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Far Eastern University, Inc announces schedule of Annual Stockholders’ Meeting

Investors lukewarm on Jollibee Foods after FTSE rebalancing

By Michelle Anne P. Soliman

JOLLIBEE FOODS CORP. (JFC) was one of the actively traded stocks last week after the rebalancing of a global index  while market players look for clues for the pandemic-battered company’s recovery.

A total of 8.14 million JFC shares worth P1.08 billion were traded from Sept. 14 to 18, data from the Philippine Stock Exchange showed, making it the eighth most actively traded issue last week.

Shares in JFC finished the week at P130.20 apiece, four percent lower from a week ago. Since the start of the year, they have tumbled 40%.

“Investor sentiment for JFC over the past months had been adversely impacted by the pandemic’s effect on the business,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an email interview.

“JFC saw higher trading volumes through the tail end of this week, likely driven by fund flows relating to the FTSE rebalancing,” he added.

In its semi-annual review on Sept. 10, FTSE Global Equity Index Series — Asia Pacific ex-Japan ex-China Regional Index announced changes in the index, which include JFC being moved to the mid-cap index from large cap effective at the end of business day of Sept. 18.

Meanwhile, JFC unveiled on Wednesday the opening of its third Jollibee restaurant in Europe as well as its 45th store in North America.

JFC President and Chief Executive Officer Ernesto Tanmantiong said in a statement that the company continues to grow both in North America and Europe.

He also said the Jollibee brand is seeing double-digit growth in North America with the Chowking and Red Ribbon brands also performing well. The company’s expansion plans in Europe continues, he said.

Before the year ends, the homegrown brand plans to open more stores in California and Canada. After its Liverpool launch, Jollibee, likewise, eyes another one in Leicester, England, putting it on track to launch 50 restaurants in Europe in three to five years.

“This provides some insight to the business’ recovery and growth prospects, which may help buoy investor sentiments moving forward,” Mr. Mercado said.

JFC’s revenues declined by a fourth to P62.76 billion during the first semester. It posted an attributable net loss of P11.96 billion, a reversal from a P2.50-billion net profit in the same period last year.

Aside from Jollibee, Chowking, and Red Ribbon, JFC also operates other quick-service restaurant brands such as Mang Inasal, Burger King, Highlands Coffee, Pho24, Yong He King, Hong Zhuang Yuan, Hard Rock Café, Dunkin’ Donuts, Smash Burger, Tim Ho Wan, Tortas Frontera, The Coffee Bean and Tea Leaf, and Panda Express.

As of end-June, it has 5,874 stores located across the globe.

Summit Securities, Inc. President Harry G. Liu said the lack of demand for Jollibee products as consumers stay home due to the pandemic, coupled with the launching of new stores, makes the company “financially hampered.”

“The way I look at it, if you are going to get into Jollibee, it can only reverse itself once everything is in place —  once the world economy is stable after the pandemic,” Mr. Liu said in a phone interview.

“Other than that, Jollibee will have to readjust their marketing efforts to the new normal so they can keep up with the financial forecast,” he said.

“Forward prospects for the company, alongside other players in the food service industry, will remain largely contingent on developments around the pandemic,” Mr. Mercado said.

Investors will look for cues in the third-quarter earnings report as this will provide a better snapshot of how the recovery in the business is shaping up, he added.

For this week, JFC’s stock price “will likely trend sideways over the short term between support and resistance,” Mr. Mercado said, placing the company’s support and resistance prices at P126 and P141, respectively.

“For now, as far as Jollibee is concerned, the best thing to do is to get into the fundamental price level where it is considered cheap to buy for the long term,” Mr. Liu said, providing support and resistance levels at P120 and P140, respectively.

Yields on gov’t debt rise

YIELDS ON government securities (GS) were little changed last week as market players stayed on the sidelines ahead of the central bank’s maiden bond offering last Friday, with some investors tracking last week’s auction results.

GS yields increased by 6.6 basis points (bps) on average week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of Sept. 18 published on the Philippine Dealing System’s website.

“The lack of fresh developments and a market still absorbing a likelihood that the BSP (Bangko Sentral ng Pilipinas) will keep its rates steady for the year triggered market players to trim positions and give up the bond market’s gains for a fourth straight week,” Robinsons Bank Corp. peso sovereign debt trader Kevin S. Palma said in a Viber message.

