filing on Thursday, the company said it had earmarked the said amount to fund the modernization of equipment, upgrade its capacity, and new product research and development initiatives.

“The company is also seeking to extend its market reach both domestically and overseas by appointing reputable distribution partners in identified key growth areas and continues to look for strategic and value-accretive targets for either an acquisition or joint-venture,” the company said.

Axelum has started the production of pressed coconut water, which is a product of its client Vita Coco. The company projects to achieve double-digit volume growth in its coconut water segment due to stronger demand.

“Last year, we capitalized on downtime at our manufacturing facilities driven by the COVID-19 pandemic to increase capacity in existing products and introduce new products, both of which will drive substantial growth in the future,” Axelum President and Chief Operating Officer Henry J. Raperoga said.

Further, Axelum is currently operating its production lines at full capacity for products such as coconut milk powder, desiccated coconut, coconut water, and coconut cream and milk.

Citing industry experts, the company said the market for coconut milk powder is expected to quickly grow due to its commercial applications and higher demand for organic coconut milk powder as a component for plant-based food products.

“We are entering 2021 with a renewed sense of courage and optimism anchored on our collective efforts and various learnings from last year, which strengthened our character and resolve,” Mr. Raperoga said.

Axelum recently announced the extension of its share buy-back program up to P500 million until June 30, 2021. As of writing, the company has bought 80.43 million treasury shares.

On Thursday, shares in Axelum at the stock exchange fell 1.53% or five centavos to end at P3.22 apiece. — Revin Mikhael D. Ochave

OFW deployments estimated to have fallen up to 75% in 2020 — POEA

OVERSEAS WORKER deployments fell by up to 75% in 2020 as job markets shut down due to the pandemic while movement to work sites was hindered by travel restrictions, according to preliminary estimates issued by the Philippine Overseas Employment Administration (POEA).

The agency’s administrator Bernard P. Olalia said at a briefing Thursday that the decline in worker deployments takes in the tally from both land-based and sea-based overseas Filipino workers (OFWs).

The newest official POEA statistics on worker deployments found on the agency’s website only run to 2016, during which the total OFW population was recorded at 2.55 million, including 1.7 million land-based workers.

“Ayon sa data natin, nasa 70% to 75% ‘yung decline ng ating deployment kumpara sa historical data (According to our data, the decline in deployment is around 70% to 75% compared to historical data),” he said.

Mr. Olalia said the slump in deployments also affected recruitment agencies in the Philippines, foreign employers that depend on imported labor, and insurance companies that lost premium income from the inability to issue policies to deploying workers, as required by labor rules.

As the global economy gradually reopens, Mr. Olalia said he hopes 2021 will see improved deployments.

“Sana unti-unti itong sumisigla (I hope we see a gradual return to health for the job market),” he said. — Gillian M. Cortez

Upscale hotels popular for New Year stays

Pinoys choose ‘outdoorsy’ destinations

A YEAR of pandemic restrictions have prompted travelers to ring in the new year with more upscale stays, according to travel booking website, Agoda.

Using data Agoda collected from Dec. 10 for New Year’s Eve bookings, the company saw four- and five-star accommodations being the accommodation of choice globally to celebrate the new year in 2020, in contrast to 2019 where one- to 3.5-star hotels were in first place and upscale hotels in second, with the exception of Taiwan, Thailand, and the United States which continued to favor one- to 3.5-star hotels this year.

Four- and five-star hotel bookings saw an increase of 13 percentage points in 2020 compared to the year prior, according to a company statement.

In the Philippines, with travel restrictions loosening, Filipinos continued to enjoy their New Year’s Eve celebrations in Manila, Cebu, and Tagaytay which occupied the top three Domestic Destinations in both 2019 and 2020. Both the 2019 and 2020 lists feature similar domestic destinations including Baguio, Boracay, and Palawan, although 2020 saw the entry of Batangas and Laguna which Agoda said is because “Filipinos are also exploring destinations that are ‘outdoorsy’ for a quick respite.”

“While 2020 might have upended many travelers’ plans, Agoda’s data that 4- to 5-star hotels are most popular among New Year’s Eve bookings this year shows us that there’s great desire among travelers to pamper themselves and optimistically usher in the New Year in style. We are heartened that travelers are not letting the pandemic dampen their travel spirits, and are also spending the New Year exploring domestic destinations less traveled, supporting local tourism communities in those areas,” Errol Cooke, vice-president of partner services at Agoda, said in the statement.

Yields on gov’t debt to stay low

YIELDS on government bonds are likely to stay low this year, with a slight pickup seen in the later months, as financing pressure remains subdued, ANZ Research said.

ANZ Research said in a note titled “Asian Rates Insight: Philippines – RPGB supply and demand in 2021” on Monday that while the government’s financing needs this year will remain large due to its bigger budget and wide fiscal deficit, the increase will remain modest from the record borrowings worth P3 trillion last year.

It said the government has several financing options which ease the pressure on the local debt market, such as tapping offshore sources while global liquidity remains elevated. The Bangko Sentral ng Pilipinas (BSP) is also sharing the burden with its accommodative monetary stance, it added.

This means government bond yields will remain subdued and only start rising, especially for longer tenors, towards the end of the year, ANZ Research said. It noted that the 10-year bond could see its rate climb by 50-60 basis points (bps).

“Helped by the vaccine rollout, the Philippine economy will likely recover, with an upward bias in long-dated yields and curve steepening in tandem with external markets. All said, we expect only modest upward pressure on RPGB (Republic of the Philippines government bond) yields, mostly in the latter part of 2021,” ANZ Research said.

Economic managers have capped the budget deficit at 8.9% of gross domestic product (GDP) this year. It plans to borrow P3.025 trillion to help fund its P4.5-trillion budget — 85% or P2.58 trillion from local lenders and the balance worth P442 billion to be raised offshore.

“Pressure on the RPGB market will be alleviated by the government’s strong cash position, with retail bonds and offshore borrowing remaining viable funding channels,” it said.

ANZ Research estimates that the government’s cash position stood at P1.34 trillion at end-October 2020.

“BSP is ready to provide funding if needed. The central bank has been proactive in sharing the fiscal burden to fight the pandemic,” it added.

It noted the central bank’s purchase of three-month Treasury bills in March worth P300 billion, as well as the P540 billion it lent to the government in October.

The BSP last month also approved another cash advance worth P540 billion for the government.

ANZ Research said the central bank is likewise expected to buy securities from the secondary market again in the coming months in a repeat of its bond buying program last year that helped manage liquidity conditions. — B.M. Laforga

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