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PHL agriculture worker wages averaged P331.10

PHILIPPINE farm workers received wages averaging P331.10 per day in 2019, according to the Philippine Statistics Authority (PSA).

In a report, the PSA said the 2019 rate is 8.1% higher than the level reported in 2018.

CALABARZON (Cavite, Laguna, Batangas, Rizal and Quezon) posted the highest wages at P399.08 per day, followed by MIMAROPA (Mindoro, Marinduque, Romblon and Palawan) at P394.27, and Ilocos Region at P354.65.

Meanwhile, Central Visayas recorded the lowest daily wage at P276.43, followed by Zamboanga Peninsula at P280.39, and Northern Mindanao at P280.73.

By crop, the PSA said palay workers received the highest daily wage of P351.39.

Palay farmers in the CALABARZON Region earned P422.27 per day, followed by MIMAROPA at P397.64, and Cagayan Valley at P380.35.

Meanwhile, palay farmers situated in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) earned P270.88, the lowest of all regions.

The daily average wage of coconut farmers was P338.72.

Coconut farmers in Cagayan Valley earned P443.33, followed by MIMAROPA at P416.54, and CALABARZON at P391.17.

Coconut farm laborers in Zamboanga Peninsula earned P279.54, the lowest of any region.

The daily average wage of sugarcane farmers was P309.08.

Sugarcane farm workers in Davao Region earned P374.50, followed by Ilocos Region at P353.25, and CALABARZON at P340.30.

However, sugarcane farm workers in SOCCSKSARGEN (South Cotabato, Cotabato, Sultan Kudarat, Sarangani, and General Santos City) had the lowest daily wage of P277.85.

The daily wage of corn farmers averaged P288.04.

Corn farmers in CALABARZON earned P391.02, followed by Central Luzon at P348.64, and Ilocos Region at P315.48.

Meanwhile, corn farm workers in BARMM had the lowest wage of P244.45.

Male farmers received an average daily wage of P335, 10% higher than the wage of female workers.

According to the Department of Labor and Employment National Wages and Productivity Commission, the current nominal minimum wage for the National Capital Region as of July ranges from P500 to P537. — Revin Mikhael D. Ochave

Maxus PHL brings in affordable compact 8-seater MPV

By Kap Maceda Aguila

MAXUS PHILIPPINES last week digitally launched the G50, a compact eight-seater multi-purpose vehicle (MPV).

In a release, the company said that the nameplate, which now takes its place as the fourth vehicle in the British heritage brand’s local lineup, features “modern design, spacious interior, superior features, and value-for-money pricing across the compact and subcompact MPV segments.” It positions the MPV for “young entrepreneurs and up-and-coming corporate managers who need not just an all-in-one vehicle, but also a ‘more-in-one’ MPV.”

Arguably the biggest value proposition that Maxus is proffering in the G50 is its more affordable pricing relative to segment competition. “The G50 is loaded with features that other compact MPVs do not have with an attractive price that will rival most subcompact MPVs,” said Automobile Central Enterprise, Inc. President Felipe Estrella in a speech.

Under the hood is a turbocharged 1.5-liter gasoline engine delivering 167hp and 250Nm. Across all variants, this power plant is mated to a seven-speed dual-clutch automatic transmission. All G50 trims get a reverse camera, park distance control, keyless entry, push start/stop button, electronic stabilization program, and electronic parking brake with auto hold. The Premium and Elite variants receive a 12-inch infotainment system screen, 360-degree-view camera, and leather seats; the Premium adds a panoramic sunroof, mobile wireless charging, LED headlights and power tailgate.

Speaking in the virtual press launch, AC Industrials CEO Arthur Tan described the G50 as a “game-changer” in a “very special niche.” He added that Maxus may not be as well known in this country, but the 124-year-old brand is produced by SAIC, the largest auto manufacturer in China. “(They) get to produce vehicles in the most advanced car manufacturing facilities in the world. Testament (to this) is the warranty period, and the quality of the product — something that everybody, I hope, would be able to see and appreciate.” The executive pointed to “changing transportation needs” of the country, and how auto brands need to deliver the “right product, right service and right customer experience.”

For his part, Mr. Estrella declared that it’s about “matching needs and wants,” saying that the G50 is ideal transportation for “businesses and even (for) essential life-saving customers… (along with) logistics, health, agriculture, construction, transport and others.”

