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Stronger PHL-US ties seen under Biden presidency

By Charmaine A. Tadalan, Reporter
and Denise A. Valdez, Senior Reporter

THE PHILIPPINES will likely see stronger relations with the United States after Joseph R. Biden, Jr. was elected US president on Saturday.

In his first speech as president-elect, Mr. Biden vowed to act swiftly against the coronavirus disease 2019 (COVID-19) pandemic and fix the ailing economy. (See ralated stories: Palace says Duterte to work with Biden based on respect, US president-elect Biden calls for healing, unity)

Under the Biden administration, economists and analysts see the United States rejoining the Trans-Pacific Partnership (TPP) trade deal, combating climate change and pushing economic initiatives in the Asia-Pacific region.

John D. Forbes, American Chamber of Commerce of the Philippines (AmCham) senior adviser, said the leadership of Mr. Biden would have a gradual positive impact on the Philippines.

“The US taking climate change and COVID-19 seriously will surely benefit the Philippines. US grant assistance for the Philippines should be steady, as will support for Philippine rights in the West Philippine Sea,” Mr. Forbes told BusinessWorld.

Mr. Biden has said that on his first day in office, the US would quickly rejoin the Paris climate accord.

“AmCham will continue to advocate for a bilateral or plurilateral free trade agreement and encourage the Philippines to join the CPTPP (Comprehensive and Progressive Agreement for TPP),” Mr. Forbes said.

But US investments in the country would depend on pending reforms that seek to open up the economy, he added.

The Obama administration had conducted negotiations for the TPP, which was touted to become the third-largest free trade area in the world by GDP. Under the Trump administration, the US pulled out of the trade deal in 2017. Only 11 countries signed the CPTPP in March 2018. The Philippines did not join the TPP as well.

Foreign policy expert Richard J. Heydarian said the Biden administration’s inclination to rejoin the TPP would likely benefit the Philippines even as he expects it to be “cautious and pragmatic.”

“Most likely Biden would push for the restoration of the Trans-Pacific Partnership agreement under US leadership. We already have a version of that under Japanese leadership, but a more expanded version of that, that could include Indonesia, Philippines or even Taiwan and South Korea, could be very much in the cards,” Mr. Heydarian said over the phone on Sunday.

Economist George Manzano of the University of Asia and the Pacific said Mr. Biden’s multilateralist foreign policy approach could lead to increased US participation in global institutions such as the World Trade Organization.

“So, in terms of dealing with the US economy on trade policy matters, we can bank on the WTO rather than just dealing with the US economy,” he said over telephone on Sunday.

Under Biden, the US is expected to take a less aggressive approach to China, which would open opportunities for the Philippines.

“The Biden administration will be less aggressive or less hawkish on China. In a sense, if there’s more trade between the US and China, the Philippines will also prosper… China will be importing more or building more subcontracting possibilities with the Philippines,” Mr. Manzano said.

Mr. Heydarian also expects the US to introduce infrastructure investments to counter China’s influence. The Philippines may benefit from increased trade and investment flows, but this will depend on President Rodrigo R. Duterte addressing possible US concerns.

“There will be an effort to restore and revitalize the alliance in the final year of President Duterte to set the tone for the next Philippine president come 2022,” he said.

‘BIDEN BOOST’
Meanwhile, the local stock market is hoping to get a boost from the positive investor sentiment surrounding Mr. Biden’s victory.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said Mr. Biden’s global-centric approach would be better for the world economy and the Philippines, unlike Mr. Trump’s America-first policy.

Trade tensions with China will also likely ease under the Biden presidency.

“(The Philippines) already has strong investment and trade relationships with China. If (Mr.) Biden takes a soft stance on this one, then it’s going to help the Chinese economy, which in turn could be positive for the local economy,” Mr. Tantiangco added.

“(Mr.) Biden’s apparent softer stance on China will alleviate some pressures that have been hounding emerging markets since the trade war started some years ago,” Manuel Antonio G. Lisbona, president of PNB Securities, Inc., said in a mobile phone message.

