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Peso seen to depreciate vs the dollar on rising US yields, global oil prices

THE PESO is expected to weaken further versus the dollar in the next three to six months amid higher US bond yields and oil prices, Fitch Solutions Country Risk and Industry Research said. — BW FILE PHOTO

THE PESO will continue depreciating versus the dollar in the next three to six months due to headwinds such as higher US bond yields and oil prices, as well as the fresh surge in infections, Fitch Solutions Country Risk and Industry Research said in a report.

“We believe emerging market currency volatility, including for the peso, is likely to remain elevated over the coming months, while oil prices will remain elevated will be an additional headwind to the currency,” Fitch Solutions said in a note on Monday.

It noted the peso has weakened by 1.2% as of March 16, making it an underperformer in the broader MSCI Emerging Markets Currency Index that depreciated by 0.6% in the same period.

Global developments including rising US bond yields and oil prices are expected to cause the peso to decline further versus the dollar, Fitch Solutions said. It expects the unit to move at an average rate of P48.40 per dollar this year from P47.50 previously.

“Our view for a temporary trend of higher US Treasury yields means emerging market currencies are likely to suffer, particularly in overvalued or growth underperforming markets,” Fitch Solutions said.

US benchmark yields have been rising in the past weeks, with the 10- and 30-year Treasury papers reaching their highest yields since January 2020 and August 2020 on Thursday, Reuters reported.

Meanwhile, Fitch Solutions said the increase in oil prices puts pressure on the peso’s strength as this could increase the country’s import bill.

The increase in infections here has also hurt investor sentiment in the country and local financial markets, Fitch Solutions said.

“Another lockdown could see foreign investor sentiment around the peso weaken even further,” it said.

Officials from the Bangko Sentral ng Pilipinas (BSP) meanwhile said the currency is likely to remain stable even with these risks and as the crisis drags on.

“Possible forces that can support the peso will be expected pickup in demand from the external sector as the global economy continues to improve,” BSP Department of Economic Research Senior Director Zeno R. Abenoja said in an online briefing on Friday.

The central bank last week said it expects both exports and imports to grow by 8% (from 5%) and 12% (from 8%) this year.

Last year, exports slumped 10.1% to $63.8 billion from a year earlier while imports shrank 23.3% to $85.6 billion, based on data from the Philippine Statistics Authority.

“[W]e also foresee the GIR (gross international reserves) remaining adequate, this constitutes a good factor and could also support the peso moving forward,” Mr. Abenoja added.

Latest central bank data showed GIR stood at $109.082 billion as of end-February. The BSP expects the country’s reserves to reach a record $114 billion by yearend.

“We actually have become more optimistic… All of these are going to argue of continued stability in our foreign exchange position,” BSP Deputy Governor Francisco G. Dakila, Jr. said at the same briefing. — L.W.T. Noble

Filinvest Land unit to increase overallotment option for share sale

THE board of directors of Filinvest Land, Inc. (FLI) has approved the initial public offering (IPO) of the common shares of subsidiary Cyberzone Properties, Inc., with the overallotment option increased to 163.42 million common shares from 163.08 million.

The company said a stabilizing agent or affiliate may avail of the option shares.

FLI will be offering up to 1.63 billion common shares of Cyberzone Properties through a secondary offer. Shares will be priced up to P8.30 apiece.

Same terms will apply to secondary shares and option shares.

The IPO is now going through the registration requirements of the Securities and Exchange Commission.

FLI will also need to adhere to the listing requirements of the Philippine Stock Exchange and the requirements of the revised implementing rules and regulations of the REIT (real estate investment trust) Act of 2009. — Keren Concepcion G. Valmonte

Ravers feel the music at socially distanced silent disco

BARCELONA —  Barcelona ravers have found a way to get round COVID-19 curbs on clubs by holding outdoor silent discos in some of the city’s best-known locations.

On Sunday, people welcomed the first day of spring by putting on their headphones and busting some moves at Mar Bella beach along Barcelona’s famous seafront —  all while respecting social distancing regulations.

“It’s been incredible, really cool. I didn’t expect there’d be so many people,” said therapist Andres Mellado, 41. “At first it seems a bit odd dancing in the middle of Barcelona and people were stopping to look, but it’s beautiful … It’s a great thing to do on a Sunday morning, come here and connect a bit to the music,” he said.

What started off as a fun meet-up between friends has grown into a regular Sunday morning event, the Tribu Silent Disco. One took place at the famous Magic Fountain in the neighborhood of Montjuic.

“(We asked ourselves) what could we do to boost dancing now that there are so many restrictions? And we had the idea to do it outdoors and with headphones,” Silent Disco co-founder Xavi Panella told Reuters.

