Analysts’ July Inflation Rate Estimates
HEADLINE INFLATION likely fell to a near six-year low in July due to softer prices of food and fuel, analysts said. Read the full story.
M&M
All-new BMW M5 and BMW M5 Touring debut in the Philippines
GET READY for more fahrvergnügen.
That’s the German word for driving pleasure, certainly seen to be the order of the day for BMW which has always been known as a car meant to be driven by the owner.
Last week, SMC Asia Car Distributors Corp. brought in two more reasons to look forward to hitting the road — congested or otherwise. The seventh-generation BMW M5 sedan and its twin, the third-generation BMW M5 Touring (essentially its estate version), have been unveiled — similarly priced at P12.79 million.
Significant for the two is the debut of an electrified power plant — the M Hybrid drive system — predicated on a 4.4-liter M TwinPower Turbo V8 engine “tuned specifically” for the M5. The high-revving (up to 7,200rpm) internal combustion engine is paired with an electric motor, said to generate power instantly, to ensure instantaneous response while producing a combined 727hp and astounding 1,000Nm of torque. The driver realizes the performance promises of the potent power plant through an eight-speed M Steptronic transmission. Top speed is a claimed 305kph with the M Driver’s Package.
In a release, BMW said it reinterprets the signature M high-performance car design. “A particularly high proportion of surfaces painted in body color and a black solid finish for the roof create a pure appearance to go with the familiar proportions of a Touring model. The all-new BMW M5 gets the M Carbon exterior package, which includes a carbon roof, mirrors and spoiler,” it explained.
Meanwhile, a model-specific side frame design features prominently flared wheel arches, muscular shoulders, and a long roofline to headline the “athletic appearance” of the M5 models.
Out in front, the M5s get large air intakes and a newly crafted BMW M kidney grille, which receives as standard the BMW Iconic Glow contour lighting. At the rear, slim rear lights extend into the car’s flanks, and vertical reflectors are positioned to the outer edges of the rear end and a two-section split diffuser with two pairs of exhaust tailpipes integrated to the left and right “emphasize the width and powerful stature” of the model.
A sports exhaust system “underscores the performance experience with a multi-faceted and emotionally enthralling engine note.” Electronically controlled, continuously adjustable flaps and the two pairs of dual tailpipes are the same equipment found in other M models.
IconicSounds Electric is the “acoustic accompaniment to the power delivery of the electric motor,” useful when the vehicle operates in all-electric mode. It additionally “generates an engaging track to highlight the arrival of extra electric power on top of the output from the V8 engine.”
All-electric performance can speed the BMW M5 models to a maximum of 140kph. Located low in the car, the high-voltage battery boasts 18.6kWh of usable energy for a pure-electric range of up to 69km for the sedan and a maximum of 67km for the Touring.
M xDrive provides a rear-biased setup “particularly pronounced” in 4WD Sport mode, although the driver can also opt for a 2WD mode. “This sends drive exclusively to the rear wheels with the DSC (Dynamic Stability Control) system switched off, which will appeal to experienced drivers who prefer a performance experience of the pure-bred variety.”
A new M Hybrid button allows the driver to select between Hybrid and Electric modes, with eControl mode used for “effective brake energy recuperation and maintaining battery charge at a constant level.” M Drive Professional “adds Dynamic and Dynamic Plus modes to the mix, which prime the drive system and cooling system to keep output at a constantly high level or generate short bursts of maximum output during committed track driving.”
Aside from an M-specific control panel on the center console, the “progressive sportscar cockpit” of the all-new BMW M5 and BMW M5 Touring features a new, flat-bottomed M leather-wrapped steering wheel with illuminated M buttons, M multifunction seats with a wide range of electric adjustment and the BMW Widescreen Display which, like the standard BMW Head-Up Display, includes M-specific content. BMW Live Cockpit Professional has the BMW Maps navigation system and Augmented View function on the control display.
“In the Philippines, M will always hold a special place in our heart… (as the M5) redefines expectations in the high-performance segment,” stated SMC Asia Car Distributors Corp. President Spencer Yu in a speech. The M5 models have “literally every option included, (while being) effectively approximately 20% lower priced than the previous M5” on account of the relief provided by government policy with regard to electrified vehicles. Mr. Yu hopes this brings in “a whole new customer segment” for BMW in the country.
