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Philippines seeks help for stranded migrant workers

The Department of Foreign Affairs (DFA) has sent note verbales asking other countries to help stranded Filipino seafarers amid a coronavirus pandemic that has sickened more than 30 million and killed 950,000 people worldwide.

The agency asked that Filipino seamen be allowed to dock at their ports and disembark, Foreign Affairs Undersecretary Brigido D. Dulay said at an online briefing on Friday.

The note verbale also sought assistance from these countries to help bring home the Filipino workers, he said.

Mr. Dulay said 127 Filipino seafarers have applied for repatriation, based on reports from Philippine embassies and consulates worldwide.

Meanwhile Senator Risa N. Hontiveros-Baraquel said DFA should ask Japan to continue rescue operations for 36 Filipino seamen whose cargo vessel sank on Sept. 2.

In a letter to Foreign Affairs Secretary Teodoro L. Locsin, Jr., the lawmaker said the agency should push the Japanese government to continue and expand search and rescue efforts.

“I recognize the valuable work DFA has done in keeping the families abreast of developments vis-à-vis search and rescue operations, but I also understand the desperation, frustration, and helplessness the families must be feeling during this difficult period,” Ms. Baraquel said in the letter dated Sept. 17. — Charmaine A. Tadalan

Court asked to void anti-terror law

Development and humanitarian workers have asked the Supreme Court to void the law that expanded terror crimes in the country.

Coordinating Council for People’s Development and Governance, Inc. led the plaintiffs that also included Kalikasan People’s Network for the Environment, Unyon ng Manggagawa sa Agrikultura, and Ibon Foundation, Inc.

In a 95-page pleading, the petitioners said the Anti-Terrorism Act will “seriously hinder” them from continuing development work because it legitimizes harrasments experienced by many of its members, some of whom have been tagged as communists, abducted and summarily executed.

They said attacks on civil society have grown during the pandemic and even humanitarian relief groups aiding in the health crisis had been detained.

“With R.A. 11479 in effect, the CPDG expects more violations of human rights taking place with warrantless arrests and crackdown on activists and red-tagged groups,” according to a copy of the lawsuit. — Vann Marlo M. Villegas

2019 state spending on environment rises

Government spending on environmental protection increased last year from a year earlier, according to data from the Philippine Statistics Authority.

But expenditures on climate change and disaster risk mitigation projects declined, data showed.

Annual government environmental protection expenditure last year reached P24.608 billion, 9.1% more than in 2018.

Government spending on climate change and disaster risk mitigation projects declined by 12.6% to P242.563 billion. — Jobo E. Hernandez

European lawmakers want to revoke Philippine trade perks over rights abuses

By Arjay L. Balinbin, Senior Reporter and Jenina P. Ibañez, Reporter

The European Parliament on Thursday voted to revoke tariff perks enjoyed by Philippine products due to human rights violations under President Rodrigo R. Duterte.

In a resolution posted on the European Parliament’s website, the lawmakers cited the “seriousness of human rights violations in the country.”

They called on the European Commission to immediately start the procedure for the temporary withdrawal of GSP+ preferences enjoyed by the Philippines given the government’s failure to improve the human rights situation.

The Philippines has been enjoying “enhanced trade preferences” under the EU’s GSP+ or Generalized Scheme of Preferences Plus since December 2014.

It is one of just eight countries with such perks, the others being Armenia, Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Pakistan and Sri Lanka.

A quarter of Philippine exports to the EU last year or almost 2 billion euros received preferential treatment under the scheme, according to the resolution.

It said 626 European lawmakers voted to revoke the perks, seven disagreed and 52 abstained.

The GSP+ is an incentive agreement in which 6,274 Philippine products enjoy zero-tariff entry to the European Union provided the country follows the 27 core international conventions that include human and labor rights, environmental protection and good governance.

Among the human rights issues cited by European lawmakers was the conviction of Maria A. Ressa, founder of news website Rappler and former researcher Reynaldo Santos, Jr. for cyber libel.

They also cited Mr. Duterte’s war on drugs that has killed at least 8,663 people, the denial of the application for a legislative franchise of ABS-CBN Corp., which is critical of the Duterte government.

The lawmakers also cited the detention of opposition Senator Leila M. de Lima, which it described as “politically motivated,” and the killing of 43 land rights defenders last year.

