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BSP to prioritize financial stability as pandemic continues

THE CENTRAL BANK will prioritize financial stability as the coronavirus pandemic stretches on, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said on Friday.

“Supervisory priority areas moving forward include monitoring of asset quality, declining profitability, liquidity and capital positions,” Mr. Diokno said in his speech at the virtual induction ceremony of the Financial Executives of the Philippines (FINEX).

The central bank chief said the banking system remains “stable, sound, resilient and inclusive” and will continue being so in the next years despite the risks caused by the pandemic.

The capital adequacy ratio of big banks is currently around the 15-16% level, above the minimum thresholds of 10% and eight percent set by the BSP and the Bank of International Settlements, respectively.

Meanwhile, the industry’s non-performing loan ratio stood at 3.81% at end-November 2020. The BSP said this could have 4.6% at end-2020, still better than the 17.6% seen in 2002 as a consequence of the Asian Financial Crisis.

“At the onset of the pandemic, the banking system had significant capital and liquidity buffers built up due to both regulatory requirements and several years of favorable banking conditions,” Mr. Diokno said.

“The result of our stress tests suggests that banks can continue to lend and prosper through a broad range of adverse scenarios,” he added.

Meanwhile, Mr. Diokno said annualized bank lending rates have been declining, particularly the lower loan limit.

In his presentation at the event, he said P143.8 billion in loans to micro-, small, and medium-sized enterprises were used by banks as alternate reserve compliance as of the reserve week ending Dec. 17. — LWTN

Banks told to submit reports on accounts covered by AMLC freeze order

THE CENTRAL BANK has ordered lenders to submit reports on accounts tied to the Communist Party of the Philippines (CPP) and the New People’s Army (NPA) as well as those linked to Islamic extremist groups following freeze orders issued by the Anti-Money Laundering Council (AMLC).

Circular Letter No. CL-2021-007 signed by Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier requires banks to submit suspicious transaction reports on all previous transactions of the designated persons, organizations, associations or groups of persons, within five days from receipt of the Sanctions Freeze Order.

Covered institutions also need to send a written return to the AMLC detailing information about the account, identities of those within the freeze order as well as the ground for identification for related accounts.

This is in line with the implementing rules and regulations of Republic Act No. 10168 or the Terrorism Financing and Prevention Act (TFPSA) of 2012.

The BSP said institutions that will continue to deal directly or indirectly with property or funds that they know or have reasonable ground to believe are owned or controlled by designated persons under the freeze order will be scrutinized.

Lenders that will make property, funds, or financial services available to designated individuals and groups will likewise face consequences.

“[They] shall be prosecuted to the fullest extent of the law pursuant to the TFPSA,” the circular said.
The AMLC last month issued a freeze order for accounts, funds, and properties that are related, owned, or controlled directly or indirectly by the CPP/NPA.

The watchdog also served a similar order for assets and bank accounts of 16 Islamic extremist groups it had identified as terrorists. These include organizations such as Maute Group, the Islamic State East Asia, Maute ISIS, Grupong ISIS, Grupo ISIS, Khilafah Islamiyah, Khilafah Islamiyah Mindanao, and Ansharul Khilafah.

The freeze order also covers international groups such as the Islamic State in Iraq, Syria, and Southeast Asia, Dawlatul Islamiyah Waliyatul Masrik, Dawlatul Islamiyyah Waliyatul Mashriq, and IS East Asia Division.

The AMLC’s move follows the signing of Republic Act No. 11479 or the Anti-Terrorism Act of 2020 in July, which granted the agency powers to freeze the assets of people and groups designated as terrorists. — L.W.T. Noble

Peso inches higher on record GIR level

THE PESO inched up against the greenback on Friday as the country’s dollar reserves reached a record high last year.

The local unit closed at P48.065 per dollar on Friday, crawling higher from its P48.07 finish on Thursday, data from the Bankers Association of the Philippines showed.