Buyers of the M5 will also get a portable flexi charger, five-year/200,000-km comprehensive BMW warranty, and an eight-year/120,000-km warranty for the electric battery.
For more information, visit https://www.bmw.com.ph/models/bmw-m5-sedan/ and https://www.bmw.com.ph/models/bmw-m5-touring/ or follow BMW’s social media channels. — Kap Maceda Aguila
Investing in people’s health: SONA 2025 highlights healthcare reforms
In his fourth State of the Nation Address (SONA), President Ferdinand R. Marcos, Jr. underscored healthcare as a central pillar of national development, highlighting landmark reforms and programs designed to bring accessible, affordable, and equitable care to every Filipino.
A key focus of the President’s address was the mental well-being of Filipino youth. With growing concerns over bullying and depression in schools, he ordered the hiring of additional guidance counselors in public schools to ensure that students receive the psychological support they need.
The administration is also investing in early childhood development. President Marcos announced the allocation of P1 billion to establish Barangay Child Development Centers (CDCs) in 328 low-income barangays. These CDCs will serve as vital daycare hubs that monitor immunization, nutrition, and growth of children under six, while providing supplementary feeding.
“The top priorities are far-flung areas. And this is just the start,” the President said, vowing to address the lack of daycare centers.
To strengthen disease prevention and early intervention, the Department of Health (DoH) has been tasked to “fast-track its childhood immunization program” and ensure that all Filipino children are fully immunized as soon as possible. Complementing this directive is the launch of the YAKAP Caravan — short for Yaman ng Kalusugan Program Para Malayo sa Sakit. This enhanced version of PhilHealth’s Konsulta Program expands access to outpatient services, essential medicines, laboratory tests, and even cancer screening at accredited facilities.
Addressing the alarming rise in obesity rates, particularly among adults aged 20 and above, President Marcos encouraged Filipinos to embrace active lifestyles. He called on local government units (LGUs) to revitalize public parks and plazas and to organize activities such as sports competitions, fun runs, Zumba classes, and aerobics sessions.
To further promote wellness, the President called for an expansion of “Car-Free Sundays,” an initiative now practiced in several major cities including Metro Manila, Baguio, Cebu, Iloilo, and Davao. The Philippine Sports Commission (PSC) will also open its track and field ovals in Pasig City, Manila, and Baguio City to the public free of charge.
Improving access to urgent care was another top priority. The President reported that 53 Bagong Urgent Care and Ambulatory Services (BUCAS) centers have been established in 32 provinces. These intermediate healthcare facilities bridge the gap between rural health units and hospitals, offering services such as minor surgeries and diagnostic testing. Over a million Filipinos have already benefited from BUCAS services between March 2024 and March 2025.
Another milestone emphasized in the SONA was the enhanced PhilHealth (Philippine Health Insurance Corp.) benefit packages rolled out under the Marcos administration. Notably, the Z benefits package for kidney transplants was increased by more than 230%, from P600,000 to P2.1 million. In addition, the number of covered hemodialysis sessions has been raised from 90 to 156 annually, effectively covering the standard thrice-weekly dialysis regimen for a full year.
“For patients requiring dialysis, your thrice-weekly sessions and medicines are now free for the whole year. If a kidney transplant is needed, we have raised the coverage… and starting this year, PhilHealth will also cover health services and medicines after the kidney transplant,” the President said.
Other improvements to the PhilHealth Z benefits include coverage for major cardiac procedures such as heart valve replacements and post-surgical cardiac rehabilitation. PhilHealth has also raised coverage for severe dengue from P16,000 to P47,000 and for mild dengue from P10,000 to P19,500.
PhilHealth benefits for cataract surgery have significantly increased as well, from P16,000 to P80,000, expanding access to vision-restoring procedures for senior citizens and vulnerable groups. Persons with disabilities (PWDs) have also received added support, with PhilHealth now covering mobility devices like wheelchairs, walkers, and crutches, as well as rehabilitation services. The national government continues to shoulder PhilHealth premiums for all PWDs.