“The Parliament expresses its deepest concern at the rapidly deteriorating human rights situation in the Philippines under President Rodrigo Duterte,” according to a copy of the resolution.

It called on the government “to implement all the recommendations outlined by the United Nations High Commissioner for Human Rights to address a range of serious issues, such as the widespread and systematic killings related to the authorities anti-drug campaign.”

“The Parliament is further alarmed about the deteriorating level of press freedom in the Philippines, and condemns all threats, harassment, intimidation, unfair prosecutions and violence against journalists, including in the case of Maria Ressa,” the lawmakers said. “All politically motivated charges against her and her colleagues should be dropped.”

Trade Secretary Ramon M. Lopez in a statement said the government has been working closely and fully cooperating with the EU Commission.

“We have an inter-agency working group in place that attend to the regular monitoring visits and respond accordingly to various issues if and when they are officially raised by the EU Commission,” he said. “The EU Commission has a mechanism in place and process to follow to verify issues before sanctions are imposed.”

He said the government had been able to explain its side “and we don’t see any reason why our GSP+ privilege will be withdrawn.”

“It is quite unfair that they’re probably basing their reaction on the basis of the advocacy of mostly opposition groups,” Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis Jr. said by telephone.

“There’s really not much to lose because we have not really fully utilized the European GSP+.”

Q2 current account swings to surplus

By Beatrice M. Laforga, Reporter

The country’s current account swung to a $4.4-billion surplus last quarter from a year earlier after the trade in goods deficit narrowed amid a coronavirus pandemic, the Philippine central bank said on Friday.

“The current account posted a surplus, a turnaround from the previous year’s deficit, attributed mainly to the narrowing of the deficit in the trade in goods account,” BSP said in a statement.

“This may be attributed to disruptions in the global demand and supply chains as countries imposed restrictions to contain this health crisis, which negatively impacted the country’s exports and imports of goods,” it added.

The surplus was a turnaround from the $931-million deficit in the second quarter of 2019 and higher than the $92-million surplus in the first quarter, according to data from the Bangko Sentral ng Pilipinas (BSP).

The trade in goods deficit fell to $5.4 billion in the second quarter, which more than offset the lower net receipts of trade in services at $2.7 billion from $3.3 billion a year ago.

Primary income also fell to $1 billion from $1.2 billion a year earlier, while secondary income dropped to $6.1 billion from $6.7 billion, it said.

This brought the first-half total to a $4.4 billion surplus, compared with a $2.6-billion deficit a year earlier.

The current account shows the country’s economic interaction with the rest of the world. It includes trade in goods and services, remittances from migrant Filipino workers, profit from Philippine investments overseas, interest payments to foreign creditors, and gifts, grants and donations to and from abroad.

The BSP’s Monetary Board in June projected the current account deficit narrowing to $1.9 billion by year’s end, from a previous forecast of $8.4 billion. The country posted a current account deficit of $464 million last year that accounted for 0.1% of economic output.

Meanwhile, the country’s balance of payments (BoP) surplus rose to $4.2 billion in the second quarter from $991 million a year earlier. The payment surplus posted a $68-billion deficit in the first quarter.

The BoP measures the country’s transactions with the rest of the world at a given time. A deficit means more funds left the economy.

The year-to-date BoP surplus stood at $4.1 billion from $4.8 billion in the first half of last year.

The central bank might change its outlook for the balance of payments this year, now at a $600 million surplus or 0.2% of GDP, BSP Deputy Governor Francisco G. Dakila told a news briefing on Friday.

“We will be looking at the outturn of the BoP for the second quarter and we will be revising our outlook based on the latest information,” he said. “Given that the situation is highly uncertain, you can expect more frequent updates on the outlook.”

The BoP hit a $7.843-billion surplus last year.

“BoP surplus is good in the sense that it calms down the foreign exchange market in the midst of a very uncertain global environment,” Mr. Dakila said. “On the other hand, we have to look at what is the source of the surplus,” he added.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort traced the current account surplus last quarter to sluggish imports, a narrowing trade deficit and a faster pickup in dollar remittances.

Cash sent home by migrant Filipijnos rose to a seven-month record of $2.783 billion in July, the second straight month of growth after months of slump during the strict lockdown.

