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Oscar Lopez steps down from Lopez Holdings

Lopez Holdings Corp., the parent company of ABS-CBN Corp. and First Philippine Holdings Corp., announced on Friday a shakeup in its board composition after the resignation of its two top officials.

Chairman Emeritus Oscar M. Lopez and Vice Chairman Eugenio Gabriel “Gabby” L. Lopez III both stepped down from their respective positions due to “personal reasons.”

“The board of directors thanked them for their tremendous contribution to Lopez Holdings for 27 years,” the company said in a statement.

In a recent organizational meeting, the board installed Philippine Ambassador to Japan Manuel M. Lopez – the brother of Oscar and Gabby – as the new chairman emeritus, while Federico R. Lopez was voted chairman, and Martin L. Lopez as vice chairman.

Federico, Oscar’s son, is the company’s treasurer since 2010. He is now replaced by Miguel L. Lopez, the present executive vice president, who also serves as a member of the board of directors and treasurer of Rockwell Land Corp.

Gabby Lopez earlier resigned as chairman emeritus and director of ABS-CBN, three months after the media giant’s broadcast franchise application was denied by the House of Representatives.

Shares in Lopez Holdings inched down 0.44% to close at P2.27 each on Friday. — Adam J. Ang

Filinvest launches collaboration program with startups

Gotianun-led Filinvest Group has launched a program that connects its companies to various startups for their digital transformation.

The conglomerate through f(dev), its latest corporate innovation and ventures arm, put up Filinvent.io, an open innovation program that aims for greater collaboration between its 60 operating companies and technology startups.

“Our goal with Filinvent.io is to unlock innovations for companies through different forms of engagements with tech startups — whether that’s through product collaborations, operating partnerships, venture funding, and strategic alliances, among others,” f(dev) Head Xavier G. Marzan said.

The group has been investing in and raising new technology-driven ventures through f(dev). Its various segments have also been placing their bets on digital infrastructure and green technologies.

“We believe that having an active engagement strategy with the digital startup ecosystem — both locally and globally — is an important capability of large organizations moving forward,” said Josephine Gotianun-Yap, Filinvest Development Corp. (FDC) president and chief executive officer.

f(dev) is building a network of startup accelerators, venture capital firms, and innovation platforms.

Despite the ongoing pandemic, the business continues to source and engage with expanding startups.

“Our immediate priority is to work with Series B & C startups in specific verticals but generally look at a broad range of startups on an ongoing basis,” Mr. Marzan said.

Recently, property developer Filinvest Land, Inc. teamed up with Visoplan, a German tech startup, for a product development initiative. The latter developed Building Information Modelling (BIM), a cloud-based platform which centralizes construction planning.

Filinvest’s banking arm EastWest Bank is improving its banking experience with the aid of Brankas, an Indonesia-based financial technology startup.

The conglomerate sets its eyes for more startup partnerships in different business areas in the coming months.

On Friday, shares in FDC inched down 0.34% to close at P8.72 each, while those of Filinvest Land rose 1.09% to P0.93 apiece. — Adam J. Ang

SM Investments issues P10-B bonds

SM Investments Corp. on Friday issued P10-billion fixed-rate bonds, the first tranche of its three-year debt program.

The conglomerate told the stock exchange that it listed the bonds with the Philippine Dealing and Exchange Corp. (PDEx).

The said bonds are expected to yield 3.3613% annually. These will mature in 2024.

It is expected that the proceeds from the issued debt papers will generate P9.89 billion, which will be used to refinance its existing loans.

SMIC tapped BDO Capital, China Bank Capital, BPI Capital, First Metro Investment Corp., and Security Bank Capital as joint lead underwriters.

Two weeks ago, the Securities and Exchange Commission approved the shelf registration of the company’s P30-billion debt program.

On Friday, shares in SMIC inched down 0.45% to close at P886 each. — Adam J. Ang

PSEi climbs on investor bargain hunting

LOCAL shares ended in positive territory on Friday, marking its third consecutive climb as the market rallied on investor bargain hunting.

