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Petron swings to profit on retailing margins

PETRON Corp. returned to profitability in the third quarter and posted a P1.63 billion consolidated net income, which the country’s largest oil refining and marketing company said was largely driven by retailing margins.

“With our judicious use of resources, we are determined to expedite our overall recovery, minimize the pandemic’s impact on our business, and deliver more positive results,” Petron President and Chief Executive Ramon S. Ang said in a press release on Tuesday.

Despite what it called a “modest recovery,” the company said its refining segment continued to incur losses due to thin refining margins.

No comparative figure was released for the period, but the listed oil firm reported last year a consolidated third-quarter net income of P1 billion. In the second quarter this year, Petron suffered losses of P9.36 billion.

The company, which also does business in Malaysia, said consolidated retail volume improved by 48.6% for the July-September period versus the second quarter. It said gas stations started operating under normal hours in August with the reopening of the economy.

“While the oil industry continues to face major challenges, we are beginning to see signs of recovery thanks to our government’s decision to gradually and safely restart the economy,” Mr. Ang said.

“Aside from retail, we can also expect the reopening of local tourism to influence higher demand for aviation fuel, which really took a hit because of the pandemic. We’ve also seen some improvements in Malaysia with a notable upturn in our domestic volume to almost pre-pandemic levels,” he added.

For the nine months to September, Petron incurred a net loss of P12.6 billion, reversing its P3.6 billion net income in the same three quarters last year. It recorded a 43% decline in revenues to P216.4 billion from last year’s P381.7 billion.

Consolidated sales volume from the Philippines and Malaysia shrunk by 24% to 59.5 million barrels from last year’s 78.7 million barrels. In the Philippines, volume surged 33% with most Petron stations operating under normal hours since August.

Petron said its year-to-date performance was hit by the “significant” 40% drop in domestic volume and the P13 billion inventory losses during the first four months of the lockdown.

It said global oil prices remained depressed with the benchmark Dubai crude averaging $41.5 per barrel during the past three months. It added “refining cracks” have barely recovered from a low of $2.20 per barrel in September to current levels of around $2.80 per barrel.

Petron’s quarterly report comes a week after Mr. Ang said the refinery would be closing “very soon,” because of a challenging environment and uneven playing field.

“We have several tax-related concerns, which we have already raised with the government. Under the current regime, refiners are faced with the burden of paying so much more taxes than importers making it more difficult for us to preserve the viability of operating a refinery in the country,” he said on Tuesday.

“Of course, we want to keep our refinery running and hopefully with the government’s support, we will be able to do this more efficiently,” he added.

Petron’s refinery in Bataan, the country’s only remaining oil refiner, has resumed normal operations after being on “scheduled turnaround” since May.

On Tuesday, shares in the company slipped by 0.98% to close at P3.04 each. — A. Y. Yang

Century Pacific Food eyes 20% higher earnings in 2020

By Denise A. Valdez, Senior Reporter

CENTURY Pacific Food, Inc. (CNPF) is expecting a 20% increase in profits for 2020 as it continues to record double-digit growth in the third quarter on sustained demand for its meat and milk products.

It is also expecting to sustain the double-digit growth until 2021, due to the increased relevance of its products during the coronavirus pandemic.

Following a statement to the stock exchange on Tuesday, the company told BusinessWorld it booked P1 billion net income in the July-to-September period, up 15% from a year ago.

The company attributed it to the 16% revenue growth of its branded segment, which made up 81% of its P11.7-billion revenues during the period.

On a year-to-date basis, the company’s earnings rose 26% to P3.3 billion, as revenues improved 21% to P36.8 billion.

“In spite of easing restrictions, we continued to see healthy growth in the third quarter due largely to the essentials and staples nature of our portfolio,” CNPF Chief Finance Officer Oscar A. Pobre said in the statement.

“As we enter the last few months of 2020, we are pleased to see continued double-digit growth, which should allow us to end the year with a north of 20% increase in earnings,” he added.

CNPF is the manufacturer of food brands such as Century Tuna, Argentina, 555, Angel and Birch Tree. Aside from its renowned brands, the company said it is also seeing increased demand for its coconut-based products.

“We are also now setting our sights on 2021, wherein healthy demand for our core branded products brought about by shifts in consumer behavior, alongside our aggressive pipeline of new product innovations, should allow us to grow again by double digits in spite of our high 2020 base,” Mr. Pobre said.

