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Ferragamo and Amazon launch joint lawsuits vs counterfeiters

AMAZON and Salvatore Ferragamo have filed two joint lawsuits against four individuals and three entities for counterfeiting Ferragamo’s products.

“The defendants attempted to offer the infringing products in Amazon’s store, violating Amazon’s policies, Ferragamo’s intellectual property rights, and the law,” said a joint statement released by the companies.

A lawsuit was filed in the United States District Court for the Western District of Washington alleging the defendants conspired to use Ferragamo’s registered trademarks without authorization, to deceive customers about the authenticity and origin of the products and the affiliation with Ferragamo.

Amazon prohibits the sale of counterfeit products in its stores. It said that it had invested more than $500 million in 2019 to protect customers and brands from fraud and abuse, including counterfeit. “As a result of Amazon’s efforts, 99.9% of all products viewed by customers on Amazon have not received a valid counterfeit complaint,” the statement said.

In June 2020, Amazon launched its Counterfeit Crimes Unit, a global team that works with law enforcers. It has filed joint lawsuits with Italian luxury brand Valentino, cosmetics brand KF Beauty, family travel accessory brand JL Childress, and YETI.

Meanwhile, Ferragamo conducts both offline and online anti-counterfeiting measures. “In 2020, its online monitoring activities enabled the brand to intercept, block, and remove 3 million illicit profiles from the main social media platforms worldwide and approximately 94,000 counterfeit products were blocked and removed from online auction sites. Ferragamo has also filed actions against hundreds of illegal websites through civil proceedings in New York federal court, and was recently awarded $2.8 million in damages” it said in the statement.

Ferragamo also conducts offline investigations and pursues infringers through civil litigation and out-of-court proceedings. In 2020, 240,000 products bearing Ferragamo’s counterfeit trademarks were seized worldwide with the assistance of law enforcement authorities.

Bill declaring Davao ‘chocolate capital’ triggers scuffle over Philippine branding

By Maya M. Padillo, Correspondent
with Marifi S. Jara, Mindanao Bureau Chief

DAVAO CITY — Legislation declaring the Davao region the cacao and chocolate capital of the Philippines has provoked opposition from other cacao growing regions, who instead proposed more inclusive branding declaring the Philippines as the country of origin for exports.

Val D. Turtur, president of the Cacao Industry Development Association of Mindanao, Inc. and former chair of the Philippine Cacao Industry Council (PCIC), said the approval of Senate Bill (SB) No. 1741 “will get the attention of the international community that the National Government is supportive of the cacao industry,” while gaining the region’s farmers some leverage on pricing.

The House version of the legislation, House Bill No. 7460, was approved on final reading in January. After the bills are harmonized by a bicameral conference committee, it will go up for signing by President Rodrigo R. Duterte, a Davao City native.

The PCIC, chaired by Armi Lopez-Garcia who is chief executive officer of Cebu-based Tablea Chocolate, filed a position paper in January opposing the declaration, citing its negative impact on other areas in the country that are being developed for cacao production.

“The bill, if passed into a law, will negatively impact the cacao industry development road map. It is for this reason that PCIC, the official voice of the Philippine Cacao Industry, in its General Assembly on Jan. 27, 2021, unanimously opposed SB No. 1741.  Unfortunately, the Senate chose to ignore the unanimous desire of the whole cacao industry,” Ms. Garcia said in an e-mail interview.

She said the PCIC will be discussing whether it will lobby for a veto.

“The President is from Davao, but if the President looks at the national development of the cacao industry, he may just rise above Davao’s interests and see the interest of the country as a whole,” she said.

Senator Cynthia A. Villar, author of the Senate bill and chair of the Senate agriculture committee, said in a Feb. 9 statement that the bill “simply gives recognition for the pioneering, outstanding collective contribution of the cacao farmers (in Davao) who supply dry cacao beans to the processors and manufacturers.”

She also said the bill aims to make Davao City and the Davao Region “an inspiration and a benchmark” for other local governments, noting that the region accounted for about 79% of the country’s cacao output.

Rex Victor P. Puentespina, farmer and chocolate maker at Davao City-based Malagos Agri-Ventures Corp., said the recognition makes Davao Region as the “flag bearer of sought-after fine flavor cacao beans.”