It also gained 2.3 centavos from its P48.088 close on Jan. 8.

The peso opened Friday’s session at P48.05 per dollar. Its weakest showing was at P48.08 while its intraday best was at P48.041 against the greenback.

Dollars traded increased to $512.1 million on Friday from $449.05 million on Thursday.

Data showing record-high gross international reserves (GIR) at end-2020 pushed the peso higher, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

GIR reached a record $109.8 billion at end-December, increasing by 4.8% from the $104.8 billion seen as of November and by 20% from $87.839 billion a year ago, data from the Bangko Sentral ng Pilipinas (BSP) released Friday showed. This exceeded the BSP’s $105-billion projection.

Meanwhile, a trader said in an email that the peso appreciated following a spike in US weekly jobless claims.

Reuters reported that initial claims for state unemployment benefits rose 181,000 to a seasonally adjusted 965,000 for the week ended Jan. 9, making it the highest since late August, based on data released by the US Labor Department. This is also beyond the 795,000 applications projected by a Reuters poll last week. — LWTN with Reuters

MPIC gets $130M loan from Japan bank

Metro Pacific Investments Corporation (MPIC) signed a $130 million (P6.2 billion) loan from a Japanese bank to partially finance its investments this year.

The company said in a disclosure to the stock exchange on Friday that it signed a five-year term loan from Mizuho Bank, Ltd. on Jan. 14.

In May, the company said that it was planning to halve capital expenditures to P80 billion, including spending for discretionary projects in hospitality, logistics and some water projects to conserve cash after profits plummeted during the stricter lockdown.

The Manuel V. Pangilinan-led company reported that it expects its full-year 2020 net income to end at over P10 billion, down from the P15.6 billion in 2019.

MPIC reported core net earnings of P2.4 billion in the third quarter last year, or around 37% lower from 2019, but higher than the second quarter’s P1.9 billion. The firm expects recovery in 2022.

MPIC’s attributable earnings in the first nine months declined 58% to P5.01 billion as economic activity was stifled during the strict lockdown implemented in the second quarter. Nine-month core net income fell 38% to P7.7 billion.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

Shares in MPIC closed at P4.45 apiece on Friday, up 2.30% or 10 centavos. — Jenina P. Ibañez

Megawide ready to move on from NAIA rehabilitation project

Megawide Construction Corp. is willing to move on to other projects if the Manila International Airport Authority (MIAA) board chooses not to reconsider its decision to revoke the firm’s original proponent status for the Ninoy Aquino International Airport (NAIA) rehabilitation.

“We are awaiting formal communication from the government so that we know what our next steps will be,” the company said in a statement on Friday.

“We already submitted our Motion for Reconsideration but if it is still not enough to meet government requirements, we will respect their decision and move on to other projects that have equal significance.”

Megawide Chairman and Chief Executive Officer Edgar B. Saavedra in November said that the company has been approached by potential investors and financial institutions for the P109 billion airport rehabilitation project.

MIAA in December revoked the original proponent status of the company and its Indian partner GMR Infrastructure Limited, after which the consortium submitted an appeal for reconsideration.

The company had said that it has complied with all requirements with the government, adding that it has submitted additional documents to prove its financial capability for the project.

San Miguel Corporation has since expressed interest in operating the airport, submitting an unsolicited operations and maintenance proposal denying interest in acquiring a share of revenues. Philippine Airport Ground Support Solutions also expressed interest.

“We truly wish the government and other interested parties success in the transformation of NAIA,” Megawide said. — Jenina P. Ibañez

MerryMart wholesale operations to begin by April

MerryMart Consumer Corp. on Friday said it expects to begin its wholesale operations in April, after it completes a new logistics distribution center in Tarlac.

In a disclosure to the stock exchange, MerryMart said it has started accepting membership applications for the MM Wholesale Club program, which is free for now.

“The MM wholesale operations are slated to commence and fully service its members by April 2021, in time for the full completion of the new modern 11,000-square meter (sq.m.) MM Logistics Distribution Center in CentralHub-Tarlac in North Luzon,” the company said.

