Home Blog Page 7825

Banks’ bad loans hit 13-year high

REUTERS
A Philippines Peso note is seen in this picture illustration June 2, 2017. — REUTERS/THOMAS WHITE

By Luz Wendy T. Noble, Reporter

NONPERFORMING LOANS (NPLs) held by Philippine banks continued to rise in May, bringing the industry’s NPL ratio to the highest in 13 years amid the prolonged pandemic.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday showed that gross NPLs surged by 83% to P479.481 billion in May from P262 billion a year earlier. Bad loans also increased by 3.4% from the P463.659 billion in April.

This brought the industry’s gross NPL ratio to 4.49% in May, from 2.43% during the same month last year and the 4.35% in April.

The NPL ratio matched the 4.49% recorded in June 2008 and is the highest since the 4.61% in May 2008 amid the global financial crisis.

Loans are considered nonperforming once they are left unpaid for at least 30 days beyond the due date. These are considered a risk to banks’ asset quality as borrowers are likely to default on these debts.

Analysts said the continued rise of bad loans reflect the huge impact of the pandemic on borrowers.

“They [borrowers] may have the capacity to pay at the time of the loan approval but because of the continued uncertainties and risks to income capacities, the likelihood of default is relatively higher,” Asian Institute of Management economist John Paolo R. Rivera said in an e-mail.

Bad loans will likely continue to increase in the next months amid the elevated unemployment rate and muted economic activities, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.

“The fate of the banks’ balance sheets rests on how quickly we can get economic activity back on its feet as this would ensure rising incomes that would in turn be used to make these loan payments on time,” Mr. Mapa said in an e-mail.

Meanwhile, the banking industry’s loan portfolio shrank by 1.2% to P10.669 trillion in May, as lenders remained risk averse as the crisis continued. Month on month, the loan portfolio inched up by 0.18% from the P10.649 trillion in April.

In May, past due loans reached P593.346 billion, rising by 5.2% to P563.761 billion from a year ago. These loans made up 5.56% of the total loan portfolio versus 5.22% a year ago.

Restructured loans surged by 447% to P263.514 billion in May, from P48.09 billion a year ago. With this, the ratio rose to 2.47% from 0.45% last year.

As bad loans piled up, lenders beefed up their loan loss reserves by 50% to P383.389 billion in May, from P254.945 billion last year. This brought the ratio to 3.59% from 2.36% a year ago.

However, lenders’ NPL coverage ratio — a gauge of allowance for potential losses due to soured loans — slumped to 79.96% from 97.31% in May 2020.

Analysts noted banks may start to lend more once the economy fully reopens, although this would depend on the pace of the vaccine rollout.

“The only way banks will be less risk averse to take on more loans is through speeding up the national vaccination program so the economy can be opened allowing for more sustained income-generating capacities for both firms and consumers,” Mr. Rivera said.

Bank lending continued to decline for the sixth straight month by 4.5% in May, although slower than the 5% fall in April. This, as lenders tightened their credit standards to guard against the rise in bad loans while borrowers shied away from credit activities during the crisis.

Meanwhile, Mr. Mapa said the Financial Institutions Strategic Transfer (FIST) Law may not be able to provide “immediate help” for banks. In this regard, he said keeping policy rates at record lows will be more helpful for both banks and borrowers.

“This highlights the need for BSP to retain its accommodative stance as any tightening of monetary policy may result in even higher NPL ratios and an even slower recovery in bank lending,” Mr. Mapa said.

Republic Act 11523 or the FIST Law will allow lenders to offload their nonperforming assets to FIST corporations. The BSP earlier said they expect at least P152 billion in bad assets will be sold by financial institutions to take advantage of the law, but there have yet to be a FIST corporation to purchase these assets thus far since the law was legislated in February.

The central bank has kept its key policy rate at a record low of 2% to support the economy while the coronavirus remains a threat.

PHL manufacturing output’s rebound continues in May

REUTERS

THE COUNTRY’S factory output continued to rebound in May as demand for manufactured goods grew amid the reopening of external markets coupled with low base effects.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the volume of production index, surged to 265% year on year in May. This was faster than the revised 155.6% annual increase recorded in April and a reversal of the 73.2% drop in May 2020.   

The May result marked the second straight month of growth in manufacturing output following the 13 straight months of contraction.

Philippine factory output continues rebound in May (2021)

So far, factory output growth averaged 1.1% this year.

Eighteen out of 22 industry divisions posted year-on-year growth in May, nine of which were in triple digits. Leading the recovery was the manufacture of coke and refined petroleum products, which saw its volume of production grew by 14.7 times in May from the same month last year. 

