How PSEi member stocks performed — September 8, 2020
Here’s a quick glance at how PSEi stocks fared on Tuesday, September 8, 2020.
Peso up as cases decline
THE PESO strengthened against the dollar on Tuesday as the country recorded fewer cases of coronavirus disease 2019 (COVID-19).
The local unit closed at P48.56 against the greenback on Tuesday, up 11 centavos from its P48.67-per-dollar finish on Monday, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s session at P48.65 per dollar. It logged its best showing at P48.54, while its intraday low was at P48.68 versus the US currency.
Dollars traded declined to $687.37 million on Tuesday from $765.8 million on Monday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso went up as the country logged lower cases of the virus on Monday.
“The peso exchange rate was stronger versus the US dollar after the latest easing of new COVID-19 cases to new lows in nearly two months or since July 14 this year, which could help improve economic recovery prospects,” Mr. Ricafort said in a text message.
The Department of Health (DoH) on Monday reported 1,383 additional coronavirus infections. However, it said the data is based on just 88 out of 115 accredited testing laboratories as 27 laboratories failed to submit their results on time.
On Tuesday, the department reported 3,281 new cases, bringing the total to 241,987. Recoveries stood at 185,178 while deaths were at 3,916. The DoH said 34 laboratories did not submit results.
Mr. Ricafort added that the dollar weakened as US President Donald J. Trump made fresh threats about the world’s largest economy’s trade with China.
“President Trump’s mention of a possible COVID-19 vaccine by October 2020 supported the market sentiment, but it was offset by concerns over increased US-China tensions,” he said.
With the US election approaching, Mr. Trump on Monday again raised the idea of separating the US and Chinese economies, also known as decoupling, suggesting the United States would not lose money if the world’s two biggest economies no longer did business, Reuters reported.
Mr. Trump vowed that in future his administration would prohibit federal contracts with companies that outsource to China and hold Beijing accountable for allowing the coronavirus, which began in China, to spread around the world.
For today, Mr. Ricafort sees the peso moving within the P48.50 to P48.65 range against the dollar. — K.K.T. Jose with Reuters
Bargain hunters lift PSE index back to 6,000 level
By Denise A. Valdez, Senior Reporter
THE MAIN INDEX sustained its upward trajectory on Tuesday to break into the 6,000 level on bargain hunting as investors held on to hopes of an economic recovery.
The benchmark Philippine Stock Exchange index (PSEi) gained 98.18 points or 1.65% to close at 6,034.03. The broader all shares index also went up 46.57 points or 1.30% to end at 3,604.58.
“Last week’s decline became an opportunity for investors to hunt for bargains. Investors are now looking into the economic recovery,” said Claire T. Alviar, a research associate at Philstocks Financial, Inc.
The softening in the growth of new local coronavirus cases, which was at 1,383 on Monday, was a major factor in improving investor sentiment, Ms. Alviar said in a text message on Tuesday.
The total tally of cases in the Philippines stood at 238,727 as of Monday, where 49,931 are active and 3,890 have died. This helped support belief that the coronavirus curve may have already flattened, as claimed by a researcher from the University of the Philippines.
However, trading volume remained tepid as many remained wary of the continued growth of coronavirus cases. Value turnover stood at P4.57 billion with 1.19 billion issues switching hands, against the previous day’s P3.9 billion with 2.95 billion issues.
“There’s no risk yet of stricter lockdown measures, and businesses are gradually reopening, with the expected improvement in consumer and business confidence in the coming months that may increase demand for loans and improve consumption — very essential for economic recovery,” Ms. Alviar said.
The PSEi’s climb on Tuesday is also in anticipation of the reopening of US markets after their Labor Day holiday on Monday, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
Most Asian stocks were also faring in green territory when the local market closed.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%. Japan’s Nikkei added 0.8%, even as revised data confirmed the nation had slumped into its worst postwar contraction, with business spending taking a bigger hit from the coronavirus pandemic than initially estimated.
Most sectoral indices in the PSE ended Tuesday’s session in green territory: industrials rose 176.71 points or 2.23% to 8,092.97; financials added 24.12 points or 2.10% to 1,171.13; property gained 44.73 points or 1.63% to 2,788.15; holding firms improved 82.60 points or 1.34% to 6,246.72; and services climbed 14.07 points or 0.95% to close the session at 1,491.22.