Maxus Philippines General Manager Reginald See joined, “The G50 is an MPV that can take in even your extended family members since it’s an eight-seater. It’s ideal for long road trips and family picnics. The great thing about this is that it has the price of a subcompact MPV.”

The G50 — measuring 4,825mm x 1,825mm x 1,778mm — comes in three variants with the following pricing: 1.5 Turbo DCT Pro (P1.088 million), 1.5 Turbo DCT Elite (P1.168 million), and the 1.5 Turbo DCT Premium (P1.288 million).

Maxus Philippines reported that the G50 1.5 Turbo DCT Pro comes in Warm White, Warm Argent, Metal Black and Water Blue; the G50 1.5 Turbo DCT Elite in Roland Purple, Polar Ash and Warm White, plus the Deep Golden exclusive to the variant. The G50 1.5 Turbo DCT Premium is also available in Roland Purple, Polar Ash and Warm White.

The MPV is backed by a five-year/100,000-km warranty (whichever comes first), plus 24/7 emergency roadside assistance and on-site servicing for corporate fleet accounts.

For more information, visit www.maxus.com.ph. Like and follow Maxus Philippines’ Facebook page and Instagram account at @maxusph. Maxus showrooms are located on Sheridan in Greenfield District Mandaluyong, Quezon Avenue along Quezon City, Pedro Cayetano Boulevard in Taguig South, Madrigal Business Park in Alabang, North Reclamation Area in Cebu City, Mandurriao in Iloilo City, Araneta St. in Bacolod City, and Pueblo in Cagayan de Oro City.

Peso may rise on inflation expectations

THE PESO will likely strengthen further against the greenback this week on expectations of slow inflation and as the second economic stimulus bill awaits the signature of President Rodrigo R. Duterte.

The local unit closed at P48.485 versus the greenback on Friday, appreciating by 14.50  centavos from Thursday’s P48.63 finish, data from the Bankers Association of the Philippines showed.

Week on week, the peso also surged from its P48.68-per-dollar close on Aug. 20.

Markets are closed on Monday for National Heroes’ Day

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the local unit may move within P48.40 to P48.70 versus the dollar this week.

Mr. Asuncion said he sees high demand for peso as inflation remains manageable.

“Prices in August may reflect a generally benign inflation. Based on our forecast, probably, it will be at 2.9%,” he said in an e-mail.

Inflation likely ranged at 2.5% to 3.3%, mainly driven by an increase in oil prices, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Friday.

The Philippine Statistics Authority will release August inflation data on Sept. 4.

Last month, the consumer price index rose 2.7%, quicker than the 2.5% in June as well as the 2.4% in July 2019. Year to date, inflation averaged 2.5%.

The central bank last week raised its 2020 inflation forecast to 2.6% from the 2.3% it gave in June, still well within its 2-4% target.

Mr. Asuncion, however, said expectations of higher unemployment may put some downward pressure on the local currency.

“On the other hand, third-quarter unemployment rate which is anticipated to be still double-digit may counter the peso’s appreciation,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said progress on the P165-billion stimulus fund for the poor and other sectors under the Bayanihan II bill will also affect the peso-dollar trading this week. He expects the local unit to strengthen to the P48 to P48.25 levels.

Mr. Ricafort added further discussions on Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill could also support the peso.

“Any progress on other legislative measures such as the CREATE Bill that would immediately cut corporate income tax rate to 25% from the current 30% and the FIST Bill, among others, would all help improve economic recovery prospects, especially as the economy further re-opens from lockdown,” Mr. Ricafort said.

The Financial Institutions Strategic Transfer (FIST) bill aims to set up corporations that will acquire, manage and sell nonperforming loans and stagnant property assets of banks. — K.K.T. Jose

Style (08/31/20)