Democrats are also historically supportive of free trade, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said.

“As seen in the past Democrat administrations, they are not disruptive on trade relationships, thus would not create uncertainty in terms of global growth including our local economy,” he said in a text message.

The Management Association of the Philippines (MAP) noted that Mr. Biden could help improve global relations during the pandemic.

“We nurture the hope that he will lead America with steady hands in this difficult time given the enormous challenges, like reviving the virus economy, healing the divide in the nation and across nations,…and strengthening global cooperation, peace and stability,” MAP President Francisco E. Lim said in a statement.

However, there is a possibility that the Biden administration may raise corporate and income taxes.

“If (Mr.) Biden eliminates current tax cuts, we may see a plateau in remittances from the US, which is the biggest source for the Philippines,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a text message. — with inputs from Jenina P. Ibañez

PDEx anticipates record bond listings next year

By Denise A. Valdez, Senior Reporter

BOND LISTINGS on the Philippine Dealing & Exchange Corp. (PDEx) are projected to set a new record in 2021 as the debt market operator targets to launch a digital portal before the year ends.

PDEx is also expecting to maintain last year’s record of P375.6-billion bond listings by the end of 2020, on the back of robust issuances amid the coronavirus pandemic.

The local debt market had its 30th listing for the year through Del Monte Philippines, Inc. on Oct. 30, bringing the total amount of new listings to P335.6 billion so far in 2020.

“We anticipate that by yearend, the new bond listings will be close to the same level as last year,” PDEx President and Chief Executive Officer Antonino A. Nakpil said in an e-mail.

He said the market’s performance exceeded PDEx’s projections for the year, considering how the coronavirus pandemic slowed economic activity.

“I would add that much credit for this resilience is due to the regulators, the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission, the former for its preemptive tactics to provide liquidity to the market, and to both for their equally accommodative stances toward electronic submissions and other processes, which collectively reduced the risk of the financial and capital markets adding more problems to the national crisis,” Mr. Nakpil said.

The pandemic has pushed PDEx to accelerate its launch of a digital portal for issues before the year ends, with full operations expected in 2021.

“We are ambitiously targeting to exceed the 2019 record for new listings next year,” Mr. Nakpil said. “We are basing this on a number of returning bond issuers that have previously issued bonds within the two- to three-year tenors and would be likely to come back to market for fresh funding.”

“That target also factors in new corporate issuers coming to market, especially when the PDS Issue Portal would be in full operation within 2021,” he added.

The PDS Issue Portal is a digital platform that will allow the electronic submission of requirements for issuers, and on-boarding of client investors for securities salespersons. It is seen to facilitate more bond listings by simplifying the process for companies and investors.

“It is envisioned that the streamlined activities, shorter times and simpler processes for issuers and investors, would translate to extending the benefits of fixed-income securities to many more investors and generate capital funding for more corporate issuers,” Mr. Nakpil said.

In September, PDEx reported that corporate bonds stood at P1.48 trillion as of August, more than doubling its level four years ago. New listings continue to expand every year, reaching P375.6 billion in 2019, P256.4 billion in 2018, P207.4 billion in 2017 and P136.5 billion in 2016.

SEC flags investment scheme of Coinmax.ph

THE Securities and Exchange Commission (SEC) has warned the public against investing in a group named Coinmax.ph, which adds to the agency’s growing list of entities operating investment schemes without regulatory clearance.

In an advisory on its website, the corporate regulator said Coinmax.ph is not registered with the SEC and is not authorized to solicit investments from the public as it has no license to do so.

Showing screenshots of the company’s social media posts, the SEC said it found that there are individuals or groups claiming to be from Coinmax.ph and trying to entice the public to participate in its investment schemes.

“The public is advised not to invest or stop investing in any investment scheme being offered by any individual or group of persons allegedly for or on behalf of Coinmax.ph and to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of it,” it said.