Included in this pipeline is the introduction of unMeat, a vegan plant-based brand that CNPF said will be the first in the Philippines.

“[O]ur type of products — a focus on the long term, alongside our proven track record in innovation, brand-building and distribution — will remain pillars of what we hope to be sustained growth, regardless of the macroeconomic conditions,” Mr. Pobre said.

CNPF shares closed at P16.84 apiece on Tuesday, higher by P1.32 or 8.51% from its last close.

KKR invests in PHL’s telecom infrastructure

HONG KONG-based investment firm KKR Asia Ltd. announced on Tuesday its investment in infrastructure solutions provider Pinnacle Towers Pte. Ltd. to “strengthen and expand” the telecommunications infrastructure in the Philippines.

Pinnacle, through its principal subsidiary Frontier Tower Associates Philippines, Inc. (FTAP), “aims to strengthen and expand the Philippines’ telecom infrastructure at a time when Filipino mobile users increasingly demand reliable data-rich, high-speed, affordable connectivity, and more generally to address the rapidly growing demands for telecom infrastructure in and around Southeast Asia,” KKR said in a statement.

FTAP is an independent tower company in the Philippines.

FTAP is among the first 23 tower companies that have secured a provisional license to own, construct, manage, and operate common towers hosting cellular sites.

Its provisional certificate, according to the Department of Information and Communications Technology (DICT), is valid until Dec. 31.

The issuance of a provisional certificate should provide tower companies with enough time to complete all the requirements for full registration and permitting “within the time period,” the department said in a statement in September.

Patrick Tangney, chairman and chief executive officer of Pinnacle, said: “KKR’s investment comes at a pivotal time: the Philippines – and Asia more generally – is one of the world’s fastest-growing and most dynamic mobile markets. Improving telecom infrastructure has become a key priority, especially in our current environment.”

David Luboff, partner and head of Asia Pacific Infrastructure at KKR, said: “The telecommunications sector in the Philippines has grown rapidly in the past few years amid the increasing demand for connectivity. This has led to a resource imbalance and the need to expand existing infrastructure to allow operators to provide better service and coverage to their customers. Our investment in Pinnacle reiterates our commitment to addressing this need and supporting the Philippines’ transition to a connected, digital nation.”

The DICT is encouraging tower-sharing to improve cell site density, which is said to be one of the lowest in the region at 4,000 subscribers per tower. — Arjay L. Balinbin

SSI hopes to boost sales with new multi-brand platform

SSI GROUP, Inc. is introducing a multi-brand e-commerce platform to pump up sales as traffic in brick-and-mortar stores remains dampened by the ongoing coronavirus pandemic.

In a virtual press briefing on Tuesday, the specialty retailer said it is launching Trunc.ph on Nov. 6, which will showcase some of the biggest brands under the SSI Group in one platform.

This is seen to drive up the company’s e-commerce sales further, which has already grown more than 400% for the year-to-date period.

“We’re giving our consumers options in the way they shop in our stores… There’s no hiding the fact that the e-commerce industry as a whole has seen an exponential growth in sales since the lockdown,” SSI Group President Anthony T. Huang said.

“Our growth for the year from January until September was over 400% in terms of top line sales related to e-commerce. Looking at the future, our target today is over the next three years to grow our e-commerce sales to around 15-20% of our total sales,” he added.

The SSI Group posted a net loss of P476.29 million in the first six months of the year, reversing its P345.94-million profit in the same period a year ago, as its revenues were halved to P5.04 billion.

While the company has been recording a steady sales growth on a weekly basis, Mr. Huang said the SSI Group wants to continue developing its online presence to adapt to new consumer behaviors.

“The way we see retail in the future is that e-commerce and physical retail are one and the same. It’s part of the chain, part of the cycle, part of the inventory,” he said.

The SSI Group’s e-commerce footprint is currently limited to 10 brands that have their individual online sites and brands that are distributed in third party marketplaces such as Rustans.com, Zalora and Lazada. Trunc.ph is meant to complement these.

The multi-brand platform would feature four concepts: Trunc, which will gather the SSI Group’s most well-known brands; Trunc Show, for premium brands; Powder Room by Trunc, for beauty and skincare brands; and Trunc at Home, for home, living and food brands.

“The group’s ability to innovate and its ability to adapt, on top of the robust operating and financial foundation that it has built over the last few years, will drive our accelerated e-commerce strategy, as we seek to increase the number of channels through which our customers can interact with us,” Mr. Huang said.