Curated functional fashion with Shangri-La Plaza

SHANGRI-LA Plaza mallers can now easily purchase clothes through New Style for the New Normal, a selection of practical, functional, easy-to-match, and stylish clothes, shoes, bags, and other accessories that are comfortable and convenient. It goes with the Spot the Dot campaign that helps guests quickly identify these items with eye-catching dot stickers, so trips to the mall can be completed quickly and with minimal exposure to others. With New Style for the New Normal, Shang is turning the spotlight on “Local Brands” like CMG, CLN, Plains and Prints, R.A.F. and K & Company in support of Filipino entrepreneurs especially in these challenging times. “Nudes and Neutrals,” which can be easily found at shops like Mango and Harlan & Holden, have that elegant, timeless appeal making them a great investment for a seasonless wardrobe. For those who want to add a hint of color that’s perfect for Zoom meetings or parties, pick out clothes in “Pastels” from Harlan + Holden, Ever New, Parfois, and Kate Spade. As schools forego uniforms for online learning, dress up schoolchildren with Mango Kids that offer comfy clothes in lighter, refreshing colors. Take a look at Shang’s “Whites, Rubbers, and Sports” selection that feature no-nonsense staples from brands like Columbia, Porsche Design, Res Toe Run, Cole Haan, Complex Lifestyle Store, Moressi, and Calvin Klein Underwear. Make sure to keep keys, smartphones, cards, sanitizer sprays, and extra face masks ready any time by stashing them inside bags that are sturdy and compact yet sleek and chic with Shang’s picks for “Small Bags,” including pieces from Cole Haan, Steve Madden, Parfois, Moressi, Samsonite, Michael Kors, Mango, and Escada. Aside from the mall’s new retail approach with Spot the Dot, each store is also taking the safety of shoppers very seriously. When fitting clothes, the stores are equipped with special sanitizers to ensure the clothes are sanitized before they are brought out in the racks. Fitted clothes are then steamed after use, and some brands even keep them in storage for 48 hours before they are let out again. Makeup stores have suspended all contact-heavy facial services. Disposable foot covers are also available when trying on shoes. For inquiries about New Style for the New Normal, call 8-370-2597/98 or visit www.facebook.com/shangrilaplazaofficial.

MUJI moves to the ground floor of SM Mall of Asia

MUJI, home of Japanese lifestyle essentials, has moved its store at SM Mall of Asia from the 2nd Level of the South Main Mall to the 1st level of the North Main Mall. The 520 square meter store, which opened on Aug. 28, has a fresher look with a design inspired by nature and carries a wide range of health and beauty items, stationery, travel stuff, kitchenware, houseware, furniture, and electronics products as well as men’s and women’s apparel, innerwear, bags, shoes, and accessories. MUJI’s newest store also highlights basic essentials that customers can use to adapt to the new normal. Some of these include storage boxes that can be used to organize the home, organic cotton T-shirts that can be easily styled and worn every day, PET bottles, and EVA cases that can be used to create sanitary kits, and tote bags and other carry essentials needed for everyday living. Exclusive opening giveaways and promotions also await customers in MUJI’s newest store concept. For more information about MUJI SM Mall of Asia’s Store reopening, customers can register to MUJI Membership for free at https://woobox.com/vhqgji and visit MUJI Philippines’ official social media accounts on Facebook, Instagram, and Twitter. Customers can also shop for MUJI essentials via The Specialist: SSI Group Customer Service Team (e-mail customerservice@ssigroup.com.ph; call 8-830-5000 or 0917-552-9359; visit facebook.com/SSILifePH).

Araneta City reopens Farmers Plaza Bazaar

AFTER months closed due to the COVID-19 lockdown, Farmers Plaza Bazaar resumes operations to revitalize Araneta City’s offering of quality and affordable goods. Stalls at the Farmers Plaza Bazaar have started reopening to cater to the needs of bargain-hunters and thrift savvy shoppers, offering a selection of clothes, shoes, apparel, and food at a bargain. With safety prioritized, social distancing measures and sanitary regulations have been put in place at the bazaar. Merchants are required to wear face masks and face shields at all times. Disinfectants are made available in all kiosks. Floor markings and numerous safety reminders are made visible around the bazaar. Shoppers are required to wear face masks and face shields in the bazaar. A company ID or quarantine pass issued by the local government unit is also needed to be shown upon entry. Patrons are also advised to bring their own shopping bags to minimize physical contact. Occupying the whole 4th floor of Farmers Plaza, the bazaar can be easily accessed by EDSA-MRT commuters and Araneta City visitors. Patrons may also use the Araneta City-Zen Personal Shopper and buy items at Farmers Bazaar remotely. Through this service, patrons may book a personal shopper using the MyKuya app on any mobile device to do the shopping and item delivery on their behalf.