Based on its investigation, the SEC found that the group is offering passive earnings through three types of investment packages. A basic account gives a 90% return in 15-25 days, a gold account a 150% return in 40 days, and a premium account a 150% return in 70 days.

The SEC said this is equivalent to selling securities to the public, which is a regulated activity under the Securities Regulation Code. To authorize it, a company must register the securities with the SEC and obtain a license to sell them.

The activities of Coinmax.ph therefore violates the Securities Regulation Code. The people behind the company — salesmen, brokers, dealers or agents — may be penalized with a maximum P5-million fine, or 21 years of imprisonment, or both. They may also incur criminal liability.

Coinmax.ph, through its head as identified in the SEC advisory, was contacted by BusinessWorld for comment on this story, but was not able to reply as of deadline time.

This week, the SEC will be holding an “Investor Protection Week”, during which it will launch an online learning resource center to combat unauthorized investment schemes with lessons on investing in securities. It will also launch a campaign and hold a webinar and a corporate governance forum.

“Our fight against investment scams is anchored on the public’s awareness and empowerment to spot, avoid and expose investment scams,” SEC Chairperson Emilio B. Aquino said in a statement over the weekend.

“While we remain relentless in unmasking and busting investment scams, we also encourage the public to always check with SEC before entertaining any investment opportunity, especially when they are too good to be true,” he added.

The SEC regularly issues advisories on its website against companies that offer unauthorized investment schemes to the public. It has likewise issued several shutdown orders to some groups since the start of the year: Forsage and Forsage Philippines; Fast Track Worldwide, Inc.; JOCALS688 Beauty and Wellness Products Trading, Inc.; Building Our Success Stories Network, Inc.; CROWD1 Asia Pacific, Inc.; Lion City Finance Group, Inc.; and Payasian Pte. Ltd. Corp. — Denise A. Valdez

Local firm ALT-Global targets to build up to 400 shared cell towers

ALT-GLOBAL Solutions, Inc. is looking to build 300 to 400 towers for the country’s telecommunications companies starting next year, as it aims to become a major player in the tower-building industry.

Sherwin G. Hing, co-chairman of the independent tower company, told BusinessWorld in a recent interview that the company is currently building 50 towers hosting cellular sites in the Samar-Leyte area.

“It’s our aim to be one of the major players… We have in fact secured some fundings for this,” he said.

ALT-Global has expressed its intention to DITO Telecommunity Corp. and Smart Communications, Inc., the wireless arm of PLDT, Inc., that it is ready to build 300 to 400 towers nationwide, Mr. Hing said.

Both DITO and Smart are also ALT-Global’s partners for the first 50 towers it is building this year, he added.

“Right now, we have built around 30 towers already,” he also noted.

The company wants to take advantage of Republic Act No. 11494 or the Bayanihan to Recover As One Act (Bayanihan II), an economic stimulus program that also grants the government the power to simplify the permit process for building cell towers.

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

Last year, the company signed a partnership agreement with Taiwanese telecommunications manufacturer Remotek Corp. to provide telco firms with in-building solutions or IBS.

“It’s exciting. We believe that the telco space will have its golden years in the next five years,” Mr. Hing said, noting that Smart, DITO, and Globe Telecom, Inc. are expected to invest more in their commercial 5G networks.

He said the company is spending about P400 million for the 50 towers alone.

“Next year, for the 300 to 400 towers, we are looking at a couple of billions already,” Mr. Hing added.

The Department of Information and Communications Technology (DICT) issued in June a department circular that sets the policy guidelines on the co-location and sharing of telco towers for cell sites, which would provide “quality, efficient, fast, affordable, and secure ICT (information communications technology) services.”

Under the guidelines, mobile network operators or telcos may build new telecommunications towers, but they should “provide ample access slots” for other players and the DICT to “co-locate, mount or install their respective antennas, transmitters, receivers, radio frequency modules, radio-communications systems, and other similar active ICT equipment.”