BSP fully awards P20-B bills at maiden auction

By Kathryn Kristina T. Jose

The Bangko Sentral ng Pilipinas (BSP) fully awarded P20 billion worth of short-term debt instruments at a maiden auction on Friday, a move that would allow it to better manage cash circulating in the financial system.

Yields remained tolerable, with more investors channelling some of their funds to other financial options and as markets remained awash with cash.

The central bank awarded the 28-day bills at 1.75% to 1.8600%, while the weighted average rate reached 1.8355%. Total bids for the P20-billion borrowing was twice oversubscribed at P43.360 billion.

The central bank earlier said it would sell its own securities as an additional tool to manage liquidity. The auction volume would start small and would be gradually increased based on market response and consistent with the liquidity forecast.

The bills would have the same tenor as its 28-day term deposit papers, which will be auctioned off every Wednesday.
“They will be offered simultaneously at first, but on different days,” BSP Governor Benjamin E. Diokno said. “Eventually, the 28-day term deposit facility will be phased out.”

Friday’s auction results reflected the bigger market share for the central bank’s term deposit papers, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a mobile phone message.

“The 28-day term deposit facility offering on Wednesday may have sapped some of the demand that would have otherwise gone to the 28-day securities offered on Friday,” he added.

The bills still attracted a good chunk of the markets because total bids were more than double the programmed offer, he said.

The BSP bond yields reached levels as the rates on term deposit papers as the markets remain liquid.

“Given that the market is flush with liquidity while the BSP issuance remains relatively low compared with excess liquidity, we are not expecting an impact on market sentiment or activity,” said Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila.

He said he expects more bond offers from the central bank as it tries to mop off excess market liquidity.

“BSP will continue to issue its own securities as it looks to gain operational experience in the near term but look for the central bank to increase its offer size and mix up the length of tenors when the BSP finally needs to siphon off excess liquidity,” Mr. Mapa said.

Domestic liquidity or M3, which is considered to be the broadest measure of money supply, rose by 14.5% in July from a year earlier.

Philippines external debt rises as of June

The country’s outstanding foreign debt rose by 7.4% as of June from the previous quarter after the government borrowed to beef up its war chest against the coronavirus pandemic, according to the Philippine central bank.

The debt remained at prudent levels, it added.

The external debt stock hit $87.45 billion as of end-June, which was 4.6% higher than the end-December 2019 level of $83.618 billion, the Bangko Sentral ng Pilipinas said in a statement on Friday.

It traced the quarterly increase maitly to National Government foreign borrowing worth $2.4 billion last quarter. External debt refers to all types of borrowings by residents from nonresidents.

“Key external debt indicators remained at prudent levels,” BSP Governor Benjamin E. Diokno said.

The debt service ratio, which relates principal interest payments to exports of goods and receipts from services and primary income and measures the adequacy of foreign exchange earnings to meet due obligations, rose to 7.8% in the first half from 7.7% a year ago.

“The debt service ratio has consistently remained at single-digit levels,” the central bank said.

As a share of gross domestic product (GDP), the total external debt stock climbed to 23.7% from 21.4% in the first quarter as the economy shrank by 16.5% last quarter while foreign debt increased.

The debt stock of the private rose by 0.55% to $36.5 billion, causing its share of the total debt stock to decline to 41.7% from 44.6%.

“At this point, the government is the one entity, economic actor if you will, relied upon by the economy to prop up economic activity and support economic recovery,” Ruben Carlo O. Asuncion, chief economist at the UnionBank of the Philippines, Inc., said in a Viber message.

“It is hard for me to imagine a private-sector-led economic recovery, especially in this unprecedented health and economic crisis. The government should lead the way,” he added. — Beatrice M. Laforga

D&L Industries sees half of sales to come from export business

D&L Industries, Inc. has maintained the growth of its export business, which the head of the listed maker of coconut-based products aims to account for half of total sales in the long run.

“The company’s export business continues to show resilient growth amidst adversities in the domestic market,” D&L Industries President and CEO Alvin D. Lao told stockholders on Friday.

In the second quarter, the company’s export sales expanded by 41% year-on-year, helping raise its first-semester export sales by 25%. The segment’s share in its total revenues stood at a “record high” of 31% in the quarter and 26% in the first-half period.