Manila Water trading volume rises after billionaire takeover

By Jobo E. Hernandez, Researcher

AYALA CORP. was among the most actively traded stocks last week after the Philippine Competition Commission approved Philippine billionaire Enrique Razon’s takeover of unit Manila Water Co., Inc.

A total of 994,220 Ayala Corp. shares worth P724.63 million were traded from Aug. 24 to 28, according to data from the Philippine Stock Exchange.

Ayala Corp. shares fell 1.3% to P733.50 apiece at the close of trading on Friday. The stock has lost 4.7% this year.

Investors might still be digesting the government’s approval of the takeover, Darren Blaine T. Pangan, head of online trading at Timson Securities, Inc., said in a Viber message.

The commission approved the purchase by Trident Water Holdings Co., Inc. — a unit of Razon-led holding company Prime Metroline Infrastructure Holdings, Inc. — of a 51% voting interest in Manila Water.

Trident Water, which has interests in hotels, casinos, mining, infrastructure, power generation and distribution, and port services, will buy the controlling stake after subscribing to 820 million common shares of Manila Water’s unissued capital stock, the commission said in a statement last week.

The deal was unlikely to cut competition in the water supply market of the east zone concession area, the regulator said. It noted that as the sole water distributor in the area, Manila Water has a captive customer base and no downstream competitors.

Manila Water told the stock exchange in March Prime Infra would own 28% of the company after it buys 820 million shares at P13 each. At the time, Trident Water had not been incorporated.

The purchase will cut Ayala Corp.’s ownership in Manila Water to 30% from 41%. Public ownership will go down to 41% from 58%, while foreign ownership will decline to 9.18% from 10.41%.

The regulatory approval comes after Manila Water disclosed on Monday that it had received regulatory approval to increase its authorized capital stock to P4.4 billion after the Securities and Exchange Commission (SEC) approved changes to its incorporation articles.

The utility also said the SEC had approved the increase in its carved-out shares to 900 million unissued common shares, which are reserved for cash, properties or assets to carry out its business.

The commission’s approval might “spurred trading activity somewhat,” Regina Capital Development Corp. stock analyst Anna Corenne M. Agravio said in an e-mail. She added that the stock’s activity might have also been affected by the “leftover effects” from the MSCI rebalancing announced in mid-August that will take effect this week.

“We think its effect is only minimal,” she added.

Ayala Corp.’s net income plunged by 95.7% to P1.28 billion in the second quarter from a year earlier. First-half profit fell by 79% to P7.94 billion.

“As more developments unfold in the coming days, we’ll have to see how market participants interpret these new pieces of information,” Mr. Pangan said.

The coronavirus pandemic has seriously affected Ayala Corp.’s major business segments, Ms. Agravio said. “In our bear-case scenario, the conglomerate’s profits for 2020 will decline by double digits,” mostly dragged by unit Bank of the Philippine Islands’ increased loan loss provisions, she added.

Ms. Agravio put Ayala Corp.’s immediate support — the price that prompts traders to buy the stock — at P715, while Mr. Pangan put it at P700 to P710.

She put the share’s resistance level — the price that prompts traders to sell it — at P760 each.

The reactionary buying causes a stock price to stop dropping and start rising, while the selling causes the opposite.

“While P760 is where traders may experience some selling pressure given that this seems to be a minor resistance area, the P800 level remains as the major resistance level to clear,” Mr. Pangan said.

Taiwan paves way for US trade deal by easing pork, beef imports

TAIPEI — Taiwan paved the way for an eventual free-trade deal with the United States on Friday by announcing an easing of restrictions on the import of US beef and pork, as the island looks to boost ties with Washington at a time of tensions with China.

Taiwan has long sought a free-trade agreement with the United States, its most important supporter on the international stage, but Washington has complained about barriers to access for US pork and beef. Taiwan said that was for health grounds, especially with concerns over mad cow disease and additives.

President Tsai Ing-wen said her government planned to allow the import of US pork containing ractopamine, an additive that enhances leanness, and allow in US beef more than 30 months old.

“The decision is in line with the country’s overall interests and the goals of the nation’s strategic development. It’s also a decision that could boost Taiwan-US ties,” she said.