The DICT had pushed the concept of tower-sharing to improve tower density, which is said to be one of the lowest in the region at 4,000 subscribers per tower. Allowing common towers means more than one telco can use a single tower, thereby increasing the number of subscribers being served by each tower. — Arjay L. Balinbin

T-bill rates to move sideways on strong liquidity

TREASURY BILLS (T-bills) on offer this week will likely see their rates move sideways as investors remain awash with cash and amid improved economic prospects here and abroad.

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

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the rates may end close to the levels seen in the previous auction amid ample liquidity among investors.

“T-bill rates will likely be trapped in a tight range with the bevy of liquidity in the system and dearth of investment outlets for the Philippine financial markets,” Mr. Mapa said in an e-mail.

Meanwhile, a trader said in an e-mail that yields on the T-bills may inch up to track US Treasury rates amid improving economic prospects following the projected victory of Democratic candidate  Joseph R. Biden, Jr. in the US presidential election.

The BTr last week raised P22 billion via the T-bills, 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 the previous week’s auction.

The Treasury also 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.

At the secondary market on Friday, the 91-day, 182-day and 364-day T-bills were quoted at 1.106%, 1.503% and 1.777%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

Meanwhile, investors and financial executives took a big sigh of relief on Saturday after major networks declared Mr. Biden winner of the US presidential election, offering some certainty after days of conflicting reports about who might run the White House next term, Reuters reported.

Although current President Donald Trump said he would fight the results in court, Wall Streeters who offered comments felt there was little doubt Biden would ultimately succeed. Election predictors including the Associated Press, NBC, Fox News and Edison Research, upon which Reuters relies, called the presidency for Biden.

Major US stock indexes registered their biggest weekly gains since April last week, as investors bet Mr. Biden would win and Republicans would hold onto the Senate. That scenario would create a steadier hand in the Oval Office and a Congress that would check left-leaning impulses on taxes or regulations that pinch companies, investors said.

However, there are lingering risks to asset prices in the days and weeks ahead.

Republicans have already filed several lawsuits over ballot counting and Mr. Trump said his campaign will file more. The litigation could drag out election proceedings.

Investor focus also now turns to the Senate, which remains undecided ahead of two runoff elections in Georgia on Jan. 5.

Beyond those battles, investors have been worried about the people Mr. Biden might appoint to his Cabinet. Some of those officials would be negotiating with Congress about a relief package and have extensive powers to craft Wall Street rules.

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 will also offer another tranche of Premyo bonds on Wednesday 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

Digital shift seen key to outsourcing industry’s rebound

DIGITAL and workforce transformation in outsourcing, instead of cost cutting, will be the key to industry recovery, Accenture Senior Managing Director Ambe C. Tierro said.

“The COVID crisis is very unique in many ways, but one thing that is relevant to our industry is despite the severe impacts to industries and businesses, majority will agree that the key to recovery is not just further cost cutting,” she said in the online International Innovation Summit on Thursday.

She said that the outsourcing workforce must be linked to in-demand skills, matching the training of employees with the requirements of the industry.

The outsourcing workforce must not just be productive, but “thrive” while working in digital, she added, which means making investments in cloud technologies. Investments in virtual tools allows the workforce to shift to a digital work-from-home environment more easily, she said.

“They’re used to using collaboration tools and working with people virtually,” she said.

Ms. Tierro noted that the pandemic has upended the industry’s business continuity plans.

“Pre-COVID, we had plans that were either facility-level or contract-level BCPs (business continuity plans), but now we almost need individual-level plans. What happens if a particular person has an extended (power) outage in their house?” she said.

Hans B. Sicat, country manager of ING Bank N.V. Manila, said that digital transformation is a multi-year process.

“You have to look at the appropriate talent and human resources to help you along in this journey,” he said, noting that there must be ample budget for transformation.

Mr. Sicat said top management itself must buy-in to digital transformation, which means that the shift to digital is not just the work of tech-related employees.