“Programs for the farmers must follow after the recognition to make it more sustainable. It’s the private sector and the farmers who really worked hard for Davao Region to be recognized,” Mr. Puentespina said in a phone interview.

“We always emphasize this to the farmers; since we are now on the radar, they should level up and produce more to strengthen our presence in the international scene at para hindi masayang ang lahat (so we don’t waste what we have worked hard for),” he added.

Under the cacao road map, the government set a production goal of 100,000 metric tons (MT) by 2022, pushed back from the original target year of 2020.

Philippine Statistics Authority (PSA) data show cacao production has increased at an average annual rate of 9% from 6,030 MT in 2015 to 8,490 MT in 2019. In the last quarter of 2020, the PSA reported that Davao Region “remained the major producer of cacao” with an 82% share of national output.

“We are thankful that finally the National Government has recognized the efforts of the cacao farmers and growers in Davao City and Davao Region. Hopefully, President Duterte will sign it… We are now on the radar of all chocolate makers around the world as a fine flavor cocoa bean producer,” Mr. Puentespina said.

Ms. Garcia said the national council is “not against recognizing Davao’s achievements… And Davao deserves it” but a Presidential proclamation, rather than a law, would be more appropriate.

“We don’t think that it is Congress’s role to pass laws declaring product capitals.  Also, the product capitals may change; then they would need to repeal a previous law and pass a new one. Congress has better and more urgent things to do,” she said.

“Would it not be better,” she added, to develop a Philippine branding that positions the country as the “quality cacao” capital of the world?

The Ranger FX4 gets Max moxie

A brawny 4×4 joins Ford’s pickup stable

YOU MUST have heard that Ford Philippines recently launched its latest off-road monster — the highly capable Ford Ranger FX4 Max. The FX4 Max is inspired by the Ranger Raptor, and is packaged as a laudable 4×4 machine that offers serious off-road essentials — such as two-inch monotube Fox shocks and an auxiliary switch pack meant to control its aftermarket accessories — albeit at a price point that is a notch more affordable than the line-topping Ranger Raptor.

I was happy to have had the opportunity to test-drive it early on, and in its natural environment too — the untamed earth. Our team set forth to Basseri de Lipa in Batangas, which was where there was a technical off-road course waiting for us ahead. It involved a succession of pretty intimidating obstacles, which we were tasked to drive through alone (for social distancing), but with the guidance of an instructor who communicated with us via walkie talkie.

One of the things that I found impressive was the fact that we did not even have to engage in 4L (Four Low) throughout the entire obstacle course. The mighty FX4 Max breezed through every climb and dip, even as we remained in 4H (Four High). Mind you, the obstacle stages were not simple dirt road dips that one may occasionally come across say, driving around Tagaytay. We’re talking earth pits that I could practically fit into, and hill climbs of the kind that would get soft off-road vehicles stuck. Frankly, there is a minimum requirement of serious machinery to realistically gain the confidence to take on complex natural obstructions — and the FX4 Max far exceeds this minimum.

As you may have imagined, navigating through our off-road course meant quite a bumpy ride — but my favorite practical feature of the FX4 Max is its being equipped with high-performance Fox shock absorbers in both the front and rear. These, combined with its leaf spring architecture and tuned front coil springs, made every major roadblock and pothole feel like cushioned bumps that were really no big deal. I assure you, that the feedback inside the cabin was nothing compared to how hardcore the situation looked from the outside. And that’s a great benefit, in my opinion, to possess the thorough driving capability alongside noteworthy cabin comfort and special amenities such as leather seats and carbon accents with Miko suede inserts and FX4 Max embroidery. Its leather-wrapped steering wheel also adds a nice touch.

Greeting me inside the cabin is an eight-inch color touchscreen with Apple Carplay and Android Auto compatibility, Bluetooth streaming, and Ford Sync 3 voice-activated controls. Two USB ports are also available for devices.

Moreover, I appreciated the vehicle’s sport pedals because keeping one’s feet snug on the pedals are of utmost importance during off-road driving. The FX4 Max’s body-mounted metal hoop side steps are the no-slip kind — rugged enough for the outdoors, easy to clean, and positioned high enough so as not to interfere with the vehicle’s ground clearance. This will also discourage any possible snagging of materials from the ground.