At present, MerryMart operates a distribution center in Laguna.

Starting April, MerryMart said the coverage area for bulk deliveries will include Metro Manila, Pangasinan, Tarlac, Zambales, Nueva Ecija, Pampanga, Bataan, Bulacan, Rizal, Cavite, Laguna, Batangas and Quezon.

Members in the covered areas can avail of free delivery for a minimum of P15,000 worth of wholesale purchases.

The distribution hub will serve both MM Wholesale Club members and the retail branches of the MerryMart Group
“The addition of this new 11,000 sq.m. modern MM Logistics Distribution Center will be an important step in supporting and increasing the expansion velocity of MerryMart’s various retail formats,” MerryMart Chairman and Edgar J. Injap Sia II said in a statement.

Membership is open to businesses and individuals. Those who sign up for membership until April 15 will receive a gift.

MerryMart is a wholly-owned subsidiary of Injap Investments Inc., which also owns 35% of DoubleDragon Properties Corp.

Shares in MerryMart closed 5% up to P7.60 each on Friday.

PhilRatings gives A plus rating to Alsons’ commercial papers

Alcantara-led Alsons Consolidated Resources, Inc. (ACR) said it has received a “PRS A+” issuer credit rating with a stable outlook from the Philippine Rating Services Corporation (PhilRatings) for the planned first tranche of its commercial papers program this year.

In a statement, the Alcantara-led listed firm said it is aiming to list and issue the first tranche or P2 billion of the commercial papers program of up to P3 billion within the year, once it secures the approval of the Securities and Exchange Commission.

A PRS A+ credit rating, according to PhilRatings, is an assessment that shows the company’s above-average capacity to meet its financial commitments relative to other firms. A “stable outlook” is assigned when a rating is likely to be maintained or to remain unchanged in the next twelve months.

PhilRatings said ACR received an A+ rating on the back of a positive growth outlook for the Mindanao region, which is expected to increase demand for power. It also cited the company’s “ability to establish joint ventures with strong partners for particular projects.”

“We have once more deemed it favorable to tap the short-term capital markets for our working capital needs as we continue to pursue power projects that we hope will contribute to the economic recovery of our country, by helping create new jobs and stimulate the local economies in our project locations and in the areas where we operate,” ACR Deputy Chief Financial Officer Philip Edward B. Sagun said in a statement.

ACR, a private sector power generator based in Mindanao, has four power facilities with an aggregate capacity of 468 megawatts (MW).

The company’s net profit in the nine months ending September climbed nearly seven times to P360.6 million.

ACR said that its previous CP issuance of up to P2.5 billion in 2018 was also given a similar A+ rating by PhilRatings.

Shares of ACR jumped 3.84 % to finish at P1.35 apiece on Friday. — Angelica Y. Yang

PLDT Enterprise partners with AF Payments

The enterprise business arm of PLDT Inc. has partnered with AF Payments Inc. (AFPI) to enable a modernized fare system for the transportation sector.

PLDT Enterprise’s Smart Tracker, a GPS tracking system that monitors vehicle location, will be used in the contact payments firm’s automated fare collection system “to provide a complete fleet management and fare collection solution to public transport operators.”

The Transportation department said it will be rolling out a cashless transit card payment system that can be used for all modes of public transportation nationwide this year.

AFPI has been working with public transport operators of train, jeepney and bus fleets, including the three light rail systems of Manila and the EDSA bus consortiums, on modern fare collection based on contactless cards and QR codes.

“The Smart Tracker solution aims to simplify the management of fleets of public transport vehicles. With the service, Public Transport Operators can choose to provide locator links which commuters can access in order to better manage their commute and travel time,” Jojo Gendrano, first vice president and head of PLDT Enterprise Core Business, said in a statement.