The bellwether Philippine Stock Exchange index (PSEi) rose 54.53 points or 0.91% to 5,999.4 while the broader all-shares index climbed 23.99 points or 0.67% to 3,586.27.

In a mobile phone message, Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said the market’s three-day rally can be attributed to the bargain hunting of local equities and the recent announcement of the Bangko Sentral ng Pilipinas (BSP) to maintain holding rates.

On Thursday, the Monetary Board announced their decision to keep the rates on the BSP’s overnight reverse repurchase, lending, and deposit facilities at 2.25%, 2.75%, and 1.75%, respectively.

“Major emerging markets are somehow more attractive than developed economies. Add to that the BSP’s holding rates that signals attractiveness towards Philippine equities for a much higher return, compared to fixed income equities,” Mr. Tan said.

However, Regina Capital Development Corp. Head of Sales Luis A. Limlingan noted that the local market already closed before the announcement that United States President Donald J. Trump and his wife have tested positive for the coronavirus disease 2019 (COVID-19).

“Local investor reaction did not reflect the news. But upon release, US futures have already tumbled by 400 points as of this writing,” Mr. Limlingan said in a mobile phone message.

In the midst of his re-election bid, Mr. Trump announced in a tweet on Friday that he and his wife would go into quarantine after contracting the said virus.

Back home, Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said the local market ended higher as investors continue to be optimistic due to the improved manufacturing activity in the country.

On Thursday, IHS Markit said the Philippine purchasing managers’ index rose to 50.2 in September, compared with 47.3 in August, marking the first time since February that it breached the 50-neutral level which outlines expansion from contraction.

Meanwhile, all sectoral indices closed in green territory during Friday’s close.

Property improved 27.55 points or 0.99% to 2,800.06; holding firms went up 60.07 points or 0.97% to 6,199.82; industrials increased 67.73 points or 0.85% to 7,973.54; financials picked up 9.28 points or 0.79% to 1,172.42; services advanced 3.6 points or 0.24% to 1,479.19; and mining and oil edged up 7.79 points or 0.13% to 5,857.92.

Trading value was at P4.91 billion on Friday with 1.47 billion issues switching hands, against Thursday’s P5.43 billion worth of 1.96 billion shares.

Advancers outpaced decliners 93 against 92, while 57 names ended unchanged.

Foreigners remained as sellers, logging a net outflow of P268.64 million, less than the P545.80 million during the previous trading day.

“Next week, the market’s support may be placed at the 5,750 level while resistance is pegged at 6,200,” Timson’s Mr. Pangan said. — Revin Mikhael D. Ochave

Dominguez confident Congress will ‘do its duty’ and pass budget

Finance Secretary Carlos G. Dominguez III expressed confidence in the ability of Congress to pass the P4.5 trillion 2021 Budget on time despite the leadership struggle at the House of Representatives, saying that the spending plan is critical for reviving the economy.

"I believe the entire Congress is aware that the enactment of the budget in a timely manner is essential to the recovery of the economy from the ravages of the contagion.

We are confident that they will do their duty," Mr. Dominguez said via Viber Friday.

The 2021 budget is 9.8% bigger than the 2020 edition and features stimulus measres to counteract the effects of the pandemic.

If not passed in time, Mr. Dominguez warned that the government may be forced to operate on a re-enacted budget in the new year, which he said would threaten the economic recovery.

"That will mean the bounce back of the Philippines' economy and the return to normal of Filipinos' income levels will be delayed. I am sure that the legislature will work hard to avoid that situation," he said.

The delayed passage of the 2019 budget was blamed for slowing economic growth after a re-enacted budget kept the government from spending freely on infrastructure.

The House is witnessing the breakdown of a power-sharing deal between Speaker Alan Peter S. Cayetano and Marinduque Representative Lord Alan Q. Velasco, with the two sides subjecting themselves to reported mediation Tuesday by President Rodrigo R. Duterte over the terms of the deal, which had Mr. Cayetano stepping down in favor of Mr. Velasco.

Mr. Cayetano offered his resignation Wednesday. His resignation, however, was rejected by 184 legislators, a firm majority of the 304-member body.