The sole declining index was mining and oil, which lost 44.99 points or 0.73% to 6,077.78 at the end of session.
Advancers outpaced decliners, 112 against 84, while 46 names ended unchanged.
Foreign investors were net sellers again, but net outflows were reduced to P647.32 million on Tuesday from P841.39 million on Monday. — with Reuters
Gov’t to ban home quarantine as coronavirus cases near 242,000
THE GOVERNMENT is looking at enforcing aggressive isolation measures and prohibiting home quarantine for coronavirus patients to bring down the infection rate further, according to Carlito G. Galvez, Jr., chief enforcer of the state’s anti-COVID-19 efforts.
Stricter isolation measures were needed to keep the virus in control, he told an online news briefing on Tuesday.
The government has been setting up more isolation centers for patients that don’t show symptoms and those with mild cases of the virus to contain the virus.
Mr. Galvez said he stood by his earlier remarks that home quarantine was to blame for the spread of the coronavirus. Cases have been decreasing in areas where home quarantine had been discouraged, he added.
He noted that while there are guidelines on home quarantine, he and Interior Secretary Eduardo M. Ano are discussing a plan for an inter-agency task force to issue an order banning home quarantine.
The Department of Health (DoH) reported 3,281 new coronavirus infections on Tuesday, bringing the total to 241,987.
The death toll rose to 3,916 after 26 more patients died, while recoveries increased by 286 to 185,178, it said in a bulletin.
There were 52,893 active cases, 88.6% of which were mild, 8.2% did not show symptoms, 1.3% were severe and 1.9% were critical.
Metro Manila had the highest number of new cases with 1,420, followed by Cavite with 263, Negros Occidental with 204, Laguna with 197 and Rizal with 196.
Of the new deaths, nine came from Metro Manila, four from Central Visayas, three from the Calabarzon region, and two each from Zamboanga Peninsula, Davao region and Mimaropa.
One death each was reported from the Bicol region, Western Visayas and Eastern Visayas, while one death was unknown.
The death rate was at 1.62%, lower than the 3.23% global rate, while the infection rate was at 10.62%, higher than the World Health Organization’s (WHO) less than 5% benchmark.
More than 2.6 million have been tested, DoH said.
The coronavirus has sickened 27.5 million and killed almost 900,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization (WHO).
About 19.6 million people have recovered from the virus, it said.
The government on Monday said local coronavirus infections have slowed, while the country’s healthcare system has improved.
The virus reproductive rate stood at 0.94 from four in March, meaning an infected patient can infect one more person, he said.
Mr. Galvez earlier said new cases peaked on Aug. 10 with 6,958 and gradually decreased to 2,592 on Sept. 5. There was also a downtrend in Metro Manila, the Calabarzon region and Central Visayas, he said.
There were now 117 licensed laboratories that have conducted 2.7 million tests involving 2.6 million people.
Mr. Galvez urged the public to continue practicing minimum health standards by wearing face masks and shields, washing hands and practicing social distancing to prevent local transmission.
Defense Secretary Delfin Lorenzana, the head of the national task force, on Saturday said the Philippines was seeking to flatten the curve by the end of September.
In epidemiology, the idea of slowing a virus spread so that fewer people need to seek treatment at a time is known as flattening the curve.
The curve researchers are talking about refers to the projected number of people who will get infected over time. — Vann Marlo M. Villegas and Gillian M. Cortez
Lawmaker hits higher defense budget for 2021
A CONGRESSMAN on Tuesday questioned a proposed increase in the Defense department’s so-called sovereignty budget next year given President Rodrigo R. Duterte’s order not to involve troops in military exercises in the South China Sea.
During a House of Representatives budget hearing on Tuesday, Party-list Rep. Arlene Brosas noted that the budget needed to defend the country’s sovereignty had been increased to P41.1 billion from P33.96 billion this year.
The Executive branch has submitted a P283.2-billion budget for the Defense department next year.
Defense Secretary Delfin Lorezana in March said Mr. Duterte had ordered the military not to participate in naval exercises of other countries in the South China Sea.
Chinese Foreign Ministry spokesman Wang Wenbin had said the move was “in the interest of both China and the Philippines and regional peace and stability.”