“The group believes that our compelling brand portfolio allows us to create a unique set of e-commerce properties that can be further differentiated from other e-commerce offerings through integration with our brick and mortar store network,” he added.

Among the brands under the SSI Group are Gucci, Prada, Kate Spade, Zara, Marks & Spencer, Gap, Lacoste, Banana Republic, Muji, Lush, TWG, SaladStop, and Shake Shack.

In September, the company said it is allocating P400 million for capital expenditures this year, down from the original P1.2 billion budget to reduce expenses amid the coronavirus pandemic.

Shares in SSI at the stock exchange closed at P1.46 each on Tuesday, up 15 centavos or 11.45% from the last session. — Denise A. Valdez

Converge, partner target unserved communities

CONVERGE ICT Solutions has signed a partnership deal with the American global network infrastructure provider, CommScope, Inc., to build an internet backbone that will connect unserved and underserved communities in the Philippines.

“Converge ICT will expand network coverage in rural and urban areas. CommScope is working closely with Converge ICT and will support this evolution, contributing to its network design, deployment, and project management expertise,” CommScope said in a statement on Tuesday.

The company also said its plug-and-play fiber products address the shortage of skilled workforce as it reduces installation time by “eliminating fiber splicing requirements to increase the speed of deployment.”

Converge ICT, according to CommScope, will likewise tap into its optical distribution network innovation “to address the constantly changing needs of the fiber-to-the-home network.”

“The unprecedented demand for connectivity has moved to the top of the agenda when it comes to growing the Philippines’ economy,” Dennis Anthony H. Uy, founder and CEO of Converge ICT, said in the statement.

“Converge ICT’s ambition is to provide super-fast reliable connections while overcoming the disparities in fiber rollouts that have excluded the benefits of the internet from some of our nation’s communities,” he added.

The company announced last week its consolidated revenues for the third quarter grew 71% to P4.19 million because of the continued increase in residential average revenue per user.

It noted the steady growth is a result of its increasing fiber-to-the-home subscribers as well as the growing number of customers who subscribe to its premium packages.

Converge ICT said it now has 900,531 residential subscribers, a significant increase from the 454,438 residential subscribers it had in September last year.

Shares in Converge ICT on Tuesday closed 1.62% lower at P14.54 apiece. — Arjay L. Balinbin

Aboitiz, Japanese partner expanding West Cebu Industrial Park

THE Aboitiz Group is increasing its investment in its West Cebu Industrial Park (WCIP) development in Balamban, Cebu as it looks to ride on the growing demand for industrial spaces in the region.

In a statement on Tuesday, Aboitiz said it is looking to add 30 hectares to its WCIP development over the next three years, which would allow more spaces for industrial, commercial, transport and leisure elements.

WCIP is a project by Cebu Industrial Park Developers, Inc. (CIPDI), a joint venture between the Aboitiz Group and the Tsuneishi Group of Japan.

“Our vision is to transform WCIP into a fully integrated economic center that will spur further economic growth in the area, similar to our two developments (in Batangas and Lapu-Lapu City, Cebu),” Rafael Fernandez De Mesa, first vice-president for operations of the Aboitiz Integrated Economic Centers, said in the statement.

“With its strategic location, skilled population, lower cost of doing business, and well-established ecosystem of infrastructure, we believe that WCIP is the ideal location for light, medium, and heavy industries looking to expand or locate in Cebu,” he added.

WCIP currently covers 540 hectares of mixed-use land, of which 283 hectares are registered as a Philippine Economic Zone Authority (PEZA) zone. Some 11 locators are currently based in the development, and CIPDI continues to invite more in past months, particularly global shipbuilding firms.

The company said there are limited PEZA zones available in Cebu’s inventory, that’s why WCIP was able to attract shipbuilding firm Advanced Catamaran Composites to locate in the development. It aims to start operations in WCIP by the first quarter of 2021.

“We are excited to have Advanced Catamaran Composites as our newest locator in WCIP. With our 30-hectare expansion set to break ground next year, we are hoping to attract more locators to Balamban,” said Eduardo Aboitiz, vice-president for business development of the Aboitiz Integrated Economic Centers.

