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Shares may move sideways before inflation data

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

PHILIPPINE shares are expected to trade sideways this week on continued market optimism ahead of the release of June inflation data and as investors monitor the country’s coronavirus disease 2019 (COVID-19) situation.

The Philippine Stock Exchange index (PSEi) rose by 38.25 points or 0.54% to close at 7,002.26 on Friday, while the broader all shares index went up by 19.54 points or 0.45% to finish at 4,294.97.

Week on week, the benchmark index gained 51.75 points from its 6,950.51 close on June 25.

“The market continued higher after more positive economic data was released. Investors gained more confidence on clearer signs of the economy’s recovery despite elevated COVID-19 cases and the extension of current restrictions,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Saturday.

“The PSEi ended the week just a few points above the 7,000 psychological level after a couple of weeks of momentum building,” he added.

Preliminary results of the Philippine Statistics Authority’s (PSA) Labor Force Survey showed a lower unemployment rate of 7.7% in May from 8.7% in April.

Meanwhile, IHS Markit reported that manufacturing activity improved in June. The Philippine Manufacturing Purchasing Managers’ Index (PMI) went up to 50.8 in June from 49.9 in May due to less stringent quarantine restrictions.

Analysts said market optimism following these positive economic data may continue this week.

“Adding to this is the rise in consumer sentiment according to the Bangko Sentral ng Pilipinas’ (BSP) [second quarter] 2021 survey. The economic recovery hopes, however, could be tempered by the decline in business confidence also according to the BSP’s survey,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Saturday.

“Investors are also expected to watch out for the upcoming June inflation data to see if the price pressures weighing on the local economy have eased,” Mr. Tantiangco added. “Finally, investors are expected to remain cautious while waiting for the latest financial reports following the end of the second quarter. We may see sideways movement for the local market with an upward bias [this] week.”

The PSA is scheduled to release June inflation data on July 6.

Mr. Tantiangco expects the index to trade between 6,932.13 to 7,300.

“Risk seen for the market [this] week is the Delta variant of COVID-19. Detection of more cases in our country with the said strain may tilt the market’s bias to the downside,” he said.

Meanwhile, AAA Southeast Equities’ Mr. Mangun placed the PSEi’s support at 6,900 and resistance between 7,200 and 7,260.

“Optimism has outpaced cautiousness as vaccination progress outweighs the concerns of elevated COVID-19 cases,” Mr. Mangun said. — Keren Concepcion G. Valmonte

Gov’t eases rules for fully vaccinated people

PHILIPPINE STAR/ MICHAEL VARCAS
FULLY-VACCINATED individuals who are close contacts of coronavirus patients may now undergo a shorter quarantine period of 7 days if they stay asymptomatic. — PHILIPPINE STAR/ MICHAEL VARCAS

QUARANTINE and travel protocols for fully-vaccinated individuals have been eased, based on a new resolution approved by the task force handling the country’s coronavirus pandemic response.

In a resolution approved on July 2, the task force shortened the quarantine period for fully vaccinated individuals who are exposed to probable and confirmed coronavirus cases, Presidential Spokesperson Herminio L. Roque, Jr. said in a statement on Sunday.

“Fully vaccinated individuals who are close contacts of probable and confirmed COVID-19 (coronavirus disease 2019) cases may undergo a shortened seven-day quarantine period only if they remain asymptomatic for the duration of the seven-day period,” he said.

Mr. Roque said intrazonal travel for fully vaccinated individuals is subject to the presentation of a coronavirus vaccination card issued by a legitimate establishment, or a certificate of quarantine completion showing the holder’s vaccination status as may be issued by the Bureau of Quarantine.

Travelers within the country are still required to undergo health and exposure screening upon arrival in the local government of destination, he said.

SENIOR CITIZENS
Mr. Roque said intrazonal movement of fully vaccinated senior citizens within areas under a general community quarantine and a modified lockdown “shall continue to be allowed.”

A fully vaccinated individual is someone who has “more than or equal to two weeks after having received the second dose (of) a two-dose vaccine, or more than or equal to 2 weeks after having received a single-dose vaccine,” the Palace official said.

