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How PSEi member stocks performed — September 10, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, September 10, 2020.

Peso climbs as oil prices decline

THE PESO strengthened on Thursday as oil prices declined further and as the Philippine government allowed more public transportation modes to operate

The peso closed at P48.57 versus the dollar on Thursday, higher by nine centavos from P48.66-per-dollar finish on Wednesday.

The local unit opened Thursday’s session at P48.60 per dollar and reached a peak of P48.55. Its weakest showing was at P48.61 versus the greenback.

Dollars traded slipped to $548.96 million on Thursday from Wednesday’s $584.9 million.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the dollar weakened as oil prices continued to decline.

“The lower global oil prices recorded over two months could have reduced the demand for US dollars to pay for imports,” Mr. Ricafort said in a text message.

Brent crude futures fell a fraction to $40.77 a barrel after bouncing back from a three-month low overnight, Reuters reported. US crude futures slipped 0.2% to $37.99 a barrel.

Meanwhile, a trader said the peso climbed after the government allowed more public transportation modes to ply the roads.

The government has allowed at least 63,075 public utility vehicles, including jeepneys, buses and ride-hailing network services such as Grab, to operate, following the extension of relaxed quarantine measures for this month.

For today, Mr. Ricafort expects the peso to move from P48.50 to P48.65 versus the dollar while the trader sees the local currency to range from P48.50 to P48.70. — K.K.T. Jose with Reuters

Lack of catalysts keeps main index below 6,000

By Denise A. Valdez, Senior Reporter

THE MAIN INDEX stayed below the 6,000 level on Thursday as the lack of a strong catalyst pulled it lower at the close of trading.

The 30-member Philippine Stock Exchange index (PSEi) shed 30.45 points or 0.51% to close at 5,902.39, while the broader all shares index dipped 9.00 points or 0.25% to end at 3,553.56.

“The PSEi ended lower despite opening higher as selling pressure outweighed the buying. Investors continued to take cash off the table as the sentiment remains cautious,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an email.

The main index opened at 5,955.55 and hit a high of 5,973.59 intraday before settling at its low for the day at the close of the session.

Doubts on the coronavirus situation in the country, fueled by the Health Department’s non-confirmation of whether the coronavirus curve has flattened, was the primary drag on sentiment, Philstocks Financial, Inc. Research Associate Claire T. Alviar said.

“(The Health Department) advised the public that there could be a surge in COVID-19 cases as some units failed to report complete information. This may imply that the Philippines has really not yet flattened the curve,” she said in a text message.

If that is the case, lockdowns will continue to be on the table, which would mean a continued dampened demand for goods and services, Ms. Alviar noted.

Local coronavirus cases stood at 245,143 as of Wednesday, after 3,176 new cases were reported. Metro Manila and nearby areas remain under a relaxed lockdown.

Half of the PSE’s sectoral indices ended Thursday’s trading session higher: property by 7.50 points or 0.27% to 2,716.99; financials by 4.81 points or 0.41% to 1,153.81; and mining and oil by 9.93 points or 0.16% to 6,009.73.

On the other hand, holding firms lost 76.74 points or 1.24% to 6,095.86; services dropped 7.71 points or 0.52% to 1,471.01; and industrials trimmed 0.35 point or less than one percent to 8,030.41 at the close of trading.

Value turnover on Thursday stood at P5.96 billion with 770.87 million issues switching hands, higher than the previous day’s P5.1 billion with 838.18 million issues.

“Trading volumes picked up, which tells us that more investors are interested to come in at current levels. It may continue higher on the last trading day of the week as bargain hunters pick up battered shares,” AAA Southeast Equities’ Mr. Mangun said.

More advancers were tallied at 101 against decliners which stood at 85. A total of 53 names ended unchanged.

Foreign investors snapped a 16-day net selling run as they posted net purchases of P420.91 million on Thursday versus Wednesday’s P543-million net outflow.