Coconut-based products mainly contributed to the growth of its export business as these continue to gain traction in the global market due to its perceived natural antiviral, antibacterial, and antifungal properties.

“Our long-term target is for export sales to account for 50% of our total sales,” Mr. Lao said.

D&L Industries, which manufactures products ranging from food ingredients to chemicals and raw materials for plastics, is geared to open its Batangas plant by end-2021. The facility comes as an aid to its growing export business in the food and oleochemicals segments.

“This will be instrumental in our future growth as we plan to develop more high value-added coconut-based products and penetrate new international markets,” the company’s chief said.

Meanwhile, D&L Industries announced it will be releasing about P1.3 billion in cash dividends to its shareholders.

During the company’s virtual annual stockholders meeting, it declared a regular cash dividend of P0.183 per share to be paid starting on Oct. 28.

Its 2020 dividend represents a 3.3% yield, based on its closing price of P5.59 on Thursday.

“Despite the currently challenging environment due to the pandemic, management remains highly committed to its dividend policy of a 50% payout ratio based on the previous year’s net income,” the company said in a separate statement.

Year-to-date, D&L Industries posted a 43% drop in net income to P802 million with net sales falling by 8% to P10.17 billion.

Restaurant closures since March led to the decline in the income share of its primary food business, dropping by 60% over a year ago. Other segments, such as oleochemicals and specialty plastics, recorded decreases in contribution by 35% and 37%, respectively.

Only its aerosols business showed growth with net profit increasing by 20% on rising demand for disinfectants due to virus concerns.

“[M]anagement is confident that the company’s operations will continue to be profitable even in a protracted economic recovery scenario given its robust balance sheet and operational resilience, with net gearing at only 8%,” it said.

On Friday, shares in D&L Industries dropped by 1.61% to close at P5.50 each. — Adam J. Ang

Phoenix gas venture targets local industries for ‘clean’ generators

A gas partnership of Phoenix Petroleum Philippines, Inc. is aiming at local industries to market United States-made “clean” generator sets.

Phoenix Pilipinas Gas and Power, Inc. (PPGPI), together with American firm Mesa Natural Gas Solutions, LLC., has started powering a private-run resort in the Quezon province with liquefied petroleum gas-fired (LPG) gensets, the listed oil firm said in a disclosure, Friday.

“The aim is to ultimately replicate such solutions later on in industries that are generating and using their own power in the fields of manufacturing, hospitality and leisure, construction, telecommunications, and mining,” Phoenix President Henry Albert R. Fadullon said.

Phoenix’s LPG business drove its second-quarter performance, with an 88% growth across the Philippines and Vietnam markets, as locked-down families relied more on the use of the gas product in preparing home-cooked meals.

The independent oil retailer said once the country starts to receive imported liquefied natural gas (LNG), there could be a large market for the gensets, which can run on various gas sources, among independent power producers and electric cooperatives that seek more viable energy solutions.

The gensets, it claimed, can bring down greenhouse gas emissions of its user, while also providing a continuous supply of power, especially in off-grid areas.

“Compact and mobile, the units are custom-engineered for use in remote areas, and are expected to cater to power-generation needs of more communities in the Philippines,” the company said.

Balesin Island Club, an exclusive resort in Polillo town, has received the three Mesa gensets – each having a maximum 350-kilowatt capacity – which arrived in the country in June. It is now gradually returning to full operations with the easing of quarantine policies. The island resort of businessman Roberto V. Ongpin was cited for innovative tourism and sustainability by the United Nations World Tourism Organization in 2017.

In December 2019, Phoenix and Mesa started their partnership in augmenting gas consumption in the Philippines, especially LPG, which is touted as a transition fuel that can bring cleaner and more efficient fuels, like LNG. This makes the gensets a practicable alternative to fossil fuel-run generators, the company said.

Shares in Phoenix inched up 0.18% to close at P10.98 apiece on Friday. — Adam J. Ang

Phinma’s parent raises stake in holding firm

Philippine Investment Management (Phinma), Inc. has purchased more shares in its listed holding firm.

Phinma Corp. told the stock exchange on Friday that its parent raised its shareholdings in the company to 60.83% after acquiring 28.238 million of its shares, or about 10% of its total issued and outstanding shares, through a block sale.