A fully vaccinated individual must be administered with vaccines that are included in the Emergency Use Authorization List or Compassionate Special Permit issued by the Philippine Food and Drug Administration or Emergency Use Listing of the World Health Organization, he said.

Latest available data from the task force, citing records from the Department of Health (DoH),  show more than 10 million coronavirus vaccine doses have been administered as of June 27.

Of the total, 7.5 million were first shots.

Fully vaccinated individuals consist of more than 1.1 million health workers, 672,602 seniors, 710,846 seriously ill people, and 12,340 essential workers.

The Philippines aims to inoculate at least 500,000 people daily in the capital region Metro Manila, the neighboring provinces of Rizal, Bulacan, Cavite, and Laguna, and the urban areas of Metro Cebu and Metro Davao to achieve herd immunity by Nov. 27.

COVID-19 CASES
The DoH reported 5,966 coronavirus infections on Sunday, bringing the total to 1,436,369.

The death toll rose to 25,149 after 86 more patients died, while recoveries increased by 6,987 to 1,358, 512, it said in a bulletin.

There were 52,708 active cases, 91.1% of which were mild, 3.8% did not show symptoms, 1.4% were critical, 2.1% were severe and 1.54% were moderate.

The agency said 16 duplicates had been removed from the tally, nine of which were tagged as recoveries.

On the other hand, 130 recoveries were reclassified as active cases, while 27 cases tagged as recoveries were reclassified as deaths.

DoH said all laboratories were operational on July 2, while one laboratory failed to submit data.

Meanwhile, a senator is pushing for the inclusion of private groups in the Inter-Agency Task Force for the Management of Emerging Infectious Diseases.

Senator Francis N. Tolentino, in a statement on Sunday, said at least two groups should be represented in the policy-making body.

The Union of Local Authorities in the Philippines and the Philippine Chamber of Commerce and Industry (PCCI) must be included in the task force “to have a much synchronized approach in dealing with various policies” related to the country’s pandemic response and “to pave the way for a swift economic recovery,” he said. —Kyle Aristophere T. Atienza

Pacquiao takes a gamble on political future with graft allegations vs Duterte government

PHILIPPINE STAR/ MICHAEL VARCAS

By Kyle Aristophere T. Atienza, Reporter

SENATOR Emmanuel “Manny” D. Pacquiao would have a fighting chance at next year’s elections if his corruption allegations against the administration of President Rodrigo R. Duterte are proven true, according to analysts.

Mr. Pacquiao, acting president of the ruling party, has recently criticized the President’s stance on the country’s sea dispute with China and last week said state corruption is rampant.

The professional boxer-senator is believed to be eyeing the presidency in the 2022 polls.

“If his allegations are proven true, these will weaken the chances of the admin bets. No one will vote for candidates endorsed by a corrupt administration,” campaign strategist Gerardo Eusebio said in a Viber message. “But it would also have to have meat and substance.”

Over the weekend, before leaving for a boxing match in the United States, Mr. Pacquiao held an online press conference where he presented piles of documents that supposedly contain proof of his allegations.

The documents will be turned over to the Senate Blue Ribbon Committee for a possible investigation, he said.

“Without details backed by documents or at least sworn statements executed by his witnesses, if any, there may not be sufficient basis for the Senate to conduct a hearing although the Blue Ribbon Committee is allowed to conduct investigation in aid of legislation even without referral,” Senator Panfilo M. Lacson said in a statement.

He said it is Mr. Pacquiao’s responsibility “to show some specifics in support of his allegations, which by its nature are serious, not to mention sensitive.”

The police and the Department of Social Welfare and Development, among the two agencies he named to be involved in anomalous contracts, issued separate statements on Sunday denying the accusations and welcomed any investigation.

“If Pacquiao will have the goods, the opposition will gravitate to him and increase his political capital. If these will hold water, expect a drop in the President’s rating, especially the C sector,” Mr. Eusebio said.