“First we told friends and acquaintances and then people joined because we do it outdoors and in beautiful places where we don’t bother anyone and we maintain a safe distance.” — Reuters

Developers urged to adjust prices

THE GLOBAL coronavirus pandemic has affected the property industry, as foreign investments fell and projects are put on hold.

Travel restrictions and stringent bank loan standards have also hampered the property industry’s recovery.

“Developers should consider repositioning their products, readjusting their prices to suit the current market, and developing creative marketing strategies such as offering virtual house viewing in order to stay competitive during this challenging time,” Marivic Españo, P&A Grant Thornton chair and CEO, said in a statement.

On the other hand, demand for affordable housing appears strong as buyers take advantage of record-low interest rates and the slump in property prices.

“We anticipate a surge in transactions when the COVID-19 situation is more stable as we foresee a lot of first-time homebuyers and investors will be taking this opportunity to own a house for their own stay or for renting or for investment purposes,” Ms. Españo said.

In line with its ASEAN focus services launch, the member affiliates of Grant Thornton in the Philippines, Cambodia, Malaysia, Singapore, Thailand and Vietnam are holding a webinar on March 24 to give insights on the current market landscape and growth opportunities for the property industry in the ASEAN region.

Sarkunan Subramaniam, managing director of Knight Frank Malaysia, along with tax experts from Grant Thornton Philippines and other ASEAN offices, will be speaking in the webinar.

ABIC settles 2nd payment for PNB’s nonlife arm

ALLIED BANKERS Insurance Corp. (ABIC) has settled its second payment for its purchase of Philippine National Bank’s (PNB) nonlife insurance arm PNB General Insurers Co., Inc. (PNBGen).

The Tan-led bank told the local stock exchange on Monday that it received P450.7 million for the second installment payment from ABIC for the bank’s 65.75% stake in its nonlife insurance arm PNBGen.

The payment will be completed in three tranches, with the last one worth P450.7 million due on June 21.

“The sale of PNBGen shares is consistent with the bank’s objective to exit the nonlife insurance business being a non-core undertaking,” PNB said in the disclosure.

“The bank will remain in the bancassurance space to support its strategic growth plans and at the same time eliminate insurance underwriting risk,” it added.

PNB said proceeds of the transaction will be used for general business purposes.

PNBGen is the Tan-led bank’s nonlife insurance arm that offers coverage for fire and allied perils, marine, motor car, aviation, surety, engineering, and accident insurance, among others.

Meanwhile, ABIC is the non-life insurance arm of LT Group, Inc. The move to sell PBGen is part of LT Group’s efforts to consolidate its nonlife insurance businesses.

The share purchase agreement worth P1.523 billion was finalized on Dec. 29. The initial payment worth P521.8 million was also settled that day, followed by the first installment worth P100.156 million in January.

Based on net premiums written, PNBGen ranked 24th (P623.89 million) in 2019 while the ABIC placed 28th (P473 million), according to data from the Insurance Commission.

PNB saw its net income slump by 73% year on year to P2.6 billion in 2020 after increasing its loan loss reserves to P16.9 billion, five times higher than the year-ago level. It said it allocated loan loss reserves for the worst-hit sectors during the pandemic, including real estate, transportation, wholesale and retail trade to manage risk exposures.

Shares in PNB went down by 40 centavos to close at P22.85 each on Monday. — B.M. Laforga

FPH buys 712 million Lopez Holdings shares

SOME 712.2 million common shares or 15.68% of Lopez Holdings Corp.’s total issued and outstanding common shares were tendered and bought by First Philippine Holdings Corp. (FPH) through a block sale at the exchange on March 18.

FPH has submitted to the Securities and Exchange Commission its fourth amended final tender offer report on its acquisition of common shares from parent company Lopez Holdings.

The transaction amounted to P2.74 billion. FPH purchased the shares at the tender offer price of P3.85 apiece.

FPH waived the tender offer minimum prerequisite of 908.46 million issued and outstanding common shares, which is 20% of the total issued and outstanding offer shares of Lopez Holdings.

“Originally, there were other prerequisites pertaining to the delisting of the common shares of [Lopez Holdings]. Since the voluntary delisting of the common shares will no longer be pursued, these prerequisites will no longer be imposed by [FPH],” FPH said.

Lopez Holdings backed out of its plan to voluntarily delist from the exchange in January after FPH amended its tender offer.

The delisting of Lopez Holdings was dependent on the number of shares FPH will acquire.

Lopez Holdings planned to voluntarily delist if FPH acquired 45.56% of its total issued and outstanding shares. There was also a possibility of Lopez Holdings involuntary delisting if it falls below the minimum public ownership requirement of 10%.