“Trades were centered mostly on the recently issued retail Treasury bonds (RTB) 05-13, where it rose up to the 2.90% level until bargain hunters put a lid to the uptick to finish the week lower to around 2.80% level,” he added.

ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said yields continued to adjust from year-low levels in August as investors continued to take profits moving into the fourth quarter.

“Selling pressure pushed the recent RTB 5-year (RTB 05-13) to trade at a discount as investors rebalanced portfolios and reduced risk,” Mr. Liboro said in an e-mail.

“Similar selling pressure was seen on the less liquid long-tenor (12-year to 20-year) portion of the yield curve before bargain hunters reinstated positions with yields 50-60 bps higher from lows hit in August,” he added.

In a market report, UnionBank of the Philippines, Inc. said short-term papers “moved sideways with an upward bias” ahead of the BSP’s maiden debt offer last Friday.

“As market participants opted to stay on the sides awaiting results of BSP’s first debt sale, trading volume eased,” UnionBank said.

The central bank made a full award of its maiden 28-day securities on Friday, raising P20 billion as planned as the papers fetched an average rate of 1.8355%. The offer was around 2.2 times oversubscribed, with total tenders reaching P43.360 billion.

Yields went up across-the-board at the secondary market last Friday. At the short end of the curve, yields on the 91-, 182-, and 364-day Treasury bills (T-bill) increased by 0.9 bp, 2.9 bps, and 0.4 bp, respectively, to 1.210%, 1.525%, and 1.832%.

At the belly, the rates of the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) climbed by 3 bps (2.201%), 6.2 bps (2.438%), 9.7 bps (2.628%), 11.4 bps (2.776%), and 7.1 bps (2.922%), respectively.

At the long end, the yield on the 10-year debt paper increased by 5.8 bps to 2.996%. The rate on the 20-year bond also went up 9.8 bps to 3.822%, while that of the 25-year paper increased 15.5 bps to close at 3.854%.

“This week’s story will still be a tug of war battle between bear sellers and bargain hunters. Hence, very strong two-way interest may persist with some investors looking to put their excess liquidity into work in the GS market with some looking to trim positions as leads dry-up onshore,” Robinsons Bank’s Mr. Palma said.

“The local market may also take a cue from steepening pressures on US Treasuries,” UnionBank said in its report.

ATRAM Trust’s Mr. Liboro said investments will be watching this week’s auction of 10-year debt papers worth P30 billion “for clarity on short-term sentiment.”

“We anticipate decent demand for the security at the three-percent level and, given the recent adjustment higher in yields, expect yields to consolidate and drift gradually lower if it clears at that level,” he said. — Lourdes O. Pilar

Watch News (09/21/20)

Rolex’ new line inspired by the Oyster Perpetual

THE NEW line of watches for 2020 for Rolex is centered on the Oyster Perpetual line. First introduced in the 1930s, it follows in the footsteps of its older brother, the 1926 Oyster.

The Oyster Perpetual Submariner and Oyster Perpetual Submariner Date, professional divers’ watches par excellence (the original Oyster was used by British swimmer Mercedes Gleitze, the first woman to swim across the English Channel during her attempts) are unveiled with a redesigned and slightly larger case. They are equipped respectively with calibre 3230, launched this year, and calibre 3235 (both movements incorporate the Chronergy escapement, developed and patented by Rolex, and offer a power reserve of approximately 70 hours). The new-generation Oyster Perpetual Submariner and Oyster Perpetual Submariner Date are presented with an updated design, characterized by a slightly larger 41 mm case and a bracelet with a broader center link. True to the original model, the new Submariner – in Oystersteel – has a black dial and matching Cerachrom bezel insert. The first version of the Submariner Date is also made of Oystersteel and brings together a black dial and green bezel insert. A second, yellow Rolesor version of the watch (combining Oystersteel and 18-carat yellow gold) has a royal blue dial and blue bezel insert. The third, an 18-carat white gold version, features a black dial and blue bezel insert.

The Oyster Perpetual Datejust 31 is presented in a white Rolesor version (combining Oystersteel and 18 carat white gold) and features dials in a variety of colors, with either index hour markers or Roman numerals made of 18 carat white gold. The Rolesor version boasts of a diamond-set bezel surrounding an aubergine, sunray-finish dial with 18-carat white gold Roman numerals – the VI is set with 11 diamonds. The three other versions, all with a fluted bezel, are fitted respectively with a mint green, sunray-finish dial, a white lacquer dial, and a dark grey, sunray-finish dial. These watches are fitted with calibre 2236, which includes the Syloxi hairspring, developed and patented by Rolex. They have a power reserve of approximately 55 hours.