Virus infections near 250,000

THE Department of Health (DoH) reported 3,821 coronavirus infections on Thursday, bringing the total to 248,947.

The death toll rose to 4,066 after 80 more patients died, while recoveries increased by 563 to 186,058, it said in a bulletin.

There were 58,823 active cases, 88.3% of which were mild, 8.8% did not show symptoms, 1.2% were severe and 1.7% were critical, DoH said.

Metro Manila had the highest number of cases with 2,079, followed by Rizal with 286, Cavite with 174, Laguna with 168 and Bulacan with 142.

Of the new deaths, 35 came from Metro Manila, 16 from Central Visayas, 13 from the Calabarzon region and six from Western Visayas.

Three deaths were reported from Eastern Visayas, two each from Central Luzon, Northern Mindanao and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), and one from the Bicol region.

More than 2.7 million people have been tested for the disease, the agency said.

Meanwhile, eight zones have been identified for COVID-19 vaccine clinical trials under the World Health Organization, Science and Technology Secretary Fortunato de la Peña told an online news briefing.

The areas were picked based on their transmission rate, he said, adding that there would be six zones in Metro Manila, one in the Calabarzon region and one in Cebu.

“Clinical trials in one zone can’t be doubled,” he said in Filipino. “Zones with high virus incidence have been picked.”

Mr. de la Peña said seven foreign companies had signed confidentiality agreements with the Philippine government on COVID-19 vaccine trials.

One of the companies came from Russia, which will soon test the Sputnik 5 vaccine in the Philippines next month. Other companies mentioned were from the United States, China and Australia, he said.

The Science and Technology department was reviewing these deals, Mr. de la Peña said.

DoH on Wednesday said coronavirus infections could surge in the coming days as laboratories play catch-up after it issued stricter rules on test result submissions, according to the agency.

The agency starting on Sept. 1 stopped accepting results without the complete address and phone number of the patient.

Because of this, there were confirmed cases that had not been reported and will come out once the information is complete.

The government earlier said it was looking at enforcing aggressive isolation measures and prohibiting home quarantine for coronavirus patients to bring down the infection rate further.

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.

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.

New cases peaked on Aug. 10 at 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

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

Piracy, other crimes rise in Asian waters

PIRACY and other crimes have surged in Asian waters in the first seven months of the year despite a coronavirus pandemic, many committed by a Philippine-based group linked to Islamic State, according to a report released on Wednesday.

Especially hard hit have been the Sulu Sea and coastal areas of the southern Philippines, according to the report by Babel Street, an open source data analysis company based in Virginia.

The author, McDaniel Wicker, a former US Air Force intelligence officer and a company vice president, said rising crime in that area carried significant security implications.

The Sulu Sea, he said, is a key shipping route and controlling crime there would require shifting regional security forces from other areas where they are also needed.

“There’s also a very serious global Islamic terror threat tied up in this,” Mr. Wicker said, referring to the Abu Sayyaf Group, which is based in southern Philippines and has links to Islamic State.

There have been at least 50 incidents of piracy, armed robbery and kidnapping for profit in Asian waters during the first seven months of 2020, the vast majority of them in the Sulu Sea and the Strait of Malacca, the world’s busiest shipping lane, Mr. Wicker said.

Those were double the numbers of such incidents recorded for the same period last year and represent the highest level since 2016, according to the report, citing data from a regional anti-piracy coalition.

The Abu Sayyaf Group was responsible for many attacks this year, it said. The rise in the group’s maritime activities has paralleled stepped up attacks in the nation’s south. An Aug. 24 suicide bombing killed 14 people, including security force personnel, it said. — Reuters

Justice department to reopen Pimentel probe for violation of lockdown rules

THE DEPARTMENT of Justice (DoJ) will reopen its investigation of an administration senator for violating quarantine rules at the height of the coronavirus pandemic, it said on Thursday.