Other sectors that saw robust growth were wood, bamboo, cane, rattan articles, and related products (301%); fabricated metal products, except machinery and equipment (275.6%); leather and related products, including footwear (155.9%); basic metals (138.3%); transport equipment (130.2%); wearing apparel (126.5%); furniture (118.7%); and other non-metallic mineral products (103.3%).

On the other hand, the PSA reported annual declines in the manufacture of tobacco products (-68.7%); printing and reproduction of recorded media (-43.5%); chemical and chemical products (-3%); and basic pharmaceutical products and pharmaceutical preparations (-2.9%).

Capacity utilization — the extent to which industry resources are used in producing goods — averaged at 66.1% in May, up from the average of 64% recorded in the previous month. 

Eighteen out of 22 industry divisions averaged a capacity use rate of at least 50% in May, led by the manufacture of furniture (83%), other non-metallic mineral products (79.6%), and machinery and equipment except electrical (74.2%).

“The faster triple-digit year-on-year growth in manufacturing volume of production magnified [the] further reopening of the economy… on top of the low base a year ago, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in an e-mail.

Quarantine restrictions were eased starting May, as new daily coronavirus infections dropped from the peak in April.

Mr. Ricafort also noted the sharp growth in manufacturing was consistent with the recovery in exports and imports as more economies start to recover.

Latest PSA trade data showed an annual growth of 72.1% for exports and 140.9% for imports in April – the fastest recorded rates since at least 1991. Exports of manufactured goods grew by 88.1% and accounted for more than 80% of total export sales that month.

In a phone interview, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. ascribed the rebound to the reopening of markets abroad. He noted, in particular, the increased demand in manufactured goods in China due to “revenge spending” or the phenomenon characterized as a buying spree to make up for missed shopping during the COVID-19 pandemic. 

Mr. Ortiz-Luis said that factory output should continuously improve barring accidents or the local transmission of new COVID-19 variants. Still, he cited risks to this outlook such as space and container shortages which cause freight rate surges and shipment delays and losses.

“Until now, the problem has not been solved and the situation may be worsening,” he said.

For RCBC’s Mr. Ricafort, the massive annual growth in manufacturing “could still continue” until around July to August due to base effects but would taper off thereafter around September “as the low base [effect] fizzles out and starts to rise sharply by then.”

Mr. Ricafort said other growth drivers in the coming months such as the further reopening of the economy amid increased vaccine rollouts, the increase in infrastructure spending, the reduced corporate tax rates brought by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, the sustained low interest rates, and the increase in expenditures attributed to the May 2022 elections that would benefit manufacturing industries that are part of the supply chain.

“However, offsetting risk factors locally and globally are the more contagious coronavirus variants such as the Delta and Lambda variants that entail risks of further lockdowns and travel restrictions that could have adverse effects on manufacturing activities, going forward,” the economist added. — Nadine Mae A. Bo

Underspending, poor implementation hounded ADB-backed project in PHL

AN AGRARIAN reform project aimed at reducing poverty in rural areas in the Philippines was deemed “less than successful” due to underspending and poor implementation, the Asian Development Bank (ADB) said.

In an assessment report, the multilateral lender said the Agrarian Reform Communities Project II was unable to address delays and policy roadblocks, and “less than efficient” in using the funds.

“The project completion report rated the project less than effective although it was not possible to assess the project outcome targets due to the lack of reliable data,” the ADB said.

While the ADB-backed project was aligned with the government’s medium-term plan, it noted this was not aligned with the cost-sharing policy of local government units (LGUs) for rural infrastructure.

The target to implement 537 sub-projects across 19 provinces was too ambitious according to the ADB, since LGUs were only able to shoulder 10-20% of the total cost. This is far from the 50% share required of LGUs under the revised cost-sharing policy with the National Government.

Issues over the increase in equity requirement were not sufficiently addressed and heavily affected the outcome of the project.

The ADB also cited the “incomplete and inconsistent guidelines” for the LGUs to gain access to the performance-based grant system.

Underspending and inefficient use of funds also hounded the project’s implementation.

The $208.4-million project was implemented from 2009 to 2017. The ADB lent $70 million for the project, the OPEC Fund for International Development (OFID) granted $30 million while the remaining $108 million were sourced from the Department of Agrarian Reform (DAR, $52.4 million) and through equity by LGUs ($56 million).

However, only 57% or $118.7 million were actually spent: $21.8 million or 31.1% of ADB’s loan; $12.8 million or 18.3% of OFID loan; while the government released $64.75 million, or 60% of its estimated share.

“The project spent 70% of its approved budget on rural infrastructure and delivered only 40% of FMRs (farm-to-market roads) and rehabilitated 38% of irrigation schemes,” the ADB said.

The ADB noted there was 33% overspending on project implementation and management, as well as implementation delays.