For cancer patients, the administration continues to implement the Cancer Assistance Fund (CAF), a DoH program mandated by the National Integrated Cancer Control Act (NICCA). The government has also earmarked an additional P1.7 billion for cancer medicines not yet covered by PhilHealth. President Marcos also affirmed support for human papillomavirus (HPV) vaccination, which helps prevent cervical and other HPV-related cancers.
A commitment reiterated by the President is the continuation of the Zero Balance Billing (ZBB) policy in DoH hospitals. Under this scheme, patients no longer need to worry about settling their hospital bills, as expenses for basic accommodation are covered in full by PhilHealth and government funds. This initiative ensures that patients and their families are not burdened by the financial complexities of healthcare access during critical times.
Through these sweeping reforms, President Marcos reaffirmed his administration’s vision of a healthier, more resilient Philippines. By addressing gaps in mental health, childhood care, disease prevention, and treatment affordability, the government is investing not only in people’s health but in the nation’s future.
Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines (PHAP). PHAP represents the biopharmaceutical medicines and vaccines industry in the country. Its members are in the forefront of research and development efforts for COVID-19 and other diseases that affect Filipinos.
Style (08/04/25)
Pomelo will open two stores in Manila
POMELO FASHION, a Southeast Asian omnichannel fashion platform, has partnered with the SSI Group and will open Pomelo’s first Philippine store at Glorietta, Makati, on Aug. 20, followed by a second store opening at Robinsons Place Malate on Aug. 28. The distribution partnership will also expand into e-commerce, with Pomelo already available on Zalora as of July, and soon to launch on Shopee. Founded in 2013, Pomelo is known for its chic style, digital-first approach, and signature “Tap.Try.Buy.” shopping experience. Popular across Thailand, Singapore, Indonesia, and Malaysia, Pomelo offers trend-driven and eco-conscious fashion through its “Down To Earth” initiative. Customers can shop via the app, website, or at physical stores. “The Filipino customer is fashion-forward, digitally connected, and values unique shopping experiences, which perfectly aligns with what Pomelo stands for,” said David Jou, chief executive officer (CEO) and co-founder of Pomelo, in a statement. “We’re thrilled to welcome Pomelo to Manila as part of the SSI Group’s commitment to bringing the best of global fashion to the Filipino market,” said Anthony T. Huang, president and CEO of the SSI Group, Inc., in the same statement. “Pomelo’s bold, trend-forward style and digital-first approach align perfectly with the evolving tastes of today’s modern consumers.”
Uniqlo, Disney mark Magic for All anniversary
UNIQLO and Disney Consumer Products are celebrating the 10th anniversary of Magic for All, a joint project that mixes clothing with the Disney, Pixar, Marvel, and Star Wars brands. Various anniversary projects to commemorate this milestone, including the reissue of classic designs, will be gradually rolled out from July 2025 through August 2026. Magic for All has presented special collections that can only be found at Uniqlo, featuring characters such as Disney’s Mickey Mouse and Minnie Mouse, and characters from other classic films and franchises such as Disney Princess, Marvel’s Avengers, Star Wars, Disney and Pixar’s Toy Story, and more. The archive collection will be available starting Aug. 4. Uniqlo will release a flannel Mickey Mouse stuffed toy reminiscent of the first Magic for All collection, and a Timeless UT collection, with reprints and redesigns of past shirts. In addition, Disney Art UT, with characters drawn by six notable artists, will be released on Aug. 4. View the collection at https://uniqlo.com/ph/en/special-feature/cp/ut/magic-for-all.