Responding to Ms. Brosas’s question, Mr. Lorenzana said: “We continue to patrol over our territories, our exclusive economic zones and the Kalayaan group of islands.”
He said the military won’t participate in US war games in the disputed sea. The Philippines may join exercises in its territorial waters such as the Sulu Sea, he added.
“We are doing our best with the assets available to us,” Mr. Lorenzana said. “The West Philippine Sea is so wide and the navy has limited assets and also the Air Force. But we are trying our best with our limited assets to assert our sovereignty over the area,” he said in mixed English and Filipino, referring to parts of the South China Sea within the Philippines’ exclusive economic zone.
Of the P283.2 billion proposed budget of the Defense department for next year, P122.1 billion will go to personal services, P74.5 billion to veteran pensions, P37.6 billion for capital outlay and P49 billion for maintenance and other operations.
Mr. Lorenzana said the chunk of their budget would be allotted to personal services, pensions and maintenance. — Kyle Aristophere T. Atienza
Statistics agency told to postpone census amid COVID-19 crisis
THE GOVERNMENT should postpone its population and housing census this year to prevent potential coronavirus transmissions, according to a congressman.
While the Philippine Statistics Authority’s (PSA) surveys are needed for planning, conducting the census now could expose the agency’s staff and family members that they talk to, Cagayan de Oro City Rep. Rufus Rodriguez said in a statement on Tuesday.
“We are still getting daily positive cases in the thousands, though the Department of Health (DoH) is reporting that the numbers are going down,” he said. “There will be face-to-face interviews and the possibility of infection is still there.”
The census began on Sept. 1 and will end on Sept. 30.
Mr. Rodriguez also slammed the PSA for saying that people who refuse to participate in the census could be jailed for a year or fined P100,000.
“Such a threat amid the pandemic is uncalled for and inappropriate,” he said. “What we need is, as far as practicable, fewer people on the streets and outside their homes to help contain the spread of COVID-19.”
Florante Varona, officer-in-charge of the National Censuses Services, earlier told DZBB radio the law requires citizens to answer government surveys.
Mr. Rodriguez said delaying the census for a few months or until a coronavirus vaccine is found would not affect planning and policy making. “They can in the meantime rely on historical data with some adjustments,” he said. — Kyle Aristophere T. Atienza
Kadayawan spirit lives on with digital events, but tourism sector struggles to stay afloat
By Maya M. Padillo, Correspondent
DAVAO CITY — Video-sharing platform TikTok was this year’s stage for the Indak-Indak street dancing competition, one of the highlights of the annual Kadayawan Festival in August.
Entries had to be filmed either in a residence or workplace, with social distancing observed for those joining as a group, in keeping up with the local government’s continued ‘stay home’ mantra, although most quarantine measures have been eased since July.
“The Kadayawan spirit lives on,” said Renato “Gatchi” Gatchalian, president of the Davao Tourism Association (DATA) and headed the Kadayawan Digital Week, a first for the festival — a thanksgiving for good harvest and abundance — that has been running for 35 years.
Mr. Gatchalian said it was also important to find new ways of celebrating amid the coronavirus pandemic to maintain tourism promotion efforts.
“We will not wait for the normal, we will do something now and keep on promoting Davao City… and even Kadayawan, we would not want people to forget that, even our guests abroad,” he said.
Last year’s Kadawayan attracted more than 235,000 local and foreign visitors, contributing an estimated P4.2 billion to the local economy, including P1.92 billion in tourism receipts.
That lost income from Kadayawan this year is on top of losses suffered by the tourism sector in the first half.
Hotels saw a 50% drop in occupancy rate, 80% of tour operators have temporarily closed, many homegrown restaurants have stopped operations, and tourism spots are still prohibited from reopening.
With both domestic and international travel restrictions still in effect, hotels and other accommodation facilities are not expected to make an immediate recovery, according to Prime Philippines Regional Director for Davao Ma. Luisa Abaya.
“Hotels are likely to continue pursuing alternative sources of demand such as corporate accounts (business process outsourcing companies, for example),” Ms. Abaya said in an online presentation during the Davao City Chamber of Commerce and Industry, Inc.’s (DCCCII) general membership meeting on Aug. 28.