The project’s development impact was likewise rated as “less than satisfactory” even after 161 agrarian reform communities directly benefited versus the target of 152 communities, since capacity-building for local organizations fell short.

The target to expand crop gross margins and yield positive returns for businesses was “partially achieved,” but the project failed to provide improved land titles to 22,000 agrarian reform beneficiaries since only 10.3% received their titles.

Around 770 kilometers of farm-to-market roads were constructed and 4,649 hectares of small-scale irrigations were established, making up 40% and 38% of the targets, respectively.

The ADB recommended better collaboration among state offices in implementing projects, especially during the design and planning phase.

“Where LGUs are key to a project, a thorough assessment of technical, administrative, and financial capacity should be completed in advance,” the ADB said.

BusinessWorld sought DAR for comment on Thursday but did not get a response by the paper’s deadline.

The ADB has set a $3.9-billion lending program for the Philippines this year, slightly lower than the $4.24 billion it lent to the country in 2020. — Beatrice M. Laforga

New task group to focus on streamlining permit process for energy projects

UNSPLASH

By Angelica Y. Yang, Reporter

THE ESTABLISHMENT of the energy virtual one-stop shop (EVOSS) Task Group, which aims to streamline the permitting process, is expected to help attract more investors to the country’s energy sector, government officials said.

“It will be good for the energy sector as it will encourage more investors as processes are streamlined for project permitting and approval,” Energy Regulatory Commission (ERC) Commissioner-in-Charge Floresinda G. Baldo-Digal told BusinessWorld on Viber on Wednesday.

President Rodrigo R. Duterte signed on July 2 Executive Order (EO) 143 which ordered the creation of the EVOSS Task Group that will take on the power and functions of the steering committee as well as additional responsibilities.

Ms. Baldo-Digal said the creation of the task force will “enhance the implementation” of Republic Act (RA) 11234 or the act establishing the EVOSS to streamline the permitting process for power generation, transmission and distribution projections. Signed in 2019, the law created the EVOSS steering committee but only with a two-year life span.

Under the new EO, the EVOSS Task Group’s additional obligations include the streamlining of processes, continually reviewing permitting and licensing requirements, ensuring compliance to the law, and monitoring the performance of the one-stop shop.

“With EVOSS getting a second lease on life, the task group can continue its work in terms of reducing the number of processes and reducing the number of offices that any investor will have to go through before putting up a plant. Now this task group is given the same powers (as the EVOSS steering committee) to fight the red tape,” Senator Sherwin T. Gatchalian, who chairs his chamber’s energy committee, told BusinessWorld in a phone call on Wednesday.

He added that with the signing of EO 143, Mr. Duterte recognized the need to implement the automation of the permitting processes required when embarking on energy projects.

Mr. Gatchalian said the task group must set a definite timetable on automating the permitting processes.

“I’m hoping that through the extension of (the EVOSS’) life through the EO, I’m hoping that they put concrete time table for implementation. It cannot exist forever. Fighting red tape in energy should also…reach a point where efficiency is being met,” he said.

The task group is chaired by the Office of the President, with the Energy secretary as the vice-chairperson. The heads of the departments of Agriculture, Agrarian Reform, Environment and Natural Resources, Interior and Local Government, Information and Communications and Technology are also members of the task group, along with those in charge of the Energy Regulatory Commission, National Commission on Indigenous Peoples, the National Water Resources Board, the market operator and the system operator. Selected representatives from the power generation, transmission and distribution sectors are also included as members.

Unlike the EVOSS steering committee, the newly formed task group does not have a set life span.

The EVOSS is an online system which allows for the coordinated submission and processing of information related to applications covering new power generation, transmission and distribution projects, according to the Department of Energy.

Make me laugh: New channel focuses on Pinoy comedy, old and new

MISS watching the antics of Tito, Vic, and Joey or the classic comedy style of Dolphy? Come August viewers can watch old comedy favorites on a new channel focusing on Pinoy comedy, both old shows and new.

Direct-to-home satellite provider Cignal has partnered with TV and film production company APT Entertainment, Inc. on Buhay Komedya or BuKo, the first 24-hour local comedy channel that focuses on Filipino entertainment.

“In Philippine television we really don’t have a repository where people, audiences can look back and go back to content that maybe [they] want to watch. We rarely do replays on free TV, that’s one side of content that we feel people  really want,” APT CEO and President Michael Tuviera said during an online press launch on July 5 via Zoom.

“We want especially the younger audiences to see how the masters did it. What kind of content made people fall in love with all of these, not just the comedy brands of the shows, but also the great comedians of the past,” he said of the selected classics which will premiere on the channel.