“What you really have is the full enterprise being involved. When I say that, I mean there are multiple teams from various disciplines setting up whether it’s a digital bank here in the Philippines—but it is also all those guys who are responsible, let’s say, for regulatory concerns, for risk management, and for business and strategy,” he said.

The outsourcing industry group is  rolling out its upskilling pilot program for workers, identifying data analytics, medical coding, software development, six sigma, computer graphics, and digital animation as priority skills that will be taught through online platforms.

The sector scaled down its pilot program after it shifted to online training sessions due to the pandemic. The Information Technology and Business Process Association of the Philippines maintains that it hopes to train a million employees over five years once funding is available. — Jenina P. Ibañez

Christmas at Ayala Malls will be a mix of online shopping and live events

EVEN the holiday crush and rush of the -ber months carry a tinge of nostalgia now, for the restrictions brought about by the pandemic can discourage one from going out to the mall and shopping for Christmas presents. So the Ayala Malls bring the best of the holidays — the gifts — minus everything else, unveiling many initiatives during a webinar on Nov. 4.

First there is Zing, a shopping, loyalty and rewards app that one can use at home — but also at the mall since it helps you navigate through the spaces of the various Ayala Malls dotting the country (such as which stores are open), explained Jenylle Tupaz, President of Ayala Malls, via Zoom. ANA (Ayala Malls Neighborhood Assistant) is another one of these online initiatives, an app for a personal shopper, that also helps the mall group’s displaced cinema employees. Rounding this out is Pasyal TV Live Shopping, where viewers can purchase items in real time by visiting shop.pasyal.com.ph.

Not everything is online though. The malls will also host a number of live events over the holidays too.

First there is the trunk show of the Philippine Fashion Coalition. Designers from Manila, Cebu, Cagayan de Oro to Davao will take part in the project, offering exclusive fashion, accessory, and home pieces, in a live fashion event. The participation designers are Vittorio Barba, Noel Crisostomo, Rhett Eala, Tweetie de Leon-Gonzalez, Amina Aranaz-Alunan, Randy Ortiz, Carissa Cruz-Evangelista, Gina Nebrida-Ty, Jor El Espina, Dexter Alazas, Jun Escario, Philip Rodriguez, Tatah Costales, Aztec Barba, Benjie Panizales, Emi Englis, Dodjie Batu, Windel Mira, Egay Ayag, and Edgar Buyan.

The trunk show will be held in the following Ayala Malls: Market Market on Dec. 3-6, Glorietta on Dec. 17-20, Alabang Town Center on Jan. 7-10, Ayala Center Cebu, Manila Bay, and Centrio on Jan. 4-17, and Abreeza and UP Town Center on Jan. 28-31.

Connected with these is the seventh annual Designer Holiday Bazaar, curated by Zobel de Ayala family members, sisters Bea Zobel Jr. and Sofia Elizalde. Launching on Nov. 18, 20% of the sales will be donated to partner charities including Steps Scholarship Foundation and Ayala Foundation for APEC Scholarships.

This year’s participating designers include AC+632, Alegre By Techie Hagedorn, Amarie, Bum Bums, Beavaldes, Chocoloco, Chrysara Nest, El Chupapi Rolled Munchies, Feanne, Gifts and Graces Fair Trade Foundation, Gustoko By Paula Figueras, Iraya Mangyan Art, J Makitalo, Jewelmer, Kanya, Kassa, Mabolo, Maison Lourdes, Majordomo Gourmet Food, Manggad, Matthew and Melka, Omo Furniture, Piopio, Riqueza Jewellery, Rurungan Collective, Soumak, T’nalak Home, Tan-Gan X Ha.Mu, Tanglaw Collection, The Bahay Kubo Workshop, What’s Up, Brew?, Yvette’s Collection, and One Of T.

“I was with my designer friends, planning our Artists’ Village in Lio, Palawan,” said Ms. Zobel during the webinar, about how the idea for the bazaar started seven years ago. “I heard that the Ayala Foundation was sourcing funds for their schools. I said, ‘what a wonderful way of raising funds with my designer friends.’ Why not support local designers by putting on a bazaar? We’d be supporting the local designers and the local brands.”