“The masses will definitely pay attention once the issues raised affect their basic needs particularly food and income,” said media research expert Jay Bautista.

He cited “historical examples” in allegations against past Presidents Joseph E. Estrada, Gloria M. Arroyo, and the late Benigno S.C. Aquino, “which all resulted in lower trust ratings.”

DIRECT LINK
If Mr. Pacquiao fails to directly link Mr. Duterte to corruption allegations, the President’s popularity might not be severely affected, said Cleve Kevin Robert V. Arguelles, a political science lecturer at De La Salle University.

“If Pacquiao will succeed in exposing corruption scandals and the administration would not be able to properly respond to his allegations, then it would really hurt the chances of the anointed successor of President Duterte,” he said.

Mr. Arguelles, however, noted that the senator does not appear to be ready to fully cut ties with Mr. Duterte.

“But the curious case here is that, if we look at what Sen. Pacquiao is doing and what he has been saying so far, I think he’s still not ready to really burn the bridge with President Duterte,” he said in a Facebook Messenger call.

“He is still saying that this is supportive of the President, that corruption may have something to do with the administration but he is not directly opposing the President.”

“We still see some hesitations on the part of Sen. Pacquiao whether he would blame the President for the corruption allegations,” Mr. Arguelles said, noting that it is “too early” to consider Mr. Pacquiao as the new face of the opposition.

Jean Encinas-Franco, a political science professor from the University of the Philippines, said administration bets would not be affected much for as long as the allegations are not directly attributed to Mr. Duterte.

“Manny (Pacquiao) is still ambivalent towards the President so the presscon yesterday will not affect the admin nor Duterte,” she said in a Viber message.   

Mr. Duterte earlier said he would campaign against Mr. Pacquiao if the senator fails to identify corrupt government officials.

PHL Coast Guard drives away 5 Chinese, 2 Vietnamese ships from Spratlys area

PCG FACEBOOK PAGE

THE PHILIPPINE Coast Guard (PCG) reported on Sunday that it drove off last week seven foreign-flagged fishing vessels from waters around the Marie Louise Bank, a part of the Philippine exclusive economic zone in the South China Sea. 

In a statement with accompanying video footages posted on its social media pages, the PCG said its BRP Cabra vessel “successfully dispersed” five Chinese and two Vietnamese ships on June 30. 

The Marie Louise Bank is located 147 nautical miles off El Nido, Palawan and is part of the Spratly Islands.

The video clips showed Coast Guard officers on board the BRP Cabra sending radio challenge to the foreign vessels. A radio challenge involves an assertion of the Philippine territory and demand for details of the vessel in question. 

The ending video clip also showed a PCG team checking on a Philippine vessel with 34 Filipino fishermen from San Jose, Occidental Mindoro.

“The Filipino fishermen said they were able to conduct normal fishing operations in the past two weeks without any untoward incidents at sea,” the PCG said. — MSJ

Typhoon, low pressure area to bring rains across PHL

TWO WEATHER disturbances — a tropical depression and a low pressure area (LPA) — will bring scattered rains and thunderstorms across most parts of the country until Tuesday, weather agency PAGASA reported Sunday. 

Tropical depression Emong, which was a low pressure area until around 8:00 a.m. Sunday, strengthened as it moved northwest towards the extreme northern part of Luzon.

Typhoon wind signal no. 1 was raised over Batanes and the northeastern part of Cagayan, including Babuyan Islands.

As of 11 a.m. Sunday, Emong was located 700 kilometers (kms) northeast of Guiuan, Eastern Samar in central Philippines.

It was packing maximum sustained winds of 45 kms per hour near the center and gustiness of up to 55 kms per hour.

“Emong is likely to remain as a tropical depression throughout the forecast period,” the Philippine Atmospheric, Geophysical and Astronomical Services (PAGASA) said in its first advisory on the storm.

The other LPA, meanwhile, was located 120 kilometers east of Calapan, Oriental Mindoro as of 4 a.m. Monday and “is less likely to develop into a tropical depression within 24 hours,” according to PAGASA.