The agency received a copy of a memo from the National Bureau of Investigation (BI) dated Aug. 24 regarding the case of Senator Aquilino L. Pimentel III, including an incident report submitted by the director of Makati Medical Center, Assistant State Prosecutor Wendell P. Bendoval said in an order.

“In view of the foregoing and in line with the policy of admitting all evidence that could assist in the judicious resolution of complaints, the preliminary investigation of this case is hereby reopened,” according to a copy of the order.

Government prosecutors ordered the parties including Mr. Pimentel to  comment on the memo by Sept. 21. The Justice department had submitted the case for resolution in July.

Mr. Pimentel tested positive for the coronavirus in March while he was at the hospital with his wife, who was then due to give birth.

The senator was accused of violating a law that required him to disclose his illness when he accompanied his pregnant wife to the Makati Medical Center. Violators of the law may be fined as much as P50,000 or jailed for six months.

The hospital earlier rebuked Mr. Pimentel for being reckless and irresponsible. He has apologized, saying he did not mean to harm anyone. — Vann Marlo M. Villegas

Gov’t may ease ban on health workers’ deployment — Roque

THE GOVERNMENT is studying a proposal to relax its deployment ban for health workers by allowing those whose contracts were signed as of August to leave the country.

Presidential spokesman Harry L. Roque told an online news briefing on Thursday he would bring this up to an inter-agency task force on the coronavirus and President Rodrigo R. Duterte himself.

Labor Secretary Silvestre H. Bello III this week said he wanted to ease the ban.

In an order dated April 2, the Philippine Overseas Employment Administration (POEA) suspended the deployment of doctors and nurses while the country was in a state of national emergency.

Also covered by the ban were microbiologists, molecular biologists, medical technologists, clinical analysts, respiratory therapists, pharmacists, laboratory and X-ray technicians, nursing aids, medical equipment operators, health supervisors and hospital equipment repair men.

POEA also suspended negotiations for government-to-government deployment of health workers.

It said the country’s health facilities, personnel and other resources were under severe strain due to the rising number of persons affected by the coronavirus disease (COVID-19), according to the order signed by Mr. Bello, who heads the POEA board.

Only medical professionals whose contracts were signed on or before March 8 were allowed to work overseas.

The Philippines was 290,000 short of health workers last year, which was aggravated by the migration of 13,000 health professionals, POEA said earlier, citing a Human Resources for Health Network report.

Foreign Affairs Secretary Teodoro L. Locsin, Jr. had said the deployment ban violates citizens’ right to travel. — Gillian M. Cortez

Regional Updates (09/10/20)

Quarantine facility

THE DEPARTMENT of Public Works and Highways turned over on Sept. 10 these 40-footer container vans that have been converted into a quarantine facility to the Armed Forces of the Philippines. Located inside  Camp General Emilio Aguinaldo in Quezon City, the facilty can accommodate 56 coronavirus patients. The P19.6 million cost was sourced from the  DPWH National Disaster Risk Reduction and Management Fund.

Trade, Labor, Transportation departments to draft guidelines on expanded mass transport

DETAILED GUIDELINES on increasing mass transportation, particularly in the National Capital Region (NCR), will be jointly drafted by three departments — trade, labor, and transportation, according to the Palace. Presidential Spokesperson Harry L. Roque confirmed on Thursday that the task force handling the coronavirus response approved the economic development cluster’s recommendation to expand mass transport through Resolution No. 69 dated September 7. The specifics, however, are still being finalized to ensure the observance of health standards as the economy reopens. Based on the resolution, more lanes and stops for buses and jeepneys will be set up in major routes. The resolution also approved service contracting of public utility vehicles to serve as partial subsidy to operators. — Gillian M. Cortez

Cebu province penalizes improper disposal of face masks

A FINE of as much as P5,000 or six months in prison, or both, will be imposed on those caught violating rules on the proper disposal of face masks as well as those not wearing one outside of residence in Cebu province. The provincial board approved on September 7 the ordinance defining the penalties as well as guidelines such as the mandatory provision of a separate garbage bin for disposable face masks in all public offices and business establishments. Households are also required to have a separate waste container for used masks. The ordinance applies to the six component cities of Cebu (Danao, Talisay, Toledo, Bogo, Carcar, and Naga) and 44 municipalities.