The listed holding firm of the Aboitiz Group, Aboitiz Equity Ventures, Inc., posted a 55% income decline to P4 billion during the first semester. Its shares at the stock exchange closed at P43.80 apiece on Tuesday, down 75 centavos or 1.68% from the last session. — Denise A. Valdez

ABS-CBN’s YouTube channels restored after ‘hacking incident’ 

ABS-CBN News and ANC 24/7 of ABS-CBN Corp. are back on YouTube after a few hours of being terminated due to a “hacking incident” amid a calamity.

“The ABS-CBN News and ANC 24/7 YouTube channels have been restored Tuesday afternoon after issues on access were reported earlier in the day,” ABS-CBN News said in a Twitter post.

An error message appeared on the videos of both YouTube channels on Tuesday morning, which read: “Video unavailable. This video is no longer available because YouTube account associated with this video has been terminated.”

In a statement, ABS-CBN said: “The two news channels were temporarily suspended beginning 6:30 a.m. this morning after a hacking incident.”

“The investigation on the incident continues as we also implement measures to prevent this from happening again,” it added.

The embattled media company said further that it remains committed to provide news and information to Filipinos, “particularly over these trying times as we recover from the effects of Super Typhoon Rolly and prepare for another incoming weather disturbance.” — Arjay L. Balinbin

New website to focus on the culture of Negros

ARTWORK by Lisa De Leon Zayco

WHEN one thinks of the island of Negros, one thinks of its role in the sugar trade and the fortunes that it created. Those fortunes came to polish some of the nation’s most illustrious last names: these include figures in politics, showbiz, business, and the arts.

The Angelica Berrie Foundation is launching the Negros Season of Culture Website, addressing the region’s cultural assets which can be seen in its cuisine, art, textile, architecture, and literature. “Culture is as necessary as food in even the poorest society. In this pandemic moment, the spirit of resilience and creativity is vital to regenerating economic development. We have to feed the soul even in the worst of times,” said Angelica Berrie in an e-mail to BusinessWorld.

The first year of the Negros Season of Culture is dedicated to the late film maker Peque Gallaga. Ms. Berrie said, “Peque was a human incubator for creativity and culture in Negros. Many of our generation’s creative influentials can trace their roots to his efforts (Genesius Guild yielded many actors, production and directors in Philippine cinema). In his own words, “we are just one small ‘ting’ yet we can do so much.’ This is the lesson he imparted which resonates for all of us involved with the Season of Culture. Genius-Imagination-Ambition was Peque’s outsize contribution to our province.”

Many Filipino luminaries come from the island of Negros, including movie queen Susan Roces, and the Lacson, Locsin, and Arroyo families. Ms. Berrie credits this to “the native talent inherent in each Negrense.” She added, “Negros historically had an affluent lifestyle that fostered the luxury of cultivating culture. There was something in the environment and the way families encouraged the arts that brought artists and cultural change agents’ talents to the fore. Just that special magic that can’t be explained!

“First, all Filipinos have an extra gene for creativity. We love to sing, act and eat — all creative pursuits,” she said. “What differentiates Negros is the atmosphere of collaborations from living in communities where people connect to each other easily and can do more together. The Genesius Guild, the Black Artist Movement, the generation of talented chefs who have roots in Negros. We have spawned actors and artists, chefs and writers, painters, dancers, opera singers, printmakers, theater designers, and musicians.”

The launch of the website will be live-streamed via Facebook Live on Nov. 5, starting at 8 p.m It will be hosted by Negrense actor Joel Torre. His daughter, actress Marela Torre, will walk the audience through the website. Other officials of the province have been invited to join the launch event, as well as officials of national government agencies, like the Department of Tourism, the National Commission for Culture and the Arts, and other related bodies.

The website will have the following editorial categories: Heritage, Food, Handcrafts, Art, Cultural Experience, People, and Upcoming Events. Additionally, the website will include links to websites, Facebook pages, Instagram accounts, and other digital assets of partners.

To be shown during the launch will be the Negros Season of Culture flagship video,a  tribute video to Peque Gallaga, and a documentary on the Chapel of the Angry Christ and the artist Alfonso Ossorio, narrated by Liliane Manahan.

One can also expect features on the following Negrense artists: Lisa de Leon-Zayco, a mosaic artist commissioned for the creation of BAO-The Unbowed Carabao at The Negros Museum, and an entrance hall piece at Fundacion Sansó; Angela Silva, printmaker and visual artist using cyanotype photography, who returned to Negros from Berkeley, California after close to four decades away from the Philippines; Tey Sevilleno, popular for her water colors, who left a budding career in Manila to answer her longing to return to her native Negros and pursue art; and Darel Bettita Javier, who spent decades in the US prior to returning to Negros to become a full-time visual artist, specializing in surrealism, conceptual realism, and collaged styles.