“If we can take one crucial step forward on the issue of US pork and beef, it will be an important start for Taiwan-US economic cooperation at all fronts.”

US State Department spokeswoman Morgan Ortagus said the United States welcomed Taiwan’s move and removing “these long-standing barriers” opened the door to greater economic and trade cooperation.

“We look forward to the timely implementation of these actions, which will provide greater access for US farmers to one of East Asia’s most vibrant markets, and for Taiwan consumers to high-quality US agricultural products,” she said.

Tsai saidthat while it may take a while to reach a bilateral trade agreement with the United States, she had a positive attitude on the issue.

The United States is an “extremely important” trade partner for Taiwan, and the decision has nothing to do with the upcoming U.S. presidential election, she added.

Council of Agriculture Minister Chen Chi-chung said the eased pork and beef rules were expected to come into effect on Jan. 1.

Taiwan-U.S. trade last year was worth $85.5 billion, with the United States running a $23.1 billion deficit. Taiwan was the United States’ 14th biggest export market in 2019.

The United States, like most countries, has no official relations with Taiwan, which is claimed by Beijing as sovereign Chinese territory. China has been stepping up its military activities near Taiwan.

Export-dependent, tech powerhouse Taiwan has also been pushing for an investment agreement with the European Union. — Reuters

PSEi declines for second straight month in August

THE LOCAL BOURSE continued declining in August, but the drop was at a much slower pace than the previous month’s, as the market lacked strong catalysts besides the rising number of coronavirus cases.

The benchmark Philippine Stock Exchange index (PSEi) shed 37.37 points or 0.63% to close at 5,884.18 on Friday.

On a monthly basis, the PSEi was down 44.27 points or 0.75%. August was its second straight month of posting a loss. However, the market started to improve compared to how it performed in July when the PSEi dropped 279.27 points or 4.7% month on month.

“The benchmark index fell by 44 points during the month of August — pleasantly surprising performance versus July, considering the historical dryness of trading during the ‘Ghost Month,” online brokerage 2TradeAsia.com said.

August is called a “ghost month” by many investors, which is believed by some as a period of bad luck — hence, they avoid big moves in the market.

But the brokerage said there were still investors that went on with trading last week to secure profits ahead of the long weekend.

“Profit-taking dominated the week, ahead of a shorter yet data-heavy week ahead: inflation data will be reported plus decision to extend or ease current (quarantine restrictions) in Metro Manila and nearby areas,” 2TradeAsia.com said.

Value turnover went up 71% to an average of P9.09 billion last week. Net foreign selling also extended and grew more than double to an average of P972.41 million.

The local bourse is closed on Monday in observance of the National Heroes’ Day.

“The week’s headlines saw reaffirmation from listed firms on capital plans that are restarting/continuing despite headwinds from the coronavirus… To this effect, we further see elevated transaction activity and cash flow strengthening,” the brokerage said.

As with the past months, sentiment also continues to be driven by data on the coronavirus infections. Total cases in the Philippines stood at 213,131 as of Saturday, of which 74,611 are active cases.

Across the world, the virus has infected nearly 25 million people and has killed 842,499, based on records from Johns Hopkins University.

For the coming week, one of the primary drivers will be the release of headline core inflation data on Sept. 4, which is expected to reflect the impact of the stricter quarantine from Aug. 4 to 18.

Global equity markets rose to a new high on Friday as US consumer spending in July suggested a strong economic rebound lies ahead, while the Japanese yen surged on safe-haven buying after Prime Minister Shinzo Abe resigned for health reasons.

The dollar neared lows last seen in May 2018, retreating from Thursday when the Federal Reserve said it will allow inflation to run faster for longer, a stance that will likely lead to a period of prolonged low interest rates. — Denise A. Valdez with Reuters

IIHS safety group gives highest ratings to 2020 Audi A6, Q8

THE INSURANCE Institute for Highway Safety (IIHS) in the United States awarded the 2020 Audi A6 the highest Top Safety Pick+ and the 2020 Audi Q8 the Top Safety Pick awards as these excelled in the safety group’s testing. The two vehicles obtained top “Good” ratings in all six IIHS crashworthiness performance evaluations, and achieved “Superior” grades for front-crash prevention tests.

In August last year, the Audi E-tron became the first pure battery-electric vehicle to be named an IIHS Top Safety Pick+.