Nationwide round-up

American marine’s pardon could be for ‘broader national interest’  in COVID-19 vaccine, says President’s spokesperson

PRESIDENTIAL SPOKESPERSON Harry L. Roque said the absolute pardon given to Joseph Scott Pemberton, a US marine convicted in 2015 for killing a Filipino sex worker, could be tied to the President’s intent to have the country prioritized when a coronavirus vaccine is developed by the United States. Speaking in mixed English and Filipino during Thursday’s briefing, Mr. Roque said in his “personal opinion,” the decision of President Rodrigo R. Duterte is due to a “broader national interest” amid the global pandemic. Mr. Roque, who previously served as legal counsel for the victim’s family, reiterated that he sees nothing wrong with Mr. Duterte’s decision. Meanwhile, Mr. Pemberton’s release is already being processed by the Bureau of Corrections (BuCor), the agency said on Thursday. “BuCor is now in coordination with the relevant agencies that are involved in the process,” it told reporters via Viber. The Bureau of Immigration (BI) on Wednesday said it will deport Mr. Pemberton upon his release. A deportation order was issued in September 2015 in relation to the same incident, for which he was convicted for homicide and sentenced to six to 10 years in jail. Mr. Duterte pardoned him earlier this week after the victim’s family appealed a local court’s decision for his early release.

SC orders courts to hold bail hearings for 22 COVID vulnerable prisoners

BW FILE PHOTO

THE SUPREME Court directed trial courts to conduct bail hearings for 22 prisoners who sought release amid the coronavirus pandemic. The high court said the petitioners, considered vulnerable to the coronavirus disease 2019 (COVID-19), were charged with offenses punishable by reclusion perpetua and are not entitled to bail. In a statement, the SC public information office said the decision was rendered July 28, more than three months since the petition was filed in April. Their petition for bail should undergo hearings and receive evidence within trial courts. “Thus, the Supreme Court in treating the Petition as an application for bail or recognizance as well as Petitioners’ motions for other confinement arrangements, referred the same to the trial courts, where the respective criminal cases of the petitioners remain pending, and directed them to conduct the necessary proceedings and resolve the incidents immediately,” the information office said.  “The Supreme Court also considered the proceedings before it closed and terminated,” it added. The court noted that it is not the proper forum to tackle factual issues and that the proper venue are the trial courts. — Vann Marlo M. Villegas

Judiciary gets lawmakers’ support for additional P6.58B in 2021

THE JUDICIARY’S appeal for an additional P6.58 billion budget in 2021 received support from legislators during Thursday’s hearing at the House of Representatives. Supreme Court Administrator Jose Midas P. Marquez, presenting before the House committee on appropriations, said this amount is about half of the P12.34 billion turned down by the Department of Budget from their P55.88 million proposal. The judicial system has a P43.54 billion allocation under proposed national budget for next year. “Out of P12.34 billion variance, we only want to request this morning before the House for an additional P6.58 billion instead of the P12.34 billion initially included in the NEP (National Expenditure Program),” he said in mixed English and Filipino. The judiciary’s budget covers the Supreme Court and its attached lower courts, Presidential Electoral Tribunal, Court of Appeals, anti-graft court Sandiganbayan, and the Court of Tax Appeals. Cagayan de Oro City Rep. Rufus B. Rodriguez said he recognizes the comparatively small share that the judicial branch gets. “Our judiciary receives a small portion of our budget and a small percentage of our GDP (gross domestic product) compared to our Asian neighbors. We are always lagging behind because we fail to give the judiciary what it needs,” said Assistant Deputy Speaker and ACT Teachers Party-list Rep. France L. Castro. She said the variance in the proposed budget is “concerning” as courts need to have “new normal operations.” “A lower budget allocation for our judiciary system would mean a slower grind of justice,” she said. Deputy Minority leader and BayanMuna Party-list Representative Carlos Isagani T. Zarate, for his part, said court services must improve because these “serve as the last refuge of the people.” Mr. Marquez also noted that the proposed P43.54 billion cannot cover the salaries of the judges-at-large who will be appointed by President Rodrigo R. Duterte under Republic Act No. 11459, which took effect law last year. The law creates 100 positions for judges who will have “no permanent salas” and may be assigned by the Supreme Court as acting or assisting judges for Regional Trial Courts “as public interest may require.” — Kyle Aristophere T. Atienza