Rustans.com celebrates anniversary with promos
RUSTANS.COM marks its 6th anniversary celebration this August with online-exclusive deals, gifts, events, and prizes. Throughout the month, Rustans.com will unveil a series of curated online flash sale events across categories. There will be 30% off on selected clothing styles on Aug. 8, 25% off on selected beauty items on Aug. 22, and 25% off on selected home items on Aug. 29. The biggest event is Rustans.com’s Anniversary Sale weekend from Aug. 15 to 18, where customers can enjoy up to 60% off on selected items. An extra 10% off also awaits Rustan’s Frequent Shoppers Program (FSP) members and cardholders of Rustans.com’s bank partners when they spend at least P5,000 online during the Anniversary Sale. Rustans.com will also give a complimentary Maximus Toaster for online purchases of at least P50,000 from Aug. 15 to 31. Rustan’s FSP members will get exclusive access to the Anniversary Raffle. For every P10,000 single-receipt online purchase from Aug. 1 to 31, they earn a chance to win one of these prizes: the Grand Prize (P100,000 Rustans.com e-Gift Certificate), a Samsonite Apinex Spinner (Latte) Three-Piece Set, Breville Bambino Plus Black Truffle Espresso Machine and Breville Smart Grinder Pro, or a Maison Margiela Lazy Sunday Morning Collection. Customers will get Rustan’s signature gift wrapping even when they shop online. Packages can be received earlier with Rustans.com’s Same-Day/Next-Day Delivery service to selected Metro Manila locations, and FSP members get a lower minimum spend of P2,500 for free shipping and FSP points earning from online purchases. For details visit Rustans.com and follow @rustansph on Facebook and Instagram.
Careline launches Lip Lock Lacquer
CARELINE has released its Lip Lock Lacquer, described by the brand as a new line of high-impact lip colors. It is a gloss-meets-matte hybrid that delivers intense pigment, long wear, and a weightless feel. The lacquer sets to a matte finish but starts off with a nourishing shine, thanks to its Vitamin E-infused formula. The Careline Lip Lock Lacquer collection includes 12 shades: Reserved (tulipwood nude), Idealist (rosewood rogue), Visionary (salmon pink), Sensor (maroon), Diplomats (deep sangria), Doer (carmine red), Champ (magenta), Venturer (bright hibiscus), Extro (shadowy purple), Sponty (dark maroon), Intro (burnt burgundy), and Mastermind (nude). Careline Lip Lock Lacquer is available at P375 in all leading department stores, Watsons mall stores, and online via Shopee, Lazada, and TikTok Shop.
Australia eyes more US exports as Trump holds tariffs at 10%
SYDNEY/WELLINGTON — Australian products could become more competitive in the US market, helping businesses boost exports, Trade Minister Don Farrell said, after US President Donald J. Trump kept the minimum tariff rate of 10% for Australia.
Mr. Trump set higher import duties of 10% to 41%, starting in seven days for 69 trading partners, including a duty of 35% on many goods from Canada, 50% for Brazil and 15% for Australia’s south Pacific neighbor New Zealand.
“What this decision means in conjunction with all of the other changes to other countries is that Australian products are now more competitive into the American market,” Mr. Farrell told reporters in Adelaide.
“We will assist all of our exporters in ensuring we take advantage of this situation and increase the volume of exports.”
New Zealand Trade Minister Todd McClay said he was hoping to have talks with his US counterparts.
“I am seeking an urgent call with the US Trade Representative to make New Zealand’s position clear: this increase risks harming exporters and consumers of both countries,” he said in a statement.
US firms now face an average tariff of 0.8% when exporting to New Zealand, Mr. McClay said.
New Zealand exports about NZ$9 billion ($5.29 billion) of goods each year to the United States, its second largest market after China, meaning the increase would be “considerable” for exporters, he added.
Mr. Trump’s decision to put Australia among countries facing the lowest tariff levels will be a relief for Prime Minister Anthony Albanese after the opposition criticized him for not meeting the US President in person.
But Mr. Farrell said Australia’s negotiations helped it to retain the baseline tariff rate.
“This is a vindication for the Albanese government and particularly the prime minister in the cool and calm way we have conducted diplomacy with the United States,” Mr. Farrell said.
Australia last week eased restrictions on beef imports from the US, potentially smoothing trade talks with Mr. Trump, although Mr. Albanese said the decision had long been considered and was not related to any trade negotiations. — Reuters
EDC plans 90-MW expansion of Bac-Man geothermal complex
RENEWABLE ENERGY firm Energy Development Corp. (EDC) is looking to expand its existing Bacon-Manito (Bac-Man) geothermal complex with an additional 90 megawatts (MW) of capacity.
EDC President and Chief Operating Officer Jerome H. Cainglet said the company is evaluating the opportunity based on the results of its resource assessment.
He said the planned expansion may be pursued within the next five to six years, and the development could take up to three years.