“What Bea started many years ago, it’s now become a favorite I think, every Christmas. People look forward to seeing what’s new.” said Ms. Elizalde.

She is proud of the students from her dance school, which will benefit from the Bazaar. The students of the Steps Scholarship Foundation come from public schools and the Ayala Foundation Centex Schools. She said that one of her students is now an apprentice at the American Ballet Company in New York, while another just entered the Jackie Onassis School of Dance. “These are just a few examples of the magic these scholarships give to these kids.”

The bazaar is a family effort: Paloma Urquijo Zobel, Bea’s daughter, collaborated with Moss Studio and Pino Studio to design the bazaar’s exhibit. One can shop live at the exhibit at Greenbelt with minimum fuss through a card system, while one can also shop through the website  (www.designersholidaybazaar.com). The new efforts for the bazaar will also feature personal shopper assistance, same-day delivery within Metro Manila, and even international deliveries.

All of these activities and initiatives are geared towards the Ayala Malls’ vision for the future.

“With new behaviors developed during quarantine, we weighed the challenges brought by fear and restrictions,” said Ms. Tupaz. “Our actions and decisions are guided by Ayala Land, Inc.’s action plan.” These include a focus on financial stability, caring for their people, serving their customers, helping others, and thinking ahead towards recovery. These translate to their key priorities, which include health and safety, merchant and customer support, communication, employee productivity and engagement, and adoption and adaptation.

Some of these are expected, such as the thermal scanners, disinfection, and the maintenance of social distancing within the malls. Other measures they have taken include rent reprieves, waived basic rent, and variable rent rates for retail and food outlets. Ayala Malls has also set up a loan support facility for the 70% of its small to medium enterprise merchants. “These priorities are all meant to provide clarity and direction; to develop resilience, and to demonstrate malasakit (care) as we take care of our customers, merchants, and people,” said Ms. Tupaz.

Jaime Augusto Zobel de Ayala, Chairman and CEO of the Ayala Corp., left a Christmas message. “While there is much uncertainty ahead, empathy, joy, and hope can guide us to continue spreading gratitude, happiness and togetherness this Christmas season.” — JLG

Remittance outlook remains bleak amid pandemic

REMITTANCE FIRMS expect inflows to remain slow as the coronavirus pandemic affects the incomes of Filipino workers abroad. — BW FILE PHOTO

REMITTANCE PLAYERS in the country remain pessimistic on the growth of transactions due to the continued impact of the coronavirus disease 2019 (COVID-19) on the incomes of overseas Filipino workers (OFWs), a study by the Bangko Sentral ng Pilipinas (BSP) showed.

“The industry’s prospect for international remittance is largely not favorable, with 54% expecting a decline in both volume and value of transactions, while 43% of them are forecasting a decline of more than 20% percent,” the BSP’s Report on the Financial System for the First Semester 2020 said.

The central bank conducted an impact survey in May with respondents from selected firms involved in the business, including remittance and transfer companies, banks, and electronic money issuers, among others.

“Preliminary results showed that the COVID-19 pandemic has greatly affected the remittance channels, with approximately 75% of the respondents reporting decline in the volume and value of both international and domestic remittances based on their transactions for the month of April 2020,” the BSP said.

Money sent home by OFWs declined 2.6% year on year to $19.285 billion in the first eight months of the year. The BSP expects inflows to drop by 2% this year before bouncing back and growing by 4% next year.

More than 237,000 OFWs have already been repatriated as of Nov. 3, latest data from the Department of Foreign Affairs showed.

Firms attributed the drop in remittances mainly to the pandemic, which took its toll on the incomes of overseas workers.

“As a net receiver of international remittances, the effects of the pandemic are seen as profound on the Philippine remittance market as the crisis affected the OFWs capacity to send remittances back home,” the BSP said.