The BuKo channel, which will launch on Aug. 2, offers a lineup of comedy classics, sitcoms, and gag shows, and original programs. The channel will offer comedy and lifestyle shows classified into three programming blocks: “Tawang Pinoy Klasiks!,” “Throwback Tawanan,” and “BuKo Originals.”

Tawang Pinoy Klasiks!” will contain Pinoy comedy classics such as Iskul Bukol, Wow Mali, Bubble Gang, OGAG, Loko Moko, and Tropang Trumpo. Meanwhile, “Throwback Tawanan” will have a variety of popular comedy series and game shows including Pidol’s Wonderland, Celebrity Samurai, Mac & Chiz, and Sugo Mga Kapatid.

With the return of old comedy favorites, Mr. Tuviera said that they are monitoring content which may be offensive to current and younger audiences. He noted that there is no content that they have gone through so far that is no longer acceptable or is now considered offensive.

“We also try to respect the creators. A certain episode or scene may be a product of its time, and we would like to respect that,” Mr. Tuviera said. “We always want to strike that balance. We don’t want to be overly critical and censor everything because then, it kind of loses the point of re-experiencing this content.”

Not everything on the channel is old.

“BuKo Originals” is their flagship block of Pinoy humor and creativity in a lineup of original programs.

“BuKo will not only be known as a repository of old content —  that’s why we want a mix of the old and the new. We are also going to do a lot of original content,” COO and CFO of APT Entertainment, Inc. Jojo Oconer said.

Featured in the “BuKo Originals” block are #MaineGoals, a lifestyle-oriented show hosted by comedian Maine Mendoza where she will tick off tasks or “goals” from her checklist. In the show, Ms. Mendoza will be engaging in activities she has never done before and has always wanted to do.

Meanwhile, Kusina ni Mamang is a cooking show featuring comedian Pokwang cooking traditional Filipino dishes. She will  be accompanied by a young celebrity in the kitchen and they will eat the dish they prepared afterwards.

“She (Pokwang) really loves to cook,” Mr. Tuviera pointed out. “Her advocacy is teaching the younger generation. These older techniques and older dishes na baka hindi na natikman (that may not have been tasted) or experienced by the younger generation,” he said of the show, noting that recipes may not have been passed down and some ingredients are now more difficult to source.

The third original show is News Patol, hosted by the comic duo of Jose Manalo and Wally Bayola, a show bringing “mga patolang balita” or silly news.

With the lineup of shows, BuKo Channel positions itself as a “feel-good content channel” for all types of viewers.

“Cignal TV, Inc. is committed to continuously provide the best possible content for our viewers. It is an honor for us to partner with APT Entertainment, a stalwart in the industry when it comes to providing entertainment that resonates with Filipino audiences,” Cignal TV, Inc. FVP/Head for Channels and Content Management Sienna Maris G. Olaso said in a statement.

APT Entertainment is the production company behind the long-running noontime show Eat Bulaga!, films like Enteng Kabisote 10 and the Abangers, Die Beautiful, and three of the Shake, Rattle & Roll sequels, among many others.

Ms. Olaso added that Cignal aims to also showcase comedy classics and the channel’s original content to Overseas Filipino Workers (OFWs). “You want to bring back memories as well as want to share with them the fun times today.”

The BuKo channel will launch on Aug. 2 on Cignal TV Channel 2 and SatLite Channel 2, and on the Cignal Play app, available via the App Store and Google Play. — Michelle Anne P. Soliman

DoubleDragon, Jollibee partner for industrial REIT

DOUBLEDRAGON Properties Corp. and Jollibee Foods Corp. (JFC) are planning to create the country’s “first and largest” industrial real estate investment trust (REIT), which will be registered by 2022.

The REIT listing will be done via DoubleDragon’s industrial leasing unit, CentralHub Industrial Centers, Inc. Its portfolio includes industrial warehouse complexes for warehousing, commissary, cold storage facilities, and logistics distribution center.

“We are excited to work together with Jollibee in developing CentralHub into the largest landlord of industrial warehouses in the country. We see CentralHub become a major recurring income contributor to DoubleDragon,” DoubleDragon Chairman Edgar “Injap” J. Sia II said in a statement on Thursday.

In a separate disclosure, JFC said its board of directors approved of the plan to invest land properties worth around P2 billion and P1.9 billion in cash in CentralHub.

“JFC’s plan is to reduce assets tied to real estate properties by converting some of them into securities in REIT and by selling others directly to third parties,” JFC Chairman and Founder Tony Tan Caktiong said.

The JFC board approved the cash subscription to 1,564,410,000 common shares of CentralHub. Jollibee will also infuse 16.4 hectares of its industrial properties to CentralHub’s portfolio in exchange for additional common shares of CentralHub.