PLDT in a separate statement said its fiber infrastructure reached 429,000 kilometers in December, while its wireless arm Smart Communications Inc. increased the number of its base stations to over 59,000 as of December 2020.

The fiber infrastructure supports Smart’s mobile networks, which now cover 96% of the population and is available in 95% of the country’s cities and municipalities.

“Building on the strengths of our technological capabilities and laser focus on customer-centricity, we stepped into 2021 with many new aspirations. Our journey continues further by capitalizing on the various improvements we made in 2020, when we pivoted toward market leadership. This year, we will accelerate our capabilities and achieve more milestones,” Alfredo S. Panlilio, Smart Communications president and CEO and PLDT chief revenue officer, said.

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. — Jenina P. Ibañez

Manila Water inks deal with San Jose water district

A consortium led by a Manila Water Company, Inc. subsidiary recently inked a deal with the San Jose City Water District (SJCWD) to develop its water supply and sanitation facilities.

In a regulatory filing, the listed water firm said its subsidiary Manila Water Philippine Ventures, Inc. (MWPVI) and Tubig Pilipinas Group, Inc. signed and executed the joint venture agreement with SJCWD.

Under the deal, the consortium will undertake the “design, construction, rehabilitation, maintenance, operation, financing, expansion and management” of water supply and sanitation facilities and services in San Jose, Nueva Ecija.

Last month, the regulatory office of the Metropolitan Waterworks and Sewerage System (MWSS) said that customers of the two water firms operating in Metro Manila- including Manila Water- would experience lower monthly bills in 2021.

Manila Water, which holds the concession for the East Zone of Metro Manila, reported a 24% fall in net income to P3.20 billion for the three quarters ending September due to lower contribution from its units amid the coronavirus disease 2019 (COVID-19) pandemic.

Shares of Manila Water slipped by 0.24% to close at P16.76 apiece. — Angelica Y. Yang

Stocks drop on negative US data, stimulus concerns

STOCKS ended lower on Friday on negative US data and news of fresh stimulus to boost the world’s largest economy.

The benchmark Philippine Stock Exchange index (PSEi) slid 34.69 points or 0.47% to end at 7,238.46 on Friday while the broader all shares index declined 8.46 points or 0.19% to close at 4,342.48.

“Local shares closed lower as investors digested the biggest jobless claims surge since March last year, outweighing the unveiling of [US President-elect Joe] Biden’s stimulus plan. Initial jobless claims surged more than expected to 965,000 for the week ended Jan. 9,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said on Viber.

PNB Securities Inc. President Manuel Antonio G. Lisbona said the local market ended marginally lower this week while the region’s bourses closed mixed.

“(They) seemed to have largely shrugged off the announcement of a $1.9 trillion stimulus plan by US President elect Joe Biden,” Mr. Lisbona said in a text message.

“It seems to me that investors continue to be wary of the inflationary implications of continued stimulus not just by the US but also other governments as they struggle with mitigating the effects of the pandemic,” he added.

Majority of sectoral indices ended Friday’s session with losses. Financials decreased by 10.94 points or 0.72% to 1,495.45; holding firms shed 48.66 points or 0.65% to 7,371.35; property inched down by 18 points or 0.48% to 3,694.82; and industrials declined by 20.83 points or 0.21% to 9,479.01.

Meanwhile, mining and oil rose by 140.12 points or 1.42% to 9,948.66 and services improved 5.71 points or 0.36% to 1,558.56.

Value turnover stood at P11.03 billion with 147.24 billion issues switching hands, higher than the previous session’s P10.96 billion with 30.09 billion issues.

Advancers led decliners, 120 versus 103, while 42 names closed unchanged.

Net foreign selling reached P423.29 million on Friday, a turnaround from the net inflows worth P242.46 million seen on Thursday.

Mr. Lisbona noted that investors have grown “weary” of the pandemic and were looking for other catalysts to take on risk, as the market has stayed above the psychological support level of 7,000.