Pia Lourdes Partoza-Montano, president of the 35-member Davao Association of Tour Operators (DATO), said 80% of their group have temporarily stopped operations while the remaining 20% are operating at a loss due mainly to fixed expenses.
“We haven’t had bookings (since March). Until now and we don’t know when this will end,” said Ms. Montano, general manager of Par Travel and Tours, in an online interview.
She said they are hoping that the P10-billion stimulus fund for the tourism industry under the pending Bayanihan 2 law will be efficiently used and include loans for micro, small and medium scale enterprises such as tour operators and travel agencies.
DATO, in a statement, said their members need a “rescue package” from the national government.
The local government is already on a tight budget, redirecting its entire Kadayawan allocation this year to the coronavirus response.
Generose D. Tecson, head of the City Tourism Operations Office, said the digital Kadayawan celebration is somehow a “precursor to all the other things that we are going to do in the future.”
Mr. Gatchalian, who himself decided to permanently close his restaurant Saging Repablik, said having the digital celebration is a demonstration of how people from Davao will have to adapt to change.
“We have to face the new reality. We have to live the new normal… that is why we collaborated with the city tourism office and the city government of Davao to come up with something. Something old and something new,” he said.
HRW slams gov’t denial of drug killings
Human Rights Watch (HRW) on Tuesday slammed the government’s denial of extrajudicial killings in its war on drugs.
“New Philippine police chief General Camilo Cascolan’s outright denial that extrajudicial killings took place in the government’s drug war is a blatant attempt to whitewash the sordid record of the PNP,” Phil Robertson, deputy Asia director at HRW, said in a statement.
He said human rights groups and the United Nations Office of the High Commissioner for Human Rights have documented extrajudicial killings committed by state forces in President Rodrigo R. Duterte anti-drug campaign.
He also said that Mr. Cascolan should ensure that police cooperate with international bodies investigating the campaign.
“If the PNP has nothing to hide, it should welcome those who want to ferret out the truth in the drug war,” Mr. Robertson said.
Mr. Cascolan on Monday denied there had been extrajudicial killings in the country.
The government said more than 5,800 died in the war on drugs as of July, but human rights groups estimate the deaths at more than 27,000. — Vann Marlo M. Villegas
Manila orders closure of cemeteries on Oct 31-Nov 3
CEMETERIES IN Manila, both public and private, will not be open on October 31 to November 3, the Philippine’s traditional period for visiting the departed at their resting place.
Manila Mayor Francisco M. Domagoso announced on Tuesday that he has ordered the four-day closure to avoid crowding while the coronavirus remains a serious threat.
In a post on his official Twitter account in Filipino, Mr. Domagoso said he issued the directive now to give ample notice and allow people to schedule their visit on other dates.
He also apologized should his decision offend people, but explained that this is for everyone’s safety.
November 1 and 2 are national holidays in the country in observance of All Saints’ Day and All Souls’ Day, respectively, and people usually flock to the cemeteries on these days.
Nationwide round-up
Cooperatives contribute P1.3B to COVID-19 assistance programs
COOPERATIVES NATIONWIDE have contributed a total of P1.3 billion for assistance programs relating to the coronavirus pandemic, benefitting both their members and non-members. Cooperative Development Authority (CDA) Chairman Orlando R. Ravanera, in a briefing on Tuesday, reported that the country’s 18,481 cooperatives contributed to food aid, personal protective equipment, and free transportation and accommodations to frontliners, among others. The P1.3 billion were sourced from the Community Development Fund (CDF), which cooperatives are required to set aside from their net surplus. Under Republic Act No. 9520, the Philippine Cooperative Code of 2008, cooperatives must allocate at least 3% of surplus to the fund intended for activities that will benefit the cooperative’s community. — Gillian M. Cortez
PHL notifies WTO of resin safeguard measures probe
THE Department of Trade and Industry (DTI) has notified the World Trade Organization (WTO) about its plan to look into possible safeguard measures against imports of resin products.
The DTI launched its inquiry after receiving a claim from JG Summit Petrochemical Corp. that it has been harmed by unfair competition from imports.
The WTO acknowledged on Monday receiving notice from the DTI on Sept. 4. The Trade Department said it is conducting an investigation into possible safeguard measures on imported High-Density Polyethylene (HDPE) and Linear Low-Density Polyethylene (LLDPE) pellets and granules.