Excluding expenses related to drilling activities, the official said developing a geothermal facility would require around $6 million per MW.
The Bac-Man Geothermal Power Plant sits on a 25,000-hectare geothermal reservation spanning Bacon, Sorsogon City, and Manito in Albay.
The complex consists of two steam power generating plants with a combined capacity of 150 MW.
Adding to this is the recently inaugurated P7-billion Tanawon Geothermal Power, which can produce 22 MW of capacity.
Completed over 27 months, the geothermal facility is expected to generate 159,000 megawatt-hours of electricity, contributing to the country’s baseload renewable energy capacity.
“Tanawon’s inauguration is not only a proud achievement for First Gen and EDC, but also a win for the country’s energy security and climate resilience journey. We dedicate it to our communities, government partners, and everyone committed to a decarbonized, regenerative future,” Mr. Cainglet said.
For this year, EDC is targeting to commission four of its growth projects, including the 28-MW Mahanagdong Binary Geothermal Power Plant in Leyte and three battery energy storage systems projects totaling 40 megawatt-hours.
EDC, the renewable energy arm of Lopez-led First Gen Corp., has an installed capacity of 1,480.19 MW, representing around 20% of the country’s total installed renewable energy capacity.
Since 1976, EDC has led the exploration, development, and operation of geothermal energy, resulting in the development of geothermal power facilities across Bicol, Leyte, Negros Island, and Mindanao.
EDC has earmarked up to P30 billion for the drilling of 40 new wells through 2026. — Sheldeen Joy Talavera
Q&A: ‘There will still be a need for all powertrains’
BMW Group Asia Managing Director Lars Nielsen gives us the near-term plan
By Kap Maceda Aguila
THROUGH ITS M performance line, BMW has been transforming “regular cars” into racetrack-capable ones that are also appropriate for the everyday drive. That’s according to BMW Group Asia Managing Director Lars Nielsen — in town recently for the local launch of the M5 sedan and its station wagon or estate version, the M5 Touring.
The M with its myriad of values has been doing well, he averred. “We’re very happy with the results coming out in terms of sales… obviously, that’s the ultimate way to measure whether what we’re doing is right or wrong,” Mr. Nielsen told members of the media and content creators at the RSA Greenhills showroom in San Juan City. “The first six months of 2025 are the best six months that BMW M has ever had. In six months, we have delivered more than 100,000 BMW Ms all around the world. That’s growth of 6.5% versus last year.”
He acknowledged the good work that authorized BMW importer and seller SMC Asia Car Distributors Corp. has been doing as well. He said the company has been “closing in” on double-digit percentage share in terms of sales.
Here are excerpts from our exclusive interview with Mr. Nielsen:
VELOCITY: BMW in the Philippines previously introduced the plug-in hybrid versions of the X5 and X3. What are you seeing in the region in terms of receptiveness to PHEVs or behavior toward EVs?
LARS NIELSEN: Well, (there’s) a wide array, honestly, of both take-ups and take-up rates. Depending on which country, which market you’re in, the demand for full-electrics, for plug-in hybrids, or for combustion engines are all different. Obviously, it relates a lot to the legislation that is in place, if there are incentives in place, how the charging infrastructure looks like, etc. I think some of the key components that we are putting an emphasis on is, if there is a demand for it we would like to deliver.
BMW has not decided on a specific drivetrain technology. We say the whole world is a complex place. There will be a need for all drivetrain options as we go forward, (for) quite a while still. Therefore, we’re committed to being able to deliver this. What there is demand for, we will deliver. Maybe that’s what you are referring to. What you see now, the full electric format in the Philippines is taking a little bit of a step backward. Now, it’s the plug-in hybrids that are coming forward, because there was a change in regulations, right… then the demand changed in the market. We can fulfill that.
In Singapore, it’s the other way around… the demand is for full electric, because that’s the structure that is put in place. But while there’s a demand for full electric, there’s still slightly more demand for combustion engines; the balance in Singapore these days is a little more than 40% for full electrics and a little less than 60% for internal combustion engine units.