The Oyster Perpetual Sky-Dweller is fitted with an Oysterflex bracelet for the first time. The innovative, high-performance elastomer bracelet on this 18-carat yellow gold version has an Oysterclasp and the Rolex Glidelock extension system for enhanced comfort on the wrist. It is the first watch in the Classic category to receive this Rolex-patented bracelet. This yellow gold version with a bright black, sunray-finish dial offers the high-performance elastomer bracelet with an Oysterclasp and the Rolex Glidelock extension system, which allows fine adjustment of the bracelet for optimal comfort on the wrist. The Oyster Perpetual Sky-Dweller is equipped with calibre 9001, one of the most complex movements to be developed and manufactured by Rolex. This calibre includes a blue Parachrom hairspring, manufactured by the brand in an exclusive paramagnetic alloy, and offers a power reserve of approximately 72 hours.

Like all Rolex watches, they carry the brand’s own Superlative Chronometer certification, symbolized by a green seal. This certification guarantees that they satisfy performance criteria which exceed watchmaking norms and standards in terms of precision, water-proofness, self-winding, and power reserve. The certification is coupled with an international five-year guarantee.

Patek Philippe updates its pilot-style watches

WATCH pioneer Patek Philippe has released an updated line of pilot-style watches. The brand introduces the Ref. 7234G-001 Calatrava Pilot Travel Time, inspired by the brand’s aviator’s watches from the 1930s. It’s also a slight update from 2015’s Ref. 5524G.

The updated version has two time zones (in white or rose gold and with two case sizes) as well as the Alarm Travel Time, a grand complication with a 24-hour alarm, not counting several limited editions. As a medium-sized version of the Ref. 5524G launched in 2015, the Ref. 7234G Calatrava Pilot Travel Time has a diameter of 37.5 mm to fit women’s and men’s wrists.

The round Calatrava case in white gold is sleek with a flat and slightly beveled bezel as well as a caseband that merges almost seamlessly with the strap lugs. The blue lacquered dial, inspired by aviator’s watches, is highly legible even in the dark thanks to applied white-gold numerals filled with a white luminous coating and broad luminous baton hands made of blued white gold. The face is decidedly technical yet timelessly elegant.

The self-winding caliber 324 S C FUS movement consists of 294 parts and features the Travel Time system for displaying a second time zone. All it takes is the activation of one of the two pushers in the left-hand case flank to move the luminous local-time hour hand clockwise (with the lower pusher) or counterclockwise (upper pusher) in one-hour increments. During such adjustments, the local time hand is disconnected from the movement, so the accuracy of time displayed by the minute and seconds hands is not compromised. The skeletonized hour hand continues to indicate home time. Both time zones have separate day/night indicators to simplify time setting on the go and to prevent unintentionally waking up loved ones with a phone call in the middle of the night. As long as the watch owner is at home, the two hour hands are superposed. The two time-zone pushers are equipped with a patented safety system that prevents unintended adjustments of the local time setting.

The analog date at 6 o’clock shows the date in three-day increments to improve legibility without cluttering the scale. A useful feature for travelers is that the date is always synchronized with local time, because the time-zone pushers also increment or decrement the date if the local time hour hand passes midnight either clockwise or counterclockwise.

The new Ref. 7234G is worn on a shiny navy blue calfskin strap secured with a clevis prong buckle in white gold. It is reminiscent of the harnesses that allowed pilots to keep their parachutes and survival kits readily deployable. It includes a second calfskin strap in vintage brown with contrast stitching much like the belts for classic pilot overalls. Both formats of the Calatrava Pilot Travel Time are also available in rose gold with brown black-gradated dials (Refs. 5524R and 7234R).

Lucerne holds its Great Watch Sale

LUCERNE is opening the doors of Le Temps in Newport City for the Great Watch Sale of 2020 which will run until Oct. 31. The event is exclusive to BDO Cardholders, and pre-registration is required, with only five people allowed in the store at certain time slots, from noon to 7 p.m. Thirty brands are part of the sale, including Omega, Breitling, Longines, Tissot, Philip Stein, Baume & Mercier, Certina, Ball, and Bremont. For more information and for registration details, visit facebook.com/TGWSale.

Shares may continue to drop amid uncertainties

By Denise A. Valdez, Senior Reporter

PHILIPPINE SHARES may continue falling this week due to the lack of a strong catalyst that could push it up and help it stay at the 6,000 level.