Additional commissary assets from JFC will bump up CentralHub’s total industrial land portfolio to 39.8 hectares. The assets for infusion will be valued by an independent appraisal company.

DoubleDragon, CentralHub, and JFC have signed a P3.97-billion binding agreement for the transaction.

“We will use the proceeds from the eventual IPO of CentralHub to finance real estate investments for our new stores and commissaries which we will convert again into more investments and shares in the REIT,” Mr. Tan Caktiong said.

Completion of the transaction is still subject to regulatory approvals. JFC is amending its articles of incorporation “to clearly and expressly set forth its authority to invest in, acquire, own and use real and personal properties, of every kind and description when such investments are done pursuant to the business objectives of the company.

Meanwhile, the exact dates for CentralHub’s REIT application and offer are still dependent on the agreement of JFC and DoubleDragon, as well as approval from regulatory bodies, among others.

Shares of DoubleDragon Properties at the stock market closed unchanged on Thursday at P12.10 each, while JFC stocks went down by P2.20 or 1.04% to finish at P210.20 each. — Keren Concepcion G. Valmonte

Films made for Netflix look more like TV shows — here’s the technical reason why

GARY OLDMAN and Amanda Seyfried in the Netflix film Mank. — NETFLIX

THE HISTORY of cinema as an art parallels its history as a technology. Ever wondered why the color in The Wizard of Oz is so saturated? Well, it wasn’t the first technicolor film, but it was the first to effectively advertise MGM’s new three-strip color process to a global audience. Why advertise something at half-mast?

This kind of technological innovation in cinema is, of course, spurred by economic motives. For instance, 3D thrived in three waves in direct response to the economic threats posed by new technologies: in the 1950s, in response to television, in the 1980s, responding to VHS, and in the 21st century in the face of increased online streaming. (Now we have 4DX, a gimmick one suspects won’t take off.)

In this era of digital cinema, with celluloid virtually replaced by video technology, the latest technological battle concerns image resolution.

A digital image is made up of pixels — little shapes (usually boxes) that are the smallest controllable element of the image. Resolution refers to the number of pixels appearing in an image, and is usually measured in pixels per inch. As a rule, the more pixels, the crisper the image — that is, the sharper the edges of the subject appear.

In digital cinema’s resolution wars, you will often hear people speak about 4K — as in, 4,000 — or 8K, or now even 12K resolution. This number refers to the number of horizontal pixels. A typical 4K digital cinema image for instance, has a resolution of 4,096 (horizontal) x 2,160 (vertical) pixels.

Image capture resolution is only one factor in how an image looks — dynamic range, that is, difference between the darkest and lightest parts of the image, is another. But most cinematographers and techies agree the camera’s resolution is crucial to the crispness of the image.

In 2018, Netflix were snubbed by the Cannes Film Festival on the basis Netflix-produced films are not true cinema. This year again, there are no Netflix-produced films in the festival competition due to a rule all films selected to compete must have a local theatrical release.

Cannes is right. Most made-for-Netflix productions don’t look like the cinema we’re used to. Why? There’s a technical answer. Though the company streams some films that are not “Netflix Originals,” it requires narrative feature films made for Netflix be shot on cameras with a “true 4K UHD sensor.”

In other words, the sensor — which detects and conveys the information required to make an image — must be at least 3,840 pixels wide, or “Ultra High Definition.”

This technical specification is strikingly evident in David Fincher’s recent Netflix Original production, Mank, a black and white biopic about Herman J. Mankiewicz’s ghostwriting of Citizen Kane.

An old black and white film, shot on celluloid, has a grainy texture that draws the eye into and around the image. This is partly the result of the degradation of the film print, which occurs over time, but primarily because of the physical processing of the film itself.

All celluloid film has a grainy look. This “grain” is an optical effect related to the small particles of metallic silver that emerge through the film’s chemical processing.

This is not the case with digital cameras. Thus, video images captured by high resolution sensors look different to those shot on celluloid. The images in Mank look flat, depthless, they are too clean and clear.

This is not as much of a problem on a big screen, when the images are huge, but the high resolution is really noticeable when the images are compressed on the kind of domestic TV or computer screens most people use to stream Netflix. The edges look too sharp, the shades too clearly delineated — compared to what we have been used to as cinemagoers.

The absurd thing is companies like CineGrain now sell digital overlays of film stock that can endow video with the grainy film look. (Their company motto is “make digital more cinematic using CineGrain.”) The natural result of the physical process has been superseded by video, but digital cinema makers reintroduce this as one component in achieving a “film look.”