"To paraphrase Vice Admiral Nelson before the Battle of Trafalgar, 'the country expects that everyone will do their duty,"' Mr. Dominguez said.

Economic managers expect the economy to return to 6.5-7.5%-growth next year. — Beatrice M. Laforga

NFA says too early to gauge impact of Rice Tariffication Law

The National Food Authority said it is too early to judge the overall impact of the Rice Tariffication Law (Republic Act 11203) and resisted calls for it to be amended.

"Since the law is still new and the rice sector is still under a transition period, we cannot yet attain or savor the full benefits of the law, although we can already see and feel them,” NFA Administrator Judy Carol L. Dansal said in a statement.

The law removed the restrictions on rice imports while charging a 35% tariff on Southeast Asian grain. The tariffs generated will provide P10 billion a year to the Rice Competitiveness Enhancement Fund (RCEF), which will assist farmers with mechanization, obtaining quality seed, and accessing farming know-how.

It also removed the NFA’s importing functions and left it with the main functions of maintaining a buffer stock via domestic purchases and supplying subsidized rice to the poor. Its purchasing activity helps set a floor for the price of palay, or unmilled rice, the form in which farmers sell their harvest.

The NFA buys palay for P19 per kilogram, but it cannot buy the entire domestic harvest due to limited funds and storage, leaving farmers to deal with private traders, who undercut the NFA price.

The NFA said it purchased around two million bags of palay in September, for an average of 90,012 bags per day.

The Cagayan Valley was the top source of palay procured by the NFA with 505,440 bags, followed by Western Visayas 318,383 bags, Central Mindanao 298,665 bags, CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon) 121,910 bags, and Bicol 100,714 bags.

Ms. Dansal said the NFA is ready to purchase the harvest through its 558 warehouses and buying stations.

"As instructed by President Rodrigo R. Duterte and pursuant to our mandate of buffer stocking for calamities and emergencies, we do our very best to accommodate as many farmers who would want to sell palay to the government," Ms. Dansal said.

According to the NFA, some 4.93 million bags of palay were purchased in the year to date as of Sept. 29.

The NFA recently sought to boost its purchasing power by signing agreements with Quirino and Isabela provinces, which agreed to participate in purchasing by supplementing the NFA purchase price by add P1 and P2, respectively using their own funds. — Revin Mikhael D. Ochave

PHL exploring Russia tax, energy, vaccine production deals

Finance Secretary Carlos G. Dominguez III said he discussed the possibility of forging agreements with Russia on tax administration, energy, and a coronavirus vaccine in a recent meeting with outgoing Russian Ambassador to the Philippines Igor Khovaev.

Mr. Khovaev paid a visit Tuesday to Mr. Dominguez, the Department of Finance (DoF) said in a statement Friday.

The DoF said Mr. Khovaev presented plans for potential cooperation between the Bureau of Customs (BoC) and the Federal Customs Service of Russia. Mr. Dominguez also sought Russia's help in improving collection efficiency at the Bureau of Internal Revenue (BIR).

"Ambassador Khovaev said that Russia has shared its VAT collection technology with other countries and would assist the BIR in its effort to improve its system," the DoF read.

The DoF cited Russia's efficient VAT collection system, but provided no further details.

"Based on several reports, we have learned that the electronic VAT monitoring system of Russia has greatly improved their collections. We are very pleased that the Russian Ambassador has expressed willingness to share their technology with us. We will study their system in depth and adopt what is suitable for the Philippines," Mr. Dominguez said via Viber Friday.

The DoF said in May it is studying how the BIR can collect taxes from online transactions to stem potential VAT leakages.

The two officials also talked about a "possible agreement on energy cooperation to help boost the Philippines' power generation capacity," according to the DoF.

"Ambassador Khovaev also mentioned the possibility of producing and distributing in the Philippines the vaccine developed by Russia," it added.

The Philippines joined the third phase of clinical trials of a COVID-19 (coronavirus disease 2019) vaccine developed in Russia.

Michael Henry Ll. Yusingco, a lawyer and research fellow at the Ateneo de Manila Policy Center, said developing a deeper relationship with Russia is positive for the Philippines but warned against "any lopsided arrangement to the detriment of our national interest."