The benchmark Philippine Stock Exchange index (PSEi) gave up 34.62 points or 0.58% to close at 5,908.90 on Friday.

Week-on-week, the PSEi ended flat, shedding 59.06 points or 0.99% to reverse the gains it booked in the prior week.

Value turnover grew 23% to an average of P5.85 billion. While foreign investors were net sellers the whole week, net outflows dropped 76% to an average of P751.2 million

“So far, confidence towards the local market remains low due to the lack of an impetus that could boost appetite amid the lingering uncertainties in our economy and in our COVID-19 (coronavirus disease 2019) situation,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a mobile message.

He noted that net value turnover averaged P4.9 billion, down against the year-to-date average of P5.9 billion, signifying investors prefer to stay on the sidelines. 

The Philippines continues to record thousands of new COVID-19 cases every day, which worries investors of the likelihood of a return to regular business operations soon.

“[A]s the market still lacks a strong positive catalyst, we may see more selling pressures (this) week,” Mr. Tantiangco said. “Value turnover could remain thin while net foreign selling may continue.”

Despite this, online brokerage 2TradeAsia.com said the new P165.5-billion stimulus package of the government may help boost recovery for many sectors.

It listed specific provisions to drive this, such as the 60-day grace period for loans, extension of maturities of debt instruments, easing of competition rules on mergers and acquisitions, P24-billion budget for agriculture and P4-billion budget for tourism.

“[P]rice action seeks equilibrium and catalysts are needed to propel investor appetite higher. In the PSEi’s case, looming fundamental movers include the (central bank’s) policy meeting (on Oct. 1) and third quarter earnings reports beginning October,” 2TradeAsia.com said.

The brokerage is putting immediate support for the market at 5,750 and resistance within 6,000-6,170. Philstocks’ Mr. Tantiango sees the PSEi ranging within 5,700 to 6,100.

Global equity markets slid on Friday as investors sought direction after last week’s US Federal Reserve meeting and a jump in coronavirus cases in Europe rattled sentiment, while gold rose and safe-haven buying lifted the Japanese yen.

On Wall Street, the S&P 500 lost 37.55 points or 1.12% to 3,319.46 and the Nasdaq Composite dropped 117.00 points or 1.07% to 10,793.28. The Dow Jones Industrial Average fell 244.56 points or 0.88% to 27,657.42. — with Reuters

Outlook on bank stocks remains mixed

By Michelle Anne P. Soliman

THE OPINION on whether bank stocks are attractive to buy and hold remain mixed among analysts as uncertainties surrounding the economic recovery from a pandemic-induced slump remain. However, those drawing up their shopping lists on stocks may want to look at listed banks based on analysts’ recommendations.

The Philippine Stock Exchange’s (PSE) financials sub-index — which included the banks — ended the second quarter at 1,233.96. On a quarter-on-quarter basis, this marked a 0.8% gain in the sub-index as compared to declines of 34.3% and 2.4% seen in end-March and end-June 2019, respectively.

Still, it lagged behind the PSE index’s (PSEi) 16.7% gain in the end-June, which in turn, marked a rebound from the 31.9% contraction logged in the first quarter.


In the three months to June, quarter-on-quarter gains were observed in the share prices of the following listed banks: Bank of the Philippine Islands (BPI, 16.5%), Philippine Savings Bank (PSB, 7.8%), Asia United Bank (AUB, 5.6%), China Banking Corp. (CHIB, 4.2%), Philippine Trust Co. (PTC, 3.7%), UnionBank of the Philippines (UBP, 2.6%), Philippine Bank of Communications (PBC, 2.1%), and Philippine Business Bank (PBB, 1.1%).

On the other hand, other listed banks continued to post declines in their share prices, albeit at a slower pace compared to the previous quarter. These are Metropolitan Bank & Trust Co. (MBT, -7.5%), BDO Unibank, Inc. (BDO, -5.3%), East West Banking Corp. (EW, -4.7%), Security Bank Corp. (SECB, -3.7%), and Rizal Commercial Banking Corp. (RCB, -0.8%).

The Philippine National Bank’s (PNB) share price ended unchanged at the close of the second quarter compared to that in the first quarter.

Analysts attributed the mixed performance of listed banks’ share prices to continued lockdowns that depressed the sector’s lending activities.