The share purchase followed the completion of Phinma Corp.’s P400-million investment in its construction unit Philcement Corp. on Sept. 1.

Phinma is helping to expand its construction segment, which has a cement facility in Bataan that produces two million tons of cement annually.

In the first six months of the year, Philcement’s performance offset Phinma’s income decline, contributing P224.2 million. It posted record sale of 4.22 million bags of cement in June when construction activities resumed with the easing of quarantine policies. This lifted its revenue by 63% to P2.37 billion.

Phinma, which is also engaged in education, housing, hotels, and strategic consultancy, incurred a net loss of P38.28 million in the first half of 2020, largely attributed to the impact of the global coronavirus disease on its operations.

On Friday, shares in Phinma fell by 2.86% to close at P8.49 each. — Adam J. Ang

Lima Water assures Batangas customers of enough water supply

ABOITIZ-unit Lima Water Corp. assured that there is enough water supply to meet the demands of 117 industrial manufacturing companies at the Lima Technology Center in Batangas, amid the coronavirus disease 2019 (COVID-19) pandemic.

In a statement Friday, Lima Water General Manager Hazele Manalo said it is the company’s goal to ensure ample clean water and effective waste management for the continuous business operations of its locators.

“Now more than ever, it is important for us to ensure that our locators have ample clean water and effective waste management to curb the spread of COVID-19,” she said.

Ms. Manalo said Lima Water takes seriously its responsibility to provide adequate and clean water for the long-term in Batangas.

The company said it continues to uphold environmental and regulatory standards in sourcing water and treatment of used water prior to discharge.

Its water supply comes from its own deep well sources and reservoirs, while also promoting responsible use of water to its clients.

In August, Lima Water received accreditation from the Department of Environment and Natural Resources (DENR) as an environmental testing laboratory.

It also claimed to be the country’s first industrial park water service provider to receive such accreditation.

Lima Water serves Lima Technology Center, one of the biggest industrial parks in the country, which houses some of the biggest multinational manufacturers. It has a production capacity of over 10,500 cubic meters of water daily and has wastewater treatment capacity amounting to 26,000 cubic meters per day. — Revin Mikhael D. Ochave

PSEi slips as investors took profits

PHILIPPINE shares ended the week in negative territory after investors booked profits to steer clear of market uncertainties during the weekend.

The bellwether Philippine Stock Exchange index (PSEi) fell 34.62 points or 0.58% to close at 5,908.9 while the broader all-shares index dropped 9.05 points or 0.25% to 3,553.58.

In a mobile phone message, Philstocks Financial Inc. Research Associate Claire T. Alviar said that aside from investors taking profit, the market also reeled from the decline of market heavyweight SM Investments Corp. (SM).

On Friday, SM plummeted 3.65% or P33 to end at P872 per share, which according to Ms. Alviar, was the sharpest drop during the trading day.

“Further profit taking dragged the bourse near its immediate and short-term support of 5,900 level,” she said.

Meanwhile, Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said the local market skipped out on the upward trend among most Asian markets.

Other Asian markets were in the green during the close of the local bourse. Japan’s Nikkei 225 and Topix indices, Hong Kong’s Hang Seng index, and China’s CSI 300 index were all recording gains as of press time.

“Investors remain cautious over the country’s economic performance as we head to the last quarter of the year,” Mr. Pangan said in a mobile phone message.

Back home, the market’s sectoral indices posted varying results on Friday.

Financials rose 8.79 points or 0.76% to 1,154.57; mining and oil went up 5.91 points or 0.09% to 6,060.68; and services climbed 1.02 points or 0.07% to 1,463.5.

Meanwhile, holding firms declined 70.27 points or 1.13% to 6,143.69; property shrank 28.94 points or 1.04% to 2,743.25; and industrials fell 11.21 points or 0.14% to 7,844.97.

Trading value was at P7.64 billion on Friday with 767.34 million shares changing hands, against Thursday’s P6.01 billion with 952.32 million shares.

Advancers and decliners ended at 94 names each, while 46 ended unchanged.

Net foreign selling amounted to P892.27 million, down from the previous day’s P1.17 billion. “We may have to see if the index manages to stay above the 5,750 support area, while 6,200 remains the immediate resistance level for the bourse,” Timson’s Mr. Pangan said. — Revin Mikhael D. Ochave