The Lopez family’s Lopez Holdings is the holding firm for investments in broadcasting and cable, telecommunications, power generation and distribution, and banking. FPH is the parent firm for energy investments.

FPH shares at the stock exchange declined by 2.54% on Monday to close at P69.05 from P70.85 apiece, while shares of Lopez Holdings inched down by 0.29% or P0.01 to end at P3.39. — Keren Concepcion G. Valmonte

Lemcon PHL moves to ALogis warehouse

LEMCON (PHILIPPINES), Inc. signed a deal with AyalaLand Logistics Holdings Corp. (ALLHC) to take up 17,000 square meters (sq.m.) of gross leasable space in ALogis Biñan, Laguna Technopark.

The asset management solutions company will occupy 10 units of ready-built facilities for exclusive storage of infrastructure equipment for a telecommunications company. Lemcon is currently preparing the facilities for its workshops and warehouse space.

With an initial 11,000 sq.m., Lemcon is targeting to begin operations in April. Turnover of the remaining 6,000 sq.m. of the ready-built facilities is expected to be completed by July 2021.

“In our pursuit for excellence and client satisfaction, we needed to upgrade our warehouse facilities. Hence, we chose ALogis Biñan. A bright warehouse space, the facilities are located within an ideal industrial estate, with outstanding utilities and convenient access to major transport routes. Complemented with a clear and fair contract, we’re convinced that the move to ALogis Biñan in Laguna Technopark will be helpful for our sales organization and other long-term objectives,” Harsyl R. Tan, vice-president of finance at Lemcon (Philippines), said.

Laguna Technopark, which is owned and managed by ALLHC, expects 160 workers to be hired after Lemcon completes its relocation.

Other ALogis sites are located in Naic, Porac, Calamba, and Manila. ALogis Naic broke ground earlier this year.

Entertainment News (03/23/21)

Clara Benin joins Sony Music’s new Southeast Asian label

PHILIPPINE singer-songwriter Clara Benin has signed on with Sony Music Entertainment’s new Southeast Asian label, OFFMUTE. The label “offers emerging artists from across all genres a dedicated platform to pursue their own creative vision. The new label will support Southeast Asian artists in amplifying their music and building a strong pan-regional audience base through enhanced promotional, marketing and artist development, drawn from Sony Music’s global expertise and resources,” a press release explains. Signed alongside Benin are Indonesian alt-pop singer Mezzaluna and Malaysian recording star Liesl-mae. Clara Benin has amassed more than 25 million streams on combined music platforms Spotify and YouTube, and has headlined local and international music festivals, and won multiple awards including Wishclusive Contemporary Folk Performance of the Year for her song “I Rose up Slowly.” Singer-songwriter Mezzaluna, who comes from strong musical lineage, is known for her “deep, soulful vocals and an intensely personal storytelling style.” She will be releasing her debut single this year, which OFFMUTE will be amplifying across the region. Malaysia’s Liesl-mae is “making waves in the Malaysian music scene with her soothing, almost-lullaby-like tunes.” For details on OFFMUTE and its artists, visit https://www.facebook.com/offmuteASIA.

Five Films For Freedom now available via British Council

FIVE Films for Freedom, the world’s largest LGBTIQ+ digital campaign, is now available to watch on British Council’s global digital networks until Mar. 28. This year’s five short films from India, Spain, Sweden, the USA, and the UK explore emerging sexuality, trans-activism, homophobia, and genderless love. The films are free to view on British Council’s Arts YouTube channel. The British Council in the Philippines is partnering with the Film Development Council of the Philippines to bring this festival to audiences in the country. In the Philippines, Five Films for Freedom was viewed 7,000 times last year, premiering online a week after the country was placed under lockdown. This year’s campaign acknowledges that links between global LGBTIQ+ communities may have been adversely impacted by restrictions arising from COVID-19. In response, the campaign asks audiences to share the films widely using the hashtag #FiveFilmsForFreedom. Viewers are also invited to vote for their Five Films Favorite on the Five Films For Freedom homepage and select the film that resonates most for them via a web poll. The winning film will be announced on British Council social media channels prior to Mar. 28. The Five Films For Freedom 2021 are: Bodies of Desire (India), Indian poet Panikar’s work is the basis for this visual, poetic film capturing four sets of lovers in a sensual celebration of genderless love and desire; Land of the Free (Sweden) follows David and friends as they celebrate his birthday with a swim at the beach but the good mood swiftly changes after two straight couples walk by and laugh; Pure (USA) is about a young Black girl grappling with her queer identity and ideas of “purity”; Trans Happiness is Real (UK) is a documentary about transgender activists take to the streets of Oxford, England to fight anti-trans sentiments using the power of graffiti and street art; and, Victoria (Spain) which follows a bittersweet reunion between a trans woman and her ex, sparking tension and long buried resentment. Some films may contain nudity or sexual elements. Viewer discretion is advised.