What about for countries outside of Singapore and the Philippines? What’s the skew like? In the Philippines, at least, we are seeing an uptick in the number of PHEV products. Brands are taking advantage of, as you said, legislation and government relief now expanded to other electrified options in order to make these vehicles more affordable, if you will.
So they say we’ve had a very good run with electric cars in Indonesia, for example, over the last few years. That’s been a path that we have pursued. Vietnam, meanwhile, actually has incentives in place for electric mobility. They are currently aiming for full electric vehicles. The take-up in the market though is not so big.
Again, (the appetite for electrified vehicles) really varies from market to market, from country to country. What is out there? Then sometimes government (policy) changes. We are going right, then we’re going left, then we’re going straight, and then we’re going backwards. It’s a little bit of a mix, which is why I think we’re very happy with the strategy we have here. We deliver a car and then there are multiple drivetrain options.
So there’s no shoe-horning of certain products into markets?
No, no, no. And I would underline it with the change that we have made here in the Philippines. When the plug-in hybrid regulation came into place last year, we said okay, all right, thank you.
So are we going to see more of these powertrains from BMW in the Philippines?
Yes, but I would correct your question, to make it more fitting to the purpose. Okay, we will introduce more new vehicles with multiple powertrain options. Again, the philosophy or the strategy of the BMW Group is not to let the powertrain be the decisive point. Yes, we think we make really cool cars, whatever the powertrain.
So if a customer goes into a BMW Philippines showroom, there will be various powertrain options? Is it about providing choices?
We would always be aiming for a logic that says, okay, if there are 1,000 customers then 999 are looking for a combustion engine, and one customer that looks for a full electric, then there will be a bit of economies of scale that we need to (take a look at) here as well. That in the end will need to go. But in general terms, the demand in the market is what we would be looking to satisfy.
Peso may rise as jobs data boost Fed hopes
THE PESO may continue to rise against the dollar this week following weaker-than-expected US jobs data released on Friday, which bolstered hopes for a September rate cut by the US Federal Reserve.
On Friday, the local unit closed at P58.145 per dollar, jumping by 17.5 centavos from its P58.32 finish on Thursday, data from the Bankers Association of the Philippines showed.
However, week on week, the peso dropped by P1.35 from its P57.11 close on July 25.
“The dollar-peso initially ran to highs of P58.63 on increased hawkish US Federal Reserve data because of the higher-than-expected core consumer price index… However, caution ahead of tariff announcements and nonfarm payrolls data caused it to hit lows of P58.13,” a trader said in a phone interview on Friday.
“The BSP (Bangko Sentral ng Pilipinas) signaled lately that it has room to intervene in the foreign exchange market during big and sudden foreign exchange moves that may have impact on inflation. As a result, the US dollar-peso exchange rate corrected lower,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For this week, the peso’s movement would depend on the US jobs report released on Friday, the trader said. The trader sees the peso moving between P57.90 and P58.40 per dollar this week, while Mr. Ricafort expects it to range from P57.85 to P58.35.
US employment growth was weaker than expected in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labor market conditions that puts a September interest rate cut by the Federal Reserve back on the table, Reuters reported.
The Labor department’s closely watched employment report on Friday also showed the unemployment rate rose to 4.2% last month as household employment declined.
Nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, the fewest in nearly five years, the Labor department’s Bureau of Labor Statistics (BLS) said.
Payrolls for May were slashed by 125,000 to a gain of only 19,000 jobs. The BLS described the revisions to May and June payrolls data as “larger than normal.”
The Federal Reserve on Wednesday left its benchmark interest rate in the 4.25%-4.5% range. Fed Chair Jerome H. Powell’s comments after the decision undercut confidence the central bank would resume its policy easing in September as had been widely anticipated by financial markets and some economists.
Financial markets now expect the Fed to resume its monetary policy easing next month after pushing back rate-cut expectations to October in the wake of Wednesday’s policy decision. — A.M.C. Sy with Reuters
How PSEi member stocks performed — August 1, 2025
Here’s a quick glance at how PSEi stocks fared on Friday, August 1, 2025.
Stocks to move sideways before inflation, GDP
STOCKS could move sideways this week as investors await the release of the latest Philippine inflation and gross domestic product (GDP) data.