During the lockdown, 93% of remittance channels were able to continue their operations on the back of the authority provided by the government for remittance services to continue their services, business continuity plans deployed in line with BSP regulation, and relief measures from the side of the central bank.

Meanwhile, in terms of accessibility, pawnshops and money service providers had a wider reach as they made up 85% of the total physical remittance touch points as of June. On the other hand, big banks had a 15% share.

“Remittance flows can take place through various channels. These include formal or regulated channels such as banks and money transfer operators or money service businesses, which include pawnshops with corollary remittance activity, and informal channels such as sending via bus/courier companies, friends or relatives,” the BSP said.

Among these modes of transfer, the BSP said pawnshops that also have remittance services and money service businesses remain as major access points for remittance transactions on the back of their wider reach across the Philippines.

“As of end-May 2020, there were 505 BSP-supervised financial institutions with a total of 45,182 remittance access points,” the BSP said. — L.W.T. Noble

Tax appeals court grants geothermal firm’s refund

THE Court of Tax Appeals partially granted the tax refund claim of the Philippine Geothermal Production Co., Inc. (PGPI) representing its excess and unutilized value-added tax (VAT) attributable to zero-rated sales for 2015.

In a 24-page decision dated Oct. 28, the court’s second division ordered the Bureau of Internal Revenue to refund or issue a tax credit certificate to the company worth P10 million out of its initial P24.5 million claim.

The court said that only P22.7 million out of the P24.5 million claimed represents valid input VAT. Of the said amount, only P13.6 million can be traced to zero-rated sales.

“Due to the BIR’s previous partial approval of petitioner’s claim up to the amount of P3,589,914.20, the excess input VAT attributable to valid zero-rated sales of P13,619,625.28 should be further reduced,” the courts said.

“Hence, petitioner is entitled to a lesser input VAT claim of P10,029,711.08 after taking into consideration the BIR’s partial grant of its claim,” it added.

PGPCI, a renewable energy developer, is entitled to zero-rated value added tax on purchases of local supply of goods, properties, and services needed for the development of plant facilities, according to Republic Act No. 9513 or the Renewable Energy Act of 2008.

The Tax Code also states that sale of power or fuel generated through renewable sources of energy are subject to zero-rated VAT.

The court said that of the P3.9-billion reported sales for 2015, the court-commissioned accountant verified that the zero-rated sales were attributed to steam sales. Only P3.4 billion were supported with receipts and qualified as valid.

Of the declared input VAT of P24.5 million, around P22.7 were valid, it said.

“Although petitioner has a total valid input VAT of P22,769,549.78, the same, however, is not entirely attributable to zero-rated sales since petitioner also had VATable sales,” the court said.

The court also said the input VAT claimed was not applied to any output VAT liability and the claim for refund was filed on time.

The company first filed its claim in March 2017 with the BIR and was granted P3.5 million. The claim was then elevated to the court. — Vann Marlo Villegas

Other Ayala Malls treats

The Happiness Hymn

In collaboration with National Artist Ryan Cayabyab, Ayala Malls sets the mood of festive joy through an original composition called “It’s Gonna Be a Happy Day.” This bouncy, feel-good track is performed by Reese Lansangan. The launch of its music video on Nov. 4 signals the start of more festivities ahead. A special holiday-themed music video of “It’s Gonna Be a Happy Day” will also be released by December in collaboration with Steps Dance Studio.

Treats and Talks

Ayala Malls is partnering with the Department of Tourism to roll out a mobile food truck concept with Kulinarya Pampanga Chefs. Classic Filipino Christmas Noche Buena favorites will be driven down from Pampanga to Nuvali as part of the Kain Na! Food and Travel Festival from Dec. 18 to 20. Chefs will bring the Food Haven of Pampanga closer to the people through creative local dishes, food demos, and sampling. This initiative will also help the livelihood of local food and farm tourism stakeholders.