Netflix does allow limited exceptions to its rule, with use of non-approved cameras requiring its explicit approval and a “more flexible” approach to non-fiction productions. According to Y.M. Cinema magazine, 30% of Netflix’s “best movies of 2020” were made on non-approved cameras. Still, in stipulating the use of 4K (or higher) sensor cameras, Netflix radically reduces the aesthetic autonomy of film directors and producers.

If we think of Netflix as a production studio, this is not surprising — all studios (like all major corporations) dictate the nature of their products, including the aesthetics and feel of their films. But this requirement means their productions look similar, and the imagery (to a cinephile, anyway), too clinical.

All film festivals, distributors, and networks request delivery of films conforming to their specifications, but this usually has nothing to do with the source camera behind the delivered file. If it looks and plays well, it looks and plays well.

The film Open Water (2003), for example, which made over $50 million at the box office (from a budget of under $200,000), was shot on mini-DV, a low quality and now obsolete video format, but it perfectly suited the film and thus works.

Netflix, in stipulating 4K camera sensors, reproduces the assumption higher resolution is necessarily better, for all (or even most) films.

But one of the reasons American film noir still looks so good — or the New Hollywood films of the 1960s and 1970s, like Easy Rider and Bonnie and Clyde — is partly because of the celluloid technology itself, in all its glorious granularity. The beauty of these cinematic images has nothing to do with the sharpness of the edges of the photographed subjects.

From where is this assumption that sharper images are better, and more aesthetically effective? Art has always sought to say something in its deviation from its realistic reproduction of the world — that is, in its expression.

As with all technological innovation in a capitalist context, this assumption stems from the competitive impulse to appear to be doing something better than everyone else — the bigger, more expensive, clearer, the better. But when it comes to aesthetics, this is a redundant form of economy.

Ari Mattes is a Lecturer in Communications and Media, University of Notre Dame Australia

SMC lists ‘jumbo’ P30-B first tranche bonds

SANMIGUEL.COM.PH

SAN Miguel Corp. (SMC) listed the P30-billion first tranche of its shelf-registered bonds at the Philippine Dealing & Exchange Corp. (PDEx) on Thursday.

“We are very much delighted to start the second half of 2021 by welcoming back a long-standing frequent issuer, San Miguel Corp., to list this jumbo P30-billion bond,” PDEx President and Chief Executive Officer Antonino A. Nakpil said during the virtual listing ceremony.

San Miguel’s six-year Series I due 2027 with a 3.3832% per annum rate forms part of its P50-billion shelf-registered fixed-rate bonds.

The P30-billion issue is said to be the largest bond issued and listed by a non-financial institution.

“We are also happy to note the breadth of investors that this bond size reached. At 6,097 holders, which — well, not a record in itself — is exceeded only by San Miguel’s own subsidiary, SMC Global Power’s issues that have had 6,836 and 6,307 holders,” Mr. Nakpil added.

The company now has P90-billion worth of PDEx-listed bonds, which is 6.36% of the total outstanding corporate bonds.

Including other business units of San Miguel, Mr. Nakpil further reported that the listed conglomerate has P244.47 billion or 17.21% of total listed issues. The PDEx currently has a total of P1.42-trillion tradable corporate debt instruments issued by 53 companies with 200 securities.

“On behalf of our Vice-Chairman and President Ramon S. Ang, allow me to express our utmost appreciation to everyone who worked with us in achieving this P30-billion issuance out of our P50-billion shelf-registration,” San Miguel’s Senior Vice-President, Chief Finance Officer, and Treasurer Ferdinand K. Constantino said.

San Miguel’s issuance is the 11th listing at the PDEx this year, which brought the year-to-date total to P134.24 billion.

Meanwhile, shares of San Miguel at the stock market rose by 0.26% or 30 centavos to close at P117.30 each on Thursday. — Keren Concepcion G. Valmonte

K-pop artists dominate Twitter Spaces

FREEPIK

TWITTER is already a space for K-pop fans to Twitter to talk about the latest news and trends in the K-pop scene, so it comes as no surprise that K-pop artists are very popular on Twitter Spaces, a space where fans can listen and join K-pop artists’ live audio conversations. As of June 30, three of the Top 5 Twitter Spaces with the most listeners in the world have included K-pop artists.

Fans of artists like NCT (@NCTsmtown), TWICE (@JYPETWICE), BamBam (@BamBam1A), LOONA (@loonatheworld), and MonstaX (@OfficialMonstaX) among many others, have been able to listen to their favorites via live audio.