While the FX4 Max is a more hardcore off-roader than the more tech-driven Ranger Wildtrak, it is currently priced at an introductory price of P1,698,000, which makes it P300,000 less than the purchase price of a Ranger Raptor. Unique to the FX4 Max compared to the other two mentioned models is its handy auxiliary switch pack (this is also found in Ford’s legendary F-series), which is mounted on the dash to give the driver quick control access to his other aftermarket equipment and accessories installed in the vehicle. And in order to support the power supply to the (possible) other additional accessories installed on the truck, the FX4 Max carries a 250A alternator so it can better facilitate greater power demand. After all, the battery is another item we would especially like to conserve while in the wild outdoors.

Powering the brawny FX4 Max is the same 2.0-liter bi-turbo diesel engine used in both the Ranger Raptor and Wildtrak. It generates 213ps and 500Nm of torque, and is paired with a powerful 10-speed automatic transmission. This amount of power combined with the high-performing Fox shocks mean that the FX4 Max can handle a payload of up to approximately one ton! It also advertises a towing capability of up to 3,500 kg — and that means a lot for individuals who seek this type of vehicle not simply for off-road fun, but to fulfill a special need dictated by their work or environment.

Furthermore, driving the FX4 Max in Batangas also had me test the truck’s handy hill descent control down some long and steep inclines. In case you are unfamiliar with the technology, what it does is automatically apply the brakes for you while rolling downhill so that you can better focus your attention on steering the vehicle and navigating through the terrain. You can also easily slow down the descent by briefly tapping on the brakes, or accelerate it further by tapping on the accelerator pedal. We also demonstrated during this exercise that the HDC can be kept on, even while running further (and not just exclusively during steep descents).

PK Umashankar, Ford Philippines president and managing director, shared that, “The FX4 Max builds on the success of the Ranger as a rugged and versatile pickup while harnessing the winning off-roading capabilities of the Ranger Raptor. True to our Live the Ranger Life philosophy, the FX4 Max caters to customers who are up for challenges and go over the horizon to experience their adventure of a lifetime with the pickup truck’s uncompromising blend of toughness and power.”

At the end of the day, that was some pretty serious off-road driving that we did. It was immersive, enjoyable, and definitely impressive. When I look back at the technical stages and figure that at different points, we had a tire hanging in mid-air and other stunt-like moves like that, I realize that it really isn’t that hard to negotiate such obstacles, given the right kind of vehicle. So, yes — I’d give most of the credit to the Ford Ranger FX4 Max for deeming the off-road course a walk in the park!

Yields on gov’t debt rise on inflation

BETS OF faster inflation in the near term as food costs continued to increase pushed yields on government securities (GS) to soar last week.

GS yields, which move opposite to prices, went up across the board last week, increasing by an average of 29.99 basis points (bps) week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of March 12 published on the Philippine Dealing System’s website.

Yields on the 91-, 182- and 364-day Treasury bills rose by 15.63 bps, 14.63 bps, and 17.06 bps, respectively, to 1.2379%, 1.3413%, and 1.854% on Friday from their week-ago levels.

At the belly, the rates of two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) jumped by 28.24 bps, 39.03 bps, 43.79 bps, 44.78 bps, and 39.66 bps, respectively, to 2.4674%, 2.8768%, 3.1865%, 3.4489%, and 3.8755%.

The rates of longer-termed papers likewise increased, with the 10-, 20-, and 25-year T-bonds rising by 39.61 bps, 23.07 bps, and 24.38 bps, respectively, to yield 4.3767%, 5.1014%, and 5.1154%.

“Yields charged higher on the back of the global reflation story, with US Treasury yields floating higher after expectations for faster growth,” ING Bank N.V. Manila Branch Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

“On the domestic front, inflation has been the main story with the headline print expected to move even higher mainly due to supply-side disruptions,” Mr. Mapa said.

A bond trader shared the same assessment, saying local bond yields soared last week amid “lingering domestic inflation concerns” after the government released the February data.