In an e-mail, PNB Research Department Senior Equity Research Analyst Wendy B. Estacio and Equity Research Analyst Marco R. Mauleon said investors “remained lukewarm” on the banking sector as it is among the most affected by the implementation of strict lockdowns during the quarter.

“In particular, the ECQ (enhanced community quarantine) was anticipated to result in a deterioration in the sector’s asset quality. This prompted banks to elevate provisioning to cover for potential nonperforming loans (NPLs), which consequently weighed on their bottom line figures,” they said.

AP Securities, Inc. Senior Research Analyst Rachelle C. Cruz said provisioning for potential build-up of NPLs and trading gains due to significant drop in bond yields following the Bangko Sentral ng Pilipinas’ (BSP) sharp rate cuts marked the general “overarching theme” of the second quarter.

To recall, a strict lockdown was imposed on much of the country starting in mid-March up until May before quarantine rules were slowly eased starting June. As of this writing, Metro Manila is placed under a general community quarantine until Sept. 30, subject to changes.

The NPL ratio among the country’s universal and commercial banks (U/KBs) stood at 2.15% as of end-June, higher than the 2.03% in May and the 1.56% logged a year ago, BSP data showed.

RCBC Securities, Inc. Equity Analyst Daphne T. Yang noted NPLs in the second quarter were “masked” by the Bayanihan Act, which provided a moratorium for borrowers.

“Once this moratorium expires, banks will start to see the real magnitude of defaults,” she said.

Ms. Yang also noted that banks were less aggressive in lending during the second quarter, and focused more on maintaining asset quality.

“On a brighter note, banks moved to containing costs. We saw improvement in cost-to-income ratios with major contributions from the deferment of branch expansion and the focus on digital adoption,” Ms. Yang said.

A BSP study earlier showed the majority of banks tightened overall lending standards in the second quarter due to “less favorable economic outlook” and to banks’ “reduced tolerance for risk” at a time when most parts of the country were under strict lockdown. This is the first time that majority of the respondents reported tighter credit standards following 44 straight quarters of “broadly unchanged credit standards.”

Meanwhile, the provision for credit losses on loans and other financial assets among U/KBs grew six times to P99.14 billion in the second quarter from just P16.51 billion in the second quarter of 2019.

This substantial increase in provisions noticeably dragged net income among U/KBs in the second quarter. For the period, the country’s biggest banks booked a P78.67-billion net income, 21.8% lower than the P100.62 billion posted in the same three months last year.

On the other hand, net interest margin (NIM) — the ratio that measures banks’ efficiency in investing their funds by dividing annualized net interest income to average earning assets — improved to 3.68% in the second quarter from 3.58% in the first quarter and 3.38% in the second quarter of 2019.

NOTABLE PERFORMERS
I.B. Gimenez Securities, Inc. Research Head Joylin F. Telagen is “neutral” on banks and the financials, despite their price-to-book ratios being cheap as their returns on investment versus PSE’s other sub-indices during economic crises are “below the average.”

“On that note, I think it’s better to focus on resilient stocks and to look at global investment asset that could offer a better return,” Ms. Telagen said.

Nevertheless, she pointed to SECB as the clear standout among listed banks during the quarter as it managed to post a year-on-year net income growth of around eight percent to P2.77 billion in the second quarter, despite increasing its provision for credit losses by 15 times to P5.3 billion.

For China Bank Securities Corp. Research Associate Zoren Philip A. Musngi, BDO was notable for its “high level” of loan loss provisions amounting to P22.1 billion, bringing its bottom line to a net loss of P4.5 billion from last year’s net profit of P10.4 billion.

“As of [the first half of 2020], BDO had a net income decline of 78.89%, the highest decline among banks and greater than the average decline of 8.4% for the group (BDO, BPI, MBT, SECB, EW, UBP, CHIB, PNB, and RCB),” Mr. Musngi said.

On the other hand, Mr. Musngi cited EW as having the best performance among the group with a 65% and 55.7% in the first half and the second quarter of 2020, respectively.

“EW had one of the lowest increase in provisions (only at 3.29 times from prior year), highest increase in NIM (+142 basis points), and highest improvement in cost-to-income ratio (-16.1%). They reported the highest return on equity for the group at 17.40%, while having comparable NPL ratio at 1.80% (versus 2.10% on average),” Mr. Musngi added.

RCBC Securities’ Ms. Yang likewise pointed to EW as a standout, citing its higher net interest income and trading gains during the quarter.