PhilHealth says missing OFW contributions ‘stolen’ by recruitment agencies

THE PHILIPPINE Health Insurance Corp. (PhilHealth), which has been under scrutiny by legislators and a task force created by the President for alleged anomalies, again clarified that the missing contributions from overseas Filipino workers (OFWs) were never remitted by recruitment agencies. “(T)he stolen contributions went to the pockets of involved liaison officers (of recruitment agencies) and not to anyone in PhilHealth,” the state insurer said in a statement released on Thursday. The OFWs were allegedly given fake receipts by the liason officers, making them believe that their contributions in 2015 were transmitted to PhilHealth. The agency also said it coordinated with the National Bureau of Investigation (NBI) in the same year and so far 16 cases against 16 recruitment agencies, including 11 liaison officers, have been endorsed for further investigation. Of the alleged P17.4 million missing funds, PhilHealth said it has verified and accounted for P1.2 million contributed by 531 workers.

Urban poor likely to increase in next year’s poverty survey

THE poverty survey, conducted every three years with the next one due in 2021, is likely to reflect a “temporary” uptick in urban poor, who were disproportionately affected by the pandemic, Socioeconomic Planning Secretary Karl Kendrick T. Chua said.

Mr. Chua told a Senate budget hearing that the projected range in 2021 for the poverty rate, which is known in official government statistics as poverty incidence, is 15.5% to 17.5%, indicating the possibility of a slight drop compared with the 2018 level of 16.7%.

He noted that before the pandemic, the government was projecting poverty rates to drop to about 14%.

“Our estimate right now is that it can go from 15.5 to 17.5%,” Mr. Chua said.

Poverty is measured every three years with the next assessment scheduled in 2021, he said.

Mr. Chua said the impact on the livelihood of the rural poor was not as severe.

“We might see a temporary worsening in the urban poverty where the pandemic and COVID and quarantine have affected their livelihood,” he said.

He said the government continues to address poverty by providing subsidies to low-income families.

“So hope that with the progress we’re making in the next two years we can still be on track to achieve the 14% or lower poverty incidence,” he said.

The unemployment rate rose to 17% in April during the height of the lockdown and fell to around 10% in July as lockdown measures eased, Mr. Chua said.

He added that the normal average unemployment rate is about 5% and NEDA (National Economic and Development Authority) projects the recovery to bring the rate to around 6 to 8% next year.

“So long as we continue relaxing the quarantine levels, the economy actually responds very quickly,” he said.

President Rodrigo R. Duterte kept Metro Manila, Bulacan, Batangas, and the cities of Tacloban and Bacolod under general community quarantine until Sept. 30.

Iligan City is under a stricter form lockdown while the rest of the country is observing modified general community quarantine. — Vann Marlo M. Villegas

Provinces asked to buy rice, corn from farmers

GOVERNORS of the top rice and corn producing provinces were encouraged to purchase the staples directly from farmers in order to help prop up farmgate prices during the harvest, with the Department of Agriculture pointing to the availability of government credit for such purchases.