“The release of encouraging unemployment report as of January 2021 at 8.7% has provided further support for local yields to inch higher as the recent unemployment imprint suggested that the Philippine labor market remains on track to recover from the COVID-19 (coronavirus disease 2019) pandemic,” the bond trader added in an e-mail.

The selloff in US Treasuries resumed on Friday to push the rate of the benchmark 10-year paper above the one-year high of 1.60%, on track to increase for the seventh straight week, as the market expects inflation to pick up amid vaccine rollouts and after US President Joseph R. Biden, Jr. signed a $1.9-trillion stimulus program on Thursday to fuel the world’s largest economy, Reuters reported.

Back home, the Philippine Statistics Authority (PSA) earlier reported that February headline inflation stood at 4.7%, the highest reading in 26 months, as food costs continue to rise.

This pushed inflation to average at 4.5% for the first two months, already above the Bangko Sentral ng Pilipinas’ 2-4% target range for the year.

Meanwhile, preliminary results of the January round of the Labor Force Survey reported around 3.953 million unemployed Filipinos, up from 3.813 million in October 2020 and 2.391 million in January 2020.

This put the unemployment rate at 8.7% in January, unchanged from October 2020 but higher than the 5.3% seen in January 2020.

Traders said the market will be monitoring the meetings of the US and Japan central banks for leads this week.

“Local yields, tracking their global peers, might increase as the US Federal Reserve and the Bank of Japan are expected to keep their respective policy settings unchanged with market expectations of no potential hints on bond market intervention from both monetary authorities,” the bond trader said.

The US Federal Reserve will meet on March 16-17 while the Bank of Japan will review its policy settings on March 18-19.

Mr. Mapa, meanwhile, said local bond yields will continue to track US Treasuries’ movements and domestic inflation expectations. — Lourdes O. Pilar

Negative market sentiment drags down AC Energy stock

AC ENERGY Corp. (ACEN) was the sixth most actively traded stock last week, with analysts attributing the movement to overall negative market sentiment as coronavirus cases rise, offsetting positive developments on the stock such as news of a Singapore firm’s investment into the company.

Data from the Philippine Stock Exchange (PSE) showed a total of 205.86 million shares worth P1.41 billion being traded from March 8 to 12.

ACEN shares closed at P7.1 on Friday, down 0.6% from P7.14 a week ago. Year to date, the stock’s share price has gone down by 30.4%.

“ACEN’S movement [last] week was affected by the broader market’s downward move [last] week, as investors felt cautious over the surging COVID-19 (coronavirus disease 2019) cases in the country, as well as the inflation concerns being experienced across the globe,” Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said in a Viber message.

“Sentiment was weak, but bargain hunters managed to pick up ACEN shares towards the latter part of the week,” he added.

New COVID-19 cases per day have increased by an average of 3,000 last week — a trend not observed since September. On Saturday, new cases reached 5,000 based on figures released by the Department of Health.

Last week saw the stock’s closing price go down for the first two trading days before rebounding to the next three days.

Meanwhile, the PSE index (PSEi) closed at 6,728.55 last Friday, 152.82 points or 2.2% lower on a week-on-week basis.

In a separate Viber message, UPCC Securities Corp. Equities Trader Aristotle D. Reyes, Jr. noted company-specific developments such as the release of its earnings report and the details on the investment of an affiliate of Singapore firm GIC Pte. Ltd. for a 17.5% ownership stake in the Ayala-led firm.

“[M]ost investors already know about it, so it did not affect the price that much,” he said.

In a regulatory filing last Wednesday, ACEN said that Arran Investment Pte. Ltd. would be subscribing to four billion primary shares through a private placement at P2.97 apiece, totaling P11.88 billion.

The deal is subject to pre-closing conditions, namely: ACEN’s completion of its stock rights offering of 2.27 billion shares at P2.37 apiece; and the issuance by the Treasurer of the Commonwealth of Australia — or his delegate — of a notice of no objection under the Foreign Acquisitions and Takeovers Act 1975 with respect to Arran and the AC Energy and Infrastructure Corp. “international transaction.”

“Over the short term, the reports about the P12-billion investment from Arran Investment Pte. Ltd in ACEN may have not significantly affected the price movement of the issue, but over the long term, ACEN believes that the private placement will help them raise additional capital for its various projects and acquisitions, as well as repay some of its debt,” Timson Securities’ Mr. Pangan said.