Some of the activities for the Negros Museum will also be highlighted in the website, such as features on Negrense History, heritage, culture, and artistic pratices, weekly staged readings of plays written by emerging Negrense playwrights, and Sine Negrense Online (SNO), featuring winning entries and directors of the first three years of Sine Negrense Film Festival prior to COVID-19.

Not everything focuses on what some may consider the “fine arts.” There is, for example, a feature on Mike and Banj Claparols of Creative Definitions who collaborate with four weaving communities in the island of Negros, building sustainable micro-industries that produce fabric materials woven out of indigenous fibers, including abaca, cotton, banana, and sugarcane bagasse. There’s also one of chef Mia Lizares Gonzaga, a graduate of Peter Kump’s New York Cooking School (now the Institute of Culinary Arts in Manhattan), who popularized a unique grazing table in Negros incorporating local delicacies and homegrown ingredients to help local farmers and producers, as well as reduce her carbon footprint.

Also featured on the website is Slow Food Negros, part of a global movement to know where local food and ingredients come from, and how to preserve these from extinction, as well as one on Casa A. Gamboa with Negrense heritage cuisine served in a heritage home once visited by Gen. Douglas MacArthur.

The website will also promote the upcoming event Feed Our Souls, an on-ground bazaar selling artisanal ware, art, and cuisine unique to Negros culture and heritage.

As one can see, the new world still creeps up on the old belle that is Negros, when new blood and talent is infused into its old-world traditions. Ms. Berrie explained how these dialogues between old and new come to be: “The next generation of Negrenses remain connected to their heritage and we intend to highlight this new creative class who are innovating in ways their ancestors would never have imagined. Whether in cooking, sharing heritage homes’ histories and storytelling through theater and movies, we need to support these talents so they remember who we are, value our cultural identity and express this uniqueness in their own way.”

Watch out for the website’s launch on facebook.com/NegrosSeasonOfCulture. — Joseph L. Garcia

2016 was the beginning of the Apocalypse — Jessica Zafra

That was when she quit writing columns to focus on her first novel

EVERY generation has a designated wit. For Filipinos of the 1990s and the 2000s, we’ve unofficially recognized writer Jessica Zafra as that period’s wit.

For 25 years, Ms. Zafra wrote columns for many media outlets, including The Philippine Star, Today, BusinessWorld, and Interaksyon. She also had stints as a host on TV and radio, and  published her essays and columns in the book series Twisted. Ms. Zafra is known for her dry and dark humor, and could bring this flavor to any situation (read her sports feature on society scion and then-rugby player Jaime Urquijo Zobel).

Recently, Ms. Zafra published her first novel, The Age of Umbrage. She appeared on a webinar with boho favorite Baguio bookshop Mt. Cloud on Oct. 22 to discuss the novel. A summary of the novel from the Ateneo de Manila University press reads: “Guadalupe, 15, is confused. She grew up in the house of one of the richest families in the world… in the servants’ quarters with her mother, the family cook. The life of luxury is all she knows, but it isn’t really her life. Unhappy in school, invisible at home, she lives inside her head, in a world made of books and movies. Outside, Manila is in turmoil: protest rallies, a bloodless revolution, coup attempts, and the Web hasn’t even arrived yet.”

Ms. Zafra introduces her main character, Guada, like so: “You have this very sheltered girl, living in this very sheltered, privileged environment, but outside, the world is in turmoil. Her security is completely artificial.”

Many of the young people who had grown up reading Ms. Zafra have been waiting for her to write a novel for a very long time. So has she, apparently. “I’ve been trying to write a novel since I was in high school. When you say you’re going to be a writer, that means a novel, right?”

It took her only three months to write the novel — if you only count the actual writing. “But you know, that’s three months and three decades. That was three decades of attempting to write a novel. I had to learn the whole process. Having written columns for 25 years, whenever I write something, my brain automatically stops at 1,000 words.” She also wrote the novel first in longhand: “I won’t let years of penmanship lessons in St. Theresa’s Quezon City go to waste,” she quipped.

She started and finished the novel back in 2016, which she considers as the year of the “actual beginning of the apocalypse.”