The independent, nonprofit organization ultimately aims to “reduce losses from crashes by determining the safety level of vehicles, then rating these.” Two aspects of a vehicle’s safety are tested: Crashworthiness, or how well a vehicle protects its occupants in a crash; and crash avoidance and mitigation, which considers the technologies in a vehicle that can prevent or lessen the severity of a crash.

Six crash tests are performed: moderate overlap front, driver-side small overlap front, passenger-side small overlap front, side, roof strength, and head restraints and seats. When doing its front crash prevention ratings, the IIHS conducts low- and moderate-speed track tests of vehicles with automatic braking systems.

Audi reported that the 2020 Audi A6 and Audi Q8 performed well in the IIHS tests owing to the vehicles’ “full suite of standard and available driver assistance features” such as the Audi Pre-Sense, which can prepare the cars for impact. This closes side windows and panoramic sunroof (in the case of the Audi Q8), pre-tensions front seatbelts, and provides visual and acoustic warnings to help alert the driver to potentially hazardous situations or an imminent crash. “Another feature contributing to the models’ top safety ratings is the rear cross-traffic assist, which helps drivers when they are reversing out of a perpendicular parking space,” continued the release.

The 2020 Audi A6 is powered by a 2.0-liter TFSI, inline-four, turbocharged, gasoline engine fitted with a mild hybrid system composed of a belt alternator starter (BAS) and lithium-ion batteries. The system delivers 245hp and 370Nm, realized through an Audi S tronic seven-speed dual-clutch transmission.

Meanwhile, a turbocharged, 3.0-liter, six-cylinder TFSI gasoline engine serving up 340hp and 500Nm motivates the 2020 Audi Q8. It is similarly fitted with a mild hybrid system. The driver accesses the performance through an eight-speed Tiptronic transmission; and the vehicle features a Quattro permanent all-wheel drive unit.

The 2020 Audi A6 and Audi Q8 are available at Audi dealerships on EDSA Greenhills; in Bonifacio Global City; Westgate, Alabang; and SM City Seaside Cebu. For more information, call 0917-813-9064, 0917-806-2946, or 0917-935-4111.

Yields on gov’t debt go up

YIELDS ON government securities (GS) edged higher last week after the Treasury rejected all bids for the 20-year papers and following investors’ reaction to its borrowing plan next month. 

GS yields, which move opposite to prices, went up by an average of 7.3 basis points (bps) week on week, according to the PHP Bloomberg Valuation Service Reference Rates as of Aug. 28 published on the Philippine Dealing System’s website.

ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said market sentiment was “defensive” at the start of the week, with investors asking for higher yields during the Bureau of the Treasury’s (BTr) reissued 20-year debt auction last Tuesday.

“Although BTr opted to reject all bids at the auction, rates adjusted higher on the back of a combination of less dovish rhetoric from the BSP (Bangko Sentral ng Pilipinas) on further policy action over the short term and speculation on possible adjustments to the BSP’s bond-buying program,” Mr. Liboro said in an e-mail.

“Local bond yields experienced some upward pressure week on week as the market reacted to the government’s borrowing plan for the year ahead where 85% of the planned funding will be sourced onshore,” Robinsons Bank Corp. peso sovereign debt trader Kevin S. Palma said in a Viber message.

“The rise in domestic yields was further compounded by higher US Treasury yields after the US Federal Reserve unveiled a major policy shift where it will consent inflation to glide higher and employment to run a little bit hotter to support the economy,” he added.

On Tuesday, The Bureau of the Treasury (BTr) rejected P46.921 billion in tenders for the reissued 20-year papers even as this was more than its plan to borrow P30 billion as market participants asked for higher yields after the central bank held benchmark rates steady on Aug. 20.

Had it made a full P30-billion award, the average rate of the notes, which have a remaining life of 12 years and seven months and carry a coupon rate of 3.635%, would have been at 3.501%, higher than the 5.341% fetched last Nov. 25 when it was last offered.

The Treasury expected the bonds to be quoted below three percent, National Treasurer Rosalia V. de Leon said.

Meanwhile, the BTr announced on Thursday a P160-billion borrowing plan for September, lower than this month’s P170-billion program.

It plans to raise P100 billion in Treasury bills (T-bills) in September via its weekly auctions of 91- and 182-day papers worth P5 billion each and one-year T-bills worth P10 billion.