“ACEN still seems to be in a sideways movement, which may be due to investors having already priced in the [full-year 2020] income results when it outperformed the [PSEi] last year,” he said.

ACEN posted an attributable net income of P3.75 billion last year, up 65 times from P57.65 million in 2019, based on the company’s financial statements disclosed to the stock exchange last Tuesday.

“For the coming weeks, I can see ACEN to still trade at a range since the market is really waiting for the follow-on offering price. [I am] placing support at P6.5 and P8 as the resistance,” UPCC Securities’ Mr. Reyes said.

For Timson Securities’ Mr. Pangan: “ACEN has been consolidating ever since the year started, with support lying at the P6.00 area, and immediate resistance around the P8.00 level. We see the stock consolidating within this area until stronger catalysts come into play for the company.” — Marissa Mae M. Ramos

CLSU develops contaminant-removing product for aquaculture

A SOIL and water conditioner that removes pollutants from water used in tilapia aquaculture has been developed by Central Luzon State University (CLSU).

Juvy J. Monserate, head of CLSU’s nanotechnology research and development facility and project leader for the conditioner, said in a mobile phone interview that the product uses zeolite-silica nanocomposites (ZNC) and has been proven effective in cleaning pond water.

“The project initially evaluated the effects of the zeolite-silica nanoparticles on water quality and growth parameters of tilapia under laboratory conditions and has yielded positive results,” Mr. Monserate said.

Mr. Monserate said ZNC improves water quality and soil condition for tilapia production via the use of modified nano activated carbon and nanoclay clinoptholite.

He added that nano-silica and nano-zeolite composites also bring down the level of ammonia-nitrogen and total dissolved solids in water used for tilapia farms.

“Other possible benefits of the technology include reuse or recycling of water after harvests, thus, reducing the pressure towards the groundwater resulting in healthier fish and higher income for fish farmers,” Mr. Monserate said.

The project team estimates that fish farmers using ZNC will need to invest P11,000 per hectare to use ZNC, with the payoff being higher yields and reduced production costs overall, “since a portion of the water can be recycled,” Mr. Monserate said.

“Succeeding production will also cost much less since the need for inputs will fall,” he added, touting a potential return on investment for ZNC users of 40.6%, against 25.3% for non-users.

Mr. Monserate said estimated tilapia survival rates in farms using ZNC were 60%, as opposed to 40% for the control group.

According to Mr. Monserate, the project is due to be field tested by June or July at Isabela State University and other institutions.

The project was funded by the Department of Science and Technology – Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development.

The Philippine Statistics Authority estimates that total fish production hit 4.403 million metric tons (MT) in 2020, down 0.3%. 

Aquaculture farms accounted for 52.8% or 2.32 million MT of overall production, followed by municipal fisheries at 25% or 1.10 million MT, and commercial fisheries at 22.2% or 978,170 MT. — Revin Mikhael D. Ochave

L’Oreal focuses on doing good

BECAUSE our choices shape our lives and of those around us, it is important for those to be good. Cosmetics giant L’Oreal —  which also controls brands Garnier, Maybelline, and Nyx, among many others —  is committing to give consumers the chance to make good choices, outlining its motives and motions in a transparency summit held earlier this month.

The summit, held in Mar. 4, was held online.

“Health is everybody’s number one priority. Sustainability is more than ever, an imperative. Consumers want products that are good for them, and good for the planet,” said L’Oreal’s Deputy CEO Nicholas Hieronimus.

The group is able to sell six to seven billion products to 1.2 billion people worldwide, he said. “Not only are we the world’s beauty leader when it comes to marketing creativity, and brand equity; we are also the world leader in superior performance, safety, and formula innocuity.”

With such great power comes great responsibility. This can cover everything from nixing animal testing, to explaining formulations and ingredients in an effort to be transparent.

Barbara Lavernos, L’Oreal Chief Research, Innovation, and Technology Officer, outlined the group’s devotion to science. The group employs 4,000 people from 60 nationalities, in 50 disciplines, in 21 research centers around the globe, producing 500 patents every year.