GOT7 BamBam (@BamBam1A) set the record for the most listened-to Space since launch, with his Space on June 9 (https://twitter.com/BamBam1A/status/1402624948124798976). NCT (@NCTsmtown) was the first K-pop artist to host a Space, and set the record for the most listened-to Space before Spaces even launched to the public (https://twitter.com/NCTsmtown/status/1369945981567922176). TWICE (@JYPETWICE) was the first K-pop girl group to host a Space and connect with their fans, when they led an “After Party” Space of the comeback premiere live-streaming of Taste of Love on June 9 (https://twitter.com/JYPETWICE/status/1400829738793332742).

In addition to the firsts set by the above artists, other firsts include Sandara Park (@krungy21, 2NE1) becoming the first K-pop artist to join a Space as a speaker, and to have an interactive Q&A with fans on March 8. #KCON:TACT (KCON (@KCON_official) became the first series of K-pop talk shows on Spaces, established with two K-pop artists with pairings like ONF (@WM_ONOFF) and ONEUS (@official_ONEUS), SF9 (@SF9official) and P1Harmony (@P1H_official).

K-pop artists also use #TwitterBlueroom to connect with their fans via livestreamed Q&A. ENHYPEN (@ENHYPEN) went live on Spaces immediately before going Live on #TwitterBlueroom, giving fans who were waiting for the Blueroom a to connect with the group. ASTRO (@offclASTRO) used Spaces as an after party, going live on #TwitterBlueroom, then switching to Twitter Spaces after the Blueroom finished.

Even the next wave of K-pop artists can be found on Spaces. As Twitter’s recent research “K-pop Generations Analysis by Twitter Usage”  shows, K-pop artists are now utilizing Twitter even before their public debuts to drive excitement and gain fans, like new K-pop boy group JUST B (@JUSTB_twt), which debuted at the end of June.

Other parts of K-culture have also been using Twitter Spaces. Influential Korean film magazine Cine21 (@cine21_editor) hosted a Space for six prominent movie journalists around the 2021 #Oscars, where the journalists shared their predictions and analysis live, as well as discussed major moments like Minari star Yuh-Jung Youn’s win. In another K-culture Space, before the #TwitterBlueroom live-streaming for the Korean movie The Book of Fish, the film’s actors Seol Gyeong-gu and Byun Yo-han, and film director Lee Joon-ik joined a Twitter Space to drive up excitement. Hip Hop artist Simon Dominic and popular webtoonist Jongbeom Lee are among others that have had conversations with fans on Spaces.

YeonJeong Kim, Head of Global K-pop & K-content Partnerships at Twitter was quoted in a statement as saying, “One of fans’ favorite parts of #KpopTwitter is feeling closer to their favorite artists, and Twitter Spaces bring them even closer than ever before. Spaces is where live audio conversations happen, and it’s just getting started, meaning that fans can look forward to even more of their favorite K-pop, K-movie, and K-drama stars trying new ways to connect using Spaces live.”

CAVITEX C5 Link seen operational next year

PHILIPPINE STAR/EDD GUMBAN

THE Department of Public Works and Highways (DPWH) said on Thursday it expects the CAVITEX C5 Link, a segment of the Manila-Cavite Toll Expressway Project, to be completed next year.

“With the progress we have seen on-site, we are optimistic that the CAVITEX C5 Link Segment will be completed [next year],” DPWH Secretary Mark A. Villar said in a statement.

“We really look forward to the completion of this project because aside from helping decongest EDSA, Sales Road and other major thoroughfares, this expressway will help reduce the travel time of our motorists from CAVITEX to Makati and Taguig and vice versa by 45 minutes,” he added.

The Manila-Cavite Toll Expressway Project is a joint venture project of the Cavitex Infrastructure Corp. (CIC) and the Philippine Reclamation Authority.

CIC said its representatives and officials from the DPWH inspected the progress of CAVITEX C5 Link segments 2 and 3A2 on Wednesday.

Segment 2 is a 1.9-kilometer 2×3 lane portion that will connect CAVITEX R1 to Sucat, bypassing Sucat Road and Quirino Avenue.

Meanwhile, Segment 3A2 is a 1.6-kilometer 2×3 lane portion that will connect Merville to RSG Subdivision in Pasay.

“Together with CIC, we continue to double our efforts, all the while looking after the safety of the workers to ensure we complete Segment 3A2 by the first quarter of 2022 and Segment 2 by the third quarter, also of next year,” Mr. Villar said.

CIC said CAVITEX C5 Link’s operational segment 3A1 from Merville to Taguig currently serves an average of 12,000 motorists per day.

“Upon completion of the whole 7.7-kilometer segment, it will benefit around 50,000 motorists, particularly those coming from Taguig, Makati, Las Piñas, and Pasay,” it noted.