However, this LPA coupled with the southwest monsoon will bring light to moderate or at times heavy rains over Bulacan, Pampanga, Nueva Ecija, Zambales, Bataan, Metro Manila, Rizal, northern Quezon including Polillo Islands, Laguna, Cavite, Batangas, Palawan including Calamian Islands, Mindoro Provinces, and Antique.

PAGASA warned that “isolated flash floods and rain-induced landslides are possible during heavy or prolonged rainfall” in these areas.

If it strengthens into a tropical depression, it will be named Fabian.

Military plane crashes in Philippines, at least 40 rescued

A MILITARY plane crashed and broke up in flames in the southern Philippines on Sunday with 92 people aboard, and the army chief said at least 40 people had been rescued.

The C-130 aircraft of the Philippine Air Force had a mishap on landing on the island of Sulu, the air force said in a statement. “Rescue efforts are ongoing,” it said.

Pictures from the scene showed flames and smoke pouring from wreckage of the aircraft among trees.

Defense Minister Delfin N. Lorenzana told Reuters the plane had been carrying 92 people, including three pilots and five other crew members, according to his initial reports.

Armed forces chief Cirilito E. Sobejana told reporters that at least 40 people had been rescued from the crashed plane and were now being treated. — Reuters

Thousands still in evacuation centers as Taal eruption threat remains

THOUSANDS REMAIN in evacuation centers as Taal Volcano continues to show increased activity.

The Philippine Institute of Volcanology and Seismology (Phivolcs) reported 31 “low frequency volcanic earthquakes and low-level background tremor”  during the 24-hour period from Saturday to Sunday morning.

Alert level 3 in a 5-level system remains in effect, which means there is magma extruding from Taal Volcano’s main crater that “could drive explosive eruption,” according to Phivolcs.

The agency also said Taal’s main crater emitted high levels of volcanic sulfur dioxide that rose up to 2,500 meters.

A total of 3,141 people or around 788 families from the “high-risk” towns of Agoncillo, Laurel, San Nicolas, and Lemery in Batangas province were evacuated since Saturday, according to the national disaster management agency.

Police and Philippine Coast Guard teams have been assisting in the evacuation as well as in ensuring the observance of health protocols in the temporary shelters.

The Department of National Defense said on Saturday that the Department of Social Welfare and Development sent 5,000 family food packs to the Batangas Sports Complex Grand Stand, 2,000 to Laurel, and 1,500 to Agoncillo.

“The Batangas provincial government has remained self-sufficient in sending help and does not yet need immediate additional aid from the national government,” Office of Civil Defense Calabarzon Regional Director Maria Theresa R. Escolano is quoted in a statement from the Batangas Information Office. — Bianca Angelica D. Añago 

Supreme Court affirms COA disallowance of P1.2-M cash gifts to PhilHealth Iloilo City employees

BW FILE PHOTO

THE SUPREME Court (SC) upheld the 2010 ruling of the Commission on Audit (COA) that disallowed the awarding of P1.19 million in cash gifts by the Philippine Health Insurance Corp. (PhilHealth) in Iloilo City to its employees on its 15th anniversary.

In its decision dated Feb. 2 and published on June 30, the court dismissed PhilHealth’s 2014 petition to dismiss the COA decision for lack of merit.

The High Court said that the gift amounting to P10,000 per employee exceeded the P3,000 ceiling under Administrative Order 263 and National Budget Circular 452.

The court also assailed PhilHealth’s claim that it enjoys fiscal autonomy based on its original charter, saying that such autonomy is not absolute and must conform with prevailing rules and regulations issued by the president of the Philippines and/or the Department of Budget and Management.

The SC further ordered the approving officials and payees to refund the disallowed amount. — Bianca Angelica D. Añago 

SMC dropped 3 coal-fired projects, DoE says in letter to think tank

SMC GLOBAL Power Holdings Corp. will no longer be pursuing three planned coal-fired projects with a total capacity of 1,500 megawatts (MW), the Department of Energy (DoE) said in a letter released by non-government organizations.