One of the chief problems of the cosmetic industry has been its association with animal testing. Ms. Lavernos pointedout that the company started to curb animal testing begun during the 1970s. “Even then, we were convinced that testing on animals should be banned. To achieve this, the solution was to successfully reconstruct human skin,” she explained. Elisabeth Bouhadana, L’Oreal Paris Director for Scientific Communication, said that they have not tested on animals for 30 years.

Ms. Bouhadana spoke about the specific brand initiatives of L’Oreal: for example, devoting a website, Inside Our Products, that will aim to explain a product’s formulation and ingredients. Over at La Roche-Posay, they are developing QR codes that would lead a consumer to more information about the product; while the line of YSL cosmetics would include information on sustainable sourcing.

Of these, one of the most forward campaigns was from Garnier. Mathieu Richome, Garnier Sustainability and Scientific Communications Manager, said that they have listed the origins of their ingredients on their labels since 2017, while in 2020, they developed labeling to include a product’s environmental and social impacts.

“This transparency will also force us to continuously work to get better,” Mr. Hieronimus said. — JL Garcia

Ford picks up where it left off

By Kap Maceda Aguila

FORD PHILIPPINES is definitely doubling down on a bet that has clearly been enabling it to cash in consistently.

With the launch of the Ford Ranger FX4 Max, the Blue Oval is serving notice that it is not just about to yield the 4×4 pickup crown which it annexed last year (cornering 41% of total segment sales). The Ranger, in particular the Ranger Raptor, continues to be a popular pickup model in the country. Last year, two of every three Raptors sold in the ASEAN region went to a Filipino, revealed Ford Philippines President and Managing Director PK Umashankar. In fact, since its September 2018 launch, more than 10,000 units of the Ranger Raptor have been sold here.

As we’ve previously reported, the Ranger lineup alone accounted for the company’s 9,767 units sold in 2020 — 66% of 14,775 total vehicles moved. In January, 800 vehicles out of Ford’s 1,720-unit take-up were comprised of pickups.

Meanwhile, “(The) FX4 Max… delivers off-road driving capabilities inspired by the Ranger Raptor while living up to the Ranger’s brand of comfort, safety, and versatility,” the company said in a statement.

With the launch of the FX4 Max, Ford now grows its Ranger portfolio to 14 models. If you add the two F-150 variants, that’s 16 pickup offerings that the brand is peddling here. Now that can get a little tricky if you talk positioning, something we asked Mr. Umashankar during an online session with the media.

The way that the Ford brain trust is approaching this challenge is by keying in three distinct tracks for the pickup lineup: Lifestyle, Adventure, and Performance. Obviously, Lifestyle denotes a more all-rounder vehicle, Adventure can give off-road ability, and Performance is a more serious off-the-beaten-track machine. Common to all these is, of course, their workhorse or utilitarian ability.

The FX4 Max takes that Performance role — something that the pickup model’s halo Raptor also banners. Indeed, the accoutrements fitted on the FX4 Max suggest a “Raptor lite” approach. You get the Raptor panache at (for the moment) P300,000 less.

“The Raptor is still our halo brand for the Ranger,” said Mr. Umashankar. “It’s a true performance truck.”

As for the 4×4 segment, yes, the company wants to keep its leadership in that space, while working on its position (second) in the pickup market in general — made possible by a 24% share.

This only gives teeth (and sense) to Ford’s campaign, “Live the Ranger Life,” which endeavors to highlight and celebrate the many ways that the renowned strength and engineering capabilities of the Ranger reflects and support its customers’ personal goals and drive in life, centered around five guiding values: “Up and Over,” (tackling challenges); “Can’t Help But Help,” (assistance to others); “Where There Isn’t a Path, Carve One,” (fearless leadership), “Bring Others Along the Journey,” (family and friends); and “We Make Our Own Fun,” (fun in driving).

Philippine job situation at a glance

Philippine job situation at a glance

How PSEi member stocks performed — March 12, 2021

Here’s a quick glance at how PSEi stocks fared on Friday, March 12, 2021.

Peso likely to go up vs dollar

THE PESO may continue to appreciate against the greenback this week ahead of the release of latest data on remittances and budget deficit.