CIC is a subsidiary of the Metro Pacific Tollways Corp., the tollways arm of Metro Pacific Investments Corp., one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Tom Jones joins small-gig kick-start for UK live music scene

RAPH_PH /EN.WIKIPEDIA.ORG/
RAPH_PH /EN.WIKIPEDIA.ORG/

LONDON —  Tom Jones and Rag’n’Bone Man are the star names in a line-up of singers scheduled to give more than 300 concerts at grassroots venues across Britain this summer, helping to kick-start a live music industry shut down during coronavirus disease 2019 (COVID-19).

The National Lottery is contributing 1 million pounds ($1.38 million) towards touring and production costs for the Revive Live Tour, which it launched on Wednesday along with UK charity Music Venue Trust.

“Musicians can record in their bedrooms, but they can’t learn to perform in public without a place to play,” veteran crooner Jones, who will give a one-off show in September at the Cambridge Junction in Cambridge, said. “Without that, there is no way you can communicate directly to people.”

Chart topper Rag’n’Bone Man, singers Mahalia, James Arthur, Frank Turner, and Sam Fender as well as band Fontaines D.C. will also perform one-off shows. Revive Live will also feature more than 20 tours with artists such as The Futureheads, The Magic Gang, Olivia Dean, and Twin Atlantic.

Like elsewhere, live music in public ceased in Britain during its coronavirus lockdowns. According to a Music Venue Trust survey, UK grassroots venues are carrying collective debt of 45 million pounds ($62 million). — Reuters

Digital banking sector to grow amid rise in online transactions

KATEMANGOSTAR /FREEPIK.COM
ONLINE TRANSACTIONS have climbed due to the coronavirus pandemic. — KATEMANGOSTAR /FREEPIK.COM

THE RISE in online transactions has opened opportunities for digital banking as many Filipinos remain unbanked or underbanked, Fitch Solutions Country Risk & Industry Research said, although the country’s underdeveloped digital infrastructure may limit the sector’s growth.

“The Philippines’ large unbanked population, one of the highest in South East Asia, creates a sizeable market on which to leverage fintech services which we believe will offer investors positive returns,” Fitch Solutions said in a note on Thursday.

“Regulatory backing and the country’s demographic environment have created a supportive environment for the uptake of mobile banking services, giving a positive outlook for investors,” it said.

Only 29% of adult Filipinos had accounts with financial institutions as of 2019, leaving some 51.2 million unbanked, based on data from the central bank’s Financial Inclusion Survey that year.

The Bangko Sentral ng Pilipinas (BSP) hopes to bring 70% of adult Filipinos into the banked population by 2023. In that same year, it also wants 50% of transactions, both in terms of volume and value, to be done digitally. The central bank said Filipinos are becoming more comfortable with cashless payments due to the coronavirus pandemic.

Aside from the BSP’s financial inclusion initiatives, Fitch Solutions noted the new framework called CHIP (Connect, Harness, Innovate, and Protect) adopted by the Department of Information and Communications Technology will also be instrumental in the country’s digital transformation. The framework looks to expand the uptake of digital services in mobile payments, telemedicine, and e-commerce.

“Initiatives like CHIP that aim to digitize government services and create a conducive environment for the development of fintech products are vital for their uptake and realizing returns,” Fitch Solutions said.

It noted that government subsidies to about 6 million Filipinos as well as the relatively high mobile penetration rate of 58% in the country will also help boost digital transactions and open up opportunities for fintech players.

On the other hand, Fitch Solutions said interest in the sector could be dampened by “poor” digital infrastructure in the country, which it noted as a laggard in the region. It said this has restrained the potential of e-commerce in the Philippines.

“Fixed broadband is extremely limited across the archipelago and users often experience noticeable latency. Drivers of digital payments uptake like e-commerce use is restricted and often a frustrating experience,” it said.

Because of this, players that are part of telco conglomerates have the competitive advantage, Fitch Solutions said. It noted that Globe Telecom, Inc.’s mobile wallet GCash already has 31 million users, with transactions already surpassing the P1-trillion mark. Meanwhile, PayMaya Philippines, which is owned by PLDT, Inc., had 28 million users and saw the value of transactions coursed through the platform surge by 3.5 times at end-2020 from the prior year.

“Gaining competitive edge in the market will be challenging but Voyager has recently moved into adjacent verticals such as providing business loans and health insurance to augment its offering,” Fitch Solutions said.

Voyager Innovations, where PLDT is the main shareholder, last month raised $167 million for the expansion of PayMaya, including the establishment of a digital bank.

The BSP has granted digital banking licenses to the Overseas Filipino Bank, Tonik Digital Bank, Inc. (Philippines), and UNOBANK. The Monetary Board initially set a cap of five licenses following the establishment of its digital banking framework, but the central bank has said it is open to granting more, depending on demand.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — L.W.T. Noble

ADVERTISEMENT
ADVERTISEMENT