The BTr will also borrow P30 billion from three-year Treasury bonds (T-bond) on Sept. 11 and another P30 billion from 10-year papers on Sept. 4.

Mr. Palma said these offerings are “relatively attractive” to dealers looking for yields.

“In terms of the issue size, it did not veer much from its usual monthly volume except that the 35-day T-bill was out of the equation,” he said.

The 35-day papers, which the Treasury had reintroduced since April to accommodate demand for shorter-termed debt, will no longer be offered in September due to the planned bond issuance of the central bank within the third quarter.

Offhand, Mr. Liboro said the announcement of three- and 10-year papers is “not particularly impactful” since the offer volumes are consistent with regular offerings, “so it’s not an increase in supply.”

“Likely see some price action around the 10-year [paper], potentially yields adjust higher prior to auction on speculation on whether the BTr will opt to award there after rejecting at the 20-year [debt] this month,” he said.

US Federal Reserve Chair Jerome Powell on Thursday also introduced a fresh strategy to allow inflation to go above the two percent target to spur economic recovery and employment before hiking rates, Reuters reported.

At the secondary market last Friday, the 91-, 182-, and 364-day T-bills saw their yields go up by 1.2 bps, 0.3 bp, and 2.8 bps, respectively, to 1.203%, 1.44%, and 1.815%.

At the belly of the yield curve, rates of the two-, three-, four-, five-, and seven-year T-bonds went up by 10.6 bps (2.118%), 13.4 bps (2.284%), 15.3 bps (2.426%), 15.5 bps (2.544%) and 13.3 bps (2.704%), respectively.

The long end of the curve ended mixed as the yield on the 10-year paper increased by 15.8 bps to 2.797%, while 20- and 25-year debt dropped by 5.8 bps (3.52%) and 2.3 bps (3.63%), respectively.

“For [this week], market may continue to be defensive given the lack of concrete direction to justify major movements,” Mr. Palma said.

“We expect the ‘lower for longer’ trend for rates to continue but see more scope for a gradual adjustment higher in the short-term,” Mr. Liboro said.

“Investors will likely be cautious [this] week and looking towards the August inflation print for more clarity,” he added.

The Philippine Statistics Authority will release the latest inflation report on Sept. 4. — Lourdes O. Pilar

How PSEi member stocks performed — August 28, 2020

Here’s a quick glance at how PSEi stocks fared on Friday, August 28, 2020.

Guidelines set for regulation of drug retail, wholesale prices

THE COUNCIL that will provide technical advice on the price regulation of certain medicines, which took effect June 2, is expected to get to work soon following Sunday’s issuance of guidelines by the Health department.

Under Administrative Order No. 2020-0039 dated Aug. 20 and published Aug. 30, the Department of Health (DoH) outlined the rules for implementing the maximum prices for both retail and wholesale of drugs listed in a presidential order.

A total of 133 drug formulas are covered by Executive Order No. 104, titled Improving the access to healthcare through the regulation of prices in the retail of drugs and medicines, which was signed by President Rodrigo R. Duterte on Feb. 17 and came into effect June 2.

Under the DoH guidelines, the Drug Advisory Council will be created to provide technical assistance and guidance to the government in implementing measures for affordable  drugs and medicines.

It will be composed of experts on public health, epidemiology, pharmaceutical, policy, law, clinical, and economy.

The group is tasked to draft procedures for the selection of medicines that will be placed under regulation, conduct drug price evaluations, and recommend the maximum prices.

It is also mandated to consult with health professional organizations, patient and consumer groups, as well as civil society organizations, among others.

A separate expert panel will also be formed to provide technical guidance to the council.

The Pharmaceutical and Healthcare Association of the Philippines (PHAP) appealed to the government in late May to recall the price control policy, citing a potential P28 billion in foregone public revenues with a P57 billion decrease in sales.

The DoH is mandated to conduct a regulatory impact assessment, through a third-party research firm, after a year of the policy’s implementation.

“The said assessment considers whether or not the MRP (maximum retail price) has led to (1) improved patient compliance  adherence to medication, (2) reduce out-of-pocket health expenses; and (3) patient satisfaction,” the DoH guidelines say.

The existing list of medicines, on the other hand, will be reviewed after three to six months of implementation.