The local currency closed at P48.455 per dollar on Friday, stronger by 4.5 centavos than its P48.50 finish on Thursday, data from the Bankers Association of the Philippines showed. Week on week, the peso likewise climbed by 10.5 centavos from its P48.56-per-dollar close on March 5.

The local unit closed stronger on Friday after latest data showed a worse contraction in goods imports in January, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.

For this week, the peso is expected to appreciate further as the market awaits the scheduled releases of major economic reports this week such as the latest fiscal deficit, overseas Filipino workers’ remittances, and balance of payments (BoP) data, he said.

The Bureau of the Treasury will release on Monday, March 15, the January cash operations report containing the latest deficit data. Meanwhile, the central bank is set to report remittances data for January and the February BoP position on Monday and Friday, respectively.

The budget deficit rose by a fifth to P302.6 billion in December, bringing the 2020 tally to a P1.371-trillion gap, more than double the P660 billion in 2019. Last year’s deficit was equivalent to 7.63% of the country’s economic output, the highest on record.

Meanwhile, cash remittances slipped by 0.8% in 2020 to $29.903 billion from $30.133 billion the year prior. This was the first annual contraction since 2001’s 0.3% decline.

On the other hand, the country posted a $752-million BoP deficit in January following 11 straight months of surfeit. Year on year, this was smaller than the $1.355-billion gap in January 2020.

The dollar will likely continue to weaken this week as the market reacts to the newly signed $1.9-trillion stimulus in the United States that aims to support the recovery of the world’s largest economy, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

RCBC’s Mr. Ricafort added that investors will continue to monitor the country’s coronavirus case count, progress on a proposed law that would lower the corporate income tax, and the government’s vaccination program.

Mr. Ricafort expects the peso to range from P48.30 to P48.60 versus the dollar this week, while UnionBank’s Mr. Asuncion sees it settling within P48.28 to P48.43 against the greenback. — B.M. Laforga

Stocks to remain volatile on renewed virus fears

LOCAL SHARES are expected to remain volatile this week as more parts of the country reimplemented curfews to limit movement amid rising coronavirus disease 2019 (COVID-19) infections.

The benchmark Philippine Stock Exchange index (PSEi) went up by 9.37 points or 0.13% to close at 6,728.55 on Friday.

Week on week, however, the local bourse declined by 152.82 points from its 6,881.37 close on March 5.

“The local index headed lower [last] week, which we think is largely due to the recent spike in COVID-19 case counts and investor caution around prospects of further [government] action, such as a Metro Manila-wide curfew,” China Bank Securities Corp. Research Head Rastine Mackie D. Mercado said in an e-mail on Friday.

“Data releases [last] week also weighed on investor sentiment as January’s unemployment rate remained unchanged from October 2020, and factory output figures continued to decline through January,” Mr. Mercado added.

“[The] two-week curfew in Metro Manila… [and the] granular lockdown in some localities, communities, households and proposed checkpoints, could prevent COVID-19 from spreading, but could reduce business or economic activities,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message on Saturday.

The Health department reported 5,000 new COVID-19 cases on Saturday, the highest single-day tally in seven months.

Meanwhile, the Philippine Statistics Authority last week released the preliminary results of the January round of the Labor Force Survey, which showed that around 3.953 million Filipinos are unemployed. The result put the country’s unemployment rate at 8.7%, steady from October but higher than the 5.3% posted in January 2020.

For this week, Mr. Ricafort said the progress of the COVID-19 vaccine rollout in the country and abroad will continue to affect investor sentiment, with the market also expected to monitor government initiatives meant to help the economy.

He placed the PSEi’s support at 6,600, while he expects resistance to finish at around 6,800.

“Some bottom fishing or bargain-hunting activities have taken place for more than a month already,” Mr. Ricafort said.

Meanwhile, China Bank’s Mr. Mercado expects the index to finish above the 6,700 levels this week, with the resistance seen at 6,900.

“Heading into the next trading week, we expect volatility to persist as investors try to balance their cautiousness around short-term risks, rising case counts, and optimism from the medium-term recovery outlook as the vaccination program moves into full swing in [the second half of the year],” he added.

“Prospects of more restrictive quarantine measures are also seen to curb the likelihood of strong gains next week as investors pare down their buying activity,” Mr. Mercado said. — Keren Concepcion G. Valmonte

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