“While other banks reported a softer quarter-on-quarter NIMs, EW was able to sustain margin expansion. EW benefitted from its repricing gaps as 77% of total loan portfolio consists of consumer loans with longer interest-rate fixing,” Ms. Yang said.

AB Capital Securities, Inc. Head of Research Lexter L. Azurin pointed to BPI and EW as the only banks they covered that “reported in-line/ahead with expectations”, while the rest fell behind their fiscal year targets.

MOVING FORWARD
Piper Chaucer E. Tan, client engagement officer and research associate at Philstocks Financial, Inc., continues to expect an increase in banks’ provisioning for bad loans.

“As the government is planning little by little to ease quarantine restrictions,… the demand for loans and the other business segments for banks will start to recover, but if the lockdown continues and strict measures are still in place, [the third and fourth quarter] will be worse reversing our previous expectation that [the second half of 2020] will recover earnings for banks on the assumption that economic activity will gradually pick up…” Mr. Tan said.

To manage expectations, Mr. Tan said they do not expect earnings this year to be as good as 2019 to reach pre-pandemic levels as the pace of economic recovery remains uncertain.

For Unicapital Securities, Inc. Research Head Justin Lawrence J. Tembrevilla: “We believe that core lending and deposit-taking activities will remain this year, contributing higher net interest income on the back of lower funding costs. Fees and transaction-related charges could pick up by second half of 2020, should there be no tighter lockdown implemented…” he said.

Mr. Tembrevilla added there could be opportunities for trading gains as interest rates remain low.

AP Securities’ Ms. Cruz expects “income statement recession” for banks this year as most of them have been boosting provisioning in anticipation of the increase of NPLs in the next quarters.

“Moreover, we also see lower fee-income for banks especially those with significant number of branches as more customers shift to online/digital banking for their transactions,” she said.

For RCBC Securities’ Ms. Yang: “In general, we expect sustained growth in banks’ net interest income on sustained NIMs, although [with] tempered loan growth as banks would be less aggressive in lending.”

“However, bottom line would be hurt by higher provisions,” she added.

For PNB Research’s Ms. Estacio and Mr. Mauleon, the ongoing crisis may lead to deterioration in asset quality, possibly eroding the banking sector’s bottom lines.

Mazda PHL stretches free service plan from 3 to 5 years

 

Depending on the model, this means savings of up to P150,000

THEY MAY be a (relatively) small and boutique-like car company when compared to the other Japanese car giants, but Mazda knows how to give big to its customers. The Hiroshima-born brand, which also happens to celebrate its 100th anniversary this 2020, has again brought joy to its clientele after recently announcing that it shall be upgrading its traditional “Yojin” three-year free preventive maintenance service to a longer five-year free service plan. Like the original Yojin, the new plan will still cover all the expenses of each periodic maintenance appointment that is usually held every six months, or at 10,000-km intervals — and yes, that already includes free oil replacement with a Shell-branded fully synthetic lubricant.

If you recall, back in 2013, Mazda Philippines was the first to introduce the three-year free service plan included with every purchase of a brand-new vehicle. This month, the said announcement was made to bring its relationship with its customers to the next level. And although this revelation was only made this month, Mazda insists that this next-level love is retroactive. The company is willing to extend this new five-year free service privilege even to customers who bought their new vehicles as far back as April 2020. Mazda Philippines President and CEO Steven Tan said that the program is also meant to reward who still chose to buy Mazda vehicles even in times of hardship (yes, I’m talking about the height of this crazy pandemic). They definitely deserve to still be a part of the crowd enjoying these added perks.

And if one were to compute for the value of the savings gained from taking advantage of the free five-year service plan, the figure would range from P90,000 to P150,000, depending on the model of car.

“Mazda Philippines and our authorized dealership network continue to always put the customer at the center of everything we do. We are in business because of the caring relationship we have with our customers,” continued Mr. Tan. “Now that our brand is celebrating its centenary, we see it fitting to elevate not only the value earned from purchasing our cars, but also the peace of mind afforded by our services. A premium Mazda vehicle deserves a superior ownership experience. With the new five-year free service plan, we are confident that our customers will celebrate driving even more, enjoy the convenience of worry-free vehicle maintenance for a longer time, and discover a renewed devotion to the vehicle and the brand in the years to come.”

Mazda Philippines has already ranked first place twice in the JD Power Philippines Customer Service Index Study in 2016 and 2019. Meanwhile, the new Mazda3 also just won the 2020 World Car Design of the Year Award last April. The decision came from a World Car Awards panel of 86 jurors from 24 countries.