RCBC closes sustainability bond offer

DEMAND for Rizal Commercial Banking Corp.’s offer of sustainability bonds reached P17.87 billion. — BW FILE PHOTO

RIZAL COMMERCIAL Banking Corp. (RCBC) has closed its offering of dual-tenor fixed-rate ASEAN sustainability bonds, with the proceeds to be used for general funding purposes and for financing eligible projects under its sustainable finance framework.

Demand for the peso-denominated papers reached P17.87 billion as of Friday, more than 5.9 times as much as RCBC’s initial target issue size of P3 billion, the bank said in a filing with the local bourse on Monday.

The 2.5- and 5.25-year securities will be issued at a fixed rate of 3.2% and 4.18%, respectively.

“Proceeds from the offering will be used to support the bank’s asset growth, refinance maturing liabilities, other general funding purposes as well as eligible loans defined in the bank’s Sustainable Finance Framework,” RCBC said.

The debt papers were offered from March 12 to March 19. They are expected to be listed on the Philippine Dealing and Exchange Corp. on March 31.

The sustainability bonds are part of RCBC’s P100-billion bond and commercial paper program. The papers also marked the bank’s sixth foray into the peso bond market.

Standard Chartered Bank served as the sole lead arranger and bookrunner for the transaction while RCBC Capital Corp. was the financial advisor for the bond issuance. Both parties were selling agents for the papers.

RCBC earlier sold P15 billion in ASEAN green bonds, P8 billion in ASEAN sustainability bonds, and a cumulative P31.15 billion from other bond offerings.

The bank’s net income decreased by 7% to P5 billion in 2020 from P5.388 billion in 2019 due to higher loan loss reserves amid the crisis.

RCBC shares closed at P17.50 apiece on Monday, inching up by 40 centavos or by 2.34% from the previous day. — L.W.T. Noble

How PSEi member stocks performed — March 22, 2021

Here’s a quick glance at how PSEi stocks fared on Monday, March 22, 2021.

How ‘happy’ are citizens in Asian economies?

How ‘happy’ are citizens in Asian economies?

PhilGuarantee-backed MSME loans surge in first two months

THE Philippine Guarantee Corp. (PhilGuarantee) guaranteed P952.5 million worth of loans for micro, small and medium enterprises (MSMEs) in the first two months of 2021, against the P207 million total at the end of 2020, after the company streamlined its application process.

The number of MSMEs who had their loans guaranteed rose to 8,839 at the end of February from 2,948 at the end of 2020, the Department of Finance said in a statement Monday, citing a report from PhilGuarantee.

“The implementation of improved processing and evaluation parameters starting this year led to this remarkable increase in the number of beneficiaries under the MSME Credit Guarantee Program,” PhilGuarantee President and CEO Alberto E. Pascual was quoted as saying.

Month on month, MSMEs with approved guarantee applications rose 90%, he said.

The loans receiving guarantees were originated by 10 accredited banks and financial institutions.

The governing board of PhilGuarantee, chaired by Finance Secretary Carlos G. Dominguez III, has approved credit guarantee facilities worth P37.7 billion to 34 banks since the program started last year.

Some 22 banks are currently applying for the MSME loan guarantee program.

“The approval of the credit guarantee facilities enabled the availability and accessibility of credit from banks that would have otherwise been reluctant to lend to MSMEs owing to the uncertainties that prevailed with the onset of the COVID-19 pandemic,” Mr. Pascual said.

The top industries that benefited from the program were wholesale and retail sectors receiving P723 million in guarantee loan cover, or 76% of the total. Other leading sectors were manufacturing (P83.6 million or 8.78% of the total); and transport, storage and communication (P65 million or 6.8%).

PhilGuarantee is implementing the government’s P120-billion MSME credit guarantee program, a scheme meant to help the hard-hit sector bounce back from the economic downturn.

The program hopes to encourage lending by banks by helping them overcome their risk aversion in lending to MSMEs.

Mr. Pascual said the target is to increase the MSME guarantee loan portfolio to P4 billion and grow the number of beneficiaries to 8,000 companies by year’s end.

The loans applied for guarantees average P1 million, with some as low as P100,000.

The government injected an additional P5 billion into PhilGuarantee, which it will use to guarantee loans of larger companies requiring up to P300 million in loan cover.

The program provides 50% guarantee cover for working capital loans and up to 80% for term loans of up to seven years for use in capital expenditure projects. — Beatrice M. Laforga

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