“That’s when the world ended. The morons won. Everything that I believed in was under siege,” she said.

This was when she quit writing her regular column: “I don’t think I can write a column anymore when I don’t understand the reader. The point of writing a column is you have to understand what’s going on, and explaining it to the readers. I couldn’t understand what was going on.”

She used this time to write the novel, saying, “I guess the combination of confusion, fear, and having nothing to hang on to sped up the process.”

The backdrop of the novel, the unstable 1980s and ‘90s in the Philippines, might be reflective of the times we live today. Ms. Zafra gave her reasons for using that period as her setting. “Those were the years when I was at school, and I have very fond memories of the ‘80s and ‘90s. I always say that the ‘90s were the last time I understood what was going on. When the digital age set in, it was chaos; I no longer know what’s going on,” she said. “At the same time, historically, it was the year of the parliament of the streets, the EDSA Revolution, and then the season of coups. I thought it made a very interesting backdrop to the life of a very sheltered girl.”

For the novel, Ms. Zafra takes the voice of a teen: just like many of her readers who related to her columns. “I always thought that I would be writing in the first person. It bothered me because I didn’t really have a story to tell. I’ll write about something I understand, which is being an adolescent, who grows up alone, and alienated and bullied.” She then decided to switch to a third-person omniscient narrative, which she said freed up the process.

“Somebody told me, and I had to agree, that all first novels are thinly-veiled autobiographies,” she said. “The sad part is, I don’t think I’m that far-removed from my narrator. I still am, in many ways, like that.”

The Age of Umbrage is available through Mt. Cloud Bookshop, the Ateneo de Manila University Press, Shopee, and Lazada. — Joseph L. Garcia

Gov’t fully awards offer of T-bills as rates decline across the board

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Tuesday as yields declined across the board due to strong market liquidity and expectations of benign inflation.

The Bureau of the Treasury (BTr) raised P22 billion via the T-bills on Tuesday, more than the P20 billion on the auction block, as the offer was almost five times oversubscribed, with bids amounting to P96.727 billion.

Broken down, the BTr borrowed P5 billion as planned from the 91-day papers as tenders reached P24.987 billion. The three-month debt fetched an average rate of 1.058%, inching down by 2.1 basis points (bps) from the 1.079% logged in the previous auction.

Meanwhile, the Treasury awarded P7 billion in 182-day T-bills, more than the P5-billion program, as tenders amounted to P31.12 billion, prompting the government to accept more bids from the non-competitive sector. The six-month securities were quoted at an average rate of 1.499%, declining by 4.4 bps from 1.543% in the previous offering.

The government also awarded the programmed P10 billion in 364-day debt papers as bids reached P40.62 billion. The one-year T-bills fetched an average rate of 1.759%, lower by 3.2 bps from the 1.791% quoted at last week’s auction.

The BTr likewise opened its tap facility to borrow another P5 billion via the one-year papers as it sought to take advantage of the strong demand and low rates seen yesterday.

At the secondary market on Monday, the 91-day, 182-day and 364-day T-bills were quoted at 1.13%, 1.551% and 1.806%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

National Treasurer Rosalia V. de Leon attributed the lower yields of the T-bills on offer on Tuesday to manageable inflation expectations.

“Inflation outlook remains benign, which is still within [the central bank’s] 2% to 4% projected band. There is also sustained ample liquidity and bias for shorties,” she said in a Viber message to reporters after the auction, referring to short-term debt papers.

Inflation may have picked up slightly in October due to a rise in food prices and transport costs, as well as the impact of base effects, analysts said.

A poll of 15 economists by BusinessWorld last week yielded a median estimate of 2.4%, close to the higher end of the 1.9-2.7% forecast given by the Bangko Sentral ng Pilipinas (BSP) and well within the 2-4% target this year.

If realized, the median estimate will be a tad faster than 2.3% in September and 0.9% in October 2019. The BSP’s latest average inflation forecast for this year is at 2.3%.

The Philippine Statistics Authority will release October inflation data on Thursday.

A trader said in an e-mail that the lower yields reflected the high liquidity among investors. The trader added investors are looking for debt instruments with the best rate of return as they seek investment outlets for their excess cash.