"This effort to deepen economic cooperation with Russia, particularly in the areas of tax administration and energy production as you said, is only par for the course.

Nevertheless, this effort must be tempered with due consideration to national security concerns. We do not want to open our government to unlawful interference by unfriendly and unsavory elements. We do not want our political leaders to be compromised by undue foreign influence," Mr. Yusingco said in an e-mail Friday. — Beatrice M. Laforga

Palay farmgate price declines 3% in second week of September

THE AVERAGE farmgate price of palay, or unmilled rice, fell 3% week-on-week to P17.12 per kilogram in the second week of September, with the price up 5.8% year-on- year, according to the Philippine Statistics Authority (PSA).

In its weekly update on palay, rice, and corn prices, the PSA said the average wholesale price of well-milled rice fell 0.4% to P38.42 while the retail price rose 0.02% to P42.24.

The average wholesale price of regular-milled rice fell 0.5% to P34.81 while the retail price fell 0.1% to P37.89.

The farmgate price of yellow corn grain fell 2.5% week-on-week to P12.01. The average wholesale price of yellow corn grain fell 0.3% to P20.79 while the retail price fell 0.1% to P24.82.

The farmgate price of white corn grain fell 2.5% week-on-week to P13.18.

The average wholesale price of white corn grain fell 0.8% to P15.75 while the retail price was flat at P27.80. — Revin Mikhael D. Ochave

Consumer group seeks refund of excess missionary power charge

A consumer group is seeking a refund of possible over-collections in the missionary electrification charge, citing the declining fuel costs of beneficiary power generators.

The National Power Corp. (Napocor), which collects the universal charge from consumers’ electric bills, has applied with the Energy Regulatory Commission (ERC) to increase the charge by five centavos to P0.2055 per kilowatt-hour (kWh).

Laban Konsyumer said the ERC must require Napocor to consider lower fuel costs in its estimates.

"The current UC-ME (universal charge-missionary electrification) was set in 2015, when fuel prices were much higher than today. Thus, costs incurred have already been recovered under the existing rate," Laban Konsyumer said in a statement Friday.

In a recent virtual hearing on Napocor's petition, Laban Konsyumer noted that Napocor is collecting the bill component "in excess," as the peso depreciated and fuel prices have been declining since 2015.

The Brent Crude benchmark was at around $40 per barrel in July from about $52 per barrel five years ago. Meanwhile, the peso has depreciated 10.7% since 2015.

"The Commission should order a refund of over recovery of UCME (universal charge- missionary electrification)," Laban Konsyumer President Victorio A. Dimagiba said.

By next year, fuel costs paid for by the Napocor "should still be almost 10% lower" compared to 2015 levels, he added.

The missionary electrification fund is collected from grid-connected electricity consumers to subsidize electricity in off-grid areas. It is also used to cover the fuel costs of gas-fired power plants in the countryside.

Since 2013, the UC-ME increase more than four times to P0.1561/kWh from P0.0373/kWh, the group noted.

Moreover, Laban Konsyumer in its petition asked the ERC to "stop and abandon" the collection of UC-ME. — Adam J. Ang

CIC touts credit-score app amid increased borrowing during pandemic

State-run Credit Information Corp. encouraged potential borrowers to check their credit scores on its mobile application to size up their prospects of obtaining credit during the coronavirus disease 2019 (COVID-19) crisis.

CIC said the recently-launched CIBIApp, developed by credit bureau CIBI Information, Inc., provides credit histories and an identity verification process.

"This mobile application will help our individual borrowers access their own credit information through their mobile devices. The main innovation here is that we can do online identity verification to help secure the process, especially during this time of restricted travel and social distancing," CIC President and Chief Executive Officer Aileen L. Amor-Bautista said in a statement Friday.

CIBIApp stores credit data submitted by various lenders to CIC.

Ms. Bautista said requests for credit reports from individual borrowers have surged during the public healt emergency, which has also damaged the economy.

"This is most probably due to the increase in application for loans and other financial services as a result of the COVID-19 crisis. Whether in the Philippines or abroad, Filipinos are beginning to see the value of the CIC as a cost-effective way of monitoring their payments and credit standing," she said.