With the policy in effect, the DoH Pharmaceutical Division together with the Food and Drug Administration (FDA) and the Department of Trade and Industry (DTI) are authorized to monitor and penalize violators.

The MRP order applies to “all those who manufacture, trade, distribute, import, export, and wholesale or retail FDA-registered drugs and medicines, including medical and allied health practitioners, and to all persons, juridical or natural, involved in the provision of healthcare,” according to the guidelines.

Penalties range from P50,000 to P500,000 for the first violation, depending on the gravity and extent, and up to P5 million on the 5th and succeeding offenses. — Vann Marlo M. Villegas

Economic, political legacy of Japan’s Abe seen strong

By Charmaine A. Tadalan, Reporter

THE RESIGNATION of Shinzo Abe as Japan’s prime minister may affect the Philippines’ foreign policy towards the United States and China as well as its loan availment in the long term, analysts said separately at the weekend.

But in the immediate future, the ties developed between Mr. Abe and Philippine President Rodrigo R. Duterte are seen to keep political and economic relations strong.

Renato C. de Castro, international studies professor at De La Salle University,  said Mr. Abe, Japan’s longest-serving prime minister, served as a “bulwark of stability” that convinced Mr. Duterte to decide against severing ties with the United States and leaning towards China and Russia at the beginning of his term.

“That would be a great loss in terms of providing a sort of bulwark or at least a balancer in terms of the efforts of President to effect the dramatic change in Philippine foreign policy,” Mr. De Castro said by telephone on Saturday.

Mr. Duterte, in a statement on Saturday following Mr. Abe’s announcement on Friday that he is stepping down due to a chronic illness, said the bilateral relations between the two countries, “now a Strategic Partnership, greatly flourished during his (Mr. Abe’s) tenure.”

“What we have worked for and achieved together lays the foundation for an even closer friendship and cooperation between our countries in the future,” the Philippine leader said.

Mr. De Castro said Mr. Abe had talked to Mr. Duterte about the Philippines’ continued alliance with the US during a visit to Tokyo in 2016, and reiterated that message during the former’s visit to the latter’s hometown Davao in 2017.

He also noted that Mr. Abe’s administration provided 10 multi-purpose patrol vessels, intended to be deployed in the West Philippine Sea to strengthen the Philippine Coast Guard’s response to China’s threat in the disputed waters.

The former prime minister also strengthened financial assistance to the Philippines in the face of significant commitments offered by China.

“Prime Minister Abe made it a point for the president and for the Philippines to take Japanese into account,” Mr. De Castro said.

China in 2016 committed $24 billion to the Philippines, but “they (Japan) don’t have that amount of money, so they did everything that was possible to prevent us from making that dramatic change towards falling into the Chinese orbit.”

Maria Ela L. Atienza, a political science professor at the University of the Philippines, said the change in Japan’s leadership is not expected to dramatically shift foreign policy in the short term.

Ms. Atienza said changes may come later depending on developments in public dissatisfaction over Japan’s response to the coronavirus pandemic, the aging population, its relations with China and the US, and its pacifist constitution.

“Any change in Japanese foreign policy can have implications in the security of the Asia Pacific region,” she said in an emailed response on Sunday.

ODA
Mr. Abe’s successor will keep the post until the end of his term in September 2021, during which Ms. Atienza said Japan’s loans and grants will not likely be affected.

Japan has been the country’s top source of official development assistance (ODA), accounting for 42.66% in the first quarter this year with $8.537 billion in grants and loans.

“ODA  commitments will likely continue in the near future although COVID-19 (coronavirus disease 2019) has affected the economies of many countries in the world, even developed countries,” she said.

Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said Japan-Philippine ties will likely be sustained, citing the good relations between Messrs. Abe and Duterte as well as the Philippines’ improved credit rating.

“The resignation of Japan Prime Minister Abe would definitely require some adjustments for the Philippines to also further develop good diplomatic and business ties with the new Prime Minister of Japan, though continuation of good ties between Japan and the Philippines would likely remain/sustain as seen in many years/decades,” he said over email on Saturday.

He also pointed out that Japan Credit Ratings Agency’s upgrade of the Philippines’ rating in June, despite the impact of the COVID-19 pandemic, is a sign of “improved international investor confidence.”

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