On Friday, the bellwether Philippine Stock Exchange index (PSEi) ended its six-day slide as it rose by 0.85% or 53.40 points to close at 6,306.13, while the broader all shares index went up by 0.39% or 14.76 points to end at 3,751.67.
Week on week, however, the PSEi was down by 1.67% or 107.05 points from its 6,413.18 finish on July 25.
“A late-week rebound proved insufficient to reverse the sustained market selloff, heavily influenced by lingering caution following the State of the Nation Address (SONA) and mounting anxieties over new US tariff rates on Philippine exports,” online brokerage 2TradeAsia.com said in a market note.
“The local market has been on a six-day decline, which was only snapped last Friday on bargain hunting. Bearish sentiment took over last week amid investors’ dismay over the recent SONA, uncertainties on the Federal Reserve’s policy outlook, and worries on global trade. With last week’s fall, the market is now back to the 6,150-6,400 trading range,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.
For this week, the market will focus on the July inflation report to be released on Tuesday (Aug. 5) and the second-quarter gross domestic product data that will come out on Thursday (Aug. 7), Mr. Tantiangco said.
“A well contained inflation figure and a GDP growth print significantly faster than the prior quarter’s 5.4% may give the market a boost.”
Mr. Tantiangco added that investors will monitor the peso’s movement against the dollar after the local unit fell to the P58 level anew last week.
“A rebound of the local currency may also help the market, but a further depreciation may also bring the market lower,” he said. “Finally, investors are expected to watch out for further second quarter corporate reports.”
Mr. Tantiangco said the market is expected to continue its decline if there are no positive catalysts this week. “The market is exhibiting a bearish bias, forming a lower high and lower low when compared to July 14’s peak and July 17’s trough. With its six-day decline, the bourse has fallen below its 10-day, 50-day, and 200-day exponential moving averages. Its moving average convergence/divergence line is moving downwards below the signal line.”
2TradeAsia.com put the PSEi’s immediate support at 6,300 and resistance at 6,600.
“Navigate this week with a tilt toward quality, defensive plays to hedge inflation risks, while eyeing selective consumer plays for momentum and second quarter tailwinds,” it said.
“Stay nimble as global data drops could sway sentiment, while prudence remains paramount, with thin trading volumes expected during the Chinese Ghost Month.” — Revin Mikhael D. Ochave
SC Malampaya ruling expected to boost investor confidence
THE SUPREME COURT (SC) ruling confirming that the income taxes of private contractors in the Malampaya natural gas project are included in the government’s share of proceeds is expected to reassure investors, according to the Department of Energy (DoE).
“We’re happy that the issue has been resolved because it gives stability and security to our investors,” Energy Secretary Sharon S. Garin said in an interview last week.
Ms. Garin said that the decision could attract more exploration investment.
In a decision dated July 30, the SC overturned the charges against Shell Philippines Exploration B.V., Chevron Malampaya LLC, and state-run PNOC Exploration Corp. for unpaid taxes.
In 1990, the government awarded a service contract to the Shell Philippines, Chevron, and PNOC for the Malampaya project. Under the contract, the contractors are required to remit 60% of the project’s net proceeds to the government.
While they were exempt from all taxes except income tax, the contract included a tax assumption provision, specifying that their income taxes from 2002 to 2009 would be covered by the government’s share.
Following a post-audit, the Commission on Audit (CoA) found that over P53 billion in income taxes had been deducted from the government’s share. The agency argued that contractors were liable for these taxes due to the absence of an express legal provision that states that their income taxes should be part of the government’s share.
While the case was pending, the International Chamber of Commerce issued an arbitral award affirming the validity of the tax assumption provision in the service contract.
The SC reversed the CoA’s ruling citing Presidential Decree (PD) No. 87, or the Oil Exploration and Development Act, which says that income taxes paid by or on behalf of petroleum contractors form part of the government’s guaranteed 60% share of net proceeds from petroleum operations.
It said that the law seeks to encourage private investment in petroleum exploration by allowing the government to assume contractors’ income tax obligations.
This is stated in PD 1206 and PD 1459, which confirm that the state’s share includes all taxes.
The SC said that the tax assumption clause under the Malampaya contract does not constitute a tax exemption as the government assumes the obligation. — Sheldeen Joy Talavera