The July 1 letter was sent to an environmental think tank, the Center for Energy, Ecology and Development (CEED), in which it identified the proposed projects as SMC Global Power’s circulating fluidized bed coal-fired plants in Pagbilao and Sariaya, Quezon with capacity of 600 MW each; and the company’s 300-MW Looc Malabuyoc coal-fired power plant in Cebu. It described these projects as “discontinued.”

CEED had sought information on seven coal plants which were removed from the department’s list of proposed coal plants in October.

The letter was released by the Power for People Coalition (P4P) over the weekend. It was signed by Mario C. Marasigan, the director of the department’s Electric Power Industry Management Bureau.

In October, the DoE announced that it was enforcing a moratorium on greenfield coal plants to facilitate a shift to a more flexible power generation mix.

BusinessWorld asked SMC Global Power to comment but it had not replied at deadline time.

In its reply to CEED, the DoE also gave updates on coal plants which it has delisted in October. These were identified as the 300-MW SMC Malita power plant project phase II expansion in Malita, Davao Oriental; the 600-MW Merbau coal-fired thermal power plant in Pinamukan Ibaba, Batangas City; and the 300-MW Ozamiz coal-fired power plant in Ozamiz City, Misamis Occidental.

“The DoE has delisted these… projects due to non-submission of the required monthly power project updates,” it explained.

Meanwhile, Orion Pacific Prime Energy, Inc.’s 1,200-MW Quezon coal-fired thermal plant project in Tagkawayan, Quezon is still undergoing review, with the authorities considering whether it should be exempted from the coal moratorium.

The DoE also gave an update on Meralco PowerGen Corp.’s 1,336-MW coal-fired power project in Atimonan, Quezon, saying that the company is in talks with lenders to extend the loan facility “due to challenges encountered in securing power supply agreements.”

‘COAL PIPELINE NEARING ITS END’
In a statement over the weekend, P4P said that the discontinuation of the proposed coal projects in Quezon and Cebu marked the “nearing end of the shrinking coal pipeline.”

“We welcome the good news from DoE officially confirming that the plan to construct new coal plants in Sariaya and Pagbilao is discontinued. We hope this will lead to the cancellation of other ongoing dirty energy projects in the province of Quezon, especially in Atimonan,” Monsignor Noel Villareal, one of the leaders who campaigned against coal plants in Quezon, was quoted as saying.

P4P said both Quezon and Cebu have had a long history with coal.

“As more coal projects get out of the way, we need not and should not make our abundant renewable energy potential wait to be tapped any longer,” Gerry C. Arances, P4P convenor, said.

Meanwhile, National Coordinator of the Philippine Movement for Climate Justice Ian Rivera said: “This huge cancellation of coal also signals that Philippine energy is now at a crossroads. This is a challenge to the government to review the Philippine Energy Plan towards an immediate shift to renewable energy and prevention of another supply instability by 2024.” — Angelica Y. Yang

PHL hydro capacity additions seen topping 1 gigawatt by 2030

HEDCOR.COM

THE PHILIPPINES is projected to increase its hydropower capacity by 1.1 gigawatts (GW) by 2030, with pumped storage plants accounting for more than half of the forecast total, the International Energy Agency (IEA) said in a special market report issued last week.

The Philippines is expected to add 0.5 GW from pumped storage plants; 0.3 GW from reservoir facilities and 0.2 GW from run-of-river hydro plants by 2030, the IEA said.

The Philippine estimates account for 7% of the expected hydro capacity additions in Southeast Asia for the period, expected at 15.30 GW.

In its report, the IEA said that global hydro capacity additions are expected to hit 1,555 GW by 2030, a 17% increase from the 1,330 GW in 2020.

“Over 2011-2020, hydropower capacity increased 300 GW and we expect 230 GW growth over 2021-2030 so it (will be) 23% lower than the growth in 2011-2020,” the IEA told BusinessWorld in an e-mail last week.