And in celebration of its centenary, Mazda also unveiled some super-limited 100th anniversary special-edition models of the Mazda3 and MX-5 in the Philippines. Only 15 units of the Mazda3 and 24 units of the rare MX-5 Edition 100 are available for purchase in the country. These rarities come in Snowflake Pearl White finish, and carry sporty red seats and special floor carpets.

How PSEi member stocks performed — September 18, 2020

Here’s a quick glance at how PSEi stocks fared on Friday, September 18, 2020.

Philippine external debt ratio lowest among ASEAN peers

THE Philippines’ external debt relative to gross national income (GNI) is the lowest among its peer economies in the Association of Southeast Asian Nations, known as the ASEAN-5, according to the Department of Finance (DoF).

Citing data from the World Bank, the DoF in an economic bulletin said the gross foreign debt stock was 20.11% of GNI in 2019, from 19.98% in 2018.

Thailand’s ratio was 34.07% in 2019, followed by Indonesia with 36.85% and Malaysia with 64.59%. Data for Vietnam was not available but the DoF said Vietnam’s external debt was at 31.06% of GNI in 2018.

In a text message Sunday, Finance Undersecretary Gil S. Beltran, the department’s chief economist, said the ratio measures the debt burden carried by each country, reflecting its ability to pay back creditors and how much room they have to take on more debt.

“In the face of a slowing global economy and dampening of investment activities resulting from the COVID-19 pandemic, countries scramble for funds to fuel economic recovery. This is where countries’ overall debt scenario is crucial,” he said in the bulletin.

“While uncertainties abound, debt metrics are among the important indicators being watched by both domestic and international investors, along with credit rating agencies,” he added.

As a percentage of exports of goods and services and primary income, the foreign debt ratio fell to 54.4% in the first quarter from 54.8% a year earlier.

After the 1997 Asian financial crisis, the equivalent ratio was 106.1% in 2000.

“The relatively low external debt-to-GNI ratios attests to the government’s policy of sustaining its prudent borrowing activities,” according to the bulletin.

The central bank estimates that outstanding foreign debt rose 7.4% quarter on quarter to $87.45 billion at the end of June after the government increased its borrowing to fund pandemic containment measures. The debt was also up 4.6% from the start of the year.

“While the realities brought about by the health crisis have significantly changed the global economic and financial landscape, the government is steadfast in pursuing various reforms to raise much needed  revenue to stimulate the economy and at the same time enhance  the fiscal space,” the DoF said.

The government plans to borrow P3 trillion this year from domestic and foreign sources to plug the funding gap, which is expected to hit 9.6% of gross domestic product. It plans to raise 74% of the total from domestic lenders to minimize exposure to foreign exchange volatility. — Beatrice M. Laforga

TESDA, electronics industry developing certification standards

ELECTRONICS EXPORTERS are working with the Technical Education and Skills Development Authority (TESDA) to develop training standards and certification in the sector.

“It was recommended for TESDA… to explore the idea of establishing a public-private enterprise-based model for skills standard development and assessment,” TESDA Deputy Director General for Partnerships and Linkages Aniceto Bertiz III said in an online meeting Friday.

The partnership between Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI)  and TESDA includes the development of national competency standards and assessments, putting together a trainer and assessor pool, laying the groundwork for a certification system, and promoting worker entrepreneurship in the semiconductor and electronics industry.

Mr. Bertiz said that forming a national certification body would professionalize and standardize skills evaluation.

“Training regulations shall then be implemented under the enterprise-based program with SEIPI, identified partner company. Hence, target learners are the ones who can be immediately hired by SEIPI partner companies and organizations,” he said.

“However, TESDA needs the assistance of SEIPI to implement standards being developed for the particular sector. At the moment there are competency standards, training regulations, and assessment tools that are already developed for this sector which are not being implemented.” — Jenina P. Ibañez

Nuclear power possible by 2027, Energy dep’t says

NUCLEAR ENERGY could be helping power the grid by 2027 at the earliest, according to the Department of Energy (DoE).

“Gumawa po ng study ang DoE, in the year 2030, pwede na ipasok ang nuclear power in the energy mix (The DoE prepared a study which found that nuclear power can enter the energy mix in 2030),” Energy Assistant Secretary Gerardo D. Erguiza, Jr. said, referring to the findings under the Philippine Energy Plan.

However, under an optimistic scenario, nuclear power could be launched “as early as 2027,” he said.