“The investigation has been initiated to determine whether safeguard measures are warranted,” the WTO said.
HDPE is used in consumer and industrial packaging, and LLDPE is used for general purpose bags and laminated films.
Initial reports from the DTI found significant increases in imports of both products between 2015 and 2019, as well as a decline in the domestic industry’s sales, production, plant utilization, and labor productivity.
After its initial review, DTI found justification for conducting a preliminary investigation into safeguard measures and signed a notice of investigation on Aug. 28.
Republic Act 8800 authorizes the government to impose temporary tariffs as a “safeguard measure” after a finding that domestic industry has been harmed by growing imports. — Jenina P. Ibañez
Construction industry growth seen slowing but outperforming
CONSTRUCTION INDUSTRY growth could outperform its regional counterparts over the next decade, despite the current slowdown caused by declining investment, with growth also losing momentum when compared with the 2006-2019 period, Oxford Economics said.
In its Global Construction Outlook issued Monday, Oxford Economics said it forecasts a “robust” 5.5% average annual growth rate for the construction industry in the 2019-2030 period, against a projected regional average of 4.2%. Growth going forward will be significantly slower than the 9% rate posted in 2006-2019.
The domestic construction market was also estimated at $117.5 billion by 2030, against $65.2 billion in 2019.
“This is due to fixed investment spending falling by a similar rate,” it said.
Civil engineering is expected to expand by 6.4% per annum going forward, becoming the fastest-growing sub-sector because of the government’s support for infrastructure projects. The sub-sector’s output is projected at $59.4 billion by 2030, nearly double the 2019 level of $29.9 billion.
Oxford Economics cited strong funding support for road and rail infrastructure development and the Philippine Energy Plan, which seeks to drastically increase the installed base of renewable energy generators over the next 20 years.
The government is planning to spend P1.107 trillion on infrastructure next year, or just under a quarter of the overall P4.5-trillion spending plan for 2021 as the administration enters its last full year in power. The economic managers have also positioned infrastructure as a possible driver of the economic recovery.
Oxford Economics expects the residential sub-sector to grow by 4.8% annually in 2019-2030 to about $40.6 billion by the end of the period, against $24.2 billion in 2019.
The non-residential segment is seen to post the slowest growth at 4.3% each year in the next decade. Its value will likely increase 59% to $17.5 billion by 2030 from $11 billion last year.
The think tank sees the Philippine economy growing by an average of 5.5% per year over 2019-2030, with its population inching up 1.2% to 123.9 billion by 2030 from 108.3 billion last year.
“We also forecast urban population to expand at a faster rate than total population, with the result that Philippines’s urban population is 53% of total population by 2030. Consequently, Philippines’s urban citizenry will increase by 14,750,000 over the next decade,” it said.
Oxford Economics projects the Philippine construction industry to be among the fastest growing across 50 countries it monitored, alongside Kenya, Nigeria, Vietnam and Indonesia, which it pegged as potential members of the 5-6% growth club.
It said the construction sector in India will be expanding at the fastest pace globally at 6-7%, and could overtake Japan as the world’s third-biggest construction market at $400 billion.
“Given the outlook for the key drivers in emerging markets tend to be more favorable, they will generally experience more rapid construction growth than developed economies, as they have in the past. By 2030, we expect them to account for nearly 60% of total construction activity,” it said.
Oxford Economics expects construction output to rise 35% to $5.8 trillion worldwide by 2030 despite the impact of the coronavirus pandemic. Some two-thirds of global growth will be coming from China, the US, India, and Indonesia, while ASEAN countries are expected to account for over 10% of the expansion.
It said construction activity will bounce back faster than the broader economy as lockdowns are loosened, because demand in the industry is less directly affected by consumer spending, while low interest rates support the financing of construction projects.
“The baseline outlook for a relatively rapid recovery in construction activity next year hinges critically on our assumption that an effective COVID-19 vaccine is developed and rolled out early next year, and that there are not widespread second waves of infection that necessitate further lockdowns,” it said.
“If either of these assumptions does not materialize, the strong growth predicted for next year is severely at risk,” it added. — Beatrice M. Laforga