The organization said it expects slowdowns in project development in China, Latin America and Europe, though growth in the Asia Pacific region, Africa and the Middle East will partly offset the decline.

According to the IEA, hydropower is the “forgotten giant of low-carbon power,” with the renewable energy source accounting for one-sixth of global electricity generation, the third-largest source after coal and natural gas in 2020.

“Hydropower’s contribution is 55% higher than nuclear’s and larger than that of all other renewables combined, including wind, solar PV (photovoltaic), bioenergy and geothermal,” IEA said.

It added that emerging and developing economies have led the world’s hydro growth since the 1970’s due to public sector investment in large plants.

Last year, hydro accounted for 7% of power generated by the Philippines, the IEA said. — Angelica Y. Yang

IP waiver for COVID goods seen affecting trade deals

REUTERS

THE INTELLECTUAL property (IP) regulator urged caution on proposals to suspend some IP protections in the case of goods needed to contain the pandemic as such a move may affect global trade agreements.

The so-called “TRIPS waiver” would suspend enforcement of parts of the TRIPS agreement, an IP treaty with the World Trade Organization (WTO), to expand access to COVID-19 vaccines, treatments, and diagnostic tools.

TRIPS is more formally known as the Agreement on Trade-Related Aspects of Intellectual Property Rights.

Public health advocate Coalition for People’s Right to Health is asking the government to pursue a waiver.

“Of course, the waiver will have implications on the Philippines’ obligations under international trade agreements, particularly those with IP chapters,” Intellectual Property Office of the Philippines (IPOPHL) Bureau of Patents Director Lolibeth R. Medrano said in an event Saturday.

The Philippines has signed the Regional Comprehensive Economic Partnership (RCEP), a trade pact that includes China, Australia, New Zealand, Japan, South Korea and all 10 member countries of the Association of Southeast Asian Nations. The deal covers intellectual property, e-commerce, small business, and competition.

RCEP, along with a Philippine deal with the European Free Trade Association, has provisions that are based on TRIPS, Ms. Medrano said.

IPOPHL and government agencies that deal with health and trade are part of a technical committee that is holding consultations to form a national position on the waiver, she said.

“Faced with the developments, the country continues to participate in the discussions at the regional and WTO (levels).”

Legislation will also be needed for a TRIPS waiver, Ms. Medrano said.

“Still, we need a municipal law to have that effective in our jurisdiction. We’re studying actually the implications of the waiver — if it’s approved — to the IP Code provisions.”

The waiver could have implications on IP Code provisions on copyright, patents, and industrial design, potentially prompting amendments to the IP code or a law that would suspend the application of the relevant provisions.

As the Philippines continues to monitor and participate in WTO discussions, she said the government is working on the development of the pharmaceutical industry, specifically vaccine production.

“Current vaccine production capacity is just limited to fill and finish facilities, meaning these are just repacking vaccines in vials. So hopefully this would lead to full-fledged vaccine development facilities.” — Jenina P. Ibañez 

Body promises to improve supervision of state firms

GCG.GOV.PH

THE GOVERNANCE Commission for Government-Owned and -Controlled Corporations (GCG) said it will improve its online monitoring system and review its process of assessing state-run firms after the Finance department cited instances of weak oversight.

The GCG said in an e-mail that it is improving its monitoring system to address the poor compliance of GOCCs in submitting their financial reports.

It said the online portal was improved to only accept reports that are compliant with the standards set by the Commission on Audit (CoA).

It will also directly work with CoA to ensure that financial statements submitted by GOCCs comply with accounting and auditing rules as well as CoA’s own requirements.

Finance Secretary Carlos G. Dominguez III in mid-June called on the GCG to improve its oversight after poor compliance by GOCCs.

Mr. Dominguez noted that some assessments made by the commission “contrast sharply” with the conclusions reached by other regulators, while several GOCCs were given high ratings even if they did not comply with accounting and reporting standards.

“The goal of the Governance Commission is one with the Department of Finance in ensuring that the GOCCs are performance-oriented enterprises and significant tools of economic growth,” the GCG said. — Beatrice M. Laforga

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