At a virtual industry gathering Saturday, Energy Secretary Alfonso G. Cusi declared that the “time is ripe” for the Philippines to pursue nuclear power.

“The DoE considers nuclear energy as a long-term energy option and part of its strategy to address energy security through the diversification of energy sources,” he said in a message read by Mr. Erquiza.

President Rodrigo R. Duterte in an executive order issued in July ordered an inter-agency body led by the DoE to determine the viability of nuclear power and review current policy.

Mr. Cusi in August told reporters that he expects the government to adopt a national position on nuclear energy by the end of 2020.

The fastest way to reintroduce nuclear power is by reviving the mothballed 621-megawatt Bataan Nuclear Power Plant (BNPP), which the president also ordered to be reviewed, according to Carlo A. Arcilla, director of the Philippine Nuclear Research Institute of the Department of Science and Technology.

“Pag binuksan ang BNPP, $1 billion lang ang cost. Two-three years na operation, mababawi na ang cost of importation dahil sa coal savings (If the BNPP becomes operational, it will cost $1 billion. That will pay back after two or three years from the savings on importing coal),” Mr. Arcilla said at the same event.

He noted that around $6 billion is needed to build new baseload nuclear facilities.

No new nuclear plants are expected to come online over the next decade due to the high capital costs and safety considerations, analysts said.

“We maintain our forecast that no nuclear capacity will come online in the country over the coming decade, and will only seek to revise it if we see concrete project developments going forward,” Fitch Solutions Country Risk and Industry Research said in a recent commentary.

Meanwhile, Mr. Erquiza said it was important to lay down the legislative and regulatory frameworks to attract investors. At present, six measures on nuclear power are pending in various House committees, while an old Senate bill has yet to be refiled.

Alpas Pinas, a group of nuclear energy advocates, expressed the hope that Senator Ralph G. Recto, who joined the conference, will help refile the measure.

“To ensure that when planning out our energy needs, nuclear should be included as soon as possible. It takes a decade to build a plant, maybe even longer, and we have to start immediately,” Mr. Recto said.

The Philippines is close to fulfilling the 19 requirements prescribed by the International Atomic Energy Agency for countries seeking to develop nuclear energy, Mr. Cusi has said. — Adam J. Ang

New natural gas depots needed as Malampaya terminal gets depleted

THE PHILIPPINES needs immediate alternatives for the loss of Malampaya natural gas to avert power outages in the next few years, a legislator said.

Senator Sherwin T. Gatchalian said in a statement Saturday that the energy sector is in a “race against time.”

“We’re racing against time. If we fail to act now, we could be experiencing anew debilitating rotational brownouts by 2024 once our supply from the Malampaya gas field is depleted,” he said.

Mr. Gatchalian said LNG terminals “should be in place” before the supply of Malampaya deepwater gas runs out.

The Department of Energy (DoE), which has also expressed its intent to allow the entry of natural gas imports, has received four applications for LNG terminal projects. The proponents are the Lucio Tan group alongside Blackstone Group affiliate Gen X Energy; First Gen Corp. and Tokyo Gas Co. Ltd.; US-based Excelerate Energy; and Energy World Gas Operations Philippines, Inc.

The Government is seeking to make the Philippines an LNG hub in Southeast Asia and is pursuing public-private partnerships to explore and develop indigenous natural gas.

In early September, the DoE promoted its investment guide to potential LNG investors at a webinar hosted by the United States Agency for International Development.

Mr. Gatchalian, who heads the Senate energy committee, filed a measure outlining a national policy and framework for the development and regulation of the midstream natural gas industry. Senate Bill No. 1819 governs the transportation, transmission, storage, and marketing of LNG.

“The proposed Midstream Natural Gas Industry Development Act will encourage private capital and foster an open and fair competitive market while at the same time ensure safe, reliable and environmentally responsible operation of LNG terminals,” Mr. Gatchalian said.

Year to date, the Philippines has produced 73,388 million standard cubic feet (mmscf) of natural gas, with consumption at 69,856 mmscf, according to the DoE.

The Malampaya project under Service Contract 38 is run by a consortium led by Shell Philippines Exploration B.V., which holds a 45% interest there. Dennis A. Uy-controlled UC Malampaya Philippines Pte Ltd. owns another 45%, while the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) holds 10%.

Last year, the gas field accounted for the generation of 3,200 megawatts of power, or 21.1% of the total. — Adam J. Ang

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