Food Flash Sales

Celebrate intimate gatherings at your favorite restaurants with the Food Holiday Flash Sales. Having started on Sept. 30, the monthly one-day flash sales of food vouchers are offered on Klook for dine-in and takeout. Participating restaurants include Italianni’s, Ramen Nagi, Fat Fook, TGI Friday’s, California Pizza Kitchen, Buffalo Wild Wings, Mama Lou’s, and many more.

Lifestyle Webinars

Ayala Malls is also hosting a series of Lifestyle Webinars that inspire and equip families for gift-finding and party preparations this holiday season. Featuring different merchants and lifestyle topics, the lineup follows: Coffee, Cocktails, and Craft Beer (Nov. 7); Jewelry: Pearls and Diamonds (Nov. 28); All About the Watch (Dec. 5); and Christmas Cooking (Dec. 19).

I-Remit sees OFW remittances growing in Q4 as economic activity resumes

I-REMIT, Inc. sees a double-digit growth in remittances from overseas Filipino workers (OFWs) in the last quarter, saying economic activity is resuming even amid the ongoing coronavirus pandemic.

“We expect a double-digit increase in remittances for the last quarter compared to the third quarter of this year, industry wide. Things are beginning to pick up in most countries now,” I-Remit Senior Assistant Vice President of Global Marketing Maria Cristina S. Castillejo said in an e-mail on Friday.

The fund transfer company said most of the remittances will come from Europe and North America.

Money sent home by OFWs declined 2.6% year on year to $19.285 billion in the first eight months of the year, Bangko Sentral ng Pilipinas (BSP) data showed. The BSP expects inflows to drop by 2% this year before bouncing back and growing by 4% next year.

The top source of remittances during the eight-month period was the United States, from which 40.2% of the inflows came from. It was followed by Singapore, the United Kingdom, Japan, Saudi Arabia, United Arab Emirates, Canada, Hong Kong, Taiwan and Qatar.

Amid the pandemic, Ms. Castillejo added the growth in remittances will be mostly driven by industry’s shift to online platforms to ease fund transfers from around the world.

“The positive impact is the shift to digital, which saw a marked increase in our online remittances. It’s a three-digit percentage increase at least for I-Remit,” she said.

The firm said its adoption of US-based Ripple’s blockchain technology, a digital data storage, has boosted its fund transfer transactions since 2018.

I-Remit serves 23 countries. It plans to boost its operations in Hong Kong, US, New Zealand, Austria, Macau, Italy and Manila using part of the P79.04 million in proceeds from its initial public offering, it said last month. — KKTJ

Maynilad invests P179 million for new sanitation trucks

MAYNILAD Water Services, Inc. has allocated P179 million to buy 19 new vacuum truck units in the west zone water concessionaire’s efforts to strengthen its septage collection.

In a statement, Maynilad said the new vacuum trucks can clean 190 septic tanks daily and will help the delivery of the company’s sanitary services for customers who are not connected to its sewer network.

Maynilad Chief Operating Officer Randolph T. Estrellado said the company’s new acquisitions will help meet its sanitation targets, which have been hindered due to restrictions caused by the coronavirus disease 2019 (COVID-19) pandemic. 

“We are appealing to our customers to have their septic tanks desludged because not doing so will result in serious environmental, health, and safety risks to their family and community,” Mr. Estrellado said.

According to the water provider, it has cleaned some 147,900 septic tanks and has treated around 223 million liters of septage in 2019.

Maynilad said the collected septage is transported to its septage treatment facilities for processing and treatment. After treatment, the by-product is sent to a processing plant where it will be converted to organic fertilizer.

The water provider’s wastewater infrastructure network includes 19 sewage treatment plants, two joint sewage and septage treatment plants, and one septage treatment plant.

Combined, the network has a total treatment capacity of 664,000 cubic meters of wastewater per day.

Maynilad provides water to areas in the west zone of the National Capital Region such as Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, Manila, Makati, and Quezon City; and parts of Cavite province such as Bacoor, Imus, Kawit, Noveleta, and Rosario.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

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