CIC said in an e-mail that the latest data on the volume of requests for credit reports has yet to be released as some of its operations remain limited due to the quarantine.

Credit scores range between 300 and the high score of 850.

CIC currently keeps credit data on 18.2 million borrowers and expects coverage to expand with more financial companies participating and submitting credit data.

CIBI said the application contains security features that prevent data theft.

"We likewise assure them that our character verification process, done on a video call format through the MeetMe feature of the app, will be robust so that they will be the only one to see the contents of their credit reports," CIBI President and Chief Executive Officer Marlo Cruz said in a statement. — Kathryn Kristina T. Jose

Insurers warned of data risk as firms move to self-service

A cyber security expert said insurance firms adapting to new processes during the pandemic must be aware of the security risks and take steps to minimize the impact of data theft.

Red Rock IT Security Forensic Analysis Director Raymond Nuñez said one of the measures he recommends for insurance firms is to keep active claims in a separate database to mitigate the damage from data theft in a “minimalist” way.

“It should be a minimalist approach always. What kind of information do I need? Make the main database push other information to the separate database, so in case the latter gets breached, there’s no path to the former database,” Mr. Nuñez said in a recent webinar organized by the Philippine Insurers and Reinsurers Association.

Information technology (IT) personnel must also update their databases to narrow the exposure to cyber attack happens.

To further ensure that information is received properly, Mr. Nuñez added that insurers can always confirm transactions through phone messages.

“Once the claim is fulfilled, you can pull it out from the database or you could just text the client about the claim, so there’s a minimal risk of exposure,” Mr. Nuñez said.

Another risk was highlighted on the panel by the Insurance Institute for Asia and the Pacific, Inc. (IIAP), which flagged self-service tools as a potential source of risk as the industry undergoes digital transformation.

“To be competitive, you have to digitally transform. One of the dreams of insurance people is we want our claimants to check the status of a claim by themselves without the need for contacting anybody from the company,” IIAP Executive Director Francisco D. Papa, Jr. said.

He highlighted the value placed by data thieves on stored information with long shelf lives – information that is impossible to change in case of a hack.

“Insurance and health data are sold in underground markets. They have longer shelf lives and technically not replaceable. If your password gets breached, you can replace it. But if your fingerprint data gets breached, it would be difficult to replace it. That’s the idea,” Mr. Nuñez said.

Internet security firm Kaspersky Lab said the Philippines was in fourth place in its 2019 ranking of countries with the highest number of web threats, up from 11th a year earlier.

It detected 28 million Internet-borne attacks against Philippine-based Kaspersky users last year, or 44.40% of the Philippines’ total number of Kaspersky users. — Kathryn Kristina T. Jose

Peso weaker on dollar safe-haven plays after Trump tests positive for COVID-19

The peso weakened Friday as investors sought a safe haven in the dollar after US President Donald J. Trump tested positive for coronavirus disease 2019 (COVID).

The peso closed at P48.48 against the dollar, compared with its P48.43 finish Thursday.

The peso opened the session at P48.42, its intraday high. The low was P48.50.

Dollar volume rose to $814.9 million from $807.6 million the previous day.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that the peso weskened on safe-haven moves into the dollar after Mr. Trump tested positive for the coronavirus.

“The peso was weaker after US President Trump tested positive for COVID-19, weighing on sentiment on the global financial markets, including the peso, and also causing a healthy upward correction in the dollar as a safe haven," Mr. Ricafort said.

Bloomberg reported that the test result follows a positive test for White House senior adviser Hope Hicks.

US stock markets fell following Mr. Trump’s test result. The Dow Jones Industrial Average dropped 1.56% while the S&P 500 fell 1.54%. The Nasdaq Composite was down 1.78%.

A trader who asked not to be identified said in an e-mail that investors were also worried about the absence of a resolution on a further round of US stimulus spending.

Mr. Ricafort expects the peso to trade between P48.45 and P48.60 Monday, while the trader puts the range at P48.40 to P48.55. — Kathryn Kristina T. Jose

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