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

The government wants to raise around P3 trillion this year from local and foreign lenders to help fund its budget deficit expected to hit 9.6% of the country’s gross domestic product. — KKTJ

AC Health partners with Varian firm for PHL’s first cancer hospital

AYALA Healthcare Holdings, Inc. (AC Health) is working with a cancer treatment company for its plan to build the country’s first cancer specialty hospital in Taguig City.

In a statement on Tuesday, AC Health said it recently signed a strategic partnership with Cancer Treatment Services International, Inc. (CTSI), an oncology services provider under US-based Varian Medical Systems, Inc.

The partnership is expected to help AC Health in its cancer hospital project, which will build 100 beds in a comprehensive cancer facility to be located in the FTI Complex in Taguig City.

“We are delighted to partner with CTSI to bring much-needed affordable quality cancer care services to more Filipinos… By bringing together our local knowledge and AC Health’s network, with CTSI’s operational and clinical expertise, we have the unique opportunity to redefine cancer care in the Philippines,” AC Health Chairman Fernando Zobel de Ayala said in the statement.

AC Health had previously said it is investing P2 billion to build a cancer hospital that would have diagnostic equipment, chemotherapy facilities, linear accelerators for advanced radiation therapy and operating rooms for specialist surgeons.

This cancer hospital is envisioned to be an integral pillar of our integrated healthcare ecosystem. With this hospital as our future referral hub, our network of Healthway specialty and family clinics can provide cancer screening programs, while our pharma companies, IE Medica and MedEthix, can source more affordable cancer medicines for our patients,” AC Health President and CEO Paolo Maximo F. Borromeo said.

AC Health is the healthcare unit of Ayala Corp., which also has businesses in real estate, banking, telecommunications and utility, among others.

The conglomerate reported earnings of P7.9 billion in the first half of 2020, down 79% from a year ago, due to loan loss provisions, suspended mall operations, and one-time gains in 2019. Its shares fell P13 or 1.70% to P750 each on Tuesday. — Denise A. Valdez

BDO AUMs hit P1 trillion at end-Sept.

BDO UNIBANK, Inc. said its trust arm booked growth in assets under management as more people turned to unit investment trust funds. — BW FILE PHOTO

BDO UNIBANK, Inc. (BDO) saw its assets under management (AUM) grow to P1 trillion as of September on the back of strong demand for its unit investment trust fund (UITF) products amid the coronavirus pandemic.

BDO’s Trust group reported that its UITF business expanded by 35% at end-September, the bank said in a disclosure to the local bourse on Tuesday.

Rafael G. Ayuste, Jr., BDO senior vice-president and trust officer, said clients bought the product “due to its ready availability for both subscriptions and redemptions as well as the ease of access through the branches and online.”

“We saw the UITF volumes increase substantially despite the pandemic,” he was quoted as saying. “The clients see and appreciate the opportunities that the current market presents which will potentially result to significant growth in their investment returns as the market recovers.”

UITFs are pooled funds from depositors which are managed by a trust company or a bank’s trust department that decide on where to invest the said funds in order to generate income.

UITF gains mirror current market prices, which determine the rate of return for clients. However, investment platforms vary and are matched to a player’s appetite, which is determined through a risk tolerance assessment conducted by these agents.

These can be invested in instruments like money market securities, bonds and equities, which offer higher return than traditional bank deposit products.

BDO’s Trust group offers peso- and dollar-denominated UITFs to cater to investors with different risk appetites and objectives.

The bank’s UITFs require a minimum of P10,000 for peso-denominated money market and bond and equity index funds and $500 for dollar-denominated money market, medium-term bonds, and global feeder funds.

It said it is making “aggressive efforts” to increase its penetration to maintain or increase its market share, which currently stands at 25%.

Mr. Ayuste said the ongoing pandemic has encouraged many clients to grow their wealth through UITFs and money market funds, especially with uncertainties continuing to affect financial markets.

“This way they are able to generate positive albeit lower returns particularly during the height of the pandemic when there was so much uncertainty. We have likewise seen some long-term clients factoring in recovery and are taking the opportunity to buy more equities at current market prices which really presents great upside potential,” he said.

“We continue to enhance our product and service delivery to ensure ease of access and simplification of client experience,” Mr. Ayuste added.

BDO booked a net income of P16.6 billion in the first nine months, down 48% from P32.1 billion in the comparable year-ago period, as it set aside more loan loss provisions amid the pandemic.

The Sy-led bank’s shares closed at P90 apiece on Tuesday, up by P1.10 or P1.24% from its previous finish.

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