In a statement, Agriculture Secretary William D. Dar asked Nueva Ecija, Isabela, Pangasinan, Cagayan, Iloilo, Camarines Sur, Tarlac, Negros Occidental, Maguindanao, Bukidnon, North Cotabato, and Leyte to help normalize prices of the two commodities.

Mr. Dar said the 12 provinces combined produced more than 9.74 million metric tons (MT) of palay last year, accounting for 51.8% of national output.

“Their direct procurement will significantly shore up the national average farmgate price of palay, thus helping more farmers,” Mr. Dar said.

According to Mr. Dar, provinces can apply for loans from the Land Bank of the Philippines (LANDBANK) for palay direct purchases and machinery procurement, including equipment for post-harvest facilities.

“We have been closely working with LANDBANK to provide accessible and affordable credit not only to farmers, fishers, and agripreneurs, but also to LGUs under the bank’s PAlay aLAY sa Magsasaka ng Lalawigan (PALAY ng Lalawigan) Program,” Mr. Dar said.

The program, which was launched in 2019, had initial funding of P10 billion and benefited farmers in Isabela, Nueva Ecija, and Camarines Sur.

Mr. Dar has directed the National Food Authority to make its warehouses available for the use of LGUs and farmers’ cooperatives and associations.

“As the country’s rice farmers start reaping this year’s main rice crop, we count on the continued support of our ‘food security czars’ in partnership with farmers nationwide. Directly buying their palay is a win-win situation — giving them reasonable income for their harvest and ensuring an adequate supply of rice for consumers in their localities,” Mr. Dar said.

During the third week of August, the Philippine Statistics Authority said the farmgate price of palay was at P18.39, while the farmgate prices of yellow and white corn grain were at P13.03 and P14.44, respectively. — Revin Mikhael D. Ochave

Gov’t debt seen rising to 14-year high by year’s end

GENERAL GOVERNMENT (GG) debt will likely be the equivalent of 46.7% of gross domestic product (GDP) by the end of 2020, the highest level in 14 years, as the government borrows more to fund its pandemic containment measures, the Treasury said.

National Treasurer Rosalia V. de Leon told a Senate budget briefing Thursday that the projection compares with the 2019 level of 34.1% of GDP.

If realized, this debt level would be the highest since the 49.3% posted in 2006, according to Finance department data.

“In 2020, our GG debt as a percentage of GDP (will be) about 46.7% and we will be in the middle of the pack against other ASEAN countries,” she said, citing estimates for Thailand at 49.5% of GDP and Malaysia at 65.5%.

Pandemic borrowing has reversed the declining trend of GG debt-to-GDP starting in 2017.

Fitch Ratings had forecast a debt-to-GDP ratio of 47.8% this year, 49.8% in 2021 and 50.1% in 2022.

The GG debt stock was P6.65 trillion last year. Of the total, 62% or P4.11 trillion was provided by domestic creditors.

GG debt is the outstanding debt of the national government, social security institutions and local governments less the intra-sector debt holding of government securities and the bond sinking fund.

Ms. De Leon said despite the increasing debt stock, much of the budget still goes to productive spending since interest payments as a share of revenue and expenditure remain low.

“Even our interest payments were not eating up a lot of our expenditure nor of our revenue. In the 70s, it was about 30% of our revenue and even our expenditure. But now, it’s just about 12% at most so we’re saying we can still channel a lot of our revenue and a share of our expenditure to productive spending like infrastructure and social services,” Ms. De Leon said.

She said interest payments are expected to account for 19% of revenue, and 11.9% of expenditure in 2021.

She said the debt stock will taper off once the government returns to fiscal consolidation and returns to a fiscal deficit of about 3% of GDP.

The outstanding debt stock hit P9.16 trillion at the end of July, two-thirds of it domestically sourced.

The government plans to borrow P3 trillion this year to plug its budget deficit, which is projected to hit 9.6% of GDP. — Beatrice M. Laforga

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