“Support is pegged at 7,070 and if the market should break below that, 6,800 will be the next key support level. The index will likely consolidate between 7,000 and 7,432 if there are no new positive developments,” he said. — A.Y. Yang

Apple plans upgraded MacBook Pros with return of magnetic charging

Apple Inc. is planning upgraded MacBook Pro laptops this year with much faster processors, updated displays and the return of its magnetic charger, according to a person with knowledge of the plans.

The new laptops are planned to come in two screen sizes, a 14-inch model codenamed J314 and a 16-inch version internally dubbed J316. Both will use next-generation versions of Apple’s in-house Mac processors, upgraded with more cores and enhanced graphics, the person said, asking not to be named as the products are not yet announced.

These devices will mark Apple’s first high-end laptops to move away from Intel Corp. components. The company updated its base 13-inch MacBook Pro with its own M1 chip in November, to broadly positive reviews.

Beyond the more powerful chips, Apple is also planning to step up the displays in its new MacBook Pros with brighter, higher-contrast panels, the person said. The new Macs will look similar to the current versions, albeit with minor design changes. Apple is aiming to launch the new MacBook Pros around the middle of the year.

An Apple spokeswoman didn’t immediately respond to a request for comment. 

A major change to the new computers will be how they charge. Over the past five years, Apple has relied on USB-C ports for both power and data transfer on its laptops, making them compatible with other manufacturers’ chargers. But the company is now bringing back MagSafe, the magnetic power adapter that means any accidental yanking of the power cable would simply detach it from the laptop rather than pull down the entire computer. It was a favorite feature of the company’s portable PC lineup that was first introduced in 2006 and most recently revived for its latest lineup of iPhones. 

The return of MagSafe with the next MacBook Pros will also allow those laptops to charge at a faster rate, the person said. The connector will be similar to the elongated pill-shape design of the older MagSafe port.

Despite moving away from USB-C for charging, Apple will still include multiple USB-C ports on its future Macs.

In developing its next set of Mac laptops, Apple has also tested versions that remove the Touch Bar from its laptop keyboards. The Touch Bar, introduced as part of the last MacBook Pro redesign in 2016, turns the keyboard’s top row from function keys into a touchscreen strip that can display a variety of information and a changing set of controls to adapt to apps and tasks. Some professional users have said they found that control scheme less convenient than physical keys.

Apple is also planning a redesigned MacBook Air, but that is not expected to be released until long after the next MacBook Pros. – Bloomberg 

PSC case against payroll cheats goes to regional trial court

The Department of Justice found probable cause on the complaint filed by the Philippine Sports Commission (PSC) and the National Bureau of Investigation against former employees involved in a payroll padding scheme.

In a 23-page resolution signed by Assistant State Prosecutor Moises Acayan, Sr. Deputy State Prosecutor Richard Fadullon and Prosecutor General Benedicto Malcontento, the filing of several counts of qualified theft, attempted qualified theft, cyber-related forgery and computer-related fraud has been recommended against Paul Ignacio, Michaelle Jones Velarde and Lymuel Seguilla.

The PSC has been resolutely following the case, determined to bring those accountable to justice.

The episode has been a learning experience for the sports agency, forcing it to look at the handling of its affairs and make the necessary changes.

“It is a regrettable incident but it compelled us to fast-track upgrades and consider a second look at existing processes,” PSC Chairman William Ramirez in a release…

Aside from the NBI which has been helping the PSC from the onset, Mr. Ramirez also said that they sought the help of the Office of the Solicitor General and the Anti-Money Laundering Council in ensuring that the funds are returned to the government. 

As recommended in the Justice Department resolution, cases will be filed in the Regional Trial Court of Imus, Cavite.

In July last year, Mr. Ignacio was discovered redirecting funds to his own bank account.

He used to handle payroll preparation for the agency. During the investigation, two more employees were discovered working in connivance with Mr. Ignacio.

The modus reportedly had been done for the last five years and cost the government millions of pesos before it was uncovered.

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